[GRAPHIC OMITTED]
WARBURGE PINCUS FUNDS PART OF CREDIT SUISSE ASSET MANAGEMENT
SEMIANNUAL
REPORT
JUNE 30, 2000
(UNAUDITED)
WARBURG PINCUS TRUST II
(BULLET) FIXED INCOME PORTFOLIO
Warburg Pincus Trust II (the "Trust") Shares are not available directly to
individual investors, but may be offered only through certain insurance products
and pension and retirement plans.
More complete information about the Trust, including charges and expenses, is
provided in the Prospectus, which must precede or accompany this document and
which should be read carefully before investing. You may obtain additional
copies by calling 800-222-8977 or by writing to Warburg Pincus, P.O. Box 9030,
Boston, MA 02205-9030.
Credit Suisse Asset Management Securities, Inc., Distributor to the Trust is
located at 466 Lexington Avenue, New York, NY 10017-3147. The Trust is advised
by Credit Suisse Asset Management, LLC.
<PAGE>
FROM TIME TO TIME, THE PORTFOLIO'S INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY
WAIVE SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD
BE LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE.
RETURNS ARE HISTORICAL AND INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS.
RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS
THAN ORIGINAL COST.
THE VIEWS OF THE PORTFOLIO'S MANAGEMENT ARE AS OF THE DATE OF THE LETTER, AND
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF JUNE 30, 2000 THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
PORTFOLIO SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC ("CSAM") OR ANY AFFILIATE, ARE NOT FDIC INSURED AND ARE NOT
GUARANTEED BY CSAM OR ANY AFFILIATE. FUND INVESTMENTS ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
PORTFOLIO SHARES ARE NO LONGER OFFERED TO NEW INVESTORS.
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 2000
--------------------------------------------------------------------------------
August 4, 2000
Dear Shareholder:
For the six months ended June 30, 2000, Warburg Pincus Trust II--Fixed Income
Portfolio (the "Portfolio") had a gain of 3.10%, vs. a gain of 3.22% for the
Lehman Brothers Intermediate Government/Corporate Bond Index.* The Portfolio's
one-year return through June 30, 2000 was 3.99%. Its since-inception (on March
31, 1997) average annual total return through June 30, 2000 was 6.23%.
The period was a positive one for the U.S. bond market in terms of total
return, i.e., bond-price changes plus coupon income, despite the Federal
Reserve's ongoing campaign to keep inflation at bay by raising interest rates
(the Fed has steadily increased rates over the past year). Factors that aided
bonds included volatility in the stock market, which sparked periodic flights to
safety; an improving supply/demand backdrop for Treasuries, especially long-term
Treasuries; and growing optimism that the Fed's rate hikes would end sooner
rather than later. As a result of these forces, the yield on the 10-year
Treasury bond marginally declined in the six months, ending the period at 6.01%.
The Portfolio had a gain for the period, though it modestly underperformed
its benchmark. The Portfolio's performance largely reflected its interest-rate
exposure. Our strategy throughout was to attempt to optimally position the
Portfolio on the yield curve, given our outlook on the markets from a
risk-vs.-reward perspective. We continued to aim to err on the side of caution.
We made no material changes to the Portfolio during the period in terms of
basic strategy, maintaining a focus on intermediate-term, high-quality bonds in
order to limit overall risk. With regard to sector allocation, we emphasized
Treasury securities, which accounted for roughly half the Portfolio's assets at
the end of the period. We also held significant exposure to mortgage-backed
bonds and corporate securities.
1
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)-- JUNE 30, 2000
--------------------------------------------------------------------------------
Looking ahead, we are optimistic that a "soft landing" scenario will continue
to unfold. Barring any aggressive actions by the Fed, we believe that a
moderate-growth, low-inflation environment can prevail, supporting bonds
generally. Needless to say, we will continue to closely monitor the flow of
macroeconomic data and adjust the Portfolio as we deem appropriate based on
market conditions.
M. Anthony E. van Daalen
Portfolio Manager
----------------
* The Lehman Brothers Intermediate Government/Corporate Bond Index is an
unmanaged index (with no defined investment objective) of intermediate-term
government and corporate bond, and is calculated by Lehman Brothers Inc.
2
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS 1
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
---- ----------- -------- ----- ----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS (12.2%)
$ 15,000 ABN-AMRO Bank NV New York Branch,
Subordinate Deposit Notes (Callable
08/01/04 @ $100.00) (Aa2, AA-) 08/01/09 8.250 $ 15,048
50,000 AT&T Capital Corp. (A1, A+) 11/15/00 7.500 50,082
45,000 AT&T Capital Corp. (A1, A+) 05/15/05 6.600 43,490
40,000 AT&T Corp. (A1, AA-) 09/15/02 6.500 39,349
30,000 Conagra, Inc. Senior Notes (Putable
08/01/09 @ $100.00) (Baa1, BBB+) 08/01/09 6.700 27,721
40,000 Countrywide Home Loan Co. (A3, A) 04/15/09 6.250 35,029
30,000 Dime Bancorp, Inc. (Ba1, BBB-) 07/25/01 7.000 29,720
20,000 HMH Properties, Inc., Series B (Ba3, NR) 05/15/05 9.500 19,250
50,000 Household Finance Corp. (A2, A) 11/15/08 6.500 45,426
40,000 Ingersoll-Rand Co. Medium Term Note
(Putable 11/19/03 @ $100.00) (A3, A-) 11/19/03 6.230 38,782
30,000 Lowe's Companies
(Putable 05/15/07 @ $100.00) (A2, A) 05/15/07 7.110 29,013
5,000 Potomac Electric Power Co.
(Callable 05/15/02 @ $103.21) (A1, A) 05/15/27 8.500 5,100
5,000 Riggs Capital Trust II Preferred Securities,
Series C (Callable 03/15/07 @ $104.44) (Baa3, BB-) 03/15/27 8.875 4,082
45,000 Safeway, Inc. (Callable @ Make Whole +12.5BP) (Baa2, BBB) 09/15/04 7.250 44,519
50,000 Union Electric Co.
(Callable 12/01/01 @ $104.38) (A1, AA-) 12/01/21 8.750 50,255
----------
TOTAL CORPORATE BONDS (Cost $500,353) 476,866
----------
ASSET/MORTGAGE BACKED SECURITIES (32.1%)
25,000 Asset Securitization Corp. (Nomura Asset
Securities Corp.), Series 1996-D2, Class A2 (NR, AA) 02/14/29 7.204 2 24,246
100,000 California Infrastructure PG & E, Series 1997-1,
Class A7 (Callable 09/25/06 @ $100.00) (NR, NR) 09/25/08 6.420 97,141
70,000 Commonwealth Edison Transitional Funding
Trust, Series 1998-1, Class-A6 (Aaa, AAA) 06/25/09 5.630 64,567
58,871 Fannie Mae (Aaa, AAA) 12/01/08 5.690 53,294
121,640 Fannie Mae (Aaa, AAA) 03/01/28 8.000 122,210
82,781 Fannie Mae (Aaa, AAA) 04/01/29 6.500 78,073
44,877 Fannie Mae (Aaa, AAA) 05/01/29 6.500 42,324
134,676 Fannie Mae (Aaa, AAA) 11/01/29 7.000 130,046
100,000 Fannie Mae, Series 1993-50, Class PU (Aaa, AAA) 09/25/20 5.000 93,693
20,000 Fannie Mae, Series 1997-51, Class KB
Guaranteed REMIC Trust (Aaa, AAA) 03/20/08 7.000 19,510
25,000 Fannie Mae, Series 1998-M4, Class B (Aaa, AAA) 12/25/23 6.424 24,103
110,000 Freddie Mac, Series 2072, Class PK (Aaa, AAA) 07/15/24 6.000 106,804
41,714 Ginnie Mae (Aaa, AAA) 10/15/28 6.500 39,616
150,000 GMAC Commercial Mortgage Securities, Inc.,
Series 1997-C2, Class A3 (Aaa, AAA) 11/15/07 6.566 142,100
</TABLE>
See Accompanying Notes to Financial Statements.
3
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (CONT'D)
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS 1
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
---- ----------- -------- ----- ----------
<S> <C> <C> <C> <C> <C>
ASSET/MORTGAGE BACKED SECURITIES (CONT'D)
$ 90,000 MBNA Master Credit Card Trust, Series 1998-J,
Class A (NA, NA) 02/15/06 5.250 $ 85,307
10,642 Nomura Asset Securities Corp., Series 1994-4B,
Class 4A (Aaa, AAA) 09/25/24 8.300 10,738
120,000 Standard Credit Card Master Trust, Series 1995-9,
Class A (NR, NR) 10/07/07 6.550 116,444
----------
TOTAL ASSET/MORTGAGE BACKED SECURITIES
(Cost $1,300,905) 1,250,216
----------
U.S. Treasury Obligations (53.0%)
630,000 U.S. Treasury Notes (Aaa, AAA) 08/15/02 6.375 629,213
200,000 U.S. Treasury Notes (Aaa, AAA) 08/15/03 5.750 196,625
590,000 U.S. Treasury Notes (Aaa, AAA) 02/15/05 7.500 618,947
500,000 U.S. Treasury Notes (Aaa, AAA) 08/15/07 6.125 497,188
40,000 U.S. Treasury Notes (Aaa, AAA) 11/15/08 4.750 36,338
80,000 U.S. Treasury Inflation Protected Note (Aaa, AAA) 07/15/02 3.625 84,981
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,058,341) 2,063,292
----------
NUMBER OF
SHARES
------------
PREFERRED STOCK (0.1%)
200 Equity Residential PropertiesTrust, Series D REIT
(Callable 07/15/07 @ $25.00) (Cost $5,000) 8.600 4,513
----------
SHORT TERM INVESTMENT (1.0%)
38,623 RBB Money Market Portfolio (Cost $38,623) 38,623
----------
TOTAL INVESTMENTS AT VALUE (98.4%) (Cost $3,903,222 3) 3,833,510
OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%) 62,201
----------
NET ASSETS (100.0%) $3,895,711
==========
<FN>
INVESTMENT ABBREVIATIONS
NR = Not Rated
REMIC = Real Estate Mortgage Investment Conduit
REIT = Real Estate Investment Trust
--------------------------------------------------------------------------------
1 Credit ratings given by Moody's Investors Services, Inc. and Standard and
Poor's Ratings Services are unaudited.
2 On instruments with variable rates, the rate shown reflects the current rate
as of June 30, 2000.
3 Also cost for federal income tax purposes.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments at value (Cost $3,903,222) $3,833,510
Dividends and interest receivable 64,438
Receivable from affiliate 2,389
Prepaid expenses 2,862
----------
Total Assets 3,903,199
----------
LIABILITIES
Administration fee payable 320
Accrued expenses payable 7,168
----------
Total Liabilities 7,488
----------
NET ASSETS
Capital stock, $0.001 par value 378
Paid-in capital 3,923,891
Undistributed net investment income 111,519
Accumulated net realized
loss from security transactions (70,365)
Net unrealized depreciation from security transactions (69,712)
----------
Net Assets $3,895,711
----------
Shares outstanding 378,095
----------
Net Asset Value, offering price and redemption price per share $10.30
==========
See Accompanying Notes to Financial Statements.
5
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 198
Interest 135,219
--------
Total investment income 135,417
--------
EXPENSES:
Investment advisory fees 10,392
Administrative fees 4,998
Legal fees 9,866
Printing fees 9,680
Custodian fees 6,250
Trustees fees 6,121
Audit fees 5,101
Organizational costs 845
Transfer agent fees 317
Insurance expense 157
Interest expense 15
Miscellaneous expenses 200
--------
53,942
Less: fees waived, expenses reimbursed and transfer agent offsets (30,029)
--------
Total expenses 23,913
--------
Net investment income 111,504
--------
NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS:
Net realized loss from security transactions (25,851)
Net change in unrealized appreciation/(depreciation) from investments 36,506
--------
Net gain on investments 10,655
--------
Net increase in net assets resulting from operations $122,159
========
See Accompanying Notes to Financial Statements.
6
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 111,504 $ 157,538
Net realized loss from security transactions (25,851) (44,503)
Net change in unrealized appreciation/(depreciation)
from investments 36,506 (117,185)
---------- ----------
Net increase (decrease) in net assets resulting
from operations 122,159 (4,150)
---------- ----------
FROM DIVIDENDS:
Dividends from net investment income 0 (157,946)
---------- ----------
Net decrease in net assets from dividends 0 (157,946)
---------- ----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 200,465 6,382,704
Reinvestment of dividends 0 157,946
Net asset value of shares redeemed (979,277) (4,653,386)
---------- ----------
Net increase/(decrease) in net assets from capital
share transactions (778,812) 1,887,264
---------- ----------
Net increase/(decrease) in net assets (656,653) 1,725,168
NET ASSETS:
Beginning of period 4,552,364 2,827,196
---------- ----------
End of period $3,895,711 $ 4,552,364
========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME $ 111,519 $ 15
========== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
WARBURG PINCUS TRUST II--FIXED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED
MONTHS ENDED DECEMBER 31,
JUNE 30, 2000 ----------------------------
(UNAUDITED) 1999 1998 1997 1
---------------- ------ ------ ------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period $ 9.99 $10.32 $ 9.97 $10.00
------ ------ ------ ------
INVESTMENT ACTIVITIES:
Net investment income 0.29 0.36 0.24 0.44
Net gains (losses) from investments
(both realized and unrealized) 0.02 (0.33) 0.57 0.45
------ ------ ------ ------
Total from investment activities 0.31 0.03 0.81 0.89
------ ------ ------ ------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income 0 (0.36) (0.24) (0.41)
Dividends in excess of net investment income 0 0 (0.04) (0.31)
Distributions from net realized gains 0 0 (0.18) (0.20)
------ ------ ------ ------
Total dividends and distributions 0 (0.36) (0.46) (0.92)
------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.30 $ 9.99 $10.32 $ 9.97
====== ====== ====== ======
Total return 3.10%2 0.27% 8.08% 8.96%2
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $3,896 $4,552 $2,827 $ 599
Ratio of expenses to average net assets3 1.17%4,5 1.00% .99% .99%4
Ratio of net investment income to average net assets 5.36%4 5.07% 4.69% 5.29%4
Decrease reflected in above operating expense ratios
due to waivers/reimbursements 1.42%4 2.07% 4.33% 12.05%4
Portfolio turnover rate 33.09% 173.29% 318.95% 138.28%
--------------------------------------------------------------------------------------------------------------
<FN>
1 For the period March 31, 1997 (commencement of operations) through December
31, 1997.
2 Non-annualized.
3 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in the reduction to the
Portfolio's net expense ratio by .02% for the six months ended June 30, 2000
and .01%, .00%, and .00% for each of the years or period ended December 31,
1999, 1998, and 1997, respectively. The Portfolio's net operating expense
ratio after reflecting these arrangements was 1.15% for the six months ended
June 30, 2000 and .99% for each of the years or period ended December 31,
1999, 1998, and 1997.
4 Annualized.
5 Effective May 1, 2000 the net expense ratio cap was increased from .99% to
1.50%.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
WARBURG PINCUS TRUST II
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Trust II (the "Trust"), a Massachusetts Business Trust, is an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (1940 Act), and currently offers one investment
portfolio classified as non-diversified. The Fixed Income Portfolio (the
"Portfolio") is a non-diversified investment fund that seeks total return
consistent with prudent investment management. Shares of the Portfolio are not
available directly to individual investors but may be offered only to certain
(a) life insurance companies for allocation to certain of their separate
accounts established for the purpose of funding variable annuity contracts and
variable life insurance contracts and (b) tax-qualified pension and retirement
plans ("Plans"), including participant-directed Plans which elect to make the
Portfolio an investment option for Plan participants.
The net asset value of the Portfolio is determined daily as of the close of
regular trading on the New York Stock Exchange. The Portfolio's investments are
valued at market value, which is generally determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
mean between the last reported bid and asked price. In the absence of market
quotations, investments are generally valued at fair value as determined by or
under the direction of the Trust's Board of Trustees. Short-term investments
that mature in 60 days or less are valued on the basis of amortized cost, which
approximates market value.
The books and records of the Portfolio are maintained in U.S. dollars.
Transactions denominated in foreign currencies are recorded at the current
prevailing exchange rates. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange rate
at the end of the period. Translation gains or losses resulting from changes in
the exchange rate during the reporting period and realized gains and losses on
the settlement of foreign currency transactions are reported in the results of
operations for the current period. The Portfolio does not isolate that portion
of gains and losses on investments in equity securities which are due to changes
in the foreign exchange rate from that which are due to changes in market prices
of equity securities.
The Portfolio may invest in securities of foreign countries and governments
which involve certain risks in addition to those inherent in domestic
investments. Such risks generally include, among others, currency risk
(fluctuations in currency exchange rates), information risk (key information may
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the imposition of capital or currency
9
<PAGE>
WARBURG PINCUS TRUST II
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
controls or punitive taxes). Other risks of investing in foreign securities
include liquidity and valuation risks.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. The cost of investments sold is determined by use of the
specific identification method for both financial reporting and income tax
purposes.
Dividends from net investment income and distributions of net realized
capital gains, if any, are declared and paid at least annually. However, to the
extent that a net realized capital gain can be reduced by a capital loss
carryover, such gain will not be distributed. Income and capital gain
distributions are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles.
No provision is made for federal income taxes as it is the Trust's intention
to have the Portfolio continue to qualify for and elect the tax treatment
applicable to regulated investment companies under the Internal Revenue Code of
1986, as amended ("the Code"), and make the requisite distributions to its
shareholders which will be sufficient to relieve it from federal income and
excise taxes.
Costs incurred by the Trust in connection with its organization have been
deferred and are being amortized over a period of five years from the date the
Trust commenced its operations.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Portfolio, along with other Funds advised by Credit Suisse Asset
Management, LLC ("CSAM"), the Portfolio's investment adviser (collectively the
"Warburg Funds"), may transfer uninvested cash balances to a pooled cash
account, which is invested in repurchase agreements secured by U.S. government
securities. Securities, pledged as collateral for repurchase agreements, are
held by the Portfolio's custodian bank until the agreements mature. Each
agreement requires that the market value of the collateral be sufficient to
cover payments of interest and principal; however, in the event of default or
bankruptcy by the other party to the agreement, retention of the collateral may
be subject to legal proceedings. At June 30, 2000, the Portfolio had no
investments in repurchase agreements.
10
<PAGE>
WARBURG PINCUS TRUST II
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
The Portfolio has an arrangement with its transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of its transfer
agent expense. For the six months ended June 30, 2000, the Portfolio received
credits or reimbursements of $507, under this arrangement.
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Pursuant to Investment Advisory Agreements, CSAM, an indirect, wholly-owned
subsidiary of Credit Suisse Group serves as investment adviser for the
Portfolio. For its investment advisory services, CSAM receives a fee from the
Portfolio at an annual rate of .50% of the Portfolio's average daily net assets.
For the six months ended June 30, 2000, investment advisory fees earned and
voluntarily waived and reimbursements were as follows:
GROSS NET EXPENSE
ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS
------------ --------- -------------- --------------
$10,392 $(10,392) $ 0 $(18,091)
Credit Suisse Asset Management Securities, Inc. ("CSAMSI") serves as
co-administrator to the Portfolio. PFPC Inc. ("PFPC"), an indirect subsidiary of
PNC Financial Services Group, Inc. ("PNC"), also serves as the Portfolio's
co-administrator. For its administrative services, CSAMSI currently receives a
fee calculated at an annual rate of .10% of the Portfolio's average daily net
assets. For the six months ended June 30, 2000, administrative services fees
earned by CSAMSI were $2,078.
11
<PAGE>
WARBURG PINCUS TRUST II
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
For its administrative services, PFPC currently receives a fee, exclusive of
out-of-pocket expenses, from the Portfolio calculated at an annual rate of .05%
of the Portfolio's average daily net assets. For the six months ended June 30,
2000, administrative services fees earned and voluntarily waived by PFPC
(including out-of-pocket expenses) were as follows:
NET
CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
--------------------- -------- ---------------------
$2,920 $(1,039) $1,881
Provident Distributors, Inc. serves as distributor of the Portfolio's shares
without compensation. Effective August 1, 2000, CSAMSI will become distributor
to the Trust without compensation.
3. LINE OF CREDIT
The Portfolio together with other Funds advised by CSAM, have established a
$350 million committed, unsecured, line of credit facility ("Credit Facility")
with Deutsche Bank, AG as administrative agent, State Street Bank and Trust
Company as operations agent, Bank of Nova Scotia as syndication agent and
certain other lenders, for temporary or emergency purposes primarily relating to
unanticipated portfolio share redemptions. Under the terms of the Credit
Facility, the Funds with access to the Credit Facility pay an aggregate
commitment fee at a rate of .075% per annum on the entire amount of the Credit
Facility, which is allocated among the participating Funds in such manner as is
determined by the governing Boards of the various Funds. In addition, the
participating funds will pay interest on borrowings at the Federal funds rate
plus .50%. For the six months ended June 30, 2000, the Portfolio had no
borrowings under the credit facility.
4. INVESTMENTS IN SECURITIES
For the six months ended June 30, 2000, purchases and sales of investment
securities (excluding short-term investments) were as follows:
U.S. GOVERNMENT AND
INVESTMENT SECURITIES AGENCY OBLIGATIONS
--------------------- ---------------------
PURCHASES SALES PURCHASES SALES
--------- -------- --------- --------
$295,735 $191,385 $354,810 $846,500
12
<PAGE>
WARBURG PINCUS TRUST II
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
4. INVESTMENTS IN SECURITIES -- (CONT'D)
At June 30, 2000, the net unrealized appreciation from investments for those
securities having an excess of value over cost and net unrealized depreciation
from investments for those securities having an excess of cost over value (based
on cost for federal income tax purposes) was as follows:
UNREALIZED UNREALIZED NET UNREALIZED
APPRECIATION DEPRECIATION DEPRECIATION
------------ ------------ --------------
$0 $(69,712) $(69,712)
5. CAPITAL SHARE TRANSACTIONS
The Portfolio is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value of $.001 per share.
Transactions of the Portfolio were as follows:
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
------------- -----------------
Shares sold 19,789 618,562
Shares issued to shareholders on
reinvestment of dividends 0 15,810
Shares Redeemed (97,324) (452,618)
--------- ---------
Net increase (decrease) in shares outstanding (77,535) 181,754
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WARBURGE PINCUS FUNDS PART OF CREDIT SUISSE ASSET MANAGEMENT
P.O. BOX 9030, BOSTON, MA 02205-9030
800-222-8977 (BULLET) www.warburg.com
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TRFIX-3-0600
