FORM 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, 2005
OR
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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.
55 Water Street
New York, New York 10041
(212) 924-5500
BOWNE & CO., INC.
401(k) SAVINGS PLAN
TABLE OF CONTENTS
Items 1 and 2. Financial Statements
Exhibit
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, 2005 and 2004 and the
related statement of changes in net assets available for
benefits for the year ended December 31, 2005. 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, 2005 and 2004 and the changes
in net assets available for benefits for the year ended
December 31, 2005 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, 2005 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 29, 2006
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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2005 | |
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2004 | |
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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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$ |
206,774,320 |
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$ |
209,970,718 |
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Investment in limited partnership
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31,234 |
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Loans to participants
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6,468,240 |
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6,500,520 |
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Total investments
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213,242,560 |
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216,502,472 |
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Receivables:
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Employee contributions
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463,581 |
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801,289 |
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Employer contributions
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496,035 |
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398,653 |
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Total receivables
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959,616 |
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1,199,942 |
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Total assets
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214,202,176 |
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217,702,414 |
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Liabilities:
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Due to other qualified plans (note 9)
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51,952 |
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92,504 |
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Total liabilities
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51,952 |
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92,504 |
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Net assets available for benefits
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$ |
214,150,224 |
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$ |
217,609,910 |
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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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2005 | |
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Investment activity:
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Net appreciation in market value of investments (note 6)
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$ |
3,879,542 |
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Interest
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6,437,840 |
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Dividends
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246,796 |
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10,564,178 |
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Interest income on participant loans
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351,771 |
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Total investment income
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10,915,949 |
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Contributions:
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Employees
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11,917,674 |
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Employers
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5,893,772 |
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Rollovers
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677,093 |
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Total contributions
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18,488,539 |
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Total additions
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29,404,488 |
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Deductions:
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Benefits paid to participants
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23,943,725 |
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Administrative expenses
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234,834 |
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Total deductions
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24,178,559 |
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Net increase before assets transfers
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5,225,929 |
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Asset transfers to other qualified plans (note 9)
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(8,685,615 |
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Net decrease
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(3,459,686 |
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Net assets available for benefits:
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Beginning of period
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217,609,910 |
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End of period
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$ |
214,150,224 |
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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, 2005 and 2004
(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).
At December 31, 2005 the participating companies in the
Plan were as follows:
Bowne & Co., Inc.
Bowne Business Communications, Inc.
Bowne DecisionQuest, Inc.
Bowne Digital Solutions L.L.C.
Bowne Information Services, Inc.
Bowne International, L.L.C.
Bowne of Atlanta, Inc.
Bowne of Boston, Inc.
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.
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.
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, 2005 and 2004, no participant was
permitted to make pre-tax contributions to the Plan in excess of
$14,000 and $13,000, 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 performance, and cannot exceed the
maximum amounts allowable under the Code. There were no
discretionary contributions for the years ended
December 31, 2005 and 2004.
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.
F-4
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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.
Participants not covered by a collective bargaining agreement
that transferred amounts to the Plan from the Bowne &
Co., Inc. Employee Stock Purchase Plan (the ESPP), which was
merged into this plan effective December 31, 2003, are 100%
vested in the value of his/her previous ESPP matching
contributions and employer matching contributions made on or
after January 1, 2004.
Participants covered by a collective bargaining agreement that
transferred amounts to the Plan from the ESPP are 100% vested in
the value of his/her previous ESPP matching contributions and
employer matching contributions made on or after
February 1, 2004.
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(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.
Participants can elect to have their accounts invested in
various investment funds, each with a different investment
objective and strategy.
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.
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(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.
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.
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.
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 2005 and 2004 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 $244,978 for the year
ended December 31, 2005. At December 31, 2005 and
2004, forfeited nonvested accounts totaled approximately $13,325
and $70,245, respectively.
F-5
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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 5 years. Home
purchase loans may extend the repayment term to fifteen years.
Loan repayment is through payroll deductions. At
December 31, 2005 and 2004, there were 805 and
822 individual loans outstanding, bearing an interest rate
ranging from 5.0% to 10.5% and 5.0% to 11.0%, respectively, with
maturities through 2020.
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. At
December 31, 2005 and 2004, approximately 7% and 9%,
respectively, of the Plans net assets were invested in the
common stock of the Company. The underlying value of the
Companys stock is entirely dependent upon the performance
of the Company and the markets evaluation of such
performance.
F-6
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
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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.
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.
F-7
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
Investments held by Vanguard Fiduciary Trust Company are as
follows as of December 31,:
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2005 | |
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2004 | |
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Davis New York Venture Fund, Inc. Class A
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$ |
7,730,326 |
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$ |
6,346,248 |
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Fidelity Magellan Fund
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54,652,068 |
* |
Fidelity Disciplined Equity Fund
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38,482,789 |
* |
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Morgan Stanley Global/ Equity Class B
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2,694,128 |
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2,302,362 |
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T. Rowe Price Small-Cap Stock Fund
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11,658,036 |
* |
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8,840,795 |
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Vanguard 500 Index Fund
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17,253,771 |
* |
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16,980,431 |
* |
Vanguard International Growth Fund
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4,578,814 |
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2,848,904 |
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Vanguard Mid-Cap Index Fund
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11,001,679 |
* |
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4,241,022 |
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Vanguard Prime Money Market Fund
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20,985,894 |
* |
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21,560,658 |
* |
Vanguard PRIMECAP Fund
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12,476,384 |
* |
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12,303,254 |
* |
Vanguard Short-Term Corporate Fund
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4,647,666 |
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5,916,370 |
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Vanguard Target Retirement 2005 Fund
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937,224 |
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Vanguard Target Retirement 2015 Fund
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1,004,684 |
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Vanguard Target Retirement 2025 Fund
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1,465,298 |
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Vanguard Target Retirement 2035 Fund
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437,287 |
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Vanguard Target Retirement 2045 Fund
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526,097 |
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Vanguard Target Retirement Income Fund
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81,430 |
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Vanguard Total Bond Market Index Fund
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3,234,230 |
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2,434,956 |
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Vanguard Wellington Fund
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52,896,785 |
* |
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52,038,477 |
* |
Bowne & Co., Inc. Stock Fund
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14,681,798 |
* |
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19,505,173 |
* |
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$ |
206,774,320 |
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$ |
209,970,718 |
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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, 2005 was comprised as follows:
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Net appreciation in market value of investments in mutual funds
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$ |
5,727,252 |
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Net depreciation in market value of investments in common stock
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(1,816,476 |
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Net depreciation in market value of investment in limited
partnership
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(31,234 |
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Total net appreciation in market value of investments
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$ |
3,879,542 |
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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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2005 | |
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2004 | |
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Net Assets:
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Investments:
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Bowne & Co., Inc. Stock Fund
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$ |
1,274,876 |
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$ |
1,338,059 |
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Year Ended | |
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December 31, 2005 | |
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Changes in Net Assets:
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Contributions
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$ |
146,536 |
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Dividends
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18,531 |
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Net depreciation in market value of investments
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(113,595 |
) |
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Administrative expenses
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(319 |
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Benefits paid to participants
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(114,336 |
) |
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$ |
(63,183 |
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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 Plans |
On September 1, 2005, the Company sold its globalization
business, Bowne Global Solutions (BGS). Effective
September 1, 2005, the Plan was amended to permit BGS
employees to continue to be eligible for participation in the
Plan through December 31, 2005 or an earlier date as agreed
to by the Company and BGS. The Plan was also amended as of
September 1, 2005 to no longer permit BGS employees
participating in the Plan to contribute to the Companys
common stock fund, and existing contributions for these
participants invested in this fund were required to be allocated
to another investment fund. On December 15, 2005, the
Company transferred $8,566,370 of assets belonging to BGS
employees participating in the Plan to the acquiring
companys separate plan. As of December 31, 2005,
there was $51,952 of assets belonging to BGS employees remaining
in the Plan. These amounts were transferred to the acquiring
companys separate plan in 2006 and are recorded as a
liability in the Statement of Net Assets Available For Benefits
as of December 31, 2005. Upon the transfer of the account
balances, all obligations related to the Plan ceased and the
benefit payments and liabilities became obligations of the
acquiring companys separate plan.
As disclosed in the Companys 401(k) Savings Plan annual
report on
Form 11-K for the
year ended December 31, 2004, the Company sold its document
outsourcing business, Bowne Business Solutions, LLC
(BBS) in November 2004. 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 became 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
F-9
BOWNE & CO., INC.
401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
$29,392,370 of which $29,299,866 was transferred to the BBS Plan
as of December 31, 2004. The remaining $92,504 required to
be transferred was recorded as a liability in the Statement of
Net Assets Available For Benefits as of December 31, 2004
and was transferred to the BBS Plan in 2005. In addition,
$67,293 of assets belonging to BBS employees were identified in
2005, and subsequently transferred to the BBS plan within the
period.
F-10
BOWNE & CO., INC. 401(k) SAVINGS PLAN
Schedule H, Line 4i Schedule of Assets (Held
at End of Year)
As of December 31, 2005
|
|
|
|
|
|
|
|
|
Identity of Party Involved | |
|
Description |
|
Current Value | |
| |
|
|
|
| |
|
The Vanguard Group |
|
|
Davis New York Venture Fund, Inc. Class A |
|
$ |
7,730,326 |
|
|
The Vanguard Group |
|
|
Fidelity Disciplined Equity Fund |
|
|
38,482,789 |
|
|
The Vanguard Group |
|
|
Morgan Stanley Global/ Equity Class B |
|
|
2,694,128 |
|
|
The Vanguard Group |
|
|
T. Rowe Price Small-Cap Stock Fund |
|
|
11,658,036 |
|
|
The Vanguard Group |
|
|
Vanguard 500 Index Fund* |
|
|
17,253,771 |
|
|
The Vanguard Group |
|
|
Vanguard International Growth Fund* |
|
|
4,578,814 |
|
|
The Vanguard Group |
|
|
Vanguard Mid-Cap Index Fund* |
|
|
11,001,679 |
|
|
The Vanguard Group |
|
|
Vanguard Prime Money Market Fund* |
|
|
20,985,894 |
|
|
The Vanguard Group |
|
|
Vanguard PRIMECAP Fund* |
|
|
12,476,384 |
|
|
The Vanguard Group |
|
|
Vanguard Short-Term Corporate Fund* |
|
|
4,647,666 |
|
|
The Vanguard Group |
|
|
Vanguard Target Retirement 2005 Fund* |
|
|
937,224 |
|
|
The Vanguard Group |
|
|
Vanguard Target Retirement 2015 Fund* |
|
|
1,004,684 |
|
|
The Vanguard Group |
|
|
Vanguard Target Retirement 2025 Fund* |
|
|
1,465,298 |
|
|
The Vanguard Group |
|
|
Vanguard Target Retirement 2035 Fund* |
|
|
437,287 |
|
|
The Vanguard Group |
|
|
Vanguard Target Retirement 2045 Fund* |
|
|
526,097 |
|
|
The Vanguard Group |
|
|
Vanguard Target Retirement Income Fund* |
|
|
81,430 |
|
|
The Vanguard Group |
|
|
Vanguard Total Bond Market Index Fund* |
|
|
3,234,230 |
|
|
The Vanguard Group |
|
|
Vanguard Wellington Fund* |
|
|
52,896,785 |
|
|
The Vanguard Group |
|
|
Bowne & Co., Inc. Stock Fund* |
|
|
14,681,798 |
|
|
|
|
|
Participant loans*(1) |
|
|
6,468,240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
213,242,560 |
|
|
|
|
|
|
|
|
|
|
* |
Party-in-interest as
defined by ERISA. |
|
|
(1) |
805 loans were outstanding at 12/31/05 bearing an interest rate
ranging from 5.0% to 10.5% |
See accompanying independent registered public accounting
firms report.
F-11
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 |
|
|
|
|
By: |
/s/ Richard Bambach,
Jr.
|
|
|
|
|
|
Richard Bambach, Jr. |
|
Vice President, Interim Chief Financial Officer, and
Corporate Controller |
Dated: June 29, 2006