[LOGO]
ANNUAL
REPORT
December 31, 1998
WARBURG PINCUS
WORLDPERKS MONEY MARKET FUND
O
WARBURG PINCUS
WORLDPERKS TAX FREE MONEY MARKET FUND
[LOGO]
More complete information about the funds, 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-WARBURG (800-927-2874) or by writing to Warburg Pincus
WorldPerks Funds, P.O. Box 9030, Boston, MA 02205-9030.
[LOGO]
<PAGE>
From time to time, the funds' 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.
Performance data represent past performance and are not a guarantee of future
performance. The funds' yields will fluctuate. Each fund seeks to maintain a
constant net asset value of $1.00 per share; there can be no assurance that it
can do so on a continuing basis. An investment in each fund is neither insured
nor guaranteed by the U.S. government.
WorldPerks is a registered trademark of Northwest Airlines, Inc. Northwest
Airlines may change the WorldPerks program rules, program partners, regulations,
benefits, conditions of participation or mileage levels, in whole or in part, at
any time, with or without notice, even though changes may affect the values of
mileage or FlyWrite(sm) certificates already accumulated.
The views of the funds' management are as of the date of the letters and
portfolio holdings described in this document are as of December 31, 1998; these
views and portfolio holdings may have changed subsequent to these dates. Nothing
in this document is a recommendation to purchase or sell securities.
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1998
- --------------------------------------------------------------------------------
February 5, 1999
Dear Shareholder:
The objective of Warburg Pincus WorldPerks Money Market Fund is high
current income consistent with preservation of capital and liquidity.
As a money-market fund, the fund immediately adopted a very conservative
posture with respect to the creditworthiness of the investments held in the
portfolio, investing in high-quality U.S. government securities and commercial
paper. We believe this stance will serve the fund well, especially given the
increasing complexity of markets in the U.S. and abroad.
As of December 31, the fund's net assets were $12.9 million. Its annualized
seven-day yield was 4.41% (without waivers and/or reimbursements, the fund's
annualized seven-day yield would have been 3.38%), and its seven-day average
weighted maturity was 19 days.
Going forward, the fund will continue to emphasize high-quality securities
in an effort to provide competitive returns without compromising safety and
stability of principal. We are committed to providing both a rewarding
investment experience to our shareholders and an attractive, convenient means of
accumulating WorldPerks* Bonus Miles, which can be used for free and discounted
award travel on Northwest Airlines, Continental Airlines, KLM Royal Dutch
Airlines and other WorldPerks partner airlines. We appreciate your continued
support and investment in the fund.
Eugene L. Podsiadlo BlackRock Institutional Management Corporation
President Sub-Investment Adviser
Warburg Pincus
WorldPerks Funds
*WorldPerks is a registered trademark of Northwest Airlines, Inc.
1
<PAGE>
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1998
- --------------------------------------------------------------------------------
February 5, 1999
Dear Shareholder:
The objective of Warburg Pincus WorldPerks Tax Free Money Market Fund is
high current income exempt from federal personal income taxes consistent with
preservation of capital and liquidity.
Most of the fund's investments through the reporting period were in
municipal variable-rate demand notes, which on average had yields that exceeded
the yields on other short-term instruments. The emphasis on these securities
proved particularly advantageous at year end, as the yields on these notes
adjusted upward by 50 to 100 basis points.
The fund's net assets on December 31 were $10.6 million. Its average seven-
day yield was 3.13% (without waivers and/or reimbursements, the fund's
annualized seven-day yield would have been 1.95%), and its seven-day average
weighted maturity was 4 days.
Going forward, we will continue to emphasize high-quality municipal
securities in an effort to provide competitive after-tax returns without
compromising stability of principal. We are committed to providing both a
rewarding investment experience to our shareholders and an attractive,
convenient means of accumulating WorldPerks* Bonus Miles, which can be used for
free and discounted award travel on Northwest Airlines, Continental Airlines,
KLM Royal Dutch Airlines and other WorldPerks partner airlines. We appreciate
your continued support and investment in the fund.
Eugene L. Podsiadlo BlackRock Institutional Management Corporation
President Sub-Investment Adviser
Warburg Pincus
WorldPerks Funds
*WorldPerks is a registered trademark of Northwest Airlines, Inc.
The fund's income may be subject to state and city taxes and, for certain
investors, the federal alternative minimum tax.
2
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET FUND
STATEMENT OF NET ASSETS
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
--- ------------- -------- ----- -----
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (55.3%)
Asset Backed Securities (6.2%)
$ 400,000 Citibank Credit Card Master Trust (NR, P-1) 01/05/99 5.150 $ 399,771
400,000 Beta Finance Inc. (NR, P-1) 01/22/99 5.140 398,801
-----------
798,572
-----------
Beverages (2.2%)
290,000 Coca-Cola Co. (A-3, P-1) 01/11/99 5.160 289,584
-----------
Business Credit Institutions (Finance Leasing
Company) (3.8%)
500,000 Enterprise Funding Corp. (NR, P-1) 01/27/99 5.220 498,115
-----------
Electric and Other Services Combined (2.6%)
340,000 Wisconsin Electric Power Co. (A-3, P-1) 01/14/99 5.250 339,355
-----------
Finance Lessors (3.9%)
500,000 IBM Credit Corp. (NR, P-1) 01/15/99 5.050 499,018
-----------
Fire, Marine & Casualty Insurance (2.6%)
330,000 AIG Funding Inc. (A-3, P-1) 01/07/99 5.150 329,717
-----------
Life Insurance (5.7%)
400,000 Hancock Capital (NR, P-1) 01/11/99 5.130 399,430
340,000 MetLife Funding Inc. (NR, P-1) 01/15/99 5.250 339,306
-----------
738,736
-----------
Amusement & Recreation (2.5%)
330,000 Walt Disney Co. (A-3, P-1) 02/09/99 5.050 328,519
-----------
Personal Credit Institutions (6.2%)
400,000 Ford Motor Credit Corp. (NR, P-1) 01/22/99 5.130 398,803
400,000 General Motors Acceptance Corp. (NR, P-1) 01/26/99 5.140 398,572
-----------
797,375
-----------
Petroleum Refining (2.6%)
330,000 BP America, Inc. (A-3, P-1) 01/06/99 5.150 329,764
-----------
Pharmaceutical Preparations (2.1%)
275,000 Johnson & Johnson (NR, P-1) 04/20/99 4.750 271,045
-----------
Primary Production of Aluminum (2.2%)
290,000 Aluminum Company of America (A-3, P-1) 01/11/99 5.220 289,580
-----------
Retail Merchandising (3.1%)
400,000 Block Financial (NR, P-1) 01/08/99 5.150 399,599
-----------
Short-Term Business Credit Institutions (7.0%)
500,000 Caterpillar Financial Services Corp. (A-3, P-1) 01/08/99 5.050 499,509
400,000 Penney (JC) Funding Corp. (NR, P-1) 01/14/99 5.150 399,256
-----------
898,765
-----------
Telephone Communications (2.6%)
340,000 Ameritech Corp. (A-3, P-1) 01/20/99 5.010 339,101
-----------
TOTAL COMMERCIAL PAPER
(Cost $7,146,845) 7,146,845
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
3
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET FUND
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
--- ------------- -------- ----- -----
<C> <S> <C> <C> <C> <C>
AGENCY OBLIGATIONS (17.2%)
$2,220,000 Federal National Mortgage Association
(Cost $2,218,120) (Aaa, AAA) 01/07/99 5.080 $ 2,218,120
-----------
MEDIUM TERM NOTES (4.6%)
Personal Credit Institutions (1.5%)
200,000 Associates Corp. of North America (A-3, NR) 03/15/99 6.000 200,315
-----------
Security Brokers & Dealers (3.1%)
400,000 Merrill Lynch & Co. (A-1+, P-1) 03/30/99 6.375 401,084
-----------
TOTAL MEDIUM TERM NOTES
(Cost $601,399) 601,399
-----------
SHORT-TERM INVESTMENTS (22.4%)
2,900,000 Repurchase Agreement with Morgan Stanley & Co.
Inc. dated 12/31/98 at 5.470% to be
repurchased at $2,901,763 on 01/04/99.
(Collaterized by $2,973,884, U.S. Treasury Bill
at 5.470%, due 02/04/99. Market value of
collateral is $2,990,000.) (Cost $2,900,000) 01/04/99 5.470 2,900,000
-----------
TOTAL INVESTMENTS AT VALUE (99.5%)
(Cost $12,866,364*) 12,866,364
OTHER ASSETS IN EXCESS OF LIABILITIES (0.5%) 59,142
-----------
NET ASSETS (100%) (applicable to 12,925,394 shares) $12,925,506
===========
NET ASSETS VALUE, offering and redemption price per share
($12,925,506 divided by 12,925,394) $ 1.00
===========
</TABLE>
INVESTMENT ABBREVIATIONS
NR = Not Rated
- --------------------------------------------------------------------------------
= Credit ratings given by Moody's Investors Service, Inc. and Standard & Poor's
Ratings Services are unaudited.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
4
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET FUND
MATURITY SCHEDULE OF PORTFOLIO
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
MATURITY SCHEDULE
(DAYS) PAR PERCENTAGE OF PORTFOLIO
----------------- ----------- ------------------------
(CUMULATIVE)
1-7 $ 6,180,000 48.0% 48.0%
8-14 2,620,000 20.3 68.3
15-30 2,880,000 22.3 90.6
31-60 330,000 2.6 93.2
61-90 600,000 4.7 97.9
91-120 275,000 2.1 100.0
121-150 0 0.0 100.0
Over 150 0 0.0 100.0
----------- -----
$12,885,000 100.0%
=========== =====
Average Weighted Maturity -- 16.60 days
See Accompanying Notes to Financial Statements.
5
<PAGE>
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
--- ------------- -------- ----- -----
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (99.2%)
CALIFORNIA (1.9%)
$ 200,000 California Finance Authority Pollution
Control Revenue Bond (Pacific Gas and
Electric Company) (Bank of America LOC)
VRDN+ (Cost $200,000) (A-1+, NR) 01/01/99 5.000 $ 200,000
------------
COLORADO (4.7%)
500,000 Colorado Student Obligation Bond Authority
Student Loan Revenue Bond Series 1997D (A-1+,
(SLMA LOC) (Cost $500,000) VMIG-1) 01/07/99 3.950 500,000
------------
GEORGIA (4.7%)
500,000 Putnam County, Development Authority of
Pollution Control Revenue Bonds (Georgia
Power Co. Plant Bowen Project) (Cost
$500,000) (NR, VMIG-1) 01/01/99 5.050 500,000
------------
INDIANA (4.7%)
500,000 Indiana Municipal Power Agency Power
Supply System Refunding Revenue Bonds (A-1+,
(Toronto Dominion LOC) (Cost $500,000) VMIG-1) 01/07/99 3.950 500,000
------------
IOWA (4.7%)
500,000 Iowa Finance Authority Solid Waste
Disposal Revenue Bond (Cedar River Paper
Co. Project) (Bank of Nova Scotia LOC)
(Cost $500,000) (A-1+, P-1) 01/01/99 5.150 500,000
------------
LOUISIANA (1.9%)
200,000 Louisiana Public Facilities Authority,
Hospital Revenue, Willis-Knighton Medical
Center (AMBAC Insured) (final maturity (A-1+,
9/1/27) (Cost $200,000) VMIG-1) 01/07/99 4.000 200,000
------------
MARYLAND (4.7%)
500,000 Maryland Health and Higher Education
Facility Authority Revenue Bond (Catholic (A-1+,
Health Initiatives) (Cost $500,000) VMIG-1) 01/07/99 3.900 500,000
------------
MICHIGAN (4.7%)
500,000 Delta County, Michigan Economic
Development Corp. Environmental Revenue
Bond VRDN+ (A-1+,
(Cost $500,000) VMIG-1) 01/04/99 5.050 500,000
------------
MISSISSIPPI (2.9%)
300,000 Jackson County, Mississippi, Port
Facilities Revenue Refunding Bonds
(Chevron Corp. USA Income Project) VRDN+
(Cost $300,000) (NR, P-1) 01/01/99 5.100 300,000
------------
MISSOURI (4.7%)
500,000 Kansas City, Industrial Development Auth.
Multifamily Housing Revenue Ref. Bonds
(Sleepy Hollow Apts. Project) (Federal
National Mortgage Assoc. LOC) (Cost
$500,000) (A-1+, NR) 01/07/99 4.250 500,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
6
<PAGE>
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
--- ------------- -------- ----- -----
<C> <S> <C> <C> <C> <C>
NEVADA (4.7%)
$ 500,000 Clark County Airport Improvement Revenue
Series 1993A (National Westminster LOC) (A-1+,
VRDN+ (Cost $500,000) VMIG-1) 01/07/99 3.850 $ 500,000
------------
NEW MEXICO (1.0%)
100,000 City of Farmington Pollution Control
Revenue Refunding Bonds Series 1994A
(Arizona Public Service Company) (Cost (A-1+,
$100,000) VMIG-1) 01/01/99 5.100 100,000
------------
NEW YORK (3.8%)
200,000 Long Island Power Authority Electric
System Subordinated Revenue Bond (A-1+,
(ABM-AMRO Bank N.V. LOC) VMIG-1) 01/01/99 5.100 200,000
200,000 New York City General Obligation 1994
Series B (Morgan Guaranty Trust LOC) (A-1+,
VRDN+ VMIG-1) 01/01/99 5.000 200,000
------------
TOTAL NEW YORK (Cost $400,000) 400,000
------------
NORTH CAROLINA (22.7%)
500,000 Charlotte Airport Refunding Revenue Bond (A-1+,
Series 1997A (MBIA Insurance LOC) VRDN+ VMIG-1) 01/07/99 3.950 500,000
500,000 Mecklenburg County General Obligation (A-1+,
Series 1996B VRDN+ VMIG-1) 01/07/99 3.950 500,000
500,000 North Carolina Medical Care Commission
Series 1995 (Moses H. Cone Memorial
Hospital Project) (Wachovia Bank LOC)
VRDN+ (A-1+, NR) 01/07/99 4.000 500,000
400,000 Raleigh-Durham Airport Authority Special
Facility Refunding Revenue Bond (American
Airlines, Inc. Project) (Royal Bank of
Canada LOC) (A-1+, NR) 01/01/99 5.100 400,000
500,000 University of North Carolina Revenue Bond
Series 1997C (Chapel Parking System Board
of Governors of the UNC Project) (A-1+,
(NationsBank LOC) VRDN+ VMIG-1) 01/07/99 3.950 500,000
------------
TOTAL NORTH CAROLINA (Cost $2,400,000) 2,400,000
------------
OHIO (1.0%)
100,000 Ohio Water Development Authority Pollution
Control Revenue Bond Series 1997B
(Cleveland Electric Co. Project) (FNB
Chicago LOC) VRDN+ (Cost $100,000) (A-1+, P-1) 01/07/99 4.100 100,000
------------
PENNSYLVANIA (4.7%)
500,000 Philadelphia, Pennsylvania Water & Waste (A-1+,
Revenue Bond Series 1997B (Cost $500,000) VMIG-1) 01/07/99 3.850 500,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR (MOODY'S/S&P) MATURITY RATE% VALUE
--- ------------- -------- ----- -----
<C> <S> <C> <C> <C> <C>
TEXAS (4.7%)
$ 500,000 Harris County Industrial Development Corp.
(Shell Oil Co. Project) VRDN+ (Cost (A-1+,
$500,000) VMIG-1) 01/01/99 4.900 $ 500,000
------------
VIRGINIA (4.7%)
500,000 Alexandria IDA RB (Super & Curr Project)
Series 1997 (First Union National Bank of
North Carolina LOC) VRDN+ (Cost $500,000) (A-1, NR) 01/07/99 4.000 500,000
------------
WYOMING (12.3%)
500,000 Lincoln County Pollution Control Bonds
(Exxon Project) (A-1+, P-1) 01/01/99 5.050 500,000
300,000 Sublette County, Wyoming, Pollution
Control Revenue Bond (Exxon Corp.
Project) VRDN+ (A-1+, NR) 01/01/99 5.050 300,000
500,000 Unita County Pollution Control Revenue
Bond Series 1993 (Chevron) VRDN+ (NR, P-1) 01/01/99 5.100 500,000
------------
TOTAL WYOMING (Cost $1,300,000) 1,300,000
------------
TOTAL INVESTMENTS AT VALUE (99.2%) (Cost $10,500,000*) 10,500,000
OTHER ASSETS IN EXCESS OF LIABILITIES (0.8%) 88,560
-----------
NET ASSETS (100.0%) (applicable to 10,588,560 shares) $10,588,560
===========
NET ASSET VALUE, offering and redemption price per share
($10,588,560 divided by 10,588,560) $ 1.00
===========
</TABLE>
INVESTMENT ABBREVIATIONS
IDA = Industrial Development Agency
LOC = Letter of Credit
NR = Not Rated
VRDN = Variable Rate Demand Notes
- --------------------------------------------------------------------------------
= Credit ratings given by Moody's Investors Service, Inc. and Standard & Poor's
Ratings Services are unaudited.
+ The interest rate shown is the rate as of December 31, 1998 and the maturity
date shown is the longer of the next interest readjustment date or the date
the principal amount owed can be recovered through demand.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
8
<PAGE>
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
MATURITY SCHEDULE OF PORTFOLIO
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
MATURITY SCHEDULE
(DAYS) PAR PERCENTAGE OF PORTFOLIO
----------------- ----------- ------------------------
(CUMULATIVE)
1-7 $10,500,000 100.0% 100.0%
8-14 0 0.0 100.0
15-30 0 0.0 100.0
31-60 0 0.0 100.0
61-90 0 0.0 100.0
91-120 0 0.0 100.0
121-150 0 0.0 100.0
Over 150 0 0.0 100.0
----------- -----
$10,500,000 100.0%
=========== =====
Average Weighted Maturity -- 4.46 days
See Accompanying Notes to Financial Statements.
9
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET AND
TAX FREE MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLD PERKS WORLDPERKS TAX FREE
MONEY MARKET FUND* MONEY MARKET FUND*
------------------ -------------------
<S> <C> <C>
INVESTMENT INCOME $152,539 $ 88,703
-------- --------
EXPENSES:
Investment advisory 11,885 11,091
Administrative Services 6,126 5,730
Distribution Fees 7,419 6,932
Registration 6,000 6,000
Audit 5,000 5,000
Blue sky 5,000 5,000
Legal 5,000 5,000
Custodian 3,000 3,000
Transfer agent 1,561 1,556
Directors 1,250 1,250
Printing 1,010 1,000
Miscellaneous 1,000 1,000
-------- --------
54,251 52,559
Less: fees waived, expenses reimbursed and transfer
agent fee offsets (36,890) (36,286)
-------- --------
Total Expenses 17,361 16,273
-------- --------
Net Investment Income 135,178 72,430
-------- --------
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS:
Net realized gain from security transaction 112 0
-------- --------
Net increase in net assets resulting from
operations $135,290 $ 72,430
======== ========
</TABLE>
* For the period October 1, 1998 (Commencement of Operations) through
December 31, 1998.
See Accompanying Notes to Financial Statements.
10
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET AND
WORLDPERKS TAX FREE MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLDPERKS WORLDPERKS TAX FREE
MONEY MARKET MONEY MARKET
FUND* FUND*
----------------- -------------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 135,178 $ 72,430
Net realized gain from security transactions 112 0
----------- -----------
Net increase in net assets resulting from
operations 135,290 72,430
----------- -----------
FROM DISTRIBUTIONS:
Dividends from net investment income (135,178) (72,430)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (AT $1 PER
SHARE):
Proceeds from sale of shares 19,852,748 13,444,874
Reinvested dividends 121,553 62,708
Net asset value of shares redeemed (7,148,907) (3,019,022)
----------- -----------
Net increase in net assets from capital
share transactions 12,825,394 10,488,560
----------- -----------
Net increase in net assets 13,825,506 10,488,560
NET ASSETS:
Beginning of period 100,000 100,000
----------- -----------
End of period $12,925,506 $10,588,560
=========== ===========
</TABLE>
* For the period October 1, 1998 (Commencement of Operations) through
December 31, 1998.
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
1998(1)
PERIOD ENDED: -------
PER-SHARE DATA:
Net asset value, beginning of period $ 1.00
-------
INVESTMENT ACTIVITIES:
Net investment income .0115
-------
DISTRIBUTIONS:
From net investment income (.0115)
-------
NET ASSET VALUE, END OF PERIOD $ 1.00
=======
Total return 1.15%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $12,926
Ratios of expenses to average net assets .58%3,4
Ratio of net income to average net assets 5.13%(4)
Decrease reflected in above operating expense ratio due
to waivers/reimbursements 1.24%(4)
- --------------------------------------------------------------------------------
(1) For the period October 1, 1998 (Commencement of Operations)
through December 31, 1998.
(2) Non annualized.
(3) Interest earned on uninvested cash balances is used to
offset portions of the transfer agent expense. These
arrangements had no effect on the fund's expense ratio.
(4) Annualized.
See Accompanying Notes to Financial Statements.
12
<PAGE>
WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
1998(1)
PERIOD ENDED: -------
PER-SHARE DATA
Net asset value, beginning of period $ 1.00
-------
INVESTMENT ACTIVITIES:
Net investment income .0066
-------
DISTRIBUTIONS:
From net investment income (.0066)
-------
NET ASSET VALUE, END OF PERIOD $ 1.00
=======
Total return .66%(2)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $10,589
Ratios of expenses to average net assets .58%3,4
Ratio of net income to average net assets 2.91%(4)
Decrease reflected in above operating expense ratios due
to waivers/reimbursements 1.31%(4)
- --------------------------------------------------------------------------------
(1) For the period October 1, 1998 (Commencement of Operations)
through December 31, 1998.
(2) Non annualized.
(3) Interest earned on uninvested cash balances is used to
offset portions of the transfer agent expense. These
arrangements had no effect on the fund's expense ratio.
(4) Annualized.
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET AND
WORLDPERKS TAX FREE MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus WorldPerks Money Market Fund (the "WorldPerks Money
Market Fund") and the Warburg Pincus WorldPerks Tax Free Money Market Fund (the
"WorldPerks Tax Free Money Market Fund") are registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as diversified, open-end
management investment companies.
Investment objectives for each fund are as follows: the WorldPerks Money
Market Fund is designed to provide investors with high current income consistent
with liquidity and stability of principal; the WorldPerks Tax Free Money Market
Fund is designed to provide investors with as high a level of current income
that is exempt from federal personal income taxes as is consistent with
preservation of capital and liquidity.
The net asset value of each fund is determined as of noon and the close of
regular trading on the New York Stock Exchange. Each fund's investments are
valued under the amortized cost method, which approximates market value.
Amortized cost involves valuing a portfolio instrument at its cost initially and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. 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 are declared daily and paid monthly.
Distributions of net capital gains, if any, are declared and paid annually,
although the WorldPerks Money Market Fund may declare and pay short-term capital
gains, if any, periodically as the Board of Directors determines. 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 taxes as it is each fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code of 1986, as amended, and
make the requisite distributions to its shareholders which will be sufficient to
relieve it from federal income and excise taxes.
14
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET AND
WORLDPERKS TAX FREE MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
Each fund may enter into repurchase agreement transactions. Under the terms
of a typical repurchase agreement, a fund acquires an underlying security
subject to an obligation of the seller to repurchase. The collateral is in the
fund's possession through its custodian. 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 counterparty to
the agreement, retention of the collateral may be subject to legal proceedings.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
The funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of their
transfer agent expense. For the period ended December 31, 1998, each fund
received credits or reimbursements under this arrangement as follows:
FOR THREE
MONTHS ENDED
FUND DECEMBER 31, 1998
- ---- -----------------
WorldPerks Money Market $61
WorldPerks Tax Free Money Market 56
2. INVESTMENT ADVISER AND SUB-ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg Pincus Asset Management, Inc. ("Warburg"), which is indirectly
controlled by Warburg, Pincus & Co., serves as each fund's investment adviser.
For its investment advisory services, Warburg receives a fee calculated at an
annual rate of .40% of each fund's average daily net assets. For the period
ended December 31, 1998, investment advisory fees and voluntary waivers were as
follows:
<TABLE>
<CAPTION>
GROSS NET EXPENSE
FUND ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENT
- ---- ------------ -------- ------------ -------------
<S> <C> <C> <C> <C>
WorldPerks Money Market $11,885 $(11,885) $ 0 $(19,002)
WorldPerks Tax Free Money Market 11,091 (11,091) 0 (19,593)
</TABLE>
BlackRock Institutional Management Corporation ("BIMC"), formerly PNC
Institutional Management Corporation, a wholly owned subsidiary of PNC
15
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET AND
WORLDPERKS TAX FREE MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1998
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER AND SUB-ADVISER, CO-ADMINISTRATORS AND
DISTRIBUTOR -- (CONT'D)
Bank, N.A., serves as each fund's sub-investment adviser. From its investment
advisory fee, Warburg pays BIMC a fee. No compensation is paid by the WorldPerks
Funds to BIMC for its sub-investment advisory service.
Credit Suisse Asset Management Limited ("CSAM"), a wholly owned subsidiary
of Credit Suisse Group, and PFPC Inc. ("PFPC"), an indirect, wholly-owned
subsidiary of PNC Bank Corp. serve as each fund's co-administrator. For its
administrative services, CSAM currently receives a fee calculated at an annual
rate of .10% of each fund's average daily net assets. For the period ended
December 31, 1998, administrative services fees earned and voluntarily waived by
CSAM were as follows:
<TABLE>
<CAPTION>
CO-ADMINISTRATION NET
FUND FEE WAIVER ADMINISTRATION FEE
- ---- ----------------- -------- ------------------
<S> <C> <C> <C>
WorldPerks Money Market $ 2,971 $ (2,971) $ 0
WorldPerks Tax Free Money Market 2,773 (2,773) 0
</TABLE>
For administrative services, PFPC currently receives a fee calculated at an
annual rate of .10% on each fund's first $500 million in average daily net
assets, .075% on the next $1 billion in average daily net assets, and .05% of
average daily net assets in excess of $1.5 billion.
For the year ended December 31, 1998, administrative service fees earned
and voluntarily waived by PFPC (including out-of-pocket expenses) were as
follows:
<TABLE>
<CAPTION>
CO-ADMINISTRATION NET
FUND FEE WAIVER CO-ADMINISTRATION FEE
- ---- ----------------- ------- ---------------------
<S> <C> <C> <C>
WorldPerks Money Market $3,155 $(2,971) $184
WorldPerks Tax Free Money Market 2,957 (2,773) 184
</TABLE>
Counsellors Securities Inc. ("CSI"), also a wholly owned subsidiary of
Warburg, serves as each fund's distributor. For its distribution services, CSI
receives a fee calculated at an annual rate of .25% of the average daily net
assets of each fund. For the period ended December 31, 1998, shareholder
servicing and distribution fees earned by CSI were as follows:
FUND DISTRIBUTION FEE
- ---- ----------------
WorldPerks Money Market $ 7,419
WorldPerks Tax Free Money Market 6,932
16
<PAGE>
WARBURG PINCUS WORLDPERKS MONEY MARKET AND
WORLDPERKS TAX FREE MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1998
- --------------------------------------------------------------------------------
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of each fund were as follows:
<TABLE>
<CAPTION>
WORLDPERKS
WORLDPERKS TAX FREE
MONEY MARKET MONEY MARKET
-------------- --------------
FOR THE PERIOD OCTOBER 1, 1998
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1998
-------------------------------
<S> <C> <C>
Shares sold 19,852,748 13,444,874
Shares issued to shareholders on reinvestment of dividends 121,553 62,708
Shares redeemed (7,148,907) (3,019,022)
-------------- --------------
Net increase in shares 12,825,394 10,488,560
============== ==============
</TABLE>
4. LIABILITIES
At December 31, 1998 the funds had the following liabilities:
<TABLE>
<CAPTION>
WORLDPERKS WORLDPERKS TAX FREE
MONEY MARKET MONEY MARKET FUND
------------ -------------------
<S> <C> <C>
Dividends Payable $ 2,491 $ 2,881
</TABLE>
5. NET ASSETS
At December 31, 1998, capital contributions and accumulated net realized
loss from security transactions have been adjusted for permanent book/tax
differences.
Net Assets at December 31, 1998, consisted of the following:
<TABLE>
<CAPTION>
WORLDPERKS WORLDPERKS TAX FREE
MONEY MARKET MONEY MARKET
------------ -------------------
<S> <C> <C>
Capital contributed, net $12,925,394 $10,588,560
Accumulated net realized gain from security transactions 112 0
----------- -----------
Net assets $12,925,506 $10,588,560
=========== ===========
</TABLE>
17
<PAGE>
WARBURG PINCUS WORLDPERKS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
WARBURG, PINCUS WORLDPERKS MONEY MARKET FUND, INC. AND
WARBURG, PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND, INC.:
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Warburg, Pincus WorldPerks Money Market Fund, Inc. and Warburg, Pincus
WorldPerks Tax Free Money Market Fund, Inc. (the "Funds") at December 31, 1998,
the results of their operations, and the changes in their net assets and their
financial highlights for the period October 1, 1998 (commencement of operations)
to December 31, 1998, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Funds'
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 5, 1999
18
<PAGE>
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WARBURG PINCUS WORLDPERKS FUNDS
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874) o www.warburg.com
COUNSELLORS SECURITIES INC., DISTRIBUTOR FFNWF-2-1298
