-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Vsd6+qOoZP2BdorKKHav6Z0lk+9mtQM/ckauMqeVTkzx1wU13mBgtobqxTlgTvBY r+BvymeOf5ZiiVx8zoD7Cw== 0000817841-95-000007.txt : 19950615 0000817841-95-000007.hdr.sgml : 19950615 ACCESSION NUMBER: 0000817841-95-000007 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950313 SROS: NASD 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: 1940 Act SEC FILE NUMBER: 811-05221 FILM NUMBER: 95520373 BUSINESS ADDRESS: STREET 1: 130 LIBERTY ST CITY: NEW YORK STATE: NY ZIP: 10006 BUSINESS PHONE: 2124880200 MAIL ADDRESS: STREET 1: 103 LIBERTY STREET CITY: NEW YORK STATE: NY ZIP: 10006 FORMER COMPANY: FORMER CONFORMED NAME: SELIGMAN MUTUAL BENEFIT PORTFOLIOS INC DATE OF NAME CHANGE: 19920703 N-30D 1 12/31/94 ANNUAL REPORT - ------------------------------------------------------------------------------- A N N U A L R E P O R T - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TRILLIUM [Logo] A VARIABLE ANNUITY December 31, 1994 - ------------------------------------------------------------------------------- Seligman Portfolios, Inc. the underlying investment vehicle for ===================================== TRILLIUM A VARIABLE ANNUITY ------------------------------------- ------------------------------------- ------------------------------------- February 10, 1995 Dear Contract Owner: J. & W. Seligman & Co. Incorporated, as Manager of Seligman Portfolios, Inc. (the "Fund"), the underlying investment vehicle for your Trillium Variable annuity, and Canada Life Insurance Company of America, as issuer of The Canada Life of America Variable Annuity Account 2 (the "Variable Account"), are pleased to provide the enclosed audited financial statements and accompanying information for the year ended December 31, 1994, which begin on page 2 for the Variable Account, and on page 9 for the Fund. The performance of the six sub-accounts of the Variable Account, which invests in and is based upon the performance of the Fund (adjusted for the current fees and charges, excluding the CDSL, associated with the Variable Account) was as follows for the six- and 12-month periods ended December 31, 1994: the Capital Sub-Account's total returns were 6.39% and -6.76%, respectively; the Common Stock Sub-Account's total returns were 3.37% and - -1.10%, respectively; the Global Sub-Account's total returns were 0.90% and - -0.64%, respectively; the Income Sub-Account's total returns were 0.27% and - -7.55%, respectively; and the Fixed Income Securities Sub-Account's total returns were -0.17% and -4.85%, respectively. The six- and 12-month total returns for the Cash Management Sub-Account were 1.53% and 2.28%, respectively. The Variable Account commenced operations on June 21, 1993. The Fund was first created in June 1988. The performance of the three new sub-accounts that commenced operations on October 11, 1994, was as follows for the since-inception through December 31,1994, period: the Communications and Information Sub-Account's total return was 4.01%; the Frontier Sub-Account's total return was 5.40%; and the Global Smaller Companies, formerly Global Emerging Companies, Sub-Account's total return was 3.19%. Looking back on 1994, the one generalization that can be made with confidence is that it was a turbulent and trying year for equity and bond investors alike. The Federal Reserve Board exhibited an aggressive stance against inflation, putting through six short-term interest rate increases by the end of the year. This caused an upheaval in the bond market, with yields increasing and bond prices spiraling lower--an event in the financial markets unmatched in magnitude since 1973-74. The equity market remained hostage to the bond market and demonstrated lackluster performance: The Standard & Poor's 500 Composite Stock Price Index had a modest gain of 1.32% for the year. The U.S. economy continued to grow at a modest yet controlled pace, accompanied by corporate news of solid growth and strong earnings. This economic news, although positive, caused the underlying question to remain: Will the economy overheat, opening the door to increased inflation? We don't believe so. We believe an economic slowdown is close at hand. In March of 1995, the current growth cycle will mark its fourth year. The consumer has both increased debt as a percentage of income and drawn down savings--suggesting nearer-term caution after a stronger-than-expected pattern of spending in 1994. We also believe that inflation will remain under control in light of intense global competition, low unit labor costs, and an aging population that should favor saving over spending. Job creation remains robust despite gains in productivity, and U.S. competitiveness in world markets is likely to be enhanced under G.A.T.T.--General Agreement on Tariffs and Trade. Respectfully, /s/ D. Allen Loney /s/ William C. Morris D. Allen Loney William C. Morris President Chairman Canada Life Insurance Company of America J.&W. Seligman & Co. Incorporated -- 1 -- Canada Life of America Variable Annuity Account 2
- ----------------------------------------------------------------------------------------------------------------------------------- Statement of Net Assets December 31, 1994 - ----------------------------------------------------------------------------------------------------------------------------------- Cash Common Communications Capital Management Stock and Information Sub-Account Sub-Account Sub-Account Sub-Account ----------- ----------- ----------- ----------- Net Assets: Investment in Seligman Portfolios, Inc., at market (see Note 3 for cost values) ......................... $1,159,748 $537,245 $2,359,352 $494,664 Due (to) from Canada Life Insurance Company of America (Note 6) ..................................... (19,222) 5,398 5,191 (204) Receivable (payable) for investments sold (purchased) ... 111 (511) (92) -- ---------- -------- ---------- -------- Net assets .............................................. $1,140,637 $542,132 $2,364,451 $494,460 ========== ======== ========== ======== Net assets attributable to: Policyholders' liability reserve ........................ $1,140,637 $542,132 $2,364,451 $494,460 ---------- -------- ---------- -------- Net assets .............................................. $1,140,637 $542,132 $2,364,451 $494,460 ========== ======== ========== ======== Number of units outstanding ............................. 62,358 434,226 127,570 47,541 ========== ======== ========== ======== Net asset value per unit ................................ $ 18.2918 $1.2485 $18.5345 $10.4007 ========== ======== ========== ========
Statement of Net Assets (continued)
Fixed Global Income Smaller Securities Frontier Global Companies Income Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account ----------- ----------- ----------- ----------- ----------- Net Assets: Investment in Seligman Portfolios, Inc., at market (see Note 3 for cost values) ......................... $850,588 $122,411 $1,705,592 $131,532 $1,940,063 Due (to) from Canada Life Insurance Company of America (Note 6) ..................................... 388 (53) (10,422) (64) 19,030 Receivable (payable) for investments sold (purchased) ... 178 -- (779) -- 356 -------- -------- ---------- -------- ---------- Net assets .............................................. $851,154 $122,358 $1,694,391 $131,468 $1,959,449 ======== ======== ========== ======== ========== Net assets attributable to: Policyholders' liability reserve ........................ $851,154 $122,358 $1,694,391 $131,468 $1,959,449 -------- -------- ---------- -------- ---------- Net assets .............................................. $851,154 $122,358 $1,694,391 $131,468 $1,959,449 ======== ======== ========== ======== ========== Number of units outstanding ............................. 64,614 11,609 150,440 12,740 124,878 ======== ======== ========== ======== ========== Net asset value per unit ................................ $13.1729 $10.5399 $11.2629 $10.3193 $15.6909 ======== ======== ========== ======== ==========
Statement of Net Assets (continued) Combined ------------ Net Assets: Investment in Seligman Portfolios, Inc., at market (see Note 3 for cost values) ......................... $9,301,195 Due (to) from Canada Life Insurance Company of America (Note 6) ..................................... 42 Receivable (payable) for investments sold (purchased) ... (737) ---------- Net assets .............................................. $9,300,500 ========== Net assets attributable to: Policyholders' liability reserve ........................ $9,300,500 ---------- Net assets .............................................. $9,300,500 ========== Number of units outstanding ............................. Net asset value per unit ................................ - ---------- See accompanying notes.
- ------------------------------------------------------------------------------- Statement of Operations For the year ended December 31, 1994 - ------------------------------------------------------------------------------- Cash Common Communications Capital Management Stock and Information Sub-Account Sub-Account Sub-Account Sub-Account* ----------- ----------- ----------- ------------ Net investment income: Dividend and capital gain distributions ................. $124,301 $15,929 $187,438 $ -- Less mortality and expense risk charges (Note 6) ........ 9,411 5,752 18,228 875 -------- ------- -------- ------- Net investment income ................................... 114,890 10,177 169,210 (875) -------- ------- -------- ------- Net realized and unrealized gain (loss) on investments: Net realized gain (loss) on investments ................. (12,916) -- (1,721) 15 Net unrealized appreciation (depreciation) on investments ....................................... (124,248) -- (179,355) 18,098 -------- ------- -------- ------- Net realized and unrealized gain (loss) on investments ....................................... (137,164) -- (181,076) 18,113 -------- ------- -------- ------- Net increase (decrease) in net assets resulting from operations ..................... $(22,274) $10,177 $(11,866) $17,238 ======== ======= ======== =======
Statement of Operations (continued)
Fixed Global Income Smaller Securities Frontier Global Companies Income Sub-Account Sub-Account* Sub-Account Sub-Account* Sub-Account ----------- ------------ ----------- ------------ ----------- Net investment income: Dividend and capital gain distributions ................. $ 41,029 $ -- $26,068 $ 537 $132,305 Less mortality and expense risk charges (Note 6) ........ 5,588 216 16,791 258 21,607 -------- ------- ------- ------ -------- Net investment income ................................... 35,441 (216) 9,277 279 110,698 -------- ------- ------- ------ -------- Net realized and unrealized gain (loss) on investments: Net realized gain (loss) on investments ................. (10,205) 7 6,044 2 (15,131) Net unrealized appreciation (depreciation) on investments ....................................... (39,410) 6,405 (21,540) 3,794 (163,064) -------- ------- ------- ------ -------- Net realized and unrealized gain (loss) on investments ....................................... (49,615) 6,412 (15,496) 3,796 (178,195) -------- ------- ------- ------ -------- Net increase (decrease) in net assets resulting from operations ..................... $(14,174) $ 6,196 $(6,219) $4,075 $(67,497) ======== ======= ======= ====== ========
Statement of Operations (continued) Combined ---------- Net investment income: Dividend and capital gain distributions ................. $527,607 Less mortality and expense risk charges (Note 6) ....... 78,726 -------- Net investment income ................................... 448,881 -------- Net realized and unrealized gain (loss) on investments: Net realized gain (loss) on investments ................. (33,905) Net unrealized appreciation (depreciation) on investments ....................................... (499,320) -------- Net realized and unrealized gain (loss) on investments ....................................... (533,225) -------- Net increase (decrease) in net assets resulting from operations ..................... $(84,344) ======== - ---------- * For the period October 11, 1994 (commencement of operations) to December 31, 1994 See accompanying notes. --2-- & --3--
Canada Life of America Variable Annuity Account 2 - ------------------------------------------------------------------------------------------------------------------------------------ Statement of Changes in Net Assets - ------------------------------------------------------------------------------------------------------------------------------------ Cash Capital Management Sub- Sub- Account Account ---------------------- ---------------------- Year 6/21/93* Year 6/21/93* Ended to Ended to 12/31/94 12/31/93 12/31/94 12/31/93 -------- -------- -------- -------- Operations: Net investment income (loss) ................. $ 114,890 $18,768 $ 10,177 $ 256 Net realized gain (loss) on investments ...... (12,916) (33) -- -- Unrealized appreciation (depreciation) on investments ............. (124,248) (15,155) -- -- ---------- ------- -------- ------- Net increase (decrease) in net assets resulting from operations ................. (22,274) 3,580 10,177 256 ---------- ------- -------- ------- Capital transactions: Net increase from unit transactions (Note 5) ..................... 1,071,495 87,836 463,427 68,272 ---------- ------- -------- ------- Net increase in net assets arising from capital transactions ................. 1,071,495 87,836 463,427 68,272 ---------- ------- -------- ------- Total increase in net assets ................. 1,049,221 91,416 473,604 68,528 Net assets, beginning of period .............. 91,416 -- 68,528 -- ---------- ------- -------- ------- Net assets, end of period .................... $1,140,637 $91,416 $542,132 $68,528 ========== ======= ======== =======
Statement of Changes in Net Assets (continued) Common Communications Fixed Income Stock and Information Securities Sub- Sub- Sub- Account Account Account --------------------- -------- --------------------- Year 6/21/93* 10/11/94* Year 6/21/93* Ended to to Ended to 12/31/94 12/31/93 12/31/94 12/31/94 12/31/93 -------- -------- -------- -------- -------- Operations: Net investment income (loss) ................. $ 169,210 $ 91,784 $ (875) $ 35,441 $ 25,233 Net realized gain (loss) on investments ...... (1,721) (141) 15 (10,205) (131) Unrealized appreciation (depreciation) on investments ............. (179,355) (75,185) 18,098 (39,410) (25,591) ---------- -------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations ................. (11,866) 16,458 17,238 (14,174) (489) ---------- -------- -------- -------- -------- Capital transactions: Net increase from unit transactions (Note 5) ..................... 1,716,567 643,292 477,222 656,499 209,318 ---------- -------- -------- -------- -------- Net increase in net assets arising from capital transactions ................. 1,716,567 643,292 477,222 656,499 209,318 ---------- -------- -------- -------- -------- Total increase in net assets ................. 1,704,701 659,750 494,460 642,325 208,829 Net assets, beginning of period .............. 659,750 -- -- 208,829 -- ---------- -------- -------- -------- -------- Net assets, end of period .................... $2,364,451 $659,750 $494,460 $851,154 $208,829 ========== ======== ======== ======== ========
Statement of Changes in Net Assets (continued) Frontier Sub- Account -------- 10/11/94* to 12/31/94 -------- Operations: Net investment income (loss) ................. $ (216) Net realized gain (loss) on investments ...... 7 Unrealized appreciation (depreciation) on investments ............. 6,405 -------- Net increase (decrease) in net assets resulting from operations ................. 6,196 -------- Capital transactions: Net increase from unit transactions (Note 5) ..................... 116,162 -------- Net increase in net assets arising from capital transactions ................. 116,162 -------- Total increase in net assets ................. 122,358 Net assets, beginning of period -- ............................................. -------- Net assets, end of period .................... $122,358 ========
Statement of Changes in Net Assets (continued) Global Smaller Global Companies Sub- Sub- Account Account --------------------- -------- Year 6/21/93* 10/11/94* Ended to to 12/31/94 12/31/93 12/31/94 -------- -------- -------- Operations: Net investment income ........................ $ 9,277 $ 1,063 $ 279 Net realized gain (loss) on investments ...... 6,044 79 2 Unrealized appreciation (depreciation) on investments ............. (21,540) 24,587 3,794 ---------- -------- -------- Net increase (decrease) in net assets resulting from operations ................ (6,219) 25,729 4,075 ---------- -------- -------- Capital transactions: Net increase from unit transactions (Note 5) ..................... 1,167,854 507,027 127,393 ---------- -------- -------- Net increase in net assets arising from capital transactions ................. 1,167,854 507,027 127,393 ---------- -------- -------- Total increase in net assets ................. 1,161,635 532,756 131,468 Net assets, beginning of period .............. 532,756 -- -- ---------- -------- -------- Net assets, end of period .................... $1,694,391 $532,756 $131,468 ========== ======== ========
Statement of Changes in Net Assets (continued) Income Sub- Account Combined --------------------- --------------------- Year 6/21/93* Year 6/21/93* Ended to Ended to 12/31/94 12/31/93 12/31/94 12/31/93 -------- -------- -------- -------- Operations: Net investment income ........................ $ 110,698 $ 49,925 $ 448,881 $ 187,029 Net realized gain (loss) on investments ...... (15,131) (297) (33,905) (523) Unrealized appreciation (depreciation) on investments ............. (163,064) (44,870) (499,320) (136,214) ---------- -------- ---------- ---------- Net increase (decrease) in net assets resulting from operations ................ (67,497) 4,758 (84,344) 50,292 ---------- -------- ---------- ---------- Capital transactions: Net increase from unit transactions (Note 5) ..................... 1,560,635 461,553 7,357,254 1,977,298 ---------- -------- ---------- ---------- Net increase in net assets arising from capital transactions ................. 1,560,635 461,553 7,357,254 1,977,298 ---------- -------- ---------- ---------- Total increase in net assets ................. 1,493,138 466,311 7,272,910 2,027,590 Net assets, beginning of period .............. 466,311 -- 2,027,590 -- ---------- -------- ---------- ---------- Net assets, end of period .................... $1,959,449 $466,311 $9,300,500 $2,027,590 ========== ======== ========== ==========
--4-- & --5-- Canada Life of America Variable Annuity Account 2 - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- 1. Organization Canada Life of America Variable Annuity Account 2 ("Variable Annuity Account 2") was established on February 26, 1993 as a separate investment account of Canada Life Insurance Company of America ("CLICA") to receive and invest premium payments under variable annuity policies issued by CLICA. Variable Annuity Account 2 is registered as a unit investment trust under the Investment Company Act of 1940, as amended. The assets of Variable Annuity Account 2 are invested in the shares of Seligman Portfolios, Inc. (the "Fund"), a diversified, open-end, management investment company. Variable Annuity Account 2 has nine sub-accounts, each of which invests only in the shares of the corresponding portfolio of the Fund. The assets of Variable Annuity Account 2 are the property of CLICA. The portion of Variable Annuity Account 2 assets applicable to the policies will not be charged with liabilities arising out of any other business CLICA may conduct. 2. Significant Accounting Policies Investments Investments in shares of the Fund are valued at the reported net asset values of the respective portfolios. Realized gains and losses are computed on the basis of average cost. The difference between cost and current market value of investments owned is recorded as an unrealized gain or loss on investments. Dividends Dividends are recorded on the ex-dividend date and reflect the dividends declared by the Fund from their accumulated net investment income and net realized investment gains. Dividends in the Cash Management Portfolio are declared daily and paid monthly. Dividends in the Capital, Common Stock, Communications and Information, Fixed Income Securities, Frontier, Global, Global Smaller Companies (formerly Global Emerging Companies) and Income Portfolios are declared and paid annually. Dividends paid to the Variable Annuity Account 2 are reinvested in additional shares of the respective Fund at the net asset value per share. Federal Income Taxes Variable Annuity Account 2 is not taxed separately because the operations of Variable Annuity Account 2 will be included in the Federal income tax return of CLICA, which is taxed as a "life insurance company" under the provisions of the Internal Revenue Code. 3. Investments The investment by Variable Annuity Account 2 in the individual Portfolios of the Fund is as follows:
Number of Shares Market Price Market Value Cost ---------------- ------------ ------------ ------------ Capital 91,326 $12.699 $1,159,748 $1,299,151 Cash Management 537,245 1.000 537,245 537,245 Common Stock 171,166 13.784 2,359,352 2,613,892 Communications and Information 47,368 10.443 494,664 476,566 Fixed Income Securities 91,767 9.269 850,588 915,589 Frontier 11,570 10.580 122,411 116,006 Global 150,458 11.336 1,705,592 1,702,545 Global Smaller Companies 12,754 10.313 131,532 127,738 Income 194,512 9.974 1,940,063 2,147,997 ---------- ---------- $9,301,195 $9,936,729 ========== ==========
4. Security Purchases and Sales The aggregate cost of purchases and the proceeds from sales of investments are presented below:
Aggregate Cost of Purchases Proceeds from Sales ---------------------------- ----------------- Capital $1,423,989 $ 218,696 Cash Management 1,067,045 598,765 Common Stock 1,936,894 57,396 Communications and Information 505,821 29,270 Fixed Income Securities 846,815 155,282 Frontier 116,166 167 Global 1,389,758 202,473 Global Smaller Companies 127,955 219 Income 2,011,418 359,912 ---------- ---------- $9,425,861 $1,622,180 ========== ==========
--6-- Canada Life of America Variable Annuity Account 2 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 5. Summary of Changes from Unit Transactions The following table represents a summary of changes from unit transactions attributable to contractholders for the periods indicated. The Communications and Information, Frontier and Global Smaller Companies Portfolios commenced operations on October 11, 1994:
For the period from June 21, 1993 (commencement of operations) Year ended December 31, 1994 to December 31, 1993 ---------------------------- ----------------------------- Units Amount Units Amount ------ -------- ------- -------- Capital Sub-Account Accumulation Units: Contract purchases and net transfers in 68,845 $1,206,771 4,660 $ 87,836 Terminated contracts and net transfers out (11,147) (135,276) -- -- -------- ---------- --------- --------- 57,698 1,071,495 4,660 87,836 ======== ========== ========= ========= Cash Management Sub-Account Accumulation Units: Contract purchases and net transfers in 895,094 919,388 194,451 236,916 Terminated contracts and net transfers out (517,005) (455,961) (138,313) (168,644) -------- ---------- --------- --------- 378,089 463,427 56,138 68,272 ======== ========== ========= ========= Common Stock Sub-Account Accumulation Units: Contract purchases and net transfers in 94,149 1,729,749 35,267 644,443 Terminated contracts and net transfers out (1,785) (13,182) (61) (1,151) -------- ---------- --------- --------- 92,364 1,716,567 35,206 643,292 ======== ========== ========= ========= Communications and Information Sub-Account Accumulation Units: Contract purchases and net transfers in 47,541 477,222 Terminated contracts and net transfers out -- -- -------- ---------- 47,541 477,222 ======== ========== Fixed Income Securities Sub-Account Accumulation Units: Contract purchases and net transfers in 60,800 705,025 15,130 209,969 Terminated contracts and net transfers out (11,270) (48,526) (46) (651) -------- ---------- --------- --------- 49,530 656,499 15,084 209,318 ======== ========== ========= ========= Frontier Sub-Account Accumulation Units: Contract purchases and net transfers in 11,609 116,162 Terminated contracts and net transfers out -- -- -------- ---------- 11,609 116,162 ======== ========== Global Sub-Account Accumulation Units: Contract purchases and net transfers in 119,532 1,203,916 47,057 507,678 Terminated contracts and net transfers out (16,093) (36,062) (56) (651) -------- ---------- --------- ---------- 103,439 1,167,854 47,001 507,027 ======== ========== ========= ========== Global Smaller Companies Sub-Account Accumulation Units: Contract purchases and net transfers in 12,740 127,393 Terminated contracts and net transfers out -- -- -------- ---------- 12,740 127,393 ======== ========== Income Sub-Account Accumulation Units: Contract purchases and net transfers in 117,463 1,805,921 27,513 462,204 Terminated contracts and net transfers out (20,059) (245,286) (39) (651) ======== ========== --------- ---------- 97,404 1,560,635 27,474 461,553 ======== ---------- ========= ---------- Net increase from unit transactions $7,357,254 $1,977,298 ========== ==========
--7-- Canada Life of America Variable Annuity Account 2 - -------------------------------------------------------------------------------- Notes to Financial Statements (continued) - -------------------------------------------------------------------------------- 6. Mortality and Expense Risk (M and E) Charges CLICA assumes mortality and expense risks related to the operations of Variable Annuity Account 2 and deducts a charge equal to an effective annual rate of 1.25% of the net asset value of each of the Funds at each valuation period. In addition, at each valuation period an effective annual rate of 0.35% of the net asset value of each Fund is deducted as daily administration fees. 7. Net Assets Net assets at December 31, 1994 consisted of the following:
Net Accumulated Net Unrealized Investment Realized Appreciation Accumulated Income Gain (Depreciation) Unit M and E and Capital (Loss) on on Sub-Account Transactions Charges Gains Investments Investments Combined - ----------- ---------- ---------- ---------- ---------- ---------- -------- Capital $1,159,331 $ (9,873) $143,531 $(12,949) $(139,403) $1,140,637 Cash Management 531,699 (6,865) 17,298 -- -- 542,132 Common Stock 2,359,859 (20,803) 281,797 (1,862) (254,540) 2,364,451 Communications and Information 477,222 (875) -- 15 18,098 494,460 Fixed Income Securities 865,817 (5,904) 66,578 (10,336) (65,001) 851,154 Frontier 116,162 (216) -- 7 6,405 122,358 Global 1,674,881 (18,998) 29,338 6,123 3,047 1,694,391 Global Smaller Companies 127,393 (258) 537 2 3,794 131,468 Income 2,022,188 (23,321) 183,944 (15,428) (207,934) 1,959,449 ---------- -------- -------- -------- --------- ---------- $9,334,552 $(87,113) $723,023 $(34,428) $(635,534) $9,300,500 ========== ======== ======== ======== ========= ==========
- -------------------------------------------------------------------------------- Report of Independent Auditors - -------------------------------------------------------------------------------- Board of Directors of Canada Life Insurance Company of America and Contract Owners of Canada Life of America Variable Annuity Account 2: We have audited the accompanying statement of net assets of Canada Life of America Variable Annuity Account 2 ("Variable Annuity Account 2") as of December 31, 1994, and the related statements of operations and changes in net assets for the periods indicated therein. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1994, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Variable Annuity Account 2 at December 31, 1994, and the results of its operations and the changes in its net assets for each of the periods indicated therein in conformity with generally accepted accounting principles. /S/ ERNST & YOUNG LLP ERNST & YOUNG LLP Atlanta, Georgia January 26, 1995 --8-- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Important Portfolio Changes* (unaudited) - -------------------------------------------------------------------------------- During the six months ended December 31, 1994
Principal Amount Principal Amount Additions or Shares Reductions or Shares --------------------- ---------------------- --------------------- ---------------------- Holdings Holdings Increase 12/31/94 Decrease 12/31/94 -------- -------- -------- -------- SELIGMAN CAPITAL PORTFOLIO Common Stocks Common Stocks British Sky Broadcasting (ADRs) 4,900 shs. 4,900 shs. Barnes & Noble................. 4,100 shs. -- Fingerhut...................... 1,000 5,200 Columbia/HCA Healthcare........ 1,000 2,900 shs. Illinois Tool Works............ 2,700 2,700 Corvel......................... 5,400 -- John Alden Financial........... 3,400 3,400 Cracker Barrel Old Country..... 4,200 -- Liz Claiborne.................. 4,800 4,800 Department 56.................. 2,000 2,000 MBNA........................... 4,800 4,800 General Nutrition.............. 4,000 -- NEXTEL Communications.......... 1,500 4,300 Harley-Davidson................ 2,500 -- OfficeMax...................... 5,700 5,700 Nordson........................ 1,800 -- Paging Network................. 4,300 4,300 PETsMART....................... 4,300 -- Powersoft...................... 1,700 1,700 Snapple Beverage............... 4,300 --
- -------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO Common Stocks K Mart......................... 5,500 shs. 5,500 shs. Mallinckrodt Group............. 3,600 3,600 Snap-On Tools.................. 4,100 4,100 Wendy's International.......... 7,000 7,000 Common Stocks Pall........................... 12,899 shs. -- Texas Instruments.............. 4,000 -- Convertible Preferred Stocks Great Western Financial 83/4%.. 5,000 -- Mobile Telecommunications Technology $2.25............ 5,000 -- Subordinated Convertible Bonds Genzyme 6 3/4%, 10/1/2001....... $250,000 -- Michaels Stores 4 3/4%, 1/15/2003 100,000 -- Oryx Energy 7 1/2%, 5/15/2014... 250,000 -- - -------------------------------------------------------------------------------- SELIGMAN FIXED INCOME SECURITIES PORTFOLIO U.S. Government Securities U.S. Treasury Bonds 8 7/8%, 2/15/2019............ $900,000 $900,000 Corporate Bonds News America Holdings 8 1/4%, 8/10/2018............ 150,000 150,000 USX 9 1/8%, 1/15/2013........... 100,000 100,000 Asset-backed Security Ford Credit Grantor Trust 7.30%, 10/15/1999........... 145,874 145,874 U.S. Government Securities and Agencies U.S. Treasury Bonds 9 1/4%, 2/15/2016........... $300,000 -- U.S. Treasury Notes 7%, 9/30/1996 .............. 300,000 -- Government National Mortgage Association 7.30%, 12/16/2017 REMIC Trust 1994-1.......... 500,000 -- Corporate Bonds Ford Motor Credit 6 3/4%, 8/15/2008 150,000 -- Time Warner Entertainment 7 1/4%, 9/1/2008............. 150,000 -- - ---------- See footnote on page 10. -9- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Important Portfolio Changes* (unaudited) (continued) - -------------------------------------------------------------------------------- During the six months ended December 31, 1994
Principal Amount Principal Amount Additions or Shares Reductions or Shares --------------------- ---------------------- --------------------- ---------------------- Holdings Holdings Increase 12/31/94 Decrease 12/31/94 -------- -------- -------- -------- SELIGMAN HENDERSON GLOBAL PORTFOLIO Common Stocks Common Stocks Daiwa House Industry........... 3,000 shs. 4,000 shs. Alco Standard.................. 200 shs. -- East Japan Railways............ 11 11 American International Group... 150 -- Mitsubishi Rayon............... 9,000 13,000 Coca-Cola...................... 300 -- News Corp...................... 5,203 6,204 Dow Chemical................... 150 -- Nippon Telegraph & Telephone... 6 6 General Mills.................. 200 -- Pioneer Electronics............ 1,000 2,000 Honda Motor.................... 1,000 -- Sumitomo Trust and Banking..... 2,000 2,000 International Business Machines 200 -- Toshiba........................ 6,000 8,000 Omnicom Group.................. 200 -- TPI Polene..................... 3,250 3,250 Schering-Plough................ 200 -- Yamaha......................... 3,000 4,000 Sharp.......................... 1,000 --
- -------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO Common Stocks CINergy........................ 9,718 shs. 9,718 shs. K Mart......................... 3,200 3,200 Convertible Preferred Stocks Alexander & Alexander (Series A) $3.625........... 1,500 1,500 Corning Delaware L.P. 6%....... 1,700 1,700 Subordinated Convertible Bonds Bay Networks 5 1/4%, 5/15/2003. $100,000 $100,000 U.S. Government Securities U.S. Treasury Notes 7 1/4%,11/15/1996........... 500,000 500,000 Common Stocks Union Electric................. 5,200 shs. -- Washington Energy.............. 14,000 -- Convertible Preferred Stocks Great Western Financial 8 3/4%. 5,000 -- Mobile Telecommunications Technology $2.25............ 3,500 -- Subordinated Convertible Bonds Genzyme 6 3/4%,10/1/2001....... $250,000 -- USLICO 8 1/2%, 12/15/2014...... 250,000 -- Hechinger 5 1/2%, 4/1/2012..... 250,000 -- Corporate Bonds Quaker Oats 9.15%, 10/28/2004.. 100,000 -- U.S. Government Agencies Government National Mortgage Association 7.30%, 12/16/2017 REMIC Trust 1994-1.......... 500,000 -- - ---------- * Largest portfolio changes from the previous midyear to the current year-end are based on cost of purchases and proceeds from sales of securities. -10- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Annual Performance Overview December 31, 1994 - -------------------------------------------------------------------------------- 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, 1994, to a $10,000 hypothetical investment made in the appropriate benchmark indices and/or averages for the same period. Accompanying each chart is a discussion of the economic factors, investment strategy, and sector performance that affected the Portfolio during the past year. 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. [The table below was represented as a graph in the printed material] Seligman Lipper Capital Capital Portfolio Appreciation Average S&P 500 ----------------- -------------------- ------- 6/21/88 $10,000 $10,000 $10,000 9/30/88 $10,090 $ 9,868 $10,034 12/31/88 $10,060 $ 9,962 $10,344 3/31/89 $10,240 $10,738 $11,077 6/30/89 $10,840 $11,620 $12,055 9/30/89 $12,040 $12,827 $13,346 12/31/89 $11,717 $12,627 $13,621 3/31/90 $11,344 $12,325 $13,211 6/30/90 $12,715 $13,109 $14,042 9/30/90 $ 9,720 $10,872 $12,113 12/31/90 $11,344 $11,630 $13,198 3/31/91 $13,597 $13,821 $15,115 6/30/91 $13,778 $13,615 $15,081 9/30/91 $15,455 $14,820 $15,887 12/31/91 $18,042 $16,230 $17,219 3/31/92 $16,842 $16,280 $16,784 6/30/92 $15,601 $15,632 $17,104 9/30/92 $16,791 $15,974 $17,643 12/31/92 $19,268 $17,671 $18,531 3/31/93 $19,904 $18,286 $19,341 6/30/93 $19,552 $18,792 $19,435 9/30/93 $20,846 $20,093 $19,937 12/31/93 $21,514 $20,492 $20,399 3/31/94 $20,837 $19,802 $19,625 6/30/94 $19,010 $18,931 $19,708 9/30/94 $20,736 $20,154 $20,672 12/31/94 $20,526 $19,791 $20,668 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception ------- --------- --------- Seligman Capital Portfolio -4.59% 11.87% 11.64% Lipper Capital Appreciation -3.42 9.40 11.06 S&P 500 1.32 8.70 11.80 Continued solid economic growth, despite the Federal Reserve Board's six short-term interest rate increases, had a negative impact on U.S. financial markets in 1994. The bulk of the damage was sustained in the second quarter of the year, as interest rates were increased twice within the three-month period. Since then, due to subsided selling pressure from liquidity-sensitive investors and the fact that equity valuations have begun to rebound, the financial markets and your Portfolio regained strength. Throughout the year, your Portfolio maintained a large exposure to companies with steady predictable earnings growth. Typically, these companies, which are driven by growth in unit sales, do not rely on significant price increases or strong economic growth. However, in a period of strong economic growth, like 1994, cyclical or highly economically sensitive companies can show rapid growth spurts, which often dwarf the performance of companies with steady earnings streams. In 1994, technology was the best performing sector in the market and in your Portfolio. Your Portfolio's position in Microsoft performed very well, as did its semiconductor-related issues. Although the technology sector of the market continues to provide us with a number of attractive investment opportunities, the sector also tends to exhibit considerable volatility--a characteristic we feel is worth withstanding. The Portfolio's consumer cyclical exposure remained heavy throughout the year, but again, despite some very strong financial performances, the stocks continued to remain undervalued. The expected slowing of the economy in the second half of 1995 should play well into the Portfolio's exposure to companies with superior earnings prospects that are selling at compelling valuations. The unsettled international environment and an improving U.S. Dollar may also bring the U.S. equity markets back into investor focus, and provide for some good capital appreciation, all of which bodes well for your Portfolio. - ---------- See footnote on page 15. -11- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Annual Performance Overview (continued) - -------------------------------------------------------------------------------- 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. [The table below was represented as a graph in the printed material] Seligman Common Lipper Growth and Stock Portfolio S&P 500 Income Average --------------- ------- -------------- 6/21/88 $10,000 $10,000 $10,000 9/30/88 $10,190 $10,034 $10,030 12/31/88 $10,180 $10,344 $10,226 3/31/89 $10,581 $11,077 $10,880 6/30/89 $11,223 $12,055 $11,648 9/30/89 $12,317 $13,346 $12,646 12/31/89 $12,635 $13,621 $12,640 3/31/90 $12,522 $13,211 $12,332 6/30/90 $13,315 $14,042 $12,953 9/30/90 $10,965 $12,113 $11,260 12/31/90 $12,237 $13,198 $12,084 3/31/91 $14,425 $15,115 $13,822 6/30/91 $14,287 $15,081 $13,771 9/30/91 $15,281 $15,887 $14,550 12/31/91 $16,295 $17,219 $15,604 3/31/92 $16,604 $16,784 $15,590 6/30/92 $16,472 $17,104 $15,612 9/30/92 $17,146 $17,643 $16,022 12/31/92 $18,272 $18,531 $16,977 3/31/93 $18,928 $19,341 $17,741 6/30/93 $19,127 $19,435 $17,878 9/30/93 $19,608 $19,937 $18,514 12/31/93 $20,454 $20,399 $18,933 3/31/94 $19,621 $19,625 $18,338 6/30/94 $19,730 $19,708 $18,265 9/30/94 $20,727 $20,672 $19,052 12/31/94 $20,463 $20,668 $18,753 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception ------- --------- --------- Seligman Common Stock Portfolio 0.04% 10.12% 11.59% S&P 500 1.32 8.70 11.80 Lipper Growth and Income -0.95 8.21 10.15 The rise in short-term interest rates and investors' concerns over an increased rate of future inflation had a tremendous effect on both the equity and bond markets. This made 1994 a challenging year for investors. While many investors focused on issues with attractive short-term momentum, such as cyclical and technology issues, your Portfolio continued to be broadly diversified with quality companies with strong long-term prospects for earnings growth. We believe our strategy of holding a well-rounded list of companies in many industry groups should continue to benefit the Portfolio in the years ahead. While cyclical issues such as chemical and technology companies did particularly well, the Portfolio's best performing stocks were the restructuring companies such as IBM. Conversely, both financial stocks, in particular bank issues, and convertible securities had a difficult time in 1994 due to their inherent sensitivity to interest rate changes. With the prospect of slowing economic growth in 1995, stock selection will continue to be central to good near-term performance. We will continue to focus on identifying companies with strong long-term earnings and solid growth potential as a means of achieving solid capital appreciation. 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. [The table below was represented as a graph in the printed material] Seligman Communications Lipper Science and Information Portfolio S&P 500 and Technology ------------------------- ------- -------------- 10/11/94 $10,000 $10,000 $10,000 10/31/94 $10,000 $10,209 $10,534 11/30/94 $10,000 $ 9,805 $10,222 12/31/94 $10,440 $ 9,998 $10,404 Cumulative Total Return+ Since Inception --------- Seligman Communications and Information Portfolio 4.40% S&P 500 -0.02 Lipper Science and Technology 4.20 In 1994, technology stocks as a group benefited from the strong global demand for the key technology "end markets:" personal computers; networking; telecom-munications equipment; software; and wireless communications. In turn, the strength of these markets created a healthy climate for their suppliers: contract manufacturers; semiconductor companies; and suppliers of capital equipment to the electronics market. The Portfolio's emphasis on investing in fast-growing companies that demonstrate the potential for positive earnings surprises proved quite rewarding. We believe that the secular bull market for technology experienced thus far in the 1990s will continue through this decade. The industry is benefiting from both the capital investment cycle that is driving the current economic expansion, and the information-driven revolution that has been unfolding. Technology continues to dominate the office, the factory, the home, and the transportation and entertainment industries; as a result it will continue to capture a greater share of corporate and consumer spending over time. We believe 1995 will be an advantageous environment for technology issues. But, more specifically, the overall technology industry, and your Portfolio in particular, should benefit from the increased spending associated with two key events: the emergence of the Intel Pentium chip in the mainstream of the PC market, and the launch of Microsoft's new operating system for PCs--Windows95. Because these advances in the computer market will continually demand upgraded products and services, every industry involved in the process of manufacturing PCs should benefit, which bodes well for your Portfolio's investments. - ---------- See footnote on page 15. -12- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- Seligman Fixed Income Securities 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. [The table below was represented as a graph in the printed material] Seligman Fixed Lehman Brothers Income Securities Government Lipper Fixed Portfolio S&P 500* Bond Index Income Average ---------------- -------- ---------- -------------- 6/21/88 $10,000 $10,000 $10,000 $10,000 9/30/88 $10,100 $10,034 $10,169 $10,136 12/31/88 $10,101 $10,344 $10,265 $10,228 3/31/89 $10,121 $11,077 $10,374 $10,316 6/30/89 $10,670 $12,055 $11,208 $11,032 9/30/89 $10,691 $13,346 $11,300 $11,119 12/31/89 $10,979 $13,621 $11,726 $11,503 3/31/90 $10,797 $13,211 $11,581 $11,382 6/30/90 $11,119 $14,042 $11,986 $11,751 9/30/90 $11,162 $12,113 $12,085 $11,821 12/31/90 $11,653 $13,198 $12,750 $12,458 3/31/91 $11,924 $15,115 $13,026 $12,720 6/30/91 $12,094 $15,081 $13,202 $12,856 9/30/91 $12,727 $15,887 $13,956 $13,595 12/31/91 $13,352 $17,219 $14,704 $14,281 3/31/92 $13,121 $16,784 $14,447 $14,006 6/30/92 $13,485 $17,104 $15,018 $14,534 9/30/92 $14,081 $17,643 $15,760 $15,148 12/31/92 $14,099 $18,531 $15,766 $15,189 3/31/93 $14,548 $19,341 $16,479 $15,808 6/30/93 $14,879 $19,435 $16,955 $16,232 9/30/93 $15,249 $19,937 $17,506 $16,686 12/31/93 $15,224 $20,399 $17,447 $16,621 3/31/94 $14,787 $19,625 $16,922 $16,093 6/30/94 $14,622 $19,708 $16,729 $15,802 9/30/94 $14,742 $20,672 $16,800 $15,808 12/31/94 $14,708 $20,668 $16,860 $15,846 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception ------- --------- --------- Seligman Fixed Income Securities Portfolio -3.39% 6.02% 6.08% S&P 500* 1.32 8.70 11.80 Lehman Brothers Government Bond Index -3.37 7.53 8.37 Lipper Fixed Income Average -4.67 6.62 7.33 * The Seligman Fixed Income Securities Portfolio will no longer be compared to the Standard & Poor's 500 Composite Stock Price Index (S&P 500) after December 31, 1994, because the Manager does not believe a comparison between a broad-based equity index (S&P 500) and your Portfolio's holdings is appropriate. Stronger economic growth and anticipation of higher inflation, which prompted the Federal Reserve Board to raise short-term interest rates six times, adversely effected all bond funds in 1994. However, because your Portfolio held issues with shorter maturities than its peers, it performed relatively well against its peers for the year. Once the Federal Reserve Board raised short-term interest rates for the first time on February 4, 1994, we began to shorten the maturity of your Portfolio's holdings. This was done in order to lessen the impact of the increase, as short-term bonds react with less volatility than long-term bonds in a period of changing interest rates. Shorter maturities were kept throughout the year, resulting in your Portfolio's stronger relative performance. In addition, we favored U.S. Treasury issues over GNMA securities, as we felt liquidity was somewhat more important than yield, given the volatile investment environment. Finally, we did not invest in "risky" derivative securities as a means of achieving greater yields, nor are we permitted to do so under your Portfolio's investment policies. Because the Federal Reserve Board is expected to continue to raise short-term interest rates until it believes they are high enough to slow the economy to a non-inflationary pace, the short-term may remain difficult for bond markets. However, the higher interest rates should slow the economy during 1995, resulting in a stabilized bond market in which valuations can begin to recover. In this situation, we may then begin to purchase longer-term bonds to take advantage of the possible increase in prices. 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. [The table below was represented as a graph in the printed material] Lipper Seligman Small Company Frontier Portfolio NASDAQ Fund Average ------------------ ------ ------------ 10/11/94 $10,000 $10,000 $10,000 10/31/94 $10,000 $10,171 $10,135 11/30/94 $10,000 $ 9,816 $ 9,766 12/31/94 $10,580 $ 9,837 $ 9,974 Cumulative Total Return+ Since Inception --------- Seligman Frontier Portfolio 5.80% NASDAQ -1.63 Lipper Small Company Fund -0.26 Higher interest rates cause small- and medium-company growth stocks, the very type in which the Frontier Portfolio invests, to fall under pressure. Therefore, the rise in interest rates in 1994 certainly hampered the Portfolio's performance. Nevertheless, performance was still strong. Our focus remains on investing in companies that we believe will demonstrate positive earnings surprises. It has been our experience that such companies often sustain their better-than-expected funda-mentals over a six- to 12-month period or longer, leading to exceptional price appreciation. This focus clearly benefited the Portfolio's performance. Many of the technology holdings performed particularly well in response to strong demand for semiconductors and semi-conductor production equipment. By contrast, the financial issues had relatively flat performance because of their inherent sensitivity to interest rate increases. Looking forward, we are optimistic about the coming year. In 1994, interest rates rose in response to inflationary fears. However, if inflation remains controlled, we expect excellent performance by small- and medium-company growth stocks as interest rates fall. In any event, small-company growth stocks are currently trading at very reasonable valuations and are enjoying excellent earnings due to the robust economy in the United States, and improving economies and increased demand in other countries. If inflation does increase over the next year, these factors should help protect the Portfolio. - ---------- See footnote on page 15. -13- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Annual Performance Overview (continued) - -------------------------------------------------------------------------------- After a strong 1993, this past year proved to be difficult for stock markets worldwide: Of the major international markets, Japan was the only one that managed to rise. The principal factor behind the weakness of the stock markets was the sharp turn in the bond markets; yields rose sharply in all bond markets as the U.S. Federal Reserve Board increased short-term interest rates. Furthermore, economic growth worldwide shifted money away from the financial markets and into capital spending. The economic outlook for 1995 looks positive with worldwide growth likely to continue at a good pace and inflation, while moderately rising, should remain under control. There are uncertainties, however, in the outlook for interest rates. In the short term, rates are likely to rise further, which may continue to put pressure on the long-end of the bond market. However, hallowing last year's weakness, we now feel that yields on bonds are quite attractive and will not increase much further on a sustained basis. With corporate profit-growth likely to be above expectations, stock markets should improve once the short-term uncertainties over the bond market have passed. This background should be positive for small companies that, with the exception of those in the U.S. and U.K., have not yet performed particularly well. However, following the example of the smaller companies in the U.S. and U.K., many of these underperforming small companies seem set to enjoy a strong period of growth. Seligman Henderson Global 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. [The table below was represented as a graph in the printed material] Seligman Henderson EAFE Global Portfolio MSCI World Index Index ---------------- ---------------- ----- 5/3/93 $10,000 $10,000 $10,000 5/31/93 $10,000 $10,213 $10,198 6/30/93 $10,010 $10,110 $10,026 7/31/93 $10,040 $10,301 $10,364 8/31/93 $10,510 $10,756 $10,911 9/30/93 $10,480 $10,540 $10,652 10/31/93 $10,840 $10,814 $10,967 11/30/93 $10,840 $10,185 $ 9,996 12/31/93 $11,440 $10,666 $10,705 1/31/94 $11,832 $11,353 $11,597 2/28/94 $11,470 $11,188 $11,552 3/31/94 $10,987 $10,688 $11,041 4/29/94 $11,309 $11,001 $11,496 5/31/94 $11,440 $11,012 $11,416 6/30/94 $11,399 $10,964 $11,564 7/29/94 $11,711 $11,154 $11,661 8/31/94 $11,963 $11,472 $11,923 9/30/94 $11,751 $11,153 $11,533 10/31/94 $11,923 $11,452 $11,903 11/30/94 $11,510 $10,937 $11,316 12/31/94 $11,591 $11,024 $11,373 Average Annual Total Returns+ Since One Yr. Inception ------- --------- Seligman Henderson Global Portfolio 1.32% 9.28% MSCI World Index 3.36 6.01 EAFE Index 6.24 8.00 We significantly increased our weighting in Japan early in 1994, which enabled us to take some advantage of the rise in that market. Throughout the year, we remained overweighted in the Pacific Region, favoring countries such as Korea, Taiwan, and Singapore, and remained underweighted in Hong Kong and Malaysia. In Europe, as a whole, we were broadly neutral with no significant bias towards any particular country. Additionally, we held a modest weighting in Latin America, which suffered in the fourth quarter following the Mexican crisis. However, because of your Portfolio's diversification, we saw little impact. Seligman Henderson Global Smaller Companies 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. [The table below was represented as a graph in the printed material] Seligman Henderson Global MSCI World Lipper Global Small Smaller Companies Portfolio Index Company Fund Average --------------------------- ---------- -------------------- 10/11/94 $10,000 $10,000 $10,000 10/31/94 $10,000 $10,268 $10,079 11/30/94 $10,000 $ 9,806 $ 9,584 12/31/94 $10,353 $ 9,885 $ 9,581 Cumulative Total Return+ Since Inception --------- Seligman Henderson Global Smaller Companies Portfolio 3.53% MSCI World Index -1.15 Lipper Global Small Company Avg. -4.19 We were relatively cautious in the investment of the Portfolio in October and November, and only started to make significant investments in December. Our initial strategy was to focus on the U.S., U.K., Continental Europe, and Japan. Given the small size of the Portfolio, we purchased a limited number of companies in these markets, but will continue to expand our holdings as the Portfolio grows in size. - ---------- See footnote on page 15. -14- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- 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. [The table below was represented as a graph in the printed material] Seligman Lipper Income Portfolio S&P 500 Income Average ---------------- ------- -------------- 6/21/88 $10,000 $10,000 $10,000 9/30/88 $10,090 $10,034 $10,150 12/31/88 $10,110 $10,344 $10,273 3/31/89 $10,453 $11,077 $10,610 6/30/89 $11,097 $12,055 $11,196 9/30/89 $11,379 $13,346 $11,628 12/31/89 $11,587 $13,621 $11,747 3/31/90 $11,566 $13,211 $11,552 6/30/90 $11,673 $14,042 $11,899 9/30/90 $10,512 $12,113 $11,243 12/31/90 $10,880 $13,198 $11,738 3/31/91 $12,105 $15,115 $12,773 6/30/91 $12,609 $15,081 $12,994 9/30/91 $13,640 $15,887 $13,827 12/31/91 $14,241 $17,219 $14,566 3/31/92 $14,823 $16,784 $14,711 6/30/92 $15,190 $17,104 $15,141 9/30/92 $15,747 $17,643 $15,671 12/31/92 $16,479 $18,531 $15,983 3/31/93 $17,376 $19,341 $16,746 6/30/93 $17,853 $19,435 $17,118 9/30/93 $18,389 $19,937 $17,649 12/31/93 $18,518 $20,399 $17,845 3/31/94 $17,736 $19,625 $17,276 6/30/94 $17,199 $19,708 $17,220 9/30/94 $17,785 $20,672 $17,589 12/31/94 $17,413 $20,668 $17,334 Average Annual Total Returns+ Since One Yr. Five Yrs. Inception ------- --------- --------- Seligman Income Portfolio -5.96% 8.49% 8.86% S&P 500 1.32 8.70 11.80 Lipper Income -2.86 8.09 8.82 The rise in short-term interest rates and investors' concerns over the possibility of an increase in the future rate of inflation had a tremendous effect on both the equity and bond markets. Our strategy in 1994 was to lessen the impact of rising interest rates on the Portfolio. We began the year with a relatively large cash position and a reduced exposure to convertible securities. Throughout the year we avoided domestic electric utilities and focused instead on other issues with stronger fundamentals and attractive yields. In hindsight though, cash equivalents proved to be the only true safe haven for yield-oriented investors. Stock selection was the key to performance in 1994 and should remain important in 1995. Within the difficult market conditions, few sectors saw strong stock price appreciation in 1994, except for select technology and cyclical issues. The interest-sensitive nature of the Income Portfolio was the main reason for its lackluster performance, as 1994 was a year in which interest rates were dramatically increased. With the majority of the interest rate increase behind us, we expect 1995 to be a better year for interest-sensitive assets, which should benefit the Income Portfolio. We remain committed to identifying companies that represent good value and have strong potential for future earnings growth, a strategy that has served us well over the years. - ---------- + Performance data quoted represent past performance and assume that all dividends and distributions are invested in additional shares. The investment return and principal value of an investment will fluctuate so that shares, if redeemed, may be worth more or less than their original cost. Past performance is not indicative of future investment results. -15- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments - -------------------------------------------------------------------------------- SELIGMAN CAPITAL PORTFOLIO Shares Value ------ ----- COMMON STOCKS -- 95.5% AUTOMOTIVE AND RELATED -- 4.8% Chrysler ......................................... 2,100 $ 102,900 Eaton ............................................ 2,000 99,000 TBC* ............................................. 9,150 83,494 ---------- 285,394 ---------- BASIC MATERIALS -- 3.1% Louisiana Pacific ................................ 4,600 125,350 Nucor ............................................ 1,000 55,500 ---------- 180,850 ---------- BUSINESS SERVICES AND SUPPLIES -- 8.4% Grainger (W.W.) .................................. 1,900 109,725 Interpublic Group of Companies ................... 3,600 115,650 Paging Network ................................... 4,300 145,125 Sensormatic Electronics .......................... 3,500 126,000 ---------- 496,500 ---------- COMPUTER GOODS AND SERVICES -- 13.3% Ceridian* ........................................ 5,400 145,125 Compuware* ....................................... 2,600 93,275 EMC* ............................................. 6,300 136,238 FIserv* .......................................... 6,000 129,750 Parametric Technology ............................ 4,800 165,000 Xilinx* .......................................... 2,000 118,250 ---------- 787,638 ---------- CONSUMER GOODS AND SERVICES -- 7.2% CUC International* ............................... 3,400 113,900 Department 56* ................................... 2,000 79,500 Newell ........................................... 5,800 121,800 UST Inc. ......................................... 4,000 111,000 ---------- 426,200 ---------- DRUGS AND HEALTH CARE -- 13.9% Beverly Enterprises .............................. 7,800 112,125 Columbia/HCA Healthcare .......................... 2,900 105,850 Community Psychiatric Centers .................... 6,800 74,800 Corvel ........................................... 4,000 110,000 Dentsply International* .......................... 3,200 100,000 Protein Design Labs* ............................. 4,900 77,481 Sunrise Medical* ................................. 5,000 138,125 Teva Pharmaceutical (ADRs) ....................... 4,500 109,125 ---------- 827,506 ---------- FINANCIAL SERVICES -- 5.3% John Alden Financial ............................. 3,400 97,750 MBNA ............................................. 4,800 112,200 Travelers ........................................ 3,300 107,250 ---------- 317,200 ---------- - ---------- * Non-income producing security. See notes to financial statements. -16- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN CAPITAL PORTFOLIO (continued) Shares Value ------ ----- FOOD AND FOOD SERVICES -- 3.4% Brinker International* ........................... 5,200 $ 94,250 PepsiCo .......................................... 3,000 108,750 ---------- 203,000 ---------- LEISURE AND RELATED -- 5.0% Circus Circus Enterprises* ....................... 3,700 86,025 Marvel Entertainment Group* ...................... 6,000 85,500 Mattel ........................................... 5,000 125,625 ---------- 297,150 ---------- RETAIL TRADE -- 12.7% Dillard Department Stores (Class A) .............. 3,200 85,600 Fingerhut ........................................ 5,200 80,600 Home Depot ....................................... 2,900 133,400 Illinois Tool Works .............................. 2,700 118,125 Liz Claiborne .................................... 4,800 81,000 OfficeMax* ....................................... 5,700 151,050 Sports & Recreation* ............................. 4,200 107,625 ---------- 757,400 ---------- SOFTWARE -- 4.8% Microsoft* ....................................... 2,400 147,000 Powersoft ........................................ 1,700 140,250 ---------- 287,250 ---------- SPECIALTY CHEMICALS -- 2.1% Schulman, A ...................................... 4,687 127,721 ---------- TELECOMMUNICATIONS -- 11.5% British Sky Broadcasting (ADRs) .................. 4,900 117,600 Century Telephone Enterprises .................... 4,000 118,000 Cisco Systems* ................................... 4,500 157,781 MCICommunications ................................ 4,700 86,656 Motorola ......................................... 2,400 138,900 NEXTEL Communications* ........................... 4,300 62,350 ---------- 681,287 ---------- Total Investments -- 95.5% (Cost $5,231,478) ..... 5,675,096 Other Assets Less Liabilities -- 4.5% ............ 267,278 ---------- Net Assets -- 100.0% ............................. $5,942,374 ========== - ---------- * Non-income producing security. See notes to financial statements. -17- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN CASH MANAGEMENT PORTFOLIO
Annualized Yield on Principal Purchase Date Amount Value ------------- -------- ----- U.S. GOVERNMENT SECURITIES -- 49.1% (Cost $1,587,551) U.S. Treasury Bills, 2/23/1995 ............................................... 5.43% $1,600,000 $1,587,551 ---------- COMMERCIAL PAPER -- 34.5% AT&T Capital Corp., 1/10/1995 ................................................ 5.44 150,000 149,799 Associates Corp. of North America, 3/20/1995 ................................. 6.25 160,000 157,868 Bankers Trust Corp., 1/27/1995 ............................................... 5.48 160,000 159,376 Ford Motor Credit Corp., 3/6/1995 ............................................ 6.25 165,000 163,196 John Deere Capital Corp., 1/19/1995 .......................................... 5.52 165,000 164,550 J. P. Morgan & Co., 2/14/1995 ................................................ 5.81 160,000 158,879 NationsBank of North Carolina, 1/9/1995 ...................................... 5.62 160,000 159,802 ---------- Total Commercial Paper (Cost $1,113,470) ..................................... 1,113,470 ---------- REPURCHASE AGREEMENTS -- 9.3% (maturing 1/4/1995) (Cost $300,000) Lehman Government Securities, Inc., collateralized by: $305,000 U.S. Treasury Notes 7%, 9/30/1996, with a fair market value of $306,848 ...................................... 5.30 300,000 300,000 ---------- BANKERS' ACCEPTANCES -- 4.4% (Cost $142,629) Republic National Bank of New York, 3/1/1995 ................................. 6.11 144,055 142,629 ---------- Total Investments -- 97.3% (Cost $3,143,650) ................................. 3,143,650 Other Assets Less Liabilities -- 2.7% ........................................ 86,191 ---------- Net Assets -- 100.0% ......................................................... $3,229,841 ==========
SELIGMAN COMMON STOCK PORTFOLIO Shares Value ------ ----- COMMON STOCKS -- 86.6% ADVERTISING -- 1.0% Omnicom Group .................................... 4,000 $ 207,000 ---------- AUTOMOTIVE AND RELATED -- 1.4% Arvin Industries ................................. 4,700 109,275 General Motors ................................... 3,900 164,775 ---------- 274,050 ---------- CHEMICALS -- 5.2% Air Products and Chemicals ....................... 6,000 267,750 Dow Chemical ..................................... 7,500 504,375 Engelhard ........................................ 5,900 131,275 Lubrizol ......................................... 4,000 135,500 ---------- 1,038,900 ---------- COMPUTERS AND BUSINESS SERVICES -- 3.2% First Data ....................................... 6,000 284,250 International Business Machines .................. 5,000 367,500 ---------- 651,750 ---------- - ---------- See notes to financial statements. -18- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO (continued) Shares Value ------ ----- CONSTRUCTION -- 0.5% Cemex S.A. (ADSs) ................................ 16,875 $ 90,692 ---------- CONSUMER GOODS AND SERVICES -- 10.1% Coca-Cola ........................................ 6,000 309,000 Colgate-Palmolive ................................ 4,000 253,500 Eastman Kodak .................................... 3,000 143,250 Gillette ......................................... 4,000 299,000 International Flavors & Fragrances ............... 8,400 388,500 PepsiCo .......................................... 11,800 427,750 UST Inc. ......................................... 8,000 222,000 ---------- 2,043,000 ---------- DRUGS AND HEALTH CARE -- 3.7% Abbott Laboratories .............................. 5,900 192,488 Mallinckrodt Group ............................... 3,600 107,550 Schering-Plough .................................. 6,100 451,400 ---------- 751,438 ---------- ELECTRIC AND GAS UTILITIES -- 0.8% PacifiCorp ....................................... 9,000 163,125 ---------- ELECTRONICS -- 3.4% Motorola ......................................... 8,000 463,000 Perkin-Elmer ..................................... 4,000 102,500 Seagate Technology* .............................. 5,000 120,000 ---------- 685,500 ---------- ENERGY -- 10.2% Baker Hughes ..................................... 7,000 127,750 British Petroleum (ADRs) ......................... 5,000 399,375 Enron ............................................ 12,000 366,000 Mobil ............................................ 2,200 185,350 Pennzoil ......................................... 4,100 180,913 Royal Dutch Petroleum ............................ 1,000 107,500 Schlumberger ..................................... 5,200 261,950 Societe Nationale Elf Aquitaine (ADRs) ........... 5,000 176,250 Sonat ............................................ 9,000 252,000 ---------- 2,057,088 ---------- FINANCE AND INSURANCE -- 11.5% Ahmanson (H.F.) .................................. 7,900 127,387 American International Group ..................... 4,500 441,000 Bank of New York ................................. 6,000 174,000 Chubb ............................................ 2,600 201,175 First Financial Management ....................... 5,000 308,125 Gainsco .......................................... 24,309 200,549 General Re ....................................... 3,000 371,250 KeyCorp .......................................... 4,800 120,000 NationsBank ...................................... 5,614 253,332 PNC Bank ......................................... 5,900 124,637 ---------- 2,321,455 ---------- - ---------- * Non-income producing security. See notes to financial statements. -19- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO (continued) Shares Value ------ ----- FOOD -- 4.4% ConAgra .......................................... 3,750 $ 117,188 CPC International ................................ 4,000 213,000 Sara Lee ......................................... 18,000 454,500 Wendy's International ............................ 7,000 100,625 ---------- 885,313 ---------- INDUSTRIAL EQUIPMENT -- 2.5% General Electric ................................. 10,000 510,000 ---------- OFFICE EQUIPMENT -- 1.9% Pitney Bowes ..................................... 12,000 381,000 ---------- PAPER PRODUCTS -- 3.2% Federal Paper Board .............................. 5,100 147,900 Scott Paper ...................................... 4,400 304,150 Union Camp ....................................... 4,000 188,500 ---------- 640,550 ---------- PRINTING AND PUBLISHING -- 1.4% Knight-Ridder Newspapers ......................... 5,400 272,700 ---------- RETAIL TRADE -- 4.3% K Mart ........................................... 5,500 71,500 Nordstrom ........................................ 6,400 269,600 Penney (J.C.) .................................... 4,000 178,500 Snap-On Tools .................................... 4,100 136,325 TJX Companies .................................... 6,000 93,750 Wal-Mart ......................................... 6,000 127,500 ---------- 877,175 ---------- TELECOMMUNICATIONS -- 6.0% ALLTEL ........................................... 8,600 259,075 American Telephone & Telegraph ................... 4,000 201,000 GTE .............................................. 6,200 188,325 Telefonos de Mexico, S.A. (ADRs) ................. 6,000 246,000 Vodafone Group (ADSs) ............................ 9,195 309,182 ---------- 1,203,582 ---------- TOBACCO -- 1.1% Philip Morris .................................... 4,000 230,000 ---------- TRANSPORTATION -- 5.0% British Airways (ADRs) ........................... 6,250 353,906 Conrail .......................................... 2,800 141,400 NFC .............................................. 40,000 107,046 Roadway Services ................................. 7,000 396,375 ---------- 998,727 ---------- - ---------- See notes to financial statements. -20- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN COMMON STOCK PORTFOLIO (continued)
Shares or Principal Amount Value --------- ----- MISCELLANEOUS -- 5.8% Alco Standard ........................................ 5,000 shs. $ 313,750 Corning .............................................. 11,800 352,525 Minnesota Mining & Manufacturing ..................... 8,000 427,000 Raychem .............................................. 2,200 78,375 1,171,650 ----------- Total Common Stocks (Cost $12,718,011) ............... 17,454,695 ----------- CONVERTIBLE SECURITIES -- 10.1% CONVERTIBLE PREFERRED STOCKS -- 2.0% ConAgra (Series E) $1.6875 ........................... 5,000 163,750 Freeport-McMoRan $4.375+ ............................. 5,000 238,750 ----------- Total Convertible Preferred Stocks (Cost $403,094) ... 402,500 ----------- SUBORDINATED CONVERTIBLE BONDS -- 8.1% Century Telephone 6%, 2/1/2007+ ...................... $ 250,000 295,625 CML Group 5 1/2%, 1/15/2003 .......................... 250,000 180,000 Compania de Telefonos de Chile S.A. 4 1/2%, 1/15/2003. 350,000 374,938 EMC 4 1/4%, 1/1/2001 ................................. 125,000 151,406 ICICI 2 1/2%, 4/3/2000 ............................... 100,000 74,500 MascoTech 4 1/2%, 12/15/2003 ......................... 125,000 84,062 Medical Care International 6 3/4%, 10/1/2006+ ........ 250,000 210,000 Network Equipment 7 1/4%, 5/15/2014 .................. 300,000 272,625 ----------- Total Subordinated Convertible Bonds (Cost $1,679,289) 1,643,156 ----------- Total Convertible Securities (Cost $2,082,383) ....... 2,045,656 ----------- REPURCHASE AGREEMENT -- 2.5% (Cost $500,000) ......... 500,000 500,000 ----------- Total Investments -- 99.2% (Cost $15,300,394) ........ 20,000,351 Other Assets Less Liabilities -- 0.8% ................ 167,222 ----------- Net Assets -- 100.0% ................................. $20,167,573 ===========
SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO Shares Value ------ ----- COMMON STOCKS -- 68.1% COMPUTER HARDWARE/PERIPHERALS -- 8.6% Electro Scientific Industries* ................... 500 $ 10,750 Electronics for Imaging* ......................... 400 10,950 EMC* ............................................. 500 10,813 Western Digital* ................................. 600 10,050 ---------- 42,563 ---------- - ---------- + Rule 144A security. * Non-income producing security. See notes to financial statements. -21- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN COMMUNICATIONS AND INFORMATION PORTFOLIO (continued) Shares Value ------ ----- COMPUTER SOFTWARE -- 15.0% Compuware* ....................................... 300 $ 10,762 Corel* ........................................... 700 9,712 Delrina* ......................................... 700 8,663 MapInfo* ......................................... 500 12,688 Parametric Technology* ........................... 300 10,313 Synopsys* ........................................ 250 10,875 Viewlogic Systems* ............................... 600 11,025 ---------- 74,038 ---------- CONTRACT MANUFACTURING -- 4.9% Quickturn Design Systems* ........................ 1,000 13,563 Sanmina* ......................................... 400 11,000 ---------- 24,563 ---------- INFORMATION SERVICES -- 1.9% SunGard Data Systems* ............................ 250 9,563 ---------- NETWORKING -- 5.0% DSC Communications* .............................. 350 12,622 Standard Microsystems* ........................... 400 12,050 ---------- 24,672 ---------- SEMICONDUCTORS -- 15.9% Advanced Micro Devices* .......................... 430 10,696 Cypress Semiconductor* ........................... 500 11,562 Exar* ............................................ 500 12,125 Intergrated Device Technology* ................... 370 10,938 Linear Technology ................................ 200 9,875 Motorola ......................................... 200 11,575 Xilinx* .......................................... 200 11,825 ---------- 78,596 ---------- SEMICONDUCTOR CAPITAL EQUIPMENT -- 16.8% Applied Materials* ............................... 250 10,500 Cognex* .......................................... 500 13,062 Credence Systems* ................................ 400 9,150 Electroglas* ..................................... 300 10,050 FSI International* ............................... 400 10,850 Fusion Systems* .................................. 400 10,350 KLA Instruments* ................................. 200 9,825 Lam Research* .................................... 250 9,280 ---------- 83,067 ---------- Total Investments -- 68.1% (Cost $318,551) ....... 337,062 Other Assets Less Liabilities -- 31.9% ........... 157,559 ---------- Net Assets -- 100.0% ............................. $ 494,621 ========== - ---------- * Non-income producing security. See notes to financial statements. -22- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN FIXED INCOME SECURITIES PORTFOLIO
Principal Amount Value -------- ----- U.S. GOVERNMENT SECURITIES AND AGENCIES -- 61.1% U.S. GOVERNMENT SECURITIES -- 52.6% U.S. Treasury Bonds 8 7/8%, 2/15/2019 ........................... $ 900,000 $ 982,125 U.S. Treasury Notes 8 7/8%, 2/15/1996 ........................... 900,000 913,500 ---------- Total U.S. Government Securities (Cost $1,909,042) .............. 1,895,625 ---------- U.S. GOVERNMENT AGENCIES -- 8.5% (Cost $316,178) Government National Mortgage Association 10%, 12/15/2020++ ...... 291,287 306,671 ---------- Total U.S. Government Securities and Agencies (Cost $2,225,220) . 2,202,296 ---------- CORPORATE BONDS -- 19.9% Banco Nacional de Comercio Exterior 7 1/4%, 2/2/2004+ ........... 150,000 106,690 First USA Bank 5 3/4%, 1/15/1999 ................................ 100,000 90,435 General Motors Acceptance 5 5/8%, 2/1/1999 ...................... 150,000 134,234 News America Holdings 8 1/4%, 8/10/2018 ......................... 150,000 132,813 United Telecommunications 9 1/2%, 4/1/2003 ...................... 150,000 157,530 USX 9 1/8%, 1/15/2013 ........................................... 100,000 96,851 ---------- Total Corporate Bonds (Cost $789,010) ........................... 718,553 ---------- ASSET-BACKED SECURITIES -- 4.0% (Cost $145,752) Ford Credit Grantor Trust 7.30%, 10/15/1999++ ................... 145,874 144,794 ---------- REPURCHASE AGREEMENTS -- 8.3% (maturing 1/4/1995) (Cost $300,000) Lehman Government Securities, Inc., collateralized by: $300,000 U.S. Treasury Notes 7 3/4%, 3/31/1996, with a fair market value of $306,264 ......................... 300,000 300,000 ---------- Total Investments -- 93.3% (Cost $3,459,982) .................... 3,365,643 Other Assets Less Liabilities -- 6.7% ........................... 240,731 ---------- Net Assets -- 100.0% ............................................ $3,606,374 ==========
- ---------- +Rule 144A security. ++Investments in mortgage-backed and asset-backed securities are subject to principal paydowns. As a result of prepayments from refinancing or satisfaction of the underlying instruments, the average life may be less than the stated maturity. This in turn may impact the ultimate yield realized from these investments. See notes to financial statements. -23- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO Shares Value ------ ----- COMMON STOCKS -- 94.7% ADVERTISING -- 6.2% Dimac* ........................................... 400 $ 5,050 Heritage Media (Class A)* ........................ 200 5,375 ---------- 10,425 ---------- APPAREL -- 8.5% Cygne Designs* ................................... 300 4,050 Nautica Enterprises* ............................. 200 6,000 St. John Knits ................................... 150 4,294 ---------- 14,344 ---------- BROADCASTING -- 4.3% United Video Satellite Group (Class A) ........... 300 7,275 ---------- BUSINESS SERVICES -- 12.4% Interim Services* ................................ 200 4,913 Nu-Kote Holdings (Class A)* ...................... 230 5,951 SPS Transaction Services* ........................ 200 5,250 SunGard Data Systems ............................. 125 4,781 ---------- 20,895 ---------- CAPITAL GOODS -- 10.1% Cognex ........................................... 250 6,531 Dorsey Trailers* ................................. 400 5,975 Fusion Systems* .................................. 180 4,658 ---------- 17,164 ---------- CONSUMER GOODS -- 2.8% Duracraft* ....................................... 150 4,772 ---------- COMPUTER SOFTWARE -- 3.3% Viewlogic Systems* ............................... 300 5,512 ---------- DRUGS AND HEALTH CARE -- 2.8% Protein Design Labs* ............................. 300 4,744 ---------- ELECTRONICS -- 2.7% Oak Industries ................................... 200 4,575 ---------- FARM EQUIPMENT -- 4.0% AGCO ............................................. 225 6,834 ---------- FINANCIAL SERVICES -- 6.6% T. Rowe Price .................................... 175 5,228 Roosevelt Financial Group ........................ 400 5,975 ---------- 11,203 ---------- FOOD -- 2.5% Brothers Gourmet Coffees* ........................ 400 4,250 ---------- - ---------- * Non-income producing security. See notes to financial statements. -24- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN FRONTIER PORTFOLIO (continued) Shares Value ------ ----- LEISURE -- 3.4% Aldila* .......................................... 500 $ 5,719 ---------- MEDICAL PRODUCTS AND TECHNOLOGY -- 3.0% Patterson Dental* ................................ 250 5,094 ---------- RESTAURANTS --3.2% International House of Pancakes* ................. 200 5,425 ---------- RETAIL TRADE -- 3.2% Ernst Home Centers* .............................. 600 5,325 ---------- TECHNOLOGY -- 12.8% Electroglas* ..................................... 150 5,025 Electronics for Imaging* ......................... 200 5,475 Standard Microsystems* ........................... 200 6,025 Western Digital* ................................. 300 5,025 ---------- 21,550 ---------- UTILITIES -- 2.9% Trigen Energy .................................... 250 4,906 ---------- Total Investments -- 94.7% (Cost $150,952) ....... 160,012 Other Assets Less Liabilities -- 5.3% ............ 8,939 ---------- Net Assets -- 100.0% ............................. $ 168,951 ========== SELIGMAN HENDERSON GLOBAL PORTFOLIO Shares Value ------ ----- COMMON STOCKS -- 81.7% BANKING -- 10.4% ABN-AMRO Holdings (Netherlands) .................. 350 $ 12,171 Banco de Santander (Spain) ....................... 360 13,789 Banco de Santander Rights* (Spain) ............... 36 1,331 Banco Espanol de Credito* (Spain) ................ 132 883 Credito Italiano (Italy) ......................... 5,600 5,778 Credito Italiano Warrants* (Italy) ............... 800 180 C.S. Holdings (Switzerland) ...................... 15 6,417 Deutsche Bank (Germany) .......................... 37 17,174 Fuji Bank (Japan) ................................ 2,000 44,226 Lloyds Bank (UK) ................................. 740 6,399 Malayan Banking (Malaysia) ....................... 2,500 15,080 Siam Commercial Bank (Thailand) .................. 1,000 9,163 Sumitomo Trust and Banking (Japan) ............... 2,000 28,144 United Overseas Bank (Singapore) ................. 2,237 23,628 ---------- 184,363 ---------- - ---------- * Non-income producing security. See notes to financial statements. -25- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL PORTFOLIO (continued) Shares Value ------ ----- CHEMICALS -- 2.3% Akzo Nobel (Netherlands) ......................... 130 $ 15,024 Bayer A.G. (Germany) ............................. 60 13,906 Toyo Ink Manufacturing (Japan) ................... 2,000 12,926 ---------- 41,856 ---------- COMMERCIAL SERVICES -- 0.8% Kvaerner Industries (Norway) ..................... 300 13,572 ---------- CONSTRUCTION AND PROPERTY -- 5.3% City Developments (Singapore) .................... 3,400 19,006 Daiwa House Industry (Japan) ..................... 4,000 56,689 Grupo Tribasa (ADRs)* (Mexico) ................... 300 4,988 Hochtief (Germany) ............................... 10 6,036 LaFarge Coppee, SA (France) ...................... 101 7,191 ---------- 93,910 ---------- CONSUMER PRODUCTS -- 4.6% Cifra SA (Mexico) ................................ 4,000 8,287 CSK (Japan) ...................................... 1,000 32,566 Nestle (Switzerland) ............................. 20 19,053 Unilever (UK) .................................... 1,200 21,747 ---------- 81,653 ---------- DRUGS AND HEALTH CARE -- 0.5% Roche Holdings (Switzerland) ..................... 2 9,679 ---------- ELECTRONICS -- 7.9% Farnell Electronics (UK) ......................... 2,000 16,088 Nokia (Finland) .................................. 60 8,837 Pioneer Electronics (Japan) ...................... 2,000 48,246 Schneider (France) ............................... 150 9,949 Toshiba (Japan) .................................. 8,000 58,137 ---------- 141,257 ---------- Finance and Insurance -- 4.2% Assicurazioni Generali (Italy) ................... 375 8,823 AXA (France) ..................................... 251 11,635 Internationale Nederlanden Bank (Netherlands) .... 303 14,329 Legal & General Group (UK) ....................... 2,100 14,198 Muenchener Rueckversicherung (Germany) ........... 2 3,757 Skandia Forsakrings (Sweden) ..................... 700 12,116 Zurich Versicherung (Switzerland) ................ 10 9,511 ---------- 74,369 ---------- INDUSTRIAL GOODS AND SERVICES -- 2.8% BBC Brown Boverie (Switzerland) .................. 16 13,775 Bekaert (Belgium) ................................ 20 14,153 BTR (UK) ......................................... 4,900 22,507 BTR Warrants* (UK) ............................... 33 17 ---------- 50,452 ---------- - ---------- * Non-income producing security. See notes to financial statements. -26- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL PORTFOLIO (continued) Shares Value ------ ----- LEISURE AND HOTELS -- 1.3% Granada Group (UK) ............................... 2,800 $ 22,348 ---------- MANUFACTURING -- 7.7% Alcatel Alsthom (France) ......................... 61 5,212 Cia Acos Especiais Itabira (ADRs) (Brazil) ....... 75 2,039 Delta Group (UK) ................................. 1,700 11,653 FKI Babcock (UK) ................................. 6,000 13,991 Gadjah Tungal (Indonesia) ........................ 11,000 15,007 Michelin (Class B) (France) ...................... 250 9,102 TPI Polene (Thailand) ............................ 3,250 28,875 Yamaha (Japan) ................................... 4,000 51,060 ---------- 136,939 ---------- MEDIA -- 5.9% Elsevier (Netherlands) ........................... 1,750 18,267 News Corp. (Australia) ........................... 6,204 24,281 Nippon Television Network (Japan) ................ 110 26,425 Reuters Holdings (UK) ............................ 3,000 21,949 WPP Group (UK) ................................... 8,000 13,709 ---------- 104,631 ---------- METALS -- 1.1% Allusuisse-Lonza (Switzerland) ................... 22 11,008 NSK (Japan) ...................................... 1,000 7,941 ---------- 18,949 ---------- PACKAGING AND PAPER -- 2.4% Nippon Paper (Japan) ............................. 4,000 29,430 Stora Kopparbergs (Sweden) ....................... 210 12,672 ---------- 42,102 ---------- RESOURCES -- 4.6% British Petroleum (UK) ........................... 3,250 21,642 Broken Hill Proprietary (Australia) .............. 1,550 23,520 Repsol (Spain) ................................... 400 10,853 Societe Nationale ELF Aquitaine (France) ......... 230 16,200 YPF Sociedad Anonima (ADRs) (Argentina) .......... 400 8,550 ---------- 80,765 ---------- RETAILING -- 2.7% Carrefour Supermarche (France) ................... 45 18,651 Karstadt (Germany) ............................... 20 7,295 Tesco (UK) ....................................... 5,700 22,212 ---------- 48,158 ---------- TELECOMMUNICATIONS -- 5.6% Hong Kong Telecommunications (Hong Kong) ......... 7,800 14,868 Nippon Telegraph & Telephone (Japan) ............. 6 53,131 Syarikat Telecom Malaysia (Malaysia) ............. 1,000 6,776 Tele Danmark (ADRs) (Denmark) .................... 280 14,226 - ---------- * Non-income producing security. See notes to financial statements. -27- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL PORTFOLIO (continued) Shares or Principal Amount Value ------ ----- TELECOMMUNICATIONS (continued) Telefonica de Espana (Spain) ..................... 500shs. $ 5,909 Telefonos de Mexico, S.A. (ADRs) (Mexico) ........ 100 4,100 ---------- 99,010 ---------- TEXTILES -- 4.0% Mitsubishi Rayon (Japan) ......................... 13,000 55,795 Tuntex Distinct (Global Depository Receipts)* (Taiwan) ....................................... 1,200 15,900 ---------- 71,695 ---------- TOBACCO -- 1.2% B.A.T. Industries (UK) ........................... 3,100 20,934 ---------- TRANSPORTATION -- 5.8% East Japan Railways (Japan) ...................... 11 55,061 Lufthansa (Germany) .............................. 100 12,492 Perusahaan Otomobil Nasional (Malaysia) .......... 3,000 10,928 Swire Pacific (Hong Kong) ........................ 4,000 24,916 ---------- 103,397 ---------- UTILITIES -- 0.6% Cie Generale des Eaux (France) ................... 114 11,086 ---------- Total Common Stocks (Cost $1,426,163) ............ 1,451,125 ---------- CONVERTIBLE SECURITIES -- 1.0% Convertible Bonds -- 1.0% (Cost $19,765) ELECTRONICS -- 1.0% Daewoo Electric (Korea) Zero Coupon Bond due 12/31/2004* ................................ $ 25,000 17,375 Total Investments -- 82.7% (Cost $1,445,928) ..... 1,468,500 Other Assets Less Liabilities -- 17.3% ........... 307,805 ---------- Net Assets -- 100.0% ............................. $1,776,305 ========== SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO Shares Value ------ ----- COMMON STOCKS -- 109.0% ADVERTISING -- 3.4% Heritage Media (Class A)* (US) ................... 165 $ 4,434 ---------- BUSINESS SERVICES -- 8.9% BISYS Group* (US) ................................ 190 4,180 Nu-Kote Holdings (Class A)* (US) ................. 145 3,752 SunGard Data Systems* (US) ....................... 100 3,825 ---------- 11,757 ---------- - ---------- * Non-income producing security. See notes to financial statements. -28- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ------ ----- CONSTRUCTION AND PROPERTY -- 8.1% Danske Traelastkompagni (Denmark) ................ 70 $ 5,568 Polypipe (UK) .................................... 2,500 5,164 ---------- 10,732 ---------- CONSUMER GOODS AND SERVICES -- 13.2% Birkby (UK) ...................................... 1,500 5,000 DeVRY (US) ....................................... 125 3,859 Duracraft* (US) .................................. 120 3,818 Rentsch, Walter (Switzerland) .................... 30 4,652 ---------- 17,329 ---------- COMPUTER HARDWARE/PERIPHERALS -- 3.5% Electronics for Imaging* (US) .................... 170 4,654 ---------- DRUGS AND HEALTH CARE -- 2.6% Protein Design Labs* (US) ........................ 215 3,400 ---------- FARM EQUIPMENT -- 3.8% AGCO (US) ........................................ 165 5,012 ---------- FINANCIAL SERVICES -- 3.2% T. Rowe Price (US) ............................... 140 4,183 ---------- LEISURE --3.3% Aldila* (US) ..................................... 375 4,289 ---------- MANUFACTURING -- 14.8% Equipements et Composants pour l'Industrie Automobile (France) ............................ 40 5,202 Kalmar Industries* (Sweden) ...................... 400 4,526 Tsudakoma (Japan) ................................ 1,000 9,729 ---------- 19,457 ---------- MEDIA -- 3.2% United Video Satellite Group (Class A) (US) ...... 175 4,244 ---------- MEDICAL PRODUCTS AND TECHNOLOGY -- 6.7% Life Sciences (UK) ............................... 2,500 5,204 Sullivan Dental Products* (US) ................... 270 3,645 ---------- 8,849 ---------- METALS -- 5.7% Nakayama Steel Works (Japan) ..................... 1,000 7,488 ---------- OIL SERVICES -- 3.0% Coflexip (ADRs)* (France) ........................ 170 3,931 ---------- PRINTING -- 4.0% Wace Group (UK) .................................. 1,400 5,258 ---------- - ---------- * Non-income producing security. See notes to financial statements. -29- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN HENDERSON GLOBAL SMALLER COMPANIES PORTFOLIO (continued) Shares Value ------ ----- RESTAURANTS -- 3.0% International House of Pancakes* (US) ............ 145 $ 3,933 ---------- RETAILING -- 3.9% Adelsten (Norway) ................................ 30 5,100 ---------- TECHNOLOGY -- 14.7% Credence Systems* (US) ........................... 170 3,889 FSI International* (US) .......................... 150 4,069 PRI Automation* (US) ............................. 230 3,709 Sanmina* (US) .................................... 140 3,850 Western Digital* (US) ............................ 230 3,853 ---------- 19,370 ---------- Total Investments -- 109.0% (Cost $139,375) ...... 143,420 Other Assets Less Liabilities -- (9.0)% .......... (11,910) ---------- Net Assets -- 100.0% ............................. $131,510 ========== SELIGMAN INCOME PORTFOLIO Shares Value ------ ----- CONVERTIBLE SECURITIES -- 52.8% CONVERTIBLE PREFERRED STOCKS -- 15.5% BANKING AND FINANCE -- 2.0% Alexander & Alexander (Series A) $3.625+ ......... 1,500 $ 60,000 Chemical Banking $5 .............................. 2,000 137,750 ---------- 197,750 ---------- FOOD -- 2.6% ConAgra (Series E) $1.6875 ....................... 8,000 262,000 ---------- MINERALS -- 2.4% Freeport-McMoRan $4.375+ ......................... 5,000 238,750 ---------- RETAILING -- 0.8% TJX Companies $3.125 ............................. 2,000 77,500 ---------- TRANSPORTATION -- 6.9% Consolidated Freightways $1.54 ................... 10,000 223,750 GATX $3.875 ...................................... 5,000 270,000 Sea Containers 8% ................................ 5,000 203,125 ---------- 696,875 ---------- - ---------- * Non-income producing security. + Rule 144A security. See notes to financial statements. -30- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO (continued) Shares or Principal Amount Value --------- ----- MISCELLANEOUS -- 0.8% Corning 6% ....................................... 1,700shs. $ 79,475 ---------- Total Convertible Preferred Stocks (Cost $1,587,768) 1,552,350 ---------- SUBORDINATED CONVERTIBLE BONDS -- 37.3% AUTOMOTIVE -- 2.0% Arvin Industries 7 1/2%, 9/30/2014 ............... $200,000 196,750 ---------- BANKING AND FINANCE -- 2.2% Bank of Boston 7 3/4%, 6/15/2011 ................. 200,000 224,000 ---------- DRUGS AND HEALTH CARE -- 1.5% Pharmaceutical Marketing Services 6 1/4%, 2/1/2003+ 235,000 156,275 ---------- ELECTRONICS -- 10.2% Micropolis 6%, 3/15/2012 ......................... 350,000 223,125 Network Equipment 7 1/4%, 5/15/2014 .............. 300,000 272,625 Quantum 6 3/8%, 4/1/2002 ......................... 250,000 241,875 Seagate Technology 6 3/4%, 5/1/2012 .............. 350,000 289,187 ---------- 1,026,812 ---------- ENERGY -- 5.3% Kelley Oil & Gas 8 1/2%, 4/1/2000 ................ 285,000 236,194 Santa Fe Pipelines 10.418%, 8/15/2010 ............ 250,000 296,250 ---------- 532,444 ---------- ENTERTAINMENT/PUBLISHING -- 1.3% Time Warner 8 3/4%, 1/10/2015 .................... 140,000 131,950 ---------- ENVIRONMENTAL SERVICES -- 2.0% USA Waste Services 8 1/2%, 10/15/2002 ............ 200,000 200,750 ---------- INSURANCE -- 2.0% Trenwick Group 6%, 12/15/1999 .................... 200,000 199,000 ---------- RETAILING -- 1.8% CML Group 5 1/2%, 1/15/2003 ...................... 250,000 180,000 ---------- TELECOMMUNICATIONS -- 5.2% Bay Networks 5 1/4%, 5/15/2003+ .................. 100,000 75,750 Century Telephone 6%, 2/1/2007+ .................. 150,000 177,375 Compania de Telefonos de Chile S.A. 4 1/2%, 1/15/2003 250,000 267,813 ---------- 520,938 ---------- TEXTILES-- 2.9% Unifi 6%, 3/15/2002 .............................. 300,000 292,125 ---------- - ---------- + Rule 144A security. See notes to financial statements. -31- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Portfolios of Investments (continued) - -------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO (continued) Principal Amount or Shares Value --------- ----- TRANSPORTATION -- 0.9% Airborne Freight 6 3/4%, 8/15/2001 ............... $100,000 $ 91,500 ---------- Total Subordinated Convertible Bonds (Cost $3,688,832) .............................. 3,752,544 ---------- Total Convertible Securities (Cost $5,276,600) ... 5,304,894 ---------- CORPORATE BONDS -- 16.2% AUTOMOTIVE -- 6.2% Chrysler Financial 6 1/2%, 6/15/1998 ............. 200,000 187,983 Ford Motor Credit 6 3/4%, 8/15/2008 .............. 250,000 211,301 General Motors Acceptance 5 5/8%, 2/1/1999 ....... 250,000 223,723 ---------- 623,007 ---------- BANKING AND FINANCE -- 3.7% Banco Nacional de Comercio Exterior 7 1/4%, 2/2/2004+ ...................................... 250,000 177,816 First USA Bank 5 3/4%, 1/15/1999 ................. 100,000 90,435 NationsBank 9 1/8%, 10/15/2001 ................... 100,000 102,897 ---------- 371,148 ---------- TELECOMMUNICATIONS -- 3.7% United Telecommunications 9 1/2%, 4/1/2003 ....... 350,000 367,571 ---------- MISCELLANEOUS -- 2.6% Tenneco Credit 9 5/8%, 8/15/2001 ................. 250,000 262,960 ---------- Total Corporate Bonds (Cost $1,814,664) .......... 1,624,686 ---------- COMMON STOCKS -- 13.5% CHEMICALS -- 2.3% Dow Chemical ..................................... 3,500shs. 235,375 ---------- ELECTRIC UTILITIES -- 5.6% CINergy .......................................... 9,718 227,158 Dominion Resources ............................... 3,000 107,250 New England Electric ............................. 3,000 96,375 Unicom ........................................... 5,304 127,296 ---------- 558,079 ---------- GAS UTILITIES -- 0.9% Atlanta Gas & Light .............................. 3,000 90,000 ---------- RETAILING -- 0.4% K Mart ........................................... 3,200 41,600 ---------- STEEL -- 1.9% Inland Steel Industries .......................... 5,406 189,886 ---------- TRANSPORTATION -- 0.5% NFC .............................................. 20,000 53,523 ---------- - ---------- + Rule 144A security. See notes to financial statements. -32- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- December 31, 1994 - -------------------------------------------------------------------------------- SELIGMAN INCOME PORTFOLIO (continued)
Shares or Principal Amount Value --------- ----- MISCELLANEOUS -- 1.9% Ogden ............................................................... 10,000shs. $ 187,500 Total Common Stocks (Cost $1,286,557) ............................... 1,355,963 U.S. GOVERNMENT SECURITIES -- 4.9% (Cost $505,839) U. S. Treasury Notes 7 1/4%, 11/15/1996 ............................. $ 500,000 496,250 ----------- REPURCHASE AGREEMENT -- 10.4% (maturing 1/4/1995) (Cost $1,050,000) Lehman Government Securities, Inc., collateralized by: $1,055,000 U.S. Treasury Notes 7 1/4%, 8/31/1996, with a fair market value of $1,073,596 ........................... 1,050,000 1,050,000 ----------- Total Investments -- 97.8% (Cost $9,933,660) ........................ 9,831,793 Other Assets Less Liabilities -- 2.2% ............................... 218,484 ----------- Net Assets -- 100.0% ................................................ $10,050,277 ===========
- ---------- See notes to financial statements. -33- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Statements of Assets and Liabilities December 31, 1994 - --------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman ASSETS: Seligman Cash Common Communications Fixed Income Investments, at value (see Capital Management Stock and Information Securities portfolios of investments): Portfolio Portfolio Portfolio Portfolio Portfolio ----------- ------------ ------------- ----------------- -------------- Common Stocks $5,675,096 $ -- $17,454,695 $337,062 $ -- Convertible Securities -- -- 2,045,656 -- -- U.S. Government Securities and Agencies -- 1,587,551 -- -- 2,202,296 Corporate Bonds -- -- -- -- 718,553 Asset-backed Security -- -- -- -- 144,794 Commercial Paper -- 1,113,470 -- -- -- Repurchase Agreements -- 300,000 500,000 -- 300,000 Bankers' Acceptances -- 142,629 -- -- -- ---------- ---------- ----------- -------- ---------- Total Investments 5,675,096 3,143,650 20,000,351 337,062 3,365,643 Cash 275,547 92,198 153,467 158,000 172,283 Receivable from associated companies 6,241 1,831 -- 11,628 711 Interest and dividends receivable 3,910 177 85,274 -- 86,703 Receivable for Capital Stock sold -- 7,000 -- -- -- Receivable for securities sold -- -- -- -- -- ---------- ---------- ----------- -------- ---------- Total Assets 5,960,794 3,244,856 20,239,092 506,690 3,625,340 ---------- ---------- ----------- -------- ---------- LIABILITIES: Payable for Capital Stock repurchased 1,482 100 49,038 -- 2,838 Payable for securities purchased -- -- -- -- -- Accrued expenses, taxes, and other 16,938 14,915 22,481 12,069 16,128 ---------- ---------- ----------- -------- ---------- Total Liabilities 18,420 15,015 71,519 12,069 18,966 ---------- ---------- ----------- -------- ---------- NET ASSETS $5,942,374 $3,229,841 $20,167,573 $494,621 $3,606,374 ========== ========== =========== ======== ========== COMPOSITION OF NET ASSETS: Capital Stock, at par $ 468 $ 3,230 $ 1,463 $ 47 $ 389 Additional paid-in capital 5,501,065 3,227,005 15,468,970 476,063 3,784,132 Dividends in excess of net investment income (2,777) -- (2,777) -- (2,777) Accumulated net realized gain (loss) -- (394) -- -- (81,031) Net unrealized appreciation/ depreciation of investments 443,618 -- 4,699,957 18,511 (94,339) Net unrealized appreciation/ depreciation on translation of assets and liabilities denominated in foreign currencies -- -- (40) -- -- ---------- ---------- ----------- -------- ---------- NET ASSETS $5,942,374 $3,229,841 $20,167,573 $494,621 $3,606,374 ========== ========== =========== ======== ========== Shares of Capital Stock ($.001 par value) outstanding: 467,918 3,230,235 1,463,060 47,368 389,066 ========== ========== =========== ======== ========== Net Asset Value per share $ 12.70 $ 1.00 $ 13.78 $ 10.44 $ 9.27 ========== ========== =========== ======== ==========
- ---------- See notes to financial statements. -34- - -------------------------------------------------------------------------------- Statements of Assets and Liabilities December 31, 1994 - --------------------------------------------------------------------------------
Seligman Seligman Henderson ASSETS: Seligman Henderson Global Smaller Seligman Investments, at value (see Frontier Global Companies Income portfolios of investments): Portfolio Portfolio Portfolio Portfolio ------------- ------------- ------------------- ----------- Common Stocks $160,012 $1,451,125 $143,420 $ 1,355,963 Convertible Securities -- 17,375 -- 5,304,894 U.S. Government Securities and Agencies -- -- -- 496,250 Corporate Bonds -- -- -- 1,624,686 Asset-backed Security -- -- -- -- Commercial Paper -- -- -- -- Repurchase Agreements -- -- -- 1,050,000 Bankers' Acceptances -- -- -- -- --------- --------- -------- ---------- Total Investments 160,012 1,468,500 143,420 9,831,793 Cash 9,045 343,968 53,838 111,610 Receivable from associated companies 11,509 4,735 11,328 1,076 Interest and dividends receivable 37 1,119 74 140,826 Receivable for Capital Stock sold -- -- -- -- Receivable for securities sold -- 14,819 -- -- --------- --------- -------- ---------- Total Assets 180,603 1,833,141 208,660 10,085,305 --------- --------- -------- ---------- LIABILITIES: Payable for Capital Stock repurchased -- -- -- 16,535 Payable for securities purchased -- 41,178 65,624 -- Accrued expenses, taxes, and other 11,652 15,658 11,526 18,493 -------- --------- -------- ---------- Total Liabilities 11,652 56,836 77,150 35,028 -------- --------- -------- ---------- NET ASSETS $168,951 $1,776,305 $131,510 $10,050,277 ======== ========= ======== ========== COMPOSITION OF NET ASSETS: Capital Stock, at par $ 16 $ 157 $ 13 $ 1,008 Additional paid-in capital 159,875 1,752,568 127,645 10,173,046 Dividends in excess of net investment income -- (1,354) -- (2,777) Accumulated net realized gain (loss) -- -- -- (19,113) Net unrealized appreciation/ depreciation of investments 9,060 (2,780) 3,279 (101,867) Net unrealized appreciation/ depreciation on translation of assets and liabilities denominated in foreign currencies -- 27,714 573 (20) -------- --------- -------- ---------- NET ASSETS $168,951 $1,776,305 $131,510 $10,050,277 ======== ========= ======== ========== Shares of Capital Stock ($.001 par value) outstanding: 15,970 156,688 12,754 1,007,576 ======== ========= ======== ========== Net Asset Value per share $ 10.58 $ 11.34 $ 10.31 $ 9.97 ======== ========= ======== ==========
- ---------- See notes to financial statements. -35- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Statements of Operations For the year ended December 31, 1994 - --------------------------------------------------------------------------------
Seligman Seligman Seligman Seligman Seligman Cash Common Communications Fixed Income Capital Management Stock and Information Securities Portfolio Portfolio Portfolio Portfolio* Portfolio -------- ----------- -------- ----------- --------- Investment income: Dividends** $ 37,864 $ -- $ 514,207 $ -- $ -- Interest 2,796 127,857 127,684 -- 200,991 --------- -------- --------- ------- --------- Total investment income 40,660 127,857 641,891 -- 200,991 --------- -------- --------- ------- --------- Expenses: Management fee 23,120 12,837 84,124 349 14,043 Auditing fee 15,512 15,512 15,512 7,000 15,512 Legal fee 6,609 11,060 14,620 2,551 6,609 Directors' fees and expenses 3,636 3,636 3,636 -- 3,636 Shareholder reports and communications 2,044 2,044 2,044 726 2,044 Registration 1,153 1,103 1,028 164 1,028 Custody and related services 661 244 4,759 400 489 Miscellaneous 2,711 1,175 5,671 879 2,581 --------- -------- --------- ------- --------- Total expenses before reimbursement 55,446 47,611 131,394 12,069 45,942 Reimbursement of expenses (20,761) (47,611) (5,204) (11,627) (24,851) --------- -------- --------- ------- --------- Total expenses after reimbursement 34,685 -- 126,190 442 21,091 --------- -------- --------- ------- --------- Net investment income (loss) 5,975 127,857 515,701 (442) 179,900 --------- -------- --------- ------- --------- Net realized and unrealized gain (loss) on investments and foreign currency transactions: Net realized gain (loss) on investments 642,271 (240) 1,108,365 -- (81,031) Net realized gain (loss) from foreign currency transactions -- -- 20 -- -- Net change in unrealized appreciation/ depreciation of investments (912,365) -- (1,604,789) 18,511 (225,410) Net change in unrealized appreciation/ depreciation on translation of assets and liabilities denominated in foreign currencies -- -- (40) -- -- --------- -------- --------- ------- --------- Net gain (loss) on investments and foreign currency transactions (270,094) (240) (496,444) 18,511 (306,441) --------- -------- --------- ------- --------- Increase (decrease) in net assets from operations $(264,119) $127,617 $ 19,257 $18,069 $(126,541) ========= ======== ========= ======= ========= - ---------- * For the period October 11, 1994, (commencement of operations) to December 31, 1994. ** Net of foreign tax withheld as follows: $ 236 $ -- $ 5,345 $ -- $ -- See notes to financial statements.
-36- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Statements of Operations (continued) For the year ended December 31, 1994 - --------------------------------------------------------------------------------
Seligman Seligman Henderson Seligman Henderson Global Smaller Seligman Frontier Global Companies Income Portfolio* Portfolio Portfolio* Portfolio --------- ----------- --------- ----------- Investment income: Dividends** $ 37 $12,229 $ 22 $ 231,024 Interest -- 14,855 693 512,207 ------- ------- ------- --------- Total investment income 37 27,084 715 743,231 ------- ------- ------- --------- Expenses: Management fee 99 11,417 159 42,854 Auditing fee 7,000 13,512 7,000 15,512 Legal fee 2,551 6,609 2,551 11,950 Directors' fees and expenses -- 3,611 -- 3,636 Shareholder reports and communications 726 1,117 726 2,044 Registration 55 1,412 44 1,028 Custody and related services 400 19,221 400 981 Miscellaneous 821 12,953 805 4,333 ------- ------- ------- --------- Total expenses before reimbursement 11,652 69,852 11,685 82,338 Reimbursement of expenses (11,509) (56,165) (11,487) (18,064) ------- ------- ------- --------- Total expenses after reimbursement 143 13,687 198 64,274 ------- ------- ------- --------- Net investment income (loss) (106) 13,397 517 678,957 ------- ------- ------- --------- Net realized and unrealized gain (loss) on investments and foreign currency transactions: Net realized gain (loss) on investments -- 9,138 -- (19,113) Net realized gain (loss) from foreign currency transactions -- 3,259 (58) 10 Net change in unrealized appreciation/ depreciation of investments 9,060 (44,914) 3,279 (1,298,035) Net change in unrealized appreciation/ depreciation on translation of assets and liabilities denominated in foreign currencies -- 29,924 573 (20) ------- ------- ------- ---------- Net gain (loss) on investments and foreign currency transactions 9,060 (2,593) 3,794 (1,317,158) ------- ------- ------- ---------- Increase (decrease) in net assets from operations $ 8,954 $10,804 $ 4,311 $ (638,201) ======= ======= ======= ========== - ----------- * For the period October 11, 1994, (commencement of operations) to December 31, 1994. ** Net of foreign tax withheld as follows: $ -- $ 1,102 $ -- $ 184 See notes to financial statements.
-37- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Seligman Seligman Seligman Capital Portfolio Cash Management Portfolio Common Stock Portfolio ---------------------- ------------------------- ----------------------- Year ended December 31 Year ended December 31 Year ended December 31 ---------------------- ------------------------- ----------------------- 1994 1993 1994 1993 1994 1993 -------- -------- -------- -------- -------- -------- Operations: Net investment income $ 5,975 $ 4,835 $ 127,857 $ 105,206 $ 515,701 $ 489,260 Net realized gain (loss) on investments 642,271 1,230,974 (240) -- 1,108,365 2,624,623 Net realized gain (loss) from foreign currency transactions -- -- -- -- 20 -- Net change in unrealized appreciation of investments (912,365) (618,489) -- -- (1,604,789) (500,444) Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies -- -- -- -- (40) -- ---------- ---------- ---------- ---------- ----------- ----------- Increase (decrease) in net assets from operations (264,119) 617,320 127,617 105,206 19,257 2,613,439 ---------- ---------- ---------- ---------- ----------- ----------- Distributions to shareholders: Net investment income (7,465) (6,530) (127,857) (105,206) (517,958) (494,022) Realized gain on investments (641,977) (1,230,686) -- -- (1,108,564) (2,629,351) ---------- ---------- ---------- ---------- ----------- ----------- Decrease in net assets from distributions (649,442) (1,237,216) (127,857) (105,206) (1,626,522) (3,123,373) ---------- ---------- ---------- ---------- ----------- ----------- Capital share transactions: Net proceeds from sale of shares 3,619,176 2,019,707 2,322,638 1,718,990 9,040,524 3,925,915 Investment of dividends 7,465 6,530 127,857 105,206 517,958 494,022 Shares issued in payment of gain distributions 641,977 1,230,686 -- -- 1,108,564 2,629,351 ---------- ---------- ---------- ---------- ----------- ----------- Total 4,268,618 3,256,923 2,450,495 1,824,196 10,667,046 7,049,288 ---------- ---------- ---------- ---------- ----------- ----------- Cost of shares repurchased (3,298,449) (2,248,670) (2,322,134) (2,952,298) (10,753,287) (9,665,140) ---------- ---------- ---------- ---------- ----------- ----------- Increase (decrease) in net assets from capital share transactions 970,169 1,008,253 128,361 (1,128,102) (86,241) (2,615,852) ---------- ---------- ---------- ---------- ----------- ----------- Increase (decrease) in net assets 56,608 388,357 128,121 (1,128,102) (1,693,506) (3,125,786) Net Assets: Beginning of period 5,885,766 5,497,409 3,101,720 4,229,822 21,861,079 24,986,865 ---------- ---------- ---------- ---------- ----------- ----------- End of period $5,942,374 $5,885,766 $3,229,841 $3,101,720 $20,167,573 $21,861,079 ========== ========== ========== ========== =========== ===========
- ---------- * Commencement of operations. See notes to financial statements. -38- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Statements of Changes in Net Assets (continued) - --------------------------------------------------------------------------------
Seligman Seligman Seligman Communications and Fixed Income Seligman Henderson Information Portfolio Securities Portfolio Frontier Portfolio Global Portfolio ---------------------- ---------------------- ---------------------- ------------------ Year ended December 31 10/11/94* to --------------------- 10/11/94* to Year ended 5/3/93* to 12/31/94 1994 1993 12/31/94 12/31/94 12/31/93 -------- -------- -------- -------- -------- -------- Operations: Net investment income $ (442) $ 179,900 $ 232,876 $ (106) $ 13,397 $ 2,140 Net realized gain (loss) on investments -- (81,031) 229,048 -- 9,138 939 Net realized gain (loss) from foreign currency transactions -- -- -- -- 3,259 (589) Net change in unrealized appreciation of investments 18,511 (225,410) (117,262) 9,060 (44,914) 42,134 Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies -- -- -- -- 29,924 (2,210) -------- ---------- ----------- --------- ---------- --------- Increase (decrease) in net assets from operations 18,069 (126,541) 344,662 8,954 10,804 42,414 -------- ---------- ----------- --------- ---------- --------- Distributions to shareholders: Net investment income -- (181,555) (233,219) -- (9,661) (3,005) Realized gain on investments -- -- (227,642) -- (17,511) (964) -------- ---------- ----------- --------- ---------- --------- Decrease in net assets from distributions -- (181,555) (460,861) -- (27,172) (3,969) -------- ---------- ----------- --------- ---------- --------- Capital share transactions: Net proceeds from sale of shares 476,552 2,264,201 1,396,663 159,997 1,317,845 607,754 Investment of dividends -- 181,555 233,219 -- 9,661 3,005 Shares issued in payment of gain distributions -- -- 227,642 -- 17,511 964 -------- ---------- ----------- --------- ---------- --------- Total 476,552 2,445,756 1,857,524 159,997 1,345,017 611,723 -------- ---------- ----------- --------- ---------- --------- Cost of shares repurchased -- (2,306,325) (2,716,463) -- (200,626) (1,886) -------- --------- --------- -------- --------- -------- Increase (decrease) in net assets from capital share transactions 476,552 139,431 (858,939) 159,997 1,144,391 609,837 -------- ---------- ----------- --------- ---------- --------- Increase (decrease) in net assets 494,621 (168,665) (975,138) 168,951 1,128,023 648,282 Net Assets: Beginning of period -- 3,775,039 4,750,177 -- 648,282 -- -------- ---------- ----------- --------- ---------- --------- End of period $494,621 $3,606,374 $3,775,039 $ 168,951 $1,776,305 $ 648,282 ======== ========== ========== ========= ========== =========
-39- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Statements of Changes in Net Assets (continued) - --------------------------------------------------------------------------------
Seligman Henderson Global Smaller Seligman Companies Portfolio Income Portfolio --------------------- ----------------------- Year ended December 31 10/11/94* to --------------------- 12/31/94 1994 1993 --------- -------- -------- Operations: Net investment income $ 517 $ 678,957 $ 728,986 Net realized gain (loss) on investments -- (19,113) 517,657 Net realized gain from foreign currency transactions (58) 10 -- Net change in unrealized appreciation of investments 3,279 (1,298,035) 80,007 Net change in unrealized appreciation/depreciation on translation of assets and liabilities denominated in foreign currencies 573 (20) -- -------- ----------- ----------- Increase (decrease) in net assets from operations 4,311 (638,201) 1,326,650 -------- ----------- ----------- Distributions to shareholders: Net investment income (537) (685,315) (730,447) Realized gain on investments -- -- (516,959) -------- ----------- ----------- Decrease in net assets from distributions (537) (685,315) (1,247,406) -------- ----------- ----------- Capital share transactions: Net proceeds from sale of shares 127,199 4,595,781 2,983,739 Investment of dividends 537 685,315 730,447 Shares issued in payment of gain distributions -- -- 516,959 -------- ----------- ----------- Total 127,736 5,281,096 4,231,145 -------- ----------- ----------- Cost of shares repurchased -- (5,127,246) (4,453,579) -------- ----------- ----------- Increase (decrease) in net assets from capital share transactions 127,736 153,850 (222,434) -------- ----------- ----------- Increase (decrease) in net assets 131,510 (1,169,666) (143,190) Net Assets: Beginning of period -- 11,219,943 11,363,133 -------- ----------- ----------- End of period $131,510 $10,050,277 $11,219,943 ======== =========== ===========
* Commencement of operations. See notes to financial statements. -40- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements - -------------------------------------------------------------------------------- 1. Seligman Portfolios, Inc. (the "Fund") is an open-end diversified management investment company consisting of nine separate portfolios (the "Portfolios"), "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 Fixed Income Securities Portfolio" ("Fixed Income Securities Portfolio"), "Seligman Frontier Portfolio" ("Frontier Portfolio"), "Seligman Henderson Global Portfolio" ("Global Portfolio"), "Seligman Henderson Global Smaller Companies Portfolio" ("Global Smaller Companies Portfolio", formerly "Seligman Henderson Global Emerging Companies 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") established by Canada Life Insurance Company of America ("Canada Life"). CLVA-2 is registered as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act") and funds variable annuity contracts (the "CLVA-2 Contracts") issued by Canada Life and distributed by Seligman Financial Services, Inc. Shares of the Fund are also expected to be provided as the investment medium for other variable annuity accounts to be established by Canada Life or its affiliates ("Canada Life Separate Accounts"). Shares of the Fund (except Communications and Information Portfolio, Frontier Portfolio, Global Portfolio and Global Smaller Companies Portfolio) are also provided as the investment medium for Seligman Mutual Benefit Plan (the "Mutual Benefit Plan") established by MBLLife Assurance Corporation ("MBL Life"). Significant accounting policies followed, all in conformity with generally accepted accounting principles, are given below: a. Investments in U.S. Government securities, bonds, convertible securities, and stocks are valued at the most current market values or, in their absence, at fair market value 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, a 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. The Portfolios may invest up to 10% of their total assets in foreign securities (except Global Portfolio and Global Smaller Companies 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 U.S. dollar-denominated American Depository Receipts ("ADRs"), American Depository Shares ("ADSs"), and European Depository Receipts ("EDRs"). 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 are receipts similar to ADRs and ADSs and are issued and traded in Europe. The books and records of the Portfolios are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis: (i) market value of investment securities, other assets and liabilities, at the closing 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 Portfolios' net asset values per share 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 U.S. dollar and other currencies is determined by the forces of supply and demand in the foreign exchange markets. Net realized foreign exchange gains (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 the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Portfolios' books, and the U.S. 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. The Global Portfolio and Global Smaller Companies 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 -41- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements (continued) - -------------------------------------------------------------------------------- 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. 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. 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. The Portfolios may enter into repurchase agreements with commercial banks and with broker/dealers deemed to be creditworthy by 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. f. 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. g. 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. 2. Until April 15, 1993, the Fund functioned exclusively as the investment vehicle for the separate account options of the Mutual Benefit Plan issued by MBL Life. On July 16, 1991, the Superior Court of New Jersey (the "Court") entered an Order (the "Order") appointing the New Jersey Insurance Commissioner as Rehabilitator of Mutual Benefit Life Insurance Company in Rehabilitation ("Mutual Benefit Life"). The Commissioner was granted immediate exclusive possession and control of, and title to, the business and assets of Mutual Benefit Life, including the assets and liabilities of the Mutual Benefit Plan. The Commissioner was empowered by the Order to take such steps as he deemed appropriate to remove the cause and conditions that made rehabilitation necessary. On January 15, 1993, the Commissioner filed the First Amended Plan of Rehabilitation (the "Plan of Rehabilitation") with the Court. On August 12, 1993, the Court rendered an opinion approving the Plan of Rehabilitation with certain modifications. Two subsequent amendments to the Plan of Rehabilitation were filed with and approved by the Court. None of the modifications or amendments to the Plan of Rehabilitation affected the status of the Mutual Benefit Plan. On November 10, 1993, the Court issued an Order of Confirmation which provided for implementation of the Plan of Rehabilitation. On April 29, 1994, the Plan of Rehabilitation was implemented. Substantially all of the assets and liabilities of Mutual Benefit Life were transferred to MBL Life. In addition, the assets and liabilities of the Mutual Benefit Plan were transferred to a separate account of MBL Life. As a separate account, the assets and liabilities of the Mutual Benefit Plan are maintained separate and apart from MBL Life's other assets and liabilities. Also, as of April 29, 1994, the ownership of the stock of MBLLife was transferred to a Trust. The Commissioner is the sole Trustee of the Trust. 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 the Fixed Accumulation Account from the Plan will not be accepted. The ultimate impact of this decision on the level of the Plan's assets cannot currently be determined. However, the impact is not expected to be material. -42- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 3. Purchases and sales of portfolio securities, excluding short-term investments, for the period ended December 31, 1994, were as follows: Portfolio Purchases Sales -------- --------- ----- Capital $4,213,379 $3,782,920 Common Stock 3,165,571 4,721,029 Communications and Information 318,551 -- Fixed Income Securities 8,018,964 8,247,758 Frontier 150,952 -- Global 1,449,079 396,656 Global Smaller Companies 139,375 -- Income 2,940,045 3,644,423 Identified cost of investments sold is used for both financial statement and federal income tax purposes. At December 31, 1994, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes, and the tax basis gross unrealized appreciation and depreciation of portfolio securities, including the effects of foreign currency transactions, were as follows: Unrealized Unrealized Portfolio Appreciation Depreciation -------- ------------ ----------- Capital $ 990,937 $547,319 Common Stock 5,301,355 601,398 Communications and Information 22,640 4,129 Fixed Income Securities 4,044 98,383 Frontier 11,980 2,920 Global 67,473 44,901 Global Smaller Companies 5,311 1,266 Income 617,629 719,496 At December 31, 1994, the Cash Management Portfolio, the Fixed Income Securities Portfolio and the Income Portfolio incurred net capital loss carryforwards of $394, $81,031 and $19,113, respectively, which are available for offset against future taxable net gains. These net capital loss carryforwards will expire in varying amounts through 2002. 4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of the Fund and provides the necessary personnel and facilities, exclusive of and in addition to those retained by the Fund. 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 Manager. The Manager's fee is calculated daily and payable monthly, equal to 0.40%, on an annual basis, of Capital Portfolio's, Cash Management Portfolio's, Common Stock Portfolio's, Fixed Income Securities Portfolio's, and Income Portfolio's daily net assets and equal to 0.75%, on an annual basis of Communications and Information Portfolio's, and Frontier Portfolio's daily net assets. The Manager's fee from the Global Portfolio and the Global Smaller Companies Portfolio is calculated daily and payable monthly, equal to an annual rate of 1.00% of the average daily net assets of each Portfolio, of which 0.90% is paid to Seligman Henderson Co. (the "Subadviser"), a 50% owned affiliate of the Manager. The Manager or Subadviser 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 Cash Management Portfolio). 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. For the year ended December 31, 1994, the Manager waived fees and/or reimbursed expenses of $20,761, $47,611, $5,204, $24,851, and $18,064, for the Capital Portfolio, Cash Management Portfolio, Common Stock Portfolio, Fixed Income Securities Portfolio, and Income Portfolio, respectively. For the same period, the Manager and Subadviser waived all of their fees and the Subadviser reimbursed expenses totalling $56,165 for the Global Portfolio. For the period from October 11, 1994 (commencement of operations) to December 31, 1994, the Manager reimbursed expenses of $11,627 and $11,509 for the Communications and Information Portfolio and the Frontier Portfolio, respectively. For the same period, the Manager and Subadviser waived all of their fees, and the Subadviser reimbursed expenses totalling $11,487 for the Global Smaller Companies Portfolio. -43- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Notes to Financial Statements (continued) - -------------------------------------------------------------------------------- Seligman Financial Services, Inc. (the "Distributor"), agent for the distribution of the CLVA-2 contracts and an affiliate of the Manager, received commissions of $32,913 from Canada Life after concessions paid to dealers. Certain officers and directors of the Fund are officers or directors of the Manager, the Distributor, and/or the Subadviser. Fees of $35,000 were incurred by the Fund for the legal services of Sullivan & Cromwell, a member of which firm is a director of the Fund. 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 annual cost of such fees and interest is included in directors' fees and expenses, and the accumulated balance thereof at December 31, 1994, 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. At December 31, 1994, there were 20,000,000 shares of Capital Stock authorized for each of the Capital, Common Stock, Communications and Information, Fixed Income Securities, Frontier, Global, Global Smaller Companies, and Income Portfolios, and 100,000,000 shares for the Cash Management Portfolio, all at a par value of $.001 per share. Transactions in shares of Capital Stock were as follows:
Capital Portfolio Cash Management Portfolio Common Stock Portfolio ----------------------- ------------------------ ----------------------- Year ended December 31 Year ended December 31 Year ended December 31 ---------------------- ---------------------- ---------------------- 1994 1993 1994 1993 1994 1993 -------- -------- -------- -------- -------- -------- Sale of shares................ 250,641 115,000 2,322,638 1,718,990 602,357 239,028 Shares issued in payment of dividends.................. 587 440 127,857 105,206 37,506 32,869 Shares issued in payment of gain distributions...... 50,470 82,930 -- -- 80,272 174,940 ------- ------- --------- --------- ------- ------- Total......................... 301,698 198,370 2,450,495 1,824,196 720,135 446,837 ------- ------- --------- --------- ------- ------- Shares repurchased............ (227,501) (128,463) (2,322,134) (2,952,298) (716,170) (589,714) ------- ------- --------- --------- ------- ------- Increase (decrease) in shares. 74,197 69,907 128,361 (1,128,102) 3,965 (142,877) ======= ======= ========= ========= ======= =======
Communications and Fixed Income Information Portfolio Securities Portfolio Frontier Portfolio ----------------------- ---------------------- ----------------------- Year ended December 31 10/11/94* to ---------------------- 10/11/94* to 12/31/94 1994 1993 12/31/94 -------- -------- -------- -------- Sale of shares................ 47,368 229,957 126,797 15,970 Shares issued in payment of dividends............... -- 19,564 23,000 -- Shares issued in payment of gain distributions...... -- -- 22,450 -- ------- ------- -------- ------- Total......................... 47,368 249,521 172,247 15,970 ------- ------- -------- ------- Shares repurchased............ -- (233,817) (244,481) -- ------- ------- -------- ------- Increase (decrease) in shares. 47,368 15,704 (72,234) 15,970 ======= ======= ======== =======
Global Smaller Global Portfolio Companies Portfolio Income Portfolio -------------------------- ---------------------- ----------------------- Year ended December 31 Year ended 5/3/93* to 10/11/94* to ---------------------- 12/31/94 12/31/93 12/31/94 1994 1993 -------- -------- -------- -------- -------- Sale of shares................ 114,731 56,817 12,701 423,636 245,072 Shares issued in payment of dividends............... 855 263 53 68,876 64,413 Shares issued in payment of gain distributions...... 1,550 84 -- -- 45,587 ------- ------- -------- ------- -------- Total......................... 117,136 57,164 12,754 492,512 355,072 ------- ------- -------- ------- -------- Shares repurchased............ (17,445) (167) -- (470,827) (366,762) ------- ------- -------- ------- -------- Increase (decrease) in shares. 99,691 56,997 12,754 21,685 (11,690) ======= ======= ======== ======= ========
- ---------- * Commencement of operations. -44- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Cash Common Communications Fixed Income Capital Management Stock and Information Securities Portfolio Portfolio Portfolio Portfolio Portfolio -------- ----------- -------- ------------ ---------- Shares owned at December 31, 1994: Seligman Mutual Benefit Plan ..... 376,592 2,692,990 1,291,894 -- 297,299 Canada Life of America Variable Annuity Account 2 .... 91,326 537,245 171,166 47,368 91,767 J. & W. Seligman & Co. Incorporated .................. -- -- -- -- -- ------- --------- --------- ------- ------- Shares outstanding ............... 467,918 3,230,235 1,463,060 47,368 389,066 ======= ========= ========= ======= =======
Global Smaller Frontier Global Companies Income Portfolio Portfolio Portfolio Portfolio -------- ----------- -------- ---------- Shares owned at December 31, 1994: Seligman Mutual Benefit Plan ..... -- -- -- 813,064 Canada Life of America Variable Annuity Account 2 .... 11,570 150,458 12,754 194,512 J. & W. Seligman & Co. Incorporated .................. 4,400 6,230 -- -- ------- ------- ------- -------- Shares outstanding ............... 15,970 156,688 12,754 1,007,576 ======= ======= ======= ========
-45- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Financial Highlights - -------------------------------------------------------------------------------- The Fund's financial highlights are presented below. The 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 they 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. The total return based on net asset value measures a Portfolio's performance assuming investors purchased shares of a Portfolio at net asset value as of the beginning of the period, reinvested dividends and capital gains paid at net asset value, and then sold their shares at the net asset value per share 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.
Capital Portfolio ------------------------------------------------------ Year Ended December 31 ------------------------------------------------------ 1994 1993 1992 1991 1990 ------ ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of year $14.950 $16.980 $17.740 $11.230 $11.620 ------- ------- ------- ------- ------- Net investment income (loss) 0.015 0.021 (0.022) 0.079 0.044 Net realized and unrealized gain (loss) on investments (0.699) 1.928 1.202 6.547 (0.414) ------- ------- ------- ------- ------- Increase (decrease) from investment operations (0.684) 1.949 1.180 6.626 (0.370) Dividends paid (0.018) (0.021) -- (0.088) (0.020) Distributions from net gain realized (1.548) (3.958) (1.940) (0.028) -- ------- ------- ------- ------- ------- Net increase (decrease) in net asset value (2.250) (2.030) (0.760) 6.510 (0.390) ------- ------- ------- ------- ------- Net asset value, end of year $12.700 $14.950 $16.980 $17.740 $11.230 ======= ======= ======= ======= ======= Total return based on net asset value (4.59)% 11.65% 6.80% 59.05% (3.18)% Ratios/Supplemental Data: Expenses to average net assets 0.60% 0.71% 0.91% 0.60% 2.15% Net investment income (loss) to average net assets 0.10% 0.09% (0.14)% 0.56% 0.18% Portfolio turnover 67.39% 65.30% 54.95% 31.44% 28.94% Net assets, end of year (000's omitted) $5,942 $5,886 $5,497 $5,812 $3,560 Without management fee waiver and expense reimbursement:* Net investment loss per share $(0.036) $ (0.003) $ (0.035) Ratios: Expenses to average net assets 0.96% 0.83% 1.37% Net investment loss to average net assets (0.26)% (0.03)% (0.21)%
Cash Management Portfolio ---------------------------------------------------- Year Ended December 31 ---------------------------------------------------- 1994 1993 1992 1991 1990 ------ ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 Net investment income 0.040 0.030 0.035 0.056 0.075 Dividends paid (0.040) (0.030) (0.035) (0.056) (0.075) ------- ------- ------- ------- ------- Net asset value, end of year $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 ======= ======= ======= ======= ======= Total return based on net asset value 4.03% 3.00% 3.53% 5.70% 7.79% Ratios/Supplemental Data: Expenses to average net assets -- -- -- -- -- Net investment income to average net assets 3.98% 2.96% 3.50% 5.49% 7.53% Net assets, end of year (000's omitted) $3,230 $3,102 $4,230 $5,849 $3,994 Without management fee waiver and expense reimbursement:* Net investment income per share $0.025 $0.019 $0.025 $0.048 $0.045 Ratios: Expenses to average net assets 1.48% 1.07% 0.97% 0.83% 2.97% Net investment income to average net assets 2.50% 1.89% 2.53% 4.66% 4.56%
- ---------- * The Manager, at its discretion, waived management fees and/or reimbursed expenses for certain periods presented. -46- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Communications and Common Stock Portfolio Information Portfolio ---------------------------------------------- ------------------ Year Ended December 31 10/11/94* to ---------------------------------------------- 1994 1993 1992 1991 1990 12/31/94 ------ ------ ------ ------ ------ -------- Per Share Operating Performance: Net asset value, beginning of period $14.980 $15.600 $14.740 $11.580 $12.260 $10.000 ------- ------- ------- ------- ------- ------- Net investment income (loss) 0.365 0.392 0.346 0.362 0.356 (0.016) Net realized and unrealized gain (loss) on investments (0.356) 1.479 1.445 3.459 (0.743) 0.456 ------- ------- ------- ------- ------- ------- Increase (decrease) from investment operations 0.009 1.871 1.791 3.821 (0.387) 0.440 Dividends paid (0.385) (0.394) (0.369) (0.355) (0.263) -- Distributions from net gain realized (0.824) (2.097) (0.562) (0.306) (0.030) -- ------- ------- ------- ------- ------- ------- Net increase (decrease) in net asset value (1.200) (0.620) 0.860 3.160 (0.680) 0.440 ------- ------- ------- ------- ------- ------- Net asset value, end of period $13.780 $14.980 $15.600 $14.740 $11.580 $10.440 ======= ======= ======= ======= ======= ======= Total return based on net asset value 0.04% 11.94% 12.14% 33.16% (3.15)% 4.40% Ratios/Supplemental Data: Expenses to average net assets 0.60% 0.55% 0.56% 0.60% 0.88% 0.95%+ Net investment income (loss) to average net assets 2.45% 2.10% 2.21% 2.63% 3.01% (0.95)%+ Portfolio turnover 15.29% 10.70% 12.57% 27.67% 13.78% -- Net assets, end of period (000's omitted) $20,168 $21,861 $24,987 $26,103 $18,030 $495 Without management fee waiver and expense reimbursement:** Net investment income (loss) per share $0.361 $0.350 $(0.436) Ratios: Expenses to average net assets 0.62% 0.71% 13.96%+ Net investment income (loss) to average net assets 2.43% 2.52% (13.96)%+
Fixed Income Securities Portfolio Frontier Portfolio ----------------------------------------------- -------------------- Year Ended December 31 ----------------------------------------------- 10/11/94* to 1994 1993 1992 1991 1990 12/31/94 ------ ------ ------ ------ ------ -------- Per Share Operating Performance: Net asset value, beginning of period $10.110 $10.660 $10.990 $10.310 $10.220 $10.000 ------- ------- ------- ------- ------- ------- Net investment income (loss) 0.499 0.713 0.706 0.798 0.680 (0.012) Net realized and unrealized gain (loss) on investments (0.841) 0.142 (0.092) 0.699 (0.054) 0.592 ------- ------- ------- ------- ------- ------- Increase (decrease) from investment operations (0.342) 0.855 0.614 1.497 0.626 0.580 Dividends paid (0.498) (0.711) (0.772) (0.817) (0.536) -- Distributions from net gain realized -- (0.694) (0.172) -- -- -- ------- ------- ------- ------- ------- ------- Net increase (decrease) in net asset value (0.840) (0.550) (0.330) 0.680 0.090 0.580 ------- ------- ------- ------- ------- ------- Net asset value, end of period $ 9.270 $10.110 $10.660 $10.990 $10.310 $10.580 ======= ======= ======= ======= ======= ======= Total return based on net asset value (3.39)% 7.98% 5.60% 14.58% 6.14% 5.80% Ratios/Supplemental Data: Expenses to average net assets 0.60% 0.74% 1.00% 0.60% 1.73% 0.95%+ Net investment income (loss) to average net assets 5.12% 5.41% 6.22% 7.30% 6.59% (0.70)%+ Portfolio turnover 237.23% 33.21% 23.40% 6.34% 6.62% -- Net assets, end of period (000's omitted) $3,606 $3,775 $4,750 $5,369 $4,600 $169 Without management fee waiver and expense reimbursement:** Net investment income (loss) per share $0.430 $0.675 $0.712 $(1.319) Ratios: Expenses to average net assets 1.31% 1.07% 1.42% 40.47%+ Net investment income (loss) to average net assets 4.41% 5.08% 6.48% (40.22)%+
- ---------- * Commencement of operations. ** The Manager, at its discretion, waived management fees and/or reimbursed expenses for certain periods presented. + Annualized. -47- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Financial Highlights (continued) - --------------------------------------------------------------------------------
Global Smaller Global Portfolio Companies Portfolio -------------------------- ----------------- Year ended 5/3/93* to 10/11/94* to 12/31/94 12/31/93 12/31/94 ---------- ---------- --------- Per Share Operating Performance: Net asset value, beginning of period $11.370 $10.000 $10.000 ------- ------- ------- Net investment income 0.131 0.021 0.058 Net realized and unrealized gain (loss) on investments (0.306) 1.518 0.266 Net realized and unrealized gain (loss) from foreign currency transactions 0.325 (0.099) 0.029 ------- ------- ------- Increase from investment operations 0.150 1.440 0.353 Dividends paid (0.064) (0.053) (0.043) Distributions from net gain realized (0.116) (0.017) -- ------- ------- ------- Net increase (decrease) in net asset value (0.030) 1.370 0.310 ------- ------- ------- Net asset value, end of period $11.340 $11.370 $10.310 ======= ======= ======= Total return based on net asset value 1.32% 14.40% 3.53% Ratios/Supplemental Data: Expenses to average net assets 1.20% 1.20%+ 1.20%+ Net investment income to average net assets 1.17% 1.30%+ 3.14%+ Portfolio turnover 47.34% 2.82% -- Net assets, end of period (000's omitted) $1,776 $648 $132 Without management fee waiver and expense reimbursement:** Net investment income (loss) per share $(0.419) $(1.004) $(1.225) Ratios: Expenses to average net assets 6.12% 17.94%+ 37.25%+ Net investment loss to average net assets (3.75)% (15.44)%+ (32.91)%+
Income Portfolio ----------------------------------------------------- Year Ended December 31 ----------------------------------------------------- 1994 1993 1992 1991 1990 ------ ------ ------ ------ ------ Per Share Operating Performance: Net asset value, beginning of year $11.380 $11.390 $11.250 $ 9.500 $10.780 ------- ------- ------- -------- ------- Net investment income 0.689 0.828 0.862 0.896 0.829 Net realized and unrealized gain (loss) on investments (1.369) 0.576 0.896 2.024 (1.487) ------- ------- ------- -------- ------- Increase (decrease) from investment operations (0.680) 1.404 1.758 2.920 (0.658) Dividends paid (0.730) (0.828) (0.987) (0.904) (0.622) Distributions from net gain realized -- (0.586) (0.631) (0.266) -- ------- ------- ------- -------- ------- Net increase (decrease) in net asset value (1.410) (0.010) 0.140 1.750 (1.280) ------- ------- ------- -------- ------- Net asset value, end of year $ 9.970 $11.380 $11.390 $11.250 $ 9.500 ======= ======= ======= ======== ======= Total return based on net asset value (5.96)% 12.37% 15.72% 30.89% (6.10)% Ratios/Supplemental Data: Expenses to average net assets 0.60% 0.64% 0.68% 0.60% 1.40% Net investment income to average net assets 6.34% 6.40% 7.53% 8.05% 8.19% Portfolio turnover 29.76% 38.38% 39.46% 43.67% 21.64% Net assets, end of year (000's omitted) $10,050 $11,220 $11,363 $11,509 $7,419 Without management fee waiver and expense reimbursement:** Net investment income per share $0.670 $0.826 $0.867 Ratios: Expenses to average net assets 0.77% 0.65% 0.93% Net investment income to average net assets 6.17% 6.39% 7.72%
- ---------- * Commencement of operations. ** The Manager and/or Subadviser, at their discretion, waived management fees and/or reimbursed expenses for certain periods presented. + Annualized. See notes to financial statements. -48- - -------------------------------------------------------------------------------- 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 Capital Portfolio, Seligman Cash Management Portfolio, Seligman Common Stock Portfolio, Seligman Communications and Information Portfolio, Seligman Fixed Income Securities Portfolio, Seligman Frontier Portfolio, Seligman Henderson Global Portfolio, Seligman Henderson Global Smaller Companies Portfolio, and Seligman Income Portfolio, collectively referred to as the "Fund") as of December 31, 1994, 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 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. Our procedures included confirmation of securities owned as of December 31, 1994, by correspondence with the custodian 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 the Seligman Portfolios, Inc. at December 31, 1994, 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 ERNST & YOUNG LLP New York, New York February 10, 1995 -49- Seligman Portfolios, Inc. - -------------------------------------------------------------------------------- Board of Directors - -------------------------------------------------------------------------------- Fred E. Brown Director and Consultant, J. & W. Seligman & Co. Incorporated Alice S. Ilchman 3 President, Sarah Lawrence College Trustee, Committee for Economic Development Director, NYNEX Trustee, The Rockefeller Foundation John E. Merow Partner, Sullivan & Cromwell, Attorneys Betsy S. Michel 2 Director or Trustee, Various Organizations William C. Morris 1 Chairman Chairman of the Board and President, J. & W. Seligman & Co. Incorporated Chairman, Carbo Ceramics Inc. Director, Daniel Industries, Inc. Director, Kerr-McGee Corporation Douglas R. Nichols, Jr. 2 Management Consultant James C. Pitney 3 Partner, Pitney, Hardin, Kipp & Szuch, Attorneys 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 Herman J. Schmidt 2 Director, H.J. Heinz Company Director, HON Industries, Inc. Director, MAPCO, Inc. Ronald T. Schroeder 1 President Managing Director, J. & W. Seligman & Co. Incorporated Robert L. Shafer 3 Vice President, Pfizer Inc. Director, USLIFE Corporation James N. Whitson 2 Executive Vice President and Director, Sammons Enterprises, Inc. Director, C-SPAN Brian T. Zino 1 Managing Director, J. & W. Seligman & Co. Incorporated Member: 1 Executive Committee 2 Audit Committee 3 Director Nominating Committee - -------------------------------------------------------------------------------- Executive Officers - -------------------------------------------------------------------------------- William C. Morris Chairman Ronald T. Schroeder President Leonard J. Lovito Vice President Loris D. Muzzatti 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 -----END PRIVACY-ENHANCED MESSAGE-----