ncsr.htm
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: 811-21829
BBH TRUST
BBH U.S. Treasury Money Fund
BBH Money Market Fund
BBH Tax Exempt Money Fund
(Exact name of Registrant as specified in charter)
140 Broadway,
New York, NY 10005
(Address of principal executive offices)
Corporation Services Company,
2711 Centerville Road, Suite 400, Wilmington,
DE, 19808
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 593-7237
Date of fiscal year end: JUNE 30
Date of reporting period: JUNE 30, 2008
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its regulatory,
disclosure review, inspection, and policymaking roles.
A Registrant is required to disclose the information specified by Form
N-CSR, and the Commission will make this information public. A Registrant is not
required to respond to the collection of information contained in Form N-CSR unless
the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. Section 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
BROWN [LOGO]
BROTHERS
HARRIMAN
Annual Report
JUNE 30, 2008
BBH U.S. TREASURY MONEY FUND
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BBH U.S. TREASURY MONEY FUND
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MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
For the period of July 1, 2007 to June 30, 2008, the BBH U.S. Treasury Money
Fund (the "Fund") produced a total return of 2.57%(1). The weighted average
maturity of the Fund during the period varied in a range between 40 and 60 days.
We believe the performance of the Fund was competitive within the industry.
The Fund seeks to achieve as high a level of current income as is consistent
with the preservation of capital and the maintenance of liquidity. The Fund does
so by investing solely in U.S. Treasury securities.
During the reporting period, the money markets faced an unprecedented credit
environment. A common measure of systematic risk within the money markets, the
Treasury-Eurodollar (TED) spread, reached peak levels not seen in recent
history. One of the largest segments of the money-markets, asset-backed
commercial paper ("ABCP"), experienced a period of near-zero liquidity. Many
ABCP programs were forced back on to the balance sheets of their sponsoring
banks and outstanding issuance was drastically reduced from $1.2 trillion to
$750 billion. The catalyst for this market turmoil was the poor performance of
mortgage-backed product, and in particular the high degree of leverage applied
to it within many money market eligible structures. Difficulties in the money
markets quickly spread to the broader credit markets compelling the Federal
Reserve to take unprecedented action. During the period, the Fed cut its target
interest rate by 325 basis points to 2%. As a response to the collapse of Bear
Stearns in March, the Fed opened the discount window to broker/dealer firms and
created two auction facilities to provide much needed liquidity to the financial
system. These actions worked to ease some of the distress in the credit markets;
however, risk premiums remain at abnormally high levels.
As conditions deteriorated in the money-markets, government guaranteed
securities became highly sought after by investors. This led to an increase in
demand for U.S. Treasury bills, placing downward pressure on yields and creating
a relatively flat yield curve. As a result, the investment team purchased one to
three month U.S. Treasury bills in order to maintain liquidity and maximize
yield.
----------
(1) Performance data quoted represents no guarantee of future results.
Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Mutual Fund performance changes over time and current
performance may be lower or higher than what is stated. For current to the
most recent month end performance and after tax returns, contact the Fund
at 1-800-625-5759.
2
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BBH U.S. TREASURY MONEY FUND
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
June 30, 2008
To the Trustees of the BBH Trust and Shareholders of
BBH U.S. Treasury Money Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of BBH U.S. Treasury Money Fund (a series of BBH
Trust) (the "Fund") as of June 30, 2008, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2008, by correspondence with the custodian.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
U.S. Treasury Money Fund as of June 30, 2008, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 21, 2008
FINANCIAL STATEMENT JUNE 30, 2008 3
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BBH U.S. TREASURY MONEY FUND
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PORTFOLIO ALLOCATION
June 30, 2008
BREAKDOWN BY SECURITY TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
U.S. Treasury Bills ............................ $ 92,129,716 100.2%
Liabilities in Excess of Other Assets .......... (153,490) (0.2)
------------ -----
NET ASSETS ..................................... $ 91,976,226 100.0%
============ =====
All data as of June 30, 2008. 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.
4
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BBH U.S. TREASURY MONEY FUND
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PORTFOLIO OF INVESTMENTS
June 30, 2008
Principal
Amount Value
------------ ------------
U.S. TREASURY BILLS (a) (100.2%)
$ 7,000,000 due 07/03/08, 0.760% ............................ $ 6,999,705
20,440,000 due 07/10/08, 1.315% ............................ 20,433,295
39,180,000 due 07/17/08, 1.638% ............................ 39,151,527
6,870,000 due 08/07/08, 1.641% ............................ 6,858,457
8,900,000 due 08/14/08, 1.493% ............................ 8,883,792
9,875,000 due 11/20/08, 1.867% ............................ 9,802,940
------------
Total U.S. Treasury Bills ....................... 92,129,716
------------
TOTAL INVESTMENTS, AT AMORTIZED COST ........... 100.2% $ 92,129,716
LIABILITIES IN EXCESS OF OTHER ASSETS .......... (0.2) (153,490)
------------ ------------
NET ASSETS ..................................... 100.0% $ 91,976,226
============ ============
----------
(a) Rates shown are yields to maturity at time of purchase.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 5
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BBH U.S. TREASURY MONEY FUND
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STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008
ASSETS:
Investments, at amortized cost .............................. $92,129,716
-----------
Total Assets ............................................. 92,129,716
-----------
LIABILITIES:
Due to Brown Brothers Harriman & Co. ........................ 50,621
Payables for:
Investment advisory and administrative fees .............. 24,936
Professional fees ........................................ 22,544
Shareholder servicing fees ............................... 21,843
Custody and accounting fees .............................. 10,233
State registration fees .................................. 4,293
Dividends declared ....................................... 1,163
Board of Trustees' fees .................................. 294
Accrued expenses and other liabilities ...................... 17,563
-----------
Total Liabilities ........................................ 153,490
-----------
NET ASSETS, for 91,976,358 fund shares outstanding ............. $91,976,226
===========
Net Assets Consist of:
Paid-in capital ............................................. $91,976,226
-----------
Net Assets ..................................................... $91,976,226
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE ................... $1.00
=====
The accompanying notes are an integral part of these financial statements.
6
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BBH U.S. TREASURY MONEY FUND
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STATEMENT OF OPERATIONS
For the year ended June 30, 2008
NET INVESTMENT INCOME:
Income:
Investment income ..................................... $ 2,269,632
-----------
Expenses:
Investment advisory and administrative fees ........... 182,880
Shareholder servicing fees ............................ 164,592
State registration fees ............................... 34,132
Custody and accounting fees ........................... 25,978
Professional fees ..................................... 20,931
Board of Trustees' fees ............................... 16,013
Miscellaneous expenses ................................ 48,883
-----------
Total Expenses ...................................... 493,409
Expense offset arrangement .......................... (4,480)
-----------
Net Expenses ........................................ 488,929
-----------
Net Investment Income .................................... $ 1,780,703
-----------
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 7
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BBH U.S. TREASURY MONEY FUND
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STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the years ended June 30,
--------------------------------
2008 2007
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ............................................... $ 1,780,703 $ 3,842,702
Dividends declared from net investment income .......................... (1,780,703) (3,842,702)
------------- -------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold .................................................. 220,163,437 169,360,686
Fund shares issued in reinvestment of dividends ................... 514 1,684,859
Fund shares repurchased ........................................... (203,427,489) (207,159,757)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions ................................. 16,736,462 (36,114,212)
------------- -------------
NET ASSETS:
Beginning of year ...................................................... 75,239,764 111,353,976
------------- -------------
End of Year ............................................................ $ 91,976,226 $ 75,239,764
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
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BBH U.S. TREASURY MONEY FUND
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FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each year
<TABLE>
<CAPTION>
For the years ended June 30,
-----------------------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ...................... 0.02 0.04 0.03 0.01 0.00(1)
Dividends to shareholders from net
investment income .......................... (0.02) (0.04) (0.03) (0.01) (0.00)(1)
------- ------- ------- ------- -------
Net asset value, end of year .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return .................................. 2.57% 4.45% 3.35% 1.41% 0.40%
Ratios/Supplemental data:
Net assets, end of year (in millions) ...... $ 92 $ 75 $ 111 $ 141 $ 117
Net expenses paid by Fund .................. 0.67% 0.62% 0.59% 0.56% 0.59%
Expense offset arrangement ................. 0.00%(2) 0.01% 0.00%(2) 0.01% 0.00%(2)
------- ------- ------- ------- -------
Total expenses .......................... 0.67% 0.63% 0.59% 0.57% 0.59%
======= ======= ======= ======= =======
Ratio of net investment income to
average net assets ...................... 2.43% 4.36% 3.25% 1.49% 0.39%
</TABLE>
----------
(1) Less than $0.01 per share.
(2) Less than 0.01%.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 9
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BBH U.S. TREASURY MONEY FUND
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NOTES TO FINANCIAL STATEMENTS
June 30, 2008
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 and re-organized as a
Delaware statutory trust on June 12, 2007. 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 without a par value. At June 30, 2008, there were
seven 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. Investment Transactions 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 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
substantially all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required. At June
30, 2008, 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 to Shareholders. Dividends from net
investment income are declared daily and paid monthly to
shareholders. The Fund declared dividends in the amounts of
$1,780,703 and $3,842,702 for the years ended June 30, 2008 and June
30, 2007, respectively. The tax character of the dividends declared
in both years was 100% ordinary income.
10
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BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
E. Accounting Developments. In June 2006, the Fund adopted FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
("FIN 48"). FIN 48 provides guidance for how uncertain tax positions
should be recognized, measured, presented and disclosed in the
financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the
current year. The adoption of FIN 48 had no impact on the operations
of the Fund for the period ended June 30, 2008.
In September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective
for fiscal years beginning after November 15, 2007. SFAS 157 defines
fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is
currently evaluating the implication of SFAS 157. At this time its
impact on the Fund's financial statements has not yet been
determined.
In March 2008, Statement of Financial Accounting Standards No. 161,
Disclosures about Derivative Instruments and Hedging Activities
(SFAS 161), was issued and is effective for fiscal years beginning
after November 15, 2008. SFAS 161 requires enhanced disclosures to
provide information about the reasons the Fund invests in derivative
instruments, the accounting treatment and the effect derivatives
have on financial performance. Management is currently evaluating
the impact the adoption of SFAS 161 will have on the Fund's
financial statement disclosures.
2. Transactions with Affiliates.
Investment Advisory and Administrative Fees. Effective June 12, 2007,
under a combined Investment Advisory and Administrative Services Agreement
("Agreement") with the Trust, a separately identifiable department within
Brown Brothers Harriman & Co. ("BBH") provides investment advice, and
portfolio management and administrative services to the Fund. BBH receives
a combined fee from the Fund for investment advisory and administrative
services calculated daily and paid monthly at an annual rate equivalent to
0.25% of the fund's average daily net assets. Prior to June 12, 2007,
under a separate agreement that covered only investment advisory fees, BBH
received a fee from the Fund calculated daily and paid monthly at an
annual rate of 0.15% of the Fund's average daily net assets. Brown
Brothers Harriman Trust Company, LLC, the Fund's administrator, under a
separate agreement that covered only administrative services, received 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. BBH has a
sub-administration services agreement with Federated Services Company
("FSC") for which FSC receives compensation paid by BBH. For the year
ended June 30, 2008, the Fund incurred $182,880 for investment advisory
and administrative services.
FINANCIAL STATEMENT JUNE 30, 2008 11
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BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
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 of 0.225% of the Fund's average
daily net assets. For the year ended June 30, 2008, the Fund incurred
$164,592 for shareholder servicing services.
Custody and Accounting Fees. BBH acts as a custodian and shall receive a
custody and accounting fee from the Fund calculated daily and paid
monthly. The custody fee is a transaction based fee with an annual minimum
of $20,000, and the accounting fee is calculated at 0.01% per annum on the
first $1 billion of net assets and 0.005% per annum on all net assets over
$1 billion. For the year ended June 30, 2008, the Fund incurred $25,978
for custody and accounting services. These fees were reduced by $4,480 as
a result of an expense offset arrangement with the Fund's custodian. In
the event that the Fund is overdrawn, under the custody agreement with
BBH, BBH will make overnight loans to the Fund to cover overdrafts.
Pursuant to the agreement, the Fund will be charged interest based on
LIBOR on the day of overdraft plus one percent. The total interest paid by
the Fund for the year ended June 30, 2008 was $8,274.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2008, the Fund incurred $16,013 for these fees.
3. Federal Income Tax Status. The Fund had a net capital loss carryforward of
approximately $4,354 which expires as follows:
Expiration date Amount
--------------- ------
06/30/2015 $4,354
======
The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax deferral
of losses on wash sales.
To the extent that this net capital loss carryover is used to offset
future capital gains, it is probable the gains to offset will not be
distributed to shareholders since any such distributions may be taxable to
shareholders as ordinary income.
12
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BBH U.S. TREASURY MONEY FUND
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DISCLOSURE OF FUND EXPENSES
June 30, 2008
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 (January 1, 2008 to June 30, 2008).
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.
<TABLE>
<CAPTION>
Expenses Paid
Beginning Ending During Period
Account Value Account Value January 1, 2008
January 1, 2008 June 30, 2008 to June 30, 2008(1)
--------------- ------------- -------------------
<S> <C> <C> <C>
Actual...................... $1,000 $1,008.00 $3.35
Hypothetical(2)............. $1,000 $1,021.53 $3.37
</TABLE>
----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.67%,
multiplied by the average account value over the period, multiplied by
182/366 (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.
FINANCIAL STATEMENT JUNE 30, 2008 13
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BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION
June 30, 2008
Approval of Investment Advisory/Administrative Services Agreement
At a meeting held on December 11, 2006, the Board of Trustees (the "Board") of
the Trust and the Corporation unanimously approved a new Combined Investment
Advisory/Administrative Services Agreement ("Combined Agreement"). The Board
determined that the terms of the Combined Agreement will be substantially
identical to those of the current advisory and administration agreements of the
Funds, noting that the most significant difference in the Combined Agreement is
a single fee for both investment advisory and administrative services. The
following is a summary of the factors the Board took into consideration in
making its determination to approve the new Combined Agreement.
Nature, Extent and Quality of Services Provided by Brown Brothers Harriman & Co.
("BBH")
The Board noted that, under the Combined Agreement in respect of each Fund, BBH,
subject to the supervision of the Board, will be responsible for providing a
continuous investment program and making purchases and sales of portfolio
securities consistent with the Funds' investment objective and policies. Under
the Combined Agreement, BBH also provides administrative services to each Fund.
The Board considered the scope and quality of services to be provided by BBH
under the Combined Agreement and noted that the scope of services provided had
expanded over time, primarily, as a result of regulatory developments. The Board
noted that, for example, BBH is responsible for maintaining and monitoring its
own and, to varying degrees, the Funds' compliance program, and these compliance
programs had recently been refined and enhanced in light of new regulatory
requirements. The Board considered the quality of the investment research and
administrative capabilities of BBH and the other resources it has dedicated to
performing services for the Funds. The Board concluded that, overall, they were
satisfied with the nature, extent and quality of services expected to be
provided to each of the Funds under the Combined Agreement.
Costs of Services Provided and Profitability to BBH
At the request of the Board, BBH provided information concerning the
profitability of BBH's current investment company advisory and other fees. The
Board also reviewed BBH's profitability data for each Fund, which also included
the effect of revenue generated by the shareholder servicing, administration,
custody and other fees paid by the Fund. The Board discussed the difficulty of
making comparisons of profitability because comparative information is not
generally publicly available and is affected by numerous factors, including the
structure of the service provider, the types of funds it manages and
administers, its business mix, numerous assumptions regarding allocations and
the entity's capital structure and cost of capital. In considering profitability
information, the Board considered the effect of fall-out benefits on BBH's
expenses, as well as the "revenue sharing" arrangements BBH has entered into
with certain entities that distribute shares of the Funds. The Board focused on
profitability of BBH's relationships with the Funds before taxes and
distribution expenses. The Board concluded that it was satisfied that BBH's
level of profitability from its relationship with each Fund was not excessive.
14
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BBH U.S. TREASURY MONEY FUND
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DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
Fall-Out Benefits
The Board considered that BBH does not allocate the Funds' portfolio
transactions for third party research, although it did benefit from proprietary
research received from brokers that execute the Funds' purchases and sales of
securities. The Board recognized that the aggregate amount of commissions
generated by Fund transactions was unlikely to result in the Funds receiving
from full service broker dealers substantial discounts on commission rates. The
Board received and reviewed information concerning BBH's policies with respect
to allocating portfolio brokerage.
The Board also considered that BBH receives shareholder servicing fees from
certain funds, and is the Funds' administrator, custodian and securities lending
agent. The Board noted that BBH retained no portion of the 12b-1 fees paid by
any Fund that operated with a Rule 12b-1 plan. The Board recognized that BBH's
profitability would be somewhat lower if it did not receive proprietary research
for commissions or, if it did not receive the other benefits described above.
The Board recognized that most Fund shareholders were also BBH clients, and that
substantial assets are invested in the Funds as a result of an overall
investment management program for the shareholder. The Board noted that the
Funds also derive reputational and other benefits from their association with
BBH and their use of the BBH name, which is licensed to the Funds by BBH. Thus,
the Board did not believe that BBH revenues associated with its clients should
be fairly regarded as "fallout" benefit from the Funds.
Economies of Scale
The Board noted that the Funds' combined fee schedules, other than the fee
schedule for BBH Money Market Fund, do not contain breakpoints. As a result, if
assets increase, the fee rates would not be reduced for these Funds on the
incremental assets. With respect to the BBH Money Market Fund, the breakpoint
will be reviewed every three (3) years by the Board, and may be adjusted upwards
to take into account the effects of inflation or such other basis as may be
appropriate, subject to the approval of shareholders to the extent required by
the 1940 Act.
There may be other economies of scale because many expenses did not rise (and
fall) proportionally to increases (and decreases) in total net assets. The Board
noted that BBH had priced its services in recognition of the fact that it was
largely its own clients who were shareholders and, accordingly, sought to assure
that the cost of these services and total expenses for each Fund were fair and
reasonable. In addition, the Board noted that over the years BBH had supported
certain Funds through fee waivers and expense reimbursements. Based on
information they had been provided over many years, the Board observed that in
the mutual fund industry as a whole, as well as among funds similar to the
Funds, there
FINANCIAL STATEMENT JUNE 30, 2008 15
<PAGE>
BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
appeared to be no uniformity or pattern in the fees and asset levels at which
breakpoints (if any) apply. In light of the Funds' current size and expense
structure, the Board concluded that it was unnecessary at this time to consider
breakpoints with respect to the Funds, other than for the BBH Money Market Fund.
Investment Results
The Board considered the investment results of each of the Funds as compared to
investment companies with its peers and with one or more selected securities
indices. In addition to the information received by the Board for the meeting
held on December 11, 2006, the Board received detailed performance information
for each Fund at each regular Board meeting during the year. At the meeting held
on October 2, 2006, the Board reviewed information showing performance of each
Fund compared to its peers over the prior 1-, 3-, and 5- year periods and
compared the performance information to one or more securities indices over
comparable periods.
Combined Fee Rate
The Board considered the fee rate to be paid by each Fund to BBH. The Board
recognized that it is difficult to make comparisons of these fee rates, and the
combined advisory and administration fees, because there are variations in the
services that are included in the fees paid by other funds.
The Board considered the depth and range of services provided under the Combined
Agreement. For example, in addition to a continuous investment program, BBH
provides, among other things, officers (including the Funds' Chief Compliance
Officer and officers to provide required certifications) and administrative
services, such as shareholder communications, and tax compliance, with the
attendant costs and exposure to liability. BBH also coordinates the provision of
services to the Funds by nonaffiliated service providers.
The following factors specific to BBH U.S. Treasury Money Fund also were noted
and considered by the Board in deciding to approve the Combined Agreement:
The Board considered the 1-, 3- and 5-year annualized total returns of the BBH
U.S. Treasury Money Fund versus the iMoneyNet (Treasury Retail). The Board noted
that the Fund outperformed or performed in line with that average over all
relevant periods. Moreover, the Board noted that it believes to have been
appropriately advised by BBH about its duration and average weighted maturity
decisions during the relevant periods and were satisfied overall with the
competitiveness of the performance. The Board also noted with favor that the
expense ratio was substantially lower than that of the average. The Board also
noted that the BBH U.S. Treasury Money Fund had successfully maintained a stable
net asset value of one dollar at all times. Taking into account these
comparisons and the other factors considered, the Trustees concluded that the
BBH U.S. Treasury Money Fund's investment results over time and its total
expense ratio had been satisfactory.
16
<PAGE>
BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
Conflicts of Interest
As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a Fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other. For example, it is possible that the various accounts
managed could have different investment strategies that, at times, might
conflict with one another to the possible detriment of the Fund. Alternatively,
to the extent that the same investment opportunities might be desirable for more
than one account, possible conflicts could arise in determining how to allocate
them. Other potential conflicts might include conflicts created by specific
portfolio manager compensation arrangements, and conflicts relating to selection
of brokers or dealers to execute Fund portfolio trades and/or specific uses of
commissions from Fund portfolio trades (for example, research, or "soft
dollars").
BBH has adopted and implemented policies and procedures, including brokerage and
trade allocation policies and procedures, which it believes address the
conflicts associated with managing multiple accounts for multiple clients. In
addition, BBH monitors a variety of areas, including compliance with account
investment guidelines, the inclusion only of securities approved for purchase by
the BBH's Fixed Income Credit Committee, and compliance with the BBH's Code of
Ethics. Finally, BBH has structured the portfolio managers' compensation in a
manner, and the Funds have adopted policies and procedures, reasonably designed
to safeguard a Fund from being negatively affected as a result of any such
potential conflicts.
FINANCIAL STATEMENT JUNE 30, 2008 17
<PAGE>
BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
ADDITIONAL FEDERAL TAX INFORMATION
June 30, 2008
In January 2009, the Fund will report on Form 1099 the tax status of all
distributions made during the calendar year 2008. Shareholders should use the
information on Form 1099 for their income tax returns.
18
<PAGE>
TRUSTEES AND OFFICERS OF BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
(unaudited)
Information pertaining to the Trustees of the BBH Trust (the "Trust") and
executive officers of the Trust is set forth below. Part B to the Registration
Statement of the BBH U.S. Treasury Money Fund includes additional information
about the Fund's Trustees and is available upon request without charge by
contacting the Fund at 1-800-625-5759.
<TABLE>
<CAPTION>
Number of
Term of Funds in
Office and Fund Other
Position(s) Length Complex Directorships
Name, Birth Date Held with of Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joseph V. Shields Jr. Chairman of Since 2007 Managing Director, Chairman and 7 None
Birth Date: the Board Chief Executive Officer of
March 17, 1938 and Trustee Shields & Company (member of
Shields & Company New York Stock Exchange);
140 Broadway Chairman of Capital Management
New York, NY 10005 Associates, Inc. (registered
investment adviser); Director
of Flower Foods, Inc. (New York
Stock Exchange listed company).
David P. Feldman Trustee Since 2007 Director of Jeffrey Co. (1992 7 Director of
Birth Date: to present); Director of QMED Dreyfus
November 16, 1939 (1999 to May 2007). Mutual Funds
c/o BBH & Co. (59 Funds)
140 Broadway
New York, NY 10005
Alan G. Lowy Trustee Since 2007 Private Investor. 7 None
Birth Date:
April 17, 1939
4111 Clear
Valley Drive
Encino, CA 91436
Arthur D. Miltenberger Trustee Since 2007 Retired; Trustee, R.K. Mellon 7 None
Birth Date: Family Trust (1981 to June
November 8, 1938 2003); Director of
503 Darlington Road Aerostructures Corporation
Ligonier, PA 15658 (aircraft manufacturer) (1996
to July 2003).
Samuel F. Pryor, IV Trustee Since 2007 Private Investor. 7 None
Birth Date:
June 12, 1955
130 East 67th Street
New York, NY 10021
</TABLE>
FINANCIAL STATEMENT JUNE 30, 2008 19
<PAGE>
TRUSTEES AND OFFICERS OF BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Number of
Term of Funds in
Office and Fund Other
Position(s) Length Complex Directorships
Name, Birth Date Held with of Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
H. Whitney Wagner Trustee Since 2007 President, Clear Brook 7 None
Birth Date: Advisors, a registered
March 3, 1956 investment advisor.
Clear Brook Advisors
75 Rockefeller Plaza,
14th Floor
New York, NY 10019
Officers
John A. Gehret President Since 2008 President and Principal N/A N/A
Birth Date: and Executive Officer of the Trust;
April 11, 1959 Principal Joined Brown Brothers Harriman
140 Broadway Executive & Co. ("BBH & Co.") in 1981 and
New York, NY 10005 Officer has been a Partner of the firm
since 1998.
Charles H. Schreiber Treasurer Since 2007 Treasurer and Principal N/A N/A
Birth Date: and Financial Officer of the Trust;
December 10, 1957 Principal Senior Vice President of BBH &
140 Broadway Financial Co. since September 2001;
New York, NY 10005 Officer Joined BBH & Co. in 1999.
Mark B. Nixon Assistant Since 2007 Assistant Secretary and N/A N/A
Birth Date: Secretary, Assistant Treasurer of the
January 14, 1963 Assistant Trust; Vice President of BBH &
140 Broadway Treasurer Co. (since October 2006);
New York, NY 10005 Accounting Manager, Reserve
Funds (August 2005-September
2006); Assistant Controller,
Reserve Funds (February
2005-August 2005); Private
Consultant (December
2001-February 2005).
Beth Haddock Chief Since 2007 Chief Compliance Officer of the N/A N/A
Birth Date: Compliance Trust (September 2007-present);
December 10, 1965 Officer Chief Compliance Officer for
140 Broadway the FINRA/NYSE and SEC
New York, NY 10005 compliance programs and
Associate Compliance Director
for the global compliance
program (April 2005-present);
Deputy General Counsel of AXA
Advisors/AXA Financial (November
1997-April 2005).
</TABLE>
20
<PAGE>
TRUSTEES AND OFFICERS OF BBH U.S. TREASURY MONEY FUND
--------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Number of
Term of Funds in
Office and Fund Other
Position(s) Length Complex Directorships
Name, Birth Date Held with of Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sue M. Rim-An Anti-Money Since 2008 Anti-Money Laundering Officer, N/A N/A
Birth Date: Laundering Vice President of BBH & Co.
September 10, 1970 Officer (September 2007-present); AML
140 Broadway Officer at UBS Investment Bank
New York, NY 10005 (April 2006-August 2007); AML
Officer & Vice President in
Private Client Services at Bear
Stearns & Co (June 1992-April
2006).
Gail C. Jones Secretary Since 2007 Secretary of the Trust; N/A N/A
Birth Date: Counsel, ReedSmith, LLP (since
October 26, 1953 October 2002); Corporate
1001 Liberty Avenue Counsel (January 1997 to
Pittsburgh, PA September 2002) and Vice
15222-3779 President (January 1999 to
September 2002) of Federated
Services Company.
George M. Polatas Vice Since 2008 Vice President of the Trust N/A N/A
Birth Date: President (since June 2008); Assistant
March 3, 1962 Vice President of Federated
1001 Liberty Avenue, Services Company; Vice
Pittsburgh, PA President of various funds
15222-3779 distributed by Edgewood
Services, Inc (January 1997 to
present).
Theodore J. Boudria Assistant Since 2008 Assistant Treasurer of the N/A N/A
Birth Date: Treasurer Trust; Vice President (since
June 26, 1968 2003); Assistant Vice President
70 Franklin Street (since September 2000); Joined
Boston, MA 02110 BBH & Co. in 1995.
</TABLE>
----------
# Each Trustee of the Trust holds office until he or she attains the age of
70 (72, in the case of Trustees who were elected as such before January 1,
2000), or until he or she sooner dies, resigns or is removed from office
in accordance with the provisions of the Trust's Declaration of Trust. All
officers of the Trust hold office for one year and until their respective
successors are chosen and qualified (subject to the ability of the
Trustees to remove any officer in accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, which has seven series and each is
counted as one "Fund" for purposes of this table.
FINANCIAL STATEMENT JUNE 30, 2008 21
<PAGE>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
To obtain information or make shareholder inquiries:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
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.
The Fund files with the SEC a complete schedule of its portfolio holdings, as of
the close of the first and third quarters of its fiscal year, on "Form N-Q."
Information on Form N-Q is available without charge and upon request by calling
the Funds at the toll-free number listed above. A text only version can be
viewed online or downloaded from the SEC's website at http://www.sec.gov; and
may be reviewed and copied at the SEC's Public Reference Room in Washington, DC
(call 1-800-SEC-0330 for information on the operation of the Public Reference
Room). You may also access this information from the BBH website at BBH.com by
clicking on "BBH Mutual Funds" and selecting "Online Documents/Holdings
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
Annual Report
JUNE 30, 2008
BBH MONEY MARKET FUND
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
For the period of July 1, 2007 to June 30, 2008, the BBH Money Market Fund (the
"Fund") produced a total return of 3.77%(1). We believe the performance of the
Fund was competitive within the industry despite what we believe to be a
conservative portfolio composition and in light of very difficult market
conditions.
The Fund seeks to achieve as high a level of current income as is consistent
with the preservation of capital and the maintenance of liquidity. The Fund does
so by investing primarily in a diversified portfolio of liquid, high-quality
short-term debt securities. To that end, the Fund's investments include
securities issued or guaranteed as to principal and interest by the U.S.
government or its agencies, certificates of deposit and commercial paper issued
by large, well capitalized global banks, commercial paper issued by large credit
worthy U.S. corporations, and repurchase agreements backed by U.S. government
and agency collateral. The Fund did not have any exposure to Structured
Investment Vehicles ("SIVs") during the period and removed asset-backed
commercial paper ("ABCP") from its investment strategy.
During the reporting period, the money markets faced an unprecedented credit
environment. A common measure of systematic risk within the money markets, the
Treasury-Eurodollar (TED) spread, reached peak levels not seen in recent
history. One of the largest segments of the money-markets, ABCP, experienced a
period of near-zero liquidity. Many ABCP programs were forced back on to the
balance sheets of their sponsoring banks and outstanding issuance was
drastically reduced from $1.2 trillion to $750 billion. The catalyst for this
market turmoil was the poor performance of mortgage-backed product, and in
particular the high degree of leverage applied to it within many money market
eligible structures. Difficulties in the money markets quickly spread to the
broader credit markets compelling the Federal Reserve to take unprecedented
action. During the period, the Fed cut its target interest rate by 325 basis
points to 2%. As a response to the collapse of Bear Stearns in March, the Fed
opened the discount window to broker/dealer firms and created two auction
facilities to provide much needed liquidity to the financial system. These
actions worked to ease some of the distress in the credit markets; however, risk
premiums remain at abnormally high levels.
Throughout this difficult environment, the investment team for the BBH Money
Market Fund maintained what it believed to be a conservative investment
strategy, which enabled the Fund to largely avoid some of the more distressed
areas of the markets including SIVs and ABCP. At the onset of the credit crisis,
the Fund had only a modest position to short-maturity ABCP. Brown Brothers
Harriman & Co. continues to perform its own rigorous credit assessment of all
securities purchased for the Fund and does not rely on the rating agencies to
determine credit quality. As a result, the investment team has been able to
deliver a consistently competitive return and ample liquidity even with the
recent adverse conditions present in the money-markets.
----------
(1) Performance data quoted represents no guarantee of future results.
Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Mutual Fund performance changes over time and current
performance may be lower or higher than what is stated. For current to the
most recent month end performance and after tax returns, contact the Fund
at 1-800-625-5759.
2
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
June 30, 2008
To the Trustees of the BBH Trust and Shareholders of
BBH Money Market Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of BBH Money Market Fund (a series of BBH Trust)
(the "Fund") as of June 30, 2008, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2008, by correspondence with the custodian.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
Money Market Fund as of June 30, 2008, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 21, 2008
FINANCIAL STATEMENT JUNE 30, 2008 3
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
June 30, 2008
BREAKDOWN BY SECURITY TYPE
Percent of
U.S. $ Value Net Assets
-------------- ----------
Certificates of Deposit ........................ $ 175,137,991 8.1%
Commercial Paper ............................... 1,125,842,819 51.8
Corporate Bonds ................................ 253,531,649 11.7
Municipal Bonds ................................ 174,745,000 8.0
Mutual Fund .................................... 57,730,000 2.6
U.S. Government Agency Obligations ............. 57,875,720 2.7
Repurchase Agreements .......................... 325,000,000 14.9
Other Assets in Excess of Liabilities .......... 4,034,527 0.2
-------------- -----
NET ASSETS ..................................... $2,173,897,706 100.0%
============== =====
All data as of June 30, 2008. 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.
4
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- --------------
<C> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT (8.1%)
$21,800,000 Banco Bilbao Vizcaya Argentaria.................................. 09/12/08 2.780% $ 21,800,439
18,800,000 Banco Santander, New York........................................ 08/26/08 3.000 18,801,441
8,600,000 Bank of Montreal................................................. 07/17/08 3.740 8,602,767
12,800,000 Bank of Montreal(1).............................................. 07/28/08 2.673 12,800,304
12,800,000 Bank of Montreal(1).............................................. 07/31/08 2.989 12,800,220
21,400,000 Bank of Tokyo-Mitsubishi UFJ..................................... 09/08/08 2.670 21,400,407
10,300,000 BNP Paribas(1)................................................... 07/03/08 2.398 10,299,978
17,100,000 Calyon, New York................................................. 07/14/08 4.030 17,106,802
21,400,000 Depfa Bank, Plc.................................................. 07/28/08 2.520 21,400,000
8,600,000 Royal Bank of Canada............................................. 02/02/09 5.290 8,725,598
21,400,000 Toronto Dominion Bank............................................ 07/07/08 2.900 21,400,035
--------------
Total Certificates of Deposit.................................... 175,137,991
--------------
COMMERCIAL PAPER (51.8%)
15,650,000 Archer Daniels Midland Co........................................ 07/17/08 2.520 15,632,611
19,300,000 Archer Daniels Midland Co........................................ 07/22/08 2.060 19,276,920
8,600,000 Archer Daniels Midland Co........................................ 08/05/08 2.266 8,581,187
33,286,000 Ascension Health................................................. 07/23/08 2.370 33,237,892
25,000,000 Baker Hughes, Inc................................................ 07/01/08 2.500 25,000,000
4,300,000 Bank of America Corp............................................. 07/01/08 2.785 4,300,000
26,955,000 BMW US Capital LLC............................................... 07/01/08 2.350 26,955,000
2,600,000 Brown University................................................. 08/06/08 2.442 2,593,760
19,500,000 Brown University................................................. 08/12/08 2.379 19,446,082
8,600,000 Brown-Forman Beverages, Europe, Ltd.............................. 09/08/08 2.293 8,562,418
24,100,000 Catholic Health Initiative....................................... 08/20/08 2.600 24,100,000
14,500,000 CBA (Delaware) Finance........................................... 07/11/08 2.502 14,489,931
19,917,000 City of Chicago, IIIinois........................................ 02/02/09 2.999 19,570,444
21,400,000 Coca-Cola Co..................................................... 08/06/08 2.148 21,354,204
36,080,000 Columbia University.............................................. 07/01/08 2.254 36,080,000
25,000,000 Commerzbank US Finance........................................... 07/01/08 2.640 25,000,000
17,100,000 ConocoPhillips Co................................................ 07/02/08 2.053 17,099,026
15,000,000 Cornell University............................................... 07/17/08 2.461 14,983,667
21,400,000 Danske Corp...................................................... 07/02/08 2.485 21,398,526
12,000,000 Danske Corp...................................................... 07/03/08 2.405 11,998,400
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 5
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- --------------
<C> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
$ 6,100,000 De Kalb County, Georgia Development
Authority Revenue.............................................. 07/23/08 2.500% $ 6,100,000
9,148,000 Duke University.................................................. 08/06/08 2.409 9,126,043
13,450,000 General Electric Capital Corp.................................... 07/14/08 2.519 13,437,858
21,400,000 IBM Corp......................................................... 07/21/08 2.115 21,374,914
21,150,000 IBM Corp......................................................... 08/01/08 2.206 21,109,932
12,800,000 ING (US) Funding LLC............................................. 07/17/08 2.521 12,785,721
8,600,000 ING (US) Funding LLC............................................. 08/14/08 2.577 8,573,092
25,000,000 International Lease Finance Corp................................. 07/01/08 2.651 25,000,000
21,500,000 Johns Hopkins University......................................... 07/22/08 2.600 21,500,000
10,300,000 Johns Hopkins University......................................... 07/24/08 2.500 10,300,000
21,400,000 Koch Resources LLC............................................... 07/16/08 2.214 21,380,294
25,000,000 Leggett & Platt, Inc............................................. 07/01/08 2.300 25,000,000
21,400,000 Leggett & Platt, Inc............................................. 07/02/08 2.123 21,398,740
34,300,000 Los Angeles Department of Airports............................... 07/03/08 2.408 34,295,484
12,800,000 State of Michigan................................................ 10/28/08 4.900 12,800,000
25,000,000 National Rural Utilities Cooperative
Finance Corp. ................................................. 07/11/08 2.302 24,984,028
25,680,000 Nebraska Public Power Authority.................................. 07/01/08 2.387 25,680,000
25,000,000 Nestle Capital Corp.............................................. 07/01/08 2.300 25,000,000
21,400,000 Nestle Capital Corp.............................................. 07/24/08 2.147 21,370,741
30,805,000 New York State Power Authority................................... 07/22/08 2.599 30,759,178
21,400,000 State of North Carolina.......................................... 07/22/08 2.350 21,400,000
12,800,000 Pepsi Bottling Group, Inc........................................ 07/01/08 2.152 12,800,000
21,400,000 Pfizer, Inc...................................................... 07/18/08 2.126 21,378,576
25,000,000 Rabobank USA Financial Corp...................................... 07/01/08 2.240 25,000,000
12,800,000 Rabobank USA Financial Corp...................................... 07/07/08 2.355 12,794,987
9,800,000 Rabobank USA Financial Corp...................................... 07/18/08 2.355 9,789,125
4,575,000 Rights of University of Michigan................................. 09/02/08 2.580 4,575,000
50,000,000 Rockwell Automation.............................................. 07/01/08 2.250 50,000,000
11,600,000 Rutgers, State University of New Jersey.......................... 07/16/08 2.400 11,600,000
14,000,000 Southern Company Funding......................................... 07/02/08 2.222 13,999,137
9,300,000 Stanley Works.................................................... 07/10/08 2.107 9,295,118
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- --------------
<C> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
$12,800,000 Stanley Works.................................................... 07/29/08 2.126% $ 12,778,894
1,700,000 Tennessee State School Bond...................................... 07/24/08 2.400 1,700,000
13,388,000 Tennessee State School Bond...................................... 07/24/08 2.400 13,388,000
25,937,000 Tennessee State School Bond...................................... 08/20/08 2.650 25,937,000
25,000,000 Trinity Health Corp.............................................. 08/04/08 2.406 24,943,333
21,400,000 UBS Finance Delaware LLC......................................... 07/07/08 2.945 21,389,603
6,708,000 University of Texas System Board of Regents...................... 07/22/08 2.550 6,708,000
26,260,000 Walnut Energy Center Authority................................... 07/17/08 2.624 26,229,953
38,500,000 Yale University.................................................. 07/01/08 2.254 38,500,000
--------------
Total Commercial Paper........................................... 1,125,842,819
--------------
CORPORATE BONDS (11.7%)
10,700,000 Associates Corp. of North America................................ 11/01/08 6.250 10,747,493
8,620,000 Associates Corp. of North America................................ 11/15/08 6.875 8,731,402
8,000,000 Bank of America Corp............................................. 02/15/09 5.875 8,119,416
21,400,000 BellSouth Corp.(1)............................................... 08/15/08 2.776 21,401,564
5,350,000 Bristol-Myers Squibb Co.......................................... 08/15/08 4.000 5,355,725
4,300,000 Caterpillar Financial Services Corp.............................. 07/15/08 2.700 4,299,302
6,650,000 Caterpillar Financial Services Corp.............................. 08/15/08 3.700 6,654,411
5,100,000 Citicorp......................................................... 11/15/08 6.375 5,148,036
3,445,000 ConocoPhillips Co................................................ 03/30/09 6.375 3,532,346
4,300,000 Credit Suisse USA, Inc........................................... 01/15/09 3.875 4,321,177
3,900,000 Fleet National Bank.............................................. 01/15/09 5.750 3,955,151
2,100,000 General Electric Capital Corp.(1)................................ 07/22/08 2.551 2,099,704
3,250,000 General Electric Capital Corp.(1)................................ 07/28/08 2.907 3,249,758
1,447,000 General Electric Capital Corp.................................... 10/15/08 3.600 1,442,710
3,400,000 Goldman Sachs Group, Inc.(1)..................................... 09/22/08 2.891 3,394,665
2,600,000 Goldman Sachs Group, Inc.(1)..................................... 09/23/08 2.841 2,595,570
6,247,000 Goldman Sachs Group, Inc.(1)..................................... 09/24/08 2.882 6,234,570
4,700,000 Hartford Financial Services Group, Inc........................... 08/16/08 5.550 4,712,772
12,000,000 Hartford Financial Services Group, Inc........................... 11/01/08 6.375 12,116,143
4,300,000 HSBC Finance Corp................................................ 12/15/08 4.125 4,297,649
5,850,000 John Deere Capital Corp.(1)...................................... 09/25/08 2.984 5,850,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 7
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- --------------
<C> <C> <C> <C> <C>
CORPORATE BONDS (continued)
$17,100,000 JP Morgan Chase & Co.(1)......................................... 09/22/08 2.851% $ 17,084,392
4,300,000 JP Morgan Chase & Co............................................. 10/15/08 5.750 4,312,724
4,760,000 JP Morgan Chase & Co............................................. 01/15/09 6.000 4,833,614
8,600,000 National Rural Utilities Cooperative
Finance Corp. ................................................. 12/01/08 5.750 8,663,294
17,100,000 National Geographic School Publishing, Inc.(1)................... 07/03/08 2.500 17,100,000
15,800,000 Pioneer Hi-Bred International, Inc............................... 01/15/09 5.750 16,037,121
6,000,000 PNC Bank NA(1)................................................... 07/29/08 2.443 5,990,486
8,600,000 PNC Funding Corp................................................. 02/15/09 6.125 8,740,178
2,100,000 US Bancorp....................................................... 04/28/09 5.300 2,142,362
6,000,000 US Bank NA....................................................... 07/15/08 6.300 6,007,198
21,400,000 Wachovia Bank NA(1).............................................. 07/03/08 2.070 21,376,395
8,600,000 Wachovia Bank NA................................................. 12/01/08 5.800 8,686,365
4,300,000 Wells Fargo & Co.(1)............................................. 07/03/08 2.508 4,297,956
--------------
Total Corporate Bonds............................................ 253,531,649
--------------
MUNICIPAL BONDS(1) (8.0%)
4,700,000 Broward County, Florida, Airport Facility Revenue................ 07/02/08 2.510 4,700,000
12,800,000 Connecticut State Housing Finance Authority...................... 07/03/08 2.750 12,800,000
6,505,000 De Kalb County, Georgia Development Authority Revenue............ 07/02/08 2.400 6,505,000
6,900,000 Greensboro, North Carolina....................................... 07/02/08 2.550 6,900,000
12,800,000 Kansas City, Missouri, Tax Increment
Financing Commission Revenue................................... 07/02/08 2.780 12,800,000
12,800,000 Michigan Municipal Bond Authority................................ 07/07/08 3.000 12,800,000
6,200,000 State of Mississippi ............................................ 07/02/08 2.510 6,200,000
28,800,000 New York City Transitional Finance Authority..................... 07/02/08 2.750 28,800,000
12,800,000 New York, New York............................................... 07/07/08 2.600 12,800,000
15,135,000 Portland, Maine.................................................. 07/02/08 2.600 15,135,000
1,635,000 Private Colleges & Universities Authority........................ 07/02/08 2.400 1,635,000
10,600,000 Savannah College of Art & Design................................. 07/03/08 2.500 10,600,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- --------------
<C> <C> <C> <C> <C>
MUNICIPAL BONDS(1) (continued)
$ 3,670,000 Seattle, Washington.............................................. 07/02/08 2.750% $ 3,670,000
30,800,000 State of Texas................................................... 07/02/08 2.750 30,800,000
8,600,000 Virginia State Housing Development Authority..................... 07/02/08 2.750 8,600,000
--------------
Total Municipal Bonds............................................ 174,745,000
--------------
MUTUAL FUND (2.6%)
57,730,000 Reserve U.S. Government Fund 12.................................. 57,730,000
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.7%)
4,300,000 Federal Farm Credit Bank......................................... 06/15/09 3.950 4,361,083
4,300,000 Federal Home Loan Bank........................................... 11/21/08 4.625 4,336,028
7,940,000 Federal Home Loan Bank........................................... 04/21/09 2.350 7,928,808
8,600,000 Federal Home Loan Bank........................................... 05/07/09 2.750 8,600,000
8,600,000 Federal Home Loan Bank........................................... 05/13/09 2.375 8,586,524
11,225,000 FHLMC............................................................ 08/14/08 5.125 11,263,277
12,800,000 FHLMC............................................................ 05/18/09 2.500 12,800,000
--------------
Total U.S. Government Agency Obligations......................... 57,875,720
--------------
REPURCHASE AGREEMENTS (14.9%)
75,000,000 BNP Paribas (Agreement dated
06/30/08 collateralized by FNMA
5.500%-6.000%, due 12/01/36-02/01/38,
value $76,500,000)............................................... 07/01/08 2.400 75,000,000
100,000,000 Deutsche Bank (Agreement dated
06/30/08 collateralized by FMAC
4.500%-7.000%, due 11/01/13-05/01/38,
value $86,724,101 and FNMA
5.106%-5.755% due 12/01/16-12/01/35,
value $15,275,899)............................................... 07/01/08 2.700 100,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 9
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- --------------
<C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS (continued)
$75,000,000 Royal Bank of Canada (Agreement dated
06/30/08 collateralized by FAMC 4.875%,
due 01/14/11, value $5,627,053; FMAC
4.000%-14.000%, due 01/14/11-06/01/38,
value $18,373,822; FNMA 4.500%-16.000%,
due 02/01/09-02/01/48, value 34,311,800
and GNMA 4.500%-17.000%, due
04/15/09-06/15/38, value $18,187,326)............................ 07/01/08 2.850% $ 75,000,000
75,000,000 Societe Generale (Agreement dated
06/30/08 collateralized by FMAC 6.500%,
due 10/01/37, value $48,324,149; and
FNMA 5.500%, due 03/01/37, value
$28,175,851)..................................................... 07/01/08 2.700 75,000,000
--------------
Total Repurchase Agreements...................................... 325,000,000
--------------
TOTAL INVESTMENTS AT AMORTIZED COST............................................................. 99.8% $2,169,863,179
OTHER ASSETS IN EXCESS OF LIABILITIES........................................................... 0.2 4,034,527
----- --------------
NET ASSETS..................................................................................... 100.0% $2,173,897,706
===== ==============
</TABLE>
----------
(1) Variable rate instrument. Interest rates change on specific dates (such as
coupon or interest payment date). The yield shown represents the June 30,
2008 coupon or interest rate.
Abbreviations:
FAMC - Federal Agricultural Mortgage Corporation
FHLMC - Federal Home Loan Mortgage Corporation
FMAC - Financial Markets Association of Canada
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008
ASSETS:
Investments, at amortized cost .......................... $1,844,863,179
Repurchase Agreements ................................... 325,000,000
Cash .................................................... 60,204
Interest and other receivables .......................... 5,396,962
--------------
Total Assets ........................................ 2,175,320,345
--------------
LIABILITIES:
Payables for:
Investment advisory and administrative fees ......... 477,783
Shareholder servicing fees .......................... 296,167
Dividends declared .................................. 158,637
Custody and accounting fees ......................... 138,484
Professional fees ................................... 66,992
State registration fees ............................. 13,414
Board of Trustees' fees ............................. 1,000
Accrued expenses and other liabilities .................. 270,162
--------------
Total Liabilities ................................... 1,422,639
--------------
NET ASSETS .................................................. $2,173,897,706
==============
Net Assets Consist of:
Paid-in capital ......................................... $2,173,897,706
--------------
Net Assets .................................................. $2,173,897,706
==============
NET ASSET VALUE AND OFFERING PRICE PER SHARE
REGULAR SHARES NET ASSET VALUE
($1,408,949,855 / 1,408,948,801 shares outstanding) ..... $1.00
=====
INSTITUTIONAL SHARES NET ASSET VALUE
($764,947,852 / 764,948,222 shares outstanding) ......... $1.00
=====
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 11
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended June 30, 2008
NET INVESTMENT INCOME:
Income:
Investment income .................................. $ 106,047,058
-------------
Expenses:
Investment advisory and administrative fees ........ 5,642,976
Shareholder servicing fees ......................... 3,509,603
Custody and accounting fees ........................ 331,683
Board of Trustees' fees ............................ 169,515
Professional fees .................................. 138,608
State registration fees ............................ 59,691
Miscellaneous expenses ............................. 288,005
-------------
Total Expenses .................................. 10,140,081
Expense offset arrangement ...................... (54,485)
-------------
Net Expenses .................................... 10,085,596
-------------
Net Investment Income .................................. $ 95,961,462
=============
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the years ended June 30,
--------------------------------------
2008 2007
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ........................................................ $ 95,961,462 $ 86,186,394
--------------- ---------------
Dividends and distributions declared:
From net investment income:
Regular shares ............................................................ (50,922,406) (67,612,111)
Institutional shares ...................................................... (45,039,056) (18,574,283)
--------------- ---------------
Total dividends and distributions declared ............................ (95,961,462) (86,186,394)
--------------- ---------------
From Fund Share (Principal) Transactions at Net Asset Value of $1.00 per
share:
Fund shares sold .......................................................... 4,249,639,531 3,932,442,373
Fund shares issued in reinvestment of dividends ........................... 52,591 39,649,577
Fund shares repurchased ................................................... (4,387,608,450) (3,165,839,507)
--------------- ---------------
Net increase (decrease) in net assets resulting
from fund share transactions ........................................ (137,916,328) 806,252,443
--------------- ---------------
NET ASSETS:
Beginning of year ................................................................ 2,311,814,034 1,505,561,591
--------------- ---------------
End of year ...................................................................... $ 2,173,897,706 $ 2,311,814,034
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 13
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a Regular share outstanding throughout
each year
<TABLE>
<CAPTION>
For the years ended June 30,
--------------------------------------------------------------
2008 2007 2006 2005 2004
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ..................... 0.04 0.05 0.04 0.01 0.01
Dividends to shareholders from net
investment income ......................... (0.04) (0.05) (0.04) (0.01) (0.01)
------ ------ ------ ------ ------
Net asset value, end of year .................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return .................................. 3.77% 4.97% 3.76% 1.72% 0.59%
Ratios/ Supplemental data:
Net assets, end of year (in millions) ..... $1,409 $1,172 $1,506 $1,258 $1,375
Ratio of expenses to average net assets ... 0.51% 0.51%(1) 0.53%(1) 0.52%(1) 0.52%(1)
Expense offset arrangement ................ 0.00%(2) -- -- -- --
------ ------ ------ ------ ------
Total Expenses ........................ 0.51% 0.51% 0.53% 0.52% 0.52%
====== ====== ====== ====== ======
Ratio of net investment income to
average net assets .................... 3.63% 4.79%(1) 3.75%(1) 1.70%(1) 0.59%(1)
</TABLE>
----------
(1) Ratios include the Fund's share income, expenses paid by, and the expense
offset arrangement, of the BBH U.S. Money Market Portfolio, which the Fund
invested in through June 12, 2007, as appropriate.
(2) Less than 0.01%.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Selected per share data and ratios for an Institutional share outstanding
throughout the year
<TABLE>
<CAPTION>
For the period from
January 26, 2007
(commencement of
For the year ended operations) through
June 30, 2008 June 30, 2007
------------------ -------------------
<S> <C> <C>
Net asset value, beginning of period ........................................... $ 1.00 $ 1.00
Income from investment operations:
Net investment income ...................................................... 0.04 0.02
Dividends to shareholders from net investment income ........................... (0.04) (0.02)
------ ------
Net asset value, end of period ................................................. $ 1.00 $ 1.00
====== ======
Total return ................................................................... 4.02% 2.21%(1)
Ratios/ Supplemental data:
Net assets, end of period (in millions) .................................... $ 765 $1,140
Ratio of expenses to average net assets .................................... 0.26% 0.26%(2),(3)
Expense offset arrangement ................................................. 0.00%(4) --
------ ------
Total Expenses ......................................................... 0.26% 0.26%
====== ======
Ratio of net investment income to
average net assets ..................................................... 3.86% 5.07%(2),(3)
</TABLE>
----------
(1) Inception to date return.
(2) Ratios include the Fund's share income, expenses paid by, and the expense
offset arrangement, of the BBH U.S. Money Market Portfolio, which the Fund
invested in through June 12, 2007, as appropriate.
(3) Annualized.
(4) Less than 0.01%.
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 15
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
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 and re-organized as a
Delaware statutory trust on June 12, 2007. 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 Fund established a new class of shares designated as
"Institutional Shares". Institutional Shares opened on December 19, 2006
and commenced operations on January 26, 2007. Regular Shares and
Institutional Shares have different operating expenses. At June 30, 2008,
there were seven series of the Trust.
Prior to June 12, 2007 the Fund invested 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. Effective June 12, 2007, the Fund redeemed its
shares of the Portfolio and began investing its assets directly. There
were no changes to the Fund's investment policies and restrictions. The
Fund recorded its share of the Portfolios' income and expenses daily until
the date of the redemption.
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. Investment Transactions 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 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. Repurchase Agreements. The Fund may enter into repurchase agreements
with primary dealers of U.S. Government Obligations as designated by
the Federal Reserve Bank of New York. Repurchase agreements are
transactions in which the Fund buys a security from a dealer or bank
and agrees to sell the security back at a mutually agreed upon time
and price. The repurchase price
16
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
exceeds the sale price, reflecting the Fund's return on the
transaction or effectively the interest rate paid by the dealer to
the Fund. This return is unrelated to the interest rate on the
underlying security. The Fund will enter into repurchase agreements
only with banks and other recognized financial institutions, such as
securities dealers, deemed creditworthy by the Investment Adviser.
The Fund's custodian or sub-custodian will take possession of the
securities subject to repurchase agreements. The Investment Adviser
or sub-custodian will monitor the value of the underlying security
each day to ensure that the value of the security always equals or
exceeds the repurchase price. Repurchase agreements are subject to
credit risks. Information regarding repurchase agreements is
included in the Portfolio of Investments.
D. 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
substantially all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required. At June
30, 2008, the cost of investments for federal income tax purposes
was equal to the amortized cost of investments for financial
statement purposes.
E. Dividends and Distributions to Shareholders. Dividends from net
investment income are declared daily and paid monthly to
shareholders. The Fund declared dividends in the amounts of
$50,922,406 and $45,039,056 to Regular and Institutional
shareholders, respectively, during the year ended June 30, 2008. The
Fund declared dividends in the amount of $67,612,111 and $18,574,283
to Regular and Institutional shareholders during the year ended June
30, 2007. The tax character of the dividends declared in both years
was 100% ordinary income.
The Fund had a net capital loss carryforward of approximately
$39,121 which expires as follows:
Expiration date Amount
--------------- ------
06/30/2016 $39,121
=======
The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to the tax
deferral of losses on wash sales and post-October short term capital
loss deferral.
To the extent that this net capital loss carryover is used to offset
future capital gains, it is probable the gains to offset will not be
distributed to shareholders since any such distributions may be
taxable to shareholders as ordinary income.
FINANCIAL STATEMENT JUNE 30, 2008 17
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
F. Accounting Developments. In June 2006, the Fund adopted FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
("FIN 48"). FIN 48 provides guidance for how uncertain tax positions
should be recognized, measured, presented and disclosed in the
financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the
current year. The adoption of FIN 48 had no impact on the operations
of the Fund for the period ended June 30, 2008.
In September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective
for fiscal years beginning after November 15, 2007. SFAS 157 defines
fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is
currently evaluating the implication of SFAS 157. At this time its
impact on the Fund's financial statements has not yet been
determined.
In March 2008, Statement of Financial Accounting Standards No. 161,
Disclosures about Derivative Instruments and Hedging Activities
(SFAS 161), was issued and is effective for fiscal years beginning
after November 15, 2008. SFAS 161 requires enhanced disclosures to
provide information about the reasons the Fund invests in derivative
instruments, the accounting treatment and the effect derivatives
have on financial performance. Management is currently evaluating
the impact the adoption of SFAS 161 will have on the Fund's
financial statement disclosures.
2. Transactions with Affiliates.
Investment Advisory and Administrative Fees. Effective June 12, 2007,
under a combined Investment Advisory and Administrative Services Agreement
("Agreement") with the Trust, a separately identifiable department within
Brown Brothers Harriman & Co. ("BBH") provides investment advice,
portfolio management and administrative services to the Fund. BBH receives
a combined fee from the Fund for investment advisory and administrative
services calculated daily and paid monthly at an annual rate equivalent to
0.25% on the first $1,000,000,000 of the Fund's average daily net assets
and 0.20% of the Fund's average daily net assets in excess of
$1,000,000,000. Prior to June 12, 2007, under a separate agreement that
covered only investment advisory fees, BBH received a fee from the Fund
calculated daily and paid monthly. This fee was allocated to the Fund from
the Portfolio in which the Fund invested and was calculated at an annual
rate of 0.15% of the Portfolio's average daily net assets. Brown Brothers
Harriman Trust Company, LLC, the Fund's administrator, under a separate
agreement that covered only administrative services, received a fee from
the Fund calculated daily and paid
18
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
monthly at an annual rate equivalent to 0.10% of the Fund's average daily
net assets. BBH has a sub-administration services agreement with Federated
Services Company ("FSC") for which FSC receives compensation paid by BBH.
For the year ended June 30, 2008, the Fund incurred $5,642,976 for
investment advisory and 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 of 0.25% of the Regular shares'
average daily net assets. For the year ended June 30, 2008, the Fund
incurred $3,509,603 for shareholder servicing services.
Custody and Accounting Fees. BBH acts as a custodian and shall receive a
custody and accounting fee from the Fund calculated daily and paid
monthly. The custody fee is a transaction based fee with an annual minimum
of $20,000, and the accounting fee is calculated at 0.01% per annum on the
first $1 billion of net assets and 0.005% per annum on all net assets over
$1 billion. For the year ended June 30, 2008, the Fund incurred $331,683
for custody and accounting services. These fees were reduced by $54,485 as
a result of an expense offset arrangement with the Fund's custodian. In
the event that the Fund is overdrawn, under the custody agreement with
BBH, BBH will make overnight loans to the Fund to cover overdrafts.
Pursuant to the agreement the Fund will be charged interest based on LIBOR
on the day of the overdraft plus one percent. The total interest paid by
the Fund for the year ended June 30, 2008 was $18,236.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2008, the Fund incurred $169,515 for Trustees' fees.
3. Capital Stock. The Trust is permitted to issue an unlimited number of
Regular Shares and Institutional Shares of capital stock, at no par value.
Transactions in shares of capital stock were as follows:
Shares
--------------------------------
For the For the
year ended year ended
June 30, 2008 June 30, 2007
------------- -------------
Regular Shares
Capital stock sold ........................ 2,213,057,812 2,210,338,409
Capital stock issued in connection with
reinvestment of dividends ............. 52,591 31,844,261
Capital stock redeemed .................... (1,976,287,295) (2,575,617,884)
-------------- --------------
Net increase (decrease) ................... 236,823,108 (333,435,214)
============== ==============
FINANCIAL STATEMENT JUNE 30, 2008 19
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
Shares
------------------------------------
For the period from
January 26, 2007
For the (commencement of
year ended operations) to
June 30, 2008 June 30, 2007
--------------- -------------------
Institutional Shares
Capital stock sold ....................... 2,036,581,719 1,722,103,964
Capital stock issued in connection with
reinvestment of dividends ............ -- 7,805,316
Capital stock redeemed ................... (2,411,321,155) (590,221,623)
-------------- --------------
Net increase (decrease) .................. (374,739,436) 1,139,687,657
============== ==============
20
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
June 30, 2008
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 (January 1, 2008 to June 30, 2008).
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.
FINANCIAL STATEMENT JUNE 30, 2008 21
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES (continued)
June 30, 2008
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.
<TABLE>
<CAPTION>
Expenses Paid
Beginning Ending During Period
Account Value Account Value January 1, 2008
January 1, 2008 June 30, 2008 to June 30, 2008(1)
--------------- ------------- -------------------
<S> <C> <C> <C>
Regular Shares
Actual................................. $1,000 $1,013.80 $2.55
Hypothetical(2)........................ $1,000 $1,022.33 $2.56
</TABLE>
<TABLE>
<CAPTION>
Expenses Paid
Beginning Ending During Period
Account Value Account Value January 1, 2008
January 1, 2008 June 30, 2008 to June 30, 2008(1)
--------------- ------------- -------------------
<S> <C> <C> <C>
Institutional Shares
Actual................................. $1,000 $1,015.10 $1.30
Hypothetical(2)........................ $1,000 $1,023.57 $1.31
</TABLE>
----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.51% and
0.26% for Regular and Institutional shares, respectively, multiplied by
182/366 (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 for each class of
shares is subtracted from the assumed return before expenses.
22
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION
June 30, 2008
Approval of Investment Advisory/Administrative Services Agreement
At a meeting held on December 11, 2006, the Board of Trustees (the "Board") of
the Trust unanimously approved a new Combined Investment Advisory/Administrative
Services Agreement ("Combined Agreement"). The Board determined that the terms
of the Combined Agreement will be substantially identical to those of the
current advisory and administration agreements of the Funds, noting that the
most significant difference in the Combined Agreement is a single fee for both
investment advisory and administrative services. The following is a summary of
the factors the Board took into consideration in making its determination to
approve the new Combined Agreement.
Nature, Extent and Quality of Services Provided by Brown Brothers Harriman & Co.
("BBH")
The Board noted that, under the Combined Agreement in respect of each Fund, BBH,
subject to the supervision of the Board, will be responsible for providing a
continuous investment program and making purchases and sales of portfolio
securities consistent with the Funds' investment objective and policies. Under
the Combined Agreement, BBH also provides administrative services to each Fund.
The Board considered the scope and quality of services to be provided by BBH
under the Combined Agreement and noted that the scope of services provided had
expanded over time, primarily, as a result of regulatory developments. The Board
noted that, for example, BBH is responsible for maintaining and monitoring its
own and, to varying degrees, the Funds' compliance program, and these compliance
programs had recently been refined and enhanced in light of new regulatory
requirements. The Board considered the quality of the investment research and
administrative capabilities of BBH and the other resources it has dedicated to
performing services for the Funds. The Board concluded that, overall, they were
satisfied with the nature, extent and quality of services expected to be
provided to each of the Funds under the Combined Agreement.
Costs of Services Provided and Profitability to BBH
At the request of the Board, BBH provided information concerning the
profitability of BBH's current investment company advisory and other fees. The
Board also reviewed BBH's profitability data for each Fund, which also included
the effect of revenue generated by the shareholder servicing, administration,
custody and other fees paid by the Fund. The Board discussed the difficulty of
making comparisons of profitability because comparative information is not
generally publicly available and is affected by numerous factors, including the
structure of the service provider, the types of funds it manages and
administers, its business mix, numerous assumptions regarding allocations and
the entity's capital structure and cost of capital. In considering profitability
information, the Board considered the effect of fall-out benefits on BBH's
expenses, as well as the "revenue sharing" arrangements BBH has entered into
with certain entities that distribute shares of the Funds. The Board focused on
profitability of BBH's relationships with the Funds before taxes and
distribution expenses. The Board concluded that it was satisfied that BBH's
level of profitability from its relationship with each Fund was not excessive.
FINANCIAL STATEMENT JUNE 30, 2008 23
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
Fall-Out Benefits
The Board considered that BBH does not allocate the Funds' portfolio
transactions for third party research, although it did benefit from proprietary
research received from brokers that execute the Funds' purchases and sales of
securities. The Board recognized that the aggregate amount of commissions
generated by Fund transactions was unlikely to result in the Funds receiving
from full service broker dealers substantial discounts on commission rates. The
Board received and reviewed information concerning BBH's policies with respect
to allocating portfolio brokerage.
The Board also considered that BBH receives shareholder servicing fees from
certain funds, and is the Funds' administrator, custodian and securities lending
agent. The Board noted that BBH retained no portion of the 12b-1 fees paid by
any Fund that operated with a Rule 12b-1 plan. The Board recognized that BBH's
profitability would be somewhat lower if it did not receive proprietary research
for commissions or, if it did not receive the other benefits described above.
The Board recognized that most Fund shareholders were also BBH clients, and that
substantial assets are invested in the Funds as a result of an overall
investment management program for the shareholder. The Board noted that the
Funds also derive reputational and other benefits from their association with
BBH and their use of the BBH name, which is licensed to the Funds by BBH. Thus,
the Board did not believe that BBH revenues associated with its clients should
be fairly regarded as "fallout" benefit from the Funds.
Economies of Scale
The Board noted that the Funds' combined fee schedules, other than the fee
schedule for BBH Money Market Fund, do not contain breakpoints. As a result, if
assets increase, the fee rates would not be reduced for these Funds on the
incremental assets. With respect to the BBH Money Market Fund, the breakpoint
will be reviewed every three (3) years by the Board, and may be adjusted upwards
to take into account the effects of inflation or such other basis as may be
appropriate, subject to the approval of shareholders to the extent required by
the 1940 Act.
There may be other economies of scale because many expenses did not rise (and
fall) proportionally to increases (and decreases) in total net assets. The Board
noted that BBH had priced its services in recognition of the fact that it was
largely its own clients who were shareholders and, accordingly, sought to assure
that the cost of these services and total expenses for each Fund were fair and
reasonable. In addition, the Board noted that over the years BBH had supported
certain Funds through fee waivers and expense reimbursements. Based on
information they had been provided over many years, the Board observed that in
the mutual fund industry as a whole, as well as among funds similar to the
Funds, there appeared to be no uniformity or pattern in the fees and asset
levels at which breakpoints (if any) apply. In light of the Funds' current size
and expense structure, the Board concluded that it was unnecessary at this time
to consider breakpoints with respect to the Funds, other than for the BBH Money
Market Fund.
24
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
Investment Results
The Board considered the investment results of each of the Funds as compared to
investment companies with its peers and with one or more selected securities
indices. In addition to the information received by the Board for the meeting
held on December 11, 2006, the Board received detailed performance information
for each Fund at each regular Board meeting during the year. At the meeting held
on October 2, 2006, the Board reviewed information showing performance of each
Fund compared to its peers over the prior 1-, 3-, and 5- year periods and
compared the performance information to one or more securities indices over
comparable periods.
Combined Fee Rate
The Board considered the fee rate to be paid by each Fund to BBH. The Board
recognized that it is difficult to make comparisons of these fee rates, and the
combined advisory and administration fees, because there are variations in the
services that are included in the fees paid by other funds.
The Board considered the depth and range of services provided under the Combined
Agreement. For example, in addition to a continuous investment program, BBH
provides, among other things, officers (including the Funds' Chief Compliance
Officer and officers to provide required certifications) and administrative
services, such as shareholder communications, and tax compliance, with the
attendant costs and exposure to liability. BBH also coordinates the provision of
services to the Funds by nonaffiliated service providers.
The following factors specific to BBH Money Market Fund also were noted and
considered by the Board in deciding to approve the Combined Agreement:
The Board reviewed information showing performance of the BBH Money Market Fund
compared to other funds in the iMoneyNet (1st Tier Retail) and (1st Tier
Institutional). The comparative information showed that the BBH Money Market
Fund had outperformed or performed in line with the averages over all relevant
periods. The Board also viewed with favor that the total expense ratio was
substantially lower than the averages in these categories. The Board also noted
that the BBH Money Market Fund had maintained a stable net asset value of one
dollar at all times. Taking into account these comparisons and the other factors
considered, the Board concluded that the BBH Money Market Fund's investment
results over time and expense ratios had been satisfactory.
Conflicts of Interest
As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a Fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other. For example, it is possible that the various accounts
managed could have different investment strategies that, at times, might
conflict with one another to the
FINANCIAL STATEMENT JUNE 30, 2008 25
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
possible detriment of the Fund. Alternatively, to the extent that the same
investment opportunities might be desirable for more than one account, possible
conflicts could arise in determining how to allocate them. Other potential
conflicts might include conflicts created by specific portfolio manager
compensation arrangements, and conflicts relating to selection of brokers or
dealers to execute Fund portfolio trades and/or specific uses of commissions
from Fund portfolio trades (for example, research, or "soft dollars").
BBH has adopted and implemented policies and procedures, including brokerage and
trade allocation policies and procedures, which it believes address the
conflicts associated with managing multiple accounts for multiple clients. In
addition, BBH monitors a variety of areas, including compliance with account
investment guidelines, the inclusion only of securities approved for purchase by
the BBH's Fixed Income Credit Committee, and compliance with the BBH's Code of
Ethics. Finally, BBH has structured the portfolio managers' compensation in a
manner, and the Funds have adopted policies and procedures, reasonably designed
to safeguard a Fund from being negatively affected as a result of any such
potential conflicts.
26
<PAGE>
BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
ADDITIONAL FEDERAL TAX INFORMATION
June 30, 2008
In January 2009, the Fund will report on Form 1099 the tax status of all
distributions made during the calendar year 2008. Shareholders should use the
information on Form 1099 for their income tax returns.
FINANCIAL STATEMENT JUNE 30, 2008 27
<PAGE>
TRUSTEES AND OFFICERS OF BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
(unaudited)
Information pertaining to the Trustees of the BBH Trust (the "Trust") and
executive officers of the Trust is set forth below. Part B to the Registration
Statement of the BBH Money Market Fund includes additional information about the
Fund's Trustees and is available upon request without charge by contacting the
Fund at 1-800-625-5759.
<TABLE>
<CAPTION>
Term of Number of
Office Funds in
and Fund Other
Position(s) Length Complex Directorships
Name, Birth Date Held with of Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joseph V. Shields Jr. Chairman of the Since 2007 Managing Director, Chairman and Chief 7 None
Birth Date: Board and Trustee Executive Officer of Shields & Company
March 17, 1938 (member of New York Stock Exchange);
Shields & Company Chairman of Capital Management
140 Broadway Associates, Inc. (registered investment
New York, NY 10005 adviser); Director of Flower Foods,
Inc. (New York Stock Exchange listed
company).
David P. Feldman Trustee Since 2007 Director of Jeffrey Co. (1992 to 7 Director of
Birth Date: present); Director of QMED (1999 to May Dreyfus Mutual
November 16, 1939 2007). Funds (59 Funds)
C/O BBH & Co.
140 Broadway
New York, NY 10005
Alan G. Lowy Trustee Since 2007 Private Investor. 7 None
Birth Date:
April 17, 1939
4111 Clear
Valley Drive
Encino, CA 91436
Arthur D. Miltenberger Trustee Since 2007 Retired; Trustee, R.K. Mellon Family 7 None
Birth Date: Trust (1981 to June 2003); Director of
November 8, 1938 Aerostructures Corporation (aircraft
503 Darlington Road manufacturer) (1996 to July 2003).
Ligonier, PA 15658
Samuel F. Pryor, IV Trustee Since 2007 Private Investor. 7 None
Birth Date:
June 12, 1955
130 East 67th Street
New York, NY 10021
</TABLE>
28
<PAGE>
TRUSTEES AND OFFICERS OF BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Term of Number of
Office Funds in
and Fund Other
Position(s) Length Complex Directorships
Name, Birth Date Held with of Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
H. Whitney Wagner Trustee Since 2007 President, Clear Brook Advisors, a 7 None
Birth Date: registered investment advisor.
March 3, 1956
Clear Brook Advisors
75 Rockefeller Plaza,
14th Floor
New York, NY 10019
Officers
John A. Gehret President and Since 2008 President and Principal Executive N/A N/A
Birth Date: Principal Officer of the Trust; Joined Brown
April 11, 1959 Executive Officer Brothers Harriman & Co. ("BBH & Co.")
140 Broadway in 1981 and has been a Partner of the
New York, NY 10005 firm since 1998.
Charles H. Schreiber Treasurer and Since 2007 Treasurer and Principal Financial N/A N/A
Birth Date: Principal Officer of the Trust; Senior Vice
December 10, 1957 Financial Officer President of BBH & Co. since September
140 Broadway 2001; Joined BBH & Co. in 1999.
New York, NY 10005
Mark B. Nixon Assistant Since 2007 Assistant Secretary and Assistant N/A N/A
Birth Date: Secretary, Treasurer of the Trust; Vice President
January 14, 1963 Assistant of BBH & Co. (since October 2006);
140 Broadway Treasurer Accounting Manager, Reserve Funds
New York, NY 10005 (August 2005-September 2006); Assistant
Controller, Reserve Funds (February
2005-August 2005); Private Consultant
(December 2001-February 2005).
Beth Haddock Chief Compliance Since 2007 Chief Compliance Officer of the Trust N/A N/A
Birth Date: Officer (September 2007-present); Chief
December 10, 1965 Compliance Officer for the FINRA/NYSE
140 Broadway and SEC compliance programs and
New York, NY 10005 Associate Compliance Director for the
global compliance program (April
2005-present); Deputy General
Counsel of AXA Advisors/AXA Financial
(November 1997-April 2005).
</TABLE>
FINANCIAL STATEMENT JUNE 30, 2008 29
<PAGE>
TRUSTEES AND OFFICERS OF BBH MONEY MARKET FUND
--------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Term of Number of
Office Funds in
and Fund Other
Position(s) Length Complex Directorships
Name, Birth Date Held with of Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sue M. Rim-An Anti-Money Since 2008 Anti-Money Laundering Officer, Vice N/A N/A
Birth Date: Laundering Officer President of BBH & Co. (September 2007
September 10, 1970 - present); AML Officer at UBS
140 Broadway Investment Bank (April 2006 - August
New York, NY 10005 2007); AML Officer & Vice President in
Private Client Services at Bear Stearns
& Co (June 1992 - April 2006).
Gail C. Jones Secretary Since 2007 Secretary of the Trust; Counsel, N/A N/A
Birth Date: ReedSmith, LLP (since October 2002);
October 26, 1953 Corporate Counsel (January 1997 to
1001 Liberty Avenue September 2002) and Vice President
Pittsburgh, PA (January 1999 to September 2002) of
15222-3779 Federated Services Company.
George M. Polatas Vice President Since 2008 Vice President of the Trust (since June N/A N/A
Birth Date: 2008); Assistant Vice President of
March 3, 1962 Federated Services Company; Vice
1001 Liberty Avenue, President of various funds distributed
Pittsburgh, PA by Edgewood Services, Inc (January 1997
15222-3779 to present).
Theodore J. Boudria Assistant Since 2008 Assistant Treasurer of the Trust; Vice N/A N/A
Birth Date: Treasurer President (since 2003); Assistant Vice
June 26, 1968 President (since September 2000);
70 Franklin Street Joined BBH & Co. in 1995.
Boston, MA 02110
</TABLE>
----------
# Each Trustee of the Trust holds office until he or she attains the age of
70 (72, in the case of Trustees who were elected as such before January 1,
2000), or until he or she sooner dies, resigns or is removed from office
in accordance with the provisions of the Trust's Declaration of Trust. All
officers of the Trust hold office for one year and until their respective
successors are chosen and qualified (subject to the ability of the
Trustees to remove any officer in accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, which has seven series and each is
counted as one "Fund" for purposes of this table.
30
<PAGE>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
To obtain information or make shareholder inquiries:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
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.
The Fund files with the SEC a complete schedule of its portfolio holdings, as of
the close of the first and third quarters of its fiscal year, on "Form N-Q."
Information on Form N-Q is available without charge and upon request by calling
the Funds at the toll-free number listed above. A text only version can be
viewed online or downloaded from the SEC's website at http://www.sec.gov; and
may be reviewed and copied at the SEC's Public Reference Room in Washington, DC
(call 1-800-SEC-0330 for information on the operation of the Public Reference
Room). You may also access this information from the BBH website at BBH.com by
clicking on "BBH Mutual Funds" and selecting "Online Documents/Holdings
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
Annual Report
JUNE 30, 2008
BBH TAX EXEMPT MONEY FUND
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
For the period of July 1, 2007 to June 30, 2008, the BBH Tax Exempt Money Market
Fund (the "Fund") produced a total return of 2.40%(1). We believe the
performance of the Fund was competitive within the industry despite a
conservative portfolio composition and in light of very difficult market
conditions.
The Municipal market struggled over the past year as the credit crisis caused a
"flight to quality" trade in the marketplace. Investors sought safety from
volatile financial market conditions which put pressure on every fixed income
asset class except Treasuries. Municipal ratios relative to Treasuries increased
to historically wide levels. In late February, investors could buy AAA tax
exempt bonds yielding 150% of Treasuries inside 5 years. During the second
quarter, the tax exempt market outperformed Treasuries, as historically wide
ratios drew a wide range of strategic and tactical investors. Strong demand from
retail investors, large inflows into tax exempt mutual funds, and interest from
non-traditional investors contributed to the significant ratio compression and
outperformance. New municipal issuance volume for the year is on track to set
another record. The percentage of new issue coming to market with insurance is
down over 25% from the previous year. Headline risk for monoline insurance
companies was a major theme for the tax exempt market this year. The three major
rating agencies downgraded all but two of the bond insurance companies. In June
S&P and Moody's stripped MBIA and Ambac, the two largest monoline insurance
companies, of their AAA ratings. Tax Exempt Money Market funds were hard pressed
to find high quality variable rate demand note weekly and daily floaters as
monoline insurance downgrades caused portfolio mangers to sell lower rated
insured paper and trim their overall exposure to specific insured credits. As a
result, municipal yields fell to 1.00% for high quality uninsured variable rate
demand notes. Due to solid demand from retail and institutional investors,
yields in the short end of the municipal yield curve fell over the past 6
months. Tax-exempt 30-day rates fell from 2.00% to 1.50%, 60-day yields fell
from 2.05% to 1.55%, 90-day rates fell from 2.15% to 1.60%, and 1-year yields
fell 110 basis points, from 2.80% to 1.70%.
Throughout the fiscal year we maintained the Fund's positions and added new
issues when we saw attractive buying opportunities. The Fund's average maturity
remained at 46 days, while coupon payments and maturities were reinvested into
high quality short municipals and tax-exempt commercial paper. The Fund remains
well diversified with 30% in AAA-rated short-term municipals, 17% in tax-exempt
commercial paper, 36% in weekly floaters, and 16% in daily cash floaters.
The Fund's investment advisor remains cautious on the municipal market due to
the expected new issue supply and low absolute returns offered by money market
investments. High quality money market instruments are in great demand due to
the downgrades, and negative outlook, on the monoline insurance companies. We
continue to believe that the municipal market represents an attractive long term
buying opportunity. Our purchases in the Fund are focused on municipalities with
strong underlying credit fundamentals, independent of any support from bond
insurance.
----------
(1) Performance data quoted represents no guarantee of future results.
Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. Mutual Fund performance changes over time and current
performance may be lower or higher than what is stated. For current to the
most recent month end performance and after tax returns, contact the Fund
at 1-800-625-5759.
2
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
June 30, 2008
To the Trustees of the BBH Trust and Shareholders of
BBH Tax Exempt Money Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of BBH Tax Exempt Money Fund (a series of BBH
Trust) (the "Fund") as of June 30, 2008, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of June 30, 2008, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of BBH
Tax Exempt Money Fund as of June 30, 2008, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
August 21, 2008
FINANCIAL STATEMENT JUNE 30, 2008 3
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
PORTFOLIO ALLOCATION
June 30, 2008
BREAKDOWN BY BOND TYPE
Percent of
U.S. $ Value Net Assets
------------ ----------
Certificates of Participation .................. $ 8,545,000 1.6%
Education ...................................... 124,265,000 22.7
General Obligations ............................ 145,269,556 26.6
Government Collateral .......................... 28,759,224 5.3
Health Care .................................... 52,600,000 9.6
Industrial ..................................... 3,000,000 0.5
Miscellaneous .................................. 31,796,759 5.8
Transportation ................................. 21,987,521 4.0
Utilities ...................................... 20,965,000 3.8
Water/Sewer .................................... 24,912,128 4.6
Commercial Paper ............................... 72,515,000 13.3
Other Assets in Excess of Liabilities .......... 11,962,086 2.2
------------ -----
NET ASSETS ..................................... $546,577,274 100.0%
============ =====
TOP FIVE HOLDINGS BY STATE
Percent of
U.S. $ Value Net Assets
------------ ----------
North Carolina ................................. $ 80,751,021 14.8%
Texas .......................................... 51,992,635 9.5
Pennsylvania ................................... 32,100,000 5.9
Missouri ....................................... 29,700,000 5.4
Washington ..................................... 28,453,542 5.2
Other States ................................... 311,617,990 57.0
Other Assets in Excess of Liabilities .......... 11,962,086 2.2
------------ -----
NET ASSETS ..................................... $546,577,274 100.0%
============ =====
All data as of June 30, 2008. 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.
4
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (84.5%)
CERTIFICATES OF PARTICIPATION(1) (1.6%)
$ 3,475,000 Mecklenburg County, North Carolina............. 07/03/08 1.550% $ 3,475,000
1,570,000 Winston-Salem, North Carolina.................. 07/03/08 1.440 1,570,000
3,500,000 Winston-Salem, North Carolina.................. 07/03/08 1.440 3,500,000
------------
Total Certificates of Participation............ 8,545,000
------------
EDUCATION (22.7%)
7,000,000 Colorado Springs, Colorado(1).................. 07/01/08 2.900 7,000,000
4,000,000 Connecticut State Health & Educational
Facilities Authority(1)..................... 07/02/08 1.270 4,000,000
2,850,000 Delaware State Economic Development
Authority(1)................................ 07/03/08 1.550 2,850,000
2,000,000 Massachusetts State Health &
Educational Facilities Authority(1)......... 07/02/08 1.280 2,000,000
2,000,000 Massachusetts State Health &
Educational Facilities Authority(1)......... 07/02/08 1.450 2,000,000
3,000,000 Massachusetts State Health &
Educational Facilities Authority(1)......... 07/03/08 1.470 3,000,000
2,500,000 Missouri State Health & Educational
Facilities Authority(1)..................... 07/01/08 1.700 2,500,000
1,000,000 Missouri State Health & Educational
Facilities Authority(1)..................... 07/01/08 1.850 1,000,000
6,200,000 Missouri State Health & Educational
Facilities Authority(1)..................... 07/01/08 2.100 6,200,000
5,000,000 Missouri State Health & Educational
Facilities Authority(1)..................... 07/01/08 2.600 5,000,000
5,000,000 Missouri State Health & Educational
Facilities Authority(1)..................... 07/01/08 7.000 5,000,000
5,000,000 New Hampshire Health & Education
Facilities Authority(1)..................... 07/02/08 1.550 5,000,000
5,000,000 North Carolina Educational Facilities
Finance Agency(1)........................... 07/03/08 1.450 5,000,000
2,535,000 North Carolina Educational Facilities
Finance Agency(1)........................... 07/03/08 1.510 2,535,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 5
<PAGE>
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--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
EDUCATION (continued)
$ 5,000,000 Ohio State Higher Educational Facilities
Revenue(1).................................. 07/02/08 1.500% $ 5,000,000
2,000,000 Ohio State University(1)....................... 07/02/08 1.370 2,000,000
3,000,000 Pennsylvania State Higher Educational
Facilities Authority(1)..................... 07/01/08 8.000 3,000,000
4,400,000 Pennsylvania State Higher Educational
Facilities Authority(1)..................... 07/03/08 1.550 4,400,000
1,400,000 Pennsylvania State University(1)............... 07/03/08 1.510 1,400,000
2,900,000 Private Colleges & Universities
Authority(1)................................ 07/02/08 1.600 2,900,000
4,400,000 Purdue University(1)........................... 07/02/08 1.600 4,400,000
1,645,000 University of Houston(1)....................... 07/03/08 1.600 1,645,000
4,000,000 University of Massachusetts
Building Authority(1)....................... 07/02/08 1.450 4,000,000
1,500,000 University of Michigan(1)...................... 07/01/08 3.000 1,500,000
1,735,000 University of Michigan(1)...................... 07/03/08 1.500 1,735,000
6,000,000 University of Missouri(1)...................... 07/01/08 1.700 6,000,000
6,000,000 University of Pittsburgh(1).................... 07/02/08 1.520 6,000,000
6,000,000 University of Pittsburgh(1).................... 07/03/08 1.500 6,000,000
1,100,000 University of Utah(1).......................... 07/02/08 1.600 1,100,000
4,500,000 Utah State Board of Regents.................... 07/01/08 4.000 4,500,000
5,600,000 Utah State Board of Regents(1)................. 07/01/08 7.000 5,600,000
4,000,000 Virginia College Building Authority,
Educational Facilities Revenue(1)........... 07/01/08 2.710 4,000,000
6,000,000 Waco Educational Finance Corp.(1).............. 07/02/08 1.600 6,000,000
------------
Total Education................................ 124,265,000
------------
GENERAL OBLIGATIONS (26.6%)
1,145,000 Anne Arundel County, Maryland.................. 04/01/09 4.000 1,163,213
2,310,000 Anne Arundel County, Maryland.................. 04/01/09 4.000 2,346,743
1,190,000 Arlington, Texas............................... 08/15/08 5.000 1,194,442
1,850,000 Charlotte, North Carolina...................... 07/01/08 4.250 1,850,000
1,265,000 Columbus, Ohio................................. 07/01/08 5.000 1,265,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
GENERAL OBLIGATIONS (continued)
$ 1,800,000 State of Delaware.............................. 07/01/08 5.000% $ 1,800,000
500,000 State of Delaware.............................. 03/01/09 4.250 508,569
4,795,000 Denton, Texas, Independent
School District(1).......................... 07/03/08 1.550 4,795,000
1,100,000 Durham, North Carolina(1)...................... 07/03/08 1.570 1,100,000
1,000,000 Fairfax County, Virginia....................... 04/01/09 5.250 1,023,632
2,500,000 State of Georgia............................... 12/01/08 5.000 2,533,832
3,250,000 State of Georgia............................... 12/01/08 5.000 3,286,836
1,025,000 Greensboro, North Carolina(1).................. 07/02/08 1.520 1,025,000
1,675,000 Greensboro, North Carolina(1).................. 07/02/08 1.520 1,675,000
2,520,000 Greensboro, North Carolina..................... 03/01/09 5.250 2,575,703
3,015,000 Guilford County, North Carolina(1)............. 07/03/08 1.550 3,015,000
3,100,000 Howard County, Maryland........................ 02/15/09 4.000 3,141,990
3,025,000 Howard County, Maryland........................ 02/15/09 4.250 3,068,660
1,050,000 Katy, Texas, Independent School
District(1)................................. 07/03/08 1.530 1,050,000
1,500,000 Lehman Municipal Trust Receipts(1)............. 07/02/08 1.770 1,500,000
2,560,000 State of Maryland.............................. 08/01/08 5.000 2,562,845
5,000,000 State of Maryland.............................. 02/01/09 5.000 5,100,718
1,000,000 State of Maryland.............................. 03/01/09 5.250 1,021,299
2,455,000 State of Massachusetts(1)...................... 07/02/08 1.530 2,455,000
1,000,000 Mecklenburg County, North Carolina(1).......... 07/02/08 1.570 1,000,000
1,200,000 Mecklenburg County, North Carolina(1).......... 07/02/08 1.570 1,200,000
2,450,000 Mecklenburg County, North Carolina(1).......... 07/02/08 1.570 2,450,000
3,450,000 Mecklenburg County, North Carolina(1).......... 07/02/08 1.570 3,450,000
1,060,000 Mecklenburg County, North Carolina(1).......... 07/03/08 1.450 1,060,000
2,500,000 Mecklenburg County, North Carolina(1).......... 07/03/08 1.450 2,500,000
5,000,000 Mecklenburg County, North Carolina(1).......... 07/03/08 1.520 5,000,000
620,000 Minneapolis, Minnesota(1)...................... 07/03/08 1.370 620,000
2,000,000 Minneapolis, Minnesota(1)...................... 07/03/08 1.370 2,000,000
8,900,000 Minneapolis, Minnesota(1)...................... 07/03/08 1.370 8,900,000
1,205,000 Minneapolis, Minnesota......................... 12/01/08 3.000 1,210,699
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 7
<PAGE>
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--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
GENERAL OBLIGATIONS (continued)
$ 2,450,000 Minneapolis, Minnesota, Special School
District No. 1.............................. 02/01/09 4.000% $ 2,482,593
1,575,000 State of Minnesota............................. 10/01/08 5.000 1,583,389
2,000,000 Montgomery County, Maryland(1)................. 07/01/08 1.700 2,000,000
1,835,000 Montgomery County, Maryland.................... 07/01/08 5.000 1,835,000
7,000,000 State of North Carolina(1)..................... 07/02/08 1.540 7,000,000
1,000,000 State of North Carolina........................ 03/01/09 5.000 1,018,985
800,000 State of North Carolina........................ 03/01/09 5.250 817,238
1,500,000 State of Ohio.................................. 09/01/08 4.000 1,505,571
1,000,000 State of Ohio.................................. 09/15/08 4.000 1,004,067
1,750,000 State of Ohio.................................. 05/01/09 5.500 1,802,980
5,000,000 State of Oregon(1)............................. 07/01/08 1.700 5,000,000
6,000,000 State of Oregon(1)............................. 07/01/08 1.700 6,000,000
1,000,000 State of Oregon(1)............................. 07/02/08 1.450 1,000,000
3,210,000 Port Tacoma, Washington(1)..................... 07/01/08 3.050 3,210,000
1,400,000 Seattle, Washington(1)......................... 07/02/08 1.500 1,400,000
1,050,000 State of South Carolina........................ 08/01/08 5.000 1,051,459
3,000,000 Union County, North Carolina(1)................ 07/03/08 1.500 3,000,000
5,000,000 State of Utah.................................. 07/01/08 4.000 5,000,000
1,355,000 Virginia Beach, Virginia....................... 10/01/08 5.000 1,365,551
3,000,000 Wake County, North Carolina(1)................. 07/03/08 1.440 3,000,000
1,700,000 Wake County, North Carolina(1)................. 07/03/08 1.500 1,700,000
7,000,000 State of Washington............................ 09/01/08 5.500 7,043,542
5,000,000 Washington Suburban Sanitation
District(1)................................. 07/02/08 1.500 5,000,000
------------
Total General Obligations...................... 145,269,556
------------
GOVERNMENT COLLATERAL (5.3%)
3,000,000 Houston, Texas, Independent
School District............................. 02/15/09 5.250 3,062,805
1,800,000 Hurst-Euless-Bedford, Texas,
Independent School District................. 08/15/08 4.750 1,806,839
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
BBH TAX EXEMPT MONEY FUND
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
GOVERNMENT COLLATERAL (continued)
$ 1,000,000 Los Angeles, California, Unified School
District.................................... 07/01/08 5.000% $ 1,010,000
5,000,000 Maricopa County, Arizona, Unified
School District No. 41...................... 07/01/08 5.000 5,000,000
1,000,000 State of Michigan.............................. 11/01/08 5.000 1,010,399
2,520,000 State of Minnesota............................. 11/01/08 5.000 2,546,209
2,940,000 State of Minnesota............................. 11/01/09 5.000 2,970,763
1,000,000 New York, New York, City Transitional
Finance Authority........................... 11/01/08 5.000 1,006,290
1,000,000 New York, New York, City Transitional
Finance Authority........................... 11/01/08 5.000 1,006,622
2,530,000 New York State Tollway Authority
Highway & Bridge Trust Fund................. 04/01/09 5.250 2,590,984
1,500,000 North Carolina Medical Care
Commission.................................. 12/01/08 5.000 1,534,095
1,000,000 Oklahoma State Turnpike Authority
Revenue..................................... 01/01/09 5.250 1,016,121
1,140,000 Texas State Public Finance Authority
Revenue..................................... 12/15/08 5.000 1,157,276
1,000,000 University of California....................... 09/01/08 5.250 1,015,761
1,000,000 Virginia Public School Authority............... 08/01/08 4.500 1,012,320
1,000,000 Virginia Public School Authority............... 08/01/08 5.000 1,012,740
------------
Total Government Collateral.................... 28,759,224
------------
HEALTH CARE(1) (9.6%)
5,000,000 Charlotte-Mecklenburg, North Carolina,
Hospital Authority.......................... 07/03/08 1.500 5,000,000
3,200,000 Colorado Health Facilities Authority
Revenue..................................... 07/02/08 1.550 3,200,000
6,300,000 Colorado Health Facilities Authority
Revenue..................................... 07/02/08 1.600 6,300,000
4,900,000 Montgomery County, Ohio........................ 07/01/08 3.500 4,900,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 9
<PAGE>
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--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
HEALTH CARE(1) (continued)
$ 6,000,000 New Mexico State Hospital Equipment
Loan Council................................ 07/02/08 1.600% $ 6,000,000
2,500,000 North Carolina Medical Care
Commission.................................. 07/02/08 1.540 2,500,000
2,000,000 Philadelphia, Pennsylvania, Hospitals &
Higher Education Facilities Authority....... 07/01/08 1.650 2,000,000
5,000,000 Philadelphia, Pennsylvania, Hospitals &
Higher Education Facilities Authority....... 07/01/08 1.650 5,000,000
4,000,000 Royal Oak, Michigan, Hospital Finance
Authority................................... 07/01/08 8.000 4,000,000
7,700,000 Royal Oak, Michigan, Hospital Finance
Authority................................... 07/01/08 8.500 7,700,000
6,000,000 University of North Carolina Hospital
Chapel Hill Revenue......................... 07/01/08 2.500 6,000,000
------------
Total Health Care.............................. 52,600,000
------------
INDUSTRIAL(1) (0.5%)
1,500,000 Loudoun County, Virginia, Industrial
Development Authority Revenue............... 07/02/08 1.300 1,500,000
1,500,000 Loudoun County, Virginia, Industrial
Development Authority Revenue............... 07/02/08 1.480 1,500,000
------------
Total Industrial............................... 3,000,000
------------
MISCELLANEOUS (5.8%)
3,125,000 Alaska State Housing Finance Corp.
Revenue(1).................................. 07/01/08 1.750 3,125,000
1,600,000 Alaska State Housing Finance Corp.
Revenue(1).................................. 07/02/08 11.660 1,600,000
6,000,000 Connecticut State Housing
Finance Authority(1)........................ 07/03/08 3.000 6,000,000
1,000,000 Illinois State Finance Authority
Revenue(1).................................. 07/02/08 1.400 1,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
MISCELLANEOUS (continued)
$ 1,000,000 Maine Municipal Bond Bank...................... 11/01/08 5.000% $ 1,009,272
4,000,000 Missouri State Development Finance
Board(1).................................... 07/01/08 7.750 4,000,000
2,605,000 Monmouth County, New Jersey,
Improvement Authority Revenue............... 10/01/08 4.500 2,611,695
2,000,000 New York, New York, City Transitional
Finance Authority(1)........................ 07/02/08 1.400 2,000,000
3,040,000 Palm Beach County, Florida, Public
Improvement Revenue......................... 11/01/08 4.000 3,047,537
5,900,000 South Dakota Housing Development
Authority(1)................................ 07/03/08 1.600 5,900,000
1,500,000 Virginia State Public Building Authority....... 08/01/08 4.500 1,503,255
------------
Total Miscellaneous............................ 31,796,759
------------
TRANSPORTATION (4.0%)
3,000,000 Illinois State Toll Highway Authority
Revenue(1).................................. 07/03/08 1.700 3,000,000
3,005,000 Kansas State Department of
Transportation & Highway Revenue(1)......... 07/02/08 1.520 3,005,000
1,700,000 Kansas State Department of
Transportation & Highway Revenue(1)......... 07/03/08 1.400 1,700,000
1,070,000 Lehman Municipal Trust Receipts(1)............. 07/02/08 1.770 1,070,000
3,000,000 Maryland State Department of
Transportation.............................. 03/01/09 5.000 3,061,248
1,135,000 North Texas Tollway Authority.................. 01/01/09 5.000 1,151,273
3,000,000 Pennsylvania Turnpike Commission(1)............ 07/01/08 1.650 3,000,000
6,000,000 Triborough Bridge & Tunnel Authority,
New York, Revenue(1)........................ 07/02/08 1.440 6,000,000
------------
Total Transportation........................... 21,987,521
------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 11
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
UTILITIES(1) (3.8%)
$ 2,000,000 Colorado Springs, Colorado, Utilities
Revenue..................................... 07/03/08 1.500% $ 2,000,000
3,850,000 Colorado Springs, Colorado, Utilities
Revenue..................................... 07/03/08 1.800 3,850,000
1,500,000 Houston, Texas, Utility System Revenue......... 07/03/08 1.700 1,500,000
2,000,000 New York State Energy Research &
Development Authority....................... 07/02/08 1.420 2,000,000
4,315,000 San Antonio, Texas, Electric & Gas
Revenue..................................... 07/02/08 1.770 4,315,000
2,000,000 San Antonio, Texas, Electric & Gas
Revenue..................................... 07/03/08 1.600 2,000,000
4,000,000 Snohomish County, Washington, Public
Utility District No. 1...................... 07/02/08 1.520 4,000,000
1,300,000 Upper Merion, Pennsylvania, Municipal
Utility Authority........................... 07/03/08 1.530 1,300,000
------------
Total Utilities................................ 20,965,000
------------
WATER/SEWER (4.6%)
1,500,000 Boston, Massachusetts, Water &
Sewer Commission(1)......................... 07/03/08 1.500 1,500,000
2,000,000 California State Department of Water
Resources(1)................................ 07/02/08 10.450 2,000,000
2,400,000 Charleston, South Carolina, Waterworks
& Sewer Revenue(1).......................... 07/03/08 1.550 2,400,000
1,000,000 Charlotte, North Carolina, Water &
Sewer Revenue(1)............................ 07/03/08 1.550 1,000,000
700,000 Cobb County, Georgia, Water &
Sewer Revenue............................... 07/01/08 5.000 700,000
1,000,000 Cobb County, Georgia, Water &
Sewer Revenue............................... 07/01/08 5.000 1,000,000
1,000,000 Colorado Water Resources & Power
Development Authority....................... 09/01/08 5.250 1,005,657
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
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--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (continued)
WATER/SEWER (continued)
$ 3,200,000 Durham, North Carolina, Water &
Sewer Revenue(1)............................ 07/02/08 1.450% $ 3,200,000
6,000,000 Gwinnett County, Georgia, Water &
Sewer Authority(1).......................... 07/02/08 1.700 6,000,000
1,055,000 Iowa State Finance Authority Revenue........... 02/01/09 5.000 1,073,263
2,025,000 Massachusetts State Water Resources
Authority(1)................................ 07/02/08 1.530 2,025,000
1,000,000 Michigan Municipal Bond Authority
Revenue..................................... 10/01/08 5.000 1,008,208
2,000,000 Texas Water Development Board
Revenue(1).................................. 07/01/08 2.050 2,000,000
------------
Total Water/Sewer.............................. 24,912,128
------------
Total Municipal Bonds.......................... 462,100,188
------------
COMMERCIAL PAPER (13.3%)
5,000,000 Austin Independent School District............. 07/08/08 1.650 5,000,000
2,315,000 Board of Regents of the Texas A&M
University.................................. 07/07/08 1.700 2,315,000
4,000,000 City of Austin, Texas.......................... 07/16/08 2.100 4,000,000
2,000,000 Clark County, Nevada, School District.......... 07/02/08 1.950 2,000,000
1,550,000 Jacksonville, Florida, Electric Authority
Revenue..................................... 07/09/08 2.080 1,550,000
6,300,000 King County, Washington........................ 07/24/08 1.650 6,300,000
1,500,000 King County, Washington........................ 08/07/08 1.650 1,500,000
2,000,000 Massachusetts Water Resources
Authority................................... 07/17/08 1.950 2,000,000
3,000,000 Memphis, Tennessee............................. 09/04/08 1.750 3,000,000
3,000,000 Montgomery County, Maryland.................... 08/05/08 1.580 3,000,000
1,300,000 Municipal Electric Authority of Georgia........ 07/08/08 1.450 1,300,000
2,050,000 Municipal Electric Authority of Georgia........ 08/11/08 1.650 2,050,000
3,000,000 Nashville & Davidson County Health
and Educational Facilities Authority........ 09/02/08 1.600 3,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 13
<PAGE>
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--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (continued)
June 30, 2008
<TABLE>
<CAPTION>
Principal Maturity Interest
Amount Date Rate Value
----------- -------- -------- -----------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (continued)
$ 4,000,000 New York, New York............................. 07/03/08 4.050% $ 4,000,000
5,000,000 New York, New York............................. 07/03/08 4.050 5,000,000
1,000,000 North Carolina Capital Facilities Finance
Agency...................................... 08/12/08 1.500 1,000,000
5,500,000 North Texas Tollway Authority.................. 10/09/08 1.600 5,500,000
3,000,000 Oklahoma City Water Utilities Trust............ 09/03/08 1.580 3,000,000
3,000,000 Orange County, Florida......................... 07/14/08 2.000 3,000,000
2,000,000 South Carolina Public Service Authority........ 08/08/08 1.650 2,000,000
4,000,000 Tennessee State School Bond.................... 08/06/08 1.900 4,000,000
2,000,000 Tennessee State School Bond.................... 08/07/08 1.520 2,000,000
2,500,000 Tennessee State School Bond.................... 09/04/08 1.650 2,500,000
1,000,000 Texas Public Finance Authority................. 07/10/08 1.590 1,000,000
2,500,000 Texas Public Finance Authority................. 08/07/08 1.500 2,500,000
------------
Total Commercial Paper......................... 72,515,000
------------
TOTAL INVESTMENTS, AT AMORTIZED COST.................................... 97.8% $534,615,188
OTHER ASSETS IN EXCESS OF LIABILITIES................................... 2.2 11,962,086
----- ------------
NET ASSETS ............................................................. 100.0% $546,577,274
===== ============
</TABLE>
----------
(1) Variable rate instrument. Interest rates change on specific dates (such as
coupon or interest payment date). The yield shown represents the June 30,
2008 coupon or interest rate.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2008
ASSETS:
Investments, at amortized cost ............................ $534,615,188
Receivables for:
Investments sold ....................................... 9,742,911
Interest and other receivables ......................... 2,550,072
------------
Total Assets ......................................... 546,908,171
------------
LIABILITIES:
Due to Brown Brothers Harriman & Co. ...................... 31,606
Payables for:
Investment advisory and administrative fees ............ 112,388
Shareholder servicing fees ............................. 109,918
Dividends declared ..................................... 38,143
Professional fees ...................................... 20,424
Custody and accounting fees ............................ 14,809
Board of Trustees' fees ................................ 2,609
Accrued expenses and other liabilities .................... 1,000
------------
Total Liabilities .................................... 330,897
------------
NET ASSETS, for 546,571,244 fund shares outstanding .......... $546,577,274
============
Net Assets Consist of:
Paid-in capital ........................................... $546,574,372
Undistributed net investment income ....................... 2,902
------------
Net Assets ................................................... $546,577,274
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE ................. $1.00
=====
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 15
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the year ended June 30, 2008
NET INVESTMENT INCOME:
Income:
Investment income ..................................... $ 12,223,172
------------
Expenses:
Investment advisory and administrative fees ........... 1,069,468
Shareholder servicing fees ............................ 1,069,468
Custody and accounting fees ........................... 64,391
Board of Trustees' fees ............................... 36,612
Professional fees ..................................... 31,382
Miscellaneous expenses ................................ 109,716
------------
Total Expenses ...................................... 2,381,037
Expense offset arrangement .......................... (19,529)
------------
Net Expenses ........................................ 2,361,508
------------
Net Investment Income .................................... $ 9,861,664
============
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the years ended June 30,
--------------------------------------
2008 2007
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From Operations:
Net investment income ...................................................... $ 9,861,664 $ 12,564,686
Dividends declared from net investment income ................................. (9,858,762) (12,562,787)
------------- -------------
Net increase in net assets from operations ................................. 2,902 1,899
------------- -------------
From Fund Share (Principal) Transactions at
Net Asset Value of $1.00 per share:
Fund shares sold ......................................................... 732,984,132 353,300,401
Fund shares issued in reinvestment of dividends .......................... 6,550 6,378,787
Fund shares repurchased .................................................. (514,652,648) (524,604,107)
------------- -------------
Net increase (decrease) in net assets resulting
from fund share transactions ........................................ 218,338,034 (164,924,919)
------------- -------------
NET ASSETS:
Beginning of year ............................................................. 328,236,338 493,159,358
------------- -------------
End of year ................................................................... $ 546,577,274 $ 328,236,338
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
FINANCIAL STATEMENT JUNE 30, 2008 17
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout each year
<TABLE>
<CAPTION>
For the years ended June 30,
------------------------------------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ......................... 0.02 0.03 0.02 0.01 0.00(1)
Dividends to shareholders from net
investment income ............................. (0.02) (0.03) (0.02) (0.01) (0.00)(1)
------- ------- ------- ------- -------
Net asset value, end of year ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return ..................................... 2.40% 3.03% 2.31% 1.15% 0.42%
Ratios/Supplemental data:
Net assets, end of year (in millions) ......... $ 547 $ 328 $ 493 $ 438 $ 453
Net expenses paid by Fund ..................... 0.55% 0.58% 0.56% 0.56% 0.55%
Expense offset arrangement .................... 0.00%(2) 0.01% 0.00%(2) 0.00%(2) 0.00%(2)
------- ------- ------- ------- -------
Total expenses ............................. 0.55% 0.59% 0.56% 0.56% 0.55%
======= ======= ======= ======= =======
Ratio of net investment income to
average net assets ......................... 2.31% 2.98% 2.31% 1.15% 0.42%
</TABLE>
----------
(1) Less than $0.01 per share.
(2) Less than 0.01%.
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
June 30, 2008
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 and re-organized as a
Delaware statutory trust on June 12, 2007. 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 without a par value. At June 30, 2008, there
were seven 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. Investment Transactions 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. The Fund invest 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. 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
substantially all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required. At June
30, 2008, 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 to Shareholders. Dividends from net
investment income are declared daily and paid monthly to
shareholders. The Fund declared dividends in the amounts of
$9,858,762 and $12,562,787 for the years ended June 30, 2008 and
June 30, 2007, respectively. The tax character of the dividends
declared in both years was 100% tax exempt income.
FINANCIAL STATEMENT JUNE 30, 2008 19
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
E. Accounting Developments. In June 2006, the Fund adopted FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
("FIN 48"). FIN 48 provides guidance for how uncertain tax positions
should be recognized, measured, presented and disclosed in the
financial statements. FIN 48 requires the evaluation of tax
positions taken or expected to be taken in the course of preparing
the Fund's tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax
authority. Tax positions not deemed to meet the more-likely-than-not
threshold would be recorded as a tax benefit or expense in the
current year. The adoption of FIN 48 had no impact on the operations
of the Fund for the period ended June 30, 2008.
In September 2006, Statement of Financial Accounting Standards No.
157, Fair Value Measurements (SFAS 157), was issued and is effective
for fiscal years beginning after November 15, 2007. SFAS 157 defines
fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. Management is
currently evaluating the implication of SFAS 157. At this time its
impact on the Fund's financial statements has not yet been
determined.
In March 2008, Statement of Financial Accounting Standards No. 161,
Disclosures about Derivative Instruments and Hedging Activities
(SFAS 161), was issued and is effective for fiscal years beginning
after November 15, 2008. SFAS 161 requires enhanced disclosures to
provide information about the reasons the Fund invests in derivative
instruments, the accounting treatment and the effect derivatives
have on financial performance. Management is currently evaluating
the impact the adoption of SFAS 161 will have on the Fund's
financial statement disclosures.
2. Transactions with Affiliates.
Investment Advisory and Administrative Fees. Effective June 12, 2007,
under a combined Investment Advisory and Administrative Services Agreement
("Agreement") with the Trust, a separately identifiable department within
Brown Brothers Harriman & Co. ("BBH") provides investment advice,
portfolio management and administrative services to the Fund. BBH receives
a combined fee from the Fund for investment advisory and administrative
services calculated daily and paid monthly at an annual rate equivalent to
0.25% of the Fund's average daily net assets. Prior to June 12, 2007,
under a separate agreement that covered only investment advisory fees, BBH
received a fee from the Fund calculated daily and paid monthly at an
annual rate of 0.15% of the Fund's average daily net assets. Brown
Brothers Harriman Trust Company, LLC, the Fund's administrator, under a
separate agreement that covered only administrative services, received 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. BBH has a
sub-administration services agreement with Federated Services Company
("FSC") for which FSC receives compensation paid by BBH. For the year
ended June 30, 2008, the Fund incurred $1,069,468 for investment advisory
and administrative services.
20
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
June 30, 2008
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 of 0.25% of the Fund's average
daily net assets. For the year ended June 30, 2008, the Fund incurred
$1,069,468 for shareholder servicing services.
Custody and Accounting Fees. BBH acts as a custodian and receives a
custody and accounting fee from the Fund calculated daily and paid
monthly. The custody fee is a transaction based fee with an annual minimum
of $20,000, and the accounting fee is calculated at 0.01% per annum on the
first $1 billion of net assets and 0.005% per annum on all net assets over
$1 billion. For the year ended June 30, 2008, the Fund incurred $64,391
for custody and accounting services. These fees were reduced by $19,529 as
a result of an expense offset arrangement with the Fund's custodian. In
the event that the Fund is overdrawn, under the custody agreement with
BBH, BBH will make overnight loans to the Fund to cover overdrafts.
Pursuant to the agreement, the Fund will be charged interest based on
LIBOR on the day of overdraft plus one percent. The total interest paid by
the Fund for the year ended June 30, 2008 was $6,288.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Fund. For the
year ended June 30, 2008, the Fund incurred $36,612 for Trustees' fees.
FINANCIAL STATEMENT JUNE 30, 2008 21
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
June 30, 2008
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 (January 1, 2008 to June 30, 2008).
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.
22
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES (continued)
June 30, 2008
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.
<TABLE>
<CAPTION>
Expenses Paid
Beginning Ending During Period
Account Value Account Value January 1, 2008
January 1, 2008 June 30, 2008 to June 30, 2008(1)
-----------------------------------------------------------
<S> <C> <C> <C>
Actual...................... $1,000 $1,009.00 $2.75
Hypothetical(2)............. $1,000 $1,022.13 $2.77
</TABLE>
----------
(1) Expenses are equal to the Fund's annualized expense ratio of 0.55%,
multiplied by the average account value over the period, multiplied by
182/366 (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.
FINANCIAL STATEMENT JUNE 30, 2008 23
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION
June 30, 2008
Approval of Investment Advisory/Administrative Services Agreement
At a meeting held on December 11, 2006, the Board of Trustees (the "Board") of
the Trust unanimously approved a new Combined Investment Advisory/Administrative
Services Agreement ("Combined Agreement"). The Board determined that the terms
of the Combined Agreement will be substantially identical to those of the
current advisory and administration agreements of the Funds, noting that the
most significant difference in the Combined Agreement is a single fee for both
investment advisory and administrative services. The following is a summary of
the factors the Board took into consideration in making its determination to
approve the new Combined Agreement.
Nature, Extent and Quality of Services Provided by Brown Brothers Harriman & Co.
("BBH")
The Board noted that, under the Combined Agreement in respect of each Fund, BBH,
subject to the supervision of the Board, will be responsible for providing a
continuous investment program and making purchases and sales of portfolio
securities consistent with the Funds' investment objective and policies. Under
the Combined Agreement, BBH also provides administrative services to each Fund.
The Board considered the scope and quality of services to be provided by BBH
under the Combined Agreement and noted that the scope of services provided had
expanded over time, primarily, as a result of regulatory developments. The Board
noted that, for example, BBH is responsible for maintaining and monitoring its
own and, to varying degrees, the Funds' compliance program, and these compliance
programs had recently been refined and enhanced in light of new regulatory
requirements. The Board considered the quality of the investment research and
administrative capabilities of BBH and the other resources it has dedicated to
performing services for the Funds. The Board concluded that, overall, they were
satisfied with the nature, extent and quality of services expected to be
provided to each of the Funds under the Combined Agreement.
Costs of Services Provided and Profitability to BBH
At the request of the Board, BBH provided information concerning the
profitability of BBH's current investment company advisory and other fees. The
Board also reviewed BBH's profitability data for each Fund, which also included
the effect of revenue generated by the shareholder servicing, administration,
custody and other fees paid by the Fund. The Board discussed the difficulty of
making comparisons of profitability because comparative information is not
generally publicly available and is affected by numerous factors, including the
structure of the service provider, the types of funds it manages and
administers, its business mix, numerous assumptions regarding allocations and
the entity's capital structure and cost of capital. In considering profitability
information, the Board considered the effect of fall-out benefits on BBH's
expenses, as well as the "revenue sharing" arrangements BBH has entered into
with certain entities that distribute shares of the Funds. The Board focused on
profitability of BBH's relationships with the Funds before taxes and
distribution expenses. The Board concluded that it was satisfied that BBH's
level of profitability from its relationship with each Fund was not excessive.
24
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
Fall-Out Benefits
The Board considered that BBH does not allocate the Funds' portfolio
transactions for third party research, although it did benefit from proprietary
research received from brokers that execute the Funds' purchases and sales of
securities. The Board recognized that the aggregate amount of commissions
generated by Fund transactions was unlikely to result in the Funds receiving
from full service broker dealers substantial discounts on commission rates. The
Board received and reviewed information concerning BBH's policies with respect
to allocating portfolio brokerage.
The Board also considered that BBH receives shareholder servicing fees from
certain funds, and is the Funds' administrator, custodian and securities lending
agent. The Board noted that BBH retained no portion of the 12b-1 fees paid by
any Fund that operated with a Rule 12b-1 plan. The Board recognized that BBH's
profitability would be somewhat lower if it did not receive proprietary research
for commissions or, if it did not receive the other benefits described above.
The Board recognized that most Fund shareholders were also BBH clients, and that
substantial assets are invested in the Funds as a result of an overall
investment management program for the shareholder. The Board noted that the
Funds also derive reputational and other benefits from their association with
BBH and their use of the BBH name, which is licensed to the Funds by BBH. Thus,
the Board did not believe that BBH revenues associated with its clients should
be fairly regarded as "fallout" benefit from the Funds.
Economies of Scale
The Board noted that the Funds' combined fee schedules, other than the fee
schedule for BBH Money Market Fund, do not contain breakpoints. As a result, if
assets increase, the fee rates would not be reduced for these Funds on the
incremental assets. With respect to the BBH Money Market Fund, the breakpoint
will be reviewed every three (3) years by the Board, and may be adjusted upwards
to take into account the effects of inflation or such other basis as may be
appropriate, subject to the approval of shareholders to the extent required by
the 1940 Act.
There may be other economies of scale because many expenses did not rise (and
fall) proportionally to increases (and decreases) in total net assets. The Board
noted that BBH had priced its services in recognition of the fact that it was
largely its own clients who were shareholders and, accordingly, sought to assure
that the cost of these services and total expenses for each Fund were fair and
reasonable. In addition, the Board noted that over the years BBH had supported
certain Funds through fee waivers and expense reimbursements. Based on
information they had been provided over many years, the Board observed that in
the mutual fund industry as a whole, as well as among funds similar to the
Funds, there
FINANCIAL STATEMENT JUNE 30, 2008 25
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
appeared to be no uniformity or pattern in the fees and asset levels at which
breakpoints (if any) apply. In light of the Funds' current size and expense
structure, the Board concluded that it was unnecessary at this time to consider
breakpoints with respect to the Funds, other than for the BBH Money Market Fund.
Investment Results
The Board considered the investment results of each of the Funds as compared to
investment companies with its peers and with one or more selected securities
indices. In addition to the information received by the Board for the meeting
held on December 11, 2006, the Board received detailed performance information
for each Fund at each regular Board meeting during the year. At the meeting held
on October 2, 2006, the Board reviewed information showing performance of each
Fund compared to its peers over the prior 1-, 3-, and 5- year periods and
compared the performance information to one or more securities indices over
comparable periods.
Combined Fee Rate
The Board considered the fee rate to be paid by each Fund to BBH. The Board
recognized that it is difficult to make comparisons of these fee rates, and the
combined advisory and administration fees, because there are variations in the
services that are included in the fees paid by other funds.
The Board considered the depth and range of services provided under the Combined
Agreement. For example, in addition to a continuous investment program, BBH
provides, among other things, officers (including the Funds' Chief Compliance
Officer and officers to provide required certifications) and administrative
services, such as shareholder communications, and tax compliance, with the
attendant costs and exposure to liability. BBH also coordinates the provision of
services to the Funds by nonaffiliated service providers.
The following factors specific to BBH Tax Exempt Money Fund also were noted and
considered by the Board in deciding to approve the Combined Agreement:
The Board reviewed information showing performance of the BBH Tax Exempt Money
Fund compared to iMoneyNet (Tax Free Retail). The Fund outperformed or performed
in line with the average over all relevant periods. The Board also viewed with
favor that the BBH Tax Exempt Money Fund's portfolio of investments had an
overall high quality while the BBH Tax Exempt Money Fund's total expense ratio
was lower that the iMoneyNet Average. The Board also noted that the BBH Tax
Exempt Money Fund had successfully maintained a stable net asset value of one
dollar at all times. Taking into account these comparisons and the other factors
considered, the Board concluded that the BBH Tax Exempt Money Fund's investment
results over time and its total expense ratio had been satisfactory.
26
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
DISCLOSURE OF ADVISOR SELECTION (continued)
June 30, 2008
Conflicts of Interest
As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a Fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other. For example, it is possible that the various accounts
managed could have different investment strategies that, at times, might
conflict with one another to the possible detriment of the Fund. Alternatively,
to the extent that the same investment opportunities might be desirable for more
than one account, possible conflicts could arise in determining how to allocate
them. Other potential conflicts might include conflicts created by specific
portfolio manager compensation arrangements, and conflicts relating to selection
of brokers or dealers to execute Fund portfolio trades and/or specific uses of
commissions from Fund portfolio trades (for example, research, or "soft
dollars").
BBH has adopted and implemented policies and procedures, including brokerage and
trade allocation policies and procedures, which it believes address the
conflicts associated with managing multiple accounts for multiple clients. In
addition, BBH monitors a variety of areas, including compliance with account
investment guidelines, the inclusion only of securities approved for purchase by
the BBH's Fixed Income Credit Committee, and compliance with the BBH's Code of
Ethics. Finally, BBH has structured the portfolio managers' compensation in a
manner, and the Funds have adopted policies and procedures, reasonably designed
to safeguard a Fund from being negatively affected as a result of any such
potential conflicts.
FINANCIAL STATEMENT JUNE 30, 2008 27
<PAGE>
BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
ADDITIONAL FEDERAL TAX INFORMATION
June 30, 2008
The percentage of tax-exempt dividends paid by BBH Tax Exempt Money Fund for the
year ended June 30, 2008 was 100%.
In January 2009, the Fund will report on Form 1099 the tax status of all
distributions made during the calendar year 2008. Shareholders should use the
information on Form 1099 for their income tax returns.
The differences between book-basis and tax-basis unrealized
appreciation/(depreciation) is attributable primarily to post-October long term
capital loss deferral.
28
<PAGE>
TRUSTEES AND OFFICERS OF BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
(unaudited)
Information pertaining to the Trustees of the BBH Trust (the "Trust") and
executive officers of the Trust is set forth below. Part B to the Registration
Statement of the BBH Tax Exempt Money Fund includes additional information about
the Fund's Trustees and is available upon request without charge by contacting
the Fund at 1-800-625-5759.
<TABLE>
<CAPTION>
Term of Number of
Office Funds in
and Fund Other
Position(s) Length of Complex Directorships
Name, Birth Date Held with Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Joseph V. Shields Jr. Chairman of Since 2007 Managing Director, Chairman and 7 None
Birth Date: the Board Chief Executive Officer of Shields
March 17, 1938 and Trustee & Company (member of New York
Shields & Company Stock Exchange); Chairman of
140 Broadway Capital Management Associates,
New York, NY 10005 Inc. (registered investment
adviser); Director of Flower
Foods, Inc. (New York Stock
Exchange listed company).
David P. Feldman Trustee Since 2007 Director of Jeffrey Co. (1992 to 7 Director of
Birth Date: present); Director of QMED (1999 Dreyfus Mutual
November 16, 1939 to May 2007). Funds (59
C/O BBH & Co. Funds)
140 Broadway
New York, NY 10005
Alan G. Lowy Trustee Since 2007 Private Investor. 7 None
Birth Date:
April 17, 1939
4111 Clear
Valley Drive
Encino, CA 91436
Arthur D. Miltenberger Trustee Since 2007 Retired; Trustee, R.K. Mellon 7 None
Birth Date: Family Trust (1981 to June 2003);
November 8, 1938 Director of Aerostructures
503 Darlington Road Corporation (aircraft
Ligonier, PA 15658 manufacturer) (1996 to July 2003).
Samuel F. Pryor, IV Trustee Since 2007 Private Investor. 7 None
Birth Date:
June 12, 1955
130 East 67th Street
New York, NY 10021
</TABLE>
FINANCIAL STATEMENT JUNE 30, 2008 29
<PAGE>
TRUSTEES AND OFFICERS OF BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Term of Number of
Office Funds in
and Fund Other
Position(s) Length of Complex Directorships
Name, Birth Date Held with Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
H. Whitney Wagner Trustee Since 2007 President, Clear Brook Advisors, a 7 None
Birth Date: registered investment advisor.
March 3, 1956
Clear Brook Advisors
75 Rockefeller Plaza,
14th Floor
New York, NY 10019
Officers
John A. Gehret President Since 2008 President and Principal Executive N/A N/A
Birth Date: and Officer of the Trust; Joined Brown
April 11, 1959 Principal Brothers Harriman & Co. ("BBH &
140 Broadway Executive Co.") in 1981 and has been a
New York, NY 10005 Officer Partner of the firm since 1998.
Charles H. Schreiber Treasurer Since 2007 Treasurer and Principal Financial N/A N/A
Birth Date: and Officer of the Trust; Senior Vice
December 10, 1957 Principal President of BBH & Co. since
140 Broadway Financial September 2001; Joined BBH & Co.
New York, NY 10005 Officer in 1999.
Mark B. Nixon Assistant Since 2007 Assistant Secretary and Assistant N/A N/A
Birth Date: Secretary, Treasurer of the Trust; Vice
January 14, 1963 Assistant President of BBH & Co. (since
140 Broadway Treasurer October 2006); Accounting Manager,
New York, NY 10005 Reserve Funds (August
2005-September 2006); Assistant
Controller, Reserve Funds
(February 2005-August 2005);
Private Consultant (December
2001-February 2005).
Beth Haddock Chief Since 2007 Chief Compliance Officer of the N/A N/A
Birth Date: Compliance Trust (September 2007-present);
December 10, 1965 Officer Chief Compliance Officer for the
140 Broadway FINRA/NYSE and SEC compliance
New York, NY 10005 programs and Associate Compliance
Director for the global compliance
program (April 2005-present);
Deputy General Counsel of AXA
Advisors/ AXA Financial (November
1997-April 2005).
</TABLE>
30
<PAGE>
TRUSTEES AND OFFICERS OF BBH TAX EXEMPT MONEY FUND
--------------------------------------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Term of Number of
Office Funds in
and Fund Other
Position(s) Length of Complex Directorships
Name, Birth Date Held with Time Principal Occupation(s) Overseen by Held by
and Address Trust Served# During Past 5 Years Trustee^ Trustee
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Sue M. Rim-An Anti-Money Since 2008 Anti-Money Laundering Officer, N/A N/A
Birth Date: Laundering Vice President of BBH & Co.
September 10, 1970 Officer (September 2007 - present); AML
140 Broadway Officer at UBS Investment Bank
New York, NY 10005 (April 2006 - August 2007); AML
Officer & Vice President in
Private Client Services at Bear
Stearns & Co (June 1992 - April
2006).
Gail C. Jones Secretary Since 2007 Secretary of the Trust; Counsel, N/A N/A
Birth Date: ReedSmith, LLP (since October
October 26, 1953 2002); Corporate Counsel (January
1001 Liberty Avenue 1997 to September 2002) and Vice
Pittsburgh, PA President (January 1999 to
15222-3779 September 2002) of Federated
Services Company.
George M. Polatas Vice Since 2008 Vice President of the Trust (since N/A N/A
Birth Date: President June 2008); Assistant Vice
March 3, 1962 President of Federated Services
1001 Liberty Avenue, Company; Vice President of various
Pittsburgh, PA funds distributed by Edgewood
15222-3779 Services, Inc (January 1997 to
present).
Theodore J. Boudria Assistant Since 2008 Assistant Treasurer of the Trust; N/A N/A
Birth Date: Treasurer Vice President (since 2003);
June 26, 1968 Assistant Vice President (since
70 Franklin Street September 2000); Joined BBH & Co.
Boston, MA 02110 in 1995.
</TABLE>
----------
# Each Trustee of the Trust holds office until he or she attains the age of
70 (72, in the case of Trustees who were elected as such before January 1,
2000), or until he or she sooner dies, resigns or is removed from office
in accordance with the provisions of the Trust's Declaration of Trust. All
officers of the Trust hold office for one year and until their respective
successors are chosen and qualified (subject to the ability of the
Trustees to remove any officer in accordance with the Trust's By-laws).
^ The Fund Complex consists of the Trust, which has seven series and each is
counted as one "Fund" for purposes of this table.
FINANCIAL STATEMENT JUNE 30, 2008 31
<PAGE>
INVESTMENT ADVISER AND ADMINISTRATOR
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
5800 CORPORATE DRIVE
PITTSBURGH, PA 15237-7000
SHAREHOLDER SERVICING AGENT
BROWN BROTHERS HARRIMAN
140 BROADWAY
NEW YORK, NY 10005
(800) 625-5759
To obtain information or make shareholder inquiries:
By telephone: Call 1-800-575-1265
By E-mail send your request to: bbhfunds@bbh.com
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.
The Fund files with the SEC a complete schedule of its portfolio holdings, as of
the close of the first and third quarters of its fiscal year, on "Form N-Q."
Information on Form N-Q is available without charge and upon request by calling
the Funds at the toll-free number listed above. A text only version can be
viewed online or downloaded from the SEC's website at http://www.sec.gov; and
may be reviewed and copied at the SEC's Public Reference Room in Washington, DC
(call 1-800-SEC-0330 for information on the operation of the Public Reference
Room). You may also access this information from the BBH website at BBH.com by
clicking on "BBH Mutual Funds" and selecting "Online Documents/Holdings
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) Not applicable.
(2) Not applicable.
(3) 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.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) The Registrant's Board of Trustees
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 who are independent for purposes
of this Item 3 of Form N-CSR: audit committee
members Arthur D. Miltenberger and David P. 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.
TO BE PROVIDED BY D&T
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
(a) Not applicable.
(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 COMPANIES.
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 occurred during
the second fiscal quarter of the period
covered by this report that has materially
affected, or is reasonably likely to
materially affect, the Registrants internal
control over financial reporting.
ITEM 12. EXHIBITS.
(a) (1) Not applicable.
(a) (2) A separate certification for each principal
executive officer and principal financial
officer of the Registrant as required by
Rule 30a-2(a) under the Act (17 CFR 270.30a-2)
is filed as Exhibit 12(a) (2).
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. Gehret
------------------------------
John A. Gehret, President
(Principal Executive Officer)
Date: 9/04/08
------------------
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/ Charles H. Schreiber
---------------------------
Charles H. Schreiber, Treasurer
(Principal Financial Officer)
Date: 9/04/08
------------------
- Print name and title of each signing officer
under his or her signature.
EXHIBIT 12(a) (1)
A copy of the code of ethics is available and can
be mailed, free of charge, to anyone by calling
(800) 575-1265.
EXHIBIT 12(a) (2)
SECTION 302 CERTIFICATION OF PRINCIPLE EXECUTIVE OFFICER.
I, John A. Gehret, certify that:
1. I have reviewed this report on Form N-CSR of BBH Trust on behalf of: BBH U.S. Treasury
Money Fund, BBH Money Market 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-3(c) under the
Investment Company Act of 1940) and internal control over financial reporting (as defined
in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have:
a.) designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, 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.) designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting
principles;
c.) evaluated the effectiveness of the Registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of a date within 90 days prior to the filing date of this report based
on such evaluation; and
d.) disclosed in this report any change in the Registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered by this
report that has materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting; and
5. The Registrant's other certifying officer and I have disclosed to the Registrant's auditors
and the audit committee of the Registrant's board of directors (or persons performing the
equivalent functions):
a.) all significant deficiencies and material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the
Registrant's ability to record, process, summarize, and report financial information; and
b.) any fraud, whether or not material, that involves management or other employees who have a
significant role in the Registrant's internal control over financial reporting.
Date: 9/04/08
/s/ John A. Gehret
=======================
John A. Gehret
President - Principal Executive Officer
EXHIBIT 12(a) (2)
SECTION 302 CERTIFICATION OF PRINCIPLE FINANCIAL OFFICER.
I, Charles H. Schreiber, certify that:
1. I have reviewed this report on Form N-CSR of BBH Trust on behalf of: BBH U.S. Treasury
Money Fund, BBH Money Market 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-3(c) under the
Investment Company Act of 1940) and internal control over financial reporting (as
defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant
and have:
a.) designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, 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.) designed such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles;
c.) evaluated the effectiveness of the Registrant's disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of a date within 90 days prior to the filing date of this
report based on such evaluation; and
d.) disclosed in this report any change in the Registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered by this
report that has materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting; and
5. The Registrant's other certifying officer and I have disclosed to the Registrant's
auditors and the audit committee of the Registrant's board of directors (or persons
performing the equivalent functions):
a.) all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely
affect the Registrant's ability to record, process, summarize, and report financial
information; and
b.) any fraud, whether or not material, that involves management or other employees who
have a significant role in the Registrant's internal control over financial reporting.
Date: 9/04/08
/s/ Charles H. Schreiber
==========================
Charles H. Schreiber
Treasurer - Principal Financial Officer
SECTION 906 CERTIFICATIONS
This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
(section) 1350, and accompanies the report on Form N-CSR for the fiscal year ended June 30, 2008 of
the BBH Trust (the Registrant).
Pursuant to 18 U.S.C.ss. 1350, the undersigned officers of the Registrant, hereby certify, to the
best of our knowledge, that the Registrant's Report on Form N-CSR for the period ended June 30, 2008
(the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the
Securities 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.
Date: 9/04/08
------------------
/s/ John A. Gehret
=======================
John A. Gehret
President - Principal Executive Officer
Date: 9/04/08
------------------
/s/ Charles H. Schreiber
==========================
Charles H. Schreiber
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.