- --------------------------------------------------------------------------------
FIRST QUARTER REPORT
- --------------------------------------------------------------------------------
SELIGMAN
COMMUNICATIONS
AND INFORMATION
FUND, INC.
MARCH 31, 1996
(LOGO)
- --------------------------------------------------------------------------------
A CAPITAL GAIN FUND
ESTABLISHED IN 1983
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.
EQCI3a 3/96
<PAGE>
================================================================================
TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Seligman Communications and Information Fund underperformed in the first
quarter of 1996 relative to both the Standard & Poor's 500 Composite Stock Price
Index and the Lipper Science & Technology Funds Average, which measures the
performance of 40 science and technology funds. For long-term performance
information, please refer to the table that follows the portfolio.
Your Fund's net realized gain from investment transactions for both Class A
and D shares for the three months ended March 31, 1996, totaled $0.12 per share.
At March 31, net unrealized loss totaled $0.35 per share.
The first quarter was one in which the US economy demonstrated its
resilience. Despite a strike at General Motors that spread to manufacturing
plants and companies across the nation, failure of both the Congress and
Administration to reach a budget agreement, disappointment that the Federal
Reserve Board did not continue to reduce short-term interest rates, and a rise
in long-term interest rates, the US economy continued to grow at a moderate
rate.
We anticipate that the balance of 1996 will be more noteworthy for the
political debate inherent to a presidential election year than any dramatic
change in the direction of the economy.
In the technology arena, slowing growth rates in the global personal
computer (PC) market and rising memory circuit inventories negatively affected
the profit margins of component suppliers, particularly semiconductor companies.
However, other areas of technology prospered, including software, networking,
and Internet stocks.
In the first quarter, your Manager selectively reduced your Fund's
semiconductor holdings, specifically the more commodity-oriented companies that
sell products such as memory chips. The remaining investment in the
semiconductor industry is concentrated in those companies with highly
proprietary products. In light of the historically low valuations of many
semiconductor stocks, your Manager believes in their potential for price
appreciation and continues to be enthusiastic about the remaining semiconductor
issues in the portfolio.
In addition, networking and telecommunications equipment were among the
strongest performing holdings within your portfolio, reflecting the growing need
for new networks and network technology, and the increased popularity of the
Internet. Selected computer software issues also performed well, due to
persisting demand for mainframe, personal computer, and computer-aided design
software.
Going forward, we believe that the inventory correction that has plagued
the PC and related components markets is showing signs of subsiding. We also
believe that a resurgence in global PC demand in the second half of 1996, in
conjunction with corporate upgrades to the next version of Windows NT and the
necessary hardware to support the application, may lead to an improved
environment for capital equipment and semiconductors.
For more information about your Fund, or your investment in its shares,
please write, or call Shareholder Services using the toll-free telephone numbers
listed below.
By order of the Board of Directors,
/s/William C. Morris
------------------
William C. Morris
Chairman
/s/ Brian T. Zino
--------------
Brian T. Zino
President
April 26, 1996
- --------------------------------------------------------------------------------
Important Telephone Numbers
- ---------------------------
SHAREHOLDER RETIREMENT PLAN 24-HOUR AUTOMATED
SERVICES SERVICES TELEPHONE ACCESS SERVICE
(800) 221-2450 (800) 445-1777 (800) 622-4597
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (unaudited)
- --------------------------------------------------------------------------------
Shares Value
------ -----
COMMON STOCKS 89.4%
BROADCASTING 0.3%
American Radio Systems ................... 240,000 $ 8,100,000
COMMUNICATIONS INFRASTRUCTURE 14.1%
Ascend Communications* ................... 100,000 5,393,750
Bay Networks* ............................ 1,000,000 30,750,000
Cabletron Systems* ....................... 450,000 29,812,500
CIDCO* ................................... 1,500,000 48,375,000
Cisco Systems* ........................... 1,700,000 78,943,750
Dialogic* 400,000 17,000,000
ECI Telecommunications ................... 1,000,000 22,375,000
Glenayre Technologies* 974,000 37,377,250
Octel Communications* 550,000 26,537,500
Premisys Communications* ................. 200,000 6,525,000
StrataCom* 700,000 25,593,750
3COM* .................................... 1,000,000 39,812,500
U.S. Robotics* 100,000 12,975,000
-------------
381,471,000
-------------
COMPUTER HARDWARE/PERIPHERALS 14.9%
Adaptec* ................................. 511,100 24,724,462
Dell Computer* ........................... 500,000 16,781,250
Electronics for Imaging* ................. 1,650,000 71,568,750
EMC* ..................................... 5,000,000 109,375,000
Komag* ................................... 1,450,000 35,071,875
Lexmark International Group* ............. 1,400,000 27,125,000
Seagate Technology* ...................... 1,150,000 62,962,500
Tektronix ................................ 850,000 27,625,000
Vicor* ................................... 700,000 10,500,000
Xerox* ................................... 150,000 18,825,000
-------------
404,558,837
-------------
COMPUTER SOFTWARE 14.3%
Activision* .............................. 700,000 9,275,000
Avant* ................................... 100,000 2,393,750
BMC Software* ............................ 250,000 13,718,750
Hummingbird Communications* .............. 650,000 24,456,250
Informix* ................................ 1,400,000 37,012,500
Mentor Graphics .......................... 2,800,000 39,725,000
Microsoft* ............................... 350,000 36,071,875
Netmanage* ............................... 1,649,200 18,141,200
Oracle Systems* .......................... 700,000 32,900,000
Parametric Technology* ................... 2,075,000 81,054,688
SunGard Data Systems* .................... 490,000 16,598,750
Synopsys* ................................ 1,800,000 57,600,000
3DO* ..................................... 2,000,000 17,875,000
-------------
386,822,763
-------------
CONTRACT MANUFACTURING/
CIRCUIT BOARDS 3.9%
ADFlex Solutions ......................... 1,000,000 13,437,500
Altron* .................................. 700,000 20,387,500
Hadco* ................................... 850,000 26,031,250
Merix* ................................... 800,000 29,500,000
Sanmina* ................................. 600,000 17,700,000
-------------
107,056,250
-------------
PUBLISHING 0.9%
K-III Communications* .................... 2,000,000 23,250,000
-------------
SEMICONDUCTORS 26.6%
Actel* ................................... 583,100 9,001,606
Altera* .................................. 1,100,000 61,393,750
Analog Devices* .......................... 1,000,000 28,000,000
Atmel* ................................... 1,800,000 45,900,000
Cadence Design System* ................... 350,000 15,443,750
Intel .................................... 1,400,000 79,537,500
International Rectifier* ................. 1,623,100 29,215,800
Lattice Semiconductor .................... 1,775,000 50,254,688
Linear Technology ........................ 1,150,000 48,300,000
LSI Logic* ............................... 1,600,000 42,800,000
Maxim Integrated Products* ............... 1,400,000 43,487,500
Microchip Technology* .................... 1,800,000 49,050,000
Oak Technology ........................... 3,200,000 67,600,000
Sierra Semiconductor* .................... 273,800 5,219,312
S3* ...................................... 1,800,000 21,600,000
Tower Semiconductor* ..................... 1,500,000 21,562,500
Xilinx* .................................. 2,100,000 66,937,500
Zilog* ................................... 1,000,000 33,750,000
-------------
719,053,906
-------------
SEMICONDUCTOR CAPITAL EQUIPMENT 10.8%
Asyst Technologies* ...................... 800,000 18,500,000
Credence Systems* ........................ 1,800,000 30,375,000
Electroglas* ............................. 2,050,000 31,134,375
KLA Instruments* ......................... 1,300,000 29,331,250
Lam Research* ............................ 1,242,500 43,332,188
Novellus Systems* ........................ 885,000 39,161,250
Silicon Valley Group* .................... 1,100,000 26,675,000
Tencor Instruments* ...................... 2,150,000 38,834,375
Teradyne* ................................ 1,100,000 18,425,000
Ultratech Stepper* ....................... 900,000 15,750,000
-------------
291,518,438
-------------
MISCELLANEOUS 3.6%
Cognex* .................................. 1,800,000 46,575,000
Electro Scientific* ...................... 1,050,000 19,096,875
Fusion Systems* .......................... 550,000 13,681,250
National Data ............................ 74,500 2,542,312
VanStar .................................. 1,500,000 15,187,500
-------------
97,082,937
-------------
TOTAL COMMON STOCKS
(Cost $2,464,434,797) 2,418,914,131
-------------
<PAGE>
================================================================================
March 31, 1996
- --------------------------------------------------------------------------------
PRIN. AMT. VALUE
---------- -----
SHORT-TERM HOLDINGS 11.5%
Bank of Montreal, Grand Cayman,
Fixed Time Deposit,
53/8%, 4/1/1996 .......................... $77,000,000 $ 77,000,000
First National Bank of Chicago,
Grand Cayman, Fixed Time
Deposit, 57/16%, 4/1/1996 ................ 80,200,000 80,200,000
National Westminster Bank,
Nassau, Fixed Time Deposit,
51/2%, 4/1/1996 .......................... 77,000,000 77,000,000
Republic National Bank of
New York, Grand Cayman,
Fixed Time Deposit,
51/2%, 4/1/1996 .......................... 77,000,000 77,000,000
--------------
TOTAL SHORT-TERM HOLDINGS
(Cost $311,200,000) ...................... 311,200,000
--------------
TOTAL INVESTMENTS 100.9%
(Cost $2,775,634,797) .................... 2,730,114,131
OTHER ASSETS LESS
LIABILITIES (0.9)% ........................ (23,380,262)
--------------
NET ASSETS 100.0% ......................... $2,706,733,869
==============
- ----------------
* Non-income producing security.
Note: Investments in stocks are valued at current market values or, in their
absence, at fair values determined in accordance with procedures approved by the
Board of Directors. Securities traded on 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.
- --------------------------------------------------------------------------------
MAJOR PORTFOLIO HOLDINGS
AT MARCH 31, 1996
SECURITY VALUE
- -------- -----
EMC ................................................... $109,375,000
Parametric Technology ................................. 81,054,688
Intel ................................................. 79,537,500
Cisco Systems ......................................... 78,943,750
Electronics for Imaging ............................... 71,568,750
Oak Technology ........................................ 67,600,000
Xilinx ................................................ 66,937,500
Seagate Technology .................................... 62,962,500
Altera ................................................ 61,393,750
Synopsys .............................................. 57,600,000
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
SELIGMAN COMMUNICATIONS AND INFORMATION FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT RESULTS
TOTAL RETURNS*
FOR PERIODS ENDED MARCH 31, 1996
AVERAGE ANNUAL
--------------------------------------
CLASS D
THREE ONE FIVE 10 SINCE
MONTHS YEAR YEARS YEARS INCEPTION+
------ ---- ----- ----- ----------
CLASS A
With Sales Charge ........... (9.87)% 13.29% 26.00% 20.12% n/a
Without Sales Charge ........ (5.37) 18.96 27.24 20.70 n/a
CLASS D
With CDSL ................... (6.52) 17.07 n/a n/a n/a
Without CDSL ................ (5.57) 18.07 n/a n/a 35.63%
S&P 500** ................... 5.37 32.10 14.67 13.95 17.15++
LIPPER SCIENCE &
TECHNOLOGY FUNDS
AVERAGE*** .............. 0.56 28.73 21.26 15.34 25.16++
- --------------------------------------------------------------------------------
NET ASSET VALUE per share
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
CLASS A $20.81 $21.99
CLASS D 20.16 21.35
- --------------------------------------------------------------------------------
* The returns for Class A shares are shown with and without the maximum
initial sales charge of 4.75%. 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 returns for
periods of one year or less for Class D shares are shown with and without
the effect of the 1% contingent deferred sales load ("CDSL") imposed on
certain shares redeemed within one year of purchase. For periods prior to
February 8, 1996, the returns for both Class A and D shares do not reflect
the effect of the increase in the management fee payable by the Fund, which
became effective on that date.
** The S&P 500 is an unmanaged index and 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
the Average.
+ May 3, 1993.
++ From April 30, 1993.
---------------------------------------------
These rates of return reflect changes in price and assume that all
distributions within the period are reinvested in additional shares. The
rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment
results. Largest Portfolio Changes| During Past Three Months
- --------------------------------------------------------------------------------
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGESo
DURING PAST THREE MONTHS
SHARES
----------------------------
HOLDINGS
ADDITIONS INCREASE 3/31/96
- --------- -------- -------
Bay Networks ............................. 1,000,000 1,000,000
Cabletron Systems ........................ 450,000 450,000
Electronics for Imaging .................. 750,000 1,650,000
EMC ...................................... 1,500,000 5,000,000
International Rectifier .................. 1,623,100 1,623,100
Lexmark International Group .............. 1,400,000 1,400,000
Microsoft ................................ 350,000 350,000
Oak Technology ........................... 1,000,000 3,200,000a
StrataCom ................................ 700,000 700,000
3COM ..................................... 750,000 1,000,000
HOLDINGS
REDUCTIONS DECREASE 3/31/96
- ---------- -------- -------
Altera ................................... 500,000 1,100,000
Applied Materials ........................ 1,200,000 --
Aspect Telecommunications ................ 594,300 --
Compaq Computers ......................... 850,000 --
Cypress Semiconductor .................... 5,000,000 --
Integrated Device Technology ............. 2,900,000 --
Madge Networks ........................... 880,800 --
National Semiconductor ................... 1,800,000 --
VLSI Technology .......................... 2,015,000 --
Viacom (Class B) 600,000 --
- --------------
o Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
a Includes 1,600,000 shares received as a result of a 2-for-1 stock split.
