United
High Income
Fund, Inc.
ANNUAL
REPORT
----------------------------------------
For the fiscal year ended March 31, 1995
<PAGE>
This report is submitted for the general information of the shareholders of
United High Income Fund, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United High Income Fund, Inc. current prospectus.
<PAGE>
PRESIDENT'S LETTER
- -----------------------------------------------------------------
MARCH 31, 1995
Dear Shareholder:
As President of your Fund, I would like to take this opportunity to share
my thoughts on a subject that I believe is very important to all of us; the need
for tax incentives that will help Americans take personal responsibility for
their futures.
Voters all across America sent two clear messages in the elections held in
November 1994. They want their taxes reduced and they want their concern for
financial security addressed without adding new bureaucracies or government
programs. One of the methods to do this is to expand the availability of tax
incentives for individuals to invest in Individual Retirement Accounts. This
could be done in several ways such as:
restoring the universal availability of fully tax-deductible Individual
Retirement Accounts,
allowing non-working spouses to make a full contribution of $2,000 to an
Individual Retirement Account instead of only $250 as currently allowed,
eliminating the taxation on the distribution of earnings from Individual
Retirement Accounts.
All of us recognize that future generations will need to supplement social
security benefits by private savings in order to provide an adequate level of
retirement income. Expanding the benefits of IRA's provides tax incentives to
encourage savings which allows all individuals the opportunity to provide
financial security for themselves and their families. Encouraging savings
through tax incentives has additional indirect benefits. Americans' personal
savings rate has fallen from 8% in the 1960's to just 2% of disposable income
today. Expanding the benefits of IRA's will help reverse this trend, will
increase the amount of U.S. capital available for investment and should make the
U.S. less dependent on capital from foreign sources.
Changes to our current IRA laws, such as the ones I mentioned above, are
being discussed in Congress. I urge you to write to your Members of Congress
and to the President to tell them that you support expanded IRA legislation that
provides incentives and opportunities for all Americans to improve their
financial well being.
Finally, I appreciate your continued confidence in our products and
services.
Respectfully,
Keith A. Tucker
President
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
MARCH 31, 1995
Dear Shareholder:
This report relates to the operation of United High Income Fund for the
fiscal year ended March 31, 1995. The following discussion, graphs and tables
provide you with information regarding the Fund's performance during that
period.
During the past fiscal year the Federal Reserve Bank raised interest rates
several times with the intent of slowing the economy to alleviate perceived
inflationary pressures. These rate increases led to weak performance in the
high-yield bond market throughout much of the fiscal year. High-yield bonds
recovered some in the last quarter of the fiscal year as the likelihood of any
further Fed-induced rate increases diminished given signs that the Fed's efforts
to slow economic growth were bearing fruit. The market's anticipation of weak
financial results for many economically sensitive companies limited the overall
upturn, however.
In view of the prevailing situation, the Fund held a significant portion of
its assets in cash and invested primarily in high-yield bonds of relatively
higher quality. When there is a slowing in the rate of economic growth, the
demand for bonds of relatively higher quality usually increases, typically
causing them to perform better than lower-rated bonds.
The strategies and techniques we applied resulted in the direction of the
Fund's performance remaining fairly consistent with that of the indexes charted
on the following page. Those indexes reflect the performance of securities that
generally represent the high-yield bond market (the First Boston High Yield
Index) and the universe of funds with similar investment objectives (the Lipper
High Current Yield Fund Universe Average). The Fund's performance was somewhat
less than the performance of the First Boston High Yield Index because that
index was weighted more heavily in industries such as health care and chemicals
that experienced rallies in the latter half of the fiscal year.
We anticipate that the rate of economic growth will continue to slow in the
year ahead. We will seek to invest the Fund's cash at opportune times, although
we will do so cautiously, attempting to limit the Fund's risk while still
emphasizing high income. Our strategy is to search for relatively higher-
quality bonds that are trading at discounts, thereby producing high yields
relative to their credit risk, as well as newly issued bonds offering the
attractive yields that are now available.
Thank you very much for your continued support and confidence in our
organization.
Respectfully,
Louise D. Rieke
Manager, United High Income Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED HIGH INCOME FUND, INC.,
THE FIRST BOSTON HIGH YIELD INDEX,
AND THE LIPPER HIGH CURRENT YIELD FUND UNIVERSE AVERAGE
Average Annual Total Return*
1 year 5 years 10 years
- -2.53% 10.42% 7.81%
SOME OF THESE NUMBERS MAY NOT BE RIGHT!!!!
Lipper
High
First Current
United Boston Yield
High High Fund
Income Yield Universe
Fund Index Average
------------------ ----------
03/31/85 Purchase 9,425 10,000 10,000
03/31/86 11,750 12,838 12,351
03/31/87 13,540 14,472 13,864
03/31/88 13,255 15,358 14,066
03/31/89 14,435 16,804 15,274
03/31/90 12,187 16,153 14,274
03/31/91 12,499 18,397 15,107
03/31/92 16,463 24,142 19,443
03/31/93 18,887 27,848 22,480
03/31/94 20,530 30,629 24,847
03/31/95 21,232 32,100 25,254
- ---------- Lipper High Current Yield Fund Universe Average -- $25,254
+++++ First Boston High Yield Index - $32,100
===== United High Income Fund** -- $21,232
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.
<PAGE>
SHAREHOLDER SUMMARY
- --------------------------------------------------------------
UNITED HIGH INCOME FUND, INC.
PORTFOLIO STRATEGY:
Invests generally in OBJECTIVE: High level of current
High-Risk, High-Yield income, by investing
Fixed Income Securities primarily in a
diversified portfolio of
Maximum 20% Common Stock high-yield, high-risk fixed income
securities, with a secondary objective
of capital growth when consistent with
the primary objective.
STRATEGY: Invests generally in debt securities in
lower rating categories as classified by
recognized rating agencies; may also
invest up to 20% in common stocks. (May
purchase securities subject to
repurchase agreements. May invest in
certain options and futures.)
FOUNDED: 1979
SCHEDULED DIVIDEND FREQUENCY: MONTHLY
<PAGE>
PER SHARE DATA
For the Fiscal Year Ended March 31, 1995
- ----------------------------------------
DIVIDENDS PAID $0.79
=====
NET ASSET VALUE ON
3/31/95 $8.70
3/31/94 9.20
-----
CHANGE PER SHARE ($0.50)
=====
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 3-31-95 -2.53% 3.41%
5-year period ended 3-31-95 10.42% 11.74%
10-year period ended 3-31-95 7.81% 8.46%
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 March 31, 1995, United High Income Fund, Inc. had net assets totaling
$933,575,936 invested in a diversified portfolio of:
84.66% Corporate Debt Securities
10.59% Cash and Cash Equivalents
3.15% Common and Preferred Stocks and Warrants
1.60% United States Government Security
As a shareholder of United High Income Fund, Inc., for every $100 you had
invested on March 31, 1995, your Fund owned:
$51.60 Consumer Bonds
24.15 Basic Industry Bonds
10.59 Cash and Cash Equivalents
4.68 Technological Bonds
3.15 Common and Preferred Stocks and Warrants
2.74 Energy and Energy-Related Bonds
1.60 U.S. Government Security
1.28 Financial Bonds
0.21 Public Utilities Bond
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Shares Value
COMMON AND PREFERRED STOCKS AND WARRANTS
Automotive - 0.49%
Lear Seating Corporation* ............ 257,400 $ 4,633,200
Building - 0.93%
NVR L.P., Warrants* .................. 68,571 51,428
Triangle Pacific Corp.* .............. 660,844 8,631,944
Total ............................... 8,683,372
Hospital Management - 0.25%
LTC Properties, Inc. ................. 100,000 1,325,000
National Health Investors,
Preferred, Convertible .............. 46,000 1,040,750
Total ............................... 2,365,750
Leisure Time - 0.35%
Fitzgeralds Gaming Corporation,
Warrants (A)* ....................... 3,500 157,500
FLAGSTAR COMPANIES, INC.* ............ 51,600 286,999
Infinity Broadcasting Corporation,
Class A* ............................ 67,500 2,801,250
Servam Corporation* .................. 373,508 3,735
Servam Corporation, Preferred,
Convertible* ........................ 100,000 1,000
Total ............................... 3,250,484
Publishing and Advertising - 0.26%
Advanstar Holdings, Inc. (B)* ........ 75,625 2,420,000
Advanstar Holdings, Inc.,
Warrants (A)* ....................... 1,750 1,750
Total ............................... 2,421,750
Retailing - 0.72%
Federated Department Stores, Inc.* ... 112,441 2,487,757
Federated Department Stores, Inc.,
Warrants, Class C* .................. 74,896 411,928
Federated Department Stores, Inc.,
Warrants, Class D* .................. 74,896 421,290
WestPoint Stevens Inc.* .............. 226,901 3,389,220
Total ............................... 6,710,195
Miscellaneous - 0.15%
Consolidated Hydro, Inc., Preferred* . 3,000 1,350,000
Consolidated Hydro, Inc., Warrants (A)* 5,400 32,400
EUA Power Corporation* ............... 9,500 10
WestFed Holdings, Inc., Preferred,
Series A* ........................... 185,310 185
WestFed Holdings, Inc., Series B* .... 54,900 55
Total ............................... 1,382,650
TOTAL COMMON AND PREFERRED STOCKS
AND WARRANTS - 3.15% $ 29,447,401
(Cost: $64,891,482)
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES
Airlines - 1.76%
GP Group, Inc.,
8.75%, 12-15-98 ..................... $ 9,500 $ 7,528,750
NWA, Inc.,
8.625%, 8-1-96 ...................... 9,000 8,910,000
Total ............................... 16,438,750
Automotive - 3.95%
Auburn Hills Trust,
12.375%, 5-1-2020.................... 14,100 19,541,049
Chrysler Corporation,
10.95%, 8-1-2017 .................... 6,000 6,677,520
Doehler-Jarvis Limited Partnership,
11.875%, 6-1-2002 ................... 2,500 2,525,000
Lear Seating Corp.,
8.25%, 2-1-2002 ..................... 8,000 7,280,000
Venture Holdings Trust,
9.75%, 4-1-2004 ..................... 1,000 870,000
Total ............................... 36,893,569
Beverages - 1.06%
Dr Pepper Holdings, Inc.,
0.0%, 2-15-2003 (C) ................. 3,500 2,537,500
ROYAL CROWN CORPORATION,
9.75%, 8-1-2000 ..................... 8,000 7,360,000
Total ............................... 9,897,500
Biotechnology and Medical Services - 0.22%
Abbey Healthcare Group Incorporated,
9.5%, 11-1-2002 ..................... 2,000 2,045,000
Building - 7.85%
American Standard Inc.:
9.875%, 6-1-2001 .................... 4,500 4,488,750
11.375%, 5-15-2004 .................. 2,000 2,170,000
0.0%, 6-1-2005 (C) .................. 10,250 6,970,000
9.25%, 12-1-2016 .................... 6,000 5,700,000
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Building (Continued)
Beazer Homes USA, Inc.,
9.0%, 3-1-2004 ...................... $ 4,000 $ 3,380,000
Del Webb Corporation:
9.75%, 3-1-2003 ..................... 5,500 4,950,000
9.0%, 2-15-2006 ..................... 2,000 1,630,000
Eagle Industries, Inc.,
0.0%, 7-15-2003 (C) ................. 11,000 7,150,000
Hillsborough Holdings Corporation,
17.0%, 1-1-96 (D) ................... 19,050 12,167,807
Mark IV Industries, Inc.,
8.75%, 4-1-2003 ..................... 11,000 10,670,000
NVR L.P.,
11.0%, 4-15-2003 .................... 3,500 3,027,500
Nortek, Inc.,
9.875%, 3-1-2004 .................... 5,000 4,587,500
Triangle Pacific Corp.,
10.5%, 8-1-2003 ..................... 6,500 6,435,000
Total ............................... 73,326,557
Chemicals Major - 1.27%
UCC Investors Holding, Inc.:
10.5%, 5-1-2002 ..................... 9,000 9,045,000
0.0%, 5-1-2005 (C) .................. 4,000 2,820,000
Total ............................... 11,865,000
Chemicals Specialty and Miscellaneous
Technology - 0.95%
Envirotest Systems Corp.,
9.125%, 3-15-2001 ................... 3,000 2,400,000
LaRoche Industries Inc.,
13.0%, 8-15-2004 .................... 6,500 6,435,000
Total ............................... 8,835,000
Computers and Office Equipment - 0.74%
Corporate Express, Inc.,
9.125%, 3-15-2004 ................... 4,000 3,780,000
Mail-Well Corporation,
10.5%, 2-15-2004 .................... 3,500 3,132,500
Total ............................... 6,912,500
Consumer Electronics and Appliances - 0.48%
Sealy Corporation,
9.5%, 5-1-2003 ...................... 4,500 4,522,500
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Domestic Oil - 1.03%
Clark R & M Holdings, Inc.,
0.0%, 2-15-2000 ..................... $16,800 $ 9,576,000
Drugs and Hospital Supply - 1.07%
General Medical Corporation:
10.875%, 8-15-2003 .................. 7,000 6,912,500
12.125%, 8-15-2005 .................. 3,181 3,101,244
Total ............................... 10,013,744
Electronics - 0.42%
Essex Group, Inc.,
10.0%, 5-1-2003 ..................... 4,000 3,880,000
Food and Related - 2.11%
General Nutrition, Incorporated,
11.375%, 3-1-2000 ................... 5,370 5,887,131
Pilgrim's Pride Corporation,
10.875%, 8-1-2003 ................... 3,500 3,185,000
Specialty Foods Corporation:
10.25%, 8-15-2001 ................... 4,000 3,900,000
11.25%, 8-15-2003 ................... 7,000 6,755,000
Total ............................... 19,727,131
Hospital Management - 6.56%
Hillhaven Corporation (The),
10.125%, 9-1-2001 ................... 8,500 8,733,750
LTC Properties, Inc.,
8.5%, 1-1-2000 ...................... 3,000 3,000,000
Multicare Companies, Inc. (The),
12.5%, 7-1-2002 ..................... 5,398 6,099,740
National Medical Enterprises, Inc.:
9.625%, 9-1-2002 .................... 14,000 14,315,000
10.125%, 3-1-2005 ................... 6,000 6,157,500
Pathmark Stores, Inc.:
9.625%, 5-1-2003 .................... 9,000 8,403,750
0.0%, 11-1-2003 (C) ................. 6,000 3,210,000
Quorum Health Group, Inc.,
11.875%, 12-15-2002 ................. 7,000 7,560,000
Surgical Health Corporation,
11.5%, 7-15-2004 .................... 3,500 3,780,000
Total ............................... 61,259,740
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Household Products - 3.02%
Exide Corporation:
10.75%, 12-15-2002 .................. $ 4,750 $ 4,773,750
0.0%, 12-15-2004 (C) ................ 4,000 2,860,000
MacAndrews & Forbes Group, Incorporated:
12.25%, 7-1-96 ...................... 10,750 10,750,000
13.0%, 3-1-99 ....................... 9,750 9,798,750
Total................................ 28,182,500
Insurance - 1.28%
American Annuity Group, Inc.:
9.5%, 8-15-2001 ..................... 5,500 5,376,250
11.125%, 2-1-2003 ................... 6,500 6,613,750
Total ............................... 11,990,000
Leisure Time - 18.09%
Act III Broadcasting, Inc.,
9.625%, 12-15-2003 .................. 3,000 2,895,000
Cablevision Industries Corporation:
10.75%, 1-30-2002 ................... 5,500 5,775,000
9.25%, 4-1-2008 ..................... 5,000 4,925,000
California Hotel Finance Corporation,
11.0%, 12-1-2002 .................... 10,000 9,800,000
Century Communications Corporation,
11.875%, 10-15-2003 ................. 6,500 6,808,750
Claridge Hotel and Casino Corporation (The),
11.75%, 2-1-2002 .................... 5,000 3,650,000
COMCAST CELLULAR CORPORATION,
0.0%, 3-5-2000 ...................... 9,300 6,696,000
COMCAST CORPORATION,
9.5%, 1-15-2008 ..................... 8,000 7,540,000
Continental Cablevision, Inc.:
10.625%, 6-15-2002 .................. 2,500 2,562,500
8.875%, 9-15-2005 ................... 8,500 8,075,000
11.0%, 6-1-2007 ..................... 3,800 4,028,000
Embassy Suites, Inc.,
10.875%, 4-15-2002 .................. 2,000 2,140,000
Family Restaurants, Inc.,
0.00%, 2-1-2004 (C) ................. 3,500 1,365,000
Fitzgeralds Gaming Corporation,
13.0%, 3-15-96 (A) .................. 3,500 1,855,000
FLAGSTAR COMPANIES, INC.:
10.75%, 9-15-2001 ................... 16,500 15,840,000
10.875%, 12-1-2002 .................. 4,500 4,286,250
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Leisure Time (Continued)
Infinity Broadcasting Corporation,
10.375%, 3-15-2002 .................. $16,000 $ 16,560,000
LaQuinta Motor Inns, Inc.,
9.25%, 5-15-2003 .................... 7,500 7,200,000
MGM Grand Hotel Finance Corp.,
12.0%, 5-1-2002 ..................... 7,000 7,717,500
NewCity Communications, Inc.,
11.375%, 11-1-2003 .................. 2,000 1,860,000
Plitt Theatres, Inc.,
10.875%, 6-15-2004 .................. 4,000 3,950,000
Rogers Cablesystems Limited,
9.625%, 8-1-2002 .................... 4,000 3,920,000
Rogers Communications Incorporated,
10.875%, 4-15-2004 .................. 4,500 4,522,500
Showboat, Inc.,
9.25%, 5-1-2008 ..................... 9,000 7,852,500
Sinclair Broadcast Group, Inc.,
10.0%, 12-15-2003 ................... 1,875 1,800,000
Turner Broadcasting System, Inc.,
8.375%, 7-1-2013 .................... 10,000 8,473,000
Viacom International, Inc.:
10.25%, 9-15-2001 ................... 3,000 3,165,000
8.0%, 7-7-2006 ...................... 15,000 13,575,000
Total ............................... 168,837,000
Machinery - 0.41%
Fairfield Manufacturing Company, Inc.,
11.375%, 7-1-2001 ................... 4,000 3,780,000
Metals and Mining - 0.61%
Magma Copper Company,
12.0%, 12-15-2001 ................... 2,850 3,078,000
Ucar Global Enterprises Inc.,
12.0%, 1-15-2005 (A) ................ 2,500 2,625,000
Total ............................... 5,703,000
Multi-Industry - 1.59%
Federal Industries Ltd.,
10.25%, 6-15-2000 ................... 5,500 5,197,500
Jordan Industries, Inc.,
10.375%, 8-1-2003 ................... 10,500 9,686,250
Total ............................... 14,883,750
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Oil Services - 1.71%
Falcon Drilling, Inc.,
9.75%, 1-15-2001 .................... $ 3,500 $ 3,307,500
Noble Drilling Corporation,
9.25%, 10-1-2003 .................... 4,000 3,900,000
PETROLEUM HEAT AND POWER CO., INC.,
9.375%, 2-1-2006 .................... 3,000 2,595,000
Wainoco Oil Corporation,
12.0%, 8-1-2002 ..................... 6,000 6,180,000
Total ............................... 15,982,500
Packaging and Containers - 6.42%
Anchor Glass Container Corporation,
9.875%, 12-15-2008 .................. 5,000 4,312,500
Container Corporation of America,
11.25%, 5-1-2004 .................... 3,500 3,666,250
Gaylord Container Corporation:
11.5%, 5-15-2001 .................... 8,000 8,400,000
0.0%, 5-15-2005 (C) ................. 6,000 5,700,000
Owens-Illinois, Inc.:
10.25%, 4-1-99 ...................... 5,000 5,050,000
10.0%, 8-1-2002 ..................... 5,000 4,975,000
11.0%, 12-1-2003 .................... 7,500 8,006,250
9.75%, 8-15-2004 .................... 7,500 7,275,000
Silgan Corporation,
0.0%, 12-15-2002 (C) ................ 9,500 8,455,000
Sweetheart Cup Company, Inc.,
10.5%, 9-1-2003 ..................... 4,250 4,058,750
Total ............................... 59,898,750
Paper - 3.86%
Fort Howard Corporation:
9.25%, 3-15-2001 .................... 8,000 7,720,000
14.125%, 11-1-2004 .................. 11,250 11,250,000
9.0%, 2-1-2006 ...................... 2,000 1,750,000
S. D. Warren Company,
12.0%, 12-15-2004 (A) ............... 3,000 3,165,000
Stone Container Corporation:
10.75%, 10-1-2002 ................... 6,000 6,180,000
11.5%, 10-1-2004 .................... 2,000 2,100,000
Williamhouse-Regency of Delaware, Inc.,
11.5%, 6-15-2005 .................... 4,000 3,860,000
Total ............................... 36,025,000
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Public Utilities - Electric - 0.21%
Consolidated Hydro, Inc.,
0.0%, 7-15-2003 (C) ................. $ 3,000 $ 1,994,880
Publishing and Advertising - 2.03%
American Media Operations, Inc.,
11.625%, 11-15-2004 ................. 4,000 4,220,000
Big Flower Press, Inc.,
10.75%, 8-1-2003 .................... 6,500 6,272,500
Lamar Advertising Company,
11.0%, 5-15-2003 .................... 2,000 1,950,000
Outdoor Systems, Inc.,
10.75%, 8-15-2003 ................... 7,000 6,510,000
Total ............................... 18,952,500
Railroads - 1.25%
Harmon Industries, Inc.,
12.0%, 8-1-2002 ..................... 3,500 3,710,000
Southern Pacific Rail Corporation,
9.375%, 8-15-2005 ................... 7,950 7,989,750
Total ............................... 11,699,750
Retailing - 9.68%
Barnes & Noble, Inc.,
11.875%, 1-15-2003 .................. 6,000 6,420,000
Big V Supermarkets, Inc.,
11.0%, 2-15-2004 .................... 5,000 4,125,000
COLOR TILE, INC.,
10.75%, 12-15-2001 .................. 6,500 5,200,000
Eckerd Corporation,
9.25%, 2-15-2004 .................... 5,500 5,527,500
Kroger Co. (The):
9.75%, 2-15-2004 .................... 10,000 10,450,000
9.25%, 1-1-2005 ..................... 3,000 3,112,500
Musicland Stores Corporation,
9.0%, 6-15-2003 ..................... 4,000 3,360,000
Orchard Supply Hardware Stores Corporation,
9.375%, 2-15-2002 ................... 4,000 3,140,000
P & C Food Markets, Inc.,
11.5%, 10-15-2001 ................... 5,000 5,262,500
Penn Traffic Company:
8.625%, 12-15-2003 .................. 7,000 6,387,500
10.375%, 10-1-2004 .................. 8,500 8,585,000
9.625%, 4-15-2005 ................... 7,000 6,466,250
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
CORPORATE DEBT SECURITIES (Continued)
Retailing (Continued)
Safeway Inc.,
10.0%, 12-1-2001 .................... $ 8,000 $ 8,560,000
Specialty Retailers, Inc.,
11.0%, 8-15-2003 .................... 5,000 4,600,000
WestPoint Stevens Inc.,
9.375%, 12-15-2005 .................. 10,000 9,150,000
Total ............................... 90,346,250
Services, Consumer and Business - 1.07%
Bell & Howell Company,
10.75%, 10-1-2002 ................... 5,000 5,100,000
Solon Automated Services, Inc.,
12.75%, 7-15-2001 ................... 5,000 4,912,500
Total ............................... 10,012,500
Shipping - 0.36%
Trans Ocean Container Corporation,
12.25%, 7-1-2004 .................... 3,500 3,360,000
Steel - 1.24%
AK Steel Corporation,
10.75%, 4-1-2004 .................... 5,000 5,043,750
Inland Steel Industries, Inc.,
12.75%, 12-15-2002 .................. 6,000 6,510,000
Total ............................... 11,553,750
Telecommunications - 1.28%
MFS Communications Company, Inc.,
0.0%, 1-15-2004 (C) ................. 5,500 3,478,750
Rogers Cantel Mobile Communications Inc.,
10.75%, 11-1-2001 ................... 1,500 1,533,750
Summit Communications Group, Inc.,
10.5%, 4-15-2005 .................... 5,000 5,200,000
USA Mobile Communications, Inc. II,
9.5%, 2-1-2004 ...................... 2,000 1,700,000
Total ............................... 11,912,500
Textiles and Apparel - 1.08%
CMI Industries, Inc.,
9.5%, 10-1-2003 ..................... 4,500 3,825,000
CONSOLTEX GROUP INC.,
11.0%, 10-1-2003 .................... 7,000 6,230,000
Linter Textiles Corporation Limited,
13.75%, 10-1-2000 (D) ............... 17,200 43,000
Total ............................... 10,098,000
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Principal
Amount in
Thousands Value
TOTAL CORPORATE DEBT SECURITIES - 84.66% $790,405,621
(Cost: $825,318,395)
UNITED STATES GOVERNMENT SECURITY - 1.60%
United States Treasury,
7.5%, 11-15-2016 .................... $15,000 $ 14,885,100
(Cost: $15,117,741)
SHORT-TERM SECURITIES
Banks and Savings and Loans - 0.10%
U.S. Bancorp,
Master Note ......................... 891 891,000
Financial - 0.56%
Dana Credit Corp.,
6.15%, 4-21-95 ...................... 5,240 5,222,097
Food and Related - 0.16%
General Mills, Inc.,
Master Note ......................... 1,205 1,205,000
Sara Lee Corporation,
Master Note ......................... 280 280,000
Total ............................... 1,485,000
Public Utilities - Pipelines - 0.59%
Enron Corp.,
6.13%, 4-17-95 ...................... 5,530 5,514,934
Retailing - 3.74%
K Mart Corporation:
6.15%, 4-7-95 ....................... 2,180 2,177,765
6.15%, 4-12-95 ...................... 5,790 5,779,120
Kroger Co. (The):
6.375%, 4-4-95 ...................... 20,000 19,989,375
6.375%, 4-18-95 ..................... 7,000 6,978,927
Total ............................... 34,925,187
Tobacco - 2.02%
RJR Nabisco, Inc.:
6.42%, 4-17-95 ...................... 7,000 6,980,027
6.45%, 5-23-95 ...................... 12,000 11,888,200
Total ............................... 18,868,227
TOTAL SHORT-TERM SECURITIES - 7.17% $ 66,906,445
(Cost: $66,906,445)
See Notes to Schedule of Investments on page 18.
<PAGE>
THE INVESTMENTS OF
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Value
TOTAL INVESTMENT SECURITIES - 96.58% $901,644,567
(Cost: $972,234,063)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 3.42% 31,931,369
NET ASSETS - 100.00% $933,575,936
See Notes to Schedule of Investments on page 18.
<PAGE>
UNITED HIGH INCOME FUND, INC.
MARCH 31, 1995
Notes to Schedule of Investments
No income dividends were paid during the preceding 12 months.
(A) As of March 31, 1995, the following restricted securities were owned:
Shares/
Principal
Acquisition Amount Market
Security Date in 000's Cost Value
-------- ----------- --------------------------------
Advanstar
Holdings,
Inc., Warrants 3/30/92 1,750$ 0 $ 1,750
Consolidated Hydro, Inc.,
Warrants 6/15/93 5,400 127,817 32,400
Fitzgeralds Gaming
Corporation,
Warrants 3/8/94 3,500 173,565 157,500
Fitzgeralds Gaming
Corporation,
13.0%, 3-15-96 3/8/94 $3,500 3,326,435 1,855,000
S. D. Warren Company,
12.0%, 12-15-200412/13/94 3,000 3,000,000 3,165,000
Ucar Global Enterprises Inc.,
12.0%, 1-15-2005 1/20/95 2,500 2,500,000 2,625,000
----------------------
$9,127,817 $7,836,650
======================
The total market value of restricted securities represents approximately
0.84% of the total net assets at March 31, 1995.
(B) Affiliate as defined by the Investment Company Act of 1940 by reason of
ownership by the Fund of 5% or more of its outstanding voting securities.
(C) The security does not bear interest for an initial period of time and
subsequently becomes interest bearing.
(D) Non-income producing as the issuer has either missed its most recent
interest
payment or declared bankruptcy.
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 HIGH INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1995
Assets
Investment securities - at value
(Notes 1 and 3) ............................... $ 901,644,567
Cash ........................................... 2,141
Receivables:
Dividends and interest ........................ 19,719,751
Investment securities sold .................... 14,926,691
Fund shares sold .............................. 998,900
Prepaid insurance premium ...................... 58,779
--------------
Total assets ................................ 937,350,829
--------------
Liabilities
Payable for Fund shares redeemed ............... 3,445,266
Accrued service fee ............................ 185,453
Accrued transfer agency and dividend
disbursing .................................... 87,236
Accrued accounting services fee ................ 7,083
Other .......................................... 49,855
--------------
Total liabilities ........................... 3,774,893
--------------
Total net assets ........................... $ 933,575,936
==============
Net Assets
$1.00 par value capital stock, authorized --
400,000,000; shares outstanding -- 107,349,834
Capital stock ................................. $ 107,349,834
Additional paid-in capital .................... 1,309,472,811
Accumulated undistributed income (loss):
Accumulated undistributed net investment income 1,739,703
Accumulated undistributed net realized
loss on investment transactions ............. (414,396,916)
Net unrealized depreciation in value of
investments at end of period ................ (70,589,496)
--------------
Net assets applicable to outstanding
units of capital ........................... $ 933,575,936
==============
Net asset value per share (net assets divided
by shares outstanding) ......................... $8.70
Sales load (offering price x 5.75%) .............. .53
-----
Offering price per share (net asset value
divided by 94.25%) ............................. $9.23
=====
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 HIGH INCOME FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended MARCH 31, 1995
Investment Income
Income:
Interest ........................................ $93,533,088
Dividends ....................................... 295,898
-----------
Total income .................................. 93,828,986
-----------
Expenses (Note 2):
Investment management fee ....................... 5,368,151
Transfer agency and dividend disbursing ......... 1,170,699
Service fee ..................................... 947,725
Accounting services fee ......................... 85,000
Legal fees ...................................... 80,016
Custodian fees .................................. 52,181
Audit fees ...................................... 46,979
Other ........................................... 168,278
-----------
Total expenses ................................ 7,919,029
-----------
Net investment income ........................ 85,909,957
-----------
Realized and Unrealized Loss on Investments
Realized net loss on securities .................. (38,929,251)
Realized loss on foreign currency
transactions .................................... (6,731)
-----------
Realized net loss on investments ................ (38,935,982)
Unrealized depreciation in value of
investments during the period.................... (16,709,489)
-----------
Net loss on investments ......................... (55,645,471)
-----------
Net increase in net assets resulting
from operations .............................. $30,264,486
===========
See notes to financial statements.
<PAGE>
UNITED HIGH INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
March 31,
-----------------------------
1995 1994
-------------- --------------
Increase (Decrease) in Net Assets
Operations:
Net investment income .......... $ 85,909,957 $ 87,667,603
Realized net gain (loss)
on investments ................ (38,935,982) 24,824,907
Unrealized depreciation ........ (16,709,489) (26,914,040)
-------------- --------------
Net increase in net assets
resulting from operations ... 30,264,486 85,578,470
-------------- --------------
Dividends to shareholders from
net investment income* ......... (84,555,022) (86,938,851)
-------------- --------------
Capital share transactions:
Proceeds from sale of shares
(7,942,722 and 9,669,416
shares, respectively) ........ 69,649,781 91,334,327
Proceeds from reinvestment of
dividends (7,920,844 and
7,462,480 shares,
respectively) ................ 69,202,582 70,328,948
Payments for shares redeemed
(17,970,581 and 14,873,492
shares, respectively) ........ (157,604,402) (140,551,472)
-------------- --------------
Net increase (decrease) in net
assets resulting from capital
share transactions .......... (18,752,039) 21,111,803
-------------- --------------
Total increase (decrease) ... (73,042,575) 19,751,422
Net Assets
Beginning of period ............. 1,006,618,511 986,867,089
-------------- --------------
End of period, including
undistributed net investment
income of $1,739,703 and
$391,499, respectively ......... $ 933,575,936 $1,006,618,511
============== ==============
*See "Financial Highlights" on page 22.
See notes to financial statements.
<PAGE>
UNITED HIGH INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended March 31,
------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
Net asset value,
beginning of period $9.20 $9.21 $8.82 $7.51 $8.51
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... .80 .80 .83 .95 1.16
Net realized and
unrealized gain
(loss) on
investments ..... (0.51) (0.01) .40 1.29 (1.00)
----- ----- ----- ----- -----
Total from investment
operations ....... .29 .79 1.23 2.24 .16
----- ----- ----- ----- -----
Less dividends
declared from net
investment income . (0.79) (0.80) (0.84) (0.93) (1.16)
----- ----- ----- ----- -----
Net asset value,
end of period .... $8.70 $9.20 $9.21 $8.82 $7.51
===== ===== ===== ===== =====
Total return* ...... 3.41% 8.69% 14.72% 31.72% 2.56%
Net assets, end
of period (000
omitted) ......... $933,576$1,006,619$986,867$910,917$735,376
Ratio of expenses to
average net assets 0.84% 0.78% 0.75% 0.79% 0.82%
Ratio of net investment
income to average
net assets ....... 9.07% 8.51% 9.28% 11.56% 14.89%
Portfolio turnover
rate ............. 18.94% 54.80% 58.68% 62.12% 30.43%
*Total return calculated without taking into account the sales load deducted on
an initial purchase.
See notes to financial statements.
<PAGE>
UNITED HIGH INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
NOTE 1 -- Significant Accounting Policies
United High Income Fund, 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. Restricted securities and securities for which
market quotations are not readily available are valued at fair value as
determined in good faith under procedures established by and under the
general supervision of the Fund's Board of Directors. 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 Security 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 March 31, 1995, $6,731 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 $11.5 billion of
combined net assets at March 31, 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
$2,029,557, out of which W&R paid sales commissions of $1,167,070 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 $35,389.
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 obligations
and short-term securities, aggregated $163,346,610 while proceeds from
maturities and sales aggregated $231,608,630. Purchases of short-term
securities aggregated $886,274,401 while proceeds from maturities and sales of
short-term securities aggregated $867,860,701. There were no purchases or sales
of U.S. Government securities during the period.
For Federal income tax purposes, cost of investments owned at March 31,
1995 was $972,234,063, resulting in net unrealized depreciation of $70,589,496,
of which $27,449,584 related to appreciated securities and $98,039,080 related
to depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized net capital losses of
$38,929,250 during the year ended March 31, 1995, of which $20,966,497 was
deferred to the year ending March 31, 1996 (see discussion below). Capital loss
carryovers aggregated $394,421,964 at March 31, 1995 and are available to offset
future realized capital gain net income for Federal income tax purposes through
March 31, 1997; $325,242,583 of this amount is available through March 31, 1998;
$303,657,326 is available through March 31, 1999; $131,987,156 is available
through March 31, 2000: and $17,962,753 is available through March 31, 2003.
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 fiscal year ("post-October losses"). From November 1, 1994 through March
31, 1995, the Fund incurred net capital losses of $20,966,497 which have been
deferred to the fiscal year ending March 31, 1996.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United High Income 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 High Income Fund, Inc. (the
"Fund") at March 31, 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 March
31, 1995 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
May 5, 1995
- -----------------------------------------------------------------
<PAGE>
INCOME TAX INFORMATION
The amounts of the dividends 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 the dividends 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
- --------- ----- ---------------------------------------------------
04-15-94 $0.066 $0.0660 $0.0000 $0.0002 $0.0658 $0.0000
05-13-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
06-17-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
07-15-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
08-12-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
09-16-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
10-14-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
11-11-94 0.066 0.0660 0.0000 0.0002 0.0658 0.0000
12-16-94 0.065 0.0650 0.0000 0.0002 0.0648 0.0000
01-13-95 0.064 0.0640 0.0000 0.0002 0.0638 0.0000
02-10-95 0.064 0.0640 0.0000 0.0002 0.0638 0.0000
03-17-95 0.064 0.0640 0.0000 0.0002 0.0638 0.0000
------- ------- ------- ------- ------- -------
Total $0.785 $0.7850 $0.0000 $.0024 $0.7826 $0.0000
======= ======= ======= ======= ======= =======
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 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
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Los Angeles, California
Doyle Patterson, 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
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
Louise D. Rieke, Vice President
Carl E. Sturgeon, Vice President
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
NUR1009A(3-95)
printed on recycled paper
