<PAGE>
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ANNUAL
REPORT
December 31, 1997
WARBURG PINCUS TRUST
INTERNATIONAL EQUITY PORTFOLIO
SMALL COMPANY GROWTH PORTFOLIO
POST-VENTURE CAPITAL PORTFOLIO
GROWTH & INCOME PORTFOLIO
The Warburg Pincus Trust (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
and, where applicable, the special considerations and risks associated
with international investing 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)369-2728 or by writing to Warburg Pincus, P.O. Box 9030, Boston, MA
02205-9030.
[Logo]
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From time to time, the Portfolios' investment adviser and co-administrator 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 Portfolios' management are as of the date of the letters and
portfolio holdings described in this annual report are as of December 31, 1997;
these views and portfolio holdings may have changed subsequent to these dates.
Nothing in this annual report is a recommendation to purchase or sell
securities.
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WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997
- --------------------------------------------------------------------------------
Dear Shareholder: February 9, 1998
The objective of Warburg Pincus Trust -- International Equity Portfolio (the
'Portfolio') is long-term capital appreciation. The Portfolio pursues its
investment objective by investing primarily in a broadly diversified portfolio
of equity securities of companies that have their principal business activities
and interests outside the U.S.
For the 12 months ended December 31, 1997, the Portfolio had a total return
of - 2.26%. Its benchmark index, the Morgan Stanley Europe, Australasia and Far
East (EAFE) Index, had a total return of 1.78% for the period.
Foreign stock markets had geographically mixed results for the period. By
region, the most noteworthy performances came from Europe, whose markets rallied
strongly on the combination of low interest rates, increased optimism toward
European Monetary Union, and signs of improving economic growth. Two additional
catalysts for these markets were merger and acquisition activity and, in the
case of specific companies, an announced commitment to improving shareholder
value.
Asian-Pacific markets, conversely, struggled, hurt by mounting economic and
currency concerns. Most of the region's stock markets had losses in dollar terms
for the 12 months, with the sharpest setbacks occurring in East Asia,
particularly Southeast Asia, where several markets suffered losses exceeding
50%. Elsewhere, Latin American markets showed near-universal strength, and the
emerging markets of Europe, the Middle East and Africa also generally rose.
In terms of performance attribution, the Portfolio's Asian-Pacific exposure
generally proved a liability for the period. Fortunately, the Portfolio had
comparatively little exposure to the hard-hit Southeast Asian markets, which
spared it the more-sizable losses suffered by funds with larger holdings in that
region. In the end, though, almost any exposure to Asian markets proved harmful,
as the contagion from Southeast Asia swept through the region, and the
Portfolio's exposure weighed heavily on its performance.
We maintained a fairly significant stake in Japan during the 12 months.
Though this weighting proved less than timely -- the Japanese market, as
measured by most benchmarks, also suffered a loss for the period -- we managed
to outperform the Japanese broad-market averages, a function of good stock
selection. We also hedged much of the Portfolio's yen exposure through the
period. This served the Portfolio well, given the yen's decline in value vs. the
U.S. dollar.
In contrast to its Asian exposure, the Portfolio's European exposure made a
favorable contribution to its return. By country, some of the strongest
1
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WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997 (CONT'D)
- --------------------------------------------------------------------------------
performances for the Portfolio came from its holdings in Spain, France, the
Netherlands and Germany, and from its Nordic holdings collectively. The
Portfolio also benefited from positive performances from its Latin American
holdings. Our exposure was concentrated primarily in Argentina, Brazil and, to a
lesser extent, Mexico, and these stocks all showed strong gains for the 12
months.
Looking ahead, the near-term environment for international markets appears
likely to remain, at the very least, challenging. Asian markets have yet to
stabilize, and worries over that region's difficulties have impacted markets
globally. For longer-term investors, however -- those with three- to five-year
time horizons who can tolerate near-term volatility -- we believe this has
created, and continues to create, some excellent investment opportunities. With
that view, we will continue our efforts to identify the most promising
candidates for long-term growth, and encourage our investors to maintain a
similarly long-term orientation.
Richard H. King
Portfolio Manager
2
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WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997 (CONT'D)
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GROWTH OF $10,000 INVESTED IN SHARES OF WARBURG PINCUS TRUST --
INTERNATIONAL EQUITY PORTFOLIO SINCE INCEPTION AS OF DECEMBER 31, 1997
The graph below illustrates the hypothetical investment of $10,000 in Shares
of Warburg Pincus Trust -- International Equity Portfolio (the 'Portfolio') from
June 30, 1995 (inception) to December 31, 1997, compared to the Morgan Stanley
Europe, Australasia and Far East Index ('EAFE')* for the same time period.
[GRAPH]
Portfolio EAFE
--------- ----
Jun-95 10,000 10,000
Jul-95 10,270.00 10,622.60
Aug-95 10,489.78 10,217.77
Sep-95 10,589.43 10,417.33
Oct-95 10,319.40 10,137.31
Nov-95 10,479.35 10,419.53
Dec-95 10,728.76 10,839.33
Jan-96 11,081.74 10,883.67
Feb-96 11,041.84 10,920.45
Mar-96 11,344.39 11,152.51
Apr-96 11,897.99 11,476.60
May-96 11,656.46 11,265.55
Jun-96 11,797.51 11,328.98
Jul-96 11,162.80 10,997.94
Aug-96 11,253.22 11,022.03
Sep-96 11,485.04 11,314.88
Oct-96 11,333.43 11,199.13
Nov-96 11,776.57 11,644.86
Dec-96 11,800.13 11,494.64
Jan-97 11,830.81 11,092.44
Feb-97 12,026.01 11,273.91
Mar-97 11,953.86 11,314.73
Apr-97 12,210.87 11,374.69
May-97 13,043.65 12,114.96
Jun-97 13,568.00 12,783.10
Jul-97 13,907.20 12,989.93
Aug-97 12,776.55 12,019.84
Sep-97 13,362.99 12,693.19
Oct-97 11,965.22 11,717.72
Nov-97 11,656.52 11,598.20
Dec-97 11,534.12 11,699.10
Average Annual
Total Return
for period ended
12/31/97
1 Year
-2.26%
Since Inception
(6/30/95)
5.85%
- ------------
* The Morgan Stanley Europe, Australasia and Far East Index is an unmanaged
index (with no defined investment objective) of international equities that
includes reinvestment of dividends, and is the exclusive property of Morgan
Stanley & Co. Incorporated.
3
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WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997
- --------------------------------------------------------------------------------
Dear Shareholder: February 9, 1998
The objective of Warburg Pincus Trust -- Small Company Growth Portfolio (the
'Portfolio') is capital growth. The Portfolio pursues its objective by investing
in a portfolio of equity securities of small domestic companies.
For the 12 months ended December 31, 1997, the Portfolio had a total return
of 15.65%, vs. returns of 12.95% for the Russell 2000 Growth Index and 15.05%
for the Lipper Small Cap Funds Index.
Although the period was ultimately a positive one for small caps, the group
saw several significant shifts in investor sentiment. Many of these stocks
suffered sizable losses over the January-through-April span, in part due to
fears of higher interest rates. Sentiment toward small-cap stocks began to
improve in May, however, with investors noting small caps' historically
compelling valuations and strong projected growth rates. Other factors aiding a
small-cap revival -- a rally that extended well into October -- included a
reduction in the capital-gains tax and profit warnings from several large-cap
companies that had previously paced the market's advance. Small caps, though,
finished the reporting period on a difficult note. As economic and financial
turmoil in Asia worsened, small-cap stocks suffered from a 'flight to safety'
toward more-liquid investments. Against this backdrop, the Portfolio outpaced
its benchmarks for the 12 months, thanks to good performances from its
technology, financial-services and consumer holdings in particular.
In terms of sector exposure, we held a sizable weighting in the business-
services area through the period. This reflects our view that large, efficiency-
minded organizations will continue to 'outsource' their non-core operations, a
trend that stands to benefit specific small-cap companies. The Portfolio's
holdings in this area during the period included QuickResponse Services, a
facilitator of information flow between manufacturers and retailers.
We also maintained a relatively large weighting in the technology industry.
We continued to find innovative companies that have what we deem to be strong
longer-term prospects, such as Platinum Technology, a developer and marketer of
an integrated line of systems software products, and National Instruments, a
manufacturer of a wide range of software and hardware products.
We also had a significant presence in the consumer sector (broadly defined)
during the period. Here, our holdings were concentrated in retail, service and
leisure & entertainment companies, where we generally found the most attractive
stocks on a valuation basis.
Other noteworthy sector weightings included energy, where we emphasized
oil-services stocks; financial services, mostly insurance and asset-management
companies; health care, including highly innovative
4
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WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997 (CONT'D)
- --------------------------------------------------------------------------------
pharmaceutical companies; and telecommunications & equipment, where our holdings
included companies poised to benefit from the continued expansion of the
Internet.
We remain optimistic regarding the small-cap market, where many stocks
continue to sell at significant discounts to their underlying growth rates.
Additionally, we believe small, rapidly growing companies will continue to be
targeted by larger companies seeking acquisition-fueled growth. In this context,
we will continue to devote our efforts to identifying well-managed, innovative
companies that have what we deem to be the brightest prospects.
Stephen J. Lurito
Portfolio Manager
5
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WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997 (CONT'D)
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GROWTH OF $10,000 INVESTED IN WARBURG PINCUS
TRUST -- SMALL COMPANY GROWTH PORTFOLIO SINCE INCEPTION
AS OF DECEMBER 31, 1997
The graph below illustrates the hypothetical investment of $10,000 in Warburg
Pincus Trust -- Small Company Growth Portfolio (the 'Portfolio') from June 30,
1995 (inception) to December 31, 1997, compared to the Russell 2000 Growth Index
('Russell')* and the Lipper Small Cap Funds Index ('Lipper')** for the same time
period.
[GRAPH]
Trust Lipper Russell
----- ------ -------
Jun-95 10,000 10,000 10,000
Jul-95 10,320.00 10,753.00 10,779.40
Aug-95 11,040.34 10,941.82 10,912.42
Sep-95 11,560.34 11,250.05 11,137.10
Oct-95 11,190.41 10,902.31 10,589.38
Nov-95 11,990.52 11,278.12 11,056.90
Dec-95 12,510.91 11,405.56 11,301.81
Jan-96 12,360.78 11,351.95 11,208.35
Feb-96 12,840.37 11,808.42 11,719.45
Mar-96 13,130.57 12,049.07 11,951.14
Apr-96 14,419.99 13,010.71 12,868.63
May-96 15,149.64 13,551.30 13,528.53
Jun-96 14,280.05 13,005.86 12,649.59
Jul-96 12,690.68 11,743.25 11,105.45
Aug-96 13,700.86 12,455.25 11,927.59
Sep-96 14,370.83 13,169.80 12,541.86
Oct-96 13,921.02 12,766.41 12,000.93
Nov-96 13,930.77 12,998.00 12,334.67
Dec-96 14,241.43 13,044.53 12,575.20
Jan-97 14,581.80 13,342.08 12,889.33
Feb-97 13,521.70 12,577.71 12,111.07
Mar-97 12,441.32 11,816.13 11,256.51
Apr-97 12,250.96 11,717.58 11,126.39
May-97 13,980.80 13,184.27 12,798.79
Jun-97 14,621.12 13,832.28 13,232.80
Jul-97 15,401.89 14,630.26 13,910.85
Aug-97 15,822.36 14,798.07 14,328.32
Sep-97 17,213.14 15,941.52 15,471.71
Oct-97 16,423.06 15,138.54 14,542.48
Nov-97 16,142.23 15,855.45 14,196.37
Dec-97 16,482.83 15,008.46 14,204.89
Average Annual
Total Return
for period ended
12/31/97
1 Year
15.65%
Since Inception
(6/30/95)
22.03%
- ------------
* The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell Company.
** The Lipper Small Cap Funds Index is an equal-weighted performance index,
adjusted for capital-gains distributions and income dividends, of the largest
qualifying funds in this investment objective, and is compiled by Lipper
Analytical Services Inc.
6
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WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997
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Dear Shareholder: February 9, 1998
The objective of Warburg Pincus Trust -- Post-Venture Capital Portfolio (the
'Portfolio') is long-term growth of capital. The Portfolio pursues its objective
by investing primarily in equity securities of companies considered to be in
their post-venture-capital stage of development.
For the 12 months ended December 31, 1997, the Portfolio had a return of
13.34%, vs. returns of 12.95% for the Russell 2000 Growth Index, 28.08% for the
Lipper Growth Funds Index and 2.47% for the Warburg Pincus/Venture Economics
Post-Venture Capital Index.
The period was a positive, albeit volatile, one for the types of stocks
targeted by the Portfolio, i.e., small-cap and aggressive-growth issues. These
stocks struggled over the first four months of the period, due largely to
earnings disappointments from several prominent technology companies and fears
of rising interest rates. The market began to warm to small-cap and aggressive-
growth stocks in May, however, with investors noting very attractive valuations
and strong projected profit growth in these areas. As a result, more-aggressive
stocks paced the market's advance through mid-October, though an Asia-related
'flight to safety' ultimately weighed on these issues during the fourth quarter.
In terms of industry exposure, we continued to emphasize technology
companies, which have traditionally been major recipients of venture-capital
financing. Our largest area of concentration within technology at the end of the
period was the computer sector. Here, our holdings included BMC Software, which
exemplifies the type of well-financed, high-growth companies we seek. Since its
initial public offering in 1988, BMC has grown to command a substantial share of
the software market. We also continued to find a number of attractive companies
in the electronics sector. We did, however, reduce our weighting in October, on
concerns that specific semiconductor companies, given currency turmoil in Asia,
would face an increasingly difficult pricing environment.
The other chief component of our technology exposure was the
telecommunications & equipment sector, where a number of rapid-growth companies
have matured from venture-capital partnerships over the past decade. Our
holdings in this area during the period included McLeodUSA, an integrated
telecommunications company that, since going public in 1996, has continued to
grow via mergers and strategic partnerships, including an agreement with AT&T.
Elsewhere, our significant weightings included the business-services sector,
which we believe will continue to benefit from a strong trend toward corporate
7
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WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997 (CONT'D)
- --------------------------------------------------------------------------------
outsourcing. Our focus was on companies that stand to take particular advantage
of this trend, namely benefit-, personnel- and inventory-management companies,
as well as product-development and manufacturing contractors.
The rest of the Portfolio was invested across a range of industries,
including the financial-services, health-care, energy and consumer-related
areas. Notable changes we made during the period in the consumer area included
raising our positions in the retail and leisure & entertainment sectors. In
these sectors, which we have increasingly come to favor as diversification
tools, we added several stocks we deemed attractive on a valuation basis.
Going forward, our outlook on the collective prospects for stocks of post-
venture companies (which we define as those that have received venture-capital
financing either during the early stages of their existence or the early stages
of the development of a new product or service, or as part of a restructuring or
recapitalization) remains positive. We will continue to devote our efforts to
selecting stocks that we deem to have the best long-term prospects, employing
our broader themes such as outsourcing and the global adoption of U.S.
technology. We would caution investors, however, that investing in these
securities entails potential risks (e.g., that of heightened volatility) as well
as significant long-term rewards. Because of the nature of the Portfolio's
holdings and certain strategies it may use, an investment in the Portfolio
should be considered only for the aggressive portion of an investor's assets and
may not be appropriate for all investors. Investors should review the Prospectus
carefully before purchase.
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
8
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WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997 (CONT'D)
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GROWTH OF $10,000 INVESTED IN WARBURG PINCUS TRUST --
POST-VENTURE CAPITAL PORTFOLIO SINCE INCEPTION AS OF DECEMBER 31, 1997
The graph below illustrates the hypothetical investment of $10,000 in Warburg
Pincus Trust -- Post-Venture Capital Portfolio (the 'Portfolio') from September
30, 1996 (inception) to December 31, 1997, compared to the Lipper Growth Funds
Index ('Lipper')*, the Russell 2000 Growth Index ('Russell')** and the Warburg
Pincus/Venture Economics Post-Venture Capital Index ('PVCI')*** for the same
time period.
[GRAPH]
Fund
(Common Shares) Russell Lipper PVCI
------------- ------- ------ ----
Sep-96 10,000 10,000 10,000 10,000
Oct-96 9,730.00 9,568.70 10,144.00 9,574.6
Nov-96 9,760.16 9,834.81 10,785.10 10,053.9
Dec-96 9,760.16 10,026.58 10,581.26 9,926.42
Jan-97 10,200.35 10,277.05 11,136.46 10,261.5
Feb-97 9,519.98 9,656.52 11,051.16 9,571.65
Mar-97 8,869.77 8,975.16 10,545.46 8,607.12
Apr-97 8,899.93 8,871.40 11,009.35 8,466.31
May-97 9,879.81 10,204.86 11,771.20 9,849.11
Jun-97 10,090.25 10,550.91 12,211.20 9,759.19
Jul-97 10,949.94 11,091.54 13,233.63 10,726.3
Aug-97 10,860.15 11,424.40 12,734.89 10,697
Sep-97 11,570.40 12,336.06 13,462.82 11,217.7
Oct-97 10,840.31 11,595.16 13,028.37 10,195.5
Nov-97 10,840.31 11,319,19 13,328.02 10,172.5
Dec-97 11,062.53 11,325.99 13,553.27 10,172.5
Average Annual
Total Return
for period ended
12/31/97
1 Year
13.34%
Since Inception
(9/30/96)
8.37%
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* The Lipper Growth Funds Index is an equal-weighted performance index,
adjusted for capital-gains distributions and income dividends, of the largest
qualifying funds in this investment objective, and is compiled by Lipper
Analytical Services, Inc.
** The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell
Company.
*** The Warburg Pincus/Venture Economics Post-Venture Capital Index is a
market-valued index that measures the performance of public stocks of
companies that received financing from a U.S. venture capital or buyouts
limited partnership prior to or during public trading status, without
dividends. Companies remain in the index for 10 years from the date of first
inclusion or until the price data is no longer available, for example, due
to a merger or acquisition. The index is calculated monthly and has a first
index period of January 1986 with the index value initialized at 100. The
index is a joint project of Venture Economics and Warburg Pincus Asset
Management, Inc.
9
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WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1997
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Dear Shareholder: February 9, 1998
The objective of Warburg Pincus Trust -- Growth & Income Portfolio (the
'Portfolio') is long-term growth of capital and income. The Portfolio pursues
its objective by investing primarily in equity securities.
For the two months ended December 31,1997 (the Portfolio's inception date was
October 31, 1997), the Portfolio had a return of 3.89%, vs. a 6.42% return for
the S&P 500 Index. The stock market was highly volatile during this brief
reporting period, as earnings uncertainties arising in large part from financial
and economic turmoil in Asia fueled sharp short-term swings in investor
sentiment toward stocks broadly.
We adhere to a strict bottom-up stock-selection process, one based on a
security's risk-adjusted total-return potential over the longer term. We strive
to identify stocks that are temporarily depressed for cyclical or other
identifiable reasons, emphasizing factors such as management changes,
restructurings, or new products or services that can potentially improve
earnings and free cash flow. That said, we do pay heed to sector weightings. In
general, we will not aggressively overweight industries when stock valuations
within and across sectors are relatively narrow, as was the case during the
period.
Going forward, we believe a high degree of market volatility will likely
persist well into 1998, and thus individual stock selection remains critical. In
this context, we will continue to search for stocks with the potential to
perform relatively well in both down and up markets, focusing on companies with
strong cash flows and improving earnings prospects.
Brian S. Posner
Portfolio Manager
10
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WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (89.4%)
Argentina (2.7%)
Banco Frances del Rio de la Plata SA ADR 1,850 $ 50,644
Telefonica de Argentina SA ADR 96,000 3,576,000
YPF SA ADR 172,700 5,904,181
------------
9,530,825
------------
Australia (2.2%)
Foodland Associated, Ltd. 355,400 2,660,948
National Australia Bank, Ltd. 356,500 4,977,861
------------
7,638,809
------------
Austria (1.5%)
Boehler-Uddeholm AG 8,176 478,571
V.A. Technologie AG 31,385 4,758,295
------------
5,236,866
------------
Belgium (0.9%)
Dexia Belgium 22,730 3,052,147
------------
Brazil (1.6%)
CIA de Saneamento Basico do Estado de Sao Paulo 6,604,200 1,568,173
Telecomunicacoes Brasileiras SA ADR 34,500 4,017,094
------------
5,585,267
------------
China (1.1%)
Cosco Pacific, Ltd. 1,943,000 1,579,824
Guangshen Railway Co., Ltd. 4,786,068 1,266,275
Guangshen Railway Co., Ltd. ADR 74,847 1,005,757
------------
3,851,856
------------
Denmark (1.8%)
International Service System AS Class B 117,165 4,312,060
SAS Danmark AS 121,400 1,772,985
------------
6,085,045
------------
Finland (1.5%)
Huhtamaki OY Class I 89,900 3,714,549
Rauma OY 103,060 1,608,692
------------
5,323,241
------------
</TABLE>
See Accompanying Notes to Financial Statements.
11
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WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
France (10.7%)
Axa-UAP SA 67,900 $ 5,256,278
Banque Nationale de Paris 76,200 4,052,019
Compagnie de Saint Gobain 26,339 3,743,412
Elf Aquitaine SA 37,500 4,363,466
Lagardere Groupe SCA 132,479 4,382,303
Rhone Poulenc Ltd., Class A 147,363 6,604,054
Societe Generale d'Enterprises SA 160,400 4,159,405
Total Cie Franc des Petroles ADR 6,118 339,549
Total Cie Franc des Petroles Class B 40,423 4,401,210
------------
37,301,696
------------
Germany (4.3%)
Ava Allgemeine 2,800 721,786
Bayerische Motoren Werke AG 1,803 1,348,710
Fresenius Medical Care AG 35,400 2,352,728
Hoechst AG 144,400 5,059,509
Mannesmann AG 10,630 5,374,002
------------
14,856,735
------------
Hong Kong (2.2%)
First Pacific Co., Ltd. 3,399,471 1,645,273
HSBC Holdings PLC (UK) 172,000 4,239,914
Jardine Matheson Holdings, Ltd. 339,070 1,729,257
------------
7,614,444
------------
India (1.7%)
Hindalco Industries, Ltd. 30,000 568,495
Indo Rama Synthetics GDR 67,400 171,870
Reliance Industries, Ltd. GDS 274,085 2,357,131
State Bank of India, Ltd. 217,800 1,437,601
Tata Engineering & Locomotive Co., Ltd. 159,200 1,202,867
------------
5,737,964
------------
Indonesia (0.1%)
P.T. Lippo Securities 345,500 14,147
P.T. Semen Gresik 353,000 207,181
------------
221,328
------------
Ireland (0.4%)
Greencore Group PLC 263,200 1,237,985
------------
</TABLE>
See Accompanying Notes to Financial Statements.
12
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<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Israel (1.6%)
Blue Square Israel Co., Ltd. ADR 159,600 $ 1,975,050
ECI Telecommunications Limited Designs 131,350 3,349,425
Orbotech, Ltd. 7,000 223,125
------------
5,547,600
------------
Italy (3.9%)
Assicurazioni Generali SPA 132,000 3,244,011
Ente Nazionale Idrocarburi SPA 693,600 3,934,854
Parmalat Finanziaria SPA 1,956,800 2,800,178
Telecom Italia SPA 570,000 3,643,107
------------
13,622,150
------------
Japan (15.0%)
Advantest Corp. 33,000 1,878,157
Aiwa Co., Ltd. 60,500 1,530,867
Daibiru Corp. 131,000 962,190
Fuji Bank, Ltd. 400,000 1,624,352
Fujitsu, Ltd. 321,000 3,456,362
Hankyu Realty Co., Ltd. 230,000 1,079,056
Hirata Technical Co., Ltd. 76,400 252,667
Japan Asia Investment Co., Ltd. 129,000 231,170
Keyence Corp. 50 7,422
Mitsubishi Estate Co., Ltd. 166,000 1,812,937
NEC Corp. 355,000 3,795,154
Nichiei Co., Ltd. 19,800 2,116,733
Nitta Industrial Corp. 123,000 1,248,720
Orix Corp. 86,700 6,068,016
Rohm Co., Ltd. 51,000 5,216,846
Shinmei Electric Co. 91,000 1,469,762
Shohkoh Fund & Co., Ltd. 6,000 1,836,625
Sony Corp. 63,000 5,620,627
Sumitomo Bank, Ltd. 325,000 3,724,396
TDK Corp. 60,000 4,540,802
Uny Co., Ltd. 74,000 1,018,758
Yamanouchi Pharmaceutical Co., Ltd. 124,000 2,670,336
------------
52,161,955
------------
</TABLE>
See Accompanying Notes to Financial Statements.
13
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Mexico (1.6%)
Alfa SA Series A 132,326 $ 892,918
Gruma SA de CV Class B 260,304 1,033,233
Panamerican Beverages, Inc. Class A 114,370 3,731,321
------------
5,657,472
------------
Netherlands (3.5%)
ASM Lithography Holding NV 'D' 10,000 656,068
ASM Lithography Holding NV ADR 45,500 3,071,250
ING Groep NV 18,900 796,190
Philips Electronics NV 127,100 7,623,881
------------
12,147,389
------------
New Zealand (2.2%)
Brierley Investments, Ltd. 6,116,500 4,368,401
Fletcher Challenge Building 1,041,350 2,128,403
Fletcher Challenge Forestry 1,566,154 1,300,424
------------
7,797,228
------------
Norway (1.3%)
SAS Norge ASA Class B 107,300 1,499,134
Smedvig ASA ADR Class B 43,300 909,300
Smedvig ASA Class B 75,000 1,576,872
Transocean Offshore, Inc. 8,200 395,137
------------
4,380,443
------------
Philippines (0.2%)
Millicom International Cellular SA 19,750 743,094
------------
Portugal (1.6%)
Cimpor Cimentos de Portugal SA 42,000 1,102,062
Portugal Telecom SA 4,800 222,971
Portugal Telecom SA ADR 91,100 4,281,700
------------
5,606,733
------------
Singapore (2.1%)
DBS Land, Ltd. 1,002,000 1,534,274
Development Bank of Singapore, Ltd. 669,700 5,723,456
------------
7,257,730
------------
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Spain (2.1%)
Banco de Santander ADR 65,200 $ 2,123,075
Catalana Occidente SA 31,500 1,603,775
Iberdrola SA 266,300 3,503,134
------------
7,229,984
------------
Sweden (4.6%)
ABB AB Series B 293,320 3,456,538
Biacore International AB ADR 116,800 1,014,700
Biora AB ADR 'D' 4,900 101,675
Electrolux AB Series B 89,845 6,239,268
Nordbanken Holding AB 905,789 5,125,798
------------
15,937,979
------------
Switzerland (3.4%)
Julius Baer Holding AG 3,600 6,688,835
Oerlikon-Buehrle Holding AG 37,400 5,256,590
------------
11,945,425
------------
Thailand (0.1%)
Industrial Finance Corp. of Thailand 125,900 19,350
Siam Cement Co., Ltd. 27,500 217,036
------------
236,386
------------
United Kingdom (13.5%)
Biocompatibles International PLC 89,900 728,518
British Airport Authority PLC 363,736 2,980,504
Care First Group PLC 306,980 851,107
Cookson Group PLC 1,118,028 3,596,446
Glaxo Wellcome PLC 169,700 4,020,855
Hanson PLC 166,950 748,561
Imperial Chemical Industries PLC 331,100 5,181,003
Medeva PLC 1,135,200 3,016,609
Orange PLC 1,250,500 5,432,025
Perpetual PLC 24,300 1,123,535
Pilkington PLC 1,519,200 3,199,625
Rolls-Royce PLC 1,202,840 4,651,038
Royal & Sun Alliance Insurance Group PLC 337,400 3,403,139
Safeway PLC 22,100 124,727
Thistle Hotels PLC 846,248 2,206,993
Williams Holdings PLC 987,403 5,491,428
------------
46,756,113
------------
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
TOTAL COMMON STOCKS (Cost $307,996,569) $310,301,889
------------
PREFERRED STOCK (0.4%)
Brazil (0.4%)
Petroleo Brasileiro SA 6,840,000 1,599,649
------------
TOTAL PREFERRED STOCK (Cost $1,486,531) 1,599,649
------------
RIGHTS/WARRANTS (0.1%)
Brazil (0.0%)
CIA de Saneamento Basico do Estado de Sao Paulo Rts.
01/11/98 'D' 20,980 0
------------
France (0.1%)
Rhone-Poulenc SA Class A Wts., 11/05/01 'D' 70,000 240,863
------------
Indonesia (0.0%)
P.T. Sinar Mas Multiartha Wts., 11/28/01 'D' 17,940 82
------------
TOTAL RIGHTS/WARRANTS (Cost $186,101) 240,945
------------
OPTIONS (0.0%)
Singapore (0.0%)
DBS 50 Index, 01/22/98 (Strike Price $402.71) 3,537 0
DBS 50 Index, 01/23/98 (Strike Price $406.91) 3,436 0
DBS 50 Index, 01/26/98 (Strike Price $407.39) 3,384 0
DBS 50 Index, 02/26/98 (Strike Price $404.00) 705 0
------------
TOTAL OPTIONS (Cost $481,000) 0
------------
<CAPTION>
PAR
(000)
<S> <C> <C>
REPURCHASE AGREEMENT (9.1%)
Repurchase agreement with Goldman, Sachs & Co. dated 12/31/97
at 6.35% to be repurchased at $31,590,140 on 01/02/98.
(Collateralized by a pro rata amount of $427,695,000 U.S.
Treasury Note, 6.25%, due 02/28/02. Pro rata market value of
collateral is $32,231,947.) (Cost $31,579,000) $31,579 31,579,000
------------
TOTAL INVESTMENTS AT VALUE (99.0%) (Cost $341,729,201*) 343,721,483
OTHER ASSETS IN EXCESS OF LIABILITIES (1.0%) 3,507,499
------------
NET ASSETS (100.0%) (applicable to 33,105,355 shares
outstanding) $347,228,982
------------
------------
NET ASSET VALUE, offering and redemption price per share
($347,228,982 [div] 33,105,355) $10.49
-------
-------
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
GDR = Global Depository Receipt
GDS = Global Depository Share
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $342,665,503.
See Accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (91.8%)
Aerospace & Defense (0.8%)
Loral Space & Communications, Ltd. 'D' 233,200 $ 4,999,225
------------
Banks & Savings & Loans (0.5%)
Cullen Frost Bankers, Inc. 25,400 1,541,462
HUBCO, Inc. 25,000 978,125
WMF Group, Ltd. 'D' 69,367 867,083
------------
3,386,670
------------
Business Services (10.2%)
Bowne & Co., Inc. 160,000 6,380,000
Corporate Express, Inc. 'D' 347,900 4,479,212
Hypercom Corp. 'D' 364,000 5,141,500
On Assignment, Inc. 'D' 171,600 4,547,400
Paraxel International Corp. 'D' 144,000 5,328,000
PrePaid Legal Services, Inc. 'D' 100,000 3,418,750
QuickResponse Services, Inc. 'D' 185,600 6,867,200
Robert Half International, Inc. 'D' 182,750 7,310,000
Sitel Corp. 'D' 650,700 5,937,637
Sterling Commerce, Inc. 'D' 169,000 6,495,937
Technology Solutions Co. 'D' 229,700 6,058,337
U.S. Office Products Co. 317,500 6,230,938
------------
68,194,911
------------
Communications & Media (5.3%)
Central European Media Enterprises, Ltd. Class A 234,200 5,913,550
Heftel Broadcasting Corp. 'D' 159,000 7,433,250
Metro Networks, Inc. 'D' 112,100 3,671,275
Outdoor Systems, Inc. 'D' 249,450 9,572,644
Universal Outdoor Holdings, Inc. 168,000 8,736,000
------------
35,326,719
------------
Computers (12.0%)
Adobe Systems, Inc. 127,600 5,263,500
Cambridge Technology Partners of Massachusetts, Inc. 'D' 167,000 6,951,375
Citrix Systems, Inc. 'D' 143,700 10,921,200
DataWorks Corp. 'D' 44,000 874,500
Harbinger Corp. 'D' 149,800 4,213,125
I2 Technologies, Inc. 'D' 110,000 5,802,500
JDA Software Group, Inc. 'D' 182,600 6,391,000
Manugistics Group, Inc. 139,000 6,202,875
National Instruments Corp. 'D' 221,250 6,416,250
PLATINUM Technology, Inc. 'D' 283,000 7,994,750
System Software Associates, Inc. 294,000 2,572,500
Tecnomatix Technologies, Ltd. 'D' 224,500 7,576,875
Transactions Systems Architects, Inc. Class A 'D' 234,600 8,914,800
------------
80,095,250
------------
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Conglomerates (0.9%)
Lancaster Colony Corp. 108,000 $ 6,088,500
------------
Consumer Non-Durables (1.2%)
Central Garden & Pet Co. 'D' 232,100 6,092,625
Interface, Inc. 73,000 2,117,000
------------
8,209,625
------------
Consumer Services (1.8%)
Budget Group, Inc. Class A 'D' 172,200 5,951,662
DeVRY, Inc. 'D' 172,000 5,482,500
Youth Services International, Inc. 'D' 15,000 235,313
------------
11,669,475
------------
Electronics (6.4%)
ADE Corp. 'D' 312,200 5,463,500
Avant! Corp. 'D' 281,900 4,721,825
Burr-Brown Corp. 'D' 216,200 6,945,425
Etec Systems, Inc. 'D' 141,800 6,593,700
KLA-Tencor Corp. 'D' 129,500 5,001,937
Pinnacle Systems, Inc. 'D' 220,400 5,372,250
Uniphase Corp. 'D' 57,200 2,366,650
Vitesse Semiconductor Corp. 'D' 161,400 6,092,850
------------
42,558,137
------------
Energy (3.4%)
Chieftain International, Inc. 'D' 248,400 5,278,500
Coho Energy, Inc. 'D' 330,000 3,011,250
KCS Energy, Inc. 328,100 6,808,075
Southern Mineral Corp. 176,625 971,437
Stone Energy Corp. 'D' 197,000 6,599,500
------------
22,668,762
------------
Environmental Services (1.4%)
Allied Waste Industries, Inc. 'D' 284,400 6,630,075
Casella Waste Systems, Inc. 'D' 96,400 2,542,550
------------
9,172,625
------------
Financial Services (5.8%)
Allmerica Financial Corp. 166,600 8,319,587
AmerUs Life Holdings, Inc. 152,000 5,605,000
Legg Mason, Inc. 110,666 6,190,379
PMT Services, Inc. 'D' 502,200 6,968,025
Protective Life Corp. 98,000 5,855,500
Vesta Insurance Group, Inc. 96,800 5,747,500
------------
38,685,991
------------
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Food, Beverages & Tobacco (1.0%)
Consolidated Cigar Holdings, Inc. 'D' 175,700 $ 4,842,731
Hain Food Group, Inc. 'D' 162,900 1,496,644
------------
6,339,375
------------
Healthcare (4.5%)
Core, Inc. 'D' 420,500 4,940,875
Mid Atlantic Medical Services, Inc. 'D' 426,100 5,432,775
Minimed, Inc. 'D' 143,600 5,582,450
National Surgery Centers, Inc. 'D' 300,000 7,875,000
NovaCare, Inc. 'D' 467,100 6,101,494
------------
29,932,594
------------
Industrial Mfg. & Processing (0.2%)
Elbit Vision Systems, Inc. 'D' 120,000 1,320,000
------------
Leisure & Entertainment (3.0%)
Coach USA, Inc. 'D' 199,700 6,689,950
Premier Parks, Inc. 'D' 157,000 6,358,500
Vistana, Inc. 'D' 313,000 7,199,000
------------
20,247,450
------------
Lodging & Restaurants (1.9%)
Bob Evans Farms, Inc. 309,100 6,838,838
Promus Hotel Corp. 'D' 138,600 5,821,200
------------
12,660,038
------------
Metals & Mining (0.7%)
Metals USA, Inc. 'D' 318,800 4,861,700
------------
Office Equipment & Supplies (1.6%)
Miller (Herman), Inc. 190,600 10,399,613
------------
Oil Services (5.0%)
Global Industries, Ltd. 'D' 364,000 6,188,000
Nabors Industries, Inc. 'D' 245,200 7,708,475
Petroleum Geo Services ADR 'D' 167,500 10,845,625
Pride International, Inc. 'D' 349,400 8,822,350
------------
33,564,450
------------
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Pharmaceuticals (5.6%)
Alkermes, Inc. 'D' 307,900 $ 6,119,513
ChiRex, Inc. 200,000 3,525,000
Gilead Sciences, Inc. 'D' 151,300 5,787,225
SangStat Medical Corp. 'D' 192,000 7,776,000
Sepracor, Inc. 'D' 161,000 6,450,063
Serologicals Corp. 'D' 298,800 7,768,800
------------
37,426,601
------------
Publishing (2.2%)
Central Newspapers, Inc. Class A 'D' 99,900 7,386,356
Valassis Communications, Inc. 'D' 196,200 7,259,400
------------
14,645,756
------------
Real Estate (4.0%)
Apartment Investment & Management Co. Class A 155,588 5,717,861
Fairfield Communities, Inc. 'D' 226,500 9,994,313
Trammell Crow Co. 'D' 186,900 4,812,675
U.S. Restaurant Properties, Inc. 239,850 5,741,409
------------
26,266,258
------------
Retail (4.8%)
Barnes & Noble, Inc. 'D' 190,400 6,354,600
Borders Group, Inc. 'D' 189,600 5,936,850
Fingerhut Companies, Inc. 264,000 5,643,000
Payless ShoeSource, Inc. 'D' 105,300 7,068,263
Staples, Inc. 'D' 260,000 7,215,000
------------
32,217,713
------------
Telecommunications & Equipment (4.2%)
Intermedia Communications Of Florida, Inc. 'D' 167,300 10,163,475
McLeodUSA, Inc. Class A 'D' 228,000 7,296,000
Paging Network, Inc. 'D' 503,900 5,416,925
Teledata Communications, Ltd. 'D' 272,500 4,973,125
------------
27,849,525
------------
Transportation (3.4%)
Heartland Express, Inc. 'D' 210,550 5,658,531
M.S. Carriers, Inc. 'D' 247,000 6,144,125
Mark VII, Inc. 'D' 267,300 4,443,863
Swift Transportation Co., Inc. 'D' 204,500 6,620,688
------------
22,867,207
------------
TOTAL COMMON STOCK (Cost $484,600,282) 611,654,170
------------
</TABLE>
See Accompanying Notes to Financial Statements.
20
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
(000) VALUE
----------- ------------
<S> <C> <C>
REPURCHASE AGREEMENTS (9.5%)
Repurchase agreement with Goldman, Sachs & Co. dated
12/31/97 at 6.35% to be repurchased at $63,278,315 on
01/02/98. (Collateralized by a pro rata amount of
$427,695,000 U.S. Treasury Note, 6.25%, due 02/28/02. Pro
rata market value of collateral is $64,563,921.) (Cost
$63,256,000) $63,256 $ 63,256,000
------------
TOTAL INVESTMENTS AT VALUE (101.3%) (Cost $547,856,282*) 674,910,170
LIABILITIES IN EXCESS OF OTHER ASSETS (1.3%) (8,516,513)
------------
NET ASSETS (100.0%) (applicable to 40,425,193 shares
outstanding) $666,393,657
------------
------------
NET ASSET VALUE, offering and redemption price per share
($666,393,657 [div] 40,425,193) $16.48
------
------
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Cost for federal income tax purposes is $547,982,385.
See Accompanying Notes to Financial Statements.
21
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
<S> <C> <C>
COMMON STOCK (97.3%) ----------- ------------
Aerospace & Defense (2.3%)
Gulfstream Aerospace Corp. 'D' 11,100 $ 324,675
Loral Space & Communications, Ltd. 'D' 18,100 388,019
------------
712,694
------------
Business Services (5.2%)
Paraxel International Corp. 'D' 9,000 333,000
QuickResponse Services, Inc. 'D' 11,800 436,600
Technology Solutions Co. 14,900 392,987
Vincam Group, Inc. 'D' 16,500 439,312
------------
1,601,899
------------
Communications & Media (4.5%)
Central European Media Enterprises, Ltd. 'D' 12,000 303,000
Outdoor Systems, Inc. 'D' 17,125 657,172
Universal Outdoor Holdings, Inc. 8,000 416,000
------------
1,376,172
------------
Computers (17.9%)
BMC Software, Inc. 'D' 11,600 761,250
Cambridge Technology Partners Of Massachusetts 'D' 11,800 491,175
Check Point Software Technologies, Ltd. 'D' 5,000 203,750
Citrix Systems, Inc. 'D' 5,000 380,000
Computer Associates International, Inc. 8,100 428,287
JDA Software Group, Inc. 'D' 13,400 469,000
Manugistics Group, Inc. 'D' 5,000 223,125
Micrografx, Inc. 'D' 39,100 342,125
National Instruments Corp. 'D' 12,750 369,750
PeopleSoft, Inc. 'D' 25,400 990,600
PLATINUM Technology, Inc. 'D' 10,400 293,800
Transactions Systems Architects, Inc. Class A 'D' 13,600 516,800
------------
5,469,662
------------
Consumer Non-Durables (2.7%)
Central Garden & Pet Co. 'D' 15,000 393,750
Westpoint Stevens, Inc. 'D' 9,000 425,250
------------
819,000
------------
Electronics (7.9%)
Avant! Corp. 'D' 19,500 326,625
Etec Systems, Inc. 'D' 8,600 399,900
Linear Technology Corp. 'D' 7,700 443,712
Maxim Integrated Products, Inc. 'D' 25,200 869,400
Vitesse Semiconductor Corp. 9,700 366,175
------------
2,405,812
------------
</TABLE>
See Accompanying Notes to Financial Statements.
22
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Energy (3.6%)
Coho Energy, Inc. 'D' 48,900 $ 446,213
Forcenergy, Inc. 'D' 15,100 395,431
KCS Energy, Inc. 'D' 18,600 385,950
Stone Energy Corp. 'D' 9,900 331,650
------------
1,559,244
------------
Environmental Services (2.4%)
American Disposal Services, Inc.'D' 10,100 368,650
USA Waste Services, Inc. 'D' 9,200 361,100
------------
729,750
------------
Financial Services (12.6%)
Amvescap PLC Sponsored ADR 6,100 526,125
ARM Financial Group, Inc. Class A 'D' 21,300 561,787
Franklin Resources, Inc. 'D' 4,000 347,750
Life Re Corp. 7,200 469,350
Nationwide Financial Services, Inc. 9,000 325,125
PMT Services, Inc. 'D' 31,200 432,900
Price (T. Rowe) Associates, Inc. 'D' 4,100 257,787
Sirrom Capital Corp. 9,400 489,975
SunAmerica, Inc. 10,000 427,500
------------
3,838,299
------------
Healthcare (3.0%)
FPA Medical Management, Inc. 'D' 16,000 298,000
NovaCare, Inc. 28,800 376,200
Steris Corp. 'D' 5,000 241,250
------------
915,450
------------
Industrial Mfg. & Processing (2.8%)
Mettler-Toledo International, Inc. 'D' 21,900 377,775
------------
Leisure & Entertainment (5.2%)
Coach USA, Inc. 'D' 14,500 485,750
N2K, Inc. # 'D' + 25,000 311,175
Premier Parks, Inc. 'D' 10,200 413,100
Vistana, Inc. 'D' 16,600 381,800
------------
1,591,825
------------
Metals & Mining (1.5%)
Metals USA, Inc. 'D' 30,400 463,600
------------
Oil Services (2.6%)
Petroleum Geo Services ADR 'D' 6,000 388,500
Pride International, Inc. 'D' 16,500 416,625
------------
805,125
------------
</TABLE>
See Accompanying Notes to Financial Statements.
23
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (CONT'D)
Pharmaceuticals (5.1%)
ChiRex, Inc. 17,100 $ 301,388
Gilead Sciences, Inc. 10,800 413,100
SangStat Medical Corp. 'D' 11,500 465,750
Watson Pharmaceuticals, Inc. 'D' 11,300 366,544
------------
1,546,782
------------
Publishing (1.6%)
Petersen Companies, Inc. Class A 'D' 21,000 483,000
------------
Real Estate (1.6%)
AMB Property Corp. 'D' 19,600 492,450
------------
Retail (6.6%)
Borders Group, Inc. 'D' 15,900 497,869
Family Dollar Stores, Inc. 'D' 14,500 425,031
Payless ShoeSource, Inc. 'D' 5,500 369,188
Rite Aid Corp. 'D' 5,630 330,411
Staples, Inc. 'D' 14,400 399,600
------------
2,022,099
------------
Telecommunications & Equipment (8.2%)
Cisco Systems, Inc. 'D' 7,050 393,038
Intermedia Communications of Florida, Inc. 'D' 9,800 595,350
McLeodUSA, Inc. Class A 'D' 15,800 505,600
Paging Network, Inc. 'D' 28,400 305,300
Teledata Communications, Ltd. 'D' 14,000 255,500
Tellabs, Inc. 'D' 8,400 444,150
------------
2,498,938
------------
TOTAL INVESTMENTS AT VALUE (97.3%) (Cost $26,284,604*) 29,709,576
OTHER ASSETS IN EXCESS OF LIABILITIES (2.7%) 810,613
------------
NET ASSETS (100.0%) (applicable to 2,758,433 shares outstanding) $30,520,189
------------
------------
NET ASSET VALUE, offering and redemption price per share ($30,520,189 [div]
2,758,433) $11.06
------
------
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
# Restricted security.
+ Not readily marketable security.
* Cost for federal income tax purposes is $26,392,728.
See Accompanying Notes to Financial Statements.
24
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ----------
<S> <C> <C>
COMMON STOCK (80.9%)
Aerospace & Defense (4.4%)
Gulfstream Aerospace Corp. 'D' 800 $ 23,400
Litton Industries, Inc. 'D' 350 20,125
Lockheed Martin Corp. 250 24,625
Raytheon Co. Class A 400 19,725
----------
87,875
----------
Agriculture (0.5%)
IMC Global, Inc. 300 9,825
----------
Banks & Savings & Loans (2.8%)
Bank of New York Co., Inc. 300 17,344
Citicorp 300 37,931
----------
55,275
----------
Building & Building Materials (1.7%)
USG Corp. 'D' 700 34,300
----------
Business Services (0.7%)
Block (H&R), Inc. 150 6,722
Deluxe Corp. 200 6,900
----------
13,622
----------
Capital Equipment (5.2%)
AlliedSignal, Inc. 400 15,575
American Standard Co., Inc. 'D' 500 19,156
Caterpillar, Inc. 200 9,712
Cummins Engine Co., Inc. 200 11,812
Emerson Electric Co. 250 14,109
Ingersoll-Rand Co. 300 12,150
ITT Industries, Inc. 700 21,962
----------
104,476
----------
Chemicals (3.3%)
Ferro Corp. 400 9,725
Olin Corp. 300 14,062
Rhone Poulenc SA Series A ADR 450 19,969
Union Carbide Corp. 500 21,469
----------
65,225
----------
</TABLE>
See Accompanying Notes to Financial Statements.
25
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER
OF
SHARES VALUE
------ ----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Computers (4.1%)
Automatic Data Processing, Inc. 200 $ 12,275
Hewlett-Packard Co. 200 12,500
International Business Machines Corp. 400 41,825
Sun Microsystems, Inc. 'D' 400 15,950
----------
82,550
----------
Conglomerates (2.3%)
Harsco Corp. 500 21,562
United Technologies Corp. 350 25,484
----------
47,046
----------
Consumer Durables (4.1%)
Chrysler Corp. 1,400 49,262
Ford Motor Co. 500 24,344
Maytag Corp. 250 9,328
----------
82,934
----------
Consumer Non-Durables (3.1%)
Newell Co. 150 6,375
Premark International, Inc. 600 17,400
RJR Nabisco Holdings Corp. 450 16,875
Unilever NV 350 21,853
----------
62,503
----------
Energy (7.8%)
British Petroleum Co. PLC ADR 700 55,781
Exxon Corp. 600 36,712
Mobil Corp. 500 36,094
Total SA ADR 500 27,750
----------
156,337
----------
</TABLE>
See Accompanying Notes to Financial Statements.
26
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Financial Services (7.9%)
American Express Co. 100 $ 8,925
Berkley (W.R.) Corp. 300 13,163
Fannie Mae 400 22,825
FINOVA Group, Inc. 450 22,359
Freddie Mac 300 12,581
Household International, Inc. 50 6,378
Lehman Brothers Holdings, Inc. 250 12,750
MBIA, Inc. 300 20,044
Provident Companies, Inc. 350 13,519
Terra Nova (Bermuda) Holdings, Ltd. Class A 350 9,188
Travelers Property Casualty Corp. 400 17,600
----------
159,332
----------
Food, Beverages & Tobacco (5.0%)
Anheuser-Busch Companies, Inc. 650 28,600
Philip Morris Companies, Inc. 900 40,781
Ralston Purina Group 100 9,294
Sara Lee Corp. 250 14,078
Swedish Match Co. AB ADR 250 8,313
----------
101,066
----------
Healthcare (3.8%)
Baxter International, Inc. 450 22,697
Foundation Health Systems, Inc. Class A 'D' 200 4,475
Tenet Healthcare Corp. 'D' 450 14,906
Trigon Healthcare, Inc. 'D' 800 20,900
Wellpoint Health Networks, Inc. 'D' 300 12,675
----------
75,653
----------
Industrial Mfg. & Processing (0.6%)
UNOVA, Inc. 'D' 700 11,506
----------
Leisure & Entertainment (1.1%)
Polaroid Corp. 450 21,909
----------
Lodging & Restaurants (1.2%)
La Quinta Inns, Inc. 1,300 25,106
----------
Metals & Mining (2.1%)
Alumax, Inc. 'D' 700 23,800
Aluminum Company of America 250 17,594
----------
41,394
----------
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ----------
<S> <C> <C>
COMMON STOCK (CONT'D)
Office Equipment & Supplies (0.5%)
Pitney Bowes, Inc. 100 $ 8,994
----------
Oil Services (2.5%)
Noble Drilling Corp. 'D' 550 16,844
Reading & Bates Corp. 'D' 450 18,844
Transocean Offshore, Inc. 300 14,456
----------
50,144
----------
Pharmaceuticals (2.7%)
American Home Products Corp. 350 26,775
Merck & Co., Inc. 250 26,563
----------
53,338
----------
Retail (5.4%)
Carson Pirie Scott & Co. 'D' 100 5,013
Federated Department Stores, Inc. 'D' 700 30,144
May Department Stores Co. 250 13,172
Neiman-Marcus Group, Inc. 'D' 350 10,588
Payless ShoeSource, Inc. 'D' 250 16,781
Rite Aid Corp. 150 8,803
Wal-Mart Stores, Inc. 600 23,663
----------
108,164
----------
Telecommunications & Equipment (4.8%)
ALLTEL Corp. 200 8,213
Ameritech Corp. 250 20,125
Bell Atlantic Corp. 400 36,400
BellSouth Corp. 300 16,894
SBC Communications, Inc. 200 14,650
----------
96,282
----------
Transportation (1.3%)
Burlington Northern Santa Fe Corp. 100 9,294
CSX Corp. 300 16,200
----------
25,494
----------
Utilities-Electric (2.0%)
Allegheny Energy, Inc. 250 8,125
American Electric Power Co., Inc. 300 15,488
Entergy Corp. 300 8,981
Illinova Corp. 300 8,081
----------
40,675
----------
TOTAL COMMON STOCK (Cost $1,559,390) 1,621,025
----------
</TABLE>
See Accompanying Notes to Financial Statements.
28
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ----------
<S> <C> <C>
PREFERRED STOCK (3.5%)
Communications & Media (0.5%)
AirTouch Communications, Inc. Series B 6%
(Callable 08/16/99 @ $35.96) 300 $ 10,688
----------
Financial Services (2.2%)
Allstate Corp. Exchangable Notes 6.76% (Callable 04/15/98 @
$41.50) 750 45,000
----------
Real Estate (0.8%)
Equity Residential Properties Series G 7.25% (Callable
09/15/02 @ $25.91) 600 15,375
----------
TOTAL PREFERRED STOCK (Cost $64,693) 71,063
----------
BONDS (0.4%)
Micron Technology, Inc. (Convertible) (Callable 07/03/01 @
$103) 8,000 7,390
----------
TOTAL BONDS (Cost $7,416) 7,390
----------
<CAPTION>
PAR
(000)
-----------
<S> <C> <C>
REPURCHASE AGREEMENT (15.2%)
Repurchase agreement with Goldman, Sachs & Co. dated 12/31/97
at 6.35% to be repurchased at $304,107 on 01/02/98.
(Collateralized by a pro rata amount of $427,695,000
U.S. Treasury Note, 6.25%, due 02/28/02. Pro rata market
value of collateral is $310,286.) (Cost $304,000) $304 304,000
----------
TOTAL INVESTMENTS AT VALUE (100%) (Cost $1,935,499*) $2,003,478
----------
----------
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
</TABLE>
- --------------------------------------------------------------------------------
'D' Non-income producing security.
* Also cost for federal income tax purposes.
See Accompanying Notes to Financial Statements.
29
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments at value (Cost $1,935,499) $ 2,003,478
Receivable for fund shares sold 51,568
Receivable for investment sold 28,894
Deferred offering costs 20,822
Receivable from advisor 15,673
Dividends and interest receivable 3,371
Cash 349
-----------
Total Assets 2,124,155
-----------
LIABILITIES
Payable for investments purchased 105,951
Accrued expenses payable 24,063
Other liabilities 1,000
-----------
Total Liabilities 131,014
-----------
NET ASSETS, applicable to 192,982 common shares outstanding $ 1,993,141
-----------
-----------
NET ASSET VALUE, offering and redemption price per share
($1,993,141[div]192,982) $ 10.33
-----------
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
30
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
STATEMENTS OF OPERATIONS
For the Year or Period Ended December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL SMALL COMPANY POST-VENTURE GROWTH &
EQUITY GROWTH CAPITAL INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(1)
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 6,578,543 $ 767,441 $ 54,573 $ 5,434
Interest 1,283,537 2,028,219 147,717 3,003
Foreign taxes withheld (648,169) 0 0 0
------------- ------------- ------------ ------
Total investment income 7,213,911 2,795,660 202,290 8,437
------------- ------------- ------------ ------
EXPENSES:
Investment advisory 3,592,157 4,349,002 386,073 2,055
Administrative services 768,432 955,024 61,772 685
Custodian/Sub-custodian 358,031 94,486 37,093 5,025
Trustees 2,510 2,495 2,495 0
Insurance 5,816 6,225 205 1,000
Interest 3,287 3,740 2,040 8
Offering/organizational 12,443 12,380 7,293 4,178
Professional services 44,124 50,854 14,972 10,001
Printing 7,247 13,179 1,529 3,500
Registration 160 0 100 0
Transfer agent 3,224 5,376 1,020 100
Miscellaneous 65,016 22,640 5,976 2,001
------------- ------------- ------------ ------
4,862,447 5,515,401 520,568 28,553
Less fees waived, expenses reimbursed and
transfer agent offsets (20,089) (24,660) (88,166) (25,813)
------------- ------------- ------------ ------
Total expenses 4,842,358 5,490,741 432,402 2,740
------------- ------------- ------------ ------
Net investment income (loss) 2,371,553 (2,695,081) (230,112) 5,697
------------- ------------- ------------ ------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS AND FOREIGN CURRENCY RELATED
ITEMS:
Net realized gain (loss) from security and
other related transactions (18,668,797) 1,317,196 (179,000) (8,068)
Net realized gain from foreign currency
related items 11,010,785 0 0 0
Net change in unrealized appreciation
(depreciation) from investments and foreign
currency related items (7,070,165) 80,858,786 3,246,410 67,978
------------- ------------- ------------ ------
Net realized and unrealized gain (loss)
from investments
and foreign currency related items (14,728,177) 82,175,982 3,067,410 59,910
------------- ------------- ------------ ------
Net increase (decrease) in net assets resulting
from operations $ (12,356,624) $79,480,901 $2,837,298 $ 65,607
------------- ------------- ------------ ------
------------- ------------- ------------ ------
</TABLE>
- --------------------------------------------------------------------------------
(1) For the period October 31, 1997 (Commencement of Operations) through
December 31, 1997.
See Accompanying Notes to Financial Statements.
31
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
PORTFOLIO
-------------------------------------------
FOR THE YEAR ENDED
DECEMBER 31,
-------------------------------------------
1997 1996
------------------- -------------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 2,371,553 $ 1,409,720
Net realized gain (loss) from security and other
related transactions (18,668,797) 1,520,782
Net realized gain from foreign currency related items 11,010,785 1,491,912
Net change in unrealized appreciation (depreciation)
from investments and foreign currency related items (7,070,165) 10,686,258
------------------- -------------------
Net increase (decrease) in net assets resulting
from operations (12,356,624) 15,108,672
------------------- -------------------
FROM DISTRIBUTIONS:
Dividends from net investment income (305,296) (1,624,713)
Distributions in excess of net investment income 0 (2,505,916)
Return of capital 0 0
Distributions from realized gains 0 (1,520,782)
Distributions in excess of realized capital gains (21,970,160) (317,087)
------------------- -------------------
Net decrease in net assets from distributions (22,275,456) (5,968,498)
------------------- -------------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 169,935,030 333,352,387
Reinvested dividends 22,275,452 5,968,497
Net asset value of shares redeemed (108,567,703) (114,779,643)
------------------- -------------------
Net increase in net assets from capital share
transactions 83,642,779 224,541,241
------------------- -------------------
Net increase in net assets 49,010,699 233,681,415
NET ASSETS:
Beginning of period 298,218,283 64,536,868
------------------- -------------------
End of period $ 347,228,982 $ 298,218,283
------------------- -------------------
------------------- -------------------
Undistributed net investment income/(distribution in
excess of net investment income) $ (902,800) $ (1,376,373)
------------------- -------------------
------------------- -------------------
</TABLE>
See Accompanying Notes to Financial Statements.
32
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH POST-VENTURE CAPITAL GROWTH & INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------- ----------------------------------- -------------------
FOR THE PERIOD
SEPTEMBER 30, 1996 FOR THE PERIOD
(COMMENCEMENT OF OCTOBER 31, 1997
FOR THE YEAR ENDED FOR THE OPERATIONS) (COMMENCEMENT OF
DECEMBER 31, YEAR ENDED THROUGH OPERATIONS) THROUGH
------------------------------------------- DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997
------------------- ------------------- ------------ ------------------ -------------------
<S> <C> <C> <C> <C> <C>
$ (2,695,081) $ (1,546,927) $ (230,112 ) $ 4,291 $ 5,697
1,317,196 (17,819,175) (179,000 ) (48,100) (8,068)
0 0 0 0 0
80,858,786 34,312,085 3,246,410 178,562 67,978
------------------- ------------------- ------------ ---------- --------
79,480,901 14,945,983 2,837,298 134,753 65,607
------------------- ------------------- ------------ ---------- --------
0 0 (4,291 ) 0 (5,697)
0 0 (129 ) 0 0
0 0 0 0 (4,497)
0 0 0 0 0
0 0 0 0 0
------------------- ------------------- ------------ ---------- --------
0 0 (4,420 ) 0 (10,194)
------------------- ------------------- ------------ ---------- --------
473,863,814 434,899,200 67,627,302 12,267,019 1,927,534
0 0 4,420 0 10,194
(226,348,615) (207,892,540) (52,343,943 ) (2,240) 0
------------------- ------------------- ------------ ---------- --------
247,515,199 227,006,660 15,287,779 12,264,779 1,937,728
------------------- ------------------- ------------ ---------- --------
326,996,100 241,952,643 18,120,657 12,399,532 1,993,141
339,397,557 97,444,914 12,399,532 0 0
------------------- ------------------- ------------ ---------- --------
$ 666,393,657 $ 339,397,557 $30,520,189 $ 12,399,532 $ 1,993,141
------------------- ------------------- ------------ ---------- --------
------------------- ------------------- ------------ ---------- --------
$ 0 $ 0 $ 0 $ 4,291 $ 0
------------------- ------------------- ------------ ---------- --------
------------------- ------------------- ------------ ---------- --------
</TABLE>
See Accompanying Notes to Financial Statements.
33
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED JUNE 30, 1995
DECEMBER 31, (COMMENCEMENT OF
----------------------------------- OPERATIONS) THROUGH
1997 1996 DECEMBER 31, 1995
------------ ----------------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.48 $ 10.65 $ 10.00
----- ----- -----
Income from Investment Operations:
Net Investment Income 0.10 0.00 0.03
Net Gain (Loss) from Securities and
Foreign Currency Related Items
(both realized and unrealized) (0.37) 1.06 0.70
----- ----- -----
Total From Investment Operations (0.27) 1.06 0.73
----- ----- -----
Less Distributions:
Dividends from Net Investment Income (0.01) (0.06) (0.01)
Distributions in Excess of Net
Investment Income 0.00 (0.10) (0.07)
Distributions from Realized Gains 0.00 (0.06) 0.00
Distributions in Excess of Realized
Gains (0.71) (0.01) 0.00
----- ----- -----
Total Distributions (0.72) (0.23) (0.08)
----- ----- -----
NET ASSET VALUE, END OF PERIOD $10.49 $ 11.48 $ 10.65
----- ----- -----
----- ----- -----
Total Return (2.26%) 9.98% 7.30%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $347,229 $298,218 $64,537
Ratios to average daily net assets:
Operating expenses 1.36%@ 1.36%@ 1.44%*
Net investment income 0.66% 0.64% 0.48%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 0.00% 0.04% 0.77%*
Portfolio Turnover Rate 78.65% 30.82% 8.31%'D'
Average Commission Rate # $.0163 $0.0232 --
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Portfolios' expenses by .01% and .00% for the years ended December 31, 1997
and 1996, respectively. The Portfolios' operating expense ratio after
reflecting these arrangements were 1.35% and 1.36% for the years ended
December 31, 1997 and 1996, respectively.
'D' Non-annualized.
* Annualized.
#Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a commission
charged. The Average Commission Rate is not required for fiscal periods
beginning before September 1, 1995.
See Accompanying Notes to Financial Statements.
34
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED JUNE 30, 1995
DECEMBER 31, (COMMENCEMENT OF
----------------------------------- OPERATIONS) THROUGH
1997 1996 DECEMBER 31, 1995
------------ ----------------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.25 $ 12.51 $ 10.00
----- ----- -----
Income from Investment Operations:
Net Investment Loss (0.07) (0.06) (0.01)
Net Gain on Securities (both realized
and unrealized) 2.30 1.80 2.52
----- ----- -----
Total From Investment Operations 2.23 1.74 2.51
----- ----- -----
NET ASSET VALUE, END OF PERIOD $16.48 $ 14.25 $ 12.51
----- ----- -----
----- ----- -----
Total Return 15.65% 13.91% 25.10%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $666,394 $339,398 $97,445
Ratios to average daily net assets:
Operating expenses 1.15%@ 1.16%@ 1.25%*
Net investment loss (0.56%) (0.66%) (0.36%)*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 0.00% 0.01% 0.25%*
Portfolio Turnover Rate 92.45% 101.50% 34.25%'D'
Average Commission Rate # $0.0550 $0.0538 --
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Portfolios' expenses by .01% and .00% for the years ended December 31, 1997
and 1996, respectively. The Portfolios' operating expense ratio after
reflecting these arrangements were 1.14% and 1.16% for the years ended
December 31, 1997 and 1996, respectively.
'D' Non-annualized.
* Annualized.
#Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a commission
charged. The Average Commission Rate is not required for fiscal periods
beginning before September 1, 1995.
See Accompanying Notes to Financial Statements.
35
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 30, 1996
FOR THE (COMMENCEMENT OF
YEAR ENDED OPERATIONS) THROUGH
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.76 $ 10.00
----- -----
Income from Investment Operations:
Net Investment Loss (0.08) 0.00
Net Gain (Loss) on Securities (both realized and
unrealized) 1.38 (0.24)
----- -----
Total From Investment Operations 1.30 (0.24)
----- -----
NET ASSET VALUE, END OF PERIOD $ 11.06 $ 9.76
----- -----
----- -----
Total Return 13.34% (2.40%)'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $30,520 $12,400
Ratios to average daily net assets:
Operating expenses 1.40%@ 1.41%@*
Net investment income (loss) (0.75%) 0.80%*
Decrease reflected in above operating expense
ratios due to waivers/reimbursements 0.18% 4.16%*
Portfolio Turnover Rate 238.12% 6.80%'D'
Average Commission Rate # $0.0548 $0.0491
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the
Portfolios' expenses by .00% and .01% for the year or period ended December
31, 1997 and 1996, respectively. The Portfolios' operating expense ratio after
reflecting these arrangements were 1.40% and 1.40% for the year or period
ended December 31, 1997 and 1996, respectively.
'D' Non-annualized.
* Annualized.
#Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a commission
charged. The Average Commission Rate is not required for fiscal periods
beginning before September 1, 1995.
TAX STATUS OF 1997 DIVIDENDS (UNAUDITED)
Ordinary income dividends qualifying for the dividends received deduction
available to corporate shareholders was 0.34%.
See Accompanying Notes to Financial Statements.
36
<PAGE>
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 31, 1997
(COMMENCEMENT OF
OPERATIONS) THROUGH
DECEMBER 31,
1997
-------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
Income from Investment Operations:
Net Investment Income 0.04
Net Gain on Securities (both realized and unrealized) 0.35
Total From Investment Operations 0.39
Less Distributions:
Dividends from Net Investment Income (0.03)
Return of Capital (0.03)
Total Distributions (0.06)
NET ASSET VALUE, END OF PERIOD $10.33
Total Return 3.89%'D'
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $1,993
Ratios to average daily net assets:
Operating expenses 1.00%*@
Net investment income 2.08%*
Decrease reflected in above operating expense ratio due to
waivers/reimbursements. 9.42%*
Portfolio Turnover Rate 64.38%*
Average Commission Rate # $0.0599
</TABLE>
- --------------------------------------------------------------------------------
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the Portfolios'
expense ratio.
'D' Non-annualized.
* Annualized.
#Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a commission
charged. The Average Commission Rate is not required for fiscal periods
beginning before September 1, 1995.
TAX STATUS OF 1997 DIVIDENDS (UNAUDITED)
Ordinary income dividends qualifying for the dividends received deduction
available to corporate shareholders was 51.77%.
See Accompanying Notes to Financial Statements.
37
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Trust (the 'Trust') is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, and
currently offers five investment funds (the 'Portfolios'): International Equity
Portfolio is a diversified investment fund that seeks long-term capital
appreciation by investing primarily in a broadly diversified portfolio of equity
securities of companies that have their principal business activities and
interests outside of the U.S.; Small Company Growth Portfolio is a
non-diversified investment fund that seeks capital growth by investing in a
portfolio of equity securities of small-sized domestic companies; Post-Venture
Capital Portfolio is a diversified investment fund that seeks long-term growth
of capital by investing primarily in equity securities of companies considered
to be in their post-venture-capital stage of development; and Growth & Income
Portfolio is a diversified investment fund that seeks long-term growth of
capital and income by investing primarily in equity securities. Shares of a
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 a Portfolio an investment option for Plan participants. The Emerging
Markets Portfolio commenced investment operations on December 31, 1997, and is
contained in a separate Annual Report.
The net asset value of each Portfolio is determined daily as of the close of
regular trading on the New York Stock Exchange. Each 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 prices. 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 Portfolios 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 Portfolios do 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 Portfolios isolate that portion of gains and losses on
38
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
investments in debt securities which are due to changes in the foreign exchange
rate from that which are due to changes in market prices of debt securities.
The International Equity 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 other
things, fluctuations in currency exchange rates, revaluation of currencies,
future adverse political and economic developments and the imposition of other
foreign laws and restrictions. Securities of foreign issuers are often subject
to less rigorous regulatory practices and requirements than those applied in the
United States and may also be less liquid (and their prices more volatile) than
securities of comparable U.S. companies. Moreover, individual foreign economies
may differ favorably or unfavorably from the U.S. economy in many respects.
When a Portfolio writes or purchases a call or a put option, an amount equal
to the premium received or paid by the Portfolio is recorded as a liability or
asset, the value of which is marked-to-market daily to reflect the current
market value of the option. When the option expires, the Portfolio realizes a
gain or loss equal to the amount of the premium received or paid. When the
Portfolio exercises an option or enters into a closing transaction by purchasing
or selling an offsetting option, it realizes a gain or loss without regard to
any unrealized gain in the underlying security. The potential loss associated
with purchasing an option is limited to the premium paid, and the premium would
partially offset any gains achieved from its use.
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 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.
For U.S. federal income tax purposes, realized losses incurred after October
31, 1997, within the fiscal year, are deemed to arise on the first business day
of the following fiscal year. The International Equity Portfolio incurred and
elected to defer such losses of $25,346,474.
No provision is made for federal income taxes as it is the Trust's intention
to have each Portfolio continue to qualify for and elect the tax treatment
applicable to regulated investment companies under the Internal Revenue Code and
make the requisite distributions to its shareholders which will be sufficient to
relieve it from federal income and excise taxes.
39
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
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. Costs incurred by the Portfolios in connection
with the offering of their shares have been deferred and are being amortized
over a one year period from the date each Portfolio commenced its operations.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, each Portfolio, along with other funds advised by Warburg Pincus
Asset Management, Inc., the Portfolios' investment adviser ('Warburg')
(collectively the 'Warburg Funds'), transfers uninvested cash balances to a
Pooled Cash Account, which is invested in repurchase agreements collateralized
by U.S. government securities. Securities pledged as collateral for repurchase
agreements are held by the Portfolios' 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.
The Warburg Funds have established committed and uncommitted lines of credit
facilities with certain banks for temporary or emergency purposes primarily
relating to fund share redemptions and funding payments of dividend or capital
gain distributions. Under the terms of the committed line of credit, the Warburg
Funds with access to the facility pay a commitment fee at a rate of .10% per
annum on the amount of the line of credit. In addition, under the terms of both
the committed and uncommitted facilities, the Warburg Funds will pay interest on
borrowings at the bank's base rate plus .55%. Aggregate borrowings for each fund
under these credit facilities may not exceed the lower of (a) the maximum amount
permitted by such fund's investment policies and restrictions or (b)
thirty-three and one-third percent (33 1/3%) of such fund's total assets. During
the fiscal year ended December 31, 1997, the maximum daily loan amount
outstanding under the line of credit agreement for the Post-Venture Capital
Portfolio was $975,000; averaging approximately $31,000 per day with an
approximate interest rate of 6.19%. The Portfolio had average shares outstanding
of 29,439,988 which resulted in an average debt per share outstanding of $.0011.
At December 31, 1997 there were no outstanding balances under these line of
credit facilities for any of the Portfolios.
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 Portfolios have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of their
transfer
40
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
agent expense. For the year or period ended December 31, 1997, the Portfolios
received credits or reimbursements under the arrangement as follows:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT
- ------------------------------------------------------ ---------------------
<S> <C>
International Equity $20,089
Small Company Growth 24,660
Post-Venture Capital 1,451
Growth & Income 0
</TABLE>
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, which is indirectly controlled by Warburg, Pincus & Co., serves as
each Portfolio's investment adviser. For its investment advisory services,
Warburg receives the following fees based on each Portfolio's average daily net
assets:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE
- ------------------------------------------------ ---------------------------------
<S> <C>
International Equity 1.00% of average daily net assets
Small Company Growth 0.90% of average daily net assets
Post-Venture Capital 1.25% of average daily net assets
Growth & Income 0.75% of average daily net assets
</TABLE>
For the year or period ended December 31, 1997, investment advisory fees,
voluntary waivers and reimbursements were as follows:
<TABLE>
<CAPTION>
GROSS NET EXPENSE
PORTFOLIO ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS
- -------------------------- ------------ -------- ------------ --------------
<S> <C> <C> <C> <C>
International Equity $3,592,157 $ 0 $3,592,157 $ 0
Small Company Growth 4,349,002 0 4,349,002 0
Post-Venture Capital 386,073 (55,829) 330,244 0
Growth & Income 2,055 (2,055) 0 (23,347)
</TABLE>
Abbott Capital Management, LLC ('Abbott') serves as sub-investment adviser
for the Post-Venture Capital Portfolio's assets invested in U.S. or foreign
private limited partnerships or other investment funds ('Private Fund
Investments'). From its investment advisory fee, Warburg pays Abbott a fee of
1.00% per annum of the value of Private Fund Investments as of the end of each
calendar quarter. Effective January 17, 1997, the Sub-Advisory Agreement was
amended. Under the previous Agreement, Warburg paid Abbott a quarterly fee at
the annual rate of 0.55% of the Portfolio's value of Private Fund Investments as
of the end of each calendar quarter. No compensation is paid by the Post-Venture
Capital Fund to Abbott for its sub-investment advisory services.
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as each Portfolio's co-administrators. For its
administrative services, CFSI currently receives a fee calculated at an annual
rate
41
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR (CONT'D)
of .10% of each Portfolio's average daily net assets. For the year or period
ended December 31, 1997, administrative services fees earned by CFSI were as
follows:
<TABLE>
<CAPTION>
PORTFOLIO CO-ADMINISTRATION FEE
- ------------------------------------------------------ ---------------------
<S> <C>
International Equity $ 359,216
Small Company Growth 483,223
Post-Venture Capital 30,886
Growth & Income 274
</TABLE>
For its administrative services for the Small Company Growth Portfolio and
the Post-Venture Capital Portfolio, PFPC currently receives a fee calculated at
an annual rate of .10% on each Portfolio'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 International Equity
Portfolio, PFPC receives a fee calculated at an annual rate of .12% on the
Portfolio's first $250 million in average daily net assets, .10% on the next
$250 million in average daily net assets, .08% on the next $250 million in
average daily net assets and .05% of the average daily net assets over $750
million. For the Growth & Income Portfolio, PFPC receives a fee calculated at an
annual rate of .15% on the Portfolio's first $500 million in average daily net
assets, .10% on the next $1 billion in average daily net assets and .05% of
average daily net assets over $1.5 billion. For the year or period ended
December 31, 1997, adminstrative service fees earned and waived by PFPC were as
follows:
<TABLE>
<CAPTION>
NET
PORTFOLIO CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
- --------------------------- --------------------- -------- ---------------------
<S> <C> <C> <C>
International Equity $ 409,216 0 $ 409,216
Small Company Growth 471,801 0 471,801
Post-Venture Capital 30,886 $(30,886) 0
Growth & Income 411 (411) 0
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Warburg, serves as each Portfolio's distributor. No compensation is paid by the
Portfolios to CSI for its distribution services.
3. INVESTMENTS IN SECURITIES
For the year or period ended December 31, 1997, purchases and sales of
investment securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- ------------------------------------------------ ------------ ------------
<S> <C> <C>
International Equity $307,479,813 $257,743,108
Small Company Growth 618,824,647 416,717,613
Post-Venture Capital 81,005,932 65,861,260
Growth & Income 1,749,949 110,382
</TABLE>
At December 31, 1997, the net unrealized appreciation from investments for
those securities having an excess of value over cost and net unrealized
42
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
depreciation from investments for those securities having an excess of cost over
value (based on cost for federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
PORTFOLIO APPRECIATION DEPRECIATION APPRECIATION
- ----------------------------------- ------------ ------------ --------------
<S> <C> <C> <C>
International Equity $ 35,748,153 $(34,692,173) $ 1,055,980
Small Company Growth 146,269,339 (19,341,554) 126,927,785
Post-Venture Capital 4,565,827 (1,248,979) 3,316,848
Growth & Income 89,404 (21,425) 67,979
</TABLE>
4. FORWARD FOREIGN CURRENCY CONTRACTS
The Portfolios may enter into forward currency contracts for the purchase or
sale of a specific foreign currency at a fixed price on a future date. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar. The
Portfolios will enter into forward contracts primarily for hedging purposes. The
forward currency contracts are adjusted daily by the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial statement
purposes as unrealized until the contract settlement date.
At December 31, 1997, the International Equity Portfolio had the following
open forward currency contract:
<TABLE>
<CAPTION>
FOREIGN UNREALIZED
FORWARD CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE
CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN/(LOSS)
- ---------------- ---------- --------------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Japanese Yen 02/27/98 7,281,782,175 $59,530,691 $56,491,804 $3,038,887
</TABLE>
5. RESTRICTED SECURITIES
A summary of the restricted securities held at December 31, 1997 follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION MARKET PERCENTAGE
PORTFOLIO DESCRIPTION DATE COST VALUE OF NET ASSETS
- ------------------ -------------------- ----------- -------- -------- -------------
<S> <C> <C> <C> <C> <C>
Post-Venture N2K Inc. Series G
Capital Portfolio Pfd. 04/25/97 300,000 311,175 1.02%
</TABLE>
6. EQUITY SWAP TRANSACTIONS
The International Equity Portfolio entered into a Korean equity swap
agreement dated March 21, 1997, where the Portfolio receives a quarterly
payment, representing the total return (defined as market appreciation and
dividend income) on a basket of Korean common stocks ('Common Stocks'). In
return, the Portfolio pays quarterly the LIBOR rate (London Interbank Offered
Rate), plus 2.00% per annum on the market value of the Common Stocks ('Notional
Amount'). The Notional Amount is marked-to-market on each quarterly reset date.
In the event that the Common Stocks decline in value, the Portfolio will be
required to pay quarterly, the amount of any depreciation in value from the
Notional Amount.
43
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
6. EQUITY SWAP TRANSACTIONS (CONT'D)
During the term of the equity swap transaction, changes in the value of the
Common Stocks as compared to the Notional Amount and the difference between the
accrued interest expense and dividend income are recognized as unrealized gain
or loss. At the quarterly reset date, the change in value of the Common Stock
adjusted for accrued interest expense and dividend income, is recognized as
realized gain or loss. At December 31, 1997, the Portfolio realized a loss of
$1,822,636 on the equity swap transaction which is included in the net realized
gain (loss) from security and other related transactions. As of December 31,
1997, the Portfolio no longer held a postion in the swap.
7. CAPITAL SHARE TRANSACTIONS
The International Equity Portfolio, the Small Company Growth Portfolio, the
Post-Venture Capital Portfolio, and the Growth & Income Portfolio are each
authorized to issue an unlimited number of full and fractional shares of
beneficial interest, par value of $.001 per share.
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY GROWTH POST-VENTURE CAPITAL GROWTH & INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------- -------------------------- --------------------------- ---------------
SEPTEMBER 30,
1996
(COMMENCEMENT
OF
OPERATIONS) FOR THE TWO
FOR THE YEAR ENDED DECEMBER 31, THROUGH MONTHS ENDED
-------------------------------------------------------------------- DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997
------------ ------------ ------------ ------------ ------------ ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold 13,953,274 29,490,915 31,306,018 31,233,075 6,512,613 1,270,999 191,971
Shares issued to
shareholders on
reinvestment of
dividends 2,160,568 531,478 0 0 421 0 1,011
Shares redeemed (8,988,051 ) (10,101,449 ) (14,702,808 ) (15,202,857 ) (5,025,372) (228) 0
------------ ------------ ------------ ------------ ------------ ------ -----
Net increase in
shares
outstanding 7,125,791 19,920,944 16,603,210 16,030,218 1,487,662 1,270,771 192,982
------------ ------------ ------------ ------------ ------------ ------ -----
------------ ------------ ------------ ------------ ------------ ------ -----
</TABLE>
8. LIABILITIES
At December 31, 1997, the Portfolios had the following affiliated and
investment related liabilities:
<TABLE>
<CAPTION>
INTERNATIONAL SMALL COMPANY POST-VENTURE
EQUITY GROWTH CAPITAL GROWTH & INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Payable for securities purchased (at
value) $ 2,803,867 $10,175,175 $ 0 $ 105,951
Administration services fee payable 29,439 52,975 3,048 149
Investment advisory fee payable 294,509 476,847 37,944 0
Payable for fund shares redeemed 1,200,138 1,710,480 201,618 0
</TABLE>
44
<PAGE>
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
December 31, 1997
- --------------------------------------------------------------------------------
9. NET ASSETS
At December 31, 1997, capital contributions, undistributed net investment
income, accumulated net realized gain/(loss) from security transactions and
current period distributions have been adjusted for current period permanent
book/tax differences which arose principally from differing book/tax treatments
of foreign currency and equity swap transactions. The International Equity
Portfolio reclassified $689,884 from accumulated net realized loss from security
transactions to undistributed net investment income. The Small Company Growth
Portfolio and the Post-Venture Capital Portfolio reclassified $2,695,081 and
$230,241, respectively, from accumulated net investment loss to capital
contributions. Net investment income, net realized gain/(loss) on investments
and net assets were not affected by this reclassification.
Net assets at December 31, 1997, consisted of the following:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY GROWTH POST-VENTURE CAPITAL GROWTH & INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------- -------------------- -------------------- ---------------
<S> <C> <C> <C> <C>
Capital contributed, net $371,598,559 $556,632,983 $ 27,322,317 $ 1,933,231
Distribution in excess of
net realized loss (21,970,160) 0 0 0
Accumulated net realized
loss from security
transactions (7,351,503) (17,293,215) (227,100) (8,068)
Net unrealized
appreciation from
investments and foreign
currency related items 4,952,086 127,053,889 3,424,972 67,978
----------- ----------- ---------- ---------------
Net assets $347,228,982 $666,393,657 $ 30,520,189 $ 1,993,141
----------- ----------- ---------- ---------------
----------- ----------- ---------- ---------------
</TABLE>
10. CAPITAL LOSS CARRYOVER
At December 31, 1997, capital loss carryovers available to offset possible
future capital gains of each Portfolio were as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYOVER
EXPIRING IN
--------------------------- TOTAL CAPITAL
PORTFOLIO 2004 2005 LOSS CARRYOVER
- -------------------------------------------- ----------- ----------- --------------
<S> <C> <C> <C>
Small Company Growth $17,167,113 $ 0 $ 17,167,113
Post-Venture Capital 47,891 71,085 118,976
Growth & Income 0 8,068 8,068
</TABLE>
45
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
WARBURG PINCUS TRUST:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Warburg Pincus Trust -- Growth & Income
Portfolio, and the statements of net assets of Warburg Pincus Trust --
International Equity Portfolio, Small Company Growth Portfolio and Post-Venture
Capital Portfolio (all portfolios collectively referred to as the 'Warburg
Pincus Trust'), as of December 31, 1997, and the related statements of
operations for the year (or period) then ended, the related statements of
changes in net assets for each of the two years (or periods) in the period then
ended, and the financial highlights for each of the years (or periods)
presented. These financial statements and financial highlights are the
responsibility of the Warburg Pincus Trust's 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
December 31, 1997, by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
portfolio of the Warburg Pincus Trust as of December 31, 1997, the results of
their operations for the year (or period) then ended, the changes in their net
assets for each of the two years (or periods) in the period then ended, and
their financial highlights for each of the years (or periods) presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 9, 1998
46
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[Logo]
P.O. Box 9030, Boston, MA 02205-9030
800-369-2728
COUNSELLORS SECURITIES INC., DISTRIBUTOR. TREQF-2-1297
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as.............. 'D'
The division sign shall be expressed as.............. [div]
