UNITED
RETIREMENT
SHARES,
INC.
ANNUAL
REPORT
---------------------------------------
For the fiscal year ended June 30, 1995
<PAGE>
FUND MANAGER'S LETTER
JUNE 30, 1995
Dear Shareholder:
This report relates to the operation of United Retirement Shares, Inc. for
the fiscal year ended June 30, 1995. The following discussion, graphs and
tables provide you with information regarding the Fund's performance during
that period.
To alleviate perceived inflationary pressures in the economy, the Federal
Reserve Bank raised short-term interest rates several times during the past
fiscal year. The stock and bond markets reacted first negatively but later
positively as inflation and interest rate fears rose and then fell in response
to the Federal Reserve's credit-tightening actions.
As market conditions developed, we increased the Fund's position in bonds.
We also increased the Fund's stock investments in industries that we believed
presented the best prospects for maintaining positive earnings growth even in
the event of an economic downturn. We reduced our exposure to cyclical stocks,
particularly those of companies in industries in which consumer demand is most
sensitive to changes in interest rates, such as the automobile and consumer
durables industries.
The strategies and techniques we applied resulted in the direction of the
Fund's performance during its past fiscal year remaining fairly consistent with
that of the indexes charted on the following page. Those indexes reflect the
performance of securities that generally represent the stock market (the
Standard & Poor's 500 Index), the bond market (the Lehman Brothers
Government/Corporate Bond Index or LBGCBI) and the universe of funds with
similar investment objectives (the Lipper Growth & Income Fund Universe
Average). The S&P 500 and the LBGCBI are presented because the Fund invests in
both stocks and bonds.
We anticipate that inflation will remain low and that the rate of growth
will stabilize at a slow, steady level. In seeking to achieve the Fund's
objectives, we expect to pursue the same strategies we have employed in the
recent past. We intend to continue emphasizing stocks of major U.S. companies
that have, in our opinion, the greatest potential for sustained growth in
earnings.
We appreciate your continued confidence in our management of the Fund.
Respectfully,
Cynthia P. Prince-Fox
Manager, United Retirement Shares, Inc.
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED RETIREMENT SHARES, INC.,
THE STANDARD & POORS'S 500 INDEX,
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX,
AND THE LIPPER GROWTH & INCOME FUND UNIVERSE AVERAGE
Average Annual Total Return*
1 year 5 years 10 years
8.45% 9.87% 11.20%
Lehman Lipper
Brothers Growth &
United Government/ Income
Retirement S&P Corporate Fund
Shares, 500 Bond Universe
Inc. Index Index Average
------------------ ---------- ----------
06/30/85 Purchase 9,425 10,000 10,000 10,000
06/30/86 12,209 13,582 12,065 13,042
06/30/87 12,997 17,000 12,629 15,228
06/30/88 12,770 15,827 13,574 14,673
06/30/89 15,053 19,079 15,249 16,989
06/30/90 17,018 22,225 16,334 18,761
06/30/91 17,880 23,869 18,004 19,961
06/30/92 21,087 27,072 20,555 22,509
06/30/93 23,924 30,760 23,258 25,739
06/30/94 25,129 31,193 22,919 26,232
06/30/95 28,916 39,325 25,845 31,406
---------- Lipper Balanced Fund Universe Average -- $28,916
++++ Standard & Poor's 500 Index -- $39,325
- - - - - - Lehman Brothers Government/Corporate Bond Index - $25,845
==== United Continental Income Fund** -- $31,406
Past performance is not predictive of future performance. Indexes are
unmanaged.
*Performance data quoted represents past performance and is based on deduction
of a 5.75% sales load on the initial purchase in each of the three periods.
Investment return and principal value will fluctuate and an investor's
shares, when redeemed, may be worth more or less than their original cost.
**The value of the investment in the Fund is impacted by the sales load at the
time of the investment and by the ongoing expenses of the Fund.
------------------------------
Effective October 7, 1995, existing shares of United Retirement Shares, Inc.
will be reclassified as Class A shares and the Fund will begin to offer Class Y
shares. Class Y shares will be offered through a Prospectus separate from the
Class A Prospectus to certain institutional investors and will not be subject
to a sales charge, redemption fee or Rule 12b-1 fee.
<PAGE>
SHAREHOLDER SUMMARY
-------------------------------------------------------------------------------
UNITED RETIREMENT SHARES, INC.
PORTFOLIO STRATEGY:
Common stocks believed to OBJECTIVE: Highest long-term total
have the potential for: return as is, in the
Long-term appreciation opinion of management,
Stability consistent with the
Income reasonable safety of capital.
Maximum 10% foreign STRATEGY: Invests in equity and debt
securities securities in such
proportions that management
Debt securities believes are most likely to
achieve the Fund's objective.
Cash reserves (May purchase securities
subject to repurchase agreements. May
invest in certain options and futures.)
The use of cash reserves
(often invested in money market
securities) for defensive purposes is a
strategy that may be utilized by
Retirement Shares from time to time.
Moving into cash reserve positions at
times thought to be near a major stock
market peak allows the Fund the
opportunity to capture profits and
attempts to cushion the impact of
market declines. The added flexibility
provided by our CASH RESERVES STRATEGY
has from time to time been an important
element in our past success and, when
deemed appropriate, may be used in the
management of the portfolio in the
future.
FOUNDED: 1972
SCHEDULED DIVIDEND FREQUENCY: QUARTERLY (March, June, September,
December)
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended June 30, 1995
---------------------------------------
DIVIDENDS PAID $0.22
=====
CAPITAL GAINS DISTRIBUTION $0.26
=====
NET ASSET VALUE ON
06/30/95 $8.26 adjusted to: $8.52(A)
06/30/94 7.64
-----
CHANGE PER SHARE $0.88
=====
(A)This number includes the capital gains distribution of $0.26 paid in
December 1994 added to the actual net asset value on June 30, 1995.
Past performance is not necessarily an indication of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
------ ----------- ------------
1-year period ended 6-30-95 8.45% 15.07%
5-year period ended 6-30-95 9.87% 11.18%
10-year period ended 6-30-95 11.20% 11.86%
*Performance data quoted represents past performance and is based on deduction
of 5.75% sales load on the initial purchase in each of the three periods.
**Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On June 30, 1995, United Retirement Shares, Inc. had net assets totaling
$528,061,956 invested in a diversified portfolio of:
65.09% Common Stocks
23.35% U.S. Government Securities
4.69% Cash and Cash Equivalents
3.60% Corporate Bonds
2.68% Convertible Preferred Stocks
0.59% Other Government Security
As a shareholder of United Retirement Shares, Inc. for every $100 you had
invested on June 30, 1995, your Fund owned:
U.S. Government Securities $23.35
Technological Stocks 21.77
Consumer Stocks 15.43
Basic Industries Stocks 12.65
Financial Stocks 7.75
Energy and Energy-Related Stocks 7.49
Cash and Cash Equivalents 4.69
Corporate Bonds 3.60
Convertible Preferred Stocks 2.68
Other Government Security 0.59
Not all holdings will be represented in the portfolio at all times.
-----------------------------------------------------------------
These STOCK CATEGORIES are provided as a reference only. Not all categories or
subcategories will be represented in a portfolio at all times. Refer to the
following pages for a more detailed portfolio listing.
BASIC INDUSTRIES
Airlines
Automotive
Building
Chemicals Major
Electrical Equipment
Engineering and Construction
Machinery
Manufacturers
Metals and Mining
Multi-Industry
Paper
Precious Metals
Railroad Equipment
Railroads
Shipping
Steel
Tire and Rubber
Trucking
CONSUMER
Beverages
Consumer Electronics and Appliances
Food and Related
Hospital Management
Household Products
Leisure Time
Packaging and Containers
Publishing and Advertising
Retailing
Services, Consumer and Business
Textiles and Apparel
Tobacco
ENERGY AND ENERGY-RELATED
Canadian Oil
Coal
Domestic Oil
International Oil
Oil Services
Propane
FINANCIAL
Banks and Savings and Loans
Financial
Insurance
PUBLIC UTILITIES
Electric
Gas
Pipelines
TECHNOLOGICAL
Aerospace
Biotechnology and Medical Services
Chemicals Specialty and Miscellaneous Technology
Computers and Office Equipment
Drugs and Hospital Supply
Electronics
Telecommunications
<PAGE>
THE INVESTMENTS OF
UNITED RETIREMENT SHARES, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS
Airlines - 0.90%
Southwest Airlines Co. ................. 200,000 $ 4,775,000
Banks and Savings and Loans - 1.99%
Ahmanson (H. F.) & Company ............. 195,000 4,290,000
Great Western Financial Corporation .... 175,000 3,609,375
HSBC Holdings Plc (A) .................. 202,060 2,591,751
Total ................................. 10,491,126
Beverages - 2.50%
Coca-Cola Company (The) ................ 100,000 6,375,000
PepsiCo, Inc. .......................... 150,000 6,843,750
Total ................................. 13,218,750
Biotechnology and Medical Services - 0.57%
St. Jude Medical, Inc. ................. 60,000 3,003,720
Building - 1.79%
National Health Investors, Inc. ........ 100,000 2,725,000
York International Corporation ......... 150,000 6,750,000
Total ................................. 9,475,000
Chemicals Major - 2.89%
du Pont (E.I.) de Nemours and Company .. 150,000 10,312,500
PPG Industries, Inc. ................... 115,000 4,945,000
Total ................................. 15,257,500
Chemicals Specialty and Miscellaneous Technology - 2.66%
Browning-Ferris Industries, Inc. ....... 80,000 2,890,000
IMC Global, Inc. ....................... 100,000 5,412,500
Minnesota Mining and Manufacturing
Company ............................... 100,000 5,725,000
Total ................................. 14,027,500
Computers and Office Equipment - 2.94%
Compaq Computer Corporation* ........... 125,000 5,671,875
General Motors Corporation, Class E .... 160,000 6,960,000
International Business Machines
Corporation ........................... 30,000 2,880,000
Total ................................. 15,511,875
Domestic Oil - 2.08%
Atlantic Richfield Company .............. 100,000 10,975,000
Drugs and Hospital Supply - 3.57%
Abbott Laboratories .................... 160,000 6,480,000
American Home Products Corporation ..... 90,000 6,963,750
Astra AB, Class A (A) .................. 175,000 5,393,301
Total ................................. 18,837,051
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED RETIREMENT SHARES, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS (Continued)
Electrical Equipment - 2.03%
Emerson Electric Co. ................... 150,000 $ 10,725,000
Electronics - 2.17%
AMP Incorporated ....................... 126,000 5,323,500
Applied Materials, Inc.* ............... 34,200 2,958,300
Intel Corporation ...................... 50,000 3,165,600
Total ................................. 11,447,400
Engineering and Construction - 0.80%
Foster Wheeler Corporation ............. 120,000 4,230,000
Financial - 1.07%
Federal National Mortgage Association .. 60,000 5,662,500
Hospital Management - 1.28%
LTC Properties, Inc. ................... 200,000 2,625,000
United HealthCare Corporation .......... 100,000 4,137,500
Total ................................. 6,762,500
Household Products - 3.74%
Colgate-Palmolive Company .............. 100,000 7,312,500
Gillette Company (The) ................. 150,000 6,693,750
Procter & Gamble Company (The) ......... 80,000 5,750,000
Total ................................. 19,756,250
Insurance - 4.69%
Chubb Corporation (The) ................ 200,000 16,025,000
Financial Security Assurance Holdings Ltd. 350,000 8,750,000
Total ................................. 24,775,000
International Oil - 2.68%
Exxon Corporation ...................... 200,000 14,125,000
Leisure Time - 3.91%
Walt Disney Company (The) .............. 275,000 15,296,875
Time Warner Incorporated ............... 130,000 5,346,250
Total ................................. 20,643,125
Multi-Industry - 4.24%
Grupo Carso, S.A. de C.V.,
Series 1A (A)* ........................ 500,000 2,736,000
ITT Corporation ........................ 125,000 14,687,500
Mark IV Industries, Inc. ............... 231,000 4,966,500
Total ................................. 22,390,000
Oil Services - 2.73%
Baker Hughes Incorporated .............. 400,000 8,200,000
Schlumberger Limited ................... 100,000 6,212,500
Total ................................. 14,412,500
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED RETIREMENT SHARES, INC.
JUNE 30, 1995
Shares Value
COMMON STOCKS (Continued)
Publishing and Advertising - 0.67%
American Greetings Corporation,
Class A ............................... 120,000 $ 3,517,440
Retailing - 1.95%
Cifra, S.A. de C.V., Class C (A) ....... 550,000 721,600
May Department Stores Company (The) .... 115,000 4,786,875
Penney (J.C.) Company, Inc. ............ 100,000 4,800,000
Total ................................. 10,308,475
Services, Consumer and Business - 0.78%
Block (H & R), Inc. .................... 100,000 4,112,500
Telecommunications - 9.86%
AT&T Corporation ....................... 250,000 13,281,250
BellSouth Corporation .................. 200,000 12,700,000
GTE Corporation ........................ 179,700 6,132,263
General Motors Corporation, Class H .... 66,700 2,634,650
MCI Communications Corporation ......... 300,000 6,581,100
Motorola, Inc. ......................... 50,000 3,356,250
Telefonos de Mexico S.A. de C.V., ADR .. 250,000 7,406,250
Total ................................. 52,091,763
Textiles and Apparel - 0.60%
Liz Claiborne, Inc. .................... 150,000 3,187,500
TOTAL COMMON STOCKS - 65.09% $343,719,475
(Cost: $284,739,586)
PREFERRED STOCKS
Airlines - 1.11%
Delta Air Lines, Incorporated,
Convertible ........................... 100,000 5,850,000
Automotive - 1.10%
Ford Motor Company, Convertible ........ 60,000 5,827,500
Building - 0.47%
National Health Investors, Inc.,
Convertible............................ 100,000 2,450,000
TOTAL PREFERRED STOCKS - 2.68% $ 14,127,500
(Cost: $10,853,522)
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED RETIREMENT SHARES, INC.
JUNE 30, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES
Electrical Equipment - 0.64%
General Electric Capital Corporation,
8.3%, 9-20-2009 ....................... $ 3,000 $ 3,373,200
Financial - 2.29%
American Express Company,
6.25%, 10-15-96 ....................... 9,188 12,125,019
Telecommunications - 0.67%
Bell Telephone Company of Pennsylvania (The),
8.35%, 12-15-2030 ..................... 3,000 3,538,650
TOTAL CORPORATE DEBT SECURITIES - 3.60% $ 19,036,869
(Cost: $15,139,390)
OTHER GOVERNMENT SECURITY - 0.59%
Supranational
International Bank for Reconstruction and
Development,
9.25%, 7-15-2017 ...................... 2,500 $ 3,097,475
(Cost: $2,498,180)
UNITED STATES GOVERNMENT SECURITIES
United States Treasury:
7.625%, 5-31-96 ....................... 10,000 10,156,200
7.5%, 12-31-96 ........................ 10,000 10,234,400
6.5%, 8-15-97 ......................... 5,000 5,062,500
7.375%, 11-15-97 ...................... 5,000 5,162,500
9.25%, 8-15-98 ........................ 5,000 5,467,950
4.75%, 10-31-98 ....................... 10,000 9,642,200
7.125%, 9-30-99 ....................... 20,000 20,825,000
7.75%, 12-31-99 ....................... 10,000 10,676,600
7.25%, 5-15-2004 ...................... 5,000 5,338,300
7.875%, 11-15-2004 .................... 10,000 11,137,500
9.375%, 2-15-2006 ..................... 8,500 10,514,755
10.375%, 11-15-2012 ................... 4,000 5,290,640
9.25%, 2-15-2016 ...................... 5,000 6,410,950
Miscellaneous United States Government
Backed Securities:
National Archives Facility Trust,
8.5%, 9-1-2019 ...................... 4,422 5,095,725
Postal Square Limited Partnership,
8.95%, 6-15-2022 .................... 1,953 2,302,326
TOTAL UNITED STATES GOVERNMENT SECURITIES - 23.35% $123,317,546
(Cost: $115,421,609)
See Notes to Schedule of Investments on page 14.
<PAGE>
THE INVESTMENTS OF
UNITED RETIREMENT SHARES, INC.
JUNE 30, 1995
Value
TOTAL SHORT-TERM SECURITIES - 4.68% $ 24,691,038
(Cost: $24,691,038)
TOTAL INVESTMENT SECURITIES - 99.99% $527,989,903
(Cost: $453,343,325)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.01% 72,053
NET ASSETS - 100.00% $528,061,956
Notes to Schedule of Investments
*No income dividends were paid during the preceding 12 months.
(A) Listed on an exchange outside the United States.
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
UNITED RETIREMENT SHARES, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1995
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $527,989,903
Cash ............................................. 27,615
Receivables:
Dividends and interest .......................... 2,661,868
Investment securities sold ...................... 1,450,000
Fund shares sold ................................ 449,263
Prepaid insurance premium ......................... 18,296
------------
Total assets .................................. 532,596,945
------------
Liabilities
Payable for investment securities purchased ...... 2,830,050
Payable for Fund shares redeemed ................. 1,505,686
Accrued service fee ............................... 96,195
Accrued transfer agency and dividend disbursing .. 66,730
Accrued accounting services fee .................. 5,000
Other ............................................ 31,328
------------
Total liabilities ............................. 4,534,989
------------
Total net assets ............................. $528,061,956
============
Net Assets
$1.00 par value capital stock, authorized --
300,000,000; shares outstanding -- 63,920,608
Capital stock ................................... $ 63,920,608
Additional paid-in capital....................... 363,890,147
Accumulated undistributed income:
Accumulated undistributed net investment income . 2,187,534
Accumulated undistributed net
realized gain on investment
transactions .................................... 23,417,506
Net unrealized appreciation in value of
investments at end of period .................. 74,646,161
------------
Net assets applicable to outstanding
units of capital ............................. $528,061,956
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $8.26
Sales load (offering price x 5.75%) ................ .50
-----
Offering price per share (net asset value
divided by 94.25%) ............................... $8.76
=====
On sales of $100,000 or more the sales load
is reduced as set forth in the Prospectus.
See notes to financial statements.
<PAGE>
UNITED RETIREMENT SHARES, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended JUNE 30, 1995
Investment Income
Income:
Interest ........................................ $10,608,492
Dividends ....................................... 8,451,414
-----------
Total income .................................. 19,059,906
-----------
Expenses (Note 2):
Investment management fee ....................... 2,739,585
Transfer agency and dividend disbursing ......... 729,317
Service fee ..................................... 577,769
Accounting services fee ......................... 60,000
Custodian fees .................................. 35,621
Audit fees ...................................... 22,660
Legal fees ...................................... 12,105
Other ........................................... 131,739
-----------
Total expenses ................................ 4,308,796
-----------
Net investment income ........................ 14,751,110
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on securities .................. 29,080,227
Realized net loss on foreign
currency transactions ........................... (10,862)
-----------
Realized net gain on investments ................ 29,069,365
Unrealized appreciation in value of investments
during the period ............................... 25,469,423
-----------
Net gain on investments ....................... 54,538,788
-----------
Net increase in net assets resulting
from operations ............................ $69,289,898
===========
See notes to financial statements.
<PAGE>
UNITED RETIREMENT SHARES, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
June 30,
-------------------------
1995 1994
------------ ------------
Increase in Net Assets
Operations:
Net investment income ...............$ 14,751,110 $ 9,940,359
Realized net gain on investments .... 29,069,365 16,961,825
Unrealized appreciation
(depreciation) .................... 25,469,423 (8,435,883)
------------ ------------
Net increase in net assets
resulting from operations ........ 69,289,898 18,466,301
------------ ------------
Dividends to shareholders from:*
Net investment income ............... (13,359,196) (9,489,801)
Realized gains on securities
transactions ...................... (16,046,041) (14,680,000)
------------ ------------
(29,405,237) (24,169,801)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(8,362,713 and 12,022,339
shares, respectively) ............. 65,060,570 95,070,558
Proceeds from reinvestment of
dividends and/or capital gains
distribution (3,899,165 and
3,062,704 shares, respectively) ... 29,326,493 24,100,246
Payments for shares redeemed
(7,622,986 and 5,121,599
shares, respectively) ............. (59,045,801) (40,564,094)
------------ ------------
Net increase in net assets
resulting from capital
share transactions ............... 35,341,262 78,606,710
------------ ------------
Total increase ................... 75,225,923 72,903,210
Net Assets
Beginning of period .................. 452,836,033 379,932,823
------------ ------------
End of period, including
undistributed net investment
income of $2,187,534 and $806,482,
respectively ........................$528,061,956 $452,836,033
============ ============
*See "Financial Highlights" on page 18.
See notes to financial statements.
<PAGE>
UNITED RETIREMENT SHARES, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended June 30,
----------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $7.64 $7.70 $7.20 $6.41 $6.41
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... .24 .18 .22 .21 .26
Net realized and
unrealized gain
on investments .. .86 .22 .73 .91 .05
----- ----- ----- ----- -----
Total from investment
operations ....... 1.10 .40 .95 1.12 .31
----- ----- ----- ----- -----
Less distributions:
Dividends from
net investment
income .......... (0.22) (0.18) (0.23) (0.22) (0.26)
Distribution from
capital gains ... (0.26) (0.28) (0.22) (0.11) (0.05)
----- ----- ----- ----- -----
Total distributions. (0.48) (0.46) (0.45) (0.33) (0.31)
----- ----- ----- ----- -----
Net asset value,
end of period .... $8.26 $7.64 $7.70 $7.20 $6.41
===== ===== ===== ===== =====
Total return* ...... 15.07% 5.03% 13.45% 17.93% 5.07%
Net assets, end
of period (000
omitted) ......... $528,062$452,836$379,933$258,862$195,330
Ratio of expenses
to average net
assets ........... 0.89% 0.87% 0.80% 0.82% 0.88%
Ratio of net
investment income
to average net
assets ........... 3.04% 2.32% 2.98% 3.12% 4.20%
Portfolio turnover
rate ............. 48.62% 27.10% 30.62% 38.26% 29.05%
*Total return calculated without taking into account the
sales load deducted on an initial purchase.
See notes to financial statements.
<PAGE>
UNITED RETIREMENT SHARES, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1 -- Significant Accounting Policies
United Retirement Shares, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- Each stock and convertible bond is valued at the
latest sale price thereof on the last business day of the fiscal period as
reported by the principal securities exchange on which the issue is traded
or, if no sale is reported for a stock, the average of the latest bid and
asked prices. Bonds, other than convertible bonds, are valued using a
pricing system provided by a major dealer in bonds. Convertible bonds are
valued using this pricing system only on days when there is no sale
reported. Stocks which are traded over-the-counter are priced using
Nasdaq (National Association of Securities Dealers Automated Quotations)
which provides information on bid and asked or closing prices quoted by
major dealers in such stocks. Short-term debt securities are valued at
amortized cost, which approximates market.
B. Security transactions and related investment income -- Security
transactions are accounted for on the trade date (date the order to buy or
sell is executed). Securities gains and losses are calculated on the
identified cost basis. Original issue discount (as defined in the
Internal Revenue Code), premiums on the purchase of bonds and post-1984
market discount are amortized for both financial and tax reporting
purposes over the remaining lives of the bonds. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. See Note 3 -- Investment Securities Transactions.
C. Federal income taxes -- It is the Fund's policy to distribute all of its
taxable income and capital gains to its shareholders and otherwise qualify
as a regulated investment company under the Internal Revenue Code. In
addition, the Fund intends to pay distributions as required to avoid
imposition of excise tax. Accordingly, provision has not been made for
Federal income taxes. See Note 4 -- Federal Income Tax Matters.
D. Dividends and distributions -- Dividends and distributions to shareholders
are recorded by the Fund on the record date. Net investment income
distributions and capital gains distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are due to differing treatments
for items such as deferral of wash sales and post-October losses, foreign
currency transactions, net operating losses and expiring capital loss
carryforwards. At June 30, 1995, $10,862 was reclassified between
accumulated undistributed net investment income and accumulated
undistributed net realized gain on investment transactions.
NOTE 2 -- Investment Management and Payments to Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of two elements: (i) a "Specific" fee computed on net asset value as
of the close of business each day at the annual rate of .15% of net assets and
(ii) a "Group" fee computed each day on the combined net asset values of all of
the funds in the United Group of mutual funds (approximately $12.1 billion of
combined net assets at June 30, 1995) at annual rates of .51% of the first $750
million of combined net assets, .49% on that amount between $750 million and
$1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between $2.25
billion and $3 billion, .43% between $3 billion and $3.75 billion, .40% between
$3.75 billion and $7.5 billion, .38% between $7.5 billion and $12 billion, and
.36% of that amount over $12 billion. The Fund accrues and pays this fee
daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services,
the Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in
the following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
The Fund also pays WARSCO a monthly per account charge for transfer agency
and dividend disbursement services of $1.0208 for each shareholder account
which was in existence at any time during the prior month plus $0.30 for each
account on which a dividend or distribution of cash or shares had a record date
in that month. The Fund also reimburses W&R and WARSCO for certain out-of-
pocket costs.
As principal underwriter for the Fund's shares, W&R received direct and
indirect gross sales commissions (which are not an expense of the Fund) of
$2,495,772, out of which W&R paid sales commissions of $1,441,219 and all
expenses in connection with the sale of Fund shares, except for registration
fees and related expenses.
Under a Service Plan adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund may pay monthly a fee to W&R in an
amount not to exceed .25% of the Fund's average annual net assets. The fee is
to be paid to reimburse W&R for amounts it expends in connection with the
provision of personal services to Fund shareholders and/or maintenance of
shareholder accounts.
The Fund paid Directors' fees of $17,122.
W&R is an indirect subsidiary of Torchmark Corporation, a holding company,
and United Investors Management Company, a holding company, and a direct
subsidiary of Waddell & Reed Financial Services, Inc., a holding company.
NOTE 3 -- Investment Securities Transactions
Purchases of investment securities, other than U.S. Government obligations
and short-term securities, aggregated $187,884,122 while proceeds from
maturities and sales aggregated $208,248,411. Purchases of short-term and U.S.
Government securities aggregated $657,871,608 and $68,332,813, respectively.
Proceeds from maturities and sales of short-term and U.S. Government securities
aggregated $702,482,915 and $2,069,815, respectively.
For Federal income tax purposes, cost of investments owned at June 30,
1995 was $453,343,325, resulting in net unrealized appreciation of $74,646,578,
of which $79,668,684 related to appreciated securities and $5,022,106 related
to depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $29,080,227 during its fiscal year ended June 30, 1995, of which a portion
was paid to shareholders during the period ended June 30, 1995. Remaining
capital gain net income will be distributed to Fund shareholders.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Retirement Shares, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of United Retirement Shares, Inc.
(the "Fund") at June 30, 1995, the results of its operations for the year then
ended and the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1995 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
August 4, 1995
<PAGE>
INCOME TAX INFORMATION
The amounts of the dividends and long-term capital gains below, multiplied by
the number of shares owned by you on the record dates, will give you the total
amounts to be reported in your Federal income tax return for the years in which
they were received or reinvested.
PER-SHARE AMOUNTS REPORTABLE AS:
-----------------------------------------------
For Individuals For Corporations
----------------- -----------------------------
Record Ordinary Long-Term Non- Long-Term
Date Total IncomeCapital GainQualifyingQualifyingCapital Gain
--------- ----- ---------------------------------------------------
9-16-94 $0.0400 $0.0400 $0.0000 $0.0257 $0.0143 $0.0000
12-16-94 0.3370 0.0962 0.2408 0.0486 0.0476 0.2408
3-17-95 0.0500 0.0500 0.0000 0.0232 0.0268 0.0000
6-16-95 0.0500 0.0500 0.0000 0.0232 0.0268 0.0000
------- ------ ------ ------ ------- -------
Totals $0.4770 $0.2362 $0.2408 $0.1207 $0.1155 $0.2408
======= ====== ====== ====== ======= =======
CORPORATION DEDUCTIONS -- Under Federal tax law, the amounts reportable as
Qualifying Dividends are eligible for the dividends received deduction in the
year received as provided by Section 243 of the Internal Revenue Code.
The tax status of dividends paid will be reported to you on Form 1099-DIV after
the close of the applicable calendar year.
Shareholders are advised to consult with their tax advisor concerning the tax
treatment of dividends and distributions from the Fund.
<PAGE>
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
James B. Judd, Kansas City, Missouri
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
Cynthia P. Prince-Fox, Vice President
Carl E. Sturgeon, Vice President
This report is submitted for the general information of the shareholders of
United Retirement Shares, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United Retirement Shares, Inc. current prospectus.
To all IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from an IRA unless you make a written election not
to have taxes withheld. The election may be made by submitting forms provided
by Waddell & Reed, Inc. which can be obtained from your Waddell & Reed
representative or by submitting Internal Revenue Service form W-4P. Once made,
an election can be revoked by providing written notice to Waddell & Reed, Inc.
If you elect not to have tax withheld you may be required to make payments of
estimated tax. Penalties may be imposed by the IRS if withholding and
estimated tax payments are not adequate.
<PAGE>
THE UNITED GROUP OF MUTUAL FUNDS
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Continental Income Fund, Inc.
United Retirement Shares, Inc.
United Asset Strategy Fund, Inc.
United Income Fund
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
------------------------------------
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P. O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1007A(6-95)
printed on recycled paper
