SELIGMAN
-------------------------
COMMON STOCK
FUND, INC.
Annual Report
December 31, 1999
-----------
[GRAPHIC OMITTED]
SEEKING FAVORABLE
CURRENT INCOME AND
LONG-TERM GROWTH
OF BOTH INCOME
AND CAPITAL
WITHOUT EXPOSING
CAPITAL TO
UNDUE RISK
[SELIGMAN 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 136 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman in the new millennium.
[GRAPHIC OMITTED]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
TABLE OF CONTENTS
To the Shareholders.................................... 1
Interview With Your Portfolio Managers................. 2
Performance Overview................................... 4
Portfolio Overview..................................... 6
Portfolio of Investments............................... 8
Statement of Assets and Liabilities.................... 11
Statement of Operations................................ 12
Statements of Changes in Net Assets.................... 13
Notes to Financial Statements.......................... 14
Financial Highlights................................... 17
Report of Independent Auditors......................... 19
Federal Tax Status of 1999 Dividend and Gain
Distributions for Taxable Accounts .................. 20
Board of Directors .................................... 21
EXECUTIVE OFFICERS AND For More Information............ 22
Glossary of Financial Terms............................ 23
<PAGE>
TO THE SHAREHOLDERS
Nineteen-ninety nine was a challenging year for Seligman Common Stock Fund. The
Fund posted a total return of 3.82% based on the net asset value of Class A
shares while the Lipper Growth & Income Funds Average posted a total return of
13.15% and the Standard & Poor's Composite Stock Price Index (S&P 500) posted a
total return of 21.04%.
Despite stellar performances delivered by the popular indices, the US market was
once again extraordinarily narrow. Just over half the stocks in the S&P 500 had
positive returns. The outsized returns of a few stocks also skewed the indices.
Only seven stocks were responsible for half of the S&P 500's return; five of
these were technology companies, with four of those delivering astounding
triple-digit returns. Large-cap growth and technology companies continued to
dominate, while value stocks underperformed considerably. In such an
environment, the Fund, which pursues companies based upon valuations and
fundamentals, lagged behind. The market was driven, to a great extent, by
momentum and, in such a market, valuations and fundamentals are largely ignored.
In 1999, Seligman Common Stock Fund made an important change in its investment
strategy. Going forward, the Fund will include more stocks with greater
potential for capital appreciation. While we believe this will increase the
Fund's potential for long-term dividend growth, it will lower the Fund's
dividend yield over the short term. This slight refocusing should allow the Fund
to increase its total return potential, without significantly increasing risk.
It will also likely result in greater exposure to sectors such as technology,
communications, and health care. The Fund will still pursue income-producing
stocks, but will take a more balanced approach to total return.
We believe that the economy will slow moderately in 2000, which would be
positive for the long-term health of the stock market. As we look into the 21st
century, we believe there is much to be optimistic about, with several long-term
factors that may support equity prices for many years. First are global
demographic trends. The fastest-growing segment of the population in the US and
other developed countries is 45- to 64-year-olds, which is likely to increase
its savings rate as its members mature. We believe that this will produce a
groundswell of savings, which will be a significant support for equity prices in
the coming years.
Second, America has been experiencing disinflation since 1982, and nominal
interest rates have been in an 18-year secular downtrend. Despite the uptick in
rates during 1999, we believe that the long-term trend is one of continued
benign inflation and low interest rates -- a positive environment for the stock
market. Third, the global economy has rebounded strongly since the 1998
financial crisis. This should continue, allowing investors to benefit from
attractive overseas investment opportunities.
Fourth, new technology has allowed the economy to become vastly more productive,
and the industry now accounts for approximately 25% of gross domestic product
growth and approximately 40% of capital spending. Technology has been, and will
continue to be, responsible for substantial changes in business activity, both
business-to-business and business-to-consumer.
While we are highly enthusiastic about technology, and plan to increase the
Fund's weighting in this sector, we have taken a conservative approach since we
believe that investment behavior in this area has become increasingly
speculative. As we seek opportunities in this exciting sector, we will remain
committed to finding solid investment value and to considering company
fundamentals.
Thank you for your continued support of Seligman Common Stock Fund. A discussion
with your Fund's Portfolio Managers, as well as a performance overview and
financial statements, including a portfolio of investments, follows this letter.
We look forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 11, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
CHARLES C. SMITH, JR. AND RODNEY COLLINS
Q: HOW DID SELIGMAN COMMON STOCK FUND PERFORM IN THE LAST 12 MONTHS?
A: For the fiscal year ended December 31, 1999, Seligman Common Stock Fund
posted a total return of 3.82% based on the net asset value of Class A
shares. During the same period, the Lipper Growth & Income Funds Average,
which measures the results of mutual funds with similar investment
objectives, had a total return of 13.15% and the Standard & Poor's Composite
Stock Price Index (S&P 500) had a total return of 21.04%.
Q: WHY DID SELIGMAN COMMON STOCK FUND UNDERPERFORM AGAINST THE S&P 500 AND ITS
LIPPER PEER GROUP?
A: The stock market's strong overall performance last year was the result of
the outsized returns of a small number of high-priced growth stocks. The
technology sector, in particular, made a disproportionate impact on the
market's overall performance. This single industry, which at year-end
constituted 30% of the market cap of the S&P 500, accounted for 70% of the
Index's performance. Without technology, the S&P 500's return would have
been just 7.50%.
This extreme narrowness made last year's environment one of the most
challenging ever for value investors such as your Fund's managers. We focus
on seeking to find companies that have attractive yields, stable earnings
growth, strong fundamentals, and reasonable valuations. We believe that such
a strategy is the best way to build a portfolio of stocks that will deliver
solid performance over the long term. Over the short term, however, markets
can ignore fundamentals, as we believe they did in 1999. Investors seemed
willing to pay any price for stocks that appeared to be on an upward price
trend, with little or no regard for valuations and fundamentals. It was
largely a momentum-driven market. While we were disappointed with the Fund's
performance, we believe that remaining true to our discipline, and avoiding
stocks that seem to be moving higher on momentum alone, will best serve the
Fund's shareholders over the long term.
Q: WHAT ECONOMIC AND MARKET FACTORS AFFECTED THE FUND'S INVESTMENT RESULTS IN
1999?
A: In 1999, the Federal Reserve Board became concerned that US economic growth
was strong enough to pose a threat of inflation. The Federal Reserve Board
thus raised the federal funds rate three times during the year. The Federal
Reserve Board's more restrictive policy, along with increased inflation
concerns in the market, drove interest rates steadily higher during the
year. This had a negative effect on interest rate sensitive sectors, such as
the financial sector, which is the Fund's second most heavily weighted
industry.
- --------------------------------------------------------------------------------
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, the Fund's
Co-Portfolio Manager, 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 OMITTED]
GROWTH AND INCOME TEAM: (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
Q: WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PAST FISCAL YEAR?
A: In recent years, we have observed a significant change in the market, in
which capital returns have become an increasingly greater component of the
market's total return. (An asset's total return is comprised of two
components: the asset's capital appreciation and the income that the asset
produces.) After much consideration, we decided that this was a long-term
fundamental shift, and that the Fund would need to adapt in order to remain
competitive with the market and with its peers.
The Fund has historically focused on high-dividend-paying stocks. While this
was at the expense of pursuing higher capital appreciation potential, the
strategy served the Fund well for many years and provided shareholders with
a yield that was typically higher than that of the market. However, it
caused the Fund to be underweighted in sectors that pay small or no
dividends, such as technology, communications, and health care -- areas that
have delivered the highest capital gains over the past few years.
Beginning with fiscal year 1999, we began to pursue stocks with greater
capital appreciation potential. We began decreasing the Fund's exposure to
more mature industries like utilities, energy, and transportation, while
increasing exposure to growth industries like technology, communications,
and health care.
We will continue to study company fundamentals and seek to pay reasonable
prices for growth. In addition, while we will place greater emphasis on
growth of capital, the Fund's investment objective of "producing favorable,
but not the highest, current income and long-term growth of both income and
capital value, without exposing capital to undue risk," remains unchanged.
Q: WHAT SECTORS MOST AFFECTED THE FUND'S PERFORMANCE DURING THE FISCAL YEAR?
A: Basic materials, technology, capital goods, and energy were the
best-performing sectors of the portfolio. However, the Fund's significant
underweighting in technology, by far the strongest performing market sector
of the year, versus the S&P 500, negatively impacted relative performance.
Consumer staples, health care, utilities, and transportation were negative
market performers for the year and adversely affected the Fund's
performance. Consumer stocks were out of favor during the year because
investors focused on the lack of pricing flexibility for these companies.
Health care suffered over uncertainty regarding the possibility of Medicare
controls over drug prices. Financial stocks delivered generally flat
performance for the year, so the Fund's overweighting in this industry was a
drag on the Fund's performance relative to the S&P 500.
Q: WHAT IS YOUR OUTLOOK?
A: We are cautiously optimistic regarding the outlook for value stocks and for
Seligman Common Stock Fund in the year 2000. We do not believe that the type
of market that prevailed in 1999 -- one in which economic and
company-specific fundamentals were at times ignored -- can continue. Many
good companies languished in 1999 and are now trading at what we believe are
exceptionally attractive prices.
We believe that the Fund's decision to focus on total return will benefit
the Fund's absolute and relative performance by allowing it to maintain
industry weightings that are more representative of today's market. This
shift will, in the short run, produce a short-term decline in current income
because capital appreciation should now constitute a greater portion of the
Fund's total return. However, over time, shareholder income should actually
increase if there is more capital working for them. The change may also
benefit shareholders in terms of taxes, since long-term capital gains
currently enjoy favorable tax status compared to current income.
The Fund has not abandoned the pursuit of income, but its yield will now be
closer to that of its peer group. In addition, we will continue to monitor
the Fund's level of risk, which should remain lower than that of the overall
market and its peer group. We believe that the Fund's focus on total return
will improve the Fund's risk-adjusted results.
3
<PAGE>
PERFORMANCE OVERVIEW
This chart compares a $10,000 hypothetical investment made in Seligman
Common Stock Fund Class A shares, with and without the initial 4.75% maximum
sales charge, and assumes that all distributions within the period are invested
in additional shares, for the 10-year period ended December 31, 1999, to a
$10,000 investment made in the Lipper Growth & Income Funds Average (Lipper
Growth & Income Average) and the Standard & Poor's 500 Composite Stock Price
Index (S&P 500) for the same period. The performances of Seligman Common Stock
Fund Class B, Class C, and Class D shares are not shown in this chart but are
included in the table on page 5. It is important to keep in mind that the Lipper
Growth & Income Average and the S&P 500 exclude the effect of fees and/or sales
charges.
[LINE CHART OMITTED]
SELIGMAN COMMON STOCK FUND CLASS A
With Sales Without Sales LIPPER GROWTH &
Date Charge Charge S&P 500 INCOME AVERAGE
- ---- ------ ------ ------- --------------
12/31/89 9525 10000 10000 10000
12/31/90 9155 9611 9689 9548
12/31/91 11895 12488 12642 12344
12/31/92 13187 13844 13603 13433
12/31/93 15146 15901 14974 15041
12/31/94 14860 15600 15172 14916
12/31/95 19046 19995 20875 19616
12/31/96 21986 23082 25670 23829
12/31/97 27170 28524 34234 30302
12/31/98 31896 33485 44017 34988
12/31/99 33112 34763 53276 39589
The performances of Class B, Class C and Class D shares will be greater than
or less than the performance shown for Class A shares, based on the differences
in sales charges and fees paid by shareholders.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-----------------------------------------------------------
CLASS C CLASS B CLASS D
SINCE SINCE SINCE
SIX INCEPTION ONE FIVE 10 INCEPTION INCEPTION
MONTHS* 5/27/99* YEAR YEARS YEARS 4/22/96 5/3/93
----------- ----------- -------- -------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (8.27)% n/a (1.14)% 16.25% 12.72% n/a n/a
Without Sales Charge (3.70) n/a 3.82 17.38 13.27 n/a n/a
CLASS B**
With CDSC+ (8.56) n/a (1.76) n/a n/a 13.10% n/a
Without CDSC (4.09) n/a 2.97 n/a n/a 13.68 n/a
CLASS C**
With Sales Charge and CDSC (5.93) (1.28)% n/a n/a n/a n/a n/a
Without Sales Charge and CDSC (4.08) 0.64 n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC (4.97) n/a 2.02 n/a n/a n/a n/a
Without CDSC (4.08) n/a 2.97 16.49 n/a n/a 13.04%
LIPPER GROWTH & INCOME
FUNDS AVERAGE*** 1.94 6.350 13.15 21.56 14.75 18.66++ 17.09+++
S&P 500*** 7.70 13.680 21.04 28.55 18.21 26.78++ 22.39+++
<CAPTION>
NET ASSET VALUE DIVIDEND AND CAPITAL GAIN INFORMATION
FOR THE PERIOD ENDED DECEMBER 31, 1999
DIVIDENDS
DECEMBER 31, 1998 JUNE 30, 1999 DECEMBER 31, 1999 PAID CAPITAL GAIN
----------------- ------------- ----------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A $14.93 $16.66 $15.77 CLASS A $0.230 PAID $1.226(0)
CLASS B 14.85 16.59 15.71 CLASS B 0.118 UNDISTRIBUTED
CLASS C 14.87 16.61 N/A CLASS C 0.084 REALIZED 0.164(000)
CLASS D 14.87 16.61 15.73 CLASS D 0.118 UNREALIZED 3.233++
</TABLE>
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.
0 From May 31, 1999.
00 Includes $0.199 of undistributed realized capital gains from 1998, which was
paid to Class A, B and D shareholders on June 24, 1999.
000 Represents net gain realized from November and December 1999, payable in
2000.
++ Represents the per share amount of net unrealized appreciation of portfolio
securities as of December 31, 1999.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
---------------------
DECEMBER 31,
------ ------------ ------------ --------------------
ISSUES COST VALUE 1999 1998
------ ------------ ------------ ------ ------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
Aerospace ............................................. 1 $ 3,084,880 $ 3,956,250 0.5 0.5
Automotive and Related ................................ 2 13,787,060 17,959,062 2.2 5.4
Basic Materials ....................................... -- -- -- -- 0.5
Capital Goods ......................................... -- -- -- -- 0.9
Chemicals ............................................. 1 6,919,810 8,234,375 1.0 0.9
Communications ........................................ 4 53,520,209 61,131,428 7.6 9.8
Communications Equipment .............................. 2 18,706,460 20,180,937 2.5 --
Computers and Business Services ....................... 9 121,149,505 152,529,062 19.0 4.0
Consumer Goods and Services ........................... 9 75,358,742 89,041,250 11.1 13.5
Diversified ........................................... -- -- -- -- 1.5
Drugs and Health
Care .................................................... 8 64,189,846 71,733,750 8.9 7.9
Electric and Gas Utilities ............................ 2 16,273,124 21,137,813 2.6 7.0
Electric Equipment .................................... 2 19,773,954 38,919,212 4.9 --
Electronics ........................................... 1 11,699,016 6,773,438 0.8 2.8
Energy ................................................ 5 33,920,660 53,857,966 6.7 10.2
Finance and Insurance ................................. 12 105,218,855 144,988,300 18.0 17.9
Machinery and Industrial Equipment .................... 1 11,482,870 23,400,000 2.9 5.9
Office Equipment ...................................... 1 8,181,572 9,179,375 1.2 --
Paper and Forest Products ............................. 1 6,172,308 9,121,875 1.1 0.9
Publishing ............................................ 1 5,723,685 6,117,188 0.8 0.7
Retail Trade .......................................... 3 32,573,876 43,407,375 5.4 1.5
Transportation ........................................ 1 1,000,000 1,380,000 0.2 2.7
--- ------------ ------------ ----- -----
66 608,736,432 783,048,656 97.4 94.5
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES ........................... 1 21,124,199 21,124,199 2.6 5.5
--- ------------ ------------ ----- -----
NET ASSETS ................................................ 67 $629,860,631 $804,172,855 100.0 100.0
=== ============ ============ ===== =====
</TABLE>
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/99
- ------------- ----------- ------------
Applied Materials............ 135,000 135,000
Clorox........................ 110,000 230,000(1)
CVS........................... 302,000 302,000
Gillette...................... 230,000 230,000
International Business
Machines 85,000 165,000
Johnson & Johnson............. 85,000 140,000
Merrill Lynch................. 110,000 110,000
Nortel Networks............... 85,000 85,000
Pitney Bowes.................. 190,000 190,000
Wal-Mart Stores.............. 170,000 345,000
SHARES
---------------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/99
- --------------- ------------- -------------
Bank of New York............. 225,000 415,000
DQE........................... 225,000 --
GATX.......................... 320,000 --
General Electric.............. 60,000 204,900
GTE.......................... 260,000 185,000
Honeywell International(2).... 165,000 125,000
Philip Morris................. 550,000 --
Sonat......................... 330,000 --
Unilever...................... 357,142 --
Washington Mutual............. 394,800 --
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 120,000 shares received as a result of a 2-for-1 stock split.
(2) Formerly, AlliedSignal.
LARGEST INDUSTRIES
DECEMBER 31, 1999
[BAR CHART OMITTED]
COMPUTERS AND BUSINESS SERVICES $152,529,062
FINANCE AND INSURANCE $144,988,300
CONSUMER GOODS AND SERVICES $ 89,041,250
DRUGS AND HEALTH CARE $ 71,733,750
COMMUNICATIONS $ 61,131,428
LARGEST PORTFOLIO HOLDINGS
DECEMBER 31, 1999
SECURITY VALUE
- -------- -----------
Microsoft........................ $36,766,406
General Electric................. 31,708,275
Wal-Mart Stores.................. 23,848,125
United Technologies.............. 23,400,000
Intel............................ 20,570,312
Exxon Mobil...................... 20,189,929
Cisco Systems.................... 19,812,344
AT&T............................. 18,016,250
International Business
Machines ...................... 17,820,000
SBC Communications............... 17,731,350
7
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
------ -----
COMMON STOCKS 97.4%
AEROSPACE 0.5%
GENERAL DYNAMICS
Provider of defense products 75,000 $ 3,956,250
------------
AUTOMOTIVE AND
RELATED 2.2%
DAIMLERCHRYSLER
Manufacturer of automobiles,
trucks, and related parts 110,000 8,607,500
FORD MOTOR
Manufacturer and distributor
of automobiles, trucks, and
related parts 175,000 9,351,562
------------
17,959,062
------------
CHEMICALS 1.0%
DUPONT (E.I.) DE NEMOURS
Producer of chemicals 125,000 8,234,375
------------
COMMUNICATIONS 7.6%
AT&T
Provider of
telecommunications services 355,000 18,016,250
GTE
Provider of telephone services,
systems, and equipment 185,000 13,054,062
MCI WORLDCOM*
Provider of telecommun-
ications services 232,500 12,329,766
SBC COMMUNICATIONS
Provider of telephone
services 363,720 17,731,350
------------
61,131,428
------------
COMMUNICATIONS
EQUIPMENT 2.5%
LUCENT TECHNOLOGIES
Manufacturer of telecommun-
ications equipment 155,000 11,595,937
NORTEL NETWORKS
Producer of telecommun-
ications equipment 85,000 8,585,000
------------
20,180,937
------------
COMPUTERS AND
BUSINESS SERVICES 19.0%
AMERICA ONLINE*
Provider of electronic mail,
entertainment, reference, and
interactive publications,
as well as Internet access 95,000 7,166,562
APPLIED MATERIALS*
Developer, manufacturer, and
marketer of semiconductor
wafer fabrication
equipment 135,000 17,098,594
COMPUTERS AND
BUSINESS SERVICES (CONTINUED)
CISCO SYSTEMS*
Manufacturer of computer
network products 185,000 $ 19,812,344
DELL COMPUTER*
International provider of
computer systems and services 175,000 8,919,531
ELECTRONIC DATA SYSTEMS
Provider of management
consulting and technology
services 245,000 16,399,688
HEWLETT-PACKARD
Manufacturer of computers
and peripherals 70,000 7,975,625
INTEL
Manufacturer of micro-
processors and memory circuits 250,000 20,570,312
INTERNATIONAL BUSINESS MACHINES
Manufacturer of macro and
personal computers 165,000 17,820,000
MICROSOFT*
Provider of personal computer
operating systems and
application software products 315,000 36,766,406
------------
152,529,062
------------
CONSUMER GOODS
AND SERVICES 11.1%
ANHEUSER-BUSCH
Brewery; theme park operator;
manufacturer and recycler
of aluminum beverage
containers 115,000 8,150,625
BESTFOODS
Manufacturer of brand name
food products 185,000 9,724,063
CLOROX
Manufacturer and marketer of
household consumer products 230,000 11,586,250
COCA-COLA
Manufacturer and marketer of
soft drinks and consumer
products 125,000 7,281,250
CONAGRA
Producer and manufacturer of
prepared foods and agricul-
tural products 480,000 10,830,000
GILLETTE
Manufacturer of personal
care products 230,000 9,473,125
PEPSICO
Manufacturer and marketer
of soft drinks and consumer
products 300,000 10,575,000
- ----------
See footnotes on page 10.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
------ -----
CONSUMER GOODS
AND SERVICES (CONTINUED)
PROCTER & GAMBLE
Manufacturer and distributor
of household and personal
care products 120,000 $ 13,147,500
SARA LEE
Manufacturer of processed
foods and consumer products 375,000 8,273,437
------------
89,041,250
------------
DRUGS AND
HEALTH CARE 8.9%
ABBOTT LABORATORIES
Developer and manufacturer
of diversified health
care products 210,000 7,625,625
AMERICAN HOME PRODUCTS
Developer and manufacturer
of pharmaceuticals 250,000 9,859,375
BAXTER INTERNATIONAL
Manufacturer and distributor
of hospital and laboratory
products 125,000 7,851,563
BRISTOL-MYERS SQUIBB
Developer and manufacturer
of health and personal
care products 140,000 8,986,250
JOHNSON & JOHNSON
Developer and manufacturer
of health care products 140,000 13,037,500
MERCK Developer and manufacturer
of pharmaceuticals 175,000 11,735,937
PFIZER
Manufacturer of consumer
health care products 175,000 5,676,563
SCHERING-PLOUGH
Manufacturer of pharmaceu-
ticals and health and personal
care products 165,000 6,960,937
------------
71,733,750
------------
ELECTRIC AND GAS
UTILITIES 2.6%
UNICOM
Electric utility 225,000 7,537,500
WILLIAMS COMPANIES (THE)
Provider of natural gas and
telecommunications services 445,000 13,600,313
------------
21,137,813
------------
ELECTRIC EQUIPMENT 4.9%
GENERAL ELECTRIC
Supplier of industrial
equipment and consumer
products 204,900 31,708,275
ELECTRIC EQUIPMENT (CONTINUED)
HONEYWELL INTERNATIONAL
Manufacturer of automation
and control systems 125,000 $ 7,210,937
------------
38,919,212
------------
ELECTRONICS 0.8%
RAYTHEON (CLASS B)
Producer of defense and
commercial electronics 255,001 6,773,438
------------
ENERGY 6.7%
BP AMOCO (ADRS)
(United Kingdom)
Explorer, producer, refiner, and
retailer of petroleum products 190,000 11,269,375
EXXON MOBIL
Explorer and producer
of natural gas, oil, and
petroleum products 250,612 20,189,929
ROYAL DUTCH PETROLEUM (Netherlands)
Provider of international
oil services 210,000 12,691,875
SCHLUMBERGER
Worldwide provider of
energy services 155,000 8,718,750
TRANSOCEAN SEDCO FOREX
Provider of offshore drilling 30,008 988,037
------------
53,857,966
------------
FINANCE AND
INSURANCE 18.0%
AMERICAN GENERAL
Provider of insurance
and annuity services 190,000 14,416,250
AMERICAN INTERNATIONAL GROUP
Provider of insurance 117,500 12,704,688
BANK OF AMERICA
Commercial bank 320,265 16,073,300
BANK OF NEW YORK
Commercial bank 415,000 16,600,000
CHUBB
International holding company
specializing in property and
casualty insurance 120,000 6,757,500
CITIGROUP
Provider of diversified
financial services 295,000 16,390,937
FANNIE MAE
Provider of mortgage financing 140,000 8,741,250
HARTFORD FINANCIAL
SERVICES GROUP
International insurance
supplier 250,000 11,843,750
- ----------
See footnotes on page 10.
9
<PAGE>
Portfolio of Investments
DECEMBER 31, 1999
SHARES VALUE
------ -----
FINANCE AND
INSURANCE (CONTINUED)
LINCOLN NATIONAL
Provider of life insurance and
investment management
services 370,000 $ 14,800,000
MELLON BANK
Provider of financial services 290,000 9,878,125
MERRILL LYNCH
Provider of financial services 110,000 9,185,000
MORGAN (J.P.)
Provider of financial services 60,000 7,597,500
------------
144,988,300
------------
MACHINERY AND INDUSTRIAL
EQUIPMENT 2.9%
UNITED TECHNOLOGIES
Manufacturer of elevators,
jet engines, flight systems,
and automotive parts 360,000 23,400,000
------------
OFFICE EQUIPMENT 1.2%
PITNEY BOWES
Provider of office equipment 190,000 9,179,375
------------
PAPER AND FOREST
PRODUCTS 1.1%
MEAD
Manufacturer of paper,
lumber, and wood products 210,000 9,121,875
------------
PUBLISHING 0.8%
GANNETT
Newspaper publisher; radio and
television broadcaster 75,000 6,117,188
------------
RETAIL TRADE 5.4%
CVS
Pharmaceutical retailer 302,000 $ 12,061,125
MAY DEPARTMENT STORES
Department store operator 232,500 7,498,125
WAL-MART STORES
Discount retailer 345,000 23,848,125
------------
43,407,375
------------
TRANSPORTATION 0.2%
UNITED PARCEL SERVICE
Provider of transportation
services 20,000 1,380,000
------------
TOTAL COMMON STOCKS
(Cost $608,736,432) 783,048,656
SHORT-TERM
HOLDINGS 2.7%
(Cost $22,000,000) 22,000,000
------------
TOTAL INVESTMENTS 100.1%
(COST $630,736,432) 805,048,656
OTHER ASSETS
LESS LIABILITIES (0.1%) (875,801)
------------
NET ASSETS 100.0% $804,172,855
============
- ----------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
ASSETS:
Investments, at value:
Common stocks (cost $608,736,432) ............. $783,048,656
Short-term holdings (cost $22,000,000) ........ 22,000,000 $805,048,656
------------
Cash ............................................................ 378,181
Receivable for interest and dividends ........................... 1,228,417
Receivable for Capital Stock sold ............................... 274,199
Investment in, and expenses prepaid to,
shareholder service agent ..................................... 157,728
Other ........................................................... 41,768
------------
TOTAL ASSETS .................................................... 807,128,949
------------
LIABILITIES:
Payable for Capital Stock repurchased ........................... 1,559,565
Accrued expenses and other ...................................... 1,396,529
------------
TOTAL LIABILITIES ............................................... 2,956,094
------------
NET ASSETS ...................................................... $804,172,855
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.50 par value;
500,000,000 shares authorized;
53,912,286 shares outstanding):
Class A ....................................................... $ 22,943,079
Class B ....................................................... 1,411,259
Class C ....................................................... 148,589
Class D ....................................................... 2,453,217
Additional paid-in capital ...................................... 594,042,858
Undistributed net investment income ............................. 22,000
Undistributed net realized gain ................................. 8,839,629
Net unrealized appreciation of investments ...................... 174,312,224
------------
NET ASSETS ...................................................... $804,172,855
============
NET ASSET VALUE PER SHARE:
CLASS A ($684,874,461 / 45,886,158 SHARES) ...................... $ 14.93
============
CLASS B ($41,928,151 / 2,822,518 SHARES) ........................ $ 14.85
============
CLASS C ($4,420,200 / 297,177 SHARES) ........................... $ 14.87
============
CLASS D ($72,950,043 / 4,906,433 SHARES) ........................ $ 14.87
============
- ----------
See Notes to Financial Statements.
11
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INVESTMENT INCOME:
Dividends ................................ $20,479,462
Interest ................................. 1,894,351
---------
TOTAL INVESTMENT INCOME
(net of foreign taxes withheld of $594,467) .................... $22,373,813
EXPENSES:
Management fee ........................... 5,555,096
Distribution and service fees ............ 3,012,236
Shareholder account services ............. 1,434,151
Registration ............................. 165,756
Shareholder reports and communications ... 159,557
Custody and related services ............. 154,974
Auditing and legal fees .................. 70,909
Directors' fees and expenses ............. 41,303
Miscellaneous ............................ 34,321
-----------
TOTAL EXPENSES ................................................... 10,628,303
-----------
NET INVESTMENT INCOME ............................................ 11,745,510
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ......... 73,439,275
Net change in unrealized appreciation
of investments ......................... (54,646,312)
---------
NET GAIN ON INVESTMENTS .......................................... 18,792,963
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ........................... $30,538,473
===========
- ----------
See Notes to Financial Statements.
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
------------- -------------
1999 1998
------------- -------------
OPERATIONS:
Net investment income ........................ $ 11,745,510 $ 14,084,410
Net realized gain on investments ............. 73,439,275 105,122,144
Net realized loss from foreign
currency transactions ...................... -- (1,638,670)
Net change in unrealized appreciation
of investments ............................. (54,646,312) 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 ....... 30,538,473 136,821,755
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ...................................... (10,622,834) (13,006,242)
Class B ...................................... (304,424) (301,403)
Class C ...................................... (11,524) --
Class D ...................................... (606,895) (851,270)
Net realized gain on investments:
Class A ...................................... (54,859,234) (111,760,141)
Class B ...................................... (3,295,415) (4,472,471)
Class C ...................................... (240,249) --
Class D ...................................... (6,096,530) (12,434,658)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .... (76,037,105) (142,826,185)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 34,457,740 37,457,054
Investment of dividends ...................... 6,726,109 8,489,625
Exchanged from associated Funds .............. 227,652,546 186,654,110
Value of shares issued in payment
of gain distributions ...................... 46,902,138 94,789,549
------------- -------------
Total ........................................ 315,738,533 327,390,338
------------- -------------
Cost of shares repurchased ................... (110,774,095) (90,022,932)
Exchanged into associated Funds .............. (236,149,912) (185,605,477)
------------- -------------
Total ........................................ (346,924,007) (275,628,409)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........... (31,185,474) 51,761,929
------------- -------------
INCREASE (DECREASE) IN NET ASSETS ............ (76,684,106) 45,757,499
NET ASSETS:
Beginning of year ............................ 880,856,961 835,099,462
------------- -------------
END OF YEAR (including undistributed/
(distributions in excess of) net
investment income of $22,000 and
$(177,833), respectively) .................. $ 804,172,855 $ 880,856,961
============= =============
- ----------
See Notes to Financial Statements.
13
<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-specific expenses, and has exclusive voting rights with respect to any
matter on which a separate vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Fund:
a. SECURITY VALUATION -- Investments in common stocks 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 year ended
December 31, 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.
14
<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 year ended December 31, 1999, amounted to $576,218,183 and $644,700,959,
respectively.
At December 31, 1999, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities amounted to $185,783,270 and $11,471,046, respectively.
4. SHORT-TERM INVESTMENTS -- At December 31, 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
$43,442, from sales of Class A shares. Commissions of $329,136 and $43,977 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 year ended December 31,
1999, fees incurred under the Plan aggregated $1,780,806 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 year ended December 31, 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 $401,206, $14,076, and $816,148, respectively.
The Distributor is entitled to retain any CDSC imposed on certain
redemptions of Class A and Class C shares occurring within 18 months of purchase
and on redemptions of Class D shares occurring within one year of purchase. For
the year ended December 31, 1999, such charges amounted to $17,847.
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 year ended December 31, 1999, amounted to
$13,690.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the year ended December 31, 1999,
Seligman Services, Inc. received commissions of $27,759 from the sales of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $397,031, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $1,428,734 for shareholder
account services. The Fund's investment in Seligman Data Corp. is recorded at a
cost of $22,506.
15
<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 December 31, 1999, of $186,059
is included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
6. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $750 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. The Fund's borrowings are limited to 10%
of its net assets. Borrowings pursuant to the credit facility are subject to
interest at a rate equal to the overnight federal funds rate plus 0.50%. The
Fund incurs a commitment fee of 0.08% per annum on its share of the unused
portion of the credit facility. The credit facility may be drawn upon only for
temporary purposes and is subject to certain other customary restrictions. The
credit facility commitment expires in June 2000, but is renewable annually with
the consent of the participating banks. For the year ended December 31, 1999,
the Fund did not borrow from the credit facility.
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:
CLASS A
-----------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1999 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- -----------
Sale of shares 887,890 $14,060,961 1,075,908 $17,690,194
Investment of
dividends 377,181 5,949,510 467,206 7,430,217
Exchanged from
associated Funds 12,321,378 197,449,028 8,129,002 129,536,299
Shares issued in
payment of gain
distributions 2,476,076 38,015,344 5,077,418 79,072,919
Total 16,062,525 255,474,843 14,749,534 233,729,629
----------- ----------- ----------- -----------
Cost of shares
repurchased (5,263,262) (83,137,919) (4,342,402) (70,858,055)
Exchanged into
associated Funds (13,102,909) (209,212,249) (8,352,447) (132,655,143)
----------- ----------- ----------- -----------
Total (18,366,171) (292,350,168) (12,694,849) (203,513,198)
----------- ----------- ----------- -----------
Increase
(Decrease) (2,303,646) $(36,875,325) 2,054,685 $30,216,431
=========== =========== =========== ===========
CLASS B
-----------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1999 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
Sale of shares 592,378 $ 9,363,534 664,577 $ 10,829,016
Investment
of dividends 15,918 250,377 17,828 279,506
Exchanged from
associated Funds 546,804 8,552,742 486,767 7,903,883
Shares issued in
payment of gain
distributions 197,475 3,013,341 271,666 4,204,415
---------- ------------ ---------- ------------
Total 1,352,575 21,179,994 1,440,838 23,216,820
---------- ------------ ---------- ------------
Cost of shares
repurchased (381,174) (5,949,115) (212,770) (3,418,774)
Exchanged into
associated Funds (381,160) (5,868,263) (227,709) (3,672,827)
---------- ------------ ---------- ------------
Total (762,334) (11,817,378) (440,479) (7,091,601)
---------- ------------ ---------- ------------
Increase 590,241 $ 9,362,616 1,000,359 $ 16,125,219
========== ============ ========== ============
CLASS C
----------------------
MAY 27, 1999*
TO DECEMBER 31, 1999
----------------------
SHARES AMOUNT
-------- -----------
Sale of shares 302,005 $ 4,761,445
Investment of
dividends 727 10,981
Exchanged from
associated funds 3,953 58,258
Shares issued in
payment of gain
distributions 15,185 229,899
-------- -----------
Total 321,870 5,060,583
-------- -----------
Cost of shares
repurchased (2,597) (39,412)
Exchanged into
associated funds (22,096) (332,945)
-------- -----------
Total (24,693) (372,357)
-------- -----------
Increase 297,177 $ 4,688,226
======== ===========
* Commencement of offering of shares.
CLASS D
------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------
1999 1998
------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- ------------
Sale of shares 396,631 $ 6,271,800 542,815 $ 8,937,844
Investment
of dividends 32,682 515,241 49,412 779,902
Exchanged from
associated Funds 1,356,192 21,592,518 3,098,173 49,213,928
Shares issued in
payment of gain
distributions 369,261 5,643,554 741,851 11,512,215
---------- ------------ ---------- ------------
Total 2,154,766 34,023,113 4,432,251 70,443,889
---------- ------------ ---------- ------------
Cost of shares
repurchased (1,378,622) (21,647,649) (971,678) (15,746,103)
Exchanged into
associated Funds (1,313,666) (20,736,455) (3,108,165) (49,277,507)
---------- ------------ ---------- ------------
Total (2,692,288) (42,384,104) (4,079,843) (65,023,610)
---------- ------------ ---------- ------------
Increase
(Decrease) (537,522) $ (8,360,991) 352,408 $ 5,420,279
========== ============ ========== ============
16
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five years or from its inception if less than five
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
------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 15.77 $ 15.92 $ 14.89 $ 14.19 $ 12.12
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.23 0.28 0.30 0.35 0.36
Net realized and unrealized gain
on investments 0.39 2.32 3.18 1.81 3.00
Net realized and unrealized gain
from foreign currency transactions -- -- (0.07) -- 0.01
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.62 2.60 3.41 2.16 3.37
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.23) (0.28) (0.32) (0.34) (0.36)
Distributions from net realized capital gains (1.23) (2.47) (2.06) (1.12) (0.94)
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.46) (2.75) (2.38) (1.46) (1.30)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $ 14.93 $ 15.77 $ 15.92 $ 14.89 $ 14.19
======== ======== ======== ======== ========
TOTAL RETURN: 3.82% 17.40% 23.58% 15.44% 28.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $684,874 $760,176 $734,635 $656,260 $614,400
Ratio of expenses to average net assets 1.13% 1.11% 1.13% 1.15% 0.93%
Ratio of net income to average net assets 1.49% 1.73% 1.83% 2.36% 2.56%
Portfolio turnover rate 70.72% 93.67% 106.02% 56.10% 46.08%
</TABLE>
- ----------
See footnotes on page 18.
17
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS C
---------------------------------------------------- --------
YEAR ENDED DECEMBER 31, 4/22/96* 5/27/99*
------------------------------------- TO TO
1999 1998 1997 12/31/96 12/31/99
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.71 $ 15.88 $ 14.87 $ 14.80 $ 16.06
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.11 0.16 0.17 0.15 (0.01)
Net realized and unrealized gain (loss)
on investments 0.38 2.31 3.17 1.20 (0.07)
Net realized and unrealized loss
from foreign currency transactions -- -- (0.07) -- --
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.49 2.47 3.27 1.35 (0.08)
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.12) (0.17) (0.20) (0.16) (0.08)
Distributions from net realized capital gains (1.23) (2.47) (2.06) (1.12) (1.03)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (1.35) (2.64) (2.26) (1.28) (1.11)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 14.85 $ 15.71 $ 15.88 $ 14.87 $ 14.87
======= ======= ======= ======= =======
TOTAL RETURN: 2.97% 16.48% 22.59% 9.21% 0.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $41,928 $35,073 $19,568 $ 6,451 $ 4,420
Ratio of expenses to average net assets 1.89% 1.87% 1.89% 1.92%+ 1.91%+
Ratio of net income to average net assets 0.73% 0.97% 1.07% 1.55%+ (0.08)%+
Portfolio turnover rate 70.72% 93.67% 106.02% 56.10%++ 70.72%**
<CAPTION>
CLASS D
-------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 15.73 $ 15.89 $ 14.87 $ 14.16 $ 12.07
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.11 0.16 0.17 0.24 0.24
Net realized and unrealized gain
on investments 0.38 2.32 3.18 1.80 3.00
Net realized and unrealized gain (loss)
FROM FOREIGN CURRENCY TRANSACTIONS -- -- (0.07) -- 0.01
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS 0.49 2.48 3.28 2.04 3.25
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.12) (0.17) (0.20) (0.21) (0.22)
Distributions from net realized capital gains (1.23) (2.47) (2.06) (1.12) (0.94)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (1.35) (2.64) (2.26) (1.33) (1.16)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 14.87 $ 15.73 $ 15.89 $ 14.87 $ 14.16
======= ======= ======= ======= =======
TOTAL RETURN: 2.97% 16.55% 22.66% 14.58% 27.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $72,950 $85,608 $80,896 $63,938 $46,564
Ratio of expenses to average net assets 1.89% 1.87% 1.89% 1.91% 1.72%
Ratio of net income to average net assets 0.73% 0.97% 1.07% 1.61% 1.80%
Portfolio turnover rate 70.72% 93.67% 106.02% 56.10% 46.08%
</TABLE>
- ----------
* Commencement of offering of shares.
** For the year ended December 31, 1999.
+ Annualized.
++ For the year ended December 31, 1996.
See Notes to Financial Statements.
18
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN COMMON STOCK FUND, INC.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Seligman Common Stock Fund, Inc. as
of December 31, 1999, the related statements of operations for the year then
ended and of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the periods presented.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the Fund's custodian. 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 December 31, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, New York
February 11, 2000
19
<PAGE>
FEDERAL TAX STATUS OF 1999 DIVIDEND AND
GAIN DISTRIBUTIONS FOR TAXABLE ACCOUNTS
The quarterly dividends paid to Class A, B, C, and D shareholders in 1999 are
taxable as ordinary income for federal tax purposes, regardless of whether they
were received in cash or in shares. Under the Internal Revenue Code, 80.07% of
the dividends paid to Class A, B, C, and D shareholders has been designated as
qualifying for the dividends received deduction available to corporate
shareholders. In order to claim the dividends received deduction for these
distributions, corporate shareholders must have held the Fund's shares for at
least 46 days or more during the 90-day period beginning 45 days before each
ex-dividend date.
A distribution of $0.199 per share, from net long-term gain realized on
investments during the period November 1, 1998, to December 31, 1998, was paid
on June 24, 1999, to Class A, B, and D shareholders. On November 23, 1999, a
distribution of $1.027 per share from net long-term gain realized on investments
through October 31, 1999, was paid to Class A, B, C, and D shareholders.
If the gain distributions were paid in shares, the per share cost basis for
federal income tax purposes is $16.11 for Class A shares, $16.03 for Class B
shares and $16.04 for Class D shares for the June 24 distribution, and $15.21
for Class A shares, $15.13 for Class B shares, and $15.14 for Class C and D
shares for the November 23 distribution.
A 1999 year-end statement of account activity and a 1999 tax package, which may
include a Form 1099-DIV, a Form 1099-B, and/or a Cost Basis Statement, have been
mailed to each shareholder. Form 1099-DIV shows the distributions paid to the
shareholder during the year. Form 1099-B shows the proceeds of any redemptions
paid to the shareholder during the year. Cost Basis Statements report all sales
or exchanges from a shareholder's account which may have resulted in a capital
gain or loss in 1999. The information shown on Forms 1099-DIV and 1099-B is
reported to the Internal Revenue Service as required by federal regulations.
20
<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
21
<PAGE>
EXECUTIVE OFFICERS
WILLIAM C. MORRIS CHARLES C. SMITH, JR. THOMAS G. ROSE
CHAIRMAN VICE PRESIDENT TREASURER
BRIAN T. ZINO LAWRENCE P. VOGEL FRANK J. NASTA
PRESIDENT VICE PRESIDENT 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
22
<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.
23
<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
EQCS2 12/99 [RECYCLE LOGO] Printed on Recycled Paper
