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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 811-00266
Tri-Continental Corporation
(Exact name of registrant as specified in charter)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip code)
Scott R. Plummer
5228 Ameriprise Financial Center
Minneapolis, MN 55474
(Name and address of agent for service)
Registrant’s telephone number, including area code: (800) 345-6611
Date of fiscal year end: December 31
Date of reporting period: June 30, 2017
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Table of Contents
Item 1. | Reports to Stockholders. |
Table of Contents
June 30, 2017
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(Unaudited)
Average annual total returns (%) (for the period ended June 30, 2017) | ||||||
Inception | 6 Months cumulative | 1 Year | 5 Years | 10 Years | ||
Market Price | 01/05/29 | 12.79 | 23.76 | 13.93 | 4.46 | |
Net Asset Value | 01/05/29 | 8.64 | 19.49 | 13.28 | 5.20 | |
S&P 500 Index | 9.34 | 17.90 | 14.63 | 7.18 | ||
Blended Benchmark | 7.74 | 15.38 | 12.37 | 6.90 |
Price Per Share | ||||
June 30, 2017 | March 31, 2017 | December 31, 2016 | ||
Market Price ($) | 24.35 | 23.12 | 22.05 | |
Net Asset Value ($) | 27.56 | 27.00 | 25.91 |
Distributions Paid Per Common Share(a) | |
Payable Date | Per Share Amount ($) |
March 28, 2017 | 0.2507 |
June 27, 2017 | 0.2509 |
2 | Tri-Continental Corporation | Semiannual Report 2017 |
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(Unaudited)
Top 10 holdings (%) (at June 30, 2017) | |
Microsoft Corp. | 2.4 |
JPMorgan Chase & Co. | 2.1 |
Bank of America Corp. | 1.9 |
AT&T, Inc. | 1.7 |
Merck & Co., Inc. | 1.7 |
Cisco Systems, Inc. | 1.5 |
Facebook, Inc., Class A | 1.5 |
Altria Group, Inc. | 1.5 |
Apple, Inc. | 1.4 |
Broadcom Ltd. | 1.3 |
Portfolio breakdown (%) (at June 30, 2017) | |
Common Stocks | 65.9 |
Convertible Bonds | 9.6 |
Convertible Preferred Stocks | 7.2 |
Corporate Bonds & Notes | 12.6 |
Limited Partnerships | 0.9 |
Money Market Funds | 1.3 |
Preferred Debt | 1.0 |
Preferred Stocks | 0.3 |
Senior Loans | 1.2 |
Warrants | 0.0 (a) |
Total | 100.0 |
(a) | Rounds to zero. |
Equity sector breakdown (%) (at June 30, 2017) | |
Consumer Discretionary | 9.6 |
Consumer Staples | 9.1 |
Energy | 7.3 |
Financials | 16.4 |
Health Care | 13.5 |
Industrials | 9.5 |
Information Technology | 20.6 |
Materials | 2.9 |
Real Estate | 3.3 |
Telecommunication Services | 2.7 |
Utilities | 5.1 |
Total | 100.0 |
Tri-Continental Corporation | Semiannual Report 2017 | 3 |
Table of Contents
June 30, 2017 (Unaudited)
Common Stocks 65.8% | ||
Issuer | Shares | Value ($) |
Consumer Discretionary 7.1% | ||
Diversified Consumer Services 0.1% | ||
H&R Block, Inc. | 42,800 | 1,322,948 |
Hotels, Restaurants & Leisure 1.9% | ||
Darden Restaurants, Inc. | 161,200 | 14,578,928 |
Extended Stay America, Inc. | 425,000 | 8,228,000 |
Hilton Worldwide Holdings, Inc. | 24,400 | 1,509,140 |
Six Flags Entertainment Corp. | 95,000 | 5,662,950 |
Total | 29,979,018 | |
Household Durables 0.1% | ||
Newell Brands, Inc. | 28,300 | 1,517,446 |
Internet & Direct Marketing Retail 0.2% | ||
Amazon.com, Inc.(a) | 3,900 | 3,775,200 |
Leisure Products 0.3% | ||
Hasbro, Inc. | 37,300 | 4,159,323 |
Media 1.3% | ||
Comcast Corp., Class A | 390,300 | 15,190,476 |
News Corp., Class A | 409,400 | 5,608,780 |
Total | 20,799,256 | |
Multiline Retail 0.3% | ||
Kohl’s Corp. | 131,300 | 5,077,371 |
Specialty Retail 2.9% | ||
Best Buy Co., Inc. | 258,400 | 14,814,072 |
Ross Stores, Inc. | 210,400 | 12,146,392 |
Staples, Inc. | 650,000 | 6,545,500 |
TJX Companies, Inc. (The) | 162,900 | 11,756,493 |
Total | 45,262,457 | |
Total Consumer Discretionary | 111,893,019 | |
Consumer Staples 6.3% | ||
Food & Staples Retailing 2.4% | ||
CVS Health Corp. | 42,100 | 3,387,366 |
SYSCO Corp. | 358,880 | 18,062,430 |
Wal-Mart Stores, Inc. | 218,900 | 16,566,352 |
Total | 38,016,148 |
Common Stocks (continued) | ||
Issuer | Shares | Value ($) |
Food Products 1.2% | ||
General Mills, Inc. | 100,000 | 5,540,000 |
Tyson Foods, Inc., Class A | 220,500 | 13,809,915 |
Total | 19,349,915 | |
Household Products 0.6% | ||
Procter & Gamble Co. (The) | 105,500 | 9,194,325 |
Tobacco 2.1% | ||
Altria Group, Inc. | 310,500 | 23,122,935 |
Philip Morris International, Inc. | 84,000 | 9,865,800 |
Total | 32,988,735 | |
Total Consumer Staples | 99,549,123 | |
Energy 4.4% | ||
Energy Equipment & Services 0.7% | ||
Baker Hughes, Inc. | 185,400 | 10,106,154 |
Oil, Gas & Consumable Fuels 3.7% | ||
BP PLC, ADR | 225,000 | 7,796,250 |
Chevron Corp.(b) | 69,700 | 7,271,801 |
ConocoPhillips | 272,800 | 11,992,288 |
Exxon Mobil Corp. | 7,900 | 637,767 |
Goodrich Petroleum Corp.(a) | 57,222 | 698,109 |
Goodrich Petroleum Corp.(a),(c) | 3,824,000 | 4 |
HollyFrontier Corp. | 64,700 | 1,777,309 |
Marathon Petroleum Corp. | 14,400 | 753,552 |
Stone Energy Corp.(a) | 133,943 | 2,461,872 |
Suncor Energy, Inc. | 260,000 | 7,592,000 |
Valero Energy Corp. | 211,100 | 14,240,806 |
Warrior Met Coal, Inc. | 215,000 | 3,682,950 |
Total | 58,904,708 | |
Total Energy | 69,010,862 | |
Financials 10.6% | ||
Banks 4.9% | ||
Bank of America Corp. | 1,188,200 | 28,825,732 |
Fifth Third Bancorp | 135,700 | 3,522,772 |
First Hawaiian, Inc. | 135,000 | 4,133,700 |
JPMorgan Chase & Co. | 357,000 | 32,629,800 |
PacWest Bancorp | 160,000 | 7,472,000 |
Total | 76,584,004 |
4 | Tri-Continental Corporation | Semiannual Report 2017 |
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June 30, 2017 (Unaudited)
Common Stocks (continued) | ||
Issuer | Shares | Value ($) |
Capital Markets 2.4% | ||
Ares Capital Corp. | 475,000 | 7,780,500 |
CME Group, Inc. | 6,000 | 751,440 |
Franklin Resources, Inc. | 43,400 | 1,943,886 |
Morgan Stanley | 161,500 | 7,196,440 |
S&P Global, Inc. | 107,400 | 15,679,326 |
T. Rowe Price Group, Inc. | 9,400 | 697,574 |
TCG BDC, Inc. | 210,000 | 3,782,100 |
Total | 37,831,266 | |
Consumer Finance 0.1% | ||
Navient Corp. | 137,300 | 2,286,045 |
Insurance 2.5% | ||
Allstate Corp. (The) | 90,700 | 8,021,508 |
Marsh & McLennan Companies, Inc. | 124,700 | 9,721,612 |
MetLife, Inc. | 75,000 | 4,120,500 |
Prudential Financial, Inc. | 124,600 | 13,474,244 |
Validus Holdings Ltd. | 75,000 | 3,897,750 |
Total | 39,235,614 | |
Mortgage Real Estate Investment Trusts (REITS) 0.7% | ||
Blackstone Mortgage Trust, Inc. | 90,000 | 2,844,000 |
Starwood Property Trust, Inc. | 350,000 | 7,836,500 |
Total | 10,680,500 | |
Total Financials | 166,617,429 | |
Health Care 8.7% | ||
Biotechnology 2.0% | ||
AbbVie, Inc. | 110,000 | 7,976,100 |
Alexion Pharmaceuticals, Inc.(a) | 30,400 | 3,698,768 |
Biogen, Inc.(a) | 17,000 | 4,613,120 |
BioMarin Pharmaceutical, Inc.(a) | 20,300 | 1,843,646 |
Celgene Corp.(a) | 51,300 | 6,662,331 |
TESARO, Inc.(a) | 11,400 | 1,594,404 |
Vertex Pharmaceuticals, Inc.(a) | 37,400 | 4,819,738 |
Total | 31,208,107 | |
Health Care Equipment & Supplies 1.6% | ||
Baxter International, Inc. | 260,700 | 15,782,778 |
Becton Dickinson and Co. | 4,000 | 780,440 |
Medtronic PLC | 92,500 | 8,209,375 |
Total | 24,772,593 |
Common Stocks (continued) | ||
Issuer | Shares | Value ($) |
Health Care Providers & Services 1.2% | ||
Centene Corp.(a) | 92,000 | 7,348,960 |
Express Scripts Holding Co.(a) | 100,100 | 6,390,384 |
McKesson Corp. | 36,800 | 6,055,072 |
Total | 19,794,416 | |
Pharmaceuticals 3.9% | ||
Johnson & Johnson | 91,400 | 12,091,306 |
Mallinckrodt PLC(a) | 71,700 | 3,212,877 |
Merck & Co., Inc. | 411,600 | 26,379,444 |
Pfizer, Inc. | 597,409 | 20,066,968 |
Total | 61,750,595 | |
Total Health Care | 137,525,711 | |
Industrials 6.1% | ||
Aerospace & Defense 2.6% | ||
Boeing Co. (The) | 94,700 | 18,726,925 |
L-3 Communications Corp. | 23,000 | 3,842,840 |
Lockheed Martin Corp. | 65,700 | 18,238,977 |
Total | 40,808,742 | |
Airlines 0.9% | ||
Southwest Airlines Co. | 231,100 | 14,360,554 |
Commercial Services & Supplies 0.1% | ||
Waste Management, Inc. | 19,700 | 1,444,995 |
Electrical Equipment 0.3% | ||
Rockwell Automation, Inc. | 29,000 | 4,696,840 |
Industrial Conglomerates 1.0% | ||
Honeywell International, Inc. | 120,200 | 16,021,458 |
Machinery 0.3% | ||
Ingersoll-Rand PLC | 50,600 | 4,624,334 |
Professional Services 0.3% | ||
Nielsen Holdings PLC | 106,000 | 4,097,960 |
Road & Rail —% | ||
Union Pacific Corp. | 8,200 | 893,062 |
Trading Companies & Distributors 0.1% | ||
WW Grainger, Inc. | 12,400 | 2,238,572 |
Transportation Infrastructure 0.5% | ||
Macquarie Infrastructure Corp. | 100,000 | 7,840,000 |
Total Industrials | 97,026,517 |
Tri-Continental Corporation | Semiannual Report 2017 | 5 |
Table of Contents
June 30, 2017 (Unaudited)
Common Stocks (continued) | ||
Issuer | Shares | Value ($) |
Information Technology 14.4% | ||
Communications Equipment 1.8% | ||
Cisco Systems, Inc. | 766,300 | 23,985,190 |
F5 Networks, Inc.(a) | 37,500 | 4,764,750 |
Total | 28,749,940 | |
Electronic Equipment, Instruments & Components 0.4% | ||
Corning, Inc. | 200,000 | 6,010,000 |
Internet Software & Services 2.9% | ||
Alphabet, Inc., Class A(a) | 9,200 | 8,553,056 |
Facebook, Inc., Class A(a) | 157,300 | 23,749,154 |
VeriSign, Inc.(a) | 138,000 | 12,828,480 |
Total | 45,130,690 | |
IT Services 1.5% | ||
Automatic Data Processing, Inc. | 57,500 | 5,891,450 |
Booz Allen Hamilton Holdings Corp. | 102,500 | 3,335,350 |
MasterCard, Inc., Class A | 123,100 | 14,950,495 |
Total | 24,177,295 | |
Semiconductors & Semiconductor Equipment 2.6% | ||
Analog Devices, Inc. | 72,500 | 5,640,500 |
Applied Materials, Inc. | 18,500 | 764,235 |
Broadcom Ltd. | 87,700 | 20,438,485 |
Intel Corp. | 105,600 | 3,562,944 |
Lam Research Corp. | 36,000 | 5,091,480 |
Maxim Integrated Products, Inc. | 120,000 | 5,388,000 |
Total | 40,885,644 | |
Software 3.5% | ||
Adobe Systems, Inc.(a) | 49,100 | 6,944,704 |
Electronic Arts, Inc.(a) | 112,700 | 11,914,644 |
Microsoft Corp. | 538,000 | 37,084,340 |
Total | 55,943,688 | |
Technology Hardware, Storage & Peripherals 1.7% | ||
Apple, Inc. | 147,350 | 21,221,347 |
HP, Inc. | 105,400 | 1,842,392 |
Western Digital Corp. | 42,500 | 3,765,500 |
Total | 26,829,239 | |
Total Information Technology | 227,726,496 |
Common Stocks (continued) | ||
Issuer | Shares | Value ($) |
Materials 1.9% | ||
Chemicals 1.3% | ||
Dow Chemical Co. (The) | 95,000 | 5,991,650 |
LyondellBasell Industries NV, Class A | 166,800 | 14,076,252 |
Total | 20,067,902 | |
Containers & Packaging 0.4% | ||
International Paper Co. | 124,600 | 7,053,606 |
Metals & Mining 0.2% | ||
Newmont Mining Corp.(a) | 98,300 | 3,183,937 |
Total Materials | 30,305,445 | |
Real Estate 2.1% | ||
Equity Real Estate Investment Trusts (REITS) 2.1% | ||
Alexandria Real Estate Equities, Inc. | 50,000 | 6,023,500 |
American Tower Corp.(a) | 112,500 | 14,886,000 |
Equinix, Inc. | 13,500 | 5,793,660 |
Host Hotels & Resorts, Inc. | 223,200 | 4,077,864 |
SL Green Realty Corp. | 16,300 | 1,724,540 |
Total | 32,505,564 | |
Total Real Estate | 32,505,564 | |
Telecommunication Services 1.7% | ||
Diversified Telecommunication Services 1.7% | ||
AT&T, Inc. | 699,500 | 26,392,135 |
Total Telecommunication Services | 26,392,135 | |
Utilities 2.5% | ||
Electric Utilities 1.2% | ||
Entergy Corp. | 164,800 | 12,651,696 |
Xcel Energy, Inc. | 125,000 | 5,735,000 |
Total | 18,386,696 | |
Independent Power and Renewable Electricity Producers 0.5% | ||
NRG Yield, Inc. Class A | 422,291 | 7,204,285 |
NRG Yield, Inc. Class C | 40,000 | 704,000 |
Total | 7,908,285 |
6 | Tri-Continental Corporation | Semiannual Report 2017 |
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June 30, 2017 (Unaudited)
Common Stocks (continued) | ||
Issuer | Shares | Value ($) |
Multi-Utilities 0.8% | ||
Ameren Corp. | 63,300 | 3,460,611 |
CenterPoint Energy, Inc. | 359,100 | 9,832,158 |
Total | 13,292,769 | |
Total Utilities | 39,587,750 | |
Total Common Stocks (Cost $979,864,372) | 1,038,140,051 |
Convertible Bonds 9.5% | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Automotive 0.5% | ||||
Navistar International Corp. | ||||
04/15/2019 | 4.750% | 7,709,000 | 7,511,457 | |
Cable and Satellite 0.5% | ||||
DISH Network Corp.(d) | ||||
08/15/2026 | 3.375% | 6,450,000 | 7,821,528 | |
Consumer Products 0.5% | ||||
Iconix Brand Group, Inc. | ||||
03/15/2018 | 1.500% | 8,000,000 | 7,745,000 | |
Health Care 0.5% | ||||
Invacare Corp. | ||||
02/15/2021 | 5.000% | 3,595,000 | 3,851,144 | |
Novavax, Inc. | ||||
02/01/2023 | 3.750% | 4,200,000 | 1,800,750 | |
Teladoc, Inc.(d) | ||||
12/15/2022 | 3.000% | 1,684,000 | 1,778,354 | |
Total | 7,430,248 | |||
Home Construction 0.4% | ||||
SunPower Corp. | ||||
01/15/2023 | 4.000% | 7,500,000 | 6,436,313 | |
Independent Energy 0.4% | ||||
Chesapeake Energy Corp.(d) | ||||
09/15/2026 | 5.500% | 7,200,000 | 6,729,192 | |
Chesapeake Energy Corp. | ||||
12/15/2038 | 2.250% | 10,000 | 9,725 | |
Total | 6,738,917 | |||
Media and Entertainment 0.3% | ||||
Liberty Interactive LLC(d) | ||||
09/30/2046 | 1.750% | 3,600,000 | 4,115,250 |
Convertible Bonds (continued) | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Oil Field Services 0.3% | ||||
Cobalt International Energy, Inc. | ||||
12/01/2019 | 2.625% | 6,400,000 | 1,580,160 | |
Weatherford International Ltd. | ||||
07/01/2021 | 5.875% | 3,000,000 | 3,035,625 | |
Total | 4,615,785 | |||
Other Financial Institutions 0.4% | ||||
Encore Capital Group, Inc.(d) | ||||
03/15/2022 | 3.250% | 4,050,000 | 4,353,750 | |
Walter Investment Management Corp. | ||||
11/01/2019 | 4.500% | 5,058,000 | 1,719,720 | |
Total | 6,073,470 | |||
Other Industry 0.5% | ||||
General Cable Corp.(e) | ||||
Subordinated | ||||
11/15/2029 | 4.500% | 7,000,000 | 5,280,625 | |
Green Plains, Inc.(d) | ||||
09/01/2022 | 4.125% | 3,300,000 | 3,312,375 | |
Total | 8,593,000 | |||
Other REIT 0.9% | ||||
Blackstone Mortgage Trust, Inc. | ||||
05/05/2022 | 4.375% | 5,000,000 | 5,090,625 | |
Colony Starwood Homes(d) | ||||
01/15/2022 | 3.500% | 5,100,000 | 5,450,625 | |
New York Mortgage Trust, Inc. | ||||
01/15/2022 | 6.250% | 3,950,000 | 3,979,625 | |
Total | 14,520,875 | |||
Pharmaceuticals 2.3% | ||||
Acorda Therapeutics, Inc. | ||||
06/15/2021 | 1.750% | 4,800,000 | 4,119,000 | |
Aegerion Pharmaceuticals, Inc. | ||||
08/15/2019 | 2.000% | 5,000,000 | 4,002,120 | |
Clovis Oncology, Inc. | ||||
09/15/2021 | 2.500% | 3,100,000 | 5,246,750 | |
Fluidigm Corp. | ||||
02/01/2034 | 2.750% | 6,500,000 | 4,039,256 | |
Horizon Pharma Investment Ltd. | ||||
03/15/2022 | 2.500% | 4,600,000 | 3,964,625 | |
Intercept Pharmaceuticals, Inc. | ||||
07/01/2023 | 3.250% | 7,300,000 | 7,099,250 | |
Medicines Co. (The) | ||||
07/15/2023 | 2.750% | 3,750,000 | 3,934,837 |
Tri-Continental Corporation | Semiannual Report 2017 | 7 |
Table of Contents
June 30, 2017 (Unaudited)
Convertible Bonds (continued) | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
PTC Therapeutics, Inc. | ||||
08/15/2022 | 3.000% | 5,500,000 | 4,255,625 | |
Total | 36,661,463 | |||
Property & Casualty 0.5% | ||||
MGIC Investment Corp.(d),(e) | ||||
Junior Subordinated | ||||
04/01/2063 | 9.000% | 6,150,000 | 8,087,250 | |
Retailers 0.1% | ||||
GNC Holdings, Inc. | ||||
08/15/2020 | 1.500% | 3,000,000 | 1,980,000 | |
Technology 1.0% | ||||
Microchip Technology, Inc.(d) | ||||
Junior Subordinated | ||||
02/15/2037 | 2.250% | 9,700,000 | 10,139,507 | |
Micron Technology, Inc. | ||||
02/15/2033 | 2.125% | 1,800,000 | 5,014,125 | |
Total | 15,153,632 | |||
Transportation Services 0.4% | ||||
Aegean Marine Petroleum Network, Inc.(d) | ||||
12/15/2021 | 4.250% | 4,500,000 | 3,463,758 | |
Ship Finance International Ltd. | ||||
10/15/2021 | 5.750% | 3,850,000 | 3,686,375 | |
Total | 7,150,133 | |||
Total Convertible Bonds (Cost $160,988,939) | 150,634,321 |
Convertible Preferred Stocks 7.2% | |||
Issuer | Coupon Rate | Shares | Value ($) |
Consumer Staples 0.5% | |||
Food Products 0.5% | |||
Bunge Ltd. | 4.875% | 72,500 | 7,555,443 |
Total Consumer Staples | 7,555,443 | ||
Energy 0.8% | |||
Oil, Gas & Consumable Fuels 0.8% | |||
Anadarko Petroleum Corp. | 7.500% | 92,500 | 3,800,732 |
Hess Corp. | 8.000% | 95,000 | 5,283,900 |
WPX Energy, Inc. | 6.250% | 65,000 | 3,066,050 |
Total | 12,150,682 | ||
Total Energy | 12,150,682 |
Convertible Preferred Stocks (continued) | |||
Issuer | Coupon Rate | Shares | Value ($) |
Financials 1.3% | |||
Banks 0.5% | |||
Bank of America Corp. | 7.250% | 6,300 | 7,950,537 |
Capital Markets 0.8% | |||
AMG Capital Trust II | 5.150% | 137,500 | 8,129,687 |
Cowen, Inc. | 5.625% | 6,000 | 5,183,700 |
Total | 13,313,387 | ||
Total Financials | 21,263,924 | ||
Health Care 1.3% | |||
Health Care Equipment & Supplies 0.5% | |||
Becton Dickinson and Co. | 6.125% | 145,000 | 7,943,100 |
Health Care Providers & Services 0.3% | |||
Anthem, Inc. | 5.250% | 80,000 | 4,225,600 |
Pharmaceuticals 0.5% | |||
Allergan PLC | 5.500% | 9,500 | 8,246,760 |
Total Health Care | 20,415,460 | ||
Industrials 0.7% | |||
Machinery 0.7% | |||
Rexnord Corp. | 5.750% | 67,500 | 3,661,875 |
Stanley Black & Decker, Inc. | 5.375% | 60,000 | 6,583,200 |
Total | 10,245,075 | ||
Total Industrials | 10,245,075 | ||
Information Technology 0.8% | |||
Electronic Equipment, Instruments & Components 0.5% | |||
Belden, Inc. | 6.750% | 77,500 | 8,039,075 |
Internet Software & Services 0.3% | |||
Mandatory Exchangeable Trust(d) | 5.750% | 30,000 | 4,902,300 |
Total Information Technology | 12,941,375 | ||
Materials 0.2% | |||
Chemicals 0.2% | |||
A. Schulman, Inc. | 6.000% | 4,500 | 3,923,055 |
Total Materials | 3,923,055 | ||
Real Estate 0.4% | |||
Equity Real Estate Investment Trusts (REITS) 0.4% | |||
American Tower Corp. | 5.500% | 52,000 | 6,303,960 |
Total Real Estate | 6,303,960 |
8 | Tri-Continental Corporation | Semiannual Report 2017 |
Table of Contents
June 30, 2017 (Unaudited)
Convertible Preferred Stocks (continued) | |||
Issuer | Coupon Rate | Shares | Value ($) |
Telecommunication Services 0.3% | |||
Diversified Telecommunication Services 0.1% | |||
Frontier Communications Corp. | 11.125% | 52,500 | 1,545,600 |
Wireless Telecommunication Services 0.2% | |||
T-Mobile USA, Inc. | 5.500% | 35,000 | 3,452,400 |
Total Telecommunication Services | 4,998,000 | ||
Utilities 0.9% | |||
Electric Utilities 0.4% | |||
Great Plains Energy, Inc. | 7.000% | 112,500 | 5,967,000 |
Multi-Utilities 0.5% | |||
DTE Energy Co. | 6.500% | 145,000 | 7,953,250 |
Total Utilities | 13,920,250 | ||
Total Convertible Preferred Stocks (Cost $117,617,761) | 113,717,224 |
Corporate Bonds & Notes 12.6% | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Automotive 0.3% | ||||
Navistar International Corp. | ||||
11/01/2021 | 8.250% | 3,950,000 | 3,986,921 | |
Banking 0.5% | ||||
Popular, Inc. | ||||
07/01/2019 | 7.000% | 7,000,000 | 7,319,599 | |
Brokerage/Asset Managers/Exchanges 0.5% | ||||
LPL Holdings, Inc.(d) | ||||
09/15/2025 | 5.750% | 7,700,000 | 8,035,096 | |
Cable and Satellite 0.9% | ||||
Charter Communications Operating LLC/Capital | ||||
10/23/2045 | 6.484% | 6,800,000 | 8,182,372 | |
Telesat Canada/LLC(d) | ||||
11/15/2024 | 8.875% | 5,360,000 | 6,020,861 | |
Total | 14,203,233 | |||
Chemicals 0.2% | ||||
A. Schulman, Inc. | ||||
06/01/2023 | 6.875% | 3,700,000 | 3,929,548 | |
Diversified Manufacturing 0.5% | ||||
Hamilton Sundstrand Corp.(d) | ||||
12/15/2020 | 7.750% | 7,500,000 | 7,527,945 |
Corporate Bonds & Notes (continued) | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Electric 0.5% | ||||
Covanta Holding Corp. | ||||
07/01/2025 | 5.875% | 8,223,000 | 7,987,822 | |
Finance Companies 1.0% | ||||
Fortress Transportation & Infrastructure Investors LLC(d) | ||||
03/15/2022 | 6.750% | 5,850,000 | 5,949,754 | |
iStar, Inc. | ||||
04/01/2022 | 6.000% | 5,843,000 | 5,976,828 | |
Springleaf Finance Corp. | ||||
05/15/2022 | 6.125% | 3,700,000 | 3,903,966 | |
Total | 15,830,548 | |||
Food and Beverage 0.5% | ||||
Chobani LLC/Finance Corp., Inc.(d) | ||||
04/15/2025 | 7.500% | 4,097,000 | 4,334,720 | |
Lamb Weston Holdings, Inc.(d) | ||||
11/01/2026 | 4.875% | 3,900,000 | 4,038,478 | |
Total | 8,373,198 | |||
Gaming 0.4% | ||||
Scientific Games International, Inc. | ||||
12/01/2022 | 10.000% | 5,300,000 | 5,810,878 | |
Health Care 0.4% | ||||
Quotient Ltd.(c),(d) | ||||
10/15/2023 | 12.000% | 2,170,000 | 2,170,000 | |
Surgery Center Holdings, Inc.(d) | ||||
07/01/2025 | 6.750% | 4,100,000 | 4,153,472 | |
Total | 6,323,472 | |||
Healthcare Insurance 0.5% | ||||
Centene Corp. | ||||
01/15/2025 | 4.750% | 7,655,000 | 7,890,782 | |
Independent Energy 0.2% | ||||
Stone Energy Corp. | ||||
05/31/2022 | 7.500% | 3,936,177 | 3,723,257 | |
Media and Entertainment 0.5% | ||||
Lions Gate Entertainment Corp.(d) | ||||
11/01/2024 | 5.875% | 6,950,000 | 7,288,806 | |
Metals and Mining 0.5% | ||||
Constellium NV(d) | ||||
03/01/2025 | 6.625% | 8,300,000 | 7,936,336 | |
Midstream 0.3% | ||||
Blue Racer Midstream LLC/Finance Corp.(d) | ||||
11/15/2022 | 6.125% | 4,000,000 | 4,031,280 |
Tri-Continental Corporation | Semiannual Report 2017 | 9 |
Table of Contents
June 30, 2017 (Unaudited)
Corporate Bonds & Notes (continued) | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Oil Field Services 0.2% | ||||
Precision Drilling Corp.(d) | ||||
12/15/2023 | 7.750% | 3,750,000 | 3,784,298 | |
Packaging 1.0% | ||||
BWAY Holding Co.(d) | ||||
04/15/2025 | 7.250% | 8,000,000 | 8,121,536 | |
Novolex (d) | ||||
01/15/2025 | 6.875% | 7,690,000 | 7,990,110 | |
Total | 16,111,646 | |||
Pharmaceuticals 1.0% | ||||
AMAG Pharmaceuticals, Inc.(d) | ||||
09/01/2023 | 7.875% | 8,450,000 | 8,144,211 | |
Valeant Pharmaceuticals International, Inc.(d) | ||||
03/01/2023 | 5.500% | 8,700,000 | 7,406,632 | |
Total | 15,550,843 | |||
Retailers 0.1% | ||||
Rite Aid Corp. | ||||
Junior Subordinated | ||||
02/15/2027 | 7.700% | 1,937,000 | 1,949,745 | |
Supermarkets 0.4% | ||||
Safeway, Inc. | ||||
02/01/2031 | 7.250% | 7,512,000 | 7,054,504 | |
Technology 1.0% | ||||
Diebold, Inc. | ||||
04/15/2024 | 8.500% | 6,500,000 | 7,268,417 | |
Genesys Telecommunications Laboratories, Inc./Greeneden Lux 3 Sarl/US Holdings I, LLC(d) | ||||
11/30/2024 | 10.000% | 3,550,000 | 3,989,454 | |
Informatica LLC(d) | ||||
07/15/2023 | 7.125% | 3,988,000 | 4,061,204 | |
Total | 15,319,075 | |||
Transportation Services 0.5% | ||||
Hertz Corp. (The)(d) | ||||
06/01/2022 | 7.625% | 4,250,000 | 4,239,940 | |
Hertz Corp. (The) | ||||
10/15/2022 | 6.250% | 5,000,000 | 4,381,895 | |
Total | 8,621,835 |
Corporate Bonds & Notes (continued) | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Wirelines 0.7% | ||||
Frontier Communications Corp. | ||||
01/15/2025 | 6.875% | 1,130,000 | 882,775 | |
09/15/2025 | 11.000% | 10,360,000 | 9,576,038 | |
Total | 10,458,813 | |||
Total Corporate Bonds & Notes (Cost $194,746,551) | 199,049,480 |
Limited Partnerships 0.9% | ||
Issuer | Shares | Value ($) |
Energy 0.2% | ||
Oil, Gas & Consumable Fuels 0.2% | ||
Enviva Partners LP | 140,000 | 3,850,000 |
Total Energy | 3,850,000 | |
Industrials 0.3% | ||
Trading Companies & Distributors 0.3% | ||
Fortress Transportation & Infrastructure Investors LLC | 255,000 | 4,064,700 |
Total Industrials | 4,064,700 | |
Utilities 0.4% | ||
Independent Power and Renewable Electricity Producers 0.4% | ||
8Point3 Energy Partners LP | 425,000 | 6,430,250 |
Total Utilities | 6,430,250 | |
Total Limited Partnerships (Cost $15,610,680) | 14,344,950 |
Preferred Debt 1.0% | ||||
Issuer | Coupon Rate | Principal Amount ($) | Value ($) | |
Banking 1.0% | ||||
Citigroup Capital XIII(e) | ||||
10/30/2040 | 6.692% | 305,000 | 7,923,900 | |
Wells Fargo & Co. | ||||
12/31/2049 | 7.500% | 6,200 | 8,128,882 | |
Total | 16,052,782 | |||
Total Preferred Debt (Cost $15,026,319) | 16,052,782 |
10 | Tri-Continental Corporation | Semiannual Report 2017 |
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Preferred Stocks 0.3% | |||
Issuer | Coupon Rate | Shares | Value ($) |
Financials 0.3% | |||
Banks 0.3% | |||
GMAC Capital Trust I(e) | 6.967% | 157,500 | 4,126,500 |
Total Financials | 4,126,500 | ||
Total Preferred Stocks (Cost $4,010,775) | 4,126,500 |
Senior Loans 1.2% | ||||
Borrower | Weighted Average Coupon | Principal Amount ($) | Value ($) | |
Brokerage/Asset Managers/Exchanges 0.1% | ||||
Virtus Investment Partners(e),(f) | ||||
Term Loan | ||||
06/03/2024 | 4.952% | 1,231,000 | 1,243,310 | |
Food and Beverage 0.3% | ||||
HLF Financing SARL(e),(f) | ||||
Term Loan | ||||
02/15/2023 | 6.545% | 3,925,000 | 3,964,250 | |
Leisure 0.1% | ||||
Equinox Holdings, Inc.(e),(f) | ||||
2nd Lien Term Loan | ||||
09/06/2024 | 8.045% | 1,231,000 | 1,251,779 | |
Oil Field Services 0.5% | ||||
EagleClaw Midstream Ventures(e),(f),(g) | ||||
Term Loan | ||||
06/06/2024 | 0.000% | 8,004,000 | 7,903,950 | |
Retailers 0.2% | ||||
BJ’s Wholesale Club, Inc.(e),(f) | ||||
2nd Lien Term Loan | ||||
02/03/2025 | 8.710% | 3,808,000 | 3,678,300 |
Senior Loans (continued) | ||||
Borrower | Weighted Average Coupon | Principal Amount ($) | Value ($) | |
Technology 0.0% | ||||
Hyland Software, Inc.(e),(f),(g) | ||||
2nd Lien Term Loan | ||||
05/23/2025 | 8.186% | 615,385 | 624,616 | |
Total Senior Loans (Cost $18,770,494) | 18,666,205 |
Warrants —% | ||
Issuer | Shares | Value ($) |
Energy —% | ||
Oil, Gas & Consumable Fuels —% | ||
Goodrich Petroleum Corp.(a),(c),(h) | 11,283 | 0 |
Total Energy | 0 | |
Total Warrants (Cost $—) | 0 | |
Money Market Funds 1.4% | ||
Shares | Value ($) | |
Columbia Short-Term Cash Fund, 1.033%(i),(j) | 6,345,139 | 6,345,139 |
JPMorgan U.S. Government Money Market Fund, Agency Shares, 0.780%(i) | 14,981,819 | 14,981,819 |
Total Money Market Funds (Cost $21,326,625) | 21,326,958 | |
Total Investments (Cost: $1,527,962,516) | 1,576,058,471 | |
Other Assets & Liabilities, Net | 2,038,069 | |
Net Assets | 1,578,096,540 |
Long futures contracts outstanding | ||||||
Contract description | Number of contracts | Trading currency | Notional market value ($) | Expiration date | Unrealized appreciation ($) | Unrealized depreciation ($) |
S&P 500 E-mini | 16 | USD | 1,936,720 | 09/2017 | — | (4,440) |
S&P 500 E-mini | 35 | USD | 4,236,575 | 09/2017 | — | (15,799) |
Total | 6,173,295 | — | (20,239) |
Tri-Continental Corporation | Semiannual Report 2017 | 11 |
Table of Contents
June 30, 2017 (Unaudited)
(a) | Non-income producing investment. |
(b) | This security or a portion of this security has been pledged as collateral in connection with derivative contracts. |
(c) | Represents fair value as determined in good faith under procedures approved by the Board of Directors. At June 30, 2017, the value of these securities amounted to $2,170,004, which represents 0.14% of net assets. |
(d) | Represents privately placed and other securities and instruments exempt from SEC registration (collectively, private placements), such as Section 4(a)(2) and Rule 144A eligible securities, which are often sold only to qualified institutional buyers. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Private placements may be determined to be liquid under guidelines established by the Fund’s Board of Directors. At June 30, 2017, the value of these securities amounted to $169,378,022, which represents 10.73% of net assets. |
(e) | Variable rate security. |
(f) | Senior loans have interest rates that float periodically based primarily on the London Interbank Offered Rate (“LIBOR”) and other short-term rates. The interest rate shown reflects the weighted average coupon as of June 30, 2017. The interest rate shown for senior loans purchased on a when-issued or delayed delivery basis, if any, reflects an estimated average coupon. Remaining maturities of senior loans may be less than the stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted. |
(g) | Represents a security purchased on a forward commitment basis. |
(h) | Negligible market value. |
(i) | The rate shown is the seven-day current annualized yield at June 30, 2017. |
(j) | As defined in the Investment Company Act of 1940, an affiliated company is one in which the Fund owns 5% or more of the company’s outstanding voting securities, or a company which is under common ownership or control with the Fund. Holdings and transactions in these affiliated companies during the period ended June 30, 2017 are as follows: |
Issuer | Beginning shares | Shares purchased | Shares sold | Ending shares | Realized gain (loss) ($) | Dividends — affiliated issuers($) | Value ($) |
Columbia Short-Term Cash Fund, 1.033% | 4,250,122 | 47,551,678 | (45,456,661) | 6,345,139 | 188 | 20,713 | 6,345,139 |
ADR | American Depositary Receipt |
USD | US Dollar |
• | Level 1 – Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments. |
• | Level 2 – Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). |
• | Level 3 – Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments). |
12 | Tri-Continental Corporation | Semiannual Report 2017 |
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June 30, 2017 (Unaudited)
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models may rely on one or more significant unobservable inputs and/or significant assumptions by the Investment Manager. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
Level 1 quoted prices in active markets for identical assets ($) | Level 2 other significant observable inputs ($) | Level 3 significant unobservable inputs ($) | Investments measured at net asset value ($) | Total ($) | |
Investments | |||||
Common Stocks | |||||
Consumer Discretionary | 111,893,019 | — | — | — | 111,893,019 |
Consumer Staples | 99,549,123 | — | — | — | 99,549,123 |
Energy | 69,010,858 | — | 4 | — | 69,010,862 |
Financials | 166,617,429 | — | — | — | 166,617,429 |
Health Care | 137,525,711 | — | — | — | 137,525,711 |
Industrials | 97,026,517 | — | — | — | 97,026,517 |
Information Technology | 227,726,496 | — | — | — | 227,726,496 |
Materials | 30,305,445 | — | — | — | 30,305,445 |
Real Estate | 32,505,564 | — | — | — | 32,505,564 |
Telecommunication Services | 26,392,135 | — | — | — | 26,392,135 |
Utilities | 39,587,750 | — | — | — | 39,587,750 |
Total Common Stocks | 1,038,140,047 | — | 4 | — | 1,038,140,051 |
Convertible Bonds | — | 150,634,321 | — | — | 150,634,321 |
Convertible Preferred Stocks | |||||
Consumer Staples | — | 7,555,443 | — | — | 7,555,443 |
Energy | 12,150,682 | — | — | — | 12,150,682 |
Financials | 7,950,537 | 13,313,387 | — | — | 21,263,924 |
Health Care | 20,415,460 | — | — | — | 20,415,460 |
Industrials | 10,245,075 | — | — | — | 10,245,075 |
Information Technology | 8,039,075 | 4,902,300 | — | — | 12,941,375 |
Materials | — | 3,923,055 | — | — | 3,923,055 |
Real Estate | 6,303,960 | — | — | — | 6,303,960 |
Telecommunication Services | 4,998,000 | — | — | — | 4,998,000 |
Utilities | 13,920,250 | — | — | — | 13,920,250 |
Total Convertible Preferred Stocks | 84,023,039 | 29,694,185 | — | — | 113,717,224 |
Corporate Bonds & Notes | — | 196,879,480 | 2,170,000 | — | 199,049,480 |
Tri-Continental Corporation | Semiannual Report 2017 | 13 |
Table of Contents
June 30, 2017 (Unaudited)
Level 1 quoted prices in active markets for identical assets ($) | Level 2 other significant observable inputs ($) | Level 3 significant unobservable inputs ($) | Investments measured at net asset value ($) | Total ($) | |
Limited Partnerships | |||||
Energy | 3,850,000 | — | — | — | 3,850,000 |
Industrials | 4,064,700 | — | — | — | 4,064,700 |
Utilities | 6,430,250 | — | — | — | 6,430,250 |
Total Limited Partnerships | 14,344,950 | — | — | — | 14,344,950 |
Preferred Debt | 16,052,782 | — | — | — | 16,052,782 |
Preferred Stocks | |||||
Financials | 4,126,500 | — | — | — | 4,126,500 |
Senior Loans | — | 18,666,205 | — | — | 18,666,205 |
Warrants | |||||
Energy | — | — | 0* | — | 0* |
Money Market Funds | 14,981,819 | — | — | 6,345,139 | 21,326,958 |
Total Investments | 1,171,669,137 | 395,874,191 | 2,170,004 | 6,345,139 | 1,576,058,471 |
Derivatives | |||||
Liability | |||||
Futures Contracts | (20,239) | — | — | — | (20,239) |
Total | 1,171,648,898 | 395,874,191 | 2,170,004 | 6,345,139 | 1,576,038,232 |
* | Rounds to zero. |
14 | Tri-Continental Corporation | Semiannual Report 2017 |
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June 30, 2017 (Unaudited)
Assets | |
Investments, at cost | |
Unaffiliated issuers, at cost | $1,521,617,710 |
Affiliated issuers, at cost | 6,344,806 |
Total investments, at cost | 1,527,962,516 |
Investments, at value | |
Unaffiliated issuers, at value | 1,569,713,332 |
Affiliated issuers, at value | 6,345,139 |
Total investments, at value | 1,576,058,471 |
Cash | 8,252 |
Receivable for: | |
Investments sold | 7,074,139 |
Dividends | 1,979,885 |
Interest | 5,476,174 |
Variation margin for futures contracts | 7,405 |
Other assets | 43,681 |
Total assets | 1,590,648,007 |
Liabilities | |
Payable for: | |
Investments purchased | 2,511,019 |
Investments purchased on a delayed delivery basis | 8,553,143 |
Common Stock payable | 715,914 |
Preferred Stock dividends | 470,463 |
Management services fees | 17,706 |
Stockholder servicing and transfer agent fees | 8,083 |
Compensation of board members | 138,988 |
Compensation of chief compliance officer | 177 |
Other expenses | 135,974 |
Total liabilities | 12,551,467 |
Net assets | $1,578,096,540 |
Preferred Stock | 37,637,000 |
Net assets for Common Stock | 1,540,459,540 |
Net asset value per share of outstanding Common Stock | $27.56 |
Market price per share of Common Stock | $24.35 |
Tri-Continental Corporation | Semiannual Report 2017 | 15 |
Table of Contents
June 30, 2017 (Unaudited)
Capital Stock | |
$2.50 Cumulative Preferred Stock, $50 par value, assets coverage per share $2,096 | |
Shares issued and outstanding — 752,740 | $37,637,000 |
Common Stock, $0.50 par value: | |
Shares issued and outstanding — 55,898,174 | 27,949,087 |
Surplus | |
Capital surplus | 1,499,711,310 |
Excess of distributions over net investment income | (1,129,415) |
Accumulated net realized loss | (34,147,158) |
Unrealized appreciation (depreciation) on: | |
Investments — unaffiliated issuers | 48,095,622 |
Investments — affiliated issuers | 333 |
Futures contracts | (20,239) |
Net assets | 1,578,096,540 |
16 | Tri-Continental Corporation | Semiannual Report 2017 |
Table of Contents
Six Months Ended June 30, 2017 (Unaudited)
Net investment income | |
Income: | |
Dividends — unaffiliated issuers | $18,069,215 |
Dividends — affiliated issuers | 20,713 |
Interest | 11,115,408 |
Foreign taxes withheld | (18,588) |
Total income | 29,186,748 |
Expenses: | |
Management services fees | 3,184,760 |
Stockholder servicing and transfer agent fees | 296,891 |
Compensation of board members | 37,595 |
Custodian fees | 12,770 |
Printing and postage fees | 49,006 |
Stockholders’ meeting fees | 30,363 |
Audit fees | 20,935 |
Legal fees | 13,456 |
Compensation of chief compliance officer | 159 |
Other | 135,004 |
Total expenses | 3,780,939 |
Net investment income(a) | 25,405,809 |
Realized and unrealized gain (loss) — net | |
Net realized gain (loss) on: | |
Investments — unaffiliated issuers | 127,634,797 |
Investments — affiliated issuers | 188 |
Foreign currency translations | 903 |
Futures contracts | 322,272 |
Net realized gain | 127,958,160 |
Net change in unrealized appreciation (depreciation) on: | |
Investments — unaffiliated issuers | (34,781,139) |
Investments — affiliated issuers | 385 |
Futures contracts | 45,389 |
Net change in unrealized appreciation (depreciation) | (34,735,365) |
Net realized and unrealized gain | 93,222,795 |
Net increase in net assets resulting from operations | $118,628,604 |
(a) | Net investment income for Common Stock is $24,464,884, which is net of Preferred Stock dividends of $940,925. |
Tri-Continental Corporation | Semiannual Report 2017 | 17 |
Table of Contents
Six Months Ended June 30, 2017 (Unaudited) | Year Ended December 31, 2016 | |
Operations | ||
Net investment income | $25,405,809 | $51,948,388 |
Net realized gain | 127,958,160 | 33,777,222 |
Net change in unrealized appreciation (depreciation) | (34,735,365) | 99,696,778 |
Net increase in net assets resulting from operations | 118,628,604 | 185,422,388 |
Distributions to stockholders | ||
Net investment income | ||
Preferred Stock | (940,925) | (1,881,850) |
Common Stock | (28,094,855) | (52,298,343) |
Total distributions to stockholders | (29,035,780) | (54,180,193) |
Decrease in net assets from capital stock activity | (19,976,272) | (43,111,564) |
Total increase in net assets | 69,616,552 | 88,130,631 |
Net assets at beginning of period | 1,508,479,988 | 1,420,349,357 |
Net assets at end of period | $1,578,096,540 | $1,508,479,988 |
Undistributed (excess of distributions over) net investment income | $(1,129,415) | $2,500,556 |
Six Months Ended | Year Ended | |||
June 30, 2017 | December 31, 2016 | |||
Shares | Dollars ($) | Shares | Dollars ($) | |
Capital stock activity | ||||
Common Stock issued at market price in distributions | 345,193 | 8,153,167 | 728,911 | 15,011,568 |
Common Stock issued for investment plan purchases | 51,514 | 1,192,727 | 86,267 | 1,697,112 |
Common Stock purchased from investment plan participants | (379,813) | (8,840,386) | (826,163) | (16,964,540) |
Common Stock purchased in the open market | (877,204) | (20,481,780) | (2,087,713) | (42,855,704) |
Total net decrease | (860,310) | (19,976,272) | (2,098,698) | (43,111,564) |
18 | Tri-Continental Corporation | Semiannual Report 2017 |
Table of Contents
Six Months Ended June 30, 2017 (Unaudited) | Year ended December 31, | |||||
2016 | 2015 | 2014 | 2013 | 2012 | ||
Per share data | ||||||
Net asset value, beginning of period | $25.91 | $23.49 | $24.76 | $23.11 | $18.77 | $16.77 |
Income from investment operations: | ||||||
Net investment income | 0.45 | 0.90 | 0.81 | 0.73 | 0.69 | 0.63 |
Net realized and unrealized gain (loss) | 1.72 | 2.33 | (1.37) | 1.70 | 4.36 | 2.00 |
Total from investment operations | 2.17 | 3.23 | (0.56) | 2.43 | 5.05 | 2.63 |
Less distributions to Stockholders from: | ||||||
Net investment income | ||||||
Preferred Stock | (0.02) | (0.03) | (0.03) | (0.03) | (0.03) | (0.03) |
Common Stock | (0.50) | (0.91) | (0.81) | (0.75) | (0.68) | (0.60) |
Total distributions to Stockholders | (0.52) | (0.94) | (0.84) | (0.78) | (0.71) | (0.63) |
Dilution in net asset value from dividend reinvestment | — | (0.06) | (0.05) | — | — | — |
Increase resulting from share repurchases | — | 0.19 | 0.18 | — | — | — |
Net asset value, end of period | $27.56 | $25.91 | $23.49 | $24.76 | $23.11 | $18.77 |
Adjusted net asset value, end of period(a) | $27.46 | $25.83 | $23.42 | $24.68 | $23.04 | $18.71 |
Market price, end of period | $24.35 | $22.05 | $20.02 | $21.41 | $19.98 | $16.00 |
Total return | ||||||
Based upon net asset value | 8.64% | 15.25% | (1.36%) | 11.09% | 27.76% | 16.24% |
Based upon market price | 12.79% | 15.08% | (2.78%) | 11.11% | 29.58% | 16.77% |
Ratios to average net assets | ||||||
Expenses to average net assets for Common Stock(b) | 0.50% (c) | 0.50% | 0.50% | 0.49% | 0.50% | 0.52% |
Net investment income to average net assets for Common Stock | 3.23% (c) | 3.59% | 3.16% | 2.91% | 3.12% | 3.28% |
Supplemental data | ||||||
Net assets, end of period (000’s): | ||||||
Common Stock | $1,540,460 | $1,470,843 | $1,382,712 | $1,511,285 | $1,435,734 | $1,183,285 |
Preferred Stock | $37,637 | $37,637 | $37,637 | $37,637 | $37,637 | $37,637 |
Total net assets | $1,578,097 | $1,508,480 | $1,420,349 | $1,548,922 | $1,473,371 | $1,220,922 |
Portfolio turnover | 61% | 82% | 76% | 76% | 62% | 68% |
Notes to Financial Highlights | |
(a) | Assumes the exercise of outstanding warrants. |
(b) | In addition to the fees and expenses that the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of any other funds in which it invests. Such indirect expenses are not included in the Fund’s reported expense ratios. |
(c) | Annualized. |
Tri-Continental Corporation | Semiannual Report 2017 | 19 |
Table of Contents
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Liability derivatives | ||
Risk exposure category | Statement of assets and liabilities location | Fair value ($) |
Equity risk | Net assets — unrealized depreciation on futures contracts | 20,239* |
* | Includes cumulative appreciation (depreciation) as reported in the tables following the Portfolio of Investments. Only the current day’s variation margin is reported in receivables or payables in the Statement of Assets and Liabilities. |
Amount of realized gain (loss) on derivatives recognized in income | |
Risk exposure category | Futures contracts ($) |
Equity risk | 322,272 |
Change in unrealized appreciation (depreciation) on derivatives recognized in income | |
Risk exposure category | Futures contracts ($) |
Equity risk | 45,389 |
Derivative instrument | Average notional amounts ($)* |
Futures contracts — long | 6,802,388 |
* | Based on the ending quarterly outstanding amounts for the six months ended June 30, 2017. |
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Federal tax cost ($) | Gross unrealized appreciation ($) | Gross unrealized (depreciation) ($) | Net unrealized appreciation ($) |
1,527,963,000 | 111,929,000 | (63,833,000) | 48,096,000 |
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2017 ($) | 2018 ($) | 2019 ($) | No expiration short-term ($) | No expiration long-term ($) | Total ($) |
159,978,143 | — | — | — | — | 159,978,143 |
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Director | For | Withheld |
Patricia M. Flynn | 36,170,197 | 5,664,839 |
Catherine James Paglia | 36,182,101 | 5,652,936 |
Williams A. Hawkins* | 36,100,627 | 5,734,409 |
For | Against | Abstain |
38,076,460 | 3,284,788 | 473,781 |
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Item 2. | Code of Ethics. |
Not applicable for semiannual reports.
Item 3. | Audit Committee Financial Expert. |
Not applicable for semiannual reports.
Item 4. | Principal Accountant Fees and Services. |
Not applicable for semiannual reports.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable for semiannual reports.
Item 6. | Investments |
(a) | The registrant’s “Schedule I – Investments in securities of unaffiliated issuers” (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form N-CSR. |
(b) | Not applicable. |
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable for semiannual reports.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable for semiannual reports.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||||
01-01-17 to 01-31-17 | 241,795 | $ | 22.41 | 241,795 | 2,596,129 | |||||||||||
02-01-17 to 02-29-17 | 198,098 | 22.97 | 198,098 | 2,398,031 | ||||||||||||
03-01-17 to 03-31-17 | 159,899 | 23.33 | 159,899 | 2,238,132 | ||||||||||||
04-01-17 to 04-30-17 | 230,036 | 23.30 | 230,036 | 2,008,096 | ||||||||||||
05-01-17 to 05-31-17 | 255,915 | 23.85 | 255,915 | 1,752,181 | ||||||||||||
06-01-17 to 06-30-17 | 171,274 | 24.26 | 171,274 | 1,580,907 |
(1) | The registrant has a stock repurchase program. For 2017, the registrant is authorized to repurchase up to 5% of its outstanding Common Stock directly from stockholders and in the open market, provided that, with respect to shares repurchased in the open market the excess of the net asset value of a share of Common Stock over its market price (the discount) is greater than 10%. |
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Item 10. | Submission of Matters to a Vote of Security Holders. |
There were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11. | Controls and Procedures. |
(a) | The registrant’s principal executive officer and principal financial officers, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing of this report, have concluded that such controls and procedures are adequately designed to ensure that material information required to be disclosed by the registrant in Form N-CSR is accumulated and communicated to the registrant’s management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. |
(b) | There was no change in the registrant’s internal control over financial reporting that occurred during the registrant’s 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 required to be disclosed under Item 2 of Form N-CSR: Not applicable for semiannual reports.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) None.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
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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.
(registrant) | Tri-Continental Corporation | |
By (Signature and Title) | /s/ Christopher O. Petersen | |
Christopher O. Petersen, President and Principal Executive Officer |
Date | August 18, 2017 | |
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 (Signature and Title) | /s/ Christopher O. Petersen | |
Christopher O. Petersen, President and Principal Executive Officer |
Date | August 18, 2017 | |
By (Signature and Title) | /s/ Michael G. Clarke | |
Michael G. Clarke, Treasurer and Chief Financial Officer |
Date | August 18, 2017 | |