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OMB APPROVAL
OMB Number: 3235-0570
Expires: October 31, 2006
Estimated average burden
hours per response. . . . . . .19.3
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03907
The Empire Builder Tax Free Bond Fund
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
3435 Stelzer Road, Columbus, OH 43219
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
BISYS Fund Services 3435 Stelzer Road, Columbus, OH, 43219
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-800-847-5886
Date of fiscal year end: February 29, 2005
Date of reporting period: August 31, 2004
Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Reports to Stockholders.
Include a copy of the report transmitted to stockholders pursuant to Rule
30e-1 under the Act (17 CFR 270.30e-1).
- ---------------------------- [LOGO] EMPIRE BUILDER ----------------------------
----------
3435 Stelzer Road
Columbus, Ohio 43219
1-800-847-5886
Dear Shareholder,
We are pleased to present The Empire Builder Tax Free Bond Fund
Semi-Annual Report for the six months ended August 31, 2004.
The portfolio continues to have a good year. For the period January 1
through August 31, 2004 the Builder Class was up 1.68%, while the Premier Class
was up 1.87%. As of August 31, 2004 the average maturity of the Fund was 4.56
years. Last year we shortened the maturity of the Fund, in order to reduce our
maturity and interest rate risk for the portfolio. We will continue for the near
future to keep the average life of the portfolio shorter because we are not
optimistic about the long-term market. We are now in a rising interest rate
environment, and our shorter average life should protect the market value of the
Fund. Since June 30, 2004 the Federal Reserve has raised the Discount Rate three
times, which now stands at 1.75%.
In our opinion, The Empire Builder Tax Free Bond Fund is well positioned
for the next year. The no-load structure continues to offer value to the
shareholder because there is no charge to purchase units. We also recommend our
automatic investment program (also known as dollar cost averaging*) that allows
you to follow a disciplined investment plan. Please call the customer service
desk at 1-800-847-5886 for information on how to participate. We look forward to
helping you meet your investment needs.
Sincerely,
/s/ Seth M. Glickenhaus
Seth M. Glickenhaus
President
- ----------------------------------------------
*Average Annual Total Return
----------------------------
As of June 30, 2004
1 Year 5 Year 10 Year
Builder Class -0.47% 5.01% 5.23%
Premier Class -0.25% 5.30% 5.45%*
- ----------------------------------------------
For the reporting period March 1, 2004 through August 31, 2004 the Builder Class
was up 0.51% and the Premier Class was up 0.62%.
*Dollar cost averaging does not insure a profit and does not protect against
loss in declining markets. An investor should consider his or her financial
ability to continue making additional investments through periods of low share
price levels.
- ---------------------------- [LOGO] EMPIRE BUILDER ----------------------------
----------
3435 Stelzer Road
Columbus, Ohio 43219
1-800-847-5886
This report must be preceded or accompanied by a prospectus. For more complete
information including charges and expenses, please call 1-800-847-5886 to
receive a prospectus. Read the prospectus carefully before investing or sending
money.
The fund's income may be subject to certain state and local taxes and, depending
on your tax status, the federal alternative minimum tax (AMT).
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, and (2) ongoing costs, including management fees; and other Fund expenses
This example is intended to help you understand your ongoing costs (in dollars)
of investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period from March 1, 2004 through August 31,
2004.
Actual Expenses
The table below provides information about actual account values and actual
expenses. You may use the information below, together with the amount you
invested, to estimate the expenses that you paid over the period. Simply divide
your account value by $1,000 (for example, an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the table under the
heading entitled "Expenses Paid During Period" to estimate the expenses you paid
on your account during this period.
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period
3/1/04 8/31/04 3/1/04 - 8/31/04 3/1/04 - 8/31/04
------------- ------------- ---------------- ----------------
The Empire Builder Tax Free Bond Fund Builder Class $ 1,000.00 $ 1,005.10 $ 5.66 1.12%
Premier Class 1,000.00 1,006.20 4.55 0.90%
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use this information to compare this 5% hypothetical example with the 5%
hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs. Therefore, the
table is useful in comparing ongoing costs only, and will not help you determine
the relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Beginning Ending Expense Paid Expense Ratio
Account Value Account Value During Period* During Period
3/1/04 8/31/04 3/1/04 - 8/31/04 3/1/04 - 8/31/04
------------- ------------- ---------------- ----------------
The Empire Builder Tax Free Bond Fund Builder Class $ 1,000.00 $ 1,019.56 $ 5.70 1.12%
Premier Class 1,000.00 1,020.67 4.58 0.90%
* Expenses are equal to the average account value times the Fund's annualized
expense ratio multiplied by the number of days in the most recent fiscal
half-year divided by the number of days in the fiscal year.
Past performance does not guarantee future results.
Not FDIC insured. May lose value. No bank guarantee.
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004
(Unaudited)
Principal Fair Value
Credit Ratings** Municipal Securities (99.7%) Amount (Note 2)
- ---------------- ---------------------------- ---------- -----------
New York City (7.8%)
Aaa/AAA New York City, General Obligation, Series B, 5.25%,
8/1/2017, Callable 8/1/2007 @ 101, (AMBAC)........................ $ 750,000 $ 813,863
NR/AAA New York City, General Obligation, Series B, 5.125%,
8/1/2019, Callable 8/1/2010 @ 101, (FGIC)......................... 2,000,000 2,136,419
Aaa/AAA New York City, General Obligation, Series B, 5.375%,
8/1/2022, Callable 8/1/2007 @ 101, (MBIA)......................... 1,250,000 1,360,788
Aaa/AAA New York City, Health & Hospitals Corporation,
Health System Revenue, Series A, 5.50%,
2/15/2018, Callable 2/15/2012 @ 100, (FSA)........................ 1,000,000 1,110,750
Aaa/AAA New York City Municipal Water Finance Authority,
Water & Sewer System Revenue, 6.125%, 6/15/2020,
Prerefunded 6/15/2005 @ 101....................................... 1,000,000 1,047,360
AA2/AA+ New York City Transitional Finance Authority, Future Tax Revenue,
Series B, 5.25%, 11/15/2004, Non Callable......................... 300,000 302,424
Aaa/AAA New York City, General Obligation, Series B, Variable Rate, 1.34%,
8/15/2022*, Non Callable, (MBIA).................................. 2,000,000 2,000,000
-----------
Total New York City.................................................. 8,771,604
-----------
New York State Agencies (66.4%)
Long Island Power Authority (6.2%)
Baa1/A- Long Island Power Authority, Electric Systems Revenue,
Series B, 3.00%, 12/1/2004, Non Callable.......................... 4,445,000 4,460,558
Aaa/AAA Long Island Power Authority, Electric Systems Revenue,
Series A, 5.50%, 12/1/2012, Non Callable, (FSA)................... 1,210,000 1,404,495
Aaa/AAA Long Island Power Authority, Electric Systems Revenue,
Series A, 5.00%, 9/1/2034, Callable 9/1/2014 @ 100, (AMBAC)....... 1,000,000 1,016,520
-----------
Total Long Island Power Authority.................................... 6,881,573
-----------
New York State Dormitory Authority (32.8%)
A3/AA- Albany County Airport Project, State Service Contract, 5.25%,
4/1/2013, Callable 4/1/2008 @ 101................................. 1,200,000 1,288,584
NR/AAA Albany County Airport Project, State Service Contract, 5.25%,
4/1/2017, Callable 4/1/2008 @ 101, (MBIA)......................... 1,000,000 1,068,220
Aaa/AAA Augustana Lutheran Home for the Aged, Series A, 5.50%,
8/1/2020, Callable 8/1/2010 @ 101, (MBIA)(FHA).................... 920,000 1,008,412
Aaa/AAA Augustana Lutheran Home for the Aged, Series A, 5.50%, 8/1/2030,
Callable 8/1/2010 @ 101, (MBIA)(FHA).............................. 750,000 795,465
Aaa/AAA Columbia University, Series B, 5.375%, 7/1/2018, Callable
7/1/2012 @ 100.................................................... 500,000 557,160
Aaa/AAA Columbia University, Series B, 5.375%, 7/1/2019, Callable
7/1/2012 @ 100.................................................... 1,000,000 1,107,870
Aaa/AAA Columbia University, Series B, 5.375%, 7/1/2020, Callable
7/1/2012 @ 100.................................................... 1,000,000 1,101,460
The accompanying notes are an integral part of the financial statements.
3
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004 -- continued
(Unaudited)
Principal Fair Value
Credit Ratings** Municipal Securities--continued Amount (Note 2)
- ---------------- ------------------------------- ---------- -----------
New York State Agencies--continued
New York State Dormitory Authority--continued
Aaa/AAA Fashion Institue of Technology Student Housing, 5.00%, 7/1/2029,
Callable 7/1/2014 @ 100, (FGIC)................................... $ 1,300,000 $ 1,327,248
Aaa/AAA Lutheran Medical Center, 5.00%, 8/1/2016, Callable
2/1/2013 @ 100.................................................... 985,000 1,070,124
Aaa/AAA Maimonides Medical Center, FHA Insured Mortgage Hospital
Revenue, 5.00%, 8/1/2033, Callable 8/1/2014 @ 100, (MBIA)......... 535,000 544,181
Aaa/AAA Mount Sinai School of Medicine, 5.25%, 7/1/2013,
Non Callable, (MBIA).............................................. 4,500,000 5,046,164
Aaa/AAA New York Medical College, 5.25%, 7/1/2013, Callable
7/1/2008 @ 101, (MBIA)............................................ 1,015,000 1,106,401
NR/AA- New York State Department of Health, 5.25%, 7/1/2014,
Non Callable...................................................... 1,000,000 1,104,980
Aaa/AAA New York University, Series 2, 5.50%, 7/1/2018, Callable
7/1/2011 @ 100, (AMBAC)........................................... 500,000 560,560
NR/AAA Park Ridge Housing, Inc., 6.375%, 8/1/2020, Callable
8/1/2010 @ 101, (FNMA)............................................ 1,000,000 1,136,320
NR/AAA Park Ridge Housing, Inc., 6.50%, 8/1/2025, Callable
8/1/2010 @ 101, (FNMA) ........................................... 1,470,000 1,665,863
Aaa/NR Rochester Institute of Technology, Series A, 5.25%, 7/1/2016,
Callable 7/1/2012 @ 100, (AMBAC).................................. 2,045,000 2,252,772
Aaa/NR Rochester Institute of Technology, Series A, 5.25%, 7/1/2017,
Callable 7/1/2012 @ 100, (AMBAC).................................. 2,155,000 2,354,079
Aaa/AAA School Districts Financing, Series C, 5.25%, 4/1/2021,
Callable 10/1/2012 @ 100, (MBIA).................................. 1,300,000 1,398,176
Aaa/AAA Special Acts School Districts Program, 6.00%, 7/1/2019, Callable
7/1/2005 @ 102, (MBIA)............................................ 3,540,000 3,732,788
NR/AAA State University, 5.375%, 7/1/2021, Callable
7/01/2008 @ 102, (MBIA)........................................... 865,000 948,542
NR/AAA State University, 5.375%, 7/1/2021, Prerefunded
7/01/2008 @ 102, (MBIA)........................................... 325,000 368,778
Aaa/AAA Upstate Community Colleges, Series A, 6.00%, 7/1/2019, Callable
7/1/2010 @ 101, (FSA)............................................. 1,000,000 1,157,780
Aaa/AAA Upstate Community Colleges, Series A, 6.00%, 7/1/2020, Callable
7/1/2010 @ 101, (FSA)............................................. 845,000 976,372
NR/AAA Westchester County, Court Facilities, 5.25%, 8/1/2018, Callable
2/1/2009 @ 101, (MBIA)............................................ 2,800,000 2,989,420
-----------
Total New York State Dormitory Authority............................. 36,667,719
-----------
New York State Energy, Research & Development (0.9%)
Aaa/AAA Western New York Nuclear Service Center, Series PJ, 5.40%,
4/1/2005, Non Callable, (CAPMAC).................................. 1,020,000 1,044,041
-----------
The accompanying notes are an integral part of the financial statements.
4
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004 -- continued
(Unaudited)
Principal Fair Value
Credit Ratings** Municipal Securities--continued Amount (Note 2)
- ---------------- ------------------------------- ---------- -----------
New York State Environmental Facilities Corp. (1.5%)
Aaa/AAA State Water Pollution Control Revenue, Revolving Fund, Pooled
Loan, 5.90%, 1/15/2018, Prerefunded 1/15/2006
@ 102, (POL CTL-SRF).............................................. $ 785,000 $ 846,466
Aaa/AAA State Water Pollution Control Revenue, Revolving Fund, Pooled
Loan, 5.90%, 1/15/2018, Callable 1/15/2006 @ 102,
(POL CTL-SRF)..................................................... 725,000 777,128
-----------
Total New York State Environmental Facilities Corporation............ 1,623,594
-----------
New York State Medical Care Facilities Finance Agency (1.0%)
Aaa/AAA Hospital & Nursing Home, St. Vincent's Hospital Project, 6.20%,
2/15/2021, Callable 2/15/2005 @ 101, (AMBAC)(FHA)................. 1,060,000 1,084,242
-----------
New York State Metropolitan Transportation Authority (14.9%)
A2/A Metropolitan Transportation Authority Revenue, Transportation
Revenue, Series A, 3.00%,11/15/2004, Non Callable................. 250,000 250,808
A3/AA- Metropolitan Transportation Authority Revenue, State Service
Contract Series B, 5.00%, 7/1/2005, Non Callable.................. 3,000,000 3,084,750
Aaa/AAA Metropolitan Transportation Authority Revenue, Transportation
Revenue, Series A, 5.00%, 11/15/2006, Non Callable, (FSA)......... 12,000,000 12,816,240
Aa3/AA- Triborough Bridge & Tunnel Authority Revenue, General Revenue,
Series B, 2.00%, 11/15/2004, Non Callable......................... 525,000 525,798
-----------
Total New York State Metropolitan Transportation
Authority (0.7%)................................................... 16,677,596
-----------
New York State Thruway Authority (5.4%)
Aaa/AAA Highway & Bridge Trust Fund Bonds, Series A, 5.25%, 4/1/2006,
Non Callable, (FGIC).............................................. 1,500,000 1,584,225
Aaa/AAA Highway & Bridge Trust Fund Bonds, Series A, 5.50%, 4/1/2014
Callable 4/1/2011 @ 101, (FGIC)................................... 1,500,000 1,697,190
Aaa/AAA Highway & Bridge Trust Fund Bonds, Series B, 5.25%, 4/1/2017,
Callable 10/1/2011 @ 100, (MBIA).................................. 2,500,000 2,719,800
-----------
Total New York State Thruway Authority............................... 6,001,215
-----------
New York State Urban Development Corporation (2.1%)
A3/AA- Empire State Development Corporation, University Facilities
Grants, 6.00%, 1/1/2009, Non Callable............................. 905,000 1,019,473
A3/AA- Community Enhancement Facilities, Series A, 5.00%, 4/1/2005,
Non Callable...................................................... 1,270,000 1,295,908
-----------
Total New York State Urban Development Corporation................... 2,315,381
-----------
Total New York State Agencies........................................ 74,263,900
The accompanying notes are an integral part of the financial statements.
5
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004 -- continued
(Unaudited)
Principal Fair Value
Credit Ratings** Municipal Securities--continued Amount (Note 2)
- ---------------- ------------------------------- ---------- -----------
Other New York State Bonds (22.6%)
Aaa/AAA Albany County, Airport Authority, Airport Revenue, Series A,
4.00%, 12/15/2004, Non Callable, (FSA)............................ $ 460,000 $ 463,464
A3/NR Albany Housing Authority, Limited Obligation, 6.25%, 10/1/2012,
Callable 10/1/2005 @ 102.......................................... 1,000,000 1,055,210
Aaa/AAA Attica, Central School District, General Obligation, 3.125%,
6/15/2005, Non Callable, (FGIC)................................... 425,000 430,784
Aaa/NR Binghamton, General Obligation, 2.50%, 3/15/2005,
Non Callable, (FSA) .............................................. 510,000 513,432
Aaa/AAA Buffalo Municipal Water Finance Authority, Water System Revenue,
5.75%, 7/1/2019, Callable 7/1/2005 @ 102, (FGIC).................. 500,000 526,210
Aaa/AAA Buffalo Sewer System Revenue Authority, Series I, 4.00%,
7/1/2005, Non Callable, (FSA)..................................... 1,000,000 1,021,309
Aaa/NR Chittenango, Central School District, General Obligation, 3.00%,
6/15/2005, Non Callable, (FSA).................................... 510,000 516,446
Aaa/NR Corning, City School District, General Obligation, 5.00%, 6/15/2012,
Non Callable, (FSA)............................................... 1,000,000 1,118,720
Aaa/NR Corning, City School District, General Obligation, 5.00%, 6/15/2013,
Callable 6/15/2012 @ 100, (FSA)................................... 970,000 1,071,811
Aaa/NR Corning, City School District, General Obligation, 5.00%, 6/15/2014,
Callable 6/15/2012 @ 100, (FSA)................................... 600,000 661,254
Aaa/AAA Evans, General Obligation, 6.80%, 4/15/2012,
Non Callable, (AMBAC)............................................. 225,000 277,475
Aaa/AAA Evans, General Obligation, 6.80%, 4/15/2013,
Non Callable, (AMBAC)............................................. 225,000 278,865
Aaa/NR Fayetteville Manlius, Central School District, General Obligation,
5.00%, 6/15/2016, Callable 6/15/2012 @ 101, (FGIC)................ 375,000 409,178
Aaa/NR Ilion, Central School District, General Obligation, Series B, 5.50%,
6/15/2015, Callable 6/15/2012 @ 101, (FGIC)....................... 550,000 628,546
Aaa/NR Ilion, Central School District, General Obligation, Series B, 5.50%,
6/15/2016, Callable 6/15/2012 @ 101, (FGIC)....................... 500,000 565,925
NR/AAA Lillian Cooper Housing Development Corporation Mortgage
Revenue, Series A, 7.00%, 1/1/2022, Callable 9/10/2004 @
100, (FNMA)(FHA).................................................. 1,070,000 1,071,241
Aaa/AAA Mount Sinai Union Free School District, General Obligation, 6.20%,
2/15/2012, Non Callable, (AMBAC).................................. 1,065,000 1,266,722
Aaa/NR Nassau County, General Obligation, Series D, 5.25%, 9/1/2004,
Non Callable, (FSA)............................................... 420,000 420,042
Aaa/AAA Niagara Falls Public Water Authority, Water & Sewer System
Revenue, Series A, 5.50%, 7/15/2028, Callable
7/15/2006 @ 100, (MBIA)........................................... 1,000,000 1,061,700
Aaa/AAA North Hempstead, General Obligation, Series B, 6.375%, 4/1/2009,
Non Callable, (FGIC).............................................. 570,000 658,555
Aaa/AAA North Hempstead, General Obligation, Series B, 6.40%, 4/1/2010,
Non Callable, (FGIC).............................................. 560,000 658,050
The accompanying notes are an integral part of the financial statements.
6
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004 -- continued
(Unaudited)
Principal Fair Value
Credit Ratings** Municipal Securities--continued Amount (Note 2)
- ---------------- ------------------------------- ---------- -----------
Other New York State Bonds--continued
NR/AAA Oneida County Industrial Development Agency, Mohawk Valley
Network, St. Luke's Memorial Hospital, 5.00%, 1/1/2013,
Callable 1/1/2008 @ 101, (FSA).................................... $ 2,000,000 $ 2,124,819
Aaa/NR Oyster Bay, General Obligation, 5.00%, 3/15/2011,
Non Callable, (FSA)............................................... 430,000 478,246
Aaa/NR Poughkeepsie Town, General Obligation, Series B, 2.00%,
12/15/2004, Non Callable, (MBIA).................................. 635,000 636,391
Aaa/NR Poughkeepsie Town, General Obligation, Series B, 2.00%,
12/15/2005, Non Callable, (MBIA).................................. 610,000 613,623
Aaa/NR Southern Cayuga, Central School District, General Obligation,
5.00%, 5/15/2014, Callable 5/15/2012 @ 100, (FSA)................. 400,000 440,456
Aaa/AAA Suffolk County, General Obligation, Series C, 5.00%, 9/15/2015,
Callable 9/15/2008 @ 101, (FGIC).................................. 965,000 1,034,924
Aaa/AAA Suffolk County, General Obligation, Series C, 5.00%, 9/15/2016,
Callable 9/15/2008 @ 101, (FGIC).................................. 550,000 587,703
Aaa/AAA Suffolk County, General Obligation, Series C, 5.00%, 9/15/2017,
Callable 9/15/2008 @ 101, (FGIC).................................. 480,000 511,219
Aaa/AAA Suffolk County, General Obligation, Series D, 5.00%, 11/1/2015,
Callable 11/1/2008 @ 101, (FGIC).................................. 1,125,000 1,208,565
Aaa/AAA Suffolk County, General Obligation, Series D, 5.00%, 11/1/2016,
Callable 11/1/2008 @ 101, (FGIC).................................. 1,110,000 1,187,966
Aaa/AAA Warren & Washington Counties Industrial Development Agency,
Civic Facilities Revenue, Glens Falls Hospital Project, Series B,
2.50%, 12/1/2004, Non Callable, (FSA)............................. 1,845,000 1,850,498
-----------
Total Other New York State Bonds..................................... 25,349,349
-----------
Puerto Rico (4.5%)
Baa1/A- Puerto Rico Commonwealth, General Obligation, 5.00%, 7/1/2030,
Mandatory Put 7/1/2012 @ 100...................................... 1,000,000 1,083,360
Aaa/AAA Puerto Rico Electric Power Authority Revenue, Series W,
6.50%, 7/1/2005, Non Callable, (MBIA) ........................... 750,000 781,673
A3/A- Puerto Rico Electric Power Authority Revenue, Series OO,
4.00%, 7/1/2006, Non Callable..................................... 500,000 518,765
Aaa/AAA Puerto Rico Municipal Finance Agency Revenue, Series A,
4.25%, 8/1/2005, Non Callable, (FSA).............................. 2,195,000 2,253,036
Aaa/AAA Puerto Rico Municipal Finance Agency, General Obligation, Series B,
5.00%, 8/1/2005, Non Callable, (FSA).............................. 400,000 413,284
-----------
Total Puerto Rico.................................................... 5,050,118
-----------
Total Municipal Securities (Cost $106,637,696)....................... 111,466,432
-----------
The accompanying notes are an integral part of the financial statements.
7
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004 -- continued
(Unaudited)
Principal Fair Value
Credit Ratings** Municipal Securities--continued Amount (Note 2)
- ---------------- ------------------------------- ---------- -----------
Short Term Investments (1.4%)
Dreyfus New York Municipal Cash Management Fund....................... $ 1,610,000 $ 1,610,000
-----------
Total Investments (Cost $108,247,696) (a) -- 101.1%................... $113,076,432
Other liabilities -- (1.1%)........................................... (1,211,507)
-----------
NET ASSETS -- 100.0%.................................................. $111,864,925
============
- ----------
Percentages indicated are based on net assets of $111,864,925.
(a) Represents cost for financial reporting purposes, is substantially the
same for federal income tax purposes, and differs from fair value by net
unrealized appreciation/depreciation as follows:
Unrealized appreciation $4,873,070
Unrealized depreciation (44,334)
----------
Net unrealized appreciation $4,828,736
==========
* The rate reflected is the rate in effect August 31, 2004. The maturity
date reflected is the final maturity date.
** Credit Ratings given by Moody's Investors Service Inc. and Standard &
Poor's Corporation (unaudited).
The accompanying notes are an integral part of the financial statements.
8
THE EMPIRE BUILDER TAX FREE BOND FUND
Portfolio of Investments -- August 31, 2004 -- continued
Moody's Standard & Poor's
Aaa AAA Instrument judged to be of the highest quality and
carrying the smallest amount of investment risk.
Aa AA Instrument judged to be of high quality by all
standards.
A A Instrument judged to be adequate quality by all
standards.
Baa BBB Instrument judged to be moderate quality by all
standards.
NR NR Not Rated. In the opinion of the Investment
Adviser, instrument judged to be of comparable
investment quality to rated securities which may
be purchased by the Fund.
For items possessing the strongest investment attributes of their category,
Moody's gives that letter rating followed by a number. The Standard & Poor's
ratings may be modified by the addition of a plus or minus sign to show relative
standing within the major rating categories.
Abbreviations used in this statement:
AMBAC Insured as to principal and interest by the American Municipal
Bond Assurance Corporation.
CAPMAC Insured as to principal and interest by Capital Markets
Assurance Corp.
FGIC Insured as to principal and interest by the Financial
Guarantee Insurance Corporation.
FHA Insured as to principal and interest by the Federal Housing
Administration.
FNMA Insured as to principal and interest by the Federal National
Mortgage Association.
FSA Insured as to principal and interest by Financial Security
Assurance.
MBIA Insured as to principal and interest by the Municipal Bond
Insurance Association.
POL CTL -- SRF Insured as to principal and interest by the Pollution Control
State Revenue Fund.
The accompanying notes are an integral part of the financial statements.
9
THE EMPIRE BUILDER TAX FREE BOND FUND
Statement of Assets and Liabilities
August 31, 2004
(Unaudited)
Assets:
Investments in securities, at fair value (cost $108,247,696) (Note 2)..................... $113,076,432
Cash...................................................................................... 10,462
Interest and dividend receivable.......................................................... 1,181,310
Prepaid expenses ......................................................................... 10,485
------------
Total Assets............................................................................ 114,278,689
Liabilities:
Dividends payable......................................................... $ 48,707
Payable for investments purchased......................................... 2,280,108
Advisory fee payable (Note 4)............................................. 37,024
Administrative services fee payable (Note 4).............................. 2,969
Other accrued expenses.................................................... 44,956
-----------
Total Liabilities....................................................... 2,413,764
------------
Net Assets................................................................... $111,864,925
============
Net Assets:
Net assets consist of:
Capital................................................................................... $106,370,591
Undistributed net investment income....................................................... 47,975
Net realized gains from investments....................................................... 617,623
Net unrealized appreciation from investments.............................................. 4,828,736
------------
Net Assets.............................................................................. $111,864,925
============
Builder Class:
Net Assets................................................................ $54,538,076
Shares of Beneficial Interest Outstanding................................. 3,030,798
-----------
Builder Class -- Net Asset Value
(offering and redemption price per share)............................... $ 17.99
===========
Premier Class:
Net Assets................................................................ $57,326,849
Shares of Beneficial Interest Outstanding................................. 3,185,121
-----------
Premier Class -- Net Asset Value
(offering and redemption price per share)............................... $ 18.00
===========
The accompanying notes are an integral part of the financial statements.
10
THE EMPIRE BUILDER TAX FREE BOND FUND
Statement of Operations
For the Period March 1, 2004 through August 31, 2004
(Unaudited)
Investment Income:
Interest.................................................................................. $2,007,560
Dividend ................................................................................. 7,215
----------
Total Investment Income................................................................... 2,014,775
Expenses:
Advisory fees (Note 4)................................................... $ 221,098
Administrative services fees (Note 4)..................................... 100,832
Transfer agency fees (Builder Class) (Note 4)............................. 84,710
Transfer agency fees (Premier Class) (Note 4)............................. 24,591
Custody fees.............................................................. 19,676
Fund accounting fees (Note 4)............................................. 32,654
Trustees' fees ........................................................... 13,756
Other fees................................................................ 78,171
-----------
Total Expenses.......................................................... 575,488
Less: Custody fee credit................................................ (4,447)
-----------
Total Net Expenses........................................................................ 571,041
----------
Net Investment Income........................................................................ 1,443,734
----------
Realized/Unrealized Gains (Losses) on Investments
(Notes 2 and 3)
Net realized gains from investment transactions........................... 128,865
Change in unrealized appreciation/depreciation
from investment transactions............................................ (1,027,646)
-----------
Net realized/unrealized gains (losses) from investment transactions..................... (898,781)
----------
Change in net assets resulting from operations............................................... $ 544,953
==========
The accompanying notes are an integral part of the financial statements.
11
THE EMPIRE BUILDER TAX FREE BOND FUND
Statements of Changes in Net Assets
For the Period
March 1,2004
through
August 31,2004 Year Ended
(Unaudited) February 29, 2004
------------ -----------------
From Investment Activities:
Operations:
Net investment income ..................................................... $ 1,443,734 $ 3,448,263
Net realized gains from investment transactions............................ 128,865 1,113,657
Change in unrealized appreciation/depreciation from
investment transactions................................................. (1,027,646) 339,136
------------ ------------
Change in net assets resulting from operations.......................... 544,953 4,901,056
------------ ------------
Distributions to shareholders from:
Net investment income -- Builder Class...................................... (665,202) (1,593,260)
Net investment income -- Premier Class...................................... (773,482) (1,842,382)
Net realized gains from investment transactions -- Builder Class............ -- (559,031)
Net realized gains from investment transactions -- Premier Class............ -- (610,097)
------------ ------------
Total distributions..................................................... (1,438,684) (4,604,770)
------------ ------------
Capital Transactions:
Proceeds from shares issued -- Builder Class................................ 1,450,520 2,865,115
Proceeds from shares issued -- Premier Class................................ 906,891 1,833,457
Dividends reinvested -- Builder Class....................................... 582,471 1,929,811
Dividends reinvested -- Premier Class....................................... 650,881 2,146,150
Value of shares redeemed -- Builder Class................................... (2,585,479) (6,113,946)
Value of shares redeemed -- Premier Class................................... (4,798,974) (4,107,168)
------------ ------------
Change in net assets from capital share transactions.................... (3,793,690) (1,446,581)
------------ ------------
Change in net assets.................................................... (4,687,421) (1,150,295)
Net Assets:
Beginning of period........................................................ 116,552,346 117,702,641
------------ ------------
End of period.............................................................. $111,864,925 $116,552,346
============ ============
Share Transactions:
Issued -- Builder Class..................................................... 81,041 158,501
Issued -- Premier Class..................................................... 50,862 101,203
Reinvested -- Builder Class................................................. 32,724 107,001
Reinvested -- Premier Class................................................. 36,555 118,931
Redeemed -- Builder Class................................................... (145,371) (338,191)
Redeemed -- Premier Class................................................... (269,811) (227,524)
------------ ------------
Change in shares........................................................... (214,000) (80,079)
------------ ------------
Undistributed net investment income........................................ $ 47,975 $ 42,925
============ ============
The accompanying notes are an integral part of the financial statements.
12
THE EMPIRE BUILDER TAX FREE BOND FUND
Financial Highlights
For a share of beneficial interest outstanding throughout each period
For the Period
March 1, 2004 Through
August 31, 2004 Year Ended Year Ended Year Ended
(Unaudited) --------------------- --------------------- ----------------------
--------------------- February 29, 2004 February 28, 2003 February 28, 2002
Builder Premier Builder Premier Builder Premier Builder Premier
Class Class Class Class Class Class Class Class
---------- --------- --------- --------- --------- --------- --------- ---------
Net Asset Value,
Beginning of
Period .................. $18.12 $18.13 $18.08 $18.08 $17.80 $17.80 $17.69 $17.69
------ ------ ------ ------ ------ ------ ------ ------
Investment
Activities:
Net investment
income ................ 0.21 0.23 0.51 0.55 0.61 0.66 0.72 0.77
Net realized/
unrealized
gains/
(losses) on
investments ........... (0.13) (0.13) 0.22 0.23 0.54 0.54 0.27 0.27
------ ------ ------ ------ ------ ------ ------ ------
Total from
Investment
Operations .............. 0.08 0.10 0.73 0.78 1.15 1.20 0.99 1.04
------ ------ ------ ------ ------ ------ ------ ------
Distributions:
Net investment
income ................ (0.21) (0.23) (0.51) (0.55) (0.61) (0.66) (0.71) (0.76)
Net realized
capital gains ......... -- -- (0.18) (0.18) (0.26) (0.26) (0.17) (0.17)
------ ------ ------ ------ ------ ------ ------ ------
Total
distributions ......... (0.21) (0.23) (0.69) (0.73) (0.87) (0.92) (0.88) (0.93)
------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value,
End of Period ........... $17.99 $18.00 $18.12 $18.13 $18.08 $18.08 $17.80 $17.80
====== ====== ====== ====== ====== ====== ====== ======
Total Return (a) .......... 0.51% 0.62% 4.16% 4.40% 6.62% 6.90% 5.74% 6.01%
Ratios/
Supplementary
Data:
Net Assets,
End of
Period (in
thousands) .......... $54,538 $57,327 $55,504 $61,048 $56,677 $61,025 $54,253 $59,910
Ratios of Net
Investment
Income to
Average Net
Assets (b) ............ 2.44% 2.66% 2.85% 3.03% 3.44% 3.71% 4.04% 4.30%
Ratios of
Expenses to
Average Net
Assets (b) ............ 1.12% 0.90% 1.04% 0.86% 1.16% 0.89% 1.14% 0.88%
Ratios of
Expenses to
Average Net
Assets* (b) ........... 1.13% 0.91% 1.05% 0.87% 1.16% 0.89% 1.14% 0.88%
Portfolio
Turnover
Rate (c) .............. 71.25% 71.25% 202.77% 202.77% 213.97% 213.97% 98.29% 98.29%
Year Ended Year Ended
------------------ -------------------
February 28, 2001 February 29, 2000
Builder Premier Builder Premier
Class Class Class Class
-------- -------- --------- --------
Net Asset Value,
Beginning of
Period .................. $16.32 $16.32 $17.88 $17.88
------ ------ ------ ------
Investment
Activities:
Net investment
income ................ 0.73 0.79 0.78 0.84
Net realized/
unrealized
gains/
(losses) on
investments ........... 1.37 1.37 (1.55) (1.56)
------ ------ ------ ------
Total from
Investment
Operations .............. 2.10 2.16 (0.77) (0.72)
------ ------ ------ ------
Distributions:
Net investment
income ................ (0.73) (0.75) (0.76) (0.81)
Net realized
capital gains ......... -- -- (0.03) (0.03)
------ ------ ------ ------
Total
distributions ......... (0.73) (0.79) (0.79) (0.84)
------ ------ ------ ------
Net Asset Value,
End of Period ........... $17.69 $17.69 $16.32 $16.32
====== ====== ====== ======
Total Return (a) .......... 13.15% 13.53% (4.39)% (4.12)%
Ratios/
Supplementary
Data:
Net Assets,
End of
Period (in
thousands) .......... $53,937 $60,418 $50,347 $55,636
Ratios of Net
Investment
Income to
Average Net
Assets (b) ............ 4.31% 4.65% 4.47% 4.75%
Ratios of
Expenses to
Average Net
Assets (b) ............ 1.20% 0.86% 1.08% 0.79%
Ratios of
Expenses to
Average Net
Assets* (b) ........... 1.22% 0.88% 1.12% 0.83%
Portfolio
Turnover
Rate (c) .............. 121.96% 121.96% 90.84% 90.84%
- ----------
* The ratio does not include a reduction of expenses for custodian fee
credits of cash balances maintained with the custodian.
(a) Not annualized for periods less than one year.
(b) Annualized for periods less than one year.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
The accompanying notes are an integral part of the financial statements.
13
THE EMPIRE BUILDER TAX FREE BOND FUND
Notes to Financial Statements
1. Organization:
The Empire Builder Tax Free Bond Fund (the "Fund") was established as a
Massachusetts business trust by an Agreement and Declaration of Trust dated
September 30, 1983. The Fund is registered under the Investment Company Act of
1940, as amended, as an open-end, non-diversified investment company. The Fund
has an unlimited number of shares authorized with no par value.
The Fund offers two classes of shares; the Builder Class and the Premier
Class. Each class of shares outstanding bears the same dividend, liquidation and
other rights and conditions, except that the Builder Class shares and the
Premier Class shares bear separate transfer agency expenses. Each class of
shares has exclusive voting rights with respect to matters affecting only that
class.
Under the Fund's organizational documents, its' Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Fund
enters into contracts with their vendors and others that provide for general
indemnifications. The Fund's maximum exposure under these arrrangements is
unknown as this would involve future claims that may be made against the Fund.
2. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its' financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America.
Use of Estimates
Estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual
results to differ from these amounts.
Security Valuation
Tax-exempt securities are valued at their fair value as determined by an
independent pricing service approved by the Fund's Board of Trustees. The
pricing service uses information with respect to transactions in bonds,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities in determining fair value. The methods
used by the pricing service and the quality of valuations so established are
reviewed by Officers of the Fund and Glickenhaus & Co. (the "Adviser"), under
the general supervision of the Trustees of the Fund.
Securities for which quotations are readily available are stated at fair
value using procedures approved by the Trustees of the Fund. Short-term debt
securities having remaining maturities of sixty (60) days or less are stated at
amortized cost, which approximates market value. Investments in investment
companies are reported at their respective net asset values as reported by those
companies.
14
THE EMPIRE BUILDER TAX FREE BOND FUND
Notes to Financial Statements -- continued
Security Transactions and Investment Income
Security transactions are accounted for no later than one business day
after trade date. However, for financial reporting purposes, security
transactions are accounted for on trade date. Interest income, which includes
amortization of premium and accretion of discounts, is accrued as earned.
Realized gains and losses from security transactions and unrealized appreciation
and depreciation of investments are determined on the basis of identified cost.
Taxes
The Fund qualifies and intends to continue to qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code, and to
distribute substantially all of its tax-exempt and taxable income. Therefore, no
federal income tax provision is required.
In addition, by distributing during each calendar year substantially all
of its net investment income, capital gains and certain other amounts, if any,
the Fund will not be subject to a federal excise tax.
Distributions and Dividends
Distributions to shareholders from net investment income are declared
daily and paid monthly. The Fund also distributes at least annually
substantially all net capital gains, if any, realized from portfolio
transactions.
The amounts of distributions from net investment income and net realized
gains are determined in accordance with federal income tax regulations, which
may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature (i.e. reclass of market
discounts, gain/loss, paydowns, and distributions), such amounts are
reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Determination of Net Asset Value and Allocation of Income/Expenses
In calculating net asset value per share of each class, investment income
and expenses (other than class specific expenses charged to a class), are
allocated daily to each class of shares based on the value of outstanding
shares. Realized and unrealized gains and losses are allocated on relative net
assets.
Other
The Fund maintains a cash balance with its custodian and receives a
reduction of its custody fees and expenses for the amounts of interest earned on
such uninvested cash balance. There was no effect on net investment income. The
Fund could have invested such cash amounts in an income-producing asset if it
had not agreed to a reduction of fees or expenses under the expense offset
arrangement with the Fund's custodian.
15
THE EMPIRE BUILDER TAX FREE BOND FUND
Notes to Financial Statements -- continued
3. Purchases and Sales of Investment Securities:
Purchases and sales of investment securities, excluding short-term
investments, during the period ended August 31, 2004, amounted to $70,445,635
and $65,037,455, respectively.
4. Advisory Fees and Other Related Party Transactions:
The Fund retains the Adviser to act as investment adviser pursuant to an
Investment Advisory Agreement. As compensation for its advisory services, the
Adviser receives a fee computed daily and paid monthly, at the annual rates of
0.40% of the first $100,000,000 of average daily net assets and 0.3333% of any
excess over $100,000,000.
Glickenhaus has agreed to a reduction of advisory fees to the extent that
the Fund's expenses, including the advisory fees, exceed 1.50% of the Fund's
average annual net assets. For the period ended August 31, 2004, there was no
reduction of advisory fees pursuant to this agreement.
BISYS Fund Services Ohio, Inc. ("BISYS Ohio" or the "Administrator"), and
BISYS Fund Services ("BISYS") are subsidiaries of the BISYS Group, Inc., serves
as the Fund's administrator, transfer agent, fund accountant. BISYS Ohio and
BISYS receives compensation for administration and fund accounting services at a
rate of .15% and .03%, respectively, of the average daily net assets of the Fund
(subject to certain minimum amounts). Fees received for transfer agency services
are class specific and are based on the number of accounts per class. All fees
are accrued daily and paid monthly. In addition, BISYS provides an employee to
serve as Chief Compliance Officer for the Fund including providing certain
related services, for which it receives an additional fee.
Certain Officers and Trustees of the Trust are affiliated with the Adviser
or the Administrator. Such Officers and Trustees receive no compensation from
the Fund for serving in their respective roles, except the Chief Compliance
Officer. Each four non-interested Trustees who served both on the Board and the
audit committee were compensated $4,000 ($16,000 in total) in meeting and
retainer fees during the period ended August 31, 2004, plus reimbursement for
certain expenses.
Other Information
A description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities is available (i)
without charge, upon request, by calling 1-800-847-5886 and (ii) on the
Securities and Exchange Commission's website at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30, 2004 is
available (i) without charge, upon request, by calling 1-800-847-5886 and (ii)
on the Commission's website at http://www.sec.gov.
16
[LOGO] EMPIRE BUILDER
3435 Stelzer Road
Columbus, Ohio 43219
1-800-847-5886
[LOGO] EMPIRE BUILDER
TAX FREE BOND FUND
Semi-Annual Report
August 31, 2004
Investment Adviser and Distributor
Glickenhaus & Co.
6 East 43rd Street
New York, New York 10017
Administrator
BISYS Fund Services Limited Partnership
3435 Stelzer Road
Columbus, Ohio 43219
Transfer and Shareholder Servicing Agent
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, Ohio 43219
Custodian
State Street Bank & Trust Co.
800 Pennsylvania Avenue
5th Floor
Kansas City, MO 64105-1307
Legal Counsel
Ropes & Gray
One International Place
Boston, Massachusetts 02110
Independent Accountants
PricewaterhouseCoopers LLP
100 E. Broad Street
Columbus, Ohio 43215
Customer Service
3435 Stelzer Road
Columbus, Ohio 43219
1-800-847-5886
This report is submitted for the information of the shareholders of the Empire
Builder Tax Free Bond Fund. It is not authorized for distribution to prospective
investors in the Fund unless preceded or accompanied by an effective prospectus,
obtainable from an investment dealer, which includes information regarding the
Fund's objectives and policies, record, management, sales commission and other
data.
531801
Item 2. Code of Ethics.
Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant or
a third party. If the registrant has not adopted such a code of ethics,
explain why it has not done so.
Not applicable - only for annual reports.
The registrant must briefly describe the nature of any amendment, during
the period covered by the report, to a provision of its code of ethics
that applies to the registrant's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of
this Item. The registrant must file a copy of any such amendment as an
exhibit pursuant to Item 11(a)(1), unless the registrant has elected to
satisfy paragraph (f) of this Item by posting its code of ethics on its
website pursuant to paragraph (f)(2) of this Item, or by undertaking to
provide its code of ethics to any person without charge, upon request,
pursuant to paragraph (f)(3) of this Item.
If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of
ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller,
or persons performing similar functions, regardless of whether these
individuals are employed by the registrant or a third party, that relates
to one or more items set forth in paragraph (b) of this Item, the
registrant must briefly describe the nature of the waiver, the name of the
person to whom the waiver was granted, and the date of the waiver.
During the period covered by the report, with respect to the registrant's
code of ethics that applies to its principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions; there have been no amendments to, nor any
waivers granted from, a provision that relates to any element of the code
of ethics definition enumerated in paragraph (b) of this Item 2.
Item 3. Audit Committee Financial Expert.
(a) (1) Disclose that the registrant's board of directors has determined
that the registrant either:
(i) Has at least one audit committee financial expert serving on its
audit committee; or
(ii) Does not have an audit committee financial expert serving on
its audit committee.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the
audit committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined
in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph
(a)(1)(ii) of this Item, it must explain why it does not have an audit
committee financial expert.
Not applicable - only for annual reports.
Item 4. Principal Accountant Fees and Services.
(a) Disclose, under the caption Audit Fees, the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
principal accountant for the audit of the registrant's annual financial
statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees
billed in each of the last two fiscal years for assurance and related services
by the principal accountant that are reasonably related to the performance of
the audit of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in
each of the last two fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and tax planning.
Registrants shall describe the nature of the services comprising the fees
disclosed under this category.
(d) Disclose, under the caption All Other Fees, the aggregate fees billed
in each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
(e) (1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by the audit
committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) If greater than 50 percent, disclose the percentage of hours expended
on the principal accountant's engagement to audit the registrant's financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principal accountant's full-time, permanent
employees.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to the
registrant's investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the registrant for
each of the last two fiscal years of the registrant.
(h) Disclose whether the registrant's audit committee of the board of
directors has considered whether the provision of nonaudit services that were
rendered to the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted with or
overseen by another investment adviser), and any entity controlling, controlled
by, or under common control with the investment adviser that provides ongoing
services to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the
principal accountant's independence.
Not applicable - only for annual reports.
Item 5. Audit Committee of Listed Registrants.
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under
the Exchange Act (17CFR 240.10A-3), state whether or not the
registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a
committee, however designated, identify each committee member. If
the entire board of directors is acting as the registrant's audit
committee as specified in Section 3(a)(58)(B) of the Exchange Act
(15 U.S.C. 78c(a)(58)(B)), so state.
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption
from the listing standards for all audit committees.
Not applicable.
Item 6. Schedule of Investments.
File Schedule I - Investments in securities of unaffiliated issuers as of the
close of the reporting period as set forth in ss. 210.12-12 of Regulation S-X,
unless the schedule is included as part of the report to shareholders filed
under Item 1 of this Form.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
A closed-end management investment company that is filing an annual report
on this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
If the registrant is a closed-end management investment company, provide the
information specified in paragraph (b) of this Item with respect to any purchase
made by or on behalf of the registrant or any "affiliated purchaser," as defined
in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares
or other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act (15
U.S.C. 781).
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors, where those changes
were implemented after the registrant last provided disclosure in response to
the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or
this Item.
Not applicable.
Item 10. Controls and Procedures.
(a) Disclose the conclusions of the registrant's principal executive and
principal financial officers, or persons performing similar functions, regarding
the effectiveness of the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date
within 90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and
Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or
240.15d-15(b)).
The registrant's principal executive officer and principal financial officer
have concluded, based on their evaluation of the registrant's disclosure
controls and procedures as conducted within 90 days of the filing date of this
report, that these disclosure controls and procedures are adequately designed
and are operating effectively to ensure that information required to be
disclosed by the registrant on Form N-CSR is (i) accumulated and communicated to
the investment company's management, including its certifying officers, to allow
timely decisions regarding required disclosure; and (ii) recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that
occurred during the registrant's last fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant's internal control
over financial reporting.
There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
have materially affected or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 11. Exhibits.
(a) File the exhibits listed below as part of this Form. Letter or number
the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of
the disclosure required by Item 2, to the extent that the
registrant intends to satisfy the Item 2 requirements through filing of an
exhibit. Not applicable - Only effective for annual reports.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2). Certifications pursuant to Rule 30a-2(a) are
attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1
under the Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange
Act, provide the certifications required by rule 30a-2(b) under the Act as an
exhibit. A certification furnished pursuant to this paragraph will not be deemed
"filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liability of that section. Such certification will not be deemed to be
incorporated by reference into any filing under the Securities Act of 1933 or
the Exchange Act, except to the extent that the registrant incorporates it by
reference. Certifications pursuant to Rule 30a-2(b) are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) The Empire Builder Tax Free Bond Fund
By (Signature and Title)* /s/ Seth M. Glickenhaus
------------------------------
Seth M. Glickenhaus, President
Date November 5, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Seth M. Glickenhaus
------------------------------
Seth M. Glickenhaus, President
Date November 5, 2004
By (Signature and Title)* /s/ Troy A. Sheets
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Troy A. Sheets, Treasurer
Date November 5, 2004