-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FzhP2htNrfJNcs9f6GhpjU3UZyk7/nOvX4f07eqWpzDl4G7tgtLSfx6GkMrSLNS3 Cglwbib/VsFuB7Te1pD30w== 0000817841-98-000005.txt : 19980304 0000817841-98-000005.hdr.sgml : 19980304 ACCESSION NUMBER: 0000817841-98-000005 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980302 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SELIGMAN PORTFOLIOS INC/NY CENTRAL INDEX KEY: 0000817841 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05221 FILM NUMBER: 98554265 BUSINESS ADDRESS: STREET 1: 100 PARK AVENUE STREET 2: 7TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2124880200 MAIL ADDRESS: STREET 1: 100 PARK AVENUE STREET 2: 7TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: SELIGMAN MUTUAL BENEFIT PORTFOLIOS INC DATE OF NAME CHANGE: 19920703 N-30D 1 ANNUAL REPORT 12/31/97 A N N U A L R E P O R T SELIGMAN PORTFOLIOS, INC. December 31, 1997 SELIGMAN PORTFOLIOS, INC. February 6, 1998 Dear Contract Owner: J. & W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios, Inc., is pleased to provide the enclosed audited financial statements and accompanying information for Seligman Portfolios, Inc., the underlying investment vehicle for your policy, for the 12 months ended December 31, 1997. Nineteen ninety-seven was the seventh year of economic expansion in the US, with real domestic growth of 3.8%. Consumer price inflation slowed to under 2%, interest rates moved steadily lower, productivity rose, and unemployment levels reached 27-year lows. Meanwhile, the federal budget deficit virtually disappeared and corporate profits posted a third consecutive year of strong gains. The domestic equity markets, as measured by the Dow Jones Industrial Average (DJIA), posted returns in excess of 20% for a third consecutive year -- a feat unmatched in the DJIA's 101-year history. However, the majority of the market advances occurred in the first seven months of the year, as the Asian financial crisis increased uncertainty in the last quarter. Overall, large-capitalization stocks continued to drive the market advances. Despite a brief rally in May, and strong results when the equity markets broadened in the third quarter, the valuations and performance of small-capitalization stocks continued to trail those of large-cap stocks. Although there were occasional setbacks due to fears of inflation and the possibility of Federal Reserve Board interventions, 1997 was also a successful year for the fixed-income markets. Once the effect of the March adjustment in the federal funds rate subsided, yields progressively trended downward and prices improved. The yield on the benchmark 30-year US Treasury bond ended the year at 5.92%, significantly lower than the 6.64% yield on December 31, 1996. Indicating a flattening of the yield curve, the yield on the benchmark three-month US Treasury bill reached 5.34% by year end, somewhat higher than the 5.17% yield on December 31, 1996. Going forward, the outlook for US corporate profits in 1998 is more uncertain due to expectations of modest economic growth and the unforeseeable effects of the Asian crisis. There is also a risk of temporary price deflation linked to the Asian crisis, as those economies seek to export their way out of trouble. Barring problems caused by the tightness of the labor market, we expect a continuation of the current low-inflation and low-interest-rate environment, but no deflation. Internationally, 1997 was dominated by the continuing and worsening economic and financial crisis in Asia. By year end, the crisis, which started in Thailand, had spread throughout Asia to much larger economies such as South Korea. The Japanese economy was also very weak, and stock markets throughout Asia fell very sharply. Thus far, Europe has taken an optimistic view of these events, and with the background of falling inflation and interest rates, stock markets have performed very well. Looking forward, the problems in Asia are unlikely to be resolved quickly. Therefore, our international strategy will continue to favor the European area as a whole, with investments in some selected emerging markets. Thank you for your continued confidence in Seligman Portfolios, Inc. We look forward to serving your investment needs in the years ahead. Respectfully, /s/ William C. Morris ---------------------- William C. Morris Chairman J. & W. Seligman & Co. Incorporated Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Portfolio Overview (unaudited) - ------------------------------------------------------------------------------ LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Principal Amount or Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN BOND PORTFOLIO US Government Securities US Treasury Bonds 8-3/4%, 5/15/2020................. $ 100,000 $ 500,000 US Treasury Bonds 6-5/8%, 2/15/2027................. 1,400,000 1,400,000 US Treasury Notes 6-1/4%, 6/30/2002................. 200,000 200,000 Corporate Bonds Associates Corp. of North America 6-1/2%, 8/15/2002......................... 200,000 200,000 First Data 6-3/8%, 12/15/2007....... 200,000 200,000 Principal Amount or Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Corporate Bonds Cott 8-1/2%, 5/1/2007.............. $200,000 -- Harman International 7.32%, 7/1/2007.................. 200,000 -- Norfolk Southern 6.95%, 5/1/2002......................... 200,000 -- Principal Amount or Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN CAPITAL PORTFOLIO Common Stocks American Skiing.................... 13,400 shs. 13,400 shs. CapStar Hotel...................... 6,400 6,400 Dial............................... 14,000 14,000 Fresh Del Monte Produce............ 21,200 21,200 Gulfstream Aerospace............... 10,600 10,600 Jones Apparel Group................ 9,600 9,600 Ocwen Financial.................... 5,500 10,200 (1) Schwab (Charles)................... 6,100 14,800 (2) SouthTrust......................... 4,500 4,500 Synopsys........................... 8,200 8,200 Principal Amount or Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Columbia/HCA Healthcare............ 7,900 shs. -- ENSCO International................ 8,600 (3) -- Lowe's............................. 6,900 -- Newbridge Networks................. 5,900 -- Quantum............................ 11,800 -- Reynolds & Reynolds (Class A)...... 14,400 -- Santa Fe International............. 5,500 -- Sterling Commerce.................. 8,900 -- Symantec........................... 13,900 6,200 shs. WorldCom........................... 10,200 -- Principal Amount or Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN COMMON STOCK PORTFOLIO Common Stocks Ameritech.......................... 10,500 shs. 10,500 shs. Anheuser-Busch..................... 23,300 23,300 Bristol-Myers Squibb............... 9,000 13,000 Exxon.............................. 16,100 16,100 Merck.............................. 8,300 8,300 Microsoft.......................... 6,300 6,300 Mobil.............................. 13,500 13,500 Philip Morris...................... 23,300 23,300 RJR Nabisco Holdings............... 30,400 34,800 Unicom............................. 29,200 29,200 Principal Amount or Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Burlington Northern Santa Fe....... 4,000 shs. -- Colgate-Palmolive.................. 10,400 -- Corning............................ 9,200 -- FPL Group.......................... 7,200 -- General Re......................... 2,200 1,300 shs. Guidant............................ 7,000 (4) -- KEMET.............................. 15,000 -- Minnesota Mining & Manufacturing... 4,000 -- NationsBank........................ 11,628 -- Pitney Bowes....................... 4,100 -- - ------------------- See footnotes on page P-7. P-1 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Portfolio Overview (unaudited) (continued) - ------------------------------------------------------------------------------ LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO Common Stocks Atmel.............................. 19,700 19,700 Cisco Systems...................... 17,300 34,950 (5) Creative Technology................ 52,700 81,700 Excel Switching.................... 50,000 50,000 First Data......................... 46,100 46,100 Gartner Group (Class A)............ 47,100 47,100 Gateway 2000....................... 22,000 22,000 Lattice Semiconductor.............. 19,300 43,200 Sanmina............................ 17,900 17,900 Teradyne........................... 26,100 62,800 Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Advanced Micro Devices............. 56,000 -- Altera............................. 13,700 9,700 BMC Software....................... 30,100 -- InTEST............................. 100,000 -- MAXIMUS............................ 50,000 -- Quantum............................ 68,800 -- SCI Systems........................ 26,200 (6) -- Veeco Instruments.................. 20,500 -- Western Digital.................... 40,800 -- WorldCom........................... 26,000 -- Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN FRONTIER PORTFOLIO Common Stocks Anchor Gaming..................... 7,800 7,800 Avant!............................ 16,900 16,900 BISYS Group....................... 13,600 13,600 Burr-Brown........................ 16,500 16,500 Castle Dental Centers............. 55,000 55,000 CCA Prison Realty Trust........... 12,800 12,800 Credence Systems.................. 14,000 24,500 JP Foodservice.................... 17,100 17,100 KEMET............................. 20,200 31,600 PMC-Sierra........................ 21,300 21,300 Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Administaff......................... 25,000 -- American Disposal Services.......... 15,000 -- American Medserve................... 25,000 -- BDM International................... 15,020 -- CalEnergy........................... 11,000 17,360 Education Management................ 15,300 -- Electronics for Imaging............. 12,100 -- Memtec (ADRs)....................... 18,700 -- ProMedCo Management................. 50,000 -- Sybron International................ 12,280 -- - ------------------ See footnotes on page P-7. P-2 Seligman Portfolios, Inc. SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- Common Stocks Astra........................... 3,935 3,935 Bristol-Myers Squibb............ 900 900 Compaq Computer................. 1,100 1,100 Dayton Hudson................... 1,100 1,100 Elan (ADRs)..................... 1,525 1,525 General Electric................ 1,100 1,100 Merck........................... 800 800 PepsiCo......................... 2,000 2,000 Sairgroup....................... 70 70 Secom........................... 1,000 1,000 Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Boston Scientific............... 1,000 -- Columbia/HCA Healthcare......... 1,300 -- Empresas ICA Sociedad Controladora (ADRs)........... 3,000 -- Essilor International........... 185 -- HFS............................. 800 -- Richter Gedeon (GDRs)........... 480 -- SGS-Thompson Microelectronics... 845 -- Sol Melia....................... 1,380 -- Sun International Hotels........ 1,200 -- WorldCom........................ 1,600 -- DIVERSIFICATION OF NET ASSETS* December 31, 1997
Percent of Issues Cost Value Net Assets ------ ----------- ----------- ---------- Common Stocks Aerospace......................................... 1 $ 57,040 $ 53,945 1.0 Automotive and Related............................ 3 160,110 155,887 2.9 Business Goods and Services....................... 7 380,263 369,032 6.8 Computer and Technology Related................... 11 502,361 523,174 9.6 Construction and Property......................... 2 79,584 92,374 1.7 Consumer Goods and Services....................... 7 437,898 483,145 8.9 Diversified....................................... 2 147,400 180,087 3.3 Drugs and Health Care............................. 9 584,325 601,322 11.0 Electric and Gas Utilities........................ 2 36,821 33,053 0.6 Electronics....................................... 5 178,646 179,637 3.3 Entertainment and Leisure......................... 6 322,147 337,452 6.2 Financial Services................................ 10 461,334 492,528 9.0 Industrial Goods and Services..................... 4 149,829 153,783 2.8 Manufacturing and Industrial Equipment............ 3 51,939 46,260 0.9 Publishing........................................ 1 69,528 72,835 1.3 Resources......................................... 4 205,545 234,131 4.3 Restaurants....................................... 1 48,081 49,551 0.9 Retailing......................................... 4 156,889 158,435 2.9 Support Services.................................. 2 102,202 102,063 1.9 Telecommunications................................ 9 410,963 438,583 8.1 Tobacco........................................... 1 68,003 105,379 1.9 Transportation.................................... 5 242,434 245,379 4.5 --- ---------- ---------- ----- 99 4,853,342 5,108,035 93.8 Other Assets Less Liabilities..................... 3 311,694 341,197 6.2 --- ---------- ---------- ----- Net Assets........................................ 102 $5,165,036 $5,449,232 100.0 === ========== ========== ===== - ------------------ See footnotes on page P-7.
P-3 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Portfolio Overview (unaudited) (continued) - ------------------------------------------------------------------------------ SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- Common Stocks Burr-Brown........................ 3,700 3,700 CCA Prison Realty Trust........... 2,800 2,800 Cognex............................ 5,400 5,400 Jacor Communications.............. 2,900 2,900 JP Foodservice.................... 4,000 4,000 OM Group.......................... 3,000 3,000 PMTServices....................... 6,200 6,200 Prodega........................... 229 229 Tag Heuer (ADRs).................. 730 730 Telinfo........................... 2,400 2,400 Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Administaff....................... 10,000 -- American Disposal Services........ 5,000 -- BDM International................. 3,700 -- CalEnergy......................... 3,800 3,900 Ekornes........................... 15,600 13,800 Electro Scientific Industries..... 2,790 -- Hucke............................. 5,692 -- Iro............................... 9,170 -- Memtec (ADRs)..................... 7,900 -- Watson Pharmaceuticals............ 2,400 (7) 2,400 DIVERSIFICATION OF NET ASSETS* December 31, 1997
Percent of Issues Cost Value Net Assets ------ ----------- ----------- ---------- Common Stocks Advertising..................................... 3 $ 332,515 $ 399,939 2.0 Automotive Parts Manufacturing.................. 7 488,958 556,943 2.7 Building Materials.............................. 2 318,799 281,589 1.4 Business Goods and Services..................... 25 1,879,192 2,087,593 10.1 Capital Goods................................... 7 507,814 465,509 2.3 Chemicals....................................... 6 259,115 236,466 1.2 Computer Software............................... 13 717,295 1,048,185 5.1 Construction and Property....................... 12 1,181,329 1,290,162 6.3 Consumer Goods and Services..................... 18 1,314,520 1,396,910 6.8 Distributors.................................... 1 26,658 23,003 0.1 Drugs and Health Care........................... 21 1,278,865 1,339,976 6.5 Electric Utilities.............................. 2 38,030 30,775 0.2 Electrical Distribution......................... 2 127,601 126,962 0.6 Electronics..................................... 14 1,213,511 1,172,633 5.8 Energy.......................................... 6 221,396 187,912 0.9 Financial Services.............................. 15 851,650 938,692 4.6 Independent Power Producers..................... 2 297,731 254,925 1.2 Industrial Goods and Services................... 10 682,042 626,775 3.1 Leisure and Hotels.............................. 6 370,366 312,915 1.5 Manufacturing................................... 26 1,623,564 1,568,366 7.6 Media........................................... 11 905,681 1,088,566 5.3 Medical Products and Technology................. 7 396,287 389,564 1.9 Metals.......................................... 4 357,935 181,386 0.9 Paper and Printing.............................. 3 148,885 108,942 0.5 Restaurants..................................... 4 208,308 294,008 1.4 Retailing....................................... 16 1,079,276 840,621 4.1 Support Services................................ 3 275,541 329,339 1.6 Technology...................................... 8 680,801 763,323 3.7 Telecommunications.............................. 7 423,150 317,972 1.6 Transportation.................................. 6 526,611 534,503 2.6 Veterinary Products............................. 1 140,050 111,666 0.5 Miscellaneous................................... 2 28,800 34,033 0.2 --- ----------- ----------- ----- 270 18,902,276 19,340,153 94.3 Other Assets Less Liabilities................... 3 1,196,072 1,164,437 5.7 --- ----------- ----------- ----- Net Assets...................................... 273 $20,098,348 $20,504,590 100.0 === =========== =========== ===== - ----------------- See footnotes on page P-7.
P-4 Seligman Portfolios, Inc. SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- Common Stocks AMF Bowling........................ 9,000 9,000 CMG................................ 3,000 3,000 CMP Media (Class A)................ 3,400 3,400 Creative Technology................ 2,500 2,500 Electronics for Imaging............ 1,300 1,300 Kulicke & Soffa Industries......... 2,200 2,200 MMC Networks....................... 6,000 6,000 Parametric Technology.............. 1,000 1,300 Philips Electronics................ 1,150 1,150 Rhone-Poulenc...................... 1,200 1,200 Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Advanced Micro Devices............. 600 -- Asyst Technologies................. 900 (8) -- BMC Software....................... 400 -- Canon.............................. 1,000 1,000 DSP Communications................. 1,300 -- Nokia.............................. 345 175 Quantum............................ 1,000 -- Rohm............................... 1,000 -- Siliconware Precision Industries (GDRs)................ 1,000 2,150 TDK................................ 1,000 -- DIVERSIFICATION OF NET ASSETS* December 31, 1997
Percent of Issues Cost Value Net Assets ------ ----------- ----------- ---------- Common Stocks Computer and Business Services................. 10 $ 382,825 $ 504,678 13.7 Computer Hardware/Peripherals.................. 9 412,961 381,408 10.3 Computer Software.............................. 13 516,393 554,388 15.0 Distributors................................... 2 61,114 46,173 1.3 Electronics.................................... 14 478,288 351,826 9.5 Electronics Capital Equipment.................. 11 423,677 329,622 8.9 Media.......................................... 1 58,650 58,650 1.6 Medical Products and Technology................ 4 154,518 152,888 4.2 Networking/Communications Infrastructure....... 7 205,843 245,739 6.7 Semiconductors................................. 6 225,652 194,907 5.3 Telecommunications............................. 7 146,098 139,538 3.8 Miscellaneous.................................. 1 175,500 225,000 6.1 -- ---------- ---------- ----- 85 3,241,519 3,184,817 86.4 Other Assets Less Liabilities.................. 3 501,411 501,411 13.6 -- ---------- ---------- ----- Net Assets..................................... 88 $3,742,930 $3,686,228 100.0 == ========== ========== ===== - -------------------- See footnotes on page P-7.
P-5 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Portfolio Overview (unaudited) (continued) - ------------------------------------------------------------------------------ SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- Common Stocks Astra.......................... 5,233 5,233 Banque Nationale de Paris...... 2,209 2,209 Bayerische Vereinsbank......... 1,842 1,842 Benckiser (Series B)........... 3,195 3,195 Desc (ADRs).................... 2,700 5,423 Endesa......................... 7,030 7,030 Lafarge........................ 1,435 1,435 Laporte........................ 7,000 7,000 Magyar Tavkozlesi Rt. "Matav" (ADRs).............. 6,840 6,840 Reuters Holdings............... 8,500 8,500 Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks CSK............................. 2,600 1,700 East Japan Railway.............. 19 7 Empresas ICA Sociedad Controladora (ADRs)........... 5,130 -- Metro........................... 2,110 (9) -- Michelin (Class B).............. 1,579 -- Murata Manufacturing............ 5,000 -- Pioneer Electronic.............. 8,000 3,000 Sumitomo Metal Industries....... 69,000 -- Toshiba......................... 31,000 11,000 VEBA............................ 1,687 -- SELIGMAN INCOME PORTFOLIO (continued) DIVERSIFICATION OF NET ASSETS* December 31, 1997
Percent of Issues Cost Value Net Assets ------ ----------- ----------- ---------- Common Stocks Banking........................................ 11 $ 744,309 $ 880,710 9.6 Building Materials............................. 1 60,524 48,030 0.5 Business Services.............................. 3 88,766 65,237 0.7 Chemicals...................................... 5 410,262 421,622 4.6 Construction and Property...................... 10 297,793 248,107 2.7 Consumer Products.............................. 3 75,809 75,261 0.8 Electronics.................................... 3 219,255 192,065 2.1 Financial Services............................. 3 200,266 227,548 2.5 Health and Household........................... 8 572,770 648,592 7.1 Industrial Goods and Services.................. 9 538,456 574,495 6.3 Insurance...................................... 5 425,131 513,065 5.6 Leisure and Hotels............................. 2 232,003 290,834 3.2 Manufacturing.................................. 7 441,357 425,313 4.6 Media.......................................... 6 334,597 363,196 4.0 Metals......................................... 3 248,425 213,184 2.3 Resources...................................... 11 695,831 873,220 9.5 Restaurants.................................... 1 25,850 22,083 0.2 Retailing...................................... 8 412,345 473,857 5.2 Telecommunications............................. 13 859,756 1,039,096 11.3 Tobacco........................................ 2 166,560 184,100 2.0 Transportation................................. 5 280,393 332,580 3.6 Utilities...................................... 5 476,206 522,045 5.7 Miscellaneous.................................. 3 30,076 26,606 0.2 --- ---------- ---------- ----- 127 7,836,740 8,660,846 94.3 Other Assets Less Liabilities.................. --- 521,619 521,619 5.7 --- ---------- ---------- ----- Net Assets..................................... 127 $8,358,359 $9,182,465 100.0 === ========== ========== ===== - -------------------- See footnotes on page P-7.
P-6 Seligman Portfolios, Inc. LARGEST PORTFOLIO CHANGES During the Six Months Ended December 31, 1997 Principal Amount or Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN HIGH-YIELD BOND PORTFOLIO Corporate Bonds Advanced Micro Devices 11%, 8/1/2003....................... $200,000 $200,000 Ameristar Casino 10-1/2%, 8/1/2004.... 200,000 200,000 Digital Television 12-1/2%, 8/1/2007.. 225,000 225,000 GCI 9-3/4%, 8/1/2007.................. 170,000 170,000 Intermedia Capital Partners IV 11-1/4%, 8/1/2006................... 250,000 500,000 Nextel Communications 0% (10.65%), 9/15/2007................. 350,000 350,000 Paging Network 10%, 10/15/2008........ 250,000 450,000 Powertel 11-1/8%, 6/1/2007............ 185,000 225,000 Price Communications Wireless 11-3/4%, 7/15/2007.................. 250,000 250,000 RCN 10%, 10/15/2007................... 190,000 190,000 Principal Amount or Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Corporate Bonds Berry Plastics 12-1/4%, 4/15/2004...... $400,000 -- Comcast 10-5/8%, 7/15/2012............. 100,000 $ 50,000 Commnet Cellular 11-1/4%, 7/1/2005..... 150,000 -- Fonorola 12-1/2%, 8/15/2002............ 200,000 -- Midland Cogeneration Venture 11-3/4%, 7/23/2005................... 125,000 125,000 Pierce Leahy 11-1/8%, 7/15/2006........ 155,000 75,000 Plitt Theaters 10-7/8%, 6/15/2004...... 125,000 125,000 Spinnaker Industries 10-3/4%, 10/15/2006.................. 150,000 -- Syratech 11%, 4/15/2007................ 150,000 -- S.D. Warren 12%, 12/15/2004............ 150,000 -- Principal Amount or Shares --------------------- Holdings Additions Increase 12/31/97 - --------- -------- -------- SELIGMAN INCOME PORTFOLIO Common Stocks American General................... 3,200 shs. 3,200 shs. AMP................................ 3,300 3,300 Atlantic Richfield................. 2,600 2,600 Exxon.............................. 3,000 3,000 PepsiCo............................ 3,700 3,700 Sara Lee........................... 3,200 3,200 Convertible Preferred Stocks Federal-Mogul 7%................... 4,000 4,000 Corporate Bonds Associates Corp. of North America 6-1/2%, 8/15/2002................ $300,000 $300,000 US Government Securities US Treasury Notes 6-1/4%, 6/30/2002....................... 500,000 500,000 US Treasury Notes 6-5/8%, 5/15/2007....................... 500,000 500,000 Principal Amount or Shares ---------------------- Holdings Reductions Decrease 12/31/97 - ---------- -------- -------- Common Stocks Bell Atlantic........................ 2,700 shs. 1,300 shs. CNF Transportation................... 10,000 -- ConAgra.............................. 3,141 5,000 GATX................................. 4,047 1,700 Inland Steel Industries.............. 5,406 -- Convertible Preferred Stocks Greenfield Capital Trust 6%.......... 3,000 -- Unocal 6-1/4%........................ 4,464 -- Corporate Bonds Harman International Industries 7.32%, 7/1/2007.................... $300,000 -- Norfolk Southern 6.95%, 5/1/2002.......................... 300,000 -- Time Warner 9-1/8%, 1/15/2013........ 300,000 -- - ------------------- Largest portfolio changes from the previous midyear to the current year-end are based on cost of purchases and proceeds from sales of securities. * "Diversification of Net Assets" is included for the Seligman Global Portfolios because their portfolio holdings are listed by country rather than by industry in the "Portfolios of Investments". (1) Includes 4,700 shares received as a result of a 2-for-1 stock split. (2) Includes 2,900 shares received as a result of a 3-for-2 stock split. (3) Includes 4,300 shares received as a result of a 2-for-1 stock split. (4) Includes 3,500 shares received as a result of a 2-for-1 stock split. (5) Includes 11,650 shares received as a result of a 3-for-2 stock split. (6) Includes 13,100 shares received as a result of a 2-for-1 stock split. (7) Includes 1,200 shares received as a result of a 2-for-1 stock split. (8) Includes 300 shares received as a result of a 2-for-1 stock split. (9) Includes 1,231 shares received as a result of a 2-for-1 stock split. Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Annual Performance Overview - ------------------------------------------------------------------------------ The following charts compare a $10,000 hypothetical investment made in each of the Portfolios of Seligman Portfolios, Inc. (with the exception of Seligman Cash Management Portfolio), since inception through December 31, 1997, to a $10,000 hypothetical investment made in the appropriate benchmark indices and averages for the same period. Accompanying each chart is a discussion of the investment strategy and sector performance that affected the Portfolio during the past year. Seligman Bond Portfolio The chart and total returns do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Lipper Lehman Bros. Corporate Debt Seligman Government BBB-Rated Date Bond Portfolio Bond Index Funds Average 6/21/88 10000 6/30/88 10000 10000 10000 9/30/88 10100 10169 10206 12/31/88 10101 10265 10337 3/31/89 10121 10373 10463 6/30/89 10670 11207 11102 9/30/89 10691 11300 11162 12/31/89 10979 11725 11331 3/31/90 10797 11580 11123 6/30/90 11119 11985 11479 9/30/90 11162 12085 11351 12/31/90 11653 12748 11779 3/31/91 11924 13025 12269 6/30/91 12094 13201 12537 9/30/91 12727 13953 13269 12/31/91 13352 14701 13955 3/31/92 13121 14444 13944 6/30/92 13485 15016 14496 9/30/92 14081 15757 15207 12/31/92 14099 15764 15216 3/31/93 14548 16476 16064 6/30/93 14879 16952 16645 9/30/93 15249 17503 17265 12/31/93 15224 17444 17369 3/31/94 14787 16919 16767 6/30/94 14622 16726 16417 9/30/94 14742 16796 16522 12/31/94 14708 16855 16509 3/31/95 15216 17649 17304 6/30/95 16263 18743 18604 9/30/95 16596 19075 19048 12/31/95 17530 19947 19970 3/31/96 16942 19496 19484 6/30/96 16875 19589 19562 9/30/96 17043 19918 19983 12/31/96 17546 20500 20713 3/31/97 17422 20334 20562 6/30/97 17989 21040 21397 9/30/97 18557 21744 22217 12/31/97 19122 22466 22784 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception Seligman Bond Portfolio 8.98% 6.29% 7.04% Lehman Brothers Government Bond Index 9.59 7.34 8.88* Lipper Corporate Debt BBB-Rated Funds Average 10.00 8.41 9.05* *From June 30, 1988. Nineteen ninety-seven was a year of solid economic growth accompanied by disinflation (a slowdown in the rate of inflation). However, it took time for bond market participants to be convinced that solid economic growth could coexist with low inflation. This sentiment was shared by the Federal Reserve Board, which raised the federal funds rate by 25 percentage points in March. The tightening of monetary policy drove the benchmark 30-year US Treasury bond yield higher, peaking at 7.17% in April. However, as the year progressed, bond yields traded lower as it became evident that the rate of inflation was declining. In the fixed-income markets, positive sentiment gained additional momentum during the fourth quarter, as the Asian crisis led to a surge in demand for US Treasury securities. After the Fed raised the federal funds rate to 5.5% late in the first quarter, the Portfolio's maturities were shortened in anticipation of further monetary tightening and robust economic growth. This was a successful strategy until economic activity moderated in the second quarter. Thereafter, the bond market reversed course and rallied through July. The Portfolio lagged its peers during the rally but closed the gap in the fourth quarter, when the Portfolio's maturities were lengthened. Longer maturities were purchased in response to the disinflationary trend, the surging US dollar, and the Asian financial crisis. As we enter 1998, the Portfolio's longer maturities remain in the portfolio, as the activity in the global financial markets is expected to slow the US economy. The Fed may indeed need to lower interest rates to counter the effects of the Asian crisis on the US economy. Further, the declining budget deficit could reduce the need for the US Treasury to issue securities. If US Treasury issuance declined, the balance of supply and demand would be altered, with greater capital chasing fewer bonds. Any of these events could lead to further declines in bond yields and to positive returns for the Portfolio. Seligman Capital Portfolio The chart and total returns do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Lipper Capital Russell Capital Appreciation Lipper MidCap MidCap Date Portfolio Funds Average S&P 500 Funds Average Growth Index 6/21/88 10000 6/30/88 10000 10000 10000 10000 10000 9/30/88 10090 9879 10034 9740 9621 12/31/88 10060 9955 10344 9810 9680 3/31/89 10240 10732 11077 10588 10290 6/30/89 10840 11630 12056 11516 11301 9/30/89 12040 12827 13347 12824 12654 12/31/89 11717 12604 13622 12562 12727 3/31/90 11344 12248 13212 12502 12279 6/30/90 12715 12963 14043 13506 13330 9/30/90 9720 10798 12113 10867 10632 12/31/90 11344 11503 13199 12000 12074 3/31/91 13597 13596 15116 14679 14861 6/30/91 13778 13439 15082 14514 14630 9/30/91 15455 14599 15888 15897 15830 12/31/91 18042 15941 17220 17620 17753 3/31/92 16842 16005 16784 17662 17212 6/30/92 15601 15441 17103 16581 16411 9/30/92 16791 15804 17642 17177 17289 12/31/92 19268 17405 18529 19579 19298 3/31/93 19904 18125 19339 19914 19472 6/30/93 19552 18684 19434 20461 19474 9/30/93 20846 20034 19935 22006 20787 12/31/93 21514 20594 20398 22527 21458 3/31/94 20837 19911 19625 21833 20793 6/30/94 19010 19069 19707 20714 19878 9/30/94 20736 20363 20671 22437 21289 12/31/94 20526 20047 20666 22254 20993 3/31/95 21802 21382 22679 23812 23263 6/30/95 23112 23367 24845 25913 25131 9/30/95 25196 25652 26820 28708 27606 12/31/95 26102 26371 28435 29138 28125 3/31/96 27853 27942 29962 30903 29939 6/30/96 29761 29327 31307 32532 31059 9/30/96 30479 29981 32275 33601 32115 12/31/96 29891 30847 34966 34330 33043 3/31/97 28696 29831 35904 32254 31837 6/30/97 32617 34031 42172 37311 36523 9/30/97 36444 38525 45331 42726 41633 12/31/97 36259 37057 46633 41256 40489 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception Seligman Capital Portfolio 21.31% 13.48% 14.47% Lipper Capital Appreciation Funds Avg.** 20.13 16.32 14.77* Lipper Mid Cap Funds Average 20.18 16.08 16.07* Russell Midcap Growth Index 22.53 15.97 15.84* S&P 500** 33.36 20.27 17.58* * From June 30, 1988. ** Seligman Capital Portfolio will no longer be compared to the Lipper Capital Appreciation Funds Average after December 31, 1997, because the Portfolio invests primarily in mid-capitalization securities. Seligman Capital Portfolio will also no longer be compared to the Standard & Poor's 500 Composite Stock Price Index (S&P 500) after December 31, 1997, for the same reason. The economic expansion continued in 1997, supporting strong corporate earnings and low interest rates. While the financial markets responded, reaching new highs, large-capitalization stocks were the primary beneficiaries of the ideal economic background. Despite high valuations, investors moved more assets into large-caps due to the liquidity found there. This trend was only reinforced by the Asian financial crisis. While mid-capitalization stocks did not experience the same run-up in valuations as was found among their large-cap counterparts, they still performed well for the year. - -------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-8 Seligman Portfolios, Inc. - ----------------------------------------------------------------------------- December 31, 1997 - ----------------------------------------------------------------------------- Seligman Capital Portfolio (continued) While we continued to identify and invest in growth stocks selling at attractive valuations, a significant restructuring of the Portfolio took place in 1997. Large-cap holdings that had been long-term positions in the portfolio were sold. The Portfolio is now more firmly placed in the mid-cap asset class. Exceptional companies with leading market shares and strong earnings prospects were selected, which enhanced investment performance. Specifically, the Portfolio's investments in the financial area improved the Portfolio's results relative to its peer group. Healthy economic growth, low inflation, and consolidation during the year benefited the Portfolio's financial services and savings and loan companies. Another area that improved results was energy. Here, the Portfolio's weighting was increased to participate in the accelerating earnings growth found in the sector. On the other hand, the Portfolio's technology holdings performed poorly, as the Asian debacle resulted in decreased orders for many mid-cap technology companies in the fourth quarter. Mid-cap health care services companies also had a poor year, due to deteriorating fundamentals. While both the technology and the health care sectors experienced weakness in 1997, they each offer lower valuations and good recovery potential. Going forward, the valuations and growth opportunities found in mid-cap stocks still offer significant value relative to large-cap stocks. As mid-cap companies tend to have a greater portion of operations linked to the domestic markets, they are less exposed to the eventual repercussions of the Asian financial crisis than large multinational companies. We believe that this difference in international exposure, combined with more attractive valuations and greater future earnings growth potential, could attract investor attention to mid-cap stocks in 1998. Seligman Common Stock Portfolio The chart and total returns do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Lipper Common Stock Growth & Income Date Portfolio Funds Average S&P 500 6/21/88 10000 10000 10000 6/30/88 10000 10000 10000 9/30/88 10190 10036 10034 12/31/88 10180 10250 10344 3/31/89 10581 10912 11077 6/30/89 11223 11683 12056 9/30/89 12317 12689 13347 12/31/89 12635 12685 13622 3/31/90 12522 12378 13212 6/30/90 13315 13015 14043 9/30/90 10965 11280 12113 12/31/90 12237 12123 13199 3/31/91 14425 13853 15116 6/30/91 14287 13826 15082 9/30/91 15281 14598 15888 12/31/91 16295 15646 17220 3/31/92 16604 15661 16784 6/30/92 16472 15709 17103 9/30/92 17146 16099 17642 12/31/92 18272 17068 18529 3/31/93 18928 17866 19339 6/30/93 19127 18027 19434 9/30/93 19608 18662 19935 12/31/93 20454 19101 20398 3/31/94 19621 18521 19625 6/30/94 19730 18468 19707 9/30/94 20727 19259 20671 12/31/94 20463 18963 20666 3/31/95 21933 20504 22679 6/30/95 23314 22142 24845 9/30/95 24769 23759 26820 12/31/95 26044 24908 28435 3/31/96 27832 26351 29962 6/30/96 29097 27236 31307 9/30/96 29654 28039 32275 12/31/96 31273 30161 34966 3/31/97 31627 30502 35904 6/30/97 35654 34891 42172 9/30/97 38345 38060 45331 12/31/97 37938 38361 46633 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception Seligman Common Stock Portfolio 21.31% 15.73% 15.01% Lipper Growth and Income Funds Average 27.19 17.58 15.19* S&P 500 33.36 20.27 17.58* *From June 30, 1988. While the equity markets ended the year on a down note, overtaken by concerns that future corporate earnings would be impacted by the Asian financial crisis, the year as a whole was a success. The Portfolio was well positioned to participate in the appreciation of the equity markets in 1997 and saw particularly improved relative results in the third quarter when the markets broadened. However, in the fourth quarter, as domestic and foreign investors funneled assets into the largest US stocks, the Portfolio's results relative to the S&P 500 were dampened. Seligman Common Stock Portfolio continues to offer investors lower volatility than the S&P 500. We have been restructuring the portfolio to further enhance these attributes. The number of common stocks in the Portfolio was selectively reduced from more than 100 in June to just under 80 at this time. We continue to identify attractively-valued stocks with the potential for accelerating earnings that have a significant yield advantage relative to other companies in their industry. The average price-to-earnings ratio of the issues in the Portfolio remains lower than the S&P 500 while the issues provide higher projected earnings growth. The Portfolio's holdings in the aerospace/defense and machinery and industrial equipment industries were most beneficial to overall results. Two other areas of strength were found in health care and financial stocks. Pharmaceutical stocks benefited from the success of new products and the growth of sales, and financial stocks were supported by the low-interest-rate environment, consolidation in the industry, and the growth of the retirement industry. The two most significant areas of weakness in the Portfolio were in electric and gas utilities and technology-related stocks such as electronics and semiconductors. Utility stocks were underweighted in the Portfolio because their valuations were high relative to their earnings growth and this dampened results when these stocks rallied. In technology, stocks suffered from the negative earnings reports of several industry leaders and valuations were further reduced by the developing Asian financial crisis. It is likely that a difficult investment environment will persist in 1998 and that the potential slowdown in the rate of economic expansion will increase the importance of sound stock selection. If, as we expect, investors pay greater attention to valuations and earnings records in 1998, Seligman Common Stock Portfolio should benefit, as it holds companies with strong earnings records, good future earnings growth potential, and reasonable valuations as well as attractive dividend yields. - -------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-9 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Annual Performance Overview (continued) - ------------------------------------------------------------------------------ Seligman Communications and Information Portfolio The chart and total return do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Lipper Communications & Science & Information Technology Date Portfolio Funds Average S&P 500 9/30/94 10000 10000 10000 10/11/94 10000 10000 10000 12/31/94 10440 10632 9998 3/31/95 11030 11344 10972 6/30/95 14690 13643 12020 9/30/95 16950 15820 12975 12/31/95 14464 14931 13756 3/31/96 13618 15032 14495 6/30/96 13993 16063 15146 9/30/96 15139 17373 15614 12/31/96 15739 18166 16916 3/31/97 14271 16520 17370 6/30/97 16961 19541 20402 9/30/97 22018 23299 21930 12/31/97 19237 20102 22560 Average Annual Total Returns+ Since One Yr. Inception Seligman Communications and Information Portfolio 22.22% 22.49% Lipper Science & Technology Funds Average 10.65 23.93* S&P 500 33.36 28.40* *From September 30, 1994. During 1997, technology stocks were subject to wide fluctuations, with selloffs from February to May and again in November and December. The last quarter of the year was the most difficult, as negative earnings announcements from bellwether stocks and fears regarding the impact of the Asian crisis on the sector led to a pronounced selloff. Semiconductor companies, which had performed strongly until October, experienced the greatest depreciation due to the perception that they were most vulnerable to reductions in Asian demand for high-technology products. Further, the growing popularity of low-cost personal computers (PCs) caused concern regarding the future profitability of PC manufacturers. The Portfolio, however, performed very well relative to its peer group, supported by the performance of its radio broadcasting stocks, which benefited from a strong advertising market and continued consolidation. Also improving results were enterprise storage stocks, companies that provide access to data such as inventory, which benefited from insatiable storage demand, stable pricing, and gains in market share. The weakest area in the portfolio was the networking industry, which was affected by the slowdown in the industry's growth, a decline in product prices, and a delay in the introduction of the new 56 Kilobit modem standard, which hurt overall modem sales. Several issues are currently impacting the technology sector's performance. First, 1998 growth projections for worldwide semiconductor capital equipment spending have fallen dramatically. Second, memory chips experienced a second consecutive year of significant price declines in 1997, and after the onset of the Asian financial crisis, South Korean chip companies announced large cuts to their capital spending plans for 1998. Third, sub-$1,000 PCs are demonstrating growing popularity. While the trend toward cheaper PCs benefits consumers, PC resellers and retailers, and the PC companies themselves garner far less revenue and profit per unit sold. Finally, there are the broad ramifications of the Asian financial crisis on US technology stocks. Going forward, the Portfolio has increased its positions in the rapidly-growing sectors most likely to be unscathed by the Asian crisis. These include: enterprise storage companies; entertainment software companies; information services and computer software companies; mechanical and integrated circuit design software firms; and radio broadcasting companies. Further, although earnings-estimate revisions for technology companies have been mostly downward in the past four months, we remain optimistic regarding the Portfolio's long-term appreciation potential and anticipate a more positive environment in the second half of 1998. There are several reasons for this positive longer-term outlook: 1) The prices of US technology stocks have already been discounted and investors should begin to factor in 1999 earnings expectations by mid 1998; 2) The semiconductor capital spending cutbacks in South Korea and Japan will help restore the global chip industry's long-term health; 3) New operating systems from Microsoft and chipsets from Intel should move the PC industry back toward high-performance machines with more memory and faster processors; and 4) The dramatic improvements in communications bandwidth, likely to be seen by early 1999, should spur accelerated development of the Internet and renewed growth for technology in general. - -------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-10 Seligman Portfolios, Inc. - ----------------------------------------------------------------------------- Decemer 31, 1997 - ----------------------------------------------------------------------------- Seligman Frontier Portfolio The chart and total return do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Lipper Lipper Seligman Russell Russell Small Cap Small Cap Frontier 2000 Growth 2000 Growth Fund Funds Date Portfolio Index Index Index Average 10/11/94 10000 10000 10000 10000 10000 12/31/94 10580 9926 9814 9985 9977 3/31/95 11300 10470 10266 10546 10552 6/30/95 12260 11508 11228 11522 11496 9/30/95 13780 12816 12338 12963 12848 12/31/95 14101 13005 12605 13143 13133 3/31/96 15443 13752 13249 13884 13996 6/30/96 17065 14556 13912 14985 15073 9/30/96 17731 14431 13960 15174 15380 12/31/96 17476 14470 14687 15030 15752 3/31/97 15855 12952 13928 13613 14702 6/30/97 19203 15225 16186 15936 17218 9/30/97 21455 17800 18595 18368 20043 12/31/97 20331 16342 17972 17292 19040 Average Annual Total Returns+ Since One Yr. Inception Seligman Frontier Portfolio 16.33% 24.61% Lipper Small Cap Funds Average 20.87 21.88* Lipper Small Cap Fund Index** 15.05 18.32* Russell 2000 Index 22.36 19.72* Russell 2000 Growth Index 12.94 16.29* *From September 30, 1994. ** Seligman Frontier Portfolio will no longer be compared to the Lipper Small Cap Fund Index (formerly, the Lipper Small Company Growth Fund Index) after December 31, 1997, because it only measures the performance of 30 funds. The Manager believes that the Lipper Small Cap Funds Average is more appropriate as it represents the performance of the entire universe of funds that have similar investment objectives to the Portfolio's. In 1997, we witnessed continued economic growth, very little inflation, and continued appreciation in the equity markets. However, there was a significant discrepancy in the performances of large-capitalized and small-capitalized stocks, as market participants focused their attention on the largest, most liquid stocks due to their predictable earnings growth. Beginning in May, however, small-cap stocks began to outperform large-cap stocks, and the Portfolio's results improved accordingly. The longest period of out performance occurred in the third quarter, when the markets broadened. Two major factors played a part in this reversal: 1) The valuations of small-cap stocks remained relatively inexpensive, whereas the valuations of large-cap stocks neared 10-year highs; and 2) The projected earnings-per-share growth of small-caps remained significantly greater than that of large-caps. Another catalyst was the anticipated slowing in the earnings growth of large companies, which was partially tied to the enduring strength of the US Dollar and its negative impact on the overseas earnings of large companies. In the Portfolio, companies providing staffing-related services generally did well, benefiting from the new job opportunities created as the economy expanded. Corporate outsourcing also continued to grow in importance and service providers had strong results. The financial services group was instrumental to the performance of the Portfolio, as the low-interest-rate environment generally benefited these stocks. We continued to seek those financial companies with the most dynamic management teams and strong prospects for earnings growth. On the other hand, the Portfolio's drug and health care stocks had decidedly mixed results this year due to regulatory and cost-control concerns. We believe that the attractive earnings found in small-cap stocks should support the small-cap market in 1998. The small-cap growth stocks that are held in Seligman Frontier Portfolio are still trading at price-to-earnings ratios that are less than their projected earnings growth rates. As the Portfolio has been constructed to provide good long-term earnings growth and capital appreciation potential while maintaining reasonable valuations, it should continue to benefit from the strength of small-cap stocks. - -------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-11 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Annual Performance Overview (continued) - ------------------------------------------------------------------------------ Seligman Henderson Global Growth Opportunities Portfolio The chart and total return do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Henderson Global Growth Lipper Opportunities Global MSCI Date Portfolio Funds Avg. World Index 5/1/96 10000 10000 10000 5/31/96 10000 10121 10010 6/30/96 10010 10100 10062 7/31/96 9480 9652 9708 8/31/96 9790 9904 9821 9/30/96 9810 10201 10207 10/31/96 9650 10200 10281 11/30/96 9980 10694 10859 12/31/96 9922 10702 10687 1/31/97 10102 10942 10818 2/28/97 10072 10980 10944 3/31/97 10022 10784 10730 4/30/97 10072 10922 11083 5/31/97 10773 11599 11769 6/30/97 11274 12074 12357 7/31/97 11784 12669 12928 8/31/97 11164 11987 12066 9/30/97 11694 12703 12723 10/31/97 11043 11884 12055 11/30/97 11164 11906 12271 12/31/97 11169 12049 12422 Average Annual Total Returns+ Since One Yr. Inception Seligman Henderson Global Growth Opportunities Portfolio 12.57% 6.85% Lipper Global Funds Average 12.59 11.80* MSCI World Index 16.23 13.86* *From April 30, 1996. The global economic expansion and the bull market in stocks continued through 1997, though with great differences among the various regions. In the US, rapid economic growth and subdued inflation produced a powerful combination of strong earnings and falling bond yields, thereby supporting another stellar year for the stock market. In Continental Europe, low interest rates and widespread corporate re structuring boosted earnings and markets. By contrast, Asia became embroiled in financial turmoil as many of the region's currencies suffered from a substantial depreciation. During the year, the Portfolio's exposure to the Asian markets was significantly reduced in favor of Europe. For much of the period, the largest allocation in the Portfolio was to the Productivity theme, with technology and outsourcing stocks producing some of the best returns. Toward the end of the year, with increasing volatility in global markets and the relative weakness in demand for technology products, we shifted the allocation toward the Quality of Life theme where sectors such as health care would provide more stable growth. Looking ahead, Asia's malaise implies that a period of slower global growth is all but inevitable. As a result, estimates for prospective economic and earnings growth have been reduced everywhere. Unfortunately, slower growth worldwide raises economic risks in Asia and market valuation risks in Europe, and increases the risk of earnings disappointments in the US. However, in such an environment, quality growth stocks should do well. Using our thematic approach, we are increasingly focusing on such stocks for the next year. Seligman Henderson Global Smaller Companies Portfolio The chart and total return do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Henderson Global Smaller Lipper Global MSCI Salomon Bros Companies Small Cap World World EM Date Portfolio Funds Avg. Index Index 10/11/94 10000 10000 10000 10000 12/31/94 10353 9649 9939 9724 3/31/95 10594 9585 10417 9997 6/30/95 10886 10373 10875 10404 9/30/95 11860 11311 11496 11110 12/31/95 12152 11345 12057 11352 3/31/96 13246 12199 12563 11969 6/30/96 14589 12993 12941 12460 9/30/96 14464 12860 13128 12459 12/31/96 14421 13155 13744 12774 3/31/97 14196 12939 13799 12396 6/30/97 15810 14231 15892 13793 9/30/97 16023 15012 16363 14658 12/31/97 14915 13665 15975 13844 Average Annual Total Returns+ Since One Yr. Inception Seligman Henderson Global Smaller Companies Portfolio 3.43% 13.20% Lipper Global Small Cap Funds Average 3.88 10.07* MSCI World Index** 16.23 15.48* Salomon Brothers World EM Index 8.38 10.53* *From September 30, 1994. ** Seligman Henderson Global Smaller Companies Portfolio will no longer be compared to the Morgan Stanley Capital International World Index (MSCI World Index) after December 31, 1997, because this Index reflects the performance of stocks with capitalizations of all sizes, and the Portfolio invests primarily in small-capitalization stocks. Throughout 1997, investors were focused on liquid issues, which tend to be large-capitalization stocks. The uncertainty about the impact of the Asian turmoil on world growth only reinforced investors' preference for large companies. The performance of small-capitalization stocks was weak everywhere, with the exception of the UK--where the sterling's strength helped turn a flat local return into a positive US dollar return. In the US, we continued to emphasize the business services industry, due to corporate America's growing reliance on outsourcing, and we also increased the Portfolio's positions in companies that provide temporary staffing services as the economic expansion created new job opportunities. In the UK, we continued to emphasize companies with above-market earnings growth and the Portfolio benefited from the rally that took place at the beginning of 1997. In Continental Europe, investors focused on large, multinational companies, which consequently outperformed small companies. - ------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-12 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ December 31, 1997 - ------------------------------------------------------------------------------ Seligman Henderson Global Smaller Companies Portfolio (continued) In Japan, confidence in the economic recovery evaporated as the year progressed, which particularly affected the more domestically-oriented small-cap stocks. Concern about further weakness in the Japanese economy led us to reduce the Portfolio's Japanese weighting. In the Pacific region, the devaluation of the Thai baht precipitated a crisis that spread in the second half of the year, resulting in substantial reductions in the prices of large and small companies alike. We began to significantly reduce the Portfolio's weighting in the Pacific basin in June 1997, and our investments are now almost entirely in Hong Kong, Australia, and Singapore--which we believe have the strongest prospects in the region. Looking ahead, there is little doubt that the valuations of small caps around the world are attractive. However, the focus may remain on large companies, with small caps sidelined, at least until investors come to terms with the threat of deflation (a decline in the price of goods and services) and the implications of the Asian financial crisis. Seligman Henderson Global Technology Portfolio The chart and total return do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Henderson Global Lipper Technology Global MSCI Date Portfolio Funds Avg. World Index 5/1/96 10000 10000 10000 5/31/96 10000 10121 10010 6/30/96 9860 10100 10062 7/31/96 8830 9652 9708 8/31/96 9250 9904 9821 9/30/96 9970 10201 10207 10/31/96 9880 10200 10281 11/30/96 10400 10694 10859 12/31/96 10401 10702 10687 1/31/97 11137 10942 10818 2/28/97 10663 10980 10944 3/31/97 9957 10784 10730 4/30/97 10109 10922 11083 5/31/97 11379 11599 11769 6/30/97 11328 12074 12357 7/31/97 12638 12669 12928 8/31/97 12729 11987 12066 9/30/97 13525 12703 12723 10/31/97 12648 11884 12055 11/30/97 12779 11906 12271 12/31/97 12432 12049 12422 Average Annual Total Returns+ Since One Yr. Inception Seligman Henderson Global Technology Portfolio 19.53% 13.94% Lipper Global Funds Average 12.59 11.80* MSCI World Index 16.23 13.86* *From April 30, 1996. In 1997, the global technology sector continued to display considerable volatility. The first nine months of the year were marked by a sharp correction in the US technology sector from mid February through late April and, subsequently, an equally dramatic recovery. The last quarter of the year, however, was dominated by the economic crisis in Asia which produced a substantial correction in technology shares in all major markets with the exception of the UK. Over the year, the best US dollar returns were generated in the US, but good returns were also produced in Continental Europe. Demand in the industry remained robust for most of the year, with unit PC sales growth continuing in the double digits and healthy demand evident in the networking, software, and communications markets. In the early part of the year, the strongest performance by far was delivered by the semiconductor sector, where an upturn in orders produced some spectacular share price performance. Unfortunately, much of this was reversed in the last three months of the year. This pattern of early gains being subsequently eroded by worries about Asian demand was also a feature of the PC and wireless communications stocks. Generally, the strongest and most consistent performers during the year were our holdings in the information technology consulting area, where the approach of the year 2000 and of the single European currency have generated boom conditions for many companies. Throughout the year, we maintained only a very modest weighting in Asia, which was cut back even further in the third quarter. While we continue to seek buying opportunities in those markets, particularly in view of their recent collapse, the best value is still to be found in the US and in Europe. It is in these regions that we have invested the cash that was built up in the third quarter. Although the first half of 1998 may prove difficult for technology companies exposed to the PC, peripherals, and wireless markets, the stock markets have already discounted the prices of these stocks accordingly. Other areas of the technology sector are growing rapidly. We expect corporate earnings growth to slow in most countries in 1998, which may attract increased investor attention to the superior growth characteristics of the technology industry. - ---------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-13 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Annual Performance Overview (continued) - ------------------------------------------------------------------------------ Seligman Henderson International Portfolio The chart and total returns do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Henderson Lipper International International EAFE Date Portfolio Funds Avg. Index 5/3/93 10000 10000 10000 6/30/93 10010 10002 10057 9/30/93 10480 10875 10731 12/31/93 11440 11903 10831 3/31/94 10987 11804 11216 6/30/94 11399 11934 11797 9/30/94 11751 12307 11816 12/31/94 11591 11815 11704 3/31/95 11428 11617 11931 6/30/95 11765 12094 12028 9/30/95 12603 12682 12539 12/31/95 12905 12943 13057 3/31/96 13228 13518 13443 6/30/96 13603 14010 13666 9/30/96 13520 13943 13659 12/31/96 13819 14497 13887 3/31/97 13925 14687 13680 6/30/97 15802 16322 15466 9/30/97 15716 16530 15367 12/31/97 14973 15269 14173 Average Annual Total Returns+ Since One Yr. Inception Seligman Henderson International Portfolio 8.35% 9.04% MSCI EAFE Index 2.06 7.75* Lipper International Funds Average 5.32 9.48* *From April 30, 1993. Turmoil in Asia and talk of global deflation led to a fair amount of volatility and a divergence in performance across the major regions. The UK and Continental European markets closed the year at or near record highs, while Japan and Asia continued to flounder. The Portfolio's results were therefore helped by our decision to underweight both the Pacific basin and Japan. In 1997, the UK was one of the best performing regions, boosted by a robust domestic economy. In a global context, UK equities continue to look reasonably valued, and we increased the Portfolio's exposure there. Elsewhere in Continental Europe, performance was strong, helped by the Economic and Monetary Union (EMU) convergence story, corporate restructurings, and a spate of mergers and acquisitions. We have increased our Continental European weighting as we expect stronger economic growth and accelerating earnings going forward. In Japan, the market suffered from the debilitating effect of April's tax rise on the economy and from many bank and financial failures related to heavy investments in Southeast Asia. Elsewhere in Asia, 12-month losses were great, with investors focusing on economic instability and a severe regional credit crunch. Finally, amidst the volatility in world markets and fourth quarter declines, returns in the emerging markets were still quite impressive. Overall, uncertainty is likely to persist in Asia and the global markets seem set to remain volatile early in 1998. However, we believe the Asian crisis will not derail the global economic recovery and while the Asian and Japanese equity markets will probably remain depressed in the next few months, both have significant upside potential over the longer term. In the near term, Continental Europe, the UK, Latin America, and Emerging Europe offer the greatest upside potential, as their positive economic and interest rate backgrounds should endure and their earnings growth has the greatest potential. - ------------------ The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-14 Seligman Portfolios, Inc. - ----------------------------------------------------------------------------- December 31, 1997 - ----------------------------------------------------------------------------- Seligman High-Yield Bond Portfolio The chart and total return do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Henderson Lipper Merrill Lynch High-Yield High-Yield High-Yield Lipper Bond Bond Master High Current Date Portfolio Fund Index** Index Yield 5/1/95 10000 10000 10000 10000 5/31/95 10000 10227 10312 10235 6/30/95 10030 10269 10390 10262 7/31/95 10160 10480 10509 10447 8/31/95 10150 10504 10573 10472 9/30/95 10300 10624 10693 10586 10/31/95 10440 10704 10769 10670 11/30/95 10540 10758 10875 10741 12/31/95 10737 10919 11049 10900 1/31/96 11034 11133 11223 11139 2/29/96 11177 11245 11240 11244 3/31/96 11126 11198 11210 11210 4/30/96 11249 11287 11216 11309 5/31/96 11371 11371 11296 11411 6/30/96 11341 11378 11364 11432 7/31/96 11371 11429 11441 11486 8/31/96 11525 11611 11559 11660 9/30/96 11872 11907 11808 11969 10/31/96 11893 11958 11938 12033 11/30/96 12097 12158 12179 12252 12/31/96 12307 12303 12273 12402 1/31/97 12428 12422 12367 12538 2/28/97 12692 12628 12540 12758 3/31/97 12252 12353 12401 12488 4/30/97 12406 12457 12542 12595 5/31/97 12769 12783 12796 12937 6/30/97 13022 13000 12990 13149 7/31/97 13373 13344 13302 13503 8/31/97 13450 13369 13278 13533 9/30/97 13824 13688 13498 13852 10/31/97 13780 13634 13588 13786 11/30/97 13967 13729 13717 13888 12/31/97 14164 13891 13847 14035 Average Annual Total Returns+ Since One Yr. Inception Seligman High-Yield Bond Portfolio 15.09% 13.92% Lipper High Current Yield 13.26 13.56* Lipper High-Yield Bond Fund Index** 12.91 13.08* Merrill Lynch High Yield Master Index 12.83 12.94* *From April 30, 1995. ** After December 31, 1997, Seligman High-Yield Bond Portfolio will no longer be compared to the Lipper High-Yield Bond Fund Index because it only measures the performance of 30 funds. The Manager believes that the Lipper High Current Yield is a more appropriate average as it represents the performance of the entire universe of funds that have similar investment objectives to the Portfolio's. While the primary high-yield market issued a record $120 billion during 1997, your Portfolio continued to maintain a disciplined credit selection process. On a macro level, a focus on US issuers has been maintained. This strategy served us especially well during the latter half of 1997, as certain emerging markets experienced increased volatility. Emphasis was placed on non-cyclical industries such as cable, telecommunications, and gaming. Strategically, we seek to invest in individual issues with predictable cash flows, good call protection, improving credit quality, and high relative value. We shall also continue to underweight cyclical and zero coupon bonds and avoid distressed and defaulted issues. The strongest areas in the Portfolio in 1997 remained in cable, paging, telecommunications, and radio broadcasting. Cable bonds performed well in 1997 due primarily to Microsoft's decision to invest in the industry and Tele-Communications' new partnership arrangements. It also appears that the Federal Communications Commission is no longer interested in re-regulating cable rates. Select paging bonds saw significantly improved performance in the last six months of 1997, due to improved pricing power, the relatively slight impact of the Personal Communications Services threat on the industry, and the strong growth in the number of units sold. The Portfolio has also continued to benefit from the consolidations in the telecommunications and radio broadcasting industries. Finally, we increased our investment in medical product stocks, as these companies generate recurring revenue and are thus insulated against economic downturns. Looking ahead, we believe the high-yield sector continues to deliver good relative value under the current solid economic growth and low-interest-rate environment. Demand for high-yield bonds continues to accelerate, particularly from the pension fund community. Fundamentals, as they relate to the credit cycle in the United States, are positive because the low-interest-rate environment has allowed high-yield issuers to reduce their borrowing costs and a strong stock market has enabled high-yield issuers to access the initial public offering market. Finally, favorable mergers and acquisitions activity and fewer leveraged buy-outs should benefit the high-yield market over time. - -------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. See footnote on page P-16. P-15 Seligman Portfolios, Inc. - ----------------------------------------------------------------------------- Annual Performance Overview (continued) - ----------------------------------------------------------------------------- Seligman Income Portfolio The chart and total returns do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts. Seligman Lehman Brothers Lipper Income Aggregate Income Funds Date Portfolio Bond Index Average S&P 500 6/21/88 10000 10000 10000 10000 6/30/88 10000 10000 10000 10000 9/30/88 10090 10199 10145 10034 12/31/88 10110 10276.51 10260 10344 3/31/89 10453 10393.66 10657 11077 6/30/89 11097 11222.04 11286 12056 9/30/89 11379 11348.85 11774 13347 12/31/89 11587 11771.03 11915 13622 3/31/90 11566 11676.86 11700 13212 6/30/90 11673 12104.23 12030 14043 9/30/90 10512 12208.33 11267 12113 12/31/90 10880 12826.07 11804 13199 3/31/91 12105 13185.2 12866 15116 6/30/91 12609 13398.8 13036 15082 9/30/91 13640 14159.85 13974 15888 12/31/91 14241 14877.75 14738 17220 3/31/92 14823 14687.32 14846 16784 6/30/92 15190 15280.69 15265 17103 9/30/92 15747 15937.76 15833 17642 12/31/92 16479 15980.79 16198 18529 3/31/93 17376 16640.8 17110 19339 6/30/93 17853 17081.78 17492 19434 9/30/93 18389 17527.61 18080 19935 12/31/93 18518 17538.13 18258 20398 3/31/94 17736 17034.78 17635 19625 6/30/94 17199 16859.32 17563 19707 9/30/94 17785 16962.17 18006 20671 12/31/94 17413 17026.62 17717 20666 3/31/95 18042 17884.76 18770 22679 6/30/95 19265 18973.95 19940 24845 9/30/95 20400 19345.84 20950 26820 12/31/95 20544 20169.97 21859 28435 3/31/96 20796 19812.96 22337 29962 6/30/96 21069 19925.89 22744 31307 9/30/96 21244 20294.52 23177 32275 12/31/96 21911 20903.36 24234 34966 3/31/97 22036 20786.3 24240 35904 6/30/97 23473 21549.16 26092 42172 9/30/97 24619 22264.59 27617 45331 12/31/97 24983 22919.17 28071 46633 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception Seligman Income Portfolio 14.02% 8.68% 10.08% Lipper Income Funds Average 15.83 11.62 11.46* Lehman Brothers Aggregate Bond Index 9.64 7.48 9.11* S&P 500 33.36 20.27 17.58* *From June 30, 1988. Overall, the economic background was positive for both the fixed-income and equity portions of the Portfolio. The low-interest-rate environment led to a rally in the fixed-income markets throughout the year, further supported by the Federal Reserve Board's decision to leave interest rates unchanged after a March increase in the federal funds rate. The onset of the Asian financial crisis drove a fourth quarter rally, as investors sought refuge from the volatility of the global equity markets in the safe haven of the US Treasury bond market. All of these factors contributed to the strong performance of the bonds in the Portfolio. On the equity side, investors' appetite for US common stocks continued to grow and supported a rally in the US equity markets that increased the value of the Portfolio's equity holdings. When the Asian financial crisis raised concerns regarding future US corporate profitability, some equity investors retreated into defensive stocks with stable earnings and dividends, such as those contained in the Portfolio. In 1997, Seligman Income Portfolio was restructured without reducing the yield or increasing volatility. The most significant change was the decrease in the Portfolio's exposure to convertible stocks and bonds due to the unattractive valuations found in the group. Assets were placed in high-quality fixed-income securities and in common stocks. In the fixed-income area, bonds with intermediate maturities were held, as they are somewhat less volatile than longer maturities but can still benefit from declining interest rates. The Portfolio's common stock holdings remained broadly diversified in issues which, on average, offer higher yields than the S&P 500 and future dividend growth potential. There will probably be continued equity market volatility in 1998 due to the uncertain impact of the Asian financial crisis on the economy. However, we believe that the portfolio's conservative investment strategy and substantial dividend yield should be very attractive to investors in an environment of reduced expectations regarding future equity returns. Further, the fixed-income portion of the portfolio should continue to benefit from the low-interest-rate environment. - ------------------- The investment return and principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. + Performance data quoted represent past performance and assume that all dividends and distributions are invested in additional shares. P-16 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN BOND PORTFOLIO Principal Amount Value ---------- ----------- US GOVERNMENT AND GOVERNMENT AGENCY SECURITIES -- 50.7% US GOVERNMENT SECURITIES -- 37.3% US Treasury Bonds 8-3/4%, 5/15/2020............. $ 500,000 $ 665,938 US Treasury Bonds 6-5/8%, 2/15/2027............. 1,400,000 1,519,877 US Treasury Notes 6-1/4%, 10/31/2001.................... 300,000 305,344 US Treasury Notes 6-1/4%, 6/30/2002..................... 200,000 204,125 ----------- Total US Government Securities (Cost $2,612,492)............. 2,695,284 ----------- US GOVERNMENT AGENCY SECURITIES -- 13.4% Federal National Mortgage Association 7-1/2%, 11/1/2026+.................... 463,195 474,341 Government National Mortgage Association: 7-1/2%, 6/15/2023+............ 215,496 221,757 7-1/2%, 3/15/2026+............ 269,170 275,982 ----------- Total US Government Agency Securities (Cost $924,959)............... 972,080 ----------- Total US Government and Government Agency Securities (Cost $3,537,451)............. 3,667,364 ----------- CORPORATE BONDS -- 40.4% Anixter 8%, 9/15/2003............ 200,000 210,279 Associates Corp. of North America 6-1/2%, 8/15/2002..... 200,000 202,068 Barrett Resources 7.55%, 2/1/2007...................... 200,000 207,771 Capital One Bank 8-1/8%, 3/1/2000...................... 150,000 155,386 Principal Amount Value ---------- ----------- CORPORATE BONDS (continued) First Data 6-3/8%, 12/15/2007.... $ 200,000 $ 199,291 First USA Bank 5-3/4%, 1/15/1999..................... 100,000 99,819 General Motors Acceptance 5-5/8%, 2/1/1999.............. 150,000 149,456 Geon 6-7/8%, 12/15/2005.......... 200,000 202,032 Loewen Group International 7-1/2%, 4/15/2001............. 200,000 206,142 The Money Store 8.05%, 4/15/2002..................... 200,000 207,206 Oryx Energy 8-1/8%, 10/15/2005.................... 200,000 215,288 Owens-Illinois 7.85%, 5/15/2004..................... 200,000 210,250 Petroleum Georgia Pacific 7-1/2%, 3/31/2007............. 200,000 213,408 Time Warner 9-1/8%, 1/15/2013.... 200,000 239,369 Woolworth 7%, 6/1/2000........... 200,000 202,771 ----------- Total Corporate Bonds (Cost $2,828,492)............. 2,920,536 ----------- REPURCHASE AGREEMENTS -- 5.5% (Cost $400,000) HSBC Securities, Inc. 5%, dated 12/31/1997, maturing 1/5/1998 collateralized by: $380,000 US Treasury Notes 6-7/8% 5/15/2006, with a fair market value of $409,979............. 400,000 400,000 ----------- Total Investments -- 96.6% (Cost $6,765,943)............. 6,987,900 Other Assets Less Liabilities -- 3.4%........... 244,137 ----------- Net Assets -- 100.0%............. $7,232,037 ----------- ----------- - ---------------- + Investments in mortgage-backed securities are subject to principal paydowns. As a result of prepayments from refinancing or satisfaction of the underlying mortgage instruments, the average life may be less than the original maturity. This in turn may impact the ultimate yield realized from these investments. See Notes to Financial Statements. P-17 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN CAPITAL PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 97.9% BASIC MATERIALS -- 3.6% Minerals Technologies............ 5,000 $ 227,187 Nucor............................ 4,500 217,406 Olin............................. 6,400 300,000 ----------- 744,593 ----------- CAPITAL GOODS -- 3.1% Gulfstream Aerospace*............ 10,600 310,050 Rayovac*......................... 9,300 179,025 Vishay Intertechnology*.......... 6,510 153,798 ----------- 642,873 ----------- CONSUMER CYCLICALS -- 13.5% AccuStaff*....................... 7,300 167,900 American Skiing*................. 13,400 199,325 Barnes & Noble*.................. 8,200 273,675 CapStar Hotel*................... 6,400 219,600 Harley-Davidson.................. 7,100 194,363 Interpublic Group of Companies..................... 9,600 478,200 Jones Apparel Group*............. 9,600 412,800 Mattel........................... 7,812 290,997 Mirage Resorts*.................. 13,500 307,125 Snyder Communications*........... 5,700 208,050 ----------- 2,752,035 ----------- CONSUMER STAPLES -- 14.4% Bergen Brunswig (Class A)........ 3,200 134,800 Beringer Wine Estates (Class B)*.................... 3,050 115,900 Cardinal Health.................. 2,800 210,350 Clorox........................... 3,200 253,000 Coca-Cola Enterprises............ 17,600 625,900 Dial............................. 14,000 291,375 Estee Lauder (Class A)........... 4,800 246,900 Fresh Del Monte Produce*......... 21,200 310,050 Kroger*.......................... 6,400 236,400 McKesson......................... 2,500 270,469 Newell........................... 5,500 233,750 ----------- 2,928,894 ----------- DRUGS AND HEALTH CARE -- 10.5% Biogen*.......................... 3,900 142,106 Covance*......................... 20,700 411,412 Shares Value ---------- ----------- DRUGS AND HEALTH CARE (continued) Humana*.......................... 15,500 $ 321,625 KOS Pharmaceuticals*............. 7,600 117,088 Pfizer........................... 3,800 283,338 US Surgical...................... 10,600 310,712 Universal Health Services (Class B)*.................... 11,200 564,200 ----------- 2,150,481 ----------- ENERGY -- 5.1% Barrett Resources*............... 8,000 242,000 Bayard Drilling Technologies*.... 7,700 125,125 EVI*............................. 1,600 82,800 Gulf Indonesia Resources* (Indonesia)................... 3,200 70,400 Petroleum Geo-Services (ADRs)* (Norway).............. 5,000 323,750 Transocean Offshore.............. 4,000 192,750 ----------- 1,036,825 ----------- FINANCIAL SERVICES -- 19.2% AFLAC............................ 3,800 194,275 Donaldson, Lufkin & Jenrette Securities.................... 4,100 325,950 MBNA............................. 15,000 409,688 Nationwide Financial Services (Class A)..................... 8,000 289,000 Old Republic International....... 5,500 204,531 Peoples Heritage Financial Group......................... 4,700 217,081 Progressive (Ohio)............... 3,700 443,537 Provident Companies.............. 7,700 297,412 Schwab (Charles)................. 14,800 620,675 SouthTrust....................... 4,500 285,188 Travelers........................ 11,700 630,338 ----------- 3,917,675 ----------- MEDIA AND BROADCASTING -- 2.4% CBS.............................. 16,390 482,481 ----------- PRINTING AND PUBLISHING -- 1.0% Petersen Companies (Class A)*.... 3,000 69,000 World Color Press*............... 5,100 135,469 ----------- 204,469 ----------- - ------------- * Non-income producing security. See Notes to Financial Statements. P-18 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN CAPITAL PORTFOLIO (continued) Shares Value ---------- ----------- SAVINGS AND LOAN COMPANIES -- 8.0% GreenPoint Financial............. 6,400 $ 464,400 Ocwen Financial*................. 10,200 259,462 St. Paul Bancorp................. 8,587 224,872 TCF Financial.................... 8,300 281,681 Washington Mutual................ 6,400 408,200 ----------- 1,638,615 ----------- TECHNOLOGY -- 14.3% Activision*...................... 12,500 224,219 Adaptec*......................... 4,400 163,625 Arrow Electronics*............... 6,000 194,625 BMC Software*.................... 3,700 242,581 Ceridian*........................ 6,400 293,200 Fiserv*.......................... 7,900 389,075 Gartner Group (Class A)*......... 5,700 212,681 Linear Technology................ 3,400 195,713 Maxim Integrated Products*....... 9,800 338,713 Symantec*........................ 6,200 136,981 Synopsys*........................ 8,200 292,638 Xilinx*.......................... 6,500 227,500 ----------- 2,911,551 ----------- Shares Value ---------- ----------- TELECOMMUNICATIONS -- 2.8% Century Telephone Enterprises................... 6,400 $ 318,800 QUALCOMM*........................ 4,900 247,603 ----------- 566,403 ----------- Total Common Stocks (Cost $15,992,637)............ 19,976,895 SHORT-TERM HOLDINGS -- 4.9% (Cost $1,000,000)............. 1,000,000 ----------- Total Investments -- 102.8% (Cost $16,992,637)............ 20,976,895 Other Assets Less Liabilities -- (2.8)%......... (577,103) ----------- Net Assets -- 100.0%............. $20,399,792 ----------- - -------------- * Non-income producing security. See Notes to Financial Statements. P-19 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN CASH MANAGEMENT PORTFOLIO Annualized Yield on Principal Purchase Date Amount Value ------------- --------- ----- US GOVERNMENT SECURITIES -- 58.6 % US Treasury Bills, 1/8/1998.............. 5.21% $1,415,000 $ 1,413,609 US Treasury Bills, 1/29/1998............. 5.22 1,900,000 1,892,545 US Treasury Bills, 3/5/1998.............. 5.33 1,775,000 1,758,941 ----------- Total US Government Securities (Cost $5,065,095)..... 5,065,095 ----------- COMMERCIAL PAPER -- 38.7% American General Finance Corp., 2/4/1998....... 5.70 510,000 507,332 Associates Corp. of North America, 3/4/1998.... 5.85 460,000 455,492 Beneficial Corp., 1/15/1998............. 5.78 510,000 508,881 Ford Motor Credit Corp., 2/27/1998............. 5.86 460,000 455,849 General Electric Capital Corp., 3/30/1998...... 5.72 450,000 443,884 John Deere Capital Corp., 3/11/1998............. 5.81 465,000 459,964 Annualized Yield on Principal Purchase Date Amount Value ------------- --------- ----- COMMERCIAL PAPER (continued) Norwest Financial, 2/10/1998............... 5.81% $510,000 $ 506,798 ----------- Total Commercial Paper (Cost $3,338,200)....... 3,338,200 REPURCHASE AGREEMENTS -- 5.8% (Cost $500,000) HSBC Securities, Inc. 5%, dated 12/31/1997, maturing 1/5/1998 collateralized by: $475,000 US Treasury Notes 6-7/8% 5/15/2006, with a fair market value of $512,474................ 500,000 500,000 ----------- Total Investments -- 103.1% (Cost $8,903,295)....... 8,903,295 Other Assets Less Liabilities -- (3.1)%.... (268,009) ----------- Net Assets -- 100.0%........ $ 8,635,286 ----------- ----------- - ------------------------------------------------------------------------------ SELIGMAN COMMON STOCK PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 95.4% AEROSPACE/DEFENSE -- 2.7% General Dynamics................. 6,000 $ 518,625 United Technologies.............. 11,400 830,063 ----------- 1,348,688 ----------- AUTOMOTIVE AND RELATED -- 4.2% Chrysler......................... 13,600 478,550 Dana............................. 10,600 503,500 Eaton............................ 5,200 464,100 Harley-Davidson.................. 25,900 709,013 ----------- 2,155,163 ----------- Shares Value ---------- ----------- BASIC MATERIALS -- 0.9% Aluminum Company of America....................... 6,500 $ 457,438 ----------- BUSINESS SERVICES AND SUPPLIES -- 0.6% Xerox............................ 4,200 310,013 ----------- CHEMICALS -- 1.9% duPont (E.l.) de Nemours......... 8,000 480,500 Goodrich (B.F.).................. 11,300 468,244 ----------- 948,744 ----------- - --------------- See Notes to Financial Statements. P-20 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO (continued) Shares Value ---------- ----------- COMPUTER GOODS AND SERVICES -- 4.5% Compaq Computer.................. 11,250 $ 634,922 Computer Associates International................. 6,300 333,112 International Business Machines...................... 4,700 491,444 Microsoft*....................... 6,300 814,078 ----------- 2,273,556 ----------- CONSTRUCTION -- 1.0% Sherwin-Williams................. 17,700 491,175 ----------- CONSUMER GOODS AND SERVICES -- 11.4% Anheuser-Busch................... 23,300 1,025,200 Coca-Cola........................ 13,700 912,762 PepsiCo.......................... 13,200 480,975 Philip Morris.................... 23,300 1,055,781 Procter & Gamble................. 12,600 1,005,638 RJR Nabisco Holdings............. 34,800 1,305,000 ----------- 5,785,356 ----------- DRUGS AND HEALTH CARE -- 10.4% Abbott Laboratories.............. 6,500 426,156 American Home Products........... 4,700 359,550 Bristol-Myers Squibb............. 13,000 1,230,125 Johnson & Johnson................ 12,100 797,088 Merck............................ 8,300 881,875 Pfizer........................... 9,600 715,800 Schering-Plough.................. 13,800 857,325 ----------- 5,267,919 ----------- ELECTRIC AND GAS UTILITIES -- 3.4% Unicom*.......................... 29,200 897,900 Williams Companies............... 29,800 845,575 ----------- 1,743,475 ----------- ELECTRICAL EQUIPMENT -- 0.8% Thomas & Betts................... 9,100 429,975 ----------- Shares Value ---------- ----------- ELECTRONICS -- 6.0% AMP.............................. 13,400 $ 562,800 Applied Materials*............... 18,700 562,753 Arrow Electronics*............... 16,600 538,463 KLA-Tencor*...................... 9,900 382,078 Motorola......................... 8,000 456,500 Raytheon......................... 11,000 555,500 ----------- 3,058,094 ----------- ENERGY -- 9.7% Atlantic Richfield............... 5,200 416,650 Baker Hughes..................... 7,300 318,462 Exxon............................ 16,100 985,119 Mobil............................ 13,500 974,531 Royal Dutch Petroleum (Netherlands)................. 20,600 1,116,262 Schlumberger..................... 6,300 507,150 Texaco........................... 11,100 603,563 ----------- 4,921,737 ----------- FINANCE AND INSURANCE -- 13.1% Ahmanson (H.F.).................. 8,400 562,275 American General................. 9,900 535,219 American International Group..... 7,500 815,625 BankAmerica...................... 5,100 372,300 Bank of New York................. 10,100 583,906 Citicorp......................... 3,142 397,267 Federal National Mortgage Association................... 10,900 621,981 First Union...................... 10,600 543,250 General Re....................... 1,300 275,600 Mellon Bank...................... 5,400 327,375 St. Paul Companies............... 5,200 426,725 TIG Holdings .................... 22,400 743,400 Travelers........................ 7,900 425,612 ----------- 6,630,535 ----------- FOOD -- 2.7% ConAgra.......................... 21,000 689,062 Sara Lee......................... 11,900 670,119 ----------- 1,359,181 ----------- - -------------- * Non-income producing security. See Notes to Financial Statements. P-21 Seligman Portfolios, Inc. Portfolios of Investments (continued) SELIGMAN COMMON STOCK PORTFOLIO (continued) Shares Value ---------- ----------- MACHINERY AND INDUSTRIAL EQUIPMENT -- 6.7% Deere............................ 8,500 $ 495,656 GATX............................. 5,200 377,325 General Electric................. 20,100 1,474,838 Harnischfeger Industries......... 11,400 402,563 Illinois Tool Works.............. 10,500 631,312 ----------- 3,381,694 ----------- METALS AND MINING -- 0.8% Allegheny Teledyne............... 15,400 398,475 ----------- PAPER AND PACKAGING -- 1.6% Fort James....................... 7,300 279,225 Mead............................. 18,900 529,200 ----------- 808,425 ----------- PUBLISHING -- 1.0% Gannett.......................... 8,400 519,225 ----------- RETAIL TRADE -- 1.6% Penney (J.C.).................... 8,000 482,500 Wal-Mart Stores.................. 8,500 335,218 ----------- 817,718 ----------- TECHNOLOGY -- 2.1% Hewlett-Packard.................. 5,200 325,000 Intel............................ 10,500 737,297 ----------- 1,062,297 ----------- Shares Value ---------- ----------- TELECOMMUNICATIONS -- 1.9% Sprint........................... 6,800 $ 398,650 WorldCom*........................ 18,900 572,316 ----------- 970,966 ----------- TELEPHONE UTILITIES -- 4.1% Ameritech........................ 10,500 845,250 Bell Atlantic.................... 6,500 591,500 SBC Communications............... 8,800 644,600 ----------- 2,081,350 ----------- TRANSPORTATION -- 0.9% Norfolk Southern................. 15,000 462,187 ----------- MISCELLANEOUS/ DIVERSIFIED -- 1.4% AlliedSignal..................... 18,300 712,556 ----------- Total Common Stocks (Cost $40,142,683)............ 48,395,942 Short-Term Holdings -- 3.9% (Cost $2,000,000)............. 2,000,000 ----------- Total Investments -- 99.3% (Cost $42,142,683)............ 50,395,942 Other Assets Less Liabilities -- 0.7%........... 341,221 ----------- Net Assets -- 100.0%............. $50,737,163 ----------- ----------- - ------------------------------------------------------------------------------ SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 97.9% COMMUNICATIONS INFRASTRUCTURE -- 7.9% Aspect Telecommunications*....... 31,900 $ 669,900 CIDCO*........................... 40,000 762,500 Cisco Systems*................... 34,950 1,950,647 ECI Telecommunications........... 45,200 1,155,425 Excel Switching*................. 50,000 896,875 Oak Industries*.................. 19,600 581,875 Tellabs*......................... 17,300 913,116 ----------- 6,930,338 ----------- Shares Value ---------- ----------- COMPUTER HARDWARE/ PERIPHERALS -- 21.1% Adaptec*......................... 35,600 $ 1,323,875 American Power Conversion*....... 39,400 933,287 Creative Technology*............. 81,700 1,792,294 Data General..................... 19,600 341,775 Electronics for Imaging*......... 88,400 1,466,888 EMC*............................. 147,200 4,038,800 Encad*........................... 14,400 399,600 Gateway 2000*.................... 22,000 717,750 - -------------- * Non-income producing security. See Notes to Financial Statements. P-22 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued) Shares Value ---------- ----------- COMPUTER HARDWARE/ PERIPHERALS (continued) In Focus Systems*................ 16,900 $ 518,619 Lexmark International Group (Class A)*.................... 62,300 2,367,400 Read-Rite*....................... 74,100 1,176,337 Storage Technology*.............. 49,000 3,034,938 Unisys*.......................... 30,800 427,350 ----------- 18,538,913 ----------- COMPUTER SOFTWARE -- 15.2% 3DO*............................. 41,400 89,916 Activision*...................... 19,600 351,575 ANSYS*........................... 25,500 182,484 Cadence Design Systems*.......... 47,000 1,151,500 Compuware*....................... 30,700 983,359 Electronic Arts*................. 12,000 453,750 Gemstar International Group*..... 20,600 495,687 Microsoft*....................... 3,300 426,422 Network Associates*.............. 46,134 2,435,010 Parametric Technology*........... 50,000 2,365,625 Structural Dynamics Research*..................... 63,700 1,441,213 Synopsys*........................ 62,037 2,213,945 Viasoft*......................... 18,300 774,319 ----------- 13,364,805 ----------- CONTRACT MANUFACTURING/ CIRCUIT BOARDS -- 3.5% ADFlex Solutions*................ 17,300 282,206 Hadco*........................... 22,100 1,000,716 Jabil Circuit*................... 13,500 536,625 Sanmina*......................... 17,900 1,218,319 ----------- 3,037,866 ----------- ELECTRONICS CAPITAL EQUIPMENT -- 14.6% Applied Materials*............... 38,400 1,155,600 ASM Lithography* (Netherlands)... 3,800 256,737 Asyst Technologies*.............. 11,700 257,400 Cognex*.......................... 45,100 1,231,794 Credence Systems*................ 42,800 1,265,275 Electro Scientific Industries*... 21,300 816,056 Etec Systems*.................... 34,600 1,606,737 Fusion Systems (Rights)*......... 20,000 15,000 KLA-Tencor*...................... 40,400 1,559,187 Kulicke & Soffa Industries*...... 47,900 895,131 Shares Value ---------- ----------- ELECTRONICS CAPITAL EQUIPMENT (continued) Novellus Systems*................ 53,000 $ 1,714,219 Teradyne*........................ 62,800 2,009,600 ----------- 12,782,736 ----------- INFORMATION SERVICES -- 8.4% BISYS Group*..................... 21,100 704,212 Computer Sciences*............... 19,200 1,603,200 First Data....................... 46,100 1,348,425 Galileo International............ 35,600 983,450 Gartner Group (Class A)*......... 47,100 1,757,419 Information Resources*........... 19,800 266,063 Tele-Communications*............. 23,500 666,078 ----------- 7,328,847 ----------- MEDIA -- 11.1% A.H. Belo (Class A).............. 15,400 864,325 CBS.............................. 108,200 3,185,137 Chancellor Media (Class A)*...... 33,300 2,486,053 CKS Group*....................... 10,000 141,250 Clear Channel Communications*............... 13,700 1,088,294 Cox Radio (Class A)*............. 17,700 712,425 Time Warner...................... 9,600 595,200 Universal Outdoor Holdings*...... 11,900 620,288 ----------- 9,692,972 ----------- SEMICONDUCTORS -- 14.1% Altera*.......................... 9,700 321,616 Atmel*........................... 19,700 366,297 Dallas Semiconductor............. 22,100 900,575 International Rectifier*......... 33,900 400,444 Lattice Semiconductor*........... 43,200 2,052,000 Maxim Integrated Products*....... 61,600 2,129,050 Microchip Technology*............ 56,700 1,704,544 National Semiconductor*.......... 25,035 649,345 PMC-Sierra*...................... 19,500 608,156 Unitrode*........................ 30,800 662,200 Vishay Intertechnology*.......... 40,400 954,450 VLSI Technology*................. 50,000 1,181,250 Xilinx*.......................... 13,500 472,500 ----------- 12,402,427 ----------- - ------------- * Non-income producing security. See Notes to Financial Statements. P-23 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued) Shares or Principal Amount Value ---------- ----------- TELECOMMUNICATIONS -- 2.0% L.M. Ericsson Telefon (Series B) (ADRs) (Sweden)............... 5,900 shs. $ 220,327 General Communications*.......... 34,900 233,394 Lucent Technologies.............. 2,900 231,638 MCI Communications............... 9,600 411,000 Millicom International Cellular* (Luxembourg).................. 5,600 209,300 Nokia (Class A) (ADRs) (Finland)..................... 2,900 203,000 QUALCOMM*........................ 4,000 202,125 ----------- 1,710,784 ----------- Total Common Stocks (Cost $91,528,117)............ 85,789,688 ----------- SUBORDINATED CONVERTIBLE BONDS -- 0.2% (Cost $190,000) COMPUTER SOFTWARE -- 0.2% Activision 6-3/4%, 1/1/2005...... $190,000 202,350 ----------- Principal Amount Value ---------- ----------- REPURCHASE AGREEMENTS -- 7.8% (Cost $6,800,000) HSBC Securities, Inc., 5%, dated 12/31/1997, maturing 1/5/1998 collateralized by: $5,290,000 US Treasury Notes 11-7/8% 11/15/2003, with a fair market value of $6,960,131................. $6,800,000 $ 6,800,000 ----------- Total Investments -- 105.9% (Cost $98,518,117)............ 92,792,038 Other Assets Less Liabilities -- (5.9)%......... (5,159,201) ----------- Net Assets -- 100.0%............. $87,632,837 ----------- ----------- - ------------------------------------------------------------------------------ SELIGMAN FRONTIER PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 93.9% ADVERTISING -- 1.4% Acxiom........................... 1,900 $ 36,337 ADVO*............................ 14,700 286,650 HA-LO Industries*................ 11,200 291,200 ----------- 614,187 ----------- AEROSPACE AND DEFENSE -- 0.8% Avondale Industries*............. 11,300 336,175 ----------- BUSINESS GOODS AND SERVICES -- 14.7% AccuStaff*....................... 38,600 887,800 Affiliated Computer Services (Class A)*.................... 11,400 299,962 American Management Systems*...................... 6,000 116,625 American Pad & Paper*............ 7,100 68,338 Analysts International........... 7,500 260,625 Ceridian*........................ 24,900 1,140,731 Copart*.......................... 8,000 141,500 Corporate Express................ 47,600 614,337 Shares Value ---------- ----------- BUSINESS GOODS AND SERVICES (continued) DST Systems*..................... 11,800 $ 503,713 FirstService*.................... 7,100 53,250 JP Foodservice*.................. 17,100 631,631 Personnel Group of America*...... 10,100 333,300 Pierce Leahy*.................... 9,200 188,600 Pittston Brink's Group........... 10,400 418,600 PMT Services*.................... 28,100 392,522 SPR.............................. 10,000 168,125 Staff Leasing*................... 4,900 92,487 ----------- 6,312,146 ----------- CAPITAL GOODS -- 3.2% DONCASTERS (ADRs)* (United Kingdom).............. 22,800 481,650 Fusion Systems (Rights)*......... 3,745 2,809 Oak Industries*.................. 17,230 511,516 UCAR International*.............. 9,500 379,406 ----------- 1,375,381 ----------- CHEMICALS -- 0.5% Polymer Group*................... 21,600 205,200 ----------- - -------------- * Non-income producing security. See Notes to Financial Statements. P-24 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO (continued) Shares Value ---------- ----------- COMMUNICATIONS -- 2.5% ANTEC*........................... 18,700 $ 294,525 Arch Communications Group*....... 6,165 31,981 CIDCO*........................... 11,480 218,838 Glenayre Technologies*........... 19,400 192,787 Omnipoint*....................... 15,100 352,019 ----------- 1,090,150 ----------- COMPUTER SOFTWARE -- 4.5% Avant!*.......................... 16,900 284,131 BISYS Group*..................... 13,600 453,900 IMNET Systems*................... 10,000 161,250 Inso*............................ 7,900 90,603 Primark*......................... 7,100 288,881 PSW Technologies*................ 17,700 253,331 Synopsys*........................ 11,300 403,269 ----------- 1,935,365 ----------- CONSUMER GOODS AND SERVICES -- 6.3% American Homestar................ 44,137 728,261 Carriage Services (Class A)*..... 12,900 242,681 Coinmach Laundry*................ 45,000 1,108,125 Equity*.......................... 14,300 330,687 International Home Foods*........ 2,900 81,200 Zag Industries*.................. 23,500 205,625 ----------- 2,696,579 ----------- DRUGS AND HEALTH CARE -- 14.8% American HomePatient*............ 21,200 492,900 AmeriSource Health (Class A)*.... 9,730 566,773 Castle Dental Centers*........... 55,000 419,375 Collaborative Clinical Research*..................... 20,000 103,125 CompDent*........................ 16,500 337,219 First Commonwealth .............. 71,700 833,512 HealthCor Holdings*.............. 13,700 54,800 National Surgery Centers*........ 19,575 512,620 NCS Healthcare*.................. 12,900 340,238 Omnicare......................... 8,700 269,700 Orthalliance (Class A)*.......... 15,000 136,406 Quorum Health Group*............. 8,600 225,750 Renex*........................... 50,000 268,750 Scherer (R.P.)*.................. 12,600 768,600 Total Renal Care Holdings*....... 22,500 618,750 Watson Pharmaceuticals*.......... 12,600 408,712 ----------- 6,357,230 ----------- Shares Value ---------- ----------- EDUCATIONAL SERVICES -- 1.7% Educational Medical*............. 25,000 $ 206,250 Edutrek International (Class A)*.................... 20,200 527,725 ----------- 733,975 ----------- ELECTRONICS -- 11.1% Applied Micro Circuits*.......... 7,600 94,525 Black Box*....................... 10,800 383,400 Burr-Brown*...................... 16,500 531,094 Cognex*.......................... 24,560 670,795 Credence Systems*................ 24,500 724,281 General Semiconductors*.......... 28,000 323,750 Integrated Device Technologies*................. 10,800 101,925 KEMET*........................... 31,600 610,275 Lattice Semiconductor*........... 5,670 269,325 PMC-Sierra*...................... 21,300 664,294 Vishay Intertechnology*.......... 16,040 378,945 ----------- 4,752,609 ----------- ENVIRONMENTAL MANAGEMENT -- 1.6% Allied Waste Industries*......... 29,400 686,306 ----------- FARM EQUIPMENT -- 0.4% RDO Equipment (Class A)*......... 9,000 164,813 ----------- FINANCIAL SERVICES -- 5.9% American Capital Strategies*..... 10,600 190,138 CMAC Investment.................. 6,800 410,550 Commerce Bancorp................. 5,381 274,431 First Investors Financial Services Group*............... 5,100 34,425 HCC Insurance Holdings........... 6,700 142,375 Imperial Credit*................. 13,800 285,488 Imperial Credit Commercial Mortgage...................... 7,200 105,300 Insignia Financial Group*........ 19,700 453,100 Ocwen Financial*................. 10,400 264,550 PFF Bancorp*..................... 3,400 68,213 Roslyn Bancorp................... 8,900 207,203 Statewide Financial.............. 5,100 119,212 ----------- 2,554,985 ----------- - -------------- * Non-income producing security. See Notes to Financial Statements. P-25 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO (continued) Shares Value ---------- ----------- GAMING -- 1.9% Anchor Gaming*................... 7,800 $ 434,850 GTECH Holdings*.................. 12,300 392,831 ----------- 827,681 ----------- INDEPENDENT POWER PRODUCERS -- 2.2% CalEnergy*....................... 17,360 499,100 Calpine*......................... 31,100 462,612 ----------- 961,712 ----------- INDUSTRIAL GOODS AND SERVICES -- 1.4% Chart Industries................. 4,300 98,094 Flanders*........................ 16,000 149,500 General Cable*................... 9,700 351,019 ----------- 598,613 ----------- MEDIA AND BROADCASTING -- 4.3% Chancellor Media (Class A)*...... 8,954 668,472 Hearst-Argyle Television (Class A)*.................... 11,481 339,407 Jacor Communications*............ 13,350 710,053 Paxson Communications (Class A)*.................... 20,300 149,713 ----------- 1,867,645 ----------- MEDICAL PRODUCTS AND TECHNOLOGY -- 5.1% Dentsply International........... 16,170 499,754 Gulf South Medical Supply*....... 12,400 464,225 Physician Sales and Service*..... 14,300 311,025 Somnus Medical Technologies*................. 20,000 253,125 Suburban Ostomy Supply*.......... 15,700 183,494 Thermoquest*..................... 10,100 183,063 Waters*.......................... 7,300 274,662 ----------- 2,169,348 ----------- OIL AND GAS -- 2.6% Cabot Oil & Gas.................. 3,300 64,144 Eagle Geophysical*............... 10,800 141,750 McDermott International.......... 5,600 205,100 Pogo Producing................... 11,410 336,595 Shares or Principal Amount Value ---------- ----------- OIL AND GAS (continued) Pride International*............. 6,200 shs. $ 156,550 Santa Fe Energy Resources*....... 19,600 220,500 ----------- 1,124,639 ----------- PUBLISHING -- 1.8% CMP Media (Class A)*............. 4,100 70,725 Journal Register*................ 20,100 422,100 Petersen Companies (Class A)*.................... 12,700 292,100 ----------- 784,925 ----------- REAL ESTATE INVESTMENT TRUST -- 1.3% CCA Prison Realty Trust.......... 12,800 571,200 ----------- RETAIL TRADE -- 1.9% Barnes & Noble*.................. 10,000 333,750 Borders Group*................... 8,500 266,156 Party City*...................... 6,400 205,200 ----------- 805,106 ----------- THEATERS -- 0.2% Regal Cinemas*................... 3,500 98,000 ----------- TRANSPORTATION -- 1.8% OMI*............................. 24,300 223,256 US Xpress Enterprises*........... 10,300 226,600 Wisconsin Central Transport*..... 13,000 304,688 ----------- 754,544 ----------- Total Common Stocks (Cost $37,338,660)............ 40,378,514 REPURCHASE AGREEMENTS -- 7.0% (Cost $3,000,000) HSBC Securities, Inc., 5%, dated 12/31/1997, maturing 1/5/1998 collateralized by: $2,334,000 US Treasury Notes 11-7/8% 11/15/2003, with a fair market value of $3,070,878 $3,000,000 3,000,000 ----------- - ------------- * Non-income producing security. See Notes to Financial Statements. P-26 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO (continued) Value ----------- Total Investments -- 100.9% (Cost $40,338,660)........... $43,378,514 Other Assets Less Liabilities -- (0.9)%.... (405,241) Value ----------- Net Assets -- 100.0%............. $42,973,273 ----------- ----------- - ------------------------------------------------------------------------------ SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 93.8% AUSTRALIA -- 0.4% Pacifica Group (Automotive and Related)...... 5,200 $ 17,230 Telstra* (Telecommunications).... 2,500 5,277 ----------- 22,507 ----------- BRAZIL -- 2.8% Companhia Energetica de Minas Gerais "CEMIG" (ADRs) (Electric and Gas Utilities)................ 380 17,100 Petroleo Brasileiro "Petrobras" (ADRs) (Resources)............ 2,430 56,829 Telecomunicacoes Brasileiras "Telebras" (ADRs) (Telecommunications).......... 680 79,178 ----------- 153,107 ----------- CHINA -- 0.3% Huaneng Power International (ADRs)* (Electric and Gas Utilities)................ 688 15,953 ----------- FINLAND -- 2.6% Nokia (Telecommunications)....... 985 69,973 Outokumpu (Industrial Goods and Services)........... 2,080 25,391 Raision Tehtaat (Consumer Goods and Services)........... 400 47,506 ----------- 142,870 ----------- FRANCE -- 4.9% Accor (Entertainment and Leisure)...................... 440 81,835 Cap Gemini (Computer and Technology Related)........... 1,000 82,024 Genset* (Drugs and Health Care).................. 1,600 31,700 Shares Value ---------- ----------- FRANCE (continued) Valeo (Automotive and Related)...................... 1,030 $ 69,882 ----------- 265,441 ----------- GERMANY -- 3.8% Adidas (Consumer Goods and Services)................. 750 99,252 Lufthansa (Transportation)....... 2,970 55,818 Metro (Retailing)................ 1,416 50,233 ----------- 205,303 ----------- HONG KONG -- 0.2% Kwoon Chung Bus Holdings (Transportation).............. 40,000 9,603 ----------- HUNGARY -- 3.3% Magyar Tavkozlesi Rt. "Matav" (ADRs) (Telecommunications).......... 2,080 54,080 MOL Magyar Olaj-es Gazipari (GDRs) (Resources)............ 5,200 126,880 ----------- 180,960 ----------- INDIA -- 1.3% State Bank of India (GDRs)+ (Financial Services).......... 1,400 25,375 Videsh Sanchar Nigam (GDRs)+ (Telecommunications).......... 3,350 46,481 ----------- 71,856 ----------- INDONESIA -- 0.4% Gulf Indonesia Resources* (Resources)................... 1,000 22,000 ----------- IRELAND -- 1.4% Elan (ADRs)* (Drugs and Health Care)....... 1,525 78,061 ----------- - -------------- * Non-income producing security. + Rule 144A security. See Notes to Financial Statements. P-27 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued) Shares Value ---------- ----------- ITALY -- 1.8% Aeroporti di Roma (Transportation).............. 4,850 $ 50,308 Mediolanum* (Financial Services)..................... 2,400 45,177 ----------- 95,485 ----------- JAPAN -- 7.5% Asahi Diamond Industries (Manufacturing and Industrial Equipment).................... 60 262 Bellsystem 24 (Business Goods and Services)................. 300 39,336 Daitec (Business Goods and Services)................. 800 13,495 Diamond Computer Service (Computer and Technology Related)...................... 3,000 44,167 HIS (Entertainment and Leisure).................. 1,100 19,147 Hogy Medical (Drugs and Health Care).................. 900 27,328 Keyence (Electronics)............ 200 29,598 Kyocera (Electronics)............ 600 27,236 Meitec (Computer and Technology Related)...................... 1,000 28,141 Nomura Securities (Financial Services)..................... 4,000 53,368 Sanyo Shinpan Finance (Financial Services).......... 740 32,740 Secom (Support Services)......... 1,000 63,950 Softbank (Computer and Technology Related)........... 900 23,464 Tsutsumi Jewelry (Retailing)..... 500 6,134 ----------- 408,366 ----------- MEXICO -- 2.3% Desc (ADRs) (Diversified)........ 2,650 99,375 Grupo Iusacell (ADRs)* (Telecommunications).......... 1,200 26,025 ----------- 125,400 ----------- NETHERLANDS -- 6.4% Elsevier (Publishing)............ 4,500 72,835 Gucci Group (Consumer Goods and Services)................ 1,300 54,438 Heineken (Consumer Goods and Services)................ 395 68,806 Shares Value ---------- ----------- NETHERLANDS (continued) Koninklijke KNP BT (Business Goods and Services)........... 2,090 $ 48,163 Koninklijke Van Ommeren (Transportation).............. 1,010 33,891 Philips Electronics (Electronics)................. 1,185 71,106 ----------- 349,239 ----------- NORWAY -- 1.6% Tomra Systems (Business Goods and Services)........... 3,800 85,040 ----------- RUSSIA -- 0.5% Tatneft (ADRs) (Resources)....... 200 28,422 ----------- SINGAPORE -- 0.9% Advanced Systems Automation (Manufacturing and Industrial Equipment).................... 11,000 8,892 Datacraft Asia (Telecommunications).......... 10,000 25,800 Electronic Resources (Electronics)................. 13,000 13,212 ----------- 47,904 ----------- SPAIN -- 4.0% Actividades de Construccion y Servicios (Construction and Property)..................... 2,000 48,439 Aguas de Barcelona (Industrial Goods and Services)........... 1,505 62,035 Tabacalera (Series A) (Tobacco)..................... 1,300 105,379 ----------- 215,853 ----------- SWEDEN -- 4.7% Astra (Drugs and Health Care).................. 3,935 68,195 Autoliv (ADRs) (Automotive and Related)...................... 2,100 68,775 Kalmar Industries (Manufacturing and Industrial Equipment)..... 2,300 37,106 L.M. Ericsson Telefon (Series B) (Telecommunications).......... 2,200 82,769 ----------- 256,845 ----------- - -------------- * Non-income producing security. See Notes to Financial Statements. P-28 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued) Shares Value ---------- ----------- SWITZERLAND -- 2.6% Helvetia Patria (Financial Services)..................... 55 $ 47,025 Sairgroup (Transportation)....... 70 95,759 ----------- 142,784 ----------- TAIWAN -- 0.4% Hotung Investment Holdings* (Financial Services).......... 56,000 10,500 Synnex Technology International (GDRs)* (Computer and Technology Related)........... 700 13,216 ----------- 23,716 ----------- UNITED KINGDOM -- 11.8% Airtours (Entertainment and Leisure)...................... 2,000 40,796 Ashtead Group (Construction and Property)................. 14,000 43,935 Bodycote International (Industrial Goods and Services)..................... 4,000 59,692 Bodycote International (Rights)* (Industrial Goods and Services)..................... 1,000 6,665 British Biotech (Drugs and Health Care).................. 14,000 24,049 CMG* (Computer and Technology Related)........... 1,100 27,707 CRT Group (Support Services)..... 6,500 38,113 Dixons Group (Retailing)......... 2,800 27,818 Granada Group (Entertainment and Leisure).................. 4,500 69,644 Halma (Electronics).............. 20,000 38,485 Ladbroke Group (Entertainment and Leisure).................. 13,000 56,686 Parity (Computer and Technology Related)........... 5,625 59,090 Pizza Express (Restaurants)...... 4,000 49,551 Rolls Royce (Aerospace).......... 14,200 53,945 WPP Group (Business Goods and Services)................. 10,500 46,739 ----------- 642,915 ----------- UNITED STATES -- 27.9% American International Group (Financial Services).......... 650 70,688 AT&T (Telecommunications)........ 800 49,000 Shares Value ---------- ----------- UNITED STATES (continued) Bristol-Myers Squibb (Drugs and Health Care).............. 900 $ 85,163 Cardinal Health (Drugs and Health Care).............. 900 67,613 Coca-Cola Enterprises (Consumer Goods and Services)..................... 1,700 60,456 Compaq Computer (Computer and Technology Related)....... 1,100 62,081 Dayton Hudson (Retailing)........ 1,100 74,250 Disney, Walt (Entertainment and Leisure).................. 700 69,344 Donaldson, Lufkin & Jenrette Securities (Financial Services)..................... 300 23,850 General Electric (Diversified)... 1,100 80,712 Hewlett-Packard (Computer and Technology Related)........... 1,000 62,500 Intel (Computer and Technology Related)........... 800 56,175 Interpublic Group of Companies (Business Goods and Services)..................... 1,550 77,209 MBNA (Financial Services)........ 3,475 94,911 Merck (Drugs and Health Care).... 800 85,000 Microsoft* (Computer and Technology Related)........... 500 64,609 PepsiCo (Consumer Goods and Services)..................... 2,000 72,875 Pfizer (Drugs and Health Care).................. 1,800 134,213 Procter & Gamble (Consumer Goods and Services)........... 1,000 79,812 Travelers (Financial Services)... 1,650 88,894 Xerox (Business Goods and Services)..................... 800 59,050 ----------- 1,518,405 ----------- Total Common Stocks (Cost $4,853,342)............. 5,108,035 ----------- PREFERRED STOCKS -- 1.9% (Cost $74,609) GERMANY Porsche (Non-Voting)* (Automotive and Related)...... 62 104,112 ----------- - --------------- * Non-income producing security. See Notes to Financial Statements. P-29 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL GROWTH OPPORTUNITIES PORTFOLIO (continued) Principal Amount Value ---------- ----------- FIXED TIME DEPOSITS -- 5.5% Canadian Imperial Bank of Commerce, Grand Cayman 5.70%, dated 12/30/1997, maturing 1/2/1998............. $150,000 $ 150,000 First National Bank of Chicago, Grand Cayman 5-1/2%, dated 12/30/1997, maturing 1/2/1998............. 150,000 150,000 ----------- Value ----------- Total Fixed Time Deposits (Cost $300,000)............... $ 300,000 ----------- Total Investments -- 101.2% (Cost $5,227,951)............. 5,512,147 Other Assets Less Liabilities -- (1.2)%.......... (62,915) ----------- Net Assets -- 100.0%.............. $ 5,449,232 ----------- ----------- - ------------------------------------------------------------------------------ SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 94.3% AUSTRALIA -- 0.8% Australia National Industries (Industrial Goods and Services)..................... 23,000 $ 21,128 Bristile* (Construction and Property)..................... 6,089 6,030 CSL (Medical Products and Technology)................... 3,200 20,014 Futuris (Automotive Parts Manufacturing)................ 20,273 22,189 HIH Winterthur International Holdings (Financial Services)..................... 12,000 25,721 Jupiters (Leisure and Hotels).... 11,900 21,708 Simsmetal (Metals)............... 4,000 23,196 Henry Walker Group (Support Services)............ 14,000 16,874 ----------- 156,860 ----------- AUSTRIA -- 1.1% Bau Holdings (Construction and Property)..................... 2,600 162,609 Bau Holdings (Voting Preference Shares) (Construction and Property)..................... 1,380 62,601 ----------- 225,210 ----------- BELGIUM -- 0.7% Telinfo (Telecommunications)..... 2,400 147,513 Telinfo (Rights)* (Telecommunications).......... 400 11 ----------- 147,524 ----------- Shares Value ---------- ----------- CHINA -- 0.1% Qingling Motors (Automotive Parts Manufacturing)................ 27,000 $ 13,243 ----------- DENMARK -- 2.4% Danske Traelastkompagni (Construction and Property)..................... 2,043 181,934 Sydbank (Financial Services)..... 2,300 130,951 Thorkild Kristensen (Construction and Property)..................... 2,065 176,809 ----------- 489,694 ----------- FINLAND -- 2.2% Nokian Tyres* (Automotive Parts Manufacturing)................ 1,365 43,347 Rauma (Capital Goods)............ 8,231 128,428 Tamro (Drugs and Health Care)......................... 30,000 164,657 Valmet (Capital Goods)........... 8,915 123,062 ----------- 459,494 ----------- FRANCE -- 4.1% Assystem (Industrial Goods and Services)................. 1,950 63,201 ECIA (Automotive Parts Manufacturing)................ 910 183,014 L'Europeenne d'Extincteurs (Manufacturing)............... 1,610 108,377 L'Europeenne d'Extincteurs (Warrants)* (Manufacturing)... 247 1,355 IMS International Metal Service (Metals).............. 8,280 104,592 - --------------- * Non-income producing security. See Notes to Financial Statements. P-30 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ---------- ----------- FRANCE (continued) Montupet (Automotive Parts Manufacturing)................ 950 $ 106,582 Sylea (Automotive Parts Manufacturing)................ 1,807 172,696 Virbac (Veterinary Products)..... 1,360 111,666 ----------- 851,483 ----------- GERMANY -- 1.4% Hornbach Baumarkt (Retailing)................... 1,530 43,812 Moebel Walther (Retailing)....... 3,400 93,392 Tarkett (Consumer Goods and Services)..................... 6,300 141,872 ----------- 279,076 ----------- HONG KONG -- 0.5% Beijing Datang Power Generation* (Electric Utilities).................... 27,000 12,372 Esprit Holdings (Retailing)...... 32,000 10,429 Jardine International Motor Holdings (Retailing).......... 34,000 18,432 Johnson Electric Holdings (Electronics)................. 8,000 23,028 Li & Fung (Consumer Goods and Services)................. 31,000 43,415 ----------- 107,676 ----------- INDIA -- 0.4% Gujurat Ambuja Cement (GDRs) (Building Materials).......... 10,839 77,228 ----------- ITALY -- 0.5% La Doria (Consumer Goods and Services).................... 41,700 114,324 ----------- JAPAN -- 5.6% Aiya (Restaurants)............... 2,000 15,489 Asahi Diamond Industries (Manufacturing)............... 3,300 14,398 Asatsu (Advertising)............. 1,900 27,389 Benesse (Business Goods and Services)..................... 1,000 24,077 Enplas (Electronics)............. 2,000 26,991 Forval (Telecommunications)...... 2,000 18,710 Fujicco (Consumer Goods and Services)..................... 2,000 16,869 Fujitsu Business Systems (Business Goods and Services)..................... 2,000 32,205 Shares Value ---------- ----------- JAPAN (continued) Glory Kogyo (Manufacturing)...... 3,000 $ 37,956 Higashi Nihon House (Construction and Property)..................... 4,000 18,249 HIS (Leisure and Hotels)......... 1,100 19,147 Hitachi Information Systems (Computer Software)........... 2,000 19,936 Hitachi Medical (Medical Products and Technology)...... 3,000 29,444 Hokkai Can (Manufacturing)....... 7,000 13,419 Hokushin (Manufacturing)......... 2,300 4,056 Horiba Instruments (Electronics)................. 4,000 41,100 Iino Kaiun* (Transportation)..... 23,000 34,038 Japan Information Processing Service (Computer Software)..................... 3,200 22,329 Kentucky Fried Chicken (Restaurants)................. 3,000 22,773 Kissei Pharmaceutical (Drugs and Health Care).................. 2,000 28,831 Komatsu Seiren (Manufacturing)............... 3,000 17,943 Maspro Denkoh (Telecommunications).......... 3,000 19,438 Mitsubishi Cable Industries (Manufacturing)............... 9,000 15,872 Mitsui Home (Construction and Property)..................... 8,000 43,553 Nakayama Steel Works (Metals)...................... 18,000 24,844 Namura Shipbuilding (Capital Goods)........................ 8,000 18,096 Nichicon (Manufacturing)......... 3,000 27,834 Nippon Seiki (Automotive Parts Manufacturing)............... 2,300 15,872 Nishio Rent All (Construction and Property)................. 3,000 25,994 Nissha Printing (Paper and Printing)..................... 3,000 18,081 Nisshin Fire & Marine Insurance (Financial Services).......... 11,000 25,304 Nittetsu Mining (Energy)......... 4,000 16,256 Nova (Consumer Goods and Services)..................... 3,000 9,201 Okinawa Electric Power (Electric Utilities).......... 1,200 18,403 Rengo (Paper and Printing)....... 5,000 10,927 Ryoyo Electro (Electronics)...... 4,000 42,020 - ---------------- * Non-income producing security. See Notes to Financial Statements. P-31 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ---------- ----------- JAPAN (continued) Sagami Chain (Restaurants)....... 2,000 $ 14,185 Sanyo Special Steel (Metals)..... 25,000 28,754 Shohkoh Fund (Financial Services)..................... 100 30,518 Sodick (Manufacturing)........... 5,000 14,339 Sundrug (Retailing).............. 1,400 15,029 Takasago (Chemicals)............. 7,000 28,501 TOEI (Media)..................... 5,000 18,211 Tokyo Style (Manufacturing)...... 2,000 18,096 Towa Pharmaceutical (Drugs and Health Care).............. 2,000 13,112 Toyo Ink Manufacturing (Chemicals)................... 7,000 12,345 Tsubaki Nakashima (Manufacturing)............... 6,000 31,975 Tsudakoma (Manufacturing)........ 13,000 28,509 Tsutsumi Jewelry (Retailing)..... 3,000 36,806 Xebio (Retailing)................ 2,600 20,734 Yokohama Reito (Distributors).... 3,000 23,003 ----------- 1,151,161 ----------- MALAYSIA -- 0.0% Chemical Company of Malaysia (Warrants)* (Chemicals)....... 1,250 217 ----------- NETHERLANDS -- 1.9% Benckiser* (Consumer Goods and Services)................. 2,700 111,784 Otra (Electronics)............... 9,140 130,797 Samas Groep (Manufacturing)...... 3,036 141,425 ----------- 384,006 ----------- NEW ZEALAND -- 0.1% Sky Network Television* (Media)....................... 8,000 12,028 ----------- NORWAY -- 0.5% Ekornes (Manufacturing).......... 13,800 113,237 ----------- SINGAPORE -- 0.4% Bukit Sembawang Estates (Construction and Property)..................... 900 5,938 Dairy Farm International Holdings (Retailing).................. 18,000 19,440 Excel Machine Tools* (Manufacturing)............... 40,000 8,678 Shares Value ---------- ----------- SINGAPORE (continued) Informatics Holdings (Business Goods and Services)........... 41,000 $ 18,276 Venture Manufacturing (Electronics)................. 3,500 9,777 Want Want Holdings (Class A)* (Consumer Goods and Services)..................... 8,200 11,316 Want Want Holdings* (Consumer Goods and Services)........... 3,400 4,488 ----------- 77,913 ----------- SWEDEN -- 3.0% Angpanneforeningen (Class B) (Business Goods and Services)..................... 4,375 63,137 BT Industries (Capital Goods).... 4,740 94,990 Bure Investment Aktiebolaget (Financial Services).......... 4,700 61,904 Finnveden (Series B) (Manufacturing)............... 5,400 100,390 Kalmar Industries (Capital Goods)........................ 4,563 73,614 Munksjo (Paper and Printing)..... 8,400 79,934 PLM (Manufacturing).............. 9,500 132,907 ----------- 606,876 ----------- SWITZERLAND -- 3.2% Fotolabo Club (Retailing)........ 185 41,125 Hero (Consumer Goods and Services)..................... 150 84,644 Kardex (Industrial Goods and Services)..................... 484 128,449 Prodega (Retailing).............. 229 101,030 Selecta Group* (Consumer Goods and Services).......... 850 113,953 SIG Schweizerische Industrie- Gesellschaft* (Manufacturing). 90 122,811 Tag Heuer (ADRs)* (Retailing).... 730 63,413 ----------- 655,425 ----------- TAIWAN -- 0.2% Taiwan American Fund* (Miscellaneous)............... 2,000 31,420 ----------- THAILAND -- 0.1% Hana Microelectronics (Electronics)................. 12,000 28,479 ----------- - --------------- * Non-income producing security. See Notes to Financial Statements. P-32 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ---------- ----------- UNITED KINGDOM -- 19.1% Abacus Polar (Electrical Distribution)................. 22,500 $ 54,816 AEA Technology (Industrial Goods and Services)........... 6,500 57,760 Allied Leisure (Leisure and Hotels)....................... 97,500 45,091 Ashtead Group (Construction and Property)................. 101,600 318,844 British Polythene Industries (Manufacturing)............... 5,500 39,517 BTG (Technology)................. 5,000 56,158 Capital Radio (Media)............ 20,500 168,283 Chiroscience Group (Drugs and Health Care).................. 4,250 15,514 CMG* (Computer Software)......... 9,000 226,696 Cobham (Manufacturing)........... 8,950 123,657 CRT Group (Support Services)..... 30,000 175,906 David Brown Group (Manufacturing)............... 35,657 128,096 Dawson Group (Transportation).............. 26,600 92,264 Domnick Hunter Group (Manufacturing)............... 20,000 108,847 Druck Holdings (Industrial Goods and Services)................. 11,500 45,587 Electronics Boutique* (Retailing)................... 129,800 101,836 F.I. Group (Computer Software)..................... 11,720 180,513 F.I. Group (Rights)* (Computer Software)..................... 976 15,032 Fairey Group (Electronics)....... 15,200 129,546 Games Workshop Group (Retailing)................... 9,400 90,438 GWR Group (Media)................ 24,000 66,795 IBC Group (Business Goods and Services)................. 27,800 181,144 ISA International (Business Goods and Services)........... 33,400 46,064 National Express Group (Transportation).............. 14,000 158,514 Parity (Computer Software)....... 25,312 265,898 Peptide Therapeutics (Drugs and Health Care).............. 2,750 12,105 Pizza Express (Restaurants)...... 19,500 241,561 Polypipe (Building Materials).... 70,500 204,361 Shares Value ---------- ----------- UNITED KINGDOM (continued) Save Group (Retailing)........... 8,600 $ 12,855 Shire Pharmaceuticals* (Drugs and Health Care).............. 5,500 26,027 Stoves (Manufacturing)........... 10,000 41,458 Tilbury Douglas (Construction and Property)................. 50,500 162,651 Trifast (Electrical Distribution) 8,000 72,146 Trinity International Holdings (Media)....................... 26,100 208,649 Vanguard Medica Group (Drugs and Health Care).............. 3,500 24,482 Vanguard Medica Group (Warrants)* (Drugs and Health Care).................. 500 376 Wellington Holdings (Manufacturing)............... 9,500 24,714 ----------- 3,924,201 ----------- UNITED STATES -- 46.0% AccuStaff* (Business Goods and Services)................. 8,600 197,800 Acuson* (Medical Products and Technology)................... 3,000 49,687 Acxiom* (Computer Software)...... 2,200 42,075 ADVO* (Business Goods and Services)................. 3,200 62,400 Affiliated Computer Services (Class A)* (Business Goods and Services)................. 2,200 57,888 Allied Waste Industries (Industrial Goods and Services)........... 6,800 158,737 American Capital Strategies* (Financial Services).......... 2,200 39,463 American HomePatient* (Drugs and Health Care)............. 2,800 65,100 American Homestar* (Manufacturing)............... 9,000 148,500 American Management Systems* (Business Goods and Services)................. 1,000 19,437 AmeriSource Health (Class A)* (Drugs and Health Care)....... 2,200 128,150 Analysts International (Business Goods and Services)........... 1,500 52,125 Anchor Gaming* (Leisure and Hotels)....................... 1,600 89,200 - -------------- * Non-income producing security. See Notes to Financial Statements. P-33 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ---------- ----------- UNITED STATES (continued) ANTEC* (Telecommunications).......... 3,900 $ 61,425 Applied Micro Circuits* (Electronics)................. 1,700 21,144 Arch Communications Group* (Telecommunications).......... 6,000 31,125 Asyst Technologies* (Technology).................. 5,800 127,600 Avant!* (Computer Software)...... 3,800 63,887 BA Merchant Services (Class A)* (Business Goods and Services)..................... 5,100 90,525 Bacou USA* (Industrial Goods and Services)................. 3,100 53,669 Berg Electronics* (Electronics).. 11,000 250,250 BISYS Group* (Business Goods and Services)................. 2,900 96,787 Black Box* (Electronics)......... 3,000 106,500 Budget Group* (Consumer Goods and Services)................. 4,100 141,706 Burr-Brown* (Technology)......... 3,700 119,094 Cabot Oil & Gas (Energy)......... 700 13,606 CalEnergy* (Independent Power Producers).............. 3,900 112,125 Calpine* (Independent Power Producers).............. 9,600 142,800 Canandaigua Brands (Class A)* (Consumer Goods and Services)..................... 2,915 161,782 Carriage Services* (Consumer Goods and Services)........... 2,700 50,794 Castle Dental Centers* (Drugs and Health Care).............. 6,000 45,750 CCA Prison Realty Trust (Construction and Property)... 2,800 124,950 Celadon Group* (Transportation).............. 6,000 79,500 Ceridian* (Business Goods and Services)................. 5,500 251,969 Chart Industries (Industrial Goods and Services)........... 1,000 22,812 CMP Media (Class A)* (Media)....................... 900 15,525 Cognex* (Electronics)............ 5,400 147,488 Coinmach Laundry* (Consumer Goods and Services)........... 4,600 113,275 Collaborative Clinical Research* (Drugs and Health Care)....... 2,900 14,953 Shares Value ---------- ----------- UNITED STATES (continued) Compdent* (Drugs and Health Care).................. 6,000 $ 122,625 Corporate Express* (Business Goods and Services)........... 10,500 135,516 Cox Radio (Class A)* (Media)..... 6,500 261,625 Credence Systems* (Technology).................. 5,425 160,377 Dominick's Supermarkets* (Retailing)................... 2,300 83,950 Eagle Geophysical* (Energy)...... 1,800 23,625 Edutrek International (Class A)* (Miscellaneous)............... 100 2,613 Equity International* (Consumer Goods and Services)........... 3,000 69,375 FactSet Research Systems* (Business Goods and Services)................. 5,900 181,425 FirstService* (Business Goods and Services)................. 1,600 12,000 Flanders* (Industrial Goods and Services)................. 4,200 39,244 Fusion Systems (Rights)* (Capital Goods)........................ 800 600 General Cable* (Industrial Goods and Services)................ 1,000 36,188 General Semiconductor* (Technology).................. 6,200 71,688 Glenayre Technologies* (Telecommunications).......... 4,000 39,750 GTECH Holdings* (Leisure and Hotels)....................... 3,700 118,169 Gulf South Medical Supply* (Medical Products and Technology)................... 2,600 97,338 HA-LO Industries* (Advertising)................. 2,300 59,800 HCC Insurance Holdings (Financial Services).......... 1,500 31,875 Hearst-Argyle Television (Class A)* (Media)............ 900 26,606 Imnet Systems* (Computer Software)..................... 2,200 35,475 Imperial Credit* (Financial Services)..................... 3,000 62,063 Imperial Credit Commercial Mortgage (Financial Services)..................... 1,600 23,400 - ---------------- * Non-income producing security. See Notes to Financial Statements. P-34 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ---------- ----------- UNITED STATES (continued) Insignia Financial* (Financial Services)..................... 4,400 $ 101,200 Inso* (Computer Software)........ 1,600 18,350 Integrated Device Technology* (Technology).................. 2,300 21,706 International Home Foods* (Consumer Goods and Services)..................... 600 16,800 Jacor Communications* (Media)....................... 2,900 154,244 Journal Register* (Media)........ 4,500 94,500 JP Foodservice* (Business Goods and Services)........... 4,000 147,750 KEMET* (Electronics)............. 7,000 135,188 Kendle International* (Drugs and Health Care).................. 5,000 82,500 Lattice Semiconductor* (Technology).................. 1,200 57,000 MAPICS (Computer Software)....... 5,000 54,375 Marcam Solutions* (Computer Software)..................... 2,500 17,969 McDermott International (Energy)...................... 1,200 43,950 Medallion Financial (Financial Services).......... 6,000 130,500 MMI (Financial Services)......... 2,926 73,516 Mutual Risk Management (Financial Services).......... 3,332 99,752 NCS HealthCare (Class A)* (Drugs and Health Care)....... 6,100 160,887 Oak Industries* (Capital Goods)............... 900 26,719 Ocwen Financial* (Financial Services)..................... 2,200 55,962 OM Group (Chemicals)............. 3,000 109,875 Omnicare (Drugs and Health Care)......................... 1,800 55,800 Personnel Group of America* (Business Goods and Services)................. 2,200 72,600 Petersen Companies (Class A)* (Media)............ 2,700 62,100 Physician Sales & Services* (Medical Products and Technology)............... 3,200 69,600 Pierce Leahy* (Business Goods and Services)................. 1,800 36,900 PMC-Sierra* (Technology)......... 4,800 149,700 Shares Value ---------- ----------- UNITED STATES (continued) PMT Services* (Business Goods and Services)................. 6,200 $ 86,606 Polymer Group* (Chemicals)................... 2,000 19,000 Pride International* (Energy).... 1,400 35,350 PSW Technologies* (Business Goods and Services)........... 2,900 41,506 Quorum Health Group* (Drugs and Health Care).............. 1,900 49,875 RDO Equipment (Class A)* (Retailing)................... 4,800 87,900 Regal Cinemas* (Leisure and Hotels)....................... 700 19,600 Renex* (Drugs and Health Care).................. 5,000 26,875 Roslyn Bancorp (Financial Services)..................... 2,000 46,563 Santa Fe Energy Resources* (Energy)...................... 4,900 55,125 Scherer (R.P.)* (Drugs and Health Care).................. 600 36,600 Simon Transportation Services* (Transportation).............. 4,600 109,250 SITEL* (Business Goods and Services)................. 4,000 36,500 Somnus Medical Technologies* (Medical Products and Technology)................... 5,000 63,281 Source Services* (Business Goods and Services)........... 5,700 122,194 Staff Leasing* (Business Goods and Services)................. 1,100 20,762 Steinway Musical Instruments* (Consumer Goods and Services)..................... 2,900 67,062 Synopsys* (Computer Software)..................... 2,400 85,650 Total Renal Care Holdings* (Drugs and Health Care)....... 6,833 187,907 Universal Outdoor Holdings* (Advertising)................. 6,000 312,750 Valley National Gases* (Chemicals)................... 6,100 66,528 Vishay Intertechnology* (Electronics)................. 3,400 80,325 Waters* (Medical Products and Technology)................... 1,600 60,200 Watson Pharmaceuticals* (Drugs and Health Care).............. 2,400 77,850 - --------------- * Non-income producing security. See Notes to Financial Statements. P-35 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ---------- ----------- UNITED STATES (continued) Wisconsin Central Transportation* (Transportation).............. 2,600 $ 60,937 Youth Services* (Support Services)..................... 8,900 136,559 Zag Industries* (Consumer Goods and Services)........... 14,200 124,250 ----------- 9,433,378 ----------- Total Common Stocks (Cost $18,902,276)............ 19,340,153 ----------- PREFERRED STOCKS -- 0.6% (Cost $148,363) GERMANY Gerry Weber International* (Manufacturing)............... 4,993 116,604 ----------- Principal Amount Value ---------- ----------- SUBORDINATED CONVERTIBLE BONDS -- 0.1% (Cost $19,151) FRANCE L'Europeenne d'Extincteurs 4-1/4%, 1/1/2005 (Manufacturing)...... $24,700 $ 19,275 ----------- SHORT-TERM HOLDINGS -- 4.4% (Cost $900,000).............. 900,000 ----------- Total Investments -- 99.4% (Cost $19,969,790)............ 20,376,032 Other Assets Less Liabilities -- 0.6%............ 128,558 ----------- Net Assets -- 100.0%.............. $20,504,590 ----------- ----------- - ------------------------------------------------------------------------------ SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 86.4% FINLAND -- 0.3% Nokia (Telecommunications)....... 175 $ 12,432 ----------- FRANCE -- 3.3% Alcatel Alsthom (Telecommunications).......... 300 38,145 Cap Gemini* (Computer Software)..................... 340 27,888 Rhone-Poulenc (Medical Products and Technology)................... 1,200 53,772 ----------- 119,805 ----------- GERMANY -- 1.6% LHS Group* (Computer Software)..................... 1,000 59,495 ----------- HONG KONG -- 1.0% Elec & Eltek International Holdings (Electronics)........ 150,000 37,174 ----------- HUNGARY -- 1.1% Richter Gedeon (GDRs) (Medical Products and Technology)................... 350 40,688 ----------- Shares Value ---------- ----------- INDIA -- 0.4% Videsh Sanchar Nigam (GDRs)+ (Telecommunications).......... 1,000 $ 13,875 ----------- ISRAEL -- 1.2% ECI Telecommunications (Networking/Communications Infrastructure)............... 1,700 43,456 ----------- ITALY -- 1.1% Telecom Italia (Telecommunications).......... 6,500 41,520 ----------- JAPAN -- 3.6% Canon (Computer Hardware/ Peripherals).................. 1,000 23,310 CSK (Computer and Business Services)..................... 1,000 25,611 Hirose Electronics (Electronics). 400 20,457 Secom (Computer and Business Services)..................... 1,000 63,950 ----------- 133,328 ----------- LUXEMBOURG -- 0.5% Millicom International Cellular* (Telecommunications).......... 500 18,688 ----------- - --------------- * Non-income producing security. + Rule 144A security. See Notes to Financial Statements. P-36 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued) Shares Value ---------- ----------- NETHERLANDS -- 3.3% ASM Lithography Holding* (Electronics Capital Equipment).................... 800 $ 54,050 Philips Electronics (Electronics)................. 1,150 69,006 ----------- 123,056 ----------- SINGAPORE -- 1.8% Amtek Engineering (Electronics Capital Equipment)............ 11,000 6,668 Informatics Holdings (Computer Software)........... 70,000 31,204 Venture Manufacturing (Electronics)................. 10,000 27,935 ----------- 65,807 ----------- SOUTH KOREA -- 0.1% SK Telecommunications (ADRs) (Telecommunications).......... 438 2,847 ----------- SWEDEN -- 2.5% L.M. Ericsson Telefon (Series B) (Networking/Communications Infrastructure)............... 500 18,811 Information Highway* (Computer and Business Services)........ 2,000 40,963 Pharmacia & Upjohn (Medical Products and Technology)...... 920 33,859 ----------- 93,633 ----------- TAIWAN -- 1.5% Siliconware Precision Industries (GDRs)* (Electronics Capital Equipment).................... 2,150 27,520 Taiwan Semiconductor Manufacturing (ADRs)* (Semiconductors).............. 1,500 27,281 ----------- 54,801 ----------- UNITED KINGDOM -- 16.4% Abacus Polar (Distributors)...... 8,500 20,708 Admiral (Computer and Business Services)..................... 7,000 83,072 Astec (Computer Hardware/ Peripherals).................. 12,600 22,164 BTG (Computer and Business Services)..................... 3,600 40,434 Shares Value ---------- ----------- UNITED KINGDOM (continued) Celltech* (Medical Products and Technology)................... 5,000 $ 24,569 CMG* (Computer Software)......... 3,000 75,565 CRT Group (Computer and Business Services)............ 8,700 51,013 Logica (Computer and Business Services)........... 2,988 57,126 Misys (Computer Software)........ 1,600 48,362 M.M.T. Computing (Computer and Business Services)........ 6,000 83,196 Premier Farnell (Distributors)... 3,500 25,465 Dr. Solomon's Group (ADRs)* (Computer Software)........... 1,650 52,800 VERO Group (Electronics)......... 12,500 18,582 ----------- 603,056 ----------- UNITED STATES -- 46.7% 3DO* (Computer Software)......... 2,400 5,212 Activision* (Computer Software)........... 800 14,350 Adaptec* (Electronics)........... 700 26,031 ADFlex Solutions* (Electronics)................. 600 9,788 American Power Conversion* (Computer Hardware/ Peripherals).................. 1,300 30,794 AMF Bowling* (Miscellaneous)............... 9,000 225,000 Applied Materials* (Electronics Capital Equipment)............ 800 24,075 Aspect Telecommunications* (Networking/Communications Infrastructure)............... 600 12,600 Cadence Design System* (Computer Software)........... 1,200 29,400 CIDCO* (Networking/ Communications Infrastructure)............... 400 7,625 Cisco Systems* (Networking/ Communications Infrastructure)............... 750 41,859 CMP Media (Class A)* (Media)..... 3,400 58,650 Cognex* (Electronics)............ 1,100 30,044 Creative Technology* (Computer Hardware/Peripherals)......... 2,500 54,844 Credence Systems* (Electronics Capital Equipment)............ 1,100 32,519 - -------------- * Non-income producing security. See Notes to Financial Statements. P-37 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL TECHNOLOGY PORTFOLIO (continued) Shares Value ---------- ----------- UNITED STATES (continued) Electro Scientific Industries* (Electronics Capital Equipment).................... 600 $ 22,988 Electronics for Imaging* (Electronics)................. 1,300 21,572 EMC* (Computer Hardware/ Peripherals).................. 2,400 65,850 Etec Systems* (Electronics Capital Equipment)............ 650 30,184 Flextronics International* (Electronics)................. 600 20,550 Gartner Group (Class A)* (Computer and Business Services)..................... 1,000 37,313 GaSonics International* (Electronics)................. 700 6,934 Gemstar International* (Telecommunications).......... 500 12,031 GenRad* (Electronics)............ 300 9,056 Hadco* (Electronics)............. 300 13,584 In Focus Systems* (Computer Hardware/Peripherals)......... 950 29,153 International Rectifier* (Semiconductors).............. 1,000 11,813 KLA-Tencor* (Electronics Capital Equipment).................... 900 34,734 Kulicke & Soffa Industries* (Electronics)................. 2,200 41,113 Lattice Semiconductor* (Semiconductors).............. 700 33,250 Lexmark International Group (Class A)* (Computer Hardware/Peripherals)......... 1,500 57,000 Maxim Integrated Products* (Semiconductors).............. 1,600 55,300 Microchip Technology* (Semiconductors).............. 1,200 36,075 MMC Networks* (Networking/ Communications Infrastructure)............... 6,000 100,313 Network Appliances* (Networking/Communications Infrastructure)............... 600 21,075 Networks Associates* (Computer Software)..................... 666 35,152 Novellus Systems* (Electronics Capital Equipment)............ 1,300 42,047 Shares or Principal Amount Value ---------- ---------- UNITED STATES (continued) Parametric Technology* (Computer Software)........... 1,300 shs. $ 61,506 PMC-Sierra* (Semiconductors).............. 1,000 31,188 Read-Rite* (Computer Hardware/ Peripherals).................. 1,900 30,162 Storage Technology* (Computer Hardware/Peripherals)......... 1,100 68,131 Structural Dynamics Research* (Computer Software)........... 2,100 47,513 Synopsys* (Computer Software)..................... 1,847 65,941 Teradyne* (Electronics Capital Equipment).................... 1,300 41,600 Veeco Instruments (Electronics Capital Equipment)............ 600 13,237 Vestcom International (Computer and Business Services)........ 1,000 22,000 ----------- 1,721,156 ----------- Total Common Stocks (Cost $3,241,519)............ 3,184,817 ----------- FIXED TIME DEPOSITS -- 10.8% Canadian Imperial Bank of Commerce, Grand Cayman 5.70%, dated 12/30/1997, maturing 1/2/1998............. $140,000 140,000 First National Bank of Chicago, Grand Cayman 5-1/2%, dated 12/30/1997, maturing 1/2/1998...................... 140,000 140,000 National Westminster, Nassau 5-1/4%, dated 12/30/1997, maturing 1/2/1998............. 120,000 120,000 ----------- Total Fixed Time Deposits (Cost $400,000)............... 400,000 ----------- Total Investments -- 97.2% (Cost $3,641,519)............. 3,584,817 Other Assets Less Liabilities -- 2.8%............ 101,411 ----------- Net Assets -- 100.0%.............. $ 3,686,228 ----------- ----------- - ----------------- * Non-income producing security. See Notes to Financial Statements. P-38 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO Shares Value ---------- ----------- COMMON STOCKS -- 94.3% AUSTRALIA -- 0.9% Australia and New Zealand Banking Group (Banking)....... 750 $ 4,954 Australian Gas Light (Resources)................... 1,800 12,548 Brambles Industries (Industrial Goods and Services)........... 370 7,340 ICI Australia (Manufacturing).... 1,000 7,004 Lend Lease (Construction and Property)..................... 510 9,968 Santos (Resources)............... 1,050 4,323 Telstra* (Telecommunications).... 2,400 5,067 Westpac Banking (Banking)........ 2,000 12,790 Woodside Petroleum (Resources)................... 1,300 9,164 Woolworth (Retailing)............ 2,000 6,684 ----------- 79,842 ----------- BELGIUM -- 1.4% Credit Communal Holding/Dexia* (Financial Services).......... 990 132,774 ----------- BRAZIL -- 3.5% Companhia Energetica de Minas Gerais "CEMIG" (ADRs) (Utilities)................... 2,000 90,000 Petroleo Brasileiro "Petrobras" (Resources)................... 4,625 108,163 Telecomunicacoes Brasileiras "Telebras" (ADRs) (Telecommunications).......... 1,050 122,259 ----------- 320,422 ----------- CROATIA -- 0.3% Pliva (GDRs) (Health and Household).................... 1,850 30,664 ----------- CZECH REPUBLIC -- 0.2% SPT Telecom* (Telecommunications).......... 200 21,400 ----------- DENMARK -- 0.9% Novo Nordisk (Class B) (Health and Household)................ 546 78,115 ----------- Shares Value ---------- ----------- FRANCE -- 10.5% Accor (Leisure and Hotels)....... 690 $ 128,332 AXA-UAP (Insurance).............. 1,739 134,605 Banque Nationale de Paris (Banking)..................... 2,209 117,453 Carrefour Supermarche (Retailing)................... 166 86,635 Cie Generale des Eaux (Industrial Goods and Services)..................... 929 129,703 ELF Aquitaine (Resources)........ 1,145 133,217 France Telecom* (Telecommunications).......... 1,544 56,022 Lafarge (Construction and Property)..................... 1,435 94,188 Usinor Sacilor (Metals).......... 5,884 84,986 ----------- 965,141 ----------- GERMANY -- 8.2% Adidas (Retailing)............... 667 88,268 Bayer (Chemicals)................ 2,765 102,624 Bayerische Vereinsbank* (Banking)..................... 1,842 118,809 Lufthansa (Transportation)....... 5,665 106,468 Mannesmann (Industrial Goods and Services)................. 288 144,605 SKW Trostberg (Chemicals)................... 2,556 81,152 Thyssen (Metals)................. 525 112,096 ----------- 754,022 ----------- HONG KONG -- 0.6% Cheung Kong (Construction and Property)..................... 1,000 6,551 CITIC Pacific (Miscellaneous).... 1,000 3,976 Hutchison Whampoa (Industrial Goods and Services)........... 1,000 6,273 New World Development (Construction and Property)..................... 1,000 3,459 New World Infrastructure (Construction and Property)..................... 3,000 6,757 Sun Hung Kai Properties (Construction and Property)..................... 200 1,394 - ------------- * Non-income producing security. See Notes to Financial Statements. P-39 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued) Shares Value ---------- ----------- HONG KONG (continued) Swire Pacific (Construction and Property)..................... 1,500 $ 8,229 Television Broadcasts (Media).... 3,000 8,558 Wharf Holdings (Construction and Property)................. 3,000 6,583 ----------- 51,780 ----------- HUNGARY -- 4.3% Magyar Tavkozlesi Rt. "Matav" (ADRs)* (Telecommunications).......... 6,840 177,840 MOL Magyar Olaj-es Gazipari (GDRs)* (Resources)........... 6,400 156,160 MOL Magyar Olaj-es Gazipari (GDRs)*+ (Resources).......... 2,600 63,440 ----------- 397,440 ----------- INDIA -- 1.2% Gujurat Ambuja Cement (GDRs) (Manufacturing)............... 7,060 50,303 Videsh Sanchar Nigam (GDRs)+ (Telecommunications).......... 4,450 61,744 ----------- 112,047 ----------- ITALY -- 3.7% ENI (Resources).................. 18,834 106,783 Istituto Nazionale delle Assicurazioni (Insurance)..... 3,693 90,705 Telecom Italia (Telecommunications).......... 32,408 142,892 ----------- 340,380 ----------- JAPAN -- 9.6% Aoyama Trading (Retailing)....... 700 12,506 Autobacs Seven (Retailing)....... 700 20,128 Bank of Tokyo Mitsubishi (Financial Services).......... 3,000 41,406 Banyu Pharmaceutical (Health and Household)................ 1,000 11,042 Benesse (Business Services)...... 500 12,038 CSK (Business Services).......... 1,700 43,538 Dai Nippon Printing (Industrial Goods and Services)........... 2,000 37,572 Denny's (Restaurants)............ 1,000 22,083 East Japan Railway (Transportation).............. 7 31,614 Fujitsu Business Systems (Business Services)........... 600 9,661 Shares Value ---------- ----------- JAPAN (continued) Hokkai Can (Manufacturing)....... 4,000 $ 7,668 Ishikawajima-Harima (Industrial Goods and Services)........... 18,000 26,914 Japan Airport Terminal (Transportation).............. 2,000 12,575 Japan Tobacco (Tobacco).......... 4 28,402 KAO (Consumer Products).......... 2,000 28,831 Kirin Brewery (Consumer Products)..................... 4,000 29,138 Mitsubishi Materials (Metals).... 10,000 16,102 Mitsui Chemicals (Chemicals)..... 13,000 23,924 Mitsui Marine & Fire (Insurance)................... 6,000 30,641 Mitsui O.S.K. Lines (Transportation).............. 19,000 26,370 Nippon Telegraph & Telephone (Telecommunications).......... 4 34,352 Nitto Denko (Industrial Goods and Services)................. 2,000 34,505 Nomura Securities (Financial Services)..................... 4,000 53,368 Pioneer Electronic+ (Electronics)................. 3,000 46,237 Sumitomo Bank (Banking).......... 4,000 45,700 Sumitomo Realty & Development (Construction and Property)..................... 7,000 40,256 Sumitomo Trust and Banking (Banking)..................... 5,000 25,994 Toho (Media)..................... 200 21,317 Toshiba (Electronics)............ 11,000 45,800 Tsubaki Nakashima (Manufacturing)............... 2,500 13,323 Yamaha (Manufacturing)........... 3,000 34,045 York-Benimaru (Retailing)........ 1,000 12,038 ----------- 879,088 ----------- MEXICO -- 2.9% Desc (ADRs) (Manufacturing)...... 5,423 203,363 Grupo Iusacell (ADRs)* (Telecommunications).......... 2,700 58,556 ----------- 261,919 ----------- NETHERLANDS -- 6.2% Akzo Nobel (Chemicals)........... 792 136,631 Benckiser (Series B) (Health and Household).................... 3,195 132,278 Elsevier (Media)................. 4,662 75,457 - --------------- * Non-income producing security. + Rule 144A security. See Notes to Financial Statements. P-40 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HENDERSON INTERNATIONAL PORTFOLIO (continued) Shares Value ---------- ----------- NETHERLANDS (continued) ING Groep (Insurance)............ 2,972 $ 125,245 Philips Electronics (Electronics)................. 1,667 100,028 ----------- 569,639 ----------- PORTUGAL -- 1.9% Electricidade de Portugal (Utilities)................... 2,966 56,192 Portugal Telecom (ADRs) (Telecommunications).......... 1,200 56,400 Telecel-Comunicacoes Pessoais* (Telecommunications).......... 590 62,897 ----------- 175,489 ----------- RUSSIA -- 1.7% Tatneft (ADRs) (Resources)....... 220 31,264 Tatneft (ADRs)+ (Resources)...... 860 122,550 ----------- 153,814 ----------- SINGAPORE -- 0.1% Singapore Press Holdings (Media)....................... 300 3,762 ----------- SPAIN -- 4.9% Actividades de Construccion y Servicios (Construction and Property)..................... 2,920 70,722 Banco Bilbao Vizcaya (Banking)..................... 4,233 136,974 Endesa (Utilities)............... 7,030 124,815 Telefonica de Espana (Telecommunications).......... 4,138 118,147 ----------- 450,658 ----------- SWEDEN -- 3.4% Astra (Health and Household)..... 5,233 90,689 Electrolux (Series B) (Consumer Products)..................... 249 17,292 L.M. Ericsson Telefon (Series B) (Telecommunications).......... 3,230 121,520 Nordbanken Holding (Banking)..... 14,899 84,315 ----------- 313,816 ----------- SWITZERLAND -- 6.3% CS Holdings (Banking)............ 779 120,420 Novartis (Health and Household).................... 81 131,306 Roche Holdings (Health and Household).................... 13 128,977 Shares Value ---------- ----------- SWITZERLAND (continued) Schweizerischer Bankerein (Banking)..................... 211 $ 65,523 Zurich Versicherungs (Insurance)................... 277 131,869 ----------- 578,095 ----------- TAIWAN -- 0.2% The ROC Taiwan Fund (Miscellaneous)............... 1,200 9,750 Taiwan Opportunities Fund* (Miscellaneous)............... 1,000 12,880 ----------- 22,630 ----------- UNITED KINGDOM -- 21.4% B.A.T. Industries (Tobacco)...... 17,000 155,698 British Biotech (Health and Household).................... 26,500 45,521 British Petroleum (Resources).... 9,500 125,608 Bunzl (Manufacturing)............ 28,000 109,607 Caradon (Building Materials)..... 16,200 48,030 Dixons Group (Retailing)......... 7,000 69,545 FKI Babcock (Industrial Goods and Services)................. 31,000 98,309 Granada Group (Leisure and Hotels)....................... 10,500 162,502 Laporte (Chemicals).............. 7,000 77,291 National Power (Utilities)....... 13,500 134,345 Railtrack Group (Transportation).............. 9,699 155,553 Reuters Holdings (Media)......... 8,500 93,854 Rolls Royce (Industrial Goods and Services)................. 23,500 89,274 Royal Bank of Scotland (Banking)..................... 11,500 147,778 Tesco (Retailing)................ 22,000 178,053 United Utilities (Utilities)..... 9,000 116,693 WPP Group (Media)................ 36,000 160,248 ----------- 1,967,909 ----------- Total Common Stocks (Cost $7,836,740)............. 8,660,846 Other Assets Less Liabilities -- 5.7%............ 521,619 ----------- Net Assets -- 100.0%.............. $ 9,182,465 ----------- ----------- - --------------- * Non-income producing security. + Rule 144A security. See Notes to Financial Statements. P-41 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO Principal Amount Value ---------- ----------- CORPORATE BONDS -- 90.0% ADVERTISING -- 0.6% Adams Outdoor Advertising 10-3/4%, 3/15/2006............. $ 125,000 $ 137,500 ----------- BROADCASTING -- 2.7% Capstar Broadcasting Partners 0% (12-3/4%**), 2/1/2009.......... 250,000 182,500 Paxson Communications 11-5/8%, 10/1/2002............. 200,000 215,000 SFX Broadcasting 10-3/4%, 5/15/2006.. ................... 200,000 220,000 ----------- 617,500 ----------- CABLE SYSTEMS -- 12.9% Cablevision Systems 10-1/2%, 5/15/2016...................... 250,000 291,875 Charter Communications Southeast Holdings 11-1/4%, 3/15/2006............. 250,000 278,750 Charter Communications Southeast Holdings 0% (14%**), 3/15/2007............. 300,000 238,500 Comcast 10-5/8%, 7/15/2012........ 50,000 62,750 Digital Television 12-1/2%, 8/1/2007+...................... 225,000 255,375 EchoStar DBS 12-1/2%, 7/1/2002....................... 250,000 271,250 Heartland Wireless Communications 14%, 10/15/2004..................... 200,000 75,000 Intermedia Capital Partners IV, 11-1/4%, 8/1/2006.............. 500,000 550,000 Northland Cable Television 10-1/4%, 11/15/2007+.................... 125,000 132,187 NTL 10%, 2/15/2007................ 50,000 52,875 Rogers Cablesystems 11%, 12/1/2015...................... 270,000 313,200 TCI Satellite Entertainment 10-7/8% 2/15/2007+............. 350,000 368,375 TCI Satellite Entertainment 0% (12-1/4%**), 2/15/2007+........ 100,000 67,000 Wireless One 13%, 10/15/2003..................... 150,000 54,750 ----------- 3,011,887 ----------- Principal Amount Value ---------- ----------- CELLULAR -- 2.9% Centennial Cellular 10-1/8%, 5/15/2005..................... $ 150,000 $ 163,500 Price Communications Wireless 11-3/4%, 7/15/2007+........... 250,000 272,500 PriCellular Wireless 10-3/4%, 11/1/2004..................... 225,000 244,687 ----------- 680,687 ----------- CHEMICALS -- 0.9 Texas Petrochemicals 11-1/8%, 7/1/2006...................... 200,000 216,000 ----------- COMPUTER AND RELATED SERVICES -- 3.5% DecisionOne 9-3/4%, 8/1/2007...... 100,000 103,250 DecisionOne Holdings 0% (11-1/2%**), 8/1/2008.......... 220,000 141,900 Unisys 12%, 4/15/2003............. 250,000 284,375 Unisys 11-3/4%, 10/15/2004........ 250,000 286,875 ----------- 816,400 ----------- CONSUMER PRODUCTS -- 4.2% American Pad & Paper 13%, 11/15/2005..................... 60,000 67,500 Amscan Holdings 9-7/8% 12/15/2007+.................... 150,000 154,125 Anchor Advanced Products 11-3/4%, 4/1/2004.............. 150,000 162,000 Carson 10-3/8%,11/1/2007+......... 150,000 150,750 French Fragrances 10-3/8%, 5/15/2007...................... 150,000 157,500 North Atlantic Trading 11%, 6/15/2004...................... 75,000 78,750 Ryder TRS 10%, 12/1/2006.......... 200,000 201,000 ----------- 971,625 ----------- CONTAINERS -- 1.0% Plastic Containers 10%, 12/15/2006..................... 100,000 106,500 U.S. Can 10-1/8%, 10/15/2006...... 125,000 133,125 ----------- 239,625 ----------- - --------------- +Rule 144A security. ** Deferred-interest debentures pay no interest for a stipulated number of years, after which they pay the indicated coupon rate. See Notes to Financial Statements. P-42 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued) Principal Amount Value ---------- ----------- ENERGY -- 0.5% Abraxas Petroleum 11-1/2%, 11/1/2004..................... $ 100,000 $ 109,750 ----------- EQUIPMENT -- 1.1% Williams Scotsman 9-7/8% 6/1/2007....................... 250,000 261,250 ----------- FINANCIAL SERVICES -- 3.3% AMRESCO 10%, 3/15/2004............ 125,000 130,312 Crown Castle International 0% (10-5/8%**), 11/15/2007+....... 175,000 109,812 Dollar Financial Group 10-7/8% 11/15/2006..................... 150,000 162,750 Iowa Select Farm 10-3/4%, 12/1/2005+..................... 75,000 77,344 Ocwen Capital Trust I 10-7/8% 8/1/2027....................... 150,000 163,500 Superior National Trust I 10-3/4%, 12/1/2017+..................... 25,000 25,687 Veritas Capital Trust 10%, 1/1/2028+...................... 90,000 92,025 ----------- 761,430 ----------- FOOD -- 4.3% AFC Enterprises 10-1/4%, 5/15/2007...................... 200,000 211,000 AmeriKing 10-3/4%, 12/1/2006...... 175,000 184,625 Ameriserve Food 10-1/8%, 7/15/2007...................... 250,000 263,750 Gorges/Quik-to-Fix Foods 11-1/2%, 12/1/2006...................... 250,000 265,000 International Home Foods 10-3/8%, 11/1/2006...................... 75,000 82,687 ----------- 1,007,062 ----------- GAMING/HOTEL -- 10.9% Alliance Gaming 10%, 8/1/2007+...................... 100,000 100,625 Ameristar Casinos 10-1/2%, 8/1/2004+...................... 200,000 205,000 Aztar 13-3/4%, 10/1/2004.......... 200,000 230,000 Casino America 12-1/2%, 8/1/2003....................... 400,000 436,500 Principal Amount Value ---------- ----------- GAMING/HOTEL (continued) Casino Magic of Louisiana 13%, 8/15/2003..................... $ 200,000 $ 193,000 Coast Hotels & Casinos 13%, 12/15/2002.................... 300,000 340,500 Fitzgerald Gaming 12-1/4%, 12/15/2004+................... 115,000 117,013 Showboat 13%, 8/1/2009........... 125,000 155,625 Showboat Marina Casino Partnership 13-1/2%, 3/15/2003............. 150,000 180,750 Trump Atlantic City Funding 11-1/4%, 5/1/2006.............. 350,000 343,000 Trump Atlantic City Funding 11-1/4%, 5/1/2006+............. 45,000 43,650 Trump Hotels & Casino Resorts Funding 15-1/2%, 6/15/2005..... 175,000 200,375 ----------- 2,546,038 ----------- HEALTH CARE/MEDICAL PRODUCTS -- 4.6% Alaris Medical 9-3/4%, 12/1/2006.. 200,000 211,000 Alliance Imaging 9-5/8%, 12/15/2005..................... 60,000 61,350 Dade International 11-1/8%, 5/1/2006....................... 200,000 221,000 Graphic Controls 12%, 9/15/2005...................... 150,000 168,000 Paracelsus Healthcare 10%, 8/15/2006...................... 200,000 205,000 Paragon Health 0% (10-1/2%**), 11/1/2007+..................... 175,000 109,375 Sun Healthcare Group 9-1/2%, 7/1/2007+...................... 100,000 103,000 ----------- 1,078,725 ----------- LEISURE-- 2.4% Affinity Group 11%, 4/1/2007...... 200,000 214,000 AMF Bowling 0% (12-1/4%**), 3/15/2006...................... 150,000 118,688 Premier Parks 12%, 8/15/2003...... 150,000 167,625 Premier Parks 9-3/4%, 1/15/2007... 50,000 53,500 ----------- 553,813 ----------- - --------------- + Rule 144A security. ** Deferred-interest debentures pay no interest for a stipulated number of years, after which they pay the indicated coupon rate. See Notes to Financial Statements. P-43 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued) Principal Amount Value ---------- ----------- MANUFACTURING -- 1.1% Airxcel 11%, 11/15/2007+......... $125,000 $ 129,375 Clark-Schwebel 12-1/2%, 7/15/2007+.................... 45,994 49,444 International Knife & Saw 11-3/8%, 11/15/2006.................... 50,000 54,250 Werner Holdings 10%, 11/15/2007+................... 30,000 30,900 ----------- 263,969 ----------- METALS -- 1.8% Koppers Industries 97/8% 12/1/2007+..................... 25,000 25,875 Renco Metals 11-1/2%, 7/1/2003.... 225,000 240,187 Royal Oak Mines 11%, 8/15/2006...................... 225,000 158,625 ----------- 424,687 ----------- PAGING -- 5.6% Metrocall 9-3/4%, 11/1/2007+...... 125,000 124,062 Mobile Telecommunication Technologies 13-1/2%, 12/15/2002..................... 375,000 436,875 Paging Network 10%, 10/15/2008..................... 450,000 468,563 ProNet 11-7/8% 6/15/2005.......... 250,000 270,000 ----------- 1,299,500 ----------- PAPER AND PACKAGING -- 1.6% BPC Holding 12-1/2%, 6/15/2006.... 150,000 165,750 Crown Paper 11%, 9/1/2005......... 200,000 207,000 ----------- 372,750 ----------- PUBLISHING-- 2.5% American Lawyer Media Holdings 9-3/4%, 12/15/2007+.................... 150,000 153,000 American Lawyer Media Holdings 0% (12-1/4%**), 12/15/2008+.................... 45,000 25,650 Perry-Judd 10-5/8%, 12/15/2007+... 50,000 52,250 Petersen Publishing 11-1/8%, 11/15/2006..................... 110,000 124,850 Principal Amount Value ---------- ----------- PUBLISHING (continued) TransWestern Holdings 0% (11-7/8%**), 11/15/2008+........ $110,000 $ 66,550 TransWestern Publishing 9-5/8%, 11/15/2007+.................... 30,000 31,350 Von Hoffman Press 10-3/4%, 5/15/2007+..................... 110,000 118,250 ----------- 571,900 ----------- RECORD STORAGE -- 0.4% Pierce Leahy 11-1/8%, 7/15/2006...................... 75,000 85,125 ----------- RETAILING-- 1.6% Central Tractor 10-5/8%, 4/1/2007. 200,000 212,000 Cole National Group 9-7/8% 12/31/2006..................... 150,000 161,250 ----------- 373,250 ----------- SUPERMARKETS -- 1.9% Jitney-Jungle Stores of America 12%, 3/1/2006.......... 175,000 199,500 Jitney-Jungle Stores of America 10-3/4%, 9/15/2007............. 125,000 130,312 Pathmark Stores 11-5/8%, 6/15/2002...................... 150,000 122,250 ----------- 452,062 ----------- TECHNOLOGY -- 2.2% Advanced Micro Devices 11%, 8/1/2003....................... 200,000 215,000 Therma-Wave 10-5/8%, 5/15/2004...................... 150,000 156,750 Viasystems 9-3/4%, 6/1/2007....... 125,000 129,844 ----------- 501,594 ----------- TELECOMMUNICATIONS -- 12.8% BTI Telecom 10-1/2%, 9/15/2007+..................... 175,000 179,375 GCI 9-3/4%, 8/1/2007.............. 170,000 177,225 GlobalStar 11-1/4%, 6/15/2004..... 175,000 176,313 ICG Holdings 0% (11-5/8%** ), 3/15/2007...................... 175,000 119,875 - --------------- + Rule 144A security. ** Deferred-interest debentures pay no interest for a stipulated number of years, after which they pay the indicated coupon rate. See Notes to Financial Statements. P-44 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued) Principal Amount Value ---------- ----------- TELECOMMUNICATIONS (continued) Intermedia Communications 0% (11-1/4%**), 7/1/2007....... $125,000 $ 89,688 Intermedia Communications 0% (12-1/2%**), 5/15/2006...... 150,000 118,500 ITC DeltaCom 11%, 6/1/2007........ 200,000 221,000 IXC Communications 12-1/2%, 10/1/2005...................... 325,000 376,188 Nextel Communications 0% (10.65%**), 9/15/2007+......... 350,000 222,250 NEXTLINK Communications 12-1/2%, 4/15/2006............. 250,000 286,250 Powertel 11-1/8%, 6/1/2007........ 225,000 245,250 RCN 10%, 10/15/2007+.............. 190,000 198,075 RCN 0% (11-1/8%**), 10/15/2007+.................... 175,000 110,250 Sprint Spectrum 11%, 8/15/2006...................... 200,000 226,000 Talton Holdings 11%, 6/30/2007+..................... 100,000 109,000 Verio 13-1/2%, 6/15/2004+......... 100,000 120,000 ----------- 2,975,239 ----------- THEATERS -- 1.3% Hollywood Theaters 10-5/8%, 8/1/2007+...................... 150,000 160,125 Plitt Theaters 10-7/8% 6/15/2004.. 125,000 135,625 ----------- 295,750 ----------- TRANSPORTATION -- 0.7% Atlas Air 10-3/4%, 8/1/2005....... 150,000 159,000 ----------- UTILITIES -- 0.7% Midland Cogeneration Venture 11-3/4%, 7/23/2005..... 125,000 149,988 ----------- Total Corporate Bonds (Cost $20,242,454).......... 20,934,106 ----------- Shares or Principal Amount Value ---------- ----------- PREFERRED STOCKS -- 4.1% BROADCASTING -- 2.5% Capstar Broadcasting Partners 12%............................ 750 shs. $ 86,437 Chancellor Media 12%+............. 1,376 158,584 SFX Broadcasting 12-5/8%.......... 1,500 171,375 Sinclair Capital 11-5/8%+......... 1,500 166,125 ----------- 582,521 ----------- CABLE SYSTEMS -- 0.6% EchoStar Communications 12-1/8%........................ 75 78,563 Pegasus Communications 12-3/4%........................ 50 55,875 ----------- 134,438 ----------- TELECOMMUNICATIONS -- 1.0% IXC Communications 12-1/2%+....... 123 144,901 NEXTLINK Communications 14%....... 1,385 86,216 ----------- 231,117 ----------- Total Preferred Stocks (Cost $839,463)............... 948,076 ----------- CONVERTIBLE SECURITIES -- 1.4% SUBORDINATED CONVERTIBLE BONDS -- 1.0% TECHNOLOGY -- 1.0% EMC 3-1/4%, 3/15/2002............. $75,000 101,906 Xilinx 5-1/4%, 11/1/2002+......... 150,000 146,063 ----------- Total Subordinated Convertible Bonds (Cost $245,439)......... 247,969 ----------- CONVERTIBLE PREFERRED STOCKS -- 0.4% (Cost $63,562) BROADCASTING -- 0.4% Chancellor Media $3+............. 1,250 96,719 ----------- - --------------- + Rule 144A security. ** Deferred-interest debentures pay no interest for a stipulated number of years, after which they pay the indicated coupon rate. See Notes to Financial Statements. P-45 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) - ------------------------------------------------------------------------------- SELIGMAN HIGH-YIELD BOND PORTFOLIO (continued) Value ----------- Total Convertible Securities (Cost $309,001)............... $ 344,688 ----------- Short-Term Holdings -- 1.3% (Cost $300,000)............... 300,000 ----------- Value ----------- Total Investments -- 96.8% (Cost $21,690,918)............ $22,526,870 Other Assets Less Liabilities -- 3.2% ......... 740,910 ----------- Net Assets -- 100.0%.............. $23,267,780 ----------- ----------- - ------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO Shares Value ---------- ----------- CONVERTIBLE SECURITIES -- 22.4% CONVERTIBLE PREFERRED STOCKS -- 15.0% AUTOMOTIVE AND RELATED -- 1.5% Federal-Mogul 7%+................ 4,000 $ 202,000 ----------- DRUGS AND HEALTH CARE -- 2.2% McKesson 5%+..................... 4,000 306,000 ----------- ENERGY -- 0.5% Lomak Petroleum 5-3/4%............ 1,500 70,875 ----------- ENVIRONMENTAL SERVICES -- 1.8% Browning-Ferris Industries 7-1/4%......................... 7,500 255,000 ----------- INSURANCE -- 4.5% St. Paul Capital 6%.............. 4,500 324,000 Salomon Smith Barney 7-5/8%....... 7,500 301,875 ----------- 625,875 ----------- OFFICE EQUIPMENT -- 1.7% IKON Office Solutions $5.04...... 3,500 237,125 ----------- TRANSPORTATION -- 2.0% Sea Containers $4.00............. 5,000 278,750 ----------- MISCELLANEOUS -- 0.8% Corning (Delaware) 6%............ 1,700 104,763 Principal Amount Value ---------- ----------- Total Convertible Preferred Stocks (Cost $1,811,482)...... $ 2,080,388 ----------- SUBORDINATED CONVERTIBLE BONDS -- 7.4% DIVERSIFIED -- 1.9% MascoTech 4-1/2%, 12/15/2003..... $ 300,000 262,500 ----------- ELECTRONICS -- 0.7% Park Electrochemical 5-1/2%, 3/1/2006+..................... 100,000 94,500 ----------- ENERGY -- 3.1% Santa Fe Pipelines 11.162%, 8/15/2010..................... 250,000 423,750 ----------- TECHNOLOGY -- 1.7% Xilinx 5-1/4%, 11/1/2002+........ 250,000 243,437 ----------- Total Subordinated Convertible Bonds (Cost $801,975)......... 1,024,187 ----------- Total Convertible Securities (Cost $2,613,457)............. 3,104,575 ----------- CORPORATE BONDS -- 18.4% AUTOMOTIVE AND RELATED-- 5.1% Chrysler Financial 6-1/2%, 6/15/1998..................... 200,000 200,628 Ford Motor Credit 6-3/4%, 8/15/2008..................... 250,000 253,211 General Motors Acceptance 5-5/8%, 2/1/1999.............. 250,000 249,093 ----------- 702,932 ----------- - ------------- + Rule 144A security. See Notes to Financial Statements. P-46 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO (continued) Shares or Principal Amount Value ---------- ----------- BANKING AND FINANCE -- 4.8% Associates Corp. of North America 6-1/2%, 8/15/2002.............. $300,000 $ 303,102 Capital One Bank 8-1/8%, 3/1/2000 250,000 258,977 First USA Bank 5-3/4%, 1/15/1999.. 100,000 99,819 ----------- 661,898 ----------- ELECTRONICS -- 0.0% StreamLogic 14%, 10/7/1998........ 33,999 6,800 ----------- FUNERAL SERVICES -- 2.2% Loewen Group International 7-1/2%, 4/15/2001...................... 300,000 309,212 ----------- PAPER AND PACKAGING -- 2.3% Owens-Illinois 7.85%, 5/15/2004...................... 300,000 315,376 ----------- RETAILING -- 4.0% Federated Department Stores 10%, 2/15/2001................. 500,000 551,557 ----------- Total Corporate Bonds (Cost $2,586,323).............. 2,547,775 ----------- US GOVERNMENT SECURITIES -- 15.1% US Treasury Notes 7-3/4%, 12/31/1999..................... 500,000 519,688 US Treasury Notes 6-1/4%, 6/30/2002...................... 500,000 510,313 US Treasury Notes 6-1/2%, 5/15/2005...................... 500,000 521,407 US Treasury Notes 6-5/8%, 5/15/2007...................... 500,000 529,531 ----------- Total US Government Securities (Cost $2,046,763).............. 2,080,939 ----------- COMMON STOCKS -- 33.9% AEROSPACE -- 1.0% General Dynamics.................. 1,600 shs. 138,300 ----------- Shares Value ---------- ----------- AUTOMOTIVE AND RELATED -- 0.5% Chrysler......................... 2,000 $ 70,375 ----------- BANKING AND FINANCE -- 2.2% Ahmanson (H.F.).................. 1,400 93,712 BankAmerica...................... 800 58,400 Citicorp......................... 600 75,862 First Union...................... 1,500 76,875 ----------- 304,849 ----------- CHEMICALS -- 1.0% duPont (E.l.) de Nemours......... 1,100 66,069 Goodrich (B.F.).................. 1,800 74,588 ----------- 140,657 ----------- CONSUMER GOODS AND SERVICES -- 5.9% Anheuser-Busch................... 1,200 52,800 General Mills.................... 1,900 136,088 PepsiCo.......................... 3,700 134,819 RJR Nabisco Holdings............. 3,700 138,750 Sara Lee......................... 3,200 180,200 The Stanley Works................ 1,800 84,937 Xerox............................ 1,200 88,575 ----------- 816,169 ----------- DIVERSIFIED -- 0.9% Tenneco.......................... 3,200 126,400 ----------- DRUGS AND HEALTH CARE -- 1.6% American Home Products........... 1,000 76,500 Bristol-Myers Squibb............. 1,500 141,937 ----------- 218,437 ----------- ELECTRIC AND GAS UTILITIES -- 2.5% Duke Energy...................... 1,900 105,212 FPL Group........................ 2,000 118,375 Williams Companies............... 4,400 124,850 ----------- 348,437 ----------- - ---------------- See Notes to Financial Statements. P-47 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Portfolios of Investments (continued) December 31, 1997 - ------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO (continued) Shares Value ---------- ----------- ELECTRONICS -- 1.7% AMP.............................. 3,300 $ 138,600 Thomas & Betts................... 2,100 99,225 ----------- 237,825 ----------- ENERGY -- 4.5% Atlantic Richfield............... 2,600 208,325 Exxon............................ 3,000 183,563 Royal Dutch Petroleum (Netherlands)................. 1,700 92,119 Snyder Oil....................... 3,666 66,905 Unocal........................... 1,800 69,862 ----------- 620,774 ----------- FOOD -- 1.2% ConAgra.......................... 5,000 164,062 ----------- INSURANCE -- 1.9% American General................. 3,200 173,000 Lincoln National................. 1,200 93,750 ----------- 266,750 ----------- MACHINERY -- 0.9% GATX............................. 1,700 123,356 ----------- PAPER AND PACKAGING -- 2.7% Bemis............................ 1,900 83,719 Mead............................. 1,600 44,800 Union Camp....................... 1,800 96,638 Weyerhaeuser..................... 3,000 147,187 ----------- 372,344 ----------- RETAILING -- 1.4% May Department Stores............ 1,600 84,300 Penney (J.C.).................... 1,800 108,563 ----------- 192,863 ----------- Shares or Principal Amount Value ---------- ----------- TOBACCO -- 1.0% Philip Morris.................... 2,900 shs. $ 131,406 ----------- TRANSPORTATION -- 0.6% Norfolk Southern................. 2,700 83,194 ----------- UTILITIES/ TELECOMMUNICATIONS -- 2.4% Bell Atlantic.................... 1,300 118,300 GTE.............................. 2,100 109,725 SBC Communications............... 1,500 109,875 ----------- 337,900 ----------- Total Common Stocks (Cost $4,347,191)............. 4,694,098 ----------- REPURCHASE AGREEMENTS -- 8.0% (Cost $1,100,000) HSBC Securities, Inc., 5%, dated 12/31/1997, maturing 1/5/1998 collateralized by: $1,045,000 US Treasury Notes 6-7/8% 5/15/2006, with a fair market value of $1,128,095........... $1,100,000 1,100,000 ----------- Total Investments -- 97.8% (Cost $12,693,734)............ 13,527,387 Other Assets Less Liabilities -- 2.2%........... 307,893 ----------- Net Assets -- 100.0%............. $13,835,280 ----------- ----------- - --------------- See Notes to Financial Statements. P-48 THIS PAGE INTENTIONALLY LEFT BLANK. P-49 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Statements of Assets and Liabilities - ------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman Seligman Cash Common Communications Bond Capital Management Stock and Information Portfolio Portfolio Portfolio Portfolio Portfolio ---------- ----------- ----------- -------------- ----------- ASSETS: Investments, at value (see portfolios of investments): Long-term holdings......................... $6,587,900 $19,976,895 -- $48,395,942 $85,992,038 Short-term holdings........................ 400,000 1,000,000 $8,903,295 2,000,000 6,800,000 ---------- ----------- ---------- ----------- ----------- Total Investments.......................... 6,987,900 20,976,895 8,903,295 50,395,942 92,792,038 Cash....................................... 149,578 240,536 -- 207,842 681,920 Interest and dividends receivable.......... 103,107 5,554 69 90,240 5,729 Receivable for Capital Stock sold.......... 3,776 29,356 -- 75,128 934,098 Receivable from associated companies....... 1,177 784 4,651 -- -- Receivable for securities sold............. -- 387,161 -- -- 86,247 Unrealized appreciation on foreign currencies and forward currency contracts.............................. -- -- -- -- -- ---------- ----------- ---------- ----------- ----------- Total Assets............................... 7,245,538 21,640,286 8,908,015 50,769,152 94,500,032 ---------- ----------- ---------- ----------- ----------- LIABILITIES: Payable for Capital Stock redeemed......... 64 165 127,943 473 -- Payable for securities purchased........... -- 1,222,115 -- -- 6,795,250 Payable to custodian....................... -- -- 134,067 -- -- Unrealized depreciation on foreign currencies and forward currency contracts............................... -- -- -- -- -- Accrued expenses, taxes, and other......... 13,437 18,214 10,719 31,516 71,945 ---------- ----------- ---------- ----------- ----------- Total Liabilities.......................... 13,501 1,240,494 272,729 31,989 6,867,195 ---------- ----------- ---------- ----------- ----------- Net Assets................................. $7,232,037 $20,399,792 $8,635,286 $50,737,163 $87,632,837 ---------- ----------- ---------- ----------- ----------- ---------- ----------- ---------- ----------- ----------- COMPOSITION OF NET ASSETS: Capital Stock, at par...................... $ 707 $ 1,127 $ 8,636 $ 3,117 $ 6,696 Additional paid-in capital................. 7,065,414 16,281,718 8,627,048 42,448,949 93,353,881 Undistributed/accumulated net investment income (loss)........... (4,143) (4,488) -- 30,252 (1,661) Undistributed/accumulated net realized gain (loss)................... (51,898) 137,177 (398) 1,586 -- Net unrealized appreciation (depreciation) of investments......................... 221,957 3,984,258 -- 8,253,259 (5,726,079) Net unrealized appreciation (depreciation) on translation of assets and liabilities denominated in foreign currencies and forward currency contracts............. -- -- -- -- -- ---------- ----------- ---------- ----------- ----------- Net Assets................................. $7,232,037 $20,399,792 $8,635,286 $50,737,163 $87,632,837 ---------- ----------- ---------- ----------- ----------- ---------- ----------- ---------- ----------- ----------- Shares of Capital Stock Outstanding ($.001 par value)....................... 706,526 1,127,236 8,635,684 3,116,853 6,696,036 ---------- ----------- ---------- ----------- ----------- ---------- ----------- ---------- ----------- ----------- Net Asset Value per Share.................. $10.24 $18.10 $1.00 $16.28 $13.09 ---------- ----------- ---------- ----------- ----------- ---------- ----------- ---------- ----------- -----------
- ---------------------- See Notes to Financial Statements. P-50 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ December 31, 1997 - ------------------------------------------------------------------------------
Seligman Seligman Seligman Henderson Henderson Henderson Seligman Seligman Seligman Global Growth Global Smaller Global Henderson High-Yield Seligman Frontier Opportunities Companies Technology International Bond Income Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio - --------- ----------- ----------- ------------ ----------- ---------- --------- $40,378,514 $5,212,147 $19,476,032 $3,184,817 $8,660,846 $22,226,870 $12,427,387 3,000,000 300,000 900,000 400,000 -- 300,000 1,100,000 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- 43,378,514 5,512,147 20,376,032 3,584,817 8,660,846 22,526,870 13,527,387 209,739 278,472 395,833 162,039 476,397 211,942 206,245 6,760 5,196 42,983 2,181 30,560 512,700 92,409 146,927 337 260 2,872 1,360 58,140 24,487 -- 3,356 9,667 2,633 7,833 -- 331 150,292 1,102 31,571 -- 4,597 -- -- -- 7,268 37,769 -- 25,580 -- -- - ----------- ---------- ----------- ---------- ---------- ----------- ----------- 43,892,232 5,807,878 20,894,115 3,754,542 9,207,173 23,309,652 13,850,859 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- -- 15,098 35,449 -- 37 -- 133 877,881 331,066 321,845 58,650 3,678 20,250 -- -- -- -- -- -- -- -- -- 393 -- -- 16 -- -- 41,078 12,089 32,231 9,664 20,977 21,622 15,446 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- 918,959 358,646 389,525 68,314 24,708 41,872 15,579 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- $42,973,273 $5,449,232 $20,504,590 $3,686,228 $9,182,465 $23,267,780 $13,835,280 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- - ----------- ---------- ----------- ---------- ---------- ----------- ----------- $ 2,723 $ 494 $ 1,580 $ 348 $ 678 $ 1,961 $ 1,281 39,932,315 5,157,361 20,063,377 3,743,487 8,338,198 22,420,933 12,988,331 (1,619) 472 (1,600) (826) (2,941) 8,934 11,118 -- -- -- -- -- -- 897 3,039,854 411,604 1,143,316 (25,171) 1,092,500 835,952 833,653 -- (120,699) (702,083) (31,610) (245,970) -- -- - ----------- ---------- ----------- ---------- ---------- ----------- ----------- $42,973,273 $5,449,232 $20,504,590 $3,686,228 $9,182,465 $23,267,780 $13,835,280 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- - ----------- ---------- ----------- ---------- ---------- ----------- ----------- 2,723,359 494,253 1,580,175 348,219 678,213 1,960,568 1,280,951 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- - ----------- ---------- ----------- ---------- ---------- ----------- ----------- $15.78 $11.03 $12.98 $10.59 $13.54 $11.87 $10.80 - ----------- ---------- ----------- ---------- ---------- ----------- ----------- - ----------- ---------- ----------- ---------- ---------- ----------- -----------
P-51 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Statements of Operations - ------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman Seligman Cash Common Communications Bond Capital Management Stock and Information Portfolio Portfolio Portfolio Portfolio Portfolio ---------- ----------- ----------- -------------- ----------- INVESTMENT INCOME: Interest................................... $394,336 $ 50,153 $512,275 $ 455,945 $ 242,059 Dividends*................................. -- 83,568 -- 639,449 42,765 -------- ----------- -------- ---------- ----------- Total Investment Income.................... 394,336 133,721 512,275 1,095,394 284,824 -------- ----------- -------- ---------- ----------- EXPENSES: Management fees............................ 23,150 70,147 38,042 178,662 574,370 Shareholder reports and communications.......................... 6,874 6,874 6,874 6,874 4,766 Auditing fees.............................. 6,356 10,556 8,554 21,254 31,256 Directors' fees and expenses............... 3,966 4,082 4,004 4,340 4,616 Custody and related services............... 3,683 11,489 13,779 17,969 39,170 Registration............................... 1,359 2,022 972 4,469 4,397 Legal fees................................. 1,345 1,345 1,345 1,345 1,442 Miscellaneous.............................. 1,044 1,411 1,153 2,270 3,111 -------- ----------- -------- ---------- ----------- Total Expenses Before Waiver/Reimbursement.................... 47,777 107,926 74,723 237,183 663,128 Waiver/reimbursement of expenses........... (13,068) (2,708) (74,723) -- -- -------- ----------- -------- ---------- ----------- Total Expenses After Waiver/ Reimbursement........................... 34,709 105,218 -- 237,183 663,128 -------- ----------- -------- ---------- ----------- Net Investment Income (Loss)............... 359,627 28,503 512,275 858,211 (378,304) -------- ----------- -------- ---------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain (loss) on investments.... 2,573 1,456,363 -- 6,975,977 25,855,124 Net realized loss from foreign currency transactions................... -- -- -- -- -- Net change in unrealized appreciation/ depreciation of investments............. 158,584 1,876,910 -- 523,788 (10,538,214) Netchange in unrealized appreciation/ depreciation on translation of assets and liabilities denominated in foreign currencies and forward currency contracts...................... -- -- -- -- -- -------- ----------- -------- ---------- ----------- Net Gain (Loss) on Investments and Foreign Currency Transactions............................ 161,157 3,333,273 -- 7,499,765 15,316,910 -------- ----------- -------- ---------- ----------- Increase in Net Assets from Operations......................... $520,784 $3,361,776 $512,275 $8,357,976 $14,938,606 -------- ----------- -------- ---------- ----------- -------- ----------- -------- ---------- ----------- - ---------------------------- * Net of foreign tax withheld as follows: $ -- $ 511 $ -- $ 2,868 $ 1,575 See Notes to Financial Statements.
P-52 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ For the Year Ended December 31, 1997 - ------------------------------------------------------------------------------
Seligman Seligman Seligman Henderson Henderson Henderson Seligman Seligman Seligman Global Growth Global Smaller Global Henderson High-Yield Seligman Frontier Opportunities Companies Technology International Bond Income Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio - --------- ----------- ----------- ------------ ----------- ---------- --------- $ 116,255 $ 22,193 $ 49,082 $ 15,984 $ 24,643 $1,684,004 $ 466,955 34,531 31,782 279,653 24,294 136,659 63,550 255,598 - ---------- -------- -------- -------- -------- ---------- ---------- 150,786 53,975 328,735 40,278 161,302 1,747,554 722,553 - ---------- -------- -------- -------- -------- ---------- ---------- 282,248 38,358 200,415 26,504 88,212 84,740 54,451 4,766 4,766 4,766 4,766 4,766 4,766 6,874 17,456 4,600 11,300 4,500 7,100 8,556 9,956 4,237 3,894 4,066 3,892 3,952 4,005 4,061 18,795 25,563 86,946 12,731 74,727 27,025 6,882 4,146 1,281 1,673 994 1,739 1,906 1,242 1,396 1,348 1,359 1,347 1,352 1,367 1,345 2,023 975 1,514 925 1,162 1,341 1,292 - ---------- -------- -------- -------- -------- ---------- ---------- 335,067 80,785 312,039 55,659 183,010 133,706 86,103 -- (27,093) (31,463) (18,553) (59,491) (15,066) (4,416) - ---------- -------- -------- -------- -------- ---------- ---------- 335,067 53,692 280,576 37,106 123,519 118,640 81,687 - ---------- -------- -------- -------- -------- ---------- ---------- (184,281) 283 48,159 3,172 37,783 1,628,914 640,866 - ---------- -------- -------- -------- -------- ---------- ---------- 4,064,832 141,228 813,641 513,781 665,686 186,257 731,075 -- (73,436) (407,259) (12,358) (422,188) -- 5,037 1,855,841 381,018 750,188 (84,833) 439,369 571,005 419,679 -- (112,875) (536,914) (40,471) (72,394) -- (10,907) - ---------- -------- -------- -------- -------- ---------- ---------- 5,920,673 335,935 619,656 376,119 610,473 757,262 1,144,884 - ---------- -------- -------- -------- -------- ---------- ---------- $5,736,392 $336,218 $667,815 $379,291 $648,256 $2,386,176 $1,785,750 - ---------- -------- -------- -------- -------- ---------- ---------- - ---------- -------- -------- -------- -------- ---------- ---------- $ 222 $ 2,873 $ 38,977 $ 1,620 $ 16,430 $ -- $ 18
P-53 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Statements of Changes in Net Assets - ------------------------------------------------------------------------------
Seligman Seligman Seligman Bond Portfolio Capital Portfolio Cash Management Portfolio -------------------- --------------------- ------------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, -------------------- --------------------- -------------------- 1997 1996 1997 1996 1997 1996 -------- -------- -------- -------- -------- -------- OPERATIONS: Net investment income (loss).......... $ 359,627 $ 269,490 $ 28,503 $ 34,560 $ 512,275 $ 483,722 Net realized gain (loss) on investments........................ 2,573 42,902 1,456,363 793,791 -- -- Net realized gain (loss) from foreign currency transactions....................... -- -- -- -- -- -- Net change in unrealized appreciation/depreciation of investments..................... 158,584 (291,839) 1,876,910 666,893 -- -- Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies and forward currency contracts......... -- -- -- -- -- -- ---------- ---------- ----------- ----------- ---------- ---------- Increase in Net Assets From Operations......................... 520,784 20,553 3,361,776 1,495,244 512,275 483,722 ---------- ---------- ----------- ----------- ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income................. (360,523) (269,359) (29,292) (35,038) (512,275) (483,722) Realized gain on investments.......... -- -- (1,319,186) (852,588) -- -- ---------- ---------- ----------- ----------- ---------- ---------- Decrease in Net Assets From Distributions...................... (360,523) (269,359) (1,348,478) (887,626) (512,275) (483,722) ---------- ---------- ----------- ----------- ---------- ---------- CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares............................. 3,014,160 2,178,074 7,491,753 6,122,881 25,875,970 16,950,432 Investment of dividends............... 360,523 269,359 29,292 35,038 512,275 483,722 Shares issued in payment of gain distributions.............. -- -- 1,319,186 852,588 -- -- ---------- ---------- ----------- ----------- ---------- ---------- Total................................. 3,374,683 2,447,433 8,840,231 7,010,507 26,388,245 17,434,154 ---------- ---------- ----------- ----------- ---------- ---------- Cost of shares redeemed............... (1,317,788) (1,680,294) (4,766,794) (2,598,584) (27,507,851) (15,478,773) ---------- ---------- ----------- ----------- ---------- ---------- Increase (Decrease) in Net Assets From Capital Share Transactions................. 2,056,895 767,139 4,073,437 4,411,923 (1,119,606) 1,955,381 ---------- ---------- ----------- ----------- ---------- ---------- Increase (Decrease) in Net Assets......................... 2,217,156 518,333 6,086,735 5,019,541 (1,119,606) 1,955,381 Net Assets: Beginning of year..................... 5,014,881 4,496,548 14,313,057 9,293,516 9,754,892 7,799,511 ---------- ---------- ----------- ----------- ---------- ---------- End of Year........................... $7,232,037 $5,014,881 $20,399,792 $14,313,057 $8,635,286 $9,754,892 ========== ========== =========== =========== ========== ========== - ---------------------- * For the period May 1, 1996, commencement of operations, to December 31, 1996. See Notes to Financial Statements.
P-54 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman Henderson Henderson Common Stock Communications and Seligman Global Growth Global Smaller Portfolio Information Portfolio Frontier Portfolio Opportunities Portfolio Companies Portfolio ----------------------- ----------------------- ------------------------ ------------------------- ----------------------- Year Ended Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, December 31, ----------------------- ----------------------- ----------------------- ------------------------- ------------------------ 1997 1996 1997 1996 1997 1996 1997 1996* 1997 1996 ----------- --------- ----------- --------- ----------- --------- ----------- ----------- ----------- ---------- $ 858,211 $ 666,793 $ (378,304) $ (159,892) $ (184,281) $ (80,539) $ 283 $ 1,510 $ 48,159 $ 24,879 6,975,977 4,441,023 25,855,124 (3,546,285) 4,064,832 3,410,956 141,228 (9,589) 813,641 1,146,142 -- (56,144) -- -- -- -- (73,436) 297 (407,259) 34,461 523,788 985,046 (10,538,214) 8,651,223 1,855,841 693,961 381,018 30,586 750,188 192,735 -- 55,242 -- -- -- -- (112,875) (7,824) (536,914) (129,401) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- 8,357,976 6,091,960 14,938,606 4,945,046 5,736,392 4,024,378 336,218 14,980 667,815 1,268,816 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- (827,581) (669,792) -- -- -- -- -- (1,843) (26,233) (21,782) (6,979,440) (4,598,840) (22,307,569) -- (3,889,283) (3,392,252) (60,644) -- (475,283) (1,150,819) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- (7,807,021) (5,268,632) (22,307,569) -- (3,889,283) (3,392,252) (60,644) (1,843) (501,516) (1,172,601) 12,649,970 11,490,927 50,718,332 27,653,569 18,870,587 17,892,649 4,394,619 1,707,364 5,959,379 11,760,606 827,581 669,792 -- -- -- -- -- 1,843 26,233 21,782 6,979,440 4,598,840 22,307,569 -- 3,889,283 3,392,252 60,644 -- 475,283 1,150,819 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- 20,456,991 16,759,559 73,025,901 27,653,569 22,759,870 21,284,901 4,455,263 1,709,207 6,460,895 12,933,207 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- (7,439,183) (9,250,532) (38,669,048) (10,395,761) (13,305,727) (2,721,117) (871,295) (132,654) (2,998,851) (989,791) ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- 13,017,808 7,509,027 34,356,853 17,257,808 9,454,143 18,563,784 3,583,968 1,576,553 3,462,044 11,943,416 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- 13,568,763 8,332,355 26,987,890 22,202,854 11,301,252 19,195,910 3,859,542 1,589,690 3,628,343 12,039,631 37,168,400 28,836,045 60,644,947 38,442,093 31,672,021 12,476,111 1,589,690 -- 16,876,247 4,836,616 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- $50,737,163 $37,168,400 $87,632,837 $60,644,947 $42,973,273 $31,672,021 $5,449,232 $1,589,690 $20,504,590 $16,876,247 ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- -----------
P-55 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Statements of Changes in Net Assets (continued) - ------------------------------------------------------------------------------
Seligman Seligman Henderson Henderson Seligman Global Technology International High-Yield Seligman Portfolio Portfolio Bond Portfolio Income Portfolio ------------------- ------------------ ------------------- ------------------- Year Ended Year Ended Year Ended Year Ended December 31, December 31, December 31, December 31, ------------------ ------------------ ------------------- ------------------- 1997 1996* 1997 1996 1997 1996 1997 1996 -------- -------- --------- ------- --------- -------- --------- -------- OPERATIONS: Net investment income (loss).. $ 3,172 $ (2,332) $ 37,783 $ 40,190 $ 1,628,914 $ 700,400 $ 640,866 $ 665,263 Net realized gain (loss) on investments................ 513,781 9,847 665,686 99,382 186,257 71,419 731,075 188,849 Net realized gain (loss) from foreign currency transactions............... (12,358) (762) (422,188) 29,228 -- -- 5,037 (24) Net change in unrealized appreciation/depreciation of investments............. (84,833) 59,662 439,369 378,494 571,005 207,559 419,679 (75,436) Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currenciesand forward currency contracts. (40,471) 8,861 (72,394) (153,172) -- -- (10,907) 7,431 ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- Increase in Net Assets From Operations................. 379,291 75,276 648,256 394,122 2,386,176 979,378 1,785,750 786,083 ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income......... (3,585) -- (17,648) (36,924) (1,614,526) (700,656) (625,869) (693,657) Realized gain on investments.. (503,962) (10,437) (308,510) (128,691) (193,743) (71,346) (735,166) (198,872) ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- Decrease in Net Assets From Distributions......... (507,547) (10,437) (326,158) (165,615) (1,808,269) (772,002) (1,361,035) (892,529) ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares..................... 3,874,388 1,484,242 3,331,657 4,060,684 16,215,266 9,904,511 2,166,510 5,080,349 Investment of dividends....... 3,585 -- 17,648 36,924 1,614,526 700,656 625,869 693,657 Shares issued in payment of gain distributions......... 503,962 10,437 308,510 128,691 193,743 71,346 735,166 198,872 ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- Total......................... 4,381,935 1,494,679 3,657,815 4,226,299 18,023,535 10,676,513 3,527,545 5,972,878 ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- Cost of shares redeemed....... (1,931,166) (195,803) (2,039,720) (1,395,763) (6,510,022) (2,716,951) (3,833,770) (4,769,122) ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- Increase (Decrease) in Net Assets From Capital Share Transactions......... 2,450,769 1,298,876 1,618,095 2,830,536 11,513,513 7,959,562 (306,225) 1,203,756 ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- Increase in Net Assets........ 2,322,513 1,363,715 1,940,193 3,059,043 12,091,420 8,166,938 118,490 1,097,310 Net Assets: Beginning of year............. 1,363,715 -- 7,242,272 4,183,229 11,176,360 3,009,422 13,716,790 12,619,480 ---------- ---------- ---------- ---------- ----------- ----------- ----------- ----------- End of Year................... $3,686,228 $1,363,715 $9,182,465 $7,242,272 $23,267,780 $11,176,360 $13,835,280 $13,716,790 ========== ========== ========== ========== =========== =========== =========== =========== - ---------------------- * For the period May 1, 1996, commencement of operations, to December 31, 1996. See Notes to Financial Statements.
P-56 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Notes to Financial Statements - ------------------------------------------------------------------------------ 1. Organization -- Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management investment company consisting of twelve separate portfolios (the "Portfolios"): "Seligman Bond Portfolio" ("Bond Portfolio"), "Seligman Capital Portfolio" ("Capital Portfolio"), "Seligman Cash Management Portfolio" ("Cash Management Portfolio"), "Seligman Common Stock Portfolio" ("Common Stock Portfolio"), "Seligman Communications and Information Portfolio" ("Communications and Information Portfolio"), "Seligman Frontier Portfolio" ("Frontier Portfolio"), "Seligman Henderson Global Growth Opportunities Portfolio" ("Global Growth Opportunities Portfolio"), "Seligman Henderson Global Smaller Companies Portfolio" ("Global Smaller Companies Portfolio"),"Seligman Henderson Global Technology Portfolio" ("Global Technology Portfolio"), "Seligman Henderson International Portfolio" ("International Portfolio"), "Seligman High-Yield Bond Portfolio" ("High-Yield Bond Portfolio"), and "Seligman Income Portfolio" ("Income Portfolio"), each designed to meet different investment goals. Shares of the Fund are currently provided as the investment medium for Canada Life of America Variable Annuity Account 2 ("CLVA-2"), which is offered by Canada Life Insurance Company of America ("CLICA"), Canada Life of New York Variable Annuity Account 2 ("CLNYVA-2") which is offered by Canada Life Insurance Company of New York ("CLNY"), and Canada Life of America Annuity Account 3 ("CLVA-3"), which is offered by CLICA. CLVA-2 and CLNYVA-2 are registered as unit investment trusts under the Investment Company Act of 1940, as amended (the "1940 Act") and fund variable annuity contracts (the "CLVA-2 Contracts") issued by CLICA and CLNY and distributed by Seligman Financial Services, Inc. CLVA-3 is not registered or regulated as a unit investment trust under the 1940 Act in reliance on the exemption provided in Section 3(c)(11) of the 1940 Act, and funds variable annuity contracts (the "CLVA-3 Contracts") issued by CLICA and distributed by Seligman Financial Services, Inc. CLVA-3 Contracts may be purchased only by pension or profit-sharing employee benefit plans that satisfy the requirements for qualification set forth in Section 401 of the Internal Revenue Code of 1986, as amended. Shares of the Fund are also provided as the investment medium for other variable annuity accounts established by CLICA or its affiliates ("Canada Life Separate Accounts"). Shares of the Bond, Capital,CashManagement,CommonStock, andIncomePortfolios are also provided as the investment medium for Seligman Mutual Benefit Plan (the "Mutual Benefit Plan"), a separate account of MBLLife Assurance Corporation ("MBL Life"). However, MBL Life has decided that it will not accept applications for new contracts nor will it accept additional purchase payments under existing contracts. In addition, requests for transfers of amounts to its Fixed Accumulation Account from the Mutual Benefit Plan will not be accepted. 2. 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 Fund: a. Security Valuation --Investments in US Government andGovernment Agency securities, bonds, convertible securities, and stocks are valued at the most current market values or, in their absence, at fair market values determined in accordance with procedures approved by the Board of Directors. Securities traded on national exchanges are valued at the last sales prices or, in their absence and in the case of over-the-counter securities, at the mean of closing bid and asked prices. Short-term holdings maturing in 60 days or less are valued at amortized cost. Investments held by Cash Management Portfolio are valued using the amortized cost method which approximates fair value. b. Foreign Securities -- The Portfolios may invest up to 10% of their total assets in foreign securities (except Global Growth Opportunities Portfolio, Global Smaller Companies Portfolio, Global Technology Portfolio, and International Portfolio, which may invest up to 100% of their total assets in foreign securities). Investments in foreign securities will usually be denominated in foreign currencies, and the Portfolios may temporarily hold funds in foreign currencies. The Portfolios may also invest in US dollar-denominated American Depositary Receipts ("ADRs"), American Depositary Shares ("ADSs"), European Depositary Receipts ("EDRs"), Global Depositary Receipts ("GDRs"), and Global Depositary Shares ("GDSs"). ADRs and ADSs are issued by domestic banks or trust companies and evidence ownership of securities issued by foreign corporations. ADRs and ADSs are traded on United States exchanges or over-the-counter and are not included in the 10% limitation. EDRs,GDRs,and GDSs are receipts similar to ADRs and ADSs and are typically issued by foreign banks or trust companies and traded in Europe. The books and records of the Portfolios are maintained in US dollars. Foreign currency amounts are translated into US dollars on the following basis: (i) market value of investment securities, other assets, and liabilities, at the daily rate of exchange as reported by a pricing service; (ii)purchases and sales of investment securities, income and expenses, at the rate of exchange prevailing on the respective dates of such transactions. The net asset values per share of Portfolios which invest in securities denominated in foreign currencies will be affected by changes in currency exchange rates. Changes in foreign currency exchange rates may also affect the value of dividends and interest earned, gains and losses realized on sales of securities, and net investment income and gains, if any, to be distributed to shareholders of the Portfolios. The rate of exchange between the US dollar and other currencies is determined by the forces of supply and demand in the foreign exchange markets. Net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and from the difference between the amounts of dividends, interest and foreign withholding P-57 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Notes to Financial Statements (continued) - ------------------------------------------------------------------------------ taxes recorded on the Portfolios' books, and the US dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of portfolio securities and other foreign currency-denominated assets and liabilities at period end, resulting from changes in exchange rates. The Portfolios separate 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 Portfolios. Similarly, the Portfolios separate 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 Global Growth Opportunities Portfolio, Global Smaller Companies Portfolio, Global Technology Portfolio, and International Portfolio may enter into forward currency contracts in order to hedge their exposure to changes in foreign currency exchange rates on their 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. For federal income tax purposes, certain open forward currency contracts are treated as sold on the last day of the fiscal year and any gains or losses are recognized immediately. As a result, the amount of income distributable to shareholders may vary from the amount recognized for financial statement purposes. d. Federal Taxes -- The Portfolios' policy is to comply with the requirements of the Internal Revenue Code applicable to Regulated Investment Companies and to distribute substantially all of their taxable net income and net gain realized to shareholders. e. Security Transactions and Related Investment Income --Investment transactions are recorded on trade dates. Interest income is recorded on the accrual basis. The Portfolios amortize market discounts and premiums on purchases of portfolio securities. 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 Fund is informed of the dividend. f. Repurchase Agreements --The Portfolios may enter into repurchase agreements with commercial banks and with broker/dealers deemed to be creditworthy by J. & W. Seligman & Co. Incorporated (the "Manager"). Securities purchased subject to repurchase agreements are deposited with the Portfolios' custodians and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price, plus accrued interest, at all times. Procedures have been established to monitor, on a daily basis, the market value of the repurchase agreements' underlying securities to ensure the existence of the proper level of collateral. g. Expense Allocations -- Expenses directly attributable to each Portfolio are charged to such Portfolio, and expenses that are applicable to more than one Portfolio are allocated among them. h. Distributions to Shareholders -- The treatment for financial statement purposes of distributions made during the year from net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. These differences primarily are caused by differences in the timing of the recognition of certain components of income, expense or capital gain and the recharacterization of foreign exchange gains or losses to either ordinary income or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net 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 values per share of the Portfolios. 3. Purchases and Sales of Securities --Purchases and sales of portfolio securities, excluding US Government obligations and short-term investments, for the year ended December 31, 1997, were as follows: Portfolio Purchases Sales --------- ------------ ------------ Bond $ 5,091,586 $ 4,134,111 Capital 19,047,518 15,667,004 Common Stock 40,626,631 28,596,935 Communications and Information 211,971,199 200,473,181 Frontier 41,767,990 36,189,622 Global Growth Opportunities 6,136,540 2,643,212 Global Smaller Companies 15,065,283 12,282,453 Global Technology 5,267,471 3,882,450 International 9,185,558 7,351,490 P-58 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ Portfolio Purchases Sales --------- ------------ ------------- High-Yield Bond $ 23,074,271 $ 12,229,771 Income 10,225,670 11,098,708 For the year ended December 31, 1997, purchases and sales of US Government obligations were $5,210,388 and $4,388,183, respectively, for the Bond Portfolio, and purchases of US Government obligations were $1,015,977 for the Income Portfolio. Identified cost of investments sold is used for both financial statement and federal income tax purposes. At December 31, 1997, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. The tax basis gross unrealized appreciation and depreciation of portfolio securities, including the effects of foreign currency transactions, were as follows: Unrealized Unrealized Portfolio Appreciation Depreciation --------- ------------ ----------- Bond $ 222,049 $ 92 Capital 4,535,682 551,424 Common Stock 9,125,971 872,712 Communications and Information 4,564,965 10,291,044 Frontier 6,220,677 3,180,823 Global Growth Opportunities 588,894 304,698 Global Smaller Companies 3,207,540 2,801,298 Global Technology 375,070 431,772 International 1,316,976 492,870 High-Yield Bond 1,164,189 328,237 Income 1,135,757 302,104 4. Management Fee, Administrative Services, and Other Transactions -- The Manager manages the affairs of the Fund and provides orarrangesforthe necessary personnel and facilities. SeligmanHendersonCo.(the"Subadviser"),an entity owned50% each bytheManager and Henderson plc, supervises and directs the Fund's foreign investments. Compensation of all officers of the Fund, all directors of the Fund who are employees or consultants of the Manager, and all personnel of the Fund and the Manager is paid by the ManagerorbyHenderson plc. The Manager's fee is calculated daily and payable monthly, equal to 0.40%, on an annual basis, of Bond, Capital, Cash Management, Common Stock, and Income Portfolios' daily net assets; equal to 0.75%, on an annual basis, of Communications and Information and Frontier Portfolios' daily net assets; and equal to 0.50%, on an annual basis, of High-Yield Bond Portfolio's daily net assets. The Manager's fee from Global Growth Opportunities, Global Smaller Companies, Global Technology and International Portfolios is calculated daily and payable monthly, equal to an annual rate of 1.00% of the daily net assets of each Portfolio, of which 0.90% is paid to the Subadviser. The Manager has agreed to reimburse expenses, other than the management fee, which exceed 0.20% per annum of the average daily net assets of each of the Portfolios (except theCash Management, Global Growth Opportunities, Global Smaller Companies, Global Technology and International Portfolios). The Manager, at its discretion, has elected to waive all of its fee for, and reimburse all of the expenses of, the Cash Management Portfolio until such time as the Manager determines. The Manager and Subadviser have agreed to reimburse expenses, other than the management fee, which exceed 0.40% per annum of the average daily net assets of theGlobal Growth Opportunities, Global Smaller Companies, Global Technology and International Portfolios. For the year ended December 31, 1997, the Manager reimbursed expenses and/or waived fees of $13,068, $2,708, $74,723, $15,066, and $4,416 for the Bond, Capital, Cash Management, High-Yield Bond, and Income Portfolios, respectively. For the same period, the Manager waived all its fee and the Subadviser waived a portion of its fee for the Global Growth Opportunities Portfolio, the Global Smaller Companies Portfolio, the Global Technology Portfolio, and the International Portfolio, totalling $27,093, $31,463, $18,553, and $59,491, respectively. Seligman Financial Services, Inc. (the "Distributor"), agent for the distribution of the CLVA-2 Contracts and an affiliate of the Manager, received concessions of $301,510 from Canada Life Insurance Company of America and $20,947 from Canada Life Insurance Company of New York, after commissions paid to dealers. Certain officers and directors of the Fund are officers or directors of the Manager, the Distributor, and/or the Subadviser. P-59 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Notes to Financial Statements (continued) - ------------------------------------------------------------------------------ The Fund has a compensation arrangement under which directors who receive fees may elect to defer receiving such fees. Interest is accrued on the deferred balances. The cost of such fees and interest is included in directors' fees and expenses, and the accumulated balance thereof at December 31, 1997, is included in other liabilities. Deferred fees and the related accrued interest are not deductible for federal income tax purposes until such amounts are paid. 5. Loss Carryforward -- At December 31, 1997, the Bond Portfolio and the Cash Management Portfolio had net capital loss carryforwards for federal income tax purposes of $51,898 and $398, respectively, which are available for offset against future taxable net gains. These net capital loss carryforwards will expire in varying amounts through 2003. 6. Outstanding Forward Exchange Currency Contracts -- At December 31, 1997, the Fund had outstanding forward exchange currency contracts to purchase or sell foreign currencies as follows:
Unrealized Foreign In Exchange Settlement Appreciation Contract Currency for US $ Date US $ Value (Depreciation) - -------- ---------- ----------- ---------- ---------- ------------- GLOBAL GROWTH OPPORTUNITIES PORTFOLIO Purchases: Italian lira 27,903,636 15,860 1/5/98 15,773 $ (87) Dutch guilders 98,485 48,811 1/5/98 48,599 (212) Swedish kronor 186,590 23,611 1/5/98 23,517 (94) ------- (393) ------- Sales: Japanese yen 26,318,670 210,000 2/20/98 202,732 7,268 ------- $ 6,875 ======= GLOBAL SMALLER COMPANIES PORTFOLIO Sales: Italian lira 22,231,840 12,637 1/5/98 12,567 $70 Japanese yen 100,909,225 815,000 2/20/98 777,301 37,699 ------- $37,769 ======= INTERNATIONAL PORTFOLIO Purchases: Singapore dollars 6,188 3,694 1/2/98 3,678 $ (16) ------- Sales: Japanese yen 68,469,695 553,000 2/20/98 527,420 25,580 ------- $25,564 =======
P-60 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ 7. Capital Stock Transactions -- At December 31, 1997, there were 20,000,000 shares of Capital Stock authorized for each of the Global Growth Opportunities and Global Technology Portfolios; 80,000,000 shares for the Bond and Capital Portfolios; and 100,000,000 shares for each of the Cash Management, Common Stock, Communications and Information, Frontier, Global Smaller Companies, International, High-Yield Bond, and Income Portfolios, all at a par value of $.001 per share. Transactions in shares of Capital Stock were as follows:
Bond Capital Cash Management Portfolio Portfolio Portfolio ------------------------ ---------------------- ----------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, ------------------------ ---------------------- ----------------------- 1997 1996 1997 1996 1997 1996 --------- --------- -------- -------- ---------- ---------- Sale of shares.................... 292,591 214,510 421,000 371,812 25,875,970 16,950,432 Shares issued in payment of dividends................... 35,242 27,071 1,659 2,189 512,275 483,722 Shares issued in payment of gain distributions.......... -- -- 74,699 53,253 -- -- --------- --------- -------- -------- ---------- ---------- Total............................. 327,833 241,581 497,358 427,254 26,388,245 17,434,154 --------- --------- -------- -------- ---------- ---------- Shares redeemed................... (128,619) (165,022) (264,028) (156,642) (27,507,851) (15,478,773) --------- --------- -------- -------- ---------- ---------- Increase (Decrease) in Shares...................... 199,214 76,559 233,330 270,612 (1,119,606) 1,955,381 ========= ========= ======== ======== ========== ==========
Communications Common Stock and Information Frontier Portfolio Portfolio Portfolio ------------------------ ---------------------- ------------------------ Year Ended Year Ended Year Ended December 31, December 31, December 31, ------------------------- ---------------------- ------------------------ 1997 1996 1997 1996 1997 1996 --------- ---------- --------- --------- --------- ---------- Sale of shares.................... 706,222 676,407 2,968,727 2,058,865 1,172,506 1,141,808 Shares issued in payment of dividends................... 51,724 41,705 -- -- -- -- Shares issued in payment of gain distributions.......... 436,215 286,354 1,783,179 -- 255,874 229,516 --------- ---------- --------- --------- --------- --------- Total............................. 1,194,161 1,004,466 4,751,906 2,058,865 1,428,380 1,371,324 --------- ---------- --------- --------- --------- --------- Shares redeemed................... (412,385) (537,472) (2,185,329) (777,428) (819,268) (177,011) --------- ---------- --------- --------- --------- --------- Increase in Shares................ 781,776 466,994 2,566,577 1,281,437 609,112 1,194,313 ========= ========== ========= ========= ========= =========
P-61 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Notes to Financial Statements (continued) - ------------------------------------------------------------------------------
Global Growth Global Smaller Global Opportunities Companies Technology Portfolio Portfolio Portfolio ------------------------ ---------------------- ------------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, ------------------------ ---------------------- ------------------------- 1997 1996* 1997 1996 1997 1996* --------- --------- -------- -------- --------- --------- Sale of shares...................... 409,426 173,750 447,087 877,250 329,216 150,969 Shares issued in payment of dividends..................... -- 186 2,062 1,708 347 -- Shares issued in payment of gain distributions............ 5,564 -- 37,365 90,260 48,881 1,023 --------- --------- -------- -------- --------- --------- Total............................... 414,990 173,936 486,514 969,218 378,444 151,992 --------- --------- -------- -------- --------- --------- Shares redeemed..................... (81,077) (13,596) (217,853) (72,141) (162,342) (19,875) --------- --------- -------- -------- --------- --------- Increase in Shares.................. 333,913 160,340 268,661 897,077 216,102 132,117 ========= ========= ======== ======== ========= =========
International High-Yield Bond Income Portfolio Portfolio Portfolio ------------------------- ----------------------- ------------------------- Year Ended Year Ended Year Ended December 31, December 31, December 31, ------------------------ ---------------------- ------------------------- 1997 1996 1997 1996 1997 1996 --------- --------- --------- -------- --------- --------- Sale of shares...................... 239,540 316,262 1,357,028 885,932 192,283 468,320 Shares issued in payment of dividends..................... 1,313 2,864 136,132 62,670 58,547 65,750 Shares issued in payment of gain distributions............ 22,955 9,983 16,336 6,382 68,771 18,850 --------- --------- --------- -------- --------- --------- Total............................... 263,808 329,109 1,509,496 954,984 319,601 552,920 --------- --------- --------- -------- --------- --------- Shares redeemed..................... (144,243) (108,146) (547,725) (242,875) (342,394) (443,660) --------- --------- --------- -------- --------- --------- Increase (Decrease) in Shares........................ 119,565 220,963 961,771 712,109 (22,793) 109,260 ========= ========= ========= ======== ========= ========= - ----------------- * For the period May 1, 1996, commencement of operations, to December 31, 1996.
8. Committed Line of Credit --Effective July 23, 1997, the Communications and Information Portfolio, Frontier Portfolio, Global Growth Opportunities Portfolio, Global Smaller Companies Portfolio, Global Technology Portfolio, International Portfolio, and High-Yield Bond Portfolio, collectively, entered into a $12 million committed line of credit facility with a group of banks. Borrowings pursuant to the credit facility will be subject to interest at a rate equal to the federal funds rate plus 0.50% per annum. The participating Portfolios incur a commitment fee of 0.10% per annum on the unused portion of the credit facility. The credit facility may be drawn upon only for temporary purposes and is subject to certain other customary restrictions. The credit facility commitment will expire one year from the date of the agreement but is renewable with the consent of the participating banks. To date, the participating Portfolios have not borrowed from the credit facility. P-62 Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ Financial Highlights - ------------------------------------------------------------------------------ The Fund's financial highlights are presented below. "Per share operating performance" data is designed to allow investors to trace the operating performance, on a per share basis, from a Portfolio's 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 share amount. "Total return based on net asset value" measures each Portfolio's performance assuming that investors purchased shares of a Portfolio at net asset value at the beginning of the period, invested dividends and capital gains paid at net asset value, and then sold their shares at the net asset value on the last day of the period. The total returns exclude the effect of all administration fees and asset based sales charges associated with variable annuity contracts. The total returns for periods of less than one year are not annualized. "Average commission rate paid" represents the average commission paid by the Portfolios to purchase or sell portfolio securities. It is determined by dividing the total commission dollars paid by the number of shares purchased and sold during the period for which commissions were paid. This rate is provided for all periods beginning January 1, 1996.
Bond Portfolio ------------------------------------------------------- Year Ended December 31, ------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993 ------- ------- ------- ------- ------- Net Asset Value, Beginning of Year....................... $9.890 $10.440 $9.270 $10.110 $10.660 ------- -------- ------- -------- ------- Net investment income.................................... 0.538 0.565 0.605 0.499 0.713 Net realized and unrealized gain (loss) on investments... 0.350 (0.552) 1.171 (0.841) 0.142 ------- -------- ------- -------- ------- Increase (Decrease) from Investment Operations........... 0.888 0.013 1.776 (0.342) 0.855 Dividends paid........................................... (0.538) (0.563) (0.606) (0.498) (0.711) Distributions from net realized gain..................... -- -- -- -- (0.694) ------- -------- ------- -------- ------- Net Increase (Decrease) in Net Asset Value............... 0.350 (0.550) 1.170 (0.840) (0.550) ------- -------- ------- -------- ------- Net Asset Value, End of Year............................. $10.240 $ 9.890 $10.440 $ 9.270 $10.110 ======= ======== ======= ======== ======= TOTAL RETURN BASED ON NET ASSET VALUE: 8.98% 0.09% 19.18% (3.39)% 7.98% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets........................... 0.60% 0.60% 0.60% 0.60% 0.74% Net investment income to average net assets.............. 6.22% 5.97% 6.22% 5.12% 5.41% Portfolio turnover....................................... 170.12% 199.74% 114.42% 237.23% 33.21% Net Assets, End of Year (000s omitted)................... $7,232 $5,015 $4,497 $3,606 $3,775 Without management fee waiver and expense reimbursement:+ Net investment income per share....................... $0.515 $0.545 $0.571 $0.430 $0.675 Ratios: Expenses to average net assets........................ 0.83% 0.79% 0.99% 1.31% 1.07% Net investment income to average net assets........... 5.99% 5.78% 5.83% 4.41% 5.08% - -------------------------- + The Manager, at its discretion, reimbursed expenses and/or waived management fees for certain periods presented. See Notes to Financial Statements.
--P-63-- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Financial Highlights (continued) - -------------------------------------------------------------------------------
Capital Portfolio ----------------------------------------------------- Year Ended December 31, ------------------------------------------------------ PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993 ------- ------- ------- ------- ------- Net Asset Value, Beginning of Year...................... $16.010 $14.910 $12.700 $14.950 $16.980 ------- ------- ------- ------- ------- Net investment income................................... 0.029 0.043 0.048 0.015 0.021 Net realized and unrealized gain (loss) on investments.. 3.350 2.121 3.385 (0.699) 1.928 ------- ------- ------- ------- ------- Increase (Decrease) from Investment Operations.......... 3.379 2.164 3.433 (0.684) 1.949 Dividends paid.......................................... (0.028) (0.042) (0.047) (0.018) (0.021) Distributions from net realized gain.................... (1.261) (1.022) (1.176) (1.548) (3.958) ------- ------- ------- ------- ------- Net Increase (Decrease) in Net Asset Value.............. 2.090 1.100 2.210 (2.250) (2.030) ------- ------- ------- ------- ------- Net Asset Value, End of Year............................ $18.100 $16.010 $14.910 $12.700 $14.950 ======= ======= ======= ======= ======= TOTAL RETURN BASED ON NET ASSET VALUE: 21.31% 14.51% 27.17% (4.59)% 11.65% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets.......................... 0.60% 0.59% 0.60% 0.60% 0.71% Net investment income to average net assets............. 0.16% 0.29% 0.32% 0.10% 0.09% Portfolio turnover...................................... 93.97% 88.78% 122.20% 67.39% 65.30% Average commission rate paid............................ $0.0567 $0.0557 Net Assets, End of Year (000s omitted).................. $20,400 $14,313 $9,294 $5,942 $5,886 Without management fee waiver and expense reimbursement:+ Net investment income (loss) per share............... $0.026 $0.035 $(0.036) $(0.003) Ratios: Expenses to average net assets....................... 0.62% 0.71% 0.96% 0.83% Net investment income (loss) to average net assets... 0.14% 0.21% (0.26)% (0.03)%
Cash Management Portfolio ----------------------------------------------------- Year Ended December 31, ------------------------------------------------------ PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993 ------ ------ ------ ------ ------ Net Asset Value, Beginning of Year...................... $1.000 $1.000 $1.000 $1.000 $1.000 Net investment income................................... 0.054 0.053 0.055 0.040 0.030 Dividends paid.......................................... (0.054) (0.053) (0.055) (0.040) (0.030) ------ ------ ------ ------ ------ Net Asset Value, End of Year............................ $1.000 $1.000 $1.000 $1.000 $1.000 ====== ====== ====== ====== ====== TOTAL RETURN BASED ON NET ASSET VALUE: 5.52% 5.43% 5.60% 4.03% 3.00% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets.......................... -- -- -- -- -- Net investment income to average net assets............. 5.39% 5.30% 5.48% 3.98% 2.96% Net Assets, End of Year (000s omitted).................. $8,635 $9,755 $7,800 $3,230 $3,102 Without management fee waiver and expense reimbursement:+ Net investment income per share...................... $0.046 $0.047 $0.046 $0.025 $ 0.019 Ratios: Expenses to average net assets....................... 0.79% 0.63% 0.87% 1.48% 1.07% Net investment income to average net assets.......... 4.60% 4.67% 4.61% 2.50% 1.89% - -------------------------- + The Manager, at its discretion, reimbursed expenses and/or waived management fees for certain periods presented. See Notes to Financial Statements.
--P-64-- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------
Common Stock Portfolio ------------------------------------------------------- Year Ended December 31, -------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993 ------- ------- ------- ------- ------- Net Asset Value, Beginning of Year....................... $15.920 $15.440 $13.780 $14.980 $15.600 ------- ------- ------- ------- ------- Net investment income.................................... 0.328 0.334 0.349 0.365 0.392 Net realized and unrealized gain (loss) on investments... 3.013 2.789 3.400 (0.356) 1.479 ------- ------- ------- ------- ------- Increase from Investment Operations...................... 3.341 3.123 3.749 0.009 1.871 Dividends paid........................................... (0.316) (0.336) (0.345) (0.385) (0.394) Distributions from net realized gain..................... (2.665) (2.307) (1.744) (0.824) (2.097) ------- ------- ------- ------- ------- Net Increase (Decrease) in Net Asset Value............... 0.360 0.480 1.660 (1.200) (0.620) ------- ------- ------- ------- ------- Net Asset Value, End of Year............................. $16.280 $15.920 $15.440 $13.780 $14.980 ======= ======= ======= ======= ======= TOTAL RETURN BASED ON NET ASSET VALUE: 21.31% 20.08% 27.28% 0.04% 11.94% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets........................... 0.53% 0.53% 0.54% 0.60% 0.55% Net investment income to average net assets.............. 1.92% 1.99% 2.42% 2.45% 2.10% Portfolio turnover....................................... 80.13% 50.33% 55.48% 15.29% 10.70% Average commission rate paid............................. $0.0594 $0.0561 Net Assets, End of Year (000s omitted) .................. $50,737 $37,168 $28,836 $20,168 $21,861 Without management fee waiver and expense reimbursement:++ Net investment income per share....................... $0.361 Ratios: Expenses to average net assets........................ 0.62% Net investment income to average net assets........... 2.43%
Communications and Information Portfolio --------------------------------------------------------- 10/11/94* Year Ended December 31, to ---------------------------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 12/31/94 ------- ------- ------- --------- Net Asset Value, Beginning of Year....................... $14.690 $13.500 $10.440 $10.000 ------- ------- ------- ------- Net investment loss...................................... -- -- -- (0.016) Net realized and unrealized gain on investments.......... 3.049 1.190 4.015 0.456 ------ ------- ------- ------- Increase from Investment Operations...................... 3.049 1.190 4.015 0.440 Dividends paid........................................... -- -- -- -- Distributions from net realized gain..................... (4.649) -- (0.955) -- ------- ------- ------- ------- Net Increase (Decrease) in Net Asset Value............... (1.600) 1.190 3.060 0.440 ------- ------- ------- ------- Net Asset Value, End of Year............................. $13.090 $14.690 $13.500 $10.440 ======= ======= ======= ======= TOTAL RETURN BASED ON NET ASSET VALUE: 22.22% 8.81% 38.55% 4.40% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets........................... 0.87% 0.87% 0.95% 0.95%+ Net investment loss to average net assets................ (0.49)% (0.32)% (0.89)% (0.95)%+ Portfolio turnover....................................... 277.14% 167.20% 96.62% -- Average commission rate paid............................. $0.0511 $0.0530 Net Assets, End of Year (000s omitted)................... $87,633 $60,645 $38,442 $495 Without management fee waiver and expense reimbursement:++ Net investment loss per share......................... $(0.436) Ratios: Expenses to average net assets........................ 13.96%+ Net investment loss to average net assets............. (13.96)%+ - --------------------- * Commencement of investment operations. + Annualized. ++ The Manager, at its discretion, reimbursed expenses and/or waived management fees for certain periods presented. See Notes to Financial Statements.
--P-65 -- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Financial Highlights (continued) - -------------------------------------------------------------------------------
Global Growth Opportunities Frontier Portfolio Portfolio ---------------------------------------- ------------------ 10/11/94* Year 5/1/96** Year Ended December 31, to Ended to ---------------------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 12/31/94 12/31/97 12/31/96 ------- ------- ------- -------- -------- -------- Net Asset Value, Beginning of Year....................... $14.980 $13.560 $10.580 $10.000 $ 9.910 $10.000 ------- ------- ------- ------- ------- ------- Net investment income (loss)............................. -- 0.001 (0.001) (0.012) 0.006 0.008 Net realized and unrealized gain on investments.......... 2.386 3.220 3.512 0.592 1.799 0.018 Net realized and unrealized loss on foreign currency transactions......................... -- -- -- -- (0.561) (0.104) ------- ------- ------- ------- ------- ------- Increase (Decrease) from Investment Operations........... 2.386 3.221 3.511 0.580 1.244 (0.078) Dividends paid........................................... -- -- -- -- -- (0.012) Distributions from net realized gain..................... (1.586) (1.801) (0.531) -- (0.124) -- ------- ------- ------- -------- ------- ------- Net Increase (Decrease) in Net Asset Value............... 0.800 1.420 2.980 0.580 1.120 (0.090) ------- ------- ------- ------- ------- ------- Net Asset Value, End of Year............................. $15.780 $14.980 $13.560 $10.580 $11.030 $ 9.910 ======= ======= ======= ======= ======= ======== TOTAL RETURN BASED ON NET ASSET VALUE: .................. 16.33% 23.93% 33.28% 5.80% 12.57% (0.78)% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets........................... 0.89% 0.92% 0.95% 0.95%+ 1.40% 1.40%+ Net investment income (loss) to average net assets....... (0.49)% (0.37)% (0.55)% (0.70)%+ 0.01% 0.37%+ Portfolio turnover....................................... 101.68% 119.74% 106.48% -- 77.85% 12.99% Average commission rate paid............................. $0.0539 $0.0532 $0.0289 $0.0522 Net Assets, End of Year (000s omitted)................... $42,973 $31,672 $12,476 $169 $5,449 $1,590 Without management fee waiver and expense reimbursement:++ Net investment loss per share......................... $(0.019) $(1.319) $(0.072) $(0.255) Ratios: Expenses to average net assets........................ 1.37% 40.47%+ 2.11% 6.04%+ Net investment loss to average net assets............. (0.97)% (40.22)%+ (0.70)% (4.27)%+ - ----------------------- * Commencement of investment operations. ** Commencement of operations. + Annualized. ++ The Manager and/or Subadviser, at their discretion, reimbursed expenses and/or waived management fees for certain periods presented. See Notes to Financial Statements.
--P-66-- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------
Global Global Smaller Technology Companies Portfolio Portfolio --------------------------------- ------------------- 10/11/94* Year 5/1/96** Year Ended December 31, to Ended to --------------------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 12/31/94 12/31/97 12/31/96 ------- ------- ------- -------- -------- -------- Net Asset Value, Beginning of Year....................... $12.870 $11.670 $10.310 $10.000 $10.320 $10.000 ------- ------- ------- ------- ------- ------- Net investment income (loss)............................. 0.016 0.022 0.051 0.058 0.012 (0.004) Net realized and unrealized gain on investments.......... 1.166 2.305 2.037 0.266 2.151 0.305 Net realized and unrealized gain (loss) on foreign currency transactions......................... (0.747) (0.158) (0.301) 0.029 (0.194) 0.099 ------- ------- ------- ------- ------- ------- Increase from Investment Operations...................... 0.435 2.169 1.787 0.353 1.969 0.400 Dividends paid........................................... (0.017) (0.018) (0.052) (0.043) (0.012) -- Distributions from net realized gain..................... (0.308) (0.951) (0.375) -- (1.687) (0.080) ------- ------- ------- ------- ------- ------- Net Increase in Net Asset Value.......................... 0.110 1.200 1.360 0.310 0.270 0.320 ------- ------- ------- ------- ------- ------- Net Asset Value, End of Year ............................ $12.980 $12.870 $11.670 $10.310 $10.590 $10.320 ======= ======= ======= ======= ======= ======= TOTAL RETURN BASED ON NET ASSET VALUE: 3.43% 18.66% 17.38% 3.53% 19.53% 4.01% RATIOS/SUPPLEMENTAL DATA Expenses to average net assets........................... 1.40% 1.40% 1.39% 1.20%+ 1.40% 1.40%+ Net investment income to average net assets.............. 0.24% 0.23% 0.64% 3.14%+ 0.12% 0.60%+ Portfolio turnover....................................... 64.81% 62.31% 55.65% -- 167.36% 45.04% Average commission rate paid............................. $0.0183 $0.0219 $0.0228 $0.0160 Net Assets, End of Year (000s omitted)................... $20,505 $16,876 $4,837 $132 $3,686 $1,364 Without management fee waiver and expense reimbursement:++ Net investment income (loss) per share ............... $0.006 $(0.044) $(0.051) $(1.225) $(0.070) $(0.202) Ratios: Expenses to average net assets........................ 1.56% 1.90% 3.84% 37.25%+ 2.10% 4.71%+ Net investment income (loss) to average net assets.... 0.08% (0.27)% (1.81)% (32.91)%+ (0.58)% (2.71)%+ - ------------------------ * Commencement of investment operations. ** Commencement of operations. + Annualized. ++ The Manager and Subadviser, at their discretion, reimbursed expenses and/or waived management fees for certain periods presented. See Notes to Financial Statements.
--P-67-- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Financial Highlights (continued) - -------------------------------------------------------------------------------
International High-Yield Bond Portfolio Portfolio ---------------------------------------------- ---------------------------- 5/3/93* Year Ended 5/1/95* Year Ended December 31, to December 31, to ----------------------------------- ---------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 12/31/93 1997 1996 12/31/95 ------- ------- ------- ------- -------- ------- ------- -------- Net Asset Value, Beginning of Year.......... $12.960 $12.390 $11.340 $11.370 $10.000 $11.190 $10.500 $10.000 ------- ------- ------- ------- ------- ------- ------- ------- Net investment income....................... 0.026 0.074 0.154 0.131 0.021 0.908 0.768 0.218 Net realized and unrealized gain (loss) on investments........................... 2.110 1.124 0.896 (0.306) 1.518 0.780 0.766 0.519 Net realized and unrealized gain (loss) on foreign currency transactions ........... (1.057) (0.323) 0.236 0.325 (0.099) -- -- -- ------- ------- ------- ------ ------- ------- ------- ------- Increase from Investment Operations......... 1.079 0.875 1.286 0.150 1.440 1.688 1.534 0.737 Dividends paid.............................. (0.027) (0.068) (0.151) (0.064) (0.053) (0.900) (0.766) (0.219) Distributions from net realized gain........ (0.472) (0.237) (0.085) (0.116) (0.017) (0.108) (0.078) (0.018) ------- ------- ------- ------ ------- ------- ------- ------- Net Increase (Decrease) in Net Asset Value.. 0.580 0.570 1.050 (0.030) 1.370 0.680 0.690 0.500 ------- ------- ------- ------ ------- ------- ------- ------- Net Asset Value, End of Year................ $13.540 $12.960 $12.390 $11.340 $11.370 $11.870 $11.190 $10.500 ======= ======= ======= ======= ======= ======= ======= ======= TOTAL RETURN BASED ON NET ASSET VALUE: 8.35% 7.08% 11.34% 1.32% 14.40% 15.09% 14.62% 7.37% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets.............. 1.40% 1.40% 1.35% 1.20% 1.20%+ 0.70% 0.70% 0.70%+ Net investment income to average net assets. 0.43% 0.70% 1.01% 1.17% 1.30%+ 9.61% 9.77% 7.46%+ Portfolio turnover.......................... 89.43% 48.53% 41.40% 47.34% 2.82% 74.54% 117.01% 67.55% Average commission rate paid................ $0.0214 $0.0191 Net Assets, End of Year (000s omitted)...... $9,182 $7,242 $4,183 $1,776 $648 $23,268 $11,176 $3,009 Without management fee waiver and expense reimbursement:++ Net investment income (loss) per share... $(0.069) $(0.042) $0.001 $(0.419) $(1.004) $0.897 $0.747 $0.117 Ratios: Expenses to average net assets........... 2.07% 2.30% 3.40% 6.12% 17.94%+ 0.79% 0.88% 4.38%+ Net investment income (loss) to average net assets............................. (0.24)% (0.20)% (1.04)% (3.75)% (15.44)%+ 9.52% 9.59% 3.78%+ - ----------------------- * Commencement of operations. + Annualized. ++ The Manager and/or Subadviser, at their discretion, reimbursed expenses and/or waived management fees for certain periods presented. See Notes to Financial Statements.
--P-68-- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------
Income Portfolio ------------------------------------------------------- Year Ended December 31, ------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993 ------- ------- ------- ------- -------- Net Asset Value, Beginning of Year....................... $10.520 $10.560 $9.970 $11.380 $11.390 ------- ------- ------- ------- ------- Net investment income.................................... 0.556 0.579 0.604 0.689 0.828 Net realized and unrealized gain (loss) on investments... 0.907 0.126 1.187 (1.369) 0.576 ------- ------- ------- ------- ------- Increase (Decrease) from Investment Operations........... 1.463 0.705 1.791 (0.680) 1.404 Dividends paid........................................... (0.544) (0.579) (0.604) (0.730) (0.828) Distributions from net realized gain..................... (0.639) (0.166) (0.597) -- (0.586) ------- ------- ------- ------- ------- Net Increase (Decrease) in Net Asset Value............... 0.280 (0.040) 0.590 (1.410) (0.010) ------- ------- ------- ------- ------- Net Asset Value, End of Year............................. $10.800 $10.520 $10.560 $9.970 $11.380 ======= ======= ======= ======= ======= TOTAL RETURN BASED ON NET ASSET VALUE: 14.02% 6.66% 17.98% (5.96)% 12.37% RATIOS/SUPPLEMENTAL DATA: Expenses to average net assets........................... 0.60% 0.59% 0.60% 0.60% 0.64% Net investment income to average net assets.............. 4.71% 5.37% 5.55% 6.34% 6.40% Portfolio turnover....................................... 96.99% 19.59% 51.22% 29.76% 38.38% Average commission rate paid............................. $0.0544 $0.0600 Net Assets, End of Year (000s omitted)................... $13,835 $13,717 $12,619 $10,050 $11,220 Without management fee waiver and expense reimbursement:+ Net investment income per share....................... $0.553 $0.602 $0.670 $0.826 Ratios: Expenses to average net assets........................ 0.63% 0.62% 0.77% 0.65% Net investment income to average net assets........... 4.68% 5.53% 6.17% 6.39% - --------------------------- +The Manager, at its discretion, waived management fees for certain periods presented. See Notes to Financial Statements.
--P-69-- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Report of Ernst & Young LLP, Independent Auditors - ------------------------------------------------------------------------------- The Directors and Shareholders, Seligman Portfolios, Inc.: We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Seligman Portfolios, Inc. (comprising, respectively, the Seligman Bond Portfolio, Seligman Capital Portfolio, Seligman Cash Management Portfolio, Seligman Common Stock Portfolio, Seligman Communications and Information Portfolio, Seligman Frontier Portfolio, Seligman Henderson Global Growth Opportunities Portfolio, Seligman Henderson Global Smaller Companies Portfolio, Seligman Henderson Global Technology Portfolio, Seligman Henderson International Portfolio, Seligman High-Yield Bond Portfolio, and Seligman Income Portfolio, collectively referred to as the "Fund") as of December 31, 1997, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund'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 and financial highlights. Our procedures included confirmation of securities owned as of December 31, 1997, by correspondence with the custodians and brokers. 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 each of the respective portfolios constituting Seligman Portfolios, Inc. at December 31, 1997, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated periods, in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP ---------------------- New York, New York February 6, 1998 -- P-70 -- Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Board of Directors - ------------------------------------------------------------------------------- John R. Galvin 2 Dean, Fletcher School of Law and Diplomacy at Tufts University Director, Raytheon Corporation Director, USLIFE Corporation Alice S. Ilchman 3 President, Sarah Lawrence College Trustee, Committee for Economic Development Chairman, The Rockefeller Foundation Frank A. McPherson 2 Director, Kimberly-Clark Corporation Director, Baptist Medical Center John E. Merow Retired Chairman and Senior Partner, Sullivan & Cromwell, Law Firm Director, Commonwealth Industries, Inc. Betsy S. Michel 2 Trustee, Geraldine R. Dodge Foundation Chairman of the Board of Trustees, St. George's School 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 Retired Partner, Pitney, Hardin, Kipp & Szuch, Law Firm Director, Public Service Enterprise Group James Q. Riordan 3 Director, The Brooklyn Union Gas Company Trustee, Committee for Economic Development Director, Dow Jones & Co., Inc. Director, Public Broadcasting Service Richard R. Schmaltz 1 Managing Director, J. & W. Seligman & Co. Incorporated Trustee Emeritus, Colby College Robert L. Shafer 3 Retired Vice President, Pfizer Inc. Director, USLIFE Corporation James N. Whitson 2 Executive Vice President and Director, 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 Emeritus Fred E. Brown Director and Consultant, J. & W. Seligman & Co. Incorporated - ---------------------------------- Member: 1 Executive Committee 2 Audit Committee 3 Director Nominating Committee - P-71 - Seligman Portfolios, Inc. - ------------------------------------------------------------------------------- Executive Officers - ------------------------------------------------------------------------------- William C. Morris Chairman BrianT.Zino President Brian Ashford-Russell Vice President Daniel J. Charleston Vice President Iain C. Clark Vice President Leonard J. Lovito Vice President Nitin Mehta Vice President Arsen Mrakovcic Vice President Charles C. Smith, Jr. Vice President Lawrence P. Vogel Vice President Paul H. Wick Vice President Thomas G. Rose Treasurer Frank J. Nasta Secretary - ------------------------------------------------------------------------------ Manager J. & W. Seligman & Co. Incorporated 100 Park Avenue New York, New York 10017 Subadviser Seligman Henderson Co. 100 Park Avenue New York, New York 10017 General Distributor Seligman Financial Services, Inc. 100 Park Avenue New York, New York 10017 Custodians Investors Fiduciary Trust Company Morgan Stanley Trust Company General Counsel Sullivan & Cromwell Independent Auditors Ernst & Young LLP - P-72 - -----END PRIVACY-ENHANCED MESSAGE-----