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1st QUARTER REPORT 1995
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Tri-Continental
Corporation
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an investment you can live with
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Tri-Continental Corporation
To the Stockholders:
Tri-Continental Corporation's net asset value per share was $25.27 at March
31, 1995, compared to $23.70 at December 31, 1994. Your Corporation's market
price per share was $21.00 at March 31, 1995, compared to $19.85 at December 31,
1994. Total returns for the three months were 7.59% based on net asset value,
and 6.62% based on market price, which compares to the 9.74% total return of the
Standard & Poor's 500 Composite Stock Price Index. (Total return reflects change
in price, net asset value or market, as applicable, and assumes that any
dividends are invested and capital gain distributions are taken in additional
shares during the quoted period.)
On April 3, your Corporation paid a dividend of $0.19 per share to Common
Stockholders of record March 24. Preferred Stockholders were paid the regular
dividend of $0.625 cents per share.
A net gain of $0.83 per Common share was realized on investment transactions
during the first three months of 1995. At March 31, net unrealized gain totaled
$3.03 per share.
Economic Comment
After seven short-term interest rate increases by the Federal Reserve Board
in 1994, the economy began to show signs of slowing in the first quarter of
1995. For instance, sales of previously owned homes fell to their lowest level
in two years, reflecting the delayed impact of higher interest rates on the
housing market. Retail sales were also sluggish, as consumers have backed off in
the past several months. Nevertheless, consumer confidence still remains
relatively high.
Investors, encouraged by signs of slower economic growth and by hopes of a
less stringent monetary policy, boosted financial markets in the first quarter.
The bond market bounced back from the lows experienced in late 1994, and the
stock market reached new highs, notwithstanding several negative factors
including Mexico's currency crisis, the collapse of Barings (the U.K.'s oldest
and one of its most prestigious banks), and the continual weakening of the U.S.
dollar. However, by quarter end, the plunging dollar had caused both bonds and
stocks to lose some ground.
We are optimistic that the economy will continue to expand at a moderate pace
in 1995, with inflation remaining in check. This, combined with the gradual
strengthening of the economies of U.S. trading partners, is expected to provide
a good foundation for a positive investment environment.
Investment Policy
The prospect of fewer interest rate increases had a positive impact on your
Corporation's performance. Paced by the rally in the bond market this past
quarter, your portfolio's financial investments performed particularly well,
followed by a strong show from defensive sectors such as health care, various
consumer staples, and energy. The best performing issues in your portfolio
continue to be from a diversified list of stocks, such as W.R. Grace and
Corning.
In addition, as stated in your 1994 Annual Report, one of your Manager's
intentions is to further increase the diversification in the equity portion of
the port-folio and to seek opportunities for the best long-term growth.
Consequently, your Manager focused on buying selected issues where prices were
depressed but earnings are expected to improve in 1996, such as retailers and
specialty chemicals, and natural-gas related issues. Looking forward, stock
selection will continue to drive performance and benefit your Corporation.
Tri-Continental Corporation's Annual Meeting will be held on May 18, 1995, at
the Powerhouse Theater of the Milwaukee Repertory Theater, 108 East Wells
Street, Milwaukee, WI 53202. We encourage those Stockholders who are able to
attend to do so.
By order of the Board of Directors,
/s/Williams C. Morris
William C. Morris
Chairman
/s/Ronald T. Schroeder
Ronald T. Schroeder
President
April 28, 1995
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Portfolio of Investments March 31, 1995
(unaudited)
Shares Value
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COMMON STOCKS--83.4%
AEROSPACE--2.3%
Boeing Company 400,000 $ 21,550,000
General Motors Corporation Class "H" 300,000 12,375,000
Loral Corporation 400,000 17,000,000
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$ 50,925,000
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AUTOMOTIVE AND RELATED--2.4%
Autoliv (ADRs)+* 185,200 $ 7,026,025
Dana Corporation 500,000 12,750,000
Eaton Corporation 400,000 21,700,000
Ford Motor Company 400,000 10,800,000
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$ 52,276,025
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BASIC MATERIALS--0.7%
Aluminum Company of America 200,000 $ 8,275,000
Bayer AG 28,000 6,888,244
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$ 15,163,244
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CHEMICALS--4.7%
Air Products & Chemicals 200,000 $ 10,425,000
Dow Chemical Company 375,000 27,375,000
European Vinyls Corporation* 146,280 6,095,790
Grace (W.R.) & Co. 300,000 15,975,000
Great Lakes Chemical Corporation 300,000 18,712,500
Monsanto Company 150,000 12,037,500
Morton International, Inc. 350,000 10,150,000
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$ 100,770,790
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COMMUNICATIONS--5.9%
Alcatel Alsthom Compagnie Generale
d'Electricite 65,000 $ 5,866,611
American Telephone & Telegraph
Company 400,000 20,700,000
Bell Atlantic Corporation 300,000 15,825,000
GTE Corporation 600,000 19,950,000
Indosat (ADRs)* 31,200 1,099,800
NYNEX Corporation 500,000 19,812,500
Pacific Telesis Group 500,000 15,125,000
Tele Danmark (ADSs) 300,000 7,950,000
Telecom Italia-Di Risp 2,526,000 4,682,702
Telefonica de Espana (ADSs) 115,000 4,240,625
US West, Inc. 300,000 12,000,000
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$ 127,252,238
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COMPUTERS AND BUSINESS SERVICES--2.2%
First Data Corporation 264,556 $ 13,723,843
International Business Machines
Corporation 200,000 16,375,000
Microsoft Corporation* 250,000 17,765,625
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$ 47,864,468
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CONSUMER GOODS AND SERVICES--11.1%
Allied-Domecq PLC 870,000 $ 7,460,328
B.A.T. Industries PLC 1,200,000 8,539,428
The Clorox Company 250,000 15,000,000
Coca-Cola Company 475,000 26,837,500
Colgate-Palmolive Company 300,000 19,800,000
CPC International Inc. 300,000 16,237,500
Eastman Kodak Company 450,000 23,906,250
General Mills, Inc. 200,000 11,925,000
Gillette Company 200,000 16,325,000
Liz Claiborne, Inc. 600,000 10,650,000
LVMH Moet Hennessy 15,000 2,938,915
PepsiCo, Inc. 300,000 11,700,000
Philip Morris Companies, Inc. 275,000 17,943,750
Procter & Gamble Company 400,000 26,500,000
Rubbermaid Incorporated 400,000 13,200,000
Wendy's International, Inc. 700,000 11,462,500
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$ 240,426,171
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DIVERSIFIED--3.1%
Alco Standard Corporation 150,000 $ 10,875,000
Allied-Signal Inc. 400,000 15,700,000
Corning Inc. 350,000 12,600,000
Dover Corporation 200,000 12,950,000
Tenneco Inc. 300,000 14,137,500
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$ 66,262,500
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DRUGS AND HEALTH CARE--5.1%
Abbott Laboratories 600,000 $ 21,375,000
American Home Products Corporation 300,000 21,375,000
Bristol-Myers Squibb Company 250,000 15,750,000
Merck & Co., Inc. 400,000 17,050,000
United Healthcare Corporation 400,000 18,700,000
Warner-Lambert Company 200,000 15,650,000
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$ 109,900,000
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ELECTRIC AND GAS UTILITIES--2.5%
British Gas PLC (ADRs) 115,000 $ 5,347,500
China Light & Power Co. Ltd. (ADRs) 1,000,000 4,849,800
Empresa Nacional de Electricidad (ADRs) 80,000 3,360,000
Huaneng Power International (ADRs)* 220,000 3,492,500
Sonat Inc. 550,000 16,500,000
The Williams Companies, Inc. 700,000 21,437,500
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$ 54,987,300
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ELECTRONICS--2.1%
AMP Inc. 320,000 $ 11,520,000
Applied Materials, Inc. 300,000 16,518,750
Motorola, Inc. 300,000 16,387,500
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$ 44,426,250
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ENERGY--9.3%
Amoco Corporation 400,000 $25,450,000
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Shares Value
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Anadarko Petroleum Company 193,000 $ 8,443,750
Atlantic Richfield Company 125,000 14,375,000
Baker Hughes Incorporated 500,000 10,187,500
Enron Corporation 700,000 23,100,000
Exxon Corporation 350,000 23,362,500
Panhandle Eastern Corporation 750,000 17,250,000
Royal Dutch Petroleum Company 56,000 6,720,000
Schlumberger Ltd. 300,000 17,887,500
Sun Company, Inc. 600,000 17,100,000
Texaco Inc. 300,000 19,950,000
Total S.A. Class "B" 75,000 4,469,146
USX Corporation-Marathon Group 700,000 12,250,000
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$ 200,545,396
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ENTERTAINMENT AND LEISURE--1.3%
Disney (Walt) Company 400,000 $ 21,350,000
News Corp. Ltd. (ADRs) 260,000 4,972,500
News Corp. Ltd. (ADRs)*** 130,000 2,242,500
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$ 28,565,000
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ENVIRONMENTAL MANAGEMENT--0.8%
Browning-Ferris Industries, Inc. 500,000 $ 17,000,000
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FINANCE AND INSURANCE--9.2%
Aetna Life and Casualty Company 225,000 $ 12,825,000
American International Group, Inc. 200,000 20,850,000
BankAmerica Corporation 450,000 21,712,500
Bank of New York Company, Inc. 500,000 16,437,500
Corporacion Bancaria de Espana,
S.A. (ADSs) 340,000 4,887,500
Federal National Mortgage Association 200,000 16,275,000
General Re Corporation 140,000 18,480,000
Household International, Inc. 400,000 17,400,000
Internationale Nederlanden Bank N.V 118,875 5,862,856
MBNA Corporation 500,000 14,500,000
Morgan (J.P.) & Co., Inc. 300,000 18,300,000
NationsBank Corporation 400,000 20,300,000
Travelers Incorporated 250,000 9,656,250
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$ 197,486,606
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MANUFACTURING AND INDUSTRIAL
EQUIPMENT--4.8%
BTR PLC 1,300,000 $ 6,911,944
Deere & Company 125,000 10,156,250
Foster Wheeler Corporation 400,000 13,550,000
General Electric Company 800,000 43,300,000
General Signal Corporation 275,000 9,796,875
Illinois Tool Works Inc. 350,000 17,106,250
Pacific Dunlop Ltd. 1,500,000 3,300,960
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$ 104,122,279
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PAPER AND FOREST PRODUCTS--2.2%
Bowater Incorporated 400,000 $ 14,300,000
Kimberly-Clark Corporation 400,000shs. 20,800,000
Louisiana-Pacific Corporation 400,000 11,050,000
Pechiney International 80,000 1,938,084
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$ 48,088,084
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PUBLISHING--1.8%
Donnelley (R.R.) & Sons Company 300,000 $ 10,312,500
Elsevier 650,000 6,824,368
Gannet Co., Inc. 200,000 10,675,000
Tribune Co. 200,000 11,050,000
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$ 38,861,868
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REAL ESTATE INVESTMENT TRUST--3.3%
Avalon Properties, Inc. 500,000 $ 9,812,500
Developers Diversified Realty Corp. 450,000 12,712,500
Duke Realty Investments, Inc. 200,000 5,300,000
Kimco Realty Corporation 300,000 11,512,500
Macerich Company 500,000 10,187,500
Post Properties, Inc. 200,000 5,925,000
Security Capital Pacific Trust 300,000 5,100,000
Simon Property Group, Inc. 400,000 9,750,000
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$ 70,300,000
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RETAIL TRADE--6.2%
American Stores Company 750,000 $ 19,218,750
Dillard Department Stores Inc. 400,000 11,050,000
Home Depot, Inc. 103,226 4,567,742
May Department Stores Company 850,000 31,450,000
Nordstrom, Inc. 500,000 20,250,000
Sears, Roebuck & Company 400,040 21,352,119
Wal-Mart Stores, Inc. 1,000,000 25,500,000
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$ 133,388,611
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TRANSPORTATION--2.0%
Conrail Inc. 250,000 $ 14,031,250
Jurong Shipyard Ltd. 425,000 3,639,420
Norfolk Southern Corporation 200,000 13,375,000
Roadway Services, Inc. 230,000 11,040,000
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$ 42,085,670
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MISCELLANEOUS--0.4%
Bausch & Lomb Incorporated 250,000 $ 8,937,500
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Total Common Stocks
(Cost: $1,545,413,857) $1,799,635,000
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CORPORATE BONDS--0.7%
Penn Traffic Co., 9 5/8%, 4/15/2005 $ 5,000,000 $ 4,643,750
Stone Container Corporation,
9 7/8%, 2/1/2001 10,000,000 9,737,500
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Total Corporate Bonds
(Cost: $15,056,885) $ 14,381,250
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Shares Value
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CONVERTIBLE ISSUES--9.1%
Convertible Debentures--3.6%
COMPUTER AND BUSINESS SERVICES--0.8%
EMC Corporation, 4 1/4%, 1/1/2001 $17,000,000 $ 17,722,500
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DIVERSIFIED--1.5%
Cooper Industries Inc., 7.05%, 1/1/2015 6,275,000 $ 6,424,031
MascoTech Inc., 4 1/2%, 12/15/2006 15,000,000 10,387,500
Thermo Electron Corporation, 4 5/8%, 8/1/1997+ 10,000,000 15,962,500
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$ 32,774,031
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FINANCE AND INSURANCE--0.4%
AXA, 6%, 1/1/2001 17,733,000** $ 4,091,983
Liberty Life, 6 1/2%, 9/30/2004 3,500,000 3,753,750
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$ 7,845,733
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MANUFACTURING AND INDUSTRIAL
EQUIPMENT--0.5%
TriMas Corporation, 5%, 8/1/2003 10,000,000 $ 10,450,000
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PACKAGING AND PAPER--0.2%
Land and General Berhad,
4 1/2%, 7/26/2004 3,000,000 $ 3,697,500
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TRANSPORTATION--0.2%
Nippon Yusen, 2%, 9/29/2000 505,000,000++ $ 5,949,746
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Total Convertible Debentures
(Cost: $74,701,853) $ 78,439,510
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Convertible Preferred Stocks--5.5%
AUTOMOTIVE AND RELATED--0.4%
Chrysler Corporation, $4.625+ 70,000shs. $ 8,181,250
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STEEL--1.1%
AK Steel Holdings Corporation, 7% 350,000 $ 10,018,750
Bethlehem Steel Corporation, $3.50+ 300,000 13,950,000
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$ 23,968,750
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COMMUNICATIONS--0.2%
Nacional Financiera, S.A.,
11 1/4%, 5/15/1998 (ADRs)# 150,000 $ 4,500,000
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COMPUTER AND BUSINESS SERVICES--0.9%
General Motors Corporation
Series "C", $3.25 325,000 $ 18,687,500
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DIVERSIFIED--0.6%
Corning Inc. (Delaware), 6% 250,000 $ 13,531,250
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DRUGS AND HEALTH CARE--0.7%
Beverly Enterprises Inc., $2.75 275,000 $ 15,812,500
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ENERGY--0.4%
Atlantic Richfield Company,
9%, 9/15/1997## 350,000 $ 8,750,000
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FINANCE AND INSURANCE--1.2%
Citicorp, $5.375+ 125,000 $ 14,718,750
Travelers Incorporated, 5 1/2% 180,000 10,305,000
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$ 25,023,750
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Total Convertible Preferred Stocks
(Cost: $124,423,761) $ 118,455,000
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Total Convertible Issues
(Cost: $199,125,614) $ 196,894,510
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TRI-CONTINENTAL FINANCIAL
DIVISION+++--1.3%
(Cost: $25,821,161) $ 28,335,340
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SHORT-TERM HOLDINGS--4.7%
(Cost: $100,000,000) $ 100,000,000
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Total Investments--99.2%
(Cost: $1,885,417,517) $2,139,246,100
Other Assets Less Liabilities--0.8% 17,641,652
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Net Investment Assets--100.0% $2,156,887,752
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* Non-income producing security.
** Principal amount reported in French Francs.
*** One ADR represents 4 limited voting preference shares. Non-income producing
security.
+ Rule 144A security.
+++ Principal amount reported in Japanese Yen.
# Exchangeable into shares of Telefonos de Mexico S.A. (ADRs).
## Exchangeable into shares of Lyondale Petro-Chemical Company.
++ Restricted securities.
Note: Investments in stocks, corporate bonds, 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 value 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.
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Largest Portfolio Changes*
January 1 to March 31, 1995
Shares
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Holdings
Additions Increase 3/31/95
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COMMON STOCKS
American Home Products Corporation 300,000 300,000
American Stores Company 750,000 750,000
The Clorox Company 250,000 250,000
Great Lakes Chemical Corporation 300,000 300,000
Household International, Inc. 400,000 400,000
Morgan (J.P.) &Co., Inc. 300,000 300,000
NYNEX Corporation 500,000 500,000
Pacific Telesis Group 500,000 500,000
Panhandle Eastern Corporation 750,000 750,000
The Williams Companies, Inc. 700,000 700,000
Holdings
Reductions Decrease 3/31/95
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COMMON STOCKS
Caterpillar, Inc. 300,000 --
Chemical Banking Corporation 400,000 --
Columbia/HCA Healthcare
Corporation 500,000 --
Detroit Edison Company 500,000 --
Home Depot, Inc. 410,000 103,226**
Micron Technology 615,000 --
Premark International 300,000 --
York International, Inc. 425,000 --
CONVERTIBLE PREFERRED STOCKS
Chrysler Corporation, $4.625 130,000 70,000
Citicorp, $5.375 125,000 125,000
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* Largest portfolio changes from the previous quarter to the current quarter
are based on cost of purchases and proceeds from sales of securities.
** Shares received from conversion of Home Depot, Inc., 41/2%, 7/26/2004.
Major Equity Holdings
at March 31, 1995
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Value
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General Electric Company $43,300,000
May Department Stores Company 31,450,000
Dow Chemical Company 27,375,000
Coca-Cola Company 26,837,500
Procter & Gamble Company 26,500,000
Wal-Mart Stores, Inc. 25,500,000
Amoco Corporation 25,450,000
Eastman Kodak Company 23,906,250
Exxon Corporation 23,362,500
Enron Corporation 23,100,000
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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 Line on a touch-tone telephone at (800) 622-4597.
5
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Tri-Continental Corporation
Managed 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.
CETRI3a 3/95
