N-CSR 1 e19630ncsr.txt FORM N-CSR ------------------------------------- OMB APPROVAL OMB Number: 3235-0570 Expires: October 31, 2006 Estimated average burden hours per response. . . . . . .19.3 ------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-03907 The Empire Builder Tax Free Bond Fund -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 3435 Stelzer Road, Columbus, OH 43219 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) BISYS Fund Services 3435 Stelzer Road, Columbus, OH, 43219 -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 1-800-847-5886 Date of fiscal year end: February 29, 2005 Date of reporting period: August 31, 2004 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. Item 1. Reports to Stockholders. Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1). ---------------------------- [LOGO] EMPIRE BUILDER ---------------------------- ---------- 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 Dear Shareholder, We are pleased to present The Empire Builder Tax Free Bond Fund Semi-Annual Report for the six months ended August 31, 2004. The portfolio continues to have a good year. For the period January 1 through August 31, 2004 the Builder Class was up 1.68%, while the Premier Class was up 1.87%. As of August 31, 2004 the average maturity of the Fund was 4.56 years. Last year we shortened the maturity of the Fund, in order to reduce our maturity and interest rate risk for the portfolio. We will continue for the near future to keep the average life of the portfolio shorter because we are not optimistic about the long-term market. We are now in a rising interest rate environment, and our shorter average life should protect the market value of the Fund. Since June 30, 2004 the Federal Reserve has raised the Discount Rate three times, which now stands at 1.75%. In our opinion, The Empire Builder Tax Free Bond Fund is well positioned for the next year. The no-load structure continues to offer value to the shareholder because there is no charge to purchase units. We also recommend our automatic investment program (also known as dollar cost averaging*) that allows you to follow a disciplined investment plan. Please call the customer service desk at 1-800-847-5886 for information on how to participate. We look forward to helping you meet your investment needs. Sincerely, /s/ Seth M. Glickenhaus Seth M. Glickenhaus President ---------------------------------------------- *Average Annual Total Return ---------------------------- As of June 30, 2004 1 Year 5 Year 10 Year Builder Class -0.47% 5.01% 5.23% Premier Class -0.25% 5.30% 5.45%* ---------------------------------------------- For the reporting period March 1, 2004 through August 31, 2004 the Builder Class was up 0.51% and the Premier Class was up 0.62%. *Dollar cost averaging does not insure a profit and does not protect against loss in declining markets. An investor should consider his or her financial ability to continue making additional investments through periods of low share price levels. ---------------------------- [LOGO] EMPIRE BUILDER ---------------------------- ---------- 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 This report must be preceded or accompanied by a prospectus. For more complete information including charges and expenses, please call 1-800-847-5886 to receive a prospectus. Read the prospectus carefully before investing or sending money. The fund's income may be subject to certain state and local taxes and, depending on your tax status, the federal alternative minimum tax (AMT). As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees; and other Fund expenses This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from March 1, 2004 through August 31, 2004. Actual Expenses The table below provides information about actual account values and actual expenses. You may use the information below, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Beginning Ending Expense Paid Expense Ratio Account Value Account Value During Period* During Period 3/1/04 8/31/04 3/1/04 - 8/31/04 3/1/04 - 8/31/04 ------------- ------------- ---------------- ---------------- The Empire Builder Tax Free Bond Fund Builder Class $ 1,000.00 $ 1,005.10 $ 5.66 1.12% Premier Class 1,000.00 1,006.20 4.55 0.90%
Hypothetical Example for Comparison Purposes The table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Ending Expense Paid Expense Ratio Account Value Account Value During Period* During Period 3/1/04 8/31/04 3/1/04 - 8/31/04 3/1/04 - 8/31/04 ------------- ------------- ---------------- ---------------- The Empire Builder Tax Free Bond Fund Builder Class $ 1,000.00 $ 1,019.56 $ 5.70 1.12% Premier Class 1,000.00 1,020.67 4.58 0.90%
* Expenses are equal to the average account value times the Fund's annualized expense ratio multiplied by the number of days in the most recent fiscal half-year divided by the number of days in the fiscal year. Past performance does not guarantee future results. Not FDIC insured. May lose value. No bank guarantee. THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 (Unaudited)
Principal Fair Value Credit Ratings** Municipal Securities (99.7%) Amount (Note 2) ---------------- ---------------------------- ---------- ----------- New York City (7.8%) Aaa/AAA New York City, General Obligation, Series B, 5.25%, 8/1/2017, Callable 8/1/2007 @ 101, (AMBAC)........................ $ 750,000 $ 813,863 NR/AAA New York City, General Obligation, Series B, 5.125%, 8/1/2019, Callable 8/1/2010 @ 101, (FGIC)......................... 2,000,000 2,136,419 Aaa/AAA New York City, General Obligation, Series B, 5.375%, 8/1/2022, Callable 8/1/2007 @ 101, (MBIA)......................... 1,250,000 1,360,788 Aaa/AAA New York City, Health & Hospitals Corporation, Health System Revenue, Series A, 5.50%, 2/15/2018, Callable 2/15/2012 @ 100, (FSA)........................ 1,000,000 1,110,750 Aaa/AAA New York City Municipal Water Finance Authority, Water & Sewer System Revenue, 6.125%, 6/15/2020, Prerefunded 6/15/2005 @ 101....................................... 1,000,000 1,047,360 AA2/AA+ New York City Transitional Finance Authority, Future Tax Revenue, Series B, 5.25%, 11/15/2004, Non Callable......................... 300,000 302,424 Aaa/AAA New York City, General Obligation, Series B, Variable Rate, 1.34%, 8/15/2022*, Non Callable, (MBIA).................................. 2,000,000 2,000,000 ----------- Total New York City.................................................. 8,771,604 ----------- New York State Agencies (66.4%) Long Island Power Authority (6.2%) Baa1/A- Long Island Power Authority, Electric Systems Revenue, Series B, 3.00%, 12/1/2004, Non Callable.......................... 4,445,000 4,460,558 Aaa/AAA Long Island Power Authority, Electric Systems Revenue, Series A, 5.50%, 12/1/2012, Non Callable, (FSA)................... 1,210,000 1,404,495 Aaa/AAA Long Island Power Authority, Electric Systems Revenue, Series A, 5.00%, 9/1/2034, Callable 9/1/2014 @ 100, (AMBAC)....... 1,000,000 1,016,520 ----------- Total Long Island Power Authority.................................... 6,881,573 ----------- New York State Dormitory Authority (32.8%) A3/AA- Albany County Airport Project, State Service Contract, 5.25%, 4/1/2013, Callable 4/1/2008 @ 101................................. 1,200,000 1,288,584 NR/AAA Albany County Airport Project, State Service Contract, 5.25%, 4/1/2017, Callable 4/1/2008 @ 101, (MBIA)......................... 1,000,000 1,068,220 Aaa/AAA Augustana Lutheran Home for the Aged, Series A, 5.50%, 8/1/2020, Callable 8/1/2010 @ 101, (MBIA)(FHA).................... 920,000 1,008,412 Aaa/AAA Augustana Lutheran Home for the Aged, Series A, 5.50%, 8/1/2030, Callable 8/1/2010 @ 101, (MBIA)(FHA).............................. 750,000 795,465 Aaa/AAA Columbia University, Series B, 5.375%, 7/1/2018, Callable 7/1/2012 @ 100.................................................... 500,000 557,160 Aaa/AAA Columbia University, Series B, 5.375%, 7/1/2019, Callable 7/1/2012 @ 100.................................................... 1,000,000 1,107,870 Aaa/AAA Columbia University, Series B, 5.375%, 7/1/2020, Callable 7/1/2012 @ 100.................................................... 1,000,000 1,101,460
The accompanying notes are an integral part of the financial statements. 3 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 -- continued (Unaudited)
Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) ---------------- ------------------------------- ---------- ----------- New York State Agencies--continued New York State Dormitory Authority--continued Aaa/AAA Fashion Institue of Technology Student Housing, 5.00%, 7/1/2029, Callable 7/1/2014 @ 100, (FGIC)................................... $ 1,300,000 $ 1,327,248 Aaa/AAA Lutheran Medical Center, 5.00%, 8/1/2016, Callable 2/1/2013 @ 100.................................................... 985,000 1,070,124 Aaa/AAA Maimonides Medical Center, FHA Insured Mortgage Hospital Revenue, 5.00%, 8/1/2033, Callable 8/1/2014 @ 100, (MBIA)......... 535,000 544,181 Aaa/AAA Mount Sinai School of Medicine, 5.25%, 7/1/2013, Non Callable, (MBIA).............................................. 4,500,000 5,046,164 Aaa/AAA New York Medical College, 5.25%, 7/1/2013, Callable 7/1/2008 @ 101, (MBIA)............................................ 1,015,000 1,106,401 NR/AA- New York State Department of Health, 5.25%, 7/1/2014, Non Callable...................................................... 1,000,000 1,104,980 Aaa/AAA New York University, Series 2, 5.50%, 7/1/2018, Callable 7/1/2011 @ 100, (AMBAC)........................................... 500,000 560,560 NR/AAA Park Ridge Housing, Inc., 6.375%, 8/1/2020, Callable 8/1/2010 @ 101, (FNMA)............................................ 1,000,000 1,136,320 NR/AAA Park Ridge Housing, Inc., 6.50%, 8/1/2025, Callable 8/1/2010 @ 101, (FNMA) ........................................... 1,470,000 1,665,863 Aaa/NR Rochester Institute of Technology, Series A, 5.25%, 7/1/2016, Callable 7/1/2012 @ 100, (AMBAC).................................. 2,045,000 2,252,772 Aaa/NR Rochester Institute of Technology, Series A, 5.25%, 7/1/2017, Callable 7/1/2012 @ 100, (AMBAC).................................. 2,155,000 2,354,079 Aaa/AAA School Districts Financing, Series C, 5.25%, 4/1/2021, Callable 10/1/2012 @ 100, (MBIA).................................. 1,300,000 1,398,176 Aaa/AAA Special Acts School Districts Program, 6.00%, 7/1/2019, Callable 7/1/2005 @ 102, (MBIA)............................................ 3,540,000 3,732,788 NR/AAA State University, 5.375%, 7/1/2021, Callable 7/01/2008 @ 102, (MBIA)........................................... 865,000 948,542 NR/AAA State University, 5.375%, 7/1/2021, Prerefunded 7/01/2008 @ 102, (MBIA)........................................... 325,000 368,778 Aaa/AAA Upstate Community Colleges, Series A, 6.00%, 7/1/2019, Callable 7/1/2010 @ 101, (FSA)............................................. 1,000,000 1,157,780 Aaa/AAA Upstate Community Colleges, Series A, 6.00%, 7/1/2020, Callable 7/1/2010 @ 101, (FSA)............................................. 845,000 976,372 NR/AAA Westchester County, Court Facilities, 5.25%, 8/1/2018, Callable 2/1/2009 @ 101, (MBIA)............................................ 2,800,000 2,989,420 ----------- Total New York State Dormitory Authority............................. 36,667,719 ----------- New York State Energy, Research & Development (0.9%) Aaa/AAA Western New York Nuclear Service Center, Series PJ, 5.40%, 4/1/2005, Non Callable, (CAPMAC).................................. 1,020,000 1,044,041 -----------
The accompanying notes are an integral part of the financial statements. 4 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 -- continued (Unaudited)
Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) ---------------- ------------------------------- ---------- ----------- New York State Environmental Facilities Corp. (1.5%) Aaa/AAA State Water Pollution Control Revenue, Revolving Fund, Pooled Loan, 5.90%, 1/15/2018, Prerefunded 1/15/2006 @ 102, (POL CTL-SRF).............................................. $ 785,000 $ 846,466 Aaa/AAA State Water Pollution Control Revenue, Revolving Fund, Pooled Loan, 5.90%, 1/15/2018, Callable 1/15/2006 @ 102, (POL CTL-SRF)..................................................... 725,000 777,128 ----------- Total New York State Environmental Facilities Corporation............ 1,623,594 ----------- New York State Medical Care Facilities Finance Agency (1.0%) Aaa/AAA Hospital & Nursing Home, St. Vincent's Hospital Project, 6.20%, 2/15/2021, Callable 2/15/2005 @ 101, (AMBAC)(FHA)................. 1,060,000 1,084,242 ----------- New York State Metropolitan Transportation Authority (14.9%) A2/A Metropolitan Transportation Authority Revenue, Transportation Revenue, Series A, 3.00%,11/15/2004, Non Callable................. 250,000 250,808 A3/AA- Metropolitan Transportation Authority Revenue, State Service Contract Series B, 5.00%, 7/1/2005, Non Callable.................. 3,000,000 3,084,750 Aaa/AAA Metropolitan Transportation Authority Revenue, Transportation Revenue, Series A, 5.00%, 11/15/2006, Non Callable, (FSA)......... 12,000,000 12,816,240 Aa3/AA- Triborough Bridge & Tunnel Authority Revenue, General Revenue, Series B, 2.00%, 11/15/2004, Non Callable......................... 525,000 525,798 ----------- Total New York State Metropolitan Transportation Authority (0.7%)................................................... 16,677,596 ----------- New York State Thruway Authority (5.4%) Aaa/AAA Highway & Bridge Trust Fund Bonds, Series A, 5.25%, 4/1/2006, Non Callable, (FGIC).............................................. 1,500,000 1,584,225 Aaa/AAA Highway & Bridge Trust Fund Bonds, Series A, 5.50%, 4/1/2014 Callable 4/1/2011 @ 101, (FGIC)................................... 1,500,000 1,697,190 Aaa/AAA Highway & Bridge Trust Fund Bonds, Series B, 5.25%, 4/1/2017, Callable 10/1/2011 @ 100, (MBIA).................................. 2,500,000 2,719,800 ----------- Total New York State Thruway Authority............................... 6,001,215 ----------- New York State Urban Development Corporation (2.1%) A3/AA- Empire State Development Corporation, University Facilities Grants, 6.00%, 1/1/2009, Non Callable............................. 905,000 1,019,473 A3/AA- Community Enhancement Facilities, Series A, 5.00%, 4/1/2005, Non Callable...................................................... 1,270,000 1,295,908 ----------- Total New York State Urban Development Corporation................... 2,315,381 ----------- Total New York State Agencies........................................ 74,263,900
The accompanying notes are an integral part of the financial statements. 5 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 -- continued (Unaudited)
Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) ---------------- ------------------------------- ---------- ----------- Other New York State Bonds (22.6%) Aaa/AAA Albany County, Airport Authority, Airport Revenue, Series A, 4.00%, 12/15/2004, Non Callable, (FSA)............................ $ 460,000 $ 463,464 A3/NR Albany Housing Authority, Limited Obligation, 6.25%, 10/1/2012, Callable 10/1/2005 @ 102.......................................... 1,000,000 1,055,210 Aaa/AAA Attica, Central School District, General Obligation, 3.125%, 6/15/2005, Non Callable, (FGIC)................................... 425,000 430,784 Aaa/NR Binghamton, General Obligation, 2.50%, 3/15/2005, Non Callable, (FSA) .............................................. 510,000 513,432 Aaa/AAA Buffalo Municipal Water Finance Authority, Water System Revenue, 5.75%, 7/1/2019, Callable 7/1/2005 @ 102, (FGIC).................. 500,000 526,210 Aaa/AAA Buffalo Sewer System Revenue Authority, Series I, 4.00%, 7/1/2005, Non Callable, (FSA)..................................... 1,000,000 1,021,309 Aaa/NR Chittenango, Central School District, General Obligation, 3.00%, 6/15/2005, Non Callable, (FSA).................................... 510,000 516,446 Aaa/NR Corning, City School District, General Obligation, 5.00%, 6/15/2012, Non Callable, (FSA)............................................... 1,000,000 1,118,720 Aaa/NR Corning, City School District, General Obligation, 5.00%, 6/15/2013, Callable 6/15/2012 @ 100, (FSA)................................... 970,000 1,071,811 Aaa/NR Corning, City School District, General Obligation, 5.00%, 6/15/2014, Callable 6/15/2012 @ 100, (FSA)................................... 600,000 661,254 Aaa/AAA Evans, General Obligation, 6.80%, 4/15/2012, Non Callable, (AMBAC)............................................. 225,000 277,475 Aaa/AAA Evans, General Obligation, 6.80%, 4/15/2013, Non Callable, (AMBAC)............................................. 225,000 278,865 Aaa/NR Fayetteville Manlius, Central School District, General Obligation, 5.00%, 6/15/2016, Callable 6/15/2012 @ 101, (FGIC)................ 375,000 409,178 Aaa/NR Ilion, Central School District, General Obligation, Series B, 5.50%, 6/15/2015, Callable 6/15/2012 @ 101, (FGIC)....................... 550,000 628,546 Aaa/NR Ilion, Central School District, General Obligation, Series B, 5.50%, 6/15/2016, Callable 6/15/2012 @ 101, (FGIC)....................... 500,000 565,925 NR/AAA Lillian Cooper Housing Development Corporation Mortgage Revenue, Series A, 7.00%, 1/1/2022, Callable 9/10/2004 @ 100, (FNMA)(FHA).................................................. 1,070,000 1,071,241 Aaa/AAA Mount Sinai Union Free School District, General Obligation, 6.20%, 2/15/2012, Non Callable, (AMBAC).................................. 1,065,000 1,266,722 Aaa/NR Nassau County, General Obligation, Series D, 5.25%, 9/1/2004, Non Callable, (FSA)............................................... 420,000 420,042 Aaa/AAA Niagara Falls Public Water Authority, Water & Sewer System Revenue, Series A, 5.50%, 7/15/2028, Callable 7/15/2006 @ 100, (MBIA)........................................... 1,000,000 1,061,700 Aaa/AAA North Hempstead, General Obligation, Series B, 6.375%, 4/1/2009, Non Callable, (FGIC).............................................. 570,000 658,555 Aaa/AAA North Hempstead, General Obligation, Series B, 6.40%, 4/1/2010, Non Callable, (FGIC).............................................. 560,000 658,050
The accompanying notes are an integral part of the financial statements. 6 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 -- continued (Unaudited)
Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) ---------------- ------------------------------- ---------- ----------- Other New York State Bonds--continued NR/AAA Oneida County Industrial Development Agency, Mohawk Valley Network, St. Luke's Memorial Hospital, 5.00%, 1/1/2013, Callable 1/1/2008 @ 101, (FSA).................................... $ 2,000,000 $ 2,124,819 Aaa/NR Oyster Bay, General Obligation, 5.00%, 3/15/2011, Non Callable, (FSA)............................................... 430,000 478,246 Aaa/NR Poughkeepsie Town, General Obligation, Series B, 2.00%, 12/15/2004, Non Callable, (MBIA).................................. 635,000 636,391 Aaa/NR Poughkeepsie Town, General Obligation, Series B, 2.00%, 12/15/2005, Non Callable, (MBIA).................................. 610,000 613,623 Aaa/NR Southern Cayuga, Central School District, General Obligation, 5.00%, 5/15/2014, Callable 5/15/2012 @ 100, (FSA)................. 400,000 440,456 Aaa/AAA Suffolk County, General Obligation, Series C, 5.00%, 9/15/2015, Callable 9/15/2008 @ 101, (FGIC).................................. 965,000 1,034,924 Aaa/AAA Suffolk County, General Obligation, Series C, 5.00%, 9/15/2016, Callable 9/15/2008 @ 101, (FGIC).................................. 550,000 587,703 Aaa/AAA Suffolk County, General Obligation, Series C, 5.00%, 9/15/2017, Callable 9/15/2008 @ 101, (FGIC).................................. 480,000 511,219 Aaa/AAA Suffolk County, General Obligation, Series D, 5.00%, 11/1/2015, Callable 11/1/2008 @ 101, (FGIC).................................. 1,125,000 1,208,565 Aaa/AAA Suffolk County, General Obligation, Series D, 5.00%, 11/1/2016, Callable 11/1/2008 @ 101, (FGIC).................................. 1,110,000 1,187,966 Aaa/AAA Warren & Washington Counties Industrial Development Agency, Civic Facilities Revenue, Glens Falls Hospital Project, Series B, 2.50%, 12/1/2004, Non Callable, (FSA)............................. 1,845,000 1,850,498 ----------- Total Other New York State Bonds..................................... 25,349,349 ----------- Puerto Rico (4.5%) Baa1/A- Puerto Rico Commonwealth, General Obligation, 5.00%, 7/1/2030, Mandatory Put 7/1/2012 @ 100...................................... 1,000,000 1,083,360 Aaa/AAA Puerto Rico Electric Power Authority Revenue, Series W, 6.50%, 7/1/2005, Non Callable, (MBIA) ........................... 750,000 781,673 A3/A- Puerto Rico Electric Power Authority Revenue, Series OO, 4.00%, 7/1/2006, Non Callable..................................... 500,000 518,765 Aaa/AAA Puerto Rico Municipal Finance Agency Revenue, Series A, 4.25%, 8/1/2005, Non Callable, (FSA).............................. 2,195,000 2,253,036 Aaa/AAA Puerto Rico Municipal Finance Agency, General Obligation, Series B, 5.00%, 8/1/2005, Non Callable, (FSA).............................. 400,000 413,284 ----------- Total Puerto Rico.................................................... 5,050,118 ----------- Total Municipal Securities (Cost $106,637,696)....................... 111,466,432 -----------
The accompanying notes are an integral part of the financial statements. 7 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 -- continued (Unaudited)
Principal Fair Value Credit Ratings** Municipal Securities--continued Amount (Note 2) ---------------- ------------------------------- ---------- ----------- Short Term Investments (1.4%) Dreyfus New York Municipal Cash Management Fund....................... $ 1,610,000 $ 1,610,000 ----------- Total Investments (Cost $108,247,696) (a) -- 101.1%................... $113,076,432 Other liabilities -- (1.1%)........................................... (1,211,507) ----------- NET ASSETS -- 100.0%.................................................. $111,864,925 ============ ---------- Percentages indicated are based on net assets of $111,864,925. (a) Represents cost for financial reporting purposes, is substantially the same for federal income tax purposes, and differs from fair value by net unrealized appreciation/depreciation as follows: Unrealized appreciation $4,873,070 Unrealized depreciation (44,334) ---------- Net unrealized appreciation $4,828,736 ========== * The rate reflected is the rate in effect August 31, 2004. The maturity date reflected is the final maturity date. ** Credit Ratings given by Moody's Investors Service Inc. and Standard & Poor's Corporation (unaudited).
The accompanying notes are an integral part of the financial statements. 8 THE EMPIRE BUILDER TAX FREE BOND FUND Portfolio of Investments -- August 31, 2004 -- continued Moody's Standard & Poor's Aaa AAA Instrument judged to be of the highest quality and carrying the smallest amount of investment risk. Aa AA Instrument judged to be of high quality by all standards. A A Instrument judged to be adequate quality by all standards. Baa BBB Instrument judged to be moderate quality by all standards. NR NR Not Rated. In the opinion of the Investment Adviser, instrument judged to be of comparable investment quality to rated securities which may be purchased by the Fund. For items possessing the strongest investment attributes of their category, Moody's gives that letter rating followed by a number. The Standard & Poor's ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. Abbreviations used in this statement: AMBAC Insured as to principal and interest by the American Municipal Bond Assurance Corporation. CAPMAC Insured as to principal and interest by Capital Markets Assurance Corp. FGIC Insured as to principal and interest by the Financial Guarantee Insurance Corporation. FHA Insured as to principal and interest by the Federal Housing Administration. FNMA Insured as to principal and interest by the Federal National Mortgage Association. FSA Insured as to principal and interest by Financial Security Assurance. MBIA Insured as to principal and interest by the Municipal Bond Insurance Association. POL CTL -- SRF Insured as to principal and interest by the Pollution Control State Revenue Fund. The accompanying notes are an integral part of the financial statements. 9 THE EMPIRE BUILDER TAX FREE BOND FUND Statement of Assets and Liabilities August 31, 2004 (Unaudited)
Assets: Investments in securities, at fair value (cost $108,247,696) (Note 2)..................... $113,076,432 Cash...................................................................................... 10,462 Interest and dividend receivable.......................................................... 1,181,310 Prepaid expenses ......................................................................... 10,485 ------------ Total Assets............................................................................ 114,278,689 Liabilities: Dividends payable......................................................... $ 48,707 Payable for investments purchased......................................... 2,280,108 Advisory fee payable (Note 4)............................................. 37,024 Administrative services fee payable (Note 4).............................. 2,969 Other accrued expenses.................................................... 44,956 ----------- Total Liabilities....................................................... 2,413,764 ------------ Net Assets................................................................... $111,864,925 ============ Net Assets: Net assets consist of: Capital................................................................................... $106,370,591 Undistributed net investment income....................................................... 47,975 Net realized gains from investments....................................................... 617,623 Net unrealized appreciation from investments.............................................. 4,828,736 ------------ Net Assets.............................................................................. $111,864,925 ============ Builder Class: Net Assets................................................................ $54,538,076 Shares of Beneficial Interest Outstanding................................. 3,030,798 ----------- Builder Class -- Net Asset Value (offering and redemption price per share)............................... $ 17.99 =========== Premier Class: Net Assets................................................................ $57,326,849 Shares of Beneficial Interest Outstanding................................. 3,185,121 ----------- Premier Class -- Net Asset Value (offering and redemption price per share)............................... $ 18.00 ===========
The accompanying notes are an integral part of the financial statements. 10 THE EMPIRE BUILDER TAX FREE BOND FUND Statement of Operations For the Period March 1, 2004 through August 31, 2004 (Unaudited)
Investment Income: Interest.................................................................................. $2,007,560 Dividend ................................................................................. 7,215 ---------- Total Investment Income................................................................... 2,014,775 Expenses: Advisory fees (Note 4)................................................... $ 221,098 Administrative services fees (Note 4)..................................... 100,832 Transfer agency fees (Builder Class) (Note 4)............................. 84,710 Transfer agency fees (Premier Class) (Note 4)............................. 24,591 Custody fees.............................................................. 19,676 Fund accounting fees (Note 4)............................................. 32,654 Trustees' fees ........................................................... 13,756 Other fees................................................................ 78,171 ----------- Total Expenses.......................................................... 575,488 Less: Custody fee credit................................................ (4,447) ----------- Total Net Expenses........................................................................ 571,041 ---------- Net Investment Income........................................................................ 1,443,734 ---------- Realized/Unrealized Gains (Losses) on Investments (Notes 2 and 3) Net realized gains from investment transactions........................... 128,865 Change in unrealized appreciation/depreciation from investment transactions............................................ (1,027,646) ----------- Net realized/unrealized gains (losses) from investment transactions..................... (898,781) ---------- Change in net assets resulting from operations............................................... $ 544,953 ==========
The accompanying notes are an integral part of the financial statements. 11 THE EMPIRE BUILDER TAX FREE BOND FUND Statements of Changes in Net Assets
For the Period March 1,2004 through August 31,2004 Year Ended (Unaudited) February 29, 2004 ------------ ----------------- From Investment Activities: Operations: Net investment income ..................................................... $ 1,443,734 $ 3,448,263 Net realized gains from investment transactions............................ 128,865 1,113,657 Change in unrealized appreciation/depreciation from investment transactions................................................. (1,027,646) 339,136 ------------ ------------ Change in net assets resulting from operations.......................... 544,953 4,901,056 ------------ ------------ Distributions to shareholders from: Net investment income -- Builder Class...................................... (665,202) (1,593,260) Net investment income -- Premier Class...................................... (773,482) (1,842,382) Net realized gains from investment transactions -- Builder Class............ -- (559,031) Net realized gains from investment transactions -- Premier Class............ -- (610,097) ------------ ------------ Total distributions..................................................... (1,438,684) (4,604,770) ------------ ------------ Capital Transactions: Proceeds from shares issued -- Builder Class................................ 1,450,520 2,865,115 Proceeds from shares issued -- Premier Class................................ 906,891 1,833,457 Dividends reinvested -- Builder Class....................................... 582,471 1,929,811 Dividends reinvested -- Premier Class....................................... 650,881 2,146,150 Value of shares redeemed -- Builder Class................................... (2,585,479) (6,113,946) Value of shares redeemed -- Premier Class................................... (4,798,974) (4,107,168) ------------ ------------ Change in net assets from capital share transactions.................... (3,793,690) (1,446,581) ------------ ------------ Change in net assets.................................................... (4,687,421) (1,150,295) Net Assets: Beginning of period........................................................ 116,552,346 117,702,641 ------------ ------------ End of period.............................................................. $111,864,925 $116,552,346 ============ ============ Share Transactions: Issued -- Builder Class..................................................... 81,041 158,501 Issued -- Premier Class..................................................... 50,862 101,203 Reinvested -- Builder Class................................................. 32,724 107,001 Reinvested -- Premier Class................................................. 36,555 118,931 Redeemed -- Builder Class................................................... (145,371) (338,191) Redeemed -- Premier Class................................................... (269,811) (227,524) ------------ ------------ Change in shares........................................................... (214,000) (80,079) ------------ ------------ Undistributed net investment income........................................ $ 47,975 $ 42,925 ============ ============
The accompanying notes are an integral part of the financial statements. 12 THE EMPIRE BUILDER TAX FREE BOND FUND Financial Highlights For a share of beneficial interest outstanding throughout each period
For the Period March 1, 2004 Through August 31, 2004 Year Ended Year Ended Year Ended (Unaudited) --------------------- --------------------- ---------------------- --------------------- February 29, 2004 February 28, 2003 February 28, 2002 Builder Premier Builder Premier Builder Premier Builder Premier Class Class Class Class Class Class Class Class ---------- --------- --------- --------- --------- --------- --------- --------- Net Asset Value, Beginning of Period .................. $18.12 $18.13 $18.08 $18.08 $17.80 $17.80 $17.69 $17.69 ------ ------ ------ ------ ------ ------ ------ ------ Investment Activities: Net investment income ................ 0.21 0.23 0.51 0.55 0.61 0.66 0.72 0.77 Net realized/ unrealized gains/ (losses) on investments ........... (0.13) (0.13) 0.22 0.23 0.54 0.54 0.27 0.27 ------ ------ ------ ------ ------ ------ ------ ------ Total from Investment Operations .............. 0.08 0.10 0.73 0.78 1.15 1.20 0.99 1.04 ------ ------ ------ ------ ------ ------ ------ ------ Distributions: Net investment income ................ (0.21) (0.23) (0.51) (0.55) (0.61) (0.66) (0.71) (0.76) Net realized capital gains ......... -- -- (0.18) (0.18) (0.26) (0.26) (0.17) (0.17) ------ ------ ------ ------ ------ ------ ------ ------ Total distributions ......... (0.21) (0.23) (0.69) (0.73) (0.87) (0.92) (0.88) (0.93) ------ ------ ------ ------ ------ ------ ------ ------ Net Asset Value, End of Period ........... $17.99 $18.00 $18.12 $18.13 $18.08 $18.08 $17.80 $17.80 ====== ====== ====== ====== ====== ====== ====== ====== Total Return (a) .......... 0.51% 0.62% 4.16% 4.40% 6.62% 6.90% 5.74% 6.01% Ratios/ Supplementary Data: Net Assets, End of Period (in thousands) .......... $54,538 $57,327 $55,504 $61,048 $56,677 $61,025 $54,253 $59,910 Ratios of Net Investment Income to Average Net Assets (b) ............ 2.44% 2.66% 2.85% 3.03% 3.44% 3.71% 4.04% 4.30% Ratios of Expenses to Average Net Assets (b) ............ 1.12% 0.90% 1.04% 0.86% 1.16% 0.89% 1.14% 0.88% Ratios of Expenses to Average Net Assets* (b) ........... 1.13% 0.91% 1.05% 0.87% 1.16% 0.89% 1.14% 0.88% Portfolio Turnover Rate (c) .............. 71.25% 71.25% 202.77% 202.77% 213.97% 213.97% 98.29% 98.29% Year Ended Year Ended ------------------ ------------------- February 28, 2001 February 29, 2000 Builder Premier Builder Premier Class Class Class Class -------- -------- --------- -------- Net Asset Value, Beginning of Period .................. $16.32 $16.32 $17.88 $17.88 ------ ------ ------ ------ Investment Activities: Net investment income ................ 0.73 0.79 0.78 0.84 Net realized/ unrealized gains/ (losses) on investments ........... 1.37 1.37 (1.55) (1.56) ------ ------ ------ ------ Total from Investment Operations .............. 2.10 2.16 (0.77) (0.72) ------ ------ ------ ------ Distributions: Net investment income ................ (0.73) (0.75) (0.76) (0.81) Net realized capital gains ......... -- -- (0.03) (0.03) ------ ------ ------ ------ Total distributions ......... (0.73) (0.79) (0.79) (0.84) ------ ------ ------ ------ Net Asset Value, End of Period ........... $17.69 $17.69 $16.32 $16.32 ====== ====== ====== ====== Total Return (a) .......... 13.15% 13.53% (4.39)% (4.12)% Ratios/ Supplementary Data: Net Assets, End of Period (in thousands) .......... $53,937 $60,418 $50,347 $55,636 Ratios of Net Investment Income to Average Net Assets (b) ............ 4.31% 4.65% 4.47% 4.75% Ratios of Expenses to Average Net Assets (b) ............ 1.20% 0.86% 1.08% 0.79% Ratios of Expenses to Average Net Assets* (b) ........... 1.22% 0.88% 1.12% 0.83% Portfolio Turnover Rate (c) .............. 121.96% 121.96% 90.84% 90.84%
---------- * The ratio does not include a reduction of expenses for custodian fee credits of cash balances maintained with the custodian. (a) Not annualized for periods less than one year. (b) Annualized for periods less than one year. (c) Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. The accompanying notes are an integral part of the financial statements. 13 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements 1. Organization: The Empire Builder Tax Free Bond Fund (the "Fund") was established as a Massachusetts business trust by an Agreement and Declaration of Trust dated September 30, 1983. The Fund is registered under the Investment Company Act of 1940, as amended, as an open-end, non-diversified investment company. The Fund has an unlimited number of shares authorized with no par value. The Fund offers two classes of shares; the Builder Class and the Premier Class. Each class of shares outstanding bears the same dividend, liquidation and other rights and conditions, except that the Builder Class shares and the Premier Class shares bear separate transfer agency expenses. Each class of shares has exclusive voting rights with respect to matters affecting only that class. Under the Fund's organizational documents, its' Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Fund enters into contracts with their vendors and others that provide for general indemnifications. The Fund's maximum exposure under these arrrangements is unknown as this would involve future claims that may be made against the Fund. 2. Significant Accounting Policies: The following is a summary of significant accounting policies followed by the Fund in the preparation of its' financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America. Use of Estimates Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ from these amounts. Security Valuation Tax-exempt securities are valued at their fair value as determined by an independent pricing service approved by the Fund's Board of Trustees. The pricing service uses information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining fair value. The methods used by the pricing service and the quality of valuations so established are reviewed by Officers of the Fund and Glickenhaus & Co. (the "Adviser"), under the general supervision of the Trustees of the Fund. Securities for which quotations are readily available are stated at fair value using procedures approved by the Trustees of the Fund. Short-term debt securities having remaining maturities of sixty (60) days or less are stated at amortized cost, which approximates market value. Investments in investment companies are reported at their respective net asset values as reported by those companies. 14 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued Security Transactions and Investment Income Security transactions are accounted for no later than one business day after trade date. However, for financial reporting purposes, security transactions are accounted for on trade date. Interest income, which includes amortization of premium and accretion of discounts, is accrued as earned. Realized gains and losses from security transactions and unrealized appreciation and depreciation of investments are determined on the basis of identified cost. Taxes The Fund qualifies and intends to continue to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code, and to distribute substantially all of its tax-exempt and taxable income. Therefore, no federal income tax provision is required. In addition, by distributing during each calendar year substantially all of its net investment income, capital gains and certain other amounts, if any, the Fund will not be subject to a federal excise tax. Distributions and Dividends Distributions to shareholders from net investment income are declared daily and paid monthly. The Fund also distributes at least annually substantially all net capital gains, if any, realized from portfolio transactions. The amounts of distributions from net investment income and net realized gains are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (i.e. reclass of market discounts, gain/loss, paydowns, and distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences do not require reclassification. Determination of Net Asset Value and Allocation of Income/Expenses In calculating net asset value per share of each class, investment income and expenses (other than class specific expenses charged to a class), are allocated daily to each class of shares based on the value of outstanding shares. Realized and unrealized gains and losses are allocated on relative net assets. Other The Fund maintains a cash balance with its custodian and receives a reduction of its custody fees and expenses for the amounts of interest earned on such uninvested cash balance. There was no effect on net investment income. The Fund could have invested such cash amounts in an income-producing asset if it had not agreed to a reduction of fees or expenses under the expense offset arrangement with the Fund's custodian. 15 THE EMPIRE BUILDER TAX FREE BOND FUND Notes to Financial Statements -- continued 3. Purchases and Sales of Investment Securities: Purchases and sales of investment securities, excluding short-term investments, during the period ended August 31, 2004, amounted to $70,445,635 and $65,037,455, respectively. 4. Advisory Fees and Other Related Party Transactions: The Fund retains the Adviser to act as investment adviser pursuant to an Investment Advisory Agreement. As compensation for its advisory services, the Adviser receives a fee computed daily and paid monthly, at the annual rates of 0.40% of the first $100,000,000 of average daily net assets and 0.3333% of any excess over $100,000,000. Glickenhaus has agreed to a reduction of advisory fees to the extent that the Fund's expenses, including the advisory fees, exceed 1.50% of the Fund's average annual net assets. For the period ended August 31, 2004, there was no reduction of advisory fees pursuant to this agreement. BISYS Fund Services Ohio, Inc. ("BISYS Ohio" or the "Administrator"), and BISYS Fund Services ("BISYS") are subsidiaries of the BISYS Group, Inc., serves as the Fund's administrator, transfer agent, fund accountant. BISYS Ohio and BISYS receives compensation for administration and fund accounting services at a rate of .15% and .03%, respectively, of the average daily net assets of the Fund (subject to certain minimum amounts). Fees received for transfer agency services are class specific and are based on the number of accounts per class. All fees are accrued daily and paid monthly. In addition, BISYS provides an employee to serve as Chief Compliance Officer for the Fund including providing certain related services, for which it receives an additional fee. Certain Officers and Trustees of the Trust are affiliated with the Adviser or the Administrator. Such Officers and Trustees receive no compensation from the Fund for serving in their respective roles, except the Chief Compliance Officer. Each four non-interested Trustees who served both on the Board and the audit committee were compensated $4,000 ($16,000 in total) in meeting and retainer fees during the period ended August 31, 2004, plus reimbursement for certain expenses. Other Information A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling 1-800-847-5886 and (ii) on the Securities and Exchange Commission's website at http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, 2004 is available (i) without charge, upon request, by calling 1-800-847-5886 and (ii) on the Commission's website at http://www.sec.gov. 16 [LOGO] EMPIRE BUILDER 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 [LOGO] EMPIRE BUILDER TAX FREE BOND FUND Semi-Annual Report August 31, 2004 Investment Adviser and Distributor Glickenhaus & Co. 6 East 43rd Street New York, New York 10017 Administrator BISYS Fund Services Limited Partnership 3435 Stelzer Road Columbus, Ohio 43219 Transfer and Shareholder Servicing Agent BISYS Fund Services Ohio, Inc. 3435 Stelzer Road Columbus, Ohio 43219 Custodian State Street Bank & Trust Co. 800 Pennsylvania Avenue 5th Floor Kansas City, MO 64105-1307 Legal Counsel Ropes & Gray One International Place Boston, Massachusetts 02110 Independent Accountants PricewaterhouseCoopers LLP 100 E. Broad Street Columbus, Ohio 43215 Customer Service 3435 Stelzer Road Columbus, Ohio 43219 1-800-847-5886 This report is submitted for the information of the shareholders of the Empire Builder Tax Free Bond Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus, obtainable from an investment dealer, which includes information regarding the Fund's objectives and policies, record, management, sales commission and other data. 531801 Item 2. Code of Ethics. Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so. Not applicable - only for annual reports. The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 11(a)(1), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item. If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver. During the period covered by the report, with respect to the registrant's code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions; there have been no amendments to, nor any waivers granted from, a provision that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item 2. Item 3. Audit Committee Financial Expert. (a) (1) Disclose that the registrant's board of directors has determined that the registrant either: (i) Has at least one audit committee financial expert serving on its audit committee; or (ii) Does not have an audit committee financial expert serving on its audit committee. (2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is "independent." In order to be considered "independent" for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or (ii) Be an "interested person" of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)). (3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert. Not applicable - only for annual reports. Item 4. Principal Accountant Fees and Services. (a) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. (b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (d) Disclose, under the caption All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category. (e) (1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. (2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. (f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees. (g) Disclose the aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant. (h) Disclose whether the registrant's audit committee of the board of directors has considered whether the provision of nonaudit services that were rendered to the registrant's investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. Not applicable - only for annual reports. Item 5. Audit Committee of Listed Registrants. (a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant's audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state. (b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption from the listing standards for all audit committees. Not applicable. Item 6. Schedule of Investments. File Schedule I - Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in ss. 210.12-12 of Regulation S-X, unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form. Not applicable. Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company's investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company's investment adviser, or any other third party, that the company uses, or that are used on the company's behalf, to determine how to vote proxies relating to portfolio securities. Not applicable. Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. If the registrant is a closed-end management investment company, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant's equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781). Not applicable. Item 9. Submission of Matters to a Vote of Security Holders. Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. Not applicable. Item 10. Controls and Procedures. (a) Disclose the conclusions of the registrant's principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). The registrant's principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and procedures are adequately designed and are operating effectively to ensure that information required to be disclosed by the registrant on Form N-CSR is (i) accumulated and communicated to the investment company's management, including its certifying officers, to allow timely decisions regarding required disclosure; and (ii) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) Disclose any change in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11. Exhibits. (a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit. Not applicable - Only effective for annual reports. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2). Certifications pursuant to Rule 30a-2(a) are attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by rule 30a-2(b) under the Act as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant incorporates it by reference. Certifications pursuant to Rule 30a-2(b) are furnished herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The Empire Builder Tax Free Bond Fund By (Signature and Title)* /s/ Seth M. Glickenhaus ------------------------------ Seth M. Glickenhaus, President Date November 5, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Seth M. Glickenhaus ------------------------------ Seth M. Glickenhaus, President Date November 5, 2004 By (Signature and Title)* /s/ Troy A. Sheets ------------------------------ Troy A. Sheets, Treasurer Date November 5, 2004