TRI-CONTINENTAL CORPORATION
To the Stockholders:
In the third quarter of 1997, Tri-Continental Corporation posted a total
return of 7.76% based on net asset value, outpacing the 7.49% total return of
the Standard & Poor's 500 Composite Stock Price Index (S&P 500).
Tri-Continental's total return for the third quarter based on market price was
8.87%. The Corporation's peers, as measured by the Lipper Closed-End Growth &
Income Funds Average, posted a total return of 8.21% for the quarter.
Year-to-date, the Corporation's total return was up a strong 27.64% based on net
asset value and 27.20% based on market price. The year-to-date total return of
the S&P 500 was 29.64%, and the Corporation's peers, as measured by the Lipper
Closed-End Growth & Income Funds Average, posted a 25.87% year-to-date total
return. Additional information on the Corporation's investment results appears
on page 3.
Fundamentals continued to support the equity markets in the third quarter,
as inflation was modest, economic growth persisted, unemployment remained
historically low, consumer and producer prices were stable, and consumer income
and spending increased. Further, manufacturers were able to meet increased
demand without seeing their costs rise noticeably.
The equity markets continued their ascent in the third quarter, and, as
investors became slightly more conscious of valuations, price gains broadened to
include a greater portion of mid- and small-capitalization stocks. The strength
of the US Dollar also played a part in the broadening of the market. Investors
worried that domestic multinational corporations with important overseas
revenues might face slower profit growth. Because Tri-Continental maintained a
portion of its portfolio in the lower capitalizations of the large-stock
universe, and away from the 50 largest stocks, the portfolio benefited from the
shifting third-quarter environment.
With the stock markets' move away from large multinational companies, the
Corporation re-established modest investments in some of the premier global
growth companies toward the end of the third quarter. This is in keeping with
the Corporation's long-term commitment to investing in companies with reasonable
valuations and higher growth potentials. Overall, the number of specific issues
held in the portfolio declined from 163 at the beginning of the quarter to 147
at the end of September.
We believe that the Corporation's portfolio is well positioned going
forward, although the recent turmoil in Southeast Asia may continue to cause
short-term volatility in the US markets. Nevertheless, we believe the basic
economic fundamentals supporting the equity markets are still positive.
Thank you for your continued support of Tri-Continental Corporation, "an
investment you can live with." We look forward to serving your investment needs
in the many years to come.
A discussion with your Portfolio Managers, and the Corporation's portfolio
of investments, follow this letter.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-------------------
Brian T. Zino
President
October 31, 1997
1
<PAGE>
TRI-CONTINENTAL CORPORATION
INTERVIEW WITH YOUR PORTFOLIO MANAGERS, CHARLES C. SMITH, JR. AND ODETTE GALLI
HOW WERE TRI-CONTINENTAL'S INVESTMENT RESULTS IN THE PAST THREE MONTHS?
In the third quarter of 1997, Tri-Continental Corporation's total return of
7.76% based on net asset value and 8.87% based on market price outpaced the
7.49% total return of the Standard & Poor's 500 Composite Stock Price Index (S&P
500). For the quarter, the Corporation's peers, as measured by the Lipper
Closed-End Growth & Income Funds Average, posted an 8.21% total return, and the
broad group of open-end competitors with similar investment objectives, as
measured by the Lipper Growth & Income Funds Average, posted a total return of
9.04%. Year-to-date, Tri-Continental's total return was 27.64% based on net
asset value and 27.20% based on market price. The S&P 500 posted a year-to-date
total return of 29.64%, the Lipper Closed-End Growth & Income Funds Average
posted a 25.87% year-to-date total return, and the Lipper Growth & Income Funds
Average posted a year-to-date total return of 25.95%.
[PHOTO]
SELIGMAN GROWTH AND INCOME TEAM: (FROM LEFT) RODNEY COLLINS, MARGARET DOYLE,
JONATHAN ROTH, ODETTE GALLI (CO-PORTFOLIO MANAGER), (SEATED) MELANIE RAVENELL
(ADMINISTRATIVE ASSISTANT), CHARLES C. SMITH, JR. (CO-PORTFOLIO MANAGER), AMY
FUJII
WHAT ECONOMIC AND MARKET FACTORS INFLUENCED THE CORPORATION IN THE THIRD
QUARTER?
Tacitly supporting the continuation of the current economic environment, the
Federal Reserve Board left interest rates unchanged this quarter. Moderate
levels of economic growth continued and inflationary signs were largely absent.
Low unemployment levels were maintained without prompting a commensurate
increase in wages. In this positive economic environment, the equity markets
moved upward and were further strengthened by continued positive corporate
earnings news, which also supported the Corporation's investment results.
Additionally, the markets continued to broaden as investors focused on the more
reasonable valuations and higher earnings growth potential found in mid- and
smaller-capitalization stocks.
WHAT WAS YOUR INVESTMENT STRATEGY?
We maintained our stock selection discipline, seeking to purchase companies
with attractive long-term earnings growth potential at reasonable valuations.
Therefore, during temporary market sell-offs, we added to the portfolio's
holdings in domestic multinational corporations, including Coca-Cola and IBM.
Further, the portfolio's bias for holdings in the mid-range capitalizations of
the large-stock universe was maintained, as we believe the relative performance
of these stocks should continue to benefit from the broadening of the market.
WHAT INDUSTRIES IN THE PORTFOLIO IMPROVED THE CORPORATION'S INVESTMENT RESULTS?
The Corporation's finance and insurance stocks continued to play a vital
role and improved Tri-Continental's investment results. As a group, the
Corporation's banking issues, including BankAmerica and Mellon Bank, had a
2
<PAGE>
TRI-CONTINENTAL CORPORATION
================================================================================
INVESTMENT RESULTS PER COMMON SHARE
TOTAL RETURNS
For Periods Ended September 30, 1997
Average Annual
----------------------------
Three Nine One Five 10
Months Months Year Years Years
-------- -------- ------ ------ ------
Market Price* ....... 8.87% 27.20% 34.40% 14.06% 11.94%
Net Asset Value* .... 7.76 27.64 36.09 17.99 13.29
Lipper Closed-End
Growth &Income
Funds Average** ... 8.21 25.87 34.13 17.90 12.66
S&P 500** ........... 7.49 29.64 40.45 20.77 14.75
PRICE PER SHARE
<TABLE>
<CAPTION>
September 30, 1997 June 30, 1997 March 31, 1997 December 31, 1996
------------------- -------------- --------------- -------------------
<S> <C> <C> <C> <C>
Market Price ........... $29.3125 $27.0625 $24.50 $24.125
Net Asset Value ........ 35.70 33.30 29.63 29.28
</TABLE>
DIVIDEND AND CAPITAL GAIN INFORMATION
For the Nine Months Ended September 30, 1997
Capital Gain
----------------------------------------------
Dividends Paid Paid Realized Unrealized
--------------- ------- ---------- -----------
$0.46 $0.807# $2.75 $11.19++
- --------------------------------------------------------------------------------
* These rates of return reflect changes in the market price or the net asset
value, as applicable, and assume that all distributions within the period are
taken in additional shares. The rates of return will vary and the principal
value of an investment will fluctuate. Shares, if sold, may be worth more or
less than their original cost. Past performance is not indicative of future
investment results.
** The S&P 500 and the Lipper Closed-End Growth &Income Funds Average are
unmanaged benchmarks that assume investment of dividends. The S&P500 does not
reflect fees and sales charges, and the Lipper Closed-End Growth &Income
Funds Average does not reflect sales charges. Investors may not invest
directly in an index or an average.
+ Preferred Stockholders were paid dividends totaling $1.875 per share.
++ Represents the per share amount of net unrealized appreciation of portfolio
securities as of September 30, 1997.
# Represents undistributed realized capital gains from 1996, which were paid to
Stockholders on July 1, 1997.
================================================================================
3
<PAGE>
TRI-CONTINENTAL CORPORATION
INTERVIEW WITH YOUR PORTFOLIO MANAGERS (continued)
very strong quarter, as did the insurance stocks in the portfolio, particularly
Ace Limited and St. Paul Companies. The Corporation's investments in aerospace,
automotive and related, and manufacturing and industrial equipment also
positively contributed to the Corporation's results. Finally, some of the
strongest price appreciation was seen in the computer and business services and
electronics holdings, notably in Compaq Computer, Computer Associates
International, and AMP.
WHICH SECTORS IMPAIRED THE CORPORATION'S PERFORMANCE?
In the third quarter, there was weakness in certain consumer cyclical areas,
particularly retail trade. The portfolio's positions in Woolworth and The Pep
Boys were sold because of the deteriorating near-term earnings outlook. In
addition, Eastman Kodak was sold, as our fundamental research suggested earnings
would slow. Gas and electric utilities also had a difficult quarter. Declining
gas prices reduced profits for gas utilities, while concerns about deregulation
affected the electric utilities. Among our diversified companies, the position
in Corning was reduced because we anticipated a near-term slowing of earnings.
WHAT IS THE OUTLOOK?
We believe that the portfolio is well positioned for the long term. In the
near term, there is growing concern regarding slowing profit growth and the
possible resurgence of inflation. Nevertheless, we continue to find stocks
attractive. We believe that our investment strategy, which focuses on finding
companies with reasonable valuations relative to their potential future earnings
growth, should continue to benefit Stockholders.
4
<PAGE>
TRI-CONTINENTAL CORPORATION
LARGEST PORTFOLIO CHANGES
July 1 to September 30, 1997
SHARES
---------------------------
HOLDINGS
ADDITIONS INCREASE 9/30/97
-------- ---------
COMMON STOCKS
American General Corporation .............. 400,000 400,000
Coca-Cola Company ......................... 600,000 600,000
du Pont (E.I.) de Nemours and
Company ............................... 350,000 550,000
International Business
Machines Corporation .................. 251,000 251,000
Johnson & Johnson ......................... 600,000 600,000
Mobil Corporation ......................... 400,000 400,000
Pfizer Inc. ............................... 460,000 460,000
Philip Morris Companies, Inc. ............. 700,000 700,000
Royal Dutch Petroleum
Company ............................... 740,000 740,000
The B.F. Goodrich Company ................. 527,000 527,000
SHARES OR PRIN. AMT.
------------------------------
HOLDINGS
REDUCTIONS DECREASE 9/30/97
--------- ----------
COMMON STOCKS
CIGNA Corporation ......................... 150,000 shs. --
Corning, Inc. ............................. 469,000 381,000 shs.
Echlin Inc. ............................... 600,000 --
Enron Corporation ......................... 600,000 --
General Signal Corporation ................ 600,000 --
International Flavors &
Fragrances Inc. ....................... 700,000 --
Minnesota Mining &
Manufacturing Company ................. 300,000 --
Woolworth Corporation ..................... 1,000,000 --
CONVERTIBLE PREFERRED STOCKS
Kmart Financing, 73/4% .................... 500,000 --
US GOVERNMENT SECURITIES
US Treasury Notes, 63/8%,
5/15/2000 ............................. $45,000,000 --
Largest portfolio changes are based on cost of purchases and proceeds from sales
of securities.
10 LARGEST EQUITY HOLDINGS
At September 30, 1997
================================================================================
Value
-----------
General Electric Company .................. $54,450,000
AMP Inc. .................................. 53,562,500
Bank of New York Company, Inc. ............ 48,000,000
Compaq Computer Corporation* .............. 46,718,750
American International Group, Inc. ........ 46,434,375
Ahmanson (H. F.) & Company* ............... 45,450,000
Mellon Bank Corporation* .................. 43,800,000
The Mead Corporation* ..................... 43,350,000
Parker-Hannifin Corporation ............... 42,187,500
Procter &Gamble Company* .................. 41,437,500
================================================================================
* New to the 10 Largest Equity Holdings for this quarter.
5
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (unaudited)
Shares Value
------- ---------
COMMON STOCKS - 92.7%
AEROSPACE - 2.8%
General Dynamics Corporation ............. 200,000 $ 17,425,000
General Motors Corporation
Class "H" ............................ 200,000 13,262,500
Raytheon Company ......................... 500,000 29,562,500
United Technologies
Corporation .......................... 500,000 40,500,000
------------
$100,750,000
------------
AUTOMOTIVE AND
RELATED - 4.0%
Borg-Warner Automotive, Inc. ............. 402,300 $ 22,880,812
Chrysler Corporation ..................... 500,000 18,406,250
Dana Corporation ......................... 400,000 19,750,000
Harley-Davidson Inc. ..................... 1,200,000 35,025,000
Magna International Inc. .................
Class "A" ............................ 455,000 31,451,875
Volkswagen AG (ADRs)*
(Germany) ............................ 100,000 13,893,750
------------
$141,407,687
------------
BASIC MATERIALS - 1.1%
Aluminum Company of America .............. 200,000 $ 16,400,000
Reynolds Metals Company .................. 300,000 21,243,750
------------
$ 37,643,750
------------
BUILDING AND
CONSTRUCTION - 0.5%
Sherwin-Williams Corporation ............. 600,000 $ 17,662,500
------------
BUSINESS GOODS AND
SERVICES - 0.3%
WPP Group plc (UK) ....................... 2,700,000 $ 12,182,692
------------
CHEMICALS - 3.4%
du Pont (E.I.) de Nemours and
Company .............................. 550,000 $ 33,859,375
The B. F. Goodrich Company ............... 527,000 23,846,750
Hercules, Inc. ........................... 500,000 24,875,000
Morton International, Inc. ............... 550,000 19,525,000
Olin Corporation ......................... 400,000 18,725,000
------------
$120,831,125
------------
COMMUNICATIONS - 4.5%
Alcatel Alsthom (France) ................. 65,000 $ 8,663,885
Bell Atlantic Corporation ................ 152,200 12,242,588
GTE Corporation .......................... 600,000 27,225,000
QUALCOMM, Inc.* .......................... 325,000 20,688,281
SBC Communications, Inc. ................. 425,000 26,084,375
Sprint Corporation ....................... 300,000 15,000,000
Telebras (ADRs) (Brazil) ................. 53,800 6,926,750
Telecom Italia-Di Risp (Italy) ........... 1,468,600 5,726,359
Telecom Italia
Mobile-Di Risp (Italy) ............... 1,600,000 10,684,319
WorldCom, Inc.* .......................... 750,000 26,507,812
------------
$159,749,369
------------
COMPUTER AND
BUSINESS SERVICES - 5.7%
Compaq Computer Corporation* ............. 625,000 $ 46,718,750
Computer Associates
International, Inc. .................. 275,000 19,748,437
Hewlett-Packard Company .................. 300,000 20,868,750
Intel Corporation ........................ 318,000 29,385,187
International Business
Machines Corporation ................. 251,000 26,590,313
Microsoft Corporation* ................... 268,000 35,468,125
Sun Microsystems, Inc.* .................. 500,000 23,390,625
------------
$202,170,187
------------
CONSUMER GOODS
AND SERVICES - 8.9%
Allied Domecq plc (UK) ................... 870,000 $ 6,903,041
B.A.T. Industries plc (UK) ............... 1,670,000 14,639,087
Coca-Cola Company ........................ 600,000 36,562,500
Colgate-Palmolive Company ................ 500,000 34,843,750
CPC International Inc. ................... 250,000 23,156,250
Liz Claiborne, Inc. ...................... 400,000 21,975,000
McDonald's Corporation ................... 325,000 15,478,125
PepsiCo, Inc. ............................ 1,100,000 41,250,000
Philip Morris Companies, Inc. ............ 700,000 29,093,750
Procter & Gamble Company ................. 600,000 41,437,500
RJR Nabisco Holdings
Corporation .......................... 600,000 20,625,000
Sara Lee Corporation ..................... 600,000 30,900,000
------------
$316,864,003
------------
- -----------
See footnotes on page 9.
6
<PAGE>
TRI-CONTINENTAL CORPORATION September 30, 1997
Shares Value
------- ---------
DIVERSIFIED - 2.9%
AlliedSignal Inc. ........................ 600,000 $ 25,500,000
Corning, Inc. ............................ 381,000 18,002,250
Tenneco, Inc. ............................ 550,000 26,331,250
Westinghouse Electric
Corporation .......................... 1,200,000 32,475,000
------------
$102,308,500
------------
DRUGS AND HEALTH CARE - 8.6%
Abbott Laboratories ...................... 300,000 $ 19,181,250
American Home Products
Corporation .......................... 500,000 36,500,000
Baxter International Inc. ................ 500,000 26,125,000
Bristol-Myers Squibb Company ............. 350,000 28,962,500
Guidant Corporation ...................... 550,000 30,800,000
Johnson & Johnson ........................ 600,000 34,575,000
Merck & Co., Inc. ........................ 328,400 32,819,475
Novartis AG* (Switzerland) ............... 10,300 15,843,421
Pfizer Inc. .............................. 460,000 27,628,750
Schering-Plough Corporation .............. 400,000 20,600,000
Warner-Lambert Company ................... 250,000 33,734,375
------------
$306,769,771
------------
ELECTRIC AND
GAS UTILITIES - 3.0%
BG plc (ADRs) (UK) ....................... 115,000 $ 4,743,750
Centrica plc* (UK) ....................... 1,150,000 1,726,547
Companhia Energetica de Minas
Gerais (ADRs) (Brazil) ............... 87,400 4,741,450
Electricidade de Portugal, S.A ...........
(ADRs) (Portugal) .................... 279,600 9,646,200
Empresa Nacional de
Electricidad (ADRs) (Spain) .......... 528,000 11,352,000
Huaneng Power
International, Inc. ..................
(ADRs)* (China) ...................... 270,000 6,547,500
PacifiCorp ............................... 1,000,000 22,375,000
VEBA AG (Germany) ........................ 230,000 13,447,660
The Williams Companies, Inc. ............. 700,000 32,768,750
------------
$107,348,857
------------
ELECTRONICS - 4.9%
AMP Inc. ................................. 1,000,000 $ 53,562,500
Arrow Electronics, Inc. .................. 400,000 23,200,000
KEMET Corporation* ....................... 575,000 17,555,469
Motorola Inc. ............................ 325,000 23,359,375
Philips Electronics N. V .................
(Netherlands) ........................ 225,000 18,900,000
Thomas & Betts Corporation ............... 300,000 16,387,500
Vishay Intertechnology, Inc.* ............ 815,000 21,546,563
------------
$174,511,407
------------
ENERGY - 7.2%
Amoco Corporation ........................ 400,000 $ 38,550,000
Atlantic Richfield Company ............... 250,000 21,359,375
Baker Hughes Incorporated ................ 300,000 13,125,000
Exxon Corporation ........................ 600,000 38,437,500
Mobil Corporation ........................ 400,000 29,600,000
Royal Dutch Petroleum
Company (Netherlands) ................ 740,000 41,070,000
Schlumberger Ltd. ........................ 200,000 16,837,500
Texaco Inc. .............................. 664,000 40,794,500
Total S.A. Class "B" (France) ............ 147,583 16,928,888
------------
$256,702,763
------------
ENTERTAINMENT AND
LEISURE - 0.8%
Disney (Walt) Company .................... 250,000 $ 20,156,250
News Corp. Ltd. (ADRs)
(Australia) .......................... 260,000 5,313,750
News Corp. Ltd. (ADRs-Voting
Preference Shares) (Australia) ....... 130,000 2,331,875
------------
$ 27,801,875
------------
ENVIRONMENTAL
MANAGEMENT - 0.6%
Browning-Ferris Industries, Inc. ........ 600,000 $ 22,837,500
------------
FINANCE AND
INSURANCE - 16.5%
ABN-AMRO Holding N.V.
(Netherlands) ....................... 510,868 $ 10,370,734
ACE Limited ............................. 300,000 28,200,000
- -----------
See footnotes on page 9.
7
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (unaudited) (continued)
Shares Value
------- ---------
FINANCE AND
INSURANCE (continued)
Ahmanson (H. F.) & Company .............. 800,000 $ 45,450,000
American General Corporation ............ 400,000 20,750,000
American International
Group, Inc. ......................... 450,000 46,434,375
AXA-UAP (France) ........................ 235,209 15,814,640
BankAmerica Corporation ................. 500,000 36,656,250
Bank of Ireland (UK) .................... 681,100 8,471,908
Bank of New York
Company, Inc. ....................... 1,000,000 48,000,000
Bayerische Vereinsbank AG
(Germany) ........................... 375,000 21,489,362
Citicorp ................................ 200,000 26,787,500
Federal National Mortgage
Association ......................... 600,000 28,200,000
First Union Corporation ................. 425,000 21,276,563
General Re Corporation .................. 180,000 35,730,000
ING Groep N.V. (Netherlands) ............ 437,624 20,148,516
Irish Life plc (UK) ..................... 700,000 3,678,296
The Hartford Financial Services
Group, Inc. ......................... 300,000 25,818,750
Mellon Bank Corporation ................. 800,000 43,800,000
St. Paul Companies, Inc. ................ 400,000 32,625,000
TIG Holdings, Inc. ...................... 500,000 17,406,250
Travelers Incorporated .................. 500,000 34,125,000
Zurich Versicherungsgesellschaft
(Switzerland) ....................... 42,700 18,643,973
--------------
$ 589,877,117
--------------
MANUFACTURING AND
INDUSTRIAL EQUIPMENT - 7.2%
Emerson Electric Co. .................... 500,000 $ 28,812,500
GATX Corporation ........................ 350,000 23,646,875
General Electric Company ................ 800,000 54,450,000
Harnischfeger lndustries, Inc. .......... 477,000 20,391,750
Illinois Tool Works, Inc. ............... 700,000 34,956,250
Ingersoll-Rand Company .................. 750,000 32,296,875
Mannesmann AG (Germany) ................. 32,500 15,489,362
Pacific Dunlop Ltd. (Australia) ......... 1,500,000 4,263,882
Parker-Hannifin Corporation ............. 937,500 42,187,500
--------------
$ 256,494,994
--------------
PAPER AND FOREST
PRODUCTS - 3.1%
Fort James Corporation .................. 800,000 $ 36,650,000
The Mead Corporation .................... 600,000 43,350,000
Union Camp Corporation .................. 500,000 30,843,750
--------------
$ 110,843,750
--------------
PUBLISHING - 1.0%
Gannet Company, Inc. .................... 200,000 $ 21,587,500
Tribune Company ......................... 300,000 15,993,750
--------------
$ 37,581,250
--------------
REAL ESTATE INVESTMENT
TRUST - 0.4%
Security Capital
US Realty Trust ..................... 1,000,000 $ 14,900,000
--------------
RETAIL TRADE - 2.6%
May Department
Stores Company ...................... 400,000 $ 21,800,000
OfficeMax, Inc. ......................... 1,100,000 16,706,250
J. C. Penney Company, Inc. .............. 306,000 17,824,500
Tesco plc (UK) .......................... 1,478,000 11,226,174
Wal-Mart Stores, Inc. ................... 650,000 23,806,250
--------------
$ 91,363,174
--------------
STEEL - 1.4%
AK Steel Holdings Corporation ............ 635,000 $ 27,066,875
Allegheny Teledyne Inc. .................. 800,000 22,900,000
--------------
$ 49,966,875
--------------
TRANSPORTATION - 1.3%
Burlington Northern Santa Fe
Corporation .......................... 250,000 $ 24,156,250
Norfolk Southern Corporation ............. 200,000 20,650,000
--------------
$ 44,806,250
--------------
TOTAL COMMON STOCKS
(Cost: $2,201,388,304) ................. $3,303,375,396
--------------
- -----------
See footnotes on page 9.
8
<PAGE>
TRI-CONTINENTAL CORPORATION
September 30, 1997
Prin. Amt. Value
------------- -------
US GOVERNMENT
SECURITIES - 2.2%
US Treasury Notes, 6 1/4%,
4/30/2001 ............................ $ 35,000,000 $ 35,339,080
US Treasury Notes, 5 7/8%,
2/15/2004 ............................ 45,000,000 44,550,045
------------
TOTAL US GOVERNMENT
SECURITIES
(Cost: $78,836,719) .................... $ 79,889,125
------------
CORPORATE BONDS - 0.6%
AUTOMOTIVE AND RELATED - 0.3%
Ford Motor Credit Corp.,
6 1/2%, 2/28/2002 ..................... 10,000,000 $ 10,055,680
COMMUNICATIONS - 0.3%
TCI Communications Inc.,
8%, 8/1/2005 ......................... 10,000,000 $ 10,486,770
TOTAL CORPORATE BONDS
(Cost: $20,006,300) .................... $ 20,542,450
------------
CONVERTIBLE ISSUES - 0.1%
(Cost: $3,500,000)
DEBENTURES - 0.1%
FINANCE AND INSURANCE
LibLife International (UK),
6 1/2%, 9/30/2004 ...................... 3,500,000 $ 4,707,500
TRICONTINENTAL FINANCIAL
DIVISION - 0.5%
(Cost: $17,051,070) ................... $ 17,733,607
--------------
SHORT-TERM
HOLDINGS - 0.6%
(Cost: $22,000,000) ................... $ 22,000,000
--------------
TOTAL INVESTMENTS - 96.7%
(Cost: $2,342,782,393) ............... $3,448,248,078
--------------
OTHER ASSETS LESS
LIABILITIES - 3.3% .................. 117,092,851
--------------
NET INVESTMENT ASSETS - 100.0% .......... $3,565,340,929
==============
- ---------
* Non-income producing security.
+ Restricted securities.
Note: 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 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.
9
<PAGE>
TRI-CONTINENTAL CORPORATION
For information about your Corporation, call or write Corporate Communications,
J.&W. Seligman & Co. Incorporated, 100 Park Avenue, New York, NY 10017. If you
want information about your investment account, call or write Stockholder
Services,Seligman Data Corp., at the same address.
- --------------------------------------------------------------------------------
IMPORTANT TELEPHONE NUMBERS
STOCKHOLDER RETIREMENT PLAN 24-HOUR AUTOMATED
SERVICES SERVICES TELEPHONE ACCESS SERVICE
(800) TRI-1092 (800) 445-1777 (800) 622-4597
(8:30 a.m. to (8:30 a.m. to
6:00 p.m. EST) 6:00 p.m. EST)
- --------------------------------------------------------------------------------
10
<PAGE>
================================================================================
Third Quarter Report 1997
THE CONTINENTAL CORPORATION
an investment you can live with
================================================================================
Tri-Continental Corporation
invests primarily to produce
long-term growth of both
capital and income,
while providing reasonable
current income.
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.
CETRI3c 9/97
