===============
S E L I G M A N
[GRAPHIC]
SELIGMAN
COMMON STOCK
FUND, INC.
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SEEKING FAVORABLE CURRENT INCOME AND LONG-TERM GROWTH
OF BOTH INCOME AND CAPITAL WITHOUT EXPOSING CAPITAL TO UNDUE RISK
JUNE 30, 1997 o MID-YEAR REPORT
<PAGE>
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OVER THE LONG TERM -- J. & W. SELIGMAN & CO. INCORPORATED
- --------------------------------------------------------------------------------
TIME IS THE TEST
In an industry that has changed dramatically in recent years, it's
comforting to know that stability, tradition, and consistent professional
service can still be found in an investment management firm.
J. & W. Seligman & Co. Incorporated has been providing financial services
for more than 130 years. From its beginning, Seligman has followed a long-term
approach to making money for its clients, by managing investment products and
services of the highest quality. Today, Seligman manages the Seligman Group of
Funds, which offers investors more than 50 investment options.
A PLACE IN HISTORY
Established in 1864, Seligman played a major role in the geographical
expansion and industrial development of the United States. The firm helped
finance the westward path of the railroads and the building of the Panama Canal.
In the late 1800s and early 1900s, the firm was instrumental in financing the
fledgling automobile and steel industries. Seligman also participated in the
original underwritings for some of the nation's most prominent companies,
including General Motors, Victor Talking Machine, United Artists Theater
Circuit, and Maytag. In 1929, Seligman introduced Tri-Continental Corporation --
which today is the nation's largest diversified closed-end investment company.
-----------------
[PICTURE]
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JAMES, JESSE AND
JOSEPH SELIGMAN
SELIGMAN COMMON STOCK FUND
Seligman began managing its first mutual fund, Broad Street Investing Co.,
now known as Seligman Common Stock Fund, in 1930. Though far from the best of
times -- the stock market had crashed and the country was experiencing a long
depression -- Seligman Common Stock Fund survived its infancy and has gone on to
become one of the nation's most successful funds. Seligman Common Stock Fund has
helped investors seek their financial goals through all market conditions by
staying true to its objective of growth and income without undue risk.
TABLE OF CONTENTS
To the Shareholders ................................... 1
Interview with Your Portfolio Managers ................ 2
Performance Overview .................................. 4
Portfolio Overview .................................... 6
Portfolio of Investments .............................. 8
Statement of Assets and Liabilities ................... 11
Statement of Operations ............................... 12
Statements of Changes in Net Assets ................... 13
Notes to Financial Statements ......................... 15
Financial Highlights .................................. 17
Report of Independent Auditors ........................ 19
Board of Directors and Executive Officers ............. 20
Glossary of Financial Terms ........................... 21
"The uncertainties of war and its effects on particular industries make
imperative a careful balancing of risks and a continued broad diversification of
investments."
-- EARLE BAILIE,
FUND CHAIRMAN
1932-1940
"The Fund continues to be a true growth and income fund. Investment strategy
focuses on increasing dividends and identifying undervalued stocks with strong
potential for long-term growth."
-- WILLIAM C. MORRIS,
FUND CHAIRMAN
1989-PRESENT
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TO THE SHAREHOLDERS
For the six months ended June 30, 1997, Seligman Common Stock Fund posted a
total return of 17.18% based on the net asset value of Class A shares, which
outpaced the 15.52% total return of its peers, as measured by the Lipper Growth
and Income Funds Average. The Fund's total return lagged the 20.61% total return
of the Standard & Poor's 500 Composite Stock Price Index (S&P 500). Additional
information on the Fund's investment results appears on page 4.
Thus far, 1997 has shown great promise for both the domestic economy and
the financial markets. Instead of increasing inflation, the growing economy
actually generated lower producer prices for six consecutive months. The Federal
Reserve Board's decision to leave the federal funds rate unchanged in May also
helped tame inflation fears and gave further support to the already strong
financial markets. Low unemployment and high consumer confidence levels
continued, while consumer spending was relatively restrained.
Overall, the low interest rate environment characterizing the second
quarter helped drive the equity market forward, and improved the performance of
the Fund's finance and insurance stocks, which are a significant portion of the
overall portfolio. However, the equity market advances were disproportionately
affected by the strong performance from the 25 largest, more liquid stocks whose
valuations neared record highs. In this narrow market, the Fund's diversified
portfolio, which holds stocks within a wide range of capitalizations, lagged the
S&P 500. On the other hand, beginning in May the equity market advances
broadened to include a wider group of stocks. This trend may bode well for
stocks with reasonable valuations relative to earnings, such as are found in the
Fund's portfolio.
The long-term outlook for the US economy, financial markets, and the Fund
remains positive. Productivity improvements, driven in large part by the
deployment of technology, have helped reduce corporate costs and increased
profitability. While market volatility has increased this year, and the
possibility of a short-term correction in the markets is real, we remain
positive about the Fund's long-term prospects, particularly if the broadening of
the market seen in the second quarter continues.
We are pleased to introduce your redesigned Shareholder Report. This change
is part of a corporate effort to enhance the overall clarity and quality of all
communications to our Shareholders. We hope you find the additional information
contained herein helpful.
We thank you for your continued support of Seligman Common Stock Fund, and
look forward to serving your investment needs in the many years to come.
A discussion with your Portfolio Managers and the Fund's portfolio of
investments follow this letter.
By order of the Board of Directors,
/s/William C. Morris
- --------------------
William C. Morris
Chairman
/s/Brian T. Zino
----------------
Brian T. Zino
President
August 1, 1997
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1
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INTERVIEW WITH YOUR PORTFOLIO MANAGERS, CHARLES C. SMITH, JR. AND ODETTE GALLI
Q. HOW DID SELIGMAN COMMON STOCK FUND PERFORM IN THE LAST SIX MONTHS?
A. Seligman Common Stock Fund had a total return of 17.18% based on the net
asset value of Class A shares. The Fund's return significantly outpaced the
15.52% total return of its peers as measured by the Lipper Growth and Income
Funds Average, while it lagged the 20.61% total return of the Standard &
Poor's 500 Composite Stock Price Index (S&P 500). Seligman Common Stock Fund
continued to provide its shareholders a dividend yield that was
significantly higher than that of the S&P 500 and the Lipper Growth and
Income Funds Average.
Q. WHICH ECONOMIC FACTORS AFFECTED THE FUND'S PERFORMANCE IN THE FIRST HALF OF
THE YEAR?
A. The Federal Reserve Board acted once in the six-month period, increasing the
federal funds rate by 25 basis points in March, but leaving it unchanged in
May. The March action was due to the first-quarter surge in economic growth,
which led to fears of inflation and noticeable volatility in the financial
markets. The second quarter, however, brought moderate economic growth and a
continuation of the low inflation levels that had persisted throughout the
year. As a result, there was a decline in interest rates that helped
strengthen equity prices and the Fund's portfolio.
Q. WHICH MARKET FACTORS INFLUENCED THE FUND'S PERFORMANCE?
A. The valuations of the largest, most liquid issues in the market continued
their dramatic rise, as evidenced by the consecutive highs reached by both
the S&P 500 and the Dow Jones Industrial Average. In fact, 25 stocks were
responsible for more than half the S&P 500's gains in the last six months,
and large-capitalization stocks as a group approached 10-year highs in their
valuations. There was, however, a broadening of the markets in May and June,
as small- and mid-capitalization stocks participated in the rallies in
greater numbers. We believe that investors are becoming more interested in
finding reasonable valuations that are more closely linked to earnings.
Q. WHAT WAS YOUR INVESTMENT STRATEGY?
A. Our strategy remains consistent. We focus on finding high-quality,
large-capitalization companies that have reasonable yields and attractive
valuations relative to their earnings. As the highest reaches of the
large-capitalization universe no longer offered reasonable value, the Fund's
investments were reoriented toward the mid-capitalization range of the
large-capitalization universe. Historically, the average capitalizations of
the S&P 500 had been similar to those of the Fund's portfolio. However, in
the last six months, we found that companies with market capitalizations
averaging $25 billion offered more attractive valuations and higher earnings
growth potential, relative to those with the largest capitalizations in the
S&P 500, such as Coca-Cola ($168.6 billion).
Q. WHICH SECTORS IN THE PORTFOLIO IMPROVED THE FUND'S PERFORMANCE?
A. There were several areas of strength in the portfolio. For example, the
Fund's significant weighting in finance and insurance stocks performed well,
[PHOTO]
SELIGMAN GROWTH AND INCOME TEAM: (FROM LEFT) RODNEY COLLINS, MARGARET DOYLE,
JONATHAN ROTH, ODETTE GALLI (CO-PORTFOLIO MANAGER), (SEATED) MELANIE RAVENELL
(ADMINISTRATIVE ASSISTANT), CHARLES C. SMITH, JR. (CO-PORTFOLIO MANAGER), AMY
FUJII
A TEAM APPROACH
Seligman Common Stock Fund is managed by the Seligman Growth and Income Team,
headed by Charles C. Smith, Jr. Mr. Smith is assisted in the management of the
Fund by seasoned research professionals who are responsible for identifying
companies in specific industry groups that offer the greatest total return
potential, consistent with the Fund's objective.
- ----
2
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INTERVIEW WITH YOUR PORTFOLIO MANAGERS, CHARLES C. SMITH, JR. AND ODETTE GALLI
benefiting from the low interest rate environment. In machinery and
industrial equipment, Ingersoll-Rand and Parker-Hannifin, two mid-sized
manufacturers of industrial equipment, posted outstanding gains. The
performance of the Fund's drugs and health care stocks, particularly
Schering-Plough and Bristol-Myers Squibb, also improved the portfolio's
results. Further pockets of strength were found in electronics and
computer-related stocks, including Motorola, Vishay Intertechnology,
Computer Associates International, and Microsoft.
Q. WHICH SECTORS IMPAIRED THE FUND'S PERFORMANCE?
A. We deliberately underweighted investments in the food and consumer goods and
services industries, as valuations in these sectors were well above their
historic averages. While this decision slightly reduced the Fund's results
in the last six months, there is still reason to exercise caution in these
areas, and it remains unlikely that further assets will be invested there in
the near term. Elsewhere, the Fund's holdings in electric, gas, and
telephone utilities, while providing superior yields, were weak in the last
six months.
Q. WHAT IS THE OUTLOOK?
A. Overall, we expect that the equity markets and the Fund will continue to
benefit from the moderate rate of economic growth and the low inflation
environment. We also believe that the Fund's portfolio will offer more
competitive returns over the long term, due to our investments in the more
reasonably valued mid-capitalization range of the large-capitalization
universe. Further, we believe that if the trends of May and June persist,
investors will renew their interest in companies with more attractive
valuations and higher earnings growth. Seligman Common Stock Fund's
portfolio should benefit from this potential shift in investor preference
and the ensuing broadening of the market.
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3
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PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS*
FOR PERIODS ENDED JUNE 30, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL
----------------------------------------------------------------
CLASS B CLASS D
SINCE SINCE
SIX ONE FIVE 10 INCEPTION INCEPTION
MONTHS YEAR YEARS YEARS 4/22/96 5/3/93
---------- ---------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
With Sales Charge 11.64% 18.41% 15.06% 11.59% n/a n/a
Without Sales Charge 17.18 24.35 16.18 12.14 n/a n/a
CLASS B
With CDSL+ 11.68 18.40 n/a n/a 19.36% n/a
Without CDSL 16.68 23.40 n/a n/a 22.61 n/a
CLASS D
With 1% CDSL 15.68 22.40 n/a n/a n/a n/a
Without CDSL 16.68 23.40 n/a n/a n/a 15.09%
S&P 500** 20.61 34.70 19.78 14.64 32.37++ 21.28+++
LIPPER GROWTH & INCOME FUNDS AVERAGE** 15.52 28.07 17.25 12.67 25.28++ 17.79+++
</TABLE>
NET ASSET VALUE
JUNE 30, 1997 DECEMBER 31, 1996 JUNE 30, 1996
-------------- -------------------- --------------
CLASS A $16.76 $14.89 $14.97
CLASS B 16.73 14.87 14.93
CLASS D 16.73 14.87 14.93
DIVIDEND AND CAPITAL GAIN INFORMATION
FOR SIX MONTHS ENDED JUNE 30, 1997
DIVIDENDS CAPITAL
PAID GAIN
------------ ----------
CLASS A $0.170 PAID $0.514
CLASS B 0.106 REALIZED 0.871
CLASS D 0.106 UNREALIZED 5.464#
- --------------------------------------------------------------------------------
* Return figures reflect any change in price per share and assume the
investment of capital gain distributions. Return figures for Class A shares
are calculated with and without the effect of the initial 4.75% maximum
sales charge. Class A share returns reflect the effect of the service fee
of up to 0.25% under the Administration, Shareholder Services and
Distribution Plan after January 1, 1993, only. Returns for Class B shares
are calculated with and without the effect of the maximum 5% contingent
deferred sales load ("CDSL"), charged only on certain redemptions made
within one year of the date of purchase, declining to 1% in the sixth year
and 0% thereafter. Returns for Class D shares are calculated with and
without the effect of the 1% CDSL, charged only on redemptions made within
one year of the date of purchase. 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.
** The S&P 500 and the Lipper Growth &Income Funds Average (Lipper Average)
are unmanaged benchmarks that assume investment of dividends. The S&P 500
does not reflect fees and sales charges, and the Lipper Average does not
reflect sales charges.The monthly performance of the Lipper Average is used
in the Performance Overview. Investors cannot invest directly in an index
or an average.
+ The CDSL is 5% for periods of one year or less, and 4% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
# Represents the per share amount of net unrealized appreciation of portfolio
securities as of June 30, 1997.
- ----
4
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PERFORMANCE OVERVIEW
GROWTH OF AN ASSUMED $10,000
INVESTMENT IN CLASS A SHARES
JUNE 30, 1987, TO JUNE 30, 1997
[THE FOLLOWING TABLE REPRESENTS A GRAPH IN THE PRINTED PIECE]
SELIGMAN COMMON STOCK FUND - CLASS A
6/30/87 9526
9/30/87 9909
12/31/87 7933
3/31/88 8332
6/30/88 8766
9/30/88 8679
12/31/88 8733
3/31/89 9236
6/30/89 9773
9/30/89 10733
12/31/89 11071
3/31/90 10963
6/30/90 11647
9/30/90 9616
12/31/90 10640
3/31/91 12387
6/30/91 12134
9/30/91 13071
12/31/91 13825
3/31/92 14056
6/30/92 14146
9/30/92 14538
12/31/92 15327
3/31/93 16070
6/30/93 16457
9/30/93 16871
12/31/93 17603
3/31/94 16777
6/30/94 16866
9/30/94 17529
12/31/94 17271
3/31/95 18740
6/30/95 20103
9/30/95 21374
12/31/95 22136
3/31/96 23259
6/30/96 24082
9/30/96 24276
12/31/96 25554
3/31/97 25944
6/30/97 29945
GROWTH OF AN ASSUMED $10,000
INVESTMENT IN CLASS B SHARES
APRIL 22, 1996+, TO JUNE 30, 1997
[THE FOLLOWING TABLE REPRESENTS A GRAPH IN THE PRINTED PIECE]
SELIGMAN COMMON STOCK FUND, INC. - CLASS B
4/22/96 10000
6/30/96 10326
9/30/96 10394
12/31/96 10921
3/31/97 11064
6/30/97 12742
GROWTH OF AN ASSUMED $10,000
INVESTMENT IN CLASS D SHARES
MAY 3, 1993+, TO JUNE 30, 1997
[THE FOLLOWING TABLE REPRESENTS A GRAPH IN THE PRINTED PIECE]
SELIGMAN COMMON STOCK FUND, INC. - CLASS D
5/3/93 10000
6/30/93 10256
9/30/93 10484
12/31/93 10908
3/31/94 10348
6/30/94 10372
9/30/94 10747
12/31/94 10555
3/31/95 11427
6/30/95 12241
9/30/95 12988
12/31/95 13423
3/31/96 14083
6/30/96 14542
9/30/96 14638
12/31/96 15380
3/31/97 15581
6/30/97 17945
These charts reflect the growth of a $10,000 investment for a 10-year period for
Class A shares and since inception for Class B and Class D shares. Since the
measured periods vary, the charts are plotted using different scales and are not
comparable.
- ----------
* Net of the 4.75% maximum initial sales charge.
** Excludes the effect of the 4% CDSL.
+ Inception date.
----
5
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PORTFOLIO OVERVIEW
DIVERSIFICATION OF ASSETS
JUNE 30, 1997
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
----------------------------
JUNE 30, DEC. 31,
ISSUES COST VALUE 1997 1996
-------- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C>
Short-Term Holdings and
Other Assets Less Liabilities .................. 2 $ 39,376,087 $ 39,376,087 4.8 12.9
--- ------------- ------------- ---- ----
Common Stocks and Convertible Issues:
Advertising .................................... 1 4,272,125 12,325,000 1.5 1.2
Aerospace/Defense .............................. 4 17,020,847 24,031,250 2.9 3.0
Apparel and Textiles ........................... 1 2,634,496 6,993,750 0.9 0.8
Automotive and Related ......................... 5 23,592,873 28,591,140 3.5 2.6
Chemicals ...................................... 5 17,034,413 20,062,993 2.5 2.5
Communications Equipment ....................... 1 4,785,217 4,327,031 0.5 --
Computer Goods and Services .................... 2 7,355,795 8,876,563 1.1 1.2
Computer Hardware/Peripherals .................. 1 4,054,163 4,652,344 0.6 --
Computer Software .............................. 1 2,940,000 3,794,063 0.5 --
Construction ................................... 1 3,606,295 6,175,000 0.8 0.8
Consumer Goods and Services .................... 8 23,607,762 53,112,712 6.5 6.8
Drugs and Health Care .......................... 7 22,908,974 42,272,352 5.2 3.0
Electrical Equipment ........................... 2 10,205,974 12,193,750 1.5 --
Electric and Gas Utilities ..................... 7 29,059,262 36,050,372 4.4 5.9
Electronics .................................... 4 22,061,478 28,782,812 3.5 2.7
Energy ......................................... 9 35,771,913 63,522,073 7.8 7.6
Environmental Services ......................... 1 2,981,630 3,325,000 0.4 0.3
Finance and Insurance .......................... 23 67,266,280 127,057,284 15.5 13.8
Food ........................................... 4 17,758,610 35,768,750 4.4 5.8
Industrial Equipment ........................... -- -- -- -- 4.9
Leisure and Entertainment ...................... 2 1,450,152 1,737,618 0.2 0.5
Machinery and Industrial Equipment ............. 9 39,848,908 59,793,673 7.3 0.7
Metals and Mining .............................. 2 10,151,332 11,850,000 1.5 0.8
Office Equipment and Services .................. 2 7,734,720 14,165,625 1.7 1.1
Paper and Packaging ............................ 4 18,964,706 23,018,876 2.8 2.9
Printing and Publishing ........................ 3 5,953,871 10,632,017 1.3 1.4
Restaurants .................................... 1 3,267,575 3,381,875 0.4 0.5
Retail Trade ................................... 7 23,751,467 29,819,044 3.7 3.1
Semiconductors ................................. 1 4,372,500 4,247,812 0.5 --
Steel .......................................... 2 7,571,759 7,637,500 0.9 1.2
Technology ..................................... -- -- -- -- 1.7
Telecommunications ............................. 5 11,755,331 15,659,040 1.9 0.8
Telephone Utilities ............................ 3 22,729,624 23,450,000 2.9 2.2
Tobacco ........................................ 1 1,371,073 1,788,263 0.2 1.1
Transportation ................................. 4 10,490,953 11,531,903 1.5 2.0
Miscellaneous/Diversified ...................... 6 21,701,940 35,327,920 4.4 4.2
--- ---------- ---------- ---- ----
139 510,034,018 775,955,405 95.2 87.1
--- ---------- ---------- ---- ----
NET ASSETS ......................................... 141 $549,410,105 $815,331,492 100.0 100.0
=== ============ ============ ===== =====
</TABLE>
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6
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PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
-----------------------
HOLDINGS
ADDITIONS INCREASE 6/30/97
- ------------ ------------ --------
COMMON STOCKS:
Bell Atlantic ................................. 100,000 100,000
GATX .......................................... 150,000 150,000
GTE ........................................... 150,000 150,000
Harley-Davidson ............................... 150,000 150,000
Illinois Tool Works ........................... 180,000 180,000
James River ................................... 200,000 200,000
Magna International
(Class A) .................................. 125,000 125,000
PacifiCorp .................................... 500,000 500,000
The Pep Boys .................................. 275,000 275,000
WorldCom ...................................... 300,000 300,000
SHARES
------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/97
- -------------- ---------- --------
COMMON STOCKS:
ALLTELL ....................................... 250,000 --
Campbell Soup ................................. 100,000 --
Central & South West .......................... 250,000 --
Cooper Industries ............................. 150,000 --
Dow Chemical .................................. 100,000 --
Entergy ....................................... 250,000 --
Great Western Financial ....................... 200,000 --
International Paper ........................... 175,000 --
PanEnergy ..................................... 200,000 --
UST ........................................... 200,000 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
LARGEST INDUSTRIES
AT JUNE 30, 1997
[THE FOLLOWING TABLE REPRESENTS A BAR CHART IN THE PRINTED PIECE]
Percent Of
Value Net Assets
----------------------------------
Finance and Insurance $127,057,284 15.5%
Energy 63,522,073 7.8
Machinery and
Industrial Equipment 59,793,673 7.3
Consumer Goods and Services 53,112,712 6.5
Drugs and Health Care 42,272,352 5.2
LARGEST PORTFOLIO HOLDINGS
AT JUNE 30, 1997
SECURITY VALUE
- ---------- --------------
American International Group ....... $14,937,500
Royal Dutch Petroleum .............. 14,137,500
Bank of New York ................... 13,050,000
Colgate-Palmolive .................. 13,050,000
Omnicom Group ...................... 12,325,000
Corning ............................ 11,125,000
General Electric ................... 11,113,750
PacifiCorp ......................... 11,000,000
Procter & Gamble ................... 10,593,750
AMP ................................ 10,437,500
----
7
<PAGE>
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PORTFOLIO OF INVESTMENTS
June 30, 1997
SHARES VALUE
--------- --------
COMMON STOCKS 94.2%
ADVERTISING 1.5%
Omnicom Group .......................... 200,000 $12,325,000
---------
AEROSPACE/DEFENSE 2.9%
General Dynamics ....................... 50,000 3,750,000
General Motors (Class H) ............... 75,000 4,331,250
Raytheon ............................... 150,000 7,650,000
United Technologies .................... 100,000 8,300,000
---------
24,031,250
---------
APPAREL AND TEXTILES 0.9%
Liz Claiborne .......................... 150,000 6,993,750
---------
AUTOMOTIVE AND RELATED 3.5%
Borg-Warner Automotive ................. 106,200 5,741,438
Echlin ................................. 145,000 5,220,000
Harley-Davidson ........................ 150,000 7,190,625
Magna International (Class A) .......... 125,000 7,523,438
Volkswagen (ADRs)* (Germany) ........... 19,000 2,915,639
---------
28,591,140
---------
CHEMICALS 2.5%
Bayer (Germany) ........................ 76,000 2,929,868
duPont ................................. 80,000 5,030,000
Hercules ............................... 100,000 4,787,500
Morton International ................... 100,000 3,018,750
Olin ................................... 110,000 4,296,875
---------
20,062,993
---------
COMMUNICATIONS EQUIPMENT 0.5%
QUALCOMM* .............................. 85,000 4,327,031
---------
COMPUTER GOODS AND SERVICES 1.1%
Automatic Data Processing .............. 100,000 4,700,000
Computer Associates International ...... 75,000 4,176,563
---------
8,876,563
---------
COMPUTER HARDWARE/
PERIPHERALS 0.6%
Sun Microsystems* ...................... 125,000 4,652,344
---------
COMPUTER SOFTWARE 0.5%
Microsoft* ............................. 30,000 3,794,063
---------
CONSTRUCTION 0.8%
Sherwin-Williams ....................... 200,000 6,175,000
---------
CONSUMER GOODS AND
SERVICES 6.5%
Adidas (Germany) ....................... 13,646 1,526,530
Allied Domecq (UK) ..................... 230,000 1,650,940
Christian Dior (France) ................ 10,000 1,650,867
Colgate-Palmolive ...................... 200,000 13,050,000
Eastman Kodak .......................... 100,000 7,675,000
International Flavors & Fragrances ..... 150,000 7,575,000
PepsiCo ................................ 250,000 9,390,625
Procter & Gamble ....................... 75,000 10,593,750
------------
53,112,712
------------
DRUGS AND HEALTH CARE 5.2%
Abbott Laboratories .................... 75,000 5,006,250
American Home Products ................. 120,000 9,180,000
Baxter International ................... 125,000 6,531,250
Bristol-Myers Squibb ................... 80,000 6,480,000
Merck .................................. 50,000 5,175,000
Novartis* (Switzerland) ................ 1,700 2,718,602
Schering-Plough ........................ 150,000 7,181,250
-----------
42,272,352
-----------
ELECTRICAL EQUIPMENT 1.5%
Thomas & Betts ......................... 100,000 5,256,250
Westinghouse Electric .................. 300,000 6,937,500
-----------
12,193,750
-----------
ELECTRIC AND GAS UTILITIES 4.4%
Companhia Energetica de
Minas Gerais (ADRs) (Brazil) ......... 22,700 1,142,854
CINergy ................................ 250,000 8,703,125
Electricidade de Portugal (ADRs)
(Portugal) ........................... 32,200 1,159,200
Empresa Nacional de Electricidad
(ADRs) (Spain) ....................... 50,000 4,253,125
Hong Kong Electric (Hong Kong) ......... 1,800,000 7,249,258
PacifiCorp ............................. 500,000 11,000,000
VEBA (Germany) ......................... 45,000 2,542,810
-----------
36,050,372
-----------
ELECTRONICS 3.5%
AMP .................................... 250,000 10,437,500
Kemet* ................................. 275,000 6,857,812
Motorola ............................... 75,000 5,700,000
Vishay Intertechnology* ................ 200,000 5,787,500
-----------
28,782,812
-----------
- ---------
See footnotes on page 10.
- ----
8
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
June 30, 1997
SHARES VALUE
--------- --------
ENERGY 7.8%
Atlantic Richfield ..................... 100,000 $ 7,050,000
Enron .................................. 150,000 6,121,875
Exxon .................................. 100,000 6,150,000
Mobil .................................. 100,000 6,987,500
Royal Dutch Petroleum
(Netherlands) ...................... 260,000 14,137,500
Schlumberger ........................... 50,000 6,250,000
Texaco ................................. 70,000 7,612,500
Total (Class B) (France) ............... 15,396 1,556,448
Williams Companies ..................... 175,000 7,656,250
------------
63,522,073
------------
ENVIRONMENTAL SERVICES 0.4%
Browning-Ferris Industries ............. 100,000 3,325,000
------------
FINANCE AND INSURANCE 15.4%
Ahmanson (H.F.) ........................ 235,000 10,105,000
American International Group ........... 100,000 14,937,500
Aon .................................... 150,000 7,762,500
AXA-UAP (France) ....................... 20,045 1,246,906
Banco Bilbao Vizcaya (Spain) ........... 20,700 1,682,253
Bank of Ireland (UK) ................... 190,000 2,090,770
Bank of New York ....................... 300,000 13,050,000
Bankers Trust .......................... 100,000 8,700,000
CIGNA .................................. 30,000 5,325,000
Citicorp ............................... 50,000 6,028,125
Federal National Mortgage
Association .......................... 200,000 8,725,000
General Re ............................. 50,000 9,100,000
Grupo Financiero Banamex Accival
(Class B) (Mexico) ................... 207,200 543,681
Hartford Financial Services Group ...... 70,000 5,792,500
HSBC Holdings (UK) ..................... 50,000 1,503,808
ING Groep (Netherlands) ................ 76,136 3,512,059
Irish Life (UK) ........................ 380,000 1,934,318
Mellon Bank ............................ 200,000 9,025,000
National Australia Bank (ADRs)
(Australia) .......................... 50,000 3,565,625
St. Paul Companies ..................... 60,000 4,575,000
TIG Holdings ........................... 135,000 4,218,750
Zurich Versicherungs (Switzerland) ..... 6,000 2,388,489
------------
125,812,284
------------
FOOD 4.4%
ConAgra ................................ 150,000 9,618,750
CPC International ...................... 100,000 9,231,250
General Mills .......................... 100,000 6,512,500
Sara Lee ............................... 250,000 10,406,250
------------
35,768,750
------------
LEISURE AND ENTERTAINMENT 0.2%
Mandarin Oriental* (Hong Kong) ......... 300,000 390,000
Television Broadcast (Hong Kong) ....... 300,000 1,347,618
------------
1,737,618
------------
MACHINERY AND INDUSTRIAL
EQUIPMENT 7.3%
BTR (UK) ............................... 320,000 1,093,918
Emerson Electric ....................... 120,000 6,607,500
GATX ................................... 150,000 8,662,500
General Electric ....................... 170,000 11,113,750
General Signal ......................... 150,000 6,543,750
Illinois Tool Works .................... 180,000 8,988,750
Ingersoll-Rand ......................... 120,000 7,410,000
Mannesman (Germany) .................... 4,000 1,787,568
Parker-Hannifin ........................ 125,000 7,585,937
------------
59,793,673
------------
METALS AND MINING 1.5%
Allegheny Teledyne ..................... 175,000 4,725,000
Reynolds Metals ........................ 100,000 7,125,000
------------
11,850,000
------------
OFFICE EQUIPMENT AND
SERVICES 1.7%
IKON Office Solutions .................. 150,000 3,740,625
Pitney Bowes ........................... 150,000 10,425,000
------------
14,165,625
------------
PAPER AND PACKAGING 2.8%
James River ............................ 200,000 7,400,000
Kimberly-Clark ......................... 100,000 4,975,000
Mead ................................... 150,000 9,337,500
Stora Kopparbergs (Class B)
(Sweden) ............................. 80,000 1,306,376
------------
23,018,876
------------
PRINTING AND PUBLISHING 1.3%
Elsevier (Netherlands) ................. 55,000 919,517
Knight-Ridder Newspapers ............... 100,000 4,906,250
Tribune ................................ 100,000 4,806,250
------------
10,632,017
------------
RESTAURANTS 0.4%
McDonald's ............................. 70,000 3,381,875
------------
- ---------
See footnotes on page 10.
----
9
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS
June 30, 1997
SHARES OR
PRIN. AMT. VALUE
---------- -------
RETAIL TRADE 3.2%
May Department Stores .................. 100,000 shs. $ 4,725,000
OfficeMax* ............................. 125,000 1,804,688
The Pep Boys ........................... 275,000 9,367,188
Tesco (UK) ............................. 184,600 1,134,668
Wal-Mart ............................... 150,000 5,071,875
Woolworth .............................. 150,000 3,600,000
------------
25,703,419
------------
SEMICONDUCTORS 0.5%
Intel .................................. 30,000 4,247,812
------------
STEEL 0.9%
AK Steel Holding ....................... 65,000 2,868,125
Worthington Industries ................. 260,000 4,769,375
------------
7,637,500
------------
TELECOMMUNICATIONS 1.9%
Alcatel Alsthom Compagnie
Generale d'Electricite (France) ...... 17,000 2,129,448
Tele Danmark (ADSs) (Denmark) .......... 70,000 1,828,750
Telebras (ADRs) (Brazil) ............... 7,000 1,062,250
Telecom Italia-Di Risp (Italy) ......... 585,000 1,047,967
WorldCom ............................... 300,000 9,590,625
------------
15,659,040
------------
TELEPHONE UTILITIES 2.9%
Bell Atlantic .......................... 100,000 7,587,500
GTE .................................... 150,000 6,581,250
SBC Communications ..................... 150,000 9,281,250
------------
23,450,000
------------
TOBACCO 0.2%
B.A.T. Industries (UK) ................. 200,000 1,788,263
------------
TRANSPORTATION 1.3%
British Airways (ADRs) (UK) ............ 21,000 2,413,688
Burlington Northern Santa Fe ........... 80,000 7,190,000
Jurong Shipyard (Singapore) ............ 150,000 650,486
------------
10,254,174
------------
MISCELLANEOUS/DIVERSIFIED 4.2%
AlliedSignal ........................... 75,000 6,300,000
Corning ................................ 200,000 11,125,000
Minnesota Mining &
Manufacturing ........................ 75,000 7,650,000
Pacific Dunlop (Australia) ............. 1,100,000 3,254,482
Tenneco ................................ 125,000 5,648,438
------------
33,977,920
------------
TOTAL COMMON STOCKS
(Cost $502,219,908) .................... 767,967,051
------------
CONVERTIBLE BONDS 0.5%
FINANCE AND INSURANCE 0.1%
LibLife International (UK), 6 1/2%,
9/30/2004 ............................ $1,000,000 1,245,000
------------
TRANSPORTATION 0.2%
Nippon Yusen (Japan), 2%,
9/29/2000 ............................ 140,000,000** 1,277,729
------------
MISCELLANEOUS/DIVERSIFIED 0.2%
Teco Electric & Machinery
(Taiwan), 2 3/4%, 4/15/2004 ........... $1,500,000 1,350,000
------------
TOTAL CONVERTIBLE BONDS
(Cost $4,042,754) ...................... 3,872,729
------------
CONVERTIBLE PREFERRED STOCKS 0.5%
(Cost $3,771,356)
RETAIL TRADE 0.5%
Kmart Financing 7 3/4% .................. 75,000 shs. 4,115,625
------------
SHORT-TERM HOLDINGS 5.5%
Bank of Montreal, Grand
Cayman Fixed Time
Deposit, 6 1/8%, 7/1/1997 ............... 23,000,000 23,000,000
Republic National Bank of
New York, Grand Cayman
Fixed Time Deposit,
6%, 7/1/1997 ......................... 22,400,000 22,400,000
------------
TOTAL SHORT-TERM HOLDINGS
(Cost $45,400,000) ..................... 45,400,000
------------
TOTAL INVESTMENTS 100.7%
(Cost $555,434,018) .................... 821,355,405
OTHER ASSETS
LESS LIABILITIES (0.7)% .............. (6,023,913)
------------
NET ASSETS 100.0% ..................... $815,331,492
============
- ----------
* Non-income producing security.
** Principal amount reported in Japanese Yen.
See Notes to Financial Statements.
- ----
10
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997
ASSETS:
Investments, at value:
Common stocks and Convertible issues
(cost $510,034,018) ............ $775,955,405
Short-term holdings
(cost $45,400,000) ............. 45,400,000 $821,355,405
-----------
Cash ................................................... 2,128,233
Receivable for Capital Stock sold ...................... 2,613,080
Receivable for interest and dividends .................. 1,299,032
Expenses prepaid to shareholder service agent .......... 159,981
Other 79,444
------------
TOTAL ASSETS ........................................... 827,635,175
------------
LIABILITIES:
Payable for securities purchased ....................... 9,916,749
Payable for Capital Stock repurchased .................. 1,119,900
Accrued expenses, taxes, and other ..................... 1,267,034
------------
TOTAL LIABILITIES ...................................... 12,303,683
------------
NET ASSETS ............................................. $815,331,492
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.50 par value;
500,000,000 shares authorized;
48,663,510 shares outstanding):
Class A .............................................. $ 21,670,165
Class B .............................................. 388,352
Class D .............................................. 2,273,238
Additional paid-in capital ............................. 483,434,272
Dividends in excess of net investment income ........... (687,412)
Undistributed net realized gain ........................ 42,335,469
Net unrealized appreciation of investments ............. 267,040,568
Net unrealized depreciation on
translation of assets and liabilities
denominated in foreign currencies ...................... (1,123,160)
------------
NET ASSETS ............................................. $815,331,492
============
NET ASSET VALUE PER SHARE:
CLASS A ($726,254,382 / 43,340,330 shares) ............. $16.76
======
CLASS B ($12,997,006 / 776,703 shares) ................. $16.73
======
CLASS D ($76,080,104 / 4,546,477 shares) ............... $16.73
======
- ----------
See Notes to Financial Statements.
----
11
<PAGE>
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997
<S> <C> <C>
INVESTMENT INCOME:
Dividends ..................................... $ 8,672,148
Interest ...................................... 1,801,061
Other ......................................... 111,871
-------------
TOTAL INVESTMENT INCOME
(net of foreign taxes withheld of $138,214).. $ 10,585,080
EXPENSES:
Management fee ................................ 2,444,576
Distribution and service fees ................. 1,207,148
Shareholder account services .................. 594,972
Custody and related services .................. 108,000
Shareholder reports and communications ........ 74,910
Registration .................................. 59,896
Auditing and legal fees ....................... 42,035
Directors' fees and expenses .................. 17,548
Miscellaneous ................................. 24,638
-------------
TOTAL EXPENSES ................................................ 4,573,723
-------------
NET INVESTMENT INCOME ......................................... 6,011,357
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments .............................. 42,848,210
Net realized loss from foreign currency transactions .......... (488,660)
Net change in unrealized appreciation
of investments ................................................ 75,381,201
Net change in unrealized appreciation on translation of
assets and liabilities denominated in foreign currencies ...... (2,005,280)
-------------
NET GAIN ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS ....................................... 115,735,471
-------------
INCREASE IN NET ASSETS FROM OPERATIONS ........................ $ 121,746,828
=============
</TABLE>
- ----------
See Notes to Financial Statements.
- ----
12
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
------------ --------------
<S> <C> <C>
OPERATIONS:
Net investment income ....................................... $ 6,011,357 $ 15,992,537
Net realized gain on investments ............................ 42,848,210 62,861,837
Net realized loss from foreign currency transactions ........ (488,660) (9,298)
Net change in unrealized appreciation of investments ........ 75,381,201 20,969,267
Net change in unrealized appreciation on translation
of assets and liabilities denominated in
foreign currencies ........................................ (2,005,280) (158,076)
------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS ...................... 121,746,828 99,656,267
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A .................................................. (7,286,936) (14,590,224)
Class B .................................................. (66,991) (34,814)
Class D .................................................. (456,704) (813,879)
Net realized gain on investments:
Class A .................................................. (21,840,128) (47,224,171)
Class B .................................................. (380,673) (297,882)
Class D .................................................. (2,201,734) (4,385,491)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ................... (32,233,166) (67,346,461)
------------- -------------
</TABLE>
- ----------
(Continued on page 14.)
----
13
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS (continued)
<TABLE>
<CAPTION>
SHARES
---------------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996 JUNE 30, 1997 DECEMBER 31, 1996
------------- ----------------- ------------ ------------------
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares:
<S> <C> <C> <C> <C>
Class A .................................. 740,567 2,178,472 $ 11,591,882 $ 32,299,564
Class B .................................. 298,835 430,908 4,723,159 6,449,796
Class D .................................. 406,255 1,319,042 6,337,132 19,486,806
Investment of dividends:
Class A .................................. 248,689 527,914 4,003,783 7,838,581
Class B .................................. 3,851 2,114 62,476 31,288
Class D .................................. 26,051 50,273 419,205 745,246
Exchanged from associated Funds:
Class A .................................. 3,042,670 5,995,029 47,585,327 89,181,764
Class B .................................. 84,518 9,871 1,337,577 146,507
Class D .................................. 402,810 481,390 6,514,512 7,120,548
Shares issued in payment of
gain distributions:
Class A .................................. 895,869 2,201,193 15,176,068 33,016,448
Class B .................................. 21,368 17,548 361,437 262,950
Class D .................................. 121,627 273,306 2,057,871 4,087,158
--------- ---------- ----------- ------------
Total ....................................... 6,293,110 13,487,060 100,170,429 200,666,656
--------- ---------- ----------- ------------
Cost of shares repurchased:
Class A .................................. (2,368,499) (4,436,075) (37,295,028) (65,928,248)
Class B .................................. (22,014) (5,175) (357,887) (77,652)
Class D .................................. (533,088) (502,645) (8,368,706) (7,458,967)
Exchanged into associated Funds:
Class A .................................. (3,290,918) (5,701,122) (51,504,928) (84,564,193)
Class B .................................. (43,709) (21,412) (684,538) (324,343)
Class D .................................. (177,680) (610,189) (2,790,638) (8,937,833)
--------- ---------- ----------- ------------
Total ....................................... (6,435,908) (11,276,618) (101,001,725) (167,291,236)
--------- ---------- ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ............. (142,798) 2,210,442 (831,296) 33,375,420
========= ========== ----------- ------------
INCREASE IN NET ASSETS 88,682,366 65,685,226
NET ASSETS:
Beginning of period 726,649,126 660,963,900
----------- ------------
END OF PERIOD (including dividends in excess of net investment income and
undistributed net investment income of $(687,412) and $1,123,357,
respectively) $815,331,492 $726,649,126
============ ============
</TABLE>
- ------------------
* The Fund began offering Class B shares on April 22, 1996.
See Notes to Financial Statements.
- ----
14
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Common Stock Fund, Inc. (the "Fund")
offers three classes of shares. All shares existing prior to May 3, 1993, the
commencement of Class D shares, were classified as Class A shares. The Fund
began offering Class B shares on April 22, 1996. 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 load ("CDSL") of 1% on redemptions within 18 months after
purchase. Class B shares are sold without an initial sales charge but are
subject to a distribution fee of 0.75%, a service fee of up to 0.25% on an
annual basis, and a CDSL, if applicable, of 5% on redemptions in the first year
after 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. 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 CDSL
of 1% imposed on certain redemptions made within one year after purchase. The
three 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
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 and convertible issues
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. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are
maintained in USdollars. The market value of investment securities and other
assets and liabilities denominated in foreign currencies are translated into
US 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 US dollars at the rate of exchange prevailing on the
respective dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the portfolio.
Similarly, the Fund separates the effect of changes in foreign exchange
rates from the fluctuations arising from changes in the market prices of
portfolio securities sold during the period.
c. FEDERAL TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
d. SECURITY TRANSACTIONS AND RELATED INVESTMENT
INCOME -- Investment transactions are recorded on trade dates. Identified
cost of investments sold is used for both financial statement and federal
income tax purposes. Dividends receivable and payable are recorded on
ex-dividend dates, except that certain dividends from foreign securities
where the ex-dividend dates may have passed are recorded as soon as the Fund
is informed of the dividend. Interest income is recorded on an accrual
basis.
e. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than
class-specific expenses), and realized and unrealized gains or losses are
allocated daily to each class of shares based upon the relative value of
shares of each class. Class-specific expenses, which include distribution
and service fees and any other items that are specifically attributable to a
particular class, are charged directly to such class. For the six months
ended June 30, 1997, distribution and service fees were the only
class-specific expenses.
f. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders during the year from net
investment income or net realized gains may differ from their ultimate
treatment for federal income tax purposes. These differences are caused
primarily by differences in the timing of the recognition of certain
components of income, expense, or realized capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassification
will have no effect on net assets, results of operations, or net asset value
per share 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 six months ended June 30, 1997, amounted to $255,288,361 and $227,970,191,
respectively.
At June 30, 1997, 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
$271,008,195 and $5,086,808, respectively.
----
15
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
4. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides or arranges for the necessary personnel and facilities. Seligman
Henderson Co. (the "Subadviser"), an entity owned 50% each by the Manager and
Henderson plc, supervises and directs all or a portion of the Fund's foreign
investments. For this service, the Subadviser receives a fee from the Manager,
payable monthly. 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 or by Henderson plc. The Manager
receives a fee, calculated daily and payable monthly, equal to 0.65% per annum
of the first $1 billion of the Fund's average daily net assets, 0.60% per annum
of the next $1 billion of the Fund's average daily net assets, and 0.55% per
annum of the Fund's average daily net assets in excess of $2 billion. The
management fee reflected in the Statement of Operations represents 0.65% per
annum of the Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $32,312 from sales of Class A shares, after commissions of
$250,071 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive a continuing fee of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor charges
such fees to the Fund pursuant to the Plan. For the six months ended June 30,
1997, fees incurred aggregated $825,912, or 0.24% per annum of the average daily
net assets of Class A shares.
Under the Plan, with respect to Class B 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 and Class D shares for which the organizations are
responsible; and, for Class D shares only, 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 substantially all
of this fee to a third party (the "Purchaser"), which provides funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the six months ended June 30, 1997, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $44,934 and $336,302, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the six
months ended June 30, 1997, such charges amounted to $10,913.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL 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 amount of such payments
and the Class B shares distribution fees retained by the Distributor, for the
six months ended June 30, 1997, was $12,986.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of Fund shares, as well as distribution and
service fees pursuant to the Plan. For the six months ended June 30, 1997,
Seligman Services, Inc. received commissions of $8,995 from the sales of Fund
shares. Seligman Services, Inc. also received distribution and service fees of
$227,708, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $594,802 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.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in directors' fees and
expenses and the accumulated balance thereof at June 30, 1997, of $182,742 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.
- ----
16
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance of each Class, on a per share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, 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.
"Total return based on net asset value" measures each Class's performance
assuming that investors purchased Fund shares at net asset value as of the
beginning of the period, invested dividends and capital gains paid at net asset
value, and then sold their shares at the net asset value 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. Total returns for periods
of less than one year are not annualized.
"Average commission rate paid" represents the average commission paid by the
Fund to purchase or sell portfolio securities. It is determined by dividing the
total commission dollars paid by the number of shares purchased and sold during
the period for which commissions were paid. This rate is provided for periods
beginning January 1, 1996.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------
SIX
MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------------------------------------
6/30/97@ 1996@ 1995@ 1994@ 1993 1992
------- ----- ------ ----- ----- ----
<C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ..... $14.89 $14.19 $12.12 $13.47 $12.79 $12.54
------ ------ ------ ------ ------ ------
Net investment income .................... .13 .35 .36 .38 .39 .39
Net realized and unrealized
investment gain (loss) ................... 2.47 1.81 3.00 (.64) 1.49 .95
Net realized and unrealized gain
(loss)on foreign currency
transactions .......................... (.05) -- .01 -- -- --
------ ------ ------ ------ ------ ------
INCREASE (DECREASE) FROM INVESTMENT
OPERATIONS ............................... 2.55 2.16 3.37 (.26) 1.88 1.34
Dividends paid ........................... (.17) (.34) (.36) (.37) (.38) (.39)
Distributions from net gain realized ..... (.51) (1.12) (.94) (.72) (.82) (.70)
NET INCREASE (DECREASE) IN NET ASSET VALUE 1.87 .70 2.07 (1.35) .68 .25
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ........... $16.76 $14.89 $14.19 $12.12 $13.47 $12.79
====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: ... 17.18% 15.44% 28.17% (1.89)% 14.86% 10.86%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ........... 1.14%+ 1.15% .93% .85% .87% .75%
Net investment income to
average net assets ....................... 1.67%+ 2.36% 2.56% 2.93% 2.86% 3.00%
Portfolio turnover ....................... 32.43% 56.10% 46.08% 57.17% 54.37% 46.78%
Average commission rate paid ............. $.0586 $.0554
NET ASSETS, END OF PERIOD
(000s omitted) ........................... $726,254 $656,260 $614,400 $510,956 $553,222 $514,069
</TABLE>
- ---------
See footnotes on page 18.
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17
<PAGE>
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FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASSB CLASS D
------------------- -----------------------------------------------------------
SIX SIX
MONTHS 4/22/96* MONTHS YEAR ENDED DECEMBER 31, 5/3/93*
ENDED TO ENDED ----------------------------------- TO
6/30/97@ 12/31/96@ 6/30/97@ 1996@ 1995@ 1994@ 12/31/93
------- -------- ------- ----- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF PERIOD ................. $14.87 $14.80 $14.87 $14.16 $12.07 $13.46 $13.29
------ ------ ------ ------ ------ ------ ------
Net investment income ................. .07 .15 .07 .24 .24 .22 .18
Net realized and unrealized
investment gain (loss) .............. 2.46 1.20 2.46 1.80 3.00 (.66) 1.02
Net realized and unrealized gain
(loss)on foreign
currency transactions ................. (.05) -- (.05) -- 0.01 -- --
------ ------ ------ ------ ------ ------ ------
INCREASE (DECREASE)
FROM INVESTMENT
OPERATIONS ............................ 2.48 1.35 2.48 2.04 3.25 (.44) 1.20
Dividends paid ........................ (.11) (.16) (.11) (.21) (.22) (.23) (.21)
Distributions from net
gain realized ...... ............... (.51) (1.12) (.51) (1.12) (.94) (.72) (.82)
------ ------ ------ ------ ------ ------ ------
NET INCREASE (DECREASE)
IN NET ASSET VALUE 1.86 .07 1.86 .71 2.09 (1.39) .17
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ........ $16.73 $14.87 $16.73 $14.87 $14.16 $12.07 $13.46
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED ON
NET ASSET VALUE: ................... 16.68% 9.21% 16.68% 14.58% 27.17% (3.24)% 9.09%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net asset ......... 1.90%+ 1.92%+ 1.90%+ 1.91% 1.72% 1.96% 2.02%+
Net investment income to average
net assets ......................... .91%+ 1.55%+ .91%+ 1.61% 1.80% 1.68% 1.83%+
Portfolio turnover .................... 32.43% 56.10%++ 32.43% 56.10% 46.08% 57.17% 54.37%+++
Average commission rate paid .......... $.0586 $.0554++ $.0586 $.0554
NET ASSETS, END OF PERIOD
(000S OMITTED) ........................ $12,997 $6,451 $76,080 $63,938 $46,564 $14,416 $5,667
</TABLE>
- ----------
* Commencement of offering of shares.
@ Per share amounts for the periods ended June 30, 1997, and December 31,
1996, 1995, and 1994, are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1993.
See Notes to Financial Statements.
- ----
18
<PAGE>
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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 June 30,
1997, the related statements of operations for the six months then ended and of
changes in net assets for the six months then ended and for the year ended
December 31, 1996, 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 June
30, 1997, by correspondence with the Fund's custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Common
Stock Fund, Inc. as of June 30, 1997, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
- ---------------------------
DELOITTE & TOUCHE LLP
New York, New York
August 1, 1997
- --------------------------------------------------------------------------------
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19
<PAGE>
================================================================================
BOARD OF DIRECTORS
FRED E. BROWN
DIRECTOR EMERITUS
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2
DIRECTOR OR TRUSTEE, Various Organizations
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
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3
DIRECTOR OR TRUSTEE, Various Organizations
JAMES N. WHITSON 2
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
- -----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- --------------------------------------------------------------------------------
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
- -------------------------------------------------------------------------------
- ----
20
<PAGE>
================================================================================
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in the fund's portfolio. The fund generates
short-term capital gains when portfolio securities held for less than one year
are sold at a profit. The fund generates long-term capital gains when portfolio
securities held for one year or more are sold at a profit. Short-term capital
gains are taxed as ordinary income. Long-term capital gains are taxed at the
federal capital gains rate appropriate to the shareholder's tax bracket.
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 increase 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. Assuming the same rate of return, 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 LOAD (CDSL) -- Depending on the class of shares owned,
a fee charged by a mutual fund when shares are sold back to the fund (the CDSL
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.
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 the 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 (OP) -- The price at which a mutual fund's shares can be
purchased. The offering price is the current net asset value per share 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, such as the fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SECURITIES AND EXCHANGE COMMISSION (SEC) -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- Document that contains updated or more
detailed information about a mutual fund and supplements the prospectus. It is
available at no charge upon request.
TOTAL RETURN -- A measure of fund 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 -- 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 maximum offering price of the stock.
- --------------
Adapted from the Investment Company Institute's 1996 MUTUAL FUND FACT BOOK.
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21
<PAGE>
- --------------------------------------------------------------------------------
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 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
- --------------------------------------------------------------------------------
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.
[LOGO]
EQCS3 6/97 Printed on Recycled Paper
