<PAGE>
A N N U A L R E P O R T
SELIGMAN
PORTFOLIOS,
INC.
December 31, 1997
<PAGE>
SELIGMAN
PORTFOLIOS,
INC.
February 6, 1998
Dear Contract Owner:
J. & W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios, Inc.,
is pleased to provide the enclosed audited financial statements and accompanying
information for Seligman Portfolios, Inc., the underlying investment vehicle for
your policy, for the 12 months ended December 31, 1997.
Nineteen ninety-seven was the seventh year of economic expansion in the US,
with real domestic growth of 3.8%. Consumer price inflation slowed to under 2%,
interest rates moved steadily lower, productivity rose, and unemployment levels
reached 27-year lows. Meanwhile, the federal budget deficit virtually
disappeared and corporate profits posted a third consecutive year of strong
gains.
The domestic equity markets, as measured by the Dow Jones Industrial Average
(DJIA), posted returns in excess of 20% for a third consecutive year -- a feat
unmatched in the DJIA's 101-year history. However, the majority of the market
advances occurred in the first seven months of the year, as the Asian financial
crisis increased uncertainty in the last quarter. Overall, large-capitalization
stocks continued to drive the market advances. Despite a brief rally in May, and
strong results when the equity markets broadened in the third quarter, the
valuations and performance of small-capitalization stocks continued to trail
those of large-cap stocks.
Although there were occasional setbacks due to fears of inflation and the
possibility of Federal Reserve Board interventions, 1997 was also a successful
year for the fixed-income markets. Once the effect of the March adjustment in
the federal funds rate subsided, yields progressively trended downward and
prices improved. The yield on the benchmark 30-year US Treasury bond ended the
year at 5.92%, significantly lower than the 6.64% yield on December 31, 1996.
Indicating a flattening of the yield curve, the yield on the benchmark
three-month US Treasury bill reached 5.34% by year end, somewhat higher than the
5.17% yield on December 31, 1996.
Going forward, the outlook for US corporate profits in 1998 is more uncertain
due to expectations of modest economic growth and the unforeseeable effects of
the Asian crisis. There is also a risk of temporary price deflation linked to
the Asian crisis, as those economies seek to export their way out of trouble.
Barring problems caused by the tightness of the labor market, we expect a
continuation of the current low-inflation and low-interest-rate environment, but
no deflation.
Internationally, 1997 was dominated by the continuing and worsening economic
and financial crisis in Asia. By year end, the crisis, which started in
Thailand, had spread throughout Asia to much larger economies such as South
Korea. The Japanese economy was also very weak, and stock markets throughout
Asia fell very sharply. Thus far, Europe has taken an optimistic view of these
events, and with the background of falling inflation and interest rates, stock
markets have performed very well. Looking forward, the problems in Asia are
unlikely to be resolved quickly. Therefore, our international strategy will
continue to favor the European area as a whole, with investments in some
selected emerging markets.
Thank you for your continued confidence in Seligman Portfolios, Inc. We look
forward to serving your investment needs in the years ahead.
Respectfully,
/s/ William C. Morris
----------------------
William C. Morris
Chairman
J. & W. Seligman & Co. Incorporated
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolio Overview (unaudited)
- ------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Principal Amount
or Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN BOND PORTFOLIO
US Government Securities
US Treasury Bonds
8-3/4%, 5/15/2020................. $ 100,000 $ 500,000
US Treasury Bonds
6-5/8%, 2/15/2027................. 1,400,000 1,400,000
US Treasury Notes
6-1/4%, 6/30/2002................. 200,000 200,000
Corporate Bonds
Associates Corp. of
North America 6-1/2%,
8/15/2002......................... 200,000 200,000
First Data 6-3/8%, 12/15/2007....... 200,000 200,000
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Corporate Bonds
Cott 8-1/2%, 5/1/2007.............. $200,000 --
Harman International
7.32%, 7/1/2007.................. 200,000 --
Norfolk Southern 6.95%,
5/1/2002......................... 200,000 --
Principal Amount
or Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN CAPITAL PORTFOLIO
Common Stocks
American Skiing.................... 13,400 shs. 13,400 shs.
CapStar Hotel...................... 6,400 6,400
Dial............................... 14,000 14,000
Fresh Del Monte Produce............ 21,200 21,200
Gulfstream Aerospace............... 10,600 10,600
Jones Apparel Group................ 9,600 9,600
Ocwen Financial.................... 5,500 10,200 (1)
Schwab (Charles)................... 6,100 14,800 (2)
SouthTrust......................... 4,500 4,500
Synopsys........................... 8,200 8,200
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Columbia/HCA Healthcare............ 7,900 shs. --
ENSCO International................ 8,600 (3) --
Lowe's............................. 6,900 --
Newbridge Networks................. 5,900 --
Quantum............................ 11,800 --
Reynolds & Reynolds (Class A)...... 14,400 --
Santa Fe International............. 5,500 --
Sterling Commerce.................. 8,900 --
Symantec........................... 13,900 6,200 shs.
WorldCom........................... 10,200 --
Principal Amount
or Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN COMMON STOCK PORTFOLIO
Common Stocks
Ameritech.......................... 10,500 shs. 10,500 shs.
Anheuser-Busch..................... 23,300 23,300
Bristol-Myers Squibb............... 9,000 13,000
Exxon.............................. 16,100 16,100
Merck.............................. 8,300 8,300
Microsoft.......................... 6,300 6,300
Mobil.............................. 13,500 13,500
Philip Morris...................... 23,300 23,300
RJR Nabisco Holdings............... 30,400 34,800
Unicom............................. 29,200 29,200
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Burlington Northern Santa Fe....... 4,000 shs. --
Colgate-Palmolive.................. 10,400 --
Corning............................ 9,200 --
FPL Group.......................... 7,200 --
General Re......................... 2,200 1,300 shs.
Guidant............................ 7,000 (4) --
KEMET.............................. 15,000 --
Minnesota Mining & Manufacturing... 4,000 --
NationsBank........................ 11,628 --
Pitney Bowes....................... 4,100 --
- -------------------
See footnotes on page P-7.
P-1
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolio Overview (unaudited) (continued)
- ------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN COMMUNICATIONS AND
INFORMATION PORTFOLIO
Common Stocks
Atmel.............................. 19,700 19,700
Cisco Systems...................... 17,300 34,950 (5)
Creative Technology................ 52,700 81,700
Excel Switching.................... 50,000 50,000
First Data......................... 46,100 46,100
Gartner Group (Class A)............ 47,100 47,100
Gateway 2000....................... 22,000 22,000
Lattice Semiconductor.............. 19,300 43,200
Sanmina............................ 17,900 17,900
Teradyne........................... 26,100 62,800
Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Advanced Micro Devices............. 56,000 --
Altera............................. 13,700 9,700
BMC Software....................... 30,100 --
InTEST............................. 100,000 --
MAXIMUS............................ 50,000 --
Quantum............................ 68,800 --
SCI Systems........................ 26,200 (6) --
Veeco Instruments.................. 20,500 --
Western Digital.................... 40,800 --
WorldCom........................... 26,000 --
Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN FRONTIER PORTFOLIO
Common Stocks
Anchor Gaming..................... 7,800 7,800
Avant!............................ 16,900 16,900
BISYS Group....................... 13,600 13,600
Burr-Brown........................ 16,500 16,500
Castle Dental Centers............. 55,000 55,000
CCA Prison Realty Trust........... 12,800 12,800
Credence Systems.................. 14,000 24,500
JP Foodservice.................... 17,100 17,100
KEMET............................. 20,200 31,600
PMC-Sierra........................ 21,300 21,300
Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Administaff......................... 25,000 --
American Disposal Services.......... 15,000 --
American Medserve................... 25,000 --
BDM International................... 15,020 --
CalEnergy........................... 11,000 17,360
Education Management................ 15,300 --
Electronics for Imaging............. 12,100 --
Memtec (ADRs)....................... 18,700 --
ProMedCo Management................. 50,000 --
Sybron International................ 12,280 --
- ------------------
See footnotes on page P-7.
P-2
<PAGE>
Seligman Portfolios, Inc.
SELIGMAN HENDERSON GLOBAL GROWTH
OPPORTUNITIES PORTFOLIO
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
Common Stocks
Astra........................... 3,935 3,935
Bristol-Myers Squibb............ 900 900
Compaq Computer................. 1,100 1,100
Dayton Hudson................... 1,100 1,100
Elan (ADRs)..................... 1,525 1,525
General Electric................ 1,100 1,100
Merck........................... 800 800
PepsiCo......................... 2,000 2,000
Sairgroup....................... 70 70
Secom........................... 1,000 1,000
Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Boston Scientific............... 1,000 --
Columbia/HCA Healthcare......... 1,300 --
Empresas ICA Sociedad
Controladora (ADRs)........... 3,000 --
Essilor International........... 185 --
HFS............................. 800 --
Richter Gedeon (GDRs)........... 480 --
SGS-Thompson Microelectronics... 845 --
Sol Melia....................... 1,380 --
Sun International Hotels........ 1,200 --
WorldCom........................ 1,600 --
DIVERSIFICATION OF NET ASSETS*
December 31, 1997
<TABLE>
<CAPTION>
Percent of
Issues Cost Value Net Assets
------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Common Stocks
Aerospace......................................... 1 $ 57,040 $ 53,945 1.0
Automotive and Related............................ 3 160,110 155,887 2.9
Business Goods and Services....................... 7 380,263 369,032 6.8
Computer and Technology Related................... 11 502,361 523,174 9.6
Construction and Property......................... 2 79,584 92,374 1.7
Consumer Goods and Services....................... 7 437,898 483,145 8.9
Diversified....................................... 2 147,400 180,087 3.3
Drugs and Health Care............................. 9 584,325 601,322 11.0
Electric and Gas Utilities........................ 2 36,821 33,053 0.6
Electronics....................................... 5 178,646 179,637 3.3
Entertainment and Leisure......................... 6 322,147 337,452 6.2
Financial Services................................ 10 461,334 492,528 9.0
Industrial Goods and Services..................... 4 149,829 153,783 2.8
Manufacturing and Industrial Equipment............ 3 51,939 46,260 0.9
Publishing........................................ 1 69,528 72,835 1.3
Resources......................................... 4 205,545 234,131 4.3
Restaurants....................................... 1 48,081 49,551 0.9
Retailing......................................... 4 156,889 158,435 2.9
Support Services.................................. 2 102,202 102,063 1.9
Telecommunications................................ 9 410,963 438,583 8.1
Tobacco........................................... 1 68,003 105,379 1.9
Transportation.................................... 5 242,434 245,379 4.5
--- ---------- ---------- -----
99 4,853,342 5,108,035 93.8
Other Assets Less Liabilities..................... 3 311,694 341,197 6.2
--- ---------- ---------- -----
Net Assets........................................ 102 $5,165,036 $5,449,232 100.0
=== ========== ========== =====
<FN>
- ------------------
See footnotes on page P-7.
</FN>
</TABLE>
P-3
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolio Overview (unaudited) (continued)
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL
SMALLER COMPANIES PORTFOLIO
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
Common Stocks
Burr-Brown........................ 3,700 3,700
CCA Prison Realty Trust........... 2,800 2,800
Cognex............................ 5,400 5,400
Jacor Communications.............. 2,900 2,900
JP Foodservice.................... 4,000 4,000
OM Group.......................... 3,000 3,000
PMTServices....................... 6,200 6,200
Prodega........................... 229 229
Tag Heuer (ADRs).................. 730 730
Telinfo........................... 2,400 2,400
Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Administaff....................... 10,000 --
American Disposal Services........ 5,000 --
BDM International................. 3,700 --
CalEnergy......................... 3,800 3,900
Ekornes........................... 15,600 13,800
Electro Scientific Industries..... 2,790 --
Hucke............................. 5,692 --
Iro............................... 9,170 --
Memtec (ADRs)..................... 7,900 --
Watson Pharmaceuticals............ 2,400 (7) 2,400
DIVERSIFICATION OF NET ASSETS*
December 31, 1997
<TABLE>
<CAPTION>
Percent of
Issues Cost Value Net Assets
------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Common Stocks
Advertising..................................... 3 $ 332,515 $ 399,939 2.0
Automotive Parts Manufacturing.................. 7 488,958 556,943 2.7
Building Materials.............................. 2 318,799 281,589 1.4
Business Goods and Services..................... 25 1,879,192 2,087,593 10.1
Capital Goods................................... 7 507,814 465,509 2.3
Chemicals....................................... 6 259,115 236,466 1.2
Computer Software............................... 13 717,295 1,048,185 5.1
Construction and Property....................... 12 1,181,329 1,290,162 6.3
Consumer Goods and Services..................... 18 1,314,520 1,396,910 6.8
Distributors.................................... 1 26,658 23,003 0.1
Drugs and Health Care........................... 21 1,278,865 1,339,976 6.5
Electric Utilities.............................. 2 38,030 30,775 0.2
Electrical Distribution......................... 2 127,601 126,962 0.6
Electronics..................................... 14 1,213,511 1,172,633 5.8
Energy.......................................... 6 221,396 187,912 0.9
Financial Services.............................. 15 851,650 938,692 4.6
Independent Power Producers..................... 2 297,731 254,925 1.2
Industrial Goods and Services................... 10 682,042 626,775 3.1
Leisure and Hotels.............................. 6 370,366 312,915 1.5
Manufacturing................................... 26 1,623,564 1,568,366 7.6
Media........................................... 11 905,681 1,088,566 5.3
Medical Products and Technology................. 7 396,287 389,564 1.9
Metals.......................................... 4 357,935 181,386 0.9
Paper and Printing.............................. 3 148,885 108,942 0.5
Restaurants..................................... 4 208,308 294,008 1.4
Retailing....................................... 16 1,079,276 840,621 4.1
Support Services................................ 3 275,541 329,339 1.6
Technology...................................... 8 680,801 763,323 3.7
Telecommunications.............................. 7 423,150 317,972 1.6
Transportation.................................. 6 526,611 534,503 2.6
Veterinary Products............................. 1 140,050 111,666 0.5
Miscellaneous................................... 2 28,800 34,033 0.2
--- ----------- ----------- -----
270 18,902,276 19,340,153 94.3
Other Assets Less Liabilities................... 3 1,196,072 1,164,437 5.7
--- ----------- ----------- -----
Net Assets...................................... 273 $20,098,348 $20,504,590 100.0
=== =========== =========== =====
<FN>
- -----------------
See footnotes on page P-7.
</FN>
</TABLE>
P-4
<PAGE>
Seligman Portfolios, Inc.
SELIGMAN HENDERSON GLOBAL
TECHNOLOGY PORTFOLIO
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
Common Stocks
AMF Bowling........................ 9,000 9,000
CMG................................ 3,000 3,000
CMP Media (Class A)................ 3,400 3,400
Creative Technology................ 2,500 2,500
Electronics for Imaging............ 1,300 1,300
Kulicke & Soffa Industries......... 2,200 2,200
MMC Networks....................... 6,000 6,000
Parametric Technology.............. 1,000 1,300
Philips Electronics................ 1,150 1,150
Rhone-Poulenc...................... 1,200 1,200
Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Advanced Micro Devices............. 600 --
Asyst Technologies................. 900 (8) --
BMC Software....................... 400 --
Canon.............................. 1,000 1,000
DSP Communications................. 1,300 --
Nokia.............................. 345 175
Quantum............................ 1,000 --
Rohm............................... 1,000 --
Siliconware Precision
Industries (GDRs)................ 1,000 2,150
TDK................................ 1,000 --
DIVERSIFICATION OF NET ASSETS*
December 31, 1997
<TABLE>
<CAPTION>
Percent of
Issues Cost Value Net Assets
------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Common Stocks
Computer and Business Services................. 10 $ 382,825 $ 504,678 13.7
Computer Hardware/Peripherals.................. 9 412,961 381,408 10.3
Computer Software.............................. 13 516,393 554,388 15.0
Distributors................................... 2 61,114 46,173 1.3
Electronics.................................... 14 478,288 351,826 9.5
Electronics Capital Equipment.................. 11 423,677 329,622 8.9
Media.......................................... 1 58,650 58,650 1.6
Medical Products and Technology................ 4 154,518 152,888 4.2
Networking/Communications Infrastructure....... 7 205,843 245,739 6.7
Semiconductors................................. 6 225,652 194,907 5.3
Telecommunications............................. 7 146,098 139,538 3.8
Miscellaneous.................................. 1 175,500 225,000 6.1
-- ---------- ---------- -----
85 3,241,519 3,184,817 86.4
Other Assets Less Liabilities.................. 3 501,411 501,411 13.6
-- ---------- ---------- -----
Net Assets..................................... 88 $3,742,930 $3,686,228 100.0
== ========== ========== =====
<FN>
- --------------------
See footnotes on page P-7.
</FN>
</TABLE>
P-5
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Portfolio Overview (unaudited) (continued)
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON
INTERNATIONAL PORTFOLIO
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
Common Stocks
Astra.......................... 5,233 5,233
Banque Nationale de Paris...... 2,209 2,209
Bayerische Vereinsbank......... 1,842 1,842
Benckiser (Series B)........... 3,195 3,195
Desc (ADRs).................... 2,700 5,423
Endesa......................... 7,030 7,030
Lafarge........................ 1,435 1,435
Laporte........................ 7,000 7,000
Magyar Tavkozlesi Rt.
"Matav" (ADRs).............. 6,840 6,840
Reuters Holdings............... 8,500 8,500
Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
CSK............................. 2,600 1,700
East Japan Railway.............. 19 7
Empresas ICA Sociedad
Controladora (ADRs)........... 5,130 --
Metro........................... 2,110 (9) --
Michelin (Class B).............. 1,579 --
Murata Manufacturing............ 5,000 --
Pioneer Electronic.............. 8,000 3,000
Sumitomo Metal Industries....... 69,000 --
Toshiba......................... 31,000 11,000
VEBA............................ 1,687 --
SELIGMAN INCOME PORTFOLIO (continued)
DIVERSIFICATION OF NET ASSETS*
December 31, 1997
<TABLE>
<CAPTION>
Percent of
Issues Cost Value Net Assets
------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Common Stocks
Banking........................................ 11 $ 744,309 $ 880,710 9.6
Building Materials............................. 1 60,524 48,030 0.5
Business Services.............................. 3 88,766 65,237 0.7
Chemicals...................................... 5 410,262 421,622 4.6
Construction and Property...................... 10 297,793 248,107 2.7
Consumer Products.............................. 3 75,809 75,261 0.8
Electronics.................................... 3 219,255 192,065 2.1
Financial Services............................. 3 200,266 227,548 2.5
Health and Household........................... 8 572,770 648,592 7.1
Industrial Goods and Services.................. 9 538,456 574,495 6.3
Insurance...................................... 5 425,131 513,065 5.6
Leisure and Hotels............................. 2 232,003 290,834 3.2
Manufacturing.................................. 7 441,357 425,313 4.6
Media.......................................... 6 334,597 363,196 4.0
Metals......................................... 3 248,425 213,184 2.3
Resources...................................... 11 695,831 873,220 9.5
Restaurants.................................... 1 25,850 22,083 0.2
Retailing...................................... 8 412,345 473,857 5.2
Telecommunications............................. 13 859,756 1,039,096 11.3
Tobacco........................................ 2 166,560 184,100 2.0
Transportation................................. 5 280,393 332,580 3.6
Utilities...................................... 5 476,206 522,045 5.7
Miscellaneous.................................. 3 30,076 26,606 0.2
--- ---------- ---------- -----
127 7,836,740 8,660,846 94.3
Other Assets Less Liabilities.................. --- 521,619 521,619 5.7
--- ---------- ---------- -----
Net Assets..................................... 127 $8,358,359 $9,182,465 100.0
=== ========== ========== =====
<FN>
- --------------------
See footnotes on page P-7.
</FN>
</TABLE>
P-6
<PAGE>
Seligman Portfolios, Inc.
LARGEST PORTFOLIO CHANGES
During the Six Months Ended December 31, 1997
Principal Amount
or Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
Corporate Bonds
Advanced Micro Devices
11%, 8/1/2003....................... $200,000 $200,000
Ameristar Casino 10-1/2%, 8/1/2004.... 200,000 200,000
Digital Television 12-1/2%, 8/1/2007.. 225,000 225,000
GCI 9-3/4%, 8/1/2007.................. 170,000 170,000
Intermedia Capital Partners IV
11-1/4%, 8/1/2006................... 250,000 500,000
Nextel Communications 0%
(10.65%), 9/15/2007................. 350,000 350,000
Paging Network 10%, 10/15/2008........ 250,000 450,000
Powertel 11-1/8%, 6/1/2007............ 185,000 225,000
Price Communications Wireless
11-3/4%, 7/15/2007.................. 250,000 250,000
RCN 10%, 10/15/2007................... 190,000 190,000
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Corporate Bonds
Berry Plastics 12-1/4%, 4/15/2004...... $400,000 --
Comcast 10-5/8%, 7/15/2012............. 100,000 $ 50,000
Commnet Cellular 11-1/4%, 7/1/2005..... 150,000 --
Fonorola 12-1/2%, 8/15/2002............ 200,000 --
Midland Cogeneration Venture
11-3/4%, 7/23/2005................... 125,000 125,000
Pierce Leahy 11-1/8%, 7/15/2006........ 155,000 75,000
Plitt Theaters 10-7/8%, 6/15/2004...... 125,000 125,000
Spinnaker Industries
10-3/4%, 10/15/2006.................. 150,000 --
Syratech 11%, 4/15/2007................ 150,000 --
S.D. Warren 12%, 12/15/2004............ 150,000 --
Principal Amount
or Shares
---------------------
Holdings
Additions Increase 12/31/97
- --------- -------- --------
SELIGMAN INCOME PORTFOLIO
Common Stocks
American General................... 3,200 shs. 3,200 shs.
AMP................................ 3,300 3,300
Atlantic Richfield................. 2,600 2,600
Exxon.............................. 3,000 3,000
PepsiCo............................ 3,700 3,700
Sara Lee........................... 3,200 3,200
Convertible Preferred Stocks
Federal-Mogul 7%................... 4,000 4,000
Corporate Bonds
Associates Corp. of North America
6-1/2%, 8/15/2002................ $300,000 $300,000
US Government Securities
US Treasury Notes 6-1/4%,
6/30/2002....................... 500,000 500,000
US Treasury Notes 6-5/8%,
5/15/2007....................... 500,000 500,000
Principal Amount
or Shares
----------------------
Holdings
Reductions Decrease 12/31/97
- ---------- -------- --------
Common Stocks
Bell Atlantic........................ 2,700 shs. 1,300 shs.
CNF Transportation................... 10,000 --
ConAgra.............................. 3,141 5,000
GATX................................. 4,047 1,700
Inland Steel Industries.............. 5,406 --
Convertible Preferred Stocks
Greenfield Capital Trust 6%.......... 3,000 --
Unocal 6-1/4%........................ 4,464 --
Corporate Bonds
Harman International Industries
7.32%, 7/1/2007.................... $300,000 --
Norfolk Southern 6.95%,
5/1/2002.......................... 300,000 --
Time Warner 9-1/8%, 1/15/2013........ 300,000 --
- -------------------
Largest portfolio changes from the previous midyear to the current year-end are
based on cost of purchases and proceeds from sales of securities.
* "Diversification of Net Assets" is included for the Seligman Global Portfolios
because their portfolio holdings are listed by country rather than by industry
in the "Portfolios of Investments".
(1) Includes 4,700 shares received as a result of a 2-for-1 stock split.
(2) Includes 2,900 shares received as a result of a 3-for-2 stock split.
(3) Includes 4,300 shares received as a result of a 2-for-1 stock split.
(4) Includes 3,500 shares received as a result of a 2-for-1 stock split.
(5) Includes 11,650 shares received as a result of a 3-for-2 stock split.
(6) Includes 13,100 shares received as a result of a 2-for-1 stock split.
(7) Includes 1,200 shares received as a result of a 2-for-1 stock split.
(8) Includes 300 shares received as a result of a 2-for-1 stock split.
(9) Includes 1,231 shares received as a result of a 2-for-1 stock split.
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Annual Performance Overview
- ------------------------------------------------------------------------------
The following charts compare a $10,000 hypothetical investment made in each
of the Portfolios of Seligman Portfolios, Inc. (with the exception of Seligman
Cash Management Portfolio), since inception through December 31, 1997, to a
$10,000 hypothetical investment made in the appropriate benchmark indices and
averages for the same period. Accompanying each chart is a discussion of the
investment strategy and sector performance that affected the Portfolio during
the past year.
Seligman Bond Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Lipper
Lehman Bros. Corporate Debt
Seligman Government BBB-Rated
Date Bond Portfolio Bond Index Funds Average
6/21/88 10000
6/30/88 10000 10000 10000
9/30/88 10100 10169 10206
12/31/88 10101 10265 10337
3/31/89 10121 10373 10463
6/30/89 10670 11207 11102
9/30/89 10691 11300 11162
12/31/89 10979 11725 11331
3/31/90 10797 11580 11123
6/30/90 11119 11985 11479
9/30/90 11162 12085 11351
12/31/90 11653 12748 11779
3/31/91 11924 13025 12269
6/30/91 12094 13201 12537
9/30/91 12727 13953 13269
12/31/91 13352 14701 13955
3/31/92 13121 14444 13944
6/30/92 13485 15016 14496
9/30/92 14081 15757 15207
12/31/92 14099 15764 15216
3/31/93 14548 16476 16064
6/30/93 14879 16952 16645
9/30/93 15249 17503 17265
12/31/93 15224 17444 17369
3/31/94 14787 16919 16767
6/30/94 14622 16726 16417
9/30/94 14742 16796 16522
12/31/94 14708 16855 16509
3/31/95 15216 17649 17304
6/30/95 16263 18743 18604
9/30/95 16596 19075 19048
12/31/95 17530 19947 19970
3/31/96 16942 19496 19484
6/30/96 16875 19589 19562
9/30/96 17043 19918 19983
12/31/96 17546 20500 20713
3/31/97 17422 20334 20562
6/30/97 17989 21040 21397
9/30/97 18557 21744 22217
12/31/97 19122 22466 22784
Average Annual Total Returns+
Since
One Yr. Five Yrs. Inception
Seligman Bond Portfolio 8.98% 6.29% 7.04%
Lehman Brothers
Government Bond Index 9.59 7.34 8.88*
Lipper Corporate Debt BBB-Rated
Funds Average 10.00 8.41 9.05*
*From June 30, 1988.
Nineteen ninety-seven was a year of solid economic growth accompanied by
disinflation (a slowdown in the rate of inflation). However, it took time for
bond market participants to be convinced that solid economic growth could
coexist with low inflation. This sentiment was shared by the Federal Reserve
Board, which raised the federal funds rate by 25 percentage points in March. The
tightening of monetary policy drove the benchmark 30-year US Treasury bond yield
higher, peaking at 7.17% in April. However, as the year progressed, bond yields
traded lower as it became evident that the rate of inflation was declining. In
the fixed-income markets, positive sentiment gained additional momentum during
the fourth quarter, as the Asian crisis led to a surge in demand for US Treasury
securities.
After the Fed raised the federal funds rate to 5.5% late in the first
quarter, the Portfolio's maturities were shortened in anticipation of further
monetary tightening and robust economic growth. This was a successful strategy
until economic activity moderated in the second quarter. Thereafter, the bond
market reversed course and rallied through July. The Portfolio lagged its peers
during the rally but closed the gap in the fourth quarter, when the Portfolio's
maturities were lengthened. Longer maturities were purchased in response to the
disinflationary trend, the surging US dollar, and the Asian financial crisis.
As we enter 1998, the Portfolio's longer maturities remain in the portfolio,
as the activity in the global financial markets is expected to slow the US
economy. The Fed may indeed need to lower interest rates to counter the effects
of the Asian crisis on the US economy. Further, the declining budget deficit
could reduce the need for the US Treasury to issue securities. If US Treasury
issuance declined, the balance of supply and demand would be altered, with
greater capital chasing fewer bonds. Any of these events could lead to further
declines in bond yields and to positive returns for the Portfolio.
Seligman Capital Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman Lipper Capital Russell
Capital Appreciation Lipper MidCap MidCap
Date Portfolio Funds Average S&P 500 Funds Average Growth Index
6/21/88 10000
6/30/88 10000 10000 10000 10000 10000
9/30/88 10090 9879 10034 9740 9621
12/31/88 10060 9955 10344 9810 9680
3/31/89 10240 10732 11077 10588 10290
6/30/89 10840 11630 12056 11516 11301
9/30/89 12040 12827 13347 12824 12654
12/31/89 11717 12604 13622 12562 12727
3/31/90 11344 12248 13212 12502 12279
6/30/90 12715 12963 14043 13506 13330
9/30/90 9720 10798 12113 10867 10632
12/31/90 11344 11503 13199 12000 12074
3/31/91 13597 13596 15116 14679 14861
6/30/91 13778 13439 15082 14514 14630
9/30/91 15455 14599 15888 15897 15830
12/31/91 18042 15941 17220 17620 17753
3/31/92 16842 16005 16784 17662 17212
6/30/92 15601 15441 17103 16581 16411
9/30/92 16791 15804 17642 17177 17289
12/31/92 19268 17405 18529 19579 19298
3/31/93 19904 18125 19339 19914 19472
6/30/93 19552 18684 19434 20461 19474
9/30/93 20846 20034 19935 22006 20787
12/31/93 21514 20594 20398 22527 21458
3/31/94 20837 19911 19625 21833 20793
6/30/94 19010 19069 19707 20714 19878
9/30/94 20736 20363 20671 22437 21289
12/31/94 20526 20047 20666 22254 20993
3/31/95 21802 21382 22679 23812 23263
6/30/95 23112 23367 24845 25913 25131
9/30/95 25196 25652 26820 28708 27606
12/31/95 26102 26371 28435 29138 28125
3/31/96 27853 27942 29962 30903 29939
6/30/96 29761 29327 31307 32532 31059
9/30/96 30479 29981 32275 33601 32115
12/31/96 29891 30847 34966 34330 33043
3/31/97 28696 29831 35904 32254 31837
6/30/97 32617 34031 42172 37311 36523
9/30/97 36444 38525 45331 42726 41633
12/31/97 36259 37057 46633 41256 40489
Average Annual Total Returns+
Since
One Yr. Five Yrs. Inception
Seligman Capital Portfolio 21.31% 13.48% 14.47%
Lipper Capital Appreciation Funds Avg.** 20.13 16.32 14.77*
Lipper Mid Cap Funds Average 20.18 16.08 16.07*
Russell Midcap Growth Index 22.53 15.97 15.84*
S&P 500** 33.36 20.27 17.58*
* From June 30, 1988.
** Seligman Capital Portfolio will no longer be compared to the Lipper Capital
Appreciation Funds Average after December 31, 1997, because the Portfolio
invests primarily in mid-capitalization securities. Seligman Capital
Portfolio will also no longer be compared to the Standard & Poor's 500
Composite Stock Price Index (S&P 500) after December 31, 1997, for the same
reason.
The economic expansion continued in 1997, supporting strong corporate
earnings and low interest rates. While the financial markets responded, reaching
new highs, large-capitalization stocks were the primary beneficiaries of the
ideal economic background. Despite high valuations, investors moved more assets
into large-caps due to the liquidity found there. This trend was only reinforced
by the Asian financial crisis. While mid-capitalization stocks did not
experience the same run-up in valuations as was found among their large-cap
counterparts, they still performed well for the year.
- --------------------
The investment return and 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.
See footnote on page P-16.
P-8
<PAGE>
Seligman Portfolios, Inc.
- -----------------------------------------------------------------------------
December 31, 1997
- -----------------------------------------------------------------------------
Seligman Capital Portfolio (continued)
While we continued to identify and invest in growth stocks selling at
attractive valuations, a significant restructuring of the Portfolio took place
in 1997. Large-cap holdings that had been long-term positions in the portfolio
were sold. The Portfolio is now more firmly placed in the mid-cap asset class.
Exceptional companies with leading market shares and strong earnings prospects
were selected, which enhanced investment performance.
Specifically, the Portfolio's investments in the financial area improved the
Portfolio's results relative to its peer group. Healthy economic growth, low
inflation, and consolidation during the year benefited the Portfolio's financial
services and savings and loan companies. Another area that improved results was
energy. Here, the Portfolio's weighting was increased to participate in the
accelerating earnings growth found in the sector. On the other hand, the
Portfolio's technology holdings performed poorly, as the Asian debacle resulted
in decreased orders for many mid-cap technology companies in the fourth quarter.
Mid-cap health care services companies also had a poor year, due to
deteriorating fundamentals. While both the technology and the health care
sectors experienced weakness in 1997, they each offer lower valuations and good
recovery potential.
Going forward, the valuations and growth opportunities found in mid-cap
stocks still offer significant value relative to large-cap stocks. As mid-cap
companies tend to have a greater portion of operations linked to the domestic
markets, they are less exposed to the eventual repercussions of the Asian
financial crisis than large multinational companies. We believe that this
difference in international exposure, combined with more attractive valuations
and greater future earnings growth potential, could attract investor attention
to mid-cap stocks in 1998.
Seligman Common Stock Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman Lipper
Common Stock Growth & Income
Date Portfolio Funds Average S&P 500
6/21/88 10000 10000 10000
6/30/88 10000 10000 10000
9/30/88 10190 10036 10034
12/31/88 10180 10250 10344
3/31/89 10581 10912 11077
6/30/89 11223 11683 12056
9/30/89 12317 12689 13347
12/31/89 12635 12685 13622
3/31/90 12522 12378 13212
6/30/90 13315 13015 14043
9/30/90 10965 11280 12113
12/31/90 12237 12123 13199
3/31/91 14425 13853 15116
6/30/91 14287 13826 15082
9/30/91 15281 14598 15888
12/31/91 16295 15646 17220
3/31/92 16604 15661 16784
6/30/92 16472 15709 17103
9/30/92 17146 16099 17642
12/31/92 18272 17068 18529
3/31/93 18928 17866 19339
6/30/93 19127 18027 19434
9/30/93 19608 18662 19935
12/31/93 20454 19101 20398
3/31/94 19621 18521 19625
6/30/94 19730 18468 19707
9/30/94 20727 19259 20671
12/31/94 20463 18963 20666
3/31/95 21933 20504 22679
6/30/95 23314 22142 24845
9/30/95 24769 23759 26820
12/31/95 26044 24908 28435
3/31/96 27832 26351 29962
6/30/96 29097 27236 31307
9/30/96 29654 28039 32275
12/31/96 31273 30161 34966
3/31/97 31627 30502 35904
6/30/97 35654 34891 42172
9/30/97 38345 38060 45331
12/31/97 37938 38361 46633
Average Annual Total Returns+
Since
One Yr. Five Yrs. Inception
Seligman Common Stock Portfolio 21.31% 15.73% 15.01%
Lipper Growth and Income Funds Average 27.19 17.58 15.19*
S&P 500 33.36 20.27 17.58*
*From June 30, 1988.
While the equity markets ended the year on a down note, overtaken by concerns
that future corporate earnings would be impacted by the Asian financial crisis,
the year as a whole was a success. The Portfolio was well positioned to
participate in the appreciation of the equity markets in 1997 and saw
particularly improved relative results in the third quarter when the markets
broadened. However, in the fourth quarter, as domestic and foreign investors
funneled assets into the largest US stocks, the Portfolio's results relative to
the S&P 500 were dampened.
Seligman Common Stock Portfolio continues to offer investors lower volatility
than the S&P 500. We have been restructuring the portfolio to further enhance
these attributes. The number of common stocks in the Portfolio was selectively
reduced from more than 100 in June to just under 80 at this time. We continue to
identify attractively-valued stocks with the potential for accelerating earnings
that have a significant yield advantage relative to other companies in their
industry. The average price-to-earnings ratio of the issues in the Portfolio
remains lower than the S&P 500 while the issues provide higher projected
earnings growth.
The Portfolio's holdings in the aerospace/defense and machinery and
industrial equipment industries were most beneficial to overall results. Two
other areas of strength were found in health care and financial stocks.
Pharmaceutical stocks benefited from the success of new products and the growth
of sales, and financial stocks were supported by the low-interest-rate
environment, consolidation in the industry, and the growth of the retirement
industry.
The two most significant areas of weakness in the Portfolio were in electric
and gas utilities and technology-related stocks such as electronics and
semiconductors. Utility stocks were underweighted in the Portfolio because their
valuations were high relative to their earnings growth and this dampened results
when these stocks rallied. In technology, stocks suffered from the negative
earnings reports of several industry leaders and valuations were further reduced
by the developing Asian financial crisis.
It is likely that a difficult investment environment will persist in 1998 and
that the potential slowdown in the rate of economic expansion will increase the
importance of sound stock selection. If, as we expect, investors pay greater
attention to valuations and earnings records in 1998, Seligman Common Stock
Portfolio should benefit, as it holds companies with strong earnings records,
good future earnings growth potential, and reasonable valuations as well as
attractive dividend yields.
- --------------------
The investment return and 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.
See footnote on page P-16.
P-9
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Annual Performance Overview (continued)
- ------------------------------------------------------------------------------
Seligman Communications and Information Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman Lipper
Communications & Science &
Information Technology
Date Portfolio Funds Average S&P 500
9/30/94 10000 10000 10000
10/11/94 10000 10000 10000
12/31/94 10440 10632 9998
3/31/95 11030 11344 10972
6/30/95 14690 13643 12020
9/30/95 16950 15820 12975
12/31/95 14464 14931 13756
3/31/96 13618 15032 14495
6/30/96 13993 16063 15146
9/30/96 15139 17373 15614
12/31/96 15739 18166 16916
3/31/97 14271 16520 17370
6/30/97 16961 19541 20402
9/30/97 22018 23299 21930
12/31/97 19237 20102 22560
Average Annual Total Returns+
Since
One Yr. Inception
Seligman Communications
and Information Portfolio 22.22% 22.49%
Lipper Science & Technology Funds Average 10.65 23.93*
S&P 500 33.36 28.40*
*From September 30, 1994.
During 1997, technology stocks were subject to wide fluctuations, with
selloffs from February to May and again in November and December. The last
quarter of the year was the most difficult, as negative earnings announcements
from bellwether stocks and fears regarding the impact of the Asian crisis on the
sector led to a pronounced selloff. Semiconductor companies, which had performed
strongly until October, experienced the greatest depreciation due to the
perception that they were most vulnerable to reductions in Asian demand for
high-technology products. Further, the growing popularity of low-cost personal
computers (PCs) caused concern regarding the future profitability of PC
manufacturers.
The Portfolio, however, performed very well relative to its peer group,
supported by the performance of its radio broadcasting stocks, which benefited
from a strong advertising market and continued consolidation. Also improving
results were enterprise storage stocks, companies that provide access to data
such as inventory, which benefited from insatiable storage demand, stable
pricing, and gains in market share.
The weakest area in the portfolio was the networking industry, which was
affected by the slowdown in the industry's growth, a decline in product prices,
and a delay in the introduction of the new 56 Kilobit modem standard, which hurt
overall modem sales.
Several issues are currently impacting the technology sector's performance.
First, 1998 growth projections for worldwide semiconductor capital equipment
spending have fallen dramatically. Second, memory chips experienced a second
consecutive year of significant price declines in 1997, and after the onset of
the Asian financial crisis, South Korean chip companies announced large cuts to
their capital spending plans for 1998. Third, sub-$1,000 PCs are demonstrating
growing popularity. While the trend toward cheaper PCs benefits consumers, PC
resellers and retailers, and the PC companies themselves garner far less revenue
and profit per unit sold. Finally, there are the broad ramifications of the
Asian financial crisis on US technology stocks.
Going forward, the Portfolio has increased its positions in the
rapidly-growing sectors most likely to be unscathed by the Asian crisis. These
include: enterprise storage companies; entertainment software companies;
information services and computer software companies; mechanical and integrated
circuit design software firms; and radio broadcasting companies. Further,
although earnings-estimate revisions for technology companies have been mostly
downward in the past four months, we remain optimistic regarding the Portfolio's
long-term appreciation potential and anticipate a more positive environment in
the second half of 1998. There are several reasons for this positive longer-term
outlook: 1) The prices of US technology stocks have already been discounted and
investors should begin to factor in 1999 earnings expectations by mid 1998; 2)
The semiconductor capital spending cutbacks in South Korea and Japan will help
restore the global chip industry's long-term health; 3) New operating systems
from Microsoft and chipsets from Intel should move the PC industry back toward
high-performance machines with more memory and faster processors; and 4) The
dramatic improvements in communications bandwidth, likely to be seen by early
1999, should spur accelerated development of the Internet and renewed growth for
technology in general.
- --------------------
The investment return and 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.
See footnote on page P-16.
P-10
<PAGE>
Seligman Portfolios, Inc.
- -----------------------------------------------------------------------------
Decemer 31, 1997
- -----------------------------------------------------------------------------
Seligman Frontier Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Lipper Lipper
Seligman Russell Russell Small Cap Small Cap
Frontier 2000 Growth 2000 Growth Fund Funds
Date Portfolio Index Index Index Average
10/11/94 10000 10000 10000 10000 10000
12/31/94 10580 9926 9814 9985 9977
3/31/95 11300 10470 10266 10546 10552
6/30/95 12260 11508 11228 11522 11496
9/30/95 13780 12816 12338 12963 12848
12/31/95 14101 13005 12605 13143 13133
3/31/96 15443 13752 13249 13884 13996
6/30/96 17065 14556 13912 14985 15073
9/30/96 17731 14431 13960 15174 15380
12/31/96 17476 14470 14687 15030 15752
3/31/97 15855 12952 13928 13613 14702
6/30/97 19203 15225 16186 15936 17218
9/30/97 21455 17800 18595 18368 20043
12/31/97 20331 16342 17972 17292 19040
Average Annual Total Returns+
Since
One Yr. Inception
Seligman Frontier Portfolio 16.33% 24.61%
Lipper Small Cap Funds Average 20.87 21.88*
Lipper Small Cap Fund Index** 15.05 18.32*
Russell 2000 Index 22.36 19.72*
Russell 2000 Growth Index 12.94 16.29*
*From September 30, 1994.
** Seligman Frontier Portfolio will no longer be compared to the Lipper Small
Cap Fund Index (formerly, the Lipper Small Company Growth Fund Index) after
December 31, 1997, because it only measures the performance of 30 funds. The
Manager believes that the Lipper Small Cap Funds Average is more appropriate
as it represents the performance of the entire universe of funds that have
similar investment objectives to the Portfolio's.
In 1997, we witnessed continued economic growth, very little inflation, and
continued appreciation in the equity markets. However, there was a significant
discrepancy in the performances of large-capitalized and small-capitalized
stocks, as market participants focused their attention on the largest, most
liquid stocks due to their predictable earnings growth. Beginning in May,
however, small-cap stocks began to outperform large-cap stocks, and the
Portfolio's results improved accordingly.
The longest period of out performance occurred in the third quarter, when the
markets broadened. Two major factors played a part in this reversal: 1) The
valuations of small-cap stocks remained relatively inexpensive, whereas the
valuations of large-cap stocks neared 10-year highs; and 2) The projected
earnings-per-share growth of small-caps remained significantly greater than that
of large-caps. Another catalyst was the anticipated slowing in the earnings
growth of large companies, which was partially tied to the enduring strength of
the US Dollar and its negative impact on the overseas earnings of large
companies.
In the Portfolio, companies providing staffing-related services generally did
well, benefiting from the new job opportunities created as the economy expanded.
Corporate outsourcing also continued to grow in importance and service providers
had strong results. The financial services group was instrumental to the
performance of the Portfolio, as the low-interest-rate environment generally
benefited these stocks. We continued to seek those financial companies with the
most dynamic management teams and strong prospects for earnings growth. On the
other hand, the Portfolio's drug and health care stocks had decidedly mixed
results this year due to regulatory and cost-control concerns.
We believe that the attractive earnings found in small-cap stocks should
support the small-cap market in 1998. The small-cap growth stocks that are held
in Seligman Frontier Portfolio are still trading at price-to-earnings ratios
that are less than their projected earnings growth rates. As the Portfolio has
been constructed to provide good long-term earnings growth and capital
appreciation potential while maintaining reasonable valuations, it should
continue to benefit from the strength of small-cap stocks.
- --------------------
The investment return and 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.
See footnote on page P-16.
P-11
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Annual Performance Overview (continued)
- ------------------------------------------------------------------------------
Seligman Henderson Global Growth Opportunities Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman
Henderson
Global Growth Lipper
Opportunities Global MSCI
Date Portfolio Funds Avg. World Index
5/1/96 10000 10000 10000
5/31/96 10000 10121 10010
6/30/96 10010 10100 10062
7/31/96 9480 9652 9708
8/31/96 9790 9904 9821
9/30/96 9810 10201 10207
10/31/96 9650 10200 10281
11/30/96 9980 10694 10859
12/31/96 9922 10702 10687
1/31/97 10102 10942 10818
2/28/97 10072 10980 10944
3/31/97 10022 10784 10730
4/30/97 10072 10922 11083
5/31/97 10773 11599 11769
6/30/97 11274 12074 12357
7/31/97 11784 12669 12928
8/31/97 11164 11987 12066
9/30/97 11694 12703 12723
10/31/97 11043 11884 12055
11/30/97 11164 11906 12271
12/31/97 11169 12049 12422
Average Annual Total Returns+
Since
One Yr. Inception
Seligman Henderson Global Growth
Opportunities Portfolio 12.57% 6.85%
Lipper Global Funds Average 12.59 11.80*
MSCI World Index 16.23 13.86*
*From April 30, 1996.
The global economic expansion and the bull market in stocks continued through
1997, though with great differences among the various regions. In the US, rapid
economic growth and subdued inflation produced a powerful combination of strong
earnings and falling bond yields, thereby supporting another stellar year for
the stock market. In Continental Europe, low interest rates and widespread
corporate re structuring boosted earnings and markets. By contrast, Asia became
embroiled in financial turmoil as many of the region's currencies suffered from
a substantial depreciation.
During the year, the Portfolio's exposure to the Asian markets was
significantly reduced in favor of Europe. For much of the period, the largest
allocation in the Portfolio was to the Productivity theme, with technology and
outsourcing stocks producing some of the best returns. Toward the end of the
year, with increasing volatility in global markets and the relative weakness in
demand for technology products, we shifted the allocation toward the Quality of
Life theme where sectors such as health care would provide more stable growth.
Looking ahead, Asia's malaise implies that a period of slower global growth
is all but inevitable. As a result, estimates for prospective economic and
earnings growth have been reduced everywhere. Unfortunately, slower growth
worldwide raises economic risks in Asia and market valuation risks in Europe,
and increases the risk of earnings disappointments in the US. However, in such
an environment, quality growth stocks should do well. Using our thematic
approach, we are increasingly focusing on such stocks for the next year.
Seligman Henderson Global Smaller Companies Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman
Henderson
Global Smaller Lipper Global MSCI Salomon Bros
Companies Small Cap World World EM
Date Portfolio Funds Avg. Index Index
10/11/94 10000 10000 10000 10000
12/31/94 10353 9649 9939 9724
3/31/95 10594 9585 10417 9997
6/30/95 10886 10373 10875 10404
9/30/95 11860 11311 11496 11110
12/31/95 12152 11345 12057 11352
3/31/96 13246 12199 12563 11969
6/30/96 14589 12993 12941 12460
9/30/96 14464 12860 13128 12459
12/31/96 14421 13155 13744 12774
3/31/97 14196 12939 13799 12396
6/30/97 15810 14231 15892 13793
9/30/97 16023 15012 16363 14658
12/31/97 14915 13665 15975 13844
Average Annual Total Returns+
Since
One Yr. Inception
Seligman Henderson Global Smaller
Companies Portfolio 3.43% 13.20%
Lipper Global Small Cap Funds Average 3.88 10.07*
MSCI World Index** 16.23 15.48*
Salomon Brothers World EM Index 8.38 10.53*
*From September 30, 1994.
** Seligman Henderson Global Smaller Companies Portfolio will no longer be
compared to the Morgan Stanley Capital International World Index (MSCI World
Index) after December 31, 1997, because this Index reflects the performance
of stocks with capitalizations of all sizes, and the Portfolio invests
primarily in small-capitalization stocks.
Throughout 1997, investors were focused on liquid issues, which tend to be
large-capitalization stocks. The uncertainty about the impact of the Asian
turmoil on world growth only reinforced investors' preference for large
companies. The performance of small-capitalization stocks was weak everywhere,
with the exception of the UK--where the sterling's strength helped turn a flat
local return into a positive US dollar return.
In the US, we continued to emphasize the business services industry, due to
corporate America's growing reliance on outsourcing, and we also increased the
Portfolio's positions in companies that provide temporary staffing services as
the economic expansion created new job opportunities. In the UK, we continued to
emphasize companies with above-market earnings growth and the Portfolio
benefited from the rally that took place at the beginning of 1997. In
Continental Europe, investors focused on large, multinational companies, which
consequently outperformed small companies.
- -------------------
The investment return and 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.
See footnote on page P-16.
P-12
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1997
- ------------------------------------------------------------------------------
Seligman Henderson Global Smaller Companies Portfolio (continued)
In Japan, confidence in the economic recovery evaporated as the year
progressed, which particularly affected the more domestically-oriented small-cap
stocks. Concern about further weakness in the Japanese economy led us to reduce
the Portfolio's Japanese weighting. In the Pacific region, the devaluation of
the Thai baht precipitated a crisis that spread in the second half of the year,
resulting in substantial reductions in the prices of large and small companies
alike. We began to significantly reduce the Portfolio's weighting in the Pacific
basin in June 1997, and our investments are now almost entirely in Hong Kong,
Australia, and Singapore--which we believe have the strongest prospects in the
region.
Looking ahead, there is little doubt that the valuations of small caps around
the world are attractive. However, the focus may remain on large companies, with
small caps sidelined, at least until investors come to terms with the threat of
deflation (a decline in the price of goods and services) and the implications of
the Asian financial crisis.
Seligman Henderson Global Technology Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman
Henderson
Global Lipper
Technology Global MSCI
Date Portfolio Funds Avg. World Index
5/1/96 10000 10000 10000
5/31/96 10000 10121 10010
6/30/96 9860 10100 10062
7/31/96 8830 9652 9708
8/31/96 9250 9904 9821
9/30/96 9970 10201 10207
10/31/96 9880 10200 10281
11/30/96 10400 10694 10859
12/31/96 10401 10702 10687
1/31/97 11137 10942 10818
2/28/97 10663 10980 10944
3/31/97 9957 10784 10730
4/30/97 10109 10922 11083
5/31/97 11379 11599 11769
6/30/97 11328 12074 12357
7/31/97 12638 12669 12928
8/31/97 12729 11987 12066
9/30/97 13525 12703 12723
10/31/97 12648 11884 12055
11/30/97 12779 11906 12271
12/31/97 12432 12049 12422
Average Annual Total Returns+
Since
One Yr. Inception
Seligman Henderson Global
Technology Portfolio 19.53% 13.94%
Lipper Global Funds Average 12.59 11.80*
MSCI World Index 16.23 13.86*
*From April 30, 1996.
In 1997, the global technology sector continued to display considerable
volatility. The first nine months of the year were marked by a sharp correction
in the US technology sector from mid February through late April and,
subsequently, an equally dramatic recovery. The last quarter of the year,
however, was dominated by the economic crisis in Asia which produced a
substantial correction in technology shares in all major markets with the
exception of the UK. Over the year, the best US dollar returns were generated in
the US, but good returns were also produced in Continental Europe.
Demand in the industry remained robust for most of the year, with unit PC
sales growth continuing in the double digits and healthy demand evident in the
networking, software, and communications markets. In the early part of the year,
the strongest performance by far was delivered by the semiconductor sector,
where an upturn in orders produced some spectacular share price performance.
Unfortunately, much of this was reversed in the last three months of the year.
This pattern of early gains being subsequently eroded by worries about Asian
demand was also a feature of the PC and wireless communications stocks.
Generally, the strongest and most consistent performers during the year were our
holdings in the information technology consulting area, where the approach of
the year 2000 and of the single European currency have generated boom conditions
for many companies.
Throughout the year, we maintained only a very modest weighting in Asia,
which was cut back even further in the third quarter. While we continue to seek
buying opportunities in those markets, particularly in view of their recent
collapse, the best value is still to be found in the US and in Europe. It is in
these regions that we have invested the cash that was built up in the third
quarter. Although the first half of 1998 may prove difficult for technology
companies exposed to the PC, peripherals, and wireless markets, the stock
markets have already discounted the prices of these stocks accordingly. Other
areas of the technology sector are growing rapidly. We expect corporate earnings
growth to slow in most countries in 1998, which may attract increased investor
attention to the superior growth characteristics of the technology industry.
- ----------------------
The investment return and 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.
See footnote on page P-16.
P-13
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Annual Performance Overview (continued)
- ------------------------------------------------------------------------------
Seligman Henderson International Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman
Henderson Lipper
International International EAFE
Date Portfolio Funds Avg. Index
5/3/93 10000 10000 10000
6/30/93 10010 10002 10057
9/30/93 10480 10875 10731
12/31/93 11440 11903 10831
3/31/94 10987 11804 11216
6/30/94 11399 11934 11797
9/30/94 11751 12307 11816
12/31/94 11591 11815 11704
3/31/95 11428 11617 11931
6/30/95 11765 12094 12028
9/30/95 12603 12682 12539
12/31/95 12905 12943 13057
3/31/96 13228 13518 13443
6/30/96 13603 14010 13666
9/30/96 13520 13943 13659
12/31/96 13819 14497 13887
3/31/97 13925 14687 13680
6/30/97 15802 16322 15466
9/30/97 15716 16530 15367
12/31/97 14973 15269 14173
Average Annual Total Returns+
Since
One Yr. Inception
Seligman Henderson International Portfolio 8.35% 9.04%
MSCI EAFE Index 2.06 7.75*
Lipper International Funds Average 5.32 9.48*
*From April 30, 1993.
Turmoil in Asia and talk of global deflation led to a fair amount of
volatility and a divergence in performance across the major regions. The UK and
Continental European markets closed the year at or near record highs, while
Japan and Asia continued to flounder. The Portfolio's results were therefore
helped by our decision to underweight both the Pacific basin and Japan.
In 1997, the UK was one of the best performing regions, boosted by a robust
domestic economy. In a global context, UK equities continue to look reasonably
valued, and we increased the Portfolio's exposure there. Elsewhere in
Continental Europe, performance was strong, helped by the Economic and Monetary
Union (EMU) convergence story, corporate restructurings, and a spate of mergers
and acquisitions. We have increased our Continental European weighting as we
expect stronger economic growth and accelerating earnings going forward.
In Japan, the market suffered from the debilitating effect of April's tax
rise on the economy and from many bank and financial failures related to heavy
investments in Southeast Asia. Elsewhere in Asia, 12-month losses were great,
with investors focusing on economic instability and a severe regional credit
crunch. Finally, amidst the volatility in world markets and fourth quarter
declines, returns in the emerging markets were still quite impressive.
Overall, uncertainty is likely to persist in Asia and the global markets seem
set to remain volatile early in 1998. However, we believe the Asian crisis will
not derail the global economic recovery and while the Asian and Japanese equity
markets will probably remain depressed in the next few months, both have
significant upside potential over the longer term. In the near term, Continental
Europe, the UK, Latin America, and Emerging Europe offer the greatest upside
potential, as their positive economic and interest rate backgrounds should
endure and their earnings growth has the greatest potential.
- ------------------
The investment return and 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.
See footnote on page P-16.
P-14
<PAGE>
Seligman Portfolios, Inc.
- -----------------------------------------------------------------------------
December 31, 1997
- -----------------------------------------------------------------------------
Seligman High-Yield Bond Portfolio
The chart and total return do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman
Henderson Lipper Merrill Lynch
High-Yield High-Yield High-Yield Lipper
Bond Bond Master High Current
Date Portfolio Fund Index** Index Yield
5/1/95 10000 10000 10000 10000
5/31/95 10000 10227 10312 10235
6/30/95 10030 10269 10390 10262
7/31/95 10160 10480 10509 10447
8/31/95 10150 10504 10573 10472
9/30/95 10300 10624 10693 10586
10/31/95 10440 10704 10769 10670
11/30/95 10540 10758 10875 10741
12/31/95 10737 10919 11049 10900
1/31/96 11034 11133 11223 11139
2/29/96 11177 11245 11240 11244
3/31/96 11126 11198 11210 11210
4/30/96 11249 11287 11216 11309
5/31/96 11371 11371 11296 11411
6/30/96 11341 11378 11364 11432
7/31/96 11371 11429 11441 11486
8/31/96 11525 11611 11559 11660
9/30/96 11872 11907 11808 11969
10/31/96 11893 11958 11938 12033
11/30/96 12097 12158 12179 12252
12/31/96 12307 12303 12273 12402
1/31/97 12428 12422 12367 12538
2/28/97 12692 12628 12540 12758
3/31/97 12252 12353 12401 12488
4/30/97 12406 12457 12542 12595
5/31/97 12769 12783 12796 12937
6/30/97 13022 13000 12990 13149
7/31/97 13373 13344 13302 13503
8/31/97 13450 13369 13278 13533
9/30/97 13824 13688 13498 13852
10/31/97 13780 13634 13588 13786
11/30/97 13967 13729 13717 13888
12/31/97 14164 13891 13847 14035
Average Annual Total Returns+
Since
One Yr. Inception
Seligman High-Yield Bond Portfolio 15.09% 13.92%
Lipper High Current Yield 13.26 13.56*
Lipper High-Yield Bond Fund Index** 12.91 13.08*
Merrill Lynch High Yield Master Index 12.83 12.94*
*From April 30, 1995.
** After December 31, 1997, Seligman High-Yield Bond Portfolio will no longer be
compared to the Lipper High-Yield Bond Fund Index because it only measures
the performance of 30 funds. The Manager believes that the Lipper High
Current Yield is a more appropriate average as it represents the performance
of the entire universe of funds that have similar investment objectives to
the Portfolio's.
While the primary high-yield market issued a record $120 billion during 1997,
your Portfolio continued to maintain a disciplined credit selection process. On
a macro level, a focus on US issuers has been maintained. This strategy served
us especially well during the latter half of 1997, as certain emerging markets
experienced increased volatility. Emphasis was placed on non-cyclical industries
such as cable, telecommunications, and gaming. Strategically, we seek to invest
in individual issues with predictable cash flows, good call protection,
improving credit quality, and high relative value. We shall also continue to
underweight cyclical and zero coupon bonds and avoid distressed and defaulted
issues.
The strongest areas in the Portfolio in 1997 remained in cable, paging,
telecommunications, and radio broadcasting. Cable bonds performed well in 1997
due primarily to Microsoft's decision to invest in the industry and
Tele-Communications' new partnership arrangements. It also appears that the
Federal Communications Commission is no longer interested in re-regulating cable
rates. Select paging bonds saw significantly improved performance in the last
six months of 1997, due to improved pricing power, the relatively slight impact
of the Personal Communications Services threat on the industry, and the strong
growth in the number of units sold. The Portfolio has also continued to benefit
from the consolidations in the telecommunications and radio broadcasting
industries. Finally, we increased our investment in medical product stocks, as
these companies generate recurring revenue and are thus insulated against
economic downturns.
Looking ahead, we believe the high-yield sector continues to deliver good
relative value under the current solid economic growth and low-interest-rate
environment. Demand for high-yield bonds continues to accelerate, particularly
from the pension fund community. Fundamentals, as they relate to the credit
cycle in the United States, are positive because the low-interest-rate
environment has allowed high-yield issuers to reduce their borrowing costs and a
strong stock market has enabled high-yield issuers to access the initial public
offering market. Finally, favorable mergers and acquisitions activity and fewer
leveraged buy-outs should benefit the high-yield market over time.
- --------------------
The investment return and 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.
See footnote on page P-16.
P-15
<PAGE>
Seligman Portfolios, Inc.
- -----------------------------------------------------------------------------
Annual Performance Overview (continued)
- -----------------------------------------------------------------------------
Seligman Income Portfolio
The chart and total returns do not reflect any fees or charges that investors
will incur in purchasing or selling units of the Variable Accounts.
Seligman Lehman Brothers Lipper
Income Aggregate Income Funds
Date Portfolio Bond Index Average S&P 500
6/21/88 10000 10000 10000 10000
6/30/88 10000 10000 10000 10000
9/30/88 10090 10199 10145 10034
12/31/88 10110 10276.51 10260 10344
3/31/89 10453 10393.66 10657 11077
6/30/89 11097 11222.04 11286 12056
9/30/89 11379 11348.85 11774 13347
12/31/89 11587 11771.03 11915 13622
3/31/90 11566 11676.86 11700 13212
6/30/90 11673 12104.23 12030 14043
9/30/90 10512 12208.33 11267 12113
12/31/90 10880 12826.07 11804 13199
3/31/91 12105 13185.2 12866 15116
6/30/91 12609 13398.8 13036 15082
9/30/91 13640 14159.85 13974 15888
12/31/91 14241 14877.75 14738 17220
3/31/92 14823 14687.32 14846 16784
6/30/92 15190 15280.69 15265 17103
9/30/92 15747 15937.76 15833 17642
12/31/92 16479 15980.79 16198 18529
3/31/93 17376 16640.8 17110 19339
6/30/93 17853 17081.78 17492 19434
9/30/93 18389 17527.61 18080 19935
12/31/93 18518 17538.13 18258 20398
3/31/94 17736 17034.78 17635 19625
6/30/94 17199 16859.32 17563 19707
9/30/94 17785 16962.17 18006 20671
12/31/94 17413 17026.62 17717 20666
3/31/95 18042 17884.76 18770 22679
6/30/95 19265 18973.95 19940 24845
9/30/95 20400 19345.84 20950 26820
12/31/95 20544 20169.97 21859 28435
3/31/96 20796 19812.96 22337 29962
6/30/96 21069 19925.89 22744 31307
9/30/96 21244 20294.52 23177 32275
12/31/96 21911 20903.36 24234 34966
3/31/97 22036 20786.3 24240 35904
6/30/97 23473 21549.16 26092 42172
9/30/97 24619 22264.59 27617 45331
12/31/97 24983 22919.17 28071 46633
Average Annual Total Returns+
Since
One Yr. Five Yrs. Inception
Seligman Income Portfolio 14.02% 8.68% 10.08%
Lipper Income Funds Average 15.83 11.62 11.46*
Lehman Brothers Aggregate
Bond Index 9.64 7.48 9.11*
S&P 500 33.36 20.27 17.58*
*From June 30, 1988.
Overall, the economic background was positive for both the fixed-income and
equity portions of the Portfolio. The low-interest-rate environment led to a
rally in the fixed-income markets throughout the year, further supported by the
Federal Reserve Board's decision to leave interest rates unchanged after a March
increase in the federal funds rate. The onset of the Asian financial crisis
drove a fourth quarter rally, as investors sought refuge from the volatility of
the global equity markets in the safe haven of the US Treasury bond market. All
of these factors contributed to the strong performance of the bonds in the
Portfolio. On the equity side, investors' appetite for US common stocks
continued to grow and supported a rally in the US equity markets that increased
the value of the Portfolio's equity holdings. When the Asian financial
crisis raised concerns regarding future US corporate profitability, some equity
investors retreated into defensive stocks with stable earnings and dividends,
such as those contained in the Portfolio.
In 1997, Seligman Income Portfolio was restructured without reducing the
yield or increasing volatility. The most significant change was the decrease in
the Portfolio's exposure to convertible stocks and bonds due to the unattractive
valuations found in the group. Assets were placed in high-quality fixed-income
securities and in common stocks. In the fixed-income area, bonds with
intermediate maturities were held, as they are somewhat less volatile than
longer maturities but can still benefit from declining interest rates. The
Portfolio's common stock holdings remained broadly diversified in issues which,
on average, offer higher yields than the S&P 500 and future dividend growth
potential.
There will probably be continued equity market volatility in 1998 due to the
uncertain impact of the Asian financial crisis on the economy. However, we
believe that the portfolio's conservative investment strategy and substantial
dividend yield should be very attractive to investors in an environment of
reduced expectations regarding future equity returns. Further, the fixed-income
portion of the portfolio should continue to benefit from the low-interest-rate
environment.
- -------------------
The investment return and 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.
+ Performance data quoted represent past performance and assume that all
dividends and distributions are invested in additional shares.
P-16
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN BOND PORTFOLIO
Principal
Amount Value
---------- -----------
US GOVERNMENT AND
GOVERNMENT AGENCY
SECURITIES -- 50.7%
US GOVERNMENT
SECURITIES -- 37.3%
US Treasury Bonds
8-3/4%, 5/15/2020............. $ 500,000 $ 665,938
US Treasury Bonds
6-5/8%, 2/15/2027............. 1,400,000 1,519,877
US Treasury Notes 6-1/4%,
10/31/2001.................... 300,000 305,344
US Treasury Notes 6-1/4%,
6/30/2002..................... 200,000 204,125
-----------
Total US Government
Securities
(Cost $2,612,492)............. 2,695,284
-----------
US GOVERNMENT
AGENCY SECURITIES -- 13.4%
Federal National Mortgage
Association 7-1/2%,
11/1/2026+.................... 463,195 474,341
Government National Mortgage
Association:
7-1/2%, 6/15/2023+............ 215,496 221,757
7-1/2%, 3/15/2026+............ 269,170 275,982
-----------
Total US Government
Agency Securities
(Cost $924,959)............... 972,080
-----------
Total US Government and
Government Agency Securities
(Cost $3,537,451)............. 3,667,364
-----------
CORPORATE BONDS -- 40.4%
Anixter 8%, 9/15/2003............ 200,000 210,279
Associates Corp. of North
America 6-1/2%, 8/15/2002..... 200,000 202,068
Barrett Resources 7.55%,
2/1/2007...................... 200,000 207,771
Capital One Bank 8-1/8%,
3/1/2000...................... 150,000 155,386
Principal
Amount Value
---------- -----------
CORPORATE BONDS (continued)
First Data 6-3/8%, 12/15/2007.... $ 200,000 $ 199,291
First USA Bank 5-3/4%,
1/15/1999..................... 100,000 99,819
General Motors Acceptance
5-5/8%, 2/1/1999.............. 150,000 149,456
Geon 6-7/8%, 12/15/2005.......... 200,000 202,032
Loewen Group International
7-1/2%, 4/15/2001............. 200,000 206,142
The Money Store 8.05%,
4/15/2002..................... 200,000 207,206
Oryx Energy 8-1/8%,
10/15/2005.................... 200,000 215,288
Owens-Illinois 7.85%,
5/15/2004..................... 200,000 210,250
Petroleum Georgia Pacific
7-1/2%, 3/31/2007............. 200,000 213,408
Time Warner 9-1/8%, 1/15/2013.... 200,000 239,369
Woolworth 7%, 6/1/2000........... 200,000 202,771
-----------
Total Corporate Bonds
(Cost $2,828,492)............. 2,920,536
-----------
REPURCHASE
AGREEMENTS -- 5.5%
(Cost $400,000)
HSBC Securities, Inc. 5%, dated
12/31/1997, maturing 1/5/1998
collateralized by: $380,000
US Treasury Notes 6-7/8%
5/15/2006, with a fair market
value of $409,979............. 400,000 400,000
-----------
Total Investments -- 96.6%
(Cost $6,765,943)............. 6,987,900
Other Assets Less
Liabilities -- 3.4%........... 244,137
-----------
Net Assets -- 100.0%............. $7,232,037
-----------
-----------
- ----------------
+ Investments in mortgage-backed securities are subject to principal paydowns.
As a result of prepayments from refinancing or satisfaction of the underlying
mortgage instruments, the average life may be less than the original maturity.
This in turn may impact the ultimate yield realized from these investments.
See Notes to Financial Statements.
P-17
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 97.9%
BASIC MATERIALS -- 3.6%
Minerals Technologies............ 5,000 $ 227,187
Nucor............................ 4,500 217,406
Olin............................. 6,400 300,000
-----------
744,593
-----------
CAPITAL GOODS -- 3.1%
Gulfstream Aerospace*............ 10,600 310,050
Rayovac*......................... 9,300 179,025
Vishay Intertechnology*.......... 6,510 153,798
-----------
642,873
-----------
CONSUMER CYCLICALS -- 13.5%
AccuStaff*....................... 7,300 167,900
American Skiing*................. 13,400 199,325
Barnes & Noble*.................. 8,200 273,675
CapStar Hotel*................... 6,400 219,600
Harley-Davidson.................. 7,100 194,363
Interpublic Group of
Companies..................... 9,600 478,200
Jones Apparel Group*............. 9,600 412,800
Mattel........................... 7,812 290,997
Mirage Resorts*.................. 13,500 307,125
Snyder Communications*........... 5,700 208,050
-----------
2,752,035
-----------
CONSUMER STAPLES -- 14.4%
Bergen Brunswig (Class A)........ 3,200 134,800
Beringer Wine Estates
(Class B)*.................... 3,050 115,900
Cardinal Health.................. 2,800 210,350
Clorox........................... 3,200 253,000
Coca-Cola Enterprises............ 17,600 625,900
Dial............................. 14,000 291,375
Estee Lauder (Class A)........... 4,800 246,900
Fresh Del Monte Produce*......... 21,200 310,050
Kroger*.......................... 6,400 236,400
McKesson......................... 2,500 270,469
Newell........................... 5,500 233,750
-----------
2,928,894
-----------
DRUGS AND
HEALTH CARE -- 10.5%
Biogen*.......................... 3,900 142,106
Covance*......................... 20,700 411,412
Shares Value
---------- -----------
DRUGS AND
HEALTH CARE (continued)
Humana*.......................... 15,500 $ 321,625
KOS Pharmaceuticals*............. 7,600 117,088
Pfizer........................... 3,800 283,338
US Surgical...................... 10,600 310,712
Universal Health Services
(Class B)*.................... 11,200 564,200
-----------
2,150,481
-----------
ENERGY -- 5.1%
Barrett Resources*............... 8,000 242,000
Bayard Drilling Technologies*.... 7,700 125,125
EVI*............................. 1,600 82,800
Gulf Indonesia Resources*
(Indonesia)................... 3,200 70,400
Petroleum Geo-Services
(ADRs)* (Norway).............. 5,000 323,750
Transocean Offshore.............. 4,000 192,750
-----------
1,036,825
-----------
FINANCIAL SERVICES -- 19.2%
AFLAC............................ 3,800 194,275
Donaldson, Lufkin & Jenrette
Securities.................... 4,100 325,950
MBNA............................. 15,000 409,688
Nationwide Financial Services
(Class A)..................... 8,000 289,000
Old Republic International....... 5,500 204,531
Peoples Heritage Financial
Group......................... 4,700 217,081
Progressive (Ohio)............... 3,700 443,537
Provident Companies.............. 7,700 297,412
Schwab (Charles)................. 14,800 620,675
SouthTrust....................... 4,500 285,188
Travelers........................ 11,700 630,338
-----------
3,917,675
-----------
MEDIA AND
BROADCASTING -- 2.4%
CBS.............................. 16,390 482,481
-----------
PRINTING AND
PUBLISHING -- 1.0%
Petersen Companies (Class A)*.... 3,000 69,000
World Color Press*............... 5,100 135,469
-----------
204,469
-----------
- -------------
* Non-income producing security.
See Notes to Financial Statements.
P-18
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
Shares Value
---------- -----------
SAVINGS AND LOAN
COMPANIES -- 8.0%
GreenPoint Financial............. 6,400 $ 464,400
Ocwen Financial*................. 10,200 259,462
St. Paul Bancorp................. 8,587 224,872
TCF Financial.................... 8,300 281,681
Washington Mutual................ 6,400 408,200
-----------
1,638,615
-----------
TECHNOLOGY -- 14.3%
Activision*...................... 12,500 224,219
Adaptec*......................... 4,400 163,625
Arrow Electronics*............... 6,000 194,625
BMC Software*.................... 3,700 242,581
Ceridian*........................ 6,400 293,200
Fiserv*.......................... 7,900 389,075
Gartner Group (Class A)*......... 5,700 212,681
Linear Technology................ 3,400 195,713
Maxim Integrated Products*....... 9,800 338,713
Symantec*........................ 6,200 136,981
Synopsys*........................ 8,200 292,638
Xilinx*.......................... 6,500 227,500
-----------
2,911,551
-----------
Shares Value
---------- -----------
TELECOMMUNICATIONS -- 2.8%
Century Telephone
Enterprises................... 6,400 $ 318,800
QUALCOMM*........................ 4,900 247,603
-----------
566,403
-----------
Total Common Stocks
(Cost $15,992,637)............ 19,976,895
SHORT-TERM HOLDINGS -- 4.9%
(Cost $1,000,000)............. 1,000,000
-----------
Total Investments -- 102.8%
(Cost $16,992,637)............ 20,976,895
Other Assets Less
Liabilities -- (2.8)%......... (577,103)
-----------
Net Assets -- 100.0%............. $20,399,792
-----------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-19
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN CASH MANAGEMENT PORTFOLIO
Annualized
Yield on Principal
Purchase Date Amount Value
------------- --------- -----
US GOVERNMENT
SECURITIES -- 58.6 %
US Treasury Bills,
1/8/1998.............. 5.21% $1,415,000 $ 1,413,609
US Treasury Bills,
1/29/1998............. 5.22 1,900,000 1,892,545
US Treasury Bills,
3/5/1998.............. 5.33 1,775,000 1,758,941
-----------
Total US Government
Securities
(Cost $5,065,095)..... 5,065,095
-----------
COMMERCIAL
PAPER -- 38.7%
American General Finance
Corp., 2/4/1998....... 5.70 510,000 507,332
Associates Corp. of North
America, 3/4/1998.... 5.85 460,000 455,492
Beneficial Corp.,
1/15/1998............. 5.78 510,000 508,881
Ford Motor Credit Corp.,
2/27/1998............. 5.86 460,000 455,849
General Electric Capital
Corp., 3/30/1998...... 5.72 450,000 443,884
John Deere Capital Corp.,
3/11/1998............. 5.81 465,000 459,964
Annualized
Yield on Principal
Purchase Date Amount Value
------------- --------- -----
COMMERCIAL PAPER (continued)
Norwest Financial,
2/10/1998............... 5.81% $510,000 $ 506,798
-----------
Total Commercial Paper
(Cost $3,338,200)....... 3,338,200
REPURCHASE
AGREEMENTS -- 5.8%
(Cost $500,000)
HSBC Securities, Inc. 5%,
dated 12/31/1997,
maturing 1/5/1998
collateralized by:
$475,000 US Treasury
Notes 6-7/8% 5/15/2006,
with a fair market value of
$512,474................ 500,000 500,000
-----------
Total Investments -- 103.1%
(Cost $8,903,295)....... 8,903,295
Other Assets Less
Liabilities -- (3.1)%.... (268,009)
-----------
Net Assets -- 100.0%........ $ 8,635,286
-----------
-----------
- ------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 95.4%
AEROSPACE/DEFENSE -- 2.7%
General Dynamics................. 6,000 $ 518,625
United Technologies.............. 11,400 830,063
-----------
1,348,688
-----------
AUTOMOTIVE AND RELATED -- 4.2%
Chrysler......................... 13,600 478,550
Dana............................. 10,600 503,500
Eaton............................ 5,200 464,100
Harley-Davidson.................. 25,900 709,013
-----------
2,155,163
-----------
Shares Value
---------- -----------
BASIC MATERIALS -- 0.9%
Aluminum Company of
America....................... 6,500 $ 457,438
-----------
BUSINESS SERVICES AND
SUPPLIES -- 0.6%
Xerox............................ 4,200 310,013
-----------
CHEMICALS -- 1.9%
duPont (E.l.) de Nemours......... 8,000 480,500
Goodrich (B.F.).................. 11,300 468,244
-----------
948,744
-----------
- ---------------
See Notes to Financial Statements.
P-20
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares Value
---------- -----------
COMPUTER GOODS AND
SERVICES -- 4.5%
Compaq Computer.................. 11,250 $ 634,922
Computer Associates
International................. 6,300 333,112
International Business
Machines...................... 4,700 491,444
Microsoft*....................... 6,300 814,078
-----------
2,273,556
-----------
CONSTRUCTION -- 1.0%
Sherwin-Williams................. 17,700 491,175
-----------
CONSUMER GOODS AND
SERVICES -- 11.4%
Anheuser-Busch................... 23,300 1,025,200
Coca-Cola........................ 13,700 912,762
PepsiCo.......................... 13,200 480,975
Philip Morris.................... 23,300 1,055,781
Procter & Gamble................. 12,600 1,005,638
RJR Nabisco Holdings............. 34,800 1,305,000
-----------
5,785,356
-----------
DRUGS AND HEALTH
CARE -- 10.4%
Abbott Laboratories.............. 6,500 426,156
American Home Products........... 4,700 359,550
Bristol-Myers Squibb............. 13,000 1,230,125
Johnson & Johnson................ 12,100 797,088
Merck............................ 8,300 881,875
Pfizer........................... 9,600 715,800
Schering-Plough.................. 13,800 857,325
-----------
5,267,919
-----------
ELECTRIC AND GAS
UTILITIES -- 3.4%
Unicom*.......................... 29,200 897,900
Williams Companies............... 29,800 845,575
-----------
1,743,475
-----------
ELECTRICAL
EQUIPMENT -- 0.8%
Thomas & Betts................... 9,100 429,975
-----------
Shares Value
---------- -----------
ELECTRONICS -- 6.0%
AMP.............................. 13,400 $ 562,800
Applied Materials*............... 18,700 562,753
Arrow Electronics*............... 16,600 538,463
KLA-Tencor*...................... 9,900 382,078
Motorola......................... 8,000 456,500
Raytheon......................... 11,000 555,500
-----------
3,058,094
-----------
ENERGY -- 9.7%
Atlantic Richfield............... 5,200 416,650
Baker Hughes..................... 7,300 318,462
Exxon............................ 16,100 985,119
Mobil............................ 13,500 974,531
Royal Dutch Petroleum
(Netherlands)................. 20,600 1,116,262
Schlumberger..................... 6,300 507,150
Texaco........................... 11,100 603,563
-----------
4,921,737
-----------
FINANCE AND
INSURANCE -- 13.1%
Ahmanson (H.F.).................. 8,400 562,275
American General................. 9,900 535,219
American International Group..... 7,500 815,625
BankAmerica...................... 5,100 372,300
Bank of New York................. 10,100 583,906
Citicorp......................... 3,142 397,267
Federal National Mortgage
Association................... 10,900 621,981
First Union...................... 10,600 543,250
General Re....................... 1,300 275,600
Mellon Bank...................... 5,400 327,375
St. Paul Companies............... 5,200 426,725
TIG Holdings .................... 22,400 743,400
Travelers........................ 7,900 425,612
-----------
6,630,535
-----------
FOOD -- 2.7%
ConAgra.......................... 21,000 689,062
Sara Lee......................... 11,900 670,119
-----------
1,359,181
-----------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-21
<PAGE>
Seligman Portfolios, Inc.
Portfolios of Investments (continued)
SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares Value
---------- -----------
MACHINERY AND INDUSTRIAL
EQUIPMENT -- 6.7%
Deere............................ 8,500 $ 495,656
GATX............................. 5,200 377,325
General Electric................. 20,100 1,474,838
Harnischfeger Industries......... 11,400 402,563
Illinois Tool Works.............. 10,500 631,312
-----------
3,381,694
-----------
METALS AND MINING -- 0.8%
Allegheny Teledyne............... 15,400 398,475
-----------
PAPER AND PACKAGING -- 1.6%
Fort James....................... 7,300 279,225
Mead............................. 18,900 529,200
-----------
808,425
-----------
PUBLISHING -- 1.0%
Gannett.......................... 8,400 519,225
-----------
RETAIL TRADE -- 1.6%
Penney (J.C.).................... 8,000 482,500
Wal-Mart Stores.................. 8,500 335,218
-----------
817,718
-----------
TECHNOLOGY -- 2.1%
Hewlett-Packard.................. 5,200 325,000
Intel............................ 10,500 737,297
-----------
1,062,297
-----------
Shares Value
---------- -----------
TELECOMMUNICATIONS -- 1.9%
Sprint........................... 6,800 $ 398,650
WorldCom*........................ 18,900 572,316
-----------
970,966
-----------
TELEPHONE UTILITIES -- 4.1%
Ameritech........................ 10,500 845,250
Bell Atlantic.................... 6,500 591,500
SBC Communications............... 8,800 644,600
-----------
2,081,350
-----------
TRANSPORTATION -- 0.9%
Norfolk Southern................. 15,000 462,187
-----------
MISCELLANEOUS/
DIVERSIFIED -- 1.4%
AlliedSignal..................... 18,300 712,556
-----------
Total Common Stocks
(Cost $40,142,683)............ 48,395,942
Short-Term Holdings -- 3.9%
(Cost $2,000,000)............. 2,000,000
-----------
Total Investments -- 99.3%
(Cost $42,142,683)............ 50,395,942
Other Assets Less
Liabilities -- 0.7%........... 341,221
-----------
Net Assets -- 100.0%............. $50,737,163
-----------
-----------
- ------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 97.9%
COMMUNICATIONS
INFRASTRUCTURE -- 7.9%
Aspect Telecommunications*....... 31,900 $ 669,900
CIDCO*........................... 40,000 762,500
Cisco Systems*................... 34,950 1,950,647
ECI Telecommunications........... 45,200 1,155,425
Excel Switching*................. 50,000 896,875
Oak Industries*.................. 19,600 581,875
Tellabs*......................... 17,300 913,116
-----------
6,930,338
-----------
Shares Value
---------- -----------
COMPUTER HARDWARE/
PERIPHERALS -- 21.1%
Adaptec*......................... 35,600 $ 1,323,875
American Power Conversion*....... 39,400 933,287
Creative Technology*............. 81,700 1,792,294
Data General..................... 19,600 341,775
Electronics for Imaging*......... 88,400 1,466,888
EMC*............................. 147,200 4,038,800
Encad*........................... 14,400 399,600
Gateway 2000*.................... 22,000 717,750
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-22
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued)
Shares Value
---------- -----------
COMPUTER HARDWARE/
PERIPHERALS (continued)
In Focus Systems*................ 16,900 $ 518,619
Lexmark International Group
(Class A)*.................... 62,300 2,367,400
Read-Rite*....................... 74,100 1,176,337
Storage Technology*.............. 49,000 3,034,938
Unisys*.......................... 30,800 427,350
-----------
18,538,913
-----------
COMPUTER SOFTWARE -- 15.2%
3DO*............................. 41,400 89,916
Activision*...................... 19,600 351,575
ANSYS*........................... 25,500 182,484
Cadence Design Systems*.......... 47,000 1,151,500
Compuware*....................... 30,700 983,359
Electronic Arts*................. 12,000 453,750
Gemstar International Group*..... 20,600 495,687
Microsoft*....................... 3,300 426,422
Network Associates*.............. 46,134 2,435,010
Parametric Technology*........... 50,000 2,365,625
Structural Dynamics
Research*..................... 63,700 1,441,213
Synopsys*........................ 62,037 2,213,945
Viasoft*......................... 18,300 774,319
-----------
13,364,805
-----------
CONTRACT MANUFACTURING/
CIRCUIT BOARDS -- 3.5%
ADFlex Solutions*................ 17,300 282,206
Hadco*........................... 22,100 1,000,716
Jabil Circuit*................... 13,500 536,625
Sanmina*......................... 17,900 1,218,319
-----------
3,037,866
-----------
ELECTRONICS CAPITAL
EQUIPMENT -- 14.6%
Applied Materials*............... 38,400 1,155,600
ASM Lithography* (Netherlands)... 3,800 256,737
Asyst Technologies*.............. 11,700 257,400
Cognex*.......................... 45,100 1,231,794
Credence Systems*................ 42,800 1,265,275
Electro Scientific Industries*... 21,300 816,056
Etec Systems*.................... 34,600 1,606,737
Fusion Systems (Rights)*......... 20,000 15,000
KLA-Tencor*...................... 40,400 1,559,187
Kulicke & Soffa Industries*...... 47,900 895,131
Shares Value
---------- -----------
ELECTRONICS CAPITAL
EQUIPMENT (continued)
Novellus Systems*................ 53,000 $ 1,714,219
Teradyne*........................ 62,800 2,009,600
-----------
12,782,736
-----------
INFORMATION SERVICES -- 8.4%
BISYS Group*..................... 21,100 704,212
Computer Sciences*............... 19,200 1,603,200
First Data....................... 46,100 1,348,425
Galileo International............ 35,600 983,450
Gartner Group (Class A)*......... 47,100 1,757,419
Information Resources*........... 19,800 266,063
Tele-Communications*............. 23,500 666,078
-----------
7,328,847
-----------
MEDIA -- 11.1%
A.H. Belo (Class A).............. 15,400 864,325
CBS.............................. 108,200 3,185,137
Chancellor Media (Class A)*...... 33,300 2,486,053
CKS Group*....................... 10,000 141,250
Clear Channel
Communications*............... 13,700 1,088,294
Cox Radio (Class A)*............. 17,700 712,425
Time Warner...................... 9,600 595,200
Universal Outdoor Holdings*...... 11,900 620,288
-----------
9,692,972
-----------
SEMICONDUCTORS -- 14.1%
Altera*.......................... 9,700 321,616
Atmel*........................... 19,700 366,297
Dallas Semiconductor............. 22,100 900,575
International Rectifier*......... 33,900 400,444
Lattice Semiconductor*........... 43,200 2,052,000
Maxim Integrated Products*....... 61,600 2,129,050
Microchip Technology*............ 56,700 1,704,544
National Semiconductor*.......... 25,035 649,345
PMC-Sierra*...................... 19,500 608,156
Unitrode*........................ 30,800 662,200
Vishay Intertechnology*.......... 40,400 954,450
VLSI Technology*................. 50,000 1,181,250
Xilinx*.......................... 13,500 472,500
-----------
12,402,427
-----------
- -------------
* Non-income producing security.
See Notes to Financial Statements.
P-23
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued)
Shares or
Principal
Amount Value
---------- -----------
TELECOMMUNICATIONS -- 2.0%
L.M. Ericsson Telefon (Series B)
(ADRs) (Sweden)............... 5,900 shs. $ 220,327
General Communications*.......... 34,900 233,394
Lucent Technologies.............. 2,900 231,638
MCI Communications............... 9,600 411,000
Millicom International Cellular*
(Luxembourg).................. 5,600 209,300
Nokia (Class A) (ADRs)
(Finland)..................... 2,900 203,000
QUALCOMM*........................ 4,000 202,125
-----------
1,710,784
-----------
Total Common Stocks
(Cost $91,528,117)............ 85,789,688
-----------
SUBORDINATED CONVERTIBLE
BONDS -- 0.2%
(Cost $190,000)
COMPUTER SOFTWARE -- 0.2%
Activision 6-3/4%, 1/1/2005...... $190,000 202,350
-----------
Principal
Amount Value
---------- -----------
REPURCHASE
AGREEMENTS -- 7.8%
(Cost $6,800,000)
HSBC Securities, Inc., 5%,
dated 12/31/1997, maturing
1/5/1998 collateralized by:
$5,290,000 US Treasury
Notes 11-7/8% 11/15/2003,
with a fair market value
of $6,960,131................. $6,800,000 $ 6,800,000
-----------
Total Investments -- 105.9%
(Cost $98,518,117)............ 92,792,038
Other Assets Less
Liabilities -- (5.9)%......... (5,159,201)
-----------
Net Assets -- 100.0%............. $87,632,837
-----------
-----------
- ------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 93.9%
ADVERTISING -- 1.4%
Acxiom........................... 1,900 $ 36,337
ADVO*............................ 14,700 286,650
HA-LO Industries*................ 11,200 291,200
-----------
614,187
-----------
AEROSPACE AND DEFENSE -- 0.8%
Avondale Industries*............. 11,300 336,175
-----------
BUSINESS GOODS AND
SERVICES -- 14.7%
AccuStaff*....................... 38,600 887,800
Affiliated Computer Services
(Class A)*.................... 11,400 299,962
American Management
Systems*...................... 6,000 116,625
American Pad & Paper*............ 7,100 68,338
Analysts International........... 7,500 260,625
Ceridian*........................ 24,900 1,140,731
Copart*.......................... 8,000 141,500
Corporate Express................ 47,600 614,337
Shares Value
---------- -----------
BUSINESS GOODS AND
SERVICES (continued)
DST Systems*..................... 11,800 $ 503,713
FirstService*.................... 7,100 53,250
JP Foodservice*.................. 17,100 631,631
Personnel Group of America*...... 10,100 333,300
Pierce Leahy*.................... 9,200 188,600
Pittston Brink's Group........... 10,400 418,600
PMT Services*.................... 28,100 392,522
SPR.............................. 10,000 168,125
Staff Leasing*................... 4,900 92,487
-----------
6,312,146
-----------
CAPITAL GOODS -- 3.2%
DONCASTERS (ADRs)*
(United Kingdom).............. 22,800 481,650
Fusion Systems (Rights)*......... 3,745 2,809
Oak Industries*.................. 17,230 511,516
UCAR International*.............. 9,500 379,406
-----------
1,375,381
-----------
CHEMICALS -- 0.5%
Polymer Group*................... 21,600 205,200
-----------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-24
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
Shares Value
---------- -----------
COMMUNICATIONS -- 2.5%
ANTEC*........................... 18,700 $ 294,525
Arch Communications Group*....... 6,165 31,981
CIDCO*........................... 11,480 218,838
Glenayre Technologies*........... 19,400 192,787
Omnipoint*....................... 15,100 352,019
-----------
1,090,150
-----------
COMPUTER SOFTWARE -- 4.5%
Avant!*.......................... 16,900 284,131
BISYS Group*..................... 13,600 453,900
IMNET Systems*................... 10,000 161,250
Inso*............................ 7,900 90,603
Primark*......................... 7,100 288,881
PSW Technologies*................ 17,700 253,331
Synopsys*........................ 11,300 403,269
-----------
1,935,365
-----------
CONSUMER GOODS AND
SERVICES -- 6.3%
American Homestar................ 44,137 728,261
Carriage Services (Class A)*..... 12,900 242,681
Coinmach Laundry*................ 45,000 1,108,125
Equity*.......................... 14,300 330,687
International Home Foods*........ 2,900 81,200
Zag Industries*.................. 23,500 205,625
-----------
2,696,579
-----------
DRUGS AND HEALTH
CARE -- 14.8%
American HomePatient*............ 21,200 492,900
AmeriSource Health (Class A)*.... 9,730 566,773
Castle Dental Centers*........... 55,000 419,375
Collaborative Clinical
Research*..................... 20,000 103,125
CompDent*........................ 16,500 337,219
First Commonwealth .............. 71,700 833,512
HealthCor Holdings*.............. 13,700 54,800
National Surgery Centers*........ 19,575 512,620
NCS Healthcare*.................. 12,900 340,238
Omnicare......................... 8,700 269,700
Orthalliance (Class A)*.......... 15,000 136,406
Quorum Health Group*............. 8,600 225,750
Renex*........................... 50,000 268,750
Scherer (R.P.)*.................. 12,600 768,600
Total Renal Care Holdings*....... 22,500 618,750
Watson Pharmaceuticals*.......... 12,600 408,712
-----------
6,357,230
-----------
Shares Value
---------- -----------
EDUCATIONAL
SERVICES -- 1.7%
Educational Medical*............. 25,000 $ 206,250
Edutrek International
(Class A)*.................... 20,200 527,725
-----------
733,975
-----------
ELECTRONICS -- 11.1%
Applied Micro Circuits*.......... 7,600 94,525
Black Box*....................... 10,800 383,400
Burr-Brown*...................... 16,500 531,094
Cognex*.......................... 24,560 670,795
Credence Systems*................ 24,500 724,281
General Semiconductors*.......... 28,000 323,750
Integrated Device
Technologies*................. 10,800 101,925
KEMET*........................... 31,600 610,275
Lattice Semiconductor*........... 5,670 269,325
PMC-Sierra*...................... 21,300 664,294
Vishay Intertechnology*.......... 16,040 378,945
-----------
4,752,609
-----------
ENVIRONMENTAL
MANAGEMENT -- 1.6%
Allied Waste Industries*......... 29,400 686,306
-----------
FARM EQUIPMENT -- 0.4%
RDO Equipment (Class A)*......... 9,000 164,813
-----------
FINANCIAL SERVICES -- 5.9%
American Capital Strategies*..... 10,600 190,138
CMAC Investment.................. 6,800 410,550
Commerce Bancorp................. 5,381 274,431
First Investors Financial
Services Group*............... 5,100 34,425
HCC Insurance Holdings........... 6,700 142,375
Imperial Credit*................. 13,800 285,488
Imperial Credit Commercial
Mortgage...................... 7,200 105,300
Insignia Financial Group*........ 19,700 453,100
Ocwen Financial*................. 10,400 264,550
PFF Bancorp*..................... 3,400 68,213
Roslyn Bancorp................... 8,900 207,203
Statewide Financial.............. 5,100 119,212
-----------
2,554,985
-----------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-25
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
Shares Value
---------- -----------
GAMING -- 1.9%
Anchor Gaming*................... 7,800 $ 434,850
GTECH Holdings*.................. 12,300 392,831
-----------
827,681
-----------
INDEPENDENT POWER
PRODUCERS -- 2.2%
CalEnergy*....................... 17,360 499,100
Calpine*......................... 31,100 462,612
-----------
961,712
-----------
INDUSTRIAL GOODS
AND SERVICES -- 1.4%
Chart Industries................. 4,300 98,094
Flanders*........................ 16,000 149,500
General Cable*................... 9,700 351,019
-----------
598,613
-----------
MEDIA AND BROADCASTING -- 4.3%
Chancellor Media (Class A)*...... 8,954 668,472
Hearst-Argyle Television
(Class A)*.................... 11,481 339,407
Jacor Communications*............ 13,350 710,053
Paxson Communications
(Class A)*.................... 20,300 149,713
-----------
1,867,645
-----------
MEDICAL PRODUCTS AND
TECHNOLOGY -- 5.1%
Dentsply International........... 16,170 499,754
Gulf South Medical Supply*....... 12,400 464,225
Physician Sales and Service*..... 14,300 311,025
Somnus Medical
Technologies*................. 20,000 253,125
Suburban Ostomy Supply*.......... 15,700 183,494
Thermoquest*..................... 10,100 183,063
Waters*.......................... 7,300 274,662
-----------
2,169,348
-----------
OIL AND GAS -- 2.6%
Cabot Oil & Gas.................. 3,300 64,144
Eagle Geophysical*............... 10,800 141,750
McDermott International.......... 5,600 205,100
Pogo Producing................... 11,410 336,595
Shares or
Principal
Amount Value
---------- -----------
OIL AND GAS (continued)
Pride International*............. 6,200 shs. $ 156,550
Santa Fe Energy Resources*....... 19,600 220,500
-----------
1,124,639
-----------
PUBLISHING -- 1.8%
CMP Media (Class A)*............. 4,100 70,725
Journal Register*................ 20,100 422,100
Petersen Companies
(Class A)*.................... 12,700 292,100
-----------
784,925
-----------
REAL ESTATE INVESTMENT
TRUST -- 1.3%
CCA Prison Realty Trust.......... 12,800 571,200
-----------
RETAIL TRADE -- 1.9%
Barnes & Noble*.................. 10,000 333,750
Borders Group*................... 8,500 266,156
Party City*...................... 6,400 205,200
-----------
805,106
-----------
THEATERS -- 0.2%
Regal Cinemas*................... 3,500 98,000
-----------
TRANSPORTATION -- 1.8%
OMI*............................. 24,300 223,256
US Xpress Enterprises*........... 10,300 226,600
Wisconsin Central Transport*..... 13,000 304,688
-----------
754,544
-----------
Total Common Stocks
(Cost $37,338,660)............ 40,378,514
REPURCHASE
AGREEMENTS -- 7.0%
(Cost $3,000,000)
HSBC Securities, Inc., 5%,
dated 12/31/1997, maturing
1/5/1998 collateralized by:
$2,334,000 US Treasury
Notes 11-7/8% 11/15/2003,
with a fair market value
of $3,070,878 $3,000,000 3,000,000
-----------
- -------------
* Non-income producing security.
See Notes to Financial Statements.
P-26
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
Value
-----------
Total Investments -- 100.9%
(Cost $40,338,660)........... $43,378,514
Other Assets
Less Liabilities -- (0.9)%.... (405,241)
Value
-----------
Net Assets -- 100.0%............. $42,973,273
-----------
-----------
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 93.8%
AUSTRALIA -- 0.4%
Pacifica Group
(Automotive and Related)...... 5,200 $ 17,230
Telstra* (Telecommunications).... 2,500 5,277
-----------
22,507
-----------
BRAZIL -- 2.8%
Companhia Energetica de
Minas Gerais "CEMIG"
(ADRs) (Electric and
Gas Utilities)................ 380 17,100
Petroleo Brasileiro "Petrobras"
(ADRs) (Resources)............ 2,430 56,829
Telecomunicacoes Brasileiras
"Telebras" (ADRs)
(Telecommunications).......... 680 79,178
-----------
153,107
-----------
CHINA -- 0.3%
Huaneng Power International
(ADRs)* (Electric and
Gas Utilities)................ 688 15,953
-----------
FINLAND -- 2.6%
Nokia (Telecommunications)....... 985 69,973
Outokumpu (Industrial
Goods and Services)........... 2,080 25,391
Raision Tehtaat (Consumer
Goods and Services)........... 400 47,506
-----------
142,870
-----------
FRANCE -- 4.9%
Accor (Entertainment and
Leisure)...................... 440 81,835
Cap Gemini (Computer and
Technology Related)........... 1,000 82,024
Genset* (Drugs and
Health Care).................. 1,600 31,700
Shares Value
---------- -----------
FRANCE (continued)
Valeo (Automotive and
Related)...................... 1,030 $ 69,882
-----------
265,441
-----------
GERMANY -- 3.8%
Adidas (Consumer Goods
and Services)................. 750 99,252
Lufthansa (Transportation)....... 2,970 55,818
Metro (Retailing)................ 1,416 50,233
-----------
205,303
-----------
HONG KONG -- 0.2%
Kwoon Chung Bus Holdings
(Transportation).............. 40,000 9,603
-----------
HUNGARY -- 3.3%
Magyar Tavkozlesi Rt.
"Matav" (ADRs)
(Telecommunications).......... 2,080 54,080
MOL Magyar Olaj-es Gazipari
(GDRs) (Resources)............ 5,200 126,880
-----------
180,960
-----------
INDIA -- 1.3%
State Bank of India (GDRs)+
(Financial Services).......... 1,400 25,375
Videsh Sanchar Nigam (GDRs)+
(Telecommunications).......... 3,350 46,481
-----------
71,856
-----------
INDONESIA -- 0.4%
Gulf Indonesia Resources*
(Resources)................... 1,000 22,000
-----------
IRELAND -- 1.4%
Elan (ADRs)*
(Drugs and Health Care)....... 1,525 78,061
-----------
- --------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-27
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
Shares Value
---------- -----------
ITALY -- 1.8%
Aeroporti di Roma
(Transportation).............. 4,850 $ 50,308
Mediolanum* (Financial
Services)..................... 2,400 45,177
-----------
95,485
-----------
JAPAN -- 7.5%
Asahi Diamond Industries
(Manufacturing and Industrial
Equipment).................... 60 262
Bellsystem 24 (Business Goods
and Services)................. 300 39,336
Daitec (Business Goods
and Services)................. 800 13,495
Diamond Computer Service
(Computer and Technology
Related)...................... 3,000 44,167
HIS (Entertainment
and Leisure).................. 1,100 19,147
Hogy Medical (Drugs and
Health Care).................. 900 27,328
Keyence (Electronics)............ 200 29,598
Kyocera (Electronics)............ 600 27,236
Meitec (Computer and Technology
Related)...................... 1,000 28,141
Nomura Securities (Financial
Services)..................... 4,000 53,368
Sanyo Shinpan Finance
(Financial Services).......... 740 32,740
Secom (Support Services)......... 1,000 63,950
Softbank (Computer and
Technology Related)........... 900 23,464
Tsutsumi Jewelry (Retailing)..... 500 6,134
-----------
408,366
-----------
MEXICO -- 2.3%
Desc (ADRs) (Diversified)........ 2,650 99,375
Grupo Iusacell (ADRs)*
(Telecommunications).......... 1,200 26,025
-----------
125,400
-----------
NETHERLANDS -- 6.4%
Elsevier (Publishing)............ 4,500 72,835
Gucci Group (Consumer Goods
and Services)................ 1,300 54,438
Heineken (Consumer Goods
and Services)................ 395 68,806
Shares Value
---------- -----------
NETHERLANDS (continued)
Koninklijke KNP BT (Business
Goods and Services)........... 2,090 $ 48,163
Koninklijke Van Ommeren
(Transportation).............. 1,010 33,891
Philips Electronics
(Electronics)................. 1,185 71,106
-----------
349,239
-----------
NORWAY -- 1.6%
Tomra Systems (Business
Goods and Services)........... 3,800 85,040
-----------
RUSSIA -- 0.5%
Tatneft (ADRs) (Resources)....... 200 28,422
-----------
SINGAPORE -- 0.9%
Advanced Systems Automation
(Manufacturing and Industrial
Equipment).................... 11,000 8,892
Datacraft Asia
(Telecommunications).......... 10,000 25,800
Electronic Resources
(Electronics)................. 13,000 13,212
-----------
47,904
-----------
SPAIN -- 4.0%
Actividades de Construccion y
Servicios (Construction and
Property)..................... 2,000 48,439
Aguas de Barcelona (Industrial
Goods and Services)........... 1,505 62,035
Tabacalera (Series A)
(Tobacco)..................... 1,300 105,379
-----------
215,853
-----------
SWEDEN -- 4.7%
Astra (Drugs and
Health Care).................. 3,935 68,195
Autoliv (ADRs) (Automotive and
Related)...................... 2,100 68,775
Kalmar Industries (Manufacturing
and Industrial Equipment)..... 2,300 37,106
L.M. Ericsson Telefon (Series B)
(Telecommunications).......... 2,200 82,769
-----------
256,845
-----------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-28
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
Shares Value
---------- -----------
SWITZERLAND -- 2.6%
Helvetia Patria (Financial
Services)..................... 55 $ 47,025
Sairgroup (Transportation)....... 70 95,759
-----------
142,784
-----------
TAIWAN -- 0.4%
Hotung Investment Holdings*
(Financial Services).......... 56,000 10,500
Synnex Technology International
(GDRs)* (Computer and
Technology Related)........... 700 13,216
-----------
23,716
-----------
UNITED KINGDOM -- 11.8%
Airtours (Entertainment and
Leisure)...................... 2,000 40,796
Ashtead Group (Construction
and Property)................. 14,000 43,935
Bodycote International
(Industrial Goods and
Services)..................... 4,000 59,692
Bodycote International (Rights)*
(Industrial Goods and
Services)..................... 1,000 6,665
British Biotech (Drugs and
Health Care).................. 14,000 24,049
CMG* (Computer and
Technology Related)........... 1,100 27,707
CRT Group (Support Services)..... 6,500 38,113
Dixons Group (Retailing)......... 2,800 27,818
Granada Group (Entertainment
and Leisure).................. 4,500 69,644
Halma (Electronics).............. 20,000 38,485
Ladbroke Group (Entertainment
and Leisure).................. 13,000 56,686
Parity (Computer and
Technology Related)........... 5,625 59,090
Pizza Express (Restaurants)...... 4,000 49,551
Rolls Royce (Aerospace).......... 14,200 53,945
WPP Group (Business Goods
and Services)................. 10,500 46,739
-----------
642,915
-----------
UNITED STATES -- 27.9%
American International Group
(Financial Services).......... 650 70,688
AT&T (Telecommunications)........ 800 49,000
Shares Value
---------- -----------
UNITED STATES (continued)
Bristol-Myers Squibb (Drugs
and Health Care).............. 900 $ 85,163
Cardinal Health (Drugs
and Health Care).............. 900 67,613
Coca-Cola Enterprises
(Consumer Goods and
Services)..................... 1,700 60,456
Compaq Computer (Computer
and Technology Related)....... 1,100 62,081
Dayton Hudson (Retailing)........ 1,100 74,250
Disney, Walt (Entertainment
and Leisure).................. 700 69,344
Donaldson, Lufkin & Jenrette
Securities (Financial
Services)..................... 300 23,850
General Electric (Diversified)... 1,100 80,712
Hewlett-Packard (Computer and
Technology Related)........... 1,000 62,500
Intel (Computer and
Technology Related)........... 800 56,175
Interpublic Group of Companies
(Business Goods and
Services)..................... 1,550 77,209
MBNA (Financial Services)........ 3,475 94,911
Merck (Drugs and Health Care).... 800 85,000
Microsoft* (Computer and
Technology Related)........... 500 64,609
PepsiCo (Consumer Goods and
Services)..................... 2,000 72,875
Pfizer (Drugs and
Health Care).................. 1,800 134,213
Procter & Gamble (Consumer
Goods and Services)........... 1,000 79,812
Travelers (Financial Services)... 1,650 88,894
Xerox (Business Goods and
Services)..................... 800 59,050
-----------
1,518,405
-----------
Total Common Stocks
(Cost $4,853,342)............. 5,108,035
-----------
PREFERRED STOCKS -- 1.9%
(Cost $74,609)
GERMANY
Porsche (Non-Voting)*
(Automotive and Related)...... 62 104,112
-----------
- ---------------
* Non-income producing security.
See Notes to Financial Statements.
P-29
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
Principal
Amount Value
---------- -----------
FIXED TIME DEPOSITS -- 5.5%
Canadian Imperial Bank of
Commerce, Grand Cayman
5.70%, dated 12/30/1997,
maturing 1/2/1998............. $150,000 $ 150,000
First National Bank of Chicago,
Grand Cayman 5-1/2%,
dated 12/30/1997,
maturing 1/2/1998............. 150,000 150,000
-----------
Value
-----------
Total Fixed Time Deposits
(Cost $300,000)............... $ 300,000
-----------
Total Investments -- 101.2%
(Cost $5,227,951)............. 5,512,147
Other Assets Less
Liabilities -- (1.2)%.......... (62,915)
-----------
Net Assets -- 100.0%.............. $ 5,449,232
-----------
-----------
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 94.3%
AUSTRALIA -- 0.8%
Australia National Industries
(Industrial Goods and
Services)..................... 23,000 $ 21,128
Bristile* (Construction and
Property)..................... 6,089 6,030
CSL (Medical Products and
Technology)................... 3,200 20,014
Futuris (Automotive Parts
Manufacturing)................ 20,273 22,189
HIH Winterthur International
Holdings (Financial
Services)..................... 12,000 25,721
Jupiters (Leisure and Hotels).... 11,900 21,708
Simsmetal (Metals)............... 4,000 23,196
Henry Walker Group
(Support Services)............ 14,000 16,874
-----------
156,860
-----------
AUSTRIA -- 1.1%
Bau Holdings (Construction and
Property)..................... 2,600 162,609
Bau Holdings (Voting Preference
Shares) (Construction and
Property)..................... 1,380 62,601
-----------
225,210
-----------
BELGIUM -- 0.7%
Telinfo (Telecommunications)..... 2,400 147,513
Telinfo (Rights)*
(Telecommunications).......... 400 11
-----------
147,524
-----------
Shares Value
---------- -----------
CHINA -- 0.1%
Qingling Motors (Automotive Parts
Manufacturing)................ 27,000 $ 13,243
-----------
DENMARK -- 2.4%
Danske Traelastkompagni
(Construction and
Property)..................... 2,043 181,934
Sydbank (Financial Services)..... 2,300 130,951
Thorkild Kristensen
(Construction and
Property)..................... 2,065 176,809
-----------
489,694
-----------
FINLAND -- 2.2%
Nokian Tyres* (Automotive Parts
Manufacturing)................ 1,365 43,347
Rauma (Capital Goods)............ 8,231 128,428
Tamro (Drugs and Health
Care)......................... 30,000 164,657
Valmet (Capital Goods)........... 8,915 123,062
-----------
459,494
-----------
FRANCE -- 4.1%
Assystem (Industrial Goods
and Services)................. 1,950 63,201
ECIA (Automotive Parts
Manufacturing)................ 910 183,014
L'Europeenne d'Extincteurs
(Manufacturing)............... 1,610 108,377
L'Europeenne d'Extincteurs
(Warrants)* (Manufacturing)... 247 1,355
IMS International Metal
Service (Metals).............. 8,280 104,592
- ---------------
* Non-income producing security.
See Notes to Financial Statements.
P-30
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
---------- -----------
FRANCE (continued)
Montupet (Automotive Parts
Manufacturing)................ 950 $ 106,582
Sylea (Automotive Parts
Manufacturing)................ 1,807 172,696
Virbac (Veterinary Products)..... 1,360 111,666
-----------
851,483
-----------
GERMANY -- 1.4%
Hornbach Baumarkt
(Retailing)................... 1,530 43,812
Moebel Walther (Retailing)....... 3,400 93,392
Tarkett (Consumer Goods and
Services)..................... 6,300 141,872
-----------
279,076
-----------
HONG KONG -- 0.5%
Beijing Datang Power
Generation* (Electric
Utilities).................... 27,000 12,372
Esprit Holdings (Retailing)...... 32,000 10,429
Jardine International Motor
Holdings (Retailing).......... 34,000 18,432
Johnson Electric Holdings
(Electronics)................. 8,000 23,028
Li & Fung (Consumer Goods
and Services)................. 31,000 43,415
-----------
107,676
-----------
INDIA -- 0.4%
Gujurat Ambuja Cement (GDRs)
(Building Materials).......... 10,839 77,228
-----------
ITALY -- 0.5%
La Doria (Consumer Goods and
Services).................... 41,700 114,324
-----------
JAPAN -- 5.6%
Aiya (Restaurants)............... 2,000 15,489
Asahi Diamond Industries
(Manufacturing)............... 3,300 14,398
Asatsu (Advertising)............. 1,900 27,389
Benesse (Business Goods and
Services)..................... 1,000 24,077
Enplas (Electronics)............. 2,000 26,991
Forval (Telecommunications)...... 2,000 18,710
Fujicco (Consumer Goods and
Services)..................... 2,000 16,869
Fujitsu Business Systems
(Business Goods and
Services)..................... 2,000 32,205
Shares Value
---------- -----------
JAPAN (continued)
Glory Kogyo (Manufacturing)...... 3,000 $ 37,956
Higashi Nihon House
(Construction and
Property)..................... 4,000 18,249
HIS (Leisure and Hotels)......... 1,100 19,147
Hitachi Information Systems
(Computer Software)........... 2,000 19,936
Hitachi Medical (Medical
Products and Technology)...... 3,000 29,444
Hokkai Can (Manufacturing)....... 7,000 13,419
Hokushin (Manufacturing)......... 2,300 4,056
Horiba Instruments
(Electronics)................. 4,000 41,100
Iino Kaiun* (Transportation)..... 23,000 34,038
Japan Information Processing
Service (Computer
Software)..................... 3,200 22,329
Kentucky Fried Chicken
(Restaurants)................. 3,000 22,773
Kissei Pharmaceutical (Drugs and
Health Care).................. 2,000 28,831
Komatsu Seiren
(Manufacturing)............... 3,000 17,943
Maspro Denkoh
(Telecommunications).......... 3,000 19,438
Mitsubishi Cable Industries
(Manufacturing)............... 9,000 15,872
Mitsui Home (Construction and
Property)..................... 8,000 43,553
Nakayama Steel Works
(Metals)...................... 18,000 24,844
Namura Shipbuilding (Capital
Goods)........................ 8,000 18,096
Nichicon (Manufacturing)......... 3,000 27,834
Nippon Seiki (Automotive Parts
Manufacturing)............... 2,300 15,872
Nishio Rent All (Construction
and Property)................. 3,000 25,994
Nissha Printing (Paper and
Printing)..................... 3,000 18,081
Nisshin Fire & Marine Insurance
(Financial Services).......... 11,000 25,304
Nittetsu Mining (Energy)......... 4,000 16,256
Nova (Consumer Goods and
Services)..................... 3,000 9,201
Okinawa Electric Power
(Electric Utilities).......... 1,200 18,403
Rengo (Paper and Printing)....... 5,000 10,927
Ryoyo Electro (Electronics)...... 4,000 42,020
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-31
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
---------- -----------
JAPAN (continued)
Sagami Chain (Restaurants)....... 2,000 $ 14,185
Sanyo Special Steel (Metals)..... 25,000 28,754
Shohkoh Fund (Financial
Services)..................... 100 30,518
Sodick (Manufacturing)........... 5,000 14,339
Sundrug (Retailing).............. 1,400 15,029
Takasago (Chemicals)............. 7,000 28,501
TOEI (Media)..................... 5,000 18,211
Tokyo Style (Manufacturing)...... 2,000 18,096
Towa Pharmaceutical (Drugs
and Health Care).............. 2,000 13,112
Toyo Ink Manufacturing
(Chemicals)................... 7,000 12,345
Tsubaki Nakashima
(Manufacturing)............... 6,000 31,975
Tsudakoma (Manufacturing)........ 13,000 28,509
Tsutsumi Jewelry (Retailing)..... 3,000 36,806
Xebio (Retailing)................ 2,600 20,734
Yokohama Reito (Distributors).... 3,000 23,003
-----------
1,151,161
-----------
MALAYSIA -- 0.0%
Chemical Company of Malaysia
(Warrants)* (Chemicals)....... 1,250 217
-----------
NETHERLANDS -- 1.9%
Benckiser* (Consumer Goods
and Services)................. 2,700 111,784
Otra (Electronics)............... 9,140 130,797
Samas Groep (Manufacturing)...... 3,036 141,425
-----------
384,006
-----------
NEW ZEALAND -- 0.1%
Sky Network Television*
(Media)....................... 8,000 12,028
-----------
NORWAY -- 0.5%
Ekornes (Manufacturing).......... 13,800 113,237
-----------
SINGAPORE -- 0.4%
Bukit Sembawang Estates
(Construction and
Property)..................... 900 5,938
Dairy Farm International Holdings
(Retailing).................. 18,000 19,440
Excel Machine Tools*
(Manufacturing)............... 40,000 8,678
Shares Value
---------- -----------
SINGAPORE (continued)
Informatics Holdings (Business
Goods and Services)........... 41,000 $ 18,276
Venture Manufacturing
(Electronics)................. 3,500 9,777
Want Want Holdings (Class A)*
(Consumer Goods and
Services)..................... 8,200 11,316
Want Want Holdings* (Consumer
Goods and Services)........... 3,400 4,488
-----------
77,913
-----------
SWEDEN -- 3.0%
Angpanneforeningen (Class B)
(Business Goods and
Services)..................... 4,375 63,137
BT Industries (Capital Goods).... 4,740 94,990
Bure Investment Aktiebolaget
(Financial Services).......... 4,700 61,904
Finnveden (Series B)
(Manufacturing)............... 5,400 100,390
Kalmar Industries (Capital
Goods)........................ 4,563 73,614
Munksjo (Paper and Printing)..... 8,400 79,934
PLM (Manufacturing).............. 9,500 132,907
-----------
606,876
-----------
SWITZERLAND -- 3.2%
Fotolabo Club (Retailing)........ 185 41,125
Hero (Consumer Goods and
Services)..................... 150 84,644
Kardex (Industrial Goods and
Services)..................... 484 128,449
Prodega (Retailing).............. 229 101,030
Selecta Group* (Consumer
Goods and Services).......... 850 113,953
SIG Schweizerische Industrie-
Gesellschaft* (Manufacturing). 90 122,811
Tag Heuer (ADRs)* (Retailing).... 730 63,413
-----------
655,425
-----------
TAIWAN -- 0.2%
Taiwan American Fund*
(Miscellaneous)............... 2,000 31,420
-----------
THAILAND -- 0.1%
Hana Microelectronics
(Electronics)................. 12,000 28,479
-----------
- ---------------
* Non-income producing security.
See Notes to Financial Statements.
P-32
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
---------- -----------
UNITED KINGDOM -- 19.1%
Abacus Polar (Electrical
Distribution)................. 22,500 $ 54,816
AEA Technology (Industrial
Goods and Services)........... 6,500 57,760
Allied Leisure (Leisure and
Hotels)....................... 97,500 45,091
Ashtead Group (Construction
and Property)................. 101,600 318,844
British Polythene Industries
(Manufacturing)............... 5,500 39,517
BTG (Technology)................. 5,000 56,158
Capital Radio (Media)............ 20,500 168,283
Chiroscience Group (Drugs and
Health Care).................. 4,250 15,514
CMG* (Computer Software)......... 9,000 226,696
Cobham (Manufacturing)........... 8,950 123,657
CRT Group (Support Services)..... 30,000 175,906
David Brown Group
(Manufacturing)............... 35,657 128,096
Dawson Group
(Transportation).............. 26,600 92,264
Domnick Hunter Group
(Manufacturing)............... 20,000 108,847
Druck Holdings (Industrial Goods
and Services)................. 11,500 45,587
Electronics Boutique*
(Retailing)................... 129,800 101,836
F.I. Group (Computer
Software)..................... 11,720 180,513
F.I. Group (Rights)* (Computer
Software)..................... 976 15,032
Fairey Group (Electronics)....... 15,200 129,546
Games Workshop Group
(Retailing)................... 9,400 90,438
GWR Group (Media)................ 24,000 66,795
IBC Group (Business Goods
and Services)................. 27,800 181,144
ISA International (Business
Goods and Services)........... 33,400 46,064
National Express Group
(Transportation).............. 14,000 158,514
Parity (Computer Software)....... 25,312 265,898
Peptide Therapeutics (Drugs
and Health Care).............. 2,750 12,105
Pizza Express (Restaurants)...... 19,500 241,561
Polypipe (Building Materials).... 70,500 204,361
Shares Value
---------- -----------
UNITED KINGDOM (continued)
Save Group (Retailing)........... 8,600 $ 12,855
Shire Pharmaceuticals* (Drugs
and Health Care).............. 5,500 26,027
Stoves (Manufacturing)........... 10,000 41,458
Tilbury Douglas (Construction
and Property)................. 50,500 162,651
Trifast (Electrical Distribution) 8,000 72,146
Trinity International Holdings
(Media)....................... 26,100 208,649
Vanguard Medica Group (Drugs
and Health Care).............. 3,500 24,482
Vanguard Medica Group
(Warrants)* (Drugs and
Health Care).................. 500 376
Wellington Holdings
(Manufacturing)............... 9,500 24,714
-----------
3,924,201
-----------
UNITED STATES -- 46.0%
AccuStaff* (Business Goods
and Services)................. 8,600 197,800
Acuson* (Medical Products and
Technology)................... 3,000 49,687
Acxiom* (Computer Software)...... 2,200 42,075
ADVO* (Business Goods
and Services)................. 3,200 62,400
Affiliated Computer Services
(Class A)* (Business Goods
and Services)................. 2,200 57,888
Allied Waste Industries (Industrial
Goods and Services)........... 6,800 158,737
American Capital Strategies*
(Financial Services).......... 2,200 39,463
American HomePatient* (Drugs
and Health Care)............. 2,800 65,100
American Homestar*
(Manufacturing)............... 9,000 148,500
American Management
Systems* (Business Goods
and Services)................. 1,000 19,437
AmeriSource Health (Class A)*
(Drugs and Health Care)....... 2,200 128,150
Analysts International (Business
Goods and Services)........... 1,500 52,125
Anchor Gaming* (Leisure and
Hotels)....................... 1,600 89,200
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-33
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
---------- -----------
UNITED STATES (continued)
ANTEC*
(Telecommunications).......... 3,900 $ 61,425
Applied Micro Circuits*
(Electronics)................. 1,700 21,144
Arch Communications Group*
(Telecommunications).......... 6,000 31,125
Asyst Technologies*
(Technology).................. 5,800 127,600
Avant!* (Computer Software)...... 3,800 63,887
BA Merchant Services (Class A)*
(Business Goods and
Services)..................... 5,100 90,525
Bacou USA* (Industrial Goods
and Services)................. 3,100 53,669
Berg Electronics* (Electronics).. 11,000 250,250
BISYS Group* (Business Goods
and Services)................. 2,900 96,787
Black Box* (Electronics)......... 3,000 106,500
Budget Group* (Consumer Goods
and Services)................. 4,100 141,706
Burr-Brown* (Technology)......... 3,700 119,094
Cabot Oil & Gas (Energy)......... 700 13,606
CalEnergy* (Independent
Power Producers).............. 3,900 112,125
Calpine* (Independent
Power Producers).............. 9,600 142,800
Canandaigua Brands (Class A)*
(Consumer Goods and
Services)..................... 2,915 161,782
Carriage Services* (Consumer
Goods and Services)........... 2,700 50,794
Castle Dental Centers* (Drugs
and Health Care).............. 6,000 45,750
CCA Prison Realty Trust
(Construction and Property)... 2,800 124,950
Celadon Group*
(Transportation).............. 6,000 79,500
Ceridian* (Business Goods
and Services)................. 5,500 251,969
Chart Industries (Industrial
Goods and Services)........... 1,000 22,812
CMP Media (Class A)*
(Media)....................... 900 15,525
Cognex* (Electronics)............ 5,400 147,488
Coinmach Laundry* (Consumer
Goods and Services)........... 4,600 113,275
Collaborative Clinical Research*
(Drugs and Health Care)....... 2,900 14,953
Shares Value
---------- -----------
UNITED STATES (continued)
Compdent* (Drugs and
Health Care).................. 6,000 $ 122,625
Corporate Express* (Business
Goods and Services)........... 10,500 135,516
Cox Radio (Class A)* (Media)..... 6,500 261,625
Credence Systems*
(Technology).................. 5,425 160,377
Dominick's Supermarkets*
(Retailing)................... 2,300 83,950
Eagle Geophysical* (Energy)...... 1,800 23,625
Edutrek International (Class A)*
(Miscellaneous)............... 100 2,613
Equity International* (Consumer
Goods and Services)........... 3,000 69,375
FactSet Research Systems*
(Business Goods
and Services)................. 5,900 181,425
FirstService* (Business Goods
and Services)................. 1,600 12,000
Flanders* (Industrial Goods
and Services)................. 4,200 39,244
Fusion Systems (Rights)* (Capital
Goods)........................ 800 600
General Cable* (Industrial Goods
and Services)................ 1,000 36,188
General Semiconductor*
(Technology).................. 6,200 71,688
Glenayre Technologies*
(Telecommunications).......... 4,000 39,750
GTECH Holdings* (Leisure and
Hotels)....................... 3,700 118,169
Gulf South Medical Supply*
(Medical Products and
Technology)................... 2,600 97,338
HA-LO Industries*
(Advertising)................. 2,300 59,800
HCC Insurance Holdings
(Financial Services).......... 1,500 31,875
Hearst-Argyle Television
(Class A)* (Media)............ 900 26,606
Imnet Systems* (Computer
Software)..................... 2,200 35,475
Imperial Credit* (Financial
Services)..................... 3,000 62,063
Imperial Credit Commercial
Mortgage (Financial
Services)..................... 1,600 23,400
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-34
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
---------- -----------
UNITED STATES (continued)
Insignia Financial* (Financial
Services)..................... 4,400 $ 101,200
Inso* (Computer Software)........ 1,600 18,350
Integrated Device Technology*
(Technology).................. 2,300 21,706
International Home Foods*
(Consumer Goods and
Services)..................... 600 16,800
Jacor Communications*
(Media)....................... 2,900 154,244
Journal Register* (Media)........ 4,500 94,500
JP Foodservice* (Business
Goods and Services)........... 4,000 147,750
KEMET* (Electronics)............. 7,000 135,188
Kendle International* (Drugs and
Health Care).................. 5,000 82,500
Lattice Semiconductor*
(Technology).................. 1,200 57,000
MAPICS (Computer Software)....... 5,000 54,375
Marcam Solutions* (Computer
Software)..................... 2,500 17,969
McDermott International
(Energy)...................... 1,200 43,950
Medallion Financial
(Financial Services).......... 6,000 130,500
MMI (Financial Services)......... 2,926 73,516
Mutual Risk Management
(Financial Services).......... 3,332 99,752
NCS HealthCare (Class A)*
(Drugs and Health Care)....... 6,100 160,887
Oak Industries*
(Capital Goods)............... 900 26,719
Ocwen Financial* (Financial
Services)..................... 2,200 55,962
OM Group (Chemicals)............. 3,000 109,875
Omnicare (Drugs and Health
Care)......................... 1,800 55,800
Personnel Group of America*
(Business Goods
and Services)................. 2,200 72,600
Petersen Companies
(Class A)* (Media)............ 2,700 62,100
Physician Sales & Services*
(Medical Products
and Technology)............... 3,200 69,600
Pierce Leahy* (Business Goods
and Services)................. 1,800 36,900
PMC-Sierra* (Technology)......... 4,800 149,700
Shares Value
---------- -----------
UNITED STATES (continued)
PMT Services* (Business Goods
and Services)................. 6,200 $ 86,606
Polymer Group*
(Chemicals)................... 2,000 19,000
Pride International* (Energy).... 1,400 35,350
PSW Technologies* (Business
Goods and Services)........... 2,900 41,506
Quorum Health Group* (Drugs
and Health Care).............. 1,900 49,875
RDO Equipment (Class A)*
(Retailing)................... 4,800 87,900
Regal Cinemas* (Leisure and
Hotels)....................... 700 19,600
Renex* (Drugs and
Health Care).................. 5,000 26,875
Roslyn Bancorp (Financial
Services)..................... 2,000 46,563
Santa Fe Energy Resources*
(Energy)...................... 4,900 55,125
Scherer (R.P.)* (Drugs and
Health Care).................. 600 36,600
Simon Transportation Services*
(Transportation).............. 4,600 109,250
SITEL* (Business Goods
and Services)................. 4,000 36,500
Somnus Medical Technologies*
(Medical Products and
Technology)................... 5,000 63,281
Source Services* (Business
Goods and Services)........... 5,700 122,194
Staff Leasing* (Business Goods
and Services)................. 1,100 20,762
Steinway Musical Instruments*
(Consumer Goods and
Services)..................... 2,900 67,062
Synopsys* (Computer
Software)..................... 2,400 85,650
Total Renal Care Holdings*
(Drugs and Health Care)....... 6,833 187,907
Universal Outdoor Holdings*
(Advertising)................. 6,000 312,750
Valley National Gases*
(Chemicals)................... 6,100 66,528
Vishay Intertechnology*
(Electronics)................. 3,400 80,325
Waters* (Medical Products and
Technology)................... 1,600 60,200
Watson Pharmaceuticals* (Drugs
and Health Care).............. 2,400 77,850
- ---------------
* Non-income producing security.
See Notes to Financial Statements.
P-35
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
Shares Value
---------- -----------
UNITED STATES (continued)
Wisconsin Central Transportation*
(Transportation).............. 2,600 $ 60,937
Youth Services* (Support
Services)..................... 8,900 136,559
Zag Industries* (Consumer
Goods and Services)........... 14,200 124,250
-----------
9,433,378
-----------
Total Common Stocks
(Cost $18,902,276)............ 19,340,153
-----------
PREFERRED STOCKS -- 0.6%
(Cost $148,363)
GERMANY
Gerry Weber International*
(Manufacturing)............... 4,993 116,604
-----------
Principal
Amount Value
---------- -----------
SUBORDINATED
CONVERTIBLE BONDS -- 0.1%
(Cost $19,151)
FRANCE
L'Europeenne d'Extincteurs 4-1/4%,
1/1/2005 (Manufacturing)...... $24,700 $ 19,275
-----------
SHORT-TERM HOLDINGS -- 4.4%
(Cost $900,000).............. 900,000
-----------
Total Investments -- 99.4%
(Cost $19,969,790)............ 20,376,032
Other Assets Less
Liabilities -- 0.6%............ 128,558
-----------
Net Assets -- 100.0%.............. $20,504,590
-----------
-----------
- ------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 86.4%
FINLAND -- 0.3%
Nokia (Telecommunications)....... 175 $ 12,432
-----------
FRANCE -- 3.3%
Alcatel Alsthom
(Telecommunications).......... 300 38,145
Cap Gemini* (Computer
Software)..................... 340 27,888
Rhone-Poulenc
(Medical Products and
Technology)................... 1,200 53,772
-----------
119,805
-----------
GERMANY -- 1.6%
LHS Group* (Computer
Software)..................... 1,000 59,495
-----------
HONG KONG -- 1.0%
Elec & Eltek International
Holdings (Electronics)........ 150,000 37,174
-----------
HUNGARY -- 1.1%
Richter Gedeon (GDRs)
(Medical Products and
Technology)................... 350 40,688
-----------
Shares Value
---------- -----------
INDIA -- 0.4%
Videsh Sanchar Nigam
(GDRs)+
(Telecommunications).......... 1,000 $ 13,875
-----------
ISRAEL -- 1.2%
ECI Telecommunications
(Networking/Communications
Infrastructure)............... 1,700 43,456
-----------
ITALY -- 1.1%
Telecom Italia
(Telecommunications).......... 6,500 41,520
-----------
JAPAN -- 3.6%
Canon (Computer Hardware/
Peripherals).................. 1,000 23,310
CSK (Computer and Business
Services)..................... 1,000 25,611
Hirose Electronics (Electronics). 400 20,457
Secom (Computer and Business
Services)..................... 1,000 63,950
-----------
133,328
-----------
LUXEMBOURG -- 0.5%
Millicom International Cellular*
(Telecommunications).......... 500 18,688
-----------
- ---------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-36
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
Shares Value
---------- -----------
NETHERLANDS -- 3.3%
ASM Lithography Holding*
(Electronics Capital
Equipment).................... 800 $ 54,050
Philips Electronics
(Electronics)................. 1,150 69,006
-----------
123,056
-----------
SINGAPORE -- 1.8%
Amtek Engineering (Electronics
Capital Equipment)............ 11,000 6,668
Informatics Holdings
(Computer Software)........... 70,000 31,204
Venture Manufacturing
(Electronics)................. 10,000 27,935
-----------
65,807
-----------
SOUTH KOREA -- 0.1%
SK Telecommunications (ADRs)
(Telecommunications).......... 438 2,847
-----------
SWEDEN -- 2.5%
L.M. Ericsson Telefon (Series B)
(Networking/Communications
Infrastructure)............... 500 18,811
Information Highway* (Computer
and Business Services)........ 2,000 40,963
Pharmacia & Upjohn (Medical
Products and Technology)...... 920 33,859
-----------
93,633
-----------
TAIWAN -- 1.5%
Siliconware Precision Industries
(GDRs)* (Electronics Capital
Equipment).................... 2,150 27,520
Taiwan Semiconductor
Manufacturing (ADRs)*
(Semiconductors).............. 1,500 27,281
-----------
54,801
-----------
UNITED KINGDOM -- 16.4%
Abacus Polar (Distributors)...... 8,500 20,708
Admiral (Computer and Business
Services)..................... 7,000 83,072
Astec (Computer Hardware/
Peripherals).................. 12,600 22,164
BTG (Computer and Business
Services)..................... 3,600 40,434
Shares Value
---------- -----------
UNITED KINGDOM (continued)
Celltech* (Medical Products and
Technology)................... 5,000 $ 24,569
CMG* (Computer Software)......... 3,000 75,565
CRT Group (Computer and
Business Services)............ 8,700 51,013
Logica (Computer and
Business Services)........... 2,988 57,126
Misys (Computer Software)........ 1,600 48,362
M.M.T. Computing (Computer
and Business Services)........ 6,000 83,196
Premier Farnell (Distributors)... 3,500 25,465
Dr. Solomon's Group (ADRs)*
(Computer Software)........... 1,650 52,800
VERO Group (Electronics)......... 12,500 18,582
-----------
603,056
-----------
UNITED STATES -- 46.7%
3DO* (Computer Software)......... 2,400 5,212
Activision*
(Computer Software)........... 800 14,350
Adaptec* (Electronics)........... 700 26,031
ADFlex Solutions*
(Electronics)................. 600 9,788
American Power Conversion*
(Computer Hardware/
Peripherals).................. 1,300 30,794
AMF Bowling*
(Miscellaneous)............... 9,000 225,000
Applied Materials* (Electronics
Capital Equipment)............ 800 24,075
Aspect Telecommunications*
(Networking/Communications
Infrastructure)............... 600 12,600
Cadence Design System*
(Computer Software)........... 1,200 29,400
CIDCO* (Networking/
Communications
Infrastructure)............... 400 7,625
Cisco Systems* (Networking/
Communications
Infrastructure)............... 750 41,859
CMP Media (Class A)* (Media)..... 3,400 58,650
Cognex* (Electronics)............ 1,100 30,044
Creative Technology* (Computer
Hardware/Peripherals)......... 2,500 54,844
Credence Systems* (Electronics
Capital Equipment)............ 1,100 32,519
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-37
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
Shares Value
---------- -----------
UNITED STATES (continued)
Electro Scientific Industries*
(Electronics Capital
Equipment).................... 600 $ 22,988
Electronics for Imaging*
(Electronics)................. 1,300 21,572
EMC* (Computer Hardware/
Peripherals).................. 2,400 65,850
Etec Systems* (Electronics
Capital Equipment)............ 650 30,184
Flextronics International*
(Electronics)................. 600 20,550
Gartner Group (Class A)*
(Computer and Business
Services)..................... 1,000 37,313
GaSonics International*
(Electronics)................. 700 6,934
Gemstar International*
(Telecommunications).......... 500 12,031
GenRad* (Electronics)............ 300 9,056
Hadco* (Electronics)............. 300 13,584
In Focus Systems* (Computer
Hardware/Peripherals)......... 950 29,153
International Rectifier*
(Semiconductors).............. 1,000 11,813
KLA-Tencor* (Electronics Capital
Equipment).................... 900 34,734
Kulicke & Soffa Industries*
(Electronics)................. 2,200 41,113
Lattice Semiconductor*
(Semiconductors).............. 700 33,250
Lexmark International Group
(Class A)* (Computer
Hardware/Peripherals)......... 1,500 57,000
Maxim Integrated Products*
(Semiconductors).............. 1,600 55,300
Microchip Technology*
(Semiconductors).............. 1,200 36,075
MMC Networks* (Networking/
Communications
Infrastructure)............... 6,000 100,313
Network Appliances*
(Networking/Communications
Infrastructure)............... 600 21,075
Networks Associates* (Computer
Software)..................... 666 35,152
Novellus Systems* (Electronics
Capital Equipment)............ 1,300 42,047
Shares or
Principal
Amount Value
---------- ----------
UNITED STATES (continued)
Parametric Technology*
(Computer Software)........... 1,300 shs. $ 61,506
PMC-Sierra*
(Semiconductors).............. 1,000 31,188
Read-Rite* (Computer Hardware/
Peripherals).................. 1,900 30,162
Storage Technology* (Computer
Hardware/Peripherals)......... 1,100 68,131
Structural Dynamics Research*
(Computer Software)........... 2,100 47,513
Synopsys* (Computer
Software)..................... 1,847 65,941
Teradyne* (Electronics Capital
Equipment).................... 1,300 41,600
Veeco Instruments (Electronics
Capital Equipment)............ 600 13,237
Vestcom International (Computer
and Business Services)........ 1,000 22,000
-----------
1,721,156
-----------
Total Common Stocks
(Cost $3,241,519)............ 3,184,817
-----------
FIXED TIME DEPOSITS -- 10.8%
Canadian Imperial Bank of
Commerce, Grand Cayman
5.70%, dated 12/30/1997,
maturing 1/2/1998............. $140,000 140,000
First National Bank of Chicago,
Grand Cayman 5-1/2%,
dated 12/30/1997, maturing
1/2/1998...................... 140,000 140,000
National Westminster, Nassau
5-1/4%, dated 12/30/1997,
maturing 1/2/1998............. 120,000 120,000
-----------
Total Fixed Time Deposits
(Cost $400,000)............... 400,000
-----------
Total Investments -- 97.2%
(Cost $3,641,519)............. 3,584,817
Other Assets Less
Liabilities -- 2.8%............ 101,411
-----------
Net Assets -- 100.0%.............. $ 3,686,228
-----------
-----------
- -----------------
* Non-income producing security.
See Notes to Financial Statements.
P-38
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO
Shares Value
---------- -----------
COMMON STOCKS -- 94.3%
AUSTRALIA -- 0.9%
Australia and New Zealand
Banking Group (Banking)....... 750 $ 4,954
Australian Gas Light
(Resources)................... 1,800 12,548
Brambles Industries (Industrial
Goods and Services)........... 370 7,340
ICI Australia (Manufacturing).... 1,000 7,004
Lend Lease (Construction and
Property)..................... 510 9,968
Santos (Resources)............... 1,050 4,323
Telstra* (Telecommunications).... 2,400 5,067
Westpac Banking (Banking)........ 2,000 12,790
Woodside Petroleum
(Resources)................... 1,300 9,164
Woolworth (Retailing)............ 2,000 6,684
-----------
79,842
-----------
BELGIUM -- 1.4%
Credit Communal Holding/Dexia*
(Financial Services).......... 990 132,774
-----------
BRAZIL -- 3.5%
Companhia Energetica de Minas
Gerais "CEMIG" (ADRs)
(Utilities)................... 2,000 90,000
Petroleo Brasileiro "Petrobras"
(Resources)................... 4,625 108,163
Telecomunicacoes Brasileiras
"Telebras" (ADRs)
(Telecommunications).......... 1,050 122,259
-----------
320,422
-----------
CROATIA -- 0.3%
Pliva (GDRs) (Health and
Household).................... 1,850 30,664
-----------
CZECH REPUBLIC -- 0.2%
SPT Telecom*
(Telecommunications).......... 200 21,400
-----------
DENMARK -- 0.9%
Novo Nordisk (Class B) (Health
and Household)................ 546 78,115
-----------
Shares Value
---------- -----------
FRANCE -- 10.5%
Accor (Leisure and Hotels)....... 690 $ 128,332
AXA-UAP (Insurance).............. 1,739 134,605
Banque Nationale de Paris
(Banking)..................... 2,209 117,453
Carrefour Supermarche
(Retailing)................... 166 86,635
Cie Generale des Eaux
(Industrial Goods and
Services)..................... 929 129,703
ELF Aquitaine (Resources)........ 1,145 133,217
France Telecom*
(Telecommunications).......... 1,544 56,022
Lafarge (Construction and
Property)..................... 1,435 94,188
Usinor Sacilor (Metals).......... 5,884 84,986
-----------
965,141
-----------
GERMANY -- 8.2%
Adidas (Retailing)............... 667 88,268
Bayer (Chemicals)................ 2,765 102,624
Bayerische Vereinsbank*
(Banking)..................... 1,842 118,809
Lufthansa (Transportation)....... 5,665 106,468
Mannesmann (Industrial Goods
and Services)................. 288 144,605
SKW Trostberg
(Chemicals)................... 2,556 81,152
Thyssen (Metals)................. 525 112,096
-----------
754,022
-----------
HONG KONG -- 0.6%
Cheung Kong (Construction and
Property)..................... 1,000 6,551
CITIC Pacific (Miscellaneous).... 1,000 3,976
Hutchison Whampoa (Industrial
Goods and Services)........... 1,000 6,273
New World Development
(Construction and
Property)..................... 1,000 3,459
New World Infrastructure
(Construction and
Property)..................... 3,000 6,757
Sun Hung Kai Properties
(Construction and
Property)..................... 200 1,394
- -------------
* Non-income producing security.
See Notes to Financial Statements.
P-39
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
Shares Value
---------- -----------
HONG KONG (continued)
Swire Pacific (Construction and
Property)..................... 1,500 $ 8,229
Television Broadcasts (Media).... 3,000 8,558
Wharf Holdings (Construction
and Property)................. 3,000 6,583
-----------
51,780
-----------
HUNGARY -- 4.3%
Magyar Tavkozlesi Rt. "Matav"
(ADRs)*
(Telecommunications).......... 6,840 177,840
MOL Magyar Olaj-es Gazipari
(GDRs)* (Resources)........... 6,400 156,160
MOL Magyar Olaj-es Gazipari
(GDRs)*+ (Resources).......... 2,600 63,440
-----------
397,440
-----------
INDIA -- 1.2%
Gujurat Ambuja Cement (GDRs)
(Manufacturing)............... 7,060 50,303
Videsh Sanchar Nigam (GDRs)+
(Telecommunications).......... 4,450 61,744
-----------
112,047
-----------
ITALY -- 3.7%
ENI (Resources).................. 18,834 106,783
Istituto Nazionale delle
Assicurazioni (Insurance)..... 3,693 90,705
Telecom Italia
(Telecommunications).......... 32,408 142,892
-----------
340,380
-----------
JAPAN -- 9.6%
Aoyama Trading (Retailing)....... 700 12,506
Autobacs Seven (Retailing)....... 700 20,128
Bank of Tokyo Mitsubishi
(Financial Services).......... 3,000 41,406
Banyu Pharmaceutical (Health
and Household)................ 1,000 11,042
Benesse (Business Services)...... 500 12,038
CSK (Business Services).......... 1,700 43,538
Dai Nippon Printing (Industrial
Goods and Services)........... 2,000 37,572
Denny's (Restaurants)............ 1,000 22,083
East Japan Railway
(Transportation).............. 7 31,614
Fujitsu Business Systems
(Business Services)........... 600 9,661
Shares Value
---------- -----------
JAPAN (continued)
Hokkai Can (Manufacturing)....... 4,000 $ 7,668
Ishikawajima-Harima (Industrial
Goods and Services)........... 18,000 26,914
Japan Airport Terminal
(Transportation).............. 2,000 12,575
Japan Tobacco (Tobacco).......... 4 28,402
KAO (Consumer Products).......... 2,000 28,831
Kirin Brewery (Consumer
Products)..................... 4,000 29,138
Mitsubishi Materials (Metals).... 10,000 16,102
Mitsui Chemicals (Chemicals)..... 13,000 23,924
Mitsui Marine & Fire
(Insurance)................... 6,000 30,641
Mitsui O.S.K. Lines
(Transportation).............. 19,000 26,370
Nippon Telegraph & Telephone
(Telecommunications).......... 4 34,352
Nitto Denko (Industrial Goods
and Services)................. 2,000 34,505
Nomura Securities (Financial
Services)..................... 4,000 53,368
Pioneer Electronic+
(Electronics)................. 3,000 46,237
Sumitomo Bank (Banking).......... 4,000 45,700
Sumitomo Realty & Development
(Construction and
Property)..................... 7,000 40,256
Sumitomo Trust and Banking
(Banking)..................... 5,000 25,994
Toho (Media)..................... 200 21,317
Toshiba (Electronics)............ 11,000 45,800
Tsubaki Nakashima
(Manufacturing)............... 2,500 13,323
Yamaha (Manufacturing)........... 3,000 34,045
York-Benimaru (Retailing)........ 1,000 12,038
-----------
879,088
-----------
MEXICO -- 2.9%
Desc (ADRs) (Manufacturing)...... 5,423 203,363
Grupo Iusacell (ADRs)*
(Telecommunications).......... 2,700 58,556
-----------
261,919
-----------
NETHERLANDS -- 6.2%
Akzo Nobel (Chemicals)........... 792 136,631
Benckiser (Series B) (Health and
Household).................... 3,195 132,278
Elsevier (Media)................. 4,662 75,457
- ---------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-40
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
Shares Value
---------- -----------
NETHERLANDS (continued)
ING Groep (Insurance)............ 2,972 $ 125,245
Philips Electronics
(Electronics)................. 1,667 100,028
-----------
569,639
-----------
PORTUGAL -- 1.9%
Electricidade de Portugal
(Utilities)................... 2,966 56,192
Portugal Telecom (ADRs)
(Telecommunications).......... 1,200 56,400
Telecel-Comunicacoes Pessoais*
(Telecommunications).......... 590 62,897
-----------
175,489
-----------
RUSSIA -- 1.7%
Tatneft (ADRs) (Resources)....... 220 31,264
Tatneft (ADRs)+ (Resources)...... 860 122,550
-----------
153,814
-----------
SINGAPORE -- 0.1%
Singapore Press Holdings
(Media)....................... 300 3,762
-----------
SPAIN -- 4.9%
Actividades de Construccion y
Servicios (Construction and
Property)..................... 2,920 70,722
Banco Bilbao Vizcaya
(Banking)..................... 4,233 136,974
Endesa (Utilities)............... 7,030 124,815
Telefonica de Espana
(Telecommunications).......... 4,138 118,147
-----------
450,658
-----------
SWEDEN -- 3.4%
Astra (Health and Household)..... 5,233 90,689
Electrolux (Series B) (Consumer
Products)..................... 249 17,292
L.M. Ericsson Telefon (Series B)
(Telecommunications).......... 3,230 121,520
Nordbanken Holding (Banking)..... 14,899 84,315
-----------
313,816
-----------
SWITZERLAND -- 6.3%
CS Holdings (Banking)............ 779 120,420
Novartis (Health and
Household).................... 81 131,306
Roche Holdings (Health and
Household).................... 13 128,977
Shares Value
---------- -----------
SWITZERLAND (continued)
Schweizerischer Bankerein
(Banking)..................... 211 $ 65,523
Zurich Versicherungs
(Insurance)................... 277 131,869
-----------
578,095
-----------
TAIWAN -- 0.2%
The ROC Taiwan Fund
(Miscellaneous)............... 1,200 9,750
Taiwan Opportunities Fund*
(Miscellaneous)............... 1,000 12,880
-----------
22,630
-----------
UNITED KINGDOM -- 21.4%
B.A.T. Industries (Tobacco)...... 17,000 155,698
British Biotech (Health and
Household).................... 26,500 45,521
British Petroleum (Resources).... 9,500 125,608
Bunzl (Manufacturing)............ 28,000 109,607
Caradon (Building Materials)..... 16,200 48,030
Dixons Group (Retailing)......... 7,000 69,545
FKI Babcock (Industrial Goods
and Services)................. 31,000 98,309
Granada Group (Leisure and
Hotels)....................... 10,500 162,502
Laporte (Chemicals).............. 7,000 77,291
National Power (Utilities)....... 13,500 134,345
Railtrack Group
(Transportation).............. 9,699 155,553
Reuters Holdings (Media)......... 8,500 93,854
Rolls Royce (Industrial Goods
and Services)................. 23,500 89,274
Royal Bank of Scotland
(Banking)..................... 11,500 147,778
Tesco (Retailing)................ 22,000 178,053
United Utilities (Utilities)..... 9,000 116,693
WPP Group (Media)................ 36,000 160,248
-----------
1,967,909
-----------
Total Common Stocks
(Cost $7,836,740)............. 8,660,846
Other Assets Less
Liabilities -- 5.7%............ 521,619
-----------
Net Assets -- 100.0%.............. $ 9,182,465
-----------
-----------
- ---------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-41
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
Principal
Amount Value
---------- -----------
CORPORATE BONDS -- 90.0%
ADVERTISING -- 0.6%
Adams Outdoor Advertising
10-3/4%, 3/15/2006............. $ 125,000 $ 137,500
-----------
BROADCASTING -- 2.7%
Capstar Broadcasting Partners 0%
(12-3/4%**), 2/1/2009.......... 250,000 182,500
Paxson Communications
11-5/8%, 10/1/2002............. 200,000 215,000
SFX Broadcasting 10-3/4%,
5/15/2006.. ................... 200,000 220,000
-----------
617,500
-----------
CABLE SYSTEMS -- 12.9%
Cablevision Systems 10-1/2%,
5/15/2016...................... 250,000 291,875
Charter Communications
Southeast Holdings
11-1/4%, 3/15/2006............. 250,000 278,750
Charter Communications
Southeast Holdings 0%
(14%**), 3/15/2007............. 300,000 238,500
Comcast 10-5/8%, 7/15/2012........ 50,000 62,750
Digital Television 12-1/2%,
8/1/2007+...................... 225,000 255,375
EchoStar DBS 12-1/2%,
7/1/2002....................... 250,000 271,250
Heartland Wireless
Communications 14%,
10/15/2004..................... 200,000 75,000
Intermedia Capital Partners IV,
11-1/4%, 8/1/2006.............. 500,000 550,000
Northland Cable Television 10-1/4%,
11/15/2007+.................... 125,000 132,187
NTL 10%, 2/15/2007................ 50,000 52,875
Rogers Cablesystems 11%,
12/1/2015...................... 270,000 313,200
TCI Satellite Entertainment
10-7/8% 2/15/2007+............. 350,000 368,375
TCI Satellite Entertainment 0%
(12-1/4%**), 2/15/2007+........ 100,000 67,000
Wireless One 13%,
10/15/2003..................... 150,000 54,750
-----------
3,011,887
-----------
Principal
Amount Value
---------- -----------
CELLULAR -- 2.9%
Centennial Cellular 10-1/8%,
5/15/2005..................... $ 150,000 $ 163,500
Price Communications Wireless
11-3/4%, 7/15/2007+........... 250,000 272,500
PriCellular Wireless 10-3/4%,
11/1/2004..................... 225,000 244,687
-----------
680,687
-----------
CHEMICALS -- 0.9
Texas Petrochemicals 11-1/8%,
7/1/2006...................... 200,000 216,000
-----------
COMPUTER AND RELATED
SERVICES -- 3.5%
DecisionOne 9-3/4%, 8/1/2007...... 100,000 103,250
DecisionOne Holdings 0%
(11-1/2%**), 8/1/2008.......... 220,000 141,900
Unisys 12%, 4/15/2003............. 250,000 284,375
Unisys 11-3/4%, 10/15/2004........ 250,000 286,875
-----------
816,400
-----------
CONSUMER PRODUCTS -- 4.2%
American Pad & Paper 13%,
11/15/2005..................... 60,000 67,500
Amscan Holdings 9-7/8%
12/15/2007+.................... 150,000 154,125
Anchor Advanced Products
11-3/4%, 4/1/2004.............. 150,000 162,000
Carson 10-3/8%,11/1/2007+......... 150,000 150,750
French Fragrances 10-3/8%,
5/15/2007...................... 150,000 157,500
North Atlantic Trading 11%,
6/15/2004...................... 75,000 78,750
Ryder TRS 10%, 12/1/2006.......... 200,000 201,000
-----------
971,625
-----------
CONTAINERS -- 1.0%
Plastic Containers 10%,
12/15/2006..................... 100,000 106,500
U.S. Can 10-1/8%, 10/15/2006...... 125,000 133,125
-----------
239,625
-----------
- ---------------
+Rule 144A security.
** Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
See Notes to Financial Statements.
P-42
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
Principal
Amount Value
---------- -----------
ENERGY -- 0.5%
Abraxas Petroleum 11-1/2%,
11/1/2004..................... $ 100,000 $ 109,750
-----------
EQUIPMENT -- 1.1%
Williams Scotsman 9-7/8%
6/1/2007....................... 250,000 261,250
-----------
FINANCIAL SERVICES -- 3.3%
AMRESCO 10%, 3/15/2004............ 125,000 130,312
Crown Castle International 0%
(10-5/8%**), 11/15/2007+....... 175,000 109,812
Dollar Financial Group 10-7/8%
11/15/2006..................... 150,000 162,750
Iowa Select Farm 10-3/4%,
12/1/2005+..................... 75,000 77,344
Ocwen Capital Trust I 10-7/8%
8/1/2027....................... 150,000 163,500
Superior National Trust I 10-3/4%,
12/1/2017+..................... 25,000 25,687
Veritas Capital Trust 10%,
1/1/2028+...................... 90,000 92,025
-----------
761,430
-----------
FOOD -- 4.3%
AFC Enterprises 10-1/4%,
5/15/2007...................... 200,000 211,000
AmeriKing 10-3/4%, 12/1/2006...... 175,000 184,625
Ameriserve Food 10-1/8%,
7/15/2007...................... 250,000 263,750
Gorges/Quik-to-Fix Foods 11-1/2%,
12/1/2006...................... 250,000 265,000
International Home Foods 10-3/8%,
11/1/2006...................... 75,000 82,687
-----------
1,007,062
-----------
GAMING/HOTEL -- 10.9%
Alliance Gaming 10%,
8/1/2007+...................... 100,000 100,625
Ameristar Casinos 10-1/2%,
8/1/2004+...................... 200,000 205,000
Aztar 13-3/4%, 10/1/2004.......... 200,000 230,000
Casino America 12-1/2%,
8/1/2003....................... 400,000 436,500
Principal
Amount Value
---------- -----------
GAMING/HOTEL (continued)
Casino Magic of Louisiana 13%,
8/15/2003..................... $ 200,000 $ 193,000
Coast Hotels & Casinos 13%,
12/15/2002.................... 300,000 340,500
Fitzgerald Gaming 12-1/4%,
12/15/2004+................... 115,000 117,013
Showboat 13%, 8/1/2009........... 125,000 155,625
Showboat Marina Casino
Partnership
13-1/2%, 3/15/2003............. 150,000 180,750
Trump Atlantic City Funding
11-1/4%, 5/1/2006.............. 350,000 343,000
Trump Atlantic City Funding
11-1/4%, 5/1/2006+............. 45,000 43,650
Trump Hotels & Casino Resorts
Funding 15-1/2%, 6/15/2005..... 175,000 200,375
-----------
2,546,038
-----------
HEALTH CARE/MEDICAL
PRODUCTS -- 4.6%
Alaris Medical 9-3/4%, 12/1/2006.. 200,000 211,000
Alliance Imaging 9-5/8%,
12/15/2005..................... 60,000 61,350
Dade International 11-1/8%,
5/1/2006....................... 200,000 221,000
Graphic Controls 12%,
9/15/2005...................... 150,000 168,000
Paracelsus Healthcare 10%,
8/15/2006...................... 200,000 205,000
Paragon Health 0% (10-1/2%**),
11/1/2007+..................... 175,000 109,375
Sun Healthcare Group 9-1/2%,
7/1/2007+...................... 100,000 103,000
-----------
1,078,725
-----------
LEISURE-- 2.4%
Affinity Group 11%, 4/1/2007...... 200,000 214,000
AMF Bowling 0% (12-1/4%**),
3/15/2006...................... 150,000 118,688
Premier Parks 12%, 8/15/2003...... 150,000 167,625
Premier Parks 9-3/4%, 1/15/2007... 50,000 53,500
-----------
553,813
-----------
- ---------------
+ Rule 144A security.
** Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
See Notes to Financial Statements.
P-43
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
Principal
Amount Value
---------- -----------
MANUFACTURING -- 1.1%
Airxcel 11%, 11/15/2007+......... $125,000 $ 129,375
Clark-Schwebel 12-1/2%,
7/15/2007+.................... 45,994 49,444
International Knife & Saw 11-3/8%,
11/15/2006.................... 50,000 54,250
Werner Holdings 10%,
11/15/2007+................... 30,000 30,900
-----------
263,969
-----------
METALS -- 1.8%
Koppers Industries 97/8%
12/1/2007+..................... 25,000 25,875
Renco Metals 11-1/2%, 7/1/2003.... 225,000 240,187
Royal Oak Mines 11%,
8/15/2006...................... 225,000 158,625
-----------
424,687
-----------
PAGING -- 5.6%
Metrocall 9-3/4%, 11/1/2007+...... 125,000 124,062
Mobile Telecommunication
Technologies 13-1/2%,
12/15/2002..................... 375,000 436,875
Paging Network 10%,
10/15/2008..................... 450,000 468,563
ProNet 11-7/8% 6/15/2005.......... 250,000 270,000
-----------
1,299,500
-----------
PAPER AND PACKAGING -- 1.6%
BPC Holding 12-1/2%, 6/15/2006.... 150,000 165,750
Crown Paper 11%, 9/1/2005......... 200,000 207,000
-----------
372,750
-----------
PUBLISHING-- 2.5%
American Lawyer Media
Holdings 9-3/4%,
12/15/2007+.................... 150,000 153,000
American Lawyer Media
Holdings 0% (12-1/4%**),
12/15/2008+.................... 45,000 25,650
Perry-Judd 10-5/8%, 12/15/2007+... 50,000 52,250
Petersen Publishing 11-1/8%,
11/15/2006..................... 110,000 124,850
Principal
Amount Value
---------- -----------
PUBLISHING (continued)
TransWestern Holdings 0%
(11-7/8%**), 11/15/2008+........ $110,000 $ 66,550
TransWestern Publishing 9-5/8%,
11/15/2007+.................... 30,000 31,350
Von Hoffman Press 10-3/4%,
5/15/2007+..................... 110,000 118,250
-----------
571,900
-----------
RECORD STORAGE -- 0.4%
Pierce Leahy 11-1/8%,
7/15/2006...................... 75,000 85,125
-----------
RETAILING-- 1.6%
Central Tractor 10-5/8%, 4/1/2007. 200,000 212,000
Cole National Group 9-7/8%
12/31/2006..................... 150,000 161,250
-----------
373,250
-----------
SUPERMARKETS -- 1.9%
Jitney-Jungle Stores of
America 12%, 3/1/2006.......... 175,000 199,500
Jitney-Jungle Stores of America
10-3/4%, 9/15/2007............. 125,000 130,312
Pathmark Stores 11-5/8%,
6/15/2002...................... 150,000 122,250
-----------
452,062
-----------
TECHNOLOGY -- 2.2%
Advanced Micro Devices 11%,
8/1/2003....................... 200,000 215,000
Therma-Wave 10-5/8%,
5/15/2004...................... 150,000 156,750
Viasystems 9-3/4%, 6/1/2007....... 125,000 129,844
-----------
501,594
-----------
TELECOMMUNICATIONS -- 12.8%
BTI Telecom 10-1/2%,
9/15/2007+..................... 175,000 179,375
GCI 9-3/4%, 8/1/2007.............. 170,000 177,225
GlobalStar 11-1/4%, 6/15/2004..... 175,000 176,313
ICG Holdings 0% (11-5/8%** ),
3/15/2007...................... 175,000 119,875
- ---------------
+ Rule 144A security.
** Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
See Notes to Financial Statements.
P-44
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
Principal
Amount Value
---------- -----------
TELECOMMUNICATIONS (continued)
Intermedia Communications
0% (11-1/4%**), 7/1/2007....... $125,000 $ 89,688
Intermedia Communications
0% (12-1/2%**), 5/15/2006...... 150,000 118,500
ITC DeltaCom 11%, 6/1/2007........ 200,000 221,000
IXC Communications 12-1/2%,
10/1/2005...................... 325,000 376,188
Nextel Communications 0%
(10.65%**), 9/15/2007+......... 350,000 222,250
NEXTLINK Communications
12-1/2%, 4/15/2006............. 250,000 286,250
Powertel 11-1/8%, 6/1/2007........ 225,000 245,250
RCN 10%, 10/15/2007+.............. 190,000 198,075
RCN 0% (11-1/8%**),
10/15/2007+.................... 175,000 110,250
Sprint Spectrum 11%,
8/15/2006...................... 200,000 226,000
Talton Holdings 11%,
6/30/2007+..................... 100,000 109,000
Verio 13-1/2%, 6/15/2004+......... 100,000 120,000
-----------
2,975,239
-----------
THEATERS -- 1.3%
Hollywood Theaters 10-5/8%,
8/1/2007+...................... 150,000 160,125
Plitt Theaters 10-7/8% 6/15/2004.. 125,000 135,625
-----------
295,750
-----------
TRANSPORTATION -- 0.7%
Atlas Air 10-3/4%, 8/1/2005....... 150,000 159,000
-----------
UTILITIES -- 0.7%
Midland Cogeneration
Venture 11-3/4%, 7/23/2005..... 125,000 149,988
-----------
Total Corporate Bonds
(Cost $20,242,454).......... 20,934,106
-----------
Shares or
Principal
Amount Value
---------- -----------
PREFERRED STOCKS -- 4.1%
BROADCASTING -- 2.5%
Capstar Broadcasting Partners
12%............................ 750 shs. $ 86,437
Chancellor Media 12%+............. 1,376 158,584
SFX Broadcasting 12-5/8%.......... 1,500 171,375
Sinclair Capital 11-5/8%+......... 1,500 166,125
-----------
582,521
-----------
CABLE SYSTEMS -- 0.6%
EchoStar Communications
12-1/8%........................ 75 78,563
Pegasus Communications
12-3/4%........................ 50 55,875
-----------
134,438
-----------
TELECOMMUNICATIONS -- 1.0%
IXC Communications 12-1/2%+....... 123 144,901
NEXTLINK Communications 14%....... 1,385 86,216
-----------
231,117
-----------
Total Preferred Stocks
(Cost $839,463)............... 948,076
-----------
CONVERTIBLE SECURITIES -- 1.4%
SUBORDINATED
CONVERTIBLE BONDS -- 1.0%
TECHNOLOGY -- 1.0%
EMC 3-1/4%, 3/15/2002............. $75,000 101,906
Xilinx 5-1/4%, 11/1/2002+......... 150,000 146,063
-----------
Total Subordinated Convertible
Bonds (Cost $245,439)......... 247,969
-----------
CONVERTIBLE PREFERRED
STOCKS -- 0.4% (Cost $63,562)
BROADCASTING -- 0.4%
Chancellor Media $3+............. 1,250 96,719
-----------
- ---------------
+ Rule 144A security.
** Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
See Notes to Financial Statements.
P-45
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued)
- -------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
Value
-----------
Total Convertible Securities
(Cost $309,001)............... $ 344,688
-----------
Short-Term Holdings -- 1.3%
(Cost $300,000)............... 300,000
-----------
Value
-----------
Total Investments -- 96.8%
(Cost $21,690,918)............ $22,526,870
Other Assets
Less Liabilities -- 3.2% ......... 740,910
-----------
Net Assets -- 100.0%.............. $23,267,780
-----------
-----------
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
Shares Value
---------- -----------
CONVERTIBLE SECURITIES -- 22.4%
CONVERTIBLE PREFERRED STOCKS -- 15.0%
AUTOMOTIVE AND
RELATED -- 1.5%
Federal-Mogul 7%+................ 4,000 $ 202,000
-----------
DRUGS AND HEALTH
CARE -- 2.2%
McKesson 5%+..................... 4,000 306,000
-----------
ENERGY -- 0.5%
Lomak Petroleum 5-3/4%............ 1,500 70,875
-----------
ENVIRONMENTAL
SERVICES -- 1.8%
Browning-Ferris Industries
7-1/4%......................... 7,500 255,000
-----------
INSURANCE -- 4.5%
St. Paul Capital 6%.............. 4,500 324,000
Salomon Smith Barney 7-5/8%....... 7,500 301,875
-----------
625,875
-----------
OFFICE EQUIPMENT -- 1.7%
IKON Office Solutions $5.04...... 3,500 237,125
-----------
TRANSPORTATION -- 2.0%
Sea Containers $4.00............. 5,000 278,750
-----------
MISCELLANEOUS -- 0.8%
Corning (Delaware) 6%............ 1,700 104,763
Principal
Amount Value
---------- -----------
Total Convertible Preferred
Stocks (Cost $1,811,482)...... $ 2,080,388
-----------
SUBORDINATED CONVERTIBLE
BONDS -- 7.4%
DIVERSIFIED -- 1.9%
MascoTech 4-1/2%, 12/15/2003..... $ 300,000 262,500
-----------
ELECTRONICS -- 0.7%
Park Electrochemical 5-1/2%,
3/1/2006+..................... 100,000 94,500
-----------
ENERGY -- 3.1%
Santa Fe Pipelines 11.162%,
8/15/2010..................... 250,000 423,750
-----------
TECHNOLOGY -- 1.7%
Xilinx 5-1/4%, 11/1/2002+........ 250,000 243,437
-----------
Total Subordinated Convertible
Bonds (Cost $801,975)......... 1,024,187
-----------
Total Convertible Securities
(Cost $2,613,457)............. 3,104,575
-----------
CORPORATE BONDS -- 18.4%
AUTOMOTIVE AND RELATED-- 5.1%
Chrysler Financial 6-1/2%,
6/15/1998..................... 200,000 200,628
Ford Motor Credit 6-3/4%,
8/15/2008..................... 250,000 253,211
General Motors Acceptance
5-5/8%, 2/1/1999.............. 250,000 249,093
-----------
702,932
-----------
- -------------
+ Rule 144A security.
See Notes to Financial Statements.
P-46
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
Shares or
Principal
Amount Value
---------- -----------
BANKING AND FINANCE -- 4.8%
Associates Corp. of North America
6-1/2%, 8/15/2002.............. $300,000 $ 303,102
Capital One Bank 8-1/8%, 3/1/2000 250,000 258,977
First USA Bank 5-3/4%, 1/15/1999.. 100,000 99,819
-----------
661,898
-----------
ELECTRONICS -- 0.0%
StreamLogic 14%, 10/7/1998........ 33,999 6,800
-----------
FUNERAL SERVICES -- 2.2%
Loewen Group International 7-1/2%,
4/15/2001...................... 300,000 309,212
-----------
PAPER AND PACKAGING -- 2.3%
Owens-Illinois 7.85%,
5/15/2004...................... 300,000 315,376
-----------
RETAILING -- 4.0%
Federated Department Stores
10%, 2/15/2001................. 500,000 551,557
-----------
Total Corporate Bonds
(Cost $2,586,323).............. 2,547,775
-----------
US GOVERNMENT
SECURITIES -- 15.1%
US Treasury Notes 7-3/4%,
12/31/1999..................... 500,000 519,688
US Treasury Notes 6-1/4%,
6/30/2002...................... 500,000 510,313
US Treasury Notes 6-1/2%,
5/15/2005...................... 500,000 521,407
US Treasury Notes 6-5/8%,
5/15/2007...................... 500,000 529,531
-----------
Total US Government
Securities
(Cost $2,046,763).............. 2,080,939
-----------
COMMON STOCKS -- 33.9%
AEROSPACE -- 1.0%
General Dynamics.................. 1,600 shs. 138,300
-----------
Shares Value
---------- -----------
AUTOMOTIVE AND RELATED -- 0.5%
Chrysler......................... 2,000 $ 70,375
-----------
BANKING AND FINANCE -- 2.2%
Ahmanson (H.F.).................. 1,400 93,712
BankAmerica...................... 800 58,400
Citicorp......................... 600 75,862
First Union...................... 1,500 76,875
-----------
304,849
-----------
CHEMICALS -- 1.0%
duPont (E.l.) de Nemours......... 1,100 66,069
Goodrich (B.F.).................. 1,800 74,588
-----------
140,657
-----------
CONSUMER GOODS AND
SERVICES -- 5.9%
Anheuser-Busch................... 1,200 52,800
General Mills.................... 1,900 136,088
PepsiCo.......................... 3,700 134,819
RJR Nabisco Holdings............. 3,700 138,750
Sara Lee......................... 3,200 180,200
The Stanley Works................ 1,800 84,937
Xerox............................ 1,200 88,575
-----------
816,169
-----------
DIVERSIFIED -- 0.9%
Tenneco.......................... 3,200 126,400
-----------
DRUGS AND HEALTH
CARE -- 1.6%
American Home Products........... 1,000 76,500
Bristol-Myers Squibb............. 1,500 141,937
-----------
218,437
-----------
ELECTRIC AND GAS
UTILITIES -- 2.5%
Duke Energy...................... 1,900 105,212
FPL Group........................ 2,000 118,375
Williams Companies............... 4,400 124,850
-----------
348,437
-----------
- ----------------
See Notes to Financial Statements.
P-47
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Portfolios of Investments (continued) December 31, 1997
- -------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
Shares Value
---------- -----------
ELECTRONICS -- 1.7%
AMP.............................. 3,300 $ 138,600
Thomas & Betts................... 2,100 99,225
-----------
237,825
-----------
ENERGY -- 4.5%
Atlantic Richfield............... 2,600 208,325
Exxon............................ 3,000 183,563
Royal Dutch Petroleum
(Netherlands)................. 1,700 92,119
Snyder Oil....................... 3,666 66,905
Unocal........................... 1,800 69,862
-----------
620,774
-----------
FOOD -- 1.2%
ConAgra.......................... 5,000 164,062
-----------
INSURANCE -- 1.9%
American General................. 3,200 173,000
Lincoln National................. 1,200 93,750
-----------
266,750
-----------
MACHINERY -- 0.9%
GATX............................. 1,700 123,356
-----------
PAPER AND
PACKAGING -- 2.7%
Bemis............................ 1,900 83,719
Mead............................. 1,600 44,800
Union Camp....................... 1,800 96,638
Weyerhaeuser..................... 3,000 147,187
-----------
372,344
-----------
RETAILING -- 1.4%
May Department Stores............ 1,600 84,300
Penney (J.C.).................... 1,800 108,563
-----------
192,863
-----------
Shares or
Principal
Amount Value
---------- -----------
TOBACCO -- 1.0%
Philip Morris.................... 2,900 shs. $ 131,406
-----------
TRANSPORTATION -- 0.6%
Norfolk Southern................. 2,700 83,194
-----------
UTILITIES/
TELECOMMUNICATIONS -- 2.4%
Bell Atlantic.................... 1,300 118,300
GTE.............................. 2,100 109,725
SBC Communications............... 1,500 109,875
-----------
337,900
-----------
Total Common Stocks
(Cost $4,347,191)............. 4,694,098
-----------
REPURCHASE
AGREEMENTS -- 8.0%
(Cost $1,100,000)
HSBC Securities, Inc., 5%, dated
12/31/1997, maturing 1/5/1998
collateralized by: $1,045,000
US Treasury Notes 6-7/8%
5/15/2006, with a fair market
value of $1,128,095........... $1,100,000 1,100,000
-----------
Total Investments -- 97.8%
(Cost $12,693,734)............ 13,527,387
Other Assets Less
Liabilities -- 2.2%........... 307,893
-----------
Net Assets -- 100.0%............. $13,835,280
-----------
-----------
- ---------------
See Notes to Financial Statements.
P-48
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
P-49
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Statements of Assets and Liabilities
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman Seligman
Seligman Seligman Cash Common Communications
Bond Capital Management Stock and Information
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Long-term holdings......................... $6,587,900 $19,976,895 -- $48,395,942 $85,992,038
Short-term holdings........................ 400,000 1,000,000 $8,903,295 2,000,000 6,800,000
---------- ----------- ---------- ----------- -----------
Total Investments.......................... 6,987,900 20,976,895 8,903,295 50,395,942 92,792,038
Cash....................................... 149,578 240,536 -- 207,842 681,920
Interest and dividends receivable.......... 103,107 5,554 69 90,240 5,729
Receivable for Capital Stock sold.......... 3,776 29,356 -- 75,128 934,098
Receivable from associated companies....... 1,177 784 4,651 -- --
Receivable for securities sold............. -- 387,161 -- -- 86,247
Unrealized appreciation on foreign
currencies and forward currency
contracts.............................. -- -- -- -- --
---------- ----------- ---------- ----------- -----------
Total Assets............................... 7,245,538 21,640,286 8,908,015 50,769,152 94,500,032
---------- ----------- ---------- ----------- -----------
LIABILITIES:
Payable for Capital Stock redeemed......... 64 165 127,943 473 --
Payable for securities purchased........... -- 1,222,115 -- -- 6,795,250
Payable to custodian....................... -- -- 134,067 -- --
Unrealized depreciation on foreign
currencies and forward currency
contracts............................... -- -- -- -- --
Accrued expenses, taxes, and other......... 13,437 18,214 10,719 31,516 71,945
---------- ----------- ---------- ----------- -----------
Total Liabilities.......................... 13,501 1,240,494 272,729 31,989 6,867,195
---------- ----------- ---------- ----------- -----------
Net Assets................................. $7,232,037 $20,399,792 $8,635,286 $50,737,163 $87,632,837
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
COMPOSITION OF NET ASSETS:
Capital Stock, at par...................... $ 707 $ 1,127 $ 8,636 $ 3,117 $ 6,696
Additional paid-in capital................. 7,065,414 16,281,718 8,627,048 42,448,949 93,353,881
Undistributed/accumulated
net investment income (loss)........... (4,143) (4,488) -- 30,252 (1,661)
Undistributed/accumulated net
realized gain (loss)................... (51,898) 137,177 (398) 1,586 --
Net unrealized appreciation (depreciation)
of investments......................... 221,957 3,984,258 -- 8,253,259 (5,726,079)
Net unrealized appreciation (depreciation)
on translation of assets and liabilities
denominated in foreign currencies and
forward currency contracts............. -- -- -- -- --
---------- ----------- ---------- ----------- -----------
Net Assets................................. $7,232,037 $20,399,792 $8,635,286 $50,737,163 $87,632,837
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
Shares of Capital Stock Outstanding
($.001 par value)....................... 706,526 1,127,236 8,635,684 3,116,853 6,696,036
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
Net Asset Value per Share.................. $10.24 $18.10 $1.00 $16.28 $13.09
---------- ----------- ---------- ----------- -----------
---------- ----------- ---------- ----------- -----------
</TABLE>
- ----------------------
See Notes to Financial Statements.
P-50
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
December 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman Seligman
Henderson Henderson Henderson Seligman Seligman
Seligman Global Growth Global Smaller Global Henderson High-Yield Seligman
Frontier Opportunities Companies Technology International Bond Income
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- --------- ----------- ----------- ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
$40,378,514 $5,212,147 $19,476,032 $3,184,817 $8,660,846 $22,226,870 $12,427,387
3,000,000 300,000 900,000 400,000 -- 300,000 1,100,000
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
43,378,514 5,512,147 20,376,032 3,584,817 8,660,846 22,526,870 13,527,387
209,739 278,472 395,833 162,039 476,397 211,942 206,245
6,760 5,196 42,983 2,181 30,560 512,700 92,409
146,927 337 260 2,872 1,360 58,140 24,487
-- 3,356 9,667 2,633 7,833 -- 331
150,292 1,102 31,571 -- 4,597 -- --
-- 7,268 37,769 -- 25,580 -- --
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
43,892,232 5,807,878 20,894,115 3,754,542 9,207,173 23,309,652 13,850,859
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
-- 15,098 35,449 -- 37 -- 133
877,881 331,066 321,845 58,650 3,678 20,250 --
-- -- -- -- -- -- --
-- 393 -- -- 16 -- --
41,078 12,089 32,231 9,664 20,977 21,622 15,446
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
918,959 358,646 389,525 68,314 24,708 41,872 15,579
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
$42,973,273 $5,449,232 $20,504,590 $3,686,228 $9,182,465 $23,267,780 $13,835,280
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
$ 2,723 $ 494 $ 1,580 $ 348 $ 678 $ 1,961 $ 1,281
39,932,315 5,157,361 20,063,377 3,743,487 8,338,198 22,420,933 12,988,331
(1,619) 472 (1,600) (826) (2,941) 8,934 11,118
-- -- -- -- -- -- 897
3,039,854 411,604 1,143,316 (25,171) 1,092,500 835,952 833,653
-- (120,699) (702,083) (31,610) (245,970) -- --
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
$42,973,273 $5,449,232 $20,504,590 $3,686,228 $9,182,465 $23,267,780 $13,835,280
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
2,723,359 494,253 1,580,175 348,219 678,213 1,960,568 1,280,951
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
$15.78 $11.03 $12.98 $10.59 $13.54 $11.87 $10.80
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
- ----------- ---------- ----------- ---------- ---------- ----------- -----------
</TABLE>
P-51
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Statements of Operations
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman Seligman
Seligman Seligman Cash Common Communications
Bond Capital Management Stock and Information
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- ----------- ----------- -------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................................... $394,336 $ 50,153 $512,275 $ 455,945 $ 242,059
Dividends*................................. -- 83,568 -- 639,449 42,765
-------- ----------- -------- ---------- -----------
Total Investment Income.................... 394,336 133,721 512,275 1,095,394 284,824
-------- ----------- -------- ---------- -----------
EXPENSES:
Management fees............................ 23,150 70,147 38,042 178,662 574,370
Shareholder reports and
communications.......................... 6,874 6,874 6,874 6,874 4,766
Auditing fees.............................. 6,356 10,556 8,554 21,254 31,256
Directors' fees and expenses............... 3,966 4,082 4,004 4,340 4,616
Custody and related services............... 3,683 11,489 13,779 17,969 39,170
Registration............................... 1,359 2,022 972 4,469 4,397
Legal fees................................. 1,345 1,345 1,345 1,345 1,442
Miscellaneous.............................. 1,044 1,411 1,153 2,270 3,111
-------- ----------- -------- ---------- -----------
Total Expenses Before
Waiver/Reimbursement.................... 47,777 107,926 74,723 237,183 663,128
Waiver/reimbursement of expenses........... (13,068) (2,708) (74,723) -- --
-------- ----------- -------- ---------- -----------
Total Expenses After Waiver/
Reimbursement........................... 34,709 105,218 -- 237,183 663,128
-------- ----------- -------- ---------- -----------
Net Investment Income (Loss)............... 359,627 28,503 512,275 858,211 (378,304)
-------- ----------- -------- ---------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments.... 2,573 1,456,363 -- 6,975,977 25,855,124
Net realized loss from foreign
currency transactions................... -- -- -- -- --
Net change in unrealized appreciation/
depreciation of investments............. 158,584 1,876,910 -- 523,788 (10,538,214)
Netchange in unrealized appreciation/
depreciation on translation of
assets and liabilities denominated
in foreign currencies and forward
currency contracts...................... -- -- -- -- --
-------- ----------- -------- ---------- -----------
Net Gain (Loss) on Investments
and Foreign Currency
Transactions............................ 161,157 3,333,273 -- 7,499,765 15,316,910
-------- ----------- -------- ---------- -----------
Increase in Net Assets
from Operations......................... $520,784 $3,361,776 $512,275 $8,357,976 $14,938,606
-------- ----------- -------- ---------- -----------
-------- ----------- -------- ---------- -----------
- ----------------------------
* Net of foreign tax withheld as follows: $ -- $ 511 $ -- $ 2,868 $ 1,575
See Notes to Financial Statements.
</TABLE>
P-52
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
For the Year Ended December 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman Seligman
Henderson Henderson Henderson Seligman Seligman
Seligman Global Growth Global Smaller Global Henderson High-Yield Seligman
Frontier Opportunities Companies Technology International Bond Income
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
- --------- ----------- ----------- ------------ ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
$ 116,255 $ 22,193 $ 49,082 $ 15,984 $ 24,643 $1,684,004 $ 466,955
34,531 31,782 279,653 24,294 136,659 63,550 255,598
- ---------- -------- -------- -------- -------- ---------- ----------
150,786 53,975 328,735 40,278 161,302 1,747,554 722,553
- ---------- -------- -------- -------- -------- ---------- ----------
282,248 38,358 200,415 26,504 88,212 84,740 54,451
4,766 4,766 4,766 4,766 4,766 4,766 6,874
17,456 4,600 11,300 4,500 7,100 8,556 9,956
4,237 3,894 4,066 3,892 3,952 4,005 4,061
18,795 25,563 86,946 12,731 74,727 27,025 6,882
4,146 1,281 1,673 994 1,739 1,906 1,242
1,396 1,348 1,359 1,347 1,352 1,367 1,345
2,023 975 1,514 925 1,162 1,341 1,292
- ---------- -------- -------- -------- -------- ---------- ----------
335,067 80,785 312,039 55,659 183,010 133,706 86,103
-- (27,093) (31,463) (18,553) (59,491) (15,066) (4,416)
- ---------- -------- -------- -------- -------- ---------- ----------
335,067 53,692 280,576 37,106 123,519 118,640 81,687
- ---------- -------- -------- -------- -------- ---------- ----------
(184,281) 283 48,159 3,172 37,783 1,628,914 640,866
- ---------- -------- -------- -------- -------- ---------- ----------
4,064,832 141,228 813,641 513,781 665,686 186,257 731,075
-- (73,436) (407,259) (12,358) (422,188) -- 5,037
1,855,841 381,018 750,188 (84,833) 439,369 571,005 419,679
-- (112,875) (536,914) (40,471) (72,394) -- (10,907)
- ---------- -------- -------- -------- -------- ---------- ----------
5,920,673 335,935 619,656 376,119 610,473 757,262 1,144,884
- ---------- -------- -------- -------- -------- ---------- ----------
$5,736,392 $336,218 $667,815 $379,291 $648,256 $2,386,176 $1,785,750
- ---------- -------- -------- -------- -------- ---------- ----------
- ---------- -------- -------- -------- -------- ---------- ----------
$ 222 $ 2,873 $ 38,977 $ 1,620 $ 16,430 $ -- $ 18
</TABLE>
P-53
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Statements of Changes in Net Assets
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman Seligman
Bond Portfolio Capital Portfolio Cash Management Portfolio
-------------------- --------------------- -------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
-------------------- --------------------- --------------------
1997 1996 1997 1996 1997 1996
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).......... $ 359,627 $ 269,490 $ 28,503 $ 34,560 $ 512,275 $ 483,722
Net realized gain (loss) on
investments........................ 2,573 42,902 1,456,363 793,791 -- --
Net realized gain (loss)
from foreign currency
transactions....................... -- -- -- -- -- --
Net change in unrealized
appreciation/depreciation
of investments..................... 158,584 (291,839) 1,876,910 666,893 -- --
Net change in unrealized
appreciation/depreciation
on translation of assets
and liabilities denominated
in foreign currencies and
forward currency contracts......... -- -- -- -- -- --
---------- ---------- ----------- ----------- ---------- ----------
Increase in Net Assets From
Operations......................... 520,784 20,553 3,361,776 1,495,244 512,275 483,722
---------- ---------- ----------- ----------- ---------- ----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income................. (360,523) (269,359) (29,292) (35,038) (512,275) (483,722)
Realized gain on investments.......... -- -- (1,319,186) (852,588) -- --
---------- ---------- ----------- ----------- ---------- ----------
Decrease in Net Assets From
Distributions...................... (360,523) (269,359) (1,348,478) (887,626) (512,275) (483,722)
---------- ---------- ----------- ----------- ---------- ----------
CAPITAL SHARE
TRANSACTIONS:
Net proceeds from sale of
shares............................. 3,014,160 2,178,074 7,491,753 6,122,881 25,875,970 16,950,432
Investment of dividends............... 360,523 269,359 29,292 35,038 512,275 483,722
Shares issued in payment
of gain distributions.............. -- -- 1,319,186 852,588 -- --
---------- ---------- ----------- ----------- ---------- ----------
Total................................. 3,374,683 2,447,433 8,840,231 7,010,507 26,388,245 17,434,154
---------- ---------- ----------- ----------- ---------- ----------
Cost of shares redeemed............... (1,317,788) (1,680,294) (4,766,794) (2,598,584) (27,507,851) (15,478,773)
---------- ---------- ----------- ----------- ---------- ----------
Increase (Decrease) in Net
Assets From Capital
Share Transactions................. 2,056,895 767,139 4,073,437 4,411,923 (1,119,606) 1,955,381
---------- ---------- ----------- ----------- ---------- ----------
Increase (Decrease) in
Net Assets......................... 2,217,156 518,333 6,086,735 5,019,541 (1,119,606) 1,955,381
Net Assets:
Beginning of year..................... 5,014,881 4,496,548 14,313,057 9,293,516 9,754,892 7,799,511
---------- ---------- ----------- ----------- ---------- ----------
End of Year........................... $7,232,037 $5,014,881 $20,399,792 $14,313,057 $8,635,286 $9,754,892
========== ========== =========== =========== ========== ==========
- ----------------------
* For the period May 1, 1996, commencement of operations, to December 31, 1996.
See Notes to Financial Statements.
</TABLE>
P-54
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman
Seligman Seligman Henderson Henderson
Common Stock Communications and Seligman Global Growth Global Smaller
Portfolio Information Portfolio Frontier Portfolio Opportunities Portfolio Companies Portfolio
----------------------- ----------------------- ------------------------ ------------------------- -----------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
----------------------- ----------------------- ----------------------- ------------------------- ------------------------
1997 1996 1997 1996 1997 1996 1997 1996* 1997 1996
----------- --------- ----------- --------- ----------- --------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 858,211 $ 666,793 $ (378,304) $ (159,892) $ (184,281) $ (80,539) $ 283 $ 1,510 $ 48,159 $ 24,879
6,975,977 4,441,023 25,855,124 (3,546,285) 4,064,832 3,410,956 141,228 (9,589) 813,641 1,146,142
-- (56,144) -- -- -- -- (73,436) 297 (407,259) 34,461
523,788 985,046 (10,538,214) 8,651,223 1,855,841 693,961 381,018 30,586 750,188 192,735
-- 55,242 -- -- -- -- (112,875) (7,824) (536,914) (129,401)
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
8,357,976 6,091,960 14,938,606 4,945,046 5,736,392 4,024,378 336,218 14,980 667,815 1,268,816
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
(827,581) (669,792) -- -- -- -- -- (1,843) (26,233) (21,782)
(6,979,440) (4,598,840) (22,307,569) -- (3,889,283) (3,392,252) (60,644) -- (475,283) (1,150,819)
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
(7,807,021) (5,268,632) (22,307,569) -- (3,889,283) (3,392,252) (60,644) (1,843) (501,516) (1,172,601)
12,649,970 11,490,927 50,718,332 27,653,569 18,870,587 17,892,649 4,394,619 1,707,364 5,959,379 11,760,606
827,581 669,792 -- -- -- -- -- 1,843 26,233 21,782
6,979,440 4,598,840 22,307,569 -- 3,889,283 3,392,252 60,644 -- 475,283 1,150,819
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
20,456,991 16,759,559 73,025,901 27,653,569 22,759,870 21,284,901 4,455,263 1,709,207 6,460,895 12,933,207
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
(7,439,183) (9,250,532) (38,669,048) (10,395,761) (13,305,727) (2,721,117) (871,295) (132,654) (2,998,851) (989,791)
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
13,017,808 7,509,027 34,356,853 17,257,808 9,454,143 18,563,784 3,583,968 1,576,553 3,462,044 11,943,416
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
13,568,763 8,332,355 26,987,890 22,202,854 11,301,252 19,195,910 3,859,542 1,589,690 3,628,343 12,039,631
37,168,400 28,836,045 60,644,947 38,442,093 31,672,021 12,476,111 1,589,690 -- 16,876,247 4,836,616
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
$50,737,163 $37,168,400 $87,632,837 $60,644,947 $42,973,273 $31,672,021 $5,449,232 $1,589,690 $20,504,590 $16,876,247
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
</TABLE>
P-55
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Statements of Changes in Net Assets (continued)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Seligman Seligman
Henderson Henderson Seligman
Global Technology International High-Yield Seligman
Portfolio Portfolio Bond Portfolio Income Portfolio
------------------- ------------------ ------------------- -------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
------------------ ------------------ ------------------- -------------------
1997 1996* 1997 1996 1997 1996 1997 1996
-------- -------- --------- ------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss).. $ 3,172 $ (2,332) $ 37,783 $ 40,190 $ 1,628,914 $ 700,400 $ 640,866 $ 665,263
Net realized gain (loss) on
investments................ 513,781 9,847 665,686 99,382 186,257 71,419 731,075 188,849
Net realized gain (loss)
from foreign currency
transactions............... (12,358) (762) (422,188) 29,228 -- -- 5,037 (24)
Net change in unrealized
appreciation/depreciation
of investments............. (84,833) 59,662 439,369 378,494 571,005 207,559 419,679 (75,436)
Net change in unrealized
appreciation/depreciation
on translation of assets
and liabilities denominated
in foreign currenciesand
forward currency contracts. (40,471) 8,861 (72,394) (153,172) -- -- (10,907) 7,431
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
Increase in Net Assets From
Operations................. 379,291 75,276 648,256 394,122 2,386,176 979,378 1,785,750 786,083
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Net investment income......... (3,585) -- (17,648) (36,924) (1,614,526) (700,656) (625,869) (693,657)
Realized gain on investments.. (503,962) (10,437) (308,510) (128,691) (193,743) (71,346) (735,166) (198,872)
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
Decrease in Net Assets
From Distributions......... (507,547) (10,437) (326,158) (165,615) (1,808,269) (772,002) (1,361,035) (892,529)
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Net proceeds from sale of
shares..................... 3,874,388 1,484,242 3,331,657 4,060,684 16,215,266 9,904,511 2,166,510 5,080,349
Investment of dividends....... 3,585 -- 17,648 36,924 1,614,526 700,656 625,869 693,657
Shares issued in payment of
gain distributions......... 503,962 10,437 308,510 128,691 193,743 71,346 735,166 198,872
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
Total......................... 4,381,935 1,494,679 3,657,815 4,226,299 18,023,535 10,676,513 3,527,545 5,972,878
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
Cost of shares redeemed....... (1,931,166) (195,803) (2,039,720) (1,395,763) (6,510,022) (2,716,951) (3,833,770) (4,769,122)
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
Increase (Decrease) in Net
Assets From Capital
Share Transactions......... 2,450,769 1,298,876 1,618,095 2,830,536 11,513,513 7,959,562 (306,225) 1,203,756
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
Increase in Net Assets........ 2,322,513 1,363,715 1,940,193 3,059,043 12,091,420 8,166,938 118,490 1,097,310
Net Assets:
Beginning of year............. 1,363,715 -- 7,242,272 4,183,229 11,176,360 3,009,422 13,716,790 12,619,480
---------- ---------- ---------- ---------- ----------- ----------- ----------- -----------
End of Year................... $3,686,228 $1,363,715 $9,182,465 $7,242,272 $23,267,780 $11,176,360 $13,835,280 $13,716,790
========== ========== ========== ========== =========== =========== =========== ===========
- ----------------------
* For the period May 1, 1996, commencement of operations, to December 31, 1996.
See Notes to Financial Statements.
</TABLE>
P-56
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Notes to Financial Statements
- ------------------------------------------------------------------------------
1. Organization -- Seligman Portfolios, Inc. (the "Fund") is an open-end
diversified management investment company consisting of twelve separate
portfolios (the "Portfolios"): "Seligman Bond Portfolio" ("Bond Portfolio"),
"Seligman Capital Portfolio" ("Capital Portfolio"), "Seligman Cash Management
Portfolio" ("Cash Management Portfolio"), "Seligman Common Stock Portfolio"
("Common Stock Portfolio"), "Seligman Communications and Information Portfolio"
("Communications and Information Portfolio"), "Seligman Frontier Portfolio"
("Frontier Portfolio"), "Seligman Henderson Global Growth Opportunities
Portfolio" ("Global Growth Opportunities Portfolio"), "Seligman Henderson Global
Smaller Companies Portfolio" ("Global Smaller Companies Portfolio"),"Seligman
Henderson Global Technology Portfolio" ("Global Technology Portfolio"),
"Seligman Henderson International Portfolio" ("International Portfolio"),
"Seligman High-Yield Bond Portfolio" ("High-Yield Bond Portfolio"), and
"Seligman Income Portfolio" ("Income Portfolio"), each designed to meet
different investment goals. Shares of the Fund are currently provided as the
investment medium for Canada Life of America Variable Annuity Account 2
("CLVA-2"), which is offered by Canada Life Insurance Company of America
("CLICA"), Canada Life of New York Variable Annuity Account 2 ("CLNYVA-2") which
is offered by Canada Life Insurance Company of New York ("CLNY"), and Canada
Life of America Annuity Account 3 ("CLVA-3"), which is offered by CLICA. CLVA-2
and CLNYVA-2 are registered as unit investment trusts under the Investment
Company Act of 1940, as amended (the "1940 Act") and fund variable annuity
contracts (the "CLVA-2 Contracts") issued by CLICA and CLNY and distributed by
Seligman Financial Services, Inc. CLVA-3 is not registered or regulated as a
unit investment trust under the 1940 Act in reliance on the exemption provided
in Section 3(c)(11) of the 1940 Act, and funds variable annuity contracts (the
"CLVA-3 Contracts") issued by CLICA and distributed by Seligman Financial
Services, Inc. CLVA-3 Contracts may be purchased only by pension or
profit-sharing employee benefit plans that satisfy the requirements for
qualification set forth in Section 401 of the Internal Revenue Code of 1986, as
amended. Shares of the Fund are also provided as the investment medium for other
variable annuity accounts established by CLICA or its affiliates ("Canada Life
Separate Accounts"). Shares of the Bond, Capital,CashManagement,CommonStock,
andIncomePortfolios are also provided as the investment medium for Seligman
Mutual Benefit Plan (the "Mutual Benefit Plan"), a separate account of MBLLife
Assurance Corporation ("MBL Life"). However, MBL Life has decided that it will
not accept applications for new contracts nor will it accept additional purchase
payments under existing contracts. In addition, requests for transfers of
amounts to its Fixed Accumulation Account from the Mutual Benefit Plan will not
be accepted.
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 US Government andGovernment Agency
securities, bonds, convertible securities, and stocks are valued at the most
current market values or, in their absence, at fair market values determined
in accordance with procedures approved by the Board of Directors. Securities
traded on national exchanges are valued at the last sales prices or, in their
absence and in the case of over-the-counter securities, at the mean of
closing bid and asked prices. Short-term holdings maturing in 60 days or less
are valued at amortized cost. Investments held by Cash Management Portfolio
are valued using the amortized cost method which approximates fair value.
b. Foreign Securities -- The Portfolios may invest up to 10% of their total
assets in foreign securities (except Global Growth Opportunities Portfolio,
Global Smaller Companies Portfolio, Global Technology Portfolio, and
International Portfolio, which may invest up to 100% of their total assets in
foreign securities). Investments in foreign securities will usually be
denominated in foreign currencies, and the Portfolios may temporarily hold
funds in foreign currencies. The Portfolios may also invest in US
dollar-denominated American Depositary Receipts ("ADRs"), American Depositary
Shares ("ADSs"), European Depositary Receipts ("EDRs"), Global Depositary
Receipts ("GDRs"), and Global Depositary Shares ("GDSs"). ADRs and ADSs are
issued by domestic banks or trust companies and evidence ownership of
securities issued by foreign corporations. ADRs and ADSs are traded on United
States exchanges or over-the-counter and are not included in the 10%
limitation. EDRs,GDRs,and GDSs are receipts similar to ADRs and ADSs and are
typically issued by foreign banks or trust companies and traded in Europe.
The books and records of the Portfolios are maintained in US dollars. Foreign
currency amounts are translated into US dollars on the following basis:
(i) market value of investment securities, other assets, and liabilities,
at the daily rate of exchange as reported by a pricing service;
(ii)purchases and sales of investment securities, income and expenses, at
the rate of exchange prevailing on the respective dates of such
transactions.
The net asset values per share of Portfolios which invest in securities
denominated in foreign currencies will be affected by changes in currency
exchange rates. Changes in foreign currency exchange rates may also affect
the value of dividends and interest earned, gains and losses realized on
sales of securities, and net investment income and gains, if any, to be
distributed to shareholders of the Portfolios. The rate of exchange between
the US dollar and other currencies is determined by the forces of supply and
demand in the foreign exchange markets.
Net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and from the difference between
the amounts of dividends, interest and foreign withholding
P-57
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- ------------------------------------------------------------------------------
taxes recorded on the Portfolios' books, and the US dollar equivalent of
the amounts actually received or paid. Net unrealized foreign exchange gains
and losses arise from changes in the value of portfolio securities and other
foreign currency-denominated assets and liabilities at period end, resulting
from changes in exchange rates.
The Portfolios separate 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
Portfolios. Similarly, the Portfolios separate 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. Forward Currency Contracts -- The Global Growth Opportunities Portfolio,
Global Smaller Companies Portfolio, Global Technology Portfolio, and
International Portfolio may enter into forward currency contracts in
order to hedge their exposure to changes in foreign currency exchange
rates on their foreign portfolio holdings, or other amounts receivable
or payable in foreign currency. A forward contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated
forward rate. Certain risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms of their
contracts. The contracts are valued daily at current exchange rates and
any unrealized gain or loss is included in net unrealized appreciation or
depreciation on translation of assets and liabilities denominated in
foreign currencies and forward currency contracts. The gain or loss,
if any, arising from the difference between the settlement value of the
forward contract and the closing of such contract, is included in net
realized gain or loss from foreign currency transactions. For federal
income tax purposes, certain open forward currency contracts are treated as
sold on the last day of the fiscal year and any gains or losses are
recognized immediately. As a result, the amount of income distributable to
shareholders may vary from the amount recognized for financial statement
purposes.
d. Federal Taxes -- The Portfolios' policy is to comply with the
requirements of the Internal Revenue Code applicable to Regulated Investment
Companies and to distribute substantially all of their taxable net income and
net gain realized to shareholders.
e. Security Transactions and Related Investment Income --Investment
transactions are recorded on trade dates. Interest income is recorded on the
accrual basis. The Portfolios amortize market discounts and premiums on
purchases of portfolio securities. Dividends receivable and payable are
recorded on ex-dividend dates, except that certain dividends from foreign
securities where the ex-dividend dates may have passed are recorded as
soon as the Fund is informed of the dividend.
f. Repurchase Agreements --The Portfolios may enter into repurchase
agreements with commercial banks and with broker/dealers deemed to be
creditworthy by J. & W. Seligman & Co. Incorporated (the "Manager").
Securities purchased subject to repurchase agreements are deposited with
the Portfolios' custodians and, pursuant to the terms of the repurchase
agreement, must have an aggregate market value greater than or equal to the
repurchase price, plus accrued interest, at all times. Procedures have been
established to monitor, on a daily basis, the market value of the
repurchase agreements' underlying securities to ensure the existence of the
proper level of collateral.
g. Expense Allocations -- Expenses directly attributable to each Portfolio
are charged to such Portfolio, and expenses that are applicable to more
than one Portfolio are allocated among them.
h. Distributions to Shareholders -- The treatment for financial statement
purposes of distributions made during the year from net investment income
or net realized gains may differ from their ultimate treatment for federal
income tax purposes. These differences primarily are caused by differences
in the timing of the recognition of certain components of income, expense
or capital gain and the recharacterization of foreign exchange gains or
losses to either ordinary income 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 Portfolios.
3. Purchases and Sales of Securities --Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the year ended December 31, 1997, were as follows:
Portfolio Purchases Sales
--------- ------------ ------------
Bond $ 5,091,586 $ 4,134,111
Capital 19,047,518 15,667,004
Common Stock 40,626,631 28,596,935
Communications and Information 211,971,199 200,473,181
Frontier 41,767,990 36,189,622
Global Growth Opportunities 6,136,540 2,643,212
Global Smaller Companies 15,065,283 12,282,453
Global Technology 5,267,471 3,882,450
International 9,185,558 7,351,490
P-58
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Portfolio Purchases Sales
--------- ------------ -------------
High-Yield Bond $ 23,074,271 $ 12,229,771
Income 10,225,670 11,098,708
For the year ended December 31, 1997, purchases and sales of US Government
obligations were $5,210,388 and $4,388,183, respectively, for the Bond
Portfolio, and purchases of US Government obligations were $1,015,977 for the
Income Portfolio.
Identified cost of investments sold is used for both financial statement and
federal income tax purposes.
At December 31, 1997, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes. The tax
basis gross unrealized appreciation and depreciation of portfolio securities,
including the effects of foreign currency transactions, were as follows:
Unrealized Unrealized
Portfolio Appreciation Depreciation
--------- ------------ -----------
Bond $ 222,049 $ 92
Capital 4,535,682 551,424
Common Stock 9,125,971 872,712
Communications and Information 4,564,965 10,291,044
Frontier 6,220,677 3,180,823
Global Growth Opportunities 588,894 304,698
Global Smaller Companies 3,207,540 2,801,298
Global Technology 375,070 431,772
International 1,316,976 492,870
High-Yield Bond 1,164,189 328,237
Income 1,135,757 302,104
4. Management Fee, Administrative Services, and Other Transactions -- The
Manager manages the affairs of the Fund and provides orarrangesforthe necessary
personnel and facilities. SeligmanHendersonCo.(the"Subadviser"),an entity
owned50% each bytheManager and Henderson plc, supervises and directs the Fund's
foreign investments. 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 ManagerorbyHenderson plc. The Manager's
fee is calculated daily and payable monthly, equal to 0.40%, on an annual basis,
of Bond, Capital, Cash Management, Common Stock, and Income Portfolios' daily
net assets; equal to 0.75%, on an annual basis, of Communications and
Information and Frontier Portfolios' daily net assets; and equal to 0.50%, on an
annual basis, of High-Yield Bond Portfolio's daily net assets. The Manager's fee
from Global Growth Opportunities, Global Smaller Companies, Global Technology
and International Portfolios is calculated daily and payable monthly, equal to
an annual rate of 1.00% of the daily net assets of each Portfolio, of which
0.90% is paid to the Subadviser. The Manager has agreed to reimburse expenses,
other than the management fee, which exceed 0.20% per annum of the average daily
net assets of each of the Portfolios (except theCash Management, Global Growth
Opportunities, Global Smaller Companies, Global Technology and International
Portfolios). The Manager, at its discretion, has elected to waive all of its fee
for, and reimburse all of the expenses of, the Cash Management Portfolio until
such time as the Manager determines. The Manager and Subadviser have agreed to
reimburse expenses, other than the management fee, which exceed 0.40% per annum
of the average daily net assets of theGlobal Growth Opportunities, Global
Smaller Companies, Global Technology and International Portfolios. For the year
ended December 31, 1997, the Manager reimbursed expenses and/or waived fees of
$13,068, $2,708, $74,723, $15,066, and $4,416 for the Bond, Capital, Cash
Management, High-Yield Bond, and Income Portfolios, respectively. For the same
period, the Manager waived all its fee and the Subadviser waived a portion of
its fee for the Global Growth Opportunities Portfolio, the Global Smaller
Companies Portfolio, the Global Technology Portfolio, and the International
Portfolio, totalling $27,093, $31,463, $18,553, and $59,491, respectively.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of the CLVA-2 Contracts and an affiliate of the Manager, received
concessions of $301,510 from Canada Life Insurance Company of America and
$20,947 from Canada Life Insurance Company of New York, after commissions paid
to dealers.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or the Subadviser.
P-59
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- ------------------------------------------------------------------------------
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in directors' fees and
expenses, and the accumulated balance thereof at December 31, 1997, is included
in other liabilities. Deferred fees and the related accrued interest are not
deductible for federal income tax purposes until such amounts are paid.
5. Loss Carryforward -- At December 31, 1997, the Bond Portfolio and the Cash
Management Portfolio had net capital loss carryforwards for federal income tax
purposes of $51,898 and $398, respectively, which are available for offset
against future taxable net gains. These net capital loss carryforwards will
expire in varying amounts through 2003.
6. Outstanding Forward Exchange Currency Contracts -- At December 31, 1997,
the Fund had outstanding forward exchange currency contracts to purchase or
sell foreign currencies as follows:
<TABLE>
<CAPTION>
Unrealized
Foreign In Exchange Settlement Appreciation
Contract Currency for US $ Date US $ Value (Depreciation)
- -------- ---------- ----------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
Purchases:
Italian lira 27,903,636 15,860 1/5/98 15,773 $ (87)
Dutch guilders 98,485 48,811 1/5/98 48,599 (212)
Swedish kronor 186,590 23,611 1/5/98 23,517 (94)
-------
(393)
-------
Sales:
Japanese yen 26,318,670 210,000 2/20/98 202,732 7,268
-------
$ 6,875
=======
GLOBAL SMALLER COMPANIES PORTFOLIO
Sales:
Italian lira 22,231,840 12,637 1/5/98 12,567 $70
Japanese yen 100,909,225 815,000 2/20/98 777,301 37,699
-------
$37,769
=======
INTERNATIONAL PORTFOLIO
Purchases:
Singapore dollars 6,188 3,694 1/2/98 3,678 $ (16)
-------
Sales:
Japanese yen 68,469,695 553,000 2/20/98 527,420 25,580
-------
$25,564
=======
</TABLE>
P-60
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
7. Capital Stock Transactions -- At December 31, 1997, there were 20,000,000
shares of Capital Stock authorized for each of the Global Growth Opportunities
and Global Technology Portfolios; 80,000,000 shares for the Bond and Capital
Portfolios; and 100,000,000 shares for each of the Cash Management, Common
Stock, Communications and Information, Frontier, Global Smaller Companies,
International, High-Yield Bond, and Income Portfolios, all at a par value of
$.001 per share. Transactions in shares of Capital Stock were as follows:
<TABLE>
<CAPTION>
Bond Capital Cash Management
Portfolio Portfolio Portfolio
------------------------ ---------------------- -----------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------ ---------------------- -----------------------
1997 1996 1997 1996 1997 1996
--------- --------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares.................... 292,591 214,510 421,000 371,812 25,875,970 16,950,432
Shares issued in payment
of dividends................... 35,242 27,071 1,659 2,189 512,275 483,722
Shares issued in payment
of gain distributions.......... -- -- 74,699 53,253 -- --
--------- --------- -------- -------- ---------- ----------
Total............................. 327,833 241,581 497,358 427,254 26,388,245 17,434,154
--------- --------- -------- -------- ---------- ----------
Shares redeemed................... (128,619) (165,022) (264,028) (156,642) (27,507,851) (15,478,773)
--------- --------- -------- -------- ---------- ----------
Increase (Decrease)
in Shares...................... 199,214 76,559 233,330 270,612 (1,119,606) 1,955,381
========= ========= ======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Communications
Common Stock and Information Frontier
Portfolio Portfolio Portfolio
------------------------ ---------------------- ------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------- ---------------------- ------------------------
1997 1996 1997 1996 1997 1996
--------- ---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares.................... 706,222 676,407 2,968,727 2,058,865 1,172,506 1,141,808
Shares issued in payment
of dividends................... 51,724 41,705 -- -- -- --
Shares issued in payment
of gain distributions.......... 436,215 286,354 1,783,179 -- 255,874 229,516
--------- ---------- --------- --------- --------- ---------
Total............................. 1,194,161 1,004,466 4,751,906 2,058,865 1,428,380 1,371,324
--------- ---------- --------- --------- --------- ---------
Shares redeemed................... (412,385) (537,472) (2,185,329) (777,428) (819,268) (177,011)
--------- ---------- --------- --------- --------- ---------
Increase in Shares................ 781,776 466,994 2,566,577 1,281,437 609,112 1,194,313
========= ========== ========= ========= ========= =========
</TABLE>
P-61
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Notes to Financial Statements (continued)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Growth Global Smaller Global
Opportunities Companies Technology
Portfolio Portfolio Portfolio
------------------------ ---------------------- -------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------ ---------------------- -------------------------
1997 1996* 1997 1996 1997 1996*
--------- --------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 409,426 173,750 447,087 877,250 329,216 150,969
Shares issued in payment
of dividends..................... -- 186 2,062 1,708 347 --
Shares issued in payment
of gain distributions............ 5,564 -- 37,365 90,260 48,881 1,023
--------- --------- -------- -------- --------- ---------
Total............................... 414,990 173,936 486,514 969,218 378,444 151,992
--------- --------- -------- -------- --------- ---------
Shares redeemed..................... (81,077) (13,596) (217,853) (72,141) (162,342) (19,875)
--------- --------- -------- -------- --------- ---------
Increase in Shares.................. 333,913 160,340 268,661 897,077 216,102 132,117
========= ========= ======== ======== ========= =========
</TABLE>
<TABLE>
<CAPTION>
International High-Yield Bond Income
Portfolio Portfolio Portfolio
------------------------- ----------------------- -------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------ ---------------------- -------------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 239,540 316,262 1,357,028 885,932 192,283 468,320
Shares issued in payment
of dividends..................... 1,313 2,864 136,132 62,670 58,547 65,750
Shares issued in payment
of gain distributions............ 22,955 9,983 16,336 6,382 68,771 18,850
--------- --------- --------- -------- --------- ---------
Total............................... 263,808 329,109 1,509,496 954,984 319,601 552,920
--------- --------- --------- -------- --------- ---------
Shares redeemed..................... (144,243) (108,146) (547,725) (242,875) (342,394) (443,660)
--------- --------- --------- -------- --------- ---------
Increase (Decrease)
in Shares........................ 119,565 220,963 961,771 712,109 (22,793) 109,260
========= ========= ========= ======== ========= =========
<FN>
- -----------------
* For the period May 1, 1996, commencement of operations, to December 31, 1996.
</FN>
</TABLE>
8. Committed Line of Credit --Effective July 23, 1997, the Communications and
Information Portfolio, Frontier Portfolio, Global Growth Opportunities
Portfolio, Global Smaller Companies Portfolio, Global Technology Portfolio,
International Portfolio, and High-Yield Bond Portfolio, collectively, entered
into a $12 million committed line of credit facility with a group of banks.
Borrowings pursuant to the credit facility will be subject to interest at a rate
equal to the federal funds rate plus 0.50% per annum. The participating
Portfolios incur a commitment fee of 0.10% per annum on the unused portion of
the credit facility. The credit facility may be drawn upon only for temporary
purposes and is subject to certain other customary restrictions. The credit
facility commitment will expire one year from the date of the agreement but is
renewable with the consent of the participating banks. To date, the
participating Portfolios have not borrowed from the credit facility.
P-62
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
Financial Highlights
- ------------------------------------------------------------------------------
The Fund's financial highlights are presented below. "Per share operating
performance" data is designed to allow investors to trace the operating
performance, on a per share basis, from a Portfolio's beginning net asset value
to the ending net asset value, so that investors can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amount.
"Total return based on net asset value" measures each Portfolio's performance
assuming that investors purchased shares of a Portfolio at net asset value at
the beginning of the period, invested dividends and capital gains paid at net
asset value, and then sold their shares at the net asset value on the last day
of the period. The total returns exclude the effect of all administration fees
and asset based sales charges associated with variable annuity contracts. The
total returns for periods of less than one year are not annualized.
"Average commission rate paid" represents the average commission paid by the
Portfolios to purchase or sell portfolio securities. It is determined by
dividing the total commission dollars paid by the number of shares purchased and
sold during the period for which commissions were paid. This rate is provided
for all periods beginning January 1, 1996.
<TABLE>
<CAPTION>
Bond Portfolio
-------------------------------------------------------
Year Ended December 31,
-------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year....................... $9.890 $10.440 $9.270 $10.110 $10.660
------- -------- ------- -------- -------
Net investment income.................................... 0.538 0.565 0.605 0.499 0.713
Net realized and unrealized gain (loss) on investments... 0.350 (0.552) 1.171 (0.841) 0.142
------- -------- ------- -------- -------
Increase (Decrease) from Investment Operations........... 0.888 0.013 1.776 (0.342) 0.855
Dividends paid........................................... (0.538) (0.563) (0.606) (0.498) (0.711)
Distributions from net realized gain..................... -- -- -- -- (0.694)
------- -------- ------- -------- -------
Net Increase (Decrease) in Net Asset Value............... 0.350 (0.550) 1.170 (0.840) (0.550)
------- -------- ------- -------- -------
Net Asset Value, End of Year............................. $10.240 $ 9.890 $10.440 $ 9.270 $10.110
======= ======== ======= ======== =======
TOTAL RETURN BASED ON NET ASSET VALUE: 8.98% 0.09% 19.18% (3.39)% 7.98%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets........................... 0.60% 0.60% 0.60% 0.60% 0.74%
Net investment income to average net assets.............. 6.22% 5.97% 6.22% 5.12% 5.41%
Portfolio turnover....................................... 170.12% 199.74% 114.42% 237.23% 33.21%
Net Assets, End of Year (000s omitted)................... $7,232 $5,015 $4,497 $3,606 $3,775
Without management fee waiver and
expense reimbursement:+
Net investment income per share....................... $0.515 $0.545 $0.571 $0.430 $0.675
Ratios:
Expenses to average net assets........................ 0.83% 0.79% 0.99% 1.31% 1.07%
Net investment income to average net assets........... 5.99% 5.78% 5.83% 4.41% 5.08%
<FN>
- --------------------------
+ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-63--
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Financial Highlights (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Capital Portfolio
-----------------------------------------------------
Year Ended December 31,
------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year...................... $16.010 $14.910 $12.700 $14.950 $16.980
------- ------- ------- ------- -------
Net investment income................................... 0.029 0.043 0.048 0.015 0.021
Net realized and unrealized gain (loss) on investments.. 3.350 2.121 3.385 (0.699) 1.928
------- ------- ------- ------- -------
Increase (Decrease) from Investment Operations.......... 3.379 2.164 3.433 (0.684) 1.949
Dividends paid.......................................... (0.028) (0.042) (0.047) (0.018) (0.021)
Distributions from net realized gain.................... (1.261) (1.022) (1.176) (1.548) (3.958)
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value.............. 2.090 1.100 2.210 (2.250) (2.030)
------- ------- ------- ------- -------
Net Asset Value, End of Year............................ $18.100 $16.010 $14.910 $12.700 $14.950
======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: 21.31% 14.51% 27.17% (4.59)% 11.65%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... 0.60% 0.59% 0.60% 0.60% 0.71%
Net investment income to average net assets............. 0.16% 0.29% 0.32% 0.10% 0.09%
Portfolio turnover...................................... 93.97% 88.78% 122.20% 67.39% 65.30%
Average commission rate paid............................ $0.0567 $0.0557
Net Assets, End of Year (000s omitted).................. $20,400 $14,313 $9,294 $5,942 $5,886
Without management fee waiver and
expense reimbursement:+
Net investment income (loss) per share............... $0.026 $0.035 $(0.036) $(0.003)
Ratios:
Expenses to average net assets....................... 0.62% 0.71% 0.96% 0.83%
Net investment income (loss) to average net assets... 0.14% 0.21% (0.26)% (0.03)%
</TABLE>
<TABLE>
<CAPTION>
Cash Management Portfolio
-----------------------------------------------------
Year Ended December 31,
------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year...................... $1.000 $1.000 $1.000 $1.000 $1.000
Net investment income................................... 0.054 0.053 0.055 0.040 0.030
Dividends paid.......................................... (0.054) (0.053) (0.055) (0.040) (0.030)
------ ------ ------ ------ ------
Net Asset Value, End of Year............................ $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
TOTAL RETURN BASED ON NET ASSET VALUE: 5.52% 5.43% 5.60% 4.03% 3.00%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.......................... -- -- -- -- --
Net investment income to average net assets............. 5.39% 5.30% 5.48% 3.98% 2.96%
Net Assets, End of Year (000s omitted).................. $8,635 $9,755 $7,800 $3,230 $3,102
Without management fee waiver and
expense reimbursement:+
Net investment income per share...................... $0.046 $0.047 $0.046 $0.025 $ 0.019
Ratios:
Expenses to average net assets....................... 0.79% 0.63% 0.87% 1.48% 1.07%
Net investment income to average net assets.......... 4.60% 4.67% 4.61% 2.50% 1.89%
<FN>
- --------------------------
+ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-64--
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Portfolio
-------------------------------------------------------
Year Ended December 31,
--------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year....................... $15.920 $15.440 $13.780 $14.980 $15.600
------- ------- ------- ------- -------
Net investment income.................................... 0.328 0.334 0.349 0.365 0.392
Net realized and unrealized gain (loss) on investments... 3.013 2.789 3.400 (0.356) 1.479
------- ------- ------- ------- -------
Increase from Investment Operations...................... 3.341 3.123 3.749 0.009 1.871
Dividends paid........................................... (0.316) (0.336) (0.345) (0.385) (0.394)
Distributions from net realized gain..................... (2.665) (2.307) (1.744) (0.824) (2.097)
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value............... 0.360 0.480 1.660 (1.200) (0.620)
------- ------- ------- ------- -------
Net Asset Value, End of Year............................. $16.280 $15.920 $15.440 $13.780 $14.980
======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: 21.31% 20.08% 27.28% 0.04% 11.94%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets........................... 0.53% 0.53% 0.54% 0.60% 0.55%
Net investment income to average net assets.............. 1.92% 1.99% 2.42% 2.45% 2.10%
Portfolio turnover....................................... 80.13% 50.33% 55.48% 15.29% 10.70%
Average commission rate paid............................. $0.0594 $0.0561
Net Assets, End of Year (000s omitted) .................. $50,737 $37,168 $28,836 $20,168 $21,861
Without management fee waiver and
expense reimbursement:++
Net investment income per share....................... $0.361
Ratios:
Expenses to average net assets........................ 0.62%
Net investment income to average net assets........... 2.43%
</TABLE>
<TABLE>
<CAPTION>
Communications and Information Portfolio
---------------------------------------------------------
10/11/94*
Year Ended December 31, to
----------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 12/31/94
------- ------- ------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Year....................... $14.690 $13.500 $10.440 $10.000
------- ------- ------- -------
Net investment loss...................................... -- -- -- (0.016)
Net realized and unrealized gain on investments.......... 3.049 1.190 4.015 0.456
------ ------- ------- -------
Increase from Investment Operations...................... 3.049 1.190 4.015 0.440
Dividends paid........................................... -- -- -- --
Distributions from net realized gain..................... (4.649) -- (0.955) --
------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value............... (1.600) 1.190 3.060 0.440
------- ------- ------- -------
Net Asset Value, End of Year............................. $13.090 $14.690 $13.500 $10.440
======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: 22.22% 8.81% 38.55% 4.40%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets........................... 0.87% 0.87% 0.95% 0.95%+
Net investment loss to average net assets................ (0.49)% (0.32)% (0.89)% (0.95)%+
Portfolio turnover....................................... 277.14% 167.20% 96.62% --
Average commission rate paid............................. $0.0511 $0.0530
Net Assets, End of Year (000s omitted)................... $87,633 $60,645 $38,442 $495
Without management fee waiver and
expense reimbursement:++
Net investment loss per share......................... $(0.436)
Ratios:
Expenses to average net assets........................ 13.96%+
Net investment loss to average net assets............. (13.96)%+
<FN>
- ---------------------
* Commencement of investment operations.
+ Annualized.
++ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-65 --
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Financial Highlights (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global Growth
Opportunities
Frontier Portfolio Portfolio
---------------------------------------- ------------------
10/11/94* Year 5/1/96**
Year Ended December 31, to Ended to
----------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 12/31/94 12/31/97 12/31/96
------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year....................... $14.980 $13.560 $10.580 $10.000 $ 9.910 $10.000
------- ------- ------- ------- ------- -------
Net investment income (loss)............................. -- 0.001 (0.001) (0.012) 0.006 0.008
Net realized and unrealized gain on investments.......... 2.386 3.220 3.512 0.592 1.799 0.018
Net realized and unrealized loss on
foreign currency transactions......................... -- -- -- -- (0.561) (0.104)
------- ------- ------- ------- ------- -------
Increase (Decrease) from Investment Operations........... 2.386 3.221 3.511 0.580 1.244 (0.078)
Dividends paid........................................... -- -- -- -- -- (0.012)
Distributions from net realized gain..................... (1.586) (1.801) (0.531) -- (0.124) --
------- ------- ------- -------- ------- -------
Net Increase (Decrease) in Net Asset Value............... 0.800 1.420 2.980 0.580 1.120 (0.090)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Year............................. $15.780 $14.980 $13.560 $10.580 $11.030 $ 9.910
======= ======= ======= ======= ======= ========
TOTAL RETURN BASED ON NET ASSET VALUE: .................. 16.33% 23.93% 33.28% 5.80% 12.57% (0.78)%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets........................... 0.89% 0.92% 0.95% 0.95%+ 1.40% 1.40%+
Net investment income (loss) to average net assets....... (0.49)% (0.37)% (0.55)% (0.70)%+ 0.01% 0.37%+
Portfolio turnover....................................... 101.68% 119.74% 106.48% -- 77.85% 12.99%
Average commission rate paid............................. $0.0539 $0.0532 $0.0289 $0.0522
Net Assets, End of Year (000s omitted)................... $42,973 $31,672 $12,476 $169 $5,449 $1,590
Without management fee waiver and
expense reimbursement:++
Net investment loss per share......................... $(0.019) $(1.319) $(0.072) $(0.255)
Ratios:
Expenses to average net assets........................ 1.37% 40.47%+ 2.11% 6.04%+
Net investment loss to average net assets............. (0.97)% (40.22)%+ (0.70)% (4.27)%+
<FN>
- -----------------------
* Commencement of investment operations.
** Commencement of operations.
+ Annualized.
++ The Manager and/or Subadviser, at their discretion, reimbursed expenses
and/or waived management fees for certain periods presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-66--
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Global
Global Smaller Technology
Companies Portfolio Portfolio
--------------------------------- -------------------
10/11/94* Year 5/1/96**
Year Ended December 31, to Ended to
---------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 12/31/94 12/31/97 12/31/96
------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year....................... $12.870 $11.670 $10.310 $10.000 $10.320 $10.000
------- ------- ------- ------- ------- -------
Net investment income (loss)............................. 0.016 0.022 0.051 0.058 0.012 (0.004)
Net realized and unrealized gain on investments.......... 1.166 2.305 2.037 0.266 2.151 0.305
Net realized and unrealized gain (loss) on
foreign currency transactions......................... (0.747) (0.158) (0.301) 0.029 (0.194) 0.099
------- ------- ------- ------- ------- -------
Increase from Investment Operations...................... 0.435 2.169 1.787 0.353 1.969 0.400
Dividends paid........................................... (0.017) (0.018) (0.052) (0.043) (0.012) --
Distributions from net realized gain..................... (0.308) (0.951) (0.375) -- (1.687) (0.080)
------- ------- ------- ------- ------- -------
Net Increase in Net Asset Value.......................... 0.110 1.200 1.360 0.310 0.270 0.320
------- ------- ------- ------- ------- -------
Net Asset Value, End of Year ............................ $12.980 $12.870 $11.670 $10.310 $10.590 $10.320
======= ======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: 3.43% 18.66% 17.38% 3.53% 19.53% 4.01%
RATIOS/SUPPLEMENTAL DATA
Expenses to average net assets........................... 1.40% 1.40% 1.39% 1.20%+ 1.40% 1.40%+
Net investment income to average net assets.............. 0.24% 0.23% 0.64% 3.14%+ 0.12% 0.60%+
Portfolio turnover....................................... 64.81% 62.31% 55.65% -- 167.36% 45.04%
Average commission rate paid............................. $0.0183 $0.0219 $0.0228 $0.0160
Net Assets, End of Year (000s omitted)................... $20,505 $16,876 $4,837 $132 $3,686 $1,364
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share ............... $0.006 $(0.044) $(0.051) $(1.225) $(0.070) $(0.202)
Ratios:
Expenses to average net assets........................ 1.56% 1.90% 3.84% 37.25%+ 2.10% 4.71%+
Net investment income (loss) to average net assets.... 0.08% (0.27)% (1.81)% (32.91)%+ (0.58)% (2.71)%+
<FN>
- ------------------------
* Commencement of investment operations.
** Commencement of operations.
+ Annualized.
++ The Manager and Subadviser, at their discretion, reimbursed expenses and/or
waived management fees for certain periods presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-67--
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Financial Highlights (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International High-Yield Bond
Portfolio Portfolio
---------------------------------------------- ----------------------------
5/3/93* Year Ended 5/1/95*
Year Ended December 31, to December 31, to
----------------------------------- ----------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 12/31/93 1997 1996 12/31/95
------- ------- ------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.......... $12.960 $12.390 $11.340 $11.370 $10.000 $11.190 $10.500 $10.000
------- ------- ------- ------- ------- ------- ------- -------
Net investment income....................... 0.026 0.074 0.154 0.131 0.021 0.908 0.768 0.218
Net realized and unrealized gain (loss)
on investments........................... 2.110 1.124 0.896 (0.306) 1.518 0.780 0.766 0.519
Net realized and unrealized gain (loss) on
foreign currency transactions ........... (1.057) (0.323) 0.236 0.325 (0.099) -- -- --
------- ------- ------- ------ ------- ------- ------- -------
Increase from Investment Operations......... 1.079 0.875 1.286 0.150 1.440 1.688 1.534 0.737
Dividends paid.............................. (0.027) (0.068) (0.151) (0.064) (0.053) (0.900) (0.766) (0.219)
Distributions from net realized gain........ (0.472) (0.237) (0.085) (0.116) (0.017) (0.108) (0.078) (0.018)
------- ------- ------- ------ ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value.. 0.580 0.570 1.050 (0.030) 1.370 0.680 0.690 0.500
------- ------- ------- ------ ------- ------- ------- -------
Net Asset Value, End of Year................ $13.540 $12.960 $12.390 $11.340 $11.370 $11.870 $11.190 $10.500
======= ======= ======= ======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: 8.35% 7.08% 11.34% 1.32% 14.40% 15.09% 14.62% 7.37%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets.............. 1.40% 1.40% 1.35% 1.20% 1.20%+ 0.70% 0.70% 0.70%+
Net investment income to average net assets. 0.43% 0.70% 1.01% 1.17% 1.30%+ 9.61% 9.77% 7.46%+
Portfolio turnover.......................... 89.43% 48.53% 41.40% 47.34% 2.82% 74.54% 117.01% 67.55%
Average commission rate paid................ $0.0214 $0.0191
Net Assets, End of Year (000s omitted)...... $9,182 $7,242 $4,183 $1,776 $648 $23,268 $11,176 $3,009
Without management fee waiver and
expense reimbursement:++
Net investment income (loss) per share... $(0.069) $(0.042) $0.001 $(0.419) $(1.004) $0.897 $0.747 $0.117
Ratios:
Expenses to average net assets........... 2.07% 2.30% 3.40% 6.12% 17.94%+ 0.79% 0.88% 4.38%+
Net investment income (loss) to average
net assets............................. (0.24)% (0.20)% (1.04)% (3.75)% (15.44)%+ 9.52% 9.59% 3.78%+
<FN>
- -----------------------
* Commencement of operations.
+ Annualized.
++ The Manager and/or Subadviser, at their discretion, reimbursed expenses
and/or waived management fees for certain periods presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-68--
<PAGE>
Seligman Portfolios, Inc.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income Portfolio
-------------------------------------------------------
Year Ended December 31,
-------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year....................... $10.520 $10.560 $9.970 $11.380 $11.390
------- ------- ------- ------- -------
Net investment income.................................... 0.556 0.579 0.604 0.689 0.828
Net realized and unrealized gain (loss) on investments... 0.907 0.126 1.187 (1.369) 0.576
------- ------- ------- ------- -------
Increase (Decrease) from Investment Operations........... 1.463 0.705 1.791 (0.680) 1.404
Dividends paid........................................... (0.544) (0.579) (0.604) (0.730) (0.828)
Distributions from net realized gain..................... (0.639) (0.166) (0.597) -- (0.586)
------- ------- ------- ------- -------
Net Increase (Decrease) in Net Asset Value............... 0.280 (0.040) 0.590 (1.410) (0.010)
------- ------- ------- ------- -------
Net Asset Value, End of Year............................. $10.800 $10.520 $10.560 $9.970 $11.380
======= ======= ======= ======= =======
TOTAL RETURN BASED ON NET ASSET VALUE: 14.02% 6.66% 17.98% (5.96)% 12.37%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets........................... 0.60% 0.59% 0.60% 0.60% 0.64%
Net investment income to average net assets.............. 4.71% 5.37% 5.55% 6.34% 6.40%
Portfolio turnover....................................... 96.99% 19.59% 51.22% 29.76% 38.38%
Average commission rate paid............................. $0.0544 $0.0600
Net Assets, End of Year (000s omitted)................... $13,835 $13,717 $12,619 $10,050 $11,220
Without management fee waiver and
expense reimbursement:+
Net investment income per share....................... $0.553 $0.602 $0.670 $0.826
Ratios:
Expenses to average net assets........................ 0.63% 0.62% 0.77% 0.65%
Net investment income to average net assets........... 4.68% 5.53% 6.17% 6.39%
<FN>
- ---------------------------
+The Manager, at its discretion, waived management fees for certain periods
presented.
See Notes to Financial Statements.
</FN>
</TABLE>
--P-69--
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- -------------------------------------------------------------------------------
The Directors and Shareholders,
Seligman Portfolios, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Seligman Portfolios, Inc. (comprising,
respectively, the Seligman Bond Portfolio, Seligman Capital Portfolio, Seligman
Cash Management Portfolio, Seligman Common Stock Portfolio, Seligman
Communications and Information Portfolio, Seligman Frontier Portfolio, Seligman
Henderson Global Growth Opportunities Portfolio, Seligman Henderson Global
Smaller Companies Portfolio, Seligman Henderson Global Technology Portfolio,
Seligman Henderson International Portfolio, Seligman High-Yield Bond Portfolio,
and Seligman Income Portfolio, collectively referred to as the "Fund") as of
December 31, 1997, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. 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 and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1997, by correspondence with the custodians
and brokers. 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 each
of the respective portfolios constituting Seligman Portfolios, Inc. at December
31, 1997, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated periods, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
----------------------
New York, New York
February 6, 1998
-- P-70 --
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Board of Directors
- -------------------------------------------------------------------------------
John R. Galvin 2
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, Raytheon Corporation
Director, USLIFE Corporation
Alice S. Ilchman 3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Chairman, The Rockefeller Foundation
Frank A. McPherson 2
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
John E. Merow
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Industries, Inc.
Betsy S. Michel 2
Trustee, Geraldine R. Dodge Foundation
Chairman of the Board of Trustees, St. George's School
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
Retired Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
Director, Public Service Enterprise Group
James Q. Riordan 3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Richard R. Schmaltz 1
Managing Director,
J. & W. Seligman & Co. Incorporated
Trustee Emeritus, Colby College
Robert L. Shafer 3
Retired Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson 2
Executive Vice President and Director,
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 Emeritus
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
- ----------------------------------
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
- P-71 -
<PAGE>
Seligman Portfolios, Inc.
- -------------------------------------------------------------------------------
Executive Officers
- -------------------------------------------------------------------------------
William C. Morris
Chairman
BrianT.Zino
President
Brian Ashford-Russell
Vice President
Daniel J. Charleston
Vice President
Iain C. Clark
Vice President
Leonard J. Lovito
Vice President
Nitin Mehta
Vice President
Arsen Mrakovcic
Vice President
Charles C. Smith, Jr.
Vice President
Lawrence P. Vogel
Vice President
Paul H. Wick
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
- ------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, New York 10017
Subadviser
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, New York 10017
Custodians
Investors Fiduciary Trust Company
Morgan Stanley Trust Company
General Counsel
Sullivan & Cromwell
Independent Auditors
Ernst & Young LLP
- P-72 -
