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WARBURG PINCUS FUNDS
[GLOBE LOGO]
ANNUAL REPORT
FEBRUARY 28, 1995
[ ] WARBURG PINCUS CASH RESERVE FUND
[ ] WARBURG PINCUS NEW YORK TAX EXEMPT FUND
A prospectus containing more complete information, including management fees and
expenses, may be obtained by calling 1-800-257-5614 or by writing to Warburg
Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030. Investors should read the
prospectus carefully before investing.
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WARBURG PINCUS CASH RESERVE FUND
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Dear Shareholder:
Short-term interest rates rose dramatically during the fiscal year ended
February 28, 1995, reversing a five-year downward trend. The Federal Reserve
moved aggressively to slow the growth of the economy and counter the
inflationary threat posed by diminishing productive capacity in the present
business cycle. As a result of this restrictive monetary policy, yields on
three-month Treasury bills rose from 3.30% to 6.06% during the period.
Warburg Pincus Cash Reserve Fund (the 'Fund') had a 30-day annualized
current yield of 5.63% as of February 28, 1995. Net assets of the Fund were
$403.2 million on February 28, 1995. For the seven-day period ended February 28,
1995, the net annualized yield was 5.65%, up from 2.87% a year earlier. The
Fund's average maturity on February 28, 1995, was 47 days.
Moving forward, evidence of slowing demand in the economy may obviate the
need for further rate increases. In response, the Fund will continue to purchase
only the highest-quality securities in order to provide competitive returns
without compromising stability of principal. We appreciate your continued
support and investment in the Fund.
Dale C. Christensen
Dale C. Christensen
President
1
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WARBURG PINCUS NEW YORK TAX EXEMPT FUND
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Dear Shareholder:
Tax-exempt money fund yields rose substantially during the fiscal year
ended February 28, 1995. The Donoghue's all tax-free category produced a
12-month total return of 2.61%, an increase of 66 basis points over the prior
year. The interest-rate environment also resulted in shorter average weighted
maturities and strong growth overall in money fund assets during the period.
The Federal Reserve continued to ratchet up interest rates throughout the
past fiscal year as the economy posted strong growth. Capacity utilization and
unemployment figures moved into territory historically associated with a pickup
in inflation. The current cycle of Fed tightening is probably at or close to
completion; however, the Fed must now concentrate on the hazards of a slowdown
in the economy while continuing to maintain its inflation-fighting posture.
Current data remains inconclusive on the question of whether the Federal Reserve
has successfully engineered a 'soft landing' for the economy.
Warburg Pincus New York Tax Exempt Fund (the 'Fund') seeks to invest in
high-quality issues, the income from which is exempt from Federal, New York
State, and New York City personal income taxes. The general credit within New
York is stable to improving as the local economies move out of recession into
recovery.
The Fund had a 30-day annualized current yield of 3.18% as of February 28,
1995. The Fund, as of February 28, 1995, had net assets of $87.7 million. The
average weighted maturity of the Fund's portfolio was 32 days.
The Fund will continue to seek current income that is exempt from Federal,
New York State, and New York City personal income taxes, as is consistent with
preservation of capital and liquidity. We appreciate your continued support and
investment in the Fund.
Dale C. Christensen
Dale C. Christensen
President
2
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS
February 28, 1995
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<TABLE>
<CAPTION>
PAR SECURITY DESCRIPTION MATURITY RATE VALUE
------------ ---------------------------------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
AGENCY OBLIGATIONS (25.3%)
Federal Farm Credit Bank (6.2%)
$ 5,000,000 Federal Farm Credit Bank 03/20/95 5.280% $ 4,986,067
5,000,000 Federal Farm Credit Bank 05/01/95 6.200 5,000,000
10,000,000 Federal Farm Credit Bank 06/01/95 6.050 10,000,000
5,000,000 Federal Farm Credit Bank 08/01/95 6.650 5,000,000
------------
Total Federal Farm Credit Bank (Cost $24,986,067) 24,986,067
------------
Federal National Mortgage Association (2.0%)
3,000,000 Federal National Mortgage Association
Discount Note 03/22/95 5.370 2,990,603
5,000,000 Federal National Mortgage Association
Discount Note 03/22/95 5.400 4,984,250
------------
Total Federal National Mortgage Association (Cost $7,974,853) 7,974,853
------------
Student Loan Marketing Association (17.1%)
15,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.090 15,000,000
10,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.210 10,002,482
5,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.260 5,002,349
5,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.260 5,013,472
10,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.260 10,004,689
10,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.260 10,006,283
14,000,000 Student Loan Marketing Association
Floating Rate Note + 03/07/95 6.260 14,015,346
------------
Total Student Loan Marketing Association (Cost $69,044,621) 69,044,621
------------
TOTAL AGENCY OBLIGATIONS (Cost $102,005,541) 102,005,541
------------
</TABLE>
See Accompanying Notes to Financial Statements.
3
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
------------ -------------------------------------- -------------- --------- ----- ------------
BANKERS' ACCEPTANCES (29.7%)
<C> <S> <C> <C> <C> <C>
Domestic Bankers' Acceptances (7.7%)
$1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 03/17/95 6.000% $ 997,333
1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 03/21/95 6.000 996,667
1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 03/22/95 5.980 996,512
1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 03/27/95 6.000 995,667
1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 03/30/95 6.000 995,167
2,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 05/02/95 6.160 1,978,782
1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 07/05/95 6.510 977,215
1,000,000 Bank of America National Trust &
Savings Association (P-1/A-1) 07/10/95 6.280 977,148
1,000,000 Barclays Bank PLC (NR/A-1+) 03/14/95 5.200 998,122
500,000 Barclays Bank PLC (NR/A-1+) 05/18/95 6.200 493,283
550,000 Barclays Bank PLC (NR/A-1+) 07/25/95 6.400 535,724
3,051,000 CoreStates Bank NA (P-1/A-1) 03/31/95 6.070 3,035,567
2,000,000 CoreStates Bank NA (P-1/A-1) 04/25/95 5.850 1,982,125
1,000,000 CoreStates Bank NA (P-1/A-1) 07/26/95 6.400 973,867
2,000,000 CoreStates Bank NA (P-1/A-1) 08/03/95 6.450 1,944,458
1,000,000 First Chicago Corp. (P-1/A-1) 05/18/95 6.200 986,567
1,500,000 First Chicago Corp. (P-1/A-1) 05/19/95 6.200 1,479,592
2,500,000 First Chicago Corp. (P-1/A-1) 05/26/95 6.150 2,463,271
500,000 First Chicago Corp. (P-1/A-1) 06/05/95 6.130 491,827
1,000,000 First Chicago Corp. (P-1/A-1) 06/12/95 6.130 982,461
2,500,000 First Chicago Corp. (P-1/A-1) 06/19/95 6.270 2,452,104
1,000,000 First Chicago Corp. (P-1/A-1) 07/05/95 6.430 977,495
500,000 First Chicago Corp. (P-1/A-1) 07/25/95 6.310 487,205
2,000,000 First Fidelity Bank (P-1/A-1) 05/22/95 6.050 1,972,439
------------
Total Domestic Bankers' Acceptances (Cost $31,170,598) 31,170,598
------------
</TABLE>
See Accompanying Notes to Financial Statements.
4
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
------------ -------------------------------------- -------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
BANKERS' ACCEPTANCES (CONT'D)
Yankee Bankers' Acceptances (22.0%)
$1,000,000 Bank of Tokyo (P-1/A-1) 03/14/95 5.900% $ 997,869
5,000,000 Bank of Tokyo (P-1/A-1) 03/20/95 6.000 4,984,167
3,000,000 Bank of Tokyo (P-1/A-1) 03/28/95 6.020 2,986,455
3,000,000 Bank of Tokyo (P-1/A-1) 04/21/95 6.130 2,973,948
2,000,000 Bank of Tokyo (P-1/A-1) 05/03/95 6.070 1,978,755
1,900,000 Dai-Ichi Kangyo Bank (P-1/A-1) 03/01/95 6.030 1,900,000
1,000,000 Dai-Ichi Kangyo Bank (P-1/A-1) 03/08/95 6.010 998,831
1,300,000 Dai-Ichi Kangyo Bank (P-1/A-1) 03/09/95 6.030 1,298,258
3,000,000 Dai-Ichi Kangyo Bank (P-1/A-1) 03/17/95 6.050 2,991,933
1,400,000 Dai-Ichi Kangyo Bank (P-1/A-1) 03/24/95 6.040 1,394,598
1,700,000 Dai-Ichi Kangyo Bank (P-1/A-1) 04/21/95 6.000 1,685,550
5,000,000 Dai-Ichi Kangyo Bank (P-1/A-1) 04/24/95 6.000 4,955,000
4,900,000 Fuji Bank (P-1/A-1) 03/31/95 6.070 4,875,214
3,000,000 Industrial Bank of Japan (P-1/A-1) 03/15/95 6.080 2,992,907
1,750,000 Mitsubishi Bank (P-1/A-1+) 03/20/95 6.000 1,744,458
1,950,000 Mitsubishi Bank (P-1/A-1+) 03/22/95 6.000 1,943,175
5,000,000 Mitsubishi Bank (P-1/A-1+) 03/23/95 6.050 4,981,514
2,350,000 Mitsubishi Bank (P-1/A-1+) 03/27/95 6.280 2,339,341
2,000,000 Mitsubishi Bank (P-1/A-1+) 03/29/95 6.000 1,990,667
2,250,000 Mitsubishi Bank (P-1/A-1+) 03/30/95 6.230 2,238,708
1,300,000 Mitsubishi Bank (P-1/A-1+) 05/08/95 6.160 1,284,874
950,000 Mitsubishi Bank (P-1/A-1+) 05/15/95 6.300 937,531
1,250,000 Mitsubishi Bank (P-1/A-1+) 05/26/95 6.160 1,231,606
1,500,000 Sanwa Bank (P-1/A-1+) 03/09/95 6.050 1,497,983
5,800,000 Sanwa Bank (P-1/A-1+) 03/27/95 6.030 5,774,741
3,350,000 Sanwa Bank (P-1/A-1+) 03/27/95 6.040 3,335,387
2,450,000 Sanwa Bank (P-1/A-1+) 04/03/95 6.020 2,436,480
1,250,000 Sanwa Bank (P-1/A-1+) 04/06/95 6.000 1,242,500
5,000,000 Sanwa Bank (P-1/A-1+) 05/15/95 6.100 4,936,458
761,000 Societe Generale (P-1/A-1+) 03/31/95 6.200 757,068
1,672,000 Societe Generale (P-1/A-1+) 04/20/95 6.170 1,657,672
1,799,000 Societe Generale (P-1/A-1+) 05/25/95 6.130 1,772,962
3,100,000 Societe Generale (P-1/A-1+) 05/30/95 6.490 3,049,703
1,000,000 Societe Generale (P-1/A-1+) 06/02/95 6.480 983,260
2,390,000 Societe Generale (P-1/A-1+) 06/27/95 6.120 2,342,057
1,300,000 Societe Generale (P-1/A-1+) 07/24/95 6.200 1,267,536
2,000,000 Sumitomo Bank (P-1/A-1) 05/10/95 6.030 1,976,550
------------
Total Yankee Bankers' Acceptances (Cost $88,735,716) 88,735,716
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TOTAL BANKERS' ACCEPTANCES (Cost $119,906,314) 119,906,314
------------
</TABLE>
See Accompanying Notes to Financial Statements.
5
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
------------ -------------------------------------- -------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
BANK NOTES (8.1%)
$5,000,000 Banc One, Columbus N.A. + (P-1/A-1+) 03/07/95 6.010% $ 5,000,000
3,000,000 Bank of New York (Delaware) + (P-1/A-1) 03/01/95 6.140 2,999,561
4,625,000 Boatmen's National Bank St. Louis + (P-1/A-1+) 03/01/95 6.180 4,624,696
10,000,000 Comerica Bank (Detroit) + (P-1/A-1) 03/07/95 6.010 9,993,812
10,000,000 Huntington National Bank of Ohio + (P-1/A-1) 03/01/95 6.150 9,996,865
------------
TOTAL BANK NOTES (Cost $32,614,934) 32,614,934
------------
CERTIFICATES OF DEPOSIT (7.4%)
Yankee Certificates of Deposit (7.4%)
5,000,000 Bank of Nova Scotia (P-1/A-1+) 04/20/95 5.650 5,000,000
5,000,000 Canadian Imperial Bank of Commerce (P-1/A-1+) 03/03/95 6.030 5,000,000
5,000,000 Canadian Imperial Bank of Commerce (P-1/A-1+) 09/12/95 7.000 5,000,000
5,000,000 Commerzbank (P-1/A-1+) 02/09/96 7.120 5,000,447
5,000,000 Industrial Bank of Japan (P-1/A-1+) 04/28/95 6.250 5,000,000
5,000,000 Rabobank Nederland (P-1/A-1+) 04/18/95 5.670 5,000,047
------------
TOTAL CERTIFICATES OF DEPOSIT (Cost $30,000,494) 30,000,494
------------
COMMERCIAL PAPER (19.2%)
5,000,000 Abbey National North America Corp. (P-1/A-1+) 03/06/95 5.070 4,996,479
3,000,000 Abbey National North America Corp. (P-1/A-1+) 05/09/95 5.840 2,966,420
5,000,000 BankAmerica Corp. (P-1/A-1) 07/10/95 6.600 4,879,917
5,000,000 BankAmerica Corp. (P-1/A-1) 07/11/95 6.480 4,881,200
5,000,000 Dresdner U.S. Finance Inc. (P-1/A-1+) 03/21/95 5.250 4,985,417
1,500,000 National City Corp. (P-1/NR) 03/23/95 6.050 1,494,454
2,000,000 National City Corp. (P-1/NR) 03/30/95 6.140 1,990,108
1,000,000 National City Corp. (P-1/NR) 04/11/95 5.600 993,622
2,000,000 National City Corp. (P-1/NR) 05/18/95 6.250 1,972,917
</TABLE>
See Accompanying Notes to Financial Statements.
6
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<PAGE>
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
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<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
------------ -------------------------------------- -------------- --------- ----- ------------
<C> <S> <C> <C> <C> <C>
COMMERCIAL PAPER (CONT'D)
$1,000,000 National City Corp. (P-1/NR) 05/19/95 6.250% $ 986,285
2,000,000 National City Corp. (P-1/NR) 06/27/95 6.650 1,956,406
3,000,000 National City Corp. (P-1/NR) 06/28/95 6.640 2,934,153
2,000,000 National City Corp. (P-1/NR) 08/07/95 6.250 1,944,792
2,000,000 National City Corp. (P-1/NR) 10/23/95 6.550 1,914,122
5,000,000 NationsBank Corp. (P-1/A-1) 04/10/95 6.260 4,965,222
5,000,000 NationsBank Corp. (P-1/A-1) 04/17/95 5.550 4,963,771
5,000,000 NationsBank Corp. (P-1/A-1) 05/08/95 6.170 4,941,728
3,000,000 Republic National Bank NY (P-1/A-1+) 03/21/95 5.360 2,991,067
2,000,000 Republic National Bank NY (P-1/A-1+) 03/24/95 6.000 1,992,333
900,000 Republic National Bank NY (P-1/A-1+) 05/30/95 6.100 886,275
5,000,000 Republic National Bank NY (P-1/A-1+) 06/02/95 6.520 4,915,783
5,000,000 Republic National Bank NY (P-1/A-1+) 06/05/95 6.480 4,913,600
3,000,000 Toronto Dominion Holdings Corp. (P-1/A-1+) 05/02/95 5.730 2,970,395
5,000,000 Toronto Dominion Holdings Corp. (P-1/A-1+) 06/30/95 6.650 4,888,243
------------
TOTAL COMMERCIAL PAPER (Cost $77,324,709) 77,324,709
------------
TIME DEPOSITS (7.2%)
10,000,000 Fuji Bank (P-1/A-1) 03/27/95 6.031 10,000,000
5,000,000 Harris Trust & Savings Bank (P-1/A-1) 03/13/95 6.000 5,000,000
1,800,000 Sumitomo Bank (P-1/A-1) 03/06/95 6.000 1,800,000
7,000,000 Sumitomo Bank (P-1/A-1) 03/20/95 6.031 7,000,000
5,000,000 Sumitomo Bank (P-1/A-1) 03/30/95 6.030 5,000,000
------------
TOTAL TIME DEPOSITS (Cost $28,800,000) 28,800,000
------------
REPURCHASE AGREEMENTS (5.2%)
Repurchase agreement with J. P. Morgan Securities dated 02/28/95 at 6.20% to
be repurchased at $10,001,722 on 03/01/95. (Collateralized by $10,188,000
10,000,000 U.S. Treasury Note 6.875%, due 02/28/97, with a market value of
$10,200,375.) 10,000,000
Repurchase agreement with J. P. Morgan Securities dated 02/28/95 at 6.20% to
be repurchased at $10,883,874 on 03/01/95. (Collateralized by $9,876,000
10,882,000 U.S. Treasury Note 8.875%, due 08/15/17, with a market value of
$11,209,260.) 10,882,000
------------
TOTAL REPURCHASE AGREEMENTS (Cost $20,882,000) 20,882,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
7
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<PAGE>
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WARBURG PINCUS CASH RESERVE FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
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<TABLE>
<CAPTION>
VALUE
------------
<S> <C>
TOTAL INVESTMENTS AT VALUE (102.1%) (Cost $411,533,992*) $411,533,992
LIABILITIES IN EXCESS OF OTHER ASSETS (2.1%) (8,323,210)
------------
NET ASSETS (100.0%) (applicable to 403,205,588 shares) $403,210,782
------------
------------
NET ASSETS VALUE, offering and redemption price per share ($403,210,782[div]403,205,588)
$1.00
</TABLE>
= Credit ratings given by Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group are unaudited.
+ The interest rate shown is the rate as of February 28, 1995 and the maturity
date shown is the next interest readjustment date.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
8
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<PAGE>
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WARBURG PINCUS CASH RESERVE FUND
MATURITY SCHEDULE OF PORTFOLIO
February 28, 1995
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<TABLE>
<CAPTION>
MATURITY SCHEDULE
(DAYS) PAR AMOUNT PERCENTAGE OF PORTFOLIO
- ------------------ ------------ -----------------------------
<S> <C> <C> <C>
(CUMULATIVE)
1-7 $136,207,000 32.9% 32.9%
8-14 10,800,000 2.6 35.5
15-30 93,350,000 22.6 58.1
31-60 51,784,000 12.5 70.6
61-90 42,799,000 10.3 80.9
91-120 36,390,000 8.8 89.7
121-150 21,350,000 5.2 94.9
Over 150 21,000,000 5.1 100.0
</TABLE>
Average Weighted Maturity -- 47 Days
See Accompanying Notes to Financial Statements.
9
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<PAGE>
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WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
----------- ------------------------------------------ -------------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
NEW YORK (98.4%)
$2,000,000 Albany County New York BANS (NR/NR) 02/21/96 6.000% $ 2,023,141
2,000,000 Broome County New York 1994 BANS (MIG1/NR) 04/20/95 3.750 2,001,192
2,000,000 Chautauqua County New York Industrial
Development Agency (The Red Wing Co.
Project) Series 1985 VRDN + (AA2/NR) 03/07/95 4.250 2,000,000
700,000 Erie County New York Water Authority
Series B (AMBAC Insurance) VRDN + (VMIG1/A-1+) 03/07/95 3.750 700,000
900,000 Metropolitan Transportation Authority
Commuter Facility Series 1991 (Morgan
Guaranty LOC) VRDN + (VMIG1/A-1) 03/07/95 3.900 900,000
1,000,000 Monroe County Industrial Development
Agency Electronic Navigational Industries
Facility Series 1984 MB (AA1/AA+) 07/01/95 3.600 1,000,000
2,000,000 New York City General Obligation RANS
Series B Floating Libor Notes VRDN + (MIG1/SP-1) 03/07/95 3.600 3,000,000
3,000,000 New York City General Obligation A-4
(Chemical Bank LOC) VRDN + (VMIG/A-1) 03/07/95 4.183 2,000,000
2,000,000 New York City General Obligation RANS
Fiscal 1995 Series B VRDN + (MIG1/SP-1) 03/07/95 4.063 2,000,000
1,500,000 New York City General Obligation Subseries
B-9 (Chemical Bank LOC) (VMIG/A-1) 03/16/95 3.700 1,500,000
2,500,000 New York City Housing Development
Authority (York Ave.) (Chemical Bank LOC)
VRDN + (NR/A-1) 03/07/95 4.100 2,500,000
2,395,000 New York City Housing Development
Corporation (Parkgate Tower) (Citibank
LOC) VRDN + (VMIG1/A-1) 03/07/95 3.750 2,395,000
1,000,000 New York City Housing Development
Corporation (Upper Fifth Avenue Project)
Series 1989A (Bankers Trust LOC) VRDN + (VMIG1/A-1) 03/07/95 3.750 1,000,000
7,000,000 New York City Industrial Development
Agency (La Guardia Project) Series 1985
(Banque Indosuez LOC) VRDN + (NR/A-1) 03/07/95 3.800 7,000,000
See Accompanying Notes to Financial Statements.
10
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<PAGE>
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WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
----------- ------------------------------------------ -------------- --------- -------- -----------
<C> <S> <C> <C> <C> <C>
NEW YORK (CONT'D)
$ 1,000,000 New York City Industrial Development
Agency Columbia Grammar and Preparatory
School Civic Facility Revenue Bond Series
1994 (Chemical Bank LOC) VRDN + (NR/A-1) 03/07/95 3.850% $ 1,000,000
2,400,000 New York City Industrial Development
Agency Field Hotel Association (John
Fitzgerald Kennedy Project) Series 1985
(Banque Indosuez LOC) VRDN + (VMIG1/A-1) 03/07/95 3.800 2,400,000
500,000 New York City Industrial Development
Revenue Bond Nippon Cargo Airlines Company
(Industrial Bank of Japan LOC) VRDN + (NR/A-1+) 03/07/95 4.400 500,000
2,000,000 New York City Municipal Water Finance
Authority (Credit Suisse LOC) TECP (P-1/A-1+) 03/15/95 4.100 2,000,000
1,000,000 New York City RANS (MIG1/SP-1) 06/30/95 4.750 1,002,568
2,400,000 New York City Trust for Cultural Resources
Museum of Broadcasting Series 1989
(Sumitomo Bank LOC) VRDN + (VMIG1/A-1) 03/07/95 3.900 2,400,000
1,447,000 New York City Trust for Cultural Resources
New York City (Carnegie Hall) (Dai-Ichi
Kangyo LOC) VRDN + (VMIG1/A-1) 03/07/95 4.100 1,447,000
1,000,000 New York City Trust for Cultural Resources
New York City Adjustable Tender Revenue
Bond (American Museum of Natural History)
Series 1991B (MBIA Insurance) VRDN + (VMIG1/A-1+) 03/07/95 3.700 1,000,000
1,220,000 New York State Dormitory Authority
Highland Community Development Revenue
Bond Series 1994A (Marine Midland Bank &
Hong Kong Shanghai Bank LOC) VRDN + (VMIG1/A-1) 03/07/95 3.800 1,220,000
500,000 New York State Dormitory Authority
Memorial Sloan Kettering Cancer Center
Series D (Fuji Bank LOC) TECP (P-1/A-1) 03/13/95 4.100 500,000
</TABLE>
See Accompanying Notes to Financial Statements.
11
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
----------- ------------------------------------------ -------------- --------- -------- -----------
NEW YORK (CONT'D)
<C> <S> <C> <C> <C> <C>
$ 1,000,000 New York State Dormitory Authority State
University Education Facilities 1990 Issue
A (Escrowed in U.S. Government) MB (Aaa/AAA) 05/01/95 6.300% $ 1,004,886
900,000 New York State Energy Research &
Development Authority Pollution Control
Revenue Refunding Bond (Central Hudson Gas
and Electric) Series 1985A (Bankers Trust
LOC) VRDN + (P-1/NR) 03/07/95 3.550 900,000
4,900,000 New York State Energy Research &
Development Authority Pollution Control
Revenue Refunding Bonds (Rochester Gas &
Electric) Series 1984 (Bank of New York
LOC) VRDN + (P-1/NR) 03/01/95 3.500 4,900,000
1,000,000 New York State Energy Research and
Development Authority (New York State
Electric & Gas) Series 1985A (Morgan
Guaranty LOC) MB (P-1/A-1+) 03/15/95 3.250 1,000,000
1,500,000 New York State Energy Research and
Development Authority Pollution Control
Revenue Bond (Long Island Lighting
Company) (Deutsche Bank LOC) MB (VMIG1/A-1+) 03/01/95 3.000 1,500,000
800,000 New York State Housing Finance Agency
Housing Revenue Bond (Mt. Sinai School of
Medicine) Series 1984A (LOC Golden State
Sanwa Bank) VRDN + (VMIG1/NR) 03/07/95 4.000 800,000
100,000 New York State Housing Finance Agency
Housing Revenue Bond (Normandie Court)
Series 1991A (Societe Generale LOC) VRDN + (VMIG1/A-1+) 03/07/95 3.900 100,000
1,200,000 New York State Housing Finance Agency
Multi-Family Housing RB (Pleasant Creek
Assoc.) 1988 Series A (AMBAC Insured
Program) VRDN + (VMIG1/A-1+) 03/07/95 3.900 1,200,000
</TABLE>
See Accompanying Notes to Financial Statements.
12
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
----------- ------------------------------------------ -------------- --------- -------- -----------
NEW YORK (CONT'D)
<C> <S> <C> <C> <C> <C>
$ 250,000 New York State Job Development Authority
State Guaranteed Variable Rate Special
Purpose Bond Series 1984C (Sumitomo Bank
LOC) VRDN + (VMIG1/A-1+) 03/01/95 3.800% $ 250,000
120,000 New York State Job Development Authority
State Guaranteed Variable Rate Special
Purpose Bond Series 1984F (Sumitomo Bank
LOC) VRDN + (VMIG1/A-1+) 03/01/95 3.800 120,000
705,000 New York State Job Development Authority
State Guaranteed Variable Rate Special
Purpose Bond Series 1984G (Sumitomo Bank
LOC) VRDN + (VMIG1/A-1+) 03/01/95 3.800 705,000
895,000 New York State Job Development Authority
State Guaranteed Variable Rate Special
Purpose Bond Series 1984H (Sumitomo Bank
LOC) VRDN + (VMIG1/A-1+) 03/01/95 3.800 895,000
1,900,000 New York State Medical Care Facilities
Finance Agency, Lenox Hill Hospital
Project 1990 Series A (Chemical Bank LOC)
VRDN + (VMIG1/NR) 03/07/95 3.800 1,900,000
600,000 New York State Power Authority Adjustable
Tender Notes MB (VMIG1/A-1) 03/01/95 3.800 600,000
2,000,000 New York State Power Authority MB (VMIG1/A-1) 03/01/95 3.800 2,000,000
1,000,000 North Hempstead New York Solid Waste
Management Authority Series A 1993 VRDN + (VMIG1/NR) 03/07/95 3.750 1,000,000
2,000,000 Port Authority New York and New Jersey
Series B TECP (P-1/A-1+) 03/07/95 3.700 2,000,000
1,900,000 State of New York G.O. BANS Series Q TECP
(Westdeutsche Landesbank Gironzentrale
LOC) (P-1/A-1) 03/07/95 4.100 1,900,000
2,500,000 State of New York General Obligation BANS
Series O (P-1/A-1) 03/16/95 3.850 2,500,000
</TABLE>
See Accompanying Notes to Financial Statements.
13
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS=
PAR SECURITY DESCRIPTION (MOODY'S/S&P) MATURITY RATE VALUE
----------- ------------------------------------------ -------------- --------- -------- -----------
NEW YORK (CONT'D)
<C> <S> <C> <C> <C> <C>
$ 7,900,000 Suffolk County Industrial Development
Authority (Nissequogue Cogen) Series 1993
(Toronto Dominion Bank LOC) VRDN + (VMIG1/A-1+) 03/07/95 3.850% $ 7,900,000
1,500,000 Suffolk County Water Authority BANS 1994
VRDN + (VMIG1/NR) 03/07/95 3.900 1,500,000
2,000,000 Suffolk County, New York TANS 1995 (Ra
Series I) (Westdeutsche Landesbank
Gironzentrale LOC) (MIG1/SP-1+) 08/15/95 5.250 2,005,209
1,000,000 Town of Babylon Industrial Development
Agency (J. D'Addario & Company, Inc.
Project) Series 1994 (LOC National
Westminster) VRDN + (MIG1/NR) 03/01/95 4.000 1,000,000
2,000,000 Town of Hempstead New York BANS (MIG1/NR) 08/17/95 4.500 2,004,630
100,000 Town of Montgomery Industrial Development
Agency Authority (Service Merchandise Co.,
Inc.) (LOC Industrial Bank of Japan) VRDN + (NR/A-1) 03/15/95 4.000 100,000
3,000,000 Town of Williamsville Central School
District Erie County BANS (MIG1/NR) 05/04/95 4.000 3,003,307
-----------
TOTAL NEW YORK (Cost $86,276,933) 86,276,933
-----------
PUERTO RICO (1.1%)
1,000,000 Puerto Rico Industrial Medical Higher
Education and Environmental Pollution
Control Facility Financing Authority Key
Pharmaceuticals Schering Plough Inc.
Project Series 1983A MB (Cost $1,000,000) (NR/AAA) 12/01/95 4.350 1,000,000
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
14
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
STATEMENT OF NET ASSETS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
-----------
<S> <C>
TOTAL INVESTMENTS AT VALUE (99.5%) (Cost $87,276,933*) $87,276,933
OTHER ASSETS IN EXCESS OF LIABILITIES (0.5%) 442,431
-----------
NET ASSETS (100.0%) (applicable to 77,124,037 common
shares and 10,609,091 Series 2 shares) $87,719,364
-----------
-----------
NET ASSET VALUE, offering and redemption price per common
share ($77,110,751[div]77,124,037) $1.00
NET ASSET VALUE, offering and redemption price per Series 2
share ($10,608,613[div]10,609,091) $1.00
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<S> <C>
BANS = Bond Anticipation Notes
MB = Municipal Bonds
RANS = Revenue Anticipation Notes
RANS = Tax Anticipation Notes
TECP = Tax Exempt Commercial Paper
VRDN = Variable Rate Demand Notes
</TABLE>
= Credit ratings given by Moody's Investors Services, Inc. and Standard &
Poor's Ratings Group are unaudited.
+ The interest rate shown is the rate as of February 28, 1995 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 represents cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
15
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
MATURITY SCHEDULE OF PORTFOLIO
February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY SCHEDULE
(DAYS) PAR AMOUNT PERCENTAGE OF PORTFOLIO
- ------------------ ----------- -----------------------------
(CUMULATIVE)
<S> <C> <C> <C>
1-7 $64,632,000 74.1% 74.1%
8-14 500,000 0.6 74.7
15-30 7,100,000 8.1 82.8
31-60 2,000,000 2.3 85.1
61-90 4,000,000 4.6 89.7
91-120 0 0.0 89.7
121-150 2,000,000 2.3 92.0
Over 150 7,000,000 8.0 100.0
Average Weighted Maturity -- 32 Days
</TABLE>
See Accompanying Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS MONEY MARKET FUNDS
STATEMENTS OF OPERATIONS
For the Year Ended February 28, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Cash Reserve New York Tax
Fund Exempt Fund
-------------- --------------
<S> <C> <C>
INTEREST INCOME $ 15,767,758 $2,667,309
-------------- --------------
EXPENSES:
Investment advisory 795,255 221,553
Sub-investment advisory and administration 795,255 221,553
Administrative services 316,605 88,871
Audit 27,030 25,000
Custodian 79,904 21,869
Directors' 20,000 20,000
Distribution 0 41,225
Insurance 22,196 6,310
Legal 26,469 22,386
Printing 25,251 25,134
Registration 83,158 14,513
Transfer agent 120,268 38,284
Miscellaneous 36,161 25,281
-------------- --------------
2,347,552 771,979
Less: fees waived (597,991) (243,337)
-------------- --------------
Total expenses 1,749,561 528,642
-------------- --------------
Net investment income 14,018,197 2,138,667
-------------- --------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS:
Net realized gain (loss) from security transactions 9,641 (189)
Net decrease in unrealized market discount 0 (6)
-------------- --------------
Net realized and unrealized gain (loss) from investments 9,641 (195)
-------------- --------------
Net increase in net assets from operations $ 14,027,838 $2,138,472
-------------- --------------
-------------- --------------
</TABLE>
See Accompanying Notes to Financial Statements.
17
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS MONEY MARKET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Warburg Pincus Warburg Pincus
Cash Reserve New York Tax
Fund Exempt Fund
---------------------------------- ------------------------------
For the Year Ended February 28,
For the Year Ended February 28,
1995 1994 1995 1994*
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 14,018,197 $ 8,008,712 $ 2,138,667 $ 1,325,773
Net realized gain (loss) from
security transactions 9,641 15,446 (189) 165
Net decrease in unrealized market
discount 0 0 (6) (25)
--------------- --------------- ------------- -------------
Net increase in net
assets resulting from
operations 14,027,838 8,024,158 2,138,472 1,325,913
--------------- --------------- ------------- -------------
FROM DISTRIBUTIONS:
Dividends from net investment
income:
Common shares (14,018,197) (8,008,712) (1,892,371) (1,180,991)
Series 2 shares 0 0 (246,296) (144,782)
--------------- --------------- ------------- -------------
Net decrease from
distributions (14,018,197) (8,008,712) (2,138,667) (1,325,773)
--------------- --------------- ------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
(AT $1 PER SHARE):
Proceeds from sale of shares 1,886,500,990 1,649,948,337 246,396,767 339,019,743
Reinvested dividends 8,456,201 4,917,132 1,066,251 523,769
Net asset value of shares redeemed (1,769,313,517) (1,665,046,571) (237,850,988) (348,596,659)
--------------- --------------- ------------- -------------
Net increase (decrease)
in net assets from
capital share
transactions 125,643,674 (10,181,102) 9,612,030 (9,053,147)
--------------- --------------- ------------- -------------
Net increase (decrease)
in net assets 125,653,315 (10,165,656) 9,611,835 (9,053,007)
NET ASSETS:
Beginning of year 277,557,467 287,723,123 78,107,529 87,160,536
--------------- --------------- ------------- -------------
End of year $ 403,210,782 $ 277,557,467 $ 87,719,364 $ 78,107,529
--------------- --------------- ------------- -------------
--------------- --------------- ------------- -------------
</TABLE>
* Reclassification made for comparative purposes.
See Accompanying Notes to Financial Statements.
18
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS CASH RESERVE FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended February 28 or 29,
--------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
Income from Investment Operations:
Net Investment Income .0426 .0273 .0322 .0542 .0760
Net Realized Gain on Securities 0 0 0 .0010 0
-------- -------- -------- -------- --------
Total from Investment Operations .0426 .0273 .0322 .0552 .0760
-------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income (.0426) (.0273) (.0322) (.0542) (.0760)
Distributions from capital gains 0 0 0 (.0010) 0
-------- -------- -------- -------- --------
Total Distributions (.0426) (.0273) (.0322) (.0552) (.0760)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $1.00 $1.00 $1.00 $1.00 $1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Total Return 4.35% 2.76% 3.27% 5.66% 7.87%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Year (000s) $403,211 $277,557 $287,723 $426,479 $361,428
Ratios to average daily net assets:
Operating expenses .55% .54% .50% .50% .50%
Net investment income 4.41% 2.73% 3.22% 5.45% 7.59%
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .19% .13% .17% .16% .13%
</TABLE>
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Dividends paid by the Fund are taxable as ordinary income.
19
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS NEW YORK TAX EXEMPT FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Shares Series 2 Shares
--------------------------------------------------- -----------------------------
For the Year Ended February
For the Year Ended February 28 or 29, 28 or 29,
--------------------------------------------------- -----------------------------
1995 1994 1993 1992 1991 1995 1994 1993
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income .0246 .0175 .0224 .0329 .0486 .0211 .0140 .0189
Less Distributions:
Dividends from net investment
income (.0246) (.0175) (.0224) (.0329) (.0486) (.0211) (.0140) (.0189)
------- ------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------
Total Return 2.48% 1.77% 2.26% 3.34% 4.97% 2.13% 1.41% 1.90%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $77,111 $65,984 $76,995 $65,438 $85,783 $10,608 $12,123 $10,165
Ratios to average daily net assets:
Operating expenses .55% .54% .50% .50% .50% .90% .89% .85%
Net investment income 2.46% 1.75% 2.23% 3.27% 4.84% 2.11% 1.40% 1.87%
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .27% .19% .28% .23% .21% .27% .19% .28%
<CAPTION>
April 30, 1990
(Initial Issuance)
Through
1992 February 28, 1991
------- ------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $ 1.00 $ 1.00
------- -------
Income from Investment
Operations:
Net Investment Income .0295 .0391
Less Distributions:
Dividends from net investment
income (.0295) (.0391)
------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
------- -------
------- -------
Total Return 2.99% 4.78%*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $ 9,307 $ 15,151
Ratios to average daily net assets:
Operating expenses .85% .65%*
Net investment income 2.95% 4.63%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .23% .42%*
</TABLE>
* Annualized
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (Unaudited)
Dividends paid by the Fund for the fiscal year will qualify as exempt interest
dividends.
- --------------------------------------------------------------------------------
20
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS
February 28, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Money Market Funds are comprised of the Warburg Pincus
Cash Reserve Fund (the 'Cash Reserve Fund') and the Warburg Pincus New York Tax
Exempt Fund (the 'New York Tax Exempt Fund') which are registered under the
Investment Company Act of 1940, as amended (the '1940 Act'), as diversified and
non-diversified, open-end management investment companies, respectively.
Investment objectives for each Fund are as follows: the Cash Reserve Fund
is designed to provide investors with high current income consistent with
liquidity and stability of principal; the New York Tax Exempt Fund is designed
to provide investors with as high a level of current income that is exempt from
Federal, New York State, and New York City personal income taxes as is
consistent with preservation of capital and liquidity.
Issuers of New York tax-exempt securities (including issuers whose
obligations may be acquired by the New York Tax Exempt Fund) have experienced
serious financial difficulties in recent years. These difficulties have at times
jeopardized the credit standing and impaired the borrowing abilities of all New
York issuers and have generally contributed to higher interest costs for their
borrowings and fewer markets for their outstanding debt obligations. During the
recent past, several different issuers of Municipal Securities of New York State
and its agencies and instrumentalities and of New York City have been downgraded
by Standard & Poor's Ratings Group and Moody's Investors Service, Inc. A
recurrence of the financial difficulties experienced by certain issuers of New
York tax-exempt securities could result in defaults or declines in the market
values of their existing obligations and, possibly, in the obligations of other
issuers of New York tax-exempt securities.
The net asset value of each Fund is determined as of noon and the close of
regular trading on the New York Stock Exchange on each day, except on days when
the Exchange is closed. Each Fund's investments are valued under the amortized
cost method which approximates current market value. Under this method,
investments are valued at cost when purchased and thereafter a constant
proportionate amortization of any discount or premium is recorded until maturity
of the investment.
Security transactions are accounted for on trade date. 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 Cash Reserve 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.
Each Fund intends to continue to comply with the special provisions of the
Internal Revenue Code available to investment companies and therefore no Federal
income tax provision is required.
Each Fund may enter into repurchase agreement transactions. Under the terms
of a typical repurchase agreement, each Fund acquires an underlying security
subject to an obligation of the seller to repurchase the security. The value of
the underlying security will be maintained at an amount at least equal to the
total amount of the repurchase obligation, including interest. The collateral is
in the Fund's possession.
21
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER AND SUB-ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Counsellors'), a wholly-owned
subsidiary of Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as
each Fund's investment adviser. For its investment advisory services,
Counsellors currently receives a fee calculated at an annual rate of .25% of
each Fund's average daily net assets. For the year ended February 28, 1995,
investment advisory fees and waivers were as follows:
<TABLE>
<CAPTION>
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
- -------------------------------------------- --------------------- --------- ---------------------
<S> <C> <C> <C>
Cash Reserve $ 795,255 $ (73,215) $ 722,040
New York Tax Exempt 221,553 (55,231) 166,322
</TABLE>
PNC Institutional Management Corporation ('PIMC'), a wholly-owned
subsidiary of PNC Bank, N.A., serves as each Fund's sub-investment adviser and
administrator. For its sub-investment advisory and administrative services, PIMC
currently receives a fee calculated at an annual rate of .25% of each Fund's
average daily net assets. For the year ended February 28, 1995, sub-investment
advisory and administration fees and waivers were as follows:
<TABLE>
<CAPTION>
GROSS SUB-ADVISORY NET SUB-ADVISORY
AND AND
FUND ADMINISTRATION FEE WAIVER ADMINISTRATION FEE
- -------------------------------------------------- ------------------ --------- ------------------
<S> <C> <C> <C>
Cash Reserve $795,255 $(365,725) $429,530
New York Tax Exempt 221,553 (143,795) 77,758
</TABLE>
Counsellors Funds Service, Inc. ('CFSI'), a wholly-owned subsidiary of
Counsellors, serves as each Fund's co-administrator. For its administrative
services, CFSI currently receives a fee calculated at an annual rate of .10% of
each Fund's average daily net assets. For the year ended February 28, 1995,
administrative services fees earned and waived by CFSI were as follows:
<TABLE>
<CAPTION>
GROSS NET
FUND ADMINISTRATION FEE WAIVER ADMINISTRATION FEE
- -------------------------------------------------- ------------------ --------- ------------------
<S> <C> <C> <C>
Cash Reserve $316,605 $(159,051) $157,554
New York Tax Exempt 88,871 (44,311) 44,560
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly-owned subsidiary of
Counsellors, serves as each Fund's distributor. No compensation is payable by
the Funds to CSI for distribution services.
3. CAPITAL SHARE TRANSACTIONS
Each Fund is authorized to issue three billion full and fractional shares
of capital stock, $.001 par value per share, of which one billion shares of New
York Tax Exempt Fund are designated as Series 2 Shares. Series 2 Shares are
identical to Common Shares in all respects except that Series 2 Shares are
22
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
sold to institutions ('Service Organizations') that perform certain
distribution, shareholder servicing, accounting and/or administrative services
for their customers who are beneficial owners of Series 2 Shares. Series 2
Shares bear the fees paid pursuant to a distribution plan adopted by each Fund
in an amount not to exceed .75 of 1.00% (on an annualized basis) of the average
daily net asset value of the shares held by the institutions for the benefit of
their customers and enjoy certain exclusive voting rights on matters relating to
those fees.
With respect to Series 2 Shares, Service Organizations earned the following
distribution fees for the year ended February 28, 1995:
<TABLE>
<CAPTION>
FUND DISTRIBUTION FEE
- ------------------------------------------------------------------- ----------------
<S> <C>
New York Tax Exempt $ 41,225
</TABLE>
Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
NEW YORK TAX NEW YORK TAX
CASH RESERVE FUND EXEMPT FUND EXEMPT FUND
-------------------------------- ---------------------------- --------------------------
Common Shares Common Shares Series 2 Shares
For the Year Ended For the Year Ended For the Year Ended
February 28, February 28, February 28,
1995 1994 1995 1994 1995 1994
-------------- -------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,886,500,990 1,649,948,337 204,764,009 287,518,833 41,632,750 51,500,910
Shares issued to shareholders on
reinvestment of dividends 8,456,201 4,917,132 822,241 379,886 244,010 143,883
Shares redeemed (1,769,313,517) (1,665,046,571) (194,459,365) (298,909,931) (43,391,623) (49,686,728)
-------------- -------------- ------------ ------------ ----------- -----------
Net increase (decrease) in shares 125,643,674 (10,181,102) 11,126,885 (11,011,212) (1,514,863) 1,958,065
-------------- -------------- ------------ ------------ ----------- -----------
-------------- -------------- ------------ ------------ ----------- -----------
</TABLE>
4. NET ASSETS
Net Assets at February 28, 1995, consisted of the following:
<TABLE>
<CAPTION>
CASH RESERVE FUND NEW YORK TAX EXEMPT FUND
----------------- -----------------------------------------------
Common Shares Common Shares Series 2 Shares Total
----------------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Capital contributed, net $ 403,210,711 $77,124,029 $10,609,106 $87,733,135
Accumulated net realized gain (loss)
from security transactions 71 (13,278) (493) (13,771)
----------------- ------------- --------------- -----------
Net assets $ 403,210,782 $77,110,751 $10,608,613 $87,719,364
----------------- ------------- --------------- -----------
----------------- ------------- --------------- -----------
</TABLE>
23
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<PAGE>
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WARBURG PINCUS MONEY MARKET FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 28, 1995
- --------------------------------------------------------------------------------
5. CAPITAL LOSS CARRYOVER
At February 28, 1995, the New York Tax Exempt Fund has a capital loss
carryover of $13,771 to offset possible future capital gains of the Fund. These
carryovers expire as follows:
<TABLE>
<CAPTION>
YEAR AMOUNT
----- ------
<S> <C>
1997 $5,467
1998 4,026
2000 4,089
2002 189
</TABLE>
24
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<PAGE>
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WARBURG PINCUS MONEY MARKET FUNDS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
WARBURG PINCUS MONEY MARKET FUNDS:
We have audited the accompanying statements of net assets of Warburg Pincus Cash
Reserve Fund and Warburg Pincus New York Tax Exempt Fund as of February 28,
1995, and the related statements of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and 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 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
February 28, 1995. 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
Warburg Pincus Cash Reserve Fund and Warburg Pincus New York Tax Exempt Fund as
of February 28, 1995, and the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
March 31, 1995
25
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<PAGE>
WARBURG PINCUS FUNDS
P.O. BOX 9030
BOSTON, MASSACHUSETTS 02205-9030
SHAREHOLDER SERVICES
1-800-888-6878
PROSPECTUSES
1-800-257-5614
WARBURG PINCUS FUNDS
[GLOBE LOGO]
ANNUAL REPORT
FEBRUARY 28, 1995
[ ] WARBURG PINCUS
CASH RESERVE FUND
[ ] WARBURG PINCUS
NEW YORK TAX EXEMPT FUND
COUNSELLORS SECURITIES INC., DISTRIBUTOR
WPCRNY-2-0295
<PAGE>
STATEMENT OF DIFFERENCES
------------------------
The division sign shall be expressed as [div]
