TRI-CONTINENTAL Corp — Interim / Quarterly Report 1997

Aug 29, 1997

================================================================================ MID-YEAR REPORT 1997 TRI-CONTINENTAL CORPORATION [LOGO] AN INVESTMENT YOU CAN LIVE WITH ================================================================================ TRI-CONTINENTAL CORPORATION INVESTS PRIMARILY TO PRODUCE LONG-TERM GROWTH OF BOTH CAPITAL AND INCOME, WHILE PROVIDING REASONABLE CURRENT INCOME. TY is Tri-Continental Corporation's symbol for its Common Stock on the New York Stock Exchange. TRI-CONTINENTAL CORPORATION To the Stockholders: August 1, 1997 In the second quarter of 1997, Tri-Continental Corporation posted a total return of 16.32% based on net asset value, which outpaced the 15.17% total return of its peers, as measured by the Lipper Closed-End Growth and Income Funds Average, and the total return of mutual funds (open-end funds) with similar investment objectives, as measured by the Lipper Growth and Income Funds Average. On a risk-adjusted basis, Tri-Continental's total return compared favorably with the 17.46% total return of the Standard & Poor's 500 Composite Stock Price Index (S&P 500). A risk-adjusted return reflects the historical volatility of an investment, such as Tri-Continental, relative to the volatility of the overall market. Tri-Continental's total return for the second quarter based on market price was 14.32%. Additional information on Tri-Continental's investment results appears on page 4. The low-inflation and moderate economic growth environment continued in the second quarter of 1997. Instead of increasing inflation, the growing economy actually generated lower producer prices for six consecutive months. The Federal Reserve Board's decision to leave the federal funds rate unchanged in May also helped tame inflation fears and gave further support to the already strong financial markets. Low unemployment and high consumer confidence levels continued, while consumer spending was relatively restrained. Overall, the low interest rate environment characterizing the second quarter improved the results of the equity market and of the Corporation, particularly the portfolio's significant weighting in finance and insurance securities. The equity market advances were disproportionately affected by the strong performance from the 25 largest, more liquid stocks whose valuations neared record highs. In this narrow market, the Corporation's diversified portfolio, which holds stocks within a wide range of capitalizations, lagged the S&P 500. However, the rally in the equity market broadened in May to include a greater number of the types of stocks in which the Corporation invests. This trend, if it continues, bodes well for the Corporation's future results. 1 TRI-CONTINENTAL CORPORATION Tri-Continental Corporation's Annual Meeting took place Thursday, May 15, 1997, in Boston. At the meeting, six directors were elected, the selection of Deloitte & Touche LLP as auditors was ratified, and an increase in the number of authorized shares of Common Stock was approved. Stockholder proposals that would have changed the investment process or structure of Tri-Continental Corporation, including a proposal to convert Tri-Continental to an open-end fund, were rejected by an overwhelming majority of the Stockholders. For the complete results of the vote, please refer to page 27. We thank you for your continued support of Tri-Continental Corporation, "an investment you can live with," and look forward to serving your investment needs in the many years to come. By order of the Board of Directors, /s/William C. Morris - -------------------- William C. Morris Chairman /s/Brian T. Zino ----------------- Brian T. Zino President 2 TRI-CONTINENTAL CORPORATION [PHOTO] SELIGMAN GROWTH AND INCOME TEAM: (FROM LEFT) RODNEY COLLINS, MARGARET DOYLE, JONATHAN ROTH, ODETTE GALLI (CO-PORTFOLIO MANAGER), (SEATED) MELANIE RAVENELL (ADMINISTRATIVE ASSISTANT), CHARLES C. SMITH, JR. (CO-PORTFOLIO MANAGER), AMY FUJII INTERVIEW WITH YOUR PORTFOLIO MANAGERS What were Tri-Continental Corporation's investment results in the second quarter of 1997? "The Corporation's total return of 16.32% based on net asset value outpaced the 15.17% total return of Tri-Continental's peers, as measured by the Lipper Closed-End Growth and Income Funds Average. The Corporation's total return also outpaced the 14.30% total return of the broad group of open-end competitors with similar investment objectives, as measured by the Lipper Growth and Income Funds Average. Further, with only 88% of the volatility (risk) of the Standard & Poor's 500 Composite Stock Price Index (S&P 500), the Corporation's total return compared favorably to the 17.46% total return of the S&P 500 on a risk-adjusted basis. Tri-Continental's total return based on market price was 14.32% for the second quarter of 1997." Which economic factors affected the Corporation's investment results in the second quarter? "The Federal Reserve Board acted once in the six-month period, increasing the federal funds rate by 25 basis points in March. The March action was due to the first-quarter surge in economic growth, which led to fears of inflation and noticeable volatility in the financial markets. The second quarter, however, brought moderate economic growth and a continuation of the low inflation levels that had persisted throughout the first six months of the year. As a result, there was a decline in interest rates that helped strengthen equity prices and the Corporation's portfolio." Which market factors influenced the Corporation's investment results in the quarter? "Large-capitalization stocks continued their rapid appreciation in the second quarter, as witnessed by the successive record highs of benchmarks such as the S&P 500 and the Dow Jones Industrial Average. As in the first quarter, the 25 largest stocks in the S&P 500 were responsible for the majority of the index's gains, and these stocks approached 10-year highs in their valuations. However, in May and June, the market broadened to include a greater portion of small- and mid-capitalization stocks in the advances. We believe that investors are beginning to look for prices that are more closely tied to earnings." What was your investment strategy? "We maintained our strategy of searching for high-quality, large-capitalization companies with reasonable yields and attractive valuations relative to earnings. As it became increasingly difficult to 3 TRI-CONTINENTAL CORPORATION - -------------------------------------------------------------------------------- INVESTMENT RESULTS PER COMMON SHARE TOTAL RETURNS* For Periods Ended June 30, 1997

• These rates of return reflect changes in market price or net asset value, as applicable, and assume that all distributions within the period are taken in additional shares. he rates of return will vary and the principal value of an investment will fluctuate. Shares, if sold, may be worth more or less than their original cost. Past performance is not indicative of future investment results. ** The S&P 500 and the Lipper Closed-End Growth & Income Funds Average are unmanaged benchmarks that assume investment of dividends.The S&P 500 does not reflect fees and sales charges, and the Lipper Closed-End Growth & Income Funds Average does not reflect sales charges. Investors cannot invest directly in an index or an average. + Preferred Stockholders were paid dividends totaling $1.25 per share. ++ Represents the per share amount of net unrealized appreciation of portfolio securities as of June 30, 1997. @ Excludes the $0.807 of undistributed realized capital gains from 1996, which were paid to Stockholders on July 1, 1997. - -------------------------------------------------------------------------------- 4 TRI-CONTINENTAL CORPORATION INTERVIEW WITH YOUR PORTFOLIO MANAGERS (continued) find reasonable value in the highest capitalizations of the large-stock universe, we re-focused our investments towards the mid-range capitalizations of the large-stock universe. In the past, the stocks in the portfolio had average capitalizations similar to those in the S&P 500. However, more attractive valuations and higher earnings growth potential were found in companies with market capitalizations that averaged $25 billion, compared to the stocks with the largest capitalizations in the S&P 500, such as Coca-Cola Company ($168.6 billion). "A portion of the portfolio was shifted into fixed-income, given the high valuations found in the equity market and the attractive real rates of return available in the bond market. These issues should help reduce overall volatility. The portfolio's fixed-income weighting may be increased if equity valuations continue to rise." Which sectors in the portfolio improved the Corporation's investment results? "Capital goods, finance, health care, and transportation were strong contributors to the Corporation's investment results. The Corporation's investments in the manufacturing and industrial equipment industry, specifically in two mid-sized companies, Ingersoll-Rand Company and Parker-Hannifin Corporation, contributed positively to Tri-Continental's results in the period. Additionally, the Corporation's drug, health care, and transportation stocks outperformed relative to their peers in the S&P 500. Finally, Kemet Corporation and Vishay Intertechnology, Inc., two electronic component companies whose earnings had been cyclically depressed in 1996, have recovered this year, leading to significant capital appreciation in these stocks." Which sectors impaired the Corporation's performance? "Our decision to underweight investments in the consumer goods and services and the energy industries negatively affected the Corporation's overall results. As valuations in these sectors continued to be well above historic averages, we remained cautious about investing additional assets in these areas." What is the outlook? "Overall, the strong pace of economic growth coupled with the low inflation bodes well for the continued strength of the financial markets. We believe that investing in the mid-range capitalizations of the large-stock universe, which have more reasonable valuations, will allow Tri-Continental's portfolio to offer competitive returns in the future. We also believe that when investors review valuations found in the highest capitalization stocks, as they did in May and June, they will re-focus their attention to those companies with more attractive valuations and higher earnings growth potential. Tri-Continental's portfolio is positioned to take advantage of such a potential broadening of the market and shift in investor preference." 5 TRI-CONTINENTAL CORPORATION HIGHLIGHTS OF THE FIRST HALF

• ---------- * Annualized. 6 TRI-CONTINENTAL CORPORATION DIVERSIFICATION OF ASSETS The diversification of portfolio holdings by industry on June 30, 1997, was as follows. Individual securities owned are listed on pages 9 to 17.

• ---------- +Includes a liability of 2.9% of net investment assets from dividend and capital gain distributions payable July 1, 1997. 7 TRI-CONTINENTAL CORPORATION LARGEST PORTFOLIO CHANGES APRIL 1 TO JUNE 30, 1997 SHARES OR PRIN. AMT. ------------------------ HOLDINGS ADDITIONS INCREASE 6/30/97 ---------- ---------- COMMON STOCKS Ahmanson (H.F.) & Company 800,000 shs. 800,000 shs. AK Steel Holdings Corporation 635,000 635,000 Corning, Inc. 500,000 850,000 SBC Communications, Inc. 425,000 425,000 TIG Holdings, Inc. 500,000 500,000 United Technologies Corporation 200,000 500,000 Westinghouse Electric Corporation 1,200,000 1,200,000 US GOVERNMENT SECURITIES US Treasury Notes, 5 7/8%, 2/15/2004 $45,000,000 $45,000,000 US Treasury Notes, 6 1/4%, 4/30/2001 35,000,000 35,000,000 US Treasury Notes, 6 3/8%, 5/15/2000 45,000,000 45,000,000 SHARES ------------------------ HOLDINGS REDUCTIONS INCREASE 6/30/97 ---------- ---------- COMMON STOCKS ALLTEL Corporation 500,000 -- Dow Chemical Company 250,000 -- Edison International 1,000,000 -- Ford Motor Company 800,000 -- Great Western Financial Corporation 400,000 -- Household International, Inc. 200,000 -- International Paper Company 600,000 -- Microsoft Corporation 100,000 200,000 CONVERTIBLE PREFERRED STOCKS AK Steel Holdings Corporation, 7% 700,000 -- Corning, Inc. (Delaware), 6% 250,000 -- Largest portfolio changes are based on cost of purchases and proceeds from sales of securities. 10 LARGEST EQUITY HOLDINGS JUNE 30, 1997 Value ----------- Corning, Inc. $47,281,250 American International Group, Inc. 44,812,500 Bank of New York Company, Inc. 43,500,000 AMP Inc. 41,750,000 United Technologies Corporation 41,500,000 PepsiCo,Inc. 41,318,750 General Electric Company 39,225,000 Colgate-Palmolive Company 39,150,000 American Home Products Corporation 38,250,000 Parker-HannifinCorporation 37,929,688 8

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• --------------------- * Non-income producing security. ** Principal amount reported in Japanese Yen. ++ Restricted securities. Descriptions of companies have not been audited by Deloitte and Touche LLP. See Notes to Financial Statements. 17 TRI-CONTINENTAL CORPORATION

• ------------ * Includes net unrealized depreciation on translation of investments denominated in foreign currencies of $10,212,954. See Notes to Financial Statements. 18 TRI-CONTINENTAL CORPORATION

• ------------ *Net investment income available for Common Stock is $27,720,004, which is net of Preferred Stock dividends of $940,925, and includes a portion of the net realized gain from foreign currency transactions of $251,610 which is taxable as ordinary income. See Notes to Financial Statements. 19 TRI-CONTINENTAL CORPORATION STATEMENTS IN CHANGES IN NET INVESTMENT ASSETS

• ------------ See Notes to Financial Statements. 20 NOTES TO FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been prepared in conformity with generally accepted accounting principles which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Corporation: a. SECURITY VALUATION -- Investments in stocks, bonds, limited partnership interests, and short-term holdings maturing in more than 60 days are valued at current market values or, in their absence, fair value determined in accordance with procedures approved by the Board of Directors. Securities traded on national exchanges are valued at last sales prices or, in their absence and in the case of over-the-counter securities, at the mean of bid and asked prices. Short-term holdings maturing in 60 days or less are valued at amortized cost. b. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Corporation are maintained in US dollars. The market value of investment securities and other assets and liabilities denominated in foreign currencies are translated into US dollars at the closing daily rate of exchange as reported by a pricing service. Purchases and sales of investment securities, income, and expenses are translated into US dollars at the rate of exchange prevailing on the respective dates of such transactions. The Corporation separates that portion of the results of operations resulting from changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held in the portfolio. Similarly, the Corporation separates the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the period. c. FORWARD CURRENCY CONTACTS -- The Corporation may enter into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, or other amounts receivable or payable in foreign currency. A forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Certain risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. The contracts are valued daily at current exchange rates and any unrealized gain or loss is included in net unrealized appreciation or depreciation on translation of assets and liabilities denominated in foreign currencies and forward currency contracts. The gain or loss, if any, arising from the difference between the settlement value of the forward contract and the closing of such contract is included in net realized gain or loss from foreign currency transactions. d. FEDERAL TAXES -- There is no provision for federal income tax. The Corporation has elected to be taxed as a regulated investment company and intends to distribute substantially all taxable net income and net gain realized. e. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment transactions are recorded on trade dates. Identified cost of investments sold is used for both financial statements and federal income tax purposes. Dividends receivable and payable are recorded on ex-dividend dates, except that certain dividends from foreign securities where the ex-dividend dates may have passed are recorded as soon as the Corporation is informed of the dividend. Interest income is recorded on the accrual basis. f. DISTRIBUTIONS TO STOCKHOLDERS -- The treatment for financial statement purposes of distributions made during the year from net investment income or net realized gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or capital gain, and the recharacterization of foreign exchange gains or losses to either ordinary income or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net investment assets based on their ultimate characterization for federal income tax purposes. Any such reclassification will have no effect on net assets, results of operations, or net asset value per share of the Corporation. 21 NOTES TO FINANCIAL STATEMENTS (continued) 2. AUTOMATIC DIVIDEND INVESTMENT AND CASH PURCHASE PLANS -- Under the Corporation's Charter, dividends on the Common Stock cannot be declared unless net assets, after such dividends and dividends on Preferred Stock, equal at least $100 per share of Preferred Stock outstanding. The Preferred Stock is subject to redemption at the Corporation's option at any time on 30 days' notice at $55 per share (or a total of $41,400,700 for the shares outstanding) plus accrued dividends, and entitled in liquidation to $50 per share plus accrued dividends. The Corporation, in connection with its Automatic Dividend Investment and Cash Purchase Plan and other Stockholder plans, acquires and issues shares of its own Common Stock, as needed, to satisfy Plan requirements. For the six months ended June 30, 1997, 994,291 shares were purchased from Plan participants at a cost of $25,257,327, which represented a weighted average discount of 18.02% from the net asset value of those acquired shares. A total of 869,474 shares were issued to Plan participants during the six months for proceeds of $22,070,777, a discount of 17.12% from the net asset value of those shares. At June 30, 1997, 212,065 shares of Common Stock were reserved for issuance upon exercise of 14,436 Warrants, each of which entitled the holder to purchase 14.69 shares of Common Stock at $1.53 per share. Assuming the exercise of all Warrants outstanding at June 30, 1997, net investment assets would have increased by $324,459 and the net asset value of the Common Stock would have been $33.23 per share. The number of Warrants exercised during the six months ended June 30, 1997, and the year ended December 31, 1996, was 44 and 929, respectively. 3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio securities, excluding USGovernment obligations and short-term investments, amounted to $829,777,101 and $745,246,245, respectively; purchases of USGovernment obligations were $124,085,156. At June 30, 1997, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes, and the tax basis gross unrealized appreciation and depreciation of portfolio securities, including the effects of foreign currency translations, amounted to $1,024,842,846 and $22,013,338, respectively. 4. SHORT-TERM INVESTMENTS -- At June 30, 1997, the Corporation owned short-term investments which matured in less than seven days. 5. MANAGEMENT FEE,ADMINISTRATIVE SERVICES, AND OTHER TRANSACTIONS -- J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of the Corporation and provides or arranges for the necessary personnel and facilities. Seligman Henderson Co. (the "Subadviser"), an entity owned 50% each by the Manager and Henderson plc, supervises and directs all or a portion of the Corporation's foreign investments.For this service, the Subadviser receives a fee from the Manager, payable monthly. Compensation of all officers of the Corporation, all directors of the Corporation who are employees or consultants of the Manager, and all personnel of the Corporation and the Manager is paid by the Manager or by Henderson plc. The Manager receives a fee, calculated daily and payable monthly, equal to a percentage of the Corporation's daily net assets at the close of business on the previous business day. The management fee rate is calculated on a sliding scale of 0.45% to 0.375%, based on average daily net assets of all the investment companies managed by the Manager. The management fee for the six months ended June 30, 1997, was equivalent to an annual rate of 0.41% of the average daily net assets of the Corporation. Seligman Data Corp., owned by the Corporation and certain associated investment companies, charged the Corporation at cost $1,680,057 for stockholder account services. The Corporation's investment in Seligman Data Corp. is recorded at a cost of $43,681. Certain officers and directors of the Corporation are officers or directors of the Manager, the Subadviser, and/or Seligman Data Corp. 22 NOTES TO FINANCIAL STATEMENTS (continued) The Corporation has a compensation arrangement under which directors who receive fees may elect to defer receiving such fees. Interest is accrued on the deferred balances. The cost of such fees and interest is included in directors' fees and expenses, and the accumulated balance thereof at June 30, 1997, of $465,690 is included in other liabilities. Deferred fees and the related accrued interest are not deductible for federal income tax purposes until such amounts are paid. 6. RESTRICTED SECURITIES -- At June 30, 1997, the Tri-Continental Financial Division of the Corporation was comprised of three investments that were purchased through private offerings and cannot be sold without prior registration under the Securities Act of 1933 or pursuant to an exemption therefrom. These investments are valued at fair value as determined in accordance with procedures approved by the Board of Directors of the Corporation. The acquisition dates of investments in the limited partnerships, along with their cost and values at June 30, 1997, are as follows:

23 FINANCIAL HIGHLIGHTS The Corporation's financial highlights are presented below. "Per share operating performance" data is designed to allow investors to trace the operating performance, on a per Common share basis, from the beginning net asset value to the ending net asset value, so that investors can understand what effect the individual items have on their investment, assuming it was held throughout the period. Generally, the per share amounts are derived by converting the actual dollar amounts incurred for each item, as disclosed in the financial statements, to their equivalent per Common share amounts. "Total investment return" measures the Corporation's performance assuming that investors purchased shares of the Corporation at the market value or net asset value as of the beginning of the period, invested dividends and capital gains paid, as provided for in the Corporation's Prospectus and Automatic Dividend Investment and Cash Purchase Plan, and then sold their shares at the closing market value or net asset value per share on the last day of the period. The computations do not reflect any sales commissions investors may incur in purchasing or selling shares of the Corporation. Total investment returns for periods of less than one year are not annualized. "Average commission rate paid" represents the average commission paid by the Corporation to purchase or sell portfolio securities. It is determined by dividing the total commission dollars paid by the number of shares purchased and sold during the period for which commissions were paid. This rate is provided for the period beginning January 1, 1996. The ratios of expenses to average net assets and net investment income to average net assets for the periods presented do not reflect the effect of dividends paid to Preferred Stockholders.

24 FINANCIAL HIGHLIGHTS (continued)

25 REPORT OF INDEPENDENT AUDITORS THE BOARD OF DIRECTORS AND SECURITY HOLDERS, Tri-Continental Corporation: We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, and the statement of capital stock and surplus of Tri-Continental Corporation as of June 30, 1997, the related statements of operations for the six months then ended and of changes in net investment assets for the six months then ended and the year ended December 31, 1996, and the financial highlights for the six months then ended and for each of the years in the five-year period ended December 31, 1996. These financial statements and financial highlights are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 1997, by correspondence with the Corporation's custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Tri-Continental Corporation as of June 30, 1997, the results of its operations, the changes in its net investment assets, and the financial highlights for the respective stated periods in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP - ------------------------- DELOITTE & TOUCHE LLP New York, New York August 1, 1997 26 TRI-CONTINENTAL CORPORATION PROXY RESULTS Tri-Continental Corporation Stockholders voted on the following proposals at the Annual Meeting of Stockholders onMay 15, 1997, in Boston, MA. The description of each proposal and the voting results are stated below.Each Director was elected, the amendment to the Charter of the Corporation was approved, and the selection of Deloitte &Touche LLP as auditors was ratified.None of the Stockholder proposals passed. For Withheld --- -------- Election of Directors: John R. Galvin 73,974,295 3,807,874 William C. Morris 74,285,161 3,497,096 James Q. Riordan 74,247,894 3,534,341 Richard R. Schmaltz 74,105,138 3,677,079 Robert L. Shafer 74,119,246 3,662,977 Brian T. Zino 74,286,839 3,495,600

27 TRI-CONTINENTAL CORPORATION BOARD OF DIRECTORS FRED E. BROWN DIRECTOR EMERITUS DIRECTOR AND CONSULTANT, J. & W. Seligman & Co. Incorporated JOHN R. GALVIN (2,4) DEAN, Fletcher School of Law and Diplomacy at Tufts University DIRECTOR, USLIFE Corporation ALICE S. ILCHMAN (3,4) PRESIDENT, Sarah Lawrence College TRUSTEE, Committee for Economic Development CHAIRMAN, The Rockefeller Foundation FRANK A. MCPHERSON (2,4) DIRECTOR, Kimberly-Clark Corporation DIRECTOR, Baptist Medical Center JOHN E. MEROW RETIRED CHAIRMAN AND SENIOR PARTNER, Sullivan & Cromwell, Law Firm DIRECTOR, Commonwealth Aluminum Corporation BETSY S. MICHEL (2,4) DIRECTOR OR TRUSTEE, Various Organizations WILLIAM C. MORRIS (1) CHAIRMAN CHAIRMAN OF THE BOARD, J. & W. Seligman & Co. Incorporated CHAIRMAN, Carbo Ceramics Inc. DIRECTOR, Kerr-McGee Corporation JAMES C. PITNEY (3,4) RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm JAMES Q. RIORDAN (3,4) DIRECTOR, The Brooklyn Union Gas Company TRUSTEE, Committee for Economic Development DIRECTOR, Dow Jones & Co., Inc. DIRECTOR, Public Broadcasting Service RICHARD R.SCHMALTZ (1) MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated TRUSTEE EMERITUS,Colby College ROBERT L. SHAFER (3,4) DIRECTOR OR TRUSTEE, Various Organizations JAMES N. WHITSON (2,4) EXECUTIVE VICE PRESIDENT AND DIRECTOR, Sammons Enterprises, Inc. DIRECTOR, C-SPAN DIRECTOR, Red Man Pipe and Supply Company BRIAN T. ZINO (1) PRESIDENT PRESIDENT, J. & W. Seligman & Co. Incorporated CHAIRMAN, Seligman Data Corp. - -------------------- Member: (1) Executive Committee (2) Audit Committee (3) Director Nominating Committee (4) Board Operations Committee 28 TRI-CONTINENTAL CORPORATION Executive Officers WILLIAM C. MORRIS CHAIRMAN BRIAN T. ZINO PRESIDENT CHARLES W. KADLEC VICE PRESIDENT CHARLES C. SMITH, JR. VICE PRESIDENT LAWRENCE P. VOGEL VICE PRESIDENT THOMAS G. ROSE TREASURER FRANK J. NASTA SECRETARY - -------------------------------------------------------------------------------- FOR MORE INFORMATION MANAGER J. & W. Seligman & Co. Incorporated 100 Park Avenue New York, NY 10017 SUBADVISER Seligman Henderson Co. 100 Park Avenue New York, NY 10017 STOCKHOLDER SERVICE AGENT Seligman Data Corp. 100 Park Avenue New York, NY 10017 IMPORTANT TELEPHONE NUMBERS (800) TRI-1092 Stockholder Services (800) 445-1777 Retirement Plan Services (800) 622-4597 24-Hour Automated Telephone Access Service 29 TRI-CONTINENTAL CORPORATION MANAGED BY [LOGO] J. & W. SELIGMAN & CO. INCORPORATED INVESTMENT MANAGERS AND ADVISORS ESTABLISHED 1864 100 PARK AVENUE, NEW YORK, NY 10017 THIS REPORT IS INTENDED ONLY FOR THE INFORMATION OF STOCKHOLDERS OR THOSE WHO HAVE RECEIVED THE CURRENT PROSPECTUS COVERING SHARES OF COMMON STOCK OF TRI- CONTINENTAL CORPORATION, WHICH CONTAINS INFORMATION ABOUT MANAGEMENT FEES AND OTHER COSTS. CETRI3 6/97