SELIGMAN
- -------------
COMMON STOCK
FUND, INC.
MID-YEAR REPORT
JUNE 30, 1999
----------O-----------
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.
TIMES CHANGE...
Established in 1864, Seligman has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 135 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
[PHOTO]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
TABLE OF CONTENTS
To the Shareholders ....................................................... 1
Interview With Your Portfolio Managers .................................... 2
Performance Overview ...................................................... 4
Portfolio Overview ........................................................ 6
Portfolio of Investments .................................................. 8
Statement of Assets and Liabilities ....................................... 10
Statement of Operations ................................................... 11
Statements of Changes in Net Assets ....................................... 12
Notes to Financial Statements ............................................. 13
Financial Highlights ...................................................... 16
Report of Independent Auditors ............................................ 18
Board of Directors ........................................................ 19
Executive Officers AND For More Information ............................... 20
Glossary of Financial Terms ............................................... 21
<PAGE>
TO THE SHAREHOLDERS
During the first six months of 1999, Seligman Common Stock Fund posted a total
return of 7.81% based on the net asset value of Class A shares. During the same
period, the Lipper Growth & Income Funds Average returned 10.97% and the
Standard & Poor's 500 Composite Stock Price Index (S&P 500) returned 12.38%.
The Fund's underperformance relative to its benchmarks was primarily the result
of the Fund's overweighting of higher-yielding stocks, while underweighting
stocks with higher capital appreciation potential. In recent years, this focus
on yield has placed the Fund at a relative performance disadvantage against the
majority of growth and income funds, which generally focus on capital
appreciation, rather than on income.
In response, the Fund has begun a modest repositioning of its portfolio to
include more stocks with greater potential for capital appreciation and dividend
growth. Over time, this repositioning, while moderating the Fund's dividend
income somewhat, should increase its total return potential, without
significantly increasing risk. Dividend income will still play an important role
in the selection process, but the Fund will seek more exposure to stocks with
the potential for growth of capital and dividends. A full discussion with your
Portfolio Managers, including additional information on the Fund's repositioning
and the Fund's results, begins on page 2.
The economic environment of the past six months has been supportive for common
stocks. Inflation remained benign, corporate profits were strong, and the global
economy continued to recover, which should begin to lift some of the pressure
for world economic growth off the US. During this time, the US economy entered
its ninth year of expansion, with the pace of growth remarkably strong.
The robust US economy, coupled with improved business prospects in most of the
rest of the world, caused the Federal Reserve Board to announce in May that it
was leaning toward a tighter monetary policy. Thus, market participants were not
surprised when the Fed increased the federal funds rate by 25 basis points on
June 30. However, markets did not expect the Fed to also announce that it was
changing its bias from tightening to neutral. This news immediately pushed the
Dow Jones Industrial Average 155 points higher and pushed the 30-year Treasury
bond yield back below 6%. Since then, however, fears of additional interest rate
hikes have surfaced, sending the market averages lower and the 30-year Treasury
bond yield above 6%.
Looking ahead, we remain optimistic regarding the outlook for common stocks and
for the Fund. The US economy is strong, the rest of the world is showing solid
signs of recovery, and inflation appears to be under control.
As the millennium approaches, we have become concerned that the media's focus on
the Year 2000 (Y2K) computer issue, and the fears that this attention may spark,
will cause some investors to take actions that are not in their best long-term
interests. In our view, the primary danger to investors is losing sight of their
long-term financial goals, and altering their portfolios and asset allocations
in an attempt to respond to the confusion surrounding this issue.
In the US, governments and businesses have committed substantial resources to
this issue and, while there may be scattered inconveniences, we believe that the
US will enter the year 2000 relatively seamlessly, and that much of the rest of
the developed world is also well positioned to deal with the new millennium.
For the past several years, J. & W. Seligman & Co. Incorporated (Seligman), your
Fund's manager, and Seligman Data Corp. (Seligman Data), your Fund's shareholder
service agent, have been working to ensure that shareholders do not experience
any Y2K-related inconveniences. We are pleased to report that the early start
has paid off. During the spring of this year, Seligman and Seligman Data
participated in Y2K testing conducted by the Securities Industry Association.
These tests were completed without any Y2K-related problems on the part of
Seligman or Seligman Data. Tests with key service providers were also conducted,
all of which were successfully completed in a Y2K environment.
Thank you for your continued support of Seligman Common Stock Fund. We look
forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/William C. Morris
- --------------------
William C. Morris
Chairman
/s/Brian T. Zino
----------------
Brian T. Zino
President
August 6, 1999
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
CHARLES C. SMITH, JR. AND RODNEY COLLINS
Q: HOW DID SELIGMAN COMMON STOCK FUND PERFORM DURING THE FIRST SIX MONTHS OF
1999?
A: For the six-month period ended June 30, 1999, Seligman Common Stock Fund
posted a total return of 7.81% based on the net asset value of Class A
shares. This compares to 10.97% for the Lipper Growth & Income Funds Average
and 12.38% for the Standard & Poor's 500 Composite Stock Price Index (S&P
500). The Fund's relative performance suffered during this period because of
the Fund's heavy exposure to higher-yielding stocks and light exposure to
stocks with higher capital appreciation potential. For the past several
years, market participants have increasingly focused on capital gains, which
has led to the outperformance of certain types of stocks. Accordingly, the
Fund is now undergoing a shift in its investment strategy, which is discussed
more fully below.
Q: WHAT ECONOMIC AND MARKET FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE
FIRST HALF OF THE FISCAL YEAR?
A: Interest rates have increased dramatically during the past six months, with
long-term rates rising by 100 basis points during the period. Although this
is certainly a sharp increase, it is important to remember that rates have
only risen to the levels they were at before last year's global economic
crisis. At that time, central banks around the world engaged in a coordinated
effort to revive the global economic system. This effort was successful, and
easier monetary policies around the world provided support for uncertain
stock markets. Six months later, a more positive global environment has
caused most world stock markets to move higher, despite rising rates.
During this time, the US stock market continued to hit new highs. The
fundamentals of the market have remained strong, with benign inflation,
positive news with respect to corporate profits, and accelerating global
growth. Even though the Fed raised rates as expected at its June meeting, its
announcement of a neutral bias toward rates increased investor confidence.
Q: WHAT WAS YOUR INVESTMENT STRATEGY?
A: The first half of this fiscal year marked a change in the Fund's investment
strategy. We began rebalancing the Fund's portfolio to gain greater exposure
to stocks with higher capital appreciation potential, while reducing exposure
to higher-yielding stocks.
Seligman Common Stock Fund has always maintained a strong focus on producing
income. This strategy worked well for the Fund for 55 years. However, the
market has changed considerably in recent years. Dividend income has become a
steadily decreasing component of the market's total return, while capital
appreciation has become increasingly important.
A TEAM APPROACH
Seligman Common Stock Fund is managed by the Seligman Growth and Income Team,
headed by Charles C. Smith, Jr. Mr. Smith and Rodney Collins are 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.
[PHOTO]
GROWTH AND INCOME TEAM: (STANDING, FROM LEFT) AMY FUJII, JOHN ROTH, MELANIE
RAVENELL (ADMINISTRATIVE ASSISTANT), (SEATED) CHARLES SMITH (PORTFOLIO MANAGER),
RODNEY COLLINS (CO-PORTFOLIO MANAGER)
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
CHARLES C. SMITH, JR. AND RODNEY COLLINS
In order to keep up with this significant shift in the market, we will be
adding stocks that may provide less dividend income but that may offer
greater capital gain potential. This change does not alter the Fund's
fundamental investment objective, and we believe that this rebalancing will
improve the Fund's total return performance relative to its competitors. The
Fund will continue to pursue income, but its yield will now be closer to that
of its peer group. We will remain focused on the Fund's risk level, which
should remain lower than that of the overall market and the Fund's peer
group.
Q: DID YOU MAKE ANY MAJOR PORTFOLIO CHANGES DURING THE PERIOD?
A: The rebalancing of the Fund's portfolio led us to decrease the Fund's
holdings in energy and utilities, which are higher-yielding sectors of the
market that have historically delivered fewer opportunities for capital gains
than some other areas of the market.
We realized when we made the decision to rebalance the portfolio that we
would increase the Fund's exposure to technology. During the past six months,
some large-cap technology stocks experienced some price weakness, providing
us with selective buying opportunities in this area.
Q: WHAT SECTORS OF THE PORTFOLIO CONTRIBUTED POSITIVELY TO THE FUND'S
PERFORMANCE DURING THE PERIOD?
A: The best-performing sector of the portfolio year-to-date was cyclical stocks.
Diversified companies also performed well and made a strong contribution to
performance, despite comprising a small percentage of the portfolio. Both of
these sectors are examples of the significant appreciation that cyclical
stocks enjoyed during the second quarter. During this time, we saw an
increased focus on value as the market adjusted in advance to the June 30
interest rate increase. Technology continues to be a strong performer. In
fact, this was the best-performing sector over the past 52 weeks.
Q: WHAT SECTORS HURT THE FUND'S PERFORMANCE DURING THE PERIOD?
A: The drugs and health care sector was the worst-performing sector during the
period. This affected performance significantly because health care
represents a large percentage of the portfolio. Health care stocks have
suffered lately because of a new Medicare proposal that could adversely
affect some health care companies. We have not reduced the Fund's holdings in
this area because we believe that health care still offers attractive
long-term opportunities.
Our underweighting in technology hurt the Fund's performance during the past
six months. In the past, the Fund has avoided technology companies because of
their low yield but, as we have discussed, technology will represent a larger
percentage of the portfolio going forward.
Q: WHAT IS YOUR OUTLOOK?
A: American business fundamentals remain strong and should gain additional
support from rising world demand. Therefore, we believe that corporate
profits will grow and may even exceed expectations, despite higher interest
rates. This, in addition to a benign inflation outlook, bodes well for common
stocks. The rebalancing of the portfolio that we are undertaking this year
should boost the Fund's total return performance and allow it to perform
closer to its benchmark indices.
3
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
---------------------------------------------------------
CLASS C CLASS B CLASS D
SINCE SINCE SINCE
INCEPTION SIX ONE FIVE 10 INCEPTION INCEPTION
*5/27/99* MONTHS* YEAR YEARS YEARS 4/22/96 5/3/93
--------- ------- ---- ----- ----- ------- ------
CLASS A**
<S> <C> <C> <C> <C> <C> <C> <C>
With Sales Charge n/a 2.67% 8.37% 17.67% 14.57% n/a n/a
Without Sales Charge n/a 7.81 13.80 18.83 15.12 n/a n/a
CLASS B**
With CDSC+ n/a 2.35 7.88 n/a n/a 16.87% n/a
Without CDSC n/a 7.35 12.88 n/a n/a 17.54 n/a
CLASS C**
With Sales Charge and CDSC 2.87% n/a n/a n/a n/a n/a n/a
Without Sales Charge and CDSC 4.91 n/a n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC n/a 6.34 11.95 n/a n/a n/a n/a
Without CDSC n/a 7.34 12.95 17.87 n/a n/a 14.95%
LIPPER GROWTH & INCOME
FUNDS AVERAGE*** 4.33# 10.97 14.40 21.70 15.46 21.13++ 18.20+++
S&P 500*** 5.55# 12.38 22.76 27.87 18.78 28.57++ 22.92+++
</TABLE>
NET ASSET VALUE
JUNE 30, 1999 DECEMBER 31, 1998 JUNE 30, 1998
------------- ----------------- -------------
CLASS A $16.66 $15.77 $16.36
CLASS B 16.59 15.71 16.31
CLASS C 16.61 n/a n/a
CLASS D 16.61 15.73 16.32
DIVIDEND AND CAPITAL GAIN INFORMATION
FOR THE PERIOD ENDED JUNE 30, 1999
DIVIDENDS
PAID CAPITAL GAIN
--------- ------------
CLASS A $0.130 PAID $0.199##
CLASS B 0.066 REALIZED 0.550
CLASS C 0.032 UNREALIZED 4.709###
CLASS D 0.066
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 charge ("CDSC"), charged on redemptions made
within one year of the date of purchase, declining to 1% in the sixth year
and 0% thereafter. Returns for Class C shares are calculated with and
without the effect of the initial 1% maximum sales charge and the 1% CDSC
that is charged on redemptions made within 18 months of the date of
purchase. Returns for Class D shares are calculated with and without the
effect of the 1% CDSC, charged on redemptions made within one year of the
date of purchase.
*** The Lipper Growth & Income Funds Average and the S&P 500 are unmanaged
benchmarks that assume investment of dividends. The Lipper Growth &Income
Funds Average and the S&P 500 exclude the effect of fees and/or 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 CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
# From May 31, 1999.
## Represents realized capital gains from 1998, which were paid to
shareholders on June 24, 1999.
### Represents the per share amount of net unrealized appreciation of portfolio
securities as of June 30, 1999.
4
<PAGE>
PERFORMANCE OVERVIEW
GROWTH OF AN ASSUMED $10,000 INVESTMENT
CLASS A SHARES
JUNE 30, 1989 TO JUNE 30, 1999
[The following table represents a chart in the printed material]
6/30/89 9525
10460
10790
10685
6/30/90 11352
9372
10370
12073
6/30/91 11826
12740
13474
13700
6/30/92 13787
14169
14938
15663
6/30/93 16040
16443
17157
16351
6/30/94 16438
17084
16833
18265
6/30/95 19593
20831
21575
22669
6/30/96 23471
23660
24906
25286
6/30/97 29185
31170
30777
34333
6/30/98 34229
31572
36131
35749
6/30/99 38952
CLASS B SHARES
APRIL 22, 1996+ TO JUNE 30, 1999
[The following table represents a chart in the printed material]
4/22/96 10000
10061
10230
6/30/96 10326
9835
9994
10394
10672
11155
12/31/96 10921
11200
11361
11064
11491
12228
6/30/97 12742
13580
12895
13588
12893
13240
12/31/97 13388
13472
14265
14904
14768
14633
6/30/98 14830
14512
12848
13655
14549
15146
12/31/98 15595
15456
15178
15399
16404
16144
6/30/99 16741
CLASS C SHARES
May 27, 1999+ to June 30, 1999
[The following table represents a chart in the printed material]
5/27/99 9900
5/28/99 10010
5/30/99 10010
6/3/99 10141
6/10/99 9979
6/17/99 10285
6/24/99 9999
6/30/99 10386
CLASS D SHARES
May 3, 1993+ to June 30, 1999
[The following table represents a chart in the printed material]
5/3/93 10000
10000
6/30/93 10256
10484
10908
10348
6/30/94 10372
10747
10555
11427
6/30/95 12241
12988
13423
14083
6/30/96 14542
14638
15380
15581
6/30/97 17945
19136
18865
21000
6/30/98 20897
19243
21987
21698
6/30/99 23602
These charts reflect the growth of a $10,000 investment for a 10-year period for
Class A shares and since inception for Class B, Class C, and Class D shares,
assuming that all distributions within the periods are invested in additional
shares. Since the measured periods vary, the charts are plotted using different
scales and are not comparable.
- ----------
* Net of the 4.75% or 1% maximum initial sales charge for Class A or Class C
shares, respectively.
** Excludes the effects of the 3% or 1% CDSC for Class B or Class C shares,
respectively.
+ Inception date.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
JUNE 30, 1999
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
----------------------------
JUNE 30, DECEMBER 31,
ISSUES COST VALUE 1999 1998
----- ------------- ------------- ----- -----
COMMON STOCKS:
<S> <C> <C> <C> <C> <C>
Aerospace ............................ 1 $ 3,294,465 $ 5,480,000 0.6 0.5
Automotive and Related ............... 2 15,496,740 21,388,125 2.4 5.4
Basic Materials ...................... -- -- -- -- 0.5
Capital Goods ........................ -- -- -- -- 0.9
Chemicals ............................ 1 8,216,419 9,905,313 1.1 0.9
Communications ....................... 5 77,309,678 111,830,000 12.4 9.8
Communications Equipment ............. 1 7,309,412 7,755,312 0.9 --
Computer and Business Services ....... 8 65,684,282 76,470,938 8.5 4.0
Consumer Goods and Services .......... 11 109,505,342 122,653,005 13.6 13.5
Diversified .......................... 1 10,766,178 18,270,000 2.0 1.5
Drugs and HealthCare ................. 9 66,639,003 87,737,500 9.7 7.9
Electric and Gas Utilities ........... 4 33,231,535 45,653,750 5.1 7.0
Electronics .......................... 3 17,780,689 21,719,375 2.4 2.8
Energy ............................... 5 40,232,130 61,891,875 6.9 10.2
Finance and Insurance ................ 13 109,886,655 184,633,550 20.5 17.9
Machinery and Industrial Equipment ... 2 32,897,178 62,909,950 7.0 5.9
Paper and Forest Products ............ 1 8,090,131 11,272,500 1.3 0.9
Publishing ........................... 1 3,266,337 6,043,125 0.7 0.7
Retail Trade ......................... 2 17,086,200 21,625,936 2.4 1.5
Transportation ....................... 1 8,230,349 12,180,000 1.3 2.7
----- ------------- ------------- ----- -----
71 634,922,723 889,420,254 98.8 94.5
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES ........ 1 10,371,750 10,371,750 1.2 5.5
----- ------------- ------------- ----- -----
NET ASSETS ............................... 72 $645,294,473 $899,792,004 100.0 100.0
===== ============= ============= ===== =====
</TABLE>
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/99
- --------- ----------- ------------
Allstate ................... 235,000 235,000
AT&T ....................... 165,000 380,000(1)
Bestfoods .................. 190,000 190,000
Intel ...................... 170,000 170,000
International Business
Machines ................. 60,000 80,000(2)
Lucent Technologies ........ 115,000 115,000
MCI WorldCom ............... 80,000 80,000
Microsoft .................. 225,000 225,000
Pharmacia & Upjohn ......... 160,000 160,000
Wal-Mart Stores ............ 175,000 175,000
SHARES
---------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/99
- --------------- ------------- -------------
Anheuser-Busch ............. 175,000 125,000
BP Amoco (ADRs) ............ 75,000 100,000
Chevron .................... 255,000 --
DaimlerChrysler ............ 150,000 120,000
Dana ....................... 275,000 --
General Mills .............. 195,000 --
Norfolk Southern ........... 375,000 --
Raytheon (Class B) ......... 175,000 125,000
Reliant Energy(3) .......... 695,000 --
Xerox ...................... 65,000 150,000(4)
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 50,000 shares received as a result of a 3-for-2 stock split.
(2) Includes 20,000 shares received as a result of a 2-for-1 stock split.
(3) Formerly, Houston Industries.
(4) Includes 75,000 shares received as a result of a 2-for-1 stock split.
LARGEST INDUSTRIES
JUNE 30, 1999
[The following table represents a chart in the printed material]
FINANCE AND INSURANCE 20.5% $184,633,550
CONSUMER GOODS AND SERVICES 13.6% $122,653,005
COMMUNICATIONS 12.4% $111,830,000
DRUGS AND HEALTH CARE 9.8% $ 87,737,500
COMPUTER AND BUSINESS SERVICES 8.5% $ 76,490,938
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 1999
SECURITY VALUE
- -------- -----------
GTE .......................... $33,708,750
United Technologies .......... 32,976,250
Ameritech .................... 32,340,000
General Electric ............. 29,933,700
Unilever (Netherlands) ....... 24,910,655
Bank of New York ............. 23,480,000
Philip Morris ................ 22,103,125
AT&T ......................... 21,208,750
Citigroup .................... 20,662,500
Microsoft .................... 20,278,125
7
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999
SHARES VALUE
-------- -----
COMMON STOCKS 98.8%
AEROSPACE 0.6%
General Dynamics 80,000 $ 5,480,000
------------
AUTOMOTIVE AND
RELATED 2.4%
DaimlerChrysler 120,000 10,665,000
Ford Motor 190,000 10,723,125
------------
21,388,125
------------
CHEMICALS 1.1%
duPont (E.I.) de Nemours 145,000 9,905,313
------------
COMMUNICATIONS 12.4%
AT&T 380,000 21,208,750
Ameritech 440,000 32,340,000
GTE 445,000 33,708,750
MCI WorldCom* 80,000 6,882,500
SBC Communications 305,000 17,690,000
------------
111,830,000
------------
COMMUNICATIONS
EQUIPMENT 0.9%
Lucent Technologies 115,000 7,755,312
------------
COMPUTER AND
BUSINESS SERVICES 8.5%
America Online* 25,000 2,762,500
Cisco Systems* 80,000 5,152,500
Dell Computer* 100,000 3,696,875
Electronic Data Systems 270,000 15,271,875
Intel 170,000 10,109,688
International
Business Machines 80,000 10,340,000
Microsoft* 225,000 20,278,125
Xerox 150,000 8,859,375
------------
76,470,938
------------
CONSUMER GOODS
AND SERVICES 13.6%
Anheuser-Busch 125,000 8,867,188
Bestfoods 190,000 9,405,000
Coca-Cola 75,000 4,687,500
ConAgra 505,000 13,445,625
Fort James 220,000 8,332,500
Fortune Brands 49,800 2,060,475
PepsiCo 325,000 12,573,437
Philip Morris 550,000 22,103,125
Procter & Gamble 45,000 4,016,250
Sara Lee 540,000 12,251,250
Unilever (Netherlands) 357,142 24,910,655
------------
122,653,005
------------
DIVERSIFIED 2.0%
AlliedSignal 290,000 18,270,000
------------
DRUGS AND
HEALTH CARE 9.7%
Abbott Laboratories 160,000 7,280,000
American Home Products 350,000 20,125,000
Baxter International 120,000 7,275,000
Bristol-Myers Squibb 200,000 14,087,500
Johnson & Johnson 55,000 5,390,000
Merck 200,000 14,800,000
Pfizer 40,000 4,390,000
Pharmacia & Upjohn 160,000 9,090,000
Schering-Plough 100,000 5,300,000
------------
87,737,500
------------
ELECTRIC AND GAS
UTILITIES 5.1%
DQE 225,000 9,028,125
Sonat 330,000 10,931,250
Unicom 280,000 10,797,500
Williams Companies (The) 350,000 14,896,875
------------
45,653,750
------------
ELECTRONICS 2.4%
Harris 240,000 9,405,000
Hewlett-Packard 35,000 3,517,500
Raytheon (Class B) 125,000 8,796,875
------------
21,719,375
------------
ENERGY 6.9%
BP Amoco (ADRs)
(United Kingdom) 100,000 10,850,000
Exxon 200,000 15,425,000
Mobil 80,000 7,920,000
Royal Dutch Petroleum
(Netherlands) 280,000 16,870,000
Schlumberger 170,000 10,826,875
------------
61,891,875
------------
FINANCE AND
INSURANCE 20.5%
Allstate 235,000 8,430,625
American General 245,000 18,466,875
American International Group 50,000 5,853,125
Bank of America 200,000 14,662,500
Bank of New York 640,000 23,480,000
Chubb 140,000 9,730,000
Citigroup 435,000 20,662,500
Fannie Mae 215,000 14,700,625
Hartford Financial
Services Group 250,000 14,578,125
Lincoln National 370,000 19,355,625
Mellon Bank 300,000 10,912,500
Morgan (J.P.) 70,000 9,835,000
Washington Mutual 394,800 13,966,050
------------
184,633,550
------------
- ----------
See footnotes on page 9.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999
SHARES VALUE
-------- -----
MACHINERY AND
INDUSTRIAL EQUIPMENT 7.0%
General Electric 264,900 $ 29,933,700
United Technologies 460,000 32,976,250
------------
62,909,950
------------
PAPER AND
FOREST PRODUCTS 1.3%
Mead 270,000 11,272,500
------------
PUBLISHING 0.7%
Knight-Ridder Newspapers 110,000 6,043,125
------------
RETAIL TRADE 2.4%
May Department Stores 322,500 13,182,186
Wal-Mart Stores 175,000 8,443,750
------------
21,625,936
------------
TRANSPORTATION 1.3%
GATX 320,000 12,180,000
------------
TOTAL COMMON STOCKS
(Cost $634,922,723) 889,420,254
------------
SHORT-TERM
HOLDINGS 1.2%
(Cost $10,500,000) 10,500,000
------------
TOTAL INVESTMENTS 100.0%
(Cost $645,422,723) 899,920,254
OTHER ASSETS
LESS LIABILITIES (128,250)
------------
NET ASSETS 100.0% $899,792,004
============
- ----------
* Non-income producing security.
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
ASSETS:
Investments, at value:
Common stocks (cost $634,922,723) .......... $889,420,254
Short-term holdings (cost $10,500,000)...... 10,500,000 $899,920,254
------------
Cash ........................................................... 142,357
Receivable for interest and dividends .......................... 1,343,485
Receivable for Capital Stock sold .............................. 309,879
Investment in, and expenses prepaid to,
shareholder service agent .................................... 165,308
Other .......................................................... 58,663
------------
TOTAL ASSETS ................................................... 901,939,946
------------
LIABILITIES:
Payable for Capital Stock repurchased .......................... 722,901
Accrued expenses and other ..................................... 1,425,041
------------
TOTAL LIABILITIES .............................................. 2,147,942
------------
NET ASSETS ..................................................... $899,792,004
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.50 par value; 500,000,000
shares authorized; 54,050,333 shares outstanding):
Class A ...................................................... $ 23,119,853
Class B ...................................................... 1,283,613
Class C ...................................................... 28,021
Class D ...................................................... 2,593,680
Additional paid-in capital ..................................... 585,894,541
Undistributed net investment income ............................ 2,634,462
Undistributed net realized gain ................................ 29,740,303
Net unrealized appreciation of investments ..................... 254,497,531
------------
NET ASSETS ..................................................... $899,792,004
============
NET ASSET VALUE PER SHARE:
CLASS A ($770,123,876 / 46,239,707 shares) ..................... $16.66
======
CLASS B ($42,593,162 / 2,567,226 shares) ....................... $16.59
======
CLASS C ($930,600 / 56,041 shares) ............................. $16.61
======
CLASS D ($86,144,366 / 5,187,359 shares) ....................... $16.61
======
- ----------
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
INVESTMENT INCOME:
Dividends ..................................................... $13,298,389
Interest ...................................................... 1,406,258
-----------
TOTAL INVESTMENT INCOME (net of foreign
taxes withheld of $576,583) ................................. $14,704,647
EXPENSES:
Management fee ................................................ 2,808,003
Distribution and service fees ................................. 1,510,609
Shareholder account services .................................. 698,099
Registration .................................................. 87,181
Custody and related services .................................. 79,735
Shareholder reports and communications ........................ 50,545
Auditing and legal fees ....................................... 40,708
Directors' fees and expenses .................................. 21,159
Miscellaneous ................................................. 26,899
-----------
TOTAL EXPENSES ................................................ 5,322,938
-----------
NET INVESTMENT INCOME ......................................... 9,381,709
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments .............................. 29,738,006
Net change in unrealized appreciation of investments .......... 25,538,995
-----------
NET GAIN ON INVESTMENTS ....................................... 55,277,001
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ........................ $64,658,710
===========
- ----------
See Notes to Financial Statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------- -----------------
OPERATIONS:
<S> <C> <C>
Net investment income ................................................. $ 9,381,709 $ 14,084,410
Net realized gain on investments ...................................... 29,738,006 105,122,144
Net realized loss from foreign currency transactions .................. -- (1,638,670)
Net change in unrealized appreciation of investments .................. 25,538,995 18,022,366
Net change in unrealized depreciation on translation of
assets and liabilities denominated in foreign currencies .............. -- 1,231,505
------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS ................................ 64,658,710 136,821,755
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A .............................................. (6,063,743) (13,006,242)
Class B .............................................. (161,582) (301,403)
Class C .............................................. (581) --
Class D .............................................. (343,508) (851,270)
Net realized gain on investments:
Class A .............................................. (9,156,008) (111,760,141)
Class B .............................................. (495,628) (4,472,471)
Class D .............................................. (1,031,025) (12,434,658)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ............................. (17,252,075) (142,826,185)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ..................................... 18,910,236 37,457,054
Investment of dividends ............................................... 3,894,673 8,489,625
Exchanged from associated Funds ....................................... 153,371,044 186,654,110
Shares issued in payment of gain distributions ........................ 7,762,807 94,789,549
------------- -------------
Total ................................................................. 183,938,760 327,390,338
------------- -------------
Cost of shares repurchased ............................................ (61,828,193) (90,022,932)
Exchanged into associated Funds ....................................... (150,582,159) (185,605,477)
------------- -------------
Total ................................................................. (212,410,352) (275,628,409)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS .................................... (28,471,592) 51,761,929
------------- -------------
INCREASE IN NET ASSETS ................................................ 18,935,043 45,757,499
NET ASSETS:
Beginning of period ................................................... 880,856,961 835,099,462
------------- -------------
END OF PERIOD (including undistributed/(distributions in excess of) net
investment income of $2,634,462 and $(177,833), respectively) ......... $ 899,792,004 $ 880,856,961
============= =============
</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 four classes of shares. Class A shares are sold with an initial sales
charge of up to 4.75% and a continuing service fee of up to 0.25% on an annual
basis. Class A shares purchased in an amount of $1,000,000 or more are sold
without an initial sales charge but are subject to a contingent deferred sales
charge ("CDSC") of 1% on redemptions within 18 months of purchase. Class B
shares are sold without an initial sales charge but are subject to a
distribution fee of 0.75% and a service fee of up to 0.25% on an annual basis,
and a CDSC, if applicable, of 5% on redemptions in the first year of purchase,
declining to 1% in the sixth year and 0% thereafter. Class B shares will
automatically convert to Class A shares on the last day of the month that
precedes the eighth anniversary of their date of purchase. The Fund began
offering Class C shares on May 27, 1999. Class C shares are sold with an initial
sales charge of up to 1% and are subject to a distribution fee of up to 0.75%
and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable,
of 1% imposed on redemptions made within 18 months of purchase. Class D shares
are sold without an initial sales charge but are subject to a distribution fee
of up to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC,
if applicable, of 1% imposed on redemptions made within one year of purchase.
The four classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain other class
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 US dollars. The market value of investment securities, other
assets and liabilities denominated in foreign currencies are translated into
US dollars at the daily rate of exchange as reported by a pricing service.
Purchases and sales of investment securities, income, and expenses are
translated into US dollars at the rate of exchange prevailing on the
respective dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of securities held in the portfolio. Similarly,
the Fund separates the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio
securities sold during the period.
C. FEDERAL TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments sold
is used for both financial statement and federal income tax purposes.
Dividends receivable and payable are recorded on ex-dividend dates, except
that certain dividends from foreign securities where the ex-dividend dates
may have passed are recorded as soon as the Fund is informed of the dividend.
Interest income is recorded on an accrual basis.
E. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses are allocated daily to
each class of shares based upon the relative value of shares of each class.
Class-specific expenses, which include distribution and service fees and any
other items that are specifically attributable to a particular class, are
charged directly to such class. For the six months ended June 30, 1999,
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.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the six months ended June 30, 1999, amounted to $350,729,228 and $349,324,444,
respectively.
At June 30, 1999, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio securities
amounted to $260,900,160 and $6,402,629, respectively.
4. SHORT-TERM INVESTMENTS -- At June 30, 1999, the Fund owned short-term
investments which matured in less than seven days.
5. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides the necessary personnel and facilities. Compensation of all officers of
the Fund, all directors of the Fund who are employees or consultants of the
Manager, and all personnel of the Fund and the Manager is paid by the Manager.
The Manager receives a fee, calculated daily and payable monthly, equal to 0.65%
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 Advisors, Inc. (the "Distributor"), agent for the distribution of
the Fund's shares and an affiliate of the Manager, received concessions of
$28,700, from sales of Class A shares. Commissions of $217,511 and $6,233 were
paid to dealers from sales of Class A and Class C shares, respectively.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive a continuing fee of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor charges
such fees to the Fund pursuant to the Plan. For the six months ended June 30,
1999, fees incurred under the Plan aggregated $905,475 or 0.24% per annum of the
average daily net assets of Class A shares.
Under the Plan, with respect to Class B shares, Class C shares, and Class D
shares, service organizations can enter into agreements with the Distributor and
receive a continuing fee for providing personal services and/or the maintenance
of shareholder accounts of up to 0.25% on an annual basis of the average daily
net assets of the Class B, Class C, and Class D shares for which the
organizations are responsible; and, for Class C and Class D shares, fees for
providing other distribution assistance of up to 0.75% on an annual basis of
such average daily net assets. Such fees are paid monthly by the Fund to the
Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of 0.75% on an annual
basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to this fee to a third
party (the "Purchaser"), which provides funding to the Distributor to enable it
to pay commissions to dealers at the time of the sale of the related Class B
shares.
For the six months ended June 30, 1999, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B, Class C,
and Class D shares, amounted to $188,417, $225, and $416,492, respectively.
The Distributor is entitled to retain any CDSC imposed on certain
redemptions of Class A and Class C shares occurring within 18 months of purchase
and on redemptions of Class D shares occurring within one year of purchase. For
the six months ended June 30, 1999, such charges amounted to $7,726.
The Distributor has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSC and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate of such payments
retained by the Distributor, for the six months ended June 30, 1999, amounted to
$7,971.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the six months ended June 30, 1999,
Seligman Services, Inc. received commissions of $17,734 from the sales of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $209,902, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $692,905 for shareholder account
services. The Fund's investment in Seligman Data Corp. is recorded at a cost of
$22,506.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1999, of $173,833 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
6. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $750 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. The Fund's borrowings are limited to 10%
of its net assets. Borrowings pursuant to the credit facility are subject to
interest at a rate equal to the overnight federal funds rate plus 0.50%. The
Fund incurs a commitment fee of 0.08% per annum on its share of the unused
portion of the credit facility. The credit facility may be drawn upon only for
temporary purposes and is subject to certain other customary restrictions. The
credit facility commitment expires 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.
7. CAPITAL SHARE TRANSACTIONS -- The Fund has authorized 500,000,000 shares of
$0.50 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------- ----------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net proceeds from
sales of shares 522,234 $ 8,321,947 1,075,908 $ 17,690,194
Investment of
dividends 212,049 3,432,447 467,206 7,430,217
Exchanged from
associated Funds 8,498,902 136,519,838 8,129,002 129,536,299
Shares issued in
payment of gain
distributions 395,125 6,364,062 5,077,418 79,072,919
- --------------------------------------------------- ----------------------------
Total 9,628,310 154,638,294 14,749,534 233,729,629
- --------------------------------------------------- ----------------------------
Cost of shares
repurchased (3,004,514) (47,890,183) (4,342,402) (70,858,055)
Exchanged into
associated Funds (8,573,893) (137,434,781) (8,352,447) (132,655,143)
- --------------------------------------------------- ----------------------------
Total (11,578,407) (185,324,964) (12,694,849) (203,513,198)
- --------------------------------------------------- ----------------------------
Increase
(Decrease)
in Shares (1,950,097) $ (30,686,670) 2,054,685 $ 30,216,431
- --------------------------------------------------- ----------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------- ----------------------------
CLASS B SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------- ----------------------------
Net proceeds from
sales of shares 337,137 $ 5,345,106 664,577 $ 10,829,016
Investment
of dividends 9,159 147,762 17,828 279,506
Exchanged from
associated Funds 238,191 3,794,296 486,767 7,903,883
Shares issued in
payment of gain
distributions 28,386 455,023 271,666 4,204,415
- --------------------------------------------------- ----------------------------
Total 612,873 9,742,187 1,440,838 23,216,820
- --------------------------------------------------- ----------------------------
Cost of shares
repurchased (162,898) (2,587,894) (212,770) (3,418,774)
Exchanged into
associated Funds (115,026) (1,818,095) (227,709) (3,672,827)
- --------------------------------------------------- ----------------------------
Total (277,924) (4,405,989) (440,479) (7,091,601)
- --------------------------------------------------- ----------------------------
Increase in Shares 334,949 $ 5,336,198 1,000,359 $ 16,125,219
- --------------------------------------------------- ----------------------------
</TABLE>
MAY 27, 1999*
TO JUNE 30, 1999
- ---------------------------------------------------
CLASS C SHARES AMOUNT
- ---------------------------------------------------
Net proceeds from
sales of shares 56,220 $916,084
Investment of
dividends 31 504
- ---------------------------------------------------
Total 56,251 916,588
- ---------------------------------------------------
Exchanged into
associated Funds (210) (3,361)
- ---------------------------------------------------
Total (210) (3,361)
- ---------------------------------------------------
Increase in Shares 56,041 $913,227
- ---------------------------------------------------
* Commencement of offering of shares.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
------------------------- ----------------------------
CLASS D SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net proceeds from
sales of shares 272,214 $ 4,327,099 542,815 $ 8,937,844
Investment
of dividends 19,459 313,960 49,412 779,902
Exchanged from
associated Funds 821,141 13,056,910 3,098,173 49,213,928
Shares issued in
payment of gain
distributions 58,836 943,722 741,851 11,512,215
- --------------------------------------------------- ----------------------------
Total 1,171,650 18,641,691 4,432,251 70,443,889
- --------------------------------------------------- ----------------------------
Cost of shares
repurchased (714,816) (11,350,116) (971,678) (15,746,103)
Exchanged into
associated Funds (713,430) (11,325,922) (3,108,165) (49,277,507)
- --------------------------------------------------- ----------------------------
Total (1,428,246) (22,676,038) (4,079,843) (65,023,610)
- --------------------------------------------------- ----------------------------
Increase
(Decrease)
in Shares (256,596) $ (4,034,347) 352,408 $ 5,420,279
- --------------------------------------------------- ----------------------------
</TABLE>
15
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five and one-half years or from its inception if less
than five and one-half years. Certain information reflects financial results for
a single share of a Class that was held throughout the periods shown. Per share
amounts are calculated using average shares outstanding. "Total return" shows
the rate that you would have earned (or lost) on an investment in each Class,
assuming you reinvested all your dividends and capital gain distributions. Total
returns do not reflect any sales charges and are not annualized for periods of
less than one year.
<TABLE>
<CAPTION>
CLASS A
----------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........ $15.77 $15.92 $14.89 $14.19 $12.12 $13.47
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.18 0.28 0.30 0.35 0.36 0.38
Net realized and unrealized gain (loss)
on investments ............................ 1.04 2.32 3.18 1.81 3.00 (0.64)
Net realized and unrealized gain (loss)
from foreign currency transactions ........ -- -- (0.07) -- 0.01 --
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ............ 1.22 2.60 3.41 2.16 3.37 (0.26)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ........ (0.13) (0.28) (0.32) (0.34) (0.36) (0.37)
Distributions from net realized capital gains (0.20) (2.47) (2.06) (1.12) (0.94) (0.72)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ......................... (0.33) (2.75) (2.38) (1.46) (1.30) (1.09)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .............. $16.66 $15.77 $15.92 $14.89 $14.19 $12.12
====== ====== ====== ====== ====== ======
TOTAL RETURN: ............................... 7.81% 17.40% 23.58% 15.44% 28.17% (1.89)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) .... $770,124 $760,176 $734,635 $656,260 $614,400 $510,956
Ratio of expenses to average net assets ..... 1.13%+ 1.11% 1.13% 1.15% 0.93% 0.85%
Ratio of net income to average net assets ... 2.28%+ 1.73% 1.83% 2.36% 2.56% 2.93%
Portfolio turnover rate ..................... 42.43% 93.67% 106.02% 56.10% 46.08% 57.17%
</TABLE>
- ----------
See footnotes on page 17.
16
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
CLASS B CLASS C
------------------------------------------------------ ---------
YEAR ENDED
SIX MONTHS DECEMBER 31, 4/22/96* 5/27/99*
ENDED -------------------- TO TO
6/30/99 1998 1997 12/31/96 6/30/99
------- ---- ---- -------- -------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........ $15.71 $15.88 $14.87 $14.80 $16.06
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.12 0.16 0.17 0.15 (0.01)
Net realized and unrealized gain
on investments ............................ 1.03 2.31 3.17 1.20 0.79
Net realized and unrealized gain (loss)
from foreign currency transactions ........ -- -- (0.07) -- --
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ............ 1.15 2.47 3.27 1.35 0.78
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ........ (0.07) (0.17) (0.20) (0.16) (0.03)
Distributions from net realized capital gains (0.20) (2.47) (2.06) (1.12) (0.20)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ......................... (0.27) (2.64) (2.26) (1.28) (0.23)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .............. $16.59 $15.71 $15.88 $14.87 $16.61
====== ====== ====== ====== ======
TOTAL RETURN: ............................... 7.35% 16.48% 22.59% 9.21% 4.91%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) .... $42,593 $35,073 $19,568 $6,451 $931
Ratio of expenses to average net assets ..... 1.88%+ 1.87% 1.89% 1.92%+ 1.99%+
Ratio of net income to average net assets ... 1.53%+ 0.97% 1.07% 1.55%+ (0.32)%+
Portfolio turnover rate ..................... 42.43% 93.67% 106.02% 56.10%++ 42.43%**
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994
------- ---- ---- ---- ---- ----
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........ $15.73 $15.89 $14.87 $14.16 $12.07 $13.46
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.12 0.16 0.17 0.24 0.24 0.22
Net realized and unrealized gain (loss)
on investments ............................ 1.03 2.32 3.18 1.80 3.00 (0.66)
Net realized and unrealized gain (loss)
from foreign currency transactions ........ -- -- (0.07) -- 0.01 --
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ............ 1.15 2.48 3.28 2.04 3.25 (0.44)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ........ (0.07) (0.17) (0.20) (0.21) (0.22) (0.23)
Distributions from net realized capital gains (0.20) (2.47) (2.06) (1.12) (0.94) (0.72)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ......................... (0.27) (2.64) (2.26) (1.33) (1.16) (0.95)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD .............. $16.61 $15.73 $15.89 $14.87 $14.16 $12.07
====== ====== ====== ====== ====== ======
TOTAL RETURN: ............................... 7.34% 16.55% 22.66% 14.58% 27.17% (3.24)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) .... $86,144 $85,608 $80,896 $63,938 $46,564 $14,416
Ratio of expenses to average net assets ..... 1.88%+ 1.87% 1.89% 1.91% 1.72% 1.96%
Ratio of net income to average net assets ... 1.53%+ 0.97% 1.07% 1.61% 1.80% 1.68%
Portfolio turnover rate ..................... 42.43% 93.67% 106.02% 56.10% 46.08% 57.17%
</TABLE>
- ----------
* Commencement of offering of shares.
** For the six months ended June 30, 1999.
+ Annualized.
++ For the year ended December 31, 1996.
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,
1999, 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, 1998, 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, 1999, by correspondence with the Fund's custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman Common Stock Fund, Inc. as of June 30, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, New York
August 6, 1999
18
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
DIRECTOR, Conoco Inc.
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
TRUSTEE, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
- ----------------
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 Advisors, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
20
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The AVERAGE ANNUAL TOTAL
RETURN represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- ----------
Adapted from the Investment Company Institute's 1999 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 ADVISORS, INC.
AN AFFILIATE OF
[LOGO]
J.& W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQCS3 6/99 Printed on Recycled Paper
