S E L I G M A N
----------------------
COMMUNICATIONS
AND INFORMATION
FUND, INC.
MID-YEAR REPORT
JUNE 30, 2000
----------------------
SEEKING CAPITAL GAIN BY INVESTING
IN COMPANIES OPERATING IN THE
COMMUNICATIONS,
INFORMATION, AND
RELATED INDUSTRIES
[SELIGMAN LOGO]
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...
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 136 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 in the new millennium.
[photo omitted]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
--------------------------------------------------------------------------------
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 .......................... 11
Statement of Operations ...................................... 12
Statements of Changes in Net Assets .......................... 13
Notes to Financial Statements ................................ 14
Financial Highlights ......................................... 20
Report of Independent Auditors ............................... 22
Board of Directors ........................................... 23
Executive Officers AND For More Information .................. 24
Glossary of Financial Terms .................................. 25
--------------------------------------------------------------------------------
<PAGE>
TO THE SHAREHOLDERS
For the six months ended June 30, 2000, Seligman Communications and Information
Fund delivered a total return of 3.77% based on the net asset value of Class A
shares. During the same time period, the Lipper Science & Technology Funds
Average returned 5.93% and the Standard & Poor's 500 Composite Stock Index (S&P
500) returned -0.42%.
As early as June 1999, in an effort to slow the economy, the Federal Reserve
Board began raising interest rates. Over the course of this one-year period, the
federal funds rate was increased by 175 basis points, from 4.75%, before the
June 1999 Fed meeting, to 6.50%, following the most recent 50 basis point
increase in May 2000. Despite these persistent tightening actions, the Fed's
efforts seemed to have little effect on the strong US economy, and investors
soon became concerned that the Fed would be unable to achieve its objective of
an economic "soft landing." Ongoing economic strength could also prompt the Fed
to continue raising interest rates, which could adversely affect corporate
profits and stock prices.
Investor fear finally induced a significant correction in the Nasdaq Composite
Index (a technology-heavy index) in March. From March 10 through May 23, 2000,
this index lost 37% of its market value. During this correction, investors
abandoned some of the high-risk, and often speculative, technology stocks that
had been in demand for most of 1999. This turnaround in the market adversely
affected nearly all technology stocks, even those with more solid fundamentals.
Looking ahead, we think the economy will continue to moderate. We believe that
Seligman Communications and Information Fund, which considers such fundamental
factors as earnings and cash flow, should do well in a more moderate economic
environment. Investors should also work with their financial advisors to ensure
that their portfolios are appropriately balanced based upon their time frames,
their risk tolerances, and their unique financial situations.
While the economic slowdown and the corresponding moderation of the stock market
are healthy long-term trends, the investment environment may in fact become more
challenging. In 1999, many investors were successful simply by buying stocks
that appeared to be on upward price trends. The rest of 2000 may present an
environment that is more complex, making professional management and
diversification, such as is offered through mutual funds, crucial. Mutual funds
provide investors with an opportunity to obtain the services of money managers
who have years of investment experience and the support of research teams to
find the most promising opportunities. Mutual funds can also provide
diversification, which is important for long-term investment success.
Thank you for your continued confidence in Seligman Communications and
Information Fund. A discussion with your Portfolio Manager, as well as the
Fund's investment results, portfolio of investments and financial statements,
follows this letter. 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 11, 2000
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 2000?
A: The Fund posted a total return of 3.77% based on the net asset value of
Class A shares, while the Standard & Poor's Composite Stock Index (S&P 500)
returned -0.42%, and the Lipper Science & Technology Funds Average returned
5.93%.
Q: THE TECHNOLOGY SECTOR EXPERIENCED A SIGNIFICANT CORRECTION DURING THE FIRST
SIX MONTHS OF 2000. WHAT FACTORS DO YOU BELIEVE CONTRIBUTED TO THIS EVENT?
A: The Nasdaq Composite Index peaked at 5049 on March 10, fell as low as 3165
by May 23, and ended the period at 3966. In just over two months, the Index
had lost 37% of its market value -- a sharp correction. In June, technology
stocks staged a slight rally, but remained substantially down from their
highs.
Uncertainty surrounding monetary policy contributed to this selloff. The
Federal Reserve Board had been increasing rates for nearly a year, yet the
economy continued to expand, and at a strong pace. Market participants began
to worry that more rate hikes, and possibly even a recession, could result
if the economy did not begin to slow. These concerns prompted a flight to
quality, which was particularly damaging to the technology sector.
The court ruling against Microsoft in the US government's anti-trust lawsuit
was another factor in the Nasdaq's decline. The ruling, and the uncertainty
leading to the ruling, led shares of Microsoft lower, and placed downward
pressure on the entire software industry.
In addition, initial public offerings (IPOs) were brought to the market at a
record pace in the first quarter of 2000. There were over 100 IPOs for
high-tech companies during this time, and the majority of these were for
Internet companies. A large number of lock-up periods (the amount of time
company insiders and venture capitalists must wait before selling shares)
also expired in the first quarter, further flooding the market as these
shares were sold. At the same time, investors were beginning to worry about
the combination of high valuations and low, or nonexistent, earnings for
many of these companies.
Q: WHAT SECTORS BENEFITED THE FUND'S PERFORMANCE DURING THIS TIME?
A: One of the best-performing areas for the Fund was the semiconductor area,
which at period-end was the Fund's largest industry weighting. This strong
performance was due to a broad-based upturn in the industry, driven by
explosive growth and demand, particularly in wireless handsets, personal
computers, and consumer
[PHOTOGRAPH]
WEST COAST TECHNOLOGY TEAM: (STANDING, FROM LEFT) MICHAEL GUTHRIE, PAUL WICK
(PORTFOLIO MANAGER), MARIANNE HURLOW (ADMINISTRATIVE ASSISTANT), (SEATED, FROM
LEFT) MATTHEW ALFANO, PATRICK RENDA, (NOT PICTURED) MANFRED KRIKKE, VISHAL
SALUJA
[PHOTOGRAPH]
EAST COAST TECHNOLOGY TEAM: (STANDING FROM LEFT) LAWRENCE ROSSO, SHANEAN AUSTIN
(ADMINISTRATIVE ASSISTANT), (SEATED) STORM BOSWICK, (NOT PICTURED) GREGORY COTE,
STEVEN WERBER, JAMES (HANK) SWIGGETT
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
PAUL H. WICK
electronics. The semiconductor industry also benefited from the continued
economic recovery in Asia.
Electronic manufacturing services and electronics capital equipment
companies also performed well during the first half. These companies
benefited from a continuing trend for large communications systems companies
to outsource the manufacturing of their products. In addition, increasing
demand has produced a favorable operating environment for electronic
manufacturing, particularly for flat panel displays.
Q: WHAT SECTORS DETRACTED FROM THE FUND'S PERFORMANCE?
A: The software industry, which at period-end was the Fund's second-largest
industry weighting, was the largest industry detractor from performance. The
government lawsuit against Microsoft, and the subsequent ruling to break up
the company, dragged the entire sector down.
The Internet/online industry was one of the worst-performing sectors in the
market overall during the period, and detracted somewhat from overall Fund
performance. Fortunately, the Fund has been underweighted in this area for
some time because of our belief that the sector was, for the most part,
overvalued and due for a correction.
Q: WHAT HOLDINGS BENEFITED THE FUND'S PERFORMANCE?
A: American Power Conversion was a strong performer for the Fund because of
excitement over the company's progress in marketing their uninterruptible
power supply devices to Internet data centers. American Power Conversion is
the world leader in these devices, which protect computers from power losses
and surges.
Companies that sell semiconductor devices for wireless base stations also
performed well. One such company was Integrated Device Technology, and it
was one of the best-performing holdings for the Fund. The company had
better-than-expected earnings and revenue growth, driven by the company's
re-focusing of its product line toward communications components.
Advanced Micro Devices was one of the best-performing holdings for the Fund
during this time. This company benefited from its success in the PC
microprocessor market, as well as in flash memory, where it has benefited
from the insatiable demand for flash memory devices used in cellular
telephones.
Q: WHAT HOLDINGS DETRACTED FROM THE FUND'S PERFORMANCE?
A Within computer hardware and peripherals, imaging and printing delivered
poor performance because of delays in product introductions and a general
downturn in the copier market. In addition, many of these companies derive a
large portion of their sales from Europe. European currencies declined
significantly against the dollar, which negatively impacted revenue
comparisons for American multi-national companies with significant presence
in Europe. One of the Fund's holdings in this group was Electronics for
Imaging, and this holding had the single biggest negative impact on
performance.
The Fund was hurt by its holding in Computer Associates International
because of a significant and general slowdown in mainframe software sales.
We believe that sales were disappointing during the first half because many
companies had spent a large portion of their information technology budgets
on dealing with Year-
--------------------------------------------------------------------------------
A TEAM APPROACH
Seligman Communications and Information Fund is managed by the Seligman Global
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.
--------------------------------------------------------------------------------
3
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGER,
PAUL H. WICK
2000-related issues at the end of 1999 and the beginning of 2000.
Synopsys was another poor performer. The company has been considering
changing some of its accounting procedures, and the uncertainty over this
adversely affected the share price. We believe that the market overreacted
to this news and that the stock is currently undervalued. We thus bought
additional shares of this stock during the six-month period.
Q: DID YOU MAKE ANY LARGE PORTFOLIO CHANGES DURING THE PERIOD?
A: We made some purchases to gain more exposure to what we believe is a
significant opportunity in wireless handsets. We added Sawtek and Vishay
Intertechnology, electronic components companies that have large percentages
of their sales in handsets. This market is expected to grow from 260 million
handsets in 1999 to 430 million in the year 2000 and projections for 2001
are between 580 and 650 million handsets. Companies that sell flash memory,
such as Advanced Micro Devices, also have a big exposure to handsets.
During the period, we significantly reduced the Fund's weighting in media
stocks because we felt that valuations had become excessive. We sold all the
Fund's holdings in Viacom, Fox Entertainment Group, and MediaOne Group.
Q: WHAT IS YOUR OUTLOOK FOR THE TECHNOLOGY SECTOR?
A: Technology stocks are likely to remain volatile over the short term. Over
the long term, however, we remain enthusiastic about the sector. We are most
optimistic about component suppliers that are positioned to benefit from
communications infrastructure spending, and about companies involved in
building the infrastructure of the Internet.
Securities That Had the Greatest Impact on Net Asset Value (NAV)
FOR THE SIX MONTHS ENDED JUNE 30, 2000
TOP CONTRIBUTORS
IMPACT
SECURITY ON NAV
------------ --------
Check Point Software Technologies ................... $1.33
Advanced Micro Devices .............................. 1.14
American Power Conversion ........................... 0.54
Intel ............................................... 0.52
Novellus Systems .................................... 0.46
Integrated Device Technology ........................ 0.45
Lattice Semiconductor ............................... 0.41
Rational Software ................................... 0.41
Amkor Technology .................................... 0.26
Creative Technology ................................. 0.25
----
Total ............................................. $5.77
====
TOP DETRACTORS
IMPACT
SECURITY ON NAV
------------ --------
Electronics for Imaging ............................ $0.74
Synopsys ........................................... 0.64
Adaptec ............................................ 0.57
Parametric Technology .............................. 0.56
Compuware .......................................... 0.52
Microsoft .......................................... 0.52
MarchFirst ......................................... 0.29
C-Cube Microsystems ................................ 0.24 (1)
BMC Software ....................................... 0.22
Computer Associates International .................. 0.22
----
Total ............................................ $4.52
====
----------
(1) Includes $0.02 relating to shares of Harmonic received in a spin-off.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
-----------------------------------------------------------------------------------
CLASS B CLASS C CLASS D
SINCE SINCE SINCE
SIX ONE FIVE 10 INCEPTION INCEPTION INCEPTION
MONTHS* YEAR YEARS YEARS 4/22/96 5/27/99 5/3/93
----------- ---------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (1.17)% 49.15% 25.23% 28.01% n/a n/a n/a
Without Sales Charge 3.77 56.58 26.45 28.63 n/a n/a n/a
CLASS B**
With CDSC+ (1.61) 50.35 n/a n/a 31.78% n/a n/a
Without CDSC 3.39 55.35 n/a n/a 31.98 n/a n/a
CLASS C**
With Sales Charge and CDSC 1.31 52.85 n/a n/a n/a 64.23% n/a
Without Sales Charge and CDSC 3.34 55.37 n/a n/a n/a 66.62 n/a
CLASS D**
With 1% CDSC 2.37 54.37 n/a n/a n/a n/a n/a
Without CDSC 3.37 55.37 25.48 n/a n/a n/a 34.34%
LIPPER SCIENCE & TECHNOLOGY
FUNDS AVERAGE*** 5.93 86.72 42.30 31.93 44.97++ 97.36o 39.68+++
S&P500*** (0.42) 7.24 23.80 17.80 23.09++ 12.12o 20.60+++
</TABLE>
NET ASSET VALUE
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 1999
-------------- -------------------- --------------
CLASS A $49.03 $47.25 $35.54
CLASS B 44.88 43.41 33.13
CLASS C 44.84 43.39 33.10
CLASS D 44.84 43.38 33.10
CAPITAL GAIN INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000
REALIZED $7.395oo
UNREALIZED 9.337ooo
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
of the Lipper Average 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 2% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o From May 31, 1999.
oo Excludes $2.832 per share of net gain realized in 1999, which was paid on
July 28, 2000.
ooo Represents the per share amount of net unrealized appreciation of
portfolio securities as of June 30, 2000.
5
<PAGE>
PERFORMANCE OVERVIEW
GROWTH OF AN ASSUMED $10,000 INVESTMENT
CLASS A SHARES
JUNE 30, 1990 TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
6/30/90 ............ 9529
6562
7430
10044
6/30/91 ............ 8871
10178
11510
11888
6/30/92 ............ 10684
10724
13503
13689
6/30/93 ............ 15402
17784
18246
19047
6/30/94 ............ 17580
22810
24686
28158
6/30/95 ............ 36540
41361
36397
33497
6/30/96 ............ 33545
35606
39622
38594
6/30/97 ............ 45234
56475
48714
55041
6/30/98 ............ 53889
44963
65239
65091
6/30/99 ............ 75451
78699
113854
131902
6/30/00 ........... 118144
$9,529*
Initial Amount Invested
$118,144
Total Value at June 30, 2000
CLASS B SHARES
APRIL 22, 1996+ TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
4/22/96 ............ 10000
6/30/96 ............ 9372
9930
12/31/96 ........... 11029
10722
6/30/97 ............ 12546
15632
12/31/97 ........... 13451
15168
6/30/98 ............ 14818
12341
12/31/98 ........... 17875
17801
6/30/99 ............ 20599
21438
12/31/99 ........... 30952
35794
6/30/00 ............ 32000
$10,000
Initial Amount Invested
$32,000**
Total Value at June 30, 2000
CLASS C SHARES
MAY 27, 1999+ TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
5/27/99 ............ 9899
6/30/99 ............ 11149
8/31/99 ............ 11209
10/31/99 ........... 12647
12/31/99 ........... 16762
2/29/00 ............ 19064
4/30/00 ............ 18790
6/30/00 ............ 17322
$9,899*
Initial Amount Invested
$17,322**
Total Value at June 30, 2000
CLASS D SHARES
MAY 3, 1993+ TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
5/3/93 ............. 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
55519
80184
92716
6/30/00 ............ 82882
$10,000
Initial Amount Invested
$82,882
Total Value at June 30, 2000
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 2% or 1% CDSC for Class B or Class C shares,
respectively.
+ Inception date.
6
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
JUNE 30, 2000
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
----------------------------
JUNE 30, DECEMBER 31,
ISSUES COST VALUE 2000 1999
-------- ---------------------- ---------------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STOCKS AND CONVERTIBLE ISSUES:
Communications Infrastructure .................... 12 $ 411,078,574 $ 456,923,618 3.9 3.0
Communications Services .......................... 8 139,773,887 110,229,060 0.9 4.7
Computer and Business Services ................... 13 817,821,429 694,929,515 5.9 3.8
Computer Hardware/Peripherals .................... 14 1,274,204,228 1,354,384,180 11.4 12.0
Computer Software ................................ 24 1,809,167,247 2,013,860,014 17.0 24.3
Electronic Components ............................ 6 562,053,509 575,864,356 4.9 --
Electronic Manufacturing Services ................ 5 411,332,579 624,034,375 5.3 3.6
Electronics Capital Equipment .................... 13 1,089,110,361 1,792,892,325 15.2 11.4
Internet/Online .................................. 66 102,449,946 117,041,796 1.0 2.9
Media ............................................ 15 865,771,636 1,086,150,000 9.2 14.2
Semiconductors ................................... 22 1,672,340,373 2,657,732,847 22.5 16.9
Miscellaneous .................................... 8 41,289,650 51,644,599 0.4 0.3
---- -------------- ---------------- ------ ------
206 9,196,393,419 11,535,686,685 97.6 97.1
SHORT-TERM HOLDINGS AND
OTHER ASSETS LESS LIABILITIES .................. 4 289,690,700 289,690,700 2.4 2.9
---- -------------- ---------------- ------ ------
NET ASSETS ......................................... 210 $9,486,084,119 $11,825,377,385 100.0 100.0
==== ============== ================ ====== ======
</TABLE>
LARGEST INDUSTRIES
JUNE 30, 2000
[the following represents a bar chart in the printed piece]
SEMI-CONDUCTORS ........................... $2,657,732,847
COMPUTER SOFTWARE ......................... $2,013,860,014
ELECTRONICS CAPITAL EQUIPMENT ............. $1,792,892,235
COMPUTER HARDWARE/PERIPHERALS ............. $1,354,384,180
MEDIA ..................................... $1,086,150,000
7
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
-----------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/00
------------- -------------- -------------
Adaptec ............................. 4,190,000 7,500,000
Autodesk ............................ 2,500,000 5,100,000
BMC Software ........................ 2,250,000 3,000,000
Computer Associates
International ..................... 2,350,000 3,600,000
CTS ................................. 1,600,000 1,600,000
Fairchild Semiconductor
International ..................... 2,894,700 3,800,000
Microsoft ........................... 1,390,000 5,500,000 (1)
National Semiconductor .............. 1,800,000 3,300,000
Sawtek .............................. 2,003,400 2,003,400
Vishay Intertechnology .............. 3,250,000 4,500,000 (2)
SHARES
----------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/00
------------- -------------- -------------
Analog Devices ........................ 400,000 --
Asyst Technologies .................... 650,000 --
AT&T--Liberty Media Group
(Class A) ........................... 2,250,000 --
Check Point Software
Technologies ........................ 2,800,000(3) 800,000
Citrix Systems ........................ 400,000 --
Entrust Technologies .................. 800,000 --
Fox Entertainment Group
(Class A) ........................... 3,000,000 --
MediaOne Group ........................ 2,200,000 --
Sanmina ............................... 700,000 840,000 (4)
Viacom (Class B)(5) ................... 3,200,000 --
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 810,000 shares received resultingfromamergerofVisiointoMicrosoft.
(2) Includes 1,250,000 shares received as a result of a 3-for-2 stock split.
(3) Includes 1,800,000 shares received as a result of a 2-for-1 stock split.
(4)FormerlyHadco,includes240,000sharesreceivedresultingfrommergerwith Sanmina.
(5) Formerly CBS.
--------------------------------------------------------------------------------
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 2000
SECURITY VALUE
------------ -----------------
Novellus Systems ............................... $479,937,638
AMFM ........................................... 448,500,000
Microsoft ...................................... 439,828,125
American Power Conversion ...................... 367,031,250
Amkor Technology ............................... 335,171,875
Intel .......................................... 334,140,625
Lattice Semiconductor .......................... 318,118,750
Integrated Device Technology ................... 252,000,000
SCI Systems .................................... 250,800,000
Symantec ....................................... 237,462,500
8
<PAGE>
Portfolio of Investments
JUNE 30, 2000
SHARES VALUE
------------ -------------------
COMMON STOCKS 96.2%
COMMUNICATIONS
INFRASTRUCTURE 3.8%
ALLTEL 1,000,000 $ 61,937,500
Alteon Websystems* 400,000 40,012,500
Aspect Communications* 700,000 27,496,875
Ciena* 200,000 33,331,250
Cisco Systems* 1,200,000 76,237,500
Corning 200,000 53,975,000
EXFO Electro-Optical
Engineering* (Canada) 71,900 3,159,106
Gilat Satellite Networks* (Israel) 400,000 27,762,500
Nokia (ADRs) (Finland) 1,250,000 62,421,875
Nortel Networks (Canada) 300,000 20,475,000
ONI Systems*# 158,290 14,843,651
Tellabs* 500,000 34,234,375
Tut Systems*# 1,263 36,173
-------------
455,923,305
-------------
COMMUNICATIONS
SERVICES 0.6%
Intermedia Communications* 955,400 28,363,437
Level 3 Communications* 300,000 26,390,625
Qwest Communications
International* 400,000 19,875,000
-------------
74,629,062
-------------
COMPUTER AND
BUSINESS SERVICES 5.9%
Amdocs* 400,000 30,700,000
Concord EFS* 1,000,000 26,000,000
CSG Systems International*o 2,970,000 166,598,437
Electronic Data Systems 1,000,000 41,250,000
First Data 2,100,000 104,212,500
Galileo International 3,000,000 62,625,000
Gartner Group (Class A)* 2,000,000 24,000,000
MarchFirst* 2,700,000 49,359,375
Modis Professional Services* 3,000,000 26,625,000
Navigant Consulting*o 3,000,000 12,750,000
StorageNetworks* 40,900 3,692,503
SunGard Data Systems* 4,745,700 147,116,700
-------------
694,929,515
-------------
COMPUTER HARDWARE/
PERIPHERALS 11.4%
Adaptec*o 7,500,000 170,859,375
American Power Conversion* 9,000,000 367,031,250
Apex*o 2,100,000 91,743,750
Comdisco 2,500,000 55,781,250
Creative Technologyo
(Singapore) 6,996,300 167,255,296
Electronics for Imaging*o 5,700,000 143,925,000
Lexmark International
Group (Class A)* 1,500,000 100,875,000
Mobility Electronics* 236,600 3,083,194
SHARES VALUE
------------ -------------------
COMPUTER HARDWARE/
PERIPHERALS (CONTINUED)
Mobility Electronics*# 344,974 $ 3,596,354
Mobility Electronics
(warrants)*# 666,666 3,474,997
Pitney Bowes 2,500,000 100,000,000
Xircom*o 2,969,000 141,120,281
-------------
1,348,745,747
-------------
COMPUTER SOFTWARE 16.8%
3DO*o 2,500,000 19,570,312
Autodesko 5,100,000 177,065,625
BMC Software* 3,000,000 109,406,250
Check Point Software
Technologies* (Israel) 800,000 169,875,000
Computer Associates
International 3,600,000 184,275,000
Compuware* 1,452,000 15,019,125
CrossWorlds Software*# 375,579 5,464,674
HNC Software* 400,000 24,750,000
Macromedia* 900,000 86,990,625
Microsoft* 5,500,000 439,828,125
Parametric Technology* 8,500,000 93,234,375
Preview Systems*# 297,619 3,264,974
Rational Software* 1,800,000 167,231,250
Remedy* 1,500,000 83,671,875
Symantec*o 4,400,000 237,462,500
Synopsys*o 5,000,000 172,656,250
Tecnomatix
Technologies* (Israel) 252,900 3,429,956
-------------
1,993,195,916
-------------
ELECTRONIC COMPONENTS 4.9%
Amphenol (Class A)* 1,000,000 66,187,500
Arrow Electronics* 2,600,000 80,600,000
Avnet 1,200,000 71,100,000
CTSo 1,600,000 72,000,000
Sawtek* 2,003,400 115,258,106
Vishay Intertechnology* 4,500,000 170,718,750
-------------
575,864,356
-------------
ELECTRONIC MANUFACTURING
SERVICES 5.3%
ACT Manufacturing*o 1,000,000 46,468,750
Advanced Micro Devices* 2,500,000 193,125,000
Flextronics International*
(Singapore) 900,000 61,846,875
Sanmina* 840,000 71,793,750
SCI Systems* 6,400,000 250,800,000
-------------
624,034,375
-------------
ELECTRONICS CAPITAL
EQUIPMENT 15.2%
Applied Materials* 1,200,000 108,787,500
ATMI* 850,000 39,498,437
Cognex*o 2,400,000 124,125,000
Credence Systems*o 3,200,000 176,500,000
----------
See footnotes on page 10.
9
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
SHARES VALUE
------------ -------------------
ELECTRONICS CAPITAL
EQUIPMENT (CONTINUED)
Electro Scientific Industries*o 2,400,000 $ 105,675,000
KLA-Tencor* 1,700,000 99,609,375
Kulicke & Soffa Industries*o 1,500,000 88,828,125
Lam Research* 2,900,000 108,840,625
Novellus Systems*o 8,480,400 479,937,638
Orbotech*o (Israel) 1,800,000 167,231,250
Teradyne* 2,500,000 183,750,000
Veeco Instrumentso 1,500,000 110,109,375
------------
1,792,892,325
------------
INTERNET/ONLINE 0.3%
Blaze Software*# 140,056 1,530,112
LetsBuyIt.com*# (Netherlands) 287,130 1,921,173
net.Genesis*# 451,807 6,948,646
P-com*# 2,626,970 12,629,978
Rx.com*# 1,428,572 4,285,716
Software.com*# 7,436 482,875
Software.com*# 66,923 7,387,881
------------
35,186,381
------------
MEDIA 9.2%
Ackerley Group 1,000,000 11,750,000
Adelphia Communications
(Class A)* 2,000,000 93,687,500
AMFM* 6,500,000 448,500,000
Cablevision Systems
(Class A)* 1,500,000 101,812,500
Charter Communications* 4,500,000 74,109,375
Comcast (Class A)* 1,000,000 40,531,250
EchoStar Communications*
(Class A) 1,200,000 39,712,500
Infinity Broadcasting
(Class A)* 3,000,000 109,312,500
Rogers Communications
(Class B)* (Canada) 1,500,000 42,750,000
Time Warner 1,000,000 76,000,000
USA Networks* 1,500,000 32,484,375
Ziff-Davis* 1,000,000 9,000,000
Ziff-Davis*# 500,000 4,500,000
------------
1,084,150,000
------------
SEMICONDUCTORS 22.4%
Amkor Technology* 9,500,000 335,171,875
Atmel* 1,800,000 66,375,000
C-Cube Microsystems*o 2,500,000 49,062,500
Centillium Communications*# 400,000 22,010,000
Conexant Systems* 1,000,000 48,718,750
Cypress Semiconductor* 2,200,000 92,950,000
Dallas Semiconductor 2,725,600 111,068,200
Fairchild Semiconductor
International* 3,800,000 153,900,000
Integrated Device
Technology* 4,200,000 252,000,000
SHARES OR
PRIN. AMT. VALUE
------------ -------------------
SEMICONDUCTORS (CONTINUED)
Intel 2,500,000 shs. $ 334,140,625
International Rectifier* 2,250,000 126,000,000
Lattice Semiconductor*o 4,600,000 318,118,750
Linear Technology 1,200,000 76,687,500
Mattson Technology* 240,500 7,846,313
Maxim Integrated Products* 500,000 33,953,125
Microchip Technology* 3,877,000 226,319,875
Micron Technology* 1,500,000 132,093,750
National Semiconductor* 3,300,000 187,275,000
QuickLogic* 785,300 17,644,709
SCG Holding* 2,700,000 59,146,875
------------
2,650,482,847
------------
MISCELLANEOUS 0.4%
Capstone Turbine* 143,500 6,488,891
Capstone Turbine*# 150,000 5,426,250
Sensormatic Electronics* 2,000,000 31,625,000
------------
43,540,141
------------
TOTAL COMMON STOCKS
(Cost $9,033,401,107) 11,373,573,970
------------
CONVERTIBLE
BONDS 0.3%
COMMUNICATIONS
SERVICES 0.2%
NTL, 5.75%,
due 12/15/2009+ $40,000,000 31,600,000
------------
COMPUTER HARDWARE/
PERIPHERALS
Candescent Technologies,
7%, due 5/1/2003 3,000,000 2,340,000
------------
COMPUTER SOFTWARE 0.1%
Activision, 6.75%,
due 1/1/2005+ 10,000,000 6,500,000
------------
TOTAL CONVERTIBLE BONDS
(Cost $53,003,150) 40,440,000
------------
CONVERTIBLE PREFERRED
STOCKS 1.0%
(Cost $109,744,866) 121,428,419
-------------
CONVERTIBLE PROMISSORY
NOTES# (Cost $244,296) 244,296
-------------
SHORT-TERM
HOLDINGS 1.8%
(Cost $209,000,000) 209,000,000
-------------
TOTAL
INVESTMENTS 99.3%
(Cost $9,405,393,419) 11,744,686,685
OTHER ASSETS
LESS LIABILITIES 0.7% 80,690,700
---------------
NET ASSETS 100.0% $11,825,377,385
===============
----------
* Non-income producing security.
+ Rule 144A security.
# Restricted security (See note 8).
o Affiliated issuer (Fund's holdings representing 5% or more of the outstanding
voting securities) (See note 9).
See Notes to Financial Statements.
10
<PAGE>
Statement of Assets and Liabilities
JUNE 30, 2000
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
Stocks and convertible issues* (cost $9,196,149,123) ..... 11,535,442,389
Short-term holdings (cost $209,244,296) .................. 209,244,296 $11,744,686,685
------------
Cash ........................................................................... 976,724
Receivable for securities sold ................................................. 138,084,486
Receivable for Capital Stock sold .............................................. 27,224,599
Expenses prepaid to shareholder service agent .................................. 1,496,447
Receivable for interest and dividends .......................................... 1,250,393
Other .......................................................................... 353,403
--------------
TOTAL ASSETS ................................................................... 11,914,072,737
--------------
LIABILITIES:
Payable for securities purchased ............................................... 54,859,836
Payable for Capital Stock repurchased .......................................... 13,961,401
Accrued expenses and other ..................................................... 19,874,115
--------------
TOTAL LIABILITIES .............................................................. 88,695,352
--------------
NET ASSETS .....................................................................$11,825,377,385
==============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.10 par value; 1,000,000,000 shares
authorized 250,527,913 shares outstanding):
Class A ...................................................................... $ 14,066,578
Class B ...................................................................... 5,652,476
Class C ...................................................................... 715,927
Class D ....................................................................... 4,617,811
Additional paid-in capital ..................................................... 6,994,564,152
Accumulated net investment loss ................................................ (79,067,390)
Undistributed net realized gain ................................................ 2,545,534,565
Net unrealized appreciation of investments ..................................... 2,339,293,266
--------------
NET ASSETS .....................................................................$11,825,377,385
==============
NET ASSET VALUE PER SHARE:
CLASS A ($6,896,773,231 / 140,665,775 shares) .................................. $49.03
======
CLASS B ($2,536,794,682 / 56,524,761 shares) ................................... $44.88
======
CLASS C ($321,045,910 / 7,159,267 shares) ...................................... $44.84
======
CLASS D ($2,070,763,562 / 46,178,110 shares) ................................... $44.84
======
</TABLE>
----------
* Includes affiliated issuers (issuers in which the Fund's holdings represent 5%
or more of the outstanding voting securities) with a cost of $2,534,840,330
and a value of $3,240,063,211.
See Notes to Financial Statements.
11
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ................................................ $ 11,397,610
Dividends* .............................................. 4,884,868
--------------
TOTAL INVESTMENT INCOME .................................................. $ 16,282,478
EXPENSES:
Management fee .......................................... 48,192,815
Distribution and service fees ........................... 33,009,568
Shareholder account services ............................ 11,441,762
Shareholder reports and communications .................. 1,025,088
Custody and related services ............................ 826,849
Registration ............................................ 326,148
Auditing and legal fees ................................. 73,530
Directors' fees and expenses ............................ 62,501
Miscellaneous ........................................... 72,212
--------------
TOTAL EXPENSES ........................................................... 95,030,473
-----------
NET INVESTMENT LOSS ...................................................... (78,747,995)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments** ...................... 1,852,569,184
Net realized loss on foreign currency transactions ...... (185,393)
Net change in unrealized appreciation of investments .... (1,412,070,950)
--------------
NET GAIN ON INVESTMENTS .................................................. 440,312,841
-----------
INCREASE IN NET ASSETS FROM OPERATIONS ................................... $361,564,846
===========
</TABLE>
----------
* Includes dividends from affiliated issuers of $532,578.
** Includes net realized gain from affiliated issuers of $146,968,037.
See Notes to Financial Statements.
12
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment loss ............................................. $ (78,747,995) $ (96,752,843)
Net realized loss on foreign currency transactions .............. (185,393) --
Net realized gain on investments ................................ 1,852,569,184 2,135,821,529
Net change in unrealized appreciation of investments ............ (1,412,070,950) 2,446,649,764
-------------- --------------
INCREASE IN NET ASSETS FROM OPERATIONS .......................... 361,564,846 4,485,718,450
-------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A ...................................................... -- (669,482,230)
Class B ...................................................... -- (229,721,991)
Class C ...................................................... -- (8,035,935)
Class D ...................................................... -- (221,390,219)
-------------- --------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ....................... -- (1,128,630,375)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............................... 1,486,068,127 1,333,651,718
Exchanged from associated Funds ................................. 656,944,324 4,936,129,014
Value of shares issued in payment of gain distributions ......... -- 1,046,665,050
-------------- --------------
Total ........................................................... 2,143,012,451 7,316,445,782
-------------- --------------
Cost of shares repurchased ...................................... (803,480,672) (1,200,768,449)
Exchanged into associated Funds ................................. (582,425,476) (4,917,996,975)
-------------- --------------
Total ........................................................... (1,385,906,148) (6,118,765,424)
-------------- --------------
INCREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS ................................... 757,106,303 1,197,680,358
-------------- --------------
INCREASE IN NET ASSETS .......................................... 1,118,671,149 4,554,768,433
NET ASSETS:
Beginning of period ............................................. 10,706,706,236 6,151,937,803
-------------- --------------
END OF PERIOD (including accumulated net investment loss of
$79,067,390 and $134,002, respectively) ...................... $11,825,377,385 $10,706,706,236
============== ==============
</TABLE>
----------
See Notes to Financial Statements.
13
<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-specific 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 accounting principles generally accepted in the
United States of America, 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 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. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are
maintained in USdollars. The market value of investment securities, other
assets and liabilities denominated in foreign currencies are translated into
US dollars at the daily rate of exchange as reported by a pricing service.
Purchases and sales of investment securities, income, and expenses are
translated into US dollars at the rate of exchange prevailing on the
respective dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the portfolio.
Similarly, the Fund separates the effect of changes in foreign exchange
rates from the fluctuations arising from changes in the market prices of
portfolio securities sold during the period.
C. 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.
D. 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.
E. 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, 2000, distribution and service fees were the only
class-specific expenses.
F. 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
values per share of the Fund.
On July 20, 2000, distributions of $1.487 and $1.345 were declared from
net realized short- and long-term gains, respectively, from investment
transactions. The capital gains were paid on July 28, 2000, to shareholders
of record on July 20, 2000.
3. PURCHASES AND SALES OF SECURITIES-- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments,
for the six months
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ended June 30, 2000, amounted to $6,254,196,743 and $5,554,068,182,
respectively.
At June 30, 2000, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio securities
amounted to $3,230,610,705 and $891,317,439, respectively.
4. SHORT-TERM INVESTMENTS -- At June 30, 2000, 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 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 0.81% 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
$1,530,173 from sales of Class A shares. Commissions of $12,231,443 and
$2,009,072 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,
2000, fees incurred under the Plan aggregated $8,796,762, 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, 2000, 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 $12,341,712, $1,213,863, and $10,657,231,
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, 2000, such charges amounted to $251,438.
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, 2000, amounted to
$620,980.
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, 2000,
Seligman Services, Inc. received commissions of $271,110 from the sales of
shares of the Fund. Seligman Services, Inc. also received distribution and
service fees of $859,838, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $11,441,762 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, 2000, of $118,844 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
6. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $825 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 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 0.10% 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 in June 2001, but is renewable annually with
the consent of the participating banks. For the six months ended June 30, 2000,
the Fund did not borrow from the credit facility.
7. 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
-------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales of shares 14,344,877 $ 728,415,793 19,191,234 $ 679,313,446
Exchanged from
associated Funds 9,793,667 493,654,741 100,589,099 3,341,263,554
Shares issued in payment
of gain distributions -- -- 15,156,717 623,395,320
---------- ------------- ----------- -------------
Total 24,138,544 1,222,070,534 134,937,050 4,643,972,320
---------- ------------- ----------- -------------
Cost of shares
repurchased (10,713,398) (544,581,764) (23,534,616) (796,579,119)
Exchanged into
associated Funds (9,376,590) (474,374,423) (101,395,187)(3,377,883,682)
---------- ------------- ----------- -------------
Total (20,089,988)(1,018,956,187) (124,929,803)(4,174,462,801)
---------- ------------- ----------- -------------
Increase 4,048,556 $ 203,114,347 10,007,247 $ 469,509,519
========== ============= =========== =============
<CAPTION>
CLASS B
---------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
-------------------- ------------------
SHARES AMOUNT SHARES AMOUNT
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales of shares 8,995,667 $418,972,355 11,573,878 $390,212,142
Exchanged from
associated Funds 1,969,338 90,792,672 3,882,302 129,678,705
Shares issued in payment
of gain distributions -- -- 5,592,954 211,511,269
---------- ----------- ---------- -----------
Total 10,965,005 509,765,027 21,049,134 731,402,116
---------- ----------- ---------- -----------
Cost of shares
repurchased (2,716,184) (125,913,370) (5,104,898) (163,411,419)
Exchanged into
associated Funds (1,103,811) (50,924,379) (2,499,670) (80,325,274)
---------- ----------- ---------- -----------
Total (3,819,995) (176,837,749) (7,604,568) (243,736,693)
---------- ----------- ---------- -----------
Increase 7,145,010 $332,927,278 13,444,566 $487,665,423
========= ============ ========== ============
<CAPTION>
CLASS C
---------------------------------------------------
SIX MONTHS ENDED MAY 27, 1999*
JUNE 30, 2000 TO DECEMBER 31, 1999
------------------ --------------------
SHARES AMOUNT SHARES AMOUNT
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales of shares 4,597,760 $214,748,041 2,611,622 $ 97,637,867
Exchanged from
associated Funds 266,974 12,454,176 295,449 11,828,070
Shares issued in payment
of gain distributions -- -- 199,577 7,529,722
--------- ------------ ---------- -----------
Total 4,864,734 227,202,217 3,106,648 116,995,659
--------- ------------ ---------- -----------
Cost of shares
repurchased (246,434) (11,518,563) (26,765) (1,025,697)
Exchanged into
associated Funds (234,244) (10,987,440) (304,672) (12,220,680)
--------- ------------ ---------- -----------
Total (480,678) (22,506,003) (331,437) (13,246,377)
--------- ------------ ---------- -----------
Increase 4,384,056 $204,696,214 2,775,211 $103,749,282
========= ============ ========= ============
<CAPTION>
CLASS D
---------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
-------------------- ------------------
SHARES AMOUNT SHARES AMOUNT
--------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales of shares 2,671,425 $123,931,938 5,110,205 $ 166,488,263
Exchanged from
associated Funds 1,299,731 60,042,735 46,979,951 1,453,358,685
Shares issued in payment
of gain distributions -- -- 5,404,317 204,228,739
---------- ------------ ----------- -------------
Total 3,971,156 183,974,673 57,494,473 1,824,075,687
---------- ------------ ----------- -------------
Cost of shares
repurchased (2,614,178) (121,466,975) (7,678,744) (239,752,214)
Exchanged into
associated Funds (1,004,909) (46,139,234) (46,751,967) (1,447,567,339)
---------- ------------ ----------- -------------
Total (3,619,087) (167,606,209) (54,430,711) (1,687,319,553)
---------- ------------ ----------- -------------
Increase 352,069 $ 16,368,464 3,063,762 $ 136,756,134
========== ============ =========== ==============
</TABLE>
* Commencement of offering of shares.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
8. RESTRICTED SECURITIES -- At June 30, 2000, the Fund owned 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 generally 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, 2000, are as follows:
<TABLE>
<CAPTION>
INVESTMENTS ACQUISITION DATES COST VALUE
---------- --------------- ---------- ----------
<S> <C> <C> <C>
Common Stocks:
Blaze Software 12/31/99 $ 999,999 $ 1,530,112
Capstone Turbine 2/24/00 1,000,000 5,426,250
Centillium Communications 4/30/99 2,000,000 22,010,000
CrossWorlds Software 12/23/97 4,000,000 4,663,464
CrossWorlds Software 10/1/99 374,999 801,210
LetsBuyIt.com* 12/22/99 1,000,371 1,921,173
Mobility Electronics 5/4/99 999,996 1,198,781
Mobility Electronics 10/29/99 1,999,998 2,397,573
Mobility Electronics (warrants) 10/29/99 6,666 3,474,997
net.Genesis 6/10/99 2,000,066 6,948,646
ONI Systems 12/30/99 1,000,779 14,843,651
P-Com 1/14/00 14,999,998 12,629,978
Preview Systems 7/8/99 2,000,000 3,264,974
Rx.com* 5/24/99 & 6/17/99 5,000,002 4,285,716
Software.com 2/22/00 200,003 482,875
Software.com 2/22/00 1,799,997 7,387,881
Tut Systems 6/30/98 57,782 36,173
Ziff-Davis 3/12/99 7,562,500 4,500,000
----------- ----------
47,003,156 97,803,454
----------- ----------
Convertible Preferred Stocks*:
Access Data (Series A) 3/29/00 1,000,001 1,000,001
AllAdvantage.com (Series C) 9/22/99 1,002,134 4,938,772
AllAdvantage.com (Series D) 2/3/00 200,001 200,001
APB Online (Series B) 6/10/99 1,000,095 126,582
Applied Science Fiction (Series D) 3/29/99 2,998,693 3,298,433
Advanced Recognition Technologies
(Series D) 12/6/99 1,001,724 1,000,000
Arzoon.com (Series C) 4/11/00 1,000,369 999,998
Bernard Technologies (Series D) 11/8/99 1,001,774 1,454,544
Bill Gross' Idealab! 12/22/99 2,000,296 2,000,000
Buildnet (Series C) 10/29/99 1,001,910 1,000,001
Chorum Technologies (Series D) 11/10/99 1,001,274 1,000,313
Cielo Communications (Series C) 11/17/99 1,001,373 500,000
CollegeClub.com (Series C)+ 10/28/99 1,013,331 336,801
Colo.com (Series C) 12/17/99 2,000,775 1,999,994
Consumer Financial Network (Series C) 3/23/00 2,000,000 2,000,000
DP Applications (Series C) 4/20/00 1,000,629 999,999
e-centives (Series C) 2/18/00 999,998 999,998
Entegrity Solutions (Series D) 2/16/00 1,000,000 1,000,001
EoExchange (Series D) 10/15/99 1,000,770 1,000,001
ePolicy.com (Series B) 5/2/00 2,000,002 2,000,002
etang.com (Series B) 1/6/00 1,002,692 999,996
EXP.com (Series C) 6/6/00 1,999,998 1,999,998
Firetalk Communications (Series E) 12/10/99 2,001,741 2,000,001
FlashPoint Technology (Series E) 9/10/99 1,000,002 1,000,002
Gateway Learning (Series D) 3/22/00 1,999,998 1,999,998
Geographic Network Affiliates International
(Series C)+ 12/29/99 2,000,000 2,000,000
</TABLE>
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
8. RESTRICTED SECURITIES (CONTINUED)
<TABLE>
<CAPTION>
INVESTMENTS ACQUISITION DATES COST VALUE
---------- -------------- ---------- ----------
<S> <C> <C> <C>
Convertible Preferred Stocks: (CONTINUED)
Global Commerce Systems (Series A) 4/6/00 $ 16,360 $ 16,360
Global Commerce Systems (Series C) 4/6/00 2,983,643 2,983,643
Global Medical Products (Series A) 9/15/99 1,002,021 3,600,000
Global Medical Products (Series B) 4/3/00 1,999,998 1,999,998
Go Solo Technologies (Series A) 4/3/00 2,000,000 2,000,000
HomeGain (Series C) 12/29/99 2,000,000 2,000,000
HomePoint (Series B) 1/10/00 1,000,050 800,100
iEngineer.com (Class A)+ 8/12/99 1,000,609 680,454
Impresse (Series C) 11/15/99 1,001,747 999,997
Index Stock Imagery (Series F) 3/20/00 1,000,000 1,000,000
Internet Appliance Network (Series B) 1/21/00 2,000,001 2,000,001
Kestrel Solutions (Series D) 1/25/00 1,000,000 1,000,000
LifeMasters Supported SelfCare (Series E) 1/31/00 1,033,556 1,033,556
Lineo (Series C) 4/28/00 1,000,002 1,000,002
MaMaMedia (Series D) 8/6/99 1,001,577 999,999
Metro-Optix (Series B) 6/23/00 1,999,998 1,999,998
Microcast (Series A) 9/15/99 1,001,871 3,569,933
Microcast (Series A) 12/16/99 200,000 487,178
Microcast (Series B) 4/6/00 521,000 521,000
Microcosm Technologies (Series D)# 3/8/00 999,997 999,997
Moai Technologies (Series D) 1/25/00 1,999,993 1,999,993
More.com (Series D) 10/22/99 1,000,001 1,556,018
More.com (Series E) 2/9/00 219,945 219,945
NeoPlanet (Series B) 2/18/00 2,000,001 2,000,001
Network Specialists (Series A) 4/14/00 1,999,999 1,999,999
NeuVis (Series C) 3/20/00 1,915,480 1,915,480
OurHouse (Series D) 2/11/00 2,000,004 2,000,004
The Petroleum Place (Series C) 3/7/00 1,000,015 1,000,015
PointOne Telecommunications (Series B)+ 9/24/99 1,999,998 1,999,998
Pointshare (Series C) 9/9/99 1,000,002 1,818,185
Q-Pass (Series E) 5/2/00 2,000,002 2,000,002
RealEstate.com (Series C) 10/6/99 1,001,553 999,900
Reciprocal (Series H) 11/12/99 999,998 999,998
ReleaseNow.com (Series E) 5/24/99 2,000,000 2,500,000
ReleaseNow.com (Series F) 1/14/00 1,000,000 1,000,000
Screaming Media.net (Series B) 10/5/99 1,001,447 1,821,414
Sensable Technologies (Series C) 4/5/00 1,000,000 1,000,000
Silicon Wave (Series C) 12/6/99 1,000,000 1,000,000
Softcom (Series B) 12/23/99 1,000,001 1,000,001
SynQuest (Series G) 3/3/99 4,500,002 4,500,002
Techies.com (Series C) 1/27/00 1,999,999 1,999,999
ThirdAge Media (Series D) 6/30/99 999,999 999,999
Transmeta (Series E) 7/1/98 3,000,000 6,250,000
USA Digital Radio (Series A) 1/19/00 1,000,001 1,000,001
V-commerce (Series B) 1/2/99 1,002,037 1,000,001
Verisity (Series D) 3/1/99 3,999,997 3,999,997
WorldRes.com (Series D) 3/18/99 2,499,999 2,499,999
WorldRes.com (Series E) 11/9/99 612,373 610,782
XTRA On-Line (Series C) 7/16/98 2,000,000 189,024
YOUcentric (Series B) 3/6/00 1,000,004 1,000,004
Yupi Internet (Series C) 11/5/99 1,000,006 1,000,006
------------ -----------
109,744,866 121,428,419
------------ -----------
CONVERTIBLE PROMISSORY NOTE*:
Techies.com 9%, due 6/6/2001+ 6/7/00 244,296 244,296
------------ ------------
$156,992,318 $219,476,169
============ ============
</TABLE>
----------
* Private placement investments.
+ Warrants attached.
# Affiliated issuers (Fund's holdings representing 5% or more of the outstanding
voting securities).
18
<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 of an
issuer represent 5% or more of the outstanding voting securities of the issuer.
A summary of the Fund's transactions in the securities of these issuers during
the six months ended June 30, 2000, is as follows:
<TABLE>
<CAPTION>
GROSS GROSS
PURCHASES SALES
BEGINNING AND AND ENDING REALIZED DIVIDEND ENDING
AFFILIATE SHARES ADDITIONS REDUCTIONS SHARES GAIN INCOME VALUE
------------ -------- -------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
3DO ...................... 3,200,000 700,000 2,500,000 $ 1,508,315 $ 19,570,312
ACT Manufacturing ........ 1,000,000 1,000,000 46,468,750
Adaptec .................. 3,310,000 4,190,000 7,500,000 170,859,375
Apex ..................... 1,900,000 500,000 300,000 2,100,000 7,252,066 91,743,750
Autodesk ................. 2,600,000 2,500,000 5,100,000 $439,578 177,065,625
C-Cube Microsystems ...... 3,400,000 200,000 1,100,000 2,500,000 53,882,173 49,062,500
Cognex ................... 2,600,000 176,034 376,034 2,400,000 10,018,406 124,125,000
Creative Technology ...... 8,300,000 1,303,700 6,996,300 13,202,464 167,255,296
Credence Systems ......... 1,400,000 1,900,000 100,000 3,200,000 5,400,602 176,500,000
CSG Systems
International .......... 2,000,000 970,000 2,970,000 166,598,437
CTS 1,600,000 1,600,000 93,000 72,000,000
Electro Scientific
Industries ............. 1,250,000 1,220,000 70,000 2,400,000 3,350,373 105,675,000
Electronics for Imaging .. 4,825,000 900,000 25,000 5,700,000 622,825 143,925,000
Kulicke & Soffa
Industries ............. 1,500,000 1,500,000 88,828,125
Lattice Semiconductor .... 4,600,000 4,600,000 318,118,750
Microcosm Technologies
(Series D) ............. 156,494 156,494 999,997
Navigant Consulting ...... 3,000,000 3,000,000 12,750,000
Novellus Systems ......... 2,300,000 6,830,400 650,000 8,480,400 35,233,332 479,937,638
Orbotech ................. 2,010,000 210,000 1,800,000 13,462,607 167,231,250
Symantec ................. 3,750,000 650,000 4,400,000 237,462,500
Synopsys ................. 4,800,000 200,000 5,000,000 172,656,250
Veeco Instruments ........ 1,500,000 1,500,000 110,109,375
Xircom ................... 1,700,000 1,595,700 326,700 2,969,000 3,034,874 141,120,281
------------ -------- --------------
TOTAL .................... $146,968,037 $532,578 $3,240,063,211
============ ======== ==============
</TABLE>
19
<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,
----------------------------------------------------------------
6/30/00 1999 1998 1997 1996 1995
------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD .......... $47.25 $30.73 $23.25 $23.51 $21.99 $16.64
------ ------- ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................... (0.26) (0.38) (0.28) (0.33) (0.26) (0.33)
Net realized and unrealized gain
on investments .............................. 2.04 22.45 8.11 6.01 2.84 7.59
------ ------- ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .............. 1.78 22.07 7.83 5.68 2.58 7.26
------ ------- ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain .. -- (5.55) (0.35) (5.94) (1.06) (1.91)
------ ------- ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................... -- (5.55) (0.35) (5.94) (1.06) (1.91)
------ ------- ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ................ $49.03 $47.25 $30.73 $23.25 $23.51 $21.99
====== ======= ====== ====== ====== ======
TOTAL RETURN: ................................. 3.77% 74.51% 33.92% 22.95% 11.94% 43.39%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ...... $6,896,773 $6,454,961 $3,890,596 $3,107,481 $2,414,672 $1,940,693
Ratio of expenses to average net assets ....... 1.30%+ 1.39% 1.44% 1.53% 1.68% 1.61%
Ratio of net investment income (loss) to
average net assets .......................... (1.02)%+ (1.09)% (1.13)% (1.21)% (1.16)% (1.31)%
Portfolio turnover rate ....................... 48.10% 119.23% 126.70% 164.57% 121.32% 65.77%
</TABLE>
----------
See footnotes on page 21.
20
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS C
-------------------------------------------------------------- ---------------------
SIX MONTHS YEAR ENDED DECEMBER 31, 4/22/96* SIX MONTHS 5/27/99*
ENDED --------------------------------- TO ENDED TO
6/30/00 1999 1998 1997 12/31/96 6/30/00 12/31/99
------ ---- ---- ---- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ..... $43.41 $28.75 $21.94 $22.62 $21.51 $43.39 $29.39
------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ...................... (0.40) (0.60) (0.44) (0.50) (0.28) (0.40) (0.32)
Net realized and unrealized gain
on investments ......................... 1.87 20.81 7.60 5.76 2.45 1.85 19.87
------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ......... 1.47 20.21 7.16 5.26 2.17 1.45 19.55
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain -- (5.55) (0.35) (5.94) (1.06) -- (5.55)
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ...................... -- (5.55) (0.35) (5.94) (1.06) -- (5.55)
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ........... $44.88 $43.41 $28.75 $21.94 $22.62 $44.84 $43.39
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: 3.39% 73.16% 32.89% 21.96% 10.30% 3.34% 69.33%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) . $2,536,795 $2,143,570 $1,033,105 $505,342 $120,848 $321,046 $120,403
Ratio of expenses to average net assets .. 2.05%+ 2.14% 2.19% 2.28% 2.44%+ 2.05%+ 2.07%+
Ratio of net investment income (loss) to
average net assets ..................... (1.77)%+ (1.84)% (1.88)% (1.96)% (1.96)%+ (1.77)%+ (1.77)%+
Portfolio turnover rate .................. 48.10% 119.23% 126.70% 164.57% 121.32%++ 48.10% 119.23%**
<CAPTION>
CLASS D
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
6/30/00 1999 1998 1997 1996 1995
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ...... $43.38 $28.72 $21.91 $22.61 $21.35 $16.31
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ....................... (0.40) (0.60) (0.44) (0.50) (0.40) (0.50)
Net realized and unrealized gain
on investments .......................... 1.86 20.81 7.60 5.74 2.72 7.45
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS .......... 1.46 20.21 7.16 5.24 2.32 6.95
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain -- (5.55) (0.35) (5.94) (1.06) (1.91)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ....................... -- (5.55) (0.35) (5.94) (1.06) (1.91)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............ $44.84 $43.38 $28.72 $21.91 $22.61 $21.35
====== ====== ====== ====== ====== ======
TOTAL RETURN: ............................. 3.37% 73.24% 32.94% 21.86% 11.07% 42.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) .. $2,070,764 $1,987,773 $1,228,237 $945,368 $737,979 $609,332
Ratio of expenses to average net assets ... 2.05%+ 2.14% 2.19% 2.28% 2.43% 2.37%
Ratio of net investment income (loss) to
average net assets ...................... (1.77)%+ (1.84)% (1.88)% (1.96)% (1.91)% (2.07)%
Portfolio turnover rate ................... 48.10% 119.23% 126.70% 164.57% 121.32% 65.77%
</TABLE>
----------
+ Annualized.
++ For the year ended December 31, 1996.
* Commencement of offering of shares.
** For the year ended December 31, 1999.
See Notes to Financial Statements.
21
<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 of Seligman
Communications and Information Fund, Inc., including the portfolio of
investments, as of June 30, 2000, and 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, 1999, 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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, the 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, 2000, the
results of its operations for the six months then ended, and the changes in its
net assets and the financial highlights for the respective stated periods, in
conformity with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
New York, New York
August 11, 2000
--------------------------------------------------------------------------------
22
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DIRECTOR, Raytheon Company
DEAN EMERITUS, Fletcher School of Law and Diplomacy
at Tufts University
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
DIRECTOR, Commonwealth Industries, Inc.
TRUSTEE, New York-Presbyterian Hospital
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
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
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
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Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
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EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT AND TREASURER
PAUL H. WICK
VICE PRESIDENT
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
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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.
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Adapted from the Investment Company Institute's 2000 MUTUAL FUND FACT BOOK.
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SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[SELIGMAN LOGO]
J.& W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
www.seligman.com
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.
EQC13 6/00 [RECYCLE LOGO] PRINTED ON RECYCLED PAPER
