MID-YEAR REPORT 2000
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
Tri-Continental Corporation's Annual Stockholders' Meeting took place on
May 18, 2000, in Pasadena, California. At the meeting, four directors were
elected and the selection of Deloitte & Touche LLP as auditors was ratified. For
complete results of the vote, please refer to page 23.
As many of you know, Tri-Continental Corporation's Annual Meetings are held
in different locations each year to give as many Stockholders as possible the
opportunity to attend. It also provides us with the opportunity to speak with
Stockholders, and to find out how they feel about their investment in the
Corporation. Of course, regardless of our efforts to make the Meeting
accessible, we can only speak directly with a small percentage of Stockholders.
In order to reach a greater number of Stockholders, we have designed a brief
Stockholder survey, included with this report, that we hope you will take a few
moments to complete. Thank you in advance for taking time to provide us with
your responses, which are anonymous.
We thank you for your continued support of Tri-Continental Corporation, and
look forward to serving your investment needs for many years to come. A
discussion with your Portfolio Managers regarding the Corporation's results
follows this letter.
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 OF GROWTH AND INCOME TEAM]
GROWTH AND INCOME TEAM: (STANDING FROM LEFT)
AMY FUJII, JOHN ROTH, MELANIE RAVENELL
(ADMINISTRATIVE ASSISTANT), (SEATED, FROM
LEFT) CHARLES SMITH (PORTFOLIO MANAGER),
RODNEY COLLINS (CO-PORTFOLIO MANAGER)
HOW DID TRI-CONTINENTAL PERFORM DURING THE FIRST SIX MONTHS OF 2000?
For the six-month period ended June 30, 2000, Tri-Continental Corporation
posted a total return of -0.28% based on net asset value and -6.77% based on
market price. This compares to -0.42% for the Standard & Poor's 500 Composite
Stock Index (S&P 500) and 1.22% for the average net asset value returns of the
Corporation's peers, as measured by the Lipper Closed-End Growth & Income Funds
Average.
WHAT ECONOMIC AND MARKET FACTORS AFFECTED THE CORPORATION'S RESULTS DURING THE
FIRST HALF OF THE FISCAL YEAR?
The Federal Reserve Board has been raising interest rates, steadily and
somewhat aggressively, for one full year now in an attempt to place a drag on
the economy. At first, these actions seemed to have little or no effect --
consumer confidence remained high, which fueled spending; unemployment remained
historically low, which nearly created a labor shortage; and price increases in
some areas of the economy seemed to be accelerating.
Toward the end of the first quarter of 2000, investors began to worry that
the Fed's actions thus far had been insufficient, forcing it to continue to
raise rates, which could adversely affect stock prices. This growing uncertainty
finally toppled the most richly valued stocks -- mostly technology issues -- by
the middle of March. The Nasdaq Composite Index (a technology-heavy index)
peaked at 5049 on March 10 and reached a low of 3165 on May 23 -- a 37% decline
from peak to trough. During this two-month period of steep losses in the
technology sector, investors began to focus on companies that could deliver
solid earnings, rather than just on those whose prices had been driven by
momentum.
In June, evidence began to appear that the economy was in fact slowing, and
at the June meeting interest rates were left unchanged -- a confirmation that
the Fed was becoming convinced that its previous actions were having the desired
effect. This lifted some of the uncertainty from the market, and technology
stocks staged a recovery, while value-style stocks lagged for the month.
WHAT WAS YOUR INVESTMENT STRATEGY?
The weakness in technology stocks during the first half of 2000 provided an
opportunity to increase Tri-Continental's weighting in this sector. We had
wanted to increase the Corporation's exposure to this important area of the
market for some time but valuations, in our opinion, were just too high. We were
gratified that we had stood by this conviction when the technology sector
corrected dramatically in
3
<PAGE>
TRI-CONTINENTAL CORPORATION
INTERVIEW WITH YOUR PORTFOLIO MANAGERS (continued)
March. As many of these stocks came down in price during this correction, we
added several technology names. We will continue to watch for opportunities to
further increase the Corporation's weighting in this sector and, if we can find
attractively valued stocks, would like to achieve a more significant weighting
in technology by year end. However, we will remain mindful of valuations, and
will not pursue these companies if we believe their prices are unreasonable. We
expect that some weakness in technology will continue through the end of the
summer and into the fall, and we'll look for opportunities to take advantage of
any such weakness to buy high-quality technology companies for the portfolio.
WHAT SECTORS CONTRIBUTED POSITIVELY TO PORTFOLIO PERFORMANCE?
Tri-Continental's overweighting in energy and utilities was clearly a
benefit during the first half of the year as the increase in oil prices and
increased demand for natural gas pushed stocks for these companies higher. We
think that energy stocks will continue to do well as the global economy
continues to recover.
The Corporation remained overweighted in financial stocks. Although these
stocks generally do not perform well in a rising-rate environment and, in fact,
the group as a whole was flat for the period, the financial stocks in the
portfolio delivered strong performances, and this group was a positive
contributor to Tri-Continental's returns.
WHAT SECTORS DETRACTED FROM PORTFOLIO PERFORMANCE?
The worst-performing market sectors during the first half of the year were
basic materials, consumer stocks, and telecommunications. Fortunately, the
Corporation was underweighted in basic materials and consumer stocks. We were
overweighted in telecommunications, which hurt the Fund's performance relative
to its benchmarks, but plan to remain overweighted, because we believe that
these stocks represent good value for the long term.
WHAT IS YOUR OUTLOOK?
We believe that the economy and the stock market will continue to moderate,
as we began to see during the end of the first half of the year. In such an
environment, we believe that investors will once again focus on corporate
earnings and stock-price valuations. We have said for some time that the
exuberance in the market would necessarily have to abate, and that the market
would, at some point, focus on fundamentals. We feel this is beginning to happen
and that it should favor Tri-Continental's investment approach of identifying
well-managed companies that trade at what we believe are attractive valuations
relative to their earnings and cash flows. However, market cycles do not end
overnight. We expect that there will be relatively high market volatility
through the end of the year, although perhaps not to the extent that we saw in
1999. We also believe that the market will continue to broaden, which should
benefit a well-diversified portfolio such as Tri-Continental.
4
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TRI-CONTINENTAL CORPORATION
--------------------------------------------------------------------------------
INVESTMENT RESULTS PER COMMON SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Average Annual
-----------------------------------
Three Six One Five 10
Months* Months* Year Years Years
------- ------- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Market Price** 1.54% (6.77)% (3.90)% 17.96% 13.63%
Net Asset Value** (0.47) (0.28) 0.38 19.09 14.42
Lipper Closed-End
Growth & Income
Funds Average*** (3.03) 1.22 4.21 17.45 13.98
S&P 500*** (2.66) (0.42) 7.24 23.80 17.80
</TABLE>
<TABLE>
<CAPTION>
PRICE PER SHARE
June 30, 2000 March 31, 2000 December 31,1999
------------- -------------- ----------------
<S> <C> <C> <C>
Market Price $25.25 $25.50 $27.875
Net Asset Value 31.80 32.76 32.82
</TABLE>
DIVIDEND AND CAPITAL GAIN INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Capital Gain
---------------------------------------------------------
Dividends Paid+ Paid Realized Unrealized
-------------- --------- --------- ---------
<S> <C> <C> <C> <C>
$0.17 $0.56++ $0.74 $8.02+++
</TABLE>
--------------------------------------------------------------------------------
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 $1.25 per share.
++ Represents realized capital gains from 1999, which were paid on June 22,
2000.
+++ Represents the per share amount of net unrealized appreciation of
portfolio securities as of June 30, 2000.
--------------------------------------------------------------------------------
5
<PAGE>
TRI-CONTINENTAL CORPORATION
STOCKHOLDER SURVEY
Tri-Continental is conducting a survey in an effort to find out more about
the Corporation's Stockholders, particularly how they feel about their
investment. Please take a few moments to complete this survey. It is a self
mailer that can be folded, sealed, and mailed. Postage has already been paid,
and your responses are anonymous.
TRI-CONTINENTAL'S DISCOUNT
Closed-end funds, like Tri-Continental, usually trade at either a premium
or at a discount; in other words, their market price may be higher or lower than
net asset value. During the first six months of 2000, Tri-Continental's discount
widened from 15.07% on December 31, 1999, to 20.60% on June 30, 2000. This
resulted in a significant disparity between Tri-Continental's net asset value
return of -0.28% and its market price return of -6.77% during this time.
We were disappointed with this disparity and believe that the market is
currently undervaluing Tri-Continental's stock. In fact, many market
professionals believe that a discount represents a buying opportunity to acquire
a professionally managed portfolio, with a competitive long-term performance
history, at an attractive price. Of the six analysts who follow Tri-Continental
(Morgan Stanley Dean Witter, Merrill Lynch, PaineWebber, Salomon Smith Barney,
AG Edwards, and Everen Securities), all recommend the stock.
Tri-Continental's manager, J. & W. Seligman & Co. Incorporated, has taken
steps to reduce the discount including proactive contact with the sell-side
analyst community, increasing market awareness through www.tri-continental.com,
and maintaining an ongoing investor relations program, "Introduce
Tri-Continental to a Friend." Also, in November 1999, Tri-Continental renewed
its share buyback program for up to 7.5% of shares outstanding as long as the
discount remains wider than 10%. While this program was not designed
specifically to narrow the discount, it may be a secondary effect. Our studies
show that closed-end funds with higher share count growth tend to have wider
discounts, and this program will reduce Tri-Continental's share count growth by
the number of shares repurchased.
WWW.TRI-CONTINENTAL.COM
Up-to-date information about Tri-Continental--including daily net asset
values, monthly fact sheets, portfolio manager commentary, recent reports, and
more--are now available at www.tri-continental.com. This website was developed
for the convenience of current Stockholders and to publicize Tri-Continental.
STOCK REPURCHASE PROGRAM
In November 1998, the Board of Directors authorized a share repurchase
program for up to 7.5% of the Corporation's shares over a 12-month period. This
program was reauthorized in November 1999. The Board's decision benefits all
Stockholders, allowing them to continue to enjoy the advantages of
Tri-Continental's closed-end structure, while reducing the number of shares
outstanding and increasing the net asset value of the remaining shares.
As of June 30, 2000, the Corporation had repurchased 3,241,927 shares,
representing approximately 2.8% of the shares outstanding on November 19, 1999,
the date the program was reauthorized. During this time, the Corporation
purchased as many shares in the open market as was legally permissible. Under
federal regulations, corporations are effectively restricted regarding the
amount of their own stock they can repurchase in the open market. Among other
restrictions, corporations are not permitted to repurchase in the open market
during any one day more than 25% of the average daily trading volume of the
previous four weeks. The repurchase of additional shares is expected to take
place through November 2000, as long as the discount remains wider than 10%. The
Board of Directors will then consider continuing the program.
6
<PAGE>
TRI-CONTINENTAL CORPORATION
HIGHLIGHTS OF THE FIRST HALF
JUNE 30, DECEMBER 31,
ASSETS: 2000 1999
-------------- -------------
Total assets ............................. $4,067,115,012 $4,152,589,054
Amounts owed ............................. 44,790,120 5,088,570
-------------- --------------
NET INVESTMENT ASSETS .................... $4,022,324,892 $4,147,500,484
Preferred Stock, at par value ............ 37,637,000 37,637,000
-------------- --------------
Net Assets for Common Stock .............. $3,984,687,892 $4,109,863,484
============== ==============
Common shares outstanding ................ 125,295,930 125,234,203
NET ASSETS BEHIND EACH COMMON SHARE ...... $31.80 $32.82
SIX MONTHS ENDED JUNE 30,
---------------------------------
2000 1999
-------------- --------------
TAXABLE GAIN:
Net capital gain realized ................ $92,321,555 $245,285,567
Per Common share ......................... $0.74 $2.09
Unrealized capital gains,
end of period .......................... $1,004,270,869 $1,363,204,585
Per Common share, end of period .......... $8.02 $11.61
DISTRIBUTION OF GAIN:
Per Common share ......................... $0.56 $0.67
INCOME:
Total income earned ...................... $31,270,745 $43,071,946
Expenses ................................. 10,796,891 11,629,941
Preferred Stock dividends ................ 940,925 940,925
-------------- --------------
Income for Common Stock .................. $19,532,929 $30,501,080
============== ==============
Expenses to average
net investment assets .................. 0.54%* 0.57%*
Expenses to average net assets
for Common Stock ....................... 0.55%* 0.58%*
DIVIDENDS PER COMMON SHARE ............... $0.17 $0.24
With December 1999 gain distribution
taken in shares ........................ $0.19 --
----------
* Annualized.
7
<PAGE>
TRI-CONTINENTAL CORPORATION
DIVERSIFICATION OF NET INVESTMENT ASSETS
The diversification of portfolio holdings by industry on June 30, 2000, was as
follows. Individual securities owned are listed on pages 10 to 13.
<TABLE>
<CAPTION>
PERCENT OF
NET INVESTMENT
ASSETS
-----------------------
JUNE 30, DECEMBER 31,
ISSUES COST VALUE 2000 1999
------ -------------- -------------- ------- -----------
<S> <C> <C> <C> <C> <C>
NET CASH AND
SHORT-TERM HOLDINGS 3 $ 157,148,208 $ 157,148,208 3.9% 2.4%
TRI-CONTINENTAL
FINANCIAL DIVISION 2 13,197,906 13,332,545 0.3 0.3
--- -------------- -------------- ----- -----
5 $ 170,346,114 $ 170,480,753 4.2% 2.7%
--- -------------- -------------- ----- -----
COMMON STOCKS:
Aerospace -- -- -- -- 0.5%
Automotive and Related 2 $ 44,644,387 $ 41,305,918 1.0% 2.4
Chemicals 1 38,990,527 28,371,875 0.7 1.1
Communications 5 314,439,683 321,887,682 8.0 7.9
Communication Equipment 2 91,879,556 108,427,875 2.7 2.6
Computer and Business Services 12 606,821,214 932,052,385 23.2 19.8
Consumer Goods and Services 5 173,975,387 199,900,651 5.0 12.4
Drugs and Health Care 9 344,383,856 491,153,644 12.2 9.3
Electrical Equipment -- -- -- -- 0.9
Electric and Gas Utilities 2 100,035,477 120,434,675 3.0 2.7
Electronics -- -- -- -- 0.9
Energy 5 243,509,787 333,431,981 8.3 7.0
Finance and Insurance 9 431,763,872 654,795,922 16.3 15.3
Machinery and
Industrial Equipment 2 162,656,072 284,244,525 7.1 7.1
Office Equipment 1 90,041,646 80,840,000 2.0 1.2
Paper and Forest Products 1 32,178,616 27,575,525 0.7 1.2
Publishing -- -- -- -- 0.8
Retail Trade 5 172,387,829 227,421,481 5.6 4.0
Transportation -- -- -- -- 0.2
--- -------------- -------------- ----- -----
61 $2,847,707,909 $3,851,844,139 95.8% 97.3%
--- -------------- -------------- ----- -----
NET INVESTMENT ASSETS 66 $3,018,054,023 $4,022,324,892 100.0% 100.0%
=== ============== ============== ===== =====
</TABLE>
8
<PAGE>
TRI-CONTINENTAL CORPORATION
LARGEST PORTFOLIO CHANGES
APRIL 1 TO JUNE 30, 2000
SHARES
------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/00
--------- -------- --------
COMMON STOCKS
Agilent
Technologies, Inc. 600,000 731,850(1)
Costco Wholesale
Corporation 480,000 480,000
General Electric
Company 126,700 3,261,600(2)
Guidant Corporation 866,100 866,100
Hewlett-Packard
Company 345,700 345,700
International Business
Machines Corporation 169,650 588,950
Microsoft Corporation 310,000 1,905,300
Pitney Bowes
Incorporated 412,000 2,021,000
Sprint Corporation 750,000 750,000
Sun Microsystems, Inc. 328,400 328,400
SHARES
------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/00
--------- -------- --------
COMMON STOCKS
Bestfoods 1,818,600 --
Bristol-Myers Squibb
Company 92,750 619,050
Clorox Company (The) 600,000 --
Coastal Corporation (The) 520,200 1,040,000
DaimlerChrysler
Corporation 585,100 --
Gillette Company (The) 1,402,800 645,000
May Department Stores
Company 204,300 1,002,400
Mellon Financial
Corporation 1,516,300 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
--------------------------------------------------------------------------------
(1) Includes 131,850 shares received as a result of a spinoff
from Hewlett-Packard.
(2) Includes 2,174,400 shares received as a result of a 3-for-1 stock split.
10 LARGEST HOLDINGS
JUNE 30, 2000
PERCENT OF
SECURITY VALUE NET INVESTMENT ASSETS
---------- ------------ ---------------------
General Electric Company $172,864,800 4.3
Microsoft Corporation 152,364,459 3.8
Intel Corporation 136,850,634 3.4
Applied Materials Inc. 126,411,075 3.1
Cisco Systems, Inc. 122,043,531 3.0
United Technologies Corporation 111,379,725 2.8
Wal-Mart Stores, Inc. 103,673,137 2.6
Bank of New York Company, Inc. 101,569,950 2.5
Chubb Corporation (The) 94,451,700 2.3
American International Group, Inc. 93,953,000 2.3
9
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
JUNE 30, 2000
SHARES VALUE
---------------- --------------
<S> <C> <C>
COMMON STOCKS 95.8%
AUTOMOTIVE AND RELATED - 1.0%
FORD MOTOR COMPANY 926,400 $ 39,835,200
Manufacturer and distributor of automobiles, trucks, and related parts
VISTEON CORPORATION 121,296 1,470,718
Provider of automotive technology systems --------------
$ 41,305,918
--------------
CHEMICALS - 0.7%
DUPONT (E.I.) DE NEMOURS AND COMPANY 648,500 $ 28,371,875
--------------
Producer of chemicals
COMMUNICATIONS - 8.0%
AT&T CORP. 1,857,600 $ 58,746,600
Provider of telecommunications services
SBC COMMUNICATIONS, INC. 1,913,480 82,758,010
Provider of telephone services
SPRINT CORPORATION 750,000 38,250,000
Provider of telecommunications services
VERIZON COMMUNICATIONS 975,100 60,699,975
Provider of telephone services, systems, and equipment
WORLDCOM, INC.* 1,773,900 81,433,097
Provider of telecommunications services --------------
$ 321,887,682
--------------
COMMUNICATIONS EQUIPMENT - 2.7%
LUCENT TECHNOLOGIES INC. 819,100 $ 48,531,675
Manufacturer of telecommunications equipment
NORTEL NETWORKS CORPORATION (CANADA) 877,600 59,896,200
Provider of telecommunications equipment --------------
$ 108,427,875
--------------
COMPUTER AND BUSINESS SERVICES - 23.2%
AGILENT TECHNOLOGIES, INC.* 731,850 $ 53,973,936
Designer of test and monitoring instruments, and semiconductors
for diversified industries
AMERICA ONLINE, INC.* 541,200 28,548,300
Provider of Internet access, as well as electronic mail, entertainment,
reference and interactive publications
APPLIED MATERIALS, INC.* 1,394,400 126,411,075
Manufacturer of semiconductor wafer fabrication equipment
CISCO SYSTEMS, INC.* 1,921,000 122,043,531
Manufacturer of computer network products
DELL COMPUTER CORPORATION* 1,555,300 76,744,334
International provider of computer systems and services
ELECTRONIC DATA SYSTEMS CORPORATION 1,292,000 53,295,000
Provider of management consulting and technology services
HEWLETT-PACKARD COMPANY 345,700 43,169,288
Manufacturer of computers and peripherals
INTEL CORPORATION 1,023,900 136,850,634
Manufacturer of microprocessors and memory circuits
INTERNATIONAL BUSINESS MACHINES CORPORATION 588,950 64,526,834
Diversified technology provider
MICROSOFT CORPORATION* 1,905,300 152,364,459
Provider of personal computer operating systems and
application software products
ORACLE CORPORATION* 526,600 44,250,856
Provider of computer software
SUN MICROSYSTEMS, INC.* 328,400 29,874,138
Manufacturer of computer peripherals --------------
$ 932,052,385
--------------
</TABLE>
----------
See footnotes on page 13.
10
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
JUNE 30, 2000
SHARES VALUE
---------------- --------------
<S> <C> <C>
CONSUMER GOODS AND SERVICES - 5.0%
ANHEUSER-BUSCH COMPANIES, INC. 604,600 $ 45,156,063
Brewery; theme park operator; manufacturer and
recycler of aluminum beverage containers
COCA-COLA COMPANY (THE) 643,600 36,966,775
Manufacturer and marketer of soft drinks and consumer products
GILLETTE COMPANY (THE) 645,000 22,534,688
Manufacturer of personal care products
PEPSICO, INC. 1,570,000 69,766,875
Manufacturer and marketer of soft drinks and consumer products
PROCTER & GAMBLE COMPANY (THE) 445,000 25,476,250
Manufacturer and distributor of household and personal care products --------------
$ 199,900,651
--------------
DRUGS AND HEALTH CARE - 12.2%
ABBOTT LABORATORIES 1,092,100 $ 48,666,706
Developer and manufacturer of diversified health care products
AMERICAN HOME PRODUCTS CORPORATION 1,316,400 77,338,500
Developer and manufacturer of pharmaceuticals, food, and housewares
BAXTER INTERNATIONAL INC. 658,200 46,279,688
Manufacturer and distributor of hospital and laboratory products
BRISTOL-MYERS SQUIBB COMPANY 619,050 36,059,662
Developer and manufacturer of health and personal care products
GUIDANT CORPORATION* 866,100 42,871,950
Provider of medical instruments used for cardiovascular treatment
JOHNSON & JOHNSON 731,300 74,501,188
Developer and manufacturer of health care products
MERCK & Co., Inc. 799,600 61,269,350
Developer and manufacturer of pharmaceuticals
PFIZER INC. 1,272,500 61,080,000
Manufacturer of health care consumer products and specialty chemicals
SCHERING-PLOUGH CORPORATION 853,200 43,086,600
Manufacturer of pharmaceuticals and health and personal care products --------------
$ 491,153,644
--------------
ELECTRIC AND GAS UTILITIES - 3.0%
UNICOM CORPORATION 1,170,200 $ 45,272,113
Electric utility
WILLIAMS COMPANIES, INC. (THE) 1,803,000 75,162,562
Transporter and producer of natural gas --------------
$ 120,434,675
--------------
ENERGY - 8.3%
BP AMOCO PLC (ADRS) (United Kingdom) 1,009,300 $ 57,088,531
Explorer, producer, refiner, and retailer of petroleum products
COASTAL CORPORATION (THE) 1,040,000 63,310,000
Energy holding company involved in oil and gas exploration and production
EXXON MOBIL CORPORATION 1,072,600 84,199,100
Explorer and producer of natural gas, oil, and petroleum products
ROYAL DUTCH PETROLEUM COMPANY (NETHERLANDS) 1,111,600 68,432,875
Provider of international oil services
SCHLUMBERGER LTD. 809,400 60,401,475
Worldwide provider of energy services --------------
$ 333,431,981
--------------
</TABLE>
----------
See footnotes on page 13.
11
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
JUNE 30, 2000
SHARES VALUE
---------------- --------------
<S> <C> <C>
FINANCE AND INSURANCE - 16.3%
AMERICAN GENERAL CORPORATION 1,009,300 $ 61,567,300
Diversified financial services provider
AMERICAN INTERNATIONAL GROUP, INC. 799,600 93,953,000
International insurance holding company
BANK OF AMERICA CORPORATION 1,672,287 71,908,341
Commercial bank
BANK OF NEW YORK COMPANY, INC. 2,184,300 101,569,950
Commercial bank
CHUBB CORPORATION (THE) 1,535,800 94,451,700
International holding company specializing in property and casualty insurance
CITIGROUP INC. 1,550,500 93,417,625
Provider of diversified financial services
FANNIE MAE 726,500 37,914,219
Provider of mortgage financing
MERRILL LYNCH & Co. Incorporated 580,200 66,723,000
Provider of financial services
MORGAN (J.P.) & Co. Incorporated 302,300 33,290,787
Provider of financial services --------------
$ 654,795,922
--------------
MACHINERY AND
INDUSTRIAL EQUIPMENT - 7.1%
GENERAL ELECTRIC COMPANY 3,261,600 $ 172,864,800
Provider of electrical equipment
UNITED TECHNOLOGIES CORPORATION 1,891,800 111,379,725
Manufacturer of elevators, jet engines, flight systems, --------------
and automotive parts
$ 284,244,525
--------------
OFFICE EQUIPMENT - 2.0%
PITNEY BOWES INCORPORATED 2,021,000 $ 80,840,000
Retailer of mailing equipment and supplies --------------
PAPER AND FOREST PRODUCTS - 0.7%
MEAD CORPORATION (THE) 1,092,100 $ 27,575,525
Manfacturer of paper, lumber, and wood products --------------
RETAIL TRADE - 5.6%
CVS CORPORATION 1,511,500 $ 60,460,000
Pharmaceutical retailer
COSTCO WHOLESALE CORPORATION* 480,000 15,855,000
Discount retailer
HOME DEPOT, INC. (THE) 468,100 23,375,744
Retailer of building materials and home improvement products
MAY DEPARTMENT STORES COMPANY 1,002,400 24,057,600
Department store operator
WAL-MART STORES, INC. 1,799,100 103,673,137
Discount retailer --------------
$ 227,421,481
--------------
</TABLE>
----------
See footnotes on page 13.
12
<PAGE>
TRI-CONTINENTAL CORPORATION
PORTFOLIO OF INVESTMENTS (continued) JUNE 30, 2000
VALUE
--------------
TOTAL COMMON STOCKS
(COST: $2,847,707,909) $3,851,844,139
--------------
TRI-CONTINENTAL FINANCIAL DIVISION+ - 0.3%
(COST: $13,197,906) $ 13,332,545
--------------
SHORT-TERM HOLDINGS - 4.7%
(COST: $190,900,000) $ 190,900,000
--------------
TOTAL INVESTMENTS - 100.8%
(COST: $3,051,805,815) $4,056,076,684
OTHER ASSETS LESS LIABILITIES - (0.8)% (33,751,792)
-------------
NET INVESTMENT ASSETS - 100.0% $4,022,324,892
==============
----------
* Non-income producing security.
+ Restricted security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
13
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 2000
<TABLE>
<S> <C> <C>
ASSETS:
Investments at value:
Common stocks (cost--$2,847,707,909) ......... $3,851,844,139
Tri-Continental Financial Division
(cost--$13,197,906) ........................ 13,332,545
Short-term holdings (cost--$190,900,000) ..... 190,900,000
--------------
Total Investments (cost--$3,051,805,815) ...................... $4,056,076,684
Cash .......................................................... 54,550
Receivable for securities sold ................................ 5,046,042
Receivable for dividends and interest ......................... 3,498,101
Investment in, and expenses prepaid to,
stockholder service agent .................................... 307,446
Receivable for Common Stock sold .............................. 23,217
Other ......................................................... 2,108,972
--------------
TOTAL ASSETS .................................................. $4,067,115,012
--------------
LIABILITIES:
Payable for securities purchased .............................. $ 40,912,191
Management fee payable ........................................ 1,290,666
Payable for Common Stock repurchased .......................... 501,925
Preferred dividends payable ................................... 470,463
Accrued expenses and other .................................... 1,614,875
--------------
TOTAL LIABILITIES ............................................. $ 44,790,120
--------------
NET INVESTMENT ASSETS ......................................... $4,022,324,892
Preferred Stock, at $50 par value ............................. 37,637,000
--------------
NET ASSETS FOR COMMON STOCK ................................... $3,984,687,892
==============
NET ASSETS PER SHARE OF COMMON STOCK
(MARKET VALUE--$25.25) ...................................... $31.80
======
STATEMENT OF CAPITAL STOCK AND SURPLUS JUNE 30, 2000
CAPITAL STOCK:
$2.50 Cumulative Preferred Stock, $50 par value,
asset coverage per share--$5,343.58
Shares authorized--1,000,000; issued
and outstanding--752,740 ................................... $ 37,637,000
Common Stock, $0.50 par value:
Shares authorized--159,000,000; issued
and outstanding--125,295,930 ............................... 62,647,965
SURPLUS:
Capital surplus .............................................. 2,824,668,064
Dividends in excess of net investment income ................. (3,016,908)
Undistributed net realized gain .............................. 96,117,902
Net unrealized appreciation of investments ................... 1,004,270,869
--------------
$4,022,324,892
==============
</TABLE>
----------
See Notes to Financial Statements.
14
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld
of $326,490) ............................... $ 26,737,899
Interest .................................... 4,532,846
-------------
TOTAL INVESTMENT INCOME ..................................... $ 31,270,745
EXPENSES:
Management fee .............................. $ 7,753,960
Stockholder account and registrar services .. 1,905,550
Stockholder reports and communications ...... 430,576
Custody and related services ................ 246,029
Directors' fees and expenses ................ 136,896
Stockholders' meeting ....................... 129,961
Auditing and legal fees ..................... 94,305
Registration ................................ 36,018
Miscellaneous ............................... 63,596
-------------
TOTAL EXPENSES .............................................. 10,796,891
------------
NET INVESTMENT INCOME ....................................... $ 20,473,854*
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments ............ $ 92,321,555
Net change in unrealized appreciation
of investments ............................. (148,268,847)
-------------
NET LOSS ON INVESTMENTS ..................................... (55,947,292)
------------
DECREASE IN NET INVESTMENT ASSETS
FROM OPERATIONS ............................................ $(35,473,438)
============
</TABLE>
----------
*Net investment income available for Common Stock is $19,532,929, which is net
of Preferred Stock dividends of $940,925. See Notes to Financial Statements.
15
<PAGE>
TRI-CONTINENTAL CORPORATION
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
------------------ -----------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................. $ 20,473,854 $ 56,626,206
Net realized gain on investments ...................... 92,321,555 434,056,822
Net change in unrealized appreciation
of investments ...................................... (148,268,847) (114,332,857)
-------------- --------------
INCREASE (DECREASE) IN NET INVESTMENT
ASSETS FROM OPERATIONS .............................. $ (35,473,438) $ 376,350,171
-------------- --------------
DISTRIBUTIONS TO STOCKHOLDERS:
Net investment income:
Preferred Stock (per share: $1.25 and $2.50) ........ $ (940,925) $ (1,881,850)
Common Stock (per share: $0.17 and $0.48) ........... (21,061,769) (55,850,232)
-------------- --------------
$ (22,002,694) $ (57,732,082)
Net realized gain on investments:
Common Stock (per share: $0.56 and $3.794) .......... (69,144,593) (440,951,947)
-------------- --------------
DECREASE IN NET INVESTMENT ASSETS
FROM DISTRIBUTIONS .................................. $ (91,147,287) $ (498,684,029)
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Value of shares of Common Stock issued
at market price in gain distributions
(1,947,128 and 10,789,967 shares) ................... $ 49,104,134 $ 313,599,376
Value of shares of Common Stock issued
for investment plans (943,654 and 1,858,846 shares) . 23,692,015 55,065,194
Cost of shares of Common Stock purchased
from investment plan participants
(1,137,255 and 1,777,297 shares) .................... (28,706,913) (52,696,754)
Cost of shares of Common Stock purchased in the
open market (1,691,800 and 2,919,000 shares) ........ (42,644,103) (86,293,000)
Net proceeds from issuance of shares of
Common Stock upon exercise of
Warrants (4,784 shares) ............................. -- 6,028
-------------- --------------
INCREASE IN NET INVESTMENT ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..................... $ 1,445,133 $ 229,680,844
-------------- --------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS .......... $ (125,175,592) $ 107,346,986
NET INVESTMENT ASSETS:
Beginning of period ................................... 4,147,500,484 4,040,153,498
-------------- --------------
END OF PERIOD (including dividends in excess of
net investment income of $3,016,908 and $1,488,068,
respectively) ....................................... $4,022,324,892 $4,147,500,484
============== ==============
</TABLE>
----------
See Notes to Financial Statements.
16
<PAGE>
TRI-CONTINENTAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, 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. 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.
d. 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.
e. 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.
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.
17
<PAGE>
TRI-CONTINENTAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
The Corporation, in connection with its Automatic Dividend Investment and
Cash Purchase Plan and other Stockholder plans, acquires and issues shares of
its own Common Stock, as needed, to satisfy Plan requirements. For the six
months ended June 30, 2000, 1,137,255 shares were purchased from Plan
participants at a cost of $28,706,913, which represented a weighted average
discount of 20.44% from the net asset value of those acquired shares. A total of
943,654 shares were issued to Plan participants during the six months ended June
30, 2000, for proceeds of $23,692,015, at a discount of 20.26% from the net
asset value of those shares.
The Corporation may make additional purchases of its Common Stock in the
open market and elsewhere at such prices in such amounts as the Board of
Directors may deem advisable. For the six months ended June 30, 2000, the
Corporation purchased 1,691,800 shares of its Common Stock in the open market at
an aggregate cost of $42,644,103, which represented a weighted average discount
of 20.36% from the net asset value of those acquired shares.
At June 30, 2000, 269,506 shares of Common Stock were reserved for issuance
upon exercise of 13,543 Warrants, each of which entitled the holder to purchase
19.90 shares of Common Stock at $1.13 per share. Assuming the exercise of all
Warrants outstanding at June 30, 2000, net investment assets would have
increased by $304,541 and the net asset value of the Common Stock would have
been $31.74 per share. The number of Warrants exercised during the six months
ended June 30, 2000 and the year ended December 31, 1999, was -0- and 268,
respectively.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding USGovernment obligations and short-term investments,
amounted to $754,197,149 and $882,302,351, respectively. At June 30, 2000, 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 $1,136,138,537
and $131,867,668, respectively.
4. SHORT-TERM INVESTMENTS -- At June 30, 2000, 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 six months ended June 30,
2000, 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 $1,853,981 for stockholder
account services. The Corporation's investment in Seligman Data Corp. is
recorded at a cost of $43,681.
Certain officers and directors of the Corporation are officers or directors
of the Manager 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 June 30, 2000, of
$413,972 is included in other liabilities. Deferred fees and related accrued
earnings are not deductible for federal income tax purposes until such amounts
are paid.
18
<PAGE>
TRI-CONTINENTAL CORPORATION
NOTES TO FINANCIAL STATEMENTS (continued)
6. RESTRICTED SECURITIES -- At June 30, 2000, 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
June 30, 2000, 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 $ 6,376,126
Whitney Subordinated Debt Fund, L.P. 7/12/89 to 11/10/98 7,235,566 6,956,419
----------- -----------
Total $13,197,906 $13,332,545
=========== ===========
</TABLE>
19
<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 total investment returns for periods of less than one year are not
annualized.
The ratios of expenses and net investment income to average net investment
assets and to average net assets for Common Stock, for the periods presented do
not reflect the effect of dividends paid to Preferred Stockholders.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF PERIOD ...................... $32.82 $34.13 $32.06 $29.28 $27.58 $23.70
------ ------ ------ ------ ------ ------
Net investment income ..................... 0.16 0.48 0.54 0.60 0.68 0.74
Net realized and unrealized
investment gain (loss) ................... (0.34) 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 ............................... (0.18) 3.38 7.54 7.37 5.50 6.91
Dividends paid on Preferred Stock ......... (0.01) (0.02) (0.02) (0.02) (0.02) (0.02)
Dividends paid on Common Stock ............ (0.17) (0.48) (0.52) (0.60) (0.66) (0.73)
Distributions from net gain realized ...... (0.56) (3.79) (4.28) (3.45) (2.72) (2.01)
Issuance of Common Stock
in gain distributions .................... (0.10) (0.40) (0.65) (0.52) (0.40) (0.27)
------ ------ ------ ------ ------ ------
NET INCREASE (DECREASE)
IN NET ASSET VALUE ....................... (1.02) (1.31) 2.07 2.78 1.70 3.88
------ ------ ------ ------ ------ ------
NET ASSET VALUE,
END OF PERIOD ............................ $31.80 $32.82 $34.13 $32.06 $29.28 $27.58
====== ====== ====== ====== ====== ======
ADJUSTED NET ASSET VALUE,
END OF PERIOD* .......................... $31.74 $32.75 $34.06 $31.99 $29.22 $27.52
MARKET VALUE, END OF PERIOD ............... $25.25 $27.875 $28.50 $26.6875 $24.125 $22.625
</TABLE>
----------
See footnotes on page 21.
20
<PAGE>
TRI-CONTINENTAL CORPORATION
FINANCIAL HIGHLIGHTS (continued)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
TOTAL INVESTMENT RETURN:
Based upon market value (6.77)% 12.57% 26.19% 27.96% 21.98% 27.95%
Based upon net asset value (0.28)% 10.67% 25.80% 26.65% 21.45% 30.80%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net
investment assets 0.54%+ 0.56% 0.58% 0.60% 0.62% 0.63%
Expenses to average net assets for
Common Stock 0.55%+ 0.56% 0.58% 0.60% 0.63% 0.64%
Net investment income to
average net investment assets 1.03%+ 1.36% 1.59% 1.80% 2.27% 2.71%
Net investment income to average
net assets for Common Stock 1.04%+ 1.38% 1.60% 1.82% 2.31% 2.75%
Portfolio turnover rate 19.45% 42.83% 63.39% 83.98% 53.96% 62.28%
NET INVESTMENT ASSETS,
END OF PERIOD (000S OMITTED):
For Common Stock $3,984,688 $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 37,637
---------- ---------- ---------- ---------- ---------- ----------
TOTAL NET INVESTMENT ASSETS $4,022,325 $4,147,500 $4,040,153 $3,429,453 $2,872,663 $2,506,786
========== ========== ========== ========== ========== ==========
</TABLE>
----------
* Assumes the exercise of outstanding warrants.
+ Annualized.
See Notes to Financial Statements.
21
<PAGE>
TRI-CONTINENTAL CORPORATION
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SECURITY HOLDERS,
Tri-Continental Corporation:
We have audited the accompanying statements of assets and liabilities of
Tri-Continental Corporation, including the portfolio of investments as of June
30, 2000, of capital stock and surplus of Tri-Continental Corporation as of June
30, 2000, and the related statements of operations for the six months then
ended, and of changes in net investment assets for the six months then ended and
for the year ended December 31, 1999, and the financial highlights for the six
months then ended and for each of the years in the five-year period ended
December 31, 1999. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 2000, by correspondence with the Corporation's
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Tri-Continental Corporation as of June 30, 2000, and the results of its
operations for the six months then ended, and the changes in its net investment
assets and the financial highlights for all the respective stated periods in
conformity with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
New York, New York
August 11, 2000
22
<PAGE>
TRI-CONTINENTAL CORPORATION
PROXY RESULTS
Tri-Continental Corporation Stockholders voted on the following proposals at
the Annual Meeting of Stockholders on May 18, 2000, in Pasadena, California. The
description of each proposal and the voting results are stated below. Each
nominee for Director was elected and the selection of Deloitte & Touche LLP as
auditors for 2000 was ratified.
For Withheld
---------- ----------
Election of Directors:
John R. Galvin 98,081,576 3,184,983
William C. Morris 98,712,893 2,553,666
James Q. Riordan 98,558,518 2,708,041
Robert L. Shafer 98,660,183 2,606,376
For Against Abstain
----------- --------- ---------
Ratification of Deloitte &
Touche LLP as auditors 98,833,761 1,342,797 1,090,001
23
<PAGE>
TRI-CONTINENTAL CORPORATION
BOARD OF DIRECTORS
JOHN R. GALVIN (2,4)
DIRECTOR, Raytheon Company
DEAN EMERITUS, Fletcher School of Law and
Diplomacy at Tufts University
ALICE S. ILCHMAN (3,4)
TRUSTEE, Committee for Economic
Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON (2,4)
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
DIRECTOR, Conoco Inc.
JOHN E. MEROW (2,4)
DIRECTOR, Commonwealth Industries, Inc.
TRUSTEE, New York-Presbyterian Hospital
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
BETSY S. MICHEL (2,4)
TRUSTEE, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS (1)
CHAIRMAN
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
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
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
24
<PAGE>
TRI-CONTINENTAL CORPORATION
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 AND TREASURER
FRANK J. NASTA
SECRETARY
--------------------------------------------------------------------------------
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
25
<PAGE>
TRI-CONTINENTAL CORPORATION
MANAGED BY
J. & W. SELIGMAN & CO.
INCORPORATED
INVESTMENT MANAGERS AND ADVISORS
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
www.tri-continental.com
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.
CETR13 6/00
