SELIGMAN
------------
COMMON STOCK
FUND, INC.
[GRAPHIC]
MID-YEAR REPORT
JUNE 30, 1998
SEEKING FAVORABLE
CURRENT INCOME AND
LONG-TERM GROWTH
OF BOTH INCOME
AND CAPITAL
WITHOUT EXPOSING
CAPITAL TO
UNDUE RISK
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
[PHOTO]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
TIMES CHANGE...
Established in 1864, Seligman's history of providing financial services has been
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 134 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions for these changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest, diversified, publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance investment companies could have in building wealth for individual
investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including funds that focus on technology stocks, municipal
bonds, and international securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
TABLE OF CONTENTS
To the Shareholders .................................. 1
Interview With Your Portfolio Manager ................ 2
Performance Overview ................................. 4
Portfolio Overview ................................... 6
Portfolio of Investments ............................. 8
Statement of Assets and Liabilities .................. 10
Statement of Operations .............................. 11
SStatements of Changes in Net Assets ................. 12
Notes to Financial Statements ........................ 13
Financial Highlights ................................. 16
Report of Independent Auditors ....................... 18
Board of Directors ................................... 19
Executive Officers and For More Information .......... 20
Glossary of Financial Terms .......................... 21
<PAGE>
TO THE SHAREHOLDERS
During the first six months of 1998, Seligman Common Stock Fund posted a total
return of 11.22% based on the net asset value of Class A shares, slightly
lagging the 12.11% total return of its peers as measured by the Lipper Growth &
Income Funds Average. For the six-month period, the Standard & Poor's 500
Composite Stock Price Index (S&P 500) had a total return of 17.71%. A discussion
with your Portfolio Manager regarding the first six months begins on page 2.
The US economy continued to grow throughout the first half of the year, bringing
the expansion into an unprecedented eighth year. Inflation remained low, wages
were high, consumer spending was strong, and the labor market was tight.
According to the Conference Board, consumer confidence rose to a 29-year high in
June, reflecting these positive fundamentals. Further, the supply of consumer
goods kept pace with demand, which helped the economic expansion remain
balanced.
Within the equity market, the dominant investment trend in the first half of
1998 continued to be a "flight to quality." Investors stressed the importance of
quality, liquidity, and safety. Consequently, the market remained "narrow," with
demand for large-capitalization stocks far outpacing demand for
small-capitalization stocks. The market effectively became two-tiered, as the 30
largest companies in the S&P 500 accounted for more than half of its gains.
Investor preferences in mutual funds further underscored the flight-to-quality
trend, as large-capitalization growth and total rate of return stock funds were
favored by investors.
Looking ahead, while the Asian financial crisis only modestly affected the US
economy in the first half of 1998, we believe its full impact is yet to come.
This leads us to believe that the current benign business environment could
become less stable. Some early warning economic indicators started flashing
cautionary signals toward the end of the second quarter as the economy began to
decelerate. US corporate profits were being pressured, while several stock
indices moved to new highs. The basic fundamental case remains positive, yet
investor expectations, at least for the short term, seem to be too optimistic.
While we expect the economy to remain healthy, it may not grow at the strong
rates seen over the past few years. Investors should maintain realistic
expectations for the future. Trends of the past three years, whereby the equity
markets posted returns in excess of 20% or more, are well above historic norms,
and may not continue.
As you may know, companies are modifying their computer systems to recognize
dates of January 1, 2000, and beyond. This is often referred to as the "Y2K"
problem. Unless systems are updated, many applications may interpret the last
two digits of the year to mean 1900 instead of 2000. J. & W. Seligman & Co.
Incorporated, the Seligman Investment Companies, and Seligman Data Corp., your
shareholder service agent, have jointly established a team to ensure that your
investment and shareholder services are not disrupted. This team is supported by
consulting firms specializing in Y2K solutions. Substantial work has been
performed to date, and we are confident that there will be no disruption in the
services provided by your Fund.
Thank you for your continued interest in Seligman Common Stock Fund. We look
forward to serving your investment needs in the many years to come. The Fund's
portfolio of investments and financial statements 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
July 31, 1998
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
CHARLES C. SMITH, JR.
Q. HOW DID SELIGMAN COMMON STOCK FUND PERFORM IN THE FIRST HALF OF 1998?
A. Seligman Common Stock Fund posted a total return of 11.22% based on the net
asset value of Class A shares. The Fund's peers, as measured by the Lipper
Growth & Income Funds Average, posted a total return of 12.11%. For the
six-month period, the Standard & Poor's 500 Composite Stock Price Index (S&P
500) had a total return of 17.71%.
Q. WHICH ECONOMIC AND MARKET FACTORS INFLUENCED SELIGMAN COMMON STOCK FUND'S
PERFORMANCE IN THE FIRST HALF OF 1998?
A. The strong economy of the past six months provided a solid business
environment for many domestic companies to reinvest earnings, improve
credit, and strengthen their core businesses to position themselves for even
stronger future growth.
However, the Asian financial crisis began to impact corporate profits in
some industries. The crisis depressed demand for consumer products,
high-tech equipment, and commodities throughout Asia. US companies that sell
into these markets suffered from lower-than-anticipated earnings, while
overseas companies flooded the US with inexpensive imports. Additionally,
some economic indicators toward the end of the first half suggested the
start of a deceleration in the pace of US economic growth. These factors
heightened investor demand for "safe haven" equities in the first half. Both
domestic and overseas investors retreated into well-known, liquid,
large-capitalization growth stocks, which have a history of providing stable
earnings and dividends.
Q. WHAT WAS YOUR INVESTMENT STRATEGY?
A. We maintained our investment strategy of seeking fairly valued stocks that
have the potential for increasing earnings, and that have a significant
yield advantage compared to other companies in their industries. The Fund's
growth-at-a-reasonable-price approach seeks to offer investors higher
yields, lower volatility, higher projected earnings growth, and lower
price-to-earnings ratios than the S&P 500.
SELIGMAN GROWTH AND INCOME TEAM
Rodney Collins, Amy Fujii, Melanie Ravenell (Administrative Assistant),
Jonathan Roth, Charles C. Smith, Jr. (Portfolio Manager)
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
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
CHARLES C. SMITH, JR.
Q. WHICH INDUSTRIES IMPROVED THE FUND'S PERFORMANCE IN THE FIRST HALF?
A. Many companies in most sectors benefited from positive US economic
fundamentals. These factors especially fueled above-expectation performances
by many of the Fund's holdings in capital goods, consumer cyclicals,
finance, health care, and technology stocks.
The portfolio had an overweighted position in energy stocks, because the
companies had attractive yields and reasonable valuations, and we believe
they have good long-term prospects. This sector outperformed expectations,
despite recent declines in energy prices. The portfolio will remain
overweighted in energy stocks, as we believe the decline will be
short-lived.
The portfolio was underweighted in the technology sector to avoid the
negative impact of lower Asian demand for high-tech consumer products such
as disk drives, personal computers, and infrastructure equipment.
Nevertheless, the Fund benefited from the technology sector because its
technology holdings were concentrated in companies that have little Asian
exposure. The portfolio will remain underweighted in technology stocks until
the long-term effects of the Asian crisis on the industry become clearer.
Q. WHICH INDUSTRIES IMPAIRED THE FUND'S PERFORMANCE IN THE FIRST HALF?
A. The consumer staples sector hurt the Fund's results in the first six months.
Railroad company Norfolk Southern, the Fund's sole transportation holding,
negatively impacted results due to issues associated with its acquisition of
Conrail. We believe that the portfolio's consumer staples and transportation
holdings have solid long-term prospects for increasing earnings growth. The
telecommunications industry also underperformed expectations due in part to
federal regulatory concerns and a competitive environment.
Q. WHAT IS THE OUTLOOK?
A. Overall, we are optimistic about the coming months due to our expectations
for stable but slowing economic growth. While we expect the economy to
remain healthy, we believe that it may not grow at the accelerated rate of
the recent past. The Asian financial crisis only modestly affected the US
economy in the first half of 1998, and in fact seemed to advance US
equities. However, we believe depressed Asian consumer demand might continue
to negatively affect US corporate profits. Recent earnings announcements by
domestic companies indicate that corporate profits are coming under pressure
in some industries.
These factors could place the impetus back on the importance of companies
with more realistic valuations, solid earnings growth potential, strong
earnings records, and attractive dividend yields. The recent increase in the
valuations of the largest, better-known, most liquid stocks could reverse as
investors realize that these valuations may be excessive. Investors could
again seek stocks with consistent returns and competitive valuations, the
very type that Seligman Common Stock Fund owns.
3
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 1998
<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 5.96% 11.69% 15.24% 14.33% n/a n/a
Without Sales Charge 11.22 17.28 16.37 14.89 n/a n/a
CLASS B**
With CDSL+ 5.77 11.51 n/a n/a 18.61% n/a
Without CDSL 10.77 16.39 n/a n/a 19.73 n/a
CLASS D**
With 1% CDSL 9.77 15.47 n/a n/a n/a n/a
Without CDSL 10.77 16.45 15.30 n/a n/a 15.35%
LIPPER GROWTH & INCOME FUNDS AVERAGE*** 12.11 22.86 18.93 15.61 24.36++ 18.90+++
S&P 500*** 17.71 30.16 23.08 18.56 31.34++ 22.95+++
</TABLE>
NET ASSET VALUE
JUNE 30, 1998 DECEMBER 31, 1997 JUNE 30, 1997
-------------- ------------------- --------------
CLASS A $16.36 $15.92 $16.76
CLASS B 16.31 15.88 16.73
CLASS D 16.32 15.89 16.73
DIVIDEND AND CAPITAL GAIN INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1998
DIVIDENDS
PAID CAPITAL GAIN
------------ --------------------------
CLASS A $0.140 PAID $1.180o
CLASS B 0.076 REALIZED 1.779
CLASS D 0.076 UNREALIZED 3.666oo
Performance data quoted represent changes in price and assume that all
distributions within the periods are invested in additional shares. The rates of
return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost. Past
performance is not indicative of future investment results.
- -------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of dividend and capital gain distributions. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class A shares reflect the effect of the
service fee of up to 0.25% under the Administration, Shareholder Services
and Distribution Plan after January 1, 1993, only. Returns for Class B
shares are calculated with and without the effect of the maximum 5%
contingent deferred sales load ("CDSL"), charged on redemptions made within
one year of the date of purchase, declining to 1% in the sixth year and 0%
thereafter. Returns for Class D shares are calculated with and without the
effect of the 1% CDSL, charged on redemptions made within one year of the
date of purchase.
*** The Lipper Growth &Income Funds Average and the S&P 500 are unmanaged
benchmarks that assume investment of dividends. The Lipper Growth &Income
Funds Average excludes the effect of sales charges and the S&P 500 excludes
the effect of fees and sales charges. The monthly performance of the Lipper
Growth &Income Funds 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 3% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o Represents realized capital gains from 1997, which were paid on June 24,
1998.
oo Represents the per share amount of net unrealized appreciation of portfolio
securities as of June 30, 1998.
4
<PAGE>
PERFORMANCE OVERVIEW
GROWTH OF AN
ASSUMED $10,000
INVESTMENT IN
CLASS A SHARES
June 30, 1988, to
June 30, 1998
[The following table represents a chart in the printed report.]
6/30/88 $9,525* Initial Amount Invested
9/30/88 9,430
12/31/88 9,489
3/31/89 10,036
6/30/89 10,619
9/30/89 11,662
12/31/89 12,029
3/31/90 11,912
6/30/90 12,656
9/30/90 10,448
12/31/90 11,562
3/31/91 13,460
6/30/91 13,184
9/30/91 14,203
12/31/91 15,022
3/31/92 15,273
6/30/92 15,371
9/30/92 15,797
12/31/92 16,654
3/31/93 17,462
6/30/93 17,882
9/30/93 18,332
12/31/93 19,128
3/31/94 18,229
6/30/94 18,326
9/30/94 19,046
12/31/94 18,766
3/31/95 20,363
6/30/95 21,844
9/30/95 23,224
12/31/95 24,053
3/31/96 25,273
6/30/96 26,167
9/30/96 26,378
12/31/96 27,766
3/31/97 28,191
6/30/97 32,538
9/30/97 34,750
12/31/97 34,312
3/31/98 38,277
6/30/98 $38,161 Total Value at June 30, 1998
GROWTH OF AN
ASSUMED $10,000
INVESTMENT IN
CLASS B SHARES
April 22, 1996,+ to
June 30, 1998
[The following table represents a chart in the printed report.]
4/22/96 $10,000 Initial Amount Invested
5/31/96 10,230
6/30/96 10,326
7/31/96 9,835
8/31/96 9,994
9/30/96 10,394
10/31/96 10,672
11/30/96 11,155
12/31/96 10,921
1/31/97 11,200
2/28/97 11,361
3/31/97 11,064
4/30/97 11,491
5/31/97 12,228
6/30/97 12,742
7/31/97 13,580
8/31/97 12,895
9/30/97 13,588
10/31/97 12,893
11/30/97 13,240
12/31/97 13,388
1/31/98 13,472
2/28/98 14,265
3/31/98 14,904
4/30/98 14,768
5/31/98 14,633
6/30/98 $14,830** Total Value at June 30, 1998
<PAGE>
GROWTH OF AN
ASSUMED $10,000
INVESTMENT IN
CLASS D SHARES
May 3, 1993,+ to
June 30, 1998
[The following table represents a chart in the printed report.]
5/3/93 $10,000 Initial Amount Invested
6/30/93 10,256
9/30/93 10,484
12/31/93 10,908
3/31/94 10,348
6/30/94 10,372
9/30/94 10,747
12/31/94 10,555
3/31/95 11,427
6/30/95 12,241
9/30/95 12,988
12/31/95 13,423
3/31/96 14,083
6/30/96 14,542
9/30/96 14,638
12/31/96 15,380
3/31/97 15,581
6/30/97 17,945
9/30/97 19,136
12/31/97 18,865
3/31/98 21,000
6/30/98 $20,897 Total Value at June 30, 1995
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, assuming that
all distributions within the periods are invested in additional shares. Since
the measured periods vary, the charts are plotted using different scales and are
not comparable.
- -------------
* Net of the 4.75% maximum initial sales charge.
** Excludes the effect of the 3% CDSL.
+ Inception date.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
JUNE 30, 1998
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
------------------------
JUNE DECEMBER
ISSUES COST VALUE 30, 1998 31, 1997
------- ---------------- ---------------- --------- ------------
COMMON STOCKS:
<S> <C> <C> <C> <C> <C>
Aerospace/Defense ............................... 2 $ 20,884,121 $ 29,645,000 3.3 2.4
Automotive and Related .......................... 2 26,007,379 33,357,500 3.8 2.7
Basic Materials ................................. 1 8,091,345 7,253,125 0.8 0.8
Business Services and Supplies .................. 1 15,620,788 21,849,375 2.5 0.6
Chemicals ....................................... 2 17,382,020 20,745,625 2.3 2.8
Computer Goods and Services ..................... -- -- -- -- 3.1
Construction .................................... -- -- -- -- 0.7
Consumer Goods and Services ..................... 2 27,532,799 27,489,375 3.1 5.3
Drugs and Health Care ........................... 5 53,447,171 75,831,875 8.6 7.8
Electric and Gas Utilities ...................... 4 46,096,528 57,717,812 6.5 3.4
Electrical Equipment ............................ -- -- -- -- 0.8
Electronics ..................................... 1 15,878,326 18,033,125 2.0 4.2
Energy .......................................... 6 88,137,845 112,714,687 12.7 8.8
Finance and Insurance ........................... 12 104,065,922 168,825,938 19.0 15.7
Food ............................................ 2 15,277,420 31,105,313 3.5 2.9
Machinery and Industrial Equipment .............. 3 40,728,367 64,885,000 7.3 7.9
Metals and Mining ............................... 1 9,028,210 7,777,500 0.9 0.5
Paper and Packaging ............................. 2 17,620,293 17,059,375 1.9 1.9
Printing and Publishing ......................... 1 3,266,337 6,056,875 0.7 0.6
Retail Trade .................................... 2 19,180,472 25,652,500 2.9 2.1
Technology ...................................... -- -- -- -- 1.2
Telecommunications .............................. 1 5,433,192 5,141,250 0.6 2.3
Telephone Utilities ............................. 4 72,898,975 76,338,125 8.6 4.4
Tobacco ......................................... 2 29,307,450 25,689,000 2.9 4.0
Transportation .................................. 1 11,899,967 11,179,688 1.3 --
Miscellaneous/Diversified ....................... 1 10,766,178 12,868,750 1.5 1.5
----- ---------------- ---------------- ------- -------
58 658,551,105 857,216,813 96.7 88.4
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES ................... 1 28,968,868 28,968,868 3.3 11.6
----- ---------------- ---------------- ------- -------
NET ASSETS .......................................... 59 $687,519,973 $886,185,681 100.0 100.0
===== ================ ================ ======= =======
</TABLE>
LARGEST INDUSTRIES
JUNE 30, 1998
[The following table represents a table in the printed report.]
Percent of
Net Assets Net Assets
---------- ----------
FINANCE AND INSURANCE 19.0% $168,825,938
ENERGY 12.7% 112,714,687
TELEPHONE UTILITIES 8.6% 76,338,125
DRUGS AND HEALTH CARE 8.6% 75,831,875
MACHINERY AND INDUSTRIAL EQUIPMENT 7.3% 64,885,000
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
----------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/98
- ----------- ----------- -----------
Chevron ....................... 255,000 255,000
General Mills ................. 195,000 195,000
GTE ........................... 295,000 445,000
Hartford Financial
Services Group .............. 125,000 125,000
Houston Industries ............ 695,000 695,000
Lincoln National .............. 185,000 185,000
Marsh & McLennan .............. 180,000 270,000(1)
Mobil ......................... 195,000 295,000
Norfolk Southern .............. 375,000 375,000
US WEST Communications
Group ....................... 320,000 320,000
SHARES
----------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/98
- ------------- ----------- -----------
American International
Group ....................... 112,500 --
Coca-Cola ..................... 185,000 --
Fort James .................... 200,000 --
Illinois Tool Works ........... 180,000 --
Intel ......................... 145,000 --
Johnson & Johnson ............. 150,000 --
Microsoft ..................... 92,000 --
PepsiCo ....................... 250,000 --
Procter & Gamble .............. 150,000 --
Schering-Plough ............... 150,000 --
Largest portfolio changes from previous period to current period are based on
cost of purchases and proceeds from sales of securities.
- -------------------
(1) Includes 90,000 shares received as a result of a 3-for-2 stock split.
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 1998
SECURITY VALUE
- ---------- ---------------
General Electric ................ $36,400,000
Exxon ........................... 29,238,125
Chrysler ........................ 24,805,000
GTE ............................. 24,753,125
Mobil ........................... 22,604,375
Xerox ........................... 21,849,375
Bristol-Myers Squibb ............ 21,838,125
Philip Morris ................... 21,656,250
Houston Industries .............. 21,458,125
United Technologies ............. 21,275,000
7
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998
SHARES VALUE
--------- -------------
COMMON STOCKS 96.7%
AEROSPACE/DEFENSE 3.3%
General Dynamics 180,000 $ 8,370,000
United Technologies 230,000 21,275,000
-------------
29,645,000
-------------
AUTOMOTIVE AND
RELATED 3.8%
Chrysler 440,000 24,805,000
Eaton 110,000 8,552,500
-------------
33,357,500
-------------
BASIC MATERIALS 0.8%
Aluminum Company of America 110,000 7,253,125
-------------
BUSINESS SERVICES AND
SUPPLIES 2.5%
Xerox 215,000 21,849,375
-------------
CHEMICALS 2.3%
duPont (E.I.) de Nemours 145,000 10,820,625
Goodrich (B.F.) 200,000 9,925,000
-------------
20,745,625
-------------
CONSUMER GOODS AND
SERVICES 3.1%
Anheuser-Busch 300,000 14,156,250
General Mills 195,000 13,333,125
-------------
27,489,375
-------------
DRUGS AND HEALTH CARE 8.6%
ABBOTT LABORATORIES 160,000 6,540,000
American Home Products 350,000 18,112,500
Baxter International 160,000 8,610,000
Bristol-Myers Squibb 190,000 21,838,125
Merck 155,000 20,731,250
-------------
75,831,875
-------------
ELECTRIC AND GAS
UTILITIES 6.5%
Edison International 375,000 11,085,937
Houston Industries 695,000 21,458,125
Unicom 280,000 9,817,500
The Williams Companies 455,000 15,356,250
-------------
57,717,812
-------------
ELECTRONICS 2.0%
Raytheon (Class B) 305,000 18,033,125
-------------
ENERGY 12.7%
British Petroleum (ADRs)
(United Kingdom) 100,000 8,825,000
Chevron 255,000 21,180,937
Exxon 410,000 29,238,125
Mobil 295,000 22,604,375
Royal Dutch Petroleum
(Netherlands) 280,000 15,347,500
Texaco 260,000 15,518,750
-------------
112,714,687
-------------
FINANCE AND INSURANCE 19.0%
Ahmanson (H.F.) 235,000 16,685,000
American General 245,000 17,440,938
BankAmerica 160,000 13,830,000
Bank of New York 320,000 19,420,000
Bankers Trust 100,000 11,606,250
Citicorp 50,000 7,462,500
Federal National
Mortgage Association 215,000 13,061,250
Hartford Financial
Services Group 125,000 14,296,875
Lincoln National 185,000 16,904,375
Marsh & McLennan 270,000 16,318,125
Mellon Bank 150,000 10,443,750
St. Paul Companies 270,000 11,356,875
-------------
168,825,938
-------------
FOOD 3.5%
ConAgra 505,000 16,002,188
Sara Lee 270,000 15,103,125
-------------
31,105,313
-------------
<PAGE>
MACHINERY AND INDUSTRIAL
EQUIPMENT 7.3%
Dana 270,000 $ 14,445,000
GATX 320,000 14,040,000
General Electric 400,000 36,400,000
-------------
64,885,000
-------------
METALS AND MINING 0.9%
Allegheny Teledyne 340,000 7,777,500
-------------
PAPER AND PACKAGING 1.9%
Kimberly-Clark 185,000 8,486,875
Mead 270,000 8,572,500
-------------
17,059,375
-------------
PRINTING AND PUBLISHING 0.7%
Knight-Ridder Newspapers 110,000 6,056,875
-------------
RETAIL TRADE 2.9%
May Department Stores 215,000 14,082,500
Penney (J.C.) 160,000 11,570,000
-------------
25,652,500
-------------
- -------------------
See footnotes on page 9.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998
SHARES VALUE
----------- ------------
TELECOMMUNICATIONS 0.6%
American Telephone &
Telegraph 90,000 $ 5,141,250
-------------
TELEPHONE UTILITIES 8.6%
Ameritech 440,000 19,745,000
GTE 445,000 24,753,125
SBC Communications 420,000 16,800,000
US WEST Communications Group 320,000 15,040,000
-------------
76,338,125
-------------
TOBACCO 2.9%
Philip Morris 550,000 21,656,250
RJR Nabisco Holdings 169,800 4,032,750
-------------
25,689,000
-------------
TRANSPORTATION 1.3%
Norfolk Southern 375,000 11,179,688
-------------
MISCELLANEOUS/
DIVERSIFIED 1.5%
AlliedSignal 290,000 12,868,750
-------------
TOTAL COMMON STOCKS
(Cost $658,551,105) 857,216,813
-------------
SHORT-TERM HOLDINGS 3.8%
(Cost $33,990,000) 33,990,000
-------------
TOTAL INVESTMENTS 100.5%
(Cost $692,541,105) 891,206,813
OTHER ASSETS
LESS LIABILITIES (0.5)% (5,021,132)
-------------
NET ASSETS 100.0% $ 886,185,681
=============
- -------------
See Notes to Financial Statements.
9
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
ASSETS:
Investments, at value:
<S> <C> <C>
Common stocks (cost $658,551,105) ............................................ $857,216,813
Short-term holdings (cost $33,990,000) ....................................... 33,990,000 $891,206,813
-----------
Cash ....................................................................................................... 328,090
Receivable for interest and dividends ...................................................................... 1,978,638
Receivable for securities sold ............................................................................. 1,182,408
Receivable for Capital Stock sold .......................................................................... 661,780
Investment in, and expenses prepaid to, shareholder service agent .......................................... 168,768
Other ...................................................................................................... 82,617
------------
TOTAL ASSETS ............................................................................................... 895,609,114
------------
LIABILITIES:
Payable for securities purchased ........................................................................... 4,670,698
Payable for Capital Stock repurchased ...................................................................... 3,299,486
Accrued expenses, taxes, and other ......................................................................... 1,453,249
------------
TOTAL LIABILITIES .......................................................................................... 9,423,433
------------
NET ASSETS ................................................................................................. $886,185,681
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.50 par value; 500,000,000 shares authorized;
54,192,484 shares outstanding):
Class A .................................................................................................. $ 23,594,612
Class B .................................................................................................. 879,084
Class D .................................................................................................. 2,622,546
Additional paid-in capital ................................................................................. 565,651,114
Distributions in excess of net investment income ........................................................... (904,125)
Undistributed net realized gain ............................................................................ 95,677,813
Net unrealized appreciation of investments ................................................................. 198,665,708
Net unrealized depreciation on translation of assets and liabilities denominated in
foreign currencies ....................................................................................... (1,071)
------------
NET ASSETS ................................................................................................. $886,185,681
============
NET ASSET VALUE PER SHARE:
CLASS A ($771,918,566 / 47,189,223 shares) ................................................................. $16.36
======
CLASS B ($28,678,028 / 1,758,169 shares) ................................................................... $16.31
======
CLASS D ($85,589,087 / 5,245,092 shares) ................................................................... $16.32
======
</TABLE>
- ------------
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends ..................................................................... $ 9,564,605
Interest ...................................................................... 1,523,329
-----------
TOTAL INVESTMENT INCOME (net of foreign taxes withheld of $46,829) .......................................... $11,087,934
EXPENSES:
Management fee ................................................................ 2,843,412
Distribution and service fees ................................................. 1,472,545
Shareholder account services .................................................. 578,276
Shareholder reports and communications ........................................ 90,533
Custody and related services .................................................. 90,000
Registration .................................................................. 69,960
Auditing and legal fees ....................................................... 42,772
Directors' fees and expenses .................................................. 9,417
Miscellaneous ................................................................. 17,142
-----------
TOTAL EXPENSES ............................................................................................... 5,214,057
-----------
NET INVESTMENT INCOME ........................................................................................ 5,873,877
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments .............................................. 98,069,779
Net realized loss from foreign currency transactions .......................... (1,637,059)
Net change in unrealized appreciation of investments .......................... (12,270,399)
Net change in unrealized depreciation on translation of assets and
liabilities denominated in foreign currencies ............................... 1,230,371
-----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS .................................................... 85,392,692
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ....................................................................... $91,266,569
===========
</TABLE>
- -----------
See Notes to Financial Statements.
11
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ............................................................. $ 5,873,877 $ 13,966,222
Net realized gain on investments .................................................. 98,069,779 135,910,283
Net realized loss from foreign currency transactions .............................. (1,637,059) (1,513,242)
Net change in unrealized appreciation of investments .............................. (12,270,399) 19,276,740
Net change in unrealized appreciation/depreciation on translation of
assets and liabilities denominated in foreign currencies ....................... 1,230,371 (2,113,562)
------------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS ............................................ 91,266,569 165,526,441
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ........................................................................ (6,325,003) (13,924,923)
Class B ........................................................................ (118,127) (164,161)
Class D ........................................................................ (377,548) (893,492)
Net realized gain on investments:
Class A ........................................................................ (52,970,887) (87,928,428)
Class B ........................................................................ (1,919,953) (1,905,117)
Class D ........................................................................ (5,882,359) (8,996,490)
------------- ------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ......................................... (67,593,877) (113,812,611)
------------- ------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
<S> <C> <C> <C> <C>
Class A ..................................... 645,023 1,308,404 10,959,598 21,242,046
Class B ..................................... 360,488 626,437 6,095,392 10,275,506
Class D ..................................... 330,619 653,126 5,656,894 10,523,717
Investment of dividends:
Class A ..................................... 212,620 473,066 3,591,755 7,757,656
Class B ..................................... 6,506 9,277 109,340 152,545
Class D ..................................... 20,414 50,194 343,978 821,894
Exchanged from associated Funds:
Class A ..................................... 3,277,926 5,617,352 54,786,621 89,701,736
Class B ..................................... 239,933 213,033 4,085,718 3,448,926
Class D ..................................... 905,637 2,927,353 15,131,960 48,648,056
Shares issued in payment of gain distributions:
Class A ..................................... 2,344,932 3,903,524 37,565,734 61,643,305
Class B ..................................... 112,545 114,620 1,798,491 1,797,496
Class D ..................................... 338,816 534,270 5,414,277 8,416,701
---------- ----------- ------------- -------------
Total .......................................... 8,795,459 16,430,656 145,539,758 264,429,584
---------- ----------- ------------- -------------
Cost of shares repurchased:
Class A ..................................... (2,118,793) (3,842,001) (36,192,510) (62,421,380)
Class B ..................................... (79,560) (62,983) (1,347,589) (1,046,510)
Class D ..................................... (494,977) (800,763) (8,418,480) (12,923,435)
Exchanged into associated Funds:
Class A ..................................... (3,307,604) (5,397,178) (54,601,404) (86,520,445)
Class B ..................................... (113,661) (102,320) (1,937,832) (1,680,196)
Class D ..................................... (946,964) (2,573,135) (15,628,416) (43,101,112)
---------- ----------- ------------- -------------
Total .......................................... (7,061,559) (12,778,380) (118,126,231) (207,693,078)
---------- ----------- ------------- -------------
INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS .......................... 1,733,900 3,652,276 27,413,527 56,736,506
========== =========== ------------- -------------
INCREASE IN NET ASSETS ................................................................ 51,086,219 108,450,336
NET ASSETS:
Beginning of period ................................................................... 835,099,462 726,649,126
------------- -------------
END OF PERIOD (including distributions in excess of net investment income and
undistributed net investment income of $904,125 and $20,589,
respectively) ...................................................................... $886,185,681 $835,099,462
============= =============
</TABLE>
- -----------
See Notes to Financial Statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Common Stock Fund, Inc. (the "Fund")
offers three classes of shares. Class A shares are sold with an initial sales
charge of up to 4.75% and a continuing service fee of up to 0.25% on an annual
basis. Class A shares purchased in an amount of $1,000,000 or more are sold
without an initial sales charge but are subject to a contingent deferred sales
load ("CDSL") of 1% on redemptions within 18 months of purchase. Class B shares
are sold without an initial sales charge but are subject to a distribution fee
of 0.75%, 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 of purchase, declining to 1%
in the sixth year and 0% thereafter. Class B shares will automatically convert
to Class A shares on the last day of the month that precedes the eighth
anniversary of their date of purchase. 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, if applicable, of 1%
imposed on redemptions made within one year of 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 an exchange are valued at last sales prices or, in their
absence and in the case of over-the-counter securities, at the mean of bid
and asked prices. Short-term holdings maturing in 60 days or less are valued
at amortized cost.
b. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are
maintained in USdollars. The market value of investment securities, other
assets and liabilities denominated in foreign currencies are translated into
US dollars at the daily rate of exchange as reported by a pricing service.
Purchases and sales of investment securities, income, and expenses are
translated into USdollars 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, 1998,
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
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1998, amounted to $420,738,301 and $387,282,381,
respectively.
At June 30, 1998, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes, and the tax
basis gross unrealized appreciation and depreciation of portfolio securities
amounted to $213,203,510 and $14,537,802, respectively.
4. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager is paid by the Manager.
The Manager receives a fee, calculated daily and payable monthly, equal to 0.65%
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.
Prior to March 31, 1998, Seligman Henderson Co., an entity owned 50% each by
the Manager and Henderson International, Inc., a subsidiary of Henderson plc,
supervised and directed all or a portion of the Fund's foreign investments. For
this service, the Manager paid Seligman Henderson Co. a monthly fee.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the Fund's shares and an affiliate of the Manager, received
concessions of $36,365 from sales of Class A shares, after commissions of
$278,784 were 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,
1998, fees incurred under the Plan aggregated $929,882 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 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, 1998, 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 $124,869 and $417,794, respectively.
The Distributor is entitled to retain any CDSL imposed on redemptions of
Class D shares occurring within one year of purchase and on certain redemptions
of Class A shares occurring within 18 months of purchase. For the six months
ended June 30, 1998, such charges amounted to $13,236.
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
retained by the Distributor, for the six months ended June 30, 1998, amounted to
$9,125.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
the Plan. For the six months ended June 30, 1998, Seligman Services, Inc.
received commissions of $13,310 from the sale of shares of the Fund. Seligman
Services, Inc. also received distribution and service fees of $239,771, pursuant
to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $577,753 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 Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have the
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. The cost of
such fees and earnings accrued thereon is included in directors' fees and
expenses, and the accumulated balance thereof at June 30, 1998, of $173,579 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
5. COMMITTED LINE OF CREDIT -- Effective July 1, 1998, the Fund entered into a
joint $800 million committed line of credit that is shared by substantially all
funds in the Seligman Group of Investment Companies. The Fund's borrowings are
limited to 10% of its net assets. Borrowings pursuant to the credit facility are
subject to interest at a rate equal to the overnight federal funds rate plus
0.50% on an overnight basis. The Fund incurs a commitment fee of 0.08% per annum
on its share of the unused portion of the credit facility. The credit facility
may be drawn upon only for temporary purposes and is subject to certain other
customary restrictions. The credit facility commitment expires one year from the
date of the agreement but is renewable with the consent of the participating
banks. To date, the Fund has not borrowed from the credit facility.
15
<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.
<TABLE>
<CAPTION>
CLASS A
-------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
------------ -----------------------------------------------------------
6/30/98o 1997o 1996o 1995o 1994o 1993
------------ -------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................ $15.92 $14.89 $14.19 $12.12 $13.47 $12.79
-------- -------- -------- -------- -------- --------
Net investment income ............................... 0.12 0.30 0.35 0.36 0.38 0.39
Net realized and unrealized investment gain (loss) .. 1.65 3.18 1.81 3.00 (0.64) 1.49
Net realized and unrealized gain (loss) from
foreign currency transactions ..................... (0.01) (0.07) -- 0.01 -- --
-------- -------- -------- -------- -------- --------
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ...... 1.76 3.41 2.16 3.37 (0.26) 1.88
Dividends paid ...................................... (0.14) (0.32) (0.34) (0.36) (0.37) (0.38)
Distributions from net gain realized ................ (1.18) (2.06) (1.12) (0.94) (0.72) (0.82)
-------- -------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSET VALUE .......... 0.44 1.03 0.70 2.07 (1.35) 0.68
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ...................... $16.36 $15.92 $14.89 $14.19 $12.12 $13.47
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON NET ASSET VALUE: .............. 11.22% 23.58% 15.44% 28.17% (1.89)% 14.86%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ...................... 1.10%+ 1.13% 1.15% 0.93% 0.85% 0.87%
Net investment income to average net assets ......... 1.44%+ 1.83% 2.36% 2.56% 2.93% 2.86%
Portfolio turnover .................................. 46.91% 106.02% 56.10% 46.08% 57.17% 54.37%
NET ASSETS, END OF PERIOD (000s omitted) ............ $771,919 $734,635 $656,260 $614,400 $510,956 $553,222
- ------------
See footnotes on page 17.
</TABLE>
16
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
--------------------------------------
SIX MONTHS YEAR 4/22/96*
ENDED ENDED TO
6/30/98o 12/31/97o 12/31/96o
------------- --------- ---------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ............. $15.88 $14.87 $14.80
-------- -------- --------
Net investment income ............................ 0.06 0.17 0.15
Net realized and unrealized investment gain ...... 1.64 3.17 1.20
Net realized and unrealized loss from
foreign currency transactions .................. (0.01) (0.07) --
-------- -------- --------
INCREASE FROM INVESTMENT OPERATIONS ............... 1.69 3.27 1.35
Dividends paid ................................... (0.08) (0.20) (0.16)
Distributions from net gain realized ............. (1.18) (2.06) (1.12)
-------- -------- --------
NET INCREASE IN NET ASSET VALUE .................. 0.43 1.01 0.07
-------- -------- --------
NET ASSET VALUE, END OF PERIOD ................... $16.31 $15.88 $14.87
======== ======== ========
TOTAL RETURN BASED ON NET ASSET VALUE: ........... 10.77% 22.59% 9.21%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ................... 1.86%+ 1.89% 1.92%+
Net investment income to average net assets ...... 0.68%+ 1.07% 1.55%+
Portfolio turnover ............................... 46.91% 106.02% 56.10%++
NET ASSETS, END OF PERIOD (000s omitted) ......... $28,678 $19,568 $6,451
</TABLE>
<TABLE>
<CAPTION>
CLASS D
--------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31, 5/3/93*
ENDED ----------------------------------------------- TO
6/30/98o 1997o 1996o 1995o 1994o 12/31/93
------------ -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD ................ $15.89 $14.87 $14.16 $12.07 $13.46 $13.29
-------- -------- -------- -------- -------- --------
Net investment income ............................... 0.06 0.17 0.24 0.24 0.22 0.18
Net realized and unrealized investment gain (loss) .. 1.64 3.18 1.80 3.00 (0.66) 1.02
Net realized and unrealized gain (loss) from
foreign currency transactions ..................... (0.01) (0.07) -- 0.01 -- --
-------- -------- -------- -------- -------- --------
INCREASE (DECREASE) FROM INVESTMENT OPERATIONS ...... 1.69 3.28 2.04 3.25 (0.44) 1.20
Dividends paid ...................................... (0.08) (0.20) (0.21) (0.22) (0.23) (0.21)
Distributions from net gain realized ................ (1.18) (2.06) (1.12) (0.94) (0.72) (0.82)
-------- -------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSET VALUE .......... 0.43 1.02 0.71 2.09 (1.39) 0.17
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD ...................... $16.32 $15.89 $14.87 $14.16 $12.07 $13.46
======== ======== ======== ======== ======== ========
TOTAL RETURN BASED ON NET ASSET VALUE: .............. 10.77% 22.66% 14.58% 27.17% (3.24)% 9.09%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets ...................... 1.86%+ 1.89% 1.91% 1.72% 1.96% 2.02%+
Net investment income to average net assets ......... 0.68%+ 1.07% 1.61% 1.80% 1.68% 1.83%+
Portfolio turnover .................................. 46.91% 106.02% 56.10% 46.08% 57.17% 54.37%+++
NET ASSETS, END OF PERIOD (000s omitted) ............ $85,589 $80,896 $63,938 $46,564 $14,416 $5,667
</TABLE>
- ---------------
* Commencement of offering of shares.
o Per share amounts for the six months ended June 30, 1998, and the years
ended December 31, 1997, 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.
17
<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 June 30,
1998, 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, 1997, 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, 1998, 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, 1998, 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
July 31, 1998
18
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
TRUSTEE, The New York and Presbyterian Hospital
BETSY S. MICHEL 2, 4
TRUSTEE, The Geraldine R. Dodge Foundation
CHAIRMAN OF THE BOARD OF TRUSTEES, St. George's School
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD, J. & W. Seligman & Co.
Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, Director of Investments,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT, J. & W. Seligman & Co.
Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
19
<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
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
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
20
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio. For tax purposes,
these profits may be taxed at different rates, primarily depending upon the
length of time the securities were owned by the fund.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES 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 a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE (OP) -- The price at which a mutual fund's share can be
purchased. The offering price per share is the current net asset value plus any
sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, officers and directors, how shares are bought and
redeemed, fund fees and other charges, and the fund's financial statements.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains updated or more
detailed information about a mutual fund and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- --------------------
Adapted from the Investment Company Institute's 1997 MUTUAL FUND FACT BOOK.
21
<PAGE>
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.
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[LOGO]
J.& W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQCS3 6/98 [LOGO] Printed on Recycled Paper
