<PAGE>
- -------------------------------------------------------------------------------
A N N U A L R E P O R T
- -------------------------------------------------------------------------------
SELIGMAN
PORTFOLIOS,
INC.
[GRAPHIC OMITTED]
December 31, 1998
<PAGE>
-----------------------
SELIGMAN
PORTFOLIOS,
INC.
-----------------------
February 5, 1999
Dear Contract Owner:
J. & W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios, Inc.
(the "Fund"), is pleased to provide the enclosed audited financial statements
and accompanying information for the year ended December 31, 1998.
In 1998, for the eighth straight year, the US economy expanded, with real
domestic growth of 3.9%. Once again, large-cap US stocks responded to this
favorable environment with strong performance. The market, as measured by the
Standard & Poor's 500 Composite Stock Price Index (S&P 500), rose 28.58% -- the
first time in history that this widely watched index returned more than 20% for
four years in a row.
Although 1998 will certainly be recorded as another stellar year for
equities, the market gave investors a bumpy ride along the way. In fact, such
wide market swings haven't been seen since 1987. A number of factors contributed
to this volatility -- some domestic, many international. The global economic
background in 1998 was one of steadily deteriorating conditions as the financial
crisis, originally limited to a few Asian countries, spread throughout other
regions. The global turmoil continued when Russia defaulted on its debt and
devalued its currency, and investors everywhere feared that Brazil and other
Latin American countries would follow.
In addition to high volatility, last year's market was notable for being
extremely narrow, with the exceptional performances of a few stocks distorting
the total picture. In fact, 197 stocks, representing 39% of the S&P 500,
actually lost market value during the last 12 months. Investment results between
market caps were also more widely dispersed than usual. The disparity was almost
unprecedented. For example, the large-capitalization-dominated S&P 500 rose
28.58%, while the Russell 2000 Index of smaller-capitalization stocks actually
declined 2.55%.
International markets began the year with generally strong performances,
fueled by expectations of lower inflation and falling interest rates. Beginning
in mid-July, however, the combination of the Russian debt default, speculative
attacks against emerging market currencies, and a worse-than-expected economic
impact from Asia on the rest of the world led to sharp market corrections. Then,
in October, markets recovered as interest rates were cut in many parts of the
world and a coordinated program of support for the world's financial system was
implemented.
Fixed-income markets posted strong returns for the year but, as in the equity
markets, some segments performed notably better than others. US Treasury bonds,
in particular, benefitted from a confluence of events that drove prices higher
and yields to 30-year lows. US government-backed bonds, which carry the highest
credit quality, were in great demand as the global financial turmoil produced a
"flight to quality" around the world. Further boosting the US government bond
market was the Federal Reserve Board's lowering of the federal-funds rate, and a
federal budget surplus which caused the overall supply of bonds to decrease.
In 1999, we believe gross domestic product (GDP) should slow to about 2.5
percent. We expect a challenging financial market environment with ongoing
economic uncertainties and continued high volatility. Nonetheless, we see
moderately positive returns for the year in line with our lower growth
projections. In addition, low inflation, falling or stable interest rates,
improving prospects in Asia, and a Federal Reserve leading the fight against
global recession should all provide support for US markets. We expect that the
equity market, which began to show signs of broadening in the fourth quarter of
1998, will continue to broaden in 1999. If this trend continues, small- and
mid-cap stocks should begin to benefit from the favorable equity environment to
a greater extent.
Thank you for your continued support of Seligman Portfolios, Inc. We look
forward to continuing to serve your investment needs in 1999.
Respectfully,
/S/ William C. Morris
---------------------
William C. Morris
Chairman
J. & W. Seligman & Co. Incorporated
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OVERVIEW
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
PRINCIPAL AMOUNT
OR SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
SELIGMAN BOND PORTFOLIO
US GOVERNMENT AGENCIES
Aid-Israel 0%, 11/15/2010......... $500,000 $500,000
Federal National Mortgage
Association:
5.795%, 1/1/2009................ 150,000 150,000
6%, 12/1/2028................... 200,000 200,000
Government National Mortgage
Association:
6 1/2%, 12/15/2028.............. 200,000 200,000
6%, 12/20/2028.................. 200,000 200,000
CORPORATE BONDS
Cardinal Health 6 1/4%, 7/15/2008. 100,000 100,000
First Data 5.80%, 12/15/2008...... 100,000 100,000
Sprint Capital 6 1/8%, 11/15/2008. 200,000 200,000
PRINCIPAL AMOUNT
OR SHARES
-------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
US GOVERNMENT AGENCIES
Government National Mortgage
Association 6 1/2%, 4/15/2028... $1,008,064 --
CORPORATE BONDS
Equifax 6.30%, 7/1/2005........... 100,000 $100,000
SELIGMAN CAPITAL PORTFOLIO
COMMON STOCKS
Applied Power (Class A)........... 16,900 shs. 16,900 shs.
CNF Transportation................ 10,900 10,900
Deluxe............................ 13,100 13,100
Electronic Arts................... 10,400 10,400
General Dynamics.................. 7,100 7,100
Infinity Broadcasting (Class A)... 23,000 23,000
Office Depot...................... 18,700 18,700
Pall.............................. 19,900 19,900
Service Corp. International....... 10,600 10,600
VERITAS Software.................. 9,400 9,400
COMMON STOCKS
AutoZone.......................... 17,500 shs. --
BMC Software...................... 8,000 --
Budget Group (Class A)............ 15,200 --
Gartner Group (Class A)........... 14,300 --
Jones Apparel Group............... 15,200 --
Life Re........................... 3,600 --
Microchip Technology.............. 12,200 --
Proffitt's........................ 11,000 --
Rayovac........................... 8,700 12,200 shs.
Schwab (Charles).................. 11,600 7,500
SELIGMAN COMMON STOCK PORTFOLIO
COMMON STOCKS
AT&T.............................. 10,200 15,900
BP Amoco (ADRs)................... 4,600 11,200
Chubb............................. 9,500 9,500
Crown Cork & Seal................. 17,500 17,500
DQE............................... 15,000 15,000
Electronic Data Systems........... 14,300 14,300
Ford Motor........................ 11,800 11,800
Harris............................ 16,000 16,000
Morgan (J.P.)..................... 4,600 4,600
Sonat............................. 19,300 19,300
COMMON STOCKS
ACE............................... 13,700 --
Edison International.............. 22,900 --
General Electric.................. 6,500 17,800
Harley-Davidson................... 18,200 --
Marsh & McLennan.................. 11,850 --
Mobil............................. 8,900 9,600
Penney (J.C.)..................... 11,200 --
St. Paul Companies................ 16,900 --
Texaco............................ 11,000 --
US WEST Communications Group...... 13,900 --
- --------------
See footnotes on page P-9.
P-1
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OVERVIEW (continued)
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
SELIGMAN COMMUNICATIONS
AND INFORMATION PORTFOLIO
COMMON STOCKS
Advanced Micro Devices............ 60,200 60,200
Applied Materials................. 26,600 26,600
C-Cube Microsystems............... 52,100 52,100
Check Point Software Technologies. 60,600 60,600
Electronic Arts................... 31,900 77,400
Fox Entertainment Group (Class A). 50,300 50,300
Intel............................. 20,500 20,500
MediaOne Group.................... 40,900 50,700
Microsoft......................... 16,600 20,500
Tele-Communications (Series A)
TCI Ventures Group.............. 34,200 53,500
SHARES
-------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
COMMON STOCKS
American Power Conversion......... 37,700 1,700
Ascend Communications............. 23,300 --
Cisco Systems..................... 15,500 2,000
Citrix Systems.................... 20,700 --
Compuware......................... 16,700 20,000
EMC............................... 76,600 58,200
Excel Switching................... 50,000 --
International Business Machines... 9,100 --
Novellus Systems.................. 42,400 --
Time Warner....................... 18,900 --
SELIGMAN FRONTIER PORTFOLIO
COMMON STOCKS
Aspect Telecommunications......... 20,000 20,000
Casella Waste Systems............. 15,200 15,200
Keystone Automotive Industries.... 16,500 16,500
Metamor Worldwide................. 15,600 25,600
Premier Parks..................... 30,100 38,100
Primark........................... 12,300 19,400
Sanmina........................... 12,000 12,000
Henry Schein...................... 8,400 8,400
Superior Services................. 16,300 16,300
Transaction Systems Architects
(Class A)....................... 11,600 11,600
COMMON STOCKS
Barnes & Noble.................... 15,400 --
BISYS Group....................... 12,800 --
Ceridian.......................... 14,500 5,400
Duane Reade....................... 13,600 --
Equity Corporation................ 17,100 --
First Commonwealth Financial...... 71,700 --
Hearst-Argyle Television (Class A) 14,400 3,981
Jacor Communications.............. 13,350 --
Petersen Companies (Class A)...... 16,700 --
Waters............................ 7,300 --
- -------------
See footnotes on page P-9
P-2
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL
GROWTH OPPORTUNITIES PORTFOLIO
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
COMMON STOCKS
AES.............................. 2,700 2,700
Azkoyen.......................... 2,620 2,620
Banca Nazionale del Lavoro....... 38,000 38,000
CBS.............................. 2,500 2,500
CNP Assurances................... 3,940 3,940
Equant........................... 1,790 1,790
MCI WorldCom..................... 1,700 1,700
Motorola......................... 1,400 1,400
Newell........................... 2,000 2,000
Tyco International............... 2,000 2,000
SHARES
--------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
COMMON STOCKS
Dayton Hudson.................... 2,600 --
Hewlett-Packard.................. 1,200 --
Koninklijke KNP BT............... 2,615 --
Lufthansa........................ 5,300 --
MBNA............................. 3,413 (1) --
Meitec........................... 2,000 --
Nokia (Series A)................. 775 2,125
Pfizer........................... 600 700
Sairgroup........................ 400 --
Secom............................ 1,000 --
DIVERSIFICATION OF NET ASSETS*
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
----------------------
ISSUES COST VALUE 1998 1997
------ ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Aerospace........................................... 1 $ 50,559 $ 51,608 0.6 1.0
Automotive and Related.............................. 3 226,116 280,884 3.2 2.9
Business Goods and Services......................... 7 517,195 789,236 9.1 6.8
Capital Goods....................................... 1 33,259 41,038 0.5 --
Commerical Services................................. 1 17,004 17,015 0.2 --
Computer and Technology Related..................... 6 289,391 532,601 6.2 9.6
Construction and Property........................... 2 137,599 178,931 2.1 1.7
Consumer Goods and Services......................... 9 583,174 747,092 8.6 8.9
Diversified......................................... 2 203,453 283,556 3.3 3.3
Drugs and Health Care............................... 11 747,424 1,006,302 11.6 11.0
Electric and Gas Utilities.......................... 2 146,635 143,863 1.7 0.6
Electronics......................................... 5 330,533 370,945 4.3 3.3
Electronics Capital Equipment....................... 1 53,382 91,605 1.0 --
Entertainment and Leisure........................... 6 407,060 426,472 4.9 6.2
Financial Services.................................. 8 480,620 623,114 7.2 9.0
Industrial Goods and Services....................... 1 80,113 82,830 1.0 2.8
Manufacturing and Industrial Equipment.............. 1 91,885 94,142 1.1 0.9
Media............................................... 2 165,669 176,334 2.0 --
Publishing.......................................... -- -- -- -- 1.3
Resources........................................... 1 38,547 48,067 0.6 4.3
Restaurants......................................... 1 100,508 106,791 1.2 0.9
Retailing........................................... 6 493,171 646,104 7.5 2.9
Support Services.................................... 1 28,746 15,683 0.2 1.9
Telecommunications.................................. 13 705,573 985,956 11.4 8.1
Tobacco............................................. 2 191,357 286,998 3.3 1.9
Transportation...................................... 1 62,487 100,261 1.2 4.5
--- ---------- ---------- ----- -----
94 6,181,460 8,127,428 94.0 93.8
Other Assets Less Liabilities....................... -- 515,867 515,867 6.0 6.2
--- ---------- ---------- ----- -----
NET ASSETS.......................................... 94 $6,697,327 $8,643,295 100.0 100.0
=== ========== ========== ===== =====
</TABLE>
- --------------
See footnotes on page P-9.
P-3
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OVERVIEW (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL
SMALLER COMPANIES PORTFOLIO
DIVERSIFICATION OF NET ASSETS*
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
----------------------
ISSUES COST VALUE 1998 1997
------ ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Advertising...................................... 2 $ 211,674 $ 252,145 1.2 2.0
Automotive Parts Manufacturing................... 7 306,843 316,866 1.5 2.7
Building Materials............................... 2 237,355 155,942 0.7 1.4
Business Services................................ 23 2,068,653 2,411,983 11.6 10.1
Capital Goods.................................... 6 430,105 366,284 1.8 2.3
Chemicals........................................ 4 226,750 232,049 1.1 1.2
Computer Software................................ 10 697,965 1,112,982 5.3 5.1
Construction and Property........................ 18 1,304,347 1,258,732 6.0 6.3
Consumer Goods and Services...................... 26 1,582,670 1,827,101 8.8 6.8
Distributors..................................... 2 104,529 96,728 0.5 0.1
Drugs and Health Care............................ 21 1,472,654 1,639,746 7.9 6.5
Educational Services............................. 1 100,538 28,500 0.1 --
Electric Utilities............................... 3 316,252 391,958 1.9 0.2
Electrical Distribution.......................... 1 47,169 68,983 0.3 0.6
Electronics...................................... 12 655,443 598,790 2.9 5.8
Energy........................................... 2 176,070 143,073 0.7 0.9
Financial Services............................... 14 578,216 594,355 2.9 4.6
Independent Power Producers...................... -- -- -- -- 1.2
Industrial Goods and Services.................... 7 508,390 680,638 3.3 3.1
Leisure and Hotels............................... 5 420,833 468,434 2.3 1.5
Manufacturing.................................... 22 1,363,232 1,194,623 5.7 7.6
Media............................................ 14 1,282,376 1,467,441 7.1 5.3
Medical Products and Technology.................. 12 716,241 751,992 3.6 1.9
Metals........................................... 3 104,954 54,832 0.3 0.9
Paper and Printing............................... 2 97,020 59,763 0.3 0.5
Resources........................................ 2 88,896 71,078 0.3 --
Restaurants...................................... 3 171,370 306,658 1.5 1.4
Retailing........................................ 18 1,173,143 1,161,786 5.6 4.1
Semiconductors................................... 1 55,018 81,575 0.4 --
Support Services................................. 5 313,540 460,898 2.2 1.6
Technology....................................... 13 897,722 1,090,005 5.2 3.7
Telecommunications............................... 7 494,146 448,920 2.2 1.6
Transportation................................... 7 383,745 505,853 2.4 2.6
Veterinary Products.............................. 2 229,816 215,656 1.0 0.5
Miscellaneous.................................... 1 22,325 23,648 0.1 0.2
--- ----------- ----------- ----- -----
278 18,840,000 20,540,017 98.7 94.3
Other Assets Less Liabilities.................... -- 274,045 274,045 1.3 5.7
--- ----------- ----------- ----- -----
NET ASSETS....................................... 278 $19,114,045 $20,814,062 100.0 100.0
=== =========== =========== ===== =====
</TABLE>
- ------------------
See footnotes on page P-9.
P-4
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL
SMALLER COMPANIES PORTFOLIO (continued)
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
SHARES
-------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
COMMON STOCKS
Hawesko Holding................... 2,442 2,442
Kaba Holding...................... 242 242
Metamor Worldwide................. 4,700 6,900
Nobel Biocare..................... 11,294 11,294
Premier Parks..................... 8,400 10,000
Primark........................... 6,100 6,100
Superior Services................. 5,100 5,100
Tandberg Television............... 22,300 24,900
TelePizza......................... 13,044 13,044
Transaction Systems Architects
(Class A)....................... 3,600 3,600
SHARES
---------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
COMMON STOCKS
BISYS Group....................... 2,900 --
Canandaigua Brands (Class A)...... 2,615 --
Ceridian.......................... 2,700 1,200
CMG............................... 6,000 12,000
Duane Reade....................... 3,000 --
F. I. Group....................... 30,000 55,176
Jacor Communications.............. 2,900 --
Montupet.......................... 4,339 2,101
Tamro (Series A).................. 30,000 --
Telinfo........................... 2,350 --
- -------------
See footnotes on page P-9.
P-5
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OVERVIEW (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL
TECHNOLOGY PORTFOLIO
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
SHARES
----------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
COMMON STOCKS
Altran Technologies............ 350 350
DII Group...................... 3,500 3,500
Druid.......................... 3,500 3,500
Elec & Eltek International
Holdings.................... 10,000 150,000
Koninklijke (Royal) Philips
Electronics.................. 1,800 1,800
Microsoft...................... 900 900
Murata Manufacturing........... 2,000 2,000
SMART Modular Technology....... 2,200 2,200
STMicroelectronics............. 1,200 1,200
Tele-Communications (Series A)
TCI Ventures Group........... 1,200 1,200
SHARES
----------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
COMMON STOCKS
American Power Conversion...... 1,400 --
Cable & Wireless............... 6,000 --
ECI Telecommunications......... 1,500 1,500
EMC............................ 1,300 2,000
L.M. Ericsson Telefon (Series B) 2,900 --
Flextronics International...... 1,000 --
KLA-Tencor..................... 1,300 --
Maxim Integrated Products...... 1,500 900
Novellus Systems............... 2,300 --
Pharmacia & Upjohn............. 920 --
DIVERSIFICATION OF NET ASSETS*
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
----------------------
ISSUES COST VALUE 1998 1997
------ ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Computer and Business Services......................... 11 $ 483,955 $ 684,579 11.2 13.7
Computer Hardware/Peripherals.......................... 8 473,456 735,773 12.0 10.3
Computer Software...................................... 24 1,190,028 1,388,085 22.7 15.0
Contract Manufacturing/Circuit Boards.................. 3 150,195 204,719 3.3 --
Distributors........................................... 2 85,442 50,427 0.8 1.3
Electronics............................................ 11 617,824 717,300 11.7 9.5
Electronics Capital Equipment.......................... 6 219,812 263,780 4.3 8.9
Machinery and Equipment................................ 3 116,534 146,027 2.4 --
Media.................................................. 3 147,314 166,706 2.7 1.6
Medical Products and Technology........................ 6 263,929 254,630 4.2 4.2
Networking/Communications Infrastructure............... 5 177,025 244,728 4.0 6.7
Semiconductors......................................... 9 269,688 333,321 5.4 5.3
Telecommunications..................................... 10 351,836 511,510 8.3 3.8
Miscellaneous.......................................... 1 46,045 38,459 0.6 6.1
--- ---------- ---------- ----- -----
102 4,593,083 5,740,044 93.6 86.4
Other Assets Less Liabilities.......................... -- 389,927 389,927 6.4 13.6
--- ---------- ---------- ----- -----
NET ASSETS............................................. 102 $4,983,010 $6,129,971 100.0 100.0
=== ========== ========== ===== =====
</TABLE>
- ---------------------
See footnotes on page P-9.
P-6
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON
INTERNATIONAL PORTFOLIO
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
COMMON STOCKS
Corporacion Bancaria de
Espana Argentaria.............. 6,186 6,186
Credito Italiano................. 21,475 21,475
Hoechst.......................... 2,519 2,519
Istituto Nazionale delle
Assicurazioni.................. 40,188 44,756
RWE.............................. 2,625 2,625
Siemens.......................... 1,678 1,678
Suez Lyonnaise des Eaux.......... 761 761
TOTAL............................ 1,148 1,148
Unilever......................... 1,814 1,814
Valeo............................ 1,494 1,494
SHARES
--------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
COMMON STOCKS
Accor............................ 664 --
Bayer............................ 2,799 --
Bayerische Motoren Werke "BMW"... 119 --
Carrefour Supermarche............ 204 --
CS Holdings...................... 846 --
Deutsche Bank.................... 1,721 --
Lufthansa........................ 6,388 --
Mitsui........................... 45,000 5,000
MOL Magyar Olaj-es Gazipari
(GDRs)......................... 4,400 --
Schneider........................ 1,408 --
DIVERSIFICATION OF NET ASSETS*
DECEMBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
DECEMBER 31,
----------------------
ISSUES COST VALUE 1998 1997
------ ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Automotive and Related................................. 3 $ 202,659 $ 207,920 2.1 --
Banking................................................ 12 954.810 1,245,952 12.6 9.6
Building Materials..................................... -- -- -- -- 0.5
Business Services...................................... 2 51,433 48,204 0.5 0.7
Chemicals.............................................. 4 247,379 219,846 2.2 4.6
Construction and Property.............................. 4 356,162 455,406 4.6 2.7
Consumer Products...................................... 7 493,301 641,441 6.5 0.8
Distributors........................................... -- -- -- -- --
Electronics............................................ 4 145,624 170,471 1.7 2.1
Entertainment and Leisure.............................. 1 133,373 185,695 1.9 --
Financial Services..................................... 6 235,503 271,241 2.7 2.5
Health and Household................................... 6 562,428 681,701 6.9 7.1
Industrial Goods and Services.......................... 7 394,076 617,532 6.2 6.3
Insurance.............................................. 5 479,278 813,187 8.2 5.6
Leisure and Hotels..................................... -- -- -- -- 3.2
Manufacturing.......................................... 4 335,229 336,127 3.4 4.6
Media.................................................. 1 79,894 120,721 1.2 4.0
Metals................................................. 1 5,199 4,734 0.1 2.3
Resources.............................................. 5 621,217 688,731 7.0 9.5
Restaurants............................................ -- -- -- -- 0.2
Retailing.............................................. 10 704,195 838,461 8.5 5.2
Telecommunications..................................... 13 931,282 1,227,761 12.4 11.3
Tobacco................................................ 2 91,939 134,946 1.4 2.0
Transportation......................................... 3 197,577 301,745 3.1 3.6
Utilities.............................................. 4 400,076 449,698 4.5 5.7
Miscellaneous.......................................... 2 25,642 19,625 0.2 0.2
--- ---------- ---------- ----- -----
106 7,648,276 9,681,145 97.9 94.3
Other Assets Less Liabilities.......................... -- 211,684 211,684 2.1 5.7
--- ---------- ---------- ----- -----
NET ASSETS............................................. 106 $7,859,960 $9,892,829 100.0 100.0
=== ========== ========== ===== =====
</TABLE>
- -----------------
See footnotes on page P-9.
P-7
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIO OVERVIEW (continued)
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
PRINCIPAL AMOUNT
OR SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
CORPORATE BONDS
Advanced Micro Devices
11%, 8/1/2003................ $125,000 $375,000
ALARIS Medical
0% (11 1/8%), 8/1/2008....... 300,000 300,000
B&G Foods 9 5/8%, 8/31/2007..... 120,000 120,000
Centennial Cellular
10 3/4%, 12/15/2008.......... 200,000 200,000
Golden Sky Systems
12 3/8%, 8/1/2006............ 325,000 325,000
Metrocall 11%, 9/15/2008........ 190,000 240,000
Price Communications
Cellular Holdings
11 1/4%, 8/15/2008........... 190,000 190,000
Sun Healthcare Group
9 1/2%, 7/1/2007............. 130,000 280,000
Verio 11 1/4%, 12/1/2008........ 140,000 140,000
PREFERRED STOCKS
Crown Castle International 12 3/4% 155 shs. 155 shs.
PRINCIPAL AMOUNT
OR SHARES
--------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/98
- ----------- -------- --------
CORPORATE BONDS
Centennial Cellular
10 1/8%, 5/15/2005........... $125,000 --
Clearview Cinema Group
10 7/8%, 6/1/2008............ 125,000 --
Diamond Triumph Automotive
9 1/4%, 4/1/2008............. 115,000 $ 60,000
ITC DeltaCom 11%, 6/1/2007...... 100,000 --
Jitney Jungle Stores
12%, 3/1/2006................ 75,000 150,000
Premier Parks 12%, 8/15/2003.... 100,000 --
Premier Parks
0% (10%), 4/1/2008........... 175,000 --
Ryder TRS 10%, 12/1/2006........ 150,000 --
Sprint Spectrum 11%, 8/15/2006.. 200,000 --
Unisys 12%, 4/15/2003........... 75,000 175,000
- --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
CORPORATE BONDS
GMAC 6 1/2%, 12/15/2005......... $200,000 $200,000
Heller Financial
5 7/8%, 11/1/2000............ 200,000 200,000
International Business
Machines 5.37%, 9/22/2003.... 200,000 200,000
Sprint Capital 6 1/8%, 11/15/2008 200,000 200,000
US GOVERNMENT AGENCY SECURITIES
US Government Title XI
(Bay Transportation)
7.30%, 6/1/2021.............. 200,000 200,000
FHLMC Gold
5 1/2%, 7/1/2013............. 297,919 297,919
Federal National Mortgage
Association:
5.90%, 6/19/2003............. 300,000 300,000
6.35%, 5/18/2005............. 300,000 300,000
5.795%, 1/1/2009............. 200,000 200,000
Government National Mortgage
Association
6 1/2%, 12/15/2028........... 200,000 200,000
COMMON STOCKS
Avon Products................... 1,700 shs. --
General Dynamics................ 2,300 1,500 shs.
Marsh & McLennan................ 2,250 --
Penney (J.C.)................... 2,300 --
St. Paul Companies.............. 2,600 --
Texaco.......................... 3,600 --
CORPORATE BONDS
Federated Department Stores
10%, 2/15/2001............... $500,000 --
US GOVERNMENT SECURITIES
US Treasury Notes:
6 1/4%, 6/30/2002............ 200,000 $300,000
5 3/4%, 11/30/2002........... 300,000 --
6 5/8%, 5/15/2007............ 500,000 500,000
- ---------------
See footnotes on page P-9.
P-8
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES
DURING THE SIX MONTHS ENDED DECEMBER 31, 1998
SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/98
- --------- -------- --------
SELIGMAN LARGE-CAP VALUE PORTFOLIO
COMMON STOCKS
Bristol-Myers Squibb.......... 1,100 1,100
Crown Cork & Seal............. 2,900 3,400
The Equitable Companies....... 2,100 2,700
Fannie Mae.................... 1,600 1,600
Georgia-Pacific Group......... 1,700 2,350
Goodrich (B.F.)............... 4,300 5,000
Penney (J.C.)................. 2,400 2,750
St. Paul Companies............ 3,000 3,000
Sears, Roebuck................ 3,400 4,000
United Healthcare............. 3,500 3,500
SELIGMAN SMALL-CAP VALUE PORTFOLIO
COMMON STOCKS
ABC Rail Products............. 7,000 7,000
AMRESCO....................... 10,000 10,000
Applied Extrusion
Technologies............... 10,000 10,000
Bay View Capital.............. 3,200 3,200
Lamson & Sessions............. 11,500 15,500
Marine Drilling............... 7,000 8,800
Stage Stores.................. 7,500 7,500
Stewart & Stevenson
Services................... 7,700 9,700
True North Communications..... 2,500 3,500
Windmere-Durable Holdings..... 13,500 13,500
- -------------
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
* "Diversification of Net Assets" is included for the Seligman Henderson
Portfolios because their portfolio holdings are listed by country rather
than by industry in the "Portfolios of Investments."
(1) Includes 1,138 shares received as a result of a 3-for-2 stock split.
(2) Includes 70,980 shares received as a result of a 6-for-1 stock split.
P-9
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW
- --------------------------------------------------------------------------------
The following charts compare a $10,000 hypothetical investment made in each
of Portfolios of Seligman Portfolios, Inc. (with the exception of Seligman Cash
Management Portfolio), for the 10-year period ended December 31, 1998, or since
inception through December 31, 1998, if less than 10 years, 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.
AVERAGE ANNUAL TOTAL RETURNS+
One Yr. Five Yrs. Ten Yrs.
Seligman Bond Portfolio 8.20% 6.33% 7.43%
Lehman Brothers
Government Bond Index 9.85 7.19 9.17
Lipper Corporate Debt BBB-Rated
Funds Average 6.45 7.07 9.12
Lipper
Seligman Lehman Bros. Corporate Debt
Bond Government BBB Rated
Date Portfolio Bond Index Funds Average
12/31/1988 10000 10000 10000
03/31/1989 10020 10106 10130
06/30/1989 10564 10919 10755
09/30/1989 10584 11009 10809
12/31/1989 10870 11423 10973
03/31/1990 10689 11281 10761
06/30/1990 11008 11676 11115
09/30/1990 11051 11773 10997
12/31/1990 11514 12420 11412
03/31/1991 11805 12689 11903
06/30/1991 11973 12860 12163
09/30/1991 12600 13593 12891
12/31/1991 13219 14322 13564
03/31/1992 12990 14071 13573
06/30/1992 13351 14629 14115
09/30/1992 13940 15351 14825
12/31/1992 13958 15357 14834
03/31/1993 14403 16052 15679
06/30/1993 14731 16515 16264
09/30/1993 15097 17052 16882
12/31/1993 15072 16994 17000
03/31/1994 14640 16483 16379
06/30/1994 14476 16295 16012
09/30/1994 14595 16363 16146
12/31/1994 14562 16420 16123
03/31/1995 15064 17194 16893
06/30/1995 16101 18260 18205
09/30/1995 16431 18583 18656
12/31/1995 17355 19432 19566
03/31/1996 16773 18993 19122
06/30/1996 16707 19084 19215
09/30/1996 16873 19405 19650
12/31/1996 17371 19972 20390
03/31/1997 17248 19810 20272
06/30/1997 17810 20497 21114
09/30/1997 18372 21184 21932
12/31/1997 18932 21887 22475
03/31/1998 19117 22218 22861
06/30/1998 19653 22804 23330
09/30/1998 20540 24065 23756
12/31/1998 20485 24046 23925
Global financial turmoil throughout 1998 had investors throughout the world
pursuing the perceived safety of the highest credit quality securities -- US
Treasury bonds. At the same time, the Federal Reserve Board lowered the
federal-funds rate while a federal budget surplus caused the overall supply of
bonds to decrease, as the government needed less paper to finance spending. This
combination of factors drove US Treasury yields to 30-year lows, which was
positive for the Portfolio. The long bond began the year with a yield of 5.92%,
and fell to a low of 4.70% before moving back up to close the year at 5.09%.
During the year, as the spread between Treasuries and agency securities
widened, we increased the Portfolio's exposure to agencies to pursue additional
yield. As the year progressed, we reduced our exposure to mortgage-backed
securities, selling higher-coupon securities as concerns over prepayments in a
falling-interest-rate environment made other areas more attractive. This
strategy was successful; however, even our reduced exposure placed a slight drag
on performance in the third quarter as the flight to Treasuries hurt all other
types of bonds.
Going forward, we may shorten the Portfolio's duration as the rewards of
maintaining a longer duration become less compelling. The Portfolio's duration
is currently about 6.4 years, which is slightly longer than that of our
benchmark, the Lehman Brothers Government Bond Index. In the coming year,
ongoing global problems and the continuing disappearance of the US budget
deficit should combine to keep supply low and demand high, a positive scenario
for the Portfolio. In addition, we will continue to seek opportunities in
non-Treasury securities to enhance the Portfolio's yield and total return.
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.
Last year's economic environment of subdued inflation, low interest rates,
and strong consumer demand pro vided a favorable backdrop for mid-capitalization
(between $1 billion and $10 billion in market value) growth stocks. However,
ongoing concerns regarding global financial problems produced a "flight to
quality" that favored larger-cap stocks. This bias hurt the performance of
small- and mid-cap stocks, despite their attractive fundamentals. However, in
the fourth quarter, the market began to broaden to include a wider range of
market caps -- a favorable development for the Portfolio.
AVERAGE ANNUAL TOTAL RETURNS+
One Yr. Five Yrs. Ten Yrs.
Seligman Capital Portfolio 22.19% 15.54% 15.98%
Lipper Mid Cap Funds Average 11.37 15.44 16.51
Russell Midcap Growth Index 17.86 17.33 17.30
Lipper Rusell
Seligman Mid Cap MidCap
Capital Funds Growth
Date Portfolio Average Index
12/31/1988 10000 10000 10000
03/31/1989 10179 10766 10631
06/30/1989 10775 11699 11675
09/30/1989 11968 12997 13072
12/31/1989 11647 12780 13148
03/31/1990 11276 12654 12685
06/30/1990 12639 13670 13771
09/30/1990 9662 11033 10984
12/31/1990 11276 12149 12473
03/31/1991 13516 14774 15352
06/30/1991 13696 14650 15114
09/30/1991 15363 15977 16354
12/31/1991 17935 17645 18341
03/31/1992 16742 17705 17781
06/30/1992 15508 16671 16954
09/30/1992 16691 17247 17862
12/31/1992 19153 19593 19937
03/31/1993 19785 19948 20117
06/30/1993 19435 20441 20119
09/30/1993 20721 21955 21475
12/31/1993 21385 22484 22168
03/31/1994 20713 21789 21481
06/30/1994 18896 20695 20536
09/30/1994 20613 22369 21994
12/31/1994 20403 22213 21688
03/31/1995 21672 23770 24033
06/30/1995 22974 25853 25962
09/30/1995 25046 28614 28520
12/31/1995 25947 29094 29056
03/31/1996 27687 30869 30930
06/30/1996 29584 32510 32087
09/30/1996 30297 33530 33178
12/31/1996 29712 34367 34137
03/31/1997 28525 32336 32891
06/30/1997 32422 37384 37732
09/30/1997 36227 42695 43011
12/31/1997 36043 41394 41829
03/31/1998 40066 46420 46823
06/30/1998 41061 45780 46795
09/30/1998 33136 37507 38985
12/31/1998 44040 46099 49304
- -----------
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-20.
P-10
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
Technology, telecommunication, and consumer-cyclical companies had a year of
strong earnings, which translated into solid returns for the Portfolio. In
technology, anything Internet-related performed extremely well. While we did not
own any pure-play Internet companies -- due to their astronomical valuations and
lack of earnings -- we nonetheless benefited from the Internet boom as many of
our technology holdings are involved in building and maintaining the
infrastructure of the Internet.
The Portfolio's exposure to industrial companies hurt overall performance.
Global deflation in commodity prices, along with fallout from the Asian
Financial crisis, negatively impacted this sector. Although none of our
industrial holdings had direct exposure to Asia, many of their customers did and
thus were hurt indirectly.
Going into 1999, conditions appear positive for the Portfolio. Valuations for
many quality mid-cap stocks are attractive, especially relative to the
larger-cap stocks whose prices were driven up during last year's narrow market
run-up. If the market continues to broaden -- a trend that we began to see in
the fourth quarter of 1998 -- the mid-cap stocks held by the Portfolio would
benefit. In addition, we believe that, like last year, companies that can either
meet or surpass earnings estimates will be rewarded, while companies that fall
short will be punished severely. This is another positive for the Portfolio,
which looks for companies with the potential for positive earnings surprises. As
1999 begins, we believe that the areas of broadcasting and advertising,
telecommunications, and specialty retailers have good prospects for such
earnings surprises. Finally, we see the biggest risks to the US market in 1999
coming from abroad. The Portfolio, however, should be largely insulated from
this because the mid-cap companies in the Portfolio are domestic in nature,
relying little on international markets for earnings growth.
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.
AVERAGE ANNUAL TOTAL RETURNS+
One Yr. Five Yrs. Ten Yrs.
Seligman Common Stock Portfolio 24.16% 18.16% 16.55%
Lipper Growth & Income Funds Average 15.32 18.32 15.76
S&P 500 28.58 24.06 19.21
Seligman Lipper Growth
Common & Income
Stock Funds
Date Portfolio Average S&P 500
12/31/1988 10000 10000 10000
03/31/1989 10394 10644 10709
06/30/1989 11025 11396 11655
09/30/1989 12099 12387 12903
12/31/1989 12411 12382 13169
03/31/1990 12300 12074 12772
06/30/1990 13079 12691 13576
09/30/1990 10771 11013 11710
12/31/1990 12020 11825 12760
03/31/1991 14169 13511 14614
06/30/1991 14034 13485 14580
09/30/1991 15010 14238 15360
12/31/1991 16006 15254 16647
03/31/1992 16311 15271 16226
06/30/1992 16180 15317 16534
09/30/1992 16843 15692 17055
12/31/1992 17949 16639 17913
03/31/1993 18593 17426 18696
06/30/1993 18789 17587 18787
09/30/1993 19260 18207 19272
12/31/1993 20092 18641 19719
03/31/1994 19274 18064 18972
06/30/1994 19381 18006 19051
09/30/1994 20360 18768 19983
12/31/1994 20101 18485 19979
03/31/1995 21545 19990 21925
06/30/1995 22901 21593 24019
09/30/1995 24331 23178 25928
12/31/1995 25583 24309 27489
03/31/1996 27339 25730 28965
06/30/1996 28582 26619 30266
09/30/1996 29129 27408 31201
12/31/1996 30719 29502 33803
03/31/1997 31067 29844 34709
06/30/1997 35022 34142 40770
09/30/1997 37666 37193 43823
12/31/1997 37267 37482 45082
03/31/1998 41570 41854 51371
06/30/1998 42166 41947 53066
09/30/1998 38846 36706 47786
12/31/1998 46269 43224 57964
In 1998, the US economy expanded for the eighth consecutive year. Low
inflation, continued corporate earnings growth, and a benign interest rate
environment combined to propel US stocks higher -- especially the largest, most
liquid names, as investors tried to insulate themselves from global financial
turmoil. The Portfolio, which generally invests in large-cap stocks, benefited
from this year-long trend.
The Portfolio remains broadly diversified among industry groups and
individual holdings; however, we have reduced our number of holdings to focus on
companies with stable earnings and dividend growth, which are selling at
reasonable valuations relative to their industries. This approach was positive
for the Portfolio during last summer's market downturn since it led us to
underweight many excessively valued large-capitalization stocks, which were hit
the hardest during that difficult environment.
During the year, we increased our exposure to technology, and by year-end the
industry represented 15% of the Portfolio. The group rallied in the fourth
quarter, allowing these holdings to contribute positively to absolute
performance; however, relative to the S&P 500 we lost some ground, since our
weighting was slightly less than the 17% weighting of the Index. In addition to
our technology holdings, the Portfolio benefited from our telecommunications and
health care holdings.
The weakest area of the Portfolio were cyclical stocks. While we were
generally underweight in these issues, they did negatively impact results. Our
energy stocks also adversely affected our returns. Weak demand from Asia, warm
weather in the US, and an overall free-fall in commodity prices around the world
all contributed to the poor showing of energy stocks in 1998. And while many of
our energy holdings did better than the sector as a whole, they lagged the
overall market in 1998.
We believe that the fundamentals of the US economy remain strong and will
provide a supportive environment for equities in 1999. However, we remain
cautious of the high valuations on many of the largest stocks and fear that much
of this has been driven by liquidity factors, not fundamentals. Therefore, we
will look for companies with attractive valuations that more fully reflect their
future prospects, and where we believe there is a catalyst for earnings
acceleration going forward.
- -------------
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-20.
P-11
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW (continued)
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION 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.
AVERAGE ANNUAL TOTAL RETURNS+
Since
One Yr. Inception
Seligman Communications
and Information Portfolio 36.49% 25.67%
Lipper Science & Technology Funds Average 52.55 30.32*
S&P 500 28.58 28.47*
*From September 30, 1994.
Seligman Lipper Science
C&I & Technology
Date Portfolio Funds Average S&P 500
09/30/1994 10000 10000 10000
12/31/1994 10440 10609 9998
03/31/1995 11030 11341 10972
06/30/1995 14690 13639 12020
09/30/1995 16950 15816 12975
12/31/1995 14464 14927 13756
03/31/1996 13618 15028 14495
06/30/1996 13993 16059 15146
09/30/1996 15139 17368 15614
12/31/1996 15739 18169 16916
03/31/1997 14271 16522 17370
06/30/1997 16961 19545 20402
09/30/1997 22018 23298 21930
12/31/1997 19237 20229 22560
03/31/1998 22103 23674 25707
06/30/1998 21765 24414 26555
09/30/1998 18105 21787 23913
12/31/1998 26256 30859 29007
As was the case in the broader market, large-cap technology stocks
outperformed their small- and mid-cap counterparts in 1998. As segments of the
technology industry have matured, larger companies have frequently gained market
share and dis proportionate profitability as purchasing power, incumbency, and
customer preference for fewer vendors have continued to rise in importance.
These trends were pronounced in the personal computer and data networking
segments, where a few large com panies have prospered to the exclusion of all
others. Further aiding the performance of large-cap technology stocks has been
the ongoing popularity of the stocks of the S&P 500 and S&P 500 Index funds.
Finally, the disappointing performance of large consumer and industrial
companies, which have suffered profit shortfalls from the Asian and South
American currency crises, has caused large-company fund managers to shift assets
into big technology companies that continue to meet Wall Street expectations.
The end result of these trends has been a snowballing of valuations, as already
expensive stocks attain ever-higher absolute and relative valuations. In
addition to large-cap technology companies, Internet companies also performed
well. However, the Portfolio generally avoided pure-play Internet companies,
given their high valuations, often negative cash flow, and typically cloudy
profitability outlooks.
The Portfolio's holdings in media stocks negatively affected performance.
Although fundamentals were favorable throughout the year and our media holdings
performed reasonably well, they underperformed relative to the
largest-capitalization technology stocks. The weakest area of the Portfolio was
the semiconductor-related sector, which went through a serious recession in the
wake of the Asian financial crisis. However, this sector's fundamentals have
recently begun to improve. The top-performing area of the Portfolio was computer
hardware and peripherals, which was positively affected by Year 2000 testing,
increased demand for data storage, and market-share consolidation in the
computer industry.
In the large-capitalization area we remain underweighted relative to the
technology indices, although we do own significant positions in industry
leaders. The Portfolio also holds many mid-capitalization technology companies
with excellent fundamentals that have gone unappreciated by the market. In 1999,
we believe that we will find attractive opportunities in radio broadcasting and
cable television, semiconductor and semiconductor capital equipment companies,
integrated circuit design software companies, mechanical design software
companies, and entertainment software 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-20.
P-12
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
AVERAGE ANNUAL TOTAL RETURNS+
Since
One Yr. Inception
Seligman Frontier Portfolio (1.46)% 17.88%
Lipper Small Cap Funds Average (0.40) 16.31*
Russell 2000 Index (2.55) 14.09*
Russell 2000 Growth Index 1.23 12.58*
*From September 30, 1994.
Seligman Lipper
Frontier Russell 2000 Russell 2000 Small Cap
Date Portfolio Growth Index Index Funds Average
09/30/1994 10000 10000 10000 10000
12/31/1994 10580 9926 9813 9961
03/31/1995 11300 10470 10265 10540
06/30/1995 12260 11509 11227 11482
09/30/1995 13780 12817 12336 12827
12/31/1995 14101 13007 12604 13130
03/31/1996 15443 13753 13247 13986
06/30/1996 17065 14557 13909 15073
09/30/1996 17731 14433 13957 15371
12/31/1996 17476 14470 14682 15751
03/31/1997 15855 12952 13923 14720
06/30/1997 19203 15226 16180 17245
09/30/1997 21455 17802 18588 20075
12/31/1997 20331 16343 17965 19098
03/31/1998 22650 18284 19773 21200
06/30/1998 22044 17235 18851 20330
09/30/1998 16839 13381 15053 15982
12/31/1998 20034 16544 17508 19021
The past year was a difficult one for small-company stocks. The greatest
influence on both the Portfolio and the small-cap market was an ongoing
reduction in expectations for corporate earnings throughout 1998. When
conditions are positive, investors are generally willing to pay big premiums to
own the faster rate of earnings growth that small-cap stocks typically enjoy.
However, when there is earnings uncertainty (as was the case in 1998), investors
avoid smaller companies, regardless of their attractive relative valuations and
long-term growth prospects.
In 1998, small-cap stocks were at a disadvantage on both the supply and
demand side of the equation when judged against larger-cap stocks. From a supply
standpoint, the stock market was headed toward a record year in terms of initial
public offering (IPO) activity, until it cracked in mid-summer. New equity
supply tends to disadvantage small-cap investors, because most new issues are
for smaller companies. When an IPO successfully comes to market, fund managers,
in general, become net sellers of other small-cap holdings to pay for the
purchase. In addition, most of the money from individuals that poured into
stocks this year was invested in the largest stocks. Even the tremendous inflows
of money from foreign investors completely ignored small caps, as the global
"flight to quality" benefited only the best-known American companies. To
small-cap investors, the supply/demand equation became a vicious circle. Money
flowing into large-cap funds (particularly index funds), went into the market's
largest stocks, causing their prices to rise. With corporate earnings
uncertainty, few investors wanted to buy small caps, an asset class with less
liquidity and poor recent relative performance.
One area of strength in the market that has traditionally benefited small-cap
growth stocks was technology. Unfortunately, the majority of the technology
sector's gains in 1998 were limited to large technology leaders and speculative
pure-play Internet companies. Due to the Portfolio's small-cap mandate, we could
not take advantage of opportunities in large-cap technology stocks. And due to
our investment approach, which focuses on fundamentals, we would not chase
over-priced Internet stocks.
We believe that small-cap growth stocks are at such attractive valuations,
compared to their long-term growth prospects, that 1999 could be the year they
return to favor. Many of the large-cap market leaders of the past few years may
find their earnings under continued pressure due to ongoing global financial
problems. Small-company stocks derive the majority of their earnings from
domestic sources, and should therefore should do well in spite of global
difficulties.
- -------------
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-20.
P-13
<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.
AVERAGE ANNUAL TOTAL RETURNS+
Since
One Yr. Inception
Seligman Henderson Global Growth
Opportunities Portfolio 21.60% 12.16%
Lipper Global Funds Average 14.06 12.98*
MSCI World Index 24.80 17.87*
*From April 30, 1996.
Seligman
Henderson
Global Growth Lipper MSCI
Opportunities Global Funs World
Date Portfolio Average Index
04/30/1996 10000 10000 10000
05/31/1996 10000 10116 10010
06/30/1996 10010 10106 10062
07/31/1996 9480 9666 9708
08/31/1996 9790 9915 9821
09/30/1996 9810 10214 10207
10/31/1996 9650 10221 10281
11/30/1996 9980 10720 10859
12/31/1996 9922 10731 10687
01/31/1997 10102 10970 10818
02/28/1997 10072 11008 10944
03/31/1997 10022 10822 10730
04/30/1997 10072 10962 11083
05/31/1997 10773 11643 11769
06/30/1997 11274 12126 12357
07/31/1997 11784 12724 12928
08/31/1997 11164 12056 12066
09/30/1997 11694 12784 12723
10/31/1997 11043 11973 12055
11/30/1997 11164 12001 12271
12/31/1997 11169 12145 12422
01/31/1998 11432 12265 12770
02/28/1998 12394 13134 13636
03/31/1998 13022 13778 14214
04/30/1998 13397 13964 14354
05/31/1998 13245 13779 14176
06/30/1998 13326 13802 14515
07/31/1998 13508 13752 14493
08/31/1998 11473 11691 12563
09/30/1998 11422 11786 12788
10/31/1998 12010 12588 13946
11/30/1998 12769 13274 14778
12/31/1998 13581 13853 15502
During the first half of 1998, world markets rose strongly by about 25%, led
by Continental Europe and fueled by expectations of lower inflation and falling
interest rates. After mid-July, the combination of the Russian debt default,
speculative attacks against emerging market currencies, and a
worse-than-expected economic impact from Asia on the rest of the world led to
sharp market corrections. Then, in October, markets recovered as interest rates
were cut in many parts of the world and a coordinated program of support for the
world's financial system was implemented.
During the year, the Portfolio's bias for stocks with higher earnings growth
and a preference for Continental European markets were major positive factors.
However, Asian and other emerging market investments dampened relative
performance even though we had significantly reduced exposure to these markets
during the year.
The Portfolio remained broadly invested in our four major growth themes.
During the year, we reduced exposure to the Productivity theme while increasing
exposure to the more stable Quality-of-Life theme, with its emphasis on health
care stocks. Our exposure to the Consumption theme remained virtually unchanged,
but we shifted our geographical focus away from Asia and the emerging markets
toward Europe. In general, within each theme, we shifted the Portfolio's
investments toward those with greater earnings reliability.
Profit growth around the world has become more scarce and uncertain, which
has increased market volatility everywhere. However, a global economic recession
accompanied by prolonged deflation is unlikely, as there is still room for lower
interest rates. Meanwhile, the world has an excess of industrial capacity. Until
demand rises sufficiently to meet it, pricing power will be scarce in industrial
goods markets. The service sector businesses in which the Portfolio's
investments are concentrated are likely to perform well in such an environment.
During times of subdued profit advance, high-quality growth stocks tend to
perform well. And when there is a high level of near-term uncertainty, it is
appropriate to look at the secular trends which are most likely to drive wealth
creation. Accordingly, we will continue to use a thematic approach to identify
superior growth opportunities in which to invest.
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.
AVERAGE ANNUAL TOTAL RETURNS+
Since
One Yr. Inception
Seligman Henderson Global Smaller
Companies Portfolio 6.58% 11.60%
Lipper Global Small Cap Funds Average 0.75 7.91*
Salomon Smith Barney EM Index World 5.93 9.43*
*From September 30, 1994.
Seligman
Henderson
Global
Smaller Lipper Global
Companies Small Cap Funds Salomon Smith Barney
Date Portfolio Average EM Index World
10/11/1994 10000 10000 10000
12/31/1994 10353 9649 9724
03/31/1995 10594 9585 9997
06/30/1995 10886 10373 10404
09/30/1995 11860 11311 11110
12/31/1995 12152 11341 11352
03/31/1996 13246 12150 11969
06/30/1996 14589 12911 12460
09/30/1996 14464 12800 12459
12/31/1996 14421 13084 12774
03/31/1997 14196 12872 12396
06/30/1997 15810 14220 13793
09/30/1997 16023 14930 14658
12/31/1997 14915 13720 13844
03/31/1998 17260 15552 15649
06/30/1998 17329 15208 15285
09/30/1998 14433 12055 12651
12/31/1998 15897 13824 14665
During 1998, smaller US companies generally posted dis appointing returns,
lagging well behind their larger counterparts. In the UK, this divergence was
less pronounced than in the US, but was nevertheless significant, and the
environment there remains difficult for small caps. Smaller companies in
Continental Europe, with the notable exception of Norway, generally performed
well, though still lagging large caps. The economic background in Japan
continued to deteriorate throughout the year as the economy appeared to be in
the grip of deflation,
- --------------
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-20.
P-14
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
a banking crisis, and policy paralysis. Despite this environment, smaller
companies in Japan returned 18.7% in US dollar terms, 14% ahead of the return
from large companies. Japan was the only one to see outperformance from smaller
companies. Smaller companies in Asia, excluding Japan, fell 14.2% during 1998,
underperforming large companies.
The Portfolio's allocation to US equities rose from a low of 41.7% in January
to 52.7% at the end of December. For much of the year, the allocation was in the
mid-40% range, but we increased this allocation in the fourth quarter, given the
attractive combination of growth opportunities and valuation levels.
The Portfolio maintained a neutral to slightly overweight position in
Continental Europe throughout the period, starting the year at 22.1%, rising to
22.6% in June, and ending the year at 19.0%. During the year, the Portfolio
reduced exposure to the more cyclical sectors of the market where pricing
pressure is likely to be most damaging for smaller companies.
The Portfolio was underweighted in Japan for the whole period. At the
beginning of the year, our allocation was 5.6% and rose to 6.5% by year-end. In
the rest of Asia, the Portfolio began the year underweighted and ended with a
neutral weight of 2.9%. Signs of an improved economic background and
confirmation of improvements at the corporate level need to be seen before we
will increase the Portfolio's allocation to this region.
Volatility, which was the defining characteristic of equity markets in 1998,
does not favor small caps. The current focus on large companies may continue,
but with the valuation gap between large and small caps now looking very
stretched, and earnings forecasts in many regions better for small companies
than for large, the global small-cap market looks attractive as we begin 1999.
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.
AVERAGE ANNUAL TOTAL RETURNS+
Since
One Yr. Inception
Seligman Henderson Global
Technology Portfolio 36.80% 22.02%
Lipper Global Funds Average 14.06 12.98*
Lipper Science & Technology Funds Average 52.55 25.95*
MSCI World Index 24.80 17.87*
*From April 30, 1996.
Seligman
Henderson Lipper Lipper
Global Global Science & MSCI
Technology Funds Technology World
Date Portfolio Average Funds Average Index
05/01/1996 10000 10000 10000 10000
05/31/1996 10000 10116 10355 10010
06/30/1996 9860 10106 9637 10062
07/31/1996 8830 9666 8762 9708
08/31/1996 9250 9915 9307 9821
09/30/1996 9970 10214 10423 10207
10/31/1996 9880 10221 10251 10281
11/30/1996 10400 10720 11120 10859
12/31/1996 10401 10731 10904 10687
01/31/1997 11137 10970 11667 10818
02/28/1997 10663 11008 10712 10944
03/31/1997 9957 10822 9916 10730
04/30/1997 10109 10962 10245 11083
05/31/1997 11379 11643 11651 11769
06/30/1997 11328 12126 11730 12357
07/31/1997 12638 12724 13241 12928
08/31/1997 12729 12056 13294 12066
09/30/1997 13525 12784 13982 12723
10/31/1997 12648 11973 12673 12055
11/30/1997 12779 12001 12539 12271
12/31/1997 12432 12145 12140 12422
01/31/1998 12702 12265 12467 12770
02/28/1998 14662 13134 13918 13636
03/31/1998 14803 13778 14208 14214
04/30/1998 15331 13964 14782 14354
05/31/1998 14932 13779 13691 14176
06/30/1998 15108 13802 14652 14515
07/31/1998 14897 13752 14419 14493
08/31/1998 11880 11691 11525 12563
09/30/1998 12761 11786 13075 12788
10/31/1998 13899 12588 14057 13946
11/30/1998 15367 13274 15889 14778
12/31/1998 17007 13853 18520 15502
In 1998, the technology industry significantly outperformed the broad market
in most countries, with US and European tech stocks leading the way. Inventory
issues in the PC market early in the year led to severe underperformance by
cyclical technology shares but, by the late autumn, strong PC demand combined
with constrained production produced strong year-end results. The dramatic
growth of Internet usage represented perhaps the single most significant
contributor to the growth of the technology market. Consumer enthusiasm for
getting on-line drove heavy retail demand for PCs, while the explosion in data
traffic obliged communications carriers to upgrade and extend their network
infrastructure. Consequently, we have seen tremendous strength in the networking
and communications equipment markets. This was matched by growth in wireless
where subscriber growth, particularly in Europe, has vastly exceeded
expectations.
Throughout the year we remained heavily focused on the US as the global
technology leader and on Europe as the market that seems to be positioned for a
period of strong growth. We maintained a modest weighting in Asia and continue
to believe that the best investment prospects lie outside that region.
With corporate profit growth in the broad stock market slowing markedly in
the current deflationary climate, the exceptional growth rates being delivered
by technology companies are commanding ever-higher valuations. As we begin 1999,
the industry's absolute fundamentals are good and continue to improve, and
relative fundamentals are among the best seen in 15 years.
- --------------
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-20.
P-15
<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.
AVERAGE ANNUAL TOTAL RETURNS+
One Five Since
Yr. Yr. Inception
Seligman Henderson International Portfolio 15.81% 8.67% 10.20%
Lipper International Funds Average Index 12.80 7.78 10.16*
MSCI EAFE Index 20.33 9.50 9.88*
*From April 30, 1993.
Seligman Lipper
Henderson International MSCI
International Funds Average EAFE
Date Portfolio Index Index
05/03/1993 10000 10000 10000
06/30/1993 10010 10004 10057
09/30/1993 10480 10873 10731
12/31/1993 11440 11907 10831
03/31/1994 10987 11813 11216
06/30/1994 11399 11946 11797
09/30/1994 11751 12318 11816
12/31/1994 11591 11829 11704
03/31/1995 11428 11635 11931
06/30/1995 11765 12120 12028
09/30/1995 12603 12717 12539
12/31/1995 12905 12975 13057
03/31/1996 13228 13555 13443
06/30/1996 13603 14047 13666
09/30/1996 13520 13984 13659
12/31/1996 13819 14551 13887
03/31/1997 13925 14752 13680
06/30/1997 15802 16396 15466
09/30/1997 15716 16622 15367
12/31/1997 14973 15351 14173
03/31/1998 17295 17608 16269
06/30/1998 17682 17733 16453
09/30/1998 14719 14875 14125
12/31/1998 17340 17316 17056
The year began with international stock markets rising strongly. However,
this ended abruptly during the summer when Russia's default on its debt produced
significant financial consequences around the globe. During the third quarter,
stock markets fell sharply, but rebounded strongly during the fourth quarter.
Inflation remained low, causing long-bond yields to decline, and enabling
central banks around the world to respond quickly to the global financial crisis
by cutting short rates, a process that is likely to continue.
UK markets followed the fortunes of the rest of the world during the year,
falling dramatically from July highs, but recovering by year-end. We remained
overweighted in the UK as we viewed that market as a defensive bet relative to
the rest of the world. The Portfolio was heavily overweighted in Continental
Europe during the year, which contributed positively to performance. Lower
interest rates, anticipation of the European Monetary Union, and strong
forecasted earnings growth helped lift these stocks higher in the first half of
the year, allowing Continental Europe to outperform most other regional markets.
The Portfolio will likely maintain this regional overweighting as economic
growth in Europe should be among the most resilient in the world.
The Portfolio maintained a very low weighting in Japan throughout the year
because we did not anticipate any near-term economic recovery in this troubled
market. We do not expect a speedy solution to the banking crisis nor sufficient
stimulus to boost the economy, and believe significant risks for the Japanese
market remain. During the year, we maintained minimal exposure to the Pacific
markets, which were down by 5.1% on average, and expect to remain underweighted
in this region over the near term. In other emerging markets, which suffered
greatly in an environment of falling commodity prices and slowing global
economic growth, we maintained only limited exposure.
International stock markets continue to look more secure as interest-rate
reductions boost investor sentiment. But despite these improvements, risks
remain and markets must account for slower economic and corporate profit growth.
Within this context, we expect continental Europe, the UK, and select emerging
markets to offer attractive return potential, as we believe corporate earnings
have the greatest potential in these regions. In contrast, we believe that Japan
and the Pacific region will remain depressed over the near term.
- ------------
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-20.
P-16
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.
AVERAGE ANNUAL TOTAL RETURNS+
Since
One Yr. Inception
Seligman High-Yield Bond Portfolio 1.02% 10.25%
Lipper High Current Yield (0.30) 9.63*
Merrill Lynch High Yield Master Index 3.66 10.36*
*From April 30, 1995.
Seligman
Henderson
High-Yield Lipper High Merrill Lynch
Bond Current High-Yield
Date Portfolio Yield Master Index
05/01/1995 10000 10000 10000
06/30/1995 10030 10391 10264
09/30/1995 10300 10694 10589
12/31/1995 10737 11049 10903
03/31/1996 11126 11211 11214
06/30/1996 11341 11364 11437
09/30/1996 11872 11808 11978
12/31/1996 12307 12272 12414
03/31/1997 12252 12400 12501
06/30/1997 13022 12990 13167
09/30/1997 13824 13497 13870
12/31/1997 14164 13846 14058
03/31/1998 14820 14232 14662
06/30/1998 14987 14471 14715
09/30/1998 13925 13953 13640
12/31/1998 14309 14354 14016
A very unusual combination of events forced a liquidity squeeze on the
high-yield market in 1998. The global stock market decline which began in July
caused many high-yield issuers to lose another potential source of financing and
thus much-needed financial flexibility. Then, when rumors began to circulate
that Russia and a number of Asian countries would default on their debt, mutual
funds with direct emerging market exposure faced significant redemptions and
sold their most stable assets -- domestic high-yield bonds -- to meet those
redemptions. While the Portfolio had no direct emerging market exposure, the
selling pressure created by those funds led to repricing of domestic high-yield
issues. Finally, additional downward pressure was created following the
announcement of the bailout of Long-Term Capital Management (LTCM), which had
many high-yield investments. Unfortunately, because LTCM was so secretive about
its holdings, no one knew which bonds would be most impacted, so the whole
market repriced downward.
In the fourth quarter, the high-yield market rebounded, for a number of
reasons. The most compelling was that bargain hunters moved in to an oversold
market. Mutual fund investors, pension funds, and insurance companies poured
billions of dollars into the attractively priced high-yield market. Other
important factors contributing to the rebound included Federal Reserve Board
Chairman Alan Greenspan's positive statements, the Federal Reserve Board's rate
cuts, and the recovery of the equity markets.
Defensive sectors such as cable, publishing, and gaming all did well in 1998.
The hardest-hit areas of the high-yield market were those that require
additional funding to meet their respective business plans. Fortunately, the
Portfolio's exposure to those issues was minimal. Another area hit hard was
nursing homes. The prospective payment system recently put in place has created
some short-term challenges in this area, but we think that there are long-term
opportunities in nursing home providers. In our opinion, this sector was
oversold in 1998. During the year, we increased the Portfolio's exposure to
health care, paging, publishing, and rural cellular providers.
A strong US economy, featuring modest gross domestic product (GDP) growth,
low interest rates, and a federal budget surplus should allow defaults in the
high-yield market to remain modest. In this environment, our investment strategy
remains unchanged. We prefer domestic issuers with predictable cash flows,
dominant market shares, high cash flow margins (which are indicative of pricing
power), and strong management teams. We have no emerging market exposure and
avoid purchasing defaulted and distressed bonds.
- -----------------
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-20.
P-17
<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.
AVERAGE ANNUAL TOTAL RETURNS+
One Yr. Five Yrs. Ten Yrs.
Seligman Income Portfolio 7.76% 7.77% 10.29%
Lehman Brothers Aggregate
Bond Index 8.69 7.27 9.26
Lipper Income Funds Average 7.85 10.68 11.61
S&P 500 28.58 24.06 19.21
Lehman Lipper
Seligman Brothers Income
Income Aggregate Funds
Date Portfolio Bond Index Average S&P 500
12/31/1988 10000 10000 10000 10000
03/31/1989 10339 10114 10428 10709
06/30/1989 10976 10920 11111 11655
09/30/1989 11255 11043 11633 12903
12/31/1989 11461 11454 11823 13169
03/31/1990 11440 11363 11558 12772
06/30/1990 11546 11779 11901 13576
09/30/1990 10398 11880 11071 11710
12/31/1990 10761 12481 11702 12760
03/31/1991 11973 12830 12777 14614
06/30/1991 12472 13038 12878 14580
09/30/1991 13491 13779 13817 15360
12/31/1991 14086 14477 14640 16647
03/31/1992 14662 14292 14640 16226
06/30/1992 15025 14870 15059 16534
09/30/1992 15576 15509 15587 17055
12/31/1992 16299 15551 15987 17913
03/31/1993 17187 16193 16952 18696
06/30/1993 17659 16622 17326 18787
09/30/1993 18188 17056 17944 19272
12/31/1993 18316 17066 18051 19719
03/31/1994 17543 16576 17377 18972
06/30/1994 17012 16406 17308 19051
09/30/1994 17591 16506 17751 19983
12/31/1994 17223 16568 17425 19979
03/31/1995 17845 17404 18493 21925
06/30/1995 19055 18463 19694 24019
09/30/1995 20178 18825 20697 25928
12/31/1995 20319 19627 21596 27489
03/31/1996 20570 19280 22062 28965
06/30/1996 20839 19390 22468 30266
09/30/1996 21012 19748 22894 31201
12/31/1996 21672 20341 23958 33803
03/31/1997 21796 20227 23993 34709
06/30/1997 23217 20969 25833 40770
09/30/1997 24350 21666 27337 43823
12/31/1997 24711 22302 27801 45082
03/31/1998 26107 22650 29311 51371
06/30/1998 26107 23180 29427 53066
09/30/1998 25557 24161 28168 47786
12/31/1998 26628 24243 29983 57964
In 1998, the US economy expanded for the eighth year in a row. Low inflation,
continued corporate earnings growth in a benign interest rate environment, and
an investor "flight to quality" all pushed US equity and fixed-income markets
higher. On the equity side, the movement to securities that were considered
safer was positive for the biggest US stocks, but caused a narrowing of the
market that excluded many stocks. On the fixed-income side, this trend was
positive for US Treasuries, as global demand for securities backed by the US
government grew. US corporate securities, on the other hand, did not fare as
well in comparison.
While the Portfolio remains well diversified among industry groups and
individual holdings, we have reduced the number of holdings in the Portfolio to
focus on companies with dividend yields equal to, or greater than the S&P 500,
and those with valuations at the lower end of their industry group. This
approach led us to underweight many of the excessively-valued
large-capitalization stocks that were hit the hardest by last summer's market
downturn. During the year, we significantly reduced the Portfolio's
international holdings because of ongoing global economic problems. We continued
to reduce the convertible securities in the Portfolio, which helped to increase
returns without increasing overall risk. We also increased the Fund's
fixed-income holdings, as we felt that real interest rates were attractive.
However, our fixed-income exposure was heavily weighted to corporate bonds,
which underperformed Treasuries.
Due to our concerns regarding large-cap equity valuations, we ended 1998
underweighted in equities. With the strong results in the equity markets in
1998, our underweighting in stocks negatively impacted our relative performance.
If the stock market corrects in 1999, we would use the opportunity to add to
positions in high-quality companies at more attractive valuations.
We continue to believe that the US economy is an attractive environment for
investing in financial markets. We do not see any reason for a significant rise
in interest rates in 1999 as long as corporate profits and overall economic
growth continue to be moderate. Deflationary concerns outside the US should
benefit the fixed-income marketplace. Within the equity markets, we remain
cautious of the high valuations on many of the largest stocks, and fear that
much of this has been driven by liquidity factors, not fundamentals. Therefore,
we are focusing on identifying companies whose valuations more fully reflect
their future prospects, and where we believe there is a catalyst for earnings
acceleration going forward.
- --------------
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-20.
P-18
<PAGE>
SELIGMAN PORTFOLIOS, INC.
SELIGMAN LARGE-CAP VALUE 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.
TOTAL RETURNS+
Since Inception
Seligman Large-Cap
Value Portfolio (0.26)%
Russell 1000 Index 10.91*
Russell 1000 Value Index 2.87*
S&P 500 11.71*
*From April 30, 1998.
Seligman
Large Cap Russell Rusell
Value 1000 1000
Date Portfolio Index Value Index S&P 500
05/01/1998 10000 10000 10000 10000
05/31/1998 9990 9852 9784 9828
06/30/1998 9920 9978 10146 10227
07/31/1998 9550 9802 10024 10118
08/31/1998 7980 8344 8526 8655
09/30/1998 8050 8823 9100 9209
10/31/1998 9000 9507 9819 9958
11/30/1998 9940 9950 10427 10562
12/31/1998 9974 10288 11091 11170
The period under review was a difficult one for the Portfolio, and for value
funds in general. As investors worried about everything from deflationary
pressures in the US to devalued currencies in emerging markets, the largest,
most liquid growth companies in the US -- companies with proven track records of
growing earnings in the past -- benefited from a "flight to quality."
Large-capitalization growth stocks were among the year's biggest winners, but to
the exclusion of large-capitalization value stocks.
The Portfolio's most heavily weighted sector, financial stocks, suffered to
an even greater degree than the broader market during the difficult third
quarter, which was characterized by concerns and uncertainties regarding the
global financial crisis. The Portfolio's performance was also hurt by the
strength in technology stocks in general and Internet stocks in particular,
where a virtual mania developed. This resulted in a speculative trading market
that became extremely divergent. Value stocks, which are low priced, do not do
well in this type of environment.
In 1999, we expect a slowdown in domestic gross domestic product (GDP) to
about 2.5 percent. Trade should continue to come under pressure and there could
be a meaningful decline in capital spending, resulting in a period of slowing
job creation and reduced income gains. Unemployment may rise somewhat and
inflation should remain muted. We think one of the major investment themes for
1999 will be restructuring and consolidating, as managements continue to attempt
to grow profits in a slow growth environment. In commodity price-sensitive
businesses, this will slowly bring supply into better balance.
- --------------
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-20.
P-19
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
ANNUAL PERFORMANCE OVERVIEW (continued)
- --------------------------------------------------------------------------------
SELIGMAN SMALL-CAP VALUE 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.
TOTAL RETURNS+
Since Inception
Seligman Small-Cap Value Portfolio (17.00)%
Lipper Small Cap Funds Average (11.01)*
Russell 2000 Value Index (14.09)*
*From April 30, 1998.
Seligman Lipper
Small-Cap Russell 2000 Small Cap
Value Value Funds
Date Portfolio Index Average
05/01/1998 10000 10000 10000
05/31/1998 9500 9646 9437
06/30/1998 9150 9592 9512
07/31/1998 8460 8841 8830
08/31/1998 6350 7456 7063
09/30/1998 6420 7878 7477
10/31/1998 6850 8112 7783
11/30/1998 7290 8332 8291
12/31/1998 8300 8593 8899
The greatest influence on both the Portfolio and the small-cap market was an
ongoing reduction in expectations for corporate earnings throughout 1998. When
conditions are positive, investors are generally willing to pay big premiums to
own the faster rate of earnings growth that small-cap stocks typically enjoy.
However, during periods of earnings uncertainty (as in 1998), investors do not
want to own smaller companies, regardless of valuations.
We responded to this environment by staying focused on our investment
discipline. We bought what we considered to be quality companies with favorable
long-term return prospects. In retrospect, a winning strategy for small-cap
investors in 1998 would have been to emphasize those "concept" companies that
have no earnings, or high-tech companies where valuations are well above what a
traditional value investor is willing to pay. However, we remained committed to
our long-term value approach to investing. To change one's investment style in
order to fit with what is working in the market today is better known as style
rotation, and it is something we will not do.
The Portfolio benefited from having owned five companies that were taken over
during 1998. While we do not buy stocks simply because we think they will be
taken over, takeovers are a logical outcome given that our investment process is
often focused on those companies that sell at a discount to their private market
value.
We generally avoid investing in companies where the movement in the price of
a commodity (gold, oil, interest rates, etc.) far outweighs any impact
management can make. However, we did add two energy-related investments earlier
this year, based on a discount to net asset value, already significant price
declines, unseasonably mild weather for the prior year, and potential demand
recovery in Asia. While these investments have not yet paid off, we believe
that, at some point, when energy prices come back, so will these stocks.
Current valuations suggest that a period of significant catch-up for
small-cap stocks, in general, and small-cap value stocks, in particular, is
coming. We are not market timers and we do not know if 1999 will be the year
that these stocks will rebound. But for investors seeking long-term capital
appreciation who can withstand greater volatility, small-cap value remains an
attractive investment area.
- ------------
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-20
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN BOND PORTFOLIO
PRINCIPAL
AMOUNT VALUE
--------- ---------
US GOVERNMENT AND GOVERNMENT AGENCY SECURITIES -- 49.8% US GOVERNMENT SECURITIES
- -- 36.0% US Treasury Bonds:
8 3/4%, 5/15/2020............. $500,000 $ 711,562
6 5/8%, 2/15/2027............. 900,000 1,064,812
US Treasury Notes:
6 1/4%, 10/31/2001............ 300,000 312,563
6 1/4%, 6/30/2002............. 200,000 209,938
6 5/8%, 5/15/2007............. 300,000 337,500
----------
Total US Government
Securities
(Cost $2,422,781)............. 2,636,375
----------
US GOVERNMENT
AGENCY SECURITIES -- 13.8%
Aid-Israel 0%, 11/15/2010........ 500,000 264,565
Federal National Mortgage
Association:
5.795%, 1/1/2009.............. 150,000 150,750
6%, 12/1/2028+................ 200,000 197,438
Government National Mortgage
Association, Mortgage-backed
Passed-through Certificates:+
6 1/2%, 12/15/2028............ 200,000 202,188
6%, 12/20/2028................ 200,000 198,250
----------
Total US Government
Agency Securities
(Cost $1,016,711)............. 1,013,191
----------
TOTAL US GOVERNMENT AND
GOVERNMENT AGENCY SECURITIES
(Cost $3,439,492)............. 3,649,566
----------
CORPORATE BONDS -- 41.6% AT&T Capital Corp.
6 1/4%, 5/15/2001............. 200,000 197,455
Associates Corporation of North
America 6 1/2%, 8/15/2002..... 200,000 206,682
Barrett Resources
7.55%, 2/1/2007............... 200,000 192,784
Capital One Bank
8 1/8%, 3/1/2000.............. 150,000 152,657
PRINCIPAL
AMOUNT VALUE
--------- ---------
CORPORATE BONDS (continued)
Cardinal Health
6 1/4%, 7/15/2008............. $100,000 $ 102,559
Chrysler Financial
6.09%, 4/6/2001............... 200,000 203,302
Dell Computer
6.55%, 4/15/2008.............. 200,000 208,111
Equifax
6.30%, 7/1/2005............... 100,000 103,125
First Data Corp.
5.80%, 12/15/2008............. 100,000 99,085
First USA Bank
5 3/4%, 1/15/1999............. 100,000 100,001
Loewen Group International
7 1/2%, 4/15/2001............. 200,000 179,000
Petroleum Georgia Pacific
7 1/2%, 3/31/2007............. 200,000 213,092
Philip Morris
7 1/8%, 8/15/2002............. 200,000 209,865
Sprint Capital
6 1/8%, 11/15/2008............ 200,000 204,446
Time Warner
9 1/8%, 1/15/2013............. 200,000 253,788
Viacom
7 3/4%, 6/1/2005.............. 200,000 218,662
Woolworth
7%, 6/1/2000.................. 200,000 200,064
----------
TOTAL CORPORATE BONDS
(Cost $2,995,620)............. 3,044,678
----------
REPURCHASE AGREEMENT -- 5.5%
(Cost $400,000)...............
State Street Bank and Trust 4.45%, dated 12/31/1998, maturing 1/4/1999
collateralized by: $300,000 US Treasury Notes 11 5/8%, 11/15/2004, with a
fair
market value of $408,353...... 400,000 400,000
----------
TOTAL INVESTMENTS - 96.9%
(Cost $6,835,112)............. 7,094,244
OTHER ASSETS LESS
LIABILITIES - 3.1%............ 226,112
----------
NET ASSETS - 100.0%.............. $7,320,356
==========
- -------------
+ 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-21
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 96.3%
BASIC MATERIALS -- 2.2%
Crompton & Knowles............... 12,000 $ 248,250
Minerals Technologies............ 7,100 290,656
----------
538,906
----------
CAPITAL GOODS -- 10.3%
Applied Power (Class A).......... 16,900 637,975
General Dynamics................. 7,100 416,237
Molex............................ 15,500 590,453
Pall............................. 19,900 503,719
Rayovac*......................... 12,200 325,587
----------
2,473,971
----------
COMMUNICATIONS SERVICES -- 6.1%
Century Telephone Enterprises.... 13,400 904,500
Tele-Communications (Series A)
TCI Ventures Group*........... 24,400 577,212
----------
1,481,712
----------
CONSUMER CYCLICALS -- 23.6%
Apollo Group (Class A)*.......... 6,700 226,544
Circuit City Stores-Circuit City
Group......................... 6,900 344,569
Fastenal......................... 5,600 246,225
General Nutrition*............... 11,400 184,894
HA-LO Industries*................ 6,400 240,800
Harley-Davidson.................. 7,600 360,050
Interpublic Group of Companies... 8,100 645,975
ITT Educational Services*........ 17,500 595,000
Lancaster Colony................. 7,900 253,294
Leggett & Platt.................. 13,000 286,000
Lowe's Companies................. 6,100 312,244
Office Depot*.................... 18,700 690,731
Service Corp. International...... 10,600 403,462
Snyder Communications*........... 7,600 256,500
TJX Companies.................... 12,300 356,700
Williams-Sonoma*................. 7,000 282,188
----------
5,685,176
----------
CONSUMER STAPLES -- 17.3%
Cardinal Health.................. 4,500 341,438
CBS.............................. 19,900 651,725
Chancellor Media*................ 6,900 330,122
Clorox........................... 2,300 268,669
Deluxe........................... 13,100 478,969
Dial............................. 14,500 418,688
SHARES VALUE
-------- ---------
CONSUMER STAPLES (continued)
Infinity Broadcasting (Class A)*. 23,000 $ 629,625
Kroger*.......................... 10,100 611,050
Newell........................... 10,600 437,250
----------
4,167,536
----------
ENERGY -- 1.4%
Anadarko Petroleum............... 7,300 225,388
Enron Oil & Gas.................. 6,100 105,225
----------
330,613
----------
FINANCIAL SERVICES -- 10.0%
AFLAC............................ 8,600 378,400
Nationwide Financial Services
(Class A)..................... 8,000 413,500
Old Republic International....... 14,250 320,625
Progressive (Ohio)............... 1,800 304,875
Provident Companies.............. 7,900 327,850
Schwab (Charles)................. 7,500 421,406
SouthTrust....................... 6,950 256,498
----------
2,423,154
----------
HEALTH CARE -- 6.6%
ALZA*............................ 5,500 287,375
Biogen*.......................... 4,300 356,631
Covance*......................... 14,800 431,050
Universal Health Services
(Class B)*.................... 7,100 368,313
Wellpoint Health Networks........ 1,700 147,900
----------
1,591,269
----------
TECHNOLOGY -- 16.0%
Applied Materials................ 4,900 209,322
Ascend Communications*........... 3,300 217,078
Cadence Design System*........... 8,300 246,925
Compuware*....................... 4,100 320,184
Electronic Arts*................. 10,400 583,050
Fiserv*.......................... 7,100 364,984
General Instrument*.............. 12,000 407,250
Maxim Integrated Products*....... 5,000 218,281
Network Associates*.............. 4,800 318,450
Parametric Technology*........... 25,600 416,000
VERITAS Software*................ 9,400 562,825
----------
3,864,349
----------
TRANSPORTATION -- 1.7%
CNF Transportation............... 10,900 409,431
----------
- -------------
* Non-income producing security.
See Notes to Financial Statements.
P-22
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN CAPITAL PORTFOLIO (continued)
SHARES VALUE
-------- ---------
UTILITIES -- 1.1%
AES*............................. 5,800 $ 274,775
-----------
TOTAL COMMON STOCKS
(Cost $16,679,590)............ 23,240,892
-----------
SHORT-TERM HOLDINGS -- 4.1%
(Cost $1,000,000)............. 1,000,000
-----------
TOTAL INVESTMENTS -- 100.4%
(Cost $17,679,590)............ $24,240,892
OTHER ASSETS LESS
LIABILITIES-- (0.4)%.......... (100,198)
-----------
NET ASSETS-- 100.0%.............. $24,140,694
===========
SELIGMAN CASH MANAGEMENT PORTFOLIO
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------- -------- ---------
US GOVERNMENT
AND GOVERNMENT
AGENCY SECURITIES -- 57.6%
US Government SECURITIES -- 48.2% US Treasury Bills:
2/11/1999............ 4.38% $1,000,000 $ 995,103
3/11/1999............ 4.46 600,000 594,986
3/25/1999............ 4.44 700,000 693,028
4/15/1999............ 4.52 1,000,000 987,347
4/29/1999............ 4.49 600,000 591,425
US Treasury Notes:
5%, 1/31/1999........ 5.12 600,000 599,929
6 3/8%, 4/30/1999.... 4.53 600,000 603,502
----------
Total US Government
Securities
(Cost $5,065,320).... 5,065,320
----------
US Government
AGENCY
SECURITIES -- 9.4%
Federal Home Loan
Bank Corp., 4.94%,
3/5/1999............. 5.07 500,000 495,677
Federal National
Mortgage Association,
4.95%, 3/11/1999..... 5.08 500,000 495,256
----------
Total US Government
Agency Securities
(Cost $990,933)...... 990,933
----------
TOTAL US GOVERNMENT AND
GOVERNMENT AGENCY
SECURITIES
(Cost $6,056,253) ... 6,056,253
----------
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------- -------- ---------
COMMERCIAL
PAPER -- 31.7%
American Express Credit
Corp., 2/26/1999..... 5.07% $540,000 $ 535,800
American General Finance
Corp., 2/8/1999...... 5.30 500,000 497,240
Ford Motor Credit Co.,
4/5/1999............. 4.98 475,000 468,923
General Electric Capital
Corp., 1/19/1999..... 5.24 650,000 648,320
John Deere Capital Corp.,
2/18/1999............ 5.12 540,000 536,364
Norwest Financial, Inc.,
1/15/1999............ 5.25 650,000 648,690
-----------
TOTAL COMMERCIAL
PAPER
(Cost $3,335,337).... 3,335,337
-----------
REPURCHASE
AGREEMENT -- 9.5%
(Cost $1,000,000)
State Street Bank and
Trust 4.45%, dated 12/31/1998, maturing 1/4/1999 collateralized by: $750,000
US Treasury Notes 115 1/48%, 11/15/2004, with a fair market value of
$1,020,883........... 4.51 1,000,000 1,000,000
-----------
TOTAL INVESTMENTS -- 98.8%
(Cost $10,391,590)... 10,391,590
OTHER ASSETS LESS
LIABILITIES-- 1.2%..... 128,305
-----------
NET ASSETS-- 100.0%....... $10,519,895
===========
- -----------------
* Non-income producing security.
See Notes to Financial Statements.
P-23
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS - 90.7%
AEROSPACE/DEFENSE -- 0.5%
General Dynamics................. 6,000 $ 351,750
----------
AUTOMOTIVE AND
RELATED - 3.5%
DaimlerChrysler.................. 12,999 1,248,716
Dana............................. 6,600 269,775
Ford Motor....................... 11,800 692,512
----------
2,211,003
----------
BASIC MATERIALS - 0.5%
Alcoa............................ 4,100 305,706
----------
BUSINESS SERVICES AND
SUPPLIES -- 1.4%
Xerox............................ 7,400 873,200
----------
CAPITAL GOODS - 0.9%
Crown Cork & Seal................ 17,500 539,219
----------
CHEMICALS -- 0.8%
duPont (E.I.) de Nemours......... 9,100 482,869
----------
CONSUMER GOODS AND
SERVICES - 8.1%
Anheuser-Busch................... 17,900 1,174,687
Coca-Cola........................ 11,700 782,437
General Mills.................... 7,900 614,225
PepsiCo.......................... 18,200 745,063
Philip Morris.................... 23,400 1,251,900
Procter & Gamble................. 5,900 538,744
----------
5,107,056
----------
DRUGS AND HEALTH
CARE - 10.8%
Abbott Laboratories.............. 16,600 813,400
American Home Products........... 19,800 1,114,988
Baxter International............. 6,000 385,875
Bristol-Myers Squibb............. 9,700 1,297,981
Johnson & Johnson................ 9,900 830,362
Merck............................ 7,800 1,151,963
Pfizer........................... 5,200 652,275
Schering-Plough.................. 9,200 508,300
----------
6,755,144
----------
SHARES VALUE
-------- ---------
ELECTRIC AND GAS
UTILITIES - 4.1%
DQE.............................. 15,000 $ 659,062
Sonat............................ 19,300 522,306
Unicom........................... 17,600 678,700
The Williams Cos................. 23,200 723,550
----------
2,583,618
----------
ELECTRONICS -- 1.5%
Raytheon (Class B)............... 17,300 921,225
----------
ENERGY - 8.1%
BP Amoco (ADRs)
(United Kingdom).............. 11,200 1,003,800
Chevron.......................... 7,300 605,444
Exxon............................ 20,300 1,484,437
Mobil............................ 9,600 836,400
Royal Dutch Petroleum ..........
(Netherlands)................. 15,700 751,638
Schlumberger..................... 7,900 364,388
----------
5,046,107
----------
FINANCE AND
INSURANCE - 14.1%
American General................. 15,200 1,185,600
American International Group..... 10,800 1,043,550
Bank of New York................. 32,800 1,320,200
BankAmerica...................... 13,205 793,951
Chubb............................ 9,500 616,312
Citigroup........................ 20,005 990,247
Fannie Mae....................... 10,900 806,600
Mellon Bank...................... 11,400 783,750
Morgan (J.P.).................... 4,600 483,287
Washington Mutual................ 20,496 782,691
----------
8,806,188
----------
FOOD - 2.6%
ConAgra.......................... 25,000 787,500
Sara Lee......................... 29,600 834,350
----------
1,621,850
----------
MACHINERY AND INDUSTRIAL
EQUIPMENT -- 6.1%
GATX............................. 11,600 439,350
General Electric................. 17,800 1,816,712
United Technologies.............. 14,200 1,544,250
----------
3,800,312
----------
- ------------
See Notes to Financial Statements.
P-24
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN COMMON STOCK PORTFOLIO (continued)
SHARES VALUE
-------- ---------
PAPER AND PACKAGING -- 2.1%
Fort James....................... 21,700 $ 868,000
Mead............................. 16,400 480,725
-----------
1,348,725
-----------
PRINTING AND
PUBLISHING -- 0.6%
Gannett.......................... 6,100 403,744
-----------
RETAIL TRADE -- 2.6%
May Department Stores............ 12,100 730,538
Wal-Mart Stores.................. 10,800 879,525
-----------
1,610,063
-----------
TECHNOLOGY -- 11.7%
Cisco Systems*................... 7,100 659,191
Dell Computer*................... 5,100 373,416
Electronic Data Systems.......... 14,300 718,575
Harris........................... 16,000 586,000
Intel............................ 9,700 1,149,753
International Business Machines.. 7,500 1,385,625
Lucent Technologies.............. 5,500 605,000
Microsoft*....................... 13,400 1,856,319
-----------
7,333,879
-----------
TELECOMMUNICATIONS -- 8.6%
AT&T............................. 15,900 1,196,475
Ameritech........................ 14,600 925,275
GTE.............................. 19,200 1,294,800
MCI WorldCom*.................... 18,500 1,327,953
SBC Communications............... 11,900 638,138
-----------
5,382,641
-----------
SHARES OR
PRINCIPAL
AMOUNT VALUE
--------- ---------
TRANSPORTATION -- 0.8%
Norfolk Southern.............. 15,900 shs. $ 503,831
-----------
MISCELLANEOUS/
DIVERSIFIED -- 1.3%
AlliedSignal.................. 17,900 793,194
-----------
TOTAL COMMON STOCKS
(Cost $41,069,060)......... 56,781,324
REPURCHASE
AGREEMENT -- 8.6%
(Cost $5,400,000)
State Street Bank and Trust
4.45%,dated 12/31/1998,
maturing 1/4/1999
collateralized by:
$4,050,000 US Treasury
Notes 11 5/8%, 11/15/2004,
with a fair market value of
$5,512,139................ $5,400,000 5,400,000
-----------
TOTAL INVESTMENTS -- 99.3%....
(Cost $46,469,060)........ 62,181,324
OTHER ASSETS LESS
LIABILITIES-- 0.7% ....... 406,734
-----------
NET ASSETS-- 100.0%.......... $62,588,058
===========
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-25
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 98.6%
COMMUNICATIONS
INFRASTRUCTURE -- 4.5%
ADC Telecommunications*.......... 16,500 $ 571,312
Advanced Fibre Communications*... 10,400 113,750
Aspect Telecommunications*....... 41,800 728,887
Cisco Systems*................... 2,000 185,687
DSP Communications*.............. 35,000 535,937
ECI Telecommunications (Israel).. 30,900 1,094,053
Nokia (Class A) (ADRs)
(Finland)..................... 9,800 1,180,288
Oak Industries*.................. 14,000 490,000
Tekelec*......................... 25,700 426,459
Xylan*........................... 10,100 182,747
-----------
5,509,120
-----------
COMMUNICATIONS
SERVICES -- 6.5%
ICG Communications*.............. 5,400 116,438
MCI WorldCom*.................... 20,600 1,478,694
Pacific Gateway Exchange*........ 22,500 1,082,109
RSL Communications (Class A)*.... 20,200 597,162
Tele-Communications (Series A)
TCI Group*.................... 53,500 2,960,891
Tele-Communications (Series A)
TCI Ventures Group*........... 53,500 1,265,609
Verio*........................... 19,800 440,550
-----------
7,941,453
-----------
COMPUTER AND BUSINESS
SERVICES -- 2.4%
First Data....................... 52,200 1,654,088
Galileo International............ 12,300 535,050
Unisys*.......................... 20,300 699,081
-----------
2,888,219
-----------
COMPUTER HARDWARE/
PERIPHERALS -- 16.1%
American Power Conversion*....... 1,700 82,291
Apex PC Solutions................ 26,000 747,500
Apple Computer*.................. 8,000 327,750
Comdisco......................... 60,000 1,012,500
Creative Technology*
(Singapore)................... 154,500 2,317,500
Electronics for Imaging*......... 99,700 3,984,884
EMC*............................. 58,200 4,947,000
SHARES VALUE
-------- ---------
COMPUTER HARDWARE/
PERIPHERALS (continued)
Lexmark International Group
(Class A)*.................... 28,900 $ 2,904,450
Splash Technology Holdings*...... 12,200 91,119
Storage Technology*.............. 58,000 2,062,625
Western Digital*................. 19,900 299,744
Xerox............................ 8,100 955,800
-----------
19,733,163
-----------
COMPUTER SOFTWARE -- 24.6%
3DO*............................. 51,100 234,741
Acclaim Entertainment*........... 61,100 748,475
Activision*...................... 20,000 220,000
Autodesk......................... 66,600 2,840,906
Check Point Software
Technologies* (Israel)........ 60,600 2,770,556
Compuware*....................... 20,000 1,561,875
Electronic Arts*................. 77,400 4,339,238
HNC Software*.................... 9,900 400,331
Hyperion Solutions*.............. 11,700 211,331
The Learning Company*............ 79,800 2,069,813
Microsoft*....................... 20,500 2,839,891
Network Associates*.............. 81,801 5,426,952
Novell*.......................... 20,200 366,756
Parametric Technology*........... 107,400 1,745,250
Platinum Technology
International*................ 72,700 1,397,203
Rational Software*............... 34,300 908,950
Structural Dynamics Research*.... 59,800 1,184,788
Tecnomatix Technologies*
(Israel)...................... 12,300 214,866
VERITAS Software*................ 10,400 622,700
-----------
30,104,622
-----------
CONTRACT MANUFACTURING/
CIRCUIT BOARDS -- 5.2%
ADFlex Solutions*................ 22,000 151,250
DII Group*....................... 20,200 463,337
Hadco*........................... 16,000 559,000
Sanmina*......................... 6,200 386,725
SCI Systems*..................... 49,800 2,875,950
SMART Modular Technologies*...... 71,000 1,965,813
-----------
6,402,075
-----------
ELECTRONICS CAPITAL
EQUIPMENT -- 7.3%
Applied Materials*............... 26,600 1,136,319
Asyst Technologies*.............. 17,700 361,744
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-26
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued)
SHARES VALUE
-------- ---------
ELECTRONICS CAPITAL
EQUIPMENT (continued)
Cognex*.......................... 47,400 $ 945,037
Credence Systems*................ 35,700 658,219
Electro Scientific Industries*... 19,700 892,656
Etec Systems*.................... 27,000 1,080,000
Orbotech* (Israel)............... 24,900 1,174,191
Teradyne*........................ 63,500 2,690,812
------------
8,938,978
------------
MEDIA -- 17.0%
Cablevision Systems (Class A)*... 20,000 1,003,750
CBS.............................. 127,400 4,172,350
Chancellor Media*................ 93,000 4,449,469
Clear Channel Communications*.... 52,146 2,841,957
Cox Radio (Class A)*............. 12,200 515,450
Fox Entertainment Group
(Class A)*.................... 50,300 1,266,931
Infinity Broadcasting (Class A)*. 36,900 1,010,138
MediaOne Group*.................. 50,700 2,382,900
Sinclair Broadcast Group
(Class A)*.................... 44,600 882,244
USA Networks*.................... 40,600 1,343,606
Ziff-Davis*...................... 56,900 899,731
------------
20,768,526
------------
SEMICONDUCTORS -- 15.0%
Advanced Micro Devices*.......... 60,200 1,742,037
Amkor Technology*................ 162,500 1,762,109
Cadence Design Systems*.......... 20,600 612,850
C-Cube Microsystems*............. 52,100 1,414,841
SHARES OR
PRINCIPAL
AMOUNT VALUE
-------- ----------
SEMICONDUCTORS (continued)
Dallas Semiconductor............. 29,200 shs. $ 1,189,900
Discreet Logic* (Canada)......... 29,900 562,494
Intel............................ 20,500 2,429,891
Lattice Semiconductor*........... 41,600 1,909,700
Level One Communications*........ 20,300 721,284
Maxim Integrated Products*....... 24,700 1,078,309
Microchip Technology*............ 43,500 1,606,781
Synopsys*........................ 52,737 2,857,686
Xilinx*.......................... 6,000 390,563
------------
18,278,445
------------
TOTAL COMMON STOCKS
(Cost $98,088,703)............ 120,564,601
------------
SUBORDINATED CONVERTIBLE
BONDS -- 0.1%
(Cost $190,000)
COMPUTER
SOFTWARE -- 0.1%
Activision 6 3/4%, 1/1/2005+... $190,000 163,400
------------
SHORT-TERM HOLDINGS -- 0.5%
(Cost $600,000)............... 600,000
------------
TOTAL INVESTMENTS -- 99.2%
(Cost $98,878,703)............ 121,328,001
OTHER ASSETS LESS
LIABILITIES-- 0.8%............ 950,930
------------
NET ASSETS-- 100.0%.............. $122,278,931
============
- -------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 98.6%
CAPITAL GOODS -- 11.2%
Allied Waste Industries*......... 26,900 $635,512
Casella Waste Systems
(Class A)*.................... 15,200 563,350
Corporate Express*............... 56,800 292,875
Fusion Systems (Rights)*......... 3,745 59
Integrated Electrical Services*.. 10,800 240,300
Metamor Worldwide*............... 25,600 635,200
Oak Industries*.................. 10,130 354,550
Sanmina*......................... 12,000 748,500
SHARES VALUE
-------- ---------
CAPITAL GOODS (continued)
Superior Services*............... 16,300 $ 327,019
UCAR International*.............. 23,300 415,031
Waste Connections*............... 10,400 190,775
----------
4,403,171
----------
CONSUMER CYCLICALS -- 18.9%
American Homestar*............... 30,437 458,457
Applied Graphics Technology*..... 8,400 137,025
Career Education*................ 10,000 300,000
Copart*.......................... 14,400 470,700
HA-LO Industries*................ 21,200 797,650
- -----------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-27
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
SHARES VALUE
-------- ---------
CONSUMER CYCLICALS (continued)
Journal Register*................ 33,500 $ 502,500
Keystone Automotive
Industries*................... 16,500 347,531
Market Facts*.................... 11,100 278,888
MemberWorks*..................... 15,100 446,394
Modis Professional Services*..... 61,900 897,550
Personnel Group of America*...... 48,100 841,750
Pier 1 Imports................... 23,650 229,109
Pre-Paid Legal Services*......... 13,200 435,600
Primark*......................... 19,400 526,225
ResortQuest International*....... 8,700 127,238
Sun International Hotels*........ 6,500 295,344
Wilmar Industries*............... 15,500 314,359
----------
7,406,320
----------
CONSUMER STAPLES -- 12.1%
Aurora Foods*.................... 12,200 241,712
Carriage Services (Class A)*..... 23,800 676,813
EduTrek International
(Class A)*.................... 23,700 140,719
Hearst-Argyle Television
(Class A)*.................... 3,981 131,373
Premier Parks*................... 38,100 1,152,525
Provant*......................... 16,700 356,963
SBS Broadcasting
(Luxembourg)*................. 800 21,850
Sinclair Broadcast Group
(Class A)*.................... 25,000 494,531
U.S. Foodservice*................ 17,100 837,900
Vlasic Foods International*...... 26,500 631,031
Youth Services International*.... 10,100 38,664
----------
4,724,081
----------
ENERGY -- 2.8%
Cabot Oil & Gas (Class A)........ 11,400 171,000
Calpine*......................... 16,600 419,150
McDermott International.......... 11,600 286,375
Santa Fe Energy Resources*....... 28,500 210,188
----------
1,086,713
----------
FINANCIAL SERVICES -- 5.8%
Affiliated Managers Group*....... 6,900 206,137
American Capital Strategies*..... 12,400 214,675
Crusader Holding*................ 3,465 36,383
DST Systems*..................... 7,200 410,850
ESG Re........................... 12,700 259,556
FirstService* (Canada)........... 17,200 205,325
SHARES VALUE
-------- ---------
FINANCIAL SERVICES (Continued)
Insignia Financial Group*........ 15,666 $ 189,950
NOVA............................. 18,733 649,801
Stirling Cooke Brown Holdings
(Bermuda)..................... 4,900 82,381
----------
2,255,058
----------
HEALTH CARE -- 20.6%
AmSurg (Class A)*................ 10,000 71,875
Barr Laboratories*............... 9,500 456,000
CompDent*........................ 19,600 203,350
Covance*......................... 8,500 247,563
Hanger Orthopedic Group*......... 13,000 292,500
New American Healthcare*......... 19,200 214,800
Omnicare......................... 13,500 469,125
Pharmaceutical Product
Development*.................. 7,300 221,053
Professional Detailing*.......... 15,900 453,150
Province Healthcare*............. 19,900 707,694
PSS World Medical*............... 49,100 1,127,766
Quorum Health Group*............. 16,200 209,081
Renal Care Group*................ 7,400 214,600
Renex*........................... 50,000 359,375
Henry Schein*.................... 8,400 375,375
Schein Pharmaceutical*........... 6,800 99,025
Somnus Medical Technologies*..... 20,000 58,750
Total Renal Care Holdings*....... 37,400 1,105,637
Triangle Pharmaceuticals*........ 12,200 168,513
Universal Health Services
(Class B)*.................... 10,000 518,750
Watson Pharmaceuticals*.......... 7,500 471,563
----------
8,045,545
----------
TECHNOLOGY -- 24.0%
Affiliated Computer Services
(Class A)*.................... 14,900 670,500
American Management Systems*..... 6,000 240,375
Analog Devices*.................. 9,900 310,612
ANTEC*........................... 22,200 448,162
Aspect Telecommunications*....... 20,000 348,750
Avant!*.......................... 38,300 610,406
AVX.............................. 29,400 497,962
Burr-Brown*...................... 43,550 1,017,981
Ceridian*........................ 5,400 376,988
General Semiconductors*.......... 17,400 142,463
Glenayre Technologies*........... 53,000 233,531
HMT Technology*.................. 33,600 430,500
Indus International*............. 21,800 151,919
- ------------
* Non-income producing security.
See Notes to Financial Statements.
P-28
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN FRONTIER PORTFOLIO (continued)
SHARES VALUE
-------- ---------
TECHNOLOGY (continued)
Inso*............................ 15,100 $ 378,444
KLA-Tencor*...................... 6,000 260,438
Microchip Technology*............ 16,900 624,244
Micrografx*...................... 3,000 33,094
National Instruments*............ 7,000 238,656
Platinum Technology
International*................ 10,900 209,484
PMC-Sierra* (Canada)............. 7,100 447,522
Structural Dynamics Research*.... 13,600 269,450
SunGard Data Systems............. 8,400 333,375
Transaction Systems Architects
(Class A)*.................... 11,600 583,625
Unigraphics Solutions (Class A)*. 20,100 291,450
Xilinx*.......................... 4,000 260,375
----------
9,410,306
----------
TRANSPORTATION -- 1.3%
Coach USA*....................... 9,900 343,406
SHARES VALUE
-------- ---------
TRANSPORTATION (continued)
US Xpress Enterprises
(Class A)*.................... 11,800 $ 175,525
-----------
518,931
UTILITIES -- 1.9%
CalEnergy*....................... 21,960 761,736
-----------
TOTAL COMMON STOCKS
(Cost $34,675,524)............ 38,611,861
SHORT-TERM HOLDINGS -- 4.9%
(Cost $1,900,000)............. 1,900,000
-----------
TOTAL INVESTMENTS -- 103.5%
(Cost $36,575,523)............ 40,511,861
OTHER ASSETS LESS
LIABILITIES-- (3.5)%.......... (1,364,190)
-----------
NET ASSETS-- 100.0%.............. $39,147,671
===========
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 92.4%
AUSTRALIA -- 0.7%
Brambles Industries
(Commercial Services)......... 700 $ 17,015
CSL (Drugs and Health Care)...... 3,000 25,670
Telstra* (Telecommunications).... 3,900 18,197
--------
60,882
--------
BRAZIL -- 0.2%
Telesp Participacoes (ADRs)*
(Telecommunications).......... 1,000 22,125
--------
CHINA -- 0.5%
China Telecom (Hong Kong)*
(Telecommunications).......... 10,000 17,296
Huaneng Power International
(ADRs)* (Electric and Gas
Utilities).................... 1,100 15,950
SmarTone Telecommunications
(Telecommunications).......... 3,000 8,325
--------
41,571
--------
SHARES VALUE
-------- ---------
FINLAND -- 3.9% Nokia (Series A)
(Telecommunications).......... 2,125 $258,387
Raisio Group (Consumer
Goods and Services)........... 4,000 43,931
Sonera Group*
(Telecommunications).......... 2,200 38,831
--------
341,149
--------
FRANCE -- 8.0%
Accor (Entertainment
and Leisure).................. 540 116,893
Cap Gemini (Computer and
Technology Related)........... 1,111 178,285
CNP Assurances* (Financial
Services)..................... 3,940 119,685
Genset (ADRs)* (Drugs and
Health Care).................. 2,500 68,125
Hachette Filipacchi Medias
(Media)....................... 400 94,459
Valeo (Automotive and Related)... 1,430 112,665
--------
690,112
--------
- ---------------
* 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)
SHARES VALUE
-------- ---------
GERMANY -- 3.4%
Adidas-Salomon (Retailing)....... 1,150 $126,746
Metro (Retailing)................ 2,088 164,286
--------
291,032
--------
GREECE -- 1.5%
Hellenic Telecommunication
Organization
(Telecommunications).......... 3,166 84,148
National Bank of Greece (GDRs)+
(Financial Services).......... 960 42,144
--------
126,292
--------
HUNGARY -- 1.2%
Magyar Tavkozlesi "Matav" (ADRs)
(Telecommunications).......... 1,890 56,346
MOL Magyar Olaj-es Gazipari
(GDRs) (Resources)............ 1,740 48,067
--------
104,413
--------
IRELAND -- 1.8%
Elan (ADRs)* (Drugs and
Health Care).................. 2,250 156,516
--------
ITALY -- 4.0%
Aeroporti di Roma
(Transportation).............. 11,500 100,261
Banca Nazionale del Lavoro*
(Financial Services).......... 38,000 113,769
Mediolanum (Financial Services).. 18,000 133,500
--------
347,530
--------
JAPAN -- 6.4%
Bellsystem 24 (Business Goods
and Services)................. 150 33,311
Diamond Computer Service
(Computer and Technology
Related)...................... 3,000 49,703
Fancl (Consumer Goods
and Services)................. 1,000 85,393
Fujitsu Support and Service
(Business Goods and
Services)..................... 1,000 71,822
H.I.S. (Entertainment
and Leisure).................. 4,000 82,133
Keyence (Electronics)............ 500 61,247
SHARES VALUE
-------- ---------
JAPAN (continued)
Nichii Gakkan (Drugs
and Health Care).............. 1,100 $ 45,561
Nippon Telegraph & Telephone
(Telecommunications).......... 4 30,738
NTT Mobile Communication
Network "NTT DoCoMo"
(Telecommunications).......... 1 40,978
Softbank (Computer and
Technology Related)........... 400 23,970
Sundrug (Retailing).............. 1,600 30,315
--------
555,171
--------
MEXICO -- 0.4%
Fomento Economico Mexicano
"Femsa" (ADRs) (Consumer
Goods and Services)........... 1,300 34,612
--------
NETHERLANDS -- 4.0%
ASM Lithography Holding*
(Electronics Capital
Equipment).................... 3,000 91,605
Equant* (Business Goods
and Services)................. 1,790 124,537
Philips Electronics (Electronics) 1,900 127,354
--------
343,496
--------
NORWAY -- 2.2%
Tomra Systems (Business
Goods and Services)........... 5,700 187,538
--------
SINGAPORE -- 0.4%
Electronic Resources (Electronics) 25,000 22,713
Overseas Chinese Banking
(Financial Services).......... 2,000 13,568
--------
36,281
--------
SPAIN -- 9.8%
Actividades de Construccion y
Servicios (Construction
and Property)................. 3,400 134,146
Azkoyen (Manufacturing and
Industrial Equipment)......... 2,620 94,142
Centros Comerciales
Continente (Retailing)........ 4,850 164,360
- ------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-30
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
SHARES VALUE
-------- ---------
SPAIN (continued)
Sociedad General de Aguas de
Barcelona..... (Consumer Goods
and Services)................. 2,500 $167,330
Sociedad General de Aguas de
Barcelona*....(Consumer Goods
and Services)................. 20 1,339
Superdiplo* (Retailing).......... 4,320 121,594
Tabacalera (Class A) (Tobacco)... 6,500 163,948
--------
846,859
--------
SWEDEN -- 3.4%
Astra (Class A) (Drugs and
Health Care).................. 6,235 127,006
Autoliv (SDRs) (Automotive
and Related).................. 1,100 39,398
L.M. Ericsson Telefon (Series B)
(Telecommunications).......... 5,495 130,532
--------
296,936
--------
SWITZERLAND -- 0.8%
Helvetia Patria Holding
(Financial Services).......... 75 71,234
--------
UNITED KINGDOM -- 10.1%
Airtours (Entertainment and
Leisure)...................... 8,500 54,125
Ashtead Group (Construction
and Property)................. 19,500 44,785
Bodycote International (Industrial
Goods and Services)........... 6,000 82,830
CMG* (Computer and
Technology Related)........... 2,800 72,572
Games Workshop Group
(Retailing)................... 4,500 38,803
Granada Group (Entertainment
and Leisure).................. 4,500 79,584
Halma (Electronics).............. 36,500 74,144
Ladbroke Group (Entertainment
and Leisure).................. 13,000 51,737
Parity (Computer and
Technology Related)........... 7,325 69,540
Pizza Express (Restaurants)...... 8,000 106,791
Rolls Royce (Aerospace).......... 12,600 51,608
SmithKline Beecham (Drugs
and Health Care).............. 3,000 41,962
SHARES VALUE
-------- ---------
UNITED KINGDOM (continued)
Spring Group (Support Services).. 6,500 $ 15,683
WPP Group (Business Goods
and Services)................. 15,000 90,540
--------
874,704
--------
UNITED STATES -- 29.7%
AES* (Electric and Gas
Utilities).................... 2,700 127,913
American International Group
(Financial Services).......... 1,275 123,197
AT&T (Telecommunications)........ 2,100 158,025
Bristol-Myers Squibb (Drugs
and Health Care).............. 800 107,050
Cardinal Health (Drugs and
Health Care).................. 1,800 136,575
CBS (Media)...................... 2,500 81,875
ConAgra (Consumer Goods
and Services)................. 3,600 113,400
Disney, Walt (Entertainment
and Leisure).................. 1,400 42,000
General Dynamics (Capital
Goods)........................ 700 41,038
General Electric (Diversified)... 1,300 132,681
Interpublic Group of Companies
(Business Goods and
Services)..................... 2,050 163,488
Kroger* (Consumer Goods
and Services)................. 1,500 90,750
Lilly (Eli) (Drugs and Health
Care)......................... 1,200 106,650
MCI WorldCom*
(Telecommunications).......... 1,700 122,028
Merck (Drugs and Health Care).... 700 103,381
Microsoft* (Computer and
Technology Related)........... 1,000 138,531
Motorola (Electronics)........... 1,400 85,487
Newell (Consumer Goods and
Services)..................... 2,000 82,500
Pfizer (Drugs and Health Care)... 700 87,806
Philip Morris (Tobacco).......... 2,300 123,050
Procter & Gamble (Consumer
Goods and Services)........... 1,400 127,837
Tyco International (Diversified). 2,000 150,875
Xerox (Business Goods and
Services)..................... 1,000 118,000
--------
2,564,137
--------
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-31
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued)
SHARES VALUE
-------- ---------
TOTAL COMMON STOCKS
(Cost $6,083,240)............. $7,992,590
----------
PREFERRED STOCKS -- 1.5%
(Cost $93,300)
GERMANY -- 1.5%
Porsche (Non-Voting)*
(Automotive and Related)...... 56 128,821
----------
CORPORATE BONDS -- 0.1%
(Cost $4,920)
PRINCIPAL
AMOUNT VALUE
--------- ---------
GERMANY -- 0.1%
Metro Finance 0%, 9/7/2013
(Financial Services).......... 9,000** $ 6,017
----------
TOTAL INVESTMENTS -- 94.0%
(Cost $6,181,460)............. 8,127,428
OTHER ASSETS LESS
LIABILITIES-- 6.0%............ 515,867
----------
NET ASSETS-- 100.0%.............. $8,643,295
==========
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 98.1%
AUSTRALIA -- 1.3%
BRL Hardy (Consumer Goods
and Services)................. 8,850 $ 29,873
Cochlear (Medical Products
and Technology)............... 4,300 24,191
CSL (Medical Products
and Technology)............... 4,650 39,789
Futuris (Automotive Parts
Manufacturing)................ 27,673 31,306
National Foods (Consumer
Goods and Services)........... 16,800 29,792
National Mutual Property Trust
(Construction and Property)... 19,700 16,745
National Mutual Property Trust
(Rights)* (Construction and
Property)..................... 1,212 1,030
Pasminco (Metals)................ 31,500 23,885
Stockland Trust Group
(Construction and Property)... 12,200 30,289
TAB* (Leisure and Hotels)........ 14,000 27,737
Henry Walker Group
(Support Services)............ 5,100 5,302
--------
259,939
--------
AUSTRIA -- 0.6%
Bau Holdings (Voting Preference
Shares) (Construction and
Property)..................... 684 25,693
Bau Holdings (Construction and
Property)..................... 1,930 90,622
--------
116,315
--------
SHARES VALUE
-------- ---------
BERMUDA -- 0.1%
Dairy Farm International
Holdings (Retailing).......... 14,500 $ 16,675
Stirling Cooke Brown Holdings
(Financial Services).......... 400 6,725
--------
23,400
--------
CANADA -- 1.2%
Celestica* (Technology).......... 1,900 46,906
PMC-Sierra* (Technology)......... 1,300 81,941
Teleglobe (Telecommunications)... 2,100 75,441
Trojan Technologies*
(Support Services)............ 2,000 45,395
--------
249,683
--------
DENMARK -- 2.1%
Danske Traelastkompagni
(Construction and Property)... 1,209 81,686
NeuroSearch*
(Drugs and Health Care)....... 659 43,697
Sondagsavisen
(Media)....................... 700 43,446
Sydbank
(Financial Services).......... 2,015 86,435
Thorkild Kristensen
(Construction and Property)... 2,065 188,867
--------
444,131
--------
FINLAND
Rapala Normark*
(Consumer Goods and
Services)..................... 1,000 8,629
--------
- --------------
* Non-income producing security.
** Principal amount reported in German deutschemarks.
See Notes to Financial Statements.
P-32
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
SHARES VALUE
-------- ---------
FRANCE -- 4.3%
Compagnie Francaise d'Etudes et
de Construction Technip "Technip"
(Construction and Property)... 1,016 $ 95,606
Du Pareil au Meme
(Retailing)................... 760 61,727
ECIA (Automotive Parts
Manufacturing)................ 720 96,477
Etam Developpement* (Retailing) 2,309 117,727
L'Europeenne d'Extincteurs
(Manufacturing)............... 1,372 85,785
Genset (ADRs)*
(Drugs and Health Care)....... 2,793 76,109
International Metal Service
(Metals)...................... 1,960 18,654
Montupet (Automotive Parts
Manufacturing)................ 2,101 86,449
Royal Canin (Veterinary Products) 1,519 95,112
Sylea (Automotive Parts
Manufacturing)................ 707 39,083
Virbac (Veterinary Products)..... 1,567 120,544
--------
893,273
--------
GERMANY -- 1.6%
Beru (Automotive Parts
Manufacturing)................ 1,626 33,058
Bien-Haus (Construction and
Property)..................... 221 59,731
Hawesko Holding
(Telecommunications).......... 2,442 136,404
Moebel Walther (Retailing)....... 3,035 102,993
--------
332,186
--------
HONG KONG -- 0.7%
Dah Sing Financial Group
(Financial Services).......... 9,800 24,034
Esprit Holdings (Retailing)...... 19,000 8,216
Johnson Electric Holdings
(Electronics)................. 5,000 12,843
Kerry Properties (Construction
and Property)................. 26,000 20,974
Li & Fung (Consumer
Goods and Services)........... 8,200 16,987
Ng Fung Hong (Consumer
Goods and Services)........... 22,000 19,735
Shenzhen Expressway
(Transportation).............. 69,500 16,147
SHARES VALUE
-------- ---------
HONG KONG (continued)
South China Morning Post
(Media)....................... 53,000 $ 27,193
Yanzhou Coal Mining
(Series H)* (Resources)....... 50,000 8,390
--------
154,519
--------
IRELAND -- 0.9%
Esat Telecom Group (ADRs)*
(Telecommunications).......... 2,250 85,641
Ryanair Holdings*
(Transportation).............. 12,900 92,168
--------
177,809
--------
ITALY -- 0.6%
La Doria (Consumer Goods
and Services)................. 37,643 123,070
--------
JAPAN -- 6.5%
Asahi Diamond Industries
(Manufacturing)............... 4,000 19,811
Asatsu-DK (Advertising).......... 1,900 45,208
Benesse (Business Services)...... 600 32,307
The Eighteenth Bank
(Financial Services).......... 4,000 17,131
Enplas (Electronics)............. 1,000 25,997
Forval (Telecommunications)...... 1,000 5,816
Fujicco (Consumer Goods and
Services)..................... 2,000 33,135
Fujitsu Business Systems
(Business Services)........... 2,500 33,928
Glory Kogyo (Manufacturing)...... 2,000 35,250
H.I.S. (Leisure and Hotels)...... 1,000 20,533
Higashi Nihon House
(Construction and Property)... 6,000 23,106
Hitachi Information Systems
(Computer Software)........... 2,000 19,581
Hitachi Medical (Medical
Products and Technology)...... 2,000 20,745
Hogy Medical (Medical
Products and Technology)...... 700 19,493
Hokkai Can (Manufacturing)....... 7,000 16,162
Horiba Instruments (Electronics). 4,000 39,480
Iino Kaiun Kaisha*
(Transportation).............. 12,000 20,093
The Iyo Bank (Financial
Services)..................... 3,000 18,691
- -----------
* 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
-------- ---------
JAPAN (continued)
Japan Information Processing
Service (Computer Software)... 2,200 $ 19,814
Kentucky Fried Chicken
(Restaurants)................. 3,000 28,288
Kissei Pharmaceutical (Drugs
and Health Care).............. 1,000 17,581
Komatsu Seiren
(Manufacturing)............... 6,000 21,679
Komori (Capital Goods)........... 2,000 41,948
Maspro Denkoh
(Telecommunications).......... 2,000 16,215
Mitsubishi Cable Industries
(Manufacturing)............... 9,000 14,593
Mitsubishi Gas Chemical
(Chemicals)................... 7,000 19,308
Mitsui Home (Construction
and Property)................. 7,000 32,078
Namura Shipbuilding (Capital
Goods)........................ 4,000 7,579
Nichicon (Manufacturing)......... 2,000 24,851
Nippon Broadcasting System (Media) 1,000 39,833
Nippon Seiki (Automotive Parts
Manufacturing)................ 3,000 20,568
Nishio Rent All (Construction
and Property)................. 2,000 13,483
Nissha Printing (Paper and
Printing)..................... 3,000 18,242
Nisshin Fire & Marine Insurance
(Financial Services).......... 8,000 23,406
Nova (Consumer Goods and
Services)..................... 3,000 8,857
Okinawa Electric Power
(Electric Utilities).......... 1,200 22,208
Olympus Optical (Electronics).... 4,000 45,790
Otsuka Kagu (Retailing).......... 500 34,369
Ryoyo Electro (Electronics)...... 3,000 26,094
Sagami Chain (Restaurants)....... 2,000 18,066
Sankyo (Manufacturing)........... 2,600 43,305
Sanyo Special Steel (Metals)..... 15,000 12,293
Shimachu (Retailing)............. 1,200 23,794
Sodick (Manufacturing)........... 5,000 10,575
Sundrug (Retailing).............. 1,800 34,104
Takasago International (Chemicals) 4,000 21,996
Tokyo Style (Manufacturing)...... 2,000 20,163
Towa Pharmaceutical (Drugs
and Health Care)............. 3,000 22,472
Toyo Ink Manufacturing (Chemicals) 7,000 15,545
JAPAN (continued) SHARES VALUE
-------- ---------
Tsubaki Nakashima
(Manufacturing)............... 7,500 $ 45,605
Tsudakoma (Manufacturing)........ 19,000 35,162
Tsutsumi Jewelry (Retailing)..... 2,500 39,656
Xebio (Retailing)................ 2,100 43,582
Yokohama Reito (Distributors).... 3,000 18,797
---------
1,348,366
---------
LUXEMBOURG
SBS Broadcasting* (Media)........ 200 5,462
---------
NETHERLANDS -- 3.1%
Athlon Groep (Consumer
Goods and Services)........... 2,913 86,624
Benckiser (Series B)*
(Consumer Goods and
Services)..................... 1,275 83,426
CMG (Support Services)........... 12,000 311,021
Samas Groep
(Manufacturing)............... 8,765 156,668
--------
637,739
--------
NEW ZEALAND -- 0.1%
Auckland International Airport*
(Transportation).............. 10,700 14,920
Sky Network Television* (Media).. 9,200 12,587
--------
27,507
--------
NORWAY -- 2.1%
Ekornes (Manufacturing).......... 17,347 139,261
Petroleum Geo-Services*
(Energy)...................... 7,800 99,573
Tandberg Television* (Media)..... 24,900 206,450
--------
445,284
--------
SINGAPORE -- 0.4%
Keppel FELS (Industrial Goods
and Services)................. 7,000 13,483
Keppel Tatlee Bank
(Financial Services).......... 12,000 20,933
Singapore Land (Construction
and Property)................. 9,000 19,952
Venture Manufacturing
(Electronics)................. 4,500 17,171
Want Want Holdings (Consumer
Goods and Services)........... 10,120 12,144
--------
83,683
--------
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-34
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
SHARES VALUE
-------- ---------
SPAIN -- 0.6%
TelePizza* (Consumer Goods
and Services)................. 13,044 $124,067
--------
SWEDEN -- 1.9% Angpanneforeningen (Series B)
(Business Services)........... 2,641 38,682
Bure Investment Aktiebolaget
(Financial Services).......... 8,935 126,468
Finnveden (Series B)
(Manufacturing)............... 2,447 37,497
Munksjo (Paper and Printing)..... 6,024 41,521
Nobel Biocare (Medical
Products and Technology)...... 11,294 152,908
--------
397,076
--------
SWITZERLAND -- 2.2%
Bon Appetit Holding (Retailing).. 149 81,223
Hero (Consumer Goods
and Services)................. 120 82,096
Kaba Holding
(Business Services)........... 242 118,886
Selecta Group (Consumer
Goods and Services)........... 619 171,194
--------
453,399
--------
TAIWAN -- 0.1%
Taiwan American Fund*
(Miscellaneous)............... 1,600 23,648
--------
THAILAND -- 0.2%
Hana Microelectronics
(Electronics)................. 1,600 3,873
Siam Cement (Building
Materials).................... 1,000 22,668
Tipco Asphalt (Construction
and Property)................. 4,000 6,437
--------
32,978
--------
UNITED KINGDOM -- 16.5%
AEA Technology (Industrial
Goods and Services)........... 6,500 78,953
Allied Leisure (Leisure and
Hotels)....................... 97,500 40,420
Ashtead Group (Construction
and Property)................. 106,600 244,826
BTG (Technology)................. 7,000 40,627
Capital Radio (Media)............ 20,500 197,846
SHARES VALUE
-------- ---------
UNITED KINGDOM (continued)
Chiroscience Group (Drugs
and Health Care).............. 4,250 $ 17,689
Clinton Cards (Retailing)........ 46,200 114,917
Cobham (Manufacturing)........... 8,950 101,886
Dawson Group (Transportation).... 26,600 83,808
Domnick Hunter Group
(Manufacturing)............... 20,000 66,993
Druck Holdings (Industrial
Goods and Services)........... 11,500 53,396
Electronics Boutique (Retailing). 129,800 173,807
Fairey Group (Electronics)....... 10,500 44,661
F.I. Group (Computer Software)... 55,176 300,563
Games Workshop Group
(Retailing)................... 9,400 81,055
GWR Group (Media)................ 24,000 90,142
ICON (ADRs)* (Business
Services)..................... 4,100 136,581
LLP Group (Media)................ 46,426 219,025
National Express Group
(Transportation).............. 10,000 185,061
Parity (Computer Software)....... 25,312 240,299
Peptide Therapeutics (Drugs
and Health Care).............. 2,750 3,717
Pizza Express (Restaurants)...... 19,500 260,304
Polypipe (Building Materials).... 70,500 133,274
Save Group (Retailing)........... 8,600 8,129
Shire Pharmaceuticals* (Drugs
and Health Care).............. 5,500 35,205
Spring Group (Support Services).. 30,000 72,383
Tilbury Douglas (Construction
and Property)................. 50,500 182,557
Torotrak* (Automotive Parts
Manufacturing)................ 7,000 9,925
Trifast (Electrical Distribution) 8,000 68,983
Trinity International Holdings
(Media)....................... 19,600 129,519
Vanguard Medica Group
(Drugs and Health Care)....... 3,500 9,867
Wellington Holdings
(Manufacturing)............... 8,500 13,038
--------
3,439,456
--------
UNITED STATES -- 51.0%
Acxiom* (Computer Software)...... 4,800 148,500
Affiliated Computer Services
(Class A)* (Business
Services)..................... 3,900 175,500
Affiliated Managers Group*
(Financial Services).......... 1,900 56,762
- ---------------
* 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)
Allied Waste Industries
(Industrial Goods and
Services)..................... 7,300 $172,462
American Capital Strategies*
(Financial Services).......... 1,800 31,162
American Homestar*
(Manufacturing)............... 8,100 122,006
American Management Systems*
(Business Services)........... 1,000 40,062
Analog Devices*
(Semiconductors).............. 2,600 81,575
ANTEC* (Telecommunications)...... 3,900 78,731
Applied Graphics Technologies*
(Consumer Goods and
Services)..................... 2,400 39,150
Aspect Telecommunications*
(Technology).................. 5,500 95,906
Aurora Foods* (Consumer
Goods and Services)........... 2,900 57,456
Avant!* (Computer Software)...... 6,200 98,812
AVX (Electronics)................ 7,800 132,112
Bacou USA* (Industrial Goods
and Services)................. 4,300 92,450
Barr Laboratories* (Drugs and
Health Care).................. 2,200 105,600
Budget Group* (Consumer
Goods and Services)........... 1,400 22,225
Burr-Brown* (Technology)......... 7,400 172,975
Cabot Oil & Gas (Class A)
(Energy)...................... 2,900 43,500
CalEnergy* (Electric Utilities).. 5,200 180,375
Calpine* (Electric Utilities).... 7,500 189,375
Carriage Services* (Consumer
Goods and Services)........... 5,100 145,031
Casella Waste Systems
(Class A)* (Capital Goods).... 3,700 137,131
Ceridian* (Business Services).... 1,200 83,775
Coach USA* (Transportation)...... 2,700 93,656
Cognex* (Electronics)............ 6,500 129,594
CompDent* (Medical Products
and Technology)............... 5,700 59,137
Copart* (Retailing).............. 3,000 98,062
Corporate Express* (Retailing)... 11,400 58,781
Covance* (Drugs and Health
Care)......................... 2,400 69,900
Cox Radio (Class A)* (Media)..... 4,500 190,125
Crusader Holding*
(Financial Services).......... 735 7,717
SHARES VALUE
-------- ---------
UNITED STATES (continued)
EduTrek International (Class A)*
(Educational Services)....... 4,800 $28,500
FirstService* (Business Services) 4,800 57,300
Fusion Systems (Rights)*
(Capital Goods)............... 800 13
General Cable (Manufacturing).... 2,800 57,400
General Semiconductor
(Technology).................. 4,900 40,119
Glenayre Technologies*
(Telecommunications).......... 11,500 50,672
HA-LO Industries* (Advertising).. 5,500 206,937
Hanger Orthopedic Group*
(Medical Products and
Technology)................... 3,900 87,750
Hearst-Argyle Television
(Class A)* (Media)............ 1,100 36,300
HMT Technology*
(Technology).................. 3,900 49,969
Indus International*
(Business Services)........... 5,700 39,722
Insignia Financial Group*
(Financial Services).......... 3,733 45,267
Inso* (Computer Software)........ 3,900 97,744
Integrated Electrical Services*
(Electronics)................. 2,300 51,175
Ivex Packaging* (Consumer
Goods and Services)........... 4,000 93,000
Journal Register* (Media)........ 9,000 135,000
Keystone Automotive Industries*
(Distributors)................ 3,700 77,931
KLA-Tencor* (Technology)......... 700 30,384
LandCARE USA* (Business
Services)..................... 8,900 86,219
Marcam Solutions* (Computer
Software).................... 1,800 11,194
Market Facts* (Business
Services)..................... 2,800 70,350
McDermott International
(Industrial Goods and
Services)..................... 3,100 76,531
MemberWorks* (Consumer
Goods and Services)........... 4,200 124,163
Metamor Worldwide* (Business
Services)..................... 6,900 171,206
Microchip Technology*
(Technology).................. 4,400 162,525
Micrografx* (Business
Services)..................... 700 7,722
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-36
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
SHARES VALUE
-------- ---------
UNITED STATES (continued)
MMI Companies (Financial
Services)..................... 3,226 $ 54,035
Modis Professional Services*
(Business Services)........... 17,200 249,400
Mutual Risk Management
(Financial Services).......... 1,932 75,589
National Instruments*
(Technology).................. 1,900 64,778
New American Healthcare*
(Drugs and Health Care)....... 5,100 57,056
NOVA* (Business Services)........ 4,418 153,249
Oak Industries* (Electronics).... 2,000 70,000
OM Group (Chemicals)............. 4,800 175,200
Omnicare (Drugs and Health
Care)......................... 2,100 72,975
Personnel Group of America*
(Business Services)........... 13,600 238,000
Pharmaceutical Product
Development* (Medical
Products and Technology)...... 1,700 51,478
Physicians' Specialty* (Drugs
and Health Care).............. 10,000 82,500
Pier 1 Imports (Retailing)....... 6,500 62,969
PLATINUM Technology
International* (Technology)... 3,000 57,656
Pre-Paid Legal Services*
(Business Services)........... 4,000 132,000
Premier Parks* (Leisure and
Hotels)....................... 10,000 302,500
Primark* (Consumer Goods
and Services)................. 6,100 165,462
Prison Realty Trust
(Construction and Property)... 6,100 125,050
Professional Detailing*
(Business Services)........... 4,200 119,700
Provant* (Business Services)..... 4,200 89,775
Province Healthcare* (Drugs
and Health Care).............. 4,200 149,363
PSS World Medical* (Drugs and
Health Care).................. 13,200 303,187
Quorum Health Group* (Drugs
and Health Care).............. 2,000 25,813
Renal Care Group* (Medical
Products and Technology)...... 1,900 55,100
Renex* (Drugs and Health
Care)......................... 9,000 64,688
SHARES VALUE
-------- ---------
UNITED STATES (continued)
ResortQuest International*
(Consumer Goods and
Services)..................... 2,500 $ 36,563
Sanmina* (Industrial Goods
and Services)................. 3,100 193,363
Santa Fe Energy Resources*
(Resources)................... 8,500 62,688
Henry Schein* (Medical
Products and Technology)...... 2,400 107,250
Schein Pharmaceutical* (Drugs
and Health Care).............. 1,900 27,669
Sinclair Broadcast Group
(Class A)*(Media)............. 6,800 134,513
Sola International* (Consumer
Goods and Services)........... 1,100 18,975
Somnus Medical Technologies*
(Medical Products and
Technology)................... 5,000 14,688
Steinway Musical Instruments*
(Consumer Goods and
Services)..................... 1,900 49,400
Structural Dynamics Research*
(Computer Software)........... 4,300 85,194
Sun International Hotels*
(Leisure and Hotels).......... 1,700 77,244
SunGard Data Systems*
(Computer Software)........... 2,300 91,281
Superior Services*
(Business Services)........... 5,100 102,319
Total Renal Care Holdings*
(Drugs and Health Care)....... 10,433 308,426
Transaction Systems Architects
(Class A)* (Technology)....... 3,600 181,125
Triangle Pharmaceuticals*
(Drugs and Health Care)....... 2,700 37,294
UCAR International*
(Capital Goods)............... 7,200 128,250
Unigraphics Solutions (Class A)*
(Business Services)........... 4,400 63,800
Universal Health Services
(Class B) (Drugs and Health
Care)......................... 2,100 108,938
U.S. Foodservice* (Business
Services)..................... 3,500 171,500
Vlasic Foods International*
(Consumer Goods and
Services)..................... 6,500 154,781
- ----------------
* Non-income producing security.
See Notes to Financial Statements.
P-37
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued)
SHARES VALUE
-------- ---------
UNITED STATES (continued)
Waste Connections* (Capital
Goods)........................ 2,800 $ 51,363
Watson Parmaceuticals*
(Medical Products and
Technology)................... 1,900 119,463
Wilmar Industries* (Consumer
Goods and Services)........... 4,500 91,266
Xilinx* (Technology)............. 1,000 65,094
Youth Services* (Support
Services)..................... 7,000 26,797
----------
10,611,465
----------
TOTAL COMMON STOCKS
(Cost $18,656,850)............ 20,413,084
----------
PREFERRED STOCKS -- 0.5%
(Cost $164,090)
GERMANY -- 0.5%
Gerry Weber International
(Manufacturing)............... 5,824 106,689
----------
PRINCIPAL
AMOUNT VALUE
-------- ---------
CONVERTIBLE BONDS -- 0.1%
(Cost $19,060)
FRANCE -- 0.1%
L'Europeenne d'Extincteurs
4 1/4%, 1/1/2005
(Manufacturing)............... $24,600 $ 20,244
-----------
TOTAL INVESTMENTS -- 98.7%
(Cost $18,840,000)............ 20,540,017
OTHER ASSETS LESS
LIABILITIES-- 1.3%............ 274,045
-----------
NET ASSETS-- 100.0%.............. $20,814,062
===========
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 93.6%
BRAZIL -- 0.6%
Telecomunicacoes Brasileiras
"Telebras" (ADRs)
(Telecommunications).......... 500 $ 36,344
---------
DENMARK -- 0.6%
NeuroSearch* (Miscellaneous)..... 580 38,459
---------
FINLAND -- 2.8% Nokia (Series A)
(Telecommunications).......... 1,400 170,231
---------
FRANCE -- 5.1%
Alcatel (Telecommunications)..... 30 3,671
Altran Technologies (Computer
and Business Services)........ 350 84,404
Cap Gemini* (Computer
Software)..................... 200 32,094
Genset (ADRs)* (Medical
Products and Technology)...... 1,500 40,875
SHARES VALUE
-------- ---------
FRANCE (continued) Rhone-Poulenc (Series A)
(Medical Products and
Technology)................... 1,200 $ 61,742
STMicroelectronics*
(Electronics)................. 1,200 93,675
---------
316,461
---------
GERMANY -- 1.7%
Mannesmann (Machinery and
Equipment).................... 900 104,192
---------
HONG KONG -- 0.5%
Elec & Eltek International
Holdings (Electronics)........ 150,000 28,654
---------
HUNGARY -- 0.2%
Richter Gedeon (GDRs) (Medical
Products and Technology)...... 350 14,962
---------
- ---------------
* Non-income producing security.
See Notes to Financial Statements.
P-38
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
SHARES VALUE
-------- ---------
INDIA -- 0.2%
Videsh Sanchar Nigam (GDRs)*+
(Telecommunications).......... 1,000 $ 12,250
--------
ISRAEL -- 4.3%
Check Point Software Technologies*
(Computer Software)........... 1,800 82,294
ECI Telecommunications
(Networking/
Communications
Infrastructure)............... 1,500 53,109
Orbotech* (Electronics).......... 1,700 80,166
Tecnomatix Technologies*
(Computer Software)........... 2,700 47,166
--------
262,735
--------
ITALY -- 1.0%
Telecom Italia
(Telecommunications).......... 7,000 59,757
--------
JAPAN -- 5.6%
CSK (Computer and Business
Services)..................... 1,000 22,912
Hirose Electronics (Electronics). 400 27,883
Murata Manufacturing
(Electronics)................. 2,000 82,661
NEC (Networking/
Communications
Infrastructure)............... 5,000 45,825
Ricoh (Machinery and
Equipment).................... 4,000 36,731
Secom (Computer and Business
Services)..................... 1,000 82,485
Sharp (Electronics).............. 5,000 44,900
--------
343,397
--------
LUXEMBOURG -- 0.6%
SBS Broadcasting* (Media)........ 1,400 38,237
--------
NETHERLANDS -- 3.6%
CMG* (Computer and
Business Services)............ 3,900 101,082
Koninklijke (Royal) Philips
Electronics (Electronics)..... 1,800 120,651
--------
221,733
--------
SHARES VALUE
-------- ---------
NORWAY -- 1.6%
Merkantildata (Computer Software) 9,000 $ 88,834
Provida* (Computer Software)..... 2,000 8,423
--------
97,257
--------
SINGAPORE -- 4.0%
Creative Technology* (Computer
Hardware/Peripherals)......... 6,100 91,500
Elec & Eltek International
(Electronics)................. 10,000 54,000
Informatics Holdings
(Computer Software)........... 70,000 24,591
Venture Manufacturing
(Electronics)................. 20,000 76,317
--------
246,408
--------
SOUTH KOREA -- 0.1%
SK Telecom Group (ADRs)
(Telecommunications).......... 451 4,595
--------
SWEDEN -- 0.7% WM-Data (Series B)
(Computer and Business
Services)..................... 1,000 42,586
--------
SWITZERLAND -- 1.0%
Novartis (Medical Products and
Technology)................... 30 58,952
--------
TAIWAN -- 1.7%
Siliconware Precision Industries
(GDRs)* (Electronics Capital
Equipment).................... 5,424 57,630
Taiwan Semiconductor Manufacturing
(ADRs)* (Semiconductors)...... 3,190 45,258
--------
102,888
--------
UNITED KINGDOM -- 15.3%
Abacus Polar (Distributors)...... 25,500 41,228
Admiral (Computer and Business
Services)..................... 3,570 68,967
Astec (Computer Hardware/
Peripherals).................. 60,000 85,068
Celltech* (Medical Products and
Technology)................... 4,700 31,253
COLT Telecom Group*
(Telecommunications).......... 6,000 87,556
- ------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-39
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
SHARES VALUE
-------- ---------
UNITED KINGDOM (continued)
Druid (Computer and Business
Services)..................... 3,500 $ 76,466
General Electric (Electronics)... 8,700 77,905
Isotron (Medical Products and
Technology)................... 5,000 46,846
Logica (Computer and Business
Services)..................... 9,950 86,210
Misys (Computer Software)........ 6,000 43,977
M.M.T. Computing (Computer
and Business Services)........ 4,500 69,957
Premier Farnell (Distributors)... 3,500 9,199
Psion (Computer Hardware/
Peripherals).................. 11,600 111,086
RM (Networking/Communications
Infrastructure)............... 10,000 76,860
Spring Group (Computer and
Business Services)............ 8,700 20,991
Torotrak* (Machinery and
Equipment).................... 3,600 5,104
--------
938,673
--------
UNITED STATES -- 42.4%
3DO* (Computer Software)......... 2,900 13,322
Activision* (Computer
Software)..................... 1,200 13,200
Amdocs* (Computer Software)...... 900 15,412
Amkor Technology*
(Semiconductors).............. 4,300 46,628
Applied Materials* (Electronics
Capital Equipment)............ 600 25,631
Autodesk (Computer Software)..... 1,200 51,187
C-Cube Microsystems*
(Semiconductors).............. 200 5,431
Cadence Design Systems*
(Computer Software)........... 2,300 68,425
CHS Electronics*
(Electronics)................. 1,800 30,488
CMP Media (Class A)*
(Media)....................... 4,700 85,775
Cognex* (Electronics Capital
Equipment).................... 1,800 35,888
Comdisco (Computer Hardware/
Peripherals).................. 1,800 30,375
Credence Systems* (Electronics
Capital Equipment)............ 1,400 25,812
Dallas Semiconductor
(Semiconductors).............. 500 20,375
SHARES VALUE
-------- ---------
UNITED STATES (continued)
DII Group* (Contract
Manufacturing/Circuit
Boards)....................... 3,500 $ 80,281
DSP Communications*
(Networking/Communications
Infrastructure)............... 1,800 27,562
Electro Scientific Industries*
(Electronics Capital
Equipment).................... 1,500 67,969
Electronic Arts* (Computer
Software)..................... 1,700 95,306
Electronics for Imaging*
(Computer Hardware/
Peripherals).................. 1,800 71,944
EMC* (Computer Hardware/
Peripherals).................. 2,000 170,000
First Data (Computer and
Business Services)............ 900 28,519
Genesys Telecommunications
Laboratories* (Computer
Software)..................... 1,700 38,462
HNC Software* (Computer
Software)..................... 1,700 68,744
Lattice Semiconductor*
(Semiconductors).............. 1,200 55,088
The Learning Company*
(Computer Software)........... 2,900 75,219
Level One Communications*
(Semiconductors).............. 900 31,978
Lexmark International Group
(Class A)* (Computer
Hardware/Peripherals)......... 900 90,450
Maxim Integrated Products*
(Semiconductors).............. 900 39,291
Microchip Technology*
(Semiconductors).............. 1,400 51,713
Microsoft* (Computer Software)... 900 124,678
NeoMagic* (Semiconductors)....... 1,700 37,559
Network Associates* (Computer
Software)..................... 2,001 132,729
Novell* (Computer Software)...... 1,100 19,972
NTL* (Telecommunications)........ 750 42,305
Parametric Technology*
(Computer Software)........... 3,000 48,750
PLATINUM Technology
International* (Computer
Software)..................... 2,300 44,203
Rational Software* (Computer
Software)..................... 1,800 47,700
- -----------
*Non-income producing security.
See Notes to Financial Statements.
P-40
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued)
SHARES VALUE
-------- ---------
UNITED STATES (continued)
RF Micro Devices* (Networking/
Communications
Infrastructure)............... 900 $ 41,372
SCI Systems* (Contract
Manufacturing/
Circuit Boards)............... 1,100 63,525
SMART Modular Technology*
(Contract Manufacturing/
Circuit Boards)............... 2,200 60,913
Storage Technology* (Computer
Hardware/Peripherals)......... 2,400 85,350
Structural Dynamics Research*
(Computer Software)........... 3,300 65,381
Synopsys* (Computer Software).... 2,547 138,016
Tele-Communications (Series A)
TCI Group*
(Telecommunications).......... 1,200 66,413
SHARES VALUE
-------- ---------
UNITED STATES (continued) Tele-Communications (Series A)
TCI Ventures Group*
(Telecommunications).......... 1,200 $ 28,388
Teradyne* (Electronics
Capital Equipment)............ 1,200 50,850
Ziff-Davis* (Media).............. 2,700 42,694
----------
2,601,273
----------
TOTAL INVESTMENTS -- 93.6%
(Cost $4,593,083)............. 5,740,044
OTHER ASSETS LESS
LIABILITIES-- 6.4%............ 389,927
----------
NET ASSETS-- 100.0%.............. $6,129,971
==========
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 97.4%
AUSTRALIA -- 1.2%
Colonial (Financial Services).... 16,800 $ 57,530
Rio Tinto (Metals)............... 400 4,734
Telstra (Telecommunications)..... 2,400 11,198
Westpac Banking (Banking)........ 7,000 46,743
---------
120,205
---------
BRAZIL -- 0.4%
Telesp Participacoes (ADRs)
(Telecommunications)............. 1,900 42,037
---------
DENMARK -- 1.4%
Tele Danmark (Series B)*
(Telecommunications)............. 1,009 136,187
---------
FRANCE -- 12.9%
AXA-UAP (Insurance).............. 1,500 217,362
Castorama Dubois
Investissements (Retailing)... 495 112,907
ELF Aquitaine (Resources)........ 1,275 147,350
Etam Developpement (Retailing)... 945 48,182
Lafarge (Construction and
Property)..................... 1,340 127,294
STMicroelectronics*
(Electronics)................. 250 19,679
SHARES VALUE
-------- ---------
FRANCE (continued)
Suez Lyonnaise des Eaux
(Construction and Property)... 761 $ 156,291
TOTAL (Resources)................ 1,148 116,243
Valeo (Manufacturing)............ 1,494 117,708
Vivendi (Industrial Goods and
Services)..................... 815 211,414
---------
1,274,430
---------
GERMANY -- 9.9%
Adidas-Salomon (Retailing)....... 766 84,424
Bayerische Hypo-und
Vereinsbank (Banking)......... 1,788 141,541
DaimlerChrysler* (Automotive
and Related).................. 1,308 130,018
Deutsche Telekom
(Telecommunications).......... 2,406 79,119
Hoechst (Chemicals).............. 2,519 104,243
Mannesmann (Industrial Goods
and Services)................. 1,591 184,189
RWE (Resources).................. 2,625 145,049
Siemens (Manufacturing).......... 1,678 110,358
---------
978,941
---------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-41
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
SHARES VALUE
-------- ---------
GREECE -- 1.9%
Hellenic Telecommunications
Organization
(Telecommunications).......... 2,700 $ 71,762
National Bank of Greece
(Banking)..................... 1,920 84,288
National Bank of Greece
(GDRs)*+ (Banking)............ 650 28,535
---------
184,585
---------
HUNGARY -- 2.3%
Magyar Tavkozlesi "Matav"
(ADRs) (Telecommunications)... 7,700 229,556
---------
IRELAND -- 0.9%
Bank of Ireland (Banking)........ 4,000 87,622
---------
ITALY -- 7.9%
Banca Popolare di Bresci
(Banking)..................... 5,593 136,465
Credito Italiano (Financial
Services)..................... 21,475 127,353
ENI (Resources).................. 20,858 136,386
Istituto Nazionale delle
Assicurazioni (Insurance)..... 44,756 118,279
Telecom Italia
(Telecommunications).......... 27,762 174,806
Telecom Italia Mobile
(Telecommunications).......... 12,244 90,439
---------
783,728
---------
JAPAN -- 8.5%
Benesse (Business Services)...... 500 26,922
Bridgestone (Automotive and
Related)...................... 2,000 45,208
Canon (Business Services)........ 1,000 21,282
Chugai Pharmaceutical
(Health and Household)........ 5,000 49,791
Credit Saison (Financial
Services)..................... 200 4,909
East Japan Railway
(Transportation).............. 6 33,364
Fuji Machine Manufacturing
(Industrial Goods and
Services)..................... 1,000 31,461
Honda Motor (Automotive and
Related)...................... 1,000 32,694
Hosiden (Electronics)............ 2,000 34,756
SHARES VALUE
-------- ---------
JAPAN (continued)
Japan Tobacco (Tobacco).......... 6 $ 59,749
KAO (Consumer Products).......... 2,000 44,944
Kawasaki Heavy Industries
(Industrial Goods and
Services)..................... 13,000 30,359
Mitsubishi Gas Chemical
(Chemicals)................... 11,000 30,341
Mitsui* (Industrial Goods and
Services)..................... 5,000 27,803
Mitsui Chemicals (Chemicals)..... 9,000 31,170
Mitsui Fudosan (Construction
and Property)................. 4,000 30,139
Nippon Telegraph & Telephone
(Telecommunications).......... 7 53,792
NTT Data (Telecommunications).... 8 39,551
NTT Mobile Communication
Network "NTT DoCoMo"
(Telecommunications).......... 1 40,978
Shohkoh Fund (Financial Services) 100 32,078
Sony (Consumer Products)......... 500 36,263
Takefuji (Financial Services).... 600 43,622
Tsubaki Nakashima (Manufacturing) 3,000 18,242
Uny (Retailing).................. 1,000 18,198
York-Benimaru (Retailing)........ 700 22,146
---------
839,762
---------
MEXICO -- 0.7%
Fomento Economico Mexicano
"Femsa" (ADRs) (Consumer
Products)..................... 2,500 66,562
---------
NETHERLANDS -- 6.9%
Benckiser (Series B)*
(Consumer Products)........... 2,618 171,302
ING Groep (Insurance)............ 2,429 147,952
Koninklijke Ahold (Retailing).... 2,922 107,877
Koninklijke (Royal) Philips
Electronics (Electronics)..... 1,544 103,492
Unilever (Consumer Products)..... 1,814 154,882
---------
685,505
---------
PORTUGAL -- 1.0%
Banco Portugues do Atlantico
(Financial Services).......... 281 5,749
Electricidade de Portugal
(Utilities)................... 4,273 93,920
---------
99,669
---------
- ---------------
* Non-income producing security.
+ Rule 144A security.
See Notes to Financial Statements.
P-42
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued)
SHARES VALUE
-------- ---------
SOUTH KOREA -- 0.1%
Samsung Electronics
(Electronics)................. 187 $ 12,544
---------
SPAIN -- 6.9%
Actividades de Construccion y
Servicios (Construction and
Property)..................... 3,591 141,682
Centros Comerciales
Continente (Retailing)........ 3,803 128,879
Corporacion Bancaria de
Espana Argentaria (Banking)... 6,186 160,169
Endesa (Utilities)............... 4,250 112,587
Telefonica de Espana
(Telecommunications).......... 3,127 139,017
---------
682,334
---------
SWEDEN -- 5.3% Astra-Zeneca (Class A)
(Health and Household)........ 7,600 154,811
Electrolux (Series B)
(Health and Household)........ 5,508 94,571
L.M. Ericsson Telefon (Series B)
(Telecommunications).......... 5,023 119,319
Nordbanken Holding (Banking)..... 25,091 160,587
---------
529,288
---------
SWITZERLAND -- 7.5%
Nestle (Consumer Products)....... 51 110,983
Novartis (Health and
Household).................... 97 190,611
Roche Holding (Health and
Household).................... 10 121,980
UBS* (Banking)................... 369 113,332
Zurich Allied (Insurance)........ 274 202,808
---------
739,714
---------
TAIWAN -- 0.2%
The ROC Taiwan Fund
(Miscellaneous)............... 1,200 7,425
Taiwan Opportunities Fund*
(Miscellaneous)............... 1,000 12,200
---------
19,625
---------
UNITED KINGDOM -- 21.5%
Allied Zurich* (Insurance)....... 8,500 126,786
SHARES OR
PRINCIPAL
AMOUNT VALUE
--------- ---------
UNITED KINGDOM (continued)
Associated British Ports Holdings
(Transportation).............. 14,500 shs. $ 67,686
BP Amoco (Resources)............. 9,661 143,703
British American Tobacco
(Tobacco)..................... 8,500 75,197
Bunzl (Manufacturing)............ 23,000 89,819
FKI Babcock (Industrial Goods
and Services)................. 27,000 60,219
Granada Group (Entertainment
and Leisure).................. 10,500 185,695
The Great Universal Stores
(Retailing)................... 7,400 77,246
Kingfisher (Retailing)........... 9,000 97,008
Laporte (Chemicals).............. 7,000 54,092
Lloyds TSB Group (Banking)....... 7,500 106,087
National Power (Utilities)....... 13,500 118,872
Railtrack Group (Transportation). 7,699 200,695
Rolls Royce (Industrial Goods
and Services)................. 17,600 72,087
Royal Bank of Scotland
(Banking)..................... 8,500 136,300
Scottish & Newcastle (Consumer
Products)..................... 5,000 56,505
SmithKline Beecham (Health
and Household)................ 5,000 69,937
Tesco (Retailing)................ 49,500 141,594
United Utilities (Utilities)..... 9,000 124,319
WPP Group (Media)................ 20,000 120,721
---------
2,124,568
---------
TOTAL COMMON STOCKS
(Cost $7,614,257)............. 9,636,862
CONVERTIBLE BONDS -- 0.5%
(Cost $34,019)
JAPAN -- 0.5%
Sanwa International 1 1/4%,
7/31/2005 (Banking)........... 6,000,000** 44,283
---------
TOTAL INVESTMENTS -- 97.9%
(Cost $7,648,276)............. 9,681,145
OTHER ASSETS LESS
LIABILITIES-- 2.1%............ 211,684
----------
NET ASSETS-- 100.0%.............. $9,892,829
==========
- ---------------
* Non-income producing security.
** Principal amount reported in Japanese yen.
See Notes to Financial Statements.
P-43
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO
PRINCIPAL
AMOUNT VALUE
--------- ---------
CORPORATE BONDS -- 81.9%
ADVERTISING -- 0.4%
Adams Outdoor Advertising
10 3/4%, 3/15/2006............... $125,000 $ 135,000
---------
AUTOMOTIVE AND
RELATED -- 0.2%
Diamond Triumph Automotive
9 1/4%, 4/1/2008+................ 60,000 60,000
---------
BROADCASTING -- 1.8%................
Capstar Broadcasting 10 3/4%,
5/15/2006........................ 110,000 121,000
Capstar Broadcasting Partners
0% (12 3/4%**), 2/1/2009......... 250,000 203,750
Cumulus Media 10 3/8%,
7/1/2008......................... 125,000 133,125
Paxson Communications 11 5/8%,
10/1/2002........................ 125,000 128,750
---------
586,625
---------
CABLE SYSTEMS AND
SATELLITE VIDEO -- 7.8%
Avalon Cable Holdings 0%
(11 7/8%**), 12/1/2008+.......... 175,000 98,219
Avalon Cable of Michigan
Holdings 9 3/8%, 12/1/2008+...... 50,000 51,375
Charter Communications
Southeast Holdings 11 1/4%,
3/15/2006........................ 250,000 282,500
Charter Communications
Southeast Holdings 0%
(14%**), 3/15/2007............... 300,000 268,500
CSC Holdings 10 1/2%, 5/15/2016..... 125,000 147,500
Digital Television
12 1/2%, 8/1/2007................ 200,000 219,000
EchoStar DBS 12 1/2%, 7/1/2002...... 350,000 404,250
Intermedia Capital Partners IV,
11 1/4%, 8/1/2006................ 375,000 423,750
Northland Cable Television
10 1/4%, 11/15/2007.............. 150,000 158,625
Pagasus Communications
9 3/4%, 12/1/2006+............... 65,000 65,487
Rogers Cablesystems
11%, 12/1/2015................... 225,000 264,375
TCI Satellite Entertainment
10 7/8%, 2/15/2007............... 400,000 134,000
---------
2,517,581
---------
CELLULAR -- 2.9%
American Cellular
10 1/2%, 5/15/2008+.............. $175,000 $ 169,750
Centennial Cellular
10 3/4%, 12/15/2008+............. 200,000 200,000
Price Communications Cellular
Holdings 11 1/4%, 8/15/2008...... 190,000 180,500
Price Communications Wireless
11 3/4%, 7/15/2007............... 375,000 397,500
---------
947,750
---------
CHEMICALS -- 1.3%
Koppers Industries
9 7/8% 12/1/2007................. 125,000 123,125
Texas Petrochemicals
11 1/8%, 7/1/2006................ 300,000 297,000
---------
420,125
---------
COMPUTER AND RELATED
SERVICES -- 1.9%
DecisionOne 9 3/4%, 8/1/2007........ 275,000 127,875
DecisionOne Holdings
0% (11 1/2%**), 8/1/2008......... 100,000 23,500
Unisys 12%, 4/15/2003............... 175,000 196,875
Unisys 11 3/4%, 10/15/2004.......... 225,000 262,125
---------
610,375
---------
CONSUMER PRODUCTS -- 4.8%
Aki 10 1/2%, 7/1/2008............... 75,000 71,625
Aki Holdings 0% (13 1/2%**),
7/1/2009......................... 75,000 29,625
Albecca 10 3/4%, 8/15/2008+......... 45,000 44,325
Amscan Holdings
9 7/8%, 12/15/2007............... 200,000 185,000
Anchor Advanced Products
11 3/4%, 4/1/2004................ 200,000 218,000
Diamond Brands 0%
(12 7/8%**), 4/15/2009........... 175,000 62,125
Diamond Brands Operating
10 1/8%, 4/15/2008............... 150,000 135,750
French Fragrances
10 3/8%, 5/15/2007............... 200,000 198,000
Global Health Sciences
11%, 5/1/2008.................... 325,000 216,125
Iron Age 9 7/8%, 5/1/2008........... 200,000 171,000
- -------------
+ 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>
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
PRINCIPAL
AMOUNT VALUE
--------- ---------
CONSUMER PRODUCTS (continued)
Iron Age Holdings
0% (12 1/8%**), 5/1/2009......... $ 80,000 $ 36,400
Moll Industries 101 1/42%, 7/1/2008. 125,000 123,125
Windmere-Durable Holdings
10%, 7/31/2008................... 60,000 56,400
---------
1,547,500
---------
CONTAINERS -- 0.6%
U.S. Can 10 1/8%, 10/15/2006........ 200,000 206,000
---------
ENERGY -- 0.8%
Abraxas Petroleum
11 1/2%, 11/1/2004............... 150,000 114,000
Universal Compression Holdings
0% (9 7/8%**), 2/15/2008......... 100,000 60,500
Universal Compression Holdings
0% (11 3/8%**), 2/15/2009........ 150,000 90,000
---------
264,500
---------
EQUIPMENT -- 1.4%
Neff 10 1/4%, 6/1/2008.............. 85,000 83,725
Neff 10 1/4%, 6/1/2008+............. 65,000 64,025
Williams Scotsman
9 7/8%, 6/1/2007................. 280,000 289,100
---------
436,850
---------
FINANCIAL SERVICES -- 1.8%
AMRESCO 10%, 3/15/2004.............. 210,000 149,625
Dollar Financial Group
10 7/8%, 11/15/2006.............. 185,000 187,775
Ocwen Capital Trust I
10 7/8%, 8/1/2027................ 150,000 120,750
Veritas Capital Trust
10%, 1/1/2028.................... 150,000 135,375
---------
593,525
---------
FOOD -- 3.4%
AFC Enterprises
10 1/4%, 5/15/2007............... 200,000 209,000
Agrilink Foods 11 7/8%, 11/1/2008+.. 50,000 51,125
AmeriKing 10 3/4%, 12/1/2006........ 150,000 157,125
AmeriServe Food Distributors
10 1/8%, 7/15/2007............... 350,000 304,500
B&G Foods 9 5/8%, 8/1/2007.......... 120,000 117,600
PRINCIPAL
AMOUNT VALUE
--------- ---------
FOOD (continued)
Carrols 9 1/2%, 12/1/2008+.......... $ 70,000 $ 71,575
Packaged Ice 9 3/4%, 2/1/2005....... 200,000 201,000
---------
1,111,925
---------
GAMING/HOTEL -- 7.1%
Alliance Gaming 10%, 8/1/2007....... 125,000 113,125
Ameristar Casino
10 1/2%, 8/1/2004................ 250,000 228,750
Aztar 13 3/4%, 10/1/2004............ 100,000 111,250
Casino America
12 1/2%, 8/1/2003................ 400,000 445,000
Casino Magic of Louisiana
13%, 8/15/2003................... 150,000 170,250
Coast Hotels & Casinos
13%, 12/15/2002.................. 200,000 225,000
Fitzgerald Gaming
12 1/4%, 12/15/2004.............. 150,000 83,250
Showboat Marina Casino
Partnership 13 1/2%, 3/15/2003... 150,000 170,250
Trump Atlantic City Funding
11 1/4%, 5/1/2006................ 550,000 486,750
Trump Hotels & Casino Resorts
Funding 15 1/2%, 6/15/2005....... 250,000 266,250
---------
2,299,875
---------
HEALTH CARE/MEDICAL
PRODUCTS -- 5.7%
ALARIS Medical
9 3/4%, 12/1/2006................ 250,000 256,250
ALARIS Medical
0% (11 1/8%**), 8/1/2008+........ 300,000 165,000
Alliance Imaging
9 5/8%, 12/15/2005............... 115,000 114,425
Dade International
11 1/8%, 5/1/2006................ 275,000 306,625
Everest Healthcare Services
9 3/4%, 5/1/2008................. 200,000 199,000
Graphic Controls
12%, 9/15/2005................... 125,000 144,375
Paracelsus Healthcare
10%, 8/15/2006................... 275,000 248,875
Sun Healthcare Group
9 1/2%, 7/1/2007................. 280,000 228,200
Vencor 9 7/8%, 5/1/2005............. 200,000 173,000
---------
1,835,750
---------
- ----------------
+ 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)
PRINCIPAL
AMOUNT VALUE
-------- ---------
INDUSTRIAL/
MANUFACTURING -- 3.3%
Airxcel 11%, 11/15/2007............. $ 250,000 $ 252,500
Alliance Laundry Systems
9 5/8%, 5/1/2008+................ 150,000 144,750
BPC Holding 12 1/2%, 6/15/2006...... 150,000 156,750
Coyne International Enterprises
11 1/4%, 6/1/2008................ 130,000 128,050
Day International Group
9 1/2%, 3/15/2008................ 150,000 147,375
Great Lakes Acquisition
0% (13 1/8%**), 5/15/2009........ 75,000 38,625
Great Lakes Carbon
10 1/4%, 5/15/2008............... 200,000 202,500
---------
1,070,550
---------
LEISURE -- 1.6%
Affinity Group Holding
11%, 4/1/2007.................... 250,000 260,000
AMF Bowling Worldwide
0% (12 1/4%**), 3/15/2006........ 175,000 100,625
AMF Group 10 7/8%, 3/15/2006........ 50,000 40,750
Premier Parks
9 1/4%, 4/1/2006................. 125,000 129,844
---------
531,219
---------
METALS -- 0.9%
Renco Metals 11 1/2%, 7/1/2003...... 175,000 181,125
Royal Oak Mines 12 3/4%,
8/15/2006........................ 225,000 113,625
---------
294,750
---------
PAGING -- 5.0%
Metrocall 9 3/4%, 11/1/2007......... 300,000 288,000
Metrocall 11%, 9/15/2008+........... 240,000 242,400
Mobile Telecommunication
Technologies 13 1/2%,
12/15/2002....................... 225,000 255,938
Paging Network
10%, 10/15/2008.................. 575,000 554,875
ProNet 11 7/8%, 6/15/2005........... 250,000 266,250
---------
1,607,463
---------
PAPER AND PACKAGING -- 0.6%
Crown Paper 11%, 9/1/2005........... 225,000 199,125
---------
PRINCIPAL
AMOUNT VALUE
-------- ---------
PRINTING AND
PUBLISHING -- 5.1%
Advanstar Communications
9 1/4%, 5/1/2008................. $ 200,000 $ 202,000
American Lawyer Media
9 3/4%, 12/15/2007............... 175,000 180,687
American Lawyer Media
Holdings 0% (12 1/4%**),
12/15/2008....................... 60,000 37,200
Liberty Group Publishing
9 3/8%, 2/1/2008................. 150,000 147,750
Liberty Group Publishing
0% (11 5/8%**), 2/1/2009......... 275,000 152,625
NBC Acquisition
0% (10 3/4%**), 2/15/2009........ 365,000 211,700
Perry-Judd 10 5/8%, 12/15/2007...... 165,000 174,075
Regional Independent Media
Group 10 1/2%, 7/1/2008.......... 225,000 228,375
TransWestern Holdings
0% (11 7/8%**), 11/15/2008....... 255,000 169,575
Von Hoffman Press
10 7/8%, 5/15/2007+.............. 125,000 129,375
---------
1,633,362
---------
RECORD STORAGE -- 0.3%
Pierce Leahy 11 1/8%, 7/15/2006..... 75,000 83,250
---------
RETAILING -- 2.3%
Central Tractor 10 5/8%, 4/1/2007... 175,000 180,250
Cole National Group
9 7/8%, 12/31/2006............... 100,000 104,000
Frank's Nursery & Crafts
10 1/4%, 3/1/2008................ 90,000 89,100
Musicland Group
9 7/8%, 3/15/2008................ 200,000 195,000
TM Group Holdings
11%, 5/15/2008+.................. 175,000 175,875
---------
744,225
---------
SUPERMARKETS -- 1.9%
Jitney-Jungle Stores of America
12%, 3/1/2006.................... 150,000 168,000
Jitney-Jungle Stores of America
10 3/8%, 9/15/2007............... 200,000 206,000
Pathmark Stores
11 5/8%, 6/15/2002............... 240,000 234,000
---------
608,000
---------
- --------------
+ 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-46
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
PRINCIPAL
AMOUNT OR
WARRANTS VALUE
---------- ---------
TECHNOLOGY -- 3.9%
Advanced Micro Devices
11%, 8/1/2003.................... $ 375,000 $ 401,250
Hadco 9 1/2%, 6/15/2008............. 200,000 199,000
MCMS 9 3/4%, 3/1/2008............... 225,000 191,250
Therma-Wave
10 5/8%, 5/15/2004............... 150,000 75,750
Viasystems 9 3/4%, 6/1/2007......... 400,000 376,000
---------
1,243,250
---------
TELECOMMUNICATIONS -- 12.9%
BTI Telecom
10 1/2%, 9/15/2007............... 275,000 202,125
CapRock Communications
12%, 7/15/2008................... 125,000 116,250
Crown Castle International
0% (10 5/8%**),11/15/2007........ 200,000 141,000
Exodus Communications
11 1/4%, 7/1/2008................ 55,000 55,275
Facilicom International
10 1/2%, 1/15/2008............... 325,000 261,625
GCI 9 3/4%, 8/1/2007................ 175,000 174,125
GlobalStar 11 1/4%, 6/15/2004....... 275,000 209,000
GlobalStar 10 3/4%, 11/1/2004....... 75,000 54,000
Golden Sky Systems
12 3/8%, 8/1/2006+............... 325,000 338,000
ICG Holdings 0% (11 5/8%**),
3/15/2007........................ 175,000 113,750
IXC Communications
9%, 4/15/2008.................... 100,000 100,750
Nextel Communications
0% (10.65%**), 9/15/2007......... 215,000 138,137
NEXTLINK Communications
12 1/2%, 4/15/2006............... 350,000 379,750
ORBCOMM Global
14%, 8/15/2004................... 80,000 82,800
Pinnacle Holdings
0% (10%**), 3/15/2008............ 590,000 346,625
Powertel 11 1/8%, 6/1/2007.......... 250,000 250,000
PSINet 10%, 2/15/2005............... 175,000 174,125
RCN 10%, 10/15/2007................. 175,000 168,000
Splitrock Services
11 3/4%, 7/15/2008............... 55,000 47,850
Splitrock Services (warrants
expiring 7/15/2008)*............. 55 wts. 605
PRINCIPAL
AMOUNT,
SHARES,
OR WARRANTS VALUE
----------- ---------
TELECOMMUNICATIONS (continued)
Talton Holdings 11%,
6/30/2007........................ $200,000 $ 191,000
Verio 10 3/8%, 4/1/2005............. 125,000 123,125
Verio 11 1/4%, 12/1/2008+........... 140,000 141,400
Verio 13 1/2%, 6/15/2004............ 200,000 217,000
Verio (warrants expiring
6/15/2004)*...................... 800 wts. 28,000
Viatel 11 1/4%, 4/15/2008........... $ 90,000 92,475
---------
4,146,792
---------
TEXTILES -- 0.3%
Tropical Sportswear International
11%, 6/15/2008................... 100,000 105,750
---------
THEATERS -- 0.6%
Hollywood Theaters
10 5/8%, 8/1/2007................ 250,000 185,625
---------
TRANSPORTATION -- 0.8%
Atlas Air 10 3/4%, 8/1/2005......... 240,000 253,200
---------
UTILITIES -- 0.5%
Midland Cogeneration Venture
11 3/4%, 7/23/2005............... 125,000 147,269
---------
TOTAL CORPORATE BONDS
(Cost $28,042,831).............. 26,427,211
----------
PREFERRED STOCKS -- 6.8%
BROADCASTING -- 1.3%
Capstar Broadcasting Partners
12%.............................. 978 shs. 111,737
Capstar Communications 12 5/8%...... 375 45,375
Cumulus Media 13 3/4%............... 77 82,967
Sinclair Capital 11 5/8%............ 1,500 163,875
---------
403,954
---------
CABLE SYSTEMS -- 0.7%
Pegasus Communications
12 3/4% (Series A)............... 164 172,610
Pegasus Communications
12 3/4% (units).................. 50 50,750
---------
223,360
---------
- ---------------------
* Non-income producing security.
** Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
+ Rule 144A security.
See Notes to Financial Statements.
P-47
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued)
SHARES VALUE
-------- ---------
CELLULAR -- 0.5%
Rural Cellular 11 3/8%.............. 185 $ 172,623
---------
FOOD -- 0.4%
Nebco Evans 11 1/4%................. 2,712 136,279
---------
HEALTH CARE/MEDICAL
PRODUCTS -- 0.3%
River Holding 11 1/2%............... 1,722 103,750
---------
INDUSTRIAL/
MANUFACTURING -- 0.3%
Day International Group 12 1/4%..... 109 100,553
---------
PRINTING AND
PUBLISHING -- 0.8%
Liberty Group Publishing 14 3/4%.... 9,534 240,735
---------
TECHNOLOGY -- 0.3%
MCMS 12 1/2%........................ 1,230 98,093
---------
TELECOMMUNICATIONS -- 2.2%
Crown Castle International
12 3/4%.......................... 155 156,356
Global Crossing Holding
10 1/2%.......................... 750 73,688
IXC Communications 12 1/2%.......... 137 140,646
Nextel Communications 11 1/8%....... 269 242,773
NEXTLINK Communications
14%.............................. 1,587 84,508
---------
697,971
---------
TOTAL PREFERRED STOCKS
(Cost $2,417,652)................ 2,177,318
-----------
SHARES OR
PRINCIPAL
AMOUNT VALUE
-------- ---------
CONVERTIBLE PREFERRED
STOCKS -- 0.8%
BROADCASTING -- 0.6%
Chancellor Media $3................. 875 shs. $ 81,703
Chancellor Media $3+................ 1,250 116,719
----------
198,422
----------
TELECOMMUNICATIONS -- 0.2%
IXC Communications 6 3/4%+.......... 1,160 38,425
Viatel 10%.......................... 34 3,842
----------
42,267
----------
TOTAL CONVERTIBLE PREFERRED
STOCKS
(Cost $187,690).................. 240,689
----------
REPURCHASE AGREEMENT -- 6.8%
(Cost $2,200,000)
State Street Bank and Trust
4.45%, dated 12/31/1998,
maturing 1/4/1999
collateralized by: $1,650,000
US Treasury Notes 11 5/8%,
11/15/2004, with a fair market
value of $2,245,944.............. $2,200,000 2,200,000
----------
TOTAL INVESTMENTS -- 96.3%
(Cost $32,848,173).............. 31,045,218
OTHER ASSETS LESS
LIABILITIES-- 3.7%............... 1,207,590
----------
NET ASSETS-- 100.0%................. $32,252,808
===========
- --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 35.2%
AEROSPACE -- 0.6%
General Dynamics................. 1,500 $ 87,938
---------
AUTOMOTIVE AND
RELATED -- 1.4%
DaimlerChrysler.................. 2,199 211,241
---------
BANKING AND FINANCE -- 4.5%
Bank of New York................. 4,400 177,100
BankAmerica...................... 1,018 61,207
SHARES VALUE
-------- ---------
BANKING AND FINANCE
(continued)
Citigroup........................ 2,000 $99,000
Hartford Financial Services
Group......................... 2,200 120,725
Morgan (J.P.).................... 250 26,266
Washington Mutual................ 4,536 173,218
---------
657,516
---------
BUSINESS SERVICES -- 0.3%
Electronic Data Systems.......... 850 42,712
---------
- ------------
+ Rule 144A security.
See Notes to Financial Statements.
P-48
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
SHARES VALUE
-------- ---------
CAPITAL GOODS -- 0.2%
Crown Cork & Seal................ 1,000 $ 30,813
---------
CHEMICALS -- 0.5%
duPont (E.I.) de Nemours......... 1,300 68,981
---------
CONSUMER GOODS AND
SERVICES -- 4.5%
Anheuser-Busch................... 1,400 91,875
General Mills.................... 2,500 194,375
Russell.......................... 3,600 73,125
Sara Lee......................... 8,600 242,412
Stanley Works.................... 2,100 58,275
---------
660,062
---------
DRUGS AND HEALTH
CARE -- 3.0%
American Home Products........... 2,200 123,888
Baxter International............. 800 51,450
Bristol-Myers Squibb............. 2,000 267,625
---------
442,963
---------
ELECTRIC AND GAS
UTILITIES -- 4.5%
FPL Group........................ 2,500 154,062
Sonat............................ 4,700 127,194
Unicom........................... 4,700 181,244
Williams Companies............... 6,000 187,125
---------
649,625
---------
ENERGY -- 4.3%
BP Amoco (ADRs)
(United Kingdom).............. 650 58,256
Exxon............................ 1,900 138,937
Mobil............................ 1,900 165,538
Royal Dutch Petroleum
(Netherlands)................. 2,300 110,112
Unocal........................... 5,100 148,856
---------
621,699
---------
FOOD -- 0.5%
ConAgra.......................... 2,400 75,600
---------
INSURANCE -- 2.6%
American General................. 2,200 171,600
Chubb............................ 1,200 77,850
Lincoln National................. 1,500 122,719
---------
372,169
---------
SHARES OR
PRINCIPAL
AMOUNT VALUE
-------- ---------
MACHINERY AND
EQUIPMENT -- 1.2%
GATX............................. 4,800 shs. $ 181,800
---------
PAPER AND PACKAGING -- 0.4%
Mead............................. 1,800 52,763
---------
RETAILING -- 0.8%
May Department Stores............ 1,900 114,712
---------
TOBACCO -- 1.6%
Philip Morris.................... 4,400 235,400
---------
TRANSPORTATION -- 0.4%
Norfolk Southern................. 1,800 57,038
---------
UTILITIES/
TELECOMMUNICATIONS -- 3.9%
DQE.............................. 1,700 74,694
GTE.............................. 3,700 249,519
Harris........................... 1,000 36,625
SBC Communications............... 4,000 214,500
---------
575,338
---------
TOTAL COMMON STOCKS
(Cost $4,320,812)............. 5,138,370
---------
CORPORATE BONDS -- 31.9%
AUTOMOTIVE -- 3.9%
Chrysler Financial
6.09%, 4/6/2001................ $300,000 304,952
Ford Motor Credit
6 3/4%, 8/15/2008.............. 250,000 266,009
---------
570,961
---------
BANKING AND
FINANCE -- 7.4%
Associates Corp. of North
America 6 1/2%, 8/15/2002...... 300,000 310,023
Capital One Bank
8 1/8%, 3/1/2000............... 250,000 254,428
First USA Bank
5 3/4%, 1/15/1999.............. 100,000 100,001
GMAC 6 1/2%, 12/5/2005............ 200,000 210,053
Heller Financial
5 7/8%, 11/1/2000.............. 200,000 199,887
---------
1,074,392
---------
- ----------------
See Notes to Financial Statements.
P-49
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN INCOME PORTFOLIO (continued)
PRINCIPAL
AMOUNT VALUE
-------- ---------
ELECTRIC AND GAS
UTILITIES -- 2.1%
Consumers Energy
6 3/8%, 2/1/2008................. $300,000 $ 302,998
---------
ENERGY -- 2.9%
Petroleum Geo-Services
7 1/2%, 3/31/2007................ 400,000 426,184
---------
FUNERAL SERVICES -- 1.8%
Loewen Group International
7 1/2%, 4/15/2001................ 300,000 268,500
---------
MEDIA -- 6.1%
Time Warner 7 3/4%, 6/15/2005....... 500,000 555,022
Viacom 7 3/4%, 6/1/2005............. 300,000 327,992
---------
883,014
---------
TECHNOLOGY -- 4.9%
Dell Computer 6.55%,
4/15/2008........................ 400,000 416,222
First Data 5.80%, 12/15/2008........ 100,000 99,085
International Business Machines
5.37%, 9/22/2003................ 200,000 202,312
---------
717,619
---------
UTILITIES/
TELECOMMUNICATIONS -- 2.8%
MCI WorldCom 6.40%,
8/15/2005........................ 200,000 207,568
Sprint Capital 6 1/8%, 11/15/2008... 200,000 204,446
---------
412,014
---------
TOTAL CORPORATE BONDS
(Cost $4,581,625)................ 4,655,682
---------
US GOVERNMENT AND GOVERNMENT AGENCY SECURITIES -- 26.8% US GOVERNMENT SECURITIES
- -- 13.6% US Treasury Notes:
6 1/4%, 6/30/2002................ 300,000 314,906
6 1/2%, 5/15/2005................ 500,000 548,125
6 1/2%, 10/15/2006............... 500,000 555,157
6 5/8%, 5/15/2007................ 500,000 562,500
---------
PRINCIPAL
AMOUNT
OR SHARES VALUE
--------- ---------
Total US Government
Securities
(Cost $1,873,774)................ $1,980,688
---------
US GOVERNMENT
AGENCY SECURITIES -- 13.2%
US Government Title XI
(Bay Transportation) 7.30%,
6/1/2021......................... $200,000 218,456
FHLMC Gold 5 1/2%, 7/1/2013++....... 297,919 294,289
Federal National Mortgage
Association:
5.90%, 6/19/2003................. 300,000 304,019
6.35%, 5/18/2005................. 300,000 307,076
5.795%, 1/1/2009................. 200,000 201,000
6%, 12/1/2028++.................. 200,000 197,438
Government National Mortgage
Association, Mortgage-backed
Passed-through Certificates:++
6 1/2%, 12/15/2028............... 200,000 202,188
6%, 12/20/2028................... 200,000 198,250
---------
Total US Government Agency
Securities (Cost $1,902,347)..... 1,922,716
---------
TOTAL US GOVERNMENT
AND GOVERNMENT
AGENCY SECURITIES
(Cost $3,776,121)................ 3,903,404
---------
CONVERTIBLE PREFERRED
STOCKS -- 4.4%
BANKING AND FINANCE -- 2.4%
Salomon Smith Barney 7 5/8%......... 7,500 shs. 345,000
---------
INSURANCE -- 2.0%
St. Paul Capital 6%................. 4,500 290,250
---------
TOTAL CONVERTIBLE PREFERRED
STOCKS (Cost $439,020)........... 635,250
---------
TOTAL INVESTMENTS -- 98.3%
(Cost $13,117,578)............... 14,332,706
OTHER ASSETS LESS
LIABILITIES-- 1.7%............... 249,519
---------
NET ASSETS-- 100.0%.............. $14,582,225
===========
- ----------------
++ 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-50
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN LARGE-CAP VALUE PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 97.4%
AEROSPACE -- 4.7%
Goodrich (B.F.).................. 5,000 $ 179,375
---------
AUTOMOTIVE AND
RELATED -- 6.9%
Ford Motor....................... 2,100 123,244
General Motors................... 2,000 143,125
---------
266,369
---------
BANKING -- 11.0%
Bank of New York................. 4,000 161,000
BankAmerica...................... 2,205 132,576
Summit Bancorp................... 3,000 131,062
---------
424,638
---------
DRUGS AND
HEALTH CARE -- 7.7%
Bristol-Myers Squibb............. 1,100 147,194
United Healthcare................ 3,500 150,719
---------
297,913
---------
ENERGY -- 2.8%
Texaco........................... 2,000 105,750
---------
FINANCE AND
INSURANCE -- 16.0%
Citigroup........................ 2,100 103,950
The Equitable Companies.......... 2,700 156,262
Fannie Mae....................... 1,600 118,400
St. Paul Companies............... 3,000 104,250
Washington Mutual................ 3,425 130,792
---------
613,654
---------
FOOD -- 2.7%
Dole Food........................ 3,500 105,000
---------
HOUSEHOLD PRODUCTS
AND FURNISHINGS -- 8.9%
Armstrong World Industries....... 1,600 96,500
Dial............................. 4,400 127,050
Kimberly-Clark................... 2,200 119,900
---------
343,450
---------
SHARES VALUE
-------- ---------
INDUSTRIAL EQUIPMENT -- 2.7%
General Electric................. 1,000 $ 102,063
---------
MEDICAL PRODUCTS AND
TECHNOLOGY -- 3.3%
Baxter International............. 2,000 128,625
---------
OFFICE EQUIPMENT -- 3.7%
Xerox............................ 1,200 141,600
---------
PACKAGING -- 2.7%
Crown Cork & Seal................ 3,400 104,762
---------
PAPER AND FOREST
PRODUCTS -- 6.6%
Champion International........... 2,900 117,450
Georgia-Pacific Group............ 2,350 137,622
---------
255,072
---------
RETAIL TRADE -- 10.8%
May Department Stores............ 1,900 114,713
Penney (J.C.).................... 2,750 128,906
Sears, Roebuck................... 4,000 170,000
---------
413,619
---------
SPECIALTY MATERIALS -- 2.9%
Raychem.......................... 3,450 111,478
---------
TOBACCO -- 4.0%
Philip Morris.................... 2,850 152,475
---------
TOTAL INVESTMENTS -- 97.4%
(Cost $3,637,303)............. 3,745,843
OTHER ASSETS LESS
LIABILITIES-- 2.6%............ 99,980
----------
NET ASSETS-- 100.0%.............. $3,845,823
==========
- --------------
See Notes to Financial Statements.
P-51
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
PORTFOLIOS OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SELIGMAN SMALL-CAP VALUE PORTFOLIO
SHARES VALUE
-------- ---------
COMMON STOCKS -- 98.1%
ADVERTISING -- 3.8%
True North Communications........ 3,500 $ 94,062
---------
APPAREL AND
TEXTILES -- 4.9%
Cutter & Buck*................... 3,250 121,672
---------
APPLIANCES -- 4.2%
Windmere-Durable Holdings........ 13,500 104,625
---------
BANKING -- 2.8%
Bay View Capital................. 3,200 69,000
---------
BUILDING AND
CONSTRUCTION -- 2.5%
Dal-Tile International*.......... 6,000 62,250
---------
CAPITAL GOODS -- 4.4%
Apogee Enterprises............... 5,200 58,500
BMC Industries................... 8,100 50,625
---------
109,125
---------
COMPUTER SOFTWARE -- 2.5%
Dialogic*........................ 3,100 60,934
---------
DISTRIBUTORS -- 5.4%
Cubic............................ 3,050 57,187
Elsag Bailey Process Auto (ADRs)*
(Netherlands).................. 1,950 76,294
---------
133,481
---------
FINANCE AND INSURANCE -- 3.6%
AMRESCO*......................... 10,000 87,812
---------
GARDEN PRODUCTS -- 3.0%
Acorn Products*.................. 10,700 72,894
---------
INDUSTRIAL GOODS AND
SERVICES -- 3.5%
Furon............................ 5,000 85,313
---------
MACHINERY -- 3.8%
Stewart & Stevenson Services..... 9,700 93,059
---------
SHARES VALUE
-------- ---------
MANUFACTURING -- 3.0%
Mueller Industries*.............. 3,700 $ 75,156
---------
MEDICAL PRODUCTS AND
TECHNOLOGY -- 3.8%
ChiRex*.......................... 4,400 93,500
---------
OIL AND GAS -- 5.1%
Friede Goldman International*.... 5,200 59,150
Marine Drilling*................. 8,800 67,650
---------
126,800
---------
PACKAGING/
CONTAINERS -- 3.3%
Applied Extrusion
Technologies*................. 10,000 81,250
---------
PLASTICS -- 3.2%
Lamson & Sessions*............... 15,500 79,438
---------
PRINTING AND
PUBLISHING -- 5.6%
Cadmus Communications............ 3,050 58,141
Merrill.......................... 4,200 81,112
---------
139,253
---------
RESTAURANTS -- 5.7%
Avado Brands..................... 7,600 63,650
Foodmaker*....................... 3,450 76,116
---------
139,766
---------
RETAIL TRADE -- 8.8%
Abercrombie & Fitch (Class A)*... 1,000 70,750
Stage Stores*.................... 7,500 70,312
The Wet Seal (Class A)*.......... 2,500 75,469
---------
216,531
---------
SPECIALTY CHEMICALS -- 2.2%
Dexter........................... 1,750 55,016
---------
SPECIALTY
METALS/STEEL -- 1.6%
Olympic Steel*................... 8,000 40,125
---------
TOBACCO -- 3.4%
Consolidated Cigar Holding*...... 4,800 84,900
---------
- --------------
* Non-income producing security.
See Notes to Financial Statements.
P-52
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
SELIGMAN SMALL-CAP VALUE PORTFOLIO (continued)
SHARES VALUE
-------- ---------
TRANSPORTATION -- 8.0%
ABC Rail Products*............... 7,000 $ 85,969
Pittston BAX Group............... 10,000 111,250
---------
197,219
---------
TOTAL INVESTMENTS -- 98.1%
(Cost $2,587,518)............. 2,423,181
VALUE
----------
OTHER ASSETS LESS
LIABILITIES-- 1.9%............ $45,750
----------
NET ASSETS-- 100.0%.............. $2,468,931
==========
- -------------
* Non-income producing security.
See Notes to Financial Statements.
P-53
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN
SELIGMAN SELIGMAN COMMUNICATIONS
SELIGMAN SELIGMAN CASH COMMON AND
BOND CAPITAL MANAGEMENT STOCK INFORMATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Long-term holdings................. $6,694,244 $23,240,892 $ -- $56,781,324 $120,728,001
Short-term holdings................ 400,000 1,000,000 10,391,590 5,400,000 600,000
---------- ----------- ----------- ----------- ------------
Total Investments 7,094,244 24,240,89 10,391,590 62,181,324 121,328,001
Cash............................... 77,844 97,894 118,378 67,770 73,789
Interest and dividends
receivable...................... 97,222 4,867 19,229 86,436 10,994
Receivable for Capital
Stock sold...................... 67,486 -- 2,301 310,309 12,978
Receivable from associated
companies....................... 4,409 -- 7,009 -- --
Receivable for securities sold..... -- 714,472 -- -- 2,448,223
---------- ----------- ----------- ----------- ------------
TOTAL ASSETS....................... 7,341,205 25,058,125 10,538,507 62,645,839 123,873,985
---------- ----------- ----------- ----------- ------------
LIABILITIES:
Payable for Capital Stock
redeemed........................ 56 40,058 29 513 840,331
Payable for securities purchased... -- 847,446 -- -- 632,714
Unrealized depreciation on
foreign currencies and
forward currency contracts...... -- -- -- -- --
Accrued expenses, taxes,
and other....................... 20,793 29,927 18,583 57,268 122,009
---------- ----------- ----------- ----------- ------------
TOTAL LIABILITIES.................. 20,849 917,431 18,612 57,781 1,595,054
---------- ----------- ----------- ----------- ------------
NET ASSETS......................... $7,320,356 $24,140,694 $10,519,895 $62,588,058 $122,278,931
========== =========== =========== =========== ============
COMPOSITION OF NET ASSETS:
Capital Stock, at par.............. $ 705 $ 1,160 $ 10,519 $ 3,360 $ 7,132
Additional paid-in-capital......... 7,065,028 17,101,537 10,508,236 46,881,737 99,821,375
Undistributed/accumulated net
investment income (loss)........ (4,509) (5,145) -- (5,229) (2,533)
Undistributed/accumulated net
realized gain (loss)............ -- 481,840 1,140 (4,074) 3,659
Net unrealized appreciation
(depreciation) of investments... 259,132 6,561,302 -- 15,712,264 22,449,298
Net unrealized appreciation
(depreciation) on translation
of assets and liabilities deno-
minated in foreign currencies and
forward currency contracts...... -- -- -- -- --
---------- ----------- ----------- ----------- ------------
NET ASSETS......................... $7,320,356 $24,140,694 $10,519,895 $62,588,058 $122,278,931
========== =========== =========== =========== ============
SHARES OF CAPITAL STOCK
OUTSTANDING
($.001 par value)............... 705,129 1,160,023 10,518,755 3,360,130 7,132,343
========== =========== =========== =========== ============
NET ASSET VALUE PER SHARE.......... $10.38 $20.81 $1.00 $18.63 $17.14
========== =========== =========== =========== ============
</TABLE>
- ----------------------------
See Notes to Financial Statements.
P-54
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
HENDERSON HENDERSON HENDERSON SELIGMAN
SELIGMAN GLOBAL GROWTH GLOBAL SMALLER GLOBAL HENDERSON
FRONTIER OPPORTUNITIES COMPANIES TECHNOLOGY INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Long-term holdings................. $38,611,861 $8,127,428 $20,540,017 $5,740,044 $9,681,145
Short-term holdings................ 1,900,000 -- -- -- --
----------- ---------- ----------- ---------- ----------
Total Investments 40,511,861 8,127,428 20,540,017 5,740,044 9,681,145
Cash............................... 63,831 644,561 311,060 429,258 230,849
Interest and dividends
receivable...................... 2,201 10,390 36,130 4,880 35,780
Receivable for Capital
Stock sold...................... 497 -- 1,893 2,727 --
Receivable from associated
companies....................... -- -- 6,222 2,670 262
Receivable for securities sold..... -- -- 78,597 12,191 2,503
----------- ---------- ----------- ---------- ----------
TOTAL ASSETS....................... 40,578,390 8,782,379 20,973,919 6,191,770 9,950,539
----------- ---------- ----------- ---------- ----------
LIABILITIES:
Payable for Capital Stock
redeemed........................ 1,207,750 6,829 -- 34,431 3,695
Payable for securities purchased... 173,004 100,271 86,553 -- --
Unrealized depreciation on
foreign currencies and
forward currency contracts...... -- 10,067 35,075 8,730 24,636
Accrued expenses, taxes,
and other....................... 49,965 21,917 38,229 18,638 29,379
----------- ---------- ----------- ---------- ----------
TOTAL LIABILITIES.................. 1,430,719 139,084 159,857 61,799 57,710
----------- ---------- ----------- ---------- ----------
NET ASSETS......................... $39,147,671 $8,643,295 $20,814,062 $6,129,971 $9,892,829
=========== ========== =========== ========== ==========
COMPOSITION OF NET ASSETS:
Capital Stock, at par.............. $ 2,517 $ 649 $ 1,528 $ 442 $ 644
Additional paid-in-capital......... 36,334,865 7,075,238 19,423,247 4,935,072 7,869,584
Undistributed/accumulated net
investment income (loss)........ (2,403) (1,513) (2,344) (1,509) (3,713)
Undistributed/accumulated net
realized gain (loss)............ (1,123,646) (367,113) (274,496) 57,662 17,083
Net unrealized appreciation
(depreciation) of investments... 3,936,338 1,816,901 1,585,902 1,095,960 1,842,381
Net unrealized appreciation
(depreciation) on translation
of assets and liabilities deno-
minated in foreign currencies and
forward currency contracts...... -- 119,133 80,225 42,344 166,850
----------- ---------- ----------- ---------- ----------
NET ASSETS......................... $39,147,671 $8,643,295 $20,814,062 $6,129,971 $9,892,829
=========== ========== =========== ========== ==========
SHARES OF CAPITAL STOCK
OUTSTANDING
($.001 par value)............... 2,516,965 648,509 1,528,209 442,463 643,753
=========== ========== =========== ========== ==========
NET ASSET VALUE PER SHARE.......... $15.55 $13.33 $13.62 $13.85 $15.37
=========== ========== =========== ========== ==========
</TABLE>
- -------------------------
See Notes to Financial Statements.
P-54a
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
HIGH-YIELD SELIGMAN LARGE-CAP SMALL-CAP
BOND INCOME VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (see
portfolios of investments):
Long-term holdings................. $28,845,218 $14,332,706 $3,745,843 $2,423,181
Short-term holdings................ 2,200,000 -- -- --
----------- ----------- ---------- ----------
Total Investments 31,045,218 14,332,706 3,745,843 2,423,181
Cash............................... 92,190 180,630 122,886 54,395
Interest and dividends
receivable...................... 726,955 111,042 5,437 1,102
Receivable for Capital
Stock sold...................... 417,318 11,946 -- --
Receivable from associated
companies....................... -- 847 1,043 1,363
Receivable for securities sold..... 5,354 -- -- --
----------- ----------- ---------- ----------
TOTAL ASSETS....................... 32,287,035 14,637,171 3,875,209 2,480,041
----------- ----------- ---------- ----------
LIABILITIES:
Payable for Capital Stock
redeemed........................ -- 30,729 18,165 858
Payable for securities purchased... -- -- -- --
Unrealized depreciation on
foreign currencies and
forward currency contracts...... -- -- -- --
Accrued expenses, taxes,
and other....................... 34,227 24,217 11,221 10,252
----------- ----------- ---------- ----------
TOTAL LIABILITIES.................. 34,227 54,946 29,386 11,110
----------- ----------- ---------- ----------
NET ASSETS......................... $32,252,808 $14,582,225 $3,845,823 $2,468,931
=========== =========== ========== ==========
COMPOSITION OF NET ASSETS:
Capital Stock, at par.............. $ 2,966 $ 1,324 $ 398 $ 338
Additional paid-in-capital......... 34,040,154 13,444,085 3,771,795 2,633,353
Undistributed/accumulated net
investment income (loss)........ 19,492 (3,094) (420) (423)
Undistributed/accumulated net
realized gain (loss)............ (6,849) (75,218) (34,490) --
Net unrealized appreciation
(depreciation) of investments... (1,802,955) 1,215,128 108,540 (164,337)
Net unrealized appreciation
(depreciation) on translation
of assets and liabilities deno-
minated in foreign currencies and
forward currency contracts...... -- -- -- --
----------- ----------- ---------- ----------
NET ASSETS......................... $32,252,808 $14,582,225 $3,845,823 $2,468,931
=========== =========== ========== ==========
SHARES OF CAPITAL STOCK
OUTSTANDING
($.001 par value)............... 2,965,856 1,324,302 398,168 337,678
=========== =========== ========== ==========
NET ASSET VALUE PER SHARE.......... $10.87 $11.01 $9.66 $7.31
=========== =========== ========== ==========
</TABLE>
- -----------------------
See Notes to Financial Statements.
P-55
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN
SELIGMAN SELIGMAN COMMUNICATIONS
SELIGMAN SELIGMAN CASH COMMON AND
BOND CAPITAL MANAGEMENT STOCK INFORMATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest........................... $424,426 $ 75,340 $540,798 $ 170,116 $ 229,459
Dividends.......................... -- 93,947 -- 1,021,009 78,079
-------- ---------- -------- ----------- -----------
TOTAL INVESTMENT INCOME**.......... 424,426 169,287 540,798 1,191,125 307,538
-------- ---------- -------- ----------- -----------
EXPENSES:
Management fee..................... 27,438 86,101 40,831 224,301 748,401
Custody and related services....... 7,576 13,731 4,331 18,893 55,629
Auditing fee....................... 6,166 10,666 8,266 22,966 35,666
Directors' fees and expenses....... 5,021 5,214 5,062 5,651 6,175
Shareholder reports and
communications.................. 3,937 3,937 3,937 3,937 1,921
Registration....................... 2,938 4,170 3,101 6,548 8,478
Legal fee.......................... 1,265 1,311 1,245 1,414 1,543
Miscellaneous...................... 2,320 3,719 1,862 6,573 9,685
-------- ---------- -------- ----------- -----------
TOTAL EXPENSES BEFORE
WAIVER/REIMBURSEMENT............ 56,661 128,849 68,635 290,283 867,498
Waiver/reimbursement of
expenses........................ (15,486) -- (68,635) -- --
-------- ---------- -------- ----------- -----------
TOTAL EXPENSES AFTER
WAIVER/REIMBURSEMENT............ 41,175 128,849 -- 290,283 867,498
-------- ---------- -------- ----------- -----------
NET INVESTMENT INCOME (LOSS)....... 383,251 40,438 540,798 900,842 (559,960)
-------- ---------- -------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) on
investments..................... 123,784 1,655,402 1,53 3,819,226 5,762,699
Net realized gain (loss) from
foreign currency transactions... -- -- -- -- --
Net change in unrealized
appreciation/depreciation
of investments.................. 37,175 2,577,044 -- 7,459,005 28,175,377
Net change in unrealized
depreciation on translation of
assets and liabilities denominated
in foreign currencies and
forward currency contracts...... -- -- -- -- --
-------- ---------- -------- ----------- -----------
NET GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS.................... 160,959 4,232,446 1,538 11,278,231 33,938,076
-------- ---------- -------- ----------- -----------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS.......... $544,210 $4,272,884 $542,336 $12,179,073 $33,378,116
======== ========== ======== =========== ===========
<FN>
- --------------------
* For the period May 1, 1998, commencement of operations, to December 31, 1998.
** Net of foreign tax withheld
as follows: $ -- $ 281 $ -- $ 4,562 $ 1,877
See Notes to Financial Statements.
</FN>
</TABLE>
P-56
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
HENDERSON HENDERSON HENDERSON SELIGMAN
SELIGMAN GLOBAL GROWTH GLOBAL SMALLER GLOBAL HENDERSON
FRONTIER OPPORTUNITIES COMPANIES TECHNOLOGY INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest........................... $ 126,546 $ 26,258 $ 65,266 $ 25,410 $ 19,011
Dividends.......................... 50,634 72,454 223,528 22,181 172,921
--------- ---------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME**.......... 177,180 98,712 288,794 47,591 191,932
--------- ---------- ---------- ---------- ----------
EXPENSES:
Management fee..................... 323,502 73,741 215,796 49,036 100,225
Custody and related services....... 38,105 22,615 81,743 20,281 56,636
Auditing fee....................... 15,666 6,166 10,666 5,366 6,866
Directors' fees and expenses....... 5,477 4,902 5,155 4,878 5,035
Shareholder reports and
communications.................. 1,921 1,887 1,887 1,887 1,887
Registration....................... 4,137 3,050 3,929 2,914 3,317
Legal fee.......................... 1,383 1,420 1,441 1,415 1,423
Miscellaneous...................... 5,502 4,186 3,590 2,675 3,006
--------- ---------- ---------- ---------- ----------
TOTAL EXPENSES BEFORE
WAIVER/REIMBURSEMENT............ 395,693 117,967 324,207 88,452 178,395
Waiver/reimbursement of
expenses........................ -- (14,740) (22,085) (19,816) (38,092)
--------- ---------- ---------- ---------- ----------
TOTAL EXPENSES AFTER
WAIVER/REIMBURSEMENT............ 395,693 103,227 302,122 68,636 140,303
--------- ---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS)....... (218,513) (4,515) (13,328) (21,045) 51,629
--------- ---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) on
investments..................... (1,118,028) (276,305) 379,220 327,368 232,518
Net realized gain (loss) from
foreign currency transactions... -- (36,450) (341,781) 1,871 (58,342)
Net change in unrealized
appreciation/depreciation
of investments.................. 896,484 1,405,297 442,586 1,121,131 749,881
Net change in unrealized
depreciation on translation of
assets and liabilities denominated
in foreign currencies and
forward currency contracts...... -- 239,832 782,308 73,954 412,820
--------- ---------- ---------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS.................... (221,544) 1,332,374 1,262,333 1,524,324 1,336,877
--------- ---------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS.......... $(440,057) $1,327,859 $1,249,005 $1,503,279 $1,388,506
========= ========== ========== ========== ==========
<FN>
- --------------------
* For the period May 1, 1998, commencement of operations, to December 31, 1998.
** Net of foreign tax withheld
as follows: $ -- $ 6,398 $ 28,620 $ 3,461 $ 18,270
See Notes to Financial Statements.
</FN>
</TABLE>
P-56a
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN SELIGMAN
HIGH-YIELD SELIGMAN LARGE-CAP SMALL-CAP
BOND INCOME VALUE VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest........................... $2,717,284 $ 467,836 $ 642 $ 0--
Dividends.......................... 212,942 183,523 21,191 5,235
---------- ---------- ---------- ----------
TOTAL INVESTMENT INCOME**.......... 2,930,226 651,359 21,833 5,235
---------- ---------- ---------- ----------
EXPENSES:
Management fee..................... 142,265 57,362 9,139 7,951
Custody and related services....... 35,962 4,470 1,355 1,730
Auditing fee....................... 13,666 8,866 4,229 4,029
Directors' fees and expenses....... 5,171 5,128 3,224 3,250
Shareholder reports and
communications.................. 1,921 3,933 2,780 2,780
Registration....................... 5,032 3,051 2,482 2,432
Legal fee.......................... 1,338 1,287 983 982
Miscellaneous...................... 3,869 3,119 1,391 1,372
---------- ---------- ---------- ----------
TOTAL EXPENSES BEFORE
WAIVER/REIMBURSEMENT............ 209,224 87,216 25,583 24,526
Waiver/reimbursement of
expenses........................ (10,046) (1,176) (16,444) (16,575)
---------- ---------- ---------- ----------
TOTAL EXPENSES AFTER
WAIVER/REIMBURSEMENT............ 199,178 86,040 9,139 7,951
---------- ---------- ---------- ----------
NET INVESTMENT INCOME (LOSS)....... 2,731,048 565,319 12,694 (2,716)
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized gain (loss) on
investments..................... 10,307 124,492 67,875 271,788
Net realized gain (loss) from
foreign currency transactions... -- -- -- --
Net change in unrealized
appreciation/depreciation
of investments.................. (2,638,907) 381,475 108,540 (164,337)
Net change in unrealized
depreciation on translation of
assets and liabilities denominated
in foreign currencies and
forward currency contracts...... -- -- -- --
---------- ---------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS.................... (2,628,600) 505,967 176,415 107,451
---------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS.......... $ 102,448 $1,071,286 $ 189,109 $ 104,735
========== ========== ========== ==========
<FN>
- --------------------
* For the period May 1, 1998, commencement of operations, to December 31, 1998.
** Net of foreign tax withheld
as follows: $ -- $ 562 $ -- $ --
See Notes to Financial Statements.
</FN>
</TABLE>
P-57
<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,
----------------------- -------------------------- -----------------------
1998 1997 1998 1997 1998 1997
----------- ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............. $ 383,251 $ 359,627 $ 40,438 $ 28,503 $ 540,798 $ 512,275
Net realized gain (loss) on investments.. 123,784 2,573 1,655,402 1,456,363 1,538 --
Net realized gain (loss) from foreign
currency transactions................. -- -- -- -- -- --
Net change in unrealized appreciation/
depreciation of investments........... 37,175 158,584 2,577,044 1,876,910 -- --
Net change in unrealized appreciation/
depreciation on translation of assets
and liabilities denominated in foreign
currencies and forward currency
contracts............................. -- -- -- -- -- --
---------- ---------- ----------- ----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS....................... 544,210 520,784 4,272,884 3,361,776 542,336 512,275
---------- ---------- ----------- ----------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.................... (383,617) (360,523) (42,246) (29,292) (540,798) (512,275)
Realized gain on investments............. (72,294) -- (1,310,739) (1,319,186) -- --
---------- ---------- ----------- ----------- ----------- ----------
DECREASE IN NET ASSETS
FROM DISTRIBUTIONS.................... (455,911) (360,523) (1,352,985) (1,348,478) (540,798) (512,275)
---------- ---------- ----------- ----------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares......... 2,476,931 3,014,160 11,707,365 7,491,753 32,521,913 25,875,970
Investment of dividends.................. 383,617 360,523 42,246 29,292 540,798 512,275
Shares issued in payment of gain
distributions......................... 72,294 -- 1,310,739 1,319,186 -- --
---------- ---------- ----------- ----------- ----------- ----------
Total.................................... 2,932,842 3,374,683 13,060,350 8,840,231 33,062,711 26,388,245
---------- ---------- ----------- ----------- ----------- ----------
Cost of shares redeemed.................. (2,932,822) (1,317,788) (12,239,347) (4,766,794) (31,179,640)(27,507,851)
---------- ---------- ----------- ----------- ----------- ----------
INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS.......................... 20 2,056,895 821,003 4,073,437 1,883,071 (1,119,606)
---------- ---------- ----------- ----------- ----------- ----------
INCREASE (DECREASE) IN
NET ASSETS............................ 88,319 2,217,156 3,740,902 6,086,735 1,884,609 (1,119,606)
NET ASSETS:
Beginning of Year........................ 7,232,037 5,014,881 20,399,792 14,313,057 8,635,286 9,754,892
---------- ---------- ----------- ----------- ----------- ----------
END OF YEAR.............................. $7,320,356 $7,232,037 $24,140,694 $20,399,792 $10,519,895 $8,635,286
========== ========== =========== =========== =========== ==========
</TABLE>
- --------------------
See Notes to Financial Statements.
P-58
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SELIGMAN SELIGMAN
COMMON STOCK COMMUNICATIONS AND
PORTFOLIO INFORMATION PORTFOLIO
----------------------- --------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............. $ 900,842 $ 858,211 $ (559,960) $ (378,304)
Net realized gain (loss) on investments.. 3,819,226 6,975,977 5,762,699 25,855,124
Net realized gain (loss) from foreign
currency transactions................. -- -- -- --
Net change in unrealized appreciation/
depreciation of investments........... 7,459,005 523,788 28,175,377 (10,538,214)
Net change in unrealized appreciation/
depreciation on translation of assets
and liabilities denominated in foreign
currencies and forward currency
contracts............................. -- -- -- --
----------- ----------- ------------ -----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS....................... 12,179,073 8,357,976 33,378,116 14,938,606
----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.................... (940,040) (827,581) -- --
Realized gain on investments............. (3,824,886) (6,979,440) (4,823,503) (22,307,569)
----------- ----------- ------------ -----------
DECREASE IN NET ASSETS
FROM DISTRIBUTIONS.................... (4,764,926) (7,807,021) (4,823,503) (22,307,569)
----------- ----------- ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares......... 14,190,439 12,649,970 199,351,030 50,718,332
Investment of dividends.................. 940,040 827,581 -- --
Shares issued in payment of gain
distributions......................... 3,824,886 6,979,440 4,823,503 22,307,569
----------- ----------- ------------ -----------
Total.................................... 18,955,365 20,456,991 204,174,533 73,025,901
----------- ----------- ------------ -----------
Cost of shares redeemed.................. (14,518,617) (7,439,183) (198,083,052) (38,669,048)
----------- ----------- ------------ -----------
INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS.......................... 4,436,748 13,017,808 6,091,481 34,356,853
----------- ----------- ------------ -----------
INCREASE (DECREASE) IN
NET ASSETS............................ 11,850,895 13,568,763 34,646,094 26,987,890
NET ASSETS:
Beginning of Year........................ 50,737,163 37,168,400 87,632,837 60,644,947
----------- ----------- ------------ -----------
END OF YEAR.............................. $62,588,058 $50,737,163 $122,278,931 $87,632,837
=========== =========== ============ ===========
</TABLE>
- --------------------
See Notes to Financial Statements.
P-58a
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN HENDERSON
SELIGMAN GLOBAL GROWTH
FRONTIER PORTFOLIO OPPORTUNITIES PORTFOLIO
----------------------- --------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)............. $ (218,513) $ (184,281) $ (4,515) $ 283
Net realized gain (loss) on investments.. (1,118,028) 4,064,832 (276,305) 141,228
Net realized gain (loss) from foreign
currency transactions................. -- -- (36,450) (73,436)
Net change in unrealized appreciation/
depreciation of investments........... 896,484 1,855,841 1,405,297 381,018
Net change in unrealized appreciation/
depreciation on translation of assets
and liabilities denominated in foreign
currencies and forward currency
contracts............................. -- -- 239,832 (112,875)
----------- ----------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS....................... (440,057) 5,736,392 1,327,859 336,218
----------- ----------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.................... -- -- -- --
Realized gain on investments............. -- (3,889,283) (50,935) (60,644)
----------- ----------- ---------- ----------
DECREASE IN NET ASSETS
FROM DISTRIBUTIONS.................... -- (3,889,283) (50,935) (60,644)
----------- ----------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares......... 227,067,285 18,870,587 4,808,045 4,394,619
Investment of dividends.................. -- -- -- --
Shares issued in payment of gain
distributions......................... -- 3,889,283 50,935 60,644
----------- ----------- ---------- ----------
Total.................................... 227,067,285 22,759,870 4,858,980 4,455,263
----------- ----------- ---------- ----------
Cost of shares redeemed.................. (230,452,830) (13,305,727) (2,941,841) (871,295)
----------- ----------- ---------- ----------
INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS.......................... (3,385,545) 9,454,143 1,917,139 3,583,968
----------- ----------- ---------- ----------
INCREASE (DECREASE) IN
NET ASSETS............................ (3,825,602) 11,301,252 3,194,063 3,859,542
NET ASSETS:
Beginning of Year........................ 42,973,273 31,672,021 5,449,232 1,589,690
----------- ----------- ---------- ----------
END OF YEAR.............................. $39,147,671 $42,973,273 $8,643,295 $5,449,232
=========== =========== ========== ==========
</TABLE>
- --------------------
See Notes to Financial Statements.
P-59
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN HENDERSON SELIGMAN HENDERSON SELIGMAN HENDERSON
GLOBAL SMALLER GLOBAL TECHNOLOGY INTERNATIONAL
COMPANIES PORTFOLIO PORTFOLIO PORTFOLIO
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
----------------------- ----------------------- -----------------------
1998 1997 1998 1997 1998 1997
----------- -------- ---------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income (loss)......................... $ (13,328) $ 48,159 $ (21,045) $ 3,172 $ 51,629 $ 37,783
Net realized gain on
investments........................... 380,866 813,641 327,368 513,781 236,433 665,686
Net realized gain (loss)
from foreign currency
transactions.......................... (343,427) (407,259) 1,871 (12,358) (62,257) (422,188)
Net change in unrealized
appreciation/depreciation
of investments........................ 442,586 750,188 1,121,131 (84,833) 749,881 439,369
Net change in unrealized
appreciation/depreciation
on translation of assets
and liabilities denominated
in foreign currencies and
forward currency contracts............ 782,308 (536,914) 73,954 (40,471) 412,820 (72,394)
----------- ----------- ---------- ---------- ---------- ----------
INCREASE IN NET ASSETS
FROM OPERATIONS....................... 1,249,005 667,815 1,503,279 379,291 1,388,506 648,256
----------- ----------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.................... -- (26,233) (857) (3,585) (92,510) (17,648)
Realized gain on investments............. (307,092) (475,283) (262,609) (503,962) (102,080) (308,510)
----------- ----------- ---------- ---------- ---------- ----------
DECREASE IN NET ASSETS
FROM DISTRIBUTIONS.................... (307,092) (501,516) (263,466) (507,547) (194,590) (326,158)
----------- ----------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale
of shares............................. 3,255,307 5,959,379 4,355,443 3,874,388 1,772,992 3,331,657
Investment of dividends.................. -- 26,233 857 3,585 92,510 17,648
Shares issued in payment
of gain distributions................. 307,092 475,283 262,609 503,962 102,080 308,510
----------- ----------- ---------- ---------- ---------- ----------
Total.................................... 3,562,399 6,460,895 4,618,909 4,381,935 1,967,582 3,657,815
----------- ----------- ---------- ---------- ---------- ----------
Cost of shares redeemed.................. (4,194,840) (2,998,851) (3,414,979) (1,931,166) (2,451,134) (2,039,720)
----------- ----------- ---------- ---------- ---------- ----------
INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS.......................... (632,441) 3,462,044 1,203,930 2,450,769 (483,552) 1,618,095
----------- ----------- ---------- ---------- ---------- ----------
INCREASE IN NET ASSETS................... 309,472 3,628,343 2,443,743 2,322,513 710,364 1,940,193
NET ASSETS:
Beginning of Period...................... 20,504,590 16,876,247 3,686,228 1,363,715 9,182,465 7,242,272
----------- ----------- ---------- ---------- ---------- ----------
END OF PERIOD............................ $20,814,062 $20,504,590 $6,129,971 $3,686,228 $9,892,829 $9,182,465
=========== =========== =========== ========== ========== ==========
</TABLE>
- -------------------
* Commencement of operations.
See Notes to Financial Statements.
P-60
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELIGMAN SELIGMAN
SELIGMAN SELIGMAN LARGE-CAP SMALL-CAP
HIGH-YIELD BOND PORTFOLIO INCOME PORTFOLIO VALUE PORTFOLIO VALUE PORTFOLIO
------------------------- --------------------- --------------- ---------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, 5/1/98* 5/1/98*
------------------------- --------------------- to to
1998 1997 1998 1997 12/31/98 12/31/98
---------- ------------ --------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income (loss)......................... $ 2,731,048 $ 1,628,914 $ 565,319 $ 640,866 $ 12,694 $ (2,716)
Net realized gain on
investments........................... 10,307 186,257 124,492 731,075 67,875 271,788
Net realized gain (loss)
from foreign currency
transactions.......................... -- -- -- 5,037 -- --
Net change in unrealized
appreciation/depreciation
of investments........................ (2,638,907) 571,005 381,475 419,679 108,540 (164,337)
Net change in unrealized
appreciation/depreciation
on translation of assets
and liabilities denominated
in foreign currencies and
forward currency contracts............ -- -- -- (10,907) -- --
----------- ----------- ----------- ----------- ---------- ----------
INCREASE IN NET ASSETS
FROM OPERATIONS....................... 102,448 2,386,176 1,071,286 1,785,750 189,109 104,735
----------- ----------- ----------- ----------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income.................... (2,720,490) (1,614,526) (579,531) (625,869) (13,586) --
Realized gain on investments............. (17,156) (193,743) (200,703) (735,166) (101,893) (270,486)
----------- ----------- ----------- ----------- ---------- ----------
DECREASE IN NET ASSETS
FROM DISTRIBUTIONS.................... (2,737,646) (1,808,269) (780,234) (1,361,035) (115,479) (270,486)
----------- ----------- ----------- ----------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale
of shares............................. 17,539,019 16,215,266 2,781,692 2,166,510 4,577,607 3,140,726
Investment of dividends.................. 2,720,490 1,614,526 579,531 625,869 13,586 --
Shares issued in payment
of gain distributions................. 17,156 193,743 200,703 735,166 101,893 270,486
----------- ----------- ----------- ----------- ---------- ----------
Total.................................... 20,276,665 18,023,535 3,561,926 3,527,545 4,693,086 3,411,212
----------- ----------- ----------- ----------- ---------- ----------
Cost of shares redeemed.................. (8,656,439) (6,510,022) (3,106,033) (3,833,770) (1,068,342) (923,979)
----------- ----------- ----------- ----------- ---------- ----------
INCREASE (DECREASE) IN NET
ASSETS FROM CAPITAL SHARE
TRANSACTIONS.......................... 11,620,226 11,513,513 455,893 (306,225) 3,624,744 2,487,233
----------- ----------- ----------- ----------- ---------- ----------
INCREASE IN NET ASSETS................... 8,985,028 12,091,420 746,945 118,490 3,698,374 2,321,482
NET ASSETS:
Beginning of Period...................... 23,267,780 11,176,360 13,835,280 13,716,790 147,449 147,449
----------- ----------- ----------- ----------- ---------- ----------
END OF PERIOD............................ $32,252,808 $23,267,780 $14,582,225 $13,835,280 $3,845,823 $2,468,931
=========== =========== =========== =========== ========== ==========
</TABLE>
- ----------------
* Commencement of operations.
See Notes to Financial Statements.
P-61
<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 14 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"), Seligman Income Portfolio ("Income Portfolio"),
Seligman Large-Cap Value Portfolio ("Large-Cap Value Portfolio"), and Seligman
Small-Cap Value Portfolio ("Small-Cap Value 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 Advisors, Inc. (the "Distributor") (formerly 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 Advisors, 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 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 an exchange 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 generally valued using the amortized cost method which approximates fair
value. Investments of certain other funds in the Seligman Group of Investment
Companies purchased to offset the Cash Management Portfolio's liability for
deferred directors' fees are valued at current market values.
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, (together, the "Seligman Henderson Portfolios"),
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.
P-62
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 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 Seligman Henderson Portfolios 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 during 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
agreements, 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, 1998, were as follows:
PORTFOLIO PURCHASES SALES
-------- ----------- -----------
Bond $ 1,616,895 $ 1,567,785
Capital 26,450,215 27,418,664
Common Stock 29,054,192 31,947,041
Communications and Information 129,886,119 129,088,232
Frontier 35,509,366 37,054,475
Global Growth Opportunities 4,901,068 3,356,414
P-63
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
PORTFOLIO PURCHASES SALES
-------- ----------- -----------
Global Smaller Companies $13,292,708 $13,589,183
Global Technology 4,677,853 3,660,253
International 7,246,645 7,591,199
High-Yield Bond 20,815,115 11,761,887
Income 7,829,674 7,869,770
Large-Cap Value 4,746,735 1,177,307
Small-Cap Value 3,275,749 960,019
For the year ended December 31, 1998, purchases and sales of US Government
obligations were $3,112,503 and $3,205,188, respectively, for the Bond
Portfolio, and $3,068,155 and $1,597,913, respectively, for the Income
Portfolio.
Identified cost of investments sold is used for both financial statement and
federal income tax purposes.
At December 31, 1998, 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 $ 296,435 $ 37,303
Capital 6,587,602 26,300
Common Stock 15,991,279 279,015
Communications and Information 26,480,438 4,031,140
Frontier 7,744,857 3,808,519
Global Growth Opportunities 2,028,631 82,663
Global Smaller Companies 4,077,821 2,377,804
Global Technology 1,463,691 316,730
International 2,239,328 206,459
High-Yield Bond 631,512 2,434,467
Income 1,417,589 202,461
Large-Cap Value 241,686 133,146
Small-Cap Value 225,529 389,866
4. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- The
Manager manages the affairs of the Fund and provides or arranges for the
necessary personnel and facilities. The Manager's fee, which is calculated daily
and payable monthly, is equal to 0.40%, on an annual basis, of each of Bond,
Capital, Cash Management, Common Stock, and Income Portfolios' daily net assets;
equal to 0.75%, on an annual basis, of each of Communications and Information
and Frontier Portfolios' daily net assets; equal to 1.00%, on an annual basis,
of each of the Seligman Henderson 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 for the Large-Cap Value Portfolio is equal to 0.80% per annum of
the first $500 million of average daily net assets, 0.70% per annum of the next
$500 million of average daily net assets, and 0.60% per annum in excess of $1
billion of average daily net assets of the Portfolio. The Manager's fee for the
Small-Cap Value Portfolio is equal to 1.00% per annum of the first $500 million
of average daily net assets, 0.90% per annum of the next $500 million of average
daily net assets, and 0.80% per annum in excess of $1 billion of average daily
net assets of the Portfolio.
Prior to July 1, 1998, Seligman Henderson Co., an entity owned 50% each by
the Manager and Henderson International, Inc., a subsidiary of Henderson plc,
supervised and directed the global investments of the Seligman Henderson
Portfolios. Pursuant to subadvisory agreements with the Manager, the Manager
paid Seligman Henderson Co. 0.90% per annum of the average daily net assets of
each of the Seligman Henderson Portfolios.
On March 30, 1998, AMP Limited, an Australian life insurance and financial
services company, completed an acquisition of Henderson plc, which resulted in
the termination of the Fund's subadvisory agreements. The Fund's Board of
Directors approved interim subadvisory agreements pursuant to which Seligman
Henderson Co. continued to supervise and direct the global investments of the
Seligman Henderson Portfolios. The Fund's directors also approved a proposed new
subadvisory agreement pursuant to which Henderson Investment Management Limited
(the "Subadviser"), a wholly-owned subsidiary of Henderson plc, would replace
Seligman Henderson Co. as subadviser to the Seligman Henderson Portfolios, and
be respon-
P-64
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
sible for furnishing investment advice, research, and assistance with respect to
their non-US investments. Under the new agreement, the Manager is responsible
for the US investments of the Seligman Henderson Portfolios and has overall
responsibility for management of the Portfolios. Both the interim and the new
subadvisory agreements were approved by votes of the shareholders of each of the
Seligman Henderson Portfolios on June 30, 1998. Under the new subadvisory
agreement, the Manager pays the Subadviser a subadvisory fee for each of the
Seligman Henderson Portfolios at a rate of 0.50% per annum of the average
monthly assets under the Subadviser's supervision.
The Manager has agreed to reimburse expenses, other than the management fee
that exceed 0.20% per annum of the average daily net assets of each of Bond,
Capital, Common Stock, Communications and Information, Frontier, High-Yield Bond
and Income Portfolios. The Manager, at its discretion and until it determines
otherwise, has elected to waive all of its fee for, and reimburse all of the
expenses of, the Cash Management Portfolio. The Manager and Seligman Henderson
Co. (through June 30, 1998) have agreed to reimburse expenses, other than the
management fee, which exceed 0.40% per annum of the average daily net assets of
each of the Seligman Henderson Portfolios. The Manager, at its discretion, has
also agreed to reimburse all expenses, other than the management fees, of the
Large-Cap Value and Small-Cap Value Portfolios. The amounts of these
reimbursements for the year ended December 31, 1998 are disclosed in the
Statements of Operations.
Compensation of all officers of the Fund, all directors of the Fund who are
employees or consultants of the Manager, and all personnel of the Fund and the
Manager is paid by the Manager or by Henderson plc.
The Distributor, agent for the distribution of the CLVA-2 Contracts and an
affiliate of the Manager, received concessions of $228,662 from Canada Life
Insurance Company of America and $15,703 from Canada Life Insurance Company of
New York, after commissions paid to dealers for the sale of shares of the Fund.
Certain officers and directors of the Fund are officers or directors of the
Manager and the Distributor.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Directors may elect to have their
deferred fees accrue interest or earn a return based on the performance of the
other funds in the Seligman Group of Investment Companies. The cost of such fees
and earnings accrued thereon is included in directors' fees and expenses, and
the accumulated balances thereof at December 31, 1998, are included in other
liabilities. Deferred fees and related accrued earnings are not deductible for
the federal income tax purposes until such amounts are paid.
5. LOSS CARRYFORWARD -- At December 31, 1998, the Frontier Portfolio, Global
Growth Opportunities Portfolio, and Global Smaller Companies Portfolio had net
capital loss carryforwards for federal income tax purposes of $1,123,646,
$376,086 and $308,768, respectively, which are available for offset against
future taxable net gains. These net capital loss carryforwards will expire in
2006. Accordingly, no capital gain distributions are expected to be paid to
shareholders until net capital gains have been realized in excess of the
available capital loss carryforwards.
6. OUTSTANDING FORWARD EXCHANGE CURRENCY CONTRACTS -- At December 31, 1998, the
Fund had outstanding forward exchange currency contracts to sell foreign
currencies as follows:
<TABLE>
<CAPTION>
FOREIGN IN EXCHANGE SETTLEMENT US $ UNREALIZED
CONTRACT CURRENCY FOR US $ DATE VALUE DEPRECIATION
- -------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
GLOBAL GROWTH OPPORTUNITIES PORTFOLIO
Japanese yen 26,000,000 219,372 2/16/99 229,439 $(10,067)
========
GLOBAL SMALLER COMPANIES PORTFOLIO
Japanese yen 1,557,808 13,499 1/4/99 13,728 $ (229)
Japanese yen 90,000,000 759,365 2/16/99 794,211 (34,846)
--------
$(35,075)
========
GLOBAL TECHNOLOGY PORTFOLIO
Japanese yen 15,700,100 130,000 2/26/99 138,730 $ (8,730)
========
INTERNATIONAL PORTFOLIO
Japanese yen 1,658,887 14,375 1/4/99 14,619 $ (244)
Japanese yen 63,000,000 531,556 2/16/99 555,948 (24,392)
--------
$(24,636)
========
</TABLE>
P-65
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
7. CAPITAL STOCK TRANSACTIONS -- At December 31, 1998, there were 20,000,000
shares of Capital Stock authorized for each of Global Growth Opportunities,
Global Technology, Large-Cap Value, and Small-Cap Value Portfolios; 80,000,000
shares for each of Bond, Capital, International, and Income Portfolios; and
100,000,000 shares for each of Cash Management, Common Stock, Communications and
Information, Frontier, Global Smaller Companies, and High-Yield Bond Portfolios,
all at a par value of $0.001 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,
------------------------ ---------------------- ------------------------
1998 1997 1998 1997 1998 1997
---------- --------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 230,745 292,591 626,516 421,000 32,521,913 25,875,970
Shares issued in payment
of dividends..................... 36,957 35,242 2,179 1,659 540,798 512,275
Shares issued in payment
of gain distributions............ 6,965 -- 67,599 74,699 -- --
-------- -------- -------- -------- ----------- -----------
Total............................... 274,667 327,833 696,294 497,358 33,062,711 26,388,245
-------- -------- -------- -------- ----------- -----------
Shares redeemed..................... (276,064) (128,619) (663,507) (264,028) (31,179,640) (27,507,851)
-------- -------- -------- -------- ----------- -----------
Increase (decrease) in shares....... (1,397) 199,214 32,787 233,330 1,883,071 (1,119,606)
======== ======== ======== ======== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
COMMUNICATIONS
COMMON STOCK AND INFORMATION FRONTIER
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------ ---------------------- ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------------------ ---------------------- ------------------------
1998 1997 1998 1997 1998 1997
---------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 787,642 706,222 13,848,034 2,968,727 14,693,247 1,172,506
Shares issued in payment
of dividends..................... 51,651 51,724 -- -- -- --
Shares issued in payment
of gain distributions............ 210,158 436,215 299,597 1,783,179 -- 255,874
--------- --------- ----------- ---------- ----------- ----------
Total............................... 1,049,451 1,194,161 14,147,631 4,751,906 14,693,247 1,428,380
--------- --------- ----------- ---------- ----------- ----------
Shares redeemed..................... (806,174) (412,385) (13,711,324) (2,185,329) (14,899,641) (819,268)
--------- --------- ----------- ---------- ----------- ----------
Increase (decrease) in shares....... 243,277 781,776 436,307 2,566,577 (206,394) 609,112
========= ========= =========== ========== =========== ==========
</TABLE>
<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,
------------------------ ---------------------- -------------------------
1998 1997 1998 1997 1998 1997
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 390,170 409,426 231,087 447,087 354,582 329,216
Shares issued in payment
of dividends..................... -- -- -- 2,062 64 347
Shares issued in payment
of gain distributions............ 3,970 5,564 23,787 37,365 19,642 48,881
-------- -------- -------- -------- -------- --------
Total............................... 394,140 414,990 254,874 486,514 374,288 378,444
-------- -------- -------- -------- -------- --------
Shares redeemed..................... (239,884) (81,077) (306,840) (217,853) (280,044) (162,342)
-------- -------- -------- -------- -------- --------
Increase (decrease) in shares....... 154,256 333,913 (51,966) 268,661 94,244 216,102
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL HIGH-YIELD BOND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------- ----------------------- -------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
------------------------- ----------------------- -------------------------
1998 1997 1998 1997 1998 1997
---------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Sale of shares...................... 118,684 239,540 1,464,357 1,357,028 248,332 192,283
Shares issued in payment
of dividends..................... 6,127 1,313 251,200 136,132 53,119 58,547
Shares issued in payment
of gain distributions............ 6,760 22,955 1,584 16,336 18,396 68,771
-------- -------- --------- --------- -------- --------
Total............................... 131,571 263,808 1,717,141 1,509,496 319,847 319,601
-------- -------- --------- --------- -------- --------
Shares redeemed..................... (166,031) (144,243) (711,853) (547,725) (276,496) (342,394)
-------- -------- --------- --------- -------- --------
Increase (decrease) in shares....... (34,460) 119,565 1,005,288 961,771 43,351 (22,793)
======== ======== ========= ========= ======== ========
</TABLE>
P-66
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LARGE-CAP SMALL-CAP
VALUE VALUE
PORTFOLIO PORTFOLIO
--------- ---------
5/1/98* 5/1/98*
TO TO
12/31/98 12/31/98
---------- ---------
Sale of shares...................... 485,276 400,968
Shares issued in payment
of dividends ................... 1,442 --
Shares issued in payment
of gain distributions .......... 10,817 39,088
-------- --------
Total............................... 497,535 440,056
-------- --------
Shares redeemed..................... (114,112) (117,123)
-------- --------
Increase in shares.................. 383,423 322,933
======== ========
- -------------
* Commencement of operations.
8. COMMITTED LINE OF CREDIT --Effective July 1, 1998, Communications and
Information, Frontier, Global Growth Opportunities, Global Smaller Companies,
Global Technology, International, and High-Yield Bond Portfolios terminated
their $12 million committed line of credit facility and all of the Portfolios
except the Cash Management Portfolio, entered into a joint $800 million
committed line of credit that is shared by substantially all funds in the
Seligman Group of Investment Companies. Each Portfolio's borrowings are limited
to 10% (5% for the Seligman Henderson Portfolios) of its net assets. Borrowings
pursuant to the credit facility are subject to interest at a rate equal to the
overnight federal funds rate plus 0.50%. Each Portfolio incurs a commitment fee
of 0.08% per annum on its share of the unused portion of the credit facility.
The credit facility may be drawn upon only for temporary purposes and is subject
to certain other customary restrictions. The credit facility commitment expires
one year from the date of the agreement but is renewable with the consent of the
participating banks. To date, none of the Portfolios have borrowed from the
credit facility.
9. SELIGMAN MUTUAL BENEFIT PLAN -- On December 31, 1998, MBL Life sold
substantially all of its general account life insurance and annuity businesses
to SunAmerica, Inc. The Order from the Superior Court of New Jersey (the
"Order") approving the transaction provided for the termination of the Mutual
Benefit Plan. The Order authorizes MBL Life to take any and all actions
necessary to facilitate the termination of the Mutual Benefit Plan.
Contractholders will be given the opportunity to exchange their contracts for
contracts issued by other insurance companies until June 30, 1999. Any contracts
remaining with MBL Life at June 30, 1999 will be terminated and MBL Life will
pay out their account value.
At December 31, 1998, the Mutual Benefit Plan assets held in the Fund were as
follows:
Bond Portfolio $ 1,650,594
Capital Portfolio 5,139,844
Cash Management Portfolio 833,299
Common Stock Portfolio 15,020,603
Income Portfolio 3,742,406
Because the Manager currently limits the expenses incurred by these
portfolios, the withdrawal of Mutual Benefit Plan assets is not expected to have
a significant impact on the ratio of expenses to average net assets for any of
these portfolios.
P-67
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below are intended to help you understand each Portfolio's
financial performance for the past five years or from its inception, if less
than five years. Certain information reflects financial results for a single
share that was held throughout the periods shown. Per share amounts are
calcuated using average shares outstanding. "Total return" shows the rate that
you would have earned (or lost) on an investment in each Portfolio, assuming you
reinvested all your dividends and capital gain distributions. Total returns do
not reflect any administrative fees and asset based sales charges that are
associated with variable annuity contracts, and are not annualized for periods
of less than one year.
<TABLE>
<CAPTION>
BOND PORTFOLIO
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR................. $10.24 $9.89 $10.44 $9.27 $10.11
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)....................... 0.59 0.54 0.56 0.61 0.50
Net realized and unrealized gain (loss) on investments 0.25 0.35 (0.55) 1.17 (0.84)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS................... 0.84 0.89 0.01 1.78 (0.34)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income............... (0.59) (0.54) (0.56) (0.61) (0.50)
Distributions from net realized capital gain ...... (0.11) -- -- -- --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................ (0.70) (0.54) (0.56) (0.61) (0.50)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR....................... $10.38 $10.24 $ 9.89 $10.44 $ 9.27
====== ====== ====== ====== ======
TOTAL RETURN: 8.20% 8.98% 0.09% 19.18% (3.39)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted)............. $7,320 $7,232 $5,015 $4,497 $3,606
Ratio of expenses to average net assets............ 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of net income (loss) to average net assets... 5.58% 6.22% 5.97% 6.22% 5.12%
Portfolio turnover rate............................ 73.31% 170.12% 199.74% 114.42% 237.23%
Without management fee waiver:*
Ratio of expenses to average net assets............ 0.82% 0.83% 0.79% 0.99% 1.31%
Ratio of net income (loss) to average net assets... 5.36% 5.99% 5.78% 5.83% 4.41%
</TABLE>
- --------------
* The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
See Notes to Financial Statements.
P-68
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL PORTFOLIO
-----------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR................. $18.10 $16.01 $14.91 $12.70 $14.95
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)....................... 0.04 0.03 0.04 0.05 0.02
Net realized and unrealized gain (loss)
on investments................................... 3.89 3.35 2.12 3.39 (0.70)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS................... 3.93 3.38 2.16 3.44 (0.68)
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income............... (0.04) (0.03) (0.04) (0.05) (0.02)
Distributions from net realized capital gain ...... (1.18) (1.26) (1.02) (1.18) (1.55)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................ (1.22) (1.29) (1.06) (1.23) (1.57)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR....................... $20.81 $18.10 $16.01 $14.91 $12.70
====== ====== ====== ====== ======
TOTAL RETURN: 22.19% 21.31% 14.51% 27.17% (4.59)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted)............. $24,141 $20,400 $14,313 $9,294 $5,942
Ratio of expenses to average net assets............ 0.60% 0.60% 0.59% 0.60% 0.60%
Ratio of net income (loss) to average net assets... 0.19% 0.16% 0.29% 0.32% 0.10%
Portfolio turnover rate............................ 130.86% 93.97% 88.78% 122.20% 67.39%
Without management fee waiver:*
Ratio of expenses to average net assets............ 0.62% 0.71% 0.96%
Ratio of net income (loss) to average net assets... 0.14% 0.21% (0.26)%
</TABLE>
<TABLE>
<CAPTION>
CASH MANAGEMENT PORTFOLIO
--------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR................. $1.000 $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)....................... 0.053 0.054 0.053 0.055 0.040
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS................... 0.053 0.054 0.053 0.055 0.040
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income............... (0.053) (0.054) (0.053) (0.055) (0.040)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................ (0.053) (0.054) (0.053) (0.055) (0.040)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR....................... $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
TOTAL RETURN: 5.42% 5.52% 5.43% 5.60% 4.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted)............. $10,520 $8,635 $9,755 $7,800 $3,230
Ratio of expenses to average net assets............ -- -- -- -- --
Ratio of net income (loss) to average net assets... 5.30% 5.39% 5.30% 5.48% 3.98%
Without management fee waiver and
expense reimbursement:*
Ratio of expenses to average net assets............ 0.67% 0.79% 0.63% 0.87% 1.48%
Ratio of net income (loss) to average net assets... 4.63% 4.60% 4.67% 4.61% 2.50%
</TABLE>
- ----------------------
* The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
See Notes to Financial Statements.
P-69
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCK PORTFOLIO
---------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR................. $16.28 $15.92 $15.44 $13.78 $14.98
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)....................... 0.29 0.33 0.34 0.35 0.37
Net realized and unrealized gain (loss) on investments 3.61 3.01 2.79 3.40 (0.36)
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS................... 3.90 3.34 3.13 3.75 0.01
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income............... (0.31) (0.32) (0.34) (0.35) (0.39)
Distributions from net realized capital gain ...... (1.24) (2.66) (2.31) (1.74) (0.82)
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................ (1.55) (2.98) (2.65) (2.09) (1.21)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR....................... $18.63 $16.28 $15.92 $15.44 $13.78
====== ====== ====== ====== ======
TOTAL RETURN: 24.16% 21.31% 20.08% 27.28% 0.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted)............. $62,588 $50,737 $37,168 $28,836 $20,168
Ratio of expenses to average net assets............ 0.52% 0.53% 0.53% 0.54% 0.60%
Ratio of net income (loss) to average net assets... 1.61% 1.92% 1.99% 2.42% 2.45%
Portfolio turnover rate............................ 55.55% 80.13% 50.33% 55.48% 15.29%
Without management fee waiver:++
Ratio of expenses to average net assets............ 0.62%
Ratio of net income (loss) to average net assets... 2.43%
</TABLE>
<TABLE>
<CAPTION>
COMMUNICATIONS AND INFORMATION PORTFOLIO
----------------------------------------------------------------
10/11/94*
YEAR ENDED DECEMBER 31, TO
----------------------------------------------
1998 1997 1996 1995 12/31/94
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD............... $13.09 $14.69 $13.50 $10.44 $10.00
------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)....................... (0.08) (0.08) (0.04) (0.13) (0.02)
Net realized and unrealized gain (loss) on investments 4.81 3.13 1.23 4.15 0.46
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS................... 4.73 3.05 1.19 4.02 0.44
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized capital gain ...... (0.68) (4.65) -- (0.96) --
------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................................ (0.68) (4.65) -- (0.96) --
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD..................... $17.14 $13.09 $14.69 $13.50 $10.44
====== ====== ====== ====== ======
TOTAL RETURN: 36.49% 22.22% 8.81% 38.55% 4.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted)........... $122,279 $87,633 $60,645 $38,442 $495
Ratio of expenses to average net assets............ 0.87% 0.87% 0.87% 0.95% 0.95%+
Ratio of net income (loss) to average net assets... (0.56)% (0.49)% (0.32)% (0.89)% (0.95)%+
Portfolio turnover rate............................ 132.57% 277.14% 167.20% 96.62% --
Without management fee waiver
and expense reimbursement:++
Ratio of expenses to average net assets............ 13.96%+
Ratio of net income (loss) to average net assets... (13.96)%+
</TABLE>
- --------------------
* 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.
P-70
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GROWTH
FRONTIER PORTFOLIO OPPORTUNITIES PORTFOLIO
-------------------------------------------- -----------------------------
10/11/94* YEAR ENDED 5/1/96**
YEAR ENDED DECEMBER 31, TO DECEMBER 31, TO
----------------------------------- -----------------
PER SHARE DATA: 1998 1997 1996 1995 12/31/94 1998 1997 12/31/96
------ ------ ------ ------ -------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $15.78 $14.98 $13.56 $10.58 $10.00 $11.03 $ 9.91 $10.00
------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........ (0.08) (0.08) (0.06) (0.07) (0.01) (0.01) 0.01 0.01
Net realized and unrealized gain (loss)
on investments................... (0.15) 2.47 3.28 3.58 0.59 2.25 1.79 0.02
Net realized and unrealized gain (loss)
on foreign currency transactions. -- -- -- -- -- 0.14 (0.56) (0.11)
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.... (0.23) 2.39 3.22 3.51 0.58 2.38 1.24 (0.08)
------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income -- -- -- -- -- -- -- (0.01)
Distributions from net realized
capital gain..................... -- (1.59) (1.80) (0.53) -- (0.08) (0.12) --
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS:................ -- (1.59) (1.80) (0.53) -- (0.08) (0.12) (0.01)
------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD...... $15.55 $15.78 $14.98 $13.56 $10.58 $13.33 $11.03 $ 9.91
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: (1.46)% 16.33% 23.93% 33.28% 5.80% 21.60% 12.57% (0.78)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted)................... $39,148 $42,973 $31,672 $12,476 $169 $8,643 $5,449 $1,590
Ratio of expenses to
average net assets............... 0.92% 0.89% 0.92% 0.95% 0.95%+ 1.40% 1.40% 1.40%+
Ratio of net income (loss) to
average net assets.............. (0.51)% (0.49)% (0.37)% (0.55)% (0.70)%+ (0.06)% 0.01% 0.37%+
Portfolio turnover rate............. 86.52% 101.68% 119.74% 106.48% -- 48.99% 77.85% 12.99%
Without management fee waiver
and expense reimbursement:++
Ratio of expenses to average
net assets...................... 1.37% 40.47%+ 1.60% 2.11% 6.04%+
Ratios of net income (loss) to
average net assets.............. (0.97)% (40.22)%+ (0.26)% (0.70)% (4.27)%+
</TABLE>
- -----------------------
* 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.
P-71
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL SMALLER COMPANIES PORTFOLIO GLOBAL TECHNOLOGY PORTFOLIO
--------------------------------------------- ---------------------------
10/11/94* YEAR ENDED 5/1/96**
YEAR ENDED DECEMBER 31, TO DECEMBER 31, TO
--------------------------------- ----------------
PER SHARE DATA: 1998 1997 1996 1995 12/31/94 1998 1997 12/31/96
------ ------ ------ ------ -------- ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.98 $12.87 $11.67 $10.31 $10.00 $10.59 $10.32 $10.00
------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVETMENT OPERATIONS:
Net investment income (loss)........ (0.01) 0.02 0.02 0.05 0.06 (0.05) 0.01 --
Net realized and unrealized gain
on investments................... 1.02 1.17 2.31 2.04 0.26 3.81 2.15 0.30
Net realized and unrealized gain (loss)
on foreign currency transactions. (0.17) (0.75) (0.16) (0.30) 0.03 0.11 (0.19) 0.10
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.... 0.84 0.44 2.17 1.79 0.35 3.87 1.97 0.40
------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (0.02) (0.02) (0.05) (0.04) -- (0.01) --
Distributions from net realized
capital gain..................... (0.20) (0.31) (0.95) (0.38) -- (0.61) (1.69) --
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................. (0.20) (0.33) (0.97) (0.43) (0.04) (0.61) (1.70) (0.08)
------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD...... $13.62 $12.98 $12.87 $11.67 $10.31 $13.85 $10.59 $10.32
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: 6.58% 3.43% 18.66% 17.38% 3.53% 36.80% 19.53% 4.01%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted)................... $20,814 $20,505 $16,876 $4,837 $132 $6,130 $3,686 $1,364
Ratio of expenses to
average net assets............... 1.40% 1.40% 1.40% 1.39% 1.20%+ 1.40% 1.40% 1.40%+
Ratio of net income (loss) to
average net assets............... (0.06)% 0.24% 0.23% 0.64% 3.14%+ (0.43)% 0.12% 0.60%+
Portfolio turnover rate............. 66.40% 64.81% 62.31% 55.65% -- 82.27% 167.36% 45.04%
Without management fee waiver
and expense reimbursement:++
Ratio of expenses to
average net assets................ 1.50% 1.56% 1.90% 3.84% 37.25%+ 1.80% 2.10% 4.71%+
Ratio of net income (loss) to
average net assets................ (0.16)% 0.08% (0.27)% (1.81)% (32.91)%+ (0.83)% (0.58)% (2.71)%+
</TABLE>
- ----------------
* Commencement of investment operations.
** Commencement of operations.
+ Annualized.
++ The Manager and/or Subadviser, at their discretion, reimbursed expenses
and/or waived management fees for the periods presented.
See Notes to Financial Statements.
P-72
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL PORTFOLIO HIGH-YIELD BOND PORTFOLIO
------------------------------------------- ---------------------------------
5/1/95*
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, TO
------------------------------------------- -----------------------
PER SHARE DATA: 1998 1997 1996 1995 1994 1998 1997 1996 12/31/95
------ ------ ------ ------ ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.54 $12.96 $12.39 $11.34 $11.37 $11.87 $11.19 $10.50 $10.00
------ ------ ------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)...... 0.08 0.03 0.07 0.15 0.13 1.11 0.91 0.77 0.22
Net realized and unrealized gain (loss)
on investments................ 1.90 2.11 1.13 0.90 (0.31) (0.99) 0.78 0.77 0.52
Net realized and unrealized gain (loss)
on foreign currency transactions 0.16 (1.06) (0.32) 0.24 0.33 -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.. 2.14 1.08 0.88 1.29 0.15 0.12 1.69 1.54 0.74
------ ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net
investment income.............. (0.15) (0.03) (0.07) (0.15) (0.06) (1.11) (0.90) (0.77) (0.22)
Distributions from net realized
capital gain................... (0.16) (0.47) (0.24) (0.09) (0.12) (0.01) (0.11) (0.08) (0.02)
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS............... (0.31) (0.50) (0.31) (0.24) (0.18) (1.12) (1.01) (0.85) (0.24)
------ ------ ------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD.... $15.37 $13.54 $12.96 $12.39 $11.34 $10.87 $11.87 $11.19 $10.50
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: 15.81% 8.35% 7.08% 11.34% 1.32% 1.02% 15.09% 14.62% 7.37%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted)................. $9,893 $9,182 $7,242 $4,183 $1,776 $32,253 $23,268 $11,176 $3,009
Ratio of expenses to
average net assets............. 1.40% 1.40% 1.40% 1.35% 1.20% 0.70% 0.70% 0.70% 0.70%+
Ratio of net income (loss) to
average net assets............. 0.52% 0.43% 0.70% 1.01% 1.17% 9.60% 9.61% 9.77% 7.46%+
Portfolio turnover rate........... 75.81% 89.43% 48.53% 41.40% 47.34% 43.13% 74.54% 117.01% 67.55%
Without management fee waiver
and expense reimbursement:++
Ratio of expenses to average
net assets...................... 1.78% 2.07% 2.30% 3.40% 6.12% 0.74% 0.79% 0.88% 4.38%+
Ratios of net income (loss) to
average net assets.............. 0.14% (0.24)% (0.20)% (1.04)% (3.75)% 9.56% 9.52% 9.59% 3.78%+
</TABLE>
- ----------------------
* Commencement of operations.
+ Annualized.
++ The Manager and/or Subadviser, at their discretion, reimbursed expenses
and/or waived management fees for the periods presented.
See Notes to Financial Statements.
P-73
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE-CAP SMALL-CAP
INCOME PORTFOLIO VALUE PORTFOLIO VALUE PORTFOLIO
----------------------------------------------- --------------- ---------------
YEAR ENDED DECEMBER 31, 5/1/98* 5/1/98*
----------------------------------------------- TO TO
1998 1997 1996 1995 1994 12/31/98 12/31/98
------ ------ ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $10.80 $10.52 $10.56 $9.97 $11.38 $10.00 $10.00
------ ------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)........ 0.45 0.56 0.58 0.60 0.69 0.04 (0.02)
Net realized and unrealized gain
(loss) on investments............ 0.38 0.91 0.13 1.19 (1.37) (0.07) (1.73)
------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS.... 0.83 1.47 0.71 1.79 (0.68) (0.03) (1.75)
------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income........................... (0.46) (0.55) (0.58) (0.60) (0.73) (0.04) --
Distributions from net realized
capital gain ................... (0.16) (0.64) (0.17) (0.60) -- (0.27) (0.94)
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS................. (0.62) (1.19) (0.75) (1.20) (0.73) (0.31) (0.94)
------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD...... $11.01 $10.80 $10.52 $10.56 $ 9.97 $ 9.66 $ 7.31
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: 7.76% 14.02% 6.66% 17.98% (5.96)% (0.26)% (17.00)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted)................... $14,582 $13,835 $13,717 $12,619 $10,050 $3,845 $2,469
Ratio of expenses to
average net assets............... 0.60% 0.60% 0.59% 0.60% 0.60% 0.80%+ 1.00%+
Ratio of net income (loss) to
average net assets............... 3.94% 4.71% 5.37% 5.55% 6.34% 1.11%+ (0.34)%+
Portfolio turnover rate............. 70.45% 96.99% 19.59% 51.22% 29.76% 65.82% 73.87%
Without management fee waiver
and expense reimbursement:++
Ratio of expenses to
average net assets............... 0.61% 0.63% 0.62% 0.77% 2.24%+ 3.08%+
Ratio of net income (loss) to
average net assets............... 3.93% 4.68% 5.53% 6.17% (0.33)%+ (2.43)%+
</TABLE>
- ------------------
* Commencement of operations.
+ Annualized.
++ The Manager, at its discretion, reimbursed expenses and/or waived management
fees for certain periods presented.
See Notes to Financial Statements.
P-74
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
REPORT OF THE 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,
Seligman Income Portfolio, Seligman Large-Cap Value Portfolio, and Seligman
Small-Cap Value Portfolio, collectively referred to as the "Fund") as of
December 31, 1998, and the related statements of operations, the statements of
changes in net assets, 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, 1998, 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, 1998, the results of their operations, the changes in their net assets, 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 5, 1999
P-75
<PAGE>
SELIGMAN PORTFOLIOS, INC.
- -------------------------------------------------------------------------
BOARD OF DIRECTORS
- -------------------------------------------------------------------------
JOHN R. GALVIN 2, 4
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, Raytheon Company
ALICE S. ILCHMAN 3, 4
Trustee, Committee for Economic Development
Chairman, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
JOHN E. MEROW 2, 4
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Industries, Inc.
Director, New York Presbyterian Hospital
BETSY S. MICHEL 2, 4
Trustee, The Geraldine R. Dodge Foundation
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, 4
Retired Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
Director, KeySpan Energy Corporation
Trustee, Committee for Economic Development
Director, Public Broadcasting Service
RICHARD R. SCHMALTZ 1
Managing Director, Director of Investments,
J. & W. Seligman & Co. Incorporated
Trustee Emeritus, Colby College
ROBERT L. SHAFER 3, 4
Retired Vice President, Pfizer Inc.
JAMES N. WHITSON 2, 4
Director and Consultant,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, CommScope, Inc.
BRIAN T. ZINO 1
President
President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
Director, ICI Mutual Insurance Company
Director Emeritus
FRED E. BROWN
Director and Consultant,
J. & W. Seligman & Co. Incorporated
- -----------------
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
P-76
<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
NITIN MEHTA
Vice President
ARSEN MRAKOVCIC
Vice President
MARION S. SCHULTHEIS
Vice President
CHARLES C. SMITH, JR.
Vice President
LAWRENCE P. VOGEL
Vice President
PAUL H. WICK
Vice President
GARY S. ZELTZER
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
Henderson Investment
Management Limited
3 Finsbury Avenue
London EC2M 2PA
GENERAL DISTRIBUTOR
Seligman Advisors, Inc.
100 Park Avenue
New York, New York 10017
CUSTODIANS
Investors Fiduciary Trust Company
The Chase Manhattan Bank
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Ernst & Young LLP
P-77
