N-30D 1 a2061761zn-30d.txt N-30D CREDIT SUISSE WARBURG PINCUS FUNDS ---------------------------------- CREDIT ASSET SUISSE MANAGEMENT ANNUAL REPORT AUGUST 31, 2001 CREDIT SUISSE WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND - CREDIT SUISSE WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND - CREDIT SUISSE WARBURG PINCUS GLOBAL NEW TECHNOLOGIES FUND - CREDIT SUISSE WARBURG PINCUS GLOBAL FINANCIAL SERVICES FUND - CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY FUND - CREDIT SUISSE WARBURG PINCUS FOCUS FUND - CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND More complete information about the Funds, including charges and expenses, is provided in the PROSPECTUS, which must precede or accompany this document and which should be read carefully before investing. You may obtain additional copies by calling 800-WARBURG (800-927-2874) or by writing to Credit Suisse Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030. Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466 Lexington Ave., New York, NY 10017-3147. Credit Suisse Warburg Pincus Funds are advised by Credit Suisse Asset Management, LLC. THE FUNDS' INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY WAIVE SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD BE LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE. RETURNS 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 FUNDS' MANAGEMENT ARE AS OF THE DATE OF THE LETTERS AND THE PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF AUGUST 31, 2001; THESE VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES. FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET MANAGEMENT, LLC ("CSAM") OR ANY AFFILIATE, ARE NOT FDIC-INSURED AND ARE NOT GUARANTEED BY CSAMOR ANY AFFILIATE. CREDIT SUISSE WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholders: We are writing to report on the results of the Credit Suisse Warburg Pincus Global Telecommunications Fund(1,2) (the "Fund") for the fiscal year ended August 31, 2001. Please note that we will discuss the impact of the events of September 11, 2001 on the Fund's investment environment and performance in our letter for the calendar quarter ended September 30, 2001. COMMON SHARES: At August 31, 2001, the net asset value ("NAV") of the Fund's Common shares was $29.11, compared to an NAV of $69.11 on August 31, 2000. As a result, the Common shares' total return was -55.72%, assuming the reinvestment of distributions totaling $2.3906 per share. By comparison, the Morgan Stanley Capital International All Country World Free Telecommunications Services Index (the "Index")(3) was down 41.58% during the same period. ADVISER SHARES: At August 31, 2001, the NAV of the Fund's Advisor shares was $29.09, compared to an NAV of $39.86 on May 10, 2001(4). As a result, the Advisor shares' total return was -27.02%. By comparison, the Index returned -22.08% during the same period. [The Fund's performance is considerably more favorable in the context of how its peers fared. Lipper Inc.'s Telecommunications Fund Average Index(5) of 41 U.S.-based telecommunications funds, for example, was down 60.0% during the same period. When evaluating the Fund's results, furthermore, we urge our investors to keep in mind that the types of stocks in which the Fund invests can be highly volatile. We thus recommend that an investment in the Fund be made with a long-term perspective and a willingness to endure short-term fluctuation.] The Fund underperformed its Index primarily because we held to our discipline of diversifying the portfolio among the various subcategories of the global telecommunications equity universe. This same discipline has played a direct role in the Fund's substantial outperformance of the benchmark since the Fund's inception in 1996. Although the benchmark mostly consists of established fixed-line telecom carriers known as "incumbents," we aim to spread the Fund's assets across other telecom subcategories as well, so as to potentially add value and portfolio diversification benefits. Unfortunately, the harsh correction that occurred throughout the fiscal year often focused on precisely the subcategories into which we had diversified. This proved especially painful in much of 2001, when heavy selling moved beyond the battered technology sector, which was meaningfully represented 1 in the portfolio, and into telecom-related media names that we also owned. Somewhat ironically, the broadening of the correction process additionally meant that shares of the world's major incumbents--which we had de-emphasized for their relatively unattractive growth prospects--ended up faring much better than did those in other telecom subcategories. On a geographical level, relative results were lowest in the U.S., which we significantly overweighted compared to the benchmark for two compelling reasons. First, the U.S. was holding up best among the world's largest economies amidst a global macroeconomic slowdown and thus appeared likeliest to us to enjoy an acceleration in growth when the macroeconomic picture began to improve. Second, the sheer size and breadth of the U.S. market gave us the best and most numerous opportunities for portfolio diversification. These same prospective benefits worked against us, however, when U.S. macroeconomic growth began to sputter, which had a correspondingly adverse impact on actual and estimated corporate earnings worldwide. The Fund's overall return suffered accordingly. The most positive contributions to performance came from our underweightings of the French and German markets, in which stocks of the respective incumbents were badly weakened, and our occasional willingness to keep cash reserves at what we felt were prudently defensive levels. Thank you for your support, and please feel free to call upon us at any time if you have questions. Sincerely yours, The Credit Suisse Asset Management Global Telecommunications Management Team Scott T. Lewis, Managing Director Vincent J. McBride, Managing Director David Lefkowitz, Vice President Credit Suisse Asset Management, LLC (CSAM) [NOTE: INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN TELECOMMUNICATIONS, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN INVESTMENT IN OTHER MUTUAL FUNDS THAT SEEK CAPITAL APPRECIATION BY INVESTING IN A BROADER MIX OF ISSUES. MORE INFORMATION ABOUT THE FUND, INCLUDING CHARGES AND EXPENSES AND THE SPECIAL RISK CONSIDERATIONS ASSOCIATED WITH A SINGLE-INDUSTRY FUND, IS PROVIDED IN THE PROSPECTUS.] 2 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND(1,2) COMMON SHARES AND THE MSCI ALL COUNTRY WORLD FREE TELECOMMUNICATIONS SERVICES INDEX (GROSS DIVIDENDS)(3) FROM INCEPTION (12/4/96) AND AT EACH QUARTER END. (UNAUDITED) [CHART]
TELECOMMUNICATIONS MSCI ALL CREDIT SUISSE WARBURG PINCUS COUNTRY WORLD FREE GLOBAL TELECOMMUNICATIONS FUNDS(1),(2) SERVICES INDEX (GROSS DIVIDENDS)(3) 12/4/1996 $10,000 $10,000 12/96 $9,987 $10,263 1/97 $10,827 $10,504 2/97 $10,787 $10,714 3/97 $10,327 $10,436 4/97 $10,740 $10,641 5/97 $11,460 $11,403 6/97 $12,060 $11,928 7/97 $12,193 $12,178 8/97 $11,533 $11,214 9/97 $12,847 $12,044 10/97 $12,373 $11,600 11/97 $12,860 $12,323 12/97 $13,215 $12,854 1/98 $13,496 $13,395 2/98 $15,179 $13,980 3/98 $16,974 $15,236 4/98 $17,115 $15,068 5/98 $16,665 $14,944 6/98 $17,728 $15,460 7/98 $18,481 $16,411 8/98 $14,461 $14,574 9/98 $15,552 $14,967 10/98 $17,165 $16,046 11/98 $19,460 $16,814 12/98 $22,125 $18,481 1/99 $25,160 $20,158 2/99 $24,138 $19,969 3/99 $27,313 $19,611 4/99 $29,179 $20,391 5/99 $28,188 $20,441 6/99 $31,255 $21,336 7/99 $31,527 $21,223 8/99 $31,921 $19,962 9/99 $33,571 $20,386 10/99 $38,039 $21,915 11/99 $45,320 $24,506 12/99 $56,677 $27,001 1/00 $56,116 $26,222 2/00 $65,280 $27,737 3/00 $65,097 $28,435 4/00 $55,925 $25,125 5/00 $50,864 $23,336 6/00 $55,620 $23,169 7/00 $52,833 $21,592 8/00 $54,587 $20,355 9/00 $48,539 $19,005 10/00 $45,796 $19,264 11/00 $35,822 $16,616 12/00 $35,009 $16,192 1/01 $41,163 $17,781 2/01 $34,120 $15,025 3/01 $29,378 $14,181 4/01 $32,965 $15,261 5/01 $31,745 $14,086 6/01 $29,767 $13,160 7/01 $27,499 $13,312 8/01 $24,169 $11,891
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR (55.72%) 3 YEAR 18.67% FROM INCEPTION (12/4/96) 20.44% Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus Global Telecommunications Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (3) The Morgan Stanley Capital International All Country World Free Telecommunications Services Index (gross dividends) (the "MSCI All Country Index") is an unmanaged regional or composite index (with no defined investment objective) consisting of developed and emerging markets that include constituents as available to non-domestic investors for the Telecommunication Services sector and is compiled by Morgan Stanley & Co., Incorporated. The MSCI All Country Index replaced the Fund's previous performance benchmark as of July 1, 2001 because Morgan Stanley & Co., Incorporated was no longer compiling the previous performance benchmark as of that date. (4) Inception date. (5) Lipper Inc.'s Telecommunications Fund Average Index is a nationally recognized organization that reports on mutual fund total return performance and calculates fund rankings. The Lipper Telecommunications Fund Average Index is the average total return of 41 telecommunications-oriented mutual funds during a given period. 3 CREDIT SUISSE WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholder: For the 12 months ended August 31, 2001, the Common Class shares of Credit Suisse Warburg Pincus Global Health Sciences Fund(1,2) (the "Fund") had a loss of 14.44%, vs. losses of 2.43% and 24.39%, respectively, for the MSCI World Healthcare Index(3) and the S&P 500 Index.(4) The period was a poor one for stocks globally. The U.S. and global economies slowed dramatically, hampering corporate profits and lowering investor expectations across a range of industries. Technology and growth-oriented companies were especially hurt by the uncertainty. Health-care stocks were not spared the market's decline, though certain "defensive" names--e.g., specific large-cap drug stocks--held up relatively well. The Fund had a loss for the 12 months, hindered by the difficult backdrop for stocks and by weakness in a number of its growth shares. The Fund's smaller-cap pharmaceutical holdings, e.g., specialty drug and biotech-related drug companies, contributed negatively to its return, reflecting investors' strong aversion to risk in all forms during the period. On a positive note, the Fund outperformed the broader equity market (as measured by the S&P 500 Index, for example), helped by good showings from some of its health-care services names. We made no dramatic changes to the Fund in terms of basic strategy. We maintained what we believe is a relatively diversified approach to health care, with meaningful exposure to large-cap drug companies, smaller and specialty pharmaceutical companies, biotechnology names, and health-care-services providers, as well as manufacturers of health-care products (ranging from laboratory equipment to stents). While this approach hampered the Fund's return relative to that of its MSCI benchmark, which has less exposure to smaller-cap growth companies, we believe it stands to benefit investors over time. In terms of sector allocation, about a quarter of the portfolio's assets was invested in large-cap pharmaceutical stocks as of the end of the period. We continue to look favorably on the group's long-term prospects. While the regulatory backdrop here is somewhat clouded, business fundamentals remain, on the whole, sound in our view. The earnings outlook varies by company, but we believe that a number of major drug names have good potential for sustainable, healthy profit growth, even assuming a delayed economic recovery. In addition, valuations on large-cap drug stocks have become generally quite reasonable, in our judgment. We also maintained a significant position in the smaller-cap pharmaceutical and biotechnology drug areas. We believe that such companies could likewise benefit from a more-hospitable regulatory/political environment over the longer term. Our focus will remain on companies that we believe have viable products, or that have business plans that we expect to eventually result in the launch of new, viable products. 4 Elsewhere of note, we continued to favor hospitals in the services group, at the expense of managed-care companies. We believe that certain hospitals could continue to benefit from rising volumes and from higher "reimbursement" rates from the government. Our approach to managed-care companies remained highly selective. We intend to limit our exposure here over the intermediate term, due to such factors as potentially declining enrollment rates (in a soft economy) and uncertainty surrounding the right of patients to sue these companies. Going forward, there is obviously much uncertainty, given the still-fragile state of global markets and given the terrible events of September 11, 2001. Please note that we will discuss the impact of the attacks and their aftermath on the Fund's investment environment and performance in our commentary for the calendar quarter ended September 30, 2001. But we believe that the U.S. economy, which has proven very resilient in times past, will in due course recover, to the benefit of economies and markets elsewhere. We furthermore believe that health care remains compelling as an asset class over the long term, based on factors such as favorable worldwide demographic trends (over the next decade at least) and a high degree of innovation at many levels. Our efforts will remain concentrated on attempting to identify stocks we deem to have the brightest long-term prospects. Sincerely yours, Peter T. Wen Susan L. Black Co-Portfolio Manager Co-Portfolio Manager Credit Suisse Asset Management, LLC(CSAM) INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN THE HEALTH SCIENCES, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN INVESTMENT IN OTHER MUTUAL FUNDS THAT SEEK CAPITAL APPRECIATION BY INVESTING IN A BROADER MIX OF ISSUERS. 5 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND(1,2) COMMON SHARES, THE MSCI WORLD HEALTHCARE INDEX(3), THE S&P 500(4) INDEX AND LIPPER HEALTH/BIOTECHNOLOGY FUNDS INDEX(5) FROM INCEPTION (12/31/96) AND AT EACH QUARTER END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS GLOBAL MSCI WORLD LIPPER HEALTHCARE/ HEALTH SCIENCE HEALTHCARE S&P 500 BIOTECHNOLOGY FUND(1,2) INDEX(3) INDEX(4) FUNDS INDEX(5) $10,000 $10,000 $10,000 $10,000 1/97 $10,330 $10,712 $10,624 $10,511 2/97 $10,220 $10,919 $10,707 $10,546 3/97 $9,620 $10,648 $10,269 $9,748 4/97 $9,820 $11,312 $10,881 $9,749 5/97 $10,530 $11,902 $11,542 $10,728 6/97 $11,330 $12,984 $12,059 $11,270 7/97 $11,760 $13,293 $13,017 $11,637 8/97 $11,260 $12,110 $12,289 $11,324 9/97 $12,020 $12,903 $12,961 $12,233 10/97 $12,220 $12,844 $12,529 $11,926 11/97 $12,710 $13,203 $13,108 $12,014 12/97 $12,735 $13,711 $13,334 $12,070 1/98 $13,235 $14,768 $13,481 $12,321 2/98 $14,233 $15,588 $14,452 $13,012 3/98 $14,827 $15,770 $15,192 $13,502 4/98 $15,231 $15,894 $15,345 $13,600 5/98 $14,870 $15,550 $15,081 $13,204 6/98 $15,539 $16,346 $15,694 $13,587 7/98 $15,135 $16,360 $15,527 $13,435 8/98 $13,064 $15,010 $13,283 $11,474 9/98 $14,551 $16,084 $14,134 $12,881 10/98 $15,305 $17,016 $15,283 $13,373 11/98 $16,081 $17,889 $16,209 $14,064 12/98 $16,962 $18,701 $17,143 $15,209 1/99 $16,782 $18,558 $17,860 $15,458 2/99 $16,368 $18,430 $17,305 $15,057 3/99 $16,389 $18,724 $17,997 $15,443 4/99 $15,275 $17,486 $18,694 $14,694 5/99 $15,466 $17,073 $18,252 $14,615 6/99 $16,188 $17,455 $19,265 $15,325 7/99 $15,911 $16,832 $18,664 $15,343 8/99 $16,517 $17,361 $18,570 $15,763 9/99 $15,369 $16,619 $18,062 $14,625 10/99 $15,847 $18,085 $19,205 $15,319 11/99 $16,432 $18,067 $19,595 $15,964 12/99 $18,047 $16,768 $20,747 $16,783 1/00 $19,460 $16,768 $19,705 $17,981 2/00 $22,701 $15,589 $19,333 $20,473 3/00 $19,450 $16,822 $21,224 $18,365 4/00 $18,472 $17,586 $20,586 $18,178 5/00 $17,993 $18,103 $20,163 $18,507 6/00 $21,860 $19,488 $20,661 $21,668 7/00 $22,061 $18,695 $20,338 $20,998 8/00 $25,438 $18,678 $21,600 $22,882 9/00 $26,978 $19,518 $20,460 $23,885 10/00 $25,553 $19,752 $20,373 $23,589 11/00 $23,992 $20,591 $18,767 $22,865 12/00 $25,064 $21,137 $18,859 $24,113 1/01 $22,615 $19,432 $19,528 $26,105 2/01 $21,415 $19,507 $17,748 $25,841 3/01 $18,956 $18,241 $16,623 $22,903 4/01 $21,242 $18,588 $17,915 $24,680 5/01 $22,398 $18,751 $18,035 $25,612 6/01 $23,159 $18,180 $17,596 $25,936 7/01 $22,085 $18,891 $17,423 $25,138 8/01 $21,762 $18,224 $16,332 $24,797
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR (14.44%) 3 YEAR 18.55% FROM INCEPTION (12/31/96) 18.11% Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus Global Health Sciences Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (3) In light of the Fund's emphasis on global health-care stocks, effective May 1, 2001, the Fund added the MSCI World Healthcare Index as a performance benchmark, replacing the Lipper Health/Biotechnology Funds Index. (The Lipper Health/Biotechnology Index had a loss of 8.18% for the 12 months ended August 31, 2001.) The MSCI World Healthcare Index is a sector level index based on global industry classification standards (GICS), and consists of all securities in the developed markets that are classified into the healthcare sector. (4) 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. (5) The Lipper Health/Biotechnology Funds Index is an equal-weighted performance index, adjusted for capital-gain distributions and income dividends, of the largest qualifying funds in this investment objective, and is compiled by Lipper Inc. 6 CREDIT SUISSE WARBURG PINCUS GLOBAL NEW TECHNOLOGIES FUND PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholder: Credit Suisse Warburg Pincus Global New Technologies Fund(1) (the "Fund") had a loss of 35.20% for the period from December 22, 2000 (the Fund's inception date) through August 31, 2001. By means of comparison, the S&P 500 Index(2) and the MSCI World Index(3)--two broad measures of equity performance--had losses of 13.38% and 17.35%, respectively, for the period from December 31, 2000 through August 31, 2001. The Fund continued to operate within a very harsh environment for the stocks it targets. While selling pressure on equities was broad-based, as the numbers above indicate, technology shares led the decline, reflecting investors' strong aversion to these stocks amid global economic weakness and slumping technology expenditures. For our part, we continued to attempt to identify companies that have what we believe are good long-term business prospects and reasonable stock valuations. Whether looking at young or well-established firms, we placed, and will continue to place, an emphasis on factors such as experienced management teams, innovative products and services, and probable financial health to support long-term business plans. In terms of portfolio allocation, we maintained meaningful exposure to the semiconductor, software, media, telecommunications and Internet industries on a global basis. Our geographic bias was toward the U.S., although we held a number of Japanese stocks that in our view had attractive valuations compared to their historical valuation levels, as well as compared to valuations on technology stocks elsewhere. We saw few compelling buying opportunities in Europe; however, we are monitoring the region closely. 7 Notwithstanding recent performance, and the turmoil that has haunted technology stocks over the past 18 months, we believe that technology remains a critical piece of global economies. A recovery in the group might take some time, and the terrible events of September 11, 2001 and their aftermath have only added to the uncertainty. But we remain positive on these equities from a long-term perspective, and will continue to concentrate on companies we deem to have the brightest prospects over time. Sincerely yours, Todd Jacobson Scott Lewis Co-Portfolio Manager Co-Portfolio Manager Credit Suisse Asset Management, LLC (CSAM) INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN TECHNOLOGY, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN INVESTMENT IN OTHER MUTUAL FUNDS THAT SEEK CAPITAL APPRECIATION BY INVESTING IN A BROADER MIX OF ISSUERS. 8 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS GLOBAL NEW TECHNOLOGIES FUND(1) COMMON SHARES, MSCI WORLD INDEX(3) AND THE S&P 500 INDEX(2) FROM INCEPTION (12/22/00) AND AT EACH MONTH END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS GLOBAL NEW TECHNOLOGIES FUND(1) MSCI WORLD INDEX(3) S&P 500 INDEX(2) 12/22/2000 $10,000 $10,000 $10,000 12/00 $9,902 $10,546 $10,049 1/01 $10,598 $11,417 $10,405 2/01 $8,628 $11,302 $9,457 3/01 $7,863 $10,016 $8,858 4/01 $8,658 $10,794 $9,546 5/01 $8,413 $11,201 $9,610 6/01 $8,217 $11,343 $9,376 7/01 $7,393 $10,994 $9,284 8/01 $6,482 $10,450 $8,703
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) FROM INCEPTION (12/22/00) (35.20%) Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (2) 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. (3) The MSCI World Index is an unmanaged index (with no defined investment objective) of common stocks, and is a market-weighted average of the performance of securities listed on the stock exchanges of all developed countries. 9 CREDIT SUISSE WARBURG PINCUS GLOBAL FINANCIAL SERVICES FUND PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholder: We are writing to report the performance of Credit Suisse Warburg Pincus Global Financial Services Fund(1) (the "Fund") for the fiscal year ended August 31, 2001. For the period from December 28, 2000 (the Fund's inception date) through August 31, 2001, the Fund had a loss of 12.60%. By comparison, the MSCI All Country World Free Index Industry Sector(2) and the S&P 500 Index(3) had a same-period loss of 14.61% and 13.40%, respectively. The Fund's loss reflected a poor environment for stocks globally, with major economies weakening and corporate profits softening. On a positive note, the Fund outperformed its benchmark, a showing we attribute primarily to our global security allocation, our portfolio themes and the favorable stock-picking of our global analyst team. In the area of global security allocation, the Fund benefited from having an overweight position in the U.S., though this was partially offset by a slight overweight position in Japan. We had an underweight position in Europe, which was beneficial, as the region's central banks were more hesitant to decrease interest rates. In addition to the weaker relative performance of European financial shares, the stronger dollar against most foreign currencies caused dollar returns to be even lower. The key theme in the Fund's portfolio has been a focus on value-oriented stocks of companies we believe have strong balance sheets. Given the slowing pace of the global economy, we have been cautious with respect to firms with significant capital-markets exposure and concentration in consumer credit. We chose, instead, to be overweight in both the insurance and reinsurance sectors as well as banks that we believe have significant commercial credit exposure, reasonable valuations, and above-average growth prospects for the group. We also adopted a focused portfolio strategy to exploit the best ideas of our global analytical team and held just 36 names in the portfolio as of August 31, 2001. The clear winners in the portfolio for the period were U.S. commercial banks, which have benefited from the pace and magnitude of Federal Reserve Bank rate cuts, the strong U.S. housing market and low beginning valuations. The best performing stock in the Fund was Bank of America (which accounted for 5.6% of the portfolio as of August 31). We also held large positions in Fleet Boston (3.9%), PNC Financial (3.9%) and Wells Fargo (3.9%), holdings that proved fairly defensive in a difficult market environment. 10 The Fund's laggards included Japanese banking concerns UFJ Holdings (5.1%) and Mitsubishi Tokyo Financial Group (4.1%), which continue to struggle with both credit and equity market deterioration. Also, the U.S. insurance sector has taken somewhat of a breather after strong performance in 2000, but we believe that specific companies are poised to benefit from increases in insurance rates well in excess of claims inflation. Going forward, our approach to investing in the global financial sector is expected to remain similar but will continue to be responsive to changing economic, political and market conditions. While the probability of a U.S. and potential global recession has increased, with the terrible events of September 11, 2001 adding to the uncertainty, we believe our slightly defensive portfolio is well positioned to outperform our benchmark. As developments occur that we believe would interest our shareholders, we will do our best to keep you informed. Alternatively, we are available to respond to any questions you may have about your portfolio. Sincerely yours, Craig K. Elkind Katharine O'Donovan Co-Portfolio Manager Co-Portfolio Manager D. Susan Everly Co-Portfolio Manager Credit Suisse Asset Management, LLC (CSAM) INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN FINANCIAL SERVICES, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN INVESTMENT IN OTHER MUTUAL FUNDS THAT SEEK CAPITAL APPRECIATION BY INVESTING IN A BROADER MIX OF ISSUERS. 11 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS GLOBAL FINANCIAL SERVICES FUND(1) COMMON SHARES, MSCI ALL COUNTRY WORLD FREE INDEX INDUSTRY SECTOR,(2) AND THE S&P 500 INDEX(3) FROM INCEPTION (12/28/00) AND AT EACH MONTH END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS MSCI ALL COUNTRY WORLD FREE GLOBAL FINANCIAL SERVICES FUND(1) INDEX INDUSTRY SECTOR(2) S&P 500 INDEX(3) 12/28/2000 $10,000 $10,000 $10,000 12/00 $9,870 $10,000 $10,049 1/01 $9,860 $9,899 $10,405 2/01 $9,210 $9,575 $9,457 3/01 $8,690 $8,835 $8,858 4/01 $8,990 $9,689 $9,546 5/01 $9,110 $9,738 $9,610 6/01 $9,200 $9,305 $9,376 7/01 $8,780 $8,916 $9,284 8/01 $8,740 $8,539 $8,703
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) FROM INCEPTION (12/28/00) (12.60%) Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (2) The MSCI All Country World Free Index Industry Sector is an unmanaged index (with no defined investment objective) of common stocks, and is a market-weighted average of industrial equities listed on the stock exchanges of both developed and emerging countries. (3) 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. 12 CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY FUND PORTFOLIO MANAGER'S LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholder: For the 12 months ended August 31, 2001, the Common Class shares of Credit Suisse Warburg Pincus European Equity Fund(1,2) (the "Fund") had a loss of 18.08%, vs. a loss of 21.09% for the Morgan Stanley Capital International Europe Index.(3) The period was a poor one for equity markets around the world, reflecting economic slowdowns in North America, Japan and Europe, and a related slump in profits. The significant slowdown in Europe was noteworthy, as it dispelled the notion that the region might avoid catching the U.S.'s economic cold: the vast majority of Europe's trade volume is intra-regional. Evidence of Europe's economic woes mounted nonetheless, and stocks declined accordingly. Despite a downward trend in interest rates--paced by the U.S. Federal Reserve (the "Fed"), which aggressively lowered rates beginning in January--the intermediate-term earnings outlook remained bleak and investors were cautious. Technology and telecommunications shares were hit especially hard in most markets. The Fund's loss reflected the negative environment for Europe's equity markets. However, the Fund outperformed its benchmark, aided by its underweighting in the struggling technology segment and by good showings from certain of the Fund's financial-services, pharmaceutical and energy holdings. Our strategy through the period was to focus on companies that we deemed to have attractive stock multiples and visible earnings streams. We found a number of these companies within generally less-economically sensitive areas such as health care, financial services and the consumer sector. We also had significant exposure to industrial-type companies, broadly defined and with varying degrees of cyclicality. As noted, we largely avoided technology and telecommunications names, though on occasion we owned shares we judged to be valued very pessimistically. As we go forward, the environment will no doubt remain challenging--as yet, there is little evidence of a sustained upturn in economic activity, and the recent terrible events of September 11 and their aftermath have compounded the uncertainty. (Please note that we will discuss the impact of the events of September 11, 2001 on the Fund's investment environment and performance in our commentary for the calendar quarter ended September 30, 2001.) However, we believe that the Fed's aggressive easing will in due course bear 13 fruit. Other grounds for optimism, looking out over the longer term, include the European Central Bank's 50-basis-point rate reduction since the end of the period, a recent decline in energy costs and tax cuts within the U.S. and Europe. Our efforts will remain focused on identifying companies we deem to be attractively valued, based on the health of their balance sheets and on their earnings prospects. Sincerely yours, Nancy Nierman Portfolio Manager Credit Suisse Asset Management, LLC(CSAM) INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES IN EUROPE, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN INVESTMENT IN A MORE GEOGRAPHICALLY DIVERSIFIED EQUITY FUND. 14 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY(1,2) COMMON SHARES AND THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE INDEX (THE "MSCI EUROPE INDEX")(3) FROM INCEPTION (1/28/99) AND AT EACH QUARTER END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY FUND(1,2) MSCI EUROPE INDEX(3) $10,000 $10,000 1/99 $9,950 $9,938 2/99 $9,560 $9,688 3/99 $9,570 $9,796 4/99 $9,690 $10,091 5/99 $9,110 $9,608 6/99 $9,440 $9,773 7/99 $9,730 $9,866 8/99 $9,790 $9,968 9/99 $9,550 $9,894 10/99 $9,820 $10,261 11/99 $11,040 $10,540 12/99 $12,755 $11,622 1/00 $12,172 $10,797 2/00 $12,935 $11,363 3/00 $12,754 $11,640 4/00 $12,132 $11,129 5/00 $11,981 $11,040 6/00 $12,423 $11,280 7/00 $12,072 $11,101 8/00 $12,002 $10,973 9/00 $11,610 $10,461 10/00 $11,228 $10,384 11/00 $10,757 $9,985 12/00 $11,554 $10,676 1/01 $11,456 $10,693 2/01 $10,814 $9,758 3/01 $10,000 $9,025 4/01 $10,370 $9,657 5/01 $10,098 $9,165 6/01 $9,876 $8,818 7/01 $9,901 $8,850 8/01 $9,839 $8,621
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR (18.08%) FROM INCEPTION (1/28/99) (0.62%) Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus European Equity Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waiver and/or reimbursements may be discontinued at any time. (3) The MSCI Europe Index is a market capitalization-weighted index of 15 European countries. The index is calculated on a total return basis with net dividends reinvested. 15 CREDIT SUISSE WARBURG PINCUS FOCUS FUND PORTFOLIO MANAGER'S LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholder: We are writing to report on the results of the Credit Suisse Warburg Pincus Focus Fund(1,2) (the "Fund") for the fiscal year ended August 31, 2001. Please note that we will discuss the impact of the events of September 11, 2001 on the Fund's investment environment and performance in our letter for the calendar quarter ended September 30, 2001. COMMON SHARES: At August 31, 2001, the net asset value ("NAV") of the Fund's Common shares was $13.39, compared to an NAV of $19.13 on August 31, 2000. As a result, the Common shares' total return was -24.68%, assuming the reinvestment of dividends and distributions totaling $1.2854 per share. By comparison, the Standard & Poor's 500 Index(3) returned -24.39% during the same period. INSTITUTIONAL SHARES: At August 31, 2001, the NAV of the Fund's Institutional shares was $13.50, compared to an NAV of $19.25 on August 31, 2000. As a result, the Institutional shares' total return was -24.46%, assuming the reinvestment of dividends and distributions totaling $1.3107 per share. By comparison, the Standard & Poor's 500 Index(3) returned -24.39% during the same period. The fact that the Fund performed in line with its S&P 500 benchmark reflects our "barbell" positioning of the portfolio, with high-growth names on one end and more defensive holdings on the other. The biggest positives were our allocations to the defensive consumer staples, capital goods and basic materials sectors. - Consumer staples was the portfolio's single biggest sectoral exposure, both in absolute terms and as weighted relative to the S&P 500. We identified several opportunities in companies that offered what we deemed to be a promising mix of attractive valuations and fairly stable operating characteristics in a climate of decelerating macroeconomic growth. Additionally, many of these companies were restructuring in order to improve their operating margins. Fortunately for the Fund's overall return, several of our biggest holdings at August 31--Coca-Cola (approximately 4.6% of total portfolio assets), Clorox (approximately 3.9%), McDonald's (approximately 3.4%) and Philip Morris (approximately 2.5%)--were in this sector and significantly outperformed both the S&P 500 and the S&P 500's consumer staples subcomponent. 16 - We liked basic materials companies for similar reasons and overweighted them versus the benchmark accordingly. - In capital goods, we reaped the twin benefits of effective stock selection and an underweight stance in an underperforming sector. On the negative side, the least favorable results came from our positioning in technology, health care and telecommunications. Valuation concerns had led us to maintain below-benchmark exposure to technology for much of 2000, for example, but we increased our holdings in late 2000 and early 2001 as many tech stocks fell to levels that we felt reflected more realistic earnings expectations. Our timing in this regard proved somewhat premature, however. Tech's subsequent rally in the second quarter of 2001 helped the Fund considerably, but its weakness in July and August did not. Stock selection was the culprit in health care and telecom. In both cases, a handful of poor-performing names negated the comparative strength of the rest of our holdings. As developments occur that we believe would be of interest to you, we will keep you informed. Meanwhile, if you have any questions about your portfolio or the capital markets generally, please feel free to call upon us at any time. Sincerely yours, D. Susan Everly, Director and Portfolio Manager Credit Suisse Asset Management, LLC (CSAM) THE FUND IS PERMITTED TO INVEST A GREATER PROPORTION OF ITS ASSETS IN THE SECURITIES OF A SMALLER NUMBER OF ISSUERS. AS A RESULT, THE FUND MAY BE SUBJECT TO GREATER VOLATILITY WITH RESPECT TO ITS RESPECTIVE PORTFOLIO SECURITIES THAN A FUND MORE BROADLY DIVERSIFIED. 17 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS FOCUS FUND(1,2) COMMON SHARES AND THE S&P 500 INDEX(3) FROM INCEPTION (10/30/98) AND AT EACH QUARTER END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS FOCUS FUND COMMON SHARES(1,2) S&P 500 INDEX(3) 10/98 $10,000 $10,000 11/98 $10,765 $10,606 12/98 $11,220 $11,217 1/99 $11,289 $11,686 2/99 $11,056 $11,323 3/99 $11,634 $11,775 4/99 $12,437 $12,231 5/99 $11,960 $11,943 6/99 $12,744 $12,605 7/99 $12,154 $12,212 8/99 $12,618 $12,151 9/99 $12,285 $11,818 10/99 $12,928 $12,566 11/99 $13,842 $12,821 12/99 $14,290 $13,575 1/00 $13,780 $12,893 2/00 $14,308 $12,650 3/00 $15,567 $13,887 4/00 $15,779 $13,470 5/00 $15,779 $13,193 6/00 $16,104 $13,518 7/00 $15,998 $13,307 8/00 $16,834 $14,133 9/00 $16,641 $13,387 10/00 $16,809 $13,331 11/00 $15,259 $12,280 12/00 $15,074 $12,340 1/01 $15,718 $12,777 2/01 $14,146 $11,612 3/01 $12,839 $10,877 4/01 $13,815 $11,722 5/01 $14,146 $11,801 6/01 $13,890 $11,513 7/01 $13,436 $11,400 8/01 $12,678 $10,686
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR (24.68%) 3 YEARS 15.37% FROM INCEPTION(10/30/98) 8.72% Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus Focus Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (3) The Standard & Poor's 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. 18 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS FOCUS FUND(1,2) INSTITUTIONAL SHARES AND THE S&P 500 INDEX(3) FROM INCEPTION (7/31/98) AND AT EACH QUARTER END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS S&P 500 INDEX(3) FOCUS FUND INSTITUTIONAL SHARES(1,2) $10,000 $10,000 8/98 $8,554 $8,780 9/98 $9,102 $9,400 10/98 $9,843 $10,633 11/98 $10,439 $11,447 12/98 $11,040 $11,936 1/99 $11,502 $12,010 2/99 $11,145 $11,770 3/99 $11,590 $12,392 4/99 $12,039 $13,247 5/99 $11,755 $12,746 6/99 $12,407 $13,581 7/99 $12,020 $12,960 8/99 $11,960 $13,454 9/99 $11,632 $13,107 10/99 $12,368 $13,785 11/99 $12,619 $14,776 12/99 $13,361 $15,253 1/00 $12,691 $14,728 2/00 $12,451 $15,289 3/00 $13,669 $16,636 4/00 $13,258 $16,861 5/00 $12,986 $17,873 6/00 $13,306 $18,239 7/00 $13,098 $18,130 8/00 $13,911 $19,081 9/00 $13,177 $18,864 10/00 $13,121 $19,052 11/00 $12,087 $17,307 12/00 $12,146 $17,093 1/01 $12,577 $17,829 2/01 $11,430 $16,057 3/01 $10,706 $14,573 4/01 $11,538 $15,684 5/01 $11,615 $16,068 6/01 $11,332 $15,769 7/01 $11,221 $16,282 8/01 $10,518 $15,381
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR (24.46%) 3 YEAR 15.72% FROM INCEPTION (7/31/98) 10.47% Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus Focus Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. (3) The Standard & Poor's 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. 19 CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND PORTFOLIO MANAGERS' LETTER -- AUGUST 31, 2001 October 2, 2001 Dear Shareholders: We are writing to report on the results of the Credit Suisse Warburg Pincus Municipal Bond Fund(1,2) (the "Fund") for the fiscal year ended August 31, 2001. Please note that we will discuss the impact of the events of September 11, 2001 on the Fund's investment environment and performance in our letter for the calendar quarter ended September 30, 2001. COMMON SHARES: At August 31, 2001, the net asset value ("NAV") of the Fund's Common shares was $15.30, compared to an NAV of $14.47 on August 31, 2000. As a result, the Common shares' total return was 10.24%, assuming the reinvestment of dividends totaling $0.6187 per share. By comparison, the Lehman Brothers Municipal Bond Index(3) returned 10.18% during the same period. INSTITUTIONAL SHARES: At August 31, 2001, the NAV of the Fund's Institutional shares was $15.30, compared to an NAV of $14.47 on August 31, 2000. As a result, the Institutional shares' total return was 10.53%, assuming the reinvestment of dividends totaling $0.6575 per share. By comparison, the Lehman Brothers Municipal Bond Index(3) returned 10.18% during the same period. We attribute the Fund's slight outperformance of its Lehman Brothers benchmark during the fiscal year primarily to our opportunistic approach to bonds from so-called "specialty states" like California, New York, Florida and Puerto Rico, which proved especially beneficial early in 2001. Buying of municipals--particularly from California and Puerto Rico--was vigorous at the time as a result of two key drivers. The first was the municipal market's "January/July effect" (i.e., in which investors reinvest the cash paid out to them in bond maturations and coupon payments, which are heaviest in January and July); and the second was falling interest rates, which caused investors to buy bonds in anticipation that rates would fall even further. We chose to take advantage of historically high valuations for specialty-state paper by selling into the rally. Although our re-entry into California bonds in mid-March turned out to be premature, our timing was better when we bought them again in July and sold them in August at more attractive prices. 20 Additional positives at different points in the fiscal year included: - An overweight position (i.e., compared to the Lehman Brothers benchmark) in longer-term municipal revenue bonds in the third calendar quarter of 2000; - Exposure to long-term deep-discount issues in the fourth calendar quarter of 2000; and - Exposure to issues with strong call protection in the second calendar quarter of 2001. The most negative contributions to the Fund's overall return came from our efforts to preserve portfolio income by emphasizing intermediate-maturity bonds, which underperformed shorter maturities as short-term interest rates fell, and our longstanding minimal allocation to issues of fairly low credit quality. The latter approach notably detracted from performance in the fiscal year's second half, when investors sought out such issues for their comparatively higher yields as rates continued to decline. As developments occur in the municipal market that we believe would be of interest to you, we will be sure to keep you informed. Meanwhile, if you have questions, please feel free to call upon us at any time. Sincerely yours, Gregg M. Diliberto, Managing Director Patrick A. Bittner, CFA, Vice President CREDIT SUISSE ASSET MANAGEMENT, LLC (CSAM) NOTE: A PORTION OF THE FUND'S INCOME MAY BE SUBJECT TO STATE AND CITY TAXES OR FEDERAL ALTERNATIVE MINIMUM TAX. 21 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND(1,2) COMMON SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX(3) FROM INCEPTION (10/30/98) AND AT EACH QUARTER END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS LEHMAN BROTHERS MUNICIPAL BOND FUND COMMON SHARES(1,2) MUNICIPAL BOND INDEX(3) 10/98 $10,000 $10,000 11/98 $10,076 $10,030 12/98 $10,057 $10,061 1/99 $10,155 $10,215 2/99 $10,086 $10,124 3/99 $10,134 $10,118 4/99 $10,207 $10,145 5/99 $10,108 $10,074 6/99 $9,969 $9,887 7/99 $9,978 $9,953 8/99 $9,879 $9,916 9/99 $9,866 $9,950 10/99 $9,746 $9,880 11/99 $9,868 $9,988 12/99 $9,800 $9,936 1/00 $9,760 $9,895 2/00 $9,902 $9,973 3/00 $10,149 $10,167 4/00 $10,041 $10,116 5/00 $9,968 $10,056 6/00 $10,249 $10,329 7/00 $10,368 $10,472 8/00 $10,544 $10,631 9/00 $10,462 $10,585 10/00 $10,580 $10,694 11/00 $10,670 $10,752 12/00 $10,985 $10,999 1/01 $11,093 $11,195 2/01 $11,103 $11,200 3/01 $11,190 $11,259 4/01 $11,045 $11,122 5/01 $11,162 $11,242 6/01 $11,233 $11,321 7/01 $11,410 $11,438 8/01 $11,627 $11,633
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR 10.24% FROM INCEPTION(10/30/98) 5.46% Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus Municipal Bond Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waiver and/or reimbursements may be discontinued at any time. (3) The Lehman Brothers Municipal Bond Index is an unmanaged index (with no defined investment objective) of municipal bonds and is calculated by Lehman Brothers, Inc. 22 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND(1,2) INSTITUTIONAL SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX(3) FROM INCEPTION (6/20/94), AND AT EACH QUARTER END. (UNAUDITED) [CHART]
CREDIT SUISSE WARBURG PINCUS MUNICIPAL LEHMAN BROTHERS MUNICIPAL BOND FUND INSTITUTIONAL SHARES(1,2) BOND INDEX(3) $10,000 $10,000 6/94 $9,913 $9,957 7/94 $10,040 $10,124 8/94 $10,040 $10,164 9/94 $9,977 $10,027 10/94 $9,849 $9,880 11/94 $9,648 $9,694 12/94 $9,817 $9,868 1/95 $10,099 $10,123 2/95 $10,351 $10,410 3/95 $10,470 $10,551 4/95 $10,498 $10,563 5/95 $10,847 $10,898 6/95 $10,716 $10,830 7/95 $10,772 $10,990 8/95 $10,886 $11,139 9/95 $10,808 $11,211 10/95 $10,986 $11,340 11/95 $11,193 $11,492 12/95 $11,280 $11,562 1/96 $11,290 $11,679 2/96 $11,180 $11,631 3/96 $10,986 $11,487 4/96 $10,877 $11,447 5/96 $10,902 $11,415 6/96 $10,998 $11,523 7/96 $11,120 $11,634 8/96 $11,097 $11,634 9/96 $11,284 $11,754 10/96 $11,398 $11,902 11/96 $11,605 $12,142 12/96 $11,649 $12,088 1/97 $11,690 $12,135 2/97 $11,821 $12,249 3/97 $11,622 $12,085 4/97 $11,731 $12,174 5/97 $11,925 $12,347 6/97 $12,072 $12,510 7/97 $12,452 $12,862 8/97 $12,311 $12,737 9/97 $12,466 $12,899 10/97 $12,550 $12,967 11/97 $12,603 $13,027 12/97 $12,655 $13,233 1/98 $12,787 $13,379 2/98 $12,794 $13,379 3/98 $12,818 $13,369 4/98 $12,794 $13,296 5/98 $12,954 $13,522 6/98 $12,993 $13,572 7/98 $13,037 $13,594 8/98 $13,131 $13,830 9/98 $13,287 $14,035 10/98 $13,250 $14,042 11/98 $13,352 $14,083 12/98 $13,328 $14,128 1/99 $13,467 $14,344 2/99 $13,377 $14,215 3/99 $13,453 $14,208 4/99 $13,544 $14,245 5/99 $13,415 $14,146 6/99 $13,233 $13,883 7/99 $13,247 $13,976 8/99 $13,128 $13,924 9/99 $13,104 $13,971 10/99 $12,947 $13,873 11/99 $13,113 $14,024 12/99 $13,022 $13,951 1/00 $12,964 $13,895 2/00 $13,154 $14,004 3/00 $13,496 $14,276 4/00 $13,354 $14,204 5/00 $13,260 $14,120 6/00 $13,636 $14,504 7/00 $13,798 $14,704 8/00 $14,034 $14,928 9/00 $13,918 $14,864 10/00 $14,079 $15,016 11/00 $14,198 $15,097 12/00 $14,631 $15,444 1/01 $14,778 $15,720 2/01 $14,796 $15,726 3/01 $14,925 $15,810 4/01 $14,734 $15,616 5/01 $14,893 $15,786 6/01 $14,990 $15,896 7/01 $15,230 $16,060 8/01 $15,511 $16,334
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED 8/31/01 (COMMON SHARES) 1 YEAR 10.53% 3 YEAR 5.75% 5 YEAR 6.91% FROM INCEPTION (6/20/94) 6.31% Note: Past performance is not predictive of future performance. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than their original cost. (1) Name changed from Warburg Pincus Municipal Bond Fund effective March 26, 2001. (2) Fee waivers and/or expense reimbursements reduced expenses for the Fund, without which performance would be lower. Waiver and/or reimbursements may be discontinued at any time. (3) The Lehman Brothers Municipal Bond Index is an unmanaged index (with no defined investment objective) of municipal bonds and is calculated by Lehman Brothers, Inc. 23 CREDIT SUISSE WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND SCHEDULE OF INVESTMENTS August 31, 2001
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (98.9%) AUSTRALIA (1.4%) MEDIA (1.2%) News Corp., Ltd. ADR 62,500 $ 1,734,375 ------------ SOFTWARE (0.2%) Open Telecommunications, Ltd.(1) 7,980,161 340,005 ------------ TOTAL AUSTRALIA 2,074,380 ------------ BELGIUM (0.0%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.0%) Telindus Group NV - Strip VVPR(1) 305 1 ------------ TOTAL BELGIUM 1 ------------ BERMUDA (1.7%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.5%) Global Crossing, Ltd. ADR(1) 181,100 766,053 ------------ INDUSTRIAL CONGLOMERATES (1.2%) Tyco International, Ltd. 35,300 1,833,835 ------------ TOTAL BERMUDA 2,599,888 ------------ BRAZIL (0.8%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.2%) Embratel Participacoes SA ADR 86,300 349,515 ------------ WIRELESS TELECOMMUNICATIONS SERVICES (0.6%) Tele Centro Oeste Celular Participacoes SA ADR 145,100 885,110 ------------ TOTAL BRAZIL 1,234,625 ------------ CANADA (1.8%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.8%) AXXENT, Inc. Class B (1),(2) 580,000 0 BCE, Inc. 108,700 2,685,803 ------------ TOTAL CANADA 2,685,803 ------------ DENMARK (2.2%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (2.2%) TDC A/S 90,500 3,279,137 ------------ TOTAL DENMARK 3,279,137 ------------ FINLAND (1.1%) COMMUNICATIONS EQUIPMENT (0.8%) Nokia Oyj ADR 38,300 602,842 Nokia Oyj Class A 37,000 579,102 ------------ 1,181,944 ------------ SOFTWARE (0.3%) Comptel Oyj 128,200 400,603 ------------ TOTAL FINLAND 1,582,547 ------------
See Accompanying Notes to Financial Statements. 24
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) FRANCE (1.0%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.0%) Orange SA(1) 227,100 $ 1,524,507 ------------ TOTAL FRANCE 1,524,507 ------------ HONG KONG (0.6%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.6%) Asia Satellite Telecommunications Holdings, Ltd. 589,033 857,165 ------------ TOTAL HONG KONG 857,165 ------------ ITALY (0.8%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.8%) Olivetti SpA 800,100 1,173,775 ------------ TOTAL ITALY 1,173,775 ------------ JAPAN (5.3%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.0%) Japan Telecom Co., Ltd. 470 1,406,040 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (1.2%) TDK Corp. 34,500 1,797,465 ------------ LEISURE EQUIPMENT & PRODUCTS (1.7%) Sega Corp.(1) 153,900 2,508,939 ------------ WIRELESS TELECOMMUNICATIONS SERVICES (1.4%) NTT DoCoMo, Inc. 167 2,048,892 ------------ TOTAL JAPAN 7,761,336 ------------ MEXICO (2.4%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (2.4%) Telefonos de Mexico SA de CV ADR 97,400 3,551,204 ------------ TOTAL MEXICO 3,551,204 ------------ PORTUGAL (1.7%) WIRELESS TELECOMMUNICATIONS SERVICES (1.7%) Telecel-Comunicacoes Pessoais SA(1) 394,100 2,520,270 ------------ TOTAL PORTUGAL 2,520,270 ------------ SOUTH KOREA (4.5%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.9%) Korea Telecom Corp. ADR 131,400 2,731,806 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS (1.5%) Samsung Electronics Co. 15,200 2,260,743 ------------ WIRELESS TELECOMMUNICATIONS SERVICES (1.1%) SK Telecom Co., Ltd. ADR 82,400 1,580,432 ------------ TOTAL SOUTH KOREA 6,572,981 ------------
See Accompanying Notes to Financial Statements. 25
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) SPAIN (1.7%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.7%) Telefonica SA(1) 97,069 $ 1,126,884 Telefonica SA ADR(1) 38,027 1,340,452 ------------ TOTAL SPAIN 2,467,336 ------------ SWEDEN (0.8%) COMMUNICATIONS EQUIPMENT (0.8%) Telefonaktiebolaget LM Ericsson ADR 235,800 1,174,284 ------------ TOTAL SWEDEN 1,174,284 ------------ TAIWAN (1.5%) SEMICONDUCTOR EQUIPMENT & PRODUCTS (1.5%) United Microelectronics Corp.(1) 1,969,950 2,270,681 ------------ TOTAL TAIWAN 2,270,681 ------------ UNITED KINGDOM (2.8%) DIVERSIFIED FINANCIALS (0.4%) Insignia Solutions, Inc. ADR(1) 275,400 605,880 ------------ INTERNET SOFTWARE & SERVICES (0.3%) NDS Group PLC ADR(1) 19,900 491,928 ------------ WIRELESS TELECOMMUNICATIONS SERVICES (2.1%) Vodafone Group PLC 1,172,600 2,338,702 Vodafone Group PLC ADR 35,400 713,310 ------------ 3,052,012 ------------ TOTAL UNITED KINGDOM 4,149,820 ------------ UNITED STATES (66.8%) COMMERCIAL SERVICES & SUPPLIES (1.5%) Convergys Corp.(1) 60,200 1,689,814 eFunds Corp.(1) 33,800 584,064 ------------ 2,273,878 ------------ COMMUNICATIONS EQUIPMENT (6.2%) Cisco Systems, Inc.(1) 51,200 836,096 Harris Corp. 70,400 2,064,832 L-3 Communications Holdings, Inc.(1) 36,000 2,415,600 Lucent Technologies, Inc. 102,100 696,322 QUALCOMM, Inc.(1) 29,200 1,718,420 Turnstone Systems, Inc.(1) 372,900 1,342,440 ------------ 9,073,710 ------------ COMPUTERS & PERIPHERALS (1.3%) Dell Computer Corp.(1) 44,300 947,134 Gateway, Inc.(1) 107,100 960,687 ------------ 1,907,821 ------------
See Accompanying Notes to Financial Statements. 26
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) DIVERSIFIED TELECOMMUNICATIONS SERVICES (15.0%) ALLTEL Corp. 40,100 $ 2,325,800 AT&T Corp. 39,100 744,464 BellSouth Corp. 84,600 3,155,580 CenturyTel, Inc. 55,400 1,941,770 McLeodUSA, Inc. Class A(1) 247,700 309,625 Qwest Communications International, Inc. 66,200 1,423,300 SBC Communications, Inc. 53,700 2,196,867 Sprint Corp. (FON Group) 70,000 1,633,800 Time Warner Telecom, Inc. Class A(1) 69,600 1,435,152 Verizon Communications, Inc. 49,400 2,470,000 WorldCom, Inc. - WorldCom Group(1) 350,800 4,511,288 ------------ 22,147,646 ------------ ELECTRICAL EQUIPMENT (2.0%) Comverse Technology, Inc.(1) 27,300 686,322 SPX Corp.(1) 19,500 2,266,875 ------------ 2,953,197 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (1.5%) Sanmina Corp.(1) 120,000 2,161,200 ------------ INDUSTRIAL CONGLOMERATES (1.7%) Minnesota Mining & Manufacturing Co. 23,300 2,425,530 ------------ INTERNET SOFTWARE & SERVICES (3.3%) AOL Time Warner, Inc.(1) 81,408 3,040,589 Openwave Systems, Inc.(1) 115,800 1,857,432 ------------ 4,898,021 ------------ MEDIA (12.3%) Adelphia Communications Corp. Class A(1) 29,800 940,190 Cablevision Systems Corp. Class A(1) 15,800 737,860 Clear Channel Communications, Inc.(1) 63,100 3,172,037 Comcast Corp. Special Class (1) 58,100 2,128,203 Gemstar-TV Guide International, Inc.(1) 74,776 2,217,856 Liberty Media Corp. Class (1) 433,200 6,584,640 Viacom, Inc. Class B(1) 55,400 2,348,960 ------------ 18,129,746 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS (4.8%) Agere Systems, Inc. Class A(1) 299,900 1,529,490 Intel Corp. 125,600 3,511,776 Texas Instruments, Inc. 61,600 2,038,960 ------------ 7,080,226 ------------ SOFTWARE (8.5%) Adobe Systems, Inc. 40,900 1,374,649 Electronic Arts, Inc.(1) 27,300 1,575,483 Microsoft Corp.(1) 83,600 4,769,380 Network Associates, Inc.(1) 91,000 1,442,350
See Accompanying Notes to Financial Statements. 27
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) SOFTWARE (cont'd) Oracle Corp.(1) 112,300 $ 1,371,183 Siebel Systems, Inc.(1) 30,800 665,280 VERITAS Software Corp.(1) 47,400 1,361,328 ------------ 12,559,653 ------------ WIRELESS TELECOMMUNICATIONS SERVICES (8.7%) American Tower Corp. Class A 60,000 868,200 AT&T Wireless Services, Inc.(1) 99,336 1,539,708 Nextel Communications, Inc. Class A(1) 98,300 1,187,464 Nextel Partners, Inc. Class A(1) 141,000 1,445,250 Redback Networks, Inc.(1) 105,600 430,848 Sprint Corp. (PCS Group)(1) 111,900 2,795,262 United States Cellular Corp.(1) 25,200 1,304,100 Western Wireless Corp. Class A(1) 103,100 3,188,883 ------------ 12,759,715 ------------ TOTAL UNITED STATES 98,370,343 ------------ TOTAL COMMON STOCKS (Cost $217,663,468) 145,850,083 ------------ RIGHTS/WARRANTS (0.0%) THAILAND (0.0%) DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.0%) Telecomasia Corp. Public Co., Ltd. Rts., expires March 2008(1) 1,599,978 0 UNITED KINGDOM (0.0%) DIVERSIFIED FINANCIALS (0.0%) Insignia Solutions, Inc. Wts., strike $6.00 expires November 2003(1) 137,700 0 TOTAL RIGHTS/WARRANTS (Cost $0) 0 ------------ PAR (000) ------- SHORT-TERM INVESTMENT (2.6%) BBH Grand Cayman U.S. Dollar Time Deposit 2.740% 9/04/01 (Cost $3,840,000) $3,840 3,840,000 ------------ TOTAL INVESTMENTS AT VALUE (101.5%) (Cost $221,503,4683) 149,690,083 LIABILITIES IN EXCESS OF OTHER ASSETS (-1.5%) (2,185,029) ------------ NET ASSETS (100.0%) $147,505,054 ============
INVESTMENT ABBREVIATIONS ADR = American Depository Receipt (1) Non-income producing security. (2) Company filed for bankruptcy 4/23/01. (3) Cost for federal income tax purposes is $222,222,717. See Accompanying Notes to Financial Statements. 28 CREDIT SUISSE WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND SCHEDULE OF INVESTMENTS August 31, 2001
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (89.2%) ISRAEL (0.7%) PHARMACEUTICALS (0.7%) Teva Pharmaceutical Industries, Ltd. ADR 9,600 $ 682,560 ------------ TOTAL ISRAEL 682,560 ------------ SWITZERLAND (1.3%) PHARMACEUTICALS (1.3%) Serono SA 1,400 1,285,073 ------------ TOTAL SWITZERLAND 1,285,073 ------------ UNITED KINGDOM (3.0%) PHARMACEUTICALS (3.0%) AstraZeneca PLC 42,900 2,080,650 Galen Holding PLC 21,500 935,250 ------------ TOTAL UNITED KINGDOM 3,015,900 ------------ UNITED STATES (84.2%) BIOTECHNOLOGY (24.9%) Affymetrix, Inc.(1) 18,800 407,960 Amgen, Inc.(1) 11,900 765,170 Applera Corp-Celera Genomics Group(1) 36,100 958,455 Enzon, Inc.(1) 6,400 408,576 Genentech, Inc.(1) 33,700 1,546,830 Genzyme Corp.(1) 53,500 3,030,240 Gilead Sciences, Inc.(1) 74,900 4,547,179 IDEC Pharmaceuticals Corp.(1) 107,100 6,347,817 Medarex, Inc.(1) 59,400 1,129,788 Medimmune, Inc.(1) 44,200 1,774,630 Millennium Pharmaceuticals, Inc.(1) 18,000 495,000 QLT, Inc.(1) 11,300 219,672 Scios, Inc.(1) 96,900 1,710,285 Sepracor, Inc.(1) 39,300 1,678,110 Titan Pharmaceuticals, Inc.(1) 19,900 194,025 ------------ 25,213,737 ------------ DIVERSIFIED FINANCIALS (1.4%) Express Scripts, Inc. Class A(1) 27,200 1,455,744 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (1.7%) Applera Corp. - Applied Biosystems Group 37,700 942,877 Waters Corp.(1) 25,400 841,502 ------------ 1,784,379 ------------ HEALTHCARE EQUIPMENT & SUPPLIES (5.2%) Alliance Imaging, Inc.(1) 70,600 1,016,640 Baxter International, Inc. 32,000 1,651,200 Curon Medical, Inc.(1) 15,000 35,850 Laboratory Corp. of America Holdings(1) 11,100 864,690 Millipore Corp. 26,400 1,675,080 ------------ 5,243,460 ------------
See Accompanying Notes to Financial Statements. 29
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) HEALTHCARE PROVIDERS & SERVICES (13.7%) Allergan, Inc. 24,400 $ 1,762,900 Cardinal Health, Inc. 30,900 2,253,846 Community Health Care(1) 71,700 2,240,625 HCA - The Healthcare Co. 50,400 2,305,296 Health Management Associates, Inc. Class A(1) 150,000 2,992,500 LifePoint Hospitals, Inc.(1) 50,700 2,169,453 Omnicell, Inc.(1) 11,100 101,898 ------------ 13,826,518 ------------ PHARMACEUTICALS (37.3%) Abbott Laboratories 8,200 407,540 Abgenix, Inc.(1) 22,800 683,316 Array BioPharma, Inc.(1) 54,900 570,960 Celgene Corp.(1) 24,800 689,688 Cubist Pharmaceuticals, Inc.(1) 15,900 658,101 Dynacare, Inc.(1) 90,000 1,217,700 First Horizon Pharmaceutical(1) 43,200 1,559,088 Forest Laboratories, Inc.(1) 24,800 1,810,648 ImmunoGen, Inc.(1) 124,000 1,683,920 Inhale Therapeutic Systems, Inc.(1) 46,600 677,098 Invitrogen Corp.(1) 24,100 1,639,523 IVAX Corp.(1) 86,000 2,894,760 Johnson & Johnson 63,112 3,326,634 King Pharmaceuticals, Inc.(1) 98,249 4,249,269 Mylan Laboratories, Inc. 88,600 2,922,914 NPS Pharmaceuticals(1) 14,800 497,576 OSI Pharmaceuticals, Inc.(1) 17,000 720,800 Pfizer, Inc. 109,125 4,180,579 Pharmacia Corp. 47,397 1,876,921 PRAECIS Pharmaceuticals, Inc.(1) 55,000 572,550 Progenics Pharmaceuticals, Inc.(1) 9,200 165,048 Seattle Genetics, Inc.(1) 89,700 513,084 Specialty Laboratories, Inc.(1) 14,000 442,400 Unilab Corp.(1) 1,300 33,995 Watson Pharmaceuticals, Inc.(1) 37,100 2,081,310 XOMA, Ltd.(1) 139,800 1,602,108 ------------ 37,677,530 ------------ TOTAL UNITED STATES 85,201,368 ------------ TOTAL COMMON STOCKS (Cost $75,364,600) 90,184,901 ------------
See Accompanying Notes to Financial Statements. 30
PAR (000) VALUE -------- ---------- SHORT-TERM INVESTMENT (9.3%) State Street Bank and Trust Co. Euro Time Deposit, 3.500%, 9/04/01 (Cost $9,436,000) $9,436 $ 9,436,000 ------------ TOTAL INVESTMENTS AT VALUE (98.5%) (Cost $84,800,6002) 99,620,901 OTHER ASSETS IN EXCESS OF LIABILITIES (1.5%) 1,479,695 ------------ NET ASSETS (100.0%) $101,100,596 ============
INVESTMENT ABBREVIATIONS ADR = American Depository Receipt (1) Non-income producing security. (2) Cost for federal income tax purposes is $84,812,970. See Accompanying Notes to Financial Statements. 31 CREDIT SUISSE WARBURG PINCUS GLOBAL NEW TECHNOLOGIES FUND SCHEDULE OF INVESTMENTS August 31, 2001
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (86.9%) BERMUDA (2.8%) SEMICONDUCTOR EQUIPMENT & PRODUCTS (2.8%) Marvell Technology Group, Ltd.(1) 2,400 $ 60,120 ------------ TOTAL BERMUDA 60,120 ------------ FINLAND (1.7%) COMMUNICATIONS EQUIPMENT (1.7%) Nokia Oyj ADR 2,300 36,202 ------------ TOTAL FINLAND 36,202 ------------ FRANCE (1.2%) MEDIA (1.2%) Havas Advertising SA 2,750 25,480 ------------ TOTAL FRANCE 25,480 ------------ ISRAEL (1.3%) HEALTHCARE EQUIPMENT & SUPPLIES (1.3%) Card-Guard Scientific Survival, Ltd.(1) 793 28,983 ------------ TOTAL ISRAEL 28,983 ------------ JAPAN (16.7%) COMMUNICATIONS EQUIPMENT (1.3%) Matsushita Communication Industrial Co., Ltd. 800 27,697 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (1.0%) TDK Corp. 400 20,840 ------------ HOUSEHOLD DURABLES (4.1%) BANDAI Co., Ltd. 1,600 45,445 Sharp Corp. 4,000 42,622 ------------ 88,067 ------------ INDUSTRIAL CONGLOMERATES (1.5%) Towa Corp. 3,200 31,596 ------------ LEISURE EQUIPMENT & PRODUCTS (6.2%) Nintendo Co., Ltd. 400 63,697 Sega Corp.(1) 4,400 71,731 ------------ 135,428 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS (1.0%) Rohm Co., Ltd. 200 22,033 ------------ SOFTWARE (1.6%) Konami Corp. 1,100 34,664 ------------ TOTAL JAPAN 360,325 ------------ TAIWAN (2.5%) SEMICONDUCTOR EQUIPMENT & PRODUCTS (2.5%) Taiwan Semiconductor Manufacturing Co., Ltd. ADR(1) 4,200 54,516 ------------ TOTAL TAIWAN 54,516 ------------
See Accompanying Notes to Financial Statements. 32
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) UNITED KINGDOM (0.9%) IT CONSULTING & SERVICES (0.9%) CMG PLC 5,400 $ 19,739 ------------ TOTAL UNITED KINGDOM 19,739 ------------ UNITED STATES (59.8%) COMMUNICATIONS EQUIPMENT (11.2%) Cisco Systems, Inc.(1) 1,500 24,495 Harris Corp. 1,100 32,263 L-3 Communications Holdings, Inc.(1) 500 33,550 QUALCOMM, Inc.(1) 2,600 153,010 ------------ 243,318 ------------ COMPUTERS & PERIPHERALS (5.9%) Brocade Communications Systems, Inc.(1) 800 19,240 Dell Computer Corp.(1) 2,300 49,174 International Business Machines Corp. 600 60,000 ------------ 128,414 ------------ DIVERSIFIED TELECOMMUNICATIONS SERVICES (0.8%) WorldCom, Inc. - WorldCom Group(1) 1,400 18,004 ------------ ELECTRICAL EQUIPMENT (2.0%) Comverse Technology, Inc.(1) 1,700 42,738 ------------ INTERNET SOFTWARE & SERVICES (4.9%) AOL Time Warner, Inc.(1) 1,800 67,230 Openwave Systems, Inc.(1) 2,400 38,496 ------------ 105,726 ------------ IT CONSULTING & SERVICES (0.9%) VeriSign, Inc.(1) 500 20,525 ------------ MACHINERY (1.9%) Kulicke & Soffa Industries, Inc.(1) 2,900 41,789 ------------ MEDIA (9.7%) Adelphia Communications Corp. Class A(1) 1,000 31,550 Comcast Corp. Special Class A(1) 2,400 87,912 Gemstar-TV Guide International, Inc.(1) 1,000 29,660 Liberty Media Corp. Series A(1) 4,000 60,800 ------------ 209,922 ------------ MISCELLANEOUS (1.7%) Nasdaq-100 Shares(1) 1,000 36,630 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS (9.8%) Agere Systems, Inc. Class A(1) 4,500 22,950 Intel Corp. 3,100 86,676 Novellus Systems, Inc.(1) 600 26,586
See Accompanying Notes to Financial Statements. 33
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) SEMICONDUCTOR EQUIPMENT & PRODUCTS (cont'd) RF Micro Devices, Inc.(1) 2,100 $ 53,466 Teradyne, Inc.(1) 700 22,946 ------------ 212,624 ------------ SOFTWARE (11.0%) Microsoft Corp.(1) 2,000 114,100 Oracle Corp.(1) 2,700 32,967 Peregrine Systems, Inc.(1) 2,400 62,832 VERITAS Software Corp.(1) 1,000 28,720 ------------ 238,619 ------------ TOTAL UNITED STATES 1,298,309 ------------ TOTAL COMMON STOCKS (Cost $2,537,554) 1,883,674 ------------ PAR (000) -------- SHORT-TERM INVESTMENT (13.3%) State Street Bank and Trust Co. Euro Time Deposit, 3.500%, 9/04/01 (Cost $288,000) $288 288,000 ------------ TOTAL INVESTMENTS AT VALUE (100.2%) (Cost $2,825,5542) 2,171,674 LIABILITIES IN EXCESS OF OTHER ASSETS (-0.2%) (5,312) ------------ NET ASSETS (100.0%) $ 2,166,362 ============
INVESTMENT ABBREVIATIONS ADR = American Depository Receipt (1) Non-income producing security. (2) Also cost for federal income tax purposes. See Accompanying Notes to Financial Statements. 34 CREDIT SUISSE WARBURG PINCUS GLOBAL FINANCIAL SERVICES FUND SCHEDULE OF INVESTMENTS August 31, 2001
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (97.2%) AUSTRALIA (2.2%) BANKS (1.2%) National Australia Bank, Ltd. 1,280 $ 22,353 ------------ INSURANCE (1.0%) AMP, Ltd. 1,800 18,628 ------------ TOTAL AUSTRALIA 40,981 ------------ BELGIUM (1.1%) BANKS (1.1%) Dexia 1,300 20,642 ------------ TOTAL BELGIUM 20,642 ------------ BERMUDA (1.5%) INSURANCE (1.5%) RenaissanceRe Holdings, Ltd. ADR 400 28,540 ------------ TOTAL BERMUDA 28,540 ------------ CANADA (2.2%) BANKS (2.2%) Royal Bank of Canada 1,300 41,606 ------------ TOTAL CANADA 41,606 ------------ FRANCE (3.7%) BANKS (2.7%) BNP Paribas SA 558 51,195 ------------ INSURANCE (1.0%) AXA 716 19,545 ------------ TOTAL FRANCE 70,740 ------------ GERMANY (3.3%) INSURANCE (3.3%) Muenchener Rueckversicherungs-Gesellschaft AG 220 63,071 ------------ TOTAL GERMANY 63,071 ------------ IRELAND (1.5%) BANKS (1.5%) Allied Irish Banks PLC 2,525 28,441 ------------ TOTAL IRELAND 28,441 ------------ ITALY (2.3%) INSURANCE (2.3%) Riunione Adriatica di Sicurta SpA 3,274 44,313 ------------ TOTAL ITALY 44,313 ------------ JAPAN (14.1%) BANKS (12.3%) Mitsubishi Tokyo Financial Group, Inc. 9 76,386 Mizuho Holdings, Inc. 15 62,016
See Accompanying Notes to Financial Statements. 35
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) JAPAN (CONT'D) UFJ Holdings, Inc. 19 $ 96,596 ------------ 234,998 ------------ DIVERSIFIED FINANCIALS (1.8%) Nomura Securities Co., Ltd. 2,000 33,949 ------------ TOTAL JAPAN 268,947 ------------ MEXICO (0.9%) BANKS (0.9%) Grupo Financiero BBVA Bancomer SA de CV Class O 21,600 18,162 ------------ TOTAL MEXICO 18,162 ------------ NETHERLANDS (1.6%) BANKS (1.6%) ABN AMRO Holding NV 1,647 30,311 ------------ TOTAL NETHERLANDS 30,311 ------------ SWEDEN (1.5%) BANKS (1.5%) Nordea AB 4,887 29,699 ------------ TOTAL SWEDEN 29,699 ------------ SWITZERLAND (4.0%) BANKS (4.0%) UBS AG 1,569 76,522 ------------ TOTAL SWITZERLAND 76,522 ------------ UNITED KINGDOM (5.7%) BANKS (4.1%) HSBC Holdings PLC 2,320 26,989 Royal Bank of Scotland Group PLC 2,096 52,293 ------------ 79,282 ------------ INSURANCE (1.6%) Friends Provident PLC(1) 8,488 31,365 ------------ TOTAL UNITED KINGDOM 110,647 ------------ UNITED STATES (51.6%) BANKS (20.7%) Bank of America Corp. 1,700 104,550 FleetBoston Financial Corp. 2,000 73,660 J.P. Morgan Chase & Co. 1,810 71,314 PNC Financial Services Group 1,100 73,249 Wells Fargo & Co. 1,600 73,616 ------------ 396,389 ------------
See Accompanying Notes to Financial Statements. 36
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) DIVERSIFIED FINANCIALS (14.4%) Citigroup, Inc. 2,700 $ 123,525 Freddie Mac 1,000 62,880 Merrill Lynch & Co., Inc. 900 46,440 Stilwell Financial, Inc. 1,500 42,900 ------------ 275,745 ------------ INDUSTRIAL CONGLOMERATES (2.6%) General Electric Co. 1,200 49,176 ------------ INSURANCE (13.9%) AFLAC, Inc. 1,700 46,784 American International Group, Inc. 1,400 109,480 Hartford Financial Services, Inc. 600 38,880 MBIA, Inc. 800 43,208 Old Republic International Corp. 1,000 26,850 ------------ 265,202 ------------ TOTAL UNITED STATES 986,512 ------------ TOTAL COMMON STOCKS (Cost $1,996,274) 1,859,134 ------------ PAR (000) ------- SHORT-TERM INVESTMENT (1.0%) BBH Grand Cayman U.S. Dollar Time Deposit 2.740% 9/04/01 (Cost $19,524) $19 19,524 ------------ TOTAL INVESTMENTS AT VALUE (98.2%) (Cost $2,015,7982) 1,878,658 OTHER ASSETS IN EXCESS OF LIABILITIES (1.8%) 34,810 ------------ NET ASSETS (100.0%) $ 1,913,468 ============
INVESTMENT ABBREVIATIONS ADR = American Depository Receipt (1) Non-income producing security. (2) Also cost for federal income tax purposes. See Accompanying Notes to Financial Statements. 37 CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY FUND SCHEDULE OF INVESTMENTS August 31, 2001
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (88.6%) DENMARK (5.2%) COMMERCIAL SERVICES & SUPPLIES (2.7%) ISS AS 9,490 $ 529,099 ------------ DIVERSIFIED TELECOMMUNICATIONS SERVICES (2.5%) TDC A/S 13,200 478,283 ------------ TOTAL DENMARK 1,007,382 ------------ FINLAND (1.8%) INSURANCE (1.8%) Sampo Oyj 40,800 350,235 ------------ TOTAL FINLAND 350,235 ------------ FRANCE (17.1%) BANKS (2.1%) BNP Paribas SA 4,484 411,391 ------------ CONSTRUCTION & ENGINEERING (1.1%) Vinci 3,220 204,164 ------------ ELECTRICAL EQUIPMENT (2.0%) Alstom 14,429 392,424 ------------ HOTELS RESTAURANTS & LEISURE (2.2%) Elior 37,100 426,317 ------------ MEDIA (5.7%) Havas Advertising SA 36,425 337,495 Lagardere Groupe SCA 6,371 303,833 Vivendi Universal SA 8,475 463,451 ------------ 1,104,779 ------------ METALS & MINING (2.4%) Pechiney SA Class A 9,218 454,679 ------------ OIL & GAS (1.6%) TotalFinaElf SA 2,100 310,366 ------------ TOTAL FRANCE 3,304,120 ------------ GERMANY (5.9%) INSURANCE (3.8%) Marschollek, Lautenschlaeger und Partner AG 3,024 195,006 Muenchener Rueckversicherungs-Gesellschaft AG 1,867 535,241 ------------ 730,247 ------------ SEMICONDUCTOR EQUIPMENT & PRODUCTS (2.1%) Infineon Technologies AG 17,400 406,842 ------------ TOTAL GERMANY 1,137,089 ------------ IRELAND (2.7%) PAPER & FOREST PRODUCTS (2.7%) Jefferson Smurfit Group PLC 233,200 518,994 ------------ TOTAL IRELAND 518,994 ------------
See Accompanying Notes to Financial Statements. 38
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) ISRAEL (1.3%) HEALTHCARE EQUIPMENT & SUPPLIES (1.3%) Card-Guard Scientific Survival, Ltd.(1) 6,770 $ 247,434 ------------ TOTAL ISRAEL 247,434 ------------ ITALY (5.3%) INSURANCE (2.7%) Riunione Adriatica di Sicurta SpA 37,880 512,701 ------------ TRANSPORTATION INFRASTRUCTURE (2.6%) Concessioni e Costruzioni Autostrade SpA 72,151 504,662 ------------ TOTAL ITALY 1,017,363 ------------ NETHERLANDS (9.5%) BANKS (2.1%) ABN AMRO Holding NV 21,925 403,503 ------------ FOOD & DRUG RETAILING (3.2%) Koninklijke Ahold NV(2) 20,850 622,360 ------------ HOUSEHOLD DURABLES (3.1%) Koninklijke (Royal) Philips Electronics NV 22,154 597,288 ------------ MACHINERY (1.1%) IHC Caland NV 4,100 205,585 ------------ TOTAL NETHERLANDS 1,828,736 ------------ NORWAY (2.6%) BANKS (2.6%) Den Norske Bank ASA 100,570 496,820 ------------ TOTAL NORWAY 496,820 ------------ SPAIN (4.4%) AIRLINES (2.1%) Amadeus Global Travel Distribution SA(1) 53,200 407,870 ------------ ELECTRIC UTILITIES (2.3%) Union Electrica Fenosa SA 23,900 446,147 ------------ TOTAL SPAIN 854,017 ------------ SWEDEN (6.5%) AUTO COMPONENTS (3.1%) Autoliv, Inc. 30,100 596,292 ------------ BANKS (2.4%) Nordea AB 74,550 453,047 ------------ DIVERSIFIED TELECOMMUNICATIONS SERVICES (1.0%) Eniro AB 25,080 187,217 ------------ TOTAL SWEDEN 1,236,556 ------------ SWITZERLAND (4.5%) BANKS (2.6%) UBS AG 10,390 506,735 ------------
See Accompanying Notes to Financial Statements. 39
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) COMPUTERS & PERIPHERALS (1.9%) Logitech International SA(1) 12,930 $ 358,304 ------------ TOTAL SWITZERLAND 865,039 ------------ UNITED KINGDOM (21.8%) AEROSPACE & DEFENSE (2.6%) BAE Systems PLC 106,705 510,765 ------------ BANKS (3.7%) Lloyds TSB Group PLC 38,094 392,593 Royal Bank of Scotland Group PLC 12,530 312,609 ------------ 705,202 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS (1.8%) Firstgroup PLC 67,800 352,075 ------------ GAS UTILITIES (2.3%) BG Group PLC 108,900 451,769 ------------ INSURANCE (1.9%) Friends Provident PLC(1) 98,000 362,128 ------------ MEDIA (1.8%) Incepta Group PLC 463,000 355,942 ------------ PHARMACEUTICALS (5.6%) AstraZeneca Group PLC 8,031 387,565 GlaxoSmithKline PLC 26,234 695,605 ------------ 1,083,170 ------------ WIRELESS TELECOMMUNICATIONS SERVICES (2.1%) Vodafone Group PLC 204,226 407,320 ------------ TOTAL UNITED KINGDOM 4,228,371 ------------ TOTAL COMMON STOCK (Cost $17,375,275) 17,092,156 ------------ PAR (000) ------- SHORT-TERM INVESTMENT (3.0%) State Street Bank and Trust Co. Euro Time Deposit, 3.500%, 9/04/01 (Cost $588,000) $588 588,000 ------------ TOTAL INVESTMENTS AT VALUE (91.6%) (Cost $17,963,2753) 17,680,156 OTHER ASSETS IN EXCESS OF LIABILITIES (8.4%) 1,618,382 ------------ NET ASSETS (100.0%) $ 19,298,538 ============
(1) Non-income producing security. (2) Security or portion thereof is out on loan. (3) Cost for federal income tax purposes is $18,363,761. See Accompanying Notes to Financial Statements. 40 CREDIT SUISSE WARBURG PINCUS FOCUS FUND SCHEDULE OF INVESTMENTS August 31, 2001
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (98.0%) BANKS (6.9%) Bank of America Corp. 4,900 $ 301,350 Citigroup, Inc. 3,400 155,550 FleetBoston Financial Corp. 7,400 272,542 PNC Financial Services Group 3,200 213,088 Wells Fargo & Co. 3,100 142,631 ------------ 1,085,161 ------------ CHEMICALS (5.2%) Du Pont (E.I.) de Nemours & Co. 16,300 667,811 PPG Industries, Inc. 2,900 156,948 ------------ 824,759 ------------ COMPUTER HARDWARE & BUSINESS MACHINES (5.9%) Cisco Systems, Inc.(1) 12,800 209,024 Compaq Computer Corp. 28,800 355,680 EMC Corp.(1) 2,800 43,288 Gateway, Inc.(1) 35,400 317,538 ------------ 925,530 ------------ COMPUTER SOFTWARE (5.9%) i2 Technologies, Inc.(1) 7,400 49,284 Microsoft Corp.(1) 8,500 484,925 VERITAS Software Corp.(1) 14,000 402,080 ------------ 936,289 ------------ DEFENSE/AEROSPACE (1.0%) Lockheed Martin Corp. 4,100 163,426 ------------ DEPARTMENT STORES (0.9%) Wal-Mart Stores, Inc. 3,000 144,150 ------------ DRUGS (10.2%) Gilead Sciences, Inc.(1) 3,900 236,769 Lilly (Eli) & Co. 4,900 380,387 Pfizer, Inc. 15,500 593,805 Pharmacia Corp. 10,000 396,000 ------------ 1,606,961 ------------ ELECTRONIC EQUIPMENT (1.4%) Motorola, Inc. 13,000 226,200 ------------ ENERGY RESERVES & PRODUCTION (4.7%) Enron Corp. 4,400 153,956 Exxon Mobil Corp. 14,700 590,205 ------------ 744,161 ------------ ENTERTAINMENT (2.6%) Viacom, Inc. Class B(1) 9,700 411,280 ------------ FINANCIAL SERVICES (6.8%) Cendant Corp.(1) 17,200 328,004 Freddie Mac 3,100 194,928
See Accompanying Notes to Financial Statements. 41
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) FINANCIAL SERVICES (cont'd) General Electric Co. 13,500 $ 553,230 ------------ 1,076,162 ------------ FOOD & BEVERAGE (6.3%) Coca-Cola Co. 14,900 725,183 Wrigley (Wm.) Jr. Co. 5,200 260,728 ------------ 985,911 ------------ HOME PRODUCTS (5.0%) Clorox Co. 16,400 610,900 Gillette Co. 5,900 180,835 ------------ 791,735 ------------ INDUSTRIAL PARTS (1.0%) Illinois Tool Works, Inc. 2,500 156,317 ------------ INFORMATION SERVICE (3.9%) AOL Time Warner, Inc.(1) 13,100 489,285 Ceridian Corp.(1) 6,400 124,480 ------------ 613,765 ------------ MEDICAL PRODUCTS & SUPPLIES (4.1%) Guidant Corp. 6,400 231,168 Medtronic, Inc. 9,000 409,860 ------------ 641,028 ------------ OIL REFINING (3.9%) Conoco, Inc. Class B 20,800 616,096 ------------ PROPERTY & CASUALTY INSURANCE (2.9%) American International Group, Inc. 5,800 453,560 ------------ RESTAURANTS (3.4%) McDonald's Corp. 17,900 537,537 ------------ SECURITIES & ASSET MANAGEMENT (0.9%) Morgan Stanley, Dean Witter & Co. 2,600 138,710 ------------ SEMICONDUCTOR (5.5%) Intel Corp. 14,200 397,032 Texas Instruments, Inc. 7,200 238,320 Xilinx, Inc.(1) 6,100 238,144 ------------ 873,496 ------------ TELEPHONE (7.1%) SBC Communications, Inc. 15,700 642,287 Sprint Corp. (FON Group) 19,300 450,462 XO Communications, Inc. Class A(1,2) 23,200 26,448 ------------ 1,119,197 ------------
See Accompanying Notes to Financial Statements. 42
NUMBER OF SHARES VALUE ---------- ----- COMMON STOCKS (CONT'D) TOBACCO (2.5%) Philip Morris Companies, Inc. 8,400 $ 398,160 ------------ TOTAL COMMON STOCKS (Cost $16,456,514) 15,469,591 ------------ PAR (000) ------ SHORT-TERM INVESTMENT (3.1%) State Street Bank and Trust Co. Euro Time Deposit, 3.500%, 9/04/01 (Cost $485,000) $485 485,000 ------------ TOTAL INVESTMENTS (101.1%) (Cost $16,941,5143) 15,954,591 LIABILITIES IN EXCESS OF OTHER ASSETS (-1.1%) (178,581) ------------ NET ASSETS (100.0%) $15,776,010 ============
(1) Non-income producing security. (2) Security or portion thereof is out on loan. (3) Cost for federal income tax purposes is $17,722,919.See Accompanying Notes to Financial Statement. 43 CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND SCHEDULE OF INVESTMENTS August 31, 2001
PAR RATINGS (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- MUNICIPAL BONDS (98.0%) ALASKA (5.4%) $1,170 Anchorage, AK, General Obligation, Series B (AAA , Aaa) 07/01/13 5.500 $ 1,285,350 ------------ CALIFORNIA (8.0%) 1,000 California State Public Works Board Lease, Department of Corrections, Revenue Bonds, Series B (A , A1) 01/01/12 5.250 1,094,150 670 California State, General Obligation (A+ , Aa3) 09/11/11 6.300 792,804 ------------ TOTAL CALIFORNIA (Cost $1,818,843) 1,886,954 ------------ COLORADO (6.1%) 700 Colorado Health Facilities Authority Revenue, Catholic Health Initiatives, Series A (AA- , Aa3) 12/01/07 5.500 754,999 595 Colorado Springs, CO, Utility Revenue Bonds (AAA , Aaa) 11/15/17 5.875 676,723 ------------ TOTAL COLORADO (Cost $1,307,182) 1,431,722 ------------ FLORIDA (6.9%) 1,000 Florida Intergovernmental Finance, Community Capital, Revenue Bonds, Series A (NR , Aa2) 05/01/11 5.000 1,066,990 530 Tallahassee, FL, Electric Revenue Bonds (AAA , Aaa) 10/01/06 6.100 567,990 ------------ TOTAL FLORIDA (Cost $1,561,706) 1,634,980 ------------ ILLINOIS (8.1%) 200 Chicago, IL, General Obligation, Series 1993 (AAA , Aaa) 01/01/18 5.250 203,928 1,000 Chicago, IL, Metro Water Reclamation District Greater Chicago, Capital Improvement Bonds, General Obligation (AA+ , Aa) 01/01/11 7.000 1,205,100 200 Cook County, Il, General Obligation, Series B (AAA , Aaa) 11/15/10 5.400 209,560 300 Illinois Development Finance Authority, Adventist Health Systems, Sunbelt Obligation, Revenue Bonds (A- , Baa1) 11/15/24 5.650 301,356 ------------ TOTAL ILLINOIS (Cost $1,812,565) 1,919,944 ------------ LOUISIANA (3.1%) 635 New Orleans, LA, Home Mortgage Authority, Special Obligation Bonds (NR , Aaa) 01/15/11 6.250 735,997 ------------ MAINE (4.4%) 1,000 Maine Municipal Board Bank, Revenue Bonds, Series B (AAA , Aa2) 11/01/21 5.500 1,051,560 ------------ MARYLAND (4.4%) 850 Maryland State Transportation Authority, Project Revenue Bonds (AAA , Aaa) 07/01/16 6.800 1,029,308 ------------ MASSACHUSETTS (0.1%) 20 Massachusetts State, Water Resources Authority, Series A (AA , Aa3) 07/15/19 6.500 24,372 ------------ MINNESOTA (5.8%) 1,310 Minnesota Public Facilities Authority, Water Pollution, Series A (AAA , Aaa) 03/01/16 5.250 1,370,155 ------------
See Accompanying Notes to Financial Statements. 44
PAR RATINGS (000) (S&P/MOODY'S) MATURITY RATE% VALUE ----- ------------- -------- ----- ----- MUNICIPAL BONDS (CONT'D) NEW JERSEY (1.9%) $ 440 New Jersey Health Care Facilities, Financing Authority, Trinitas Hospital Obligation Group, Revenue Bonds (BBB- , Baa3) 07/01/04 6.500 $ 458,880 ----------- NEW YORK (17.6%) 1,000 New York City, General Obligation, Series G (A , A2) 02/01/08 5.750 1,095,310 1,000 New York City Transitional Finance Authority, Revenue Bonds, Series C, Future Tax Secured (AA+ , Aa2) 02/01/11 5.500 1,119,050 40 New York State Dormitory Authority, Revenue Bonds (Judicial Facilities Lease) (AAA , Aaa) 07/01/16 7.375 49,335 360 New York State Power Authority, General Purpose Revenue Bonds (AAA , Aaa) 01/01/10 7.000 444,089 580 Suffolk County, New York, Water Authority Waterworks, Revenue Bonds, Series V (AAA , NR) 06/01/12 6.750 697,050 730 Triborough Bridge & Tunnel Authority, New York, General Purpose Bonds, Series A (A+ , Aa3) 01/01/20 5.200 741,505 ----------- TOTAL NEW YORK (Cost $3,812,884) 4,146,339 ----------- OHIO (4.7%) 1,000 Ohio State Building Authority, State Facilities, Adult Correction, Series A (AAA , Aaa) 10/01/12 5.500 1,103,230 ----------- SOUTH DAKOTA (0.6%) 115 Heartland Consumers Power District, SD, Electric Revenue Bonds (AAA , Aaa) 01/01/16 6.375 132,037 ----------- TEXAS (15.2%) 1,000 Austin, TX, Water & Wastewater System Revenue, Series B (AAA , Aaa) 05/15/15 5.750 1,101,370 250 Cypress - Fairbanks, TX, Independent School District, General Obligation (AAA , Aaa) 02/15/16 6.000 276,273 1,000 Deer Park, TX, Independent School District, General Obligation (AAA , Aaa) 02/15/14 5.000 1,034,770 95 Houston, TX, Sewer Systems, Revenue Bonds (NR , Aaa) 10/01/08 6.375 105,277 5 San Antonio, TX, Electric & Gas, Revenue Bonds, Prerefunded (AA , Aa1) 02/01/12 5.000 5,338 995 San Antonio, TX, Electric & Gas, Revenue Bonds, Unrefunded Balance (AA , Aa1) 02/01/12 5.000 1,061,496 ----------- TOTAL TEXAS (Cost $3,424,219) 3,584,524 ----------- VIRGINIA (5.7%) 500 Fairfax County, VA, Public Improvement, General Obligation, Series A (AAA , Aaa) 06/01/08 5.500 554,770 630 Fairfax County, VA, Redevelopment & Housing Authority, Revenue Bonds (Island Walk Project) (AAA , NR) 04/01/19 7.100 792,849 ----------- TOTAL VIRGINIA (Cost $1,222,927) 1,347,619 ----------- TOTAL MUNICIPAL BONDS (Cost $21,754,249) 23,142,971 -----------
See Accompanying Notes to Financial Statements. 45
PAR (000) VALUE ------- ----- SHORT-TERM INVESTMENT (0.4%) State Street Bank and Trust Co. Euro Time Deposit, 3.500%, 9/04/01 (Cost $102,000) $102 $ 102,000 ----------- TOTAL INVESTMENTS AT VALUE (98.4%) (Cost $21,856,2491) 23,244,971 OTHER ASSETS IN EXCESS OF LIABILITIES (1.6%) 373,611 ----------- NET ASSETS (100.0%) $23,618,582 ===========
(1) Also cost for federal income tax purposes. See Accompanying Notes to Financial Statements. 46 This page intentionally left blank CREDIT SUISSE WARBURG PINCUS FUNDS STATEMENTS OF ASSETS AND LIABILITIES August 31, 2001
GLOBAL GLOBAL TELECOMMUNICATIONS HEALTH SCIENCES FUND FUND ------------------ --------------- ASSETS Investments at value (Cost $221,503,468, $84,800,600, $2,825,554, $2,015,798, $17,963,275, $16,941,514 and $21,856,249, respectively) $ 149,690,083 $ 99,620,901 Cash 5,303 -- Foreign currency (Cost $99,457) 93,217 -- Receivable for fund shares sold 217,272 53,020 Receivable for investments sold 216,578 1,660,800 Dividend, interest and reclaim receivable 25,590 40,442 Collateral received for securities loaned -- -- Deferred organizational/offering costs -- -- Receivable from investment adviser -- -- Prepaid expenses and other assets 42,738 32,601 ------------- ------------- Total Assets 150,290,781 101,407,764 ------------- ------------- LIABILITIES Due to custodian -- 161 Advisory fee payable 33,312 7,548 Payable on forward currency contracts -- -- Administrative services fee payable 8,413 8,226 Payable for investments purchased 2,199,682 -- Payable for fund shares redeemed 325,153 187,152 Distribution fee payable 34,353 20,642 Dividend payable -- -- Payable upon return of securities loaned -- -- Other accrued expenses payable 184,814 83,439 ------------- ------------- Total Liabilities 2,785,727 307,168 ------------- ------------- NET ASSETS Capital stock, $0.001 par value 5,069 5,192 Paid-in capital 347,483,141 91,691,630 Accumulated undistributed net investment income (loss) (177,510) (71) Accumulated net realized gain (loss) from investments and foreign currency transactions (127,986,021) (5,416,502) Net unrealized appreciation (depreciation) from investments and foreign currency translations (71,819,625) 14,820,347 ------------- ------------- Net Assets $ 147,505,054 $ 101,100,596 ============= ============= COMMON SHARES Net assets $ 147,504,324 $ 101,100,596 Shares outstanding 5,067,147 5,364,285 ------------- ------------- Net asset value, offering price and redemption price per share $29.11 $18.85 ====== ====== ADVISOR SHARES Net assets $ 730 N/A Shares outstanding 25 N/A ------------- ------------- Net asset value, offering price and redemption price per share $29.09 N/A ====== ====== INSTITUTIONAL SHARES Net assets N/A N/A Shares outstanding N/A N/A ------------- ------------- Net asset value, offering price and redemption price per share N/A N/A ====== ====== A SHARES Net assets N/A N/A Shares outstanding N/A N/A ------------- ------------- Net asset value and redemption price per share N/A N/A ====== ====== Maximum offering price per share (net asset value/(1-5.75%)) N/A N/A ====== ====== B SHARES Net assets N/A N/A Shares outstanding N/A N/A ------------- ------------- Net asset value and offering price per share N/A N/A ====== ====== C SHARES Net assets N/A N/A Shares outstanding N/A N/A ------------- ------------- Net asset value and offering price per share N/A N/A ====== ======
48
GLOBAL GLOBAL NEW TECHNOLOGIES FINANCIAL SERVICES FUND FUND ---------------- ------------------ ASSETS Investments at value (Cost $221,503,468, $84,800,600, $2,825,554, $2,015,798, $17,963,275, $16,941,514 and $21,856,249, respectively) $2,171,674 $1,878,658 Cash 547 -- Foreign currency (Cost $99,457) -- -- Receivable for fund shares sold -- -- Receivable for investments sold -- -- Dividend, interest and reclaim receivable 262 5,021 Collateral received for securities loaned -- -- Deferred organizational/offering costs 4,510 4,750 Receivable from investment adviser 17,482 41,378 Prepaid expenses and other assets 26,308 25,847 ---------- ---------- Total Assets 2,220,783 1,955,654 ---------- ---------- LIABILITIES Due to custodian -- 1,236 Advisory fee payable -- -- Payable on forward currency contracts 15,559 -- Administrative services fee payable 199 163 Payable for investments purchased -- -- Payable for fund shares redeemed -- -- Distribution fee payable 498 409 Dividend payable -- -- Payable upon return of securities loaned -- -- Other accrued expenses payable 38,165 40,378 ---------- ---------- Total Liabilities 54,421 42,186 ---------- ---------- NET ASSETS Capital stock, $0.001 par value 328 219 Paid-in capital 3,233,992 2,179,815 Accumulated undistributed net investment income (loss) (1,942) -- Accumulated net realized gain (loss) from investments and foreign currency transactions (396,580) (129,548) Net unrealized appreciation (depreciation) from investments and foreign currency translations (669,436) (137,018) ---------- ---------- Net Assets $2,166,362 $1,913,468 ========== ========== COMMON SHARES Net assets $2,166,362 $1,913,468 Shares outstanding 327,782 218,906 ---------- ---------- Net asset value, offering price and redemption price per share $6.61 $8.74 ===== ===== ADVISOR SHARES Net assets N/A N/A Shares outstanding N/A N/A ---------- ---------- Net asset value, offering price and redemption price per share N/A N/A ===== ===== INSTITUTIONAL SHARES Net assets N/A N/A Shares outstanding N/A N/A ---------- ---------- Net asset value, offering price and redemption price per share N/A N/A ===== ===== A SHARES Net assets N/A N/A Shares outstanding N/A N/A ---------- ---------- Net asset value and redemption price per share N/A N/A ===== ===== Maximum offering price per share (net asset value/(1-5.75%)) N/A N/A ===== ===== B SHARES Net assets N/A N/A Shares outstanding N/A N/A ---------- ---------- Net asset value and offering price per share N/A N/A ===== ===== C SHARES Net assets N/A N/A Shares outstanding N/A N/A ---------- ---------- Net asset value and offering price per share N/A N/A ===== ===== EUROPEAN MUNICIPAL EQUITY FUND FOCUS FUND BOND FUND ----------- ---------- --------- ASSETS Investments at value (Cost $221,503,468, $84,800,600, $2,825,554, $2,015,798, $17,963,275, $16,941,514 and $21,856,249, respectively) $17,680,156(1) $ 15,954,591(2) $23,244,971 Cash 10,680 4,097 287 Foreign currency (Cost $99,457) -- -- -- Receivable for fund shares sold 990,000 424 133,200 Receivable for investments sold 617,751 40,629 -- Dividend, interest and reclaim receivable 48,257 21,417 289,553 Collateral received for securities loaned 666,929 109,000 -- Deferred organizational/offering costs -- -- -- Receivable from investment adviser 8,067 58,498 -- Prepaid expenses and other assets 16,151 67,274 15,636 ----------- ------------ ----------- Total Assets 20,037,991 16,255,930 23,683,647 ----------- ------------ ----------- LIABILITIES Due to custodian -- -- -- Advisory fee payable -- -- 10,915 Payable on forward currency contracts -- -- -- Administrative services fee payable 1,649 -- -- Payable for investments purchased -- 300,969 -- Payable for fund shares redeemed 20,752 -- 260 Distribution fee payable 4,122 -- -- Dividend payable -- -- 16,645 Payable upon return of securities loaned 666,929 109,000 -- Other accrued expenses payable 46,001 69,951 37,245 ----------- ------------ ----------- Total Liabilities 739,453 479,920 65,065 ----------- ------------ ----------- NET ASSETS Capital stock, $0.001 par value 2,419 1,174 42 Paid-in capital 21,519,958 21,283,290 21,472,174 Accumulated undistributed net investment income (loss) (2,254) 21,563 (24) Accumulated net realized gain (loss) from investments and foreign currency transactions (1,938,825) (4,543,094) 743,287 Net unrealized appreciation (depreciation) from investments and foreign currency translations (282,760) (986,923) 1,403,103 ----------- ------------ ----------- Net Assets $19,298,538 $ 15,776,010 $23,618,582 =========== ============ =========== COMMON SHARES Net assets $19,298,538 $ 7,696,258 $18,671,962 Shares outstanding 2,419,382 574,870 1,220,491 ----------- ------------ ----------- Net asset value, offering price and redemption price per share $7.98 $13.39 $15.30 ===== ====== ====== ADVISOR SHARES Net assets N/A N/A N/A Shares outstanding N/A N/A N/A ----------- ------------ ----------- Net asset value, offering price and redemption price per share N/A N/A N/A ===== ====== ====== INSTITUTIONAL SHARES Net assets N/A $ 7,912,295 $ 4,946,620 Shares outstanding N/A 586,289 323,231 ----------- ------------ ----------- Net asset value, offering price and redemption price per share N/A $13.50 $15.30 ===== ====== ====== A SHARES Net assets N/A $ 64,464 N/A Shares outstanding N/A 4,813 N/A ----------- ------------ ----------- Net asset value and redemption price per share N/A $13.39 N/A ===== ====== ====== Maximum offering price per share (net asset value/(1-5.75%)) N/A $14.21 N/A ===== ====== ====== B SHARES Net assets N/A $ 1,088 N/A Shares outstanding N/A 81 N/A ----------- ------------ ----------- Net asset value and offering price per share N/A $13.38 N/A ===== ====== ====== C SHARES Net assets N/A $ 101,905 N/A Shares outstanding N/A 7,613 N/A ----------- ------------ ----------- Net asset value and offering price per share N/A $13.39 N/A ===== ====== ======
(1) Includes $634,738 of securities on loan (2) Includes $24,416 of securities on loan. See Accompanying Notes to Financial Statements. 49 CREDIT SUISSE WARBURG PINCUS FUNDS STATEMENTS OF OPERATIONS For the Year or Period Ended August 31, 2001
GLOBAL GLOBAL TELECOMMUNICATIONS HEALTH SCIENCES FUND FUND ------------------ --------------- INVESTMENT INCOME Dividends $ 1,024,037 $ 223,509 Interest 370,880 300,057 Securities lending 11,259 -- Foreign taxes withheld (82,091) (3,556) ------------- ------------ Total investment income 1,324,085 520,010 ------------- ------------ EXPENSES Investment advisory fees 2,610,244 967,427 Administrative services fees 443,377 193,319 Shareholder servicing/Distribution fees 652,561 241,857 Transfer agent fees 522,088 186,615 Custodian fees 130,719 19,273 Registration fees 103,814 30,678 Printing fees 77,492 75,902 Legal fees 54,137 21,645 Audit fees 23,300 18,300 Interest expense 20,074 9,464 Directors fees 12,909 12,816 Insurance expense 11,219 4,195 Offering/Organizational costs -- 5,913 Miscellaneous expense 69,193 7,577 ------------- ------------ 4,731,127 1,794,981 Less: fees waived, expenses reimbursed and transfer agent offsets (424,223) (256,772) ------------- ------------ Total expenses 4,306,904 1,538,209 ------------- ------------ Net investment income (loss) (2,982,819) (1,018,199) ------------- ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS Net realized gain (loss) from investments (126,666,286) (5,343,370) Net realized gain (loss) from foreign currency transactions (282,720) (71) Net change in unrealized appreciation (depreciation) from investments (100,927,122) (15,149,615) Net change in unrealized appreciation (depreciation) from foreign currency translations 10,895 46 ------------- ------------ Net realized and unrealized gain (loss) from investments and foreign currency related items (227,865,233) (20,493,010) ------------- ------------ Net increase (decrease) in net assets resulting from operations $(230,848,052) $(21,511,209) ============= ============
(1) For the period December 22, 2000 (inception date) through August 31, 2001. (2) For the period December 28, 2000 (inception date) through August 31, 2001. 50
GLOBAL GLOBAL NEW TECHNOLOGIES FINANCIAL SERVICES FUND(1) FUND(2) ---------------- ------------------ INVESTMENT INCOME Dividends $ 4,795 $ 26,543 Interest 2,661 820 Securities lending -- -- Foreign taxes withheld (731) (1,453) ----------- ----------- Total investment income 6,725 25,910 ----------- ----------- EXPENSES Investment advisory fees 19,150 11,795 Administrative services fees 5,584 3,824 Shareholder servicing/Distribution fees 4,788 3,276 Transfer agent fees 1,105 763 Custodian fees 17,703 16,331 Registration fees 47,281 46,973 Printing fees 23,233 45,839 Legal fees 12,757 13,068 Audit fees 12,000 12,000 Interest expense -- -- Directors fees 10,320 10,318 Insurance expense 3 2 Offering/Organizational costs 10,060 9,820 Miscellaneous expense 855 858 ----------- ----------- 164,839 174,867 Less: fees waived, expenses reimbursed and transfer agent offsets (136,114) (155,209) ----------- ----------- Total expenses 28,725 19,658 ----------- ----------- Net investment income (loss) (22,000) 6,252 ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS Net realized gain (loss) from investments (448,123) (129,548) Net realized gain (loss) from foreign currency transactions 49,601 (7,727) Net change in unrealized appreciation (depreciation) from investments (653,880) (137,140) Net change in unrealized appreciation (depreciation) from foreign currency translations (15,556) 122 ----------- ----------- Net realized and unrealized gain (loss) from investments and foreign currency related items (1,067,958) (274,293) ----------- ----------- Net increase (decrease) in net assets resulting from operations $(1,089,958) $(268,041) =========== =========== EUROPEAN MUNICIPAL EQUITY FUND FOCUS FUND BOND FUND ----------- ---------- --------- INVESTMENT INCOME Dividends $ 407,383 $ 190,462 $ -- Interest 116,192 12,264 990,720 Securities lending 136 127 -- Foreign taxes withheld (52,250) (174) -- ----------- ----------- ---------- Total investment income 471,461 202,679 990,720 ----------- ----------- ---------- EXPENSES Investment advisory fees 231,802 114,684 136,894 Administrative services fees 48,278 17,418 18,618 Shareholder servicing/Distribution fees 57,950 15,081 19,547 Transfer agent fees 46,679 25,618 10,452 Custodian fees 60,135 32,519 17,152 Registration fees 42,418 44,267 36,331 Printing fees 40,654 71,246 59,709 Legal fees 20,392 79,066 21,562 Audit fees 15,300 13,925 14,750 Interest expense 754 564 1,689 Directors fees 12,324 12,589 11,070 Insurance expense 3,774 3,268 3,269 Offering/Organizational costs -- -- -- Miscellaneous expense 10,258 6,828 6,315 ----------- ----------- ---------- 590,718 437,073 357,358 Less: fees waived, expenses reimbursed and transfer agent offsets (254,606) (272,991) (172,561) ----------- ----------- ---------- Total expenses 336,112 164,082 184,797 ----------- ----------- ---------- Net investment income (loss) 135,349 38,597 805,923 ----------- ----------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS Net realized gain (loss) from investments (1,718,092) (3,486,250) 1,173,465 Net realized gain (loss) from foreign currency transactions (132,748) -- -- Net change in unrealized appreciation (depreciation) from investments (2,630,657) (260,401) (237,555) Net change in unrealized appreciation (depreciation) from foreign currency translations 5,638 -- -- ----------- ----------- ---------- Net realized and unrealized gain (loss) from investments and foreign currency related items (4,475,859) (3,746,651) 935,910 ----------- ----------- ---------- Net increase (decrease) in net assets resulting from operations $(4,340,510) $(3,708,054) $1,741,833 =========== =========== ==========
See Accompanying Notes to Financial Statements. 51 CREDIT SUISSE WARBURG PINCUS FUNDS STATEMENTS OF CHANGES IN NET ASSETS
GLOBAL TELECOMMUNICATIONS FUND --------------------------------- FOR THE YEAR FOR THE YEAR ENDED ENDED AUGUST 31, 2001 AUGUST 31, 2000 --------------- --------------- FROM OPERATIONS Net investment income (loss) $ (2,982,819) $ (3,205,537) Net realized gain (loss) from investments and foreign currency transactions (126,949,006) 17,763,961 Net change in unrealized appreciation (depreciation) from investments and foreign currency translations (100,916,227) 23,993,629 ------------- ------------- Net increase (decrease) in net assets resulting from operations (230,848,052) 38,552,053 ------------- ------------- FROM DISTRIBUTIONS Distributions from net realized gains Common Class shares (14,140,026) (3,754,559) ------------- ------------- Net decrease in net assets from distributions (14,140,026) (3,754,559) ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares 167,204,463 737,422,782 Reinvestment of dividends and distributions 13,397,882 3,567,097 Net asset value of shares redeemed (259,564,665) (369,497,412) ------------- ------------- Net increase (decrease) in net assets from capital share transactions: (78,962,320) 371,492,467 ------------- ------------- Net increase (decrease) in net assets (323,950,398) 406,289,961 NET ASSETS Beginning of period 471,455,452 65,165,491 ------------- ------------- End of period $ 147,505,054 $ 471,455,452 ============= ============= ACCUMULATED NET INVESTMENT LOSS $ (177,510) $ -- ============= =============
(1) For the period November 1, 1999 (fiscal year end changed) through August 31, 2000. (2) For the period December 22, 2000 (inception date) through August 31, 2001. (3) For the period December 28, 2000 (inception date) through August 31, 2001. 52
GLOBAL HEALTH SCIENCES FUND --------------------------------------- FOR THE YEAR FOR THE PERIOD ENDED ENDED AUGUST 31, 2001 AUGUST 31, 2000(1) --------------- ------------------ FROM OPERATIONS Net investment income (loss) $ (1,018,199) $ (448,423) Net realized gain (loss) from investments and foreign currency transactions (5,343,441) 9,291,753 Net change in unrealized appreciation (depreciation) from investments and foreign currency translations (15,149,569) 18,249,726 ------------- ----------- Net increase (decrease) in net assets resulting from operations (21,511,209) 27,093,056 ------------- ----------- FROM DISTRIBUTIONS Distributions from net realized gains Common Class shares (8,674,426) -- ------------- ----------- Net decrease in net assets from distributions (8,674,426) -- ------------- ----------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares 124,234,896 83,655,931 Reinvestment of dividends and distributions 8,505,255 -- Net asset value of shares redeemed (92,254,560) (67,522,268) ------------- ----------- Net increase (decrease) in net assets from capital share transactions: 40,485,591 16,133,663 ------------- ----------- Net increase (decrease) in net assets 10,299,956 43,226,719 NET ASSETS Beginning of period 90,800,640 47,573,921 ------------- ----------- End of period $ 101,100,596 $90,800,640 ============= =========== ACCUMULATED NET INVESTMENT LOSS $ (71) $ -- ============= =========== GLOBAL GLOBAL NEW TECHNOLOGIES FINANCIAL SERVICES FUND FUND ---------------- ------------------ FOR THE PERIOD FOR THE PERIOD ENDED ENDED AUGUST 31, 2001(2) AUGUST 31, 2001(3) ------------------ ------------------ FROM OPERATIONS Net investment income (loss) $ (22,000) $ 6,252 Net realized gain (loss) from investments and foreign currency transactions (398,522) (137,275) Net change in unrealized appreciation (depreciation) from investments and foreign currency translations (669,436) (137,018) ----------- ---------- Net increase (decrease) in net assets resulting from operations (1,089,958) (268,041) ----------- ---------- FROM DISTRIBUTIONS Distributions from net realized gains Common Class shares -- -- ----------- ---------- Net decrease in net assets from distributions -- -- ----------- ---------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares 3,314,472 2,188,666 Reinvestment of dividends and distributions -- -- Net asset value of shares redeemed (58,152) (7,157) ----------- ---------- Net increase (decrease) in net assets from capital share transactions: 3,256,320 2,181,509 ----------- ---------- Net increase (decrease) in net assets 2,166,362 1,913,468 NET ASSETS Beginning of period -- -- ----------- ---------- End of period $ 2,166,362 $1,913,468 =========== ========== ACCUMULATED NET INVESTMENT LOSS $ (1,942) $ -- =========== ==========
See Accompanying Notes to Financial Statements. 53 CREDIT SUISSE WARBURG PINCUS FUNDS STATEMENTS OF CHANGES IN NET ASSETS
EUROPEAN EQUITY FUND --------------------------------- FOR THE YEAR FOR THE YEAR ENDED ENDED AUGUST 31, 2001 AUGUST 31, 2000 --------------- --------------- FROM OPERATIONS Net investment income $ 135,349 $ 92,615 Net realized gain (loss) from investments and foreign currency transactions (1,850,840) 5,962,865 Net change in unrealized appreciation (depreciation) from investments and foreign currency translations (2,625,019) 1,389,070 ------------ ------------ Net increase (decrease) in net assets resulting from operations (4,340,510) 7,444,550 ------------ ------------ FROM DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income Common Class shares -- (134,704) Institutional Class shares -- (667) Distributions from net realized gains Common Class shares (4,539,707) -- Institutional Class shares -- -- ------------ ------------ Net decrease in net assets from dividends and distributions (4,539,707) (135,371) ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares 76,575,873 125,018,796 Shares exchanged due to merger -- -- Reinvestment of dividends and distributions 4,424,630 132,898 Net asset value of shares redeemed (82,828,871) (127,110,194) ------------ ------------ Net increase (decrease) in net assets from capital share transactions: (1,828,368) (1,958,500) ------------ ------------ Net increase (decrease) in net assets (10,708,585) 5,350,679 NET ASSETS Beginning of year 30,007,123 24,656,444 ------------ ------------ End of year $ 19,298,538 $ 30,007,123 ============ ============ ACCUMULATED NET INVESTMENT INCOME (LOSS) $ (2,254) $ -- ============ ============
54
FOCUS FUND ---------------------------------------- FOR THE YEAR FOR THE YEAR ENDED ENDED AUGUST 31, 2001 AUGUST 31, 2000 --------------- --------------- FROM OPERATIONS Net investment income $ 38,597 $ 25,877 Net realized gain (loss) from investments and foreign currency transactions (3,486,250) 1,589,430 Net change in unrealized appreciation (depreciation) from investments and foreign currency translations (260,401) 357,028 ----------- ----------- Net increase (decrease) in net assets resulting from operations (3,708,054) 1,972,335 ----------- ----------- FROM DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income Common Class shares (8,382) (623) Institutional Class shares (34,573) (124,682) Distributions from net realized gains Common Class shares (294,273) (77,776) Institutional Class shares (709,500) (9,020,862) ----------- ----------- Net decrease in net assets from dividends and distributions (1,046,728) (9,223,943) ----------- ----------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares 5,253,145 11,899,918 Shares exchanged due to merger 5,074,959 -- Reinvestment of dividends and distributions 1,044,841 1,368,909 Net asset value of shares redeemed (4,257,799) (28,090,859) ----------- ----------- Net increase (decrease) in net assets from capital share transactions: 7,115,146 (14,822,032) ----------- ----------- Net increase (decrease) in net assets 2,360,364 (22,073,640) NET ASSETS Beginning of year 13,415,646 35,489,286 ----------- ----------- End of year $15,776,010 $13,415,646 =========== =========== ACCUMULATED NET INVESTMENT INCOME (LOSS) $ 21,563 $ 25,921 =========== =========== MUNICIPAL BOND FUND -------------------------------------- FOR THE YEAR FOR THE YEAR ENDED ENDED AUGUST 31, 2001 AUGUST 31, 2000 FROM OPERATIONS Net investment income $ 805,923 $ 811,105 Net realized gain (loss) from investments and foreign currency transactions 1,173,465 (187,501) Net change in unrealized appreciation (depreciation) from investments and foreign currency translations (237,555) 357,493 ----------- ----------- Net increase (decrease) in net assets resulting from operations 1,741,833 981,097 ----------- ----------- FROM DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income Common Class shares (357,429) (12,785) Institutional Class shares (491,593) (840,967) Distributions from net realized gains Common Class shares -- (376) Institutional Class shares -- (27,430) ----------- ----------- Net decrease in net assets from dividends and distributions (849,022) (881,558) ----------- ----------- FROM CAPITAL SHARE TRANSACTIONS Proceeds from sale of shares 14,576,020 449,903 Shares exchanged due to merger 22,307,654 -- Reinvestment of dividends and distributions 740,279 830,332 Net asset value of shares redeemed (30,050,286) (8,861,870) ----------- ----------- Net increase (decrease) in net assets from capital share transactions: 7,573,667 (7,581,635) ----------- ----------- Net increase (decrease) in net assets 8,466,478 (7,482,096) NET ASSETS Beginning of year 15,152,104 22,634,200 ----------- ----------- End of year $23,618,582 $15,152,104 =========== =========== ACCUMULATED NET INVESTMENT INCOME (LOSS) $ (24) $ 43,075 =========== ===========
See Accompanying Notes to Financial Statements. 55
CREDIT SUISSE WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------------------------------------------------ FOR THE YEAR ENDED AUGUST 31, ------------------------------------------------------------------- 2001 2000 1999 1998 1997(1) ---------- ---------- ---------- ------- -------- PER SHARE DATA Net asset value, beginning of period $ 69.11 $ 41.22 $ 20.54 $ 17.30 $ 15.00 ---------- ---------- ---------- ------- -------- INVESTMENT OPERATIONS Net investment income (loss) (0.75) (0.44) (0.04) (0.01) 0.02 Net gain (loss) on investments and foreign currency related items (both realized and unrealized) (36.86) 29.56 23.56 4.29 2.28 ---------- ---------- ---------- ------- -------- Total from investment operations (37.61) 29.12 23.52 4.28 2.30 ---------- ---------- ---------- ------- -------- LESS DISTRIBUTIONS Distributions from net realized gains (2.39) (1.23) (2.84) (1.04) -- ---------- ---------- ---------- ------- -------- NET ASSET VALUE, END OF PERIOD $ 29.11 $ 69.11 $ 41.22 $ 20.54 $ 17.30 ========== ========== ========== ======= ======== Total return (55.72)% 70.99% 120.73% 25.38% 15.33%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 147,504 $ 471,455 $ 65,165 $ 718 $ 569 Ratio of expenses to average net assets 1.67%(3) 1.66%(3) 1.65% 1.65% 1.65%(4) Ratio of net investment income (loss) to average net assets (1.14)% (0.89)% (0.35)% (0.03)% 0.16%(4) Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.15% 0.11% 0.87% 5.21% 6.73%(4) Portfolio turnover rate 100% 143% 203% 169% 43% ------------------------------------------------------------------------------------------------------------------------
(1) For the period December 4, 1996 (inception date) through August 31, 1997. (2) Non-annualized. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expenses. These arrangements resulted in a reduction to the net expense ratio by .02% for the years ended August 31, 2001 and 2000, respectively. The operating expense ratio after reflecting these arrangements was 1.65% and 1.64% for the years ended August 31, 2001 and 2000, respectively. (4) Annualized. See Accompanying Notes to Financial Statements. 56 CREDIT SUISSE WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND FINANCIAL HIGHLIGHTS (For an Advisor Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 2001(1) ------------ PER SHARE DATA Net asset value, beginning of period $ 39.86 ------- INVESTMENT OPERATIONS Net Investment loss (0.16) Net loss on investments and foreign currency related items (both realized and unrealized) (10.61) ------- Total from investment operations (10.77) ------- NET ASSET VALUE, END OF PERIOD $ 29.09 ======= Total return (27.02)%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 1 Ratio of expenses to average net assets 1.90%(3),(4) Ratio of net investment loss to average net assets (1.36)%(3) Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.37%(3) Portfolio turnover rate 100%
-------------------------------------------------------------------------------- (1) For the period May 10, 2001 (inception date) through August 31, 2001. (2) Non-annualized. (3) Annualized. (4) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expenses. These arrangements had no effect on the fund's expense ratio. See Accompanying Notes to Financial Statements. 57 CREDIT SUISSE WARBURG PINCUS GLOBAL HEALTH SCIENCES FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR ENDED AUGUST 31, ENDED OCTOBER 31, --------------------- -------------------------------- 2001 2000(1) 1999 1998 1997(2) ---------- -------- -------- -------- -------- PER SHARE DATA Net asset value, beginning of period $ 23.95 $ 14.92 $ 14.41 $ 12.22 $ 10.00 ---------- -------- -------- -------- -------- INVESTMENT OPERATIONS Net investment loss (0.10) (0.08) (0.13) (0.06) (0.02) Net gain (loss) on investments and foreign currency related items (both realized and unrealized) (3.08) 9.11 0.64 2.97 2.24 ---------- -------- -------- -------- -------- Total from investment operations (3.18) 9.03 0.51 2.91 2.22 ---------- -------- -------- -------- -------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income -- -- -- (0.04) -- Distributions from net realized gains (1.92) -- -- (0.68) -- ---------- -------- -------- -------- -------- Total dividends and distributions (1.92) -- -- (0.72) -- ---------- -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $ 18.85 $ 23.95 $ 14.92 $ 14.41 $ 12.22 ========== ======== ======== ======== ======== Total return (14.44)% 60.52%(3) 3.54% 25.25% 22.20%(3) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 101,101 $ 90,801 $ 47,574 $ 64,336 $ 18,246 Ratio of expenses to average net assets(4) 1.60% 1.61%(5) 1.59% 1.59% 1.59%(5) Ratio of net investment income (loss) to average net assets (1.05)% (0.94)%(5) 0.62% (0.58)% (0.24)%(5) Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.26% 0.28% 0.29% 0.38% 1.83% Portfolio turnover rate 35% 106% 146% 63% 160% ------------------------------------------------------------------------------------------------------------------
(1) Effective May 1, 2000, Global Health Sciences changed its fiscal and tax year ends from October 31st to August 31st. (2) For the period December 31, 1996 (inception date) through October 31, 1997. (3) Non-annualized. (4) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expenses. These arrangements resulted in a reduction to the net expense ratio by .01% for the year ended August 31, 2001 and .02% annualized for the period November 1, 1999 to August 31, 2000. These arrangements had no effect on the fund's expense ratios for the previous periods. The operating expense ratio after reflecting these arrangements was 1.59% for the year ended August 31, 2001 and 1.59% annualized for the period November 1, 1999 to August 31, 2000. (5) Annualized. See Accompanying Notes to Financial Statements. 58 CREDIT SUISSE WARBURG PINCUS GLOBAL NEW TECHNOLOGIES FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 2001(1) --------- PER SHARE DATA Net asset value, beginning of period $ 10.20 --------- INVESTMENT OPERATIONS Net investment loss (0.07) Net loss on investments and foreign currency related items (both realized and unrealized) (3.52) --------- Total from investment operations (3.59) --------- NET ASSET VALUE, END OF PERIOD $ 6.61 ========= Total return (35.20)%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 2,166 Ratio of expenses to average net assets 1.51%(3),(4) Ratio of net investment loss to average net assets (1.15)%(3) Decrease reflected in above operating expense ratios due to waivers/reimbursements 7.10% Portfolio turnover rate 152% ---------------------------------------------------------------------------------------------------------------
(1) For the period December 22, 2000 (inception date) through August 31, 2001. (2) Non-annualized. (3) Annualized. (4) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expenses. These arrangements resulted in a reduction to the net expense ratio by .01% annualized for the period ended August 31, 2001. The operating expense ratio after reflecting these arrangements was 1.50% annualized for the period ended August 31, 2001. See Accompanying Notes to Financial Statements. 59 CREDIT SUISSE WARBURG PINCUS GLOBAL FINANCIAL SERVICES FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, 2001(1) ------------ PER SHARE DATA Net asset value, beginning of period $ 10.00 ------------ INVESTMENT OPERATIONS Net investment income 0.03 Net loss on investments and foreign currency related items (both realized and unrealized) (1.29) ------------ Total from investment operations (1.26) ------------ NET ASSET VALUE, END OF PERIOD $ 8.74 ============ Total return (12.60)%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 1,913 Ratio of expenses to average net assets 1.50%(3),(4) Ratio of net investment income to average net assets 0.48%(3) Decrease reflected in above operating expense ratios due to waivers/reimbursements 11.84% Portfolio Turnover rate 87% ------------------------------------------------------------------------
(1) For the period December 28, 2000 (inception date) through August 31, 2001. (2) Non-annualized. (3) Annualized. (4) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expenses. These arrangements had no effect on the fund's expense ratio. See Accompanying Notes to Financial Statements. 60 CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, -------------------------------------- 2001 2000 1999(1) -------- -------- -------- PER SHARE DATA Net asset value, beginning of period $ 11.96 $ 9.79 $ 10.00 -------- -------- -------- INVESTMENT OPERATIONS Net investment income 0.06 0.03 0.08 Net gain (loss) on investments and foreign currency related items (both realized and unrealized) (1.99) 2.19 (0.29) -------- -------- -------- Total from investment operations (1.93) 2.22 (0.21) -------- -------- -------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income -- (0.05) -- Distributions from net realized gains (2.05) -- -- -------- -------- -------- Total dividends and distributions (2.05) (0.05) -- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $ 7.98 $ 11.96 $ 9.79 ======== ======== ======== Total return (18.08)% 22.69% (2.10)%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 19,299 $ 30,007 $ 24,588 Ratio of expenses to average net assets 1.46%(3) 1.46%(3) 1.46%(4) Ratio of net investment income to average net assets 0.58% 0.30% 1.41%(4) Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.09% 1.47% 1.18%(4) Portfolio turnover rate 140% 186% 161% -------------------------------------------------------------------------------------------------------
(1) For the period January 28, 1999 (inception date) to August 31, 1999. (2) Non-annualized. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expenses. These arrangements resulted in a reduction to the net expense ratio by .01% for each of the years ended August 31, 2001 and 2000. The operating expense ratio after reflecting these arrangements was 1.45% for each of the years ended August 31, 2001 and 2000. (4) Annualized. See Accompanying Notes to Financial Statements. 61 CREDIT SUISSE WARBURG PINCUS FOCUS FUND FINANCIAL HIGHLIGHTS (FOR A COMMON CLASS SHARE OF THE FUND OUTSTANDING THROUGHOUT EACH PERIOD) ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, ------------------------------------- 2001 2000 1999(1) ------ ------ -------- PER SHARE DATA Net asset value, beginning of period $ 19.13 $ 20.11 $ 15.95 ------------ ---------- ------- INVESTMENT OPERATIONS Net investment income 0.02 0.03(2) 0.02 Net gain (loss) on investments (both realized and unrealized) (4.48) 4.76 4.16 ------------ ---------- ------- Total from investment operations (4.46) 4.79 4.18 ------------ ---------- ------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income (0.03) (0.07) (0.02) Distributions from net realized gains (1.25) (5.70) -- ------------ ---------- ------- Total dividends and distributions (1.28) (5.77) (0.02) ------------ ---------- ------- NET ASSET VALUE, END OF PERIOD $ 13.39 $ 19.13 $ 20.11 ============ ========== ======= Total return (24.68)% 33.42% 26.19%(3) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 7,696 $ 2,758 $ 95 Ratio of expenses to average net assets 1.22%(4) 1.29%(4) 1.29%(5) Ratio of net investment income to average net assets 0.09% 0.18% 0.17%(5) Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.98% 1.83% 0.45%(5) Portfolio turnover rate 141% 235% 209% ---------------------------------------------------------------------------------------------------
(1) For the period October 30, 1998 (inception date) through August 31, 1999. (2) Per share information is calculated using the average share outstanding method. (3) Non-annualized. (4) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the fund's expense ratio. (5) Annualized. See Accompanying Notes to Financial Statements. 62 CREDIT SUISSE WARBURG PINCUS FOCUS FUND FINANCIAL HIGHLIGHTS (For an Institutional Class Share of the Fund Outstanding Throughout Each Period) ------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, ------------------------------------------------------ 2001 2000 1999 1998(1) --------- -------- -------- --------- PER SHARE DATA Net asset value, beginning of period $ 19.25 $ 20.15 $ 13.17 $ 15.00 --------- -------- -------- --------- INVESTMENT OPERATIONS Net investment income 0.06 0.04 0.08 0.01 Net gain (loss) on investments (both realized and unrealized) (4.50) 4.83 6.92 (1.84) --------- -------- -------- --------- Total from investment operations (4.44) 4.87 7.00 (1.83) --------- -------- -------- --------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income (0.06) (0.07) (0.02) -- Distributions from net realized gains (1.25) (5.70) -- -- --------- -------- -------- --------- Total dividends and distributions (1.31) (5.77) (0.02) -- --------- -------- -------- --------- NET ASSET VALUE, END OF PERIOD $ 13.50 $ 19.25 $ 20.15 $ 13.17 ========= ======== ======== ========= Total return (24.46)% 33.88% 53.21% (12.20)%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 7,912 $ 10,658 $ 35,394 $ 22,659 Ratio of expenses to average net assets 0.98%(3) 1.00%(3) 0.99% 1.00%(4) Ratio of net investment income to average net assets 0.36% 0.19% 0.47% 0.92%(4) Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.64% 1.25% 0.43% 0.30%(4) Portfolio turnover rate 141% 235% 209% 52% -----------------------------------------------------------------------------------------------------------------------
(1) For the period July 31, 1998 (inception date) through August 31, 1998. (2) Non-annualized. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the fund's expense ratio. (4) Annualized. See Accompanying Notes to Financial Statements. 63 CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Period) -------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, -------------------------------------- 2001 2000 1999(1) -------- ------- -------- PER SHARE DATA Net asset value, beginning of period $ 14.47 $ 14.29 $ 15.14 -------- ------- -------- INVESTMENT OPERATIONS Net investment income 0.62 0.63 0.54 Net gain (loss) on investments (both realized and unrealized) 0.83 0.25 (0.66) -------- ------- -------- Total from investment operations 1.45 0.88 (0.12) -------- ------- -------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income (0.62) (0.68) (0.52) Distributions from net realized gains -- (0.02) (0.21) -------- ------- -------- Total dividends and distributions (0.62) (0.70) (0.73) -------- ------- -------- NET ASSET VALUE, END OF PERIOD $ 15.30 $14.47 $14.29 ======== ======= ======== Total return 10.24% 6.42% (0.85)%(2) RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 18,672 $ 524 $ 211 Ratio of expenses to average net assets 0.96%(3) 1.27%(3) 1.26%(4) Ratio of net income to average net assets 4.06% 4.55% 4.44%(4) Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.10% 0.82% 0.45%(4) Portfolio turnover rate 139% 5% 26% -------------------------------------------------------------------------------------------------------------------
(1) For the period October 30, 1998 (inception date) through August 31, 1999. (2) Non-annualized. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the fund's expense ratio. (4) Annualized. See Accompanying Notes to Financial Statements. 64 CREDIT SUISSE WARBURG PINCUS MUNICIPAL BOND FUND FINANCIAL HIGHLIGHTS (For an Institutional Class Share of the Fund Outstanding Throughout Each Period) -------------------------------------------------------------------------------
FOR THE YEAR ENDED AUGUST 31, --------------------------------------------------------------- 2001 2000 1999 1998 1997 ------ -------- -------- -------- -------- PER SHARE DATA Net asset value, beginning of period $14.47 $ 14.30 $ 15.12 $ 14.84 $ 14.65 ------ -------- -------- -------- -------- INVESTMENT OPERATIONS Net investment income 0.65 0.69 0.67 0.70 0.72 Net gain (loss) on investments and foreign currency related items (both realized and unrealized) 0.84 0.21 (0.60) 0.40 0.65 ------ -------- -------- -------- -------- Total from investment operations 1.49 0.90 0.07 1.10 1.37 ------ -------- -------- -------- -------- LESS DIVIDENDS AND DISTRIBUTIONS Dividends from net investment income (0.66) (0.71) (0.68) (0.71) (0.72) Distributions from net realized gains -- (0.02) (0.21) (0.11) (0.46) ------ -------- -------- -------- -------- Total dividends and distributions (0.66) (0.73) (0.89) (0.82) (1.18) ------ -------- -------- -------- -------- NET ASSET VALUE, END OF PERIOD $15.30 $ 14.47 $ 14.30 $ 15.12 $ 14.84 ====== ======== ======== ======== ======== Total return 10.53% 6.62% 0.36% 7.62% 9.74% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $4,947 $ 14,628 $ 22,423 $ 22,229 $ 19,810 Ratio of expenses to average net assets 0.93%(1) 1.00%(1) 0.99% 1.00% 1.00% Ratio of net income to average net assets 4.16% 4.79% 4.49% 4.72% 4.88% Decrease reflected in above operating expense ratios due to waivers/ reimbursements 0.74% 0.78% 0.44% 0.39% 0.37% Portfolio turnover rate 139% 5% 26% 57% 43% ---------------------------------------------------------------------------------------------------------------------
(1) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the fund's expense ratio. See Accompanying Notes to Financial Statements. 65 CREDIT SUISSE WARBURG PINCUS FUNDS NOTES TO FINANCIAL STATEMENTS August 31, 2001 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Credit Suisse Warburg Pincus Funds covered in this report are comprised of Credit Suisse Warburg Pincus Global Telecommunications Fund, Inc. ("Global Telecommunications"), Credit Suisse Warburg Pincus Global Health Sciences Fund, Inc. ("Global Health Sciences"), Credit Suisse Warburg Pincus Global New Technologies Fund, Inc. ("Global New Technologies"), Credit Suisse Warburg Pincus Global Financial Services Fund, Inc. ("Global Financial Services"), Credit Suisse Warburg Pincus European Equity Fund, Inc. ("European Equity"), Credit Suisse Warburg Pincus Focus Fund, Inc. ("Focus") (Class A, B and C shares of Focus are presented in a separate report) and Credit Suisse Warburg Pincus Municipal Bond Fund, Inc. ("Municipal Bond") (each, a "Fund" and collectively, the "Funds"), which are registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as non-diversified (other than European Equity, which is diversified), open-end management investment companies. Global Telecommunications, Global Health Sciences, Global New Technologies, Global Financial Services, European Equity and Municipal Bond are authorized to offer three classes of shares: Common, Advisor and Institutional, although only Common shares of each Fund, Advisor shares of Global Telecommunications and Institutional shares of Municipal Bond are currently offered. Focus is authorized to offer six classes of shares: Common, Advisor, Institutional, Class A, Class B and Class C, although only Common, Institutional, Class A, Class B and Class C shares are currently offered. Common shares for each Fund bear expenses paid pursuant to a shareholder servicing and distribution agreement at an annual rate equal to .25% of the average daily net asset value of the Fund's outstanding Common shares. Advisor shares bear expenses paid pursuant to a distribution plan at an annual rate of .50% of the average daily net asset value of the Fund's outstanding Advisor shares. Class A shares are sold with a front-end sales charge of up to 5.75% and bear expenses paid pursuant to a plan of distribution at an annual rate of .25% of the average daily net asset value of each applicable Fund's Class A shares. Class B shares are sold with a contingent deferred sales charge which declines from 4.00% to zero depending on the period of time the shares are held and bear expenses paid pursuant to a plan of distribution at an annual rate of 1.00% of the average daily net asset value of the Fund's Class B shares. Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed within the first year of purchase and bear expenses paid pursuant to a plan of distribution at an annual rate of 1.00% of the average daily net asset value of the Fund's Class C shares. In addition, the Common, Advisor, Class A, Class B and Class C shares bear co-administration fees. No compensation is payable for distribution services for each Fund's Institutional shares. 66 Effective as of the close of business on April 6, 2001, Focus and Municipal Bond acquired all of the net assets of the Credit Suisse Warburg Pincus Strategic Growth Fund ("Strategic Growth") and Credit Suisse Warburg Pincus Municipal Trust Fund ("Municipal Trust"), respectively, in a tax-free exchange of shares. The shares exchanged were 306,230 shares (valued at $4,042,236) of the Common Class shares of Focus for 583,295 shares of Common Class of Strategic Growth, 56,560 shares (valued at $746,590) of Common Class shares of Focus for 107,733 shares of Class A of Strategic Growth, 18,625 shares (valued at $245,855) of Common Class shares of Focus for 35,631 shares of Class B of Strategic Growth, 3,001 shares (valued at $39,612) of Common Class shares of Focus for 5,733 shares of Class C of Strategic Growth, 3031 shares (valued at $45,368) of Common Class shares of Municipal Bond for 4,383 shares of Common Class of Municipal Trust, 1,420,093 shares (valued at $21,258,788) of Common Class shares of Municipal Bond for 2,050,028 shares of Class A of Municipal Trust and 66,917 shares (valued at $1,001,751) of Common Class shares of Municipal Bond for 96,601 shares of Class B of Municipal Trust. The Strategic Growth net assets of $5,074,959 at that date, which included $2,384,238 of unrealized depreciation, were combined with those of Focus. The aggregate net assets of Strategic Growth and Focus immediately before the acquisition were $5,074,959 and $11,685,595, respectively and the combined net assets of Focus after the acquisition were $16,760,554. The Municipal Trust net assets of $22,307,654 at that date, which included $934,957 of unrealized appreciation, were combined with those of Municipal Bond. The aggregate net assets of Municipal Trust and Municipal Bond immediately before the acquisition were $22,307,654 and $15,375,780, respectively and the combined net assets of Municipal Bond after the acquisition were $37,683,434. Certain of the Funds are permitted to engage in the investment strategies described in the Notes to Financial Statements. The Funds are not obligated to pursue any of the following strategies and do not represent that these techniques are available at any time in the future. Please refer to each Fund's prospectus(es) and statement of additional information for a description of its investment strategies. A) SECURITY VALUATION -- The net asset value of each Fund is determined daily as of the close of regular trading on The New York Stock Exchange, Inc. Each Fund'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 last reported bid price. Debt securities are valued on the basis of broker quotations or valuations 67 provided by a pricing service which may use a matrix, formula or other objective method that takes into consideration market indices, matrices, yield curves and other specific adjustments. If market quotations are not readily available, securities and other assets are valued by another method that the Board of Directors believes accurately reflects fair value. Debt obligations that will mature in 60 days or less are valued on the basis of amortized cost, unless the Board determines that using this method would not reflect an investment's value. B) FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Funds 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 Funds do not isolate that portion of realized 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 Funds isolate that portion of realized 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. C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on a trade date basis. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Certain expenses are class specific expenses and vary by class. Expenses not directly attributable to a specific Fund or class are allocated based on relative net assets of each Fund and class, respectively. D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each Fund calculates its dividends from net investment income. Net investment income includes interest accrued, including amortization of premium and discounts, and dividends earned on the Fund's portfolio securities for the applicable period less applicable expenses. Global Telecommunications, Global Health Sciences, Global New Technologies, Global Financial Services, European Equity and Focus each will distribute substantially all of its net 68 realized capital gains and all net investment income, if any, to its shareholders at least annually. Municipal Bond will distribute all of its realized capital gains, if any, to its shareholders at least annually and all net investment income monthly. The character of distributions made during the year for net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes due to accounting principles generally accepted in the United States of America (GAAP) and tax differences in the character of income and expense recognition. These differences are primarily due to differing treatments for net operating losses, paydowns on mortgage-backed securities, passive foreign investment companies and forward foreign currency contracts. To the extent these differences are permanent in nature, such amounts are reclassified within capital accounts based on U.S. tax-basis treatment. Temporary differences do not require reclassification. At August 31, 2001, Global Telecommunications, Global Health Sciences, Global New Technologies, Global Financial Services and European Equity reclassified $(286,730), $(71), $(1,942), $(7,727) and $(137,603), respectively, from accumulated net realized gain (loss) to undistributed net investment income. Global Telecommunications, Global Health Sciences, Global New Technologies and Global Financial Services reclassified $(3,092,039), $(1,018,199), $(22,000) and $(1,475), respectively, from undistributed net investment income to capital contributions. Global Telecommunications, Global Health Sciences, Focus and Municipal Bond reclassified $222, $2,561, $539,543 and $235,801 respectively, from accumulated net realized gain (loss) to capital contributions. E) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is each Fund's intention 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. F) USE OF ESTIMATES -- 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 statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 69 G) REPURCHASE AGREEMENTS -- Money market instruments may be purchased from banks and non-bank dealers subject to the seller's agreement to repurchase them at an agreed-upon date and price. Collateral for repurchase agreements may have longer maturities than the maximum permissible remaining maturity of portfolio investments. The seller will be required on a daily basis to maintain the value of the securities subject to the agreement at not less than the repurchase price. The agreements are conditional upon the collateral being deposited under the Federal Reserve book-entry system or held in a separate account by each Fund's custodian or an authorized securities depository. H) FORWARD FOREIGN CURRENCY CONTRACTS -- Each Fund may enter into forward foreign currency contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering into these contracts from the potential inability of counter-parties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Each Fund will enter into forward foreign currency contracts primarily for hedging purposes. Forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the contract settlement date or an offsetting position is entered into. Global New Technologies had open forward foreign currency contracts at August 31, 2001 as follows:
EXPIRATION FOREIGN CURRENCY CONTRACT CONTRACT UNREALIZED FORWARD FOREIGN CURRENCY CONTRACT DATE TO BE PURCHASED/(SOLD) AMOUNT VALUE GAIN/(LOSS) --------------------------------- ---- ---------------------- ------ ----- ----------- Japanese Yen 10/11/01 21,600,000 $ 179,562 $ 182,615 $ 3,053 Japanese Yen 10/11/01 (65,200,000) (532,614) (551,226) (18,612) --------- --------- --------- $(353,052) $(368,611) $ (15,559) ========= ========= =========
I) SECURITIES LENDING -- Loans of securities are required at all times to be secured by collateral at least equal to 102% of the market value of domestic securities on loan including any accrued interest thereon and 105% of the market value of foreign securities on loan including any accrued interest thereon. Cash collateral received by the Fund in connection with securities lending activity is invested in the AIM Institutional Funds--Liquid Assets Portfolio. However, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. 70 The market value of securities on loan to brokers and the value of collateral held by each Fund with respect to such loans (including the right to draw on letter of credit) at August 31, 2001 is as follows:
MARKET VALUE OF VALUE OF FUND SECURITIES LOANED COLLATERAL RECEIVED ---- ----------------- ------------------- European Equity $634,738 $666,929 Focus 24,416 109,000
Pursuant to an agreement dated July 30, 2001, Credit Suisse First Boston ("CSFB"), an affiliate of CSAM, was engaged by Global Telecommunications, European Equity and Focus to act as the funds' securities lending agent. Beginning on August 13, 2001, CSFB began lending the funds' securities. For the period ended August 31, 2001, European Equity and Focus earned $51 and $133, respectively from securities lending transactions. Pending receipt of an exemption from the Securities and Exchange Commission ("SEC"), CSFB has agreed to charge the funds fees for its securities lending activities equal to its costs in providing services as securities lending agent. CSFB also has voluntarily agreed to waive its fees for the securities lending agent services that it provides. CSFB may discontinue its voluntary fee waivers at any time. J) OTHER -- Securities denominated in currencies other than U.S. dollars are subject to changes in value due to fluctuations in exchange rates. Some countries in which the Funds invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is a deterioration in a country's balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad. The securities exchanges of certain foreign markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisitions and dispositions of securities by each Fund may be inhibited. In addition, a significant proportion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by a Fund. The Global Telecommunications Fund, Global Health Sciences Fund, Global New Technologies Fund and Global Financial Services Fund invest a high percentage of their assets in specific sectors of the market, especially 71 telecommunications, health sciences, technology, and financial services. As a result, the financial, economic, business and political developments in a particular sector of the market, positive or negative, have a greater impact on the fund's net asset value and will cause its shares to fluctuate more than if the fund did not concentrate its investments in a particular sector. In addition, these funds are sector concentrated and, under normal market conditions, they will invest 65% or more of their net assets in a group of related industries within the telecommunications, technology, health sciences and financial services sectors, as applicable, of the market. NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Pursuant to investment advisory agreements, Credit Suisse Asset Management, LLC ("CSAM"), an indirect, wholly-owned subsidiary of Credit Suisse Group, serves as investment adviser for each of the seven Funds described herein. For its advisory services, CSAM is entitled to receive the following fees, computed daily and payable monthly on each Fund's average daily net assets:
FUND ANNUAL RATE ---- ----------- Global Telecommunications 1.00% of average daily net assets Global Health Sciences 1.00% of average daily net assets Global New Technologies 1.00% of average daily net assets Global Financial Services 0.90% of average daily net assets European Equity 1.00% of average daily net assets Focus 0.75% of average daily net assets Municipal Bond 0.70% of average daily net assets
CSAM may, at its discretion, voluntarily waive all or a portion of its advisory fee for any of the Funds. For the period or year ended August 31, 2001, advisory fees and waivers for each of the Funds were as follows:
GROSS NET ADVISORY ADVISORY FUND FEE WAIVER FEE ---- --- ------ --- Global Telecommunications $2,610,244 $(289,209) $2,321,035 Global Health Sciences 967,427 (249,007) 718,420 Global New Technologies 19,150 (19,150) -- Global Financial Services 11,795 (11,795) -- European Equity 231,802 (212,804) 18,998 Focus 114,684 (114,684) -- Municipal Bond 136,894 (129,705) 7,189
72 CSAM reimbursed expenses of Global New Technologies, Global Financial Services, European Equity, Focus and Municipal Bond in the amount of $113,893, $141,473, $9,570, $143,057 and $38,463, respectively, for the year or period ended August 31, 2001. For its sub-advisory services, CSAM pays Credit Suisse Asset Management Limited ("CSAM Limited"), an indirect, wholly-owned subsidiary of Credit Suisse Group, an annual fee equal to .50%, .45% and .50% of the net quarterly amount (after fee waivers and reimbursements) received by CSAM for CSAM's services as adviser for Global New Technologies, Global Financial Services and European Equity, respectively. For the period or year ended August 31, 2001, CSAM Limited was not entitled to receive any fees from CSAM for sub-advisory services provided to Global New Technologies, Global Financial Services or European Equity. Boston Financial Data Services, Inc. ("BFDS") serves as each Fund's transfer and dividend disbursement agent. The Funds have an arrangement with their transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of their transfer agent expenses. For the period or year ended August 31, 2001, the Funds received credits or reimbursements under this arrangement as follows:
FUND AMOUNT ---- ------ Global Telecommunications $44,872 Global Health Sciences 7,765 Global New Technologies 141 Global Financial Services 4 European Equity 1,258 Focus 539 Municipal Bond 513
Certain brokers, dealers and financial representatives provide transfer agent related services to the Funds, and receive compensation for these services from CSAM. CSAM is then reimbursed by the Funds. For the year ended August 31, 2001, the Funds reimbursed CSAM the following amounts, which are included in the Fund's transfer agent expense:
FUND AMOUNT ---- ------ Global Telecommunications $231,300 Global Health Sciences 74,801 European Equity 20,498 Focus 4,540 Municipal Bond 182
73 Credit Suisse Asset Management Securities, Inc. ("CSAMSI") , an affiliate of CSAM, serves as co-administrator to each Fund. PFPC, Inc. ("PFPC"), an indirect, wholly-owned subsidiary of PNC Financial Services Group, also serves as each Fund's co-administrator. For administration services, CSAMSI is entitled to receive from each Fund, except Global Telecommunications, a fee calculated at an annual rate of .10% of the Fund's average daily net assets of Common, Advisor, Class A, Class B and Class C shares. For Global Telecommunications, CSAMSI is entitled to receive a fee calculated at an annual rate of .05% of the Fund's first $125 million in average daily nets assets of Common and Advisor shares and .10% of average daily net assets of Common and Advisor shares over $125 million. No compensation is payable by the Funds to CSAMSI for co-administration services for the Institutional shares. CSAMSI may, at its discretion, voluntarily waive all or a portion of its administration fee for any of the Funds. For the period or year ended August 31, 2001, co-administration fees earned and waived by CSAMSI were as follows:
GROSS NET FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE ---- --------------------- ------ --------------------- Global Telecommunications $185,878 $(90,142) $95,736 Global Health Sciences 96,743 -- 96,743 Global New Technologies 1,915 (1,281) 634 Global Financial Services 1,311 (824) 487 European Equity 23,180 (9,085) 14,095 Focus 2,656 (2,414) 242 Municipal Bond 3,909 (3,880) 29
For administration services, PFPC received a fee, for the period September 1, 2000 through February 4, 2001, on each Fund's average daily net assets, subject to a minimum annual fee and exclusive of out-of-pocket expenses, as follows:
FUND ANNUAL RATE ---- ----------- Global Telecommunications, Global Health .11% for first $500 million Sciences, Global New Technologies, Global .09% for next $1 billion Financial Services & European Equity .07% for over $1.5 billion Focus .10% for first $500 million .08% for next $1 billion .06% for over $1.5 billion Municipal Bond .07% for first $150 million .06% for next $150 million .05% for over $300 million
74 Effective February 5, 2001, PFPC receives a fee calculated on each Fund's average daily net assets, subject to a minimum annual fee and exclusive of out-of-pocket expenses, as follows:
FUND ANNUAL RATE ---- ----------- Global Telecommunications, Global Health .08% for first $500 million Sciences, Global New Technologies, Global .07% for next $1 billion Financial Services & European Equity .06% for over $1.5 billion Focus .075% for first $500 million .065% for next $1 billion .055% for over $1.5 billion Municipal Bond .07% for first $150 million .06% for next $150 million .05% for over $300 million
For the period or year ended August 31, 2001, the co-administration fees earned by PFPC (including out-of-pocket expenses) were as follows:
GROSS NET FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE ---- --------------------- ------ --------------------- Global Telecommunications $257,499 $ -- $257,499 Global Health Sciences 96,576 -- 96,576 Global New Technologies 3,669 (1,649) 2,020 Global Financial Services 2,513 (1,113) 1,400 European Equity 25,098 (21,888) 3,210 Focus 14,412 (11,947) 2,465 Municipal Bond 14,709 -- 14,709
In addition to serving as each Fund's co-administrator, CSAMSI serves as distributor to each Fund. CSAMSI receives compensation from each Fund's Common shares under the co-administration agreement for shareholder servicing and distribution. Under the Shareholder Servicing and Distribution Plan for the Common shares of each Fund, CSAMSI receives a fee calculated at an annual rate of .25% of the average daily net assets of the Common shares. For the Advisor shares of Global Telecommunications, the fee is calculated at an annual rate of .50% of the average daily net assets. For Class A shares of Focus, the fee is calculated at an annual rate of .25% of the average daily net assets. For Class B and Class C shares of Focus, the fee is 75 calculated at an annual rate of 1.00% of average daily net assets. For the period or year ended August 31, 2001, shareholder services fees earned by CSAMSI were as follows:
SHAREHOLDER SERVICING/ FUND DISTRIBUTION FEE ---- ---------------- Global Telecommunications Common Class $ 652,560 Advisor Class 1 ---------- $ 652,561 ========== Global Health Sciences Common Class $ 241,857 ========== Global New Technologies Common Class $ 4,788 ========== Global Financial Services Common Class $ 3,276 ========== European Equity Common Class $ 57,950 ========== Focus Common Class $ 15,005 Class A 11 Class B 1 Class C 64 ---------- $ 15,081 ========== Municipal Bond Common Class $ 19,547 ==========
For the year ended August 31, 2001 CSAMSI and its affiliates advised Focus that it retained $6 from commissions earned in the sale of Focus's shares. Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the Funds to provide certain financial printing services. For the period or year ended August 31, 2001, Merrill was paid by the Funds as follows:
FUND AMOUNT ---- ------ Global Telecommunications $81,905 Global Health Sciences 40,231 Global New Technologies 11,233 Global Financial Services 33,839 European Equity 38,884 Focus 46,591 Municipal Bond 43,582
76 NOTE 3. LINE OF CREDIT Through June 19, 2001, the Funds, together with other funds advised by CSAM (collectively, the "Participating Funds"), participated in a $350 million committed, unsecured, line of credit facility (the "Prior Credit Facility") with Deutsche Bank, A.G. 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 Participating Funds' share redemptions. Under the terms of the Prior Credit Facility, the Participating Funds paid an aggregate commitment fee at a rate of .075% per annum on the entire amount of the Prior Credit Facility, which was allocated among the Participating Funds in such manner as was determined by the governing Boards of the Participating Funds. In addition, the Participating Funds paid interest on borrowings at the Federal funds rate plus .50%. Effective June 20, 2001, the Participating Funds, together with additional funds advised by CSAM (collectively with the Participating Funds, the "New Participating Funds"), established a new $200 million committed, unsecured, line of credit facility (the "New Credit Facility") with Deutsche Bank, A.G. as administrative agent, State Street Bank and Trust Company as operations agent, BNP Paribas as syndication agent and certain other lenders, for the same purposes as the Prior Credit Facility. Under the terms of the New Credit Facility, the New Participating Funds pay an aggregate commitment fee at a rate of .10% per annum on the average unused amount of the New Prior Credit Facility, which is allocated among the New Participating Funds in such manner as was determined by the governing Boards of the New Participating Funds. The interest rate paid under the New Credit Facility is unchanged from the rate paid under the Prior Credit Facility. During the year ended August 31, 2001, the following Funds had borrowings under the Prior Credit Facility and/or the New Credit Facility:
AVERAGE MAXIMUM AVERAGE DAILY INTEREST DAILY LOAN FUND LOAN BALANCE RATE % OUTSTANDING ---- ------------ ------ ----------- Global Telecommunications $149,258 6.936% $8,780,000 Global Health Sciences 153,734 5.614 8,430,000 Focus 1,307 4.277 172,000 Municipal Bond 3,395 4.042 413,000
77 NOTE 4. PURCHASES AND SALES OF SECURITIES For the period or year ended August 31, 2001, purchases and sales of investment securities (excluding short-term investments) were as follows:
INVESTMENT SECURITIES FUND PURCHASES SALES ---- --------- ----------- Global Telecommunications $256,089,449 $346,605,925 Global Health Sciences 76,028,330 46,093,284 Global New Technologies 6,754,006 3,768,329 Global Financial Services 3,786,174 1,660,160 European Equity 29,381,045 33,177,690 Focus 22,274,229 21,056,792 Municipal Bond 25,739,794 39,572,855
At August 31, 2001, 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:
UNREALIZED UNREALIZED NET UNREALIZED FUND APPRECIATION DEPRECIATION APPRECIATION ---- ------------ ------------ ------------ Global Telecommunications $ 2,829,723 $(75,362,357) $(72,532,634) Global Health Sciences 24,576,250 (9,768,319) 14,807,931 Global New Technologies 28,594 (682,474) (653,880) Global Financial Services 43,380 (180,520) (137,140) European Equity 768,692 (1,452,297) (683,605) Focus 847,985 (2,616,313) (1,768,328) Municipal Bond 1,392,035 (3,313) 1,388,722
78 NOTE 5. CAPITAL SHARE TRANSACTIONS Each class of shares of each Fund is authorized to issue one billion full and fractional shares of capital stock, $.001 par value per share. Transactions in capital shares for each year were as follows:
GLOBAL TELECOMMUNICATIONS FUND ------------------------------------------------------------ COMMON CLASS ------------------------------------------------------------ FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 2001 AUGUST 31,2000 -------------------------- ------------------------- SHARES VALUE SHARES VALUE ---------- -------------- ---------- ------------- Shares sold 3,622,260 $ 167,203,463 10,430,600 $ 737,422,782 Shares issued in reinvestment of distributions 287,508 13,397,882 57,720 3,567,097 Shares redeemed (5,664,109) (259,564,665) (5,247,593) (369,497,412) ---------- -------------- ---------- ------------- Net increase (decrease) (1,754,341) $ (78,963,320) 5,240,727 $ 371,492,467 ========== ============== ========== =============
GLOBAL TELECOMMUNICATIONS FUND -------------------------- ADVISOR CLASS -------------------------- FOR THE YEAR ENDED AUGUST 31, 2001(1) -------------------------- SHARES VALUE -------------------------- Shares sold 25 $ 1,000 ---------- ------------ Net increase 25 $ 1,000 ========== ============
GLOBAL HEALTH SCIENCES FUND ------------------------------------------------------------- COMMON CLASS ------------------------------------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 2001 AUGUST 31, 2000(2) --------------------------- --------------------------- SHARES VALUE SHARES VALUE Shares sold 6,046,881 $ 124,234,896 4,232,530 $ 83,655,931 Shares issued in reinvestment of distributions 385,551 8,505,255 -- -- Shares redeemed (4,860,142) (92,254,560) (3,628,441) (67,522,268) ----------- -------------- ----------- ------------ Net increase 1,572,290 $ 40,485,591 604,089 $ 16,133,663 =========== ============== =========== ============
79
GLOBAL NEW GLOBAL FINANCIAL TECHNOLOGIES FUND SERVICES FUND ---------------------- ------------------------ COMMON CLASS COMMON CLASS ---------------------- ------------------------ FOR THE FOR THE YEAR ENDED YEAR ENDED AUGUST 31, 2001(3) AUGUST 31, 2001(4) ---------------------- ------------------------ SHARES VALUE SHARES VALUE ------- ----------- -------- ------------ Shares sold 334,624 $ 3,314,472 219,718 $ 2,188,666 Shares redeemed (6,842) (58,152) (812) (7,157) ------- ----------- -------- ------------ Net increase 327,782 $ 3,256,320 218,906 $ 2,181,509 ======= =========== ======== ============
EUROPEAN EQUITY FUND --------------------------------------------------------- COMMON CLASS --------------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2001 AUGUST 31, 2000 -------------------------- ---------------------------- SHARES VALUE SHARES VALUE ---------- ------------ ----------- --------------- Shares sold 8,645,716 $ 76,575,873 10,330,170 $ 125,018,796 Shares issued in reinvestment of dividends and distributions 492,172 4,424,630 11,320 132,331 Shares redeemed (9,227,465) (82,828,871) (10,342,282) (126,988,697) ---------- ------------ ----------- --------------- Net decrease (89,577) $ (1,828,368) (792) $ (1,837,570) ========== ============ =========== ===============
EUROPEAN EQUITY FUND --------------------- INSTITUTIONAL CLASS --------------------- FOR THE YEAR ENDED AUGUST 31 ,2000(5) --------------------- SHARES VALUE ------ ---------- Shares issued in reinvestment of distributions 48 $ 567 Shares redeemed (10,051) (121,497) ------- ---------- Net decrease (10,003) $ (120,930) ======= ==========
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FOCUS FUND ----------------------------------------------------- COMMON CLASS ----------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2001 AUGUST 31, 2000 ----------------------- ------------------------ SHARES VALUE SHARES VALUE ------- ------------ --------- ------------ Shares sold 243,883 $ 4,115,387 176,045 $ 3,150,183 Shares exchanged due to merger 384,416 5,074,959 -- -- Shares issued in reinvestment of distributions 17,797 300,770 4,960 75,842 Shares redeemed (215,353) (3,251,447) (41,610) (757,584) ------- ------------ --------- ------------ Net increase 430,743 $ 6,239,669 139,395 $ 2,468,441 ======= ============ ========= ============
FOCUS FUND ----------------------------------------------------- INSTITUTIONAL CLASS ----------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2001 AUGUST 31, 2000 ---------------------- ------------------------ SHARES VALUE SHARES VALUE ------- ------------ --------- ------------ Shares sold 59,525 $ 961,781 492,615 $ 8,749,735 Shares issued in reinvestment of distributions 43,769 744,072 86,539 1,293,067 Shares redeemed (70,592) (1,006,352) (1,782,034) (27,333,275) ------- ------------ ---------- ------------- Net increase (decrease) 32,702 $ 699,501 (1,202,880) $ (17,290,473) ======= ============ ========== =============
FOCUS FUND FOCUS FUND ----------------------- ------------------------- CLASS A CLASS B ----------------------- ------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2001(6) AUGUST 31, 2001(6) ----------------------- ------------------------- SHARES VALUE SHARES VALUE ------- ------------ ---------- ------------- Shares sold 4,813 $ 68,478 81 $ 1,150 ------- ------------ ---------- ------------- Net increase 4,813 $ 68,478 81 $ 1,150 ======= ============ ========== =============
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FOCUS FUND ---------------------- CLASS C ---------------------- FOR THE YEAR ENDED AUGUST 31, 2001(6) ---------------------- SHARES VALUE ------- --------- Shares sold 7,613 $ 106,350 ------ --------- Net increase 7,613 $ 106,350 ====== =========
MUNICIPAL BOND FUND ---------------------------------------------------------- COMMON CLASS ---------------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2001 AUGUST 31, 2000 ------------------------ -------------------------- SHARES VALUE SHARES VALUE --------- ------------- ----------- --------- Shares sold 295,675 $ 4,427,093 25,803 $ 369,861 Shares exchanged due to merger 1,490,041 22,307,654 -- -- Shares issued in reinvestment of distributions 18,292 273,283 929 13,086 Shares redeemed (619,744) (9,250,259) (5,265) (74,484) --------- ------------- ----------- --------- Net increase 1,184,264 $ 17,757,771 21,467 $ 308,463 ========= ============= =========== =========
MUNICIPAL BOND FUND ------------------------------------------------------------ INSTITUTIONAL CLASS ------------------------------------------------------------ FOR THE YEAR ENDED FOR THE YEAR ENDED AUGUST 31, 2001 AUGUST 31, 2000 ------------------------- --------------------------- SHARES VALUE SHARES VALUE --------- ------------- ----------- ------------ Shares sold 670,970 $ 10,148,927 5,754 $ 80,042 Shares issued in reinvestment of distributions 31,651 466,996 58,141 817,246 Shares redeemed (1,390,250) (20,800,027) (621,552) (8,787,386) --------- ------------- ----------- ------------ Net decrease (687,629) $ (10,184,104) (557,657) $ (7,890,098) ========= ============= =========== ============ -------------------------------------------------------------------------------------------------
(1) For the period May 10, 2001 (inception date) through August 31, 2001. (2) For the period November 1, 1999 to August 31, 2000. Effective May 1, 2000, Global Health Sciences changed its fiscal and tax year ends from October 31st to August 31st, which was approved by the Fund's Board of Directors on May 1, 2000. (3) For the period December 22, 2000 (inception date) through August 31, 2001. (4) For the period December 28, 2000 (inception date) through August 31, 2001. (5) For the period ended January 7, 2000 (ceased operations). (6) For the period July 31, 2001 (inception date) through August 31, 2001. 82 On August 31, 2001, the number of shareholders that held 5% or more of the outstanding shares of each class of the Funds are as follows:
NUMBER OF APPROXIMATE PERCENTAGE SHAREHOLDERS OF OUTSTANDING SHARES ------------ ---------------------- Global Telecommunications Advisor Class 1 100.00% Global New Technologies Common Class 1 94.57% Global Financial Services Common Class 1 95.93% Focus Common Class 1 11.17% Institutional Class 4 95.54% Class A 3 98.33% Class B 1 86.69% Class C 5 98.94% Municipal Bond Institutional Class 6 97.95%
NOTE 6. CAPITAL LOSS CARRYOVER At August 31, 2001, capital loss carryovers were available to offset future realized gains as follows: $19,416,214 in Global Telecommunications which expires in 2009, $222,906 in Global Health Sciences which expires in 2009, $117,653 in European Equity which expires in 2009 and $438,300 in Focus which expires in 2007. In addition, Global Telecommunications, Global Health Sciences, Global New Technologies, Global Financial Services, European Equity and Focus had deferred post October losses of $108,028,068, $5,181,297, $414,081, $129,548, $1,542,209 and $3,323,421, respectively. 83 CREDIT SUISSE WARBURG PINCUS FUNDS REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and the Common and Advisor Class Shareholders of Credit Suisse Warburg Pincus Global Telecommunications Fund, Inc.; Common Class Shareholders of Credit Suisse Warburg Pincus Global Health Sciences Fund, Inc.; Common Class Shareholders of Credit Suisse Warburg Pincus Global New Technologies Fund, Inc.; Common Class Shareholders of Credit Suisse Warburg Pincus Global Financial Services Fund, Inc.; Common Class Shareholders of Credit Suisse Warburg Pincus European Equity Fund, Inc.; Common and Institutional Class Shareholders of Credit Suisse Warburg Pincus Focus Fund, Inc.; Common and Institutional Class Shareholders of Credit Suisse Warburg Pincus Municipal Bond Fund, Inc. In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Credit Suisse Warburg Pincus Global Telecommunications Fund, Inc. (formerly known as Warburg, Pincus Global Telecommunications Fund, Inc.), Credit Suisse Warburg Pincus Global Health Sciences Fund, Inc. (formerly known as Warburg, Pincus Global Health Sciences Fund, Inc.), Credit Suisse Warburg Pincus Global New Technologies Fund, Inc., Credit Suisse Warburg Pincus Global Financial Services Fund, Inc., Credit Suisse Warburg Pincus European Equity Fund, Inc. (formerly known as Warburg, Pincus European Equity Fund, Inc.), Credit Suisse Warburg Pincus Focus Fund, Inc. (formerly known as Warburg, Pincus Focus Fund, Inc.), and Credit Suisse Warburg Pincus Municipal Bond Fund, Inc. (formerly known as Warburg, Pincus Municipal Bond Fund, Inc.) (all funds collectively referred to as the "Funds") at August 31, 2001, the results of each of their operations for the year (or periods) then ended, the changes in each of their net assets for each of the two years (or periods) in the period then ended and the financial highlights (financial highlights for Class A, B and C of Credit Suisse Warburg Pincus Focus Fund, Inc. are presented in a separate report) for each of the years (or periods) presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2001 by correspondence with the custodians and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania October 15, 2001 84 CREDIT SUISSE WARBURG PINCUS FUNDS TAX INFORMATION LETTER AUGUST 31, 2001 IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF CREDIT SUISSE WARBURG PINCUS EUROPEAN EQUITY FUND (UNAUDITED) During the fiscal year ended August 31, 2001, the Credit Suisse Warburg Pincus European Equity Fund distributed $347,947 of foreign source income on which the Fund paid foreign taxes of $47,402. This information is being furnished to you pursuant to notice requirements of Section 853(a) and 855(d) of the Internal Revenue Code 1986, as amended the "Code", and the Treasury Regulations thereunder. IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS (UNAUDITED) Corporate shareholders should note for the year ended August 31, 2001, the percentage of the Fund's investment income (I.E., net investment income plus short-term capital gains) that qualifies for the intercorporate dividends received deduction is as follows:
FUND PERCENTAGE ---- ---------- Global Health Sciences 4.55% Focus 18.36%
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS (UNAUDITED) During the period or year ended August 31, 2001, the Funds declared the following dividends from realized capital gains:
SHORT-TERM LONG-TERM CAPITAL GAIN CAPITAL GAIN PER SHARE PER SHARE --------- --------- Global Telecommunications $1.6277 $0.7629 Global Health Sciences 0.7023 1.2178 European Equity 1.6672 0.3799 Focus 0.9044 0.3454
85 CREDIT SUISSE WARBURG PINCUS FUNDS CREDIT ASSET SUISSE MANAGEMENT P.O. BOX 9030, BOSTON, MA 02205-9030 800-WARBURG (800-927-2874) - www.warburg.com CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. CSEGG-2-0801