N-CSR 1 body_25843.htm FORM N-CSR SELIGMAN PORTFOLIOS, INC.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-5221

Seligman Portfolios, Inc.
(Exact name of Registrant as specified in charter)

100 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)

Lawrence P. Vogel
100 Park Avenue
New York, New York 10017
(Name and address of agent for service)

Registrant’s telephone number, including area code: (212) 850-1864


Date of fiscal year end: 12/31

Date of reporting period: 12/31/05
 
 
FORM N-CSR

ITEM 1. REPORTS TO STOCKHOLDERS.
 
   
Seligman
Portfolios, Inc.
 
 
 
 
 
 
 
 
 
 
Annual Report
December 31, 2005
 
 
   
 
 
 
 
 
 
 
 

Seligman Portfolios, Inc.
Dear Contract Owner:

We are pleased to present the enclosed report for Seligman Portfolios, Inc. for the year ended December 31, 2005. Management commentaries, investment results, portfolios of investments, and audited financial statements for each of the Seligman Portfolios follow this letter.

Thank you for your continued support of Seligman Portfolios. We look forward to serving your investment needs for many years to come.

Respectfully,


William C. Morris
Chairman
J. & W. Seligman & Co. Incorporated

February 17, 2006
 

Manager
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, New York 10017
  
Independent Registered
Public Accounting Firm
Ernst & Young LLP
  
General Counsel
Sullivan & Cromwell LLP
         
General Distributor
Seligman Advisors, Inc.
100 Park Avenue
New York, New York 10017
  
Subadviser
(to Seligman International
Growth Portfolio)
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
  
Custodians
JPMorgan Chase Bank
 
State Street Bank and
Trust Company
 

Quarterly Schedules of Investments

Complete schedules of portfolio holdings owned by the Fund will be filed with the SEC for the first and third quarters of each fiscal year on Form N-Q, and will be available on the SEC’s website at www.sec.gov.1 In addition, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Certain of the information contained on Form N-Q is also made available on Seligman’s website at www.seligman.com.1
 

Proxy Voting
 
A description of the policies and procedures used by the Fund to determine how to vote proxies relating to portfolio securities, as well as information regarding how the Fund voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year will be available (i) without charge, upon request, by calling toll-free (800) 221-7844 in the US or collect (212) 850-1864 outside the US and (ii) on the SEC’s website at www.sec.gov.1 Information for each new 12-month period ending June 30 will be available no later than August 31 of that year. Individual insurance contract owners may also contact participating insurance companies for more information. Plan participants may contact their plan administrator.

__________
1
These website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report or the Portfolios’ prospectus or statement of additional information.
 
 
 

Seligman Portfolios, Inc.
Performance and Portfolio Overview

This section of the Annual Report is intended to help you understand the performance of each Portfolio of Seligman Portfolios, Inc. (the “Fund”), and to provide a summary of their portfolio characteristics.

Performance data quoted in this Annual Report represents past performance and does not guarantee or indicate future investment results. The rates of return will vary and the principal value of an investment will fluctuate. Shares, if redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Total returns of the Fund as of the most recent month-end will be available at www.seligman.com1 by the seventh business day following that month-end. Calculations assume reinvestment of distributions. Returns for Class 1 and Class 2 shares are calculated without any sales charges. Performance data quoted are net of all portfolio operating expenses, but do not include any charges imposed on contract owners by the insurance companies’ separate account or by any pension or retirement plan. If these additional charges were included, performance would have been lower. For certain Portfolios, J. & W. Seligman & Co. Incorporated (the “Manager”) voluntarily reimbursed expenses. Such reimbursement can be discontinued at any time at the Manager’s discretion. Absent such reimbursement, returns would have been lower.

The chart for each Portfolio compares a $10,000 hypothetical investment made in Class 1 shares, to $10,000 hypothetical investments made in the appropriate benchmark indices, for the 10-year or since-inception period through December 31, 2005. For those Portfolios that issued Class 2 shares, the performance of Class 2 shares, which commenced on a later date, is not shown in the charts, but is included in the tables of returns. The performance of Class 2 shares will differ from the performance shown for Class 1 shares, based on the differences in fees paid by each class. The averages and indices are unmanaged benchmarks that assume reinvestment of distributions. The performance of the averages excludes the effect of taxes and sales charges, and the performance of the indices excludes the effect of taxes, fees, and sales charges. Investors cannot invest directly in an average or index. The charts and total returns do not reflect any fees or charges that investors will incur in purchasing or selling units of the Variable Accounts.

An investment in a Portfolio is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Prior to March 31, 2000, the Manager employed subadvisers that were responsible for providing all or a portion of the portfolio management services with respect to the investments of Seligman Global Technology Portfolio and Seligman International Growth Portfolio. For the period following, until September 15, 2003, in the case of Seligman International Growth Portfolio, the assets of these Portfolios were managed exclusively by the Manager. Since September 15, 2003, Wellington Management Company, LLP has acted as subadviser to provide portfolio management services for Seligman International Growth Portfolio. See Note 4 to the Financial Statements on page 46 of this report for additional information.

Accompanying each chart is a discussion of the factors that affected the Portfolio during the past year.
 

__________
1
The website reference is an inactive textual reference and information contained in or otherwise accessible through the website does not form a part of this report or the Portfolios’ prospectus or statement of additional information.


1

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Capital Portfolio
In spite of some serious challenges — rising energy prices, a more restrictive federal reserve policy, and a hurricane season that demolished the US Gulf Coast — the US economy remained strong and corporate profits were robust. Consumers continued to spend, especially on technology. However, around mid-year, retail sales did slow. Corporate spending remained sluggish, with corporate expenditures for technology continuing to be weak.

In this mixed environment, the broad US stock market, as measured by the S&P 500 Index, delivered positive, but unimpressive, returns for the year. Value stocks as a whole continued to outperform, led by energy and utility companies which were the best-performing sectors of the market. Within mid-cap stocks, however, value stocks and growth stocks delivered similar results.

Mid-cap stocks as a group were the big gainers for 2005, significantly outperforming both large-cap and small-cap stocks. Within the mid-cap growth universe, energy, health care, and industrials delivered the best performances, while consumer-related stocks lagged.

Health Care was the Portfolio’s largest sector weighting for the year and represented an overweighting relative to the benchmark Russell Midcap Growth Index. The Portfolio’s Health Care holdings underperformed those of the benchmark. The Portfolio’s holdings in biotechnology delivered generally poor returns as these stocks suffered under a barrage of negative news reports, primarily concerning some products that were taken off the market.

While the Portfolio maintained significant exposure to Information Technology — the sector was the Portfolio’s second largest sector weight for the year — it was underweighted relative to the benchmark. We were somewhat cautious in this area and were highly selective in the types of technology stocks we purchased for the Portfolio. In general, we focused on technology companies that produced consumer goods and delivered consumer services, rather than those that served the business community. This focus paid off as consumers continued to spend money on technology while business spending remained slow.

The Portfolio’s third largest sector weighting was Consumer Discretionary stocks. However, we became cautious in this area around mid-year and ended the year significantly underweighted relative to the benchmark. After three years of consumer-sector strength, we became concerned that consumer spending would weaken in the face of higher interest rates and higher energy costs. When we began receiving some negative reports, such as slowing retail sales, we reduced the Portfolio’s exposure to the sector. For the stocks we held here, we were highly selective and this made a tremendous positive difference for the Portfolio. Within Consumer Discretionary, we focused on specialty retail companies that dominated their niche markets.

At the beginning of 2005, we had believed that capital spending would increase and that industrial stocks would benefit. The Portfolio thus overweighted Industrial stocks relative to the benchmark. While the sector delivered positive absolute returns, the Portfolio underperformed the benchmark in this sector.

 
 
 
 
 
__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.

2


Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Capital Portfolio (continued)
Diversification of Net Assets (unaudited)
December 31, 2005
 
             
Percent of Net Assets December 31,
  
Issues
  
Cost
  
Value
  
2005
   
2004†
Common Stocks:
Aerospace and Defense
  
 2
  
$
121,982
  
$
183,687
    
1.4
    
2.7
  
Air Freight and Logistics
  
 1
    
46,383
    
53,972
    
0.4
    
—
  
Airlines
  
 1
    
128,426
    
138,012
    
1.0
    
1.6
  
Auto Components
  
 2
    
296,960
    
304,428
    
2.3
    
—
  
Biotechnology
  
 9
    
574,484
    
568,920
    
4.3
    
7.9
  
Building Products
  
—
    
—
    
—
    
—
    
0.9
  
Capital Markets
  
 3
    
396,233
    
415,259
    
3.1
    
—
  
Chemicals
  
 2
    
225,000
    
225,831
    
1.7
    
2.4
  
Commercial Banks
  
 1
    
108,063
    
102,638
    
0.8
    
—
  
Commercial Services and Supplies
  
 3
    
689,722
    
705,797
    
5.3
    
11.0
  
Communications Equipment
  
 1
    
81,061
    
78,365
    
0.6
    
2.6
  
Computers and Peripherals
  
 5
    
419,683
    
456,570
    
3.4
    
2.9
  
Construction and Engineering
  
 2
    
276,099
    
415,457
    
3.1
    
2.0
  
Containers and Packaging
  
 1
    
166,013
    
170,430
    
1.3
    
—
  
Diversified Financial Services
  
 2
    
144,379
    
214,661
    
1.6
    
—
  
Electrical Equipment
  
 1
    
53,675
    
70,992
    
0.5
    
0.9
  
Electronic Equipment and Instruments
  
 1
    
106,903
    
126,502
    
0.9
    
2.9
  
Energy Equipment and Services
  
 3
    
242,720
    
349,757
    
2.6
    
0.7
  
Energy Traders
  
 1
    
86,162
    
85,482
    
0.6
    
—
  
Food and Staples Retailing
  
—
    
—
    
—
    
—
    
0.4
  
Food Products
  
 4
    
437,173
    
427,140
    
3.2
    
2.7
  
Gas Utilities
  
 1
    
40,769
    
40,359
    
0.3
    
—
  
Health Care Equipment and Supplies
  
 7
    
520,113
    
510,041
    
3.8
    
4.2
  
Health Care Providers and Services
  
11
    
632,719
    
707,471
    
5.3
    
7.0
  
Hotels, Restaurants and Leisure
  
 6
    
686,528
    
759,355
    
5.7
    
5.4
  
Household Durables
  
—
    
—
    
—
    
—
    
0.8
  
Insurance
  
 4
    
291,989
    
300,627
    
2.3
    
—
  


             
Percent of Net Assets December 31,
 
Issues
  
Cost
  
Value
  
2005
  
2004†
Common Stocks: (continued)
Internet and Catalog Retail
  
 1
  
$
56,877
  
$
88,671
    
0.7
    
0.8
  
Internet Software and Services
  
 1
    
91,636
    
121,365
    
0.9
    
2.2
  
 IT Services  
6
     596,962     666,941     5.0     2.9  
Leisure Equipment and Products
  
—
    
—
    
—
    
—
    
1.0
  
Machinery
  
 1
    
67,277
    
61,692
    
0.5
    
0.3
  
Media
  
 1
    
69,308
    
69,524
    
0.5
    
1.1
  
Metals and Mining
  
 2
    
113,150
    
132,868
    
1.0
    
—
  
Multiline Retail
  
 2
    
202,269
    
199,925
    
1.5
    
1.1
  
Oil, Gas and Consumable Fuels
  
 6
    
556,067
    
701,427
    
5.2
    
1.7
  
Paper and Forest Products
  
—
    
—
    
—
    
—
    
0.8
  
Personal Products
  
 2
    
390,057
    
360,428
    
2.7
    
2.4
  
Pharmaceuticals
  
 7
    
550,117
    
608,977
    
4.6
    
5.6
  
Semiconductors and Semiconductor Equipment
  
 8
    
525,814
    
614,270
    
4.6
    
4.1
  
Software
  
 5
    
602,269
    
641,449
    
4.8
    
4.9
  
Specialty Retail
  
 8
    
853,436
    
1,028,068
    
7.7
    
8.4
  
Textiles, Apparel and Luxury Goods
  
 1
 
 
43,913
 
 
46,676
 
 
0.3
 
 
—
 
Trading Companies and Distributors
  
—
    
—
    
—
    
—
    
1.3
  
Wireless Telecommunication Services
  
 2
    
159,955
     
177,319
    
1.3
    
0.6
  
   
127
    
11,652,346
    
12,931,353
    
96.8
    
98.2
  
Short-Term Holding and Other Assets Less Liabilities
  
 1
    
428,459
    
428,459
    
3.2
    
1.8
  
Net Assets
  
128
  
$
12,080,805
  
$
13,359,812
    
100.0
    
100.0
  

† Restated to conform to current classification.

Largest Portfolio Changes
During the Six Months Ended December 31, 2005

Largest Purchases
    
Largest Sales
  
NBTY*
Abercrombie & Fitch (Class A)*
  
USANA Health Sciences**
Michaels Stores**
Euronet Worldwide*
Business Objects (ADR)*
  
Bed Bath & Beyond
Chico’s FAS
Northern Trust*
EOG Resources*
  
Allied Waste Industries**
Fortune Brands**
BorgWarner*
Electronics for Imaging*
  
Goodrich**
Tupperware**
Temple-Inland*
Chattem*
  
Precision Castparts
Covance**

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.
_____________
*
Position added during the period.
**
Position eliminated during the period.


3

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Cash Management Portfolio

Summary of Net Assets (unaudited) December 31, 2005

   
Value
  
Percent of Net Assets  
Short-Term Holdings: 
Fixed Time Deposits
  
$
6,050,000
    
39.9
  
US Government Securities
    
1,796,418
    
11.9
  
US Government Agency Securities
    
2,993,431
    
19.7
  
Repurchase Agreement
  
 
2,851,000
    
18.8
  
Commercial Paper
    
2,304,473
    
15.2
  
    
15,995,322
     
105.5
   
Other Assets Less Liabilities
    
(840,851
)
  
(5.5
)
Net Assets
  
$
15,154,471
     
100.0
  

Seligman Common Stock Portfolio
The year 2005 delivered strong US economic resiliency yet disappointing stock market performance. Some of the notable developments that influenced the economy and the markets last year included sharply higher commodity prices, continued federal funds rate increases, and several natural disasters. Energy prices hit record levels during the year, driven by increasing demand from emerging economies as well as supply reductions from three significant hurricanes that hit the Gulf Coast region. The Federal Reserve Board continued its policy of “measured pace” tightening, raising the federal funds rate in eight consecutive 0.25% increments in 2005. Despite higher short-term rates, long-term rates were little changed (as measured by the 10-year Treasury), which resulted in a flatter US Treasury yield curve. Despite higher energy prices and rising short-term interest rates, consumers remained resilient. Many corporations strengthened their financial standing, though there were some notable exceptions. The major rating agencies downgraded General Motors’ and Ford’s debt to junk status, while two auto suppliers, Collins & Aikman and Delphi, declared bankruptcy. Bankruptcies also plagued the Airline sector, with Delta and Northwest both filing for Chapter 11. (The Fund, however, was not invested in any of these companies.) Outside of the US, hostilities continued in Iraq, and terrorist activities remained a concern.

The US economy took most of these developments in stride. Despite high commodity prices, core inflation remained low. Corporate profits increased at a double-digit pace. GDP growth also continued its strong trends. Merger and acquisition activity accelerated as companies put their large cash balances to work. We expect this trend to continue in 2006. Overall, 2005 was a year in which we saw an encouragingly favorable economic backdrop, but in which the major US equity indices delivered unimpressive returns. The Dow Jones Industrial Average ended the year lower, while the S&P 500 and the NASDAQ posted slight gains.

The Portfolio’s underperformance for the year relative to the S&P 500 Index resulted from a combination of adverse stock selection and sector allocation. From a sector perspective, the Portfolio was underweight versus the S&P 500 in Energy, which was the top-performing sector in the benchmark. We did not anticipate continued strength in this sector, and our relative underweight in Energy penalized performance.

From a stock selection standpoint, adverse stock selection in Health Care and Industrials proved detrimental to the Portfolio’s performance for the period. Within Health Care, the Portfolio maintained a sizable weighting in pharmaceutical stocks, which, in general, underperformed sharply in 2005. Further, within Health Care, the Portfolio’s smaller biotech holdings hurt performance as larger biotech companies outperformed smaller biotech companies for the period. Within Industrials, stock selection hurt performance, in particular due to a large industrial conglomerate in which the Portfolio maintained a considerable position.

Exposure to the Telecommunications Services and Consumer Staples sectors contributed positively to performance for the period. Consolidation activity along with increased competition and technological change within Telecommunications made the sector a generally difficult area for investors in 2005, and the sector delivered negative returns for the benchmark. However, our strategy focused on areas within Telecomm outside of the benchmark — in particular the cell phone tower space. This strategy proved successful as stock selection within the sector made the largest positive relative contribution to Portfolio performance for the year and caused the sector, which was one of the worst performing for the benchmark, to be one of the top-performing sectors for the Portfolio.

The Portfolio’s exposure to, and stock selection within, Consumer Staples further aided performance. The Portfolio’s single largest individual contributor to performance in 2005 was a large consumer staples company that posted exceptional gains for the period, and in which the Portfolio maintained a significant weighting.
 

__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.
 
 
4
 

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Common Stock Portfolio (continued)

Diversification of Net Assets (unaudited)
December 31, 2005
             
Percent of Net Assets December 31,
 
Issues
  
Cost
  
Value
  
2005
  
2004
Common Stocks, Warrants and Options Purchased:
Aerospace and Defense
  
 2
  
$
106,514
  
$
119,890
    
1.5
    
0.6
  
Air Freight and Logistics
  
 1
    
36,618
    
41,356
    
0.5
    
—
  
Auto Components
  
—
    
—
    
—
    
—
    
0.8
  
Beverages
  
 4
    
185,114
    
178,747
    
2.2
    
2.8
  
Biotechnology
  
 2
    
183,840
    
136,762
    
1.7
    
1.1
  
Building Products
  
 1
    
30,568
    
33,209
    
0.4
    
0.5
  
Capital Markets
  
 4
    
188,253
    
212,322
    
2.6
    
3.0
  
Chemicals
  
 4
    
185,335
    
206,072
    
2.5
    
2.1
  
Commercial Banks
  
 2
    
253,554
    
272,465
    
3.3
    
3.4
  
Commercial Services and Supplies
  
 2
    
166,386
    
148,260
    
1.8
    
1.8
  
Communications Equipment
  
 8
    
500,416
    
508,372
    
6.2
    
3.8
  
Computers and Peripherals
  
 5
    
310,568
    
326,077
    
4.0
    
4.9
  
Consumer Finance
  
—
    
—
    
—
    
—
    
1.9
  
Containers and Packaging
  
 1
    
98,013
    
99,120
    
1.2
    
—
  
Diversified Consumer Services
  
 1
    
39,698
    
38,240
    
0.5
    
—
  
Diversified Financial Services
  
 3
    
388,386
    
434,218
    
5.3
    
3.9
  
Diversified Telecommunication Services
  
 2
    
208,214
    
205,739
    
2.5
    
2.2
  
Electric Utilities
  
—
    
—
    
—
    
—
    
0.5
  
Electronic Equipment and Instruments
  
—
    
—
    
—
    
—
    
0.6
  
Energy Equipment and Services
  
—
    
—
    
—
    
—
    
0.9
  
Food and Staples Retailing
  
 4
    
353,498
    
305,881
    
3.7
    
3.7
  
Food Products
  
 1
    
30,805
    
27,828
    
0.3
    
1.3
  
Health Care Equipment and Supplies
  
 2
    
114,321
    
106,550
    
1.3
    
0.4
  
Health Care Providers and Services
  
 2
    
113,369
    
117,261
    
1.4
    
1.9
  
Hotels, Restaurants and Leisure
  
 2
    
97,783
    
91,209
    
1.1
    
2.3
  
Household Products
  
 1
    
35,546
    
40,805
    
0.5
    
2.4
  


             
Percent of Net Assets December 31
  
Issues
  
Cost
  
Value
  
2005
  
2004
Common Stocks, Warrants and Options Purchased: (continued)
Index Derivatives
  
—
    
—
    
—
    
—
    
0.7
  
Industrial Conglomerates
  
 3
  
$
359,599
  
$
423,297
    
5.1
    
5.3
  
Insurance
  
 3
    
217,951
    
262,563
    
3.2
    
5.1
  
Internet and Catalog Retail
  
—
    
—
    
—
    
—
    
0.8
  
Internet Software and Services
  
 3
    
174,557
    
196,307
    
2.4
    
1.0
  
IT Services
  
 1
    
62,816
    
63,250
    
0.8
    
—
  
Machinery
  
 2
    
96,330
    
123,208
    
1.5
    
1.7
  
Media
  
 8
    
455,060
    
439,565
    
5.4
    
3.5
  
Metals and Mining
  
 1
    
50,026
    
47,312
    
0.6
    
1.7
  
Multi-Utilities
  
 1
    
31,486
    
30,880
    
0.4
    
0.9
  
Multiline Retail
  
 2
    
139,223
    
134,153
    
1.6
    
0.5
  
Oil, Gas and Consumable Fuels
  
 4
    
346,384
    
403,428
    
4.9
    
3.9
  
Paper and Forest Products
  
—
    
—
    
—
    
—
    
0.6
  
Personal Products
  
 1
    
38,736
    
34,260
    
0.4
    
—
  
Pharmaceuticals
  
13
    
931,160
    
890,855
    
10.8
    
10.4
  
Semiconductors and Semiconductor Equipment
  
 4
    
175,393
    
190,752
    
2.3
    
3.2
  
Software
  
 4
    
531,910
    
384,968
    
4.6
    
5.4
  
Specialty Retail
  
 3
    
166,110
    
158,509
    
1.9
    
1.1
  
Thrifts and Mortgage Finance
  
 4
    
131,135
    
132,346
    
1.6
    
1.7
  
Tobacco
  
 3
    
184,426
    
266,867
    
3.3
    
2.9
  
Wireless Telecommunication Services
  
 4
     
181,591
    
210,183
    
2.5
     
1.9
  
   
119
    
7,900,692
    
8,043,086
    
97.8
    
99.1
  
US Government Securities
  
  1
    
29,843
    
29,644
    
0.4
    
—
  
Short-Term Holdings and Other Assets Less Liabilities
  
  3
    
147,035
    
146,371
    
1.8
    
0.9
  
Net Assets
  
123
  
$
8,077,570
  
$
8,219,101
     
100.0
    
100.0
  

Largest Portfolio Changes
During the Six Months Ended December 31, 2005

Largest Purchases
    
Largest Sales
  
Albertson’s*
Valeant Pharmaceuticals
  
Crown Castle International**
Morgan Stanley
BellSouth*
International*
  
Exxon Mobil
Ameren**
Google (Class A)*
CVS*
  
MBNA**
Colgate-Palmolive**
Maxim Integrated Products*
Amdocs*
  
Computer Associates
Novell**
Corning*
ConocoPhillips
  
International**
Wal-Mart Stores
Mercury Interactive*
    
Kroger**
  


Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.
__________
*
Position added during the period.
**
Position eliminated during the period.


5


Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Communications and Information Portfolio
The technology market in 2005 delivered positive performance, due in large part to a healthy overall global electronics market. Global semiconductor revenues were up roughly 8%, according to the Semiconductor Industry Association, driven largely by strong unit growth in both PCs and cell phones, along with continued strength in the consumer electronics markets, in particular MP3 audio players, flat panel television sets, and GPS navigation devices.

Much of the growth seen in the technology market in 2005 occurred in newly industrialized areas outside of developed countries — in places such as Russia, Eastern Europe, China, India, Indonesia, and Brazil. Price reductions in cell phones, PCs and consumer electronics have played a major role in the expansion of these markets. The technology industry has historically been able to pass through cost reductions to end consumers, thereby significantly expanding the total available market sizes of numerous technology products. This price elasticity of demand has certainly been a key factor in the doubling of the unit volumes of cell phones shipped globally over the past five years.

The consolidation trend within the technology industry remained strong in 2005, marked by increased merger and acquisition activity. In addition, share buybacks rose to record levels as companies put excess cash to work. Growth in technology in 2005 was consumer-driven, despite concerns over rising interest rates and record energy prices. US sales of consumer electronics are estimated to have grown 11% in 2005, a slight increase from the 10% sales growth in consumer electronics from 2003-2004, according to the Consumer Electronics Association.

The Portfolio’s relative outperformance for the period is attributable primarily to exceptional stock selection in the Semiconductors and Semiconductor Equipment industry, which delivered positive investment results for both the Portfolio and the benchmark for the period. The industry, no longer plagued by excess inventories, was driven by an overall healthy demand for semiconductors resulting from strong PC and cell phone unit growth, as well as continued strength in consumer electronics. While the Portfolio was underweight in the industry, relative to the benchmark, the top-performing companies in the Portfolio for the period included a microprocessor manufacturer and a company that supplies bare silicon wafers to virtually every chip maker in the world. The robust PC market benefited both companies, and the microprocessor company gained market share on the back of superior product architecture, particularly for server computers.

The largest detractor for the period was a security software company in which the Portfolio held a sizable position. The company did not perform well, especially in the last few months. We believe a major reason for this underperformance was negative investor sentiment regarding the company’s recent acquisition of another large security software company. Another factor that may have further hurt the stock’s performance is the concern over Microsoft’s entry into the anti-virus software market, expected mid-2006. We continue to maintain a significant investment in this company, however, as we believe that the worst is over, that the risk posed by Microsoft’s entry into the market has already been discounted in the company’s share price, and that it continues to exhibit attractive profitability and growth prospects.

We sold our positions in a few entertainment software companies that had performed well for us in early 2005 as we became increasingly concerned by mid-year that the video game industry had peaked. We bought back a small position in one of these companies that has continued to perform well. We have otherwise steered clear of the video gaming arena as we believe many of these software companies are being hurt by the console transition that has resulted from the introduction of the new Xbox gaming system and the anticipated debut of Playstation 3 later in 2006.

Also detracting from Portfolio performance for the period were holdings in a Computer Peripherals company and a Health Care Equipment and Supplies company that had a ruling against it in 2005 from the government agency that oversees Medicare reimbursements. In the past, the Portfolio has benefited from its ability to invest in the non-traditional technology sector of Health Care, focusing on companies such as medical device and clinical lab equipment companies that are closely tied to, or are dependent on, technology. In 2005 the Portfolio’s stock selection in Health Care Providers and Services companies contributed positively to performance, while stock selection within the Health Care Equipment and Supplies industry had a negative impact on the Portfolio for the period. The Portfolio generally reduced its weighting in the Health Care sector as the year progressed.
 
 

6


Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Communications and Information Portfolio (continued)

A strategy that we employed in 2005 was to increase the Portfolio’s international exposure, based on our view that much of the growth we have been seeing in the technology market is occurring on a much more global scale. As such, we purchased a few Indian IT Services outsourcing companies that contributed positively to Portfolio performance, as well as a Japanese Electronics Equipment and Instruments company that supplies ceramic materials used in the packaging of semiconductors.

__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.

Diversification of Net Assets (unaudited)
December 31, 2005

             
Percent of Net Assets
December 31,
  
Issues
  
Cost
  
Value
  
2005
  
2004†
Common Stocks:
Application Software
  
 6
  
$
8,316,301
  
$
6,910,540
    
11.8
    
4.8
  
Biotechnology
  
 1
    
325,546
    
339,838
    
0.6
    
2.1
  
Communications Equipment
  
 7
    
4,130,064
    
4,460,227
    
7.6
    
9.0
  
Computers and Peripherals
  
11
    
6,204,520
    
6,608,824
    
11.3
    
6.9
  
Consumer Software
  
 1
    
604,950
    
613,074
    
1.0
    
3.9
  
Diversified Telecommunication Services
  
 2
    
391,156
    
377,503
    
0.6
    
0.8
  
Electronic Equipment and Instruments
  
 4
    
1,960,360
    
2,185,565
    
3.7
    
3.3
  
Health Care Equipment and Supplies
  
 4
    
2,852,430
    
2,601,864
    
4.4
    
7.7
  
Health Care Providers and Services
  
—
    
—
    
—
    
—
    
3.3
  
Internet and Catalog Retail
  
 3
    
1,095,748
    
1,112,287
    
1.9
    
2.9
  
Internet Software and Services
  
 7
    
8,615,554
    
7,791,780
    
13.3
    
4.0
  
IT Services
  
 5
    
3,816,703
    
3,833,171
    
6.5
    
7.8
  
Leisure Equipment and Products
  
—
    
—
    
—
    
—
    
0.7
  
Media
  
 1
    
677,903
    
533,746
    
0.9
    
1.1
  
Semiconductors and Semiconductor Equipment
  
15
    
9,292,934
    
10,594,704
    
18.0
    
12.9
  
Systems Software
  
 4
    
5,277,943
    
5,087,826
    
8.7
    
22.1
  
Technical Software
  
 2
    
4,795,474
    
4,364,093
    
7.4
    
—
  
Wireless Telecommunication Services
 
 1
     
543,856
    
516,256
     
0.9
    
—
  
   
74
    
58,901,442
    
57,931,298
    
98.6
    
93.3
  
Short-Term Holding and Other Assets Less Liabilities
  
 1
     
803,831
    
811,992
    
1.4
    
6.7
  
Net Assets
  
75
   
$
59,705,273
  
$
58,743,290
    
100.0
     
100.0
  

_____________
† Restated to conform to current classification.

Largest Portfolio Changes
During the Six Months Ended December 31, 2005
 
Largest Purchases
Mercury Interactive*
McAfee
Seagate Technology
Maxim Integrated Products*
ASML Holding (NY shares)*
Integrated Device Technology
Altera
Cognos*
Kinetic Concepts
Sun Microsystems*
 
 
Largest Sales
Advanced Micro Devices**
BMC Software**
MEMC Electronic Materials
Take-Two Interactive Software**
Cytyc**
Yahoo!**
Laboratory Corporation of America Holdings**
Infosys Technologies
Motorola**
Cisco Systems

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.
_____________
*
Position added during the period.
**
Position eliminated during the period


7

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Global Technology Portfolio
Overall, the Portfolio performed well for the fiscal year as technology stocks posted positive returns for the period, although investor enthusiasm was dampened slightly by concerns over rising oil prices, rising interest rates, and the short-term impact of Hurricanes Katrina and Rita. Abroad, the Japanese economy enjoyed strong economic performance, with its markets rallying on the heels of improving employment conditions and increased Japanese capital expenditure. Further, during the fiscal year we saw a general pick-up in manufacturing in Taiwan, which had lagged in recent years.

Semiconductors and Semiconductor Equipment was the best-performing industry for the Portfolio for the year. Superior stock selection within the industry played the largest role in the Portfolio’s relative outperformance for the period. Stock selection within Electronics Equipment and Instruments also resulted in strong gains for the Portfolio. Individual holdings having the largest impact on Portfolio performance for the year included two US semiconductor equipment companies and a Japanese electronic equipment and instruments company that provides ceramic materials used in the packaging of semiconductors.

Healthcare Equipment and Supplies and Computers and Peripherals were the bottom-performing industries for the Portfolio for the period, and the Portfolio’s relative overweight in each detracted from the Portfolio’s performance for the period. Portfolio holdings that detracted the most from performance were a US healthcare equipment and supplies company (which the Portfolio no longer owns) and a US computer and peripherals company.

From a geographic standpoint, the Portfolio was largely positioned in US names (about 67%). Non-US stocks outperformed domestic stocks for the period. The Portfolio held a slight relative overweight in the US, but strong stock selection provided solid gains for the Portfolio. The Portfolio’s next largest weightings were in Japan (about 7.5%) and Taiwan (3.3%), which provided substantial gains for the Portfolio, offsetting weaker performance posted by the Portfolio’s European holdings for the period.
 
 
 
__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.
 


8

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Global Technology Portfolio (continued)
 
Diversification of Net Assets by Industry (unaudited)
December 31, 2005

             
Percent of Net Assets December 31,
  
Issues
  
Cost
  
Value
  
2005
  
2004†
Common Stocks:
Application Software
  
 6
  
$
927,268
  
$
870,311
    
10.2
    
10.8
  
Biotechnology
  
 1
    
38,155
    
39,981
    
0.5
    
1.3
  
Chemicals
  
 1
    
29,589
    
51,722
    
0.6
    
1.1
  
Commercial Services and Supplies
  
 1
    
36,419
    
41,419
    
0.5
    
—
  
Communications Equipment
  
 9
    
696,187
    
786,829
    
9.2
    
10.5
  
Computers and Peripherals
  
14
    
978,040
    
1,053,318
    
12.3
    
8.5
  
Consumer Software
  
 3
 
 
187,227
 
 
193,632
 
 
2.3
 
 
2.1
 
Diversified Financial Services
  
 1
    
42,938
    
48,164
    
0.6
    
—
  
Diversified Telecommunication Services
  
 1
    
41,803
    
40,650
    
0.5
    
1.3
  
Electronic Equipment and Instruments
  
 8
    
438,221
    
539,465
    
6.3
    
8.1
  
Health Care Equipment and Supplies
  
 5
    
237,082
    
218,736
    
2.6
    
3.6
  
Health Care Providers and Services
  
—
    
—
    
—
    
—
    
3.2
  
Hotels, Restaurants and Leisure
  
 1
    
41,445
    
44,601
    
0.5
    
—
  
Household Durables
  
—
    
—
    
—
    
—
    
0.5
  
Internet and Catalog Retail
  
 3
    
149,197
    
150,872
    
1.8
    
1.7
  
Internet Software and Services
  
 7
    
854,234
    
763,115
    
8.9
    
4.2
  
IT Services
  
 8
    
654,281
    
723,640
    
8.5
    
10.2
  
Leisure Equipment and Products
  
—
    
—
    
—
    
—
    
0.5
  
Office Electronics
  
 2
    
79,961
    
88,001
    
1.0
    
1.5
  
Semiconductors and Semiconductor Equipment
  
15
    
1,167,712
    
1,352,801
    
15.9
    
12.2
  
Systems Software
  
 4
    
589,248
    
605,845
    
7.1
    
12.6
  
Technical Software
  
 2
    
375,339
    
358,183
    
4.2
    
2.0
  
Wireless Telecommunication Services
  
 1
    
117,113
    
114,464
    
1.3
     
—
  
   
93
    
7,681,459
    
8,085,749
    
94.8
    
95.9
  
Other Assets Less Liabilities
  
—
     
441,812
    
442,866
     
5.2
    
4.1
  
Net Assets
  
93
   
$
8,123,271
  
$
8,528,615
    
100.0
    
100.0
  

__________
† Restated to conform to current classification.

Largest Portfolio Changes
During the Six Months Ended December 31, 2005
Largest Purchases
Mercury Interactive*
Maxim Integrated Products*
ASML Holding (NY shares)*
Altera
Cognos*
Integrated Device Technology
Murata Manufacturing*
Sun Microsystems*
Quest Software*
Keyence*
 
Largest Sales
Advanced Micro Devices**
BMC Software**
MEMC Electronic Materials
Ibiden**
Take-Two Interactive Software**
Cisco Systems
Laboratory Corporation of America Holdings**
Garmin**
Motorola**
Yahoo!**

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.

__________
*
Position added during the period.
**
Position eliminated during the period.


9

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman International Growth Portfolio
International equity markets, as measured by the MSCI EAFE Index, outperformed US equity markets, as measured by the S&P 500 Index, for the period. Most sectors of the MSCI EAFE Index advanced between 9% - 28%, with only Telecommunication Services lagging behind. Value stocks outperformed growth stocks, both internationally and in the US.

While our investment process is bottom-up stock selection, the Portfolio’s sector allocations detracted from relative performance against the MSCI EAFE Index. Overweight allocations to traditional growth sectors such as Consumer Discretionary and Information Technology had a negative impact on Portfolio performance, as those sectors underperformed others in the MSCI EAFE for the period. The Energy and Materials sectors, in which the Portfolio is underweight, relative to the benchmark MSCI EAFE Index, were the best-performing areas of the market. As managers of a growth portfolio, however, we have not traditionally made these sectors areas of focus.

The Portfolio underperformed significantly in the first quarter, due primarily to its position in an Irish pharmaceutical company. This company was the largest positive contributor to Portfolio performance in 2004, and, as such, was one of the Portfolio’s largest holdings entering 2005. Early in 2005, however, one of the company’s major drugs was withdrawn from the market following a patient death in a follow-on clinical trial. The patient death and withdrawal of the drug were both tragic and unexpected. As soon as the drug was withdrawn, the company’s position in the Portfolio was eliminated. The Portfolio outperformed the index over the last nine months of the year, though not enough to offset the loss suffered in the first quarter.

Stock selection in Information Technology and Consumer Discretionary also detracted from the Portfolio’s absolute and relative performance for the year. Individual holdings that negatively impacted the Portfolio’s investment results included a Canadian communications equipment company that has come under pressure due to an ongoing patent litigation case with another technology firm, a Japanese anti-virus software maker that suffered due to lower profits that resulted from higher expenses associated with correcting software defects (which the Portfolio no longer owns), and a British media company.

On the positive side, the Portfolio benefited from stock selection within the Energy sector. The top contributor to both absolute and relative performance was an integrated Canadian oil and gas company that benefited from tight demand-supply conditions and a high pricing environment during the year. The second largest contributor to both absolute and relative performance was a Japanese commercial bank that benefited from synergies resulting from their recent merger, as well as a reduction in bad debt and the improving Japanese economy. Additional leading contributors to performance during the year included a communications equipment company in the Netherlands and a Swiss pharmaceutical company.

The Portfolio’s overweight in Consumer Discretionary, Health Care and Information Technology sectors, some of the strongest areas where we see growth, are a result of our bottom-up research and stock analysis. Despite the Portfolio’s challenging relative performance during the annual period, our process has not wavered. Our focus remains on stock and sector selections that result from intense bottom-up research, diligently meeting with the management of leading global companies, and leveraging the strong research capabilities of our firm. We have strong conviction in our holdings and process, and we are optimistic about the Portfolio’s positioning.

 

 
__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.


10

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman International Growth Portfolio (continued)
 
Diversification of Net Assets by Industry (unaudited)
December 31, 2005
 
 
 
 
 
 
 
 
 
 
 Percent of Net Assets December 31, 
 
  
 
Issues 
    
Cost
     
Value
     
2005
    
2004
Common Stocks and Warrants:
Aerospace and Defense
  
—
    
—
    
—
    
—
    
4.4
  
Air Freight and Logistics
  
 1
  
$
32,897
  
$
33,345
    
0.9
    
—
  
Airlines
  
 1
    
34,918
    
44,808
    
1.2
    
—
  
Automobiles
  
 1
    
59,566
    
73,246
    
1.9
    
3.1
  
Beverages
  
—
    
—
    
—
    
—
    
1.2
  
Biotechnology
  
 1
    
69,942
    
75,602
    
2.0
    
—
  
Building Products
  
—
    
—
    
—
    
—
    
0.9
  
Capital Markets
  
 1
    
68,517
    
78,073
    
2.1
    
1.8
  
Chemicals
  
 1
    
49,826
    
57,639
    
1.5
    
—
  
Commercial Banks
  
 8
    
374,443
    
443,826
    
11.7
    
12.4
  
Commercial Services and Supplies
  
—
    
—
    
—
    
—
    
2.0
  
Communications Equipment
  
 3
    
174,943
    
175,624
    
4.6
    
8.8
  
Computers and Peripherals
  
 1
    
37,411
    
40,518
    
1.1
    
—
  
Construction and Engineering
  
 1
    
21,820
    
34,591
    
0.9
    
0.5
  
Diversified Financial Services
  
 1
    
31,615
    
37,386
    
1.0
    
—
  
Diversified Telecommunication Services
  
—
    
—
    
—
    
—
    
2.1
  
Electrical Equipment
  
 1
    
38,202
    
38,613
    
1.0
    
—
  
Electronic Equipment and Instruments
  
 4
    
151,221
    
189,371
    
5.0
    
1.2
  
Energy Equipment and Services
  
—
    
—
    
—
    
—
    
1.7
  
Food and Staples Retailing
  
 1
    
35,065
    
47,072
    
1.2
    
1.0
  
Food Products
  
 2
    
81,212
    
89,451
    
2.4
    
1.9
  
Health Care Equipment and Supplies
  
 1
    
53,559
    
64,653
    
1.7
    
2.1
  
Hotels, Restaurants and Leisure
  
—
    
—
    
—
    
—
    
3.6
  
Household Durables
  
 4
    
128,433
    
144,140
    
3.8
    
1.1
  


             
Percent of Net Assets December 31,
  
Issues
   
Cost
  
Value
  
2005
  
2004
Common Stocks and Warrants: (continued)
Household Products
  
  1
  
$
64,632
  
$
66,129
    
1.7
    
—
  
Industrial Conglomerates
  
 1
    
28,036
    
28,538
    
0.8
    
—
  
Insurance
  
 2
    
112,462
    
128,599
    
3.4
    
2.1
  
Internet and Catalog Retail
  
—
    
—
    
—
    
—
    
1.6
  
Internet Software and Services
  
 1
    
17,703
    
38,404
    
1.0
    
—
  
IT Services
  
 1
    
25,603
    
26,314
    
0.7
    
1.5
  
Machinery
  
 4
    
119,208
    
146,545
    
3.9
    
0.8
  
Marine
  
 1
    
26,868
    
44,302
    
1.2
    
1.0
  
Media
  
 6
    
269,298
    
316,655
    
8.4
    
8.0
  
Metals and Mining
  
 5
    
127,373
    
146,188
    
3.9
    
—
  
Multi-Utilities
  
 1
    
48,911
    
52,653
    
1.4
    
—
  
Multiline Retail
  
 1
    
32,345
    
34,472
    
0.9
    
1.4
  
Oil, Gas and Consumable Fuels
  
 3
    
114,873
    
124,701
    
3.3
    
4.9
  
Pharmaceuticals
  
 4
    
210,490
    
244,428
    
6.5
    
6.5
  
Real Estate
  
 2
    
42,096
    
70,080
    
1.9
    
2.1
  
Road and Rail
  
 3
    
43,235
    
46,505
    
1.2
    
1.3
  
Semiconductors and Semiconductor Equipment
  
 2
    
95,920
    
99,513
    
2.6
    
0.4
  
Software
  
 1
    
65,427
    
76,371
    
2.0
    
2.9
  
Specialty Retail
  
 2
    
78,033
    
113,563
    
3.0
    
4.3
  
Textiles, Apparel and Luxury Goods
  
 3
    
132,320
    
146,252
    
3.9
    
3.4
  
Tobacco
  
—
    
—
    
—
    
—
    
4.3
  
Transportation Infrastructure
  
—
    
—
    
—
    
—
    
1.5
  
Wireless Telecommunication Services
  
 2
     
87,066
    
87,645
    
2.3
     
2.0
  
   
79
    
3,185,489
    
3,705,815
    
98.0
    
99.8
  
Other Assets Less Liabilities
  
—
     
76,522
    
76,720
    
2.0
    
0.2
  
Net Assets
  
79
   
$
3,262,011
  
$
3,782,535
    
100.0
    
100.0
  

Largest Portfolio Changes
During the Six Months Ended December 31, 2005

Largest Purchases
    
Largest Sales
  
Serono*
Toyota Motor*
  
Petro-Canada**
Esprit Holdings**
Nokia*
Nestlé*
  
Ahold**
SAP**
America Movil (Series L) (ADR)*
Commerzbank*
  
Japan Tobacco**
European Aeronautic Defense
Allianz*
Suncor Energy*
  
AU Optronics (ADR)
and Space**
Samsung Electronics*
JSR*
  
Vivendi Universal**
Capita Group**

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.
_____________
*
Position added during the period.
**
Position eliminated during the period.


11

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Investment Grade Fixed Income Portfolio
The Federal Reserve Board continued raising the short-term federal funds rate at a “measured” pace, with eight 0.25% increases over the course of the year. This has amounted to 12 consecutive increases, for a total of three percentage points, since the Fed began raising short-term rates in June 2004. Historically, when the Fed has raised short-term rates, longer-term rates have reacted in kind. Longer-term interest rates, however, remained relatively flat. This flattening of the yield curve had the most significant impact on Portfolio performance for the period.

Oil prices continued to surge throughout the course of the year, bringing with them higher energy prices on the whole. Energy markets priced in extreme devastation as Hurricanes Katrina and Rita halted US oil production in the Gulf Coast. Additionally, even though yields on US fixed income securities were at near historic lows, they were still much higher, relative to fixed income securities outside the US. This difference has resulted in huge foreign demand for US fixed income, in turn allowing rates to remain at low levels. Inflation has also continued to remain low; rallies in long-term bonds further suggest that the market is not overly concerned with inflation.

At this time last year, anticipating a rise in yields across the yield curve in response to rising shorter-term interest rates, the Portfolio was positioned defensively, with a shorter duration. Duration is the average amount of time it takes to receive interest and principal on a bond, and is commonly used to measure changes in a bond’s (or a portfolio of bonds) sensitivity to interest rates. At the close of the year, long-term bonds had outperformed shorter-term bonds. We were surprised to see this historically atypical response to rising short-term rates, and expected it to be short-lived. We therefore continued to maintain the portfolio’s defensively shorter duration. Longer-term bonds, however, continued to rally throughout much of the past year, contributing to the Portfolio’s underperformance for the period.

We increased the Portfolio’s exposure to corporate bonds during the year. Earlier in the year we believed that corporate valuations were too rich to continue performing as well as they had been. We expected corporate bond yields to rise, putting downward pressure on prices. Corporate bonds continued to perform well at these already rich levels, and we began to increase the Portfolio’s exposure to the sector. The Portfolio’s earlier defensive underweighting in this sector, however, contributed to the Portfolio’s underperformance for the period. The Portfolio’s large allocation to mortgage-backed securities was significantly reduced prior to declines in the sector. This sector has historically performed well in periods of low interest-rate volatility. We reversed the Portfolio’s position as volatility picked up, avoiding recent negative performance that would have proved to be further detrimental to Portfolio performance.
 
 

__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.
 
 
12
 
Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Investment Grade Fixed Income Portfolio (continued)
 
Diversification of Net Assets (unaudited)
December 31, 2005
         
Percent of Net Assets December 31,
  
Issues
   
Value
  
2005
  
2004
US Government and Government Agency Securities
22
  
$1,172,280
   
42.5
   
54.5
  
Corporate Fixed-Income Securities:
Aerospace and Defense
  
 1
    
80,547
    
2.9
    
0.2
  
Airlines
  
 1
    
32,749
    
1.2
    
—
  
Automobiles
  
—
    
—
    
—
    
1.2
  
Beverages
  
 1
    
19,753
    
0.7
    
0.7
  
Biotechnology
  
 1
    
14,559
    
0.5
    
—
  
Capital Markets
  
 1
    
14,985
    
0.5
    
2.5
  
Chemicals
  
—
    
—
    
—
    
1.4
  
Commercial Banks
  
 2
    
61,265
    
2.2
    
2.9
  
Commercial Services and Supplies
  
—
    
—
    
—
    
0.6
  
Computers and Peripherals
  
—
    
—
    
—
    
0.9
  
Consumer Finance
  
 4
    
107,683
    
3.9
    
7.0
  
Diversified Financial Services
  
 2
    
44,335
    
1.6
    
2.3
  
Diversified Telecommunication Services
  
 1
    
20,013
    
0.7
    
1.3
  
Electric Utilities
  
 5
    
134,167
    
4.9
    
2.9
  
Food and Staples Retailing
  
 1
    
65,455
    
2.4
    
1.3
  
Food Products
  
 2
    
29,273
    
1.1
    
—
  
Health Care Equipment and Supplies
  
 1
    
21,107
    
0.8
    
—
  
Health Care Providers and Services
  
 2
    
68,873
    
2.5
    
1.2
  
Hotels, Restaurants and Leisure
  
 1
    
37,245
    
1.3
    
—
  
Household Durables
  
 4
    
117,679
    
4.3
    
1.1
  
Household Products
  
—
    
—
    
—
    
1.9
  
Independent Power Producers and Energy Traders
  
 1
    
41,029
    
1.5
    
—
  
Insurance
  
 3
    
81,785
    
3.0
    
—
  
Media
  
 1
    
20,449
    
0.7
    
1.9
  
Multi-Utilities
  
 2
    
34,987
    
1.3
    
3.6
  
Oil, Gas and Consumable Fuels
  
 3
    
119,446
    
4.3
    
—
  
Pharmaceuticals
  
 1
    
30,458
    
1.1
    
—
  
Real Estate
  
 1
    
20,152
    
0.7
    
—
  
Specialty Retail
  
 1
    
5,040
    
0.2
    
—
  
Thrifts and Mortgage Finance
  
 1
    
35,108
    
1.3
    
1.3
  
Wireless Telecommunication Services
  
 1
    
14,548
    
0.5
    
2.0
  
Total Corporate Fixed-Income Securities
  
45
    
1,272,690
    
46.1
    
38.2
  
Short-Term Holdings and Other Assets Less Liabilities
  
 3
    
313,230
    
11.4
    
7.3
  
Net Assets
  
70
  
$
2,758,200
    
100.0
    
100.0
  

Largest Portfolio Changes
During the Six Months Ended December 31, 2005
 
Largest Purchases
US Treasury Notes 4.375%, 12/15/2010*
Freddie Mac 5.05%, 12/8/2008*
US Treasury Notes:
3.375%, 10/15/2009*
4.5%, 11/15/2015*
CVS Lease 5.88%, 1/10/2028*
US Treasury Notes:
4.375%, 11/15/2008*
4.25%, 10/31/2007*
Tosco 8.125%, 2/15/2030*
D.R. Horton 5%, 1/15/2009*
Fannie Mae 4.75%, 2/21/2013*
 
Largest Sales
US Treasury Notes 4.25%, 11/15/2014**
Fannie Mae:
5%, 4/6/2010**
4.125%, 6/16/2008**
4.5%, 1/25/2032**
US Treasury Notes 4.125%, 5/15/2015**
Fannie Mae 3.8%, 1/18/2008**
Freddie Mac:
4.375%, 3/1/2010**
6%, 12/1/2032**
4.5%, 11/1/2007**
Fannie Mae 6%, 11/1/2034**

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.

__________
*
Position added during the period.
**
Position eliminated during the period.

 
13
 
Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Large-Cap Value Portfolio

The year 2005 was a period in which we saw continued economic strengthening. Corporate profits continued to grow — reaching levels not seen since the mid-1960s, and corporate balance sheets, overall, were outstanding. Companies continued to put their large cash balances to work buying back stock and raising their dividends. We saw indications of an improving economic picture in Europe and witnessed an impressive economic upswing in Japan. While the Federal Reserve Board continued its policy of monetary tightening, increasing the overnight fed funds rate eight times for a total of two percentage points in 2005, and energy prices hit all-time highs, the markets, in large part, ignored these factors. The resulting overall economic backdrop was quite favorable.

Rising interest rates and increasing energy prices created headwinds for many companies in 2005. Companies with superior pricing power that were able to raise prices in last year’s economic environment enjoyed strong gains. The largest contributor to Portfolio performance for the period was the Energy sector. Energy posted the largest gains for the Russell 1000 Value benchmark, largely due to energy prices soaring to record levels. While the Portfolio was underweight relative to the benchmark, superior stock selection within the sector resulted in returns for the Portfolio more than double the benchmark’s sector return. The Portfolio’s holding with the largest positive contribution to returns in 2005 was an energy company that posted returns in excess of 100% for the year.

The Portfolio’s Industrial stocks delivered strong gains for the period, particularly rail stocks in which the portfolio held a sizable weighting. We were drawn to rail stocks, as they have begun to demonstrate an ability to raise prices, thanks to the huge growth of imported goods arriving in west coast ports from Asia in recent years. Trucks and rails are the most common vehicles for transporting these goods around the country. A shortage of truck drivers, however, has led to an enormous demand for rail car capacity. This increased demand, coupled with improved pricing power, enabled rail stocks to reap significant returns in 2005. Outside of rails, we felt confident that the Industrials sector, in general, would perform well against 2005’s economic backdrop, and weighted the portfolio double that of the benchmark. Our stock selection within the sector, and our weighting conviction that the sector would perform well, paid off, enabling the Portfolio to outperform the benchmark.

Stock selection within Consumer Discretionary added further to the Portfolio’s outperformance. One of the Portfolio’s top-performing companies for the period, also one of the Portfolio’s largest holdings, was a large multiline retailer that delivered robust returns in 2005. Further, the Portfolio was underweight in the sector, which helped investment results, as it was the weakest performing sector in the benchmark for the period. The Financials sector also contributed positively to performance. The Portfolio was underweight, but superior stock selection resulted in sector outperformance for the Portfolio. As value managers, we tend to underweight Health Care, a traditional growth sector. We felt the sector was undervalued, however, and thought that there were many opportunities as the market began to talk about growth. The portfolio was double the benchmark’s weight in Health Care in 2005, and a combination of sector and stock selection resulted in gains for Portfolio nearly double that of the benchmark.

Areas of relative underperformance for the Portfolio were Information Technology, Consumer Staples, and Telecommunications Services, largely attributable to adverse stock selection in each of the three sectors. While the Portfolio was able to post a slight gain in Consumer Staples, the two technology-related sectors detracted from overall performance for the Portfolio.
 

__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.

 
14
 

Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Large-Cap Value Portfolio (continued)

Diversification of Net Assets (unaudited)
December 31, 2005
 
             
Percent of Net Assets December 31,
  
Issues
   
Cost
  
Value
  
2005
  
2004
Common Stocks:
Aerospace and Defense
  
 2
  
$
214,307
  
$
324,180
    
6.3
    
6.1
  
Automobiles
  
—
    
—
    
—
    
—
    
2.8
  
Capital Markets
  
 1
    
183,300
    
159,250
    
3.1
    
4.0
  
Chemicals
  
 4
    
428,839
    
545,222
    
10.5
    
7.0
  
Commercial Banks
  
 2
    
269,097
    
340,865
    
6.6
    
7.0
  
Communications Equipment
  
—
    
—
    
—
    
—
    
2.8
  
Computers and Peripherals
  
 1
    
179,844
    
147,960
    
2.9
    
3.3
  
Diversified Financial Services
  
 1
    
176,519
    
178,605
    
3.4
    
3.3
  
Energy Traders
  
 1
    
69,690
    
126,640
    
2.4
    
3.6
  
Food and Staples Retailing
  
 1
    
108,710
    
148,215
    
2.9
    
3.6
  
Health Care Equipment and Supplies
  
 2
    
274,163
    
323,310
    
6.2
    
5.4
  
Health Care Providers and Services
  
 1
    
126,389
    
136,350
    
2.6
    
—
  
Industrial Conglomerates
  
 2
    
236,005
    
255,640
    
4.9
    
2.7
  
Insurance
  
 3
    
429,270
    
484,725
    
9.3
    
11.7
  
IT Services
  
 1
    
161,474
    
165,000
    
3.2
    
—
  
Machinery
  
 1
    
95,663
    
155,979
    
3.0
    
3.3
  
Multiline Retail
  
 1
    
54,797
    
166,800
    
3.2
    
3.1
  
Oil, Gas and Consumable Fuels
  
 3
    
256,539
    
443,739
    
8.6
    
5.9
  
Paper and Forest Products
  
—
    
—
    
—
    
—
    
3.5
  
Pharmaceuticals
  
 1
    
177,275
    
165,852
    
3.2
    
3.1
  
Road and Rail
  
 2
    
258,272
    
362,868
    
7.0
    
6.3
  
Specialty Retail
  
 1
    
145,554
    
123,480
    
2.4
    
2.0
  
Thrifts and Mortgage Finance
  
 1
    
103,123
    
152,250
    
2.9
    
5.8
  
Tobacco
  
 1
    
77,290
    
164,384
    
3.2
    
3.4
  
Wireless Telecommunication Services
  
 1
     
144,506
    
130,816
     
2.5
    
—
  
   
34
    
4,170,626
    
5,202,130
    
100.3
    
99.7
  
Short-Term Holding and Other Assets Less Liabilities
  
 1
     
(12,507
)
  
(12,507
)
  
(0.3
)
  
0.3
  
Net Assets
  
35
   
$
4,158,119
  
$
5,189,623
    
100.0
    
100.0
  

Largest Portfolio Changes
During the Six Months Ended December 31, 2005
 
Largest Purchases
Sprint Nextel*
Williams Companies*
E. I. du Pont de Nemours*
Tyco International*
Amdocs
The Gap
Rohm and Haas
 
Largest Sales
Georgia-Pacific**
Allstate**
Cisco Systems**
Avon Products**
AES
Altria Group
Prudential Financial
St. Paul Travelers Companies
Honeywell International
Baxter International

Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.

__________
*
Position added during the period.
**
Position eliminated during the period.
 
15
 
Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Smaller-Cap Value Portfolio
The year 2005 was a period in which we saw continued economic strengthening. Corporate profits continued to grow - hitting levels not seen since the mid 1960s, and corporate balance sheets were stellar. Companies continued to put their large cash balances to work in buying back stock and raising their dividends. We saw indications of an improving economic picture in Europe and witnessed an impressive economic upswing in Japan. While the Federal Reserve Board continued its policy of monetary tightening, increasing the overnight fed Portfolios rate eight times for a total of two percentage points in 2005, and energy prices hid all-time highs, the markets, in large part, ignored these factors. The resulting overall economic backdrop was quite favorable.

The past year was a challenging period for the Portfolio. The fourth quarter brought with it outstanding performance, but not enough to overcome the difficult environment presented earlier in the year. Much of the Portfolio’s relative underperformance, compared to the benchmark Russell 2000 Value Index, can be attributed to its holdings in just two sectors: Information Technology and Materials.

Information Technology posted negative returns for both the benchmark and the Portfolio for the period. In addition to the Portfolio’s slight relative overweight, which proved detrimental, stock selection also caused the Portfolio to significantly underperform the benchmark and hurt performance on both an absolute and relative basis.

Stock selection within the Materials sector also contributed negatively to absolute and relative performance. Overall, the sector posted modest, but positive returns for the benchmark, but delivered negative returns for the Portfolio, due in large part to stock selection. We saw a slight slowdown in the second quarter when economic data suggested the economy had hit a “soft patch.” Many hedge Portfolios responded by shorting materials companies, in anticipation of a drop-off. Materials companies fell hard, and when they rebounded, it was to nowhere near where they had been. The Portfolio’s holdings within the Consumer Discretionary and Health Care sectors further detracted from performance for the period. The Portfolio’s largest individual detractor for 2005 was a specialty retail company within the Consumer Discretionary sector that posted exceptionally disappointing results for the period.

Excellent stock selection within the Financials sector, primarily in the insurance industry, contributed positively to Portfolio performance for the period. The Portfolio maintained, on average, less than a 10% weighting in the sector, as compared to the benchmark’s average Financials weighting of over 30%. Returns within the sector for the Portfolio’s holdings significantly outstripped those of the benchmark. The Portfolio also posted strong absolute returns in Energy and Industrials, the two best-performing sectors in the benchmark for the year.
 
 

__________
The views and opinions expressed are those of the Portfolio Manager(s), are provided for general information only, and do not constitute specific tax, legal, or investment advice to, or recommendation for, any person. There can be no guarantee as to the accuracy of market forecasts. Opinions, estimates, and forecasts may be changed without notice.
 
 
16
 
Seligman Portfolios, Inc.
Performance and Portfolio Overview

Seligman Smaller-Cap Value Portfolio (continued)

Diversification of Net Assets (unaudited)
December 31, 2005
             
Percent of Net Assets December 31,
  
Issues
   
Cost
  
Value
  
2005
  
2004
Common Stocks:
Aerospace and Defense
  
 1
  
$
5,332,442
  
$
5,988,000
    
2.5
    
2.5
  
Airlines
  
 1
    
5,117,610
    
8,520,000
    
3.6
    
2.7
  
Beverages
  
 1
    
1,674,794
    
4,196,800
    
1.8
    
1.2
  
Biotechnology
  
 3
    
6,585,944
    
9,935,048
    
4.2
    
4.2
  
Chemicals
  
 6
    
22,461,733
    
27,919,050
    
11.9
    
14.9
  
Commercial Services and Supplies
  
 3
    
9,378,217
    
16,980,600
    
7.2
    
10.0
  
Communications Equipment
  
 1
    
4,507,845
    
3,438,450
    
1.5
    
2.4
  
Computers and Peripherals
  
—
    
—
    
—
    
—
    
2.8
  
Containers and Packaging
  
 1
    
3,247,402
    
3,398,400
    
1.4
    
0.9
  
Diversified Consumer Services
  
 1
    
3,749,693
    
7,344,000
    
3.1
    
—
  
Electrical Equipment
  
 1
    
3,826,714
    
3,991,544
    
1.7
    
1.5
  
Electronic Equipment and Instruments
  
 1
    
2,475,574
    
5,674,400
    
2.4
    
2.2
  
Energy Equipment and Services
  
 2
    
7,980,496
    
10,989,600
    
4.7
    
4.3
  
Food Products
  
 1
    
1,879,289
    
5,094,900
    
2.2
    
1.9
  
Health Care Providers and Services
  
 2
    
10,815,049
    
9,300,113
    
4.0
    
6.7
  
Hotels, Restaurants and Leisure
  
 4
    
17,823,191
    
16,798,050
    
7.1
    
2.2
  
Household Durables
  
 1
    
1,115,422
    
4,892,500
    
2.1
    
2.3
  
Insurance
  
 3
    
10,885,002
    
16,525,335
    
7.0
    
5.3
  
IT Services
  
 1
    
7,348,104
    
3,220,750
    
1.4
    
1.8
  
Machinery
  
 3
    
14,679,654
    
18,264,500
    
7.8
    
6.9
  
Media
  
 1
    
3,027,248
    
5,438,848
    
2.3
    
1.1
  
Metals and Mining
  
—
    
—
    
—
    
—
    
2.4
  
Multiline Retail
  
 1
    
6,672,606
    
5,195,200
    
2.2
    
1.8
  
Oil, Gas and Consumable Fuels
  
 1
    
763,052
    
3,708,900
    
1.6
    
—
  
Paper and Forest Products
  
 1
    
2,774,501
    
1,843,200
    
0.8
    
0.9
  
Pharmaceuticals
  
 1
    
5,305,452
    
4,777,750
    
2.0
    
2.1
  
Road and Rail
  
 1
    
1,911,832
    
5,652,500
    
2.4
    
1.9
  
Semiconductors and Semiconductor Equipment
  
 3
    
15,533,117
    
13,302,460
    
5.7
    
4.1
  
Software
  
—
    
—
    
—
    
—
    
3.3
  
Specialty Retail
  
 3
    
16,532,214
    
13,080,375
    
5.6
    
2.4
  
Thrifts and Mortgage Finance
  
—
     
—
     
—
    
—
     
3.4
  
   
49
    
193,404,197
    
235,471,273
    
100.2
    
100.1
  
Short-Term Holding and Other Assets Less Liabilities
   
 1
     
(510,210
)
  
(510,210
)
  
(0.2
)
  
(0.1
)
Net Assets
  
50
   
$
192,893,987
  
$
234,961,063
     
100.0
    
100.0
  


Largest Portfolio Changes
During the Six Months Ended December 31, 2005
 
Largest Purchases
ATI Technologies*
Landry’s Restaurants*
Penn National Gaming*
Keryx Biopharmaceuticals*
HealthSouth
Smurfit-Stone Container
Pacific Sunwear of California
CV Therapeutics
Cadmus Communications
 
Largest Sales
York International**
Peabody Energy
Brocade Communications Systems**
Protein Design Labs
Extreme Networks**
Brink’s
Montpelier Re Holdings**
Universal Compression Holdings
Continental Airlines
Plantronics


Largest portfolio changes from the previous period to the current period are based on cost of purchases and proceeds from sales of securities, listed in descending order.

__________
*
Position added during the period.
**
Position eliminated during the period.
 
17
 

Seligman Portfolios, Inc.
Benchmarks

Lipper Averages

Corporate Debt Funds BBB-Rated is an average of funds that invest primarily in corporate and government debt issues rated in the top four grades.

Global Funds is an average of funds that invest at least 25% of its portfolio in securities traded outside of the United States and that may own U.S. securities as well.

International Funds is an average of funds that invest their assets in securities with primary trading markets outside of the United States.

International Multi-Cap Growth Funds is an average of funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have 25% to 75% of their assets invested in companies strictly outside of the United States with market capitalizations (on a three-year weighted basis) greater than the 250th-largest company in the S&P/Citigroup World ex-U.S. Broad Market Index. Multi-cap growth funds typically have an above-average price-to-cash flow ratio, price-to-book ratio, and three-year sales-per-share growth value compared to the S&P/Citigroup World ex-U.S. BMI.

Large-Cap Core Funds is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($14.2 billion as of December 31, 2005). Large-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500 Index.

Large-Cap Value Funds is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) greater than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($14.2 billion as of December 31, 2005). Large-cap value funds typically have a below average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P 500 Index.

Mid-Cap Funds is an average of funds that by prospectus or portfolio practice invest primarily in companies with market capitalizations less than $5 billion at the time of purchase.

Mid-Cap Growth Funds is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($14.2 billion as of December 31, 2005). Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P MidCap 400 Index.

Multi-Cap Value Funds is an average of funds that, by portfolio practice, invest in a variety of market capitalization ranges without concentrating 75% of their equity assets in any one market capitalization range over an extended period of time. Multi-cap funds typically have between 25% to 75% of their assets invested in companies with market capitalizations (on a three-year weighted basis) over 300% of the dollar-weighted median market capitalization of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($14.2 billion as of December 31, 2005). Multi-cap value funds typically have a below-average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SuperComposite 1500 Index

Science & Technology Funds is an average of funds that invest at least 65% of their equity portfolios in science and technology stocks.

Small-Cap Core Funds is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the smallest 500 of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($3.4 billion as of December 31, 2005). Small-cap core funds have more latitude in the companies in which they invest. These funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index.

Small-Cap Value Funds is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) less than 250% of the dollar-weighted median of the middle 1,000 securities of the S&P SuperComposite 1500 Index ($3.4 billion as of December 31, 2005). Small-cap value funds typically have a below average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value, compared to the S&P SmallCap 600 Index.

_____________
See footnotes on page 19.

18

Seligman Portfolios, Inc.
Benchmarks

Indices

Goldman Sachs Technology Indexes are a family of equity indexes designed as equity benchmarks for U.S. traded technology and internet-related securities.

Lehman Brothers Government Bond Index is composed of all publicly issued, nonconvertible, domestic debt of the US government or any agency thereof, quasi-federal corporations, or corporate debt guaranteed by the US government.

Lehman Brothers Government/Credit Index is composed of all bonds that are investment grade (rated Baa or higher by Moody’s or BBB or higher by S&P, if unrated by Moody’s), with at least one year to maturity.

MSCI EAFE (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the US and Canada. As of May 2005, it consisted of 21 developed market country indices.

MSCI World Index is a free float-adjusted market capitalization index that is designed to measure global developed market equity performance. As of December 2005, it consisted of 23 developed market country indices.

MSCI World Information Technology Index is a free float-adjusted market capitalization index designed to measure information technology stocks in the global developed equity market.

Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell Midcap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted values. The stocks are also members of the Russell 1000 Growth Index.

S&P 500 Index measures the performance of 500 of the largest US companies based on market capitalization.

_____________
Adapted from materials from the websites of Lipper, Goldman Sachs, Lehman, Morgan Stanley, Russell, and Standard & Poor’s.

The averages and indices are unmanaged benchmarks that assume reinvestment of distributions. The performance of the averages and indices excludes the effect of taxes and sales charges. The performance of the indices also excludes fees. Investors cannot invest directly in an average or an index.


19

Seligman Portfolios, Inc.
Understanding and Comparing
Your Portfolio’s Expenses

As an investor in a Portfolio of the Fund, you incur ongoing expenses, such as management fees, distribution and/or service (12b-1) fees, and other fund expenses. The information below is intended to help you understand your ongoing expenses (in dollars) of investing in a Portfolio and to compare them with the ongoing expenses of investing in other mutual funds. Please note that the expenses shown in the table are meant to highlight your ongoing expenses of investing in a Portfolio only and do not reflect any costs that may be charged by insurance companies’ separate accounts or by any pension or retirement plan. Therefore, the table is useful in comparing ongoing expenses only, and will not help you to determine the relative total expenses of owning different funds. In addition, if these costs were included, your total expenses would have been higher.

The table is based on an investment of $1,000 invested at the beginning of July 1, 2005 and held for the entire six-month period ended December 31, 2005.

Actual Expenses

The table below provides information about actual expenses and actual account values. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value at the beginning of the period by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” for the share class of the Portfolio that you own to estimate the expenses that you paid on your account during the period.

Hypothetical Example for Comparison Purposes

The table below also provides information about hypothetical expenses and hypothetical account values based on the actual expense ratio of each Portfolio’s class and an assumed rate of return of 5% per year before expenses, which is not the actual return of any Portfolio. The hypothetical expenses and account values may not be used to estimate the ending account value or the actual expenses you paid for the period. You may use this information to compare the ongoing expenses of investing in a Portfolio and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

               
Actual
  
Hypothetical
Portfolio
  
Beginning
Account
Value
7/1/05
     
Annualized
Expense
Ratio*
   
Annualized
Expense
Reimbursement
Ratio†
   
Ending
Account
Value
12/31/05
   
Expenses Paid
During Period**
7/1/05 to
12/31/05
   
Ending
Account
Value
12/31/05
   
Expenses Paid
During Period**
7/1/05 to
12/31/05
Capital
                              
Class 1
  
$
1,000.00
    
1.00
%
      
$
1,092.80
  
$
5.28
  
$
1,020.16
  
$
5.09
  
Class 2
    
1,000.00
    
1.25
          
1,090.50
    
6.59
    
1,018.90
    
6.36
  
Cash Management
    
1,000.00
    
0.70
          
1,014.50
    
3.55
    
1,021.68
    
3.57
  
Common Stock
    
1,000.00
    
0.91
          
1,037.60
    
4.67
    
1,020.62
    
4.63
  
Communications and Information
                                            
Class 1
    
1,000.00
    
1.09
          
1,117.10
    
5.82
    
1,019.71
    
5.55
  
Class 2
    
1,000.00
    
1.34
          
1,116.40
    
7.15
    
1,018.45
    
6.82
  
Global Technology
                                            
Class 1
    
1,000.00
    
1.90
    
0.61%
 
  
1,133.80
    
10.22
    
1,015.63
    
9.65
  
Class 2
    
1,000.00
    
2.05
    
0.61
    
1,133.10
    
11.02
    
1,014.87
    
10.41
  
International Growth
    
1,000.00
    
2.00
    
2.51
    
1,139.80
    
10.79
    
1,015.12
    
10.16
  
Investment Grade
    
1,000.00
    
0.85
    
1.05
    
991.30
    
4.27
    
1,020.92
    
4.33
  
Large-Cap Value
    
1,000.00
    
1.31
          
1,078.90
    
6.86
    
1,018.60
    
6.67
  
Smaller-Cap Value
                                            
Class 1
    
1,000.00
    
1.13
          
1,042.40
    
5.82
    
1,019.51
    
5.75
  
Class 2
    
1,000.00
    
1.32
          
1,042.00
    
6.79
    
1,018.55
    
6.72
  

__________
*
Expenses of Class 2 shares differ from the expenses of Class 1 shares due to the differences in 12b-1 fees paid. See the Fund’s prospectus for a description of each share class and its expenses.
**
Expenses are equal to the Portfolio’s annualized expense ratio based on actual expenses for the period July 1, 2005 to December 31, 2005, multiplied by the average account value over the period, multiplied by 184/365 (number of days in the period).
†
The Manager, at its discretion, has agreed to reimburse expenses, other than management and 12b-1 fees, that exceed a certain rate per annum of the average daily net assets of certain Portfolios. Absent such reimbursement, the expense ratios and expenses paid for the period would have been higher. See Note 4 to the Financial Statements on page 46 of this report for additional information.
 


20

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Capital Portfolio
 

   
Shares
  
Value
Common Stocks 96.8%
Aerospace and Defense 1.4%
Precision Castparts
    
2,200
  
$
113,982
  
Rockwell Collins
    
1,500
    
69,705
  
           
183,687
   
Air Freight and Logistics 0.4%
Expeditors International of Washington
    
800
    
53,972
   
Airlines 1.0%
Southwest Airlines
    
8,400
    
138,012
  
Auto Components 2.3%
BorgWarner
    
2,900
    
175,827
  
Gentex
    
6,600
    
128,601
   
           
304,428
  
Biotechnology 4.3%
Biogen Idec*
    
1,400
    
63,427
  
Celgene*
    
1,300
    
84,234
  
Cubist Pharmaceuticals*
    
2,300
    
48,794
  
Genomic Health*
    
2,400
    
21,828
  
Invitrogen*
    
800
    
53,308
  
Martek Biosciences*
    
3,400
    
83,657
  
MedImmune*
    
3,050
    
106,704
  
OSI Pharmaceuticals*
    
2,300
    
64,481
  
Telik*
    
2,500
    
42,487
   
           
568,920
   
Capital Markets 3.1%
Legg Mason
    
900
    
107,721
  
Northern Trust
    
3,300
    
170,890
  
T. Rowe Price Group
    
1,900
    
136,648
   
           
415,259
   
Chemicals 1.7%
Ecolab
    
3,900
    
141,453
  
Huntsman*
    
4,900
    
84,378
   
           
225,831
   
Commercial Banks 0.8%
Synovus Financial
    
3,800
    
102,638
   
Commercial Services and Supplies 5.3%
Cintas
    
6,400
    
263,168
  
Corrections Corporation of America*
    
4,200
    
188,874
  
Herman Miller
    
9,000
    
253,755
  
           
705,797
   
Communications Equipment 0.6%
CIENA*
    
26,700
    
78,365
   
Computers and Peripherals 3.4%
Electronics for Imaging*
    
6,200
    
164,610
  
Network Appliance*
    
2,300
    
62,112
  
SanDisk*
    
900
    
56,502
  
Seagate Technology*
    
3,600
    
71,964
  
Sun Microsystems*
    
24,400
    
101,382
   
           
456,570
   
 

   
Shares
  
Value
           
Construction and Engineering 3.1%
Fluor
    
1,600
  
$
123,616
  
Jacobs Engineering Group*
    
4,300
    
291,841
   
           
415,457
   
Containers and Packaging 1.3%
Temple-Inland
    
3,800
    
170,430
   
Diversified Financial Services 1.6%
Chicago Mercantile Exchange Holdings
    
300
    
110,247
  
Moody’s
    
1,700
    
104,414
   
           
214,661
   
Electrical Equipment 0.5%
Rockwell Automation
    
1,200
    
70,992
   
Electronic Equipment and Instruments 0.9%
Agilent Technologies*
    
3,800
    
126,502
  
Energy Equipment and Services 2.6%
BJ Services
    
4,000
    
146,680
  
Patterson-UTI Energy*
    
2,000
    
65,770
  
Smith International
    
3,700
    
137,307
   
           
349,757
   
Energy Traders 0.6%
AES*
    
5,400
    
85,482
   
Food Products 3.2%
Dean Foods*
    
2,800
    
105,448
  
McCormick
    
4,100
    
126,772
  
Smithfield Foods*
    
2,200
    
67,320
  
J.M. Smucker
    
2,900
    
127,600
   
           
427,140
   
Gas Utilities 0.3%
Equitable Resources
    
1,100
    
40,359
   
Health Care Equipment and Supplies 3.8%
Beckman Coulter
    
1,100
    
62,590
  
Biomet
    
3,700
    
135,198
  
Conor Medsystems*
    
2,600
    
50,284
  
Cooper Companies
    
1,900
    
97,470
  
I-Flow*
    
4,200
    
61,341
  
Mentor
    
1,100
    
50,688
  
SonoSite*
    
1,500
    
52,470
   
           
510,041
   
Health Care Providers and Services 5.3%
Caremark Rx*
    
1,300
    
67,327
  
Coventry Health Care*
    
700
    
39,872
  
Eclipsys*
    
3,600
    
68,094
  
eResearch Technology*
    
3,300
    
49,847
  
Express Scripts*
    
1,500
    
125,692
  
Health Net*
    
1,100
    
56,705
  
IMS Health
    
4,100
    
102,172
  
Laboratory Corporation of America Holdings*
    
1,000
    
53,850
  

__________
See footnotes on page 36.

21

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Capital Portfolio (continued)

   
Shares
  
Value
Health Care Providers and Services (continued)
LifePoint Hospitals*
    
1,200
  
$
44,994
  
Quest Diagnostics
    
700
    
36,036
  
The TriZetto Group*
    
3,700
    
62,882
   
           
707,471
   
Hotels, Restaurants and Leisure 5.7%
Cheesecake Factory*
    
3,000
    
112,035
  
Hilton Hotels
    
6,400
    
154,304
  
International Game Technology
    
3,000
    
92,340
  
Outback Steakhouse
    
4,600
    
191,406
  
Sonic*
    
4,500
    
132,638
  
Starwood Hotels & Resorts Worldwide
    
1,200
    
76,632
   
           
759,355
   
Insurance 2.3%
Arch Capital Group*
    
1,300
    
71,220
  
PartnerRe
    
1,700
    
111,639
  
Philadelphia Consolidated Holding*
    
600
    
57,924
  
RLI
    
1,200
    
59,844
     
           
300,627
   
Internet and Catalog Retail 0.7%
Blue Nile*
    
2,200
    
88,671
   
Internet Software and Services 0.9%
Marchex (Class B)*
    
5,400
    
121,365
   
IT Services 5.0%
Cognizant Technology Solutions (Class A)*
    
2,300
    
115,575
  
Euronet Worldwide*
    
7,400
    
205,757
  
Fiserv*
    
1,500
    
64,838
  
Iron Mountain*
    
1,500
    
63,330
  
Paychex
    
3,400
    
129,625
  
Satyam Computer Services (ADR)
    
2,400
    
87,816
   
           
666,941
   
Machinery 0.5%
ITT Industries
    
600
    
61,692
   
Media 0.5%
Sirius Satellite Radio*
    
10,400
    
69,524
    
Metals and Mining 1.0%
Freeport-McMoRan Copper & Gold (Class B)
    
1,400
    
75,320
  
Phelps Dodge
    
400
    
57,548
   
           
132,868
   
Multiline Retail 1.5%
Family Dollar Stores
    
5,500
    
136,345
  
Nordstrom
    
1,700
    
63,580
   
           
199,925
   
Oil, Gas and Consumable Fuels 5.2%
EOG Resources
    
2,600
    
190,762
  
Kinder Morgan
    
700
    
64,365
  
Noble Energy
    
4,500
    
181,350
  
Peabody Energy
    
700
    
57,694
  
Sunoco
    
1,000
    
78,380
  

 
   
Shares
  
Value
  
Oil, Gas and Consumable Fuels (continued)
XTO Energy
    
2,933
  
$
128,876
   
           
701,427
   
Personal Products 2.7%
Chattem*
    
4,100
    
149,178
  
NBTY*
    
13,000
    
211,250
   
           
360,428
   
Pharmaceuticals 4.6%
Allergan
    
1,000
    
107,960
  
Barr Laboratories*
    
1,300
    
80,977
  
Forest Laboratories*
    
4,400
    
178,992
  
K-V Pharmaceutical (Class A)*
    
3,200
    
65,920
  
Medicis Pharmaceutical (Class A)
    
800
    
25,640
  
Sepracor*
    
1,600
    
82,504
  
Taro Pharmaceutical Industries*
    
4,800
    
66,984
   
           
608,977
   
Semiconductors and Semiconductor Equipment 4.6%
Advanced Micro Devices*
    
1,500
    
45,900
  
Analog Devices
    
3,000
    
107,610
  
ATI Technologies*
    
2,400
    
40,740
  
Broadcom (Class A)*
    
3,900
    
183,612
  
KLA-Tencor
    
1,300
    
64,097
  
Linear Technology
    
1,900
    
68,438
  
Marvell Technology Group*
    
1,400
    
78,519
  
Maxim Integrated Products
    
700
    
25,354
   
           
614,270
   
Software 4.8%
Activision*
    
7,100
    
97,448
  
Autodesk
    
1,800
    
77,283
  
Business Objects (ADR)*
    
4,300
    
173,870
  
Cogent*
    
9,400
    
212,816
  
Intuit*
    
1,500
    
80,032
   
           
641,449
   
Specialty Retail 7.7%
Abercrombie & Fitch (Class A)
    
3,100
    
202,058
  
Bed Bath & Beyond*
    
2,600
    
94,003
  
Chico’s FAS*
    
3,900
    
171,327
  
Guitar Center*
    
2,100
    
105,010
  
Ross Stores
    
2,300
    
66,389
  
TJX
    
3,100
    
72,013
  
Tractor Supply*
    
3,300
    
174,636
  
Volcom*
    
4,200
    
142,632
   
           
1,028,068
   
Textiles, Apparel and Luxury Goods 0.3%
Coach*
    
1,400
    
46,676
   
Wireless Telecommunication Services 1.3%
American Tower (Class A)*
    
3,000
    
81,300
  
NII Holdings (Class B)*
    
2,200
    
96,019
   
           
177,319
  
_____________
See footnotes on page 36.

22

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Capital Portfolio (continued)

   
Principal
Amount
  
Value
Total Common Stocks (Cost $11,652,346)
        
$
12,931,353
   
Repurchase Agreement 5.5%
State Street Bank 3.15%, dated 12/30/2005, maturing 1/3/2006, in the amount of $740,259,
collateralized by: $775,000 US Treasury Notes 3.25%, 1/15/2009, with a fair market value
of $762,401 (Cost $740,000)
  
$
740,000
    
740,000
   
 

   
Value
  
Total Investments 102.3% (Cost $12,392,346)
  
 $
 13,671,353
  
Other Assets Less Liabilities (2.3)%
    
(311,541
)
Net Assets 100.0%
  
$
13,359,812
  
 
Seligman Cash Management Portfolio

   
Annualized Yield on
Purchase Date
  
Principal
Amount
  
Value
Fixed Time Deposits 39.9%
ABN AMRO Bank, Grand Cayman
              
4.06%, 1/4/2006
    
4.12
%
$
750,000
  
$
750,000
  
Bank of Montreal, Toronto
                    
4.32%, 1/3/2006
    
4.38
    
760,000
    
760,000
  
Bank of Novia Scotia, Toronto
                    
4%, 1/3/2006
    
4.06
    
760,000
    
760,000
  
BNP Paribas, Grand Cayman
                    
4.31%, 1/3/2006
    
4.37
    
760,000
    
760,000
  
Citibank, N.A., Nassau
                    
4%, 1/3/2006
    
4.06
    
760,000
    
760,000
  
Dexia Credit Local, Grand Cayman
                    
4.33%, 1/3/2006
    
4.39
    
760,000
    
760,000
  
Rabobank, Grand Cayman
                    
4.15%, 1/4/2006
    
4.21
    
750,000
    
750,000
  
Royal Bank of Scotland, Grand Cayman
                    
4.125%, 1/4/2006
    
4.18
    
750,000
    
750,000
   
Total Fixed Time Deposits
                    
(Cost $6,050,000)
                
6,050,000
  
US Government and Government Agency Securities 31.6%
  
US Government Securities 11.9%
                    
US Treasury Bills:
                    
3.99%, 1/17/2006
    
4.05
    
800,000
    
798,758
  
3.37%, 1/26/2006
    
3.42
    
1,000,000
    
997,660
  
                 
1,796,418
  
Government Agency Securities 19.7%
Fannie Mae 4.2%, 2/1/2006
    
4.26
    
1,000,000
    
996,383
  
Federal Home Loan Bank
                    
4%, 1/4/2006
    
4.06
    
1,000,000
    
999,667
  


   
Annualized
Yield on
Purchase Date
  
Principal
Amount
  
Value
  
Government Agency Securities (continued)
Freddie Mac 4.1%, 1/24/2006
    
4.16
%
$
1,000,000
  
$
997,381
  
                 
2,993,431
  
 
                    
Total US Government and Government Agency Securities
                    
(Cost $4,789,849)
                
4,789,849
   
Repurchase Agreement 18.8%
State Street Bank 3.15%,
                    
dated 12/30/2005, maturing 1/3/2006, in the amount of
                    
$2,851,998, collateralized by: $2,990,000 US Treasury Notes
                    
3.25%, 1/15/2009, with a fair market value of $2,941,392
                    
(Cost $2,851,000)
    
3.19
    
2,851,000
    
2,851,000
  
Commercial Paper 15.2%
AIG Funding 4.23%, 1/18/2006
    
4.29
    
770,000
    
768,466
  
American Express Credit
                    
4.24%, 2/2/2006
    
4.30
    
770,000
    
767,098
  
General Electric Capital
                    
4.25%, 1/13/2006
    
4.31
    
770,000
    
768,909
  
Total Commercial Paper
                    
(Cost $2,304,473)
                
2,304,473
  
Total Investments 105.5% (Cost $15,995,322)
                
15,995,322
  
Other Assets Less Liabilities (5.5)%
                
(840,851
)
Net Assets 100.0%
                  
$
15,154,471
  
_____________
See footnotes on page 36.

23

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Common Stock Portfolio

   
Shares or
Warrants
  
Value
  
Common Stocks and Warrants 95.9%
Aerospace and Defense 1.5%
General Dynamics
    
300
 shs.
$
34,215
  
Honeywell International
    
2,300
    
85,675
   
           
119,890
   
Air Freight and Logistics 0.5%
FedEx
    
400
 (1)
  
41,356
   
Beverages 2.0%
Coca-Cola
    
1,800
    
72,558
  
Coca-Cola Enterprises
    
1,700
    
32,589
  
PepsiCo
    
1,000
    
59,080
   
           
164,227
   
Biotechnology 1.7%
Amgen*
    
900
    
70,884
  
Pharmion*
    
3,700
    
65,878
   
           
136,762
   
Building Products 0.4%
Masco
    
1,100
    
33,209
   
Capital Markets 2.6%
Bank of New York
    
2,200
    
70,070
  
Goldman Sachs Group
    
330
    
42,144
  
Merrill Lynch
    
900
    
60,957
  
Morgan Stanley
    
690
    
39,151
   
           
212,322
   
Chemicals 2.4%
Dow Chemical
    
1,300
    
56,966
  
E. I. du Pont de Nemours
    
2,000
    
85,000
  
Praxair
    
1,100
    
58,256
   
           
200,222
   
Commercial Banks 3.3%
Bank of America
    
4,140
    
191,061
  
Wachovia
    
1,540
    
81,404
   
           
272,465
   
Commercial Services and Supplies 1.8%
Cendant
    
4,900
    
84,525
  
Waste Management
    
2,100
    
63,735
   
           
148,260
   
Communications Equipment 6.0%
Cisco Systems*
    
7,270
    
124,208
  
Corning*
    
4,400
    
86,504
  
Lucent Technologies*
    
23,100
    
61,446
  
Lucent Technologies* (exercise price of $2.75, expiring 12/10/2007)
    
31,520
  wts.  
17,888
  
Nokia (ADR)
    
8,300
  shs.  
151,890
  
QUALCOMM
    
1,200
    
51,606
   
           
493,542
   
Computers and Peripherals 4.0%
Apple Computer*
    
400
 (1)
  
28,692
  
Dell*
    
980
    
29,346
  
EMC*
    
4,700
    
64,014
  


   
Shares
  
Value
  
Computers and Peripherals (continued)
International Business Machines
    
2,020
  
$
166,044
  
Seagate Technology*
    
1,900
    
37,981
   
           
326,077
   
Containers and Packaging 1.2%
Smurfit-Stone Container*
    
7,000
    
99,120
   
Diversified Consumer Services 0.5%
ServiceMaster
    
3,200
    
38,240
   
Diversified Financial Services 5.3%
CIT Group
    
700
    
36,246
  
Citigroup
    
5,060
    
245,562
  
JPMorgan Chase
    
3,840
    
152,410
   
           
434,218
   
Diversified Telecommunication Services 2.5%
BellSouth
    
5,200
    
140,920
  
Citizens Communications
    
5,300
    
64,819
   
           
205,739
   
Food and Staples Retailing 3.7%
Albertson's
    
6,500
    
138,775
  
CVS
    
2,400
    
63,408
  
Wal-Mart Stores
    
2,210
    
103,428
   
           
305,611
   
Food Products 0.3%
McCormick
    
900
    
27,828
   
Health Care Equipment and Supplies 1.3%
Boston Scientific*
    
2,000
    
48,980
  
Medtronic
    
1,000
    
57,570
   
           
106,550
   
Health Care Providers and Services 1.4%
HCA
    
900
    
45,450
  
WellPoint*
    
900
    
71,811
   
           
117,261
   
Hotels, Restaurants and Leisure 1.1%
Applebee's International
    
1,500
    
33,885
  
McDonald's
    
1,700
    
57,324
   
           
91,209
   
Household Products 0.5%
Procter & Gamble
    
705
    
40,805
   
Industrial Conglomerates 5.0%
General Electric
    
8,210
    
287,761
  
Tyco International
    
4,420
    
127,561
   
           
415,322
   
Insurance 3.2%
American International Group
    
2,200
    
150,106
  
Prudential Financial
    
800
    
58,552
  
XL Capital (Class A)
    
800
    
53,905
   
           
262,563
   

__________
See footnotes on page 36.

24

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Common Stock Portfolio (continued)

   
Shares
  
Value
  
Internet Software and Services 2.3%
Google (Class A)*
    
300
 (1)
$
124,471
  
Symantec*
    
3,785
    
66,256
  
           
190,727
   
IT Services 0.8%
Amdocs*
    
2,300
    
63,250
   
Machinery 1.5%
Deere
    
530
    
36,098
  
Illinois Tool Works
    
990
    
87,110
   
           
123,208
   
Media 5.3%
Clear Channel Communications*
    
1,320
    
41,514
  
Comcast (Class A)*
    
2,600
    
67,366
  
Walt Disney
    
900
    
21,573
  
News Corp. (Class B)
    
4,400
    
68,420
  
Time Warner*
    
6,390
    
111,442
  
Univision Communications (Class A)*
    
2,180
    
64,070
  
Viacom (Class B)*
    
1,800
    
58,680
   
           
433,065
   
Metals and Mining 0.6%
Alcoa
    
1,600
    
47,312
   
Multi-Utilities 0.4%
Dominion Resources
    
400
    
30,880
   
Multiline Retail 1.6%
Dollar General
    
4,600
    
87,722
  
Federated Department Stores
    
700
    
46,431
   
           
134,153
   
Oil, Gas and Consumable Fuels 4.9%
Chevron
    
1,900
    
107,863
  
ConocoPhillips
    
1,600
    
93,088
  
Exxon Mobil
    
3,250
    
182,553
  
Pogo Producing
    
400
    
19,924
   
           
403,428
   
Personal Products 0.4%
Avon Products
    
1,200
    
34,260
   
Pharmaceuticals 10.3%
Abbott Laboratories
    
1,000
    
39,430
  
Andrx*
    
4,400
    
72,490
  
Forest Laboratories*
    
1,700
    
69,156
  
Johnson & Johnson
    
2,180
    
131,018
  
Eli Lilly
    
800
    
45,272
  
Merck
    
1,400
    
44,534
  
Novartis (ADR)
    
800
    
41,984
  
Pfizer
    
7,600
    
177,232
  
Sanofi-Aventis (ADR)
    
1,100
    
48,290
  
Valeant Pharmaceuticals International
    
3,700
    
66,896
  
Wyeth
    
2,470
    
113,793
   
           
850,095
   

   
Shares or
Shares
Subject to
Call/Put
  
Value
Semiconductors and Semiconductor Equipment 2.3%
Broadcom (Class A)*
    
900
 shs. (1)
$
42,372
  
Intel
    
2,360
    
58,752
  
Maxim Integrated Products
    
2,400
    
86,928
   
           
188,052
   
Software 4.4%
Business Objects (ADR)*
    
1,000
    
40,435
  
Mercury Interactive*
    
2,400
    
66,708
  
Microsoft
    
9,870
    
257,755
   
           
364,898
   
Specialty Retail 1.9%
The Gap
    
2,400
    
42,336
  
Home Depot
    
1,600
    
64,768
  
Limited Brands
    
2,300
    
51,405
   
           
158,509
   
Thrifts and Mortgage Finance 1.3%
Fannie Mae
    
1,100
    
53,691
  
Freddie Mac
    
800
    
52,280
   
           
105,971
   
Tobacco 3.2%
Altria Group
    
2,670
    
199,502
  
UST
    
1,500
    
61,245
   
           
260,747
   
Wireless Telecommunication Services 2.5%
American Tower (Class A)*
    
3,200
    
86,720
  
Nextel Partners (Class A)*
    
1,500
    
41,895
  
Sprint Nextel
    
3,300
    
77,088
   
           
205,703
   
Total Common Stocks and Warrants (Cost $7,752,409)
          
7,887,056
   
Options Purchased* 1.9%
Beverages 0.2%
Coca-Cola Enterprises, Call expiring
              
January 2006 at $15
    
2,400
    
14,520
   
Chemicals 0.1%
E.I. du Pont de Nemours, Call expiring
              
January 2006 at $35
    
600
    
5,850
   
Communications Equipment 0.2%
Cisco Systems, Call expiring January 2006 at $17.50
    
4,400
    
14,080
  
Corning, Call expiring January 2006 at $20
    
1,500
    
750
   
           
14,830
   

__________
See footnotes on page 36.


25


Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Common Stock Portfolio (continued)

   
Shares
Subject to
Call/Put or
Principal
Amount
  
Value
  
Food and Staples Retailing 0.0%
Albertson’s, Call expiring March 2006 at $25
    
900
  shs.
$
270
   
Industrial Conglomerates 0.1%
Tyco International, Call expiring January 2006 at $25
    
1,100
    
7,975
   
Internet Software and Services 0.1%
Google (Class A), Put expiring March 2006 at $400
    
300
    
5,580
   
Media 0.1%
Walt Disney, Call expiring January 2008 at $20
    
1,000
    
6,500
   
Pharmaceuticals 0.5%
Andrx, Call expiring January 2006 at $15
    
3,200
    
16,640
  
Pfizer, Call expiring January 2006 at $17.50
    
3,600
    
24,120
   
           
40,760
   
Semiconductors and Semiconductor Equipment 0.0%
Broadcom (Class A), Put expiring February 2006 at $47.50
    
900
    
2,700
   
Software 0.2%
Mercury Interactive, Call expiring January 2006 at $20
    
1,800
    
20,070
  
Thrifts and Mortgage Finance 0.3%
Freddie Mac, Call expiring January 2008 at $50
    
700
    
13,615
  
Freddie Mac, Call expiring January 2008 at $55
    
800
    
12,760
   
           
26,375
   
Tobacco 0.1%
UST, Call expiring July 2006 at $35
    
900
    
6,120
   
Wireless Telecommunication Services 0.0%
Nextel Partners (Class A), Call expiring January 2006 at $25
    
1,400
    
4,480
   
Total Options Purchased (Cost $148,283)
          
156,030
   
US Government Securities 0.4% (Cost $29,843)
              
US Treasury Notes 3.375%, 2/28/2007
  
$
30,000
 (1)
  
29,644
   
 

 
   
Principal
Amount
  
Value
  
Short-Term Holdings 1.5%
US Government Securities 1.3%
US Treasury Notes:
              
1.875%, 1/31/2006
  
$
80,000
 (1)
$
79,873
  
2.25%, 4/30/2006
    
25,000
 (1)
  
24,845
   
           
104,718
   
Repurchase Agreement 0.2%
State Street Bank 3.15%, dated 12/30/2005, maturing 1/3/2006, in the amount of
$18,006, collateralized by: $20,000 US Treasury Notes 6%, 8/15/2009,
with a fair market value of $21,553
    
18,000
    
18,000
   
Total Short-Term Holdings (Cost $122,751)
          
122,718
   
               
Total Investments 99.7% (Cost $8,053,286)
          
8,195,448
  
Other Assets Less Liabilities 0.3%
          
23,653
   
Net Assets 100.0%
            
$
8,219,101
     
 

 
   
Shares
Subject to
Call/Put
  
Value
Options Written
Call Options Written
              
Apple Computer, expiring January 2006 at $62.5
    
400
  
$
(4,160
)
Broadcom (Class A), expiring February 2006 at $52.50
    
900
    
(765
)
FedEx, expiring February 2006 at $105
    
400
    
(1,020
)
Google (Class A), expiring March 2006 at $450
    
300
    
(4,470
)
           
(10,415
)
Put Options Written
              
Aetna, expiring January 2006 at $92.50
    
400
    
(420
)
Albertson’s, expiring March 2006 at $25
    
900
    
(3,600
)
Mercury Interactive, expiring January 2006 at $25
    
1,200
    
(660
)
           
(4,680
)
Total Options Written (Premiums received $14,464)
        
$
(15,095
)
_____________
See footnotes on page 36.

26

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Communications and Information Portfolio

   
Shares
  
Value
  
Common Stocks 98.6%
Application Software 11.8%
Cogent*
    
12,900
  
$
292,056
  
Cognos*
    
22,100
    
766,870
  
Mercury Interactive*
    
58,300
    
1,620,448
  
Microsoft
    
142,800
    
3,729,222
  
Quest Software*
    
33,900
    
493,584
  
Vocus*
    
800
    
8,360
   
           
6,910,540
   
Biotechnology 0.6%
Invitrogen*
    
5,100
    
339,838
   
Communications Equipment 7.6%
Cisco Systems*
    
49,900
    
852,541
  
Corning*
    
37,200
    
731,352
  
NICE Systems (ADR)*
    
4,400
    
211,618
  
Nokia (ADR)
    
37,800
    
691,740
  
Plantronics
    
5,800
    
164,140
  
QUALCOMM
    
31,600
    
1,358,958
  
TomTom*
    
13,100
    
449,878
   
           
4,460,227
   
Computers and Peripherals 11.3%
Apple Computer*
    
4,100
    
294,093
  
Avid Technology*
    
8,500
    
465,205
  
Catcher Technology
    
18,000
    
145,321
  
Electronics for Imaging*
    
13,300
    
353,115
  
EMC*
    
108,300
    
1,475,046
  
High Tech Computer
    
5,000
    
93,834
  
International Business Machines
    
8,600
    
706,920
  
Komag
    
10,200
    
353,481
  
Mitac International
    
112,000
    
164,806
  
Seagate Technology*
    
97,900
    
1,957,021
  
Sun Microsystems*
    
144,400
    
599,982
   
           
6,608,824
   
Consumer Software 1.0%
THQ*
    
25,700
    
613,074
   
Diversified Telecommunication Services 0.6%
BellSouth
    
10,800
    
292,680
   
Consolidated Communications Holdings (Class A)
    
6,550
    
84,823
   
           
377,503
   
Electronic Equipment and Instruments 3.7%
Amphenol (Class A)
    
11,100
    
491,286
  
Murata Manufacturing
    
5,000
    
320,665
  
Orbotech*
    
41,600
    
997,776
  
Xyratex*
    
21,300
    
375,838
   
           
2,185,565
   
Health Care Equipment and Supplies 4.4%
Beckman Coulter
    
6,200
    
352,780
  
Fisher Scientific International*
    
14,200
    
878,412
  
Kinetic Concepts*
    
27,600
    
1,097,376
  
PerkinElmer
    
11,600
    
273,296
   
           
2,601,864
   

   
Shares
  
Value
  
Internet and Catalog Retail 1.9%
Expedia*
    
13,900
  
$
332,975
  
IAC/InterActive
    
15,700
    
444,388
  
Netflix*
    
12,400
    
334,924
   
           
1,112,287
   
Internet Software and Services 13.3%
DealerTrack Holdings*
    
15,100
    
317,402
  
Digital River*
    
31,100
    
921,959
  
Google (Class A)*
    
2,000
    
829,810
  
McAfee*
    
78,500
    
2,129,705
  
Openwave Systems
    
14,800
    
257,964
  
Sina*
    
10,800
    
261,360
  
Symantec*
    
175,583
    
3,073,580
   
           
7,791,780
   
IT Services 6.5%
Amdocs*
    
96,200
    
2,645,500
  
First Data
    
7,300
    
313,973
  
Infosys Technologies
    
5,797
    
385,823
  
Ness Technologies
    
9,900
    
106,375
  
Satyam Computer Services
    
23,168
    
381,500
   
           
3,833,171
   
Media 0.9%
Comcast (Class A)*
    
20,600
    
533,746
   
Semiconductors and Semiconductor Equipment 18.0%
Altera*
    
55,500
    
1,028,692
  
Applied Micro Circuits*
    
135,700
    
348,071
  
ASML Holding (NY shares)*
    
48,400
    
970,662
  
Cymer*
    
6,400
    
227,168
  
Cypress Semiconductor
    
10,600
    
151,050
  
Integrated Device Technology*
    
105,300
    
1,387,328
  
Lam Research*
    
8,500
    
303,323
  
Linear Technology
    
7,900
    
284,558
  
Maxim Integrated Products
    
23,500
    
851,170
  
MEMC Electronic Materials*
    
136,200
    
3,019,554
  
Monolithic Power Systems*
    
31,000
    
462,830
  
Samsung Electronics
    
780
    
508,176
  
Silicon Laboratories*
    
13,400
    
491,177
  
Taiwan Semiconductor Manufacturing (ADR)
    
30,800
    
305,228
  
Tessera Technologies*
    
9,900
    
255,717
   
           
10,594,704
   
Systems Software 8.7%
CA
    
91,074
    
2,567,376
  
Check Point Software Technologies*
    
21,900
    
439,423
  
Oracle*
    
145,500
    
1,775,827
  
Red Hat*
    
11,200
    
305,200
   
           
5,087,826
   

__________
See footnotes on page 36.


27

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Communications and Information Portfolio (continued)

   
Shares
  
Value
  
Technical Software 7.4%
Cadence Design Systems*
    
85,100
  
$
1,438,616
  
Synopsys*
    
145,800
    
2,925,477
   
           
4,364,093
   
Wireless Telecommunication Services 0.9%
Sprint Nextel
    
22,100
    
516,256
   
Total Common Stocks (Cost $58,901,442)
          
57,931,298
   
 

 
   
Principal
Amount
  
Value
  
Repurchase Agreement 0.2%
State Street Bank 3.15%, dated 12/30/2005, maturing 1/3/2006, in the amount of $129,045,
collateralized by: $140,000 US Treasury Notes 3.25%, 1/15/2009, with a fair market value
of $137,724 (Cost $129,000)
  
$
129,000
  
$
129,000
   
Total Investments 98.8% (Cost $59,030,442)
          
58,060,298
  
Other Assets Less Liabilities 1.2%
          
682,992
   
Net Assets 100.0%
          
$
58,743,290
     

Seligman Global Technology Portfolio

   
Shares
  
Value
  
Common Stocks 94.8%
Canada 1.3%
Cognos* (Application Software)
    
3,200
 
$
111,040
   
China 0.4%
Sina* (Internet Software and Services)
    
1,500
    
36,300
   
Denmark 0.5%
GN Store Nord (Health Care Equipment and Supplies)
    
3,400
    
44,504
   
Finland 2.8%
Nokia (ADR) (Communications Equipment)
    
9,400
    
172,020
  
TietoEnator (IT Services)
    
1,800
    
65,747
   
           
237,767
   
France 1.7%
Alcatel* (Communications Equipment)
    
3,654
    
45,328
  
Atos Origin* (IT Services)
    
1,513
    
99,649
   
           
144,977
   
India 1.0%
Infosys Technologies (IT Services)
    
623
    
41,521
  
Satyam Computer Services (IT Services)
    
2,600
    
42,928
   
           
84,449
   
Israel 2.1%
Check Point Software Technologies*
              
(Systems Software)
    
2,000
    
40,130
  
Ness Technologies (IT Services)
    
1,200
    
12,894
  
NICE Systems (ADR)* (Communications Equipment)
    
600
    
28,857
  
Orbotech* (Electronic Equipment and Instruments)
    
3,900
    
93,541
   
           
175,422
   


   
Shares
  
Value
  
Japan 7.5%
Canon (Office Electronics)
    
800
  
$
47,042
 
Keyence (Electronic Equipment and Instruments)
    
300
    
86,130
  
Konica Minolta Holdings (Office Electronics)
    
4,000
    
40,959
  
Murata Manufacturing (Electronic Equipment and Instruments)
    
1,600
    
103,550
  
Nidec (Electronic Equipment and Instruments)
    
400
    
34,416
  
Nintendo (Consumer Software)
    
400
    
48,622
  
Ohara (Electronic Equipment and Instruments)
    
800
    
40,628
  
Sanken Electric (Semiconductors and Semiconductor Equipment)
    
3,700
    
60,314
  
Square Enix (Consumer Software)
    
2,100
    
59,132
  
Sumco (Semiconductors and Semiconductor Equipment)
    
800
    
41,989
  
Tokuyama (Chemicals)
    
4,000
    
51,722
  
Toshiba (Computers and Peripherals)
    
4,000
    
24,097
   
           
638,601
   
Netherlands 3.3%
               
ASML Holding (NY shares)* (Semiconductors and Semiconductor Equipment)
    
6,600
    
132,363
  
Tele Atlas* (Commercial Services and Supplies)
    
1,548
    
41,419
  
TomTom* (Communications Equipment)
    
3,060
    
105,053
   
           
278,835
   
South Korea 0.8%
Samsung Electronics (Semiconductors and Semiconductor Equipment)
    
110
    
70,857
   
_____________
See footnotes on page 36.

28

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Global Technology Portfolio (continued)

   
Shares
  
Value
  
Sweden 0.5%
Telefonaktiebolaget LM Ericsson (ADR) (Communications Equipment)
    
1,200
  
$
41,244
   
Taiwan 3.3%
Acer (Computers and Peripherals)
    
9,000
    
22,478
  
Asustek Computer (Computers and Peripherals)
    
8,500
    
26,052
  
Catcher Technology (Computers and Peripherals)
    
8,000
    
63,646
  
High Tech Computer (Computers and Peripherals)
    
2,000
    
37,231
  
Hon Hai Precision Industry (Electronic Equipment and Instruments)
    
11,936
    
65,404
  
Mitac International (Computers and Peripherals)
    
31,000
    
45,187
  
Taiwan Semiconductor Manufacturing (ADR) (Semiconductors and Semiconductor Equipment)
    
2,500
    
24,775
   
           
284,773
   
United Kingdom 2.3%
LogicaCMG (IT Services)
    
18,900
    
57,641
  
NETeller* (Diversified Financial Services)
    
3,806
    
48,164
  
Sportingbet (Hotels, Restaurants and Leisure)
    
7,540
    
44,601
  
Xyratex* (Electronic Equipment and Instruments)
    
2,800
    
49,406
   
           
199,812
   
United States 67.3%
ADE* (Semiconductors and Semiconductor Equipment)
    
1,500
    
36,000
  
Altera* (Semiconductors and Semiconductor Equipment)
    
7,500
    
139,012
  
Amdocs* (IT Services)
    
13,100
    
360,250
  
Amphenol (Class A) (Electronic Equipment and Instruments)
    
1,500
    
66,390
  
Apple Computer* (Computers and Peripherals)
    
600
    
43,038
  
Avid Technology* (Computers and Peripherals)
    
1,500
    
82,095
  
Beckman Coulter (Health Care Equipment and Supplies)
    
300
    
17,070
  
BellSouth (Diversified Telecommunication Services)
    
1,500
    
40,650
  
CA (Systems Software)
    
9,689
    
273,133
  
Cadence Design Systems* (Technical Software)
    
9,200
    
155,526
  
Cisco Systems* (Communications Equipment)
    
3,400
    
58,089
  
Corning* (Communications Equipment)
    
5,100
    
100,266
  
Cymer* (Semiconductors and Semiconductor Equipment)
    
1,100
    
39,045
  
DealerTrack Holdings* (Internet Software and Services)
    
2,200
    
46,244
  
Digital River* (Internet Software and Services)
    
3,600
    
106,722
  
Electronics for Imaging* (Computers and Peripherals)
    
2,800
    
74,340
  


   
Shares
  
Value
  
United States (continued)
EMC* (Computers and Peripherals)
    
16,200
 
$
220,644
 
Expedia* (Internet and Catalog Retail)
    
1,900
    
45,514
  
First Data (IT Services)
    
1,000
    
43,010
  
Fisher Scientific International* (Health Care Equipment and Supplies)
    
1,000
    
61,860
  
Google (Class A)* (Internet Software and Services)
    
100
    
41,491
  
Hyperion Solutions* (Application Software)
    
800
    
28,616
  
IAC/InterActive (Internet and Catalog Retail)
    
2,100
    
59,441
  
Integrated Device Technology* (Semiconductors and Semiconductor Equipment)
    
12,100
    
159,417
  
International Business Machines (Computers and Peripherals)
    
1,400
    
115,080
  
Invitrogen* (Biotechnology)
    
600
    
39,981
  
Kinetic Concepts* (Health Care Equipment and Supplies)
    
2,200
    
87,472
  
Komag (Computers and Peripherals)
    
1,200
    
41,586
  
Lam Research* (Semiconductors and Semiconductor Equipment)
    
1,200
    
42,822
  
Linear Technology (Semiconductors and Semiconductor Equipment)
    
500
    
18,010
  
Maxim Integrated Products (Semiconductors and Semiconductor Equipment)
    
3,400
    
123,148
  
McAfee* (Internet Software and Services)
    
5,900
    
160,067
  
MEMC Electronic Materials* (Semiconductors and Semiconductor Equipment)
    
16,700
    
370,239
  
Mercury Interactive* (Application Software)
    
5,900
    
163,990
  
Microsoft (Application Software)
    
17,500
    
457,013
  
Micrus Endovascular* (Health Care Equipment and Supplies)
    
900
    
7,830
  
Netflix* (Internet and Catalog Retail)
    
1,700
    
45,917
  
Open Solutions* (Application Software)
    
1,800
    
41,220
  
Openwave Systems (Internet Software and Services)
    
2,100
    
36,603
  
Oracle* (Systems Software)
    
20,400
    
248,982
  
Plantronics (Communications Equipment)
    
1,500
    
42,450
  
QUALCOMM (Communications Equipment)
    
4,500
    
193,522
  
Quest Software* (Application Software)
    
4,700
    
68,432
  
Red Hat* (Systems Software)
    
1,600
    
43,600
  
Seagate Technology* (Computers and Peripherals)
    
8,700
    
173,913
  
Silicon Laboratories* (Semiconductors and Semiconductor Equipment)
    
1,600
    
58,648
  
Sprint Nextel (Wireless Telecommunication Services)
    
4,900
    
114,464
  
Sun Microsystems* (Computers and Peripherals)
    
20,200
    
83,931
  
Symantec* (Internet Software and Services)
    
19,177
    
335,688
  
Synopsys* (Technical Software)
    
10,100
    
202,657
  
Tessera Technologies* (Semiconductors and Semiconductor Equipment)
    
1,400
    
36,162
  
__________
See footnotes on page 36.
 

29


Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Global Technology Portfolio (continued)

   
Shares
  
Value
  
United States (continued)
THQ* (Consumer Software)
    
3,600
  
$
85,878
   
           
5,737,168
   
Total Investments 94.8% (Cost $7,681,459)
          
8,085,749
  
Other Assets Less Liabilities 5.2%
          
442,866
   
Net Assets 100.0%
          
$
8,528,615
     

Seligman International Growth Portfolio

 
    
Shares 
 
 
Value
  
Common Stocks and Warrants 98.0%
Australia 0.5%
Toll Holdings (Road and Rail)
    
1,857
  
$
20,217
   
Belgium 3.0%
KBC Groep (Commercial Banks)
    
409
    
38,073
  
SES Global (FDR) (Media)
    
4,201
    
73,535
   
           
111,608
   
Brazil 1.0%
Companhia Vale do Rio Doce “CVRD” (ADR) (Metals and Mining)
    
900
    
37,026
     
Canada 5.7%
Cameco (Oil, Gas and Consumable Fuels)
    
700
    
44,373
  
Canadian Pacific Railway (Road and Rail)
    
300
    
12,571
  
Inco (Metals and Mining)
    
800
    
34,856
  
Research In Motion* (Communications Equipment)
    
600
    
39,603
  
SNC-Lavalin Group (Construction and Engineering)
    
527
    
34,591
  
Suncor Energy (Oil, Gas and Consumable Fuels)
    
800
    
50,459
   
           
216,453
   
Finland 2.0%
Nokia (Communications Equipment)
    
4,050
    
74,136
   
France 12.8%
Alstom* (Electrical Equipment)
    
671
    
38,613
  
Altran Technologies* (IT Services)
    
2,346
    
26,314
  
Dassault Systemes (Software)
    
1,353
    
76,371
  
Essilor International (Health Care Equipment and Supplies)
    
801
    
64,653
  
Eutelsat Communications* (Media)
    
654
    
9,369
  
LVMH Moet Hennessy Louis Vuitton (Textiles, Apparel and Luxury Goods)
    
756
    
67,179
  
PPR* (Multiline Retail)
    
306
    
34,472
  
Publicis Groupe (Media)
    
1,626
    
56,600
  
Unibail (Real Estate)
    
430
    
57,224
  
Veolia Environnement (Multi-Utilities)
    
1,162
    
52,653
   
           
483,448
   

   
Shares or
Warrants
  
Value
  
Germany 9.0%
Adidas-Salomon (Textiles, Apparel and Luxury Goods)
    
299
 shs.
$
56,596
 
Allianz (Insurance)
    
478
    
72,402
  
Commerzbank* (Commercial Banks)
    
1,823
    
56,158
  
Merck KGaA (Pharmaceuticals)
    
871
    
72,177
  
Muenchener Rueckversicherungs-Gesellschaft* (Insurance)
    
415
    
56,197
  
Siemens (Industrial Conglomerates)
    
333
    
28,538
   
           
342,068
   
Hong Kong 0.3%
Shun Tak Holdings (Real Estate)
    
14,000
    
12,856
   
India 0.6%
Bharti Tele-Ventures (exercise price of $0.934, expiring 1/19/2009)* (Wireless
              
Telecommunication Services)
    
3,100
 wts.  
23,273
   
Ireland 1.2%
Ryanair Holdings (ADR)* (Airlines)
    
800
  shs.  
44,808
   
Israel 1.4%
Teva Pharmaceutical Industries (ADR) (Pharmaceuticals)
    
1,200
    
51,660
   
Italy 2.5%
Eni (Oil, Gas and Consumable Fuels)
    
1,071
    
29,869
  
UniCredito Italiano (Commercial Banks)
    
9,141
    
62,980
   
           
92,849
   
Japan 19.6%
Dentsu (Media)
    
6
    
19,670
  
East Japan Railway (Road and Rail)
    
2
    
13,717
  
Eisai (Pharmaceuticals)
    
1,200
    
50,617
  
Fanuc (Machinery)
    
700
    
59,952
  
JSR (Chemicals)
    
2,200
    
57,639
  
JTEKT (Machinery)
    
1,000
    
18,544
  
Keyence (Electronic Equipment and Instruments)
    
200
    
57,420
  
Komatsu (Machinery)
    
3,000
    
50,224
  

__________
See footnotes on page 36.
 

30

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman International Growth Portfolio (continued)

   
Shares
  
Value
  
Japan (continued)
Matsushita Electric Industrial (Household Durables)
    
2,000
 
$
38,715
 
Mitsubishi UFJ Financial Group (Commercial Banks)
    
3
    
40,986
  
Nippon Electric Glass (Electronic Equipment and Instruments)
    
3,000
    
66,217
  
Seven & I Holdings (Food and Staples Retailing)
    
1,100
    
47,072
  
Sharp (Household Durables)
    
3,000
    
45,408
  
Shinsei Bank (Commercial Banks)
    
5,000
    
29,046
  
SoftBank (Internet Software and Services)
    
900
    
38,404
  
Toyota Motor (Automobiles)
    
1,400
    
73,246
  
Yamato Holdings (Air Freight and Logistics)
    
2,000
    
33,345
   
           
740,222
   
Mexico 3.8%
America Movil (Series L) (ADR) (Wireless Telecommunication Services)
    
2,200
    
64,372
  
Grupo Televisa (ADR) (Media)
    
1,000
    
80,500
   
           
144,872
   
Netherlands 2.9%
ASML Holding* (Semiconductors and Semiconductor Equipment)
    
1,851
    
37,030
  
Numico* (Food Products)
    
747
    
30,925
  
Philips Electronics (Household Durables)
    
1,312
    
40,769
   
           
108,724
   
South Korea 3.1%
Hana Financial Group (Diversified Financial Services)
    
818
    
37,386
  
LG Electronics (Household Durables)
    
220
    
19,248
  
Samsung Electronics (Semiconductors and Semiconductor Equipment)
    
97
    
62,483
   
           
119,117
   
Spain 1.0%
Banco Bilbao Vizcaya Argentaria (Commercial Banks)
    
2,059
    
36,747
   
Sweden 2.1%
Atlas Copco (A Shares) (Machinery)
    
800
    
17,825
  
Telefonaktiebolaget LM Ericsson (B Shares) (Communications Equipment)
    
18,000
    
61,885
   
           
79,710
   

   
Shares
  
Value
  
Switzerland 12.7%
Credit Suisse Group (Commercial Banks)
    
1,758
  
$
89,615
  
Kuehne & Nagel International (Marine)
    
157
    
44,302
  
Logitech International* (Computers and Peripherals)
    
865
    
40,518
  
Nestlé (Food Products)
    
196
    
58,526
  
Roche Holding (Pharmaceuticals)
    
466
    
69,974
  
Serono* (Biotechnology)
    
95
    
75,602
  
Swatch Group (Textiles, Apparel and Luxury Goods)
    
743
    
22,477
  
UBS (Capital Markets)
    
820
    
78,073
   
           
479,087
   
Taiwan 1.7%
AU Optronics (ADR) (Electronic Equipment and Instruments)
    
1,500
    
22,515
  
Chi Mei Optoelectronics (Electronic Equipment and Instruments)
    
29,000
    
43,219
   
           
65,734
   
United Kingdom 11.1%
Anglo American (Metals and Mining)
    
1,075
    
36,606
  
Carphone Warehouse Group (Specialty Retail)
    
15,932
    
75,936
  
EMI Group (Media)
    
18,490
    
76,981
  
Kingfisher (Specialty Retail)
    
9,217
    
37,627
  
Reckitt Benckiser (Household Products)
    
2,004
    
66,129
  
Rio Tinto (Metals and Mining)
    
757
    
34,564
  
Standard Chartered (Commercial Banks)
    
4,049
    
90,221
  
Xstrata (Metals and Mining)
    
134
    
3,136
   
           
421,200
   
Total Investments 98.0% (Cost $3,185,489)
          
3,705,815
  
               
Other Assets Less Liabilities 2.0%
          
76,720
  
               
Net Assets 100.0%
              
$
3,782,535
   
_____________
See footnotes on page 36.

31

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Investment Grade Fixed Income Portfolio
 

 
    
Principal
Amount 
    
Value
  
US Government and Government Agency Securities 42.5%
              
US Government Securities 22.4%
              
US Treasury Bonds 5.375%, 2/15/2031
  
$
125,000
  
$
140,449
  
US Treasury Notes:
              
      4.25%, 10/31/2007
    
60,000
    
59,843
  
      4.375%, 11/15/2008
    
65,000
    
65,030
  
      3.375%, 10/15/2009
    
110,000
    
106,257
  
      4.375%, 12/15/2010
    
135,000
    
135,148
  
      4.875%, 2/15/2012
    
25,000
    
25,675
  
      4.5%, 11/15/2015
    
85,000
    
85,724
  
           
618,126
  
Government Agency Securitiesø 14.9%
              
Fannie Mae:
              
      4.75%, 2/21/2013
    
45,000
    
44,522
  
      5%, 3/2/2015
    
130,000
    
128,023
  
Freddie Mac:
              
      5.05%, 12/8/2008
    
130,000
    
130,142
  
      5%, 10/18/2010
    
20,000
    
19,890
  
      5.2%, 3/5/2019
    
60,000
    
58,693
  
      6.25%, 7/15/2032
    
25,000
    
29,860
  
           
411,130
  
Government Agency Mortgage-Backed Securities††ø 5.2%
              
Fannie Mae:
              
      7%, 7/1/2008
    
9,252
    
9,453
  
      7%, 2/1/2012
    
4,022
    
4,109
  
      8.5%, 9/1/2015
    
4,642
    
4,926
  
      6.5%, 5/1/2017
    
17,832
    
18,326
  
      5.5%, 2/1/2018
    
37,933
    
38,197
  
      7%, 1/1/2032
    
16,078
    
16,789
  
      7%, 5/1/2032
    
40,097
    
41,866
  
Freddie Mac Gold:
              
      6%, 11/1/2010
    
5,532
    
5,677
  
      8%, 12/1/2023
    
3,444
    
3,681
  
           
143,024
  
               
Total US Government and Government Agency Securities (Cost $1,172,706)
          
1,172,280
  
Corporate Bonds 43.2%
              
Airlines 1.2%
              
Southwest Airlines 5.125%, 3/1/2017
    
35,000
    
32,749
  
Beverages 0.7%
              
PepsiAmericas 4.875%, 1/15/2015
    
20,000
    
19,753
  

 
   
Principal
Amount
  
Value
  
Corporate Bonds (continued)
Biotechnology 0.5%
Amgen 4%, 11/18/2009
  
$
15,000
  
$
14,559
   
Capital Markets 0.5%
Lehman Brothers Holdings 5%, 1/14/2011
    
15,000
    
14,985
   
Commercial Banks 2.2%
KeyBank 5.7%, 8/15/2012
    
25,000
    
25,941
  
Zions Bancorp 5.5%, 11/16/2015
    
35,000
    
35,324
   
           
61,265
   
Consumer Finance 3.9%
Capital One Bank 5%, 6/15/2009
    
30,000
    
29,895
  
General Motors Acceptance 6.875%, 9/15/2011
    
35,000
    
31,954
  
MBNA 6.125%, 3/1/2013
    
25,000
    
26,549
  
SLM 5.97%, 2/1/2010#
    
20,000
    
19,285
   
           
107,683
   
Diversified Financial Services 1.6%
CIT Group 5%, 2/13/2014
    
40,000
    
39,191
  
Citigroup 5.875%, 2/22/2033
    
5,000
    
5,144
   
           
44,335
   
Diversified Telecommunication Services 0.7%
Pacific Bell 6.625%, 10/15/2034
    
20,000
    
20,013
   
Electric Utilities 4.9%
Carolina Power & Light 5.25%, 12/15/2015
    
35,000
    
35,023
  
Commonwealth Edison 3.7%, 2/1/2008
    
15,000
    
14,561
  
Consumers Energy 5.8%, 9/15/2035
    
25,000
    
24,406
  
Oncor Electric Delivery 7%, 5/1/2032
    
35,000
    
39,950
  
Southern Co. Capital Funding 5.75%, 11/15/2015
    
20,000
    
20,227
   
           
134,167
   
Food and Staples Retailing 2.4%
CVS Lease 5.88%, 1/10/2028†
    
65,000
    
65,455
   
Food Products 1.1%
Archer Daniels Midland 5.375%, 9/15/2035
    
20,000
    
19,253
  
Kraft Foods 5.25%, 10/1/2013
    
10,000
    
10,020
   
           
29,273
   
Health Care Equipment and Supplies 0.8%
Boston Scientific 6.25%, 11/15/2035
    
20,000
    
21,107
   
Health Care Providers and Services 2.5%
Quest Diagnostics 5.45%, 11/1/2015†
    
25,000
    
25,235
  
UnitedHealth Group 3.3%, 1/30/2008
    
45,000
    
43,638
   
           
68,873
   
Hotels, Restaurants and Leisure 1.4%
Royal Caribbean Cruises 6.875%, 12/1/2013
    
35,000
    
37,245
   
_____________
See footnotes on page 36.


32


Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Investment Grade Fixed Income Portfolio (continued)

   
Principal
Amount
  
Value
  
Corporate Bonds (continued)
Household Durables 4.3%
Centex:
              
4.875%, 8/15/2008
 
$
25,000
 
$
24,777
 
5.7%, 5/15/2014
    
20,000
    
19,796
  
D.R. Horton:
              
5%, 1/15/2009
    
50,000
    
49,578
  
5.25%, 2/15/2015
    
25,000
    
23,528
   
           
117,679
   
Independent Power Producers and Energy Traders 1.5%
Black Hills 6.5%, 5/15/2013
    
40,000
    
41,029
   
Insurance 3.0%
Amerus Group 5.95%, 8/15/2015
    
35,000
    
35,172
  
St. Paul Travelers 5.5%, 12/1/2015
    
10,000
    
10,091
  
UnumProvident 6.85%, 11/15/2015†
    
35,000
    
36,522
   
           
81,785
   
Media 0.7%
Comcast 6.5%, 11/15/2035
    
20,000
    
20,449
   
Multi-Utilities 1.3%
Alabama Power 4.58%, 8/25/2009#
    
25,000
    
25,081
  
Southern California Edison 5%, 1/15/2016
    
10,000
    
9,906
   
           
34,987
   
Oil, Gas and Consumable Fuels 4.3%
Ras Laffan Liquefied Natural Gas
              
5.298%, 9/30/2020†
    
30,000
    
29,828
  
Tesoro 6.625%, 11/1/2015†
    
35,000
    
35,525
  
Tosco 8.125%, 2/15/2030
    
40,000
    
54,093
   
           
119,446
   
Pharmaceuticals 1.1%
Wyeth 5.25%, 3/15/2013#
    
30,000
    
30,458
   
Real Estate 0.7%
iStar Financial 5.8%, 3/15/2011
    
20,000
    
20,152
   
Specialty Retail 0.2%
Lowe’s Companies 5.5%, 10/15/2035
    
5,000
    
5,040
   


   
Principal
Amount
  
Value
  
Corporate Bonds (continued)
Thrifts and Mortgage Finance 1.3%
Residential Capital 6.125%, 11/21/2008
  
$
35,000
  
$
35,108
   
Wireless Telecommunication Services 0.5%
Verizon Global Funding 4.9%, 9/15/2015
    
15,000
    
14,548
   
Total Corporate Bonds (Cost $1,186,049)
          
1,192,143
   
Asset-Backed Securities†† 2.9% (Cost $79,802)
Aerospace and Defense 2.9%
Peco Energy Transition Trust 6.05%, 3/1/2009
    
79,835
    
80,547
   
Short-Term Holdings 18.5%
Repurchase Agreement 9.1%
State Street Bank 3.15%, dated 12/30/2005, maturing 1/3/2006, in the amount of $251,088,
collateralized by: $265,000 US Treasury Notes 3.25%, 1/15/2009,
with a fair market value of $260,692
    
251,000
    
251,000
   
US Government Securities 7.4%
US Treasury Bills 4.10%, 1/17/2006
    
205,000
    
204,683
   
Corporate Bonds 2.0%
Verizon Wireless Capital 5.375%, 12/15/2006
    
55,000
    
55,194
   
Total Short-Term Holdings (Cost $511,858)
          
510,877
   
Total Investments 107.2% (Cost $2,950,415)
          
2,955,847
  
Other Assets Less Liabilities (7.1)%
          
(197,647
)
Net Assets 100.0%
          
$
2,758,200
   
_____________
See footnotes on page 36.


33

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Large-Cap Value Portfolio

   
Shares
  
Value
  
Common Stocks 100.3%
Aerospace and Defense 6.3%
Honeywell International
    
4,200
  
$
156,450
 
United Technologies
    
3,000
    
167,730
   
           
324,180
   
Capital Markets 3.1%
Bank of New York
    
5,000
    
159,250
   
Chemicals 10.5%
Dow Chemical
    
3,600
    
157,752
  
E.I. du Pont de Nemours
    
3,100
    
131,750
  
Praxair
    
3,000
    
158,880
  
Rohm and Haas
    
2,000
    
96,840
   
           
545,222
   
Commercial Banks 6.6%
Bank of America
    
3,500
    
161,525
  
U.S. Bancorp
    
6,000
    
179,340
   
           
340,865
   
Computers and Peripherals 2.9%
International Business Machines
    
1,800
    
147,960
   
Diversified Financial Services 3.4%
JPMorgan Chase
    
4,500
    
178,605
   
Energy Traders 2.4%
AES*
    
8,000
    
126,640
   
Food and Staples Retailing 2.9%
Costco Wholesale
    
3,000
    
148,215
   
Health Care Equipment and Supplies 6.2%
Baxter International
    
4,000
    
150,600
  
Medtronic
    
3,000
    
172,710
   
           
323,310
   
Health Care Providers and Services 2.6%
HCA
    
2,700
    
136,350
   
Industrial Conglomerates 4.9%
General Electric
    
4,000
    
140,200
  
Tyco International
    
4,000
    
115,440
   
           
255,640
   
Insurance 9.3%
Prudential Financial
    
2,000
    
146,380
  
St. Paul Travelers Companies
    
3,500
    
156,345
  
UnumProvident
    
8,000
    
182,000
   
           
484,725
   
IT Services 3.2%
Amdocs*
    
6,000
    
165,000
   

   
Shares or
Principal
Amount
  
Value
Common Stocks (continued)
Machinery 3.0%
Caterpillar
    
2,700
 shs.
$
155,979
   
Multiline Retail 3.2%
J.C. Penney
    
3,000
    
166,800
   
Oil, Gas and Consumable Fuels 8.6%
Chevron
    
2,600
    
147,602
  
Valero Energy
    
3,000
    
154,800
  
Williams Companies
    
6,100
    
141,337
   
           
443,739
   
Pharmaceuticals 3.2%
Wyeth
    
3,600
    
165,852
   
Road and Rail 7.0%
CSX
    
3,500
    
177,695
  
Union Pacific
    
2,300
    
185,173
   
           
362,868
   
Specialty Retail 2.4%
The Gap
    
7,000
    
123,480
   
Thrifts and Mortgage Finance 2.9%
Washington Mutual
    
3,500
    
152,250
   
Tobacco 3.2%
Altria Group
    
2,200
    
164,384
   
Wireless Telecommunication Services 2.5%
Sprint Nextel
    
5,600
    
130,816
   
Total Common Stocks (Cost $4,170,626)
          
5,202,130
     
Repurchase Agreement 0.1%
State Street Bank 3.15%, dated 12/30/2005, maturing 1/3/2006, in the amount of
$6,002, collateralized by: $10,000 US Treasury Notes 6%, 8/15/2009, with a fair
market value of $10,776 (Cost $6,000)
  
$
6,000
    
6,000
   
Total Investments 100.4% (Cost $4,176,626)
          
5,208,130
  
Other Assets Less Liabilities (0.4)%
          
(18,507
)
Net Assets 100.0%
          
$
5,189,623
  
_____________
See footnotes on page 36.

34

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Smaller-Cap Value Portfolio

   
Shares
  
Value
  
Common Stocks 100.2%
Aerospace and Defense 2.5%
Cubic
    
300,000
  
$
5,988,000
   
Airlines 3.6%
Continental Airlines*
    
400,000
    
8,520,000
   
Beverages 1.8%
Constellation Brands (Class A)*
    
160,000
    
4,196,800
   
Biotechnology 4.2%
CV Therapeutics*
    
91,800
    
2,270,673
  
Keryx Biopharmaceuticals
    
134,700
    
1,975,375
  
Protein Design Labs*
    
200,000
    
5,689,000
   
           
9,935,048
   
Chemicals 11.9%
Cabot
    
150,000
    
5,370,000
  
Chemtura
    
375,000
    
4,762,500
  
Hercules*
    
450,000
    
5,085,000
  
Lyondell Chemical
    
100,000
    
2,382,000
  
Minerals Technologies
    
95,000
    
5,309,550
  
NOVA Chemicals
    
150,000
    
5,010,000
   
           
27,919,050
   
Commercial Services and Supplies 7.2%
Brink’s
    
110,000
    
5,270,100
  
Korn/Ferry International
    
350,000
    
6,541,500
  
Waste Connections*
    
150,000
    
5,169,000
   
           
16,980,600
   
Communications Equipment 1.5%
Plantronics
    
121,500
    
3,438,450
   
Containers and Packaging 1.4%
Smurfit-Stone Container*
    
240,000
    
3,398,400
   
Diversified Consumer Services 3.1%
Sotheby’s Holdings (Class A)*
    
400,000
    
7,344,000
   
Electrical Equipment 1.7%
EnerSys
    
306,100
    
3,991,544
   
Electronic Equipment and Instruments 2.4%
Trimble Navigation*
    
160,000
    
5,674,400
   
Energy Equipment and Services 4.7%
Hanover Compressor*
    
400,000
    
5,644,000
  
Universal Compression Holdings*
    
130,000
    
5,345,600
   
           
10,989,600
   
Food Products 2.2%
Bunge
    
90,000
    
5,094,900
   
Health Care Providers and Services 4.0%
Apria Healthcare Group*
    
180,000
    
4,339,800
  
HealthSouth*
    
1,017,500
    
4,960,313
   
           
9,300,113
   



   
Shares
  
Value
  
Hotels, Restaurants and Leisure 7.1%
Landry’s Restaurants
    
110,000
  
$
2,938,100
  
Penn National Gaming*
    
110,000
    
3,623,950
  
Ruby Tuesday
    
250,000
    
6,472,500
  
WMS Industries
    
150,000
    
3,763,500
   
           
16,798,050
   
Household Durables 2.1%
Harman International Industries
    
50,000
    
4,892,500
   
Insurance 7.0%
W.R. Berkley
    
125,000
    
5,952,500
  
Hanover Insurance Group
    
140,000
    
5,847,800
  
Infinity Property & Casualty
    
127,000
    
4,725,035
   
           
16,525,335
   
IT Services 1.4%
Carreker*
    
650,000
    
3,220,750
   
Machinery 7.8%
Mueller Industries
    
200,000
    
5,484,000
  
Stewart & Stevenson Services
    
290,000
    
6,127,700
  
Terex*
    
112,000
    
6,652,800
   
           
18,264,500
   
Media 2.3%
Cadmus Communications
    
269,450
    
5,438,848
   
Multiline Retail 2.2%
Fred’s
    
320,000
    
5,195,200
   
Oil, Gas and Consumable Fuels 1.6%
Peabody Energy
    
45,000
    
3,708,900
   
Paper and Forest Products 0.8%
Bowater
    
60,000
    
1,843,200
   
Pharmaceuticals 2.0%
Andrx*
    
290,000
    
4,777,750
   
Road and Rail 2.4%
J.B. Hunt Transport Services
    
250,000
    
5,652,500
   
Semiconductors and Semiconductor Equipment 5.7%
ATI Technologies*
    
330,000
    
5,601,750
  
Credence Systems*
    
650,000
    
4,517,500
  
Skyworks Solutions
    
626,000
    
3,183,210
   
           
13,302,460
   
Specialty Retail 5.6%
Blockbuster (Class A)
    
600,000
    
2,250,000
  
Finish Line (Class A)
    
300,000
    
5,224,500
  
Pacific Sunwear of California*
    
225,000
    
5,605,875
   
           
13,080,375
   
Total Common Stocks (Cost $193,404,197)
          
235,471,273
   
_____________
See footnotes on page 36.


35

Seligman Portfolios, Inc.
Portfolios of Investments
December 31, 2005

Seligman Smaller-Cap Value Portfolio (continued)

 

 
    
Principal
Amount 
    
Value
  
Repurchase Agreement 0.5%
State Street Bank 3.15%, dated 12/30/2005, maturing 1/3/2006, in the amount of
$1,041,364, collateralized by: $995,000 US Treasury Notes 6%, 8/15/2009, with a fair
market value of $1,072,261 (Cost $1,041,000)
  
$
1,041,000
  
$
1,041,000
  
Total Investments 100.7% (Cost $194,445,197)
          
236,512,273
  
Other Assets Less Liabilities (0.7)%
          
(1,551,210
)
Net Assets 100.0%
          
$
234,961,063
  
 
__________
*
Non-income producing security.
†
The security may be offered and sold only to “qualified institutional buyers” under Rule 144A of the Securities Act of 1933.
††
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 original maturity. This in turn may impact the ultimate yield realized from these investments.
ø
Securities issued by these agencies are neither guaranteed nor insured by the US Government.
#
Floating rate security; the interest rate is reset periodically. The interest rate disclosed reflects the rate in effect at December 31, 2005.
(1)
All or part of the security is held as collateral for written options. As of December 31, 2005, the value of securities held as collateral was $371,253.
ADR - American Depositary Receipts.
FDR - Fiduciary Depositary Receipts.
See Notes to Financial Statements.
 
36
 

Seligman Portfolios, Inc.
Statements of Assets and Liabilities
December 31, 2005
 


 
Seligman
Capital
Portfolio
  
Seligman
Cash
Management
Portfolio
  
Seligman
Common
Stock
Portfolio
  
Seligman
Communications
and Information
Portfolio
  
Seligman
Global
Technology
Portfolio
  
Assets:
Investments, at value (see portfolios of investments):
                              
Long-term holdings
$
12,931,353
 
$
—
 
$
7,916,700
 
$
57,931,298
 
$
8,085,749
  
Options purchased
  
—
    
—
    
156,030
    
—
    
—
  
Repurchase agreements
  
740,000
    
2,851,000
    
18,000
    
129,000
    
—
  
Other short-term holdings
  
—
    
13,144,322
    
104,718
    
—
    
—
  
Total Investments*
  
13,671,353
    
15,995,322
    
8,195,448
    
58,060,298
    
8,085,749
  
Cash denominated in US dollars**
  
820
    
996
    
2,410
    
699
    
270,384
  
Cash denominated in foreign currencies†
  
—
    
—
    
—
    
662,461
    
208,869
  
Receivable for securities sold
  
173,536
    
—
    
82,929
    
747,641
    
134,832
  
Dividends and interest receivable
  
6,924
    
2,340
    
9,205
    
6,878
    
1,531
  
Receivable for Capital Stock sold
  
128
    
—
    
—
    
7,991
    
—
  
Receivable from the Manager (Note 4)
  
—
    
2,288
    
—
    
—
    
4,158
  
Other
  
726
    
900
    
499
     
10,530
    
4,311
  
Total Assets
   
13,853,487
    
16,001,846
    
8,290,491
     
59,496,498
    
8,709,834
  
Liabilities:
Payable for securities purchased
  
429,116
    
798,759
    
18,470
    
605,283
    
120,559
  
Payable for Capital Stock redeemed
  
12,015
    
14,878
    
6,953
    
13,116
    
6,850
  
Management fee payable
  
4,616
    
5,224
    
2,846
    
38,215
    
7,317
  
Distribution and service fees payable
  
3,179
    
—
    
—
    
7,343
    
692
  
Options written, at value (premiums received — $14,464)
  
—
    
—
    
15,095
    
—
    
—
  
Unrealized depreciation on forward currency contracts
  
—
    
—
    
—
    
4
    
—
  
Accrued expenses and other
  
44,749
    
28,514
    
28,026
    
89,247
    
45,801
  
Total Liabilities
  
493,675
    
847,375
    
71,390
    
753,208
    
181,219
  
Net Assets
$
13,359,812
 
$
15,154,471
 
$
8,219,101
 
$
58,743,290
 
$
8,528,615
  
Composition of Net Assets:
                              
Capital Stock, $0.001 at par
$
974
 
$
15,157
 
$
756
 
$
4,229
 
$
630
  
Additional paid-in capital
  
21,689,301
    
15,139,314
    
10,343,407
    
91,164,382
    
20,393,547
  
Undistributed/accumulated net investment income (loss)
  
(4,929
)
  
—
    
83,700
    
(5,057
)
  
(3,893
)
Accumulated net realized loss
  
(9,604,541
)
  
—
    
(2,350,293
)
  
(31,458,281
)
  
(12,267,013
)
Net unrealized appreciation (depreciation) of investments
  
1,279,007
    
—
    
141,531
    
(961,983
)
  
417,710
  
Net unrealized depreciation on translation of assets and liabilities denominated in foreign currencies and forward currency contracts
  
—
    
—
    
—
    
—
    
(12,366
)
Net Assets
$
13,359,812
 
$
15,154,471
 
$
8,219,101
 
$
58,743,290
 
$
8,528,615
  
Class 1
$
8,235,197
 
$
15,154,471
 
$
8,219,101
 
$
47,010,115
 
$
6,641,136
  
Class 2
$
5,124,615
              
$
11,733,175
  
$
1,887,479
  
Shares of Capital Stock Outstanding:
                              
Class 1
  
597,812
    
15,156,845
    
755,933
    
3,374,051
    
489,814
  
Class 2
  
376,587
                
855,138
    
140,355
  
                               
Net Asset Value per Share:
Class 1
$
13.78
  
$
1.00
  
$
10.87
 
$
13.93
 
$
13.56
  
Class 2
$
13.61
            
 
$
13.72
 
$
13.45
 
                               
 __________                              
  *  Cost of investments are as follows:
$
12,392,346
  
$
15,995,322
 
$
8,053,286
 
$
59,030,442
 
$
7,681,459
 
**  Includes restricted cash as follows:
$
300
  
$
200
  
$
1,000
    
—
    
—
  
  †  Cost of foreign currencies as follows:
  
—
    
—
    
—
  
$
654,533
  
$
207,889
  
See Notes to Financial Statements.
                              
 
 
37


Seligman Portfolios, Inc.
Statements of Assets and Liabilities
December 31, 2005

   
Seligman
International
Growth
Portfolio
  
Seligman
Investment Grade
Fixed Income
Portfolio
  
Seligman
Large-Cap
Value
Portfolio
  
Seligman
Smaller-Cap
Value
Portfolio
Assets:
Investments, at value (see portfolios of investments):
                          
Long-term holdings
  
$
3,705,815
  
$
2,444,970
  
$
5,202,130
  
$
235,471,273
  
Repurchase agreements
    
—
    
251,000
    
6,000
    
1,041,000
  
Other short-term holdings
     
—
     
259,877
     
—
     
—
  
Total Investments*
    
3,705,815
    
2,955,847
    
5,208,130
    
236,512,273
  
Cash denominated in US dollars**
    
76,997
    
730
    
985
    
612
  
Cash denominated in foreign currencies†
    
18,924
    
—
    
—
    
—
  
Receivable for securities sold
    
19,910
    
—
    
—
    
—
  
Dividends and interest receivable
    
6,232
    
28,150
    
9,680
    
18,432
  
Receivable for Capital Stock sold
    
—
    
—
    
—
    
99,809
  
Receivable from the Manager (Note 4)
    
11,787
    
5,741
    
—
    
—
  
Unrealized appreciation on forward currency contracts
    
6
    
—
    
—
    
—
  
Other
     
195
     
191
     
289
     
13,357
  
Total Assets
         
3,839,866
       
2,990,659
        
5,219,084
       
236,644,483
    
Liabilities:
Payable for securities purchased
    
19,677
    
204,683
    
6,903
    
90,090
  
Payable for Capital Stock redeemed
    
—
    
6
    
—
    
1,186,796
  
Management fee payable
    
3,160
    
946
    
3,539
    
202,140
  
Distribution and service fees payable
    
—
    
—
    
—
    
16,520
  
Unrealized depreciation on forward currency contracts
    
32
    
—
    
—
    
—
  
Accrued expenses and other
     
34,462
     
26,824
     
19,019
     
187,874
   
Total Liabilities
     
57,331
     
232,459
     
29,461
     
1,683,420
  
Net Assets
   
$
3,782,535
   
$
2,758,200
   
$
5,189,623
   
$
234,961,063
  
Composition of Net Assets:
Capital Stock, $0.001 at par
  
$
324
  
$
313
  
$
445
  
$
14,105
  
Additional paid-in capital
    
5,382,039
    
2,729,574
    
4,948,001
    
173,568,589
  
Undistributed/accumulated net investment income (loss)
    
(4,967
)
  
123,967
    
31,920
    
(3,094
)
Undistributed/accumulated net realized gain (loss)
    
(2,115,385
)
  
(101,086
)
  
(822,247
)
  
19,314,387
  
Net unrealized appreciation of investments
    
614,723
    
5,432
    
1,031,504
    
42,067,076
  
Net unrealized depreciation on translation of assets and liabilities denominated in foreign currencies and forward currency contracts
    
(94,199
)
  
—
     
—
     
—
  
Net Assets
    
$
3,782,535
     
$
2,758,200
     
$
5,189,623
   
$
234,961,063
  
     Class 1
  
$
3,782,535
  
$
2,758,200
  
$
5,189,623
  
$
199,357,308
  
     Class 2
                    
$
35,603,755
  
Shares of Capital Stock Outstanding:
     Class 1
    
324,394
    
313,371
    
444,787
    
11,958,530
  
     Class 2
                      
2,146,392
  
Net Asset Value per Share:
  
Class 1
  
$
11.66
  
$
8.80
  
$
11.67
  
$
16.67
  
Class 2
                    
$
16.59
  
                           
__________
                          
* Cost of investments are as follows:
  
$
3,185,489
  
$
2,950,415
  
$
4,176,626
  
$
194,445,197
  
** Includes restricted cash as follows:
    
—
  
$
500
    
—
  
$
500
  
† Cost of foreign currencies as follows:
  
$
18,895
    
—
    
—
    
—
  
See Notes to Financial Statements.
                          


38

Seligman Portfolios, Inc.
Statements of Operations
For the Year Ended December 31, 2005


 
 
 
Seligman
Capital
Portfolio 
 
 
Seligman
Cash
Management
Portfolio
 
 
Seligman
Common
Stock
Portfolio
 
 
Seligman
Communications
and Information
Portfolio
 
 
Seligman
Global
Technology
Portfolio
  
Investment Income:
                                
Dividends*
  
$
63,253
  
$
—
  
$
165,089
  
$
135,671
  
$
30,659
  
Interest
    
10,295
    
379,445
    
5,150
    
66,287
    
1,275
  
Total Investment Income
    
73,548
    
379,445
    
170,239
    
201,958
    
31,934
  
Expenses:
                                
Management fees
    
55,303
    
44,503
    
37,592
    
460,159
    
87,304
  
Shareholder account services
    
27,071
    
—
    
—
    
44,084
    
26,717
  
Custody and related services
    
18,588
    
10,740
    
13,654
    
73,065
    
52,144
  
Auditing fees
    
13,525
    
10,754
    
11,828
    
36,208
    
18,555
  
Distribution and service fees — Class 2
    
12,822
    
—
    
—
    
28,597
    
2,808
  
Registration
    
7,159
    
3,307
    
3,731
    
18,449
    
13,207
  
Directors’ fees and expenses
    
6,423
    
5,768
    
6,328
    
7,237
    
5,950
  
Shareholder reports and communications
    
5,944
    
643
    
946
    
7,820
    
4,722
  
Legal fees
    
3,677
    
3,025
    
3,293
    
14,368
    
3,103
  
Miscellaneous
    
4,468
    
1,903
    
3,283
    
11,576
    
5,435
  
Total Expenses Before Reimbursement
    
154,980
    
80,643
    
80,655
    
701,563
    
219,945
  
Reimbursement of expenses (Note 4)
    
—
    
(2,861
)
  
—
    
—
    
(51,263
)
Total Expenses After Reimbursement
    
154,980
    
77,782
    
80,655
    
701,563
    
168,682
  
Net Investment Income (Loss)
    
(81,432
)
  
301,663
    
89,584
    
(499,605
)
  
(136,748
)
Net Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions:
                                
Net realized gain on investments
    
2,014,808
    
—
    
960,502
    
8,134,445
    
1,260,856
  
Net realized gain on foreign
currency transactions
    
—
    
—
    
—
    
—
    
18,374
  
Net realized gain on options written
    
—
    
—
    
58,922
    
—
    
—
  
Net change in unrealized appreciation/
depreciation of investments
    
(360,164
)
  
—
    
(985,632
)
  
(3,683,330
)
  
(467,685
)
Net change in unrealized appreciation
on translation of assets and
liabilities denominated in foreign
currencies and forward currency contracts
    
—
    
—
    
—
    
—
    
(151,367
)
Net Gain on Investments and
Foreign Currency Transactions
    
1,654,644
    
—
    
33,792
    
4,451,115
    
660,178
  
Increase in Net Assets from Operations
  
$
1,573,212
  
$
301,663
  
$
123,376
  
$
3,951,510
  
$
523,430
  
__________                                
* Net of foreign tax withheld as follows:
  
$
30
    
—
  
$
915
  
$
2,709
  
$
2,992
  
See Notes to Financial Statements.
                                

39

Seligman Portfolios, Inc.
Statements of Operations
For the Year Ended December 31, 2005

 
    
Seligman
International
Growth
Portfolio 
 
 
Seligman
Investment Grade
Fixed Income
Portfolio
 
 
Seligman
Large-Cap
Value
Portfolio
 
 
Seligman
Smaller-Cap
Value
Portfolio
  
Investment Income:
                          
Dividends*
  
$
62,785
  
$
—
  
$
105,043
  
$
1,969,645
  
Interest
    
297
    
150,984
    
1,438
    
28,473
  
Total Investment Income
    
63,082
    
150,984
    
106,481
    
1,998,118
  
Expenses:
                          
Management fees
    
35,756
    
13,372
    
42,772
    
2,584,715
  
Shareholder account services
    
—
    
—
    
—
    
46,623
  
Custody and related services
    
115,220
    
19,364
    
3,008
    
77,104
  
Auditing fees
    
12,735
    
9,424
    
10,188
    
113,473
  
Distribution and service fees — Class 2
    
—
    
—
    
—
    
64,968
  
Registration
    
2,783
    
2,749
    
3,018
    
36,779
  
Directors’ fees and expenses
    
6,069
    
6,182
    
5,782
    
11,451
  
Shareholder reports and communications
    
779
    
750
    
828
    
13,330
  
Legal fees
    
2,680
    
2,600
    
2,646
    
29,928
  
Miscellaneous
    
4,608
    
2,380
    
3,364
    
37,385
  
Total Expenses Before Reimbursement
    
180,630
    
56,821
    
71,606
    
3,015,756
  
Reimbursement of expenses (Note 4)
    
(109,119
)
  
(28,416
)
  
—
    
—
  
Total Expenses After Reimbursement
    
71,511
    
28,405
    
71,606
    
3,015,756
  
Net Investment Income (Loss)
    
(8,429
)
  
122,579
    
34,875
    
(1,017,638
)
Net Realized and Unrealized Gain
(Loss) on Investments and Foreign
Currency Transactions:
                          
Net realized gain (loss) on investments
    
408,932
    
(84,983
)
  
429,238
    
20,382,569
  
Net realized loss from foreign currency transactions
    
(39,609
)
  
—
    
—
    
—
  
Net change in unrealized appreciation
(depreciation) of investments
    
81,214
    
(8,871
)
  
58,369
    
(33,615,826
)
Net change in unrealized appreciation
on translation of assets and liabilities
denominated in foreign currencies and
forward currency contracts
    
(277,026
)
  
—
    
—
    
—
  
Net Gain (Loss) on Investments and
Foreign Currency Transactions
    
173,511
    
(93,854
)
  
487,607
    
(13,233,257
)
Increase (Decrease) in Net Assets from Operations
  
$
165,082
  
$
28,725
  
$
522,482
  
$
(14,250,895
)
                           
_________
                          
* Net of foreign tax withheld as follows:
  
$
9,610
    
—
    
—
  
$
7,492
  
See Notes to Financial Statements.
                          



40

Seligman Portfolios, Inc.
Statements of Changes in Net Assets

 
  
Seligman
Capital
Portfolio 
Seligman
Cash Management
Portfolio
Seligman
Common Stock
Portfolio
 
 
Year Ended December 31, 
Year Ended December 31,
Year Ended December 31,
 
 
 
2005
 
 
2004
 
 
2005
 
 
2004
 
 
2005
 
 
2004
  
Operations:
                                      
Net investment income (loss)
  
$
(81,432
)
$
(86,531
)
$
301,663
  
$
14,307
  
$
89,584
  
$
146,396
  
Net realized gain on investments
    
2,014,808
    
2,347,345
    
—
    
—
    
960,502
    
1,294,008
  
Net realized gain on options written
    
—
    
—
    
—
    
—
    
58,922
    
—
  
Payments received from the Manager (Note 12)
    
—
    
339
    
—
    
—
    
—
    
1,172
  
Net change in unrealized appreciation/
depreciation of investments
    
(360,164
)
  
(984,400
)
  
—
    
—
    
(985,632
)
  
(148,909
)
Increase in Net Assets From Operations
    
1,573,212
    
1,276,753
    
301,663
    
14,307
    
123,376
    
1,292,667
  
Distributions to Shareholders:
                                      
Net investment income — Class 1
    
—
    
—
    
(301,663
)
  
(14,307
)
  
(143,752
)
  
(106,774
)
Decrease in Net Assets
From Distributions
    
—
    
—
    
(301,663
)
  
(14,307
)
  
(143,752
)
  
(106,774
)
Capital Share Transactions:
                                      
Proceeds from sale of shares:
                                      
     Class 1
    
648,138
    
308,391
    
22,528,542
    
2,741,257
    
992,550
    
273,107
  
     Class 2
    
520,068
    
1,091,260
    
—
    
—
    
—
    
—
  
Value of shares issued in payment of:
Dividends — Class 1
    
—
    
—
    
301,663
    
14,307
    
143,752
    
106,774
  
Total
    
1,168,206
    
1,399,651
    
22,830,205
    
2,755,564
    
1,136,302
    
379,881
  
Cost of shares redeemed:
                                      
     Class 1
    
(3,216,959
)
  
(3,852,959
)
  
(9,504,002
)
  
(4,961,041
)
  
(3,689,103
)
  
(3,070,329
)
     Class 2
    
(1,370,650
)
  
(456,269
)
  
—
    
—
    
—
    
—
  
Total
    
(4,587,609
)
  
(4,309,228
)
  
(9,504,002
)
  
(4,961,041
)
  
(3,689,103
)
  
(3,070,329
)
Increase (Decrease) in Net Assets From
Capital Share Transactions
    
(3,419,403
)
  
(2,909,577
)
  
13,326,203
    
(2,205,477
)
  
(2,552,801
)
  
(2,690,448
)
Increase (Decrease) in Net Assets
    
(1,846,191
)
  
(1,632,824
)
  
13,326,203
    
(2,205,477
)
  
(2,573,177
)
  
(1,504,555
)
Net Assets:
                                      
Beginning of year
    
15,206,003
    
16,838,827
    
1,828,268
    
4,033,745
    
10,792,278
    
12,296,833
  
End of Year*
  
$
13,359,812
  
$
15,206,003
  
$
15,154,471
  
$
1,828,268
  
$
8,219,101
  
$
10,792,278
  
                                       
__________
* Including undistributed net investment
income (net of accumulated net investment
loss) as follows:
  
$
(4,929
)
$
(5,114
)
  
—
    
—
  
$
83,700
  
$
137,868
  
See Notes to Financial Statements.

41

Seligman Portfolios, Inc.
Statements of Changes in Net Assets

 
 
Seligman
Communications and
Information Portfolio 
Seligman
Global Technology
Portfolio
Seligman
International Growth
Portfolio
 
 
Year Ended December 31, 
Year Ended December 31,
Year Ended December 31,
 
 
 
2005
 
 
2004
 
 
2005
 
 
2004
 
 
2005
 
 
2004
  
Operations:
                                      
Net investment loss
  
$
(499,605
)
$
(137,411
)
$
(136,748
)
$
(124,228
)
$
(8,429
)
$
(14,403
)
Net realized gain on investments
    
8,134,445
    
11,032,600
    
1,260,856
    
785,099
    
408,932
    
318,101
  
Net realized loss on options written
    
—
    
(1,444
)
  
—
    
—
    
—
    
—
  
Net realized gain (loss) from foreign
currency transactions
    
—
    
—
    
18,374
    
208,233
    
(39,609
)
  
156,268
  
Payments received from the Manager (Note 12)
    
—
    
9,056
    
—
    
977
    
—
    
—
  
Net change in unrealized appreciation/
depreciation of investments
    
(3,683,330
)
  
(3,864,957
)
  
(467,685
)
  
(390,363
)
  
81,214
    
314,099
  
Net change in unrealized appreciation/
depreciation on translation of assets
and liabilities denominated in foreign
currencies and forward currency contracts
    
—
    
—
    
(151,367
)
  
(113,550
)
  
(277,026
)
  
(3,385
)
Increase in Net Assets From Operations
    
3,951,510
    
7,037,844
    
523,430
    
366,168
    
165,082
    
770,680
  
Distributions to Shareholders:
                                      
Net investment income — Class 1
    
—
    
—
    
—
    
—
    
—
    
(12,876
)
Decrease in Net Assets
From Distributions
    
—
    
—
    
—
    
—
    
—
    
(12,876
)
Capital Share Transactions:
                                      
Proceeds from sale of shares:
                                      
   Class 1
    
2,895,060
    
3,052,644
    
335,944
    
175,793
    
1,102,588
    
442,720
  
   Class 2
    
1,316,607
    
3,453,375
    
597,041
    
973,614
    
—
    
—
  
Value of shares issued in payment of:
Dividends — Class 1
    
—
    
—
    
—
    
—
    
—
    
12,876
  
Total
    
4,211,667
    
6,506,019
    
932,985
    
1,149,407
    
1,102,588
    
455,596
  
Cost of shares redeemed:
                                      
   Class 1
    
(17,669,176
)
  
(13,233,544
)
  
(2,546,604
)
  
(2,066,536
)
  
(1,234,304
)
  
(954,496
)
   Class 2
    
(2,638,953
)
  
(3,604,754
)
  
(1,037,266
)
  
(1,310,258
)
  
—
    
—
  
Total
    
(20,308,129
)
  
(16,838,298
)
  
(3,583,870
)
  
(3,376,794
)
  
(1,234,304
)
  
(954,496
)
Decrease in Net Assets From
Capital Share Transactions
    
(16,096,462
)
  
(10,332,279
)
  
(2,650,885
)
  
(2,227,387
)
  
(131,716
)
  
(498,900
)
Increase (Decrease) in Net Assets
    
(12,144,952
)
  
(3,294,435
)
  
(2,127,455
)
  
(1,861,219
)
  
33,366
    
258,904
  
Net Assets:
                                      
Beginning of year
    
70,888,242
    
74,182,677
    
10,656,070
    
12,517,289
    
3,749,169
    
3,490,265
  
End of Year*
  
$
58,743,290
  
$
70,888,242
  
$
8,528,615
  
$
10,656,070
  
$
3,782,535
  
$
3,749,169
  
                                       
__________
* Net of accumulated net investment
loss as follows:
  
$
(5,057
)
$
(4,983
)
$
(3,893
)
$
(3,396
)
$
(4,967
)
$
(5,161
)
See Notes to Financial Statements.

42

Seligman Portfolios, Inc.
Statements of Changes in Net Assets

 
 
Seligman
Investment Grade
Fixed Income
Portfolio
Seligman
Large-Cap
Value
Portfolio
Seligman
Smaller-Cap
Value
Portfolio
 
 
Year Ended December 31,
Year Ended December 31,
Year Ended December 31,
 
 
 
2005
 
 
2004
 
 
2005
 
 
2004
 
 
2005
 
 
2004
 
Operations:
                                      
Net investment income (loss)
  
$
122,579
  
$
144,570
  
$
34,875
  
$
47,855
  
$
(1,017,638
)
$
1,284,684
  
Net realized gain (loss) on investments
    
(84,983
)
  
11,350
    
429,238
    
340,466
    
20,382,569
    
23,976,151
  
Payments received from the Manager (Note 12)
    
—
    
—
    
—
    
744
    
—
    
4,005
  
Net change in unrealized appreciation/
depreciation of investments
    
(8,871
)
  
(38,156
)
  
58,369
    
409,496
    
(33,615,826
)
  
20,595,248
  
Increase (Decrease) in Net Assets
From Operations
    
28,725
    
117,764
    
522,482
    
798,561
    
(14,250,895
)
  
45,860,088
  
Distributions to Shareholders:
                                      
Net investment income:
                                      
   Class 1
    
(165,952
)
  
(293,991
)
  
(48,933
)
  
(61,944
)
  
(1,235,756
)
  
—
  
   Class 2
    
—
    
—
    
—
    
—
    
(58,214
)
  
—
  
Total
    
(165,952
)
  
(293,991
)
  
(48,933
)
  
(61,944
)
  
(1,293,970
)
  
—
  
Net realized short-term gain
on investments — Class 1
    
—
    
(169,248
)
  
—
    
—
    
—
    
—
  
Net realized long-term gain on investments:
                                      
   Class 1
    
—
    
(134,813
)
  
—
    
—
    
(20,089,240
)
  
(433,559
)
   Class 2
    
—
    
—
    
—
    
—
    
(3,564,658
)
  
(54,692
)
Total
    
—
    
(134,813
)
  
—
    
—
    
(23,653,898
)
  
(488,251
)
Decrease in Net Assets
From Distributions
    
(165,952
)
  
(598,052
)
  
(48,933
)
  
(61,944
)
  
(24,947,868
)
  
(488,251
)
Capital Share Transactions:
                                      
Proceeds from sale of shares:
                                      
   Class 1
    
792,326
    
1,028,058
    
1,470,806
    
445,045
    
18,071,480
    
92,028,338
  
   Class 2
    
—
    
—
    
—
    
—
    
10,160,903
    
16,417,372
  
Value of shares issued in payment of dividends:
                                      
   Class 1
    
165,952
    
293,991
    
48,933
    
61,944
    
1,235,756
    
—
  
   Class 2
    
—
    
—
    
—
    
—
    
58,214
    
—
  
Value of shares issued in payment of gain distributions:
                                      
   Class 1
    
—
    
304,061
    
—
    
—
    
20,089,240
    
433,559
  
   Class 2
    
—
    
—
    
—
    
—
    
3,564,658
    
54,692
  
Total
    
958,278
    
1,626,110
    
1,519,739
    
506,989
    
53,180,251
    
108,933,961
  
Cost of shares redeemed:
                                      
   Class 1
    
(1,623,823
)
  
(3,610,225
)
  
(2,145,389
)
  
(1,357,550
)
  
(74,254,204
)
  
(79,099,629
)
   Class 2
    
—
    
—
    
—
    
—
    
(7,758,428
)
  
(6,716,920
)
Total
    
(1,623,823
)
  
(3,610,225
)
  
(2,145,389
)
  
(1,357,550
)
  
(82,012,632
)
  
(85,816,549
)
Increase (Decrease) in Net Assets From
Capital Share Transactions
    
(665,545
)
  
(1,984,115
)
  
(625,650
)
  
(850,561
)
  
(28,832,381
)
  
23,117,412
  
Increase (Decrease) in Net Assets
    
(802,772
)
  
(2,464,403
)
  
(152,101
)
  
(113,944
)
  
(68,031,144
)
  
68,489,249
  
Net Assets:
                                      
Beginning of year
    
3,560,972
    
6,025,375
    
5,341,724
    
5,455,668
    
302,992,207
    
234,502,958
  
End of Year*
  
$
2,758,200
  
$
3,560,972
  
$
5,189,623
  
$
5,341,724
  
$
234,961,063
  
$
302,992,207
  
                                       
__________
* Including undistributed net investment
income (net of accumulated net investment
loss) as follows:
  
$
123,967
  
$
161,698
  
$
31,920
  
$
45,977
  
$
(3,094
)
$
1,286,593
  
See Notes to Financial Statements.      


43

Seligman Portfolios, Inc.
Notes to Financial Statements
 
1.
Organization — Seligman Portfolios, Inc. (the “Fund”) is an open-end diversified management investment company consisting of 9 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 Global Technology Portfolio (“Global Technology Portfolio”), Seligman International Growth Portfolio (“International Growth Portfolio”), Seligman Investment Grade Fixed Income Portfolio (“Investment Grade Portfolio”), Seligman Large-Cap Value Portfolio (“Large-Cap Value Portfolio”), and Seligman Smaller-Cap Value Portfolio (“Smaller-Cap Value Portfolio”), each designed to meet different investment goals. Shares of the Fund are provided as an investment medium for variable annuity and life insurance separate accounts offered by various insurance companies. Class 2 shares of the Communications and Information Portfolio are also offered to qualified pension or retirement plans.
   
2.
Multiple Classes of Shares — The Fund offers two classes of shares. Class 1 shares do not pay a distribution and service fee (“12b-1 fee”). Class 2 shares pay an annual 12b-1 fee of up to 0.25% of average daily net assets. The two classes of shares represent interests in the same portfolio of investments, have the same rights, and are generally identical in all respects except that each class bears its separate class-specific expenses, and has exclusive voting rights with respect to any matter on which a separate vote of any class is required.
   
3.
Significant Accounting Policies — The financial statements have been prepared in conformity with United States (“US”) generally accepted accounting principles, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results may differ from these estimates. The following summarizes the significant accounting policies of the Fund:

 
a.
Security Valuation — Net asset value per share is calculated as of the close of business of the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern time. Securities traded on an exchange are valued at the last sales price on the primary exchange or market on which they are traded. Securities not listed on an exchange or security market, or securities for which there is no last sales price, are valued at the mean of the most recent bid and asked prices or by independent pricing services based on bid prices which consider such factors as coupons, maturities, credit ratings, liquidity, specific terms and features, and the US Treasury yield curve, or are valued by J. & W. Seligman & Co. Incorporated (the “Manager”) based on quotations provided by primary market makers in such securities. Notwithstanding these valuation methods, the Global Technology Portfolio and International Growth Portfolio may adjust the value of securities as described below in order to reflect the fair value of such securities.
 
Many securities markets and exchanges outside the US close prior to the close of the NYSE; therefore, the closing prices for securities in such markets or on such exchanges may not fully reflect events that occur after the local market close but before the close of the NYSE. The Board of Directors (the “Board”) of the Fund approved “fair value” procedures under which a third-party service on a regular basis recommends adjustments to the local closing prices of certain foreign equity securities. The adjustments are based on a statistical analysis of the historical relationship between the price movements of a security and independent variables such as US market movements, sector movements, movements in the ADR of a security (if any), and movements in country or regional exchange-traded funds or futures contracts. The factors used vary with each security, depending on which factors have been most important historically.
 
Other securities for which market quotations are not readily available are valued at fair value determined in accordance with procedures approved by the Board. This can occur in the event of, among other things, natural disasters, acts of terrorism, market diruptions, intra-day trading halts and extreme market volatility. The determination of fair value involves subjective judgments. As a result, using fair value to price a security may result in a price materially different from the prices used by other mutual funds to determine net asset value or the price that may be realized upon the actual sale of the security.
 
Short-term holdings that mature in more than 60 days are valued at current market quotations. Short-term holdings maturing in 60 days or less are valued at amortized cost. Investments held by the Cash Management Portfolio are generally valued using the amortized cost method which approximates fair value. Investments of certain other funds in the Seligman Group of Investment Companies purchased to offset the Cash Management Portfolio’s liability for deferred directors’ fees are valued at net asset values.
 
 
b.
Foreign Securities — The Portfolios may invest up to 10% of their total assets in foreign securities (except Global Technology Portfolio and International Growth Portfolio (together, the “Seligman International Portfolios”), which may invest up to 100% of their total assets in foreign securities). Investments in foreign securities will primarily be traded in foreign currencies, and the Portfolios may temporarily hold funds in foreign currencies. The Portfolios may also invest in US dollar-denominated American Depositary Receipts (“ADR”), American Depositary Shares (“ADS”), European Depositary Receipts (“EDR”), Fiduciary Depositary Receipts (“FDR”), Global Depositary Receipts (“GDR”), and Global Depositary Shares (“GDS”). ADR and ADS are issued by domestic banks or trust companies and evidence ownership of securities issued by foreign corporations. ADR and ADS are traded on United States exchanges or over-the-counter and are not included in the 10% limitation. EDR, FDR, GDR, and GDS are receipts similar to ADR and ADS and are typically issued by foreign banks or trust companies and traded in Europe. The books and records of the Portfolios are maintained in US dollars. Foreign currency amounts are translated into US dollars on the following basis:
 
   
(i) market value of investment securities, other assets, and liabilities, at the daily rate of exchange as reported by a pricing service;
 
   
(ii) purchases and sales of investment securities, income, and expenses, at the rate of exchange prevailing on the respective dates of such transactions.
 
 
 
44
Seligman Portfolios, Inc.
Notes to Financial Statements
 
   
The net asset values per share of Portfolios which invest in securities denominated in foreign currencies will be affected by changes in currency exchange rates. Changes in foreign currency exchange rates may also affect the value of dividends and interest earned, gains and losses realized on sales of securities, and net investment income and losses. The rate of exchange between the US dollar and other currencies is determined by the forces of supply and demand in the foreign exchange markets.
 
Net realized foreign exchange gains and losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and from the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Portfolios’ books, and the US dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of portfolio securities and other foreign currency denominated assets and liabilities at period end, resulting from changes in exchange rates.
 
The Seligman International Portfolios separate that portion of the results of operations resulting from changes in the foreign currency exchange rates from the fluctuations arising from changes in the market prices of securities held in the portfolios. Similarly, these Portfolios separate the effect of changes in foreign currency exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the period.
 
 
c.
Forward Currency Contracts — Each Portfolio, other than Cash Management Portfolio and Investment Grade 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 or forward exchange rates and any unrealized gain or loss is included in net unrealized appreciation or depreciation on translation of assets and liabilities denominated in foreign currencies and forward currency contracts. The gain or loss, if any, arising from the difference between the settlement value of the forward contract and the closing of such contract, is included in net realized gain or loss from foreign currency transactions. For federal income tax purposes, certain open forward currency contracts are treated as sold during 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 reporting purposes.
 
 
d.
Options— Each Portfolio, other than Cash Management Portfolio and Investment Grade Portfolio, is authorized to write and purchase put and call options. When a Portfolio writes an option, an amount equal to the premium received by the Portfolio is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked to market to reflect the current market value of the option written. When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Portfolio enters into a closing transaction), the Portfolio realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium paid or received). The Portfolio, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. Written and purchased options are non-income producing investments.
 
 
e.
Taxes — The Portfolios’ policy is to comply with the requirements of the Internal Revenue Code applicable to Regulated Investment Companies and to distribute substantially all of their taxable net income and net gain realized to shareholders. Therefore, no provisions for Federal income or excise taxes are required. Withholding taxes on foreign dividends and interest, and for certain countries, taxes on the sale of foreign securities have been provided for in accordance with the Portfolios’ understanding of the applicable country’s tax rules and rates.
 
 
f.
Security Transactions and Related Investment Income — Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial statement and federal income tax purposes. Interest income is recorded on the accrual basis. The Portfolios amortize discount and premium on debt securities. Dividends receivable and payable are recorded on ex-dividend dates, except that certain dividends from foreign securities where the ex-dividend dates may have passed are recorded as soon as the Portfolio is informed of the dividend.
 
 
g.
Multiple Class Allocations — All income, expenses (other than class-specific expenses), and realized and unrealized gains or losses of a Portfolio are allocated daily to each class of shares based upon the relative value of shares of each class. Class-specific expenses, which include 12b-1 fees and any other items that are specifically attributable to a particular class, are charged directly to such class. For the year ended December 31, 2005, 12b-1 fees were the only class-specific expenses.
 
 
h.
Repurchase Agreements — The Portfolios may enter into repurchase agreements. Generally, securities received as collateral subject to repurchase agreements are deposited with the Portfolio’s 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. On a daily basis, the market value of securities held as collateral for repurchase agreements is monitored to ensure the existence of the proper level of collateral.
 
 
i.
Distributions to Shareholders — Dividends and distributions to shareholders are recorded on ex-dividend dates.
 
 
j.
Restricted Cash — Restricted cash represents deposits that are being held by banks as collateral for letters of credit issued in connection with the Fund’s insurance policies.
 
 
45

Seligman Portfolios, Inc.
Notes to Financial Statements
 
4. 
Management Fee, Distribution Services, and Other Transactions — The Manager manages the affairs of the Fund and provides or arranges for the necessary personnel and facilities. The Manager’s fee, which is calculated daily and payable monthly, is equal to 0.40%, on an annual basis, of each of Capital, Cash Management, Common Stock and Investment Grade Portfolios’ average daily net assets; and equal to 0.75%, on an annual basis, of Communications and Information Portfolio’s average daily net assets. The Manager’s fee for the Global Technology Portfolio is equal to 1.00% per annum of the first $2 billion of average daily net assets, 0.95% per annum of the next $2 billion of average daily net assets, and 0.90% per annum in excess of $4 billion of average daily net assets of the Portfolio. The Manager’s fee for the Large-Cap Value Portfolio is equal to 0.80% per annum of the first $500 million of average daily net assets, 0.70% per annum of the next $500 million of average daily net assets, and 0.60% per annum in excess of $1 billion of average daily net assets of the Portfolio. The Manager’s fee for the Smaller-Cap Value Portfolio is equal to 1.00% per annum of the first $500 million of average daily net assets, 0.90% per annum of the next $500 million of average daily net assets, and 0.80% per annum in excess of $1 billion of average daily net assets of the Portfolio. The Manager’s fee for the International Growth Portfolio is equal to 1.00% per annum on the first $50 million of average daily net assets, 0.95% per annum on the next $1 billion of average daily net assets, and 0.90% per annum in excess of $1.05 billion of average daily net assets of the Portfolio.
 
For the year ended December 31, 2005, the management fees for Global Technology Portfolio, International Growth Portfolio, Large-Cap Value Portfolio, and Smaller-Cap Value Portfolio were equal to 1.00%, 1.00%, 0.80%, and 1.00%, respectively, per annum of the average daily net assets of each of these Portfolios.
 
Wellington Management Company, LLP (the “Subadviser”), is the subadviser to the International Growth Portfolio and is responsible for furnishing investment advice, research and assistance. Under the subadvisory agreement, the Manager pays the Subadviser a subadvisory fee determined as follows: the Subadviser receives 0.45% on the first $50 million of the Portfolio’s average daily net assets and 0.40% of the Portfolio’s average daily net assets in excess of $50 million. For the two-year period ended September 15, 2005, the Subadviser agreed to limit the subadvisory fees payable to it by the Manager to 50% of the aggregate contractual management fee earned by the Manager in respect of the International Growth Portfolio, and certain series of Seligman Global Fund Series, Inc.
 
The Manager reimburses expenses, other than management and 12b-1 fees, that exceed a certain rate per annum of the average daily net assets of the following Portfolios:
 
 
Portfolio
Rate
Portfolio
Rate
 
Cash Management
0.30%
International Growth
1.00%
 
Global Technology
0.90   
Investment Grade
0.45   
 
 
Such reimbursements may be terminated at any time.
 
The amounts of these reimbursements, where applicable, for the year ended December 31, 2005, are disclosed in the Statements of Operations, and such amounts receivable from the Manager at December 31, 2005 are disclosed in the Statements of Assets and Liabilities.
 
Compensation of all officers of the Fund, all directors of the Fund who are employees of the Manager, and all personnel of the Fund and the Manager is paid by the Manager. Seligman Advisors, Inc. (the “Distributor”), an affiliate of the Manager, acts as distributor of shares of the Fund.
 
Under a Rule 12b-1 plan (the “Plan”) adopted by the Fund with respect to Class 2 shares of each Portfolio, insurance companies or their affiliates can enter into agreements with the Distributor and receive 12b-1 fees of up to 0.25%, on an annual basis, of the average daily net assets of Class 2 shares attributable to the particular insurance company or qualified plan for providing, among other things, personal services and/or the maintenance of shareholder accounts. Such fees are paid quarterly by each Portfolio to Seligman Advisors pursuant to the Plan. For the year ended December 31, 2005, fees incurred under the Plan aggregated $12,822, or 0.25% per annum; $28,597, or 0.25% per annum; $2,808 or 0.15% per annum; and $64,968 or 0.19% per annum of the average daily net assets of Class 2 shares of Capital Portfolio, Communications and Information Portfolio, Global Technology Portfolio and Smaller-Cap Value Portfolio, respectively.
 
Certain officers and directors of the Fund are officers or directors of the Manager and the Distributor.
 
The Fund has a compensation arrangement under which directors who receive fees may elect to defer receiving such fees. Directors may elect to have their deferred fees accrue interest or earn a return based on the performance of the other funds in the Seligman Group of Investment Companies. Deferred fees and related accrued earnings are not deductible by the Fund for federal income tax purposes until such amounts are paid. The cost of such fees and earnings/loss accrued thereon is included in directors’ fees and expenses, and the accumulated balances at December 31, 2005, are included in accrued expenses and other liabilities, as follows:
 
 
Portfolio
Amount
Portfolio
Amount
 
Capital
$7,688
International Growth
$7,789
 
Cash Management
  7,429
Investment Grade
  7,442
 
Common Stock
  7,922
Large-Cap Value
  4,189
 
Communications and Information
  7,908
Smaller-Cap Value
  4,849
 
Global Technology
  6,086
    

 
The accumulated balances at December 31, 2005 include each Portfolio’s proportionate share of the accumulated balance of six other portfolios of the Fund that were closed as of May 31, 2005, and were paid to the participating director in January 2006.
 
 
 
46
Seligman Portfolios, Inc.
Notes to Financial Statements

5.
Purchases and Sales of Securities — Purchase and sales of portfolio securities, excluding US Government obligations and short-term investments, for the year ended December 31, 2005, were as follows:
 
 
Portfolio
Purchases
  
Sales
  
Portfolio
Purchases
  
Sales
 
Capital
$23,680,045
  
$27,328,361
  
International Growth
$  6,719,928
  
$     6,924,424
 
Common Stock
6,459,798
  
9,211,662
  
Investment Grade
6,128,381
  
6,104,038
 
Communications and Information
79,535,096
  
92,175,445
  
Large-Cap Value
1,453,726
  
2,065,193
 
Global Technology
13,179,108
  
15,992,251
  
Smaller-Cap Value
59,596,765
  
114,319,259
 
 
For the year ended December 31, 2005, purchases and sales of US Government obligations were $12,965,272 and $13,439,624, respectively, for the Investment Grade Portfolio.
   
6.
Federal Tax Information — Certain components of income, expense and realized capital gain and loss are recognized at different times or have a different character for federal income tax purposes and for financial reporting purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset value per share of any Portfolio. As a result of the differences described above, the treatment for financial reporting purposes of distributions made during the year from net investment income or net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. The tax character of the distributions paid during the years ended December 31, 2005 and 2004, is the same for financial reporting purposes. For tax purposes, net realized short-term gain is treated as ordinary income. Further, the cost of investments also can differ for federal income tax purposes.
   
 
At December 31, 2005, the cost of investments for federal income tax purposes for each Portfolio was as follows:

 
Portfolio
Tax Basis Cost
  
Portfolio
Tax Basis Cost
  
 
Capital
$12,413,681
  
International Growth
$    3,185,489
  
 
Cash Management
15,995,322
  
Investment Grade
2,950,305
  
 
Common Stock
8,082,943
  
Large-Cap Value
4,176,626
  
 
Communications and Information
59,515,501
  
Smaller-Cap Value
194,483,843
  
 
Global Technology
7,804,536
        

 
The tax basis cost of certain Portfolios was greater than the cost for financial reporting purposes primarily due to the tax deferral of losses on wash sales. At December 31, 2005, the tax basis components of accumulated earnings (losses) were as follows:
 

   
Capital
  
Common
Stock
  
Communications
and Information
  
Global
Technology
 
Gross unrealized appreciation of portfolio securities
$
1,565,887
  
$
635,706
 *
$
2,917,066
 ** 
$
589,373
 ** 
 
Gross unrealized depreciation of portfolio securities
  
(308,215
)
  
(523,832
 )*   
(4,364,104
 )**  
(308,160
 )**
 
Net unrealized appreciation (depreciation) of portfolio securities
  
1,257,672
    
111,874*
    
(1,447,038
 )**  
281,213
 ** 
 
Net unrealized appreciation on foreign currencies and forward currency contracts
  
—
    
—
    
—
    
1,054
  
 
Undistributed ordinary income
  
—
    
88,778
    
—
    
—
  
 
Capital loss carryforward
  
(9,583,206
)
  
(2,320,636
)
  
(30,973,222
)
  
(12,143,936
)
 
Total accumulated losses
$
(8,325,534
)
$
(2,119,984
)
$
(32,420,260
)
$
(11,861,669
)
                           
 
 
        
 
    
 
      
 
 
  
International Growth 
    
Investment Grade
    
Large-Cap Value
    
Smaller-Cap Value
 
Gross unrealized appreciation of portfolio securities
$
541,137
 ** 
$
16,590
  
$
1,136,703
  
$
62,506,974
  
 
Gross unrealized depreciation of portfolio securities
  
(20,811
 )**   
(11,048
)
  
(105,199
)
  
(20,478,544
)
 
Net unrealized appreciation of portfolio securities
  
520,326
 **   
5,542
    
1,031,504
    
42,028,430
  
 
Net unrealized appreciation on foreign currencies and forward currency contracts
  
224
    
—
    
—
    
—
  
 
Undistributed ordinary income
  
—
    
128,627
    
34,592
    
—
  
 
Undistributed net realized gain/(Capital loss carryforward)
  
(2,115,385
)
  
(75,119
)
  
(822,247
)
  
19,353,033
  
 
Timing differences (post-October losses)
  
—
    
(25,967
)
  
—
    
—
  
 
Total accumulated earnings (losses)
$
(1,594,835
)
$
33,083
  
$
243,849
  
$
61,381,463
  


*
Includes the effect of options written.
**
Includes the effect of foreign currency translations.

 
47
 
Seligman Portfolios, Inc.
Notes to Financial Statements
 
 
At December 31, 2005, certain Portfolios had net capital loss carryforwards for federal income tax purposes which are available for offset against future taxable net capital gains. The amounts were determined after adjustments for certain differences between financial reporting and tax purposes, such as wash sale losses. Accordingly, no capital gain distributions are expected to be paid to shareholders of these portfolios until net capital gains have been realized in excess of the available capital loss carryforwards. There is no assurance that the Portfolios will be able to utilize all of their capital loss carryforwards before they expire. These loss carryforwards expire in amounts and fiscal years as follows:
 
 
Fiscal
Year
Capital
   
Common
Stock
   
Communications
and Information
   
Global
Technology
   
International
Growth
   
Investment
Grade
   
Large-Cap
Value
 
2009
$2,947,645
  
—
  
$  5,959,723
  
$  7,093,668
  
$1,208,517
  
—
  
—
 
2010
6,635,561
  
$1,954,075
  
19,435,297
  
4,941,506
  
906,868
  
—
  
$172,410
 
2011
—
  
366,561
  
5,578,202
  
108,762
  
—
  
—
  
649,837
 
2012
—
  
—
  
—
  
—
  
—
  
$  9,586
  
—
 
2013
—
  
—
  
—
  
—
  
—
  
65,533
  
—
 
Total
$9,583,206
  
$ 2,320,636
  
$30,973,222
  
$12,143,936
  
$2,115,385
  
$75,119
  
$822,247

 
During the year 2005, certain of the Portfolios utilized previous years’ capital loss carryforwards to offset current net capital gains realized, as follows:

 
Portfolio
Loss Carryforward Utilized
  
Portfolio
Loss Carryforward Utilized
 
Capital
$1,991,430
  
Global Technology
$ 1,310,790
 
Common Stock
  1,036,942
  
International Growth
361,650
 
Communications and Information
  8,248,539
  
Large-Cap Value
429,238
 
7.
Committed Line of Credit — All of the Portfolios, except the Cash Management Portfolio, are participants in a joint $400 million committed line of credit that is shared by substantially all open-end funds in the Seligman Group of Investment Companies. The directors have currently limited each Portfolio’s borrowings to 10% of its net assets. Borrowings pursuant to the credit facility are subject to interest at a rate equal to the overnight federal funds rate plus 0.50%. Each participating Portfolio incurs a commitment fee of 0.10% per annum on its share of the unused portion of the credit facility. The credit facility may be drawn upon only for temporary purposes and is subject to certain other customary restrictions. The credit facility commitment expires in June 2006, but is renewable annually with the consent of the participating banks. For the year ended December 31, 2005, the Fund did not borrow from the credit facility.
   
8.
Outstanding Forward Exchange Currency Contracts — At December 31, 2005, the Fund had outstanding forward exchange currency contracts to purchase or sell foreign currencies as follows
 
 
Contract
  
Foreign
Currency
  
In Exchange
for US$
  
Settlement
Date
  
Value
US$
  
Unrealized
Appreciation
(Depreciation)
  
 
Communications and Information
                                
 
Bought:
                                
 
Euros
    
34,837
    
41,258
  
 1/3/06
    
41,254
  
 
$ (4)
 
                                   
 
International Growth
                                
 
Bought:
                                
 
Hong Kong dollars
    
14,175
    
1,828
  
1/3/06
    
1,828
    
—
  
 
Sold:
                                
 
British pounds
    
415
    
712
  
 1/1/06
    
714
    
 (2)
 
 
British pounds
    
1,426
    
2,459
  
 1/4/06
    
2,453
    
 6
  
 
British pounds
    
700
    
1,205
  
 1/5/06
    
1,205
    
—
  
 
Canadian dollars
    
4,935
    
4,239
  
 1/4/06
    
4,246
    
 (7)
 
 
Swiss franc
    
14,839
    
11,269
  
 1/3/06
    
11,292
    
(23)
 
 
Total
                          
 
$(26)
 
 
 
48
Seligman Portfolios, Inc.
Notes to Financial Statements

9.
Capital Stock Transactions — At December 31, 2005, there were 100,000,000 shares of Capital Stock authorized for each of Capital, Cash Management, Common Stock, Global Technology, International Growth, Investment Grade and Large-Cap Value Portfolios; 150,000,000 for each of Communications and Information and Smaller-Cap Value Portfolios, all at a par value of $0.001 per share. Transactions in shares of Capital Stock were as follows:
 
     
Capital Portfolio
 
 
 
 
 
 
 
 
 
 
 
 
Class 1 
 
Class 2 
 
Cash Management Portfolio 
 
Common Stock Portfolio 
 
 
Year Ended
 December 31, 
 
Year Ended
 December 31,  
 
Year Ended
 December 31,  
 
Year Ended
 December 31,  
   
2005
  
2004
  
2005
  
2004
  
2005
  
2004
  
2005
  
2004
  
 
Sale of shares
  
50,636
    
26,469
    
41,264
    
95,256
    
22,528,542
    
2,741,317
    
92,731
    
27,017
  
 
Shares issued in payment of dividends
  
—
    
—
    
—
    
—
    
301,663
    
14,307
    
13,104
    
10,044
  
 
Total
  
50,636
    
26,469
    
41,264
    
95,256
    
22,830,205
    
2,755,624
    
105,835
    
37,061
  
 
Shares redeemed
  
(254,499
)
  
(331,842
)
  
(108,619
)
  
(40,129
)
  
(9,504,002
)
  
(4,961,041
)
  
(345,881
)
  
(305,754
)
 
Increase (decrease) in shares
  
(203,863
)
  
(305,373
)
  
(67,355
)
  
55,127
    
13,326,203
    
(2,205,417
)
  
(240,046
)
  
(268,693
)
 
 


   
Communications and Information Portfolio
  
Global Technology Portfolio
   
Class 1
Class 2
  
Class 1
Class 2
   
Year Ended
December 31,
Year Ended
December 31,
  
Year Ended
December 31,
Year Ended
December 31,
   
2005
2004
2005
2004
  
2005
2004
2005
2004
 
Sale of shares
223,357 
254,974  
105,675 
292,045 
 
26,408 
14,711 
51,647 
83,296 
 
Shares redeemed
(1,388,527)
(1,127,141)
(210,254)
(312,377)
  
(210,010)
(174,462)
(88,691)
(111,756)
 
Decrease in shares
(1,165,170)
(872,167)
(104,579)
(20,332)
  
(183,602)
(159,751)
(37,044)
(28,460)

 
 
   
International Growth
Portfolio
  
Investment Grade
Fixed Income Portfolio
  
Large-Cap Value
Portfolio
   
Year Ended
December 31,
  
Year Ended
December 31,
  
Year Ended
December 31,
   
2005
  
2004
  
2005
  
2004
  
2005
  
2004
  
 
Sale of shares
  
103,884
    
45,184
    
84,888
    
95,293
    
135,875
    
46,921
  
 
Shares issued in payment of dividends
  
—
    
1,211
    
19,031
    
31,714
    
4,218
    
6,020
  
 
Shares issued in payment of gain distributions
  
—
    
—
    
—
    
32,801
    
—
    
—
  
 
Total
  
103,884
    
46,395
    
103,919
    
159,808
    
140,093
    
52,941
  
 
Shares redeemed
  
(117,148
)
  
(97,775
)
  
(174,730
)
  
(330,962
)
  
(197,004
)
  
(139,605
)
 
Decrease in shares
  
(13,264
)
  
(51,380
)
  
(70,811
)
  
(171,154
)
  
(56,911
)
  
(86,664
)
 
     
Smaller-Cap Value Portfolio
  
     
Class 1
  
Class 2
  
     
Year Ended
  
Year Ended
  
     
December 31,
  
December 31,
  
     
2005
  
2004
  
2005
  
2004
  
 
Sale of shares
    
1,005,656
    
5,300,154
    
568,414
    
953,060
  
 
Shares issued in payment of dividends
    
74,443
    
—
    
3,524
    
—
  
 
Shares issued in payment of gain distributions
    
1,210,195
    
23,247
    
215,778
    
2,953
  
 
Total
    
2,290,294
    
5,323,401
    
787,716
    
956,013
  
 
Shares redeemed
    
(4,168,017
)
  
(4,732,076
)
  
(436,623
)
  
(399,001
)
 
Increase (decrease) in shares
    
(1,877,723
)
  
591,325
    
351,093
    
557,012
  


49

Seligman Portfolios, Inc.
Notes to Financial Statements

10.
Indemnification — In the normal course of business, the Fund may enter into contracts that contain a variety of representations or that provide indemnification for certain liabilities. The Fund’s maximum exposure under these arrangements is unknown, as this would include future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.
   
11.
Options Written — Transactions in options written during the year ended December 31, 2005, were as follows:

 
Common Stock Portfolio
Shares Subject
to Call/Put
  
Premiums
  
 
Options outstanding, December 31, 2004
  
—
    
—
  
 
Options written
  
39,200
  
$
71,193
  
 
Options terminated in closing purchase transactions
  
(2,300
)
  
(4,777
)
 
Options expired
  
(21,500
)
  
(28,953
)
 
Options exercised
  
(10,900
)
  
(22,999
)
 
Options outstanding, December 31, 2005
  
4,500
  
$
14,464
  
 
12.
Other Matters — In late 2003, the Manager conducted an extensive internal review in response to public announcements concerning frequent trading in shares of open-end mutual funds. As of September 2003, the Manager had one arrangement that permitted frequent trading in the Seligman mutual funds. This arrangement was in the process of being closed down by the Manager before the first proceedings relating to trading practices within the mutual fund industry were publicly announced. Based on a review of the Manager’s records for 2001 through 2003, the Manager identified three other arrangements that had permitted frequent trading in the Seligman mutual funds. All three had already been terminated prior to the end of September 2002.
 
The results of the Manager’s internal review were presented to the Independent Directors of all the Seligman registered investment companies (the “Seligman Funds”). In order to resolve matters with the Independent Directors relating to the four arrangements that permitted frequent trading, the Manager, in May 2004, made payments to three mutual funds and agreed to waive a portion of its management fee with respect to another mutual fund (none of which was a Portfolio of Seligman Portfolios, Inc.).
 
Since February 2004, the Manager has been in discussions with the New York staff of the Securities and Exchange Commission ("SEC") and the Office of the New York Attorney General (“Attorney General”) in connection with their review of frequent trading in certain of the Seligman Funds. No late trading is involved. This review was apparently stimulated by the Manager’s voluntary public disclosure of the foregoing arrangements in January 2004. In March 2005, negotiations to settle the matter were initiated by the New York staff of the SEC. After several months of negotiations, tentative agreement was reached, both with the New York staff of the SEC and the Attorney General, on the financial terms of a settlement. However, settlement discussions with the Attorney General ended when the Attorney General sought to impose operating conditions on the Manager that were unacceptable to the Manager, would have applied in perpetuity and were not requested or required by the SEC. Subsequently, the New York staff of the SEC indicated that, in lieu of moving forward under the terms of the tentative financial settlement, the staff was considering recommending to the Commissioners of the SEC the instituting of a formal action against the Manager and the Distributor (together, “Seligman”).
   
 
Seligman believes that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds.
   
 
Immediately after settlement discussions with the Attorney General ended, the Attorney General issued subpoenas to certain of the Seligman Funds and their directors. The subpoenas seek various Board materials and information relating to the deliberations of the Independent Directors as to the advisory fees paid by the Seligman Funds to the Manager. The Manager has objected to the Attorney General’s seeking of such information and, on September 6, 2005, filed suit in federal district court seeking to enjoin the Attorney General from pursuing a fee inquiry. Seligman believes that the Attorney General’s inquiry is improper because Congress has vested exclusive regulatory oversight of investment company advisory fees in the SEC.
   
 
At the end of September 2005, the Attorney General indicated that it intends to file an action at some time in the future alleging, in substance, that the Manager permitted other persons to engage in frequent trading other than the arrangements described above and, as a result, the prospectus disclosure of the Seligman Funds is and has been misleading. Seligman believes any such action would be without merit.
   
 
Any resolution of these matters with regulatory authorities may include, but not be limited to, sanctions, penalties, injunctions regarding Seligman, restitution to mutual fund shareholders or changes in procedures. Any penalties or restitution will be paid by Seligman and not by the Seligman Funds.
   
 
Seligman does not believe that the foregoing possible actions or any threatened legal actions should have a material adverse impact on the Manager, the Distributor or the Seligman Funds; however, there can be no assurance of this, or that these matters and any related publicity will not result in reduced demand for shares of the Seligman Funds or other adverse consequences.
 
The Manager also in late 2003 reviewed its practice of placing some of the Seligman Funds’ orders to buy and sell portfolio securities with brokerage firms in recognition of their sales of Seligman mutual funds. At the time such orders were placed, this practice was permissible when done properly; however, the Manager believes that it may have violated applicable requirements for certain of such orders
 
 
50
 
Seligman Portfolios, Inc.
Notes to Financial Statements
 

 
as a result of compensation arrangements the Manager had with certain brokerage firms. The Manager discontinued this practice entirely in October 2003. The Manager is confident that the execution of all such orders was consistent with its best execution obligations and that the Seligman Funds did not pay higher brokerage commissions than they would otherwise have paid for comparable transactions.
 
The results of this internal review also were presented to the Independent Directors. In order to resolve matters with the Independent Directors with regard to portfolio brokerage commissions, in May 2004, the Manager made payments to each of twenty-four funds in an amount equal to the commissions paid by each such fund during the period from 1998 through 2003 to certain brokerage firms in recognition of sales of fund shares, including the following amounts paid to certain portfolios of Seligman Portfolios, Inc., which have been reported as Payments received from the Manager in the Statement of Changes in Net Assets for the year ended December 31, 2004:
 
 
Portfolio
Amount
  
Portfolio
Amount
 
Capital
$  339
  
Global Technology
$  977
 
Common Stock
1,172
  
Large-Cap Value
744
 
Communications and Information
9,056
  
Smaller-Cap Value
4,005
 
 
The Manager also responded fully to information requests from the SEC and the NASD relating to the Manager’s use of revenue sharing and fund portfolio brokerage commissions and will continue to provide additional information if, and as, requested. In January 2006, the SEC notified Seligman of the completion of its examination in regards to revenue sharing and brokerage commissions, and no further liability is expected to result from this matter.
 
13.
Liquidation of Certain Portfolios and Redemption of Shares — The Board of the Fund authorized the redemption of all outstanding shares of six portfolios previously offered by the Fund: Frontier Portfolio, Global Growth Portfolio, Global Smaller Companies Portfolio, High-Yield Bond Portfolio, Income and Growth Portfolio and Large-Cap Growth Portfolio (the “Redeeming Portfolios”), and the liquidation of the Redeeming Portfolios in accordance with the Fund’s Articles of Incorporation. The shares of the Redeeming Portfolios were redeemed on May 31, 2005 (the “Redemption Date”). Prior to the Redemption Date, contract holders who had allocated a portion of their investments to a Redeeming Portfolio allocated that portion of their investments to the other Portfolios or other investment options that continued to be offered by the variable insurance program in which they participate. Amounts not allocated to another Portfolio by the Redemption Date were automatically allocated to a money-market fund, including, in some cases, the Fund’s Cash Management Portfolio.


51

 
Seligman Portfolios, Inc.
Financial Highlights

The tables below are intended to help you understand the financial performance of each Class of each Portfolio for the periods presented. Certain information reflects financial results for a single share that was held throughout the periods shown. Per share amounts are calculated using average shares outstanding. “Total Return” shows the rate that you would have earned (or lost) on an investment in each Portfolio, assuming you reinvested all your dividends and capital gain distributions. Total returns do not reflect any administrative fees or asset-based sales charges that are associated with variable annuity and variable life insurance contracts, and are not annualized for periods of less than one year.

Capital Portfolio

CLASS 1
                                
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
12.25
  
$
11.28
  
$
8.29
  
$
12.37
  
$
24.68
  
Income (Loss) from Investment Operations:
                                
Net investment loss
    
(0.06
)
  
(0.05
)
  
(0.03
)
  
(0.05
)
  
(0.06
)
Net realized and unrealized gain (loss) on investments
    
1.59
    
1.02
    
3.02
    
(4.03
)
  
(4.01
)
Total from Investment Operations
    
1.53
    
0.97
    
2.99
    
(4.08
)
  
(4.07
)
Less Distributions:
                                
Dividends from net investment income
    
—
    
—
    
—
    
—
    
(0.02
)
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
(8.22
)
Total Distributions
    
—
    
—
    
—
    
—
    
(8.24
)
Net Asset Value, End of Year
  
$
13.78
  
$
12.25
  
$
11.28
  
$
8.29
  
$
12.37
  
Total Return
    
12.49
%
  
8.60
%
  
36.07
%
  
(32.98
)%
  
(15.97
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
8,235
  
$
9,821
  
$
12,486
  
$
11,833
  
$
24,349
  
Ratio of expenses to average net assets
    
1.03
%
  
0.92
%
  
0.82
%
  
0.80
%
  
0.61
%
Ratio of net investment loss to average net assets
    
(0.50
)%
  
(0.46
)%
  
(0.33
)%
  
(0.47
)%
  
(0.31
)%
Portfolio turnover rate
    
173.99
%
  
213.08
%
  
140.59
%
  
129.07
%
  
215.16
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
                
0.96
%
  
0.81
%
  
0.70
%
Ratio of net investment loss to average net assets
                
(0.47
)%
  
(0.48
)%
  
(0.39
)%
_____________
ø The Manager, at its discretion, reimbursed expenses for certain years presented.
See Notes to Financial Statements.

52
 

Seligman Portfolios, Inc.
Financial Highlights

Capital Portfolio (continued)

 
CLASS 2    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
12.13
  
$
11.20
  
$
8.25
  
$
12.34
  
$
24.68
  
Income (Loss) from Investment Operations:
                                
Net investment loss
    
(0.09
)
  
(0.08
)
  
(0.05
)
  
(0.07
)
  
(0.11
)
Net realized and unrealized gain (loss) on investments
    
1.57
    
1.01
    
3.00
    
(4.02
)
  
(4.01
)
Total from Investment Operations
    
1.48
    
0.93
    
2.95
    
(4.09
)
  
(4.12
)
Less Distributions:
                                
Distribution from net realized capital gain
    
—
    
—
    
—
    
—
    
(8.22
)
Total Distributions
    
—
    
—
    
—
    
—
    
(8.22
)
Net Asset Value, End of Year
  
$
13.61
  
$
12.13
  
$
11.20
  
$
8.25
  
$
12.34
  
Total Return
    
12.20
%
  
8.30
%
  
35.76
%
  
(33.14
)%
  
(16.18
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
5,125
  
$
5,385
  
$
4,353
  
$
2,891
  
$
3,792
  
Ratio of expenses to average net assets
    
1.28
%
  
1.17
%
  
1.07
%
  
1.05
%
  
0.85
%
Ratio of net investment loss to average net assets
    
(0.75
)%
  
(0.71
)%
  
(0.58
)%
  
(0.72
)%
  
(0.55
)%
Portfolio turnover rate
    
173.99
%
  
213.08
%
  
140.59
%
  
129.07
%
  
215.16
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
                
1.21
%
  
1.06
%
  
0.94
%
Ratio of net investment loss to average net assets
                
(0.72
)%
  
(0.73
)%
  
(0.63
)%
 
 

 
Cash Management Portfolio
 
CLASS 1    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
1.000
  
$
1.000
  
$
1.000
  
$
1.000
  
$
1.000
  
Income from Investment Operations:
                                
Net investment income
    
0.024
    
0.006
    
0.004
    
0.010
    
0.038
  
Total from Investment Operations
    
0.024
    
0.006
    
0.004
    
0.010
    
0.038
  
Less Distributions:
                                
Dividends from net investment income
    
(0.024
)
  
(0.006
)
  
(0.004
)
  
(0.010
)
  
(0.038
)
Total Distributions
    
(0.024
)
  
(0.006
)
  
(0.004
)
  
(0.010
)
  
(0.038
)
Net Asset Value, End of Year
  
$
1.000
  
$
1.000
  
$
1.000
  
$
1.000
  
$
1.000
  
Total Return
    
2.41
%
  
0.62
%
  
0.38
%
  
1.00
%
  
3.88
%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
15,154
  
$
1,828
  
$
4,034
  
$
7,870
  
$
12,211
  
Ratio of expenses to average net assets
    
0.70
%
  
0.70
%
  
0.70
%
  
0.69
%
  
0.07
%
Ratio of net investment income to average net assets
    
2.71
%
  
0.56
%
  
0.39
%
  
0.98
%
  
3.82
%
Without management fee waiver
                                
and/or expense reimbursement:ø
                                
Ratio of expenses to average net assets
    
0.73
%
  
1.14
%
  
0.83
%
        
0.72
%
Ratio of net investment income to average net assets
    
2.68
%
  
0.12
%
  
0.26
%
        
3.17
%
_____________
ø The Manager, at its discretion, waived management fees and/or reimbursed expenses for certain years presented.
See Notes to Financial Statements.
 
 
53

Seligman Portfolios, Inc.
Financial Highlights

Common Stock Portfolio

CLASS 1
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
10.84
  
$
9.72
  
$
7.80
  
$
10.84
  
$
14.23
  
Income (Loss) from Investment Operations:
                                
Net investment income
    
0.10
    
0.13
    
0.08
    
0.08
    
0.08
  
Net realized and unrealized gain (loss) on investments
    
0.12
    
1.10
    
1.97
    
(3.02
)
  
(1.85
)
Total from Investment Operations
    
0.22
    
1.23
    
2.05
    
(2.94
)
  
(1.77
)
Less Distributions:
                                
Dividends from net investment income
    
(0.19
)
  
(0.11
)
  
(0.13
)
  
(0.10
)
  
(0.15
)
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
(1.47
)
Total Distributions
    
(0.19
)
  
(0.11
)
  
(0.13
)
  
(0.10
)
  
(1.62
)
Net Asset Value, End of Year
  
$
10.87
  
$
10.84
  
$
9.72
  
$
7.80
  
$
10.84
  
Total Return
    
2.03
%
  
12.65
%
  
26.30
%
  
(27.16
)%
  
(12.24
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
8,219
  
$
10,792
  
$
12,297
  
$
12,931
  
$
23,756
  
Ratio of expenses to average net assets
    
0.86
%
  
0.69
%
  
0.73
%
  
0.60
%
  
0.59
%
Ratio of net investment income to average net assets
    
0.95
%
  
1.30
%
  
0.92
%
  
0.88
%
  
0.59
%
Portfolio turnover rate
    
70.36
%
  
42.68
%
  
127.26
%
  
131.95
%
  
64.45
%

__________
See Notes to Financial Statements.
 
54

Seligman Portfolios, Inc.
Financial Highlights

Communications and Information Portfolio

 
CLASS 1
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
12.92
  
$
11.62
  
$
8.05
  
$
12.59
  
$
14.82
  
Income (Loss) from Investment Operations:
                                
Net investment loss
    
(0.10
)
  
(0.02
)
  
(0.07
)
  
(0.07
)
  
(0.07
)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions
    
1.11
    
1.32
    
3.64
    
(4.47
)
  
0.80
  
Total from Investment Operations
    
1.01
    
1.30
    
3.57
    
(4.54
)
  
0.73
  
Less Distributions:
                                
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
(2.96
)
Total Distributions
    
—
    
—
    
—
    
—
    
(2.96
)
Net Asset Value, End of Year
  
$
13.93
  
$
12.92
  
$
11.62
  
$
8.05
  
$
12.59
  
Total Return
    
7.82
%
  
11.19
%
  
44.35
%
  
(36.06
)%
  
5.34
%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
47,010
  
$
58,646
  
$
62,903
  
$
53,769
  
$
113,424
  
Ratio of expenses to average net assets
    
1.10
%
  
1.00
%
  
1.01
%
  
0.98
%
  
0.93
%
Ratio of net investment loss to average net assets
    
(0.77
)%
  
(0.15
)%
  
(0.78
)%
  
(0.76
)%
  
(0.45
)%
Portfolio turnover rate
    
133.04
%
  
127.69
%
  
105.53
%
  
91.37
%
  
130.94
%
 

 
CLASS 2
    
   
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
12.76
  
$
11.51
  
$
7.99
  
$
12.53
  
$
14.80
  
Income (Loss) from Investment Operations:
                                
Net investment loss
    
(0.13
)
  
(0.05
)
  
(0.10
)
  
(0.10
)
  
(0.11
)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions
    
1.09
    
1.30
    
3.62
    
(4.44
)
  
0.80
  
Total from Investment Operations
    
0.96
    
1.25
    
3.52
    
(4.54
)
  
0.69
  
Less Distributions:
                                
Distribution from net realized capital gain
    
—
    
—
    
—
    
—
    
(2.96
)
Total Distributions
    
—
    
—
    
—
    
—
    
(2.96
)
Net Asset Value, End of Year
  
$
13.72
  
$
12.76
  
$
11.51
  
$
7.99
  
$
12.53
  
Total Return
    
7.52
%
  
10.86
%
  
44.06
%
  
(36.23
)%
  
5.08
%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
11,733
  
$
12,243
  
$
11,280
  
$
7,544
  
$
16,537
  
Ratio of expenses to average net assets
    
1.35
%
  
1.25
%
  
1.26
%
  
1.23
%
  
1.18
%
Ratio of net investment loss to average net assets
    
(1.02
)%
  
(0.40
)%
  
(1.03
)%
  
(1.01
)%
  
(0.70
)%
Portfolio turnover rate
    
133.04
%
  
127.69
%
  
105.53
%
  
91.37
%
  
130.94
%
_____________
See Notes to Financial Statements.
 
 
 
55


Seligman Portfolios, Inc.
Financial Highlights

Global Technology Portfolio

CLASS 1
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
12.54
  
$
12.06
  
$
8.86
  
$
12.96
  
$
20.14
  
Income (Loss) from Investment Operations:
                                
Net investment loss
    
(0.19
)
  
(0.13
)
  
(0.11
)
  
(0.11
)
  
(0.14
)
Net realized and unrealized gain (loss) on investments
    
1.40
    
0.51
    
2.98
    
(4.32
)
  
(4.06
)
Net realized and unrealized gain (loss)
on foreign currency transactions
    
(0.19
)
  
0.10
    
0.33
    
0.33
    
(0.25
)
Total from Investment Operations
    
1.02
    
0.48
    
3.20
    
(4.10
)
  
(4.45
)
Less Distributions:
                                
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
(2.73
)
Total Distributions
    
—
    
—
    
—
    
—
    
(2.73
)
Net Asset Value, End of Year
  
$
13.56
  
$
12.54
  
$
12.06
  
$
8.86
  
$
12.96
  
Total Return
    
8.13
%
  
3.98
%
  
36.12
%
  
(31.64
)%
  
(22.05
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
6,641
  
$
8,446
  
$
10,047
  
$
9,361
  
$
18,533
  
Ratio of expenses to average net assets
    
1.90
%
  
1.90
%
  
1.61
%
  
1.40
%
  
1.40
%
Ratio of net investment loss to average net assets
    
(1.53
)%
  
(1.10
)%
  
(1.14
)%
  
(1.06
)%
  
(0.87
)%
Portfolio turnover rate
    
155.29
%
  
146.96
%
  
188.00
%
  
144.18
%
  
160.75
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
    
2.49
%
  
2.39
%
  
2.39
%
  
1.80
%
  
1.61
%
Ratio of net investment loss to average net assets
    
(2.12
)%
  
(1.59
)%
  
(1.92
)%
  
(1.46
)%
  
(1.08
)%
 

 
CLASS 2
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
 
Net Asset Value, Beginning of Year
  
$
12.46
  
$
12.00
  
$
8.82
  
$
12.93
  
$
20.14
  
Income (Loss) from Investment Operations:
                                
Net investment loss
    
(0.21
)
  
(0.15
)
  
(0.13
)
  
(0.13
)
  
(0.17
)
Net realized and unrealized gain (loss) on investments
    
1.39
    
0.51
    
2.98
    
(4.31
)
  
(4.06
)
Net realized and unrealized gain (loss)
on foreign currency transactions
    
(0.19
)
  
0.10
    
0.33
    
0.33
    
(0.25
)
Total from Investment Operations
    
0.99
    
0.46
    
3.18
    
(4.11
)
  
(4.48
)
Less Distributions:
                                
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
(2.73
)
Total Distributions
    
—
    
—
    
—
    
—
    
(2.73
)
Net Asset Value, End of Year
  
$
13.45
  
$
12.46
  
$
12.00
  
$
8.82
  
$
12.93
  
Total Return
    
7.95
%
  
3.83
%
  
36.05
%
  
(31.79
)%
  
(22.20
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
1,888
  
$
2,210
  
$
2,470
  
$
1,598
  
$
3,219
  
Ratio of expenses to average net assets
    
2.05
%
  
2.05
%
  
1.76
%
  
1.55
%
  
1.54
%
Ratio of net investment loss to average net assets
    
(1.68
)%
  
(1.25
)%
  
(1.29
)%
  
(1.21
)%
  
(1.02
)%
Portfolio turnover rate
    
155.29
%
  
146.96
%
  
188.00
%
  
144.18
%
  
160.75
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
    
2.64
%
  
2.54
%
  
2.54
%
  
1.95
%
  
1.75
%
Ratio of net investment loss to average net assets
    
(2.27
)%
  
(1.74
)%
  
(2.07
)%
  
(1.61
)%
  
(1.23
)%

__________
ø The Manager, at its discretion, reimbursed expenses.
See Notes to Financial Statements.
 
56

Seligman Portfolios, Inc.
Financial Highlights

International Growth Portfolio

CLASS 1
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
11.10
  
$
8.97
  
$
6.72
  
$
8.05
  
$
10.65
  
Income (Loss) from Investment Operations:
                                
Net investment income (loss)
    
(0.03
)
  
(0.04
)
  
0.05
    
0.04
    
0.03
  
Net realized and unrealized gain (loss) on investments
    
1.53
    
1.79
    
1.41
    
(2.13
)
  
(2.43
)
Net realized and unrealized gain (loss)
on foreign currency transactions
    
(0.94
)
  
0.42
    
0.79
    
0.76
    
(0.20
)
Total from Investment Operations
    
0.56
    
2.17
    
2.25
    
(1.33
)
  
(2.60
)
Less Distributions:
                                
Dividends from net investment income
    
—
    
(0.04
)
  
—
    
—
    
—
  
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
—
  
Total Distributions
    
—
    
(0.04
)
  
—
    
—
    
—
  
Net Asset Value, End of Year
  
$
11.66
  
$
11.10
  
$
8.97
  
$
6.72
  
$
8.05
  
Total Return
    
5.04
%
  
24.19
%
  
33.48
%
  
(16.52
)%
  
(24.41
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
3,783
  
$
3,749
  
$
3,490
  
$
3,315
  
$
4,793
  
Ratio of expenses to average net assets
    
2.00
%
  
2.00
%
  
1.64
%
  
1.40
%
  
1.40
%
Ratio of net investment income (loss) to average net assets
    
(0.24
)%
  
(0.40
)%
  
0.67
%
  
0.49
%
  
0.34
%
Portfolio turnover rate
    
189.00
%
  
213.83
%
  
285.08
%
  
183.86
%
  
199.09
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
    
5.05
%
  
4.08
%
  
3.45
%
  
1.96
%
  
1.80
%
Ratio of net investment loss to average net assets
    
(3.29
)%
  
(2.48
)%
  
(1.14
)%
  
(0.07
)%
  
(0.06
)%
_____________
ø The Manager, at its discretion, reimbursed expenses.
See Notes to Financial Statements.
 
 
57

Seligman Portfolios, Inc.
Financial Highlights

Investment Grade Fixed Income Portfolio

CLASS 1
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
9.27
  
$
10.85
  
$
10.80
  
$
10.25
  
$
10.22
  
Income (Loss) from Investment Operations:
                                
Net investment income
    
0.34
    
0.34
    
0.34
    
0.42
    
0.57
  
Net realized and unrealized gain (loss) on investments
    
(0.26
)
  
(0.07
)
  
0.17
    
0.58
    
(0.01
)
Total from Investment Operations
    
0.08
    
0.27
    
0.51
    
1.00
    
0.56
  
Less Distributions:
                                
Dividends from net investment income
    
(0.55
)
  
(0.91
)
  
(0.46
)
  
(0.45
)
  
(0.53
)
Distributions from net realized capital gain
    
—
    
(0.94
)
  
—
    
—
    
—
  
Total Distributions
    
(0.55
)
  
(1.85
)
  
(0.46
)
  
(0.45
)
  
(0.53
)
Net Asset Value, End of Year
  
$
8.80
  
$
9.27
  
$
10.85
  
$
10.80
  
$
10.25
  
Total Return
    
0.95
%
  
2.41
%
  
4.72
%
  
9.83
%
  
5.52
%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
2,758
  
$
3,561
  
$
6,025
  
$
9,067
  
$
7,103
  
Ratio of expenses to average net assets
    
0.85
%
  
0.85
%
  
0.85
%
  
0.82
%
  
0.63
%
Ratio of net investment income to average net assets
    
3.67
%
  
3.13
%
  
3.08
%
  
3.94
%
  
5.35
%
Portfolio turnover rate
    
596.99
%
  
184.46
%
  
445.98
%
  
291.98
%
  
146.08
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
    
1.70
%
  
1.11
%
  
0.91
%
        
0.76
%
Ratio of net investment income to average net assets
    
2.82
%
  
2.87
%
  
3.02
%
        
5.22
%
__________
ø The Manager, at its discretion, reimbursed expenses for certain years presented.
See Notes to Financial Statements.
 
58

Seligman Portfolios, Inc.
Financial Highlights

Large-Cap Value Portfolio

CLASS 1
    
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
10.65
  
$
9.27
  
$
7.02
  
$
10.46
  
$
11.59
  
Income (Loss) from Investment Operations:
                                
Net investment income
    
0.07
    
0.09
    
0.11
    
0.10
    
0.09
  
Net realized and unrealized gain (loss) on investments
    
1.06
    
1.41
    
2.27
    
(3.43
)
  
(1.06
)
Total from Investment Operations
    
1.13
    
1.50
    
2.38
    
(3.33
)
  
(0.97
)
Less Distributions:
                                
Dividends from net investment income
    
(0.11
)
  
(0.12
)
  
(0.13
)
  
(0.11
)
  
(0.11
)
Distributions from net realized capital gain
    
—
    
—
    
—
    
—
    
(0.05
)
Total Distributions
    
(0.11
)
  
(0.12
)
  
(0.13
)
  
(0.11
)
  
(0.16
)
Net Asset Value, End of Year
  
$
11.67
  
$
10.65
  
$
9.27
  
$
7.02
  
$
10.46
  
Total Return
    
10.63
%
  
16.25
%
  
33.91
%
  
(31.90
)%
  
(8.28
)%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
5,190
  
$
5,342
  
$
5,456
  
$
4,692
  
$
7,708
  
Ratio of expenses to average net assets
    
1.34
%
  
1.26
%
  
1.18
%
  
1.16
%
  
0.83
%
Ratio of net investment income to average net assets
    
0.65
%
  
0.89
%
  
1.34
%
  
1.12
%
  
1.13
%
Portfolio turnover rate
    
27.35
%
  
15.09
%
  
16.60
%
  
21.83
%
  
28.17
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
                
1.29
%
        
1.10
%
Ratio of net investment income to average net assets
                
1.23
%
        
0.86
%
_____________
ø The Manager, at its discretion, reimbursed expenses for certain years presented.
See Notes to Financial Statements.
 
59

Seligman Portfolios, Inc.
Financial Highlights

Smaller-Cap Value Portfolio
 
CLASS 1
                      
 
  
Year Ended December 31, 
Per Share Data:
    
2005
 
 
2004
 
 
2003
 
 
2002
 
 
2001
  
Net Asset Value, Beginning of Year
  
$
19.40
  
$
16.20
  
$
10.87
  
$
13.04
  
$
10.58
  
Income (Loss) from Investment Operations:
                                
Net investment income (loss)
    
(0.07
)
  
0.08
    
(0.05
)
  
(0.06
)
  
(0.03
)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions
    
(0.71
)
  
3.15
    
5.48
    
(1.94
)
  
2.52
  
Total from Investment Operations
    
(0.78
)
  
3.23
    
5.43
    
(2.00
)
  
2.49
  
Less Distributions:
                                
Dividends from net investment income
    
(0.11
)
  
—
    
—
    
—
    
—
  
Distributions from net realized capital gain
    
(1.84
)
  
(0.03
)
  
(0.10
)
  
(0.17
)
  
(0.03
)
Total Distributions
    
(1.95
)
  
(0.03
)
  
(0.10
)
  
(0.17
)
  
(0.03
)
Net Asset Value, End of Year
  
$
16.67
  
$
19.40
  
$
16.20
  
$
10.87
  
$
13.04
  
Total Return
    
(3.98
)%
  
19.95
%
  
49.94
%
  
(15.37
)%
  
23.52
%
Ratios/Supplemental Data:
                                
Net assets, end of year (000s omitted)
  
$
199,357
  
$
268,410
  
$
214,525
  
$
103,770
  
$
100,090
  
Ratio of expenses to average net assets
    
1.14
%
  
1.14
%
  
1.16
%
  
1.18
%
  
1.19
%
Ratio of net investment income (loss) to
                                
average net assets
    
(0.37
)%
  
0.47
%
  
(0.42
)%
  
(0.51
)%
  
(0.29
)%
Portfolio turnover rate
    
23.01
%
  
45.24
%
  
18.31
%
  
56.74
%
  
29.99
%
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
                            
1.22
%
Ratio of net investment loss to average net assets
                            
(0.32
)%


CLASS 2
                      
 
  
Year Ended December 31, 
 
5/1/01* to
 
Per Share Data:
 
 
2005
 
 
2004
 
 
2003
 
 
2002
 
 
12/31/01
  
Net Asset Value, Beginning of Period
  
$
19.26
  
$
16.13
  
$
10.85
  
$
13.04
  
$
10.78
  
Income (Loss) from Investment Operations:
                                
Net investment income (loss)
    
(0.10
)
  
0.05
    
(0.08
)
  
(0.08
)
  
(0.03
)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions
    
(0.70
)
  
3.11
    
5.46
    
(1.94
)
  
2.32
  
Total from Investment Operations
    
(0.80
)
  
3.16
    
5.38
    
(2.02
)
  
2.29
  
Less Distributions:
                                
Dividends from net investment income
    
(0.03
)
  
—
    
—
    
—
    
—
  
Distributions from net realized capital gain
    
(1.84
)
  
(0.03
)
  
(0.10
)
  
(0.17
)
  
(0.03
)
Total Distributions
    
(1.87
)
  
(0.03
)
  
(0.10
)
  
(0.17
)
  
(0.03
)
Net Asset Value, End of Period
  
$
16.59
  
$
19.26
  
$
16.13
  
$
10.85
  
$
13.04
  
Total Return
    
(4.13
)%
  
19.60
%
  
49.57
%
  
(15.52
)%
  
21.23
%
Ratios/Supplemental Data:
                                
Net assets, end of period (000s omitted)
  
$
35,604
  
$
34,582
  
$
19,978
  
$
8,554
  
$
5,178
  
Ratio of expenses to average net assets
    
1.33
%
  
1.33
%
  
1.35
%
  
1.37
%
  
1.39%†
  
Ratio of net investment income (loss) to average net assets
    
(0.56
)%
  
0.28
%
  
(0.61
)%
  
(0.70
)%
  
(0.46)%†
  
Portfolio turnover rate
    
23.01
%
  
45.24
%
  
18.31
%
  
56.74
%
  
29.99%††
  
Without expense reimbursement:ø
                                
Ratio of expenses to average net assets
                            
1.41%†
  
Ratio of net investment loss to average net assets
                            
(0.48)%†
  
__________
*
Commencement of offering of shares.
†
Annualized.
††
For the year ended December 31, 2001.
ø
The Manager, at its discretion, reimbursed expenses for the period presented.
See Notes to Financial Statements.
 
 
60

Seligman Portfolios, Inc.
Report of Ernst & Young LLP, Independent
Registered Public Accounting Firm

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 Global Technology Portfolio, Seligman International Growth Portfolio, Seligman Investment Grade Fixed Income Portfolio, Seligman Large-Cap Value Portfolio, and Seligman Smaller-Cap Value Portfolio, and collectively referred to as the “Fund”) as of December 31, 2005, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005, by correspondence with the custodians and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective portfolios constituting Seligman Portfolios, Inc. at December 31, 2005, 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 U.S. generally accepted accounting principles.

 
 

 
New York, New York
February 17, 2006
 
61

Seligman Portfolios, Inc.
Matters Relating to the Directors’ Consideration of the
Continuance of the Management Agreement

[In this disclosure, the term “Portfolios” refers to the Seligman Capital Portfolio, the Seligman Cash Management Portfolio, the Seligman Common Stock Portfolio, the Seligman Communications and Information Portfolio, the Seligman Global Technology Portfolio, the Seligman International Growth Portfolio, the Seligman Investment Grade Fixed Income Portfolio, the Seligman Large-Cap Value Portfolio and the Seligman Smaller-Cap Value Portfolio.]

The directors of the Portfolios unanimously approved the continuances of the Management Agreements between the Portfolios and the Manager at a meeting held on November 17, 2005, and, in the case of the Seligman International Growth Portfolio (the “Subadvised Portfolio”), which is sub-advised by Wellington Management Company, LLP (“Subadviser” or “Wellington”), the continuance of the Subadvisory Agreement between the Manager and Subadviser.

In preparation for the meeting, experienced counsel who are independent of the Manager had discussed with the Manager the continuances and nature of materials to be provided to the directors, the directors had requested and evaluated extensive materials from the Manager and, where relevant, the Subadviser, including performance and expense information for other investment companies with similar investment objectives derived from data compiled by Lipper Inc. (“Lipper”). Prior to voting, the directors reviewed the proposed continuances of the Management Agreements and the Subadvisory Agreement with the Manager, with representatives of the Subadviser and with experienced counsel who are independent of the Manager and received a memorandum from such counsel discussing the legal standards for their consideration of the proposed continuances. The independent directors also discussed the proposed continuances in a private session with counsel at which no representatives of the Manager or the Subadviser were present.
 
In reaching their determination with respect to the continuance of the Management Agreements with respect to each Portfolio and the Subadvisory Agreement with respect to the Subadvised Portfolio, the directors considered their knowledge of the nature and quality of the services provided by the Manager and Subadviser, as applicable, to the Portfolios gained from their experience as directors and/or trustees of the Seligman Group of Funds, their overall confidence in the Manager’s and Subadviser's integrity and competence they have gained from that experience, the Manager’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Manager’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the Seligman Group of Funds. The directors noted that the Board has six regular meetings each year, at each of which they review extensive materials and information presented by the Manager and the Subadviser and receive presentations from the Manager on the investment results of those funds in the Seligman Group of Funds of which a corresponding Portfolio is a “clone” (each such fund, a “Corresponding Fund”).

The directors also considered all other factors they believed relevant, including the following:

1.
the nature, extent and quality of investment and administrative services rendered by the Manager and, where applicable, the Subadviser;
2.
payments received by the Manager and, where applicable, the Subadviser from all sources in respect of each Portfolio and all investment companies in the Seligman Group of Funds;
3.
the costs borne by, and profitability of, the Manager and its affiliates in providing services to each Portfolio and to all investment companies in the Seligman Group of Funds, and, where relevant, financial and profitability information provided by the Subadviser;
4.
comparative fee and expense data for each Portfolio and other investment companies with similar investment objectives;
5.
the extent to which economies of scale would be realized as the Portfolios grow and whether the fee levels reflect any economies of scale for the benefit of investors;
6.
the Manager’s and, where relevant, the Subadviser’s practices regarding allocation of portfolio transactions of the Portfolios, including the extent to which the Manager and the Subadviser benefit from soft dollar arrangements;
7.
information about “revenue sharing” arrangements that the Manager enters into in respect of the Portfolios;
8.
portfolio turnover rates of each Portfolio compared to other investment companies with similar investment objectives;
9.
fall-out benefits which the Manager and its affiliates and the Subadviser and its affiliates receive from their relationships to the Portfolios;
10.
information about fees charged by the Manager and, where relevant, the Subadviser to other clients with similar investment objectives;
11.
the professional experience and qualifications of each portfolio management team and other senior personnel of the Manager and the Subadviser; and
12.
the terms of the Management Agreements and the Subadvisory Agreement.

In their deliberations, the directors did not identify any particular information that was all-important or controlling, and directors attributed different weights to the various factors. The directors evaluated all information available to them on a Portfolio-by-Portfolio basis, and their determinations were made separately in respect of each Portfolio.
 
The directors determined that the overall arrangements between each Portfolio and the Manager, as provided in the Management Agreements, and, with respect to the Subadvised Portfolio, between the Manager and the Subadviser, as provided in the Subadvisory Agreement, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their reasonable judgment.


62


Seligman Portfolios, Inc.
Matters Relating to the Directors’ Consideration of the
Continuance of the Management Agreement

The material factors and conclusions that formed the basis for the directors’ reaching their determinations to approve the continuances of the Management Agreements and the Subadvisory Agreement (including their determinations that the Manager should continue to be the investment adviser for each Portfolio, that the Subadviser should continue to be the subadviser for the Subadvised Portfolio, and that the fees payable to the Manager and to the Subadviser pursuant to the Management Agreements and the Subadvisory Agreement are appropriate) were separately discussed by the directors.

Nature, Extent and Quality of Services Provided by the Manager and the Subadviser

The directors noted that, under the Management Agreements, the Manager, subject to the control of the directors, administers each Portfolio’s business and other affairs. For each Portfolio other than the Subadvised Portfolio, the Manager manages the investment of the assets of that Portfolio, including making purchases and sales of portfolio securities consistent with each Portfolio’s investment objective and policies. The Management Agreement for the Subadvised Portfolio provides that the Manager will enter into a Subadvisory Agreement with the Subadviser pursuant to which that Subadviser will provide such investment management services; that the Manager will continue to have responsibility for investment management services provided under the Subadvisory Agreement; and that, in the event the Subadviser ceases to provide services to the Subadvised Portfolio, the services will be provided by the Manager or, subject to necessary approvals, by another firm selected by the directors. Under the Management Agreements in respect of each Portfolio, the Manager also provides the Portfolios with such office space, administrative and other services (exclusive of, and in addition to, any such services provided by any others retained by the Portfolios) and executive and other personnel as are necessary for Portfolio operations. The Manager pays all of the compensation of directors of the Portfolios who are employees or consultants of the Manager and of the officers and employees of the Portfolios, including the Portfolios’ chief compliance officer.

The directors also noted that, pursuant to the Subadvisory Agreement, the Subadviser, subject to the control of the directors and in accordance with the objectives, policies and strategies of the Subadvised Portfolio set forth in its Prospectus and Statement of Additional Information and applicable law, and in conjunction with and under the supervision of the Manager, furnishes the Manager and the Subadvised Portfolio with such investment advice, research and assistance as the Manager or the Subadvised Portfolio shall from time to time reasonably request. In this regard, it is the responsibility of the Subadviser (i) to participate in the development of a Subadvised Portfolio’s overall investment strategy and in the determination of investment allocations; (ii) to provide investment advice and research to the Subadvised Portfolio with respect to existing and potential investments in securities, including company visits and meetings with management; (iii) to determine securities and other assets for investment; (iv) to select brokers and dealers; (v) to cause the execution of trades; and (vi) unless otherwise agreed to by the Manager, to vote proxies solicited by or with respect to issuers of securities in which assets of the Subadvised Portfolio may be invested from time to time.

The directors considered the scope and quality of services provided by the Manager under the Management Agreements and by the Subadviser under the Subadvisory Agreement and noted that the scope of services provided had expanded over time as a result of regulatory and other developments. The directors noted that, for example, each of the Manager and the Subadviser is responsible for maintaining and monitoring its own and, to varying degrees, a Portfolio’s compliance programs, and these compliance programs have recently been refined and enhanced in light of recently adopted regulatory requirements. The directors considered the quality of the investment research capabilities of the Manager and the Subadviser and the other resources they have dedicated to performing services for the Portfolios. At prior meetings the directors had also considered the Manager’s and Subadviser's practices with respect to the selection of brokers and dealers to effect portfolio transactions, including their duty to seek best execution and information about the levels of commissions paid by each Portfolio that invests in equity securities. The quality of administrative and other services, including the Manager’s role in coordinating the activities of the Portfolios’ other service providers (including, in the case of the Subadvised Portfolio, the Subadviser), also were considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided (and expected to be provided) to each of the Portfolios under the Management Agreements and to the Subadvised Portfolio under the Subadvisory Agreement.

On an ongoing basis, the Manager reports to the directors on the status of various matters relating to market timing activity affecting certain funds in the Seligman Group of Funds. At this meeting, the Manager and its counsel and the directors’ special counsel also addressed, among other matters: the action brought by the Manager and its president against the Attorney General of the State of New York seeking an order enjoining the Attorney General from, among other things, investigating the fees paid by the funds in the Seligman Group of Funds to the Manager; the ex parte application filed by the Attorney General to seek further discovery and appoint a special referee to supervise the Attorney General’s investigation relating to market timing; and the indication by the Staff of the New York Office of the Securities and Exchange Commission (“SEC”) that it was considering recommending that the SEC institute a formal action against the Manager and Seligman Advisors Inc. relating to market timing. After a detailed presentation by the Manager and further discussion with the Manager, the Manager’s counsel, the directors’ special counsel and other experienced counsel independent of the Manager, the independent directors concluded that they retained confidence in the integrity of the Manager and its ability to provide management services to the Portfolios.

The directors also considered information provided by the Subadviser about certain regulatory matters affecting it and concluded that they retained confidence in the Subadviser's integrity and ability to provide subadvisory services to the Subadvised Portfolio.

Costs of Services Provided and Profitability to the Manager and Subadviser

At the request of the directors, the Manager provided information concerning profitability of the Manager’s investment advisory and investment company activities and its financial condition based on historical information for 2004 and 2005 (through September 30) and estimates for full-year 2005. The information considered by the directors included operating profit margin information for the Manager’s investment company business alone (i.e., excluding results of its other businesses) and on a consolidated basis. The directors also reviewed the Manager’s profitability data and


63

Seligman Portfolios, Inc.
Matters Relating to the Directors’ Consideration of the
Continuance of the Management Agreement
 
estimated profitability data for each Portfolio. The directors reviewed with the Manager’s chief financial officer the assumptions and methods of allocation used by the Manager in preparing the portfolio-specific profitability data. The Manager stated its belief that the methods of allocation used were reasonable, but it noted that there are limitations inherent in allocating costs to multiple individual advisory products served by an organization such as the Manager (and similarly the Subadviser) where each of the advisory products draws on, and benefits from, the research and other resources of the organization.

The Subadviser provided the directors with its financial statements for 2004, information concerning overall profitability data for its entire operations for 2004 and information about its revenues attributable to the Subadvised Portfolio in 2004. The Manager separately provided information about fees paid by the Subadvised Portfolio to the Subadviser in 2004 and on an estimated basis in 2005. The directors reviewed and discussed the Subadviser’s profitability data.

The directors recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix, numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. In considering profitability information, the directors considered the effect of fall-out benefits on the Manager’s and Subadviser’s expenses, as well as the “revenue sharing” arrangements the Manager has entered into with certain entities that distribute shares of the Portfolios. The directors focused on profitability of the Manager’s relationships with the Portfolios before taxes and distribution expenses. In the case of the Subadviser, the directors reviewed a pro forma statement of partnership income itemizing revenues from the Subadvised Portfolio. The directors recognized that the Manager and the Subadviser should, in the abstract, be entitled to earn a reasonable level of profits for the services each provides to the Portfolios and, based on their review, concluded that they were satisfied that the Manager’s and Subadviser’s level of profitability from their relationships with the Portfolios was not excessive.

Fall-Out Benefits

The directors considered that the Manager benefits from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute the Seligman Group of Funds’ purchases and sales of securities. The Manager assured the directors that it was closely monitoring the SEC’s recently issued proposed interpretive guidance on the use of soft dollars by investment advisers and that it would modify its current arrangements as necessary to comply with the SEC’s final guidelines.

The directors received and reviewed information concerning the Manager’s soft dollar arrangements, which included a description of the Manager’s practices with respect to allocating portfolio brokerage for brokerage and research services, fund-by-fund data for the twelve months ended September 30, 2005 on the dollar amount of commissions allocated for third-party research and brokerage services and for proprietary research and brokerage services, and a list of firms providing third-party research and brokerage to the Manager as of September 30, 2005. The directors recognized that the Subadviser also has benefited from soft dollar arrangements using portfolio brokerage of the Subadvised Portfolio. The Subadviser provided information about its soft dollar practices, including a list of brokers with whom trades for the Subadvised Portfolio were executed for the twelve months ended September 30, 2005, indicating the amount of commissions paid to each broker in recognition of third party soft dollar research and brokerage services.

The directors recognized that the Manager’s and the Subadviser’s profitability would be somewhat lower if they did not receive research and brokerage services for soft dollars. The directors noted that the Manager and the Subadviser each derive reputational and other benefits from their association with the Portfolios.

Investment Results

The Manager reminded the directors that each Portfolio is a “clone” of its Corresponding Fund and as a result the investment performance of a Portfolio and its Corresponding Fund closely track each other, although investment results may differ slightly between them due to minor variations in the portfolio holdings and differences in the expense ratios. In addition to the information received by the directors for the meeting, the directors receive detailed performance information for each Corresponding Fund at each regular Board meeting during the year. Consistent with prior practice, the directors evaluated the investment performance of each Portfolio when they evaluated the investment performance of its Corresponding Fund. The directors also reviewed information comparing the relative performance of each Portfolio with its Corresponding Fund over the one-, three-, five- and, where applicable, ten-year periods ended September 30, 2005, and they noted that the performance closely corresponded in each period reviewed.

Seligman Capital Portfolio. The directors reviewed information showing performance of the Seligman Capital Fund (the “Capital Fund”), the Corresponding Fund for the Seligman Capital Portfolio, compared to other funds in the Lipper Mid-Cap Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005 and compared to the Russell Midcap Growth Index and a group of 11 competitor funds selected by the Manager over annualized rolling three- and five-year periods ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005. The comparative information showed that the Capital Fund showed some improvement in its Lipper ranking in the one- and three-year periods ending September 30, 2005, with performance in the one-year period slightly under the Lipper category median. They noted that the Capital Fund’s performance was substantially below the median over the five-year period. The directors noted that, for the first nine months of 2005, the Capital Fund’s results were above each of the Lipper average, the index and the competitor average, although the Capital Fund’s results had been below the Lipper average, the index and the competitor average in each of 2002, 2003 and 2004. Taking into account these comparisons and the other factors considered, the directors concluded that the Seligman Capital Portfolio’s investment results over time had been satisfactory.


64

Seligman Portfolios, Inc.
Matters Relating to the Directors’ Consideration of the
Continuance of the Management Agreement

Seligman Cash Management Portfolio. The directors considered the twelve-month trailing average yield of the Seligman Cash Management Fund (the “Cash Management Fund”), the Corresponding Fund for the Seligman Cash Management Portfolio, as compared to an average of money market funds prepared by iMoneyNet, Inc. (formerly IBC Financial Data) for the period from 1998 through September 30, 2005. The comparative information showed that the Cash Management Fund’s returns had consistently been below the iMoneyNet index by varying, but relatively small, amounts, and that the gap had narrowed appreciably in 2005 as yields increased. The Manager explained that the Cash Management Fund and the Portfolio are managed conservatively, and that their average portfolio quality is higher than that of many other money market funds, which tends to reduce their investment returns. The directors also noted that the Manager has voluntarily agreed to reimburse the Portfolio to the extent certain of its expenses exceed 0.30% per annum and that the Portfolio had successfully maintained a stable net asset value of one dollar at all times. Taking into account these comparisons and the other factors considered, the directors concluded that the Seligman Cash Management Portfolio’s investment results over time had been satisfactory.

Seligman Common Stock Portfolio. The directors reviewed information showing performance of the Seligman Common Stock Fund (the “Common Stock Fund”), the Corresponding Fund for the Seligman Common Stock Portfolio, compared to other funds in the Lipper Large-Cap Core Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005, and compared to the Standard & Poor’s 500 Index and a group of nine competitor funds selected by the Manager over annualized rolling three- and five-year periods ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005. The Manager reminded the directors that the Common Stock Fund’s portfolio manager had changed in 2004. The comparative information showed that the Common Stock Fund results were below the Lipper average, the index and the competitor average for the first nine months of 2005 after having exceeded each benchmark in 2004. In the annualized rolling three- and five-year periods ended September 30, 2005, the Common Stock Fund’s results were below each of the benchmarks. The Manager explained the steps that the Common Stock Fund’s portfolio manager was taking to seek to improve the Common Stock Fund’s performance. The Manager added that it retained a high level of confidence in the portfolio manager’s abilities. Taking into account these comparisons and the other factors considered, including the Manager’s efforts to address the directors’ concerns about Common Stock Fund’s long-term investment results, the directors concluded that the Seligman Common Stock Portfolio’s investment results over time had been acceptable.

Seligman Communications and Information Portfolio. The directors reviewed information showing performance of the Seligman Communications and Information Fund (the “C & I Fund”), the Corresponding Fund for the Seligman Communications and Information Portfolio, compared to other funds in the Lipper Science & Technology Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005, and compared to the Goldman Sachs Technology Indexes and a group of 18 competitor funds selected by the Manager over annualized rolling 3- and 5-year periods ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005. The comparative information showed that the C & I Fund had performed significantly above each of these benchmarks in the annualized rolling five-year period ended September 30, 2005, in each of 2001, 2002, 2004 and during the nine months ended September 30, 2005, although it had fallen below these benchmarks, in some cases substantially, in 2000 and 2003. Taking into account these comparisons and the other factors considered, the directors concluded that the Seligman Communications and Information Portfolio’s investment results over time had been highly satisfactory.

Seligman Global Technology Portfolio. The directors reviewed information showing performance of the Seligman Global Technology Fund (the “Global Technology Fund”), the Corresponding Fund for the Seligman Global Technology Portfolio, compared to other funds in the Lipper Science and Technology Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005, and compared to the Morgan Stanley Capital International World Information Technology (Gross) Index (the “MSCI WIT Index”) and a group of eight competitor funds selected by the Manager over annualized rolling three- and five-year periods ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005. The comparative information showed that the Global Technology Fund’s investment results were above the Lipper average, the MSCI WIT Index and the competitor average in all periods presented except calendar 2003, when the Global Technology Fund’s results, although substantial and positive, were significantly below each benchmark. The directors also noted that the Global Technology Fund’s Lipper ranking was in the top quartile for one- and five-year periods ended September 30, 2005 and was above median for the ten-year period then ended, although its ranking in the three-year period was below the median due to the Global Technology Fund’s results in 2003. Based upon their review, the directors concluded that the Seligman Global Technology Portfolio’s investment performance was highly satisfactory.

Seligman International Growth Portfolio. The directors reviewed information showing performance of the Seligman International Growth Fund (the “International Growth Fund”), the Corresponding Fund for the Seligman International Growth Portfolio, compared to other funds in the Lipper International Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005, and compared to the Morgan Stanley Capital International Europe, Asia and Far East (Gross) Index (the “MSCI EAFE Index”) and a group of nine competitor funds selected by the Manager over annualized rolling three- and five-year periods ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005. The Manager reminded the directors that Wellington had assumed portfolio management responsibilities for both the International Growth Fund and Seligman International Growth Portfolio in September 2003. The comparative information showed that the International Growth Fund’s results had been above the MSCI EAFE Index, the competitor average and the Lipper average in 2004, but that the International Growth Fund lagged each of those benchmarks by substantial amounts for the first nine months of 2005. The comparative information also showed that the International Growth Fund’s results had consistently been below the Lipper average, the MSCI EAFE Index and the competitor average in periods prior to 2004. The directors also noted that the International Growth Fund fell in the last quartile of Lipper rankings for the one-, three-, five- and ten-year periods ended September 30, 2005. The Manager stated that for periods prior to 2004 the Manager believed it was appropriate to consider the favorable historical results achieved by Wellington in the International Growth Fund’s asset class, which had been an important factor in selecting Wellington as the International Growth Fund’s and the Portfolio's Subadviser. He explained that, in light of this record, the


65

Seligman Portfolios, Inc.
Matters Relating to the Directors’ Consideration of the
Continuance of the Management Agreement

Manager viewed the results for the most recent nine-month period as a source of concern but not as an indication of any fundamental flaw in Wellington’s investment process. The directors concluded that they continued to have confidence in Wellington’s ability to manage the Seligman International Growth Portfolio.

Seligman Investment Grade Fixed Income Portfolio. The directors reviewed information showing performance of the Seligman Investment Grade Fixed Income Fund (the “IGFI Fund”), the Corresponding Fund for the Seligman Investment Grade Fixed Income Portfolio, compared to other funds in the Lipper Corporate Debt Funds BBB-Rated Average over the one- and three-year periods ended September 30, 2005, and compared to the Lehman Brothers Government/Credit Index and a group of ten competitor funds selected by the Manager over an annualized rolling three-year period ended September 30, 2005, for each calendar year in the 2002-to-2004 period, and for the first nine months of 2005, as applicable. The comparative information showed that the IGFI Fund’s investment results were below the Lipper average, the index and the competitor average over all periods except 2002 (the first full year of operations for the IGFI Fund), and that its Lipper ranking was in the last quartile for the one- and three-year periods ended September 30, 2005. The Manager acknowledged the directors’ concerns about the IGFI Fund’s relative performance, reiterated the Manager’s commitment to enhancing its investment capabilities with a view to improving the IGFI Fund’s results, and reviewed with the directors various options under consideration by the Manager. The directors concluded that they were satisfied that the Manager was addressing their concerns and retained confidence in the Manager’s capabilities to manage the Seligman Investment Grade Fixed Income Portfolio.

Seligman Large-Cap Value Portfolio. The directors reviewed information showing performance of the Seligman Large-Cap Value Fund (the “Large-Cap Fund”), the Corresponding Fund for the Seligman Large-Cap Value Portfolio, compared to other funds in the Lipper Large-Cap Value Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005, and compared to the S&P 500/ Barra Value Index and a group of 11 competitor funds selected by the Manager over annualized rolling three- and five-year periods ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005, as applicable. The comparative information showed that the Large-Cap Fund’s results were above the Lipper average, the index and the competitor average in 2003 and 2004 and continued to show strong relative performance in the first nine months of 2005, after having lagged its benchmarks substantially in 2002. The directors also noted that the Large-Cap Fund’s Lipper performance ranking was in the top quartile for the one- and three-year periods and was above median in the five-year period. Based upon their review, the directors concluded that the Seligman Large-Cap Value Portfolio’s relative investment performance over time had been highly satisfactory.

Seligman Smaller-Cap Value Portfolio. The directors reviewed information showing performance of the Seligman Smaller-Cap Value Fund (the “Smaller-Cap Fund”), the Corresponding Fund for the Seligman Smaller-Cap Value Portfolio, compared to other funds in the Lipper Small-Cap Value Funds Average over the one-, three-, five-, and ten-year periods ended September 30, 2005, and compared to the Russell 2000 Value Index and a group of nine competitor funds selected by the Manager over an annualized rolling three- and five-year period ended September 30, 2005, for each calendar year in the 2000-to-2004 period, and for the first nine months of 2005, as applicable. The comparative information showed that the Smaller-Cap Fund’s results were substantially below the Lipper average, the index and the competitor average for the first nine months of 2005, after having been modestly below those benchmarks in 2004 and substantially above them in 2003. The comparative information also showed that over the longer term the Smaller-Cap Fund’s investment results had generally been above or only modestly below its benchmarks except in 2002 and the first nine months of 2005. The directors noted that the Smaller-Cap Fund’s Lipper ranking was in the last quartile for the one-, three-, and five-year periods ended September 30, 2005. However, they recognized that this was largely attributable to the results in 2002 and 2005. Based upon their review, the directors concluded that the Seligman Smaller-Cap Value Portfolio’s relative investment performance over time had been satisfactory.

Management Fees and Other Expenses

The Manager reminded the directors that the management fee rate paid by each Portfolio is the same as the fee rate paid by its Corresponding Fund, except for certain Portfolios which had a lower fee rate than their Corresponding Funds primarily for historical reasons. The directors noted that the management fee rates for the Seligman Large-Cap Value Portfolio and the Seligman Smaller-Cap Value Portfolio include breakpoints (which had not been reached), whereas the fee rates for their Corresponding Funds do not.

The directors also compared the management fee rate payable by each Portfolio to the rate paid by other funds in its peer group, which consisted of the appropriate Lipper category for funds that are purchased by insurance company separate accounts, or a subset thereof of funds with net assets more nearly comparable to those of the applicable Portfolio. In the case of the Seligman Capital Portfolio (0.40%), the Seligman Cash Management Portfolio (0.40%), the Seligman Common Stock Portfolio (0.40%), the Seligman Communications and Information Portfolio (0.75%), the Seligman Investment Grade Fixed Income Portfolio (0.40%) and the Seligman Large-Cap Value Portfolio (0.80%), the directors noted that the management fee paid to the Manager was similar to or below the average and median management fee for the peer group. The directors also noted that the management fee rate paid by each of the Seligman Global Technology Portfolio (1.00%) and the Seligman International Growth Portfolio (1.00%) was somewhat higher and, in the case of the Seligman Smaller-Cap Value Portfolio (1.00%), was materially higher, than the average and median management fee for the peer groups. However, the directors noted that in each case the management fee rate paid by a Portfolio was well within the range of fees paid by other funds in that Portfolio’s peer group. The directors recognized that it is difficult to make comparisons of management and subadvisory fees because there are variations in the services that are included in the fees paid by other funds.

The directors also considered the fees the Manager and the Subadviser charge other clients with investment objectives similar to those of certain of the Portfolios. Certain of the Manager’s clients are unregistered investment companies whose shares are sold primarily outside the United States. In each such case, the fee rates charged to these companies are equal to or higher than those charged to the comparable Portfolios. In addition, the management fee rates paid by each Portfolio is the same as, or in some cases less than, the fee rate paid by its Corresponding Fund. The Manager


66

Seligman Portfolios, Inc.

Matters Relating to the Directors’ Consideration of the
Continuance of the Management Agreement
 
explained that the lower fee rates applicable to certain Portfolios were largely the result of fee rate increases at their Corresponding Funds that had not been sought for the Portfolios. This was because, in view of the small size of most of the Portfolios and the fact that, at various times, all of such Corresponding Funds had been subsidized by the Manager, the Manager had determined not to recommend fee rate increases for the Portfolios to match those recommended for their Corresponding Funds.

The Manager also manages accounts for institutional clients with investment objectives similar to those of certain Portfolios. The fee rates payable by the Manager’s institutional clients, except for the fee rates payable by certain institutional clients with objectives similar to the Seligman Capital Portfolio, are lower, and in some cases much lower, than the rates paid by the Portfolios. The Manager reviewed with the directors the significant differences in the scope of services the Manager provides to institutional clients and to the Portfolios. For example, the Management Agreements require the Manager to provide, among other things, office facilities, officers (including Seligman Portfolios, Inc.’s Chief Compliance Officer and officers to provide required certifications) and administrative services, such as shareholder communications, corporate housekeeping, tax compliance and securities law filings, with the attendant costs and exposure to liability. The Manager also coordinates the provision of services to the Portfolios by nonaffiliated service providers. Many of these services normally are not provided to non-investment company clients, and fees charged to the Portfolios reflect the costs and risks of the additional obligations. The Manager also noted that since the Portfolios are constantly issuing and redeeming their shares, they are more difficult to manage than an institutional account, where the assets are relatively stable. The directors acknowledged and understood these considerations and according gave appropriate weight to these fee comparisons.

The directors also reviewed data provided by the Subadviser comparing the subadvisory fee rates in the Subadvisory Agreement with the rates they earned from subadvisory relationships with other registered investment companies with similar investment objectives. They noted that the sub-advisory fee rates generally fell within the range paid by the other clients.

The directors also considered the total expense ratio of each Portfolio in comparison to the fees and expenses of funds within the Portfolio’s peer group. The directors recognized that the expense ratio information for the Portfolios potentially reflected on the Manager’s provision of services, as the Manager is responsible for coordinating services provided to the Portfolios by others. The Manager explained that the expense ratios of some peer group funds were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases were voluntary and perhaps temporary. The directors noted that the total expense ratio of each of the Seligman Capital Portfolio, the Seligman Common Stock Portfolio, the Seligman Communications and Information Portfolio and the Seligman Investment Grade Fixed Income Portfolio was lower (and, in the case of the Seligman Common Stock Portfolio, significantly lower) than the median and average expense ratio of the funds in the corresponding peer group. The directors also noted that the Seligman Cash Management Portfolio had an expense ratio that was somewhat higher than its peer group, while the Seligman Large-Cap Value Portfolio, the Seligman Smaller-Cap Value Portfolio, the Seligman Global Technology Portfolio and the Seligman International Growth Portfolio had expense ratios that were materially higher than their peer groups.

The Manager explained that the relatively high expense ratios of certain Portfolios is attributable in large part to their small sizes, and would be expected to decline if assets increase. The Manager explained that the Seligman Global Technology Portfolio and Seligman International Growth Portfolio incur high custody fees because of their relatively small sizes. The Manager explained that custodians charge a fixed fee per securities transaction processed, irrespective of the size of the transaction. For small funds, and for funds with high portfolio turnover rates, the per-transaction fee represents a larger percentage of net assets than for larger or less active funds. In addition, in the cases of the Seligman Global Technology Portfolio and Seligman International Growth Portfolio, custodial fees of foreign subcustodians were significantly higher than those of U.S. custodians, thus potentially exacerbating the problem. In the case of the Seligman Smaller-Cap Value Portfolio, the Manager explained that the high expense ratio was largely attributable to the Portfolio’s higher-than-average management fee rate. The directors noted that the Manager had voluntarily agreed to reimburse the expenses of certain Portfolios. The directors were satisfied that each Portfolio’s expense ratio was acceptable in that Portfolio’s particular circumstances.

Economies of Scale

The directors noted that the management fee schedules for some of the Portfolios contain breakpoints that reduce the fee rate on assets above specified levels. However, they also recognized that there is no direct relationship between the economies of scale realized by funds and those realized by the Manager as assets increase, largely because economies of scale are realized (if at all) by the Manager across a variety of products and services, and not only in respect of a single fund. The directors do not believe there is a uniform methodology for establishing breakpoints that give effect to Portfolio-specific services provided by the Manager and to the economies of scale that the Manager may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Portfolios, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. Depending on the age and size of a particular fund and its manager’s cost structure, different conclusions can be drawn as to whether there are economies of scale to be realized at any particular level of assets, notwithstanding the intuitive conclusion that such economies exist, or will be realized at some level of total assets. Moreover, because different managers have different cost structures and service models, it is difficult to draw meaningful conclusions from the comparison of a Portfolio’s management fee breakpoints with those that may have been adopted by comparable funds. The directors also noted that the advisory agreements for many competitor funds do not have breakpoints at all and that, in any event, the Portfolios generally did not benefit from significant net sales in recent times. The directors concluded for each Portfolio that the breakpoint arrangements, or absence of breakpoints in the Portfolio’s fee rate schedule, as applicable, was acceptable under the Portfolio’s circumstances.

 
 
67
 
Seligman Portfolios, Inc.
Directors and Officers
Information pertaining to the Directors and Officers of Seligman Portfolios is set forth below.

Independent Directors

Name, (Age), Position(s)
held with Fundø
Principal Occupation(s) During Past Five Years, Directorships and Other Information
   
John R. Galvin (76)1,3
• Director: 1995 to Date
• Oversees 58 Portfolios
in Fund Complex
Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts University; Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Chairman Emeritus, American Council on Germany. Formerly, Governor of the Center for Creative Leadership; Director, Raytheon Co. (defense and commercial electronics) and USLIFE Corporation (life insurance); and Trustee, Institute for Defense Analyses. From June 1987 to June 1992, Mr. Galvin was the Supreme Allied Commander, NATO, and the Commander-in-Chief, United States European Command.
   
Alice S. Ilchman (70)2,3
• Director: 1991 to Date
• Oversees 58 Portfolios
in Fund Complex
President Emerita, Sarah Lawrence College; Director or Trustee of each of the investment companies of the Seligman Group of Funds†; Director, Jeannette K. Watson Summer Fellowship (summer internships for college students); Trustee, Committee for Economic Development; Governor, Court of Governors, London School of Economics; and Director, Public Broadcasting Service (PBS). Formerly, Trustee, Save the Children (nonprofit child assistance organization). From January 1998 until December 2000, Chairman, The Rockefeller Foundation (charitable foundation). From September 1987 until September 1997, Director, New York Telephone Company.
   
Frank A. McPherson (72)2,3
• Director: 1995 to Date
• Oversees 58 Portfolios
in Fund Complex
Retired Chairman of the Board and Chief Executive Officer of Kerr-McGee Corporation (diversified energy and chemical company); Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Director, DCP Midstream GP, LLP (natural gas processing), Integris Health (owner of various hospitals), Oklahoma Chapter of the Nature Conservancy, Oklahoma Medical Research Foundation, Boys and Girls Clubs of Oklahoma, Oklahoma City Public Schools Foundation, and Oklahoma Foundation for Excellence in Education. Formerly, Director, ConocoPhillips (integrated international oil corporation), Kimberly-Clark Corporation (consumer products), BOK Financial (bank holding company), and the Federal Reserve System’s Kansas City Reserve Bank.
   
Betsy S. Michel (63)1,3
• Director: 1988 to Date
• Oversees 58 Portfolios
in Fund Complex
Attorney; Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Trustee, The Geraldine R. Dodge Foundation (charitable foundation). Formerly, Chairman of the Board of Trustees of St. George’s School (Newport, RI); and Trustee, World Learning, Inc. (international educational training), and Council of New Jersey Grantmakers.
   
Leroy C. Richie (64)1,3
• Director: 2000 to Date
• Oversees 57 Portfolios
in Fund Complex
Counsel, Lewis & Munday, P.C. (law firm); Chairman and Chief Executive Officer, Q Standards Worldwide, Inc. (library of technical standards); Director or Trustee of each of the investment companies of the Seligman Group of Funds† (with the exception of Seligman Cash Management Fund, Inc.); Director, Kerr-McGee Corporation (diversified energy and chemical company), Infinity, Inc. (oil and gas services and exploration), and Vibration Control Technologies, LLC (auto vibration technology); Lead Outside Director, Digital Ally Inc. (digital imaging); Director and Chairman, Highland Park Michigan Economic Development Corp.; and Chairman, Detroit Public Schools Foundation, and Detroit Economic Growth Corp. Formerly, Trustee, New York University Law Center Foundation; and Vice Chairman, Detroit Medical Center. From 1990 until 1997, Vice President and General Counsel, Automotive Legal Affairs, Chrysler Corporation.
   
Robert L. Shafer (73)2,3
• Director: 1988 to Date
• Oversees 58 Portfolios
in Fund Complex
Ambassador and Permanent Observer of the Sovereign Military Order of Malta to the United Nations; and Director or Trustee of each of the investment companies of the Seligman Group of Funds†. Formerly, Director, USLIFE Corporation (life insurance); and Vice President, Pfizer Inc. (pharmaceuticals).
   
James N. Whitson (70)1,3
• Director: 1993 to Date
• Oversees 58 Portfolios
in Fund Complex
Director or Trustee of each of the investment companies of the Seligman Group of Funds†; and Director, CommScope, Inc. (manufacturer of coaxial cable). Retired Executive Vice President and Chief Operating Officer, Sammons Enterprises, Inc. (a diversified holding company). Formerly, Director and Consultant, Sammons Enterprises, Inc.; and Director, C-SPAN (cable television network).
_____________
See footnotes on page 70.

68


Seligman Portfolios, Inc.
Directors and Officers

Interested Directors and Principal Officers

Name, (Age), Position(s)
held with Fundø
Principal Occupation(s) During Past Five Years, Directorships and Other Information
   
William C. Morris (67)*
• Director and Chairman of
the Board:
1988 to Date
• Oversees 58 Portfolios
in Fund Complex
Chairman, J. & W. Seligman & Co. Incorporated; Chairman of the Board and Director or Trustee of each of the investment companies of the Seligman Group of Funds†; Chairman, Seligman Advisors, Inc., Seligman Services, Inc. and Carbo Ceramics Inc. (manufacturer of ceramic proppants for oil and gas industry); Director, Seligman Data Corp.; and President and Chief Executive Officer of The Metropolitan Opera Association. Formerly, Director, Kerr-McGee Corporation (diversified energy and chemical company) and Chief Executive Officer of each of the investment companies of the Seligman Group of Funds.
   
Brian T. Zino (53)*
• Director: 1993 to Date
• President: 1995 to Date
• Chief Executive Officer:
2002 to Date
• Oversees 57 Portfolios
in Fund Complex
Director and President, J. & W. Seligman & Co. Incorporated; President and Chief Executive Officer of each of the investment companies of the Seligman Group of Funds†; Director or Trustee of each of the investment companies of the Seligman Group of Funds (with the exception of Seligman Cash Management Fund, Inc.); Director, Seligman Advisors, Inc. and Seligman Services, Inc.; Chairman, Seligman Data Corp.; Member of the Board of Governors of the Investment Company Institute; and Director (formerly Chairman), ICI Mutual Insurance Company.
   
John B. Cunningham (41)
• Vice President and
Co-Portfolio Manager:
2004 to Date
Co-Portfolio Manager of Common Stock Portfolio; Managing Director and Chief Investment Officer, J. & W. Seligman & Co. Incorporated; Vice President and Co-Portfolio Manager of Tri-Continental Corporation, Seligman Common Stock Fund, Inc., and Seligman Income and Growth Fund, Inc. Formerly, Co-Portfolio Manager of Seligman Portfolios’ Income and Growth Portfolio; and Managing Director, Senior Portfolio Manager, Salomon Brothers Asset Management (“SBAM”) and Group Head of SBAM’s Equity Team. Prior to 2001, Director and Portfolio Manager, SBAM.
   
Neil T. Eigen (62)
• Vice President and
Co-Portfolio Manager:
1998 to Date
Co-Portfolio Manager of Large-Cap Value Portfolio and Smaller-Cap Value Portfolio; Managing Director, J. & W. Seligman & Co. Incorporated; Director, Seligman Advisers, Inc. and Seligman Services, Inc.; Vice President and Co-Portfolio Manager of Seligman Value Fund Series, Inc. Formerly, Senior Managing Director, Chief Investment Officer and Director of Equity Investing, Bear Stearns Asset Management.
   
Christopher J. Mahony (42)
• Vice President and
Portfolio Manager:
2002 to Date
Portfolio Manager of Cash Management Portfolio and Investment Grade Fixed Income Portfolio; Senior Vice President, Investment Officer of J. & W. Seligman & Co. Incorporated; Vice President and Portfolio Manager of Seligman Cash Management Fund, Inc. and Seligman Investment Grade Fixed Income Fund, Inc. and Co-Portfolio Manager of Seligman Income and Growth Fund, Inc.; Vice President of Seligman High Income Fund Series and Portfolio Manager of its U.S. Government Securities Fund. Formerly, Senior Portfolio Manager at Fort Washington Investment Advisors, Inc.
   
Michael F. McGarry (42)
• Vice President and
Co-Portfolio Manager:
From Jan. 2005
Co-Portfolio Manager of Common Stock Portfolio; Managing Director, J. & W. Seligman & Co. Incorporated; Vice President and Co-Portfolio Manager, Tri-Continental Corporation and Seligman Common Stock Fund, Inc. Formerly, Senior Vice President, J. & W. Seligman & Co. Incorporated.
   
Richard M. Parower (39)
• Vice President and
Portfolio Manager:
2002 to Date
Portfolio Manager of Global Technology Portfolio; Managing Director, J. & W. Seligman & Co. Incorporated; Vice President of Seligman Global Fund Series, Inc. and Portfolio Manager of its Global Technology Fund and Vice President and Co-Portfolio Manager of Seligman New Technologies Fund, Inc. and Seligman New Technologies Fund II, Inc. Formerly, Senior Vice President, J. & W. Seligman & Co. Incorporated; Senior Analyst with Citibank Global Asset Management covering Global IT Services from June 1998 to April 2000.
   
Richard S. Rosen (47)
• Vice President and
Co-Portfolio Manager:
1998 to Date
Co-Portfolio Manager of Large-Cap Value Portfolio and Smaller-Cap Value Portfolio; Managing Director, J. & W. Seligman & Co. Incorporated; Vice President and Co-Portfolio Manager of Seligman Value Series, Inc. Formerly, Managing Director and Senior Portfolio Manager, Bear Stearns Asset Management.
_____________
See footnotes on page 70.

69


Seligman Portfolios, Inc.
Directors and Officers
 
Interested Directors and Principal Officers (continued)

Name, (Age), Position(s)
held with Fundø
Principal Occupation(s) During Past Five Years, Directorships and Other Information
   
Marion S. Schultheis (59)
• Vice President and
Portfolio Manager:
1998 to Date
Portfolio Manager of Capital Portfolio; Managing Director, J. & W. Seligman & Co. Incorporated; Vice President and Portfolio Manager of Seligman Capital Fund, Inc., and Seligman Growth Fund, Inc. Formerly, Vice President of Seligman Global Fund Series, Inc. and Co-Portfolio Manager of its Global Growth Fund.
   
Paul H. Wick (42)
• Vice President and
Portfolio Manager:
1994 to Date
Portfolio Manager of Communications and Information Portfolio; Director and Managing Director, J. & W. Seligman & Co. Incorporated since November 1997 and January 1995, respectively; Vice President and Portfolio Manager, Seligman Communications and Information Fund, Inc. He joined J. & W. Seligman & Co. Incorporated in 1987 as an Associate, Investment Research.
   
Eleanor T. M. Hoagland (54)
• Vice President and Chief
Compliance Officer:
2004 to Date
Managing Director, J. & W. Seligman & Co. Incorporated; and Vice President and Chief Compliance Officer of each of the investment companies of the Seligman Group of Funds†. Formerly, Managing Director, Partner and Chief Portfolio Strategist, AMT Capital Management
   
Thomas G. Rose (48)
• Vice President:
2000 to Date
Managing Director, Chief Financial Officer and Treasurer, J. & W. Seligman & Co. Incorporated; Senior Vice President, Finance, Seligman Advisors, Inc. and Seligman Data Corp.; and Vice President of each of the investment companies of the Seligman Group of Funds†, Seligman Services, Inc. and Seligman International, Inc.
   
Lawrence P. Vogel (49)
• Vice President:
1992 to Date
• Treasurer:
2000 to Date
Senior Vice President and Treasurer, Investment Companies, J. & W. Seligman & Co. Incorporated; Vice President and Treasurer of each of the investment companies of the Seligman Group of Funds†; and Treasurer of Seligman Data Corp.
   
Frank J. Nasta (41)
• Secretary:
1994 to Date
Director, Managing Director, General Counsel and Corporate Secretary, J. & W. Seligman & Co. Incorporated; Secretary of each of the investment companies of the Seligman Group of Funds†; and Corporate Secretary, Seligman Advisors, Inc., Seligman Services, Inc., Seligman International, Inc., and Seligman Data Corp.

The Fund’s Statement of Additional Information (SAI) includes additional information about Fund directors and is available, without charge, upon request. You may call toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US to request a copy of the SAI, to request other information about the Fund, or to make shareholder inquiries.
__________
ø
The address for each of the directors and officers is 100 Park Avenue, 8th floor, New York, NY 10017. Each Director serves for an indefinite term, until the election and qualification of a successor or until his or her earlier death, resignation or removal. Each officer is elected annually by the Board of Directors.
   
†
The Seligman Group of Funds consists of 24 registered investment companies.
   
*
Mr. Morris and Mr. Zino are considered “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended, by virtue of their positions with J. & W. Seligman & Co. Incorporated and its affiliates.
Member:
1 Audit Committee
 
2 Director Nominating Committee
 
3 Board Operations Committee


This report is intended only for the information of shareholders or those who have received the offering prospectus covering shares of Capital Stock of Seligman Portfolios, Inc., which contains information about the management fees and other costs. Please read the prospectus carefully before investing or sending money.
 
SP2 12/05
 
 
70
 

ITEM 2.
CODE OF ETHICS.
 
As of December 31, 2005, the registrant has adopted a code of ethics that applies to its principal executive and principal financial officers.

ITEM 3.
AUDIT COMMITTEE FINANCIAL EXPERT.
 
The registrant’s board of directors has determined that Mr. James N. Whitson, a member of its audit committee, is an audit committee financial expert. Mr. Whitson is “independent” as such term is defined in Form N-CSR.

ITEM 4.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
 
(a) - (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows:

 
2005
  
2004
Audit Fees
$160,000
  
$198,000
Audit-Related Fees
40,000
  
62,000
Tax Fees
49,350
  
31,800
All Other Fees
-
  
-- -

Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees include amounts for (i) limited review of the registrant’s semi-annual financial statements; and (ii) review of quarterly compliance procedures regarding diversification requirements of the registrant. Tax fees include amounts related to tax compliance, tax planning, and tax advice.

(e) (1) The Audit Committee is required to preapprove audit and non-audit services performed for the registrant by the principal accountant in order to assure that the provision of such services does not impair the principal accountant’s independence. The Audit Committee also is required to preapprove certain non-audit services performed by the registrant’s principal accountant for the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and certain of the adviser’s affiliates that provide services directly related to the operations and financial reporting of the registrant. Unless a type of service to be provided by the principal accountant has received preapproval, it will require specific preapproval by the Audit Committee.

The Audit Committee may delegate preapproval authority to one or more of its members. The member or members to whom such authority is delegated shall report any preapproval decisions to the Audit Committee at its next scheduled meeting.

Notwithstanding the foregoing, under certain circumstances, preapproval of non-audit services of a de minimis amount is not required.

(2) No services included in (b) - (d) above were approved pursuant to the waiver provisions of paragraphs (c)(7)(i)(C) or (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $89,350 and $93,800, respectively.

(h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, the audit committee considered whether these services were compatible with maintaining the principal accountant’s independence.

ITEM 5.
AUDIT COMMITTEE OF LISTED REGISTRANTS.
 
Not applicable.

ITEM 6.
SCHEDULE OF INVESTMENTS.
 
Included in Item 1 above.

ITEM 7.
DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
 
Not applicable.

ITEM 8.
PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
 
Not applicable.
 
 
1

 
ITEM 9.
PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
 
Not applicable.

ITEM 10.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
Not applicable.

ITEM 11.
CONTROLS AND PROCEDURES.
 
(a) The registrant's principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and that such material information is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure.

(b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12.
EXHIBITS.
 
(a)(1)  Code of Ethics for Principal Executive and Principal Financial Officers.

(a)(2) Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3)  Not applicable.

(b) Certifications of chief executive officer and chief financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.
 
 
2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SELIGMAN PORTFOLIOS, INC.




By: 
/S/ BRIAN T. ZINO
Brian T. Zino
President and Chief Executive Officer


Date: March 8, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.




By: 
/S/ BRIAN T. ZINO
Brian T. Zino
President and Chief Executive Officer

Date: March 8, 2006




By: 
/S/ LAWRENCE P.VOGEL
Lawrence P. Vogel
Vice President, Treasurer and Chief Financial Officer

Date: March 8, 2006



SELIGMAN PORTFOLIOS, INC.

 
3

 
EXHIBIT INDEX
 
(a)(1) Code of Ethics for Principal Executive and Principal Financial Officers.

(a)(2) Certifications of principal executive officer and principal financial officer as  required by Rule 30a-2(a) under the Investment Company Act of 1940.

(b) Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940.

4