<PAGE>
UNITED
CASH
MANAGEMENT,
INC.
ANNUAL
REPORT
---------------------------------------
For the fiscal year ended June 30, 1994
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
JUNE 30, 1994
Dear Shareholder:
This report relates to the operation of United Cash Management, Inc. for
the fiscal year ended June 30, 1994.
During the Fund's past fiscal year, the United States economy continued to
expand moderately. In response to the economic environment and possible upward
pressure on prices, the Federal Reserve Board raised short-term interest rates.
Even as interest rates rise, extending the Fund's average maturity can be
advantageous when the yield curve is particularly steep, as has been the
situation recently. Accordingly, we invested a portion of the Fund's assets in
securities with maturities longer than 90 days. We also invested about one-
third of the Fund's assets in floating-rate notes, which have yields that
increase as short-term interest rates rise.
We anticipate that the Federal Reserve Board may continue to raise short-
term interest rates, and we expect to pursue the same strategies we have
employed in the recent past in seeking to achieve the Fund's investment
objectives in the upcoming fiscal year. We will continue to hold floating-rate
notes that respond quickly to rising interest rates, and adjust the average
maturity of the Fund's portfolio securities to take full advantage of a changing
interest rate environment.
We appreciate your continued confidence.
Respectfully,
Richard K. Poettgen
Manager, United Cash Management, Inc.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1994
Principal
Amount in
Thousands Value
BANK OBLIGATIONS
Certificates of Deposit
Domestic - 6.31%
NationsBank of N. C., Charlotte,
5.4%, 5-19-95 ......................... $10,000 $ 9,999,931
PNC Bank, N.A.:
3.75%, 8-2-94 ......................... 5,000 5,000,000
3.55%, 1-20-95 ........................ 5,000 4,996,468
Total ................................. 19,996,399
Yankee - 1.58%
Credit Suisse, New York,
4.03%, 2-17-95 ........................ 5,000 5,000,925
TOTAL BANK OBLIGATIONS - 7.89% $ 24,997,324
(Cost: $24,997,324)
CORPORATE OBLIGATIONS
Commercial Paper
Aerospace - 2.45%
United Technologies Corp.,
4.26%, 7-28-94 ........................ 7,800 7,775,079
Chemicals Major - 3.15%
Air Products and Chemicals, Inc.,
4.27%, 7-12-94 ........................ 10,000 9,986,953
Drugs and Hospital Supply - 0.47%
Ciba-Geigy Ltd.,
4.37%, 7-19-94 ........................ 1,500 1,496,722
Electronics - 1.58%
Intel Corporation,
4.3%, 7-1-94 .......................... 5,000 5,000,000
Financial - 7.88%
B.A.T. Capital Corp.,
4.25%, 7-5-94 ......................... 5,000 4,997,639
Deere (John) Credit Co.,
4.37%, 7-18-94 ........................ 10,000 9,979,364
PHH Corp.,
4.26%, 7-18-94 ........................ 10,000 9,979,883
Total ................................. 24,956,886
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1994
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Food and Related - 0.14%
Sara Lee Corporation,
Master Note ........................... $ 440 $ 440,000
Leisure Time - 3.10%
Grand Metropolitan Investment Corp.,
4.8%, 11-15-94 ........................ 10,000 9,817,334
Machinery - 1.99%
Cooper Industries, Inc.,
4.25%, 7-11-94......................... 6,300 6,292,563
Public Utilities - Electric - 8.03%
Duke Power Co.,
4.25%, 7-5-94 ......................... 5,000 4,997,639
Pacific Gas and Electric Co.,
4.3%, 7-26-94 ......................... 10,000 9,970,139
Potomac Electric Power Co.,
4.35%, 7-11-94 ........................ 5,500 5,493,354
Southern California Edison Company,
4.33%, 7-6-94 ......................... 5,000 4,996,993
Total ................................. 25,458,125
Public Utilities - Gas - 3.15%
Questar Corp.:
4.28%, 7-22-94 ........................ 4,500 4,488,765
4.32%, 7-29-94 ........................ 5,500 5,481,520
Total ................................. 9,970,285
Tobacco - 3.15%
Philip Morris, Incorporated,
4.25%, 7-6-94 ......................... 10,000 9,994,098
Total Commercial Paper - 35.09% 111,188,045
Commercial Paper (backed by irrevocable
bank letter of credit)
Automotive - 3.16%
Hyundai Motor Finance Co. (Bank of
America NT & SA),
4.25%, 7-5-94 ......................... 10,000 9,995,278
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1994
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (backed by irrevocable
bank letter of credit) (Continued)
Computers and Office Equipment - 2.11%
Comdisco Inc. (Series BAB)
(Barclays Bank PLC),
4.27%, 7-5-94 ......................... $ 6,700 $ 6,696,821
Financial - 1.13%
Mission Funding Co. (Barclays
Bank PLC),
4.3%, 7-27-94 ......................... 3,100 3,090,373
Spiegel Funding Corp. (Dresdner
Bank A.G.),
4.27%, 7-6-94 ......................... 500 499,703
Total ................................. 3,590,076
Leisure Time - 3.16%
Paragon Communications (Credit
Lyonnais):
4.325%, 7-14-94 ....................... 6,008 5,998,617
4.325%, 7-19-94 ....................... 4,036 4,027,272
Total ................................. 10,025,889
Total Commercial Paper (backed by irrevocable
bank letter of credit) - 9.56% 30,308,064
Notes
Beverages - 3.15%
PepsiCo, Inc.,
4.37%, 7-6-94 ......................... 10,000 10,000,000
Financial - 14.67%
AT&T Capital Corp.,
3.48%, 9-23-94 ........................ 9,200 9,200,000
American Express Credit Corp.,
5.95%, 1-27-95 ........................ 8,000 8,063,569
Avco Financial Services Inc.,
4.46%, 7-6-94 ......................... 10,000 10,000,000
Merrill Lynch & Co., Inc.,
4.8%, 8-15-94 ......................... 10,000 10,000,000
Mobil Australia Finance Co.,
8.0%, 7-25-94 ......................... 9,200 9,226,215
Total ................................. 46,489,784
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1994
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Notes (Continued)
Public Utilities - Electric - 1.61%
Florida Power Corp.,
8.4%, 12-1-94 ......................... $ 5,000 $ 5,097,766
Total Notes - 19.43% 61,587,550
TOTAL CORPORATE OBLIGATIONS - 64.08% $203,083,659
(Cost: $203,083,659)
MUNICIPAL OBLIGATIONS
California - 2.90%
City of Anaheim, California, Certificates of
Participation (1993 Arena Financing Project),
Adjustable Rate Taxable Securities
(Credit Suisse),
4.375%, 7-5-94 ........................ 9,200 9,200,000
Georgia - 3.15%
Development Authority of Richmond
County (Georgia), Taxable
Industrial Revenue Bonds
(NutraSweet Project), Series
1990 (Union Bank of Switzerland),
5.71%, 6-2-95 ......................... 10,000 10,000,000
Missouri - 0.95%
Missouri Economic Development, Export
and Infrastructure Board, Taxable
Industrial Development Revenue Bonds
(Heilig-Meyers Company Project),
Series 1992 (AmSouth Bank N.A.),
4.55%, 7-6-94 ......................... 3,000 3,000,000
New York - 5.84%
Health Insurance Plan of Greater New York
(Morgan Guaranty Trust Company of New York),
4.5%, 7-6-94 (A) ...................... 18,500 18,500,000
TOTAL MUNICIPAL OBLIGATIONS - 12.84% $ 40,700,000
(Cost: $40,700,000)
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1994
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT OBLIGATIONS
Federal Home Loan Banks,
4.65%, 7-8-94 ......................... $14,000 $ 14,000,000
Federal Home Loan Mortgage Corporation,
4.70%, 9-7-94 ......................... 10,000 10,000,000
Federal National Mortgage Association,
4.65%, 9-20-94 ........................ 9,500 9,500,000
Student Loan Management Association,
4.83%, 7-6-94 ......................... 13,900 13,900,000
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS - 14.96% $ 47,400,000
(Cost: $47,400,000)
TOTAL INVESTMENT SECURITIES - 99.77% $316,180,983
(Cost: $316,180,983)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.23% 738,657
NET ASSETS - 100.00% $316,919,640
Notes to Schedule of Investments
(A) Security is subject to an irrevocable put option.
Cost of investments owned is the same as that used for Federal income tax
purposes.
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1994
Assets
Investment securities - at value (Note 1) ........ $316,180,983
Cash ............................................ 579,156
Receivables:
Interest ........................................ 2,037,706
Fund shares sold ................................ 1,282,629
Prepaid insurance premium ........................ 26,567
------------
Total assets .................................. 320,107,041
------------
Liabilities
Payable for Fund shares redeemed ................. 2,911,901
Accrued transfer agency and dividend disbursing .. 146,117
Dividends payable ................................ 113,385
Accrued accounting services fee .................. 4,167
Other ............................................ 11,831
------------
Total liabilities ............................. 3,187,401
------------
Total net assets ............................. $316,919,640
============
Net Assets
$0.01 par value capital stock, authorized --
5,000,000,000; shares outstanding -- 316,919,640
Capital stock ................................... $ 3,169,196
Additional paid-in capital ...................... 313,750,444
------------
Net assets applicable to outstanding
units of capital ............................. $316,919,640
============
Net asset value, redemption and offering price
per share ........................................ $1.00
=====
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended JUNE 30, 1994
Investment Income
Interest ......................................... $11,658,916
-----------
Expenses (Note 2):
Transfer agency and dividend disbursing ......... 1,757,449
Investment management fee ....................... 1,372,977
Custodian fees .................................. 57,975
Accounting services fee ......................... 50,000
Audit fees ...................................... 20,500
Legal fees ...................................... 5,133
Other ........................................... 141,128
-----------
Total expenses ................................ 3,405,162
-----------
Net investment income ........................ 8,253,754
-----------
Net increase in net assets resulting
from operations ........................... $ 8,253,754
===========
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
June 30,
-------------------------
1994 1993
------------- ------------
Decrease in Net Assets
Operations:
Net investment income ..............$ 8,253,754 $ 10,085,867
------------ ------------
Net increase in net assets
resulting from operations ....... 8,253,754 10,085,867
------------ ------------
Dividends to shareholders
from net investment income* ........ (8,253,754) (10,085,867)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(421,971,836 and 420,866,621
shares, respectively) ............ 421,971,836 420,866,621
Proceeds from reinvestment of
dividends (8,072,255 and
9,862,502 shares, respectively) ... 8,072,255 9,862,502
Payments for shares redeemed
(463,748,538 and 528,231,957
shares, respectively) ............(463,748,538) (528,231,957)
------------ ------------
Net decrease in net assets
resulting from capital
share transactions .............. (33,704,447) (97,502,834)
------------ ------------
Total decrease .................. (33,704,447) (97,502,834)
Net Assets
Beginning of period ................. 350,624,087 448,126,921
------------ ------------
End of period .......................$316,919,640 $350,624,087
============ ============
Undistributed net investment
income ........................... $--- $---
==== ====
*See "Financial Highlights" on page 11.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended June 30,
---------------------------------------------
1994 1993 1992 1991 1990
------- ------- ------- ------- -------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
Net investment
income ........... 0.0252 0.0251 0.0434 0.0665 0.0786
Less dividends
declared ......... (0.0252)(0.0251)(0.0434)(0.0665)(0.0786)
------- ------- ------- ------- -------
Net asset value,
end of period .... $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return........ 2.55% 2.57% 4.41% 6.89% 8.18%
Net assets, end of
period (000
omitted) .........$316,920$350,624$448,127$579,944$563,893
Ratio of expenses to
average net
assets ........... 1.04% 1.06% 0.99% 0.95% 0.95%
Ratio of net
investment income
to average net
assets ........... 2.51% 2.56% 4.36% 6.65% 7.86%
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1994
NOTE 1 -- Significant Accounting Policies
United Cash Management, 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 -- The Fund invests only in money market securities with
maturities or irrevocable put options within one year. The Fund uses the
amortized cost method of security valuation which is accomplished by
valuing a security at its cost and thereafter assuming a constant
amortization rate to maturity of any discount or premium.
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, if any, are calculated on
the identified cost basis. Interest income is recorded on the accrual
basis.
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.
Accordingly, no provision has been made for Federal income taxes.
D. Dividends to shareholders -- All of the Fund's net income is declared and
recorded by the Fund as dividends on each day to shareholders of record at
the time of the previous determination of net asset value. Dividends are
declared from the total of net investment income, plus or minus realized
gains or losses on portfolio securities. Since the Fund does not expect to
realize any long-term capital gains, it does not expect to pay any capital
gains distributions.
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 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 $10.5
billion of combined net assets at June 30, 1994) 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
At present, the Fund operates under state expense requirements which limit
the amount of aggregate annual expenses, adjusted for certain excess expenses,
that the Fund may incur during its fiscal year. The Manager will reimburse the
Fund for any expenses in excess of the limitation. No such reimbursement is
required for the period ended June 30, 1994.
The Fund also pays WARSCO a monthly per account charge of $1.75 for each
shareholder account which was in existence at any time during the prior month
and $0.75 for each shareholder check it processed. The Fund also reimburses W&R
and WARSCO for certain out-of-pocket costs.
The Fund paid Directors' fees of $12,587.
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.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Cash Management, 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 Cash Management, Inc. (the
"Fund") at June 30, 1994, the results of its operations for the year then ended
and the changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 1994 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
PRICE WATERHOUSE LLP
Kansas City, Missouri
July 29, 1994
<PAGE>
INCOME TAX INFORMATION
Dividends are taxable to shareholders and are reportable in your Federal
income tax returns for the years in which the dividends were received or
reinvested.
Statements as to the tax status of each investor's dividends will be mailed
annually.
Dividends are declared and recorded by the Fund on each day the New York
Stock Exchange is open for business.
Shareholders are advised to consult with their tax advisers concerning the
tax treatment of dividends from the Fund.
Corporations:
The dividends are not eligible for the dividends received deduction.
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>
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
Rodney O. McWhinney, Vice President
Sharon K. Pappas, Vice President and Secretary
Richard K. Poettgen, Vice President
This report is submitted for the general information of the shareholders of
United Cash Management, Inc. It is not authorized for distribution to
prospective investors in the Fund unless accompanied with or preceded by the
United Cash Management, 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 Continental Income Fund, Inc.
United Income Fund
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
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.
United Retirement Shares, 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
Toll-Free - (800)366-5465
Local - 236-1303
For Yield Information Only
Toll-Free - (800)366-4953
Local - 236-1307
NUR1010A(6-94)
printed on recycled paper