SELIGMAN
-------------
COMMUNICATIONS
AND INFORMATION
FUND, INC.
Mid-Year Report
June 30, 1999
SEEKING CAPITAL GAIN BY INVESTING
IN COMPANIES OPERATING IN THE
COMMUNICATIONS,
INFORMATION, AND
RELATED INDUSTRIES
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE...
[PHOTO OMITTED]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
Established in 1864, Seligman has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 135 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman into the new millennium.
TABLE OF CONTENTS
To the Shareholders 1
Interview With Your Portfolio Manager 2
Performance Overview 5
Portfolio Overview 7
Portfolio of Investments 9
Statement of Assets and Liabilities 12
Statement of Operations 13
Statements of Changes in Net Assets 14
Notes to Financial Statements 15
Financial Highlights 19
Report of Independent Auditors 21
Board of Directors 22
Executive Officers and For More Information 23
Glossary of Financial Terms 24
<PAGE>
TO THE SHAREHOLDERS
During the first six months of 1999, Seligman Communications and Information
Fund posted a total return of 15.65% based on the net asset value of Class A
shares. While the Fund outperformed the 12.38% total return posted by the
Standard & Poor's 500 Composite Stock Price Index (S&P 500), it lagged the
33.18% total return posted by the Fund's peers, as measured by the Lipper
Science and Technology Funds Average. A full discussion with your Portfolio
Manager regarding the Fund's results begins on page 2.
During the past six months, your Fund remained committed to its straightforward
strategy of seeking value and focusing on fundamentals. At the beginning of the
period, this approach hurt the Fund's performance relative to its Lipper
benchmark as investors continued to pursue richly valued Internet stocks.
However, toward the end of the period, this trend began a significant reversal
and the Fund's relative performance improved markedly. Investors have begun to
question the valuations in this sector and are instead pursuing technology
stocks with strong fundamentals. We believe that this trend will continue and
that your Fund is well positioned to benefit in this new environment.
The overall economic environment of the past six months has been supportive for
common stocks in general. Inflation remained benign, corporate profits were
strong, and the global economy continued to recover, which should begin to lift
some of the pressure for world economic growth off the US. During this time, the
US economy entered its ninth year of expansion, with the pace of growth
remarkably strong.
The robust US economy, coupled with improved business prospects in most of the
rest of the world, caused the Federal Reserve Board to announce in May that it
was leaning toward a tighter monetary policy. Thus, market participants were not
surprised when the Fed increased the federal funds rate by 25 basis points on
June 30. However, markets did not expect the Fed to also announce that it was
changing its bias from tightening to neutral. This news immediately pushed the
Dow Jones Industrial Average 155 points higher and the 30-year Treasury bond
yield back below 6%. Since then, however, fears of additional interest rate
hikes have surfaced, sending the market averages lower and the 30-year Treasury
bond yield above 6%.
We believe that the outlook for the technology sector remains bright. Improved
global growth and a worldwide focus on competitiveness and productivity favor
technology spending and, ultimately, share-price appreciation. Although the
sector will continue to experience volatility over the short term, we believe
that the long-term trend will be positive.
As the millennium approaches, we have become concerned that the media's focus on
the Year 2000 (Y2K) computer issue, and the fears that this attention may spark,
will cause some investors to take actions that are not in their best long-term
interests. In our view, the primary danger to investors is losing sight of their
long-term financial goals, and altering their portfolios and asset allocations
in an attempt to respond to the confusion surrounding this issue.
In the US, governments and businesses have committed substantial resources to
this issue and, while there may be scattered inconveniences, we believe that the
US will enter the year 2000 relatively seamlessly, and that much of the rest of
the developed world is also well positioned to deal with the new millennium.
For the past several years, J. & W. Seligman & Co. Incorporated (Seligman), your
Fund's manager, and Seligman Data Corp. (Seligman Data), your Fund's shareholder
service agent, have been working to ensure that shareholders do not experience
any Y2K-related inconveniences. We are pleased to report that the early start
has paid off. During the spring of this year, Seligman and Seligman Data
participated in Y2K testing conducted by the Securities Industry Association.
These tests were completed without any Y2K-related problems on the part of
Seligman or Seligman Data. Tests with key service providers were also conducted,
all of which were successfully completed in a Y2K environment.
Thank you for your continued support of Seligman Communications and Information
Fund. We look forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
August 6, 1999
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
PAUL H. WICK
Q: HOW DID SELIGMAN COMMUNICATIONS AND INFORMATION FUND PERFORM DURING THE
FIRST SIX MONTHS OF 1999?
A: Seligman Communications and Information Fund posted a total return of 15.65%
based on the net asset value of Class A shares. The Fund outperformed the
12.38% total return of the Standard & Poor's 500 Composite Stock Price Index
(S&P 500), but lagged the 33.18% total return of its peers, as measured by
the Lipper Science and Technology Funds Average.
Q: WHAT FACTORS INFLUENCED THE FUND'S INVESTMENT RESULTS?
A: Within the first half of the Fund's fiscal year, investors became
increasingly concerned that corporations would reduce spending for new
software as they prepared for Y2K. This sentiment adversely affected the
computer software sector, which was the Fund's largest sector weighting. In
addition, a number of the Fund's holdings within the subsectors of
mechanical design software and integrated circuit design software had
disappointing fundamental results. The underperformance of this sector as a
whole was one of the reasons the Fund lagged its peer group during the past
six months.
During the first four months of the fiscal year, Internet stocks continued
to move to higher, and sometimes staggering heights. The ongoing Internet
rally penalized relative performance since the Fund has avoided companies
whose main business is the Internet. We believe in the long-term viability
and importance of the Internet, yet valuations for these companies have
risen to levels that are difficult to justify. In an effort to gain exposure
to this sector, we invested in numerous software, data networking, and
semiconductor manufacturers whose products comprise the physical
infrastructure of the Internet. These stocks have done well but do not have
the volatility -- or the outsized recent returns -- of Internet stocks.
In May and June, the Internet rally lost some momentum as investors
questioned the high valuations of this group. During these two months,
prices for many of these stocks moved significantly lower, and the Fund's
relative performance began to improve. We believe that the market's
increased focus on fundamentals will continue and the Fund's long-term
strategy of searching for value in the market will be rewarded.
[PHOTOGRAPH OMITTED]
WEST COAST TECHNOLOGY TEAM: (STANDING FROM LEFT) MARIANNE HARLOW (ADMINISTRATIVE
ASSISTANT), PAUL WICK (PORTFOLIO MANAGER), (SEATED) PAUL KRIEGER, PATRICK RENDA
[PHOTOGRAPH OMITTED]
EAST COAST TECHNOLOGY TEAM: (STANDING FROM LEFT) LAWRENCE ROSSO, KEI YAMAMOTO,
SHANEAN AUSTIN (ADMINISTRATIVE ASSISTANT), (SEATED) STORM BOSWICK
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
PAUL H. WICK
Meanwhile, the Fund's media holdings generated strong absolute returns
during the first half of the year, but they generally underperformed the
broad technology indices. The Fund's overweighting in this area contributed
to its underperformance relative to its peer group. However, we believe that
fundamentals for these stocks remain strong and that, at current valuations,
the sector remains an attractive long-term opportunity.
Since April, the Fund's relative performance has been improving. The
Internet sector has weakened recently in response to decelerating growth,
high valuations, and a flood of new Internet IPOs (initial public
offerings). At the same time, the technology rally has broadened
considerably since April, with small- and mid-cap technology stocks
outpacing the gains of larger companies.
Q: WHAT FUNDAMENTAL FACTORS CONTRIBUTED TO THE FUND'S RESULTS?
A: The fundamentals underlying the technology industry remain strong. Earnings
have generally been improving throughout the industry since July 1998, and
positive earnings surprises have significantly outnumbered negative ones in
the first and second quarters of 1999.
- --------------------------------------------------------------------------------
A TEAM APPROACH
Seligman Communications and Information Fund is managed by the Seligman
Technology Team, headed by Paul H. 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/sell policies are followed.
- --------------------------------------------------------------------------------
Aided by continued strong economic growth in the US and the beginnings of
recovery in Asia, we believe that the global semiconductor industry is now
in the early stages of a robust up-cycle. In addition, other key industries
like wireless communications, networking, personal computers, and the
Internet have all enjoyed solid year-over-year growth, and we believe that
this will continue.
Q: WHAT ARE YOUR EXPECTATIONS REGARDING Y2K?
A: When we began fiscal year 1999, we were concerned that corporations, which
had been spending heavily on technology in 1998, would begin to reduce
expenditures due to Y2K issues and companies would avoid making new
technology investments just prior to Y2K.
Six months later, we are less concerned for a few reasons. First, most
American companies are ahead of schedule in terms of Y2K compliance. Second,
it does not appear that corporations spent the majority of their technology
budgets for the year within the first six months. And third, most companies
are reporting that they will not significantly reduce technology spending in
the second half of 1999, ahead of Y2K. While we will, of course, be watching
Y2K-related issues closely, we do not believe that Y2K will disrupt spending
patterns for the year.
Q: WHICH SECTORS APPEAR TO HAVE THE GREATEST APPRECIATION POTENTIAL IN THE
SECOND HALF OF 1999 AND INTO 2000?
A: We are optimistic regarding the prospects for information services companies
and enterprise software vendors. Both areas have underperformed the
technology indices year to date as investors have feared Y2K-related
disruptions in these two sectors. However, we see only minor effects from
Y2K on most of these companies and valuations appear modest on both a
relative and an absolute basis. Therefore, we have significantly increased
the Fund's exposure to these two sectors.
3
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
PAUL H. WICK
Q: DO YOU HAVE ANY PARTICULAR CONCERNS PERTAINING TO THE SECOND HALF OF THE
YEAR?
A: Yes, two in particular. First, we are concerned about the high absolute and
relative stock valuations that prevail in many areas of the technology
industry. In addition to the well-publicized high valuations of Internet
companies, many other technology companies trade at lofty valuations
relative to earnings and revenues, especially larger-capitalization
companies. For this reason, we continue to favor mid-cap technology stocks.
Our other concern relates to new-issue activity. The IPO market year to date
has been the largest and most speculative since the first half of 1996. We
believe that insiders and venture capital investors will begin to take some
profits, which will likely lead to price declines for some recent IPOs. We
have taken defensive steps that we believe will protect the Fund in such a
scenario.
Q: WHAT IS YOUR OVERALL OUTLOOK FOR THE FUND?
A: We are cautiously optimistic regarding the Fund's prospects for the second
half of the year. Valuations in the technology industry may be high, but we
have positioned the Fund in reasonably valued companies with healthy
fundamentals. Given the recent slide in Internet stocks and the improved
performance of small- and mid-cap technology stocks, we are hopeful that our
approach to stock selection is back in favor.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-------------------------------------------------------------------
CLASS C CLASS B CLASS D
SINCE SINCE SINCE
INCEPTION SIX ONE FIVE 10 INCEPTION INCEPTION
5/27/99* MONTHS* YEAR YEARS YEARS 4/22/96 5/3/93
------------ ---------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge n/a 10.17% 33.38% 32.52% 25.18% n/a n/a
Without Sales Charge n/a 15.65 40.01 33.82 25.79 n/a n/a
CLASS B**
With CDSC+ n/a 10.24 34.01 n/a n/a 24.86% n/a
Without CDSC n/a 15.24 39.01 n/a n/a 25.43 n/a
CLASS C**
With Sales Charge and CDSC 10.51% n/a n/a n/a n/a n/a n/a
Without Sales Charge and CDSC 12.62 n/a n/a n/a n/a n/a n/a
CLASS D**
With 1% CDSC n/a 14.25 38.00 n/a n/a n/a n/a
Without CDSC n/a 15.25 39.00 32.78 n/a n/a 31.22%
LIPPER SCIENCE & TECHNOLOGY
FUNDS AVERAGE*** 12.12^ 33.18 68.63 36.83 26.92 33.25++ 32.63+++
S&P 500*** 5.55^ 12.38 22.76 27.87 18.78 28.57++ 22.92+++
NET ASSET VALUE CAPITAL GAIN INFORMATION
JUNE 30, 1999 DECEMBER 31, 1998 JUNE 30, 1998 FOR THE SIX MONTHS ENDED JUNE 30, 1999
------------- ------------------- --------------
Class A $35.54 $30.73 $25.72
Class B 33.13 28.75 24.17 REALIZED $5.312^^
CLASS C 33.10 N/A N/A UNREALIZED 6.120^^^
Class D 33.10 28.72 24.15
</TABLE>
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if redeemed, may be worth more or less than their original
cost. Past performance is not indicative of future investment results.
- -------------------------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of capital gain distributions. Returns for Class A shares are
calculated with and without the effect of the initial 4.75% maximum sales
charge. Returns for Class A shares also reflect the effect of the service
fee of up to 0.25% under the Administration, Shareholder Services and
Distribution Plan after January 1, 1993, only. Returns for Class B shares
are calculated with and without the effect of the maximum 5% contingent
deferred sales charge ("CDSC"), charged on redemptions made within one year
of the date of purchase, declining to 1% in the sixth year and 0%
thereafter. Returns for Class C shares are calculated with and without the
effect of the initial 1% maximum sales charge and the 1% CDSC that is
charged on redemptions made within 18 months of the date of purchase.
Returns for Class D shares are calculated with and without the effect of
the 1% CDSC, charged on redemptions made within one year of the date of
purchase.
*** The Lipper Science & Technology Funds Average is an average of 73 science
and technology funds and excludes the effect of the sales charges that may
be incurred in connection with purchases or sales. The monthly performance
is used in the Performance Overview. The S&P 500 is an unmanaged index that
assumes investment of dividends and excludes the effect of fees and sales
charges. Investors cannot invest directly in an average or an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
^ From May 31, 1999.
^^ Excludes $1.533 per share of net gain realized in November and December
1998, payable in 1999.
^^^ Represents the per share amount of net unrealized appreciation of portfolio
securities as of June 30, 1999.
5
<PAGE>
Performance Overview
Growth of an Assumed $10,000 Investment
CLASS A SHARES
JUNE 30, 1989 TO JUNE 30, 1999
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
"6/30/89" 9529* Initial Amount Invested
10703
10466
11035
"6/30/90" 11936
8219
9307
12581
"6/30/91" 11112
12749
14417
14891
"6/30/92" 13383
13433
16913
17147
"6/30/93" 19292
22276
22854
23858
"6/30/94" 22020
28571
30921
35269
"6/30/95" 45768
51808
44336
41957
"6/30/96" 42017
44598
49628
48341
"6/30/97" 56658
70738
61016
68942
"6/30/98" 67499
56319
81716
81530
"6/30/99" 94507
CLASS B SHARES
APRIL 22, 1996+ TO JUNE 30, 1999
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
4/22/96 10000
10544
10558
6/30/96 9372
8554
9228
9930
9833
11283
12/31/96 11029
12317
11483
10722
11039
12458
6/30/97 12546
14384
15111
15632
14038
14039
12/31/97 13451
13488
15431
15168
15768
14358
6/30/98 14818
14469
11268
12341
13935
15426
12/31/98 17875
18796
16750
17801
18124
18460
6/30/99 20599
CLASS C SHARES
MAY 27, 1999+ TO JUNE 30, 1999
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
5/27/99 9900
6/3/99 10210
6/10/99 10365
6/17/99 10729
6/24/99 10675
6/30/99 11150
CLASS D SHARES
MAY 3, 1993+ TO JUNE 30, 1999
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
"5/3/93" 10000
10000
"6/30/93" 11471
13186
13489
14036
"6/30/94" 12922
16740
18067
20571
"6/30/95" 26641
30108
25722
24288
"6/30/96" 24288
25722
28570
27774
"6/30/97" 32487
40486
34817
39266
"6/30/98" 38376
31956
46285
46108
"6/30/99" 53344
These charts reflect the growth of a $10,000 investment for a 10-year period for
Class A shares and since inception for Class B, Class C, and Class D shares,
assuming that all distributions within the periods are invested in additional
shares. Since the measured periods vary, the charts are plotted using different
scales and are not comparable.
- --------------------------------------------------------------------------------
* Net of the 4.75% or 1% maximum initial sales charge for Class A or Class C
shares, respectively.
** Excludes the effects of the 3% or 1% CDSC for Class B or Class C shares,
respectively.
+ Inception date.
6
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
JUNE 30, 1999
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
------------------------
JUNE 30, DECEMBER 31,
ISSUES COST VALUE 1999 1998
-------- -------------- -------------- -------- -------
<S> <C> <C> <C> <C> <C>
STOCKS AND CONVERTIBLE ISSUES:
Communications Infrastructure 15 $ 404,089,887 $ 453,887,756 6.6 4.6
Communications Services 7 281,836,609 314,490,844 4.5 6.3
Computer and Business Services 9 249,355,696 268,918,654 3.9 2.3
Computer Hardware/Peripherals 17 802,463,187 920,618,422 13.3 16.7
Computer Software 27 1,201,355,096 1,415,115,339 20.5 24.7
Contract Manufacturing/Circuit Boards 5 287,095,022 291,548,632 4.2 5.2
Electronics Capital Equipment 13 669,309,122 886,145,157 12.8 7.2
Internet/On-Line 20 116,449,415 189,629,500 2.7 --
Media 14 868,237,053 1,217,961,737 17.6 17.2
Semiconductors 11 463,191,541 609,197,250 8.8 14.2
---- --------------- --------------- ------ ------
138 5,343,382,628 6,567,513,291 94.9 98.4
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES 4 349,743,641 349,743,641 5.1 1.6
---- --------------- --------------- ------ ------
NET ASSETS 142 $5,693,126,269 $6,917,256,932 100.0 100.0
==== =============== =============== ====== ======
</TABLE>
LARGEST INDUSTRIES
JUNE 30, 1999
[FIGURES BELOW REPRESENT CHART IN PRINTED PIECE]
COMPUTER SOFTWARE 20.5% $1,415,115,339
MEDIA 17.6% $1,217,961,737
COMPUTER HARDWARE/PERIPHERALS 13.3% $ 920,618,422
ELECTRONICS CAPITAL EQUIPMENT 12.8% $ 886,145,157
SEMICONDUCTORS 8.8% $ 609,197,250
7
<PAGE>
Portfolio Overview
Largest Portfolio Changes
During Past Six Months
SHARES
--------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/99
- --------- ------------ ------------
Adaptec ..................... 3,000,000 3,000,000
American Power
Conversion ................ 3,193,000 6,500,000(1)
BMC Software ................ 1,700,000 1,700,000
Gilat Satellite Networks .... 1,100,000 1,100,000
KLA-Tencor .................. 2,100,000 2,100,000
MediaOne Group .............. 800,000 3,400,000
Novellus Systems ............ 1,300,000 1,300,000
Seagate Technology .......... 1,500,000 1,500,000
Tellabs ..................... 500,000 1,000,000(2)
Veeco Instruments ........... 1,200,000 1,200,000
SHARES
--------------------------
HOLDINGS
REDUCTIONS INCREASE 6/30/99
- ---------- ------------ ------------
Advanced Micro Devices ...... 3,100,000 --
CBS ......................... 2,550,000 4,000,000
Electronic Arts ............. 1,700,000 2,100,000
EMC ......................... 3,200,000(3) --
First Data .................. 2,500,000 --
Intel ....................... 1,600,000(4) --
Lexmark International
Group (Class A) ........... 1,200,000 500,000(5)
Network Associates .......... 4,000,000 --
PLATINUM Technology
International ............. 3,550,000 --
Teradyne .................... 1,350,000 1,800,000
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
(1) Includes 3,250,000 shares received as a result of a 2-for-1 stock split.
(2) Includes 500,000 shares received as a result of a 2-for-1 stock split.
(3) Includes 400,000 shares received as a result of a 2-for-1 stock split.
(4) Includes 600,000 shares received as a result of a 2-for-1 stock split.
(5) Includes 250,000 shares received as a result of a 2-for-1 stock split.
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 1999
SECURITY VALUE
- -------- ------------
Chancellor Media ..................... $253,431,250
MediaOne Group ....................... 252,875,000
Electronics for Imaging .............. 246,979,687
Synopsys ............................. 183,394,531
CheckPoint Software Technologies
(Israel) ........................... 181,141,516
SECURITY VALUE
- -------- ------------
Microsoft ............................ $180,250,000
CBS .................................. 173,750,000
Lattice Semiconductor ................ 138,166,000
Clear Channel Communications ......... 137,875,000
KLA-Tencor ........................... 136,171,875
- --------------------------------------------------------------------------------
8
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999
SHARES VALUE
----------- --------------
COMMON STOCKS 93.7%
COMMUNICATIONS
INFRASTRUCTURE 6.5%
ADC Telecommunications* 279,400 $ 12,721,431
Aspect Telecommunications* 1,480,400 14,341,375
Cisco Systems* 1,000,000 64,406,250
Comverse Technology* 500,000 37,718,750
DSP Communications* 1,000,000 28,875,000
ECI Telecom* (Israel) 1,000,000 33,031,250
Gilat Satellite Networks*^ 1,100,000 57,818,750
Harris 700,000 27,431,250
Nokia (Finland) 500,000 45,781,250
Oak Industries* 600,000 26,212,500
Orckit Communications* 500,000 12,406,250
Tekelec* 1,600,000 19,550,000
Tellabs* 1,000,000 67,593,750
-------------
447,887,806
-------------
COMMUNICATIONS
SERVICES 4.5%
American Tower Systems 1,500,000 36,000,000
AT&T--Liberty Media Group
(Class A)* 2,000,000 73,500,000
Galileo International 1,741,700 93,072,094
ICG Communications* 1,000,000 21,281,250
MCI WorldCom 300,000 25,809,375
Pacific Gateway Exchange*^ 1,400,000 40,687,500
RSL Communications (Class A)* 1,250,000 24,140,625
-------------
314,490,844
-------------
COMPUTER AND
BUSINESS SERVICES 3.9%
Amdocs* 1,200,000 27,300,000
CSG Systems International* 257,900 6,761,816
EchoStar Communications 400,000 61,387,500
Mastech* 1,250,200 23,206,838
Metamor Worldwide* 1,000,000 24,000,000
Metzler Group* 1,200,000 33,112,500
Modis Professional Services* 2,000,000 27,500,000
SunGard Data Systems* 1,000,000 34,500,000
Unisys* 800,000 31,150,000
-------------
268,918,654
-------------
COMPUTER HARDWARE/
PERIPHERALS 13.1%
Adaptec* 3,000,000 105,843,750
American Power Conversion* 6,500,000 130,609,375
Apex PC Solutions*^ 1,995,000 40,835,156
Comdisco 3,000,000 76,875,000
Creative Technology^
(Singapore) 8,000,000 106,750,000
Electronics for Imaging*^ 4,825,000 246,979,687
Ingram Micro (Class A)* 1,000,000 25,750,000
Lexmark International Group
(Class A)* 500,000 33,031,250
Pitney Bowes 600,000 38,550,000
Seagate Technology* 1,500,000 38,437,500
SHARES VALUE
----------- --------------
COMPUTER HARDWARE/
PERIPHERALS (CONTINUED)
Storage Technology* 725,000 $ 16,493,750
Sun Microsystems* 400,000 27,562,500
Tech Data* 500,000 19,109,375
-------------
906,827,343
-------------
COMPUTER SOFTWARE 20.1%
3DO*^ 2,420,800 11,120,550
Acclaim Entertainment*^ 3,500,000 22,257,812
Acclaim Entertainment*
(Warrants) 2,736 7,182
Activision*^ 1,400,000 20,343,750
Autodesk^ 4,000,000 118,375,000
BMC Software* 1,700,000 91,746,875
Check Point Software
Technologies*^ (Israel) 3,379,900 181,141,516
Citrix Systems* 500,000 28,171,875
Compuware* 2,300,000 73,096,875
Electronic Arts* 2,100,000 113,662,500
Entrust Technologies 500,000 16,640,625
HNC Software* 900,000 27,703,125
Mentor Graphics*^ 3,000,000 38,343,750
Microsoft* 2,000,000 180,250,000
New Era of Networks* 500,000 21,953,125
Parametric Technology* 6,000,000 83,437,500
Peregrine Systems* 600,000 15,393,750
Structural Dynamics
Research*^ 3,200,000 58,800,000
Symantec* 2,200,000 56,168,750
Synopsys* 3,325,000 183,394,531
Tecnomatix
Technologies*^ (Israel) 800,000 13,975,000
Visio* 1,000,000 38,031,250
-------------
1,394,015,341
-------------
CONTRACT MANUFACTURING/
CIRCUIT BOARDS 4.2%
DII Group* 983,300 36,566,469
Hadco*0 1,100,000 43,725,000
Sanmina* 573,900 43,544,663
SCI Systems* 2,000,000 95,000,000
SMART Modular
Technologies*^ 4,200,000 72,712,500
-------------
291,548,632
-------------
ELECTRONICS CAPITAL
EQUIPMENT 12.8%
Applied Materials* 1,200,000 88,612,500
ASM Lithography*
(Netherlands) 1,200,000 71,062,500
Asyst Technologies*^ 900,000 26,915,625
Asyst Technologies*^# 100,000 2,542,031
Cognex*^ 2,250,000 70,945,313
Credence Systems*^ 1,800,000 66,375,000
Electro Scientific Industries*^ 950,000 39,692,188
KLA-Tencor* 2,100,000 136,171,875
- ------------
See footnotes on page 11.
9
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999
SHARES VALUE
----------- --------------
ELECTRONICS CAPITAL
EQUIPMENT (CONTINUED)
Lam Research* 1,200,000 $ 55,987,500
Novellus Systems* 1,300,000 88,684,375
Orbotech*^ (Israel) 1,340,000 69,093,750
Teradyne* 1,800,000 129,150,000
Veeco Instruments*^ 1,200,000 40,912,500
--------------
886,145,157
--------------
INTERNET/ON-LINE 2.3%
Beyond.com 800,000 22,875,000
Goto.com* 100,000 2,787,500
iVillage*# 555,555 23,743,914
Juno Online*# 779,899 15,164,176
Mail.com*# 2,135,713 32,089,080
Mail.com 400,000 7,512,500
PSINet* 696,000 30,406,500
Rx.com*# 1,428,572 5,000,002
Softnet Systems* 250,000 6,960,938
Software.com* 74,000 1,718,187
Stamps.com* 200,000 3,512,500
Stamps.com*# 182,150 2,559,208
ZDNet* 200,000 5,200,000
--------------
159,529,505
--------------
MEDIA 17.6%
Adelphia Communications
(Class A)* 800,000 51,275,000
Cablevision Systems
(Class A)* 800,000 56,000,000
CBS* 4,000,000 173,750,000
Chancellor Media* 4,600,000 253,431,250
Clear Channel
Communications* 2,000,000 137,875,000
Fox Entertainment
Group (Class A)* 1,427,000 38,439,813
Infinity Broadcasting
(Class A)* 2,000,000 59,500,000
MediaOne Group* 3,400,000 252,875,000
Outdoor Systems* 1,500,000 54,750,000
Sinclair Broadcast Group
(Class A)* 2,000,000 32,625,000
USA Networks* 1,615,200 64,759,425
Ziff-Davis* 2,300,000 35,506,250
Ziff-Davis*# 500,000 6,175,000
--------------
1,216,961,738
--------------
SEMICONDUCTORS 8.7%
Altera* 750,000 27,585,937
Amkor Technology*^ 9,000,000 91,968,750
C-Cube Microsystems*^ 3,050,000 96,551,563
Dallas Semiconductor 900,000 45,450,000
Lattice Semiconductor*^ 2,224,000 138,166,000
Linear Technology 600,000 40,387,500
SHARES OR
PRINCIPAL
SHARES VALUE
----------- --------------
SEMICONDUCTORS (CONTINUED)
Maxim Integrated Products* 700,000 shs. $ 46,550,000
Microchip Technology* 2,000,000 94,625,000
Xilinx* 400,000 22,912,500
--------------
604,197,250
--------------
TOTAL COMMON STOCKS
(Cost $5,282,429,552) 6,490,522,270
--------------
CONVERTIBLE
BONDS 0.2%
COMPUTER HARDWARE/
PERIPHERALS
Candescent Technologies,
7%, DUE 5/1/2003 $ 3,000,000 2,295,000
--------------
COMPUTER
SOFTWARE 0.2%
Activision,
6.75%, due 1/1/2005+ 10,000,000 9,550,000
--------------
TOTAL CONVERTIBLE
BONDS
(Cost $13,003,150) 11,845,000
--------------
CONVERTIBLE PREFERRED
STOCKS 1.0%
COMMUNICATIONS
INFRASTRUCTURE 0.1%
FreeGate (Series D)*# 333,333 shs. 999,999
UniSite (Class C)*# 10,796 4,999,951
--------------
5,999,950
--------------
COMPUTER HARDWARE/
PERIPHERALS 0.2%
Applied Science Fiction
(Series D)*# 387,595 8,996,080
Cobalt Networks (Series C)*# 405,405 1,499,999
Mobility Electronics
(Series C)*# 166,666 1,000,000
--------------
11,496,079
--------------
COMPUTER SOFTWARE 0.2%
Bluestone Software
(Series C)*# 533,088 1,449,999
CrossWorlds Software
(Series D)*# 800,000 1,600,000
SynQuest (Series G)*# 724,638 4,500,002
Verisity (Series D)*# 543,072 3,999,997
--------------
11,549,998
--------------
INTERNET/ON-LINE 0.4%
APB Multimedia (Series B)*# 126,582 999,998
eMusic (Series B)*# 10,000 16,600,000
Interwoven (Series E)*# 706,714 4,000,001
- ------------
See footnotes on page 11.
10
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999
SHARES VALUE
----------- --------------
INTERNET/ON-LINE (CONTINUED)
net.Genesis (Series F)*# 602,409 $ 1,999,998
ReleaseNow.com (Series E)*# 500,000 2,000,000
WorldRes (Series D)*# 413,223 2,499,999
XTRA On-Line (Series C)*# 304,878 1,999,999
--------------
30,099,995
--------------
MEDIA
ThirdAge Media (Series D)*# 285,714 999,999
--------------
SEMICONDUCTORS 0.1%
Centillium Technology
(Series C)*# 400,000 2,000,000
Transmeta (Series E)*# 500,000 3,000,000
--------------
5,000,000
--------------
TOTAL CONVERTIBLE
PREFERRED STOCKS
(Cost $47,949,926) 65,146,021
--------------
VALUE
--------------
SHORT-TERM
HOLDINGS 3.5%
(Cost $244,000,000) $ 244,000,000
--------------
TOTAL
INVESTMENTS 98.4%
(Cost $5,587,382,628) 6,811,513,291
OTHER ASSETS
LESS LIABILITIES 1.6% 105,743,641
--------------
NET ASSETS 100.0% $6,917,256,932
==============
- -----------------
* Non-income producing security.
+ Rule 144A security.
# Restricted security.
0 Affiliated issuers (Fund's holdings representing 5% or more of the outstanding
voting securities).
See Notes to Financial Statements.
11
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments, at value:
Stocks and convertible issues* (cost $5,343,382,628) ........................ $6,567,513,291
Short-term holdings (cost $244,000,000) ..................................... 244,000,000 $6,811,513,291
--------------
Cash ............................................................................................. 2,206,822
Receivable for securities sold ................................................................... 156,562,730
Receivable for Capital Stock sold ................................................................ 17,761,920
Expenses prepaid to shareholder service agent .................................................... 1,457,348
Receivable for interest and dividends ............................................................ 421,618
Other ............................................................................................ 63,596
--------------
TOTAL ASSETS 6,989,987,325
--------------
LIABILITIES:
Payable for securities purchased ................................................................. 41,291,618
Payable for Capital Stock repurchased ............................................................ 20,294,152
Accrued expenses and other ....................................................................... 11,144,623
--------------
TOTAL LIABILITIES ................................................................................ 72,730,393
--------------
NET ASSETS ....................................................................................... $6,917,256,932
==============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.10 Par value; 1,000,000,000 shares authorized;
200,027,066 shares outstanding):
Class A ........................................................................................ $ 12,110,552
Class B ........................................................................................ 3,810,644
Class C ........................................................................................ 14,873
Class D ........................................................................................ 4,066,638
Additional paid-in capital ....................................................................... 4,346,820,981
Accumulated net investment loss .................................................................. (42,755,928)
Undistributed net realized gain .................................................................. 1,369,058,509
Net unrealized appreciation of investments ....................................................... 1,224,130,663
--------------
NET ASSETS ....................................................................................... $6,917,256,932
==============
NET ASSET VALUE PER SHARE:
CLASS A ($4,304,076,939 / 121,105,522 shares) .................................................... $35.54
======
CLASS B ($1,262,346,114 / 38,106,439 shares) ..................................................... $33.13
======
CLASS C ($4,923,030 / 148,731 shares) ............................................................ $33.10
------
CLASS D ($1,345,910,849 / 40,666,374 shares) ..................................................... $33.10
======
</TABLE>
- ----------------------
* Includes affiliated issuers (issuers in which the Fund's holdings represent 5%
or more of the outstanding voting securities) with a cost of $1,594,023,391
and a value of $1,717,028,691.
See Notes to Financial Statements.
12
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends* (net of foreign taxes withheld of $99,561) .......................... $ 6,706,993
Interest ....................................................................... 2,824,425
--------------
TOTAL INVESTMENT INCOME ........................................................................... $ 9,531,418
EXPENSES:
Management fee ................................................................. 26,598,855
Distribution and service fees .................................................. 16,185,447
Shareholder account services ................................................... 7,469,922
Custody and related services ................................................... 690,823
Shareholder reports and communications ......................................... 583,462
Registration ................................................................... 367,781
Auditing and legal fees ........................................................ 94,940
Directors' fees and expenses ................................................... 58,216
Miscellaneous .................................................................. 120,258
--------------
TOTAL EXPENSES .................................................................................... 52,169,704
-------------
NET INVESTMENT LOSS ............................................................................... (42,638,286)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments* .............................................. 1,062,486,939
Net change in unrealized appreciation of investments ........................... (80,583,789)
--------------
NET GAIN ON INVESTMENTS ........................................................................... 981,903,150
-------------
INCREASE IN NET ASSETS FROM OPERATIONS ............................................................ $939,264,864
=============
</TABLE>
- -------------------
* Include dividends and net realized gain from affiliated issuers of $4,497,100
and $14,502,165, respectively.
See Notes to Financial Statements.
13
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment loss ............................................................ $ (42,638,286) $ (70,537,766)
Net realized gain on investments ............................................... 1,062,486,939 530,305,943
Net change in unrealized appreciation of investments ........................... (80,583,789) 1,092,454,836
--------------- ---------------
INCREASE IN NET ASSETS FROM OPERATIONS ......................................... 939,264,864 1,552,223,013
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ..................................................................... -- (43,896,582)
Class B ..................................................................... -- (12,119,376)
Class D ..................................................................... -- (14,706,286)
--------------- ---------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ...................................... -- (70,722,244)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares .............................................. 535,029,202 1,203,949,867
Exchanged from associated Funds ................................................ 3,131,564,857 4,033,069,921
Shares issued in payment of gain distributions ................................. -- 66,281,783
--------------- ---------------
Total .......................................................................... 3,666,594,059 5,303,301,571
--------------- ---------------
Cost of shares repurchased ..................................................... (730,392,281) (1,116,126,736)
Exchanged into associated Funds ................................................ (3,110,147,513) (4,074,928,693)
--------------- ---------------
Total .......................................................................... (3,840,539,794) (5,191,055,429)
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS .................................................. (173,945,735) 112,246,142
--------------- ---------------
INCREASE IN NET ASSETS ......................................................... 765,319,129 1,593,746,911
NET ASSETS:
Beginning of period ............................................................ 6,151,937,803 4,558,190,892
--------------- ---------------
END OF PERIOD (including accumulated net investment loss of
$42,755,928 and $117,642, respectively) ..................................... $6,917,256,932 $6,151,937,803
=============== ===============
</TABLE>
- --------------
See Notes to Financial Statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Communications and Information Fund,
Inc. (the "Fund") offers four classes of shares. Class A shares are sold with an
initial sales charge of up to 4.75% and a continuing service fee of up to 0.25%
on an annual basis. Class A shares purchased in an amount of $1,000,000 or more
are sold without an initial sales charge but are subject to a contingent
deferred sales charge ("CDSC") of 1% on redemptions within 18 months of
purchase. Class B shares are sold without an initial sales charge but are
subject to a distribution fee of 0.75% and a service fee of up to 0.25% on an
annual basis, and a CDSC, if applicable, of 5% on redemptions in the first year
of purchase, declining to 1% in the sixth year and 0% thereafter. Class B shares
will automatically convert to Class A shares on the last day of the month that
precedes the eighth anniversary of their date of purchase. The Fund began
offering Class C shares on May 27, 1999. Class C shares are sold with an initial
sales charge of up to 1% and are subject to a distribution fee of up to 0.75%
and a service fee of up to 0.25% on an annual basis, and a CDSC, if applicable,
of 1% imposed on redemptions made within 18 months of purchase. Class D shares
are sold without an initial sales charge but are subject to a distribution fee
of up to 0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC,
if applicable, of 1% imposed on redemptions made within one year of purchase.
The four classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain other class
expenses, and has exclusive voting rights with respect to any matter on which a
separate vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant accounting
policies of the Fund:
A. SECURITY VALUATION -- Investments in convertible securities and common stocks
are valued at current market values or, in their absence, at fair values
determined in accordance with procedures approved by the Board of Directors.
Securities traded on national exchanges are valued at last sales prices or,
in their absence and in the case of over-the-counter securities, at the mean
of bid and asked prices. Short-term holdings maturing in 60 days or less are
valued at amortized cost.
B. FEDERAL TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of investments sold
is used for both financial statement and federal income tax purposes.
Dividends receivable and payable are recorded on ex-dividend dates. Interest
income is recorded on an accrual basis.
D. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than class-specific
expenses), and realized and unrealized gains or losses are allocated daily to
each class of shares based upon the relative value of shares of each class.
Class-specific expenses, which include distribution and service fees and any
other items that are specifically attributable to a particular class, are
charged directly to such class. For the six months ended June 30, 1999,
distribution and service fees were the only class-specific expenses.
E. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders during the year from net
investment income or net realized gains may differ from their ultimate
treatment for federal income tax purposes. These differences are caused
primarily by differences in the timing of the recognition of certain
components of income, expense, or realized capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassification
will have no effect on net assets, results of operations, or net asset value
per share of the Fund.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the six months ended June 30, 1999, amounted to $3,704,436,859 and
$4,171,793,937, respectively.
At June 30, 1999, the cost of investments for federal income tax purposes was
$5,366,890,206, and the tax basis gross unrealized appreciation and depreciation
of portfolio securities amounted to $1,526,033,412 and $325,410,327,
respectively.
4. SHORT-TERM INVESTMENTS -- At June 30, 1999, the Fund owned short-term
investments which matured in less than seven days.
5. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- 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
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
personnel of the Fund and the Manager is paid by the Manager. The Manager
receives a fee, calculated daily and payable monthly, equal to 0.90% per annum
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. The
management fee reflected in the Statement of Operations represents 0.87% per
annum of the Fund's average daily net assets.
Seligman Advisors, Inc. (the "Distributor"), agent for the distribution of
the Fund's shares and an affiliate of the Manager, received concessions of
$588,138 from sales of Class A shares. Commissions of $4,743,060 and $43,021
were paid to dealers from sales of Class A and Class C shares, respectively.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, service organizations can enter into agreements with
the Distributor and receive a continuing fee of up to 0.25% on an annual basis,
payable quarterly, of the average daily net assets of the Class A shares
attributable to the particular service organizations for providing personal
services and/or the maintenance of shareholder accounts. The Distributor charges
such fees to the Fund pursuant to the Plan. For the six months ended June 30,
1999, fees incurred under the Plan aggregated $4,807,372, or 0.25% per annum of
the average daily net assets of Class A shares.
Under the Plan, with respect to Class B shares, Class C shares, and Class D
shares, service organizations can enter into agreements with the Distributor and
receive a continuing fee for providing personal services and/or the maintenance
of shareholder accounts of up to 0.25% on an annual basis of the average daily
net assets of the Class B, Class C, and Class D shares for which the
organizations are responsible; and, for Class C and Class D shares, fees for
providing other distribution assistance of up to 0.75% on an annual basis of
such average daily net assets. Such fees are paid monthly by the Fund to the
Distributor pursuant to the Plan.
With respect to Class B shares, a distribution fee of 0.75% on an annual
basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to this fee to a third
party (the "Purchaser"), which provides funding to the Distributor to enable it
to pay commissions to dealers at the time of the sale of the related Class B
shares.
For the six months ended June 30, 1999, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B, Class C,
and Class D shares, amounted to $5,375,747, $1,341, and $6,000,987,
respectively.
The Distributor is entitled to retain any CDSC imposed on certain redemptions
of Class A and Class C shares occurring within 18 months of purchase and on
redemptions of Class D shares occurring within one year of purchase. For the six
months ended June 30, 1999, such charges amounted to $238,658.
The Distributor has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSC and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class Bshares sold. The aggregate of such payments
retained by the Distributor, for the six months ended June 30, 1999, amounted to
$210,458.
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, 1999,
Seligman Services, Inc. received commissions of $111,920 from the sales of
shares of the Fund. Seligman Services, Inc. also received distribution and
service fees of $527,734, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $7,366,922 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.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
Fund or other funds in the Seligman Group of Investment Companies. The cost of
such fees and earnings accrued thereon is included in directors' fees and
expenses, and the accumulated balance thereof at June 30, 1999, of $122,508 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
6. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $750 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. The Fund's borrowings are limited to 10%
of its net assets. Borrowings pursuant to the credit
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
facility are subject to interest at a rate equal to the overnight federal funds
rate plus 0.50%. The Fund incurs a commitment fee of 0.08% per annum on its
share of the unused portion of the credit facility. The credit facility may be
drawn upon only for temporary purposes and is subject to certain other customary
restrictions. The credit facility commitment expires one year from the date of
the agreement but is renewable with the consent of the participating banks.
During the six-month period ended June 30, 1999, the Fund periodically
borrowed from the credit facility. The average outstanding daily balance of the
bank loans (based on the number of days the loans were outstanding) was
$18,188,889, with a weighted interest rate of 5.21%. The maximum borrowing
during the period was $30,500,000.
7. LITIGATION -- The Fund, certain of its current and former directors, and the
Manager were named in a lawsuit filed in the United States District Court for
the Northern District of Maryland on February 5, 1999. The complaint makes
various allegations and claims relating to the February 1996 special meeting of
the Fund's shareholders at which an increase in the management fee rate payable
to the Manager by the Fund was approved. The directors were dismissed from the
lawsuit in March 1999. On May 26, 1999, the District Court granted the remaining
defendants' motion to dismiss the entire complaint. The plaintiff has appealed
the case to the US Court of Appeals. The Fund and the Manager continue to
believe the claims to be without merit and intend to continue to defend the
action vigorously.
8. CAPITAL SHARE TRANSACTIONS -- The Fund has authorized 1,000,000,000 shares of
$0.10 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------------------- ---------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998 JUNE 30, 1999 DECEMBER 31, 1998
---------------------- ------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------- --------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net proceeds from sales
of shares 9,933,939 $ 309,179,807 25,111,674 $ 621,592,114 4,862,954 $141,150,887 16,415,913 $386,088,334
Exchanged from
associated Funds 69,570,375 2,167,653,696 114,681,500 2,841,379,108 1,786,016 51,986,872 2,120,230 49,133,796
Shares issued in payment
of gain distributions -- -- 1,582,669 41,174,599 -- -- 465,356 11,341,088
---------- ------------- ----------- ------------- --------- ------------ ----------- ------------
Total 79,504,314 2,476,833,503 141,375,843 3,504,145,821 6,648,970 193,137,759 19,001,499 446,563,218
---------- ------------- ----------- ------------- --------- ------------ ----------- ------------
Cost of shares
repurchased (15,576,808) (484,939,773) (33,032,174) (817,466,916) (3,114,553) (90,515,935) (3,508,482) (81,912,096)
Exchanged into
associated Funds (69,431,956)(2,169,987,834)(115,379,614)(2,870,772,283) (1,363,163) (39,476,805) (2,592,803) (58,649,491)
---------- ------------- ----------- ------------- --------- ------------ ----------- ------------
Total (85,008,764)(2,654,927,607)(148,411,788)(3,688,239,199) (4,477,716) (129,992,740) (6,101,285) (140,561,587)
---------- ------------- ----------- ------------- --------- ------------ ----------- ------------
Increase (Decrease) in
Shares (5,504,450) $(178,094,104) (7,035,945) $(184,093,378) 2,171,254 $ 63,145,019 12,900,214 $306,001,631
========== ============= =========== ============= ========= ============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
CLASS C CLASS D
-------------------------- ------------------------------------------------------
MAY 27, 1999* SIX MONTHS ENDED YEAR ENDED
TO JUNE 30, 1999 JUNE 30, 1999 DECEMBER 31, 1998
-------------------------- ----------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------ ------------ --------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Net proceeds from sales
of shares 148,633 $4,673,281 2,772,913 $ 80,025,227 8,380,790 $ 196,269,419
Exchanged from associated
Funds 107 3,361 31,297,021 911,920,928 48,857,178 1,142,557,017
Shares issued in payment
of gain distributions -- -- -- -- 565,338 13,766,096
--------- ------------ ----------- ------------- ----------- ---------------
Total 148,740 4,676,642 34,069,934 991,946,155 57,803,306 1,352,592,532
--------- ------------ ----------- ------------- ----------- ---------------
Cost of shares repurchased (9) (275) (5,339,678) (154,936,298) (9,348,809) (216,747,724)
Exchanged into associated
Funds -- -- (30,826,161) (900,682,874) (48,834,512) (1,145,506,919)
--------- ------------ ----------- ------------- ----------- ---------------
Total (9) (275) (36,165,839)(1,055,619,172 (58,183,321) (1,362,254,643)
--------- ------------ ----------- ------------- ----------- ---------------
Increase (Decrease) in Shares 148,731 $4,676,367 (2,095,905)$ (63,673,017) (380,015) $ (9,662,111)
========= ============ =========== ============= =========== ===============
</TABLE>
* Commencement of offering of shares.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
9. AFFILIATED ISSUERS -- As defined under the Investment Company Act of 1940, as
amended, affiliated issuers are those issuers in which the Fund's holdings
represent 5% or more of the outstanding voting securities of the issuer. The
Fund's transactions in the securities of these issuers during the six months
ended June 30, 1999, is as follows:
<TABLE>
<CAPTION>
GROSS GROSS REALIZED
BEGINNING PURCHASES SALES AND ENDING GAIN DIVIDEND ENDING
AFFILIATE SHARES AND ADDITIONS REDUCTIONS SHARES (LOSS) INCOME VALUE
- ------------ ----------- ------------- ---------- ---------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
3DO .......................... 2,600,000 -- 179,200 2,420,800 $ (596,318) $ 11,120,550
Acclaim Entertainment ........ 3,100,000 400,000 -- 3,500,000 22,257,812
Activision ................... 1,100,000 300,000 -- 1,400,000 20,343,750
Amkor Technology ............. 8,170,000 830,000 -- 9,000,000 91,968,750
Apex PC Solutions ............ 1,350,000 665,000 20,000 1,995,000 319,166 40,835,156
Asyst Technologies ........... 757,600 242,400 -- 1,000,000 29,457,656
Autodesk ..................... 3,235,000 765,000 -- 4,000,000 $ 434,100 118,375,000
C-Cube Microsystems .......... 2,600,000 650,000 200,000 3,050,000 2,090,936 96,551,563
Check Point Software
Technologies ............... 3,100,000 400,000 120,100 3,379,900 3,598,796 181,141,516
Cognex ....................... 2,200,000 300,000 250,000 2,250,000 1,656,183 70,945,313
Creative Technology .......... 8,126,000 -- 126,000 8,000,000 (87,249) 4,063,000 106,750,000
Credence Systems ............. 1,800,000 -- -- 1,800,000 66,375,000
Electro Scientific Industries. 1,000,000 40,000 90,000 950,000 2,208,145 39,692,188
Electronics for Imaging ...... 5,030,000 125,000 330,000 4,825,000 1,041,136 246,979,687
Gilat Satellite Networks ..... -- 1,100,000 -- 1,100,000 57,818,750
Hadco ........................ 850,000 250,000 -- 1,100,000 43,725,000
Lattice Semiconductor ........ 2,050,000 300,000 126,000 2,224,000 4,026,664 138,166,000
Mentor Graphics .............. -- 3,000,000 -- 3,000,000 38,343,750
Orbotech ..................... 1,360,000 -- 20,000 1,340,000 120,973 69,093,750
Pacific Gateway Exchange ..... 1,120,100 379,900 100,000 1,400,000 123,733 40,687,500
SMART Modular
Technologies ............... 3,600,000 600,000 -- 4,200,000 72,712,500
Structural Dynamics Research . 3,020,000 180,000 -- 3,200,000 58,800,000
Tecnomatix Technologies ...... 725,000 75,000 -- 800,000 13,975,000
Veeco Instruments ............ -- 1,200,000 -- 1,200,000 40,912,500
------------ ---------- --------------
TOTAL ........................ $14,502,165 $4,497,100 $1,717,028,691
============ ========== ==============
</TABLE>
10. RESTRICTED SECURITIES -- At June 30, 1999, the Fund owned 19 private
placement investments that were purchased through private offerings and cannot
be sold without prior registration under the Securities Act of 1933 or pursuant
to an exemption therefrom. In addition, the Fund has agreed to further
restrictions on the disposition of its shares as set forth in various agreements
entered into in connection with the purchase of these investments. These
investments are valued at fair value as determined in accordance with procedures
approved by the Board of Directors of the Fund. The acquisition dates of these
investments, along with their cost and values at June 30, 1999, are as follows:
<TABLE>
<CAPTION>
INVESTMENTS ACQUISITION DATES COST VALUE
- ----------- --------------------- -------------- ---------------
<S> <C> <C> <C>
Common Stocks:
Asyst Technologies 5/25/99 $ 1,800,000 $ 2,542,031
iVillage 11/30/98 4,749,998 23,743,914
Juno Online 2/26/99 5,000,000 15,164,176
Mail.com 8/4/98 & 3/10/99 7,299,994 32,089,080
Rx.com* 5/24/99 & 6/17/99 5,000,002 5,000,002
Stamps.com 2/23/99 1,000,004 2,559,208
Ziff-Davis 3/12/99 7,562,500 6,175,000
-------------- ---------------
32,412,498 87,273,411
-------------- ---------------
Convertible Preferred Stocks:
APB Multimedia (Series B)* 6/10/99 999,998 999,998
Applied Science Fiction (Series D)* 3/29/99 2,999,985 8,996,080
Bluestone Software (Series C)* 5/25/99 1,449,999 1,449,999
Centillium Technology Corp. (Series C)* 4/30/99 2,000,000 2,000,000
Cobalt Networks (Series C)* 5/3/99 1,499,999 1,499,999
CrossWorlds Software (Series D)* 12/23/97 4,000,000 1,600,000
eMusic (Series B) 3/23/99 3,000,000 16,600,000
FreeGate (Series D)* 6/30/98 999,999 999,999
Interwoven (Series E)* 6/11/99 4,000,001 4,000,001
Mobility Electronics (Series C)* 5/4/99 1,000,000 1,000,000
net.Genesis (Series F)* 6/10/99 1,999,998 1,999,998
ReleaseNow.com (Series E)* 5/24/99 2,000,000 2,000,000
SynQuest (Series G)* 3/3/99 4,500,002 4,500,002
ThirdAge Media (Series D)* 6/30/99 999,999 999,999
Transmeta (Series E)* 7/1/98 3,000,000 3,000,000
UniSite (Class C)* 12/19/97 4,999,951 4,999,951
Verisity (Series D)* 3/1/99 3,999,997 3,999,997
WorldRes (Series D)* 3/18/99 2,499,999 2,499,999
XTRA On-Line (Series C)* 7/16/98 1,999,999 1,999,999
-------------- ---------------
47,949,926 65,146,021
-------------- ---------------
$80,362,424 $152,419,432
============== ===============
</TABLE>
- -------------------
* Private placement investments.
18
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five and one-half years or from its inception if less
than five and one-half years. Certain information reflects financial results for
a single share of a Class that was held throughout the periods shown. Per share
amounts are calculated using average shares outstanding. "Total return" shows
the rate that you would have earned (or lost) on an investment in each Class,
assuming you reinvested all your capital gain distributions. Total returns do
not reflect any sales charges and are not annualized for periods of less than
one year.
<TABLE>
<CAPTION>
CLASS A
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994
-------------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............ $30.73 $23.25 $23.51 $21.99 $16.64 $13.43
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .................... (0.17) (0.28) (0.33) (0.26) (0.33) (0.19)
Net realized and unrealized gain
on investments ................................ 4.98 8.11 6.01 2.84 7.59 4.86
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS ................ 4.81 7.83 5.68 2.58 7.26 4.67
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain .... -- (0.35) (5.94) (1.06) (1.91) (1.46)
--------- --------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS ............................. -- (0.35) (5.94) (1.06) (1.91) (1.46)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD .................. $35.54 $30.73 $23.25 $23.51 $21.99 $16.64
========= ========= ========= ========= ========= =========
TOTAL RETURN: ................................... 15.65% 33.92% 22.95% 11.94% 43.39% 35.30%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ........ $4,304,077 $3,890,596 $3,107,481 $2,414,672 $1,940,693 $307,542
Ratio of expenses to average net assets ......... 1.43%+ 1.44% 1.53% 1.68% 1.61% 1.65%
Ratio of net income (loss) to average net assets. (1.12)%+ (1.13)% (1.21)% (1.16)% (1.31)% (1.27)%
Portfolio turnover rate ......................... 60.78% 126.70% 164.57% 121.32% 65.77% 104.08%
</TABLE>
- ------------------
See footnotes on page 20.
19
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------- ----------
SIX MONTHS 4/22/96* 5/27/99*
ENDED YEAR ENDED DECEMBER 31, TO TO
-------------------------
6/30/99 1998 1997 12/31/96 6/30/99
-------------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $28.75 $21.94 $22.62 $21.51 $29.39
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.27) (0.44) (0.50) (0.28) (0.04)
Net realized and unrealized gain
on investments 4.65 7.60 5.76 2.45 3.75
--------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS 4.38 7.16 5.26 2.17 3.71
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain -- (0.35) (5.94) (1.06) .--
--------- --------- --------- --------- ---------
TOTAL DISTRIBUTIONS -- (0.35) (5.94) (1.06) .--
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $33.13 $28.75 $21.94 $22.62 $33.10
========= ========= ========= ========= =========
TOTAL RETURN: 15.24% 32.89% 21.96% 10.30% 12.62%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $1,262,346 $1,033,105 $505,342 $120,848 $4,923
Ratio of expenses to average net assets 2.18%+ 2.19% 2.28% 2.44%+ 2.35%+
Ratio of net income (loss) to average net assets (1.87)%+ (1.88)% (1.96)% (1.96)%+ (2.22)%+
Portfolio turnover rate 60.78% 126.70% 164.57% 121.32%++ 60.78%**
</TABLE>
<TABLE>
<CAPTION>
CLASS D
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
-------------- -------------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994
-------------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ............. $28.72 $21.91 $22.61 $21.35 $16.31 $13.32
--------- --------- --------- --------- --------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ..................... (0.27) (0.44) (0.50) (0.40) (0.50) (0.33)
Net realized and unrealized gain
on investments ................................. 4.65 7.60 5.74 2.72 7.45 4.78
--------- --------- --------- --------- --------- --------
TOTAL FROM INVESTMENT OPERATIONS ................. 4.38 7.16 5.24 2.32 6.95 4.45
--------- --------- --------- --------- --------- --------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain ..... -- (0.35) (5.94) (1.06) (1.91) (1.46)
--------- --------- --------- --------- --------- --------
TOTAL DISTRIBUTIONS .............................. -- (0.35) (5.94) (1.06) (1.91) (1.46)
--------- --------- --------- --------- --------- --------
NET ASSET VALUE, END OF PERIOD ................... $33.10 $28.72 $21.91 $22.61 $21.35 $16.31
========= ========= ========= ========= ========= ========
TOTAL RETURN: .................................... 15.25% 32.94% 21.86% 11.07% 42.37% 33.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ......... $1,345,911 $1,228,237 $945,368 $737,979 $609,332 $96,100
Ratio of expenses to average net assets .......... 2.18%+ 2.19% 2.28% 2.43% 2.37% 2.50%
Ratio of net income (loss) to average net assets . (1.87)%+ (1.88)% (1.96)% (1.91)% (2.07)% (2.20)%
Portfolio turnover rate .......................... 60.78% 126.70% 164.57% 121.32% 65.77% 104.08%
</TABLE>
+ Annualized.
++ For the year ended December 31, 1996.
* Commencement of offering of shares.
** For the six months ended June 30, 1999.
See Notes to Financial Statements.
20
<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, 1999, 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, 1998, 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, 1999, by correspondence with the Fund's custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman Communications and Information Fund, Inc. as of June 30, 1999, 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.
DELOITTE & TOUCHE LLP
New York, New York
August 6, 1999
- --------------------------------------------------------------------------------
21
<PAGE>
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
DIRECTOR, Conoco Inc.
JOHN E. MEROW 2, 4
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
TRUSTEE, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
DIRECTOR, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman &Co. Incorporated
- ----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
- --------------------------------------------------------------------------------
22
<PAGE>
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Advisors, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
- --------------------------------------------------------------------------------
23
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The Average Annual Total
Return represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
- -------------------
Adapted from the Investment Company Institute's 1999 MUTUAL FUND FACT BOOK.
24
<PAGE>
THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF
SHAREHOLDERS OR THOSE WHO HAVE RECEIVED THE OFFERING
PROSPECTUS COVERING SHARES OF CAPITAL STOCK OF SELIGMAN
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.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQCI3 6/99 [GRAPHIC OMITTED] Printed on Recycled Paper
