----------------
SELIGMAN
----------------
| |
| |
| |
| [PHOTO] |
| |
| |
| |
| |
| |
----------------
SELIGMAN
COMMUNICATIONS
AND INFORMATION
FUND, INC.
----------------
SEEKING CAPITAL APPRECIATION BY INVESTING IN INNOVATIVE
COMMUNICATIONS AND INFORMATION-RELATED INDUSTRIES.
DECEMBER 31, 1995 o 13th ANNUAL REPORT
<PAGE>
- --------------------------------------------------------------------------------
J. & W. SELIGMAN & CO. INCORPORATED
OVER THE LONG TERM
1986...
"Your Fund's broad charter allows it to participate in all aspects of the
INFORMATION EXPLOSION. During the year, portfolio policy focused on providing a
broadly diversified base of companies with unique products and services and
dominant positions in their niches of the marketplace."
- FRED E. BROWN,
FUND CHAIRMAN
1984 - 1988
1995...
"Today, we are on the cutting edge of a new world of technology and have entered
into an incredible information revolution that has far reaching potential. The
explosive growth of personal computers in the home, advances in microprocessor
circuitry, the Internet and its proliferating services, and the expansion of
networking capabilities are among the exciting developments offering new
investment opportunities."
- WILLIAM C. MORRIS,
FUND CHAIRMAN
1989 - PRESENT
- --------------------------------------------------------------------------------
TIME IS THE TEST
In an industry that has changed dramatically in recent years, it's comforting to
know that stability, tradition, and consistent professional service can still be
found in an investment management firm.
J. & W. Seligman & Co. Incorporated has been providing financial services for
more than 130 years. From its beginning, Seligman has adopted a long-term
approach to making money for its clients, by managing investment products and
services of the highest quality. Today, Seligman manages the Seligman Group of
Funds, which offers investors more than 30 fund options.
A PLACE IN HISTORY ----------------
| |
Established in 1864, Seligman played a major role | |
in the geographical expansion and industrial | |
development of the United States. The firm helped | [PHOTO] |
finance the westward path of the railroads and the | |
building of the Panama Canal. In the late 1800s | |
and early 1900s, the firm was instrumental in | |
financing the fledgling automobile and steel | |
industries. Seligman also participated in the | |
original underwritings for some of the nation's ----------------
most prominent companies, including: General JAMES, JESSE, AND
Motors, Victor Talking Machine Company, United JOSEPH SELIGMAN
Artists Theater Circuit, and Maytag. In 1929,
Seligman introduced Tri-Continental Corporation -- which today is the nation's
largest diversified closed-end investment company.
SELIGMAN COMMUNICATIONS AND INFORMATION FUND
Seligman Communications and Information Fund, established June 23, 1983, seeks
capital appreciation by investing primarily in the securities of companies
operating in all aspects of the communications, information, and related
industries. Since its inception, Seligman Communications and Information Fund
has helped investors seek their financial goals by providing growth of capital
through superior returns.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
FELLOW SHAREHOLDERS
While 1995 was a strong year for your Fund, it was also a year that put
technology investors to the test. Because there is much to discuss regarding the
technology market and your Fund, we have asked your Portfolio Manager, Paul H.
Wick, to share his view of what took place in 1995 and to discuss his outlook
for the future. The discussion with Mr. Wick begins on page 4.
The backdrop for your Fund's 1995 performance was the strength of the US
equity markets. The Standard & Poor's 500 Composite Stock Price Index (S&P 500)
and other indices such as the New York Stock Exchange Composite and the Wilshire
5000 were up 30% or more for the year.
The equity markets did, however, teeter towards the end of the year due to
the Federal budget stalemate between the White House and Congress, which brought
on fears of higher inflation and interest rates. Nevertheless, the deadlock in
Washington did not deter the Federal Reserve Board from lowering short-term
interest rates on December 19 -- a move that quickly rejuvenated the equity
markets.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. However, we remain optimistic about your
Fund's performance and will continue to search for, and invest in, those
companies that present strong long-term investment opportunities.
As many of you may already know, Seligman Communications and Information
Fund was reopened to purchases from new investors on January 29. When the Fund
was closed on June 30, 1995, it was determined by the Fund's Board of Directors
that such action was in the best interest of existing shareholders. Significant
amounts of money were flowing into the Fund at a time when stock prices of
technology companies were high and valuations were becoming less attractive. The
Board believes reopening the Fund is, once again, in the best interest of
existing shareholders. The technology market has fallen considerably since the
highs reached in September 1995, and market valuations for many technology
companies are more reasonable. In fact, the technology market is now selling at
a lower price-to-earnings ratio than the S&P 500.
By opening the Fund, we are not declaring a bottom for the technology
market, nor are we predicting smooth sailing from this point forward. Although
we continue to see considerable opportunities in the technology market, we
believe that the market will remain volatile. Given this scenario, we suggest
that a prudent strategy of investing in Seligman Communications and Information
Fund is to make periodic regular investments over time, rather than attempting
to pin-point the ideal time to invest. This will allow an investor to
dollar-cost average his or her investment. Keep in mind, however, that while
dollar-cost averaging, over time, is a method of lowering the average price of
shares purchased, it does not assure a profit nor protect against a loss.
We thank you for your continued investment in Seligman Communications and
Information Fund, and look forward to serving your investment needs in 1996 and
the years ahead.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 8, 1996
-1-
<PAGE>
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SUPERIOR PERFORMANCE
------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND CLASS A IS THE
#1 SCIENCE AND TECHNOLOGY FUND FOR THE FIVE AND 10 YEARS
ENDED 12/31/95, OF THE 15 AND 10 SUCH FUNDS MEASURED,
RESPECTIVELY, BY LIPPER ANALYTICAL SERVICES, A PROMINENT
MUTUAL FUND STATISTICAL RANKING SERVICE. LIPPER'S RANKINGS
ARE BASED ON TOTAL RETURNS AND DO NOT INCLUDE SALES CHARGES.
------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND CLASS A
GROWTH OF A $10,000 INVESTMENT WITH DISTRIBUTIONS REINVESTED:
DECEMBER 31, 1985, THROUGH DECEMBER 31, 1995
[The following represents a Graph in the printed report.]
CLASS A
31-Dec-85 9,526.52
31-Mar-86 10,899.62
30-Jun-86 12,083.34
30-Sep-86 10,577.65
31-Dec-86 11,111.71
31-Mar-87 14,409.12
30-Jun-87 14,838.27
30-Sep-87 16,204.17
31-Dec-87 12,779.89
31-Mar-88 13,156.14
30-Jun-88 14,071.68
30-Sep-88 13,206.30
31-Dec-88 13,717.03
31-Mar-89 14,847.63
30-Jun-89 16,250.66
30-Sep-89 18,253.05
31-Dec-89 17,848.34
31-Mar-90 18,819.31
30-Jun-90 20,355.22
30-Sep-90 14,017.39
31-Dec-90 15,872.52
31-Mar-91 21,455.64
30-Jun-91 18,950.39
30-Sep-91 21,741.95
31-Dec-91 24,587.26
31-Mar-92 25,394.79
30-Jun-92 22,823.43
30-Sep-92 22,908.44
31-Dec-92 28,844.07
31-Mar-93 29,242.72
30-Jun-93 32,901.00
30-Sep-93 37,989.75
31-Dec-93 38,975.30
31-Mar-94 40,687.54
30-Jun-94 37,553.26
30-Sep-94 48,726.38
31-Dec-94 52,733.72
31-Mar-95 60,149.40
30-Jun-95 78,054.79
30-Sep-95 88,354.34
31-Dec-95 75,612.00
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
12 MONTHS ENDED 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
DECEMBER 31
PER SHARE VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value (NAV) $ 11.39 $ 10.19 $ 10.07 $ 10.11 $ 8.87 $ 11.57 $ 12.30 $ 13.43 $ 16.64 $ 21.99
Gain Distribution $ .35 $ 2.83 $ .85 $ 2.91 $ .12 $ 2.05 $ 1.24 $ 3.10 $ 1.46 $ 1.905
NAV adjusted for Gain
Distributions Taken in Shares $ 11.73 $ 13.50 $ 14.49 $ 18.85 $ 16.76 $ 25.96 $ 30.46 $ 41.16 $ 55.69 $ 79.85
TOTAL VALUE AT DECEMBER 31 $11,112 $12,780 $13,717 $17,848 $15,873 $24,587 $28,844 $38,975 $52,734 $75,612
ANNUAL TOTAL RETURN** 11.12%+ 15.01% 7.33% 30.12% (11.07)% 54.90% 17.31% 35.12% 35.30% 43.39%
+ Includes the effect of the initial 4.75% maximum sales charge.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-2-
<PAGE>
- --------------
RATING
- --------------
*****
- --------------
HIGHEST
- --------------
--MORNINGSTAR*
* Morningstar proprietary ratings reflect historical risk-adjusted performance
as of 12/31/95. Seligman Communications and Information Fund Class A received
five stars for the three, five, and 10 years. In the broad equity investments
category, of the 1,394, 950, and 508 funds rated for the three, five, and 10
years, respectively, 10% received five stars. The ratings are subject to
change every month. Morningstar ratings are calculated from the Fund's three-,
five- and 10-year average annual returns in excess of 90-day Treasury bill
returns with appropriate fee adjustments and a risk factor that reflects the
Fund's performance below 90-day Treasury bill returns.
- ----------------------------------------------------------------
AVERAGE ANNUAL CLASS A CLASS D
TOTAL RETURNS** ------------------ ---------------
NET MAXIMUM
DECEMBER 31, 1995 ASSET OFFERING WITHOUT WITH
VALUE PRICE CDSL CDSL
-------- -------- ------- ------
1 year 43.39% 36.57% 42.37% 41.37%
3 year 37.88 35.68 n/a n/a
5 year 36.64 35.33 n/a n/a
10 year 23.02 22.42 n/a n/a
Since Inception 19.04 18.58 42.58 n/a
(Class A: 6/23/83; Class D: 5/3/93)
- ----------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND CLASS D GROWTH
OF A $10,000 INVESTMENT WITH DISTRIBUTIONS REINVESTED:
MAY 3, 1993, THROUGH DECEMBER 31, 1995
[The following represents a Graph in the printed report.]
CLASS D
03-May-93 9,999.99
03-Jun-93 11,470.58
30-Jul-93 12,042.48
30-Aug-93 12,614.38
30-Sep-93 13,186.27
30-Oct-93 13,287.31
30-Nov-93 13,388.35
31-Dec-93 13,489.40
31-Jan-94 13,671.69
28-Feb-94 13,853.98
31-Mar-94 14,036.27
30-Apr-94 13,664.94
31-May-94 13,293.61
30-Jun-94 12,922.28
31-Jul-94 14,194.93
31-Aug-94 15,467.58
30-Sep-94 16,740.23
31-Oct-94 17,182.58
30-Nov-94 17,624.93
31-Dec-94 18,067.27
31-Jan-95 18,901.77
28-Feb-95 19,742.27
31-Mar-95 20,570.77
30-Apr-95 22,594.25
31-May-95 24,617.73
30-Jun-95 26,641.20
31-Jul-95 27,796.94
31-Aug-95 28,952.68
30-Sep-95 30,108.43
31-Oct-95 28,646.19
30-Nov-95 27,183.95
31-Dec-95 25,721.73
- -----------------------------------------------------------------
12 MONTHS ENDED DECEMBER 31 1993 1994 1995
PER SHARE VALUE ------- ------- -------
Net Asset Value (NAV) $ 13.32 $ 16.31 $ 21.35
Gain Distribution $ 3.10 $ 1.46 $ 1.905
NAV adjusted for Gain Distributions
Taken in Shares $ 16.51 $ 22.11 $ 31.48
TOTAL VALUE AT DECEMBER 31 $13,489 $18,067 $25,722
ANNUAL TOTAL RETURN WITHOUT CDSL** 34.89%* 33.94% 42.37%
- -----------------------------------------------------------------
* For the period May 3, 1993 (commencement of operations) to December 31, 1993.
**Return figures reflect any change in price per share and assume the
reinvestment of capital gain distributions. Return figures for Class A shares
are calculated without (NAV) the effect of the initial 4.75% maximum sales
charge. Class A share returns reflect the effect of the 0.25% Administration,
Shareholder Services and Distribution Plan after January 1, 1993, only. The
returns for periods of one year or less for Class D shares are calculated
without and with the effect of the 1% contingent deferred sales load (CDSL),
charged only on redemptions made within one year of the date of purchase. A
fund that concentrates its investments in one economic sector may be subject
to greater share price fluctuations than a more diversified fund. Past
performance is not a guarantee of future results. The rate 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.
-3-
<PAGE>
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SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
INTERVIEW WITH PAUL WICK, PORTFOLIO MANAGER
Q. HOW WOULD YOU SUMMARIZE 1995'S TECHNOLOGY
MARKET?
A. The exceptional performance of Seligman
- ---------------- Communications and Information Fund in 1995
| | reflects the outstanding business fundamentals
| | of the US technology industry.
| |
| [PHOTO] | Virtually every major segment of technology
| | experienced robust growth during the year: the
| | global personal computer market grew 23% to a
| | record 64 million units; wireless telephone
| | handsets and infrastructure equipment sales
| | expanded by 35%; the global semiconductor
- ---------------- industry grew 40% to a record $150 billion; and
SELIGMAN'S SMALL the Internet was transformed from a small
COMPANY AND on-line community of scientists and academics
TECHNOLOGY TEAM: into a mass-market information superhighway.
(FROM LEFT) GUS
SCACCO, CARLENE The year was also witness to a number of
PALIA, SHANEAN excesses within the technology industry. 1995
AUSTIN, BRUCE spawned more initial public offerings (IPOs) of
ZIRMAN, (SEATED) technology companies (195) than any year since
ARSEN MRAKOVCIC, 1983 (220). Many of these companies' stocks
PAUL WICK appreciated to levels two to three times the
valuations of more seasoned public companies
with similar fundamentals. Moreover, a number
of Internet-related companies with paltry or
non-existent earnings prospects were bid up to
irrational levels by investors wanting to
invest in any aspect of the "next big thing."
On balance, however, positive fundamentals of
most technology companies overshadowed such
excesses. Therefore, we were quite surprised at
the weakness in most technology stocks, and in
your Fund, in the last two months of 1995 and
into early 1996.
Q. WHAT HAPPENED IN THE TECHNOLOGY MARKET IN THE
FOURTH QUARTER OF 1995?
A. We believe a number of factors were responsible
for the fourth- quarter decline in technology
stock prices:
o Prices for certain types of memory chips
fell after having been stable for two years.
Intel precipitated this decline by dumping
excess chip inventory at year end.
o Falling memory chip prices resulted in a
major sell-off of shares of semiconductor
equipment stocks, due to investor fears that
a dramatic oversupply of chips could be
imminent.
A TEAM APPROACH o Microsoft's new operating system, Windows
95, is off to a slower than expected start.
SELIGMAN Many businesses are comparing Windows 95 to
COMMUNICATIONS AND Windows NT, an even more advanced operating
INFORMATION FUND IS system; other companies are postponing
MANAGED BY software upgrades indefinitely.
SELIGMAN'S SMALL
COMPANY AND o The US cellular phone market has witnessed
TECHNOLOGY TEAM, slower unit growth and intensified price
HEADED BY PAUL WICK. competition, negatively affecting suppliers
MR. WICK AND HIS to the industry.
TEAM OF SEASONED
RESEARCH o Apple Computer is experiencing difficulties,
PROFESSIONALS VISIT and order cancellations have disrupted its
WITH THE MANAGEMENT suppliers.
OF HUNDREDS OF
TECHNOLOGY COMPANIES o The world's largest mutual fund sold
EACH YEAR TO approximately $15 billion of technology
IDENTIFY THOSE THAT stocks in the fourth quarter of 1995.
OFFER THE GREATEST
POTENTIAL FOR Q. WHAT IS YOUR OUTLOOK FOR THE TECHNOLOGY
GROWTH. STOCKS MARKET?
PURCHASED FOR THE
FUND ARE CONTINUALLY A. In spite of the recent adversity in the
MONITORED BY THE technology sector, we remain optimistic
TEAM, AND regarding the appreciation potential of your
DISCIPLINED BUY AND Fund's holdings in 1996. From a growth
SELL POLICIES ARE standpoint, technology companies
FOLLOWED. dramatically outperformed the S&P 500 in
1995, yet technology stock indices only
slightly edged the S&P 500. As a result,
large segments of the US technology sector
are trading at unusually low valuations
relative to the broader market indices. In
the past, such valuations have augured
favorably for subsequent returns.
-4-
<PAGE>
While the US economy has weakened recently,
we doubt the likelihood of a recession in a
presidential election year. The US PC market
may indeed slow from previous years' growth
rates, but we expect other regions to pick
up the slack. Overseas, PC penetration in
businesses, and especially in homes, lags
well behind the US. We are heartened by the
current PC price war in Japan, where price
elasticity has led to surging sales for US
computer makers and parts suppliers.
Overall, we expect the global PC market to
expand by 20% in units in 1996, and this
forecast could be conservative. Two positive
wild cards: 1) business adoption of Windows
95 or Windows NT would spur computer
upgrades to high powered Pentium machines,
and 2) growth of the Internet could
jump-start consumer PC demand.
One area that is easier to predict is
network infrastructure spending. Networking
has been the fastest growing part of the
technology industry for the last three
years, and we see no signs of that changing.
Corporations around the world continue to
spend large sums to wire their global
offices together in computer networks with
ever-greater bandwidth. Consumers are buying
modem devices in record numbers to
participate in on-line services, the
Internet, and home banking. Your Fund has
numerous holdings in the communications
infrastructure area, and many of our
semiconductor investments are in key
suppliers to the networking industry.
Q. ARE THERE ANY NEW DEVELOPMENTS IN THE
TECHNOLOGY MARKET THAT MAKE YOU OPTIMISTIC
GOING FORWARD?
A. We are excited about a number of important
developments in the consumer electronics
area:
o The direct broadcast satellite (DBS)
industry is experiencing explosive growth
in the US. Transceivers and set-top
converters sold with these systems are a
significant new market for select US
semiconductor firms.
o The "64-bit" video game systems slated to
ship in late 1996 and early 1997
represent a quantum leap in performance
over older generation machines. We expect
these new game machines to revive the
presently moribund video game hardware
and software markets.
o Digital Video Disk (DVD) players expected
for Christmas 1996 are likely to make the
VCR obsolete. The new DVD players can
play audio CDs, video game disks, and
full-length movies on a single small disk
at visual resolutions that far exceed
VCRs. A number of your Fund's
semiconductor holdings are likely to win
significant designs into these systems.
o Over the next two years, major new
Personal Communication Services (PCS)
networks are planned to be built all over
America. The first of these wireless
voice and data networks should be up and
running by late 1996. As a result, we
expect prices of wireless telephone
service to fall significantly as existing
cellular carriers react to this
heightened competition. Lower service
prices logically should translate into
renewed growth in wireless telephones and
pagers.
o The cable television service providers
and telephone companies are in a race to
offer high speed access to on-line
services and the Internet. As these new
service offerings roll out in 1997, we
expect the power of the Internet will
increase dramatically in unpredictable
but exciting ways.
In summary, we remain as enthused as ever
about the prospects for technology--the
world's fastest growing major industry. If
anything, the pace of change has
accelerated, and with it, the potential
opportunities.
-5-
<PAGE>
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SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
PERFORMANCE COMPARISON CHART AND TABLE DECEMBER 31, 1995
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, 1995,
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 both fees and sales charges, while the Lipper Science
& Technology excludes the effects of any sales charges, but does reflect fees.
[The following represents a Graph in the printed report.]
- --------------------------------------------------------------------------------
Seligman Communications and Information Fund--Class A
Lipper
With Without S&P Science and
Sales Charge Sales Charge 500 Index Technology
------------ ------------ --------- ----------
31-Dec-85 9,526.52 10,000.00 10,000.00 10,000.00
31-Mar-86 10,899.62 11,441.35 11,410.50 11,052.00
30-Jun-86 12,083.34 12,683.90 12,083.03 11,467.56
30-Sep-86 10,577.65 11,103.38 11,240.12 10,109.80
31-Dec-86 11,111.71 11,663.98 11,866.53 10,801.31
31-Mar-87 14,409.12 15,125.28 14,400.28 13,943.41
30-Jun-87 14,838.27 15,575.86 15,123.17 14,088.42
30-Sep-87 16,204.17 17,009.54 16,120.85 15,267.62
31-Dec-87 12,779.89 13,415.06 12,489.63 11,371.32
31-Mar-88 13,156.14 13,810.01 13,200.78 11,968.32
30-Jun-88 14,071.68 14,771.05 14,079.96 13,057.43
30-Sep-88 13,206.30 13,862.67 14,127.69 12,110.77
31-Dec-88 13,717.03 14,398.78 14,563.81 12,199.18
31-Mar-89 14,847.63 15,585.57 15,596.38 12,711.54
30-Jun-89 16,250.66 17,058.34 16,973.08 13,780.58
30-Sep-89 18,253.05 19,160.24 18,790.72 15,128.33
31-Dec-89 17,848.34 18,735.42 19,178.56 15,099.58
31-Mar-90 18,819.31 19,754.65 18,601.67 15,676.39
30-Jun-90 20,355.22 21,366.90 19,771.90 17,364.73
30-Sep-90 14,017.39 14,714.07 17,054.65 12,940.20
31-Dec-90 15,872.52 16,661.40 18,583.43 14,991.22
31-Mar-91 21,455.64 22,522.00 21,282.86 18,989.38
30-Jun-91 18,950.39 19,892.25 21,234.12 17,580.37
30-Sep-91 21,741.95 22,822.55 22,369.72 19,637.27
31-Dec-91 24,587.26 25,809.27 24,245.20 22,046.76
31-Mar-92 25,394.79 26,656.94 23,632.77 22,225.34
30-Jun-92 22,823.43 23,957.78 24,082.26 20,651.79
30-Sep-92 22,908.44 24,047.01 24,841.58 21,556.34
31-Dec-92 28,844.07 30,277.64 26,092.60 25,494.68
31-Mar-93 29,242.72 30,696.11 27,232.06 26,341.10
30-Jun-93 32,901.00 34,536.21 27,364.68 28,616.97
30-Sep-93 37,989.75 39,877.87 28,072.06 31,610.31
31-Dec-93 38,975.30 40,912.40 28,722.49 31,973.83
31-Mar-94 40,687.54 42,709.74 27,633.33 32,357.51
30-Jun-94 37,553.26 39,419.69 27,749.67 30,451.66
30-Sep-94 48,726.38 51,148.12 29,106.35 35,055.95
31-Dec-94 52,733.72 55,354.62 29,101.69 36,927.93
31-Mar-95 60,149.40 63,138.87 31,935.32 39,320.86
30-Jun-95 78,054.79 81,934.16 34,983.87 47,015.96
30-Sep-95 88,354.34 92,745.61 37,764.04 54,261.12
31-Dec-95 75,612.35 79,370.33 40,037.03 50,842.67
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The table below shows the average annual total returns for the one-, five-, and
10-year periods through December 31, 1995, for 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, 1995, for 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 10
YEAR YEARS YEARS
------ ------ ------
Seligman Communications and
Information Fund
Class A with sales charge 36.57% 35.33% 22.42%
Class A without sales charge 43.39 36.64 23.02
S&P 500 37.58 16.59 14.86
Lipper Science & Technology 37.68 27.67 17.66
SINCE
ONE INCEPTION
YEAR 5/3/93
------ ------------
Seligman Communications and
Information Fund
Class D with CDSL 41.37% n/a
Class D without CDSL 42.37 42.58%
S&P 500 37.58 16.62*
Lipper Science & Technology 37.68 27.98*
*From 4/30/93.
- --------------------------------------------------------------------------------
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.
-6-
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
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 1995
DECEMBER 31, 1995 DECEMBER 31, 1994
---------------------- -------------------
CLASS A CLASS D CLASS A CLASS D
- --------------------------------------------------------------------------------
Net Assets (in thousands) $1,940,693 $609,332 $307,542 $96,100
- --------------------------------------------------------------------------------
Net Asset Value per Share $21.99 $21.35 $16.64 $16.31
With December 1995 Gain
Distribution Taken in Shares 23.86 23.22 -- --
Increase in Net Asset Value with
Gain Distribution Taken in Shares 43.39% 42.37% -- --
- --------------------------------------------------------------------------------
Distribution of Realized Gain per
Share $1.905 $1.905 $1.46 $1.46
- --------------------------------------------------------------------------------
Total Expenses per Dollar
of Average Net Assets $0.0161 $0.0237 $0.0165 $0.0250
- --------------------------------------------------------------------------------
-7-
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
FEDERAL TAX STATUS OF 1995 GAIN DISTRIBUTION FOR TAXABLE ACCOUNTS
The distribution of $1.905 per share, consisting of $0.513 from net long-term
gain and $1.392 from net short-term gain, realized on investment transactions in
1995, was paid on December 27, 1995, 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 1995 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 $22.41 for Class A and $21.75 for Class D.
A year-end statement of account showing activity for 1995 and a combined Form
1099-DIV/B has been mailed to each shareholder. Form 1099-B 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-DIV shows
the amount of the distribution from gain on investments paid during the year.
<TABLE>
<CAPTION>
DIVERSIFICATION OF ASSETS December 31, 1995
PERCENT PERCENT OF
OF NET NET ASSETS
ISSUES COST VALUE ASSETS DEC. 31, 1994
------ ------ ----- -------- -------------
<S> <C> <C> <C> <C> <C>
Net Cash and Short-Term Holdings 1 $ 40,311,905 $ 40,311,905 1.6 8.2
--- -------------- -------------- ----- -----
Common Stocks and Convertible Securities:
Broadcasting 2 44,433,788 44,425,000 1.7 --
Communications infrastructure 9 188,102,691 231,863,538 9.1 --
Computer hardware/peripherals 11 357,277,822 369,730,313 14.5 12.4
Computer software 12 339,015,776 407,937,500 16.0 18.9
Contract manufacturing 4 53,373,606 75,059,375 2.9 4.9
Information services -- -- -- -- 2.9
Networking -- -- -- -- 6.6
Publishing 2 37,524,263 44,500,000 1.8 --
Semiconductors 19 818,164,208 812,667,500 31.9 22.5
Semiconductor capital equipment 13 512,922,112 462,442,187 18.1 23.1
Telecommunications -- -- -- -- 0.5
Miscellaneous 3 41,358,188 61,087,500 2.4 --
--- -------------- -------------- ----- -----
75 2,392,172,454 2,509,712,913 98.4 91.8
--- -------------- -------------- ----- -----
Net Assets 76 $2,432,484,359 $2,550,024,818 100.0 100.0
=== ============== ============== ===== =====
</TABLE>
-8-
<PAGE>
- --------------------------------------------------------------------------------
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
SHARES
-------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/95
- -----------------------------------------------------
Analog Devices 700,000 700,000
Informix 1,400,000 1,400,000
K-III Communications 2,000,000 2,000,000
LSI Logic 500,000 1,300,000
Microchip Technology 432,500 1,232,500
S3 1,200,000 1,200,000
Tencor Instruments 500,000 1,750,000
3DO 2,000,000 2,000,000
VLSI Technology 1,315,000 2,015,000
Zilog 700,000 800,000
HOLDINGS
REDUCTIONS DECREASE 12/31/95
- -----------------------------------------------------
Aspect Telecommunications 1,005,700 594,300
Dell Computer 250,000 600,000+
Electronics for Imaging 900,000 900,000++
Hewlett-Packard 400,000 --
Linear Technology 410,000 1,250,000
Micron Technology 550,000 --
Parametric Technology 350,000 1,300,000
PRI Automation 505,000 95,000
StrataCom 600,000 --
3COM 1,150,000 250,000
MAJOR PORTFOLIO HOLDINGS
AT DECEMBER 31, 1995
SECURITY VALUE
- ---------------------------------------
Parametric Technology $86,287,500
Intel 79,537,500
Altera 79,500,000
Xilinx 72,900,000
Synopsys 68,625,000
Cisco Systems 67,218,750
Lam Research 63,875,000
Cypress Semiconductor 63,750,000
Seagate Technology 54,625,000
Novellus Systems 54,125,000
* Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
+ Includes 350,000 shares received as a result of a 2-for-1 stock split.
++ Includes 600,000 shares received as a result of a 2-for-1 stock split.
-9-
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
SHARES VALUE
-------- -------
COMMON STOCKS 97.6%
BROADCASTING 1.7%
EVERGREEN MEDIA*
Radio broadcasting 500,000 $16,000,000
VIACOM (CLASS B)*
Entertainment, publishing, and
international media operations 600,000 28,425,000
--------------
44,425,000
--------------
COMMUNICATIONS INFRASTRUCTURE 9.1%
ASPECT TELECOMMUNICATIONS*
Automated call
distribution equipment 594,300 19,834,763
CIDCO*
Caller identification systems 1,500,000 38,062,500
CISCO SYSTEMS*
Computer network routers 900,000 67,218,750
COLONIAL DATA TECHNOLOGIES*
Manufacturer of telephone
caller identification systems 100,000 2,050,000
DSC COMMUNICATIONS*
Digital telephone
switching systems 600,000 22,200,000
ECI TELECOMMUNICATIONS
Provider of digital
telecommunications and data
transmissions systems 700,000 16,012,500
GLENAYRE TECHNOLOGIES*
Manufacturer of paging
infrastructure equipment 250,000 15,562,500
MADGE NETWORKS*
Worldwide supplier of
switched networking solutions
for the enterprise 880,800 39,250,650
3COM*
Supplier of adapter cards, hubs,
and routers for local area
computer networks 250,000 11,671,875
--------------
231,863,538
--------------
COMPUTER HARDWARE / PERIPHERALS 14.5%
ADAPTEC*
Small computer systems
which interface hardware
and software 925,000 37,925,000
COMPAQ COMPUTERS*
Leading global PC
manufacturer 850,000 40,800,000
DELL COMPUTER*
Manufacturer of
IBM-compatible PCs 600,000 20,887,500
ELECTRONICS FOR IMAGING*
Color copier servers 900,000 39,037,500
EMC*
Enterprise storage devices 3,500,000 53,812,500
KOMAG*
Manufacturer of thin film
magnetic media for hard-
disk drives 700,000 32,112,500
READ-RITE*
Manufacturer of thin film
magnetic read-write heads
for hard-disk drives 1,025,000 23,767,188
SEAGATE TECHNOLOGY*
Global hard-disk drive supplier 1,150,000 54,625,000
TEKTRONIX
Color printers, digital video
storage, and editing systems 700,000 34,387,500
VICOR*
Manufacturer of modular power
converters 595,000 11,825,625
XEROX*
Business equipment and supplies 150,000 20,550,000
--------------
369,730,313
--------------
COMPUTER SOFTWARE 16.0%
ADOBE SYSTEMS
desktop publishing software 200,000 12,425,000
FTP SOFTWARE*
Internetworking software 860,000 24,993,750
HUMMINGBIRD COMMUNICATIONS*
X-Windows networking
software 550,000 22,412,500
INFORMIX*
Designer, manufacturer,
and supporter of database
management systems 1,400,000 42,087,500
MENTOR GRAPHICS
Electronic design
automation software 1,550,000 28,093,750
NETMANAGE*
Internetworking software 1,900,000 43,937,500
ORACLE SYSTEMS*
Database management
software systems 650,000 $ 27,543,750
PARAMETRIC TECHNOLOGY*
Developer of mechanical
design software 1,300,000 86,287,500
SUNGARD DATA SYSTEMS*
Computer services aimed at
disaster recovery 700,000 19,687,500
SYMANTEC*
Develops, markets, and supports
application development tools
and system software products 500,000 11,593,750
SYNOPSYS*
Integrated circuit
design software 1,800,000 68,625,000
3DO*
Developer of video game
software and game platforms 2,000,000 20,250,000
--------------
407,937,500
--------------
CONTRACT MANUFACTURING 2.9%
ADFLEX SOLUTIONS
Manufacturer of flexible
circuit boards 700,000 18,550,000
ALTRON*
Manufacturer of
electronic circuit boards 450,000 13,443,750
MERIX*
Manufacturer of
electronic circuit boards 750,000 22,265,625
SANMINA*
Manufacturer of
electronic circuit boards 400,000 20,800,000
--------------
75,059,375
--------------
PUBLISHING 1.0%
K-III COMMUNICATIONS*
Developer, builder, and operator
of specialized information,
educational, and media
franchises 2,000,000 24,250,000
--------------
-10-
<PAGE>
- --------------------------------------------------------------------------------
SHARES VALUE
-------- -------
SEMICONDUCTORS 31.9%
ALTERA*
Field programmable logic
devices 1,600,000 $79,500,000
ANALOG DEVICES*
Supplier of analog-focused
semiconductors and
digital signal processors 700,000 24,762,500
ARROW ELECTRONICS*
Largest distributor of
semiconductors and other
electronic components 400,000 17,250,000
ATMEL*
Manufacturer of memory circuits 1,650,000 36,712,500
CYPRESS SEMICONDUCTOR*
Manufacturer of memory
circuits 5,000,000 63,750,000
INTEGRATED DEVICE TECHNOLOGY*
Manufacturer of memory
circuits and microprocessors 2,900,000 37,518,750
INTEL
World's leading producer of
microprocessor circuits for PCs 1,400,000 79,537,500
LATTICE SEMICONDUCTOR
Programmable logic devices 1,300,000 42,493,750
LINEAR TECHNOLOGY
Analog integrated circuits 1,250,000 49,218,750
LSI LOGIC*
Manufacturer of complex
logic circuits 1,300,000 42,575,000
MAXIM INTEGRATED PRODUCTS*
Linear and mixed-signal
integrated circuits 1,000,000 38,500,000
MICROCHIP TECHNOLOGY*
Field programmable
microcontrollers 1,232,500 45,140,312
NATIONAL SEMICONDUCTOR*
Producer of analog
and digital semiconductors 1,800,000 40,050,000
OAK TECHNOLOGY
Audio and CD-Rom
controller circuits 600,000 25,575,000
S3*
Supplier of multi-media
acceleration solutions for PCs 1,200,000 21,075,000
TOWER SEMICONDUCTOR*
Semiconductor foundry services 1,400,000 30,362,500
VLSI TECHNOLOGY*
Designer of application-specific
integrated circuits for the
computing, communications,
and consumer entertainment
marketplaces 2,015,000 36,395,938
XILINX*
Field programmable gate arrays 2,400,000 72,900,000
ZILOG*
Integrated circuits 800,000 29,350,000
--------------
812,667,500
--------------
SEMICONDUCTOR CAPITAL EQUIPMENT 18.1%
APPLIED MATERIALS*
World's largest supplier of
semiconductor fabrication
equipment 1,200,000 47,175,000
ASYST TECHNOLOGIES*
Miniature clean-room
environment devices for the
manufacture of silicon wafers 800,000 28,300,000
CREDENCE SYSTEMS*
Semiconductor test equipment 1,500,000 34,125,000
ELECTRO SCIENTIFIC*
Capacitor production systems
and memory chip repair devices 1,050,000 30,318,750
ELECTROGLAS*
Manufacturer of semi-
conductor prober devices 2,050,000 51,762,500
KLA INSTRUMENTS*
Wafer inspection devices 1,300,000 33,962,500
LAM RESEARCH*
Manufacturer of plasma-
etching equipment 1,400,000 63,875,000
NOVELLUS SYSTEMS*
Chemical vapor
deposition equipment 1,000,000 54,125,000
PRI AUTOMATION*
Automated transport and
storage equipment for
silicon wafers 95,000 3,384,375
SILICON VALLEY GROUP*
Semiconductor manufacturing
equipment 1,025,000 25,945,312
TENCOR INSTRUMENTS*
Wafer inspection devices 1,750,000 42,656,250
TERADYNE*
Semiconductor test
equipment 1,100,000 27,500,000
ULTRATECH STEPPER*
Manufacturer of
photolithography systems 750,000 19,312,500
--------------
462,442,187
--------------
MISCELLANEOUS 2.4%
COGNEX*
Manufacturer of machine
vision systems 900,000 31,500,000
FUSION SYSTEMS*
Ultraviolet curing and
photo-resist strip systems 550,000 15,262,500
VARIAN ASSOCIATES
Diversified high-technology
company with core business
in health care systems,
semiconductor manufacturing
equipment, and
analytical instruments 300,000 14,325,000
--------------
61,087,500
--------------
TOTAL COMMON STOCKS
(Cost $2,375,172,454) 2,489,462,913
--------------
CONVERTIBLE PREFERRED
STOCKS 0.8%
(Cost $17,000,000)
PUBLISHING 0.8%
HOUGHTON MIFFLIN 6% 250,000 20,250,000
SHORT-TERM HOLDINGS 0.9% --------------
(Cost $22,210,000) 22,210,000
TOTAL INVESTMENTS 99.3% --------------
(Cost $2,414,382,454) 2,531,922,913
OTHER ASSETS
LESS LIABILITIES 0.7% 18,101,905
NET ASSETS 100.0% $2,550,024,818
==============
- -------------------------------------
*Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
-11-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
ASSETS:
Investments, at value:
Common stocks and convertible securities
(cost $2,392,172,454) $ 2,509,712,913
Short-term holdings (cost $22,210,000) 22,210,000 $2,531,922,913
---------------
Cash 770,488
Receivable for securities sold 25,215,120
Receivable for Capital Stock sold 12,498,044
Expenses prepaid to shareholder service agent 1,414,746
Receivable for interest and dividends 143,911
Other 740,608
--------------
Total Assets 2,572,705,830
--------------
LIABILITIES:
Payable for securities purchased 11,598,360
Payable for Capital Stock repurchased 6,419,994
Accrued expenses, taxes, and other 4,662,658
--------------
Total Liabilities 22,681,012
--------------
NET ASSETS $2,550,024,818
==============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.10 par value; 1,000,000,000 shares
authorized; 116,792,946 shares outstanding):
Class A $ 8,824,612
Class D 2,854,683
Additional paid-in capital 2,366,848,426
Accumulated net investment loss (84,925)
Undistributed net realized gain 54,041,563
Net unrealized appreciation of investments 117,540,459
--------------
NET ASSETS $2,550,024,818
==============
NET ASSET VALUE PER SHARE:
CLASS A ($1,940,692,564 / 88,246,116 SHARES) $21.99
======
CLASS D ($609,332,254 / 28,546,830 SHARES) $21.35
======
- -------------------------------------
See notes to financial statements.
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
INVESTMENT INCOME:
Interest $ 4,389,043
Dividends 1,240,167
Other income 95,545
---------------
Total investment income $ 5,724,755
EXPENSES:
Management fee 14,159,819
Shareholder account services 9,418,993
Distribution and service fees 8,064,454
Registration 912,475
Shareholder reports and communications 619,509
Custody and related services 354,500
Shareholders' meeting 186,440
Auditing and legal fees 93,665
Directors' fees and expenses 52,525
Miscellaneous 33,399
---------------
Total expenses 33,895,779
--------------
NET INVESTMENT LOSS (28,171,024)
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments 286,492,658
Net change in unrealized appreciation
of investments 57,543,372
---------------
NET GAIN ON INVESTMENTS 344,036,030
--------------
INCREASE IN NET ASSETS FROM OPERATIONS $ 315,865,006
==============
- -------------------------------------
See notes to financial statements.
-12-
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------- -------------
1995 1994
------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment loss $ (28,171,024) $ (3,005,208)
Net realized gain on investments 286,492,658 33,339,790
Net change in unrealized
appreciation of investments 57,543,372 37,888,691
------------- -------------
Increase in net assets from operations 315,865,006 68,223,273
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A (154,214,314) (23,057,467)
Class D (50,053,285) (7,378,956)
------------- -------------
Decrease in net assets from distributions (204,267,599) (30,436,423)
------------- -------------
SHARES
--------------------------------
YEAR ENDED DECEMBER 31
--------------------------------
1995 1994
--------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares:
Class A 76,561,941 12,396,364 1,737,333,556 195,352,500
Class D 25,510,043 5,185,338 562,173,487 79,228,846
Exchanged from associated Funds:
Class A 13,483,088 1,170,239 330,495,561 18,474,544
Class D 2,341,411 203,970 56,510,269 3,154,851
Shares issued in payment of
gain distributions:
Class A 6,353,670 1,333,850 142,362,980 21,167,404
Class D 2,144,837 446,619 46,674,570 6,950,002
--------------- ------------- -------------- ------------
Total 126,394,990 20,736,380 2,875,550,423 324,328,147
--------------- ------------- -------------- ------------
Cost of shares repurchased:
Class A (11,847,319) (2,961,042) (290,139,169) (45,094,262)
Class D (3,422,232) (281,622) (83,392,097) (4,346,535)
Exchanged into associated Funds:
Class A (14,791,476) (376,738) (372,155,193) (5,958,943)
Class D (3,918,130) (251,365) (95,078,586) (3,893,730)
--------------- ------------- -------------- ------------
Total (33,979,157) (3,870,767) (840,765,045) (59,293,470)
--------------- ------------- -------------- ------------
Increase in net assets from capital
share transactions 92,415,833 16,865,613 2,034,785,378 265,034,677
=============== ============= -------------- ------------
Increase in net assets 2,146,382,785 302,821,527
NET ASSETS:
Beginning of year 403,642,033 100,820,506
-------------- ------------
End of year (including accumulated net investment loss of
$84,925 and $74,028, respectively) $2,550,024,818 $403,642,033
============== ============
</TABLE>
- -------------------------------------
See notes to financial statements.
-13-
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Seligman Communications and Information Fund, Inc. (the "Fund") offers two
classes of shares. All shares existing prior to May 3, 1993, were 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
distribution fee of up to 0.75% and a service fee of up to 0.25% on an annual
basis, 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 value of shares of each class. Class-specific expenses,
which include distribution and service fees and any other items that are
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, 1995, amounted to $2,980,047,711
and $1,185,095,516, respectively.
At December 31, 1995, the cost of investments for federal income tax purposes
was $2,414,483,290 and the tax basis gross unrealized appreciation and
depreciation of portfolio securities amounted to $304,816,709 and $187,377,086,
respectively.
4. At December 31, 1995, the Fund owned short-term investments which matured in
less than 7 days.
5. 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.
Effective February 8, 1996, the management fee rate is 0.90% of the first $3
billion of the Fund's average daily net assets, 0.85% of the next $3 billion of
average daily net assets and 0.75% of average daily net assets in excess of $6
billion.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
concessions of $7,741,414 from sales of Class A shares, after commissions of
$63,320,055 paid to dealers.
The Fund has 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, 1995, fees paid aggregated $3,487,717,
or 0.24% per annum of the average daily net assets of Class A shares.
The Fund has 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, 1995,
fees paid amounted to $4,576,736, 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, 1995,
such charges amounted to $590,507.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became 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
period ended December 31, 1995, Seligman Services, Inc. received commissions of
$4,030,095 from the sales of shares of the Fund. Seligman Services, Inc. also
received distribution and service fees of $291,225, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $9,418,947 for shareholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
Fees of $48,500 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
-14-
<PAGE>
- --------------------------------------------------------------------------------
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, 1995, of
$84,925 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.
6. Class-specific expenses charged to Class A and Class D during the year ended
December 31, 1995, which are included in the corresponding captions of the
Statement of Operations, were as follows:
CLASS A CLASS D
------- -------
Distribution and service fees $3,487,717 4,576,736
Registration 114,557 70,034
Shareholder reports and communications 17,646 3,819
7. On August 2, 1995, pursuant to authorization by the Board of Directors, the
Fund filed Articles Supplementary increasing the number of authorized shares of
Capital Stock to 1,000,000,000.
- --------------------------------------------------------------------------------
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 amounts.
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 ENDED
YEAR ENDED DECEMEBER 31 DECEMBER 31 5/3/93*
---------------------------------------------- ---------------- TO
1995** 1994** 1993 1992 1991 1995** 1994** 12/31/93
------ ------ ------ ------ ------ ------ ------ --------
PER SHARE OPERATING
PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $16.64 $13.43 $12.30 $11.57 $8.87 $16.31 $13.32 $12.24
------ ------ ------ ------ ------ ------ ------ ------
Net investment loss (0.33) (0.19) (0.14) (0.12) (0.12) (0.50) (0.33) (0.05)
Net realized and unrealized
investment gain 7.59 4.86 4.37 2.09 4.87 7.45 4.78 4.23
------ ------ ------ ------ ------ ------ ------ ------
Increase from
investment operations 7.26 4.67 4.23 1.97 4.75 6.95 4.45 4.18
Distributions from
net gain realized (1.91) (1.46) (3.10) (1.24) (2.05) (1.91) (1.46) (3.10)
------ ------ ------ ------ ------ ------ ------ ------
Net increase in net
asset value 5.35 3.21 1.13 0.73 2.70 5.04 2.99 1.08
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $21.99 $16.64 $13.43 $12.30 $11.57 $21.35 $16.31 $13.32
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE: 43.39% 35.30% 35.13% 17.31% 54.91% 42.37% 33.94% 34.89%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 1.61% 1.65% 1.63% 1.51% 1.69% 2.37% 2.50% 2.56%+
Net investment loss to average
net assets (1.31)% (1.27)% (1.39)% (1.18)% (1.23)% (2.07)% (2.20)% (2.33)%+
Portfolio turnover 65.77% 104.08% 137.10% 110.42% 107.72% 65.77% 104.08% 137.10%++
Net assets, end of period
(000's omitted) $1,940,693 $307,542 $92,987 $57,001 $50,175 $609,332 $96,100 $ 7,833
</TABLE>
- -------------------------------------
* Commencement of offering of Class D shares.
** Per share amounts for the years ended December 31, 1995 and 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, 1995, 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, 1995 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, 1995, 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
New York, New York
February 8, 1996
- --------------------------------------------------------------------------------
-16-
<PAGE>
- --------------------------------------------------------------------------------
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic
Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2
CHAIRMAN AND CEO, Kerr-McGee
Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth
Aluminum Corporation
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, Kerr-McGee Corporation
JAMES C. PITNEY 3
PARTNER, Pitney, Hardin, Kipp & Szuch,
Law Firm
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
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
DIRECTOR, Red Man Pipe and Supply
Company
BRIAN T. ZINO 1
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman
& Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS
WILLIAM C. MORRIS LAWRENCE P. VOGEL
CHAIRMAN VICE PRESIDENT
BRIAN T. ZINO THOMAS G. ROSE
PRESIDENT TREASURER
PAUL H. WICK FRANK J. NASTA
VICE PRESIDENT SECRETARY
- --------------------------------------------------------------------------------
MANAGER SHAREHOLDER SERVICE AGENT
J. & W. Seligman & Co. Incorporated Seligman Data Corp.
100 Park Avenue 100 Park Avenue
New York, NY 10017 New York, NY 10017
GENERAL COUNSEL IMPORTANT TELEPHONE NUMBERS
Sullivan & Cromwell (800) 221-2450 Shareholder Services
(800) 455-1777 Retirement Plan Services
INDEPENDENT AUDITORS (800) 622-4597 24-Hour Automated
Deloitte & Touche LLP Telephone Access Service
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
-17-
<PAGE>
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 12/95
