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N-CSR
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<FILENAME>BBHTRUSTNCSRDEC04.txt
BBH TRUST 12-31-04 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 811-03779
Name of Fund: BBH TRUST
BBH Money Market Fund
BBH U.S. Treasury Money Fund
BBH Tax Fee Short/Intermediate Fixed Income Fund
BBH Tax Exempt Money Fund
Fund Address: 40 Water Street
Boston, MA 02109-3661
Name and address of agent for service:
Nancy D. Osborn, Principal Financial Officer,
BBH Trust, 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: 06/30/05
Date of reporting period: 07/01/04 - 12/31/04
ITEM 1 - Attach shareholder report
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2004
BBH MONEY MARKET FUND
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004 (unaudited)
ASSETS:
Investment in BBH U.S. Money Market Portfolio
(the "Portfolio"), at value ............................ $1,365,679,760
--------------
Total Assets ......................................... 1,365,679,760
--------------
LIABILITIES:
Payables for:
Shareholder servicing fees ............................. 283,511
Administrative fees .................................... 107,734
Dividends declared ..................................... 198,363
Professional fees ...................................... 26,832
Board of Trustees' fees ................................ 5,137
Accounting fees ........................................ 667
Accrued expenses and other liabilities ................... 101,210
--------------
Total Liabilities .................................... 723,454
--------------
NET ASSETS, for 1,364,956,306 fund shares outstanding ....... $1,364,956,306
==============
Net Assets Consist of:
Paid-in capital .......................................... $1,364,956,306
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE ................ $1.00
==============
The accompanying notes are an integral part of these financial statements.
2
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2004 (unaudited)
INVESTMENT INCOME:
Interest income allocated from Portfolio ................. $ 11,875,435
Expenses allocated from Portfolio ........................ (1,105,932)
------------
Net Investment Income Allocated from Portfolio ......... 10,769,503
------------
Expenses:
Shareholder servicing fees ............................... 1,714,914
Administrative fees ...................................... 651,667
Board of Trustees' fees .................................. 34,157
Accounting fees .......................................... 4,000
Professional fees ........................................ 1,346
Miscellaneous expenses ................................... 95,846
------------
Total Expenses ......................................... 2,501,930
------------
Net Investment Income ....................................... $ 8,267,573
============
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 3
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
December 31, 2004 year ended
(unaudited) June 30, 2004
----------------- ---------------
DECREASE IN NET ASSETS:
From Operations:
Net investment income ....................... $ 8,267,573 $ 8,528,585
Dividends declared from net investment income . (8,267,573) (8,528,585)
--------------- ---------------
From Fund Share (Principal) Transactions at Net
Asset Value of $1.00 per share:
Fund shares sold .......................... 2,052,309,620 5,144,651,486
Fund shares issued in reinvestment
of dividends ............................ 3,979,765 4,156,598
Fund shares repurchased ................... (2,066,134,715) (5,232,593,269)
--------------- ---------------
Net decrease in net assets
resulting from fund share transactions ...... (9,845,330) (83,785,185)
NET ASSETS:
Beginning of year ............................. 1,374,801,636 1,458,586,821
--------------- ---------------
End of period ................................. $ 1,364,956,306 $ 1,374,801,636
=============== ===============
The accompanying notes are an integral part of these financial statements.
4
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
For the six
months ended
December 31, For the years ended June 30,
2004 ------------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ---------- ----------
Net asset value,
beginning of year ....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment
income ................ 0.01 0.01 0.01 0.02 0.05 0.05
Dividends to shareholders
from net investment
income .................. (0.01) (0.01) (0.01) (0.02) (0.05) (0.05)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value,
end of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ==========
Total return ............... 0.60% 0.59% 1.06% 2.10% 5.57% 5.36%
Ratios/Supplemental data(1):
Net assets, end of period
(000's omitted) ....... $1,364,956 $1,374,802 $1,458,587 $1,381,937 $1,449,742 $1,421,982
Ratio of expenses to
average net assets .... 0.52%(2) 0.52% 0.52% 0.51% 0.52% 0.53%
Ratio of net investment
income to average
net assets ............ 1.19%(2) 0.59% 1.05% 2.08% 5.43% 5.29%
- ----------
(1) Ratios include the Fund's share of Portfolio income, expenses paid by the
Portfolio and the expense offset arrangement, as appropriate.
(2) Annualized.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 5
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2004 (UNAUDITED)
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 with a par value of $0.01 per
share. At December 31, 2004, 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 45% at December 31, 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. 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
sub-administration services agreement with Federated Services Company
("FSC") for which FSC receives compensation paid by BBHTC. For the six
months ended December 31, 2004, the Fund incurred $651,667 for
administrative services.
6
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 2004 (UNAUDITED)
Shareholder Servicing Fees. The Trust has a shareholder servicing
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 six
months ended December 31, 2004, the Fund incurred $1,714,914 for
shareholder servicing 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
six months ended December 31, 2004, the Fund incurred $34,157 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 six months ended
December 31, 2004, the Fund incurred $4,000 for accounting services.
FINANCIAL STATEMENT DECEMBER 31, 2004 7
BBH MONEY MARKET FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
December 31, 2004 (unaudited)
EXAMPLE
As a shareholder of BBH Money Market Fund (the "Fund"), you may incur two types
of costs: (1) transaction costs on purchase payments, reinvested dividends, or
other distributions; and exchange fees; and (2) ongoing costs, including
management fees; and other Fund expenses. This Example is intended to help you
understand your ongoing costs (in dollars) of investing in the Fund and to
compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004 to December 31, 2004).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2004
July 1, 2004 December 31, 2004 to December 31, 2004(1)
------------- ----------------- -----------------------
Actual ............. $1,000 $1,006 3
Hypothetical(2) .... $1,000 $1,023 3
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.52%,
multiplied by the average account value over the period, multiplied by
184/365 (to reflect the one-half year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio is subtracted from
the assumed return before expenses.
8
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2004 (unaudited)
(expressed in U.S. dollars)
BREAKDOWN BY SECURITY TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
BANK NOTES ..................................... $ 99,626,114 3.2%
CERTIFICATES OF DEPOSIT ........................ 334,936,136 10.9
COMMERCIAL PAPER ............................... 1,339,734,971 43.7
CORPORATE BONDS ................................ 121,825,409 4.0
FOREIGN BOND ................................... 20,428,169 0.7
MUNICIPAL BOND ................................. 35,700,000 1.1
U.S. GOVERNMENT AGENCY OBLIGATIONS ............. 607,581,560 19.8
TIME DEPOSITS .................................. 502,300,000 16.4
OTHER ASSETS IN EXCESS OF LIABILITIES .......... 4,804,157 0.2
-------------- -----
NET ASSETS ..................................... $3,066,936,516 100.0%
============== =====
All data as of December 31, 2004. The Fund's breakdown by security type is
expressed as a percentage of net assets and may vary over time.
FINANCIAL STATEMENT DECEMBER 31, 2004 9
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
December 31, 2004 (unaudited)
(expressed in U.S. dollars)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- ------------
BANK NOTES (3.2%)
$ 39,700,000 BNP Paribas ..................... 04/15/05 1.320% $ 39,633,440
35,000,000 SouthTrust Bank NA(1) ........... 03/14/05 2.430 34,993,424
25,000,000 U.S. Bank NA .................... 03/11/05 1.200 24,999,250
--------------
Total Bank Notes ................ 99,626,114
--------------
CERTIFICATES OF DEPOSIT (10.9%)
50,000,000 Bank of Montreal ................ 01/31/05 2.330 50,000,000
50,000,000 Barclays Bank, Plc .............. 02/04/05 2.280 50,000,470
25,000,000 BNP Paribas ..................... 02/02/05 2.270 25,000,000
40,000,000 Royal Bank of Scotland .......... 02/23/05 1.330 39,993,150
20,000,000 Societe Generale ................ 05/31/05 2.000 20,000,000
50,000,000 UBS AG (Stamford) ............... 03/14/05 1.205 49,942,516
50,000,000 Washington Mutual, Inc. ......... 01/31/05 2.350 50,000,000
50,000,000 Wells Fargo Bank NA ............. 01/24/05 2.020 50,000,000
--------------
Total Certificates of Deposit ... 334,936,136
--------------
COMMERCIAL PAPER (43.7%)
50,000,000 Bank of America Corp. ........... 01/28/05 2.260 49,915,250
25,000,000 Bank of America Corp. ........... 02/01/05 2.000 24,956,945
50,000,000 Bear Stearns & Co., Inc. ........ 01/18/05 2.060 49,951,361
47,500,000 Beta Financial Group, Inc. ...... 01/14/05 1.880 47,467,753
75,000,000 BMW U.S. Capital LLC ............ 01/03/05 2.200 74,990,833
25,000,000 CC (USA), Inc. .................. 01/25/05 2.020 24,966,333
25,000,000 CC (USA), Inc. .................. 02/22/05 2.290 24,917,306
25,000,000 CIT Group Holdings, Inc. ........ 02/28/05 2.100 24,915,416
25,000,000 CIT Group Holdings, Inc. ........ 03/01/05 2.120 24,913,139
50,290,000 City of Chicago, Illinois ....... 01/10/05 2.174 50,262,664
43,550,000 Columbia University ............. 02/04/05 2.310 43,454,988
25,000,000 Credit Suisse First Boston Corp. 02/04/05 2.030 24,952,069
25,000,000 Credit Suisse First Boston Corp. 02/10/05 2.210 24,938,611
50,000,000 Danske Corp. .................... 02/14/05 2.050 49,874,722
50,000,000 Deutsche Bank AG ................ 01/31/05 2.320 49,903,333
15,000,000 Eli Lilly and Co. ............... 01/19/05 2.010 14,984,925
25,000,000 Eli Lilly and Co. ............... 02/01/05 2.260 24,951,347
25,000,000 General Electric Capital Corp. .. 02/17/05 2.260 24,926,236
The accompanying notes are an integral part of these financial statements.
10
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
(expressed in U.S. dollars)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- ------------
COMMERCIAL PAPER (continued)
$ 25,000,000 General Electric Capital Corp. .. 08/05/05 2.650% $ 24,602,500
50,000,000 Goldman Sachs Group, Inc. ....... 01/05/05 1.360 49,992,445
50,000,000 ING Funding LLC ................. 02/03/05 2.020 49,907,417
25,000,000 ING Funding LLC ................. 02/10/05 2.200 24,938,889
25,000,000 International Lease Finance Corp. 01/24/05 2.020 24,967,736
25,000,000 International Lease Finance Corp. 02/07/05 2.290 24,941,160
25,000,000 International Lease Finance Corp. 02/14/05 2.220 24,932,167
50,000,000 Kittyhawk Funding Corp. ......... 01/10/05 2.330 49,970,875
25,000,000 Lloyds TSB Group, Plc ........... 03/17/05 1.960 24,897,917
50,000,000 Morgan Stanley .................. 01/24/05 2.230 49,928,764
25,000,000 National Rural Utilities
Cooperative Finance Corp. ..... 01/18/05 2.320 24,972,611
25,000,000 National Rural Utilities
Cooperative Finance Corp. ..... 01/21/05 2.320 24,967,778
30,000,000 Network Rail, Ltd. .............. 01/06/05 1.780 29,992,583
25,000,000 Oesterreichische Nationalbank ... 02/18/05 2.080 24,930,667
11,000,000 Regents of the University
of California ................. 01/06/05 2.000 10,996,944
25,000,000 SBC Communications, Inc. ........ 02/04/05 2.340 24,944,750
24,280,000 Three Rivers Funding Corp. ...... 01/03/05 2.240 24,276,979
20,372,000 Three Rivers Funding Corp. ...... 01/18/05 2.330 20,349,585
75,000,000 UBS Finance, Ltd. ............... 01/03/05 2.180 74,990,917
50,000,000 Variable Funding Capital Corp. .. 01/03/05 2.200 49,993,889
25,000,000 Variable Funding Capital Corp. .. 01/04/05 2.320 24,995,167
--------------
Total Commercial Paper .......... 1,339,734,971
--------------
CORPORATE BONDS (4.0%)
11,645,000 Bank One Corp. .................. 08/01/05 7.625 11,970,051
42,750,000 Citigroup, Inc.(1) .............. 02/07/05 2.280 42,753,955
17,679,000 Citigroup, Inc. ................. 12/01/05 6.750 18,280,214
10,845,000 First Union Corp. ............... 08/18/05 7.550 11,165,580
22,400,000 Norwest Corp. ................... 12/01/05 6.200 23,068,816
14,600,000 SLM Corp. ....................... 12/01/05 2.750 14,586,793
--------------
Total Corporate Bonds ........... 121,825,409
--------------
FOREIGN BOND (0.7%)
20,368,000 Providence of Quebec, Canada .... 01/19/05 8.625 20,428,169
--------------
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 11
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
(expressed in U.S. dollars)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- -----
MUNICIPAL BOND (1.1%)
$ 35,700,000 Los Angeles, California,
Water & Power Revenue(1) ...... 01/06/05 2.430% $ 35,700,000
---------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (19.8%)
29,000,000 Federal Farm Credit Bank(1) ..... 01/04/05 2.409 29,000,000
40,000,000 Federal Farm Credit Bank(1) ..... 01/05/05 2.259 40,000,000
50,000,000 Federal Home Loan Bank(1) ....... 01/25/05 2.338 49,998,282
75,000,000 Federal Home Loan Bank(1) ....... 03/21/05 2.450 74,993,419
75,000,000 Federal Home Loan
Mortgage Corp.(1) ............. 01/01/05 2.220 74,998,721
50,000,000 Federal Home Loan
Mortgage Corp. ................ 01/24/05 1.930 49,938,348
42,206,000 Federal Home Loan
Mortgage Corp. ................ 03/01/05 2.000 42,067,658
94,025,000 Federal National
Mortgage Assoc.(1) ............ 01/04/05 2.419 94,025,000
100,000,000 Federal National
Mortgage Assoc ................ 01/05/05 1.975 99,978,057
25,000,000 Federal National
Mortgage Assoc ................ 07/15/05 7.000 25,641,263
27,700,000 Federal National
Mortgage Assoc ................ 12/09/05 2.885 26,940,812
---------------
Total U.S. Government
Agency Obligations ............ 607,581,560
---------------
TIME DEPOSITS (16.4%)
75,000,000 Bank of Montreal ................ 01/03/05 1.375 75,000,000
25,000,000 Bank of Montreal ................ 01/03/05 1.000 25,000,000
75,000,000 BNP Paribas ..................... 01/03/05 1.250 75,000,000
75,000,000 Deutsche Bank AG ................ 01/03/05 2.250 75,000,000
27,300,000 Dresdner Bank ................... 01/03/05 0.500 27,300,000
50,000,000 ING Bank ........................ 01/03/05 2.280 50,000,000
125,000,000 Royal Bank of Canada ............ 01/03/05 2.250 125,000,000
50,000,000 Societe Generale ................ 01/03/05 2.125 50,000,000
---------------
Total Time Deposits ............. 502,300,000
---------------
TOTAL INVESTMENTS, AT AMORTIZED COST.......... 99.8% $3,062,132,359
OTHER ASSETS IN EXCESS OF LIABILITIES......... 0.2 4,804,157
----- --------------
NET ASSETS.................................... 100.0% $3,066,936,516
===== ==============
- ----------
(1) Variable rate instrument. Interest rates change on specific dates (such as
a coupon or interest rate payment date). The yield shown represents the
December 31, 2004 coupon rate.
The accompanying notes are an integral part of these financial statements.
12
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004 (unaudited)
(expressed in U.S. dollars)
ASSETS:
Investments, at amortized cost ....................... $3,062,132,359
Interest receivable .................................. 6,095,020
Prepaid expenses ..................................... 38,543
--------------
Total Assets ....................................... 3,068,265,922
--------------
LIABILITIES:
Due to bank ............................................ 895,225
Payables for:
Investment advisory fees ............................. 261,591
Administrative fees .................................. 91,557
Custody and accounting fees .......................... 40,000
Board of Trustees' fees .............................. 26,431
Accrued expenses and other liabilities ................. 14,602
Total Liabilities .................................. 1,329,406
--------------
NET ASSETS ............................................... $3,066,936,516
==============
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 13
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2004 (unaudited)
(expressed in U.S. dollars)
NET INVESTMENT INCOME:
Income:
Interest ........................................... $ 26,512,078
------------
Expenses:
Investment advisory fees ........................... 1,544,903
Administrative fees ................................ 540,716
Custody and accounting fees ........................ 263,851
Board of Trustees' fees ............................ 91,403
Miscellaneous expenses ............................. 39,936
------------
Total Expenses ................................... 2,480,809
Fees paid indirectly ............................. (19,627)
------------
Net Expenses ..................................... 2,461,182
------------
Net Investment Income ................................ $ 24,050,896
============
The accompanying notes are an integral part of these financial statements.
14
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (expressed in U.S. dollars)
For the six
months ended For the
December 31, 2004 year ended
(unaudited) June 30, 2004
----------------- - -------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ................. $ 24,050,896 $ 29,089,429
Capital Transactions:
Proceeds from contributions ........... 4,026,813,740 9,821,500,707
Value of withdrawals .................. (3,855,089,628) (10,401,093,623)
---------------- ----------------
Net increase (decrease) in net assets
resulting from capital
transactions ...................... 171,724,112 (579,592,916)
---------------- ----------------
Total increase (decrease) in
net assets ........................ 195,775,008 (550,503,487)
NET ASSETS:
Beginning of year ....................... 2,871,161,508 3,421,664,995
---------------- ----------------
End of period ........................... $ 3,066,936,516 $ 2,871,161,508
================ ================
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 15
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (expressed in U.S. dollars)
For the six
months ended
December 31, For the years ended June 30,
2004 ---------------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ---------- ----------
Total return .............. 0.81% 0.99% 1.44% 2.47% 5.95% 5.70%
Ratios/Supplemental data:
Net assets, end
of period
(000's omitted) ...... $3,066,937 $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%(1) 0.16% 0.15% 0.16% 0.15% 0.21%
Expense offset
arrangement ........ 0.00%(1)(2) 0.00%(2) 0.00%(2) 0.00%(2) 0.01% --
---------- ---------- ---------- ---------- ---------- ----------
Total expenses ..... 0.16%(1) 0.16% 0.15% 0.16% 0.16% 0.21%
Ratio of net investment
income to average net
assets ............... 1.56% 0.95% 1.40% 2.39% 5.64% 5.60%
- ----------
(1) Annualized.
(2) Amount is less than 0.01%.
The accompanying notes are an integral part of these financial statements.
16
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 (unaudited)
(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 December 31, 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 six months ended December 31, 2004, the Portfolio incurred
$1,544,903 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 six
months ended December 31, 2004, the Portfolio incurred $540,716 for
administrative services.
FINANCIAL STATEMENT DECEMBER 31, 2004 17
BBH U.S. MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2004 (unaudited)
(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 six months ended December 31, 2004, the Portfolio incurred $91,403
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 six months ended December 31, 2004, the Portfolio
incurred $263,851 for custody and accounting services. These fees were
reduced by $19,627 as a result of an expense offset arrangement with the
Portfolio's custodian.
Due to Bank. The Portfolio was overdrawn $895,225 on December 31, 2004.
Under the custody agreement with BBH, BBH will make overnight loans to the
Portfolio to cover overdrafts.
18
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
On the internet: www.bbhfunds.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.
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2004
BBH U.S. TREASURY MONEY FUND
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2004 (unaudited)
BREAKDOWN BY SECURITY TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
U.S. TREASURY BILLS............................... $158,106,567 91.1%
U.S. TREASURY NOTES............................... 15,193,637 8.8
OTHER ASSETS IN EXCESS OF LIABILITIES............. 206,888 0.1
------------ -----
NET ASSETS........................................ $173,507,092 100.0%
============ =====
All data as of December 31, 2004. The Fund's breakdown by security type is
expressed as a percentage of net assets and may vary over time.
The accompanying notes are an integral part of these financial statements.
2
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
December 31, 2004 (unaudited)
Principal
Amount Value
- ---------- ------------
U.S. TREASURY BILLS(a) (91.1%)
$30,000,000 due 01/06/05, 1.425%............................... $ 29,997,083
25,000,000 due 01/13/05, 1.790%............................... 24,987,083
36,450,000 due 01/20/05, 1.889%............................... 36,414,416
20,200,000 due 02/10/05, 1.983%............................... 20,156,339
10,000,000 due 02/17/05, 2.115%............................... 9,972,864
10,000,000 due 02/24/05, 2.174%............................... 9,967,945
26,800,000 due 04/21/05, 2.384%............................... 26,610,837
------------
Total U.S. Treasury Bills.......................... 158,106,567
------------
U.S. TREASURY NOTES (8.8%)
10,000,000 due 01/31/05, 1.625%............................... 9,996,995
5,200,000 due 04/30/05, 1.625%............................... 5,196,642
------------
Total U.S. Treasury Notes.......................... 15,193,637
------------
TOTAL INVESTMENTS, AT AMORTIZED COST.................... 99.9% $173,300,204
OTHER ASSETS IN EXCESS OF LIABILITIES................... 0.1 206,888
----- ------------
NET ASSETS.............................................. 100.0% $173,507,092
===== ============
- ----------
(a) Rates shown are yields to maturity at time of purchase.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 3
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004 (unaudited)
ASSETS:
Investments, at amortized cost............................... $173,300,204
Cash......................................................... 7,860
Interest receivable.......................................... 304,463
Prepaid expenses............................................. 3,891
------------
Total Assets............................................... 173,616,418
------------
LIABILITIES:
Payables for:
Shareholder servicing fees................................. 24,601
Professional fees.......................................... 21,492
Investment advisory fees................................... 16,401
Administrative fees........................................ 11,600
Dividends declared......................................... 5,750
Custody and accounting fees................................ 4,924
Board of Trustees' fees.................................... 2,143
Accrued expenses and other liabilities....................... 22,415
------------
Total Liabilities........................................ 109,326
------------
NET ASSETS, for 173,504,977 fund shares outstanding............. $173,507,092
============
Net Assets Consist of:
Paid-in capital.............................................. $173,507,092
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE.................... $1.00
=====
The accompanying notes are an integral part of these financial statements.
4
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2004 (unaudited)
NET INVESTMENT INCOME:
Income:
Interest..................................................... $794,760
--------
Expenses:
Shareholder servicing fees................................... 121,349
Investment advisory fees..................................... 80,899
Administrative fees.......................................... 53,933
Custody and accounting fees.................................. 18,531
Professional fees............................................ 13,725
Board of Trustees' fees...................................... 4,388
Miscellaneous expenses....................................... 30,531
--------
Total Expenses............................................. 323,356
Expense offset arrangement................................. (489)
--------
Net Expenses............................................... 322,867
--------
Net Investment Income.......................................... $471,893
========
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 5
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
December 31, 2004 year ended
(Unaudited) June 30, 2004
----------------- --------------
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ................................... $ 471,893 $ 542,429
Dividends declared from net investment income ............. (472,189) (540,449)
------------- -------------
Net increase (decrease) in net assets from operations ... (296) 1,980
------------- -------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold ...................................... 237,044,817 666,067,396
Fund shares issued in reinvestment of dividends ....... 214,639 249,036
Fund shares repurchased ............................... (180,923,894) (686,032,869)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions ...................... 56,335,562 (19,716,437)
------------- -------------
Total increase (decrease) in net assets ............. 56,335,266 (19,714,457)
NET ASSETS:
Beginning of year ......................................... 117,171,826 136,886,283
------------- -------------
End of period ............................................. $ 173,507,092 $ 117,171,826
============= =============
The accompanying notes are an integral part of these financial statements.
6
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
For the six
months ended
December 31, For the years ended June 30,
2004 ----------------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
------------ -------- -------- -------- -------- --------
Net asset value, beginning
of year...................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income........ 0.00(1) 0.00(1) 0.01 0.02 0.05 0.05
Dividends to shareholders from
net investment income........ (0.00)(1) (0.00)(1) (0.01) (0.02) (0.05) (0.05)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======== ======== ======== ======== ======== ========
Total return............. ...... 0.45% 0.40% 0.91% 1.95% 5.20% 4.75%
Ratios/Supplemental data:
Net assets, end of period
(000's omitted)........... $173,507 $117,172 $136,886 $188,010 $186,039 $134,425
Ratio of expenses to average
net assets................. 0.60%(2,3) 0.59%(2) 0.57%(2) 0.56%(2) 0.55% 0.57%
Ratio of net investment
income to average net
assets..................... 0.87%(3) 0.39% 0.92% 1.91% 5.00% 4.68%
- ----------
(1) Less than $0.01 per share.
(2) The ratio of expenses to average net assets for the six months ended
December 31, 2004 and for the years ended June 30, 2004, 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 0.60%, 0.59%, 0.57% and 0.56%, respectively.
(3) Annualized.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 7
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 (unaudited)
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 with a par value of $0.01 per
share. At December 31, 2004, 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 December 31, 2004, 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 gains and losses, 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 six months
ended December 31, 2004, the Fund incurred $80,899 for advisory services.
8
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2004 (unaudited)
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
sub-administration services agreement with Federated Services Company
("FSC") for which FSC receives compensation paid by BBHTC. For the six
months ended December 31, 2004, the Fund incurred $53,933 for
administrative services.
Shareholder Servicing Fees. The Trust has a shareholder servicing
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 six months ended December 31,
2004, the Fund incurred $121,349 for shareholder servicing 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
six months ended December 31, 2004, the Fund incurred $4,388 for 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 six months ended December 31, 2004, the Fund incurred
$18,531 for custody and accounting services. These fees were reduced by
$489 as a result of an expense offset arrangement with the Fund's
custodian.
FINANCIAL STATEMENT DECEMBER 31, 2004 9
BBH U.S. TREASURY MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
December 31, 2004 (unaudited)
EXAMPLE
As a shareholder of BBH U.S. Treasury Money Fund (the "Fund"), you may incur two
types of costs: (1) transaction costs on purchase payments, reinvested
dividends, or other distributions; and exchange fees; and (2) ongoing costs,
including management fees; and other Fund expenses. This Example is intended to
help you understand your ongoing costs (in dollars) of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004 to December 31, 2004).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such redemption
fees or exchange fees. Therefore, the second line of the table is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds. In addition, if these transactional costs were
included, your costs would have been higher.
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2004 to
July 1, 2004 December 31, 2004 December 31, 2004(1)
------------- ----------------- --------------------
Actual............. $1,000 $1,005 3
Hypothetical(2).... $1,000 $1,022 3
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.60%,
multiplied by the average account value over the period, multiplied by
184/365 (to reflect the one-half year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio is subtracted from
the assumed return before expenses.
10
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
On the internet: www.bbhfunds.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.
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2004
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2004 (unaudited)
BREAKDOWN BY BOND TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
CERTIFICATE OF PARTICIPATION ................... $ 1,106,290 0.8%
EDUCATION ...................................... 11,915,531 8.5
ESCROWED TO MATURITY ........................... 3,652,720 2.6
GENERAL OBLIGATIONS ............................ 59,980,531 42.6
HEALTH CARE .................................... 2,974,179 2.1
HOUSING ........................................ 2,088,760 1.5
INDUSTRIAL ..................................... 2,054,283 1.5
MISCELLANEOUS .................................. 5,241,630 3.7
PRE-REFUNDED ................................... 5,207,130 3.7
SALES TAX ...................................... 4,277,972 3.0
TRANSPORTATION ................................. 13,977,380 9.9
UTILITIES ...................................... 10,443,119 7.4
WATER/SEWER .................................... 17,080,999 12.1
OTHER ASSETS IN EXCESS OF LIABILITIES .......... 868,352 0.6
------------ -----
NET ASSETS ..................................... $140,868,876 100.0%
============ =====
TOP FIVE HOLDINGS BY STATE
Percent of
U.S. $ Value Net Assets
------------ ----------
TEXAS ............................................ $ 33,515,601 23.8%
FLORIDA .......................................... 10,001,206 7.1
NEW YORK ......................................... 8,895,482 6.3
ILLINOIS ......................................... 6,042,095 4.3
VIRGINIA ......................................... 5,622,603 4.0
OTHER STATES ..................................... 75,923,537 53.9
OTHER ASSETS IN EXCESS OF LIABILITIES ............ 868,352 0.6
------------ -----
NET ASSETS ....................................... $140,868,876 100.0%
============ =====
All data as of December 31, 2004. The Fund's breakdown by bond type and top five
holdings by state are expressed as a percentage of net assets and may vary over
time.
The accompanying notes are an integral part of these financial statements.
2
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- -----
MUNICIPAL BONDS
CERTIFICATE OF PARTICIPATION
$1,060,000 Platte County, Missouri 03/01/08 4.000% $ 1,106,290
-----------
EDUCATION
1,935,000 Alabama State Public School & College Authority 11/01/05 5.250 1,985,020
1,000,000 Arizona State University 07/01/08 5.000 1,084,770
1,000,000 Greenville County, South Carolina, School District 12/01/07 5.000 1,064,410
2,000,000 New York State Dormitory Authority 02/15/07 4.000 2,062,520
575,000 New York State Dormitory Authority 02/15/07 3.000 581,221
1,500,000 Texas A & M University 05/15/07 5.000 1,589,310
750,000 University of Houston, Texas 02/15/07 3.500 767,962
2,765,000 Virginia State Public School Authority 08/01/05 3.000 2,780,318
-----------
Total Education 11,915,531
-----------
-----------
ESCROWED TO MATURITY (2.6%)1
2,500,000 Houston, Texas, Water & Sewer System Revenue 12/01/05 5.000 2,566,700
1,040,000 New Mexico Finance Authority, Highway Revenue 09/01/06 5.000 1,086,020
-----------
Total Escrowed To Maturity 3,652,720
-----------
-----------
GENERAL OBLIGATIONS (42.6%)
1,000,000 Arlington, Texas 08/15/05 5.200 1,019,260
1,475,000 Austin, Texas 09/01/06 5.250 1,545,977
2,000,000 Austin, Texas 09/01/06 5.000 2,088,160
1,000,000 Beaufort County, South Carolina, School District 03/01/08 4.000 1,049,250
1,515,000 Birmingham, Alabama 07/01/05 5.000 1,537,225
1,000,000 Branson, Missouri, School District 03/01/08 4.000 1,043,670
200,000 California State 02/01/08 5.000 214,632
450,000 Carrollton-Farmers Branch, Texas,
Independent School District 02/15/06 4.000 458,883
870,000 Chester County, Pennsylvania 09/01/08 4.000 914,988
500,000 Chicago, Illinois 01/01/08 4.000 523,085
1,000,000 Chicago, Illinois, Metropolitan Water Reclamation
District 12/01/07 5.000 1,072,240
1,000,000 Chicago, Illinois, Park District 01/01/08 4.500 1,060,510
1,000,000 Dallas, Texas 02/15/08 4.000 1,046,440
1,000,000 Delaware County, Pennsylvania 10/01/05 5.300 1,023,600
1,000,000 Delaware State 08/01/07 4.500 1,055,400
655,000 Du Page County, Illinois, Forest Preserve District 11/01/05 6.000 675,803
500,000 El Paso, Texas 08/15/07 4.500 526,930
650,000 Florida State Board of Education 06/01/06 4.000 666,276
1,400,000 Georgia State 08/01/06 4.000 1,439,368
1,000,000 Georgia State 11/01/07 3.000 1,018,180
1,175,000 Greensboro, North Carolina 05/01/08 4.000 1,237,345
1,000,000 Guilford County, North Carolina2 10/01/07 4.000 1,039,980
1,075,000 Hamilton County, Tennessee 10/01/07 4.000 1,118,559
1,000,000 Harris County, Texas 10/01/05 5.000 1,021,570
1,750,000 Hawaii State 02/01/07 5.250 1,852,760
1,175,000 Houston, Texas, Independent School District 07/15/06 3.500 1,196,397
500,000 Huntsville, Alabama 11/01/05 4.000 507,775
1,500,000 Illinois State 08/01/07 5.000 1,595,145
1,430,000 Jordan, Utah, School District 06/15/08 4.000 1,504,703
820,000 Las Vegas-Clark County, Nevada, Library District 06/01/07 2.750 824,174
580,000 Las Vegas-Clark County, Nevada, Library District 06/01/08 3.000 586,560
2,000,000 Massachusetts State 01/01/07 4.000 2,064,940
1,725,000 Milwaukee County, Wisconsin 08/01/07 4.000 1,790,791
1,000,000 Milwaukee, Wisconsin 09/01/06 5.000 1,044,080
1,000,000 Minneapolis, Minnesota 12/01/05 5.000 1,026,130
1,000,000 Mississippi State 12/01/05 5.000 1,025,770
750,000 New Haven, Connecticut 11/01/05 5.000 768,113
505,000 Ocean Township, New Jersey, Board of Education 03/01/08 4.250 534,007
1,090,000 Oklahoma City, Oklahoma 03/01/07 4.000 1,129,425
1,000,000 Portsmouth, Virginia 07/01/07 4.000 1,039,410
500,000 San Antonio, Texas 08/01/05 5.000 508,455
2,500,000 Seattle, Washington2 08/31/05 1.650 2,491,875
1,000,000 Shelby County, Tennessee 04/01/06 5.000 1,034,250
1,065,000 Southington, Connecticut 09/15/08 2.500 1,066,480
2,000,000 Texas State 08/31/05 3.000 2,012,860
2,500,000 Texas State 10/01/06 5.000 2,615,200
1,000,000 Texas State 10/01/07 5.000 1,068,210
750,000 Vermont State 02/01/07 4.000 775,800
725,000 Virginia Beach, Virginia 07/15/07 5.300 777,555
1,000,000 Virginia State 06/01/06 4.000 1,025,320
1,585,000 Warren County, Tennessee 06/01/08 4.250 1,671,795
2,000,000 Washington State 01/01/07 3.500 2,045,220
----------
Total General Obligations 59,980,531
----------
----------
FINANCIAL STATEMENT DECEMBER 31, 2004 3
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- -----
HEALTH CARE (2.1%)
$1,400,000 California Statewide Communities Development Authority2 05/01/07 2.300% $1,389,640
1,025,000 Chemung County, New York, Industrial Development Agency 11/01/06 4.000 1,050,164
500,000 Harris County, Texas, Health Facilities Development Authority 12/01/07 5.000 534,375
-----------
Total Health Care 2,974,179
-----------
-----------
HOUSING (1.5%)
1,000,000 Alaska State Housing Financial Corp. 12/01/05 5.000 1,026,040
1,000,000 Puerto Rico Housing Finance Authority 12/01/08 4.500 1,062,720
-----------
Total Housing 2,088,760
-----------
-----------
The accompanying notes are an integral part of these financial statements.
4
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- -----
INDUSTRIAL (1.5%)
$1,000,000 La Cygne, Kansas, Environmental Improvement Revenue2 09/01/05 2.250% $ 996,370
1,020,000 Missouri State Environmental Improvement & Energy Resources
Authority, Pollution Control Revenue 01/01/06 6.000 1,057,913
-----------
Total Industrial 2,054,283
----------
----------
MISCELLANEOUS (3.7%)
1,000,000 Kentucky State Property & Buildings Commission 02/01/06 5.250 1,031,700
2,000,000 Ohio State Building Authority 04/01/08 4.500 2,123,000
1,000,000 Southcentral Pennsylvania General Authority Revenue2 12/01/08 4.500 1,058,280
1,000,000 Tobacco Settlement Financing Corp., New York 06/01/07 4.000 1,028,650
-----------
Total Miscellaneous 5,241,630
-----------
-----------
PRE-REFUNDED (3.7%)1
1,000,000 North Carolina State 06/01/05 5.200 1,032,970
1,000,000 Ohio State Public Facilities Commission 06/01/08 4.700 1,077,140
3,000,000 Washington County, Oregon, School District 11/01/05 6.000 3,097,020
-----------
Total Pre-Refunded 5,207,130
-----------
-----------
SALES TAX (3.0%)
1,100,000 Illinois State Sales Tax Revenue 06/15/07 3.000 1,115,312
1,000,000 Jacksonville, Florida, Sales Tax Revenue 10/01/05 5.000 1,021,640
2,000,000 New York, New York, City Transitional Finance Authority 11/01/07 5.000 2,141,020
-----------
Total Sales Tax 4,277,972
-----------
-----------
TRANSPORTATION (9.9%)
500,000 Florida State Turnpike Authority 07/01/05 6.500 510,965
500,000 Florida State Turnpike Authority 07/01/05 5.500 508,545
725,000 Massachusetts State Federal Highway Grant 06/15/07 4.200 754,740
1,000,000 Michigan State Trunk Line Highway Revenue 10/01/06 5.000 1,046,250
1,000,000 New Jersey State Transportation Trust 12/15/06 5.000 1,051,040
1,500,000 New Mexico State Highway Commission 06/15/06 5.000 1,559,805
1,000,000 New York State Thruway Authority 03/15/08 5.000 1,076,900
2,000,000 Orlando & Orange County, Florida, Expressway Authority 07/01/07 4.500 2,104,360
700,000 Phoenix, Arizona, Street & Highway User Revenue 07/01/08 4.500 748,188
1,500,000 Texas State Turnpike Authority 06/01/07 5.000 1,589,160
2,000,000 Texas State Turnpike Authority 06/01/07 4.000 2,072,420
925,000 Triborough Building & Tunnel Authority, New York 11/15/06 4.000 955,007
-----------
Total Transportation 13,977,380
-----------
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 5
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
--------- -------- -------- -----
UTILITIES (7.4%)
$3,000,000 Austin, Texas, Electric Utilities System Revenue 11/15/05 5.000 % $3,073,530
900,000 Boise-Kuna Irrigation District, Idaho, Hydroelectricity
Plant Project 07/01/07 5.250 959,364
1,000,000 Colorado Springs, Colorado, Utilities Revenue 11/15/08 5.000 1,092,980
1,000,000 Nebraska Public Power District 01/01/07 4.000 1,032,860
2,000,000 Orlando, Florida, Utilities Commission 10/01/05 5.750 2,054,060
500,000 Salt River Project, Arizona 01/01/08 4.000 523,970
1,000,000 St. John's River Power Park, Florida 10/01/06 5.000 1,047,300
650,000 Washington State Public Power Supply System 07/01/05 5.000 659,055
-----------
Total Utilities 10,443,119
-----------
-----------
WATER/SEWER (12.1%)
1,345,000 Anderson, South Carolina, Water & Sewer Revenue 07/01/08 4.000 1,411,537
2,000,000 Broward County, Florida, Water & Sewer Revenue 10/01/07 4.000 2,088,060
2,500,000 Dallas, Texas, Waterworks & Sewer System Revenue 10/01/06 5.000 2,613,025
1,500,000 De Kalb County, Georgia, Water & Sewer Revenue 10/01/05 6.250 1,546,245
485,000 El Paso, Texas, Water & Sewer Revenue 03/01/07 4.000 501,815
980,000 El Paso, Texas, Water & Sewer Revenue 03/01/08 4.000 1,024,012
1,000,000 Irving, Texas, Waterworks & Sewer Revenue 08/15/07 4.375 1,048,640
1,000,000 Los Angeles, California, Water & Power Revenue 07/01/07 4.500 1,052,670
625,000 Massachusetts State Water Pollution Abatement Trust 08/01/05 4.500 633,800
1,500,000 Michigan Municipal Bond Authority, Clean Water Revenue 10/01/05 5.500 1,539,045
500,000 Michigan Municipal Bond Authority, Clean Water Revenue 10/01/05 5.000 510,820
1,000,000 Michigan Municipal Bond Authority, Clean Water Revenue 10/01/06 5.000 1,046,780
1,000,000 Ohio State Water Development Authority 06/01/06 5.000 1,038,240
1,000,000 Tarrant Regional Water District, Texas 03/01/06 4.500 1,026,310
-----------
Total Water/Sewer 17,080,999
-----------
-----------
The accompanying notes are an integral part of these financial statements.
6
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
TOTAL INVESTMENTS (Identified cost $139,831,455)(3) $140,000,524
OTHER ASSETS IN EXCESS OF LIABILITIES ............ 868,352
------------
NET ASSETS ....................................... $140,868,876
============
- ----------
(1) 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.
(2) Variable rate instrument. Interest rates change on specific dates (such as
a coupon or interest payment date). The yield shown represents the
December 31, 2004 coupon rate.
(3) The aggregate cost for federal income tax purposes is $139,831,455, the
aggregate gross unrealized appreciation is $605,735, and the aggregate
gross unrealized depreciation is $436,666, resulting in net unrealized
appreciation of $169,069.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 7
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004 (unaudited)
ASSETS:
Investments in securities, at value
(identified cost $139,831,455) ........................ $ 140,000,524
Cash .................................................... 482,017
Receivables for:
Interest .............................................. 1,610,352
Fund shares sold ...................................... 70,000
Prepaid expenses ........................................ 3,954
-------------
Total Assets ........................................ 142,166,847
-------------
LIABILITIES:
Payables for:
Fund shares redeemed .................................. 1,167,483
Shareholder servicing fees ............................ 30,780
Investment advisory fees .............................. 30,780
Professional fees ..................................... 18,724
Administrative fees ................................... 18,468
Dividends and distributions declared .................. 6,276
Custody and accounting fees ........................... 3,284
Board of Trustees' fees ............................... 1,496
Accrued expenses and other liabilities .................. 20,680
-------------
Total Liabilities ................................... 1,297,971
-------------
NET ASSETS ................................................. $ 140,868,876
=============
Net Assets Consist of:
Paid-in capital ......................................... $ 140,708,836
Distributions in excess of net investment income ........ (6,148)
Accumulated net realized loss on investments ............ (2,881)
Net unrealized appreciation on investments .............. 169,069
-------------
Net Assets ................................................. $ 140,868,876
=============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($140,868,876 / 13,322,750 shares outstanding) .......... $10.57
======
The accompanying notes are an integral part of these financial statements.
8
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2004 (unaudited)
NET INVESTMENT INCOME:
Income:
Interest income .......................................... $ 1,692,257
-----------
Expenses:
Investment advisory fees ................................. 171,984
Shareholder servicing fees ............................... 171,984
Administrative fees ...................................... 103,190
Custody and accounting fees .............................. 47,273
Professional fees ........................................ 17,741
Board of Trustees' fees .................................. 3,921
Miscellaneous expenses ................................... 33,798
-----------
Total Expenses ......................................... 549,891
Expense offset arrangement ............................. (1,076)
-----------
Net Expenses ........................................... 548,815
-----------
Net Investment Income ...................................... 1,143,442
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized loss on investments ........................... (276)
Net change in unrealized appreciation on investments ....... 656,754
-----------
Net Realized and Unrealized Gain ....................... 656,478
-----------
Net Increase in Net Assets Resulting From Operations ....... $ 1,799,920
===========
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 9
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended
December 31, For the
2004 year ended
(Unaudited) June 30, 2004
----------- -------------
INCREASE IN NET ASSETS:
Operations:
Net investment income .................... $ 1,143,442 $ 2,268,866
Net realized gain (loss) on investments .. (276) 545,787
Net change in unrealized appreciation
(depreciation) on investments .......... 656,754 (3,796,607)
------------- -------------
Net increase (decrease) in net assets
resulting from operations .............. 1,799,920 (981,954)
------------- -------------
Dividends and distributions declared:
From net investment income ............... (1,143,613) (2,269,577)
From net realized gains .................. (467,292) (435,991)
------------- -------------
Total dividends and distributions
declared ............................. (1,610,905) (2,705,568)
------------- -------------
Fund shares transactions:
Net proceeds from sales of fund shares ... 39,527,515 81,143,731
Net asset value of fund shares issued
to shareholders in reinvestment of
distributions .......................... 553,071 1,022,073
Net cost of fund shares repurchased ...... (25,834,801) (59,305,159)
------------- -------------
Net increase in net assets resulting
from fund shares transactions .......... 14,245,785 22,860,645
------------- -------------
Total increase in net assets ........... 14,434,800 19,173,123
NET ASSETS:
Beginning of year .......................... 126,434,076 107,260,953
------------- -------------
End of period (including distributions
in excess of net investment income of
$6,148 and $5,977, respectively) ......... $ 140,868,876 $ 126,434,076
============= =============
The accompanying notes are an integral part of these financial statements.
10
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
For the six
months ended
December 31, For the years ended June 30,
2004 -------------------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, beginning
of year ....................... $10.55 $10.87 $10.73 $10.53 $10.24 $10.30
Income from investment
operations:
Net investment income ......... 0.09 0.18 0.25 0.31 0.35 0.34
Net realized and unrealized
gain (loss) on investments .. 0.05 (0.28) 0.18 0.22 0.29 (0.06)
----------- ----------- ----------- ----------- ----------- -----------
Total income (loss) from
investment operations ..... 0.14 (0.10) 0.43 0.53 0.64 0.28
----------- ----------- ----------- ----------- ----------- -----------
Less dividends and distributions:
From net investment income .... (0.09) (0.18) (0.26) (0.31) (0.35) (0.34)
From net realized gains ....... (0.03) (0.04) (0.03) (0.02) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total dividends and
distributions ............. (0.12) (0.22) (0.29) (0.33) (0.35) (0.34)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period ... $10.57 $10.55 $10.87 $10.73 $10.53 $10.24
=========== =========== =========== =========== =========== ===========
Total return ..................... 1.37% (0.75%) 4.04% 5.14% 6.37% 2.88%
Ratios/Supplemental data:
Net assets, end of period
(000's omitted) ............. $140,869 $126,434 $107,261 $82,365 $64,592 $78,381
Ratio of expenses to average
net assets:
Net expenses paid by Fund ... 0.80%(1) 0.80% 0.82% 0.83% 0.77% 0.85%
Expense offset arrangement .. 0.00%(1,2) 0.00%(2) 0.00%(2) 0.01% 0.06% 0.03%
----------- ----------- ----------- ----------- ----------- -----------
Total expenses ............ 0.80%(1) 0.80% 0.82% 0.84% 0.83% 0.88%
Ratio of net investment income
to average net assets ....... 1.66% 1.86% 2.33% 2.90% 3.36% 3.29%
Portfolio turnover rate ....... 60% 90% 82% 94% 45% 22%
- ----------
(1) Annualized.
(2) Amount is less than 0.01%.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 11
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 (unaudited)
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
with a par value of $0.01 per share. At December 31, 2004, 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 and Income. 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. 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. Debt obligations may be placed on
non-accrual status and related interest income may be reduced by
ceasing current accruals and writing off interest receivable when
the collection of all or a portion of interest has become doubtful
based on constantly applied procedures. A debt obligation is removed
from non-accrual status when the issuer resumes interest payments or
when collectibility of interest is reasonable assured.
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
(the "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.
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
12
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2004 (unaudited)
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.
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 six months
ended December 31, 2004, the Fund incurred $171,984 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
sub-administration services agreement with Federated Services Company
("FSC") for which FSC receives compensation paid by BBHTC. For the six
months ended December 31, 2004, the Fund incurred $103,190 for
administrative services.
Shareholder Servicing Fees. The Trust has a shareholder servicing
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 six months ended December 31, 2004, the
Fund incurred $171,984 for shareholder servicing 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
six months ended December 31, 2004, the Fund incurred $3,921 for 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 six months ended December 31, 2004, the Fund incurred
$47,273 for custody and accounting services. These fees were reduced by
$1,076 as a result of an expense offset arrangement with the Fund's
custodian.
3. Investment Transactions. For the six months ended December 31, 2004, the
cost of purchases and the proceeds of sales of investment securities other
than short-term investments were $47,443,670 and $40,200,000,
respectively.
4. Share Transactions. Transactions in fund shares were as follows:
For the six
months ended For the
December 31, 2004 year ended
(unaudited) June 30, 2004
----------------- -------------
Fund shares sold ........................... 3,709,743 7,539,163
Fund shares issued in connection
with reinvestment of dividends ........... 62,082 95,120
Fund shares repurchased .................... (2,431,807) (5,521,766)
---------- ----------
Net increase ............................... 1,340,018 2,112,517
========== ==========
FINANCIAL STATEMENT DECEMBER 31, 2004 13
BBH TAX FREE SHORT/INTERMEDIATE FIXED INCOME FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
December 31, 2004 (unaudited)
EXAMPLE
As a shareholder of BBH Tax Free Short/Intermediate Fixed Income Fund (the
"Fund"), you may incur two types of costs: (1) transaction costs on purchase
payments, reinvested dividends, or other distributions; and exchange fees; and
(2) ongoing costs, including management fees; and other Fund expenses. This
Example is intended to help you understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004 to December 31, 2004).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2004 to
July 1, 2004 December 31, 2004 December 31, 2004(1)
------------- ----------------- --------------------
Actual............... $1,000 $1,014 4
Hypothetical(2)...... $1,000 $1,021 4
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.80%,
multiplied by the average account value over the period, multiplied by
184/365 (to reflect the one-half year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio is subtracted from
the assumed return before expenses.
14
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
On the internet: www.bbhfunds.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.
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
BROWN [LOGO]
BROTHERS
HARRIMAN
Semi-Annual Report
DECEMBER 31, 2004
BBH TAX EXEMPT MONEY FUND
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
December 31, 2004 (unaudited)
BREAKDOWN BY BOND TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
CERTIFICATE OF PARTICIPATION ..................... $ 2,100,000 0.5%
EDUCATION ........................................ 55,066,547 12.2
ESCROWED TO MATURITY ............................. 420,000 0.1
GENERAL OBLIGATIONS .............................. 112,400,716 25.0
HEALTH CARE ...................................... 17,800,000 3.9
INDUSTRIAL ....................................... 40,860,000 9.1
MISCELLANEOUS .................................... 39,735,508 8.8
PRE-REFUNDED ..................................... 34,336,239 7.6
SPECIAL TAX ...................................... 7,028,914 1.6
TRANSPORTATION ................................... 17,098,147 3.8
UTILITIES ........................................ 9,282,799 2.1
WATER/SEWER ...................................... 58,686,319 13.0
COMMERCIAL PAPER ................................. 53,305,000 11.8
OTHER ASSETS IN EXCESS OF LIABILITIES ............ 2,268,657 0.5
------------ -----
NET ASSETS ....................................... $450,388,846 100.0%
============ =====
TOP FIVE HOLDINGS BY STATE
Percent of
U.S. $ Value Net Assets
------------ ----------
TEXAS ............................................ $ 52,503,182 11.7%
NEW YORK ......................................... 50,331,003 11.2
MARYLAND ......................................... 46,167,311 10.2
MASSACHUSETTS .................................... 32,838,230 7.3
CALIFORNIA ....................................... 32,400,000 7.2
OTHER STATES ..................................... 233,880,463 51.9
OTHER ASSETS IN EXCESS OF LIABILITIES ............ 2,268,657 0.5
------------ -----
NET ASSETS ....................................... $450,388,846 100.0%
============ =====
All data as of December 31, 2004. The Fund's breakdown by bond type and top five
holdings by state are expressed as a percentage of net assets and may vary over
time.
The accompanying notes are an integral part of these financial statements.
2
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (87.7%)
CERTIFICATE OF PARTICIPATION (0.5%)
$ 2,100,000 Denver, Colorado, City & Council(1) ....... 01/05/05 1.970% $ 2,100,000
------------
EDUCATION (12.2%)
3,900,000 Connecticut State Health & Educational
Facilities Authority(1) ................ 01/03/05 2.250 3,900,000
2,700,000 Connecticut State Health & Educational
Facilities Authority(1) ................ 01/05/05 2.000 2,700,000
625,000 Kansas City, Missouri, School District
Building Corp. ......................... 02/01/05 4.000 626,547
3,610,000 Massachusetts State Health &
Educational Facilities Authority(1) .... 01/03/05 2.100 3,610,000
3,000,000 Massachusetts State Health &
Educational Facilities Authority(1) .... 01/06/05 2.000 3,000,000
9,000,000 Michigan State University(1) .............. 01/05/05 2.000 9,000,000
11,500,000 New Hampshire Health & Education
Facilities Authority(1) ................ 01/05/05 1.950 11,500,000
2,800,000 New Hampshire Health & Education
Facilities Authority(1) ................ 01/05/05 1.950 2,800,000
5,695,000 New Jersey State Educational Facilities
Authority(1) ........................... 01/03/05 2.250 5,695,000
435,000 New Jersey State Educational Facilities
Authority(1) ........................... 01/04/05 2.070 435,000
2,000,000 New York State Dormitory Authority(1) ..... 01/06/05 2.000 2,000,000
3,000,000 Ohio State University(1) .................. 01/06/05 2.000 3,000,000
1,500,000 Ohio State University(1) .................. 01/06/05 2.000 1,500,000
1,000,000 Ohio State University(1) .................. 01/18/05 1.460 1,000,000
2,500,000 University of Missouri(1) ................. 01/03/05 2.190 2,500,000
1,800,000 University of Pittsburgh(1) ............... 01/05/05 2.000 1,800,000
------------
Total Education ........................... 55,066,547
------------
ESCROWED TO MATURITY (0.1%)(2)
420,000 New Jersey State Turnpike Authority ....... 01/01/05 5.300 420,000
------------
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 3
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
GENERAL OBLIGATIONS (25.0%)
$ 800,000 California State(1) ....................... 01/03/05 2.250% $ 800,000
1,000,000 Chicago, Illinois ......................... 01/01/05 5.000 1,000,000
975,000 Chicago, Illinois, Metropolitan Water
Reclamation District ................... 12/01/05 5.300 1,003,541
5,000,000 Connecticut State(1) ...................... 01/06/05 2.030 5,000,000
2,385,000 District of Columbia(1) ................... 01/05/05 2.000 2,385,000
1,000,000 Georgia State ............................. 02/01/05 5.000 1,003,331
1,710,000 Georgia State ............................. 03/01/05 5.800 1,722,209
1,700,000 Georgia State ............................. 05/01/05 4.000 1,713,905
1,250,000 Georgia State ............................. 07/01/05 6.000 1,277,370
1,100,000 Gwinnett County, Georgia .................. 01/01/05 2.000 1,100,000
1,000,000 Hawaii State .............................. 03/01/05 6.000 1,007,378
1,120,000 Hawaii State .............................. 10/01/05 5.000 1,144,339
1,200,000 Hennepin County, Minnesota(1) ............. 01/06/05 1.840 1,200,000
300,000 Hennepin County, Minnesota(1) ............. 01/06/05 1.840 300,000
2,905,000 Houston, Texas ............................ 03/01/05 2.000 2,909,655
1,000,000 Illinois State ............................ 07/01/05 5.000 1,017,545
1,680,000 Jefferson County, Colorado,
School District ........................ 12/15/05 5.250 1,730,448
1,500,000 Lake County, Illinois, Forest
Preservation District .................. 12/15/05 5.000 1,541,973
5,000,000 Maryland State ............................ 02/01/05 5.000 5,016,095
4,620,000 Maryland State ............................ 03/01/05 5.250 4,649,377
1,000,000 Maryland State ............................ 03/01/05 4.000 1,004,506
1,650,000 Maryland State ............................ 07/15/05 5.250 1,679,140
1,000,000 Mecklenburg County, North Carolina ........ 02/01/05 3.000 1,001,592
9,800,000 Minneapolis, Minnesota(1) ................. 01/06/05 1.840 9,800,000
2,000,000 Minneapolis, Minnesota(1) ................. 01/06/05 1.840 2,000,000
620,000 Minneapolis, Minnesota(1) ................. 01/06/05 1.840 620,000
105,000 Minneapolis, Minnesota(1) ................. 01/06/05 1.840 105,000
570,000 Minneapolis-St. Paul, Minnesota,
Metropolitan Area ...................... 03/01/05 5.000 572,196
1,300,000 Minnesota State ........................... 11/01/05 5.250 1,334,280
1,000,000 Minnesota State ........................... 11/01/05 5.000 1,024,746
The accompanying notes are an integral part of these financial statements.
4
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
GENERAL OBLIGATIONS (continued)
$ 755,000 Montgomery County, Maryland ............... 02/01/05 5.000% $ 757,467
5,000,000 Montgomery County, Maryland ............... 04/01/05 3.000 5,024,460
1,000,000 Montgomery County, Maryland ............... 05/01/05 5.375 1,013,671
1,000,000 Montgomery County, Maryland ............... 07/01/05 5.700 1,020,829
3,400,000 New York, New York(1) ..................... 01/03/05 2.250 3,400,000
600,000 New York, New York(1) ..................... 01/03/05 2.150 600,000
600,000 New York, New York(1) ..................... 01/03/05 2.130 600,000
3,300,000 New York, New York(1) ..................... 01/03/05 2.000 3,300,000
2,000,000 New York, New York(1) ..................... 01/03/05 2.000 2,000,000
2,000,000 New York, New York(1) ..................... 01/03/05 2.000 2,000,000
1,400,000 New York, New York(1) ..................... 01/03/05 2.000 1,400,000
750,000 New York, New York(1) ..................... 01/03/05 2.000 750,000
600,000 New York, New York(1) ..................... 01/03/05 2.000 600,000
1,050,000 North Carolina State ...................... 03/01/05 5.100 1,055,571
3,075,000 North Carolina State ...................... 03/01/05 5.000 3,092,355
1,000,000 Northbridge, Massachusetts ................ 02/15/05 5.000 1,003,844
1,175,000 Pennsylvania State ........................ 08/01/05 5.000 1,196,408
500,000 Rapid City, South Dakota,
School District ........................ 01/01/05 4.400 500,000
1,150,000 Seattle, Washington ....................... 01/15/05 6.000 1,152,176
3,600,000 Seattle, Washington(1) .................... 08/31/05 1.650 3,600,000
2,000,000 South Carolina State ...................... 01/01/05 4.000 2,000,000
700,000 South Carolina State ...................... 04/01/05 5.250 706,832
5,000,000 Texas State ............................... 08/31/05 3.000 5,046,643
2,000,000 Virginia State ............................ 06/01/05 5.500 2,029,584
1,500,000 Virginia State ............................ 06/01/05 4.000 1,516,600
5,000,000 Wake County, North Carolina ............... 03/01/05 3.000 5,013,625
3,150,000 Washington Suburban Sanitation
District, Maryland ..................... 06/01/05 5.000 3,190,062
1,140,000 Washington Suburban Sanitation
District, Maryland ..................... 06/01/05 4.500 1,153,807
1,000,000 Washington Suburban Sanitation
District, Maryland ..................... 06/01/05 4.500 1,013,156
------------
Total General Obligations ................. 112,400,716
------------
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 5
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
HEALTH CARE (3.9%)
$ 800,000 Harris County, Texas, Health Facilities
Development Corp.(1) ................... 01/03/05 2.200% $ 800,000
5,500,000 Illinois Health Care Facilities Authority(1) 01/05/05 2.000 5,500,000
9,000,000 Montana State Health Facilities
Authority(1) ........................... 01/05/05 2.150 9,000,000
1,500,000 Oklahoma State Industries Authority,
Hospital Revenue(1) .................... 01/03/05 2.200 1,500,000
1,000,000 Washington State Health Care
Facilities Authority(1) ................ 01/04/05 2.170 1,000,000
------------
Total Health Care ......................... 17,800,000
------------
INDUSTRIAL (9.1%)
2,600,000 Berkeley County, South Carolina,
Pollution Control Revenue(1) ........... 01/04/05 2.180 2,600,000
1,100,000 California Statewide Communities
Development Authority, Pollution
Control Revenue(1) ..................... 01/03/05 2.140 1,100,000
5,850,000 Columbia, Alabama, Pollution Control
Revenue(1) ............................. 01/03/05 2.250 5,850,000
300,000 Columbia, Alabama, Pollution Control
Revenue(1) ............................. 01/03/05 2.250 300,000
600,000 Delaware County, Pennsylvania,
Industrial Development Authority(1) .... 01/05/05 1.960 600,000
1,650,000 Forsyth, Montana, Pollution Control
Revenue(1) ............................. 01/03/05 2.250 1,650,000
700,000 Gulf Coast Waste Disposal Authority,
Texas(1) ............................... 01/04/05 2.130 700,000
2,400,000 Harris County, Texas, Pollution Control
Revenue(1) ............................. 01/03/05 2.150 2,400,000
2,400,000 Harris County, Texas, Pollution Control
Revenue(1) ............................. 01/04/05 2.130 2,400,000
1,000,000 Hurley, New Mexico, Pollution Control
Revenue(1) ............................. 01/03/05 2.180 1,000,000
5,000,000 Jackson County, Mississippi, Port
Facility Revenue(1) .................... 01/03/05 2.180 5,000,000
The accompanying notes are an integral part of these financial statements.
6
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
INDUSTRIAL (continued)
$ 5,900,000 Joliet, Illinois, Regional Port District(1). 01/04/05 2.130% $ 5,900,000
500,000 Lincoln County, Wyoming, Pollution
Control Revenue(1) ..................... 01/03/05 2.050 500,000
4,000,000 Lincoln County, Wyoming, Pollution
Control Revenue(1) ..................... 01/04/05 2.130 4,000,000
800,000 Midlothian, Texas, Pollution Control
Revenue(1) ............................. 01/05/05 2.000 800,000
2,600,000 Moffat County, Colorado, Pollution
Control Revenue(1) ..................... 01/03/05 2.150 2,600,000
1,000,000 Port Arthur, Texas, Navigation District(1) . 01/03/05 2.180 1,000,000
2,460,000 Valdez, Alaska, Marine Terminal
Revenue(1) ............................. 01/05/05 1.300 2,460,000
------------
Total Industrial .......................... 40,860,000
------------
MISCELLANEOUS (8.8%)
1,000,000 Arkansas Development Finance
Authority .............................. 11/01/05 5.000 1,024,568
2,600,000 California Housing Finance Agency(1) ...... 01/04/05 1.480 2,600,000
1,300,000 California Housing Finance Agency(1) ...... 01/05/05 2.030 1,300,000
4,000,000 California State Economic Recovery
Bond(1) ................................ 01/03/05 2.250 4,000,000
1,365,000 Clayton County, Georgia, Housing
Authority(1) ........................... 01/04/05 1.500 1,365,000
1,500,000 Colorado Housing & Finance Authority ...... 01/05/05 2.000 1,500,000
2,180,000 Kansas State Development Finance
Authority .............................. 08/01/05 3.000 2,200,279
3,155,000 Maine Municipal Bond Bank ................. 09/01/05 3.000 3,175,661
5,300,000 Michigan State Housing Development
Authority(1) ........................... 01/05/05 1.960 5,300,000
900,000 New York State Local Government
Assistance Corp.(1) .................... 01/05/05 1.950 900,000
6,800,000 New York, New York, City Transitional
Finance Authority(1) ................... 01/03/05 2.250 6,800,000
500,000 New York, New York, City Transitional
Finance Authority(1) ................... 01/03/05 2.200 500,000
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 7
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
MISCELLANEOUS (continued)
$ 5,700,000 New York, New York, City Transitional
Finance Authority(1) ................... 01/03/05 2.150% $ 5,700,000
200,000 New York, New York, City Transitional
Finance Authority(1) ................... 01/03/05 2.150 200,000
2,170,000 New York, New York, City Transitional
Finance Authority(1) ................... 01/05/05 2.000 2,170,000
1,000,000 New York, New York, City Transitional
Finance Authority(1) ................... 01/05/05 2.000 1,000,000
------------
Total Miscellaneous ....................... 39,735,508
------------
PRE-REFUNDED (7.6%)(2)
1,540,000 Bexar, Texas, Metropolitan Water
District ............................... 05/01/05 6.000 1,593,467
1,150,000 Charlotte, North Carolina ................. 04/01/05 5.300 1,183,613
1,000,000 Charlotte, North Carolina ................. 04/01/05 5.300 1,029,432
950,000 Chesapeake, Virginia ...................... 05/01/05 5.500 981,439
1,100,000 Hawaii State .............................. 01/01/05 5.900 1,100,000
2,900,000 Houston, Texas ............................ 04/01/05 5.750 2,927,276
1,425,000 Houston, Texas ............................ 04/01/05 5.250 1,439,608
6,250,000 Indiana Bond Bank ......................... 02/01/05 6.750 6,402,602
2,500,000 Lakeshore, Michigan, Public Schools ....... 05/01/05 5.750 2,559,216
5,000,000 Maryland State ............................ 03/15/05 5.700 5,144,741
1,000,000 Nebraska Public Power District ............ 01/01/05 5.500 1,010,000
1,000,000 Nebraska Public Power District ............ 01/01/05 5.250 1,010,000
800,000 Nevada State .............................. 02/01/05 6.000 810,993
1,220,000 New Hanover County, North Carolina ........ 03/01/05 5.500 1,251,647
500,000 New Hanover County, North Carolina ........ 03/01/05 5.400 510,672
750,000 North Harris Montgomery Community
College District, Texas ................ 02/15/05 5.650 753,817
580,000 Port Arthur, Texas ........................ 02/15/05 5.500 582,846
3,000,000 Texas State ............................... 04/01/05 5.900 3,034,580
1,000,000 Texas State ............................... 04/01/05 5.600 1,010,290
------------
Total Pre-Refunded ........................ 34,336,239
------------
The accompanying notes are an integral part of these financial statements.
8
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
SPECIAL TAX (1.6%)
$ 2,000,000 Connecticut State Special Tax ............. 09/01/05 4.000% $ 2,028,914
5,000,000 Riverside County, California, Special
Tax(1) ................................. 01/05/05 1.950 5,000,000
------------
Total Special Tax ......................... 7,028,914
------------
TRANSPORTATION (3.8%)
1,000,000 Arizona State Transportation Board ........ 07/01/05 5.750 1,021,131
5,000,000 Georgia State Road & Tollway
Authority .............................. 10/01/05 3.000 5,037,933
1,500,000 Hawaii State Highway Revenue .............. 07/01/05 5.000 1,522,150
800,000 Kansas State Department of
Transportation(1) ...................... 01/18/05 1.000 800,000
770,000 Massachusetts Bay Transportation
Authority .............................. 03/01/05 5.000 774,386
2,600,000 Metropolitan Atlanta Rapid Transit
Authority, Georgia ..................... 07/01/05 6.250 2,662,635
3,200,000 Metropolitan Transportation Authority,
New York(1) ............................ 01/18/05 1.000 3,200,000
1,000,000 New York State Thruway Authority .......... 04/01/05 6.000 1,011,003
1,060,000 Oregon State Department of
Transportation ......................... 06/01/05 4.000 1,068,909
------------
Total Transportation ...................... 17,098,147
------------
UTILITIES (2.1%)
4,600,000 Municipal Electric Authority of
Georgia(1) ............................. 01/05/05 2.000 4,600,000
1,000,000 Nebraska Public Power District ............ 01/01/05 5.250 1,000,000
455,000 Sikeston, Missouri, Electric Revenue ...... 06/01/05 6.000 462,355
800,000 Washington State Public Power Supply
System(1) .............................. 01/05/05 2.020 800,000
1,400,000 Washington State Public Power Supply
System(1) .............................. 01/05/05 1.990 1,400,000
1,000,000 Washington State Public Power Supply
System ................................. 07/01/05 6.000 1,020,444
------------
Total Utilities ........................... 9,282,799
------------
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 9
BBH TAX EXEMPT MONEY FUND
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PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
WATER/SEWER (13.0%)
$ 1,400,000 Boston, Massachusetts, Water &
Sewer Commission(1) ................... 01/06/05 1.910% $ 1,400,000
1,100,000 California State Department of Water
Resources(1) .......................... 01/03/05 2.250 1,100,000
1,800,000 California State Department of Water
Resources(1) .......................... 01/05/05 2.050 1,800,000
5,000,000 California State Department of Water
Resources(1) .......................... 01/06/05 2.000 5,000,000
1,000,000 Cobb County, Georgia, Water & Sewer
Revenue ............................... 07/01/05 2.000 1,002,846
1,020,000 Connecticut State Clean Water Fund ....... 04/01/05 5.600 1,030,252
2,200,000 Detroit, Michigan, Sewage Disposal
Revenue(1) ............................ 01/05/05 2.050 2,200,000
3,900,000 Durham, North Carolina, Water & Sewer
Revenue(1) ............................ 01/05/05 2.030 3,900,000
1,000,000 Irvine Ranch, California, Water
District(1) ........................... 01/04/05 1.570 1,000,000
1,000,000 Kansas City, Missouri, Sewer Revenue ..... 03/01/05 4.000 1,003,221
3,900,000 Massachusetts State Water Resources
Authority(1) .......................... 01/03/05 2.250 3,900,000
4,000,000 Massachusetts State Water Resources
Authority(1) .......................... 01/05/05 2.000 4,000,000
1,000,000 Massachusetts State Water Resources
Authority(1) .......................... 01/05/05 1.960 1,000,000
5,900,000 Massachusetts State Water Resources
Authority(1) .......................... 01/05/05 1.950 5,900,000
1,550,000 Massachusetts State Water Resources
Authority(1) .......................... 01/05/05 1.950 1,550,000
1,000,000 Memphis, Tennessee, Water Division
Revenue ............................... 01/01/05 5.000 1,000,000
8,700,000 Metropolitan Water District of Southern
California(1) ......................... 01/03/05 2.250 8,700,000
2,100,000 New York, New York, City Municipal
Water Finance Authority(1) ............ 01/03/05 2.100 2,100,000
The accompanying notes are an integral part of these financial statements.
10
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
December 31, 2004 (unaudited)
Principal Maturity Interest
Amount Date Rate Value
- ----------- -------- -------- ------------
MUNICIPAL BONDS (continued)
WATER/SEWER (continued)
$ 8,100,000 New York, New York, City Municipal
Water Finance Authority(1) ............. 01/04/05 2.180% $ 8,100,000
2,000,000 New York, New York, City Municipal
Water Finance Authority(1) ............. 01/04/05 2.180 2,000,000
1,000,000 Ohio State Solid Waste Revenue(1) ......... 01/03/05 2.230 1,000,000
------------
Total Water/Sewer ......................... 58,686,319
------------
Total Municipal Bonds ..................... 394,815,189
------------
COMMERCIAL PAPER (11.8%)
7,000,000 City of Houston, Texas .................... 01/04/05 1.370 7,000,000
7,000,000 City of Houston, Texas .................... 02/24/05 1.680 7,000,000
3,900,000 City of San Antonio, Texas ................ 01/25/05 1.850 3,900,000
3,500,000 City of San Antonio, Texas ................ 01/26/05 1.820 3,500,000
5,500,000 Howard County, Maryland ................... 02/11/05 1.670 5,500,000
4,000,000 King County, Washington ................... 02/08/05 0.000 4,000,000
6,700,000 Massachusetts State Health &
Educational Facilities Authority ....... 02/07/05 1.750 6,700,000
10,000,000 Montgomery County, Maryland ............... 02/07/05 1.750 10,000,000
2,000,000 Municipal Electric Authority of
Georgia ................................ 01/20/05 1.650 2,000,000
3,705,000 Texas Public Finance Authority ............ 01/24/05 1.850 3,705,000
------------
Total Commercial Paper .................... 53,305,000
------------
TOTAL INVESTMENTS, AT AMORTIZED COST............................... 99.5% $448,120,189
OTHER ASSETS IN EXCESS OF LIABILITIES.............................. 0.5 2,268,657
----- ------------
NET ASSETS......................................................... 100.0% $450,388,846
===== ============
- ----------
(1) Variable rate instrument. Interest rates change on specific dates (such as
a coupon or interest payment date). The yield shown represents the
December 31, 2004 coupon rate.
(2) 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 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.
FINANCIAL STATEMENT DECEMBER 31, 2004 11
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004 (unaudited)
ASSETS:
Investments, at amortized cost ............................... $448,120,189
Cash ......................................................... 17,828
Interest receivable .......................................... 2,501,580
Prepaid expenses ............................................. 8,324
------------
Total Assets ............................................ 450,647,921
------------
LIABILITIES:
Payables for:
Shareholder servicing fees ................................ 99,005
Investment advisory fees .................................. 59,404
Administrative fees ....................................... 39,603
Professional fees ......................................... 20,451
Dividends declared ........................................ 15,629
Custody and accounting fees ............................... 8,125
Board of Trustees' fees ................................... 900
Accrued expenses and other liabilities ....................... 15,958
------------
Total Liabilities ....................................... 259,075
------------
NET ASSETS, for 450,492,718 fund shares outstanding ............. $450,388,846
============
Net Assets Consist of:
Paid-in capital .............................................. $450,388,846
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE .................... $1.00
=====
The accompanying notes are an integral part of these financial statements.
12
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended December 31, 2004 (unaudited)
NET INVESTMENT INCOME:
Income:
Interest ........................................... $ 3,085,471
-----------
Expenses:
Shareholder servicing fees ......................... 582,671
Investment advisory fees ........................... 349,603
Administrative fees ................................ 233,069
Custody and accounting fees ........................ 65,618
Professional fees .................................. 20,386
Board of Trustees' fees ............................ 11,032
Miscellaneous expenses ............................. 39,121
-----------
Total Expenses ................................... 1,301,500
Expense offset arrangement ....................... (2,206)
-----------
Net Expenses ..................................... 1,299,294
-----------
Net Investment Income ................................. $ 1,786,177
===========
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 13
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the six
months ended For the
December 31, 2004 year ended
(unaudited) June 30, 2004
----------------- --------------
DECREASE IN NET ASSETS:
From Operations:
Net investment income ................... $ 1,786,177 $ 1,903,766
Dividends declared from net investment
income .................................. (1,813,871) (1,903,482)
------------- -------------
Net increase (decrease) in net assets
from operations ....................... (27,694) 284
------------- -------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold ...................... 528,549,134 955,433,086
Fund shares issued in reinvestment
of dividends ........................ 926,536 1,026,049
Fund shares repurchased ............... (531,892,423) (969,022,796)
------------- -------------
Net decrease in net assets resulting
from fund share transactions ...... (2,416,753) (12,563,661)
------------- -------------
Total decrease in net assets ........ (2,444,447) (12,563,377)
NET ASSETS:
Beginning of year .......................... 452,833,293 465,396,670
------------- -------------
End of period .............................. $ 450,388,846 $ 452,833,293
============= =============
The accompanying notes are an integral part of these financial statements.
14
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each
period
For the six
months ended For the year ended June 30,
December 31, 2004 -----------------------------------------------------------------------------
(unaudited) 2004 2003 2002 2001 2000
----------------- --------- --------- --------- --------- ---------
Net asset value, beginning
of year ................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment
operations:
Net investment income ..... 0.00(1) 0.00(1) 0.01 0.01 0.03 0.03
Dividends to shareholders
from net investment
income .................... (0.00)(1) (0.00)(1) (0.01) (0.01) (0.03) (0.03)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========= ========= ========= ========= ========= =========
Total return ................. 0.40% 0.42% 0.72% 1.40% 3.20% 3.05%
Ratios/Supplemental data:
Net assets, end of period
(000's omitted) ........ $450,389 $452,833 $465,397 $414,143 $199,398 $173,050
Ratio of expenses
to average net assets .. 0.56%(2,3) 0.55%(2) 0.56%(2) 0.53%(2) 0.65%(4) 0.65%(4)
Ratio of net investment
income to average
net assets ............. 0.77%(3) 0.42% 0.72% 1.28% 3.17% 3.24%
- ----------
(1) Less than $0.01 per share.
(2) The ratio of expenses to average net assets for the six months ended
December 31, 2004 and for the years ended June 30, 2004, 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 0.56%, 0.55%, 0.57% and 0.55%, respectively.
(3) Annualized.
(4) During the years ended June 30, 2001 and 2000, the Fund had an agreement
with Brown Brothers Harriman Trust Company, LLC (the "Administrator")
whereby the Administrator paid certain expenses of the Fund and received a
fee from the Fund (the "Expense Payment Fee'), computed and paid monthly,
such that after such fee the aggregate expenses of the Fund would not
exceed 0.65% of the Fund's average daily net assets. Had the expense
payment agreement not been in place, the ratio of expenses to average net
assets would have been as follows:
Expenses paid by the Fund n/a n/a n/a n/a 0.62% 0.62%
Expense offset arrangement n/a n/a n/a n/a 0.03% 0.03%
---- ----
Gross expenses n/a n/a n/a n/a 0.65% 0.65%
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT DECEMBER 31, 2004 15
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 (unaudited)
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 with a par value of $0.01 per
share. At December 31, 2004, 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 December 31, 2004, 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 gains and losses, if any, from investment transactions are
determined on the basis of identified cost. 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.
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 six months
ended December 31, 2004, the Fund incurred $349,603 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 0.10% of the Fund's average daily net assets. BBHTC has a
sub-
16
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
December 31, 2004 (unaudited)
administration services agreement with Federated Services Company ("FSC")
for which FSC receives compensation paid by BBHTC. For the six months
ended December 31, 2004, the Fund incurred $233,069 for administrative
services.
Shareholder Servicing Fees. The Trust has a shareholder servicing
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 six months ended December 31, 2004, the
Fund incurred $582,671 for shareholder servicing 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
six months ended December 31, 2004, the Fund incurred $11,032 for
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 six months ended December 31, 2004, the Fund incurred
$65,618 for custody and accounting services. These fees were reduced by
$2,206 as a result of an expense offset arrangement with the Fund's
custodian.
3. Federal Income Tax Status. At June 30, 2004, the Fund had a net capital
loss carryover, which is available to offset future capital gains to the
extent provided by regulations as follows:
Expiration date Amount
--------------- ------
June 30, 2010 ............................ $8,959
June 30, 2011 ............................ 231
------
$9,190
======
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.
FINANCIAL STATEMENT DECEMBER 31, 2004 17
BBH TAX EXEMPT MONEY FUND
- --------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
December 31, 2004 (unaudited)
EXAMPLE
As a shareholder of BBH Tax Exempt Money Fund (the "Fund"), you may incur two
types of costs: (1) transaction costs on purchase payments, reinvested
dividends, or other distributions; and exchange fees; and (2) ongoing costs,
including management fees; and other Fund expenses. This Example is intended to
help you understand your ongoing costs (in dollars) of investing in the Fund and
to compare these costs with the ongoing costs of investing in other mutual
funds.
The Example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period (July 1, 2004 to December 31, 2004).
ACTUAL EXPENSES
The first line of the table below provides information about actual account
values and actual expenses. You may use information in this line, together with
the amount you invested, to estimate the expenses that you paid over the period.
Simply divide your account value by $1,000 (for example, an $8,600 account value
divided by $1,000 = 8.6), then multiply the result by the number in the first
line under the heading entitled "Expenses Paid During the Period" to estimate
the expenses you paid on your account during the period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid
during the period. You may use this information to compare the ongoing costs of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as
redemption fees or exchange fees. Therefore, the second line of the table is
useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if these
transactional costs were included, your costs would have been higher.
Expenses Paid
Beginning Ending During Period
Account Value Account Value July 1, 2004 to
July 1, 2004 December 31, 2004 December 31, 2004(1)
------------- ----------------- -------------------
Actual............ $1,000 $1,004 3
Hypothetical(2)... $1,000 $1,022 3
- ----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.56%,
multiplied by the average account value over the period, multiplied by
184/365 (to reflect the one-half year period).
(2) Assumes a return of 5% before expenses. For the purpose of the
calculation, the applicable annualized expense ratio is subtracted from
the assumed return before expenses.
18
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
On the internet: www.bbhfunds.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.
A copy of the Fund's Proxy Voting Policy is available upon request by calling
the toll-free number listed above. A text-only version of the policy can be
viewed online or downloaded from the SEC at www.sec.gov.
BROWN [LOGO]
BROTHERS
HARRIMAN
ITEM 2. CODE OF ETHICS.
(a) The registrant has adopted a code of ethics that
applies to the registrant's principal executive officer,
principal financial officer,
principal accounting officer or controller or persons
performing similar functions.
(b) No answer required.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f)
(1) A copy of the code of ethics referenced in Item 2(a)
of this Form N-CSR is available and can be mailed,
free of charge, to anyone by calling (800) 575-1265.
(2) Not applicable.
(3) Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's Board of Trustees board has designated
two members of the audit committee as financial experts.
(2) The following Trustees have been designated as
audit committee financial experts by the
Board of Trustees: independent audit committee
members Arthur Miltenberger and David Feldman
are the designated audit committee financial experts.
(3) Not applicable.
(b) No answer required.
(c) No answer required.
(d) No answer required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
N/A for 12-31, required for Annual Filings only.
(a) Audit Fees N/A for 12-31 required for Annual Filings only
(b) Audit-Related Fees N/A for 12-31 required for Annual Filings only
(c) Tax Fees N/A for 12-31 required for Annual Filings only
(d) All Other Fees N/A for 12-31 required for Annual Filings only
(e) (1) Pre-approval policies.
(2) N/A for 12-31 required for Annual Filings only
(f) N/A for 12-31 required for Annual Filings only
(g) N/A for 12-31 required for Annual Filings only
(h) N/A for 12-31 required for Annual Filings only
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, Alan G. Lowy and
Arthur D. Miltenberger.
(b) Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES
AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF
CLOSED-END MANAGEMENT INVESTMENT
COMPANY.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES
BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS.
Not applicable.
ITEM 11. 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 12. 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 Trust on
behalf of: BBH Money Market Fund, BBH U.S. Treasury Money Fund,
BBH Tax Free Short/Intermediate Fixed income Fund and BBH Tax Exempt
Money 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 trustees (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: March 3, 2005
/s/ John A. Nielson
==============
John A. Nielsen
President - Principal Executive Officer
I, Nancy D. Osborn, 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 Free Short/Intermediate Fixed income Fund and BBH Tax Exempt
Money 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 trustees (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: March 3, 2005
/s/ Nancy D. Osborn
===============
Nancy D. Osborn
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
Free Short/Intermediate Fixed income Fund and BBH Tax Exempt Money Fund
("registrant"), hereby certify, to the best of our knowledge, that the
Registrant's Report on Form N-CSR for the period ended 12/31/04
(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: March 3, 2005
/s/ John A. Nielsen
==============
John A. Nielsen
Title: President, Principal Executive Officer
Dated: March 3, 2005
/s/ Nancy D. Osborn
===============
Nancy D. Osborn
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/ John A. Nielsen
-----------------------------------------------------
John A. Nielsen, President
(Principle Executive Officer)
Date: March 3, 2005
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/ Nancy D. Osborn
------------------------------------------------------
Nancy D. Osborn, Treasurer
(Principal Financial Officer)
Date: March 3, 2005
* Print name and title of each signing officer under his or her signature.
BBH Trust December 2004 NCSR page 84 of 84 pages