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MID-YEAR REPORT 1995
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Tri-Continental
Corporation
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an investment you can live with
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<PAGE>
Tri-Continental Corporation
Board of Directors
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co.
Incorporated
John R. Galvin (2,4)
Dean, Fletcher School of Law and
Diplomacy at Tufts University
Director, USLIFE Corporation
Alice S. Ilchman (3,4)
President, Sarah Lawrence College
Trustee, Committee for Economic
Development
Director, NYNEX
Chairman, The Rockefeller Foundation
Frank A. McPherson (2,4)
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 (2,4)
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 (3,4)
Partner, Pitney, Hardin, Kipp &
Szuch, Law Firm
Director, Public Service
Enterprise Group
James Q. Riordan (3,4)
Director, The Brooklyn Union
Gas Company
Trustee, Committee for Economic
Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting
Service
Ronald T. Schroeder (1)
President
Managing Director,
J. & W. Seligman & Co.
Incorporated
Robert L. Shafer (3,4)
Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson (2,4)
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
(4) Board Operations Committee
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Executive Officers
William C. Morris
Chairman
Ronald T. Schroeder
President
Charles C. Smith, Jr.
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
1
<PAGE>
Highlights of the First Half
Assets: June 30, 1995 December 31, 1994
------------- -----------------
Total assets ........................... $2,362,890,497 $2,049,281,845
Amounts owed ......................... 45,660,717 17,546,369
-------------- --------------
Net investment assets .................. $2,317,229,780 $2,031,735,476
Preferred Stock, at par value ........ 37,637,000 37,637,000
-------------- --------------
Net assets for Common Stock ............ $2,279,592,780 $1,994,098,476
============== ==============
Common shares outstanding .............. 83,895,115 84,144,106
Net assets behind each
Common share ......................... $27.17 $23.70
Six Months Ended June 30,
----------------------------------
1995 1994
-------------- --------------
Taxable gain:
Net capital gain realized* ............... $ 101,915,945 $ 137,043,633
Per Common share ....................... $ 1.21 $ 1.74
Unrealized capital gain, end of
period* ................................ $ 380,755,886 $ 197,197,265
Per Common share ....................... $ 4.54 $ 2.51
Income:
Total income earned* ..................... $ 38,784,662 $ 38,317,554
Expenses ............................... 7,156,415 6,978,957
Preferred Stock dividends .............. 940,925 940,925
-------------- --------------
Income for Common Stock .................. $ 30,687,322 $ 30,397,672
============== ==============
Dividends per Common share ............... $ .37 $ .38
With December 1994 gain
distribution taken in shares ......... $ .41 --
If the 15,621 Warrants remaining outstanding had been exercised at June 30,
1995, the Corporation would have issued 199,480 additional shares of Common
Stock for $351,085. The net assets behind each Common share would have been
$27.11.
*Amounts include the effect of related foreign currency transactions.
2
<PAGE>
Tri-Continental Corporation
August 4, 1995
To the Stockholders:
Tri-Continental Corporation completed the first six months of 1995 with its
net asset value at $27.17 per share, up from $25.27 at March 31, and $23.70 at
December 31, 1994. Your Corporation's market price was $22.625 per share at June
30, up from $21.00 at March 31, and $19.875 at December 31, 1994. Total returns
for the three- and six-month periods were 8.38% and 16.60%, respectively, based
on net asset value, and 8.60% and 15.78%, respectively, based on market price,
which compares to the 9.55% and 20.21% total returns of the Standard & Poor's
500 Composite Stock Price Index (S&P 500) for the same periods. Although the S&P
500, which is comprised of stocks of many different companies from a variety of
sectors, performed favorably, it is important to note that only a few sectors of
the market, notably technology and financial, were good performers, and only a
handful of stocks consistently performed better than the S&P 500 itself. (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 July 3, your Corporation paid a dividend of $0.18 per share to Common
Stockholders of record June 23, bringing total dividends for the first six
months of 1995 to $0.37 per share. Preferred Stockholders were paid the regular
dividend of $0.625 per share.
A net gain of $1.21 per Common share was realized on investment
transactions during the first six months of 1995. At June 30, net unrealized
gain totaled $4.54 per share.
Economic Comment
After four years of expansion, the recent stream of economic reports shows
that the long awaited slowdown is under way. The Federal Reserve Board (FRB),
concerned that growth at an accelerated rate would swell inflationary pressures,
increased short-term interest rates seven times, beginning in early 1994.
However, evidence of this current slowdown and moderate inflation led the FRB to
lower rates in early July--the first decrease in three years.
In the financial markets, with signs pointing toward a slowing economy and
prospects favoring declining interest rates, the bond market rallied this past
quarter. Investor demand for equities also continued to be strong, as shown by
the Dow Jones Industrial Average moving to new highs and all broad market equity
indices posting positive returns.
Looking ahead, the economy is likely to regain strength later this year as
consumers respond to lower interest rates, exports are stimulated by a weaker
dollar, and business capital spending remains strong.
3
<PAGE>
Investment Policy
Since we last reported, your Corporation continued to benefit from the
strong performing sectors, such as technology (Applied Materials), financial
(Bank of New York), aerospace (Boeing), and selective consumer stocks (PepsiCo).
In the past quarter, your Manager made no particular sector shift, but
reduced the Corporation's positions in Real Estate Investment Trusts (REITs) and
added to positions in electric utilities. The international portion of your
portfolio experienced good performance in the past quarter, and your Manager is
optimistic about the prospects for the Corporation's overseas investments in the
second half of the year.
Going forward, your Manager remains focused on seeking the best
opportunities for long-term growth by investing in companies that have strong
earnings potential in their particular industries.
Purchases of Common Stock
Under the Automatic Dividend Investment and Cash Purchase Plan, purchases
of Common Stock are made by your Corporation in the open market and from
Stockholders participating in withdrawal plans to satisfy Plan requirements.
Such shares are then sold to Stockholders using the Plan. During the six months
ended June 30, 1995, a total of 1,072,394 shares, having a cost of $22,776,405,
were purchased by the Corporation for the Plan.
Financial Statements
Financial statements, including the portfolio of investments at June 30,
1995, largest portfolio changes made during the quarter, and the report of
independent auditors follow this letter.
By order of the Board of Directors,
/s/William C. Morris
William C. Morris
Chairman
/s/Ronald T. Schroeder
Ronald T. Schroeder
President
4
<PAGE>
Diversification of Assets
The diversification of portfolio holdings by industry on June 30, 1995, was as
follows. Individual securities owned are listed on pages 10 to 17.
Percent of
Net Investment
Assets
---------------
June 30, Dec. 31,
Issues Cost Value 1995 1994
------ ------------- ------------- ------ ------
Net Cash and Short-Term
Holdings 3 $ 187,350,500 $ 187,350,500 8.1% 4.2%
Tri-Continental
Financial Division 4 25,346,126 29,185,704 1.3 1.3
Corporate Bonds 2 10,056,885 9,712,500 0.4 2.2
U.S. Government Securities -- -- -- -- 3.3
--- -------------- -------------- ----- -----
9 $ 222,753,511 $ 226,248,704 9.8% 11.0%
--- -------------- -------------- ----- -----
Common Stocks and
Convertible Issues:
Aerospace 3 $ 49,228,826 $ 61,375,000 2.7% 1.7%
Automotive and related 5 57,468,061 67,429,606 2.9 4.0
Basic materials 2 14,136,395 16,986,012 0.7 3.7
Building and construction 2 26,396,485 26,287,500 1.1 0.9
Chemicals 6 72,012,322 82,098,100 3.6 --
Communications 10 113,919,486 123,651,848 5.3 4.0
Computer and business
services 5 61,406,229 92,231,250 4.0 5.2
Consumer goods and
services 16 199,719,332 278,731,459 12.0 10.6
Diversified 8 94,522,106 114,562,500 5.0 5.2
Drugs and health care 8 104,438,147 129,918,035 5.6 5.8
Electric and gas utilities 7 66,757,517 72,656,825 3.1 2.3
Electronics 4 37,763,267 57,382,500 2.5 2.8
Energy 12 161,263,487 187,462,932 8.1 9.4
Entertainment and leisure 3 23,156,680 30,732,500 1.3 1.2
Environmental management 1 12,814,417 14,450,000 0.6 0.7
Finance and insurance 18 189,633,911 248,959,472 10.6 10.5
Manufacturing and
industrial equipment 7 71,372,488 97,192,047 4.2 7.9
Packaging and paper 1 3,317,500 4,050,000 0.2 1.1
Paper and forest products 5 49,155,445 58,352,741 2.5 --
Publishing 5 48,183,693 52,638,870 2.3 0.3
Real estate investmen
trust 5 36,454,937 40,806,250 1.8 4.9
Retail trade 7 132,636,991 150,577,335 6.5 4.4
Steel 3 33,771,474 27,078,125 1.2 --
Transportation 5 54,191,188 55,370,169 2.4 1.9
Miscellaneous -- -- -- -- 0.5
--- -------------- -------------- ----- -----
148 $1,713,720,384 $2,090,981,076 90.2% 89.0%
--- -------------- -------------- ----- -----
NET INVESTMENT
ASSETS 157 $1,936,473,895 $2,317,229,780 100.0% 100.0%
=== ============== ============== ===== =====
5
<PAGE>
Largest Portfolio Changes*
April 1 to June 30, 1995
Shares
-----------------------------
Holdings
Additions Increase 6/30/95
------------ ------------
COMMON STOCKS
Bausch & Lomb Incorporated 250,000 500,000
CINergy Corp. 500,000 500,000
Emerson Electric Co. 150,000 150,000
Fluor Corporation 300,000 300,000
Reader's Digest Association Inc. Class "A" 250,000 250,000
Rubbermaid Incorporated 400,000 800,000
Sherwin-Williams Corporation 300,000 300,000
State Street Boston Corporation 350,000 350,000
United Technologies Corporation 200,000 200,000
Woolworth Corporation 1,000,000 1,000,000
Holdings
Reductions Decrease 6/30/95
------------ -------------
COMMON STOCKS
Alco Standard Corporation 150,000 --
Deere & Company 125,000 --
Ford Motor Company 400,000 --
Foster Wheeler Corporation 400,000 --
Grace (W.R.) & Co. 300,000 --
Macerich Company 500,000 --
NationsBank Corporation 400,000 --
Pacific Telesis Group 500,000 --
Simon Property Group, Inc. 400,000 --
CONVERTIBLE PREFERRED STOCKS
Beverly Enterprises, Inc., $2.75 275,000 --
*Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
Major Portfolio Holdings
at June 30, 1995
Value
-----------
General Electric Company $45,100,000
May Department Stores Company 35,381,250
Procter & Gamble Company 28,750,000
Coca-Cola Company 28,687,500
Eastman Kodak Company 27,281,250
NYNEX Corporation 27,168,750
Wal-Mart Stores, Inc. 26,750,000
Amoco Corporation 26,650,000
Boeing Company 25,050,000
Exxon Corporation 24,718,750
6
<PAGE>
Tri-Continental Corporation
Assets and Liabilities June 30, 1995
Assets:
Investments at value:
Common stocks (cost--$1,546,616,627).... $1,909,665,073
Convertible issues
(cost--$167,103,757).................. 181,316,003
Tri-Continental Financial Division
(cost--$25,346,126)................... 29,185,704
Corporate bonds (cost--$10,056,885)..... 9,712,500
Short-term holdings (cost--$137,000,000) 137,000,000 $2,266,879,280
--------------
Cash...................................................... 54,255,072
Receivable for securities sold............................ 30,734,580
Receivable for dividends and interest..................... 10,069,563
Investment in, and expenses prepaid to, stockholder
service agent........................................... 782,375
Other..................................................... 169,627
--------------
Total Assets...................................... $2,362,890,497
--------------
Liabilities:
Payable for securities purchased.......................... $ 28,574,443
Dividends payable......................................... 15,579,892
Accrued expenses, taxes, and other........................ 1,506,382
--------------
Total Liabilities................................. $ 45,660,717
--------------
Net Investment Assets .................................... $2,317,229,780
Preferred Stock, at $50 par value................. 37,637,000
--------------
Net Assets for Common Stock .............................. $2,279,592,780
==============
Net Assets per share of Common Stock
(market value--$22.625)......................... $27.17
======
Capital Stock and Surplus June 30, 1995
Capital Stock:
$2.50 Cumulative Preferred Stock, $50 par value,
asset coverage per share--$3,078.39
Shares authorized--1,000,000; issued
and outstanding--752,740............................ $ 37,637,000
Common Stock, $.50 par value:
Shares authorized--99,000,000; issued
and outstanding--83,895,115......................... 41,947,558
Surplus:
Capital surplus......................................... 1,753,553,732
Undistributed net investment income..................... 1,437,147
Undistributed net realized gain......................... 101,915,945
Net unrealized appreciation of investments.............. 372,871,567
Net unrealized appreciation on translation of assets
and liabilities denominated in foreign currencies..... 7,866,831
--------------
$2,317,229,780
==============
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See notes to financial statements.
7
<PAGE>
Tri-Continental Corporation
Statement of Operations
For the Six Months Ended June 30, 1995
Investment income:
Dividends (net of foreign taxes
withheld of $309,344)................ $ 31,564,494
Interest............................... 7,100,178
------------
Total investment income ................ $ 38,664,672
Expenses:
Management fee......................... $ 4,653,114
Stockholder account and
registrar services................... 1,660,662
Stockholder reports and
communications....................... 295,760
Stockholders' meeting.................. 182,700
Auditing and legal fees................ 111,962
Directors' fees and expenses........... 99,657
Registration........................... 72,361
Miscellaneous.......................... 80,199
------------
Total expenses .......................... 7,156,415
------------
Net investment income ................... $ 31,508,257*
Net realized and unrealized gain on investments and foreign currency
transactions:
Net realized gain on investments....... $101,665,949
Net realized gain from foreign
currency transactions................ 369,986
Net change in unrealized appreciation
of investments....................... 183,504,472
Net change in unrealized appreciation
on translation of assets and liabilities
denominated in foreign currencies.... 5,863,014
------------
Net gain on investments and foreign
currency transactions ................. 291,403,421
------------
Increase in net investment assets
from operations ....................... $322,911,678
============
- ------------
*Net investment income available for Common Stock is $30,687,322, which is net
of Preferred Stock dividends of $940,925 and includes net realized ordinary
gains from foreign currency transactions of $119,990.
See notes to financial statements.
8
<PAGE>
Tri-Continental Corporation
Statements of Changes in Net Investment Assets
Six Months Ended Year Ended
June 30, 1995 December 31, 1994
--------------- -----------------
Operations:
Net investment income.................... $ 31,508,257 $ 65,971,543
Net realized gain on investments......... 101,665,949 149,714,043
Net realized gain (loss) from foreign
currency transactions.................. 369,986 (285,314)
Net change in unrealized appreciation
of investments......................... 183,504,472 (282,010,077)
Net change in unrealized appreciation on
translation of assets and liabilities
denominated in foreign currencies...... 5,863,014 2,003,817
-------------- --------------
Increase (decrease) in net investment
assets from operations............... $ 322,911,678 $ (64,605,988)
-------------- --------------
Distributions to stockholders:
Net investment income:
Preferred Stock (per share: $1.25
and $2.50)......................... $ (940,925) $ (1,881,850)
Common Stock (per share: $.37
and $.79).......................... (31,044,440) (62,142,379)
-------------- --------------
$ (31,985,365) $ (64,024,229)
Net realized gain on investments:
Common Stock (per share: $1.90)...... -- (149,879,009)
-------------- --------------
Decrease in net investment assets
from distributions................. $ (31,985,365) $ (213,903,238)
-------------- --------------
Capital share transactions:
Value of shares of Common Stock issued
at market price in gain distributions
(5,366,690 shares)..................... $ -- $ 107,671,901
Value of shares of Common Stock issued
for investment plans (820,836
and 2,106,411 shares).................. 17,339,878 46,577,919
Cost of shares purchased
for investment plans (1,072,394
and 2,142,604 shares).................. (22,776,405) (47,855,965)
Net proceeds from issuance of shares of
Common Stock upon exercise of
Warrants (2,567 and 824 shares)........ 4,518 1,549
-------------- --------------
Increase (decrease) in net investment
assets from capital share
transactions....................... $ (5,432,009) $
106,395,404
-------------- --------------
Increase (decrease) in net investment
assets................................. $ 285,494,304 $ (172,113,822)
Net investment assets:
Beginning of period...................... 2,031,735,476 2,203,849,298
-------------- --------------
End of period (including undistributed
net investment income of $1,437,147
and $1,794,265)........................ $2,317,229,780 $2,031,735,476
============== ==============
- ------------
See notes to financial statements.
9
<PAGE>
Tri-Continental Corporation
Portfolio of Investments June 30, 1995
Shares Value
---------- ------------
COMMON STOCKS - 82.4%
AEROSPACE - 2.7%
Boeing Company 400,000 $ 25,050,000
Aircraft manufacturer
Loral Corporation 400,000 20,700,000
Military electronic equipment
United Technologies Corporation 200,000 15,625,000
Manufacturer of jet engines and flight systems -------------
$ 61,375,000
-------------
AUTOMOTIVE AND RELATED - 2.9%
Autoliv (ADRs)+* 155,000 $ 8,302,187
Swedish supplier of safety restraint systems
Dana Corporation 500,000 14,312,500
Equipment for trucks, fluid power systems
Eaton Corporation 400,000 23,250,000
Equipment for trucks and automobiles
General Motors Corporation Class "H" 400,000 15,800,000
Automotive manufacturer
Volkswagen AG 20,000 5,764,919
Automotive manufacturer -------------
$ 67,429,606
-------------
BASIC MATERIALS - 0.7%
Aluminum Company of America 200,000 $ 10,025,000
Leading U.S. aluminum producer
Bayer AG 28,000 6,961,012
Producer of specialty chemicals,
pharmaceuticals, and plastics -------------
$ 16,986,012
-------------
BUILDING AND CONSTRUCTION - 1.1%
Fluor Corporation 300,000 $ 15,600,000
Engineering and related services
Sherwin-Williams Corporation 300,000 10,687,500
Paints and related products -------------
$ 26,287,500
-------------
CHEMICAL - 3.6%
Air Products & Chemicals 200,000 $ 11,150,000
Industrial gases and related equipment
Dow Chemical Company 300,000 21,562,500
Diversified chemicals
European Vinyls Corporation* 162,000 7,554,350
Market leader in PVC industry
Great Lakes Chemical Corporation 300,000 18,075,000
Specialty chemicals
Monsanto Company 150,000 13,518,750
Producer of fat substitutes, herbicides,
and industrial chemicals
Morton International, Inc. 350,000 10,237,500
Adhesives, coatings, and specialty products -------------
$ 82,098,100
-------------
COMMUNICATIONS - 5.1%
Alcatel Alsthom Compagnie Generale d'Electricite 65,000 $ 5,861,272
French developer of equipment and systems for
public telecommunications
10
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
COMMUNICATIONS (continued)
American Telephone & Telegraph Company 400,000 $ 21,250,000
International and domestic
telecommunications services
Bell Atlantic Corporation 300,000 16,800,000
Local telephone services in mid-Atlantic states
GTE Corporation 600,000 20,475,000
Telephone systems and equipment
Indosat (ADRs) 31,200 1,193,400
International telecommunications to
the Indonesian Market
NYNEX Corporation 675,000 27,168,750
Telephone utility and publishing
Tele Danmark (ADSs) 300,000 8,400,000
Domestic and international telephone services
in Denmark
Telecom Italia-Di Risp 2,526,000 5,347,176
Single provider of the whole spectrum of
telecommunications services throughout Italy
US West, Inc. 300,000 12,487,500
Telephone utility -------------
$ 118,983,098
-------------
COMPUTER AND BUSINESS SERVICES - 2.2%
First Data Corporation 250,000 $ 14,218,750
Information processing services
International Business Machines Corporation 200,000 19,200,000
Manufacturer and distributor of computers
and office equipment
Microsoft Corporation* 200,000 18,087,500
Computer software -------------
$ 51,506,250
-------------
CONSUMER GOODS AND SERVICES - 12.0%
Allied-Domecq PLC 870,000 $ 7,581,130
International food, drink, and hospitality group
B.A.T. Industries PLC 1,200,000 9,203,454
UK financial services and tobacco company
The Clorox Company 250,000 16,312,500
Soap and cleaning preparations, consumer products
Coca-Cola Company 450,000 28,687,500
Soft drinks, consumer products
Colgate-Palmolive Company 300,000 21,937,500
Household and personal care products
CPC International Inc. 300,000 18,525,000
International food company
Eastman Kodak Company 450,000 27,281,250
Film, chemicals, and health care products
Emerson Electric Co. 150,000 10,725,000
Machinery manufacturing
General Mills, Inc. 200,000 10,275,000
Food and restaurants
Gillette Company 400,000 17,850,000
Personal care products
Liz Claiborne, Inc. 600,000 12,750,000
Designer and distributor of women's apparel
PepsiCo, Inc. 300,000 13,687,500
Beverages, snack foods, and restaurants
11
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
CONSUMER GOODS AND
SERVICES (continued)
Philip Morris Companies, Inc. 275,000 $ 20,453,125
Tobacco, food, and beverage manufacturer
Procter & Gamble Company 400,000 28,750,000
Household and personal care products
Rubbermaid Incorporated 800,000 22,200,000
Rubber and plastic products
Wendy's International, Inc. 700,000 12,512,500
Fast food restaurant franchise -------------
$ 278,731,459
-------------
DIVERSIFIED - 2.7%
Allied-Signal, Inc. 400,000 $ 17,800,000
Aerospace and automotive materials
Corning, Inc. 350,000 11,462,500
Specialty glass products
Dover Corporation 200,000 14,550,000
Elevators; petroleum equipment; and
industrial products
Tenneco Inc. 400,000 18,400,000
Natural gas pipelines; shipbuilding;
auto parts; packaging; and chemicals -------------
$ 62,212,500
-------------
DRUGS AND HEALTH CARE - 5.6%
Abbott Laboratories 500,000 $ 20,250,000
Diversified health care products
American Home Products Corporation 300,000 23,212,500
Drugs and consumer health care products
Bausch & Lomb Incorporated 500,000 20,750,000
Medical products
Bristol-Myers Squibb Company 250,000 17,031,250
Health and personal care products
Merck & Co., Inc. 300,000 14,700,000
Pharmaceutical company
Quorum Health Group 7,441 149,285
Owner and operator of acute care hospitals
United Healthcare Corporation 400,000 16,550,000
National managed health care company
Warner-Lambert Company 200,000 17,275,000
Drug, toiletries, and food manufacturer -------------
$ 129,918,035
-------------
ELECTRIC AND GAS UTILITIES - 3.1%
British Gas PLC (ADRs) 115,000 $ 5,218,125
UK natural gas company
China Light & Power Co. Ltd. (ADRs) 1,000,000 5,143,700
Electric utility in Hong Kong and China
CINergy Corp. 500,000 13,125,000
Electric power utility
Empresa Nacional de Electricidad (ADRs) 80,000 3,940,000
Major electric utility in Spain
Huaneng Power International (ADRs)* 220,000 4,042,500
Chinese power generator
Sonat Inc. 550,000 16,775,000
Oil and gas production and pipeline
The Williams Companies, Inc. 700,000 24,412,500
Oil and gas production and pipeline -------------
$ 72,656,825
-------------
12
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
ELECTRONICS - 2.5%
AMP Inc. 320,000 $ 13,520,000
Manufacturer of electronic connectors
and systems
Applied Materials, Inc. 225,000 19,462,500
Semiconductor equipment manufacturer
Motorola Inc. 300,000 20,137,500
Producer of semiconductors and
communications equipment
Philips Electronics N.V. (ADRs) 100,000 4,262,500
Dutch consumer electronics company -------------
$ 57,382,500
-------------
ENERGY - 8.1%
Amoco Corporation 400,000 $ 26,650,000
Oil and gas producer
Anadarko Petroleum Company 193,000 8,323,125
Oil and gas exploration and production
Atlantic Richfield Company 125,000 13,718,750
Oil producer and West Coast marketer
Baker Hughes Incorporated 500,000 10,250,000
Oil service company
Enron Corporation 700,000 24,587,500
Pipeline exploration and production
Exxon Corporation 350,000 24,718,750
Integrated oil and gas company
Panhandle Eastern Corporation 750,000 18,281,250
Oil and gas production and pipeline
Schlumberger Ltd. 300,000 18,637,500
Worldwide energy services
Sun Company, Inc. 300,000 8,212,500
East Coast oil refiner and marketer
Texaco Inc. 300,000 19,687,500
International oil company
Total S.A. Class "B" 75,000 4,521,057
International oil enterprise
USX-Marathon Group, Inc. 500,000 9,875,000
Worldwide oil and gas producer and refiner -------------
$ 187,462,932
-------------
ENTERTAINMENT AND LEISURE - 1.3%
Disney (Walt) Company 400,000 $ 22,250,000
Film entertainment, amusement parks, and
other forms of leisure-related activities
News Corp. Ltd. (ADRs) 260,000 5,882,500
Worldwide media and television provider
News Corp. Ltd. (ADRs)*** 130,000 2,600,000
Worldwide media and television provider -------------
$ 30,732,500
-------------
ENVIRONMENTAL MANAGEMENT - 0.6%
Browning-Ferris Industries, Inc. 400,000 $ 14,450,000
Solid- and liquid-waste management services -------------
13
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
FINANCE AND INSURANCE - 9.0%
Aetna Life and Casualty Company 225,000 $ 14,146,875
Multiline insurance
American International Group, Inc. 200,000 22,800,000
International insurance holding company
BankAmerica Corporation 450,000 23,681,250
Largest commercial bank in California
and Western states
Bank of New York Company, Inc. 500,000 20,187,500
Commercial bank
Corporacion Bancaria de Espana, S.A. (ADSs) 340,000 6,247,500
A Spanish bank
Federal National Mortgage Association 200,000 18,875,000
Mortgage financing
General Re Corporation 140,000 18,742,500
Largest property casualty re-insurer in the US
Household International, Inc. 400,000 19,800,000
Financial institution
Internationale Nederlanden Bank N.V. 121,846 6,744,302
Largest banking and insurance services
group in the Netherlands
MBNA Corporation 300,000 10,125,000
Issuer of bank credit cards
Morgan (J.P.) & Co., Inc. 300,000 21,037,500
Financial institution
Societe Generale 26,000 3,043,353
French financial company
State Street Boston Corporation 350,000 12,906,250
Financial institution
Travelers Incorporated 250,000 10,937,500
Broad-based financial services company -------------
$ 209,274,530
-------------
MANUFACTURING AND
INDUSTRIAL EQUIPMENT - 3.8%
BTR PLC 1,300,000 $ 6,622,756
UK global manufacturer of industrial goods
General Electric Company 800,000 45,100,000
Supplier of electrical equipment and
other industrial and consumer products
General Signal Corporation 275,000 10,931,250
Capital goods producer
Illinois Tool Works, Inc. 300,000 16,500,000
Manufacturer of fasteners, tools, and plastic items
Mannesmann 15,000 4,584,087
German engineering and telecommunications company
Pacific Dunlop Ltd. 1,500,000 3,153,954
Australian manufacturer of a wide range -------------
of products $ 86,892,047
-------------
PAPER AND FOREST PRODUCTS - 2.5%
Bowater Incorporated 400,000 $ 17,950,000
Newsprint and paper products
Kimberly-Clark Corporation 400,000 23,950,000
Consumer paper products; newsprint
14
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
PAPER AND FOREST PRODUCTS (continued)
Louisiana-Pacific Corporation 400,000 $ 10,500,000
Forest products company
Pechiney International 80,000 2,023,121
Producer of packaging products
Stora Kopparbergs Class "B" 290,000 3,929,620
Swedish paper company -------------
$ 58,352,741
-------------
PUBLISHING - 2.3%
Donnelley (R.R.) & Sons Company 300,000 $ 10,800,000
Printer
Gannet Co., Inc. 200,000 10,850,000
Newspapers, radio and TV advertising
Reader's Digest Association Inc. Class "A" 250,000 11,031,250
Publisher
Reed Elsevier 650,000 7,682,620
Global printer and publisher of professional
trade journals and magazines
Tribune Co. 200,000 12,275,000
Publishing and broadcasting -------------
$ 52,638,870
-------------
REAL ESTATE INVESTMENT TRUST - 1.8%
Avalon Properties, Inc. 500,000 $ 9,937,500
REIT focusing on apartment properties in the
Eastern United States
Developers Diversified Realty Corp. 225,000 6,468,750
REIT operator of powerstrip malls
Kimco Realty Corporation 300,000 11,400,000
High-quality REIT operator of shopping centers
Post Properties, Inc. 200,000 6,050,000
REIT aimed at apartment communities in the Southeast
Security Capital Pacific Trust 400,000 6,950,000
Real estate investment trust -------------
$ 40,806,250
-------------
RETAIL TRADE - 6.5%
American Stores Company 750,000 $ 21,093,750
Supermarkets
Dillard Department Stores Inc. 400,000 11,750,000
Major department store
May Department Stores Company 850,000 35,381,250
Large department store chain
Nordstrom, Inc. 400,000 16,525,000
Department store chain
Sears, Roebuck & Company 400,039 23,952,335
Major department store
Wal-Mart Stores, Inc. 1,000,000 26,750,000
Largest discount retail chain
Woolworth Corporation 1,000,000 15,125,000
Discount and variety retailer -------------
$ 150,577,335
-------------
STEEL - 0.2%
Pohang Iron & Steel Ltd. (ADSs) 125,000 $ 3,687,500
Korean steel manufacturer -------------
15
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
TRANSPORTATION - 2.1%
Conrail Inc. 250,000shs. $ 13,906,250
Freight railroad system
Jurong Shipyard Ltd. 425,000 3,042,233
Leading ship repair company in Singapore
Norfolk Southern Corporation 200,000 13,475,000
Rail and track transportation
Roadway Services, Inc. 400,000 18,800,000
Motor carrier --------------
$ 49,223,483
--------------
Total Common Stocks
(Cost: $1,546,616,627) $1,909,665,073
--------------
CONVERTIBLE ISSUES - 7.8% Convertible Debentures - 3.8% COMPUTER AND BUSINESS
SERVICES - 0.9%
EMC Corporation, 41/4%, 1/1/2001 $15,000,000 $ 20,250,000
--------------
DIVERSIFIED - 1.7%
Cooper Industries Inc., 7.05%, 1/1/2015 10,000,000 $ 10,375,000
MascoTech Inc., 4(cent) %, 12/15/2006 15,000,000 10,931,250
Thermo Electron Corporation, 45/8%, 8/1/1997+ 10,000,000 18,262,500
--------------
$ 39,568,750
--------------
FINANCE AND INSURANCE - 0.3%
AXA, 6%, 1/1/2001 17,733,000** $ 4,274,004
Liberty Life, 6(cent) %, 9/30/2004 3,500,000 4,171,563
--------------
$ 8,445,567
--------------
MANUFACTURING AND INDUSTRIAL
EQUIPMENT - 0.4%
TriMas Corporation, 5%, 8/1/2003 10,000,000 $ 10,300,000
--------------
PACKAGING AND PAPER - 0.2%
Land and General Berhad, 41/2%, 7/26/2004 3,000,000 $ 4,050,000
--------------
TRANSPORTATION - 0.3%
Nippon Yusen, 2%, 9/29/2000 505,000,000++ $ 6,146,686
--------------
Total Convertible Debentures
(Cost: $76,239,947) $ 88,761,003
--------------
Convertible Preferred Stocks - 4.0% COMMUNICATIONS - 0.2% Nacional Financiera,
S.A., 111/4%,
5/15/1998 (ADRs)# 150,000shs. $ 4,668,750
--------------
COMPUTER AND BUSINESS SERVICES - 0.9%
General Motors Corporation Series "C", $3.25 325,000 $ 20,475,000
--------------
16
<PAGE>
Tri-Continental Corporation
Portfolio of Investments (continued) June 30, 1995
Shares Value
---------- ------------
DIVERSIFIED - 0.6%
Corning Inc. (Delaware), 6% 250,000shs. $ 12,781,250
--------------
FINANCE AND INSURANCE - 1.3%
Citicorp, $5.375+ 125,000 $ 19,921,875
Travelers Incorporated, 51/2% 180,000 11,317,500
--------------
$ 31,239,375
--------------
STEEL - 1.0%
AK Steel Holdings Corporation, 7% 350,000 $ 9,515,625
Bethlehem Steel Corporation, $3.50+ 300,000 13,875,000
--------------
$ 23,390,625
--------------
Total Convertible Preferred Stocks
(Cost: $90,863,810) $ 92,555,000
--------------
Total Convertible Issues
(Cost: $167,103,757) $ 181,316,003
--------------
TRI-CONTINENTAL FINANCIAL
DIVISION++ - 1.3%
(Cost: $25,346,126) $ 29,185,704
--------------
CORPORATE BONDS - 0.4%
Penn Traffic Co., 95/8%, 4/15/2005 $ 5,000,000 $ 4,737,500
Stone Container Corporation, 9P. %, 2/1/2001 5,000,000 4,975,000
--------------
Total Corporate Bonds $ 9,712,500
(Cost: $10,056,885) --------------
SHORT-TERM HOLDINGS - 5.9%
Bank of Nova Scotia, Grand Cayman
Fixed Time Deposit 61/16%, 7/5/1995 37,000,000 $ 37,000,000
First National Bank of Chicago, Grand Cayman
Fixed Time Deposit 6%, 7/5/1995 50,000,000 50,000,000
Union Bank of Switzerland, Grand Cayman
Fixed Time Deposit 6i %, 7/5/1995 50,000,000 50,000,000
--------------
Total Short-Term Holdings $ 137,000,000
(Cost: $137,000,000) --------------
Total Investments - 97.8%
(Cost: $1,886,123,395) $2,266,879,280
Other Assets Less Liabilities - 2.2% 50,350,500
--------------
Net Investment Assets - 100.0% $2,317,229,780
==============
- ---------------
* Non-income producing security.
** Principal amount reported in French Francs.
*** One ADR represents 4 limited voting preference shares.
+ Rule 144A security.
++ Principal amount reported in Japanese Yen.
# Exchangeable into shares of Telefonos de Mexico S.A. (ADRs).
++ Restricted securities, see note 5.
Descriptions of companies have not been audited by Deloitte & Touche LLP. See
notes to financial statements.
17
<PAGE>
Notes to Financial Statements
1. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. 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, 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.
b. The books and records of the Corporation are maintained in U.S.
dollars. The market value of investment securities and other assets
and liabilities denominated in foreign currencies are translated into
U.S. dollars at the closing daily rate of exchange as reported by a
pricing service. Purchases and sales of investment securities, income,
and expenses are translated into U.S. dollars at the rate of exchange
prevailing on the respective dates of such transactions.
The Corporation separates 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 portfolio. Similarly, the Corporation separates
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. The Corporation may enter into forward currency contracts in order to
hedge its exposure to changes in foreign currency exchange rates on
its 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.
d. There is no provision for federal income or excise tax. The
Corporation has elected to be taxed as a regulated investment company
and intends to distribute substantially all taxable net income and net
gain realized.
e. Investment transactions are recorded on trade dates. Identified cost
of investments sold is used for both financial statement and federal
income tax purposes. Dividends receivable and payable are recorded on
ex-dividend dates. Interest income is recorded on the accrual basis.
f. 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, and the recharacterization of foreign exchange gains or losses
18
<PAGE>
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 investment 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 Corporation.
2. Under the Corporation's Charter, dividends on the Common Stock cannot be
declared unless net assets, after such dividends and dividends on Preferred
Stock, equal at least $100 per share of Preferred Stock outstanding. The
Preferred Stock is subject to redemption at the Corporation's option at any time
on 30 days' notice at $55 per share (or a total of $41,400,700 for the shares
outstanding) plus accrued dividends, and entitled in liquidation to $50 per
share plus accrued dividends.
The Corporation, in connection with its Automatic Dividend Investment and
Cash Purchase Plan and other stockholder plans, acquires and issues shares of
its own Common Stock, as needed, to satisfy Plan requirements. For the six
months ended June 30, 1995, 1,072,394 shares were purchased from Plan
participants and on the open market at a cost of $22,776,405 which represented a
weighted average discount of 15.88% from the net asset value of those acquired
shares. A total of 820,836 shares were issued to Plan participants during the
six months for proceeds of $17,339,878, a discount of 16.36% from the net asset
value of those shares.
The Corporation 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.
At June 30, 1995, 199,480 shares of Common Stock were reserved for issuance
upon exercise of 15,621 Warrants, each of which entitled the holder to purchase
12.77 shares of Common Stock at $1.76 per share. Assuming the exercise of all
Warrants outstanding at June 30, 1995, net investment assets would have
increased by $351,085 and the net asset value of the Common Stock would have
been $27.11 per share. The number of Warrants exercised during the six months
ended June 30, 1995, and the year ended December 31, 1994, was 201 and 69,
respectively.
3. Purchases and sales of portfolio securities, excluding short-term
investments, amounted to $709,948,761 and $819,426,450, 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,
including the effects of foreign currency translations, amounted to $410,810,222
and $30,054,337, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Corporation and provides necessary personnel and facilities. Compensation of
all officers of the Corporation, all directors of the Corporation who are
employees or consultants of the Manager, and all personnel of the Corporation
and the Manager is paid by the Manager. The Manager receives a fee, calculated
daily and payable monthly, equal to a percentage of the Corporation's daily net
assets at the close of business on the previous business day. The management fee
rate is calculated on a sliding scale of 0.45% to 0.375%, based on average daily
19
<PAGE>
Notes to Financial Statements (continued)
net assets of all the investment companies managed by the Manager. The
management fee for the six months ended June 30, 1995, was equivalent to an
annual rate of 0.43% of the average daily net assets of the Corporation.
Seligman Henderson Co. (the "Subadviser"), a 50% owned affiliate of the Manager,
is entitled to a portion of the Manager's fee for acting as subadviser for
certain of the international investments of the Corporation.
Seligman Data Corp., owned by the Corporation and certain associated
investment companies, charged the Corporation at cost $1,643,500 for stockholder
account services. The Corporation's investment in Seligman Data Corp. is
recorded at a cost of $43,681.
Certain officers and directors of the Corporation are officers or directors
of the Manager, the Subadviser, and/or Seligman Data Corp.
Fees of $60,000 were incurred by the Corporation for legal services of
Sullivan & Cromwell, a member of which firm is a director of the Corporation.
The Corporation 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
$359,028 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid. 5. At June 30, 1995, the Tri-Continental Financial Division of the
Corporation was comprised of four investments that were purchased through
private offerings and cannot be sold without prior registration under the
Securities Act of 1933 or pursuant to an exemption therefrom. These investments
are valued at fair value as determined in accordance with procedures approved by
the Board of Directors of the Corporation. The acquisition dates of investments
in the limited partnerships and stock, along with their cost and values at June
30, 1995, are as follows:
Investments Acquisition Date(s) Cost Value
- -------------------------------- ------------------- ----------- -----------
Tempest Reinsurance Company Ltd. 9/13/93 $10,000,000 $11,586,400
Water Street Corporate Recovery
Fund I, L.P. 10/9/90 to 4/8/94 1,457,385 1,858,543
WCAS Capital Partners II, L.P. 12/11/90 to 5/17/95 6,440,355 7,438,417
Whitney Subordinated Debt
Fund, L.P. 7/12/89 to 5/11/95 7,448,386 8,302,344
----------- -----------
Total $25,346,126 $29,185,704
=========== ===========
20
<PAGE>
Financial Highlights
The Corporation'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 Corporation'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 year. 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 amounts.
The total investment return based on market value measures the Corporation's
performance assuming investors purchased shares of the Corporation at the market
value as of the beginning of the period, invested dividends and capital gains
paid as provided for in the Corporation's Prospectus and Automatic Dividend
Investment and Cash Purchase Plan, and then sold their shares at the closing
market value per share on the last day of the period. The total investment
return based on net asset value is similarly computed except that the
Corporation's net asset value is substituted for the corresponding market value.
The total investment return computations do not reflect any sales commissions
investors may incur in purchasing or selling shares of the Corporation. The
total investment 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 the periods presented do not reflect the effect of
dividends paid to Preferred Stockholders.
Six Months Year Ended December 31,
Ended ----------------------------------
June 30, 1995 1994 1993 1992 1991 1990
------------- ------ ------ ------ ------ ------
Per Share Operating Performance:
Net asset value,
beginning of period....... $23.70 $27.49 $28.03 $28.57 $24.60 $27.44
------ ------ ------ ------ ------ ------
Net investment income....... .38 .83 .83 .81 .81 .81
Net realized and unrealized
investment gain (loss).... 3.40 (1.69) 1.46 1.19 5.79 (1.05)
Net realized and unrealized
gain on foreign currency
transactions.............. .07 .02 -- -- -- --
------ ------ ------ ------ ------ ------
Increase (decrease) from
investment operations..... 3.85 (.84) 2.29 2.00 6.60 (.24)
Dividends paid on
Preferred Stock........... (.01) (.03) (.03) (.03) (.03) (.03)
Dividends paid on
Common Stock.............. (.37) (.79) (.80) (.78) (.78) (.86)
Distribution from
net gain realized......... -- (1.90) (1.80) (.70) (1.80) (1.60)
Issuance of Common Stock
in gain distributions..... -- (.23) (.19) (.05) (.02) (.11)
Issuance of Common Stock
upon Warrant exercise..... -- -- (.01) -- -- --
Issuance of Common Stock
from exercise of Rights... -- -- -- (.97) -- --
Rights offering costs....... -- -- -- (.01) -- --
------ ------ ------ ------ ------ ------
Net increase (decrease)
in net asset value........ 3.47 (3.79) (.54) (.54) 3.97 (2.84)
------ ------ ------ ------ ------ ------
Net asset value,
end of period............. $27.17 $23.70 $27.49 $28.03 $28.57 $24.60
====== ====== ====== ====== ====== ======
21
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended -----------------------------------------------------------
June 30, 1995 1994 1993 1992 1991 1990
------------- ------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Adjusted net asset value,
end of period*............. $27.11 $23.65 $27.42 $27.95 $28.48 $ 24.52
Market value,
end of period.............. $22.625 $19.875 $23.75 $25.50 $27.75 $21.375
Total investment return:
Based upon market
value.................... 15.78% (5.07)% 3.47% .61%+ 42.98% 3.46%
Based upon net asset
value.................... 16.60% (2.20)% 8.95% 7.42%+ 27.91% (.20)%
Ratios/
Supplemental Data:
Expenses to average
net assets................. .67%++ .64% .66% .67% .67% .56%
Net investment income
to average net assets ..... 2.93%++ 3.08% 2.88% 2.86% 2.90% 3.01%
Portfolio turnover rate ..... 35.11% 70.38% 69.24% 44.35% 49.02% 41.23%
Net investment assets, end of period (000's omitted):
For Common Stock .......... $2,279,593 $1,994,098 $2,166,212 $2,088,102 $1,833,664 $1,500,281
For Preferred Stock ....... 37,637 37,637 37,637 37,637 37,637 37,637
---------- ---------- ---------- ---------- ---------- ----------
Total net investment
assets..................... $2,317,230 $2,031,735 $2,203,849 $2,125,739 $1,871,301 $1,537,918
========== ========== ========== ========== ========== ==========
</TABLE>
- ------------------
* Assumes the exercise of outstanding warrants.
+ The total investment returns for 1992 have been adjusted for the effect of
the exercise of Rights (equivalent to approximately $0.97 per share),
assuming full subscription by Common Stockholders.
++ Annualized.
See notes to financial statements.
22
<PAGE>
Report of Independent Auditors
The Board of Directors and Security Holders,
Tri-Continental Corporation:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, and the statement of capital stock and
surplus of Tri-Continental Corporation 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 the year ended December 31,
1994, and the financial highlights for the six months ended June 30, 1995, and
for each of the years in the five-year period ended December 31, 1994. These
financial statements and financial highlights are the responsibility of the
Corporation'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. Our procedures included confirmation of securities owned as of June
30, 1995, by correspondence with the Corporation's custodians and brokers; where
replies were not received from brokers, we performed other auditing procedures.
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 Tri-Continental
Corporation 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.
/s/ Deloitte & Touche LLP
---------------------
Deloitte & Touche LLP
New York, New York
August 4, 1995
23
<PAGE>
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 manage-
ment fees and other costs.
CETRI3b 6/95
