United
Municipal
High Income
Fund, Inc.
SEMIANNUAL
REPORT
---------------------------------------
For the six months ended March 31, 1999
<PAGE>
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>
PRESIDENT'S LETTER
MARCH 31, 1999
Dear Shareholder:
As president of your Fund, I would like to thank you for your continued
confidence as an investor. From every area of Waddell & Reed, including your
personal financial advisor, our goal has been to provide the best service
possible to our shareholders.
While it is impossible to predict the future direction of the markets, there are
some basic principles that we stand by that can help investors achieve their
objectives:
. Develop a financial plan that helps you pinpoint your financial objectives,
and identify specific strategies for turning your dreams into reality. There
is no better way to plan for your future.
. Invest on a regular basis. It can be one of the best ways to invest long
term and provide a hedge against market volatility.
. Adopt a long-term view to take advantage of compounding. The key to
successful investing is time, not timing. The power of compounding is
awesome and, on a long-term basis, can overwhelm any nuances of timing.
. Review your financial plan regularly. Financial planning is an ongoing
process that requires periodic review.
Waddell & Reed is positioned to assist you as you work toward your financial
goals. We will continue to offer quality investment products and personal
service to make the financial planning and investment process convenient and
accessible to you. Our locally based financial advisors are ready to assist you
with your total financial plan to help you plan for your retirement, to help you
meet your education funding goals or to achieve other financial objectives.
We look forward to assisting you in the future. If you have any questions about
your account, wish to review your financial plan or have other financial issues
that are important to you, contact your financial advisor or your local Waddell
& Reed office.
Respectfully,
Robert L. Hechler
President
<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.
FOUNDED: 1986
SCHEDULED DIVIDEND FREQUENCY: MONTHLY
<PAGE>
PERFORMANCE SUMMARY - Class A Shares
PER SHARE DATA
For the Six Months Ended March 31, 1999
- --------------------------------------------
DIVIDENDS PAID $0.16
=====
CAPITAL GAINS DISTRIBUTION $0.13
=====
NET ASSET VALUE ON
3/31/99 $5.50 adjusted to:$ 5.63(A)
9/30/98 5.69
------
CHANGE PER SHARE $(0.06)
======
(A)This number includes the capital gains distribution of $0.13 paid in December
1998 added to the actual net asset value on March 31, 1999.
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 3-31-99 1.65% 6.17%
5-year period ended 3-31-99 7.74% 8.68%
10-year period ended 3-31-99 8.61% 9.08%
*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, 1999, United Municipal High Income Fund, Inc. had net assets
totaling $534,604,384 invested in a diversified portfolio.
As a shareholder of United Municipal High Income Fund, Inc., for every $100 you
had invested on March 31, 1999, your Fund owned:
$21.93 Life Care/Nursing Center Revenue Bonds
19.04 Other Municipal Bonds
14.54 Industrial Development Revenue Bonds
10.93 Hospital Revenue Bonds
8.54 Housing Revenue Bonds
5.17 Airport Revenue Bonds
3.96 Resource Recovery Bonds
3.54 Water and Sewer Revenue Bonds
3.21 Transportation Revenue Bonds
3.03 Prerefunded ETM Bonds
2.47 General Obligation Bonds
2.21 Cash and Cash Equivalents
1.43 Lease/Certificates of Participation Bonds
1999 TAX YEAR TAXABLE EQUIVALENT YIELDS*
- ---------------------------------------------------------------------------
If your Taxable Income is:
Your Equivalent
Marginal Tax Free Yields
Joint Single Tax---------------------------
return Return Bracket Is 5% 6% 7% 8%
$ 0- 43,050 $ 0- 25,750 15% 5.88 7.06 8.24 9.41
$ 43,051-104,050 $ 25,751- 62,450 28% 6.94 8.33 9.72 11.11
$104,051-158,550 $ 62,451-130,250 31% 7.25 8.70 10.14 11.59
$158,551-283,150 $130,251-283,150 36% 7.81 9.38 10.94 12.50
$283,151 and above$283,151 and above 39.6% 8.28 9.93 11.59 13.25
*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.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS
ALABAMA - 0.39%
The Marshall County Health Care Authority,
Hospital Revenue Refunding Bonds,
Series 1992 (Guntersville-Arab
Medical Center),
7.0%, 10-1-2013 ....................... $ 1,000 $ 1,071,250
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 1,034,000
Total ................................. 2,105,250
ALASKA - 0.70%
City of Seward, Alaska, Revenue Bonds, 1996
(Alaska Sealife Center Project),
7.65%, 10-1-2016 ...................... 2,000 2,140,000
Anchorage Parking Authority, Lease Revenue
Refunding Bonds, Series 1993 (5th Avenue
Garage Project),
6.75%, 12-1-2008 ...................... 1,500 1,610,625
Total ................................. 3,750,625
ARIZONA - 1.51%
The Industrial Development Authority of the
County of Gila, Arizona, Environmental
Revenue Refunding Bonds (ASARCO Incorporated
Project), Series 1998,
5.55%, 1-1-2027 ....................... 4,750 4,637,188
Hayden-Winkelman Unified School District No.
41 of Gila County, Arizona, Capital
Appreciation Refunding Bonds, Series 1995,
0.0%, 7-1-2010 ........................ 6,145 3,456,562
Total ................................. 8,093,750
ARKANSAS - 0.30%
City of Little Rock, Arkansas, Capital
Improvement Revenue Bonds (Parks and
Recreation Projects), Series 1998A,
5.8%, 1-1-2023 ........................ 1,600 1,600,000
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
CALIFORNIA - 6.12%
California Statewide Communities Development
Authority:
Special Facilities Lease Revenue Bonds, 1997
Series A (United Air Lines, Inc. - San Francisco
International Airport Projects),
5.7%, 10-1-2033 ....................... $ 8,000 $ 8,190,000
Hospital Refunding Revenue Certificates
of Participation, Series 1993, Cedars-Sinai
Medical Center, Inverse Floating Rate
Security (INFLOS),
7.626%, 11-1-2015 (A) ................. 4,000 4,075,000
Foothill/Eastern Transportation Corridor
Agency, Toll Road Revenue Bonds, Series
1995A,
0.0%, 1-1-2013 (B) .................... 11,925 10,330,031
Sierra Kings Health Care District Revenue
Bonds, Series 1996,
6.5%, 12-1-2026 ....................... 3,000 3,093,750
Transmission Agency of Northern California,
California-Oregon Transmission Project,
Revenue Refunding Bonds, 1993 Series A,
INFLOS,
7.311%, 4-29-2024 (A) ................. 2,500 2,634,375
Certificates of Participation (1991 Capital
Improvement Project), Bella Vista Water
District (California),
7.375%, 10-1-2017 ..................... 1,500 1,635,000
Carson Redevelopment Agency (California),
Redevelopment Project Area No. 1,
Tax Allocation Bonds, Series 1993B,
6.0%, 10-1-2016 ....................... 1,500 1,608,750
Kings County Waste Management Authority,
Solid Waste Revenue Bonds, Series 1994
(California),
7.2%, 10-1-2014 ....................... 1,000 1,157,500
Total ................................. 32,724,406
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
COLORADO - 4.65%
Colorado Housing and Finance Authority,
Single Family Program Bonds:
1998 Series A-2 Senior Bonds (AMT),
6.6%, 5-1-2028 ........................ $ 2,500 $ 2,756,250
1997 Series B-2, Senior Bonds (AMT),
7.0%, 5-1-2026 ........................ 2,250 2,500,312
Sand Creek Metropolitan District, Adams
County and City and County of Denver,
Colorado, General Obligation Limited
Tax Bonds:
Series 1998,
6.625%, 12-1-2017 ..................... 3,070 3,089,187
Series 1997,
7.125%, 12-1-2016 ..................... 2,000 2,097,500
Boulder County, Colorado, Hospital Development
Revenue Bonds (Longmont United Hospital
Project), Series 1997,
5.6%, 12-1-2027 ....................... 4,000 4,050,000
City and County of Denver, Colorado,
Revenue Bonds (Jewish Community Centers
of Denver Project), Series 1994:
8.25%, 3-1-2024 ....................... 2,390 2,554,313
7.875%, 3-1-2019 ...................... 815 862,881
Colorado Health Facilities Authority:
Revenue Bonds (National Jewish Medical
and Research Center Project),
Series 1998,
5.375%, 1-1-2028 ...................... 2,000 1,977,500
Hospital Revenue Bonds (Steamboat Springs
Health Care Association Project),
Series 1997,
5.75%, 9-15-2022 ...................... 1,000 1,016,250
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
COLORADO (Continued)
City of Black Hawk, Colorado, Device Tax
Revenue Bonds, Series 1998,
5.625%, 12-1-2021 ..................... $ 1,250 $ 1,229,687
Bachelor Gulch Metropolitan District,
Eagle County, Colorado, General Obligation
Bonds, Series 1996,
7.0%, 12-1-2015 ....................... 1,095 1,151,119
Eaglebend Affordable Housing Corporation,
Multifamily Housing Project Revenue
Refunding Bonds, Series 1997A,
6.45%, 7-1-2021 ....................... 1,000 1,060,000
Mountain Village Metropolitan District, San
Miguel County, Colorado, General
Obligation Refunding Bonds, Series 1992,
8.1%, 12-1-2011 ....................... 465 513,825
Total ................................. 24,858,824
CONNECTICUT - 2.13%
Eastern Connecticut Resource Recovery
Authority, Solid Waste Revenue Bonds
(Wheelabrator Lisbon Project),
Series 1993A,
5.5%, 1-1-2014 ........................ 5,250 5,269,688
State of Connecticut Health and
Education Facilities Authority,
Revenue Bonds, Edgehill Issue
Series A (Fixed Rate),
6.875%, 7-1-2027 ...................... 2,400 2,574,000
Connecticut Development Authority, Pollution
Control Revenue Refunding Bonds (The
Connecticut Light and Power Company
Project - 1993B Series),
5.95%, 9-1-2028 ....................... 2,500 2,525,000
Connecticut Development Authority, First
Mortgage Gross Revenue Health Care
Project Refunding Bonds (Church Homes,
Inc., Congregational Avery Heights
Project - 1997 Series),
5.8%, 4-1-2021 ........................ 1,000 1,020,000
Total ................................. 11,388,688
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
DISTRICT OF COLUMBIA - 1.03%
Certificates of Participation, Series 1993,
District of Columbia,
7.3%, 1-1-2013 ........................ $ 3,000 $ 3,330,000
District of Columbia Revenue Bonds
(National Public Radio Issue),
Series 1992,
7.625%, 1-1-2013 ...................... 2,000 2,175,000
Total ................................. 5,505,000
FLORIDA - 4.54%
St. Johns County Industrial Development
Authority (Florida):
Health Care Revenue Bonds, Tax Exempt
Series 1997A (Bayview Project),
7.1%, 10-1-2026 ....................... 4,000 4,340,000
Industrial Development Revenue Bonds,
Series 1997A (Professional Golf Hall of
Fame Project),
5.5%, 3-1-2017 ........................ 1,000 1,051,250
Lake County, Florida, Resource Recovery
Industrial Development Refunding Revenue
Bonds (NRG/Recovery Group Project),
Series 1993A,
5.95%, 10-1-2013 ...................... 4,850 5,050,062
Sanford Airport Authority (Florida),
Industrial Development Revenue Bonds
(Central Florida Terminals, Inc. Project):
Series 1995A,
7.75%, 5-1-2021 ....................... 4,000 4,415,000
Series 1995C,
7.5%, 5-1-2021 ........................ 500 548,750
Sarasota County (Florida) Health Facilities
Authority, Health Care Facilities Revenue
Refunding Bonds, Series 1995 (Sarasota-
Manatee Jewish Housing Council, Inc.
Project),
6.7%, 7-1-2025 ........................ 3,000 3,150,000
Housing Finance Authority of Broward
County, Florida, Multifamily Housing
Revenue Bonds:
Pembroke Park Apartments Project,
Series 1998,
5.75%, 4-1-2038 ....................... 1,385 1,398,850
Stirling Apartments Project,
Series 1998,
5.75%, 4-1-2038 ....................... 1,000 1,000,000
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
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 ........................ $ 1,900 $ 2,044,875
City of Fort Walton Beach, First Mortgage
Industrial Development Revenue Bonds,
Series 1986 (Ft. Walton Beach Ventures,
Inc. Project),
10.5%, 12-1-2016 ...................... 1,240 1,278,651
Total ................................. 24,277,438
GEORGIA - 1.35%
Coffee County Hospital Authority (Georgia),
Revenue Anticipation Certificates (Coffee
Regional Medical Center, Inc. Project),
Series 1997A,
6.75%, 12-1-2016 ...................... 5,000 5,262,500
Development Authority of Fulton County
(Georgia), Special Facilities Revenue Bonds
(Delta Air Lines, Inc. Project), Series 1998,
5.5%, 5-1-2033 ........................ 1,980 1,937,925
Total ................................. 7,200,425
HAWAII - 0.55%
Department of Transportation of the State
of Hawaii, Special Facility Revenue Bonds
(Continental Airlines, Inc.), Series 1997,
5.625%, 11-15-2027 .................... 3,000 2,943,750
IDAHO - 0.45%
Idaho Health Facilities Authority, Hospital
Revenue Refunding Bonds, Series 1992
(IHC Hospitals, Inc.),
6.65%, 2-15-2021 (A) .................. 2,000 2,387,500
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
ILLINOIS - 3.35%
Illinois Health Facilities Authority:
Revenue Refunding Bonds, Series
1995A (Fairview Obligated Group),
7.125%, 8-15-2017 ..................... $ 3,525 $ 3,842,250
Revenue Refunding Bonds, Series 1998
(Lifelink Corporation Obligated Group),
5.7%, 2-15-2024 ....................... 1,750 1,699,687
City of Hillsboro, Montgomery County,
Illinois, General Obligation Bonds
(Alternate Revenue Source), Series 1991,
7.5%, 12-1-2021 ....................... 2,640 2,910,600
Illinois Development Finance Authority
Revenue Bonds, Series 1993C (Catholic
Charities Housing Development
Corporation Project),
6.1%, 1-1-2020 ........................ 2,500 2,587,500
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 2,180,000
Village of Hodgkins, Cook County, Illinois,
Tax Increment Revenue Refunding Bonds,
Series 1995A,
7.625%, 12-1-2013 ..................... 1,750 1,933,750
Village of Carol Stream, DuPage County,
Illinois, First Mortgage Revenue
Refunding Bonds, Series 1997 (Windsor
Park Manor Project),
7.0%, 12-1-2013 ....................... 1,500 1,605,000
Village of Bourbonnais, Kankakee County,
Illinois, Sewerage Revenue Bonds,
Series 1993,
7.25%, 12-1-2012 ...................... 1,085 1,162,306
Total ................................. 17,921,093
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
INDIANA - 2.14%
Indiana Health Facility Financing Authority:
Revenue Refunding Bonds, Series 1998
(Greenwood Village South Project),
5.625%, 5-15-2028 ..................... $ 4,100 $ 4,018,000
Hospital Revenue Refunding Bonds, Series 1998
(Jackson County Schneck Memorial Hospital Project),
5.25%, 2-15-2022 ...................... 1,600 1,552,000
Hospital Revenue Refunding Bonds, Series 1996
(Hancock Memorial Hospital and Health Services),
6.125%, 8-15-2017 ..................... 1,250 1,317,188
Hospital Revenue Bonds, Series 1992
(Fayette Memorial Hospital Project),
7.2%, 10-1-2022 ....................... 1,000 1,075,000
City of Goshen, Indiana, Revenue Bonds,
Series 1998 (Greencroft Obligated Group),
5.75%, 8-15-2028 ...................... 2,000 1,940,000
City of Carmel, Indiana, Retirement Rental
Housing Revenue Refunding Bonds (Beverly
Enterprises - Indiana, Inc. Project),
Series 1992,
8.75%, 12-1-2008 ...................... 1,400 1,545,250
Total ................................. 11,447,438
IOWA - 2.91%
Iowa Finance Authority:
Community Provider Revenue Bonds (Boys and
Girls Home and Family Services, Inc. Project),
Series 1998,
6.25%, 12-1-2028 ...................... 4,000 3,950,000
Community Rehabilitation Providers
Revenue Bonds (Lutheran Children's Home
Society - Bremwood Project), Series 1998,
5.8%, 12-1-2024 ....................... 1,500 1,501,875
City of Creston, Iowa, Industrial Development
Revenue Bonds, Series 1997A (CF Processing,
L.C. Project),
8.0%, 8-1-2026 ........................ 5,000 5,243,750
City of Cedar Rapids, Iowa, First Mortgage
Revenue Bonds, Series 1998-A (Cottage Grove
Place Project),
5.875%, 7-1-2028 ...................... 5,000 4,862,500
Total ................................. 15,558,125
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
KANSAS - 3.91%
Kansas Development Finance Authority:
Revenue Bonds (Village Shalom Obligated Group),
Series 1998 AA,
5.625%, 11-15-2028 .................... $ 6,000 $ 5,820,000
Multifamily Housing Revenue Bonds, Series 1998K
(Pioneer Olde Town Apartments Project),
6.5%, 10-1-2030 ....................... 3,200 3,168,000
Community Provider Loan Program (Community
Living Opportunities, Inc.), Series
1992A Revenue Bonds,
8.875%, 9-1-2011 ...................... 2,790 2,960,887
Certificates of Participation, Series 1998A,
Evidencing Proportionate Interests of the
Owners Thereof in Rental Payments to be
Made by the City of Spring Hill, Kansas, to
Spring Hill Golf Corporation,
6.5%, 1-15-2028 ....................... 4,000 3,875,000
City of Prairie Village, Kansas, Revenue Bonds,
(Claridge Court Project), Series 1993A:
8.75%, 8-15-2023 ...................... 1,000 1,137,500
8.5%, 8-15-2004 ....................... 890 1,012,375
City of Wichita, Kansas, Health Care Facilities
Refunding and Improvement Revenue Bonds,
Series I, 1999 (Larksfield Place),
5.875%, 5-15-2027 ..................... 2,000 1,955,000
Sedgwick County, Kansas and Shawnee County,
Kansas, Single Family Mortgage Revenue
Bonds (Mortgage-Backed Securities Program),
1997 Series A-1 (AMT),
6.95%, 6-1-2029 ....................... 905 996,631
Total ................................. 20,925,393
KENTUCKY - 1.02%
Kentucky Economic Development Finance Authority,
Health Care Facilities Revenue Bonds, Series
1998 (The Christian Church Homes of Kentucky,
Inc. Obligated Group),
5.5%, 11-15-2030 ...................... 4,425 4,342,031
County of Perry, Kentucky, Solid Waste
Disposal Revenue Bonds (TJ International
Project), Series 1994,
7.0%, 6-1-2024 ........................ 1,000 1,082,500
Total ................................. 5,424,531
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
LOUISIANA - 1.87%
Louisiana Public Facilities Authority:
Revenue Bonds (Progressive Healthcare
Providers/Louisiana, Inc. Project), Series 1998:
6.375%, 10-1-2020 ..................... $ 2,000 $ 1,970,000
6.375%, 10-1-2028 ..................... 2,000 1,947,500
Hospital Revenue and Refunding Bonds
(Pendleton Memorial Methodist Hospital
Project), Series 1998,
5.25%, 6-1-2028 ....................... 3,000 2,835,000
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 2,130,000
LaFourche Parish Home Mortgage Authority,
Tax-Exempt Capital Appreciation Refunding
Bonds, Series 1990-B, Class B-2,
0.0%, 5-20-2014 ....................... 3,300 1,130,250
Total ................................. 10,012,750
MAINE - 0.54%
Maine Veterans' Homes, Revenue Bonds,
1995 Series,
7.75%, 10-1-2020 ...................... 2,810 2,911,863
MARYLAND - 0.66%
Maryland Economic Development Corporation,
Senior Lien Revenue Bonds (Rocky Gap
Golf Course and Hotel/Meeting Center
Project), Series 1996 A,
8.375%, 10-1-2009 ..................... 3,250 3,514,062
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MASSACHUSETTS - 7.79%
Massachusetts Industrial Finance Agency:
First Mortgage Revenue Bonds, Reeds
Landing Project, Series 1993,
8.625%, 10-1-2023 ..................... $ 9,945 $ 11,262,713
Resource Recovery Revenue Bonds (SEMASS
Project), Series 1991B,
9.25%, 7-1-2015 ....................... 5,100 5,673,750
Revenue Bonds, Glenmeadow Retirement
Community Project, Series 1996C:
8.625%, 2-15-2026 ..................... 2,200 2,810,500
8.375%, 2-15-2018 ..................... 1,260 1,590,750
Resource Recovery Revenue Refunding Bonds
(Ogden Haverhill Project),
Series 1998A Bonds,
5.6%, 12-1-2019 ....................... 2,500 2,521,875
Revenue Bonds, Beaver Country Day School
Issue, Series 1992, Subseries A,
8.1%, 3-1-2008 ........................ 1,415 1,492,825
Massachusetts Municipal Wholesale Electric
Company, Power Supply System Revenue Bonds,
1993 Series A, Inverse Floating Rate
Security (INFLOS),
7.12%, 7-1-2018 (A) ................... 8,000 8,540,000
Massachusetts Health and Educational
Facilities Authority, Revenue Bonds:
Beth Israel Hospital Issue, Series G-4,
Inverse Floating Rate Securities,
8.826%, 7-1-2025 (A) .................. 5,000 5,762,500
Caritas Christi Obligated Group Issue,
Series A,
5.625%, 7-1-2020 ...................... 2,000 1,987,500
Total ................................. 41,642,413
MICHIGAN - 0.22%
City of Flint Hospital Building Authority,
Revenue Rental Bonds, Series 1998B
(Hurley Medical Center),
5.375%, 7-1-2028 ...................... 1,250 1,157,813
MISSISSIPPI - 0.45%
Lowndes County, Mississippi, Solid Waste
Disposal and Pollution Control Refunding
Revenue Bonds (Weyerhaeuser Company
Project), Series 1992B, Indexed Inverse
Floating/Fixed Term Bonds,
8.95%, 4-1-2022 (A) ................... 2,000 2,387,500
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MISSOURI - 5.24%
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 $ 4,719,750
8.25%, 4-1-2002 ....................... 445 472,256
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 3,235,556
Multifamily Housing Revenue Bonds (Village
Green Apartments Project), Series 1998,
6.25%, 4-1-2030 ....................... 1,750 1,743,438
The Industrial Development Authority of the
City of Bridgeton, Missouri, Senior Housing
Revenue Bonds (The Sarah Community Project),
Series 1998,
5.9%, 5-1-2028 ........................ 5,000 4,943,750
The Industrial Development Authority of the
County of Taney, Missouri, Hospital Revenue
Bonds (The Skaggs Community Hospital
Association), Series 1998,
5.4%, 5-15-2028 ....................... 2,860 2,824,250
The Industrial Development Authority of
St. Joseph, Missouri, Multifamily Housing
Revenue Bonds (Hillcrest Village Apartments
Project), Series 1998A,
6.375%, 9-1-2028 ...................... 2,250 2,224,688
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 2,202,500
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
MISSOURI (Continued)
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 $ 1,635,000
Health and Educational Facilities Authority
of the State of Missouri, Educational
Facilities Revenue Bonds (Southwest Baptist
University Project), Series 1998,
5.375%, 10-1-2023 ..................... 1,500 1,515,000
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 ..................... 1,035 1,044,522
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 ....................... 900 966,375
Certificates of Participation, Series 1998A,
City of Lake Saint Louis, Missouri, Lessee,
6.25%, 6-1-2005 ....................... 500 501,875
Total ................................. 28,028,960
NEVADA - 0.51%
Reno-Sparks Convention & Visitors Authority,
Nevada, Limited Obligation Medium-Term
Refunding Bonds, Series November 1, 1996,
6.0%, 11-1-2006 ....................... 2,640 2,715,900
NEW HAMPSHIRE - 1.58%
State of New Hampshire, Turnpike System Revenue
Bonds, 1994 Series C, Residual Interest Bonds (RIBS),
6.827%, 2-1-2024 (A) .................. 5,600 5,719,000
New Hampshire Higher Educational and Health
Facilities Authority:
Revenue Bonds, RiverWoods at Exeter
Issue, Series 1997A,
6.5%, 3-1-2023 ........................ 1,000 1,036,250
Revenue Bonds, RiverMead at Peterborough
Issue, Series 1998,
5.75%, 7-1-2028 ....................... 665 660,012
Lisbon Regional School District, New
Hampshire, General Obligation Capital
Appreciation School Bonds,
0.0%, 2-1-2013 ........................ 1,500 1,025,625
Total ................................. 8,440,887
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW JERSEY - 3.03%
New Jersey Economic Development Authority:
Senior Mortgage Revenue and Revenue Refunding
Bonds (Arbor Glen of Bridgewater Project),
Series 1998A,
6.0%, 5-15-2028 ....................... $ 5,000 $ 4,887,500
Senior Mortgage Revenue Bonds, Arbor
Glen of Bridgewater Project - Series
1996A Bonds,
8.75%, 5-15-2026 ...................... 3,525 4,547,250
First Mortgage Revenue Fixed Rate Bonds,
Winchester Gardens at Ward Homestead
Project - Series 1996A,
8.625%, 11-1-2025 ..................... 3,000 3,442,500
Economic Development Bonds, Kapkowski
Road Landfill Reclamation Improvement
District Project (City of Elizabeth),
Series 1998A:
6.375%, 4-1-2018 ...................... 2,385 2,477,419
0.0%, 4-1-2011 ........................ 1,740 822,150
Total ................................. 16,176,819
NEW MEXICO - 2.04%
New Mexico Educational Assistance Foundation:
Student Loan Purchase Bonds, Second Subordinate
1994 Series II-C (AMT),
6.0%, 12-1-2008 ....................... 2,300 2,348,875
Education Loan Bonds, Second Subordinate
Series 1998C-1,
5.5%, 11-1-2010 ....................... 2,000 1,965,000
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 3,692,500
New Mexico Hospital Equipment Loan Council,
Hospital Revenue Bonds (Memorial Medical
Center, Inc. Project), Series 1998,
5.5%, 6-1-2028 ........................ 2,960 2,893,400
Total ................................. 10,899,775
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
NEW YORK - 2.88%
New York City, Health and Hospitals Corporation,
Health System Bonds, 1999 Series A,
5.25%, 2-15-2017 ...................... $ 5,000 $ 4,975,000
Tompkins County Industrial Development
Agency, Life Care Community Revenue Bonds,
1994 (Kendal at Ithaca, Inc. Project),
7.875%, 6-1-2024 ...................... 4,035 4,327,538
New York City Industrial Development Agency,
Industrial Development Revenue Bonds
(Brooklyn Navy Yard Cogeneration Partners,
L.P. Project), Series 1997,
5.75%, 10-1-2036 ...................... 3,000 3,108,750
New York City Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, Inverse
Rate Securities, Fiscal 1994 Series E,
7.27%, 6-15-2012 (A) .................. 2,750 2,976,875
Total.................................. 15,388,163
NORTH CAROLINA - 0.81%
City of Durham, North Carolina, Multifamily
Housing Revenue Bonds (Ivy Commons Project),
Series 1997,
8.0%, 3-1-2029 ........................ 2,250 2,295,000
City of Charlotte, North Carolina, Charlotte/
Douglas International Airport, Special
Facility Refunding Revenue Bonds, Series 1998
(US Airways, Inc. Project),
5.6%, 7-1-2027 ........................ 2,075 2,038,687
Total ................................. 4,333,687
NORTH DAKOTA - 0.66%
City of Grand Forks, North Dakota, Senior
Housing Revenue Bonds (4000 Valley
Square Project), Series 1997:
6.25%, 12-1-2034 ...................... 2,000 2,030,000
6.375%, 12-1-2034 ..................... 1,500 1,522,500
Total ................................. 3,552,500
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
OHIO - 1.93%
Ohio Water Development Authority, State of
Ohio, Solid Waste Disposal Revenue Bonds
(Bay Shore Power Project), Tax-Exempt
Series 1998 A,
5.875%, 9-1-2020 ...................... $ 4,000 $ 4,080,000
City of Toledo, Ohio, Multifamily Housing
Mortgage Revenue Bonds, Series 1998-A
(Hillcrest Apartments Project),
6.125%, 12-1-2029 ..................... 4,000 3,995,000
Hamilton County, Ohio, Health System Revenue
Bonds, Providence Hospital Issue,
Series 1992,
6.875%, 7-1-2015 ...................... 2,000 2,220,000
Total ................................. 10,295,000
OKLAHOMA - 3.07%
Oklahoma Development Finance Authority (The),
Hillcrest Healthcare System Revenue and
Refunding Bonds, Series 1999A,
5.625%, 8-15-2029 ..................... 3,000 2,985,000
Bixby Public Works Authority, Utility
System Revenue Bonds, Refunding
Series 1994,
7.25%, 11-1-2019 ...................... 2,685 2,916,581
The Clinton Public Works Authority,
Refunding and Improvement Revenue
Bonds, Series 1994,
6.25%, 1-1-2019 ....................... 2,575 2,706,969
Oklahoma County Industrial Authority,
Industrial Development Revenue Bonds:
1986 Series A (Westlake Nursing Center
Project):
10.25%, 9-1-2016 ...................... 905 921,426
10.125%, 9-1-2006 ..................... 430 437,826
1986 Series B (Choctaw Nursing
Center Project):
10.25%, 9-1-2016 (C) .................. 1,230 713,400
10.125%, 9-1-2006 (C) ................. 525 304,500
The Broken Arrow Public Golf Authority
(Broken Arrow, Oklahoma), Recreational
Facilities Revenue Bonds, Series 1995,
7.25%, 8-1-2020 ....................... 2,025 2,156,625
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
OKLAHOMA (Continued)
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 $ 1,742,000
The Guthrie Public Works Authority
(Guthrie, Oklahoma), Utility System
Revenue Bonds, Series 1994A,
6.75%, 9-1-2019 ....................... 1,415 1,540,581
Total ................................. 16,424,908
OREGON - 1.30%
Klamath Falls Intercommunity Hospital
Authority, Gross Revenue Bonds,
Series 1994 (Merle West Medical Center
Project),
7.1%, 9-1-2024 ........................ 3,500 3,832,500
Myrtle Creek Building Authority, Gross
Revenue Bonds, Series 1996A (Myrtle Creek
Golf Course Project),
8.0%, 6-1-2021 ........................ 3,000 3,108,750
Total ................................. 6,941,250
PENNSYLVANIA - 2.92%
Delaware County Authority (Pennsylvania),
First Mortgage Revenue Bonds
(Riddle Village Project),
Series 1994,
8.25%, 6-1-2022 ....................... 4,000 4,840,000
Philadelphia Authority for Industrial
Development, Commercial Development Revenue
Refunding Bonds (Doubletree Guest Suites
Project), Series 1997A,
6.5%, 10-1-2027........................ 3,500 3,710,000
Allentown Area Hospital Authority, Hospital
Revenue Bonds (Sacred Heart Hospital of
Allentown), Series A of 1993,
6.75%, 11-15-2014 ..................... 2,865 3,104,944
Clearfield Hospital Authority, Hospital
Revenue and Refunding Bonds (Clearfield
Hospital Project), Series 1994,
6.875%, 6-1-2016 ...................... 2,000 2,177,500
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
PENNSYLVANIA (Continued)
South Wayne County Water and Sewer Authority
(Wayne County, Pennsylvania), Sewer Revenue
Bonds, Series of 1992,
8.2%, 4-15-2013 ....................... $ 1,725 $ 1,798,313
Total ................................. 15,630,757
RHODE ISLAND - 0.41%
City of Providence, Rhode Island, Special
Obligation Tax Increment Bonds, Series D,
6.65%, 6-1-2016 ....................... 2,000 2,170,000
SOUTH CAROLINA - 2.83%
South Carolina Jobs - Economic Development Authority,
Solid Waste Recycling Facilities Revenue Bonds
(Santee River Rubber Project):
Tax-Exempt Series 1998A,
8.0%, 12-1-2014 ....................... 4,000 4,000,000
Tax-Exempt Series 1998B,
9.0%, 12-1-2011 ....................... 2,460 2,573,775
Connector 2000 Association, Inc., Toll Road
Revenue Bonds (Southern Connector Project,
Greenville, South Carolina):
Senior Capital Appreciation Bonds, Series 1998B,
0.0%, 1-1-2035 ........................ 17,000 1,997,500
Senior Current Interest Bonds, Series 1998A,
5.25%, 1-1-2023 ....................... 2,000 1,822,500
McCormick County, South Carolina, Hospital
Facilities Revenue Refunding and Improvement
Bonds, Series 1997 (McCormick Health Care
Center Project),
7.0%, 3-1-2018 ........................ 2,530 2,590,087
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 2,162,500
Total ................................. 15,146,362
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
SOUTH DAKOTA - 0.40%
South Dakota Health and Educational
Facilities Authority, Refunding Revenue
Bonds (Westhills Village Retirement
Community Issue), Series 1993,
7.25%, 9-1-2013 ....................... $ 2,000 $ 2,122,500
TENNESSEE - 1.45%
The Health, Educational and Housing Facility
Board of the County of Shelby, Tennessee,
Health Care Facilities Revenue Bonds,
Series 1997A (Kirby Pines Retirement
Community Project),
6.375%, 11-15-2025 .................... 2,100 2,163,000
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 2,142,500
The Health and Educational Facilities Board
of the Metropolitan Government of Nashville
and Davidson County, Tennessee, Revenue
Refunding Bonds, Series 1998 (The
Blakeford at Green Hills),
5.65%, 7-1-2024 ....................... 2,000 1,960,000
Upper Cumberland Gas Utility District
(of Cumberland County, Tennessee),
Gas System Revenue Bonds, Series 1996,
7.0%, 3-1-2016 ........................ 1,400 1,492,750
Total ................................. 7,758,250
TEXAS - 4.21%
AllianceAirport Authority, Inc., Special
Facilities Revenue Bonds:
Series 1991 (American Airlines, Inc. Project),
7.0%, 12-1-2011 ....................... 4,700 5,499,000
Series 1996 (Federal Express Corporation Project),
6.375%, 4-1-2021 ...................... 4,000 4,295,000
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
TEXAS (Continued)
Gulf Coast Waste Disposal Authority, Waste
Disposal Revenue Bonds (Valero Energy
Corporation Project):
Series 1998,
5.6%, 4-1-2032 ........................ $ 3,490 $ 3,442,013
Series 1999,
5.7%, 4-1-2032 ........................ 2,000 2,002,500
Alvarado Industrial Development Corporation,
Industrial Development Revenue Bonds
(Rich-Mix Products of Texas, Inc. Project),
Series 1996,
7.75%, 3-1-2010 ....................... 2,795 2,850,900
City of Houston, Housing Corporation
No. 1, First Lien Revenue Refunding
Bonds, Series 1996 (6800 Long Drive
Apartments - Section 8 New Construction
Program), Houston, Texas,
6.625%, 2-1-2020 ...................... 2,305 2,359,744
City of Houston, Texas, Airport System
Special Facilities Revenue Bonds
(Continental Airlines, Inc. Terminal
Improvement Projects), Series 1997B,
6.125%, 7-15-2027 ..................... 2,000 2,060,000
Total ................................. 22,509,157
UTAH - 5.09%
Tooele County, Utah, Hazardous Waste
Treatment Revenue Bonds (Union Pacific
Corporation/USPCI, Inc. Project),
Series A,
5.7%, 11-1-2026 ....................... 17,000 16,808,750
Intermountain Power Agency, Power Supply
Revenue Refunding Bonds, 1993 Series A,
Inverse Floating Rate Securities (INFLOS),
7.671%, 7-1-2021 (A) .................. 5,950 6,351,625
Utah Housing Finance Agency, Revenue Bonds
(RHA Community Services of Utah, Inc.
Project), Series 1997A,
6.875%, 7-1-2027 ...................... 2,440 2,537,600
Carbon County, Utah, Solid Waste Disposal
Refunding Revenue Bonds, Series 1991
(Sunnyside Cogeneration Associates Project),
9.25%, 7-1-2018 (C) ................... 2,500 1,500,000
Total ................................. 27,197,975
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
VERMONT - 1.46%
Vermont Industrial Development Authority,
Mortgage Revenue Bonds, Wake Robin
Corporation Project, Series 1993A:
8.75%, 4-1-2023 ....................... $ 4,465 $ 5,006,381
8.75%, 3-1-2023 ....................... 2,500 2,803,125
Total ................................. 7,809,506
VIRGIN ISLANDS - 0.47%
Virgin Islands Public Finance Authority
Revenue and Refunding Bonds (Virgin
Islands Matching Fund Loan Notes),
Series 1998 A (Senior Lien/Refunding):
5.625%, 10-1-2025 ..................... 1,500 1,526,250
5.5%, 10-1-2018 ....................... 1,000 1,008,750
Total ................................. 2,535,000
VIRGINIA - 2.75%
Peninsula Ports Authority of Virginia,
Port Facility Refunding Revenue Bonds
(Ziegler Coal Project), Series 1997 (Non-AMT),
6.9%, 5-2-2022 ........................ 5,000 5,018,750
Norfolk Redevelopment and Housing Authority,
Multifamily Rental Housing Facility
Revenue Bonds, Series 1996 (1016 Limited
Partnership-Sussex Apartments Project),
8.0%, 9-1-2026 ........................ 3,495 3,621,694
Fairfax County Redevelopment and Housing
Authority, Multifamily Housing Revenue
Refunding Bonds (Burke Shire Commons
Apartments Project), Series 1996,
7.6%, 10-1-2036 ....................... 3,000 3,090,000
Pocahontas Parkway Association, Route 895
Connector, Toll Road Revenue Bonds, Senior
Capital Appreciation Bonds, Series 1998B,
0.0%, 8-15-2018 ....................... 9,000 2,981,250
Total ................................. 14,711,694
WASHINGTON - 1.63%
Port of Anacortes, Washington, Revenue and
Refunding Bonds, 1998 Series A (AMT),
5.625%, 9-1-2016 ...................... 3,790 3,752,100
Pilchuck Development Public Corporation
(State of Washington), Special Facilities
Airport Revenue Bonds, Series 1993
(TRAMCO, INC. Project),
6.0%, 8-1-2023 ........................ 3,500 3,618,125
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Principal
Amount in
Thousands Value
MUNICIPAL BONDS (Continued)
WASHINGTON (Continued)
Housing Authority of the City of Seattle,
Low-Income Housing Assistance Revenue
Bonds, 1995 (GNMA Collateralized Mortgage
Loan - Kin On Project),
7.4%, 11-20-2036 ...................... $ 1,142 $ 1,321,865
Total ................................. 8,692,090
WEST VIRGINIA - 0.31%
Upshur County, West Virginia, Solid Waste
Disposal Revenue Bonds (TJ International
Project), Series 1995,
7.0%, 7-15-2025 ....................... 1,500 1,635,000
WISCONSIN - 2.03%
Wisconsin Health and Educational Facilities
Authority, Revenue Bonds, Series 1995:
National Regency of New Berlin, Inc.
Project,
8.0%, 8-15-2025 ....................... 4,500 5,040,000
Hess Memorial Hospital Association, Inc.
Project,
7.75%, 11-1-2015 ...................... 3,400 3,859,000
City of Superior, Wisconsin, Water Supply
Facilities Revenue Refunding Bonds
(Superior Water, Light and Power Company
Project), Series 1996,
6.125%, 11-1-2021 ..................... 1,910 1,955,363
Total ................................. 10,854,363
WYOMING - 0.20%
Teton County Hospital District (St. John's
Hospital and Living Center), Jackson Hole,
Wyoming, Hospital Refunding and Improvement
Revenue Bonds, Series 1998,
5.8%, 12-1-2017 ....................... 1,000 1,041,250
TOTAL MUNICIPAL BONDS - 97.79% $522,750,390
(Cost: $496,023,923)
TOTAL SHORT-TERM SECURITIES - 2.14% $ 11,460,152
(Cost: $11,460,152)
TOTAL INVESTMENT SECURITIES - 99.93% $534,210,542
(Cost: $507,484,075)
See Notes to Schedule of Investments on page 26.
<PAGE>
THE INVESTMENTS OF
UNITED MUNICIPAL HIGH INCOME FUND, INC.
MARCH 31, 1999
Value
CASH AND OTHER ASSETS, NET OF LIABILITIES - 0.07% 393,842
NET ASSETS - 100.00% $534,604,384
Notes to Schedule of Investments
(A) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at March 31, 1999.
(B) The security does not bear interest for an initial period of time and
subsequently becomes interest bearing.
(C) 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
MARCH 31, 1999
(In Thousands, Except for Per Share and Share Amounts)
Assets
Investment securities - at value
(Notes 1 and 3) ................................. $534,211
Cash ............................................. 97
Receivables:
Interest ........................................ 9,015
Fund shares sold ................................ 401
Prepaid insurance premium ........................ 9
--------
Total assets .................................. 543,733
--------
Liabilities
Payable for investment securities purchased ...... 6,953
Payable to Fund shareholders ..................... 1,753
Dividends payable ................................ 244
Accrued service fee (Note 2) ..................... 83
Accrued transfer agency and dividend
disbursing (Note 2) ............................. 51
Accrued management fee (Note 2) .................. 7
Accrued distribution fee (Note 2) ................ 6
Accrued accounting services fee (Note 2) ......... 5
Other ............................................ 27
--------
Total liabilities ............................. 9,129
--------
Total net assets ............................. $534,604
========
Net Assets
$1.00 par value capital stock
Capital stock ................................... $ 97,217
Additional paid-in capital ...................... 408,082
Accumulated undistributed income:
Accumulated undistributed net realized
gain on investment transactions ............... 2,579
Net unrealized appreciation in value of
investments ................................... 26,726
--------
Net assets applicable to outstanding
units of capital ............................. $534,604
========
Net asset value per share (net assets divided
by shares outstanding)
Class A .......................................... $5.50
Class Y .......................................... $5.50
Capital shares outstanding
Class A .......................................... 97,216,586
Class Y .......................................... 367
Capital shares authorized .......................... 300,000,000
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended MARCH 31, 1999
(In Thousands)
Investment Income
Interest and amortization (Note 1B) .............. $16,721
-------
Expenses (Note 2):
Investment management fee ....................... 1,290
Service fee - Class A ........................... 519
Transfer agency and dividend disbursing - Class A 218
Distribution fee - Class A ...................... 37
Accounting services fee ......................... 30
Custodian fees .................................. 12
Audit fees ...................................... 10
Legal fees ...................................... 6
Other ........................................... 103
-------
Total expenses ................................ 2,225
-------
Net investment income ........................ 14,496
-------
Realized and Unrealized Gain (Loss) on Investments
(Notes 1 and 3)
Realized net gain on investments ................. 3,322
Unrealized depreciation in value of
investments during the period ................... (9,204)
-------
Net loss on investments ......................... (5,882)
-------
Net increase in net assets resulting
from operations .............................. $ 8,614
=======
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
(Dollars In Thousands) For the six For the fiscal
months ended year ended
March 31, September 30,
1999 1998
Increase in Net Assets ------------ --------------
Operations:
Net investment income ............... $ 14,496 $ 28,519
Realized net gain on investments .... 3,322 12,638
Unrealized appreciation (depreciation) (9,204) 5,793
-------- --------
Net increase in net assets
resulting from operations ........ 8,614 46,950
-------- --------
Distributions to shareholders from (Note 1D):*
Net investment income:
Class A ........................... (14,496) (28,519)
Class Y** ......................... --- ---
Realized net gains on investment transactions:
Class A ........................... (12,279) (6,027)
Class Y** ......................... --- ---
-------- --------
(26,775) (34,546)
-------- --------
Capital share transactions:
Proceeds from sale of shares:
Class A (6,708,706 and 11,013,539
shares, respectively) ............ 37,426 62,198
Class Y (708 and 3,493 shares,
respectively) .................... 4 20
Proceeds from reinvestment of dividends
and/or capital gains distribution:
Class A (4,146,677 and 4,977,786
shares, respectively) ............ 22,974 27,654
Class Y (13 and 15 shares,
respectively)** .................. --- ---
Payments for shares redeemed:
Class A (5,339,419 and 9,576,509
shares, respectively) ............ (29,832) (53,817)
Class Y (354 and 3,508 shares,
respectively) .................... (2) (20)
-------- --------
Net increase in net assets resulting
from capital share transactions 30,570 36,035
-------- --------
Total increase ................. 12,409 48,439
Net Assets
Beginning of period .................. 522,195 473,756
-------- --------
End of period ........................ $534,604 522,195
======== ========
Undistributed net investment income . $--- $---
==== ====
*See "Financial Highlights" on pages 30 - 31.
**Amounts not shown due to rounding.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
Class A Shares
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the
six For the fiscal year ended
months September 30,
ended ------------------------------------
3/31/99 1998 1997 1996 1995 1994
------- ------- ------ ------ ------ ------
Net asset value,
beginning of
period ........... $5.69 $5.55 $5.31 $5.27 $5.12 $5.53
----- ----- ----- ----- ----- -----
Income from investment
operations:
Net investment
income........... 0.15 0.32 0.34 0.34 0.35 0.34
Net realized and
unrealized gain
(loss) on
investments ..... (0.06) 0.21 0.25 0.04 0.17 (0.34)
----- ----- ----- ----- ----- -----
Total from investment
operations ....... 0.09 0.53 0.59 0.38 0.52 0.00
----- ----- ----- ----- ----- -----
Less distributions:
Declared from net
investment income (0.15) (0.32) (0.34) (0.34) (0.35) (0.34)
From capital gains (0.13) (0.07) (0.01) (0.00) (0.00) (0.07)
In excess
of capital gains. (0.00) (0.00) (0.00) (0.00) (0.02) (0.00)
----- ----- ----- ----- ----- -----
Total distributions. (0.28) (0.39) (0.35) (0.34) (0.37) (0.41)
----- ----- ----- ----- ----- -----
Net asset value, end
of period ........ $5.50 $5.69 $5.55 $5.31 $5.27 $5.12
===== ===== ===== ===== ===== =====
Total return* ...... 1.77% 9.88% 11.45% 7.40% 10.63% 0.05%
Net assets, end
of period (in
millions) ......... $535 $522 $474 $400 $383 $345
Ratio of expenses to
average net
assets ........... 0.85%** 0.82% 0.78% 0.81% 0.76% 0.76%
Ratio of net investment
income to average
net assets ....... 5.52%** 5.72% 6.19% 6.41% 6.75% 6.39%
Portfolio turnover
rate ............. 8.05% 35.16% 19.47% 26.91% 19.07% 26.26%
*Total return calculated without taking into account the sales load deducted on
an initial purchase.
**Annualized.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
Class Y Shares
For a Share of Capital Stock Outstanding
Throughout Each Period:
For the period from For the period
December 30, 1998* from July 1, 1998*
to March 31, 1999 to August 25, 1998
------------------- -------------------
Net asset value,
beginning of
period ........... $5.65 $5.64
----- -----
Income from investment
operations:
Net investment
income........... 0.08 0.05
Net realized and
unrealized gain (loss)
on investments .. (0.02) 0.01
----- -----
Total from investment
operations ....... 0.06 0.06
................. ----- -----
Less distributions:
Declared from net
investment income (0.08) (0.05)
From capital gains (0.13) (0.00)
----- -----
Total distributions (0.21) (0.05)
----- -----
Net asset value, end
of period ........ $5.50 $5.65
===== =====
Total return ....... 1.47% 1.07%
Net assets, end
of period (000
omitted) .......... $2 $0
Ratio of expenses to
average net
assets ........... 0.08%** 0.61%**
Ratio of net investment
income to average
net assets ....... 5.60%** 5.99%**
Portfolio turnover
rate ............. 8.05%*** 35.16%**
* Class Y shares commenced operations on July 1, 1998 and continued
operations until August 25, 1998 when all outstanding Class Y shares were
redeemed at the ending net asset value shown in the table. Operations
recommenced on December 30, 1998.
**Annualized.
***For the six months ended March 31, 1999.
See notes to financial statements.
<PAGE>
UNITED MUNICIPAL HIGH INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
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. Its investment objective is to provide a high level of
income which is not subject to Federal income taxation. 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 a pricing system
provided by a pricing service or dealer in bonds. 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 in 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 Subchapter M of 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 as of the close of the preceding business day. Net
investment income dividends 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 carryovers.
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
NOTE 2 -- Investment Management and Payments to Affiliated Persons
The Fund pays a fee for investment management services. The fee is
computed daily based on the net asset value at the close of business. The fee
consists of 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 $21.5
billion of combined net assets at March 31, 1999) 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 $1.3125 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 gross sales
commissions (which are not an expense of the Fund) of $745,416 out of which W&R
paid sales commissions of $429,225 and all expenses in connection with the sale
of Fund shares, except for registration fees and related expenses.
Under a Distribution and Service Plan for Class A shares adopted by the
Fund pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund
may pay monthly a distribution and/or service fee to W&R in an amount not to
exceed .25% of the Fund's Class A average annual net assets. The fee is to be
paid to reimburse W&R for amounts it expends in connection with the distribution
of the Class A shares and/or provision of personal services to Fund shareholders
and/or maintenance of shareholder accounts.
The Fund paid Directors' fees of $10,269, which are included in other
expenses.
W&R is a subsidiary of Waddell & Reed Financial, Inc., a holding company,
and a direct subsidiary of Waddell & Reed Financial Services, Inc., a holding
company.
NOTE 3 -- Investment Security Transactions
Purchases of investment securities, other than U.S. Government and short-
term securities, aggregated $64,472,505, while proceeds from maturities and
sales aggregated $41,487,047. Purchases of short-term securities aggregated
$129,872,222, while proceeds from maturities and sales aggregated $126,591,193.
No U.S. Government securities were bought or sold during the period ended March
31, 1999.
For Federal income tax purposes, cost of investments owned at March 31,
1999 was $507,596,882, resulting in net unrealized appreciation of $26,613,660,
of which $29,567,969 related to appreciated securities and $2,954,309 related to
depreciated securities.
NOTE 4 -- Federal Income Tax Matters
For Federal income tax purposes, the Fund realized capital gain net income
of $12,280,208 during its fiscal year ended September 30, 1998, which has been
distributed to the Fund's shareholders.
NOTE 5 -- Multiclass Operations
On January 30, 1996, the Fund was authorized to offer two classes of
shares, Class A and Class Y, each of which has equal rights as to assets and
voting privileges. Class Y shares are not subject to a sales charge on
purchases; they are not subject to a Rule 12b-1 Distribution and Service Plan
and have a separate transfer agency and dividend disbursement services fee
structure. A comprehensive discussion of the terms under which shares of either
class are offered is contained in the Prospectus and the Statement of Additional
Information for the Fund.
Income, non-class specific expenses and realized and unrealized gains and
losses are allocated daily to each class of shares based on the value of
relative net assets as of the beginning of each day adjusted for the prior day's
capital share activity.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
United Municipal High Income Fund, Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of United Municipal High Income
Fund, Inc. (the _Fund_) as of March 31, 1999, and the related statement
of operations for the six-month period then ended, the statements of
changes in net assets for the six-month period then ended and the fiscal
year ended September 30, 1998, and the financial highlights for the six-
month period ended March 31, 1999 and for each of the five fiscal years
in the period ended September 30, 1998. These financial statements and
the financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements
and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
the financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 1999, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of United Municipal High Income Fund, Inc. as of March 31, 1999,
the results of its operations for the six-month period then ended, the
changes in its net assets for the six-month period then ended and the
fiscal year ended September 30, 1998, and the financial highlights for
the six-month period ended March 31, 1999 and for each of the five fiscal
years in the period ended September 30, 1998 in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
May 7, 1999
<PAGE>
DIRECTORS
Keith A. Tucker, Overland Park, Kansas, Chairman of the Board
James M. Concannon, Topeka, Kansas
John A. Dillingham, Kansas City, Missouri
David P. Gardner, Menlo Park, California
Linda K. Graves, Topeka, Kansas
Joseph Harroz, Jr., Norman, Oklahoma
John F. Hayes, Hutchinson, Kansas
Robert L. Hechler, Overland Park, Kansas
Henry J. Herrmann, Overland Park, Kansas
Glendon E. Johnson, Miami, Florida
William T. Morgan, Coronado, California
Ronald C. Reimer, Mission Hills, Kansas
Frank J. Ross, Jr., Kansas City, Missouri
Eleanor B. Schwartz, Kansas City, Missouri
Frederick Vogel III, Milwaukee, Wisconsin
OFFICERS
Robert L. Hechler, President
Henry J. Herrmann, Vice President
John M. Holliday, Vice President
Theodore W. Howard, Vice President and Treasurer
Helge K. Lee, Vice President and Secretary
For shareholders who have chosen the Income-Earned option or the Cash option for
their distribution method: if the dividend distribution (for Income-Earned) or
the total distribution (for Cash) is less than ten dollars, the distribution
will be automatically paid in additional shares of the same class of the Fund.
Lower sales charges are available by combining the net asset value ("NAV") of
existing Class A shares of the Fund with additional purchases of Class A shares
of any fund in the United Group, except that only the Class A shares of United
Cash Management, Inc. that were acquired by exchange of another United Group
fund's Class A shares on which a sales charge was paid, plus the shares paid as
dividends on those acquired shares, may be combined.
<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
(800) 366-5465
Our INTERNET address is:
http://www.waddell.com
NUR1014SA(3-99)
printed on recycled paper
