UNITED
CASH
MANAGEMENT,
INC.
SEMIANNUAL
REPORT
-----------------
December 31, 1999
<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, 1999
Dear Shareholder:
We are delighted to share with you this report on your Fund's operations for the
six months ended December 31, 1999.
The second half of 1999 was another extraordinary period for equity markets in
the U.S. and, indeed, around much of the globe, as all major stock market
indices weathered some volatility and finished 1999 solidly above mid-year
levels. Leading the way was the Nasdaq Composite, which is laden with
technology-oriented companies. This index rose a stunning 51.5 percent in the
last six months of 1999 and 85.6 percent for all of 1999, as investors poured
money into stocks of these "new era" companies. The Standard & Poor's 500, the
index most often used to track the performance of the largest U.S. stocks, rose
7.84 percent for the six months ended December 31 and 21.09 percent for the
year. The Dow Jones Industrial Average, which includes 30 of the nation's
largest companies, rose 5.44 percent in the last six months of the year and
26.93 percent for all of 1999. And, finally, the Russell 2000, which tracks the
performance of small-company stocks, rose 10.99 percent for the last six months
of 1999 and 21.17 percent for the year after having significantly trailed other
indices in recent years. Clearly, smaller and mid-sized companies -- especially
those in the technology industry -- were at the center of the market's favor for
the final six months of 1999.
The domestic equity markets' performance was achieved despite conflicting
economic signals. Inflation, as defined by the Consumer Price Index, rose 2.2
percent for all of 1999, up from the prior year's 1.8 percent but still modest
by historical standards. At the same time, though, interest rates increased
considerably over the course of the year and overall economic activity remained
strong. While such factors might ordinarily have undermined a vibrant stock
market, they had no noticeably negative overall effect in 1999. This was due in
part to investors' enormous enthusiasm for technology-related stocks which,
throughout 1999 -- and especially in the last six months of the year -- seemed
impervious to the influence of economic factors. U.S. equity markets were not
alone in turning in strong performances for the second half and all of 1999.
Many foreign equity markets turned in exceptional years as well, buoyed by some
of the same factors that propelled U.S. markets, along with a faster-than-
expected recovery in certain of the Asian markets that had been in economic
crisis in the recent past.
The news from bond markets was much less favorable. Inflationary pressures,
including high levels of consumer spending and very low unemployment, caused
bond yields (which move inversely to bond prices) to rise considerably over the
course of the year. As a result, U.S. bond markets experienced a very difficult
six months and their toughest full year since 1994. The Federal Reserve, which
is committed to keeping inflation in check, raised interest rates three times
during 1999 and, as the year came to a close, the likelihood of additional rate
hikes early in 2000 appeared to be high.
We were pleased with the overall performance of the United Fund family in the
second half of 1999 and for the full year. This report provides in-depth
discussion of the performance of the fund you own. I urge you to read it with
care so you can continue to be a well-informed investor.
While these reports necessarily focus on the second half of 1999, we of course
urge all our investors to keep a long-term perspective. Just as we urge you not
to become unduly concerned if the market moves downward in the near term, we
would urge that you not become too exuberant when it moves higher in similarly
short periods. No one can predict with certainty where markets will go next,
but one thing that remains certain is that a well-thought-out investment plan is
essential. Remember, a plan that is appropriate for you is appropriate
regardless of inevitable market changes. Your Waddell & Reed financial advisor
is indispensable in helping you create an investment program comprising our
time-tested investments. And with that plan in place, you can face any market
condition with confidence.
Respectfully,
Robert L. Hechler
President
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
BANK OBLIGATIONS
Certificates of Deposit - 2.46%
Yankee
Bank Austria - New York,
5.11%, 4-25-00 ........................ $10,000 $ 9,991,304
UBS AG - Stamford, Connecticut,
5.35%, 5-30-00 ........................ 10,000 9,990,801
Total ................................. 19,982,105
Commercial Paper - 6.50%
Abbey National North America:
6.055%, 1-18-00 ....................... 17,500 17,449,962
5.9%, 3-7-00 .......................... 15,000 14,837,750
Dresdner U.S. Finance Inc.,
6.23%, 1-10-00 ........................ 2,000 1,996,885
Toronto-Dominion Holdings USA Inc.,
6.9%, 1-10-00 ......................... 18,500 18,468,088
Total ................................. 52,752,685
Commercial Paper (backed by irrevocable bank
letter of credit) - 1.20%
Banca Serfin S.A. (Barclays Bank PLC),
5.96%, 6-5-00 ......................... 10,000 9,741,733
Notes - 7.88%
Banc One Corp.,
6.5188%, 1-10-00 ...................... 14,000 14,000,000
First Bank of South Dakota (U.S. Bank
National Association),
6.5325, 1-19-00 ....................... 10,000 10,005,338
Harris Trust and Savings Bank,
5.05%, 2-17-00 ........................ 13,000 12,999,133
J.P. Morgan & Co., Incorporated,
6.4288%, 1-6-00 ....................... 10,000 9,998,953
Wells Fargo & Company,
5.31%, 4-3-00 ......................... 17,000 16,996,816
Total ................................. 64,000,240
TOTAL BANK OBLIGATIONS - 18.04% $146,476,763
(Cost: $146,476,763)
CORPORATE OBLIGATIONS
Commercial Paper
Communication - 0.61%
U S WEST Communications Inc.,
7.1%, 1-13-00 ......................... 5,000 4,988,167
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Electric, Gas and Sanitary Services - 6.76%
Allegheny Energy Inc.,
5.82%, 2-28-00 ........................ $ 5,000 $ 4,953,117
Bay State Gas Co.,
6.75%, 1-28-00 ........................ 17,000 16,913,938
Questar Corp.:
5.82%, 1-14-00 ........................ 6,000 5,987,390
5.85%, 1-14-00 ........................ 5,000 4,989,438
5.9%, 1-19-00 ......................... 8,500 8,474,925
6.05%, 1-21-00 ........................ 4,100 4,086,219
6.0%, 1-27-00 ......................... 9,500 9,458,833
Total ................................. 54,863,860
Food and Kindred Products - 5.26%
General Mills, Inc.,
6.345%, Master Note ................... 32,800 32,800,000
Golden Peanut Co.,
5.93%, 2-29-00 ........................ 10,000 9,902,814
Total ................................. 42,702,814
Nondepository Institutions - 5.63%
Associates Capital Corp. PLC (Associates
First Capital Corporation),
6.01%, 1-14-00 ........................ 5,000 4,989,149
Associates Financial Services Co. of
Puerto Rico Inc. (Associates Corp. of
North America),
5.97%, 2-18-00 ........................ 10,000 9,920,400
Associates First Capital B.V. (Associates
First Capital Corporation):
5.8%, 1-10-00 ......................... 6,500 6,490,575
6.0%, 1-10-00 ......................... 9,500 9,485,750
General Electric Capital Corporation,
5.93%, 3-7-00 ......................... 15,000 14,836,925
Total ................................. 45,722,799
Oil and Gas Extraction - 3.62%
Arco British Ltd. (Atlantic Richfield Co.):
6.1%, 1-19-00 ......................... 10,000 9,969,500
6.05%, 1-21-00 ........................ 19,500 19,434,458
Total ................................. 29,403,958
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Commercial Paper (Continued)
Personal Services - 3.92%
Block Financial Corp.:
6.15%, 1-12-00 ........................ $10,000 $ 9,981,208
6.2%, 1-28-00 ......................... 10,000 9,953,500
6.15%, 2-29-00 ........................ 12,000 11,879,050
Total ................................. 31,813,758
Total Commercial Paper - 25.80% 209,495,356
Commercial Paper (backed by irrevocable bank
letter of credit) - 0.61%
Oil and Gas Extraction
Louis Dreyfus Corp. (ABN-AMRO Bank N.V.),
5.96%, 1-31-00 ........................ 5,000 4,975,167
Notes
Amusement and Recreation Services - 1.23%
Walt Disney Company (The),
5.6%, 4-17-00 ......................... 10,000 10,009,754
Communication - 2.46%
AT&T Corp.,
6.1363%, 1-13-00 ...................... 10,000 9,997,880
Tele-Communications, Inc. (AT&T Corp.),
7.375%, 2-15-00 ....................... 10,000 10,012,431
Total ................................. 20,010,311
Electric, Gas and Sanitary Services - 3.32%
Baltimore Gas and Electric Company,
6.11%, 3-1-00 ......................... 27,000 26,999,724
Food Stores - 1.85%
Albertson's Inc.,
6.4425%, 1-14-00 ...................... 15,000 14,996,803
General Merchandise Stores - 0.62%
Wal-Mart Stores, Inc.,
5.65%, 2-1-00 ......................... 5,000 5,001,751
Industrial Machinery and Equipment - 0.55%
AP Knitting Elements, Inc. (Wachovia Bank, N.A.),
6.49%, 1-5-00 ......................... 4,500 4,500,000
Insurance Carriers - 1.05%
Atlantic American Corporation (Wachovia Bank, N.A.),
6.49%, 1-5-00 ......................... 8,500 8,500,000
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OF
UNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
CORPORATE OBLIGATIONS (Continued)
Notes (Continued)
Miscellaneous Retail - 1.17%
Todd Shopping Center, L.L.C., Taxable
Variable Rate Demand Bonds, Series 1999
(Wachovia Bank, N.A.),
6.49%, 1-5-00 ......................... $ 9,500 $ 9,500,000
Nondepository Institutions - 9.71%
Associates Corp. of North America:
6.4103%, 1-31-00 ...................... 8,500 8,497,490
6.375%, 8-15-00 ....................... 2,250 2,252,899
Caterpillar Financial Services Corp.:
5.93%, 6-1-00 ......................... 16,500 16,510,118
8.875%, 6-1-00 ........................ 3,000 3,043,447
Ford Motor Credit Company:
8.375%, 1-15-00 ....................... 9,000 9,010,266
6.375%, 10-6-00 ....................... 4,000 4,006,193
General Electric Capital Corporation,
6.66%, 5-1-00 ......................... 8,700 8,728,162
General Motors Acceptance Corporation:
7.875%, 3-15-00 ....................... 2,700 2,714,444
6.875%, 6-7-00 ........................ 10,000 10,051,514
Transamerica Finance Corporation,
6.215%, 3-2-00 ........................ 14,000 14,000,000
Total ................................. 78,814,533
Real Estate - 0.15%
Trap Rock Industries, Inc. (First Union National Bank),
6.8%, 1-5-00 .......................... 1,225 1,225,000
Total Notes - 22.11% 179,557,876
TOTAL CORPORATE OBLIGATIONS - 48.52% $394,028,399
(Cost: $394,028,399)
MUNICIPAL OBLIGATIONS
California - 5.17%
City of Anaheim, California, Certificates
of Participation (1993 Arena Financing
Project), Municipal Adjustable Rate
Taxable Securities (Credit Suisse),
6.2%, 1-19-00 ......................... 29,000 29,000,000
Oakland-Alameda County Coliseum Authority, Lease
Revenue Bonds (Oakland Coliseum Arena Project),
1996 Series A-1 Variable Rate Lease Revenue Bonds
(Taxable), (Canadian Imperial Bank of Commerce),
6.3%, 1-18-00 ......................... 13,000 13,000,000
Total ................................. 42,000,000
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Colorado - 0.25%
Kit Carson County, Colorado, Architectural
Development Revenue Bonds (Taxable), (Midwest
Farms, L.L.C. Project), Series 1997 (Norwest
Bank Minnesota, National Association),
6.5%, 1-6-00 .......................... $ 2,000 $ 2,000,000
Indiana - 1.50%
City of Whiting, Indiana, Industrial Sewage
and Solid Waste Disposal Revenue Bonds, Taxable
Series 1995 (Amoco Oil Company Project),
6.2%, 1-11-00 ......................... 12,200 12,200,000
Kentucky - 1.48%
City of Bardstown, Kentucky, Taxable Variable Rate
Demand Industrial Revenue Bonds:
Series 1994 (R.J. Tower Corporation Project),
(Comerica Bank),
6.55%, 1-6-00 ......................... 8,035 8,035,000
Series 1995 (R.J. Tower Corporation Project),
(Comerica Bank),
6.55%, 1-6-00 ......................... 4,000 4,000,000
Total ................................. 12,035,000
Louisiana - 10.14%
Industrial Development Board of the Parish
Of Calcasieu, Inc., Environmental Revenue
Bonds (CITGO Petroleum Corporation Project),
Series 1996 (Taxable), (Westdeutsche
Landesbank Girozentrale):
6.0%, 1-14-00 ......................... 20,000 20,000,000
6.0%, 1-20-00 ......................... 13,000 13,000,000
Industrial District No. 3 of the Parish of West
Baton Rouge, State of Louisiana, Variable Rate
Demand Revenue Bonds, Series 1995 (Taxable),
(The Dow Chemical Company Project):
6.25%, 1-26-00 ........................ 21,150 21,150,000
6.07%, 1-21-00 ........................ 10,000 10,000,000
Gulf Coast Industrial Development Authority,
Environmental Facilities Revenue Bonds
(CITGO Petroleum Corporation Project), Taxable
Series 1998 (Royal Bank of Canada),
6.25%, 1-26-00 ........................ 18,200 18,200,000
Total ................................. 82,350,000
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
Massachusetts - 0.48%
Massachusetts Industrial Finance Agency, Taxable
Revenue Bonds (Southcoast Nursing and
Rehabilitation Center Partnership Issue -
Series 1997), (Fleet National Bank),
6.8%, 1-5-00 .......................... $ 3,900 $ 3,900,000
Mississippi - 0.74%
Mississippi Business Finance Corporation,
Taxable Adjustable Mode, Industrial Development
Revenue Bonds (BenchCraft Project), Series 1999
(Wachovia Bank, N.A.),
6.49%, 1-5-00 ......................... 6,000 6,000,000
New Jersey - 1.49%
New Jersey Economic Development Authority,
Federally Taxable Variable Rate Demand/
Fixed Rate Revenue Bonds (The Morey
Organization, Inc. Project), Series of 1997
(First Union National Bank),
6.8%, 1-5-00........................... 12,135 12,135,000
New York - 2.56%
The City of New York, General Obligation Bonds,
Fiscal 1995 Series B, Taxable Adjustable Rate
Bonds (Bayerische Landesbank Girozentrale,
New York Branch),
5.8%, 2-1-00 .......................... 10,000 10,000,000
Dutchess County Industrial Development Agency,
Taxable Variable Rate Demand Civic Facility
Revenue Bonds, Series 1999-C (St. Francis'
Hospital, Poughkeepsie, New York Civic Facility),
(The Bank of New York),
6.5%, 1-6-00 .......................... 4,000 4,000,000
Putnam Hospital Center, Multi-Mode Revenue Bonds,
Series 1999 (The Bank of New York),
6.5%, 1-5-00 .......................... 3,500 3,500,000
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),
6.5%, 1-6-00 .......................... 3,260 3,260,000
Total ................................. 20,760,000
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL OBLIGATIONS (Continued)
North Carolina - 0.22%
Wake Forest University, Taxable Variable Rate
Demand Bonds, Series 1997 (Wachovia Bank, N.A.),
6.49%, 1-5-00 ......................... $ 1,800 $ 1,800,000
Pennsylvania - 2.80%
Montgomery County Industrial Development
Authority, Federally Taxable Variable
Rate Demand Revenue Bonds (Neose
Technologies, Inc. Project), Series
B of 1997 (First Union National Bank),
6.8%, 1-5-00 .......................... 10,960 10,960,000
Berks County Industrial Development Authority
(Commercial Facilities Project), Series
B of 1995 (First Union National Bank),
6.8%, 1-5-00 .......................... 8,145 8,145,000
Philadelphia Authority for Industrial Development,
Variable/Fixed Rate Federally Taxable
Economic Development Bonds (Mother's Work, Inc.),
Series of 1995 (Fleet Financial Group Inc.),
6.75%, 1-5-00 ......................... 3,635 3,635,000
Total ................................. 22,740,000
Texas - 1.52%
Metrocrest Hospital Authority, Series 1989A
(The Bank of New York),
5.63%, 3-7-00 ......................... 12,500 12,370,952
Virginia - 0.76%
Virginia Health Services, Inc., Taxable
Variable Rate Demand Bonds, Series 1998
(Wachovia Bank, N.A.),
6.49%, 1-5-00 ......................... 6,200 6,200,000
Washington - 1.79%
Wenatchee Valley Clinic, P.S.,
Floating Rate Taxable Bonds, Series 1998
(U.S. Bank National Association),
6.5%, 1-6-00 .......................... 14,500 14,500,000
TOTAL MUNICIPAL OBLIGATIONS - 30.90% $250,990,952
(Cost: $250,990,952)
OTHER GOVERNMENT SECURITY - 1.22%
Commercial Paper (backed by irrevocable bank
letter of credit)
Mexico
United Mexican States (Barclays Bank PLC),
6.08%, 2-1-00 ......................... 10,000 $ 9,947,644
(Cost: $9,947,644)
See Notes to Schedule of Investments on page 11.
<PAGE>
THE INVESTMENTS OFUNITED CASH MANAGEMENT, INC.
DECEMBER 31, 1999
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITY - 1.11%
Federal Home Loan Bank,
6.163%, 1-5-00 ........................ $ 9,000 $ 9,000,000
(Cost: $9,000,000)
TOTAL INVESTMENT SECURITIES - 99.79% $810,443,758
(Cost: $810,443,758)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.21% 1,677,064
NET ASSETS - 100.00% $812,120,822
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, 1999
(In Thousands, Except for Per Share Amounts)
Assets
Investment securities - at value (Note 1) ........ $810,444
Cash ............................................ 867
Receivables:
Fund shares sold ................................ 9,220
Interest ........................................ 6,029
Prepaid insurance premium ........................ 21
--------
Total assets .................................. 826,581
--------
Liabilities
Payable to Fund shareholders ..................... 10,637
Dividends payable ................................ 3,545
Accrued transfer agency and dividend
disbursing (Note 2) ............................. 236
Accrued management fee (Note 2) .................. 8
Accrued accounting services fee (Note 2) ......... 7
Accrued service fee (Note 2) ..................... 2
Other ............................................ 25
--------
Total liabilities ............................. 14,460
--------
Total net assets ............................. $812,121
========
Net Assets
$0.01 par value capital stock, authorized -- 5,000,000;
Class A shares outstanding - 800,130
Class B shares outstanding - 2,638
Class C shares outstanding - 160
Waddell & Reed Money Market Class B shares
outstanding - 8,641
Waddell & Reed Money Market Class C shares
outstanding - 552
Capital stock ................................... $ 8,121
Additional paid-in capital ...................... 804,000
--------
Net assets applicable to outstanding
units of capital ............................. $812,121
========
Net asset value, redemption and offering price
per share for all classes ........................ $1.00
=====
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.STATEMENT OF OPERATIONS
For the Six Months Ended DECEMBER 31, 1999
(In Thousands)
Investment Income
Interest and amortization (Note 1B) .............. $20,368
-------
Expenses (Note 2):
Investment management fee ....................... 1,468
Transfer agency and dividend disbursing:
Class A ........................................ 1,279
Class B ....................................... 1
Class C ....................................... ---
Waddell & Reed Class B ........................ 8
Waddell & Reed Class C ........................ ---
Custodian fees .................................. 38
Accounting services fee ......................... 36
Distribution fee:
Class B ....................................... 3
Class C ....................................... ---
Waddell & Reed Class B ........................ 23
Waddell & Reed Class C ........................ 1
Service fee:
Class B ....................................... 1
Class C ....................................... ---
Waddell & Reed Class B ........................ 7
Waddell & Reed Class C ........................ ---
Legal fees ...................................... 20
Audit fees ...................................... 7
Other ........................................... 177
-------
Total expenses ................................ 3,069
-------
Net investment income ........................ 17,299
-------
Net increase in net assets resulting
from operations ........................... $17,299
=======
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.STATEMENT OF CHANGES IN NET ASSETS
(In Thousands)
For the For the
six months fiscal year
ended ended
December 31, June 30,
1999 1999
------------ -----------
Increase in Net Assets
Operations:
Net investment income .............. $ 17,299 $ 28,632
-------- --------
Net increase in net assets
resulting from operations ....... 17,299 28,632
-------- --------
Dividends to shareholders
from net investment income:*
Class A ............................ (17,158) (28,425)
Class B ............................ (17) ---
Class C ............................ (1) ---
Waddell & Reed Class B ............. (119) (207)
Waddell & Reed Class C ............. (4) ---
-------- --------
(17,299) (28,632)
-------- --------
Capital share transactions (Note 3) . 140,353 135,314
-------- --------
Total increase ...................... 140,353 135,314
Net Assets
Beginning of period ................. 671,768 536,454
-------- --------
End of period ....................... $812,121 $671,768
======== ========
Undistributed net investment
income ........................... $--- $---
==== ====
*See "Financial Highlights" on pages 15 - 19.
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 ----------------------------------
12/31/99 1999 1998 1997 1996 1995
-------- ------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Net investment
income ........... 0.0241 0.0455 0.0484 0.0472 0.0487 0.0465
Less dividends
declared ......... (0.0241)(0.0455)(0.0484)(0.0472)(0.0487)(0.0465)
------ ------ ------ ------ ------ ------
Net asset value,
end of period .... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= =======
Total return........ 2.47% 4.67% 4.93% 4.80% 5.01% 4.74%
Net assets, end of
period (in
millions) ........ $800 $667 $533 $514 $402 $369
Ratio of expenses to
average net
assets ........... 0.83%* 0.83% 0.89% 0.87% 0.91% 0.97%
Ratio of net
investment income
to average net
assets ........... 4.72%* 4.54% 4.84% 4.70% 4.89% 4.68%
*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 9/9/99*
through
12/31/99
--------
Net asset value,
beginning of
period ........... $1.00
------
Net investment
income ........... 0.0120
Less dividends
declared ......... (0.0120)
------
Net asset value,
end of period .... $1.00
=======
Total return........ 1.21%
Net assets, end of
period (in
millions) ........ $3
Ratio of expenses to
average net
assets ........... 1.65%**
Ratio of net
investment income
to average net
assets ........... 4.25%**
*Commencement of operations.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.FINANCIAL HIGHLIGHTS
Class C Shares
For a Share of Capital Stock Outstanding
Throughout The Period:
For the
period
from 9/9/99*
through
12/31/99
--------
Net asset value,
beginning of
period ........... $1.00
------
Net investment
income ........... 0.0119
Less dividends
declared ......... (0.0119)
------
Net asset value,
end of period .... $1.00
=======
Total return........ 1.20%
Net assets, end of
period (in
thousands) ....... $160
Ratio of expenses to
average net
assets ........... 1.81%**
Ratio of net
investment income
to average net
assets ........... 4.13%**
*Commencement of operations.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.FINANCIAL HIGHLIGHTS
Waddell & Reed Money Market Class B Shares*
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the For the
six For the fiscal period
months year ended June 30, from 9/5/95*
ended --------------------- through
12/31/99 1999 1998 1997 6/30/96
-------- ------ ------ ------ -------
Net asset value,
beginning of
period ........... $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------
Net investment
income ........... 0.0196 0.0371 0.0403 0.0407 0.0312
Less dividends
declared ......... (0.0196)(0.0371)(0.0403)(0.0407) (0.0312)
------ ------ ------ ------ ------
Net asset value,
end of period .... $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return........ 2.00% 3.79% 4.10% 4.13% 3.15%
Net assets, end of
period (in
millions) ........ $9 $5 $4 $4 $1
Ratio of expenses to
average net
assets ........... 1.70%***1.60% 1.71% 1.48% 1.88%***
Ratio of net
investment income
to average net
assets ........... 3.90%***3.77% 4.03% 4.14% 3.76%***
*Formerly known as United Cash Management Class B shares.
**Commencement of operations.
***Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.FINANCIAL HIGHLIGHTS
Waddell & Reed Money Market Class C Shares
For a Share of Capital Stock Outstanding
Throughout The Period:
For the
period
from 10/7/99*
through
12/31/99
--------
Net asset value,
beginning of
period ........... $1.00
------
Net investment
income ........... 0.0095
Less dividends
declared ......... (0.0095)
------
Net asset value,
end of period .... $1.00
=======
Total return........ 0.96%
Net assets, end of
period (in
thousands) ....... $500
Ratio of expenses to
average net
assets ........... 1.66%**
Ratio of net
investment income
to average net
assets ........... 4.23%**
*Commencement of operations.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED CASH MANAGEMENT, INC.NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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 is
payable by the Fund at the annual rate of 0.40% of net assets. 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
Under the Shareholder Servicing Agreement, with respect to Class A, Class
B, Class C and Waddell & Reed Money Market B shares, the Fund pays WARSCO a
monthly fee of $1.75 for each shareholder account which was in existence at any
time during the prior month and, for Class A shares, $.75 for each shareholder
check it processes. For Waddell & Reed Money Market C shares, the Fund pays
WARSCO a monthly fee equal to 1/12th of .15 of 1% of the average daily net
assets for the preceding month. The Fund also reimburses W&R and WARSCO for
certain out-of-pocket costs.
The Fund has adopted 12b-1 plans for Class B, Class C, Waddell & Reed Money
Market B and Waddell & Reed Money Market C shares. Under the plans, the Fund
pays W&R daily a distribution fee not to exceed, on an annual basis, 0.75% of
the net assets of the affected class and a service fee not to exceed, on an
annual basis, 0.25% of the net assets of the affected class. During the period
ended December 31, 1999, W&R paid no sales commissions.
A contingent deferred sales charge (``CDSC'') may be assessed against a
shareholder's redemption amount of Class B, Class C, Waddell & Reed Money Market
B and Waddell & Reed Money Market C shares, respectively, and paid to W&R. The
purpose of the deferred sales charge is to compensate W&R for the costs incurred
by W&R in connection with the sale of Fund shares.
With respect to Class B shares, the amount of the CDSC 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 first calendar year of investment, 5%; the second
calendar year, 4%; the third calendar year, 3%; the fourth calendar year, 3%;
the fifth calendar year, 2%; the sixth calendar year, 1% and thereafter, 0%.
For Waddell & Reed Money Market Class B 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 next calendar year after the calendar year of investment, 3%;
the third calendar year, 2%; the fourth 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.
If Class C shares or Waddell & Reed Money Market Class C shares are sold
within 12 months of buying these shares, a 1% CDSC will be imposed. The
deferred sales charge will not be imposed on shares representing payment of
dividends or distributions during the deferred sales charge period. During the
period ended December 31, 1999, the Distributor received $330, $178, $6,419 and
$23 in deferred sales charges from Class B, Class C, Waddell & Reed Money Market
B and Waddell & Reed Money Market C shares, respectively.
The Fund paid Directors' fees of $13,158, which are included in other
expenses.
W&R is a subsidiary of Waddell & Reed Financial, Inc., a holding company,
and a direct subsidiary of Waddell & Reed Financial Services, Inc., a holding
company.
NOTE 3 -- Multiclass Operations
The Fund offers five classes of shares: Class A, Class B, Class C, Waddell
& Reed Money Market B and Waddell & Reed Money Market C. Each class represents
an interest in the same assets of the Fund and differs as follows: each class
of shares has exclusive voting rights on matters appropriately limited to that
class; Class B, Class C, Waddell & Reed Money Market B and Waddell & Reed Money
Market C shares are subject to a CDSC and to an ongoing distribution and service
fee; Class B shares that have been held by a shareholder for seven years will
convert automatically, at the end of the seventh calendar year following the
first year of purchase, to Class A shares of the Fund, and such conversion will
be made, without charge or fee, on the basis of the relative net asset values of
the two classes; each class may bear differing amounts of certain class-specific
expenses; and each class has a separate exchange privilege. A comprehensive
discussion of the terms under which shares of each class are offered is
contained in the Prospectus and the Statement of Additional Information for the
Fund.
Income, non-class specific expenses, and realized and unrealized gains and
losses are allocated daily to each class of shares based on the value of their
relative net assets as of the beginning of each day adjusted for the prior day's
capital share activity.
Transactions in capital stock are summarized below. Dollar amounts are in
thousands. The number of shares transacted during the periods corresponds to the
dollar amounts included in this table because shares are recorded at $1.00 per
share.
For the For the
six months fiscal year
ended ended
December 31, June 30,
1999 1999
------------ ------------
Value issued from sale
of shares:
Class A ............ $1,708,736 $2,528,520
Class B ............. 3,810 ---
Class C ............. 277 ---
Waddell & Reed Class B 7,888 12,293
Waddell & Reed Class C 740 ---
Value issued from
reinvestment of dividends:
Class A ............ 16,150 27,258
Class B ............. 16 ---
Class C ............. 1 ---
Waddell & Reed Class B 119 195
Waddell & Reed Class C 4 ---
Value redeemed:
Class A ............ (1,591,911) (2,421,463)
Class B ............. (1,188) ---
Class C ............. (118) ---
Waddell & Reed Class B (3,979) (11,489)
Waddell & Reed Class C (192) ---
-------- ----------
Increase in
outstanding capital $140,353 $ 135,314
======== ==========
<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, 1999, and the related statement of operations for the six-month
period then ended, the statements of changes in net assets for the six-month
period then ended and the fiscal year ended June 30, 1999, and the financial
highlights for the six-month period ended December 31, 1999, and for each of the
five fiscal years in the period ended June 30, 1999. 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 as of
December 31, 1999, 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of United
Cash Management, Inc. as of December 31, 1999, the results of its operations for
the six-month period then ended, the changes in its net assets for the six-month
period then ended and the fiscal year ended June 30, 1999, and the financial
highlights for the six-month period ended December 31, 1999, and for each of the
five fiscal years in the period ended June 30, 1999, in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
February 4, 2000
<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.
<PAGE>
DIRECTORS
Keith A. Tucker, Overland Park, Kansas, Chairman of the Board
James M. Concannon, Topeka, Kansas
John A. Dillingham, Kansas City, Missouri
David P. Gardner, San Mateo, California
Linda K. Graves, Topeka, Kansas
Joseph Harroz, Jr., Norman, Oklahoma
John F. Hayes, Hutchinson, Kansas
Robert L. Hechler, Overland Park, Kansas
Henry J. Herrmann, Overland Park, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Coronado, California
Ronald C. Reimer, Mission Hills, Kansas
Frank J. Ross, Jr., Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Frederick Vogel III, Milwaukee, Wisconsin
OFFICERS
Robert L. Hechler, President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Kristen A. Richards, Vice President and Secretary
Daniel C. Schulte, Vice President
Mira Stevovich, Vice President
<PAGE>
The United Group of Mutual Funds
United Accumulative Fund
United Asset Strategy Fund, Inc.
United Bond Fund
United Cash Management, Inc.
United Continental Income Fund, Inc.
United Government Securities Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Income Fund
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 Science and Technology Fund
United Small Cap Fund, 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 - (913) 236-1303
For Yield Information Only
Toll-Free - (800)366-4953
Local - (913) 236-1307
Our INTERNET address is:
http://www.waddell.com
NUR1010SA(12-99)
printed on recycled paper
