nv30bv2
 
First Quarter Report
(TY LOGO)
 
Tri-Continental Corporation
 
Quarterly Report for
the Period Ended
March 31, 2010
 
 
 
 
Tri-Continental Corporation seeks future growth of both capital and income while providing reasonable current income.

 

 
Letter to Stockholders ­ ­
 
Dear Stockholders,
 
I am pleased to present the quarterly stockholder report for Tri-Continental Corporation (the Fund). The report contains the Fund’s investment results and portfolio of investments as of March 31, 2010.
 
For the three months ended March 31, 2010, the Fund’s total return based on net asset value rose 6.21%, and its total return based on market price rose 6.90%. During the same 3-month period, the S&P 500 Index gained 5.39% and the Lipper Large-Cap Core Funds Index gained 4.83%.
 
Under the earned distribution policy, the Fund paid a distribution on March 29, 2010 of $0.04 per share of common stock of the Fund. Distributions are based upon amounts distributed by underlying portfolio companies owned by the Fund.
 
The Fund continues to offer several distribution payment options. Stockholders should assess their income needs and consider investing a portion of their distributions in additional shares of the Fund. The options available with respect to Fund distribution payments are:
 
>  100% of distribution reinvested in additional shares
 
>  75% of distribution reinvested / 25% of distribution paid in cash
 
>  50% of distribution reinvested / 50% of distribution paid in cash
 
>  100% of distribution paid in cash
 
You may change your payment election by contacting your financial advisor or by calling the Fund’s Stockholder Servicing Agent at 800.221.2450, 7 a.m. to 6 p.m. Central time.

 

 
 
On April 30, 2010, Ameriprise Financial, Inc., the parent company of RiverSource Investments, LLC — the Fund’s investment manager, acquired the long-term asset management business of Columbia Management Group, LLC, bringing together the fund families of Columbia Management and RiverSource Investments. While the investment manager for the Fund, RiverSource Investments, LLC, will remain the same, its name has changed to Columbia Management Investment Advisers, LLC. The Fund’s Stockholder Servicing Agent, RiverSource Service Corporation, has been renamed Columbia Management Investment Services Corp.
 
On behalf of the Board, we would like to thank you for your continued support of the Fund.
 
-s- STEPHEN R. LEWIS, JR.
Stephen R. Lewis, Jr.
Chairman of the Board

 
For more information
go online to Tricontinental.com
or Seligman.com; or call
800.221.2450.
Customer Service Representatives
are available to answer
your questions Monday
through Friday from
7 a.m. to 6 p.m.
Central time.
 

 

 
Your Fund at a Glance ­ ­
(Unaudited)
 
FUND SUMMARY
 
>  Tri-Continental Corporation (the Fund) common stock gained 6.21%, based on net asset value, and 6.90%, based on market price (excluding sales charge) for the 3-month period ended March 31, 2010.
 
>  The Fund outperformed its benchmark, the S&P 500 Index, which gained 5.39% for the 3-month period.
 
>  The Fund outperformed the Lipper Large-Cap Core Funds Index, which rose 4.83% for the 3 months.
 
ANNUALIZED TOTAL RETURNS (for period ended March 31, 2010)
 
                                         
    3 months*     1 year     3 years     5 years     10 years  
Tri-Continental Corporation
                                       
Market Price
    +6.90%       +48.20%       -11.40%       -1.67%       -1.82%  
                                         
Net Asset Value
    +6.21%       +51.71%       -10.07%       -1.69%       -2.61%  
                                         
S&P 500 Index(1) (unmanaged)
    +5.39%       +49.77%       -4.17%       +1.92%       -0.65%  
                                         
Lipper Large-Cap Core Funds Index(2)
    +4.83%       +48.66%       -3.68%       +2.03%       -1.15%  
                                         
Lipper Large-Cap Core Funds Average(3)
    +4.93%       +48.49%       -4.00%       +1.84%       -0.15%  
                                         
 
* 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 sold, 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 visiting seligman.com.
 
Returns reflect changes in market price or net asset value, as applicable, and assume reinvestment of distributions. Returns do not reflect the deduction of taxes that investors may pay on distributions or the sale of shares.
 
The indices and the average do not reflect the effects of sales charges, expenses (excluding Lipper) and taxes. It is not possible to invest directly in an index or an average.
 
(1) The Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index), an unmanaged index of common stocks, is frequently used as a general measure of market performance. The index reflects reinvestment of all distributions and changes in market prices.

2  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 
(2) The Lipper Large-Cap Core Funds Index (the Lipper Index) includes the 30 largest open-end large-cap core funds tracked by Lipper Inc. The Lipper Index’s returns include net reinvested distributions.*
 
(3) The Lipper Large-Cap Core Funds Average (the Lipper Average) includes open-end funds that, by portfolio practice, invest at least 75% of their assets in companies with market capitalizations (on a three-year weighted basis) above Lipper’s U.S. Diversified Equity large-cap floor. Large-cap core funds typically have an average price-to-earnings ratio, price-to-book ratio, and three-year sales-per-share growth value relative to the S&P 500 Index. The Lipper Average’s returns include net reinvested distributions.*
 
* On Oct. 1, 2009 the Lipper Index replaced the Lipper Average as the Fund’s secondary benchmark. The Lipper Average includes all funds categorized by Lipper within the broad universe of open-end funds in the Lipper Average, whereas the Lipper Index includes only a select group of open-end funds from the Lipper Average, as described above. This change was made to bring the selection of the secondary benchmark in line with the practice of the Fund Family, which would permit a common stockholder experience and provide a more focused peer group for performance comparison purposes. Information on both the Lipper Index and the Lipper Average will be included for a one-year transition period. Thereafter, only the Lipper Index will be included. Although the Fund is a closed-end fund, the Lipper Index and Lipper Average are included because they provide a broader competitor base than the equivalent Lipper closed-end universes.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  3

 

 
Your Fund at a Glance (continued) ­ ­
 
 
PRICE PER SHARE
 
                 
    March 31, 2010     Dec. 31, 2009  
Market price
  $ 12.27     $ 11.52  
                 
Net asset value
    14.53       13.73  
                 
 
DIVIDEND AND CAPITAL GAIN INFORMATION PER COMMON SHARE
(for the three months ended March 31, 2010)
 
                         
    Capital gain (loss)(a)  
Distributions paid(b)   Realized     Unrealized gain(c)     Unrealized loss(c)  
$0.04
  $ 0.28     $ 1.84     $ (1.53 )
                         
 
(a) Per share amounts based on outstanding Common shares as of March 31, 2010.
(b) Preferred Stockholders were paid dividends totaling $0.625 per share.
(c) Represents the per Common share amount of gross unrealized gain or loss of portfolio securities as of March 31, 2010.
 
The net asset value of the Fund’s shares may not always correspond to the market price of such shares. Common stock of many closed-end funds frequently trade at a discount from their net asset value. The Fund is subject to stock market risk, which is the risk that stock prices overall will decline over short or long periods, adversely affecting the value of an investment in the Fund.
 
Securities selected using quantitative methods may perform differently from the market as a whole for many reasons, including the factors used in building the quantitative analytical framework, the weights placed on each factor, and changing sources of market returns, among others. There can be no assurance that these methodologies will enable the Fund to achieve its objective.

4  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 
STYLE MATRIX
 
                 
STYLE        
VALUE   BLEND   GROWTH        
        X   LARGE    
            MEDIUM   SIZE
            SMALL    
 

Shading within the style matrix indicates 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 fund, and may serve as a guideline for helping you build a portfolio.
 
Investment products, including shares of 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.
 
PORTFOLIO BREAKDOWN(1) (at March 31, 2010)
         
Consumer Discretionary
    10.5%  
         
Consumer Staples
    5.2%  
         
Energy
    15.4%  
         
Financials
    18.7%  
         
Health Care
    15.9%  
         
Industrials
    9.4%  
         
Information Technology
    13.8%  
         
Materials
    3.7%  
         
Telecommunication Services
    5.1%  
         
Utilities
    2.0%  
         
Other(2)
    0.3%  
         
 
(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). The Fund’s composition is subject to change.
 
(2) Cash & Cash Equivalents.
 
The sectors identified above are based on the Global Industry Classification Standard (GICS), which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. and Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  5

 

 
Your Fund at a Glance (continued) ­ ­
 
 
TOP TEN HOLDINGS(1) (at March 31, 2010)
         
Apple, Inc. 
    6.1%  
         
Chevron Corp. 
    5.5%  
         
Pfizer, Inc. 
    4.0%  
         
AT&T, Inc. 
    3.5%  
         
Johnson & Johnson
    3.3%  
         
Home Depot, Inc. 
    3.2%  
         
ConocoPhillips
    3.2%  
         
Bank of America Corp. 
    2.6%  
         
General Electric Co. 
    2.4%  
         
Merck & Co., Inc. 
    2.2%  
         
 
(1) Percentages indicated are based upon total investments (excluding Investments of Cash Collateral Received for Securities on Loan and Cash & Cash Equivalents).
 
For further detail about these holdings, please refer to the section entitled “Portfolio of Investments.”
 
Fund holdings are as of the date given, are subject to change at any time, and are not recommendations to buy or sell any security.

6  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
Portfolio of Investments ­ ­
 
March 31, 2010 (Unaudited)
(Percentages represent value of investments compared to net assets)
 
Investments in Securities
 
             
Common Stocks (99.7%)
Issuer   Shares     Value(a)
 
Aerospace & Defense (2.2%)
General Dynamics Corp.
    77,707     $5,998,981
ITT Corp.
    18,839 (g)   1,009,959
Lockheed Martin Corp.
    58,984 (g)   4,908,648
Northrop Grumman Corp.
    42,536 (g)   2,789,086
Raytheon Co.
    51,954 (g)   2,967,612
United Technologies Corp.
    67,658     4,980,305
             
Total
  22,654,591
 
 
Air Freight & Logistics (0.4%)
CH Robinson Worldwide, Inc.
    26,764     1,494,769
FedEx Corp.
    23,889 (g)   2,231,233
             
Total
  3,726,002
 
 
Airlines (0.1%)
Southwest Airlines Co.
    90,939     1,202,214
 
 
Auto Components (0.1%)
Johnson Controls, Inc.
    41,647 (g)   1,373,935
 
 
Automobiles (0.1%)
Harley-Davidson, Inc.
    47,514 (g)   1,333,718
 
 
Beverages (1.9%)
Brown-Forman Corp., Class B
    20,369 (g)   1,210,937
Coca-Cola Enterprises, Inc.
    91,210     2,522,869
PepsiCo, Inc.
    61,609     4,076,051
The Coca-Cola Co.
    208,922     11,490,710
             
Total
  19,300,567
 
 
Biotechnology (0.1%)
Cephalon, Inc.
    13,389 (b,g)   907,506
 
 
Building Products (0.1%)
Masco Corp.
    68,608 (g)   1,064,796
 
 
Capital Markets (3.2%)
Franklin Resources, Inc.
    46,700     5,179,030
Invesco Ltd.
    53,352     1,168,942
Morgan Stanley
    114,323 (g)   3,348,521
State Street Corp.
    93,763 (g)   4,232,462
The Bank of New York Mellon Corp.
    179,421 (g)   5,540,520
The Goldman Sachs Group, Inc.
    67,435 (g)   11,506,435
WCAS Capital Partners II LP
    4,292,803 (e,f)   1,940,776
             
Total
  32,916,686
 
 
Chemicals (1.7%)
Air Products & Chemicals, Inc.
    12,825     948,409
CF Industries Holdings, Inc.
    9,852     898,305
Eastman Chemical Co.
    23,702     1,509,343
EI du Pont de Nemours & Co.
    31,327 (g)   1,166,617
PPG Industries, Inc.
    26,162 (g)   1,710,995
The Dow Chemical Co.
    386,113 (g)   11,417,362
             
Total
  17,651,031
 
 
Commercial Banks (3.6%)
BB&T Corp.
    17,541 (g)   568,153
Comerica, Inc.
    50,712 (g)   1,929,084
Fifth Third Bancorp
    98,736 (g)   1,341,822
First Horizon National Corp.
    77,138 (b,g)   1,083,790
KeyCorp
    123,471 (g)   956,900
M&T Bank Corp.
    16,187     1,284,924
Marshall & Ilsley Corp.
    140,663 (g)   1,132,337
PNC Financial Services Group, Inc.
    205,785 (g)   12,285,365
SunTrust Banks, Inc.
    102,300 (g)   2,740,617
US Bancorp
    61,420 (g)   1,589,550
Wells Fargo & Co.
    398,424     12,398,955
             
Total
  37,311,497
 
 
Commercial Services & Supplies (0.4%)
Avery Dennison Corp.
    27,121     987,476
Pitney Bowes, Inc.
    42,234     1,032,621
RR Donnelley & Sons Co.
    116,797     2,493,616
             
Total
  4,513,713
 
 
 
 
See accompanying Notes to Portfolio of Investments.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  7

 

 
Portfolio of Investments (continued) ­ ­
 
             
Common Stocks (continued)
Issuer   Shares     Value(a)
 
Communications Equipment (0.9%)
Cisco Systems, Inc.
    223,328 (b)   $5,813,228
Motorola, Inc.
    406,815 (b)   2,855,841
QUALCOMM, Inc.
    17,150     720,129
             
Total
  9,389,198
 
 
Computers & Peripherals (7.6%)
Apple, Inc.
    264,807 (b)   62,211,108
Dell, Inc.
    351,104 (b)   5,270,071
Lexmark International, Inc., Class A
    64,655 (b)   2,332,752
NetApp, Inc.
    122,453 (b)   3,987,070
QLogic Corp.
    9,925 (b,g)   201,478
Western Digital Corp.
    104,385 (b)   4,069,971
             
Total
  78,072,450
 
 
Construction & Engineering (0.1%)
Fluor Corp.
    25,350 (g)   1,179,029
 
 
Consumer Finance (1.6%)
American Express Co.
    220,285     9,088,960
Capital One Financial Corp.
    83,535 (g)   3,459,184
Discover Financial Services
    169,896     2,531,450
SLM Corp.
    129,265 (b,g)   1,618,398
             
Total
  16,697,992
 
 
Distributors (0.1%)
Genuine Parts Co.
    29,421 (g)   1,242,743
 
 
Diversified Consumer Services (0.1%)
H&R Block, Inc.
    77,095 (g)   1,372,291
 
 
Diversified Financial Services (3.6%)
Bank of America Corp.
    1,472,802     26,289,515
Citigroup, Inc.
    2,617,393 (b)   10,600,442
IntercontinentalExchange, Inc.
    4,150 (b,g)   465,547
             
Total
  37,355,504
 
 
Diversified Telecommunication Services (4.9%)
AT&T, Inc.
    1,396,010 (g)   36,072,899
CenturyTel, Inc.
    36,445 (g)   1,292,340
Verizon Communications, Inc.
    415,670     12,894,083
             
Total
  50,259,322
 
 
Electric Utilities (0.9%)
Edison International
    29,772     1,017,309
Exelon Corp.
    67,721     2,966,857
FirstEnergy Corp.
    39,287 (g)   1,535,729
Progress Energy, Inc.
    84,011     3,306,673
             
Total
  8,826,568
 
 
Electrical Equipment (0.3%)
Emerson Electric Co.
    43,778 (g)   2,203,784
Rockwell Automation, Inc.
    21,013     1,184,293
             
Total
  3,388,077
 
 
Electronic Equipment, Instruments & Components (0.8%)
Agilent Technologies, Inc.
    86,701 (b,g)   2,981,648
Corning, Inc.
    139,805     2,825,459
Jabil Circuit, Inc.
    23,163     375,009
Tyco Electronics Ltd.
    70,765 (c)   1,944,622
             
Total
  8,126,738
 
 
Energy Equipment & Services (1.9%)
Baker Hughes, Inc.
    21,110 (g)   988,792
BJ Services Co.
    50,851     1,088,211
Cameron International Corp.
    59,339 (b,g)   2,543,270
Diamond Offshore Drilling, Inc.
    11,999 (g)   1,065,631
Ensco PLC, ADR
    32,277 (c)   1,445,364
FMC Technologies, Inc.
    23,389 (b,g)   1,511,631
Halliburton Co.
    40,690     1,225,990
Nabors Industries Ltd.
    63,575 (b,c,g)   1,247,977
National Oilwell Varco, Inc.
    76,799 (g)   3,116,504
Noble Corp.
    12,335 (b,c)   515,850
Schlumberger Ltd.
    74,653 (g)   4,737,480
Smith International, Inc.
    3,620     155,008
Weatherford International Ltd.
    11,912 (b,c)   188,924
             
Total
  19,830,632
 
 
Food & Staples Retailing (1.0%)
SUPERVALU Inc.
    103,498     1,726,347
Walgreen Co.
    82,882     3,074,093
Wal-Mart Stores, Inc.
    90,429     5,027,852
Whole Foods Market, Inc.
    19,466 (b,g)   703,696
             
Total
  10,531,988
 
 
 
 
See accompanying Notes to Portfolio of Investments.

8  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 
             
Common Stocks (continued)
Issuer   Shares     Value(a)
 
Food Products (1.0%)
Archer-Daniels-Midland Co.
    150,534     $4,350,432
ConAgra Foods, Inc.
    57,717 (g)   1,446,965
Dean Foods Co.
    40,694 (b,g)   638,489
General Mills, Inc.
    20,962     1,483,900
Hormel Foods Corp.
    23,467 (g)   985,849
Sara Lee Corp.
    85,249     1,187,519
             
Total
  10,093,154
 
 
Gas Utilities (0.2%)
Nicor, Inc.
    24,521 (g)   1,027,920
ONEOK, Inc.
    22,637     1,033,379
             
Total
  2,061,299
 
 
Health Care Equipment & Supplies (1.0%)
Becton Dickinson and Co.
    27,125 (g)   2,135,551
CareFusion Corp.
    28,672 (b,g)   757,801
Intuitive Surgical, Inc.
    9,595 (b,g)   3,340,307
Medtronic, Inc.
    84,074 (g)   3,785,852
St. Jude Medical, Inc.
    9,551 (b)   392,069
             
Total
  10,411,580
 
 
Health Care Providers & Services (3.4%)
Aetna, Inc.
    114,632     4,024,730
Cardinal Health, Inc.
    145,179 (g)   5,230,799
CIGNA Corp.
    125,553     4,592,729
Coventry Health Care, Inc.
    46,172 (b,g)   1,141,372
Humana, Inc.
    24,709 (b)   1,155,640
McKesson Corp.
    16,234     1,066,898
UnitedHealth Group, Inc.
    313,692     10,248,318
WellPoint, Inc.
    107,698 (b)   6,933,597
             
Total
  34,394,083
 
 
Hotels, Restaurants & Leisure (0.6%)
Starbucks Corp.
    242,514 (b)   5,885,815
 
 
Household Durables (0.6%)
DR Horton, Inc.
    99,489 (g)   1,253,561
Harman International Industries, Inc.
    25,111 (b)   1,174,693
Pulte Group, Inc.
    81,133 (b,g)   912,746
Whirlpool Corp.
    28,572 (g)   2,492,907
             
Total
  5,833,907
 
 
Household Products (0.2%)
Clorox Co.
    19,549     1,253,873
Colgate-Palmolive Co.
    11,085 (g)   945,107
             
Total
  2,198,980
 
 
Independent Power Producers & Energy Traders (0.4%)
Constellation Energy Group, Inc.
    35,925     1,261,327
NRG Energy, Inc.
    46,869 (b,g)   979,562
The AES Corp.
    162,076 (b)   1,782,836
             
Total
  4,023,725
 
 
Industrial Conglomerates (3.4%)
3M Co.
    87,751     7,333,351
General Electric Co.
    1,379,615     25,108,992
Textron, Inc.
    66,356 (g)   1,408,738
Tyco International Ltd.
    18,634 (c)   712,751
             
Total
  34,563,832
 
 
Insurance (5.5%)
AFLAC, Inc.
    136,212     7,394,949
Aon Corp.
    84,339 (g)   3,602,119
Assurant, Inc.
    28,410     976,736
Chubb Corp.
    115,899     6,009,363
Hartford Financial Services Group, Inc.
    61,987     1,761,671
Lincoln National Corp.
    49,430     1,517,501
MetLife, Inc.
    62,535     2,710,267
Principal Financial Group, Inc.
    62,611 (g)   1,828,867
Prudential Financial, Inc.
    31,793     1,923,477
The Allstate Corp.
    321,629     10,391,833
The Progressive Corp.
    196,964     3,760,043
The Travelers Companies, Inc.
    213,982     11,542,188
Torchmark Corp.
    41,023 (g)   2,195,141
Unum Group
    57,272 (g)   1,418,627
             
Total
  57,032,782
 
 
Internet & Catalog Retail (0.5%)
Expedia, Inc.
    78,713 (g)   1,964,676
priceline.com, Inc.
    13,274 (b)   3,384,870
             
Total
  5,349,546
 
 
Internet Software & Services (0.3%)
eBay, Inc.
    129,136 (b,g)   3,480,215
 
 
 
 
See accompanying Notes to Portfolio of Investments.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  9

 

 
Portfolio of Investments (continued) ­ ­
 
             
Common Stocks (continued)
Issuer   Shares     Value(a)
 
IT Services (1.2%)
Automatic Data Processing, Inc.
    79,712     $3,544,793
Cognizant Technology Solutions Corp., Class A
    110,233 (b)   5,619,678
Computer Sciences Corp.
    29,428 (b)   1,603,532
SAIC, Inc.
    54,719 (b,g)   968,526
             
Total
  11,736,529
 
 
Leisure Equipment & Products (0.2%)
Mattel, Inc.
    66,506     1,512,346
 
 
Life Sciences Tools & Services (0.1%)
Life Technologies Corp.
    10,195 (b,g)   532,893
 
 
Machinery (1.6%)
Caterpillar, Inc.
    120,819 (g)   7,593,473
Cummins, Inc.
    23,008 (g)   1,425,346
Eaton Corp.
    12,205 (g)   924,773
Flowserve Corp.
    10,682     1,177,904
Illinois Tool Works, Inc.
    39,314     1,861,911
Ingersoll-Rand PLC
    39,846 (c)   1,389,430
Stanley Black & Decker, Inc.
    37,860     2,173,543
             
Total
  16,546,380
 
 
Media (1.3%)
CBS Corp., Class B
    202,002     2,815,908
Gannett Co., Inc.
    82,836 (g)   1,368,451
News Corp., Class A
    337,587     4,864,629
The Walt Disney Co.
    119,306     4,164,972
Viacom, Inc., Class B
    8,274 (b)   284,460
             
Total
  13,498,420
 
 
Metals & Mining (1.6%)
Alcoa, Inc.
    162,736 (g)   2,317,361
Allegheny Technologies, Inc.
    24,486 (g)   1,321,999
Freeport-McMoRan Copper & Gold, Inc.
    123,344 (g)   10,304,157
Nucor Corp.
    6,444 (g)   292,429
United States Steel Corp.
    30,531 (g)   1,939,329
             
Total
  16,175,275
 
 
Multiline Retail (0.9%)
Family Dollar Stores, Inc.
    71,498     2,617,542
JC Penney Co., Inc.
    29,136     937,305
Macy’s, Inc.
    142,041     3,092,232
Nordstrom, Inc.
    62,168     2,539,563
Sears Holdings Corp.
    1,760 (b,g)   190,837
             
Total
  9,377,479
 
 
Multi-Utilities (0.5%)
DTE Energy Co.
    22,941     1,023,169
PG&E Corp.
    101,954 (g)   4,324,888
             
Total
  5,348,057
 
 
Oil, Gas & Consumable Fuels (13.5%)
Chesapeake Energy Corp.
    82,514 (g)   1,950,631
Chevron Corp.
    737,542 (d)   55,927,811
ConocoPhillips
    631,914     32,335,039
Exxon Mobil Corp.
    222,712 (g)   14,917,250
Hess Corp.
    53,467     3,344,361
Marathon Oil Corp.
    410,668     12,993,536
Murphy Oil Corp.
    34,239     1,923,889
Occidental Petroleum Corp.
    87,462     7,394,037
Pioneer Natural Resources Co.
    40,225 (g)   2,265,472
Sunoco, Inc.
    24,149     717,467
Tesoro Corp.
    44,673 (g)   620,955
Valero Energy Corp.
    207,889     4,095,413
             
Total
  138,485,861
 
 
Paper & Forest Products (0.5%)
International Paper Co.
    146,334     3,601,280
MeadWestvaco Corp.
    41,549 (g)   1,061,577
             
Total
  4,662,857
 
 
Pharmaceuticals (11.4%)
Abbott Laboratories
    158,321     8,340,350
Bristol-Myers Squibb Co.
    72,690     1,940,823
Eli Lilly & Co.
    146,029     5,289,170
Forest Laboratories, Inc.
    114,465 (b)   3,589,622
Johnson & Johnson
    513,644     33,489,590
King Pharmaceuticals, Inc.
    64,212 (b)   755,133
Merck & Co., Inc.
    600,497     22,428,563
Pfizer, Inc.
    2,404,208     41,232,168
             
Total
  117,065,419
 
 
 
 
See accompanying Notes to Portfolio of Investments.

10  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 
             
Common Stocks (continued)
Issuer   Shares     Value(a)
 
Real Estate Investment Trusts (REITs) (1.0%)
Boston Properties, Inc.
    17,003 (g)   $1,282,706
Equity Residential
    33,847 (g)   1,325,110
Simon Property Group, Inc.
    52,518 (g)   4,406,261
Ventas, Inc.
    28,380     1,347,482
Vornado Realty Trust
    19,219 (g)   1,454,878
             
Total
  9,816,437
 
 
Real Estate Management & Development (0.2%)
CB Richard Ellis Group, Inc., Class A
    100,889 (b,g)   1,599,091
 
 
Road & Rail (0.7%)
CSX Corp.
    72,718     3,701,346
Norfolk Southern Corp.
    66,947     3,741,668
             
Total
  7,443,014
 
 
Semiconductors & Semiconductor Equipment (1.2%)
Advanced Micro Devices, Inc.
    175,014 (b)   1,622,380
Analog Devices, Inc.
    37,608     1,083,863
Broadcom Corp., Class A
    51,952 (g)   1,723,767
MEMC Electronic Materials, Inc.
    75,552 (b,g)   1,158,212
Micron Technology, Inc.
    307,070 (b,g)   3,190,457
NVIDIA Corp.
    66,927 (b,g)   1,163,191
Texas Instruments, Inc.
    75,900 (g)   1,857,273
             
Total
  11,799,143
 
 
Software (1.9%)
Microsoft Corp.
    61,794     1,808,710
Oracle Corp.
    83,820     2,153,336
Red Hat, Inc.
    36,860 (b)   1,078,892
Rovi Corp.
    316,380 (b,g)   11,747,190
Salesforce.com, Inc.
    40,378 (b,g)   3,006,142
             
Total
  19,794,270
 
 
Specialty Retail (5.5%)
Abercrombie & Fitch Co., Class A
    42,922 (g)   1,958,960
AutoNation, Inc.
    50,188 (b,g)   907,399
Bed Bath & Beyond, Inc.
    12,498 (b,g)   546,912
Best Buy Co., Inc.
    57,352     2,439,754
Home Depot, Inc.
    1,028,999 (g)   33,288,117
Limited Brands, Inc.
    499,103 (g)   12,287,916
Lowe’s Companies, Inc.
    21,413     519,051
The Gap, Inc.
    46,869     1,083,143
The Sherwin-Williams Co.
    15,478 (g)   1,047,551
Tiffany & Co.
    25,740     1,222,393
Urban Outfitters, Inc.
    31,988 (b)   1,216,504
             
Total
  56,517,700
 
 
Textiles, Apparel & Luxury Goods (0.4%)
Coach, Inc.
    6,735 (g)   266,167
Nike, Inc., Class B
    53,138     3,905,643
VF Corp.
    3,275     262,491
             
Total
  4,434,301
 
 
Tobacco (1.2%)
Altria Group, Inc.
    446,561     9,163,432
Lorillard, Inc.
    37,660     2,833,538
             
Total
  11,996,970
 
 
Trading Companies & Distributors (—%)
Fastenal Co.
    23     1,104
 
 
Wireless Telecommunication Services (0.2%)
Sprint Nextel Corp.
    530,893 (b,g)   2,017,393
 
 
Total Common Stocks
(Cost: $980,053,340)
  $1,025,918,645
 
 
             
Money Market Fund (0.3%)
    Shares     Value(a)
 
RiverSource Short-Term Cash Fund, 0.18%
    3,209,597 (h)   $3,209,597
 
 
Total Money Market Fund
(Cost: $3,209,597)
  $3,209,597
 
 
                     
Investments of Cash Collateral Received
for Securities on Loan (19.9%)
    Coupon
 		    Principal
 		     
Issuer   rate     amount     Value(a)
 
 
Asset-Backed Commercial Paper (2.2%)
Belmont Funding LLC
04-12-10
    0.48 %     $7,996,693     $7,996,693
Grampian Funding LLC
04-12-10
    0.22       4,998,992     4,998,992
Rheingold Securitization
04-22-10
    0.27       4,998,838     4,998,838
 
 
See accompanying Notes to Portfolio of Investments.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  11

 

 
Portfolio of Investments (continued) ­ ­
 
                     
Investments of Cash Collateral Received
for Securities on Loan (continued)
    Coupon
 		    Principal
 		     
Issuer   rate     amount     Value(a)
 
                     
Asset-Backed Commercial Paper (cont.)
Versailles Commercial Paper LLC
04-15-10
    0.28 %     $4,998,794     $4,998,794
                     
Total
          22,993,317
 
 
Certificates of Deposit (13.6%)
Australia and New Zealand Bank Group
04-27-10
    0.29       5,000,000     5,000,000
05-24-10
    0.31       2,000,000     2,000,000
Banco Popular Espanol
04-26-10
    0.35       2,998,251     2,998,251
05-04-10
    0.34       2,498,582     2,498,582
Banco Santander Central Hispano
04-06-10
    0.30       5,000,000     5,000,000
04-19-10
    0.31       5,000,000     5,000,000
Caisse Centrale du Credit Immobilier de France
04-30-10
    0.35       3,998,612     3,998,812
Clydesdale Bank
04-12-10
    0.25       5,000,000     5,000,000
Credit Industrial et Commercial
04-13-10
    0.34       2,000,000     2,000,000
Credit Suisse
04-23-10
    0.32       5,000,000     5,000,000
Dexia Bank
04-26-10
    0.33       3,000,000     3,000,000
Dexia Credit Local
04-01-10
    0.28       5,000,000     5,000,000
Erste Bank der Oesterreichischen Sparkassen
04-01-10
    0.29       7,999,613     7,999,613
Hong Kong Shanghai Bank
04-06-10
    0.22       8,000,000     8,000,000
KBC Bank
04-22-10
    0.33       5,000,000     5,000,000
Natixis
04-12-10
    0.27       9,995,439     9,995,439
Norinchukin Bank
04-08-10
    0.25       2,000,000     2,000,000
04-13-10
    0.27       5,000,062     5,000,062
NyKredit Bank
06-24-10
    0.38       8,000,000     8,000,000
Overseas Chinese Banking Corp
05-11-10
    0.27       5,000,000     5,000,000
Pohjola Bank
06-15-10
    0.33       7,493,680     7,493,680
Raiffeisen Zentralbank Oesterreich
04-01-10
    0.31       5,000,000     5,000,000
Sumitomo Mitsui Banking
04-26-10
    0.29       10,000,001     10,000,001
Ulster Bank Ireland Limited
04-01-10
    0.29       7,999,613     7,999,613
Unicredit BK
04-06-10
    0.30       6,000,000     6,000,000
United Overseas Bank
05-28-10
    0.30       5,000,000     5,000,000
                     
Total
          138,984,053
 
 
Commercial Paper (0.5%)
Citigroup Funding
04-26-10
    0.26       4,998,736     4,998,736
 
 
Repurchase Agreements (3.6%)(i)
Banc of America Securities LLC
dated 03-31-10, matures 04-01-10,
repurchase price
$5,533,755
    0.05       5,533,747     5,533,747
Morgan Stanley
dated 01-21-10, matures 04-30-10
repurchase price
$7,001,867
    0.32       7,000,000     7,000,000
Morgan Stanley
dated 02-22-10, matures 04-30-10,
repurchase price
$10,003,083
    0.37       10,000,000     10,000,000
Morgan Stanley
dated 02-23-10, matures 04-30-10,
repurchase price
$5,001,542
    0.37       5,000,000     5,000,000
 
 
See accompanying Notes to Portfolio of Investments.

12  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 
                     
Investments of Cash Collateral Received
for Securities on Loan (continued)
    Coupon
 		    Principal
 		     
Issuer   rate     amount     Value(a)
 
Repurchase Agreements (cont.)
Pershing LLC
dated 03-31-10, matures 04-01-10,
repurchase price
$10,000,061
    0.22 %     $10,000,000     $10,000,000
                     
Total
          37,533,747
 
 
Total Investments of Cash Collateral Received for Securities on Loan
(Cost: $204,509,853)
                  $204,509,853
 
 
Total Investments in Securities
(Cost: $1,187,772,790)(j)
                  $1,233,638,095
 
 
 
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.
 
Investments in Derivatives
 
Futures Contracts Outstanding at March 31, 2010
 
                                 
    Number of
 		                Unrealized
 		 
    contracts
 		    Notional
 		    Expiration
 		    appreciation
 		 
Contract description   long (short)     market value     date     (depreciation)  
S&P 500 Index
    10       $2,913,000       June 2010       $26,066  
Notes to Portfolio of Investments
 
         
ADR
  —   American Depositary Receipt
 
(a) The Fund adopted Financial Accounting Standards Board (FASB) Staff Position FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (FSP 157-4), on June 30, 2009. FSP 157-4 provides guidance on estimating the fair value of an investment when the trade volume and level of activity for the investment have significantly decreased relative to historical levels. FSP 157-4 requires funds to disclose in interim and annual periods 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. There was no impact to the Fund’s net assets or results of operations upon adoption. This disclosure can be found as part of the Fair Value Measurements disclosure in the Portfolio of Investments.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  13

 

 
Portfolio of Investments (continued) ­ ­
 

Notes to Portfolio of Investments (continued)
 
All securities are valued at the close of each business day of the 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 Corporation, 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.
 
(b) Non-income producing. For long-term debt securities, item identified is in default as to payment of interest and/or principal.
 
(c) Foreign security values are stated in U.S. dollars. At March 31, 2010, the value of foreign securities, excluding short-term securities, represented 0.72% of net assets.
 
(d) At March 31, 2010, investments in securities included securities valued at $748,037 that were partially pledged as collateral to cover initial margin deposits on open stock index futures contracts.

* Effective May 1, 2010, RiverSource Investments, LLC is known as Columbia Management Investment Advisers, LLC.

14  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 

Notes to Portfolio of Investments (continued)
 
(e) Identifies issues considered to be illiquid as to their marketability. The aggregate value of such securities at March 31, 2010 was $1,940,776, representing 0.19% of net assets. Information concerning such security holdings at March 31, 2010 was as follows:
 
         
    Acquisition
 		   
Security   dates   Cost
WCAS Capital Partners II LP
  01-09-05 thru 03-05-97   4,212,138
 
(f) At March 31, 2010, the Fund owned one limited partnership investment that was purchased through a private offering and cannot be sold without prior registration under the Securities Act of 1933 or pursuant to an exemption therefrom. The investment is valued at fair value as determined in accordance with procedures approved by the Board of Directors of the Fund. The acquisition dates of investment in the limited partnership, along with the cost and value at March 31, 2010, were as follows:
 
                         
Investment   Acquisition dates     Cost     Value(a)  
WCAS Capital Partners II LP
    12-11-90 to 03-24-98       $4,292,803       $1,940,776  
 
(g) At March 31, 2010, security was partially or fully on loan.
 
(h) Affiliated Money Market Fund — The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund, a money market fund established for the exclusive use of the RiverSource, Seligman and Threadneedle funds and other institutional clients of the Investment Manager. The rate shown is the seven-day current annualized yield at March 31, 2010.
 
(i) The table below represents securities received as collateral subject to repurchase agreements. This collateral, which is generally high quality short-term obligations, is deposited with the Fund’s custodian and, pursuant to the terms of the repurchase agreement, must have an aggregate market value greater than or equal to the repurchase price plus accrued interest at all times. The market value of securities held as collateral for repurchase agreements is monitored on a daily basis to ensure the existence of the proper level of collateral.
 
         
Banc of America Securities LLC (0.05%)
 		     
Security description   Value(a)  
Fannie Mae REMICS
    $347,520  
Freddie Mac REMICS
    858,824  
Government National Mortgage Association
    4,438,078  
         
Total market value of collateral securities
    $5,644,422  
         
 
         
Morgan Stanley (0.32%)
 		     
Security description   Value(a)  
Amstel Funding Corp
    $630,472  
Amsterdam Funding Corp
    11,660  
Atlantic Asset Securities
    2,332  
Beethoven Funding Corp
    12  
Bryant Park Funding LLC
    607  

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  15

 

 
Portfolio of Investments (continued) ­ ­
 

Notes to Portfolio of Investments (continued)
 
         
Morgan Stanley (0.32%) (continued)
 		     
Security description   Value(a)  
BTM Capital Corp
  $241,471  
Can Ast & Can Ltd
    159,782  
Chesham Financing/ Chesham LLC
    100,600  
Concord Min Capital
    124,788  
Crown Point Capital
    33,647  
Fairway Finance Corp
    35  
Fannie Mae Pool
    49,373  
Fannie Mae REMICS
    49,368  
Fannie Mae Whole Loan
    719  
Federal Home Loan Banks
    1,522,696  
Federal National Mortgage Association
    21,467  
FHLMC-GNMA
    32  
Freddie Mac Gold Pool
    6,720  
Freddie Mac Non Gold Pool
    1,808  
Freddie Mac REMICS
    1  
Galleon Capital Corp
    1,167  
Ginnie Mae I Pool
    42,133  
Ginnie Mae II Pool
    10,738  
Gotham Funding Corp
    1,400  
Halkin Finance LLC
    417,192  
LMA LMA Americas
    27,990  
Manhattan Asset Funding
    3,674  
Market St Funding Corp
    16,083  
Nationwide Life Ins Co
    4,783  
Nestle Capital Corp
    455,400  
Paradigm Funding LLC
    17,508  
Scaldis & Scaldis
    673,128  
Silver Tower US Funding
    175,432  
Silver Tower US Fund
    466,532  
Starbird Funding Corp
    9,064  
Straight A Funding
    26,829  
Thames Ast Global Securities
    440,057  
TSL USA Inc
    1,553,094  
Victory Receivables
    58  
         
Total market value of collateral securities
    $7,299,852  
         
 
         
Morgan Stanley (0.37%)
 		     
Security description   Value(a)  
Access Group Inc
    $778,973  
Accredited Mortgage Loan Trust
    41,752  
American Express Credit Account Master Trust
    22,572  
American Express Issuance Trust
    23,224  

16  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 

Notes to Portfolio of Investments (continued)
 
         
Morgan Stanley (0.37%) (continued)
 		     
Security description   Value(a)  
AmeriCredit Automobile Receivables Trust
  $26,929  
BA Credit Card Trust
    194,270  
Banc of America Commercial Mortgage Inc
    385,145  
Banc of America Large Loan Inc
    124,637  
Bank One Issuance Trust
    187,931  
BMW Vehicle Lease Trust
    133,672  
Capital Auto Receivables Asset Trust
    251,604  
Capital One Multi-Asset Execution Trust
    351,419  
Chase Issuance Trust
    393,297  
Citibank Credit Card Issuance Trust
    266,253  
Citifinancial Mortgage Securities Inc
    26,770  
Citigroup Commercial Mortgage Trust
    204,497  
Collegiate Funding Services Education Loan Trust I
    130,258  
Commercial Mortgage Asset Trust
    65,803  
Commercial Mortgage Pass Through Certificates
    80,247  
Credit Suisse First Boston Mortgage Securities Corp
    57,553  
Credit Suisse Mortgage Capital Certificates
    220,148  
Daimler Chrysler Auto Trust
    353,462  
DFR Middle Market CLO Ltd
    276,466  
Education Funding Capital Trust I
    118,353  
Fannie Mae REMICS
    66,484  
Fannie Mae Whole Loan
    161,662  
Federal National Mortgage Association
    36,267  
FHLMC Structured Pass Through Securities
    24,609  
Ford Credit Floorplan Master Owner Trust
    208,808  
GE Business Loan Trust
    33,956  
GE Capital Credit Card Master Note Trust
    282,957  
G-FORCE CDO
    63,581  
Gramercy Real Estate CDO
    407,425  
Granite Master Issuer PLC
    219,871  
Granite Mortgages PLC
    29,890  
HSBC Home Equity Loan Trust
    72,084  
Hyundai Floorplan Master Owner Trust
    113,931  
JP Morgan Chase Commercial Mortgage Securities Corp
    410,967  
LB-UBS Commercial Mortgage Trust
    48,748  
MBNA Credit Card Master Note Trust
    660,681  
Merrill Lynch Mortgage Trust
    146,729  
Morgan Stanley ABS Capital I
    12,163  
Nelnet Education Loan Funding Inc
    53,920  
Nelnet Student Loan Trust
    265,713  
Nissan Auto Lease Trust
    80,208  
Northstar Education Finance Inc
    93,672  
Pennsylvania Higher Education Assistance Agency
    39,716  
Saxon Asset Securities Trust
    35,295  

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  17

 

 
Portfolio of Investments (continued) ­ ­
 

Notes to Portfolio of Investments (continued)
 
         
Morgan Stanley (0.37%) (continued)
 		     
Security description   Value(a)  
SLC Student Loan Trust
  $82,935  
SLM Student Loan Trust
    345,483  
Victoria Falls CLO Ltd
    694,371  
Wachovia Bank Commercial Mortgage Trust
    1,084,138  
         
Total market value of collateral securities
    $10,491,499  
         
 
         
Morgan Stanley (0.37%)
 		     
Security description   Value(a)  
Access Group Inc
    $389,486  
Accredited Mortgage Loan Trust
    20,876  
American Express Credit Account Master Trust
    11,286  
American Express Issuance Trust
    11,612  
AmeriCredit Automobile Receivables Trust
    13,465  
BA Credit Card Trust
    97,135  
Banc of America Commercial Mortgage Inc
    192,572  
Banc of America Large Loan Inc
    62,318  
Bank One Issuance Trust
    93,966  
BMW Vehicle Lease Trust
    66,836  
Capital Auto Receivables Asset Trust
    125,802  
Capital One Multi-Asset Execution Trust
    175,709  
Chase Issuance Trust
    196,649  
Citibank Credit Card Issuance Trust
    133,126  
Citifinancial Mortgage Securities Inc
    13,385  
Citigroup Commercial Mortgage Trust
    102,249  
Collegiate Funding Services Education Loan Trust I
    65,129  
Commercial Mortgage Asset Trust
    32,902  
Commercial Mortgage Pass Through Certificates
    40,124  
Credit Suisse First Boston Mortgage Securities Corp
    28,777  
Credit Suisse Mortgage Capital Certificates
    110,074  
Daimler Chrysler Auto Trust
    176,731  
DFR Middle Market CLO Ltd
    138,233  
Education Funding Capital Trust I
    59,177  
Fannie Mae REMICS
    33,242  
Fannie Mae Whole Loan
    80,831  
Federal National Mortgage Association
    18,134  
FHLMC Structured Pass Through Securities
    12,304  
Ford Credit Floorplan Master Owner Trust
    104,404  
GE Business Loan Trust
    16,978  
GE Capital Credit Card Master Note Trust
    141,478  
G-FORCE CDO
    31,790  
Gramercy Real Estate CDO
    203,713  
Granite Master Issuer PLC
    109,936  

18  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 

Notes to Portfolio of Investments (continued)
 
         
Morgan Stanley (0.37%) (continued)
 		     
Security description   Value(a)  
Granite Mortgages PLC
  $14,945  
HSBC Home Equity Loan Trust
    36,042  
Hyundai Floorplan Master Owner Trust
    56,965  
JP Morgan Chase Commercial Mortgage Securities Corp
    205,484  
LB-UBS Commercial Mortgage Trust
    24,374  
MBNA Credit Card Master Note Trust
    330,341  
Merrill Lynch Mortgage Trust
    73,364  
Morgan Stanley ABS Capital I
    6,081  
Nelnet Education Loan Funding Inc
    26,960  
Nelnet Student Loan Trust
    132,857  
Nissan Auto Lease Trust
    40,104  
Northstar Education Finance Inc
    46,836  
Pennsylvania Higher Education Assistance Agency
    19,858  
Saxon Asset Securities Trust
    17,648  
SLC Student Loan Trust
    41,467  
SLM Student Loan Trust
    172,741  
Victoria Falls CLO Ltd
    347,185  
Wachovia Bank Commercial Mortgage Trust
    542,069  
         
Total market value of collateral securities
    $5,245,750  
         
 
         
Pershing LLC (0.22%)
 		     
Security description   Value(a)  
Fannie Mae Benchmark REMIC
    $40,142  
Fannie Mae Pool
    4,036,983  
Fannie Mae REMICS
    969,212  
Federal Home Loan Banks
    15,300  
Federal Home Loan Mortgage Corp
    56,911  
Federal National Mortgage Association
    130,241  
Freddie Mac Gold Pool
    1,843,799  
Freddie Mac Non Gold Pool
    86,560  
Freddie Mac Reference REMIC
    24,685  
Freddie Mac REMICS
    182,764  
Ginnie Mae I Pool
    282,880  
Ginnie Mae II Pool
    113,413  
Government National Mortgage Association
    363,277  
United States Treasury Inflation Indexed Bonds
    48,192  
United States Treasury Note/Bond
    1,847,296  
United States Treasury Strip Principal
    158,345  
         
Total market value of collateral securities
    $10,200,000  
         

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  19

 

 
Portfolio of Investments (continued) ­ ­
 

Notes to Portfolio of Investments (continued)
 
 
(j) At March 31, 2010, the cost of securities for federal income tax purposes was approximately $1,187,773,000 and the approximate aggregate gross unrealized appreciation and depreciation based on that cost was:
 
         
Unrealized appreciation
    $125,934,000  
Unrealized depreciation
    (80,069,000 )
         
Net unrealized appreciation
    $45,865,000  
         

20  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 
Fair Value Measurements
 
Generally accepted accounting principles (GAAP) require disclosure regarding the inputs and valuation techniques used to measure fair value and any changes in valuation inputs or techniques. In addition, investments shall be disclosed by major category.
 
The Fund categorizes its fair value measurements according to a three-level hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by prioritizing that the most observable input be used when available. Observable inputs are those that market participants would use in pricing an investment based on market data obtained from sources independent of the reporting entity. Unobservable inputs are those that reflect the Fund’s assumptions about the information market participants would use in pricing an investment. An investment’s level within the fair value hierarchy is based on the lowest level of any input that is deemed significant to the asset or liability’s fair value measurement. The input levels are not necessarily an indication of the risk or liquidity associated with investments at that level. For example, certain U.S. government securities are generally high quality and liquid, however, they are reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.
 
Fair value inputs are summarized in the three broad levels listed below:
 
  •  Level 1 — Valuations based on quoted prices for investments in active markets that the Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments.
 
  •  Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
 
  •  Level 3 — Valuations based on significant unobservable inputs (including the Fund’s own assumptions and judgment in determining the fair value of investments).
 
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the marketplace. The inputs will be considered by the Fund Administrator, along with any other relevant factors in the calculation of an investment’s fair value. The Fund uses prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
 
Non-U.S. equity securities actively traded in foreign markets may be reflected in Level 2 despite the availability of closing prices, because the Fund evaluates and determines whether those closing prices reflect fair value at the close of the New York Stock Exchange (NYSE) or require adjustment, as described in Note (a) to the Portfolio of Investments.
 
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

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  21

 

 
Portfolio of Investments (continued) ­ ­
 

Fair Value Measurements (continued)
 
Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models rely on one or more significant unobservable inputs and/or significant assumptions by the Fund Administrator. Inputs used in a valuation model may include, but are not limited to, financial statement analysis, discount rates and estimated cash flows, and comparable company data.
 
The following table is a summary of the inputs used to value the Fund’s investments as of March 31, 2010:
 
                                 
    Fair value at March 31, 2010  
    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
                               
Capital Markets
    $30,975,910       $—       $1,940,776       $32,916,686  
All Other Industries(a)
    993,001,959       —       —       993,001,959  
                                 
Total Equity Securities
    1,023,977,869       —       1,940,776       1,025,918,645  
                                 
Other
                               
Affiliated Money Market Fund(b)
    3,209,597       —       —       3,209,597  
Investments of Cash Collateral Received for Securities on Loan(c)
    —       204,509,853       —       204,509,853  
                                 
Total Other
    3,209,597       204,509,853       —       207,719,450  
                                 
Investments in Securities
    1,027,187,466       204,509,853       1,940,776       1,233,638,095  
Other Financial Instruments(d)
    26,066       —       —       26,066  
                                 
Total
    $1,027,213,532       $204,509,853       $1,940,776       $1,233,664,161  
                                 
 
(a) Industry classifications are identified in the Portfolio of Investments.
(b) Money market fund that is a sweep investment for cash balances in the Fund at March 31, 2010.
(c) Asset categories for Investments of Cash Collateral are identified in the Portfolio of Investments.
(d) Other Financial Instruments are derivative instruments, which are valued at the unrealized appreciation (depreciation) on the instrument. Derivative descriptions are located in the Investments in Derivatives section of the Portfolio of Investments.

22  TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT

 

 
 

Fair Value Measurements (continued)
 
The following table is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
 
         
    Common Stocks  
Balance as of Dec. 31, 2009
    $1,927,202  
Accrued discounts/premiums
    —  
Realized gain (loss)
    —  
Change in unrealized appreciation (depreciation)*
    13,574  
Net purchases (sales)
    —  
Transfers in and/or out of Level 3
    —  
         
Balance as of March 31, 2010
    $1,940,776  
         
 
* Change in unrealized appreciation (depreciation) relating to securities held at March 31, 2010 was $13,574.

TRI-CONTINENTAL CORPORATION — 2010 QUARTERLY REPORT  23

 

 
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Tri-Continental Corporation
734 Ameriprise Financial Center
Minneapolis, MN 55474
 
tricontinental.com
 
         
(TY LOGO)   This report must be accompanied or preceded by the Fund’s current prospectus. Tri-Continental Corporation is managed by Columbia Management Investment Advisers, LLC (formerly known as RiverSource Investments, LLC). This material is distributed by Columbia Management Investment Distributors, Inc. (formerly known as RiverSource Fund Distributors, Inc.) member FINRA.
©2010 Columbia Management Investment Advisers, LLC. All rights reserved. 		  SL-99484 A (5/10)