United
Government
Securities
Fund, Inc.
ANNUAL
REPORT
----------------------------------------
For the fiscal year ended March 31, 1994
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
MARCH 31, 1994
Dear Shareholder:
This report relates to the operation of United Government Securities Fund,
Inc. for the fiscal year ended March 31, 1994. The following discussion, graphs
and tables provide you with information regarding the Fund's performance during
that period.
In the first part of the Fund's past fiscal year, the bond market extended
its multiple year rally. Bond prices peaked in October, declining thereafter as
fears arose over inflation associated with strong economic growth. In February,
the Federal Reserve Board raised short-term interest rates. Bonds declined
further in value as many leveraged fixed income traders were forced to sell.
Mortgage-backed securities were especially volatile during the Fund's past
fiscal year because many of the more complex mortgage-backed securities were
owned by the leveraged traders.
Despite the volatility in the mortgage-backed securities market, we
continued to invest in the more conservative mortgage-backed securities because
of the stable returns they provide in various market environments. In addition,
we increased the Fund's exposure to mortgage-backed securities in recent months
due to their improved relative value and their higher yields. We also increased
the Fund's holdings in longer-term maturity securities because they offer excess
yield over short-term bonds and inflation. During the last half of the Fund's
fiscal year, we restructured the Fund's portfolio by selling intermediate-term
securities for cash and creating a significant cash reserve to take a more
defensive stance. The result was a fiscal year-end portfolio of longer-term
bonds, mortgage-backed securities and cash equivalents with an average maturity
that was about the same as the bond market as a whole.
The strategies and techniques we applied resulted in the direction of the
Fund's performance during its past fiscal year remaining fairly consistent with
that of the indexes charted on the following page. Those indexes reflect the
performance of securities that generally represent the U.S. Government
securities market (the Lehman Brothers Government Bond Index) and the universe
of funds with similar investment objectives (the Lipper General U.S. Government
Fund Universe Average). The Fund's performance was impacted somewhat by its
portfolio maturity, which was slightly longer than the market average during
part of the decline.
We anticipate that during the Fund's next fiscal year fundamental market
factors, like the high rates of interest offered over inflation, may lead to
some attractive portfolio returns to shareholders. We expect to continue to
manage the Fund's portfolio to seek competitive returns and preserve capital
while holding moderate cash reserves.
We appreciate your continued confidence.
Respectfully,
John E. Sundeen, Jr.
Manager, United Government Securities Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED GOVERNMENT SECURITIES FUND, INC.,
The line graph which appears here is the paper version which was filed on Form
SE on May 24, 1994.
<PAGE>
SHAREHOLDER SUMMARY
- -------------------------------------------------------------
United Government Securities Fund, Inc.
PORTFOLIO STRATEGY:
Long-term U.S. Government OBJECTIVE: High current income
Securities consistent with safety of principal.
(Fund shares
Short-term U.S. Government are not guaranteed by the
Securities U. S. Government or any
government agency.
Intermediate-term U.S. The value of Fund
Government Securities shares fluctuates due to changing
interest rates or other market
conditions and the investor may
experience a loss.)
STRATEGY: Invests primarily in debt securities
issued or guaranteed by the U.S.
Government, or its agencies or
instrumentalities.
FOUNDED: 1984
DIVIDENDS: PAID MONTHLY
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended March 31, 1994
- ----------------------------------------
DIVIDENDS PAID $0.30
=====
NET ASSET VALUE ON
3/31/94 $5.23
3/31/93 5.44
-----
CHANGE PER SHARE ($0.21)
=====
Past performance is not necessarily indicative of future results.
TOTAL RETURN HISTORY
Average Annual Total Return
---------------------------
With Without
Period Sales Load** Sales Load***
- ------ ------------ -------------
1-year period ended 3-31-94 -2.76% 1.56%
5-year period ended 3-31-94 8.78% 9.73%
Period from 4-10-84*
through 3-31-94 9.85% 10.33%
Prior to this date, the Fund was a government securities money market fund.
Performance data quoted represents past performance and is based on deduction of
4.25% sales load on the initial purchase in each of the three periods.
Performance data quoted in this column represents past performance without
taking into account the sales load deducted on an initial purchase.
Investment return and principal value will fluctuate and an investor's shares,
when redeemed, may be worth more or less than their original cost.
<PAGE>
PORTFOLIO HIGHLIGHTS
On March 31, 1994, United Government Securities Fund, Inc. had net assets
totaling $176,648,962 invested in a diversified portfolio.
As a shareholder in United Government Securities Fund, Inc., for every $100 you
had invested on March 31, 1994, your Fund owned:
$32.04 Federal National Mortgage Association Bonds
24.77 United States Treasury
17.17 Government National Mortgage Association Bonds
15.23 Cash and Cash Equivalents and other
U.S. Government Backed Bonds
10.79 Federal Home Loan Mortgage Corporation Bonds
<PAGE>
THE INVESTMENTS OF
UNITED GOVERNMENT SECURITIES FUND, INC.
MARCH 31, 1994
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES
Federal Home Loan Mortgage Corporation:
11.0%, 1-1-2003 ....................... $ 225 $ 238,748
7.5%, 9-1-2007 ........................ 307 315,888
7.0%, 1-15-2021 ....................... 5,000 4,923,400
6.0%, 12-1-2023 ....................... 10,066 9,052,779
6.0%, 1-1-2024 ........................ 5,045 4,536,911
Total ................................. 19,067,726
Federal National Mortgage Association:
8.5%, 8-1-2001 ........................ 4,936 5,148,890
7.2%, 1-10-2002 ....................... 5,000 4,984,350
7.55%, 4-22-2002 ...................... 10,000 10,356,200
7.5%, 4-25-2002 ....................... 3,388 3,423,777
7.0%, 11-25-2003 ...................... 6,720 6,560,400
7.5%, 12-25-2006 ...................... 5,000 5,006,250
6.0%, 6-25-2007 ....................... 5,000 4,557,800
8.0%, 5-25-2019 ....................... 7,000 6,975,920
7.0%, 1-1-2024 ........................ 10,000 9,587,500
Total ................................. 56,601,087
Government National Mortgage Association:
9.5%, 5-20-2014 ....................... 46 48,008
8.5%, 5-15-2023 ....................... 2,204 2,265,099
7.5%, 6-15-2023 ....................... 915 899,485
7.0%, 7-15-2023 ....................... 9,584 9,138,062
7.5%, 7-15-2023 ....................... 3,781 3,715,524
7.5%, 9-15-2023 ....................... 4,971 4,885,720
7.5%, 2-15-2024 ....................... 5,095 5,006,971
9.75%, 11-15-2028 ..................... 2,982 3,212,028
10.5%, 3-15-2029 ...................... 1,043 1,157,999
Total ................................. 30,328,896
United States Treasury:
0.0%, 6-2-94 .......................... 25,000 24,858,250
4.75%, 2-15-97 ........................ 4,000 3,908,120
7.25%, 5-15-2016 ...................... 15,000 14,990,550
Total.................................. 43,756,920
See "Notes to Schedule of Investments" on page 7.
<PAGE>
THE INVESTMENTS OF
UNITED GOVERNMENT SECURITIES FUND, INC.
MARCH 31, 1994
Principal
Amount in
Thousands Value
UNITED STATES GOVERNMENT SECURITIES (Continued)
Miscellaneous United States Government
Backed Securities:
Agency for International Development for
the State of Israel,
8.5%, 4-1-2006 ...................... $ 4,960 $ 5,386,560
National Archives Facility Trust,
8.5%, 9-1-2019 ...................... 4,112 4,460,178
Resolution Funding Corporation,
8.625%, 1-15-2021 ................... 5,000 5,760,950
Synthetic Off-the-Run Treasuries,
Series 1994-2,
6.0%, 2-15-2009 ..................... 6,200 5,518,000
Total ............................... 21,125,688
TOTAL UNITED STATES GOVERNMENT
SECURITIES - 96.73% $170,880,317
(Cost: $173,652,865)
SHORT-TERM SECURITIES - 8.00%
J. P. Morgan Securities, 3.55% Repurchase
Agreement dated 3-31-94, to be repurchased
at $14,130,572 on 4-1-94*.............. 14,125 $ 14,125,000
(Cost: $14,125,000)
TOTAL INVESTMENT SECURITIES - 104.73% $185,005,317
(Cost: $187,777,865)
LIABILITIES, NET OF CASH AND OTHER ASSETS - (4.73%) (8,356,355)
NET ASSETS -- 100.00% $176,648,962
Notes to Schedule of Investments
*Collateralized by $14,572,000 U.S. Treasury Notes, 5.5% due 9-30-97; market
value and accrued interest aggregates $14,417,173.
See Note 1 to financial statements for security valuation and other significant
accounting policies concerning investments.
See Note 3 to financial statements for cost and unrealized appreciation and
depreciation of investments owned for Federal income tax purposes.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1994
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $185,005,317
Cash ............................................ 8,886
Receivables:
Interest ........................................ 1,762,483
Fund shares sold ................................ 717,734
Investment securities sold ...................... 14,161
Prepaid insurance premium ........................ 11,434
------------
Total assets .................................. 187,520,015
------------
Liabilities
Payable for investment securities purchased ...... 9,839,340
Payable for Fund shares redeemed ................. 768,208
Dividends payable ................................ 179,353
Accrued service fee .............................. 37,744
Accrued transfer agency and dividend disbursing .. 27,355
Accrued accounting services fee .................. 3,333
Other ............................................ 15,720
------------
Total liabilities ............................. 10,871,053
------------
Total net assets.............................. $176,648,962
============
Net Assets
$0.01 par value capital stock, authorized --
3,000,000,000; shares outstanding -- 33,799,287
Capital stock ................................... $ 337,993
Additional paid-in capital ...................... 189,026,438
Accumulated undistributed income (loss):
Accumulated undistributed net realized loss on
investment transactions ....................... (9,942,921)
Net unrealized depreciation in value of
investments at end of period ................... (2,772,548)
------------
Net assets applicable to outstanding units
of capital ................................... $176,648,962
============
Net asset value per share (net assets divided by
shares outstanding) .............................. $5.23
Sales load (offering price x 4.25%) ................ .23
-----
Offering price per share (net asset value divided
by 95.75%) ........................................ $5.46
=====
See notes to financial statements.
On sales of $100,000 or more the sales load is reduced
as set forth in the Prospectus.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year ended MARCH 31, 1994
Investment Income
Interest ......................................... $11,634,782
-----------
Expenses (Note 2):
Investment management fee ....................... 777,354
Transfer agency and dividend disbursing ......... 349,317
Service fee ..................................... 94,417
Accounting services fee ......................... 40,000
Audit fees ...................................... 19,127
Custodian fees .................................. 17,833
Legal fees ...................................... 4,274
Other ........................................... 88,114
-----------
Total expenses ................................ 1,390,436
-----------
Net investment income ........................ 10,244,346
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net gain on securities .................. 7,421,700
Realized net loss on options ..................... (393,738)
-----------
Net realized gain on investments................. 7,027,962
-----------
Unrealized depreciation in value of securities during
the period ...................................... (14,724,649)
Unrealized appreciation in value of purchased put
options during the period........................ 307,800
-----------
Net unrealized depreciation in value of investments
during the period ............................. (14,416,849)
-----------
Net loss on investments ....................... (7,388,887)
-----------
Net increase in net assets resulting from
operations ................................. $ 2,855,459
===========
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year ended
March 31,
-------------------------
1994 1993
------------ ------------
Increase (Decrease) in Net Assets
Operations:
Net investment income ...............$ 10,244,346 $ 10,037,126
Realized net gain on investments .... 7,027,962 3,206,653
Unrealized appreciation (depreciation)(14,416,849) 9,535,562
------------ ------------
Net increase in net assets
resulting from operations ........ 2,855,459 22,779,341
------------ ------------
Dividends to shareholders from
net investment income* .............. (10,244,346) (10,037,126)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(7,320,481 and 9,034,345
shares, respectively) ............. 40,234,132 47,565,874
Proceeds from reinvestment of
dividends (1,684,385 and 1,695,678
shares, respectively) ............. 9,234,100 8,931,273
Payments for shares redeemed
(7,773,993 and 5,851,485
shares, respectively) ............. (42,597,526) (30,825,025)
------------ ------------
Net increase in net assets
resulting from capital
share transactions ............... 6,870,706 25,672,122
------------ ------------
Total increase (decrease) ........ (518,181) 38,414,337
Net Assets
Beginning of period .................. 177,167,143 138,752,806
------------ ------------
End of period ........................$176,648,962 $177,167,143
============ ============
Undistributed net investment
income ............................$ --- $ ---
============ ============
*See "Financial Highlights" on page 11.
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended
March 31,
-----------------------------------
1994 1993 1992 1991 1990
----- ----- ----- ----- -----
Net asset value,
beginning of
period ........... $5.44 $5.01 $4.85 $4.76 $4.71
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income .......... .30 .33 .37 .39 .41
Net realized and
unrealized gain
(loss) on
investments ..... (0.21) .43 .16 .09 .05
----- ----- ----- ----- -----
Total from investment
operations ....... .09 .76 .53 .48 .46
----- ----- ----- ----- -----
Less dividends declared
from net investment
income ........... (0.30) (0.33) (0.37) (0.39) (0.41)
----- ----- ----- ----- -----
Net asset value,
end of period .... $5.23 $5.44 $5.01 $4.85 $4.76
===== ===== ===== ===== =====
Total return* ...... 1.56% 15.62% 11.22% 10.68% 10.06%
Net assets, end
of period (000
omitted) .........$176,649$177,167$138,753$118,703$104,045
Ratio of expenses
to average net
assets ........... 0.75% 0.71% 0.75% 0.80% 0.78%
Ratio of net investment
income to average
net assets ....... 5.50% 6.29% 7.40% 8.27% 8.55%
Portfolio turnover
rate ............. 122.62% 81.41%124.51% 187.55%257.18%
Total return calculated without taking into account the sales load deducted
on an initial purchase.
See notes to financial statements.
<PAGE>
UNITED GOVERNMENT SECURITIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1994
NOTE 1 -- Significant Accounting Policies
United Government Securities Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. Security valuation -- The Fund invests in securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities and in options
and futures contracts on those securities. Government debt securities are
valued using a pricing system provided by a major dealer in bonds. Other
securities are valued at the latest sale price thereof on the last business
day of the fiscal period as reported by the principal securities exchange
on which the issue is traded or, if no sale is reported, the average of the
latest bid and asked prices. Short-term debt securities are valued at
amortized cost, which approximates market.
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 are calculated on the
identified cost basis. Interest income is recorded on the accrual basis
and includes differences between cost and face amount on principal
reductions of securities. See Note 3 -- Investment Security Transactions.
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. In
addition, the Fund intends to pay distributions as required to avoid
imposition of excise tax. Accordingly, provision has not been made for
Federal income taxes. See Note 4 -- Federal Income Tax Matters.
D. Dividends and distributions -- All of the Fund's net investment income is
declared and recorded by the Fund as dividends payable on each day to
shareholders of record at the time of the previous determination of net
asset value. During the period ended March 31, 1994, the Fund adopted
Statement of Position 93-2 Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. Accordingly, permanent book and tax
basis differences relating to future shareholder distributions have been
reclassified to additional paid-in capital. As of April 1, 1993, the
cumulative effect of such differences totaling $2,700 was reclassified from
accumulated undistributed net realized gain on investment transactions to
additional paid-in capital. Net investment income, net realized gains and
net assets were not affected by this change.
E. Repurchase Agreements -- Repurchase agreements are collateralized by the
value of the resold securities which, during the entire period of the
agreement, remains at least equal to the value of the loan, including
accrued interest thereon. The collateral for the repurchase agreement is
held by the Fund's custodian bank.
F. Options - See Note 5 - Options
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 $10.9
billion of combined net assets at March 31, 1994) 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 for transfer agency
and dividend disbursement services of $1.0208 for each shareholder account which
was in existence at any time during the prior month and $0.75 for each
shareholder check which was processed, plus $0.30 for each account on which a
dividend or distribution of cash or shares was paid in that month. The Fund
also reimburses W&R and WARSCO for certain out-of-pocket costs.
As principal underwriter for the Fund's shares, W&R received direct and
indirect gross sales commissions (which are not an expense of the Fund) of
$1,325,275, out of which W&R paid sales commissions of $761,558 and all expenses
in connection with the sale of Fund shares, except for registration fees and
related expenses.
On September 28, 1993, shareholders of the Fund approved the adoption of a
12b-1 Service Plan with a maximum fee of .25%. The Plan went into effect
October 1, 1993.
The Fund paid Directors' fees of $7,082.
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 -- Investment Security Transactions
Purchases of U.S. Government securities aggregated $234,162,947 while
proceeds from maturities and sales aggregated $214,387,407. Purchases of short-
term securities aggregated $2,787,155,563 while proceeds from maturities and
sales aggregated $2,780,655,190. Proceeds from sales of other securities
aggregated $14,239,498. There was a net gain of $5,710,186 on the sale of U.S.
Government securities.
For Federal income tax purposes, cost of investments owned at March 31,
1994 was $187,846,615, resulting in net unrealized depreciation of $2,841,298,
of which $3,084,748 related to appreciated securities and $5,926,046 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $7,096,712 during the year ended March 31, 1994, which was entirely offset by
the utilization of capital loss carryovers. Remaining prior year capital loss
carryovers aggregated $9,878,774 and are available to offset future realized
capital gain net income for Federal income tax purposes through March 31, 1996;
$2,484,922 of this amount is available through March 31, 1997; and $759,434 of
this amount is available through March 31, 1998.
NOTE 5 -- Options
Options purchased by the Fund are accounted for in the same manner as
marketable portfolio securities. The cost of portfolio securities acquired
through the exercise of call options is increased by the premium paid to
purchase the call. The proceeds from securities sold through the exercise of
put options are decreased by the premium paid to purchase the put.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Government Securities Fund, 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 Government Securities Fund,
Inc. (the "Fund") at March 31, 1994, the results of its operations for the year
then ended and the changes in its net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at March 31, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE
Kansas City, Missouri
April 29, 1994
- -----------------------------------------------------------------
<PAGE>
INCOME TAX INFORMATION
Dividends are declared and recorded by the Fund on each day the New York
Stock Exchange is open for business. Dividends are paid monthly on the 27th of
the month or on the preceding business day if the 27th is a weekend or holiday.
The dividends are not eligible for the dividend received deduction.
The tax status of dividends paid will be reported to you on Form 1099-DIV
after the close of the applicable calendar year.
Shareholders are advised to consult with their tax adviser concerning the
tax treatment of dividends and distributions from the Fund.
<PAGE>
DIRECTORS
Ronald K. Richey, Birmingham, Alabama, Chairman of the Board
Henry L. Bellmon, Red Rock, Oklahoma
Dodds I. Buchanan, Boulder, Colorado
Jay B. Dillingham, Kansas City, Missouri
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel, III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Rodney O. McWhinney, Vice President
Sharon K. Pappas, Vice President and Secretary
John E. Sundeen, Jr., Vice President
This report is submitted for the general information of the shareholders of
United Government Securities Fund, Inc. It is not authorized for distribution
to prospective investors in the Fund unless accompanied with or preceded by the
United Government Securities Fund, Inc. current prospectus.
To all IRA Planholders:
As required by law, income tax will automatically be withheld from any
distribution or withdrawal from an IRA unless you make a written election not to
have taxes withheld. The election may be made by submitting forms provided by
Waddell & Reed, Inc. which can be obtained from your Waddell & Reed
representative or by submitting Internal Revenue Service form W-4P. Once made,
an election can be revoked by providing written notice to Waddell & Reed, Inc.
If you elect not to have tax withheld you may be required to make payments of
estimated tax. Penalties may be imposed by the IRS if withholding and estimated
tax payments are not adequate.
<PAGE>
The United Group of Mutual Funds
United Cash Management, Inc.
United Government Securities Fund, Inc.
United Bond Fund
United Municipal Bond Fund, Inc.
United Continental Income Fund, Inc.
United Income Fund
United Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Accumulative Fund
United Vanguard Fund, Inc.
United New Concepts Fund, Inc.
United Science and Technology Fund
United International Growth Fund, Inc.
United Gold & Government Fund, Inc.
United Retirement Shares, Inc.
FOR MORE INFORMATION:
Contact your representative, or your
local office as listed on your
Account Statement, or contact:
WADDELL & REED
CUSTOMER SERVICE
6300 Lamar Avenue
P.O. Box 29217
Shawnee Mission, KS 66201-9217
(913) 236-1303
NUR1011A(3-94)
printed on recycled paper
