UNITED
CASH
MANAGEMENT,
INC.
ANNUAL
REPORT
---------------------------------------
For the fiscal year ended June 30, 1995
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
JUNE 30, 1995
Dear Shareholder:
This report relates to the operation of United Cash Management, Inc. for
the fiscal year ended June 30, 1995 and provides information regarding the
Fund's performance during that period.
During the Fund's past fiscal year, the Federal Reserve Bank raised short-
term interest rates several times in response to a variety of economic
concerns, particularly the perception that inflationary pressures were
increasing. In the last half of the fiscal year, a number of financial
indicators began to signify slowing growth in the economy, and as a result
inflation fears dissipated.
As interest rates were rising, we invested a portion of the Fund's assets
in floating-rate notes, which have yields that increase as short-term interest
rates rise. As the market began to anticipate lower interest rates, we
invested in securities with longer maturities to benefit as fully as possible
from the higher interest rates that had become available. When short-term
yields increased to levels that were even higher than longer-term yields, we
took advantage of the situation by investing in securities with shorter
maturities.
We anticipate that the Federal Reserve Bank, which lowered interest rates
in July of 1995 soon after the Fund's fiscal year had ended, may continue to
lower interest rates. We expect to pursue the same strategies we have employed
in the recent past in seeking to achieve the Fund's investment objectives,
mainly by adjusting the average maturity of the Fund's holdings in anticipation
of declines or rises in interest rates as they become imminent.
We appreciate your continued confidence in our management of the Fund.
Respectfully,
Richard K. Poettgen
Manager, United Cash Management, Inc.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1995
Principal
Amount in
Thousands Value
BANK OBLIGATIONS
Certificates of Deposit
Domestic - 3.25%
First National Bank of Chicago,
6.24%, 6-3-96 ......................... $12,000 $ 12,007,726
Yankee - 3.80%
Societe Generale - New York,
6.19%, 6-3-96 ......................... 14,000 14,000,000
Total Certificates of Deposit - 7.05% 26,007,726
Commercial Paper - 0.42%
U.S. Bancorp,
Master Note ........................... 1,546 1,546,000
Notes
Abbey National Treasury Services plc,
7.4%, 12-15-95 ........................ 9,500 9,500,000
Bank One Milwaukee, N.A.,
7.25%, 2-9-96 ......................... 10,000 10,000,000
Comerica Bank,
5.62%, 10-27-95 ....................... 8,000 7,998,495
Total Notes - 7.46% 27,498,495
TOTAL BANK OBLIGATIONS - 14.93% $ 55,052,221
(Cost: $55,052,221)
CORPORATE OBLIGATIONS
Commercial Paper
Automotive - 4.05%
Echlin, Inc.:
5.97%, 7-17-95 ........................ 6,000 5,984,080
6.0%, 7-24-95 ......................... 5,000 4,980,833
6.0%, 7-27-95 ......................... 4,000 3,982,667
Total ................................. 14,947,580
Chemicals Major - 2.14%
Air Products and Chemicals, Inc.,
5.62%, 11-30-95 ....................... 3,000 2,928,813
Hercules, Inc.,
5.89%, 8-22-95 ........................ 5,000 4,957,461
Total ................................. 7,886,274
Consumer Electronics and Appliances - 1.76%
TDK (USA) Corp.,
5.96%, 7-17-95 ........................ 6,500 6,482,782
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1995
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Drugs and Hospital Supply - 2.25%
Warner-Lambert Company,
5.98%, 7-10-95 ........................ $ 8,300 $ 8,287,592
Financial - 15.92%
B.A.T. Capital Corp.,
5.98%, 7-26-95 ........................ 5,740 5,716,163
BHP Finance (U.S.A.) Inc.,
5.97%, 7-28-95 ........................ 12,000 11,946,270
Bell Atlantic Financial Services, Inc.,
6.0%, 7-25-95 ......................... 10,000 9,960,000
Block Financial Corp.,
6.18%, 7-5-95 ......................... 15,000 14,989,700
Merrill Lynch & Co., Inc.,
5.9%, 7-20-95 ......................... 5,000 4,984,431
PHH Corp.,
5.95%, 7-7-95 ......................... 1,200 1,198,810
Sony Capital Corp.,
5.93%, 8-14-95 ........................ 10,000 9,927,522
Total ................................. 58,722,896
Food and Related - 2.69%
CPC International Inc.,
5.95%, 8-14-95 ........................ 3,485 3,459,656
Golden Peanut Company,
5.95%, 7-21-95 ........................ 6,500 6,478,514
Total ................................. 9,938,170
Public Utilities - Electric - 0.81%
Carolina Power and Light Company,
5.97%, 7-26-95 ........................ 3,000 2,987,563
Publishing and Advertising - 1.63%
Gannett Company, Inc.,
6.2%, 7-3-95 .......................... 6,000 5,997,933
Retailing - 1.08%
Albertson's Inc.,
5.95%, 7-12-95 ........................ 4,000 3,992,728
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1995
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Telecommunications - 2.27%
GTE Southwest, Inc.,
6.0%, 8-8-95 .......................... $ 4,400 $ 4,372,133
Siemens AG,
6.2%, 7-3-95 .......................... 4,000 3,998,622
Total ................................. 8,370,755
Total Commercial Paper - 34.60% 127,614,273
Commercial Paper (backed by irrevocable
bank letter of credit)
Financial - 3.24%
Omnicom Finance Inc. (Swiss Bank Corp.),
5.95%, 7-28-95 ........................ 12,000 11,946,450
Savings and Loans - 4.06%
Western Financial Savings Bank (Federal
Home Loan Bank of San Francisco),
6.15%, 7-5-95 ......................... 15,000 14,989,750
Total Commercial Paper (backed by irrevocable
bank letter of credit) - 7.30% 26,936,200
Notes
Electrical Equipment - 2.71%
General Electric Capital Corp.,
6.4%, 7-10-95 ......................... 10,000 9,997,344
Financial - 2.71%
Merrill Lynch & Co., Inc.,
6.185%, 8-21-95 ....................... 10,000 10,000,602
Public Utilities - Electric - 2.58%
Georgia Power Co.,
5.125%, 9-1-95 ........................ 9,500 9,488,242
Total Notes - 8.00% 29,486,188
TOTAL CORPORATE OBLIGATIONS - 49.90% $184,036,661
(Cost: $184,036,661)
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS
California - 6.75%
Modesto Irrigation District Finance
Authority (Bank of America),
6.02%, 8-18-95 ........................ $15,000 $ 14,879,600
City of Anaheim, California, Certificates
of Participation (1993 Arena Financing
Project), Municipal Adjustable Rate
Taxable Securities (Credit Suisse),
6.2675%, 8-2-95 ....................... 10,000 10,000,000
Total ................................. 24,879,600
Michigan - 4.33%
Michigan Underground Storage Tank Financial
Assurance Authority, State of Michigan,
Series 1 (Canadian Imperial Bank of Commerce),
6.12%, 7-10-95 ........................ 16,000 15,975,520
Missouri - 1.17%
Missouri Economic Development, Export
and Infrastructure Board, Taxable
Industrial Development Revenue Bonds
(Heilig-Meyers Company Project),
Series 1992 (AmSouth Bank N.A.),
6.25%, 7-5-95 ......................... 3,000 3,000,000
The Industrial Development Authority
of the County of St. Louis,
Missouri, Series 1991B (Citibank
of New York),
6.6891%, 7-6-95 ....................... 1,335 1,335,000
Total ................................. 4,335,000
New Hampshire - 2.44%
The Industrial Development Authority
of the State of New Hampshire,
Pollution Control Revenue Bonds
(Public Service Company of New
Hampshire Project-1991 Taxable
Series D and E) (Barclays Bank),
6.125%, 7-5-95 ........................ 9,000 9,000,000
New York - 5.02%
Health Insurance Plan of Greater New York
(Morgan Guaranty Trust Company of New York),
6.17%, 7-5-95 ......................... 18,500 18,500,000
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Texas - 2.70%
Metrocrest Hospital Authority, Series 1989A
(The Bank of New York),
6.1216%, 8-1-95 ....................... $10,000 $ 9,947,286
TOTAL MUNICIPAL OBLIGATIONS - 22.41% $ 82,637,406
(Cost: $82,637,406)
UNITED STATES GOVERNMENT OBLIGATIONS
Federal Home Loan Banks,
6.4%, 7-10-95 ......................... 14,000 14,000,000
Federal Home Loan Mortgage Corporation,
6.45%, 9-7-95 ......................... 10,000 10,000,000
Federal National Mortgage Association,
6.4%, 9-20-95 ......................... 9,500 9,500,000
Student Loan Management Association,
5.81%, 7-5-95 ......................... 15,000 15,000,000
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS - 13.15% $ 48,500,000
(Cost: $48,500,000)
TOTAL INVESTMENT SECURITIES - 100.39% $370,226,288
(Cost: $370,226,288)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (0.39%) (1,426,428)
NET ASSETS - 100.00% $368,799,860
Notes to Schedule of Investments
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, 1995
Assets
Investment securities - at value (Note 1) ........ $370,226,288
Cash ............................................ 1,589,448
Receivables:
Interest ........................................ 1,982,754
Fund shares sold ................................ 755,521
Prepaid insurance premium ........................ 25,436
------------
Total assets .................................. 374,579,447
------------
Liabilities
Payable for Fund shares redeemed ................. 5,454,737
Dividends payable ................................ 163,486
Accrued transfer agency and dividend disbursing .. 136,954
Accrued accounting services fee .................. 5,000
Other ............................................ 19,410
------------
Total liabilities ............................. 5,779,587
------------
Total net assets ............................. $368,799,860
============
Net Assets
$0.01 par value capital stock, authorized --
5,000,000,000; shares outstanding -- 368,799,860
Capital stock ................................... $ 3,687,999
Additional paid-in capital ...................... 365,111,861
------------
Net assets applicable to outstanding
units of capital ............................. $368,799,860
============
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, 1995
Investment Income
Interest ......................................... $18,965,754
-----------
Expenses (Note 2):
Transfer agency and dividend disbursing ......... 1,592,738
Investment management fee ....................... 1,398,085
Custodian fees .................................. 46,820
Accounting services fee ......................... 51,667
Audit fees ...................................... 20,646
Legal fees ...................................... 9,608
Other ........................................... 143,865
----------
Total expenses ................................ 3,263,429
----------
Net investment income ........................ 15,702,325
----------
Net increase in net assets resulting
from operations ........................... $15,702,325
==========
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
June 30,
-------------------------
1995 1994
------------- ------------
Increase (Decrease) in Net Assets
Operations:
Net investment income ..............$ 15,702,325 $ 8,253,754
------------ ------------
Net increase in net assets
resulting from operations ....... 15,702,325 8,253,754
------------ ------------
Dividends to shareholders
from net investment income* ........ (15,702,325) (8,253,754)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(845,981,959 and 421,971,836
shares, respectively) ............ 845,981,959 421,971,836
Proceeds from reinvestment of
dividends (15,306,048 and
8,072,255 shares, respectively) ... 15,306,048 8,072,255
Payments for shares redeemed
(809,407,787 and 463,748,538
shares, respectively) ............(809,407,787) (463,748,538)
------------ ------------
Net increase (decrease) in net
assets resulting from capital
share transactions .............. 51,880,220 (33,704,447)
------------ ------------
Total increase (decrease) ....... 51,880,220 (33,704,447)
Net Assets
Beginning of period ................. 316,919,640 350,624,087
------------ ------------
End of period .......................$368,799,860 $316,919,640
============ ============
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,
---------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- -------
Net investment
income ........... 0.0465 0.0252 0.0251 0.0434 0.0665
Less dividends
declared ......... (0.0465)(0.0252)(0.0251)(0.0434)(0.0665)
------- ------- ------- ------- -------
Net asset value,
end of period .... $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return........ 4.74% 2.55% 2.57% 4.41% 6.89%
Net assets, end of
period (000
omitted) ......... $368,800$316,920$350,624$448,127$579,944
Ratio of expenses to
average net
assets ........... 0.97% 1.04% 1.06% 0.99% 0.95%
Ratio of net
investment income
to average net
assets ........... 4.68% 2.51% 2.56% 4.36% 6.65%
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
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 $12.1
billion of combined net assets at June 30, 1995) at annual rates of .51% of the
first $750 million of combined net assets, .49% on that amount between $750
million and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45%
between $2.25 billion and $3 billion, .43% between $3 billion and $3.75
billion, .40% between $3.75 billion and $7.5 billion, .38% between $7.5 billion
and $12 billion, and .36% of that amount over $12 billion. The Fund accrues
and pays this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services,
the Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in
the following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
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, 1995.
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 $12,071.
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, 1995, the results of its operations for the year then ended
and the changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at June 30, 1995 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
August 4, 1995
<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.
<PAGE>
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.
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
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
James B. Judd, Kansas City, Missouri
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
Richard K. Poettgen, Vice President
Effective September 5, 1995, existing shares of United Cash Management, Inc.
will be reclassified as Class A shares and the Fund will begin to offer Class B
shares. Class B shares may be purchased only by exchange of corresponding
shares of Waddell & Reed Funds, Inc. and will be subject to a contingent
deferred sales charge and a Rule 12b-1 fee.
<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
Toll-Free - (800)366-5465
Local - 236-1303
For Yield Information Only
Toll-Free - (800)366-4953
Local - 236-1307
NUR1010A(6-95)
printed on recycled paper
