11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
ANNUAL REPORTS OF EMPLOYEES STOCK PURCHASE, SAVINGS
AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
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Annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 |
(No Fee Required)
For the Fiscal Year Ended December 31, 2004
OR
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o |
Transition report pursuant to Section 15(d) of the
Securities Exchange Act of 1934 |
(No Fee Required)
For the transition period
from to
Commission file number 1-5842
A. Full title of the plan and the
address of the plan, if different from that of the issuer named
below:
Bowne & Co., Inc.
401(k) Savings Plan
B. Name of issuer of the securities
held pursuant to the plan and the address of its principal
executive office:
BOWNE & CO., INC.
345 Hudson Street
New York, New York 10014
(212) 924-5500
BOWNE & CO., INC.
401(k) SAVINGS PLAN
TABLE OF CONTENTS
Items 1 and 2. Financial Statements
Exhibits
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23 |
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Consent of Independent Registered Public Accounting Firm |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Trustees of the
Bowne & Co., Inc.
401(k)
Savings Plan:
We have audited the accompanying statements of net assets
available for benefits of Bowne & Co., Inc. 401(k)
Savings Plan as of December 31, 2004 and 2003 and the
related statement of changes in net assets available for
benefits for the year ended December 31, 2004. These
financial statements are the responsibility of the Plans
Trustees. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the net assets
available for benefits of Bowne & Co., Inc. 401(k)
Savings Plan at December 31, 2004 and 2003 and the changes
in net assets available for benefits for the year ended
December 31, 2004 in conformity with U.S. generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedule H, Line 4i Schedule of
Assets (Held at End of Year) as of December 31, 2004 is
presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is
supplementary information required by the Department of
Labors Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The
supplemental schedule is the responsibility of the Plans
management. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial
statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as
a whole.
/s/ KPMG LLP
New York, New York
June 8, 2005
F-1
BOWNE & CO., INC.
401(k) SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
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December 31, | |
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2004 | |
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2003 | |
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Assets:
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Investments:
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Investment in marketable securities, at fair value (note 6)
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$ |
209,970,718 |
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$ |
216,766,983 |
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Investment in limited partnership
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31,234 |
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30,682 |
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Loans to participants
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6,500,520 |
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7,170,238 |
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Total investments
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216,502,472 |
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223,967,903 |
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Receivables:
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Employee contributions
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801,289 |
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869,712 |
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Employer contributions
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398,653 |
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434,466 |
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Total receivables
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1,199,942 |
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1,304,178 |
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Total assets
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217,702,414 |
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225,272,081 |
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Liabilities:
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Due to other qualified plan (note 9)
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92,504 |
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Total liabilities
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92,504 |
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Net assets available for benefits
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$ |
217,609,910 |
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$ |
225,272,081 |
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See accompanying notes to financial statements.
F-2
BOWNE & CO., INC.
401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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Year Ended | |
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December 31, | |
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2004 | |
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Investment activity:
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Net appreciation in market value of investments (note 6)
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$ |
16,625,532 |
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Interest
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5,608,512 |
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Dividends
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290,696 |
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22,524,740 |
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Interest income on participant loans
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418,681 |
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Total investment income
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22,943,421 |
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Contributions:
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Employees
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14,443,409 |
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Employers
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7,001,893 |
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Rollovers
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1,157,471 |
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Total contributions
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22,602,773 |
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Total additions
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45,546,194 |
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Deductions:
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Benefits paid to participants
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23,519,527 |
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Administrative expenses
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296,468 |
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Total deductions
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23,815,995 |
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Net increase before assets transfers
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21,730,199 |
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Asset transfers to other qualified plan (note 9)
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(29,392,370 |
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Net decrease
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(7,662,171 |
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Net assets available for benefits:
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Beginning of period
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225,272,081 |
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End of period
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$ |
217,609,910 |
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See accompanying notes to financial statements.
F-3
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004 and 2003
(1) Description of the Plan
The following brief description of the Bowne & Co.,
Inc. (the Company) 401(k) Savings Plan (the Plan), provides only
general information. Participants should refer to the Plan
agreement for a more complete description of the Plans
provisions.
(a) General
The Plan is a defined contribution plan established
November 1, 1961 covering eligible employees of
participating companies of the Company. It is subject to the
provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Effective December 31, 2003, the Company merged the
Bowne & Co., Inc. Employee Stock Purchase Plan (the
ESPP) into this Plan. All of the ESPP plan assets and
participant account balances were transferred to the Plan on
December 31, 2003.
At December 31, 2004 the participating companies in the
Plan were as follows:
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BGS Companies, Inc.
Bowne & Co., Inc.
Bowne Business Communications, Inc.
Bowne DecisionQuest, Inc.
Bowne Digital Solutions L.L.C.
Bowne Global Solutions, Inc.
Bowne Global Solutions II, Inc.
Bowne Information Services, Inc.
Bowne International, L.L.C.
Bowne of Atlanta, Inc.
Bowne of Boston, Inc. |
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Bowne of Chicago, Inc.
Bowne of Cleveland, Inc.
Bowne of Dallas, L.P.
Bowne of Los Angeles, Inc.
Bowne of New York City, L.L.C.
Bowne of Phoenix, Inc.
Bowne of South Bend, Inc.
Bowne Publishing, L.L.C.
Bowne Translation Services, L.L.C.
FundSmith, L.L.C. |
(b) Eligibility
The Plan covers all full-time employees of the participating
companies. Effective January 1, 2004, the Plan was amended
to include full-time employees of the participating companies
that are covered by collective bargaining agreements, subject to
certain provisions. Prior to January 2004, the Plan covered only
full-time employees of the participating companies who were not
covered by collective bargaining agreements. Employees are
eligible to participate as of the first day of employment.
(c) Contributions
Participants are able to direct the Company to deposit
contributions withheld through automatic payroll deductions,
subject to certain limitations of up to 50% of annual
compensation on a pre-tax basis and up to 15% of annual
compensation on an after-tax basis (up to 10% on an after-tax
basis for highly compensated employees). For calendar years
ended December 31, 2004 and 2003, no participant was
permitted to make pre-tax contributions to the Plan in excess of
$13,000 and $12,000, respectively, (annually adjusted as
provided by the Plan and the Internal Revenue Code (the Code)).
The Company matches 100% of the first 3% of the
participants compensation plus 50% of the next 2% of
compensation after one year of eligible service. Annual
discretionary profit-sharing contributions are determined by the
Board of Directors of each participating companys business
segment, based on company
F-4
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
performance, and cannot exceed the maximum amounts allowable
under the Code. There were no discretionary contributions for
the years ended December 31, 2004 and 2003.
A participant not covered by a collective bargaining agreement
may make a rollover contribution to the Plan of amounts which he
or she has received from another qualified plan.
(d) Vesting
Participants are fully vested at all times in their contribution
account, rollover account, and any investment earnings related
to those accounts, if applicable. The Plan provides cliff
vesting in which participants become fully vested in the
Companys discretionary profit-sharing contributions after
five years of credited service. Additionally, regardless of
years of credited service, participants automatically become
vested in company profit-sharing contributions upon the
occurrence of the following events: reaching normal retirement
age, plan termination, death, or permanent and total disability.
Participants were 100% vested for employer matching
contributions if they were employed by the Company as of
December 31, 2002. All employees hired after
January 1, 2003 must complete one year of service to be
eligible for the match, and are 100% vested in the matching
contributions.
Effective January 1, 2004, a participant not covered by a
collective bargaining agreement that transferred amounts to the
Plan from the ESPP is 100% vested in the value of his/her
previous ESPP matching contributions and employer matching
contributions made on or after January 1, 2004.
Effective February 1, 2004, a participant covered by a
collective bargaining agreement that transferred amounts to the
Plan from the ESPP is 100% vested in the value of his/her
previous ESPP matching contributions and employer matching
contributions made on or after February 1, 2004.
(e) Participants
Accounts
Separate accounts are maintained for each participant and are
credited with the participants elective contributions,
company contributions, and plan earnings on both employer and
employee contributions to the various investment funds. At
December 31, 2004, participants can elect to have their
accounts in one or more of the following funds:
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Bowne & Co. Inc. Stock Fund invests in
common stock of the Company (effective January 1, 2003); |
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Davis New York Venture Fund, Inc. Class A
invests in common stocks of companies with market capitalization
of at least $250 million; |
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Fidelity Magellan Fund invests mainly in the common
stocks of domestic, foreign, and international companies; |
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Morgan Stanley Global/ Equity Class B invests
primarily in equity securities of issuers throughout the world; |
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T. Rowe Price Small-Cap Stock Fund invests at
least 65% of total assets in stocks and equity related
securities of small companies included in the Russell 2000 Index; |
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Vanguard 500 Index Fund invests in all stocks
included in the Standard and Poors 500 Composite Stock
Price Index; |
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Vanguard Prime Money Market Fund invests in
short-term securities issued by financial institutions,
nonfinancial corporations, and the U.S. government; |
F-5
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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Vanguard Wellington Fund invests an average of 65%
of its assets in stocks and 35% in bonds; |
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Vanguard International Growth Fund invests in stocks
of high quality, seasoned companies based outside of the U.S.; |
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Vanguard Mid-Cap Index Fund invests in all stocks
included in the Standard and Poors MidCap 400 Index; |
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Vanguard PRIMECAP Fund invests in stocks of
companies of above average growth or companies with bright
prospects for earnings growth. This fund assesses a 1%
redemption fee on shares held for less than five years; |
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Vanguard Short-Term Corporate Fund invests in
short-term bonds, including high quality corporate and
U.S. Treasury securities; |
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Vanguard Total Bond Market Index Fund invests in a
sampling that matches key characteristics of the Lehman Brothers
Aggregate Bond Index, which is aimed at seeking a high level of
interest income. |
Participants not covered by collective bargaining agreements may
change the investment direction of their contributions and
transfer amounts from one fund to another daily (initial
transfers from the ESPP were required to be invested in the
Companys common stock fund.)
Participants covered by collective bargaining agreements can
only invest in the Companys common stock fund.
(f) Participant
Distributions
On termination of service due to death, disability, retirement,
or other reasons, a participant may elect to receive the value
of the participants vested interest in his or her account
in a lump-sum amount.
Effective January 1, 2004, amounts transferred to the Plan
from the ESPP on behalf of participants not covered by a
collective bargaining agreement are able to be withdrawn in
whole or in part, subject to certain Plan provisions.
Effective February 1, 2004, pre-tax contributions to the
plan on behalf of participants covered by collective bargaining
agreements are eligible to be withdrawn prior to termination of
employment subject to certain Plan provisions.
(g) Forfeitures
The nonvested portion of a participants account will be
forfeited upon the participants separation from service
before age 65 for reasons other than death or disability.
In 2004 and 2003 forfeited amounts were used to reduce employer
contributions made during such plan year or succeeding plan
years and to pay the expenses of the Plan. Forfeitures used to
reduce employer contributions totaled $24,616 for the year ended
December 31, 2004. At December 31, 2004, forfeited
nonvested accounts totaled approximately $70,245.
(h) Loans
The Plan provides two types of loans to participants not covered
by collective bargaining agreements: general loans and home
purchase loans. Participants not covered by collective
bargaining agreements are limited to one outstanding loan of
each type at any time. Participants not covered by collective
bargaining agreements may borrow the lesser of 50% of their
vested account balance or $50,000, with an annual interest rate
of prime plus 1% on the outstanding balance. General loans are
subject to a maximum repayment term of
F-6
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
5 years. Home purchase loans may extend the repayment term
to fifteen years. Loan repayment is through payroll deductions.
Amounts transferred to the Plan from the ESPP are not available
to be taken as a loan, however, the amounts are included in
determining the maximum amount available for a loan under the
Plan.
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(2) |
Summary of Significant Accounting Policies |
The accompanying financial statements are prepared on the
accrual basis of accounting.
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, liabilities, and
changes therein, and disclosure of contingent assets and
liabilities. Actual amounts could differ from those estimates.
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(c) |
Investment Valuation and Income Recognition |
The Plans investments are stated at fair value as
determined by quoted market prices. The fair value of the
investment in limited partnership was determined by the
Investment Manager and is based on the value of the underlying
assets. Participant loans are valued at their outstanding
balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on an accrual basis.
Dividends are recorded on the ex-dividend date.
Benefit payments are recorded when paid.
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(e) |
Concentration of Risks and Uncertainties |
The Plan may invest in various types of investment securities.
Investment securities are exposed to various risks, such as
interest rate, market, and credit risks. Due to the level of
risk associated with certain investment securities, it is at
least reasonably possible that changes in the values of
investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the
statement of assets available for plan benefits.
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(3) |
Administrative Expenses |
All investment and administrative expenses of the Plan have been
paid from the assets of the Plan to the extent not paid by the
Company.
Although it has not expressed any intent to do so, the Company
has the right under the Plan to discontinue its contributions at
any time and to terminate the Plan by action of its board of
directors, subject to the provisions of ERISA. In the event of
plan termination, participants will become 100% vested in their
accounts.
F-7
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
The Internal Revenue Service has determined and informed the
Company by a letter dated December 10, 2001 that the Plan
and related trust are designed in accordance with applicable
sections of the Code. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its
qualification. The Plan has been amended since receiving its
last determination letter. However, the Plan administrator and
the Plans tax counsel believe that the Plan is currently
designed and being operated in compliance with the applicable
requirements of the Code. Therefore, they believe that the Plan
was qualified and the related trust was tax-exempt as of the
financial statement date.
Investments held by Vanguard Fiduciary Trust Company are as
follows as of December 31,:
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2004 | |
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2003 | |
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Davis New York Venture Fund, Inc. Class A
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$ |
6,346,248 |
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$ |
4,640,495 |
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Fidelity Magellan Fund
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54,652,068 |
* |
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56,603,076 |
* |
Morgan Stanley Global/ Equity Class B
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2,302,362 |
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1,568,779 |
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T. Rowe Price Small-Cap Stock Fund
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8,840,795 |
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6,172,591 |
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Vanguard 500 Index Fund
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16,980,431 |
* |
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18,681,992 |
* |
Vanguard International Growth Fund
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2,848,904 |
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2,881,519 |
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Vanguard Mid-Cap Index Fund
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4,241,022 |
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1,241,448 |
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Vanguard Prime Money Market Fund
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21,560,658 |
* |
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26,913,251 |
* |
Vanguard PRIMECAP Fund
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12,303,254 |
* |
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10,841,953 |
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Vanguard Short-Term Corporate Fund
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5,916,370 |
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7,088,313 |
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Vanguard Total Bond Market Index Fund
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2,434,956 |
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3,080,813 |
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Vanguard U.S. Growth Fund
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3,354,045 |
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Vanguard Wellington Fund
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52,038,477 |
* |
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54,041,658 |
* |
Bowne & Co., Inc. Stock Fund
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19,505,173 |
* |
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19,657,050 |
* |
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$ |
209,970,718 |
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$ |
216,766,983 |
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* |
Individual investments that represent 5% or more of the
Plans net assets. |
Net appreciation in market value of investments for the year
ended December 31, 2004 was comprised as follows:
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Net appreciation in market value of investments in mutual funds
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$ |
12,889,388 |
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Net appreciation in market value of investments in common stock
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3,735,592 |
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Net appreciation in market value of investment in limited
partnership
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552 |
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Total net appreciation in market value of investments
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$ |
16,625,532 |
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F-8
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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(7) |
Nonparticipant-Directed Investments |
Information about the net assets and the significant components
of the changes in net assets relating to the participants
covered by collective bargaining agreements is as follows:
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December 31, | |
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2004 | |
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2003 | |
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Net Assets:
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Investments:
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Bowne & Co., Inc. Stock Fund
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$ |
1,338,059 |
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$ |
1,096,945 |
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Year Ended | |
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December 31, 2004 | |
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Changes in Net Assets:
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Contributions
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$ |
114,394 |
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Dividends
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17,773 |
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Net appreciation in market value of investments
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226,575 |
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Administrative expenses
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(337 |
) |
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Forfeitures
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(63,522 |
) |
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Benefits paid to participants
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(53,769 |
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$ |
241,114 |
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(8) |
Related Party Transactions |
Certain Plan investments are shares of mutual funds managed by
Vanguard Fiduciary Trust Company, who is the Trustee as defined
by the Plan and, therefore, these transactions qualify as
party-in-interest. The Plan also invests in Bowne &
Co., Inc. common stock.
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(9) |
Assets Transferred to Other Qualified Plan |
In November 2004, the Company sold its document outsourcing
business, Bowne Business Solutions, LLC (BBS). On
November 3, 2004 the Plan was amended to allow BBS
employees to continue to be eligible for participation in the
plan through December 31, 2004, subject to certain
limitations. On December 17, 2004 the Plan was further
amended to not permit BBS employees participating in the Plan to
change contribution rate elections for future contributions or
take new loans or hardship withdrawals effective
December 23, 2004, and effective December 30, 2004 the
BBS employees participating in the Plan were not permitted to
reallocate their contributions amongst the Plans
investment funds or take non-hardship withdrawals or
distributions from the Plan. Effective December 31, 2004,
BBS employees were no longer eligible to participate in the Plan
and the amount of assets equal to the participants account
balances under the Plan as of December 31, 2004 were
transferred to a separate qualified plan (BBS Plan) for these
participants. Upon the transfer of the account balances, all
obligations related to the Plan ceased and the benefit payments
and liabilities are obligations of the BBS Plan. As of
December 31, 2004, the total amount of assets belonging to
BBS employees participating in the Plan that were required to be
transferred to the BBS Plan was $29,392,370. As of
December 31, 2004, the Company transferred $29,299,866 to
the BBS Plan. The remaining amount required to be transferred is
recorded as a liability in the Statements of Net Assets
Available For Benefits as of December 31, 2004.
F-9
BOWNE & CO., INC. 401(k) SAVINGS PLAN
Schedule H, Line 4i Schedule of Assets (Held
at End of Year)
As of December 31, 2004
|
|
|
|
|
|
|
Identity of Party Involved |
|
Description |
|
Current Value | |
|
|
|
|
| |
The Vanguard Group
|
|
Davis New York Venture Fund, Inc. Class A |
|
$ |
6,346,248 |
|
The Vanguard Group
|
|
Fidelity Magellan Fund |
|
|
54,652,068 |
|
The Vanguard Group
|
|
Morgan Stanley Global/Equity Class B |
|
|
2,302,362 |
|
The Vanguard Group
|
|
T. Rowe Price Small-Cap Stock Fund |
|
|
8,840,795 |
|
The Vanguard Group
|
|
Vanguard 500 Index Fund* |
|
|
16,980,431 |
|
The Vanguard Group
|
|
Vanguard International Growth Fund* |
|
|
2,848,904 |
|
The Vanguard Group
|
|
Vanguard Mid-Cap Index Fund* |
|
|
4,241,022 |
|
The Vanguard Group
|
|
Vanguard Prime Money Market Fund* |
|
|
21,560,658 |
|
The Vanguard Group
|
|
Vanguard PRIMECAP Fund* |
|
|
12,303,254 |
|
The Vanguard Group
|
|
Vanguard Short-Term Corporate Fund* |
|
|
5,916,370 |
|
The Vanguard Group
|
|
Vanguard Total Bond Market Index Fund* |
|
|
2,434,956 |
|
The Vanguard Group
|
|
Vanguard Wellington Fund* |
|
|
52,038,477 |
|
The Vanguard Group
|
|
Bowne & Co., Inc. Stock Fund* |
|
|
19,505,173 |
|
|
|
Participant loans*(1) |
|
|
6,500,520 |
|
Institutional Partners, LP
|
|
Limited Partnership |
|
|
31,234 |
|
|
|
|
|
|
|
|
|
|
|
$ |
216,502,472 |
|
|
|
|
|
|
|
|
|
* |
Party-in-interest as defined by ERISA. |
|
|
(1) |
822 loans were outstanding at 12/31/04 bearing an average
interest rate of 6.12% |
See accompanying independent registered public accounting
firms report.
F-10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Trustees have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
Bowne & Co., Inc. |
|
401(k) Savings Plan |
|
|
|
|
|
C. Cody Colquitt |
|
Senior Vice President and Chief Financial Officer |
Dated: June 23, 2005