- - -------------------------------------------------------------------------------
Seligman
Communications
and
Information
Fund, Inc.
- - -------------------------------------------------------------------------------
A Capital Gain Fund
- - -------------------------------------------------------------------------------
12th Annual Report
1994
- - -------------------------------------------------------------------------------
[Logo]
SELIGMAN FINANCIAL SERVICES, INC.
AN AFFILIATE OF
[Logo]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue,
New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Communications and Information Fund, Inc., which contains information
about the sales charges, management fee, and other costs. Please read the
prospectus carefully before investing or sending money.
EQCI2 12/94
<PAGE>
- - -------------------------------------------------------------------------------
Seligman Communications and Information Fund
- - -------------------------------------------------------------------------------
A mutual fund that invests for capital gain primarily in the stocks of
companies engaged in meeting the growing demand for products and services in the
developing communications, information, and related industries. Income is not an
objective.
Highlights of 1994
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
---------------------- --------------------
Class A Class D Class A Class D
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Assets (in thousands) .................... $307,542 $96,100 $92,987 $7,833
-------- ------- ------- ------
Net Asset Value per Share ................. $16.64 $16.31 $13.43 $13.32
With December 1994 Gain Distribution
Taken in Shares .......................... 18.17 17.84 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares ............ 35.30% 33.94% -- --
----- ----- ------- -------
Distribution of Realized Gain per Share ..... $1.46 $1.46 $3.10 $3.10
----- ----- ----- -----
Total Expenses per Dollar of
Average Net Assets. $0.0165 $0.0250 $0.0163 $0.0256+
------- ------- ------- -------
</TABLE>
+ Annualized.
1
<PAGE>
- - -------------------------------------------------------------------------------
To the Shareholders
- - -------------------------------------------------------------------------------
We are pleased to report Seligman Communications and Information Fund's
long-term investment results, portfolio holdings, and audited financial
statements at December 31, 1994.
It is our pleasure to report that at December 31, your Fund was ranked the
number one Fund of all equity mutual funds measured by Lipper Analytical
Services for both the one- and five-year periods ended December 31, 1994, of the
2,018 and 878 funds measured, respectively. Your Fund is number two for the
10-year period, of the 445 equity mutual funds measured. Lipper's rankings are
based on total return and do not include sales charges.
For your Fund's Class A shares, net asset value per share was $16.64 at
December 31, compared to $16.79 at September 30, and $13.43 a year ago. For your
Fund's Class D shares, net asset value per share was $16.31 at December 31,
compared to $16.53 at September 30, and $13.32 a year ago. For both Class A and
D shares, net realized gain per share from investment transactions in 1994 was
$1.46.
For your Fund's Class A shares, total return was an outstanding 8.22% for
the three months and 35.30% for the 12 months ended December 31. For your Fund's
Class D shares, total return was 7.93% and 33.94%, respectively, for the same
periods. This compares to the Standard & Poor's 500 Composite Stock Price
Index's total return of -0.02% for the three months and 1.32% for the 12 months
ended December 31. (Total return reflects change in net asset value and assumes
any distributions paid within the period are reinvested in additional shares.
Class A returns do not, however, reflect the effect of the maximum initial sales
charge of 4.75%, and Class D returns do not reflect the effect of the 1%
contingent deferred sales load.)
Looking back on 1994, the one generalization that can be made with
confidence is that it was a turbulent and trying year for equity and bond
investors alike. The Federal Reserve Board exhibited an aggressive stance
against inflation, putting through six short-term interest rate increases by the
end of the year. This caused an upheaval in the bond market, with yields
increasing and bond prices spiraling lower--an event in the financial markets
unmatched in magnitude since 1973-74. The equity market remained hostage to the
bond market and demonstrated lackluster performance for the year.
The U.S. economy continued to grow at a modest yet controlled pace,
accompanied by corporate news of solid growth and strong earnings. This economic
news, although positive, caused the underlying question to remain: Will the
economy overheat, opening the door to increased inflation? We don't believe so.
We believe an economic slowdown is close at hand. In March of 1995, the
current growth cycle will mark its fourth year. The consumer has both increased
debt as a percentage of income and drawn down savings--suggesting nearer-term
caution after a stronger-than-expected pattern of spending in 1994. We also
believe that inflation will remain under control in light of intense global
competition, low unit labor costs, and an aging population that should favor
saving over spending. Job creation remains robust despite gains in productivity,
and U.S. competitiveness in world markets is likely to be enhanced under
G.A.T.T.--General Agreement on Tariffs and Trade.
Please refer to page 4 for a discussion with your Portfolio Manager about
your Fund's strong performance in 1994, followed by the chart and table that
analyze longer-term performance.
For more information about Seligman Communications and Information Fund, or
your investment in its shares, please write or call the toll-free telephone
numbers listed on page 18.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Ronald T. Schroeder
Ronald T. Schroeder
President
February 3, 1995
2
<PAGE>
- - -------------------------------------------------------------------------------
Seligman Communications and Information Fund
- - -------------------------------------------------------------------------------
Federal Tax Status of
1994 Gain Distribution
For Taxable Accounts
The distribution of $1.46 per share, consisting of $0.39 from net long-term gain
and $1.07 from net short-term gain, realized on investment transactions during
1994, was paid on December 20, 1994, to both Class A and D shareholders.
The long-term gain distribution is designated a "capital gain dividend" for
federal income tax purposes and is taxable to shareholders in 1994 as a
long-term gain from the sale of capital assets, no matter how long you may have
owned your shares 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 from
date of purchase, any loss would be treated as long-term to the extent that it
offsets the long-term gain distribution. The net short-term gain is taxable as
ordinary income whether paid to you in shares or in cash.
If the distribution was received in shares, the per share cost basis for
federal income tax purposes is $15.87 for Class A and $15.56 for Class D. The
tax cost basis of shares previously held is not affected.
A year-end statement of account showing activity for 1994 has been mailed
to each shareholder. Under "Tax Information for Calendar Year," it shows the
proceeds of any redemptions paid to the shareholder during the year and reported
to the Internal Revenue Service as required by federal regulations (Form
1099-B). In addition, a separate Form 1099-DIV showing the amount of the
distribution from gain on investments paid during the year has been mailed to
each shareholder.
3
<PAGE>
- - -------------------------------------------------------------------------------
Annual Performance Overview
- - -------------------------------------------------------------------------------
The following is a biography of your Portfolio Manager, a discussion with him
regarding Seligman Communications and Information Fund, and a comparison chart
of your Fund's performance against the Standard & Poor's 500 Composite Stock
Price Index and the Lipper Science and Technology Fund Average.
Your Portfolio Manager
[photograph]
Paul H. Wick is a Managing Director and Vice President of J. & W. Seligman & Co.
Incorporated and the Portfolio Manager of Seligman Communications and
Information Fund. Mr. Wick joined Seligman in 1987 as an Associate, Investment
Research, and from April 1989 to December 1989 was Co-Portfolio Manager of
Seligman High-Yield Bond Series. He has been Portfolio Manager of Seligman
Frontier Fund since August 1991, and Seligman Communications and Information
Fund since December 1989.
Economic Factors Affecting Seligman Communications and Information Fund
"In 1994, technology stocks as a group benefited from the strong global demand
for the key technology `end markets:' personal computers; networking;
telecommunications equipment; software; and wireless communications. In turn,
the strength of these markets created a healthy climate for their suppliers:
contract manufacturers; semiconductor companies; and suppliers of capital
equipment to the electronics market. In general, every industry involved in the
technology `end markets' thrived, from the providers of parts and manufacturers
of equipment, to the suppliers of the final product."
Your Manager's Investment Strategy
"As in 1993, your Fund's emphasis this past year on investing in fast-growing
companies that demonstrate the potential for positive earnings surprises proved
quite rewarding. We believe that the secular bull market for technology
experienced thus far in the 1990s will continue through this decade. The
industry is benefiting from both the capital investment cycle that is driving
the current economic expansion, and the information-driven revolution that has
been unfolding. Technology continues to dominate the office, the factory, the
home, and the transportation and entertainment industries; as a result it will
continue to capture a greater share of corporate and consumer spending over
time.
"While in the past your Fund's holdings included those industries that benefit
from technology, such as media, broadcasting, and entertainment, in recent years
we have focused heavily on the industries that create and supply communications
and technology products, as they continue to show the greatest growth
potential."
Individual Sector Performance
"The notable outperformance of your Fund was due largely to successful
investments made in the semiconductor and semiconductor capital equipment
industries. These areas did particularly well through the first nine months of
the year before fading somewhat in the fourth quarter. Fortunately, in September
and October, we locked in profits by selling several richly valued semiconductor
capital equipment holdings, including Ultratech Stepper. We also took profits in
some of our big winners in the networking industry, such as Alantec; however,
the networking group as a whole continued to appreciate in value as the year
progressed. In addition, due to the healthy demand for technology products, the
contract manufacturing sector also performed strongly, as these companies
assemble the sub-systems necessary for finished technology products."
Looking Ahead
"We believe 1995 will be an advantageous environment for technology issues. More
specifically, the overall technology industry, and your Fund in particular,
should benefit from the increased spending associated with two key events: the
emergence of the Intel Pentium chip in the mainstream of the PC market, and the
launch of Microsoft's new operating system for PCs-- Windows95. Because these
advances in the computer market will continually demand upgraded products and
services, every industry involved in the process of manufacturing PCs should
benefit, which bodes well for your Fund's investments."
4
<PAGE>
- - -------------------------------------------------------------------------------
Ten-Year Performance Comparison Chart and Table December 31, 1994
- - -------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman
Communications and Information Fund Class A shares, with and without the maximum
initial sales charge of 4.75%, for the 10-year period ended December 31, 1994,
to a $10,000 hypothetical investment made in the Standard & Poor's 500 Composite
Stock Price Index (S&P 500) and the Lipper Science and Technology Fund Average
(Lipper Science & Technology) for the same period. The performance of Seligman
Communications and Information Fund Class D shares is not shown in this chart,
but is included in the table below. It is important to keep in mind that the S&P
500 excludes the effect of any fees or sales charges, and the Lipper Science &
Technology excludes the effects of any sales charges.
(Ten-Year Performance Comparison Chart represented in tabular format below)
Seligman Seligman
Communications Communications
& Information & Information Lipper
Fund Fund Science S&P 500
without with & Technology Stock
FYE sales charge sales charge Fund Index Index
- - --- ------------ ------------ ------------ ----------
12/31/84 ........ $ 9,522.00 $10,000.00 $10,000.00 $10,000.00
12/31/85 ........ 12,778.00 13,419.00 12,402.88 13,164.00
12/31/86 ........ 14,904.00 15,652.00 13,465.10 15,615.00
12/31/87 ........ 17,141.00 18,002.00 14,001.89 16,424.00
12/31/88 ........ 19,322.00 18,398.00 15,178.87 19,133.00
12/31/89 ........ 25,141.00 23,940.00 18,969.02 25,177.00
12/31/90 ........ 22,358.00 21,289.00 18,592.36 24,393.00
12/31/91 ........ 34,634.00 32,978.00 27,162.83 31,793.00
12/31/92 ........ 40,630.00 38,688.00 31,203.82 34,212.00
12/31/93 ........ 54,901.00 52,277.00 39,076.64 37,645.00
12/31/94 ........ 74,281.00 70,731.00 43,481.62 38,334.00
The table below shows the average annual total returns for the one-year,
five-year, and 10-year periods through December 31, 1994, for the Seligman
Communications and Information Fund Class A shares, with and without the maximum
initial sales charge of 4.75%, the S&P 500, and the Lipper Science & Technology.
Also included in the table are the average annual total returns for the one-year
and since-inception periods through December 31, 1994, for the Seligman
Communications and Information Fund Class D shares, with and without the effect
of the 1% contingent deferred sales load ("CDSL") imposed on shares redeemed
within one year of purchase, the S&P 500, and the Lipper Science & Technology.
AVERAGE ANNUAL TOTAL RETURNS
One Five Ten
Year Years Years
---- ----- -----
Seligman Communications and
Information Fund
Class A with sales charge 28.87% 23.00% 21.61%
Class A without sales charge 35.30 24.19 22.20
S&P 500 1.32 8.70 14.34
Lipper Science & Technology 11.27 18.05 15.83
Since
One Inception
Year 5/3/93
---- ---------
Seligman Communications and
Information Fund
Class D with CDSL 32.94% N/A
Class D without CDSL 33.94 42.72%
S&P 500 1.32 5.59
Lipper Science & Technology 11.27 19.16
No adjustment was made to performance for periods prior to January 1, 1993, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. The performance of 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. Performance data quoted represent changes in
prices and assume that all distributions within the periods are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
5
<PAGE>
- - -------------------------------------------------------------------------------
Seligman Communications and Information Fund
- - -------------------------------------------------------------------------------
Diversification of Assets December 31, 1994
<TABLE>
<CAPTION>
Percent Percent of
of Net Net Assets
Issues Cost Value Assets Dec. 31, 1993
------ ---- ----- ------ -------------
<S> <C> <C> <C> <C> <C>
Net Cash and Short-Term Holdings ........ 2 $ 32,917,345 $ 32,917,345 8.2 1.4
- ------------- - ---------- --- ---
Common Stocks:
Broadcasting and entertainment.............. -- -- -- -- 1.6
Computer hardware/peripherals............... 4 40,139,440 49,973,438 12.4 12.3
Computer software........................... 14 65,940,127 76,223,125 18.9 13.9
Contract manufacturing...................... 3 14,098,120 19,790,625 4.9 2.2
Information services........................ 2 11,232,824 11,752,500 2.9 3.2
Networking.................................. 4 21,820,685 26,839,375 6.6 15.8
Semiconductors.............................. 13 75,348,353 90,692,500 22.5 15.9
Semiconductor capital equipment............. 14 79,867,222 93,403,125 23.1 30.6
Telecommunications.......................... 1 2,280,830 2,050,000 0.5 3.1
-- ----------- ------------ ----- -----
55 310,727,601 370,724,688 91.8 98.6
-- ------------ ------------ ----- -----
Net Assets .............................. 57 $343,644,946 $403,642,033 100.0 100.0
== ============ ============ ===== =====
</TABLE>
6
<PAGE>
- - -------------------------------------------------------------------------------
Seligman Communications and Information Fund
- - -------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES*
During Past Three Months
Shares
---------------------
Holdings
Additions Increase 12/31/94
- - --------- -------- --------
Applied Materials............... 120,000 180,000
Compuware....................... 155,000 275,000
Dell Computer................... 125,000 125,000
Electroglas..................... 195,000 270,000
Electronics for Imaging......... 400,000 600,000
Exar............................ 240,000 400,000+
Fusion Systems.................. 200,000 200,000
Lam Research.................... 180,000 365,000
Parametric Technology........... 200,000 500,000
Western Digital................. 300,000 600,000
Holdings
Reductions Decrease 12/31/94
- - --------- -------- --------
Alantec......................... 220,000 --
Corel.......................... 390,000++ --
Gasonics International.......... 200,000 --
Informix........................ 130,000 --
Newbridge Networks.............. 125,000 --
Novellus Systems................ 100,000 --
Tencor Instruments.............. 98,000 80,000
Triconex........................ 140,000 --
Ultratech Stepper............... 80,000 --
Xyplex.......................... 200,000 --
- - --------------------
* Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
+ Includes 60,000 shares received as a result of a 3-for-2 stock split.
++ Includes 130,000 shares received as a result of a 2-for-1 stock split.
MAJOR PORTFOLIO HOLDINGS
at December 31, 1994
Security Value
- - -------- -----
EMC..................................... $18,381,250
Parametric Technology................... 17,187,500
Electronics for Imaging................. 16,425,000
Lam Research............................ 13,550,626
Advanced Micro Devices.................. 12,437,500
Cognex.................................. 10,450,000
DSC Communications...................... 10,097,500
Xilinx.................................. 10,051,250
Western Digital......................... 10,050,000
Linear Technology....................... 9,875,000
7
<PAGE>
- - -------------------------------------------------------------------------------
Portfolio of Investments December 31, 1994
- - -------------------------------------------------------------------------------
Shares Value
------ -----
Common Stocks--91.8%
Computer Hardware/Peripherals--12.4%
Dell Computer*
Developer and manufacturer of
IBM-compatible PCs.......... 125,000 $ 5,117,188
Electronics for Imaging*
Color copier servers........ 600,000 16,425,000
EMC*
Mainframe storage devices... 850,000 18,381,250
Western Digital*
Manufacturer of disk drives. 600,000 10,050,000
-----------
49,973,438
-----------
Computer Software--18.9%
Applied Voice Technology*
Communications management
software.................... 100,000 1,656,250
Aspen Technology*
Computer-aided chemical
engineering software........ 200,000 3,887,500
Compuware*
Mainframe system software... 275,000 9,865,625
Epic Design Technology*
Integrated circuit design
software.................... 125,000 2,781,250
Hummingbird Communications*
X-Windows networking
software.................... 100,000 2,018,750
Integrated Silicon Systems*
Integrated circuit design
verification software....... 200,000 6,100,000
MapInfo*
Developer of desktop mapping
software.................... 230,000 5,836,250
Microtec Research*
Developer of real-time
operating system software... 150,000 1,312,500
Parametric Technology*
Developer of mechanical design
software.................... 500,000 17,187,500
Quickturn Design Systems*
Integrated circuit emulation
systems..................... 450,000 6,103,125
Synopsys*
Integrated circuit design
software.................... 170,000 7,395,000
Viewlogic Systems*
Integrated circuit design
software ................... 360,000 6,615,000
Wavefront Technology*
Multimedia authoring
software.................... 170,000 2,114,375
Wonderware*
Factory automation
software ................... 100,000 3,350,000
-----------
76,223,125
-----------
Contract Manufacturing--4.9%
Altron*
Manufacturer of electronic
circuit boards.............. 170,000 4,143,750
Merix*
Manufacturer of electronic
circuit boards.............. 250,000 6,296,875
Sanmina*
Manufacturer of electronic
circuit boards.............. 340,000 9,350,000
-----------
19,790,625
-----------
Information Services--2.9%
SPS Transaction Services*
Credit card processing
services.................... 200,000 5,250,000
SunGard Data Systems*
Computer services aimed at
disaster recovery........... 170,000 6,502,500
-----------
11,752,500
-----------
Networking--6.6%
Cisco Systems*
Computer network routers.... 150,000 5,259,375
DSC Communications*
Digital telephone switching
systems..................... 280,000 10,097,500
Standard Microsystems*
Local area network
equipment .................. 210,000 6,326,250
3COM*
Supplier of adapter cards,
hubs, and routers for local
area computer networks...... 100,000 5,156,250
-----------
26,839,375
-----------
Semiconductors--22.5%
Advanced Micro Devices*
Microprocessors and FLASH
memory circuits............. 500,000 12,437,500
Alliance Semiconductor*
Manufacturer of high-
performance memory products. 100,000 3,137,500
Altera*
Field programmable logic
devices..................... 200,000 8,362,500
Arrow Electronics*
Largest distributor of
semiconductors and other
electronic components....... 130,000 4,663,750
Bell Microproducts*
Distributor of electronic
components.................. 250,000 2,750,000
Cyprus Semiconductor*
Manufacturer of memory
circuits.................... 300,000 6,937,500
Exar*
Mixed signal integrated
circuits ................... 400,000 9,700,000
Integrated Device Technology*
Manufacturer of memory
circuits and
microprocessors ............ 300,000 8,868,750
8
<PAGE>
- - -------------------------------------------------------------------------------
Portfolio of Investments (Continued) December 31, 1994
- - -------------------------------------------------------------------------------
Principal
Amount
or Shares Value
--------- -----
Linear Technology
Analog integrated circuits.. 200,000 $ 9,875,000
Microchip Technology*
Field programmable
microcontrollers............ 200,000 5,475,000
Motorola
Manufacturer of semiconductors
and communications
equipment .................. 90,000 5,208,750
Tower Semiconductor*
Semiconductor foundry
services.................... 300,000 3,225,000
Xilinx*
Field programmable gate
arrays ..................... 170,000 10,051,250
-----------
90,692,500
-----------
Semiconductor Capital Equipment--23.1%
Applied Materials*
World's largest supplier of
semiconductor fabrication
equipment................... 180,000 7,560,000
Asyst Technologies*
Miniature clean-room
environment devices for the
manufacture of silicon
wafers ..................... 220,000 5,252,500
Cognex*
Manufacturer of machine vision
systems..................... 400,000 10,450,000
Credence Systems*
Semiconductor test
equipment................... 330,000 7,548,750
Electroglas*
Manufacturer of semiconductor
probe test equipment........ 270,000 9,045,000
Electro Scientific*
Computer-controlled laser
systems..................... 250,000 5,375,000
FSI International*
Manufacturer of semiconductor
production equipment........ 300,000 8,137,500
Fusion Systems*
Manufacturer of ultraviolet
curing systems.............. 200,000 5,175,000
KLA Instruments*
Wafer inspection devices.... 100,000 4,912,500
Lam Research*
Manufacturer of plasma-etching
equipment................... 365,000 13,550,625
Mattson Technology*
Photo-resist strip
equipment ................. 200,000shs. 3,875,000
PRI Automation*
Automated transport and
storage equipment for
silicon wafers.............. 250,000 4,031,250
Tencor Instruments*
Wafer inspection devices.... 80,000 3,070,000
Teradyne*
Semiconductor test
equipment................... 160,000 5,420,000
-----------
93,403,125
-----------
Telecommunications--0.5%
Telefonos de Mexico, S.A. (ADRs)
Telephone services in
Mexico ..................... 50,000 2,050,000
-----------
Total Common Stocks
(Cost $310,727,601) ....... 370,724,688
-----------
<PAGE>
Short-Term Holdings--5.3%
Canadian Imperial Bank
of Commerce,
Grand Cayman,
Fixed Time Deposit,
5 1/4%,
1/3/1995 ................... $10,095,000 10,095,000
First National Bank of Chicago,
Grand Cayman,
Fixed Time Deposit,
5 3/4%,
1/3/1995 .................. 11,000,000 11,000,000
-----------
Total Short-Term Holdings
(Cost $21,095,000) ........ 21,095,000
-----------
Total Investments--97.1%
(Cost $331,822,601) ....... 391,819,688
Other Assets Less
Liabilities--2.9% ........... 11,822,345
-----------
Net Assets--100.0% ............ $403,642,033
============
- - -------------------
* 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, 1994
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Assets:
Investments, at value:
Common stocks (cost $310,727,601)........................................ $370,724,688
Short-term holdings (cost $21,095,000)................................... 21,095,000 $391,819,688
------------
Receivable for Capital Stock sold.......................................... 9,844,771
Receivable for securities sold............................................. 6,944,788
Expenses prepaid to shareholder service agent.............................. 100,445
Receivable for interest and dividends...................................... 15,458
Other...................................................................... 4,831
-----------
Total Assets .............................................................. 408,729,981
-----------
Liabilities:
Payable for Capital Stock repurchased...................................... 3,475,750
Payable to custodian....................................................... 427,376
Payable for securities purchased........................................... 399,161
Accrued expenses, taxes, and other......................................... 785,661
-----------
Total Liabilities ......................................................... 5,087,948
------------
Net Assets ................................................................ $403,642,033
============
Composition of Net Assets:
Capital Stock, at par ($.10 par value; 50,000,000 shares authorized;
24,377,113 shares outstanding):
Class A.................................................................. $ 1,848,621
Class D.................................................................. 589,090
Additional paid-in capital................................................. 341,304,632
Accumulated net investment loss............................................ (74,028)
Distribution in excess of net realized gain................................ (23,369)
Net unrealized appreciation of investments................................. 59,997,087
------------
Net Assets ................................................................ $403,642,033
============
Net Asset Value per share:
Class A ($307,542,510 divided by 18,486,212 shares) ....................... $16.64
======
Class D ($96,099,523 divided by 5,890,901 shares) ......................... $16.31
======
</TABLE>
- - -----------------
See notes to financial statements.
10
<PAGE>
- - -------------------------------------------------------------------------------
Statement of Operations For the Year Ended December 31, 1994
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Investment income:
Dividends.................................................................. $ 621,250
Interest................................................................... 133,145
------------
Total investment income.................................................... $ 754,395
Expenses:
Management fee............................................................. 1,547,256
Shareholder account services............................................... 1,016,786
Distribution and service fees.............................................. 759,996
Registration............................................................... 178,631
Custody and related services............................................... 66,461
Shareholder reports and communications..................................... 60,647
Auditing and legal fees.................................................... 50,431
Shareholders' meeting...................................................... 39,585
Directors' fees and expenses............................................... 29,718
Miscellaneous.............................................................. 10,092
------------
Total expenses............................................................. 3,759,603
------------
Net investment loss ....................................................... (3,005,208)
Net realized and unrealized gain on investments: ------------
Net realized gain on investments........................................... 33,339,790
Net change in unrealized appreciation of investments....................... 37,888,691
Net gain on investments ................................................... 71,228,481
-----------
Increase in net assets from operations .................................... $68,223,273
===========
</TABLE>
- - -----------------
See notes to financial statements.
11
<PAGE>
- - -------------------------------------------------------------------------------
Statements of Changes in Net Assets
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
--------------------------------
1994 1993
---- ----
<S> <C> <C>
Operations:
Net investment loss.......................................................... $ (3,005,208) $ (993,967)
Net realized gain on investments............................................. 33,339,790 19,573,503
Net change in unrealized appreciation of investments......................... 37,888,691 3,822,923
------------ ------------
Increase in net assets from operations....................................... 68,223,273 22,402,459
------------ ------------
Distributions to shareholders:
Net realized gain on investments:
Class A.................................................................... (23,057,467) (17,263,490)
Class D.................................................................... (7,378,956) (1,332,122)
------------ ------------
Decrease in net assets from distributions.................................... (30,436,423) (18,595,612)
------------ ------------
Shares
-------------------------------
Year Ended December 31
-------------------------------
Capital share transactions:* 1994 1993
---------- ---------
Net proceeds from sale of shares:
Class A................................ 12,396,364 2,087,022 195,352,500 30,602,382
Class D................................ 5,185,338 510,549 79,228,846 7,608,582
Exchanged from associated Funds:
Class A................................ 1,170,239 194,947 18,474,544 2,814,238
Class D................................ 203,970 6,443 3,154,851 84,503
Shares issued in payment of gain distributions:
Class A................................ 1,333,850 1,212,594 21,167,404 15,824,437
Class D................................ 446,619 95,461 6,950,002 1,235,257
------------ ----------- ------------ ------------
Total.................................... 20,736,380 4,107,016 324,328,147 58,169,399
------------ ----------- ------------ ------------
Cost of shares repurchased:
Class A................................ (2,961,042) (986,490) (45,094,262) (14,587,172)
Class D................................ (281,622) (8,757) (4,346,535) (129,786)
Exchanged into associated Funds:
Class A................................ (376,738) (220,542) (5,958,943) (3,200,128)
Class D................................ (251,365) (15,735) (3,893,730) (239,390)
------------ ----------- ------------ ------------
Total.................................... (3,870,767) (1,231,524) (59,293,470) (18,156,476)
------------ ----------- ------------ ------------
Increase in net assets from capital
share transactions.................... 16,865,613 2,875,492 265,034,677 40,012,923
============ =========== ------------ ------------
Increase in net assets....................................................... 302,821,527 43,819,770
Net Assets:
Beginning of year............................................................ 100,820,506 57,000,736
------------ ------------
End of year (including accumulated net investment loss of
$74,028 and $75,497, respectively)....................................... $403,642,033 $100,820,506
============ ============
</TABLE>
- - -----------------
* The Fund began offering Class D shares on May 3, 1993.
See notes to financial statements.
12
<PAGE>
- - -------------------------------------------------------------------------------
Notes to Financial Statements
- - -------------------------------------------------------------------------------
1. Effective May 3, 1993, Seligman Communications and Information Fund, Inc.
(the "Fund") began offering two classes of shares. All shares existing prior to
May 3, 1993, have been classified as Class A 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 D shares are sold without an initial sales
charge but are subject to a higher distribution fee and a contingent deferred
sales load ("CDSL") of 1% imposed on certain redemptions made within one year of
purchase. The two 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 class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in common stocks are valued at current market values or,
in their absence, at fair value determined in accordance with
procedures approved by the Board of Directors. Securities traded on
national exchanges are valued at last sales prices or, in their
absence and in the case of over-the-counter securities, a mean of bid
and asked prices. Short-term holdings maturing in 60 days or less are
valued at amortized cost.
b. There is no provision for federal income or excise 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.
c. 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. Interest income is recorded on an accrual basis.
d. 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 proportion of the value of
shares outstanding of each class. Class-specific expenses, which
include distribution and service fees and any other items that can be
specifically attributed to a particular class, are charged directly to
such class.
e. The treatment for financial statement purposes of distributions made
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 capital
gain for federal income tax purposes. Where such differences are
permanent in nature, they are reclassified in the components of net
assets based on their ultimate characterization for federal income tax
purposes. Any such reclassification will have no effect on net assets,
results of operations, or net asset value per share of the Fund.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December 31, 1994, amounted to $404,879,349 and
$204,781,130, respectively.
At December 31, 1994, 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 $63,546,002 and $3,572,284, respectively.
4. 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 0.75% per annum of the Fund's average daily net assets.
13
<PAGE>
- - -------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- - -------------------------------------------------------------------------------
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
commissions of $693,835 from sales of Class A shares, after concessions of
$5,926,699 paid to dealers.
Effective January 1, 1993, the Fund adopted an Administration, Shareholder
Services and Distribution Plan (the "Plan") with respect to Class A shares under
which 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, 1994, fees paid
aggregated $346,469, or 0.21% per annum of the average daily net assets of Class
A shares.
Effective May 3, 1993, the Fund adopted a Plan with respect to Class D
shares under which 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 D shares for which the organizations are
responsible, and 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. For the year ended December
31, 1994, fees paid amounted to $413,527, or 1% per annum of the average daily
net assets of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended December
31, 1994, such charges amounted to $34,431.
Seligman Data Corp., owned by certain associated investment companies,
charged the Fund at cost $1,016,432 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or Seligman Data Corp.
Fees of $14,500 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1994, of
$74,028 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid.
5. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1994, which are included in the corresponding captions of the
Statement of Operations, were as follows:
Class A Class D
------- --------
Distribution and service fees..... $346,469 $413,527
Registration...................... 91,853 51,307
Shareholder reports and
communications................. 13,317 2,385
Shareholders' meeting............. 11,840 1,970
14
<PAGE>
- - -------------------------------------------------------------------------------
Financial Highlights
- - -------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amount.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
Class A Class D
------------------------------------------------------- ----------------------
Year 5/3/93*
Year Ended December 31 Ended to
-------------------------------------------------------
1994** 1993 1992 1991 1990 12/31/94** 12/31/93
---- ---- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning
of period................... $13.43 $12.30 $11.57 $ 8.87 $10.11 $13.32 $12.24
------ ------ ------ - ---- ------ ------ ------
Net investment loss............ (.19) (.14) (.12) (.12) (.08) (.33) (.05)
Net realized and unrealized
investment gain (loss)...... 4.86 4.37 2.09 4.87 (1.04) 4.78 4.23
---- ---- ---- ---- ----- ---- ----
Increase (decrease) from
investment operations....... 4.67 4.23 1.97 4.75 (1.12) 4.45 4.18
Distributions from
net gain realized........... (1.46) (3.10) (1.24) (2.05) (.12) (1.46) (3.10)
----- ----- ----- ----- ---- ----- -----
Net increase (decrease) in
net asset value............. 3.21 1.13 .73 2.70 (1.24) 2.99 1.08
---- ---- --- ---- ----- ---- ----
Net asset value, end of period. $16.64 $13.43 $12.30 $11.57 $ 8.87 $16.31 $13.32
====== ====== ====== ====== = ==== ====== ======
Total return based
on net asset value ......... 35.30% 35.13% 17.31% 54.91% (11.07)% 33.94% 34.89%
Ratios/Supplemental Data:
Expenses to average net assets. 1.65% 1.63% 1.51% 1.69% 1.67% 2.50% 2.56%+
Net investment loss to average
net assets.................. (1.27)% (1.39)% (1.18)% (1.23)% (.83)% (2.20)% (2.33)%+
Portfolio turnover............. 104.08% 137.10% 110.42% 107.72% 85.56% 104.08% 137.10%++
Net assets, end of period
(000's omitted)............. $307,542 $92,987 $57,001 $50,175 $35,292 $96,100 $7,833
</TABLE>
- - ---------------------
*Commencement of offering of Class D shares.
**Per share amounts for the year ended December 31, 1994, are calculated based
on average shares outstanding.
+Annualized.
++For the year ended December 31, 1993.
See notes to financial statements.
15
<PAGE>
- - -------------------------------------------------------------------------------
Report of Independent Auditors
- - -------------------------------------------------------------------------------
The Board of Directors and Shareholders,
Seligman Communications and Information Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Communications and Information Fund,
Inc. as of December 31, 1994, 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 fi-nancial 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, 1994 by correspondence with the Fund's custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman
Communications and Information Fund, Inc. as of December 31, 1994, the results
of its operations, the changes in its net assets, and the financial highlights
for the respective stated periods, in conformity with generally accepted
accounting principles.
/s/ DELOITTE & TOUCHE LLP
----------------------
DELOITTE & TOUCHE LLP
New York, New York
February 3, 1995
16
<PAGE>
- - -------------------------------------------------------------------------------
Board of Directors
- - -------------------------------------------------------------------------------
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
Alice S. Ilchman 3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Trustee, The Rockefeller Foundation
John E. Merow
Partner, Sullivan & Cromwell, Attorneys
Betsy S. Michel 2
Director or Trustee,
Various Organizations
William C. Morris 1
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Daniel Industries, Inc.
Director, Kerr-McGee Corporation
Douglas R. Nichols, Jr. 2
Management Consultant
- - ------------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
James C. Pitney 3
Partner, Pitney, Hardin, Kipp & Szuch, Attorneys
Director, Public Service Enterprise Group
James Q. Riordan 3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Herman J. Schmidt 2
Director, H.J. Heinz Company
Director, HON Industries, Inc.
Director, MAPCO, Inc.
Ronald T. Schroeder 1
Managing Director, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3
Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson 2
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Brian T. Zino 1
Managing Director, J. & W. Seligman & Co. Incorporated
17
<PAGE>
- - -------------------------------------------------------------------------------
Executive Officers
- - -------------------------------------------------------------------------------
William C. Morris
Chairman
Ronald T. Schroeder
President
Paul H. Wick
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
- - -------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 455-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
18
<PAGE>
