UNITED
CASH
MANAGEMENT,
INC.
SEMIANNUAL
REPORT
------------------------------------------
For the six months ended December 31, 1997
<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, 1997
Dear Shareholder:
As Waddell & Reed celebrates its 60th anniversary in the financial services
industry, I would like to thank you for your continued confidence in our
products and services. Since we opened our doors in 1937, our goal has been and
continues to be to provide the best service possible to our shareholders. This
commitment is reflected in every area of our organization: starting with your
financial advisor and continuing with our investment management and customer
service people of our affiliated companies.
Your confidence in the success of the products and services offered by Waddell &
Reed and its affiliates is reflected in the growth the Funds have experienced
over our 60 years. Total mutual fund assets under management reached the $1
billion mark in 1961, and over the $5 billion mark in 1985. As of December 31,
1997, mutual fund assets under management totaled more than $20.8 billion.
We look forward to helping you meet the financial goals that are important to
you, now and for many years to come. Should you have any questions about your
account or other financial issues that are important to you, contact your
financial advisor 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, 1997
Principal
Amount in
Thousands Value
BANK OBLIGATIONS
Certificates of Deposit
Domestic - 4.91%
Bankers Trust New York Corp.,
5.95%, 9-9-98 ......................... $11,000 $10,988,219
Morgan Guaranty Trust Company of New York,
5.8%, 7-28-98 ......................... 15,000 14,984,594
Total ................................. 25,972,813
Yankee - 4.73%
Canadian Imperial Bank of Commerce,
5.95%, 6-29-98 ........................ 10,000 9,988,087
Societe Generale- New York,
5.85%, 3-3-98 ......................... 15,000 14,991,870
Total ................................. 24,979,957
Total Certificates of Deposit - 9.64% 50,952,770
Commercial Paper - 1.89%
Banque Nationale de Paris (Canada),
5.55%, 1-5-98 ......................... 10,000 9,993,833
(Cost: $9,993,833)
Notes - 6.25%
Abbey National Treasury Services plc,
5.61%, 2-10-98 ........................ 12,000 11,999,066
Capital One Funding Corporation, Series
1996 A (Bank One, Kentucky, NA),
6.0%, 1-2-98 .......................... 13,037 13,037,000
Wachovia Bank, N.A.,
5.895%, 10-2-98 ....................... 8,000 7,988,856
Total ................................. 33,024,922
TOTAL BANK OBLIGATIONS - 17.78% $ 93,971,525
(Cost: $93,971,525)
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1997
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS
Commercial Paper
Electric, Gas and Sanitary Services - 3.73%
Bay State Gas Co.,
5.62%, 1-5-98 ......................... $ 4,000 $ 3,997,502
Florida Power Corp.,
5.8%, 1-6-98 .......................... 11,640 11,630,623
Questar Corp.,
5.62%, 1-6-98 ......................... 4,100 4,096,800
Total ................................. 19,724,925
Electronic and Other Electric Equipment - 2.82%
Sony Capital Corp.:
5.82%, 1-26-98 ........................ 8,000 7,967,667
5.9%, 2-9-98 .......................... 7,000 6,955,258
Total ................................. 14,922,925
Food and Kindred Products - 3.42%
General Mills, Inc.,
5.5777%, Master Note .................. 18,093 18,093,000
Furniture and Fixtures - 3.78%
Johnson Controls Inc.,
5.86%, 1-5-98 ......................... 20,000 19,986,978
Industrial Machinery and Equipment - 0.67%
Hewlett-Packard Co.,
6.0%, 1-5-98 .......................... 3,530 3,527,647
Nondepository Institutions - 4.95%
Associates Corp. of North America,
5.55%, 1-6-98 ......................... 14,000 13,989,208
General Electric Capital Corp.,
5.75%, 1-23-98 ........................ 2,200 2,192,270
Island Finance Puerto Rico Inc.,
5.62%, 1-21-98 ........................ 10,000 9,968,778
Total ................................. 26,150,256
Personal Services - 2.51%
Block Financial Corp.:
5.57%, 1-7-98 ......................... 1,000 999,072
5.57%, 1-14-98 ........................ 12,273 12,248,314
Total ................................. 13,247,386
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1997
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Petroleum and Coal Products - 0.94%
BP America Inc.,
5.9%, 1-21-98 ......................... $ 5,000 $ 4,983,611
Printing and Publishing - 2.84%
American Greetings Corp.,
5.95%, 1-6-98 ......................... 15,000 14,987,604
Textile Mill Products - 1.25%
Sara Lee Corp.,
5.5727%, Master Note .................. 6,551 6,551,000
Total Commercial Paper - 26.91% 142,175,332
Notes
Auto Repair, Services, and Parking - 1.89%
PHH Corporation,
5.9314%, 6-24-98 ...................... 10,000 10,000,000
Electric, Gas and Sanitary Services - 5.12%
Baltimore Gas and Electric Company,
5.8089%, 3-2-98 ....................... 15,000 15,000,000
PacifiCorp,
8.75%, 2-12-98 ........................ 12,000 12,039,822
Total ................................. 27,039,822
Food and Kindred Products - 1.70%
PepsiCo Inc.,
6.125%, 1-15-98 ....................... 9,000 9,001,616
Real Estate - 0.40%
Trap Rock Industries, Inc. (CoreStates Bank, N.A.),
5.9%, 1-7-98 .......................... 2,125 2,125,000
Security and Commodity Brokers - 2.84%
Merrill Lynch & Co., Inc.:
5.9288%, 2-27-98 ...................... 10,000 10,000,076
6.155%, 6-2-98 ........................ 5,000 5,000,000
Total ................................. 15,000,076
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1997
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Notes (Continued)
Tobacco Products - 0.39%
Philip Morris Cos. Inc.,
9.0%, 5-15-98 ......................... $ 2,000 $ 2,021,225
Total Notes - 12.34% 65,187,739
TOTAL CORPORATE OBLIGATIONS - 39.25% $207,363,071
(Cost: $207,363,071)
MUNICIPAL OBLIGATIONS
California - 8.48%
California Pollution Control Financing
Authority, Environmental Improvement
Revenue Bonds (Air Products and
Chemicals, Inc./Wilmington Facility),
Series 1997A (Taxable),
5.69%, 1-12-98 ........................ 16,000 16,000,000
City of Anaheim, California, Certificates
of Participation (1993 Arena Financing
Project), Municipal Adjustable Rate
Taxable Securities (Credit Suisse),
5.89%, 3-2-98.......................... 16,000 16,000,000
Oakland-Alameda County Coliseum Lease Revenue
Bonds (Oakland Coliseum Project), 1995 Series
B-1 (Canadian Imperial Bank of Commerce),
5.65%, 1-12-98 ........................ 8,000 8,000,000
Community Redevelopment Agency of the City of
Visalia, California, East Visalia Redevelopment
Project, Variable Interest Short Term Adjustable
Securities (National Westminster Bank PLC, San
Francisco Overseas Branch),
6.15%, 1-2-98.......................... 4,830 4,830,000
Total ................................. 44,830,000
Colorado - 1.24%
Panorama Metropolitan District, Arapahoe
County, Colorado (Taxable/Tax Exempt),
Series 1997A (Banque Nationale de Paris,
San Francisco Branch),
6.05%, 12-1-98 ........................ 4,575 4,575,000
Kit Carson County, Colorado, Architectural
Development Revenue Bonds (Taxable), (Midwest
Farms, L.L.C. Project), Series 1997 (Norwest
Bank Minnesota, National Association),
6.1%, 1-2-98 .......................... 2,000 2,000,000
Total ................................. 6,575,000
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1997
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Indiana - 3.03%
City of Whiting, Indiana, Industrial Sewage
and Solid Waste Disposal Revenue Bonds, Taxable
Series 1995 (Amoco Oil Company Project),
5.85%, 1-5-98 ......................... $16,000 $ 16,000,000
Kentucky - 1.52%
City of Bardstown, Kentucky, Taxable Variable
Rate Demand Industrial Revenue Bonds, Series 1994
(R.J. Tower Corporation Project), (Comerica Bank),
6.1%, 1-2-98 .......................... 8,035 8,035,000
Louisiana - 3.03%
Industrial Development Board of the Parish
Of Calcasieu, Inc., Environmental Revenue
Bonds (CITGO Petroleum Corporation Project),
Series 1996 (Taxable),(ABN AMRO Bank N.V.),
5.87%, 1-5-98 ......................... 16,000 16,000,000
Michigan - 0.45%
Crystal Enterprises, Inc., Crystal Mountain Resort,
Taxable Variable Rate Demand Notes, Series 1995
(NBD Bank),
6.1%, 1-2-98 .......................... 2,385 2,385,000
New Jersey - 1.66%
New Jersey Economic Development Authority,
Federally Taxable Variable Rate Demand/
Fixed Rate Revenue Bonds (The Morey
Organization, Inc. Project), Series of 1997
(CoreStates Bank, N.A.):
5.90%, 1-7-98.......................... 3,910 3,910,000
5.90%, 1-7-98.......................... 2,610 2,610,000
5.90%, 1-7-98 ......................... 2,250 2,250,000
Total ................................. 8,770,000
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1997
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
New York - 2.31%
The City of New York, General Obligation Bonds,
Fiscal 1995 Series B, Taxable Adjustable Rate
Bonds (Bayerische Landesbank Girozentrale,
New York Branch),
6.0%, 1-20-98 ......................... $ 8,500 $ 8,500,000
Town of Hempstead, Industrial Development Agency,
Variable Rate Demand Taxable Industrial Development
Revenue Bonds, Series 1996 (1500 Hempstead TPK,
LLC Facility), (The Bank of New York),
6.1%, 1-2-98 .......................... 3,695 3,695,000
Total ................................. 12,195,000
North Carolina - 1.33%
Wake Forest University, Taxable Variable Rate
Demand Bonds, Series 1997 (Wachovia Bank, N.A.),
5.68%, 1-7-98 ......................... 7,000 7,000,000
Ohio - 2.61%
City of Cleveland, Ohio, Subordinated Income Tax,
Variable Rate Refunding Bonds, Series 1994
(Union Bank of Switzerland, New York Branch and
Credit Suisse, New York Branch),
5.98%, 1-8-98 ......................... 13,800 13,800,000
Pennsylvania - 4.23%
Montgomery County Industrial Development
Authority:
Federally Taxable Variable Rate Demand
Revenue Bonds (Neose Technologies,
Inc. Project), Series B of 1997 (CoreStates
Bank, N.A.),
5.9%, 1-7-98 .......................... 8,400 8,400,000
Federally Taxable Variable Rate Demand/
Fixed Rate Revenue Bonds (Collegeville
Inn Project), Series of 1996 (CoreStates Bank,
N.A.),
5.9%, 1-7-98 .......................... 2,500 2,500,000
Taxable Fixed Rate/Variable Rate
Demand Revenue Bonds (410 Horsham
Associates Project), Series of 1995
(Meridian Bank),
5.9%, 1-7-98 .......................... 1,510 1,510,000
See Notes to Schedule of Investments on page 9.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1997
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Pennsylvania (Continued)
Berks County Industrial Development Authority
(Commercial Facilities Project), Series
B of 1995 (Meridian Bank):
5.9%, 1-7-98 .......................... $ 3,840 $ 3,840,000
5.9%, 1-7-98........................... 2,275 2,275,000
Philadelphia Authority for Industrial Development,
Variable/Fixed Rate Federally Taxable
Economic Development Bonds (Mothers Work,
Inc.), Series of 1995 (Meridian Bank),
5.9%, 1-7-98 .......................... 3,825 3,825,000
Total ................................. 22,350,000
South Dakota - 0.47%
Central Plains Clinic Ltd., Floating Rate
Taxable Bonds, Series 1996 (Cooperatieve
Centrale Raiffeisen-Borenleenbank B.A.,
"Rabobank Nederland", New York Branch),
5.98%, 1-23-98 ........................ 2,500 2,500,000
Texas - 5.62%
Metrocrest Hospital Authority, Series 1989A
(The Bank of New York),
5.6376%, 2-3-98........................ 16,000 15,917,315
Gulf Coast Waste Disposal Authority, Pollution
Control Revenue Bonds (Amoco Oil Company
Project), Taxable Series 1995,
5.64%, 1-12-98 ........................ 13,777 13,777,000
Total ................................. 29,694,315
TOTAL MUNICIPAL OBLIGATIONS - 35.98% $190,134,315
(Cost: $190,134,315)
UNITED STATES GOVERNMENT OBLIGATION - 2.84%
Student Loan Marketing Association,
5.73%, 2-17-98......................... 15,000 15,000,000
(Cost: $15,000,000)
TOTAL INVESTMENT SECURITIES - 95.85% $506,468,911
(Cost: $506,468,911)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 4.15% 21,910,599
NET ASSETS - 100.00% $528,379,510
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, 1997
Assets
Investment securities - at value (Note 1) ........ $506,468,911
Cash ............................................ 1,031,918
Receivables:
Fund shares sold ................................ 19,317,593
Interest ........................................ 4,081,386
Prepaid insurance premium ........................ 22,206
Other assets ..................................... 1,693
------------
Total assets .................................. 530,923,707
------------
Liabilities
Payable to Fund shareholders ..................... 2,360,046
Accrued transfer agency and dividend
disbursing (Note 2) ............................. 139,790
Accrued management fee (Note 2) .................. 5,516
Accrued accounting services fee (Note 2) ......... 5,000
Accrued service fee (Note 2) ..................... 1,309
Accrued distribution fee (Note 2) ................ 51
Other ............................................ 32,485
------------
Total liabilities ............................. 2,544,197
------------
Total net assets ............................. $528,379,510
============
Net Assets
$0.01 par value capital stock, authorized -- 5,000,000,000;
Class A shares outstanding - 525,870,966
Class B shares outstanding - 2,508,544
Capital stock ................................... $ 5,283,795
Additional paid-in capital ...................... 523,095,715
------------
Net assets applicable to outstanding
units of capital ............................. $528,379,510
============
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, 1997
Investment Income
Interest and amortization (Note 1B) .............. $14,489,032
-----------
Expenses (Note 2):
Investment management fee ....................... 1,002,463
Transfer agency and dividend disbursing -
Class A ........................................ 993,106
Class B ....................................... 2,729
Custodian fees .................................. 55,328
Accounting services fee ......................... 30,000
Distribution fee - Class B ...................... 10,222
Legal fees ...................................... 9,104
Audit fees ...................................... 6,520
Service fee - Class B ........................... 3,110
Other ........................................... 231,723
-----------
Total expenses ................................ 2,344,305
-----------
Net investment income ........................ 12,144,727
-----------
Net increase in net assets resulting
from operations ........................... $12,144,727
===========
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the For the
six months fiscal year
ended ended
December 31, June 30,
1997 1997
------------ -----------
Increase in Net Assets
Operations:
Net investment income ..............$ 12,144,727 $22,263,978
------------ ------------
Net increase in net assets
resulting from operations ....... 12,144,727 22,263,978
------------ ------------
Dividends to shareholders
from net investment income:*
Class A (12,089,580) (22,155,491)
Class B (55,147) (108,487)
------------ ------------
(12,144,727) (22,263,978)
------------ ------------
Capital share transactions:**
Proceeds from sale of shares:
Class A ..........................1,705,697,3613,102,132,565
Class B .......................... 3,980,244 14,993,673
Proceeds from reinvestment
of dividends:
Class A .......................... 11,859,144 21,289,916
Class B .......................... 52,794 95,253
Payments for shares redeemed:
Class A ..........................(1,705,957,774)(3,011,159,149)
Class B .......................... (5,044,793) (12,198,722)
------------ ------------
Net increase in net assets
resulting from capital
share transactions .............. 10,586,976 115,153,536
------------ ------------
Total increase .................. 10,586,976 115,153,536
Net Assets
Beginning of period ................. 517,792,534 402,638,998
------------ ------------
End of period .......................$528,379,510 $517,792,534
============ ============
Undistributed net investment
income ........................... $--- $---
==== ====
*See "Financial Highlights" on pages 13 - 14.
**The number of shares transacted during the periods corresponds to the
amounts included in this statement because shares are recorded at $1.00 per
share.
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 ----------------------------------
12/31/97 1997 1996 1995 1994 1993
-------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Net investment
income ........... 0.0246 0.0472 0.0487 0.0465 0.0252 0.0251
Less dividends
declared ......... (0.0246)(0.0472)(0.0487)(0.0465)(0.0252)(0.0251)
------ ------ ------ ------ ------ ------
Net asset value,
end of period .... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= =======
Total return........ 2.45% 4.80% 5.01% 4.74% 2.55% 2.57%
Net assets, end of
period (000
omitted) .........$525,871$514,272$402,009$368,800$316,920$350,624
Ratio of expenses to
average net
assets ........... 0.92%* 0.87% 0.91% 0.97% 1.04% 1.06%
Ratio of net
investment income
to average net
assets ........... 4.81%* 4.70% 4.89% 4.68% 2.51% 2.56%
*Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
FINANCIAL HIGHLIGHTS
Class B Shares
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the For the For the
six fiscal period
months year from 9/5/95*
ended ended through
12/31/97 6/30/97 6/30/96
-------- -------- --------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00
------ ------ ------
Net investment
income ........... 0.0207 0.0407 0.0312
Less dividends
declared ......... (0.0207) (0.0407) (0.0312)
------ ------ ------
Net asset value,
end of period .... $1.00 $1.00 $1.00
======= ======= =======
Total return........ 2.04% 4.13% 3.15%
Net assets, end of
period (000
omitted) ......... $2,509 $3,521 $630
Ratio of expenses to
average net
assets ........... 1.69%** 1.48% 1.88%**
Ratio of net
investment income
to average net
assets ........... 4.05%** 4.14% 3.76%**
*Commencement of operations.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
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 397 days. 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 Subchapter M of 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 $17.8
billion of combined net assets at December 31, 1997) 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 December 31, 1997, 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, 1997, the Distributor received $5,194 in deferred sales
charges.
The Fund paid Directors' fees of $8,844, which are included in other
expenses.
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 -- 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.
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>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
United Cash Management, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of United Cash Management, Inc. (the "Fund") as of
December 31, 1997, and the related statements of operations for the six-month
period then ended and changes in net assets for the six-month period then ended
and the year ended June 30, 1997, and the financial highlights for the six-month
period then ended and for each of the years in the five-year period ended June
30, 1997. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
December 31, 1997 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of United Cash
Management, Inc. as of December 31, 1997, the results of its operations, the
changes in its net assets and the financial highlights for the respective stated
periods in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
February 6, 1998
<PAGE>
Shareholder Meeting Results
A special meeting of shareholders of United Cash Management, Inc. was held on
July 24, 1997. The matters voted upon by the shareholders and the resulting
votes for each matter are presented below.
Item 1. To elect the Board of Directors;
Broker
For Withheld Non-Votes*
Henry L. Bellmon 251,735,518 7,330,939 0
Dodds I. Buchanan 252,103,632 6,962,825 0
James M. Concannon 252,047,098 7,019,359 0
John A. Dillingham 252,019,170 7,047,287 0
Linda Graves 251,629,545 7,436,912 0
John F. Hayes 251,839,061 7,227,396 0
Glendon E. Johnson 251,888,751 7,177,706 0
William T. Morgan 251,937,573 7,128,884 0
Ronald K. Richey 250,052,900 9,013,557 0
William L. Rogers 252,043,906 7,022,551 0
Frank J. Ross, Jr. 252,020,014 7,046,443 0
Eleanor B. Schwartz 252,082,705 6,983,752 0
Keith A. Tucker 252,078,802 6,987,655 0
Frederick Vogel III 252,098,752 6,967,705 0
Paul S. Wise 251,801,015 7,265,442 0
Item 2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent accountants for its current fiscal year;
Broker
For Against Abstain Non-Votes*
244,909,856 2,579,58911,577,012 0
Item 3. To approve or disapprove changes to certain of its fundamental
investment policies and restrictions:
3.1 Elimination of Fundamental Restriction Regarding Restricted
Securities
Broker
For Against Abstain Non-Votes*
216,041,036 6,386,37620,370,018 16,269,027
3.2 Modification of Fundamental Restriction Regarding Diversification
of Assets
Broker
For Against Abstain Non-Votes*
216,103,686 6,301,01820,392,726 16,269,027
3.3 Elimination of Fundamental Restriction Regarding Investments in
Issuers Whose Securities are Owned by Certain Persons
Broker
For Against Abstain Non-Votes*
216,059,926 6,367,48620,370,018 16,269,027
3.4 Modification of Fundamental Policy Regarding Loans
Broker
For Against Abstain Non-Votes*
216,087,504 6,339,90820,370,018 16,269,027
Item 4. To modify the Fund's fundamental policy regarding portfolio
maturity.
Broker
For Against Abstain Non-Votes*
213,759,938 8,011,09321,026,399 16,269,027
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the beneficial
owner or other persons entitled to vote nor has discretionary power to vote on a
particular matter.
<PAGE>
To all traditional IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from a traditional 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
James M. Concannon, Topeka, Kansas
John A. Dillingham, Kansas City, Missouri
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Coronado, California
William L. Rogers, Los Angeles, California
Frank J. Ross, Jr., 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
High Income Fund
International Growth Fund
Limited-Term Bond Fund
Municipal Bond Fund
Science and Technology 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
NUR1010SA(12-97)
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