<PAGE>
United
Municipal
High Income
Fund, Inc.
ANNUAL
REPORT
--------------------------------------------
For the fiscal year ended September 30, 1995
<PAGE>
FUND MANAGER'S LETTER
- -----------------------------------------------------------------
SEPTEMBER 30, 1995
Dear Shareholder:
This report relates to the operation of your Fund for the fiscal year ended
September 30, 1995. The discussion, graphs and tables contained in this report
will provide you with information regarding the Fund's performance during that
period.
Various economic and political events affected the Fund's performance during the
past fiscal year. During the first two quarters of the fiscal year, the Federal
Reserve increased short-term interest rates several times to preempt possible
inflationary tendencies resulting from the strengthening economy. However,
during the latter stages of the second quarter, the economy entered a period of
slower growth prompting the Federal Reserve to slightly lower the short-term
federal funds rate. On the political front, the newly empowered Republican
party promised, among other things, to balance the federal budget and to
restructure the federal tax laws.
Consistent with the primary objective of the Fund to maximize tax-free income,
we remained fully invested in long-term municipal bonds during the past fiscal
year. The Fund continued to emphasize bonds with comparatively higher yields.
We sold lower-yielding bonds to purchase newly issued bonds with higher yields
as they became available.
The strategies and techniques we applied resulted in the direction of the Fund's
performance remaining fairly consistent with that of the indexes charted on the
following page. Those indexes reflect the performance of securities that
generally represent the municipal bond market (the Lehman Brothers Municipal
Bond Index) and the universe of funds with similar investment objectives (the
Lipper High Yield Municipal Bond Fund Universe Average).
We expect that inflation will remain low and that the economy will continue its
slow pace of growth well into 1996. We also expect a modest decline in interest
rates during the next year. Accordingly, we intend to shift Fund assets from
bonds tied to shorter maturity calls to bonds that have the potential to rise in
value during periods of declining interest rates.
Thank you for your continued confidence.
Respectfully,
John M. Holliday
Manager, United Municipal High Income Fund
<PAGE>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
UNITED MUNICIPAL HIGH INCOME FUND, INC.,
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX,
AND THE LIPPER HIGH YIELD MUNICIPAL BOND FUND UNIVERSE AVERAGE
Average Annual Total Return*
1 year 5 years 9+ years**
5.93% 8.51 % 8.32%
Lipper
High Yield
United Lehman Municipal
MunicipalBrothers Bond
High IncomeMunicipal Fund
Fund, Bond Universe
Inc. Index Average
------------------ ----------
01/21/86 Purchase $9,575 10,000 10,000
09/30/86 10,543 11,119 10,992
09/30/87 10,920 11,175 11,032
09/30/88 11,713 12,648 12,338
09/30/89 13,046 13,746 13,490
09/30/90 13,814 14,681 14,167
09/30/91 15,521 16,617 15,691
09/30/92 17,240 18,354 17,216
09/30/93 19,615 20,693 19,345
09/30/94 19,624 20,188 18,903
09/30/95 21,711 22,447 20,695
==== United Municipal High Income Fund, Inc. -- $21,711***
++++ Lehman Brothers Municipal Bond Index -- $22,447
---- Lipper High Yield Municipal Bond Fund Universe Average - $20,695
Past performance is not predictive of future performance. Indexes are
unmanaged.
*Performance data quoted represents past performance and is based on
deduction of a 4.25% sales load on the initial purchase in each of the three
periods. Investment return and principal value will fluctuate and an
investor's shares, when redeemed, may be worth more or less than their
original cost.
**1/21/86 (inception) through 9/30/95. For the period from January 6, 1986
through September 30, 1986, Waddell & Reed, Inc. voluntarily waived any
management and shareholder service fees and paid daily Fund expenses above
1/365th of 0.75 of 1% of the Fund's net assets. The 9+ years total return
shown above would have been slightly lower without this assumption of
expenses.
***The value of the investment in the Fund is impacted by the sales load at the
time of the investment and by the ongoing expenses of the Fund.
<PAGE>
SHAREHOLDER SUMMARY
- --------------------------------------------------------------
United Municipal High Income Fund, Inc.
PORTFOLIO STRATEGY:
Ordinarily, at least 75% OBJECTIVE: High level of income
medium and lower rated which is not
Municipal Bonds subject to Federal income taxation.
(Income may be
Generally less than 20% subject to state and
Taxable Debt Securities local taxes. A portion may be subject
to Federal
No more than 25% in taxes, including
industrial revenue alternative minimum tax.)
bonds of any one industry
STRATEGY: Invests primarily in municipal bonds
(debt securities the interest on which
is generally exempt from Federal income
tax) in the medium-and lower-rated
categories as classified by recognized
rating agencies. (May invest in
securities subject to repurchase
agreements. May invest in certain
futures.)
FOUNDED: 1986
SCHEDULED DIVIDEND FREQUENCY: MONTHLY
<PAGE>
PERFORMANCE SUMMARY
PER SHARE DATA
For the Fiscal Year Ended September 30, 1995
- --------------------------------------------
DIVIDENDS PAID $0.35
=====
CAPITAL GAINS DISTRIBUTION $0.02
=====
NET ASSET VALUE ON
9/30/95 $5.27 adjusted to: $5.29(A)
9/30/94 5.12
-----
CHANGE PER SHARE $0.17
=====
(A) This number includes the capital gains distribution of $0.02 paid in
December 1994 added to the actual net asset value on September 30, 1995.
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 9-30-95 5.93% 10.63%
5-year period ended 9-30-95 8.51% 9.46%
Period from 1-21-86*
through 9-30-95 8.32% 8.81%
Initial public offering of the 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 September 30, 1995, United Municipal High Income Fund, Inc. had net assets
totaling $382,804,929 invested in a diversified portfolio.
As a shareholder of United Municipal High Income Fund, Inc., for every $100 you
had invested on September 30, 1995, your Fund owned:
$21.95 Other Municipal Bonds
17.75 Life Care/Nursing Center Revenue Bonds
14.46 Hospital Revenue Bonds
12.54 Industrial Development Revenue Bonds
8.71 Airport Revenue Bonds
7.62 Water and Sewer Revenue Bonds
5.07 Resource Recovery Bonds
2.95 General Obligation Bonds
3.87 Housing Revenue Bonds
3.40 Lease/Certificates of Participation Bonds
1.68 Cash and Cash Equivalents
1995 TAX YEAR TAXABLE EQUIVALENT YIELDS*
- --------------------------------------------------------------------------------
If your Taxable Income is:
Your
Marginal Equivalent Tax Free Yields
Joint Single Tax -----------------------------------
Return ReturnBracket Is 5% 6% 7% 8%
- -----------------------------------------------------------------
$ 0- 39,000$ 0- 23,250 15% 5.88 7.06 8.24 9.41
$ 39,001- 94,250$ 23,251- 56,550 28% 6.94 8.33 9.72 11.11
$ 94,251-143,600$ 56,551-117,950 31% 7.25 8.70 10.14 11.59
$143,601-256,500$117,951-256,500 36% 7.81 9.38 10.94 12.50
$256,501 and above$256,501 and above 39.6% 8.28 9.93 11.59 13.25
Above table is for illustration only and does not represent the actual
performance of United Municipal High Income Fund, Inc.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS
ALABAMA - 1.09%
The Medical Clinic Board of the City of
Birmingham-North, Revenue Bonds, Series
1991-A (Carraway Methodist Hospitals Project),
7.5%, 7-1-2015 ........................ $ 2,000 $ 2,117,500
The Medical Clinic Board of the City of Ozark,
Alabama, First Mortgage Revenue Bonds (United
States Health & Housing Foundation, Inc.
Project), Series 1988-A,
10.0%, 10-1-2015 ...................... 1,000 1,051,250
The Marshall County Health Care Authority,
Hospital Revenue Refunding Bonds,
Series 1992 (Guntersville-Arab
Medical Center),
7.0%, 10-1-2013 ....................... 1,000 1,003,750
Total ................................. 4,172,500
ALASKA - 0.93%
Alaska Industrial Development and Export
Authority, Refunding Revenue Bonds, Series
1989 (American President Lines Project),
8.0%, 11-1-2009 ....................... 1,820 1,988,350
Anchorage Parking Authority, Lease Revenue
Refunding Bonds, Series 1993 (5th Avenue
Garage Project),
6.75%, 12-1-2008 ...................... 1,500 1,571,250
Total ................................. 3,559,600
ARIZONA - 0.55%
Hayden-Winkelman Unified School District
No. 41 of Gila County, Arizona, Capital
Appreciation Refunding Bonds, Series 1995,
0.0%, 7-1-2010 ........................ 6,145 2,120,025
ARKANSAS - 0.45%
The Fayetteville Public Facilities Board,
Refunding and Improvement Revenue Bonds,
Series 1989A (Butterfield Trail Village
Project),
9.5%, 9-1-2014 ........................ 1,600 1,702,000
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
CALIFORNIA - 5.89%
Foothill/Eastern Transportation Corridor
Agency, Toll Road Revenue Bonds, Series
1995A,
0.0%, 1-1-2013 (A) .................... $11,925 $ 6,424,594
San Joaquin Hills Transportation Corridor
Agency (Orange County, California):
Junior Lien Toll Road Revenue Bonds,
0.0%, 1-1-2002 ........................ 2,755 1,814,856
Senior Lien Toll Road Revenue Bonds,
0.0%, 1-1-2011 (A) .................... 2,500 1,790,625
Hi-Desert Memorial Hospital District,
Revenue Bonds, Series 1994A,
8.0%, 10-1-2019 ....................... 3,000 3,101,250
Huntington Beach Public Financing Authority
(Orange County, California), 1992 Revenue
Bonds (Huntington Beach Redevelopment
Projects),
7.0%, 8-1-2024 ........................ 3,000 2,917,500
Certificates of Participation (1991 Capital
Improvement Project), Bella Vista Water
District (California),
7.375%, 10-1-2017 ..................... 1,500 1,597,500
Sacramento Cogeneration Authority,
Cogeneration Project Revenue Bonds
(Procter & Gamble Project),
1995 Series,
6.5%, 7-1-2014 ........................ 1,500 1,518,750
Carson Redevelopment Agency (California),
Redevelopment Project Area No. 2,
Refunding Tax Allocation Bonds,
Series 1993,
6.0%, 10-1-2016 ....................... 1,500 1,402,500
Kings County Waste Management Authority,
Solid Waste Revenue Bonds, Series 1994
(California),
7.2%, 10-1-2014 ....................... 1,000 1,052,500
Inglewood Public Financing Authority,
1992 Revenue Bonds, Series C (In-Town,
Manchester-Prairie and North Inglewood
Industrial Park Redevelopment Projects-
Housing Set-Aside Loans),
7.0%, 5-1-2022 ........................ 890 917,812
Total ................................. 22,537,887
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
COLORADO - 7.70%
City and County of Denver, Colorado,
Airport System Revenue Bonds:
Series 1991A,
8.75%, 11-15-2023 ..................... $ 6,000 $ 6,922,500
Series 1994A,
7.5%, 11-15-2023 ...................... 3,000 3,202,500
Colorado Health Facilities Authority,
Hospital Revenue Bonds (PSL Healthcare
System Project), Series 1991B,
8.5%, 2-15-2021 ....................... 3,000 3,555,000
City and County of Denver, Colorado,
Revenue Bonds (Jewish Community Centers
of Denver Project), Series 1994:
8.25%, 3-1-2024 ....................... 2,390 2,461,700
7.875%, 3-1-2019 ...................... 815 840,469
Upper Eagle Regional Water Authority,
Eagle County, Colorado, Water Refunding
and Improvement Revenue Bonds,
Series 1995,
6.7%, 12-1-2018 ....................... 2,400 2,403,000
City of Colorado Springs, Colorado,
Airport System Revenue Bonds, Series 1992A,
7.0%, 1-1-2022 ........................ 2,200 2,285,250
City of Central, Gilpin County, Colorado:
General Obligation Water Bonds,
Series 1992,
7.5%, 12-1-2012 ....................... 1,500 1,741,875
Water Revenue Bonds, Series 1991,
8.625%, 9-15-2011 ..................... 500 534,375
Pitkin County, Colorado, Lease Purchase
Agreement, Certificates of Participation
(County Administration Building Project),
Series 1991,
7.4%, 10-1-2011 ....................... 1,500 1,614,375
Mountain Village Metropolitan District, San
Miguel County, Colorado, General
Obligation Refunding Bonds, Series 1992,
8.1%, 12-1-2011 ....................... 1,435 1,522,894
School District No. 20, El Paso County,
Colorado, General Obligation Refunding
Bonds, Series 1993A, Capital
Appreciation Bonds,
0.0%, 6-15-2008 ....................... 2,600 1,264,250
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
COLORADO (Continued)
Arapahoe Water and Sanitation District,
Arapahoe County, Colorado, General
Obligation Refunding Bonds, Series 1988A:
Prerefund Bonds,
9.25%, 12-1-2013 ...................... $ 850 $ 978,563
Unrefunded Bonds,
9.25%, 12-1-2013 ...................... 150 159,563
Total ................................. 29,486,314
CONNECTICUT - 1.59%
Connecticut Development Authority, First
Mortgage Gross Revenue Health Care
Project Bonds, Church Homes, Inc.:
Congregational Avery Heights Project -
1990 Series,
9.0%, 4-1-2020 ........................ 2,500 2,693,750
Congregational Avery Nursing Facilities
Project - 1991 Series,
8.5%, 4-1-2021 ........................ 1,490 1,573,813
Eastern Connecticut Resource Recovery
Authority, Solid Waste Revenue Bonds
(Wheelabrator Lisbon Project),
Series 1993A,
5.5%, 1-1-2014 ........................ 2,000 1,835,000
Total ................................. 6,102,563
DISTRICT OF COLUMBIA - 1.34%
Certificates of Participation, Series 1993,
District of Columbia,
7.3%, 1-1-2013 ........................ 3,000 3,022,500
District of Columbia Revenue Bonds
(National Public Radio Issue),
Series 1992,
7.625%, 1-1-2013 ...................... 2,000 2,092,500
Total ................................. 5,115,000
FLORIDA - 3.42%
City of Atlantic Beach, Florida,
Variable Rate Demand,
Improvement and Refunding Revenue Bonds,
Series 1994B (Fleet Landing Project),
4.8%, 10-1-2024 ....................... 3,700 3,700,000
Lake County, Florida, Resource Recovery
Industrial Development Refunding Revenue
Bonds (NRG/Recovery Group Project),
Series 1993A,
5.95%, 10-1-2013 ...................... 2,500 2,353,125
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
FLORIDA (Continued)
Dade County Industrial Development Authority,
Industrial Development Revenue Bonds,
Series 1995 (Miami Cerebral Palsy
Residential Services, Inc. Project),
8.0%, 6-1-2022 ........................ $ 2,000 $ 1,997,500
Highlands County (Florida), Industrial
Development Authority, Industrial
Development Revenue Refunding Bonds
(Beverly Enterprises - Florida, Inc.
Project), Series 1991,
9.25%, 7-1-2007 ....................... 1,435 1,591,056
City of Fort Walton Beach, First Mortgage
Industrial Development Revenue Bonds,
Series 1986 (Ft. Walton Beach Ventures,
Inc. Project),
10.5%, 12-1-2016 ...................... 1,335 1,388,400
City of Winter Garden, Florida, Industrial
Development Revenue Refunding Bonds
(Beverly Enterprises - Florida, Inc. Project),
Series 1991,
8.75%, 7-1-2012 ....................... 1,000 1,092,500
The Lee County (Florida) Industrial
Development Authority, Economic Development
Revenue Refunding Bonds (Encore Nursing
Center Partners, Ltd.-85 Project),
Series 1992,
8.125%, 12-1-2007 ..................... 900 947,250
Total ................................. 13,069,831
GEORGIA - 1.52%
Hospital Authority of Savannah, Revenue
Refunding and Improvement Bonds
(Candler Hospital), Series 1992,
7.0%, 1-1-2011 ........................ 3,180 3,231,675
Tri-City Hospital Authority, Georgia,
Revenue Certificates, Series 1993,
6.375%, 7-1-2016 ...................... 2,750 2,591,875
Total ................................. 5,823,550
GUAM - 0.79%
Guam Airport Authority, General Revenue
Bonds, 1993 Series B,
6.6%, 10-1-2010 ....................... 3,000 3,037,500
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
IDAHO - 0.57%
Idaho Health Facilities Authority, Hospital
Revenue Refunding Bonds, Series 1992
(IHC Hospitals, Inc.), Indexed Inverse
Floating Rate Securities,
7.6%, 2-15-2021 (B) ................... $ 2,000 $ 2,182,500
ILLINOIS - 6.23%
Village of Sauget, Illinois, Variable
Rate Demand Pollution Control Revenue
Refunding Bonds (Monsanto Company Project):
Series 1993,
4.05%, 5-1-2028 ....................... 2,000 2,000,000
Series 1992,
4.4%, 9-1-2022 ........................ 1,000 1,000,000
City of Hillsboro, Montgomery County,
Illinois, General Obligation Bonds
(Alternate Revenue Source), Series 1991,
7.5%, 12-1-2021 ....................... 2,640 2,831,400
City of Chicago, Chicago-O'Hare
International Airport, Special Facility
Revenue Refunding Bonds, Series 1994
(American Airlines, Inc. Project),
8.2%, 12-1-2024 ....................... 2,400 2,802,000
Illinois Health Facilities Authority,
Revenue Bonds, Series 1992A
(Fairview Obligated Group Project),
8.75%, 10-1-2002 ...................... 2,500 2,706,250
Illinois Development Finance Authority
Revenue Bonds, Series 1993C (Catholic
Charities Housing Development
Corporation Project),
6.1%, 1-1-2020 ........................ 2,500 2,381,250
Village of Lansing, Illinois, Landings
Redevelopment Project Area, Tax Increment
Refunding Revenue Bonds (Limited Sales
Tax Pledge), Series 1992,
7.0%, 12-1-2008 ....................... 2,000 2,152,500
Village of Hanover Park, Cook and DuPage
Counties, Illinois, First Mortgage
Revenue Bonds, Series 1989 (Windsor
Park Manor Project),
9.5%, 12-1-2014 ....................... 2,000 2,062,500
City of Blue Island, Cook County, Illinois,
Golf Course Revenue Bonds (Utility Tax
Pledge), Series 1992,
7.375%, 5-1-2014 ...................... 2,000 2,017,500
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
ILLINOIS (Continued)
Village of Hodgkins, Cook County, Illinois,
Tax Increment Revenue Refunding Bonds,
Series 1995A,
7.625%, 12-1-2013 ..................... $ 1,750 $ 1,756,562
Village of Bourbonnais, Kankakee County,
Illinois, Sewerage Revenue Bonds,
Series 1993,
7.25%, 12-1-2012 ...................... 1,085 1,132,469
City of Eureka, Woodford County, Illinois,
General Obligation Refunding Bonds
(Alternate Revenue Source), Series 1993,
6.25%, 7-1-2013 ....................... 1,000 1,005,000
Total ................................. 23,847,431
INDIANA - 3.89%
Indiana Health Facility Financing Authority,
Hospital Revenue Bonds, Series 1990
(Hancock Memorial Hospital Project),
8.3%, 8-15-2020 ....................... 3,000 3,202,500
Indianapolis Airport Authority, Special
Facilities Revenue Bonds:
Series 1994 (Federal Express
Corporation Project),
7.1%, 1-15-2017 ....................... 1,500 1,586,250
Series 1995 A (United Air Lines, Inc.,
Indianapolis Maintenance Center Project),
6.5%, 11-15-2031 ...................... 1,500 1,462,500
City of East Chicago, Indiana,
Pollution Control:
Refunding Revenue Bonds, Inland
Steel Company Project No. 10,
Series 1993,
6.8%, 6-1-2013 ........................ 2,000 1,997,500
Revenue Bonds, Inland Steel
Company Project No. 5,
Series 1977,
5.75%, 2-1-2007 ....................... 1,000 942,500
Indiana Development Finance Authority Pollution
Control Refunding Revenue Bonds (Inland Steel
Company Project No. 12), Series 1995,
6.85%, 12-1-2012 ...................... 2,500 2,531,250
City of Carmel, Indiana, Retirement Rental
Housing Revenue Refunding Bonds (Beverly
Enterprises - Indiana, Inc. Project),
Series 1992,
8.75%, 12-1-2008 ...................... 1,500 1,644,375
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
INDIANA (Continued)
Indiana Health Facility Financing
Authority, Hospital Revenue Bonds,
Series 1992 (Fayette Memorial Hospital
Project),
7.2%, 10-1-2022 ....................... $ 1,000 $ 988,750
Indiana Housing Finance Authority, Residential
Mortgage Bonds, 1988 Series R-A,
0.0%, 1-1-2013 ........................ 2,245 519,156
Total ................................. 14,874,781
IOWA - 0.36%
City of Ottumwa, Iowa, Hospital Facility
Revenue Refunding and Improvement Bonds,
Series 1993 (Ottumwa Regional Health
Center, Incorporated),
6.0%, 10-1-2018 ....................... 1,550 1,381,437
KANSAS - 2.43%
Kansas Development Finance Authority,
Community Provider Loan Program (Community
Living Opportunities, Inc.), Series
1992A Revenue Bonds,
8.875%, 9-1-2011 ...................... 2,790 3,002,737
Baldwin City, Kansas, Educational Facilities
Revenue Bonds (Baker University Project),
Series 1988,
9.5%, 10-1-2008 ....................... 2,000 2,127,500
City of Prairie Village, Kansas, Claridge
Court Project Revenue Bonds, Series 1993A:
8.75%, 8-15-2023 ...................... 1,000 1,042,500
8.5%, 8-15-2004 ....................... 1,000 1,040,000
City of Lenexa, Kansas, Multifamily Housing
Revenue Refunding Bonds (Point West
Apartments Project), Series 1995,
7.05%, 6-1-2020 ....................... 2,125 2,071,875
Total ................................. 9,284,612
KENTUCKY - 1.35%
Kenton County Airport Board (Commonwealth
of Kentucky), Special Facilities Revenue
Bonds, 1992 Series A (Delta Air Lines,
Inc. Project),
7.5%, 2-1-2020 ........................ 3,000 3,172,500
County of Perry, Kentucky, Solid Waste
Disposal Revenue Bonds (TJ International
Project), Series 1994,
7.0%, 6-1-2024 ........................ 1,000 1,021,250
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
KENTUCKY (Continued)
County of Jefferson, Kentucky, Health
Facilities Revenue Refunding Bonds
(Beverly Enterprises Project),
Series 1985B,
9.75%, 8-1-2007 ....................... $ 865 $ 955,825
Total ................................. 5,149,575
LOUISIANA - 2.04%
Parish of St. Charles, State of Louisiana:
Environmental Revenue Bonds (Louisiana
Power & Light Company Project),
Series 1994-A,
6.875%, 7-1-2024 ...................... 2,750 2,853,125
Pollution Control Revenue Bonds
(Union Carbide Project),
Series 1992,
7.35%, 11-1-2022 ...................... 2,000 2,117,500
Board of Commissioners of the Port of New
Orleans, Industrial Development Revenue
Refunding Bonds (Continental Grain Company
Project), Series 1993,
7.5%, 7-1-2013 ........................ 2,000 2,050,000
LaFourche Parish Home Mortgage Authority,
Tax-Exempt Capital Appreciation Refunding
Bonds, Series 1990-B, Class B-2,
0.0%, 5-20-2014 ....................... 3,300 767,250
Total ................................. 7,787,875
MARYLAND - 0.27%
Baltimore County, Maryland, Pollution
Control Revenue Refunding Bonds,
Series 1994A (Bethlehem Steel
Corporation Project),
7.55%, 6-1-2017 ....................... 1,000 1,042,500
MASSACHUSETTS - 3.63%
Massachusetts Industrial Finance Agency:
Resource Recovery Revenue Bonds (SEMASS
Project), Series 1991B,
9.25%, 7-1-2015 ....................... 5,000 5,600,000
First Mortgage Revenue Bonds, Reeds
Landing Project, Series 1993,
8.625%, 10-1-2023 ..................... 3,000 3,026,250
Revenue Bonds, Beaver Country Day School
Issue, Series 1992, Subseries A,
8.1%, 3-1-2008 ........................ 1,665 1,704,544
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MASSACHUSETTS (Continued)
Massachusetts Health and Educational
Facilities Authority, Revenue Bonds,
New England Deaconess Hospital Issue,
Series D,
6.875%, 4-1-2022 ...................... $ 3,490 $ 3,568,525
Total ................................. 13,899,319
MICHIGAN - 3.19%
City of Detroit, Michigan, General
Obligation Refunding Bonds (Unlimited
Tax), Series 1995-B,
6.25%, 4-1-2009 ....................... 3,000 2,996,250
Michigan State Hospital Finance Authority,
Hospital Revenue Refunding Bonds
(Crittenton Hospital), Series 1994A,
5.25%, 3-1-2014 ....................... 3,000 2,670,000
Portage Lake Water and Sewage Authority,
Houghton County, Michigan, General
Obligation Limited Tax Bonds:
Series III,
7.75%, 10-1-2020 ...................... 1,000 1,195,000
Series II,
7.625%, 10-1-2020 ..................... 1,000 1,187,500
Michigan Strategic Fund, Limited Obligation
Revenue Bonds:
Knollwood Corporation Project, Series A,
9.65%, 10-1-2016 (C) .................. 1,300 1,105,000
Mercy Services for Aging Project,
Series 1990,
9.4%, 5-15-2020 ....................... 900 983,250
The Economic Development Corporation of
the Charter Township of Waterford
(Michigan), Limited Obligation Revenue
Bonds, Series 1993 (Canterbury Health
Care, Inc. Project),
8.375%, 7-1-2023 ...................... 2,000 2,077,500
Total ................................. 12,214,500
MINNESOTA - 1.57%
City of St. Anthony, Minnesota, Housing
Development Refunding Revenue Bonds
(Autumn Woods Project), Series 1992,
6.875%, 7-1-2022 ...................... 2,500 2,528,125
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MINNESOTA (Continued)
Minneapolis Community Development Agency,
Limited Tax Supported Development Revenue
Bonds, Common Bond Fund Series 1995-1,
7.25%, 12-1-2015 ...................... $ 1,310 $ 1,360,763
City of Mounds View, Minnesota, Gross
Revenue Golf Course Bonds, Series 1994A,
6.125%, 1-1-2014 ...................... 1,250 1,220,312
Housing and Redevelopment Authority of the
City of Saint Paul, Minnesota, Nursing Home
Development Revenue Bonds, Series 1988
(St. Mary's Home Project),
10.0%, 12-1-2018 ...................... 870 906,975
Total ................................. 6,016,175
MISSISSIPPI - 0.90%
Lowndes County, Mississippi, Solid Waste
Disposal and Pollution Control Refunding
Revenue Bonds (Weyerhaeuser Company
Project), Series 1992B, Indexed Inverse
Floating/Fixed Term Bonds,
6.7%, 4-1-2022 (D) .................... 2,000 2,157,500
Adams County, Mississippi, Hospital Revenue
Bonds, Series 1991 (Jefferson Davis Memorial
Hospital Project),
8.0%, 10-1-2016 ....................... 1,200 1,276,500
Total ................................. 3,434,000
MISSOURI - 7.00%
State Environmental Improvement and Energy
Resources Authority (State of Missouri),
Water Facilities Revenue Bonds
(Tri-County Water Authority Project),
Series 1992:
8.75%, 4-1-2022 ....................... 4,340 4,833,675
8.25%, 4-1-2002 ....................... 700 757,750
Bi-State Development Agency of the Missouri-
Illinois Metropolitan District, Adjustable
Rate Terminal Facilities, Revenue Refunding
Bonds (American Commercial Terminals, Inc.
Project), Series 1985,
7.75%, 6-1-2010 ....................... 3,000 3,281,250
The Industrial Development Authority of the
City of Hannibal, Missouri, Health
Facilities Revenue Bonds (Hannibal
Regional Healthcare System - Medical
Center of Northeast Missouri Project),
Series 1992,
9.5%, 3-1-2022 ........................ 2,500 2,906,250
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MISSOURI (Continued)
The Industrial Development Authority of the
City of Kansas City, Missouri, Revenue Bonds
(The Bishop Spencer Place, Incorporated
Project), Series 1994,
8.0%, 9-1-2016 ........................ $ 2,965 $ 2,901,994
Regional Convention and Sports Complex
Authority, Convention and Sports Facility
Project Bonds, Series C 1991 (The City of
St. Louis, Missouri, Sponsor):
7.9%, 8-15-2021 ....................... 1,500 1,593,750
7.75%, 8-15-2001 ...................... 945 978,075
Certificates of Participation,
Series 1994, Public Water
Supply District No. 2 of St. Charles
County, Missouri,
8.25%, 12-1-2020 ...................... 2,000 2,105,000
The City of Lake Saint Louis, Missouri,
Public Facilities Authority, Certificates
of Participation (Municipal Golf Course
Project), Series 1993,
7.55%, 12-1-2014 ...................... 2,000 2,082,500
Public Water Supply District No. 16 of
Jackson County, Missouri, Water System
Improvement Revenue Bonds, Series 1991,
9.25%, 1-1-2020 ....................... 1,800 1,620,000
The Industrial Development Authority of
the City of St. Louis, Missouri,
Industrial Revenue Refunding Bonds
(Kiel Center Multipurpose Arena Project),
Series 1992,
7.75%, 12-1-2013 ...................... 1,500 1,582,500
The Industrial Development Authority of the
City of Springfield, Missouri,
Industrial Development Refunding Revenue
Bonds (Health Care Realty of Springfield,
Ltd. Project), Series 1988,
10.25%, 12-1-2010 ..................... 1,190 1,231,650
The Industrial Development Authority of
Callaway County, Missouri, Industrial
Development Revenue Bonds (A.P. Green
Refractories Co. Project), Series 1984,
8.6%, 11-1-2014 ....................... 900 934,875
Total ................................. 26,809,269
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MONTANA - 0.75%
Montana Board of Investments, Resource Recovery
Revenue Bonds, Series 1993 (Yellowstone Energy
Limited Partnership Project),
7.0%, 12-31-2019 ...................... $ 3,000 $ 2,880,000
NEVADA - 1.09%
Clark County, Nevada, Industrial Development
Revenue Bonds (Southwest Gas Corporation),
1992 Series B,
7.5%, 9-1-2032 ........................ 4,000 4,175,000
NEW HAMPSHIRE - 4.50%
New Hampshire Higher Educational and Health
Facilities Authority:
Hospital Revenue Bonds:
Catholic Medical
Center Issue, Series 1989,
8.25%, 7-1-2013 ....................... 3,000 3,247,500
Monadnock Community Hospital
Issue, Series 1990,
9.125%, 10-1-2020 ..................... 1,470 1,591,275
St. Joseph Hospital Issue,
Series 1991,
7.5%, 1-1-2016 ........................ 1,000 1,052,500
First Mortgage Revenue Bonds:
RiverWoods at Exeter Issue,
Series 1993,
9.0%, 3-1-2023 ........................ 2,000 2,140,000
RiverMead at Peterborough Issue,
Series 1994,
8.5%, 7-1-2024 ........................ 2,000 2,042,500
Revenue Bonds, New Hampshire Catholic
Charities Issue, Series 1991,
8.4%, 8-1-2011 ........................ 1,700 1,831,750
The Industrial Development Authority of the
State of New Hampshire, Pollution Control
Revenue Bonds, Public Service Company of
New Hampshire Project:
1991 Tax-Exempt Series A,
7.65%, 5-1-2021 ....................... 2,000 2,115,000
1991 Tax-Exempt Series C,
7.65%, 5-1-2021 ....................... 2,000 2,115,000
Lisbon Regional School District, New
Hampshire, General Obligation Capital
Appreciation School Bonds,
0.0%, 2-1-2013 ........................ 1,940 1,103,375
Total ................................. 17,238,900
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW JERSEY - 3.30%
New Jersey Economic Development Authority:
First Mortgage Revenue Fixed Rate Bonds:
Franciscan Oaks Project - Series 1992A,
8.5%, 10-1-2023 ....................... $ 3,500 $ 3,714,375
Fellowship Village Project - Series 1995A,
9.25%, 1-1-2025 ....................... 2,500 2,609,375
First Mortgage Revenue Bonds, The
Evergreens - Series 1992,
9.25%, 10-1-2022 ...................... 2,000 2,235,000
Pollution Control Financing Authority of
Camden County (Camden County, New Jersey),
Solid Waste Disposal and Resource
Recovery System Revenue Bonds,
Series 1991B (AMT),
7.5%, 12-1-2009 ....................... 3,000 3,071,250
New Jersey Housing Finance Agency,
Multi-Family Mortgage Revenue Bonds,
1976 Series A,
8.25%, 11-1-2020 ...................... 1,000 1,000,000
Total ................................. 12,630,000
NEW MEXICO - 1.69%
City of Santa Fe, New Mexico, Industrial
Revenue Housing Refunding Bonds (Ponce
de Leon Limited Partnership Project)
Series 1995,
7.25%, 12-1-2005 ...................... 3,500 3,504,375
New Mexico Educational Assistance
Foundation, Student Loan Purchase Bonds,
Second Subordinate 1994 Series II-C (AMT),
6.0%, 12-1-2008 ....................... 3,000 2,947,500
Total ................................. 6,451,875
NEW YORK - 1.11%
The Port Authority of New York and New
Jersey, Special Project Bonds, Series 2,
Continental Airlines, Inc. and Eastern Air
Lines, Inc. Project, LaGuardia Airport
Passenger Terminal,
9.125%, 12-1-2015 ..................... 1,945 2,173,537
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW YORK (Continued)
New York City Industrial Development Agency,
Civic Facility Revenue Bonds (YMCA of
Greater New York Project),
8.0%, 8-1-2016 ........................ $ 1,000 $ 1,072,500
Tompkins County Industrial Development
Agency, Life Care Community Revenue Bonds,
1994 (Kendal at Ithaca, Inc. Project),
7.875%, 6-1-2024 ...................... 1,000 1,011,250
Total ................................. 4,257,287
OHIO - 1.40%
Hamilton County, Ohio, Health System Revenue
Bonds, Providence Hospital Issue,
Series 1992,
6.875%, 7-1-2015 ...................... 2,000 2,020,000
City of Columbus, Ohio, Various Purpose
Adjustable Rate Unlimited Tax Bonds,
Series 1995-1,
4.2%, 6-1-2016 ........................ 1,200 1,200,000
County of Lorain, Ohio, First Mortgage
Revenue Bonds, 1992 Series A (Kendal at
Oberlin Project),
8.625%, 2-1-2022 ...................... 1,000 1,075,000
City of Fairfield, Ohio, Economic
Development Revenue Refunding Bonds
(Beverly Enterprises - Ohio, Inc. Project),
Series 1992,
8.5%, 1-1-2003 ........................ 1,000 1,068,750
Total ................................. 5,363,750
OKLAHOMA - 3.92%
Oklahoma County Industrial Authority,
Industrial Development Revenue Bonds:
1986 Series B (Choctaw Nursing
Center Project):
10.25%, 9-1-2016 ...................... 1,230 1,277,662
10.125%, 9-1-2006 ..................... 525 544,688
1986 Series A (Westlake Nursing Center
Project):
10.25%, 9-1-2016 ...................... 905 940,069
10.125%, 9-1-2006 ..................... 430 446,125
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
OKLAHOMA (Continued)
Bixby Public Works Authority, Utility
System Revenue Bonds, Refunding
Series 1994,
7.25%, 11-1-2019 ...................... $ 2,685 $ 2,849,456
The Clinton Public Works Authority,
Refunding and Improvement Revenue
Bonds, Series 1994,
6.25%, 1-1-2019 ....................... 2,575 2,478,438
The Broken Arrow Public Golf Authority
(Broken Arrow, Oklahoma), Recreational
Facilities Revenue Bonds, Series 1995,
7.25%, 8-1-2020 ....................... 2,025 2,050,313
Trustees of the Oklahoma Ordnance Works
Authority, Industrial Development Revenue
Refunding Bonds (A.P. Green Industries,
Inc. Project), Series 1992,
8.5%, 5-1-2008 ........................ 1,600 1,658,000
The Guthrie Public Works Authority
(Guthrie, Oklahoma), Utility System
Revenue Bonds, Series 1994A,
6.75%, 9-1-2019 ....................... 1,415 1,448,606
Cushing Municipal Authority (Cushing,
Oklahoma), Utility System Revenue Bonds,
Series 1993,
6.0%, 7-1-2016 ........................ 1,345 1,326,506
Total ................................. 15,019,863
OREGON - 0.96%
Klamath Falls Intercommunity Hospital
Authority, Gross Revenue Bonds,
Series 1994 (Merle West Medical Center
Project),
7.1%, 9-1-2024 ........................ 3,500 3,688,125
PENNSYLVANIA - 6.23%
Pennsylvania Economic Development Financing
Authority:
Rescue Recovery Revenue Bonds
(Colver Project), Series 1994 D,
7.125%, 12-1-2015 ..................... 2,500 2,618,750
Exempt Facilities Revenue Bonds (MacMillan
Bloedel Clarion Limited Partnership Project),
Series of 1995,
7.6%, 12-1-2020 ....................... 2,000 2,180,000
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
PENNSYLVANIA (Continued)
Luzerne County Industrial Development
Authority:
Exempt Facilities Revenue Refunding Bonds,
1992 Series A (Pennsylvania Gas and
Water Company Project),
7.2%, 10-1-2017 ....................... $ 2,000 $ 2,077,500
Exempt Facilities Revenue Bonds, 1992
Series B (Pennsylvania Gas and Water
Company Project),
7.125%, 12-1-2022 ..................... 1,000 1,033,750
Allegheny County Industrial Development
Authority (Pennsylvania), Environmental
Improvement Revenue Bonds (USX Corporation
Project), Refunding Series A 1994,
6.7%, 12-1-2020 ....................... 3,000 3,060,000
McKeesport Hospital Authority (Commonwealth
of Pennsylvania), Hospital Revenue Bonds,
Series of 1993 (McKeesport Hospital Project),
6.5%, 7-1-2008 ........................ 2,500 2,475,000
Allentown Area Hospital Authority, Hospital
Revenue Bonds (Sacred Heart Hospital of
Allentown), Series A of 1993,
6.75%, 11-15-2014 ..................... 2,115 2,085,919
South Wayne County Water and Sewer Authority
(Wayne County, Pennsylvania), Sewer Revenue
Bonds, Series of 1992,
8.2%, 4-15-2013 ....................... 1,880 1,922,300
Beaver County Industrial Development Authority
(Pennsylvania), Collateralized Pollution
Control Revenue Refunding Bonds, Series 1995
(The Cleveland Electric Illuminating Company
Beaver Valley Project),
7.625%, 5-1-2025 ...................... 1,500 1,545,000
The Cambria County Industrial Development
Authority (Pennsylvania), Pollution
Control Revenue Refunding Bonds,
Series 1994 (Bethlehem Steel
Corporation Project),
7.5%, 9-1-2015 ........................ 1,440 1,486,800
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
PENNSYLVANIA (Continued)
Delaware County Authority (Pennsylvania),
First Mortgage Revenue Bonds, Series 1992
(Riddle Village Project),
9.25%, 6-1-2022 ....................... $ 1,000 $ 1,112,500
Clarion County Industrial Development Authority
(Pennsylvania), Health Facilities Revenue
Refunding Bonds (Beverly Enterprises
Project), Series 1985,
10.125%, 5-1-2007 ..................... 865 962,313
The Hospitals Authority of Philadelphia,
Hospital Revenue Bonds, Series of 1979
(James C. Giuffre Medical Center),
8.25%, 7-1-2009 (E) ................... 1,415 707,500
Wilkins Area Industrial Development Authority
(Pennsylvania), First Mortgage Revenue
Bonds (Longwood at Oakmont, Inc. Continuing
Care Retirement Community Project),
Series 1991A,
10.0%, 1-1-2021 ....................... 525 591,281
Total ................................. 23,858,613
RHODE ISLAND - 1.30%
Providence Public Buildings Authority
(Veazie Street School and Modular Classrooms
Projects), Revenue Bonds, Series 1991:
7.3%, 12-1-2010 ....................... 1,000 1,076,250
7.3%, 12-1-2011 ....................... 1,000 1,073,750
Pawtucket Public Buildings Authority (Water
System Project), Revenue Bonds, Series 1991:
7.6%, 7-1-2010 ........................ 840 919,800
7.6%, 7-1-2009 ........................ 785 861,537
Rhode Island Health and Educational Building
Corporation, Hospital Financing Revenue Bonds,
South County Hospital Issue - Series 1991,
7.25%, 11-1-2011 ...................... 1,000 1,046,250
Total ................................. 4,977,587
SOUTH CAROLINA - 2.48%
Charleston County, South Carolina, Industrial
Refunding Revenue Bonds, 1982 Series (Massey
Coal Terminal, South Carolina Corporate Project),
Adjustable Convertible Extendible Securities,
4.45%, 1-1-2007 ....................... 3,000 3,000,000
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
SOUTH CAROLINA (Continued)
South Carolina State Housing, Finance
and Development Authority, Multifamily
Housing Mortgage Revenue Bonds (United
Dominion-Plum Chase), Series 1991,
8.5%, 10-1-2021 ....................... $ 2,000 $ 2,190,000
South Carolina Jobs-Economic Development Authority,
Economic Development Revenue Bonds (Carolinas
Hospital System Project), Series 1992,
7.0%, 9-1-2014 ........................ 1,500 1,723,125
McCormick County, South Carolina, Hospital
Facilities Revenue Bonds, Series 1988
(McCormick Health Care Center Project),
10.5%, 3-1-2018 ....................... 1,470 1,510,425
County of Chester, South Carolina, Industrial
Development Refunding Revenue Bonds (Springs
Industries, Inc. Project), Series 1992,
7.35%, 2-1-2014 ....................... 1,000 1,075,000
Total ................................. 9,498,550
SOUTH DAKOTA - 0.51%
South Dakota Health and Educational
Facilities Authority, Refunding Revenue
Bonds (Westhills Village Retirement
Community Issue), Series 1993,
7.25%, 9-1-2013 ....................... 2,000 1,935,000
TENNESSEE - 2.27%
Memphis-Shelby County Airport Authority,
Special Facilities Revenue Bonds,
Series 1993 (Federal Express Corporation),
6.2%, 7-1-2014 ........................ 3,000 3,000,000
The Industrial Development Board of the
County of McMinn, Solid Waste Recycling
Facilities Revenue Bonds, Series 1992
(Calhoun Newsprint Company Project -
Bowater Incorporated Obligor),
7.4%, 12-1-2022 ....................... 2,000 2,120,000
The Health and Educational Facilities
Board of the City of Crossville, Tennessee,
Hospital Revenue Improvement Bonds,
Series 1992 (Cumberland Medical Center),
6.75%, 11-1-2012 ...................... 2,000 2,045,000
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
TENNESSEE (Continued)
The Industrial Development Board of the
Metropolitan Government of Nashville and
Davidson County, Multi-Family Housing
Revenue Bonds (River Retreat II, Ltd.
Project), Series 1986,
9.5%, 5-1-2017 ........................ $ 1,500 $ 1,533,750
Total ................................. 8,698,750
TEXAS - 3.03%
Alliance Airport Authority, Inc., Special
Facilities Revenue Bonds, Series 1991
(American Airlines, Inc. Project),
7.0%, 12-1-2011 ....................... 4,500 4,820,625
Dallas-Fort Worth International Airport
Facility Improvement Corporation:
American Airlines, Inc. Revenue Bonds,
Series 1990,
7.5%, 11-1-2025 ....................... 2,000 2,112,500
Delta Air Lines, Inc. Revenue Bonds,
Series 1991,
7.6%, 11-1-2011........................ 1,300 1,387,750
Retama Development Corporation, Special
Facilities Revenue Bonds (Retama Park
Racetrack Project), Series 1993,
8.75%, 12-15-2018 ..................... 3,500 2,100,000
Housing Authority of the City of Odessa,
Texas, Multifamily Mortgage Revenue Bonds,
Series 1993A (Section 8 Assisted Project),
6.375%, 10-1-2010 ..................... 1,225 1,162,219
Total ................................. 11,583,094
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
UTAH - 1.17%
Carbon County, Utah, Solid Waste Disposal
Refunding Revenue Bonds, Series 1991
(Sunnyside Cogeneration Associates Project),
9.25%, 7-1-2018 ....................... $ 2,500 $ 2,725,000
Brigham City, Box Elder County, Utah,
Special Assessment Bonds, Series 1990
(Brigham City, Utah, Special Improvement
District No. 22),
9.25%, 8-1-2010 ....................... 1,690 1,753,375
Total ................................. 4,478,375
VERMONT - 0.68%
Vermont Industrial Development Authority,
Mortgage Revenue Bonds, Wake Robin
Corporation Project, Series 1993A,
8.75%, 3-1-2023 ....................... 2,500 2,615,625
VIRGIN ISLANDS - 0.39%
Virgin Islands Public Finance Authority,
Revenue Refunding Bonds (Virgin Islands
General Obligation/Matching Fund Loan
Notes), Series 1992 A,
7.25%, 10-1-2018 ...................... 1,400 1,475,250
VIRGINIA - 0.98%
Industrial Development Authority of the
County of Prince William (Virginia),
Residential Care Facility First Mortgage
Revenue Bonds (Westminster at Lake Ridge),
Series 1992A,
10.0%, 1-1-2022 ....................... 2,500 2,709,375
Virginia Housing Development Authority,
Commonwealth Mortgage Bonds,
1988 Series C, Subseries C-2,
8.0%, 1-1-2038 ........................ 1,000 1,051,250
Total ................................. 3,760,625
WASHINGTON - 0.25%
Stevens County Public Corporation, Pollution
Control Revenue Refunding Bonds (The
Washington Water Power Company Kettle
Falls Project), Series 1993,
6.0%, 12-1-2023 ....................... 1,000 958,750
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
WEST VIRGINIA - 0.94%
West Virginia Hospital Finance Authority,
State of West Virginia, Hospital Revenue
Refunding Bonds, Series of 1986 (Logan
General Hospital Project),
8.75%, 4-1-2013 ....................... $ 2,000 $ 2,085,000
Upshur County, West Virginia, Solid Waste
Disposal Revenue Bonds (TJ International
Project), Series 1995,
7.0%, 7-15-2025 ....................... 1,500 1,526,250
Total ................................. 3,611,250
WYOMING - 0.67%
Sweetwater County, Wyoming, Solid Waste
Disposal Revenue Bonds (FMC Corporation
Project), Series 1994B,
6.9%, 9-1-2024 ........................ 2,500 2,568,750
TOTAL MUNICIPAL BONDS - 99.32% $376,375,763
(Cost: $360,775,467)
TOTAL SHORT-TERM SECURITIES - 0.51% $ 1,954,000
(Cost: $1,954,000)
TOTAL INVESTMENT SECURITIES - 98.83% $378,329,763
(Cost: $362,729,467)
CASH AND OTHER ASSETS, NET OF LIABILITIES - 1.17% 4,475,166
NET ASSETS - 100.00% $382,804,929
See Notes to Schedule of Investments on page 27.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
SEPTEMBER 30, 1995
Notes to Schedule of Investments
(A) The security does not bear interest for an initial period of time and
subsequently becomes interest bearing.
(B) Coupon resets weekly to 11.95% - Kenny S&P Index. Minimum coupon rate is
0%. On February 15, 1999, rate becomes fixed at 6.65%.
(C) Security is paying partial interest.
(D) Coupon resets weekly to 11.95% - Kenny S&P Index. Minimum coupon rate is
0%. On April 1, 1999, rate becomes fixed at 6.70%.
(E) Non-income producing as the issuer has either missed its most recent
interest
payment or declared bankruptcy.
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 MUNICIPAL HIGH INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $378,329,763
Cash ............................................. 5,259
Receivables:
Interest ........................................ 7,648,890
Fund shares sold ................................ 428,590
Prepaid insurance premium ........................ 12,853
------------
Total assets .................................. 386,425,355
------------
Liabilities
Payable for investment securities purchased ...... 2,076,213
Payable for Fund shares redeemed ................. 1,070,498
Dividends payable ................................ 223,244
Accrued service fee .............................. 70,660
Accrued transfer agency and dividend disbursing .. 26,531
Accrued accounting services fee .................. 5,000
Other ............................................ 148,280
------------
Total liabilities ............................. 3,620,426
------------
Total net assets ............................. $382,804,929
============
Net Assets
$1.00 par value capital stock, authorized --
100,000,000; shares outstanding -- 72,674,203
Capital stock ................................... $ 72,674,203
Additional paid-in capital ...................... 297,551,298
Accumulated undistributed income (loss):
Accumulated undistributed net realized
loss on investment transactions ............... (3,020,868)
Net unrealized appreciation in value of
investments at end of period .................. 15,600,296
------------
Net assets applicable to outstanding
units of capital ............................. $382,804,929
============
Net asset value per share (net assets divided
by shares outstanding) ........................... $5.27
Sales load (offering price x 4.25%)................. .23
-----
Offering price (net asset value divided by 95.75%).. $5.50
=====
On sales of $100,000 or more the sales load is reduced as set forth in the
Prospectus.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
STATEMENT OF OPERATIONS
For the Fiscal Year Ended SEPTEMBER 30, 1995
Investment Income
Interest ......................................... $27,187,810
-----------
Expenses (Note 2):
Investment management fee ....................... 1,860,352
Service fee ..................................... 369,260
Transfer agency and dividend disbursing ......... 295,349
Accounting services fee ......................... 56,667
Audit fees ...................................... 31,116
Custodian fees .................................. 20,755
Legal fees ...................................... 14,959
Other ........................................... 112,033
-----------
Total expenses ................................ 2,760,491
-----------
Net investment income ........................ 24,427,319
-----------
Realized and Unrealized Gain (Loss) on Investments
Realized net loss on securities .................. (1,115,328)
Realized net loss on futures contracts closed .... (1,606,563)
-----------
Net realized loss on investments ................ (2,721,891)
Unrealized appreciation in value of investments
during the period ............................... 15,084,134
-----------
Net gain on investments ......................... 12,362,243
-----------
Net increase in net assets resulting
from operations .............................. $36,789,562
===========
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the fiscal year
ended September 30,
-----------------------------
1995 1994
-------------- ------------
Increase in Net Assets
Operations:
Net investment income ...............$ 24,427,319 $ 21,745,160
Realized net gain (loss)
on investments .................... (2,721,891) 1,527,051
Unrealized appreciation
(depreciation) .................... 15,084,134 (22,927,131)
------------ ------------
Net increase in net assets
resulting from operations ........ 36,789,562 345,080
------------ ------------
Dividends to shareholders:*
From net investment income .......... (24,427,319) (21,745,160)
From realized net gain from
investment transactions ........... --- (4,619,821)
In excess of realized net gain
from investment transactions ...... (1,673,583) ---
------------ ------------
(26,100,902) (26,364,981)
------------ ------------
Capital share transactions:
Proceeds from sale of shares
(9,693,367 and 10,978,008 shares,
respectively) ..................... 49,317,843 58,602,026
Proceeds from reinvestment of
dividends and/or capital gains
distribution (3,868,221 and 4,126,763
shares, respectively) ............. 19,837,687 21,969,625
Payments for shares redeemed
(8,253,031 and 7,325,581 shares,
respectively) ..................... (42,201,117) (38,763,374)
------------ ------------
Net increase in net assets
resulting from capital
share transactions ............... 26,954,413 41,808,277
------------ ------------
Total increase ................... 37,643,073 15,788,376
Net Assets
Beginning of period .................. 345,161,856 329,373,480
------------ ------------
End of period ........................$382,804,929 $345,161,856
============ ============
Undistributed net investment
income ............................ $--- $---
==== ====
*See "Financial Highlights" on page 31.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the fiscal year ended
September 30,
------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
Net asset value,
beginning of
period ........... $5.12 $5.53 $5.23 $5.05 $4.85
----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income........... .35 .34 .35 .36 .38
Net realized and
unrealized gain
(loss) on
investments ..... .17 (0.34) .34 .18 .20
----- ----- ----- ----- -----
Total from investment
operations ....... .52 0.00 .69 .54 .58
----- ----- ----- ----- -----
Less distributions:
Dividends declared from
net investment
income .......... (0.35) (0.34) (0.35) (0.36) (0.38)
Distribution from
capital gains ... (0.00) (0.07) (0.04) (0.00) (0.00)
Distribution in excess
of capital gains. (0.02) (0.00) (0.00) (0.00) (0.00)
----- ----- ----- ----- -----
Total distributions. (0.37) (0.41) (0.39) (0.36) (0.38)
----- ----- ----- ----- -----
Net asset value, end
of period ........ $5.27 $5.12 $5.53 $5.23 $5.05
===== ===== ===== ===== =====
Total return* ...... 10.63% 0.05% 13.77% 11.08% 12.35%
Net assets, end
of period (000
omitted) .......... $382,805$345,162$329,373$260,777$224,945
Ratio of expenses to
average net
assets ........... 0.76% 0.76% 0.70% 0.72% 0.77%
Ratio of net investment
income to average
net assets ....... 6.75% 6.39% 6.49% 7.08% 7.63%
Portfolio turnover
rate ............. 19.07% 26.26% 26.13% 54.18% 60.83%
*Total return calculated without taking into account the sales load deducted on
an initial purchase.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE 1 -- Significant Accounting Policies
United Municipal High Income 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 -- Municipal bonds and the taxable obligations in the
Fund's investment portfolio are not listed or traded on any securities
exchange. Therefore, municipal bonds are valued using prices quoted by
Muller and Company, a dealer in bonds which offers a pricing service.
Short-term debt securities, whether taxable or nontaxable, 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. Original issue discount (as defined by the Internal
Revenue Code) and premiums on the purchase of bonds are amortized for both
financial and tax reporting purposes over the remaining lives of the bonds.
Interest income is recorded on the accrual basis. See Note 3 -- Investment
Security Transactions.
C. Federal income taxes -- The Fund intends to distribute all of its net
investment income and capital gains to its shareholders and otherwise
qualify as a regulated investment company under the Internal Revenue Code.
The Fund intends to pay distributions as required to avoid imposition of
excise tax. Accordingly, provision has not been made for Federal income
taxes. In addition, the Fund intends to meet requirements of the Internal
Revenue Code which will permit it to pay dividends from net investment
income, substantially all of which will be exempt from Federal income tax.
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. Net investment income distributions and capital gains
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are due to differing treatments for items such as deferral of
wash sales and post-October losses, net operating losses and expiring
capital loss carryforwards.
E. Futures -- See Note 5 -- Futures.
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 two elements: (i) a "Specific" fee computed on net asset value as of
the close of business each day at the annual rate of .10% of net assets and (ii)
a "Group" fee computed each day on the combined net asset values of all of the
funds in the United Group of mutual funds (approximately $13.3 billion of
combined net assets at September 30, 1995) at annual rates of .51% of the first
$750 million of combined net assets, .49% on that amount between $750 million
and $1.5 billion, .47% between $1.5 billion and $2.25 billion, .45% between
$2.25 billion and $3 billion, .43% between $3 billion and $3.75 billion, .40%
between $3.75 billion and $7.5 billion, .38% between $7.5 billion and $12
billion, and .36% of that amount over $12 billion. The Fund accrues and pays
this fee daily.
Pursuant to assignment of the Investment Management Agreement between the
Fund and Waddell & Reed, Inc. ("W&R"), Waddell & Reed Investment Management
Company ("WRIMCO"), a wholly-owned subsidiary of W&R, serves as the Fund's
investment manager.
The Fund has an Accounting Services Agreement with Waddell & Reed Services
Company ("WARSCO"), a wholly-owned subsidiary of W&R. Under the agreement,
WARSCO acts as the agent in providing accounting services and assistance to the
Fund and pricing daily the value of shares of the Fund. For these services, the
Fund pays WARSCO a monthly fee of one-twelfth of the annual fee shown in the
following table.
Accounting Services Fee
Average
Net Asset Level Annual Fee
(all dollars in millions) Rate for Each Level
------------------------- -------------------
From $ 0 to $ 10 $ 0
From $ 10 to $ 25 $ 10,000
From $ 25 to $ 50 $ 20,000
From $ 50 to $ 100 $ 30,000
From $ 100 to $ 200 $ 40,000
From $ 200 to $ 350 $ 50,000
From $ 350 to $ 550 $ 60,000
From $ 550 to $ 750 $ 70,000
From $ 750 to $1,000 $ 85,000
$1,000 and Over $100,000
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, 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
$1,016,772, out of which W&R paid sales commissions of $586,299 and all expenses
in connection with the sale of Fund shares, except for registration fees and
related expenses.
Under a Service Plan adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund may pay monthly a fee to W&R in an
amount not to exceed .25% of the Fund's average annual net assets. The fee is
to be paid to reimburse W&R for amounts it expends in connection with the
provision of personal services to Fund shareholders and/or maintenance of
shareholder accounts.
The Fund paid Directors' fees of $13,369.
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 investment securities, other than U.S. Government and short-
term securities, aggregated $105,001,566, while proceeds from maturities and
sales aggregated $67,215,923. Purchases of short-term securities aggregated
$113,965,281, while proceeds from maturities and sales aggregated $127,188,169.
No U.S. Government securities were bought or sold during the period ended
September 30, 1995.
For Federal income tax purposes, cost of investments owned at September 30,
1995 was $363,791,664, resulting in net unrealized appreciation of $14,538,099,
of which $17,892,088 related to appreciated securities and $3,353,989 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized net capital gain net
income of $301,051 during the fiscal year ended September 30, 1995, all of which
has been paid to shareholders during the period ended September 30, 1995
Remaining net capital gains will be distributed to the Fund's shareholders.
Internal Revenue Code regulations permit the Fund to defer into its next
fiscal year net capital losses or net long-term capital losses incurred from
November 1 to the end of its fiscal year ("post-October losses"). From November
1, 1994 through September 30, 1995, the Fund incurred net capital losses of
$1,960,745, which have been deferred to the fiscal year ending September 30,
1996.
NOTE 5 -- Futures
The Fund may engage in buying and selling interest rate futures contracts,
but only Debt Futures and Municipal Bond Index Futures. Upon entering into a
futures contract, the Fund is required to deposit, in a segregated account, an
amount of cash or U.S. Treasury Bills equal to a varying specified percentage of
the contract amount. This amount is known as the initial margin. Subsequent
payments ("variation margins") are made or received by the Fund each day,
dependent on the daily fluctuations in the value of the underlying debt security
or index. These changes in the variation margins are recorded by the Fund as
unrealized gains or losses. Upon the closing of the contracts, the cumulative
net change in the variation margin is recorded as realized gain or loss.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
United Municipal High Income 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 Municipal High Income Fund,
Inc. (the "Fund") at September 30, 1995, 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 September 30, 1995 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 LLP
Kansas City, Missouri
November 3, 1995
<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.
Exempt Interest Dividends - The exempt interest portion of dividends paid
represents the distribution of state and municipal bond interest and is exempt
from Federal income taxation.
The table below shows the taxability of dividends paid during the fiscal year
ended September 30, 1995:
PER-SHARE AMOUNTS REPORTABLE AS:
-------------------------------------------------------------
For Individuals For Corporations
------------------------------- -----------------------------
Record Ordinary ExemptLong-Term Non- ExemptLong-Term
Date Income InterestCapital GainQualifyingInterestCapital Gain
- -------------------------------------------------------------------------
October
through
December
1994 1.2124% 98.7876% ---% 1.2124%98.7876% ---%
December 1994
Security
Profit
Distribution ---- ---- 100.0000 ---- ---- 100.0000
January
through
September
1995 1.5381 98.4619 ---- 1.538198.4619 ----
NON-QUALIFYING DIVIDENDS -- The non-qualifying portion of distributions
represents the taxable portion of dividends paid and does not qualify for the
dividends received deduction for corporations.
The actual taxable amounts of dividends will be reported to you on Form 1099-DIV
after the close of the applicable calendar year.
Income from the Fund may be subject to the alternative minimum tax.
Shareholders are advised to consult with their tax advisors 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
Linda Graves, Topeka, Kansas
John F. Hayes, Hutchinson, Kansas
Glendon E. Johnson, Miami, Florida
James B. Judd, Kansas City, Missouri
William T. Morgan, Los Angeles, California
Doyle Patterson, Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Keith A. Tucker, Overland Park, Kansas
Frederick Vogel III, Milwaukee, Wisconsin
Paul S. Wise, Carefree, Arizona
Leslie S. Wright, Birmingham, Alabama
OFFICERS
Keith A. Tucker, President
Robert L. Hechler, Vice President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Sharon K. Pappas, Vice President and Secretary
Carl E. Sturgeon, Vice President
This report is submitted for the general information of the shareholders of
United Municipal High Income Fund, Inc. It is not authorized for distribution
to prospective investors in the Fund unless accompanied with or preceded by the
United Municipal High Income Fund, Inc. current prospectus.
<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 Municipal High Income Fund, Inc.
United High Income Fund, Inc.
United High Income Fund II, Inc.
United Continental Income Fund, Inc.
United Retirement Shares, Inc.
United Asset Strategy Fund, Inc.
United Income Fund
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.
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
Our INTERNET address is:
http://www.waddell.com
NUR1014A(9-95)
printed on recycled paper
