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 811-6100
Seligman Quality Municipal Fund, 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: | 10/31 |
Date of reporting period: | 4/30/06 |
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
SELIGMAN QUALITY MUNICIPAL FUND, INC. | |
Semi-annual Report April 30, 2006 |
|
William C. Morris Chairman | Brian T. Zino President |
Manager J. & W. Seligman & Co. Incorporated 100 Park Avenue New York, NY 10017 General Counsel Sullivan & Cromwell LLP | Stockholder Service Agent Seligman Data Corp. 100 Park Avenue New York, NY 10017 | Important Telephone Numbers (800) 874-1092 Stockholder Services (212) 682-7600 Outside the United States (800) 622-4597 24-Hour Automated Telephone Access Service |
Average Annual | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Three Months | Six Months | One Year | Five Years | Ten Years | ||||||||||||||||||||
Market Price | 0.10 | % | 5.06 | % | 10.45 | % | 6.97 | % | 6.60 | % | ||||||||||||||
Net Asset Value | (0.76 | ) | 1.16 | 1.40 | 5.78 | 6.19 | ||||||||||||||||||
Lehman Index** | (0.06 | ) | 1.56 | 2.16 | 5.40 | 5.89 |
Market Price | Net Asset Value | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
April 30, 2006 | $ | 12.78 | $ | 13.74 | ||||||
January 31, 2006 | 12.90 | 13.99 | ||||||||
October 31, 2005 | 12.43 | 13.88 |
Revenue Bonds | 65 | % | |
General Obligation Bond | 35 | ||
Weighted Average Maturity3 | 14.2 | years |
and Yield Information
Dividend Paid† | Unrealized Gain†† | SEC 30-Day Yield‡ | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
$0.2775 | $0.465 | 3.03% |
AAA | 88 | % | ||||
AA | 7 | |||||
BBB | 5 |
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. |
2 | Credit ratings are primarily those issued by Moody’s Investors Service, Inc. (“Moody’s”). Where Moody’s ratings have not been assigned, ratings from Standard & Poor’s Corporation (“S&P”) were used. A generic rating designation has been utilized, and therefore, it cannot be inferred solely from the rating category whether ratings reflect those assigned by Moody’s or S&P. Pre-refunded and escrowed-to-maturity securities that have been rerated as AAA or its equivalent by either Moody’s or S&P have been included in the AAA category. Holdings and credit ratings are subject to change. |
3 | Excludes variable rate demand notes. |
* | Returns for periods of less than one year are not annualized. |
** | The Lehman Brothers Municipal Bond Index is an unmanaged index of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market. The index does not include any taxes, fees or sales charges, and is composed of approximately 60% revenue bonds and 40% state government obligations. Investors cannot invest directly in an unmanaged index. |
† | For the six months ended April 30, 2006, Preferred Stockholders were paid dividends at annual rates ranging from 2.65% to 3.70%. Earnings on the Fund’s assets in excess of the preferred dividend requirements constituted income available for dividends to Common Stockholders. |
†† | Represents the per share amount of net unrealized appreciation of portfolio securities as of April 30, 2006. Information does not reflect the effect of capital loss carryforwards that are available to offset future net realized capital gains. |
Æ | Includes pre-refunded and escrowed-to-maturity securities. |
‡ | Current yield, representing the annualized yield (after dividends on Preferred Stock) for the 30-day period ended April 30, 2006, has been computed in accordance with Securities and Exchange Commission regulations and will vary. During the period, the Manager waived a portion of its fee. Absent such waiver, the yield would have been 2.86%. |
# | Percentages based on current market values of long-term holdings at April 30, 2006. |
1 | The website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report. |
Portfolio of Investments (unaudited) | April 30, 2006 |
State# | | Face Amount | | Municipal Bonds | | Rating† | | Value | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Alabama — 8.0% | $ | 5,000,000 | Jefferson County Sewer Rev. (Capital Improvement Warrants), 5.125% due 2/1/2039Æ | Aaa | $ | 5,221,150 | ||||||||||||
Alaska — 3.6% | 2,000,000 | Alaska Energy Authority Power Rev. (Bradley Lake Hydroelectric Project), 6% due 7/1/2021 | Aaa | 2,319,980 | ||||||||||||||
Arizona — 6.5% | 4,000,000 | Arizona Agricultural Improvement and Power District Rev. (Salt River Project), 5% due 12/1/2014 | Aaa | 4,212,119 | ||||||||||||||
California — 16.6% | 4,000,000 | Foothill/Eastern Transportation Corridor Agency Toll Road Rev., 5.75% due 1/15/2040 | Baa3 | 4,101,240 | ||||||||||||||
1,500,000 | Los Angeles Regional Airports Improvement Corporation Facilities Rev. (LAXFUEL Corporation), 5.50% due 1/1/2032* | Aaa | 1,544,010 | |||||||||||||||
5,000,000 | San Diego Public Facilities Financing Authority Sewer Rev., 5% due 5/15/2029 | Aaa | 5,098,049 | |||||||||||||||
Colorado — 4.0% | 2,500,000 | Colorado Regional Transportation District Sales Tax Rev., 5% due 11/1/2024 | Aaa | 2,585,325 | ||||||||||||||
Florida — 14.1% | 3,000,000 | Orange County Health Facilities Authority Rev. (The Nemours Foundation Project), 5% due 1/1/2029 | AAA‡ | 3,089,190 | ||||||||||||||
2,500,000 | Orange County Sales Tax Rev., 5.125% due 1/1/2023 | Aaa | 2,621,700 | |||||||||||||||
3,345,000 | Orange County Solid Waste Facility Rev., 5% due 10/1/2016 | Aaa | 3,467,628 | |||||||||||||||
Illinois — 7.2% | 4,500,000 | Chicago GOs, 5% due 1/1/2023 | Aaa | 4,677,615 | ||||||||||||||
Louisiana — 0.9% | 520,000 | Louisiana Public Facilities Authority Hospital Rev. (Southern Baptist Hospitals, Inc. Project), 8% due 5/15/2012†† | AAA‡ | 580,465 | ||||||||||||||
Massachusetts — 14.3% | 750,000 | Massachusetts State Port Authority Rev., 5% due 7/1/2025 | Aaa | 776,745 | ||||||||||||||
3,000,000 | Massachusetts State School Building Authority Dedicated Sales Tax Rev., 5% due 8/15/2023 | Aaa | 3,126,630 | |||||||||||||||
3,000,000 | Massachusetts State Special Obligation Dedicated Tax Rev., 5.25% due 1/1/2025Æ | Aaa | 3,216,870 | |||||||||||||||
2,000,000 | Massachusetts State Water Resources Authority Rev., 5.25% due 8/1/2024 | Aaa | 2,158,760 | |||||||||||||||
Michigan — 4.0% | 1,325,000 | Harper Creek Community School District GOs, 5.125% due 5/1/2031 | Aa2 | 1,359,079 | ||||||||||||||
1,175,000 | Harper Creek Community School District GOs, 5.125% due 5/1/2031Æ | Aa2 | 1,246,499 | |||||||||||||||
Minnesota — 0.8% | 500,000 | Minneapolis & Saint Paul Metropolitan Airports Commission Rev., 5.75% due 1/1/2032Æ | Aaa | 538,365 | ||||||||||||||
Missouri — 0.5% | 295,000 | Missouri State Housing Development Commission Rev. (Single Family Mortgage), 6.375% due 9/1/2031* | AAA‡ | 298,800 | ||||||||||||||
New York — 14.9% | 3,000,000 | New York City GOs, 5% due 8/1/2017 | Aaa | 3,159,750 | ||||||||||||||
5,000,000 | New York City Municipal Water Finance Authority (Water & Sewer System Rev.), 5.75% due 6/15/2026Æ | Aaa | 5,162,550 | |||||||||||||||
1,295,000 | New York State Environmental Facilities Corporation (Clean Water and Drinking Water Rev.), 5% due 7/15/2020 | Aaa | 1,347,150 | |||||||||||||||
________________ See footnotes on page 5. |
Portfolio of Investments (unaudited) (continued) | April 30, 2006 |
State# | | Face Amount | | Municipal Bonds | | Rating† | | Value | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Pennsylvania — 6.5% | $ | 3,000,000 | Pennsylvania State University Rev., 5% due 9/1/2024 | Aa2 | $ | 3,124,830 | ||||||||||||
1,000,000 | Pennsylvania Turnpike Commission Rev. (Oil Franchise Tax), 5.25% due 12/1/2023 | Aaa | 1,063,670 | |||||||||||||||
Puerto Rico — 5.1% | 3,000,000 | Puerto Rico Electric Power Authority Rev., 5.25% due 7/1/2021 | Aaa | 3,283,440 | ||||||||||||||
Texas — 13.1% | 3,000,000 | Dallas Area Rapid Transit Sales Tax Rev., 5% due 12/1/2031 | Aaa | 3,052,530 | ||||||||||||||
2,000,000 | Matagorda County Navigation District No. 1 Pollution Control Rev. (Central Power and Light Co. Project), 6.125% due 5/1/2030* | Aaa | 2,043,480 | |||||||||||||||
3,000,000 | San Antonio Electric & Gas System Rev., 5.65% due 2/1/2019†† | AAA‡ | 3,408,210 | |||||||||||||||
Washington — 6.4% | 2,000,000 | Chelan County Public Utility District No. 1 (Chelan Hydro Consolidated System Rev.), 5.25% due 7/1/2033* | Aaa | 2,023,740 | ||||||||||||||
2,000,000 | Chelan County Public Utility District No. 1 (Chelan Hydro Consolidated System Rev.), 5.60% due 1/1/2036* | Aaa | 2,120,780 | |||||||||||||||
Wisconsin — 0.5% | 325,000 | Wisconsin Housing & Economic Development Authority Housing Rev., 6.85% due 11/1/2012 | Aaa | 325,472 | ||||||||||||||
Total Municipal Bonds (Cost $80,458,171) — 127.0% | 82,355,821 | |||||||||||||||||
Short-Term Holdings | ||||||||||||||||||
California — 7.8% | 5,000,000 | San Francisco City and County Airports Commission Rev. (International Airport), 5.80% due 5/1/2021*Æ | Aaa | 5,051,100 | ||||||||||||||
Colorado — 1.9% | 1,200,000 | Moffat County Pollution Control Rev. (Pacificorp Project), VRDN, due 5/1/2013 | VMIG 1 | 1,200,000 | ||||||||||||||
Massachusetts — 2.6% | 1,700,000 | Massachusetts Health & Educational Facilities Authority Rev. (Capital Assets Program), VRDN, due 1/1/2035 | VMIG 1 | 1,700,000 | ||||||||||||||
New York — 10.1% | 3,000,000 | Metropolitan Transportation Authority Rev. (Commuter Facilities), 6.10% due 7/1/2026Æ | Aaa | 3,072,090 | ||||||||||||||
2,105,000 | New York City GOs, 6.25% due 4/15/2027Æ | Aaa | 2,176,423 | |||||||||||||||
800,000 | New York City GOs, VRDN, due 8/1/2009 | VMIG 1 | 800,000 | |||||||||||||||
500,000 | New York City Municipal Water Finance Authority (Water & Sewer System Rev.), VRDN, due 6/15/2023 | VMIG 1 | 500,000 | |||||||||||||||
Total Short-Term Holdings (Cost $14,201,025) — 22.4% | 14,499,613 | |||||||||||||||||
Total Investments (Cost $94,659,196) — 149.4% | 96,855,434 | |||||||||||||||||
Other Assets Less Liabilities — 2.4% | 1,590,794 | |||||||||||||||||
Preferred Stock — (51.8)% | (33,600,000 | ) | ||||||||||||||||
Net Assets for Common Stock — 100.0% | $ | 64,846,228 |
# | The percentage shown for each state represents the total market value of bonds held of issuers in that state, measured as a percent of net assets for Common Stock, which does not include the net assets attributable to Preferred Stock of the Fund. |
* | Interest income earned from this security is subject to the federal alternative minimum tax. |
Æ | Pre-refunded security. Such securities that will be paid within one year are classified as short-term holdings. |
† | Credit ratings are primarily those issued by Moody’s Investors Service, Inc. (“Moody’s”). Where Moody’s ratings have not been assigned, ratings from Standard & Poor’s Corporation (“S&P”) were used (indicated by the symbol ‡). Pre-refunded and escrowed-to-maturity securities that have been rerated as AAA by S&P but have not been rerated by Moody’s have been reported as AAA. |
†† | Escrowed-to-maturity security. |
Statement of Assets and Liabilities (unaudited) | April 30, 2006 |
Assets: | ||||||
Investments, at value: | ||||||
Long-term holdings (cost $80,458,171) | $ | 82,355,821 | ||||
Short-term holdings (cost $14,201,025) | 14,499,613 | |||||
Total investments (cost $94,659,196) | 96,855,434 | |||||
Cash | 55,861 | |||||
Interest receivable | 1,599,689 | |||||
Receivable for securities sold | 65,000 | |||||
Expenses prepaid to stockholder service agent | 17,675 | |||||
Other | 39,898 | |||||
Total Assets | 98,633,557 | |||||
Liabilities: | ||||||
Management fee payable | 44,177 | |||||
Accrued expenses and other | 143,152 | |||||
Total Liabilities | 187,329 | |||||
Preferred Stock: | ||||||
Preferred Stock Series TH, $0.01 par value, liquidation preference and asset coverage per share — $50,000 and $146,497, respectively; shares authorized — 1,000; issued and outstanding — 672 | 33,600,000 | |||||
Net Assets for Common Stock | $ | 64,846,228 | ||||
Composition of Net Assets: | ||||||
Common Stock, $0.01 par value; shares authorized — 49,999,000; issued and outstanding — 4,720,442 | $ | 47,204 | ||||
Additional paid-in capital | 62,563,398 | |||||
Undistributed net investment income | 183,997 | |||||
Accumulated net realized loss | (144,609 | ) | ||||
Net unrealized appreciation of investments | 2,196,238 | |||||
Net Assets for Common Stock | $ | 64,846,228 | ||||
Net Asset Value Per Share of Common Stock (Market value $12.78) | $ | 13.74 |
See Notes to Financial Statements.
Statement of Operations (unaudited) | For the Six Months Ended April 30, 2006 |
Investment Income: | ||||||||||
Interest | $ | 2,375,499 | ||||||||
Expenses: | ||||||||||
Management fee | $ | 320,241 | ||||||||
Legal fees | 93,998 | |||||||||
Preferred stock auction, remarketing and rating agent fees | 56,376 | |||||||||
Stockholder account and registrar services | 38,953 | |||||||||
Stockholder reports and communications | 27,562 | |||||||||
Auditing fees | 19,198 | |||||||||
Custody and related services | 13,204 | |||||||||
Stockholders’ meeting | 12,079 | |||||||||
Exchange listing fees | 11,875 | |||||||||
Directors’ fees and expenses | 7,892 | |||||||||
Miscellaneous | 6,422 | |||||||||
Total Expenses Before Fee Waiver | 607,800 | |||||||||
Fee waiver (Note 4) | (33,106 | ) | ||||||||
Total Expenses After Fee Waiver | 574,694 | |||||||||
Net Investment Income | 1,800,805 | * | ||||||||
Net Realized and Unrealized Loss on Investments: | ||||||||||
Net realized loss on investments | (17 | ) | ||||||||
Net change in unrealized appreciation of investments | (654,446 | ) | ||||||||
Net Loss on Investments | (654,463 | ) | ||||||||
Dividends Paid to Preferred Stockholders | (518,025 | ) | ||||||||
Increase in Net Assets from Operations | $ | 628,317 |
* Net investment income available for Common Stock is $1,282,780, which is net of Preferred Stock dividends of $518,025.
Statements of Changes in Net Assets (unaudited) |
Six Months Ended 4/30/06 | Year Ended 10/31/05 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Operations: | ||||||||||
Net investment income | $ | 1,800,805 | $ | 3,575,415 | ||||||
Net realized gain (loss) on investments | (17 | ) | 8,535 | |||||||
Net change in unrealized appreciation of investments | (654,446 | ) | (1,984,075 | ) | ||||||
Dividends paid to Preferred Stockholders (per share: $770.87 and $1,146.80) | (518,025 | ) | (770,649 | ) | ||||||
Increase in Net Assets from Operations | 628,317 | 829,226 | ||||||||
Distributions to Common Stockholders: | ||||||||||
Dividends from net investment income (per share: $0.278 and $0.587) | (1,309,473 | ) | (2,767,258 | ) | ||||||
Decrease in Net Assets from Distributions to Common Stockholders | (1,309,473 | ) | (2,767,258 | ) | ||||||
Capital Share Transactions: | ||||||||||
Value of shares of Common Stock issued in payment of dividends (9,157 and 22,581 shares) | 117,157 | 276,912 | ||||||||
Cost of shares purchased for investment plan (6,700 and 22,900 shares) | (86,326 | ) | (282,650 | ) | ||||||
Increase (Decrease) in Net Assets from Capital Share Transactions | 30,831 | (5,738 | ) | |||||||
Decrease in Net Assets | (650,325 | ) | (1,943,770 | ) | ||||||
Net Assets for Common Stock: | ||||||||||
Beginning of period | 65,496,553 | 67,440,323 | ||||||||
End of Period (including undistributed net investment income of $183,997 and $210,690, respectively) | $ | 64,846,228 | $ | 65,496,553 |
See Notes to Financial Statements.
Notes to Financial Statements (unaudited) |
a. | Security Valuation — Traded securities are valued at the last sales price on the primary market on which they are traded. Securities for which there is no last sales price are valued by independent pricing services based on bid prices which consider such factors as transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities, or are valued by J. & W. Seligman & Co. Incorporated (the “Manager”) based on quotations provided by primary market makers in such securities. Securities for which market quotations are not readily available (or are otherwise no longer valid or reliable) are valued at fair value determined in accordance with procedures approved by the Fund’s Board of Directors. This can occur in the event of, among other things, natural disasters, acts of terrorism, market disruptions, 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 maturing in more than 60 days are valued at current market quotations. Short-term holdings maturing in 60 days or less are generally valued at amortized cost. |
b. | Federal Taxes — The Fund has elected to be taxed as a regulated investment company and intends to distribute substantially all net income and net gain realized. |
c. | Security Transactions and Related Investment Income — Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial reporting and federal income tax purposes. Interest income is recorded on the accrual basis. The Fund amortizes all discounts and premiums paid on purchases of portfolio securities for financial reporting purposes. |
Short-term holdings include securities with stated or effective maturity dates of less than one year. |
Variable rate demand notes purchased by the Fund may be put back to the designated remarketing agent for the issue at par on any day, for settlement within seven days, and, accordingly, are treated as short-term holdings. These notes bear interest at a rate that resets daily or weekly. At April 30, 2006, the interest rates paid on these notes ranged from 3.71% to 3.78%. |
d. | Distributions to Stockholders — Dividends and distributions paid by the Fund are recorded on the ex-dividend date. |
Notes to Financial Statements (unaudited) |
Notes to Financial Statements (unaudited) |
Gross unrealized appreciation of portfolio securities | $ | 9,287,604 | ||||
Gross unrealized depreciation of portfolio securities | (6,806,319 | ) | ||||
Net unrealized appreciation of portfolio securities | 2,481,285 | |||||
Capital loss carryforward | (144,592 | ) | ||||
Dividends in excess of net investment income | (101,067 | ) | ||||
Total accumulated earnings | $ | 2,235,626 |
Six Months Ended 4/30/06 | Year Ended 10/31/05 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Tax-exempt income | $ | 1,726,431 | $ | 3,471,736 | ||||||
Ordinary income | 101,067 | 66,171 | ||||||||
Total distributions | $ | 1,827,498 | $ | 3,537,907 |
Notes to Financial Statements (unaudited) |
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 Seligman mutual funds. All three had already been terminated prior to the end of September 2002. None of these arrangements involved Seligman Quality Municipal Fund.
Financial Highlights (unaudited) |
Year Ended October 31, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Six Months Ended 4/30/06 | 2005 | 2004 | 2003 | 2002† | 2001 | ||||||||||||||||||||||
Per Share Operating Performance: | |||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 13.88 | $ | 14.29 | $ | 14.29 | $ | 14.44 | $ | 14.40 | $ | 13.62 | |||||||||||||||
Income from Investment Operations: | |||||||||||||||||||||||||||
Net investment income | 0.38 | 0.76 | 0.76 | 0.77 | 0.95 | 0.99 | |||||||||||||||||||||
Net realized and unrealized investment gain (loss) on investments | (0.13 | ) | (0.42 | ) | 0.02 | (0.02 | ) | 0.03 | 0.79 | ||||||||||||||||||
Dividends paid from net investment income to Preferred Stockholders | (0.11 | ) | (0.16 | ) | (0.08 | ) | (0.08 | ) | (0.11 | ) | (0.24 | ) | |||||||||||||||
Total from Investment Operations | 0.14 | 0.18 | 0.70 | 0.67 | 0.87 | 1.54 | |||||||||||||||||||||
Less Distributions to Common Stockholders: | |||||||||||||||||||||||||||
Dividends paid from net investment income | (0.28 | ) | (0.59 | ) | (0.70 | ) | (0.79 | ) | (0.71 | ) | (0.69 | ) | |||||||||||||||
Distributions from net realized gain | — | — | — | (0.03 | ) | (0.12 | ) | (0.07 | ) | ||||||||||||||||||
Total Distributions to Common Stockholders | (0.28 | ) | (0.59 | ) | (0.70 | ) | (0.82 | ) | (0.83 | ) | (0.76 | ) | |||||||||||||||
Net Asset Value, End of Period | $ | 13.74 | $ | 13.88 | $ | 14.29 | $ | 14.29 | $ | 14.44 | $ | 14.40 | |||||||||||||||
Market Value, End of Period | $ | 12.78 | $ | 12.43 | $ | 12.51 | $ | 12.58 | $ | 12.57 | $ | 12.59 |
See footnotes on page 14.
Financial Highlights (unaudited) (continued) |
Year Ended October 31, | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Six Months Ended 4/30/06 | 2005 | 2004 | 2003 | 2002† | 2001 | ||||||||||||||||||||||
Total Investment Return: | |||||||||||||||||||||||||||
Based upon market value | 5.06 | % | 4.22 | % | 5.11 | % | 6.69 | % | 6.69 | % | 16.52 | % | |||||||||||||||
Based upon net asset value | 1.16 | % | 1.88 | % | 5.70 | % | 5.50 | % | 7.16 | % | 12.52 | % | |||||||||||||||
Ratios/Supplemental Data: | |||||||||||||||||||||||||||
Ratio of expenses to average net assetsÆ | 1.17 | %* | 1.07 | % | 1.09 | % | 1.10 | % | 1.08 | % | 1.05 | % | |||||||||||||||
Ratio of expenses to average net assets for Common Stock | 1.76 | %* | 1.61 | % | 1.64 | % | 1.65 | % | 1.62 | % | 1.58 | % | |||||||||||||||
Ratio of net investment income to average net assetsÆ | 3.66 | %* | 3.55 | % | 3.57 | % | 3.57 | % | 4.49 | % | 4.66 | % | |||||||||||||||
Ratio of net investment income to average net assets for Common Stock | 5.52 | %* | 5.34 | % | 5.36 | % | 5.33 | % | 6.76 | % | 7.03 | % | |||||||||||||||
Portfolio turnover rate | — | 17.43 | % | 17.25 | % | 15.92 | % | 6.01 | % | 11.72 | % | ||||||||||||||||
Net assets for Common Stock, end of period (000s omitted) | $ | 64,846 | $ | 65,497 | $ | 67,440 | $ | 67,465 | $ | 68,134 | $ | 67,981 | |||||||||||||||
Without fee waiver:†† | |||||||||||||||||||||||||||
Ratio of expenses to average net assetsÆ | 1.24 | %* | |||||||||||||||||||||||||
Ratio of expenses to average net assets for Common Stock | 1.83 | %* | |||||||||||||||||||||||||
Ratio of net investment income to average net assetsÆ | 3.59 | %* | |||||||||||||||||||||||||
Ratio of net investment income to average net assets for Common Stock | 5.45 | %* |
† | As required, effective November 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing market discounts on portfolio securities for financial reporting purposes. The effects of this accounting change for the year ended October 31, 2002, were to increase net investment income per share and decrease net realized and unrealized gain per share by $0.01; and to increase the ratios of net investment income to average net assets and to average net assets for Common Stock from 4.42% to 4.49%, and from 6.65% to 6.76%, respectively. The per share operating performance and ratios for periods prior to November 1, 2001, have not been restated. |
†† | The Manager waived a portion of its fee for the period presented. |
Æ | Average net assets includes the value of Preferred Stock. |
* | Annualized. |
Matters Relating to the Directors’ Consideration of the Continuance of the Management Agreement |
1. | information comparing the performance of the Fund to other investment companies with similar investment objectives; |
2. | the nature, extent and quality of investment and administrative services rendered by the Manager; |
3. | payments received by the Manager from all sources in respect of the Fund and all investment companies in the Seligman Group of Funds; |
4. | the costs borne by, and profitability of, the Manager and its affiliates in providing services to the Fund and to all investment companies in the Seligman Group of Funds; |
5. | comparative fee and expense data for the Fund and other investment companies with similar investment objectives; |
6. | the extent to which economies of scale would be realized as the Fund grows and whether the fee level reflects these economies of scale for the benefit of investors; |
7. | the Manager’s practices regarding allocation of portfolio transactions of the Fund; |
8. | portfolio turnover rates of the Fund compared to other investment companies with similar investment objectives; |
9. | fall-out benefits which the Manager and its affiliates receive from their relationship with the Fund; |
10. | the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Manager; and |
11. | the terms of the Management Agreement, including the Manager’s proposal to reduce the contractual management fee rate commencing January 1, 2006. |
Matters Relating to the Directors’ Consideration of the Continuance of the Management Agreement |
as provided in the Management 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.
Matters Relating to the Directors’ Consideration of the Continuance of the Management Agreement |
Matters Relating to the Directors’ Consideration of the Continuance of the Management Agreement |
category having between $50 million and $500 million of average net assets in their most recent fiscal year. The current effective management fee rate of 0.975% was within the range of management fees paid by the 21 funds in the peer group although higher than the fees of most of the other funds in the peer group. The directors also noted that the Lipper data was presented as a percentage of the Fund’s net assets, whereas the Fund’s management fee is computed based on the total assets less liabilities, at the rate of 0.65%. The directors noted that, since the Fund is a closed-end municipal bond fund with relatively low assets, considerations of economies of scale and breakpoints were not material to their evaluation of the management fee.
Board of Directors |
Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts University
Chairman Emeritus, American Council on Germany
President Emerita, Sarah Lawrence College
Director, Jeannette K. Watson Fellowship and Public Broadcasting Service
Trustee, Committee for Economic Development
Governor of the Court of Governors, London School of Economics
Retired Chairman of the Board and Chief Executive Officer, Kerr-McGee Corporation
Director, DCP Midstream GP, LLP, Integris Health, 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
Trustee, The Geraldine R. Dodge Foundation
Chairman, J. & W. Seligman & Co. Incorporated, Carbo Ceramics Inc., Seligman Advisors, Inc., and Seligman Services, Inc.
Director, Seligman Data Corp.
President and Chief Executive Officer, The Metropolitan Opera Association
Counsel, Lewis & Munday, P.C.
Chairman and Chief Executive Officer, Q Standards Worldwide, Inc.
Director, Kerr-McGee Corporation, Infinity, Inc., and Vibration Control Technologies, LLC
Lead Outside Director, Digital Ally Inc.
Director and Chairman, Highland Park Michigan Economic Development Corp.
Chairman, Detroit Public Schools Foundation
Ambassador and Permanent Observer of the Sovereign Military Order of Malta to the United Nations
Retired Executive Vice President and Chief Operating Officer, Sammons Enterprises, Inc.
Director, CommScope, Inc.
Director and President, J. & W. Seligman & Co. Incorporated
Chairman, Seligman Data Corp.
Director, ICI Mutual Insurance Company, Seligman Advisors, Inc., and Seligman Services, Inc.
Member of the Board of Governors, Investment Company Institute
Member: | 1 Audit Committee 2 Director Nominating Committee 3 Board Operations Committee |
Executive Officers
William C. Morris Chairman Brian T. Zino President and Chief Executive Officer Thomas G. Moles Executive Vice President | Eileen A. Comerford Vice President Eleanor T. M. Hoagland Vice President and Chief Compliance Officer Audrey G. Kuchtyak Vice President | Thomas G. Rose Vice President Lawrence P. Vogel Vice President and Treasurer Frank J. Nasta Secretary |
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable. |
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 COMPANIES.
Not applicable. |
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Unit) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (1) |
1 11-01-05 to 11-30-05 | 600 | $12.64 | 600 | N/A |
12-01-05 to 12-31-05 | 1,700 | $12.66 | 1,700 | N/A |
1-01-06 to 1-31-06 | 0 | $0 | 0 | N/A |
2-01-06 to 2-28-06 | 1,500 | $12.93 | 1,500 | N/A |
3-01-06 to 3-31-06 | 1,500 | $13.10 | 1,500 | N/A |
4-01-06 to 4-30-06 | 1,400 | $12.99 | 1,400 | N/A |
(1) | As announced on November 22, 1991, the Registrant may purchase its shares in the open market equal to the number of shares purchased by participants in the Registrant’s dividend investment plan. |
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) | Not applicable. |
(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. |
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 QUALITY MUNICIPAL FUND, INC.
By: | /S/ BRIAN T. ZINO |
| |
| Brian T. Zino |
| |
| President and Chief Executive Officer | ||
Date: | July 6, 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: | July 6, 2006 |
By: | /S/ LAWRENCE P. VOGEL |
| |
| Lawrence P. Vogel |
| |
| Vice President, Treasurer and Chief Financial Officer | ||
Date: | July 6, 2006 |
SELIGMAN QUALITY MUNICIPAL FUND, INC.
EXHIBIT INDEX
(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. |