*******************************************
70TH ANNUAL REPORT 1999
[TY SYMBOL]
TRI-CONTINENTAL CORPORATION
an investment you can live with
*******************************************
<PAGE>
TRI-CONTINENTAL CORPORATION INVESTS TO
PRODUCE FUTURE 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>
TRI-CONTINENTAL CORPORATION
To the Stockholders: February 11, 2000
Nineteen ninety-nine was a challenging year for Tri-Continental
Corporation. During this time, the market overwhelmingly favored growth stocks
over value stocks. A small number of stocks, particularly in the technology
sector, continued to experience price gains, while much of the market lagged
behind. In this environment, your Corporation, which seeks companies with solid
valuation characteristics and strong fundamentals, posted a total return of
10.67% based on net asset value and 12.57% based on market price. At the same
time, the Corporation's peers, as measured by the Lipper Closed-End Growth &
Income Funds Average, posted a total return of 17.19%, and the Standard & Poor's
500 Composite Stock Price Index (S&P 500) posted a total return of 21.04%.
All major US indices ended 1999 at record highs, with the S&P 500 achieving
a fifth consecutive year of greater than 20% returns. Despite stellar
performances by the popular indices, the market was extraordinarily narrow. Just
over half of the stocks in the S&P 500 had positive returns. In addition, the
outsized returns of a few stocks skewed the indices. Just seven stocks were
responsible for half of the S&P 500's return; five of these were technology
companies, with four of those delivering astounding triple-digit returns.
Large-cap growth and technology companies continued to dominate, while value
stocks underperformed considerably. The market was driven to a large degree by
momentum and, in such a market, valuation and fundamentals are largely ignored.
The US economy remained strong in 1999 and, in January 2000, the expansion
became the longest in US history. Both domestic and global economies were
stronger during 1999 than perhaps anyone had anticipated at the start of the
year. Throughout the year, the US economy showed no signs of slowing, triggering
concerns regarding inflation. In response, the Federal Reserve Board increased
the federal funds rate three times, completely reversing its 1998 rate cuts. The
Federal Reserve Board's skillful watch over the economy, both in its response to
the worldwide crisis of 1998 and its vigilance regarding inflation in 1999, has
been a key contributor to the long-term health of this remarkable economy. We
believe that the economy will continue to provide a positive environment for
equity investing in the year 2000. However, the Federal Reserve Board will
undoubtedly remain watchful for any signs of inflation.
As we look further ahead, into the 21st century, we believe there is much
to be optimistic about, with several long-term factors that should support
equity prices for many years. First are global demographic trends. The
fastest-growing segment of the population in the US and other developed
<PAGE>
TRI-CONTINENTAL CORPORATION
countries is the 45- to 64-year-old age group. As this group matures, its
members are likely to spend less, both of necessity for retirement savings and
because, while they are in their peak earning years, consumption needs often
decrease. We believe that this will produce a groundswell of savings, which will
be a significant support for equity prices in the coming years.
Second, America has been experiencing disinflation since 1982, and nominal
interest rates have been in an 18-year secular downtrend. Despite the uptick in
rates during 1999, we believe that the long-term trend is one of continued
benign inflation and low interest rates, a positive environment for the stock
market. Third, the global economy has rebounded strongly since the 1998
financial crisis. We believe that this will continue and that stock markets
around the world will benefit from a more positive global economic outlook.
Fourth, new technology has allowed the economy to become vastly more
productive, and the sector now accounts for approximately 25% of gross domestic
product growth and approximately 40% of capital spending. Technology has been,
and will continue to be, responsible for substantial changes in business
activity, both business-to-business and business-to-consumer. However, while we
are highly enthusiastic about technology, we believe that investment behavior in
this area has become increasingly speculative. As we seek opportunities in this
exciting sector, we will remain committed to finding solid investment value and
to considering company fundamentals.
We believe that commitment to an investment discipline through all types of
markets is a key to long-term investment success. The market cannot ignore stock
price valuation and company fundamentals forever. We have always believed, and
continue to believe, that eventually stock prices will correspond to underlying
value.
Thank you for your continued support of Tri-Continental Corporation. We
look forward to serving your investment needs for many years to come.
By order of the Board of Directors,
/s/ WILLIAM C. MORRIS /s/ BRIAN T. ZINO
- --------------------- ---------------------
William C. Morris Brian T. Zino
Chairman President
2
<PAGE>
TRI-CONTINENTAL CORPORATION
INTERVIEW WITH YOUR PORTFOLIO MANAGERS
[PHOTO OMITTED]
GROWTH AND INCOME TEAM: (from left) AMY FUJII, JOHN ROTH, MELANIE RAVENELL
(Administrative Assistant), (seated) CHARLES SMITH (Portfolio Manager),
RODNEY COLLINS (Co-Portfolio Manager)
WHAT WERE TRI-CONTINENTAL CORPORATION'S INVESTMENT RESULTS IN 1999?
For the 12 months ended December 31, 1999, Tri-Continental Corporation
posted a total return of 10.67% based on net asset value and 12.57% based on
market price. During the same period, the Lipper Closed-End Growth & Income
Funds Average, which measures the results of closed-end funds with investment
objectives similar to those of your Corporation, had a total return of 17.19%,
while the Standard & Poor's 500 Composite Stock Price Index (S&P 500) had a
total return of 21.04%.
WHY DID TRI-CONTINENTAL CORPORATION UNDERPERFORM AGAINST THE S&P 500 AND ITS
LIPPER PEER GROUP?
The stock market's strong overall performance last year was the result of
the outsized returns of a small number of highly priced growth stocks. The
Technology sector, in particular, made a disproportionate impact on the market's
overall performance. This single sector, which at year-end constituted 30% of
the market cap of the S&P 500, accounted for 70% of the Index's performance.
Without Technology, the S&P 500's return would have been just 7.50%.
This extreme narrowness made last year's environment one of the most
challenging ever for value investors. Your Corporation's managers have a value
bias and, accordingly, are committed to finding companies that have attractive
yields, stable earnings growth, strong fundamentals, and reasonable valuations.
We believe that such a strategy is the best way to build a portfolio of stocks
that will deliver solid performance over the long term. Nevertheless, such a
strategy may not work over short time periods. Recently, investors appeared
willing to pay any price for stocks that seemed to be on an upward price trend,
with little or no regard for valuations and fundamentals. Nineteen ninety-nine's
market was driven by momentum to an extraordinary degree. While we were
disappointed that the Corporation did not have more competitive returns, we
believe that remaining true to our discipline, and avoiding stocks whose
valuations seem excessive, will best serve the Corporation's Stockholders over
the long term.
WHAT ECONOMIC FACTORS AFFECTED THE CORPORATION'S INVESTMENT RESULTS IN 1999?
Last year was one of great transition for global economies. In 1998, many
observers feared that the US would be unable to withstand the global financial
crisis and would itself be pulled into a recession. The US Federal Reserve Board
reacted by lowering the federal funds rate three times during that year. This
response, combined with similar actions by central banks around the world, was
successful, and allowed global economies to recover. In the US, the economy not
only avoided recession but growth continued to be robust, so much so that the
Federal Reserve Board became concerned about inflation.
(continued on page 5)
3
<PAGE>
TRI-CONTINENTAL CORPORATION
- --------------------------------------------------------------------------------
INVESTMENT RESULTS PER COMMON SHARE
TOTAL RETURNS
FOR PERIODS ENDED DECEMBER 31, 1999
Average Annual
-------------------------------
Three One Five 10
Months* Year Years Years
------- ----- ----- -----
MARKET PRICE** 5.97% 12.57% 23.19% 15.28%
NET ASSET VALUE** 9.24 10.67 22.87 15.13
LIPPER CLOSED-END
GROWTH & INCOME
FUNDS AVERAGE*** 13.66 17.19 22.41 15.12
S&P 500*** 14.88 21.04 28.55 18.21
<TABLE>
<CAPTION>
PRICE PER SHARE
December 31, September 30, June 30, March 31, December 31,
1999 1999 1999 1999 1998
------------ ------------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Market Price $27.875 $29.25 $30.1875 $29.00 $28.50
Net Asset Value 32.82 33.41 36.40 34.80 34.13
<CAPTION>
DIVIDEND AND CAPITAL GAIN INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
Capital Gain
---------------------------------------------------
Dividends Paid+ Paid Realized Unrealized
-------------- ---- -------- ----------
<S> <C> <C> <C> <C>
$0.48 $3.794++ $3.466 $9.20+++
</TABLE>
THE NET REALIZED CAPITAL GAIN AND DIVIDEND DISTRIBUTIONS PAID IN 1999 TOTALED
$4.274. THIS IS EQUAL TO 12.4% OF THE CORPORATION'S AVERAGE END-OF-QUARTER NET
ASSET VALUES FOR THE PRIOR FOUR QUARTERS (DECEMBER 1998 TO SEPTEMBER 1999).
- --------------------------------------------------------------------------------
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.
* Returns for periods of less than one year are not annualized.
** These rates of return reflect changes in market price or net asset value,
as applicable, and assume that all distributions within the period are
taken in additional shares.
*** The Lipper Closed-End Growth & Income Funds Average and the S&P 500 are
unmanaged benchmarks that assume investment of dividends. The Lipper
Closed-End Growth & Income Funds Average excludes the effect of any costs
associated with the purchase of shares, and the S&P 500 excludes the effect
of fees and sales charges. Investors cannot invest directly in an index or
an average.
+ Preferred Stockholders were paid dividends totaling $2.50 per share.
++ Includes $0.67 of undistributed realized capital gains from 1998, which
were paid on June 24, 1999.
+++ Represents the per share amount of net unrealized appreciation of portfolio
securities as of December 31, 1999.
4
<PAGE>
TRI-CONTINENTAL CORPORATION
INTERVIEW WITH YOUR PORTFOLIO MANAGERS (continued)
In an effort to slow the economy, the Federal Reserve Board increased the
federal funds rate three times in 1999, reversing all of 1998's rate cuts.
The Federal Reserve Board's more restrictive policy, along with increased
inflation concerns in the market, drove interest rates steadily higher during
the year. This had a negative effect on interest-rate-sensitive sectors, such as
the financial sector -- one of the Corporation's most heavily weighted sectors.
WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PERIOD UNDER REVIEW?
Tri-Continental remains committed to pursuing companies that are reasonably
valued. We do not buy companies whose valuations we believe are extreme or
companies whose earnings are expected to be negative in the foreseeable future.
Unfortunately, the stock prices for many such companies moved higher and higher
as the year progressed, despite their questionable fundamentals.
WHAT SECTORS OF THE PORTFOLIO BENEFITED INVESTMENT RESULTS?
The strongest area of the portfolio -- as for the market -- was Technology.
While the Corporation was underweighted in Technology, the sector was such a
strong performer that it was the single largest contributor to overall portfolio
returns. However, the portfolio's underweighting in Technology hurt the
Corporation's performance relative to the Lipper Average and the S&P 500. The
Corporation benefited from its exposure to both Basic Materials and Capital
Goods, which were strong market performers during the year.
WHAT SECTORS HAD A NEGATIVE IMPACT ON RESULTS?
Health Care was one of the worst-performing market sectors during the year
because of uncertainty regarding potential Medicare price controls for drug
companies, and Tri-Continental's exposure to this industry hurt the
Corporation's overall performance. Consumer Staples also performed poorly as
investors focused on these companies' lack of pricing flexibility.
WHAT IS YOUR OUTLOOK?
We are cautiously optimistic regarding the outlook for value stocks and for
Tri-Continental Corporation in the year 2000. We do not believe that the type of
market that prevailed in 1999 -- one in which economic and company-specific
fundamentals were largely ignored -- can continue. Many good companies
languished in 1999 and are now trading at what we believe are exceptionally
attractive prices.
The Corporation seeks to remain well diversified and does not have
excessive exposure to any one industry. The Technology sector now accounts for
approximately 30% of the S&P 500, so we may remain modestly underweighted
relative to the market in this industry over the near term. We do not doubt that
technology will continue to be an important contributor to economic growth.
However, we believe that valuations for many of these stocks have simply become
unreasonable. It is our conviction that, ultimately, companies that are more
attractively priced within their industry groups will be recognized by the
market.
5
<PAGE>
TRI-CONTINENTAL CORPORATION
HIGHLIGHTS OF THE YEAR
Net asset value of each share of Common Stock was $32.82 at December 31,
compared to $34.13 at the start of the year. If you took the June and December
gain distributions in additional shares, the net asset value of each share you
owned at the beginning of 1999 was equivalent to $37.18 at year end. Assuming
the investment of dividends and gain distributions in shares, the total return
was 10.67%.
DISTRIBUTION OF REALIZED GAIN
Your Directors declared a net long-term distribution of $0.67 per Common
share from the balance of taxable net gains realized from November 1, 1998,
through December 31, 1998, which was paid on June 24, 1999, to Stockholders of
record June 15, 1999.
A distribution of $3.124 per Common share, realized on investments from
January 1, 1999, through October 31, 1999, consisting of $2.842 from net
long-term gains and $0.282 from net short-term gains, was paid on December 17,
1999 to Stockholders of record December 10, 1999.
The Corporation is required to distribute to Common Stockholders
substantially all of its undistributed net capital gains realized through
October 31, 1999, to avoid a 4% federal excise tax. The undistributed net
capital gain realized from November 1, 1999 to December 31, 1999, of $0.58 per
Common share remains a part of the underlying market value of Common Stock
shares as of December 31, 1999. This amount will be distributed to Common
Stockholders during 2000, 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 June and
December payments in shares was determined by dividing the total dollar amount
payable by $29.5313 and $28.9688, the means of the high and low market prices on
the New York Stock Exchange on June 11 and December 8, respectively.
Distributions should be taken into account in measuring the results of an
investment in Tri-Continental Common Stock, and should be taken in shares if you
want your investment to benefit from the full effect of compounding.
OPERATING EXPENSES for the year were $23,232,584. The ratio of expenses to the
average value of net investment assets was 0.56%, down from 1998's expense ratio
of 0.58%.
COMMON STOCK DIVIDENDS, paid quarterly, totaled $0.48 per share on an average of
116,355,000 shares, compared to $0.52 in 1998 when, on average, there were
approximately 8,287,000 fewer shares outstanding. Common Stock dividends paid in
1999 with the December 1998 and June 1999 capital gain distributions taken in
additional shares were equivalent to $0.53 per share.
PREFERRED STOCK DIVIDENDS, paid each quarter, completed 70 years of
uninterrupted payments. Total net investment income available to cover the $2.50
Preferred Stock dividend was equivalent to $75.23 per Preferred share.
6
<PAGE>
TRI-CONTINENTAL CORPORATION
HIGHLIGHTS OF THE YEAR (continued)
<TABLE>
<CAPTION>
ASSETS AT YEAR END: 1999 1998
-------------- ---------------
<S> <C> <C>
Total assets ...................................... $4,152,589,054 $4,043,814,126
5,088,570 3,660,628
-------------- --------------
NET INVESTMENT ASSETS ............................. $4,147,500,484 $4,040,153,498
Preferred Stock, at par value ..................... 37,637,000 37,637,000
-------------- --------------
Net Assets for Common Stock ....................... $4,109,863,484 $4,002,516,498
============== ==============
Common shares outstanding ......................... 125,234,203 117,276,903
NET ASSETS BEHIND EACH COMMON SHARE ............... $32.82 $34.13
With 1999 gain distributions taken in shares ...... $37.18 --
TAXABLE GAIN:
Net capital gain realized ......................... $ 434,056,822 $ 347,172,591
Per Common share .................................. $3.47 $2.96
Undistributed capital gains, end of year .......... $ 72,940,940 $ 79,836,065
Per Common share, end of year ..................... $0.58 $0.68
Unrealized capital gains, end of year ............. $1,152,539,716 $1,266,872,573
Per Common share, end of year ..................... $9.20 $10.80
DISTRIBUTION OF GAIN:
Per Common share* ................................. $3.794 $4.275
INCOME:
Total income earned ............................... $ 79,858,790 $ 79,558,868
Expenses .......................................... 23,232,584 21,376,291
Preferred Stock dividends ......................... 1,881,850 1,881,850
-------------- --------------
Income for Common Stock ........................... $ 54,744,356 $ 56,300,727
============== ==============
Expenses to average net investment assets ......... 0.56% 0.58%
Expenses to average net assets for Common Stock ... 0.56% 0.58%
DIVIDENDS PER COMMON SHARE ........................ $0.48 $0.52
With December 1998 and June 1999 gain distributions
taken in shares ................................ $0.53 --
</TABLE>
- --------------
* The Corporation's net capital gain realized for the year 1999 was $3.47 per
share of Common Stock outstanding at December 31, 1999. However, the
Corporation was required to distribute only the total undistributed net
capital gain realized during the period from November 1, 1998, through
October 31, 1999 ($3.794 per share), to avoid a 4% federal excise tax. The
undistributed net realized capital gain as of year end ($0.58 per share)
remains a part of the underlying market value of Common Stock shares as of
December 31,1999. This amount will be distributed to common stockholders
during 2000, at which time Common Stockholders will be subject to federal
income taxes on the amount received.
7
<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 are made
by the Corporation in the open market and from Stockholders participating in
withdrawal plans to satisfy Plan requirements. Those shares are then sold to
Stockholders using the Plan. During 1999, 1,858,846 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. As discussed further under Stock Repurchase Program on page 13,
during 1999 the Corporation purchased 2,919,000 additional shares.
TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNT (IRA). You may contribute up to $2,000
per year to a Traditional IRAprovided you have earned income and are under age
701/2. A working or non-working spouse may also contribute up to $2,000 to a
separate Traditional IRA. Contributions to a Traditional IRAmay be deductible or
non-deductible. If you are not covered by an employer's retirement plan, your
contribution will always be deductible. For individuals who are covered by a
plan, contributions will be deductible if your adjusted gross income (AGI) in
1999 is less than $30,000. For spouses who are both covered by a plan,
contributions will be fully deductible if your AGI is less than $50,000. If one
spouse does not work or is not covered by a retirement plan, that spouse's
contribution will be fully deductible provided your household AGI does not
exceed $150,000. If your contribution is not deductible, you may still take
advantage of the tax-deferred accumulation of earnings in your Traditional IRA.
ROLLOVER IRA. 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 a Rollover 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. 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.
ROTH IRA. You (and a working or non-working spouse) may each make an after-tax
contribution of up to $2,000 per year to a Roth IRAprovided you have earned
income and meet the eligibility requirements. Your Adjusted Gross Income (AGI)
must be less than $95,000 (individuals) or $150,000 (married couples) to be
eligible to make a full contribution to a Roth IRA. Total contributions to a
Roth IRA and a Traditional IRA cannot exceed $2,000 in any year. Earnings grow
tax-free and will be distributed to you tax-free and penalty-free provided that
you hold your account for at least five years and you take the distribution
either after age 591/2, for disability, upon death, or to make a first-time home
purchase (up to $10,000). Unlike a Traditional IRA, you may contribute to a Roth
IRA even if you are over age 701/2 (if you have earned income), and you are not
required to take minimum distributions at age 701/2. You may convert an existing
Traditional IRAto a Roth IRAto take advantage of tax-free distributions. You
must pay taxes on any earnings and deductible contributions in your Traditional
IRAbefore converting it to a Roth IRA. Talk to your financial advisor for more
details on converting your Traditional IRA.
8
<PAGE>
TRI-CONTINENTAL CORPORATION
STOCKHOLDER SERVICES (continued)
RETIREMENT PLANNING -- QUALIFIED PLANS. Unincorporated businesses and the
self-employed may take advantage of the same benefits in their retirement plans
that are available to corporations. Contribution levels can go as high as 25% of
earned income (reduced by plan contributions), to a maximum of $30,000 per
participant. For retirement plan purposes, no more than $160,000 may be taken
into account as earned income under the plan in 2000 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.
RETIREMENT PLAN SERVICES provides information about our prototype retirement
plans. The toll-free telephone number is (800) 445-1777 in the Continental US
and (212) 682-7600 outside the US.
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 1999
and the distribution from net short-term gain of $0.282 per Common share paid on
December 17 are subject to federal income tax as "ordinary income." Under the
Internal Revenue Code, 55.58% of the 1999 quarterly dividends paid to Common and
Preferred Stockholders qualifies for the dividends received deduction available
to corporate Stockholders. In order to claim the dividends received deduction
for these distributions, corporate Stockholders must have held their shares for
46 days or more during the 90-day period beginning 45 days before each
ex-dividend date.
The distributions of $0.67 and $2.842 from net long-term gain, realized on
investments from November 1, 1998 through December 31, 1998, and January 1, 1999
through October 31, 1999, respectively, were paid to Common Stockholders on June
24 and December 17, 1999, respectively. The long-term gain is designated as a
"capital gain dividend" for federal income tax purposes and is taxable to
Stockholders in 1999 as a long-term gain from the sale of capital assets, no
matter how long Tri-Continental Common Stock 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, 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 June 24 and December
17 capital gain distributions in additional shares was $29.5313 and $28.9688 per
share, respectively.
9
<PAGE>
TRI-CONTINENTAL CORPORATION
A HISTORY OF BUILDING LONG-TERM WEALTH AND INCOME
Tri-Continental invests primarily to produce long-term growth of both
capital and income, while providing reasonable current income. The chart below
shows the growth of Tri-Continental Stockholders' capital over the past 20
years. The total cost of 1,000 shares of Tri-Continental purchased on December
31, 1979, was $19,875. Stockholders who took capital gains distributions in
shares would have realized an 11-fold increase in the market value of these
1,000 shares to $220,005 by year-end 1999. For those who chose to take their
dividends as well as capital gains in additional shares, the value of their
investment in Tri-Continental Corporation would have grown to a market value of
$440,328 at the end of 1999.
BUILDING WEALTH
[LINE CHART OMITTED]
[LINE CHART IS REPRESENTED BELOW IN ITS PRINTED FORM.]
<plot points needed>
* ASSUMES THE STOCKHOLDER DID NOT EXERCISE OR SELL THE TRANSFERABLE RIGHTS
DISTRIBUTED IN CONNECTION WITH THE 1992 RIGHTS OFFERING. EITHER THE EXERCISE OR
SALE OF THE RIGHTS WOULD IMPROVE THE ABOVE RESULTS.
THE INFORMATION PROVIDED ABOVE 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 chart above illustrates that Tri-Continental's performance cannot be
judged based upon stock-price appreciation alone. Indeed, stock-price
appreciation is a small component of Tri-Continental's total return. For
Stockholders who take their capital gains in additional shares, and particularly
for Stockholders who are able to take both their capital gains and their
dividends in additional shares, the value of an investment in Tri-Continental
has appreciated steadily over the years. This is because, while
Tri-Continental's stock price may not increase significantly, investors who take
their distributions in additional shares benefit from an increasing number of
shares owned.
10
<PAGE>
TRI-CONTINENTAL CORPORATION
WHY DOESN'T TRI-CONTINENTAL'S STOCK PRICE INCREASE?
Tri-Continental is a regulated investment company and, as such, is required
to distribute to stockholders at least 98% of realized gains on an annual basis
to avoid paying a federal excise tax. As these gains are distributed, the stock
price is reduced to reflect this outflow of capital and thus keeps
Tri-Continental's stock price from increasing.
While the stock price, ex-distribution, may not show any appreciation, an
investment company's return can be measured by the distribution that is paid to
Stockholders. For example, if a closed-end fund trades at $27.00 at the
beginning of the year, appreciates by 11.1% during the year to $30.00, and makes
a $3.00 distribution at year end, the price per share will be reduced by the
amount of the distribution, causing it to be identical to what it was at the
beginning of the year, although it has in fact returned 11.1%. If this was
repeated every year for five years, the fund in our example would remain at
$27.00 per share, but a total of $15.00 per share would have been paid, for a
55.5% cumulative total return over the five-year period.
THE POWER OF COMPOUNDING
While Tri-Continental's stock price does not increase substantially,
investors can increase the total amount of capital they have working for them by
taking their dividends and capital gains in additional shares, rather than in
cash. In other words, the distributions that are made reflect an outflow of
capital from the Corporation, but investors can choose to put these
distributions back to work for them.
Consider the following two investors in this example. Their investment
distributes 10% annually and each investor begins with $1,000. Investor A takes
the 10% annual distribution from the investment in cash, while Investor B
invests the annual 10% distribution back in additional shares.
<TABLE>
<CAPTION>
Investor A Investor B
------------------------------- -------------------------------
Annual Annual
Distribution Distribution
Total Investment in Dollars Total Investment in Dollars
---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C>
Year 1 $1,000 $100 $1,000 $100
Year 2 1,000 100 1,100 110
Year 3 1,000 100 1,210 121
Year 4 1,000 100 1,331 133
Year 5 1,000 100 1,464 146
Year 6 1,000 100 1,611 161
Year 7 1,000 100 1,772 177
Year 8 1,000 100 1,949 194
Year 9 1,000 100 2,144 214
Year 10 1,000 100 2,358 236
</TABLE>
After 10 years, Investor A's total dollar amount invested remained at
$1,000 since distributions, totalling $1,000, were not invested but were taken
in cash. Investor B invested $1,594 of distributions, and has $2,358 and $236 in
not yet reinvested cash after 10 years. Investor B's distribution will continue
to increase (if the distribution rate remains constant) because Investor B has
more capital working each year.
All examples are for illustrative purposes only and do not indicate the
past or future performance of any specific investment, including Tri-Continental
Corporation.
11
<PAGE>
TRI-CONTINENTAL CORPORATION
TRI-CONTINENTAL'S DISCOUNT
Tri-Continental Corporation is a closed-end investment company whose stock
is listed on the New York Stock Exchange. Unlike open-end mutual funds, whose
shares sell at net asset value (NAV) plus any applicable sales charge, the price
of Tri-Continental stock is determined by the forces of supply and demand.
Therefore, the market price of Tri-Continental's stock can be at a "premium,"
above its NAV, or at a "discount," below its NAV.
Discounts are common to closed-end investment companies like
Tri-Continental Corporation, and fluctuate over time; however, sometimes various
closed-end funds, including Tri-Continental, have sold at a premium. In recent
years, discounts on closed-end funds have tended to be wider than they were in
the early 1990s. In reaction to Tri-Continental's discount, a small number of
Stockholders have introduced proposals that the Board of Directors consider
various actions, including turning Tri-Continental into an open-end mutual fund.
In each case, voting Stockholders overwhelmingly supported maintaining
Tri-Continental's closed-end structure.
PREMIUM/DISCOUNT RANGE
1908-1999
[LINE CHART OMITTED]
[LINE CHART IS REPRESENTED BELOW IN ITS PRINTED FORM.]
<PLOT POINTS NEEDED>
Over the past 20 years, Tri-Continental's discount/premium has generally
been consistent with that of many other closed-end funds with similar investment
objectives. Tri-Continental's 20-year median discount, as of December 31, 1999,
was -14.56%. During the past two decades, Tri-Continental's discount has been as
wide as 25.12%, at the end of 1980, while its premium has been as high as 2.45%,
at the end of 1986. Tri-Continental's year-end 1999 discount was 15.07%,
moderately narrower than its 16.50% discount at year-end 1998. The year-end 1999
figure is within the bottom half of the year-end premium/discount rates
evidenced between 1979 and 1999.
Your Manager continues to conduct and review broad studies and in-depth
research of closed-end fund discounts in general and Tri-Continental's discount
in particular, and reports the findings to the Board of Directors each year.
These studies have concluded that discounts among many closed-end funds with
characteristics similar to those of Tri-Continental tend to widen and narrow
concurrently. Moreover, they point to no single determinant to explain why
closed-end companies sell at a discount or a premium.
12
<PAGE>
TRI-CONTINENTAL CORPORATION
STOCK REPURCHASE PROGRAM
In November 1999, the Board of Directors authorized the renewal of
Tri-Continental's ongoing share repurchase program. The program authorizes the
Corporation to repurchase up to 7.5% of the Corporation's shares over a 12-month
period, provided that the discount remains wider than 10%. The Board's decision
benefits all Stockholders, allowing them to continue to enjoy the advantages of
Tri-Continental's closed-end structure, while increasing the NAV of the
Corporation's outstanding shares.
For the year ended December 31, 1999, the Corporation had purchased
2,919,000 shares in the open market, representing 45.0% of the total shares
authorized for repurchase. The repurchase of additional shares is expected to
take place between January and November 2000, as long as the discount remains
above 10%.
INTRODUCE TRI-CONTINENTAL TO A FRIEND
"Introduce Tri-Continental to a Friend" is a program designed to help
encourage potential investors to consider investing in Tri-Continental. The
initiative targets the more than 44,000 current Stockholders of record,
individual investors, Wall Street analysts, and financial consultants through a
comprehensive effort including advertising, direct mail, and one-on-one
meetings. Tri-Continental has also published a brochure that traces its history
since its launch in 1929.
Reply cards allowing Stockholders to request "The Story of Tri-Continental"
brochure and the "Introduce Tri-Continental to a Friend" investor package have
been inserted in the Mid-Year and Annual Reports since the program's inception.
Response has been excellent, with several thousand copies of the brochure and
the investor package distributed to date. A new reply card is inserted in this
Annual Report.
Stockholders are invited to request that an investor package be sent to one
or more family members, friends, or associates. This package includes a letter
from Mr. William C. Morris, Tri-Continental's Chairman, a copy of the most
recent Stockholder Report, a Prospectus, "The Story of Tri-Continental"
brochure, and a pamphlet explaining the attributes of closed-end funds.
www.tri-continental.com
Now Stockholders can get the latest Tri-Continental information -including
daily net asset values, monthly fact sheets, portfolio manager commentary,
recent reports, and more -- over the Internet, 24 hours a day, seven days a
week.
Tri-Continental's website has been developed for the convenience of current
Stockholders and to let the world know about Tri-Continental. In addition to
up-to-date practical information, the site contains interesting facts about
Tri-Continental, including a complete history.
Please stop by www.tri-continental.com. We hope you find the site a useful
one that you will want to visit often.
13
<PAGE>
TRI-CONTINENTAL CORPORATION
DIVERSIFICATION OF NET INVESTMENT ASSETS
The diversification of portfolio holdings by industry on December 31, 1999, was
as follows. Individual securities owned are listed on pages 16 to 19.
<TABLE>
<CAPTION>
PERCENT OF NET
INVESTMENT ASSETS
DECEMBER 31,
------------------
ISSUES COST VALUE 1999 1998
------ -------------- -------------- ---- ----
<S> <C> <C> <C> <C> <C>
NET CASH AND
SHORT-TERM HOLDINGS 1 $ 98,271,306 $ 98,271,306 2.4% 1.5%
TRI-CONTINENTAL
FINANCIAL DIVISION 2 13,197,906 13,459,900 0.3 0.4
US GOVERNMENT SECURITIES -- -- -- -- 7.3
--- -------------- -------------- ---- ----
3 $ 111,469,212 $ 111,731,206 2.7% 9.2%
--- -------------- -------------- ---- ----
COMMON STOCKS:
Aerospace 1 $ 16,721,418 $ 21,891,250 0.5% 0.6%
Automotive and Related 2 81,888,654 97,715,625 2.4 3.8
Basic Materials -- -- -- -- 0.5
Capital Goods -- -- -- -- 0.8
Chemicals 1 39,834,848 43,806,875 1.1 0.8
Communications 4 252,837,679 329,324,041 7.9 8.5
Communications Equipment 2 94,131,257 108,292,500 2.6 1.0
Computers and Business
Services 10 464,388,063 821,379,063 19.8 11.2
Consumer Goods and Services 10 490,007,434 515,909,375 12.4 11.6
Diversified -- -- -- -- 1.3
Drugs and Health Care 8 300,578,000 383,464,687 9.3 11.0
Electric and Gas Utilities 2 103,279,695 113,550,000 2.7 3.3
Electrical Equipment 1 24,637,069 38,362,187 0.9 --
Electronics 1 61,749,304 36,125,000 0.9 1.4
Energy 5 223,590,937 290,852,597 7.0 8.1
Finance and Insurance 10 410,107,748 634,605,911 15.3 14.4
Machinery and
Industrial Equipment 2 151,894,959 294,003,750 7.1 5.5
Office Equipment 1 43,060,617 48,312,500 1.2 --
Paper and Forest Products 1 32,970,706 48,650,000 1.2 2.2
Publishing 1 11,403,065 33,848,437 0.8 0.7
Retail Trade 2 74,560,516 167,445,000 4.0 2.6
Transportation 1 5,805,000 8,010,900 0.2 1.5
Other 1 44,587 219,580 -- --
--- -------------- -------------- ----- -----
66 $2,883,491,556 $4,035,769,278 97.3% 90.8%
--- -------------- -------------- ----- -----
NET INVESTMENT ASSETS 69 $2,994,960,768 $4,147,500,484 100.0% 100.0%
=== ============== ============== ===== =====
</TABLE>
14
<PAGE>
TRI-CONTINENTAL CORPORATION
LARGEST PORTFOLIO CHANGES
OCTOBER 1 TO DECEMBER 31, 1999
SHARES
--------------------
HOLDINGS
ADDITIONS INCREASE 12/31/99
- --------- -------- --------
COMMON STOCKS
Bank of America
Corporation 799,987 1,714,987
Gillette Company (The) 1,245,000 1,245,000
Intel Corporation 50,000 1,350,000
Nortel Networks
Corporation 450,000 450,000
Pitney Bowes
Incorporated 1,000,000 1,000,000
Raytheon Company
Class "B" 129,700 1,360,000
United Parcel
Service, Inc. Class "B" 116,100 116,100
United Technologies
Corporation 70,000 1,940,000
Wal-Mart Stores, Inc. 65,000 1,845,000
Williams Companies,
Inc. (The) 1,000,000 2,400,000
SHARES OR PRIN. AMT.
--------------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/99
- ----------- --------- -----------
COMMON STOCKS
Allstate Corporation
(The) 2,200,000 shs. --
DQE Inc. 1,000,000 --
Fort James Corporation 641,900 --
GATX Corporation 760,000 --
General Electric
Corporation 174,800 1,085,000 shs.
Microsoft Corporation 260,000 1,680,000
Pharmacia &
Upjohn, Inc. 760,000 --
Washington
Mutual, Inc. 1,344,000 --
US GOVERNMENT
SECURITIES
US Treasury Notes,
7.25%, 8/15/2004 $65,000,000 --
US Treasury Notes,
6.50%, 10/15/2006 50,000,000 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
10 LARGEST EQUITY HOLDINGS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
INCREASE/(DECREASE)
DECEMBER 31, 1999 IN VALUE
----------------------- ------------------------
COST VALUE FOR SINCE
(000S) (000S) 1999 PURCHASE
---------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Microsoft Corporation $102,978 $ 196,088 68.5% 90.4%
General Electric Company 84,567 167,904 51.6 98.5
Wal-Mart Stores, Inc. 38,749 127,536 69.8 229.1
United Technologies Corporation 67,328 126,100 19.5 87.3
Intel Corporation 52,456 111,080 38.8 111.8
Exxon Mobil Corporation 78,466 108,587 14.6 38.4
Cisco Systems, Inc. 41,035 105,487 15.3 157.1
AT&T Corp. 91,838 96,679 1.2 5.3
SBC Communications, Inc. 67,544 95,661 (9.1) 41.6
Applied Materials, Inc. 43,323 90,559 109.0 109.0
-------- ---------
$668,284 $1,225,681
======== =========
</TABLE>
15
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1999
SHARES VALUE
--------- --------------
COMMON STOCKS - 97.3%
AEROSPACE - 0.5%
GENERAL DYNAMICS CORPORATION 415,000 $ 21,891,250
Manufacturer of defense products --------------
AUTOMOTIVE AND RELATED - 2.4%
DAIMLERCHRYSLER CORPORATION 600,000 $ 46,950,000
Manufacturer of automobiles,
trucks, and related parts
FORD MOTOR COMPANY 950,000 50,765,625
Manufacturer and distributor of --------------
automobiles, trucks, and related parts $ 97,715,625
--------------
CHEMICALS - 1.1%
DUPONT (E.I.) DE NEMOURS AND COMPANY 665,000 $ 43,806,875
Producer of chemicals --------------
COMMUNICATIONS - 7.9%
AT&T CORP. 1,905,000 $ 96,678,750
Provider of telecommunications services
GTE CORPORATION 1,000,000 70,562,500
Provider of telephone services,
systems, and equipment
MCI WORLDCOM, INC.* 1,252,500 66,421,641
Provider of telecommunications services
SBC COMMUNICATIONS, INC. 1,962,280 95,661,150
Provider of telephone services --------------
$ 329,324,041
--------------
COMMUNICATIONs EQUIPMENT - 2.6%
LUCENT TECHNOLOGIES, INC. 840,000 $ 62,842,500
Manufacturer of telecommunications equipment
NORTEL NETWORKS CORPORATION 450,000 45,450,000
Provider of telecommunications equipment --------------
$ 108,292,500
--------------
COMPUTERs AND BUSINESS SERVICES - 19.8%
AMERICA ONLINE, INC.* 520,000 $ 39,227,500
Provider of electronic mail, entertainment,
reference and interactive publications,
as well as Internet access
APPLIED MATERIALS INC.* 715,000 90,559,219
Manufacturer of semiconductor wafer
fabrication equipment
CISCO SYSTEMS, INC.* 985,000 105,487,344
Manufacturer of computer network products
DELL COMPUTER CORPORATION* 940,000 47,910,625
International provider of computer
systems and services
ELECTRONIC DATA SYSTEMS CORPORATION 1,325,000 88,692,187
Provider of management consulting
and technology services
HEWLETT-PACKARD COMPANY 375,000 42,726,562
Manufacturer of computers and peripherals
INTEL CORPORATION 1,350,000 111,079,688
Manufacturer of microprocessors
and memory circuits
INTERNATIONAL BUSINESS MACHINES CORPORATION 770,000 83,160,000
Diversified technology provider
MICROSOFT CORPORATION* 1,680,000 196,087,500
Provider of personal computer operating
systems and application software products
XEROX CORPORATION 725,000 16,448,438
Developer, manufacturer, and --------------
marketer of office automation products $ 821,379,063
--------------
- ---------------
See footnotes on page 19.
16
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (continued) DECEMBER 31, 1999
SHARES VALUE
--------- --------------
CONSUMER GOODS AND SERVICES - 12.4%
ANHEUSER-BUSCH COMPANIES, INC. 620,000 $ 43,942,500
Brewery; theme park operator; manufacturer and
recycler of aluminum beverage containers
BESTFOODS 1,015,000 53,350,938
Manufacturer of brand name food products
CLOROX COMPANY (The) 1,245,000 62,716,875
Manufacturer and marketer of household
consumer products
COCA-COLA COMPANY (The) 660,000 38,445,000
Manufacturer and marketer of soft drinks
and consumer products
CONAGRA, INC. 2,595,000 58,549,688
Producer and manufacturer of prepared foods
and agricultural products
GILLETTE COMPANY (The) 1,245,000 51,278,438
Manufacturer of personal care products
PEPSICO, INC. 1,610,000 56,752,500
Manufacturer and marketer of soft drinks
and consumer products
PHILIP MORRIS COMPANIES, INC. 1,485,000 34,433,437
Manufacturer of tobacco products, food,
and beverages
PROCTER & GAMBLE COMPANY (The) 655,000 71,763,437
Manufacturer and distributor of household
and personal care products
SARA LEE CORPORATION 2,025,000 44,676,562
Manufacturer of processed foods and ------------
consumer products $515,909,375
------------
DRUGS AND HEALTH CARE - 9.3%
ABBOTT LABORATORIES 1,120,000 $ 40,670,000
Developer and manufacturer of diversified
health care products
AMERICAN HOME PRODUCTS CORPORATION 1,350,000 53,240,625
Developer and manufacturer of pharmaceuticals,
food, and housewares
BAXTER INTERNATIONAL INC. 675,000 42,398,438
Manufacturer and distributor of hospital
and laboratory products
BRISTOL-MYERS SQUIBB COMPANY 730,000 46,856,875
Developer and manufacturer of health
and personal care products
JOHNSON & JOHNSON 750,000 69,843,750
Developer and manufacturer of
health care products
MERCK & CO., INC. 945,000 63,374,062
Developer and manufacturer of pharmaceuticals
PFIZER INC. 930,000 30,166,875
Manufacturer of health care consumer products
and specialty chemicals
SCHERING-PLOUGH CORPORATION 875,000 36,914,062
Manufacturer of pharmaceuticals and ------------
health and personal care products $383,464,687
------------
ELECTRIC AND GAS UTILITIES - 2.7%
UNICOM CORPORATION 1,200,000 $ 40,200,000
Electric utility
WILLIAMS COMPANIES, INC. (The) 2,400,000 73,350,000
Transporter and producer of natural gas ------------
$113,550,000
------------
ELECTRICAL EQUIPMENT - 0.9%
HONEYWELL INTERNATIONAL INC. 665,000 $ 38,362,187
Manufacturer of automation and control systems ------------
- ---------------
See footnotes on page 19.
17
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (continued) DECEMBER 31, 1999
SHARES VALUE
--------- --------------
ELECTRONICS - 0.9%
RAYTHEON COMPANY CLASS "B" 1,360,000 $ 36,125,000
Producer of defense and commercial --------------
electronics
ENERGY - 7.0%
BP AMOCO PLC (ADRs) (United Kingdom) 1,035,000 $ 61,388,437
Explorer, producer, refiner, and retailer
of petroleum products
EXXON MOBIL CORPORATION 1,347,862 108,587,132
Explorer and producer of natural gas, oil,
and petroleum products
ROYAL DUTCH PETROLEUM COMPANY (Netherlands) 1,140,000 68,898,750
Provider of international oil services
SCHLUMBERGER LTD. 830,000 46,687,500
Worldwide provider of energy services
TRANSOCEAN SEDCO FOREX INC. 160,688 5,290,778
Provider of deepwater and harsh environment --------------
drilling services $ 290,852,597
--------------
FINANCE AND INSURANCE - 15.3%
AMERICAN GENERAL CORPORATION 1,035,000 $ 78,530,625
Diversified financial services provider
AMERICAN INTERNATIONAL GROUP, INC. 620,000 67,037,500
International insurance holding company
BANK OF AMERICA CORPORATION 1,714,987 86,070,910
Commercial bank
BANK OF NEW YORK COMPANY, INC. 2,240,000 89,600,000
Commercial bank
CHUBB CORPORATION (The) 650,000 36,603,125
International holding company specializing
in property and casualty insurance
CITIGROUP INC. 1,590,000 88,344,375
Provider of diversified financial services
FANNIE MAE 745,000 46,515,938
Provider of mortgage financing
MELLON BANK CORPORATION 1,555,000 52,967,188
Provider of financial services
MERRILL LYNCH & CO. INCORPORATED 595,000 49,682,500
Provider of financial services
MORGAN (J.P.) & CO. INCORPORATED 310,000 39,253,750
Provider of financial services --------------
$ 634,605,911
--------------
MACHINERY AND
INDUSTRIAL EQUIPMENT - 7.1%
GENERAL ELECTRIC COMPANY 1,085,000 $ 167,903,750
Provider of electrical equipment
UNITED TECHNOLOGIES CORPORATION 1,940,000 126,100,000
Manufacturer of elevators, jet engines, --------------
flight systems, and automotive parts $ 294,003,750
--------------
OFFICE EQUIPMENT - 1.2%
PITNEY BOWES INCORPORATED 1,000,000 $ 48,312,500
Retailer of mailing equipment and supplies --------------
PAPER AND FOREST PRODUCTS - 1.2%
MEAD CORPORATION (The) 1,120,000 $ 48,650,000
Manufacturer of paper, lumber, ---------------
and wood products
- ---------------
See footnotes on page 19.
18
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (continued) DECEMBER 31, 1999
SHARES VALUE
--------- --------------
PUBLISHING - 0.8%
GANNETT COMPANY, INC. 415,000 $ 33,848,437
Newspapers; radio and television broadcasting --------------
RETAIL TRADE - 4.0%
MAY DEPARTMENT STORES COMPANY 1,237,500 $ 39,909,375
Department store operator
WAL-MART STORES, INC. 1,845,000 127,535,625
Discount retailer --------------
$ 167,445,000
--------------
TRANSPORTATION - 0.2%
UNITED PARCEL SERVICE, INC. CLASS "B" 116,100 $ 8,010,900
Delivery of packages and documents --------------
OTHER
(Cost: $44,587) $ 219,580
--------------
TOTAL COMMON STOCKS
(Cost: $2,883,491,556) $4,035,769,278
--------------
TRI-CONTINENTAL FINANCIAL DIVISION+ - 0.3%
(Cost: $13,197,906) $ 13,459,900
--------------
SHORT-TERM HOLDINGS - 2.3%
(Cost: $94,500,000) $ 94,500,000
--------------
TOTAL INVESTMENTS - 99.9%
(Cost: $2,991,189,462) $4,143,729,178
OTHER ASSETS LESS LIABILITIES - 0.1% 3,771,306
--------------
NET INVESTMENT ASSETS - 100.0% $4,147,500,484
==============
- --------------
* Non-income producing security.
+ Restricted security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
19
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENT OF ASSETS AND LIABILITIES December 31, 1999
ASSETS:
Investments at value:
Common stocks (cost--$2,883,491,556)..... $4,035,769,278
Tri-Continental Financial Division
(cost--$13,197,906).................... 13,459,900
Short-Term Holdings (cost--$94,500,000).. 94,500,000
--------------
Total Investments (cost--$2,991,189,462) .................. $ 4,143,729,178
Cash ...................................................... 800,111
Receivable for dividends and interest ..................... 5,909,816
Investment in, and expenses prepaid to, stockholder
service agent ............................................ 455,041
Other ..................................................... 1,694,908
---------------
TOTAL ASSETS .............................................. $ 4,152,589,054
---------------
LIABILITIES:
Payable for Common Stock repurchased ...................... $ 1,676,493
Management fee payable .................................... 1,373,666
Preferred dividends payable ............................... 470,462
Accrued expenses and other ................................ 1,567,949
---------------
TOTAL LIABILITIES ......................................... $ 5,088,570
---------------
NET INVESTMENT ASSETS ..................................... $ 4,147,500,484
Preferred Stock, at $50 par value ......................... 37,637,000
---------------
NET ASSETS FOR COMMON STOCK ............................... $ 4,109,863,484
===============
NET ASSETS PER SHARE OF COMMON STOCK
(market value--$27.875) ................................. $ 32.82
===============
STATEMENT OF CAPITAL STOCK AND SURPLUS DECEMBER 31, 1999
CAPITAL STOCK:
$2.50 Cumulative Preferred Stock, $50 par value,
asset coverage per share--$5,509.87
Shares authorized--1,000,000; issued
and outstanding--752,740 ................................ $ 37,637,000
Common Stock, $0.50 par value:
Shares authorized--129,000,000; issued
and outstanding--125,234,203 ............................ 62,617,101
SURPLUS:
Capital surplus .......................................... 2,823,253,795
Dividends in excess of net investment income ............. (1,488,068)
Undistributed net realized gain .......................... 72,940,940
Net unrealized appreciation of investments ............... 1,152,539,716
---------------
$ 4,147,500,484
===============
- ---------------
See Notes to Financial Statements.
20
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENT OF OPERATIONS For the Year Ended December 31, 1999
INVESTMENT INCOME:
Dividends (net of foreign taxes
withheld of $553,772)..................... $ 62,396,844
Interest 17,461,946
------------
TOTAL INVESTMENT INCOME....................................... $ 79,858,790
EXPENSES:
Management fee.............................. $ 16,408,753
Stockholder account and registrar services.. 4,165,934
Stockholder reports and communications...... 1,097,085
Custody and related services................ 555,917
Stockholders' meeting....................... 310,056
Directors' fees and expenses................ 265,012
Auditing and legal fees..................... 197,306
Registration................................ 106,196
Miscellaneous............................... 126,325
------------
TOTAL EXPENSES................................................ 23,232,584
------------
NET INVESTMENT INCOME......................................... $ 56,626,206*
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments............ $434,056,822
Net change in unrealized appreciation
of investments............................. (114,332,857)
------------
NET GAIN ON INVESTMENTS....................................... 319,723,965
-------------
INCREASE IN NET INVESTMENT ASSETS
FROM OPERATIONS.............................................. $ 376,350,171
=============
- --------------
*Net investment income available for Common Stock is $54,744,356, which is net
of Preferred Stock dividends of $1,881,850. See Notes to Financial Statements.
21
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................. $ 56,626,206 $ 58,765,720
Net realized gain on investments ...................... 434,056,822 356,343,038
Net realized loss from foreign currency transactions .. -- (9,753,590)
Net change in unrealized appreciation
of investments ...................................... (114,332,857) 401,764,341
Net change in unrealized depreciation
on translation of assets and liabilities
denominated in foreign currencies ................... -- 7,774,454
--------------- ---------------
INCREASE IN NET INVESTMENT
ASSETS FROM OPERATIONS .............................. $ 376,350,171 $ 814,893,963
--------------- ---------------
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: $0.48 and $0.52) ........... (55,850,232) (56,195,184)
--------------- ---------------
$ (57,732,082) $ (58,077,034)
Net realized gain on investments:
Common Stock (per share: $3.794 and $4.275) ......... (440,951,947) (463,498,251)
--------------- ---------------
DECREASE IN NET INVESTMENT ASSETS
FROM DISTRIBUTIONS .................................. $ (498,684,029) $ (521,575,285)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Value of shares of Common Stock issued
at market price in gain distributions
(10,789,967 and 11,748,613 shares) .................. $ 313,599,376 $ 325,650,732
Value of shares of Common Stock issued
for investment plans (1,858,846 and 1,894,263 shares) 55,065,194 52,067,826
Cost of shares of Common Stock purchased
from investment plan participants
(1,777,297 and 1,921,433 shares) .................... (52,696,754) (53,367,830)
Cost of shares of Common Stock purchased in the
open market (2,919,000 and 251,900 shares) .......... (86,293,000) (6,982,882)
Net proceeds from issuance of shares of
Common Stock upon exercise of
Warrants (4,784 and 10,446 shares) .................. 6,028 14,054
--------------- ---------------
INCREASE IN NET INVESTMENT ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..................... $ 229,680,844 $ 317,381,900
--------------- ---------------
INCREASE IN NET INVESTMENT ASSETS ..................... $ 107,346,986 $ 610,700,578
NET INVESTMENT ASSETS:
Beginning of year ..................................... 4,040,153,498 3,429,452,920
--------------- ---------------
END OF YEAR (including dividends in excess of
net investment income of $1,488,068 and $382,192,
respectively) ....................................... $ 4,147,500,484 $ 4,040,153,498
=============== ===============
</TABLE>
- ---------------
See Notes to Financial Statements.
22
<PAGE>
TRI-CONTINENTAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with generally accepted accounting principles which
require management to make certain estimates and assumptions at the date of the
financial statements. The following summarizes the significant accounting
policies of the Corporation:
a. SECURITY VALUATION -- Investments in stocks, 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 an exchange are valued at last sales
prices or, in their absence and in the case of over-the-counter
securities, at the mean of bid and asked prices. Short-term holdings
maturing in 60 days or less are valued at amortized cost.
b. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Corporation
are maintained in US dollars. The market value of investment securities,
other assets and liabilities denominated in foreign currencies are
translated into US dollars at the daily rate of exchange as reported by a
pricing service. Purchases and sales of investment securities, income, and
expenses are translated into US 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. FORWARD CURRENCY CONTRACTS -- 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. FEDERAL TAXES -- There is no provision for federal income 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. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- 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, except that certain dividends from foreign securities where the
ex-dividend dates may have passed are recorded as soon as the Corporation
is informed of the dividend. Interest income is recorded on the accrual
basis.
f. DISTRIBUTIONS TO STOCKHOLDERS -- 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 are caused primarily 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.
23
<PAGE>
TRI-CONTINENTAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
2. CAPITAL STOCK TRANSACTIONS -- 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, 1999, 1,777,297 shares were purchased from Plan participants
at a cost of $52,696,754, which represented a weighted average discount of
15.50% from the net asset value of those acquired shares. A total of 1,858,846
shares were issued to Plan participants during the year for proceeds of
$55,065,194, at a discount of 14.78% from the net asset value of those shares.
For the year ended December 31, 1999, the Corporation purchased 2,919,000
shares of its Common Stock in the open market at an aggregate cost of
$86,293,000, which represented a weighted average discount of 15.67% from the
net asset value of those acquired shares.
At December 31, 1999, 264,901 shares of Common Stock were reserved for
issuance upon exercise of 13,543 Warrants, each of which entitled the holder to
purchase 19.56 shares of Common Stock at $1.15 per share. Assuming the exercise
of all Warrants outstanding at December 31, 1999, net investment assets would
have increased by $304,636 and the net asset value of the Common Stock would
have been $32.75 per share. The number of Warrants exercised during the years
1999 and 1998, was 268 and 625, respectively.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments,
amounted to $1,465,767,938 and $1,432,905,790, respectively; purchases and sales
of US Government obligations amounted to $264,962,339 and $547,067,460,
respectively. At December 31, 1999, 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 amounted to $1,249,625,816 and $97,274,100, respectively.
4. SHORT-TERM INVESTMENTS -- At December 31, 1999, the Corporation owned
short-term investments which matured in less than seven days.
5. MANAGEMENT FEE, ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W.
Seligman & Co. Incorporated (the "Manager") manages the affairs of the
Corporation and provides for the 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, 1999,
was equivalent to an annual rate of 0.40% of the average daily net assets of the
Corporation.
Seligman Data Corp., owned by the Corporation and certain associated
investment companies, charged the Corporation at cost $4,102,826 for stockholder
account services. The Corporation's investment in Seligman Data Corp. is
recorded at a cost of $43,681.
24
<PAGE>
TRI-CONTINENTAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
Certain officers and directors of the Corporation are officers or directors
of the Manager and/or Seligman Data Corp.
The Corporation has a compensation arrangement under which directors who
receive fees may elect to defer receiving such fees. Directors may elect to have
their deferred fees accrue interest or earn a return based on the performance of
the Corporation or other funds in the Seligman Group of Investment Companies.
The cost of such fees and earnings accrued thereon is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1999, of
$493,910 is included in other liabilities. Deferred fees and related accrued
earnings are not deductible for federal income tax purposes until such amounts
are paid.
6. RESTRICTED SECURITIES -- At December 31, 1999, the Tri-Continental Financial
Division of the Corporation was comprised of two 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, along with their cost and values at
December 31, 1999, are as follows:
<TABLE>
<CAPTION>
Investments Acquisition Date(s) Cost Value
- ------------------------------------ ------------------- ----------- -----------
<S> <C> <C> <C>
WCAS Capital Partners II, L.P. 12/11/90 to 3/24/98 $ 5,962,340 $ 6,503,482
Whitney Subordinated Debt Fund, L.P. 7/12/89 to 11/10/98 7,235,566 6,956,418
----------- -----------
Total $13,197,906 $13,459,900
=========== ===========
</TABLE>
25
<PAGE>
TRI-CONTINENTAL CORPORATION
FINANCIAL HIGHLIGHTS
The Corporation's financial highlights are presented below. "Per share
operating performance" data is designed to allow investors to trace the
operating performance, on a per Common share basis, from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. 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, using
average shares outstanding.
"Total investment return" measures the Corporation's performance assuming
that investors purchased shares of the Corporation at the market value or net
asset 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 or net asset value per share on the last day of the period.
The computations do not reflect any sales commissions investors may incur in
purchasing or selling shares of the Corporation.
The ratios of expenses and net investment income to average net investment
assets and to average net assets for Common Stock, for the years presented do
not reflect the effect of dividends paid to Preferred Stockholders.
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- --------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF YEAR .................... $ 34.13 $ 32.06 $ 29.28 $ 27.58 $ 23.70
---------- --------- ----------- ---------- ----------
Net investment income ................. 0.48 0.54 0.60 0.68 0.74
Net realized and unrealized
investment gain ...................... 2.90 7.01 6.94 4.84 6.14
Net realized and unrealized gain (loss)
from foreign currency transactions ... -- (0.01) (0.17) (0.02) 0.03
---------- --------- ----------- ---------- ----------
INCREASE FROM INVESTMENT
OPERATIONS ........................... 3.38 7.54 7.37 5.50 6.91
Dividends paid on Preferred Stock ..... (0.02) (0.02) (0.02) (0.02) (0.02)
Dividends paid on Common Stock ........ (0.48) (0.52) (0.60) (0.66) (0.73)
Distributions from net gain realized .. (3.79) (4.28) (3.45) (2.72) (2.01)
Issuance of Common Stock
in gain distributions ................ (0.40) (0.65) (0.52) (0.40) (0.27)
---------- --------- ----------- ---------- ----------
NET INCREASE (Decrease)
IN NET ASSET VALUE ................... (1.31) 2.07 2.78 1.70 3.88
---------- --------- ----------- ---------- ----------
NET ASSET VALUE,
END OF YEAR .......................... $ 32.82 $ 34.13 $ 32.06 $ 29.28 $ 27.58
========== ========= =========== ========== ==========
ADJUSTED NET ASSET VALUE,
END OF YEAR* ........................ $ 32.75 $ 34.06 $ 31.99 $ 29.22 $ 27.52
MARKET VALUE, END OF YEAR ............. $ 27.875 $ 28.50 $ 26.6875 $ 24.125 $ 22.625
</TABLE>
- ---------------
See footnotes on page 27.
26
<PAGE>
TRI-CONTINENTAL CORPORATION
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based upon market value .......... 12.57% 26.19% 27.96% 21.98% 27.95%
Based upon net asset value ....... 10.67% 25.80% 26.65% 21.45% 30.80%
Ratios/Supplemental Data:
Expenses to average net
investment assets .............. 0.56% 0.58% 0.60% 0.62% 0.63%
Expenses to average net assets for
Common Stock ................... 0.56% 0.58% 0.60% 0.63% 0.64%
Net investment income to
average net investment assets .. 1.36% 1.59% 1.80% 2.27% 2.71%
Net investment income to average
net assets for Common Stock .... 1.38% 1.60% 1.82% 2.31% 2.75%
Portfolio turnover rate .......... 42.83% 63.39% 83.98% 53.96% 62.28%
NET INVESTMENT ASSETS,
END OF YEAR (000s omitted):
For Common Stock ................. $ 4,109,863 $ 4,002,516 $ 3,391,816 $ 2,835,026 $ 2,469,149
For Preferred Stock .............. 37,637 37,637 37,637 37,637 37,637
------------- ------------- ------------- ------------- ------------
TOTAL NET INVESTMENT ASSETS ...... $ 4,147,500 $ 4,040,153 $ 3,429,453 $ 2,872,663 $ 2,506,786
============= ============= ============= ============= ============
</TABLE>
- ---------------
* Assumes the exercise of outstanding warrants.
See Notes to Financial Statements.
27
<PAGE>
TRI-CONTINENTAL CORPORATION
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, 1999, the related statements of
operations for the year then ended and of changes in net investment assets for
each of the years in 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, 1999, by correspondence with the Corporation's custodian. 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 referred to
above present fairly, in all material respects, the financial position of
Tri-Continental Corporation as of December 31, 1999, 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.
DELOITTE & TOUCHE LLP
New York, New York
February 11, 2000
- --------------------------------------------------------------------------------
FOR MORE INFORMATION
MANAGER
J. & W. Seligman & Co. Incorporated
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
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated
Telephone Access Service
www.tricontinental.com
28
<PAGE>
TRI-CONTINENTAL CORPORATION
BOARD OF DIRECTORS
JOHN R. GALVIN (2,4)
Dean, Fletcher School of Law and
Diplomacy at Tufts University
Director, Raytheon Company
ALICE S. ILCHMAN (3,4)
Chairman, The Rockefeller Foundation
Trustee, Committee for Economic
Development
FRANK A. MCPHERSON (2,4)
Director, Kimberly-Clark Corporation
Director, Baptist Medical Center
Director, Conoco Inc.
JOHN E. MEROW (2,4)
Retired Chairman and Senior Partner,
Sullivan & Cromwell, Law Firm
Director, Commonwealth Industries, Inc.
Director, New York Presbyterian Hospital
BETSY S. MICHEL (2,4)
Trustee, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS (1)
Chairman, Tri-Continental Corporation
Chairman of the Board,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Kerr-McGee Corporation
JAMES C. PITNEY (3,4)
Retired Partner, Pitney, Hardin, Kipp & Szuch,
Law Firm
JAMES Q. RIORDAN (3,4)
Director, KeySpan Energy Corporation
Trustee, Committee for Economic
Development
Director, Public Broadcasting Service
RICHARD R.SCHMALTZ (1)
Managing Director, Director of Investments,
J. & W. Seligman & Co. Incorporated
Trustee Emeritus,Colby College
ROBERT L. SHAFER (3,4)
Retired Vice President, Pfizer Inc.
JAMES N. WHITSON (2,4)
Director and Consultant,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, CommScope, Inc.
BRIAN T. ZINO (1)
President, Tri-Continental Corporation
President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
Director, ICI Mutual Insurance Company
Member of the Board of Governors,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
Director and Consultant,
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 W. KADLEC
Vice President
CHARLES C. SMITH, JR.
Vice President
LAWRENCE P. VOGEL
Vice President
THOMAS G. ROSE
Treasurer
FRANK J. NASTA
Secretary
29
<PAGE>
TRI-CONTINENTAL CORPORATION
MANAGED BY
[J.& W. SELIGMAN & CO. 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.
www.tricontinental.com
CETR12 12/99
