United
Municipal
Bond Fund,
Inc.
ANNUAL
REPORT
--------------------------------------------
For the fiscal year ended September 30, 1996
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
SEPTEMBER 30, 1996
Dear Shareholder:
This report relates to the operation of United Municipal Bond Fund, Inc.
for the fiscal year ended September 30, 1996. The discussion, graphs and tables
contained in this report will provide you with information regarding the Fund's
performance during that period.
During the first part of the fiscal year, the Federal Reserve lowered
short-term interest rates in an attempt to stimulate a sluggish economy. As
interest rates declined, the prices of long-term bonds rose, peaking during the
beginning of the second fiscal quarter. An apparently strengthening economy
during the first half of 1996 caused interest rates to rise and bond prices to
decline. However, economic growth in fact had been moderate and recent
recognition of this resulted in interest rates returning close to where they
began the year. Election-year proposals to balance the federal budget, reduce
the size of government and cut taxes also contributed to market volatility.
As interest rates and yields dropped during the beginning of the fiscal
year, we attempted to shorten the average maturity of the Fund's holdings while
endeavoring to maintain yields. During the latter stages of the fiscal year, we
attempted to maintain the average maturity of the Fund's portfolio while
purchasing bonds that tend to perform well in periods of declining yields.
However, we attempted to avoid investments that presented excessive risks if
interest rates rise.
The strategies and techniques we applied resulted in the Fund's performance
exceeding that of the indexes charted on the following page. Those indexes
reflect the performance of securities that generally represent the municipal
bond market (the Lehman Brothers Municipal Bond Index) and the universe of funds
with similar investment objectives (the Lipper General Municipal Bond Fund
Universe Average).
We expect moderate economic growth as the next fiscal year begins. We
intend to maintain a neutral posture as we expect the municipal bond market to
trade in a rather narrow range. We will continue to monitor data for signs of
economic activity and respond accordingly with investments consistent with the
Fund's objectives.
Thank you for your continued confidence.
Respectfully,
John M. Holliday
Manager, United Municipal Bond Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED MUNICIPAL BOND FUND, INC.,
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX,
AND THE LIPPER GENERAL MUNICIPAL BOND FUND UNIVERSE AVERAGE
Lipper
General
United Lehman Municipal
MunicipalBrothers Bond
Bond Municipal Fund
Fund, Bond Universe
Inc. Index Average
------------------ ----------
09/30/86 Purchase 9,575 10,000 10,000
09/30/87 9,240 10,050 9,783
09/30/88 10,909 11,375 11,143
09/30/89 12,081 12,363 12,100
09/30/90 12,620 13,203 12,730
09/30/91 14,509 14,944 14,365
09/30/92 16,164 16,507 15,837
09/30/93 18,613 18,609 17,901
09/30/94 17,885 18,156 17,208
09/30/95 19,945 20,187 18,883
09/30/96 21,375 21,407 19,931
==== United Municipal Bond Fund, Inc.* -- $21,375
++++ Lehman Brothers Municipal Bond Index -- $21,407
---- Lipper General Municipal Bond Fund Universe Average - $19,931
*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.
Annual Average Total Return
Class A+
---------------------
Year Ended
9/30/96 2.61%
5 Years Ended
9/30/96 7.12%
10 Years Ended
9/30/96 7.89%
+ Performance data quoted represents past performance and is based on deduction
of a 4.25% 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.
Past performance is not predictive of future performance. Indexes are
unmanaged.
<PAGE>
SHAREHOLDER SUMMARY
- --------------------------------------------------------------
United Municipal Bond Fund, Inc.
PORTFOLIO STRATEGY:
Minimum 80% investment OBJECTIVE: Income not subject to Federal
quality Municipal Bonds income taxation. (Income may be
subject to state and local taxes
Maximum 10% Non-Municipal and a portion may be subject to
Bond Debt Securities Federal taxes, including
alternative minimum tax.)
May own 25% or more
Industrial Revenue Bonds STRATEGY: Invests in municipal bonds
(debt securities the interest on which
is generally exempt from Federal income
tax.) (May invest in certain futures.)
FOUNDED: 1976
SCHEDULED DIVIDEND FREQUENCY: MONTHLY
PERFORMANCE SUMMARY -- Class A Shares
PER SHARE DATA
For the Fiscal Year Ended September 30, 1996
- --------------------------------------------
DIVIDENDS PAID $0.39
=====
CAPITAL GAINS DISTRIBUTION $0.05
=====
NET ASSET VALUE ON
9/30/96 $7.32 adjusted to: $7.37 (A)
9/30/95 7.25
-----
CHANGE PER SHARE $0.12
=====
(A) This number includes the capital gains distribution of $0.05 paid in
December 1995 added to the actual net asset value on September 30, 1996.
Past performance is not necessarily indicative of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load* Sales Load**
- ------ ----------- -----------
1-year period ended 9-30-96 2.61% 7.16%
5-year period ended 9-30-96 7.12% 8.05%
10-year period ended 9-30-96 7.89% 8.36%
Performance data quoted represents past performance and is based on deduction of
4.25% 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 September 30, 1996, United Municipal Bond Fund, Inc. had net assets totaling
$996,938,662 invested in a diversified portfolio.
As a shareholder of United Municipal Bond Fund, Inc., for every $100 you had
invested on September 30, 1996, your Fund owned:
$17.44 Public Power Revenue Bonds
14.48 Airport Revenue Bonds
8.53 Student Loan Bonds
7.89 Other Municipal Bonds
7.84 Housing Revenue Bonds
7.34 Hospital Revenue Bonds
7.25 Resource Recovery Bonds
4.92 Water and Sewer Revenue Bonds
4.83 Cash and Cash Equivalents
4.57 Electric Utility Revenue Bonds
4.11 Derivative Bonds
3.95 Industrial Revenue/Pollution Control Revenue Bonds
3.53 Lease/Certificates of Participation Bonds
3.32 Adjustable Rate Bonds
1996 TAX YEAR TAXABLE EQUIVALENT YIELDS*
- --------------------------------------------------------------------------------
If your Taxable Income is:
Your
Marginal Equivalent Tax Free Yields
Joint Single Tax -----------------------------------
Return ReturnBracket Is 5% 6% 7% 8%
- -----------------------------------------------------------------
$ 0- 40,100$ 0- 24,000 15% 5.88 7.06 8.24 9.41
$ 40,101- 96,900$ 24,001- 58,150 28% 6.94 8.33 9.72 11.11
$ 96,901-147,700$ 58,151-121,300 31% 7.25 8.70 10.14 11.59
$147,701-263,750$121,301-263,750 36% 7.81 9.38 10.94 12.50
$263,751 and above$263,751 and above 39.6% 8.28 9.93 11.59 13.25
Above table is for illustration only and does not represent the actual
performance of
United Municipal Bond Fund, Inc.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS
ALABAMA - 1.45%
Alabama Higher Education Loan Corporation,
Student Loan Revenue Refunding Bonds,
Series 1994-D,
6.0%, 9-1-2007 ........................ $ 8,155 $ 8,379,262
The Industrial Development Board of the
Town of Camden (Alabama), Pollution
Control Facilities Revenue Refunding
Bonds, Series 1990-A (MacMillan
Bloedel Project),
7.75%, 5-1-2009 ....................... 5,655 6,093,263
Total ................................. 14,472,525
ALASKA - 0.43%
City of Valdez, Alaska, Marine Terminal
Revenue Refunding Bonds (Sohio Pipe Line
Company Project), Series 1985,
7.125%, 12-1-2025 ..................... 2,500 2,703,125
Alaska Housing Finance Corporation,
General Housing Purpose Bonds, 1994
Series A (Refunding/Non-AMT),
5.0%, 12-1-2008 ....................... 1,640 1,562,100
Total ................................. 4,265,225
ARIZONA - 0.63%
Arizona Educational Loan Marketing
Corporation, Educational Loan Revenue
Bonds, Junior Subordinate Series 1993,
6.3%, 12-1-2008 ....................... 3,155 3,241,762
The Industrial Development Authority
of the City of Tucson, Arizona,
Multifamily Housing Revenue Bonds,
Series 1985 (HSL La Cholla Project),
Adjustable Rate Bond,
3.7499%, 12-1-2014..................... 3,030 3,030,000
Total ................................. 6,271,762
ARKANSAS - 0.18%
Arkansas Development Finance Authority,
Single Family Mortgage Revenue Bonds
(Access Program), 1995 Series F,
7.45%, 1-1-2027 ....................... 1,710 1,846,800
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
CALIFORNIA - 8.18%
Southern California Public Power Authority:
Palo Verde Project, Power Project
Revenue Bonds, 1993 Subordinate Refunding
Series, Auction-Based/Inverse Floater,
5.35%, 7-1-2012 ....................... $10,000 $ 9,500,000
Transmission Project Revenue Bonds, 1992
Subordinate Refunding Series (Southern
Transmission Project), Auction-Based/
Inverse Floater (RIBS),
7.57%, 7-1-2012 (A).................... 5,000 5,175,000
Multiple Project Revenue Bonds, 1989 Series,
6.75%, 7-1-2012 ....................... 3,455 3,856,644
Mead-Adelanto Project Revenue Bonds,
1994 Series A, Linked Inverse Floating
Rate Security,
5.15%, 7-1-2015 ....................... 2,800 2,576,000
Mead-Phoenix Project Revenue Bonds,
1994 Series A, Linked Inverse Floating
Rate Security,
5.15%, 7-1-2015 ....................... 1,600 1,464,000
Transmission Agency of Northern California,
California-Oregon Transmission Project
Revenue Bonds, 1990 Series A,
7.0%, 5-1-2013 ........................ 12,000 13,995,000
Imperial Irrigation District,
1993 Refunding Certificates of
Participation (1990 Electric
System Project),
5.2%, 11-1-2009 ....................... 10,000 9,812,500
Alhambra Redevelopment Agency, Industrial
Redevelopment Project, As Amended, Tax
Allocation Refunding Bonds, Series 1996,
5.35%, 5-1-2014 ....................... 7,250 7,041,562
Stanislaus Waste-To-Energy Financing
Agency, Solid Waste Facility Refunding
Revenue Certificates (Ogden Martin Systems
of Stanislaus, Inc. Project), Series 1990,
7.625%, 1-1-2010 ...................... 5,775 6,157,594
California Statewide Communities Development
Authority, Hospital Revenue Certificates
of Participation, Cedars-Sinai Medical Center,
Series 1992,
6.5%, 8-1-2012 ........................ 5,200 5,525,000
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
CALIFORNIA (Continued)
California Health Facilities Financing
Authority, Hospital Revenue Bonds (Downey
Community Hospital), Series 1993,
5.75%, 5-15-2015 ...................... $ 4,250 $ 3,984,375
Student Education Loan Marketing Corporation,
Student Loan Program Revenue Bonds, Junior
Subordinate Series 111-D-1 Bonds,
6.7%, 7-1-2008 ........................ 3,500 3,465,000
Sacramento Municipal Utility District,
Electric Revenue Refunding Bonds,
1993 Series G,
6.5%, 9-1-2013 ........................ 2,500 2,768,750
Intermodal Container Transfer Facility,
Joint Powers Authority, Intermodal
Container Transfer Facility Refunding
Revenue Bonds, 1989 Series A,
7.7%, 11-1-2014 ....................... 2,000 2,090,000
California Rural Home Mortgage Finance
Authority, Single Family Mortgage
Revenue Bonds (Mortgage-Backed Securities
Program), 1995 Series B,
7.75%, 9-1-2026 ....................... 1,755 1,996,313
Los Angeles County Public Works Financing
Authority, Lease Revenue Refunding Bonds
(County of Los Angeles 1996 Master
Refunding Project),
5.25%, 9-1-2013 ....................... 1,230 1,168,500
Sacramento County Sanitation Districts
Financing Authority, 1993 Revenue Bonds,
5.125%, 12-1-2013 ..................... 1,000 932,500
Total ................................. 81,508,738
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
COLORADO - 7.84%
City and County of Denver, Colorado,
Airport System Revenue Bonds:
Series 1991D:
7.75%, 11-15-2013 ..................... $11,905 $ 14,181,831
7.0%, 11-15-2025 ...................... 6,000 6,217,500
Series 1992C,
6.75%, 11-15-2013 ..................... 11,410 11,880,662
Series 1990A,
0.0%, 11-15-2003 ...................... 7,955 5,300,019
Series 1992B,
7.25%, 11-15-2023 ..................... 2,500 2,693,750
Series 1991A,
0.0%, 11-15-2003 ...................... 3,370 2,245,263
Series 1994A,
7.5%, 11-15-2003 ...................... 2,000 2,187,500
Colorado Housing and Finance Authority:
Single Family Program Senior Bonds:
1995 Series A,
8.0%, 6-1-2025 ........................ 4,400 4,999,500
1995 Series D-1,
7.375%, 6-1-2026 ...................... 4,045 4,459,613
1996 Series A-1,
7.4%, 11-1-2027 ....................... 3,765 4,165,031
1995 Series C-1,
7.65%, 12-1-2025 ...................... 2,610 2,923,200
1995 Series B-1,
7.9%, 12-1-2025 ....................... 1,225 1,391,906
Single Family Program Senior and Subordinate
Bonds:
1996 Series B-1,
7.65%, 11-1-2026 ...................... 2,750 3,073,125
1996 Series C-1,
7.55%, 11-1-2027 ...................... 1,580 1,726,150
Colorado Student Obligation Bond Authority,
Student Loan Asset-Backed Obligations,
Senior Subordinate, 1995 Series II-B,
6.2%, 12-1-2008 ....................... 8,000 8,020,000
City of Colorado Springs, Colorado,
Utilities System Refunding Revenue Bonds,
Series 1991A,
6.5%, 11-15-2015 ...................... 1,500 1,625,625
Douglas County, Colorado, Certificates of
Participation, Series 1996,
5.6%, 11-1-2011 ....................... 1,105 1,110,525
Total ................................. 78,201,200
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
CONNECTICUT - 2.57%
Bristol Resources Recovery Facility,
Operating Committee, Solid Waste Revenue
Refunding Bonds (Ogden Martin Systems of
Bristol, Inc. Project--1995 Series),
6.5%, 7-1-2014 ........................ $ 7,000 $ 7,297,500
Connecticut Development Authority,
Adjustable Rate Pollution Control Revenue
Bonds (New England Power Company Project--
1985 Series),
7.25%, 10-15-2015 ..................... 6,700 7,185,750
Eastern Connecticut Resource Recovery
Authority, Solid Waste Revenue Bonds
(Wheelabrator Lisbon Project),
Series 1993A,
5.5%, 1-1-2014 ........................ 6,750 6,277,500
Connecticut Resources Recovery Authority,
Mid-Connecticut System Bonds,
1996 Series A,
5.25%, 11-15-2008 ..................... 5,000 4,900,000
Total ................................. 25,660,750
FLORIDA - 2.30%
Escambia County, Florida, Pollution Control
Revenue Bonds (Champion International
Corporation Project), Series 1994,
6.9%, 8-1-2022 ........................ 9,000 9,450,000
Lake County, Florida, Resource Recovery
Industrial Development Refunding Revenue
Bonds (NRG/Recovery Group Project),
Series 1993A:
5.85%, 10-1-2009 ...................... 5,825 5,686,656
5.95%, 10-1-2013 ...................... 2,690 2,616,025
Manatee County, Florida, Public Utilities
Revenue Refunding Bonds, Series 1993 A,
5.0%, 10-1-2013 ....................... 5,000 4,650,000
City of Atlantic Beach, Florida, Variable
Rate Demand, Improvement and Refunding
Revenue Bonds, Series 1994B (Fleet
Landing Project),
4.089%, 10-1-2024 ..................... 500 500,000
Total ................................. 22,902,681
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
GEORGIA - 3.24%
Municipal Electric Authority of Georgia:
Project One Special Obligation Bonds,
Fifth Crossover Series,
6.4%, 1-1-2013 ........................ $15,500 $ 16,836,875
General Power Revenue Bonds,
1992B Series,
8.25%, 1-1-2011 ....................... 8,700 10,972,875
Development Authority of Burke County
(Georgia), Pollution Control Revenue Bonds
(Georgia Power Company Plant Vogtle
Project), Sixth Series 1994,
6.375%, 8-1-2024 ...................... 4,300 4,488,125
Total ................................. 32,297,875
HAWAII - 2.26%
State of Hawaii, Airports System Revenue
Bonds, Second Series of 1991,
6.9%, 7-1-2012 ........................ 20,195 22,517,425
IDAHO - 0.65%
Idaho Health Facilities Authority, Hospital
Revenue Refunding Bonds, Series 1992
(IHC Hospitals, Inc.), Indexed Inverse
Floating/Fixed Term Bonds,
8.57%, 2-15-2021 (B) .................. 6,000 6,502,500
ILLINOIS - 4.42%
City of Chicago, Chicago-O'Hare
International Airport:
General Airport Second Lien Revenue
Refunding Bonds, 1993 Series C:
5.0%, 1-1-2011 ........................ 10,590 9,835,462
5.0%, 1-1-2010 ........................ 3,000 2,808,750
Special Facility Revenue
Bonds, American Airlines,
Inc. Project:
7.875%, 11-1-2025 ..................... 7,250 7,793,750
Series 1994,
8.2%, 12-1-2024 ....................... 3,000 3,468,750
Special Facility Revenue Bonds (United
Air Lines, Inc. Project):
Series 1984C,
8.2%, 5-1-2018 ........................ 5,115 5,549,775
Series 1988A,
8.4%, 5-1-2018 ........................ 5,000 5,443,750
General Airport Revenue Refunding
Bonds, 1993 Series A,
5.0%, 1-1-2012 ........................ 3,000 2,808,750
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
ILLINOIS (Continued)
Illinois Health Facilities Authority
(Lutheran General HealthSystem),
Indexed Inverse Floating Rate
Revenue Bonds, Series 1993B,
7.24%, 4-1-2014 (C) ................... $ 4,100 $ 4,187,125
City of Peoria, City of Moline and City
of Freeport, Illinois, Collateralized
Single Family Mortgage Revenue Bonds,
Series 1995-A,
7.6%, 4-1-2027 ........................ 2,000 2,167,500
Total ................................. 44,063,612
INDIANA - 2.60%
Indiana State Office Building Commission,
Capitol Complex Revenue Bonds:
Series 1990B (State Office Building
I Facility),
7.4%, 7-1-2015 ........................ 8,000 9,590,000
Series 1990A (Senate Avenue Parking Facility),
7.4%, 7-1-2015 ........................ 4,775 5,724,031
Indiana Transportation Finance Authority,
Highway Revenue Bonds, Series 1990A,
7.25%, 6-1-2015 ....................... 9,000 10,620,000
Total ................................. 25,934,031
KENTUCKY - 0.64%
Kentucky Economic Development Finance
Authority, Hospital Revenue Bonds,
Baptist Healthcare System Issue,
Series 1994,
5.0%, 8-15-2015 ....................... 4,650 4,248,937
Kenton County Airport Board (Commonwealth
of Kentucky), Special Facilities Revenue
Bonds, 1992 Series A (Delta Air Lines,
Inc. Project),
7.5%, 2-1-2012 ........................ 2,000 2,140,000
Total ................................. 6,388,937
LOUISIANA - 3.16%
Memorial Hospital Service District of the
Parish of Calcasieu, State of Louisiana,
Hospital Revenue Bonds (Lake Charles
Memorial Hospital Project), Series 1993,
Adjustable Rate Bond,
4.875%, 12-1-2018 ..................... 12,500 12,500,000
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
LOUISIANA (Continued)
Parish of Jefferson Home Mortgage Authority,
Tax-Exempt Agency Mortgage-Backed
Securities:
Series 1994A,
7.55%, 12-1-2026 ...................... $ 5,495 $ 6,312,381
Series 1995A,
6.65%, 12-1-2026 ...................... 4,300 4,536,500
Louisiana Public Facilities Authority,
Hospital Revenue and Refunding Bonds
(St. Francis Medical Center Project),
Series 1994B,
5.375%, 7-1-2014 ...................... 8,600 8,127,000
Total ................................. 31,475,881
MAINE - 0.31%
Maine Educational Loan Marketing Corporation,
Student Loan Revenue Refunding Bonds,
Series 1991A,
6.9%, 11-1-2003 ....................... 2,970 3,137,062
MARYLAND - 0.39%
Northeast Maryland Waste Disposal Authority,
Solid Waste Revenue Bonds (Montgomery
County Resource Recovery Project),
Series 1993A,
6.3%, 7-1-2016 ........................ 3,700 3,852,625
MASSACHUSETTS - 4.21%
Massachusetts Municipal Wholesale Electric
Company, A Public Corporation of the
Commonwealth of Massachusetts, Power
Supply System Revenue Bonds, Linked
PARS and INFLOS,
5.45%, 7-1-2018 ....................... 30,000 28,275,000
The New England Education Loan Marketing
Corporation, Student Loan Refunding Bonds,
1993 Series A (Nellie Mae),
5.7%, 7-1-2005 ........................ 7,550 7,625,500
Massachusetts Bay Transportation Authority,
General Transportation System Bonds,
1995 Series B,
5.25%, 3-1-2012 ....................... 2,430 2,341,912
Massachusetts State College Building
Authority, Project and Refunding
Revenue Bonds, Senior Series 1994-A,
7.5%, 5-1-2014 ........................ 1,750 2,119,688
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MASSACHUSETTS (Continued)
Boston Water and Sewer Commission,
General Revenue Bonds, 1992 Series A
(Senior Series),
5.75%, 11-1-2013 ...................... $ 1,575 $ 1,596,656
Total ................................. 41,958,756
MICHIGAN - 1.87%
Michigan Strategic Fund, Limited Obligation
Refunding Revenue Bonds (The Detroit Edison
Company Pollution Control Bonds Project),
Collateralized Series 1991 AA,
6.95%, 5-1-2011 ....................... 8,000 9,070,000
Michigan State Hospital Finance Authority:
Hospital Revenue Refunding Bonds
(McLaren Obligated Group),
Series 1993A,
5.375%, 10-15-2013 .................... 2,250 2,109,375
Hospital Revenue Bonds (Holland Community
Hospital), Series 1993,
5.25%, 1-1-2010 ....................... 1,200 1,128,000
The Economic Development Corporation of
Dickinson County (Michigan), Solid Waste
Disposal Refunding Revenue Bonds
(Champion International Corporation Project),
Series 1989,
6.55%, 3-1-2007 ....................... 3,000 3,138,750
School District of the City of Detroit,
Wayne County, Michigan, School Building
and Site Improvement and Refunding Bonds
(Unlimited Tax General Obligation),
Series 1993,
5.0%, 5-1-2011 ........................ 1,885 1,753,050
Charter County of Wayne, Michigan, Detroit
Metropolitan Wayne County Airport, Airport
Revenue Bonds, Subordinate Lien,
Series 1993B,
5.25%, 12-1-2013 ...................... 1,500 1,402,500
Total ................................. 18,601,675
MINNESOTA - 0.70%
City of Rochester, Minnesota, Health
Care Facilities Revenue Bonds (Mayo
Foundation/Mayo Medical Center),
Series 1992D, Indexed Inverse
Floating/Fixed Term Bonds,
8.11%, 11-15-2009 (D) ................. 4,500 4,764,375
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MINNESOTA (Continued)
Minnesota Housing Finance Agency, Single
Family Mortgage Bonds, 1994 Series E,
5.6%, 7-1-2013 ........................ $ 2,250 $ 2,179,687
Total ................................. 6,944,062
MISSISSIPPI - 2.09%
Lowndes County, Mississippi, Solid Waste
Disposal and Pollution Control
Refunding Revenue Bonds (Weyerhaeuser
Company Project), Series 1992B, Indexed
Inverse Floating/Fixed Term Bonds,
8.57%, 4-1-2022 (E) ................... 11,000 12,182,500
Mississippi Higher Education Assistance
Corporation, Student Loan Revenue Bonds,
Subordinate Series 1996-C:
6.75%, 9-1-2014 ....................... 5,500 5,568,750
6.7%, 9-1-2012 ........................ 1,470 1,490,212
Mississippi Home Corporation, Single Family
Mortgage Revenue Bonds, Series 1996F (AMT),
6.0%, 12-1-2027 ....................... 1,500 1,614,375
Total ................................. 20,855,837
MISSOURI - 3.47%
Health Facilities Revenue Bonds
(Barnes-Jewish, Inc./Christian Health
Services), Series 1993A:
6.0%, 5-15-2011 ....................... 3,000 3,116,250
5.25%, 5-15-2014 ...................... 2,900 2,776,750
Missouri Housing Development Commission,
Single Family Mortgage Revenue Bonds
(Homeownership Loan Program):
1995 Series C,
7.25%, 9-1-2026 ....................... 2,985 3,283,500
1996 Series C,
7.45%, 9-1-2027 ....................... 1,680 1,843,800
Variable Rate Demand Certificates of
Participation in Boatmen's St. Louis,
Grantor Trust # 1, Series 1996A, ,
3.95%, 6-30-2001 ...................... 5,000 5,000,000
St. Louis Municipal Finance Corporation,
City Justice Center, Leasehold Revenue
Improvement Bonds, Series 1996A (City of
St. Louis, Missouri, Lessee):
5.7%, 2-15-2009 ....................... 2,465 2,474,244
5.6%, 2-15-2008 ....................... 2,390 2,398,963
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MISSOURI (Continued)
Health and Educational Facilities Authority
of the State of Missouri, Health Facilities
Revenue Bonds (BJC Health System),
Series 1994A,
6.75%, 5-15-2012 ...................... $ 4,000 $ 4,505,000
Health and Educational Facilities Authority
of the State of Missouri, Variable Rate
Demand Health Facilities Revenue Bonds
(Bethesda Barclay House), Series 1996A,
4.189%, 8-15-2026 ..................... 4,400 4,400,000
Missouri Development Finance Board, Industrial
Development Revenue Bonds, Series 1995
(J & J Enterprises Leasing, L.C. Project),
4.089%, 8-1-2010 ...................... 3,430 3,430,000
Missouri Higher Education Loan Authority
(A Public Instrumentality and Body
Corporate and Politic of the State of
Missouri), Student Loan Revenue Bonds,
Subordinate Series 1994A,
5.45%, 2-15-2009 ...................... 1,500 1,393,125
Total ................................. 34,621,632
MONTANA - 0.12%
State of Montana, The Board of Regents
of Higher Education, Montana State
University, Facilities Improvement and
Refunding Revenue Bonds, Series D 1996,
5.25%, 11-15-2013 ..................... 1,250 1,204,687
NEBRASKA - 1.47%
Nebraska Higher Education Loan Program,
Inc., 1993-2 Series A-6 Junior
Subordinate Bonds,
6.4%, 6-1-2013 ........................ 14,500 14,681,250
NEVADA - 0.78%
Washoe County, Nevada, Variable Rate Demand
Water Facilities, Revenue Bonds (Sierra
Pacific Power Company Project),
Series 1987,
6.65%, 6-1-2017 ....................... 5,000 5,275,000
Nevada Housing Division, Single Family
Mortgage Bonds:
1996 Series C Mezzanine Bonds,
6.6%, 4-1-2014 ........................ 1,500 1,518,750
1996 Series C Subordinate Bonds,
6.35%, 4-1-2009 ....................... 1,000 1,012,500
Total ................................. 7,806,250
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW HAMPSHIRE - 0.44%
The Industrial Development Authority of
The State of New Hampshire, Pollution
Control Revenue Bonds (The Connecticut
Light and Power Company Project),
Series 1989,
7.375%, 12-1-2019 ..................... $ 4,000 $ 4,355,000
NEW JERSEY - 3.45%
The Union County Utilities Authority
(New Jersey), Solid Waste System Revenue
Bonds, 1991 Series A:
6.95%, 6-15-2003 ...................... 9,000 9,213,750
7.2%, 6-15-2014 ....................... 5,400 5,494,500
7.15%, 6-15-2009 ...................... 4,000 4,080,000
The Hudson County Improvement Authority,
Essential Purpose Pooled Governmental
Loan Program Bonds, Series 1986,
7.6%, 8-1-2025 ........................ 5,170 5,712,850
Pollution Control Financing Authority
of Camden County (Camden County, New
Jersey), Solid Waste Disposal and
Resource Recovery System Revenue Bonds,
Series 1991 B,
7.5%, 12-1-2009 ....................... 5,340 5,333,325
Middlesex County Utilities Authority,
Sewer Revenue Refunding Bonds, Series
1992A, Indexed Inverse Floating/Fixed
Term Bonds,
7.7%, 8-15-2010 (F) ................... 3,000 3,270,000
The Essex County Utilities Authority (Essex
County, New Jersey), Solid Waste System
Revenue Bonds, Tax-Exempt Series 1996-A,
5.5%, 4-1-2011 ........................ 1,300 1,275,625
Total ................................. 34,380,050
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW MEXICO - 2.45%
New Mexico Educational Assistance
Foundation, Student Loan Program Bonds:
First Subordinate 1995 Series A-2:
5.95%, 11-1-2007 ...................... $ 3,005 $ 2,982,463
5.85%, 11-1-2006 ...................... 1,745 1,712,281
5.5%, 11-1-2003 ....................... 1,255 1,308,337
First Subordinate 1996 Series A-2,
6.2%, 11-1-2008 ....................... 2,210 2,207,238
Second Subordinate 1996 Series A-3,
6.75%, 11-1-2008 ...................... 2,175 2,172,281
Second Subordinate 1995 Series A-3,
6.6%, 11-1-2010 ....................... 1,500 1,481,250
New Mexico Educational Assistance
Foundation, Student Loan Purchase Bonds:
Senior 1995 Series IV-A1,
7.05%, 3-1-2010 ....................... 6,485 6,882,206
First Subordinate 1994 Series II-B (Amt),
5.75%, 12-1-2008 ...................... 1,750 1,719,375
City of Albuquerque, New Mexico, Governmental
Purpose Airport Refunding Revenue Bonds,
Series 1989,
6.5%, 7-1-2019 ........................ 3,950 3,994,082
Total ................................. 24,459,513
NEW YORK - 7.41%
New York State Environmental Facilities
Corporation, State Water Pollution
Control, Revolving Fund Revenue Bonds,
Series 1994 A (New York City Municipal
Water Finance Authority Project)
(Second Resolution Bonds):
5.75%, 6-15-2012 ...................... 10,000 10,300,000
5.75%, 6-15-2011 ...................... 5,000 5,112,500
The City of New York, General Obligation
Bonds:
Fiscal 1996 Series E,
6.5%, 2-15-2006 ....................... 5,000 5,212,500
Fiscal 1994 Series C Inverse Floater,
19.46%, 9-30-2003 (G) ................. 3,250 4,875,000
Fiscal 1997 Series A, Fixed Rate
Tax-Exempt Bonds,
6.0%, 8-1-2004 ........................ 3,000 3,052,500
New York City Municipal Water Finance
Authority, Water and Sewer System
Revenue Bonds, Fiscal 1993 Series A,
6.0%, 6-15-2010 ....................... 12,000 12,450,000
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW YORK (Continued)
New York State Medical Care Facilities
Finance Agency, Mental Health Services
Facilities Improvement Revenue Bonds,
1993 Series F Refunding,
5.375%, 2-15-2014 ..................... $12,000 $ 11,520,000
Housing New York Corporation, Senior
Revenue Refunding Bonds, Series 1993,
5.0%, 11-1-2013 ....................... 6,600 5,931,750
Dormitory Authority of the State of New York:
State University Educational
Facilities, Revenue Bonds,
Series 1990B,
7.5%, 5-15-2011 ....................... 2,000 2,335,000
Department of Health of the State of
New York, Revenue Bonds, Series 1996,
5.5%, 7-1-2010 ........................ 2,000 1,915,000
Nyack Hospital, Revenue Bonds, Series 1996,
6.25%, 7-1-2013 ....................... 1,000 1,008,750
Municipal Assistance Corporation for the
City of New York (A Public Benefit
Corporation of the State of New York),
Series E Bonds,
5.2%, 7-1-2008 ........................ 4,000 4,005,000
New York State Urban Development Corporation,
Correctional Capital Facilities Revenue Bonds,
1993A, Refunding Series,
5.25%, 1-1-2014 ....................... 3,000 2,898,750
New York Local Government Assistance
Corporation (A Public Benefit Corporation
of the State of New York),
Series 1993D Bonds,
5.375%, 4-1-2014 ...................... 2,370 2,278,163
Rockland County Solid Waste Management
Authority, General Obligation Bonds,
Series 1996B-AMT,
5.625%, 12-15-2014 .................... 1,000 975,000
Total ................................. 73,869,913
NORTH CAROLINA - 2.09%
North Carolina Eastern Municipal Power
Agency, Power System Revenue Bonds,
Refunding Series 1993 B,
7.0%, 1-1-2008 ........................ 19,000 20,828,750
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
OHIO - 1.59%
County of Cuyahoga, Ohio, Hospital Revenue
Bonds, Series 1990 (Meridia Health System),
7.25%, 8-15-2019 ...................... $ 4,980 $ 5,291,250
1993 Beneficial Interest Certificates
(Belleville Hydroelectric Project),
Ohio Municipal Electric Generation
Agency Joint Venture 5, "OMEGA JV5",
5.375%, 2-15-2013 ..................... 2,750 2,677,813
State of Ohio, Pollution Control Revenue
Refunding Bonds, Ohio Water Development
Authority, 1989 Series A (Ohio Edison
Company Project),
7.625%, 7-1-2023 ...................... 2,500 2,606,250
State of Ohio (OPFC), Mental Health Capital
Facilities Bonds, Series II-1996A,
4.5%, 12-1-2010 ....................... 2,350 2,097,375
City of Moraine, Ohio, Solid Waste
Disposal Revenue Bonds (General Motors
Corporation Project), Series 1994,
6.75%, 7-1-2014 ....................... 1,550 1,712,750
City of Dayton, Ohio, Special Facilities
Revenue Refunding Bonds, 1993 Series E
(Emery Air Freight Corporation and
Emery Worldwide Airlines, Inc. -
Guarantors), (Non-AMT),
6.05%, 10-1-2009 ...................... 1,500 1,507,500
Total ................................. 15,892,938
OKLAHOMA - 1.01%
Oklahoma Housing Finance Agency, Single
Family Mortgage Revenue Bonds
(Homeownership Loan Program):
1995 Series B, Subseries B-2 (AMT),
7.625%, 9-1-2026 ...................... 5,815 6,323,813
1996 Series A,
7.05%, 9-1-2026 ....................... 1,000 1,081,250
Trustees of the Tulsa Municipal Airport
Trust, 1988 Adjustable Rate Revenue
Obligations, American Airlines,
7.375%, 12-1-2020 ..................... 2,500 2,646,875
Total ................................. 10,051,938
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
OREGON - 0.98%
The Port of Portland, Oregon, Portland
International Airport, Revenue Bonds,
Series Eleven:
5.5%, 7-1-2011 ........................ $ 4,285 $ 4,220,725
5.5%, 7-1-2010 ........................ 4,140 4,098,600
State of Oregon, Housing and Community
Services Department, Mortgage Revenue
Bonds, Single-Family Mortgage Program,
1992 Series C,
5.5%, 7-1-2013 ........................ 1,485 1,459,013
Total ................................. 9,778,338
PENNSYLVANIA - 1.30%
Pennsylvania Turnpike Commission,
Pennsylvania Turnpike Revenue Bonds,
Series N of 1991,
6.5%, 12-1-2013 ....................... 5,000 5,256,250
Washington County Hospital Authority
(Commonwealth of Pennsylvania), Hospital
Revenue Bonds, Series of 1993 (The
Washington Hospital Project),
5.5%, 7-1-2012 ........................ 5,000 4,818,750
Delaware County Authority, Hospital Revenue
Bonds, Series of 1992 (Riddle Memorial
Hospital),
6.5%, 1-1-2022 ........................ 2,800 2,845,500
Total ................................. 12,920,500
PUERTO RICO - 1.54%
Puerto Rico Public Buildings Authority,
Public Education and Health Facilities,
Refunding Bonds, Series M,
4.8%, 7-1-2016 ........................ 12,000 11,085,000
Puerto Rico Highway and Transportation
Authority, Highway Revenue Bonds
Series W,
4.09%, 7-1-2010 ....................... 4,250 4,250,000
Total ................................. 15,335,000
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
SOUTH CAROLINA - 0.50%
South Carolina State Education Assistance
Authority, Guaranteed Student Loan
Revenue and Refunding Bonds:
1993 Series,
5.55%, 9-1-2008 ....................... $ 3,000 $ 2,947,500
1995 Series, Series C Subordinate Lien
Refunding Bonds,
6.0%, 9-1-2008 ........................ 2,000 2,030,000
Total ................................. 4,977,500
TENNESSEE - 0.75%
Tennessee Housing Development Agency,
Homeownership Program Bonds, Issue T,
7.375%, 7-1-2023 ...................... 4,665 4,863,263
Volunteer State Student Funding Corporation,
Educational Loan Revenue Bonds,
Junior Subordinate Series 1993C Bonds,
5.85%, 12-1-2008 ...................... 2,700 2,632,500
Total ................................. 7,495,763
TEXAS - 8.14%
Alliance Airport Authority, Inc.,
Special Facilities Revenue Bonds:
Series 1990 (American Airlines, Inc.
Project),
7.5%, 12-1-2029 ....................... 15,000 15,956,250
Series 1991 (American Airlines, Inc.
Project),
7.0%, 12-1-2011 ....................... 13,100 14,328,125
Brazos River Authority (Texas),
Collateralized Pollution Control Revenue
Bonds (Texas Utilities Electric Company
Project), Series 1991A,
7.875%, 3-1-2021 ...................... 11,855 13,040,500
City of Austin, Texas, Combined Utility
Systems Revenue Refunding Bonds,
Series 1996 A,
5.125%, 5-15-2011 ..................... 7,330 6,908,525
Gulf Coast Waste Disposal Authority,
Multi-Modal Interchangeable Rate Revenue
Bonds (Champion International Corporation
Project), Series 1992A,
6.875%, 12-1-2028 ..................... 6,000 6,172,500
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
TEXAS (Continued)
Lubbock Health Facilities Development
Corporation, Hospital Revenue Bonds
(Methodist Hospital, Lubbock, Texas
Project),
6.75%, 12-1-2010 ...................... $ 5,000 $ 5,543,750
Texas Department of Housing and Community
Affairs, Single Family Mortgage Revenue
Bonds, 1996 Series B (Non-AMT) Teams
Structure, MBIA Insured,
6.0%, 3-1-2017 ........................ 5,000 5,012,500
Dallas-Fort Worth International Airport,
Facility Improvement Corporation, American
Airlines, Inc. Revenue Bonds, Series 1990,
7.5%, 11-1-2025 ....................... 4,700 5,011,375
Harris County Health Facilities Development
Corporation, Hospital Revenue Bonds
(Memorial Hospital System Project),
Series 1989,
6.5%, 6-1-2019 ........................ 4,500 4,713,750
Sabine River Authority of Texas,
Collateralized Pollution Control Revenue
Bonds (Texas Utilities Electric Company
Project), Series 1990,
8.25%, 10-1-2020 ...................... 4,000 4,440,000
Total ................................. 81,127,275
UTAH - 1.06%
Intermountain Power Agency, Power Supply
Revenue Refunding Bonds, 1997 Series B,
5.75%, 7-1-2016 ....................... 10,000 9,675,000
Utah Housing Finance Agency, Single Family
Mortgage Senior Bonds, 1993 Issue B
(Federally Insured or Guaranteed Mortgage
Loans),
5.7%, 7-1-2013 ........................ 945 928,463
Total ................................. 10,603,463
VIRGINIA - 0.56%
City of Richmond, Virginia, General Obligation
Public Improvement Refunding Bonds,
Series 1991B,
6.25%, 1-15-2018 ...................... 2,665 2,774,931
City of Chesapeake, Virginia, Water
and Sewer System Revenue Refunding
Bonds, Series of 1994,
5.1%, 5-1-2014 ........................ 2,000 1,840,000
See Notes to Schedule of Investments on page 25.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
VIRGINIA (Continued)
Southeastern Public Service Authority of
Virginia, Senior Revenue Refunding Bonds,
Series 1993A (Regional Solid Waste System),
5.125%, 7-1-2013....................... $ 1,000 $ 937,500
Total ................................. 5,552,431
WASHINGTON - 5.72%
Washington Public Power Supply System:
Nuclear Project No. 1, Refunding Revenue Bonds:
PARS Series 1993A,
5.75%, 7-1-2011 ....................... 15,000 14,887,500
Series 1989B,
7.125%, 7-1-2016 ...................... 8,200 9,337,750
Nuclear Project No. 3, Refunding Revenue Bonds,
Series 1989B,
7.125%, 7-1-2016 ...................... 20,750 23,629,063
State of Washington, Various Purpose General
Obligation Bonds, Series 1990A,
6.75%, 2-1-2015 ....................... 4,995 5,675,569
Public Utility District No. 1 of Douglas
County, Washington, Wells Hydroelectric
Revenue Bonds, Series of 1965,
3.7%, 9-1-2018 ........................ 4,200 3,533,250
Total ................................. 57,063,132
WEST VIRGINIA - 0.22%
Mason County, West Virginia, Pollution
Control Revenue Bonds (Appalachian Power
Company Project), Series G,
7.4%, 1-1-2014 ........................ 2,000 2,162,500
TOTAL MUNICIPAL BONDS - 95.17% $948,827,782
(Cost: $914,583,767)
TOTAL SHORT-TERM SECURITIES - 4.66% $ 46,410,335
(Cost: $46,410,335)
TOTAL INVESTMENT SECURITIES - 99.83% $995,238,117
(Cost: $960,994,102)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.17% 1,700,545
NET ASSETS - 100.00% $996,938,662
See Notes to Schedule of Investments on page 25.
<PAGE>
UNITED MUNICIPAL BOND FUND, INC.
SEPTEMBER 30, 1996
Notes to Schedule of Investments
(A) Coupon resets semi-annually to 12% - ((SAVRS rate + 28 basis
points)*365/360). Minimum coupon rate is 0%.
(B) Coupon resets weekly to 11.95% - Kenny S&P Index. Minimum coupon rate is
0%. On February 15, 1999, rate becomes fixed at 6.65%.
(C) Coupon resets weekly to 10.62% - Kenny S&P Index. Minimum coupon rate is
0%. On April 1, 1998, rate becomes fixed at 6.25%.
(D) Coupon resets weekly to 11.37% - PSA Municipal Swap Index. Minimum coupon
rate is 0%. On November 15, 2000, rate becomes fixed at 6.15%.
(E) Coupon resets weekly to 11.95% - Kenny S&P Index. Minimum coupon rate is
0%. On April 1, 1999, rate becomes fixed at 6.70%.
(F) Coupon resets weekly to 10.90% - Bankers Trust Company TENR Index. Minimum
coupon rate is 0%. On August 15, 1997, rate becomes fixed at 6.25%.
(G) Coupon resets every 35 days based on an auction rate. Minimum coupon rate
is 0%. Bond may be linked at the option of the holder at which time the
rate is fixed at 5.50%.
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 MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
Assets
Investment securities--at value
(Notes 1 and 3) ............................... $ 995,238,117
Cash ........................................... 71,739
Receivables:
Investment securities sold .................... 17,298,190
Interest ...................................... 16,174,952
Fund shares sold .............................. 753,022
Prepaid insurance premium ...................... 30,640
--------------
Total assets ................................ 1,029,566,660
--------------
Liabilities
Payable for investment securities purchased .... 29,500,716
Payable for Fund shares redeemed ............... 2,709,600
Accrued service fee ............................ 264,300
Accrued transfer agency and dividend disbursing 56,050
Accrued accounting services fee ................ 7,083
Other .......................................... 90,249
--------------
Total liabilities ........................... 32,627,998
--------------
Total net assets ........................... $ 996,938,662
==============
Net Assets
$1.00 par value capital stock, authorized --
600,000,000; shares outstanding --136,116,397
Capital stock ................................. $ 136,116,397
Additional paid-in capital .................... 809,535,199
Accumulated undistributed income:
Accumulated undistributed net investment
income ...................................... 804,983
Accumulated undistributed net realized gain on
investment transactions ..................... 16,238,068
Net unrealized appreciation in value of
investments at end of period ................ 34,244,015
--------------
Net assets applicable to outstanding units
of capital ................................. $ 996,938,662
==============
Net asset value per share (net assets divided by
shares outstanding) ............................ $7.32
=====
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended SEPTEMBER 30, 1996
Investment Income
Interest ......................................... $58,637,123
-----------
Expenses (Note 2):
Investment management fee ....................... 4,344,734
Service fee ..................................... 1,279,529
Transfer agency and dividend disbursing ......... 693,674
Accounting services fee ......................... 90,000
Custodian fees .................................. 50,880
Audit fees ...................................... 36,648
Legal fees ...................................... 24,021
Other ........................................... 254,196
-----------
Total expenses ................................ 6,773,682
-----------
Net investment income ........................ 51,863,441
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on securities .................. 27,157,997
Realized net gain on futures contracts closed .... 492,688
Realized net gain on put options purchased ....... 635,082
-----------
Net realized gain on investments ................ 28,285,767
Net unrealized depreciation in value of
investments during the period ................... (10,296,280)
-----------
Net gain on investments ....................... 17,989,487
-----------
Net increase in net assets resulting
from operations ............................ $69,852,928
===========
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year
ended September 30,
-----------------------------
1996 1995
-------------- ------------
Increase in Net Assets
Operations:
Net investment income.............. $51,863,441 $ 52,049,896
Realized net gain (loss) on
investments ..................... 28,285,767 (4,681,498)
Unrealized appreciation
(depreciation) .................. (10,296,280) 55,263,393
------------ -------------
Net increase in net assets
resulting from operations ...... 69,852,928 102,631,791
------------ -------------
Dividends to shareholders:*
From net investment income ........ (52,041,101) (52,122,952)
From realized gains on securities
transactions .................... (6,890,412) ---
In excess of realized gains on securities
transactions .................... --- (5,125,035)
------------ -------------
(58,931,513) (57,247,987)
------------ -------------
Capital share transactions:
Proceeds from sale of shares
(69,215,523 and 16,748,709
shares, respectively) ........... 507,068,546 118,813,088
Proceeds from reinvestment of
dividends and/or capital gains
distribution (6,577,962 and
6,061,556 shares, respectively) . 48,186,696 42,256,392
Payments for shares redeemed
(74,246,333 and 25,912,586
shares, respectively) ........... (544,346,793) (182,296,814)
------------ -------------
Net increase (decrease) in net
assets resulting from capital
share transactions ............. 10,908,449 (21,227,334)
------------ -------------
Total increase ................. 21,829,864 24,156,470
Net Assets
Beginning of period ................ 975,108,798 950,952,328
------------ -------------
End of period, including
undistributed net investment
income of $804,983 and
$982,643, respectively ............ $996,938,662 $975,108,798
============ =============
*See "Financial Highlights" on page 29.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended
September 30,
------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
Net asset value,
beginning of period $7.25 $6.91 $7.83 $7.40 $7.18
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income........... .39 .39 .38 .41 .43
Net realized and
unrealized gain
(loss) on
investments...... .12 .38 (0.67) .65 .35
----- ----- ----- ----- -----
Total from investment
operations ........ .51 .77 (0.29) 1.06 .78
----- ----- ----- ----- -----
Less distributions:
Dividends from net
investment
income........... (0.39) (0.39) (0.38) (0.40) (0.43)
Distribution from
capital gains.... (0.05) (0.00) (0.25) (0.23) (0.13)
Distribution in excess
of capital gains. (0.00) (0.04) (0.00) (0.00) (0.00)
----- ----- ----- ----- -----
Total distributions. (0.44) (0.43) (0.63) (0.63) (0.56)
----- ----- ----- ----- -----
Net asset value,
end of period ..... $7.32 $7.25 $6.91 $7.83 $7.40
===== ===== ===== ===== =====
Total return*....... 7.16% 11.51% -3.91% 15.15% 11.41%
Net assets, end of
period (000
omitted) ......... $996,939$975,109$950,952$1,055,434$890,004
Ratio of expenses to
average net assets 0.68% 0.65% 0.64% 0.56% 0.57%
Ratio of net investment
income to average
net assets ........ 5.23% 5.51% 5.17% 5.38% 5.92%
Portfolio
turnover rate ..... 74.97% 70.67% 62.61% 94.51% 125.44%
*Total return calculated without taking into account the sales load
deducted on an initial purchase.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NOTE 1 -- Significant Accounting Policies
United Municipal Bond Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. Its investment objective is to provide income not subject to Federal
income taxation. 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 -- Municipal bonds and the taxable obligations in the
Fund's investment portfolio are not listed or traded on any securities
exchange. Therefore, municipal bonds are valued using a pricing system
provided by a pricing service or dealer in bonds. Short-term debt
securities, whether taxable or nontaxable, 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 by the Internal
Revenue Code) and premiums on the purchase of bonds are amortized for both
financial and tax reporting purposes over the remaining lives of the bonds.
Interest income is recorded on the accrual basis. See Note 3 -- Investment
Security Transactions.
C. Federal income taxes -- The Fund intends to distribute all of its net
investment income and capital gains to its shareholders and otherwise
qualify as a regulated investment company under the Internal Revenue Code.
The Fund intends to pay distributions as required to avoid imposition of
excise tax. Accordingly, provision has not been made for Federal income
taxes. In addition, the Fund intends to meet requirements of the Internal
Revenue Code which will permit it to pay dividends from net investment
income, substantially all of which will be exempt from Federal income tax.
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, net
operating losses and expiring capital loss carryforwards.
E. Futures -- See Note 5 -- Futures.
F. Options -- See Note 6 -- Options.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
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 .03% 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 $14.7 billion of
combined net assets at September 30, 1996) 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 $1.3125 for each shareholder account which
was in existence at any time during the prior month ($1.0208 per account prior
to April 1, 1996), 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
$1,203,218, out of which W&R paid sales commissions of $679,518 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 $38,644.
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 Security Transactions
Purchases of investment securities, other than U.S. Government and short-
term securities, aggregated $731,444,908 while proceeds from maturities and
sales aggregated $768,866,286. Purchases of short-term securities aggregated
$1,099,803,029 while proceeds from maturities and sales aggregated
$1,062,507,910. No U.S. Government securities were bought or sold during the
period ended September 30, 1996.
For Federal income tax purposes, cost of investments owned at September 30,
1996 was $965,397,491, resulting in net unrealized appreciation of $29,840,626,
of which $32,769,927 related to appreciated securities and $2,929,301 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $20,584,544 during its fiscal year ended September 30, 1996, which included
losses of $6,444,652 deferred from the year ended September 30, 1995 (see
discussion below). A portion of the realized capital gain was paid to
shareholders during the period ended September 30, 1996. Remaining net capital
gains will be distributed to the Fund's shareholders.
Internal Revenue Code regulations permit the Fund to defer into its next
fiscal year net capital losses incurred between each November 1 and the end of
its next fiscal year ("post-October losses"). From November 1, 1994 through
September 30, 1995, the Fund incurred net long-term capital losses of
$6,444,652, which have been deferred to the fiscal year ended September 30,
1996.
NOTE 5 -- Futures
The Fund may engage in buying and selling interest rate futures contracts,
but only Debt Futures and Municipal Bond Index Futures. Upon entering into a
futures contract, the Fund is required to deposit, in a segregated account, an
amount of cash or U.S. Treasury Bills equal to a varying specified percentage of
the contract amount. This amount is known as the initial margin. Subsequent
payments ("variation margins") are made or received by the Fund each day,
dependent on the daily fluctuations in the value of the underlying debt security
or index. These changes in the variation margins are recorded by the Fund as
unrealized gains or losses. Upon the closing of the contracts, the cumulative
net change in the variation margin is recorded as realized gain or loss. The
Fund uses futures to attempt to reduce the overall risk of its investments.
NOTE 6 -- Options
Options purchased by the Fund are accounted for in the same manner as
marketable portfolio securities. The cost of portfolio securities acquired
through the exercise of call options is increased by the premium paid to
purchase the call. The proceeds from securities sold through the exercise of
put options are decreased by the premium paid to purchase the put. The Fund
uses options to attempt to reduce the overall risk of its investments.
NOTE 7 -- Multiclass Operations
On January 21, 1996, the Fund was authorized to offer investors a choice of
two classes of shares, Class A and Class Y, each of which has equal rights as to
assets and voting privileges. Class A shares represent existing shareholders;
Class Y shares are offered through a separate Prospectus to certain
institutional investors. Class Y shares are not subject to a sales charge on
purchases; they are not subject to a Rule 12b-1 Service Plan and have a separate
transfer agency and dividend disbursement services fee structure. As of
September 30, 1996, the Fund had not commenced multiclass operations.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Municipal Bond Fund, 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 Municipal Bond Fund, Inc.
(the "Fund") at September 30, 1996, the results of its operations for the year
then ended and the changes in its net assets and the financial highlights for
each of 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 September 30, 1996 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
November 8, 1996
<PAGE>
INCOME TAX INFORMATION
The amounts of the dividends and long-term capital gains shown in the table
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.
Exempt Interest Dividends - The per-share amounts shown as Exempt Interest
represent the distribution of state and municipal bond interest and are exempt
from Federal income tax.
PER-SHARE AMOUNTS REPORTABLE AS:
-------------------------------------------------------------
For Individuals For Corporations
------------------------------- -----------------------------
Record Ordinary ExemptLong-Term Non- ExemptLong-Term
Date Total Income InterestCapital GainQualifyingInterestCapital Gain
- -------------------------------------------------------------------------
10-13-95$0.032$0.0010 $0.0310 $--- $0.0010$0.0310 $---
11-17-95 .032 .0010 .0310 --- .0010 .0310 ---
12-15-95 .086 .0531 .0329 --- .0531 .0329 ---
01-12-96 .032 .0013 .0307 --- .0013 .0307 ---
02-16-96 .032 .0013 .0307 --- .0013 .0307 ---
03-15-96 .032 .0013 .0307 --- .0013 .0307 ---
04-12-96 .032 .0013 .0307 --- .0013 .0307 ---
05-17-96 .032 .0013 .0307 --- .0013 .0307 ---
06-14-96 .032 .0013 .0307 --- .0013 .0307 ---
07-12-96 .032 .0013 .0307 --- .0013 .0307 ---
08-16-96 .032 .0013 .0307 --- .0013 .0307 ---
09-13-96 .032 .0013 .0307 --- .0013 .0307 ---
----------------------- ----- ---------------- -----
Total $0.438$0.0668 $0.3712 $--- $0.0668$0.3712 $---
======================= ===== ================ =====
NON-QUALIFYING DIVIDENDS -- The non-qualifying portion of distributions
represents the taxable portion of dividends paid and does not qualify for the
dividends received deduction for corporations.
The tax status of dividends paid will be reported to you on Form 1099-DIV after
the close of the applicable calendar year.
Income from the Fund may be subject to the alternative minimum tax.
Shareholders are advised to consult with their tax adviser 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
William T. Morgan, Coronado, California
Doyle Patterson, Kansas City, Missouri
William L. Rogers, Los Angeles, California
Frank J. Ross, Jr., 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
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
This report is submitted for the general information of the shareholders of
United Municipal Bond Fund, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United Municipal Bond Fund, Inc. current prospectus.
<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
Our INTERNET address is:
http://www.waddell.com
NUR1008A(9-96)
printed on recycled paper
