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 811-03596
SELIGMAN COMMUNICATIONS AND INFORMATION FUND, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(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: (612) 671-1947
Date of fiscal year end: December 31
Date of reporting period: June 30, 2010
Semiannual Report
(COLUMBIA MANAGEMENT LOGO)
SELIGMAN
COMMUNICATIONS AND INFORMATION FUND
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT FOR THE PERIOD ENDED
JUNE 30, 2010
SELIGMAN COMMUNICATIONS AND INFORMATION FUND SEEKS TO PROVIDE SHAREHOLDERS WITH
CAPITAL GAIN.
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
TABLE OF CONTENTS --------------------------------------------------------------
<Table>
Your Fund at a Glance.............. 3
Fund Expenses Example.............. 8
Portfolio of Investments........... 10
Statement of Assets and
Liabilities...................... 22
Statement of Operations............ 24
Statements of Changes in Net
Assets........................... 26
Financial Highlights............... 27
Notes to Financial Statements...... 33
Approval of Investment Management
Services Agreement............... 48
Proxy Voting....................... 51
</Table>
- --------------------------------------------------------------------------------
2 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
- --------------------------------------------------------------------------------
> Seligman Communications and Information Fund (the Fund) Class A shares fell
9.00% (excluding sales charge) for the six months ended June 30, 2010.
> The Fund outperformed its benchmark, the S&P North American Technology Sector
Index, which lost 10.39% during the same six-month period.
> The Fund underperformed its peer group, as represented by the Lipper Science &
Technology Funds Index, which declined 7.52% during the same period.
ANNUALIZED TOTAL RETURNS (for period ended June 30, 2010)
- --------------------------------------------------------------------------------
<Table>
<Caption>
6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------
Seligman Communications and
Information Fund
Class A (excluding sales
charge) -9.00% +14.32% -1.22% +7.62% -1.48%
- ------------------------------------------------------------------------------
S&P North American Technology
Sector Index(1) (unmanaged) -10.39% +15.84% -4.26% +3.06% -8.11%
- ------------------------------------------------------------------------------
Lipper Science & Technology
Funds Index(2) (unmanaged) -7.52% +17.25% -4.76% +2.50% -8.45%
- ------------------------------------------------------------------------------
Lipper Science & Technology
Funds Average(3) (unmanaged) -7.95% +17.88% -5.50% +2.21% -8.42%
- ------------------------------------------------------------------------------
</Table>
* Not annualized.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when redeemed, may be worth more
or less than their original cost. Current performance may be lower or higher
than the performance information shown. You may obtain performance information
current to the most recent month-end by contacting your financial intermediary,
visiting seligman.com (through September 26, 2010) and thereafter
columbiamanagement.com or calling 800.221.2450.
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the table above. If reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
fees and expenses. The Fund's returns reflect the effect of fee waivers/expense
reimbursements, if any. Without such waivers/reimbursements, the
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
Fund's returns would be lower. See the Average Annual Total Returns table for
performance of other share classes of the Fund.
The indices and average do not reflect the effects of sales charges, expenses
(excluding Lipper) and taxes. It is not possible to invest directly in an index
or an average.
(1) The S&P North American Technology Sector Index (the "NATS Index"), an
unmanaged benchmark, is a modified capitalization-weighted index based on a
universe of technology related stocks. The index reflects reinvestment of
all distributions and changes in market prices.
(2) The Lipper Science & Technology Funds Index (Lipper Index) includes the 30
largest science and technology funds tracked by Lipper Inc. The Lipper
Index's returns include net reinvested dividends.*
(3) The Lipper Science & Technology Funds Average (Lipper Average), an unmanaged
benchmark, measures the performance of mutual funds that invest at least 65%
of their equity portfolios in science and technology stocks. The average
reflects reinvestment of all distributions and changes in market prices.*
* On Jan. 1, 2010, the Lipper Index replaced the Lipper Average as the Fund's
secondary benchmark. The Lipper Index includes a select peer group from the
Lipper Average, as described above. This change was made to bring the
selection of the Seligman Fund secondary benchmarks in line with the
practice of the Fund Family, which would permit a common shareholder
experience and provide a more focused peer group for performance comparison
purposes. Information on both the Lipper Index and the Lipper Average will
be included for a one-year transition period. Thereafter, only the Lipper
Index will be included.
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4 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
<Table>
<Caption>
AT JUNE 30, 2010 SINCE
Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION**
Class A (inception
6/23/83) -9.00% +14.32% -1.22% +7.62% -1.48% N/A
- -------------------------------------------------------------------------------------
Class B (inception
4/22/96) -9.32% +13.47% -1.95% +6.80% -2.22% N/A
- -------------------------------------------------------------------------------------
Class C (inception
5/27/99) -9.34% +13.46% -1.95% +6.82% -2.21% N/A
- -------------------------------------------------------------------------------------
Class I (inception
8/03/09) -8.84% N/A N/A N/A N/A +6.65%*
- -------------------------------------------------------------------------------------
Class R2 (inception
4/30/03) -9.19% +13.89% -1.51% +7.33% N/A +10.15%
- -------------------------------------------------------------------------------------
Class R3 (inception
8/03/09) -9.05% N/A N/A N/A N/A +6.15%*
- -------------------------------------------------------------------------------------
Class R4 (inception
8/03/09) -8.97% N/A N/A N/A N/A +6.36%*
- -------------------------------------------------------------------------------------
Class R5 (inception
11/30/01) -8.84% +14.79% -0.79% +8.10% N/A +4.87%
- -------------------------------------------------------------------------------------
With sales charge
Class A (inception
6/23/83) -14.24% +7.75% -3.14% +6.36% -2.06% N/A
- -------------------------------------------------------------------------------------
Class B (inception
4/22/96) -13.85% +8.47% -2.94% +6.49% -2.22% N/A
- -------------------------------------------------------------------------------------
Class C (inception
5/27/99) -10.25% +12.46% -1.95% +6.82% -2.21% N/A
- -------------------------------------------------------------------------------------
</Table>
Class A share performance reflects the maximum initial sales charge of 5.75%.
Class B share performance reflects a contingent deferred sales charge (CDSC)
applied as follows: first year 5%; second year 4%; third and fourth years 3%;
fifth year 2%; sixth year 1%; no sales charge thereafter. Class C shares may be
subject to a 1% CDSC if shares are sold within one year after purchase. Sales
charges do not apply to Class I, Class R2, Class R3, Class R4 and Class R5
shares. Class I, Class R2, Class R3, Class R4 and Class R5 are available to
qualifying institutional investors only.
*Not annualized.
**For classes with less than 10 years performance.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 5
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
MORNINGSTAR STYLE BOX(TM)
- --------------------------------------------------------------------------------
<Table>
<Caption>
Equity Style
Value Blend Growth
X Large
Medium Size
Small
</Table>
The Morningstar Style Box(TM) is based on the Fund's portfolio holdings as of
period end. For equity funds, the vertical axis shows the market capitalization
of the stocks owned, and the horizontal axis shows investment style (value,
blend, or growth). Information shown is based on the most recent data provided
by Morningstar.
The products of technology companies may be subject to severe competition and
rapid obsolescence, and technology stocks may be subject to greater price
fluctuations, government regulation, and limited liquidity as compared to other
investments. In addition, investments in one economic sector, such as
technology, may result in greater price fluctuations than owning a portfolio of
diversified investments. Investments in small- and mid-capitalization companies
involve greater risks and potential volatility than investments in larger, more
established companies. See the Fund's prospectus for information on these and
other risks associated with the Fund.
(C)2010 Morningstar, Inc. All rights reserved. The information contained herein
is proprietary to Morningstar and/or its content providers, may not be copied or
distributed and is not warranted to be accurate, complete, or timely. Neither
Morningstar nor its content providers are responsible for any damages or losses
arising from any use of this information. Past performance is no guarantee of
future results.
- --------------------------------------------------------------------------------
6 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN(1) (at June 30, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Consumer Discretionary 0.4%
- ------------------------------------------------
Health Care 5.6%
- ------------------------------------------------
Industrials 2.5%
- ------------------------------------------------
Information Technology 89.5%
- ------------------------------------------------
Utilities 0.1%
- ------------------------------------------------
Other(2) 1.9%
- ------------------------------------------------
</Table>
(1) Sectors can be comprised of several industries. Please refer to the section
entitled "Portfolio of Investments" for a complete listing.
Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan). The Fund's
composition is subject to change.
(2) Cash & Cash Equivalents.
The sectors identified above are based on the Global Industry Classification
Standard (GICS), which was developed by, and is the exclusive property of,
Morgan Stanley Capital International Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
TOP TEN HOLDINGS(1) (at June 30, 2010)
- ---------------------------------------------------------------------
<Table>
<Caption>
Synopsys, Inc. 7.2%
- ------------------------------------------------
Apple, Inc. 6.3%
- ------------------------------------------------
BMC Software, Inc. 5.3%
- ------------------------------------------------
Check Point Software Technologies Ltd. 5.2%
- ------------------------------------------------
Symantec Corp. 4.9%
- ------------------------------------------------
Amdocs Ltd. 4.8%
- ------------------------------------------------
Microsoft Corp. 4.6%
- ------------------------------------------------
Parametric Technology Corp. 4.0%
- ------------------------------------------------
Cisco Systems, Inc. 3.9%
- ------------------------------------------------
Google, Inc., Class A 3.4%
- ------------------------------------------------
</Table>
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan and Cash &
Cash Equivalents).
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are of the date given, are subject to change at any time, and are
not recommendations to buy or sell any security.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 7
FUND EXPENSES EXAMPLE ----------------------------------------------------------
(UNAUDITED)
As a shareholder of the Fund, you incur two types of costs: (i) transaction
costs, including sales charges (loads) on purchase payments; and (ii) ongoing
costs, which may include management fees; distribution and service (Rule 12b-1)
fees; and other Fund fees and expenses. This example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
In addition to the ongoing expenses which the Fund bears directly, the Fund's
shareholders indirectly bear the ongoing expenses of any funds in which the Fund
invests (also referred to as "acquired funds"), including affiliated and non-
affiliated pooled investment vehicles (including mutual funds and exchange
traded funds). The Fund's indirect expense from investing in the acquired funds
is based on the Fund's pro rata portion of the ongoing expenses charged by
acquired funds using the expense ratio of each of the acquired funds as of the
acquired fund's most recent shareholder report.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the six months ended June 30, 2010.
ACTUAL EXPENSES
The first line of the table provides information about actual account values and
actual expenses for each class. You may use the information in this line,
together with the amount you invested, to estimate the expenses that you paid
over the period. Simply divide your account value by $1,000 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the result by the
number in the first line under the heading titled "Expenses paid during the
period" to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table provides information about hypothetical account
values and hypothetical expenses based on the actual expense ratio for each
class and an assumed rate of return of 5% per year before expenses, which is not
the actual return for the class. The hypothetical account values and expenses
may not be used to estimate the actual ending account balance or expenses you
paid for the period. You may use this information to compare the ongoing costs
of investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads). Therefore, the second line of the table is useful in comparing
ongoing costs only, and will not help you determine the relative total costs of
owning different funds. In addition, if these transactional costs were included,
your costs would have been higher.
- --------------------------------------------------------------------------------
8 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
BEGINNING ENDING EXPENSES
ACCOUNT VALUE ACCOUNT VALUE PAID DURING ANNUALIZED
JAN. 1, 2010 JUNE 30, 2010 THE PERIOD(a) EXPENSE RATIO
- ------------------------------------------------------------------------------------------
Class A
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 910.00 $ 6.39 1.35%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.10 $ 6.76 1.35%
- ------------------------------------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 906.80 $ 9.98 2.11%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.33 $10.54 2.11%
- ------------------------------------------------------------------------------------------
Class C
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 906.60 $ 9.97 2.11%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,014.33 $10.54 2.11%
- ------------------------------------------------------------------------------------------
Class I
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 911.60 $ 4.46 .94%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,020.13 $ 4.71 .94%
- ------------------------------------------------------------------------------------------
Class R2
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 908.10 $ 8.28 1.75%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,016.12 $ 8.75 1.75%
- ------------------------------------------------------------------------------------------
Class R3
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 909.50 $ 7.15 1.51%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,017.31 $ 7.55 1.51%
- ------------------------------------------------------------------------------------------
Class R4
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 910.30 $ 5.97 1.26%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,018.55 $ 6.31 1.26%
- ------------------------------------------------------------------------------------------
Class R5
- ------------------------------------------------------------------------------------------
Actual(b) $1,000 $ 911.60 $ 4.74 1.00%
- ------------------------------------------------------------------------------------------
Hypothetical
(5% return before expenses) $1,000 $1,019.84 $ 5.01 1.00%
- ------------------------------------------------------------------------------------------
</Table>
(a) Expenses are equal to the annualized expense ratio for each class as
indicated above, multiplied by the average account value over the period,
multiplied by 181/365 (to reflect the one-half year period).
(b) Based on the actual return for the six months ended June 30, 2010: -9.00%
for Class A, -9.32% for Class B, -9.34% for Class C, -8.84% for Class I,
-9.19% for Class R2, -9.05% for Class R3, -8.97% for Class R4 and -8.84% for
Class R5.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 9
PORTFOLIO OF INVESTMENTS -------------------------------------------------------
JUNE 30, 2010 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.3%)
ISSUER SHARES VALUE(a)
AEROSPACE & DEFENSE (2.0%)
General Dynamics Corp. 1,123,700 $65,803,872
- -------------------------------------------------------------------------------------
BIOTECHNOLOGY (0.8%)
Gilead Sciences, Inc. 729,800(b) 25,017,544
- -------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (6.7%)
Cisco Systems, Inc. 5,878,700(b) 125,275,097
Nortel Networks Corp. 819(b,c) 26
QUALCOMM, Inc. 2,937,500 96,467,500
---------------
Total 221,742,623
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (13.1%)
Apple, Inc. 810,000(b) 203,739,300
Electronics for Imaging, Inc. 4,784,000(b,d,g) 46,644,000
EMC Corp. 2,723,200(b,d) 49,834,560
Hewlett-Packard Co. 2,461,802 106,546,791
NetApp, Inc. 763,323(b,d) 28,479,581
---------------
Total 435,244,232
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (0.4%)
Sensata Technologies Holding NV 909,169(b,c) 14,537,612
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.9%)
Avnet, Inc. 1,247,400(b) 30,074,814
- -------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.2%)
Boston Scientific Corp. 3,152,300(b) 18,283,340
St. Jude Medical, Inc. 1,543,500(b) 55,704,915
---------------
Total 73,988,255
- -------------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (6.9%)
Google, Inc., Class A 244,800(b) 108,923,760
Open Text Corp. 2,439,198(b,c,g) 91,567,493
VeriSign, Inc. 1,070,000(b,d) 28,408,500
---------------
Total 228,899,753
- -------------------------------------------------------------------------------------
IT SERVICES (8.2%)
Amdocs Ltd. 5,746,895(b,c) 154,304,131
Cognizant Technology Solutions Corp., Class A 155,200(b) 7,769,312
IBM Corp. 607,900(d) 75,063,492
Lender Processing Services, Inc. 735,600 23,031,636
Rolta India Ltd. 2,927,900(c) 10,477,478
---------------
Total 270,646,049
- -------------------------------------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (1.2%)
Life Technologies Corp. 856,865(b,d) 40,486,871
- -------------------------------------------------------------------------------------
MEDIA (0.4%)
Virgin Media, Inc. 837,400(d) 13,976,206
- -------------------------------------------------------------------------------------
OFFICE ELECTRONICS (1.2%)
Xerox Corp. 5,113,700 41,114,148
- -------------------------------------------------------------------------------------
PHARMACEUTICALS (1.4%)
Abbott Laboratories 983,300 45,998,774
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (12.3%)
Amkor Technology, Inc. 5,767,338(b,d) 31,778,032
Analog Devices, Inc. 2,117,220 58,985,749
ASML Holding NV 831,900(c) 22,852,293
Avago Technologies Ltd. 224,816(b,c,d) 4,734,625
KLA-Tencor Corp. 1,694,500 47,242,660
Lam Research Corp. 426,900(b,d) 16,247,814
Marvell Technology Group Ltd. 3,064,843(b,c) 48,301,926
Micron Technology, Inc. 1,870,800(b,d) 15,883,092
National Semiconductor Corp. 3,382,358 45,526,539
Novellus Systems, Inc. 3,852,400(b,d) 97,696,864
ON Semiconductor Corp. 1,272,900(b,d) 8,121,102
STMicroelectronics NV 1,410,400(c,d) 11,156,264
---------------
Total 408,526,960
- -------------------------------------------------------------------------------------
SOFTWARE (39.6%)
Activision Blizzard, Inc. 3,509,900 36,818,851
Adobe Systems, Inc. 1,349,500(b) 35,667,285
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
10 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
SOFTWARE (CONT.)
Aspen Technology, Inc. 2,447,700(b) $26,655,453
BMC Software, Inc. 4,918,164(b) 170,316,019
BroadSoft, Inc. 314,475(b) 2,688,761
Check Point Software Technologies Ltd. 5,649,843(b,c) 166,557,372
JDA Software Group, Inc. 652,900(b,d) 14,350,742
Mentor Graphics Corp. 6,363,322(b,d,g) 56,315,400
Micro Focus International PLC 1,044,464(c) 6,560,744
Microsoft Corp. 6,421,900 147,767,919
Nuance Communications, Inc. 7,274,700(b,d) 108,756,765
Oracle Corp. 787,500 16,899,750
Parametric Technology Corp. 8,299,188(b,d,g) 130,048,276
Symantec Corp. 11,292,100(b,d) 156,734,348
Synopsys, Inc. 11,090,171(b,g) 231,451,869
---------------
Total 1,307,589,554
- -------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $3,454,419,149) $3,223,647,267
- -------------------------------------------------------------------------------------
<Caption>
PREFERRED STOCKS (0.1%)
ISSUER SHARES VALUE(a)
COMMUNICATIONS EQUIPMENT (--%)
Flashpoint Technology, Inc.
Convertible 246,914(b,e,f) $--
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS (0.1%)
Silver Peak Systems, Inc. Convertible 2,620,545(b,f) 2,332,285
- -------------------------------------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (--%)
Miasole
Convertible 805,620(b,f) 1,611,240
- -------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost: $21,074,781) $3,943,525
- -------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (1.9%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 0.276% 62,504,499(i) $62,504,499
- -------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $62,504,499) $62,504,499
- -------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (10.6%)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
ASSET-BACKED COMMERCIAL PAPER (1.3%)
Elysian Funding LLC
07-06-10 0.600% $9,996,834 $9,996,834
Rheingold Securitization
07-13-10 0.500 9,321,563 9,321,563
Royal Park Investments Funding Corp.
09-22-10 0.601 4,992,833 4,992,833
Scaldis Capital LLC
07-12-10 0.410 4,998,178 4,998,178
07-20-10 0.410 4,998,121 4,998,121
Versailles Commercial Paper LLC
07-16-10 0.500 4,995,833 4,995,833
Windmill Funding Corp.
09-20-10 0.551 4,992,819 4,992,819
---------------
Total 44,296,181
- -------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT (6.2%)
Banco Popular Caisse d'Epargne
09-24-10 0.670 4,991,454 4,991,454
Banque et Caisse d'Epargne de l'Etat
07-21-10 0.470 4,998,042 4,998,042
Barclays Bank PLC
08-31-10 0.447 5,000,000 5,000,000
BNP Paribas
10-15-10 0.420 5,000,000 5,000,000
Caisse des Depots
07-09-10 0.460 9,996,168 9,996,168
Clydesdale Bank PLC
07-09-10 0.400 10,000,000 10,000,000
Credit Agricole
10-12-10 0.420 14,000,000 14,000,000
Credit Industrial et Commercial
08-02-10 0.460 4,000,000 4,000,000
</Table>
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 11
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED
FOR SECURITIES ON LOAN (CONTINUED)
AMOUNT
EFFECTIVE PAYABLE AT
ISSUER YIELD MATURITY VALUE(a)
CERTIFICATES OF DEPOSIT (CONT.)
Credit Industrial et Commerical
08-18-10 0.680% $5,000,000 $5,000,000
Deutsche Bank AG
12-06-10 0.531 6,000,000 6,000,000
Dexia Bank SA
07-19-10 0.650 4,997,203 4,997,203
DnB NOR
07-01-10 0.240 15,000,000 15,000,000
DZ Bank AG
07-07-10 0.510 5,000,000 5,000,000
Erste Bank der Oesterreichischen Sparkassen AG
07-06-10 0.500 4,999,514 4,999,514
07-07-10 0.500 4,999,514 4,999,514
Landesbank Hessen Thuringen
07-01-10 0.300 15,000,000 15,000,000
Macquarie Bank Ltd.
07-06-10 0.450 9,999,125 9,999,125
National Bank of Canada
07-01-10 0.240 15,000,000 15,000,000
Nederlandse Waterschapsbank NV
07-13-10 0.485 4,995,895 4,995,895
Rabobank Group
10-27-10 0.397 8,000,000 8,000,000
Raiffeisen Zentralbank Oesterreich
07-06-10 0.520 9,998,989 9,998,989
Royal Bank of Scotland
08-16-10 0.540 5,000,000 5,000,000
Societe Generale
09-01-10 0.655 10,000,000 10,000,000
Unicredit BK AG
07-12-10 0.420 12,000,000 12,000,000
United Overseas Bank Ltd.
07-19-10 0.500 8,000,000 8,000,000
---------------
Total 201,975,904
- -------------------------------------------------------------------------------------
COMMERCIAL PAPER (0.3%)
Toyota Motor Credit Corp.
08-19-10 0.531 9,986,308 9,986,308
- -------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS (2.8%)(H)
Cantor Fitzgerald & Co.
dated 06-30-10, matures 07-01-10,
repurchase price
$10,000,025 0.090 10,000,000 10,000,000
Goldman Sachs & Co.
dated 06-30-10, matures 07-01-10,
repurchase price
$4,246,185 0.030 4,246,181 4,246,181
Mizuho Securities USA, Inc.
dated 06-30-10, matures 07-01-10,
repurchase price
$10,000,042 0.150 10,000,000 10,000,000
Morgan Stanley
dated 02-22-10, matures 07-30-10,
repurchase price
$40,014,333 0.430 40,000,000 40,000,000
Morgan Stanley
dated 02-23-10, matures 07-30-10,
repurchase price
$15,005,375 0.430 15,000,000 15,000,000
Morgan Stanley
dated 04-15-10, matures 07-30-10,
repurchase price
$15,004,500 0.360 15,000,000 15,000,000
---------------
Total 94,246,181
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $350,504,574) $350,504,574
- -------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $3,888,503,003)(j) $3,640,599,865
=====================================================================================
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by, and is the exclusive property of,
Morgan Stanley Capital International Inc. and Standard & Poor's, a division of
The McGraw-Hill Companies, Inc.
See accompanying Notes to Portfolio of Investments.
- --------------------------------------------------------------------------------
12 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At June 30, 2010, the
value of foreign securities, excluding short-term securities, represented
16.03% of net assets.
(d) At June 30, 2010, security was partially or fully on loan. See Note 7 to
the financial statements.
(e) Negligible market value.
(f) Identifies issues considered to be illiquid as to their marketability (see
Note 2 to the financial statements). The aggregate value of such securities
at June 30, 2010 was $3,943,525, representing 0.12% of net assets.
Information concerning such security holdings at June 30, 2010 was as
follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
----------------------------------------------------------------
Flashpoint Technology, Inc.
Convertible 09-10-99 $1,008,844
Miasole
Convertible 07-10-08 10,032,163
Silver Peak Systems, Inc.
Convertible 01-14-08 10,041,774
</Table>
(g) Investments representing 5% or more of the outstanding voting securities of
the issuer. Transactions with companies that are or were affiliates during
the six months ended June 30, 2010 are as follows:
<Table>
<Caption>
BEGINNING PURCHASE SALES ENDING DIVIDEND
ISSUER COST COST COST COST INCOME VALUE(A)
-----------------------------------------------------------------------------------------------------
Electronics
for
Imaging,
Inc. $115,098,517 $-- $232,769 $114,865,748 $-- $46,644,000
Mentor
Graphics
Corp. 73,338,974 5,599,708 14,299,344 64,639,338 -- 56,315,400
Open Text
Corp.* 131,362,445 21,397,525 63,001,528 89,758,442 -- 91,567,493
Parametric
Technolo-
gy Corp. 115,731,182 14,487,870 20,460,782 109,758,270 -- 130,048,276
Synopsys,
Inc. 274,666,837 -- -- 274,666,837 -- 231,451,869
-----------------------------------------------------------------------------------------------------
Total $710,197,955 $41,485,103 $97,994,423 $653,688,635 $-- $556,027,038
-----------------------------------------------------------------------------------------------------
</Table>
* Issuer was not an affiliate for the entire period ended June 30, 2010.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 13
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(h) The table below represents securities received as collateral for repurchase
agreements. This collateral, which is generally high quality short-term
obligations, is deposited with the Fund's custodian 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. The market value of securities held as collateral for repurchase
agreements is monitored on a daily basis to ensure the existence of the
proper level of collateral.
<Table>
<Caption>
CANTOR FITZGERALD & CO. (0.090%)
SECURITY DESCRIPTION VALUE (A)
-----------------------------------------------------------
Fannie Mae Discount Notes $12,160
Fannie Mae Interest Strip 125,774
Fannie Mae Pool 2,020,455
Fannie Mae Principal Strip 2,053
Fannie Mae REMICS 1,457,272
Federal Farm Credit Bank 638,254
Federal Home Loan Banks 877,662
Federal Home Loan Mortgage Corp 629,350
Federal National Mortgage Association 309,893
FHLMC Structured Pass Through Securities 296,090
Freddie Mac Discount Notes 45,687
Freddie Mac Gold Pool 157,067
Freddie Mac Non Gold Pool 617,861
Freddie Mac Reference REMIC 10,749
Freddie Mac REMICS 162,769
Freddie Mac Strips 174,244
Ginnie Mae I Pool 845,877
Ginnie Mae II Pool 702,535
GNMA Callable Pass Through Securities 13,617
Government National Mortgage Association 326,180
United States Treasury Inflation Indexed Bonds 74,398
United States Treasury Note/Bond 99,704
United States Treasury Strip Coupon 529,909
United States Treasury Strip Principal 70,440
-----------------------------------------------------------
Total market value of collateral securities $10,200,000
-----------------------------------------------------------
</Table>
<Table>
<Caption>
GOLDMAN SACHS & CO. (0.030%)
SECURITY DESCRIPTION VALUE (A)
----------------------------------------------------------
Fannie Mae Pool $757,788
Government National Mortgage Association 3,573,317
----------------------------------------------------------
Total market value of collateral securities $4,331,105
----------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
14 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
<Table>
<Caption>
MIZUHO SECURITIES USA, INC. (0.150%)
SECURITY DESCRIPTION VALUE (A)
-----------------------------------------------------------
Federal Farm Credit Bank $296,703
Federal Home Loan Bank Discount Notes 3,051,760
Federal Home Loan Banks 1,550,133
Federal Home Loan Mortgage Corp 263,856
Ginnie Mae II Pool 693,906
United States Treasury Note/Bond 4,343,643
-----------------------------------------------------------
Total market value of collateral securities $10,200,001
-----------------------------------------------------------
</Table>
<Table>
<Caption>
MORGAN STANLEY (0.430%)
SECURITY DESCRIPTION VALUE (A)
----------------------------------------------------------
Access Group Inc 804,312
American Express Credit Account Master Trust 696,216
Banc of America Large Loan Inc 501,385
Brazos Higher Education Authority 255,927
Capital Auto Receivables Asset Trust 470,063
Capital One Multi-Asset Execution Trust 264,055
Chase Issuance Trust 334,110
Citibank Credit Card Issuance Trust 1,734,809
Citigroup Commercial Mortgage Trust 989,353
Citigroup/Deutsche Bank Commercial Mortgage
Trust 691,849
College Loan Corp Trust 241,692
Commercial Mortgage Asset Trust 261,852
Commercial Mortgage Pass Through Certificates 998,862
Credit Suisse First Boston Mortgage
Securities Corp 616,173
Credit Suisse Mortgage Capital Certificates 1,497,738
Credit Suisse/Morgan Stanley Commercial
Mortgage Certificate 221,168
DFR Middle Market CLO Ltd 1,118,057
Discover Card Master Trust I 221,358
Education Funding Capital Trust I 328,323
Fannie Mae Whole Loan 491,511
First Union National Bank Commercial Mortgage 392,123
Ford Credit Auto Owner Trust 319,123
Granite Master Issuer PLC 643,087
GS Mortgage Securities Corp II 573,615
JP Morgan Chase Commercial Mortgage
Securities Corp 208,246
LB-UBS Commercial Mortgage Trust 236,315
Leafs CDO I Ltd 1,746,554
Marathon CLO Ltd 2,842,128
MBNA Credit Card Master Note Trust 1,818,179
Merrill Auto Trust Securitization 345,971
Merrill Lynch Floating Trust 284,224
Merrill Lynch Mortgage Trust 734,993
Merrill Lynch/Countrywide Commercial Mortgage
Trust 278,112
Morgan Stanley Capital I 1,511,877
</Table>
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 15
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
MORGAN STANLEY (0.430%) (CONT.)
SECURITY DESCRIPTION VALUE (A)
----------------------------------------------------------
Northstar Education Finance Inc 426,971
Saxon Asset Securities Trust 175,535
SLC Student Loan Trust 786,727
SLM Student Loan Trust 11,113,423
Structured Asset Mortgage Investments Inc 265,541
Wachovia Bank Commercial Mortgage Trust 3,658,761
WaMu Mortgage Pass Through Certificates 166,242
Wells Fargo Mortgage Backed Securities Trust 484,861
World Omni Auto Receivables Trust 234,123
----------------------------------------------------------
Total market value of collateral securities $41,985,544
----------------------------------------------------------
</Table>
<Table>
<Caption>
MORGAN STANLEY (0.430%)
SECURITY DESCRIPTION VALUE (A)
----------------------------------------------------------
Access Group Inc 301,617
American Express Credit Account Master Trust 261,081
Banc of America Large Loan Inc 188,020
Brazos Higher Education Authority 95,973
Capital Auto Receivables Asset Trust 176,274
Capital One Multi-Asset Execution Trust 99,021
Chase Issuance Trust 125,291
Citibank Credit Card Issuance Trust 650,553
Citigroup Commercial Mortgage Trust 371,007
Citigroup/Deutsche Bank Commercial Mortgage
Trust 259,443
College Loan Corp Trust 90,635
Commercial Mortgage Asset Trust 98,195
Commercial Mortgage Pass Through Certificates 374,573
Credit Suisse First Boston Mortgage
Securities Corp 231,065
Credit Suisse Mortgage Capital Certificates 561,652
Credit Suisse/Morgan Stanley Commercial
Mortgage Certificate 82,938
DFR Middle Market CLO Ltd 419,271
Discover Card Master Trust I 83,009
Education Funding Capital Trust I 123,121
Fannie Mae Whole Loan 184,317
First Union National Bank Commercial Mortgage 147,046
Ford Credit Auto Owner Trust 119,671
Granite Master Issuer PLC 241,157
GS Mortgage Securities Corp II 215,106
JP Morgan Chase Commercial Mortgage
Securities Corp 78,092
LB-UBS Commercial Mortgage Trust 88,618
Leafs CDO I Ltd 654,958
Marathon CLO Ltd 1,065,798
MBNA Credit Card Master Note Trust 681,817
Merrill Auto Trust Securitization 129,739
</Table>
- --------------------------------------------------------------------------------
16 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF
INVESTMENTS (CONTINUED)
<Table>
<Caption>
MORGAN STANLEY (0.430%) (CONT.)
SECURITY DESCRIPTION VALUE (A)
----------------------------------------------------------
Merrill Lynch Floating Trust 106,584
Merrill Lynch Mortgage Trust 275,622
Merrill Lynch/Countrywide Commercial Mortgage
Trust 104,292
Morgan Stanley Capital I 566,954
Northstar Education Finance Inc 160,114
Saxon Asset Securities Trust 65,825
SLC Student Loan Trust 295,023
SLM Student Loan Trust 4,167,534
Structured Asset Mortgage Investments Inc 99,578
Wachovia Bank Commercial Mortgage Trust 1,372,035
WaMu Mortgage Pass Through Certificates 62,341
Wells Fargo Mortgage Backed Securities Trust 181,823
World Omni Auto Receivables Trust 87,796
----------------------------------------------------------
Total market value of collateral securities $15,744,579
----------------------------------------------------------
</Table>
<Table>
<Caption>
MORGAN STANLEY (0.360%)
SECURITY DESCRIPTION VALUE (A)
-----------------------------------------------------------
Allied Irish Banks $1,212,770
Amstel Funding Corp 1,874,742
Atlantic Asset Securitization LLC 331,076
Autobahn Funding Company 347,137
Compass Sec LLC 446,000
Ebury Finance Ltd 1,848,317
LMA LMA Americas 1,044,410
Nationwide Building Society 1,061,832
NRW Bank 1,728,063
Romulus Funding Corp 232,368
Scaldis & Scaldis 1,285,963
Scaldis Capital Ltd/LLC 749,547
Silver Tower US Fund 2,107,433
Surrey Funding Corp 705,038
White Point Funding Inc 775,304
-----------------------------------------------------------
Total market value of collateral securities $15,750,000
-----------------------------------------------------------
</Table>
(i) Affiliated Money Market Fund -- See Note 8 to the financial statements. The
rate shown is the seven-day current annualized yield at June 30, 2010.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 17
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS (CONTINUED)
(j) At June 30, 2010, the cost of securities for federal income tax purposes
was approximately $3,888,503,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
<Table>
Unrealized appreciation $194,695,000
Unrealized depreciation (442,598,000)
------------------------------------------------------------
Net unrealized depreciation $(247,903,000)
------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
18 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS
Generally accepted accounting principles (GAAP) require disclosure regarding the
inputs and valuation techniques used to measure fair value and any changes in
valuation inputs or techniques. In addition, investments shall be disclosed by
major category.
The Fund categorizes its fair value measurements according to a three-level
hierarchy that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. The input levels are not necessarily an
indication of the risk or liquidity associated with investments at that level.
For example, certain U.S. government securities are generally high quality and
liquid, however, they are reflected as Level 2 because the inputs used to
determine fair value may not always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- 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).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the New York Stock Exchange (NYSE) or require adjustment, as described
in Note 2 to the financial statements -- Valuation of securities.
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
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 19
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
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
rely on one or more significant unobservable inputs and/or significant
assumptions by the Fund Administrator. Inputs used in a valuation model may
include, but are not limited to, financial statement analysis, discount rates
and estimated cash flows, and comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of June 30, 2010:
<Table>
<Caption>
FAIR VALUE AT JUNE 30, 2010
------------------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION(A) IDENTICAL ASSETS INPUTS(b) INPUTS TOTAL
- ----------------------------------------------------------------------------------------------
Equity Securities
Common Stocks
IT Services $260,168,571 $10,477,478 $-- $270,646,049
Software 1,301,028,810 6,560,744 -- 1,307,589,554
All Other Industries 1,645,411,664 -- -- 1,645,411,664
Preferred Stocks --
Computers &
Peripherals -- -- 2,332,285 2,332,285
Independent Power
Producers & Energy
Traders -- -- 1,611,240 1,611,240
- ----------------------------------------------------------------------------------------------
Total Equity Securities 3,206,609,045 17,038,222 3,943,525 3,227,590,792
- ----------------------------------------------------------------------------------------------
Other
Affiliated Money
Market Fund(c) 62,504,499 -- -- 62,504,499
Investments of Cash
Collateral Received
for Securities on
Loan -- 350,504,574 -- 350,504,574
- ----------------------------------------------------------------------------------------------
Total Other 62,504,499 350,504,574 -- 413,009,073
- ----------------------------------------------------------------------------------------------
Total $3,269,113,544 $367,542,796 $3,943,525 $3,640,599,865
- ----------------------------------------------------------------------------------------------
</Table>
(a) See the Portfolio of Investments for all investment classifications not
indicated in the table.
(b) Includes certain securities trading outside the U.S. whose values were
adjusted as a result of significant market movements following the close of
local trading. Therefore, these investment securities were classified as
Level 2 instead of Level 1. The amount of securities transferred out of
Level 1 into Level 2 during the period was $7,641,928.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at June 30, 2010.
- --------------------------------------------------------------------------------
20 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
The following table is a reconciliation of Level 3 assets for which significant
unobservable inputs were used to determine fair value.
<Table>
<Caption>
PREFERRED STOCKS
- --------------------------------------------------------------------
Balance as of Dec. 31, 2009 $3,812,499
Accrued discounts/premiums --
Realized gain (loss) --
Change in unrealized appreciation
(depreciation)* 131,026
Net purchases (sales) --
Transfers in and/or out of Level 3 --
- --------------------------------------------------------------------
Balance as of June 30, 2010 $3,943,525
- --------------------------------------------------------------------
</Table>
* Change in unrealized appreciation (depreciation) relating to securities
held at June 30, 2010 was $131,026.
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 800.SEC.0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling 800.221.2450.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 21
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JUNE 30, 2010 (UNAUDITED)
<Table>
<Caption>
ASSETS
Investments in securities, at value
Unaffiliated issuers* (identified cost $2,821,805,295) $2,671,563,754
Affiliated money market fund (identified cost $62,504,499) 62,504,499
Investments of cash collateral received for securities on loan
(identified cost $350,504,574) 350,504,574
Other affiliated issuers (identified cost $653,688,635) 556,027,038
- ---------------------------------------------------------------------------------
Total investments in securities (identified cost $3,888,503,003) 3,640,599,865
Cash 4
Capital shares receivable 5,031,594
Dividends and accrued interest receivable 1,233,822
Receivable for investment securities sold 30,975,747
- ---------------------------------------------------------------------------------
Total assets 3,677,841,032
- ---------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 6,769,275
Payable for investment securities purchased 3,424,973
Payable upon return of securities loaned 350,504,574
Accrued investment management services fees 78,450
Accrued distribution fees 1,530,040
Accrued transfer agency fees 20,152
Accrued administrative services fees 4,711
Accrued plan administration services fees 16,243
Other accrued expenses 2,304,387
- ---------------------------------------------------------------------------------
Total liabilities 364,652,805
- ---------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $3,313,188,227
- ---------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.10 par value $ 9,784,164
Additional paid-in capital 3,622,938,716
Accumulated net investment loss (16,111,314)
Accumulated net realized gain (loss) (55,520,201)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (247,903,138)
- ---------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding
capital stock $3,313,188,227
- ---------------------------------------------------------------------------------
*Value of securities on loan $ 333,097,221
- ---------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
22 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
NET ASSET VALUE PER SHARE
NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE
Class A $2,505,839,332 71,004,532 $35.29(1)
Class B $ 81,143,280 2,760,428 $29.40
Class C $ 626,804,720 21,309,947 $29.41
Class I $ 47,814,043 1,301,640 $36.73
Class R2 $ 35,852,103 1,036,447 $34.59
Class R3 $ 74,947 2,161 $34.68
Class R4 $ 96,423 2,632 $36.63
Class R5 $ 15,563,379 423,853 $36.72
- --------------------------------------------------------------------------------
</Table>
(1) The maximum offering price per share for Class A is $37.44. The offering
price is calculated by dividing the net asset value by 1.0 minus the maximum
sales charge of 5.75%.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 23
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2010 (UNAUDITED)
<Table>
<Caption>
INVESTMENT INCOME
Income:
Dividends $ 10,831,940
Interest 128,983
Income distributions from affiliated money market fund 170,205
Income from securities lending -- net 399,947
Foreign taxes withheld (7,665)
- --------------------------------------------------------------------------------
Total income 11,523,410
- --------------------------------------------------------------------------------
Expenses:
Investment management services fees 15,477,153
Distribution fees
Class A 3,448,869
Class B 487,754
Class C 3,435,500
Class R2 94,542
Class R3 27
Transfer agency fees
Class A 2,283,714
Class B 85,669
Class C 583,269
Class R2 10,778
Class R3 6
Class R4 15
Class R5 4,788
Administrative services fees 914,727
Plan administration services fees
Class R2 47,271
Class R3 27
Class R4 62
Compensation of board members 58,944
Custodian fees 37,750
Printing and postage 84,500
Registration fees 108,282
Professional fees 57,460
Other 340,874
- --------------------------------------------------------------------------------
Total net expenses 27,561,981
- --------------------------------------------------------------------------------
Investment income (loss) -- net (16,038,571)
- --------------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
24 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions $ 160,050,420
Security transactions -- affiliated issuers 14,533,242
Foreign currency transactions (468,052)
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments 174,115,610
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies (494,190,862)
- --------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (320,075,252)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $(336,113,823)
- --------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 25
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2010 DEC. 31, 2009
(UNAUDITED)
OPERATIONS
Investment income (loss) -- net $ (16,038,571) $ (39,028,308)
Net realized gain (loss) on investments 174,115,610 (51,544,929)
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies (494,190,862) 1,412,780,368
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (336,113,823) 1,322,207,131
- ---------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from sales
Class A shares 245,996,641 513,854,272
Class B shares 5,511,737 12,141,432
Class C shares 51,675,648 81,075,171
Class I shares 14,630,371 35,623,554
Class R2 shares 10,599,345 16,237,775
Class R3 shares 83,469 15,000
Class R4 shares 120,280 6,627
Class R5 shares 5,294,003 7,161,434
Conversions from Class B to Class A
Class A shares 9,742,773 20,508,952
Class B shares (9,742,773) (20,508,952)
Payments for redemptions
Class A shares (287,577,950) (391,795,379)
Class B shares (12,573,168) (25,038,254)
Class C shares (54,640,620) (89,519,549)
Class I shares (1,170,826) (478,828)
Class R2 shares (8,088,956) (11,225,467)
Class R3 shares (18,617) --
Class R4 shares (19,657) --
Class R5 shares (3,043,221) (19,961,642)
- ---------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (33,221,521) 128,096,146
- ---------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements (Note 10) 757,126 7,971,302
- ---------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (368,578,218) 1,458,274,579
Net assets at beginning of period 3,681,766,445 2,223,491,866
- ---------------------------------------------------------------------------------------------------
Net assets at end of period $3,313,188,227 $3,681,766,445
- ---------------------------------------------------------------------------------------------------
Accumulated net investment loss $ (16,111,314) $ (72,743)
- ---------------------------------------------------------------------------------------------------
</Table>
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
26 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
The following tables are intended to help you understand the Fund's financial
performance. Certain information reflects financial results for a single share
of a class held for the periods shown. Per share net investment income (loss)
amounts are calculated based on average shares outstanding during the period.
Total returns assume reinvestment of all dividends and distributions. Total
returns do not reflect payment of sales charges, if any, and are not annualized
for periods of less than one year.
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED DEC. 31,
CLASS A JUNE 30, 2010 -------------------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006 2005
Net asset value, beginning of period $38.78 $24.25 $38.20 $33.24 $27.29 $25.42
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.14) (.37) (.36) (.32) (.27) (.29)
Net gains (losses) (both realized and
unrealized) (3.36) 14.81 (13.59) 5.28 6.22 2.16
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.50) 14.44 (13.95) 4.96 5.95 1.87
- --------------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .09 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $35.29 $38.78 $24.25 $38.20 $33.24 $27.29
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (9.00%)(a) 59.92%(b) (36.52%) 14.92% 21.80% 7.36%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(C)
Gross expenses prior to expense
waiver/reimbursement 1.35%(d) 1.61% 1.52% 1.46% 1.51% 1.58%
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.35%(d) 1.61% 1.52% 1.46% 1.49% 1.53%
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.72%)(d) (1.18%) (1.12%) (.89%) (.88%) (1.16%)
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $2,506 $2,789 $1,642 $2,907 $2,613 $2,262
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150% 133% 206% 187% 136%
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 27
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED DEC. 31,
CLASS B JUNE 30, 2010 -------------------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006 2005
Net asset value, beginning of period $32.42 $20.43 $32.42 $28.42 $23.51 $22.08
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.24) (.51) (.52) (.50) (.42) (.42)
Net gains (losses) (both realized and
unrealized) (2.79) 12.42 (11.47) 4.50 5.33 1.85
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.03) 11.91 (11.99) 4.00 4.91 1.43
- --------------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .08 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.40 $32.42 $20.43 $32.42 $28.42 $23.51
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (9.32%)(a) 58.69%(b) (36.98%) 14.07% 20.88% 6.48%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(C)
Gross expenses prior to expense
waiver/reimbursement 2.11%(d) 2.39% 2.27% 2.21% 2.26% 2.33%
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.11%(d) 2.39% 2.27% 2.21% 2.24% 2.28%
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.49%)(d) (1.97%) (1.87%) (1.64%) (1.63%) (1.91%)
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $81 $107 $94 $269 $365 $484
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150% 133% 206% 187% 136%
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
28 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED DEC. 31,
CLASS C JUNE 30, 2010 -------------------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006 2005
Net asset value, beginning of period $32.44 $20.44 $32.43 $28.44 $23.52 $22.08
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.24) (.51) (.50) (.50) (.42) (.42)
Net gains (losses) (both realized and
unrealized) (2.80) 12.43 (11.49) 4.49 5.34 1.86
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.04) 11.92 (11.99) 3.99 4.92 1.44
- --------------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .08 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $29.41 $32.44 $20.44 $32.43 $28.44 $23.52
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (9.34%)(a) 58.71%(b) (36.97%) 14.03% 20.92% 6.52%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 2.11%(d) 2.36% 2.27% 2.21% 2.26% 2.33%
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 2.11%(d) 2.36% 2.27% 2.21% 2.24% 2.28%
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.48%)(d) (1.94%) (1.87%) (1.64%) (1.63%) (1.91%)
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $627 $695 $447 $268 $213 $178
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150% 133% 206% 187% 136%
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SIX MONTHS ENDED
CLASS I JUNE 30, 2010 YEAR ENDED DEC. 31,
PER SHARE DATA (UNAUDITED) 2009(f)
Net asset value, beginning of period $40.29 $34.44
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.05) (.08)
Net gains (losses) (both realized and
unrealized) (3.52) 5.93
- --------------------------------------------------------------------------------------------
Total from investment operations (3.57) 5.85
- --------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $36.73 $40.29
- --------------------------------------------------------------------------------------------
TOTAL RETURN (8.84%)(a) 16.99%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Total expenses .94%(d) 1.00%(d)
- --------------------------------------------------------------------------------------------
Net investment income (loss) (.27%)(d) (.50%)(d)
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $48 $40
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150%
- --------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 29
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED DEC. 31,
CLASS R2 JUNE 30, 2010 -------------------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006 2005
Net asset value, beginning of period $38.09 $23.89 $37.73 $32.92 $27.09 $25.29
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.21) (.46) (.43) (.41) (.34) (.36)
Net gains (losses) (both realized and
unrealized) (3.30) 14.57 (13.41) 5.22 6.17 2.16
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.51) 14.11 (13.84) 4.81 5.83 1.80
- --------------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .09 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $34.59 $38.09 $23.89 $37.73 $32.92 $27.09
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (9.19%)(a) 59.44%(b) (36.68%) 14.61% 21.52% 7.12%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(C)
Gross expenses prior to expense
waiver/reimbursement 1.75%(d) 1.93% 1.77% 1.71% 1.76% 1.83%
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.75%(d) 1.93% 1.77% 1.71% 1.74% 1.78%
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.11%)(d) (1.50%) (1.37%) (1.14%) (1.13%) (1.41%)
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $36 $37 $20 $25 $12 $6
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150% 133% 206% 187% 136%
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SIX MONTHS ENDED
CLASS R3 JUNE 30, 2010 YEAR ENDED DEC. 31,
PER SHARE DATA (UNAUDITED) 2009(f)
Net asset value, beginning of period $38.13 $32.67
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.15) (.16)
Net gains (losses) (both realized and
unrealized) (3.31) 5.62
- --------------------------------------------------------------------------------------------
Total from investment operations (3.46) 5.46
- --------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $34.68 $38.13
- --------------------------------------------------------------------------------------------
TOTAL RETURN (9.05%)(a) 16.71%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(C)
Total expenses 1.51%(d) 1.54%(d)
- --------------------------------------------------------------------------------------------
Net investment income (loss) (.80%)(d) (1.08%)(d)
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150%
- --------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
30 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED
CLASS R4 JUNE 30, 2010 YEAR ENDED DEC. 31,
PER SHARE DATA (UNAUDITED) 2009(f)
Net asset value, beginning of period $40.24 $34.44
- --------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.09) (.12)
Net gains (losses) (both realized and
unrealized) (3.53) 5.92
- --------------------------------------------------------------------------------------------
Total from investment operations (3.62) 5.80
- --------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 --
- --------------------------------------------------------------------------------------------
Net asset value, end of period $36.63 $40.24
- --------------------------------------------------------------------------------------------
TOTAL RETURN (8.97%)(a) 16.84%
- --------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(C)
Total expenses 1.26%(d) 1.28%(d)
- --------------------------------------------------------------------------------------------
Net investment income (loss) (.45%)(d) (.76%)(d)
- --------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $--
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150%
- --------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED DEC. 31,
CLASS R5 JUNE 30, 2010 -------------------------------------------------------
PER SHARE DATA (UNAUDITED) 2009 2008 2007 2006 2005
Net asset value, beginning of period $40.28 $25.08 $39.32 $34.07 $27.83 $25.81
- --------------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.07) (.27) (.21) (.17) (.13) (.17)
Net gains (losses) (both realized and
unrealized) (3.50) 15.38 (14.03) 5.42 6.37 2.19
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (3.57) 15.11 (14.24) 5.25 6.24 2.02
- --------------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlements .01 .09 -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $36.72 $40.28 $25.08 $39.32 $34.07 $27.83
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (8.84%)(a) 60.60%(b) (36.22%) 15.41% 22.42% 7.83%
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(c)
Gross expenses prior to expense
waiver/reimbursement 1.00%(d) 1.27% 1.04% 1.01% 1.04% 1.08%
- --------------------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) 1.00%(d) 1.27% 1.04% 1.01% 1.02% 1.03%
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.36%)(d) (.87%) (.64%) (.44%) (.41%) (.66%)
- --------------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $16 $15 $20 $33 $24 $18
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 59% 150% 133% 206% 187% 136%
- --------------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 31
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
(a) During the six months ended June 30, 2010, the Fund received proceeds from a
regulatory settlement. Had the Fund not received these proceeds, the total
return would have been lower by 0.02%.
(b) During the year ended Dec. 31, 2009, the Fund received proceeds from
regulatory settlements. Had the Fund not received these proceeds, the total
return would have been lower by 0.36%.
(c) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
reported expense ratios.
(d) Annualized.
(e) The Investment Manager and its affiliates agreed to waive/reimburse certain
fees and expenses (excluding fees and expenses of acquired funds).
(f) For the period from Aug. 3, 2009 (when shares became publicly available) to
Dec. 31, 2009.
The accompanying Notes to Financial Statements are an integral part of this
statement.
- --------------------------------------------------------------------------------
32 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS --------------------------------------------------
(UNAUDITED AS OF JUNE 30, 2010)
1. ORGANIZATION
Seligman Communications and Information Fund, Inc. (the Fund) is registered
under the Investment Company Act of 1940, as amended (the 1940 Act), as a
diversified, open-end management investment company and has one billion
authorized shares of capital stock. The Fund invests at least 80% of its net
assets in the securities of companies operating in the communications,
information and related industries.
The Fund offers Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4
and Class R5 shares.
- - Class A shares are offered with a front-end sales charge, which may be waived
under certain circumstances.
- - Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares one month after the completion of
the eighth year of ownership if originally purchased in a RiverSource fund on
or after May 21, 2005 or originally purchased in a Seligman fund on or after
June 13, 2009. Class B shares originally purchased in a RiverSource fund
prior to May 21, 2005 will convert to Class A shares in the ninth calendar
year of ownership. Class B shares originally purchased in a Seligman fund
prior to June 13, 2009 will convert to Class A shares in the month prior to
the ninth year of ownership. Effective Sept. 7, 2010, the Fund will not
accept investments from new or existing investors in the Fund's Class B
shares, except that (i) dividend and/or capital gain distributions may
continue to be reinvested in Class B shares of the Fund and (ii) shareholders
invested in Class B shares of the Fund may exchange those shares for Class B
shares of other Columbia, Columbia Acorn, RiverSource, Seligman and
Threadneedle funds offering such shares.
- - Class C shares may be subject to a CDSC.
- - Class I, Class R2, Class R3, Class R4, and Class R5 shares are offered
without a front-end sales charge or CDSC to qualifying institutional
investors.
At June 30, 2010, Columbia Management Investment Advisers, LLC (formerly known
as RiverSource Investments, LLC) (the Investment Manager) and affiliated funds-
of-funds owned 100% of Class I shares.
All classes of shares have identical voting, dividend and liquidation rights.
Class specific expenses (e.g., distribution and service fees, transfer agency
fees, plan administration services fees) differ among classes. Income, expenses
(other than class specific expenses) and realized and unrealized gains or losses
on
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 33
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
investments are allocated to each class of shares based upon its relative net
assets.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the New York Stock
Exchange (NYSE). Securities traded on national securities exchanges or included
in national market systems are valued at the last quoted sales price from the
primary exchange. Debt securities are generally traded in the over-the-counter
market and are valued by an independent pricing service using an evaluated bid.
When market quotes are not readily available, the pricing service, in
determining fair values of debt securities, takes into consideration such
factors as current quotations by broker/dealers, coupon, maturity, quality, type
of issue, trading characteristics, and other yield and risk factors it deems
relevant in determining valuations. Foreign securities are valued based on
quotations from the principal market in which such securities are normally
traded. The procedures adopted by the Fund's Board of Directors (the Board)
generally contemplate the use of fair valuation in the event that price
quotations or valuations are not readily available, price quotations or
valuations from other sources are not reflective of market value and thus deemed
unreliable, or a significant event has occurred in relation to a security or
class of securities (such as foreign securities) that is not reflected in price
quotations or valuations from other sources. A fair value price is a good faith
estimate of the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of the
Investment Manager, as administrator to the Fund, will fair value foreign
securities pursuant to procedures adopted by the Board, including utilizing a
third party pricing service to determine these fair values. These procedures
take into account multiple factors, including movements in the U.S. securities
markets, to determine a good faith estimate that reasonably reflects the current
market
- --------------------------------------------------------------------------------
34 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
conditions as of the close of the NYSE. The fair value of a security is likely
to be different from the quoted or published price, if available.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61st day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding taxes.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements. Generally, securities received as
collateral subject to repurchase agreements are deposited with the Fund's
custodian 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. The market value of securities held as collateral
for repurchase agreements is monitored on a daily basis to ensure the existence
of the proper level of collateral.
ILLIQUID SECURITIES
At June 30, 2010, investments in securities included issues that are illiquid
which the Fund currently limits to 15% of net assets, at market value, at the
time of purchase. The aggregate value of such securities at June 30, 2010 was
$3,943,525 representing 0.12% of net assets. Certain illiquid securities may be
valued, in good faith, by management at fair value according to procedures
approved by the Board. According to Board guidelines, certain unregistered
securities are determined to be liquid and are not included within the 15%
limitation specified above. Assets are liquid if they can be sold or disposed of
in the ordinary course
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 35
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
of business within seven days at approximately the value at which the asset is
valued by the Fund.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
shareholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all tax returns filed for the last three years.
FOREIGN CAPITAL GAINS TAXES
Realized gains in certain countries may be subject to foreign taxes at the fund
level, at rates ranging from approximately 10% to 15%. The Fund pays such
foreign taxes on net realized gains at the appropriate rate for each
jurisdiction.
DIVIDENDS TO SHAREHOLDERS
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the income dividend.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
3. INVESTMENTS IN DERIVATIVES
The Fund may invest in certain derivative instruments, which are transactions
whose values depend on or are derived from (in whole or in part) the value of
- --------------------------------------------------------------------------------
36 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
one or more other assets, such as securities, currencies, commodities or
indices. Such derivative instruments may be used to maintain cash reserves while
maintaining exposure to certain other assets, to offset anticipated declines in
values of investments, to facilitate trading, to reduce transaction costs, and
to pursue higher investment returns. The Fund may also use derivative
instruments to mitigate certain investment risks, such as foreign currency
exchange rate risk, interest rate risk, and credit risk. Investments in
derivative instruments may expose the Fund to certain additional risks,
including those detailed below.
FORWARD FOREIGN CURRENCY CONTRACTS
The Fund may enter into forward foreign currency contracts in connection with
settling purchases or sales of securities, to hedge the currency exposure
associated with some or all of the Fund's securities or as part of its
investment strategy. A forward foreign currency contract is an agreement between
two parties to buy and sell a currency at a set price on a future date. The
market value of a forward foreign currency contract fluctuates with changes in
foreign currency exchange rates. Forward foreign currency contracts are marked
to market daily based upon foreign currency exchange rates from an independent
pricing service and the change in value is recorded as unrealized appreciation
or depreciation. The Fund will record a realized gain or loss when the forward
foreign currency contract is closed.
The risks of forward foreign currency contracts include movement in the values
of the foreign currencies relative to the U.S. dollar (or other foreign
currencies) and the possibility that the counterparty will not complete its
contractual obligation, which may be in excess of the amount, if any, reflected
in the Statement of Assets and Liabilities. At June 30, 2010, the Fund had no
outstanding forward foreign currency contracts.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the Statement of Assets and Liabilities; the impact of derivative
transactions on the Fund's operations over the period including realized gains
or losses and unrealized gains or losses. The derivative schedules following the
Portfolio of Investments present additional information regarding derivative
instruments outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT JUNE 30, 2010
At June 30, 2010, the Fund had no outstanding derivatives.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 37
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS FOR THE SIX
MONTHS ENDED JUNE 30, 2010
<Table>
<Caption>
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
- -------------------------------------------------------------------
FORWARD
FOREIGN
CURRENCY
RISK EXPOSURE CATEGORY CONTRACTS
- -------------------------------------------------------------------
Foreign exchange contracts $(147,553)
- -------------------------------------------------------------------
</Table>
<Table>
<Caption>
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES
RECOGNIZED IN INCOME
- --------------------------------------------------------------------
FORWARD
FOREIGN
CURRENCY
RISK EXPOSURE CATEGORY CONTRACTS
- --------------------------------------------------------------------
Foreign exchange contracts $--
- --------------------------------------------------------------------
</Table>
VOLUME OF DERIVATIVE ACTIVITY
FORWARD FOREIGN CURRENCY CONTRACTS
At June 30, 2010, the Fund had no outstanding forward foreign currency
contracts. The average gross notional amount of forward foreign currency
contracts opened, and subsequently closed, was $3.9 million for the six months
ended June 30, 2010.
4. EXPENSES AND SALES CHARGES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager
determines which securities will be purchased, held or sold. The management fee
is an annual fee that is equal to a percentage of the Fund's average daily net
assets that declines from 0.855% to 0.725% as the Fund's net assets increase.
The management fee for the six months ended June 30, 2010 was 0.85% of the
Fund's average daily net assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, the Fund pays Ameriprise Financial
an annual fee for administration and accounting services equal to a percentage
of the Fund's average daily net assets that declines from 0.06% to 0.03% as the
Fund's net assets increase. The fee for the six months ended June 30, 2010 was
0.05% of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
38 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended June
30, 2010, other expenses paid to this company were $1,570.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan (the Plan), the board members who are not
"interested persons" of the Fund under the 1940 Act may defer receipt of their
compensation. Deferred amounts are treated as though equivalent dollar amounts
had been invested in shares of the Fund or other RiverSource, Seligman and
Threadneedle funds. The Fund's liability for these amounts is adjusted for
market value changes and remains in the funds until distributed in accordance
with the Plan.
TRANSFER AGENCY FEES
Under a Transfer Agency Agreement, Columbia Management Investment Services Corp.
(formerly known as RiverSource Service Corporation) (the Transfer Agent)
maintains Fund shareholder accounts and records and provides Fund shareholder
services. The Fund pays the Transfer Agent an annual account-based fee at a rate
equal to $19.50 for Class A, $20.50 for Class B and $20.00 for Class C for this
service. The Transfer Agent also charges an annual fee of $3 per account
serviced directly by the Fund or its designated agent for Class A, Class B and
Class C shares. The Fund also pays the Transfer Agent an annual asset-based fee
at a rate of 0.05% of the Fund's average daily net assets attributable to Class
R2, Class R3, Class R4 and Class R5 shares. The Transfer Agent charges an annual
fee of $5 per inactive account, charged on a pro rata basis for the 12 month
period from the date the account becomes inactive. The Transfer Agent also
receives reimbursement for certain out-of-pocket expenses. These fees are
included in the transfer agency fees in the Statement of Operations.
The Fund and certain other associated investment companies (together, the
Guarantors) have severally but not jointly, guaranteed the performance and
observance of all the terms and conditions of a lease entered into by Seligman
Data Corp. (SDC), the former transfer agent, including the payment of rent by
SDC (the Guaranty). The lease and the Guaranty expire in January 2019. At June
30, 2010, the Fund's total potential future obligation over the life of the
Guaranty is $3,871,769. The liability remaining at June 30, 2010 for Non-
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 39
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
Recurring Charges amounted to $1,981,078 and is included within other accrued
expenses in the Statement of Assets and Liabilities.
PLAN ADMINISTRATION SERVICES FEES
Under a Plan Administration Services Agreement with the Transfer Agent, the Fund
pays an annual fee at a rate of 0.25% of the Fund's average daily net assets
attributable to Class R2, Class R3 and Class R4 shares for the provision of
various administrative, recordkeeping, communication and educational services.
DISTRIBUTION FEES
The Fund has an agreement with Columbia Management Investment Distributors, Inc.
(formerly known as RiverSource Fund Distributors, Inc.) (the Distributor) for
distribution and shareholder services. Under a Plan and Agreement of
Distribution pursuant to Rule 12b-1, the Fund pays a fee at an annual rate of up
to 0.25% of the Fund's average daily net assets attributable to Class A and
Class R3 shares, a fee at an annual rate of up to 0.50% of the Fund's average
daily net assets attributable to Class R2 shares and a fee at an annual rate of
up to 1.00% of the Fund's average daily net assets attributable to Class B and
Class C shares. For Class B and Class C shares, of the 1.00% fee, up to 0.75%
was reimbursed for distribution expenses.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed (unreimbursed expense) was approximately $982,000 and $20,436,000 for
Class B and Class C shares, respectively. These amounts are based on the most
recent information available as of April 30, 2010, and may be recovered from
future payments under the distribution plan or CDSC. To the extent the
unreimbursed expense has been fully recovered, the distribution fee is reduced.
SALES CHARGES
Sales charges, including front-end and CDSCs, received by the Distributor for
distributing Fund shares were $1,858,534 for Class A, $82,839 for Class B and
$36,204 for Class C for the six months ended June 30, 2010.
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $2,097,646,206 and $2,033,958,221, respectively, for the
six months ended June 30, 2010. Realized gains and losses are determined on an
identified cost basis.
- --------------------------------------------------------------------------------
40 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated were as
follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2010 DEC. 31, 2009(a)
- ------------------------------------------------------------------------
CLASS A
Sold 6,318,857 16,217,513
Converted from Class B(b) 255,206 687,488
Redeemed (7,477,836) (12,729,267)
- ------------------------------------------------------------------------
Net increase (decrease) (903,773) 4,175,734
- ------------------------------------------------------------------------
CLASS B
Sold 169,817 463,755
Converted to Class A(b) (305,834) (812,029)
Redeemed (392,578) (968,789)
- ------------------------------------------------------------------------
Net increase (decrease) (528,595) (1,317,063)
- ------------------------------------------------------------------------
CLASS C
Sold 1,584,633 3,054,623
Redeemed (1,692,912) (3,514,832)
- ------------------------------------------------------------------------
Net increase (decrease) (108,279) (460,209)
- ------------------------------------------------------------------------
CLASS I
Sold 350,131 993,229
Redeemed (29,179) (12,541)
- ------------------------------------------------------------------------
Net increase (decrease) 320,952 980,688
- ------------------------------------------------------------------------
CLASS R2
Sold 278,431 521,139
Redeemed (213,785) (373,741)
- ------------------------------------------------------------------------
Net increase (decrease) 64,646 147,398
- ------------------------------------------------------------------------
CLASS R3
Sold 2,224 431
Redeemed (494) --
- ------------------------------------------------------------------------
Net increase (decrease) 1,730 431
- ------------------------------------------------------------------------
CLASS R4
Sold 2,916 188
Redeemed (472) --
- ------------------------------------------------------------------------
Net increase (decrease) 2,444 188
- ------------------------------------------------------------------------
</Table>
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 41
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2010 DEC. 31, 2009(a)
- ------------------------------------------------------------------------
CLASS R5
Sold 130,479 231,418
Redeemed (75,392) (666,534)
- ------------------------------------------------------------------------
Net increase (decrease) 55,087 (435,116)
- ------------------------------------------------------------------------
</Table>
(a) Class I, Class R3 and Class R4 shares are for the period from Aug. 3, 2009
(when shares became publicly available) to Dec. 31, 2009.
(b) Automatic conversion of Class B shares to Class A shares based on the
original purchase date.
7. LENDING OF PORTFOLIO SECURITIES
The Fund has entered into a Master Securities Lending Agreement (the Agreement)
with JPMorgan Chase Bank, National Association (JPMorgan). The Agreement
authorizes JPMorgan as lending agent to lend securities to authorized borrowers
in order to generate additional income on behalf of the Fund. Pursuant to the
Agreement, the securities loaned are secured by cash or U.S. government
securities equal to at least 100% of the market value of the loaned securities.
Any additional collateral required to maintain those levels due to market
fluctuations of the loaned securities is delivered the following business day.
Cash collateral received is invested by the lending agent on behalf of the Fund
into authorized investments pursuant to the Agreement. The investments made with
the cash collateral are listed in the Portfolio of Investments. The values of
such investments and any uninvested cash collateral are disclosed in the
Statement of Assets and Liabilities along with the related obligation to return
the collateral upon the return of the securities loaned. At June 30, 2010,
securities valued at $333,097,221 were on loan, secured by cash collateral of
$350,504,574 invested in short-term securities or in cash equivalents.
Risks of delay in recovery of securities or even loss of rights in the
securities may occur should the borrower of the securities fail financially.
Risks may also arise to the extent that the value of the securities loaned
increases above the value of the collateral received. JPMorgan will indemnify
the Fund from losses resulting from a borrower's failure to return a loaned
security when due. Such indemnification does not extend to losses associated
with declines in the value of cash collateral investments. Loans are subject to
termination by the Fund or the borrower at any time, and are, therefore, not
considered to be illiquid investments.
Pursuant to the Agreement, the Fund receives income for lending its securities
either in the form of fees or by earning interest on invested cash collateral,
net of negotiated rebates paid to borrowers and fees paid to the lending agent
for
- --------------------------------------------------------------------------------
42 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
services provided and any other securities lending expenses. Net income of
$399,947 earned from securities lending for the six months ended June 30, 2010
is included in the Statement of Operations. The Fund also continues to earn
interest and dividends on the securities loaned.
8. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of RiverSource, Seligman
and Threadneedle funds and other institutional clients of the Investment
Manager. The cost of the Fund's purchases from sales of shares of RiverSource
Short-Term Cash Fund aggregated $999,529,161 and $1,157,358,468, respectively,
for the six months ended June 30, 2010. The income distributions received with
respect to the Fund's investment in RiverSource Short-Term Cash Fund can be
found in the Statement of Operations and the Fund's invested balance in
RiverSource Short-Term Cash Fund at June 30, 2010, can be found in the Portfolio
of Investments.
9. BANK BORROWINGS
The Fund has entered into a revolving credit facility with a syndicate of banks
led by JPMorgan Chase Bank, N.A. (the Administrative Agent), whereby the Fund
may borrow for the temporary funding of shareholder redemptions or for other
temporary or emergency purposes. The credit facility agreement, which is a
collective agreement between the Fund and certain other RiverSource, Seligman
and Threadneedle funds, severally and not jointly, permits collective borrowings
up to $300 million. The borrowers shall have the right, upon written notice to
the Administrative Agent to request an increase of up to $200 million in the
aggregate amount of the credit facility from new or existing lenders, provided
that the aggregate amount of the credit facility shall at no time exceed $500
million. Participation in such increase by any existing lender shall be at such
lender's sole discretion. Interest is charged to each Fund based on its
borrowings at a rate equal to the sum of the federal funds rate plus (i) 1.25%
per annum plus (ii) if one-month LIBOR exceeds the federal funds rate, the
amount of such excess. Each borrowing under the credit facility matures no later
than 60 days after the date of borrowing. The Fund also pays a commitment fee
equal to its pro rata share of the amount of the credit facility at a rate of
0.10% per annum, in addition to an upfront fee equal to its pro rata share of
0.04% of the amount of the credit facility. The Fund had no borrowings during
the six months ended June 30, 2010.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 43
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
10. PROCEEDS FROM REGULATORY SETTLEMENTS
During the six months ended June 30, 2010, as a result of a settlement of an
administrative proceeding brought by the Securities and Exchange Commission
against an unaffiliated third party relating to market timing and/or late
trading of mutual funds, the Fund received $757,126, which represented the
Fund's portion of the proceeds from the settlement (the Fund was not a party to
the proceeding). The proceeds received by the Fund were recorded as an increase
to additional paid-in capital.
In May 2009, as a result of a settlement of an administrative proceeding brought
by the Securities and Exchange Commission against an unaffiliated third party
relating to market timing and/or late trading of mutual funds, the Fund received
$271,302, which represented the Fund's portion of the proceeds from the
settlement (the Fund was not a party to the proceeding). The proceeds received
by the Fund were recorded as an increase to additional paid-in capital.
In March 2009, without admitting or denying any violations of law or wrongdoing,
J&W Seligman & Co., Incorporated (Seligman), Seligman Advisors, Inc., Seligman
Data Corp. and Brian T. Zino entered into a stipulation of settlement with the
Office of the Attorney General of the State of New York (NYAG) and settled the
claims made by the NYAG. Under the terms of the settlement, Seligman paid $7.7
million to the Fund. The proceeds received by the Fund were recorded as an
increase to additional paid-in capital.
11. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, post-October losses and losses deferred due to wash sales. The
character of distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to the timing of dividend distributions, the
fiscal year in which amounts are distributed may differ from the year that the
income or realized gains were recorded by the Fund.
For federal income tax purposes, the Fund had a capital loss carry-over of
$207,486,080 at Dec. 31, 2009, that if not offset by capital gains will expire
as follows:
<Table>
<Caption>
2011 2016 2017
$12,308,398 $97,889,818 $97,287,864
</Table>
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires. There
- --------------------------------------------------------------------------------
44 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
is no assurance that the Fund will be able to utilize all of its capital loss
carry-over before it expires.
12. RISKS RELATING TO CERTAIN INVESTMENTS
CONCENTRATION RISK
The Fund concentrates its investments in companies in the communications,
information and related industries. The market prices of these stocks tend to
exhibit a greater degree of market risk and price volatility than other types of
investments. Therefore, the Fund's net asset value may fluctuate more than a
fund that invests in a wider range of industries. The rapid pace of change
within many of these industries tends to create a more volatile operating
environment than in other industries.
13. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through the date of issuance of the Fund's financial statements. There were no
events or transactions that occurred during the period that materially impacted
the amounts or disclosures in the Fund's financial statements.
14. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 45
NOTES TO FINANCIAL STATEMENTS (continued) --------------------------------------
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court (the
Supreme Court), asking the Supreme Court to stay the District Court proceedings
while the Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case. On March 30, 2010, the Supreme Court issued its ruling in Jones v.
Harris Associates, and on April 5, 2010, the Supreme Court vacated the Eighth
Circuit's decision in the Gallus case and remanded the case to the Eighth
Circuit for further consideration in light of the Supreme Court's decision in
Jones v. Harris Associates. On June 4, 2010, the Eighth Circuit remanded the
Gallus case to the District Court for further consideration in light of the
Supreme Court's decision in Jones v. Harris Associates.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource, Seligman and Threadneedle
funds' Boards of Directors/Trustees.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and Exchange Commission on legal and regulatory matters that relate
to Ameriprise
- --------------------------------------------------------------------------------
46 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Financial and its affiliates. Copies of these filings may be obtained by
accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 47
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT ----------------------------------------------------------------------
Columbia Management Investment Advisers, LLC ("Columbia Management" or the
"investment manager"), formerly known as RiverSource Investments, LLC, a wholly-
owned subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"), serves
as the investment manager to the Fund. Under an investment management services
agreement (the "IMS Agreement"), Columbia Management provides investment advice
and other services to the Fund and all RiverSource funds (collectively, the
"Funds").
On an annual basis, the Fund's Board of Directors (the "Board"), including the
independent Board members (the "Independent Directors"), considers renewal of
the IMS Agreement. Columbia Management prepared detailed reports for the Board
and its Contracts Committee in March and April 2010, including reports based on
data provided by independent organizations and a comprehensive response to each
item of information requested by independent legal counsel to the Independent
Directors ("Independent Legal Counsel") in a letter to the investment manager,
to assist the Board in making this determination. All of the materials presented
in March and April 2010 were first supplied in draft form to designated
representatives of the Independent Directors, i.e., Independent Legal Counsel,
the Chair of the Board and the Chair of the Contracts Committee, and the final
materials were revised to reflect comments provided by these Board
representatives. In addition, throughout the year, the Board (or its committees)
reviews information prepared by Columbia Management addressing the services
Columbia Management provides and Fund performance. The Board accords particular
weight to the work, deliberations and conclusions of the Contracts Committee,
the Investment Review Committee and the Compliance Committee in determining
whether to continue the IMS Agreement. At the April 6-8, 2010 in-person Board
meeting, Independent Legal Counsel reviewed with the Independent Directors
various factors relevant to the Board's consideration of advisory agreements and
the Board's legal responsibilities related to such consideration. Following an
analysis and discussion of the factors identified below, the Board, including
all of the Independent Directors, approved renewal of the IMS Agreement.
Nature, Extent and Quality of Services Provided by Columbia Management: The
Board analyzed various reports and presentations it had received detailing the
services performed by Columbia Management, as well as its expertise, resources
and capabilities. The Board specifically considered many developments during the
past year concerning the services provided by Columbia Management, including, in
particular, the continued investment in, and resources dedicated to, the Fund's
operations, most notably, management's announcement of the massive investment
made in the acquisition of the long-term asset management business
- --------------------------------------------------------------------------------
48 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
of Columbia Management Group, LLC (the "Columbia Transaction") and the completed
integration of J. & W. Seligman & Co. Incorporated, acquisitions which should
continue to enhance investment capabilities and provide access to a greater
depth of experienced portfolio managers in key categories. The Board noted, in
particular, that upon the close of the Columbia Transaction, the investment
manager will have grown to 10 investment offices (compared to 6 in 2009). In
addition, the Board reviewed information concerning the investment manager's new
Chief Investment Officer upon the close of the Columbia Transaction, including
the application of his particular investment philosophy, which is intended to
enhance the risk and portfolio management oversight of the entire fund family.
Moreover, in connection with the Board's evaluation of the overall package of
services provided by Columbia Management, the Board considered the quality of
the administrative and transfer agency services provided by Columbia
Management's affiliates to the Fund. The Board also reviewed the financial
condition of Columbia Management and its affiliates, and each entity's ability
to carry out its responsibilities under the IMS Agreement. Further, the Board
considered Columbia Management's ability to retain key personnel in certain
targeted areas and its expectations in this regard. The Board also discussed the
acceptability of the terms of the IMS Agreement (including the relatively broad
scope of services required to be performed by Columbia Management). The Board
concluded that the services being performed under the IMS Agreement were of a
reasonably high quality.
Based on the foregoing, and based on other information received (both oral and
written, including the information on investment performance referenced below)
and other considerations, the Board concluded that Columbia Management and its
affiliates were in a position to continue to provide a high quality and level of
services to the Fund.
Investment Performance: For purposes of evaluating the nature, extent and
quality of services provided under the IMS Agreement, the Board carefully
reviewed the investment performance of the Fund. In this regard, the Board
considered detailed reports containing data prepared by an independent
organization showing, for various periods, the performance of the Fund, the
performance of a benchmark index, the percentage ranking of the Fund among its
comparison group and the net assets of the Fund. The Board observed that the
Fund's investment performance met expectations.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 49
APPROVAL OF INVESTMENT MANAGEMENT SERVICES
AGREEMENT (continued) ----------------------------------------------------------
Comparative Fees, Costs of Services Provided and the Profits Realized By
Columbia Management and its Affiliates from their Relationships with the
Fund: The Board reviewed comparative fees and the costs of services to be
provided under the IMS Agreement. The Board members considered detailed
comparative information set forth in an annual report on fees and expenses,
including, among other things, data (prepared by an independent organization)
showing a comparison of the Fund's expenses with median expenses paid by funds
in its peer group, as well as data showing the Fund's contribution to Columbia
Management's profitability. They also reviewed information in the report showing
the fees charged by Columbia Management to other client accounts (with similar
investment strategies to those of the Fund).
The Board accorded particular weight to the notion that the level of fees should
reflect a rational pricing model applied consistently across the various product
lines in the Funds' family, while assuring that the overall fees for each fund
(with few defined exceptions) are generally in line with the "pricing
philosophy" (i.e., that the total expense ratio of each fund, with few
exceptions, is at or below the median expense ratio of funds in the same
comparison group). The Board took into account that the Fund's total expense
ratio approximated the peer group's median expense ratio. Based on its review,
the Board concluded that the Fund's management fee was fair and reasonable in
light of the extent and quality of services that the Fund receives.
The Board also considered various preliminary integration plans in connection
with the Columbia Transaction which, if implemented, would impact the fee
structures of various RiverSource Funds. The Board was satisfied with the
principles underlying these plans, which, at their preliminary stage, are
designed to achieve a rational, consistent pricing model across the combined
fund families, as well as preserve the "pricing philosophy" of the Funds.
The Board also considered the expected profitability of Columbia Management and
its affiliates in connection with Columbia Management providing investment
management services to the Fund. In this regard, the Board referred to a
detailed profitability report, discussing the profitability to Columbia
Management and Ameriprise Financial from managing and operating the Fund,
including data showing comparative profitability over the past two years. In
this regard, the Board observed slightly reduced profitability in 2009 vs. 2008.
The Board also considered the services acquired by the investment manager
through the use of commission dollars paid by the Funds on portfolio
transactions. The Board noted that the fees paid by the Fund should permit the
investment manager to offer competitive compensation to its personnel, make
necessary investments in its
- --------------------------------------------------------------------------------
50 SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
business and earn an appropriate profit. The Board concluded that profitability
levels were reasonable.
Economies of Scale to be Realized: The Board also considered the economies of
scale that might be realized by Columbia Management as the Fund grows and took
note of the extent to which Fund shareholders might also benefit from such
growth. The Board considered that the IMS Agreement provides for lower fees as
assets increase at pre-established breakpoints and concluded that the IMS
Agreement satisfactorily provided for sharing these economies of scale.
Based on the foregoing, the Board, including all of the Independent Directors,
concluded that the investment management service fees were fair and reasonable
in light of the extent and quality of services provided. In reaching this
conclusion, no single factor was determinative. On April 8, 2010, the Board,
including all of the Independent Directors, approved the renewal of the IMS
Agreement for an additional annual period.
PROXY VOTING -------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Statement
of Additional Information (SAI). You may obtain a copy of the SAI without charge
by calling 800.221.2450; contacting your financial intermediary; visiting
seligman.com*; or searching the website of the Securities and Exchange
Commission (SEC) at http://www.sec.gov. Information regarding how the Fund voted
proxies relating to portfolio securities is filed with the SEC by August 31 for
the most recent 12-month period ending June 30 of that year, and is available
without charge by visiting seligman.com*; or searching the website of the SEC at
www.sec.gov.
* Information will be available at seligman.com through September 26, 2010 and
thereafter at columbiamanagement.com.
- --------------------------------------------------------------------------------
SELIGMAN COMMUNICATIONS AND INFORMATION FUND -- 2010 SEMIANNUAL REPORT 51
SELIGMAN COMMUNICATIONS AND INFORMATION FUND
734 Ameriprise Financial Center
Minneapolis, MN 55474
<Table>
This report must be accompanied or preceded by the Fund's
current prospectus. Seligman((R)) mutual funds are
distributed by Columbia Management Investment Distributors,
Inc. (formerly known as RiverSource Fund Distributors,
Inc.), member FINRA and managed by Columbia Management
Investment Advisers, LLC (formerly known as RiverSource
Investments, LLC). Seligman is an offering brand of Columbia
Management Investment Advisers, LLC.
(COLUMBIA MANAGEMENT (C)2010 Columbia Management Investment Advisers, LLC. All
LOGO) rights reserved. SL-9943 C (8/10)
</Table>
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for
semi-annual reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. Investments.
(a) The registrant's "Schedule 1 - 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.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
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.
There were no material changes to the procedure 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 officer, 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 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 controls 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 semi annual 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) Not applicable.
(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.
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) Seligman Communications and Information Fund, Inc.
By /s/ J. Kevin Connaughton
-----------------------------------------
J. Kevin Connaughton
President and Principal Executive Officer
Date September 7, 2010
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/ J. Kevin Connaughton
-----------------------------------------
J. Kevin Connaughton
President and Principal Executive Officer
Date September 7, 2010
By /s/ Jeffrey P. Fox
-----------------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial Officer
Date September 7, 2010