<PAGE>
<PAGE>
Registration No. 33-
Investment Co. Act No. 811-266
U.S. SECURITIES AND EXCHANGE COMMISSION,
Washington, D.C. 20549
FORM N-2
|X| REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933
|_| Pre-Effective Amendment No. ------
|_| Post-Effective Amendment No. ------
and/or
|X| REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
|X| Amendment No. 25
-------
- --------------------------------------------------------------------------------
Exact Name of Registrant as Specified in Charter:
TRI-CONTINENTAL CORPORATION
- --------------------------------------------------------------------------------
Address of Principal Executive Offices (Number, Street, City, State, Zip Code):
100 Park Avenue, New York, New York 10017
- --------------------------------------------------------------------------------
Registrant's Telephone Number, including Area Code:
(212) 850-1864 or (800) 221-2450
- --------------------------------------------------------------------------------
Name and Address (Number, Street, City, State, Zip Code) of Agent for Service:
Frank J. Nasta, Esq., 100 Park Avenue, New York, New York 10017
- --------------------------------------------------------------------------------
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
- --------------------------------------------------------------------------------
If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
the following box. |X|
Calculation of Registration Fee Under the Securities Act of 1933
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Securities Amount Being Offering Price Aggregate Amount of
Being Registered Registered per Unit Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$.50 par value 2,500,000 $23.938 $59,845,000 $20,636.21
</TABLE>
The Registration Statement shall become effective hereafter in accordance with
Section 8(a) of the Securities Act of 1933.
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Form N-2-Part A Prospectus Caption
- ---------------- -------------------
Item No.
- --------
<S> <C>
1. Outside Front Cover Outside Front Cover of the Prospectus
2. Inside Front and Outside Back Cover Page Inside Front and Outside Back Cover Page of
Prospectus
3. Fee Table and Synopsis Summary of Corporation Expenses; Prospectus Summary
4. Financial Highlights Financial Highlights
5. Plan of Distribution Not Applicable
6. Selling Shareholders Not Applicable
7. Use of Proceeds Description of Investment Plans and Other Services -
Method of Purchase
8. General Description of the Registrant Prospectus Summary; The Corporation; Investment and
Other Policies; Trading and Net Asset Value
Information Concerning Tri-Continental Corporation
Common Stock
9. Management Management of the Corporation; Description of
Investment Plans and Other Services; Back Cover Page
of Prospectus
10. Capital Stock, Long-Term Debt, and Other Description of Capital Stock; Description of
Warrants;
Securities Dividend Policy and Taxes; Description of Investment
Plans and Other Services; Capitalization at March
31, 1996
11. Defaults and Arrears on Senior Securities Not Applicable
12. Legal Proceedings Not Applicable
13. Table of Contents of the Statement Table of Contents of the Statement of Additional
of Additional Information Information
</TABLE>
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Form N-2-Part B Statement of Additional Information Caption
- --------------- -------------------------------------------
Item No.
- --------
<S> <C>
14. Cover Page Cover Page of the Statement of Additional Information
15. Table of Contents Cover Page of the Statement of Additional Information
16. General Information and History Certain Transactions of the Corporation
17. Investment Objectives and Policies Additional Investment Objectives and Policies
18. Management Directors and Officers
19. Control Persons and Principal Holders Directors and Officers - Holdings of Preferred Stock,
of Securities Common Stock and Warrants
20. Investment Advisory and Other Services Directors and Officers - Holdings of Preferred
Stock, Common Stock and Warrants; Management;
Experts; Custodian, Stockholder Service Agent and
Dividend Paying Agent
21. Brokerage Allocation and Other Practices Brokerage Commissions
22. Tax Status Additional Investment Objectives and Policies
23. Financial Statements Incorporation of Financial Statements by Reference
</TABLE>
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
AN INVESTMENT YOU CAN LIVE WITH
May 1, 1996
100 Park Avenue
New York, NY 10017
New York City Telephone (212) 850-1864
Toll-Free Telephone (800) 874-1092 -- all continental United States
For Retirement Plan Information -- Toll-Free Telephone (800) 445-1777
Tri-Continental Corporation (the 'Corporation') is a diversified,
closed-end investment company -- a publicly traded investment fund. The
Corporation's Common Stock is traded on the New York Stock Exchange under the
symbol 'TY.'
The Corporation invests primarily for the longer term, and over the years
the Corporation's objective has been to produce future growth of both capital
and income while providing reasonable current income. Common stocks have made up
the bulk of investments. However, assets may be held in cash or invested in all
types of securities. See 'Investment and Other Policies.' No assurance can be
given that the Corporation's investment objective will be realized. The
Corporation's Investment Manager is J. & W. Seligman & Co. Incorporated.
This Prospectus applies to all shares of Common Stock purchased pursuant to
the Corporation's various Investment Plans. See 'Description of Investment Plans
and Other Services.' The shares of Common Stock covered by this Prospectus also
may be issued from time to time by the Corporation in connection with the
acquisition of the assets of personal holding companies, private investment
companies or publicly-owned investment companies. See 'Issuance of Shares in
Connection with Acquisitions.'
This Prospectus sets forth concisely the information that a prospective
investor should know about the Corporation before investing. Investors are
advised to read this Prospectus carefully and to retain it for future reference.
Additional information about the Corporation, including a Statement of
Additional Information (the 'SAI'), has been filed with the Securities and
Exchange Commission. The SAI is available upon request and without charge by
writing or calling the Corporation at the address or telephone numbers listed
above. The SAI is dated the same date as this Prospectus and is incorporated
herein by reference in its entirety. The table of contents of the SAI appears on
page 22 of this Prospectus. In addition, copies of the 1995 Annual Report to
Stockholders of the Corporation (the '1995 Annual Report') will be furnished,
without charge, to investors requesting copies of the SAI. The 1995 Annual
Report contains financial statements of the Corporation for the year ended
December 31, 1995 which are incorporated by reference into the SAI.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE PAGE
---- ----
<S> <C>
Summary of Corporation Expenses.................. 2
Prospectus Summary............................... 3
Financial Highlights............................. 4
Capitalization at March 31, 1996................. 7
Trading and Net Asset Value Information
Concerning Tri-Continental Corporation Common
Stock.......................................... 7
The Corporation.................................. 8
Investment and Other Policies.................... 8
Management of the Corporation.................... 10
Description of Capital Stock..................... 13
Description of Warrants.......................... 14
Computation of Net Asset Value................... 14
Dividend Policy and Taxes........................ 15
Description of Investment Plans and Other
Services....................................... 17
Issuance of Shares in Connection with
Acquisitions................................... 21
Additional Information........................... 21
Table of Contents of the Statement of Additional
Information.................................... 22
Authorization Form for Automatic Dividend
Investment and Cash Purchase Plan.............. 23
Authorization Form for Automatic Check Service... 24
</TABLE>
SUMMARY OF CORPORATION EXPENSES
The following table illustrates the expenses and fees that the Corporation
expects to incur and that stockholders can expect to bear.
<TABLE>
<S> <C>
STOCKHOLDER TRANSACTION EXPENSES
Automatic Dividend Investment and Cash Purchase Plan Fees.......................... (1)
ANNUAL EXPENSES FOR 1995 (AS A PERCENTAGE OF NET ASSETS ATTRIBUTABLE TO COMMON STOCK)
Management Fees.................................................................... .42%
Other Expenses..................................................................... .21%
----
Total Annual Expenses......................................................... .63%
----
----
</TABLE>
- ------------
(1) Stockholders participating in the Corporation's investment plans pay a
maximum $2.00 fee per transaction. See 'Description of Investment Plans and
Other Services -- Automatic Dividend Investment and Cash Purchase Plan'
for a description of the investment plans and services.
The purpose of the table above is to assist investors in understanding the
various costs and expenses they will bear directly or indirectly. For more
complete descriptions of the various costs and expenses, see 'Management of the
Corporation' and 'Description of Investment Plans and Other Services --
Automatic Dividend Investment and Cash Purchase Plan.'
The following example illustrates the expenses an investor would pay on a
$1,000 investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Tri-Continental Corporation
Common Stock......................................... $6 $20 $35 $ 79
</TABLE>
The example does not represent actual or anticipated expenses, which may be
greater or less than those shown. Moreover, the Corporation's actual rate of
return may be greater or less than the hypothetical 5% return shown in the
example.
2
<PAGE>
<PAGE>
PROSPECTUS SUMMARY
The following is qualified in its entirety by the more detailed information
included elsewhere in this Prospectus.
The Corporation is a Maryland corporation formed in 1929 by the
consolidation of two predecessor corporations. It is registered under the
Investment Company Act of 1940, as amended (the '1940 Act'), as a diversified
management investment company of the closed-end type. This Prospectus applies to
shares of Common Stock of the Corporation. The Corporation invests primarily for
the longer term and has no Charter restrictions with respect to such
investments. Over the years the Corporation's objective has been to produce
future growth of both capital and income while providing reasonable current
income. See 'The Corporation.' There can be no assurance that this objective
will be attained. While common stocks have made up the bulk of investments,
assets may be held in cash or invested in all types of securities in whatever
amounts or proportions J. & W. Seligman & Co. Incorporated (the 'Manager')
believes best suited to current and anticipated economic and market conditions.
These may include repurchase agreements, options, illiquid securities and
securities of foreign issuers, each of which could involve certain risks. See
'Investment and Other Policies.' The Corporation's Common Stock is listed on the
New York Stock Exchange under the symbol 'TY.' The average weekly trading volume
on that and other exchanges during 1995 was 275,761 shares. The Corporation's
Common Stock has historically been traded on the market at less than net asset
value. As of March 31, 1996, the Corporation had 89,180,936 shares of Common
Stock outstanding and net assets attributable to Common Stock of $2,611,058,237.
The Manager manages the investment of the assets of the Corporation and
administers its business and other affairs pursuant to a Management Agreement
approved by the Board of Directors and the stockholders of the Corporation. The
Manager also serves as manager of sixteen other investment companies which,
together with the Corporation, make up the 'Seligman Group.' The aggregate
assets of the Seligman Group at March 31, 1996 were approximately $11.9 billion.
The Manager also provides investment management or advice to institutional
accounts having a value at March 31, 1996 of approximately $3.9 billion. The
Manager's fee is based in part on the average daily net assets of the
Corporation. The management fee rate for 1995 was equivalent to .42% of the
Corporation's average daily net assets. Seligman Henderson Co. acts as
subadviser with respect to a portion of the Corporation's assets. See
'Management of the Corporation.'
Shares of Common Stock covered by this Prospectus may be purchased from
time to time by Seligman Data Corp., the plan service agent for Automatic
Dividend Investment and Cash Purchase Plans, Individual Retirement Account
Trusts ('IRAs'), Retirement Plans for Self-Employed Individuals, Partnerships
and Corporations, the J. & W. Seligman & Co. Incorporated 401(K) Salary
Reduction Matched Accumulation Plan and the Seligman Data Corp. Employees'
Thrift Plan (collectively, the 'Plans'), as directed by participants, and may be
sold from time to time by the plan service agent for participants in Automatic
Cash Withdrawal Plans ('ACWP'). See 'Description of Investment Plans and Other
Services -- Automatic Dividend Investment and Cash Purchase Plan' and
' -- Automatic Cash Withdrawal Plan.' Shares will be purchased for the Plans on
the New York Stock Exchange or elsewhere when the market price of the Common
Stock is equal to or less than its net asset value, and any brokerage
commissions applicable to such purchases will be charged pro rata to the Plan
participants. Shares will be purchased for the Plans from the Corporation at net
asset value when the net asset value is lower than the market price, all as more
fully described in this Prospectus.
3
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
The Corporation's financial highlights for the years presented below have
been audited by Deloitte & Touche LLP, independent auditors. This information
which is derived from the financial and accounting records of the Corporation
should be read in conjunction with the financial statements and notes contained
in the 1995 Annual Report which may be obtained from the Corporation as provided
on the cover page of this Prospectus.
The per share operating performance data is designed to allow an investor
to trace the operating performance, on a per common share basis, from the
Corporation's beginning net asset value to its ending net asset value so that
investors may understand what effect the individual items have on the investor's
investment, assuming it was held throughout the year.
PER SHARE OPERATING PERFORMANCE, TOTAL
(FOR A SHARE OF COMMON STOCK
<TABLE>
<CAPTION>
-------------------------------------------------------
1995 1994 1993 1992
------ ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year........................ $23.70 $27.49 $28.03 $28.57
------ ------ ------ ------
Net investment income*.................................... .74 .83 .83 .81
Net realized and unrealized investment gain (loss)........ 6.14 (1.69) 1.46 1.19
Net realized and unrealized gain on foreign currency
transactions............................................ .03 .02 -- --
------ ------ ------ ------
Increase (decrease) from investment operations............ 6.91 (.84) 2.29 2.00
Dividends paid on Preferred Stock......................... (.02) (.03) (.03) (.03)
Dividends paid on Common Stock............................ (.73) (.79) (.80) (.78)
Distribution from net gain realized....................... (2.01) (1.90) (1.80) (.70)
Issuance of Common Stock in gain distributions............ (.27) (.23) (.19) (.05)
Issuance of Common Stock from exercise of Rights.......... -- -- -- (.97)
Rights offering costs..................................... -- -- -- (.01)
Issuance of Common Stock upon Warrant exercise**.......... -- -- (.01) --
------ ------ ------ ------
Net increase (decrease) in net asset value................ 3.88 (3.79) (.54) (.54)
------ ------ ------ ------
Net asset value at end of year............................ $27.58 $23.70 $27.49 $28.03
------ ------ ------ ------
------ ------ ------ ------
Adjusted net asset value at end of year**................. $27.52 $23.65 $27.42 $27.95
Market value, end of period............................... $22.625 $19.875 $23.75 $25.50
TOTAL INVESTMENT RETURN FOR YEAR:
Based upon market value................................... 27.95% (5.07)% 3.47% .61%`D'
Based upon net asset value................................ 30.80% (2.20)% 8.95% 7.42%`D'
RATIOS AND SUPPLEMENTAL DATA:***
Expenses to average net assets............................ .63% .64% .66% .67%
Net investment income to average net assets............... 2.71% 3.08% 2.88% 2.86%
Portfolio turnover rate................................... 62.28% 70.38% 69.24% 44.35%
Net investment assets, end of year (000's omitted):
For Common Stock...................................... $2,469,149 $1,994,098 $2,166,212 $2,088,102
For Preferred Stock................................... 37,637 37,637 37,637 37,637
Total net investment assets............................... $2,506,786 $2,031,735 $2,203,849 $2,125,739
</TABLE>
- ------------
* Net investment income per share has been calculated by dividing the
respective actual amounts for the year by average shares outstanding.
** Assumes the exercise of outstanding warrants. Warrant exercise terms were:
October 1, 1985 to March 2, 1986 -- 5.98 shares at $3.76 per share, March 3,
1986 to December 28, 1986 -- 6.37 shares at $3.53 per share, December 29,
1986 to January 1, 1987 -- 6.98 shares at $3.22 per share, January 2, 1987
to December 29, 1987 -- 7.00 shares at $3.21 per share, December 30, 1987 to
December 29, 1988 -- 7.83 shares at $2.87 per share, December 30, 1988 to
December 29, 1989 -- 8.14 shares at $2.76 per share, December 30, 1989 to
December 28, 1990 -- 8.81 shares at $2.55 per share, December 29, 1990 to
December 27, 1991 -- 9.25 shares at $2.43 per share, December 28, 1991 to
November 1, 1992 -- 9.69 shares at $2.32 per share, November 2, 1992 to
December 28, 1992 -- 11.07 shares at
4
<PAGE>
<PAGE>
Generally, the per share amounts are derived by converting the actual dollar
amounts incurred for each item, as disclosed in the financial statements, to
their equivalent per common share amount. The total investment return based on
market value measures the Corporation's performance assuming investors purchased
shares of the Corporation at the market value as of the beginning of the year,
invested dividends and capital gains paid as provided for in the Corporation's
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 year. The
computation does not reflect any sales commissions investors may incur in
purchasing or selling shares of the Corporation. 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.
INVESTMENT RETURNS, RATIOS AND SUPPLEMENTAL DATA
OUTSTANDING THROUGHOUT EACH YEAR)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------------------------
1991 1990 1989 1988 1987 1986
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$24.60 $27.44 $23.55 $23.94 $27.94 $29.78
------ ------ ------ ------ ------ ------
.81 .81 .88 .84 .86 1.02
5.79 (1.05) 6.78 1.01 (.03) 5.16
-- -- -- -- -- --
------ ------ ------ ------ ------ ------
6.60 (.24) 7.66 1.85 .83 6.18
(.03) (.03) (.04) (.04) (.04) (.04)
(.78) (.86) (.84) (.81) (.89) (.97)
(1.80) (1.60) (2.55) (1.25) (3.73) (6.96)
(.02) (.11) (.33) (.14) (.16) (.04)
-- -- -- -- -- --
-- -- -- -- -- --
-- -- (.01) -- (.01) (.01)
------ ------ ------ ------ ------ ------
(3.97) (2.84) 3.89 (.39) (4.00) (1.84)
------ ------ ------ ------ ------ ------
$28.57 $24.60 $27.44 $23.55 $23.94 $27.94
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
$28.48 $24.52 $27.35 $23.47 $23.86 $27.84
$27.75 $21.375 $23.00 $19.25 $20.625 $28.625
42.98% 3.46% 37.96% 3.02% (12.27)% 26.62%
27.91% (.20)% 34.54% 8.58% 3.30% 21.89%
.67% .56% .55% .57% .53% .53%
2.90% 3.01% 3.19% 3.33% 2.66% 3.14%
49.02% 41.23% 59.87% 67.39% 78.99% 51.46%
$1,833,664 $1,500,281 $1,594,505 $1,263,848 $1,237,091 $1,279,718
37,637 37,637 37,637 37,637 37,637 37,637
$1,871,301 $1,537,918 $1,632,142 $1,301,485 $1,274,728 $1,317,355
</TABLE>
$2.03 per share, December 29, 1992 to December 28, 1993 -- 11.29 shares at
$1.99 per share, December 29, 1993 to December 21, 1994 -- 11.95 shares at
$1.88 per share, December 22, 1994 to December 27, 1995 -- 12.77 shares at
$1.76 per share; and subsequently, 13.54 shares at $1.66 per share.
`D' 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.
*** The ratios of expenses to average net assets and net investment income to
average net assets for all periods presented do not reflect the effect of
dividends paid to Preferred Stockholders.
5
<PAGE>
<PAGE>
SENIOR SECURITIES -- $2.50 CUMULATIVE PREFERRED STOCK
The following information is being presented with respect to the
Corporation's $2.50 Cumulative Preferred Stock. The first column presents the
number of preferred shares outstanding at the end of each of the periods
presented. Asset Coverage represents the total amount of net assets of the
Corporation in relation to each share of Preferred Stock outstanding as of the
end of the respective periods. The involuntary liquidation preference is the
amount each share of Cumulative Preferred Stock would be entitled to upon
involuntary liquidation of these shares.
<TABLE>
<CAPTION>
AVERAGE
YEAR- DAILY
END INVOLUNTARY MARKET
ASSET LIQUIDATING VALUE PER
TOTAL SHARES COVERAGE PREFERENCE SHARE (EXCLUDING
YEAR OUTSTANDING PER SHARE PER SHARE BANK LOANS)
- ------------------------------------ ------------ --------- ------------ ----------------
<S> <C> <C> <C> <C>
1995................................ 752,740 $ 3,330 $ 50 $33.37
1994................................ 752,740 2,699 50 34.12
1993................................ 752,740 2,928 50 36.17
1992................................ 752,740 2,824 50 34.97
1991................................ 752,740 2,486 50 31.51
1990................................ 752,740 2,043 50 28.62
1989................................ 752,740 2,168 50 28.61
1988................................ 752,740 1,729 50 28.49
1987................................ 752,740 1,693 50 31.05
1986................................ 752,740 1,750 50 32.87
</TABLE>
6
<PAGE>
<PAGE>
CAPITALIZATION AT MARCH 31, 1996
<TABLE>
<CAPTION>
AMOUNT HELD
BY
REGISTRANT
OR FOR ITS
TITLE OF CLASS AUTHORIZED OUTSTANDING ACCOUNT
- ------------------------------------------------------------ --------------- --------------- ------------
<S> <C> <C> <C>
$2.50 Cumulative Preferred Stock,
$50 par value............................................. 1,000,000 shs. 752,740 shs. - 0 - shs.
Common Stock,
$.50 par value............................................ 99,000,000 shs.* 89,180,936 shs. - 0 - shs.
Warrants to purchase
Common Stock.............................................. 14,651 wts 14,651 wts. - 0 - wts.
</TABLE>
- ------------
* 198,375 shares of Common Stock were reserved for issuance upon the exercise
of outstanding Warrants.
TRADING AND NET ASSET VALUE INFORMATION CONCERNING
TRI-CONTINENTAL CORPORATION COMMON STOCK
The following table shows the high and low sale prices of the Corporation's
Common Stock on the composite tape for issues listed on the New York Stock
Exchange, the high and low net asset value and the percentage discount or
premium to net asset value per share for each calendar quarter since the
beginning of 1994.
<TABLE>
<CAPTION>
(DISCOUNT) OR
PREMIUM TO NET
MARKET PRICE NET ASSET VALUE ASSET VALUE
------------- ---------------- --------------------
1994 HIGH LOW HIGH LOW HIGH LOW
- ----------------------------------- ------------ ------------ ----- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1st Q.............................. 24 1/2 21 1/2 28.46 26.47 (13.91)% (18.78)%
2nd Q.............................. 23 1/4 21 3/8 27.01 26.12 (13.92)% (18.17)%
3rd Q.............................. 23 5/8 22 27.32 25.86 (13.52)% (14.93)%
4th Q.............................. 22 3/4 19 3/4 26.70 23.75 (14.79)% (16.84)%
<CAPTION>
1995
- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Q.............................. 21 1/8 19 7/8 25.30 23.70 (16.50)% (16.14)%
2nd Q.............................. 23 20 7/8 27.31 25.29 (15.78)% (17.46)%
3rd Q.............................. 24 22 3/8 28.92 27.57 (17.01)% (18.84)%
4th Q.............................. 25 22 1/4 30.13 27.18 (17.03)% (18.14)%
<CAPTION>
1996
- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Q.............................. 24 1/2 22 5/8 29.58 27.32 (17.17)% (17.19)%
</TABLE>
The Corporation's Common Stock has historically been traded on the market
at less than net asset value. The closing market price, net asset value and
percentage discount to net asset value per share of the Corporation's Common
Stock on April 15, 1996 were $29.09, $24.00 and 17.50%, respectively.
7
<PAGE>
<PAGE>
THE CORPORATION
The Corporation is a Maryland corporation formed on December 31, 1929, by
the consolidation of two predecessor corporations. Since the date of its
formation, it has been engaged in business as an investment company. It is
registered under the 1940 Act as a diversified, management investment company of
the closed-end type and is subject to applicable regulatory and other provisions
of that Act. Such registration, of course, does not involve government
supervision of management, investment policies or investment practices. As
indicated by its financial statements incorporated by reference herein, the
Corporation's principal assets, other than cash and receivables, are its
portfolio of investment securities.
INVESTMENT AND OTHER POLICIES
The Corporation invests primarily for the longer term and has no Charter
restrictions with respect to such investments. Over the years, the Corporation's
objective has been to produce future growth of both capital and income while
providing reasonable current income. There can be no assurance that this
objective will be attained in the future. While common stocks have made up the
bulk of investments, assets may be held in cash or invested in all types of
securities, that is, in bonds, debentures, notes, preferred and common stocks,
rights and warrants (subject to limitations as set forth in the SAI), and other
securities, in whatever amounts or proportions the Manager believes best suited
to current and anticipated economic and market conditions.
The management's present investment policies, in respect to which it has
freedom of action, are:
(1) it keeps investments in individual issuers within the limits
permitted diversified companies under the 1940 Act (i.e., 75% of its total
assets must be represented by cash items, government securities, securities
of other investment companies, and securities of other issuers which, at
the time of investment, do not exceed 5% of the Corporation's total assets
at market value in the securities of any issuer and do not exceed 10% of
the voting securities of any issuer);
(2) it does not make investments with a view to exercising control or
management except that it has an investment in Seligman Data Corp.;
(3) it ordinarily does not invest in other investment companies, but
it may purchase up to 3% of the voting securities of such investment
companies, provided purchases of securities of a single investment company
do not exceed in value 5% of the total assets of the Corporation and all
investments in investment company securities do not exceed 10% of total
assets; and
(4) it has no fixed policy with respect to portfolio turnover and
purchases and sales in the light of economic, market and investment
considerations. The portfolio turnover rates for the ten fiscal years ended
December 31, 1995 are shown under 'Financial Highlights.'
The foregoing objective and policies may be changed by management without
stockholder approval, unless such a change would change the Corporation's status
from a 'diversified' to a 'non-diversified' company under the 1940 Act.
The Corporation's stated fundamental policies relating to the issuance of
senior securities, the borrowing of money, the underwriting of securities of
other issuers, the concentration of investments in a particular industry or
groups of industries, the purchase or sale of real estate and real estate
mortgage loans, the purchase or sale of commodities or commodity contracts, and
the making of loans may not be
8
<PAGE>
<PAGE>
changed without a vote of stockholders. A more detailed description of the
Corporation's investment policies, including a list of those restrictions on the
Corporation's investment activities which cannot be changed without such a vote,
appears in the SAI. Within the limits of these fundamental policies, the
management has reserved freedom of action.
REPURCHASE AGREEMENTS: The Corporation may enter into repurchase agreements
with respect to debt obligations which could otherwise be purchased by the
Corporation. A repurchase agreement is an instrument under which the Corporation
may acquire an underlying debt instrument and simultaneously obtain the
commitment of the seller (a commercial bank or a broker or dealer) to repurchase
the security at an agreed upon price and date within a number of days (usually
not more than seven days from the date of purchase). The value of the underlying
securities will be at least equal at all times to the total amount of the
repurchase obligation, including the interest factor. The Corporation will make
payment for such securities only upon physical delivery or evidence of book
transfer to the account of the Corporation's custodian. Repurchase agreements
could involve certain risks in the event of default or insolvency of the other
party, including possible delays or restrictions upon the Corporation's ability
to dispose of the underlying securities. The Corporation did not enter into
repurchase agreements in 1995.
ILLIQUID SECURITIES: The Corporation may invest up to 15% of its net assets
in illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933, as
amended (the '1933 Act')) and other securities that are not readily marketable.
The Corporation may purchase restricted securities that can be offered and sold
to 'qualified institutional buyers' under the Rule 144A of the 1933 Act, and the
Manager, acting pursuant to procedures approved by the Corporation's Board of
Directors, may determine, when appropriate, that specific Rule 144A securities
are liquid and not subject to the 15% limitation on illiquid securities. Should
this determination be made, the Manager will carefully monitor the security
(focusing on such factors, among others, as trading activity and availability of
information) to determine that the Rule 144A security continues to be liquid. It
is not possible to predict with assurance exactly how the market for restricted
securities sold and offered under Rule 144A will develop. This investment
practice could have the effect of increasing the level of illiquidity in the
Corporation, if and to the extent that qualified institutional buyers become for
a time uninterested in purchasing Rule 144A securities.
FOREIGN SECURITIES: The Corporation may invest in commercial paper and
certificates of deposit issued by foreign banks and may invest in other
securities of foreign issuers directly or through American Depositary Receipts
('ADRs'), American Depositary Shares ('ADSs'), European Depositary Receipts
('EDRs') or Global Depositary Receipts ('GDRs') (collectively, 'Depositary
Receipts'). Foreign investments may be affected favorably or unfavorably by
changes in currency rates and exchange control regulations. There may be less
information available about a foreign company than about a U.S. company and
foreign companies may not be subject to reporting standards and requirements
comparable to those applicable to U.S. companies. Foreign securities may not be
as liquid as U.S. securities. Securities of foreign companies may involve
greater market risk than securities of U.S. companies, and foreign brokerage
commissions and custody fees are generally higher than those in the United
States. Investments in foreign securities may also be subject to local economic
or political risks, political instability and possible nationalization of
issuers. ADRs and ADSs are instruments generally issued by domestic banks or
trust companies that represent the deposits of a security of a foreign issuer.
ADRs and ADSs may be publicly traded on exchanges or over-the-counter in the
United States and are quoted and settled in dollars at a price that generally
reflects the dollar equivalent of the
9
<PAGE>
<PAGE>
home country share price. EDRs and GDRs are typically issued by foreign banks or
trust companies traded in Europe. Depositary Receipts may be issued under
sponsored or unsponsored programs. In sponsored programs, the issuer has made
arrangements to have its securities traded in the form of a Depositary Receipt.
In unsponsored programs, the issuers may not be directly involved in the
creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, the issuers of
securities represented by unsponsored Depositary Receipts are not obligated to
disclose material information in the United States, and therefore, the import of
such information may not be reflected in the market value of such receipts. The
Corporation may invest up to 10% of its total assets in foreign securities that
it holds directly, but this 10% limit does not apply to foreign securities held
through Depositary Receipts or to commercial paper and certificates of deposit
issued by foreign banks.
Stockholders of the Corporation approved a proposal to permit the Manager
to enter into a Subadvisory Agreement with Seligman Henderson Co. pursuant to
which Seligman Henderson Co. is responsible for investing all or a portion of
the Corporation's investments in foreign investments and ADRs, ADSs, EDRs and
GDRs, see 'Management of the Corporation.'
LEVERAGE: Senior securities issued or money borrowed to raise funds for
investment have a prior fixed dollar claim on the Corporation's assets and
income. Any gain in the value of securities purchased or in income received in
excess of the cost of the amount borrowed or interest or dividends payable
causes the net asset value of the Corporation's Common Stock or the income
available to it to increase more than otherwise would be the case. Conversely,
any decline in the value of securities purchased or income received on them to
below the asset or income claims of the senior securities or borrowed money
causes the net asset value of the Common Stock or income available to it to
decline more sharply than would be the case if there were no prior claim. Funds
obtained through senior securities or borrowings thus create investment
opportunity, but they also increase exposure to risk. This influence ordinarily
is called 'leverage.' As of March 31, 1996, the only senior securities of the
Corporation outstanding were 752,740 shares of its $2.50 Cumulative Preferred
Stock, $50 par value. The Corporation's portfolio requires an annual return of
0.07% in order to cover dividend payments on the Preferred Stock. The following
table illustrates the effect of leverage relating to presently outstanding
Preferred Stock on the return available to a holder of the Corporation's Common
Stock.
<TABLE>
<CAPTION>
Assumed return on portfolio (net of
expenses).................................. - 10% - 5% 0% 5% 10%
<S> <C> <C> <C> <C> <C>
Corresponding return to common stockholder... - 10.22% 5.14% - 0.07% 5.00% 10.07%
</TABLE>
The purpose of the table above is to assist an investor in understanding
the effects of leverage. The percentages appearing in the table do not represent
actual or anticipated returns, which may be greater or less than those shown.
MANAGEMENT OF THE CORPORATION
THE MANAGER: In accordance with the applicable laws of the State of
Maryland, the Board of Directors provides broad supervision over the affairs of
the Corporation. Pursuant to a Management Agreement approved by the Board and
the stockholders, the Manager manages the investment of the assets of the
Corporation and administers its business and other affairs. In that connection,
the Manager
10
<PAGE>
<PAGE>
makes purchases and sales of portfolio securities consistent with the
Corporation's investment objectives and policies.
The Manager also serves as manager of sixteen other investment companies
which, together with the Corporation, make up the 'Seligman Group.' These other
companies are: Seligman Capital Fund, Inc., Seligman Cash Management Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman High Income Fund Series, Seligman
Income Fund, Inc., Seligman New Jersey Tax-Exempt Fund, Inc., Seligman
Pennsylvania Tax-Exempt Fund Series, Seligman Portfolios, Inc., Seligman Quality
Municipal Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman Tax-Exempt
Fund Series, Inc. and Seligman Tax-Exempt Series Trust. The aggregate assets of
the Seligman Group were approximately $11.9 billion at March 31, 1996. The
Manager also provides investment management or advice to institutional accounts
having a value at March 31, 1996 of approximately $3.9 billion. The address of
the Manager is 100 Park Avenue, New York, NY 10017.
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Corporation pays to the Manager promptly after the
end of each month a fee, calculated on each day during such month, equal to the
Applicable Percentage of the daily net assets of the Corporation at the close of
business on the previous business day. The term 'Applicable Percentage' means
the amount (expressed as a percentage and rounded to the nearest one millionth
of one percent) obtained by dividing (i) the Fee Amount by (ii) the Fee Base.
The term 'Fee Amount' means the sum on an annual basis of:
.45 of 1% of the first $4 billion of Fee Base
.425 of 1% of the next $2 billion of Fee Base
.40 of 1% of the next $2 billion of Fee Base, and
.375 of 1% of the Fee Base in excess of $8 billion.
The term 'Fee Base' as of any day means the sum of the net assets at the close
of business on the previous day of each of the investment companies registered
under the 1940 Act for which the Manager or any affiliated company acts as
investment adviser or manager (including the Corporation).
Charles C. Smith, Jr., a Managing Director of the Manager since January 1,
1994, has been Portfolio Manager for the Corporation since January 1, 1995. Mr.
Smith is also Vice President and Portfolio Manager of Seligman Common Stock
Fund, Inc., Seligman Income Fund, Inc., and Vice President of Seligman
Portfolios, Inc. ('SPI') and Portfolio Manager of SPI's Seligman Common Stock
Portfolio and Seligman Income Portfolio. Mr. Smith joined Seligman in 1985 as
Vice President, Investment Officer and was promoted to Senior Vice President,
Senior Investment Officer in August 1992, and to Managing Director in January
1994.
The Corporation pays all its expenses other than those assumed by the
Manager, including brokerage commissions, fees and expenses of independent
attorneys and auditors, taxes and governmental fees, cost of stock certificates,
expenses of printing and distributing prospectuses, expenses of printing and
distributing reports, notices and proxy materials to stockholders, expenses of
printing and filing reports and other documents with governmental agencies,
expenses of stockholders' meetings, expenses of corporate data processing and
related services, stockholder record keeping and stockholder account services,
fees and disbursements of transfer agents and custodians, expenses of disbursing
dividends and distributions, fees and expenses of directors of the Corporation
not employed
11
<PAGE>
<PAGE>
by the Manager or its affiliates, insurance premiums and extraordinary expenses
such as litigation expenses.
The Management Agreement provides that it will continue in effect until
December 29 of each year if such continuance is approved in the manner required
by the 1940 Act (i.e., by a vote of a majority of the Board of Directors or of
the outstanding voting securities of the Corporation and by a vote of a majority
of Directors who are not parties to the Management Agreement or interested
persons of any such party) and if the Manager shall not have notified the
Corporation at least 60 days prior to December 29 of any year that it does not
desire such continuance. The Management Agreement may be terminated by the
Corporation, without penalty, on 60 days' written notice to the Manager and will
terminate automatically in the event of its assignment.
THE SUBADVISER: Seligman Henderson Co. (the 'Subadviser') acts as
Subadviser to the Corporation with respect to all or a portion of the
Corporation's investments in foreign securities and Depositary Receipts
('Qualifying Assets'). The Corporation has a non-fundamental policy in which it
may invest up to 10% of its total assets in foreign securities, in addition to
Depositary Receipts. The Subadviser serves the Corporation pursuant to a
Subadvisory Agreement between the Manager and the Subadviser (the 'Subadvisory
Agreement'), dated June 1, 1994. The Subadvisory Agreement provides that the
Subadviser provides investment management services with respect to the
Qualifying Assets, including investment research, advice and supervision,
determines which securities will be purchased or sold, makes purchases and sales
on behalf of the Corporation and determines how voting and other rights with
respect to securities shall be exercised, subject in each case to the control of
the Board of Directors and in accordance with the Corporation's investment
objectives, policies and principles.
As compensation for the services performed and the facilities and personnel
provided by the Subadviser, the Manager pays to the Subadviser a fee, equal to
the Applicable Percentage (as defined above) of the average monthly Net
Qualifying Assets of the Corporation. For this purpose, the term 'Net Qualifying
Assets' means the assets designated by the Manager for which the Subadviser
provides investment management services less any related liabilities as
designated by the Manager.
Average monthly Net Qualifying Assets are determined, for any month, by
taking the average of the value of the Net Qualifying Assets as of the (i)
opening of business on the first day of such month and (ii) close of business on
the last day of such month.
The Subadviser was founded in 1991 as a joint venture between the Manager
and Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. The Subadviser, headquartered in New York, was created
to provide international and global investment advice to institutional and
individual investors and investment companies in the United States. The
Subadviser currently serves as subadviser to Seligman Capital Fund, Inc.,
Seligman Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc., Seligman
Henderson Global Fund Series, Inc., Seligman Income Fund, Inc., and the Global
Portfolio and Global Smaller Companies Portfolio of Seligman Portfolios, Inc.
The address of Seligman Henderson Co. is 100 Park Avenue, New York, NY 10017.
The Subadviser's Global Policy Group has overall responsibility for
directing and overseeing all aspects of foreign investment activity for the
Corporation and provides global investment policy, including country weightings,
asset allocations and industry sector guidelines, as appropriate. Mr. Iain C.
Clark, a Managing Director and Chief Investment Officer of the Subadviser, is
responsible for the day-
12
<PAGE>
<PAGE>
to-day foreign investment activity of the Corporation. Mr. Clark, who joined the
Subadviser in 1992, has been a Director of Henderson Administration Group plc
since 1985.
DESCRIPTION OF CAPITAL STOCK
(a) DIVIDEND RIGHTS: Common Stockholders are entitled to receive dividends
only if and to the extent declared by the Board of Directors and only after (i)
such provisions have been made for working capital and for reserves as the Board
may deem advisable, (ii) full cumulative dividends at the rate of $.625 per
share per quarterly dividend period have been paid on the Preferred Stock for
all past quarterly periods and have been provided for the current quarterly
period, and (iii) such provisions have been made for the purchase or for the
redemption (at a price of $55 per share) of the Preferred Stock as the Board may
deem advisable. In any event, no dividend may be declared upon the Common Stock
unless, at the time of such declaration, the net assets of the Corporation,
after deducting the amount of such dividend and the amount of all unpaid
dividends declared on the Preferred Stock, shall be at least equal to $100 per
outstanding share of Preferred Stock. The equivalent figure was $3,518.74 at
March 31, 1996.
(b) VOTING RIGHTS: The Preferred Stock is entitled to two votes and the
Common Stock is entitled to one vote per share at all meetings of stockholders.
In the event of a default in payments of dividends on the Preferred Stock
equivalent to six quarterly dividends, the Preferred Stockholders are entitled,
voting separately as a class to the exclusion of Common Stockholders, to elect
two additional directors, such right to continue until all arrearages have been
paid and current Preferred Stock dividends are provided for. Notwithstanding any
provision of law requiring any action to be taken or authorized by the
affirmative vote of the holders of a designated portion of all the shares or of
the shares of each class, such action shall be effective if taken or authorized
by the affirmative vote of a majority of the aggregate number of the votes
entitled to vote thereon, except that a class vote of Preferred Stockholders is
also required to approve certain actions adversely affecting their rights. Any
change in the Corporation's fundamental policies may also be authorized by the
vote of 67% of the votes present at a meeting if the holders of a majority of
the aggregate number of votes entitled to vote are present or represented by
proxy.
Consistent with the requirements of Maryland law, the Corporation's Charter
provides that the affirmative vote of two-thirds of the aggregate number of
votes entitled to be cast thereon shall be necessary to authorize any of the
following actions: (i) the dissolution of the Corporation; (ii) a merger or
consolidation of the Corporation (in which the Corporation is not the surviving
corporation) with (a) an open-end investment company or (b) a closed-end
investment company, unless such closed-end investment company's Articles of
Incorporation require a two-thirds or greater proportion of the votes entitled
to be cast by such company's stock to approve the types of transactions covered
by clauses (i) through (iv) of this paragraph; (iii) the sale of all or
substantially all of the assets of the Corporation to any person (as such term
is defined in the 1940 Act); or (iv) any amendment of the Charter of this
Corporation which makes any class of the Corporation's stock a redeemable
security (as such term is defined in the 1940 Act) or reduces the two-thirds
vote required to authorize the actions listed in this paragraph. This could have
the effect of delaying, deferring or preventing changes in control of the
Corporation.
(c) LIQUIDATION RIGHTS: In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after payment to the
Preferred Stockholders of an amount equal to $50
13
<PAGE>
<PAGE>
per share plus dividends accrued or in arrears, the Common Stockholders are
entitled, to the exclusion of the Preferred Stockholders, to share ratably in
all the remaining assets of the Corporation available for distribution to
stockholders.
(d) OTHER PROVISIONS: Common Stockholders do not have preemptive,
subscription or conversion rights, and are not liable for further calls or
assessments. Upon consideration and determination made by the Board of Directors
of the Corporation that such amendment is in the best interests of the
Corporation and its Stockholders, the Corporation's By-Laws have been amended to
provide that, beginning in 1994, as Directors' terms expire, the Corporation's
Board of Directors (other than any directors who may be elected to represent
Preferred Stockholders as described above) will be classified as nearly as
possible into three equal classes with a maximum three year term so that the
term of one class of directors expires annually. Such classification provides
continuity of experience and stability of management while providing for the
election of a portion of the Board of Directors each year. Such classification
could have the effect of delaying, deferring or preventing changes in control of
the Corporation.
The Board of Directors may classify or reclassify any unissued stock of any
class with or without par value (including Preferred Stock and Common Stock)
into one or more classes of preference stock on a parity with, but not having
preference or priority over, the Preferred Stock by fixing or altering before
the issuance thereof the designations, preferences, voting powers, restrictions
and qualifications of, the fixed annual dividends on, the times and prices of
redemption, the terms of conversion, the number and/or par value of the shares
and other provisions of such stock to the full extent permitted by the laws of
Maryland and the Corporation's Charter. Stockholder approval of such action is
not required.
DESCRIPTION OF WARRANTS
The Corporation's Charter and Warrant certificates provide that each
Warrant represents the right during an unlimited time to purchase one share of
Common Stock at a price of $22.48 per share, subject to increase in the number
of shares purchasable and adjustment of the price payable pursuant to provisions
of the Charter requiring such adjustments whenever the Corporation issues any
shares of Common Stock at a price less than the Warrant purchase price in effect
immediately prior to issue. Each Warrant presently entitles the holder to
purchase 13.54 shares of Common Stock at $1.66 per share. There were 14,651
Warrants outstanding at March 31, 1996. Fractional shares of Common Stock are
not issued upon the exercise of Warrants. In lieu thereof, the Corporation
issues scrip certificates representing corresponding fractions of the right to
receive a full share of Common Stock if exchanged by the end of the second
calendar year following issuance or of the proceeds of the sale of a full share
if surrendered during the next four years thereafter.
COMPUTATION OF NET ASSET VALUE
Net asset value per share of Common Stock is determined by dividing the
current value of the assets of the Corporation less its liabilities and the
prior claim of the Preferred Stock by the total number of shares of Common Stock
outstanding. Securities owned by the Corporation for which market quotations are
readily available are valued at current market value or, in their absence, fair
value determined in accordance with procedures approved by the Board of
Directors at current market value. Securities traded on national exchanges are
valued at the last sales prices, or in their absence and in the
14
<PAGE>
<PAGE>
case of over-the-counter securities, a mean of bid and asked prices. United
Kingdom securities and securities for which there are no recent sales
transactions are valued based on quotations provided by primary market makers in
such securities. Any securities for which recent market quotations are not
readily available are valued at fair value determined in accordance with
procedures approved by the Board of Directors. Short-term holdings maturing in
60 days or less are generally valued at amortized cost if their original
maturity was 60 days or less. Short-term holdings with more than 60 days
remaining to maturity will be valued at current market value until the 61st day
prior to maturity, and will then be valued on an amortized cost basis based on
the value of such date unless the Board determines that this amortized cost
value does not represent fair market value.
All assets and liabilities initially expressed in foreign currencies will
be converted into U.S. dollars by a pricing service based upon the mean of the
bid and asked prices of such currencies against the U.S. dollar quoted by a
major bank which is a regular participant in the institutional foreign exchange
markets.
Net asset value of the Common Stock is determined daily as of the close of
the New York Stock Exchange (normally, 4:00 p.m. Eastern time) each day the New
York Stock Exchange is open for trading.
DIVIDEND POLICY AND TAXES
DIVIDENDS: Dividends are paid quarterly on the Preferred Stock and on the
Common Stock in amounts representing substantially all of the net investment
income earned each year. Payments on the Preferred Stock are in a fixed amount,
but payments on the Common Stock vary in amount, depending on investment income
received and expenses of operation. Substantially all of any taxable net gain
realized on investments is paid to Common Stockholders at least annually in
accordance with requirements under the Internal Revenue Code of 1986, as amended
('the Code'), and other applicable statutory and regulatory requirements. Unless
Seligman Data Corp. is otherwise instructed by a Common Stockholder, dividends
on the Common Stock are paid in cash and capital gain distributions are paid in
book shares of Common Stock which are entered in a stockholder's Tri-Continental
account as 'book credits.' Long-term gain distributions ordinarily are paid in
shares of Common Stock, or, at the stockholder's option, 75% in book shares and
25% in cash, or, in the alternative, 100% in cash. Shares distributed in payment
of gain distributions are valued at market price or at net asset value,
whichever is lower, on the valuation date. Dividends and capital gain
distributions will generally be taxable to stockholders in the year in which
they are declared by the Corporation if paid before February 1 of the following
year. Distributions or dividends received by a stockholder will have the effect
of reducing the net asset value of the shares of the Corporation by the amount
of such distributions. If the net asset value of shares is reduced below a
stockholder's cost by a distribution, the distribution will be taxable as
described below even though it is in effect a return of capital.
TAXES: The Corporation intends to continue to qualify and elect to be
treated as a regulated investment company under Subchapter M of the Code. As a
regulated investment company, the Corporation will generally be exempt from
Federal income taxes on net investment income and capital gains that it
distributes to stockholders provided that at least 90% of its investment income
and net short-term capital gains are distributed to stockholders each year.
Dividends on Common or Preferred Stock representing net investment income
and distributions of net short-term capital gains are taxable to stockholders as
ordinary income, whether received in cash or
15
<PAGE>
<PAGE>
invested in additional shares and, to the extent designated as derived from the
Corporation's dividend income that would be eligible for the dividends received
deduction if the Corporation were not a regulated investment company, they are
eligible, subject to certain restrictions, for the 70% dividends received
deduction for corporations. Distributions of net capital gain (i.e., the excess
of net long-term capital gains over any net short-term capital losses) are
taxable as long-term capital gain, whether received in cash or invested in
additional shares, regardless of how long shares have been held by the
stockholders, but such distributions are not eligible for the dividends received
deduction allowed to corporate stockholders. Individual stockholders will be
subject to Federal income tax on net capital gains at a maximum rate of 28%. Net
capital gain of a corporate stockholder is taxed at the same rate as ordinary
income. Assuming current investment policies remain in effect, taxable income
derived from the holding, sale or exchange of Common or Preferred Stock of the
Corporation will not be adjusted or increased in calculating the alternative
minimum taxable income derived from such holding, sale or exchange.
Any gain or loss realized upon a sale or redemption of Common or Preferred
Stock by a stockholder who is not a dealer in securities will generally be
treated as a long-term capital gain or loss if the shares have been held for
more than one year and otherwise as a short-term capital gain or loss. However,
if shares on which a long-term capital gain distribution has been received are
subsequently sold or redeemed and such shares have been held for six months or
less, any loss realized will be treated as long-term capital loss to the extent
that it offsets the long-term capital gain distribution. No loss will be allowed
on the sale or other disposition of shares of the Fund if, within a period
beginning 30 days before the date of such sale or disposition and ending 30 days
after such date, the holder acquires (such as through the Automatic Dividend
Investment and Cash Purchase Plan), or enters into a contract or option to
acquire, securities that are substantially identical to the shares of the Fund.
The Corporation will generally be subject to an excise tax of 4% on the
amount by which distributions to stockholders fall short of certain required
levels, such that income or gain is not taxable to stockholders in the calendar
year in which it was earned by the Corporation. Furthermore, dividends declared
in October, November or December payable to stockholders of record on a
specified date in such a month and paid in the following January will be treated
as having been paid by the Corporation and received by each stockholder in
December. Under this rule, therefore, stockholders may be taxed in one year on
dividends or distributions actually received in January of the following year.
The tax treatment of the Corporation and of stockholders under the tax laws
of the various states may differ from the Federal tax treatment. Stockholders
are urged to consult their own tax advisers regarding specific questions as to
Federal, state or local taxes.
THE CORPORATION IS REQUIRED TO WITHHOLD AND REMIT TO THE U.S. TREASURY 31%
OF TAXABLE DIVIDENDS AND OTHER REPORTABLE PAYMENTS PAID ON AN ACCOUNT IF THE
HOLDER OF THE ACCOUNT PROVIDES THE CORPORATION WITH EITHER AN INCORRECT TAXPAYER
IDENTIFICATION NUMBER OR NO NUMBER AT ALL OR FAILS TO CERTIFY THAT THE
STOCKHOLDER IS NOT SUBJECT TO SUCH WITHHOLDING. STOCKHOLDERS SHOULD BE AWARE
THAT, UNDER REGULATIONS PROMULGATED BY THE INTERNAL REVENUE SERVICE, THE
CORPORATION MAY BE FINED $50 ANNUALLY FOR EACH ACCOUNT FOR WHICH A CERTIFIED
TAXPAYER IDENTIFICATION NUMBER IS NOT PROVIDED. THE CORPORATION MAY CHARGE A
SERVICE FEE OF UP TO $50 FOR ACCOUNTS NOT HAVING A CERTIFIED TAXPAYER
IDENTIFICATION NUMBER. CERTIFICATES WILL NOT BE ISSUED UNLESS AN ACCOUNT IS
CERTIFIED.
16
<PAGE>
<PAGE>
DESCRIPTION OF INVESTMENT PLANS AND OTHER SERVICES
AUTOMATIC DIVIDEND INVESTMENT AND CASH PURCHASE PLAN
The Automatic Dividend Investment and Cash Purchase Plan is available for
any Common stockholder who wishes to purchase additional shares of the
Corporation's Common Stock with dividends or other cash payments on shares
owned, with cash dividends paid by other corporations in which he owns stock or
with cash funds. Details of the services offered under the Plan are given in the
Authorization Form appearing in this Prospectus. Under the Plan, stockholders
appoint the Corporation as their purchase agent to receive or invest such
dividends and cash funds forwarded by stockholders for their accounts in
additional shares of the Corporation's Common Stock (after deducting a service
charge), as described under 'Method of Purchase.' Funds forwarded by
stockholders under the Plan should be made payable to Tri-Continental
Corporation and mailed to Tri-Continental Corporation, P.O. Box 3936, New York,
NY 10008-3936. Checks for investment must be in U.S. dollars drawn on a domestic
bank. Stockholders should direct all correspondence concerning the Plan to
Seligman Data Corp., 100 Park Avenue, New York, NY 10017. At present, a service
fee of up to a maximum of $2.00 will be charged for each cash purchase
transaction. There is no charge for Automatic Dividend Investment. As of March
31, 1996, 25,311 stockholders, owning 28,137,158 shares of Common Stock, were
using the Plan. A stockholder may choose one or more of the services under the
Plan and is free to change his choices (or terminate his participation) at any
time by notifying Seligman Data Corp. in writing. The Plan may be amended or
terminated by written notice to Planholders.
AUTOMATIC CHECK SERVICE
The Automatic Check Service enables an Automatic Dividend Investment and
Cash Purchase Planholder to authorize checks to be drawn on the stockholder's
regular checking account at regular intervals for fixed amounts to be invested
in additional shares of Common Stock for his account. An Authorization Form to
be used to start the Automatic Check Service is included in this Prospectus.
SHARE KEEPING SERVICE
Any stockholder may send certificates for shares of the Corporation's
Common Stock to Seligman Data Corp. to be placed in the stockholder's account.
Certificates should be sent to Seligman Data Corp., 100 Park Avenue, New York,
NY 10017, with a letter requesting that they be placed in the account. The
stockholder should not sign the certificates and they should be sent by
registered mail. When a stockholder's certificates are received, the shares will
be entered in the stockholder's Tri-Continental account as 'book credits' and
shown on the Statement of Account the stockholder receives from Seligman Data
Corp. Stockholders using the Share Keeping Service should keep in mind that they
must have a stock certificate for delivery to a broker if they wish to sell
shares. A certificate will be issued on the stockholder's written request to
Seligman Data Corp., usually within two business days of the receipt of the
request, and sent to the stockholder. The time it takes for a letter of request
to arrive and for a certificate to be delivered by mail should be taken into
consideration by stockholders who may choose to use this service.
17
<PAGE>
<PAGE>
TAX-DEFERRED RETIREMENT PLANS
Shares of the Corporation may be purchased for all types of tax-deferred
retirement plans. The Corporation makes available plans, plan forms and custody
agreements for:
-- Individual Retirement Accounts (IRAs);
-- Simplified Employee Pension Plans (SEPs);
-- Section 401(k) Plans for corporations and their employees; and
-- Pension and Profit Sharing Plans for sole proprietorships,
partnerships and corporations.
These types of plans may be established only upon receipt of a written
application form. For more information, write Pension Plan Services, Seligman
Data Corp., 100 Park Avenue, New York, NY 10017. You may telephone toll-free by
dialing (800) 445-1777 from all continental United States.
Investors Fiduciary Trust Company ('IFTC') acts as trustee and custodian
and performs other related services with respect to the Plans.
J. & W. SELIGMAN & CO. INCORPORATED 401(K) SALARY REDUCTION MATCHED ACCUMULATION
PLAN
The Manager has a 401(k) Salary Reduction Matched Accumulation Plan
('401(k) Plan') which provides that, through payroll deductions which may be
combined with matching contributions and through any profit sharing distribution
made by the Manager to the 401(k) Plan, eligible employees of the Manager,
Seligman Financial Services, Inc. and Seligman Services, Inc. may designate that
the payroll deductions and contributions made by the Manager and invested by the
Plan trustee, be invested in certain investment companies for which the Manager
serves as investment adviser. One such fund consists of Common Stock of the
Corporation purchased by the trustee as described under 'Method of Purchase.'
SELIGMAN DATA CORP. EMPLOYEES' THRIFT PLAN
Seligman Data Corp. has an Employees' Thrift Plan ('Thrift Plan') which
provides a systematic means by which savings, through payroll deductions, of
eligible employees of Seligman Data Corp. may be combined with matching
contributions made by the company and invested by the Plan trustee, in certain
investment companies for which the Manager serves as investment adviser, as
designated by the employee. One such fund consists of Common Stock of the
Corporation purchased by the trustee as described under 'Method of Purchase.'
METHOD OF PURCHASE
Purchases will be made by the Corporation from time to time on the New York
Stock Exchange or elsewhere to satisfy dividend and cash purchase investments
under the Automatic Dividend Investment and Cash Purchase Plan, tax-deferred
retirement plans, and the investment plans noted above. Purchases will be
suspended on any day when the closing price (or closing bid price if there were
no sales) of the Common Stock on the New York Stock Exchange on the preceding
trading day was higher than the net asset value per share (without adjustment
for the exercise of Warrants remaining outstanding). If on the dividend payable
date or the date shares are issuable to stockholders making Cash Purchase
investments under the Plan (the 'Issuance Date'), shares previously purchased by
the
18
<PAGE>
<PAGE>
Corporation are insufficient to satisfy dividend or Cash Purchase investments
and on the last trading day immediately preceding the dividend payable date or
the Issuance Date the closing sale or bid price of the Common Stock is lower
than or the same as the net asset value per share, the Corporation will continue
to purchase shares until a number of shares sufficient to cover all investments
by stockholders has been purchased or the closing sale or bid price of the
Common Stock becomes higher than the net asset value, in which case the
Corporation will issue the necessary additional shares. If on the last trading
date immediately preceding the dividend payable date or Issuance Date, the
closing sale or bid price of the Common Stock was higher than the net asset
value per share, and if shares of the Common Stock previously purchased on the
New York Stock Exchange or elsewhere are insufficient to satisfy dividend or
Cash Purchase investments, the Corporation will issue the necessary additional
shares from authorized but unissued shares of the Common Stock.
Shares will be issued at a price equal to the lower of (i) the closing sale
or bid price, plus commission, of the Common Stock on the New York Stock
Exchange on the last trading day preceding the dividend payable date or Issuance
Date or (ii) the greater of the net asset value per share of the Common Stock on
such trading day (without adjustment for the exercise of Warrants remaining
outstanding) and 95% of the closing sale or bid price of the Common Stock on the
New York Stock Exchange on such trading day. In the past, the Common Stock
ordinarily has been priced in the market at less than net asset value per share.
The Corporation may change the price at which shares of its Common Stock may be
purchased from it for the Plans, if the Board of Directors determines it to be
desirable, but the Board may not authorize the issuance of shares of Common
Stock at a price less than net asset value without prior specific approval of
stockholders or of the Securities and Exchange Commission.
The net proceeds to the Corporation from the sale of any shares of Common
Stock to the Plan will be added to its general funds and will be available for
additional investments and general corporate purposes. The Manager anticipates
that investment of any proceeds, in accordance with the Corporation's investment
objective and policies, will take up to thirty days from their receipt by the
Corporation, depending on market conditions and the availability of appropriate
securities, but in no event will such investment take longer than six months.
Pending such investment in accordance with the Corporation's objectives and
policies, the proceeds will be held in U.S. Government Securities (which term
includes obligations of the United States Government, its agencies or
instrumentalities) and other short-term money market instruments.
Stockholders participating in the Automatic Dividend Investment and Cash
Purchase Plan who wish to terminate their participation in the Plan and whose
shares are held under the Plan in book credit form may choose to receive a
certificate for all or a part of their shares or to have all or a part of their
shares sold for them by the Corporation and to retain unsold shares in book
credit form or receive a certificate for any shares not sold. Instructions must
be signed by all registered stockholders and should be sent to Seligman Data
Corp., 100 Park Avenue, New York, NY 10017. Stockholders who elect to have
shares sold will receive the proceeds from the sale, less any brokerage
commissions. Only participants whose shares are held in book credit form may
elect upon termination of their participation in the Plan to have shares sold in
the above manner. Whenever the value of the shares being sold is $50,000 or
more, or the proceeds are to be paid or mailed to an address or payee different
from that on our records, the signature of all stockholders must be guaranteed
by an eligible financial institution including, but not limited to, the
following: banks, trust companies, credit unions, securities brokers and
dealers, savings and loan associations and participants in the Securities
Transfer Association Medallion
19
<PAGE>
<PAGE>
Program (STAMP), the Stock Exchanges Medallion Program ('SEMP') and the New York
Stock Exchange Medallion Signature Program ('MSP'). Notarization by a notary
public is not an acceptable signature guarantee. The Corporation reserves the
right to reject a signature guarantee where it is believed that the Corporation
will be placed at risk by accepting such guarantee.
AUTOMATIC CASH WITHDRAWAL PLAN
This Plan is available for stockholders who wish to receive fixed payments
from their investment in the Common Stock in any amount at specified regular
intervals. A Plan may be started with shares of the Corporation's Common Stock
with a market value of $5,000 or more. Shares must be held in the stockholder's
account as book credits. Seligman Data Corp. acts for stockholders, makes
payments to them in specified amounts on the 15th day of each month designated,
and maintains their accounts. There is a charge by the agent of $1.00 per
withdrawal payment for this service, which charge may be changed from time to
time.
Payments under the Withdrawal Plan will be made by selling exactly enough
full and fractional shares of Common Stock to cover the amount of the designated
withdrawal. Sales may be made on the New York Stock Exchange, to the agent or a
trustee for one of the other Plans, or elsewhere. Payments from sales of shares
will reduce the amount of capital at work and dividend earning ability, and
ultimately may liquidate the investment. Sales of shares may result in gain or
loss for income tax purposes. Withdrawals under this Plan or any similar Plan of
any other investment company, concurrent with purchases of shares of the Common
Stock or of shares of any other investment company, will ordinarily be
disadvantageous to the Planholder because of the payment of duplicative
commission or sales loads.
STOCKHOLDER INFORMATION
Seligman Data Corp. maintains books and records for all of the Plans, and
confirms transactions to Stockholders. To insure prompt delivery of checks,
account statements and other information, Stockholders should notify Seligman
Data Corp. immediately, in writing, of any address changes. Stockholders will be
sent reports quarterly regarding the Corporation. General information about the
Corporation, may be requested by writing the Corporate Communications/Investor
Relations Department, J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New
York, NY 10017 or by telephoning the Corporate Communications/Investor Relations
Department toll-free at (800) 221-7844 from all continental United States,
except New York or (212) 850-1864 in New York State and in the greater New York
City area. Information about a stockholder account (other than a retirement plan
account), may be requested by writing Stockholder Services, Seligman Data Corp.,
at the same address or by toll-free telephone by dialing (800) 874-1092 from all
continental United States. For information about a retirement account, call
Pension Plan Services toll-free at (800) 445-1777 or write Pension Plan
Services, Seligman Data Corp. at the above address. Seligman Data Corp. may be
telephoned Monday through Friday (except holidays) between the hours of 8:30
a.m. and 6:00 p.m. Eastern time, and calls will be answered by a service
representative.
24 HOUR TELEPHONE ACCESS IS AVAILABLE BY DIALING (800) 622-4597 ON A
TOUCHTONE PHONE, WHICH PROVIDES INSTANT ACCESS TO PRICE, ACCOUNT BALANCE, MOST
RECENT TRANSACTION AND OTHER INFORMATION. IN ADDITION, ACCOUNT STATEMENTS AND
FORM 1099-DIVS MAY BE ORDERED.
20
<PAGE>
<PAGE>
ISSUANCE OF SHARES IN CONNECTION WITH ACQUISITIONS
The Corporation may issue shares of its Common Stock in exchange for the
assets of another investing company in transactions in which the number of
shares of Common Stock of the Corporation to be delivered will be generally
determined by dividing the current value of the seller's assets by the current
per share net asset value or market price on the New York Stock Exchange of the
Common Stock of the Corporation, or by an intermediate amount. In such
acquisitions, the number of shares of the Corporation's Common Stock to be
issued will not be determined on the basis of the market price of such Common
Stock if such price is lower than its net asset value per share, except pursuant
to an appropriate order of the Securities and Exchange Commission or approval by
stockholders of the Corporation, as required by law. The Corporation is not
presently seeking to acquire the assets of any investing company, but it may
acquire the assets of companies from time to time in the future.
Some or all of the stock so issued may be sold from time to time by the
recipients or their stockholders through brokers in ordinary transactions on
stock exchanges at current market prices. The Corporation has been advised that
such sellers may be deemed to be underwriters as that term is defined in the
1933 Act.
ADDITIONAL INFORMATION
During 1995, the Corporation had transactions in the ordinary course of
business with firms and companies of which one or more directors and officers
was a director and/or officer of the Corporation, and it is expected that the
Corporation will continue to have transactions of such nature during the current
year.
21
<PAGE>
<PAGE>
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
The table of contents of the SAI is as follows:
TABLE OF CONTENTS
<TABLE>
<S> <C>
Certain Transactions of the Corporation...................................................................... 2
Additional Investment Objectives and Policies................................................................ 2
Directors and Officers....................................................................................... 4
Management................................................................................................... 9
Experts...................................................................................................... 10
Custodian, Stockholder Service and Dividend Paying Agent..................................................... 10
Brokerage Commissions........................................................................................ 10
Incorporation of Financial Statements by Reference........................................................... 11
Independent Auditors' Report on Financial Highlights --
Senior Securities -- $2.50 Cumulative Preferred Stock...................................................... 12
Appendix..................................................................................................... 13
</TABLE>
22
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<S> <C>
AUTHORIZATION FORM
an investment you can live with FOR
To: Seligman Data Corp. AUTOMATIC DIVIDEND INVESTMENT
P.O. Box 3936 AND CASH PURCHASE PLAN
New York, New York 10008-3936 AUTOMATIC DIVIDEND INVESTMENT
AUTOMATIC INVESTMENT OF OTHER
CORPORATIONS' DIVIDENDS
CASH PURCHASE PLAN
AUTOMATIC CHECK SERVICE
Date ....................................
</TABLE>
Gentlemen:
I own shares of Tri-Continental Corporation Common Stock registered as
shown below:
ACCOUNT REGISTRATION
<TABLE>
<S> <C>
__________________________________________________ _____________________________________
Stockholder's Name (print or type) Stockholder's Signature*
__________________________________________________ _____________________________________
Co-Holder's Name Co-Holder's Signature*
__________________________________________________ _____________________________________
Address (street and number) Taxpayer Identification Number
__________________________________________________ _____________________________________
City State Zip Code Stockholder Account Number, if known
</TABLE>
* If shares are held or to be held in more than one name, all must sign, and
plural pronouns will be implied in the text. In the case of co-holders, a
joint tenancy with right of survivorship will be presumed unless otherwise
specified.
Under penalties of perjury I certify that the number shown on this form is my
correct Taxpayer Identification Number (Social Security Number) and that I am
not subject to backup withholding either because I have not been notified that I
am subject to backup withholding as a result of failure to report all interest
or dividends, or the Internal Revenue Service has notified me that I am no
longer subject to backup withholding. I certify that to my legal capacity to
purchase or sell shares of the Corporation for my own Account, or for the
Account of the organization named above. I have received a current Prospectus of
the Corporation and appoint Seligman Data Corp. as my agent to act in accordance
with my instructions herein.
<TABLE>
<S> <C>
- ------------------ ------------------------------------------------------------------------------------------
Date Stockholder's Signature
</TABLE>
I have read the Terms and Conditions of the Automatic Dividend Investment
and Cash Purchase Plan and the current Prospectus, a copy of which I have
received, and I wish to establish a Plan to use the Services checked below:
SERVICE(S) DESIRED
[ ] AUTOMATIC INVESTMENT OF TRI-CONTINENTAL DIVIDENDS
I wish to have my quarterly dividends invested in additional shares,
and distributions from gains paid as follows:
[ ] Credited to my account in additional full and fractional shares.
[ ] Credited 75% to my account in shares and 25% paid to me in cash.
[ ] AUTOMATIC INVESTMENT OF OTHER CORPORATION'S DIVIDENDS
I intend to give orders for the payment of cash dividends from other
corporations to be invested in shares of Tri-Continental Common Stock
for my account.
Note: Checks in payment of dividends from other corporations should
indicate your name and Tri-Continental account number. The checks
should be made payable to the order of Tri-Continental Corporation and
be mailed to Seligman Data Corp., P.O. Box 3936, New York, NY
10008-3936.
[ ] CASH PURCHASES
I intend to send funds from time to time to be invested in shares of
Tri-Continental Common Stock for my account.
Note: Your checks should indicate your name and Tri-Continental account
number. Make all checks payable to Tri-Continental Corporation and mail
to Seligman Data Corp., P.O. Box 3936, New York, NY 10008-3936.
[ ] AUTOMATIC CHECK SERVICE
I have completed the Authorization Form to have pre-authorized checks
drawn on my regular checking account at regular intervals for
investment in shares of Tri-Continental Common Stock.
5/96
23
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<S> <C>
AUTHORIZATION FORM
an investment you can live with FOR
AUTOMATIC CHECK SERVICE
</TABLE>
To start your Automatic Check Service, fill out this form and forward it with an
unsigned bank check from your regular checking account (marked 'void') to:
Seligman Data Corp.
P.O. Box 3936
New York, New York 10008-3936
Date ......................
Gentlemen:
I own shares of Tri-Continental Corporation Common Stock, registered as
shown below, which are entered in the Automatic Dividend Investment and Cash
Purchase Plan.
1. Stockholder Account Number (if
known)_____________________________________________________________
2. AUTOMATIC CHECK SERVICE
Please arrange with my bank to draw pre-authorized checks on my regular
checking account and invest $___________________________ in shares of
Tri-Continental Common Stock every:
[ ] month [ ] 3 months
I have completed the 'Bank Authorization to Honor Pre-Authorized Checks'
which appears below and have enclosed one of my bank checks marked 'void.'
I understand that my checks will be invested on the fifth day of the month
and that I must remember to deduct the amount of my investment as it is
made from my checking account balance.
BANK AUTHORIZATION TO HONOR PRE-AUTHORIZED CHECKS
To:_____________________________________________________________________________
(Name of Bank)
________________________________________________________________________________
(Address of Bank or Branch, Street, City, State and Zip)
Please honor pre-authorized checks drawn on my account by Seligman Data Corp.,
100 Park Avenue, New York, NY 10017, to the order of Tri-Continental
Corporation, and charge them to my checking account. Your authority to do so
shall continue until you receive written notice from me revoking it. You may
terminate your participation in this arrangement at any time by written notice
to me. I agree that your rights with respect to each pre-authorized check shall
be the same as if it were a check drawn and signed by me. I further agree that
should any such check be dishonored, with or without cause, intentionally or
inadvertently, you shall be held under no liability whatsoever.
<TABLE>
<S> <C>
__________________________________________ __________________________________________________
Checking Account No.
_________________________________________ __________________________________________________
Name(s) of Depositor(s) -- Please Print Signature(s) of Depositor(s) -- As Carried by Bank
_________________________________________ __________________________________________________
Address (Street) City State Zip Code
</TABLE>
5/96
24
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
25
<PAGE>
<PAGE>
TERMS AND CONDITIONS
The Automatic Dividend Investment and Cash Purchase Plan provides
Tri-Continental Common Stockholders with four ways to add to their investments:
1) with Tri-Continental dividends, 2) with cash dividends from other
corporations, 3) with cash payments, in any amount at any time, and 4) with cash
provided by pre-authorized checks through the Automatic Check Service. A
Planholder may use any or all of these Services, subject to the following terms
and conditions:
1. Seligman Data Corp. ('SDC'), as Plan service agent, will maintain
accounts and confirm to Planholders, as soon as practicable after each
investment, the number of shares of Common Stock acquired and credited to the
accounts and the cost. Tri-Continental Corporation (the 'Corporation'), as
purchase agent, will purchase shares for Planholders. All checks for dividends
payable by other corporations or for cash purchase payments sent by Planholders
for investment in additional shares of Tri-Continental Common Stock should be
drawn to the order of Tri-Continental Corporation and mailed to Seligman Data
Corp., P.O. Box 3936, New York, NY 10008-3936.
2. Funds received by the Corporation for a Planholder will be combined with
funds of other Planholders and those funds may be combined with funds available
under the plans for the purchase of Tri-Continental Common Stock in order to
minimize brokerage commissions on shares purchased. Shares will be purchased in
accordance with the current Prospectus. Dividends from other corporations and
purchase cash received from Planholders or through the Automatic Check Service
will be invested at least once each 30 days.
3. The cost of shares acquired for each Plan will be the average cost,
including brokerage commissions and any other costs of acquisition, of all
shares acquired for all Planholders in connection with a particular investment.
4. No stock certificates will be delivered for shares acquired unless the
Plan account is terminated or the Planholder requests their delivery by writing
to SDC. The shares acquired will be held in each Planholder's account as book
credits.
5. Certificates held by a Planholder, or subsequently received, may be sent
to SDC for credit to a Plan account. A certificate for any full shares held in a
Plan account will be issued at a Planholder's request. The time required to
obtain a certificate to sell through a broker, or for other purposes, will be
that need to send a written request to SDC to withdraw the certificate (normally
two business days) and to mail the certificate to the Planholder through the
U.S. Postal Service.
6. A maximum service charge of $2.00 will be deducted before each
investment is made for a Plan account. There is no charge for Automatic Dividend
Investment.
7. Applications for the Automatic Check Service are subject to acceptance
by the Planholder's bank and SDC. SDC will prepare Automatic Check Service
checks with the same magnetic ink numbers that are on a Planholder's check and
will arrange with the Planholder's bank to start the Service in accordance with
the Planholder's instructions. A minimum of 30 days from the date of receipt of
an application by SDC is required to contact the bank and initiate the Service.
If for any reason the bank is unable to honor the pre-authorized check request,
the Planholder will be notified promptly.
Shares with a market value of at least two times the amount of the
authorized checks must be held as book credits for the Planholder's account by
SDC. If any check is dishonored or if the value of shares held by SDC in an
account falls below the required minimum, the Service may be suspended. The
Service may be reinstated upon written request by the Planholder including an
indication that the cause of the interruption has been corrected.
If a Planholder's check is not honored by the Planholder's bank at any
time, SDC is authorized to sell exactly enough full and fractional shares from
the Planholder's account to equal the amount of the dishonored check.
8. A Planholder or SDC may terminate a Plan account at any time upon notice
in writing before the record date of a dividend or distribution by
Tri-Continental. A Plan account will terminate automatically if the Planholder
sells or transfers all of the shares in the Plan account. If a Plan account is
terminated, a certificate for the full shares held may be issued and sent to the
Planholder, and any fractional shares may be liquidated at the Planholder's
request. Terminating Planholders may elect to have all or part of their shares
sold by the Corporation, if their shares are held in book credit form. If a Plan
account is terminated between the record and payment dates of a dividend, the
payment will be made in cash.
9. In acting under this Plan, the Corporation and SDC will be liable only
for willful misfeasance or gross negligence.
10. A Planholder may adopt or suspend one or more of the Plan Services by
sending a revised Authorization Form or notice in writing to SDC.
11. All additional shares registered in a Planholder's name which are
acquired under one or more of the Plan Services or by other means will
participate automatically in each of the Plan services elected.
5/96
26
<PAGE>
<PAGE>
- ------------------------------------------------------
- ------------------------------------------------------
TRI-CONTINENTAL CORPORATION
AN INVESTMENT YOU CAN LIVE WITH
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, New York 10017
SUBADVISER
Seligman Henderson Co.
100 Park Avenue
New York, New York 10017
STOCKHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
------------------------------------
Listed on the
New York Stock Exchange
- ------------------------------------------------------
- ------------------------------------------------------
CETRI 1 4/96
- ------------------------------------------------------
- ------------------------------------------------------
TRI-CONTINENTAL CORPORATION
AN INVESTMENT YOU CAN LIVE WITH
A MANAGEMENT TYPE
DIVERSIFIED, CLOSED-END
INVESTMENT COMPANY
------------------------------------
COMMON STOCK
($.50 PAR VALUE)
------------------------------------
PROSPECTUS
MAY 1, 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1996
TRI-CONTINENTAL CORPORATION
100 Park Avenue
New York, New York 10017
New York City Telephone: (212) 850-1864
Toll-Free Telephone: (800) 874-1092 all continental United States
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Prospectus dated May 1, 1996,
and should be read in conjunction therewith. A copy of the Prospectus may be
obtained from Tri-Continental Corporation (the "Corporation") at 100 Park
Avenue, New York, NY 10017.
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission (the "Commission"). These securities
may not be sold nor any offers to buy be accepted prior to the time the
registration statement becomes effective.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Page
---- ----
<S> <C>
Certain Transactions Of The Corporation...2 Experts......................................10
(See "The Corporation" in the Prospectus) Custodian, Stockholder Service And
Additional Investment Objectives And Dividend Paying Agent......................10
Policies.................................2 Brokerage Commissions........................10
(See "Investment and Other Policies" in the Incorporation Of Financial Statements By
Prospectus) Reference..................................11
Directors And Officers....................4 Independent Auditors' Report on
Management................................9 Financial Highlights - Senior Securities-
(See "Management of the Corporation" in the $2.50 Cumulative Preferred Stock...........12
Prospectus) Appendix.....................................13
</TABLE>
CETRI1A
<PAGE>
<PAGE>
CERTAIN TRANSACTIONS OF THE CORPORATION
On October 2, 1992, the Corporation distributed to stockholders of record on
that date a transferable Right for each of the 63,997,099 shares of Common Stock
then outstanding, entitling each stockholder to acquire one share of Common
Stock for each seven Rights held at a price of $21.00 per share. The
subscription period for exercising the Rights terminated on October 30, 1992 and
all shares offered were fully subscribed. J. & W. Seligman & Co. Incorporated,
the Corporation's Investment Manager (the "Manager") agreed to waive a portion
of its 1993 Fee Amount equal to one-third of the Corporation's expenses incurred
in connection with the Rights Offering.
ADDITIONAL INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Corporation are set forth in
the Prospectus. Certain additional investment information is set forth below.
Defined terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Prospectus.
The Corporation's stated fundamental policies, which may not be changed
without a vote of stockholders are listed below; within the limits of these
fundamental policies, the management has reserved freedom of action. The
Corporation:
(1) may issue senior securities such as bonds, notes or other evidences of
indebtedness if immediately after issuance the net assets of the Corporation
provide 300% coverage of the aggregate principal amount of all bonds, notes or
other evidences of indebtedness and that amount does not exceed 150% of the
capital and surplus of the Corporation;
(2) may issue senior equity securities on a parity with, but not having
preference or priority over, the Preferred Stock if immediately after issuance
its net assets are equal to at least 200% of the aggregate amount (exclusive of
any dividends accrued or in arrears) to which all shares of the Preferred Stock,
then outstanding, shall be entitled as a preference over the Common Stock in the
event of voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(3) may borrow money for substantially the same purposes as it may issue
senior debt securities, subject to the same restrictions and to any applicable
limitations prescribed by law;
(4) may engage in the business of underwriting securities either directly or
through majority-owned subsidiaries subject to any applicable restrictions and
limitations prescribed by law;
(5) does not intend to concentrate its assets in any one industry although it
may from time to time invest up to 25% of the value of its assets, taken at
market value, in a single industry;
(6) may not, with limited exceptions, purchase and sell real estate directly
but may do so through majority-owned subsidiaries, so long as its real estate
investments do not exceed 10% of the value of the Corporation's total assets;
(7) may not purchase or sell commodities or commodity contracts; and
(8) may make money loans (subject to restrictions imposed by law and by
charter) (a) only to its subsidiaries, (b) as incidents to its business
transactions or (c) for other purposes. It may lend its portfolio securities to
brokers or dealers in corporate or government securities, banks or other
recognized institutional borrowers of securities subject to any applicable
requirements of a national securities exchange or of a governmental regulatory
body against collateral consisting of cash or direct obligations of the United
States, maintained on a current basis, so long as all such loans do not exceed
10% of the value of total assets, and it may make loans represented by
repurchase agreements, as described in the Prospectus, so long as such loans do
not exceed 10% of the value of total assets.
When securities are loaned, the Corporation receives from the borrower the
equivalent of dividends or interest paid by the issuer of securities on loan
and, at the same time, makes short-term investments with the cash collateral and
retains the interest earned, after payment to the borrower or placing broker of
a negotiated portion of such interest, or receives from the borrower an agreed
upon rate of interest in the case of loans collateralized by direct obligations
of the United States. The Corporation does not have the right to vote securities
on loan, but would expect to terminate the loan and regain the right to vote if
that were considered important with respect to the investment.
-2-
<PAGE>
<PAGE>
During its last three fiscal years, the Corporation did not: (a) issue senior
securities; (b) borrow any money; (c) underwrite securities; (d) concentrate
investments in particular industries or groups of industries; (e) purchase or
sell real estate, commodities, or commodity contracts; or (f) make money loans
or lend portfolio securities.
In order to take advantage of opportunities that may be provided by debt
instruments of foreign issuers, the Corporation may from time to time invest up
to 3% of its assets in debt securities issued or guaranteed by a foreign
government or any of its political subdivisions, authorities, agencies or
instrumentalities and in related forward contracts. The Manager will determine
the percentage of assets invested in securities of a particular country or
denominated in a particular currency in accordance with its assessment of the
relative yield and appreciation potential of such securities and the
relationship of a country's currency to the U.S. dollar. Currently, the
Corporation will invest in securities denominated in foreign currencies or U.S.
dollars of issuers located in the following countries: Australia, Austria,
Belgium, Canada, Denmark, France, Germany, Hong Kong, Italy, Japan, Malaysia,
Mexico, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,
Switzerland, Thailand and the United Kingdom. An issuer of debt securities
purchased by the Corporation may be domiciled in a country other than the
country in whose currency the instrument is denominated. The Corporation may
also invest in debt securities denominated in the European Currency Unit
("ECU"), which is a "basket" consisting of specified amounts of the currencies
of certain of the economic member states of the European Community.
The Corporation's returns on foreign currency denominated debt instruments
can be adversely affected by changes in the relationship between the U.S. dollar
and foreign currencies. The Corporation may engage in currency exchange
transactions to protect against uncertainty in the level of future exchange
rates in connection with hedging and other non-speculative strategies involving
specific settlement transactions or portfolio positions. The Corporation will
conduct its currency exchange transactions either on a spot (i.e., cash) basis
at the rate prevailing in the currency market or through forward contracts.
Rights and Warrants. The Corporation may not invest in rights and warrants if,
at the time of acquisition, the investment in rights and warrants would exceed
5% of the Corporation's net assets, valued at the lower of cost or market. In
addition, no more than 2% of net assets may be invested in warrants not listed
on the New York or American Stock Exchanges. For purposes of this restriction,
warrants acquired by the Corporation in units or attached to securities may be
deemed to have been purchased without cost.
Foreign Currency Transactions. A forward foreign currency exchange contract is
an agreement to purchase or sell a specific currency at a future date and at a
price set at the time the contract is entered into. The Corporation will
generally enter into forward foreign currency exchange contracts to fix the U.S.
dollar value of a security it has agreed to buy or sell for the period between
the date the trade was entered into and the date the security is delivered and
paid for, or, to hedge the U.S. dollar value of securities it owns.
The Corporation may enter into a forward contract to sell or buy the amount
of a foreign currency it believes may experience a substantial movement against
the U.S. dollar. In this case the contract would approximate the value of some
or all of the Corporation's portfolio securities denominated in such foreign
currency. Under normal circumstances, the portfolio manager will limit forward
currency contracts to not greater than 75% of the Corporation's portfolio
position in any one country as of the date the contract is entered into. This
limitation will be measured at the point the hedging transaction is entered into
by the Corporation. Under extraordinary circumstances, the Subadviser may enter
into forward currency contracts in excess of 75% of the Corporation's portfolio
position in any one country as of the date the contract is entered into. The
precise matching of the forward contract amounts and the value of securities
involved will not generally be possible since the future value of such
securities in foreign currencies will change as a consequence of market
involvement in the value of those securities between the date the forward
contract is entered into and the date it matures. The projection of short-term
currency market movement is extremely difficult, and the successful execution of
a short-term hedging strategy is highly uncertain. Under certain circumstances,
the Corporation may commit up to the entire value of its assets which are
denominated in foreign currencies to the consummation of these contracts. The
Subadviser will consider the effect a substantial commitment of its assets to
forward contracts would have on the investment program of the Corporation and
its ability to purchase additional securities.
Except as set forth above and immediately below, the Corporation will also
not enter into such forward contracts or maintain a net exposure to such
contracts where the consummation of the contracts would oblige the Corporation
to deliver an amount of foreign currency in excess of the value of the
Corporation's portfolio securities or other assets denominated in that currency.
The Corporation, in order to avoid excess transactions and transaction costs,
may nonetheless maintain a net exposure to forward contracts in excess of the
value of the Corporation's portfolio securities or other assets denominated in
-3-
<PAGE>
<PAGE>
that currency provided the excess amount is "covered" by cash or liquid,
high-grade debt securities, denominated in any currency, at least equal at all
times to the amount of such excess. Under normal circumstances, consideration of
the prospect for currency parties will be incorporated into the longer term
investment decisions made with regard to overall diversification strategies.
However, the Subadviser believes that it is important to have the flexibility to
enter into such forward contracts when it determines that the best interests of
the Corporation will be served.
At the maturity of a forward contract, the Corporation may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract obligating it to purchase, on
the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute precision the
market value of portfolio securities at the expiration of the forward contract.
Accordingly, it may be necessary for the Corporation to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security is less than the amount of foreign currency the
Corporation is obligated to deliver and if a decision is made to sell the
security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received upon
the sale of the portfolio security if its market value exceeds the amount of
foreign currency the Corporation is obligated to deliver. However, the
Corporation may use liquid, high-grade debt securities, denominated in any
currency, to cover the amount by which the value of a forward contract exceeds
the value of the securities to which it relates.
If the Corporation retains the portfolio security and engages in offsetting
transactions, the Corporation will incur a gain or a loss (as described below)
to the extent that there has been movement in forward contract prices. If the
Corporation engages in an offsetting transaction, it may subsequently enter into
a new forward contract to sell the foreign currency. Should forward prices
decline during the period between the Corporation's entering into a forward
contract for the sale of a foreign currency and the date it enters into an
offsetting contract for the purchase of the foreign currency, the Corporation
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Corporation will suffer a loss to the extent the price of
the currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell.
The Corporation's dealing in forward foreign currency exchange contracts will
be limited to the transactions described above. Of course, the Corporation is
not required to enter into forward contracts with regard to its foreign
currency-denominated securities and will not do so unless deemed appropriate by
the Subadviser. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange at
a future date. Additionally, although such contracts tend to minimize the risk
of loss due to a decline in the value of a hedged currency, at the same time,
they tend to limit any potential gain which might result from an increase in the
value of that currency.
Stockholders should be aware of the costs of currency conversion. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to the Corporation at one rate, while offering a lesser rate of
exchange should the Corporation desire to resell that currency to the dealer.
Investment income received by the Corporation from sources within foreign
countries may be subject to foreign income taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Corporation to a reduced rate of such taxes or exemption from taxes
on such income. It is impossible to determine the effective rate of foreign tax
in advance since the amounts of the Corporation's assets to be invested within
various countries is not known.
DIRECTORS AND OFFICERS
A listing of the directors and officers of the Corporation and their business
experience for the past five years follows. An asterisk (*) indicates directors
who are "interested persons" of the Corporation (as defined by the Investment
Company Act of 1940 (the "1940 Act"). Unless otherwise noted, the address of
each director and officer is 100 Park Avenue, New York, NY 10017.
-4-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief
(57) Executive Officer and Chairman of the Executive
Committee
Managing Director, Chairman and President, J. &
W. Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Chairman and Chief Executive
Officer, the Seligman Group of Investment
Companies; Chairman, Seligman Financial
Services, Inc., broker/dealer; Seligman
Holdings, Inc., holding company; Seligman
Services, Inc., broker/dealer; and Carbo
Ceramics Inc., ceramic proppants for oil and
gas industry; Director or Trustee, Seligman
Data Corp. shareholder service agent;
Kerr-McGee Corporation, diversified energy
company; and Sarah Lawrence College; and a
Member of the Board of Governors of the
Investment Company Institute; formerly,
Chairman, Seligman Securities, Inc.,
broker/dealer; and J. & W. Seligman Trust
Company, trust compapny.
BRIAN T. ZINO* Director, President and Member of the Executive
(43) Committee
Director and Managing Director (formerly, Chief
Administrative and Financial Officer), J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Director or Trustee, the
Seligman Group of Investment Companies;
President, the Seligman Group of Investment
Companies, except Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund,
Inc; Chairman, Seligman Data Corp., shareholder
service agent; Director, Seligman Financial
Services, Inc., broker/dealer; Seligman
Services, Inc., broker/dealer; and Senior Vice
President, Seligman Henderson Co., adviser;
formerly, Director and Secretary, Chuo Trust -
JWS Advisors, Inc., advisers; and Director,
Seligman Securities, Inc., broker/dealer and J.
& W. Seligman Trust Company, trust company.
FRED E. BROWN* Director
(82)
Director and Consultant, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
and Seligman Advisors, Inc., advisers; Director
or Trustee, the Seligman Group of Investment
Companies; Seligman Financial Services, Inc.,
broker/dealer; Seligman Services, Inc.,
broker/dealer; Trudeau Institute, non-profit
biomedical research organization; Lake Placid
Center for the Arts, cultural organization; and
Lake Placid Education Foundation, education
foundation; formerly, Director, J. & W.
Seligman Trust Company trust company, and
Seligman Securities, Inc., broker/dealer.
JOHN R. GALVIN* Director
(66)
Dean, Fletcher School of Law and Diplomacy at
Tufts University; Director or Trustee, the
Seligman Group of Investment Companies;
Chairman of the American Council on Germany; a
Governor of the Center for Creative Leadership;
Director of USLIFE, insurance; National
Committee on U.S.-China Relations, National
Defense University; the Institute for Defense
Analysis; and Raytheon Co., electronics;
Formerly, Ambassador, U.S. State Department;
Distinguished Policy Analyst at Ohio State
University and Olin Distinguished Professor of
National Security Studies at the United States
Military Academy. From June, 1987 to June,
1992, he was the Supreme Allied Commander,
Europe and the Commander-in-Chief, United
States European Command. Tufts University,
Packard Avenue, Medford, MA 02105.
</TABLE>
-5-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
ALICE S. ILCHMAN Director
(60)
President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of Investment
Companies; Chairman, The Rockefeller
Foundation, charitable foundation; and
Director, NYNEX, telephone company, and the
Committee for Economic Development; formerly,
Trustee, The Markle Foundation, philanthropic
organization; and Director, International
Research and Exchange Board, intellectual
exchanges. Sarah Lawrence College, Bronxville,
New York 10708
FRANK A. McPHERSON Director
(62)
Chairman of the Board and Chief Executive
Officer, Kerr-McGee Corporation, energy and
Kimberly-Clark Corporation, consumer products,
Bank of Oklahoma Holding Company, American
Petroleum Institute, Oklahoma City Chamber of
Commerce, Baptist Medical Center, Oklahoma
Chapter of the Nature Conservancy, Oklahoma
Medical Research Foundation and United Way
Advisory Board; Chairman of Oklahoma City
Public Schools Foundation; and Member of the
Business Roundtable and National Petroleum
Council. 123 Robert S. Kerr Avenue, Oklahoma
City, OK 73102
JOHN E. MEROW* Director
(66)
Chairman and Senior Partner, Sullivan &
Cromwell, law firm; Director or Trustee, the
Seligman Group of Investment Companies; The
Municipal Art Society of New York; Commonwealth
Aluminum Corporation; the U.S. Council for
International Business; and the U.S.-New
Zealand Council; Chairman, American Australian
Association; Member of the American Law
Institute and Council on Foreign Relations;
Member of the Board of Governors of Foreign
Policy Association and New York Hospital. 125
Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(53)
Attorney; Director or Trustee, the Seligman
Group of Investment Companies; and Chairman of
the Board of Trustees of St. George's School
(Newport, RI). St. Bernard's Road, Gladstone,
NJ 07934
JAMES C. PITNEY Director
(69)
Partner, Pitney, Hardin, Kipp & Szuch, law
firm; Director or Trustee, the Seligman Group
of Investment Companies; and Public Service
Enterprise Group, public utility. Park Avenue
at Morris County, P.O. Box 1945, Morristown, NJ
07962-1945
JAMES Q. RIORDAN Director
(68)
Director, Various Corporations; Director or
Trustee, the Seligman Group of Investment
Companies; The Brooklyn Museum; The Brooklyn
Union Gas Company; The Committee for Economic
Development; Dow Jones & Co. Inc.; and Public
Broadcasting Service, Inc.; formerly,
Co-Chairman of the Policy Council of the Tax
Foundation; Director and Vice Chairman, Mobil
Corporation; Director, Tesoro Petroleum
Companies and Director and President, Bekaert
Corporation. 675 Third Avenue, Suite 3004, New
York, NY 10017
</TABLE>
-6-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
RONALD T. SCHROEDER* Director and Member of the Executive Committee
(48)
Director, Managing Director and Chief
Investment Officer, Institutional J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; and Seligman Advisors,
Inc., advisers; Director or Trustee, Seligman
Group of Investment Companies; Director
Seligman Holdings, Inc., holding company;
Seligman Financial Services, Inc., distributor;
; Seligman Henderson Co., advisors; and
Seligman Services, Inc., broker/dealer
formerly, President the Seligman Group of
Investment Companies, except Seligman Quality
Municipal Fund, Inc. and Seligman Select
Municipal Fund, Inc., Director, J. & W.
Seligman Trust Company, Seligman Data Corp.,
shareholder service agent and Seligman
Securities, Inc., broker/dealer.
ROBERT L. SHAFER Director
(63)
Vice President, Pfizer Inc., pharmaceuticals;
Director or Trustee, the Seligman Group of
Investment Companies; and USLIFE Corporation,
life insurance. 235 East 42nd Street, New York,
NY 10017
JAMES N. WHITSON Director
(61)
Executive Vice President, Chief Operating
Officer and Director, Sammons Enterprises,
Inc., Director or Trustee, the Seligman Group
of Investment Companies; Red Man Pipe and
Supply Company, piping and other materials and
C-SPAN. 300 Crescent Court, Suite 700, Dallas,
TX 75202
CHARLES C. SMITH, JR. Vice President and Portfolio Manager
(38)
Managing Director (formerly, Senior Vice
President and Senior Investment Officer), J. &
W. Seligman & Co. Incorporated, investment
managers and advisers; Vice President and
Portfolio Manager, three other open-end
investment companies in the Seligman Group of
Investment Companies.
LAWRENCE P. VOGEL Vice President
(39)
Senior Vice President, Finance, J. & W.
Seligman & Co. Incorporated, investment
managers and advisers; Seligman Financial
Services, Inc., broker/dealer; and Seligman
Advisors, Inc., advisers; Vice President, the
Seligman Group of Investment Companies; Senior
Vice President, Finance (formerly, Treasurer),
Seligman Data Corp., shareholder service agent;
Treasurer, Seligman Holdings, Inc., holding
company; and Seligman Henderson Co., advisers;
formerly, Senior Vice President, Seligman
Securities, Inc., broker/dealer; and Vice
President, Finance, J. & W. Seligman Trust
Company, trust company.
FRANK J. NASTA Secretary
(31)
Senior Vice President, Law and Regulation, and
Corporate Secretary, J. & W. Seligman & Co.
Incorporated, investment managers and advisers;
and Seligman Advisors, Inc., advisers;
Corporate Secretary, the Seligman Group of
Investment Companies, Seligman Financial
Services, Inc., broker/dealer; Seligman
Henderson Co., advisers; Seligman Services,
Inc., broker/dealer; and Seligman Data Corp.,
shareholder service agent; formerly, Secretary,
J. & W. Seligman Trust Company, trust company;
and attorney, Seward & Kissel, law firm.
</TABLE>
-7-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
THOMAS G. ROSE Treasurer
(38)
Treasurer, the Seligman Group of Investment
Companies; and Seligman Data Corp., shareholder
service agent; formerly, Treasurer, American
Investors Advisors, Inc. and the American
Investors Family of Funds.
</TABLE>
<TABLE>
<CAPTION>
Compensation Table
------------------
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as part of from Fund and
Position With Registrant from Fund (1) Fund Expenses Fund Complex (2)
------------------------ ------------ --------------- ----------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Ronald T. Schroeder, Director N/A N/A N/A
Fred E. Brown, Director N/A N/A N/A
John R. Galvin, Director $11,534.07 N/A $41,252.75
Alice S. Ilchman, Director 19,200.00 N/A 68,000.00
Frank A. McPherson, Director 11,534.07 N/A 41,252.75
John E. Merow, Director 18,400.00(d) N/A 66,000.00(d)
Betsy S. Michel, Director 18,000.00 N/A 67,000.00
Douglas R. Nichols, Jr., Director* 6,865.93 N/A 24,747.25
James C. Pitney, Director 19,200.00 N/A 68,000.00
James Q. Riordan, Director 19,200.00 N/A 70,000.00
Herman J. Schmidt, Director* 6,865.93 N/A 24,747.25
Robert L. Shafer, Director 19,200.00 N/A 70,000.00
James N. Whitson, Director 18,400.00(d) N/A 68,000.00(d)
</TABLE>
- ----------------------
(1) Based on remuneration received by the Directors of the Fund for the year
ended December 31, 1995.
(2) As defined in the Fund's Prospectus, the Seligman Group of Investment
Companies consists of seventeen investment companies.
* Retired May 18, 1995.
(d) Deferred. As of December 31, 1995, the total amounts of deferred
compensation (including interest) payable to Messrs. Merow, Pitney and Whitson
were $96,695, $238,571 and $52,153, respectively. Mr. Pitney no longer defers
current compensation.
The Fund has a compensation arrangement under which outside directors may elect
to defer receiving their fees. Under this arrangement, interest is accrued on
the deferred balances. The annual cost of such fees and interest is included in
the director's fees and expenses and the accumulated balance thereof is included
in "Liabilities" in the Fund's financial statements. Directors and officers of
the Corporation are also directors, trustees and officers of some or all of the
other investment companies in the Seligman Group.
The Executive Committee of the Board of Directors has the power to (a)
determine the value of securities and assets owned by the Corporation, (b) elect
or appoint officers of the Corporation to serve until the next meeting of the
Directors succeeding such action and (c) determine the price at which shares of
Common Stock of the Corporation shall be issued and sold. All action taken by
the Executive Committee is recorded and reported to the Board of Directors at
their meeting succeeding such action. The members of the Executive Committee
consist of Mr. William C. Morris, Chairman, Ronald T. Schroeder and Brian T.
Zino.
Holdings of Preferred Stock, Common Stock and Warrants:
As of March 31, 1996 holders of record of Preferred Stock totaled 777;
holders of record of Common Stock totaled 46,424; and holders of record of
Warrants totaled 197. Insofar as is known by the Corporation, no person owns or
controls
-8-
<PAGE>
<PAGE>
or holds, directly or indirectly, 5% or more of the outstanding equity
securities, except that Cede & Co., a nominee for the Depository Trust Company,
P.O. Box 20, Bowling Green Station, New York, NY 10274 owns of record 41% of the
Corporation's Common Stock. As of March 31, 1996 all directors and officers of
the Corporation, as a group, owned less than 1% of the Corporation's Common
Stock. As of that date, no directors or officers owned any of the Corporation's
Preferred Stock or Warrants. Mr. William C. Morris is Chairman and Chief
Executive Officer of the Manager and Chairman of the Board and Chief Executive
Officer of the Corporation. Mr. Morris owns a majority of the outstanding voting
securities of the Manager.
These securities of the Corporation shown as being owned beneficially by the
directors and officers include shares held by or for the benefit of members of
their families or held by a trust of which a director is a trustee but in which
they disclaim beneficial ownership.
MANAGEMENT
The Corporation pays the Manager for its services a management fee,
calculated daily and payable monthly, equal to a percentage of the daily net
assets of the Corporation. The method for determining this percentage, referred
to as the management fee rate, is set forth in the Prospectus. The Manager
agreed to waive a portion of its 1993 Fee Amount equal to one-third of the
Corporation's expenses in connection with an offering of Rights to acquire
Common Stock in October, 1992. See "Certain Transactions of the Corporation."
The management fee amounted to $9,761.731 in 1995, $9,372,713 in 1994 and
$9,484,255 in 1993.
As part of its services to the Corporation, the Manager provides the
Corporation with such office space, administrative and other services and
executive and other personnel as are necessary for the operations of the
Corporation. The Manager also provides senior management for Seligman Data
Corp., a wholly-owned subsidiary of the Corporation and certain other investment
companies in the Seligman Group. The Manager pays all of the compensation of the
directors of the Corporation who are employees or consultants of the Manager and
its affiliates, of the officers and employees of the Corporation and of certain
executive officers of Seligman Data Corp.
The Manager is a successor firm to an investment banking business founded in
1864 which has provided investment services to individuals, families,
institutions and corporations. See the Appendix for a history of the Manager. On
December 23, 1988, a majority of the outstanding voting securities of the
Manager were purchased by Mr. William C. Morris, and a simultaneous
recapitalization of the Manager occurred.
Under the Subadvisory Agreement, dated June 1, 1994, the Subadviser
supervises and directs all or a portion of the of the Corporation's investments
in foreign securities and ADRs, consistent with the Corporation's investment
objectives, policies and principles. For these services the Subadviser is paid a
fee as described in the Corporation's Prospectus. The Subadvisory Agreement was
approved by the Board of Directors at a meeting held on January 20, 1994 and by
the stockholders of the Corporation on May 19, 1994. The Subadvisory Agreement
will continue in effect until December 31 of each year if (1) such continuance
is approved in the manner required by the 1940 Act (by a vote of a majority of
the Board of Directors or of the outstanding voting securities of the
Corporation and by a vote of a majority of the Directors who are not parties to
the Subadvisory Agreement or interested persons of any such party) and (2) if
the Subadviser shall not have notified the Manager in writing at least 60 days
prior to December 31 of any year that it does not desire such continuance. The
Subadvisory Agreement may be terminated at any time by the Corporation, on 60
days written notice to the Subadviser. The Subadvisory Agreement will terminate
automatically in the event of its assignment or upon the termination of the
Management Agreement.
For the period June 1, 1994 through December 31, 1994, the Subadviser
received a fee of $476,716. For the year ended December 31, 1995, the Subadviser
received a fee of $810,796.
The Subadviser is a New York general partnership formed by the Manager and
Henderson International, Inc., a controlled affiliate of Henderson
Administration Group plc. Henderson Administration Group plc, headquartered in
London, is one of the largest independent money managers in Europe. The firm
currently manages approximately $19 billion in assets, and is recognized as a
specialist in global equity investing.
-9-
<PAGE>
<PAGE>
EXPERTS
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281
acts as independent auditors for the Corporation and in such capacity audits the
Corporation's annual and semi-annual financial statements and financial
highlights.
The financial information of the Corporation included in the Prospectus under
the caption "Financial Highlights" and the financial statements incorporated by
reference in this Statement of Additional Information have been so included or
incorporated by reference in reliance on the reports of Deloitte & Touche LLP
given upon their authority as experts in auditing and accounting.
CUSTODIAN, STOCKHOLDER SERVICE AGENT AND DIVIDEND PAYING AGENT
Seligman Data Corp., a wholly-owned subsidiary of the Corporation, acts as
the stockholder service agent and dividend paying agent and performs, at cost,
certain recordkeeping functions for the Corporation, maintains the records of
shareholder accounts and furnishes dividend paying, redemption and related
services.
Investors Fiduciary Trust Company, 127 West 10th Street, Kansas City,
Missouri 64105, serves as custodian for the Corporation. It also maintains,
under the general supervision of the Manager, the accounting records and
determines the net asset value for the Corporation.
BROKERAGE COMMISSIONS
The Management and Subadvisory Agreements recognize that in the purchase and
sale of portfolio securities of the Corporation, the Manager and Subadviser will
seek the most favorable price and execution, and, consistent with that policy,
may give consideration to the research, statistical and other services furnished
by brokers or dealers to the Manager and Subadviser for its use, as well as to
the general attitude toward and support of investment companies demonstrated by
such brokers or dealers. Such services include supplemental investment research,
analysis and reports concerning issuers, industries and securities deemed by the
Manager and Subadviser to be beneficial to the Corporation. In addition, the
Manager and Subadviser are authorized to place orders with brokers who provide
supplemental investment and market research and security and economic analysis
although the use of such brokers may result in a higher brokerage charge to the
Corporation than the use of brokers selected solely on the basis of seeking the
most favorable price and execution and although such research and analysis may
be useful to the Manager and Subadviser in connection with its services to
clients other than the Corporation.
In over-the-counter markets, the Corporation deals with primary market makers
unless a more favorable execution or price is believed to be obtainable. The
Corporation may buy securities from or sell securities to dealers acting as
principal, except dealers with which its directors and/or officers are
affiliated.
When two or more of the investment companies in the Seligman Group or other
investment advisory clients of the Manager desire to buy or sell the same
security at the same time, the securities purchased or sold are allocated by the
Manager in a manner believed to be equitable to each. There may be possible
advantages or disadvantages of such transactions with respect to price or the
size of positions readily obtainable or saleable.
Information as to the Corporation's portfolio turnover rate for recent fiscal
years is stated under "Financial Highlights" in the Prospectus. Brokerage
commissions for the last three fiscal years are presented as follows:
<TABLE>
<CAPTION>
Brokerage
Year Total Commissions
Ended Brokerage Paid to
December 31 Commissions (1) Seligman Securities, Inc. (2)
----------- --------------- -----------------------------
<S> <C> <C>
1995 $ 3,825,533 N/A
1994 3,062,434 N/A
</TABLE>
-10-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Brokerage
Year Total Commissions
Ended Brokerage Paid to
December 31 Commissions (1) Seligman Securities, Inc. (2)
----------- -------------- -----------------------------
<S> <C> <C>
1993 2,268,428 $ 251,559
</TABLE>
- -------------------
(1) Not including any spreads on principal transactions on a net basis.
(2) Brokerage commissions paid to Seligman Securities, Inc., an affiliate
of the Manager, were 11.09% of total brokerage commissions paid for
1993. The aggregate dollar amount of the Corporation's transactions
for which the Seligman Securities, Inc. acted as broker was 13.29% of
the total dollar amount of all commission transactions in 1993. The
Board adopted procedures effective January 1, 1984, pursuant to which
Seligman Securities, Inc. was available to the Fund as broker for
approximately one-half of agency transactions in listed securities
(exclusive of option and option-related transactions) at commission
rates believed in accordance with applicable regulations to be fair
and reasonable. As of March 31, 1993, Seligman Securities, Inc. ceased
functioning as a broker for the Corporation and its other clients.
INCORPORATION OF FINANCIAL STATEMENTS BY REFERENCE
The Corporation's financial statements for the year ended December 31, 1995
are herein incorporated by reference from the 1995 Annual Report to Stockholders
of the Corporation (the "1995 Annual Report"), filed with the Commission
pursuant to Section 30(b) of the 1940 Act and the rules and regulations
thereunder. The 1995 Annual Report also contains schedules of the Corporation's
portfolio investments as of December 31, 1995 and certain other financial
information. A copy of the 1995 Annual Report will be sent without charge, to
all investors who request a copy of this Statement of Additional Information.
-11-
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT ON FINANCIAL HIGHLIGHTS - SENIOR SECURITIES -
$2.50 CUMULATIVE PREFERRED STOCK
To the Board of Directors and Security Holders of
Tri-Continental Corporation:
We have previously audited, in accordance with generally accepted auditing
standards, the statements of assets and liabilities, including the portfolio of
investments, and the statements of capital stock and surplus of Tri-Continental
Corporation as of December 31 for each of the ten years in the period ended
December 31, 1995 and the related statements of operations and of changes in net
investment assets, and the financial highlights for each of the years then ended
(none of which are presented herein); and we expressed unqualified opinions on
those financial statements.
In our opinion, the information appearing on page 6 of the Prospectus, under
the caption "Senior Securities - $2.50 Cumulative Preferred Stock", for each of
the ten years in the period ended December 31, 1995 is fairly stated, in all
material respects, in relation to the financial statements from which it has
been derived.
DELOITTE & TOUCHE LLP
New York, New York
February 2, 1996
-12-
<PAGE>
<PAGE>
APPENDIX
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the
oldest of eight brothers, arrived in the United States from Germany. He earned
his living as a pack peddler in Pennsylvania, and began sending for his
brothers. The Seligmans became successful merchants, establishing businesses in
the South and East.
Backed by nearly thirty years of business success - culminating in the
sale of government securities to help finance the Civil War - Joseph Seligman,
with his brothers, established the international banking and investment firm of
J. & W. Seligman & Co. In the years that followed, the Seligman Complex played a
major role in the geographical expansion and industrial development of the
United States.
<TABLE>
<S> <C>
Seligman:
.... Prior to 1900
Helps finance America's fledgling railroads through underwriting.
Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made
it unnecessary.
Becomes a prominent underwriter of corporate securities, including New
York Mutual Gas Light Company, later part of Consolidated Edison.
Provides financial assistance to Mary Todd Lincoln and urges the Senate to award her a pension.
Is appointed U.S. Navy fiscal agent by President Grant.
Becomes a leader in raising capital for America's industrial and urban development.
...1900-1910
Helps Congress finance the building of the Panama Canal.
...1910s
Participates in raising billions for Great Britain, France and Italy, helping to finance World
War I.
...1920s
Participates in hundreds of underwritings including those for some of the country's largest
companies: Briggs Manufacturing, Dodge Brothers, General Motors, Minneapolis-Honeywell
Regulatory Company, Maytag Company, United Artists Theater Circuit and Victor Talking Machine
Company.
Forms Tri-Continental Corporation in 1929, today the nation's largest,
diversified closed-end equity investment company, with over $2 billion
in assets, and one of its oldest.
...1930s
Assumes management of Broad Street Investing Co. Inc., its first mutual fund, today known as
Seligman Common Stock Fund, Inc.
Establishes Investment Advisory Service.
...1940s
Helps shape the Investment Company Act of 1940.
Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
Assumes management of National Investors Corporation, today Seligman Growth Fund, Inc.
Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
</TABLE>
-13-
<PAGE>
<PAGE>
<TABLE>
<S> <C>
...1950-1989
Develops new open-end investment companies. Today, manages more than 40 mutual fund
portfolios.
Helps pioneer state-specific, tax-exempt municipal bond funds, today
managing a national and 18 state-specific tax-exempt funds.
Establishes J. & W. Seligman Trust Company, and J. & W. Seligman Valuations Corporation.
Establishes Seligman Portfolios, Inc., an investment vehicle offered through variable annuity
products.
...1990s
Introduces Seligman Select Municipal Fund, Inc. and Seligman Quality Municipal Fund, Inc., two
closed-end funds that invest in high-quality municipal bonds.
In 1991 establishes a joint venture with Henderson Administration Group
plc, of London, known as Seligman Henderson Co., to offer global
investment products.
Introduces Seligman Frontier Fund, Inc., a small capitalization mutual fund.
Launches Seligman Henderson Global Fund Series, Inc., which today offers four separate series:
Seligman Henderson International Fund, Seligman Henderson Global Smaller Companies Fund,
Seligman Henderson Global Technology Fund and Seligman Henderson Global Growth Opportunities
Fund.
</TABLE>
-14-
<PAGE>
<PAGE>
66th Annual Report 1995
TRI-CONTINENTAL CORPORATION
an investment you can live with
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION INVESTS PRIMARILY TO PRODUCE LONG-TERM GROWTH OF
BOTH CAPITAL AND INCOME, WHILE PROVIDING REASONABLE CURRENT INCOME.
TY is Tri-Continental Corporation's symbol for its Common Stock on the New York
Stock Exchange.
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
To the Stockholders: February 2, 1996
Nineteen ninety-five, Tri-Continental Corporation's 66th year, was a banner
year for U.S. equity markets and a good year for your Corporation. The Standard
& Poor's 500 Composite Stock Price Index (S&P 500) recorded its fifth best gain
since Tri-Continental was founded in 1929-only 1933, 1935, 1954, and 1958 saw
larger gains. What makes 1995's gains all the more remarkable is that unlike
those in prior periods, the U.S. economy was not recovering from a recession.
Rather, the Federal Reserve Board accomplished a osoft landingo; that is, the
U.S. economy's growth was slowed without triggering an actual contraction in
overall economic activity.
Even though the U.S. economy's growth slowed, corporate profits continued to
rise. This can be attributed to a combination of slight increases in unit
volumes in the U.S., expanded unit volumes internationally, and continued
increases in productivity. In addition, fears of an impending recession faded.
At this time last year, it was expected that inflation would increase to 3.5% or
more. Instead, inflation remained below 3%. As a result, long-term interest
rates declined during the year. The yield on the 30-year U.S. Treasury bond, for
example, fell from 7.84% on December 29, 1994, to 5.95% on December 29, 1995.
For Tri-Continental, 1995 was a transition year. The year began with the
appointment of Charles C. Smith, Jr. as Portfolio Manager. Early in the year, we
determined that efforts to increase the dividend distributions on a per share
basis had begun to interfere with our ability to meet your Corporation's core
investment objective of providing FUTURE GROWTH OF BOTH CAPITAL AND INCOME,
WHILE PROVIDING REASONABLE CURRENT INCOME. Therefore, the Corporation's
portfolio was shifted to increase the opportunity for capital appreciation and
long-term dividend growth. The fixed-income component of the portfolio, which
had accounted for more than 12% of assets, was reduced substantially. Proceeds
were invested in U.S. equities during the first quarter in time to participate
in this year's strong markets.
These moves contributed to an improvement in Tri-Continental's investment
performance. For the year, total return was 30.80% based on net asset value.
Although this return lagged the S&P 500, it compared favorably to the universe
of Closed-End Growth and Income Funds, which had an average total return of
30.05% for the year, as measured by Lipper Analytical Services, a prominent fund
ranking service. The total return based on market price was somewhat less at
27.95%, reflecting a widening in the discount from net asset value.
1
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
At the same time that Tri-Continental's portfolio was achieving greater
capital growth, it was also able to generate an increase of 1.3% in total
dividends from net investment income for Common Stockholders who invested their
1994 capital gain distribution in additional shares. The net realized capital
gain paid for 1995 was $169,106,048, or $2.01 per share.
Important progress was made during the year, but our work is far from
complete. Our first priority is to continue to improve the investment results of
your Corporation. In addition, your Manager, J.& W. Seligman & Co.
Incorporated, with the approval of your Corporation's Board of Directors, has
strengthened Tri-Continental's Investor Relations Program with the goal of
enhancing the long-term value of being a Tri-Continental Stockholder.
During the next several years, we will be doing more to promote and enhance
Tri-Continental's image, reputation, and identity as a closed-end investment
company. You'll notice some changes in your Corporation's Annual Report which
were made to address commonly raised issues such as the capital gain and
dividend distributions, and the Corporation's historical discount or premium.
Our goal is to increase the public's understanding of the issues and
opportunities of investing in Tri-Continental. We hope you find all of the
information in this Report helpful.
Looking ahead, the slowing economy, the budget negotiations, and the
Presidential election are a few of the factors that may create somewhat more
volatile markets. However, one thing is clear: Prices of common stocks will
fluctuate, both up and down. Therefore, we will continue to practice sound
investment principles and to pursue your Corporation's stated investment
objectives. In doing so, we will search for, and invest in, companies that can
sustain earnings growth in a challenging and competitive global business
environment-strategy we believe to be key to investment performance.
We thank you for your continued confidence in Tri-Continental Corporation and
look forward to serving your investment needs in the years to come.
By order of the Board of Directors,
/s/William C. Morris
William C. Morris
Chairman
/s/Brian T. Zino
Brian T. Zino
President
2
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
HIGHLIGHTS OF THE YEAR
NET INVESTMENT ASSETS were $2,506,785,758 at December 31.
NET ASSET VALUE of each share of Common Stock was $27.58 at December 31,
compared to $23.70 at the start of the year. If you invested the December gain
distribution in additional shares, the net asset value of each share you owned
at the beginning of 1995 was equivalent to $30.03 at year end. Assuming you
invested dividends and took the gain distribution in shares, your total return
was 30.80%. This compares with 37.58% for common stock prices generally, as
measured by the Standard & Poor's 500 Composite Stock Price Index.
INVESTMENT INCOME was $76,774,096 in 1995, compared to $79,332,941 in 1994. For
Stockholders who invested the 1994 capital gain distribution in additional
shares, the total 1995 investment income rose 1.3%.
OPERATING EXPENSES for the year were $14,507,036. The ratio of expenses to the
average value of net assets was 0.63%, down from 1994's expense ratio of 0.64%.
DIVIDENDS DECLARED totaled $63,180,788. Preferred Stock dividends paid each
quarter completed 66 years of uninterrupted payments. Total net investment
income available to cover the $2.50 Preferred Stock dividend was equivalent to
$82.72 per Preferred share.
Common Stock dividends, paid quarterly, totaled $0.73 per share on an average of
83,971,000 shares, compared to $0.79 in 1994 when, on average, there were
approximately 5,310,000 fewer shares outstanding. Common Stock dividends per
share with the 1994 capital gain distribution taken in additional shares were
equivalent to $0.80 per share.
TAXABLE NET INVESTMENT gain of $220,082,721 was realized in 1995. This amounted
to $2.46 per share of Common Stock outstanding at December 31, 1995. The amount
of net gain realized is the result of sales of securities in the portfolio
throughout the year.
UNREALIZED GAIN on investments totaled $494,660,634, or $5.53 per share of
Common Stock outstanding at December 31, 1995.
DISTRIBUTION OF REALIZED GAIN
Your Directors declared a distribution of $2.01 per Common share from taxable
net gains realized through October 31, 1995, consisting of $1.86 from net
long-term gains and $.15 from net short-term gains, which was paid on December
27 to Stockholders of record on December 8.
The Corporation was required to distribute to Common Stockholders the total
undistributed net capital gains realized through October 31, 1995, to avoid a 4%
federal excise tax. The undistributed net capital gain realized from November 1,
1995, to December 31, 1995, remains a part of the underlying market value of
Common Stock shares as of December 31, 1995. This amount will be distributed to
Common Stockholders during 1996, at which time Common Stockholders will be
subject to federal income taxes on the amount distributed.
The number of shares of Common Stock issued to those who took the December
payment in shares was determined by dividing the total dollar amount payable by
$22.625, the mean of the high and low market prices on the New York Stock
Exchange on December 18. Distributions should be takenainto account in measuring
the results of an investment in Tri-Continental Common Stock, andashould be
taken in shares if you wish your investment to benefit from the full effect of
compounding.
3
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
ASSETS AT YEAR END: 1995 1994
--------------- ---------------
<S> <C> <C>
Total assets ............................... $ 2,528,405,417 $ 2,049,281,845
Amounts owed ............................. 21,619,659 17,546,369
--------------- ---------------
NET INVESTMENT ASSETS ...................... $ 2,506,785,758 $ 2,031,735,476
Preferred Stock, at par value ............ 37,637,000 37,637,000
--------------- ---------------
Net assets for Common Stock ................ $ 2,469,148,758 $ 1,994,098,476
=============== ===============
Common shares outstanding .................. 89,512,184 84,144,106
NET ASSETS BEHIND EACH
COMMON SHARE ............................. $ 27.58 $ 23.70
With 1995 gain distribution
taken in shares .......................... $ 30.03 --
TAXABLE GAIN:
Net capital gain realized .................. $ 220,082,721 $ 149,773,270
Per Common share ......................... $ 2.46 $ 1.90
Undistributed capital gains, end of year ... $ 50,976,673 --
Per Common share, end of year ............ $ .57 --
Unrealized capital gain, end of year ....... $ 494,660,634 $ 191,363,863
Per Common share, end of year ............ $ 5.53 $ 2.27
DISTRIBUTION OF CURRENT YEAR'S GAIN:
Per Common share* ........................ $ 2.01 $ 1.90
INCOME:
Total income earned ........................ $ 76,774,096 $ 79,332,941
Expenses ................................. 14,507,036 13,705,939
Preferred Stock dividends ................ 1,881,850 1,881,850
--------------- ---------------
Income for Common Stock .................... $ 60,385,210 $ 63,745,152
=============== ===============
DIVIDENDS PER COMMON SHARE $ .73 $ .79
With December 1994 gain
distribution taken in shares ............. $ .80 --
</TABLE>
*The Corporation's net capital gain realized for the year 1995 was $2.46 per
share of Common Stock outstanding at December 31, 1995. However, the Corporation
was required to distribute only the total undistributed net capital gains
realized through October 31, 1995, ($2.01) to avoid a 4% federal excise tax. The
undistributed net realized capital gain remains a part of the underlying market
value of Common Stock shares as of December 31, 1995. This amount will be
distributed to Common Stockholders during 1996, at which time Common
Stockholders will be subject to federal income taxes on the amount received.
4
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
INTERVIEW WITH YOUR PORTFOLIO MANAGER
CHARLES C. SMITH, JR. is a Managing Director of J. & W.
Seligman & Co. Incorporated and has been Portfolio Manager of
Tri-Continental Corporation since January 1, 1995. Mr. Smith
is also Portfolio Manager and Vice President of Seligman
[photo] Common Stock Fund and Seligman Income Fund. He is also Vice
President of Seligman Portfolios, Inc. and Portfolio Manager
of its Common Stock and Income portfolios. Mr. Smith joined
Seligman in 1985 as Vice President, Investment Officer. He was
promoted to Senior Vice President, Senior Investment Officer
in August 1992, andatoaManaging Director in January 1994.
ECONOMIC FACTORS AFFECTING YOUR CORPORATION
"Contrary to 1994's restrictive monetary policy, the Federal Reserve Board took
a more accommodating stance in 1995, lowering short-term interest rates twice.
This action gave investors more confidence in the near-term growth prospects for
the U.S. economy and contributed to the strength of the U.S. equity markets
which, in turn, benefited the prices of many of the companies owned by
Tri-Continental."
YOUR CORPORATION'S INVESTMENT STRATEGY
"1995 was a transition year for Tri-Continental. Emphasis was placed on
increasing investments in equities relative to fixed income securities equity
securities over fixed-income investments, with the expectation of strong stock
market performance in 1995. Tri-Continental's bond investments, all very short
in maturity, were sold and the assets were redeployed into equities. This was
done in an effort to increase the opportunity for capital appreciation and at
the same time to maintain income at or above 1994 levels for those Stockholders
investing capital gain distributions in additional shares. In fact, there was a
modest 1.3% increase in 1995's income over 1994 for those Stockholders who
invested their 1994 capital gain distribution in additional shares.
"With regard to our particular investment philosophy, we remain broadly
diversified, choosing to focus on identifying and investing in companies we
believe have the strongest relative earnings growth and attractive valuations in
each industry group. We believe using this strategy consistently is the best
method of achieving your Corporation's investment objective of providing future
growth of both capital and income, while providing reasonable current income."
INDIVIDUAL SECTOR PERFORMANCE
"As one might expect, interest rate sensitive issues were the strongest
performers in Tri-Continental's portfolio in 1995, as they benefited from the
significant decline in interest rates. The economically sensitive capital goods
industry also did very well, especially Aerospace stocks which continued to
appreciate, responding to consolidation in that industry. In addition, health
care related securities rebounded from their depressed levels in 1994 and the
technology sector had a strong year, in spite of some weakness in the fourth
quarter.
5
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
"Our decision to greatly reduce your Corporation's exposure to Real Estate
Investment Trusts (REITs) proved particularly timely as those issues
significantly lagged the stock market, notwithstanding the high yields and
interest rate sensitivity that is generally associated with REITs.
"As part of your Corporation's investment policy, it may invest up to 10% of
assets directly in international markets. By investing in non-U.S. markets we
look to add value for Tri-Continental Stockholders by seeking greater
diversification, less year-to-year volatility, and a higher expected return over
the long term. However, in shorter periods when international markets lag the
U.S. markets, such as 1995, international exposure can dampen overall investment
results. Seligman Henderson Co., the joint venture between J. &W. Seligman &Co.
Incorporated and Henderson Administration Group, plc in London, is responsible
for Tri-Continental's international investments."
LOOKING AHEAD
"In 1996, we will continue to focus on achieving Tri-Continental's objectives by
investing primarily in common stocks. We will also maintain modest exposure to
convertible stocks and bonds, in an effort to generate slightly higher income.
We will use a disciplined process of identifying issues with the best relative
earnings growth in each industry group, as opposed to making large sector bets.
While 1996 may not produce the same dramatic rise in share prices as did 1995,
the opportunity exists to make attractive investments that should prove to be
successful long-term holdings, regardless of any near-term price volatility."
6
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
DIVERSIFICATION OF ASSETS
The diversification of portfolio holdings by industry on December 31, 1995, was
as follows. Individual securities owned are listed on pages 18 to 26.
<TABLE>
<CAPTION>
Percent of
Net Investment
Assets
------------------
December 31,
Issues Cost Value 1995 1994
-------- -------------- -------------- ------ ------
<S> <C> <C> <C> <C> <C>
Net Cash and Short-Term
Holdings 2 $ 171,852,821 $ 171,852,821 6.9% 4.2%
Tri-Continental
Financial Division 4 25,844,937 31,049,388 1.2 1.3
U.S. Government Securities -- -- -- -- 3.3
Corporate Bonds -- -- -- -- 2.2
---- -------------- -------------- ------ ------
6 $ 197,697,758 $ 202,902,209 8.1% 11.0%
---- -------------- -------------- ------ ------
Common Stocks and
Convertible Issues:
Aerospace 5 $ 66,497,563 $ 93,284,375 3.7% 1.7%
Automotive and related 8 75,563,674 86,554,958 3.4 4.0
Basic materials 3 22,664,338 24,734,375 1.0 3.7
Building and construction 2 26,396,485 32,025,000 1.3 0.9
Chemicals 8 88,793,252 106,617,169 4.3 --
Communications 10 80,664,644 106,275,030 4.2 4.0
Computer and business services 7 74,328,448 97,261,267 3.8 5.2
Consumer goods and services 20 239,057,233 319,582,421 12.7 10.6
Diversified 7 82,642,017 100,431,387 4.0 5.2
Drugs and health care 9 112,250,275 164,619,375 6.6 5.8
Electric and gas utilities 6 48,496,329 56,952,450 2.3 2.3
Electronics 5 49,112,681 57,801,875 2.3 2.8
Energy 12 148,520,052 193,435,597 7.7 9.4
Entertainment and leisure 4 23,829,269 31,460,000 1.3 1.2
Environmental management 1 8,125,060 7,375,000 0.3 0.7
Finance and insurance 20 188,301,799 276,618,727 11.1 10.5
Manufacturing and
industrial equipment 11 117,441,619 144,477,397 5.8 7.9
Packaging and paper 1 3,317,500 3,397,500 0.1 1.1
Paper and forest products 5 54,833,303 66,691,542 2.7 --
Publishing 5 45,491,318 54,719,248 2.2 0.3
Real estate investment trusts 4 31,011,962 37,912,500 1.5 4.9
Retail trade 9 145,127,983 156,851,521 6.3 4.4
Steel 2 30,086,875 25,090,625 1.0 --
Transportation 5 51,873,687 59,714,210 2.3 1.9
Miscellaneous -- -- -- -- 0.5
---- -------------- -------------- ------ ------
169 $1,814,427,366 $2,303,883,549 91.9% 89.0%
---- -------------- -------------- ------ ------
NET INVESTMENT ASSETS 175 $2,012,125,124 $2,506,785,758 100.0% 100.0%
==== ============== ============== ====== ======
</TABLE>
7
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
LARGEST PORTFOLIO CHANGES
October 1 to December 31, 1995
Shares
------------------
Holdings
ADDITIONS Increase 12/31/95
-------- --------
COMMON STOCKS
ALLTEL Corporation 500,000 500,000
Frontier Corporation 400,000 400,000
Intel Corporation 300,000 300,000
International Paper
Company 350,000 350,000
Lockheed Martin
Corporation 200,000 200,000
Lowe's Companies, Inc. 600,000 600,000
The Pep Boys--Manny,
Moe and Jack 500,000 500,000
RJR Nabisco Holdings
Corporation 500,000 500,000
Sara Lee Corporation 600,000 600,000
Teradyne, Inc. 500,000 500,000
Shares
------------------
Holdings
REDUCTIONS Decrease 12/31/95
-------- --------
COMMON STOCKS
Aetna Life and Casualty
Company 225,000 --
Bell Atlantic Corporation 300,000 --
Federal National Mortgage
Association 100,000 100,000
General Electric Company 200,000 500,000
NYNEX Corporation 500,000 --
PacifiCorp. 1,000,000 --
Procter & Gamble
Company 150,000 250,000
SCEcorp. 750,000 --
Southern Company 1,000,000 --
The Williams Companies,
Inc. 300,000 400,000
Largest portfolio changes are based on cost of purchases or proceeds from sales
of securities.
10 LARGEST HOLDINGS
December 31, 1995
<TABLE>
<CAPTION>
Increase (Decrease)
December 31, 1995 in Per Share Price
--------------------------- ----------------------
Cost Value For Since
(000s) (000s) 1995 Purchase
---------- ---------- --------- -----------
<S> <C> <C> <C> <C>
General Electric Company $ 16,079 $ 36,000 41.2% 123.9%
Colgate-Palmolive Company 23,199 31,613 10.8 36.3
Kimberly-Clark Corporation 17,211 28,963 63.9 68.3
Amoco Corporation 20,362 28,750 21.6 41.2
American International
Group, Inc. 10,386 27,750 (5.6) 167.2
Eastman Kodak Company 18,336 26,800 40.3 46.2
GTE Corporation 13,675 26,400 44.9 93.1
May Department Stores
Company 22,535 25,350 25.2 12.5
Morgan (J.P.) & Co., Inc. 18,721 24,075 28.6 28.6
Exxon Corporation 15,838 24,038 31.9 51.8
---------- ----------
$176,342 $279,739
========== ==========
</TABLE>
8
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
Tri-Continental is a closed-end investment company whose stock is listed on
the New York Stock Exchange. Unlike mutual funds, whose shares sell at net asset
value, the market price of Tri-Continental stock is set by the forces of supply
and demand. Therefore, the market price of Tri-Continental's stock can be above
its net asset value, selling at a PREMIUM, or below its net asset value, selling
at a DISCOUNT.
TRI-CONTINENTAL'S CURRENT DISCOUNT IN PERSPECTIVE
The chart below shows Tri-Continental's year-end premiums or discounts for
the 20 years ended December 31, 1995. During this period, the premium was as
high as 2.45% at December 31, 1986, and the discount was as wide as 25.12% on
December 31, 1980. The median discount was 13.75%. Tri-Continental's year-end
1995 discount of 17.97% is wider than the 16.14% discount at year-end 1994 and
is within the third quartile of the premium/discount range experienced in the
past 20 years.
[The following table represents a chart which appears in the printed report]
Premium/Discount Range
1976-1995
----------------------
1976 ... -21%
1977 ... -12%
1978 ... -22%
1979 ... -23%
1980 ... -25%
1981 ... -20%
1982 ... -8%
1983 ... -5%
1984 ... -2%
1985 ... -1%
1986 ... 2%
1987 ... -14%
1988 ... -18%
1989 ... -16%
1990 ... -13%
1991 ... -3%
1992 ... -9%
1993 ... -14%
1994 ... -16%
1995 ... -18%
Tri-Continental's discounts and premiums experienced in the past 20 years are
generally consistent with many other closed-end Funds with similar investment
objectives.
9
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
A PRUDENT WAY TO PROTECT AND INCREASE ASSETS
Regardless of the changes in the discount or premium, an investment in
Tri-Continental has been a good way to protect and increase assetsueven over
periods as short as five years. The chart below illustrates how a $10,000
investment grew in each five-year period in the past 20 years. The table lists
these periods in order of the greatest WIDENING of the discount to the greatest
NARROWING of the discount ("Percentage Point Difference").
<TABLE>
<CAPTION>
5-Year Premium/Discount Percentage Market Value of Cost of Living
- ---------------- --------------------- Point $10,000 at End Adjustment for Increase in
Holding Period Start End Difference of Period* $10,000 Buying Power
- ---------------- -------- -------- ---------- -------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dec. 31, 84-89 -1.91% -16.18% -14.27 $21,063 $11,975 $ 9,088
Dec. 31, 83-88 -4.69% -18.26% -13.57 16,128 11,895 4,233
Dec. 31, 85-90 -1.36% -13.11% -11.75 16,169 12,242 3,927
Dec. 31, 82-87 -7.58% -13.85% -6.27 18,826 11,824 7,002
Dec. 31, 86-91 +2.45% -2.87% -5.32 18,262 12,480 5,782
Dec. 31, 90-95 -13.11% -17.97% -4.86 18,079 11,480 6,599
Dec. 31, 75-80 -21.88% -25.12% -3.24 21,291 15,550 5,741
Dec. 31, 89-94 -16.18% -16.14% +0.04 14,618 11,872 2,746
Dec. 31, 76-81 -20.52% -20.44% +0.08 16,660 16,151 509
Dec. 31, 77-82 -12.01% -7.58% +4.43 25,115 15,717 9,398
Dec. 31, 88-93 -18.26% -13.60% +4.66 21,244 12,100 9,144
Dec. 31, 87-92 -13.85% -9.03% +4.82 21,152 12,296 8,856
Dec. 31, 78-83 -21.77% -4.69% +17.08 31,388 14,963 16,425
Dec. 31, 79-84 -22.54% -1.91% +20.63 26,287 13,729 12,558
Dec. 31, 81-86 -20.44% +2.45% +22.89 33,969 11,755 22,214
Dec. 31, 80-85 -25.12% -1.36% +23.76 26,834 12,665 14,169
*Adjusted for the effect of the 1992 rights offering.
</TABLE>
During the five-year holding period Dec. 31, 84-89, for example,
Tri-Continental's discount widened to 16.18% from 1.91%--a 14.27 percentage
point change. Even so, a $10,000 investment in Tri-Continental at the beginning
of this period (December 31, 1984) would have more than doubled to $21,063 at
the end of the period (December 31, 1989). To keep up with inflation (the
Consumer Price Index) in this five-year period, $10,000 would have had to
increase to $11,975. Therefore, a Tri-Continental investor's buying power would
have increased by $9,088 ($21,063-$11,975).
A narrowing of the discount is generally associated with even better results.
The five years ended December 31, 1985, for example, experienced the greatest
narrowing of the discount--by 23.76 percentage points. A $10,000 investment made
at the beginning of this period (December 31, 1980) was worth $26,834 at the end
of the period (December 31, 1985). To keep up with inflation in this five-year
period, $10,000 would have had to increase to $12,665. Therefore, a
Tri-Continental investor's buying power would have increased by $14,169
($26,834-$12,665).
The information provided is based on past performance, which is no guarantee
of future results, and excludes any commissions or costs associated with the
purchase of Tri-Continental shares. In addition, capital gain and dividend
distributions taken in additional shares are subject to personal income tax in
the year earned. The examples shown do not reflect the effect of such taxes.
THE EXAMPLES IN THE TABLE ASSUME THE INVESTMENT OF BOTH CAPITAL GAIN AND
DIVIDEND DISTRIBUTIONS IN ADDITIONAL SHARES--BOTH ARE IMPORTANT TO YOUR
PARTICIPATION IN THE FUTURE GROWTH OF BOTH CAPITAL AND INCOME PROVIDED BY
TRI-CONTINENTAL.
10
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
THE WAY TO BUILD YOUR CAPITAL INVESTMENT IN TRI-CONTINENTAL
In order for a Common Stockholder to fully realize the opportunity for
capital appreciation of his or her investment in Tri-Continental, capital gain
distributions must be invested in additional shares. Taking capital gain
distributions in cash, as opposed to investing them in additional shares, is
comparable to an investor selling an individual security at a profit and only
reinvesting the original cost of the investment. Such a strategy would maintain
only the value of the investor's portfolio at the original investment amount. Of
course, the portfolio's value would also reflect any unrealized gains or losses.
The following table illustrates how investing capital gain distributions in
additional shares contributes to the capital appreciation of an investment in
Tri-Continental. As an example of how to use this table, let's look at 1,000
shares of Tri-Continental purchased on December 31, 1975, at a cost of $18.50
per share ($18,500). In 1976, the realized capital gain distribution of $0.66
per share would have been worth $660-enough to purchase an additional 30.88
shares. Had this process of investing capital gain distributions in additional
shares continued, by the end of 1995 the initial 1,000 share purchase would have
grown to a holding of 6,060.37 shares. At the year-end 1995 market price of
$22.625, the market value of the initial $18,500 investment would have increased
to $137,116. By contrast, had the capital gain distributions not been invested
in additional shares over the 20-year period, the initial investment of $18,500
would be worth only $22,625 (1,000 shares x $22.625) at December 31, 1995.
<TABLE>
<CAPTION>
Year-End
Gain Paid New Shares Number of Year-End Year-End
Year Per Share Received Shares Market Price Market Value
- ---------- ---------- ------------ ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
1975 -- -- 1,000.00 $18.500 $ 18,500
1976 $0.66 30.88 1,030.88 22.000 22,679
1977 1.19 60.21 1,091.09 20.625 22,504
1978 1.21 71.36 1,162.45 17.625 20,488
1979 1.01 67.33 1,229.78 19.875 24,442
1980 1.08 64.78 1,294.56 23.625 30,584
1981 1.64 103.25 1,397.81 20.750 29,005
1982 2.72 211.23 1,609.04 26.875 43,243
1983 1.48 94.54 1,703.58 29.375 50,043
1984 4.46 324.17 2,027.75 24.875 50,440
1985 2.40 197.63 2,225.38 29.375 65,371
1986 6.96 572.44 2,797.82 28.625 80,088
1987 3.73 475.75 3,273.57 20.625 67,517
1988 1.25 205.88 3,479.45 19.250 66,979
1989 2.55 394.34 3,873.79 23.000 89,097
1990 1.60 280.14 4,153.93 21.375 88,790
1991 1.80 287.58 4,441.51 27.750 123,252
1992* 1.67 282.05 4,723.56 25.500 120,451
1993 1.80 360.84 5,084.40 23.750 120,754
1994 1.90 481.50 5,565.90 19.875 110,622
1995 2.01 494.47 6,060.37 22.625 137,116
*Adjusted for the effect of the 1992 rights offering.
</TABLE>
11
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
THE WAY TO INCREASE DIVIDEND INCOME
The following chart COMPARES the year-end annual dividend income paid on
1,000 shares of Tri-Continental purchased on December 31, 1975, at a total price
of $18,500, WITH and WITHOUT the capital gain distributions invested in
additional shares. Although the per-share dividends for these two strategies are
identical, the increase in shares due to the investment of capital gain
distributions has a significant impact on the total yearly dividend incomeuan
impact that builds over time. In 1995, the total dividend income was $4,063 for
the individual who had invested his or her capital gain distributions in
additional shares over the 20-year period. By contrast, for the individual who
failed to invest capital gain distributions in additional shares, the share
balance would have remained at 1,000 and just $730 in total income would have
been produced in 1995.
[The following table represents a chart which appears in the printed report]
GROWING DIVIDEND INCOME
Annual dividend income Annual divident income
with capital gains invested without capital gains invested
in additional shares. in additional shares.
1976 .............. $ 660 $ 660
1977 .............. $1,080 $ 990
1978 .............. $1,230 $1,060
1979 .............. $1,300 $1,060
1980 .............. $1,471 $1,140
1981 .............. $1,601 $1,150
1982 .............. $1,731 $1,080
1983 .............. $1,851 $1,090
1984 .............. $2,290 $1,130
1985 .............. $2,310 $1,040
1986 .............. $2,351 $ 970
1987 .............. $2,490 $ 890
1988 .............. $2,650 $ 810
1989 .............. $2,920 $ 840
1990 .............. $3,330 $ 860
1991 .............. $3,240 $ 780
1992 .............. $3,500 $ 780
1993 .............. $3,771 $ 800
1994 .............. $4,011 $ 790
1995 .............. $4,063 $ 730
*Adjusted for the effect of the 1992 rights offering.
THE WAY TO MAXIMIZE VALUE AND FUTURE INCOME
For those individuals who do not need current income, reinvesting dividend
income as well as capital gain distributions produces an even more rapid
accumulation of Tri-Continental shares with a commensurate increase in both
value and future income. This chart illustrates how an investment in
Tri-Continental accumulates over a 20-year period through the investment of
capital gain distributions ONLY, and through the investment of BOTH dividends
and capital gains.
<TABLE>
<CAPTION>
BUILDING WEALTH AND INCOME
No Investment Invest Capital Invest Capital Gains
of Distributions Gains Only and Dividends
---------------- -------------- --------------------
<S> <C> <C> <C>
1000.00 6060.37 13656.15
Market Value at December 31, 1995 $22,625.00 $137,116.00 $308,970.00
1995 Dividend Income $ 730.00 $ 4,063.00 $ 8,981.00
</TABLE>
*Adjusted for the effect of the 1992 rights offering.
Had you choosen to invest BOTH capital gain and dividend distributions in
additional shares, at the end of 1995 you would have had 13,656.15 shares with a
total market value of $308,970, and $8,981 in total income would have been
produced in 1995.
12
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
STOCKHOLDER SERVICES
Tri-Continental provides a number of services to make maintaining an investment
in its Common Stock more convenient.
PURCHASES OF COMMON STOCK. Under the Automatic Dividend Investment and Cash
Purchase Plan, and other Stockholder plans, purchases of Common Stock were made
by the Corporation in the open market and from Stockholders participating in
withdrawal plans to satisfy Plan requirements. Those shares were then sold to
Stockholders using the Plan. During 1995, 1,890,436 shares were purchased by
Stockholders through the Plan.
The Corporation may make additional purchases of its Common Stock in the open
market at such prices and in such amounts as the Board of Directors may deem
advisable. No such additional purchases were made during 1995.
INDIVIDUAL RETIREMENT ACCOUNT TRUST (IRA) is available to individuals under age
70 1/2 who have earned income. The maximum annual deductible individual
contribution is $2,000. A married person with a non-working spouse may set aside
$2,250 annually, while a working couple may shelter up to $4,000 a year. If your
adjusted gross income as a single person exceeds $25,000 a year, or as a married
couple filing jointly exceeds $40,000, and you or your spouse are participating
in an employer's retirement plan, your deduction for the IRA contribution is
reduced or eliminated. To the extent that your deduction for an IRA contribution
is reduced, you will be able to make a non-deductible contribution, the earnings
on which accumulate tax-free. The IRA allows you to invest for your retirement,
to defer taxes on dividends and gain distributions, and to provide benefits for
your spouse, if you wish.
ROLLOVER IRAS. You may be eligible to roll over a distribution of assets
received from another IRA, a qualified employee benefit plan, or tax-deferred
annuity into an IRA with Tri-Continental. To avoid a tax penalty, the transfer
to a Rollover IRA must occur within 60 days of receipt of the qualifying
distribution. However, if you do not make a direct transfer of a distribution
from a qualified employee benefit plan or a tax-deferred annuity to a Rollover
IRA, the payor of the distribution must withhold 20% of the distribution.
RETIREMENT PLANNING -- QUALIFIED PLANS. Unincorporated businesses and the
self-employed may take advantage of the same benefits in their retirement plans
that were previously available only to corporations. Maximum contribution levels
are 25% of earned income (reduced by plan contributions), up to $30,000 per
participant for pension plans, and 15%, up to $30,000, for profit-sharing plans.
For retirement plan purposes, no more than $150,000 may be taken into account as
earned income under the plan in 1995 and future years (subject to adjustments to
reflect cost of living increases). Social Security integration and employee
vesting schedules are also available as options in the Tri-Continental prototype
retirement plans. Although you already may be participating in an employer's
retirement plan, you may be eligible to establish another plan based upon income
from other sources, such as director's fees.
13
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
RETIREMENT PLAN SERVICES provides information about our prototype retirement
plans. The toll-free telephone number is (800) 445-1777 in the Continental U.S.
GIFTS FREE OF FEDERAL TAX are often made using Tri-Continental Common Stock. You
may give as much as $10,000 a year to as many individuals as desired free of
federal gift tax, and a married couple may give up to $20,000 a year.
THE AUTOMATIC CASH WITHDRAWAL PLAN enables owners of Common shares with a market
value of $5,000 or more to receive a fixed amount from their investment at
regular intervals. Investors use the plan to supplement current or retirement
income, for educational expenses, or for other purposes.
FEDERAL TAXES
Quarterly dividends paid on both the Preferred and Common Stocks for 1995, and
the distribution from net short-term gain of $0.15 per Common share paid on
December 27, are subject to federal income tax as "ordinary income." Under the
Internal Revenue Code, 63% of such 1995 ordinary dividend income paid to Common
and Preferred Stockholders qualifies for the dividend received deduction
available to corporate stockholders. In order to claim the dividend received
deduction on these distributions, corporate stockholders must have held the
shares for at least 46 days.
The distribution of $1.86 from net long-term gain realized on investments
through October 31, 1995 was paid to Common Stockholders on December 27, 1995.
The long-term gain is designated as a "capital gain dividend" for federal income
tax purposes and is taxable to stockholders in 1995 as a long-term gain from the
sale of capital assets no matter how long Tri-Continental Common may have been
owned. However, if shares on which a capital gain distribution was received are
subsequently sold, and such shares have been held for six months or less from
date of purchase, any loss would be treated as long-term to the extent it
offsets the long-term gain distribution.
The tax cost basis of shares acquired by investing the December 27 capital gain
and dividend distributions in additional shares was $22.625 per share.
INTEREST ON U.S. GOVERNMENT OBLIGATIONS. Certain states do not tax dividends
paid by regulated investment companies, such as Tri-Continental, to the extent
the income is derived from interest on U.S. Government obligations. Tax
treatment varies by state, and it is suggested that you consult your tax
advisor. Information regarding that portion of dividends derived from interest
on U.S. Government obligations and other relevant information was included in
the 1995 Important Tax Information attached to your combined Form 1099-DIV/B.
14
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS AND LIABILITIES DECEMBER 31, 1995
ASSETS:
Investments at value:
Common stocks (cost--$1,651,233,536) $2,122,406,050
Convertible issues (cost--$163,193,830) 181,477,499
Tri-Continental Financial Division
(cost--$25,844,937) 31,049,388
Short-term holdings (cost--$103,000,000) 103,000,000 $2,437,932,937
--------------
Cash 58,174,154
Receivable for securities sold 23,323,577
Receivable for dividends and interest 8,445,860
Investment in, and expenses prepaid to, stockholder
service agent 412,720
Other 116,169
--------------
Total Assets $2,528,405,417
--------------
LIABILITIES:
Payable for securities purchased $ 18,995,694
Dividends payable 470,463
Accrued expenses, taxes, and other 2,153,502
--------------
Total Liabilities $ 21,619,659
--------------
NET INVESTMENT ASSETS $2,506,785,758
Preferred Stock, at $50 par value 37,637,000
--------------
NET ASSETS FOR COMMON STOCK $2,469,148,758
==============
Net Assets per share of Common Stock
(market value--$22.625) $27.58
======
CAPITAL STOCK AND SURPLUS DECEMBER 31, 1995
CAPITAL STOCK:
$2.50 Cumulative Preferred Stock, $50 par value,
asset coverage per share--$3,330.21
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--89,512,184 44,756,092
SURPLUS:
Capital surplus 1,877,880,677
Undistributed net investment income 880,537
Undistributed net realized gain 50,976,673
Net unrealized appreciation of investments 490,956,402
Net unrealized appreciation on translation of assets
and liabilities denominated in foreign currencies* 3,698,377
--------------
$2,506,785,758
==============
</TABLE>
- ------------
*Includes unrealized appreciation on translation of investments denominated in
foreign currencies of $3,704,232.
See notes to financial statements.
15
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
<S> <C> <C>
INVESTMENT INCOME:
Dividends ................................................ $ 61,308,556
Interest ................................................. 15,430,041
------------
Total investment income (net of foreign taxes
withheld of $554,215) ................................... $ 76,738,597
EXPENSES:
Management fee ........................................... $ 9,761,371
Stockholder account and
registrar services ...................................... 3,374,961
Stockholder reports and
communications .......................................... 560,981
Stockholders' meeting .................................... 215,871
Directors' fees and expenses ............................. 195,424
Auditing and legal fees .................................. 188,390
Registration ............................................. 72,361
Miscellaneous ............................................ 137,677
------------
Total expenses ............................................ 14,507,036
------------
NET INVESTMENT INCOME ..................................... $ 62,231,561*
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain on investments ......................... $219,387,584
Net realized gain from foreign
currency transactions ................................... 730,636
Net change in unrealized appreciation
of investments .......................................... 301,589,307
Net change in unrealized appreciation
on translation of assets and liabilities
denominated in foreign currencies ....................... 1,694,560
------------
Net gain on investments and foreign
currency transactions .................................... 523,402,087
-----------
INCREASE IN NET INVESTMENT ASSETS
FROM OPERATIONS .......................................... $585,633,648
============
</TABLE>
- ------------
*Net investment income available for Common Stock is $60,385,210, which is net
of Preferred Stock dividends of $1,881,850, and includes net realized ordinary
gains from foreign currency transactions of $35,499.
See notes to financial statements.
16
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended December 31,
---------------------------------
1995 1994
--------------- ---------------
OPERATIONS:
Net investment income ........................$ 62,231,561 $ 65,971,543
Net realized gain on investments ............. 219,387,584 149,714,043
Net realized gain (loss) from foreign
currency transactions ........................ 730,636 (285,314)
Net change in unrealized appreciation
of investments ............................... 301,589,307 (282,010,077)
Net change in unrealized appreciation on
translation of assets and liabilities
denominated in foreign currencies ............ 1,694,560 2,003,817
--------------- ---------------
Increase (decrease) in net investment
assets from operations .......................$ 585,633,648 $ (64,605,988)
--------------- ---------------
DISTRIBUTIONS TO STOCKHOLDERS:
Net investment income:
Preferred Stock (per share: $2.50 and $2.50) .$ (1,881,850) $ (1,881,850)
Common Stock (per share: $.73 and $.79) ...... (61,298,938) (62,142,379)
--------------- ---------------
$ (63,180,788) $ (64,024,229)
Net realized gain on investments:
Common Stock (per share: $2.01 and $1.90) .... (169,106,048) (149,879,009)
--------------- ---------------
Decrease in net investment assets
from distributions ...........................$ (232,286,836) $ (213,903,238)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Value of shares of Common Stock issued
at market price in gain distributions
(5,310,869 and 5,366,690 shares) .............$ 120,158,419 $ 107,671,901
Value of shares of Common Stock issued
for investment plans (1,890,436 and
2,106,411 shares) ............................ 42,080,503 46,577,919
Cost of shares purchased
for investment plans (1,837,697
and 2,142,604 shares) ........................ (40,543,318) (47,855,965)
Net proceeds from issuance of shares of
Common Stock upon exercise of
Warrants (4,470 and 824 shares) .............. 7,866 1,549
--------------- ---------------
Increase in net investment assets
from capital share transactions ..............$ 121,703,470 $ 106,395,404
--------------- ---------------
Increase (decrease) in net investment
assets .......................................$ 475,050,282 $ (172,113,822)
NET INVESTMENT ASSETS:
Beginning of year ............................ 2,031,735,476 2,203,849,298
--------------- ---------------
End of year (including undistributed
net investment income of $880,537
and $1,794,265) ..............................$ 2,506,785,758 $ 2,031,735,476
=============== ===============
__________
See notes to financial statements.
17
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS December 31, 1995
Shares Value
__________ ____________
COMMON STOCKS - 84.7%
<S> <C> <C>
AEROSPACE - 3.7%
BOEING COMPANY 225,000 $ 17,634,375
Aircraft manufacturer
GENERAL MOTORS CORPORATION CLASS "H" 400,000 19,650,000
Diversified aerospace manufacturer--missiles, satellites,
and communication systems
LOCKHEED MARTIN CORPORATION 200,000 15,800,000
Missiles and space systems, aeronautical systems, technology services
LORAL CORPORATION 600,000 21,225,000
Military electronic equipment
UNITED TECHNOLOGIES CORPORATION 200,000 18,975,000
Manufacturer of elevators, jet engines, flight systems, and
automotive parts
------------
$ 93,284,375
------------
AUTOMOTIVE AND RELATED - 2.6%
AUTOLIV (ADRs)+* 135,000 $ 7,897,500
Swedish supplier of safety restraint systems
DANA CORPORATION 400,000 11,700,000
Original equipment for trucks; fluid power systems
EATON CORPORATION 225,000 12,065,625
Equipment for trucks and automobiles
GENUINE PARTS COMPANY 330,000 13,530,000
Supplier of auto parts
HARLEY-DAVIDSON INC. 500,000 14,375,000
Motorcycle manufacturer
VOLKSWAGEN AG 20,000 6,696,833
Manufacturer of automobiles
------------
$ 66,264,958
------------
BASIC MATERIALS - 1.0%
ALUMINUM COMPANY OF AMERICA 200,000 $ 10,575,000
U.S. aluminum producer
NUCOR CORPORATION 200,000 11,425,000
Mini-mill steel production
POHANG IRON & STEEL (ADSs) 125,000 2,734,375
Korean steel manufacturer
------------
$ 24,734,375
------------
BUILDING AND CONSTRUCTION - 1.3%
FLUOR CORPORATION 300,000 $ 19,800,000
Engineering and related services
SHERWIN-WILLIAMS CORPORATION 300,000 12,225,000
Paints and allied products
------------
$ 32,025,000
------------
CHEMICALS - 4.3%
AIR PRODUCTS AND CHEMICALS 200,000 $ 10,550,000
Industrial gases and chemicals
BAYER AG 40,000 10,603,550
Producer of specialty chemicals, pharmaceuticals, and plastics
DOW CHEMICAL COMPANY 250,000 17,593,750
Diversified chemicals
</TABLE>
18
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
__________ ____________
<S> <C> <C>
CHEMICALS (continued)
EUROPEAN VINYLS CORPORATION 162,000 $ 4,201,119
Market leaders in PVC industry
GREAT LAKES CHEMICAL CORPORATION 300,000 21,600,000
Specialty chemicals
MONSANTO COMPANY 150,000 18,375,000
Fat substitutes, herbicides, industrial chemicals, pharmaceuticals
MORTON INTERNATIONAL, INC. 350,000 12,556,250
Adhesives, coatings, and specialty products
OLIN CORPORATION 150,000 11,137,500
Chemicals; defense products and ammunition; metals
------------
$106,617,169
------------
COMMUNICATIONS - 4.2%
ALCATEL ALSTHOM COMPAGNIE GENERALE D'ELECTRICITE 65,000 $ 5,593,193
French developer of equipment and systems for
public telecommunications
ALLTEL CORPORATION 500,000 14,750,000
Telephone utility
AMERICAN TELEPHONE & TELEGRAPH COMPANY 300,000 19,425,000
INTERNATIONAL AND DOMESTIC TELECOMMUNICATIONS SERVICES
FRONTIER CORPORATION 400,000 12,000,000
Telephone utility
GTE CORPORATION 600,000 26,400,000
Telephone systems and equipment
INDOSAT (ADRs) 31,200 1,138,800
International telecommunications to the Indonesian market
TELE DANMARK (ADSs) 380,000 10,497,500
Domestic and international telephone services
in Denmark
TELECOM ITALIA-DI RISP 2,526,000 3,089,101
Provider of the whole spectrum of
telecommunications services throughout Italy
TELECOM ITALIA MOBILE-DI RISP 2,526,000 2,656,436
Provider of the whole spectrum of mobile
telecommunications services throughout Italy
U.S. WEST, INC. 300,000 10,725,000
Telephone utility
------------
$106,275,030
------------
COMPUTER AND BUSINESS SERVICES - 2.4%
FIRST DATA CORPORATION 250,000 $ 16,718,750
Information processing services
HEWLETT-PACKARD COMPANY 100,000 8,375,000
Computers and peripherals
INTEL CORPORATION 300,000 17,043,750
Semiconductors/memory circuits
MICROSOFT CORPORATION* 150,000 13,171,875
Computer software
OLIVETTI & C SPA 6,500,000 5,210,642
PCs, minicomputers, workstations, and peripherals
------------
$ 60,520,017
------------
</TABLE>
19
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
__________ ____________
<S> <C> <C>
CONSUMER GOODS AND SERVICES - 12.7%
ADIDAS AG 115,960 $ 6,118,878
Sporting equipment, footware
ALLIED-DOMECQ PLC 870,000 7,088,075
International food, drink, and hospitality group
B.A.T. INDUSTRIES PLC 1,440,000 12,681,718
UK financial services and tobacco company
THE CLOROX COMPANY 250,000 17,906,250
Household products and specialty tools
COCA-COLA COMPANY 200,000 14,850,000
Soft drinks, consumer products
COLGATE-PALMOLIVE COMPANY 450,000 31,612,500
HOUSEHOLD AND PERSONAL CARE PRODUCTS
CPC INTERNATIONAL INC. 300,000 20,587,500
International food company
EASTMAN KODAK COMPANY 400,000 26,800,000
Film, chemicals, and health care products
GENERAL MILLS, INC. 200,000 11,550,000
Consumer foods and restaurants
GILLETTE COMPANY 300,000 15,637,500
Personal care products
HASBRO, INC. 500,000 15,500,000
Manufacturer of games and hobby products; infant products
LIZ CLAIBORNE, INC. 600,000 16,650,000
Designer and distributor of women's apparel
PEPSICO, INC. 275,000 15,365,625
Soft drinks and consumer products
PHILIP MORRIS COMPANIES, INC. 175,000 15,837,500
Tobacco, food, and beverage manufacturer
PROCTER & GAMBLE COMPANY 250,000 20,750,000
Household and personal care products
RJR Nabisco Holdings Corporation 500,000 15,437,500
PROCESSED FOODS, CONSUMER PRODUCTS
RUBBERMAID INCORPORATED 800,000 20,400,000
Manufacturer of plastic and rubber household products
SARA LEE CORPORATION 600,000 19,125,000
Processed foods, consumer products
SCHWEITZER-MAUDUIT INTERNATIONAL, INC. 35,000 809,375
Manufacturer of cigarette paper
WENDY'S INTERNATIONAL, INC. 700,000 14,875,000
Fast food restaurant franchise
------------
$319,582,421
------------
DIVERSIFIED - 2.6%
ALLIED-SIGNAL, INC. 400,000 $ 19,000,000
Aerospace and automotive materials
CORNING, INC. 350,000 11,200,000
Specialty glass products
DOVER CORPORATION 350,000 12,906,250
Elevators; petroleum equipment; and industrial products
TENNECO, INC. 456,300 22,643,887
------------
Natural gas pipelines; shipbuilding; auto parts; chemicals; plastic packaging $ 65,750,137
------------
</TABLE>
20
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
__________ ____________
<S> <C> <C>
DRUGS AND HEALTH CARE - 6.6%
ABBOTT LABORATORIES 300,000 $ 12,525,000
Diversified health care products
AMERICAN HOME PRODUCTS CORPORATION 200,000 19,400,000
Pharmaceuticals, food, and housewares
BAUSCH & LOMB, INCORPORATED 565,000 22,388,125
Sunglasses, eye care products
BRISTOL-MYERS SQUIBB COMPANY 250,000 21,468,750
Health and personal care products
GUIDANT CORPORATION 450,000 19,012,500
Cardiac rhythm management and coronary artery disease intervention
MERCK & CO., INC. 300,000 19,725,000
Pharmaceutical company
PHARMACIA & UPJOHN, INC. 200,000 7,750,000
Pharmaceutical manufacturer
UNITED HEALTHCARE CORPORATION 350,000 22,925,000
National managed health care company
WARNER-LAMBERT COMPANY 200,000 19,425,000
Drug, toiletries, and food manufacturer
------------
$164,619,375
------------
ELECTRIC AND GAS UTILITIES - 2.3%
BRITISH GAS PLC (ADRs) 115,000 $ 4,485,000
Major gas supplier in UK
CHINA LIGHT & POWER CO. LTD. (ADRs) 1,000,000 4,604,200
Electric utility in Hong Kong and China
EMPRESA NACIONAL DE ELECTRICIDAD (ADRs) 132,000 7,557,000
Major electric utility in Spain
HUANENG POWER INTERNATIONAL (ADRs)* 220,000 3,162,500
Flagship power company of China
SONAT INC. 550,000 19,593,750
Oil and gas production and pipelines
THE WILLIAMS COMPANIES, INC. 400,000 17,550,000
Oil and gas production and pipelines
------------
$ 56,952,450
------------
ELECTRONICS - 2.3%
AMP INC. 320,000 $ 12,280,000
Manufacturer of electronic connectors and systems
APPLIED MATERIALS, INC. 350,000 13,759,375
World's largest supplier of semiconductor fabrication equipment
MOTOROLA INC. 275,000 15,675,000
Producer of semiconductors and communications equipment
PHILIPS ELECTRONICS N.V. (ADRS) 100,000 3,587,500
Consumer and industrial electronics
TERADYNE, INC. 500,000 12,500,000
Semiconductor test equipment
------------
$ 57,801,875
------------
ENERGY - 7.7%
AMOCO CORPORATION 400,000 $ 28,750,000
Oil and gas producer
ANADARKO PETROLEUM COMPANY 193,000 10,446,125
Oil and gas exploration, development, and production
</TABLE>
21
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
__________ ____________
<S> <C> <C>
ENERGY (continued)
ATLANTIC RICHFIELD COMPANY 125,000 $ 13,843,750
Oil producer and West Coast marketer
BAKER HUGHES INCORPORATED 500,000 12,187,500
Oil service company
ENRON CORPORATION 500,000 19,062,500
Pipeline exploration and production
EXXON CORPORATION 300,000 24,037,500
Integrated oil and gas company
PANHANDLE EASTERN CORPORATION 750,000 20,906,250
OIL AND GAS PRODUCTION AND PIPELINES
SCHLUMBERGER LTD. 300,000 20,775,000
Worldwide energy services
TEXACO INC. 300,000 23,550,000
International oil company
TOTAL S.A. CLASS "B" 75,000 5,051,972
International oil enterprise
UNION PACIFIC RESOURCES GROUP INC. 200,000 5,075,000
Producer of natural gas
USX-MARATHON GROUP, INC. 500,000 9,750,000
Worldwide oil and gas producer and refiner
------------
$193,435,597
------------
ENTERTAINMENT AND LEISURE - 1.3%
DISNEY (WALT) COMPANY 300,000 $ 17,700,000
Film entertainment, amusement parks, and
other forms of leisure related activities
NEWS CORP. LTD. (ADRs) 260,000 5,557,500
Worldwide media and television provider
NEWS CORP. LTD. (ADRs--Voting Preference Shares) 130,000 2,502,500
Worldwide media and television provider
U.S. WEST MEDIA, INC. 300,000 5,700,000
Cable television operator
------------
$ 31,460,000
------------
ENVIRONMENTAL MANAGEMENT - 0.3%
BROWNING-FERRIS INDUSTRIES, INC. 250,000 $ 7,375,000
------------
Solid- and liquid-waste management services
FINANCE AND INSURANCE - 9.3%
AMERICAN INTERNATIONAL GROUP, INC. 300,000 $ 27,750,000
International insurance holding company
AXA S.A. 75,000 5,044,329
Provider of financial services and insurance
BANKAMERICA CORPORATION 300,000 19,425,000
Largest commercial bank in California and Western states
BANK OF NEW YORK COMPANY, INC. 400,000 19,500,000
Commercial bank
CORPORACION BANCARIA DE ESPANA, S.A. (ADRs) 489,000 9,841,125
Spanish banking and financial services company
FEDERAL NATIONAL MORTGAGE ASSOCIATION 100,000 12,412,500
Mortgage financing
GENERAL RE CORPORATION 140,000 21,700,000
Largest property casualty re-insurer in the US
</TABLE>
22
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
_________ ____________
<S> <C> <C>
FINANCE AND INSURANCE (continued)
Grupo Financiero Banamex Accival, S.A. Class "B" 2,176,000 $ 3,626,196
One of the largest financial companies in Mexico
involved in banking and stockbroking
HOUSEHOLD INTERNATIONAL, INC. 350,000 20,693,750
Consumer loans, credit cards, equity loans, and life insurance
INTERNATIONALE NEDERLANDEN BANK N.V. 166,846 11,123,067
Largest banking and insurance services group in the Netherlands
MBNA CORPORATION 300,000 11,062,500
Issuer of bank credit cards
MORGAN (J.P.) & CO., INC. 300,000 24,075,000
Commercial and wholesale banking, based in New York
ST. PAUL COMPANIES 200,000 11,125,000
Property and casualty insurance
SOCIETE GENERALE 35,711 4,403,374
Provider of full banking and financial services
STATE STREET BOSTON CORPORATION 350,000 15,750,000
Northeast bank
TRAVELERS INCORPORATED 250,000 15,718,750
Broad-based financial services company
------------
$233,250,591
------------
MANUFACTURING AND
INDUSTRIAL EQUIPMENT - 5.3%
BBC BROWN BOVERI (ADRs) 88,500 $ 10,306,347
Manufacturer of heavy equipment for electric power
generation and distribution
BTR PLC 1,300,000 6,637,262
UK Global manufacturer of industrial goods
EMERSON ELECTRIC CO. 250,000 20,437,500
Electric motors, hand-held tools, and miscellaneous electric equipment
GENERAL ELECTRIC COMPANY 500,000 36,000,000
Supplier of electrical equipment and other industrial and
consumer products
GENERAL SIGNAL CORPORATION 450,000 14,568,750
Capital goods producer
ILLINOIS TOOL WORKS, INC. 275,000 16,225,000
Manufacturer of fasteners, tools, and plastic items
MANNESMANN 15,000 4,766,794
Plant and machinery construction; automotive technology
MINNESOTA MINING & MANUFACTURING COMPANY 300,000 19,875,000
Consumer and industrial goods and services
PACIFIC DUNLOP LTD. 1,500,000 3,509,494
Australian manufacturer of a wide range of products
------------
$132,326,147
------------
PAPER AND FOREST PRODUCTS - 2.7%
BOWATER INCORPORATED 250,000 $ 8,875,000
Manufacturer of newsprint and coated paper
INTERNATIONAL PAPER COMPANY 350,000 13,256,250
Paper and paper products; specialty products; wood and timber
KIMBERLY-CLARK CORPORATION 350,000 28,962,500
Consumer paper products; newsprint
</TABLE>
23
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
__________ ____________
<S> <C> <C>
PAPER AND FOREST PRODUCTS (continued)
LOUISIANA-PACIFIC CORPORATION 500,000 $ 12,125,000
Lumber, plywood, and pulp
STORA KOPPARBERGS CLASS "B" 290,000 3,472,792
Manufactuer of forestry products
------------
$ 66,691,542
------------
PUBLISHING - 2.2%
DONNELLEY (R.R.) & SONS COMPANY 300,000 $ 11,812,500
Printing and computer services
GANNET CO., INC. 200,000 12,275,000
Newspapers, radio and TV broadcasting
READER'S DIGEST ASSOCIATION INC. CLASS "A" 250,000 12,812,500
Publisher of periodicals, books, videos, and records
REED ELSEVIER 650,000 8,650,498
Global printer and publisher of professional trade journals
and magazines
TRIBUNE CO. 150,000 9,168,750
Book publishing, newsprint operations
------------
$ 54,719,248
------------
REAL ESTATE INVESTMENT TRUSTS - 1.5%
AVALON PROPERTIES, INC. 500,000 $ 10,750,000
REIT focusing on apartment properties in the Eastern United
States
KIMCO REALTY CORPORATION 450,000 12,262,500
High-quality REIT operator of shopping centers
SECURITY CAPITAL INDUSTRIAL TRUST 400,000 7,000,000
Real estate investment trust
SECURITY CAPITAL PACIFIC TRUST 400,000 7,900,000
Real estate investment trust involved in multi-family residential
properties
------------
$ 37,912,500
------------
RETAIL TRADE - 6.3%
AMERICAN STORES COMPANY 750,000 $ 20,062,500
Food retailer
DILLARD DEPARTMENT STORES INC. 400,000 11,400,000
Major department store chain
LOWE'S COMPANIES, INC. 600,000 20,100,000
Building products, retail and wholesale
MAY DEPARTMENT STORES COMPANY 600,000 25,350,000
LARGE DEPARTMENT STORE CHAIN
NORDSTROM, INC. 400,000 16,150,000
Department store chain
THE PEP BOYS - MANNY, MOE AND JACK 500,000 12,812,500
Auto parts store
SEARS, ROEBUCK & COMPANY 400,039 15,601,521
Major department store
WAL-MART STORES, INC. 1,000,000 22,375,000
Largest discount retail chain
WOOLWORTH CORPORATION 1,000,000 13,000,000
Discount and variety retailer
------------
$156,851,521
------------
</TABLE>
24
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares
or Prin. Amt. Value
_____________ ____________
<S> <C> <C>
TRANSPORTATION - 2.1%
CALIBER SYSTEM, INC. 355,000 shs. $ 17,306,250
Motor carrier
CONRAIL INC. 250,000 17,500,000
Freight railroad system
JURONG SHIPYARD LTD. 425,000 3,275,472
Leading ship repair company in Singapore
NORFOLK SOUTHERN CORPORATION 200,000 15,875,000
Railroad holding company, motor carrier
--------------
$ 53,956,722
--------------
TOTAL COMMON STOCKS
(Cost: $1,651,233,536) $2,122,406,050
--------------
CONVERTIBLE ISSUES - 7.2%
CONVERTIBLE DEBENTURES - 3.4%
AUTOMOTIVE AND RELATED - 0.8%
Exide Corporation, 2.90%, 12/15/2005+ $14,000,000 $ 10,115,000
Magna International Inc., 5%, 10/15/2002 10,000,000 10,175,000
-------------
$ 20,290,000
-------------
COMPUTER AND BUSINESS SERVICES - 0.5%
EMC Corporation, 4 1/4%, 1/1/2001 13,000,000 $ 12,935,000
-------------
DIVERSIFIED - 0.9%
Cooper Industries Inc., 7.05%, 1/1/2015 10,000,000 $ 10,350,000
-------------
MascoTech Inc., 4 1/2%, 12/15/2006 15,000,000 11,737,500
-------------
$ 22,087,500
-------------
FINANCE AND INSURANCE - 0.4%
AXA S.A., 6%, 1/1/2001 3,614,185 $ 4,748,136
Liberty Life International, 6 1/2%, 9/30/2004 3,500,000 4,602,500
-------------
$ 9,350,636
-------------
MANUFACTURING AND
INDUSTRIAL EQUIPMENT - 0.5%
Teco Electrical and Machinery, 2 3/4%, 4/15/2004 3,000,000 2,351,250
TriMas Corporation, 5%, 8/1/2003 10,000,000 9,800,000
-------------
$ 12,151,250
-------------
PACKAGING AND PAPER - 0.1%
Land and General Berhad, 4 1/2%, 7/26/2004 3,000,000 $ 3,397,500
_____________
TRANSPORTATION - 0.2%
Nippon Yusen, 2%, 9/29/2000 4,879,227 $ 5,757,488
-------------
TOTAL CONVERTIBLE DEBENTURES
(COST: $83,556,270) $ 85,969,374
-------------
</TABLE>
25
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS (Continued) December 31, 1995
Shares Value
__________ ____________
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS - 3.8%
COMPUTER AND BUSINESS SERVICES - 0.9%
General Motors Corporation Series "C", $3.25 325,000 $ 23,806,250
-------------
DIVERSIFIED - 0.5%
Corning Inc. (Delaware), 6% 250,000 $ 12,593,750
-------------
FINANCE AND INSURANCE - 1.4%
Citicorp, $5.375+ 100,000 $ 18,312,500
Travelers Incorporated, 5 1/2% 180,000 15,705,000
_____________
$ 34,017,500
-------------
STEEL - 1.0%
AK Steel Holdings Corporation, 7% 350,000 $ 11,965,625
Bethlehem Steel Corporation, $3.50+ 300,000 13,125,000
-------------
$ 25,090,625
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(COST: $79,637,560) $ 95,508,125
-------------
TOTAL CONVERTIBLE ISSUES
(COST: $163,193,830) $ 181,477,499
-------------
TRI-CONTINENTAL FINANCIAL DIVISION++ - 1.2%
(COST: $25,844,937) $ 31,049,388
_____________
SHORT-TERM HOLDINGS - 4.1%
(COST: $103,000,000) $ 103,000,000
-------------
TOTAL INVESTMENTS - 97.2%
(COST: $1,943,272,303) $2,437,932,937
OTHER ASSETS LESS LIABILITIES - 2.8% 68,852,821
--------------
NET INVESTMENT ASSETS - 100.0% $2,506,785,758
==============
</TABLE>
- ------------------------------------------
*Non-income producing security.
+Rule 144A security.
++Restricted securities, see note 6 to financial statements.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See notes to financial statements.
26
<PAGE>
<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, 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 statements 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 year from net investment income or net realized gains may
differ from their ultimate treatment for federal income tax purposes. These
differences primarily are caused by differences in the timing of the
recognition of certain components of income, expense or capital gain, and
the recharacterization of foreign exchange gains or losses to either
ordinary income or realized capital gain for federal income tax purposes.
Where such differences are permanent in nature, they are reclassified in
the components of net 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.
27
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 year
ended December 31, 1995, 1,837,697 shares were purchased from Plan participants
and on the open market at a cost of $40,543,318 which represented a weighted
average discount of 16.6% from the net asset value of those acquired shares. A
total of 1,890,436 shares were issued to Plan participants during the year for
proceeds of $42,080,503, a discount of 16.9% from the net asset value of those
shares.
At December 31, 1995, 209,491 shares of Common Stock were reserved for
issuance upon exercise of 15,472 Warrants, each of which entitled the holder to
purchase 13.54 shares of Common Stock at $1.66 per share. Assuming the exercise
of all Warrants outstanding at December 31, 1995, net investment assets would
have increased by $347,755 and the net asset value of the Common Stock would
have been $27.52 per share. The number of Warrants exercised during the years
1995 and 1994, was 350 and 69, respectively.
3. Purchases and sales of portfolio securities, excluding short-term
investments, amounted to $1,328,927,398 and $1,465,483,623, respectively. At
December 31, 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 transactions, amounted to $528,766,920
and $34,106,286, respectively.
4. At December 31, 1995, the Corporation owned short-term investments which
matured in less than 7 days.
5. 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
net assets of all the investment companies managed by the Manager. The
management fee for the year ended December 31, 1995, was equivalent to an annual
rate of 0.42% 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 $3,339,270 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 $85,000 were incurred by the Corporation for legal services of
Sullivan & Cromwell, a member of which firm is a director of the Corporation.
28
<PAGE>
<PAGE>
Notes to Financial Statements (continued)
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 annual cost of such fees and interest is included in
directors' fees and expenses, and the accumulated balance thereof at December
31, 1995, of $387,419 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.
6. At December 31, 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
December 31, 1995, are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Investments Acquisition Date(s) Cost Value
- ---------------------------------- ------------------ ----------- -----------
Tempest Reinsurance Company Ltd. 9/13/93 $10,000,000 $13,384,000
Water Street Corporate Recovery
Fund I, L.P. 10/9/90 to 12/22/95 1,193,271 972,563
WCAS Capital Partners II, L.P. 12/11/90 to 10/10/95 7,725,660 8,688,509
Whitney Subordinated Debt Fund, L.P. 7/12/89 to 12/22/95 6,926,006 8,004,316
----------- -----------
Total $25,844,937 $31,049,388
=========== ===========
</TABLE>
7. Following is a summary of unaudited quarterly results of operations, in
thousands of dollars except for per share amounts:
<TABLE>
<CAPTION>
For quarters ended in the year 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 31 June 30 Sept. 30 Dec. 31
--------- -------- --------- --------
Total investment income $ 18,606 $ 20,059 $ 17,445 $ 20,629
Net investment income for
Common Stock $ 14,661 $ 15,906 $ 13,331 $ 16,452
Per Common share $ 0.17 $ 0.19 $ 0.16 $ 0.20
Net realized and unrealized
investment gain $ 132,012 $159,391 $ 118,105 $113,894
Per Common Share $ 1.56 $ 1.88 $ 1.39 $ 1.34
</TABLE>
<TABLE>
<CAPTION>
For quarters ended in the year 1994
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 31 June 30 Sept. 30 Dec. 31
--------- -------- --------- --------
Total investment income $ 17,474 $ 20,844 $ 20,662 $ 20,697
Net investment income for
Common Stock $ 13,479 $ 16,919 $ 16,847 $ 16,845
Per Common share $ 0.17 $ 0.21 $ 0.21 $ 0.21
Net realized and unrealized
investment gain (loss) $(79,263) $(58,099) $ 48,127 $(41,343)
Per Common Share $ (1.00) $ (0.74) $ 0.60 $ (0.53)
</TABLE>
29
<PAGE>
<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 ratios of expenses to average net assets and net investment income to
average net assets for the years presented do not reflect the effect of
dividends paid to Preferred Stockholders.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
-------- -------- ------- -------- --------
PER SHARE OPERATING PERFORMANCE:
Net asset value,
beginning of year $ 23.70 $ 27.49 $ 28.03 $ 28.57 $ 24.60
-------- -------- ------- -------- --------
Net investment income .74 .83 .83 .81 .81
Net realized and unrealized
investment gain (loss) 6.14 (1.69) 1.46 1.19 5.79
Net realized and unrealized
gain on foreign currency transactions .03 .02 -- -- --
-------- -------- ------- -------- --------
Increase (decrease) from
investment operations 6.91 (.84) 2.29 2.00 6.60
Dividends paid on
Preferred Stock (.02) (.03) (.03) (.03) (.03)
Dividends paid on
Common Stock (.73) (.79) (.80) (.78) (.78)
Distribution from
net gain realized (2.01) (1.90) (1.80) (.70) (1.80)
Issuance of Common Stock
in gain distributions (.27) (.23) (.19) (.05) (.02)
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 3.88 (3.79) (.54) (.54) 3.97
-------- -------- ------- -------- --------
Net asset value,
end of year $ 27.58 $ 23.70 $ 27.49 $ 28.03 $ 28.57
======== ======== ======= ======== ========
</TABLE>
30
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
--------- -------- --------- --------- ----------
Adjusted net asset value,
end of year* $ 27.52 $23.65 $ 27.42 $ 27.95 $ 28.48
Market value, end of year $ 22.625 $19.875 $ 23.75 $ 25.50 $ 27.75
TOTAL INVESTMENT RETURN:
Based upon market value 27.95% (5.07)% 3.47% .61%+ 42.98%
Based upon net asset value 30.80% (2.20)% 8.95% 7.42%+ 27.91%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average
net assets .63% .64% .66% .67% .67%
Net investment income to
average net assets 2.71% 3.08% 2.88% 2.86% 2.90%
Portfolio turnover rate 62.28% 70.38% 69.24% 44.35% 49.02%
Net investment assets,
end of year (000's omitted):
For Common Stock $2,469,149 $1,994,098 $2,166,212 $2,088,102 $1,833,664
For Preferred Stock 37,637 37,637 37,637 37,637 37,637
---------- ---------- ---------- ---------- ----------
Total net investment assets $2,506,786 $2,031,735 $2,203,849 $2,125,739 $1,871,301
========== ========== ========== ========== ==========
</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.
See notes to financial statements.
31
<PAGE>
<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 December 31, 1995, the related
statements of operations for the year then ended and of changes in net
investment assets for the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended. 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
December 31, 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 December 31, 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
February 2, 1996
- --------------------------------------------------------------------------------
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
SUBADVISER
Seligman Henderson Co.
100 Park Avenue
New York, NY 10017
STOCKHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) TRI-1092 STOCKHOLDER
SERVICES
(800) 445-1777 RETIREMENT PLAN
SERVICES
(800) 622-4597 24-HOUR AUTOMATED
TELEPHONE ACCESS SERVICE
32
<PAGE>
<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
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum
Corporation
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)
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)
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman & Co.
Incorporated
--------------------
Member:
(1) Executive Committee
(2) Audit Committee
(3) Director Nominating Committee
(4) Board Operations Committee
- --------------------------------------------------------------------------------
Executive Officers
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
CHARLES C. SMITH, JR.
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
33
<PAGE>
<PAGE>
TRI-CONTINENTAL CORPORATION
MANAGED BY
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.
CETR12 12/95
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as `D'
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(1) Financial Statements: The following financial statements and
schedules of the Registrant are included in the Prospectus or the 1995
Annual Report to Stockholders of the Corporation, which are incorporated
by reference into the Statement of Additional Information, and are made
a part of this Registration Statement:
Assets and Liabilities, December 31, 1995; Capital Stock and Surplus,
December 31, 1995; Statement of Operations for the year ended December
31, 1995; Statement of Changes in Net Investment Assets for the years
ended December 31, 1995 and 1994; Portfolio of Investments, December 31,
1995; Table for the ten years ended December 31, 1995 under the caption
"Senior Securities - $2.50 Cumulative Preferred Stock" in the
Prospectus; Notes to Financial Statements; Financial Highlights for the
ten years ended December 31, 1995; Report of Independent Auditors.*
* All other schedules are omitted, because the information is included
elsewhere in the Prospectus or the Statement of Additional Information
or is not required.
(2) Exhibits: All Exhibits have been previously filed except those
marked with an asterisk (*) which are incorporated herein.
(a) Articles of Amendment to the Charter of Registrant.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 30, 1993.)
(b) By-laws of the Registrant.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(d-1) Specimen certificates of Common Stock.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(d-2) Specimen certificates of $2.50 Cumulative Preferred Stock.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(d-3) Specimen of Warrant of the Registrant.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(d-4) Form of Subscription Certificate - Subscription Right for shares
of Common Stock.
(Incorporated by Reference to Registrant's Registration
Statement filed on September 17, 1992.)
(d-5) The Registrant's Charter is the constituent instrument defining
the rights of the $2.50 Cumulative Preferred Stock, par value
$50, and the Common Stock of the Registrant. (Incorporated by
Reference to Registrant's Post-Effective Amendment #1 filed on
March 6, 1981.)
(e) Dividend Reinvestment Plan.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(g) Amended Management Agreement between Registrant and J. & W.
Seligman & Co. Incorporated.
(Incorporated by Reference to Registrant's Registration Statement
filed April 13, 1995.)
(g-1) Form of Subadvisory Agreement between the Manager and Seligman
Henderson Co.
(Incorporated by Reference to Registrant's Registration
Statement filed April 13, 1995.)
(i-1) Amendments to the Amended Retirement Income Plan of J. & W.
Seligman & Co. Incorporated and Trust.
(Incorporated by Reference to Registrant's Pre-Effective
Amendment #1 filed on April 29, 1994.)
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(i-2) Amendments to the Amended Employees' Thrift Plan of Union Data
Service Center, Inc. and Trust.
(Incorporated by Reference to Registrant's Pre-Effective
Amendment #1 filed on April 29, 1994.)
(j-1) Copy of Custodian Agreement between Registrant and Investors
Fiduciary Trust Company.
(Incorporated by Reference to Registrant's Registration
Statement filed on March 20, 1991.)
(k) Copy of Agreement pursuant to Rule 11(a)2-2(T) and the
Securities Exchange Act of 1934, as amended.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(l) Opinion and Consent of Counsel*
(n) Consent of Independent Auditors.*
(q-1) Copy of amended Individual Retirement Account Trust.
(Incorporated by Reference to Registrant's Pre-Effective
Amendment #1 filed on April 29, 1992.)
(q-2) Copy of Basic Business Retirement Plans.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(q-3) Copy of Comprehensive Business Retirement Plans.
(Incorporated by Reference to Registrant's Post-Effective
Amendment #1 filed on March 6, 1981.)
(q-4) Copy of amended J. & W. Seligman & Co. Incorporated (SARSEP)
Salary Reduction and Other Elective Simplified Employee
Pension-Individual Retirement Accounts Contribution Agreement
(under 401(k) of the Internal Revenue Code).
(Incorporated by Reference to Registrant's Pre-Effective
Amendment #1 filed on April 29, 1992.)
(r) Financial Data Schedule meeting the requirements of Rule 483
under the Securities Act of 1933.*
(x) Power of Attorney
(Incorporated by Reference to Registrant's Registration
Statement filed on October 28, 1993.)
Item 25. Marketing Arrangements: Not Applicable
<TABLE>
<S> <C> <C>
Item 26. Other Expenses of Issuance and Distribution:
Registration fees $20,636.21
NYSE listing fees -0-
Registrar fees -0-
Legal fees -0-
Accounting fees -0-
Miscellaneous (mailing, etc.) -0-
</TABLE>
Item 27. Persons Controlled by or Under Common Control with Registrant:
Seligman Data Corp., a New York Corporation, is owned by the
Registrant and certain associated investment companies. The
Registrant's investment in Seligman Data Corp. is recorded at a cost
of $43,681.
Item 28. Number of Holders of Securities As of March 31, 1996:
<TABLE>
<S> <C>
Title of Class Number of Recordholders
-------------- -----------------------
<S> <C>
$2.50 Cumulative Preferred 777
Common Stock 46,424
Warrants 197
</TABLE>
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
Item 29. Indemnification: Incorporated by Reference to Registrant's
Registration Statement No. 2-67086 on Form N-2 dated March 27, 1980;
and Registration Statement No. 33-13772 on Form N-2 dated April 19,
1988.
Item 30. Business and Other Connections of Investment Adviser: J. & W. Seligman
& Co. Incorporated, a Delaware corporation ("Manager"), is the
Registrant's investment manager. The Manager also serves as investment
manager to sixteen associated investment companies. They are Seligman
Capital Fund, Inc., Seligman Cash Management Fund, Inc., Seligman
Common Stock Fund, Inc., Seligman Communications and Information Fund,
Inc., Seligman Frontier Fund, Inc., Seligman Growth Fund, Inc.,
Seligman Henderson Global Fund Series, Inc., Seligman High Income Fund
Series, Seligman Income Fund, Inc., Seligman New Jersey Tax-Exempt
Fund, Inc. Seligman Pennsylvania Tax-Exempt Fund Series, Seligman
Portfolios, Inc., Seligman Quality Municipal Fund, Inc., Seligman
Select Municipal Fund, Inc., Seligman Tax-Exempt Fund Series, Inc. and
Seligman Tax-Exempt Series Trust.
Seligman Henderson Co. (the "Subadviser") also serves as subadviser to
eight other associated investment companies. They are Seligman Capital
Fund, Inc., Seligman Common Stock Fund, Inc., Seligman Communications
and Information Fund, Inc., Seligman Frontier Fund, Inc., Seligman
Growth Fund, Inc., Seligman Henderson Global Fund Series, Inc.,
Seligman Income Fund, Inc. and the Global and Global Smaller Companies
Portfolios of Seligman Portfolios, Inc.
The Manager and Subadviser have an advisory service division which
provides investment management or advice to private clients. The list
required by this Item 28 of officers and directors of the Manager and
the Subadviser, respectively, together with information as to any
other business, profession, vocation or employment of a substantial
nature engaged in by such officers and directors during the past two
years, is incorporated by reference to Schedules A and D of Form ADV,
filed by the Manager and the Subadviser, respectively, pursuant to the
Investment Advisers Act of 1940 (SEC File No. 801-5798 and SEC File
No. 801-4067) both of which were filed on December 5, 1995.
Item 31. Location of Accounts and Records:
Custodian: Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
AND
Tri-Continental Corporation
100 Park Avenue
New York, New York 10017
Item 32. Management Services: Seligman Data Corp. ("SDC"), the Registrant's
shareholder service agent, has an agreement with First Data Investor
Services Group ("FDISG") pursuant to which FDISG provides a data
processing system for certain shareholder accounting and recordkeeping
functions performed by SDC, which commenced in July 1990. For the last
three fiscal years ended December 31, 1995, the approximate cost of
these services on a fiscal year basis were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Tri-Continental Common Stock $252,000 $250,773 $ 317,700
Tri-Continental Preferred Stock 3,900 4,597 6,000
Tri-Continental Warrants 1,100 1,351 2,000
Tri-Continental Rights -0- -0- 56,000
</TABLE>
<PAGE>
<PAGE>
PART C. OTHER INFORMATION
Item 33. Undertakings:
I. The Registrant undertakes to suspend the offering of shares until
the prospectus is amended if (1) subsequent to the effective date of
its registration statement, the net asset value declines more than ten
percent from its net asset value as of the effective date of the
registration statement.
II. The Registrant undertakes:
(a) to file, during any period in which offers or sales are being
made, a post-effective amendment to the registration statement:
(1) to include any prospectus required by Section 10(a)(3) of
the 1933 Act;
(2) to reflect in the prospectus any facts or events after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(3) to include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(b) that, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of those securities at that
time shall be deemed to be the initial bona fide offering
thereof.
III. The Registrant undertakes to send by first class mail or other
means designed to ensure equally prompt delivery within two business
days of receipt of a written or oral request, the Registrant's
Statement of Additional Information.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on the 17th day of
April, 1996.
TRI-CONTINENTAL CORPORATION
---------------------------
(Registrant)
By: /s/ William C. Morris
-------------------------------------------
William C. Morris, Chairman of the Board*
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on April 17, 1996.
Signature Title
--------- -----
/s/ William C. Morris Chairman of the Board
- ----------------------- (Principal executive officer) and Director
William C. Morris*
/s/ Brian T. Zino Director and President
- -----------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- -----------------------
Thomas G. Rose
Fred E. Brown, Director )
Alice S. Ilchman, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
----------------------------------
James C. Pitney, Director ) * Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
Brian T. Zino, Director )
<PAGE>
<PAGE>
[Sullivan & Cromwell Letterhead]
April 17, 1996
Tri-Continental Corporation,
100 Park Avenue,
New York, New York 10017.
Dear Sirs:
In connection with the registration under the Securities Act of
1933, as amended (the "Act"), of 2,500,000 shares (the "Securities") of Common
Stock, par value $0.50 per share, of Tri-Continental Corporation, a Maryland
corporation (the "Corporation"), we, as your counsel, have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, in our
opinion, when the registration statement relating to the Securities (the
"Registration Statement") has become effective under the Act, the terms of the
sale of the Securities have been duly established in conformity with
Corporation's Articles of Incorporation and By-Laws, and the Securities have
been duly issued and sold as contemplated by the Registration Statement, the
Securities will be validly issued, fully paid and nonassessable.
<PAGE>
<PAGE>
Tri-Continental Corporation -2-
The foregoing opinion is limited to the Federal laws of the
United States and the General Corporation Law of the State of Maryland, and we
are expressing no opinion as to the effect of the laws of any other
jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Corporation and other sources believed by us
to be responsible.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
Tri Continental Corporation:
We consent to the incorporation by reference in the Statement of Additional
information in this Post-Effective Amendment No. 25 to Registration Statement
No. 33-77142 of our report dated February 2, 1996, appearing in the Annual
Report to shareholders for the year ended December 31, 1995, and to the
reference to us under the caption "Financial Highlights" in the Prospectus, and
under the caption "Experts" in the Statement of Additional Information, both of
which are part of such Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 17, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 1943272
<INVESTMENTS-AT-VALUE> 2437933
<RECEIVABLES> 32182
<ASSETS-OTHER> 58290
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2528405
<PAYABLE-FOR-SECURITIES> 18996
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2623
<TOTAL-LIABILITIES> 21619
<SENIOR-EQUITY> 37637
<PAID-IN-CAPITAL-COMMON> 1922637
<SHARES-COMMON-STOCK> 89512
<SHARES-COMMON-PRIOR> 84144
<ACCUMULATED-NII-CURRENT> 880
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 50977
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 494655
<NET-ASSETS> 2506786
<DIVIDEND-INCOME> 61309
<INTEREST-INCOME> 15430
<OTHER-INCOME> 35
<EXPENSES-NET> (14507)
<NET-INVESTMENT-INCOME> 62267
<REALIZED-GAINS-CURRENT> 220083
<APPREC-INCREASE-CURRENT> 303284
<NET-CHANGE-FROM-OPS> 585634
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (63181)
<DISTRIBUTIONS-OF-GAINS> (169106)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1032
<NUMBER-OF-SHARES-REDEEMED> (1838)
<SHARES-REINVESTED> 6174
<NET-CHANGE-IN-ASSETS> 475050
<ACCUMULATED-NII-PRIOR> 1794
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9761
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 14507
<AVERAGE-NET-ASSETS> 2299094
<PER-SHARE-NAV-BEGIN> 23.70
<PER-SHARE-NII> .74
<PER-SHARE-GAIN-APPREC> 5.90
<PER-SHARE-DIVIDEND> (.75)
<PER-SHARE-DISTRIBUTIONS> (2.01)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.58
<EXPENSE-RATIO> .63
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<PAGE>
