-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lal6dQ2XlE7boXjin+ZNNKvnvawvNo9RdJiHifBibxFfEdDAfo3CpLblqqzEUnhV w1qc6XV1qCAMPk56qaBFWw== 0001072613-05-000594.txt : 20050304 0001072613-05-000594.hdr.sgml : 20050304 20050304160248 ACCESSION NUMBER: 0001072613-05-000594 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050304 DATE AS OF CHANGE: 20050304 EFFECTIVENESS DATE: 20050304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASSMUTUAL CORPORATE INVESTORS CENTRAL INDEX KEY: 0000275694 IRS NUMBER: 042483041 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-02183 FILM NUMBER: 05661391 BUSINESS ADDRESS: STREET 1: 1500 MAIN STREET STREET 2: SUITE 600 CITY: SPRINGFIELD STATE: MA ZIP: 01115 BUSINESS PHONE: 4132261000 MAIL ADDRESS: STREET 1: 1500 MAIN STREET STREET 2: SUITE 600 CITY: SPRINGFIELD STATE: MA ZIP: 01115 N-CSR 1 formn-csr_13300.txt MASSMUTUAL CORPORATE INVESTORS FORM N-CSR 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 811-2183 --------------------------------------------- MassMutual Corporate Investors - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1500 Main Street, Suite 600, Springfield, MA 01115 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Stephen L. Kuhn, Vice President and Secretary 1500 Main Street, Suite 2800, Springfield, MA 01115 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 413-226-1000 ---------------------------- Date of fiscal year end: 12/31 ------------------ Date of reporting period: 12/31/04 ------------------ 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. REPORT TO STOCKHOLDERS. Attached hereto is the annual shareholder report transmitted to shareholders pursuant to Rule 30e-1 of the Investment Company Act of 1940, as amended. 2004 Annual Report MassMutual Corporate Investors MassMutual Corporate Investors MassMutual Corporate Investors is a closed-end investment company, first offered to the public over 30 years ago and is listed on the New York Stock Exchange. MASSMUTUAL CORPORATE INVESTORS c/o Babson Capital Management LLC 1500 Main Street, Suite 600 Springfield, Massachusetts 01115 (413) 226-1516 ADVISER Babson Capital Management LLC 1500 Main Street Springfield, Massachusetts 01115 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP Boston, Massachusetts 02110 COUNSEL TO THE TRUST Ropes & Gray LLP Boston, Massachusetts 02110 CUSTODIAN Citibank, N.A. New York, New York 10043 TRANSFER AGENT & REGISTRAR Shareholder Financial Services, Inc. P.O. Box 173673 Denver, Colorado 80217-3673 1-800-647-7374 PROXY VOTING POLICIES & PROCEDURES; PROXY VOTING RECORD The Trustees of MassMutual Corporate Investors have delegated proxy voting responsibilities relating to the voting of securities held by the Trust to Babson Capital Management LLC. Adescription of Babson Capital's proxy voting policies and procedures is available (1) without charge, upon request, by calling, toll-free 866-399-1516; (2) on MassMutual Corporate Investors' website: http://www. babsoncapital.com/mci; and (3) on the U.S. Securities and Exchange Commission ("SEC") website at http://www.sec.gov. Information regarding how the Trust voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (1) on MassMutual Corporate Investors' website: http://www.babsoncapital.com/mci; and (2) on the SEC's website at http://www.sec.gov. FORM N-Q MassMutual Corporate Investors files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. This information is available (i) on the U.S. Securities and Exchange Commission's website at http://www.sec.gov; and (ii) at the U.S. Securities and Exchange Commission's Public Reference Room in Washington, DC (which information on their operation may be obtained by calling 1-800- SEC-0330). A complete schedule of portfolio holdings as of each quarter-end is available upon request by calling, toll-free, 866-399-1516. MassMutual Corporate Investors Investment Objective and Policy MassMutual Corporate Investors (the "Trust") is a closed-end investment company, first offered to the public in 1971, whose shares are traded on the New York Stock Exchange under the trading symbol "MCI". The Trust's share price can be found in the financial section of most newspapers as "MassCp" or "MassMuInv" under the New York Stock Exchange listings. [PIE CHART APPEARS HERE] Portfolio Composition as of 12/31/04* Public High Yield Debt 31% Public Equity 3% Cash & Short Term Investments 3% Private/Restricted Equity 14% Private Investment Grade Debt 1% Private High Yield Debt 48% *Based on value of total investments The Trust's investment objective is to maintain a portfolio of securities providing a fixed yield and at the same time offering an opportunity for capital gains. The Trust's principal investments are privately placed, below-investment grade, long-term corporate debt obligations with equity features such as warrants, conversion rights, or other equity features and, occasionally, preferred stocks. The Trust typically purchases these investments, which are not publicly traded, directly from their issuers, which tend to be smaller companies. In addition, the Trust may temporarily invest, subject to certain limitations, in marketable investment grade debt securities, other marketable debt securities (including high yield securities) and marketable common stocks. Babson Capital Management LLC manages the Trust on a total return basis. The Trust distributes substantially all of its net income to shareholders each year. Accordingly, the Trust pays dividends to shareholders quarterly in January, May, August, and November. The Trust pays dividends to its shareholders in cash, unless the shareholder elects to participate in the Dividend Reinvestment and Share Purchase Plan. In this report you will find a complete listing of the Trust's holdings. We encourage you to read this section carefully for a better understanding of the Trust. We cordially invite all shareholders to attend the MassMutual Corporate Investors Annual Meeting of Shareholders, which will be held on April 22, 2005 at 2:00 P.M. in Springfield, Massachusetts. 1 MassMutual Corporate Investors To Our Shareholders On July 1, 2004, David L. Babson & Company Inc., the investment adviser to MassMutual Corporate Investors (the "Trust"), announced that it was renaming itself as Babson Capital Management LLC. The Trust continues to be managed by the same individuals and there should be no change in the level of service provided. I am pleased to share with you the Trust's Annual Report for the year ended December 31, 2004. [PHOTO APPEARS HERE] Left to right: Roger W. Crandall President Stuart H. Reese Chairman The Trust's total portfolio rate of return for 2004 was 22.76%, as measured by the change in net asset value, assuming the reinvestment of all dividends and distributions. 2 MassMutual Corporate Investors Total Annual Portfolio Return (as of 12/31 each year)* [BAR CHART APPEARS HERE] Lehman Brothers Intermediate MassMutual Corporate Standard & Poor's U.S. Credit Index Investors (Based on Industrials Composite (Formerly called the change in the net (Formerly called the Lehman Brothers asset value with Standard & Poor's Intermediate reinvested dividends) Industrial Price Index.) Corporate Bond Index.) 2004 22.76% 2004 10.20% 2004 4.08% 2003 22.61% 2003 28.34% 2003 6.91% 2002 4.80% 2002 -23.51% 2002 10.14% 2001 5.97% 2001 -11.67% 2001 9.77% 2000 7.28% 2000 -16.26% 2000 9.46% 1999 7.53% 1999 25.89% 1999 0.16% 1998 17.12% 1998 33.77% 1998 8.29% 1997 27.14% 1997 31.04% 1997 8.36% 1996 15.42% 1996 23.03% 1996 3.97% 1995 33.76% 1995 34.64% 1995 18.99% *Data for MassMutual Corporate Investors represents portfolio returns based on change in the net asset value assuming the reinvestment of all dividends and distributions which differs from the total investment return based on market value due to the difference between the net asset value and the market value of the shares outstanding (see page 12 for total investment return based on market value); past performance is no guarantee of future results. [PHOTO APPEARS HERE] Left to right: Stephen L. Kuhn Vice President and Secretary Clifford M. Noreen Vice President Charles C. McCobb, Jr. Vice President and Chief Financial Officer The Trust continues to repeatedly employ the investment philosophy that has served it well since its inception: investing in companies which we believe to have a strong business proposition, solid cash flow and experienced, ethical management. 3 MassMutual Corporate Investors The Trust's 2004 Portfolio Performance The Trust's total portfolio rate of return for 2004 was 22.76%, as measured by the change in net asset value, assuming the reinvestment of all dividends and distributions. The Trust's total net assets were $218,505,148, or $24.34 per share, as of December 31, 2004, compared to $193,786,114, or $21.84 per share, as of December 31, 2003. The Trust's quarterly pershare dividend increased in each of the first three quarters of 2004: from 36 cents per share paid for each quarter in 2003 to 41 cents per share paid in May, to 45 cents per share paid in August, and to 46 cents per share paid in November. While the regular fourth quarter dividend paid in January remained at 46 cents per share, the Trust declared a special year-end dividend of 28 cents per share paid in January to shareholders of record on December 31, 2004. A special 10 cent per share dividend was also paid in August, bringing total dividends for the year to $2.16 per share. All in all, we are very pleased with the Trust's 2004 portfolio performance. Lehman Lehman Standard Brothers Brothers & Poor's The U.S. Corporate Intermediate Industrials Russell Trust High Yield Index U.S. Credit Index* Composite** 2000 Index 1 Year 22.76% 11.13% 4.08% 10.20% 18.33% 3 Year 16.41% 12.22% 7.01% 2.66% 11.48% 5 Year 12.38% 6.97% 8.05% -4.37% 6.61% 10 Year 16.05% 8.13% 7.91% 11.31% 11.54% * Formerly called the Lehman Brothers Intermediate Corporate Bond Index. ** Formerly called the Standard & Poor's Industrial Price Index. The above table lists the average annual returns of the Trust's portfolio, based on change in net assets, assuming the reinvestment of all dividends and distributions, compared to the average annual returns of selected equity and fixed income market indices for the 1, 3, 5 and 10 years ended December 31, 2004. The U.S. economy and investment markets showed surprising resilience in 2004, holding steady despite several factors: short-term interest rates were raised five times during the year by the Federal Reserve Board for a total increase of 1.25 percent; oil reaching a record high price of $50 a barrel; a weakening dollar; the worst hurricane season in 40 years; the ongoing war in Iraq; and a highly charged Presidential election campaign. 4 MassMutual Corporate Investors While historically events such as these have had a negative economic impact, indications are that the U.S. economy continues to improve. U.S. Gross Domestic Product grew at a 4.4 percent rate for the year and the unemployment rate dropped to 5.4 percent from 5.7 percent. Nevertheless, at the close of 2004, both the Dow Jones Industrial Average and the Standard & Poor's 500 Index were at their highest levels since pre-September 11, 2001. Corporate credit defaults around the globe continued their downward trend (although possibly plateauing at year-end), which provided a more stable environment for investors. In the U.S., the speculative-grade issuer-weighted default rate fell to 2.2% at year-end from a starting point of 5.2% in 2003, as reported by Moody's Investors Service. Meanwhile, 2004 saw dollardenominated high-yield bond issuance approach $134.8 billion, keeping pace with the $135.7 billion issued in 2003, according to Credit Suisse First Boston. The value of mergers and acquisitions among domestic companies reached $834 billion, a tally surpassed only in the record year of 2000, according to Thompson Financial. This is an indication of the amount of capital available in the market to finance deals; however, this environment has caused the markets in which the Trust participates to become very competitive. Overall, the Trust closed 23 new private placement transactions during 2004 and added to seven existing private placement investments, a relatively large number compared with previous years. To keep pace with this activity, Babson Capital has added additional investment professionals to its mezzanine and private equity group. New private placement transactions during the year were: ATI Acquisition Company; AWC Holding Company; American Hospice Management Holding LLC; Augusta Sportswear Holding Co.; Chemed Corporation (Roto-Rooter, Inc.); Eagle Pack Pet Foods, Inc.; EXC Acquisition Corporation; Home Decor Holding Company; Justrite Manufacturing Acquisition Co.; Kele and Associates, Inc.; Maverick Acquisition Company; Maxon Corporation; Nonni's Food Company; Qualis Automotive LLC; Qualserv Corporation; River Ranch Fresh Foods LLC; Savage Sports Holding, Inc.; Sport Court International, Inc.; Tubular Textile Machinery; U-Line Corporation; Vitality Foodservice, Inc.; Vitex Packaging Group, Inc.; and Walls Industries, Inc. In addition, the Trust added to existing private placement investments in Brampton Fasteners Co. Ltd., Colibri Holdings Corp., Delstar Holding Corporation, Dwyer Group, Inc., Home Decor Holding Company, MedAssist, Inc. and Shelter Acquisition, Inc. [PHOTO APPEARS HERE] Left to right: Michael L. Klofas Vice President Richard E. Spencer, II Vice President Michael P. Hermsen Vice President 5 MassMutual Corporate Investors The Outlook for 2005 For 2005, expectations are mixed. The Fed will likely continue to raise short-term rates, and many analysts believe long-term interest rates may rise as well. The global economy is focused on the budget and current account deficits in the U.S., with the risk of further dollar weakness. Oil prices will continue to have a risk premium because of instability and conflict in the Middle East. While economic indicators such as unemployment levels, manufacturing activity and consumer confidence looked promising at year-end, no one can predict the future with any degree of certainty. Stronger equity and credit markets have helped fuel increased M & A activity - pushing valuations toward the high end of historical ranges. The margin of safety in many investments has been reduced, requiring investors to increase the scrutiny of each opportunity. Regardless of the economic environment, however, the Trust continues to repeatedly employ the investment philosophy that has served it well since its inception: investing in companies which we believe to have a strong business proposition, solid cash flow and experienced, ethical management. This philosophy, combined with Babson Capital's seasoned investment-management team and the Trust's financial position, contribute to the Trust's being well positioned for future investment opportunities that meet its investment objectives and policies. As always, I would like to thank you for your continued interest in and support of MassMutual Corporate Investors. Sincerely, /s/ Roger W. Crandall Roger W. Crandall President Cautionary Notice: Certain statements contained in this report to shareholders may be "forward looking" statements within the meaning of the Private Securities Litigation Act of 1995. These statements are not guarantees of future performance and actual results may differ materially from those forecasted. 2004 Record Net Investment Short-Term Dividends Date Income Gains Tax Effect - -------------------------------------------------------------------------------- Regular 05/07/04 $0.4100 - 07/30/04 0.4500 - 11/01/04 0.4600 - 12/31/04 0.4600 - Special 07/30/04 0.1000 - 12/31/04 0.2800 - - -------------------------------------------------------------------------------- $2.1600 - $2.16 - -------------------------------------------------------------------------------- The following table summarizes the tax effects of the retention of capital gains for 2004: Amount Per Share Form 2439 - -------------------------------------------------------------------------------- 2004 Gains Retained 0.4532 Line 1a Long-Term Gains Retained 0.4532 Taxes Paid 0.1586 Line 2* Basis Adjustment 0.2946 ** *If you are not subject to federal tax (e.g., a charitable organization, IRA or Keogh Plan), you may be able to claim a refund by filing Form 990-T. **For federal tax purposes, you may increase the adjusted basis of your shares by this amount (the excess of Line 1a over Line 2).
Qualified for Dividend Interest Earned on Annual Dividend Received Deduction*** Qualified Dividends**** U.S. Gov't. Obligations Amount Per Share Percent Amount Per Share Percent Amount Per Share Percent Amount Per Share - -------------------------------------------------------------------------------------------------- $2.16 19.7828% 0.4273 19.7768% 0.4272 0.00% 0.0000 - --------------------------------------------------------------------------------------------------
*** Not available to individual shareholders **** Qualified dividends are reported in Box 1b on IRS Form 1099-Div for 2004 6 MassMutual Corporate Investors Financial Report Consolidated Statement of Assets and Liabilities . . . . . . . . . . . . . 8 Consolidated Statement of Operations . . . . . . . . . . . . . . . . . . . 9 Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . 10 Consolidated Statements of Changes in Net Assets . . . . . . . . . . . . . 11 Consolidated Selected Financial Highlights . . . . . . . . . . . . . . . . 12 Consolidated Schedule of Investments . . . . . . . . . .. . . . . . . . 13-35 Notes to Consolidated Financial Statements . . . . . . .. . . . . . . . 36-39 Interested Trustees. . . . . . . . . . . . . . . . . . .. . . . . . . . 40-41 Independent Trustees . . . . . . . . . . . . . . . . . .. . . . . . . . 42-44 Officers of the Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Report of Independent Registered Public Accounting Firm. . . . . . . . . . 46 7 MassMutual Corporate Investors CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2004
ASSETS: Investments (See Consolidated Schedule of Investments) Corporate restricted securities at fair value (Cost - $182,951,980) $179,432,770 Corporate public securities at market value (Cost - $61,143,627) 65,540,803 Short-term securities at cost plus earned discount which approximates market value 2,252,665 ------------ 247,226,238 Cash 4,587,117 Interest and dividends receivable 3,712,861 Receivable for investments sold 1,995,635 ------------ TOTAL ASSETS $257,521,851 ============ LIABILITIES: Dividend payable $ 6,644,036 Payable for investments purchased 110,000 Management fee payable 626,075 Note payable 20,000,000 Revolving Credit Agreement 9,000,000 Interest payable 210,312 Accrued expenses 214,630 Accrued taxes payable 2,211,650 ------------ TOTAL LIABILITIES 39,016,703 ------------ NET ASSETS: Common shares, par value $1.00 per share; an unlimited number authorized 8,978,427 Additional paid-in capital 104,247,288 Retained net realized gain on investments, prior years 100,547,585 Undistributed net investment income 1,270,697 Undistributed net realized gain on investments 2,583,185 Net unrealized appreciation of investments 877,966 ------------ TOTAL NET ASSETS 218,505,148 ------------ TOTAL LIABILITIES AND NET ASSETS $257,521,851 ============ Common shares issued and outstanding 8,978,427 ============ Net asset value per share $ 24.34 ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 8 MassMutual Corporate Investors CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2004
INVESTMENT INCOME: Interest $ 20,999,802 Dividends 2,538,992 ------------ TOTAL INVESTMENT INCOME 23,538,794 ------------ EXPENSES: Management fees (net of fee waiver of $31,991) See Footnotes 3 and 8 2,899,395 Interest 1,595,039 Trustees' fees and expenses 160,000 Transfer agent/registrar's expenses 28,000 Reports to shareholders 80,000 Professional fees 452,400 Other 74,663 ------------ TOTAL EXPENSES 5,289,497 ------------ Net investment income before income tax expense 18,249,297 Income tax expense 299,950 ------------ INVESTMENT INCOME - NET ($2.00 PER SHARE) 17,949,347 ------------ Net realized and unrealized gain on investments: Realized gain on investments before taxes 7,032,428 Income tax expense (2,377,709) ------------ Net realized gain on investments 4,654,719 Net change in unrealized depreciation of investments 19,012,223 ------------ NET GAIN ON INVESTMENTS 23,666,942 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 41,616,289 ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 9 MassMutual Corporate Investors CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2004
Net decrease in cash: Cash flows from operating activities: Interest and dividends received $ 21,803,206 Interest expense paid (1,572,438) Operating expenses paid (3,772,363) Income taxes paid (2,243,478) ------------ NET CASH PROVIDED BY OPERATING ACTIVITIES 14,214,927 ------------ Cash flows from investing activities: Purchases/Proceeds/Maturities from short-term portfolio securities, net 4,128,894 Purchase of portfolio securities (132,488,422) Proceeds from disposition of portfolio securities 117,678,819 ------------ NET CASH USED FOR INVESTING ACTIVITIES (10,680,709) ------------ NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 3,534,218 ------------ Cash flows from financing activities: Proceeds from borrowings on Revolving Credit Agreement 9,000,000 Increase in receipts for shares issued on reinvestment of dividends 2,432,514 Cash dividends paid from net investment income (19,429,056) ------------ NET CASH USED FOR FINANCING ACTIVITIES (7,996,542) ------------ NET DECREASE IN CASH (4,462,324) Cash - beginning of year 9,049,441 ------------ CASH - END OF YEAR $ 4,587,117 ============ RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES: NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 41,616,289 ------------ Increase in investments (39,942,715) Increase in interest and dividends receivable (436,694) Decrease in receivable for investments sold 1,808,461 Increase in payable for investments purchased 110,000 Decrease in management fee payable (103,267) Increase in interest payable 22,601 Increase in accrued expenses 25,362 Increase in accrued taxes payable 434,181 ------------ TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (38,082,071) ------------ NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 3,534,218 ============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 10 MassMutual Corporate Investors CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 2003 - -------------------------------------------------------------------------------------------------------------- INCREASE IN NET ASSETS: Operations: Investment income - net $ 17,949,347 $ 12,804,578 Net realized gain on investments 4,654,719 4,989,717 Net change in unrealized depreciation of investments 19,012,223 20,089,741 ------------- ------------- Net increase in net assets resulting from operations 41,616,289 37,884,036 Net increase in shares of beneficial interest transactions 2,432,514 1,167,125 (common shares issued: 2004 - 105,634; 2003 - 56,430) Dividends to shareholders from: Net investment income (2004 - $2.16 per share; 2003 - $1.84 per share) (19,329,769) (16,293,478) ------------- ------------- TOTAL INCREASE IN NET ASSETS 24,719,034 22,757,683 NET ASSETS, BEGINNING OF YEAR 193,786,114 171,028,431 ------------- ------------- NET ASSETS, END OF YEAR $ 218,505,148 $ 193,786,114 ============= =============
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 11 MassMutual Corporate Investors CONSOLIDATED SELECTED FINANCIAL HIGHLIGHTS
Selected data for each common share outstanding: For the years ended December 31, 2004 2003 2002 2001 2000 - --------------------------------------------------------------------------------------------------------------------- NET ASSET VALUE: BEGINNING OF YEAR $ 21.84 $ 19.40 $ 20.07 $ 20.74 $ 22.00 -------- -------- -------- -------- -------- Net investment income 2.00 1.44 1.53 1.70 1.96 Net realized and unrealized gain (loss) on investments 2.64 2.83 (0.59) (0.53) (0.46) -------- -------- -------- -------- -------- Total from investment operations 4.64 4.27 0.94 1.17 1.50 -------- -------- -------- -------- -------- Dividends from net investment income to common shareholders (2.16) (1.84) (1.44) (1.79) (1.96) Distributions from net realized gain on investments to common shareholders -- -- (0.18) (0.09) (0.80) Change from issuance of shares 0.02 0.01 0.01 0.04 -- -------- -------- -------- -------- -------- Total distributions (2.14) (1.83) (1.61) (1.84) (2.76) -------- -------- -------- -------- -------- NET ASSET VALUE: END OF YEAR $ 24.34 $ 21.84 $ 19.40 $ 20.07 $ 20.74 -------- -------- -------- -------- -------- PER SHARE MARKET VALUE: END OF YEAR $ 28.50 $ 22.90 $ 19.49 $ 20.70 $ 22.00 -------- -------- -------- -------- -------- Total investment return Market value 36.10% 27.53% 1.35% 1.88% 17.55% Net asset value* 22.76% 22.61% 4.80% 5.91% 7.28% Net assets (in millions): End of period $ 218.51 $ 193.79 $ 171.03 $ 175.11 $ 178.13 Ratio of operating expenses to average net assets 1.93% 2.04% 1.82% 1.72% 1.47% Ratio of interest expense to average net assets 0.77% 0.82% 0.86% 0.84% 0.58% Ratio of total expenses to average net assets 2.70% 2.86% 2.68% 2.56% 2.05% Ratio of net investment income to average net assets 8.68% 6.95% 7.65% 8.20% 8.56% Portfolio turnover 53.45% 56.10% 34.02% 24.48% 59.75%
*Net asset value return represents portfolio returns based on change in the net asset value assuming the reinvestment of all dividends and distributions which differs from the total investment return based on market value due to the difference between the net asset value and the market value of the shares outstanding; past performance is no guarantee of future results. See Notes to Consolidated Financial Statements. 12 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities - 82.12% (A) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- Private Placement Investments - 73.29% A T I ACQUISITION COMPANY A for-profit post-secondary school serving students in Texas, Florida and Arizona. 12% Senior Subordinated Note due 2012 $ 2,125,000 04/08/04 $ 2,125,000 $ 2,127,151 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 2,323 shs. 04/08/04 -- 23 ------------ ------------ 2,125,000 2,127,174 ------------ ------------ AWC HOLDING COMPANY Amanufacturer and distributor of aluminum and vinyl windows and doors in the Southwest and Southeast regions of the U.S. 12% Senior Subordinated Note due 2012 $ 2,125,000 05/18/04 1,921,756 1,928,953 Limited Partnership Interest of A W C Investment, LLC (B) 250 uts. 05/18/04 212,500 191,251 ------------ ------------ 2,134,256 2,120,204 ------------ ------------ ADORN, INC. Amanufacturer of wall panels, cabinets, moldings and countertops for houses and recreational vehicles. 12.5% Subordinated Note due 2010 $ 2,125,000 02/29/00 1,932,097 2,136,334 Warrant, exercisable until 2010, to purchase common stock at $.02 per share (B) 364 shs. 02/29/00 307,759 274,859 ------------ ------------ 2,239,856 2,411,193 ------------ ------------ AMERICA'S BODY COMPANY, INC./LCP HOLDING CO. A designer and manufacturer of commercial work vehicles 12% Preferred Stock Series C (B) 395 shs. 12/16/03 1,750,000 3,150,001 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 58 shs. * 513,334 1 ------------ ------------ *11/02/98 and 12/16/03 2,263,334 3,150,002 ------------ ------------ AMERICAN HOSPICE MANAGEMENT HOLDING LLC A for-profit hospice care provider in the United States 12% Senior Subordinated Note due 2010 $ 2,125,000 01/22/04 1,892,924 2,210,000 Preferred Class A Unit (B) 2,525 uts. 01/22/04 252,500 227,250 Common Class B Unit (B) 3,042 uts. 01/22/04 -- -- ------------ ------------ 2,145,424 2,437,250 ------------ ------------ AUGUSTA SPORTSWEAR HOLDING CO. Amanufacturer and distributor of athletic apparel, activewear and team uniforms. 12% Senior Subordinated Note due 2012 $ 1,686,800 12/31/04 1,567,318 1,699,620 Common Stock (B) 438 shs. 12/31/04 438,200 394,380 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 137 shs. 12/31/04 119,482 1 ------------ ------------ 2,125,000 2,094,001 ------------ ------------
13 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- BEACON MEDICAL PRODUCTS, INC A designer, manufacturer and marketer of medical air and gas distribution systems. Senior Secured Floating Rate Revolving Credit Facility due 2007 $ 115,318 04/09/02 $ 115,318 $ 114,750 Senior Secured Tranche A Floating Rate Note due 2008 $ 857,926 04/09/02 857,926 849,321 12% Senior Secured Note due 2010 $ 721,196 04/09/02 620,994 758,637 Limited Partnership Interest of Riverside Capital Appreciation Fund IV, L.P. (B) 11.16% int. 04/09/02 152,329 141,209 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 1,390 shs. 04/09/02 127,497 128,861 ------------ ------------ 1,874,064 1,992,778 ------------ ------------ BETA BRANDS LTD Amanufacturer of hard candy and chocolate-coated products sold primarily to the Canadian market. 5% Promissory Note due 2009 (B) $ 195,498 03/31/04 195,498 -- Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 4,895 shs. 03/31/04 1 -- ------------ ------------ 195,499 -- ------------ ------------ BETTER MINERALS & AGGREGATES A producer of high grade industrial and specialty silica sands 14% Redeemable Preferred Stock (B) 997 shs. 09/30/99 545,858 108,990 Convertible Preferred Stock Series A and B, convertible into common stock at $9.26 per share (B) 126,003 shs. 12/19/96 1,166,700 -- Common Stock (B) 20,027 shs. 09/30/99 799,068 -- Warrants, exercisable until 2005 and 2010, to purchase common stock at $.01 per share (B) 11,399 shs. * 128,502 -- ------------ ------------ *12/19/96 and 09/30/99 2,640,128 108,990 ------------ ------------ BRAMPTON FASTENER CO. LTD A value-added national distributor of maintenance, repair and operating supplies such as fasteners, electrical components and tools. 8% Senior Secured Term A Note due 2009 $ 806,250 12/31/04 806,250 765,938 12% Senior Secured Term B Note due 2009 $ 806,250 12/31/04 806,250 765,938 Limited Partnership Interest of Brafasco Investors LLC (B) 82,500 uts. 12/31/04 82,500 78,375 Preferred Stock (B) 290 shs. 12/31/04 -- 275,519 ------------ ------------ 1,695,000 1,885,770 ------------ ------------ C & M CONVEYOR, INC Amanufacturer and supplier of material handling systems to the corrugated sheet and container industry. 9.5% Senior Secured Term Note due 2007 $ 996,235 09/13/02 996,235 1,007,896 11% Senior Subordinated Note due 2010 $ 838,102 09/13/02 795,766 858,273 Common Stock (B) 316,265 shs. 09/13/02 316,265 253,012 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 137,175 shs. 09/13/02 60,250 1,372 ------------ ------------ 2,168,516 2,120,553 ------------ ------------
14 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- CAINS FOODS, L.P. A producer of mayonnaise and sauce products for both the retail and food service markets. Limited Partnership Interest (B) 117 uts. 09/29/95 $ 158,369 $ 411,709 ------------ ------------ CAPESUCCESS LLC A provider of diversified staffing services Preferred Membership Interests (B) 1,882 uts. 04/29/00 8,395 420 Common Membership Interests (B) 24,318 uts. 04/29/00 108,983 5,442 ------------ ------------ 117,378 5,862 ------------ ------------ CAPITAL SPECIALTY PLASTICS, INC A producer of desiccant strips used for packaging pharmaceuticals products. Common Stock (B) 109 shs. * 503 503 ------------ ------------ *12/30/97 and 05/29/99 CHEMED CORPORATION An operator in the residential and commercial repair-and-maintenance service industry through two wholly owned subsidiaries, Roto-Rooter and Service America. Common Stock 20,000 shs. 02/24/04 1,000,000 1,342,200 ------------ ------------ COEUR, INC A producer of proprietary, disposable power injection syringes 8.75% Senior Secured Term Note due 2010 $ 570,652 04/30/03 570,652 587,730 11.5% Senior Subordinated Note due 2011 $ 424,819 04/30/03 389,351 437,972 Common Stock (B) 126,812 shs. 04/30/03 126,812 114,131 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 87,672 shs. 04/30/03 40,804 877 ------------ ------------ 1,127,619 1,140,710 ------------ ------------ COINING CORPORATION OF AMERICA LLC Amanufacturer of close tolerance parts and metal stampings Senior Secured Floating Rate Revolving Credit Facility due 2006 $ 129,630 01/07/02 129,630 124,950 Senior Secured Floating Rate Tranche A Note due 2007 $ 993,827 06/26/01 993,827 917,783 13% Senior Secured Tranche B Note due 2006 $ 648,148 06/26/01 648,148 630,688 Limited Partnership Interest (B) 6.38% int. 06/26/01 324,074 259,259 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 107,036 shs. 06/26/01 79,398 1,070 ------------ ------------ 2,175,077 1,933,750 ------------ ------------
15 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- COLIBRI HOLDINGS CORPORATION Amanufacturer and distributor of wild bird feeders and accessories 12.5% Senior Subordinated Note due 2008 $ 1,593,750 09/22/00 $ 1,428,814 $ 1,520,172 28% Preferred Stock (B) 71 shs. 11/02/01 70,833 70,494 20% Preferred Stock (B) 66 shs. 03/09/04 66,406 64,351 Common Stock (B) 1,429 shs. 09/22/00 531,250 265,624 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 843 shs. 09/22/00 265,625 8 ------------ ------------ 2,362,928 1,920,649 ------------ ------------ CORVEST GROUP, INC Amanufacturer and distributor of promotional products 12% Senior Subordinated Note due 2007 $ 3,863,636 * 3,750,436 3,477,272 Common Stock (B) 56 shs. * 96,591 24,145 Limited Partnership Interest (B) 19.32% int. * 284,869 71,692 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 324 shs. * 297,203 139,251 ------------ ------------ *03/05/99 and 03/24/99 4,429,099 3,712,360 ------------ ------------ DELSTAR HOLDING CORPORATION Amanufacturer of plastic netting for a wide variety of industries Convertible Preferred Stock, convertible into common stock at $10 per share (B) 3,514 shs. 10/05/01 427,153 395,243 Convertible Preferred Stock, convertible into common stock at $11.84 per share (B) 412 shs. 09/16/04 48,793 46,353 ------------ ------------ 475,946 441,596 ------------ ------------ DEXTER MAGNETICS TECHNOLOGIES, INC A designer, fabricator, assembler and distributor of industrial magnets and subassemblies in North America and Europe. 12% Senior Subordinated Note due 2006 $ 384,694 07/19/01 355,722 386,149 Common Stock (B) 585 shs. 07/19/01 585,145 625,379 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 297 shs. 07/19/01 250,611 316,970 ------------ ------------ 1,191,478 1,328,498 ------------ ------------ DIRECTED ELECTRONICS, INC A designer and distributor of brand name automotive security systems, audio products and installation accessories. Class B Common Stock (B) 36,633 shs. 12/22/99 -- 560,480 Limited Partnership Interest (B) 8.70% int. 12/22/99 1 839,837 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 48,569 shs. 12/22/99 -- 743,106 ------------ ------------ 1 2,143,423 ------------ ------------
16 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- DIVERSCO, INC./DHI HOLDINGS, INC A contract provider of janitorial and equipment maintenance services and temporary production labor to industrial customers. Membership Interests of MM/Lincap Diversco Investments Ltd. LLC (B) 27.19% int. 08/27/98 $ 734,090 $ -- Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,392,069 Warrants, exercisable until 2011, to purchase common stock of DHI Holdings, Inc. at $.01 per share (B) 13,352 shs. * 403,427 -- ------------ ------------ *10/24/96 and 08/28/98 3,921,650 1,392,069 ------------ ------------ DWYER GROUP, INC A franchiser of a variety of home repair services 14% Senior Subordinated Note due 2011 $ 1,859,375 10/30/03 1,687,634 1,871,727 Common Stock (B) 6,906 shs. ** 690,600 621,540 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 20 ------------ ------------ **10/30/03 and 01/02/04 2,564,703 2,493,287 ------------ ------------ E X C ACQUISITION CORPORATION Amanufacturer of pre-filled syringes and pump systems used for intravenous drug delivery. 15% Senior Subordinated Note due 2012 $ 2,141,068 06/28/04 2,066,639 2,226,556 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 22 shs. 06/28/04 77,208 -- ------------ ------------ 2,143,847 2,226,556 ------------ ------------ EAGLE PACK PET FOODS, INC Amanufacturer of premium pet food sold through independent pet stores. 14% Senior Subordinated Note due 2011 $ 1,062,500 09/24/04 1,023,925 1,064,360 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 4,085 shs. 09/24/04 39,464 41 ------------ ------------ 1,063,389 1,064,401 ------------ ------------ EAGLE WINDOW & DOOR HOLDING CO Amanufacturer of wood and aluminum-clad wood windows and doors 12% Senior Subordinated Note due 2010 $ 1,900,000 05/06/02 1,675,855 1,957,000 Common Stock (B) 225 shs. 05/06/02 225,000 400,928 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 441 shs. 05/06/02 285,000 785,244 ------------ ------------ 2,185,855 3,143,172 ------------ ------------ EAST RIVER VENTURES I, L.P. An acquirer of controlling or substantial interests in other entities. Limited Partnership Interest (B) 0.14% int. 01/01/01 28,971 27,300 ------------ ------------
17 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- ENZYMATIC THERAPY, INC Amanufacturer and distributor of branded natural medicines and nutritional supplements. 13% Senior Subordinated Note due 2006 (B) $ 1,593,750 09/17/02 $ 1,349,781 $ 956,250 Limited Partnership Interest (B) 1.32% int. 03/30/00 531,250 5,313 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 478 shs. 03/30/00 255,000 5 ------------ ------------ 2,136,031 961,568 ------------ ------------ EURO-PRO CORPORATION A designer, marketer and distributor of floor care, steam cleaning and small kitchen products and appliances. 13.25% Senior Subordinated Note due 2011 $ 2,125,000 09/09/03 2,092,817 2,130,153 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 43,878 shs. 09/09/03 35,641 439 ------------ ------------ 2,128,458 2,130,592 ------------ ------------ EVANS CONSOLES, INC A designer and manufacturer of consoles and control center systems 10% Senior Secured Note due 2006 $ 200,934 05/06/04 200,934 200,934 Limited Partnership Interest of CM Equity Partners (B) 2.24% int. 02/11/98 128,464 -- Common Stock (B) 90,000 shs. 05/06/04 6 -- ------------ ------------ 329,404 200,934 ------------ ------------ G C-SUN HOLDINGS, L.P. A value-added national distributor of maintenance, repair and operating supplies such as fasteners, electrical components and tools. Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 880 shs. 03/02/00 347,288 -- ------------ ------------ HAMILTON FUNERAL SERVICES CENTERS, INC A privately held owner and operator of funeral homes in the United States. 16.5% Senior Subordinated Note due 2007 (B) $ 3,802,712 * 3,697,924 380,271 Warrant, exercisable until 2007, to purchase common stock at $1 per share (B) 338,280 shs. * 48,447 -- ------------ ------------ *01/25/99 and 07/16/99 3,746,371 380,271 ------------ ------------ HIGHGATE CAPITAL LLC An acquirer of controlling or substantial interests in manufacturing and marketing entities. Series A Preferred Units (B) 1.19% int. 07/21/94 385,258 2,723 ------------ ------------ HOME DECOR HOLDING COMPANY A designer, manufacturer and marketer of framed art and wall decor products. 12.5% Senior Subordinated Note due 2012 $ 2,043,269 ** 1,848,871 2,084,838 Common Stock (B) 63 shs. ** 62,742 56,466 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 200 shs. ** 199,501 2 ------------ ------------ **06/30/04 and 08/19/04 2,111,114 2,141,306 ------------ ------------
18 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- HUSSEY SEATING CORPORATION Amanufacturer of spectator seating products Senior Secured Floating Rate Revolving Note due 2006 $ 1,544,856 06/12/96 $ 1,544,855 $ 1,235,883 Senior Secured Floating Rate Note due 2006 $ 433,125 * 433,125 346,500 12% Senior Subordinated Note due 2006 $ 1,350,000 03/31/03 1,350,000 675,000 Common Stock (B) 4,771 shs. 03/12/04 225,000 -- ------------ ------------ *06/12/96 and 08/03/01 3,552,980 2,257,383 ------------ ------------ INTEGRATION TECHNOLOGY SYSTEMS, INC Amanufacturer of steel protective computer and network systems for the industrial and office environments. 16.5% Senior Secured Note due 2006 $ 1,065,129 03/01/04 1,603,250 1,546,501 Common Stock (B) 228 shs. 06/01/00 262,200 131,100 ------------ ------------ 1,865,450 1,677,601 ------------ ------------ JASON, INC A diversified manufacturing company serving various industrial markets. 13% Senior Subordinated Note due 2008 $ 963,687 08/04/00 892,202 889,331 14% Cumulative Redeemable Preferred Stock Series A (B) 289 shs. 08/04/00 289,224 271,540 Limited Partnership Interests of Saw Mill Capital Fund II, L.P. (B) 2.50% int. 08/03/00 886,409 443,253 Warrants, exercisable until 2008 and 2009, to purchase common stock at $.01 per share (B) 50,870 shs. 08/04/00 115,412 509 ------------ ------------ 2,183,247 1,604,633 ------------ ------------ JUSTRITE MANUFACTURING ACQUISITION CO Amanufacturer of safety products such as storage cabinets and containers. 12% Senior Subordinated Note due 2011 $ 1,593,750 12/15/04 1,492,747 1,588,576 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 1,121 shs. 12/15/04 101,109 11 ------------ ------------ 1,593,856 1,588,587 ------------ ------------ KEEPSAKE QUILTING, INC A seller of quilting fabrics, books, patterns, kits and notions to consumers. Senior Secured Floating Rate Revolving Note due 2005 $ 36,693 06/16/00 36,693 36,656 Senior Secur ed Floating Rate T ranche A Note due 2007 $ 669,643 06/16/00 669,643 664,185 12% Senior Secured Tranche B Note due 2008 $ 550,392 06/16/00 524,668 566,904 Limited Partnership Interest of Riverside XVI Holding Company, L.P. (B) 5.29% int. 06/12/00 333,490 250,051 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 1,108 shs. 06/12/00 45,866 83,064 ------------ ------------ 1,610,360 1,600,860 ------------ ------------
19 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- KELE AND ASSOCIATES, INC A distributor of building automation control products 12% Senior Subordinated Note due 2012 $ 1,831,548 02/27/04 $ 1,665,710 $ 1,836,182 Common Stock (B) 35 shs. 02/27/04 462,035 495,126 Warrant, exercisable until 2012, to purchase common stock at $.01 per shar e (B) 11 shs. 02/27/04 7,793 -- ------------ ------------ 2,135,538 2,331,308 ------------ ------------ KENAN-ADVANTAGE TRANSPORT COMPANY A transporter of light petroleum, petrochemicals, lubricants and residual fuels. 12.5% Senior Subordinated Note due 2009 $ 1,817,435 04/30/01 1,817,435 1,853,784 Preferred Stock (B) 307 shs. 04/30/01 307,000 614,000 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 269 shs. 04/30/01 14 3 ------------ ------------ 2,124,449 2,467,787 ------------ ------------ LANCASTER LABORATORIES, INC A laboratory testing operation in the United States Common Stock (B) 860,842 shs. 09/25/00 589,813 821,243 ------------ ------------ LIH INVESTORS, L.P. Amanufacturer and marketer of a broad line of external accessories for new and used sport utility vehicles, trucks and vans. 12.5% Senior Subordinated Note due 2006 $ 3,845,000 * 3,477,661 3,879,221 Common Stock (B) 5,800 shs. * 406,003 345,100 Warrant, exercisable until 2006, to purchase common stock at $.11 per share (B) 15,572 shs. * 602,127 926,534 ------------ ------------ *12/23/98 and 01/28/99. 4,485,791 5,150,855 ------------ ------------ MAVERICK ACQUISITION COMPANY Amanufacturer of capsules that cover the cork and neck of wine bottles. Senior Secured Floating Rate Tranche A Note due 2010 $ 783,582 09/03/04 783,582 774,576 12% Senior Secured Tranche B Note due 2011 $ 313,433 09/03/04 274,990 321,131 Limited Partnership Interest (B) 7.84% int. 09/03/04 58,769 52,892 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 425 shs. 09/03/04 39,473 4 ------------ ------------ 1,156,814 1,148,603 ------------ ------------ MAXON CORPORATION Amanufacturer of industrial combustion equipment and related shut-off valves and control valves. 12% Senior Subordinated Note due 2012 $ 962,215 09/30/04 872,921 956,405 8.75% Senior Subordinated Note due 2012 $ 1,281,112 09/30/04 1,281,112 1,287,669 Common Stock (B) 381,672 shs. 09/30/04 381,672 343,505 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 153,572 shs. 09/30/04 90,897 1,536 ------------ ------------ 2,626,602 2,589,115 ------------ ------------
20 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- MEDASSIST, INC A provider of patient eligibility and accounts receivable management services to hospitals and physician practices. 12% Senior Subor dinated Note due 2011 $ 2,125,000 05/01/03 $ 2,090,089 $ 2,188,750 8% Preferred Stock (B) 84 shs. 10/28/04 83,658 83,714 Common Stock (B) 26,185 shs. 10/28/04 35,088 58,864 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 83,214 shs. 05/01/03 40,675 187,064 ------------ ------------ 2,249,510 2,518,392 ------------ ------------ MOSS, INC Amanufacturer and distributor of large display and exhibit structures. Senior Secured Floating Rate Tranche A Note due 2007 $ 901,171 09/21/00 901,171 901,171 12% Senior Secured Tranche B Note due 2008 $ 336,200 09/21/00 316,761 336,200 Limited Partnership Interest of Riverside Capital Appreciation Fund I, L.P. (B) 37.37% int. * 311,481 311,467 Warrant, exercisable until 2008, to purchase common stock at $100 per share (B) 463 shs. 09/21/00 40,344 5 ------------ ------------ *09/20/00 and 05/23/02 1,569,757 1,548,843 ------------ ------------ MUSTANG VENTURES COMPANY A natural gas gathering and processing operation located in Oklahoma and Texas. Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 16,535 shs. 12/11/02 493,501 938,300 ------------ ------------ NEFF MOTIVATION, INC Amanufacturer and distributor of customized awards and sportswear to schools. 12.5% Senior Subordinated Note due 2011 $ 1,062,500 01/31/03 905,890 1,104,782 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 212 shs. 01/31/03 180,625 86,937 ------------ ------------ 1,086,515 1,191,719 ------------ ------------ NONNI'S FOOD COMPANY A producer and distributor of premium biscotti and bagel chips in North America. 12.25% Senior Subordinated Note due 2012 $ 1,863,462 03/29/04 1,856,139 1,956,635 10% Preferred Stock (B) 255 shs. 03/29/04 255,083 264,889 Common Stock (B) 6,455 shs. 03/29/04 6,455 5,810 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 8,622 shs. 03/29/04 7,323 86 ------------ ------------ 2,125,000 2,227,420 ------------ ------------
21 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- NPC, INC Amanufacturer of flexible connectors and equipment used in the installation of sewers and storm drain pipelines. Senior Secured Floating Rate Revolving Note due 2006 $ 243,398 06/25/99 $ 243,398 $ 239,376 Senior Secured Floating Rate Note due 2006 $ 1,957,627 06/25/99 1,957,600 1,923,919 12% Senior Secured Tranche B Note due 2007 $ 978,814 06/25/99 915,383 978,814 Limited Partnership Interest of Riverside XIII Holding Company L.P. (B) 3.38% int. 06/11/99 296,883 221,438 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 201 shs. 06/25/99 142,373 2 ------------ ------------ 3,555,637 3,363,549 ------------ ------------ NYLONCRAFT, INC A supplier of engineered plastic components for the automotive industry. 9% Senior Secured Note due 2009 $ 812,500 01/28/02 812,500 910,617 11.5% Senior Subordinated Note due 2012 $ 1,500,000 01/28/02 1,368,427 1,694,076 Common Stock (B) 312,500 shs. 01/28/02 312,500 326,250 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 243,223 shs. 01/28/02 162,045 251,736 ------------ ------------ 2,655,472 3,182,679 ------------ ------------ OLYMPIC SALES, INC A boat retailer in Washington state, Oregon, California and British Columbia. 12% Senior Subordinated Note due 2006 $ 2,774,000 08/07/98 2,692,216 2,532,755 12% Senior Subordinated Note due 2008 $ 307,071 02/09/00 288,493 262,193 Limited Partnership Interest of Riverside VIII, VIII-A and VIII-B Holding Company, L.P. (B) 1,531,250 uts. * 1,555,768 798,930 Warrants, exercisable until 2007and 2008, to purchase common stock at $.01 per share (B) 28,648 shs. ** 389,188 287 ------------ ------------ *08/07/98, 02/23/99, 12/22/99 and 02/25/03. **08/07/98 and 02/09/00 4,925,665 3,594,165 ------------ ------------ PARADIGM PACKAGING, INC Amanufacturer of plastic bottles and closures for the nutritional, pharmaceutical, personal care and food packaging markets. 12% Senior Subordinated Note due 2008 $ 2,125,000 12/19/00 1,956,001 2,167,500 Membership Interests of MM/Lincap PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 597,656 ------------ ------------ 2,221,626 2,765,156 ------------ ------------ P H I HOLDING COMPANY A retailer of mid-priced gift items, home and garden decor, accessories and other similar consumer products. 12.5% Senior Subordinated Note due 2010 $ 2,125,000 10/25/02 1,865,115 2,188,750 Warrant, exercisable until 2010, to purchase common stock at $.02 per share (B) 351 shs. 10/25/02 296,747 474,093 ------------ ------------ 2,161,862 2,662,843 ------------ ------------
22 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- PRECISION DYNAMICS, INC Amanufacturer of custom-designed solenoid valves and controls Senior Secured Floating Rate Revolving Credit Facility due 2005 $ 733,500 07/22/96 $ 733,500 $ 733,500 Senior Secured Floating Rate Term Note due 2005 $ 415,650 07/22/96 415,650 415,650 12% Senior Secured Term Note due 2005 $ 326,000 07/22/96 322,639 326,000 8% Preferred Stock (B) 438 shs. 07/22/96 232,028 232,028 Common Stock (B) 599 shs. 07/22/96 28,978 28,978 Warrant, exercisable until 2005, to purchase common stock at $.01 per share (B) 322 shs. 07/22/96 97,800 3 ------------ ------------ 1,830,595 1,736,159 ------------ ------------ PROCESS CHEMICALS LLC A specialty chemical company that manufactures processed chemicals for the fertilizer, asphalt and concrete industries. Common Membership Interests 9.00% int. * 4 288,000 ------------ ------------ *07/31/97 and 01/04/99 PROTEIN GENETICS, INC A producer of bovine artificial insemination products, related breeding and healthcare products and specialty genetics sold to the dairy and beef industries. 9.8% Redeemable Exchangeable Preferred Stock (B) 1,004 shs. 08/12/94 100,350 -- Common Stock (B) 2,600 shs. ** 126,866 -- ------------ ------------ **11/14/01 and 08/12/94 227,216 -- ------------ ------------ PW EAGLE, INC. - O.T.C An extruder of small and medium diameter plastic pipe and tubing in the United States. Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 197,040 shs. 09/16/99 1 391,223 ------------ ------------ 1 391,223 ------------ ------------ QUALIS AUTOMOTIVE LLC A distributor of aftermarket automotive brake and chassis products 12% Senior Subordinated Note due 2012 $ 1,770,834 05/28/04 1,410,768 1,834,064 Common Stock (B) 354,166 shs. 05/28/04 354,166 318,749 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 377,719 shs. 05/28/04 377,719 3,777 ------------ ------------ 2,142,653 2,156,590 ------------ ------------ QUALSERV CORPORATION A provider of foodservice equipment and supplies, to major restaurant chains and their franchisees. 14% Senior Subordinated Note due 2012 $ 1,874,561 07/09/04 1,827,272 1,856,751 Limited Partnership Interest (B) 9.26% int. 07/09/04 259,146 233,231 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 528 shs. 07/09/04 49,061 5 ------------ ------------ 2,135,479 2,089,987 ------------ ------------
23 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- RIVER RANCH FRESH FOODS LLC A supplier of fresh produce to the retail and foodservice channels 13% Senior Subordinated Note due 2011 $ 1,841,667 09/29/04 $ 1,687,106 $ 1,868,926 Limited Partnership Interest (B) 40,610 uts. 09/29/04 283,333 255,000 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 23,715 shs. 09/29/04 157,903 236 ------------ ------------ 2,128,342 2,124,162 ------------ ------------ ROYAL BATHS MANUFACTURING COMPANY Amanufacturer and distributor of acrylic and cultured marble bathroom products. 12.5% Senior Subor dinated Notes due 201 1 $ 1,062,500 11/14/03 949,487 1,055,669 Warrant, exercisable until 2011, to purchase common stock at $.01 per shar e (B) 140 shs. 11/14/03 122,946 1 ------------ ------------ 1,072,433 1,055,670 ------------ ------------ SAFETY SPEED CUT MANUFACTURING COMPANY, INC Amanufacturer of vertical panel saws and routers for the wood working industry. Senior Secured Floating Rate Revolving Note due 2006 $ 37,688 05/01/03 37,688 38,233 Senior Secured Floating Rate Tranche A Note due 2007 $ 1,271,984 06/02/99 1,271,984 1,271,984 12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 06/02/99 1,130,652 1,130,652 Class B Common Stock (B) 1,480 shs. 06/02/99 256,212 435,712 ------------ ------------ 2,696,536 2,876,581 ------------ ------------ SAVAGE SPORTS HOLDING, INC Amanufacturer of sporting firearms 12% Senior Subordinated Note due 2012 $ 1,583,793 09/10/04 1,427,169 1,563,950 Common Stock (B) 586 shs. 09/10/04 586,207 527,589 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 134 shs. 09/10/04 113,578 1 ------------ ------------ 2,126,954 2,091,540 ------------ ------------ SELIG ACQUISITION CORPORATION Amanufacturer of container sealing materials for bottles used in consumer products. 12% Senior Subordinated Note due 2009 $ 2,125,000 06/13/02 1,989,623 2,163,250 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 2,011 shs. 06/13/02 182,023 502,675 ------------ ------------ 2,171,646 2,665,925 ------------ ------------ SHELTER ACQUISITION, INC A distributor of roofing supplies and products throughout the Midwest. 12.5% Senior Subordinated Note due 2008 $ 1,517,857 08/01/02 1,365,546 1,548,214 Common Stock (B) 901,775 shs. * 901,775 811,598 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 263,444 shs. 08/01/02 216,446 2,634 ------------ ------------ *08/01/02, 01/17/03 and 12/31/04 2,483,767 2,362,446 ------------ ------------
24 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- SNYDER INDUSTRIES, INC Amanufacturer of proprietary rotationally molded polyethylene containers. 12.25% Senior Subordinated Note due 2008 $ 3,125,000 12/06/99 $ 2,865,404 $ 3,125,000 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 513 shs. 12/06/99 426,136 154,379 ------------ ------------ 3,291,540 3,279,379 ------------ ------------ SPECIALTY FOODS GROUP, INC Amanufacturer and distributor of branded meat products Limited Partnership Interest of MHD Holdings LLC (B) 1.43% int. 08/29/00 525,155 135,261 ------------ ------------ SPORT COURT INTERNATIONAL, INC A designer and manufacturer of synthetic indoor and outdoor sports flooring and other temporary flooring products. Senior Secured Floating Rate Revolving Note due 2009 $ 185,750 08/12/04 185,750 184,060 Senior Secured Floating Rate Note due 2009 $ 527,171 08/12/04 527,171 522,015 12% Senior Secured Note due 2012 $ 254,282 08/12/04 237,207 257,914 Limited Partnership Interest (B) 7.75% int. 08/12/04 65,830 59,247 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 33 shs. 08/12/04 17,598 -- ------------ ------------ 1,033,556 1,023,236 ------------ ------------ STRATEGIC EQUIPMENT & SUPPLY CORPORATION, INC A provider of kitchen and restaurant design, equipment fabrication and installation services. 12% Senior Subordinated Note due 2008 $ 3,875,000 01/14/00 3,529,096 3,875,000 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 106,539 shs. 01/14/00 658,751 -- ------------ ------------ 4,187,847 3,875,000 ------------ ------------ SYNVENTIVE EQUITY LLC Amanufacturer of hot runner systems used in the plastic injection molding process. 12% Senior Subor dinated Note due 2007 $ 1,841,667 08/21/03 1,778,154 1,878,500 Limited Partnership Interest (B) 1.99% int. 08/20/03 283,333 1,257,999 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 86,780 shs. 08/21/03 85,000 385,303 ------------ ------------ 2,146,487 3,521,802 ------------ ------------ THE TRANZONIC COMPANIES A producer of commercial and industrial supplies, such as safety products, janitorial supplies, work apparel, washroom and restroom supplies and sanitary care products. 13% Senior Subordinated Note due 2009 $ 2,712,000 02/05/98 2,491,969 2,712,000 Common Stock (B) 630 shs. 02/04/98 630,000 534,477 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 444 shs. 02/05/98 368,832 376,675 ------------ ------------ 3,490,801 3,623,152 ------------ ------------
25 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- TIDEWATER HOLDINGS, INC An operator of a barge transportation line on the Columbia/Snake River system. 17% Preferred Stock (B) 560 shs. 12/23/02 $ 560,000 $ 532,000 Convertible Preferred Stock, convertible into common stock at $1,000 per share (B) 1,120 shs. 07/25/96 1,120,000 1,008,000 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 474 shs. 07/25/96 48,216 426,384 ------------ ------------ 1,728,216 1,966,384 ------------ ------------ TOMAH HOLDINGS, INC Amanufacturer of specialty chemicals 16% Senior Subor dinated Note due 201 1 $ 1,461,764 12/08/03 1,412,547 1,497,597 16% Preferred Stock Series A (B) 37 shs. 12/08/03 631,630 646,900 Common Stock (B) 5,269 shs. 12/08/03 131,471 118,323 ------------ ------------ 2,175,648 2,262,820 ------------ ------------ TRONAIR, INC A designer, engineer and manufacturer of ground support equipment for the business, commuter and commercial aviation markets. 10.5% Senior Secur ed T erm Note due 2008 $ 1,579,293 01/20/00 1,579,293 1,604,139 12% Senior Subordinated Note due 2010 $ 1,326,500 01/20/00 1,264,503 1,362,699 Common Stock (B) 227,400 shs. 01/20/00 227,400 181,920 Warrant, exercisable until 2010, to purchase common stock at $1 per share (B) 260,563 shs. 01/20/00 98,540 2,606 ------------ ------------ 3,169,736 3,151,364 ------------ ------------ TRUSTILE DOORS, INC Amanufacturer and distributor of interior doors 12.5% Senior Subor dinated Note due 2010 $ 1,062,500 04/11/03 982,438 1,080,697 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 5,781 shs. 04/11/03 95,625 58 ------------ ------------ 1,078,063 1,080,755 ------------ ------------ TUBULAR TEXTILE MACHINERY A designer, manufacturer, sale and servicer of finishing machinery for the knit and woven segments of the global textile industry. 12% Senior Subordinated Note due 2014 $ 1,234,551 05/28/04 1,108,484 1,266,268 8.75% Senior Secured Note due 2011 $ 716,292 05/28/04 716,292 738,112 Common Stock (B) 674,157 shs. 05/28/04 674,157 606,741 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 203,912 shs. 05/28/04 130,789 2,039 ------------ ------------ 2,629,722 2,613,160 ------------ ------------ TVI, INC A retailer of used clothing in the United States, Canada and Australia. Common Stock (B) 354,167 shs. 05/02/00 354,167 414,375 ------------ ------------
26 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- U S M HOLDINGS CORPORATION A provider of facility maintenance services to retail and corporate clients with multiple locations. 12% Senior Subordinated Note due 2011 $ 1,789,474 08/06/03 $ 1,521,202 $ 1,837,344 Preferred Stock (B) 3,345 shs. 08/06/03 334,494 334,495 Common Stock (B) 1,032 shs. 08/06/03 1,032 1,032 Warrant, exercisable until 2011, to purchase common stock at $.01 per shar e (B) 949 shs. 08/06/03 298,198 9 ------------ ------------ 2,154,926 2,172,880 ------------ ------------ U-LINE CORPORATION Amanufacturer of high-end, built-in, undercounter icemaking, wine storage and refrigeration appliances 12.5% Senior Subordinated Note due 2012 $ 1,882,100 04/30/04 1,679,510 1,918,090 10% Junior Subordinated Note due 2012 $ 63,735 04/30/04 63,750 64,146 Common Stock (B) 182 shs 04/30/04 182,200 163,980 Warrant, exercisable until 2012, to purchase common stock at $1 per share (B) 230 shs. 04/30/04 211,736 2 ------------ ------------ 2,137,196 2,146,218 ------------ ------------ VICTORY VENTURES LLC An acquirer of controlling or substantial interests in other entities. Series A Preferred Units (B) 0.13% int. 12/02/96 1 2 ------------ ------------ VITALITY FOODSERVICE, INC A non-carbonated beverage dispensing company focused on the foodservice industry. 13% Senior Subordinated Note due 2011 $ 1,887,288 09/24/04 1,704,660 1,914,282 Common Stock (B) 23,771 shs. 09/24/04 237,710 213,939 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 23,787 shs. 09/24/04 186,883 238 ------------ ------------ 2,129,253 2,128,459 ------------ ------------ VITEX PACKAGING GROUP, INC Amanufacturer of specialty packaging, primarily envelopes and tags used on tea bags and medical and food products. 12.5% Senior Subordinated Note due 2012 $ 1,700,000 07/19/04 1,483,065 1,711,027 Limited Partnership Interest Class A (B) 414,375 uts. 07/19/04 414,375 372,938 Limited Partnership Interest Class B (B) 182,935 uts. 07/19/04 182,935 164,642 ------------ ------------ 2,080,375 2,248,607 ------------ ------------ WALLS INDUSTRIES, INC A provider of branded workwear and sporting goods apparel 10% Senior Subordinated Lien Note due 2009 $ 1,006,579 07/12/04 1,006,579 996,155 14% Senior Subordinated Note due 2012 $ 1,048,440 07/12/04 1,045,537 1,037,943 Limited Partnership Interest (B) 0.40% int. 07/12/04 37,281 33,553 Warrant, exercisable until 2014, to purchase common stock at $.01 per share (B) 4,029 shs. 07/12/04 2,833 40 ------------ ------------ 2,092,230 2,067,691 ------------ ------------
27 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004
Shares, Units Warrants, Ownership Acquisition Corporate Restricted Securities(A)(Continued) or Principal Amount Date Cost Fair Value - ---------------------------------------------------------------------------------------------------------------------------------- WASHINGTON INVENTORY SERVICES, INC A provider of physical inventory taking and other related services to retailers. 12.5% Senior Subordinated Note due 2011 $ 1,075,768 11/03/00 $ 1,050,602 $ 1,086,526 Senior Preferred Stock (B) 4,692 shs. 11/01/00 224,031 219,540 Class B Common Stock (B) 8,959 shs. 11/01/00 8,959 82,486 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 3,979 shs. 11/03/00 -- 36,599 ------------ ------------ 1,283,592 1,425,151 ------------ ------------ WEASLER HOLDINGS LLC Amanufacturer of mechanical power transmission components for the agricultural, lawn and turf industries. Limited Partnership Interest (B) 1.55% int. 02/03/03 101,190 117,380 Warrant, exercisable until 2010, to purchase common stock at $.01 per shar e (B) 256 shs. 02/04/03 209,829 297,262 ------------ ------------ 311,019 414,642 ------------ ------------ WICOR AMERICAS, INC Amanufacturer of cellulose based insulation products, systems and services for electrical transformer equipment manufacturers. 20% Senior Subordinated Secured Note due 2009 $ 2,520,040 11/09/01 2,594,199 2,517,822 ------------ ------------ Total Private Placement Investments $164,315,614 $160,130,838 ------------ ------------
28 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004 (Unaudited)
Interest Due Shares or Corporate Restricted Securities:(A) (Continued) Rate Date Principal Amount Cost Fair Value - --------------------------------------------------------------------------------------------------------------------------------- Rule 144A Securities - 8.83%: (A) BONDS - 8.44% A E S Corporation 8.750% 05/15/13 $ 1,025,000 $ 1,129,312 $ 1,164,656 A E S Corporation 9.000 05/15/15 200,000 200,000 229,000 Affinia Group, Inc. 9.000 11/30/14 960,000 974,316 1,000,800 BCP Caylux Holding Lux SCA 9.625 06/15/14 750,000 752,424 845,625 Blockbuster, Inc. 9.000 09/01/12 475,000 477,178 469,062 Bombardier, Inc. 6.300 05/01/14 1,000,000 890,000 867,500 C C O Holdings LLC 6.615 12/15/10 500,000 500,000 500,000 Cablevision Systems Corporation 6.669 04/01/09 1,000,000 1,000,000 1,060,000 Calpine Corporation 8.750 07/15/13 500,000 465,000 412,500 Charter Communications Op LLC 8.000 04/30/12 250,000 249,375 260,000 Dana Credit Corporation 8.375 08/15/07 500,000 500,000 545,000 Douglas Dynamics LLC 7.750 01/15/12 325,000 325,000 329,469 GulfMark Offshore, Inc. 7.750 07/15/14 565,000 562,599 598,900 Interactive Health LLC 7.250 04/01/11 900,000 737,200 783,000 Jostens I H Corp 7.625 10/01/12 1,250,000 1,250,000 1,300,000 K 2, Inc. 7.375 07/01/14 325,000 325,000 355,875 Maax Holdings, Inc. (B) 0.000 12/15/12 1,250,000 805,563 784,375 Magnachip Semiconductor 8.000 12/15/14 100,000 100,000 104,250 Markwest Energy 6.875 11/01/14 475,000 475,000 482,125 Metaldyne Corporation 10.000 11/01/13 510,000 514,020 484,500 N R G Ener gy, Inc. 8.000 12/15/13 700,000 700,000 763,000 Pinnacle Foods Holding 8.250 12/01/13 450,000 450,000 428,625 Rogers Wireless, Inc. 7.250 12/15/12 165,000 165,000 174,900 Rogers Wireless, Inc. 8.000 12/15/12 165,000 165,000 174,487 Rogers Wireless, Inc. 7.500 03/15/15 120,000 120,000 126,600 Siebe PLC 6.500 01/15/10 650,000 572,000 620,750 Stanadyne Corporation 10.000 08/15/14 1,500,000 1,500,000 1,620,000 Tenet Healthcare Corporation 9.875 07/01/14 500,000 488,370 545,000 Texas Genco LLC 6.875 12/15/14 705,000 705,000 728,794 Universal City Florida 7.200 05/01/10 200,000 200,000 208,000 Universal City Florida 8.375 05/01/10 200,000 200,000 207,500 Warner Music Group 7.375 04/15/14 275,000 275,000 281,875 ------------ ------------ ------------ TOTAL BONDS $ 18,490,000 17,772,357 18,456,168 ------------ ------------ ------------ COMMON STOCK - 0.00% Jordan Telecom Products (B) 70 $ 14,000 -- ------------ ------------ TOTAL COMMON STOCK 14,000 -- ------------ ------------ CONVERTIBLE BONDS - 0.39% Cymer, Inc. 3.500% 02/15/09 $ 850,000 $ 850,000 $ 845,750 ------------ ------------ ------------ TOTAL CONVERTIBLE BONDS $ 850,000 850,000 845,750 ------------ ------------ ------------ WARRANTS - 0.00% Winsloew Furniture, Inc. (B) 900 $ 9 $ 14 ------------ ------------ TOTAL WARRANTS 9 14 ------------ ------------ TOTAL RULE 144A SECURITIES 18,636,366 19,301,932 ------------ ------------ TOTAL CORPORATE RESTRICTED SECURITIES $182,951,980 $179,432,770 ------------ ------------
29 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004 (Unaudited)
Interest Due Corporate Public Securities - 30.00%:(A) Rate Date Principal Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- BONDS - 26.01% A E P Industries, Inc. 9.875% 11/15/07 $ 350,000 $ 333,375 $ 356,125 Abitibi-Consolidated, Inc. 7.750 06/15/11 1,000,000 1,036,668 1,050,000 Activant Solutions, Inc. 10.500 06/15/11 850,000 860,973 913,750 Aearo Co. 8.250 04/15/12 450,000 450,000 463,500 Alamosa Delaware, Inc. 11.000 07/31/10 325,000 330,305 382,688 Alamosa Delaware, Inc. 8.500 01/31/12 400,000 400,000 437,000 Allied W aste NA 7.875 04/15/13 1,000,000 1,027,239 1,025,000 American Media Operation, Inc. 8.875 01/15/11 900,000 901,677 957,375 Appleton Papers, Inc. 8.125 06/15/11 300,000 300,000 323,250 Argo Tech Corporation 9.250 06/01/11 850,000 850,000 932,875 B & G Foods, Inc. 8.000 10/01/11 700,000 700,000 745,500 Bally Total Fitness Holding Corporation 9.875 10/15/07 135,000 128,925 116,100 C S C Holdings, Inc. 7.625 04/01/11 500,000 502,174 538,750 Cadmus Communications Corporation 8.375 06/15/14 750,000 750,000 816,563 Cenveo Corporation 7.875 12/01/13 1,100,000 1,100,000 1,023,000 Charter Comm Holdings LLC 10.000 04/01/09 1,000,000 815,000 900,000 Chemed Corporation 8.750 02/24/11 1,125,000 1,125,000 1,175,625 Chesapeake Energy Corporation 7.000 08/15/14 325,000 325,000 346,125 Cincinnati Bell, Inc. 8.375 01/15/14 1,100,000 1,007,500 1,113,750 Collins & Aikman Products Co. 10.750 12/31/11 1,000,000 1,027,549 1,020,000 Del Monte Corporation 8.625 12/15/12 225,000 225,000 252,000 Dollar Financial Group 9.750 11/15/11 600,000 600,000 651,000 Dominos, Inc. 8.250 07/01/11 292,000 289,892 319,010 Dynegy Holdings, Inc. 6.875 04/01/11 500,000 422,500 481,250 El Paso Corporation 7.875 06/15/12 300,000 303,716 313,875 Esterline T echnologies 7.750 06/15/13 200,000 200,000 218,500 Flextronics Intl Ltd 6.500 05/15/13 400,000 400,000 410,000 G F S I, Inc. 9.625 03/01/07 750,000 675,180 727,500 Gencorp, Inc. 9.500 08/15/13 400,000 400,000 446,000 General Nutrition Center 8.500 12/01/10 800,000 800,000 756,000 Goodyear Tire & Rubber Co. 7.857 08/15/11 650,000 607,750 659,750 Great Lakes Dr edge & Dock Corporation 7.750 12/15/13 750,000 679,250 682,500 Houghton Mif flin Co. 9.875 02/01/13 1,000,000 1,055,505 1,095,000 Huntsman LLC 11.625 10/15/10 500,000 494,075 591,250 Imax Corporation 9.625 12/01/10 500,000 500,000 545,000 Interpool, Inc. 7.350 08/01/07 750,000 766,118 761,250 Intrawest Corporation 7.500 10/15/13 500,000 500,000 531,875 Koppers Inc. 9.875 10/15/13 700,000 700,000 798,000 Land O'Lakes, Inc. 9.000 12/15/10 750,000 750,000 821,250 Leucadia National Corporation 7.000 08/15/13 650,000 663,513 669,500 Lodgenet Entertainment Corporation 9.500 06/15/13 425,000 425,000 469,625 Lyondell Chemical Co. 9.500 12/15/08 900,000 921,349 976,500 M C I, Inc. 7.735 05/01/14 1,000,000 905,000 1,075,000 M G M Mirage, Inc. 6.000 10/01/09 375,000 380,351 384,375 M S X International, Inc. 11.000 10/15/07 350,000 347,004 353,500 Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 530,000 Manitowoc Company , Inc. 7.125 11/01/13 200,000 200,000 216,500 Mediacom LLC 9.500 01/15/13 1,150,000 1,136,000 1,154,312
30 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004 (Unaudited)
Interest Due Corporate Public Securities:(A)continued Rate Date Principal Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- Merrill Corporation 12.000% 05/01/09 $ 1,000,000 $ 1,059,737 $ 1,060,000 Metaldyne Corporation 11.000 06/15/12 750,000 601,250 622,500 Mrs Fields Brands/Finance 11.500 03/15/11 750,000 713,710 746,250 Nalco Co. 7.750 11/15/11 500,000 500,000 540,000 National Wine & Spirit, Inc. 10.125 01/15/09 500,000 485,250 495,000 Neff Corporation 10.250 06/01/08 170,000 168,062 163,625 Nextel Communications Corporation 7.375 08/01/15 700,000 713,878 770,000 North Amer Energy Partners 8.750 12/01/11 400,000 400,000 408,000 Numatics, Inc. 9.625 04/01/08 550,000 539,527 503,250 O E D Corp/Diamond Jo Company Guarantee 8.750 04/15/12 1,000,000 985,960 980,000 O M Group, Inc. 9.250 12/15/11 750,000 777,169 798,750 Offshore Logistics, Inc. 6.125 06/15/13 450,000 450,000 456,750 Pacific Energy Partners 7.125 06/15/14 500,000 504,417 532,500 Pliant Corporation 0.000 06/15/09 875,000 757,308 975,000 Pliant Corporation 13.000 06/01/10 1,000,000 936,875 808,281 Quintiles T ransnational Corporation 10.000 10/01/13 500,000 500,000 560,000 Rayovac Corporation 8.500 10/01/13 200,000 200,000 222,000 Rent-A-Center, Inc. 7.500 05/01/10 400,000 400,000 414,500 Rent-Way, Inc. 11.875 06/15/10 800,000 846,661 901,000 Rhodia SA 10.250 06/01/10 800,000 829,320 900,000 Rhodia SA 8.875 06/01/11 500,000 499,668 503,750 S P X Corporation 6.250 06/15/11 400,000 400,000 422,000 Sea Containers Ltd 10.500 05/15/12 785,000 765,526 826,213 Service Corporation International 6.000 12/15/05 41,000 41,185 41,717 Sheridan Acquisition Corporation 10.250 08/15/11 375,000 370,001 410,156 Ship Finance Intl Ltd 8.500 12/15/13 750,000 750,000 772,500 Sports Club Co. 11.375 03/15/06 150,000 145,500 145,500 Tekni-Plex, Inc. 12.750 06/15/10 1,000,000 960,125 950,000 Telex Communications, Inc. 0.000 01/15/09 471,915 206,820 283,149 Telex Communications, Inc. 11.500 10/15/08 500,000 500,000 545,000 Tenet Healthcare Corporation 6.375 12/01/11 500,000 482,500 463,750 Tenneco Automotive, Inc. 10.250 07/15/13 400,000 400,000 472,000 Thermadyne Holdings Corporation 9.250 02/01/14 1,000,000 986,250 975,000 Triton P C S, Inc. 8.500 06/01/13 550,000 550,000 530,750 United Rentals, Inc. 7.750 11/15/13 625,000 625,000 612,500 United Rentals, Inc. 7.000 02/15/14 500,000 500,000 467,500 Utilicorp United, Inc. 9.950 02/01/11 1,000,000 1,107,176 1,132,500 Vicorp Restaurants, Inc. 10.500 04/15/11 600,000 592,746 603,000 Vought Aircraft Industries 8.000 07/15/11 1,000,000 1,001,034 972,500 Williams Scotsman, Inc. 9.875 06/01/07 500,000 492,500 500,000 Wornick Co. 10.875 07/15/11 750,000 750,000 813,750 ------------ ------------ ------------ TOTAL BONDS $ 55,269,915 54,313,743 56,827,939 ------------ ------------ ------------
31 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2004 (Unaudited)
Interest Due Shares or Corporate Public Securities:(A)continued Rate Date Principal Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK - 3.42% Bill Barrett Corp. (B) 27,800 $ 695,000 $ 889,322 Calamos Asset Management Inc. (B) 13,600 244,800 367,200 Conor Medsystems, Inc. (B) 3,300 42,900 45,705 Dreamworks Animation SKG (B) 6,500 182,000 243,815 Foundation Coal Holdings, Inc. (B) 3,400 74,800 78,404 H C I Direct, Inc. (B) 1,000 -- -- Iowa Telecomm Services, Inc. (B) 6,600 125,400 142,362 Las Vegas Sands Corporation (B) 500 14,500 24,000 Orange 21, Inc. (B) 9,800 85,750 102,410 PepsiAmericas, Inc. 92,145 2,006,365 1,957,160 Rent-Way, Inc. (B) 92,866 916,263 743,857 Supreme Industries, Inc. 115,722 267,325 741,778 T G C Industries, Inc. (B) 6,361 9,497 18,700 Telex Communications, Inc. (B) 489 7 489 Telex Communications, Inc. (B) 17,707 1 177 The 9 Limited (B) 3,300 56,100 77,946 Transmontaigne, Inc. (B) 333,326 1,109,176 2,043,289 ------------ ------------ TOTAL COMMON STOCK 5,829,884 7,476,614 CONVERTIBLE BONDS - 0.57% Leucadia National Corporation 3.750% 04/15/14 $ 1,000,000 $ 1,000,000 $ 1,236,250 ------------ ------------ ------------ TOTAL CONVERTIBLE BONDS $ 1,000,000 1,000,000 1,236,250 ============ ------------ ------------ TOTAL CORPORATE PUBLIC SECURITIES $ 61,143,627 $ 65,540,803 ------------ ------------ Interest Due Short-Term Securities: Rate/Yield Date Principal Amount Cost Market Value - --------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL PAPER - 1.03% Alcoa, Inc. 2.170% 01/03/05 $ 1,358,000 $ 1,357,836 $ 1,357,836 Union Electric Company 2.300 01/04/05 895,000 894,829 894,829 ------------ ------------ ------------ TOTAL SHORT-TERM SECURITIES $ 2,253,000 $ 2,252,665 $ 2,252,665 ============ ------------ ------------ TOTAL INVESTMENTS 113.15% $246,348,272 $247,226,238 ============ ------------ Other Assets 4.71 10,295,613 Liabilities (17.86) (39,016,703) ------ ------------ TOTAL NET ASSETS 100.00% $218,505,148 ====== ============
(A)In each of the convertible note, warrant, convertible preferred and common stock investments, the issuer has agreed to provide certain registration rights. (B)Non-income producing security. See Notes to Consolidated Financial Statements. 32 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2004 Fair Value/ Industry Classification: Market Value - ------------------------------------------------------------ AEROSPACE - 2.36% Argo Tech Corporation $ 932,875 Bombardier, Inc. 867,500 Esterline Technologies 218,500 Qualis Automotive LLC 2,156,590 Vought Aircraft Industries 972,500 ------------ 5,147,965 ------------ AUTOMOBILE - 7.69% America's Body Company, Inc./LCP Holding Co. 3,150,002 Collins & Aikman Products Co. 1,020,000 Gencorp, Inc. 446,000 Goodyear Tire & Rubber Co. 659,750 Jason, Inc. 1,604,633 LIH Investors, L.P. 5,150,855 Metaldyne Corporation 1,107,000 Nyloncraft, Inc. 3,182,679 Tenneco Automotive, Inc. 472,000 ------------ 16,792,919 ------------ BEVERAGE, DRUG & FOOD - 6.65% B & G Foods, Inc. 745,500 Beta Brands Ltd -- Cains Foods, L.P. 411,709 Del Monte Corporation 252,000 Dominos, Inc. 319,010 Eagle Pack Pet Foods, Inc. 1,064,401 Land O' Lakes, Inc. 821,250 National Wine & Spirit Inc. 495,000 Nonni's Food Company, Inc. 2,227,420 PepsiAmericas, Inc. 1,957,160 Pinnacle Foods Holdings 428,625 River Ranch Fresh Foods LLC 2,124,162 Specialty Foods Group, Inc. 135,261 Vicorp Restaurants, Inc. 603,000 Vitality Foodservice, Inc. 2,128,459 Wornick Co. 813,750 ------------ 14,526,707 ------------ BROADCASTING & ENTERTAINMENT - 2.70% C C O Holdings LLC 500,000 C S C Holdings, Inc. 538,750 Cablevision Systems Corporation 1,060,000 Cenveo Corporation 1,023,000 Charter Communications Holdings LLC 260,000 Charter Communications Op LLC 900,000 Lodgenet Entertainment Corporation 469,625 Mediacom LLC 1,154,312 ------------ 5,905,687 ------------ Fair Value/ Industry Classification: continued Market Value - ------------------------------------------------------------ BUILDINGS & REAL ESTATE - 5.09% AW C Holding Company $ 2,120,204 Adorn, Inc. 2,411,193 Eagle Window & Door Holding Co. 3,143,172 Shelter Acquisition, Inc. 2,362,446 TruStile Doors, Inc. 1,080,755 ------------ 11,117,770 ------------ CARGO TRANSPORT - 2.38% Kenan-Advantage Transport Company 2,467,787 Ship Finance International Ltd. 772,500 Tidewater Holdings, Inc. 1,966,384 ------------ 5,206,671 ------------ CHEMICAL, PLASTICS & RUBBER - 3.26% Capital Specialty Plastics, Inc. 503 Huntsman LLC 591,250 Koppers Inc. 798,000 Lyondell Chemical Co. 976,500 O M Group, Inc. 798,750 Process Chemicals LLC 288,000 Rhodia SA 1,403,750 Tomah Holdings, Inc. 2,262,820 ------------ 7,119,573 ------------ CONSUMER PRODUCTS - 9.29% Appleton Papers, Inc. 323,250 Augusta Sportswear Holding Co. 2,094,001 Colibri Holdings Corporation 1,920,649 Euro-Pro Corporation 2,130,592 G F S I, Inc. 727,500 H C I Direct, Inc. -- Justrite Manufacturing Acquisition Co. 1,588,587 K 2, Inc. 355,875 Maax Holdings, Inc. 784,375 Maverick Acquisition Company 1,148,603 Neff Motivation, Inc. 163,625 Rayovac Corporation 222,000 Royal Baths Manufacturing Company 1,055,670 Savage Sports Holding, Inc. 2,091,540 The Tranzonic Companies 3,623,152 Walls Industries, Inc. 2,067,691 Winsloew Furniture, Inc. 14 ------------ 20,297,124 ------------ CONTAINERS, PACKAGING & GLASS - 6.81% A E P Industries, Inc. 356,125 Paradigm Packaging, Inc. 2,765,156 Pliant Corporation 1,783,281 Sea Containers Ltd. 826,213 33 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2004 Fair Value/ Industry Classification: continued Market Value - ------------------------------------------------------------ Selig Acquisition Corporation $ 2,665,925 Snyder Industries, Inc. 3,279,379 Tekni-Plex, Inc. 950,000 Vitex Packaging, Inc. 2,248,607 ------------ 14,874,686 ------------ DISTRIBUTION - 6.82% Affinia Group, Inc. 1,000,800 Brampton Fastener Co. Ltd 1,885,770 Corvest Group, Inc. 3,712,360 G C-Sun Holdings LP -- Kele and Associates, Inc. 2,331,308 QualServ Corporation 2,089,987 Strategic Equip & Supply Corporation, Inc. 3,875,000 ------------ 14,895,225 ------------ DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 3.81% Activant Solutions Inc 913,750 Coining of America LLC 1,933,750 Dexter Magnetics Technologies, Inc. 1,328,498 Douglas Dynamics LLC 329,469 Evans Consoles, Inc. 200,934 Great Lakes Dredge & Dock Corporation 682,500 S P X Corporation 422,000 Wicor Americas, Inc. 2,517,822 ------------ 8,328,723 ------------ DIVERSIFIED/CONGLOMERATE, SERVICE - 7.52% Abitibi-Consolidated, Inc. 1,050,000 Allied Waste NA 1,025,000 Calamos Asset Management, Inc. 367,200 CapeSuccess LLC 5,862 Chemed Corporation 2,517,825 Diversco, Inc./DHI Holdings, Inc. 1,392,069 Dreamworks Animation SKG 243,815 Dwyer Group, Inc. 2,493,287 Hamilton Funeral Services Centers, Inc. 380,271 Lancaster Laboratories, Inc. 821,243 Moss, Inc. 1,548,843 M S X International, Inc. 353,500 Orange 21, Inc. 102,410 Service Corporation International 41,717 The 9 Limited 77,946 U S M Holdings Corporation 2,172,880 Universal City Florida 415,500 Washington Inventory Services, Inc. 1,425,151 ------------ 16,434,519 ------------ Fair Value/ Industry Classification: continued Market Value - ------------------------------------------------------------ ELECTRONICS - 3.76% A E S Corporation $ 1,393,656 Calpine Corporation 412,500 Directed Electronics, Inc. 2,143,423 Flextronics International Ltd. 410,000 N R G Energy, Inc. 763,000 Precision Dynamics, Inc. 1,736,159 Siebe PLC 620,750 Texas Genco LLC 728,794 ------------ 8,208,282 ------------ FARMING & AGRICULTURE - 0.00% Protein Genetics, Inc. -- ------------ FINANCIAL SERVICES - 2.74% BCP Caylux Holding Lux SCA 845,625 Dana Credit Corporation 545,000 Dollar Financial Group 651,000 East River Ventures I, L.P. 27,300 Highgate Capital LLC 2,723 Interpool, Inc. 761,250 Leucadia National Corporation 1,905,750 Mrs. Fields Brands / Finance 746,250 Victory Ventures LLC 2 Williams Scotsman, Inc. 500,000 ------------ 5,984,900 ------------ HEALTHCARE, EDUCATION & CHILDCARE - 4.34% A T I Acquisition Company 2,127,174 American Hospice Management Holding LLC 2,437,250 Conor Medsystems, Inc. 45,705 Interactive Health LLC 783,000 MedAssist, Inc. 2,518,392 Quintiles Transnational Corporation 560,000 Tenet Healthcare Corporation 1,008,750 ------------ 9,480,271 ------------ HOME & OFFICE FURNISHINGS, HOUSEWARES, AND DURABLE CONSUMER PRODUCTS -3.46% Home Decor Holding Company 2,141,306 Hussey Seating Corporation 2,257,383 Sport Court Int'l, Inc. 1,023,236 U-Line Corporation 2,146,218 ------------ 7,568,143 ------------ LEISURE, AMUSEMENT, ENTERTAINMENT - 2.28% Bally Total Fitness Holding Corp 116,100 IMAX Corporation 545,000 Intrawest Corporation 531,875 Keepsake Quilting, Inc. 1,600,860 Las Vegas Sands Corporation 24,000 34 MassMutual Corporate Investors CONSOLIDATED SCHEDULE OF INVESTMENTS December 31, 2004 Fair Value/ Industry Classification: continued Market Value - ------------------------------------------------------------ M G M Mirage, Inc. $ 384,375 Majestic Star Casino LLC 530,000 O E D Corp/Diamond Jo Company Guarantee 980,000 Warner Music Group 281,875 ------------ 4,994,085 ------------ MACHINERY - 12.13% Aearo Co. 463,500 C & M Conveyor, Inc. 2,120,553 Integration Technology Systems, Inc. 1,677,601 Manitowoc Company, Inc. 216,500 Maxon Corporation 2,589,115 N P C, Inc. 3,363,549 Numatics, Inc. 503,250 PW Eagle, Inc. 391,223 Safety Speed Cut Manufacturing Company, Inc. 2,876,581 Stanadyne Corporation 1,620,000 Synventive Equity LLC 3,521,802 Thermadyne LLC 975,000 Tronair, Inc. 3,151,364 Tubular Textile Machinery 2,613,160 Weasler Holdings LLC 414,642 ------------ 26,497,840 ------------ MEDICAL DEVICES/BIOTECH - 2.45% Bausch & Lomb, Inc. Beacon Medical Products, Inc. 1,992,778 Coeur, Inc. 1,140,710 E X C Acquisition Corporation 2,226,556 ------------ 5,360,044 ------------ MINING, STEEL, IRON & NON PRECIOUS METALS - 0.05% Better Minerals & Aggregates 108,990 ------------ OIL & GAS - 3.04% Chesapeake Energy Corporation 346,125 Dynegy Holdings, Inc. 481,250 Foundation Coal Holdings, Inc. 78,404 GulfMark Offshore, Inc. 598,900 Mustang Ventures Company 938,300 North American Energy Partners 408,000 Offshore Logistics, Inc. 456,750 Pacific Energy Partners 532,500 Supreme Industries, Inc. 741,778 T G C Industries, Inc. 18,700 Transmontaigne, Inc. 2,043,289 ------------ 6,643,996 ------------ PHARMACEUTICALS - 0.44% Enzymatic Therapy, Inc. 961,568 Publishing/Printing - 2.58% American Media Operation, Inc. $ 957,375 Cadmus Communications Corporation 816,563 Houghton Mifflin Co. 1,095,000 Jostens I H Corporation 1,300,000 Merrill Corporation 1,060,000 Sheridan Acquisition Corporation 410,156 ------------ 5,639,094 ------------ RETAIL STORES - 5.66% Blockbuster, Inc. 469,062 General Nutrition Center 756,000 Neff Corporation 1,191,719 Olympic Sales, Inc. 3,594,165 P H I Holding Company 2,662,843 Rent-A-Center, Inc. 414,500 Rent-Way, Inc. 1,644,857 Sports Club Co. 145,500 TVI, Inc. 414,375 United Rentals, Inc. 1,080,000 ------------ 12,373,021 ------------ TECHNOLOGY - 0.70% Cymer, Inc. 845,750 Delstar Holding Corporation 441,596 Iowa Telecomm Services, Inc. 142,362 Magnachip Semiconductor 104,250 ------------ 1,533,958 ------------ TELECOMMUNICATIONS - 2.57% Alamosa Delaware, Inc. 819,688 Cincinnati Bell, Inc. 1,113,750 Jordan Telecom Products -- MCI, Inc. 1,075,000 Nextel Communications Corporation 770,000 Rogers Wireless, Inc. 475,987 Telex Communications, Inc. 828,815 Triton P C S, Inc. 530,750 ------------ 5,613,990 ------------ UTILITIES - 1.54% Bill Barrett Corporation 889,322 El Paso Corporation 313,875 Markwest Energy 482,125 Nalco Co. 540,000 Utilicorp United, Inc. 1,132,500 ------------ 3,357,822 ------------ TOTAL CORPORATE RESTRICTED AND PUBLIC SECURITIES - 112.12% $244,973,573 ============ SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 35 MassMutual Corporate Investors NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 1. HISTORY MassMutual Corporate Investors (the "Trust") commenced operations in 1971 as a Delaware corporation. Pursuant to an Agreement and Plan of Reorganization dated November 14, 1985, approved by shareholders, the Trust was reorganized as a Massachusetts business trust under the laws of the Commonwealth of Massachusetts, effective November 28, 1985. The Trust is a closed-end management investment company. Babson Capital Management LLC, formerly David L. Babson & Company Inc. ("Babson"), a wholly-owned indirect subsidiary of Massachusetts Mutual Life Insurance Company, ("MassMutual"), acts as its investment adviser. The Trust's investment objective is to maintain a portfolio of securities providing a fixed yield while providing an opportunity for capital gains, by investing primarily in a portfolio of privately placed below-investment grade, long term corporate debt obligations with equity features, such as warrants, conversions rights or other equity features and, occasionally, preferred stocks purchased directly from their issuers. On January 27,1998, the Board of Trustees authorized the formation of a wholly-owned subsidiary ("MMCI Subsidiary Trust") for the purpose of holding certain investments. The results of MMCI Subsidiary Trust have been included in the accompanying consolidated financial statements. Footnote 2-D, below discusses the Federal tax consequences of the MMCI Subsidiary Trust. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed consistently by the Trust in the preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. A. VALUATION OF INVESTMENTS Valuation of a security in the Trust's portfolio is made on the basis of market price whenever market quotations are readily available and all securities of the same class held by the Trust can be readily sold in such market. Nearly all securities which are acquired by the Trust directly from the issuers and shares into which such securities may be converted or which may be purchased on the exercise of warrants attached to such securities will be subject to legal or contractual delays in, or restrictions on, resale and will therefore be "restricted securities." Generally speaking, as contrasted with open-market sales of unrestricted securities which may be effected immediately if the market is adequate, absent an exemption from registration, restricted securities can be sold only in a public offering for which a registration statement is in effect under the Securities Act of 1933. The value of restricted securities, and of any other assets for which there are no reliable market quotations, is the fair value as determined in good faith by the Trust's Board of Trustees (the "Trustees"). Each restricted security is valued by the Trustees at the time of the acquisition thereof and at least quarterly thereafter. The Trustees have established guidelines to aid in the valuation of each security. Generally, restricted securities are initially valued at cost or less at the time of acquisition by the Trust. Values greater or less than cost are used thereafter for restricted securities in appropriate circumstances. Among the factors ordinarily considered are the existence of restrictions upon the sale of the security by the Trust; an estimate of the existence and extent of a market for the security; the extent of any discount at which the security was acquired; the estimated period of time during which the security will not be freely marketable; the estimated expenses of registering or otherwise qualifying the security for public sale; estimated underwriting commissions if underwriting would be required to effect a sale; in the case of a convertible security, whether or not it would trade on the basis of its stock equivalent; in the case of a debt obligation which would trade independently of any equity equivalent, the current yields on comparable securities; the estimated amount of the floating supply of such securities available for purchase; the proportion of the issue held by the Trust; changes in the financial condition and prospects of the issuer; the existence of merger proposals or tender offers affecting the issuer; and any other factors affecting fair value, all in accordance with the Investment Company Act of 1940. In making valuations, opinions of counsel may be relied upon as to whether or not securities are restricted securities and as to the legal requirements for public sale. When market quotations are readily available for unrestricted securities of an issuer, restricted securities of the same class are generally valued at a discount from the market price of such unrestricted securities. The Trustees, however, consider all factors in fixing any discount, including the filing of a registration statement for such securities under the Securities Act of 1933 and any other developments which are likely to increase the probability that the securities may be publicly sold by the Trust without restriction. The Trust's Board of Trustees meets at least once in each quarter to value the Trust's portfolio securities as of the close of business on the last business day of the preceding quarter. This valuation requires the approval of a majority of the Trustees of the Trust, including a majority of the Trustees who are not interested persons of the Trust or of Babson, the Trust's investment adviser. In making valuations, the Trustees will consider reports by Babson analyzing each portfolio security in accordance with the relevant factors referred to above. Babson has agreed to provide such reports to the Trust at least quarterly. The financial statements include restricted securities valued at $160,130,838 (73.29% of net assets) as of December 31, 2004 whose values have been estimated by the Board of Trustees in the absence of readily ascertainable market values. Due to the inherent uncertainty of valuation, those estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the differences could be material. The values for corporate public securities are stated at the last reported sales price or at prices based upon quotations obtained from brokers and dealers as of December 31, 2004, subject to discount where appropriate, and are approved by the Trustees. Short-term securities with more than sixty days to maturity are valued at fair value and short-term securities having a maturity of sixty days or less are valued at amortized cost which approximates market value. 36 MassMutual Corporate Investors NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 B. ACCOUNTING FOR INVESTMENTS Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. The Trust does not accrue income when payment is delinquent and when management believes payment is questionable. Discounts and premiums on securities purchased are amortized, over the lives of the respective securities. Realized gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement and federal income tax purposes on the identified cost method. C. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. FEDERAL INCOME TAXES The Trust has elected to be taxed as a "regulated investment company" under the Internal Revenue Code, and intends to maintain this qualification and to distribute substantially all of its net taxable income to its shareholders. In any year when net long-term capital gains are realized by the Trust, management, after evaluating the prevailing economic conditions, will recommend to the Trustees either to designate the net realized long-term gains as undistributed and to pay the federal capital gains taxes thereon or to distribute all or a portion of such net gains. For the year ended December 31, 2004, the Trust had a net realized taxable capital gain balance of $4,069,005, which the Trustees voted to retain and pay the federal capital gain tax thereon. The Trust has accrued a provision for federal taxes of $1,424,152 on the Statement of Operations related to the retained net realized capital gains. In 2004, the Trust re-classified a total of $1,406,376 from undistributed net realized gains. $1,278,426 was re-classified to undistributed net investment income and $127,950 was reclassified to additional paid in capital to more accurately display the Trust's financial position. These re-classifications had no impact on net asset value. The Trust is taxed as a regulated investment company and is therefore limited as to the amount of non-qualified income that it may receive as the result of operating a trade or business, e.g. the Trust's pro rata share of income allocable to the Trust by a partnership operating company. The Trust's violation of this limitation could result in the loss of its status as a regulated investment company, thereby subjecting all of its net income and capital gains to corporate taxes prior to distribution to its shareholders. The Trust, from time-to-time, identifies investment opportunities in the securities of entities that could cause such trade or business income to be allocable to the Trust. The MMCI Subsidiary Trust (described in Footnote 1, above) was formed in order to allow investment in such securities without adversely affecting the Trust's status as a regulated investment company. The MMCI Subsidiary Trust is not taxed as a regulated investment company. Accordingly, prior to the Trust receiving any distributions from the MMCI Subsidiary Trust, all of the MMCI Subsidiary Trust's taxable income and realized gains, including non-qualified income and realized gains, is subject to taxation at prevailing corporate tax rates. For the year ended December 31, 2004 the MMCI Subsidiary Trust has accrued income tax expense on income and realized gains of $299,950 and $953,557, respectively. E. DISTRIBUTIONS TO SHAREHOLDERS The Trust records distributions to shareholders from net investment income and net realized gains, if any, on the exdividend date. The Trust's net investment income dividend is declared four times per year, in April, July, October and December. The Trust's net realized capital gain distribution, if any, is declared in December. The tax character of distributions paid during the years ended December 31, 2004 and 2003 were as follows: DISTRIBUTIONS PAID FROM: 2004 2003 --------------------------- Ordinary Income $19,329,769 $16,293,478 As of December 31, 2004, the components of distributable earnings on a tax basis included $1,303,697 of undistributed ordinary income. Such distributions and distributable earnings on a tax basis are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States. Net investment income of the Trust as presented under accounting principles generally accepted in the United States differs from distributed earnings due to a distribution made from after tax earnings of the MMCI Subsidiary Trust to the Trust. The Trusts treats the distribution from the MMCI Subsidiary Trust as taxable earnings. 3. INVESTMENT SERVICES FEE Under an Investment Services Contract with the Trust dated July 1, 1988 Babson has agreed to use its best efforts to present to the Trust a continuing and suitable investment program consistent with the investment objectives and policies of the Trust. Babson has further agreed that it will request each issuer of securities which MassMutual is prepared to purchase in a private placement, and which would be consistent with the investment objectives and policies of the Trust, to also offer such securities to the Trust. Babson will use its best efforts to insure that issuers accede to such requests. MassMutual has agreed that, subject to such orders of the Securities and Exchange Commission as may apply, it will invest concurrently with the Trust in any such investment. Babson represents the Trust in any negotiations with issuers, investment banking firms, securities brokers or dealers and other institutions or investors relating to the Trust's investments. Under the contract, Babson provides administration of the day-to-day operations of the Trust and provides the Trust with office space and office equipment, accounting and bookkeeping services, and necessary executive, clerical and secretarial personnel for the performance of the foregoing services. 37 MassMutual Corporate Investors NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 Under the Investment Services Contract, the Trust pays Babson a quarterly base rate (the "Base Fee Rate") of 5/16 of 1% of the value of the Trust's net assets as of the end of each fiscal quarter, approximately equivalent to 1.25% of the net asset value of the Trust on an annual basis, plus or minus a quarterly performance adjustment (the "Performance Adjustment") of up to 1/16 of 1% approximately equivalent to .25% on an annual basis. The Performance Adjustment is based on the Trust's performance as compared to a benchmark rate of return (the "Target Rate") equal to 5.0 percentage points plus an unweighted, arithmetic average of the rates of return on the Standard & Poor's Industrials Composite (formerly called the Standard & Poor's Industrial Price Index) and the Lehman Brothers Intermediate U.S. Credit Index (formerly called the Lehman Brothers Intermediate Corporate Bond Index) over a rolling three-year period (the "Measurement Period") comprising the twelve quarters ending on the last day of each quarter (the "Valuation Date"). The Standard & Poor's Industrials Composite is not readily available to the general public. FactSet Research Systems provides Babson Capital with the information for this index. The 3-year annualized return for the Standard & Poor's Industrials Composite for the period ending December 31, 2004 was 2.66%. The Performance Adjustment is equal to 5% of the difference between the Trust's actual rate of return over the Measurement Period and the Target Rate. If the Trust's actual rate of return exceeds the Target Rate, the Base Fee Rate is increased by an amount equal to the Performance Adjustment; if the Trust's actual rate of return is less than the Target Rate, the Base Fee Rate is reduced by the Performance Adjustment. The advisory fee payable by the Trust under the Contract is equal to the Base Fee Rate (as adjusted by the Performance Adjustment) times the net asset value of the Trust as of the Valuation Date. The Performance Adjustment for the quarters ended March 31, June 30, September 30 and December 31, 2004 was: PERFORMANCE ADJUSTMENT AMOUNT - -------------------------------------------------------------------------------- March 31, 2004 0.0625% $127,113 June 30, 2004 0.0625% $130,956 September 30, 2004 0.0625% $117,766* December 31, 2004 0.0625% $120,020* * Net of waiver of $15,565 and $16,426, respectively. See first paragraph of Note 8. 4. SENIOR SECURED INDEBTEDNESS A. NOTE PAYABLE MassMutual holds the Trust's $20,000,000 Senior Fixed Rate Convertible Note (the "Note") issued by the Trust in 1995. The Note, as amended, is due November 15, 2007 and accrues at 7.39% per annum. MassMutual, at its option, can convert the principal amount of the Note into common shares. The dollar amount of principal would be converted into an equivalent dollar amount of common shares based upon the average price of the common shares for ten business days prior to the notice of conversion. For the year ended December 31, 2004, the Trust incurred total interest expense on the Note of $1,478,000. The Trust may redeem the Note, in whole or in part, at the principal amount proposed to be redeemed together with the accrued and unpaid interest thereon through the redemption date plus the Make Whole Premium. The Make Whole Premium equals the excess of (i) the present value of the scheduled payments of principal and interest which the Trust would have paid but for the proposed redemption, discounted at the rate of interest of U.S. Treasury obligations whose maturity approximates that of the Note plus 0.50% over (ii) the principal of the Notes proposed to be redeemed. B. REVOLVING CREDIT AGREEMENT The Trust entered into a Revolving Credit Agreement with Fleet National Bank as of June 29, 2000, in the principal amount of $25,000,000, maturing on May 31, 2005. The interest rate on the outstanding revolving loan is determined for periods of one, three or six months (as selected by the Trust) and is set at an annual rate equal to LIBOR (London Interbank Offered Rate) plus 0.37%. The Trust also agreed to pay an upfront fee equal to 0.10% on the total commitment. The facility fee is 0.15% per annum of the total commitment. As of December 31, 2004, there was $9,000,000 in outstanding loans against the Revolver and the average blended rate of interest attributable to the Revolver was 2.02%. For the year ended December 31, 2004, the Trust incurred total interest expense on the Revolver of $79,436, plus $37,603 related to the undrawn portion. 5. PURCHASES AND SALES OF INVESTMENTS FOR THE TWELVE MONTHS COST OF INVESTMENTS ENDED 12/31/2004 ACQUIRED - -------------------------------------------------------------------------------- Corporate restricted securities $104,089,875 Corporate public securities 28,508,546 Short-term securities 624,074,026 PROCEEDS FROM SALES OR MATURITIES - -------------------------------------------------------------------------------- Corporate restricted securities $ 98,241,087 Corporate public securities 17,629,270 Short-term securities 628,202,921 The net unrealized appreciation of investments for federal tax purposes as of December 31, 2004 is $939,634 and consists of $24,309,221 appreciation and $23,369,587 depreciation. 6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED) AMOUNT PER SHARE - ------------------------------------------------------------------------- MARCH 31, 2004 - ------------------------------------------------------------------------- Investment income $ 5,045,227 Net investment income 3,764,100 $ 0.42 Net realized and unrealized gain on investments 4,232,404 0.47 38 MassMutual Corporate Investors NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2004 AMOUNT PER SHARE - ------------------------------------------------------------------------- June 30, 2004 - ------------------------------------------------------------------------- Investment income $ 6,600,662 Net investment income 5,279,982 $ 0.59 Net realized and unrealized gain on investments 4,035,224 0.45 - ------------------------------------------------------------------------- September 30, 2004 - ------------------------------------------------------------------------- Investment income 6,114,817 Net investment income 4,820,764 0.54 Net realized and unrealized loss on investments 4,213,401 0.47 - ------------------------------------------------------------------------- December 31, 2004 - ------------------------------------------------------------------------- Investment income 5,778,088 Net investment income 4,084,501 0.45 Net realized and unrealized loss on investments 11,185,913 1.25 7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED PERSONS During 2004, the Trust paid its Trustees aggregate remuneration of $146,286. The Trust does not pay any compensation to any of its Trustees who are "interested persons" (as defined by the Investment Company Act of 1940, as amended [the "40 Act"]) of the Trust. Accordingly, the Trust classifies Messers. Reese and Joyal as "interested persons" of the Trust. All of the Trust's officers are employees of Babson Capital or MassMutual. Pursuant to the Investment Services Contract, the Trust does not compensate its officers who are employees of Babson Capital or MassMutual. MassMutual and Babson Capital are "affiliated persons" (as defined by the 40 Act) of Mr. Reese, one of the Trust's Trustees. The Trust did not make any payments to Babson Capital during 2004, other than amounts payable to Babson Capital pursuant to the Investment Services Contract. During 2004, the Trust paid the following amounts to MassMutual, exclusive of interest expense on the Note explained in Footnote 4A: Preparation of the Trust's Quarterly and Annual Reports to Shareholders $12,427 Preparation of the Certain of the Trust's Shareholder communications 1,560 Preparation of the Trust's Annual Proxy Statements 1,167 - -------------------------------------------------------------- $15,154 - -------------------------------------------------------------- 8. CONTINGENCIES In connection with an industry-wide sweep examination of investment company performance fees that was initiated in May of 2004, the staff of the Securities and Exchange Commission ("Staff") has questioned whether the Trust's investment advisory fee fully complies with Section 205 of the Investment Advisers Act of 1940 and SEC regulations concerning performance fees. Retroactive adjustment to the calculation methodology for the period since July 1, 1988 (the period during which the Performance Adjustment has been in effect) using the methodology identified by the Staff would result in a reduction in aggregate investment advisory fees for that period. Babson and the Trust are cooperating with the Staff's review of this matter. Babson has estimated that the net reduction in aggregate investment advisory fees for the period beginning July 1, 1988 and ending June 30, 2004 would be $176,223, which represents less than 1% of the aggregate fees over that time period. Babson has voluntarily reduced its investment advisory fee by this amount for the quarter ended December 31, 2004. Pending resolution of the issue Babson has also voluntarily agreed to waive, for each quarter beginning July 1, 2004, the amount, if any, by which (A) the investment advisory fee calculated in the manner described in the Investment Services Contract exceeds (B) the sum of (i) 5/16 of 1% times the ending net asset value for that quarter plus or minus (ii) the Performance Adjustment applied against the average quarter end net assets for the Trust for the twelve-quarter period ending on such quarter. Babson believes that the likelihood that this matter will have a material adverse financial impact on the Trust or negatively impact Babson's ability to provide investment services to the Trust is remote. The Trust, together with other investors including MassMutual, is a plaintiff in litigation connected in connection with private placement investments made by the Trust in Sharp International Corporation ("Sharp"). Three managing shareholders of Sharp, which is currently being liquidated in Chapter 11 liquidation proceedings, have pleaded guilty to criminal fraud charges. Two separate civil lawsuits were brought in New York state court in an attempt to recover damages for lost investment funds from Sharp's working capital lender and auditors. The first lawsuit involving Sharp's working capital lender was dismissed prior to trial. An appeal of this dismissal was unsuccessful. The second lawsuit against Sharp's auditors is continuing. The parties to this lawsuit, including the Trust, have submitted the matters which are the subject of the lawsuit to a non-binding mediation proceedings. The mediation proceedings were unsuccessful. The trial for this lawsuit is scheduled to begin in April, 2005. The Trust is unable to estimate any potential recovery from this lawsuit as of December 31, 2004. 9. CERTIFICATIONS As required under New York Stock Exchange ("NYSE") Corporate Governance Rules, the Trust's principal executive officer has certi- fied to the NYSE that he was not aware, as of the certification date, of any violation by the Trust of the NYSE's Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Trust's principal executive and principal financial officers have made quarterly certifications, included in filings with the Securities and Exchange Commission on Forms N-CSR and N-Q, relating to, among other things, the fund's disclosure controls and procedures and internal control over financial reporting, as applicable. 39 MassMutual Corporate Investors INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Stuart H. Reese* (49) Trustee 3 years/ Executive Vice President 41 Trustee, Chairman (since Massachusetts Mutual 1 year, and Chief Investment 1999) and President Life Insurance Company Chairman 10 months Officer (since 1999) of (1993-1999) of the Trust; 1295 State Street (since 1999) MassMutual; Chairman Director (since 1995), Springfield, MA 01111 1 year/ and CEO (since 2000), MassMutual Corporate 7 months Director (2000-2004), Value Partners Limited Member of the Board of (investment company); Managers (since 2004), and President (1994-1999), President (2000-2001 and Chairman and Trustee 2003-2005) of Babson; (since 1999), MassMutual Chief Executive Director Select Funds, formerly (1997-1999), Senior Vice MassMutual Institutional President (1993-1997) of Funds (an open-end MassMutual. investment company advised by MassMutual); President (1993-1999), Chairman and Trustee (since 1999), MML Series Investment Fund (an open-end investment company advised by MassMutual); Advisory Board Member (since 1995), Kirtland Capital Partners (investment partnership); Advisory Board Member (since 1996), MassMutual High Yield Partners II LLC (investment company) Chairman (since 1999) and Director (since 1996), Antares Capital Corporation (bank loan syndication); Director (since 1996), Charter Oak Capital Management, Inc.; President (since 1998), MassMutual/Darby CBO LLC (investment company); Director (since 1999), MLDP Holdings; Chairman (since 2000), Cornerstone Real Estate Advisers Inc.; Trustee (since 1998), Presi (1998-2001) and Chairman (since 2001), MMCI Subsidiary Trust and MMPI Subsidiary Trust; Trustee, Chairman (since 1999), and President (1993-1999), MassMutu Participation Investors (closed-end invest company advised by Babson).
*Mr. Reese is an "interested person" of the Trust (as defined in the Investment Company Act of 1940, amended) because of his position as an Officer of the Trust, an Executive Officer of MassMutual and Chairman, Member of the Board of Managers and CEO of Babson. 40 MassMutual Corporate Investors INTERESTED TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Robert E. Joyal** (60) Trustee 3 years/ President (2001-2003), 41 President (1999-2003) and MassMutual (since 2003) 10 months Managing Director Trustee (since 2003) of Corporate Investors (2000-2001) and Executive the Trust; Director 1500 Main Street Director (1999-2000) of (since 1996), Antares Suite 600 Babson; Executive Director Capital Corporation (bank Springfield, MA 01115 (1997-1999) of MassMutual. loan syndication); Director (since 2003), Pemco Aviation Group, Inc.; Trustee (since 2003), MML Series Investment Fund (an openend investment company advised by MassMutual); Trustee (since 2003), MassMutual Select Funds, formerly MassMutual Institutional Funds (an open-end investment company advised by MassMutual); Trustee (1998-2003), Senior Vice President (1998-2001) and President (2001-2003), MMCI Subsidiary Trust and MMPI Subsidiary Trust; President (1999-2003), Trustee (since 2003), MassMutual Participation Investors (closed-end investment company advised by Babson).
**Mr. Joyal retired as President of Babson in June 2003. He continues to serve as a director or trustee of several entities affiliated with MassMutual, Babson's indirect parent company. Accordingly, the Trust classifies Mr. Joyal as an "interested person" of the Trust and Babson (as defined in the Investment Company Act of 1940, amended). 41 MassMutual Corporate Investors INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Donald E. Benson (74) Trustee 3 years/ Executive Vice President 2 Director (since 1997), MassMutual (since 1986) 10 months and Director (since 1992), MAIR Holdings, Inc. Corporate Investors Marquette Financial (commuter airline holding 1500 Main Street Companies (financial company); Director (since Suite 600 services); Partner (since 1997), National Springfield, MA 01115 1996), Benson Family Mercantile Bancorp (bank Limited Partnership holding company) and No. 1 and Benson Family Mercantile National Bank; Limited Partnership No. 2 Trustee (since 1988), (investment partnerships); MassMutual Participation Partner (1987-2004), Investors (closed-end Benson, Pinckney, Oates investment company Partnership (building advised by Babson). partnership). - ------------------------------------------------------------------------------------------------------------------------------------ Donald Glickman (71) Trustee 3 years/ Chairman (since 1992), 2 Director (1988-2000), MassMutual (since 1992) 10 months Donald Glickman and CalTex Industries, Inc. Corporate Investors Company, Inc. (investment (manufacturer of 1500 Main Street banking); Partner (since windows); Director (since Suite 600 1992), J.F. Lehman & Co. 1984), Monro Muffler Springfield, MA 01115 (private investments). Brake, Inc. (automobile repair service); Director (since 1998), MSC Software, Inc.; Chairman (1998-2003), Elgar Electronics (manufacturer of electronic power supplies); Director (since 2002), Racal Instrument Group (manufacturer of electronic test equipment); Director (2002-2004), OAOT, Inc. (ITC Services); Director (since 1999) SDI, Inc. (manufacturer of airbag initiations); Trustee (since 1992), MassMutual Participation Investors (closed-end investment company advised by Babson).
42 MassMutual Corporate Investors INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Martin T. Hart (69) Trustee 3 years/ Private Investor; President 2 Director (since 2004), MassMutual (since 1991) 1 year, and Director (since 1983), Texas Roadhouse, Inc.; Corporate Investors 10 months H Corporation. Director (since 1999), 1500 Main Street ValueClick Inc. (internet Suite 600 advertising company); Springfield, MA 01115 Director (since 2002), Spectranetics Corp. (medical device company); Trustee (since 1991), MassMutual Participation Investors (closed-end investment company advised by Babson). - ------------------------------------------------------------------------------------------------------------------------------------ Steven A. Kandarian (52) Trustee 3 years/ Consultant, financial 22 Trustee (since 2002), MassMutual (since 2002) 2 years, services (since 2004); MassMutual Premier Funds, Corporate Investors 10 months Executive Director (2001- formerly The DLB Fund 1500 Main Street 2004); Pension Benefit Group (an open-end Suite 600 Guaranty Corp., (a Federal investment company Springfield, MA 01115 pension agency); Managing advised by MassMutual); Director (1993-2001), Trustee (since 2002), Orion Partners, L.P. MassMutual Participation (a private equity fund). Investors (a closed-end investment company advised by Babson).
43 MassMutual Corporate Investors INDEPENDENT TRUSTEES
PRINCIPAL PORTFOLIOS POSITION OCCUPATION(S) OVERSEEN OTHER NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST IN FUND DIRECTORSHIPS ADDRESS THE TRUST OF TIME SERVED 5 YEARS COMPLEX HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ Jack A. Laughery (70) Trustee 3 years/ President and Partner 2 Director (since 1993), MassMutual (since 1996) 2 years, (since 1996), Laughery Papa John's International Corporate Investors 10 months Investments. (food service companies); 1500 Main Street Director (since 1994), Suite 600 Houston Pizza Venture LLC Springfield, MA 01115 (pizza restaurant); Part Owner (1998-2004), Rocky Mount Harley Davidson; Partner (since 1996), Papa John's Iowa; Director (since 2001), Papa John's United (food service); Director (1997-1998), PJ New England; Trustee (since 1996), MassMutual Participation Investors (closed-end investment company advised by Babson). - ------------------------------------------------------------------------------------------------------------------------------------ Corine T. Norgaard (67) Trustee 3 years/ President (since 2004), 22 Trustee (since 2004), MassMutual (since 1998) 2 years, Thompson Enterprises Real MassMutual Premier Funds, Corporate Investors 10 months Estate Investment; Dean formerly The DLB Fund 1500 Main Street (1996-2004), Barney School Group (an open-end Suite 600 of Business, University of investment company Springfield, MA 01115 Hartford. advised by MassMutual); Director (1997-2004), The Advest Bank; Director (since 2004), Frontier Trust Company, FSB (Federal Savings Bank); Trustee (since 1993), ING Series Funds (investment company); Director (since 1992), ING Variable Series Funds; Trustee (since 1998), MassMutual Participation Investors (a closed-end investment company advised by Babson).
44 MassMutual Corporate Investors OFFICERS OF THE TRUST
PRINCIPAL POSITION OCCUPATION(S) NAME (AGE), WITH OFFICE TERM/LENGTH DURING PAST ADDRESS THE TRUST OF TIME SERVED 5 YEARS - ------------------------------------------------------------------------------------------------------------------------------------ Roger W. Crandall (40) President 1 year/ President (since 2003) and Vice President (2002-2003) of the Trust; MassMutual 7 months Vice Chairman (since 2005), Director (2003-2004), Member of Board of Corporate Investors Managers (since 2004), and Managing Director (since 2000) of Babson; 1500 Main Street, Suite 600 Managing Director (1993-2000) of MassMutual; Trustee and President Springfield, MA 01115 (since 2003), MMCI Subsidiary Trust and MMPI Subsidiary Trust; President (since 2003), Vice President (2002-2003), MassMutual Participation Investors. - ------------------------------------------------------------------------------------------------------------------------------------ Clifford M. Noreen (47) Vice 1 year/ Vice President (since 1993) of the Trust; Managing Director (since MassMutual President 7 months 2000) of Babson; Managing Director (1996-1999) of MassMutual; Vice Corporate Investors President (since 1993), MassMutual Participation Investors. 1500 Main Street, Suite 600 Springfield, MA 01115 - ------------------------------------------------------------------------------------------------------------------------------------ Stephen L. Kuhn (58) Vice 1 year/ Vice President (since 1989) and Secretary (since 1980) of the Trust; MassMutual President 7 months General Counsel and Clerk (since 2000) of Babson; Senior Vice Corporate Investors and President (since 1999), Deputy General Counsel (since 1998), and 1500 Main Street, Suite 600 Secretary Assistant Secretary (since 1996) of MassMutual; Secretary (since Springfield, MA 01115 1998), MMCI Subsidiary Trust and MMPI Subsidiary Trust; Vice President and Secretary (since 1988) of MassMutual Participation Investors. - ------------------------------------------------------------------------------------------------------------------------------------ Charles C. McCobb, Jr. (61) Vice 1 year/ Chief Financial Officer (since 1998) and Vice President (since 1997) MassMutual President 7 months of the Trust; Managing Director (since 2000) of Babson; Managing Corporate Investors and Chief Director (1997- 1999) of MassMutual; Trustee, Vice President, 1500 Main Street, Suite 600 Financial Treasurer and Chief Financial Officer (since 1998), MMCI Subsidiary Springfield, MA 01115 Officer Trust and MMPI Subsidiary Trust; Chief Financial Officer (since 1998) and Vice-President (since 1997), MassMutual Participation Investors. - ------------------------------------------------------------------------------------------------------------------------------------ John T. Davitt, Jr. (37) Comptroller 1 year/ Comptroller (since 2001) of the Trust, Director (since 2000) of MassMutual 7 months Babson; Associate Director (1997-1999) of MassMutual; Corporate Investors Comptroller (since 2001) of MassMutual Participation Investors. 1500 Main Street, Suite 600 Springfield, MA 01115 - ------------------------------------------------------------------------------------------------------------------------------------ James M. Roy (42) Treasurer 1 year/ Treasurer (since 2003) and Associate Treasurer (1999-2003) of MassMutual 7 months the Trust; Director (since 2000) of Babson; Associate Director Corporate Investors (1996-1999) of MassMutual; Controller (since 2003), MMCI 1500 Main Street, Suite 600 Subsidiary Trust and MMPI Subsidiary Trust; Treasurer (since Springfield, MA 01115 2003), Associate Treasurer (1999-2003), MassMutual Participation Investors. - ------------------------------------------------------------------------------------------------------------------------------------ Mary Ellen Wesneski (54) Chief 1 year/ Chief Compliance Officer (since 2004) of the Trust, Managing MassMutual Compliance 7 months Director (since 1999) of Babson, Chief Compliance Officer (since Corporate Investors Officer 2004) of MassMutual Participation Investors. 1500 Main Street, Suite 600 Springfield, MA 01115
45 MassMutual Corporate Investors REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Shareholders and Board of Trustees of MassMutual Corporate Investors We have audited the accompanying statement of assets and liabilities of MassMutual Corporate Investors (the "Trust"), including the schedule of investments, as of December 31, 2004, and the related statements of operations and cash flows, 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 Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit. The statement of changes in net assets for the year ended December 31, 2003 and financial highlights for each of the years in the fouryear period ended December 31, 2003 were audited by the Trust's previous auditors whose report, dated February 6, 2004, expressed an unqualified opinion on that financial statement and those financial highlights. We conducted our audit 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included verification of securities owned as of December 31, 2004 by counting of securities at the custodian and confirmation of securities owned as of December 31, 2004, by correspondence with the custodian and brokers, or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and signifi- cant 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, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of MassMutual Corporate Investors as of December 31, 2004, and the results of its operations, its cash flows, the changes in its net assets, and the financial highlights for the year then ended in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP February 7, 2005 46 MassMutual Corporate Investors [PHOTO APPEARS HERE] Members of the Board of Trustees Donald Glickman Chairman, Donald Glickman & Company, Inc. Robert E. Joyal Retired President of Babson Capital Management LLC Jack A. Laughery President and Partner, Laughery Investments Steven A. Kandarian Consultant, financial services Donald E. Benson* Executive Vice President and Director, Marquette Financial Companies Corine T. Norgaard* President, Thompson Enterprises Real Estate Investment Stuart H. Reese Executive Vice President and Chief Investment Officer, Massachusetts Mutual Life Insurance Company Martin T. Hart* Private Investor *Member of the Audit Committee DIVIDEND REINVESTMENT AND SHARE PURCHASE PLAN MassMutual Corporate Investors offers a Dividend Reinvestment and Share Purchase Plan. The Plan provides a simple way for shareholders to add to their holdings in the Trust through the receipt of dividend shares issued by the Trust or through the reinvestment of cash dividends in Trust shares purchased in the open market. Ashareholder may join the Plan by filling out and mailing an authorization card to Shareholder Financial Services, Inc., the Transfer Agent. Participating shareholders will continue to participate until they notify the Transfer Agent, in writing, of their desire to terminate participation. Unless a shareholder elects to participate in the Plan, he or she will, in effect, have elected to receive dividends and distributions in cash. Participating shareholders may also make additional contributions to the Plan from their own funds. Such contributions may be made by personal check or other means in an amount not less than $10 nor more than $5,000 per quarter. Whenever the Trust declares a dividend payable in cash or shares, the Transfer Agent, acting on behalf of each participating shareholder, will take the dividend in shares only if the net asset value is lower than the market price plus an estimated brokerage commission as of the close of business on the valuation day. The valuation day is the last day preceding the day of dividend payment. When the dividend is to be taken in shares, the number of shares to be received is determined by dividing the cash dividend by the net asset value as of the close of business on the valuation date or, if greater than net asset value, 95% of the closing share price. If the net asset value of the shares is higher than the market value plus an estimated commission, the Transfer Agent, consistent with obtaining the best price and execution, will buy shares on the open market at current prices promptly after the dividend payment date. The reinvestment of dividends does not, in any way, relieve participating shareholders of any federal, state or local tax. For federal income tax purposes, the amount reportable in respect of a dividend received in newly-issued shares of the Trust will be the fair market value of the shares received, which will be reportable as ordinary income and/or capital gains. As compensation for its services, the Transfer Agent receives a fee of 5% of any dividend and cash contribution (in no event in excess of $2.50 per distribution per shareholder.) Any questions regarding the Plan should be addressed to Shareholder Financial Services, Inc., Agent for MassMutual Corporate Investors' Dividend Reinvestment and Share Purchase Plan, P.O. Box 173673, Denver, CO 80217-3673. OFFICERS Stuart H. Reese Chairman Roger W. Crandall President Charles C. McCobb, Jr. Vice President & Chief Financial Officer Stephen L. Kuhn Vice President & Secretary Michael P. Hermsen Vice President Mary Wilson Kibbe Vice President Michael L. Klofas Vice President Clifford M. Noreen Vice President Richard E. Spencer, II Vice President James M. Roy Treasurer John T. Davitt, Jr. Comptroller Mary Ellen Wesneski Chief Compliance Officer [LOGO] MassMutual Corporate Investors DB1035 205 ITEM 2. CODE OF ETHICS. The Registrant adopted a Code of Ethics for Senior Financial Officers (the "Code") on October 17, 2003, which is available on the Registrant's website at www.babsoncapital.com/mci. During the period covered by this Form N-CSR, there were no amendments to, or waivers from, the Code. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Registrant's Board of Trustees has determined that Mr. Donald E. Benson, a Trustee of the Registrant and a member of its Audit Committee, is an audit committee financial expert. Mr. Benson is "independent" for purposes of this Item 3 as required by applicable regulation. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. FEES BILLED TO THE REGISTRANT KPMG LLP Deloitte & Touche LLP* Year Ended Year Ended December 31, December 31, 2004 2003 ---------- ---------- Audit Fees $ 32,500 $ 60,500 Audit-Related Fees 5,000 5,500 Tax Fees 8,500 7,400 All Other Fees 0 0 ---------- ---------- Total Fees $ 46,000 $ 73,400 ========== ========== NON-AUDIT FEES BILLED TO BABSON AND MASSMUTUAL KPMG LLP Deloitte & Touche LLP* Year Ended Year Ended December 31, December 31, 2004 2003 ---------- ---------- Audit-Related Fees $ 406,900 $ 340,000 Tax Fees 35,138 35,100 All Other Fees 400,000 5,000 ---------- ---------- Total Fees $ 842,038 $ 380,100 ========== ========== *Deloitte & Touche LLP ("D&T") was the Registrant's independent auditors for the 2003 fiscal year audit. KPMG LLP ("KPMG") was the Registrant's independent auditors for the 2004 fiscal year audit. The category "Audit Related Fees" reflects fees billed by KPMG or D&T for services related to the audit and other assurance services performed in connection with the audit engagements of the Registrant, Babson Capital Management LLC ("Babson") and Massachusetts Mutual Life Insurance Company ("MassMutual"). Preparation of Federal, state and local income tax and compliance work are representative of the fees billed in the "Tax Fees" category. The category "All Other Fees" represents fees billed by KPMG or D&T for various non-audit and non-tax services rendered to Babson and MassMutual, such as SAS 70 review, agreed upon procedures reports, and tax consulting. The Sarbanes-Oxley Act of 2002 and its implementing regulations allows the Registrant's Audit Committee to establish a pre-approval policy for certain services rendered by the Registrant's independent accountants. During 2004, the Registrant's Audit Committee approved all of the services rendered to the Registrant by KPMG and did not rely on such a pre-approval policy for any such services. The Audit Committee reviewed the aggregate fees billed for professional services rendered by KPMG for the Registrant and for the non-audit services provided to Babson, and Babson's parent, MassMutual. As part of this review, the Audit Committee considered whether the provision of such non-audit services were compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The Registrant maintains an Audit Committee composed exclusively of Trustees of the Registrant who qualify as "independent" Trustees under the current listing standards of the New York Stock Exchange and the rules of U.S. Securities and Exchange Commission. The Committee operates pursuant to a written Audit Committee Charter, which is available (1) on the Registrant's website, www.babsoncapital.com/mpv; and (2) without charge, upon request, by calling, toll-free 866-399-1516. The current members of the Audit Committee are Donald E. Benson, Martin T. Hart, and Corine T. Norgaard. ITEM 6. SCHEDULE OF INVESTMENTS Not applicable for this filing. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES. The Registrant's Board of Trustees has delegated proxy voting responsibilities relating to voting securities held by the Registrant to its investment adviser, Babson Capital Management LLC ("Babson"). A summary of Babson's proxy voting policies and procedures is set forth below. Summary of Babson's Proxy Voting Policy --------------------------------------- Babson views the voting of proxies as an integral part of its investment management responsibility and believes, as a general principle, that proxies should be voted solely in the best interests of its clients (i.e. prudently and in a manner believed by Babson to best protect and enhance an investor's returns). To implement this general principle, it is Babson's policy to generally vote proxies in accordance with the recommendations of Institutional Shareholder Services ("ISS"), a recognized authority on proxy voting and corporate governance, or, in cases where ISS has not made any recommendations with respect to a proxy, in accordance with ISS's proxy voting guidelines. Babson recognizes, however, that there may be times when Babson believes that it will be in the best interests of clients holding the securities to (1) vote against ISS's recommendations or (2) in cases where ISS has not provided Babson with any recommendations with respect to a proxy, vote against ISS's proxy voting guidelines. Babson may vote, in whole or part, against ISS's recommendations or ISS's proxy voting guidelines, as applicable, if such vote is authorized by the Policy. The procedures set forth in the Policy are designed to ensure that votes against ISS's recommendations or proxy voting guidelines have been made in the best interests of clients and are not the result of any material conflict of interest (a "Material Conflict"). Summary of Babson's Proxy Voting Procedures ------------------------------------------- Babson has (1) established a Proxy Committee that is responsible for the implementation and governance of the Policy and (2) designated Proxy Administrators who will receive and post proxies for voting with ISS. In accordance with the Policy, Babson will generally vote all client proxies in accordance with ISS's recommendation or proxy voting guidelines, unless a person authorized by the Proxy Committee (each a "Proxy Analyst") determines that it is in its clients' best interest to vote against ISS's recommendation or proxy voting guidelines. In these cases, Babson will vote against ISS's recommendation or proxy voting guidelines, so long as no other Proxy Analyst reviewing such proxy disagrees with such recommendation, and no known Material Conflict is identified by the Proxy Analyst(s) or the Proxy Administrator. Otherwise, the proxy is to be submitted to a member of the Proxy Committee, who shall determine how to vote the proxy unless (i) the Proxy Administrator has identified a Babson Material Conflict or (ii) said Proxy Committee member has identified a Material Conflict. In such cases, the proxy shall be submitted to the Proxy Committee, which may authorize a vote against ISS's recommendation or proxy voting guidelines only if the Proxy Committee determines that such vote is in the clients' best interests. No employee, officer or director of Babson or its affiliates (other than those assigned such responsibilities under the Policy) may influence how Babson votes any proxy, unless such person has been requested to provide such assistance by a Portfolio Manager or Proxy Committee member and has disclosed any known Material Conflict. Any pre-vote communications prohibited by the Policy shall be reported to the Proxy Committee member prior to voting and to Babson's General Counsel. Obtaining a Copy of the Policy ------------------------------ The full text of Babson's Policy is available (1) without charge, upon request, by calling 1-866-399-1516 or (2) on the Registrant's website, www.babsoncapital.com/mci. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not Applicable for this filing. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not Applicable for this filing. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Applicable for this filing. ITEM 11. CONTROLS AND PROCEDURES. (a) The principal executive officer and principal financial officer of the Registrant evaluated the effectiveness of the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) as of a date within 90 days of the filing date of this report and based on that evaluation have concluded that such disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by the Registrant on Form N-CSR 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 changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) during the Registrant's second fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) ANY CODE OF ETHICS, OR AMENDMENTS THERETO, THAT IS THE SUBJECT OF DISCLOSURE REQUIRED BY ITEM 2, TO THE EXTENT THAT THE REGISTRANT INTENDS TO SATISFY THE ITEM 2 REQUIREMENTS THROUGH THE FILING OF AN EXHIBIT. None. (a)(2) A SEPARATE CERTIFICATION FOR EACH PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF THE REGISTRANT AS REQUIRED BY RULE 30a-2 UNDER THE ACT. Attached hereto as EX-99.31.1 Attached hereto as EX-99.31.2 (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 for this filing. (b) CERTIFICATIONS PURSUANT TO RULE 30a-2(b) UNDER THE ACT. Attached hereto as EX-99.32 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): MassMutual Corporate Investors ---------------------------------- By: /s/ Roger W. Crandall ---------------------------------- Roger W. Crandall, President ---------------------------------- Date: March 4, 2005 ---------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: /s/ Roger W. Crandall ---------------------------------- Roger W. Crandall, President ---------------------------------- Date: March 4, 2005 ---------------------------------- By: /s/ Charles C. McCobb, Jr. ---------------------------------- Charles C. McCobb, Jr., Vice President, and Chief Financial Officer ---------------------------------- Date: March 4, 2005 ------------------------------ EX-31 2 exh99-311_13300.txt 302 CERTIFICATIONS EXHIBIT-99.31.1 --------------- CERTIFICATION ------------- ITEM 12(a)(2) PRINCIPAL EXECUTIVE OFFICER CERTIFICATION I, Roger W. Crandall, certify that: 1. I have reviewed this report on Form N-CSR of MassMutual Corporate Investors; 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 officers 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 registrant's most recent 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; and 5. The registrant's other certifying officers 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 adversly 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 controls over financial reporting. Date: March 4, 2005 /s/: Roger W. Crandall - -------------------------------- Roger W. Crandall President MassMutual Corporate Investors EXHIBIT-99.31.2 --------------- CERTIFICATION ------------- ITEM 12(a)(2) PRINCIPAL FINANCIAL OFFICER CERTIFICATION I, Charles C. McCobb, Jr., certify that: 1. I have reviewed this report on Form N-CSR of MassMutual Corporate Investors; 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 officers 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 registrant's most recent 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; and 5. The registrant's other certifying officers 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 adversly 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 controls over financial reporting. Date: March 4, 2005 /s/: Charles C. McCobb, Jr. - -------------------------------- Charles C. McCobb, Jr. Vice President and Chief Financial Officer MassMutual Corporate Investors EX-32 3 exh99-32_13300.txt 906 CERTIFICATIONS EXHIBIT-99.32 ------------- ITEM 12(b) To my knowledge, this periodic report containing the financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer. /s/ Roger W. Crandall - -------------------------------- Roger W. Crandall President MassMutual Corporate Investors /s/ Charles C. McCobb, Jr. - -------------------------------- Charles C. McCobb, Jr. Vice President and Chief Financial Officer MassMutual Corporate Investors -----END PRIVACY-ENHANCED MESSAGE-----