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1ST QUARTER REPORT 1996
TRI-CONTINENTAL
CORPORATION
AN INVESTMENT YOU CAN LIVE WITH
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TRI-CONTINENTAL CORPORATION
MANAGED BY
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
INVESTMENT MANAGERS AND ADVISORS
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
This report is intended only for the information of stockholders or those who
have received the current prospectus covering shares of Common Stock of
Tri-Continental Corporation, which contains information about management fees
and other costs.
CETRI3a 3/96
<PAGE>
TRI-CONTINENTAL CORPORATION
TO THE STOCKHOLDERS:
The strength in the US equity markets that made 1995 a "banner" year
continued into the first quarter of 1996. Tri-Continental Corporation's
investment results also continued the improvement that began last year. During
the first quarter of 1996, total return was 6.92% based on net asset value and
6.28% based on market price, both of which outpaced the 5.37% total return of
the Standard and Poor's 500 Composite Stock Price Index.
On April 1, your Corporation paid a dividend of $0.17 per share to Common
Stockholders of record March 22. Preferred Stockholders were paid the regular
dividend of $0.625 per share. A net gain of $1.19 per Common share was realized
on investment transactions during the first three months of 1996. At March 31,
net unrealized gain totaled $6.06 per share.
ECONOMIC COMMENT
The first quarter was also one in which the US economy demonstrated its
resilience. Despite a strike at General Motors that spread to manufacturing
plants and companies across the nation, failure of both the Congress and
Administration to reach a budget agreement, disappointment that the Federal
Reserve Board did not continue to reduce short-term interest rates, and a rise
in long-term interest rates, the US economy continued to grow at a moderate
rate.
Capital spending, which had been the strongest sector of the economy, slowed
dramatically during the first quarter. The relationship between new orders and
current shipments in the bellwether semiconductor industry, for example, hit a
nine-year low in March, while consumer cyclicals rebounded by the end of the
quarter, with retail sales advancing at an 8.2% annual rate. Personal income
continued to post solid advances, as employment growth remained on track.
Although there has been a sudden rise in energy and grain prices, which bears
monitoring, the financial markets' quick response to any sign of increased
inflation imparts its own kind of discipline on US policy makers and the Fed.
Therefore, we anticipate that the balance of 1996 will be more noteworthy for
the political debate inherent to a presidential election year than any dramatic
change in the direction of the economy.
INVESTMENT POLICY
During the quarter, the economy's resilience and improved outlook benefited
many of your Corporation's large-capitalization issues. Specifically,
economically sensitive stocks, such as retailers, performed well, and your
Manager reduced the portfolio's exposure by taking profits in this area. Food
and beverage stocks, on the other hand, languished early in the year as
valuations remained at the high end of their historical range. Your portfolio's
exposure to this area had been reduced in late 1995, thus limiting the impact of
this sector's weak performance.
Tri-Continental Corporation's Annual Meeting will be held on May 16, 1996, at
10:00 am in the Twin Peaks Conference Room at the Sheraton Palace Hotel, 2 New
Montgomery Street, San Francisco, CA 94105-3402. We encourage those Stockholders
who are able to attend to do so.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/Brian T. Zino
Brian T. Zino
President
April 26, 1996
<PAGE>
PORTFOLIO OF INVESTMENTS (unaudited) March 31, 1996
Shares Value
------ -----
COMMON STOCKS-86.9%
AEROSPACE-2.4%
Boeing Company 175,000 15,159,375
General Motors Corporation Class "H" 200,000 12,650,000
Lockheed Martin Corporation 200,000 15,175,000
United Technologies Corporation 175,000 19,643,750
--------------
$ 62,628,125
--------------
AUTOMOTIVE AND RELATED-2.1%
Autoliv (ADRs)+* 85,000$ 4,377,500
Echlin Inc. 500,000 18,125,000
Genuine Parts Company 330,000 14,850,000
Harley-Davidson Inc. 500,000 19,437,500
--------------
$ 56,790,000
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BASIC MATERIALS-1.1%
Aluminum Company of America 200,000 $ 12,525,000
Nucor Corporation 200,000 11,825,000
Pohang Iron & Steel (ADSs) 210,000 5,092,500
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$ 29,442,500
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BUILDING AND CONSTRUCTION-1.1%
Fluor Corporation 250,000 $ 17,062,500
Sherwin-Williams Corporation 300,000 13,312,500
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$ 30,375,000
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CHEMICALS-2.8%
Bayer AG 40,000 13,556,338
Dow Chemical Company 250,000 21,718,750
European Vinyls Corporation 162,000 5,637,596
Great Lakes Chemical Corporation 100,000 6,737,500
Morton International, Inc. 350,000 13,431,250
Olin Corporation 150,000 13,050,000
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$ 74,131,434
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COMMUNICATIONS-6.0%
Alcatel Alsthom Compagnie
Generale d'Electricite 65,000 $ 6,026,909
ALLTEL Corporation 500,000 15,500,000
American Telephone & Telegraph Company 250,000 15,312,500
Frontier Corporation 400,000 12,600,000
GTE Corporation 600,000 26,325,000
Indosat (ADRs) 84,200 2,873,325
NYNEX Corporation 400,000 19,950,000
SBC Communications Inc. 400,000 21,050,000
Tele Danmark (ADSs) 415,000 10,738,125
Telecom Italia-Di Risp 2,526,000 3,569,435
Telecom Italia Mobile-Di Risp 2,526,000 2,784,643
U.S. West, Inc. 700,000 22,662,500
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$ 159,392,437
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<PAGE>
COMPUTER AND BUSINESS SERVICES-3.5%
Compaq Computer Corporation* 125,000 $ 4,828,125
Dell Computer Corporation* 200,000 6,712,500
First Data Corporation 250,000 17,625,000
General Motors Corporation Class "E" 350,000 19,950,000
Hewlett-Packard Company 75,000 7,050,000
Intel Corporation 300,000 17,043,750
Microsoft Corporation* 150,000 15,459,375
Olivetti & C Spa 8,000,000 4,108,453
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$ 92,777,203
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CONSUMER GOODS AND SERVICES-10.7%
Adidas AG 165,960 $ 12,249,215
Allied-Domecq PLC 870,000 6,519,682
B.A.T. Industries PLC 1,440,000 10,626,363
The Clorox Company 200,000 17,225,000
Coca-Cola Company 150,000 12,393,750
Colgate-Palmolive Company 400,000 31,150,000
CPC International Inc. 250,000 17,343,750
Eastman Kodak Company 400,000 28,400,000
General Mills, Inc. 200,000 11,675,000
Gillette Company 200,000 10,350,000
Liz Claiborne, Inc. 400,000 13,700,000
PepsiCo, Inc. 250,000 15,812,500
Philip Morris Companies, Inc. 175,000 15,356,250
Procter & Gamble Company 200,000 16,950,000
RJR Nabisco Holdings Corporation 500,000 15,125,000
Rubbermaid Incorporated 800,000 22,700,000
Sara Lee Corporation 600,000 19,575,000
Wendy's International, Inc. 400,000 7,250,000
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$ 284,401,510
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DIVERSIFIED-3.1%
Allied-Signal Inc. 350,000 $ 20,693,750
Cooper Industries, Inc. 300,000 11,700,000
Corning, Inc. 350,000 12,250,000
Dover Corporation 175,000 8,006,250
PT Astra International 2,000,000 2,865,697
Tenneco, Inc. 450,000 25,143,750
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$ 80,659,447
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DRUGS AND HEALTH CARE-6.0%
Abbott Laboratories 300,000 $ 12,225,000
American Home Products Corporation 150,000 16,256,250
Bausch & Lomb, Incorporated 350,000 12,950,000
Baxter International Inc. 250,000 11,312,500
Bristol-Myers Squibb Company 250,000 21,406,250
Guidant Corporation 400,000 21,650,000
Merck & Co., Inc. 300,000 18,675,000
Pharmacia & Upjohn, Inc. 250,000 9,968,750
United Healthcare Corporation 250,000 15,375,000
Warner-Lambert Company 175,000 18,068,750
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$ 157,887,500
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<PAGE>
ELECTRIC AND GAS UTILITIES-4.0%
Baltimore Gas & Electric Company 750,000 $ 20,718,750
British Gas PLC (ADRs) 115,000 3,938,750
Edison International 1,000,000 17,125,000
Empresa Nacional de Electricidad (ADRs) 132,000 7,524,000
Hong Kong & China Company Ltd.* 4,000,000 7,886,537
Huaneng Power International (ADRs)* 270,000 4,623,750
Sonat Inc. 700,000 25,200,000
The Williams Companies, Inc. 400,000 20,150,000
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$ 107,166,787
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ELECTRONICS-2.3%
AMP Inc. 320,000 $ 13,240,000
Applied Materials, Inc. 200,000 6,962,500
Atmel Corporation* 200,000 5,100,000
Motorola Inc. 275,000 14,575,000
Synopsys, Inc.* 250,000 8,000,000
Teradyne, Inc. 500,000 8,375,000
Xilinx, Inc.* 150,000 4,781,250
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$ 61,033,750
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ENERGY-8.1%
Amoco Corporation 350,000 $ 25,287,500
Anadarko Petroleum Company 250,000 13,875,000
Atlantic Richfield Company 125,000 14,875,000
Baker Hughes Incorporated 500,000 14,625,000
Enron Corporation 500,000 18,437,500
Exxon Corporation 300,000 24,487,500
Panhandle Eastern Corporation 750,000 23,343,750
Schlumberger Ltd. 300,000 23,737,500
Texaco Inc. 300,000 25,800,000
Total S.A. Class "B" 75,000 5,064,045
Union Pacific Resources Group Inc. 200,000 5,300,000
USX-Marathon Group, Inc. 500,000 9,625,000
VEBAAG 230,000 11,179,171
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$ 215,636,966
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ENTERTAINMENT AND LEISURE-1.3%
Disney (Walt) Company 300,000 $ 19,162,500
News Corp. Ltd. (ADRs) 260,000 5,980,000
News Corp. Ltd. (ADRs--Voting
Preference Shares) 130,000 2,632,500
Television Broadcast* 1,900,000 6,988,636
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$ 34,763,636
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ENVIRONMENTAL MANAGEMENT-0.7%
Browning-Ferris Industries, Inc. 600,000 $ 18,900,000
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FINANCE AND INSURANCE-11.4%
ABN-AMRO Holding N.V. 125,000 $ 6,218,604
American International Group, Inc. 300,000 28,087,500
<PAGE>
AXA S.A. 164,571 $ 10,115,128
BankAmerica Corporation 300,000 23,250,000
Bank of New York Company, Inc. 400,000 20,600,000
Citicorp 250,000 19,999,968
CoreStates Financial Corporation 450,000 19,068,750
Corporacion Bancaria de
Espana, S.A. (ADRs) 489,000 10,207,875
Federal National Mortgage Association 400,000 12,750,000
General Re Corporation 125,000 18,218,750
Grupo Financiero Banamex
Accival, S.A. Class "B" 2,176,000 4,649,845
Household International, Inc. 300,000 20,175,000
HSBC Holdings PLC 550,000 8,248,542
Internationale Nederlanden Groep NV 166,846 12,117,364
Krung Thai Bank Public Company Limited 1,100,000 5,184,158
MBNA Corporation 300,000 8,887,500
Morgan (J.P.) & Co., Inc. 300,000 24,900,000
St. Paul Companies 200,000 11,100,000
Societe Generale 35,711 3,971,435
State Street Boston Corporation 350,000 17,500,000
Travelers Incorporated 250,000 16,500,000
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$ 301,750,419
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MANUFACTURING AND INDUSTRIAL
EQUIPMENT-5.4%
BBC Brown Boveri (ADRs) 97,000 $ 11,790,554
BTR PLC 1,300,000 6,259,914
Emerson Electric Co. 250,000 20,187,500
General Electric Company 400,000 31,150,000
General Signal Corporation 800,000 29,000,000
Illinois Tool Works, Inc. 225,000 14,540,625
Mannesmann 22,500 8,219,630
Minnesota Mining & Manufacturing Company 300,000 19,462,500
Pacific Dunlop Ltd. 1,500,000 3,546,311
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$ 144,157,034
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PAPER AND FOREST PRODUCTS-2.5%
International Paper Company 600,000 $ 23,625,000
Kimberly-Clark Corporation 300,000 22,350,000
Louisiana-Pacific Corporation 500,000 12,187,500
Stora Kopparbergs Class "B" 550,000 7,040,936
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$ 65,203,436
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PUBLISHING-2.4%
Donnelley (R.R.) & Sons Company 300,000 $ 10,350,000
Gannett Co., Inc. 200,000 13,450,000
Reader's Digest Association Inc. Class "A" 400,000 18,900,000
Reed Elsevier 650,000 9,952,793
Tribune Co. 150,000 9,881,250
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$ 62,534,043
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<PAGE>
PORTFOLIO OF INVESTMENTS (unaudited) (continued)
REAL ESTATE INVESTMENT TRUST-1.5%
Avalon Properties, Inc. 500,000 $ 10,750,000
Kimco Realty Corporation 450,000 12,150,000
Security Capital Industrial Trust 400,000 7,000,000
Security Capital Pacific Trust 400,000 8,800,000
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$ 38,700,000
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RETAIL TRADE-6.6%
American Stores Company 600,000 $ 19,800,000
Dillard Department Stores Inc. Class "A" 300,000 10,387,500
Lowe's Companies, Inc. 400,000 14,300,000
May Department Stores Company 450,000 21,712,500
Nordstrom, Inc. 250,000 12,109,375
The Pep Boys--Manny, Moe and Jack 620,700 20,793,450
Sears, Roebuck & Company 350,000 17,062,500
Tandy Corporation 350,000 16,187,500
Wal-Mart Stores, Inc. 1,000,000 23,125,000
Woolworth Corporation* 1,250,000 19,531,250
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$ 175,009,075
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TRANSPORTATION-1.9%
Caliber System, Inc. 355,000 $ 15,220,625
Conrail Inc. 200,000 14,325,000
Jurong Shipyard Ltd. 425,000 2,518,630
Norfolk Southern Corporation 200,000 17,000,000
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$ 49,064,255
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TOTAL COMMON STOCKS
(Cost: $1,774,555,036) $2,302,404,557
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CONVERTIBLE ISSUES-4.9%
CONVERTIBLE DEBENTURES-2.8%
AUTOMOTIVE AND RELATED-0.7%
Exide Corporation, 2.90%, 12/15/2002+ $14,000,000 $ 8,277,500
Magna International Inc., 5%, 10/15/2002 10,000,000 10,387,500
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$ 18,665,000
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COMPUTER AND BUSINESS SERVICES-0.6%
EMC Corporation, 4 1/4%, 1/1/2001 13,000,000 $ 15,470,000
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DIVERSIFIED-0.6%
Cooper Industries Inc., 7.05%, 1/1/2015 5,000,000 $ 5,168,750
MascoTech Inc., 4 1/2%, 12/15/2006 15,000,000 11,718,750
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$ 16,887,500
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FINANCE AND INSURANCE-0.2%
LibLife International, 6 1/2%, 9/30/2004 3,500,000 $ 4,716,250
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MANUFACTURING AND INDUSTRIAL EQUIPMENT-0.5%
Teco Electrical and Machinery,
2 3/4%, 4/15/2004 3,000,000 $ 2,493,750
TriMas Corporation, 5%, 8/1/2003 10,000,000 10,850,000
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$ 13,343,750
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<PAGE>
TRANSPORTATION-0.2%
Nippon Yusen, 2%, 9/29/2000 505,000,000**$ 5,608,754
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Total Convertible Debentures
(Cost: $71,340,177) $ 74,691,254
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Convertible Preferred Stocks-2.1%
DIVERSIFIED-0.5%
Corning Inc. (Delaware), 6% 250,000 $ 13,593,750
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FINANCE AND INSURANCE-0.6%
Travelers Incorporated, 5 1/2% 180,000 $ 16,020,000
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STEEL-1.0%
AK Steel Holdings Corporation, 7% 350,000 $ 13,343,750
Bethlehem Steel Corporation, $3.50+ 300,000 13,050,000
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$ 26,393,750
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Total Convertible Preferred Stocks
(Cost: $52,960,200) $ 56,007,500
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TOTAL CONVERTIBLE ISSUES
(Cost: $124,300,377) $ 130,698,754
TRI-CONTINENTAL FINANCIAL DIVISION++-1.2%
(Cost: $26,008,805) $ 31,792,321
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SHORT-TERM HOLDINGS-5.9%
ABN-AMRO Bank, Grand Cayman
Fixed Time Deposit 5 7/16%, 4/1/1996 $79,900,000 $ 79,900,000
Canadian Imperial Bank of Commerce,
Grand Cayman Fixed Time
Deposit 5 7/16%, 4/1/1996 76,000,000 76,000,000
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TOTAL SHORT-TERM HOLDINGS
(Cost: $155,900,000) $ 155,900,000
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Total Investments-98.9%
(Cost: $2,080,764,218) $2,620,795,632
Other Assets Less Liabilities-1.1% 27,899,605
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Net Investment Assets-100.0% $2,648,695,237
==============
* Non-income producing security.
** Principal amount reported in Japanese Yen.
+ Rule 144A security.
++ Restricted securities.
Note: Investments in stocks, convertible securities, limited partnership
interests and short-term holdings maturing in more than 60 days are valued at
current market values or, in their absence, at fair values determined in
accordance with procedures approved by the Board of Directors. Securities traded
on national exchanges are valued at last sales prices or, in their absence and
in the case of over-the-counter securities, a mean of bid and asked prices.
Short-term holdings maturing in 60 days or less are valued at amortized cost.
<PAGE>
Largest Portfolio Changes
January 1 to March 31, 1996
Shares
---------------------
Holdings
Additions Increase 3/31/96
--------- -------
COMMON STOCKS
Baltimore Gas & Electric Company 750,000 750,000
Cooper Industries, Inc. 300,000 300,000
CoreStates Financial Corporation 450,000 450,000
Echlin Inc. 500,000 500,000
Edison International 1,000,000 1,000,000
General Signal Corporation 350,000 800,000
NYNEX Corporation 400,000 400,000
SBC Communications Inc. 400,000 400,000
Tandy Corporation 350,000 350,000
U.S. West, Inc. 400,000 700,000
Shares
---------------------
Holdings
Additions Decrease 3/31/96
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Air Products and Chemicals 200,000 --
Bausch & Lomb, Incorporated 215,000 350,000
Bowater Incorporated 250,000 --
Dana Corporation 400,000 --
Eaton Corporation 225,000 --
General Motors Corporation Class "H"200,000 200,000
Great Lakes Chemical Corporation 200,000 100,000
HASBRO, INC. 500,000 --
Loral Corporation 600,000 --
Monsanto Company 150,000 --
Largest portfolio changes are based on cost of purchases and proceeds from sales
of securities.
<PAGE>
10 Largest Holdings
at March 31, 1996
Value
-----------
Colgate-Palmolive Company $31,150,000
General Electric Company 31,150,000
General Signal Corporation 29,000,000
Eastman Kodak Company 28,400,000
American International Group, Inc. 28,087,500
GTE Corporation 26,325,000
Texaco Inc. 25,800,000
Amoco Corporation 25,287,500
Sonat Inc. 25,200,000
Tenneco, Inc. 25,143,750
For information about your Corporation, call or write Corporate Communications,
J. & W. Seligman & Co. Incorporated, 100 Park Avenue, New York, New York 10017.
If you want information about your investment account, call or write Stockholder
Services, Seligman Data Corp., at the same address. You may telephone toll-free
between the hours of 8:30 a.m. and 6:00 p.m. (EST) by dialing (800) TRI-1092.
For Retirement Plan Services, call (800) 445-1777. Or you may call our 24-Hour
Automated Telephone Access Service on a touch-tone telephone at (800) 622-4597.
Investment Results
TOTAL RETURNS
FOR PERIODS ENDED MARCH 31, 1996
Average Annual
-----------------------
Three One Five 10
Months Year Years Years
------ ----- ----- -----
Net Asset Value 6.92% 29.99% 12.68% 12.29%
Market Price .. 6.28 27.54 11.06 10.75
S&P 500* ...... 5.37 32.10 14.67 13.95
PRICE PER SHARE
March 31, 1996 December 31, 1995
-------------- -----------------
Net Asset Value $29.28 $27.58
Market Price $23.875 $22.625
* The S&P 500 is an unmanaged index and assumes reinvestment of estimated
dividends, and does not reflect fees and expenses. Investors may not invest
directly in an index.
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THESE RATES OF RETURN REFLECT CHANGES IN PRICE, NET ASSET VALUE OR MARKET PRICE,
AS APPLICABLE, AND ASSUME THAT ALL DISTRIBUTIONS WITHIN THE PERIOD ARE
REINVESTED IN ADDITIONAL SHARES. THE RATES OF RETURN WILL VARY AND THE PRINCIPAL
VALUE OF AN INVESTMENT WILL FLUCTUATE. SHARES, IF REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE
INVESTMENT RESULTS.
