UNITED
CASH
MANAGEMENT,
INC.
SEMIANNUAL
REPORT
------------------------------------------
For the six months ended December 31, 1995
<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.
<PAGE>
PRESIDENT'S LETTER
- -----------------------------------------------------------------
DECEMBER 31, 1995
Dear Shareholder:
As President of your Fund, I would like to thank you for your continued
confidence in our products and services. We strive to provide the best service
possible to our shareholders: from the Fund's manager, to Waddell & Reed's
customer service representatives, to your personal account representative and
the Waddell & Reed office nearest you.
While personalized service has become increasingly rare in the investment
industry, we remain committed to locally based account representatives who
provide the personal service you need. They are ready to assist you through
regular reviews of your financial plan and to answer any financial questions you
may have. Your account representative is anxious to help you plan for your
retirement, fund a child's education or make plans for other long-term financial
goals.
We want to help you open the door to a better financial future. We will
continue to help you meet your specific financial needs through quality
investment products and personalized service that makes the investment process
more convenient and accessible for you.
Should you have any questions about your account or other financial issues,
contact your personal account representative or your local Waddell & Reed
office. They're ready to help you make the most of your financial future.
Respectfully,
Keith A. Tucker
President
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1995
Principal
Amount in
Thousands Value
BANK OBLIGATIONS
Certificates of Deposit
Domestic - 6.17%
Barnett Bank of Florida, Jacksonville,
5.9375%, 1-26-96 ...................... $15,000 $14,999,713
Wachovia Bank and Trust,
5.82%, 1-29-96 ........................ 10,000 10,000,000
Total ................................. 24,999,713
Yankee - 8.38%
Banque Nationale de Paris,
6.1%, 10-10-96 ........................ 10,000 9,991,250
Creditanstalt - Bankverein,
6.0%, 10-11-96 ........................ 10,000 9,992,569
Societe Generale - New York,
5.75%, 2-8-96 ......................... 14,000 14,000,000
Total ................................. 33,983,819
Total Certificates of Deposit - 14.55% 58,983,532
Commercial Paper - 3.40%
U.S. Bancorp,
Master Note ........................... 13,788 13,788,000
Commercial Paper (backed by irrevocable
bank letter of credit) - 2.46%
Banco Nacional de Mexico S.A. (Barclays
Bank PLC),
5.8%, 1-4-96 .......................... 10,000 9,995,167
Notes - 5.92%
Bank One Milwaukee, N.A.,
7.25%, 2-9-96 ......................... 10,000 10,000,000
PNC Bank, N.A.,
5.88%, 12-20-96 ....................... 14,000 13,994,734
Total 23,994,734
TOTAL BANK OBLIGATIONS - 26.33% $106,761,433
(Cost: $106,761,433)
CORPORATE OBLIGATIONS
Commercial Paper
Automotive - 0.54%
Echlin, Inc.,
5.72%, 1-24-96 ........................ 2,185 2,177,015
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1995
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Chemicals Major - 4.67%
Air Products and Chemicals, Inc.,
5.75%, 1-16-96 ........................ $ 4,000 $ 3,990,417
du Pont (E.I.) de Nemours and Company,
5.77%, 1-19-96 ........................ 15,000 14,956,725
Total ................................. 18,947,142
Consumer Electronics and Appliances - 2.82%
TDK (USA) Corp.,
5.71%, 1-22-96 ........................ 11,450 11,411,862
Domestic Oil - 5.42%
Amoco Corporation,
5.77%, 2-16-96 ........................ 14,000 14,000,000
Atlantic Richfield Company,
5.78%, 1-19-96 ........................ 8,000 7,976,880
Total ................................. 21,976,880
Financial - 15.46%
AT&T Capital Corp.,
5.7%, 1-19-96 ......................... 3,000 2,991,450
BHP Finance (U.S.A.) Inc.:
5.78%, 1-12-96 ........................ 3,000 2,994,701
5.7%, 2-12-96 ......................... 4,000 3,973,400
5.72%, 2-12-96 ........................ 7,000 6,953,287
Caterpillar Financial Services Corp.,
5.76%, 1-24-96 ........................ 15,000 14,944,800
Merrill Lynch & Co., Inc.,
5.75%, 1-29-96 ........................ 5,000 4,977,639
Sony Capital Corp.:
5.75%, 1-12-96 ........................ 4,600 4,591,918
5.7%, 2-13-96 ......................... 5,000 4,965,958
Swedish Export Credit Corporation:
5.72%, 1-24-96 ........................ 9,000 8,967,110
5.75%, 1-24-96 ........................ 2,500 2,490,816
Transamerica Financial Group,
5.74%, 1-25-96 ........................ 4,859 4,840,406
Total ................................. 62,691,485
Food and Related - 0.04%
Sara Lee Corporation,
Master Note ........................... 163 163,000
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1995
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Paper - 1.23%
Kimberly-Clark Corp.,
5.75%, 1-26-96 ........................ $ 5,000 $ 4,980,035
Public Utilities - Gas - 3.00%
Bay State Gas Co.,
5.77%, 1-17-96 ........................ 3,000 2,992,307
Questar Corp.:
5.95%, 1-4-96 ......................... 4,200 4,197,917
5.91%, 1-19-96 ........................ 5,000 4,985,225
Total ................................. 12,175,449
Services, Consumer and Business - 2.95%
PHH Corp.,
5.78%, 1-12-96 ........................ 12,000 11,978,807
Telecommunications - 3.82%
BellSouth Telecommunications Inc.,
5.8%, 1-5-96 .......................... 1,650 1,648,937
GTE North Inc.,
5.75%, 1-5-96 ......................... 160 159,898
U.S. West Communications, Inc.:
5.8%, 1-18-96 ......................... 5,000 4,986,306
5.77%, 1-19-96 ........................ 8,725 8,699,828
Total ................................. 15,494,969
Total Commercial Paper - 39.95% 161,996,644
Commercial Paper (backed by irrevocable
bank letter of credit) - 3.20%
Financial
Agway Financial Corp. (Rabobank Nederland,
New York branch):
5.8%, 1-11-96 ......................... 4,000 3,993,555
5.8%, 1-12-96 ......................... 5,000 4,991,139
Spiegel Funding Corp. (Dresdner Bank AG),
5.83%, 1-26-96 ........................ 4,000 3,983,806
Total ................................. 12,968,500
Notes
Electrical Equipment - 2.46%
General Electric Capital Corp.,
5.9%, 1-10-96 ......................... 10,000 9,999,876
Financial - 4.94%
AT&T Capital Corp.,
6.29%, 7-5-96 ......................... 10,000 10,026,715
Merrill Lynch & Co., Inc.,
5.935%, 2-20-96 ....................... 10,000 10,000,129
Total.................................. 20,026,844
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1995
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Notes (Continued)
Food and Related - 1.30%
Grand Metropolitan Investment Corporation,
8.125%, 8-15-96 ....................... $ 5,200 $ 5,273,154
Total Notes - 8.70% 35,299,874
TOTAL CORPORATE OBLIGATIONS - 51.85% $210,265,018
(Cost: $210,265,018)
MUNICIPAL OBLIGATIONS
California - 5.92%
City of Anaheim, California, Certificates
of Participation (1993 Arena Financing
Project), Municipal Adjustable Rate
Taxable Securities (Credit Suisse):
5.9%, 2-1-96 .......................... 2,000 2,000,000
5.9%, 2-1-96 .......................... 10,000 10,000,000
Oakland-Alameda County Coliseum Lease
Revenue Bonds (Oakland Coliseum Project),
1995 Series B-1 (Canadian Imperial Bank
of Commerce):
5.85%, 1-10-96 ........................ 2,000 2,000,000
5.85%, 2-15-96 ........................ 10,000 10,000,000
Total ................................. 24,000,000
Missouri - 2.08%
The Industrial Development Authority
of the County of St. Louis,
Missouri, Series 1991B (Citibank
of New York),
6.31%, 1-4-96 ......................... 1,335 1,335,000
Missouri Economic Development, Export
and Infrastructure Board, Taxable
Industrial Development Revenue Bonds
(Heilig-Meyers Company Project),
Series 1992 (AmSouth Bank N.A.),
5.85%, 1-3-96 ......................... 7,100 7,100,000
Total ................................. 8,435,000
New York - 4.56%
Health Insurance Plan of Greater New York
(Morgan Guaranty Trust Company of New York),
5.95%, 1-3-96 ......................... 18,500 18,500,000
Pennsylvania - 0.87%
Berks County Industrial Development Authority
(Commercial Facilities Project), Series
B of 1995 (Meridian Bank),
6.1%, 1-3-96 .......................... 3,535 3,535,000
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1995
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Texas - 2.45%
Metrocrest Hospital Authority, Series 1989A
(The Bank of New York),
5.85%, 1-31-96 ........................ $10,000 $ 9,951,250
TOTAL MUNICIPAL OBLIGATIONS - 15.88% $ 64,421,250
(Cost: $64,421,250)
UNITED STATES GOVERNMENT OBLIGATIONS
Federal Home Loan Banks,
5.9%, 7-8-96 .......................... 14,000 14,000,000
Federal Home Loan Mortgage Corporation,
5.95%, 6-7-96 ......................... 10,000 10,000,000
Student Loan Management Association,
5.35%, 1-3-96 ......................... 15,000 15,000,000
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS - 9.62% $ 39,000,000
(Cost: $39,000,000)
TOTAL INVESTMENT SECURITIES - 103.68% $420,447,701
(Cost: $420,447,701)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (3.68%) (14,918,911)
NET ASSETS - 100.00% $405,528,790
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
DECEMBER 31, 1995
Assets
Investment securities - at value (Note 1) ........ $420,447,701
Cash ............................................ 382,532
Receivables:
Interest ........................................ 2,673,116
Fund shares sold ................................ 1,101,741
Prepaid insurance premium ........................ 18,647
------------
Total assets .................................. 424,623,737
------------
Liabilities
Payable for Fund shares redeemed ................. 18,867,521
Accrued transfer agency and dividend disbursing .. 163,286
Dividends payable ................................ 7,448
Accrued accounting services fee .................. 5,000
Accrued service fee .............................. 164
Other ............................................ 51,528
------------
Total liabilities ............................. 19,094,947
------------
Total net assets ............................. $405,528,790
============
Net Assets
$0.01 par value capital stock, authorized -- 5,000,000,000;
Class A shares outstanding -- 405,085,765;
Class B shares outstanding --443,025
Capital stock ................................... $ 4,055,288
Additional paid-in capital ...................... 401,473,502
------------
Net assets applicable to outstanding
units of capital ............................. $405,528,790
============
Net asset value, redemption and offering price
per share for Class A and Class B ................ $1.00
=====
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended DECEMBER 31, 1995
Investment Income
Interest ......................................... $11,878,046
-----------
Expenses (Note 2):
Transfer agency and dividend disbursing ......... 811,333
Investment management fee ....................... 804,922
Accounting services fee ......................... 30,000
Custodian fees .................................. 27,471
Audit fees ...................................... 15,228
Legal fees ...................................... 6,702
Distribution fee - Class B ...................... 551
Service fee - Class B ........................... 167
Other ........................................... 142,974
-----------
Total expenses ................................ 1,839,348
-----------
Net investment income ........................ 10,038,698
-----------
Net increase in net assets resulting
from operations ........................... $10,038,698
===========
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
December 31, June 30,
1995 1995
------------ -----------
Increase in Net Assets
Operations:
Net investment income ..............$ 10,038,698 $ 15,702,325
------------ ------------
Net increase in net assets
resulting from operations ....... 10,038,698 15,702,325
------------ ------------
Dividends to shareholders
from net investment income:*
Class A ............................ (10,035,486) (15,702,325)
Class B ............................ (3,212) ---
------------ ------------
(10,038,698) (15,702,325)
------------ ------------
Capital share transactions:
Proceeds from sale of shares:
Class A (963,825,437 and
845,981,959 shares,
respectively) ................... 963,825,437 845,981,959
Class B (509,384 and
0 shares, respectively) ......... 509,384 ---
Proceeds from reinvestment
of dividends:
Class A (9,959,354 and
15,306,048 shares, respectively). 9,959,354 15,306,048
Class B (3,070 and
0 shares, respectively) ......... 3,070 ---
Payments for shares redeemed:
Class A (937,498,886 and
809,407,787 shares,
respectively) ...................(937,498,886) (809,407,787)
Class B (69,429 and
0 shares, respectively) ......... (69,429) ---
------------ ------------
Net increase in net assets
resulting from capital
share transactions .............. 36,728,930 51,880,220
------------ ------------
Total increase .................. 36,728,930 51,880,220
Net Assets
Beginning of period ................. 368,799,860 316,919,640
------------ ------------
End of period .......................$405,528,790 $368,799,860
============ ============
Undistributed net investment
income ........................... $--- $---
==== ====
*See "Financial Highlights" on pages 11-12.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
FINANCIAL HIGHLIGHTS
Class A Shares
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the
six
months For the fiscal year ended June 30,
ended ----------------------------------
12/31/95 1995 1994 1993 1992 1991
-------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Net investment
income ........... 0.0257 0.0465 0.0252 0.0251 0.0434 0.0665
Less dividends
declared ......... (0.0257)(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 $1.00
======= ======= ======= ======= ======= =======
Total return........ 2.17% 4.74% 2.55% 2.57% 4.41% 6.89%
Net assets, end of
period (000
omitted) .........$405,086$368,800$316,920$350,624$448,127$579,944
Ratio of expenses to
average net
assets ........... 0.94%* 0.97% 1.04% 1.06% 0.99% 0.95%
Ratio of net
investment income
to average net
assets ........... 5.11%* 4.68% 2.51% 2.56% 4.36% 6.65%
*Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
FINANCIAL HIGHLIGHTS
Class B Shares
For a Share of Capital Stock Outstanding
Throughout the Period:
For the
period
from 9/5/95
through
12/31/95
--------
Net asset value,
beginning of
period ........... $1.00
------
Net investment
income ........... 0.0131
Less dividends
declared ......... (0.0131)
------
Net asset value,
end of period .... $1.00
=======
Total return........ 1.32%
Net assets, end of
period (000
omitted) ......... $443
Ratio of expenses to
average net
assets ........... 1.89%*
Ratio of net
investment income
to average net
assets ........... 4.08%*
*Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 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. Its investment objective is to seek maximum current income to the
extent consistent with stability of principal by investing in a a portfolio of
money market instruments meeting specified quality standards. 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.
E. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
NOTE 2 -- Investment Management and Payments to Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of 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 $13.6
billion of combined net assets at December 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
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 December 31, 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 has adopted a 12b-1 plan for Class B shares under which W&R,
principal underwriter and sole distributor of the Fund's shares, is compensated
in an amount calculated and payable daily up to 1% annually of the Fund's
average daily net assets for Class B shares. This fee consists of two elements:
(i) up to 0.75% may be paid to the Distributor (W&R) for distribution services
and distribution expenses including commissions paid by the Distributor to its
sales representatives and managers and (ii) up to 0.25% may be paid to reimburse
the Distributor for continuing payments made to the Distributor's
representatives and managers, its administrative costs in overseeing these
payments, and the expenses of WARSCO in providing certain personal services to
shareholders. During the period ended December 31, 1995, the Distributor
received $718 in 12b-1 payments. During this same period W&R paid no sales
commissions.
A contingent deferred sales charge may be assessed against a shareholder's
redemption amount of Class B shares and paid to the Distributor, W&R. The
purpose of the deferred sales charge is to compensate the Distributor for the
costs incurred by the Distributor in connection with the sale of a Fund's
shares. The amount of the deferred sales charge will be the following percent
of the total amount invested during a calendar year to acquire the shares or the
value of the shares redeemed, whichever is less. Redemption at any time during
the calendar year of investment and the first full calendar year after the
calendar year of investment, 3%; the second full calendar year, 2%; the third
full calendar year, 1%; and thereafter, 0%. All investments made during a
calendar year shall be deemed as a single investment during the calendar year
for purposes of calculating the deferred sales charge. The deferred sales
charge will not be imposed on shares representing payment of dividends or
distributions or on amounts which represent an increase in the value of the
shareholder's account resulting from capital appreciation above the amount paid
for shares purchased during the deferred sales charge period. During the period
ended December 31, 1995, the Distributor received no deferred sales charges.
The Fund paid Directors' fees of $7,693.
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 -- Commencement of Multiclass Operations
On September 5, 1995, the Fund was authorized to offer two classes of
shares, Class A and Class B, each of which has equal rights as to assets and
voting privileges with respect to each class. Class A shares are not subject to
a sales charge on purchases or a contingent deferred sales charge on redemption;
they are not subject to a Rule 12b-1 Service Plan. A comprehensive discussion
of the terms under which shares of either class are offered is contained in the
prospectus and the Statement of Additional Information for the Fund. The Fund
commenced multiclass operations on September 5, 1995.
Income and non-class specific expenses are allocated daily to each class of
shares based on the value of relative net assets as of the beginning of each day
adjusted for the prior day's capital share activity.
<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 December 31, 1995, the results of its operations for the six months
then ended and the changes in its net assets and the financial highlights for
each of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1995 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
February 8, 1996
<PAGE>
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.
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
<PAGE>
The United Group of Mutual Funds
United Asset Strategy Fund, Inc.
United Cash Management, Inc.
United Continental Income Fund, Inc.
United Funds, Inc.
United Bond Fund
United Income Fund
United Accumulative Fund
United Science and Technology Fund
United Gold & Government Fund, Inc.
United Government Securities Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United International Growth Fund, Inc.
United Municipal Bond Fund, Inc.
United Municipal High Income Fund, Inc.
United New Concepts Fund, Inc.
United Retirement Shares, Inc.
United Vanguard Fund, Inc.
Waddell & Reed Funds, Inc.
Asset Strategy Fund
Growth Fund
International Growth Fund
Limited-Term Bond Fund
Municipal Bond Fund
Total Return Fund
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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
Our INTERNET address is:
http://www.waddell.com
NUR1010SA(12-95)
printed on recycled paper
