DOCUMENT>
N-CSR
<SEQUENCE>1
<FILENAME>BBHCOMSETIINCSR.txt
BBH Common Settlement Fund II, Inc. 06-30-04 NCSR
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 811-10421
Name of Fund: BBH Common Settlement Fund II, Inc.
Fund Address: 40 Water Street
Boston, MA 02109-3661
Name and address of agent for service:
Michael D. Martins, Principal Financial Officer,
BBH Common Settlement Fund II, Inc., 40 Water Street, Boston, MA, 02109
Mailing address: 140 Broadway, New York, NY, 10005
Registrant's telephone number, including area code: (800) 625-5759
Date of fiscal year end: 06/30/04
Date of reporting period: 07/01/03 - 06/30/04
Item 1 - Attach shareholder report
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
BBH Common Settlement II Fund, Inc.:
We have audited the accompanying statement of assets and liabilities
of BBH Common Settlement II Fund, Inc. (the "Fund") as of June 30, 2004,
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 three
years in the period then ended and for the period from June 18, 2001
(commencement of operations) to June 30, 2001. 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 standards of the Public Company
Accounting Oversight Board (United States). 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 Common Settlement II Fund, Inc. as of June 30, 2004, 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 three years in the period then ended and for
the period from June 18, 2001 (commencement of operations) to June 30,
2001, in conformity with accounting principles generally accepted in
the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 13, 2004
<Page>
BBH COMMON SETTLEMENT II FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2004
<Table>
ASSETS:
Investment in BBH U.S. Money Market Portfolio
(the "Portfolio"), at value $ 466,182,895
-------------
LIABILITIES:
Payables for:
Dividends declared 413,737
Expense payment fee 14,053
-------------
Total Liabilities 427,790
-------------
NET ASSETS, for 465,755,105 fund shares outstanding $ 465,755,105
=============
Net Assets Consist of:
Paid-in capital $ 465,755,105
=============
NET ASSET VALUE AND OFFERING PRICE PER SHARE $1.00
=====
</Table>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2004
(unaudited)
<Table>
INVESTMENT INCOME:
Interest income allocated from Portfolio $ 4,637,199
Expenses allocated from Portfolio (667,825)
- -------------
Net Investment Income Allocated from Portfolio 3,969,374
-------------
EXPENSES:
Shareholder servicing fees 207,905
Administrative fees 83,162
Professional fees 26,232
Directors fees 15,529
Accounting fees 8,000
Miscellaneous fees 10,330
-------------
Total Expenses 351,158
Fees waived/reimbursed (270,525)
-------------
Net Expenses 80,633
-------------
NET INVESTMENT INCOME $ 3,888,741
=============
</Table>
The accompanying notes are an integral part of these financial statements.
<Page>
BBH COMMON SETTLEMENT II FUND
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
----------------- -------------
DECREASE IN NET ASSETS:
From Operations:
Net investment income $ 3,888,741 $ 5,239,637
Dividends declared from net investment income (3,888,741) (5,239,637)
From Fund Share (Principal) Transactions at Net Asset Value
of $1.00 per share:
Fund shares sold 1,130,769,501 1,598,042,394
Fund shares issued in reinvestment of dividends 3,469,375 5,436,831
Fund shares repurchased 1,058,665,089) (1,604,065,897)
------------- ---------------
Net decrease in net assets resulting from fund share
transactions 75,573,787 (586,672)
NET ASSETS: Beginning of year 390,181,318 390,767,990
------------- ---------------
End of period $ 465,755,105 $ 390,181,318
============= ===============
</Table>
The accompanying notes are an integral part of these financial statements.
<Page>
BBH COMMON SETTLEMENT II FUND
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA AND RATIOS FOR A SHARE
OUTSTANDING THROUGHOUT EACH PERIOD
<Table>
<Caption>
FOR THE PERIOD
FROM
JUNE 18, 2001
FOR THE FOR THE FOR THE (COMMENCEMENT
YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) TO
JUNE 30, 2004 JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2001
----------------- ----------------- ------------- ------------
- -------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.01 0.01 0.02 0.00 (1)
Dividends to shareholders from net
investment income (0.01) (0.01) (0.02) 0.00 (1)
----------------- ----------------- ------------- -------------------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
================= ================= ============= ===================
Total return 0.94% 1.39% 2.44% 0.14%
Ratios/Supplemental data (2):
Net assets, end of period (000's omitted) $465,755 $390,181 $390,768 $100
Ratio of expenses to average net assets (3) 0.18% 0.18% 0.18% 0.18% (4)
Ratio of net investment income to
average net assets (3) 0.94 1.38% 2.25% 4.44% (4)
- ----------
(1) Less than $0.01 per share.
(2) Ratios include the Fund's share of Portfolio
income, expenses paid by the Portfolio and
the expense offset arrangement, as appropriate.
(3) Had the expense payment agreement, which
commenced on June 18, 2001, not been in place, and if
no fees had been waived, the ratio of expenses to average net assets and the
ratio of net investment income would have been as
follows:
Ratio of expenses to average net assets 0.26 0.20% 0.19% 0.18% (4)
Ratio of net investment income to average net assets 0.86 1.36% 2.24% 4.44% (4)
(4) Annualized
</Table>
The accompanying notes are an integral part of these financial statements.
<Page>
BBH COMMON SETTLEMENT II FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2004
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES.
BBH Common Settlement II Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company, which was organized as a corporation under the
laws of the State of Maryland on May 10, 2001. The articles
of incorporation
permit the Fund to issue 25,000,000,000 shares of common stock,
par value $0.001
per share. The Fund commenced operations on June 18, 2001.
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 investments reflects the Fund's proportionate interest in the net
assets of the Portfolio (approximately 16% at June 30, 2004). 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. Valuation of investments by the Portfolio
is discussed in Note 1 of the Portfolio's Notes to Financial
Statements, which are included elsewhere in this report.
B. INVESTMENT 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. It is the Fund's policy to comply with the
requirements 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 Fund 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 0.03% 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, 2004, the Fund incurred $83,162 for administrative services
EXPENSE REIMBURSEMENT. The Fund has an agreement
with BBHTC for which BBHTC
agrees to waive its fees and/or make reimbursements to the Fund so that the
Fund's operating expenses (excluding interest, taxes, brokerage commissions
and extraordinary expenses of the Fund) do not exceed, in the aggregate,
0.18% of the Fund's average net assets. For the year ended June 30, 2004,
BBHTC reimbursed the Fund $62,620.
SHAREHOLDER SERVICING FEES. The Fund has a shareholder servicing agreement with
Brown Brothers Harriman ("BBH"). Effective March 1, 2004, BBH receives a
fee from
the Fund calculated daily and paid monthly at an annual rate equivalent to 0.05%
of the Fund's average daily net assets. For the year ended June 30, 2004,
shareholder servicing fees of $207,905 were waived by BBH.
BOARD OF DIRECTORS' FEES. Each Director receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2004, the Fund incurred $15,529 for Directors' 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, 2004, the Fund incurred $8,000 for accounting fees.
<Page>
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Trustees of BBH Trust and Investors of
BBH U.S. 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, 2004, 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 standards of the Public Company
Accounting Oversight Board (United States). 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,
2004, 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. Money Market Portfolio as of June 30, 2004, 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 13, 2004
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 2004 (expressed in U.S. dollars)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- -----------
BANK NOTES (6.6%)
$39,700,000 BNP Paribas .................................. 04/15/05 1.320% $39,515,680
45,000,000 Canadian Imperial Bank
of Commerce* .............................. 07/08/04 1.126 45,001,616
30,000,000 Royal Bank of Canada* ........................ 07/27/04 1.245 29,996,654
50,000,000 U.S. Bank NA ................................. 11/17/04 1.170 50,005,741
25,000,000 U.S. Bank NA ................................. 03/11/05 1.200 24,997,254
-----------
Total Bank Notes ............................. 189,516,945
-----------
CERTIFICATES OF DEPOSIT (11.3%)
30,000,000 ABN Amro Bank NV ............................. 08/27/04 1.380 30,008,399
25,000,000 ABN Amro Bank NV ............................. 10/29/04 1.370 24,999,173
25,000,000 BNP Paribas .................................. 09/22/04 1.230 25,000,000
25,000,000 Deutsche Bank AG ............................. 07/07/04 1.120 25,000,000
25,000,000 Deutsche Bank AG ............................. 12/03/04 1.510 25,000,000
25,000,000 Rabobank Nederland NV ........................ 10/29/04 1.360 25,000,000
30,000,000 Royal Bank of Scotland ....................... 09/07/04 1.120 30,001,112
40,000,000 Royal Bank ofScotland ....................... 02/23/05 1.330 39,969,371
20,000,000 Societe Generale ............................. 05/31/05 2.000 20,000,000
50,000,000 UBS AG (Stamford) ............................ 03/14/05 1.205 49,795,614
28,250,000 Washington Mutual, Inc. ...................... 12/14/04 1.820 28,250,000
-----------
Total Certificates of Deposit ................ 323,023,669
-----------
COMMERCIAL PAPER (47.3%)
50,000,000 Bank of America Corp. ........................ 08/04/04 1.090 49,948,528
50,000,000 Bear Stearns & Co., Inc. ..................... 07/06/04 1.060 49,992,639
50,000,000 Beta Financial Group, Inc. ................... 08/11/04 1.230 49,929,958
75,000,000 BMW U.S. Capital LLC ......................... 07/01/04 1.450 75,000,000
50,000,000 Citigroup Global Market
Holdings, Inc. ............................ 07/01/04 1.400 50,000,000
75,000,000 Citigroup Global Market
Holdings, Inc. ............................ 07/12/04 1.080 74,975,250
23,340,000 Citigroup Global Market
Holdings, Inc. ............................ 09/07/04 1.300 23,282,687
25,170,000 City of Chicago, Illinois .................... 08/02/04 1.210 25,142,928
50,000,000 Credit Suisse First
Boston Corp. .............................. 08/19/04 1.200 49,918,333
49,500,000 Danske Corp. ................................. 07/12/04 1.220 49,481,548
The accompanying notes are an integral part of these financial statements
FINANCIAL STATEMENT JUNE 30, 2004
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2004 (expressed in U.S. dollars)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- -----------
COMMERCIAL PAPER (continued)
$25,000,000 Danske Corp. ................................. 08/06/04 1.100% $ 24,972,500
25,000,000 General Electric Capital Corp. ............... 08/04/04 1.080 24,974,500
50,000,000 General Electric Capital Corp. ............... 08/18/04 1.200 49,920,000
50,000,000 Goldman Sachs Group, Inc. .................... 01/05/05 1.360 49,644,889
50,000,000 HBOS Treasury Services, Plc. ................. 07/15/04 1.090 49,978,806
25,000,000 HBOS Treasury Services, Plc. ................. 08/13/04 1.085 24,967,600
50,000,000 ING Funding LLC .............................. 07/15/04 1.230 49,976,083
25,000,000 ING Funding LLC .............................. 09/01/04 1.100 24,952,639
12,080,000 International Lease Finance Corp. ............ 07/08/04 1.050 12,077,533
19,006,000 International Lease Finance Corp. ............ 07/13/04 1.035 18,999,443
25,000,000 Kittyhawk Fund Corp. ......................... 07/07/04 1.060 24,995,583
50,000,000 Kittyhawk Fund Corp. ......................... 07/15/04 1.100 49,978,611
39,742,000 National Rural Utilities
Cooperative Finance Corp. ................. 07/07/04 1.060 39,734,979
30,000,000 SLM Corp. .................................... 12/01/04 1.770 29,774,325
50,000,000 Societe Generale ............................. 07/16/04 1.060 49,977,917
75,000,000 Steamboat Funding Corp. ...................... 07/07/04 1.360 74,983,000
23,335,000 Three Rivers Funding Corp. ................... 07/01/04 1.050 23,335,000
15,014,000 Three Rivers Funding Corp. ................... 07/02/04 1.050 15,013,562
67,624,000 Tulip Funding Corp. .......................... 07/14/04 1.210 67,594,452
75,000,000 UBS Finance, Ltd. ............................ 07/01/04 1.420 75,000,000
80,890,000 Wal-Mart Stores, Inc. ........................ 08/24/04 1.100 80,756,532
-------------
Total Commercial Paper ....................... 1,359,279,825
-------------
CORPORATE BOND (1.7%)
50,000,000 Abbey National Treasury
Services, Plc.* ........................... 07/19/04 1.205 49,993,705
-------------
MUNICIPAL BOND (1.2%)
35,700,000 Los Angeles, California, Water
& Power Revenue* .......................... 07/01/04 1.130% 35,700,000
--------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS (14.4%)
29,000,000 Federal Farm Credit Bank* .................... 07/07/04 1.521 29,000,000
40,000,000 Federal Farm Credit Bank* .................... 10/05/04 1.326 40,000,000
25,000,000 Federal Farm Credit Bank ..................... 10/08/04 1.250 24,914,063
The accompanying notes are an integral part of these financial statements
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2004 (expressed in U.S. dollars)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- -----------
U.S. GOVERNMENT AGENCY
OBLIGATIONS (continued)
75,000,000 Federal Home Loan Mortgage Corp.* ............ 07/01/04 1.050% $ 74,991,141
50,000,000 Federal Home Loan Mortgage Corp. ............. 09/20/04 1.240 49,860,500
94,025,000 Federal National Mortgage Assoc.* ............ 07/07/04 1.531 94,025,000
50,000,000 Federal National Mortgage Assoc. ............. 07/07/04 1.190 49,990,084
50,000,000 Federal National Mortgage Assoc. ............. 09/17/04 1.280 49,861,334
--------------
Total U.S. Government
Agency Obligations ......................... 412,642,122
--------------
TIME DEPOSITS (18.0%)
125,000,000 Banc One Corp. ............................... 07/01/04 1.460 125,000,000
65,300,000 Deutsche Bank AG ............................. 07/01/04 1.200 65,300,000
100,000,000 Dresdner Bank ................................ 07/01/04 1.430 100,000,000
100,000,000 Rabobank Group ............................... 07/01/04 1.410 100,000,000
75,000,000 Royal Bank of Canada ......................... 07/01/04 1.250 75,000,000
50,000,000 Societe Generale ............................. 07/01/04 1.375 50,000,000
--------------
Total Time Deposits .......................... 515,300,000
--------------
TOTAL INVESTMENTS AT AMORTIZED COST ............................ 100.5% $2,885,456,266
LIABILITIES IN EXCESS OF OTHER ASSETS .......................... (0.5) (14,294,758)
----- --------------
NET ASSETS ..................................................... 100.0% $2,871,161,508
===== ==============
- ----------
* Variable rate instrument. Interest rates change on specific dates (such as
a coupon or interest payment date). The yield shown represents the June
30, 2004 coupon rate.
The accompanying notes are an integral part of these financial statements
FINANCIAL STATEMENT JUNE 30, 2004
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2004 (expressed in U.S. dollars)
ASSETS:
Investments, at amortized cost ......................... $2,885,456,266
Interest receivable .................................... 2,979,319
Prepaid expenses ....................................... 79,401
--------------
Total Assets ........................................ 2,888,514,986
--------------
LIABILITIES:
Due to bank ............................................ 16,857,148
Payables for:
Investment advisory fees ............................ 244,816
Custody and accounting fees ......................... 99,000
Administrative fees ................................. 85,685
Professional fees ................................... 43,423
Board of Trustees' fees ............................. 13,702
Accrued expenses and other liabilities ................. 9,704
--------------
Total Liabilities ............................... 17,353,478
--------------
NET ASSETS ................................................ $2,871,161,508
==============
The accompanying notes are an integral part of these financial statements
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended June 30, 2004 (expressed in U.S. dollars)
NET INVESTMENT INCOME:
Income:
Interest .......................................... $ 33,971,937
------------
Expenses:
Investment advisory fees .......................... 3,051,272
Administrative fees ............................... 1,067,945
Custody and accounting fees ....................... 437,025
Board of Trustees' fees ........................... 103,795
Professional fees ................................. 53,003
Miscellaneous expenses ............................ 175,042
------------
Total Expenses ................................. 4,888,082
Fees paid indirectly ........................... (5,574)
------------
Net Expenses ................................... 4,882,508
------------
Net Investment Income .......................... $29,089,429
===========
The accompanying notes are an integral part of these financial statements
FINANCIAL STATEMENT JUNE 30, 2004
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (expressed in U.S. dollars)
For the years ended June 30,
------------------------------------
2004 2003
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income .................... $ 29,089,429 $ 46,985,348
---------------- ----------------
Capital Transactions:
Proceeds from contributions .............. 9,821,500,707 11,833,968,310
Value of withdrawals ..................... (10,401,093,623) (11,332,869,201)
---------------- ----------------
Net increase (decrease) in net assets
resulting from capital transactions (579,592,916) 501,099,109
---------------- ----------------
Total increase (decrease) in net assets (550,503,487) 548,084,457
NET ASSETS:
Beginning of year ........................... 3,421,664,995 2,873,580,538
---------------- ----------------
End of year .................................$ 2,871,161,508 $ 3,421,664,995
================ ================
The accompanying notes are an integral part of these financial statements
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (expressed in U.S. dollars)
For the years ended June 30,
------------------------------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------
Total return ....................... 0.99% 1.44% 2.47% 5.95% 5.70%
Ratios/Supplemental data:
Net assets, end of year
(000's omitted) .............. $2,871,162 $3,421,665 $2,873,581 $2,358,010 $1,602,484
Expenses as a percentage of
average net assets:
Net expenses paid by Portfolio 0.16% 0.15% 0.16% 0.15% 0.21%
Expense offset arrangement ... 0.00%(1) 0.00%(1) 0.00%(1) 0.01% --
---------- ---------- ---------- ---------- ----------
Total expenses ............ 0.16% 0.15% 0.16% 0.16% 0.21%
Ratio of net investment income to
average net assets ........... 0.95% 1.40% 2.39% 5.64% 5.60%
- ----------
1 Amount is less than 0.01%.
The accompanying notes are an integral part of these financial statements
FINANCIAL STATEMENT JUNE 30, 2004
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTSJune 30, 2004 (expressed in U.S. dollars)
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 Portfolio commenced operations on October 31,
1994. The Declaration of Trust permits the Trustees to create 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, 2004, 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 gains and losses, 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 which 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, 2004, the Portfolio incurred $3,051,272
for advisory services.
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
sub-administration services agreement with Federated Services Company
("FSC") for which FSC receives compensation paid by BBHTC. For the year
ended June 30, 2004, the Portfolio incurred $1,067,945 for administrative
services.
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
June 30, 2004 (expressed in U.S. dollars)
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, 2004, the Portfolio incurred $103,795 for the
Trustees' fees.
Custody and Accounting Fees. BBH acts as a custodian and shall be entitled
to receive a custody and accounting fee which is calculated and paid
monthly. BBH holds all cash and investments and calculates the daily net
asset value. The custody fee is a transaction based fee with an annual
minimum of $30,000, and the accounting fee is calculated at 0.05% per
annum on the first $100 million of net assets, 0.02% per annum on the next
$400 million of net assets and 0.01% per annum on all net assets over $500
million. For the year ended June 30, 2004, the Portfolio incurred $437,025
for custody and accounting services. These fees were reduced by $5,574 as
a result of an expense offset arrangement with the Portfolio's custodian.
FINANCIAL STATEMENT JUNE 30, 2004
TRUSTEES AND OFFICERS OF BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
(unaudited)
Information pertaining to the Trustees of the BBH U.S. Money Market Portfolio
(the "Portfolio") and executive officers of the Portfolio is set forth below.
Part B to the Registration Statement of the Portfolio includes additional
information about the Portfolio's Trustees and is available upon request without
charge by contacting the Fund at 1-800-625-5759.
Number of Funds/
Position(s) Held Term of Office# Principal Portfolio in Fund Other Trustee/
Name, Birth Date and with Trust/ and Length of Occupation(s) During Complex Overseen by Directorships
Address Portfolio Time Served Past 5 Years Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------
Directors
Joseph V. Shields, Chairman of the Since 1990 Managing Director, 11 None
Jr. Board and Trustee Chairman and Chief
Birth Date: Executive Officer of
March 17, 1938 Shields & Company
Shields & Company (registered
140 Broadway New broker-dealer and
York, member of New York
NY 10005 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 1993. Retired; Vice 11 Director of Old
Birth Date: Chairman-Finance/ Westbury Funds
March 17, 1935 Operations and CFO (5); Trustee of
The Interpublic Group of The Interpublic Sandhill
of Companies, Inc. 372 Group of Companies, Investment Fund
Danbury Road 2nd Inc. (until December II.
Floor Wilton, CT 1999); Special
06897 Advisor to The
Interpublic Group of
Companies, Inc.
(February 2000 to
December 2003).
Richard L. Carpenter Trustee Since 1999 Retired. 11 None
Birth Date:
March 17, 1933
10820 North La
Quinta Drive
Tucson, AZ 85737
David P. Feldman Trustee Since 1990 Director of Jeffrey 11 Director of
Birth Date: Co. (1992 to Dreyfus Mutual
November 16, 1939 present); Director of Funds (59 Funds)
3 Tall Oaks Drive QMED (1999 to
Warren, NJ 07059 present).
FINANCIAL STATEMENT JUNE 30, 2004
TRUSTEES AND OFFICERS OF BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
(unaudited)
Number of Funds/
Position(s) Held Term of Office# Principal Portfolio in Fund Other Trustee/
Name, Birth Date and with Trust/ and Length of Occupation(s) During Complex Overseen by Directorships
Address Portfolio Time Served Past 5 Years Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------
Directors
J. Angus Ivory Trustee Since 1999 Retired; Director of 11 None
Birth Date: Brown Brothers
July 31, 1932 Harriman Ltd.
Greenway Farm, (subsidiary of Brown
Tockenham, Swindon, Brothers Harriman &
Wiltshire, SN4 7PP Co.) (until December
England 2001); Advisor to RAF
Central Fund
(1992-June 2003).
Alan G. Lowy Trustee Since 1993 Private Investor. 11 None
Birth Date:
April 17, 1939
4111 Clear Valley
Drive
Encino, CA 91436
Arthur D. Trustee Since 1992 Retired; Trustee, 11 None
Miltenberger R.K. Mellon Family
Birth Date: Trusts (1981-June
November 8, 1938 2003); General
503 Darlington Road Partner, Mellon
Ligonier, PA 15658 Family Investment
Company IV, V and VI
(1983-2002); Director
of Aerostructures
Corporation (aircraft
manufacturer)
(1996-July 2003).
Officers
John A. Nielsen President, Since 2004 President of BBH N/A N/A
Birth Date: Principal Trust, BBH Prime
July 15, 1943 Executive Officer Institutional Money
140 Broadway Market Fund, Inc.,
New York, NY 10005 BBH Common Settlement
II Fund, Inc., BBH
Fund, Inc. and BBH
U.S. Money Market
Portfolio (since
January 2004); He
joined Brown Brothers
Harriman & Co. ("BBH
& Co.") in 1968 and
has been a Partner of
the firm since 1987.
TRUSTEES AND OFFICERS OF BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
(unaudited)
Number of Funds/
Position(s) Held Term of Office# Principal Portfolio in Fund Other Trustee/
Name, Birth Date and with Trust/ and Length of Occupation(s) During Complex Overseen by Directorships
Address Portfolio Time Served Past 5 Years Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------
Directors
Michael D. Martins Vice President, Since 2002 Vice President, N/A N/A
Birth Date: Treasurer, Treasurer, Principal
November 5, 1965 Principal Accounting Officer
140 Broadway Accounting and Principal
New York, NY 10005 Officer and Financial Officer of
Principal BBH Trust, BBH Prime
Financial Officer Institutional Money
Market Fund, Inc.,
BBH Common Settlement
II Fund, Inc., BBH
Fund, Inc. and 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 2002 Secretary of BBH N/A N/A
Birth Date: Trust, BBH Prime
October 26, 1953 Institutional Money
1001 Liberty Avenue Market Fund, Inc.,
Pittsburgh, PA BBH Common Settlement
15222-3779 II Fund, Inc., BBH
Fund, Inc. and BBH
U.S. Money Market
Portfolio (since
August 2002);
Counsel, ReedSmith,
LLP (since October
2002); Corporate
Counsel (January
1997-September 2002)
and Vice President
(January
1999-September 2002)
of Federated Services
Company.
Peter J. Germain Vice President Since 2002 Vice President of BBH N/A N/A
Birth Date: Trust, BBH Prime
September 3, 1959 Institutional Money
1001 Liberty Avenue Market Fund, Inc.,
Pittsburgh, PA BBH Common Settlement
15222-3779 II Fund, Inc., BBH
Fund, Inc. and BBH
U.S. Money Market
Portfolio (since
August 2002); Senior
Vice President (since
November 1997) of
Federated Services
Company.
Judith J. Mackin Vice President Since 2002 Vice President of BBH N/A N/A
Birth Date: Trust, BBH Prime
May 30, 1960 Institutional Money
1001 Liberty Avenue Market Fund, Inc.,
Pittsburgh, PA BBH Common Settlement
15222-3779 II Fund, Inc., BBH
Fund, Inc. and BBH
U.S. Money Market
Portfolio (since
August 2002); Vice
President (since
November 1997) of
Federated Services
Company.
FINANCIAL STATEMENT JUNE 30, 2004
TRUSTEES AND OFFICERS OF BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
(unaudited)
Number of Funds/
Position(s) Held Term of Office# Principal Portfolio in Fund Other Trustee/
Name, Birth Date and with Trust/ and Length of Occupation(s) During Complex Overseen by Directorships
Address Portfolio Time Served Past 5 Years Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------
Directors
Victor R. Siclari Assistant Since 2002 Assistant Secretary N/A N/A
Birth Date: November Secretary of BBH Trust, BBH
17, 1961 Prime Institutional
1001 Liberty Avenue Money Market Fund,
Pittsburgh, PA Inc., BBH Common
15222-3779 Settlement II Fund,
Inc., BBH Fund, Inc.
and BBH U.S. Money
Market Portfolio
(since August 2002);
Partner, ReedSmith,
LLP (since October
2002); Vice President
(March 1996-September
2002) and Senior
Corporate Counsel
(July 1998-September
2002) of Federated
Investors, Inc.
Nancy D. Osborn Assistant Since 2002 Assistant Secretary N/A N/A
Birth Date: Secretary of BBH Trust, BBH
May 4, 1966 Prime Institutional
140 Broadway Money Market Fund,
New York, NY 10005 Inc., BBH Common
Settlement II Fund,
Inc., BBH Fund, Inc.
and BBH U.S. Money
Market Portfolio
(since August 2002);
Assistant Vice
President (since
April 2003) and
Associate (April
1996-March 2003) of
BBH & Co.
John C. Smith Assistant Since 2002 Assistant Treasurer N/A N/A
Birth Date: Treasurer of BBH Trust, BBH
August 2, 1965 Prime Institutional
50 Milk Street Money Market Fund,
Boston, MA 02109 Inc., BBH Common
Settlement II Fund,
Inc., BBH Fund, Inc.
and 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.
FINANCIAL STATEMENT JUNE 30, 2004
TRUSTEES AND OFFICERS OF BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
(unaudited)
Number of Funds/
Position(s) Held Term of Office# Principal Portfolio in Fund Other Trustee/
Name, Birth Date and with Trust/ and Length of Occupation(s) During Complex Overseen by Directorships
Address Portfolio Time Served Past 5 Years Trustee Held by Trustee
- ------------------------------------------------------------------------------------------------------------------------------
Directors
Gregory V. Lomakin Assistant Since 2002 Assistant Treasurer N/A N/A
Birth Date: Treasurer of BBH Trust, BBH
February 23, 1965 Prime Institutional
50 Milk Street Money Market Fund,
Boston, MA 02109 Inc., BBH Common
Settlement II Fund,
Inc., BBH Fund, Inc.
and 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.
- ----------
# 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 BBH Trust, BBH Prime Institutional Money
Market Fund, Inc., BBH Common Settlement II Fund, Inc., BBH Fund, Inc. and
BBH U.S. Money Market Portfolio. BBH Trust has four series, and BBH Fund,
Inc. has four series.
ITEM 2. CODE OF ETHICS.
(a) As of June 30, 2004 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 Fund'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.
a) Disclosure of the aggregate fees billed for each of the last
two fiscal years for professional services rendered for the audit
of the annual financial statements or services that are normally
provided with statutory and regulatory filings or engagements
for those fiscal years.
Audit Fee Total Billed
June 30, 2004 $ 8,000 $ 8,000
June 30, 2003 9,150 9,150
Total $ 17,150 $ 17,150
b) Disclosure of other fees assurance and related services
fees billed in the last two fiscal years that are reasonably
related to the performance of the audit and are not reported in (a).
NONE
c) Disclosure of fees billed in the last two fiscal years for
tax advice, tax compliance and tax planning.
Tax Compliance Total Billed
June 30, 2004 $ 3,000 $ 3,000
June 30, 2003 3,000 3,000
Total $ 6,000 $ 6,000
d) Disclosure of all other fees billed in the last two fiscal years.
NONE
e) 1.) AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
Audit services provided by the Funds' auditors (the "Auditors") on
behalf of the Funds shall be pre-approved of the entire audit committee.
Non-audit services provided by the Auditors on behalf of the Funds
shall be pre-approved by the Audit Committee, except that such services
may be pre-approved solely by the chairman of the Audit Committee if the
fee for such services does not exceed $5,000 per Fund.
Non-audit services performed by the Auditors on behalf of BBH&Co. and
that requires pre-approval shall be pre-approved by the Audit Committee,
except that such services may be pre-approved solely by the chairman of
the Audit Committee if the fees for such services do not exceed $15,000.
f) If greater than 50 percent, disclosure of the percentage of hours expended
on principal accountant's engagement to audit the registrants financial
statements for the most recent fiscal year that were attributed to work
performed by persons other than the principle accountants' full-time,
permanent employees.
NONE
g) Disclosure of non-audit fees billed by the registrant's accountant
to the registrant and rendered to the registrant's investment
adviser, and any entity controlling, controlled by, or under
common control, with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant.
AIMR Work $ 95,000
Aetna Claims Review 59,991
Sarbanes-Oxley Review 16,000
Miscellaneous 9,700
h) Disclosure of whether the registrant's audit committee of the board
of directors has considered whether the provision of the non-audit services
that were rendered to the registrant's investment adviser and any entity
controlling, controlled by, or under common control, with the adviser that
provides ongoing services to the registrant that were not approved pursuant
to (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining
the principle accountant's independence.
The audit committee of the board of directors has considered whether
the provision of the non-audit services that were rendered to the
registrant's investment adviser and any entity controlling, controlled
by, or under common control, with the adviser that provides ongoing
services to the registrant that were not approved pursuant to
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principle accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) The Fund 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 at this time.
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, John A. Nielsen, certify that:
1. I have reviewed this report on Form N-CSR of BBH Common Settlement
Fund II, Inc. ("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: September 7, 2004
_______________________________________
John A. Nielsen
President - Principal Executive Officer
I, Michael D. Martins, certify that:
1. I have reviewed this report on Form N-CSR of BBH Common Settlement
Fund II, Inc. ("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: September 7, 2004
_______________________________________
Michael D. Martins
Treasurer - Principal Financial Officer
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C.ss. 1350, the undersigned officers of
BBH Common Settlement Fund II, Inc. ("registrant"), hereby certify,
to the best of our knowledge, that the Registrant's Report on
Form N-CSR for the period ended 12/31/03 (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: September 7, 2004
____________________________________________
John A. Nielsen
Title: President, Principal Executive Officer
Dated: September 7, 2004
____________________________________________
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 Common Settlement Fund II, Inc.
-------------------------------------
By (Signature and Title)* -----------------------------------------------------
John A. Nielsen, President
(Principle Executive Officer)
Date: September 7, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)*
------------------------------------------------------
Michael D. Martins, Treasurer
(Principal Financial Officer)
Date: September 7, 2004
* Print name and title of each signing officer under his or her signature.
BBH Common Settlement II Fund June 30, 2004 NCSR
Comset II June 30, NCSR page 36