<PAGE>
UNITED
CASH
MANAGEMENT,
INC.
ANNUAL
REPORT
---------------------------------------
For the fiscal year ended June 30, 1996
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
JUNE 30, 1996
Dear Shareholder:
This report relates to the operation of United Cash Management, Inc. for the
fiscal year ended June 30, 1996, and provides information regarding the Fund's
performance during that period.
During the first half of the past fiscal year, the Federal Reserve Bank lowered
short-term interest rates in response to a slowing economy and lower inflation
rates. As 1996 began, the economy began to show signs of strengthening, giving
rise to concerns that the Federal Reserve Bank would increase interest rates to
combat inflationary pressures.
As the Federal Reserve Bank began to lower short-term interest rates during the
first half of the past fiscal year, the Fund extended the average maturity of
its portfolio to lock in the higher interest rates. In response to indications
that the economy was strengthening during the third fiscal quarter, the Fund
began to lower the portfolio's average maturity to take advantage of the
prospects for higher short-term interest rates. The Fund also maintained a
significant position in floating-rate instruments which adjust relatively
quickly to changes in interest rates.
Heading into the Fund's next fiscal year, data suggests that the economy will
sustain its moderate rate of growth. To combat inflationary pressures that may
result from a growing economy, the Federal Reserve Bank may take steps to
increase short-term interest rates. In the event of an increase in short-term
rates, the Fund intends to shorten the average maturity of its portfolio as
securities mature. The Fund plans to continue emphasizing floating-rate
securities as an important component of its portfolio and actively searching for
attractive investment opportunities.
Thank you very much for your continued support and confidence in our
organization.
Respectfully,
Richard K. Poettgen
Manager, United Cash Management, Inc.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1996
Principal
Amount in
Thousands Value
BANK OBLIGATIONS
Certificates of Deposit - 7.95%
Yankee
Banque Nationale de Paris,
5.31%, 3-6-97 ......................... $10,000 $10,000,000
Creditanstalt - Bankverein,
5.38%, 3-7-97 ......................... 10,000 10,000,000
Societe Generale - New York,
5.3%, 2-21-97 ......................... 12,000 12,000,000
Total ................................. 32,000,000
Commercial Paper (backed by irrevocable
bank letter of credit) - 4.46%
Banco Nacional de Mexico S.A.
(Barclays Bank PLC),
5.12%, 7-24-96 ........................ 5,000 4,983,645
Nacional Financiera, S.N.C., Grand
Cayman Branch (Societe Generale),
5.33%, 7-29-96 ........................ 5,000 4,979,272
Petroleo Brasileiro S.A. - Petrobras
(Barclays Bank PLC),
5.24%, 7-9-96 ......................... 8,000 7,990,685
Total ................................. 17,953,602
Notes - 10.56%
Abbey National Treasury Services plc,
7.8%, 12-16-96 ........................ 3,000 3,029,753
Capital One Funding Corporation
(Bank One, Kentucky, NA),
5.5%, 7-5-96 .......................... 13,500 13,500,000
Comerica Bank,
5.4605%, 7-15-96 ...................... 12,000 12,000,000
PNC Bank, N.A.,
5.3992%, 7-22-96 ...................... 14,000 13,997,442
Total ................................. 42,527,195
TOTAL BANK OBLIGATIONS - 22.97% $92,480,797
(Cost: $92,480,797)
CORPORATE OBLIGATIONS
Commercial Paper
Chemicals and Allied Products - 5.15%
Hercules Inc.:
5.3%, 7-23-96 ......................... 7,000 6,977,328
5.34%, 8-14-96 ........................ 4,822 4,790,529
PPG Industries Inc.,
5.33%, 7-11-96 ........................ 9,000 8,986,675
Total ................................. 20,754,532
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Electric, Gas, and Sanitary Services - 3.29%
Idaho Power Co.:
5.36%, 7-22-96 ........................ $ 4,800 $ 4,784,992
5.4%, 7-30-96 ......................... 4,492 4,472,460
Pacificorp,
5.3%, 7-16-96 ......................... 4,000 3,991,167
Total ................................. 13,248,619
Electronic and Other Electric Equipment - 3.91%
Sony Capital Corp.,
5.3%, 7-19-96 ......................... 3,300 3,291,255
TDK (USA) Corp.:
5.32%, 7-17-96 ........................ 10,470 10,445,244
5.35%, 7-17-96 ........................ 2,000 1,995,244
Total ................................. 15,731,743
Forestry - 1.50%
Weyerhaeuser Co.,
5.3%, 7-2-96 .......................... 6,060 6,059,108
Insurance Carriers - 3.12%
Safeco Credit Company, Inc.,
5.37%, 8-19-96 ........................ 2,600 2,580,996
Transamerica Finance Corporation,
5.32%, 7-15-96 ........................ 10,000 9,979,311
Total ................................. 12,560,307
Nondepository Institutions - 2.01%
Associates Corporation of North America,
5.36%, 7-29-96 ........................ 7,800 7,767,483
Island Finance Puerto Rico Inc.,
5.31%, 7-9-96 ......................... 310 309,634
Total ................................. 8,077,117
Petroleum and Coal Products - 3.48%
Amoco Corporation:
5.35%, 7-8-96 ......................... 5,000 5,000,000
5.48%, 7-25-96 ........................ 9,000 9,000,000
Total ................................. 14,000,000
Printing and Publishing - 1.86%
American Greetings Corp.,
5.35%, 7-10-96 ........................ 7,500 7,489,969
Tobacco Products - 1.99%
B.A.T. Capital Corp.:
5.3%, 7-3-96 .......................... 7,000 6,997,939
5.37%, 7-23-96 ........................ 1,000 996,718
Total ................................. 7,994,657
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Transportation Equipment - 2.48%
Echlin, Inc.,
5.35%, 7-8-96 ......................... $10,000 $ 9,989,597
Total Commercial Paper - 28.79% 115,905,649
Commercial Paper (backed by irrevocable
bank letter of credit)
Electric, Gas, and Sanitary Services - 2.40%
CommEd Fuel Co. Inc. (First National
Bank of Chicago),
5.29%, 7-23-96 ........................ 9,682 9,650,700
Hotels and Other Lodging Places - 1.23%
Accor (Banque Nationale de Paris),
5.3%, 8-1-96 .......................... 5,000 4,977,181
Total Commercial Paper (backed by
irrevocable bank letter of credit)- 3.63% 14,627,881
Notes
Auto Repair, Services, and Parking - 3.23%
PHH Corporation,
5.4451%, 7-26-96 ...................... 13,000 12,994,398
Communication - 3.72%
AT&T Capital Corp.:
6.29%, 7-5-96 ......................... 10,000 10,000,447
5.5344%, 7-18-96 ...................... 5,000 5,000,739
Total ................................. 15,001,186
Food and Kindred Products - 1.29%
Grand Metropolitan Investment Corporation,
8.125%, 8-15-96 ....................... 5,200 5,213,725
Nondepository Institutions - 1.62%
American Express Credit Corp.,
7.875%, 12-1-96 ....................... 1,500 1,514,805
Associates Corporation of North America:
6.02%, 8-19-96 ........................ 4,000 4,002,909
4.625%, 11-30-96 ...................... 1,000 996,520
Total.................................. 6,514,234
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1996
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Notes (Continued)
Security and Commodity Brokers - 3.48%
Merrill Lynch & Co., Inc.,
5.4197%, 5-29-97 ...................... $14,000 $ 14,000,000
Total Notes - 13.34% 53,723,543
TOTAL CORPORATE OBLIGATIONS - 45.76% $184,257,073
(Cost: $184,257,073)
MUNICIPAL OBLIGATIONS
California - 8.68%
City of Anaheim, California, Certificates
of Participation (1993 Arena Financing
Project), Municipal Adjustable Rate
Taxable Securities (Credit Suisse),
5.5%, 8-1-96 .......................... 15,000 15,000,000
Oakland-Alameda County Coliseum Lease
Revenue Bonds (Oakland Coliseum Project),
1995 Series B-1 (Canadian Imperial Bank
of Commerce),
5.43%, 8-7-96 ......................... 15,000 15,000,000
Community Redevelopment Agency of the
City of Visalia, California, East
Visalia Redevelopment Project, Variable
Interest Short Term Adjustable Securities
(National Westminster Bank PLC),
5.592%, 7-4-96 ........................ 4,955 4,955,000
Total ................................. 34,955,000
Missouri - 0.33%
The Industrial Development Authority
of the County of St. Louis,
Missouri, Series 1991B (Citibank
of New York),
6.125%, 7-4-96 ........................ 1,335 1,335,000
New York - 5.34%
Health Insurance Plan of Greater New York
(Morgan Guaranty Trust Company of New York),
5.55%, 7-3-96 ......................... 21,500 21,500,000
See Notes to Schedule of Investments on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
JUNE 30, 1996
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Pennsylvania - 1.12%
Berks County Industrial Development Authority
(Commercial Facilities Project), Series
B of 1995 (Meridian Bank),
5.55%, 7-3-96 ......................... $ 3,440 $ 3,440,000
Montgomery County Industrial Development
Authority, Taxable Fixed Rate/Variable
Rate Demand Revenue Bonds (410 Horsham
Associates Project), Series of 1995
(Meridian Bank),
5.55%, 7-3-96 ......................... 1,050 1,050,000
Total ................................. 4,490,000
Texas - 5.28%
Metrocrest Hospital Authority, Series 1989A
(The Bank of New York),
5.4689%, 8-1-96 ....................... 15,000 14,929,360
Lower Neches Valley Authority, Industrial
Development Corporation (Texas), Variable
Rate Sewage Facilities Revenue Bonds,
Series 1995A (Taxable) (Mobil Oil Refining
Corporation Project),
5.38%, 7-15-96 ........................ 6,340 6,340,000
Total ................................. 21,269,360
TOTAL MUNICIPAL OBLIGATIONS - 20.75% $ 83,549,360
(Cost: $83,549,360)
UNITED STATES GOVERNMENT OBLIGATIONS
Federal Farm Credit Banks,
4.95%, 3-3-97 ......................... 10,000 9,977,531
Federal Home Loan Banks,
5.65%, 7-3-96 ......................... 14,000 14,000,000
Federal Home Loan Mortgage Corporation,
4.7%, 7-26-96 ......................... 2,000 1,999,016
Federal National Mortgage Association,
5.47%, 9-20-96 ........................ 10,000 9,990,340
Student Loan Marketing Association,
5.54%, 7-2-96 ......................... 15,000 15,000,000
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS - 12.66% $ 50,966,887
(Cost: $50,966,887)
TOTAL INVESTMENT SECURITIES - 102.14% $411,254,117
(Cost: $411,254,117)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (2.14%) (8,615,119)
NET ASSETS - 100.00% $402,638,998
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, 1996
Assets
Investment securities - at value (Note 1) ........ $411,254,117
Cash ............................................ 123,852
Receivables:
Interest ........................................ 2,260,826
Fund shares sold ................................ 455,012
Prepaid insurance premium ........................ 17,142
------------
Total assets .................................. 414,110,949
------------
Liabilities
Payable for Fund shares redeemed ................. 11,112,188
Dividends payable ................................ 158,733
Accrued transfer agency and dividend disbursing .. 157,890
Accrued accounting services fee .................. 5,000
Accrued service fee .............................. 525
Other ............................................ 37,615
------------
Total liabilities ............................. 11,471,951
------------
Total net assets ............................. $402,638,998
============
Net Assets
$0.01 par value capital stock, authorized -- 5,000,000,000;
Class A shares outstanding -- 402,008,903;
Class B shares outstanding -- 630,095
Capital stock ................................... $ 4,026,390
Additional paid-in capital ...................... 398,612,608
------------
Net assets applicable to outstanding
units of capital ............................. $402,638,998
============
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 Fiscal Year Ended JUNE 30, 1996
Investment Income
Interest ......................................... $23,901,600
-----------
Expenses (Note 2):
Transfer agency and dividend disbursing ......... 1,709,514
Investment management fee ....................... 1,686,054
Accounting services fee ......................... 60,000
Custodian fees .................................. 54,208
Audit fees ...................................... 24,034
Legal fees ...................................... 9,098
Distribution fee - Class B ...................... 2,440
Service fee - Class B ........................... 872
Other ........................................... 227,656
-----------
Total expenses ................................ 3,773,876
-----------
Net investment income ........................ 20,127,724
-----------
Net increase in net assets resulting
from operations ........................... $20,127,724
===========
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
June 30,
-------------------------
1996 1995
------------- ------------
Increase in Net Assets
Operations:
Net investment income .............. $20,127,724 $ 15,702,325
------------ ------------
Net increase in net assets
resulting from operations ....... 20,127,724 15,702,325
------------ ------------
Dividends to shareholders
from net investment income:*
Class A ............................ (20,115,214) (15,702,325)
Class B ............................ (12,510) ---
------------ ------------
(20,127,724) (15,702,325)
------------ ------------
Capital share transactions:
Proceeds from sale of shares:
Class A (2,162,044,174 and
845,981,959 shares,
respectively) ...................2,162,044,174 845,981,959
Class B (1,209,660 and
0 shares, respectively) ......... 1,209,660 ---
Proceeds from reinvestment
of dividends:
Class A (19,534,491 and
15,306,048 shares, respectively). 19,534,491 15,306,048
Class B (11,555 and
0 shares, respectively) ......... 11,555 ---
Payments for shares redeemed:
Class A (2,148,369,622 and
809,407,787 shares,
respectively) ...................(2,148,369,622)(809,407,787)
Class B (591,120 and
0 shares, respectively) ......... (591,120) ---
------------ ------------
Net increase in net assets
resulting from capital
share transactions .............. 33,839,138 51,880,220
------------ ------------
Total increase .................. 33,839,138 51,880,220
Net Assets
Beginning of period ................. 368,799,860 316,919,640
------------ ------------
End of period .......................$402,638,998 $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 fiscal year ended June 30,
----------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Net investment
income ........... 0.0487 0.0465 0.0252 0.0251 0.0434
Less dividends
declared ......... (0.0487)(0.0465)(0.0252)(0.0251)(0.0434)
------ ------ ------ ------ ------
Net asset value,
end of period .... $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return........ 5.01% 4.74% 2.55% 2.57% 4.41%
Net assets, end of
period (000
omitted) ......... $402,009$368,800$316,920$350,624$448,127
Ratio of expenses to
average net
assets ........... 0.91% 0.97% 1.04% 1.06% 0.99%
Ratio of net
investment income
to average net
assets ........... 4.89% 4.68% 2.51% 2.56% 4.36%
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
6/30/96*
--------
Net asset value,
beginning of
period ........... $1.00
------
Net investment
income ........... 0.0312
Less dividends
declared ......... (0.0312)
------
Net asset value,
end of period .... $1.00
=======
Total return........ 3.15%
Net assets, end of
period (000
omitted) ......... $630
Ratio of expenses to
average net
assets ........... 1.88%**
Ratio of net
investment income
to average net
assets ........... 3.76%**
*On September 5, 1995, the Fund began offering Class B shares to the
public. Fund shares outstanding prior to that date were designated
Class A shares.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
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 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.
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 $14.3
billion of combined net assets at June 30, 1996) at annual rates of .51% of the
first $750 million of combined net assets, .49% on that amount between $750
million and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45%
between $2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion,
.40% between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion. The Fund accrues and pays
this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
The Fund also pays WARSCO a monthly per account charge 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 June 30, 1996, the Distributor received
$3,312 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 June 30, 1996, the Distributor received $2,980 in deferred sales charges.
The Fund paid Directors' fees of $15,616.
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 investors a choice of
two classes of shares, Class A and Class B, each of which has equal rights as to
assets and voting privileges. 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 June 30, 1996, the results of its operations for the year then ended
and the changes in its net assets and the financial highlights for each of the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 1996 by correspondence with the custodian, provide a reasonable basis for
the opinion expressed above.
Price Waterhouse LLP
Kansas City, Missouri
August 5, 1996
<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.
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Coronado, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
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
- ----------------------------------
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
NUR1010A(6-96)
printed on recycled paper
