-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J5s3z0CDZU/NKNsDR8s0qwerT7Bnt8nUvFGNoh5GF+LAdFWkptSzlffqKg18jXdV G+wjywDC77Ay4Ox3uRxXvA== 0000950123-09-040323.txt : 20090902 0000950123-09-040323.hdr.sgml : 20090902 20090902114150 ACCESSION NUMBER: 0000950123-09-040323 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090630 FILED AS OF DATE: 20090902 DATE AS OF CHANGE: 20090902 EFFECTIVENESS DATE: 20090902 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SELIGMAN CAPITAL FUND INC CENTRAL INDEX KEY: 0000100786 IRS NUMBER: 132641951 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-01886 FILM NUMBER: 091050163 BUSINESS ADDRESS: STREET 1: 100 PARK AVENUE STREET 2: 7TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2124880200 MAIL ADDRESS: STREET 1: 100 PARK AVENUE STREET 2: 7TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: UNION CAPITAL FUND INC DATE OF NAME CHANGE: 19820426 0000100786 S000002554 SELIGMAN CAPITAL FUND INC C000007035 Seligman Capital Fund, Class A SCFIX C000007036 Seligman Capital Fund, Class B SLCBX C000007037 Seligman Capital Fund, Class C SCLCX C000007039 Seligman Capital Fund, Class R2 SCFRX C000008212 Seligman Capital Fund, Class R5 SCLIX N-CSRS 1 c52550nvcsrs.txt N-CSRS 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 811-01886 SELIGMAN CAPITAL 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: 12/31 Date of reporting period: 6/30 Semiannual Report (SELIGMAN LOGO) SELIGMAN CAPITAL FUND SEMIANNUAL REPORT FOR THE PERIOD ENDED JUNE 30, 2009 SELIGMAN CAPITAL FUND SEEKS TO PROVIDE CAPITAL APPRECIATION. (SINGLE STRATEGY FUNDS) TABLE OF CONTENTS -------------------------------------------------------------- Your Fund at a Glance.............. 2 Fund Expenses Example.............. 7 Portfolio of Investments........... 9 Statement of Assets and Liabilities...................... 14 Statement of Operations............ 15 Statements of Changes in Net Assets........................... 16 Financial Highlights............... 17 Notes to Financial Statements...... 20 Proxy Voting....................... 33 Change in Independent Registered Public Accounting Firm........... 34
RIVERSOURCE FAMILY OF FUNDS Seligman Funds are a part of the RiverSource Family of Funds that includes funds branded "RiverSource," "RiverSource Partners," "Seligman" and "Threadneedle." These funds share the same Board of Directors/Trustees and officers. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 1 YOUR FUND AT A GLANCE ---------------------------------------------------------- (UNAUDITED) FUND SUMMARY - -------------------------------------------------------------------------------- > Seligman Capital Fund (the Fund) Class A shares gained 18.94% (excluding sales charge) for the six-month period ended June 30, 2009. > The Fund outperformed its benchmark, the Russell(R) Midcap Growth Index, which gained 16.61% during the same six-month period. > The Fund also outperformed its peer group, as represented by the Lipper Mid- Cap Growth Funds Average, which rose 13.08% during the same period. ANNUALIZED TOTAL RETURNS (for period ended June 30, 2009) - --------------------------------------------------------------------------------
6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS - -------------------------------------------------------------------------- Seligman Capital Fund Class A (excluding sales charge) +18.94% -38.11% -8.79% -3.24% +0.34% - -------------------------------------------------------------------------- Russell Midcap Growth Index(1) (unmanaged) +16.61% -30.33% -7.93% -0.44% +0.02% - -------------------------------------------------------------------------- Lipper Mid-Cap Growth Funds Average(2) +13.08% -31.53% -8.27% -1.19% +0.64% - --------------------------------------------------------------------------
* 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 or calling 1(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 sales charges and expenses. The Fund's returns reflect the effect of fee waivers/reimbursements, if any. Without such waivers/reimbursements, the Fund's returns would be lower. See the Average Annual Total Returns table for performance of other share classes of the Fund. The index and average do not reflect the effects of sales charges, expenses (excluding Lipper) and taxes. It is not possible to invest directly in an average or index. - -------------------------------------------------------------------------------- 2 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- (1) The Russell Midcap Growth Index, an unmanaged index, measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values, as determined by the Frank Russell Company. The stocks are also members of the Russell 1000 Growth Index. The index reflects reinvestment of all distributions and changes in market prices. (2) The Lipper Mid-Cap Growth Funds Average is an average of funds that, by portfolio practice, invest at least 75% of their equity assets in companies with market capitalizations (on a three-year weighted basis) below Lipper's U.S. Diversified Equity large-cap floor. Mid-cap growth funds typically have an above-average price-to-earnings ratio, price-to-book ratio, and three- year sales-per-share growth value, relative to the S&P MidCap 400 Index. The average reflects reinvestment of all distributions and changes in market prices. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 3 YOUR FUND AT A GLANCE (continued) ---------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS - --------------------------------------------------------------------------------
AT JUNE 30, 2009 SINCE Without sales charge 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION** Class A (inception 10/9/69) +18.94% -38.11% -8.79% -3.24% +0.34% N/A - ------------------------------------------------------------------------------------ Class B (inception 4/22/96) +18.45% -38.62% -9.52% -4.00% -0.42% N/A - ------------------------------------------------------------------------------------ Class C (inception 5/27/99) +18.49% -38.57% -9.48% -3.98% -0.40% N/A - ------------------------------------------------------------------------------------ Class R2 (inception 4/30/03) +18.76% -38.29% -8.99% -3.45% N/A +2.64% - ------------------------------------------------------------------------------------ Class R5 (inception 11/30/01) +19.42% -37.64% -8.25% -2.71% N/A -1.93% - ------------------------------------------------------------------------------------ With sales charge Class A (inception 10/9/69) +12.09% -41.66% -10.57% -4.39% -0.25% N/A - ------------------------------------------------------------------------------------ Class B (inception 4/22/96) +13.45% -41.69% -10.43% -4.39% -0.42% N/A - ------------------------------------------------------------------------------------ Class C (inception 5/27/99) +17.49% -39.19% -9.48% -3.98% -0.40% N/A - ------------------------------------------------------------------------------------
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 R2 and Class R5 shares. Prior to June 13, 2009, Class R2 (formerly Class R) shares were offered with a 1% CDSC. Class R2 and Class R5 are available to qualifying institutional investors only. The Fund's returns reflect the effect of fee waivers/reimbursements, if any. Without such waivers/reimbursements, the Fund's returns would be lower. *Not annualized. **For classes with less than 10 years performance. - -------------------------------------------------------------------------------- 4 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- STYLE MATRIX - --------------------------------------------------------------------------------
STYLE VALUE BLEND GROWTH LARGE X MEDIUM SIZE SMALL
Shading within the style matrix approximates areas in which the Fund is designed to generally invest. The style matrix can be a valuable tool for constructing and monitoring your portfolio. It provides a frame of reference for distinguishing the types of stocks or bonds owned by a mutual fund, and may serve as a guideline for helping you build a portfolio. Investment products, including shares of mutual funds, are not federally or FDIC-insured, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. Investments in mid-capitalization companies often involve greater risks and potential volatility than investments in larger, more established companies. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 5 YOUR FUND AT A GLANCE (continued) ---------------------------------------------- SECTOR DIVERSIFICATION(1) (at June 30, 2009; % of portfolio assets) - ---------------------------------------------------------------------
Consumer Discretionary 16.6% - ------------------------------------------------ Consumer Staples 1.2% - ------------------------------------------------ Energy 7.6% - ------------------------------------------------ Financials 6.9% - ------------------------------------------------ Health Care 13.7% - ------------------------------------------------ Industrials 15.3% - ------------------------------------------------ Information Technology 29.0% - ------------------------------------------------ Materials 4.8% - ------------------------------------------------ Telecommunication Services 2.7% - ------------------------------------------------ Utilities 2.2% - ------------------------------------------------
(1) Sectors can be comprised of several industries. Please refer to the section entitled "Portfolio of Investments" for a complete listing. No single industry exceeds 25% of portfolio assets. Percentages indicated are based upon total investments (excluding Investments of Cash Collateral Received for Securities on Loan) as of June 30, 2009. The Fund's composition is subject to change. 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 (at June 30, 2009; % of portfolio assets) - ---------------------------------------------------------------------
SAVVIS 4.7% - ------------------------------------------------ Macrovision Solutions 4.3% - ------------------------------------------------ Coinstar 3.7% - ------------------------------------------------ Microsemi 3.2% - ------------------------------------------------ FTI Consulting 3.0% - ------------------------------------------------ Marvell Technology Group 3.0% - ------------------------------------------------ McAfee 2.5% - ------------------------------------------------ Prudential Financial 2.2% - ------------------------------------------------ Noble Energy 2.2% - ------------------------------------------------ Apollo Group Cl A 1.8% - ------------------------------------------------
Excludes cash & cash equivalents. For further detail about these holdings, please refer to the section entitled "Portfolio of Investments." Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security. - -------------------------------------------------------------------------------- 6 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT FUND EXPENSES EXAMPLE ---------------------------------------------------------- (UNAUDITED) As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; and (2) ongoing costs, which may include management fees; distribution and service (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, 2009. ACTUAL EXPENSES The first line of the table provides information about actual account values and actual expenses. 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 Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. 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. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 7 FUND EXPENSES EXAMPLE (continued) ----------------------------------------------
DIRECT AND DIRECT INDIRECT BEGINNING ENDING EXPENSES EXPENSES ACCOUNT VALUE ACCOUNT VALUE PAID DURING PAID DURING JAN. 1, 2009 JUNE 30, 2009 THE PERIOD(a) THE PERIOD(b) - ------------------------------------------------------------------------------------------ Class A - ------------------------------------------------------------------------------------------ Actual(c) $1,000 $1,189.40 $10.64 $10.69 - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,015.08 $ 9.79 $ 9.84 - ------------------------------------------------------------------------------------------ Class B - ------------------------------------------------------------------------------------------ Actual(c) $1,000 $1,184.50 $14.73 $14.79 - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,011.31 $13.56 $13.61 - ------------------------------------------------------------------------------------------ Class C - ------------------------------------------------------------------------------------------ Actual(c) $1,000 $1,184.90 $14.57 $14.63 - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,011.46 $13.42 $13.47 - ------------------------------------------------------------------------------------------ Class R2 - ------------------------------------------------------------------------------------------ Actual(c) $1,000 $1,187.60 $11.88 $11.93 - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,013.93 $10.94 $10.99 - ------------------------------------------------------------------------------------------ Class R5 - ------------------------------------------------------------------------------------------ Actual(c) $1,000 $1,194.20 $ 6.64 $ 6.69 - ------------------------------------------------------------------------------------------ Hypothetical (5% return before expenses) $1,000 $1,018.74 $ 6.11 $ 6.16 - ------------------------------------------------------------------------------------------
ANNUALIZED EXPENSE RATIOS
FUND'S ACQUIRED FUND ANNUALIZED FEES AND NET FUND EXPENSE RATIO EXPENSES EXPENSES - ---------------------------------------------------------------------- Class A 1.96% .01% 1.97% - ---------------------------------------------------------------------- Class B 2.72% .01% 2.73% - ---------------------------------------------------------------------- Class C 2.69% .01% 2.70% - ---------------------------------------------------------------------- Class R2 2.19% .01% 2.20% - ---------------------------------------------------------------------- Class R5 1.22% .01% 1.23% - ----------------------------------------------------------------------
(a) Expenses are equal to the annualized expense ratio for each class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). (b) Expenses are equal to the annualized expense ratio for each class plus the acquired fund fees and expenses, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). (c) Based on the actual return for the six months ended June 30, 2009: +18.94% for Class A, +18.45% for Class B, +18.49% for Class C, +18.76% for Class R2 and +19.42% for Class R5. - -------------------------------------------------------------------------------- 8 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT PORTFOLIO OF INVESTMENTS ------------------------------------------------------- JUNE 30, 2009 (UNAUDITED) (Percentages represent value of investments compared to net assets) INVESTMENTS IN SECURITIES
COMMON STOCKS (100.1%) ISSUER SHARES VALUE(a) AEROSPACE & DEFENSE (2.8%) ITT 61,100 $2,718,950 Precision Castparts 39,000 2,848,170 --------------- Total 5,567,120 - ------------------------------------------------------------------------------------- AIRLINES (0.5%) Delta Air Lines 178,900(b) 1,035,831 - ------------------------------------------------------------------------------------- BIOTECHNOLOGY (1.7%) Alexion Pharmaceuticals 29,100(b) 1,196,592 Vertex Pharmaceuticals 61,900(b) 2,206,116 --------------- Total 3,402,708 - ------------------------------------------------------------------------------------- CHEMICALS (2.6%) Celanese Series A 40,900 971,375 Ecolab 28,000 1,091,720 Potash Corp of Saskatchewan 32,300(c) 3,005,515 --------------- Total 5,068,610 - ------------------------------------------------------------------------------------- COMMERCIAL SERVICES & SUPPLIES (1.4%) GEO Group 147,200(b) 2,734,976 - ------------------------------------------------------------------------------------- COMMUNICATIONS EQUIPMENT (4.2%) Blue Coat Systems 160,200(b) 2,649,708 Brocade Communications Systems 424,000(b) 3,315,680 F5 Networks 70,300(b) 2,431,677 --------------- Total 8,397,065 - ------------------------------------------------------------------------------------- CONSTRUCTION & ENGINEERING (2.1%) Fluor 26,400 1,354,056 Foster Wheeler 80,600(b) 1,914,250 Quanta Services 39,200(b) 906,696 --------------- Total 4,175,002 - ------------------------------------------------------------------------------------- CONSUMER FINANCE (1.7%) Discover Financial Services 329,400 3,382,938 - ------------------------------------------------------------------------------------- DIVERSIFIED CONSUMER SERVICES (7.9%) Apollo Group Cl A 49,400(b) 3,513,328 Coinstar 276,700(b) 7,387,890 Corinthian Colleges 90,300(b) 1,528,779 DeVry 63,500 3,177,540 --------------- Total 15,607,537 - ------------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES (1.9%) CME Group 3,500 1,088,885 Interactive Brokers Group Cl A 170,300(b) 2,644,759 --------------- Total 3,733,644 - ------------------------------------------------------------------------------------- DIVERSIFIED TELECOMMUNICATION SERVICES (1.6%) Qwest Communications Intl 767,400 3,184,710 - ------------------------------------------------------------------------------------- ELECTRIC UTILITIES (1.7%) ITC Holdings 75,900 3,442,824 - ------------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT (1.4%) General Cable 74,000(b) 2,780,920 - ------------------------------------------------------------------------------------- ENERGY EQUIPMENT & SERVICES (4.2%) Cameron Intl 83,600(b) 2,365,880 Natl Oilwell Varco 31,200(b) 1,018,992 Noble 64,400 1,948,100 Weatherford Intl 150,100(b,c) 2,935,956 --------------- Total 8,268,928 - ------------------------------------------------------------------------------------- FOOD PRODUCTS (0.3%) Archer-Daniels-Midland 20,200 540,754 - ------------------------------------------------------------------------------------- HEALTH CARE EQUIPMENT & SUPPLIES (3.1%) Alcon 25,900(c) 3,007,508 Beckman Coulter 17,224 984,179 NuVasive 47,200(b) 2,105,120 --------------- Total 6,096,807 - -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 9 PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) HEALTH CARE PROVIDERS & SERVICES (4.3%) AmerisourceBergen 73,000 $1,295,020 Community Health Systems 73,700(b) 1,860,925 Express Scripts 46,000(b) 3,162,500 WellPoint 42,600(b) 2,167,914 --------------- Total 8,486,359 - ------------------------------------------------------------------------------------- HEALTH CARE TECHNOLOGY (0.9%) Cerner 28,300(b) 1,762,807 - ------------------------------------------------------------------------------------- HOTELS, RESTAURANTS & LEISURE (2.6%) Bally Technologies 78,800(b) 2,357,696 Yum! Brands 82,600 2,753,884 --------------- Total 5,111,580 - ------------------------------------------------------------------------------------- HOUSEHOLD DURABLES (2.9%) Lennar Cl A 215,900 2,092,071 Meritage Homes 84,900(b) 1,601,214 NVR 4,300(b) 2,160,277 --------------- Total 5,853,562 - ------------------------------------------------------------------------------------- INSURANCE (3.4%) AFLAC 42,600 1,324,434 Principal Financial Group 49,449 931,619 Prudential Financial 118,842 4,423,299 --------------- Total 6,679,352 - ------------------------------------------------------------------------------------- INTERNET SOFTWARE & SERVICES (5.5%) Equinix 22,300(b) 1,622,102 SAVVIS 816,368(b) 9,355,577 --------------- Total 10,977,679 - ------------------------------------------------------------------------------------- IT SERVICES (2.9%) Cognizant Technology Solutions Cl A 101,000(b) 2,696,700 MasterCard Cl A 18,100 3,028,311 --------------- Total 5,725,011 - ------------------------------------------------------------------------------------- LIFE SCIENCES TOOLS & SERVICES (1.9%) Illumina 47,600(b) 1,853,544 Life Technologies 45,500(b) 1,898,260 --------------- Total 3,751,804 - ------------------------------------------------------------------------------------- MACHINERY (1.7%) Cummins 29,300 1,031,653 Joy Global 67,800 2,421,816 --------------- Total 3,453,469 - ------------------------------------------------------------------------------------- METALS & MINING (2.2%) Agnico-Eagle Mines 55,900(c) 2,933,632 United States Steel 42,900 1,533,246 --------------- Total 4,466,878 - ------------------------------------------------------------------------------------- MULTILINE RETAIL (1.6%) Big Lots 78,200(b) 1,644,546 Kohl's 35,300(b) 1,509,075 --------------- Total 3,153,621 - ------------------------------------------------------------------------------------- MULTI-UTILITIES (0.5%) Public Service Enterprise Group 29,000 946,270 - ------------------------------------------------------------------------------------- OIL, GAS & CONSUMABLE FUELS (3.4%) Massey Energy 41,700 814,818 Noble Energy 74,200 4,375,574 Southwestern Energy 41,200(b) 1,600,620 --------------- Total 6,791,012 - ------------------------------------------------------------------------------------- PERSONAL PRODUCTS (0.9%) Mead Johnson Nutrition Cl A 57,500(b) 1,826,775 - ------------------------------------------------------------------------------------- PHARMACEUTICALS (1.9%) Allergan 24,600 1,170,468 King Pharmaceuticals 116,000(b) 1,117,080 Mylan 117,500(b) 1,533,375 --------------- Total 3,820,923 - ------------------------------------------------------------------------------------- PROFESSIONAL SERVICES (3.0%) FTI Consulting 118,600(b) 6,015,392 - ------------------------------------------------------------------------------------- ROAD & RAIL (1.4%) CSX 66,100 2,289,043 JB Hunt Transport Services 17,300 528,169 --------------- Total 2,817,212 - -------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments. - -------------------------------------------------------------------------------- 10 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - --------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED) ISSUER SHARES VALUE(a) SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (8.2%) Intersil Cl A 241,900 $3,040,683 Marvell Technology Group 512,700(b,c) 5,967,828 MEMC Electronic Materials 53,800(b) 958,178 Microsemi 455,000(b) 6,279,000 --------------- Total 16,245,689 - ------------------------------------------------------------------------------------- SOFTWARE (8.2%) BMC Software 79,700(b) 2,693,063 Macrovision Solutions 395,611(b) 8,628,277 McAfee 118,100(b) 4,982,639 --------------- Total 16,303,979 - ------------------------------------------------------------------------------------- SPECIALTY RETAIL (1.6%) Sherwin-Williams 60,200 3,235,750 - ------------------------------------------------------------------------------------- TRANSPORTATION INFRASTRUCTURE (0.9%) Aegean Marine Petroleum Network 122,800(c) 1,854,280 - ------------------------------------------------------------------------------------- WIRELESS TELECOMMUNICATION SERVICES (1.1%) NII Holdings 66,600(b) 1,270,062 SBA Communications Cl A 34,700(b) 851,538 --------------- Total 2,121,600 - ------------------------------------------------------------------------------------- TOTAL COMMON STOCKS (Cost: $212,951,824) $198,821,378 - ------------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (Cost: $212,951,824)(d) $198,821,378 =====================================================================================
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, 2009, the value of foreign securities represented 9.9% of net assets. (d) At June 30, 2009, the cost of securities for federal income tax purposes was approximately $212,952,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was: Unrealized appreciation $15,418,000 Unrealized depreciation (29,549,000) ----------------------------------------------------------- Net unrealized depreciation $(14,131,000) -----------------------------------------------------------
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. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 11 PORTFOLIO OF INVESTMENTS (continued) ------------------------------------------- FAIR VALUE MEASUREMENTS Statement of Financial Accounting Standards No. 157 (SFAS 157) requires 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. SFAS 157 establishes a fair value hierarchy for inputs used in measuring fair value 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. When a valuation uses multiple inputs from varying levels of the hierarchy, the hierarchy level is determined based on the lowest level input or inputs that are significant to the fair value measurement in its entirety. 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 - -------------------------------------------------------------------------------- 12 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- FAIR VALUE MEASUREMENTS (CONTINUED) prices reflect fair value at the close of the 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 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 flow, and comparable company data. The following table is a summary of the inputs used to value the Fund's investments as of June 30, 2009:
FAIR VALUE AT JUNE 30, 2009 --------------------------------------------------------- LEVEL 1 LEVEL 2 QUOTED PRICES OTHER LEVEL 3 IN ACTIVE SIGNIFICANT SIGNIFICANT MARKETS FOR OBSERVABLE UNOBSERVABLE DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL - --------------------------------------------------------------------------------------- Equity Securities Common Stocks $198,821,378(a) $-- $-- $198,821,378
(a) All industry classifications are identified in the Portfolio of Investments. 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 1-800-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 the RiverSource Family of Funds at 1(800) 221-2450. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 13 STATEMENT OF ASSETS AND LIABILITIES -------------------------------------------- JUNE 30, 2009 (UNAUDITED)
ASSETS Investments in securities, at value (identified cost $212,951,824) $ 198,821,378 Capital shares receivable 516,935 Dividends receivable 56,996 Receivable for investment securities sold 2,050,689 Other assets 4,764 - -------------------------------------------------------------------------------- Total assets 201,450,762 - -------------------------------------------------------------------------------- LIABILITIES Bank overdraft 1,654,135 Capital shares payable 853,135 Accrued investment management services fees 4,408 Accrued distribution fees 72,411 Accrued transfer agency fees 242,187 Accrued administrative services fees 329 Accrued plan administration services fees 1,058 Other accrued expenses 55,992 - -------------------------------------------------------------------------------- Total liabilities 2,883,655 - -------------------------------------------------------------------------------- Net assets applicable to outstanding capital stock $ 198,567,107 - -------------------------------------------------------------------------------- REPRESENTED BY Capital stock -- $1 par value $ 13,104,144 Additional paid-in capital 387,051,425 Excess of distributions over net investment income (1,420,189) Accumulated net realized gain (loss) (186,037,827) Unrealized appreciation (depreciation) on investments (14,130,446) - -------------------------------------------------------------------------------- Total -- representing net assets applicable to outstanding capital stock $ 198,567,107 - --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE NET ASSETS SHARES OUTSTANDING NET ASSET VALUE PER SHARE Class A $141,076,467 8,847,691 $15.95(1) Class B $ 6,184,578 476,711 $12.97 Class C $ 39,744,734 3,055,818 $13.01 Class R2 $ 8,581,288 544,374 $15.76 Class R5 $ 2,980,040 179,550 $16.60 - -----------------------------------------------------------------------------------------
(1) The maximum offering price per share for Class A is $16.92. 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. - -------------------------------------------------------------------------------- 14 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT STATEMENT OF OPERATIONS -------------------------------------------------------- SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED)
INVESTMENT INCOME Income: Dividends $ 752,938 Less foreign taxes withheld (14,237) - ------------------------------------------------------------------------------- Total income 738,701 - ------------------------------------------------------------------------------- Expenses: Investment management services fees 826,140 Distribution fees Class A 160,289 Class B 33,596 Class C 181,865 Class R2 18,518 Transfer agency fees Class A 515,563 Class B 26,653 Class C 145,726 Class R2 28,564 Class R5 29,824 Administrative services fees 1,324 Plan administration services fees -- Class R2 1,058 Compensation of board members 3,205 Custodian fees 41,300 Printing and postage 62,101 Registration fees 49,915 Professional fees 12,666 Other 17,571 - ------------------------------------------------------------------------------- Total net expenses 2,155,878 - ------------------------------------------------------------------------------- Investment income (loss) -- net $ (1,417,177) - ------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) -- NET Net realized gain (loss) on security transactions (27,607,631) Net change in unrealized appreciation (depreciation) on investments 62,589,327 - ------------------------------------------------------------------------------- Net gain (loss) on investments 34,981,696 - ------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 33,564,519 - -------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 15 STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30, 2009 DEC. 31, 2008 (UNAUDITED) OPERATIONS Investment income (loss) -- net $ (1,417,177) $ (3,864,795) Net realized gain (loss) on investments (27,607,631) (105,596,750) Net change in unrealized appreciation (depreciation) on investments 62,589,327 (87,191,559) - -------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 33,564,519 (196,653,104) - -------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS Proceeds from sales Class A shares 4,716,389 17,682,084 Class B shares 226,353 450,517 Class C shares 3,677,851 6,116,360 Class D shares* N/A 3,740,588 Class R2 shares 2,457,578 4,595,622 Class R5 shares 3,074,485 6,614,984 Conversions from Class B to Class A Class A shares 1,948,225 6,620,016 Class B shares (1,948,225) (6,620,016) Conversions from Class D to Class C Class C shares N/A 40,888,187 Class D shares* N/A (40,888,187) Payments for redemptions Class A shares (19,191,000) (70,710,765) Class B shares (967,587) (7,599,401) Class C shares (5,519,731) (12,325,851) Class D shares* N/A (6,577,068) Class R2 shares (1,598,430) (2,174,668) Class R5 shares (18,955,947) (2,589,574) - -------------------------------------------------------------------------------------------------- Increase (decrease) in net assets from capital share transactions (32,080,039) (62,777,172) - -------------------------------------------------------------------------------------------------- Proceeds from regulatory settlement (Note 7) 141,913 298,553 - -------------------------------------------------------------------------------------------------- Total increase (decrease) in net assets 1,626,393 (259,131,723) Net assets at beginning of period 196,940,714 456,072,437 - -------------------------------------------------------------------------------------------------- Net assets at end of period $198,567,107 $ 196,940,714 - -------------------------------------------------------------------------------------------------- Excess of distributions over net investment income $ (1,420,189) $ (3,012) - --------------------------------------------------------------------------------------------------
* Effective May 16, 2008, Class D shares converted to Class C shares. Certain line items from the prior year have been renamed to conform to the current year presentation. The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- 16 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT FINANCIAL HIGHLIGHTS ----------------------------------------------------------- CLASS A PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004 Net asset value, beginning of period $13.41 $26.01 $22.47 $21.30 $19.10 $17.66 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(b) (.09) (.21) (.28) (.17) (.19) (.19) Net gains (losses) (both realized and unrealized) 2.62 (12.41) 3.82 1.34 2.39 1.63 - --------------------------------------------------------------------------------------------------------------------- Total from investment operations 2.53 (12.62) 3.54 1.17 2.20 1.44 - --------------------------------------------------------------------------------------------------------------------- Proceeds from regulatory settlement .01(c) .02(d) -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $15.95 $13.41 $26.01 $22.47 $21.30 $19.10 - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $141 $131 $307 $305 $347 $382 - --------------------------------------------------------------------------------------------------------------------- Total expenses(e) 1.96%(f) 1.58% 1.49% 1.51% 1.52% 1.51% - --------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (1.91%)(f) (.98%) (1.11%) (.77%) (.97%) (1.05%) - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 82% 229% 200% 204% 176% 212% - --------------------------------------------------------------------------------------------------------------------- Total return(g) 18.94%(c),(h)(48.44%)(d) 15.75% 5.45% 11.52% 8.15% - ---------------------------------------------------------------------------------------------------------------------
CLASS B PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004 Net asset value, beginning of period $10.95 $21.41 $18.63 $17.81 $16.09 $15.00 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(b) (.12) (.31) (.39) (.28) (.29) (.27) Net gains (losses) (both realized and unrealized) 2.13 (10.17) 3.17 1.10 2.01 1.36 - --------------------------------------------------------------------------------------------------------------------- Total from investment operations 2.01 (10.48) 2.78 .82 1.72 1.09 - --------------------------------------------------------------------------------------------------------------------- Proceeds from regulatory settlement .01(c) .02(d) -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $12.97 $10.95 $21.41 $18.63 $17.81 $16.09 - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $6 $8 $33 $42 $60 $75 - --------------------------------------------------------------------------------------------------------------------- Total expenses(e) 2.72%(f) 2.34% 2.24% 2.26% 2.27% 2.26% - --------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (1.97%)(f) (1.74%) (1.86%) (1.52%) (1.72%) (1.80%) - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 82% 229% 200% 204% 176% 212% - --------------------------------------------------------------------------------------------------------------------- Total return(g) 18.45%(c),(h)(48.86%)(d) 14.92% 4.60% 10.69% 7.27% - ---------------------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 17 FINANCIAL HIGHLIGHTS (continued) ----------------------------------------------- CLASS C PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004 Net asset value, beginning of period $10.98 $21.46 $18.68 $17.84 $16.12 $15.03 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(b) (.12) (.29) (.39) (.28) (.29) (.27) Net gains (losses) (both realized and unrealized) 2.14 (10.21) 3.17 1.12 2.01 1.36 - --------------------------------------------------------------------------------------------------------------------- Total from investment operations 2.02 (10.50) 2.78 .84 1.72 1.09 - --------------------------------------------------------------------------------------------------------------------- Proceeds from regulatory settlement .01(c) .02(d) -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $13.01 $10.98 $21.46 $18.68 $17.84 $16.12 - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $40 $35 $37 $39 $50 $61 - --------------------------------------------------------------------------------------------------------------------- Total expenses(e) 2.69%(f) 2.34% 2.24% 2.26% 2.27% 2.26% - --------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (1.93%)(f) (1.74%) (1.86%) (1.52%) (1.72%) (1.80%) - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 82% 229% 200% 204% 176% 212% - --------------------------------------------------------------------------------------------------------------------- Total return(g) 18.49%(c),(h)(48.84%)(d) 14.88% 4.65% 10.67% 7.25% - ---------------------------------------------------------------------------------------------------------------------
CLASS R2* PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004 Net asset value, beginning of period $13.27 $25.81 $22.34 $21.21 $19.05 $17.65 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(b) (.06) (.25) (.34) (.22) (.24) (.23) Net gains (losses) (both realized and unrealized) 2.54 (12.31) 3.81 1.35 2.40 1.63 - --------------------------------------------------------------------------------------------------------------------- Total from investment operations 2.48 (12.56) 3.47 1.13 2.16 1.40 - --------------------------------------------------------------------------------------------------------------------- Proceeds from regulatory settlement .01(c) .02(d) -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $15.76 $13.27 $25.81 $22.34 $21.21 $19.05 - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $9 $7 $10 $3 $2 $1 - --------------------------------------------------------------------------------------------------------------------- Total expenses(e) 2.19%(f) 1.84% 1.74% 1.76% 1.77% 1.76% - --------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (1.43%)(f) (1.24%) (1.36%) (1.02%) (1.22%) (1.30%) - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 82% 229% 200% 204% 176% 212% - --------------------------------------------------------------------------------------------------------------------- Total return(g) 18.76%(c),(h)(48.59%)(d) 15.53% 5.28% 11.34% 7.93% - ---------------------------------------------------------------------------------------------------------------------
See accompanying Notes to Financial Highlights. - -------------------------------------------------------------------------------- 18 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- CLASS R5* PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004 Net asset value, beginning of period $13.90 $26.79 $23.03 $21.73 $19.38 $17.84 - --------------------------------------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income (loss)(b) (.09) (.09) (.16) (.06) (.09) (.10) Net gains (losses) (both realized and unrealized) 2.78 (12.82) 3.92 1.36 2.44 1.64 - --------------------------------------------------------------------------------------------------------------------- Total from investment operations 2.69 (12.91) 3.76 1.30 2.35 1.54 - --------------------------------------------------------------------------------------------------------------------- Proceeds from regulatory settlement .01(c) .02(d) -- -- -- -- - --------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $16.60 $13.90 $26.79 $23.03 $21.73 $19.38 - --------------------------------------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA Net assets, end of period (in millions) $3 $17 $26 $22 $20 $18 - --------------------------------------------------------------------------------------------------------------------- Total expenses(e) 1.22%(f) 1.02% 1.00% 1.01% 1.00% 1.00% - --------------------------------------------------------------------------------------------------------------------- Net investment income (loss) (.45%)(f) (.42%) (.62%) (.27%) (.45%) (.54%) - --------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 82% 229% 200% 204% 176% 212% - --------------------------------------------------------------------------------------------------------------------- Total return 19.42%(c),(h)(48.12%)(c) 16.33% 5.98% 12.13% 8.63% - ---------------------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS * Effective June 13, 2009, Class R and Class I shares were redesignated as Class R2 and Class R5 shares, respectively. (a) For a share outstanding throughout the period. Rounded to the nearest cent. (b) Per share amounts have been calculated using the average shares outstanding method. (c) During the six months ended June 30, 2009, the Fund received its portion of the proceeds from regulatory settlements between an unaffiliated third party and the Securities and Exchange Commission (SEC). Had the Fund not received these proceeds, the total return would have been lower by 0.07%. (d) In June 2008, the Fund received a portion of the proceeds from a regulatory settlement between an unaffiliated third party and the SEC, which increased the net asset value per share and total return by $0.02 and 0.07%, respectively. (e) 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 above reported expense ratios. (f) Adjusted to an annual basis. The Non-Recurring Charges (see Note 3 to the Financial Statements) have not been annualized, as they represent a one-time occurrence. (g) Total return does not reflect payment of a sales charge. Effective June 13, 2009, the 1% CDSC was eliminated for Class R2 shares. (h) Not annualized. (i) Six months ended June 30, 2009 (Unaudited). The accompanying Notes to Financial Statements are an integral part of this statement. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 19 NOTES TO FINANCIAL STATEMENTS -------------------------------------------------- (UNAUDITED AS OF JUNE 30, 2009) 1. ORGANIZATION Seligman Capital 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 500 million authorized shares of capital stock. The Fund invests primarily in common stock of medium-sized U.S. companies. The Fund offers Class A, Class B, Class C, Class R2 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 if originally purchased on or after June 13, 2009, will automatically convert to Class A shares one month after the completion of the eighth year of ownership. Class B shares originally purchased in the Fund on or before June 12, 2009 will convert to Class A shares in the month prior to the ninth year of ownership. - - Class C shares may be subject to a CDSC. - - Effective June 13, 2009, Class R and Class I shares were redesignated as Class R2 and Class R5 shares, respectively. Class R2 and Class R5 shares are offered without a front-end sales charge or CDSC to qualifying institutional investors. Prior to June 13, 2009, Class R shares (redesignated to Class R2 shares) charged a 1% CDSC on shares sold within one year of initial purchase. Effective May 16, 2008, Class D shares converted to Class C shares and as of this date the Fund no longer offers Class D 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 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. - -------------------------------------------------------------------------------- 20 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- 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. 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 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 RiverSource Investments, LLC (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 conditions as of the close of the NYSE. 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. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 21 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- 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. 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 the tax returns filed for the last three years. 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, - -------------------------------------------------------------------------------- 22 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- including amortization of premium, market discount and original issue discount using the effective interest method, is accrued daily. 3. 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. Effective June 29, 2009, the management fee is equal to a percentage of the Fund's average daily net assets that declines from 0.805% to 0.715% annually as the Fund's assets increase. Prior to June 29, 2009, the Investment Manager received a fee equal to a percentage of the Fund's average daily net assets that declined from 0.85% to 0.75% annually as the Fund's assets increased. The management fee for the six months ended June 30, 2009 was 0.85% of the Fund's average daily net assets. The reduction in the investment management services fee schedule on June 29, 2009 is related to the elimination of the administrative portion of the management fee that is now being charged separately to the Fund through the Administrative Services Agreement with Ameriprise Financial. See Administrative services fees below for more information. ADMINISTRATIVE SERVICES FEES Under an Administrative Services Agreement, effective June 29, 2009, the Fund pays Ameriprise Financial a 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% annually as the Fund's assets increase. The fee was 0.001% of the Fund's average daily net assets for the six months ended June 30, 2009 (annualized). Prior to June 29, 2009, Ameriprise Financial administered certain aspects of the Fund's business and other affairs for no additional fee. The fees payable under the Administrative Services Agreement beginning on June 29, 2009 are offset by corresponding decreases in the investment management fees charged to the Fund and the elimination of separate fees that were previously payable to State Street Bank and Trust Company, in its capacity as the Fund's prior administrative agent. 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, 2009, other expenses paid to this company were $815. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 23 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- 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 funds in the RiverSource Family of 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, RiverSource Service Corporation (the Transfer Agent) maintains Fund shareholder accounts and records and provides Fund shareholder services. Effective June 15, 2009, 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 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. These fees are included in the transfer agency fees in the Statement of Operations. Prior to June 15, 2009, Seligman Data Corp. (SDC) owned by six associated investment companies, including the Fund, provided shareholder servicing and transfer agency services to the Fund, as well as certain other Seligman funds. The Fund's ownership interest in SDC at June 30, 2009 is included in other assets in the Statement of Assets and Liabilities at cost of $2,199. In January 2009, the Board approved the Fund's termination of the shareholder servicing and transfer agency relationship with SDC and the engagement of RiverSource Service Corporation to provide shareholder servicing and transfer agency services. As a result of the Board's termination of the shareholder servicing and transfer agency relationship with SDC (which was SDC's sole business), SDC has exited the transfer agent business, effective June 15, 2009. For the period from Jan. 1, 2009 to June 15, 2009, SDC charged the Fund $385,776 for shareholder account and transfer agent services in accordance with a methodology approved by the Fund's Board. Class R5 shares (formerly designated Class I shares prior to June 13, 2009) received more limited shareholder services than the Fund's other classes of shares. SDC did not allocate to Class R5 the costs of any of its departments that did not provide services to the Class R5 shareholders. Costs of SDC directly attributable to the other classes - -------------------------------------------------------------------------------- 24 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- of the Fund were charged to those classes in proportion to their relative net asset values. Costs directly attributable to Class R5 shares were charged to Class R5. The remaining charges were allocated to all classes by SDC pursuant to a formula based on their net assets, shareholder transaction volumes and number of shareholder accounts. In connection with the termination of the Fund's relationship with SDC, the Fund incurred certain non-recurring charges including charges relating to the remaining periods of SDC's leases (the Non-Recurring Charges). These Non- Recurring Charges were incurred over a period from Jan. 28, 2009 to June 12, 2009, and amounted to $300,929 or 0.15% of the Fund's average daily net assets for the six months ended June 30, 2009 (not annualized). These Non-Recurring Charges are included in transfer agency fees in the Statement of Operations. The liability remaining at June 30, 2009 for Non-Recurring Charges amounted to $240,379 and is included within accrued transfer agency fees in the Statement of Assets and Liabilities. 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 SDC, including the payment of rent by SDC (the Guaranty). The lease and the related Guaranty expire in January 2019. The obligation of the Fund to pay any amount due under the Guaranty is limited to a specified percentage of the full amount, which generally is based on the Fund's percentage of the expenses billed by SDC to all Guarantors in the preceding calendar quarter. As of June 30, 2009, the Fund's total potential future obligation under the Guaranty over the life of the Guaranty is $413,800. The net present value of this obligation as of June 12, 2009 has been expensed as part of the aforementioned Non-Recurring Charges. PLAN ADMINISTRATION SERVICES FEES Under a Plan Administration Services Agreement, effective June 15, 2009, the Fund pays the Transfer Agent an annual fee at a rate of 0.25% of the Fund's average daily net assets attributable to Class R2 shares for the provision of various administrative, recordkeeping, communication and educational services. DISTRIBUTION FEES The Fund has an agreement with 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 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 - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 25 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- 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. For Class R shares (redesignated Class R2 shares on June 13, 2009), of the 0.50% fee, up to 0.25% of the fee was reimbursed for distribution expenses. The amount of distribution expenses incurred by the Distributor and not yet reimbursed (unreimbursed expense) was approximately $105,000, $5,583,000 and $203,000 for Class B, Class C and Class R (redesignated Class R2 on June 13, 2009) shares, respectively. These amounts are based on the most recent information available as of April 30, 2009, and may be recovered from future payments under the distribution plan or from CDSCs. 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 $10,432 for Class A, $3,461 for Class B, $893 for Class C and $0 for Class R2 shares for the six months ended June 30, 2009. Effective June 13, 2009, the 1% CDSC was eliminated for Class R2 shares. 4. SECURITIES TRANSACTIONS Cost of purchases and proceeds from sales of securities (other than short-term obligations) aggregated $153,107,806 and $175,678,576, respectively, for the six months ended June 30, 2009. Realized gains and losses are determined on an identified cost basis. - -------------------------------------------------------------------------------- 26 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- 5. CAPITAL SHARE TRANSACTIONS Transactions in shares of capital stock for the periods indicated are as follows:
SIX MONTHS ENDED YEAR ENDED JUNE 30, 2009 DEC. 31, 2008 - -------------------------------------------------------------------- CLASS A - -------------------------------------------------------------------- Sold 341,173 886,226 Converted from Class B shares(a) 132,970 337,823 Redeemed (1,370,535) (3,286,849) - -------------------------------------------------------------------- Net increase (decrease) (896,392) (2,062,800) - -------------------------------------------------------------------- CLASS B - -------------------------------------------------------------------- Sold 20,100 25,247 Converted to Class A shares(a) (164,525) (399,977) Redeemed (95,716) (433,825) - -------------------------------------------------------------------- Net increase (decrease) (240,141) (808,555) - -------------------------------------------------------------------- CLASS C - -------------------------------------------------------------------- Sold 322,060 383,570 Converted from Class D shares(b) N/A 1,917,832 Redeemed (485,379) (787,180) - -------------------------------------------------------------------- Net increase (decrease) (163,319) 1,514,222 - -------------------------------------------------------------------- CLASS D(b) - -------------------------------------------------------------------- Sold N/A 192,761 Redeemed N/A (338,159) Converted to Class C shares(b) N/A (1,917,832) - -------------------------------------------------------------------- Net increase (decrease) N/A (2,063,230) - -------------------------------------------------------------------- CLASS R2(c) - -------------------------------------------------------------------- Sold 176,037 223,755 Redeemed (122,443) (111,480) - -------------------------------------------------------------------- Net increase (decrease) 53,594 112,275 - -------------------------------------------------------------------- CLASS R5(c) - -------------------------------------------------------------------- Sold 225,176 360,300 Reinvested distributions (1,234,797) (131,509) - -------------------------------------------------------------------- Net increase (decrease) (1,009,621) 228,791 - --------------------------------------------------------------------
(a) Automatic conversion of Class B shares to Class A shares. (b) Effective May 16, 2008, Class D shares converted to Class C shares. (c) Effective June 13, 2009, Class R and Class I shares were redesignated as Class R2 and Class R5 shares, respectively. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 27 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- 6. 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 became effective June 18, 2009, replacing a prior credit facility. The credit facility agreement, which is a collective agreement between the Fund and certain other funds in the RiverSource Family of Funds, severally and not jointly, permits collective borrowings up to $475 million. The borrowers shall have the right, upon written notice to the Administrative Agent, to request an increase of up to $175 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 $650 million. Participation in such increase by any existing lender shall be at such lender's sole discretion. Interest is charged to each participating fund based on its borrowings at a rate equal to the federal funds rate plus 0.75%. 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 0.06% per annum. Under the prior credit facility which was effective until June 17, 2009, the Fund participated in a joint $200 million committed line of credit that was shared by substantially all funds in the Seligman Group of Investment Companies. The Board had limited the Fund's borrowings to 10% of its net assets. Borrowings pursuant to the credit facility were subject to interest at a rate equal to the overnight federal funds rate plus 0.50%. The Fund incurred a commitment fee of 0.12% per annum on its share of the unused portion of the credit facility. The credit facility may have been drawn upon only for temporary purposes and was subject to certain other customary restrictions. The Fund had no borrowings during the six months ended June 30, 2009. 7. PROCEEDS FROM REGULATORY SETTLEMENT As a result of settlements of administrative proceedings 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 $141,913 in June 2009 and $298,553 in June 2008, which represented the Fund's portion of the proceeds from the settlements (the Fund was not a party to the proceedings). The proceeds received by the Fund were recorded as an increase to additional paid-in capital. - -------------------------------------------------------------------------------- 28 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- 8. FEDERAL TAX INFORMATION Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of 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 (losses) were recorded by the Fund. For federal income tax purposes, the Fund had a capital loss carry-over of $114,546,958 at Dec. 31, 2008, that if not offset by capital gains will expire as follows:
2010 2016 $50,722,077 $63,824,881
Because the measurement periods for a regulated investment company's income are different for excise tax purposes versus income tax purposes, special rules are in place to protect the amount of earnings and profits needed to support excise tax distributions. As a result, the Fund is permitted to treat net capital losses realized between Nov. 1, 2008 and its fiscal year end (post-October loss) as occurring on the first day of the following tax year. At Dec. 31, 2008, the Fund had a post-October loss of $38,635,361 that is treated for income tax purposes as occurring on Jan. 1, 2009. 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 is no assurance that the Fund will be able to utilize all of its capital loss carry-over before it expires. 9. 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 Aug. 21, 2009, 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. 10. 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 - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 29 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- 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 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, asking the U.S. Supreme Court to stay the District Court proceedings while the U.S. 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. 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 Funds' Boards of Directors/Trustees. On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In late 2003, Seligman conducted an extensive internal review - -------------------------------------------------------------------------------- 30 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT - -------------------------------------------------------------------------------- concerning mutual fund trading practices. Seligman's review, which covered the period 2001-2003, noted one arrangement that permitted frequent trading in certain open-end registered investment companies managed by Seligman (the Seligman Funds); this arrangement was in the process of being closed down by Seligman before September 2003. Seligman identified three other arrangements that permitted frequent trading, all of which had been terminated by September 2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these four arrangements to its clients and to shareholders of the Seligman Funds. Seligman also provided information concerning mutual fund trading practices to the SEC and the Office of the Attorney General of the State of New York (NYAG). In September 2006, the NYAG commenced a civil action in New York State Supreme Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the Seligman Parties), alleging, in substance, that the Seligman Parties permitted various persons to engage in frequent trading and, as a result, the prospectus disclosure used by the registered investment companies then managed by Seligman was and had been misleading. The NYAG included other related claims and also claimed that the fees charged by Seligman to the Seligman Funds were excessive. On March 13, 2009, without admitting or denying any violations of law or wrongdoing, the Seligman Parties entered into a stipulation of settlement with the NYAG and settled the claims made by the NYAG. Under the terms of the settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement resolved all outstanding matters between the Seligman Parties and the NYAG. In addition to the foregoing matter, the New York staff of the SEC indicated in September 2005 that it was considering recommending to the Commissioners of the SEC the instituting of a formal action against Seligman and Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds. Seligman responded to the staff in October 2005 that it believed that any action would be both inappropriate and unnecessary, especially in light of the fact that Seligman had previously resolved the underlying issue with the Independent Directors of the Seligman Funds and made recompense to the affected Seligman Funds. There have been no further developments with the SEC on this matter. 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 - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 31 NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------- 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 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. - -------------------------------------------------------------------------------- 32 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 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 the RiverSource Family of Funds at 1(800) 221-2450; contacting your financial intermediary; visiting riversource.com/funds; 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 riversource.com/funds; or searching the website of the SEC at www.sec.gov. - -------------------------------------------------------------------------------- SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT 33 CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ----------------------- On March 11, 2009, Ernst & Young LLP was selected as the Fund's independent registered public accounting firm for the 2009 fiscal year. A majority of the Fund's Board of Directors, including a majority of the Independent Directors, approved the appointment of Ernst & Young LLP effective March 18, 2009. The predecessor independent registered public accounting firm's reports on the Fund's financial statements for the year ended Dec. 31, 2008 and the year ended Dec. 31, 2007 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During such fiscal periods and through March 11, 2009 there were no disagreements between the Fund and the predecessor independent registered public accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which such disagreements, if not resolved to the satisfaction of the predecessor independent registered public accounting firm, would have caused them to make reference to the subject matter of the disagreement in connection with their reports on the financial statements for such fiscal periods. - -------------------------------------------------------------------------------- 34 SELIGMAN CAPITAL FUND -- 2009 SEMIANNUAL REPORT SELIGMAN CAPITAL FUND 734 Ameriprise Financial Center Minneapolis, MN 55474 SELIGMAN.COM This report must be accompanied or preceded by the Fund's current prospectus. Seligman mutual funds are part of the RiverSource Family of Funds, and are distributed by RiverSource Fund Distributors, Inc., Member FINRA, and managed by RiverSource Investments, LLC. RiverSource and Threadneedle are part of Ameriprise Financial, Inc. Seligman is an offering brand of RiverSource Investments. (SELIGMAN LOGO) (C)2009 RiverSource Investments, LLC. SL-9942 A (8/09)
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. The complete schedule of investments is included in Item 1 of this Form N-CSR. 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. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable. Item 10. Submission of matters to a vote of security holders. Not applicable. Item 11. Controls and Procedures. (a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's Principal Financial Officer and Principal Executive Officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no changes in the registrant's internal controls over financial reporting that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 12. Exhibits. (a)(1) Not applicable for semi-annual reports. (a)(2) Separate certification for the Registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached as EX.99.CERT. (a)(3) Not applicable. (b) A certification by the Registrant's principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached as EX.99.906 CERT. 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 Capital Fund, Inc. By /s/ Patrick T. Bannigan --------------------------------- Patrick T. Bannigan President and Principal Executive Officer Date September 2, 2009 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/ Patrick T. Bannigan --------------------------------- Patrick T. Bannigan President and Principal Executive Officer Date September 2, 2009 By /s/ Jeffrey P. Fox --------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer Date September 2, 2009 EX-99.CERT 2 c52550exv99wcert.txt EX-99.CERT Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Patrick T. Bannigan, certify that: 1. I have reviewed this report on Form N-CSR of Seligman Capital Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 24, 2009 /s/ Patrick T. Bannigan - ---------------------------------------- Name: Patrick T. Bannigan Title: President and Principal Executive Officer Certification Pursuant to 270.30a-2 of the Investment Company Act of 1940 I, Jeffrey P. Fox, certify that: 1. I have reviewed this report on Form N-CSR of Seligman Capital Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of a date within 90 days prior to the filing date of this report based on such evaluation; d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 24, 2009 /s/ Jeffrey P. Fox - ---------------------------------------- Name: Jeffrey P. Fox Title: Treasurer and Principal Financial Officer EX-99.906CERT 3 c52550exv99w906cert.txt EX-99.906CERT CERTIFICATION SELIGMAN CAPITAL FUND, INC. (the Registrant) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Each of the undersigned below certifies that 1. This report on Form N-CSR of the Registrant (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: August 24, 2009 /s/ Patrick T. Bannigan --------------------------------- Patrick T. Bannigan President and Principal Executive Officer Date: August 24, 2009 /s/ Jeffrey P. Fox --------------------------------- Jeffrey P. Fox Treasurer and Principal Financial Officer A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO THE REGISTRANT AND WILL BE RETAINED BY THE REGISTRANT AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----