- --------------------------------------------------------------------------------
SELIGMAN
[PICTURE]
SELIGMAN
COMMUNICATIONS
AND INFORMATION
FUND, INC.
- --------------------------------------------------------------------------------
SEEKING CAPITAL GAIN BY INVESTING IN COMPANIES OPERATING IN ALL ASPECTS OF
COMMUNICATIONS, INFORMATION, AND RELATED INDUSTRIES.
JUNE 30, 1996 o MID-YEAR REPORT
<PAGE>
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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
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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 followed 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 40 investment 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 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 Motors, Victor Talking Machine, United Artists Theater Circuit, and
Maytag. In 1929, Seligman introduced Tri-Continental Corporation -- which today
is the nation's largest diversified closed-end investment company.
[PICTURE]
JAMES, JESSE, AND JOSEPH SELIGMAN
SELIGMAN COMMUNICATIONS
AND INFORMATION FUND
Seligman Communications and Information Fund, established June 23, 1983, seeks
capital gain 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
pursue their financial goals.
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<PAGE>
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FELLOW
SHAREHOLDERS
Seligman Communications and Information Fund had a difficult second
quarter, lagging both the Standard & Poor's 500 Composite Stock Price Index and
the Lipper Science & Technology Funds Average, as measured by Lipper Analytical
Services. Furthermore, in July, several important technology and health care
companies reported disappointing earnings which triggered a broad sell-off in
the equity markets and, more important, in the technology market. This mid-July
downturn had a negative impact on the Fund, although by the end of the month
much of the lost ground was regained.
The first half of 1996 witnessed market-wide sell-offs in technology
issues. The speculative enthusiasm that propelled an unprecedented number of
initial public offerings (IPOs) and pushed Internet stocks to record valuations
dissipated. Even successful companies with strong fundamentals suffered from the
"guilty by association" effect that took hold of market participants. The Fund's
performance was also impaired by its heavy weighting in the semiconductor,
semiconductor capital equipment, and printed circuit board areas. These
industries suffered from a slowdown in PC market growth, which led to an
oversupply of semiconductors. We believe this is not a long-term problem, and
expect demand to pick up once the historically weak summer months pass.
Additionally, the growth of the networking infrastructure industry, which is a
strong consumer of semiconductor products, should provide longer-term support to
these sectors.
Though the first half of 1996 was difficult for Seligman Communications and
Information Fund, we are optimistic about its long-term prospects. The Fund's
portfolio is diversified among a wider range of industries, and we continue to
invest in companies with solid business experience, real earnings, good
fundamentals, and highly proprietary products. Market valuations are currently
much more reasonable and many high-quality technology stocks are trading at
historically low levels. Accordingly, we view the current environment as a
buying opportunity that should enhance the Fund's long-term capital appreciation
potential.
Although the recent events in the technology market are disquieting, the
impact of this sector's short-term volatility can be counteracted by adopting a
long-term investment plan. Time is a powerful investment tool that succeeds
where market timing often fails. If you invest over the long term, short-term
market swings, while uncomfortable, have less of an impact on your overall
financial goals. With the help of your financial advisor, you can formulate a
long-term investment plan that reduces your risk and increases your
diversification.
For specific performance information and a discussion with your Portfolio
Manager about the second quarter of 1996, please refer to page 2.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
July 31, 1996
--
1
<PAGE>
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SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
[PICTURE]
SELIGMAN'S SMALL COMPANY AND TECHNOLOGY TEAM: FROM LEFT: (STANDING) LARRY ROSSO,
STORM BOSWICK, CAROLINE ROGERS, GUS SCACCO, AND TED HILLENMEYER; (SEATED) ARSEN
MRAKOVCIC, PAUL WICK (PORTFOLIO MANAGER), AND BRUCE ZIRMAN
A TEAM APPROACH
SELIGMAN COMMUNICATIONS AND INFORMATION FUND IS MANAGED BY SELIGMAN'S SMALL
COMPANY AND TECHNOLOGY TEAM, HEADED BY PAUL WICK. MR. WICK AND HIS TEAM OF
SEASONED RESEARCH PROFESSIONALS VISIT WITH THE MANAGEMENT OF HUNDREDS OF
TECHNOLOGY COMPANIES EACH YEAR TO IDENTIFY THOSE THAT OFFER THE GREATEST
POTENTIAL FOR GROWTH. STOCKS PURCHASED FOR THE FUND ARE CONTINUALLY MONITORED BY
THE TEAM, AND DISCIPLINED BUY AND SELL POLICIES ARE FOLLOWED.
INTERVIEW WITH PAUL WICK, PORTFOLIO MANAGER
Q. WHAT MAJOR FACTORS AFFECTED THE TECHNOLOGY INDUSTRY IN THE FIRST HALF OF THE
YEAR?
A. Arguably, the most significant factor was the surplus capacity in Dynamic
Random Access Memory (DRAM) chips created by surging Asian capital spending
and better-than-expected production yields at new, 16 megabit DRAM plants.
DRAMs are the primary memory chips in computers of all types. The oversupply
in the DRAM market helped shatter the shortage mentality that had become
prevalent in many other component markets, including programmable logic
chips, analog semiconductors, capacitors, and printed circuit boards. As a
result, computer and other electronic systems companies scaled back their
component inventory levels, in many cases from having six weeks' worth on
hand to only three. The repercussions in the global electronics industry have
been severe as diminished orders and shortened lead times have become
endemic. Not surprisingly, electronics companies throughout the world reduced
their 1996 capital spending plans, which had negative implications for
semiconductor equipment manufacturers.
Other factors that affected technology stocks through June include:
o The speculative bubble sweeping through Internet and other "hot" technology
stocks finally burst. Stocks such as Iomega, Netscape, Netcom, Presstek, and
Quarterdeck all had meteoric ascents and declines, as investors re-assessed
sky-high valuations. As a corollary, the frenetic pace of initial public
offerings (IPOs) finally hit a wall. Though 1995 was a record year for IPOs,
with more than 200 newly-minted public technology companies, the pace through
May 1996 was 50% higher, inundating prospective investors.
o Apple Computer's weak fundamentals and market share losses continued to hurt
its semiconductor and disk drive suppliers. Software developers for the Apple
platform, such as Macromedia and Adobe Systems, also have been affected.
o Macroeconomic weakness in Europe impacted the sales and earnings of many US
computer hardware companies. The US Dollar's strength exacerbated the problem
as foreign currency denominated sales translated back into US Dollars at less
favorable rates.
While Seligman Communications and Information Fund has generally had little
exposure to IPOs and Internet stocks in the past year, the Fund was hurt by
its holdings in the semiconductor, semiconductor capital equipment, and
printed circuit board areas.
Q. WHICH INDUSTRY GROUPS AND STOCKS DID WELL?
A. The healthiest sector within technology continues to be communications
infrastructure. As computers proliferate throughout homes and businesses
around the world, large investments are being made to link them together into
intelligent networks. Explosive growth in the Internet has fueled this trend
and should continue to do so for years to come. In addition to the strong
growth seen in data networks, wireless telephones and paging infrastructure
investments show no signs of slowing.
- --
2
<PAGE>
- --------------------------------------------------------------------------------
Several of the Fund's best performers year to date are in the communications
infrastructure area, including Cisco Systems, StrataCom, and U.S. Robotics.
In spite of the positive backdrop, two of the Fund's holdings, Bay Networks
and Madge Networks, performed poorly due to unexpected integration problems
that resulted from recent mergers.
Q. WHAT IS THE OUTLOOK FOR THE COMPUTER INDUSTRY?
A. The computer hardware and peripherals industry is actually quite healthy. For
example, the PC industry is expected to grow 18% in units this year, from 64
million units in 1995, to 75 million units. While this rate of growth is
slower than 1995's 25%, it is significantly faster than that of most mass
markets. Other areas of the industry demonstrating robust fundamentals
include computer workstations and servers, mainframe computers, color
copiers, and data storage.
Q. HOW IS THE FUND CURRENTLY POSITIONED?
A. The Fund is more balanced in its industry weightings than it was a year ago.
For example, the Fund has a much smaller exposure to the
semiconductor-related area, and commensurately higher exposure to software,
communications infrastructure, and media. Our cash position presently is 8%,
but we aim to be fully invested in anticipation of a rebound in technology
stock prices in the fourth quarter.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. With Europe seasonally weak due to summer vacations, third quarter
fundamentals are likely to remain uninspiring for many technology companies.
Capital spending on new semiconductor plants peaked in the second quarter and
is unlikely to resume growth until 1997. In addition, the inventory
adjustment that has shaken much of the components industry to date will
probably linger throughout the third quarter.
Nevertheless, we are optimistic about the outlook for the fourth quarter.
Historically, the fourth quarter has been seasonally strong for technology
stocks as they respond to a rebounding Europe, pre-holiday purchasing, and
corporations' "use it or lose it" budgeting approach to information
technology spending. Moreover, while we are not bullish about DRAM memory
stocks at this point, the semiconductor book-to-bill ratio could improve
significantly through the fourth quarter, setting the stage for a general
improvement in investor psychology regarding technology stocks.
Finally, we are quite optimistic regarding the valuations in many areas of
technology. By historical standards, many of the technology companies in the
Fund are trading at low absolute, and relative, valuations. We therefore
remain positive on the risk/reward outlook for the medium- to long-term
investor.
--
3
<PAGE>
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SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
INVESTMENT RESULTS
TOTAL RETURNS*
FOR PERIODS ENDED JUNE 30, 1996
AVERAGE ANNUAL
----------------------------------
CLASS B CLASS D
SINCE SINCE
INCEPTION THREE SIX ONE FIVE 10 INCEPTION
4/22/96 MONTHS MONTHS YEAR YEARS YEARS 5/3/93
--------- ------ ------ ------- ------ ------- ---------
CLASS A
With Sales
Charge n/a (4.62)% (9.74)% (12.56)% 29.21% 18.90% n/a
Without Sales
Charge n/a 0.14 (5.23) (8.20) 30.48 19.48 n/a
CLASS B
With 5% CDSL (10.96)% n/a n/a n/a n/a n/a n/a
Without CDSL (6.28) n/a n/a n/a n/a n/a n/a
CLASS D
With 1% CDSL n/a (1.00) (6.52) (9.67) n/a n/a n/a
Without CDSL n/a -- (5.57) (8.83) n/a n/a 32.40%
S&P 500** 2.97+ 4.49 10.10 26.00 15.73 13.79 17.32++
LIPPER
SCIENCE &
TECHNOLOGY
FUNDS
AVERAGE*** (3.22)+ 7.11 7.89 15.56 24.57 15.57 24.87++
NET ASSET VALUE PER SHARE
JUNE 30, 1996 MARCH 31, 1996 DECEMBER 31, 1995
------------- -------------- -----------------
CLASS A $20.84 $20.81 $21.99
CLASS B 20.16 21.510 n/a
CLASS D 20.16 20.16 21.35
CAPITAL GAIN INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CAPITAL GAIN (LOSS)
-----------------------------------
REALIZED UNREALIZED+++
-------------- --------------
CLASS A $0.735 $(0.932)
CLASS B $0.735 $(0.932)
CLASS D $0.735 $(0.932)
A fund that concentrates its investments in one economic sector may be subject
to greater share price fluctuations than a more diversified fund.
* 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 and with 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. Returns for Class B shares are calculated without and with the
effect of the maximum 5% contingent deferred sales load ("CDSL"), charged
only on certain redemptions made within one year of the date of purchase,
declining to 1% in the sixth year and 0% thereafter. Returns for Class D
shares are calculated without and with the effect of the 1% CDSL, charged
only on redemptions made within one year of the date of purchase. The rates
of return will vary and the principal value of an investment will fluctuate.
Shares, if redeemed, may be worth more or less than their original cost.
Past performance is not indicative of future investment results.
** The S&P 500 is an unmanaged index that assumes reinvestment of estimated
dividends, and does not reflect fees and expenses. Investors may not invest
directly in an index.
*** The Lipper Science & Technology Funds Average is an average of 40 Science
and Technology Funds and does not reflect commissions that may be incurred
in connection with purchases or sales. Investors may not invest directly in
an average.
0 As of April 22, 1996.
+ From April 30, 1996.
++ From April 30, 1993.
+++ Represents the per share amount of net unrealized depreciation of portfolio
securities as of June 30, 1996.
- --
4
<PAGE>
- --------------------------------------------------------------------------------
PERFORMANCE
SELIGMAN COMMUNICATIONS
AND INFORMATION FUND
CLASS A -- GROWTH OF A
$10,000 INVESTMENT
JUNE 30, 1986, TO JUNE 30, 1996
[The following table represents a graph in the printed piece.]
CLASS A
$9,522
Initial Net Asset Value
1986 9522.39
1986 8335.82
1986 8756.69
1987 11355.25
1987 11693.52
1987 12769.85
1987 10071.32
1988 10367.82
1988 11089.32
1988 10407.36
1988 10809.84
1989 11700.82
1989 12806.5
1989 14384.5
1989 14065.56
1990 14830.75
1990 16041.14
1990 11046.54
1990 12508.49
1991 16908.32
1991 14934.04
1991 17133.95
1991 19376.23
1992 20012.62
1992 17986.24
1992 18053.22
1992 22730.86
1993 23045.02
1993 25927.96
1993 29938.2
1994 31995.61
1993 30714.87
1994 32064.22
1994 29594.22
1994 38399.3
1994 41557.32
1995 47401.32
1995 61511.82
1995 69628.49
1995 59587.05
1996 56389.56
1996 56470.86
$56,471
Total Value at
June 30, 1996
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
12 MONTHS ENDED 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
- --------------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
JUNE 30
PER SHARE VALUE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value (NAV) $ 15.21 $ 11.22 $ 11.93 $ 11.53 $ 10.59 $ 10.74 $ 14.03 $ 12.94 $ 24.63 $ 20.84
Gain Distribution $ .35 $ 2.83 $ .85 $ 2.91 $ .12 $ 2.05 $ 1.24 $ 3.10 $ 1.46 $ 1.91
NAV with Gain Distributions
taken in shares $ 15.67 $ 14.86 $ 17.16 $ 21.50 $ 20.01 $ 24.10 $ 34.74 $ 39.66 $ 82.43 $ 75.67
TOTAL VALUE AT JUNE 30 $11,694 $11,089 $12,807 $16,041 $14,934 $17,986 $25,928 $29,594 $61,512 $56,471
ANNUAL TOTAL RETURN* 16.94%+ (5.17)% 15.49% 25.26% (6.90)% 20.43% 44.15% 14.14% 107.85% (8.20)%
+Includes the effect of the initial 4.75% maximum sales charge.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SELIGMAN COMMUNICATIONS
AND INFORMATION FUND
CLASS D -- GROWTH OF A
$10,000 INVESTMENT
MAY 3, 1993, TO JUNE 30, 1996
[The following table represents a graph in the printed piece.]
CLASS D
$10,000
Initial Net
Asset Value
5/3/93 9999.99
6/30/93 11470.58
9/30/93 13186.27
12/31/93 13489.40
3/31/94 14036.27
6/30/94 12922.28
9/30/94 16740.23
12/31/94 18067.27
3/31/95 20570.77
6/30/95 26641.20
9/30/95 30108.43
12/31/95 25721.73
3/31/96 24288.06
6/30/96 24288.06
$24,288
Total Value at
June 30, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
12 MONTHS ENDED JUNE 30 1993 1994 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
PER SHARE VALUE
NET ASSET VALUE (NAV) $ 14.04 $ 12.76 $ 24.05 $ 20.16
Gain Distribution -- $ 3.10 $ 1.46 $ 1.91
NAV with gain distributions
taken in shares $ 14.04 $ 15.82 $ 32.61 $ 29.73
Total Value at June 30 $11,471 $12,922 $26,641 $24,288
Annual Total Return
without CDSL* 14.71%+ 12.65% 106.16% (8.83)%
+5/3/93 to 6/30/93.
</TABLE>
- --------------------------------------------------------------------------------
A fund that concentrates its investments in one economic sector may be subject
to greater share price fluctuations than a more diversified fund.
* 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 the effect of the initial 4.75% maximum sales charge
(NAV). 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 Class D shares are calculated without the effect of the 1%
contingent deferred sales load (CDSL), charged only on redemptions made within
one year of the date of purchase. 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.
--
5
<PAGE>
SELIGMAN
COMMUNICATIONS AND
INFORMATION FUND, INC.
LARGEST PORTFOLIO CHANGES
DURING PAST THREE MONTHS
SHARES
-----------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/96
- --------------------------------------------------------------------------------
America Online .............................. 750,000 750,000
American Telephone &
Telegraph ................................. 700,000 700,000
C-Cube Microsystems ......................... 1,100,000 1,100,000
CompuServe .................................. 1,000,000 1,000,000
Hewlett-Packard 200,000 200,000
Madge Networks .............................. 1,000,000 1,000,000
News Corp. (ADRs-
Voting Preference Shares) ................. 1,450,000 1,450,000
Sterling Software ........................... 300,000 300,000
Western Digital 1,000,000 1,000,000
Xerox ....................................... 250,000 1,200,000+
HOLDINGS
REDUCTIONS DECREASE 6/30/96
- --------------------------------------------------------------------------------
Altera ...................................... 1,100,000 --
Dialogic .................................... 400,000 --
Electronics for Imaging 1,150,000 ........... 500,000
Lam Research ................................ 542,500 700,000
Linear Technology ........................... 650,000 500,000
LSI Logic ................................... 1,600,000 --
Netmanage ................................... 1,649,200 --
Octel Communications ........................ 550,000 --
Parametric Technology ....................... 375,000 1,700,000
Teradyne .................................... 1,100,000 --
Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
+ Includes 800,000 shares received as a result of a 3-for-1 stock split.
MAJOR PORTFOLIO HOLDINGS
AT JUNE 30, 1996
SECURITY VALUE
- ----------------------------------
Intel $102,812,500
EMC 93,125,000
Cisco Systems 85,031,250
Parametric Technology 73,631,250
Xilinx 72,881,250
Synopsys 71,775,000
Xerox 64,200,000
3Com 59,393,750
Atmel 57,356,250
Glenayre Technologies 54,931,250
MAJOR SECTORS
AT JUNE 30, 1996
[The following table represents a pie chart in the printed piece.]
Contract Manufacturing/Circuit Boards 2.7%
Semiconductor Capital Equipment 8.0%
Computer Software 16.3%
Computer Hardware/Peripherals 16.6%
Communications Infrastructure 17.3%
Semiconductors 19.5%
Other 19.6%
- --
6
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996
SHARES VALUE
--------- -------
COMMON STOCKS 91.9%
COMMUNICATIONS
INFRASTRUCTURE 17.6%
BAY NETWORKS*
Supplier of switches, routers,
and hubs for local area
computer networks 1,600,000 $ 41,200,000
CABLETRON SYSTEMS*
Manufacturer of computer
interconnection equipment 700,000 48,037,500
CIDCO*
Caller identification systems
and telephones 1,500,000 52,875,000
CISCO SYSTEMS*
Computer network routers 1,500,000 85,031,250
DIGI INTERNATIONAL*
Data communications hardware
and software 300,000 7,950,000
ECI TELECOMMUNICATIONS
Provider of digital
telecommunications and data
transmissions systems 1,700,000 39,418,750
FORE SYSTEMS*
Manufacturer of ATM
network products 400,000 14,425,000
GLENAYRE TECHNOLOGIES*
Manufacturer of paging
infrastructure equipment 1,100,000 54,931,250
MADGE NETWORKS*
Worldwide supplier of
switched networking solutions
for the enterprise 1,000,000 14,750,000
NETWORK GENERAL*
Developer of network
diagnostic software 400,000 8,550,000
OAK INDUSTRIES
Manufacturer of cable
television connectors 400,000 11,850,000
STRATACOM*
Manufacturer of wide area
network switches 700,000 39,506,250
3COM*
Supplier of adapter cards, hubs,
and routers for local area
computer networks 1,300,000 59,393,750
U.S. ROBOTICS
Modems and remote access routers 200,000 17,075,000
-------------
494,993,750
-------------
COMPUTER HARDWARE/
PERIPHERALS 16.9%
ADAPTEC*
Computer input/output systems 700,000 33,118,750
DELL COMPUTER*
Manufacturer of
Intel-based PCs 250,000 12,703,125
ELECTRONICS FOR IMAGING*
Peripherals for color copiers 500,000 34,718,750
EMC*
Enterprise storage devices 5,000,000 93,125,000
HEWLETT-PACKARD
Computers and peripherals 200,000 19,925,000
KOMAG*
Manufacturer of thin film
magnetic media for hard-
disk drives 1,700,000 44,625,000
LEXMARK INTERNATIONAL GROUP (CLASS A)*
Manufacturer of laser and
inkjet printers and cartridges 1,600,000 32,200,000
SEAGATE TECHNOLOGY*
Global hard-disk drive supplier 1,100,000 49,500,000
Data storage equipment 300,000 11,475,000
SUN MICROSYSTEMS*
Marketer of networked workstations 100,000 5,887,500
TEKTRONIX
Color printers, digital video
storage, and test and
measurement equipment 850,000 38,037,500
VICOR*
Manufacturer of modular power
converters 400,000 9,325,000
WESTERN DIGITAL
Global supplier of
hard-disk drives 1,000,000 26,125,000
XEROX
Copiers and other
office equipment 1,200,000 64,200,000
-------------
474,965,625
-------------
COMPUTER SOFTWARE 16.5%
ACTIVISION*
Entertainment software 694,600 9,073,212
ANSYS*
Engineering analysis 500,000 6,593,750
ASPEN TECHNOLOGY
Producer of chemical
engineering software products 100,000 5,512,500
BMC SOFTWARE*
Developer of utility software 250,000 14,906,250
CADENCE DESIGN SYSTEMS*
Electronic design automation software 450,000 15,187,500
HUMMINGBIRD COMMUNICATIONS*
X-Windows networking software 550,000 16,706,250
INFORMIX*
Developer of database
management systems 1,800,000 40,387,500
--
7
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
JUNE 30, 1996
SHARES VALUE
--------- -------
COMPUTER SOFTWARE (CONTINUED)
MENTOR GRAPHICS
Electronic design
automation software 2,700,000 $ 43,706,250
MICROSOFT*
Personal computer software 350,000 42,021,875
ORACLE SYSTEMS*
Database management
software systems 1,200,000 47,325,000
PARAMETRIC TECHNOLOGY*
Developer of mechanical
design software 1,700,000 73,631,250
STERLING SOFTWARE
Mainframe software 300,000 23,100,000
STRUCTURAL DYNAMICS RESEARCH*
Developer of mechanical
design software 600,000 13,125,000
SUNGARD DATA SYSTEMS*
Financial services application
software and computer
disaster recovery services 400,000 16,025,000
SYNOPSYS*
Integrated circuit
design software 1,800,000 71,775,000
3DO*
Developer of video game software and
game platforms 2,200,000 23,375,000
WONDERWARE*
Manufacturing resource planning
software 200,000 3,800,000
-------------
466,251,337
-------------
CONTRACT MANUFACTURING/
CIRCUIT BOARDS 2.7%
ADFLEX SOLUTIONS
Flexible circuit boards 850,000 9,031,250
ALTRON*
Electronic circuit boards 440,400 8,863,050
HADCO*
Printed circuit boards 1,050,000 22,312,500
MERIX *
Electronic circuit boards 600,000 11,925,000
PRAEGITZER INDUSTRIES
Advanced printed circuit boards 170,300 1,862,656
SANMINA*
Assembler of
electronic circuit boards 250,000 6,750,000
SCI SYSTEMS*
Assembler of electronic
circuit boards 400,000 16,275,000
-------------
77,019,456
-------------
INFORMATION SERVICES 1.2%
FIRST DATA
Credit card processing services 200,000 15,925,000
GARTNER GROUP (CLASS A)*
Research and analysis of
information technology industries 185,000 6,787,188
METROMAIL
Direct mail marketing
information services 500,000 11,187,500
-------------
33,899,688
-------------
INTERNET/ON-LINE 1.9%
AMERICA ONLINE*
Interactive/Internet services 750,000 32,718,750
COMPUSERVE*
Interactive/Internet services 1,000,000 21,125,000
-------------
53,843,750
-------------
PUBLISHING 1.7%
K-III COMMUNICATIONS*
Education and print media 1,500,000 18,750,000
NEWS CORP. (ADRS -- VOTING
PREFERENCE SHARES)
Global media company with
interests in TV networks,
newspapers, and film studios 1,450,000 29,181,250
-------------
47,931,250
-------------
SEMICONDUCTORS 19.8%
ANALOG DEVICES*
Analog semiconductors and
digital signal processors 1,000,000 25,500,000
ATMEL*
Manufacturer of non-volatile
memory circuits 1,900,000 57,356,250
C-CUBE MICROSYSTEMS*
Video compression circuits 1,100,000 36,368,750
INTEL
World's leading producer of
microprocessor circuits for PCs 1,400,000 102,812,500
INTERNATIONAL RECTIFIER*
Power semiconductors 1,800,000 29,025,000
LATTICE SEMICONDUCTOR*
Programmable logic devices 1,900,000 45,837,500
LINEAR TECHNOLOGY
Analog integrated circuits 500,000 14,968,750
MAXIM INTEGRATED PRODUCTS*
Linear and mixed-signal
integrated circuits 1,400,000 38,237,500
MICROCHIP TECHNOLOGY*
Field programmable
microcontrollers 2,000,000 50,000,000
OAK TECHNOLOGY*
Audio and CD-ROM
controller circuits 2,224,200 20,990,887
S3*
Supplier of multi-media
acceleration solutions for PCs 1,300,000 16,087,500
TOWER SEMICONDUCTOR*
Semiconductor foundry services 1,164,000 10,912,500
XILINX*
Field programmable gate arrays 2,300,000 72,881,250
- --
8
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
JUNE 30, 1996
SHARES VALUE
--------- -------
ZILOG*
Application-specific
microcontrollers 1,494,000 $ 35,856,000
--------------
556,834,387
--------------
SEMICONDUCTOR CAPITAL
EQUIPMENT 8.1%
ASYST TECHNOLOGIES*
Miniature clean-room environment
devices for the manufacture
of silicon wafers 500,000 8,937,500
CREDENCE SYSTEMS*
Semiconductor test equipment 1,800,000 24,187,500
ELECTROGLAS*
Semiconductor prober devices 1,652,500 23,444,844
ETEC SYSTEMS*
Photomask manufacturing
systems 600,000 13,275,000
KLA INSTRUMENTS*
Wafer inspection systems 1,200,000 27,825,000
LAM RESEARCH*
Plasma etching equipment 700,000 18,156,250
NOVELLUS SYSTEMS*
Chemical vapor deposition
equipment 905,000 32,806,250
SILICON VALLEY GROUP*
Vertical furnaces and
photolithography equipment 1,200,000 22,575,000
TENCOR INSTRUMENTS*
Wafer inspection systems 2,200,000 41,250,000
ULTRATECH STEPPER*
Photolithography systems for
the manufacture of semi-
conductors and their film
recording heads 885,000 16,538,438
--------------
228,995,782
--------------
TELECOMMUNICATIONS 2.3%
AMERICAN TELEPHONE & TELEGRAPH
International and domestic
telecommunications services 700,000 43,400,000
METROMEDIA INTERNATIONAL GROUP
Wireless cable TV and
telephone services in
Eastern Europe 1,000,000 12,250,000
MILLICOM INTERNATIONAL CELLULAR*
Cellular telephone service in
developing countries 200,000 9,462,500
--------------
65,112,500
--------------
SHARES OR
PRIN. AMT. VALUE
--------- -------
MISCELLANEOUS 3.2%
COGNEX*
Manufacturer of machine vision
systems 2,000,000 shs. 32,625,000
ELECTRO SCIENTIFIC INDUSTRIES*
Capacitor production systems
and memory chip repair devices 800,000 16,500,000
FUSION SYSTEMS*
Ultraviolet curing and photo-resist
strip systems 590,000 14,897,500
VANSTAR*
PC network infrastructure
services 1,600,000 26,800,000
--------------
90,822,500
--------------
TOTAL COMMON STOCKS
(Cost $2,721,129,279) 2,590,670,025
--------------
CONVERTIBLE PREFERRED
STOCKS 0.7%
(Cost $17,500,000)
BROADCASTING 0.7%
AMERICAN RADIO SYSTEMS 7%+ 350,000 20,825,000
--------------
SHORT-TERM
HOLDINGS 8.7%
CANADIAN IMPERIAL BANK OF
COMMERCE, GRAND CAYMAN,
FIXED TIME DEPOSIT,
51/2%, 7/1/1996 $120,200,000 120,200,000
FIRST NATIONAL BANK OF CHICAGO,
GRAND CAYMAN, FIXED TIME
DEPOSIT, 51/2%, 7/1/1996 125,000,000 125,000,000
TOTAL SHORT-TERM HOLDINGS
(Cost $245,200,000) 245,200,000
--------------
TOTAL INVESTMENTS 101.3%
(Cost $2,983,829,279) 2,856,695,025
OTHER ASSETS
LESS LIABILITIES (1.3)% (36,720,944)
--------------
NET ASSETS 100.0% $2,819,974,081
==============
- -------------------------
* Non-income producing security.
+ Rule 144A security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
--
9
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
ASSETS:
Investments, at value:
Common stocks and
convertible securities
(cost $2,738,629,279) $ 2,611,495,025
Short-term holdings (cost $245,200,000) 245,200,000 $ 2,856,695,025
---------------
Cash 5,405,328
Receivable for Capital Stock sold 13,908,792
Receivable for securities sold 4,575,714
Expenses prepaid to shareholder service agent 1,218,713
Receivable for interest and dividends 721,383
Other 1,056,491
---------------
Total Assets 2,883,581,446
---------------
LIABILITIES:
Payable for securities purchased 50,875,930
Payable for Capital Stock repurchased 8,166,933
Accrued expenses, taxes, and other 4,564,502
---------------
Total Liabilities 63,607,365
---------------
NET ASSETS $ 2,819,974,081
===============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($.10 par value;
1,000,000,000 shares authorized;
136,406,677 shares outstanding):
Class A $ 10,250,120
Class B 171,099
Class D 3,219,448
Additional paid-in capital 2,797,258,471
Accumulated net investment loss (18,057,733)
Undistributed net realized gain 154,266,930
Net unrealized depreciation of investments (127,134,254)
---------------
NET ASSETS $ 2,819,974,081
===============
NET ASSET VALUE PER SHARE:
CLASS A ($2,136,530,597 / 102,501,200 SHARES) $20.84
======
CLASS B ($34,499,605 / 1,710,994 SHARES) $20.16
======
CLASS D ($648,943,879 / 32,194,483 SHARES) $20.16
======
- ---------------------------------------
See notes to financial statements
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 1996
INVESTMENT INCOME:
Interest $ 6,355,764
Dividends 1,532,000
Other income 20,551
-------------
Total investment income $ 7,908,315
EXPENSES:
Management fee 12,181,900
Distribution and service fees 6,085,223
Shareholder account services 6,076,374
Shareholder reports and communications 571,888
Registration 326,100
Custody and related services 269,500
Shareholders' meeting 243,317
Auditing and legal fees 62,384
Directors' fees and expenses 30,911
Miscellaneous 33,526
-------------
Total expenses 25,881,123
-------------
NET INVESTMENT LOSS (17,972,808)
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 100,225,367
Net change in unrealized appreciation
of investments (244,674,713)
-------------
NET LOSS ON INVESTMENTS (144,449,346)
-------------
DECREASE IN NET ASSETS FROM OPERATIONS $(162,422,154)
=============
- ---------------------------------------
See notes to financial statements
- --
10
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
--------------- ------------------
OPERATIONS:
Net investment loss $ (17,972,808) $ (28,171,024)
Net realized gain on investments 100,225,367 286,492,658
Net change in unrealized appreciation
of investments (244,674,713) 57,543,372
------------- -------------
Increase (decrease) in net assets
from operations (162,422,154) 315,865,006
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A -- (154,214,314)
Class D -- (50,053,285)
------------- -------------
Decrease in net assets
from distributions -- (204,267,599)
------------- -------------
<TABLE>
<CAPTION>
SHARES
------------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
---------------- -----------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:*
Net proceeds from sale of shares:
Class A 24,363,166 76,561,941 534,996,886 1,737,333,556
Class B 1,728,804 -- 38,181,769 --
Class D 7,779,506 25,510,043 165,807,307 562,173,487
Exchanged from associated Funds:
Class A 14,046,212 13,483,088 306,709,345 330,495,561
Class B 5,801 -- 123,704 --
Class D 1,636,959 2,341,411 34,622,939 56,510,269
Shares issued in payment of gain distributions:
Class A -- 6,353,670 -- 142,362,980
Class D -- 2,144,837 -- 46,674,570
--------------- --------------- --------------- ---------------
Total 49,560,448 126,394,990 1,080,441,950 2,875,550,423
--------------- --------------- --------------- ---------------
Cost of shares repurchased:
Class A (9,404,716) (11,847,319) (204,926,611) (290,139,169)
Class B (7,377) -- (162,471) --
Class D (3,394,646) (3,422,232) (71,763,605) (83,392,097)
Exchanged into associated Funds:
Class A (14,749,578) (14,791,476) (321,610,700) (372,155,193)
Class B (16,234) -- (349,603) --
Class D (2,374,166) (3,918,130) (49,257,543) (95,078,586)
--------------- --------------- --------------- ---------------
Total (29,946,717) (33,979,157) (648,070,533) (840,765,045)
--------------- --------------- --------------- ---------------
Increase in net assets from capital
share transactions 19,613,731 92,415,833 432,371,417 2,034,785,378
=============== =============== --------------- ---------------
Increase in net assets 269,949,263 2,146,382,785
NET ASSETS:
Beginning of period 2,550,024,818 403,642,033
--------------- ---------------
End of period (including accumulated net investment loss of
$18,057,733 and $84,925, respectively) $ 2,819,974,081 $ 2,550,024,818
=============== ===============
</TABLE>
- ------------------------------------------
* The Fund began offering Class B shares on April 22, 1996.
See notes to financial statements
--
11
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Seligman Communications and Information Fund, Inc. (the "Fund") offers three
classes of shares. All shares existing prior to May 3, 1993, the commencement of
Class D shares, were classified as Class A shares. The Fund began offering Class
B shares on April 22, 1996. 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 B 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"), if applicable, of 5% on
redemptions in the first year after purchase, declining to 1% in the sixth year
and 0% thereafter. Class B shares will automatically convert to Class A shares
on the last day of the month that precedes the eighth anniversary of their date
of purchase. 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 CDSL of 1% imposed on certain redemptions made within one
year of purchase. The three classes of shares represent interests in the same
portfolio of investments, have the same rights and are generally identical in
all respects except that each class bears its separate distribution and certain
other class expenses, and has exclusive voting rights with respect to any matter
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 convertible securities and 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. For the
six months ended June 30, 1996, distribution and service fees were the only
class- specific expenses.
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 US Government
obligations and short-term investments, for the six months ended June 30, 1996,
amounted to $1,743,821,799 and $1,497,590,341, respectively.
At June 30, 1996, 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 $275,292,384 and $402,426,638, 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. Effective February 8, 1996, the Manager receives a fee,
calculated daily and payable monthly, equal to 0.90% of the first $3 billion of
the Fund's average daily net assets, 0.85% per annum of the next $3 billion of
the Fund's average daily net assets and 0.75% per annum of the Fund's average
daily net assets in excess of $6 billion. Prior to February 8, 1996, the
management fee rate was 0.75% per annum of the Fund's average daily net assets.
The management fee reflected in the Statement of Operations represents 0.87% per
annum of Fund's average daily net assets.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
concessions of $2,346,314 from sales of Class A shares, after commissions of
$19,154,395 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 six months ended June 30, 1996, fees incurred aggregated
$2,759,811, or 0.25% per annum of the average daily net assets of Class A
shares.
The Fund has a Plan with respect to Class B and 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 B and Class D shares for which the organizations are
responsible; and, for Class D share only, fees for providing other distribution
assistance of up to 0.75% on an annual basis of such average daily net assets.
Such fees are paid monthly by the Fund to the Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of up to 0.75% on an
annual basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to substantially all
- --
12
<PAGE>
- --------------------------------------------------------------------------------
of this fee to a third party (the "Purchaser"), which provided funding to the
Distributor to enable it to pay commissions to dealers at the time of the sale
of the related Class B shares.
For the six months ended June 30, 1996, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B and Class
D shares, amounted to $36,012 and $3,289,400, respectively.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions of Class D shares occurring within one year of purchase. For the six
months ended June 30, 1996, such charges amounted to $373,034.
The Distributor has sold its rights to collect any CDSL imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSL and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class B shares sold. The aggregate amount of such payments
and the Class B share distribution fees retained by the Distributor for the six
months ended June 30, 1996, amounted to $90,750.
Seligman Services, Inc., an affiliate of the Manager, is eligible to
receive commissions from certain sales of shares of the Fund, as well as
distribution and service fees pursuant to the Plan. For the six months ended
June 30, 1996, Seligman Services, Inc. received commissions of $563,055 from the
sales of shares of the Fund. Seligman Services, Inc. also received distribution
and service fees of $303,614 pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $6,068,378 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 $30,000 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 cost of such fees and interest is included in directors' fees and
expenses and the accumulated balance thereof at June 30, 1996, of $93,360 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. Effective July 31, 1996, the Fund entered into a $280 million committed line
of credit facility with a group of banks. Borrowings pursuant to the credit
facility will be subject to interest at a rate equal to the federal funds rate
plus .75% per annum. The Fund will incur a commitment fee of .10% per annum on
the unused portion of the credit facility. The credit facility may be drawn upon
only for temporary purposes and is subject to certain other customary
restrictions. The credit facility commitment expires one year from the date of
the agreement but is renewable with the consent of the participating banks.
--
13
<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 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.
Average commission rate paid represents the average commission paid by the
Fund to purchase or sell portfolio securities. It is determined by dividing the
total commission dollars paid by the number of shares purchased and sold during
the period for which commissions were paid. This rate is provided for periods
beginning January 1, 1996.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS D
-------------------------------------------------------- -------- -------------------------------------
SIX SIX YEAR ENDED
MONTHS YEAR ENDED DECEMBER 31, 4/22/96* MONTHS DECEMBER 31 5/3/93*
ENDED ------------------------------------------ TO ENDED -------------- TO
6/30/96o 1995o 1994o 1993 1992 1991 6/30/96o 6/30/96o 1995o 1994o 12/31/93
-------- ------ ------ ------ ------ ------ -------- -------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period $21.99 $16.64 $13.43 $12.30 $11.57 $ 8.87 $21.51 $21.35 $16.31 $13.32 $12.24
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment loss (0.12) (0.33) (0.19) (0.14) (0.12) (0.12) (0.05) (0.20) (0.50) (0.33) (0.05)
Net realized and
unrealized
investment
gain (loss) (1.03) 7.59 4.86 4.37 2.09 4.87 (1.30) (0.99) 7.45 4.78 4.23
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Increase (decrease)
from investment
operations (1.15) 7.26 4.67 4.23 1.97 4.75 (1.35) (1.19) 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
(decrease) in
net asset value (1.15) 5.35 3.21 1.13 0.73 2.70 (1.35) (1.19) 5.04 2.99 1.08
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period $20.84 $21.99 $16.64 $13.43 $12.30 $11.57 $20.16 $20.16 $21.35 $16.31 $13.32
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE: (5.23)% 43.39% 35.30% 35.13% 17.31% 54.91% (6.28)% (5.57)% 42.37% 33.94% 34.89%
RATIOS/SUPPLEMENTAL
DATA:
Expenses to average
net assets 1.67%+ 1.61% 1.65% 1.63% 1.51% 1.69% 2.50%+ 2.42%+ 2.37% 2.50% 2.56%+
Net investment
loss to average
net assets (1.11)%+ (1.31)% (1.27)% (1.39)% (1.18)% (1.23)% (1.77)% + (1.85)%+ (2.07)% (2.20)% (2.33)%+
Portfolio turnover 57.38% 65.77% 104.08% 137.10% 110.42% 107.72% 57.38%+++ 57.38% 65.77% 104.08% 137.10%++
Average commission
rate paid $.0523 $.0523+++ $.0523
Net assets,
end of period
(000's omitted) $2,136,530 $1,940,693 $307,542 $92,987 $57,001 $50,175 $34,500 $648,944 $609,332 $96,100 $7,833
</TABLE>
- -------------------
* Commencement of offering of shares.
o Per share amounts for the periods ended June 30, 1996, and for the years
ended December 31, 1995, and 1994, are calculated based on average shares
outstanding.
+ Annualized.
++ For the year ended December 31, 1993.
+++ For the six months ended June 30, 1996.
See notes to financial statements.
- --
14
<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 June 30, 1996, the related statements of operations for the six
months then ended and of changes in net assets for the six months then ended and
for the year ended December 31, 1995, and the financial highlights for each of
the periods presented. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996, 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 June 30, 1996, 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
July 31, 1996
- --------------------------------------------------------------------------------
--
15
<PAGE>
- --------------------------------------------------------------------------------
PROXY RESULTS
Seligman Communications and Information Fund Shareholders voted on the following
proposals at the Special Meeting of Shareholders held on February 7, 1996, in
New York, New York. Each Director was elected, and all other proposals were
approved. The description of each proposal and number of shares voted are as
follows:
FOR WITHHELD
--- ---------
Election of Directors:
Fred E. Brown 52,395,724 1,346,209
John R. Galvin 52,339,130 1,403,030
Alice S. Ilchman 52,390,402 1,351,024
Frank A. McPherson 52,358,914 1,382,012
John E. Merow 52,429,175 1,312,270
Betsy S. Michel 52,430,648 1,310,805
William C. Morris 52,439,900 1,301,558
James C. Pitney 52,427,642 1,313,806
James Q. Riordan 52,405,219 1,336,188
Ronald T. Schroeder 52,444,302 1,297,165
Robert L. Shafer 52,442,378 1,299,081
James N. Whitson 52,440,430 1,301,033
Brian T. Zino 52,437,938 1,303,517
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTE
--- --------- --------- ----------
<S> <C> <C> <C> <C>
Ratification of Deloitte & Touche LLP as
independent auditors: 50,537,983 849,289 2,353,345 n/a
Approval of amendment to the Management
Agreement to increase management fee
payable by the Fund: 36,043,641 14,393,114 3,247,677 57,501
Approval of amendment to the Subadvisory
Agreement to increase the subadvisory fee payable
by J. & W. Seligman & Co. Incorporated: 36,160,042 13,953,378 3,571,764 56,749
Approval of amendment of Fund's fundamental
investment policy with respect to investments in
put options: 43,996,822 5,753,402 3,680,373 311,336
Approval of amendment of Fund's fundamental
investment policy to permit mortgaging or
pledging of its assets: 42,501,522 6,991,924 4,158,590 89,897
Approval of amendment of Fund's fundamental
investment policy with respect to investments in
real estate investment trusts: 43,248,573 6,143,182 4,038,878 311,300
</TABLE>
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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
Director or Trustee,
Various Organizations
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
CHAIRMAN
BRIAN T. ZINO
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) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour
Automated
Telephone Access
Service
- --------------------------------------------------------------------------------
<PAGE>
SELIGMAN FINANCIAL SERVICES
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.
EQCI3b 6/96
[Recycle Logo]
Printed on Recycled Paper
<PAGE>
