Tri-Continental Corporation
To the Stockholders:
For the nine months ended September 30, your Corporation lagged the
Standard & Poor's 500 Composite Stock Price Index (S&P 500), which posted
exceptional gains during this period. The return of the S&P 500 in 1995 has
been to a large extent driven by the strength of the technology sector,
particularly the continued momentum of the U.S. semiconductor industry. For
your convenience, your Corporation's investment results, compared to the S&P
500, has been consolidated on page 6.
On October 2, your Corporation paid a dividend of $0.18 per share to
Common Stockholders of record September 22, bringing total dividends for the
first nine months of 1995 to $0.55 per share. Preferred Stockholders were paid
the regular dividend of $0.625 per share.
A net gain of $1.63 per Common share was realized on investment
transactions during the first nine months of 1995. At September 30, net
unrealized gain totaled $5.53 per share. For tax planning purposes, please keep
in mind that the realized gain distribution for 1995 will be declared November
28 and distributed before year end.
Economic Comment
Third quarter reports and statistics suggest that the U.S. economy is
maintaining its pattern of slow growth; for example, factory orders for
consumer goods rose at a tepid rate, as retailers continued to hold down
inventories. In addition, inflation remained benign and low interest rates
prevailed, supported by growing prospects for a deficit reduction plan that
will curb government spending in areas previously off limits - such as
entitlements. In the past, an environment marked by such modest but sustained
economic growth and subdued inflation has proven very positive for financial
markets.
Equity markets continued to be supported by increases - albeit at a
decelerated rate = in corporate earnings. Overall, stock valuations seem
reasonable based on estimated 1996 earnings, and equity markets should continue
to benefit from stable-to-lower interest rates and continued corporate
restructuring.
Investment Policy
In the past three months, Tri-Continental Corporation benefited from the
strong performance of interest rate sensitive positions. In particular,
Household International, Citicorp, and MBNA Corp. performed notably well as
interest rates declined. Communications issues such as AT&T and NYNEX also
contributed to your Corporation|s performance. On the other hand, the portfolio
was modestly underweighted in technology, relative to the S&P 500, and had
limited exposure to the airline industry.
Looking ahead, company-specific stock selection remains key, and your
Manager will continue to identify issues with strong underlying earnings growth
potential.
We are pleased to inform you that Mr. Brian T. Zino has been named
President of your Corpora-tion. Mr. Zino joined J.& W. Seligman & Co.
Incorporated, your Corporation|s Manager, in 1982 and is a Managing Director of
the firm and Chairman of Seligman Data Corp. We would like to thank Mr. Ronald
T. Schroeder, also a Managing Director of the firm, who served as President of
your Corporation from 1981 to 1995, for his many years of dedicated services.
For information about your Corporation, or your investment in its shares,
please write, or call the toll-free telephone numbers found on page 5. By order
of the Board of Directors,
/s/ William C. Morris
- ----------------------
William C. Morris
Chairman
/s/ / Brian T. Zino
--------------------
Brian T. Zino
President
October 27, 1995
1
<PAGE>
Portfolio of Investments September 30, 1995
(unaudited)
Shares Value
------ -----
COMMON STOCKS--84.6%
AEROSPACE--2.8%
Boeing Company 300,000 $ 20,475,000
Lockheed Martin Corporation 100,000 6,712,500
Loral Corporation 400,000 22,800,000
United Technologies Corporation 200,000 17,675,000
------------
$ 67,662,500
------------
AUTOMOTIVE AND RELATED--3.8%
Autoliv (ADRs)+* 135,000 $ 8,218,125
Dana Corporation 500,000 14,437,500
Eaton Corporation 400,000 21,200,000
General Motors Corporation Class "H" 400,000 16,400,000
Genuine Parts Company 330,000 13,241,250
Harley-Davidson Inc. 500,000 12,187,500
Volkswagen AG 20,000 6,480,056
------------
$ 92,164,431
------------
BASIC MATERIALS--1.1%
Aluminum Company of America 200,000 $ 10,575,000
Bayer AG 28,000 7,149,895
Nucor Corporation 200,000 8,950,000
------------
$ 26,674,895
------------
BUILDING AND CONSTRUCTION--1.1%
Fluor Corporation 300,000 $ 16,800,000
Sherwin-Williams Corporation 300,000 10,500,000
------------
$ 27,300,000
------------
CHEMICALS--3.3%
Air Products & Chemicals 200,000 $ 10,425,000
Dow Chemical Company 250,000 18,625,000
European Vinyls Corporation* 162,000 5,670,709
Great Lakes Chemical Corporation 300,000 20,287,500
Monsanto Company 150,000 15,112,500
Morton International, Inc. 350,000 10,850,000
------------
$ 80,970,709
------------
COMMUNICATIONS--5.2%
Alcatel Alsthom Compagnie
Generale d'Electricite 65,000 $ 5,462,784
American Telephone & Telegraph
Company 400,000 26,300,000
Bell Atlantic Corporation 300,000 18,412,500
GTE Corporation 600,000 23,550,000
Indosat (ADRs) 31,200 1,095,900
NYNEX Corporation 500,000 23,875,000
Tele Danmark (ADSs) 300,000 7,762,500
Telecom Italia-Di Risp 2,526,000 3,300,223
Telecom Italia Mobile-Di Risp 2,526,000 2,784,074
US West, Inc. 300,000 14,137,500
------------
$126,680,481
------------
COMPUTER AND BUSINESS SERVICES--1.8%
First Data Corporation 250,000 $ 15,500,000
International Business Machines
Corporation 125,000 11,796,875
Microsoft Corporation* 175,000 15,848,437
------------
$ 43,145,312
------------
CONSUMER GOODS AND SERVICES--12.1%
Allied-Domecq PLC 870,000 $ 7,416,128
B.A.T. Industries PLC 1,200,000 10,039,362
The Clorox Company 250,000 17,843,750
Coca-Cola Company 300,000 20,700,000
Colgate-Palmolive Company 300,000 19,987,500
CPC International Inc. 300,000 19,800,000
Eastman Kodak Company 450,000 26,662,500
Emerson Electric Co. 150,000 10,725,000
General Mills, Inc. 200,000 11,150,000
Gillette Company 400,000 19,050,000
Hasbro Inc. 500,000 15,562,500
Liz Claiborne, Inc. 600,000 15,150,000
PepsiCo, Inc. 300,000 15,300,000
Philip Morris Companies, Inc. 200,000 16,700,000
Procter & Gamble Company 400,000 30,800,000
Rubbermaid Incorporated 800,000 22,100,000
Wendy|s International, Inc. 700,000 14,787,500
------------
$293,774,240
------------
DIVERSIFIED--2.5%
Allied-Signal Inc. 400,000 $ 17,650,000
Corning, Inc. 350,000 10,018,750
Dover Corporation 400,000 15,300,000
Tenneco Inc. 400,000 18,500,000
------------
$ 61,468,750
------------
DRUGS AND HEALTH CARE--6.0%
Abbott Laboratories 500,000 $ 21,312,500
American Home Products Corporation 300,000 25,462,500
Bausch & Lomb Incorporated 500,000 20,687,500
Bristol-Myers Squibb Company 250,000 18,218,750
Guidant Corporation 200,000 5,850,000
Merck & Co., Inc. 300,000 16,800,000
United Healthcare Corporation 400,000 19,550,000
Warner-Lambert Company 200,000 19,050,000
------------
$146,931,250
------------
ELECTRIC AND GAS UTILITIES--4.9%
British Gas PLC (ADRs) 115,00 $ 4,686,250
China Light & Power Co. Ltd. (ADRs) 1,000,000 5,173,600
Empresa Nacional de Electricidad (ADRs) 80,000 4,120,000
Huaneng Power International (ADRs)* 220,000 3,795,000
PacifiCorp 1,000,000 19,000,000
SCEcorp 750,000 13,312,500
<PAGE>
Shares Value
------ -----
Sonat Inc. 550,000 $ 17,600,000
Southern Company 1,000,000 23,625,000
The Williams Companies, Inc. 700,000 27,300,000
------------
$118,612,350
------------
ELECTRONICS--2.5%
AMP Inc. 320,000 $ 12,320,000
Applied Materials, Inc. 200,000 20,500,000
Motorola Inc. 300,000 22,912,500
Philips Electronics N.V. (ADRs) 100,000 4,875,000
------------
$ 60,607,500
------------
ENERGY--7.4%
Amoco Corporation 400,000 $ 25,650,000
Anadarko Petroleum Company 193,000 9,143,375
Atlantic Richfield Company 125,000 13,421,875
Baker Hughes Incorporated 500,000 10,187,500
Enron Corporation 700,000 23,450,000
Exxon Corporation 300,000 21,675,000
Panhandle Eastern Corporation 750,000 20,437,500
Schlumberger Ltd. 300,000 19,575,000
Sun Company, Inc. 150,000 3,862,500
Texaco Inc. 300,000 19,387,500
Total S.A. Class "B" 75,000 4,535,999
USX-Marathon Group, Inc. 500,000 9,875,000
------------
$181,201,249
------------
ENTERTAINMENT AND LEISURE--1.3%
Disney (Walt) Company 400,000 $ 22,950,000
News Corp. Ltd. (ADRs) 260,000 5,720,000
News Corp. Ltd. (ADRs)*** 130,000 2,583,750
------------
$ 31,253,750
------------
ENVIRONMENTAL MANAGEMENT--0.3%
Browning-Ferris Industries, Inc. 250,000 $ 7,593,750
------------
FINANCE AND INSURANCE--10.3%
Aetna Life and Casualty Company 225,000 $ 16,509,375
American International Group, Inc. 300,000 25,500,000
BankAmerica Corporation 450,000 26,943,750
Bank of New York Company, Inc. 500,000 23,250,000
Corporacion Bancaria de
Espana, S.A. (ADSs) 340,000 6,120,000
Federal National Mortgage Association 200,000 20,700,000
General Re Corporation 140,000 21,140,000
Grupo Financiero Banamex
Accival, S.A. Class "B" 2,176,000 4,342,116
Household International, Inc. 350,000 21,700,000
Internationale Nederlanden Bank N.V. 121,846 7,075,568
MBNA Corporation 300,000 12,487,500
Morgan (J.P.) & Co., Inc. 300,000 23,212,500
St. Paul Companies 200,000 11,675,000
Societe Generale 26,711 $ 2,732,223
State Street Boston Corporation 350,000 14,000,000
Travelers Incorporated 250,000 13,281,250
------------
$250,669,282
------------
MANUFACTURING AND INDUSTRIAL
EQUIPMENT--3.8%
BTR PLC 1,300,000 $ 6,712,677
General Electric Company 700,000 44,625,000
General Signal Corporation 275,000 8,043,750
Illinois Tool Works, Inc. 300,000 17,662,500
Mannesmann 15,000 4,905,178
Minnesota Mining & Manufacturing
Company 125,000 7,062,500
Pacific Dunlop Ltd. 1,500,000 3,731,847
------------
$ 92,743,452
------------
PAPER AND FOREST PRODUCTS--2.2%
Bowater Incorporated 300,000 $ 13,987,500
Kimberly-Clark Corporation 400,000 26,850,000
Louisiana-Pacific Corporation 400,000 9,650,000
Stora Kopparbergs Class "B" 290,000 3,903,180
$ 54,390,680
PUBLISHING--2.3%
Donnelley (R.R.) & Sons Company 300,000 $ 11,700,000
Gannet Co., Inc. 200,000 10,925,000
Reader|s Digest Association Inc. Class "A" 250,000 11,781,250
Reed Elsevier 650,000 8,329,166
Tribune Co. 200,000 13,275,000
------------
$ 56,010,416
------------
REAL ESTATE INVESTMENT TRUST--1.7%
Avalon Properties, Inc. 500,000 $ 10,187,500
Kimco Realty Corporation 300,000 11,962,500
Post Properties, Inc. 166,000 5,146,000
Security Capital Industrial Trust 400,000 6,500,000
Security Capital Pacific Trust 400,000 7,600,000
------------
$ 41,396,000
------------
RETAIL TRADE--5.7%
American Stores Company 750,000 $ 21,281,250
Dillard Department Stores Inc. 400,000 12,750,000
May Department Stores Company 750,000 32,812,500
Nordstrom, Inc. 400,000 16,725,000
Sears, Roebuck & Company 400,039 14,751,438
Wal-Mart Stores, Inc. 1,000,000 24,875,000
Woolworth Corporation 1,000,000 15,750,000
------------
$138,945,188
------------
Steel--0.2%
Pohang Iron & Steel Ltd. (ADSs) 125,000 $ 4,109,375
------------
<PAGE>
Shares or
Prin. Amt. Value
---------- -----
TRANSPORTATION--2.3%
Conrail Inc. 250,000shs. $ 17,187,500
Jurong Shipyard Ltd. 425,000 3,045,311
Norfolk Southern Corporation 200,000 14,950,000
Roadway Services, Inc. 400,000 19,950,000
--------------
$ 55,132,811
--------------
Total Common Stocks
(Cost: $1,615,840,886) $2,059,438,371
--------------
CONVERTIBLE ISSUES--6.6%
Convertible Debentures--2.7%
COMPUTER AND BUSINESS SERVICES--0.6%
EMC Corporation, 4 1|4%, 1/1/2001 $13,000,000 $ 14,235,000
DIVERSIFIED--0.9%
Cooper Industries Inc., 7.05%, 1/1/2015 10,000,000 $ 10,112,500
MascoTech Inc., 4 1|2%, 12/15/2006 15,000,000 11,418,750
--------------
$ 21,531,250
--------------
FINANCE AND INSURANCE--0.3%
AXA, 6%, 1/1/2001 17,733,000** $ 4,321,007
Liberty Life, 6 1|2%, 9/30/2004 3,500,000 3,858,750
--------------
$ 8,179,757
--------------
MANUFACTURING AND INDUSTRIAL
EQUIPMENT--0.5%
Teco Electrical and Machinery,
2 3|4%, 4/15/2004 3,000,000 $ 2,430,000
TriMas Corporation, 5%, 8/1/2003 10,000,000 10,475,000
--------------
$ 12,905,000
--------------
PACKAGING AND PAPER--0.1%
Land and General Berhad,
4 1/2%, 7/26/2004 3,000,000 $ 3,480,000
--------------
TRANSPORTATION--0.3%
Nippon Yusen, 2%, 9/29/2000 505,000,000aa $ 5,887,437
--------------
Total Convertible Debentures
(Cost: $63,359,898) $ 66,218,444
--------------
Convertible Preferred Stocks--3.9%
COMPUTER AND BUSINESS SERVICES--0.9%
General Motors Corporation
Series "C", $3.25 325,000shs. $ 21,084,375
--------------
DIVERSIFIED=0.5%
Corning Inc. (Delaware), 6% 250,000 $ 11,687,500
--------------
FINANCE AND INSURANCE--1.5%
Citicorp $5.375a 125,000shs. $ 24,468,750
Travelers Incorporated, 5 1|2% 180,000 13,320,000
--------------
$ 37,788,750
--------------
STEEL--1.0%
AK Steel Holdings Corporation, 7% 350,000 $ 10,281,250
Bethlehem Steel Corporation, $3.50a 300,000 12,975,000
--------------
$ 23,256,250
--------------
Total Convertible Preferred Stocks
(Cost: $81,809,435) $ 93,816,875
--------------
Total Convertible Issues
(Cost: $145,169,333) $ 160,035,319
--------------
TRI-CONTINENTAL FINANCIAL
DIVISION(alpha)--1.2%
(Cost: $24,149,691) $ 29,958,024
--------------
SHORT-TERM HOLDINGS--8.2%
ABN-AMRO Bank, Grand Cayman
Fixed Time Deposit 6 1|4%, 10/2/1995 $64,000,000 $ 64,000,000
Canadian Imperial Bank of Commerce,
Grand Cayman Fixed Time
Deposit 6 1|4%, 10/2/1995 68,000,000 68,000,000
State Street Bank and Trust,
Grand Cayman Fixed Time
Deposit 6 3|8%, 10/2/1995 68,000,000 68,000,000
--------------
Total Short-Term Holdings
(Cost: $200,000,000) $ 200,000,000
--------------
Total Investments=100.6%
(Cost: $1,985,159,910) $2,449,431,714
Other Assets Less Liabilities--(0.6)% (14,544,602)
--------------
Net Investment Assets--100.0% $2,434,887,112
==============
- --------------
* Non-income producing security.
** Principal amount reported in French Francs.
*** One ADR represents 4 limited voting preference shares.
a Rule 144A security.
aa Principal amount reported in Japanese Yen.
(alpha) Restricted securities.
Note: Investments in stocks, convertible securities, limited partnership
interests and short-term holdings maturing in more than 60 days are valued at
current market values or, in their absence, at fair values determined in
accordance with procedures approved by the Board of Directors. Securities
traded on national exchanges are valued at last sales prices or, in their
absence and in the case of over-the-counter securities, a mean of bid and asked
prices. Short-term holdings maturing in 60 days or less are valued at
amortized cost.
<PAGE>
LARGEST PORTFOLIO CHANGES
July 1 to September 30, 1995
Shares
-------------------------
Holdings
Additions Increase 9/30/95
COMMON STOCKS
Genuine Parts Company 330,000 330,000
Harley-Davidson Inc. 500,000 500,000
Hasbro Inc. 500,000 500,000
Lockheed Martin Corporation 100,000 100,000
Minnesota Mining & Manufacturing
Company 125,000 125,000
Nucor Corporation 200,000 200,000
PacifiCorp 1,000,000 1,000,000
SCEcorp 750,000 750,000
St. Paul Companies 200,000 200,000
Southern Company 1,000,000 1,000,000
Holdings
Reductions Decrease 9/30/95
-------- --------
COMMON STOCKS
Boeing Company 100,000 300,000
Browning-Ferris Industries, Inc. 150,000 250,000
CINergy Corp. 500,000 --
Coca-Cola Company 150,000 300,000
Developers Diversified Realty Corp. 225,000 --
General Electric Company 100,000 700,000
International Business Machines
Corporation 75,000 125,000
NYNEX Corporation 175,000 500,000
Philip Morris Companies, Inc. 75,000 200,000
CONVERTIBLE PREFERRED STOCKS
Nacional Financiera, S.A., 111|4%,
5/15/1998 (ADRs) 150,000 --
- -------------
* Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
MAJOR EQUITY HOLDINGS
at September 30, 1995
Value
-----------
General Electric Company $44,625,000
May Department Stores Company 32,812,500
Procter & Gamble Company 30,800,000
The Williams Companies, Inc. 27,300,000
BankAmerica Corporation 26,943,750
Kimberly-Clark Corporation 26,850,000
Eastman Kodak Company 26,662,500
American Telephone & Telegraph Company 26,300,000
Amoco Corporation 25,650,000
American International Group 25,500,000
For information about your Corporation, call or write Corporate Communications,
J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New York, New York 10017.
If you want information about your investment account, call or write
Stockholder Services, Seligman Data Corp., at the same address. You may
telephone toll-free between the hours of 8:30 a.m. and 6:00 p.m. (EST) by
dialing (800) TRI-1092. For Retirement Plan Services, call (800) 445-1777.
Or you may call our 24-Hour Automated Telephone Access Service on a touch-tone
telephone at (800) 622-4597.
<PAGE>
- ------------------------- -----------------------------------------------------
Investment Results
Total Returns
For Periods Ended September 30, 1995
Average Annual
----------------------------------------------
Three Nine One Five 10
Months Months Year Years Years
------ ------ ---- ----- -----
Net Asset Value 5.88% 23.46% 22.62% 14.65% 14.70%
Market Price 4.66 21.18 19.62 13.30 12.41
S&P 500* 7.95 29.77 29.75 17.23 15.98
---------------------------------------------------------------------------
Price per share
September 30, 1995 June 30, 1995 December 31, 1994
------------------ ------------- -----------------
Net Asset Value $28.55 $27.17 $23.70
Market Price $23.50 $22.625 $19.875
---------------------------------------------------------------------------
* The S&P 500 is an unmanaged index and assumes reinvestment of estimated
dividends and does not reflect fees and expenses. Investors may not invest
directly in an index.
------------------------------------------------------
These rates of return reflect changes in price, net asset value or market
price, as applicable, and assume that all distributions within the period
are reinvested in additional shares. The rates of return will vary and the
principal value of an investment will fluctuate. Shares, if redeemed, may
be worth more or less than their original cost. Past performance is not
indicative of future investment results. Tri-Continental Corporation
Managed by
- -------------------------------------------------------------------------------
<PAGE>
TRI-CONTINENTAL CORPORATION
Manageed by
[logo]
J. & W. Seligman & Co.
incorporated
Investment Managers and Advisors
established 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of stockholders or those who
have received the current prospectus covering shares of Common Stock of
Tri-Continental Corporation, which contains information about management fees
and other costs. Please read the prospectus carefully before you invest or send
money.
CETR13c 9/15
3rd QUARTER REPORT 1995
TRI-CONTINENTAL
CORPORATION
<PAGE>
