BBH U.S. EQUITY Portfolio
Portfolio of Investments
October 31, 2000
Shares Value
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COMMON STOCKS (100.1%)
BASIC MATERIALS (1.7%)
31,420 Alcoa, Inc. ................................ $ 901,361
26,080 International Paper Co. .................... 955,180
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TOTAL BASIC MATERIALS ...................... 1,856,541
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CAPITAL GOODS/DURABLES (8.7%)
103,260 General Electric Co. ....................... 5,659,939
23,350 Solectron Corporation* ..................... 1,027,400
26,100 Dover Corp. ................................ 1,107,619
26,280 Illinois Tool Works, Inc. .................. 1,460,183
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TOTAL CAPITAL GOODS/
DURABLES .................................. 9,255,141
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CONSUMER NON-DURABLES (5.5%)
20,860 Avon Products, Inc. ........................ 1,011,710
29,510 Coca Cola Co. .............................. 1,781,666
28,800 Estee Lauder Companies, Inc. ............... 1,337,400
24,350 Procter & Gamble Co. ....................... 1,739,503
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TOTAL CONSUMER
NON-DURABLES .............................. 5,870,279
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ENERGY (6.2%)
47,083 Exxon Mobile Corp. ......................... 4,199,215
57,540 Williams Companies, Inc. ................... 2,405,891
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TOTAL ENERGY ............................... 6,605,106
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FINANCE (17.5%)
23,480 American Express Co. ....................... 1,408,800
35,027 American International Group ............... 3,432,646
52,100 Bank of New York Co, Inc. .................. 2,999,006
59,423 Citigroup, Inc. ............................ 3,127,135
29,265 Fannie Mae ................................. 2,253,405
63,160 Fleetboston Financial Corp. ................ 2,400,080
29,500 Merrill Lynch & Co., Inc. .................. 2,065,000
20,830 SunTrust Banks, Inc. ....................... 1,016,764
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TOTAL FINANCE .............................. 18,702,836
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HEALTH CARE (11.8%)
44,255 Bristol Myers Squibb Co. ................... 2,696,789
21,350 Guidant Corp.* ............................. 1,130,216
33,650 Lilly (Eli) & Co. .......................... 3,007,469
31,360 Medtronic, Inc. ............................ 1,703,240
49,186 Pharmacia Corp. ............................ 2,705,230
11,190 PE Corp. ................................... 1,309,230
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TOTAL HEALTH CARE .......................... 12,552,174
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RETAIL (6.4%)
15,650 Best Buy Co, Inc.* ......................... 785,434
43,710 Costco Wholesale Corp.* .................... 1,600,879
31,400 CVS Corp. .................................. 1,662,238
31,140 Gap, Inc. .................................. 803,801
44,262 Home Depot Inc. ............................ 1,903,266
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TOTAL RETAIL ............................... 6,755,618
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SERVICES (12.3%)
25,970 Cox Communications, Inc.* .................. 1,144,303
31,490 New York Times Co. (Class A) ............... 1,157,258
51,170 Qwest Communications
International, Inc ......................... 2,488,141
43,510 Sprint Corp. ............................... 1,109,505
35,850 Sprint Corp. PCS Group* .................... 1,366,781
29,510 Time Warner, Inc. .......................... 2,240,104
32,024 Viacom, Inc. (Class B)* .................... 1,821,365
94,790 Mcleod, Inc.* .............................. 1,824,708
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TOTAL SERVICES ............................. 13,152,165
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TECHNOLOGY (29.1%)
48,690 Automatic Data Processing, Inc. ............. 3,180,066
28,520 Computer Associates
International, Inc .......................... 909,075
62,700 Microsoft Corp.* ............................ 4,318,462
72,820 Cisco Systems, Inc.* ........................ 3,923,177
36,450 Sun Microsystems, Inc.* ..................... 4,041,394
22,060 Applied Materials, Inc.* .................... 1,171,938
43,980 Intel Corp. ................................. 1,979,100
15,450 KLA Tencor Corp.* ........................... 522,403
<PAGE>
BBH U.S. EQUITY Portfolio
PORTFOLIO OF INVESTMENTS
October 31, 2000 (continued)
Shares Value
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TECHNOLOGY (continued)
60,200 Texas Instruments, Inc. ..................... $ 2,953,563
49,180 Dell Computer Corp. ......................... 1,450,810
29,510 EMC Corp.* .................................. 2,628,234
25,910 International Business
Machines Corp .............................. 2,552,135
30,992 Nortel Networks Corp. ....................... 1,410,136
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TOTAL TECHNOLOGY ............................ 31,040,493
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UTILITIES (0.9%)
26,250 DQE, Inc. ................................... 917,109
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TOTAL UTILITIES ............................. 917,109
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TOTAL INVESTMENTS (identified cost $103,926,704) (a) ... 100.1% $ 106,707,462
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES ......... (0.1) (126,573)
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NET ASSETS ............................................. 100.0% $ 106,580,889
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* Non-income producing security.
(a) The aggregate cost for federal income tax purposes is $106,306,713, the
aggregate gross unrealized appreciation is $12,956,779 and the aggregate
gross unrealized depreciation is $12,556,030, resulting in net unrealized
appreciation of $400,749.
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH U.S. EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 2000
ASSETS:
Investments in securities, at value (identified cost
$103,926,704) ............................................. $106,707,462
Receivables for:
Investments sold .......................................... 1,696,251
Contributions ............................................. 130,060
Dividends ................................................. 48,264
Other receivables ......................................... 13,267
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Total Assets ........................................... $108,595,304
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LIABILITIES:
Payables for:
Due to bank ............................................... 138,935
Withdrawals ............................................... 1,692,906
Investment advisory fee ................................... 116,656
Professional fee .......................................... 33,707
Custody fee ............................................... 23,669
Administration fee ........................................ 6,282
Board of Trustees' fee .................................... 2,260
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Total Liabilities ....................................... 2,014,415
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NET ASSETS ..................................................... $106,580,889
============
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH U.S. EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
For the year ended October 31, 2000
NET INVESTMENT INCOME:
Income:
Dividends (net of withholding tax of $184,599) ...... $ 634,275
Interest and other income ........................... 16,304
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Total Income .................................. 650,579
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Expenses:
Investment advisory fee ............................. 622,162
Custody fee ......................................... 74,342
Professional fee .................................... 37,099
Administrative fee .................................. 33,501
Board of Trustees' fees and expenses ................ 14,576
Miscellaneous expenses .............................. 8,653
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Total Expenses ................................ 790,333
Fees paid indirectly .......................... (19,895)
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Net Expenses .................................. 770,438
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Net Investment Loss .................................... (119,859)
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NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on investments .................... (5,104,406)
Change in unrealized appreciation on investments .... 2,780,758
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Net Realized and Unrealized Loss ............... (2,323,648)
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Net Decrease in Net Assets Resulting from Operations ... $(2,443,507)
===========
The accompanying notes are an integral part of these financial statements.
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BBH U.S. EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the year ended October 31, 2000
INCREASE IN NET ASSETS:
Operations:
Net investment loss ....................................... $ (119,859)
Net realized loss on investments .......................... (5,104,406)
Change in unrealized appreciation on investments .......... 2,780,758
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Net decrease in net assets resulting from operations ... (2,443,507)
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Capital Transactions:
Proceeds from contributions ............................... 169,647,677
Fair value of withdrawals ................................. (60,623,281)
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Net increase in net assets resulting from capital
transactions ........................................ 109,024,396
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Total increase in net assets ........................ 106,580,889
NET ASSETS:
Beginning of year ........................................... --
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End of year ................................................. $ 106,580,889
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The accompanying notes are an integral part of these financial statements.
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BBH U.S. EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
For the year ended
October 31, 2000
------------------
Total Return ................................................ (0.47)%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted) ................ $106,581
Expenses as a percentage of average net assets:
Expenses paid by Portfolio ............................. 0.82%
Expense offset arrangement ............................. 0.02%
Total Expenses .................................... 0.84%
Ratio of net investment income to average net assets ..... (0.12)%
Portfolio turnover rate .................................. 130%
The accompanying notes are an integral part of these financial statements.
<PAGE>
BBH U.S. EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
1. Organization and Significant Accounting Policies. The BBH U.S. Equity
Portfolio (the "Portfolio") is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company which was
organized as a trust under the laws of the State of New York on June 15, 1993.
The Portfolio commenced operations on November 1, 1999. The Declaration of Trust
permits the Trustees to create an unlimited number of beneficial interests in
the Portfolio.
The Portfolio's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. Valuation of Investments. (1) The value of investments listed on
a securities exchange is based on the last sale price on that exchange
prior to the time when assets are valued, or in the absence of recorded
sales, at the average of readily available closing bid and asked prices on
such exchange; (2) unlisted securities are valued at the average of the
quoted bid and asked prices in the over-the-counter market; (3) securities
or other assets for which market quotations are not readily available are
valued at fair value in accordance with procedures established by and
under the general supervision and responsibility of the Portfolio's
Trustees. Such procedures include the use of independent pricing services,
which use prices based upon yields or prices of securities of comparable
quality, coupon, maturity, and type; indications as to the value from
dealers; and general market conditions; (4) short-term investments which
mature in 60 days or less are valued at amortized cost if their original
maturity was 60 days or less, or by amortizing their value on the 61st day
prior to maturity, if their original maturity when acquired by the
Portfolio was more than 60 days, unless this is determined not to
represent fair value by the Trustees.
B. Accounting for Investments. Security transactions are accounted
for on the trade date. Realized gains and losses on security transactions
are determined on the identified cost method. Dividend income and other
distributions from portfolio securities are recorded on the ex-dividend
date. Interest income is accrued daily.
C. Federal Income Taxes. The Portfolio will be treated as a
partnership for federal income tax purposes. As such, each investor in the
Portfolio will be subject to taxation on its share of the Portfolio's
ordinary income and capital gains. It is intended that the Portfolio's
assets will be managed in such a way that an investor in the Portfolio
will be able to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision
for federal income taxes is necessary.
2. Transactions with Affiliates.
Investment Advisory Fee. The Portfolio has an investment advisory
agreement with Brown Brothers Harriman (the "Adviser") for which it pays the
Adviser a fee calculated daily and paid monthly at an annual rate equivalent to
0.65% of the Portfolio's average daily net assets. For the year ended October
31, 2000, the Portfolio incurred $622,162 for advisory services.
Administrative Fee. The Corporation has an administrative agreement with
Brown Brothers Harriman Trust Company, LLC (the "Administrator") for which it
pays the Administrator a fee calculated daily and paid monthly at an annual rate
equivalent to 0.035% of the Portfolio's average daily net assets. The
Administrator has a subadministration agreement with 59 Wall Street
Administrators, Inc. for which 59 Wall Street Administrators, Inc. receives such
compensation as is from time to time agreed upon, but not in excess of the
amount paid to the Administrator. For the year ended October 31, 2000, the
Portfolio incurred $33,501 for administrative services.
<PAGE>
BBH U.S. EQUITY PORTFOLIO
NOTES TO FINANCIAL STATEMENTS(continued)
Custody Fee. The Portfolio has a custody agreement with Brown Brothers
Harriman for which Brown Brothers Harriman receives a fee calculated and paid
monthly. For the year ended October 31, 2000, the Portfolio incurred $74,342 for
custody services. Custody fees for the Portfolio were further reduced by $19,895
as a result of an expense offset arrangement with the Portfolio's custodian.
Board of Trustees' Fees. Each Trustee receives an annual fee as well as
reimbursement for reasonable out-of-pocket expenses from the Portfolio. For the
year ended October 31, 2000 the Portfolio incurred $14,576 for these fees.
3. Investment Transactions. For the year ended October 31, 2000, the cost
of purchases and the proceeds of sales of investment securities other than
short-term investments were $119,366,470 and $119,292,219 respectively. There
were no purchases or sales of U.S. government obligations during the year. For
that same period the Portfolio paid brokerage commissions of $34,458 to Brown
Brothers Harriman for transactions executed on its behalf.
<PAGE>
INDEPENDENT AUDITORS' REPORT
Trustees and Investors
BBH U.S. Equity Portfolio:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of BBH U.S. Equity Portfolio as of
October 31, 2000, and the related statement of operations, the statement of
changes in net assets, and the financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the Portfolio's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit in accordance with audited standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at October 31, 2000 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of BBH U.S. Equity
Portfolio at October 31, 2000, and the results of its operations, the changes in
its net assets, and its financial highlights for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
December 22, 2000
