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 811-3779
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BBH TRUST
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(Exact name of registrant as specified in charter)
40 Water Street, Boston, Massachusetts 02109
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(Address of principal executive offices) (Zip code)
Michael D. Martins
Brown Brothers Harriman and Co.
140 Broadway
New York, New York 10005-1011
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(Name and address of agents for service)
Registrant's telephone number, including area code: (800) 575-1265
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Date of fiscal year end: June 30, 2003
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Date of reporting period: June 30, 2003
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ITEM 1. REPORTS TO STOCKHOLDERS.
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[BROWN BROTHERS HARRIMAN LOGO]
ANNUAL REPORT
JUNE 30, 2003
BBH MONEY MARKET FUND
<Page>
BBH MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2003
<Table>
ASSETS:
Investment in BBH U.S. Money Market Portfolio
(the "Portfolio"), at value $ 1,459,097,733
----------------
TOTAL ASSETS 1,459,097,733
----------------
LIABILITIES:
Payables for:
Shareholder services/eligible institution fees 291,304
Administrative fees 110,696
Dividends declared 44,655
Professional fees 16,820
Board of Trustees' fees 7,087
Accounting fees 1,333
Accrued expenses and other liabilities 39,017
----------------
TOTAL LIABILITIES 510,912
----------------
NET ASSETS, for 1,458,586,821 fund shares outstanding $ 1,458,586,821
================
Net Assets Consist of:
Paid-in capital $ 1,458,586,821
================
NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 1.00
================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<Page>
BBH MONEY MARKET FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 2003
<Table>
INVESTMENT INCOME:
Interest income allocated from Portfolio $ 22,656,624
Expenses allocated from Portfolio (2,246,590)
----------------
NET INVESTMENT INCOME ALLOCATED FROM PORTFOLIO 20,410,034
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EXPENSES:
Shareholder services/eligible institution fees 3,623,838
Administrative fees 1,377,058
Professional fees 60,325
Board of Trustees' fees 35,362
Accounting fees 8,000
Miscellaneous expenses 135,630
----------------
TOTAL EXPENSES 5,240,213
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NET INVESTMENT INCOME $ 15,169,821
================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<Page>
BBH MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
------------------ ------------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income $ 15,169,821 $ 31,475,467
Dividends declared from net investment income (15,169,821) (31,475,467)
------------------ ------------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold 4,457,583,656 5,054,376,502
Fund shares issued in reinvestment of dividends 7,624,344 16,446,719
Fund shares repurchased (4,388,558,011) (5,138,628,655)
------------------ ------------------
Net increase (decrease) in net assets resulting
from fund share transactions 76,649,989 (67,805,434)
NET ASSETS:
Beginning of year 1,381,936,832 1,449,742,266
------------------ ------------------
END OF YEAR $ 1,458,586,821 $ 1,381,936,832
================== ==================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<Page>
BBH MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each year
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
-----------------------------------------------------------------------------
2003 2002 2001 2000 1999
------------- ------------- ------------- ------------- -------------
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.01 0.02 0.05 0.05 0.05
Dividends to shareholders from
net investment income (0.01) (0.02) (0.05) (0.05) (0.05)
------------- ------------- ------------- ------------- -------------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= ============= =============
Total return 1.06% 2.10% 5.57% 5.36% 4.77%
Ratios/Supplemental Data(1):
Net assets, end of year (000's omitted) $ 1,458,587 $ 1,381,937 $ 1,449,742 $ 1,421,982 $ 1,074,741
Ratio of expenses to
average net assets 0.52% 0.51% 0.52% 0.53% 0.53%
Ratio of net investment income to
average net assets 1.05% 2.08% 5.43% 5.29% 4.66%
</Table>
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(1) Ratios include the Fund's share of Portfolio income, expenses paid by the
Portfolio and the expense offset arrangement, as approriate.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<Page>
BBH MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. BBH Money Market Fund (the
"Fund") is a separate, diversified series of BBH Trust (the "Trust") which is
registered under the Investment Company Act of 1940, as amended. The Trust is
an open-end management investment company organized as a Massachusetts
business trust on June 7, 1983. The Fund commenced operations on December 12,
1983. The Declaration of Trust permits the Trustees to create an unlimited
number of series, each of which may issue a separate class of shares. The
Trustees have authorized the issuance of an unlimited number of shares of the
Fund. At June 30, 2003, there were four series of the Trust.
The Fund invests all of its investable assets in the BBH U.S. Money Market
Portfolio (the "Portfolio"), a diversified, open-end management investment
company having the same investment objectives as the Fund. The value of such
investment reflects the Fund's proportionate interest in the net assets of
the Portfolio (approximately 43% at June 30, 2003). The performance of the
Fund is directly affected by the performance of the Portfolio. The financial
statements of the Portfolio, including the portfolio of investments, are
included elsewhere in this report and should be read in connection with the
Fund's financial statements.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require
management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS. The Fund records its investments in the
Portfolio at fair value. Valuation of investments in the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
B. INTEREST INCOME AND EXPENSES. The Fund records its share of the
Portfolio's income and expenses each day. In addition, the Fund accrues
its own expenses.
C. FEDERAL INCOME TAXES. Each series of the Trust is treated as a separate
entity for federal income tax purposes. It is the Fund's policy to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
D. DIVIDENDS AND DISTRIBUTIONS. Dividends from net investment income are
declared daily and paid monthly to shareholders.
2. TRANSACTIONS WITH AFFILIATES.
ADMINISTRATIVE FEES. The Trust has an administration agreement with Brown
Brothers Harriman Trust Company, LLC ("BBHTC") for which BBHTC receives a fee
from the Fund calculated daily and paid monthly at an annual rate equivalent
to 0.095% of the Fund's average daily net assets. BBHTC has a
subadministration services agreement with Federated Services Company ("FSC")
for which FSC receives compensation paid by BBHTC. For the year ended June
30, 2003, the Fund incurred $1,377,058 for administrative services.
6
<Page>
SHAREHOLDER SERVICING/ELIGIBLE INSTITUTION AGREEMENT. The Trust has a
shareholder servicing agreement and an eligible institution agreement with
Brown Brothers Harriman ("BBH") for which BBH receives a fee from the Fund
calculated daily and paid monthly at an annual rate equivalent to 0.25% of
the Fund's average daily net assets. For the year ended June 30, 2003, the
Fund incurred $3,623,838 for shareholder servicing/eligible institution
services.
BOARD OF TRUSTEES' FEES. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2003, the Fund incurred $35,362 for Trustees' fees.
ACCOUNTING FEES. The Fund has an accounting agreement with BBH for which BBH
receives a fee calculated and paid monthly. For the year ended June 30, 2003,
the Fund incurred $8,000 for accounting services.
7
<Page>
BBH MONEY MARKET FUND
INDEPENDENT AUDITORS' REPORT
Trustees and Shareholders
BBH Money Market Fund (a series of BBH Trust):
We have audited the accompanying statement of assets and liabilities of BBH
Money Market Fund (a series of BBH Trust) (the "Fund") as of June 30, 2003, and
the related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
Money Market Fund as of June 30, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 15, 2003
8
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BBH U.S. MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
June 30, 2003 (expressed in U.S. dollers)
<Table>
<Caption>
ANNUALIZED
YIELD ON
PRINCIPAL MATURITY DATE OF
AMOUNT DATE PURCHASE VALUE
- ------------- -------- ---------- ---------------
BANK NOTE (2.2%)
$ 75,000,000 Wells Fargo Bank NA* 07/28/03 0.968% $ 75,000,000
---------------
CERTIFICATES OF DEPOSIT (13.9%)
50,000,000 Bank of Montreal 08/20/03 1.660 50,000,000
35,000,000 Bank of Scotland 07/31/03 1.220 35,000,290
50,000,000 Bank of Scotland 08/18/03 1.190 50,000,000
40,657,000 Barclays Bank, Plc. 07/03/03 1.215 40,656,964
30,000,000 Barclays Bank, Plc. 08/04/03 1.240 30,000,843
50,000,000 BNP Paribas 07/28/03 1.830 50,004,002
50,000,000 Credit Agricole Indosuez 09/26/03 1.030 50,000,000
10,000,000 Deutsche Bank AG 07/01/03 2.570 10,000,000
75,000,000 Deutsche Bank AG 12/03/03 1.070 75,000,000
50,000,000 HSBC Bank USA 01/09/04 1.400 50,000,000
35,000,000 Royal Bank of Scotland 12/05/03 1.230 35,022,597
---------------
TOTAL CERTIFICATES OF DEPOSIT 475,684,696
---------------
COMMERCIAL PAPER (33.5%)
40,000,000 Bank of America 07/10/03 1.230 39,987,700
130,000,000 BMW U.S. Capital LLC 07/01/03 1.300 130,000,000
30,000,000 Bristol-Myers Squibb Co. 08/12/03 1.240 29,956,600
30,000,000 Bristol-Myers Squibb Co. 08/20/03 1.250 29,947,917
25,405,000 City of Chicago, Illinois 08/13/03 1.250 25,367,069
24,000,000 Danske Corp. 12/19/03 1.030 23,882,580
30,000,000 General Electric Capital Corp. 08/19/03 1.250 29,948,959
40,000,000 General Electric Capital Corp. 10/20/03 1.140 39,859,400
14,000,000 Harvard University 10/08/03 1.081 13,958,035
35,000,000 ING Funding LLC 10/31/03 1.140 34,864,783
50,000,000 Johnson & Johnson 07/22/03 1.200 49,965,000
70,000,000 Lloyds TSB Group, Plc. 07/03/03 1.200 69,995,334
100,000,000 Merrill Lynch & Co., Inc. 07/01/03 1.300 100,000,000
75,000,000 Morgan Stanley Dean Witter Discover 07/01/03 1.040 75,000,000
37,500,000 Morgan Stanley Dean Witter Discover 07/18/03 1.300 37,481,583
70,000,000 Rabobank Nederland NV 07/08/03 1.163 69,984,007
40,000,000 Royal Bank of Scotland 07/07/03 1.180 39,992,133
25,000,000 Schering Corp. 12/17/03 1.040 24,877,945
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<Page>
<Table>
<Caption>
ANNUALIZED
YIELD ON
PRINCIPAL MATURITY DATE OF
AMOUNT DATE PURCHASE VALUE
- ------------- -------- --------- ---------------
COMMERCIAL PAPER (CONTINUED)
$ 50,000,000 Societe Generale 07/01/03 1.200% $ 50,000,000
130,000,000 UBS Finance, Ltd. (Delaware) 07/01/03 1.310 130,000,000
50,000,000 Verizon Network Funding 08/27/03 1.190 49,905,792
50,000,000 Volkswagen of America, Inc. 07/07/03 1.070 49,991,083
---------------
TOTAL COMMERCIAL PAPER 1,144,965,920
---------------
CORPORATE BONDS (3.4%)
50,000,000 American Express Credit Corp.* 07/14/03 1.220 50,001,622
1,700,000 Associates Corp. of North America 08/26/03 1.810 1,711,575
19,650,000 CitiFinancial 09/01/03 1.694 19,785,949
44,935,000 Citigroup Global Market Holdings, Inc. 02/01/04 0.991 46,545,313
---------------
TOTAL CORPORATE BONDS 118,044,459
---------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (26.5%)
45,000,000 Federal Farm Credit Bank* 07/01/03 0.960 45,000,000
90,000,000 Federal Farm Credit Bank* 07/01/03 0.935 89,991,884
37,250,000 Federal Farm Credit Bank 10/01/03 1.453 37,402,435
50,000,000 Federal Home Loan Bank* 07/27/03 0.885 49,979,508
45,000,000 Federal Home Loan Bank 08/22/03 1.093 44,928,500
14,000,000 Federal Home Loan Bank 11/07/03 1.139 13,942,559
86,175,000 Federal Home Loan Mortgage Corp. 08/27/03 1.093 86,024,912
9,000,000 Federal Home Loan Mortgage Corp. 09/15/03 1.680 9,032,600
58,000,000 Federal Home Loan Mortgage Corp. 11/06/03 1.023 57,787,591
39,000,000 Federal Home Loan Mortgage Corp. 11/14/03 1.189 38,823,936
67,100,000 Federal Home Loan Mortgage Corp. 11/15/03 1.868 68,193,465
30,000,000 Federal National Mortgage Assoc. 08/15/03 1.766 30,081,668
32,500,000 Federal National Mortgage Assoc. 08/22/03 1.765 32,416,909
40,000,000 Federal National Mortgage Assoc. 11/05/03 1.145 39,838,428
10,000,000 Federal National Mortgage Assoc. 11/14/03 1.951 10,100,647
43,875,000 Federal National Mortgage Assoc. 11/14/03 1.184 43,677,757
35,000,000 Federal National Mortgage Assoc. 02/06/04 1.276 34,726,222
100,000,000 Student Loan Marketing Assoc.* 07/01/03 1.074 100,037,404
75,000,000 Student Loan Marketing Assoc.* 07/09/03 1.074 75,021,263
---------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 907,007,688
---------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<Page>
<Table>
<Caption>
ANNUALIZED
YIELD ON
PRINCIPAL MATURITY DATE OF
AMOUNT DATE PURCHASE VALUE
- ------------- -------- ---------- ---------------
TIME DEPOSITS (20.3%)
$ 150,000,000 Banc One Corp. 07/01/03 1.250% $ 150,000,000
150,000,000 Canadian Imperial Bank of Commerce 07/01/03 1.125 150,000,000
150,000,000 Dresdner Bank 07/01/03 1.250 150,000,000
150,000,000 Royal Bank of Canada 07/01/03 1.250 150,000,000
93,400,000 Societe Generale 07/01/03 1.344 93,400,000
---------------
TOTAL TIME DEPOSITS 693,400,000
---------------
REPURCHASE AGREEMENTS (0.0%)
1,000,000 J.P. Morgan Chase & Co. (Agreement
dated 06/30/03 collateralized by
U.S. Treasury Note 6.750%, due 05/15/05;
$1,000,028 to be received upon maturity) 07/01/03 1.000 1,000,000
300,000 Bear Stearns & Co., Inc. (Agreement dated
06/30/03 collateralized by
U.S. Treasury Note 1.625%, due 04/30/05;
$300,007 to be received upon maturity) 07/01/03 0.850 300,000
---------------
TOTAL REPURCHASE AGREEMENTS 1,300,000
---------------
TOTAL INVESTMENTS, AT AMORTIZED COST 99.8% $ 3,415,402,763
OTHER ASSETS IN EXCESS OF LIABILITIES 0.2 6,262,232
----- ----------------
NET ASSETS 100.0% $ 3,421,664,995
===== ===============
</Table>
* Variable rate Instrument. Interest rates change on specific dates (such as a
coupon or interest payment date). The yield shown represents the June 30,
2003 coupon rate.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2003 (expressed in U.S. dollars)
<Table>
ASSETS:
Investments, at amortized cost $ 3,415,402,763
Interest receivable 6,661,468
Prepaid expenses 100,632
----------------
TOTAL ASSETS 3,422,164,863
----------------
LIABILITIES:
Due to bank 1,750
Payables for:
Investment advisory fees 275,990
Administrative fees 96,596
Custody fees 81,921
Professional fees 36,702
Board of Trustees' fees 4,053
Accrued expenses and other liabilities 2,856
----------------
TOTAL LIABILITIES 499,868
----------------
NET ASSETS $ 3,421,664,995
================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
For the year ended June 30, 2003 (expressed in U.S. dollars)
<Table>
NET INVESTMENT INCOME:
INCOME:
Interest $ 52,175,968
----------------
EXPENSES:
Investment advisory fees 3,351,976
Administrative fees 1,173,192
Custody fees 459,999
Board of Trustees' fees 58,735
Professional fees 34,133
Miscellaneous expenses 116,338
----------------
TOTAL EXPENSES 5,194,373
Fees paid indirectly (3,753)
----------------
NET EXPENSES 5,190,620
----------------
NET INVESTMENT INCOME $ 46,985,348
================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
STATEMENT OF CHANGE IN NET ASSETS (expressed in U.S. dollars)
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
------------------ ------------------
INCREASE IN NET ASSETS:
From Operations:
Net investment income $ 46,985,348 $ 82,910,432
------------------ ------------------
Capital Transactions:
Proceeds from contributions 11,833,968,310 13,386,287,999
Value of withdrawals (11,332,869,201) (12,953,627,641)
------------------ ------------------
Net increase in net assets resulting from
capital transactions 501,099,109 432,660,358
------------------ ------------------
Total increase in net assets 548,084,457 515,570,790
NET ASSETS:
Beginning of year 2,873,580,538 2,358,009,748
------------------ ------------------
END OF YEAR $ 3,421,664,995 $ 2,873,580,538
================== ==================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS (expressed in U.S. dollars)
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
------------------------------------------------------------------------------
2003 2002 2001 2000 1999
------------- ----------- ------------ ------------- -------------
Total return 1.44% 2.47% 5.95% 5.70% 5.11%
Ratios/Supplemental Data:
Net assets, end of year
(000's omitted) $ 3,421,665 $ 2,873,581 $ 2,358,010 $ 1,602,484 $ 1,075,162
Expenses as a percentage of
average net assets:
Net expenses paid by Portfolio 0.15% 0.16% 0.15% 0.21% 0.21%
Expense offset arrangement 0.00%(1) 0.00%(1) 0.01% - -
------------- ----------- ------------ ------------- -------------
Total expenses 0.15% 0.16% 0.16% 0.21% 0.21%
Ratio of net investment income to
average net assets 1.40% 2.39% 5.64% 5.60% 4.98%
</Table>
- ----------
(1) Amount is less than 0.01%.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
June 30, 2003 (expressed in U.S. dollares)
1. ORGANIZATION AND ACCOUNTING POLICIES. BBH U.S. Money Market Portfolio (the
"Portfolio") is registered under the Investment Company Act of 1940, as
amended, as a no load, diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on
June 15, 1993. The Fund commenced operations on October 31, 1994. The
Declaration of Trust permits the Trustees to create an unlimited number of
beneficial interests in the Portfolio.
The Portfolio's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America,
which require management to make certain estimates and assumptions at the
date of the financial statements and are based, in part, on the following
accounting policies. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS. The Portfolio values its investments at
amortized cost, which approximates market value. The amortized cost method
values a security at its cost at the time of purchase and thereafter
assumes a constant amortization to maturity of any discount or premium.
The Portfolio's use of amortized cost is in compliance with Rule 2a-7 of
the Investment Company Act of 1940.
B. INTEREST INCOME. Interest income consists of interest accrued and discount
earned (including both original issue and market discount) and premium
amortization on the investments of the Portfolio, accrued ratably to date
of maturity.
C. FEDERAL INCOME TAXES. The Portfolio is treated as a partnership for
federal income tax purposes and its operations are conducted in such a way
that is it not to be considered engaged in a U.S. trade or business for
U.S. tax purposes. Accordingly, no provision for federal income taxes is
necessary. It is intended that the Portfolio's assets will be managed in
such way that an investor in the Portfolio will be able to comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies. At June 30, 2003, the cost of investments for federal income
tax purposes was equal to the amortized cost of the investments for
financial statement purposes.
D. OTHER. Investment transactions are accounted for on a trade date basis.
Realized gain and loss, if any, from investment transactions are
determined on the basis of identified cost.
2. TRANSACTIONS WITH AFFILIATES.
INVESTMENT ADVISORY FEES. The Portfolio has an investment advisory agreement
with Brown Brothers Harriman ("BBH") for it pays BBH a fee from the Fund
calculated daily and paid monthly at an annual rate equivalent to 0.10% of
the Portfolio's average daily net assets. BBH has established a separately
identifiable department (SID) to provide investment advice to mutual funds.
The SID is registered with the Securities and Exchange Commission under the
Investment Advisors Act of 1940. For the year ended June 30, 2003, the
Portfolio incurred $3,351,976 for advisory services.
16
<Page>
ADMINISTRATIVE FEES. The Portfolio has an administrative agreement with Brown
Brothers Harriman Trust Company, LLC ("BBHTC") for which it pays BBHTC a fee
calculated daily and paid monthly at an annual rate equivalent to 0.035% of
the Portfolio's average daily net assets. BBHTC has a subadministration
services agreement with Federated Services Company ("FSC") for which FSC
receives compensation paid by BBHTC. For the year ended June 30, 2003, the
Portfolio incurred $1,173,192 for administrative services.
BOARD OF TRUSTEES' FEES. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Portfolio. For
the year ended June 30, 2003, the Portfolio incurred $58,735 for the
Trustees' fees.
CUSTODY FEES. The Portfolio has a custody agreement with BBH for which BBH
receives a fee calculated and paid monthly. For the year ended June 30, 2003,
the Portfolio incurred $459,999 for custody services. These fees were reduced
by $3,753 as a result of an expense offset arrangement with the Portfolio's
custodian.
17
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
INDEPENDENT AUDITORS' REPORT
Trustees and Shareholders
BBH Money Market Portfolio:
We have audited the accompanying statement of assets and liabilities of BBH U.S.
Money Market Portfolio (the "Portfolio"), including the portfolio of
investments, as of June 30, 2003, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. Our procedures included confirmation of securities owned at June 30,
2003, by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
Money Market Portfolio as of June 30, 2003, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 15, 2003
18
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
SUPPLEMENTAL PROXY INFORMATION
June 30, 2003 (unaudited)
On August 9, 2002 and through a written consent, the undersigned holder of
record of interests in the BBH U.S. Money Market Portfolio (the "Portfolio"),
acting pursuant to Section 9.8 of the Declaration of Trust of the Portfolio
dated as of June 15, 1993, and, if applicable, the authority of its investors,
does hereby approve and consent to the following actions, which approval and
consent shall for all purposes be treated as a vote taken at a meeting of
holders duly called for such purpose:
PROPOSAL 1:
Resolved: That the Portfolio's fundamental policy regarding borrowing is
hereby modified in its entirety as follows:
The Portfolio may not borrow money, except as permitted by the Investment
Company Act of 1940, as amended, and rules thereunder.
Percentage of interest constituting approval, if less than 100%: 96%
PROPOSAL 2:
Resolved: That the Portfolio's fundamental policy regarding investments in
restricted securities is hereby replaced in its entirety with the following
non-fundamental policy, which may be changed by the Trustees of the Portfolio
without Holder approval:
The Portfolio may not invest more than 10% of its net assets (taken at the
greater of cost or market value) in illiquid securities.
Percentage of interest constituting approval, if less than 100%: 96%
PROPOSAL 3:
Resolved: That the Portfolio's fundamental policy regarding investments in
other investment companies is hereby replaced in its entirety with the
following non-fundamental policy, which may be changed by the Trustees of the
Portfolio without Holder approval:
The Portfolio may not purchase securities of other investment companies,
except in connection with a merger, consolidation, reorganization or
acquisition of assets, and except that it may invest in securities of other
investment companies subject to the restrictions set forth in Section
12(d)(1) of the Investment Company Act of 1940, as amended.
Percentage of interest constituting approval, if less than 100%: 96%
19
<Page>
TRUSTEES AND OFFICERS OF BBH U.S. MONEY MARKET PORTFOLIO
(unaudited)
Information pertaining to Trustees of the Portfolio and executive officers of
the Portfolio is set forth below. Part B to the Registration Statement of U.S.
BBH Money Market Portfolio includes additional information about the Portfolio's
Trustees and is available upon request without charge through your financial
advisor.
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------
Trustees
Joseph V. Shields Jr. Chairman of Since Managing Director, Chairman 13 None
(aged 65) the Board 1990 and Chief Executive Officer of
Shields & Company and Trustee Shields & Company (registered
140 Broadway broker-dealer and member of
New York, NY 10005 New York Stock Exchange);
Chairman of Capital Management
Associates, Inc. (registered
investment adviser); Vice
Chairman and Trustee of New
York Racing Association;
Director of Flowers
Industries, Inc. (diversified
food company).
Eugene P. Beard Trustee Since Retired; Vice Chairman-Finance/ 13 Director of Old
(aged 68) 1993 Operations and CFO (until Westbury Funds (5);
The Interpublic Group February 2002); Special Advisor Trustee of Sandhill
of Companies, Inc., (February 2002 to present), The Investment Fund II.
372 Danbury Road Interpublic Group of
2nd Floor Companies, Inc.
Wilton, CT 06897
Richard Carpenter Trustee Since Retired; Director of 13 None
(aged 70) 1999 Investments, Pennsylvania
10820 North Public School Employees'
La Quinta Drive Retirement System (until
Tucson, AZ 85737 December 1997).
</Table>
20
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------
David P. Feldman Trustee Since Retired; Chairman and CEO of 13 Director of
(aged 63) 1999 AT&T Investment Management Dreyfus Mutual
3 Tall Oaks Drive Corporation (until May 1997); Funds (59 Funds)
Warren, NJ 07059 Director of Jeffrey Co. (1992
to present); Director of QMED
(1999 to present).
J. Angus Ivory Trustee Since Retired; Director of Brown 13 None
(aged 71) 1990 Brothers Harriman Ltd.
Greenway Farm, (subsidiary of Brown Brothers
Tockenham, Swindon, Harriman & Co.) (until
Wiltshire, SN4 7PP December 2001); Advisor, RAF
England Central Fund (1992-June 2003).
Alan G. Lowy Trustee Since Private Investor. 13 None
(aged 64) 1993
4111 Clear Valley Drive
Encino, CA 91436
Arthur D. Miltenberger Trustee Since Retired; Executive Vice 13 None
(aged 64) 1992 President and Chief Financial
503 Darlington Road Officer of Richard K. Mellon
Ligonier, PA 15658 and Sons (until June 1998);
Vice President and Treasurer
of Richard King Mellon
Foundation (until June 1998);
Trustee, R.K. Mellon Family
Trusts (1981-June 2003);
General Partner, Mellon Family
Investment Company IV, V and
VI (1983-2002); Director of
Aerostructures Corporation
(aircraft manufacturer)
(1996-July 2003).
</Table>
21
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------
Officers
Charles Izard President Since President of the Trust, BBH N/A N/A
(aged 44) 2003 Common Settlement Fund, Inc.,
140 Broadway BBH Common Settlement Fund II,
New York, NY 10005 Inc., BBH Fund, Inc. and the
BBH U.S. Money Market Portfolio
(since November 2002);
Managing Director
(since January 2001), Senior
Vice President (1995-December
2000) of Brown Brothers
Harriman & Co. ("BBH & Co.")
Michael D. Martins Vice President, Since Vice President, Treasurer, N/A N/A
(aged 37) Treasurer, 2002 Principal Accounting
140 Broadway Principal Officer and Principal Financial
New York, NY 10005 Accounting Officer of the Trust, BBH
Officer and Common Settlement Fund, Inc.,
Principal BBH Common Settlement Fund II,
Financial Inc., BBH Fund, Inc. and the
Officer BBH U.S. Money Market
Portfolio; Vice President
(since April 2002) and
Assistant Vice President
(December 1996-March 2002) of
BBH & Co.
Gail C. Jones Secretary Since Secretary of the Trust, BBH N/A N/A
(aged 49) 2002 Common Settlement Fund, Inc.,
1001 Liberty Avenue BBH Common Settlement Fund II,
Pittsburgh, PA Inc., BBH Fund, Inc. and the
15222-3779 BBH U.S. Money Market Portfolio
(since August 2002); Counsel,
ReedSmith, LLP (since October
2002); Corporate Counsel
January 1997 to September 2002
and Vice President January
1999 to September 2002 of
Federated Services Company.
</Table>
22
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------
Peter J. Germain Vice President Since Vice President of the Trust, N/A N/A
(aged 43) 2002 BBH Common Settlement Fund,
1001 Liberty Avenue Inc., BBH Common Settlement
Pittsburgh, PA Fund II, Inc., BBH Fund, Inc.
15222-3779 and the BBH U.S. Money Market
Portfolio (since August 2002);
Senior Vice President,
Federated Services Company
(since November 1997).
Judith J. Mackin Vice President Since Vice President of the Trust, N/A N/A
(aged 43) 2002 BBH Common Settlement Fund,
1001 Liberty Avenue Inc., BBH Common Settlement
Pittsburgh, PA Fund II, Inc., BBH Fund, Inc.
15222-3779 and the BBH U.S. Money Market
Portfolio (since August 2002);
Vice President of Federated
Services Company (since
November 1997)
Victor Siclari Assistant Since Assistant Secretary of the N/A N/A
(aged 41) Secretary 2002 Trust, BBH Common Settlement
1001 Liberty Avenue Fund, Inc., BBH Common
Pittsburgh, PA Settlement Fund II, Inc., BBH
15222-3779 Fund, Inc. and the BBH U.S.
Money Market Portfolio (since
August 2002); Partner,
ReedSmith, LLP (since October
2002); Vice President (March
1996 to September 2002) and
Senior Corporate Counsel (July
1998 to September 2002) of
Federated Investors, Inc.
Nancy D. Osborn Assistant Since Assistant Secretary of the N/A N/A
(aged 37) Secretary 2002 Trust, BBH Common Settlement
140 Broadway Fund, Inc., BBH Common
New York, NY 10005 Settlement Fund II, Inc., BBH
Fund, Inc. and the BBH U.S.
Money Market Portfolio (since
August 2002); Assistant Vice
President (since April 2003)
and Associate of BBH & Co
(April 1996-March 2003).
</Table>
23
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------
John C. Smith Assistant Since 2002 Assistant Treasurer of N/A N/A
(age 37) Treasurer the Trust, BBH Common
50 Milk Street Settlement Fund, Inc., BBH
Boston, MA 02109 Common Settlement Fund II,
Inc., BBH Fund, Inc. and the
BBH U.S. Money Market
Portfolio (since August 2002);
Assistant Vice President
(since September 2001),
Associate (September
2000-August 2001) and Senior
Analyst (June 1999 - August
2000) of BBH & Co.; Manager,
Fund Administration, State
Street Bank and Trust Company
(June 1997 - May 1999).
Gregory Lomakin Assistant Since 2002 Assistant Treasurer of the N/A N/A
(aged 38) Treasurer Trust, BBH Common Settlement
50 Milk Street Fund, Inc., BBH Common
Boston, MA 02109 Settlement Fund II, Inc., BBH
Fund, Inc. and the BBH U.S.
Money Market Portfolio (since
August 2002); Vice President
(since April 2003), Assistant
Vice President (April 2001-
March 2003), and Associate (May
1992-March 2001) of BBH & Co.
</Table>
# Each Trustee holds office until he or she attains the age of 70 (72, in the
case of Trustees who were elected as such before January 1, 2000), or until
he or she sooner dies, resigns or is removed from office in accordance with
the provisions of the Trust's Declaration of Trust. All Officers of the
Trust hold office for one year and until their respective successors are
chosen and qualified (subject to the ability of the Trustees to remove any
officer in accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, BBH Fund, Inc., BBH Common
Settlement Fund, Inc., BBH Common Settlement Fund II, Inc. and BBH U.S.
Money Market Portfolio. The Trust, which has four series, and BBH Fund,
Inc., which has six series, are each counted as one "fund" for purposes of
this table.
24
<Page>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
TO OBTAIN INFORMATION OR MAKE SHAREHOLDER INQUIRIES:
By telephone: Call 1-800-575-1265
by E-mail send your request to: bbhfunds@bbh.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
[BROWN BROTHERS HARRIMAN LOGO]
<Page>
[BROWN BROTHERS HARRIMAN LOGO]
ANNUAL REPORT
JUNE 30, 2003
BBH U.S. TREASURY MONEY FUND
<Page>
BBH U.S. TREASURY MONEY FUND
PORTFOLIO OF INVESTMENTS
June 30, 2003
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
- ------------ -------------
U.S. TREASURY BILLS (a) (89.4%)
$ 8,970,000 due 07/03/03, 1.128% $ 8,969,439
17,040,000 due 07/17/03, 0.797% 17,033,978
27,000,000 due 07/24/03, 0.836% 26,985,510
12,755,000 due 07/31/03, 1.068% 12,743,674
3,450,000 due 08/21/03, 1.035% 3,444,952
41,950,000 due 09/04/03, 0.963% 41,877,262
5,630,000 due 09/18/03, 1.104% 5,616,286
1,400,000 due 10/09/03, 1.156% 1,395,528
1,330,000 due 12/04/03, 1.010% 1,324,208
3,060,000 due 12/11/03, 0.868% 3,048,016
-------------
TOTAL U.S. TREASURY BILLS 122,438,853
-------------
U.S. TREASURY NOTES (10.3%)
3,000,000 due 08/15/03, 5.250% 3,012,833
10,000,000 due 08/31/03, 3.625% 10,040,941
1,000,000 due 11/30/03, 3.000% 1,006,164
-------------
TOTAL U.S. TREASURY NOTES 14,059,938
-------------
TOTAL INVESTMENTS, AT AMORTIZED COST 99.7% $ 136,498,791
OTHER ASSETS IN EXCESS OF LIABILITIES 0.3 387,492
----- -------------
NET ASSETS 100.0% $ 136,886,283
===== =============
</Table>
(a) Rates shown are yields to maturity at time of purchase.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<Page>
BBH U.S. TREASURY MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2003
<Table>
ASSETS:
Investments, at amortized cost $ 136,498,791
Cash 294,892
Interest receivable 201,373
Prepaid expenses 6,802
---------------
TOTAL ASSETS 137,001,858
---------------
LIABILITIES:
Payables for:
Shareholder servicing/eligible institution fees 29,470
Professional fees 29,295
Investment advisory fees 19,646
Administrative fees 13,764
Custody fees 7,018
Board of Trustees' fees 2,522
Dividends declared 1,881
Accrued expenses and other liabilities 11,979
---------------
TOTAL LIABILITIES 115,575
---------------
NET ASSETS, for 136,885,852 fund shares outstanding $ 136,886,283
===============
Net Assets Consist of:
Paid-in capital $ 136,886,283
===============
NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 1.00
===============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<Page>
BBH U.S. TREASURY MONEY FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 2003
<Table>
NET INVESTMENT INCOME:
INCOME:
Interest $ 2,656,557
---------------
EXPENSES:
Shareholder servicing/eligible institution fees 402,196
Investment advisory fees 268,131
Administrative fees 178,754
Custody fees 46,147
Professional fees 42,727
Board of Trustees' fees 8,885
Miscellaneous expenses 65,424
---------------
TOTAL EXPENSES 1,012,264
Expense offset arrangement (1,502)
---------------
NET EXPENSES 1,010,762
---------------
NET INVESTMENT INCOME $ 1,645,795
===============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<Page>
BBH U.S. TREASURY MONEY FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income $ 1,645,795 $ 4,013,421
Dividends declared from net investment income (1,637,907) (4,021,823)
--------------- ---------------
Net increase (decrease) in net assets from operations 7,888 (8,402)
--------------- ---------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold 577,290,183 634,955,848
Fund shares issued in reinvestment of dividends 598,130 1,499,587
Fund shares repurchased (629,020,187) (634,475,606)
--------------- ---------------
Net increase (decrease) in net assets resulting
from fund share transactions (51,131,874) 1,979,829
--------------- ---------------
Total increase (decrease) in net assets (51,123,986) 1,971,427
NET ASSETS:
Beginning of year 188,010,269 186,038,842
--------------- ---------------
END OF YEAR $ 136,886,283 $ 188,010,269
=============== ===============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<Page>
BBH U.S. TREASURY MONEY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each year
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
-------------------------------------------------------------------
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.01 0.02 0.05 0.05 0.04
Dividends to shareholders from net
investment income (0.01) (0.02) (0.05) (0.05) (0.04)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return 0.91% 1.95% 5.20% 4.75% 4.15%
Ratios/ Supplemental Data:
Net assets, end of year
(000's omitted) $ 136,886 $ 188,010 $ 186,039 $ 134,425 $ 193,222
Ratio of expenses to average
net assets 0.57%(1) 0.56%(1) 0.55% 0.57% 0.62%
Ratio of net investment income to
average net assets 0.92% 1.91% 5.00% 4.68% 4.07%
</Table>
- ----------
(1) The ratio of expenses to average net assets for the years ended June 30,
2003 and 2002 reflects fees reduced as a result of an expense offset
arrangement with the Fund's custodian. Had this arrangement not been in
place, this ratio would have been 0.57% and 0.56%, respectively.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
<Page>
BBH U.S. TREASURY MONEY FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. BBH U.S. Treasury Money
Fund (the "Fund") is a separate, diversified series of BBH Trust (the
"Trust") which is registered under the Investment Company Act of 1940, as
amended. The Trust is an open-end management investment company organized as
a Massachusetts business trust on June 7, 1983. The Fund commenced
operations on March 12, 1991. The Declaration of Trust permits the Trustees
to create an unlimited number of series, each of which may issue a separate
class of shares. The Trustees have authorized the issuance of an unlimited
number of shares of the Fund. At June 30, 2003, there were four series of
the Trust.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require
management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS. The Fund values its investments at amortized
cost, which approximates market value. The amortized cost method values a
security at its cost at the time of purchase and thereafter assumes a
constant amortization to maturity of any discount or premium. The Fund's
use of amortized cost is in compliance with Rule 2a-7 of the Investment
Company Act of 1940.
B. INTEREST INCOME. Interest income consists of interest accrued and
discount earned (including both original issue and market discount) and
premium amortization on the investments of the Fund, accrued ratably to
the date of maturity.
C. FEDERAL INCOME TAXES. Each series of the Trust is treated as a separate
entity for federal income tax purposes. It is the Fund's policy to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required.
At June 30, 2003, the cost of investments for federal income tax purposes
was equal to the amortized cost of investments for financial statement
purposes.
D. DIVIDENDS AND DISTRIBUTIONS. Dividends from net investment income are
declared daily and paid monthly to shareholders.
E. OTHER. Investment transactions are accounted for on the trade date.
Realized gain and loss, if any, from investment transactions are
determined on the basis of identified cost.
2. TRANSACTIONS WITH AFFILIATES.
INVESTMENT ADVISORY FEES. The Trust has an investment advisory agreement
with Brown Brothers Harriman ("BBH") for which BBH receives a fee from the
Fund calculated daily and paid monthly at an annual rate equivalent to 0.15%
of the Fund's average daily net assets. BBH has established a separately
identifiable department (SID) to provide investment advice to mutual funds.
The SID is registered with the Securities and Exchange Commission under the
Investment Advisors Act of 1940. For the year ended June 30, 2003, the Fund
incurred $268,131 for advisory services.
7
<Page>
ADMINISTRATIVE FEES. The Trust has an administration agreement with Brown
Brothers Harriman Trust Company, LLC ("BBHTC") for which BBHTC receives a
fee from the Fund calculated daily and paid monthly at an annual rate
equivalent to 0.10% of the Fund's average daily net assets. BBHTC has a
subadministration services agreement with Federated Services Company ("FSC")
for which FSC receives compensation paid by BBHTC. For the year ended June
30, 2003, the Fund incurred $178,754 for administrative services.
SHAREHOLDER SERVICING/ELIGIBLE INSTITUTION AGREEMENT. The Trust has a
shareholder servicing agreement and an eligible institution agreement with
BBH for which BBH receives a fee from the Fund calculated daily and paid
monthly at an annual rate equivalent to 0.225% of the Fund's average daily
net assets. For the year ended June 30, 2003, the Fund incurred $402,196 for
shareholder servicing/eligible institution services.
BOARD OF TRUSTEES' FEES. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2003, the Fund incurred $8,885 for Trustees' fees.
CUSTODY FEES. The Fund has a custody agreement with BBH for which BBH
receives a fee calculated and paid monthly. For the year ended June 30,
2003, the Fund incurred $46,147 for custody services. These fees were
reduced by $1,502 as a result of an expense offset arrangement with the
Fund's custodian.
8
<Page>
BBH U.S. TREASURY MONEY FUND
INDEPENDENT AUDITORS' REPORT
Trustees and Shareholders
BBH U.S. Treasury Money Fund (a series of BBH Trust):
We have audited the accompanying statement of assets and liabilities of BBH U.S.
Treasury Money Fund (a series of BBH Trust) (the "Fund"), including the
portfolio of investments, as of June 30, 2003, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. Our procedures included confirmation of securities owned at June 30,
2003, by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
U.S. Treasury Money Fund as of June 30, 2003, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 15, 2003
9
<Page>
TRUSTEES AND OFFICERS OF BBH U.S. TREASURY MONEY FUND
(unaudited)
Information pertaining to the Trustees of the Trust and executive officers of
the Trust is set forth below. Part B to the Registration Statement of BBH U.S.
Treasury Money Fund includes additional information about the Fund's Trustees
and is available upon request without charge through your financial advisor.
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO OTHER
POSITION(S) AND IN FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------
TRUSTEES
Joseph V. Shields Jr. Chairman of Since Managing Director, Chairman 13 None
(aged 65) the Board and 1990 and Chief Executive Officer of
Shields & Company Trustee Shields & Company (registered
140 Broadway broker-dealer and member of
New York, NY 10005 New York Stock Exchange);
Chairman of Capital Management
Associates, Inc. (registered
investment adviser); Vice
Chairman and Trustee of New
York Racing Association;
Director of Flowers
Industries, Inc. (diversified
food company).
Eugene P. Beard Trustee Since Retired; Vice Chairman-Finance/ 13 Director of
(aged 68) 1993 Operations and CFO (until Old Westbury
The Interpublic Group February 2002); Special Advisor Funds (5);
of Companies, Inc., (February 2002 to present), The Trustee of
372 Danbury Road Interpublic Group of Sandhill
2nd Floor Companies, Inc. Investment
Wilton, CT 06897 Fund II.
Richard Carpenter Trustee Since Retired; Director of 13 None
(aged 70) 1999 Investments, Pennsylvania
10820 North Public School Employees'
La Quinta Drive Retirement System (until
Tucson, AZ 85737 December 1997).
David P. Feldman Trustee Since Retired; Chairman and CEO of 13 Director of
(aged 63) 1990 AT&T Investment Management Dreyfus
3 Tall Oaks Drive Corporation (until May 1997); Mutual Funds
Warren, NJ 07059 Director of Jeffrey Co. (1992 (59 Funds)
to present); Director of QMED
(1999 to present).
J. Angus Ivory Trustee Since Retired; Director of Brown 13 None
(aged 71) 1999 Brothers Harriman Ltd.
Greenway Farm, (subsidiary of Brown Brothers
Tockenham, Swindon, Harriman & Co.) (until
Wiltshire, SN4 7PP December 2001); Advisor, RAF
England Central Fund (1992-June 2003).
</Table>
10
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO OTHER
POSITION(S) AND IN FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------
Alan G. Lowy Trustee Since Private Investor. 13 None
(aged 64) 1993
4111 Clear Valley
Drive
Encino, CA 91436
Arthur D. Trustee Since Retired; Executive Vice 13 None
Miltenberger 1992 President and Chief Financial
(aged 64) Officer of Richard K. Mellon
503 Darlington Road and Sons (until June 1998);
Ligonier, PA 15658 Vice President and Treasurer
of Richard King Mellon
Foundation (until June 1998);
Trustee, R.K. Mellon Family
Trusts (1981-June 2003);
General Partner, Mellon Family
Investment Company IV, V and
VI (1983-2002); Director of
Aerostructures Corporation
(aircraft manufacturer)
(1996-July 2003).
OFFICERS
Charles Izard President Since President of the Trust, BBH N/A N/A
(aged 44) 2003 Common Settlement Fund, Inc.,
140 Broadway BBH Common Settlement Fund II,
New York, NY 10005 Inc., BBH Fund, Inc. and the
BBH U.S. Money Market
Portfolio (since November
2002); Managing Director
(since January 2001), Senior
Vice President (1995-December
2000) of Brown Brothers
Harriman & Co. ("BBH & Co.")
Michael D. Martins Vice President, Since Vice President, Treasurer, N/A N/A
(aged 37) Treasurer, 2002 Principal Accounting Officer
140 Broadway Principal and Principal Financial
New York, NY 10005 Accounting Officer of the Trust, BBH
Officer and Common Settlement Fund, Inc.,
Principal BBH Common Settlement Fund II,
Financial Inc., BBH Fund, Inc. and the
Officer BBH U.S. Money Market
Portfolio; Vice President
(since April 2002) and
Assistant Vice President
(December 1996-March 2002) of
BBH & Co.
</Table>
11
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO OTHER
POSITION(S) AND IN FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------
Gail C. Jones Secretary Since Secretary of the Trust, BBH Common N/A N/A
(aged 49) 2002 Settlement Fund, Inc., BBH Common
1001 Liberty Avenue Settlement Fund II, Inc., BBH Fund,
Pittsburgh, PA Inc. and the BBH U.S. Money Market
15222-3779 Portfolio (since August 2002);
Counsel, ReedSmith, LLP (since
October 2002); Corporate Counsel
January 1997 to September 2002 and
Vice President January 1999 to
September 2002 of Federated Services
Company.
Peter J. Germain Vice President Since Vice President of the Trust, N/A N/A
(aged 43) 2002 BBH Common Settlement Fund, Inc.,
1001 Liberty Avenue BBH Common Settlement Fund II, Inc.,
Pittsburgh, PA BBH Fund, Inc. and the BBH U.S.
15222-3779 Money Market Portfolio (since
August 2002); Senior Vice President,
Federated Services Company
(since November 1997).
Judith J. Mackin Vice President Since Vice President of the Trust, N/A N/A
(aged 43) 2002 BBH Common Settlement Fund, Inc.,
1001 Liberty Avenue BBH Common Settlement Fund II, Inc.,
Pittsburgh, PA BBH Fund, Inc. and the BBH U.S.
15222-3779 Money Market Portfolio (since
August 2002); Vice President of
Federated Services Company
(since November 1997).
Victor Siclari Assistant Since Assistant Secretary of the Trust, N/A N/A
(aged 41) Secretary 2002 BBH Common Settlement Fund, Inc.,
1001 Liberty Avenue BBH Common Settlement Fund II, Inc.,
Pittsburgh, PA BBH Fund, Inc. and the BBH U.S.
15222-3779 Money Market Portfolio (since
August 2002); Partner, ReedSmith, LLP
(since October 2002); Vice President
(March 1996 to September 2002)
and Senior Corporate Counsel (July
1998 to September 2002) of Federated
Investors, Inc.
</Table>
12
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO OTHER
POSITION(S) AND IN FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- ------------------------------------------------------------------------------------------------------------------------------
Nancy D. Osborn Assistant Since Assistant Secretary of the Trust, N/A N/A
(aged 37) Secretary 2002 BBH Common Settlement Fund, Inc.,
140 Broadway BBH Common Settlement Fund II, Inc.,
New York, NY 10005 BBH Fund, Inc. and the BBH U.S.
Money Market Portfolio (since
August 2002); Assistant Vice
President (since April 2003) and
Associate of BBH & Co. (April
1996-March 2003).
John C. Smith Assistant Since Assistant Treasurer of the Trust, N/A N/A
(age 37) Treasurer 2002 BBH Common Settlement Fund, Inc.,
50 Milk Street BBH Common Settlement Fund II,
Boston, MA 02109 Inc., BBH Fund, Inc. and the BBH U.S.
Money Market Portfolio (since
August 2002); Assistant Vice
President (since September
2001), Associate (September 2000-August
2001) and Senior Analyst (June 1999-
August 2000) of BBH & Co.;
Manager, Fund Administration, State
Street Bank and Trust Company
(June 1997- May 1999).
Gregory Lomakin Assistant Since Assistant Treasurer of the Trust, N/A N/A
(aged 38) Treasurer 2002 BBH Common Settlement Fund, Inc.,
50 Milk Street BBH Common Settlement Fund II, Inc.,
Boston, MA 02109 BBH Fund, Inc. and the BBH U.S.
Money Market Portfolio (since
August 2002); Vice President (since
April 2003), Assistant Vice President
(April 2001-March 2003), and
Associate (May 1992-March 2001) of
BBH & Co.
</Table>
# Each Trustee holds office until he or she attains the age of 70 (72, in the
case of Trustees who were elected as such before January 1, 2000), or until
he or she sooner dies, resigns or is removed from office in accordance with
the provisions of the Trust's Declaration of Trust. All Officers of the Trust
hold office for one year and until their respective successors are chosen and
qualified (subject to the ability of the Trustees to remove any officer in
accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, BBH Fund, Inc., BBH Common Settlement
Fund, Inc., BBH Common Settlement Fund II, Inc. and BBH U.S. Money Market
Portfolio. The Trust, which has four series, and BBH Fund, Inc., which has
six series, are each counted as one "fund" for purposes of this table.
13
<Page>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
TO OBTAIN INFORMATION OR MAKE SHAREHOLDER INQUIRIES:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
[BROWN BROTHERS HARRIMAN LOGO]
<Page>
[BROWN BROTHERS HARRIMAN LOGO]
ANNUAL REPORT
JUNE 30, 2003
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 2003
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- ------------ ---------- ---------- ---------------
MUNICIPAL BONDS (98.7%)
EDUCATION (7.4%)
$ 1,935,000 Alabama State Public School & College Authority 11/01/05 5.250% $ 2,108,066
730,000 Arizona School Facilities Board 07/01/05 5.000 783,524
1,600,000 Connecticut State Health & Educational Facilities Authority* 07/01/03 1.000 1,600,000
1,100,000 Connecticut State Health & Educational Facilities Authority* 07/01/03 1.000 1,100,000
500,000 Florida State Board of Education, Lottery Revenue 07/01/05 5.000 536,250
100,000 New Jersey State Educational Facilities Authority* 07/01/03 1.000 100,000
1,500,000 Texas A & M University Revenue 05/15/07 5.000 1,671,105
---------------
TOTAL EDUCATION 7,898,945
---------------
ESCROWED TO MATURITY (a) (1.5%)
1,570,000 Mashantucket Western Pequot Tribe, Connecticut 09/01/03 6.250 1,583,942
---------------
GENERAL OBLIGATIONS (40.1%)
1,000,000 Arlington, Texas 08/15/05 5.200 1,081,020
1,475,000 Austin, Texas 09/01/06 5.250 1,641,808
2,000,000 Austin, Texas 09/01/06 5.000 2,210,140
1,515,000 Birmingham, Alabama 07/01/05 5.000 1,625,459
1,000,000 Chicago, Illinois, Metropolitan Water Reclamation District 12/01/07 5.000 1,124,330
1,000,000 Chicago, Illinois, Park District 01/01/08 4.500 1,093,590
1,000,000 Connecticut State 06/15/05 5.000 1,071,410
1,000,000 Delaware County, Pennsylvania 10/01/05 5.300 1,087,570
250,000 Denver, Colorado, City & County 08/01/04 5.250 261,483
655,000 Du Page County, Illinois, Forest Preserve District 11/01/05 6.000 723,886
1,000,000 Georgia State 02/01/05 5.000 1,059,560
1,000,000 Harris County, Texas 10/01/05 5.000 1,080,930
1,750,000 Hawaii State 02/01/07 5.250 1,951,635
1,175,000 Houston, Texas, Independent School District 07/15/06 3.500 1,242,598
1,000,000 Illinois State 06/01/05 5.500 1,078,760
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- ------------ ---------- ---------- ---------------
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATIONS (CONTINUED)
$ 1,500,000 Illinois State 08/01/07 5.000% $ 1,675,065
2,000,000 Massachusetts State 01/01/07 4.000 2,131,860
1,725,000 Milwaukee County, Wisconsin 08/01/07 4.000 1,863,224
1,000,000 Milwaukee, Wisconsin 09/01/06 5.000 1,105,070
1,000,000 Minneapolis, Minnesota 12/01/05 5.000 1,088,010
1,000,000 Mississippi State 12/01/05 5.000 1,086,510
500,000 New York, New York* 07/01/03 0.950 500,000
1,000,000 North Carolina State 09/01/05 5.000 1,079,620
845,000 Pennsylvania State 04/15/04 6.000 861,173
1,135,000 Salt Lake City, Utah 06/15/05 5.000 1,216,277
2,000,000 San Antonio, Texas 02/01/05 4.000 2,085,540
1,000,000 Shelby County, Tennessee 04/01/06 5.000 1,093,450
1,000,000 Tempe, Arizona, High School District 07/01/06 5.000 1,100,530
2,500,000 Texas State 10/01/06 5.000 2,769,150
1,000,000 Texas State 10/01/07 5.000 1,122,560
1,900,000 Tulsa County, Oklahoma, Independent School District 06/01/05 5.750 2,059,372
725,000 Virginia Beach, Virginia 07/15/07 5.300 820,910
1,000,000 Virginia State 06/01/06 4.000 1,072,540
---------------
TOTAL GENERAL OBLIGATIONS 43,065,040
---------------
INDUSTRIAL (2.6%)
600,000 Forsyth, Montana, Pollution Control Revenue* 07/01/03 1.100 600,000
1,000,000 Greater Detroit, Michigan, Resource Recovery Authority 12/13/04 5.500 1,060,630
1,020,000 Missouri State Environmental Improvement & Energy Resources
Authority, Pollution Control Revenue 01/01/06 6.000 1,131,272
---------------
TOTAL INDUSTRIAL 2,791,902
---------------
MISCELLANEOUS (7.9%)
1,000,000 Alaska State Housing Financial Corp. 12/01/05 5.000 1,085,010
1,000,000 Kentucky State Property & Buildings Commission 02/01/06 5.250 1,093,960
1,450,000 Maine Governmental Facilities Authority 10/01/05 5.500 1,583,719
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- ------------ ---------- ---------- ---------------
MUNICIPAL BONDS (CONTINUED)
MISCELLANEOUS (CONTINUED)
$ 3,000,000 Michigan State Building Authority 10/15/04 5.000% $ 3,152,670
600,000 New York, New York, City Transitional Finance Authority* 07/01/03 1.100 600,000
940,000 Virginia State Public Building Authority 08/01/04 5.000 980,645
---------------
TOTAL MISCELLANEOUS 8,496,004
---------------
PRE-REFUNDED (a) (5.2%)
1,500,000 Connecticut State 08/15/04 5.900 1,597,470
1,270,000 District of Columbia 06/01/04 5.800 1,351,369
1,000,000 Minnesota State 10/01/04 6.000 1,062,080
500,000 Nebraska Public Power District 01/01/05 5.250 535,290
1,000,000 West Palm Beach, Florida, Utilities System Revenue 10/01/04 5.750 1,068,850
---------------
TOTAL PRE-REFUNDED 5,615,059
---------------
SALES TAX (1.0%)
1,000,000 Jacksonville, Florida, Sales Tax Revenue 10/01/05 5.000 1,080,930
---------------
TRANSPORTATION (12.7%)
1,000,000 Massachusetts Bay Transportation Authority 03/01/05 5.300 1,066,460
1,000,000 Michigan State Trunk Line Highway Revenue 10/01/06 5.000 1,106,990
1,500,000 New Jersey State Transit Corp. 02/01/05 5.500 1,599,375
1,000,000 New Jersey State Transportation Trust 12/15/06 5.000 1,111,260
1,040,000 New Mexico Finance Authority, Highway Revenue 09/01/06 5.000 1,149,273
1,500,000 New Mexico State Highway Commission 06/15/06 5.000 1,647,870
1,000,000 Orlando & Orange County, Florida, Expressway Authority 07/01/07 4.500 1,098,950
1,500,000 Texas State Turnpike Authority 06/01/07 5.000 1,667,430
2,000,000 Texas State Turnpike Authority 06/01/07 4.000 2,148,240
925,000 Triborough Building & Tunnel Authority, New York 11/15/06 4.000 995,744
---------------
TOTAL TRANSPORTATION 13,591,592
---------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- ------------ ---------- ---------- ---------------
MUNICIPAL BONDS (CONTINUED)
UTILITIES (8.0%)
$ 3,000,000 Austin, Texas, Electric Utilities System Revenue 11/15/05 5.000% $ 3,255,030
900,000 Boise-Kuna Irrigation District, Idaho, Hydroelectricity
Plant Project 07/01/07 5.250 1,013,832
1,000,000 Nebraska Public Power District 01/01/07 4.000 1,070,490
2,000,000 Salt River Project, Arizona 01/01/05 5.000 2,111,320
1,000,000 St. John's River Power Park, Florida 10/01/06 5.000 1,106,650
---------------
TOTAL UTILITIES 8,557,322
---------------
WATER/SEWER (12.3%)
2,500,000 Dallas, Texas, Waterworks & Sewer System Revenue 10/01/06 5.000 2,769,150
1,500,000 De Kalb County, Georgia, Water & Sewer Revenue 10/01/05 6.250 1,661,445
2,500,000 Houston, Texas, Water & Sewer System Revenue 12/01/05 5.000 2,716,275
1,000,000 Irving, Texas, Waterworks & Sewer Revenue 08/15/07 4.375 1,095,440
1,500,000 Michigan Municipal Bond Authority, Clean Water Revenue 10/01/05 5.500 1,640,445
1,000,000 Michigan Municipal Bond Authority, Clean Water Revenue 10/01/06 5.000 1,108,670
1,000,000 Ohio State Water Development Authority 06/01/06 5.000 1,098,300
1,000,000 Tarrant Regional Water District, Texas 03/01/06 4.500 1,076,830
---------------
TOTAL WATER/SEWER 13,166,555
---------------
TOTAL INVESTMENTS (IDENTIFIED COST $102,538,369) (b) 98.7% $ 105,847,291
OTHER ASSETS IN EXCESS OF LIABILITIES 1.3 1,413,662
---------- ---------------
NET ASSETS 100.0% $ 107,260,953
========== ===============
</Table>
* Variable rate instrument. Interest rates change on specific dates (such as a
coupon or interest payment date). The yield shown represents the June 30,
2003 coupon rate.
(a) General obligation or revenue bonds that have been fully secured or
collateralized by an escrow fund consisting of U.S. Government obligations
that can adequately meet interest and principal payments. For pre-refunded
obligations, the stated maturity date represents the date of redemption
which, pursuant to the terms of the escrow agreement, has been accelerated
from the originally stated maturity date.
(b) The aggregate cost for federal income tax purposes is $102,538,369. The
aggregate gross unrealized appreciation is $3,308,922, and the aggregate
gross unrealized depreciation is $0, resulting in net unrealized
appreciation of $3,308,922.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2003
<Table>
ASSETS:
Investments in securities, at value (identified cost $102,538,369) $ 105,847,291
Cash 7,573
Interest receivable 1,215,973
Receivable for fund shares sold 325,831
Prepaid expenses 4,262
--------------
TOTAL ASSETS 107,400,930
--------------
LIABILITIES:
Payables for:
Professional fees 27,112
Capital stock redeemed 25,000
Investment advisory fees 21,342
Shareholder servicing/eligible institution fees 21,342
Custody fees 12,862
Administrative fees 12,806
Dividends and distributions declared 5,923
Board of Trustees' fees 2,909
Accrued expenses and other liabilities 10,681
--------------
TOTAL LIABILITIES 139,977
--------------
NET ASSETS $ 107,260,953
==============
Net Assets Consist of:
Paid-in capital 103,602,406
Distributions in excess of net investment income (5,923)
Accumulated net realized gain on investments 355,548
Net unrealized appreciation on investments 3,308,922
--------------
Net Assets $ 107,260,953
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($107,260,953 DIVIDED BY 9,870,215 shares) $ 10.87
==============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 2003
<Table>
NET INVESTMENT INCOME:
INCOME:
Interest income $ 3,271,073
--------------
EXPENSES:
Investment advisory fees 259,728
Shareholder servicing/eligible institution fees 259,728
Administrative fees 155,837
Custody fees 77,596
Professional fees 35,674
Board of Trustees' fees 10,346
Miscellaneous expenses 56,510
--------------
TOTAL EXPENSES 855,419
Expense offset arrangement (1,817)
--------------
NET EXPENSES 853,602
--------------
NET INVESTMENT INCOME 2,417,471
--------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 420,227
Net change in unrealized appreciation on investments 1,153,402
--------------
NET REALIZED AND UNREALIZED GAIN 1,573,629
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,991,100
==============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
7
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
-------------- --------------
INCREASE IN NET ASSETS:
Operations:
Net investment income $ 2,417,471 $ 2,209,539
Net realized gain on investments 420,227 439,730
Net change in unrealized appreciation on investments 1,153,402 877,474
-------------- --------------
Net increase in net assets resulting from operations 3,991,100 3,526,743
-------------- --------------
Dividends and distributions declared:
Net investment income (2,448,441) (2,220,414)
From net realized gain (317,193) (121,982)
-------------- --------------
Total dividends and distributions declared (2,765,634) (2,342,396)
-------------- --------------
Fund shares transactions:
Net proceeds from sales of fund shares 72,500,590 57,199,590
Net asset value of fund shares issued to shareholders in
reinvestment of distributions 917,532 893,480
Net cost of fund shares repurchased (49,747,275) (41,504,749)
-------------- --------------
Net increase in net assets resulting from fund shares
transactions 23,670,847 16,588,321
-------------- --------------
Total increase in net assets 24,896,313 17,772,668
NET ASSETS:
Beginning of year 82,364,640 64,591,972
-------------- --------------
END OF YEAR (including distributions in excess of net
investment income of $5,923 and undistributed net
investment income of $15,051, respectively) $ 107,260,953 $ 82,364,640
============== ==============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each year
<Table>
<Caption>
FOR THE YEARS ENDED JUNE 30,
--------------------------------------------------------------------
2003 2002 2001 2000 1999
----------- ---------- ---------- ---------- ----------
Net asset value, beginning of year $ 10.73 $ 10.53 $ 10.24 $ 10.30 $ 10.40
Income from investment operations:
Net investment income 0.25 0.31 0.35 0.34 0.35
Net realized and unrealized gain (loss)
on investments 0.18 0.22 0.29 (0.06) (0.10)
Less dividends and distributions:
From net investment income (0.26) (0.31) (0.35) (0.34) (0.35)
From net realized gains (0.03) (0.02) - - -
----------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 10.87 $ 10.73 $ 10.53 $ 10.24 $ 10.30
=========== ========== ========== ========== ==========
Total return 4.04% 5.14% 6.37% 2.88% 2.44%
Ratios/ Supplemental Data:
Net assets, end of year
(000's omitted) $ 107,261 $ 82,365 $ 64,592 $ 78,381 $ 75,719
Ratio of expenses to average net assets:
Net expenses paid by Fund 0.82% 0.83% 0.77% 0.85% 0.82%
Expense offset arrangement 0.00%(1) 0.01% 0.06% 0.03% 0.01%
----------- ---------- ---------- ---------- ----------
Total expenses 0.82% 0.84% 0.83% 0.88% 0.83%
Ratio of net investment
income to average net assets 2.33% 2.90% 3.36% 3.29% 3.37%
Portfolio turnover rate 82% 94% 45% 22% 44%
</Table>
- ----------
(1) Amount is less than 0.01%.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. BBH Tax Free
Short/Intermediate Fixed Income Fund (the "Fund") is a separate, diversified
series of BBH Trust (the "Trust") which is registered under the Investment
Company Act of 1940, as amended. The Trust is an open-end management
investment company organized as a Massachusetts business trust on June 7,
1983. The Fund commenced operations on July 23, 1992. The Declaration of
Trust permits the Trustees to create an unlimited number of series, each of
which may issue a separate class of shares. The Trustees have authorized the
issuance of an unlimited number of shares of the Fund. At June 30, 2003,
there were four series of the Trust.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require
management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS. Bonds and other fixed income securities (other
than short-term obligations, but including listed issues) are valued on
the basis of valuations furnished by pricing services, use of which has
been approved by the Board of Trustees. In making such valuations, the
pricing services utilize both dealer-supplied valuations and electronic
data processing techniques which take into account appropriate factors
such as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and
other market data, without exclusive reliance upon quoted prices or
exchange or over-the-counter prices, since such valuations are believed to
reflect more accurately the fair value of such securities.
Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures
established by and under the general supervision and responsibility of the
Trustees. Short-term investments which mature in 60 days or less are
valued at amortized cost, which approximates market value.
B. ACCOUNTING FOR INVESTMENTS. Investment transactions are accounted for on
the trade date. Realized gains and losses, if any, from investment
transactions are determined on the basis of identified cost. Interest
income is accrued daily and consists of interest accrued, discount earned
(including both original issue and market discount) and premium
amortization on the investments of the Fund.
C. FEDERAL INCOME TAXES. Each series of the Trust is treated as a separate
entity for federal income tax purposes. It is the Fund's policy to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its net income to its
shareholders. Accordingly, no federal income tax provision is required.
10
<Page>
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income are declared daily and paid monthly. Distributions from net capital
gains, if any, are paid annually and are recorded on the ex-dividend date.
Distributions paid by the Fund from net interest received on tax-exempt
bonds are not includable by shareholders as gross income for federal
income tax purposes because the Fund intends to meet certain requirements
of the Code applicable to regulated investment companies which will enable
the Fund to pay tax-exempt interest dividends.
E. CHANGE IN ACCOUNTING PRINCPLE. As required, effective July 1, 2001, the
Fund has adopted the provisions of the AICPA Audit and Accounting Guide
for Investment Companies and began amortizing discounts or premiums on
debt securities using the interest method. Prior to July 1, 2001, the Fund
amortized discount or premiums on debt securities using the straight-line
method.
2. TRANSACTIONS WITH AFFILIATES.
INVESTMENT ADVISORY FEES. The Trust has an investment advisory agreement with
Brown Brothers Harriman ("BBH") for which BBH receives a fee from the Fund
calculated daily and paid monthly at an annual rate equivalent to 0.25% of
the Fund's average daily net assets. BBH has established a separately
identifiable department (SID) to provide investment advice to mutual funds.
The SID is registered with the Securities and Exchange Commission under the
Investment Advisors Act of 1940. For the year ended June 30, 2003, the Fund
incurred $259,728 for advisory services.
ADMINISTRATIVE FEES. The Trust has an administration agreement with Brown
Brothers Harriman Trust Company, LLC ("BBHTC") for which BBHTC receives a fee
from the Fund calculated daily and paid monthly at an annual rate equivalent
to 0.15% of the Fund's average daily net assets. BBHTC has a
subadministration services agreement with Federated Services Company ("FSC")
for which FSC receives compensation paid by BBHTC. For the year ended June
30, 2003, the Fund incurred $155,837 for administrative services.
SHAREHOLDER SERVICING/ELIGIBLE INSTITUTION AGREEMENT. The Trust has a
shareholder servicing agreement and an eligible institution agreement with
BBH for which BBH receives a fee from the Fund calculated daily and paid
monthly at an annual rate equivalent to 0.25% of the Fund's average daily net
assets. For the year ended June 30, 2003, the Fund incurred $259,728 for
shareholder servicing/eligible institution services.
BOARD OF TRUSTEES' FEES. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2003, the Fund incurred $10,346 for Trustees' fees.
CUSTODY FEES. The Fund has a custody agreement with BBH for which BBH
receives a fee calculated and paid monthly. For the year ended June 30, 2003,
the Fund incurred $77,596 for custody services. These fees were reduced by
$1,817 as a result of an expense offset arrangement with the Fund's
custodian.
11
<Page>
3. INVESTMENT TRANSACTIONS. The Fund invests primarily in debt securities issued
by municipalities. The ability of the issuers of the debt securities to meet
their obligation may be affected by economic developments in a specific state
or municipality. The aggregate holdings by state ranged from 0.2% to 28.0% of
investments. At June 30, 2003, the five largest holdings by state were Texas
28.0%; Michigan 7.6%; Connecticut 6.6%; Illinois 5.4% and Florida 4.6%. For
the year ended June 30, 2003, the cost of purchases and the proceeds of sales
of investment securities other than short-term investments were $106,855,711
and $84,535,109, respectively.
4. SHARE TRANSACTIONS. Transactions in fund shares were as follows:
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
------------- -------------
Fund shares sold 6,694,603 5,371,131
Fund shares issued in connection
with reinvestment of dividends 84,673 84,073
Fund shares repurchased (4,588,238) (3,907,446)
------------- -------------
Net increase 2,191,038 1,547,758
============= =============
</Table>
12
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
INDEPENDENT AUDITORS' REPORT
Trustees and Shareholders
BBH Tax Free Short/Intermediate Fixed Income Fund (a series of BBH Trust):
We have audited the accompanying statement of assets and liabilities of BBH Tax
Free Short/Intermediate Fixed Income Fund (a series of BBH Trust) (the "Fund"),
including the portfolio of investments, as of June 30, 2003, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. Our procedures included confirmation of securities owned at June 30,
2003, by correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
Tax Free Short/Intermediate Fixed Income Fund as of June 30, 2003, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 15, 2003
13
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
ADDITIONAL FEDERAL TAX INFORMATION
June 30, 2003 (unaudited)
The percentage of tax-exempt dividends paid by the BBH Tax Free
Short/Intermediate Fixed Income Fund (the "Fund") for the year ended June 30,
2003 was 97.36%.
The Fund hereby designates the approximate amount of $381,894 as capital gain
dividends for the purpose of the dividends paid deduction.
In January 2004, the Fund will report on Form 1099 the tax status of all
distributions made during the calendar year 2003. Shareholders should use the
information on Form 1099 for their income tax returns.
14
<Page>
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The Federal Reserve continued to reduce overnight rates further throughout the
year in response to concerns over waning demand and potential deflation. By
fiscal year-end June 30, 2003, the Federal Reserve lowered overnight rates 75
basis points to 1.00% and rates declined to 35-year lows. The Federal Reserves
policy of monetary ease and the subsequent Treasury market rally aided the
municipal bond market.
On the supply side, the municipal market experienced another year of increased
new issuance as the low interest rate environment encouraged municipalities to
issue bonds to refinance higher outstanding debt and bridge budget gaps. Adding
some uncertainty to the municipal market was the announcement of President
Bush's $674 billion economic stimulus package. Included were proposals to
eliminate the double taxation of dividends and the acceleration of marginal
tax-rate cuts. The proposals, if fully enacted, would negatively impact the
relative appeal of municipal securities versus other asset classes. Despite
these factors, municipals posted impressive gains but lagged other fixed income
asset classes. Yields fell 70 to 102 basis points on short and intermediate
maturity high grade municipal securities.
On the demand side, tax-exempts saw positive mutual fund flows and retail
interest remained strong as investors remained risk adverse. The appeal of
municipals comes primarily from its low default risk and relatively low price
volatility compared to other asset classes. Insurance company demand remained
strong as profitability increased their appetite for tax-exempt income. The
relative cheapness of municipals was the driving force behind non-traditional
buyers such as hedge funds, corporate accounts, and crossover and arbitrage
buyers. Interest peaked especially during periods when municipal bond yields
lagged Treasuries and some high-quality municipals traded at or near Treasury
yields.
The Fund's Investment advisor maintained a weighted average in the Fund of 2.5
years. Portfolio holdings were geographically diversified across various
sectors. Throughout the fiscal year we emphasized high quality securities and
increased our exposure to less credit sensitive sectors. The widening of credit
spreads was most pronounced in mid to lower tier credits. Spreads on AAA to
AA-rated securities remained relatively stable, while A-rated spreads rose to
their widest levels. On a selective basis, we avoided adding to the general
obligation sector as deterioration on the state and local level triggered spread
widening as most states worked to close their budget deficits. Throughout the
fiscal year, we added exposure to insured, revenue backed and essential service
sectors, such as water and sewer, higher education and transportation revenue
bonds.
15
<Page>
GROWTH OF $10,000 INVESTED IN BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
The graph below illustrates the hypothetical investment of $10,000(1) in the
Fund from July 23, 1992 to June 30, 2003 as compared to the Lehman Brothers
3-Year Municipal Index ("LB 3 Yr Muni")(2).
[CHART]
<Table>
<Caption>
TOTAL RETURN
FOR THE PERIOD ENDED JUNE 30, 2003
SINCE INCEPTION
ONE YEAR FIVE YEARS (NOT ANNUALIZED)
- -----------------------------------------
4.04% 4.16% 4.21%
</Table>
<Table>
<Caption>
BBTFX* LB 3 YR MUNI
7/23/92 $ 10,000
7/31/92 $ 10,060 $ 10,000
8/31/92 $ 10,043 $ 9,955
9/30/92 $ 10,142 $ 10,037
10/31/92 $ 10,075 $ 9,997
11/30/92 $ 10,192 $ 10,067
12/31/92 $ 10,243 $ 10,128
1/31/93 $ 10,341 $ 10,204
2/28/93 $ 10,501 $ 10,364
3/31/93 $ 10,462 $ 10,333
4/30/93 $ 10,523 $ 10,393
5/31/93 $ 10,540 $ 10,421
6/30/93 $ 10,615 $ 10,488
7/31/93 $ 10,594 $ 10,493
8/31/93 $ 10,697 $ 10,590
9/30/93 $ 10,737 $ 10,637
10/31/93 $ 10,764 $ 10,659
11/30/93 $ 10,744 $ 10,646
12/31/93 $ 10,849 $ 10,757
1/31/94 $ 10,908 $ 10,845
2/28/94 $ 10,813 $ 10,744
3/31/94 $ 10,746 $ 10,614
4/30/94 $ 10,744 $ 10,676
5/31/94 $ 10,774 $ 10,727
6/30/94 $ 10,784 $ 10,730
7/31/94 $ 10,867 $ 10,819
8/31/94 $ 10,911 $ 10,858
9/30/94 $ 10,879 $ 10,831
10/31/94 $ 10,868 $ 10,805
11/30/94 $ 10,827 $ 10,785
12/31/94 $ 10,881 $ 10,832
1/31/95 $ 10,948 $ 10,921
2/28/95 $ 11,082 $ 11,037
3/31/95 $ 11,150 $ 11,137
4/30/95 $ 11,183 $ 11,174
5/31/95 $ 11,330 $ 11,345
6/30/95 $ 11,363 $ 11,373
7/31/95 $ 11,440 $ 11,493
8/31/95 $ 11,484 $ 11,583
9/30/95 $ 11,496 $ 11,615
10/31/95 $ 11,543 $ 11,671
11/30/95 $ 11,612 $ 11,746
12/31/95 $ 11,656 $ 11,795
1/31/96 $ 11,734 $ 11,887
2/29/96 $ 11,736 $ 11,889
3/31/96 $ 11,692 $ 11,861
4/30/96 $ 11,718 $ 11,875
5/31/96 $ 11,730 $ 11,886
6/30/96 $ 11,766 $ 11,957
7/31/96 $ 11,838 $ 12,023
8/31/96 $ 11,850 $ 12,041
9/30/96 $ 11,921 $ 12,114
10/31/96 $ 11,978 $ 12,199
11/30/96 $ 12,071 $ 12,313
12/31/96 $ 12,074 $ 12,319
1/31/97 $ 12,117 $ 12,373
2/28/97 $ 12,166 $ 12,434
3/31/97 $ 12,108 $ 12,369
4/30/97 $ 12,133 $ 12,422
5/31/97 $ 12,228 $ 12,523
6/30/97 $ 12,277 $ 12,597
7/31/97 $ 12,372 $ 12,746
8/31/97 $ 12,370 $ 12,721
9/30/97 $ 12,433 $ 12,813
10/31/97 $ 12,469 $ 12,869
11/30/97 $ 12,493 $ 12,906
12/31/97 $ 12,554 $ 12,994
1/31/98 $ 12,626 $ 13,079
2/28/98 $ 12,649 $ 13,107
3/31/98 $ 12,664 $ 13,128
4/30/98 $ 12,641 $ 13,110
5/31/98 $ 12,738 $ 13,232
6/30/98 $ 12,799 $ 13,276
7/31/98 $ 12,824 $ 13,324
8/31/98 $ 12,934 $ 13,453
9/30/98 $ 12,997 $ 13,539
10/31/98 $ 13,045 $ 13,604
11/30/98 $ 13,069 $ 13,637
12/31/98 $ 13,119 $ 13,670
1/31/99 $ 13,204 $ 13,794
2/28/99 $ 13,193 $ 13,810
3/31/99 $ 13,191 $ 13,821
4/30/99 $ 13,231 $ 13,864
5/31/99 $ 13,201 $ 13,844
6/30/99 $ 13,111 $ 13,761
7/31/99 $ 13,174 $ 13,829
8/31/99 $ 13,172 $ 13,846
9/30/99 $ 13,208 $ 13,898
10/31/99 $ 13,205 $ 13,900
11/30/99 $ 13,242 $ 13,961
12/31/99 $ 13,227 $ 13,939
1/31/2000 $ 13,238 $ 13,964
2/29/2000 $ 13,278 $ 14,007
3/31/2000 $ 13,330 $ 14,079
4/30/2000 $ 13,324 $ 14,081
5/31/2000 $ 13,337 $ 14,095
6/30/2000 $ 13,489 $ 14,274
7/31/2000 $ 13,584 $ 14,389
8/31/2000 $ 13,662 $ 14,499
9/30/2000 $ 13,660 $ 14,502
10/31/2000 $ 13,725 $ 14,584
11/30/2000 $ 13,764 $ 14,643
12/31/2000 $ 13,910 $ 14,807
1/31/2001 $ 14,083 $ 15,031
2/28/2001 $ 14,118 $ 15,089
3/31/2001 $ 14,214 $ 15,195
4/30/2001 $ 14,187 $ 15,173
5/31/2001 $ 14,309 $ 15,312
6/30/2001 $ 14,349 $ 15,380
7/31/2001 $ 14,444 $ 15,505
8/31/2001 $ 14,567 $ 15,666
9/30/2001 $ 14,647 $ 15,745
10/31/2001 $ 14,716 $ 15,847
11/30/2001 $ 14,669 $ 15,797
12/31/2001 $ 14,677 $ 15,782
1/31/2002 $ 14,824 $ 15,983
2/28/2002 $ 14,911 $ 16,102
3/31/2002 $ 14,679 $ 15,862
4/30/2002 $ 14,895 $ 16,096
5/31/2002 $ 14,970 $ 16,189
6/30/2002 $ 15,085 $ 16,328
7/31/2002 $ 15,188 $ 16,455
8/31/2002 $ 15,273 $ 16,560
9/30/2002 $ 15,360 $ 16,691
10/31/2002 $ 15,292 $ 16,600
11/30/2002 $ 15,309 $ 16,643
12/31/2002 $ 15,503 $ 16,882
1/31/2003 $ 15,519 $ 16,935
2/28/2003 $ 15,618 $ 17,044
3/31/2003 $ 15,564 $ 17,025
4/30/2003 $ 15,609 $ 17,070
5/31/2003 $ 15,710 $ 17,202
6/30/2003 $ 15,694 $ 17,175
</Table>
*net of fees and expenses
Past performance is no guarantee of future results. Returns shown do not reflect
the deduction of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares. For after-tax returns, contact the Fund at
1-800-625-5759. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Mutual funds are not obligations of or guaranteed by any bank and are not
federally insured.
- ----------
(1) The Fund's performance assumes the reinvestment of the dividends and
distributions. The LB 3 Yr Muni reflects reinvestment of interest on
securities in the index. The LB 3 Yr Muni is not adjusted to reflect taxes,
sales charges, expenses or other fees that the Securities and Exchange
Commission ("SEC") requires to be reflected in the Fund's performance.
(2) Lehman Brothers 3-Year Municipal Index is a broad-based market index. To
be included in the index, bonds must have a minimum credit rating of Baa.
They must have an outstanding par value of at least $5 million and be issued
as part of a transaction of at least $50 million. The bonds must have a
dated-date after December 31, 1990 and must be at least one year from their
maturity date. As of January 1996, the index also includes zero coupon bonds
and bonds subject to the Alternative Minimum Tax. Index returns do not
reflect taxes, sales charges, expenses or other fees that the SEC requires to
be reflected in the Fund's performance. The index is unmanaged, and it is not
possible to invest directly in an index.
16
<Page>
TRUSTEES AND OFFICERS OF BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
(unaudited)
Information pertaining to the Trustees of the Trust and executive officers of
the Trust is set forth below. Part B to the Registration Statement of BBH Tax
Free Short/Intermediate Fixed Income Fund includes additional information about
the Fund's Trustees and is available upon request without charge through your
financial advisor.
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- -----------------------------------------------------------------------------------------------------------------------------------
Trustees
Joseph V. Shields Jr. Chairman of Since Managing Director, Chairman and Chief Executive 13 None
(aged 65) the Board, and 1990 Officer of Shields & Company (registered
Shields & Company Trustee broker-dealer and member of New York Stock
140 Broadway Exchange); Chairman of Capital Management
New York, NY 10005 Associates, Inc. (registered investment adviser);
Vice Chairman and Trustee of New York Racing
Association; Director of Flowers Industries, Inc.
(diversified food company).
Eugene P. Beard Trustee Since Retired; Vice Chairman-Finance/Operations and CFO 13 Director of
(aged 68) 1993 (Until February 2002); Special Advisor (February Old Westbury
The Interpublic Group 2002 to present), The Interpublic Group of Funds (5);
of Companies, Inc., Companies, Inc. Trustee of
372 Danbury Road Sandhill
2nd Floor Investment
Wilton, CT 06897 Fund II.
Richard Carpenter Trustee Since Retired; Director of Investments, Pennsylvania 13 None
(aged 70) 1999 Public School Employees' Retirement System (until
10820 North December 1997).
La Quinta Drive
Tucson, AZ 85737
David P. Feldman Trustee Since Retired; Chairman and CEO of AT&T Investment 13 Director of
(aged 63) 1990 Management Corporation (until May 1997); Director Dreyfus
3 Tall Oaks Drive of Jeffrey Co. (1992 to present); Director of Mutual Funds
Warren, NJ 07059 QMED (1999 to present). (59 Funds)
</Table>
17
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- -----------------------------------------------------------------------------------------------------------------------------------
J. Angus Ivory Trustee Since Retired; Director of Brown Brothers Harriman Ltd. 13 None
(aged 71) 1999 (subsidiary of Brown Brothers Harriman & Co.)
Greenway Farm, (until December 2001); Advisor, RAF Central Fund
Tockenham, Swindon, (1992-June 2003).
Wiltshire, SN4 7PP
England
Alan G. Lowy Trustee Since Private Investor. 13 None
(aged 64) 1993
4111 Clear Valley
Drive
Encino, CA 91436
Arthur D. Miltenberger Trustee Since Retired; Executive Vice President and Chief 13 None
(aged 64) 1992 Financial Officer of Richard K. Mellon and Sons
503 Darlington Road (until June 1998); Vice President and Treasurer
Ligonier, PA 15658 of Richard King Mellon Foundation (until June
1998); Trustee, R.K. Mellon Family Trusts
(1981-June 2003); General Partner, Mellon Family
Investment Company IV, V and VI (1983-2002);
Director of Aerostructures Corporation (aircraft
manufacturer) (1996-July 2003).
Officers
Charles Izard President Since President of the Trust, BBH Common Settlement N/A N/A
(aged 44) 2003 Fund, Inc., BBH Common Settlement Fund II, Inc.,
140 Broadway BBH Fund, Inc. and the BBH U.S. Money Market
New York, NY 10005 Portfolio (since November 2002); Managing
Director (since January 2001), Senior Vice
President (1995-December 2000) of Brown Brothers
Harriman & Co. ("BBH & Co.")
</Table>
18
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- -----------------------------------------------------------------------------------------------------------------------------------
Michael D. Martins Vice President, Since Vice President, Treasurer, Principal Accounting N/A N/A
(aged 37) Treasurer, 2002 Officer and Principal Financial Officer of the
140 Broadway Principal Trust, BBH Common Settlement Fund, Inc., BBH
New York, NY 10005 Accounting Common Settlement Fund II, Inc., BBH Fund, Inc.
Officer and and the BBH U.S. Money Market Portfolio; Vice
Principal President (since April 2002) and Assistant Vice
Financial President (December 1996-March 2002) of BBH & Co.
Officer
Gail C. Jones Secretary Since Secretary of the Trust, BBH Common Settlement N/A N/A
(aged 49) 2002 Fund, Inc., BBH Common Settlement Fund II, Inc.,
1001 Liberty Avenue BBH Fund, Inc. and the BBH U.S. Money Market
Pittsburgh, PA Portfolio (since August 2002); Counsel,
15222-3779 ReedSmith, LLP (since October 2002); Corporate
Counsel January 1997 to September 2002 and Vice
President January 1999 to September 2002 of
Federated Services Company.
Peter J. Germain Vice President Since Vice President of the Trust, BBH Common N/A N/A
(aged 43) 2002 Settlement Fund, Inc., BBH Common Settlement Fund
1001 Liberty Avenue II, Inc., BBH Fund, Inc. and the BBH U.S. Money
Pittsburgh, PA Market Portfolio (since August 2002); Senior Vice
15222-3779 President, Federated Services Company (since
November 1997).
Judith J. Mackin Vice President Since Vice President of the Trust, BBH Common N/A N/A
(aged 43) 2002 Settlement Fund, Inc., BBH Common Settlement Fund
1001 Liberty Avenue II, Inc., BBH Fund, Inc. and the BBH U.S. Money
Pittsburgh, PA Market Portfolio (since August 2002); Vice
15222-3779 President of Federated Services Company (since
November 1997).
</Table>
19
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- -----------------------------------------------------------------------------------------------------------------------------------
Victor Siclari Assistant Since Assistant Secretary of the Trust, BBH Common N/A N/A
(aged 41) Secretary 2002 Settlement Fund, Inc., BBH Common Settlement Fund
1001 Liberty Avenue II, Inc., BBH Fund, Inc. and the BBH U.S. Money
Pittsburgh, PA Market Portfolio (since August 2002); Partner,
15222-3779 ReedSmith, LLP (since October 2002); Vice
President (March 1996 to September 2002) and
Senior Corporate Counsel (July 1998 to September
2002) of Federated Investors, Inc.
Nancy D. Osborn Assistant Since Assistant Secretary of the Trust, BBH Common N/A N/A
(aged 37) Secretary 2002 Settlement Fund, Inc., BBH Common Settlement Fund
140 Broadway II, Inc., BBH Fund, Inc. and the BBH U.S. Money
New York, NY 10005 Market Portfolio (since August 2002); Assistant
Vice President (since April 2003) and Associate
of BBH & Co. (April 1996-March 2003).
John C. Smith Assistant Since Assistant Treasurer of the Trust, BBH Common N/A N/A
(age 37) Treasurer 2002 Settlement Fund, Inc., BBH Common Settlement Fund
50 Milk Street II, Inc., BBH Fund, Inc. and the BBH U.S. Money
Boston, MA 02109 Market Portfolio (since August 2002); Assistant
Vice President (since September 2001), Associate
(September 2000-August 2001) and Senior Analyst
(June 1999-August 2000) of BBH & Co.; Manager,
Fund Administration, State Street Bank and Trust
Company (June 1997-May 1999).
</Table>
20
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS BY TRUSTEE^ TRUSTEE
- -----------------------------------------------------------------------------------------------------------------------------------
Gregory Lomakin Assistant Since Assistant Treasurer of the Trust, BBH Common N/A N/A
(aged 38) Treasurer 2002 Settlement Fund, Inc., BBH Common Settlement Fund
50 Milk Street II, Inc., BBH Fund, Inc. and the BBH U.S. Money
Boston, MA 02109 Market Portfolio (since August 2002); Vice
President (since April 2003), Assistant Vice
President (April 2001-March 2003), and Associate
(May 1992-March 2001) of BBH & Co.
</Table>
# Each Trustee holds office until he or she attains the age of 70 (72, in the
case of Trustees who were elected as such before January 1, 2000), or until
he or she sooner dies, resigns or is removed from office in accordance with
the provisions of the Trust's Declaration of Trust. All Officers of the Trust
hold office for one year and until their respective successors are chosen and
qualified (subject to the ability of the Trustees to remove any officer in
accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, BBH Fund, Inc., BBH Common Settlement
Fund, Inc., BBH Common Settlement Fund II, Inc. and BBH U.S. Money Market
Portfolio. The Trust, which has four series, and BBH Fund, Inc., which has
six series, are each counted as one "fund" for purposes of this table.
21
<Page>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
TO OBTAIN INFORMATION OR MAKE SHAREHOLDER INQUIRIES:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
[BROWN BROTHERS HARRIMAN LOGO]
<Page>
[BROWN BROTHERS HARRIMAN LOGO]
ANNUAL REPORT
JUNE 30, 2003
BBH TAX EXEMPT MONEY FUND
<Page>
BBH TAX EXEMPT MONEY FUND
PORTFOLIO OF INVESTMENTS
June 30, 2003
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- ---------- --------- --------------
MUNICIPAL BONDS (79.4%)
EDUCATION (8.3%)
$ 7,200,000 Connecticut State Health & Educational
Facilities Authority* 07/01/03 1.000% $ 7,200,000
2,700,000 Connecticut State Health & Educational
Facilities Authority* 07/02/03 1.000 2,700,000
500,000 Connecticut State Health & Educational
Facilities Authority 11/01/03 5.500 507,181
1,100,000 East Carolina University, North Carolina* 07/02/03 1.100 1,100,000
3,740,000 Massachusetts State Health & Educational
Facilities Authority* 07/01/03 0.900 3,740,000
3,000,000 Massachusetts State Health & Educational
Facilities Authority* 07/03/03 0.950 3,000,000
1,900,000 Massachusetts State Industrial Finance Agency,
Showa Women's Institute Revenue* 07/01/03 1.100 1,900,000
500,000 Muncie, Indiana, School Building Corp. 07/15/04 6.000 525,773
2,800,000 New Jersey State Educational Facilities
Authority* 07/01/03 1.000 2,800,000
3,000,000 Ohio State University Revenue* 07/03/03 1.000 3,000,000
2,300,000 Ohio State University Revenue* 07/09/03 1.000 2,300,000
1,000,000 Ohio State University Revenue* 07/09/03 0.930 1,000,000
2,770,000 Pennsylvania State Higher Educational
Facilities Authority* 07/02/03 1.050 2,770,000
1,000,000 Pennsylvania State Higher Educational
Facilities Authority 06/15/04 5.250 1,039,478
2,500,000 University of Missouri Revenue* 07/01/03 0.980 2,500,000
1,800,000 University of Pittsburgh Revenue* 07/02/03 1.050 1,800,000
800,000 Virginia State Public School Authority 08/01/03 5.000 802,640
--------------
TOTAL EDUCATION 38,685,072
--------------
ESCROWED TO MATURITY (a) (1.2%)
1,895,000 Intermountain Power Agency, Utah, Power
Supply Revenue 07/01/03 6.250 1,895,000
745,000 Massachusetts State Water Pollution
Abatement Trust 02/01/04 6.000 766,641
1,000,000 New Jersey State Transit Corp. 09/01/03 5.500 1,007,375
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
2
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- ---------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
ESCROWED TO MATURITY (CONTINUED)
$ 500,000 New York State Power Authority 01/01/04 6.700% $ 513,447
800,000 Rhode Island State 08/01/03 6.250 803,511
480,000 Stamford, Connecticut 08/15/03 5.000 482,344
--------------
TOTAL ESCROWED TO MATURITY 5,468,318
--------------
GENERAL OBLIGATIONS (22.8%)
2,000,000 Baltimore County, Maryland 09/01/03 3.000 2,005,717
1,000,000 Boston, Massachusetts 02/01/04 5.000 1,023,110
15,100,000 Clark County, Nevada, School District* 07/09/03 0.920 15,100,000
5,000,000 Connecticut State* 07/03/03 1.100 5,000,000
500,000 Cook County, Illinois 11/15/03 5.100 507,374
500,000 Dade County, Florida, School District 07/15/03 5.000 500,745
750,000 Delaware State 12/01/03 5.700 763,694
750,000 Delaware State 01/01/04 5.000 764,288
2,495,000 Delaware State 04/01/04 5.250 2,572,046
2,385,000 District of Columbia* 07/02/03 1.050 2,385,000
4,310,000 Du Page, Illinois, Water Commission 03/01/04 5.000 4,422,675
4,750,000 Georgia State 07/01/03 5.500 4,750,000
4,890,000 Georgia State 11/01/03 3.250 4,914,873
450,000 Georgia State 04/01/04 6.250 467,180
1,200,000 Georgia State 07/01/04 6.500 1,266,251
4,000,000 Harris County, Texas* 07/02/03 1.100 4,000,000
1,000,000 Hawaii State 09/01/03 6.000 1,008,454
2,200,000 Hennepin County, Minnesota* 07/03/03 0.850 2,200,000
1,400,000 Hennepin County, Minnesota* 07/03/03 0.850 1,400,000
1,000,000 Humble, Texas, Independent School District 02/15/04 3.500 1,015,429
600,000 Louisiana State 04/15/04 6.000 623,313
500,000 Maryland State 07/15/03 4.000 500,558
1,500,000 Maryland State 08/01/03 5.125 1,505,299
305,000 Minneapolis, Minnesota* 07/03/03 1.050 305,000
2,000,000 Minneapolis, Minnesota* 07/09/03 1.100 2,000,000
620,000 Minneapolis, Minnesota* 07/09/03 1.100 620,000
500,000 Minnesota State 08/01/03 5.100 501,392
2,325,000 Minnesota State 08/01/03 4.750 2,331,657
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
3
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- --------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATIONS (CONTINUED)
$ 2,000,000 Minnesota State 08/01/03 4.400% $ 2,005,821
1,000,000 Missouri State 10/01/03 4.000 1,007,487
400,000 Monmouth County, New Jersey 09/01/03 4.400 402,176
2,305,000 Montgomery County, Maryland 07/01/03 5.500 2,305,000
5,000,000 New York, New York* 07/01/03 0.950 5,000,000
2,500,000 New York, New York* 07/01/03 0.950 2,500,000
1,900,000 New York, New York* 07/01/03 0.950 1,900,000
1,800,000 New York, New York* 07/01/03 0.950 1,800,000
1,100,000 New York, New York* 07/01/03 0.950 1,100,000
1,100,000 New York, New York* 07/01/03 0.950 1,100,000
600,000 New York, New York* 07/01/03 0.950 600,000
325,000 New York, New York* 07/01/03 0.950 325,000
200,000 New York, New York* 07/01/03 0.950 200,000
100,000 New York, New York* 07/01/03 0.950 100,000
1,000,000 New York, New York* 07/09/03 1.010 1,000,000
2,000,000 New York, New York* 07/09/03 0.950 2,000,000
550,000 North Carolina State 09/01/03 5.000 553,237
600,000 North Carolina State 03/01/04 4.500 613,914
750,000 Richardson, Texas, Independent School
District 02/15/04 5.000 768,371
1,590,000 Richland County, South Carolina, School
District 03/01/04 4.900 1,630,127
500,000 Ridgefield, Connecticut 09/15/03 4.000 503,019
3,635,000 Seattle, Washington* 07/02/03 1.050 3,635,000
1,500,000 Seattle, Washington 08/01/03 4.000 1,503,566
5,000,000 Seattle, Washington 12/01/03 3.000 5,034,641
800,000 South Carolina State 01/01/04 5.000 815,929
1,000,000 Utah State 07/01/03 5.000 1,000,000
900,000 Utah State* 07/09/03 1.050 900,000
1,000,000 Washington State 09/01/03 5.300 1,007,127
480,000 Washington Suburban Sanitary Commission,
Maryland 06/01/04 4.400 494,854
--------------
TOTAL GENERAL OBLIGATIONS 106,259,324
--------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
4
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- --------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
HEALTH CARE (5.5%)
$ 2,700,000 Cuyahoga County, Ohio, Hospital Revenue* 07/09/03 0.920% $ 2,700,000
800,000 Harris County, Texas, Health Facilities
Development Corp.* 07/01/03 1.000 800,000
5,500,000 Illinois Health Care Facilities Authority* 07/02/03 0.990 5,500,000
9,500,000 Montana State Health Facilities Authority* 07/02/03 1.200 9,500,000
1,500,000 Oklahoma State Industries Authority,
Hospital Revenue* 07/01/03 1.000 1,500,000
1,200,000 Reno, Nevada, Hospital Revenue* 07/09/03 1.060 1,200,000
4,200,000 Washington State Health Care Facilities
Authority* 07/09/03 1.090 4,200,000
--------------
TOTAL HEALTH CARE 25,400,000
--------------
INDUSTRIAL (12.7%)
2,600,000 Berkeley County, South Carolina, Pollution
Control Revenue* 07/01/03 0.950 2,600,000
5,400,000 Columbia, Alabama, Pollution Control
Revenue* 07/01/03 1.100 5,400,000
2,300,000 Columbia, Alabama, Pollution Control
Revenue* 07/01/03 1.100 2,300,000
600,000 Delaware County, Pennsylvania, Industrial
Development Authority* 07/02/03 0.870 600,000
9,950,000 Forsyth, Montana, Pollution Control Revenue* 07/01/03 1.100 9,950,000
4,400,000 Gulf Coast Waste Disposal Authority, Texas* 07/03/03 0.920 4,400,000
1,000,000 Hurley, New Mexico, Pollution Control
Revenue* 07/01/03 0.950 1,000,000
5,000,000 Jackson County, Mississippi, Port Facility
Revenue* 07/01/03 0.950 5,000,000
3,700,000 Joliet, Illinois, Regional Port District* 07/09/03 0.920 3,700,000
5,400,000 Kemmerer, Wyoming, Pollution Control
Revenue* 07/09/03 0.920 5,400,000
500,000 Lincoln County, Wyoming, Pollution Control
Revenue* 07/01/03 0.900 500,000
7,500,000 Lincoln Country, Wyoming, Pollution Control
Revenue* 07/09/03 0.920 7,500,000
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
5
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- --------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
INDUSTRIAL (CONTINUED)
$ 6,500,000 Lincoln County, Wyoming, Pollution Control
Revenue* 07/09/03 0.920% $ 6,500,000
800,000 Midlothian, Texas, Pollution Control Revenue* 07/02/03 0.970 800,000
2,600,000 Moffat County, Colorado, Pollution Control
Revenue* 07/01/03 0.950 2,600,000
1,000,000 Port Arthur, Texas, Navigation District* 07/01/03 0.950 1,000,000
--------------
TOTAL INDUSTRIAL 59,250,000
--------------
MISCELLANEOUS (10.9%)
1,500,000 California Housing Finance Agency* 07/09/03 1.300 1,500,000
2,900,000 California Housing Finance Agency* 07/09/03 0.940 2,900,000
10,000,000 California State 06/16/04 2.000 10,082,639
1,365,000 Clayton County, Georgia, Housing Authority* 07/09/03 1.500 1,365,000
1,500,000 Colorado Housing & Finance Authority* 07/02/03 1.050 1,500,000
500,000 Michigan Municipal Bond Authority 10/01/03 6.000 505,216
5,500,000 Michigan State Housing Development
Authority, Rental Housing Revenue* 07/02/03 0.950 5,500,000
3,150,000 New Hampshire Municipal Bond Bank 08/15/03 5.250 3,166,003
1,600,000 New Jersey Sports & Exposition Authority 09/01/03 4.250 1,608,484
900,000 New York State Local Government
Assistance Corp.* 07/09/03 0.900 900,000
12,100,000 New York, New York, City Transitional
Finance Authority* 07/01/03 1.100 12,100,000
500,000 New York, New York, City Transitional
Finance Authority* 07/01/03 0.980 500,000
200,000 New York, New York, City Transitional
Finance Authority* 07/01/03 0.950 200,000
1,000,000 New York, New York, City Transitional
Finance Authority* 07/02/03 1.000 1,000,000
2,170,000 New York, New York, City Transitional
Finance Authority* 07/09/03 1.250 2,170,000
550,000 Orem, Utah, Municipal Building Authority 06/15/04 4.500 567,899
5,000,000 Riverside County, California, Special Tax* 07/02/03 0.950 5,000,000
--------------
TOTAL MISCELLANEOUS 50,565,241
--------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
6
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- --------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED (a) (5.3%)
$ 500,000 Atlanta, Georgia, Water & Sewer Revenue 01/01/04 5.000% $ 519,563
2,500,000 Atlanta, Georgia, Water & Sewer Revenue 01/01/04 4.750 2,595,863
4,000,000 Burlington County, New Jersey, Bridge
Commission 10/01/03 5.300 4,077,728
1,235,000 Charlotte, North Carolina 02/01/04 5.900 1,294,308
1,000,000 Dallas, Texas 02/15/04 5.000 1,024,694
645,000 Dallas, Texas, Independent School District 08/15/03 5.700 648,554
1,000,000 Honolulu, Hawaii, City & County 06/01/04 6.000 1,054,408
500,000 Jacksonville, Florida, Electric Authority
Revenue 10/01/03 5.250 505,200
1,000,000 Maricopa County, Arizona, Elementary School
District 07/01/03 5.400 1,020,000
2,400,000 Maricopa County, Arizona, Stadium District 07/01/03 5.500 2,448,000
3,000,000 Massachusetts State Health & Educational
Facilities Authority 11/24/03 5.300 3,109,927
1,040,000 Maui County, Hawaii 06/01/04 5.150 1,088,940
500,000 New York State Thruway Authority 04/01/04 5.750 527,442
3,000,000 Ohio State Public Facilities Commission 12/01/03 4.250 3,068,821
750,000 Salt Lake City, Utah, Water & Sewer Revenue 02/01/04 6.100 771,731
500,000 Stamford, Connecticut 03/15/04 5.300 524,622
500,000 Wisconsin State 05/01/04 5.500 517,886
--------------
TOTAL PRE-REFUNDED 24,797,687
--------------
SALES TAX (0.1%)
700,000 Clearwater, Florida, Sales Tax Revenue 12/01/03 4.000 707,693
--------------
TRANSPORTATION (0.2%)
1,000,000 Central Oklahoma Transportation &
Parking Authority 07/01/04 4.950 1,039,018
--------------
UTILITIES (1.9%)
1,105,000 Intermountain Power Agency, Utah, Power
Supply Revenue 07/01/03 6.250 1,105,000
2,100,000 Jacksonville, Florida, Electric Authority Revenue* 07/01/03 1.000 2,100,000
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
7
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- --------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
UTILITIES (CONTINUED)
$ 1,800,000 Jacksonville, Florida, Electric Authority Revenue* 07/01/03 1.000% $ 1,800,000
500,000 Louisiana State Energy & Power Authority,
Power Project Revenue 01/01/04 5.500 511,040
1,000,000 Salt River Project, Arizona 01/01/04 5.000 1,019,813
800,000 Washington State Public Power Supply System* 07/02/03 1.060 800,000
1,500,000 Washington State Public Power Supply System* 07/02/03 0.920 1,500,000
--------------
TOTAL UTILITIES 8,835,853
--------------
WATER/SEWER (10.5%)
1,400,000 Boston, Massachusetts, Water & Sewer
Commission* 07/03/03 0.900 1,400,000
3,900,000 Durham, North Carolina, Water & Sewer
Revenue* 07/02/03 1.100 3,900,000
585,000 Florida State Department of Environmental
Protection 07/01/03 5.250 585,000
8,800,000 Massachusetts State Water Resources
Authority* 07/01/03 1.100 8,800,000
4,000,000 Massachusetts State Water Resources
Authority* 07/02/03 1.000 4,000,000
1,000,000 Massachusetts State Water Resources
Authority* 07/02/03 0.920 1,000,000
5,900,000 Massachusetts State Water Resources
Authority* 07/02/03 0.900 5,900,000
1,550,000 Massachusetts State Water Resources
Authority* 07/02/03 0.900 1,550,000
4,000,000 New Jersey Economic Development
Authority, Water Facilities Revenue* 07/01/03 1.100 4,000,000
2,100,000 New York, New York, City Municipal Water
Finance Authority* 07/01/03 0.900 2,100,000
1,000,000 New York, New York, City Municipal Water
Finance Authority* 07/02/03 1.050 1,000,000
11,000,000 New York, New York, City Municipal Water
Finance Authority* 07/09/03 1.010 11,000,000
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
8
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- --------- --------- --------------
MUNICIPAL BONDS (CONTINUED)
WATER/SEWER (CONTINUED)
$ 1,000,000 Pennsylvania Infrastructure Investment
Authority 09/01/03 6.000% $ 1,007,886
1,000,000 Philadelphia, Pennsylvania,
Water & Wastewater Revenue 08/01/03 6.750 1,004,725
500,000 South Bend, Indiana, Sewage Works
Revenue 12/01/03 4.500 507,130
1,000,000 Texas Water Development Board 07/15/03 5.000 1,001,262
--------------
TOTAL WATER/SEWER 48,756,003
--------------
TOTAL MUNICIPAL BONDS 369,764,209
--------------
COMMERCIAL PAPER (20.2%)
3,100,000 Baltimore County, Maryland 08/12/03 0.950 3,100,000
3,000,000 Burke County, Georgia, Development Authority 07/10/03 1.000 3,000,000
1,200,000 Burke County, Georgia, Development
Authority 07/10/03 1.000 1,200,000
2,000,000 City of Fort Worth, Texas 07/11/03 1.050 2,000,000
3,000,000 City of Fort Worth, Texas 07/15/03 1.050 3,000,000
4,845,000 City of Fort Worth, Texas 09/09/03 1.000 4,845,000
1,000,000 City of Houston, Texas 07/17/03 0.950 1,000,000
7,000,000 City of Houston, Texas 07/24/03 0.950 7,000,000
2,000,000 City of Houston, Texas 07/25/03 0.950 2,000,000
7,000,000 City of Houston, Texas 08/08/03 0.950 7,000,000
3,900,000 City of San Antonio, Texas 07/08/03 1.050 3,900,000
4,000,000 City of San Antonio, Texas 08/14/03 1.000 4,000,000
4,500,000 Howard County, Maryland 08/13/03 0.900 4,500,000
4,000,000 King County, Washington 07/15/03 1.050 4,000,000
10,000,000 Municipal Electric Authority, Georgia 07/08/03 0.950 10,000,000
3,642,000 Municipal Electric Authority, Georgia 07/09/03 1.000 3,642,000
2,000,000 Municipal Electric Authority, Georgia 07/09/03 1.000 2,000,000
8,000,000 New York, New York, City
Municipal Water Finance Authority 07/17/03 1.050 8,000,000
2,600,000 Ohio State University 08/13/03 0.800 2,600,000
9,100,000 South Carolina State 07/09/03 1.050 9,100,000
2,500,000 South Carolina State 08/13/03 1.000 2,500,000
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<Page>
<Table>
<Caption>
PRINCIPAL MATURITY INTEREST
AMOUNT DATE RATE VALUE
- -------------- ---------- --------- --------------
COMMERCIAL PAPER (CONTINUED)
$ 2,000,000 Texas A&M University Board of Regents 12/04/03 0.930% $ 2,000,000
1,400,000 Tennessee State School Bond Authority 07/11/03 1.050 1,400,000
2,000,000 Tennessee State School Bond Authority 07/16/03 1.050 2,000,000
--------------
TOTAL COMMERCIAL PAPER 93,787,000
--------------
TOTAL INVESTMENTS, AT AMORTIZED COST 99.6% $ 463,551,209
OTHER ASSETS IN EXCESS OF LIABILITIES 0.4 1,845,461
--------- --------------
NET ASSETS 100.0% $ 465,396,670
========= ==============
</Table>
* Variable rate instrument. Interest rates change on specific dates (such as
a coupon or interest payment date). The yield shown represents the June 30,
2003 coupon rate.
(a) General obligation or revenue bonds that have been fully secured or
collaterized by an escrow fund consisting of U.S. Government obligations
that can adequately meet interest and principal payments. For pre-refunded
obligations, the stated maturity represents the date of redemption which,
pursuant to the terms of the escrow agreement, has been accelerated from
the originally stated maturity date.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<Page>
BBH TAX EXEMPT MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2003
<Table>
ASSETS:
Investments, at amortized cost $ 463,551,209
Cash 1,603,972
Interest receivable 2,036,372
Prepaid expenses 14,128
--------------
TOTAL ASSETS 467,205,681
--------------
LIABILITIES:
Payables for:
Investments purchased 1,553,848
Shareholder servicing/eligible insitution fees 95,306
Investment advisory fees 57,184
Administrative fees 38,122
Professional fees 25,497
Custody fees 15,416
Dividends declared 6,524
Board of Trustees' fees 3,465
Accrued expenses and other liabilities 13,649
--------------
TOTAL LIABILITIES 1,809,011
--------------
NET ASSETS, for 465,473,132 fund shares outstanding $ 465,396,670
==============
Net Assets Consist of:
Paid-in capital $ 465,396,670
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE $ 1.00
==============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<Page>
BBH TAX EXEMPT MONEY FUND
STATEMENT OF OPERATIONS
For the year ended June 30, 2003
<Table>
NET INVESTMENT INCOME:
INCOME:
Interest $ 5,502,242
--------------
EXPENSES:
Shareholder services/eligible institution fees 1,071,342
Investment advisory fees 642,805
Administrative fees 428,537
Custody fees 130,283
Professional fees 40,661
Board of Trustees' fees 16,863
Miscellaneous expenses 92,060
--------------
TOTAL EXPENSES 2,422,551
Expense offset arrangement (4,952)
--------------
NET EXPENSES 2,417,599
--------------
NET INVESTMENT INCOME $ 3,084,643
==============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<Page>
BBH TAX EXEMPT MONEY FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2003 JUNE 30, 2002
--------------- ---------------
INCREASE IN NET ASSETS:
From Operations:
Net investment income $ 3,084,643 $ 4,290,685
Total declared as dividends to shareholders (3,072,603) (4,378,823)
--------------- ---------------
Net increase (decrease) in net assets from 12,040 (88,138)
operations --------------- ---------------
From Fund Share (Principal) Transactions at Net Asset
Value of $1.00 per share:
Fund shares sold 866,087,031 922,241,329
Fund shares issued in reinvestment of dividends 2,016,449 2,249,150
Fund shares repurchased (816,861,592) (709,657,321)
--------------- ---------------
Net increase in net assets resulting from fund share
transactions 51,241,888 214,833,158
--------------- ---------------
Total increase in net assets 51,253,928 214,745,020
NET ASSETS:
Beginning of year 414,142,742 199,397,722
--------------- ---------------
END OF YEAR $ 465,396,670 $ 414,142,742
=============== ===============
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<Page>
BBH TAX EXEMPT MONEY FUND
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
<Table>
<Caption>
FOR THE PERIOD FROM
FEBRUARY 22, 1999
FOR THE YEARS ENDED JUNE 30, (COMMENCEMENT
----------------------------------------------------------- OF OPERATIONS) TO
2003 2002 2001 2000 JUNE 30, 1999
---------- ---------- ---------- ---------- ---------------------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.01 0.01 0.03 0.03 0.01
Dividends to shareholders from net
investment income (0.01) (0.01) (0.03) (0.03) (0.01)
---------- ---------- ---------- ---------- -----------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ===========
Total return 0.72% 1.40% 3.20% 3.05% 1.03%
Ratios/Supplemental Data:
Net assets, end of period
(000's omitted) $ 465,397 $ 414,143 $ 199,398 $ 173,050 $ 14,654
Ratio of expenses to average
net assets(1) 0.56%(2) 0.53%(2) 0.65% 0.65% 0.65%(3)
Ratio of net investment income to
average net assets 0.72% 1.28% 3.17% 3.24% 2.63%(3)
</Table>
- ----------
(1) Had the expense payment agreement not been in place, the ratio of expenses
to average net assets would have been as follows:
<Table>
Expenses paid by the Fund - - 0.62% 0.62% 1.23%(3)
Expense offset arrangement - - 0.03% 0.03% 0.05%(3)
---- ---- ----
Gross expenses - - 0.65% 0.65% 1.28%(3)
</Table>
(2) The ratio of expenses to average net assets for the years ended June 30,
2003 and 2002 reflects fees reduced as a result of an expense offset
arrangement with the Fund's custodian. Had this arrangement not been in
place, this ratio would have been 0.57% and 0.55%, respectively.
(3) Annualized.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<Page>
BBH TAX EXEMPT MONEY FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. BBH Tax Exempt Money Fund
(the "Fund") is a separate, diversified series of BBH Trust (the "Trust")
which is registered under the Investment Company Act of 1940, as amended. The
Trust is an open-end management investment company organized as a
Massachusetts business trust on June 7, 1983. The Fund commenced operations
on February 22, 1999. The Declaration of Trust permits the Trustees to create
an unlimited number of series, each of which may issue a separate class of
shares. The Trustees have authorized the issuance of an unlimited number of
shares of the Fund. At June 30, 2003, there were four series of the Trust.
The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which require
management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS. The Fund values its investments at amortized
cost, which approximates market value. The amortized cost method values a
security at its cost at the time of purchase and thereafter assumes a
constant amortization to maturity of any discount or premium. The Fund's
use of amortized cost is in compliance with Rule 2a-7 of the Investment
Company Act of 1940.
B. INTEREST INCOME. Interest income consists of interest accrued and discount
earned (including both original issue and market discount) and premium
amortization on the investments of the Fund, accrued ratably to the date
of maturity.
C. FEDERAL INCOME TAXES. Each series of the Trust is treated as a separate
entity for federal income tax purposes. It is the Fund's policy to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, no federal income tax provision is required. At
June 30, 2003, the cost of investments for federal income tax purposes was
equal to the amortized cost of investments for financial statement
purposes.
D. DIVIDENDS AND DISTRIBUTIONS. Dividends from net investment income are
declared daily and paid monthly to shareholders.
E. OTHER. Investment transactions are accounted for on the trade date.
Realized gain and loss, if any, from investment transactions are
determined on the basis of identified cost.
2. TRANSACTIONS WITH AFFILIATES.
INVESTMENT ADVISORY FEES. The Trust has an investment advisory agreement with
Brown Brothers Harriman ("BBH") for which BBH receives a fee from the Fund
calculated daily and paid monthly at an annual rate equivalent to 0.15% of
the Fund's average daily net assets. BBH has established a separately
identifiable department (SID) to provide investment advice to mutual funds.
The SID is registered with the Securities and Exchange Commission under the
Investment Advisors Act of 1940. For the year ended June 30, 2003, the Fund
incurred $642,805 for advisory services.
15
<Page>
ADMINISTRATIVE FEES. The Trust has an administration agreement with Brown
Brothers Harriman Trust Company, LLC ("BBHTC") for which BBHTC receives a fee
from the Fund calculated daily and paid monthly at an annual rate equivalent
to 0.10% of the Fund's average daily net assets. BBHTC has a
subadministration services agreement with Federated Services Company ("FSC")
for which FSC receives compensation paid by BBHTC. For the year ended June
30, 2003, the Fund incurred $428,537 for administrative services.
SHAREHOLDER SERVICING/ELIGIBLE INSTITUTION AGREEMENT. The Trust has a
shareholder servicing agreement and an eligible institution agreement with
BBH for which BBH receives a fee from the Fund calculated daily and paid
monthly at an annual rate equivalent to 0.25% of the Fund's average daily net
assets. For the year ended June 30, 2003, the Fund incurred $1,071,342 for
shareholder servicing/eligible institution services.
BOARD OF TRUSTEES' FEES. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2003, the Fund incurred $16,863 for Trustees' fees.
CUSTODY FEES. The Fund has a custody agreement with BBH for which BBH
receives a fee calculated and paid monthly. For the year ended June 30, 2003,
the Fund incurred $130,283 for custody services. These fees were reduced by
$4,952 as a result of an expense offset arrangement with the Fund's
custodian.
3. INVESTMENT TRANSACTIONS. The Fund invests primarily in debt securities issued
by municipalities. The ability of the issuers of the debt securities to meet
their obligation may be affected by economic developments in a specific state
or municipality. The aggregate holdings by state ranged from 0.1% to 12.4% of
investments. At June 30, 2003, the five largest holdings by state were New
York 12.4%; Texas 11.3%; Massachusetts 7.8%; Georgia 7.7% and Washington
4.7%.
4. FEDERAL INCOME TAX STATUS. At June 30, 2003, the Fund had a net capital loss
carryover which is available to offset future capital gains to the extent
provided by regulations as follows:
<Table>
<Caption>
EXPIRATION DATE AMOUNT
--------------- --------
June 30, 2010 $ 8,959
June 30, 2011 231
--------
$ 9,190
========
</Table>
To the extent that this net capital loss carryover is used to offset future
capital gains, it is probable the gains so offset will not be distributed to
shareholders since any such distributions may be taxable to shareholders as
ordinary income.
16
<Page>
BBH TAX EXEMPT MONEY FUND
INDEPENDENT AUDITORS' REPORT
Trustees and Shareholders
BBH Tax Exempt Money Fund (a series of BBH Trust):
We have audited the accompanying statement of assets and liabilities of BBH Tax
Exempt Money Fund (a series of BBH Trust) (the "Fund"), including the portfolio
of investments, as of June 30, 2003, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
four years in the period then ended and the period from February 22, 1999
(commencement of operations) to June 30, 1999. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. Our procedures included confirmation of securities owned at June 30,
2003, by correspondence with the custodian and brokers; where replies were not
recieved from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
Tax Exempt Money Fund as of June 30, 2003, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the four years in
the period then ended and the period from February 22, 1999 (commencement of
operations) to June 30, 1999, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 15, 2003
17
<Page>
BBH TAX EXEMPT MONEY FUND
ADDITIONAL FEDERAL TAX INFORMATION
June 30, 2003 (unaudited)
The percentage of tax-exempt dividends paid by the BBH Tax Exempt Money Fund
(the "Fund") for the year ended June 30, 2003 was 99.42%.
In January 2004, the Fund will report on Form 1099 the tax status of all
distributions made during the calendar year 2003. Shareholders should use the
information on Form 1099 for their income tax returns.
18
<Page>
TRUSTEES AND OFFICERS OF BBH TAX EXEMPT MONEY FUND
(unaudited)
Information pertaining to the Trustees of the Trust and executive officers of
the Trust is set forth below. Part B to the Registration Statement of BBH Tax
Exempt Money Fund includes additional information about the Fund's Trustees and
is available upon request without charge through your financial advisor.
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------------
Trustees
Joseph V. Shields Jr. Chairman of Since Managing Director, Chairman and Chief 13 None
(aged 65) the Board and 1990 Executive Officer of Shields & Company
Shields & Company, Trustee (registered broker-dealer and member of New
140 Broadway, York Stock Exchange); Chairman of Capital
New York, NY 10005 Management Associates, Inc. (registered
investment adviser); Vice Chairman and
Trustee of New York Racing Association;
Director of Flowers Industries, Inc.
(diversified food company).
Eugene P. Beard Trustee Since Retired; Vice Chairman-Finance/Operations 13 Director of
(aged 68) 1993 and CFO (until February 2002); Special Old Westbury
The Interpublic Group Advisor (February 2002 to present), The Funds (5);
of Companies, Inc., Interpublic Group of Companies, Inc. Trustee of
372 Danbury Road Sandhill
2nd Floor Investment
Wilton, CT 06897 Fund II.
Richard Carpenter Trustee Since Retired; Director of Investments, 13 None
(aged 70) 1999 Pennsylvania Public School Employees'
10820 North La Retirement System (until December 1997).
Quinta Drive
Tucson, AZ 85737
David P. Feldman Trustee Since Retired; Chairman and CEO of AT&T Investment 13 Director of
(aged 63) 1990 Management Corporation (until May 1997); Dreyfus
3 Tall Oaks Drive Director of Jeffrey Co. (1992 to present); Mutual Funds
Warren, NJ 07059 Director of QMED (1999 to present). (59 Funds)
</Table>
19
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------------
J. Angus Ivory Trustee Since Retired; Director of Brown Brothers Harriman 13 None
(aged 71) 1999 Ltd. (subsidiary of Brown Brothers Harriman &
Greenway Farm, Co.) (until December 2001); Advisor, RAF
Tockenham, Swindon, Central Fund (1992-June 2003).
Wiltshire, SN4 7PP
England
Alan G. Lowy Trustee Since Private Investor. 13 None
(aged 64) 1993
4111 Clear Valley
Drive Encino,
CA 91436
Arthur D. Miltenberger Trustee Since Retired; Executive Vice President and Chief 13 None
(aged 64) 1992 Financial Officer of Richard K. Mellon and
503 Darlington Road Sons (until June 1998); Vice President and
Ligonier, PA 15658 Treasurer of Richard King Mellon Foundation
(until June 1998); Trustee, R.K. Mellon
Family Trusts (1981-June 2003); General
Partner, Mellon Family Investment Company IV,
V and VI (1983-2002); Director of
Aerostructures Corporation (aircraft
manufacturer) (1996-July 2003).
Officers
Charles Izard President Since President of the Trust, BBH Common Settlement N/A N/A
(aged 44) 2003 Fund, Inc., BBH Common Settlement Fund II,
140 Broadway Inc., BBH Fund, Inc. and the BBH U.S. Money
New York, NY 10005 Market Portfolio (since November 2002);
Managing Director (since January 2001),
Senior Vice President (1995-December 2000) of
Brown Brothers Harriman & Co. ("BBH & Co.")
Michael D. Martins Vice President, Since Vice President, Treasurer, Principal N/A N/A
(aged 37) Treasurer, 2002 Accounting Officer and Principal Financial
140 Broadway Principal Officer of the Trust, BBH Common Settlement
New York, NY 10005 Accounting Fund, Inc., BBH Common Settlement Fund II,
Officer and Inc., BBH Fund, Inc. and the BBH U.S. Money
Principal Market Portfolio; Vice President (since April
Financial 2002) and Assistant Vice President (December
Officer 1996-March 2002) of BBH & Co.
</Table>
20
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------------
Gail C. Jones Secretary Since Secretary of the Trust, BBH Common Settlement N/A N/A
(aged 49) 2002 Fund, Inc., BBH Common Settlement Fund II,
1001 Liberty Avenue Inc., BBH Fund, Inc. and the BBH U.S. Money
Pittsburgh, Market Portfolio (since August 2002);
PA 15222-3779 Counsel, ReedSmith, LLP (since October 2002);
Corporate Counsel January 1997 to September
2002 and Vice President January 1999 to
September 2002 of Federated Services Company.
Peter J. Germain Vice President Since Vice President of the Trust, BBH Common N/A N/A
(aged 43) 2002 Settlement Fund, Inc., BBH Common Settlement
1001 Liberty Avenue Fund II, Inc., BBH Fund, Inc. and the BBH
Pittsburgh, U.S. Money Market Portfolio (since August
PA 15222-3779 2002); Senior Vice President, Federated
Services Company (since November 1997).
Judith J. Mackin Vice President Since Vice President of the Trust, BBH Common N/A N/A
(aged 43) 2002 Settlement Fund, Inc., BBH Common Settlement
1001 Liberty Avenue Fund II, Inc., BBH Fund, Inc. and the BBH
Pittsburgh, U.S. Money Market Portfolio (since August
PA 15222-3779 2002); Vice President of Federated Services
Company (since November 1997).
Victor Siclari Assistant Since Assistant Secretary of the Trust, BBH Common N/A N/A
(aged 41) Secretary 2002 Settlement Fund, Inc., BBH Common Settlement
1001 Liberty Avenue Fund II, Inc., BBH Fund, Inc. and the BBH
Pittsburgh, U.S. Money Market Portfolio (since August
PA 15222-3779 2002); Partner, ReedSmith, LLP (since October
2002); Vice President (March 1996 to
September 2002) and Senior Corporate Counsel
(July 1998 to September 2002) of Federated
Investors, Inc.
</Table>
21
<Page>
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS/
OFFICE# PORTFOLIO IN OTHER
POSITION(S) AND FUND TRUSTEE/
NAME, HELD WITH LENGTH COMPLEX DIRECTORSHIPS
ADDRESS, TRUST/ OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN BY HELD BY
AND AGE PORTFOLIO SERVED DURING PAST 5 YEARS TRUSTEE^ TRUSTEE
- ----------------------------------------------------------------------------------------------------------------------------------
Nancy D. Osborn Assistant Since Assistant Secretary of the Trust, BBH Common N/A N/A
(aged 37) Secretary 2002 Settlement Fund, Inc., BBH Common Settlement
140 Broadway Fund II, Inc., BBH Fund, Inc. and the BBH
New York, NY 10005 U.S. Money Market Portfolio (since August
2002); Assistant Vice President (since April
2003) and Associate of BBH & Co. (April
1996-March 2003).
John C. Smith Assistant Since Assistant Treasurer of the Trust, BBH Common N/A N/A
(age 37) Treasurer 2002 Settlement Fund, Inc., BBH Common Settlement
50 Milk Street Fund II, Inc., BBH Fund, Inc. and the BBH
Boston, MA 02109 U.S. Money Market Portfolio (since August
2002); Assistant Vice President (since
September 2001), Associate (September
2000-August 2001) and Senior Analyst (June
1999-August 2000) of BBH & Co.; Manager, Fund
Administration, State Street Bank and Trust
Company (June 1997-May 1999).
Gregory Lomakin Assistant Since Assistant Treasurer of the Trust, BBH Common N/A N/A
(aged 38) Treasurer 2002 Settlement Fund, Inc., BBH Common Settlement
50 Milk Street Fund II, Inc., BBH Fund, Inc. and the BBH
Boston, MA 02109 U.S. Money Market Portfolio (since August
2002); Vice President (since April 2003),
Assistant Vice President (April 2001-March
2003), and Associate (May 1992-March 2001) of
BBH & Co.
</Table>
# Each Trustee holds office until he or she attains the age of 70 (72, in the
case of Trustees who were elected as such before January 1, 2000), or until
he or she sooner dies, resigns or is removed from office in accordance with
the provisions of the Trust's Declaration of Trust. All Officers of the
Trust hold office for one year and until their respective successors are
chosen and qualified (subject to the ability of the Trustees to remove any
officer in accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, BBH Fund, Inc., BBH Common
Settlement Fund, Inc., BBH Common Settlement Fund II, Inc. and BBH U.S.
Money Market Portfolio. The Trust, which has four series, and BBH Fund,
Inc., which has six series, are each counted as one "fund" for purposes of
this table.
22
<Page>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
TO OBTAIN INFORMATION OR MAKE SHAREHOLDER INQUIRIES:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein contained is to be
considered an offer of sale or a solicitation of an offer to buy shares of the
Fund. Such offering is made only by the prospectus, which includes details as to
offering price and other material information.
[BROWN BROTHERS HARRIMAN LOGO]
ITEM 2. CODE OF ETHICS.
(a) As of June 30, 2003 the registrant has adopted a code of ethics that
applies to the principle executive officer, principle financial officer,
and principle accounting officer.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
a) The Trust's board has designated two
members of the audit committee as financial experts.
b) The independent audit committee members
Arthur Miltenberger and David Feldman are the
designated audit committee financial experts.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time. Applicable for annual reports filed for the first
fiscal year ending after December 15, 2003.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) The Trust has a separately designated
audit committee. The members of the audit committee
are: Eugene P. Beard ,Richard Carpenter, David P. Feldman,
J. Angus Ivory, Alan G. Lowy and Arthur D. Miltenberger,
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable all series of the trust are open end
management investment companies.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form
N-CSR, the registrant's principal financial officer and principal executive
officer have concluded that those disclosure controls and procedures
provide reasonable assurance that the material information required to be
disclosed by the registrant on this report is recorded, processed,
summarized and reported within the time periods specified in the Securities
and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) 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: A copy of
the code of ethics is available and can be mailed, free of charge, to
anyone by calling (800) 575-1265.
(b) 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): Attached hereto.
[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 (17 CFR
270.30a-2(b)) and Section 1350 of Chapter 63 of Title 18 of the United
States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for the purposes of
Section 18 of the Exchange Act (15 U.S.C. 78r), 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 specifically
incorporates it by reference: Attached hereto.][The submission of Section
906 certifications has been proposed by the SEC, but has not yet been
finalized. The SEC has encouraged issuers to submit Section 906
certifications as an exhibit to Form N-CSR until the final rule has been
adopted. Please see Proposed Rule: Certification of Disclosure in Certain
Exchange Act Reports, Release No. 33-8212 (March 21, 2003)].
I, Charles O. Izard, certify that:
1. I have reviewed this report on Form N-CSR of BBH Trust on
behalf of: BBH Money Market Fund, BBH U.S. Treasury Money Fund, BBH Tax
Exempt Money Fund, and BBH Tax Free Short/Intermediate Fixed Income Fund
("registrant");
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets, and cash flows (if the financial statements are required to
include a statement of cash flows) of the registrant as of, and for,
the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in rule 30a-2(c) under the Investment Company Act of 1940) for
the registrant and have:
a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this report
(the "Evaluation Date"); and
c. presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons
performing the equivalent functions):
a. all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize, and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: August 29, 2003
/s/ Charles O. Izard
============================
Charles O. Izard
President - Principal Executive Officer
I, Michael D. Martins, certify that:
1. I have reviewed this report on Form N-CSR of BBH
Trust on behalf of: BBH Money Market Fund,
BBH U.S. Treasury Money Fund, BBH Tax Exempt
Money Fund, and BBH Tax Free Short/Intermediate
Fixed Income Fund ("registrant");
2. Based on my knowledge, this report does not contain any
untrue
statement of a material fact or omit to state
a material fact
necessary to make the statements made, in light
of the circumstances under which such statements
were made, not misleading with respect to the
period covered by this report;
3. Based on my knowledge, the financial
statements and other financial information included
in this report, fairly present in all material respects
the financial condition, results of operations,
changes in net assets, and cash flows (if the
financial statements are required to include
a statement of cash flows) of the registrant
as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer
and I are responsible for establishing and
maintaining disclosure controls and procedures
(as defined in rule 30a-2(c) under the
Investment Company Act of 1940) for
the registrant and have:
a. designed such disclosure controls
and procedures to ensure that material
information relating to the registrant,
including its consolidated subsidiaries
, is made known to us by others within
those entities, particularly during the
period in which this report is being prepared;
b. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of
a date within 90 days prior to the filing
date of this report (the "Evaluation Date");
and
c. presented in this report our conclusions
about the effectiveness of the disclosure
controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying
officer and I have disclosed, based
on our most recent evaluation, to the
registrant's auditors and the audit committee
of the registrant's board of directors
(or persons performing the equivalent
functions):
a. all significant deficiencies in the design
or operation of internal controls which
could adversely affect the registrant's
ability to record, process, summarize,
and report financial data and have
identified for the registrant's auditors
any material weaknesses in internal
controls; and
b. any fraud, whether or not material,
that involves management or other
employees who have a significant
role in the registrant's internal controls; and
6. The registrant's other certifying officer
and I have indicated in this report whether
or not there were significant changes in
internal controls or in other factors that
could significantly affect internal controls
subsequent to the date of our most recent
evaluation, including any corrective
actions with regard to significant
deficiencies and material weaknesses.
Date: August 29, 2003
/s/Michael D. Martins
===============================
Michael D. Martins
Treasurer - Principal Financial Officer
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C.ss. 1350, the undersigned
officers of BBH Trust on
behalf of: BBH Money Market Fund,
BBH U.S. Treasury Money Fund,
BBH Tax Exempt Money Fund,
and BBH Tax Free Short/Intermediate
Fixed Income Fund ("registrant"),
hereby certify, to the best of our knowledge,
that the Registrant's Report on Form
N-CSR for the period ended 6/30/03
(the "Report") fully complies with the
requirements of Section 13(a) or 15(d),
as applicable, of the Securities and
Exchange Act of 1934 and that the
information contained in the Report
fairly presents, in all material respects,
the financial condition and results
of operations of the Registrant.
Dated: August 29, 2003
/s/ Charles O. Izard
===========================
Charles O. Izard
Title: President, Principal Executive Officer
Dated: August 29, 2003
/s/ Michael D. Martins
=============================
Michael D. Martins
Title: Treasurer, Principal Financial Officer
This certification is being furnished solely pursuant
to 18 U.S.C.ss. 1350 and is not being filed
as part of the Report or as a separate
disclosure document.
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) BBH TRUST
-------------------------------------
By (Signature and Title)* /s/ Charles Izard
-----------------------------------------------------
Charles Izard, President
(Principle Executive Officer)
Date: _8/29/03___________________
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/ Michael D. Martins
------------------------------------------------------
Michael D. Martins, Treasurer
(Principal Financial Officer)
Date: _8/29/03__________________
* Print name and title of each signing officer under his or her signature.