SELIGMAN
----------
GROWTH
FUND, INC.
[GRAPHIC OMITTED]
ANNUAL REPORT
DECEMBER 31, 1999
[GRAPHIC OMITTED]
SEEKING LONGER-TERM
GROWTH OF CAPITAL
VALUE AND AN INCREASE
IN FUTURE INCOME
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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.
[PHOTO OMITTED]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
...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.
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
To the Shareholders ....................................................... 1
Interview With Your Portfolio Manager ..................................... 2
Performance Overview ...................................................... 4
Portfolio Overview ........................................................ 6
Portfolio of Investments .................................................. 8
Statement of Assets and Liabilities ....................................... 10
Statement of Operations ................................................... 11
Statements of Changes in Net Assets ....................................... 12
Notes to Financial Statements ............................................. 13
Financial Highlights ...................................................... 16
Report of Independent Auditors ............................................ 18
Federal Tax Status of 1999 Gain Distribution
for Taxable Accounts AND For More Information ............................ 19
Board of Directors AND Executive Officers ................................ 20
Glossary of Financial Terms ............................................... 21
<PAGE>
TO THE SHAREHOLDERS
The 20th century ended on an extraordinarily optimistic note for the US stock
markets, with all major indices -- the Dow Jones Industrial Average, the S&P
500, and the NASDAQ -- at record highs. The broad-based S&P 500 had achieved a
fifth consecutive year of greater than 20% returns -- a record-breaking run.
Supporting these impressive markets was the US economic expansion -- now the the
longest in US history. Throughout 1999, unemployment stood at a near 30-year
low, inflation remained tame, and consumer confidence soared. In addition, the
global economy -- which just over one year ago threatened US growth -- rebounded
strongly. In this positive environment, Seligman Growth Fund delivered a total
return, based on the net asset value of Class A shares, of 30.27%, outperforming
the 28.30% total return of the Lipper Growth Funds Average, but lagging the
33.16% total return of the Russell 1000 Growth Index.
While 1999 was a positive year for equity investors, it was also a year of sharp
contrasts. Despite stellar performances by the popular indices, the market was
once again extraordinarily narrow. Just over half of the stocks in the S&P 500
had positive returns. Large-cap growth and technology companies continued to
dominate, while value stocks lagged considerably. Further, in response to
concerns regarding inflation, the Federal Reserve Board increased the federal
funds rate three times, completely reversing its 1998 rate cuts.
There was also a dramatic divergence between stocks and bonds. The bond market
had one of its worst years ever, and 30-year US government bond yields increased
from 5.08% at the beginning of the year to 6.48% by year-end. Unfazed, the stock
market hit several new highs. This sharp divergence cannot continue; our view is
that interest rates will stabilize and equity price increases will be more
modest.
As we look into the 21st century, we believe there is much to be optimistic
about, with several long-term factors that should 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. As
this group matures, they are likely to spend less, both of necessity for
retirement savings and because, while they are in their peak earning years,
consumption needs often decrease. 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. We believe that this will continue, allowing investors to
benefit from attractive overseas investment opportunities.
Fourth, new technology has allowed the economy to become vastly more productive,
and the sector 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 J. & W. Seligman & Co.
Incorporated is highly enthusiastic about technology, 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.
We thank you for your continued confidence in the Seligman Growth Fund and look
forward to serving you in a new century. A discussion with your Fund's Portfolio
Manager, as well as a performance overview and financial statements, including a
portfolio of investments, follows this letter.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
February 11, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
MARION S. SCHULTHEIS
Q: HOW DID SELIGMAN GROWTH FUND PERFORM IN THE LAST 12 MONTHS?
A: The Fund posted a total return of 30.27% based on the net asset value of
Class A shares. During the same period, the Fund's peers, as measured by the
Lipper Growth Funds Average, posted a total return of 28.30%, and the Russell
1000 Growth Index, which measures the performance of large-capitalization
growth stocks, posted a total return of 33.16%.
Q: WHAT ECONOMIC AND MARKET FACTORS INFLUENCED THE FUND'S RESULTS IN 1999?
A: During 1999, growth stocks of all sizes generally delivered strong returns,
while value stocks of all sizes generally lagged. A continued strong US
economy and improving world economies, combined with low inflation, provided
a positive environment for growth stocks. Within the growth-stock universe,
technology, driven by increased Internet demand and an explosion in wireless
communications, was by far the best performing. The growth stocks in Seligman
Growth Fund's portfolio delivered strong performances within this supportive
environment.
Q: WHAT INDUSTRIES AFFECTED THE FUND'S PERFORMANCE LAST YEAR?
A: The technology sector was the single most positive influence on Fund
performance during the fiscal year. Despite the fact that the Fund was
underweighted in the sector during the period, the technology stocks that the
Fund did hold delivered exceptional returns.
Q: WHAT WAS YOUR INVESTMENT STRATEGY DURING THE FISCAL YEAR?
A: At the beginning of the Fund's fiscal year, we avoided Internet stocks
because of the seemingly excessive valuations for the group as a whole.
However, as growth managers, we had to reevaluate our strategy for this
industry since, while the stocks are expensive, we believe that the group has
the potential to deliver above-average growth rates. We developed a valuation
process for this unique industry where revenue growth sometimes exceeds 40%.
This process includes analyzing a company's business strategy and evaluating
price-to-revenue multiples, rather than price-to-earnings multiples.
Following this strategy shift, we purchased what we believe are several
"best-of-class" Internet companies that focus on the business-to-business
applications that allow companies to reduce expenses and increase sales. We
believe that such companies, which contribute to
[PHOTO OMITTED]
GLOBAL GROWTH TEAM: (FROM LEFT) DAVE LEVY, SHEILA GRAYSON (ADMINISTRATIVE
ASSISTANT), (SEATED) MARION S. SCHULTHEIS (PORTFOLIO MANAGER); (NOT PICTURED)
JACK CHANG, CRAIG CHODASH
A TEAM APPROACH
Seligman Growth Fund is managed by the Seligman Global Growth Team, headed by
Marion S. Schultheis. Ms. Schultheis is assisted in the management of the Fund
by a group of seasoned professionals who are responsible for identifying those
companies in specific industries that offer the greatest potential for growth,
consistent with the Fund's objective.
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
MARION S. SCHULTHEIS
increased efficiency in the rest of the economy, will continue to have
opportunities for growth for years to come.
We remained underweighted in health care because we believed the sector had
become overvalued following a very strong 1998, and there were uncertainties
over pricing pressure due to potential changes in Medicare drug benefits.
This underweighting benefited the Fund's overall performance since this
sector was an underperformer for the year.
During the fiscal year, we focused on large-capitalization companies, with
particular emphasis on those with longer-term track records. In general, we
are attracted to stocks with strong price-to-earnings growth rates looking
two years ahead.
Q: DO YOU PLAN TO MAKE ANY STRATEGY CHANGES DURING THE YEAR 2000?
A: Going forward, we expect to place greater emphasis on technology. In
particular, we will look for companies that use information technology to
increase sales and data warehousing, and for companies that are developing
innovative or improved products, especially in telecommunications. Within
technology, we anticipate remaining underweighted in hardware stocks and plan
to focus on software stocks, particularly those of companies involved in
business-to-business e-commerce. We will also look for opportunities to gain
more exposure to wireless application protocol, which allows Internet access
without a personal computer.
We are concerned about American consumer strength. Following a very strong
1999, with the best holiday season in a decade, we believe that spending must
slow along with the rest of the economy. For this reason, we expect to
further reduce the Fund's exposure to consumer cyclicals. At the same time,
we will look for opportunities to increase the Fund's exposure to health
care. We think health care stocks, in general, should rebound due to improved
valuations and new products. generic drug companies, in particular, should
benefit from patent expirations and a possible Medicare drug benefit.
Q: WHAT IS YOUR OUTLOOK?
A: We feel that Seligman Growth Fund is well positioned as we head into the new
year. We believe that technology will continue to be a key driver of economic
and market strength, and will thus continue to be a high-growth area and a
strong market performer. In such a scenario, the Fund's increasing exposure
to the industry would be a benefit. We believe that our analysis of the
business plans of these companies will allow us to choose the best companies
within this industry.
In addition, it appears that a favorable climate for continued global growth
lies ahead, based on several factors, including the advent of the euro,
reduced barriers to trade, and Japan's economic progress and financial
reforms. Such an environment should benefit companies with export-driven
revenues. We will seek to gain additional exposure to stocks that are
positioned to benefit from the recoveries abroad, particularly in Japan.
3
<PAGE>
PERFORMANCE OVERVIEW
This chart compares a $10,000 hypothetical investment made in Seligman Growth
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 Funds Average and the Russell 1000 Growth Index for
the same period. The performances of Seligman Growth 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 Funds Average and the
Russell 1000 Growth Index exclude the effect of fees and/or sales charges.
[Figures specified below represents chart in printed form]
Date With Load Without Load Russell 100 GR
Lipper
12/31/89 9533 10000 10000 10000
9028 9471 9630 9793
9981 10471 10606 10503
8151 8551 8989 8853
12/31/90 9041 9484 9974 9612
10683 11206 11763 11343
10603 11123 11650 11224
11457 12019 12464 12080
12/31/91 12517 13131 14080 13188
12265 12866 13384 13027
11655 12226 13238 12731
12371 12978 13821 13116
12/31/92 13931 14614 14784 14290
13862 14541 14660 14668
13424 14082 14433 14813
14625 15342 14646 15537
12/31/93 14794 15519 15213 15907
14260 14959 14542 15418
13500 14162 14394 15035
14344 15047 15501 15859
12/31/94 14226 14923 15617 15648
14884 15613 17104 16831
15981 16764 18785 18486
17579 18440 20491 20100
12/31/95 18276 19172 21423 20592
19537 20494 22573 21720
20482 21486 24009 22713
21287 22331 24873 23410
12/31/96 22140 23225 26376 24696
21837 22907 26518 24484
24940 26163 31533 28372
26038 27314 33904 31310
12/31/97 26148 27430 34418 31004
30406 31897 39633 35040
31481 33025 41432 35749
28371 29866 37670 31050
12/31/98 35363 37097 47743 38145
36062 38396 50780 39813
38842 40746 52735 42606
37460 39296 50805 40471
12/31/99 46068 48326 63577 48941
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 12.92% n/a 24.09% 25.25% 16.50% n/a n/a
Without Sales Charge 18.60 n/a 30.27 26.49 17.06 n/a n/a
CLASS B**
With CDSC+ 13.32 n/a 24.41 n/a n/a 24.33% n/a
Without CDSC 18.32 n/a 29.41 n/a n/a 24.78 n/a
CLASS C**
With Sales Charge and CDSC 16.06 26.35% n/a n/a n/a n/a n/a
Without Sales Charge and CDSC 18.16 28.66 n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC 17.32 n/a 28.22 n/a n/a n/a n/a
Without CDSC 18.32 n/a 29.22 25.42 n/a n/a 19.39%
LIPPER GROWTH FUNDS AVERAGE*** 14.87 21.73o 28.30 25.62 17.21 23.71++ 19.81+++
RUSSELL 1000 GROWTH INDEX*** 20.56 29.00o 33.16 32.42 20.32 31.69++ 25.38+++
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
DECEMBER31, 1999 JUNE 30, 1999 DECEMBER 31, 1998
---------------- ------------- -----------------
<S> <C> <C> <C> <C> <C>
CLASS A $8.62 $8.15 $7.42 PAID $0.96o
CLASS B 7.65 7.35 6.72 UNDISTRIBUTED
CLASS C 7.64 7.35 n/a REALIZED 0.290oo
CLASS D 7.65 7.35 6.73 UNREALIZED 2.859ooo
</TABLE>
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 Funds Average excludes the effect of sales charges that
may be incurred in connection with purchases or sales. The monthly
performance is used in the Performance Overview. The Russell 1000 Growth
Index is an unmanaged benchmark that assumes investment of dividends and
excludes the effect of fees and sales charges. Investors cannot invest
directly in an average or an index.
+ 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 Represents net gain realized in November and December 1999, payable in 2000.
000 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:
Capital Goods ..................... 4 $ 79,427,060 $ 138,946,366 10.4 11.4
Communications Services ........... 1 25,199,590 38,468,869 2.9 8.3
Consumer Cyclicals ................ 5 41,953,514 111,706,634 8.4 12.0
Consumer Staples .................. 10 165,122,909 191,277,700 14.3 17.2
Electronic Technology ............. 12 132,805,562 202,878,159 15.2 11.0
Energy ............................ 2 21,356,339 23,418,382 1.8 0.4
Financial Services ................ 3 29,820,850 54,638,178 4.1 6.0
Health Care ....................... 6 80,577,017 95,116,444 7.1 16.7
Technology Services ............... 10 177,015,969 316,546,303 23.7 11.5
Transportation .................... 1 16,239,042 18,814,219 1.4 --
Utilities ......................... 2 46,082,718 72,886,425 5.5 1.0
------ -------------- -------------- ----- -----
56 815,600,570 1,264,697,679 94.8 95.5
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES...... 1 68,985,235 68,985,235 5.2 4.5
------ -------------- -------------- ----- -----
NET ASSETS .......................... 57 $884,585,805 $1,333,682,914 100.0 100.0
====== ============== ============== ===== =====
</TABLE>
LARGEST INDUSTRIES
DECEMBER 31, 1999
[Figures below represents chart in printed form]
Technology 23.7
Electronic Technology 15.2
Consumer staples 14.3
Capital Goods 10.4
Consumer Cyclicals 8.4
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
-----------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/99
- --------- -----------------------------
Carnival (Class A) ...................... 393,500 393,500
Coca-Cola ............................... 444,900 783,900
Computer Associates
International ......................... 421,600 421,600
Corning ................................. 308,900 308,900
Lilly (Eli) ............................. 308,800 308,800
Lucent Technologies ..................... 394,800 394,800
Micron Technology ....................... 240,000 240,000
Microsoft ............................... 226,500 758,100
Newell Rubbermaid ....................... 573,700 573,700
Xilinx .................................. 192,000 298,300(1)
SHARES
-----------------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/99
- ---------- -----------------------------
AT&T ........................................ 539,850 --
Bristol-Myers Squibb ........................ 249,600 --
Cendant ..................................... 936,100 --
Honeywell International(2) .................. 417,750 207,050
Merck ....................................... 297,800 188,200
Nokia (ADRs) ................................ 207,200 159,500
Philip Morris ............................... 840,700 --
Time Warner ................................. 262,900 180,700
Tyco International .......................... 82,000 881,000(3)
Warner-Lambert .............................. 330,500 --
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 106,300 shares received as a result of a 2-for-1 stock split. (2)
Formerly known as AlliedSignal. (3) Includes 334,700 shares received as a result
of a 2-for-1 stock split.
LARGEST PORTFOLIO HOLDINGS
DECEMBER 31, 1999
SECURITY VALUE
- -------- --------------
Microsoft ..................... $88,484,484
General Electric .............. 52,924,500
Wal-Mart Stores ............... 52,866,800
AES ........................... 51,861,550
Coca-Cola ..................... 45,662,175
SECURITY VALUE
- -------- --------------
Cisco Systems ................. $41,959,331
Corning ....................... 39,828,794
MCI WorldCom .................. 38,468,869
American International Group .. 36,843,594
Motorola ...................... 36,694,700
7
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
---------- ---------------
COMMON STOCKS 94.8%
CAPITAL GOODS 10.4%
CORNING
Producer of diversified compo-
nents for the telecommunica-
tions and television industries 308,900 $ 39,828,794
GENERAL ELECTRIC
Supplier of industrial equipment
and consumer products 342,000 52,924,500
HONEYWELL INTERNATIONAL
Manufacturer of automation
and control systems 207,050 11,944,197
TYCO INTERNATIONAL
Worldwide provider of
fire protection devices,
electronic security services,
and underwater telecom-
munications systems 881,000 34,248,875
------------
138,946,366
------------
COMMUNICATIONS
SERVICES 2.9%
MCI WORLDCOM
Provider of
telecommunications services 725,400 38,468,869
------------
CONSUMER CYCLICALS 8.4%
DAYTON HUDSON
General merchandise retailer
specializing in large stores 212,000 15,568,750
HARLEY-DAVIDSON
Manufacturer of motorcycles 248,200 15,900,312
HOME DEPOT
Retailer of building materials and
home improvement products 246,750 16,917,797
INTERPUBLIC GROUP OF COMPANIES
Worldwide advertising agency 181,200 10,452,975
WAL-MART STORES
Discount retailer 764,800 52,866,800
------------
111,706,634
------------
CONSUMER STAPLES 14.3%
CBS
Radio and television
broadcasting 480,500 30,721,969
CHARTER COMMUNICATIONS
(CLASS A)*
Cable television operator 232,800 5,092,500
COCA-COLA
Manufacturer and marketer of
soft drinks and consumer
products 783,900 45,662,175
COLGATE-PALMOLIVE
Manufacturer of household
and personal care products 214,400 13,936,000
DISNEY (WALT)
Theme park and hotel
operator; film production 426,400 12,472,200
MCDONALDS
Restaurant operator 368,300 $ 14,847,094
MCKESSON HBOC
Provider of pharmaceutical
supply management and
information technology 358,900 8,097,681
NEWELL RUBBERMAID
Manufacturer and marketer of
diversified consumer products 573,700 16,637,300
PROCTER & GAMBLE
Manufacturer and distributor
of household and personal
care products 280,400 30,721,325
TIME WARNER
Diversified media and
entertainment company 180,700 13,089,456
------------
191,277,700
------------
ELECTRONIC TECHNOLOGY 15.2%
AGILENT TECHNOLOGIES*
Designer of test and
monitoring instruments,
and semiconductors for
diversified industries 139,800 10,808,287
BROADCOM (CLASS A)*
Provider of silicon products that
enable broadband digital data
transmission of voice, data,
and video content 38,100 10,376,297
CISCO SYSTEMS*
Manufacturer of computer
network products 391,800 41,959,331
DELL COMPUTER*
International provider of
computer systems and services 357,700 18,231,522
INTEL
Manufacturer of micro-
processors and memory circuits 307,200 25,276,800
INTERNATIONAL BUSINESS MACHINES
Manufacturer of micro-
electronics and
personal computers 96,800 10,454,400
LUCENT TECHNOLOGIES
Manufacturer of telecom-
munications equipment 394,800 29,535,975
MICRON TECHNOLOGY*
Provider of semiconductor
memory and enhancement
products 240,000 18,660,000
QUALCOMM*
Developer, manufacturer and
marketer of communications
systems and products 52,000 9,156,875
SUN MICROSYSTEMS*
Provider of microprocessors
and software products 117,600 9,102,975
- ---------------
See footnotes on page 9
8
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
---------- ---------------
ELECTRONIC TECHNOLOGY (CONTINUED)
VERITAS SOFTWARE*
Developer and marketer of
back-up storage software for
computer systems 40,200 $ 5,752,369
XILINX*
Supplier of field-program-
mable gate arrays 298,300 13,563,328
--------------
202,878,159
--------------
ENERGY 1.8%
SCHLUMBERGER
Worldwide provider of
energy services 373,950 21,034,687
TRANSOCEAN SEDCO FOREX
Provider of contract
drilling services 72,396 2,383,695
--------------
23,418,382
--------------
FINANCIAL SERVICES 4.1%
AMERICAN INTERNATIONAL GROUP
Worldwide provider of
insurance 340,750 36,843,594
CITIGROUP
Provider of diversified
financial services 127,800 7,100,887
WELLS FARGO
Worldwide provider of
financial services 264,450 10,693,697
--------------
54,638,178
--------------
HEALTH CARE 7.1%
AMGEN
Biotechnology company 191,400 11,489,981
JOHNSON & JOHNSON
Developer and manufacturer
of health care products 118,900 11,072,563
LILLY (ELI)
Developer and manufacturer
of pharmaceuticals 308,800 20,535,200
MEDTRONIC
Manufacturer of pacemakers
and related cardiovascular
products 538,200 19,610,662
MERCK
Developer and manufacturer
of pharmaceuticals 188,200 12,621,163
PFIZER
Manufacturer of health
care consumer products
and specialty chemicals 610,000 19,786,875
--------------
95,116,444
--------------
TECHNOLOGY SERVICES 23.7%
AMERICA ONLINE*
Provider of electronic mail,
entertainment, reference,
and interactive publications,
as well as Internet access 455,400 34,354,238
BMC SOFTWARE*
Developer of mainframe
utility software 221,500 $ 17,699,234
COMPUTER ASSOCIATES INTERNATIONAL
Developer of software utilities
and databases 421,600 29,485,650
COMPUWARE*
Provider of mainframe soft-
ware and consulting services 730,500 7,188,297
MICROSOFT*
Provider of personal computer
operating systems and
application software products 758,100 88,484,484
MOTOROLA
Producer of wireless
communications and
equipment 249,200 36,694,700
NOKIA (ADRS) (Finland)
Developer and manu-
facturer of cellular phones
and base stations 159,500 30,305,000
ORACLE*
Provider of computer
software 244,900 27,436,453
SIEBEL SYSTEMS*
Provider of customer
service information systems 75,300 6,334,613
YAHOO!*
Provider of Internet navigation 42,900 18,563,634
--------------
316,546,303
--------------
TRANSPORTATION 1.4%
CARNIVAL (CLASS A)
Cruise line operator 393,500 18,814,219
--------------
UTILITIES 5.5%
AES*
Supplier of electricity 693,800 51,861,550
ENRON
Explorer and producer
of oil and gas 473,800 21,024,875
--------------
72,886,425
--------------
TOTAL COMMON STOCKS
(Cost $815,600,570) 1,264,697,679
SHORT-TERM HOLDINGS 1.8%
(Cost $23,400,000) 23,400,000
--------------
TOTAL INVESTMENTS 96.6%
(Cost $839,000,570) 1,288,097,679
OTHER ASSETS
LESS LIABILITIES 3.4% 45,585,235
--------------
NET ASSETS 100.0% $1,333,682,914
==============
- -----------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Common stocks (cost $815,600,570) ........................... $1,264,697,679
Short-term holdings (cost $23,400,000) ...................... 23,400,000 $1,288,097,679
---------------
Cash ........................................................................... 354,943
Receivable for securities sold ................................................. 46,355,464
Receivable for Capital Stock sold .............................................. 4,854,938
Receivable for interest and dividends .......................................... 456,107
Investment in, and expenses prepaid to, shareholder service agent .............. 220,026
Other .......................................................................... 18,372
----------------
TOTAL ASSETS ................................................................... 1,340,357,529
----------------
LIABILITIES:
Payable for securities purchased ............................................... 3,914,279
Payable for Capital Stock repurchased .......................................... 756,643
Accrued expenses and other ..................................................... 2,003,693
----------------
TOTAL LIABILITIES .............................................................. 6,674,615
----------------
NET ASSETS ..................................................................... $ 1,333,682,914
================
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000 shares authorized; 157,102,117
shares outstanding):
Class A ...................................................................... $ 135,577,861
Class B ...................................................................... 11,274,727
Class C ...................................................................... 1,736,111
Class D ...................................................................... 8,513,418
Additional paid-in capital ..................................................... 682,227,159
Accumulated net investment loss ................................................ (240,887)
Undistributed net realized gain ................................................ 45,497,416
Net unrealized appreciation of investments ..................................... 449,097,109
----------------
NET ASSETS ..................................................................... $1,333,682,914
================
NET ASSET VALUE PER SHARE:
CLASS A ($1,169,098,382 / 135,577,861 shares) .................................. $8.62
=======
CLASS B ($86,227,526 / 11,274,727 shares) ...................................... $7.65
=======
CLASS C ($13,271,843 / 1,736,111 shares) ....................................... $7.64
=======
CLASS D ($65,085,163 / 8,513,418 shares) ....................................... $7.65
=======
</TABLE>
- -------------------
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INVESTMENT INCOME:
<S> <C> <C>
Dividends ................................................. $ 7,794,026
Interest .................................................. 2,983,549
------------
TOTAL INVESTMENT INCOME .................................................. $10,777,575
EXPENSES:
Management fee ............................................ 7,706,602
Distribution and service fees ............................. 3,474,483
Shareholder account services .............................. 1,784,365
Custody and related services .............................. 200,832
Shareholder reports and communications .................... 178,135
Registration .............................................. 137,037
Auditing and legal fees ................................... 68,257
Directors' fees and expenses .............................. 50,673
Miscellaneous ............................................. 36,221
------------
TOTAL EXPENSES ........................................................... 13,636,605
------------
NET INVESTMENT LOSS ...................................................... (2,859,030)
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments .......................... 223,944,598
Net change in unrealized appreciation of investments ...... 88,594,371
------------
NET GAIN ON INVESTMENTS .................................................. 312,538,969
------------
INCREASE IN NET ASSETS FROM OPERATIONS ................................... $309,679,939
============
</TABLE>
- ----------------
See Notes to Financial Statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1999 1998
-------------------------------------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss) .................................. $ (2,859,030) $ 693,864
Net realized gain on investments .............................. 223,944,598 137,133,994
Net realized loss from foreign currency transactions .......... -- (3,183,176)
Net change in unrealized appreciation of investments .......... 88,594,371 126,289,172
Net change in unrealized depreciation of assets and
liabilities denominated in foreign currencies ............... -- 3,073,583
-------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS ........................ 309,679,939 264,007,437
-------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ..................................................... -- (1,259,431)
Net realized gain on investments:
Class A ..................................................... (118,219,808) (85,132,303)
Class B ..................................................... (8,932,891) (2,101,759)
Class C ..................................................... (934,289) --
Class D ..................................................... (7,151,077) (3,291,473)
-------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ..................... (135,238,065) (91,784,966)
-------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............................. 66,188,379 54,962,873
Investment of dividends ....................................... -- 937,188
Exchanged from associated Funds ............................... 806,017,257 599,564,894
Value of shares issued in payment of gain distributions ....... 110,640,428 73,163,459
-------------- -------------
Total ......................................................... 982,846,064 728,628,414
-------------- -------------
Cost of shares repurchased .................................... (88,487,332) (91,215,429)
-------------- -------------
Exchanged into associated Funds ............................... (732,953,337) (564,538,227)
-------------- -------------
Total ......................................................... (821,440,669) (655,753,656)
-------------- -------------
INCREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS .................................. 161,405,395 72,874,758
-------------- -------------
INCREASE IN NET ASSETS ........................................ 335,847,269 245,097,229
NET ASSETS:
Beginning of year ............................................. 997,835,645 752,738,416
-------------- -------------
END OF YEAR (including accumulated net investment
loss of $240,887 and $231,942, respectively) ................ $1,333,682,914 $ 997,835,645
============== =============
</TABLE>
- ------------------
See Notes to Financial Statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Growth 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 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.
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 year ended December 31, 1999, amounted to $966,712,406 and $967,404,390,
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 $460,159,057 and $12,059,609, respectively.
4. CAPITAL SHARE TRANSACTIONS -- The Fund has authorized 500,000,000 shares of
$1 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
------------ ------------- ------------- -------------
Net proceeds from
sales of shares 4,110,733 $ 32,325,449 6,247,606 $ 43,436,023
Investment of
dividends -- -- 135,042 937,188
Exchanged from
associated Funds 65,446,614 512,373,199 62,988,477 438,189,220
Shares issued in
payment of gain
distributions 12,019,564 95,075,559 9,931,558 68,030,814
----------- ------------- ----------- -------------
Total 81,576,911 639,774,207 79,302,683 550,593,245
----------- ------------- ----------- -------------
Cost of shares
repurchased (8,682,126) (68,659,496) (12,291,159) (85,236,803)
Exchanged into
associated Funds (63,232,475) (495,275,862) (61,662,662) (429,794,412)
----------- ------------- ----------- -------------
Total (71,914,601) (563,935,358) (73,953,821) (515,031,215)
----------- ------------- ----------- -------------
Increase 9,662,310 $ 75,838,849 5,348,862 $ 35,562,030
=========== ============= =========== =============
CLASS B
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998
--------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------- -------------
Net proceeds from
sales of shares 2,245,719 $ 15,855,044 1,189,920 $ 7,641,423
Exchanged from
associated Funds 10,071,244 71,470,757 2,657,809 16,973,170
Shares issued in
payment of gain
distributions 1,137,929 7,988,123 315,870 1,958,406
----------- ------------ ---------- ------------
Total 13,454,892 95,313,924 4,163,599 26,572,999
----------- ------------ ---------- ------------
Cost of shares
repurchased (1,309,113) (9,355,564) (220,048) (1,386,808)
Exchanged into
associated Funds (4,855,957) (34,220,623) (712,218) (4,510,173)
----------- ------------ ---------- ------------
Total (6,165,070) (43,576,187) (932,266) (5,896,981)
----------- ------------ ---------- ------------
Increase 7,289,822 $ 51,737,737 3,231,333 $ 20,676,018
=========== ============ ========== ============
CLASS C
------------------------------
MAY 27, 1999*
TO DECEMBER 31, 1999
------------------------------
SHARES AMOUNT
----------- -------------
Net proceeds from
sales of shares 1,590,880 $ 11,530,253
Exchanged from
associated Funds 171,358 1,269,585
Shares issued in
payment of gain
distributions 128,844 904,484
---------- ------------
Total 1,891,082 13,704,322
---------- ------------
Cost of shares
repurchased (6,954) (50,819)
Exchanged into
associated Funds (148,017) (1,065,006)
---------- ------------
Total (154,971)
---------- ------------
Increase 1,736,111 $ 12,588,497
========== ============
* Commencement of offering of shares.
CLASS D
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998
--------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------- ------------- -------------
Net proceeds from
sales of shares 926,888 $ 6,477,633 609,777 $ 3,885,427
Exchanged from
associated Funds 31,344,202 220,903,716 22,625,884 144,402,504
Shares issued in
payment of gain
distributions 950,466 6,672,262 511,974 3,174,239
----------- ------------- ----------- -------------
Total 33,221,556 234,053,611 23,747,635 151,462,170
----------- ------------- ----------- -------------
Cost of shares
repurchased (1,470,418) (10,421,453) (729,441) (4,591,818)
Exchanged into
associated Funds (28,646,374) (202,391,846) (20,427,040) (130,233,642)
----------- ------------- ----------- -------------
Total (30,116,792) (212,813,299) (21,156,481) (134,825,460)
----------- ------------- ----------- -------------
Increase 3,104,764 $ 21,240,312 2,591,154 $ 16,636,710
=========== ============= =========== =============
5. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and
provides for 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 0.70% per annum of the first $1 billion of the Fund's average daily net
assets, 0.65% per annum of the next $1 billion of the Fund's average daily net
assets and 0.60% 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 0.70% 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
$51,801 from sales of
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Class A shares. Commissions of $390,688 and $104,948 were paid to dealers from
the 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 $2,377,691 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 $561,590, $25,104, and $510,098, 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 $13,858.
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 Bshares sold. The aggregate of such payments
retained by the Distributor, for the year ended December 31, 1999, amounted to
$22,790.
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 $26,664 from the sales of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $783,838, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $1,753,983 for shareholder
account services. The Fund's investment in Seligman Data Corp. is recorded at a
cost of $43,170.
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 their
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 $240,887
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.
15
<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 ................. $7.42 $6.08 $5.85 $5.22 $4.54
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ....................... (0.02) 0.01 -- (0.01) 0.01
Net realized and unrealized gain on investments .... 2.18 2.07 1.06 1.13 1.27
Net realized and unrealized gain (loss) from
foreign currency transactions .................... -- -- (0.03) (0.01) 0.01
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ................... 2.16 2.08 1.03 1.11 1.29
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ............... -- (0.01) -- -- (0.01)
Distributions from net realized capital gain ....... (0.96) (0.73) (0.80) (0.48) (0.60)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS ................................ (0.96) (0.74) (0.80) (0.48) (0.61)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR ....................... $8.62 $7.42 $6.08 $5.85 $5.22
======= ======= ======= ======= =======
TOTAL RETURN: ...................................... 30.27% 35.24% 18.11% 21.14% 28.47%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) ............. $1,169,098 $934,654 $732,754 $675,086 $597,510
Ratio of expenses to average net assets ............ 1.16% 1.14% 1.16% 1.20% 0.94%
Ratio of net income (loss) to average net assets ... (0.19)% 0.11% (0.02)% (0.12)% 0.17%
Portfolio turnover rate ............................ 92.24% 77.85% 54.15% 26.05% 102.30%
</TABLE>
- ----------------
See footnotes on page 17.
16
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------ --------
4/22/96* 5/27/99*
YEAR ENDED DECEMBER 31, 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 ................ $6.72 $5.60 $5.49 $5.35 $6.75
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ................................. (0.07) (0.04) (0.05) (0.03) (0.03)
Net realized and unrealized gain on investments ..... 1.96 1.89 0.99 0.65 1.88
Net realized and unrealized loss from
foreign currency transactions ..................... -- -- (0.03) -- --
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 1.89 1.85 0.91 0.62 1.85
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ -- -- -- -- --
Distributions from net realized capital gain ........ (0.96) (0.73) (0.80) (0.48) (0.96)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.96) (0.73) (0.80) (0.48) (0.96)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ...................... $7.65 6.72 $5.60 $5.49 $7.64
====== ====== ====== ====== ======
TOTAL RETURN: ....................................... 29.41% 34.13% 17.10% 11.45% 28.66%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ............ $86,228 $26,791 $4,219 $880 $13,272
Ratio of expenses to average net assets ............. 1.92% 1.90% 1.93% 1.99%+ 1.80%+
Ratio of net income (loss) to average net assets .... (0.95)% (0.65)% (0.79)% (0.83)%+ (1.02)%+
Portfolio turnover rate ............................. 92.24% 77.85% 54.15% 26.05%++ 92.24%+++
CLASS D
-------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------
1999 1998 1997 1996 1995
----- ------- ------- ------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR .................. $6.73 $5.60 $5.49 $4.96 $4.38
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ................................. (0.07) (0.04) (0.05) (0.05) (0.04)
Net realized and unrealized gain on investments ..... 1.95 1.90 0.99 1.07 1.21
Net realized and unrealized gain (loss) from
foreign currency transactions ..................... -- -- (0.03) (0.01) 0.01
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .................... 1.88 1.86 0.91 1.01 1.18
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ................ -- -- -- -- --
Distributions from net realized capital gain ........ (0.96) (0.73) (0.80) (0.48) (0.60)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ................................. (0.96) (0.73) (0.80) (0.48) (0.60)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR ........................ $7.65 $6.73 $5.60 $5.49 $4.96
====== ====== ====== ====== ======
TOTAL RETURN: ....................................... 29.22% 34.33% 17.10% 20.21% 27.01%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) .............. $65,085 $36,391 $15,765 $11,493 $6,412
Ratio of expenses to average net assets ............. 1.92% 1.90% 1.93% 1.97% 1.91%
Ratio of net income (loss) to average net assets .... (0.95)% (0.65)% (0.79)% (0.88)% (0.83)%
Portfolio turnover rate ............................. 92.24% 77.85% 54.15% 26.05% 102.30%
</TABLE>
- -------------
* Commencement of offering of shares.
+ Annualized.
++ For the year ended December 31, 1996.
+++ For the year ended December 31, 1999.
See Notes to Financial Statements.
17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN GROWTH FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Growth 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 and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman Growth Fund, Inc. as of December 31, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for all
the respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, New York
February 11, 2000
18
<PAGE>
FEDERAL TAX STATUS OF 1999
GAIN DISTRIBUTION FOR TAXABLE ACCOUNTS
A long-term capital gain distribution of $0.96 per share from net gain realized
through October 31, 1999, was paid on November 23, 1999, to Class A, B, C and D
shareholders.
The long-term capital gain distribution is designated a "capital gain dividend"
for federal income tax purposes and is taxable to shareholders in 1999 as a
long-term gain from the sale of capital assets, no matter how long shares have
been owned, or whether the distribution was received in shares or in cash.
However, if shares on which a capital gain distribution was received are
subsequently sold, and such shares have been held for six months or less, any
loss on the sale would be treated as long-term to the extent that it offsets the
long-term gain distribution.
If the distribution was received in shares, the per share cost basis for federal
income tax purposes is $7.91 for Class A shares, $7.02 for Class B, Class C and
Class D shares.
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.
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
19
<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, ICIMutual 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
EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
MARION S. SCHULTHEIS
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
20
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in 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 GROWTH FUND, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES CHARGES,
MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING OR SENDING MONEY.
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
[GRAPHIC OMITTED] Printed on Recycled Paper
