================================================================================
TO THE STOCKHOLDERS
We are pleased to provide you with Seligman Select Municipal Fund's Mid-Year
Report that includes its portfolio of investments as of June 30, 1995.
During the past three months, your Fund paid Common Stockholders federally
tax-free monthly dividends of $0.07 per share on April 26, May 24, and June 26,
a total of $0.21 per share. The annualized distribution rate based on current
net asset value was 6.88% at June 30, which is equivalent to a taxable yield of
11.39% based on the maximum federal tax rate of 39.6%. Preferred Stockholders
were paid dividends at annual rates ranging from 4.04% to 4.25%. Earnings on
your Fund's assets in excess of the preferred dividend requirements constituted
dividend income for Common Stockholders.
At June 30, your Fund's net asset value was $12.21 per share, up from $12.11 at
March 31 and $11.54 at December 31, 1994, and your Fund's market price was
$12.25 per share, up from $12.125 and $10.50, respectively, for the same
periods. Total returns based on net asset value for the three- and six-month
periods were 2.58% and 9.56%, respectively, and based on market price were 2.79%
and 20.80%, respectively, for the same periods. (Total return reflects change in
price, net asset or market value, as applicable, and assumes that any
distri-butions paid within the period are reinvested in additional shares.)
Since we last reported to you, long-term municipal yields fluctuated within a
narrow range. At the end of June, the Bond-Buyer 20-Bond General Obligation
Index stood at 5.97%, just 10 basis points below the Index on March 30. While
investment returns for the second quarter were modest, year-to-date performance
has been strong due to the first quarter rally in which yields declined by 74
basis points.
During the second quarter, the municipal market underperformed the U.S. Treasury
market, however, long-term municipal bonds are currently yielding 90% of the
30-year U.S. Treasury bond. Municipal bonds have not been this attractive when
compared to Treasuries since the bottom of the market in November 1994. The
lackluster results of municipals in the second quarter of 1995 are due mainly to
the uncertainty surrounding the outcome of the various tax reform proposals.
While any change in federal tax rates would impact the yields of municipals, it
is premature to predict what the eventual outcome will be. At present, however,
the negative market sentiment has created an opportunity to purchase municipal
bonds at yields approaching those of taxable bonds.
More recently, on July 6, the Federal Reserve Board (FRB) voted to change policy
direction, lowering the federal funds rate to 5.75% from 6.00%. The FRB's
decision to ease credit was based on economic reports that confirm that the
economy is moderating and that the rate of inflation remains stable with no sign
of accelerating.
Looking ahead, we anticipate a continuation of the trends currently in place.
Market participants, however, remain cautious, taking their cue from the
direction of interest rates, which is based on the latest economic news. This
has resulted in increased volatility for all fixed income markets, despite
positive fundamentals.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Thomas G. Moles
Thomas G. Moles
President
August 4, 1995
1
<PAGE>
<TABLE>
<CAPTION>
==============================================================================================================
Portfolio of Investments
- --------------------------------------------------------------------------------------------------------------
Face Ratings
State Amount Municipal Bonds Moody's/S&P+ Market
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alaska-- 4.6% $10,000,000 Alaska Housing Finance Corp. (Collateralized
Home Mortgage Rev.), 7.65% due 6/1/2024 ...... Aaa/AAA $ 10,682,600
Arizona-- 0.9% 2,000,000 Phoenix Street and Highway User Rev., 61/2% due
7/1/2009 ..................................... NR/AA 2,061,260
California-- 2.5% 6,000,000 San Joaquin Hills Transportation Corridor Agency
Senior Lien Toll Road Rev. (Orange County),
63/4% due 1/1/2032 ........................... NR/NR 5,951,640
Delaware-- 3.1% 6,500,000 Delaware Economic Development Authority
Exempt Facilities Rev. (Delmarva Power and
Light Co. Project), 7.60% due 3/1/2020* ...... Aaa/AAA 7,169,955
District of 9,000,000 Metropolitan Washington, D.C. Airports Authority
Columbia-- 7.8% Airport System Rev., 7.60% due 10/1/2014* .... A1/AA- 9,865,530
7,500,000 District of Columbia G.O.'s, 71/2% due 6/1/2009 Aaa/AAA 8,431,575
Florida -- 8.3% 5,700,000 Brevard County Utility Rev., 73/8% due 3/1/2014 Aaa/AAA 6,264,642
1,105,000 Brevard County Utility Rev., 73/8% due 3/1/2014 Aaa/AAA 1,194,052
3,085,000 Florida Housing Finance Agency (Home Ownership
Rev.), 7.90% due 3/1/2022* .................... Aaa/NR 3,316,005
3,000,000 Florida Municipal Power Agency Rev. (St. Lucie
Project), 51/2% due 10/1/2012 ................. Aaa/AAA 2,902,380
5,325,000 Orange County Housing Finance Authority
(Mortgage Rev.), 7.80% due 10/1/2022* ..... Aaa/NR 5,693,437
Illinois -- 2.3% 5,000,000 Chicago O'Hare International Airport
International Terminal Special
Rev., 75/8% due 1/1/2010* ..................... Aaa/AAA 5,459,500
Indiana -- 2.3% 5,000,000 Indiana Employment Development Commission
Environmental Rev. (Public Service Company of
Indiana Inc.), 71/2% due 3/15/2015* ....... Aaa/AAA 5,439,050
Louisiana -- 5.1% 10,000,000 Louisiana Public Facilities Authority Hospital
Rev. (Southern Baptist Hospitals, Inc. Project),
8% due 5/15/2012 .............................. NR/AAA 11,811,600
Massachusetts -- 6.9% 5,370,000 Massachusetts Housing Finance Agency (Multi-
Family Residential Development Rev.), 7.65%
due 2/1/2028* ................................. Aaa/AAA 5,607,515
5,285,000 Massachusetts Port Authority Rev., 73/4% due
7/1/2018* ..................................... Aa/AA- 5,391,228
4,500,000 Massachusetts State G.O.'s Consolidated
Loan, 73/8% due 12/1/2008 ................... Aaa/AAA 5,020,830
Michigan -- 2.7% 6,000,000 Royal Oak, MI Hospital Finance Authority Rev.
(William Beaumont Hospital), 63/4%
due 1/1/2020 .................................. Aa/AA 6,202,800
Nebraska -- 1.8% 4,050,000 Nebraska Investment Finance Authority
(Single Family Mortgage Rev.), 81/8% due
8/15/2038* .................................... Aaa/AAA 4,311,184
Nevada -- 5.5% 7,000,000 Clark County Industrial Development Rev.
(Nevada Power Company Project), 7.80% due
6/1/2020* ..................................... Aaa/AAA 7,709,870
5,000,000 Washoe County Water Facility Rev. (Sierra
Pacific Power Company Project), 6.65% due
6/1/2017* ..................................... Aaa/AAA 5,250,350
New Hampshire -- 6.0% 6,300,000 New Hampshire Housing Finance Authority (Single
Family Residential Mortgage Rev.), 7.90% due
7/1/2022* ..................................... Aa/A+ 6,627,537
2
<PAGE>
==============================================================================================================
June 30, 1995
- --------------------------------------------------------------------------------------------------------------
Face Ratings
State Amount Municipal Bonds Moody's/S&P+ Market
- --------------------------------------------------------------------------------------------------------------
New Hampshire (cont.) $ 6,950,000 New Hampshire State Industrial Development
Authority Pollution Control Rev. (The
Connecticut Light and Power Company
Project), 73/8% due 12/1/2019* ................ Aaa/AAA $ 7,507,251
New Jersey -- 1.9% 4,110,000 New Jersey Housing & Mortgage Finance Agency
(Home Buyer Rev.), 7.70% due 10/1/2029* ....... Aaa/AAA 4,359,025
New York -- 7.8% 10,000,000 New York State Energy Research & Development
Authority Electric Facilities Rev.(Consolidated
Edison Co. NY Inc. Project), 71/2%
due 1/1/2026* ................................. Aaa/AAA 10,854,400
7,500,000 New York State Thruway Authority Rev., 6%
due 1/1/2025 .................................. Aaa/AAA 7,357,650
New York and 6,000,000 Port Authority of New York and New Jersey, 8%
New Jersey -- 2.7% due 12/1/2023* ................................ Aaa/AAA 6,257,640
Ohio -- 2.9% 6,575,000 Ohio Housing Finance Agency (Single Family
Mortgage Rev.), 7.65% due 3/1/2029* ........... NR/AAA 6,835,173
Pennsylvania -- 2.5% 2,500,000 Allegheny County Airport Rev. (Greater
Pittsburgh International Airport), 6.80%
due 1/1/2010* ................................. Aaa/AAA 2,683,800
3,000,000 Lehigh County Industrial Development Authority
Pollution Control Rev. (Pennsylvania Power &
Light Company Project), 6.40% due 11/1/2021 ... Aaa/AAA 3,057,690
South Dakota -- 4.6% 10,000,000 South Dakota Student Loan Corporation Student
Loan Rev., 75/8% due 8/1/2006* ................ Aaa/AAA 10,839,900
Tennessee -- 2.6% 6,000,000 Humphreys County Industrial Development Board
Solid Waste Disposal Rev. (E.I. du Pont de
Nemours & Co. Project), 6.70% due 5/1/2024* ... Aa3/AA- 6,157,260
Texas -- 8.7% 10,000,000 Lower Colorado River Authority Rev., 6%
due 1/1/2017 .................................. Aaa/AAA 9,752,400
5,000,000 Matagorda County Navigation District No. 1
Pollution Control Rev. (Houston Lighting and
Power Company Project), 77/8% due 11/1/2016* .. Aaa/AAA 5,291,750
5,000,000 Matagorda County Navigation District No. 1
Pollution Control Rev.(Central Power and Light
Co. Project), 77/8% due 12/1/2016* ............ Aaa/AAA 5,309,200
Washington -- 3.9% 2,000,000 Grant County Public Utility District No. 002
(Priest Rapids Hydroelectric Development
Rev.), 7.70% due 1/1/2018* .................... A1/A+ 2,171,380
6,000,000 Snohomish County Public Utility District
Rev., 6% due 1/1/2018 ......................... Aaa/AAA 5,862,420
1,000,000 Spokane Regional Solid Waste Management System
Rev., 73/4% due 1/1/2011* ..................... Aaa/AAA 1,109,010
------------
Total Municipal Bonds (Cost $214,630,856) -- 97.4% ......................................... 227,770,489
Short-Term Holdings (Cost $1,500,000) -- 0.6% .............................................. 1,500,000
Other Assets Less Liabilities -- 2.0% ...................................................... 4,670,774
------------
NET INVESTMENT ASSETS-- 100.0% ............................................................. $233,941,263
============
</TABLE>
- ----------------
* Interest income earned from this security is subject to the federal
alternative minimum tax.
+ Ratings have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
3
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES June 30, 1995
Assets:
Investments at value:
Long-term holdings (cost $214,630,856) ......... $227,770,489
Short-term holdings (cost $1,500,000) .......... 1,500,000 $229,270,489
------------
Cash ........................................................... 96,909
Interest receivable ............................................ 4,735,477
Expenses prepaid to stockholder service agent .................. 53,591
Other .......................................................... 37,301
------------
Total Assets ................................................... 234,193,767
------------
Liabilities:
Accrued expenses, taxes, and other ............................. 252,504
------------
Net Investment Assets .......................................... 233,941,263
Preferred Stock ................................................ 75,000,000
------------
Net Assets for Common Stock .................................... $158,941,263
============
Net Assets per share of Common Stock (market value $12.25) ..... $12.21
======
Composition of Net Assets:
Preferred Stock Series A, $.01 par value, liquidation preference
and asset coverage per share--$100,000 and $311,922, respectively;
shares authorized, issued and outstanding--375 ............... $ 37,500,000
Preferred Stock Series B, $.01 par value, liquidation preference
and asset coverageper share--$100,000 and $311,922, respectively;
shares authorized, issued and outstanding--375 ............... 37,500,000
Common Stock, $.01 par value: shares authorized--49,999,250;
issued and outstanding--13,014,106 ........................... 130,141
Additional paid-in capital ..................................... 143,231,214
Undistributed net investment income ............................ 2,368,405
Undistributed net realized gain ................................ 71,870
Net unrealized appreciation of investments ..................... 13,139,633
------------
Net Investment Assets .......................................... $233,941,263
============
- ------------------
See notes to financial statements.
4
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the six months ended June 30, 1995
Investment income:
Interest ......................................................... $7,857,916
Expenses:
Management fee ...................................... $ 640,209
Stockholder account, transfer, and registrar services 155,754
Preferred stock remarketing fee ..................... 94,759
Custody and related services ........................ 34,908
Auditing and legal fees ............................. 34,006
Stockholders' meeting ............................... 32,500
Stockholder reports and communications .............. 23,292
Directors' fees and expenses ........................ 17,659
Miscellaneous ....................................... 12,192
------------
Total expenses ...................................... 1,045,279
------------
Net investment income ............................... 6,812,637*
Net realized and unrealized gain on investments:
Net realized gain on investments .................... 71,870
Net change in unrealized appreciation ............... 8,890,249
------------
Net gain on investments ............................. 8,962,119
------------
Increase in net investment assets from operations ... $ 15,774,756
============
- -----------------
* Net investment income available for Common Stock is $5,250,583, which is net
of Preferred Stock dividends.
See notes to financial statements.
5
<PAGE>
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STATEMENT OF CHANGES IN NET INVESTMENT ASSETS
Six months
ended Year ended
6/30/95 12/31/94
---------- ----------
Operations:
Net investment income .......................... $ 6,812,637 $ 13,660,382
Net realized gain on investments ............... 71,870 345,488
Net change in unrealized appreciation .......... 8,890,249 (21,357,953)
------------ ------------
Increase (decrease) in net investment assets
from operations ................................ 15,774,756 (7,352,083)
------------ ------------
Distributions to stockholders:
Net investment income:
Preferred Stock, Series A (per share: $2,236.16
and $2,903.58) ................................ (838,559) (1,088,842)
Preferred Stock, Series B (per share: $1,929.32
and $2,907.55) ................................ (723,495) (1,090,331)
Common Stock (per share: $.42 and $.84) ........ (5,463,123) (10,919,152)
------------ ------------
Total .................................. (7,025,177) (13,098,325)
Net realized gain on investments:
Common Stock (per share: $.027) ........ -- (350,970)
------------ ------------
Decrease in net investment assets from
distributions .................................. (7,025,177) (13,449,295)
------------ ------------
Capital share transactions:
Value of shares of Common Stock issued for
investment plan (44,892 and 94,425 shares) ... 539,730 1,110,989
Value of shares of Common Stock issued in
payment of gain distribution (5,318 shares) ... -- 57,488
Cost of shares purchased for investment plan
(37,400 and 78,800 shares) .................... (447,707) (912,503)
------------ ------------
Increase in net investment assets from capital
share transactions ............................ 92,023 255,974
------------ ------------
Increase (decrease) in net investment assets ... 8,841,602 (20,545,404)
Net investment assets:
Beginning of period 225,099,661 245,645,065
------------ ------------
End of period (including undistributed net
investment income of $2,368,405 and
$2,580,945) ................................... $233,941,263 $225,099,661
============ ============
- --------------------
See notes to financial statements.
6
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. All tax-exempt securities and other short-term holdings maturing in more than
60 days are valued based upon quotations provided by an independent pricing
service or, in their absence, at fair value determined in accordance with
pro-cedures approved by the Board of Directors. Short-term holdings maturing
in 60 days or less are generally valued at amortized cost.
b. The Fund has elected to be taxed as a regulated investment company and
intends to distribute substantially all taxable net income and net gain
realized.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. Interest income is recorded on the accrual basis. The Fund
amortizes original issue discounts and premiums paid on purchases of
portfolio securities. Discounts other than original issue discounts are not
amortized.
d. Dividends and distributions paid by the Fund are recorded on the ex-dividend
date.
e. The treatment for financial statement purposes of distributions made during
the period 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. Where such
differences are permanent in nature, they are reclassified in the components
of net assets based on their ultimate characterization for federal income tax
purposes. Any such reclassification will have no effect on net assets,
results of operations, or net asset value per share of the Fund.
2. Purchases and sales of portfolio securities, excluding short-term
investments, for the six months ended June 30, 1995, amounted to $13,646,610,
and $8,513,650, respectively.
At June 30, 1995, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio securities
amounted to $13,627,222 and $487,589, respectively.
3. Under the Fund's Charter, dividends or other distributions on the Common
Stock cannot be declared unless the Fund can satisfy the requirements of two
separate asset maintenance tests after giving effect to such distributions.
The Fund, in connection with its Dividend Investment Plan (the "Plan"),
acquires and issues shares of its own Common Stock, as needed, to satisfy Plan
requirements. For the six months ended June 30, 1995, 37,400 shares were
purchased in the open market at a cost of $447,707, which represented a weighted
average discount of 1.38% from the net asset value of those acquired shares. A
total of 37,632 shares that were purchased in the open market were issued to
Plan participants during the period for proceeds of $451,884, a discount of
1.04% from the net asset value of those shares.
The Fund may make additional purchases of its Common Stock in the open
market and elsewhere at such prices and in such amounts as the Board of
Directors may deem advisable. No such additional purchases were made during the
six months ended June 30, 1995.
4. The Fund is authorized to issue 50,000,000 shares of Capital Stock, par value
$.01 per share, all of which were initially classified as Common Stock. The
Board of Directors is authorized to classify and reclassify any unissued shares
of Capital Stock, and has reclassified 750 shares of unissued Common Stock as
Preferred Stock.
The Preferred Stock is redeemable at the option of the Fund, in whole or in
part, on any dividend payment date at $100,000 per share plus any accumulated
but unpaid dividends. The Preferred Stock is also subject to mandatory
redemption at $100,000 per share plus any accumulated but unpaid dividends in
April 2020 (Series A) and April 2022 (Series B) or if certain requirements
7
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (continued)
relating to the composition of the assets and liabilities of the Fund as set
forth in its Charter are not satisfied. Liquidation preference of the Preferred
Stock is $100,000 per share plus accumulated and unpaid dividends.
Dividends on each series of Preferred Stock are cumulative at a rate
established at the initial public offering and typically are reset every 28 days
based on the lowest rate which would permit the shares to be remarketed at
$100,000 per share.
The holders of Preferred Stock have voting rights equal to the holders of
Common Stock (one vote per share) and generally will vote together with holders
of shares of Common Stock as a single class. Voting as a separate class, holders
of Preferred Stock are entitled to elect two of the Fund's directors.
5. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
all officers of the Fund, all directors of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager, is
paid by the Manager. The Manager's fee, calculated daily and payable monthly, is
equal to 0.55% per annum of the Fund's daily net assets.
Seligman Data Corp., which is owned by certain associated investment
companies, charged at cost $130,774 for stockholder account services.
Certain officers and directors of the Fund are officers or directors of the
Manager and/or Seligman Data Corp.
Fees of $8,000 were incurred by the Fund for the legal services of Sullivan
& Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in directors' fees and
expenses, and the accumulated balance thereof at June 30, 1995 of $35,053 is
included in other liabilities. Deferred fees and the related accrued interest
are not deductible for federal income tax purposes until such amounts are paid.
8
<PAGE>
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FINANCIAL HIGHLIGHTS
The Fund's financial highlights are presented below. The per share
operating performance data is designed to allow investors to trace the operating
performance, on a per Common share basis, from the Fund's beginning net asset
value to the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per Common share amount.
The total investment return based on market value measures the Fund's
performance assuming investors purchased Fund shares at market value as of the
beginning of the period, reinvested dividends and capital gains paid as provided
for in the Fund's dividend investment plan, and then sold their shares at the
closing market value per share on the last day of the period. The computations
do not reflect any sales commissions investors may incur in purchasing or
selling Fund shares. The total investment return based on net asset value is
similarly computed except that the Fund's net asset value is substituted for the
corresponding market value. The total returns for periods of less than one year
are not annualized.
The ratios of expenses to average net assets and net investment income to
average net assets for all periods presented do not reflect the effect of
dividends paid to Preferred Stockholders. Six months 2/15/90* ended Year ended
December 31, to Per share operating performance:
<TABLE>
<CAPTION>
Six months Year ended December 31, 2/15/90*
ended ---------------------------------------- to
6/30/95 1994 1993 1992 1991 12/31/90
---------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $11.54 $13.14 $12.45 $11.95 $11.15 $11.16
------ ------ ------ ------ ------ ------
Net investment income** ....................... 0.52 1.05 1.05 1.09 1.10 0.92
Net realized and unrealized investment gain
(loss) ...................................... 0.69 (1.61) 0.85 0.45 0.81 0.11
------ ------ ------ ------ ------ ------
Increase (decrease) from investment
operations .................................. 1.21 (0.56) 1.90 1.54 1.91 1.03
Dividends paid on Preferred Stock ............. (0.12) (0.17) (0.15) (0.18) (0.27) (0.25)
Dividends paid on Common Stock ................ (0.42) (0.84) (0.84) (0.84) (0.84) (0.63)
Net realized gain paid on Common Stock ........ -- (0.03) (0.22) (0.02) -- --
Offering cost of Common Stock ................. -- -- -- -- -- (0.04)
Offering cost of Preferred Stock .............. -- -- -- -- -- (0.02)
Preferred Stock underwriting discount ......... -- -- -- -- -- (0.10)
------ ------ ------ ------ ------ ------
Net increase (decrease) in net asset value .... 0.67 (1.60) 0.69 0.50 0.80 (0.01)
------ ------ ------ ------ ------ ------
Net asset value, end of period ................ $12.21 $11.54 $13.14 $12.45 $11.95 $11.15
====== ====== ====== ====== ====== ======
Market value, end of period ................... $12.25 $10.50 $13.00 $12.75 $12.25 $11.25
====== ====== ====== ====== ====== ======
Total investment return for period:
Based upon market value ..................... 20.80% (13.05)% 10.55% 11.67% 17.10% (0.70)%
Based upon net asset value .................. 9.56% (5.46)% 14.44% 11.78% 15.25% 5.82%
- -------------------
See page 10 for footnotes.
</TABLE>
9
<PAGE>
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FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Six months Year ended December 31, 2/15/90*
ended ------------------------------------- to
Ratios/Supplemental Data:** 6/30/95 1994 1993 1992 1991 12/31/90
---------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Expenses to average net assets ...... 0.90%+ 0.90% 0.92% 0.90% 0.90% 0.78%+
Net investment income to average
net assets ........................ 5.85%+ 5.84% 5.58% 6.06% 6.33% 6.58%+
Portfolio turnover .................. 3.86% 10.74% 15.83% 3.90% 7.36% 10.75%
Net investment assets, end of
period (000's omitted):
For Common Stock ..................$158,941 $150,10 $170,645 $160,844 $153,501 $142,385
-------- ------- -------- -------- -------- --------
For Preferred Stock ............... 75,000 75,000 75,000 75,000 75,000 75,000
Total net investment assets .........$233,941 $225,100 $245,645 $235,844 $228,501 $217,385
======== ======== ======== ======== ======== ========
</TABLE>
- ---------------
* Commencement of operations.
** During the period February 15, 1990, to December 31, 1990, had the
Manager, at its discretion, not waived a portion of its fee, the per share
net investment income would have been $0.91. The annualized ratios of
expenses to average net assets and net investment income to average net
assets would have been 0.83% and 6.52%, respectively.
+ Annualized.
See notes to financial statements.
================================================================================
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders,
Seligman Select Municipal Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Select Municipal Fund, Inc. as of June
30, 1995, the related statements of operations for the six months then ended and
of changes in net investment assets for the six months then ended and for the
year ended December 31, 1994, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the 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 the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at June 30,
1995, by correspondence with the Fund's custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Select
Municipal Fund, Inc. as of June 30, 1995, the results of its operations, the
changes in its net investment assets, and the financial highlights for the
respective stated periods, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
New York, New York
August 4, 1995
10
<PAGE>
================================================================================
BOARD OF DIRECTORS
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
John R. Galvin 2
Dean, Fletcher School of Law and Diplomacy
at Tufts University
Director, USLIFE Corporation
Alice S. Ilchman 3
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Chairman, The Rockefeller Foundation
Frank A. McPherson 2
Chairman and CEO, Kerr-McGee Corporation
Director, Kimberly-Clark Corporation
Chairman and Director, Baptist Medical Center
John E. Merow
Partner, Sullivan & Cromwell, Law Firm
Betsy S. Michel 2
Director or Trustee,
Various Organizations
William C. Morris 1
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Daniel Industries, Inc.
Director, Kerr-McGee Corporation
James C. Pitney 3
Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
Director, Public Service Enterprise Group
James Q. Riordan 3
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Ronald T. Schroeder 1
Managing Director,
J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3
Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson 2
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, Red Man Pipe and Supply Company
Brian T. Zino 1
Managing Director,
J. & W. Seligman & Co. Incorporated
- --------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
================================================================================
EXECUTIVE OFFICERS
William C. Morris
Chairman
Thomas G. Moles
President
Eileen A. Comerford
Vice President
Audrey G. Kuchtyak
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
PROXY RESULTS
Seligman Select Municipal Fund Stockholders voted on the following proposals at
the Annual Meeting of Stockholders on May 18, 1995, in Milwaukee, WI. The
description of each proposal and number of shares voted are as follows.
FOR AGAINST
--- -------
Election of Directors:
Fred E. Brown 9,314,877 106,565
John R. Galvin 9,310,729 110,712
Alice S. Ilchman 9,314,957 106,484
Frank A. McPherson 9,311,643 109,799
Ronald T. Schroeder 9,321,311 100,131
Ratification of Deloitte & Touche LLP as independent auditors:
FOR AGAINST ABSTAIN
--- ------- -------
9,264,878 30,184 126,379
11
<PAGE>
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
STOCKHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 874-1092 STOCKHOLDER SERVICES
(800) 622-4597 24-HOUR AUTOMATED
TELEPHONE ACCESS SERVICE
Seligman Select Municipal Fund, Inc.
Managed by
[LOGO]
J. & W. Seligman & Co.
incorporated
Investment Managers and Advisors
established 1864
100 Park Avenue, New York, NY 10017
Photo: Courtesy Michigan Travel Bureau
CESEL3b 6/95
Seligman
====================================================
Select
====================================================
Municipal
Fund, Inc.
[PHOTO]
[LOGO]
Mid-Year Report
June 30, 1995
<PAGE>
