SEMIANNUAL
REPORT
JUNE 30, 1999
WARBURG PINCUS TRUST
(BOX) INTERNATIONAL EQUITY PORTFOLIO
(BOX) SMALL COMPANY GROWTH PORTFOLIO
(BOX) POST-VENTURE CAPITAL PORTFOLIO
(BOX) GROWTH & INCOME PORTFOLIO
(BOX) EMERGING MARKETS PORTFOLIO
Warburg Pincus Trust Shares are not available directly to individual investors,
but may be offered only through certain insurance products and pension and
retirement plans.
More complete information about the Trust, including charges and expenses, is
provided in the PROSPECTUS, which must precede or accompany this document and
which should be read carefully before investing. You may obtain additional
copies by calling 800-222-8977 or by writing to Warburg Pincus, P.O. Box 9030,
Boston, MA 02205-9030.
Warburg Pincus is a division of Credit Suisse Asset Management, LLC.
[GRAPHIC OMITTED]
<PAGE>
FROM TIME TO TIME, THE PORTFOLIOS' INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY
WAIVE SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD
BE LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE.
RETURNS ARE HISTORICAL AND INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS.
RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS
THAN ORIGINAL COST.
THE VIEWS OF THE PORTFOLIOS' MANAGEMENT ARE AS OF THE DATE OF THE LETTERS, AND
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF JUNE 30, 1999; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999
- --------------------------------------------------------------------------------
August 12, 1999
Dear Shareholder:
For the six months ended June 30, 1999, Warburg Pincus Trust --International
Equity Portfolio had a gain of 6.92%, vs. a gain of 7.94% for its benchmark, the
Morgan Stanley Capital International All Country World excluding the U.S.
Index.* The portfolio's one-year return through June 30, 1999 was -0.55%. Its
since-inception (on June 30, 1995) average annual total return through June 30,
1999 was 6.75%.
Foreign stock markets had geographically mixed results for the period.
Asian-Pacific markets were the clear standouts, fueled by growing confidence
that the worst of the region's economic difficulties were finally behind it.
European markets generally fell, weighed down by tepid economic growth across
much of the region, and fared even less well in U.S. dollar terms, as the euro
and other regional currencies lost value against the dollar. Latin American
markets saw strong gains, as did most of the rest of the emerging-market
universe.
Set against this backdrop, the portfolio had a healthy gain for the period,
performing roughly in line with its benchmark. In terms of attribution, the
biggest contributors to the portfolio's return were its Asian-Pacific stocks,
led by its Japanese and South Korean issues. The portfolio also benefited from
individually strong showings from a number of its European holdings,
particularly among its cyclical, or economically sensitive, stocks and its
telecommunications shares. The single-largest drag on the portfolio, in absolute
terms, was the weakness in the euro and other European currencies. The
portfolio's European-currency exposure was unhedged through the period, and the
currency-translation loss took a toll.
There were a number of changes in the portfolio over the course of the
period. Most noteworthy was an increase in its Asian-Pacific exposure (from
roughly 16% on December 31, 1998 to approximately 35% on June 30, 1999),
reflecting our increasingly positive views on the region's economic prospects
and our identification of some very attractively valued stocks, particularly in
Japan, Singapore and South Korea, our major areas of emphasis. We scaled back
proportionately the portfolio's European weighting, based on profit-taking on
specific securities and a general sense that the region's near- to
intermediate-term prospects were somewhat less compelling than those of its
Asian-Pacific neighbors.
Another noteworthy change in the portfolio was in the general composition of
its European exposure. Heading into the period, the portfolio had a fairly
significant stake in "defensive," growth-oriented stocks (e.g.,
1
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
utilities and pharmaceutical companies). As the period progressed, we moved
increasingly toward more-economically-sensitive issues (e.g., steel companies),
based on the view that economic growth in Europe and globally was destined to
pick up in the second half of the year and into the year 2000, with favorable
implications for these companies' earnings prospects. Buttressing the argument
for these stocks, in our view, was their valuations, which we deemed, in many
cases, extremely attractive.
Our outlook on the general prospects for foreign stock markets remains
positive as of this writing. Global economic growth is, indeed, accelerating;
interest rates, as a rule, are relatively low, and in many countries are
falling; and investor sentiment toward equities remains favorable. Supported by
this encouraging backdrop, we will continue our efforts to identify those
companies with the best long-term growth prospects.
Harold E. Sharon P. Nicholas Edwards
Co-Portfolio Manager Co-Portfolio Manager
Harold W. Ehrlich Vincent J. McBride
Co-Portfolio Manager Co-Portfolio Manager
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS.
- ------------------
* The Morgan Stanley Capital International All Country World Excluding the U.S.
Index is a market-capitalization-weighted index of companies listed on stock
exchanges outside the U.S. It is an unmanaged index (with no defined
investment objective) and includes reinvestment of dividends.
2
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999
- --------------------------------------------------------------------------------
August 12, 1999
Dear Shareholder:
For the six months ended June 30, 1999, Warburg Pincus Trust -- Small Company
Growth Portfolio had a gain of 6.75%, vs. a gain of 12.82% for the Russell 2000
Growth Index.* The portfolio's one-year total return through June 30, 1999 was
- -1.04%. Its since-inception (on June 30, 1995) average annual total return
through June 30, 1999 was 14.32%. Note: Effective March 31, 1999, Sammy Oh joins
Elizabeth B. Dater and Stephen J. Lurito as Co-Portfolio Manager of the
portfolio.
MANAGER COMMENTARY
The period was a positive one for small-capitalization stocks, which had
solid performance in absolute terms and a respectable return compared to that
generated by large caps. Small caps initially struggled, but rallied strongly
over the April-through-June span, buoyed by investors' increased appetite for
risk in general (reflecting encouraging news from Japan and emerging markets)
and by an improving earnings outlook for small companies.
Against this backdrop, the portfolio had a positive return, though it lagged
its benchmark for the six months. Hampering the portfolio was its underweighting
in larger-cap Internet stocks, a number of which had strong performance. The
portfolio was also hindered by weakness in certain areas, most notably the
health-care area, which was restrained by some regulatory uncertainties. On the
positive side, stocks that aided the portfolio's return included its
electronics, consumer and telecommunications holdings.
We made no material changes to the portfolio during the period in terms of
overall strategies. We remained focused on companies well-positioned to benefit
from certain longer-term trends, foremost a global push for increased
productivity, the rapid expansion of the Internet and a maturing, increasingly
wealthy population. We continued to find a number of such companies within the
technology, communications, services and consumer areas, which remained
well-represented in the portfolio.
Looking out to the rest of the year and into 2000, we remain positive on the
prospects for small-cap stocks. Despite the group's recent rally, small-cap
stocks continue to offer historically compelling valuations compared to those on
large-cap stocks. And the group's earnings outlook should remain, at minimum,
healthy, barring a significant economic slowdown (we view the Federal Reserve's
interest-rate increase on June 30 as a vote of confidence in the U.S. economy).
Another factor that could support small caps is a possible
3
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
reduction in capital-gains taxes. Congress is currently weighing such a
reduction, which, all else being equal, would raise the appeal of stocks
offering potentially significant long-term appreciation. All told, small caps
stand to receive continued investor attention, though we believe that careful
stock selection will remain critical. In this context, our efforts will remain
devoted to identifying those stocks we deem to have the brightest long-term
prospects.
Elizabeth B. Dater Stephen J. Lurito Sammy Oh
Co-Portfolio Manager Co-Portfolio Manager Co-Portfolio Manager
INVESTING IN SMALL COMPANIES ENTAILS SPECIAL RISK CONSIDERATIONS. THESE ARE
DETAILED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING.
- ------------------
* 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.
4
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999
- --------------------------------------------------------------------------------
August 12, 1999
Dear Shareholder:
For the six months ended June 30, 1999, Warburg Pincus Trust -- Post-Venture
Capital Portfolio had a gain of 12.35%, vs. gains of 12.82% for the Russell 2000
Growth Index,* 15.57% for the Russell 2500 Growth Index** and 25.06% for the
NASDAQ Industrial Index.*** The portfolio's one-year total return through June
30, 1999 was 6.07%. Its since-inception (on September 30, 1996) average annual
total return through June 30, 1999 was 10.87%. Note: Effective March 31, 1999,
Stephen J. Lurito and Christopher M. Nawn no longer serve as Co-Portfolio
Manager and Associate Co-Portfolio Manager, respectively. Robert S. Janis,
formerly Associate Portfolio Manager, joins Elizabeth B. Dater as Co-Portfolio
Manager.
MANAGER COMMENTARY
The period was a positive one for the smaller-cap and aggressive-growth
stocks targeted by the portfolio, buoyed by growing optimism regarding global
financial markets and a related increase in investors' risk tolerance. The
portfolio benefited from this relatively favorable backdrop and from good
performance from its technology, communications and media holdings in
particular. Factors that hampered the portfolio included its avoidance of
specific larger-cap technology stocks that had good performance, yet which in
our view remained expensive based on their longer-term growth prospects.
We made no noteworthy changes to the portfolio during the period in terms of
broad strategies, remaining focused on well-financed, well-managed companies
offering breakthrough products and services. That said, we made several notable
sector-weighting adjustments, foremost an increase in our exposure to the
communications & media and telecommunications & equipment sectors. This
reflected our continued expansion of our already-significant Internet theme. The
ongoing Internet-driven communications revolution has profound implications for
businesses and governments, and stands to benefit numerous companies across a
range of industries over time.
Other notable sector weightings continued to include financial services,
where we maintained a mix of asset-management and insurance companies;
computers, where we remained biased toward domestically oriented software
companies; and business services. Our holdings within the last sector included
companies specializing in electronic-commerce distribution and fulfillment
services, a number of which in our view have significant potential for long-term
growth.
5
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
Going forward, we remain positive on the collective prospects for stocks of
post-venture-capital companies. (We define a post-venture-capital company as one
that has received venture-capital financing either during the early stages of
the company's existence or the development of a new product or service, or as
part of a restructuring or recapitalization. The investment of venture-capital
financing, distribution of securities to venture-capital investors or initial
public offering, whichever is later, will have been made within 10 years of the
portfolio's investment.) We note a recent study**** that concluded such
companies tend to be concentrated in high-growth industries (e.g., software,
biotechnology, semiconductors & electronics, and communications), and that they
generate breakthrough technologies and products. The study also stated that
these companies enjoy rapid growth of earnings relative to companies that lacked
such backing.
As ever, we will continue to devote our efforts to identifying those
companies with the best long-term prospects.
Elizabeth B. Dater Robert S. Janis
Co-Portfolio Manager Co-Portfolio Manager
BECAUSE OF THE NATURE OF THE PORTFOLIO'S HOLDINGS AND CERTAIN STRATEGIES IT
MAY USE, AN INVESTMENT IN THE PORTFOLIO INVOLVES CERTAIN RISKS AND MAY NOT BE
APPROPRIATE FOR ALL INVESTORS. THE PROSPECTUS CONTAINS MORE COMPLETE INFORMATION
ON THE SPECIAL RISK CONSIDERATIONS ASSOCIATED WITH POST-VENTURE-CAPITAL
INVESTMENTS. IT SHOULD BE READ CAREFULLY BEFORE INVESTING.
- ---------------------
* 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 Russell 2500 Growth Index measures the performance of those companies in
the Russell 2500 Index with higher price-to-book values and higher forecasted
growth rates. The Russell 2500 Index is composed of the 2,500 smallest
companies in the Russell 3000 Index, which measures the performance of the
3,000 largest U.S. companies based on total market capitalization. The Russell
2500 Index represents approximately 22% of the total market capitalization of
the Russell 3000 Index.
*** The NASDAQ Industrial Index measures the stock price performance of more
than 3,000 industrial issues included in the NASDAQ OTC Composite Index. The
NASDAQ OTC Composite Index represents 4,500 stocks traded over the counter.
****EIGHTH ANNUAL ECONOMIC IMPACT OF VENTURE CAPITAL STUDY, National Venture
Capital Association/Coopers & Lybrand L.L.P. (U.S.A.), 1998.
6
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999
- --------------------------------------------------------------------------------
August 12, 1999
Dear Shareholder:
For the six months ended June 30, 1999, Warburg Pincus Trust -- Growth &
Income Portfolio had a gain of 15.24%, vs. a gain of 12.38% for the S&P 500
Index.* The portfolio's one-year return through June 30, 1999 was 14.98%. Its
since-inception (on October 31, 1997) average annual total return through June
30, 1999 was 19.34%.
The period was a positive one for the U.S. stock market. Buoyed by a
surprisingly healthy U.S. economy and optimism over long-suffering emerging
markets, most major domestic stock indexes rallied to finish the six months
standing at or near all-time highs. The improving global economic picture
spurred a rally in previously struggling economically sensitive stocks, which
outpaced growth-oriented stocks for the six months. This was in marked contrast
to 1998 and 1997, when a handful of large-cap growth stocks powered the market's
rise. The market's recent "broadening" may or may not imply a longer-term trend,
but we view it as a welcome development and a sign that investors are focusing
more intensely on valuations.
The portfolio had a solid gain for the period, both in absolute terms and
relative to that of its benchmark. Top performers for the portfolio included its
energy, retail, capital-equipment and industrial holdings. Also contributing
positively to the portfolio's return were its technology holdings, supported by
rising demand for personal computers.
We made no noteworthy changes to the portfolio during the period in terms of
broad strategies. We continued to emphasize companies with good cash flows and
improving longer-term earnings potential, due, for example, to a restructuring
or to the launch of new products or services. In terms of sector strategies, we
remained well-diversified, seeing little incentive to aggressively overweight
any particular areas. That said, we significantly increased our weighting in the
financial area, with a particular focus on bank stocks. We took advantage of
weakness in the area (largely caused by concerns, late last year, that slowing
economic growth would have a negative impact on credit quality) to add a number
of bank stocks we deemed to be attractively priced. Our purchases included
Comerica, a Detroit-based bank whose loan portfolio consists primarily of
commercial and industrial loans.
We also increased our weighting in the energy area. Our focus here remained
on companies that stand to benefit from productivity enhancements, as opposed to
benefiting solely from rising energy prices (though our outlook on the
longer-term supply/demand backdrop for
7
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
energy is favorable). These included BP-Amoco and Total, as well as Royal
Dutch Petroleum, a position we significantly added to during the period.
Elsewhere, we maintained an overweighting in the capital-equipment sector,
where we believe a number of companies have good longer-term earnings prospects.
Representative holdings included Case, a manufacturer of agricultural equipment;
and Ingersoll-Rand, a maker of range of industrial products. We also maintained
significant exposure to retail companies, including general retailers (e.g.,
Federated Department Stores) as well as selected specialty retailers (e.g., TJX
Companies). We believe specific retail companies stand to benefit from a healthy
domestic economy and continued improvements in inventory control.
Other noteworthy areas of emphasis for the portfolio included technology,
where we remained biased toward computer companies with relatively sound balance
sheets. We generally avoided electronics stocks, though we added chip-maker
Intel during the period. We established the position in May, when the stock had
declined to a level we deemed attractive, given the company's increasingly
efficient use of capital.
Sector weightings we lowered during the period included food, beverages &
tobacco, reflecting our valuation-based decision to eliminate certain positions.
Another area we de-emphasized somewhat was the telecommunications & equipment
sector, also based on relative-valuation considerations.
Looking ahead, we believe that there will remain attractive investment
opportunities, the market's generally elevated valuations notwithstanding. As
ever, we will continue to strive to identify stocks that we deem to be
fundamentally undervalued, based on factors such as price-to-book and
debt-to-equity ratios.
Brian S. Posner
Portfolio Manager
- --------------
* The S&P 500 Index is an unmanaged index (with no defined investment objective)
of common stocks, includes reinvestment of dividends, and is a registered
trademark of McGraw-Hill Co., Inc.
8
<PAGE>
WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999
- --------------------------------------------------------------------------------
August 12, 1999
Dear Shareholder:
For the six months ended June 30, 1999, Warburg Pincus Trust -- Emerging
Markets Portfolio had a gain of 33.94%, vs. a gain of 39.87% for the Morgan
Stanley Capital International Emerging Markets Free Index.* The portfolio's
one-year return through June 30, 1999 was 16.23%. Its since-inception (on
December 31, 1997) average annual total return through June 30, 1999 was 7.06%.
The reporting period saw strong gains in emerging markets. Driving the group
were tangible signs of improvement in a number of previously troubled economies,
most notably those in the Asian-Pacific region, and a general easing of the risk
concerns that had plagued the group following the global financial-market crisis
of last summer. By region, the best showing belonged to Asia, whose markets saw
explosive gains. Results for Latin American, Eastern European, Middle Eastern
and African markets were less spectacular but still impressive, with
double-digit gains more the rule than the exception.
Against this backdrop, the portfolio generated a robust return for the six
months but fell short of its benchmark. Much of that underperformance can be
traced to the portfolio's positioning in Latin America in the first half of the
period. The portfolio entered the period with a fairly significant
underweighting in the region. We trimmed that stake substantially further
following Brazil's devaluation of its currency, the REAL, in mid-January,
however, on concerns about the devaluation's effects on regional economic growth
and, on a company level, earnings prospects. While that decision was sound on
fundamental grounds, it proved costly in terms of the portfolio's relative
performance, as the region's stock markets staged a strong recovery in February
and March, with investors discounting most if not all of the bad news and
instead focusing on the prospects for a recovery. Though the portfolio
subsequently (i.e., from April through June) regained much of the ground lost
vs. its benchmark, it failed to close the gap completely.
There were several noteworthy changes in the portfolio during the period in
terms of regional emphasis. Most significant was an increase in its
Asian-Pacific exposure, reflecting our increasingly positive views on the
region's economic prospects and our identification of a number of what we deemed
very attractively valued stocks, especially in specific markets (namely South
Korea and Taiwan). Also noteworthy was a reduction in the portfolio's
European/Eastern European exposure, reflecting profit-taking on specific
securities and our belief that better opportunities existed elsewhere.
9
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WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- JUNE 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
Looking ahead, we remain positive on the prospects for emerging markets.
Economic conditions for the vast majority of these countries are improving;
investor sentiment is positive; and stock valuations remain, in general, very
reasonable, the markets' recent rally notwithstanding. Given these factors, we
remain optimistic, and will continue our efforts to identify those markets and
individual companies with the best growth potential.
We would remind investors, though, that this remains a relatively risky asset
class, as the markets' volatility over the past 18 months has made abundantly
clear. Investors would do well to continue to approach these markets with a
longer-term (i.e., three- to five-year) investment horizon and a realistic view
of the risk-reward tradeoff.
Harold E. Sharon Vincent J. McBride
Co-Portfolio Manager Co-Portfolio Manager
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR
EMERGING-MARKET INVESTMENTS.
- ----------------
* The Morgan Stanley Capital International Emerging Markets Free Index is a
market-capitalization-weighted index of emerging-market countries determined
by Morgan Stanley Capital International. The index includes only those
countries open to non-local investors.
10
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCKS (85.4%)
AUSTRALIA (0.5%)
Australia & New Zealand Banking Group, Ltd. 278,000 $ 2,044,209
-----------
CANADA (1.4%)
Research in Motion, Ltd. + 120,200 2,399,858
Rogers Communications, Inc. Class B + 182,200 2,911,408
-----------
5,311,266
-----------
DENMARK (1.6%)
International Service System AS Class B 115,400 6,177,747
-----------
FRANCE (11.6%)
Alstom SA + 126,600 3,982,035
Compagnie Financiere de Paribas 44,700 5,010,818
Elf Aquitaine SA 64,800 9,509,364
Lagardere Groupe SCA 104,850 3,903,437
Pechiney SA Class A 52,200 2,243,726
PSA Peugeot Citroen 20,600 3,250,351
Publicis SA 5,100 1,078,191
Rhone-Poulenc, Ltd. Class A 103,363 4,723,223
Societe Generale d' Enterprises SA 109,300 5,297,727
Suez Lyonnaise des Eaux SA 20,300 3,661,486
Usinor Sacilor 165,500 2,466,252
-----------
45,126,610
-----------
GERMANY (4.5%)
BHF Bank AG 74,400 2,531,969
Fresenius Medical Care AG 57,700 3,367,936
Hannover Rueckversicherungs AG 32,500 2,594,155
Mannesmann AG 34,000 5,084,151
Siemens AG 51,400 3,964,937
-----------
17,543,148
-----------
GREECE (0.8%)
Hellenic Telecommunication Organization SA ADR 271,800 3,006,788
-----------
HONG KONG (1.6%)
SmarTone Telecommunications Holdings, Ltd. 1,263,000 4,492,918
Wing Hang Bank, Ltd. 601,500 1,934,293
-----------
6,427,211
-----------
HUNGARY (0.8%)
Magyar Tavkozlesi 292,000 1,580,288
OTP Bank 36,500 1,522,642
-----------
3,102,930
-----------
IRELAND (1.0%)
Bank of Ireland 234,900 3,948,591
-----------
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCKS (CONT'D)
ISRAEL (1.5%)
ECI Telecommunications Limited Designs 102,350 $ 3,396,741
Orbotech, Ltd. + 47,900 2,496,788
-----------
5,893,529
-----------
ITALY (1.8%)
Banca Nazionale del Lavoro + 570,300 1,793,803
Seat Pagine Gialle SpA 3,070,300 2,612,199
Tecnost SpA 481,680 1,187,211
Unione Immobiliare SpA 3,029,100 1,343,240
-----------
6,936,453
----------
JAPAN (23.5%)
Advantest Corp. 95,600 10,504,960
Fujitsu, Ltd. 346,000 6,960,812
Hitachi, Ltd. 694,000 6,507,890
Hoya Corp. 92,000 5,191,506
Matsushita Communication Industrial Co., Ltd. 81,000 5,788,766
NTT Mobile Communications Network, Inc. 725 9,823,511
Orix Corp. 89,200 7,959,274
Shimamura Co. 36,600 3,099,487
Shohkoh Fund & Co., Ltd. 13,900 9,968,261
Softbank Corp. 29,300 5,933,293
Sony Corp. 55,900 6,027,083
Sumitomo Bank, Ltd. 230,000 2,852,288
Sumitomo Rubber Industries, Ltd. 288,000 2,036,813
Tokyo Seimitsu Co., Ltd. 48,900 3,114,929
Toshiba Corp. 830,000 5,917,984
-----------
91,686,857
-----------
NETHERLANDS (6.0%)
Getronics NV 91,600 3,523,513
Hagemeyer NV 50,600 1,654,175
IHC Caland NV 72,290 2,832,914
Koninklijke Hoogovens NV 67,384 3,516,243
Libertel NV + 209,300 4,101,044
Vedior NV 204,228 3,475,128
Vendex Non-Foods NV 155,280 4,147,504
-----------
23,250,521
-----------
PORTUGAL (1.3%)
Banco Pinto & Sotto Mayor SA 44,000 781,371
Portugal Telecom SA 102,300 4,161,925
-----------
4,943,296
-----------
SINGAPORE (2.4%)
DBS Land, Ltd. 1,506,000 3,007,630
Overseas Union Bank, Ltd. 1,317,000 6,343,372
-----------
9,351,002
-----------
See Accompanying Notes to Financial Statements.
12
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WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCKS (CONT'D)
SOUTH KOREA (3.1%)
Daewoo Securities Co. 69,400 $ 1,349,071
Hyundai Industrial & Development Construction 70,837 991,443
Korea Electric Power Corp. 62,500 2,597,274
Korea Telecom Corp. ADR + 114,600 4,584,000
Samsung Corp. 88,000 2,067,970
Samsung Electronics Co., Ltd. 3,543 388,748
-----------
11,978,506
-----------
SPAIN (1.8%)
Banco Santander Central Hispano SA 491,000 5,114,161
Repsol SA 88,600 1,809,133
-----------
6,923,294
-----------
SWEDEN (3.4%)
Biora AB ADR + 41,275 353,417
Electrolux AB Series B 141,439 2,961,293
Kinnevik AB Class B 61,700 1,161,174
SKF AB Class B 202,500 3,739,529
Volvo AB ADR 173,600 5,099,500
-----------
13,314,913
-----------
SWITZERLAND (1.7%)
Roche Holding AG 217 2,230,595
UBS AG + 14,700 4,387,523
-----------
6,618,118
-----------
TAIWAN (1.8%)
Phoenixtec Power Co., Ltd. 1,120,000 2,236,602
Taiwan Semiconductor Manufacturing Co. + 1,277,970 4,886,509
-----------
7,123,111
-----------
TURKEY (0.3%)
Yapi ve Kredi Bankasi AS 44,000,000 636,009
Yapi ve Kredi Bankasi AS Non-Tradeable Receipts 35,200,000 508,807
-----------
1,144,816
-----------
UNITED KINGDOM (13.0%)
Bass PLC 224,500 3,257,439
British Aerospace PLC 728,300 4,726,939
British Airport Authority PLC 306,736 2,949,380
British Energy PLC 316,000 2,689,781
British Steel PLC 1,342,200 3,475,031
British Telecommunications PLC 224,500 3,761,714
Lloyds TSB Group PLC 302,194 4,096,570
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCKS (CONT'D)
UNITED KINGDOM (cont'd)
MEPC PLC 226,000 $ 1,843,550
Orange PLC + 295,700 4,334,813
Prudential Corp. PLC 408,200 6,009,744
Reed International PLC 646,100 4,310,551
Somerfield PLC 628,000 2,944,983
Williams PLC 432,948 2,859,472
Zeneca Group PLC 87,500 3,384,689
------------
50,644,656
------------
TOTAL COMMON STOCKS (Cost $283,783,900) $332,497,572
------------
PREFERRED STOCK (0.5%)
GERMANY (0.2%)
KSB AG 6,290 862,728
------------
THAILAND (0.3%)
Siam Commercial Bank Public Co., Ltd. 770,000 1,096,304
------------
TOTAL PREFERRED STOCK (Cost $1,972,440) 1,959,032
------------
RIGHTS/WARRANTS (0.1%)
PORTUGAL (0.0%)
Portugal Telecom SA Rts., 07/02/99 + 102,300 1,055
------------
THAILAND (0.1%)
Siam Commercial Bank Public Co., Ltd. Wts. 05/10/02 + 770,000 495,947
------------
TOTAL RIGHTS/WARRANTS (Cost $0) 497,002
------------
See Accompanying Notes to Financial Statements.
14
<PAGE>
WARBURG PINCUS TRUST -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
(000) VALUE
-------- -------
CORPORATE BONDS (0.6%)
ITALY (0.6%)
Tecnost SpA (Callable 06/23/02) (A3, BBB+)
4.487% 6/23/04 (cost $2,456,895) $ 2,328 $ 2,442,932
------------
NUMBER
OF
SHARES
-------
SHORT TERM INVESTMENTS (10.4%)
Institutional Money Market Trust 22,851,958 22,851,958
RBB Money Market Fund 17,698,633 17,698,633
------------
TOTAL SHORT TERM INVESTMENTS (cost $40,550,591) 40,550,591
------------
TOTAL INVESTMENTS AT VALUE (97.0%) (Cost $328,763,826*) 377,947,129
OTHER ASSETS IN EXCESS OF LIABILITIES (3.0%) 11,867,570
------------
NET ASSETS (100.0%) (applicable to 33,177,175 shares outstanding) $389,814,699
============
NET ASSET VALUE, offering and redemption
price per share ($389,814,699 / 33,177,175) $11.75
======
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $328,791,838.
See Accompanying Notes to Financial Statements.
15
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS --JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (94.8%)
AEROSPACE & DEFENSE (1.1%)
Common Places LLC + 277,778 $ 1,000,001
TriStar Aerospace Co. + 904,700 7,463,775
-----------
8,463,776
-----------
BANKS & SAVINGS & LOANS (1.3%)
Commonwealth Bancorp, Inc. 286,800 5,144,475
Texas Regional Bancshares, Inc. Class A 172,100 4,678,969
-----------
9,823,444
-----------
BUSINESS SERVICES (10.2%)
Acxiom Corp. + 388,700 9,693,206
BISYS Group, Inc. + 167,300 9,787,050
Coinstar, Inc. + 252,325 7,238,573
Getty Images, Inc. + 463,800 8,754,225
INSpire Insurance Solutions, Inc.+ 498,700 7,231,150
Lason, Inc. + 121,800 6,044,325
NOVA Corp.+ 197,483 4,937,075
On Assignment, Inc. + 215,400 5,627,325
QRS Corp. + 202,900 15,826,200
-----------
75,139,129
-----------
CAPITAL EQUIPMENT (0.7%)
Applied Power, Inc. 198,100 5,410,606
-----------
COMMUNICATIONS & MEDIA (11.3%)
Abovenet Communications, Inc. + 140,000 5,652,500
Central European Media Enterprises, Ltd. Class A + 244,700 1,590,550
Go2Net, Inc. + 58,200 5,347,125
Granite Broadcasting Corp. + 321,600 2,512,500
Hispanic Broadcasting Corp. + 256,200 19,439,175
Infoseek Corp. + 95,500 4,578,031
InfoSpace.com, Inc. + 193,400 9,089,800
Metro Networks, Inc. + 249,400 13,311,725
Outdoor Systems, Inc. + 242,662 8,857,181
Penton Media, Inc. 350,000 8,487,500
Xoom.com, Inc. + 79,208 4,158,420
-----------
83,024,507
-----------
COMPUTERS (12.4%)
Adaptec, Inc. + 200,900 7,094,281
Business Objects SA ADR + 294,000 10,731,000
Citrix Systems, Inc. + 309,800 17,503,700
Legato Systems, Inc. + 142,100 8,206,275
Mercury Interactive Corp. + 208,600 7,379,225
MindSpring Enterprises, Inc. + 91,800 4,067,887
National Instruments Corp. + 182,950 7,386,606
Peregrine Systems, Inc. + 172,200 4,423,387
See Accompanying Notes to Financial Statements.
16
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
COMPUTERS (cont'd)
Radiant Systems, Inc. + 500,800 $ 7,136,400
Remedy Corp. + 334,100 8,978,937
Transaction Systems Architects, Inc. Class A + 209,900 8,186,100
-----------
91,093,798
-----------
CONSUMER NON-DURABLES (0.7%)
Central Garden & Pet Co. + 476,800 4,887,200
-----------
CONSUMER SERVICES (2.8%)
DeVry, Inc. + 509,700 11,404,537
Strayer Education, Inc. 291,300 8,939,269
-----------
20,343,806
-----------
ELECTRONICS (10.5%)
Avant! Corp. + 493,000 6,224,125
Burr-Brown Corp. + 277,100 10,148,787
C-Cube Microsystems, Inc. + 226,900 7,189,894
Electronics for Imaging, Inc. + 221,500 11,379,562
Etec Systems, Inc. + 171,900 5,715,675
Galileo Technology Corp. + 139,800 6,334,688
Novellus Systems, Inc. + 186,500 12,728,625
Pairgain Technologies, Inc. + 391,300 4,499,950
Photronics, Inc. + 270,600 6,629,700
QLogic Corp. + 47,400 6,256,800
-----------
77,107,806
-----------
ENERGY (1.3%)
Stone Energy Corp. + 226,500 9,597,937
-----------
ENVIRONMENTAL SERVICES (1.3%)
Casella Waste Systems, Inc. + 364,700 9,482,200
-----------
FINANCIAL SERVICES (1.3%)
Enhance Financial Services Group, Inc. 221,400 4,372,650
Telebanc Financial Corp. + 144,000 5,580,000
-----------
9,952,650
-----------
HEALTHCARE (8.9%)
Advance Paradigm, Inc. + 225,300 13,743,300
Core, Inc. + 748,800 6,084,000
MiniMed, Inc. + 226,000 17,387,875
Oxford Health Plans, Inc. + 340,600 5,300,587
Renal Care Group, Inc. 336,550 8,708,231
Schein (Henry) , Inc. + 202,500 6,416,719
Sunrise Assisted Living, Inc. 228,600 7,972,425
-----------
65,613,137
-----------
See Accompanying Notes to Financial Statements.
17
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
LEISURE & ENTERTAINMENT (6.7%)
Coach USA, Inc. + 166,400 $ 6,978,400
Fairfield Communities, Inc. + 771,300 12,437,213
Premier Parks, Inc. 334,100 12,278,175
Sunterra Corp. 557,400 7,768,763
Vistana, Inc. + 612,500 9,646,875
-----------
49,109,426
-----------
METALS & MINING (0.6%)
Metals USA, Inc. + 331,600 4,227,900
-----------
OIL SERVICES (4.2%)
BJ Services Co. +. 180,500 5,313,469
Cooper Cameron Corp. + 124,500 4,614,281
Petroleum Geo-Services ADR + 663,400 9,868,075
Smith International, Inc. + 256,300 11,133,031
Southern Mineral Corp. 176,625 60,715
-----------
30,989,571
-----------
PHARMACEUTICALS (4.5%)
Alkermes, Inc. + 465,500 10,764,688
ChiRex, Inc. + 273,500 8,786,188
Sepracor, Inc. + 112,000 9,100,000
Serologicals Corp. + 514,700 4,181,938
-----------
32,832,814
-----------
REAL ESTATE (0.8%)
U.S. Restaurant Properties, Inc. 273,450 5,810,813
-----------
RETAIL (2.1%)
99 Cents Only Stores + 114,850 5,735,322
Ames Department Stores, Inc. + 157,100 7,167,688
ONSALE, Inc. + 151,400 2,867,138
-----------
15,770,148
-----------
See Accompanying Notes to Financial Statements.
18
<PAGE>
WARBURG PINCUS TRUST -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
TELECOMMUNICATIONS & EQUIPMENT (10.1%)
Cabletron Systems, Inc. + 518,100 $ 6,735,300
Concentric Network Corp. + 369,700 14,695,575
Gilat Satellite Networks, Ltd. + 239,000 12,547,500
Harmonic, Inc. + 13,200 758,175
Omnipoint Corp. + 206,400 5,972,700
Powertel, Inc. + 223,800 6,686,025
Scientific-Atlanta, Inc. 209,600 7,545,600
Viatel, Inc. + 234,500 13,161,313
Western Wireless Corp. Class A + 242,000 6,534,000
------------
74,636,188
------------
TRANSPORTATION (2.0%)
Mark VII, Inc. + 347,900 5,783,838
Swift Transportation Co., Inc. + 399,150 8,781,300
------------
14,565,138
------------
TOTAL COMMON STOCK (cost $552,211,591) 697,881,994
------------
SHORT TERM INVESTMENTS (5.3%)
Institutional Money Market Trust 4,136,597 4,136,597
RBB Money Market Fund 34,717,912 34,717,912
------------
TOTAL SHORT TERM INVESTMENTS (Cost $38,854,509) 38,854,509
------------
TOTAL INVESTMENTS AT VALUE (100.1%)
(Cost $591,066,100*) 736,736,503
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.1%) (435,573)
------------
NET ASSETS (100.0%) (applicable to 43,084,371
shares outstanding) $736,300,930
============
NET ASSET VALUE, offering and redemption
price per share ($736,300,930 / 43,084,371) $17.09
======
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $591,225,039.
See Accompanying Notes to Financial Statements.
19
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (91.3%)
AEROSPACE & DEFENSE (1.3%)
Orbital Sciences Corp. + 39,200 $ 926,100
----------
BUSINESS SERVICES (11.2%)
ACNielsen Corp. + 20,500 620,125
BISYS Group, Inc. + 21,600 1,263,600
CB Richard Ellis Services, Inc. + 64,100 1,594,487
Lason, Inc. + 16,200 803,925
On Assignment, Inc. + 15,700 410,162
Pharmaceutical Product Development, Inc. + 19,000 520,125
QRS Corp. + 16,200 1,263,600
Saatchi & Saatchi PLC ADR 52,000 867,750
SunGard Data Systems, Inc. + 27,700 955,650
----------
8,299,424
----------
COMMUNICATIONS & MEDIA (16.9%)
America Online, Inc. + 8,600 950,300
At Home Corp. Series A + 14,000 755,125
Central European Media Enterprises, Ltd. + 58,800 382,200
Chancellor Media Corp. Class A + 14,000 771,750
Hispanic Broadcasting Corp. 27,000 2,048,625
Infoseek Corp. + 7,500 359,531
Outdoor Systems, Inc. + 44,630 1,629,013
Salon.com, Inc. + 61,000 579,500
Shaw Communications, Inc. Class B 40,800 1,621,800
USA Networks, Inc. + 34,300 1,376,287
Yahoo!, Inc. + 11,600 1,998,100
----------
12,472,231
----------
COMPUTERS (10.0%)
BMC Software, Inc. + 14,300 772,200
Citrix Systems, Inc. + 27,700 1,565,050
Concord Communications, Inc. + 14,400 648,000
Intuit, Inc. + 11,100 1,000,387
Micrografx, Inc. + 5,900 35,769
Network Appliance, Inc. + 22,100 1,234,837
Novell, Inc. + 41,100 1,089,150
Verisign, Inc. + 9,600 828,000
Women.com Networks 75,988 250,001
----------
7,423,394
----------
CONSUMER NON-DURABLES (2.6%)
Blyth Industries, Inc. + 36,800 1,265,000
Dial Corp. 18,700 695,406
----------
1,960,406
----------
See Accompanying Notes to Financial Statements.
20
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
CONSUMER SERVICES (1.2%)
DeVry, Inc. + 38,500 $ 861,437
----------
DISTRIBUTION (0.3%)
WESCO International, Inc. + 12,400 254,200
----------
ELECTRONICS (11.9%)
KLA-Tencor Corp. + 10,600 687,675
Maxim Integrated Products, Inc. + 34,600 2,300,900
Solectron Corp. + 11,800 786,912
Uniphase Corp. + 15,800 2,622,800
Vitesse Semiconductor Corp. + 19,400 1,308,287
Xilinx, Inc. + 18,700 1,070,575
----------
8,777,149
----------
ENERGY (0.1%)
Chaparral Resources, Inc. + 2,777 105,556
----------
FINANCIAL SERVICES (4.1%)
3i Group PLC 48,000 545,901
AMBAC Financial Group, Inc. 10,300 588,388
AMVESCAP PLC ADR 9,700 451,050
E*Trade Group, Inc. 21,000 838,688
T. Rowe Price Associates, Inc. 16,300 625,513
----------
3,049,540
----------
FOOD, BEVERAGES & TOBACCO (1.3%)
Ben & Jerry's Homemade, Inc. Class A 35,500 985,125
----------
HEALTHCARE (2.3%)
AmeriSource Health Corp. Class A + 16,600 423,300
Amgen, Inc. + 9,600 584,400
Women First Healthcare, Inc. + 50,100 663,825
----------
1,671,525
----------
LEISURE & ENTERTAINMENT (3.1%)
Coach USA, Inc. + 18,000 754,875
Fairfield Communities, Inc. + 31,700 511,163
Premier Parks, Inc. 28,900 1,062,075
----------
2,328,113
----------
LODGING & RESTAURANTS (0.7%)
Tricon Global Restaurants, Inc. + 9,000 487,125
----------
OIL SERVICES (2.7%)
Cooper Cameron Corp. + 19,000 704,188
Nabors Industries, Inc. + 27,900 681,806
Petroleum Geo - Services ADR + 41,200 612,850
----------
1,998,844
----------
See Accompanying Notes to Financial Statements.
21
<PAGE>
WARBURG PINCUS TRUST -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
PHARMACEUTICALS (2.6%)
Alkermes, Inc. + 27,300 $ 631,313
Medimmune, Inc. 10,800 731,700
SangStat Medical Corp. + 20,000 345,000
Serologicals Corp. + 31,500 255,938
----------
1,963,951
----------
PUBLISHING (3.4%)
Central Newspapers, Inc. Class A 37,200 1,399,650
Scholastic Corp. + 21,800 1,103,625
----------
2,503,275
----------
RETAIL (3.7%)
Amazon.com, Inc. + 5,000 625,625
CDnow, Inc. + 30,800 542,850
Ross Stores, Inc. 12,900 649,838
Staples, Inc. + 29,350 908,016
----------
2,726,329
----------
TELECOMMUNICATIONS & EQUIPMENT (11.9%)
Cisco Systems, Inc. + 32,550 2,099,475
Exodus Communications, Inc. + 12,000 1,439,250
Gilat Satellite Networks, Ltd. + 26,800 1,407,000
MCI WorldCom, Inc. + 20,700 1,785,375
Pinnacle Holdings, Inc. + 51,500 1,261,750
Viatel, Inc. + 14,400 808,200
----------
8,801,050
----------
TOTAL COMMON STOCK (Cost $49,142,273) 67,594,774
----------
PREFFERED STOCK (0.1%)
Women.com Networks Series E + (Cost $52,250) 5,225 52,250
----------
SHORT TERM INVESTMENTS (9.5%)
Institutional Money Market Trust 3,546,509 3,546,509
RBB Money Market Fund 3,459,283 3,459,283
----------
TOTAL SHORT TERM INVESTMENTS (Cost $7,005,792) 7,005,792
----------
TOTAL INVESTMENTS AT VALUE (100.9%)
(Cost $56,200,315*) 74,652,816
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.9%) (653,397)
----------
NET ASSETS (100.0%) (applicable to 5,571,693
shares outstanding) $73,999,419
==========
NET ASSET VALUE, offering and redemption
price per share ($73,999,419 / 5,571,693) $13.28
======
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $56,525,830.
See Accompanying Notes to Financial Statements.
22
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
STATEMENT OF NET ASSETS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (87.9%)
AEROSPACE & DEFENSE (2.3%)
Gulfstream Aerospace Corp. + 2,200 $ 148,637
Litton Industries, Inc. + 2,150 154,262
Raytheon Co. Class A 2,750 189,406
----------
492,305
----------
BANKS & SAVINGS & LOANS (9.0%)
AmSouth Bancorp. + 3,600 83,475
Bank One Corp. 6,100 363,331
Citigroup, Inc. 2,287 108,632
Comerica, Inc. 9,900 588,431
Compass Bancshares, Inc. 3,600 98,100
Golden West Financial Corp. + 1,900 186,200
UnionBanCal Corp. 3,100 111,987
Wachovia Corp. 3,200 273,800
Washington Mutual, Inc. 2,600 91,975
----------
1,905,931
----------
BUILDING & BUILDING MATERIALS (1.3%)
USG Corp. 5,000 280,000
----------
BUSINESS SERVICES (0.6%)
WPP Group PLC 8,800 74,420
WPP Group PLC ADR 700 60,025
----------
134,445
----------
CAPITAL EQUIPMENT (7.9%)
AlliedSignal, Inc. 2,900 182,700
American Standard Co., Inc. + 4,400 211,200
Case Corp. + 2,800 134,750
Emerson Electric Co. 1,750 110,031
Federal-Mogul Corp. 7,100 369,200
Ingersoll-Rand Co. 5,100 329,587
ITT Industries, Inc. 2,800 106,750
Kennametal, Inc. 1,100 34,100
Navistar International Corp. + 3,700 185,000
----------
1,663,318
----------
CHEMICALS (1.6%)
Ferro Corp. 5,750 158,125
Rhone Poulenc SA ADR Series A 4,050 186,806
----------
344,931
----------
COMMUNICATIONS & MEDIA (0.5%)
New York Times Co. Class A 3,100 114,119
----------
COMPUTERS (7.3%)
BMC Software, Inc. + 7,500 405,000
Hewlett-Packard Co. 2,800 281,400
See Accompanying Notes to Financial Statements.
23
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
STATEMENT OF NET ASSETS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
COMPUTERS (cont'd)
International Business Machines Corp. 3,500 $ 452,375
Unisys Corp. 10,200 397,162
----------
1,535,937
----------
CONGLOMERATES (0.8%)
Harsco Corp. 5,500 176,000
----------
CONSUMER DURABLES (2.3%)
Ford Motor Co. 6,400 361,200
Meritor Automotive, Inc. 4,700 119,850
----------
481,050
----------
CONSUMER NON-DURABLES (0.7%)
Premark International, Inc. 3,700 138,750
----------
ELECTRONICS (2.1%)
Intel Corp. 7,500 446,250
----------
ENERGY (7.2%)
Amerada Hess Corp. 3,700 220,150
BP Amoco PLC ADR 3,490 378,665
Royal Dutch Petroleum Co. ADR 10,600 638,650
Total SA ADR 2,400 154,650
Union Pacific Resources Group, Inc. 8,500 138,656
----------
1,530,771
----------
ENVIRONMENTAL SERVICES (2.3%)
Allied Waste Industries, Inc. + 6,700 132,325
Waste Management, Inc. + 6,600 354,750
----------
487,075
----------
FINANCIAL SERVICES (11.6%)
Ace, Ltd. + 6,200 175,150
Countrywide Credit Industries, Inc. + 6,500 277,875
FINOVA Group, Inc. 2,450 128,931
Household International, Inc. 6,100 288,987
Lehman Brothers Holdings, Inc. + 6,650 413,963
MBIA, Inc. 4,600 297,850
MGIC Investment Corp. + 5,500 267,438
PMI Group, Inc. 5,350 336,047
Terra Nova Bermuda Holdings, Ltd. Class A 7,550 203,378
Waddell & Reed Financial, Inc. Class A 2,400 65,850
----------
2,455,469
----------
FOOD, BEVERAGES & TOBACCO (4.9%)
Anheuser-Busch Companies, Inc. 1,950 138,328
Corn Products International, Inc. 3,550 108,053
Heinz (H.J.) Co. 1,700 85,213
Keebler Foods Co. + 9,950 302,231
See Accompanying Notes to Financial Statements.
24
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
FOOD, BEVERAGES & TOBACCO (cont'd)
Philip Morris Companies, Inc. 10,100 $ 405,894
----------
1,039,719
----------
HEALTHCARE (2.7%)
Baxter International, Inc. 3,350 203,094
Becton, Dickinson & Co. 5,200 156,000
Trigon Healthcare, Inc. + 5,550 201,881
----------
560,975
----------
INDUSTRIAL MANUFACTURING & PROCESSING (3.5%)
Dana Corp. 2,300 105,944
Eaton Corp. + 1,700 156,400
Minnesota Mining & Manufacturing Co. 2,500 217,344
UNOVA, Inc. + 16,200 257,175
----------
736,863
----------
METALS & MINING (1.7%)
Alcoa, Inc. 5,964 369,023
----------
OFFICE EQUIPMENT & SUPPLIES (0.6%)
Pitney Bowes, Inc. 1,900 122,075
----------
OIL SERVICES (1.4%)
Baker Hughes, Inc. 4,600 154,100
Halliburton Co. 3,000 135,750
----------
289,850
----------
REAL ESTATE (0.4%)
Equity Residential Properties Trust 1,900 85,619
----------
RETAIL (8.0%)
Consolidated Stores Corp. + 3,700 99,900
Federated Department Stores, Inc. + 4,950 262,041
May Department Stores Co. 7,700 314,738
OfficeMax, Inc. + 7,700 92,400
Payless ShoeSource, Inc. + 1,628 87,098
Ross Stores, Inc. 6,700 337,513
Saks, Inc. + 2,850 82,294
Sears, Roebuck & Co. 2,300 102,494
TJX Companies, Inc. 9,600 319,800
----------
1,698,278
----------
TELECOMMUNICATIONS & EQUIPMENT (4.7%)
Ameritech Corp. 4,300 316,050
Bell Atlantic Corp. 6,800 444,550
SBC Communications, Inc. 4,000 232,000
----------
992,600
----------
See Accompanying Notes to Financial Statements.
25
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
TRANSPORTATION (0.5%)
Burlington Northern Santa Fe Corp. 3,100 $ 96,100
----------
UTILITIES-ELECTRIC (2.0%)
Allegheny Energy, Inc. 4,350 139,472
American Electric Power Co., Inc. 2,800 105,175
Illinova Corp. 2,900 79,025
Wisconsin Energy Corp. 4,300 107,769
----------
431,441
----------
TOTAL COMMON STOCK (Cost $16,084,592) 18,608,894
----------
PREFERRED STOCK (0.1%)
REAL ESTATE (0.1%)
Equity Residential Properties Series G 7.25% (Convertible)
(Callable 09/15/02 @ $25.91) (Cost $20,254) 800 19,050
----------
PAR
(000)
-------
CORPORATE BONDS (0.1%)
ELECTRONICS (0.1%)
National Semiconductor Corp. (Convertible) (Ba2, BB)
6.500% 10/01/02 (Cost $28,546) $ 30 28,650
---------
NUMBER
OF
SHARES
-------
SHORT TERM INVESTMENTS (12.0%)
Institutional Money Market Trust 1,538,125 1,538,125
RBB Money Market Fund 1,004,290 1,004,290
-----------
TOTAL SHORT TERM INVESTMENTS (Cost $2,542,415) 2,542,415
-----------
TOTAL INVESTMENTS AT VALUE (100.1%) (Cost $18,675,807*) 21,199,009
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.1%) (19,727)
-----------
NET ASSETS (100.0%) (applicable to 1,600,671
shares outstanding) $21,179,282
============
NET ASSET VALUE, offering and redemption
price per share ($21,179,282 / 1,600,671) $13.23
======
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $18,726,014.
See Accompanying Notes to Financial Statements.
26
<PAGE>
WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCKS (89.5%)
ARGENTINA (1.1%)
Telefonica de Argentina SA ADR 2,040 $ 64,005
----------
AUSTRALIA (1.8%)
Novus Petroleum, Ltd. 30,000 33,162
Oil Search, Ltd. 46,800 69,421
----------
102,583
----------
BRAZIL (8.5%)
Companhia Paranaense de Energia-Copel ADR 10,100 84,587
Embratel Participacoes SA ADR 7,000 97,125
Petroleo Brasileiro SA 670,000 103,923
Tele Norte Leste Participacoes SA 6,816,237 121,104
Telecomunicacoes de Sao Paulo SA 602,200 70,989
----------
477,728
----------
CHILE (0.9%)
Distribucion y Servicio SA ADR 2,700 50,625
----------
CROATIA (2.2%)
Pliva DD GDR 8,230 122,414
----------
GREECE (2.2%)
Hellenic Telecommunication Organization SA ADR 10,960 121,245
----------
HONG KONG (6.1%)
China Telecom, Ltd. + 30,000 83,327
Cosco Pacific, Ltd. 32,000 26,603
Guoco Group, Ltd. 16,000 42,894
Pacific Century + 30,000 24,283
Shaw Brothers, Ltd. 52,000 35,522
SmarTone Telecommunications Holdings, Ltd. 15,200 54,072
Wing Hang Bank, Ltd. 24,000 77,179
----------
343,880
----------
HUNGARY (2.5%)
BorsodChem 400 9,675
Mol Magyar Olaj-es Gazipari 970 23,380
OTP Bank 2,610 108,879
----------
141,934
----------
INDIA (6.5%)
Mahanagar Telephone Nigam, Ltd. GDR 13,075 129,442
State Bank of India, Ltd. GDR 13,400 164,485
Videsh Sanchar Nigam, Ltd. GDR 5,400 69,187
----------
363,114
----------
See Accompanying Notes to Financial Statements.
27
<PAGE>
WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
ISRAEL (2.8%)
Blue Square Israel Co., Ltd. ADR 3,241 $ 51,451
ECI Telecommunications Limited Designs 1,660 55,091
Orbotech, Ltd. + 1,000 52,125
---------
158,667
---------
MALAYSIA (0.9%)
Commerce Asset Holdings BHD 11,000 27,211
Tenaga Nasional BHD 10,000 23,026
--------
50,237
--------
MEXICO (9.3%)
Carso Global Telecom SA 13,600 85,938
Fomento Economico Mexicano SA de CV ADR 2,220 88,522
Grupo Financiero Bancomer SA de CV 151,000 54,501
Grupo Financiero Banorte SA de CV Class O + 21,100 30,820
Grupo Industrial Bimbo SA de CV Class A 38,700 86,021
Grupo Industrial Saltillo SA de CV 21,900 78,813
Telefonos de Mexico SA ADR 1,200 96,975
--------
521,590
--------
PERU (1.6%)
Credicorp, Ltd. ADR 7,900 86,900
--------
PHILIPPINES (1.4%)
Philippine Long Distance Telephone Co. 2,590 78,962
--------
POLAND (2.0%)
Bank Slaski SA 482 23,588
Elektrim Spolka Akcyjna SA 6,146 86,942
--------
110,530
--------
SINGAPORE (2.0%)
Keppel Telecommunications & Transportation, Ltd. 21,000 29,604
Overseas Union Bank, Ltd. 17,000 81,881
--------
111,485
--------
SOUTH AFRICA (9.0%)
ABSA Group, Ltd. 17,100 96,774
Billiton PLC 20,400 70,487
C.G. Smith, Ltd. 30,300 87,119
Sanlam, Ltd. + 105,140 124,579
Sappi, Ltd. 5,900 43,216
South African Breweries PLC 9,100 79,021
--------
501,196
--------
See Accompanying Notes to Financial Statements.
28
<PAGE>
WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -----
COMMON STOCK (CONT'D)
SOUTH KOREA (17.6%)
Cheil Jedang Corp. 1,200 $ 94,448
Hankuk Electric Glass Co., Ltd. 5,480 234,357
Hite Brewery Co., Ltd. 2,328 80,854
Hyundai Industrial Development & Construction 1,964 27,488
Korea Telecom Corp. 1,490 98,864
Korea Telecom Corp. ADR + 1,980 79,200
Samsung Corp. 3,700 86,949
Samsung Electronics Co., Ltd. 1,188 130,351
Shinhan Bank 7,300 81,990
Trigem Computer, Inc. 1,800 69,981
---------
984,482
---------
TAIWAN (8.6%)
Far Eastern Textile 35,000 52,014
Phoenixtec Power Co., Ltd. 40,000 79,879
Taishin International Bank 99,000 73,563
Taiwan Semiconductor Manufacturing Co. + 40,510 154,896
United Microelectronics Co., Ltd. 29,900 64,338
Yang Ming Marine Transport, Ltd. + 90,000 58,516
---------
483,206
---------
THAILAND (0.6%)
Hana Microelectronics Public Co., Ltd. 11,600 34,919
---------
TURKEY (1.9%)
Akcansa Cimento AS 2,778,000 28,306
Yapi Ve Kredi Bankasi AS 2,892,600 41,812
Yapi ve Kredi Bankasi AS Non-Tradeable Receipts 2,314,080 33,449
---------
103,567
---------
TOTAL COMMON STOCKS (Cost $4,022,270) 5,013,269
---------
PREFERRED STOCK (1.4%)
THAILAND (1.4%)
Siam Commercial Bank Public Co., Ltd. +
(Cost $39,038) 55,500 79,019
---------
WARRANTS (1.6%)
THAILAND (1.6%)
Siam Commercial Bank Public Co., Ltd. 05/10/02 +
(Cost $0) 136,000 87,596
---------
See Accompanying Notes to Financial Statements.
29
<PAGE>
WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)--JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PAR
(000) VALUE
-------- ---------
CORPORATE BONDS (1.3%)
POLAND (1.3%)
Elektrim Finance BV 3.75% 07/02/04
(Convertible) (Callable 1/15/01 @ 100.00 EUR)
(Putable 12/15/01 @ 109.22 EUR) $ 68 $ 70,126
-----------
NUMBER
OF
SHARES
--------
SHORT TERM INVESTMENTS (6.1%)
Institutional Money Market Trust 75,169 75,170
RBB Money Market Fund 265,079 265,079
----------
TOTAL SHORT TERM INVESTMENTS (Cost $340,249) 340,249
----------
TOTAL INVESTMENTS AT VALUE (99.9%) (Cost $4,538,704*) 5,590,259
OTHER ASSETS IN EXCESS OF OTHER LIABILITIES (0.1%) 6,805
----------
NET ASSETS (100.0%) (applicable to 510,270
shares outstanding) $5,597,064
==========
NET ASSET VALUE, offering and redemption
price per share ($5,597,064 / 510,270) $10.97
======
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
GDR = Global Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $4,567,981.
See Accompanying Notes to Financial Statements.
30
<PAGE>
WARBURG PINCUS TRUST
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL SMALL COMPANY POST-VENTURE GROWTH & EMERGING
EQUITY GROWTH CAPITAL INCOME MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $5,837,590 $223,555 $32,970 $111,505 $46,530
Interest 526,929 1,180,300 93,602 48,595 9,814
Foreign taxes withheld (396,321) 0 (1,846) (1,820) (34,984)
---------- --------- ------- -------- -------
Total investment income 5,968,198 1,403,855 124,726 158,280 21,360
---------- --------- ------- -------- -------
EXPENSES:
Investment advisory 1,764,958 3,066,455 390,799 61,856 23,193
Administrative services 387,833 660,545 65,925 22,743 7,571
Audit 11,349 12,730 6,103 5,578 5,745
Custodian/Sub-custodian 129,645 70,025 9,818 12,542 2,652
Trustees 1,344 1,003 947 986 970
Interest 594 815 (133) 20 12
Insurance 3,048 5,591 725 297 171
Legal 13,900 22,547 2,514 1,051 123
Offering/Organizational costs 6,170 8,718 0 0 12,072
Printing 16,545 25,892 8,557 1,803 553
Registration 1 (17) 16 (17) (33)
Transfer agent 11,272 24,108 4,588 908 1,069
Miscellaneous 3,467 1,037 663 632 599
---------- --------- ------- -------- -------
2,350,126 3,899,449 490,522 108,399 54,697
Less: fees waived,
expenses reimbursed
and transfer agent
fee offsets (12,395) (27,682) (52,827) (25,924) (28,722)
---------- --------- ------- -------- -------
Total expenses 2,337,731 3,871,767 437,695 82,475 25,975
---------- --------- ------- -------- -------
Net investment
income/(loss) 3,630,467 (2,467,912) (312,969) 75,805 (4,615)
---------- --------- ------- -------- -------
NET REALIZED AND UNREALIZED GAIN FROM
INVESTMENTS AND FOREIGN CURRENCY RELATED
ITEMS:
Net realized gain from
security and other
related transactions 10,493,918 40,855,112 1,297,487 1,096,839 359,426
Net realized loss from
foreign currency related
items (5,369,443) 0 (431) (4) (30,437)
Net change in unrealized
appreciation from
investments and foreign
currency related items 18,629,521 6,350,025 6,366,845 1,314,384 993,571
---------- --------- --------- ---------- -------
Net realized and unrealized
gain from investments and
foreign currency related
items 23,753,996 47,205,137 7,663,901 2,411,219 1,322,560
---------- --------- --------- ---------- ----------
Net increase in net assets
resulting from operations $27,384,463 $44,737,225 $7,350,932 $2,487,024 $1,317,945
=========== =========== ========== ========== ==========
</TABLE>
See Accompanying Notes to Financial Statements.
31
<PAGE>
WARBURG PINCUS TRUST
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
---------------------------------- --------------------------------
FOR THE FOR THE
SIX MONTHS SIX MONTHS
ENDED FOR THE ENDED FOR THE
JUNE 30, 1999 YEAR ENDED JUNE 30, 1999 YEAR ENDED
(UNADUITED) DECEMEBR 31, 1998 (UNADUITED) DECEMEBR 31, 1998
------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 3,630,467 $ 2,508,512 $ (2,467,912) $ (3,446,956)
Net realized gain (loss) from
security and other related
transactions 10,493,918 (13,570,730) 40,855,112 (24,310,017)
Net realized gain (loss) from
foreign currency related items (5,369,443) 4,293,895 0 0
Net change in unrealized
appreciation from investments
and foreign currency
related items 18,629,521 27,818,000 6,350,025 12,266,488
------------- ------------ ------------- ------------
Net increase (decrease) in net
assets resulting from
operations 27,384,463 21,049,677 44,737,225 (15,490,485)
------------- ------------ ------------- ------------
FROM DISTRIBUTIONS:
Dividends from net investment
income 0 (1,737,856) 0 0
Return of Capital 0 0 0 0
Distributions from realized gains 0 (203,842) 0 0
------------- ------------ ------------- ------------
Net decrease in net assets
from distributions 0 (1,941,698) 0 0
------------- ------------ ------------- ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 494,826,268 560,600,065 79,355,575 356,119,068
Reinvested dividends 0 1,941,380 0 0
Net asset value of shares
redeemed (492,520,490) (568,753,948) (122,694,035) (272,120,075)
------------- ------------ ------------- ------------
Net increase (decrease) in net
assets from capital
share transactions 2,305,778 (6,212,503) (43,338,460) 83,998,993
------------- ------------ ------------- ------------
Net increase in net assets 29,690,241 12,895,476 1,398,765 68,508,508
NET ASSETS:
Beginning of period 360,124,458 347,228,982 734,902,165 666,393,657
------------- ------------ ------------- ------------
End of Period $ 389,814,699 $360,124,458 $ 736,300,930 $734,902,165
============= ============ ============= ============
UNDISTRIBUTED NET INVESTMENT
INCOME $ 0 $ 109,776 $ 0 $ 0
============= ============ ============= ============
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME
POST-VENTURE CAPITAL PORTFOLIO PORTFOLIO
----------------------------------- ----------------------------------
FOR THE FOR THE
SIX MONTHS SIX MONTHS
ENDED FOR THE ENDED FOR THE
JUNE 30, 1999 YEAR ENDED JUNE 30, 1999 YEAR ENDED
(UNADUITED) DECEMEBR 31, 1998 (UNADUITED) DECEMEBR 31, 1998
------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (312,969) $ (377,268) $ 75,805 $ 87,349
Net realized gain (loss) from
security and other related
transactions 1,297,487 (5,574,888) 1,096,839 (454,057)
Net realized gain (loss) from
foreign currency related items (431) 0 (4) (61)
Net change in unrealized
appreciation from investments
and foreign currency
related items 6,366,845 8,660,364 1,314,384 1,140,836
----------- ------------ ----------- -----------
Net increase (decrease) in net
assets resulting from
operations 7,350,932 2,708,208 2,487,024 774,067
----------- ------------ ----------- -----------
FROM DISTRIBUTIONS:
Dividends from net investment
income 0 0 0 (116,510)
Return of Capital 0 0 0 0
Distributions from realized gains 0 0 0 0
----------- ------------ ----------- -----------
Net decrease in net assets
from distributions 0 0 0 (116,510)
----------- ------------ ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 35,730,684 82,888,701 6,617,960 14,068,832
Reinvested dividends 0 0 0 115,563
Net asset value of shares
redeemed (31,137,271) (54,062,024) (2,306,471) (2,454,324)
----------- ------------ ----------- -----------
Net increase (decrease) in net
assets from capital
share transactions 4,593,413 28,826,677 4,311,489 11,730,071
----------- ------------ ----------- -----------
Net increase in net assets 11,944,345 31,534,885 6,798,513 12,387,628
NET ASSETS:
Beginning of period 62,055,074 30,520,189 14,380,769 1,993,141
----------- ------------ ----------- -----------
End of Period $73,999,419 $ 62,055,074 $21,179,282 $14,380,769
=========== ============ =========== ===========
UNDISTRIBUTED NET INVESTMENT
INCOME $ 0 $ 0 $ 85,015 $ 9,214
=========== ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
EMERGING MARKETS
PORTFOLIO
---------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
JUNE 30, 1999 YEAR ENDED
(UNADUITED) DECEMEBR 31, 1998
------------- -----------------
FROM OPERATIONS:
<S> <C> <C>
Net investment income (loss) $ (4,615) $ 29,497
Net realized gain (loss) from
security and other related
transactions 359,426 (248,533)
Net realized gain (loss) from
foreign currency related item (30,437) (7,185)
Net change in unrealized
appreciation from investments
and foreign currency
related items 993,571 72,885
---------- ----------
Net increase (decrease) in net
assets resulting from
operations 1,317,945 (153,336)
---------- ----------
FROM DISTRIBUTIONS:
Dividends from net investment
income 0 (22,312)
Return of Capital 0 (494)
Distributions from realized gains 0 0
---------- ----------
Net decrease in net assets
from distributions 0 (22,806)
---------- ----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 2,404,116 2,979,651
Reinvested dividends 0 15,065
Net asset value of shares
redeemed (820,769) (123,902)
---------- ----------
Net increase (decrease) in net
assets from capital
share transactions 1,583,347 2,870,814
---------- ----------
Net increase in net assets 2,901,292 2,694,672
NET ASSETS:
Beginning of period 2,695,772 1,100
---------- ----------
End of Period $5,597,064 $2,695,772
========== ==========
UNDISTRIBUTED NET INVESTMENT
INCOME $ 0 $ 0
========== ==========
</TABLE>
See Accompanying Notes to Financial Statements.
32-33
<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 SIX JUNE 30, 1995
MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
JUNE 30, 1999 ----------------------------------- OPERATIONS) THROUGH
(UNAUDITED) 1998 1997 1996 DECEMBER 31, 1995
------------- ------- ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 10.99 $ 10.49 $ 11.48 $ 10.65 $ 10.00
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment income 0.11 0.08 0.10 0.00 0.03
Net gains or losses on investments and
foreign currency related items (both
realized and unrealized) 0.65 0.48 (0.37) 1.06 0.70
-------- -------- -------- -------- --------
Total from investment activities 0.76 0.56 (0.27) 1.06 0.73
-------- -------- -------- -------- --------
DISTRIBUTIONS:
From net investment income 0.00 (0.05) (0.01) (0.06) (0.01)
In excess of net investment income 0.00 0.00 0.00 (0.10) (0.07)
From realized gains 0.00 (0.01) 0.00 (0.06) 0.00
In excess of realized gains 0.00 0.00 (0.71) (0.01) 0.00
-------- -------- -------- -------- --------
Total distributions 0.00 (0.06) (0.72) (0.23) (0.08)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 11.75 $ 10.99 $ 10.49 $ 11.48 $ 10.65
======== ======== ======== ======== ========
Total return 6.92%1 5.35% (2.26)% 9.98% 7.30%1
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted) $389,815 $360,124 $347,229 $298,218 $64,537
Ratio of expenses to average net assets 1.32%2,3 1.33%2 1.36%2 1.36%2 1.44%3
Ratio of net income to average net assets 2.06%3 .68% .66% .64% .48%3
Decrease reflected in above operating
expense ratios due to waivers/
reimbursements .00% .00% .00% .04% .77%3
Portfolio turnover rate 82.21%1 105.28% 78.65% 30.82% 8.31%1
<FN>
- --------------------------------------------------------------------------------
1 Non-annualized.
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
portfolio's net expense ratio by .01%, .00%, .01% and .00% for the period
ended June 30, 1999 and for the years ended December 31, 1998, 1997 and 1996,
respectively. The portfolio's operating expense ratios after reflecting these
arrangements were 1.33%, 1.33%, 1.35% and 1.36% for the period ended June 30,
1999 and for the years ended December 31, 1998, 1997 and 1996, respectively.
3 Annualized.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
34
<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 SIX JUNE 30, 1995
MONTHS ENDED FOR THE YEAR ENDED DECEMBER 31, (COMMENCEMENT OF
JUNE 30, 1999 ---------------------------------- OPERATIONS) THROUGH
(UNAUDITED) 1998 1997 1996 DECEMBER 31, 1995
------------- -------- -------- -------- -------------------
<S> <C> <C> <C> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 16.01 $ 16.48 $ 14.25 $ 12.51 $ 10.00
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment loss (0.07) (0.06) (0.07) (0.06) (0.01)
Net gains or losses on investments
and foreign currency related items
(both realized and unrealized) 1.15 (0.41) 2.30 1.80 2.52
-------- -------- -------- -------- --------
Total from investment activities 1.08 (0.47) 2.23 1.74 2.51
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 17.09 $ 16.01 $ 16.48 $ 14.25 $ 12.51
======== ======== ======== ======== ========
Total return 6.75%1 (2.85)% 15.65% 13.91% 25.10%1
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted) $736,301 $734,902 $666,394 $339,398 $97,445
Ratio of expenses to average net assets 1.14%2,3 1.14%2 1.15%2 1.16%2 1.25%3
Ratio of net loss to average net assets (.72)%3 (.51)% (.56)% (.66)% (.36)%3
Decrease reflected in above operating
expense ratios due to waivers/
reimbursements .00% .00% .00% .01% .25%3
Portfolio turnover rate 65.71%1 65.61% 92.45% 101.50% 34.25%1
<FN>
- --------------------------------------------------------------------------------
1 Non-annualized.
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
portfolio's net expense ratio by .01%, .00%, .01% and .00% for the period
ended June 30, 1999 and for the years ended December 31, 1998, 1997 and 1996,
respectively. The portfolio's operating expense ratios after reflecting these
arrangements were 1.15%, 1.14%, 1.14% and 1.16% for the period ended June 30,
1999 and for the years ended December 31, 1998, 1997 and 1996, respectively.
3 Annualized.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
35
<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
FOR THE SIX FOR THE YEAR ENDED SEPTEMBER 30, 1996
MONTHS ENDED DECEMBER 31, (COMMENCEMENT OF
JUNE 30, 1999 -------------------- Operations) through
(UNAUDITED) 1998 1997 DECEMBER 31, 1996
------------- ---- ---- -------------------
<S> <C> <C> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 11.82 $ 11.06 $ 9.76 $ 10.00
------- ------- ------- ------
INVESTMENT ACTIVITIES:
Net investment loss (0.05) (0.04) (0.08) 0.00
Net gains or losses on investments
and foreign currency related items
(both realized and unrealized) 1.51 0.80 1.38 (0.24)
------- ------- ------- ------
Total from investment activities 1.46 0.76 1.30 (0.24)
------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 13.28 $ 11.82 $ 11.06 $ 9.76
======= ======= ======= ======
Total return 12.35%1 6.87% 13.34% (2.40)%1
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted) $73,999 $62,055 $30,520 $12,400
Ratio of expenses to average net assets 1.40%2,3 1.40%2 1.40%2 1.41%2,3
Ratio of net income (loss) to
average net assets (1.00)%3 (.83)% (.75)% .80%3
Decrease reflected in above operating
expense ratios due to waivers/
reimbursements .16%3 .30% .18% 4.16%3
Portfolio turnover rate 15.11%1 73.18% 238.12% 6.80%1
<FN>
- --------------------------------------------------------------------------------
1 Non-annualized.
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
portfolio's net expense ratio by .00%, .00%, .00% and .01% for the period
ended June 30, 1999 and for the year or period ended December 31, 1998, 1997
and 1996, respectively. The portfolio's operating expense ratios after
reflecting these arrangements were 1.40%, 1.40%, 1.40% and 1.40% for the
period ended June 30, 1999 and for the year or period ended December 31,
1998, 1997 and 1996, respectively.
3 Annualized.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
36
<PAGE>
WARBURG PINCUS TRUST -- GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX OCTOBER 31, 1997
MONTHS ENDED FOR THE (COMMENCEMENT OF
JUNE 30, 1999 YEAR ENDED OPERATIONS) THROUGH
(UNAUDITED) DECEMBER 31, 1998 DECEMBER 31, 1997
------------- ----------------- -------------------
<S> <C> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 11.48 $ 10.33 $ 10.00
------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income 0.06 0.09 0.04
Net gains on investments and foreign
currency related items (both realized
and unrealized) 1.69 1.16 0.35
------- ------- -------
Total from investment activities 1.75 1.25 0.39
------- ------- -------
DISTRIBUTIONS:
From net investment income 0.00 (0.10) (0.03)
Return of capital 0.00 0.00 (0.03)
------- ------- -------
Total distributions 0.00 (0.10) (0.06)
------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 13.23 $ 11.48 $ 10.33
======= ======= =======
Total return 15.24%1 12.13% 3.89%1
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $21,179 $14,381 $ 1,993
Ratio of expenses to average net assets 1.00%2,3 1.00%2 1.00%2,3
Ratio of net income to average net assets .92%3 1.11% 2.08%3
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .31%3 1.22% 9.37%3
Portfolio turnover rate 49.63%1 57.93% 64.38%1
<FN>
- --------------------------------------------------------------------------------
1 Non-annualized
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the portfolio's
expense ratio.
3 Annualized.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
37
<PAGE>
WARBURG PINCUS TRUST -- EMERGING MARKETS PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
------------- -----------------
<S> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 8.19 $10.00
------ ------
INVESTMENT ACTIVITIES:
Net investment income (loss) (0.03) 0.10
Net gains or losses on investments and foreign
currency related items (both realized and
unrealized) 2.81 (1.83)
------ ------
Total from investment activities 2.78 (1.73)
------ ------
DISTRIBUTIONS:
From net investment income 0.00 (0.08)
------ ------
NET ASSET VALUE, END OF PERIOD $10.97 $ 8.19
====== ======
Total return 33.94%1 (17.30)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $5,597 $2,696
Ratio of expenses to average net assets 1.40%2,3 1.40%2
Ratio of net income (loss) to average net assets (.25)%3 2.09%
Decrease reflected in above operating
expense ratios due to waivers/reimbursements 1.54%3 6.81%
Portfolio turnover rate 26.72%1 21.29%
<FN>
- -----------------------------------------------------------------------------------
1 Non-annualized.
2 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the portfolio's
expense ratio.
3 Annualized.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
38
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (1940 Act), and currently
offers five investment portfolios. The International Equity, Post-Venture
Capital and Growth & Income Portfolios are diversified and the Small Company
Growth and Emerging Markets Portfolios are non-diversified.
Investment objectives for each portfolio are as follows: the International
Equity Portfolio seeks long-term capital appreciation; the Small Company Growth
Portfolio seeks capital growth; the Post-Venture Capital Portfolio seeks
long-term growth of capital; the Growth & Income Portfolio seeks long-term
growth of capital and income; and the Emerging Markets Portfolio seeks long-term
growth of capital. Shares of a portfolio are not available directly to
individual investors but may be offered only through (a) variable- annuity
contracts and variable life insurance contracts offered by separate accounts of
certain insurance companies and (b) tax-qualified pension and retirement plans.
Certain portfolios may not be available in connection with a particular contract
or plan.
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. If market quotations are
not readily available, securities and other assets are valued by another method
that the Board of Trustees believes accurately reflects fair value. Debt that
will mature in 60 days or less is valued on the basis of amortized cost, which
approximates market value, unless the Board determines that using this method
would not reflect an investment's 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 is due to changes in
the foreign exchange rate from that which is due to changes in market prices of
equity securities. The portfolios isolate that
39
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
portion of gains and losses on investments in debt securities which is due to
changes in the foreign exchange rate from that which is due to changes in market
prices of debt securities.
The International Equity Portfolio and the Emerging Markets Portfolio may
invest in securities of foreign countries and governments which involve certain
risks in addition to those inherent in domestic investments. Such risks
generally include, among others, currency risk (fluctuations in currency
exchange rates), information risk (key information may be inaccurate or
unavailable) and political risk (expropriation, nationalization or the
imposition of capital or currency controls or punitive taxes). Other risks of
investing in foreign securities include liquidity and valuation risks.
A portfolio's investments in securities of issuers located in less developed
countries considered to be "emerging markets" involve risks in addition to those
generally applicable to foreign securities. Focusing on emerging (less
developed) markets involves higher levels of risk, including increased currency,
information, liquidity, market, political and valuation risks. Deficiencies in
regulatory oversight, market infrastructure, shareholder protections and company
laws could expose the portfolio to operational and other risks as well. Some
countries may have restrictions that could limit the portfolio's access to
attractive opportunities. Additionally, emerging markets often face serious
economic problems (such as high external debt, inflation and unemployment) that
could subject the portfolio to increased volatility or substantial declines in
value.
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.
40
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
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.
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 of
1986, as amended, and make the requisite distributions to its shareholders which
will be sufficient to relieve it from federal income and excise taxes.
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 Warburg Pincus Funds, transfers
uninvested cash balances to a pooled cash account, which is invested in
repurchase agreements secured by U.S. government securities. Securities pledged
as collateral for repurchase agreements are held by the 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 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.
41
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
The portfolios have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances is used to offset a portion of their transfer
agent expense. For the six months ended June 30, 1999, the portfolios received
credits or reimbursements under the arrangement as follows:
PORTFOLIO AMOUNT
---------- -------
International Equity $12,395
Small Company Growth 27,682
Post-Venture Capital 1,396
Growth & Income 377
Emerging Markets 83
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
On July 6, 1999, Credit Suisse Asset Management, LLC (CSAM) became each
portfolio's investment adviser as a result of the completion of the previously
announced acquisition of Warburg Pincus Asset Management, Inc. (WPAM) by Credit
Suisse Group (Credit Suisse) and the combination of WPAM with Credit Suisse's
existing U.S. asset management business. CSAM is an indirect wholly-owned U.S.
subsidiary of Credit Suisse. For its investment advisory services, CSAM receives
the following fees based on each portfolio's average daily net assets:
PORTFOLIO ANNUAL RATE
---------- ---------------------------------
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
Emerging Markets 1.25% of average daily net assets
For the six months ended June 30, 1999, investment advisory fees, voluntary
waivers and reimbursements were as follows:
GROSS NET EXPENSE
PORTFOLIO ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS
-------- ------------ ------- ---------- -----------------
International Equity $1,764,958 $ 0 $1,764,958 $ 0
Small Company Growth 3,066,455 0 3,066,455 0
Post-Venture Capital 390,799 (51,431) 339,368 0
Growth & Income 61,856 (13,176) 48,680 0
Emerging Markets 23,193 (22,402) 790 (4,011)
42
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
Abbott Capital Management, LLC (Abbott) serves as sub-investment adviser for
the Post-Venture Capital Portfolio's assets invested in private equity
portfolios (Private Fund Investments). Pursuant to the sub-advisory agreement
between Abbott and CSAM, Abbott is entitled to a quarterly fee from CSAM at the
annual rate of 1.00% of the net asset value of Private Fund Investments, which
fee amount or a portion thereof may be waived by Abbott. No compensation is paid
by the Post-Venture Capital Portfolio to Abbott for its sub-investment advisory
services.
Counsellors Funds Service, Inc. (CFSI), an indirect wholly-owned subsidiary
of Credit Suisse, and PFPC, Inc. (PFPC), an indirect, wholly owned subsidiary of
PNC Bank Corp., serve as each portfolio's co-administrators. For its
administrative services, CFSI currently receives a fee calculated at an annual
rate of .10% of each portfolio's average daily net assets. For the six months
ended June 30, 1999, administrative services fees earned by CFSI were as
follows:
PORTFOLIO CO-ADMINISTRATION FEE
-------- --------------------
International Equity $176,496
Small Company Growth 340,717
Post-Venture Capital 31,264
Growth & Income 8,248
Emerging Markets 1,855
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 and the Emerging Markets 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 six
months ended June 30, 1999, administrative service fees earned and waived by
PFPC were as follows:
43
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
CO-ADMINISTRATION NET
PORTFOLIO FEE WAIVER CO-ADMINISTRATION FEE
-------- ----------------- --------- ---------------------
International Equity $211,337 $0 $211,337
Small Company Growth 319,828 0 319,828
Post-Venture Capital 34,661 0 34,661
Growth & Income 14,495 (12,371) 2,124
Emerging Markets 5,716 (2,226) 3,490
It is currently contemplated that, on or before January 6, 2000, CFSI will be
replaced as co-administrator of each portfolio by Credit Suisse Asset Management
Securities, Inc. (CSAMSI), an indirect wholly-owned subsidiary of Credit Suisse
that was formerly known as Counsellors Securities, Inc. CSAMSI serves as each
portfolio's distributor. No compensation is paid by the portfolios to CSAMSI for
its distribution services. On June 20, 1999, the Trust's Board of Trustees
approved Provident Distributors, Inc. (PDI) as each portfolio's distributor,
effective on or before January 6, 2000. PDI, a Delaware corporation, is a
registered broker-dealer and serves as distributor to other mutual funds.
3. LINE OF CREDIT
The portfolios, together with other funds advised by CSAM, have established a
$250 million committed line of credit facility (Credit Facility) with Deutche
Bank, AG as administrative agent, State Street Bank and Trust Company as
operations agent, Bank of Nova Scotia as syndication agent and certain other
lenders, for temporary or emergency purposes primarily relating to unanticipated
portfolio share redemptions. Under the terms of the Credit Facility, the funds
with access to the Credit Facility pay an aggregate commitment fee at a rate of
.075% per annum on the average daily balance of the Credit Facility that is
undisbursed and uncanceled during the preceding quarter allocated among the
participating funds in such manner as is determined by the governing Boards of
the various funds. In addition, the participating funds will pay interest on
borrowing at the Federal Funds rate plus .50%. During the period ended June 30,
1999, the following portfolio had borrowings under the line of credit agreement:
<TABLE>
<CAPTION>
AVERAGE DAILY AVERAGE MAXIMUM DAILY LOAN OUTSTANDING
PORTFOLIO LOAN BALANCE INTEREST RATE % LOAN OUTSTANDING AT 6/30/99
- ------ ------------- --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
International Equity $2,389 5.51% $872,000 $0
</TABLE>
44
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
4. INVESTMENTS IN SECURITIES
For the six months ended June 30, 1999, purchases and sales of investment
securities (excluding short-term investments) were as follows:
PORTFOLIO PURCHASES SALES
-------- ------------ ------------
International Equity $275,161,271 $307,878,011
Small Company Growth 428,557,487 463,076,589
Post-Venture Capital 29,673,094 26,836,040
Growth & Income 11,046,877 7,329,483
Emerging Markets 4,811,729 3,084,576
At June 30, 1999, the net unrealized appreciation from investments for those
securities having an excess of value over cost and net unrealized depreciation
from investments for those securities having an excess of cost over value (based
on cost for federal income tax purposes) were as follows:
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION)
-------- ------------ -------------- --------------
International Equity $ 63,393,511 $(14,238,220) $ 48,155,291
Small Company Growth 183,853,896 (38,342,432) 145,511,464
Post-Venture Capital 20,275,166 (2,148,180) 18,126,986
Growth & Income 2,727,258 (254,263) 2,472,995
Emerging Markets 1,125,536 (103,258) 1,022,278
5. EQUITY SWAP TRANSACTIONS
The International Equity and the Emerging Markets Portfolios each entered
into equity swap agreements dated January 7, 1999, January 8, 1999 and January
11, 1999. Each portfolio paid a notional amount plus a 1.25% upfront fee for a
basket of Singapore local common stocks. The initial notional amount represented
the then-current market value of the common stock. The notional amount is
marked-to-market daily. The swap agreements expire on January 8, 2001, but are
terminable by either party on one business day's notice. The final notional
amount at termination will be the average execution price of unwinding the
counterparty's hedge for the swap (the sale of the basket of common stocks) at
termination. Each portfolio will receive the final notional amount, less a 1.25%
fee, five business days after the termination date.
During the term of the equity swap agreements, each portfolio is entitled to
dividends on the stock less a dividend withholding tax of 26% and a 1%
processing fee (not to exceed $1,000). Each portfolio should recognize the net
dividend amount received as dividend income on the ex-dividend date and will
receive each dividend five business days after the payment date. In addition, a
portfolio may instruct the counterparty regarding participation in any
45
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
5. EQUITY SWAP TRANSACTIONS (CONT'D)
rights offerings of the common stock, in exchange for the subscription price
plus a .075% fee to the counterparty.
At June 30, 1999, the International Equity Portfolio had the following open
equity swap agreements:
MARKET NOTIONAL UNREALIZED
VALUE AMOUNT APPRECIATION
---------- ---------- ------------
Basket 1 $2,757,900 $1,675,367 $1,082,533
Basket 2 786,255 458,561 327,694
Basket 3 2,482,609 1,603,314 879,295
---------- ---------- ----------
$6,026,764 $3,737,242 $2,289,522
========== ========== ==========
At June 30, 1999, the Emerging Markets Portfolio had the following open
equity swap agreements:
MARKET NOTIONAL UNREALIZED
VALUE AMOUNT APPRECIATION
------- ---------- ------------
Basket 1 $20,100 $12,210 $ 7,890
Basket 2 5,700 3,330 2,370
Basket 3 18,261 11,777 6,484
------- ------- -------
$44,061 $27,317 $16,744
======= ======= =======
6. RESTRICTED SECURITIES
Certain investments held by a portfolio are restricted as to resale and
valued by a method that the Board of Trustee's believes reflects fair value. A
summary of the restricted securities held at June 30, 1999 follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION MARKET PERCENTAGE
PORTFOLIO DESCRIPTION DATE COST VALUE OF NET ASSETS
-------------- ------------------------ -------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Small Company Growth Southern Mineral Corp. 12/20/96 $ 794,813 $ 60,715 0.00%
Common Places LLC 02/18/99 1,000,000 1,000,001 0.10%
Post-Venture Capital Chaparral Resources, Inc. 07/28/98 250,000 105,556 0.10%
Women.Com Network 06/04/98 250,001 250,001 0.30%
</TABLE>
46
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS
Each portfolio is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value $.001 per share.
Transactions in shares of each portfolio were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY
PORTFOLIO GROWTH PORTFOLIO
------------------------ ------------------------------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
---------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Shares sold 44,510,625 50,488,163 5,051,032 22,514,856
Shares issued to shareholders
on reinvestment
of dividends 0 181,099 0 0
Shares redeemed (44,092,487) (50,915,580) (7,861,081) (17,112,706)
---------- ---------- --------- ----------
Net increase (decrease)
in shares outstanding 418,138 (246,318) (2,810,049) 5,402,150
========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
POST-VENTURE CAPITAL GROWTH & INCOME
PORTFOLIO PORTFOLIO
------------------------ ------------------------------
FOR THE FOR THE FOR THE FOR THE
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1999 DECEMBER 31, JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
---------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Shares sold 2,914,755 7,145,658 538,814 1,266,220
Shares issued to shareholders
on reinvestment
of dividends 0 0 0 10,402
Shares redeemed (2,594,923) (4,652,230) (191,024) (216,723)
---------- --------- ------- ---------
Net increase
in shares outstanding 319,832 2,493,428 347,790 1,059,899
========== ========= ======= =========
</TABLE>
EMERGING MARKETS
PORTFOLIO
----------------------------
FOR THE FOR THE
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1999 DECEMBER 31,
(UNAUDITED) 1998
------------- ------------
Shares sold 270,032 343,741
Shares issued to shareholders
on reinvestment
of dividends 0 1,900
Shares redeemed (89,111) (16,292)
------- -------
Net increase
in shares outstanding 180,921 329,349
======= =======
47
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
8. LIABILITIES
At June 30, 1999, the portfolios had the following affiliated and investment
related liabilities:
<TABLE>
<CAPTION>
INTERNATIONAL SMALL COMPANY POST-VENTURE EMERGING
EQUITY GROWTH CAPITAL GROWTH & INCOME MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Payable for securities purchased (at value) $5,146,961 $3,980,111 $551,100 $81,540 $101,777
Administration services fee payable 29,353 57,247 4,433 1,646 431
Investment advisory fee payable 293,651 515,225 57,831 9,382 0
</TABLE>
9. NET ASSETS
At June 30, 1999, 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. The International Equity Portfolio, the Post-Venture Capital
Portfolio, the Growth & Income Portfolio and the Emerging Markets Portfolio
reclassified $5,369,443, $431, $4 and $30,437, respectively, from accumulated
net realized gain/(loss) from security transactions to undistributed net
investment income. The International Equity Portfolio, the Small Company Growth
Portfolio, the Post-Venture Capital Portfolio and the Emerging Markets Portfolio
reclassified ($1,629,200), ($2,467,912), ($313,400) and ($35,052), respectively,
from accumulated net investment income/(loss) to capital contributions. Net
investment income, net realized gain/(loss) on investments and net assets were
not affected by these reclassifications.
Net assets at June 30, 1999, consisted of the following:
<TABLE>
<CAPTION>
INTERNATIONAL SMALL COMPANY POST-VENTURE EMERGING
EQUITY GROWTH CAPITAL GROWTH & INCOME MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ----------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Capital contributed, net $366,062,634 $591,378,648 $60,051,739 $17,936,355 $4,419,715
Undistributed net investment income 0 0 0 85,015 0
Accumulated net realized gain/(loss) from
security transactions (27,647,542) (748,120) (4,504,501) 634,714 110,893
Net unrealized appreciation from
investments and foreign
currency related items 51,399,607 145,670,402 18,452,181 2,523,198 1,066,456
------------ ------------ ----------- ----------- ----------
Net assets 389,814,699 736,300,930 73,999,419 21,179,282 $5,597,064
============ ============ =========== =========== ==========
</TABLE>
48
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
10. CAPITAL LOSS CARRYOVER
At June 30, 1999, capital loss carryovers available to offset possible future
capital gains of each portfolio were as follows:
CAPITAL LOSS
CARRYOVER EXPIRING IN
---------------------------------------------------
TOTAL CAPITAL
PORTFOLIO 2004 2005 2006 LOSS CARRYOVER
---------- ----------- ------- ----------- --------------
International Equity $ 0 $ 0 $41,615,314 $41,615,314
Small Company Growth 17,167,113 0 24,188,511 41,355,624
Post-Venture 47,891 71,085 5,434,579 5,553,555
Growth & Income 0 8,068 398,911 406,979
Emerging Markets 0 0 184,106 184,106
11. RESULTS OF SPECIAL MEETING OF SHAREHOLDERS
At a special meeting of shareholders held on May 21, 1999, the following
proposals were submitted for the vote of shareholders of the Trust. The
proposals and voting results were:
1. To approve a new investment advisory agreement between each portfolio and
CSAM.
<TABLE>
<CAPTION>
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
INTERNATIONAL EQUITY PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ --------------- -------------------- --------------------
<S> <C> <C> <C>
For 29,735,919.3661 90.4856% 91.1988%
Against 502,724.3810 1.5298% 1.5418%
Abstain 2,366,964.4931 7.2026% 7.2594%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
SMALL COMPANY GROWTH PORTFOLIOS SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ --------------- -------------------- --------------------
For 38,614,143.4080 87.5109% 90.0685%
Against 928,384.6052 2.1040% 2.1655%
Abstain 3,329,468.8245 7.5455% 7.7661%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
POST-VENTURE CAPITAL PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ --------------- -------------------- --------------------
For 4,736,865.2862 91.5495% 92.3529%
Against 110,429.3639 2.1343% 2.1530%
Abstain 281,795.8329 5.4463% 5.4941%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
GROWTH & INCOME PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
-------------------------- --------------- -------------------- --------------------
For 1,189,345.1710 85.6098% 89.1694%
Against 54,742.6390 3.9404% 4.1042%
Abstain 89,716.8790 6.4579% 6.7264%
</TABLE>
49
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
11. RESULTS OF SPECIAL MEETING OF SHAREHOLDERS (CONT'D)
<TABLE>
<CAPTION>
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
EMERGING MARKETS PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
-------------------------- --------------- -------------------- --------------------
<S> <C> <C> <C>
For 344,882.5198 88.4669% 88.4715%
Against 28,717.5180 7.3664% 7.3668%
Abstain 16,223.3862 4.1615% 4.1617%
</TABLE>
2. To elect Trustees of the Trust.
INTERNATIONAL EQUITY PORTFOLIO FOR WITHELD
------------------------------ --------------- --------------
R.H. Francis 31,398,156.9328 1,207,451.3074
J.W. Fritz 31,403,917.8718 1,201,690.3684
J.E. Garten 31,420,501.4808 1,185,106.7594
J.S. Pasman 31,410,566.7228 1,195,041.5174
W.W. Priest 31,419,399.9988 1,186,208.2414
S.N. Rappaport 31,427,010.1528 1,178,598.0874
A.M. Reichman 31,430,218.9338 1,175,389.3064
A.B. Trowbridge 31,399,478.6148 1,206,129.6254
SMALL COMPANY GROWTH PORTFOLIO FOR WITHELD
------------------------------ --------------- --------------
R.H. Francis 41,042,356.1172 1,829,640.7205
J.W. Fritz 41,041,688.5415 1,830,308.2962
J.E. Garten 41,064,531.1652 1,807,465,6725
J.S. Pasman 41,044,146.4763 1,827,850.3614
W.W. Priest 41,054,244.4816 1,817,752.3561
S.N. Rappaport 41,063,335.1724 1,808,661.6653
A.M. Reichman 41,063,166.3287 1,808,830.5090
A.B. Trowbridge 41,042,120.1436 1,829,876.6941
POST-VENTURE CAPITAL PORTFOLIO FOR WITHELD
------------------------------ -------------- --------------
R.H. Francis 4,955,061.5045 174,028.9785
J.W. Fritz 4,955,061.5045 174,028.9785
J.E. Garten 4,955,061.5045 174,028.9785
J.S. Pasman 4,955,061.5045 174,028.9785
W.W. Priest 4,955,061.5045 174,028.9785
S.N. Rappaport 4,955,061.5045 174,028.9785
A.M. Reichman 4,955,061.5045 174,028.9785
A.B. Trowbridge 4,955,061.5045 174,028.9785
GROWTH & INCOME PORTFOLIO FOR WITHELD
------------------------- -------------- -----------
R.H. Francis 1,306,326.3770 27,478.3120
J.W. Fritz 1,306,326.3770 27,478.3120
J.E. Garten 1,306,326.3770 27,478.3120
J.S. Pasman 1,306,326.3770 27,478.3120
W.W. Priest 1,306,326.3770 27,478.3120
S.N. Rappaport 1,306,326.3770 27,478.3120
A.M. Reichman 1,306,326.3770 27,478.3120
A.B. Trowbridge 1,306,326.3770 27,478.3120
50
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
11. RESULTS OF SPECIAL MEETING OF SHAREHOLDERS (CONT'D)
EMERGING MARKETS PORTFOLIO FOR WITHELD
-------------------------- ------------ -----------
R.H. Francis 375,617.5988 14,205.8252
J.W. Fritz 375,617.5988 14,205.8252
J.E. Garten 375,617.5988 14,205.8252
J.S. Pasman 375,617.5988 14,205.8252
W.W. Priest 375,617.5988 14,205.8252
S.N. Rappaport 375,617.5988 14,205.8252
A.M. Reichman 375,617.5988 14,205.8252
A.B. Trowbridge 375,617.5988 14,205.8252
3. To ratify the selection of PricewaterhouseCoopers LLP as the independent
accountants for the Trust.
<TABLE>
<CAPTION>
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
INTERNATIONAL EQUITY PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ --------------- -------------------- --------------------
<S> <C> <C> <C>
For 30,885,819.9407 93.9847% 94.7255%
Against 255,501.3069 0.7775% 0.7836%
Abstain 1,464,286.9926 4.4558% 4.4909%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
SMALL COMPANY GROWTH PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ --------------- -------------------- --------------------
For 39,202,501.1764 88.8443% 91.4408%
Against 621,952.9131 1.4095% 1.4507%
Abstain 3,047,542.7482 6.9066% 7.1085%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
POST-VENTURE CAPITAL PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ ---------------- -------------------- --------------------
For 4,882,639.7840 94.3669% 95.1950%
Against 47,900.9667 0.9258% 0.9339%
Abstain 198,549.7314 3.8374% 3.8711%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
GROWTH & INCOME PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------- ---------------- -------------------- --------------------
For 1,246,228.9910 89.7043% 93.4341%
Against 16,300.8250 1.1733% 1.2221%
Abstain 71,274.8730 5.1304% 5.3437%
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
EMERGING MARKETS PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
-------------------------- ---------------- -------------------- --------------------
For 372,886.5090 95.6503% 95.6552%
Against 3,300.5910 0.8466% 0.8467%
Abstain 13,636.3240 3.4979% 3.4981%
</TABLE>
4. To approve a new sub-investment advisory agreement between each portfolio,
CSAM and the portfolio's sub-investment adviser.
<TABLE>
<CAPTION>
% OF SHARES TO TOTAL % OF SHARES TO TOTAL
POST-VENTURE CAPITAL PORTFOLIO SHARES OUTSTANDING SHARES SHARES VOTED
------------------------------ -------------- -------------------- --------------------
<S> <C> <C> <C>
For 4,626,424.3676 89.4150% 90.1997%
Against 133,767.3892 2.5853% 2.6080%
Abstain 368,898.7262 7.1297% 7.1923%
</TABLE>
51
<PAGE>
WARBURG PINCUS TRUST
NOTES TO FINANCIAL STATEMENTS (CONT'D)
June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
12. YEAR 2000 COMPLIANCE
Many services provided to the portfolios and their shareholders by CSAM and
certain of its affiliates (CSAMService Providers) and the portfolios' other
service providers rely on the functioning of their respective computer systems.
Many computer systems cannot distinguish the year 2000 from the year 1900,
resulting in potential difficulty in performing various calculations (Year 2000
Issue). The Year 2000 could potentially have an adverse impact on the handling
of security trades, the payment of interest and dividends, pricing, account
services and other portfolio operations. It has been reported that foreign
institutions have made less progress in addressing the Year 2000 Issue than
major U.S. entities, which could adversely affect the portfolios' foreign
investments.
The CSAM Service Providers recognize the importance of the Year 2000 Issue
and are taking appropriate steps necessary in preparation for the year 2000. The
CSAM Service Providers anticipate that their systems and those of the
portfolios' other service providers will be adapted in time for the Year 2000.
The CSAM Service Providers have completed mission critical systems testing and
have participated in industry-wide testing programs. In addition, the CSAM
Service Providers are formulating a contingency plan to address the Year 2000
Issue and anticipate completion of the plan by the end of the third quarter of
1999. The CSAM Service Providers have also completed investigations of material
operations of the portfolios' other major service providers. The CSAM Service
providers continue to monitor the Year 2000 Issue and its potential impact on
the portfolios. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the portfolios nor can there be any
assurance that the Year 2000 Issue will not have an adverse effect on the
portfolios' investments or on global markets or economics, generally.
52
<PAGE>
[GRAPHIC OMITTED]
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CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. TREQF-3-0699
