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 1100, 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: 12/31/03 ------------------ 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. 2003 A N N U A L R E P O R T MASSMUTUAL CORPORATE INVESTORS [LOGO] MASSMUTUAL CORPORATE INVESTORS MassMutual Corporate Investors is a closed-end investment company, first offered to the public over a decade ago and is listed on the New York Stock Exchange. MASSMUTUAL CORPORATE INVESTORS 1500 Main Street, Suite 1100 Springfield, MA 01115 (413) 226-1516 www.massmutual.com/mci ADVISER David L. Babson & Company Inc., a member of the MassMutual Financial Group 1500 Main Street Springfield, MA 01115 AUDITOR Deloitte & Touche LLP New York, NY 10281 COUNSEL TO THE TRUST Ropes & Gray LLP Boston, MA 02110 CUSTODIAN Citibank, N.A. New York, NY 10043 TRANSFER AGENT & REGISTRAR Shareholder Financial Services, Inc. P.O. Box 173673 Denver, CO 80217 1-800-647-7374 PROXY VOTING POLICIES & PROCEDURES A copy of MassMutual Corporate Investors' Proxy Voting policy and procedures used to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling, toll-free, 866-399-1516; (2) on MassMutual Corporate Investors' website: www.massmutual.com/mci; and (3) on the U.S. Securities and Exchange Commission website at http://www.sec.gov. MCI Listed NYSE MASSMUTUAL CORPORATE INVESTORS INVESTMENT OBJECTIVE AND POLICY MassMutual Corporate Investors (the "Trust"), a closed-end investment company, was offered to the public in September 1971 and its shares are listed on the New York Stock Exchange. The share price of Corporate Investors can be found in the financial section of most newspapers as "MassCp" or "MassMuInv" under the New York Stock Exchange listings. The Trust's New York Stock Exchange trading symbol is "MCI". 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, longterm 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 tradable, 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 highyield securities) and marketable common stocks. David L. Babson & Company Inc. 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 30, 2004 at 2:00 P.M. in Springfield, Massachusetts. 1 MASSMUTUAL CORPORATE INVESTORS TO OUR SHAREHOLDERS As previously announced, Mr. Robert E. Joyal, President of MassMutual Corporate Investors (the "Trust") for the past four years, announced his retirement as President of the Trust, effective as of the 2003 Annual Shareholders' Meeting in April. Following Mr. Joyal's retirement, the Trust's Board of Trustees elected me to succeed him as President of the Trust. Currently, I lead the Corporate Securities Group at David L. Babson & Company Inc. ("Babson"), the Trust's investment adviser, where I oversee all corporate credit-related investments, including public and private bonds, bank loans, mezzanine and private equity investments, as well as structured credit products. Before joining Babson in 2000, I served for twelve years in the Investment Management Division of Massachusetts Mutual Life Insurance Company, Babson's parent company. I am pleased to share with you the Trust's Annual Report for the year ended December 31, 2003. THE TRUST'S TOTAL PORTFOLIO RATE OF RETURN FOR 2003 WAS 22.61%, AS MEASURED BY THE CHANGE IN NET ASSET VALUE, ASSUMING THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. [PHOTO] LEFT TO RIGHT: STUART H. REESE, CHAIRMAN ROGER W. CRANDALL, PRESIDENT 2 MASSMUTUAL CORPORATE INVESTORS THE TRUST CONTINUES TO 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. [PHOTO] LEFT TO RIGHT: CHARLES C. MCCOBB, JR. VICE PRESIDENT AND CHIEF FINANCIAL OFFICER STEPHEN L. KUHN VICE PRESIDENT AND SECRETARY CLIFFORD M. NOREEN VICE PRESIDENT TOTAL ANNUAL PORTFOLIO RETURN (AS OF 12/31 EACH YEAR)* 2003 22.61* 28.34** 6.91*** 2002 4.80* -23.51** 10.14*** 2001 5.91* -11.67** 9.77*** 2000 7.28* -16.26** 9.46*** 1999 7.53* 25.89** 0.16*** 1998 17.12* 33.77** 8.29*** 1997 27.14* 31.04** 8.36*** 1996 15.42* 23.03** 3.97*** 1995 33.76* 34.64** 18.99*** 1994 2.36* 3.83** -2.66*** MassMutual Corporate Investors (Based on change in the net asset value with reinvested dividends)* Standard & Poor's Industrial Composite** Lehman Brothers Intermediate U.S. Credit Index*** * 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. ** Formerly called the Standard & Poor's Industrial Price Index. *** Formerly called the Lehman Brothers Intermediate Corporate Bond Index. 3 MASSMUTUAL CORPORATE INVESTORS THE TRUST'S 2003 PORTFOLIO PERFORMANCE AT LEFT: [PHOTO] RICHARD C. MORRISON VICE PRESIDENT The Trust's total portfolio rate of return for 2003 was 22.61%, as measured by the change in net asset value, assuming the reinvestment of all dividends and distributions. The Trust's total net assets were $193,786,114, or $21.84 per share, as of December 31, 2003, compared to $171,028,431, or $19.40 per share, as of December 31, 2002. The Trust's quarterly dividend remained stable this year at 36 cents per share. In addition, the Trust declared a special year-end dividend of 40 cents per share as of December 31, 2003. We are pleased with the Trust's 2003 portfolio performance. The following 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, 2003: LEHMAN LEHMAN STANDARD BROTHERS BROTHERS & POOR'S THE U.S.CORPORATE INTERMEDIATE INDUSTRIAL RUSSELL TRUST HIGH YIELD INDEX U.S.CREDIT INDEX* COMPOSITE** 2000 INDEX 1 Year 22.61% 28.97% 6.91% 28.34% 47.25% 3 Year 10.82% 10.21% 8.93% -4.64% 6.27% 5 Year 9.44% 5.23% 7.22% -1.79% 7.13% 10 Year 13.96% 6.89% 7.19% 10.62% 9.47% The U.S. economy and investment markets displayed signs of recovery during 2003, assisted by low interest rates and tax cuts. As the uncertainty of war in Iraq gave way to combat operations, equity and credit markets rallied strongly. As a result, many investors left the relative safety of bonds, which helped push yields higher. * Formerly called the Lehman Brothers Intermediate Corporate Bond Index. ** Formerly called the Standard & Poor's Industrial Price Index. 4 MASSMUTUAL CORPORATE INVESTORS Concurrent with the improving U.S. economy, corporate credit defaults declined. The speculativegrade issuer-weighted default rate fell from 8.4% in 2002 to 5.2% in 2003, as reported by Moody's Investors Service. The year 2003 witnessed a significant increase in the issuance of high-yield corporate bonds, with 496 new deals coming to market in 2003 compared with 262 in 2002, according to Credit Suisse First Boston. These factors, among others, spurred an overall increase in merger and acquisition activity, especially in the second half of the year,* which helped provide potential private placement investment opportunities for the Trust. Helped by these trends, the Trust was able to dispose of eight private investments in 2003 that contributed $19.7 million in gains to the Trust. Assuming that the U.S. economy and investment markets continue to improve, and all other things being equal, the Trust's investment portfolio should benefit from the foregoing economic trends. Overall, the Trust closed 11 new private placement transactions during the course of the year: Coeur, Inc., Dwyer Group, Inc., Euro-Pro Corporation, MedAssist, Inc., Neff Motivation, Inc., Royal Baths Manufacturing Company, Synventive Equity LLC, Tomah Holdings, Inc., Trustile Doors, Inc., U S M Holdings Corp., and Weasler Holdings LLC. In addition, the Trust added to existing investments in Evans Consoles, Inc., Olympic Sales, Inc., and Shelter Acquisition, Inc. * Source: THE WALL STREET JOURNAL, January 2, 2004 LEFT TO RIGHT: MICHAEL L. KLOFAS VICE PRESIDENT MICHAEL P. HERMSEN [PHOTO] VICE PRESIDENT RICHARD E. SPENCER, II VICE PRESIDENT 5 MASSMUTUAL CORPORATE INVESTORS THE OUTLOOK FOR 2004 In 2003, the equity markets closed the year on a positive note for the first time since 1999, giving investors a breath of relief. Does that mean that we can anticipate markets continuing to rise next year? Not necessarily. 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. The Trust continues to 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's seasoned investment-management team and the Trust's financial position, all contribute to the Trust's being well-positioned for future investment opportunities that meet its investment objectives and policies. While past performance is not an indicator of future returns, we believe the Trust's investment objectives and historical portfolio rates of return should continue to earn it consideration in a well-diversified investment portfolio. As always, I realize that you have myriad investment selections available to you, and I thank you for your investment in the Trust. 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. 2003 Record Net Investment Short-Term Total Dividends Date Income Gains Ordinary Income -------------------------------------------------------------------------------- Regular 5/2/03 0.3600 - 7/31/03 0.3600 - 10/31/03 0.3600 - 12/31/03 0.3600 - Special 12/31/03 0.4000 - -------------------------------------------------------------------------------- 1.8400 - $1.84 The Trust did not have distributable net long-term capital gains in 2003. -------------------------------------------------------------------------------- Qualified for Dividend Interest Earned on Annual Dividend Received Deduction* Qualified Dividends** U.S. Gov't. Obligations Amount Amount Amount Amount per Share Percent per Share Percent per Share Percent per Share ---------------------------------------------------------------------------------------------- $1.84 20.57949% 0.378663 20.5668% 0.378429 0.00% 0.0000 ---------------------------------------------------------------------------------------------- * Not available to individual shareholders ** Qualified dividends are reported in Box 1b on IRS Form 1099-Div for 2003 6 FINANCIAL REPORT ------------------------------------------ Consolidated Statements of Assets and Liabilities 8 ------------------------------------------------------- Consolidated Statements of Operations 9 ------------------------------------------------------- Consolidated Statements 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 36-40 ------------------------------------------------------- Change in Independent Accountants 41 ------------------------------------------------------- Interested Trustees 42-43 ------------------------------------------------------- Independent Trustees 44-46 ------------------------------------------------------- Officers of the Trust 47 ------------------------------------------------------- Independent Auditors' Report 48 ------------------------------------------------------- 7 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2003 ASSETS: Investments (See Consolidated Schedule of Investments) Corporate restricted securities at fair value (Cost - $192,154,276) $ 173,400,054 Corporate public securities at market value (Cost - $27,015,987) 27,635,952 Short-term securities at cost plus earned discount which approximates market value 6,247,517 -------------------------------------------------------------------------------- $ 207,283,523 ================================================================================ Cash 9,049,441 Interest and dividends receivable 3,276,167 Receivable for investments sold 3,804,096 -------------------------------------------------------------------------------- TOTAL ASSETS $ 223,413,227 ================================================================================ LIABILITIES: Dividend payable $ 6,743,323 Management fee payable 729,433 Note payable 20,000,000 Interest payable 187,711 Accrued expenses 189,177 Accrued taxes payable 1,777,469 -------------------------------------------------------------------------------- TOTAL LIABILITIES 29,627,113 ================================================================================ NET ASSETS: Common shares, par value $1.00 per share; an unlimited number authorized 8,872,793 Additional paid-in capital 101,792,458 Retained net realized gain on investments, prior years 100,547,585 Undistributed net investment income 1,372,693 Undistributed net realized loss on investments (665,158) Net unrealized depreciation of investments (18,134,257) -------------------------------------------------------------------------------- TOTAL NET ASSETS 193,786,114 -------------------------------------------------------------------------------- TOTAL LIABILITIES AND NET ASSETS $ 223,413,227 -------------------------------------------------------------------------------- COMMON SHARES ISSUED AND OUTSTANDING 8,872,793 -------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE $ 21.84 -------------------------------------------------------------------------------- See Notes to Consolidated Financial Statements. 8 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 INVESTMENT INCOME: Interest $ 17,731,167 Dividends 353,115 -------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 18,084,282 -------------------------------------------------------------------------------- EXPENSES: Management fees 2,841,758 Trustees' fees and expenses 110,029 Transfer agent/registrar's expenses 38,000 Interest 1,515,500 Reports to shareholders 134,800 Audit and legal 276,500 Other 363,117 -------------------------------------------------------------------------------- TOTAL EXPENSES 5,279,704 -------------------------------------------------------------------------------- NET INVESTMENT INCOME ($1.44 PER SHARE) 12,804,578 -------------------------------------------------------------------------------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain on investments before taxes 6,751,186 Provision for income taxes (1,761,469) -------------------------------------------------------------------------------- Net realized gain on investments 4,989,717 Net change in unrealized depreciation of investments 20,089,741 -------------------------------------------------------------------------------- NET GAIN ON INVESTMENTS 25,079,458 -------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 37,884,036 -------------------------------------------------------------------------------- See Notes to Consolidated Financial Statements. 9 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2003 NET INCREASE IN CASH: Cash flows from operating activities: Interest and dividends received $ 16,807,182 Interest expense paid (1,515,500) Operating expenses paid (3,576,788) -------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 11,714,894 -------------------------------------------------------------------------------- Cash flows from investing activities: Purchases/Proceeds/Maturities from short-term portfolio securities, net 4,704,962 Purchase of portfolio securities (108,740,566) Proceeds from disposition of portfolio securities 111,875,694 -------------------------------------------------------------------------------- NET CASH PROVIDED BY INVESTING ACTIVITIES 7,840,090 -------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES 19,554,984 -------------------------------------------------------------------------------- Cash flows from financing activities: Increase in receipts for shares issued on reinvestment of dividends 1,167,125 Cash dividends paid from net investment income (12,724,046) -------------------------------------------------------------------------------- NET CASH USED FOR FINANCING ACTIVITIES (11,556,921) -------------------------------------------------------------------------------- Net increase in cash 7,998,063 Cash - beginning of year 1,051,378 -------------------------------------------------------------------------------- CASH - END OF YEAR $ 9,049,441 -------------------------------------------------------------------------------- RECONCILIATION OF NET INCREASE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES: NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 37,884,036 -------------------------------------------------------------------------------- Increase in investments (17,771,769) Decrease in interest and dividends receivable 42,216 Increase in receivable for investments sold (2,548,527) Increase in management fee payable 85,662 Increase in accrued expenses 85,897 Increase in accrued taxes payable 1,777,469 -------------------------------------------------------------------------------- TOTAL ADJUSTMENTS TO NET ASSETS FROM OPERATIONS (18,329,052) -------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING AND INVESTING ACTIVITIES $ 19,554,984 -------------------------------------------------------------------------------- See Notes to Consolidated Financial Statements. 10 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 2003 2002 INCREASE (DECREASE) IN NET ASSETS: Operations: Net investment income $ 12,804,578 $ 13,504,732 Net realized gain (loss) on investments 4,989,717 (2,296,178) Net change in unrealized depreciation of investments 20,089,741 (2,951,901) -------------------------------------------------------------------------------- Net increase in net assets resulting from operations 37,884,036 8,256,653 Net increase in shares of beneficial interest transactions 1,167,125 1,885,841 Dividends to shareholders from: Net investment income (2003-$1.84 per share; 2002-$1.44 per share) (16,293,478) (12,611,444) Net realized gains on investments (2002-$.18 per share) - (1,615,166) -------------------------------------------------------------------------------- TOTAL INCREASE (DECREASE) IN NET ASSETS 22,757,683 (4,084,116) Net Assets, beginning of year 171,028,431 175,112,547 -------------------------------------------------------------------------------- NET ASSETS, END OF YEAR (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME IN 2003 - $1,372,693; 2002 - $1,825,555) $193,786,114 $171,028,431 -------------------------------------------------------------------------------- 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, 2003 2002 2001 2000 1999 NET ASSET VALUE: BEGINNING OF YEAR $ 19.40 $ 20.07 $ 20.74 $ 22.00 $ 23.87 ------------------------------------------------------------------------------------------- Net investment income 1.44 1.53 1.70 1.96 1.80 Net realized and unrealized gain (loss) on investments 2.83 (0.59) (0.53) (0.46) (0.94) ------------------------------------------------------------------------------------------- Total from investment operations 4.27 0.94 1.17 1.50 0.86 ------------------------------------------------------------------------------------------- Dividends from net investment income to common shareholders (1.84) (1.44) (1.79) (1.96) (1.73) ------------------------------------------------------------------------------------------- Dividends from net realized gain on investments to common shareholders 0.00 (0.18) (0.09) (0.80) (1.00) Change from issuance of shares 0.01 0.01 0.04 0.00 0.00 ------------------------------------------------------------------------------------------- Total distributions (1.83) (1.61) (1.84) (2.76) (2.73) ------------------------------------------------------------------------------------------- NET ASSET VALUE: END OF YEAR $ 21.84 $ 19.40 $ 20.07 $ 20.74 $ 22.00 ------------------------------------------------------------------------------------------- PER SHARE MARKET VALUE: END OF YEAR $ 22.90 $ 19.49 $ 20.70 $ 22.00 $ 21.38 ------------------------------------------------------------------------------------------- Total investment return Market value 27.53% 1.35% 1.88% 17.55% 7.35% Net asset value 22.61% 4.80% 5.91% 7.28% 7.53% Net assets (in millions): End of year $ 193.79 $ 171.03 $ 175.11 $ 178.13 $ 188.96 Ratio of operating expenses to average net assets 2.04% 1.82% 1.72% 1.47% 1.30% Ratio of interest expense to average net assets 0.82% 0.86% 0.84% 0.58% 0.52% Ratio of total expenses to average net assets 2.86% 2.68% 2.56% 2.05% 1.82% Ratio of net investment income to average net assets 6.95% 7.65% 8.20% 8.56% 7.63% Portfolio turnover 56.10% 34.02% 24.48% 59.75% 68.04% See Notes To Consolidated Financial Statements. 12 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES - 89.48% (A) or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- PRIVATE PLACEMENT INVESTMENTS - 77.05% ADORN, INC. A manufacturer of wall panels, cabinets, moldings and countertops for houses and recreational vehicles. 12.5% Subordinated Note due 2010 $ 2,125,000 2/29/00 $ 1,900,805 $ 2,119,533 Warrant, exercisable until 2010, to purchase common stock at $.02 per share (B) 364 shs. 2/29/00 307,759 192,198 ---------------------------------------------------------------------------------------------------------------------------------- 2,208,564 2,311,731 ---------------------------------------------------------------------------------------------------------------------------------- AMERICA'S BODY COMPANY, INC. A designer and manufacturer of commercial work vehicles. 12% Preferred Stock Series C (B) 395 shs. 12/16/03 1,750,000 1,750,000 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 58 shs. * 513,334 1 ---------------------------------------------------------------------------------------------------------------------------------- * 11/2/98 AND 12/16/03 2,263,334 1,750,001 ---------------------------------------------------------------------------------------------------------------------------------- AMES TRUE TEMPER GROUP A manufacturer and distributor of non-powered lawn and garden tools and accessories in North America. 13% Senior Subordinated Note due 2010 $ 1,888,889 1/14/02 1,883,871 1,992,777 10% Preferred Stock 161 shs. ** 161,093 172,555 Class A Common Stock (B) 2,105 shs. 2/28/02 2,105 2,105 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 5,018 shs. 1/14/02 5,018 50 ---------------------------------------------------------------------------------------------------------------------------------- ** 2/28/02 AND 11/15/02. 2,052,087 2,167,487 ---------------------------------------------------------------------------------------------------------------------------------- BEACON MEDICAL PRODUCTS, INC. A designer, manufacturer and marketer of medical air and gas distribution systems. Senior Secured Tranche A Floating Rate Note due 2008 $ 992,756 4/9/02 992,756 987,048 12% Senior Secured Note due 2010 $ 721,196 4/9/02 609,600 741,964 Limited Partnership Interest of Riverside Capital Appreciation Fund IV, L.P. (B) 1.12% int. 4/9/02 152,329 137,096 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 1,390 shs. 4/9/02 127,497 14 ---------------------------------------------------------------------------------------------------------------------------------- 1,882,182 1,866,122 ---------------------------------------------------------------------------------------------------------------------------------- BETA BRANDS LTD A manufacturer of hard candy and chocolate-coated products sold primarily to the Canadian market. Secured Floating Rate Note due 2010 (B) $ 3,505,090 5/2/03 525,764 35,051 Limited Partnership Interest of CM Equity Partners (B) 6.01% int. 12/22/97 833,182 -- Common Stock (B) 930,000 shs. 5/2/03 930 -- ---------------------------------------------------------------------------------------------------------------------------------- 1,359,876 35,051 ---------------------------------------------------------------------------------------------------------------------------------- 13 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- BETTER MINERALS & AGGREGATES A producer of high grade industrial and specialty silica sands. 14% Redeemable Preferred Stock 997 shs. 9/30/99 $ 545,858 $ 108,991 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. 9/30/99 799,068 -- Warrants, exercisable until 2005 and 2010, to purchase common stock at $.01 per share (B) 11,399 shs. * 128,502 -- ---------------------------------------------------------------------------------------------------------------------------------- *12/19/96 AND 9/30/99. 2,640,128 108,991 ---------------------------------------------------------------------------------------------------------------------------------- C & M CONVEYOR, INC. A manufacturer and supplier of material handling systems to the corrugated sheet and container industry. 9.5% Senior Secured Term Note due 2007 $ 1,233,434 9/13/02 1,233,434 1,235,048 11% Senior Subordinated Note due 2010 $ 838,102 9/13/02 787,132 841,757 Common Stock (B) 316,265 shs. 9/13/02 316,265 253,012 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 137,175 shs. 9/13/02 60,250 1,372 ---------------------------------------------------------------------------------------------------------------------------------- 2,397,081 2,331,189 ---------------------------------------------------------------------------------------------------------------------------------- CAINS FOODS, L.P. A producer of mayonnaise and sauce products for both the retail and food service markets. 8% Junior Subordinated Convertible Note due 2004, convertible into partnership points at $1,388.89 per point $ 108,108 9/29/95 108,108 113,276 Warrant, exercisable until 2006, to purchase partnership points at $.01 per point (B) 39 pts. 9/29/95 50,261 -- ---------------------------------------------------------------------------------------------------------------------------------- 158,369 113,276 ---------------------------------------------------------------------------------------------------------------------------------- CAPESUCCESS LLC A provider of diversified staffing services. Preferred Membership Interests (B) 1,882 uts. 4/29/00 8,396 420 Common Membership Interests (B) 24,318 uts. 4/29/00 108,983 5,442 ---------------------------------------------------------------------------------------------------------------------------------- 117,379 5,862 ---------------------------------------------------------------------------------------------------------------------------------- CAPITAL SPECIALTY PLASTICS, INC. A producer of desiccant strips used for packaging pharmaceuticals products. Common Stock (B) 109 shs. ** 503 403 ---------------------------------------------------------------------------------------------------------------------------------- **12/30/97 AND 5/29/99. ---------------------------------------------------------------------------------------------------------------------------------- 14 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- COEUR, INC. A producer of proprietary, disposable power injection syringes. 8.75% Senior Secured Term Note due 2010 $ 570,652 4/30/03 $ 570,652 $ 573,538 11.5% Senior Subordinated Note due 2011 $ 424,819 4/30/03 386,044 428,169 Common Stock (B) 126,812 shs. 4/30/03 126,812 114,131 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 87,672 shs. 4/30/03 40,804 877 ---------------------------------------------------------------------------------------------------------------------------------- 1,124,312 1,116,715 ---------------------------------------------------------------------------------------------------------------------------------- COINING CORPORATION OF AMERICA LLC A manufacturer of close tolerance parts and metal stampings. Senior Secured Floating Rate Revolving Credit Facility due 2006 $ 129,630 1/7/02 129,630 124,572 Senior Secured Floating Rate Tranche A Note due 2007 $ 1,101,852 6/26/01 1,101,852 1,043,520 12% Senior Secured Tranche B Note due 2008 $ 648,148 6/26/01 588,521 644,586 Limited Partnership Interest (B) 6.38% int. 6/26/01 324,074 259,259 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 107,036 shs. 6/26/01 79,398 1,070 ---------------------------------------------------------------------------------------------------------------------------------- 2,223,475 2,073,007 ---------------------------------------------------------------------------------------------------------------------------------- COLIBRI HOLDINGS CORPORATION A manufacturer and distributor of wild bird feeders and accessories. 12.5% Senior Subordinated Note due 2008 $ 1,593,750 9/22/00 1,398,796 1,517,637 28% Preferred Stock 71 shs. 11/2/01 70,833 69,314 Common Stock (B) 1,429 shs. 9/22/00 531,250 265,624 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 843 shs. 9/22/00 265,625 8 ---------------------------------------------------------------------------------------------------------------------------------- 2,266,504 1,852,583 ---------------------------------------------------------------------------------------------------------------------------------- CORVEST GROUP, INC. A manufacturer and distributor of promotional products. 12% Senior Subordinated Note due 2007 $ 3,863,636 * 3,705,900 3,477,272 Common Stock (B) 56 shs. * 96,591 48,291 Limited Partnership Interest (B) 19.32% int. * 285,769 143,384 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 183 shs. * 297,203 157,789 ---------------------------------------------------------------------------------------------------------------------------------- *3/5/99 AND 3/24/99. 4,385,463 3,826,736 ---------------------------------------------------------------------------------------------------------------------------------- DELSTAR HOLDING CORPORATION A manufacturer of plastic netting for a wide variety of industries. Convertible Preferred Stock, convertible into common stock at $12.16 per share (B) 3,514 shs. 10/5/01 427,153 432,315 ---------------------------------------------------------------------------------------------------------------------------------- 15 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- 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 $ 1,231,884 7/19/01 $ 1,100,844 $ 1,179,193 Common Stock (B) 585 shs. 7/19/01 585,145 409,605 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 297 shs. 7/19/01 250,611 3 ---------------------------------------------------------------------------------------------------------------------------------- 1,936,600 1,588,801 ---------------------------------------------------------------------------------------------------------------------------------- DHD HEALTHCARE, INC. A designer, manufacturer and distributor of plastic, non-invasive medical devices used for respiratory care. Senior Secured Floating Rate Revolving Credit Note due 2007 $ 49,219 8/26/03 49,219 49,219 Senior Secured Floating Rate Tranche A Note due 2008 $ 988,475 2/8/01 988,475 973,248 12% Senior Secured Tranche B Note due 2009 $ 451,173 2/8/01 386,721 437,495 Limited Partnership Interest of Riverside Capital Appreciation Fund III, L.P. (B) 2.73% int. 2/8/01 163,896 236,010 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 927 shs. 2/8/01 82,030 155,783 ---------------------------------------------------------------------------------------------------------------------------------- 1,670,341 1,851,755 ---------------------------------------------------------------------------------------------------------------------------------- DIRECTED ELECTRONICS, INC. A designer and distributor of brand name automotive security systems, audio products and installation accessories. 12% Senior Subordinated Note due 2007 $ 3,355,267 12/22/99 3,092,814 3,388,820 8% Convertible Class B Subordinated Promissory Note due 2008 $ 96,598 12/22/99 96,504 99,109 Class B Common Stock (B) 26,097 shs. 12/22/99 260,965 730,703 Limited Partnership Interest (B) 8.70% int. 12/22/99 548,920 1,152,720 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 45,255 shs. 12/22/99 413,816 1,267,139 ---------------------------------------------------------------------------------------------------------------------------------- 4,413,019 6,638,491 ---------------------------------------------------------------------------------------------------------------------------------- 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. 8/27/98 734,090 -- Preferred Stock (B) 3,278 shs. 12/14/01 2,784,133 1,113,655 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 8/28/98. 3,921,650 1,113,655 ---------------------------------------------------------------------------------------------------------------------------------- 16 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- DWYER GROUP, INC. A franchiser of a variety of home repair services. 14% Senior Subordinated Note due 2011 $ 1,859,375 10/30/03 $ 1,674,909 $ 1,792,138 Common Stock 2,656 shs. 10/30/03 265,600 239,040 Warrant, excercisable until 2011, to purchase common stock at $.01 per share (B) 2,034 shs. 10/30/03 186,469 20 ---------------------------------------------------------------------------------------------------------------------------------- 2,126,978 2,031,198 ---------------------------------------------------------------------------------------------------------------------------------- EAGLE WINDOW & DOOR HOLDING CO. A manufacturer of wood and aluminum-clad wood windows and doors. 12% Senior Subordinated Note due 2010 $ 1,900,000 5/6/02 1,649,490 1,976,000 Common Stock (B) 225 shs. 5/6/02 225,000 202,500 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 441 shs. 5/6/02 285,000 396,612 ---------------------------------------------------------------------------------------------------------------------------------- 2,159,490 2,575,112 ---------------------------------------------------------------------------------------------------------------------------------- EAST RIVER VENTURES I, L.P. An acquirer of controlling or substantial interests in other entities. Limited Partnership Interest (B) 0.14% int. 1/1/01 29,976 27,148 ---------------------------------------------------------------------------------------------------------------------------------- ENZYMATIC THERAPY, INC. A manufacturer and distributor of branded natural medicines and nutritional supplements. 13% Senior Subordinated Note due 2005 (B) $ 1,593,750 9/17/02 1,349,781 956,250 Limited Partnership Interest (B) 1.32% int. 3/30/00 531,250 5,312 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 478 shs. 3/30/00 255,000 5 ---------------------------------------------------------------------------------------------------------------------------------- 2,136,031 961,567 ---------------------------------------------------------------------------------------------------------------------------------- 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 9/9/03 2,090,024 2,162,843 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 43,878 shs. 9/9/03 35,641 439 ---------------------------------------------------------------------------------------------------------------------------------- 2,125,665 2,163,282 ---------------------------------------------------------------------------------------------------------------------------------- 17 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- EVANS CONSOLES, INC. A designer and manufacturer of consoles and control center systems. Senior Secured Tranche A Floating Rate Note due 2004 $ 242,000 1/21/03 $ 242,000 $ 242,000 Senior Secured Tranche A Floating Rate Note due 2006 (B) $ 974,300 3/2/98 974,300 243,575 8.85% Senior Secured Tranche A Note due 2006 (B) $ 974,300 3/2/98 974,300 243,575 11.75% Senior Secured Tranche B Note due 2006 (B) $ 700,000 3/2/98 642,897 175,000 Senior Secured Floating Rate Revolving Credit Facility due 2006 (B) $ 984,242 3/2/98 984,242 246,061 Convertible Preferred Stock, convertible on a one share for one share basis into non-voting common stock (B) 293,071 shs. 1/21/03 1 3 Limited Partnership Interest of CM Equity Partners (B) 2.24% int. 2/11/98 126,648 -- ---------------------------------------------------------------------------------------------------------------------------------- 3,944,388 1,150,214 ---------------------------------------------------------------------------------------------------------------------------------- EXAMINATION MANAGEMENT SERVICES, INC. A national full-service evidence provider to the insurance industry and a provider of occupational health testing. 12% Senior Subordinated Note due 2007 $ 2,109,637 3/16/99 2,015,634 1,720,008 Limited Partnership Interest (B) 13.14% int. 3/2/99 2,140,363 1,284,217 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 77,233 shs. 3/16/99 175,803 772 ---------------------------------------------------------------------------------------------------------------------------------- 4,331,800 3,004,997 ---------------------------------------------------------------------------------------------------------------------------------- FASTENERS FOR RETAIL, INC. A designer and marketer of low-cost fasteners for point of purchase displays and signage in retail environments. 12.5% Senior Subordinated Note due 2007 $ 3,650,000 12/22/99 3,353,617 3,650,000 Class B Common Stock (B) 600 shs. 12/22/99 600,000 1,544,358 Warrant, exercisable until 2007, to purchase common stock at $.02 per share (B) 589 shs. 12/22/99 462,927 1,515,339 ---------------------------------------------------------------------------------------------------------------------------------- 4,416,544 6,709,697 ---------------------------------------------------------------------------------------------------------------------------------- G C-SUN HOLDINGS, L.P. A value-added national distributor of maintenance, repair and operating supplies such as fasteners, electrical components and tools. 12% Senior Subordinated Note due 2008 (B) $ 1,725,000 3/2/00 1,451,784 1,293,750 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 880 shs. 3/2/00 347,288 -- ---------------------------------------------------------------------------------------------------------------------------------- 1,799,072 1,293,750 ---------------------------------------------------------------------------------------------------------------------------------- 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 -- ---------------------------------------------------------------------------------------------------------------------------------- *1/25/99 AND 7/16/99. 3,746,371 380,271 ---------------------------------------------------------------------------------------------------------------------------------- 18 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- HIGHGATE CAPITAL LLC An acquirer of controlling or substantial interests in manufacturing and marketing entities. Series A Preferred Units (B) 1.19% int. 7/21/94 $ 398,280 $ 19,008 ---------------------------------------------------------------------------------------------------------------------------------- HUSSEY SEATING CORPORATION A manufacturer of spectator seating products. Senior Secured Floating Rate Revolving Note due 2006 $ 428,207 6/12/96 428,207 428,206 Senior Secured Floating Rate Note due 2006 $ 652,500 ** 652,500 652,500 12% Senior Subordinated Note due 2006 $ 1,350,000 3/31/03 1,350,000 1,349,116 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 4,771 shs. *** 225,000 700,722 ---------------------------------------------------------------------------------------------------------------------------------- **6/12/96 AND 8/3/01. *** 6/12/96 AND 1/19/00. 2,655,707 3,130,544 ---------------------------------------------------------------------------------------------------------------------------------- INTEGRATION TECHNOLOGY SYSTEMS, INC. A manufacturer of steel protective computer and network systems for the industrial and office environments. 11% Senior Secured Note due 2007 $ 1,359,541 6/1/00 1,359,541 1,261,992 13% Senior Secured Note due 2007 $ 261,838 2/28/03 261,838 242,752 Common Stock (B) 228 shs. 6/1/00 262,200 131,100 ---------------------------------------------------------------------------------------------------------------------------------- 1,883,579 1,635,844 ---------------------------------------------------------------------------------------------------------------------------------- JASON, INC. A diversified manufacturing company serving various industrial markets. 13% Senior Subordinated Note due 2008 $ 963,687 8/4/00 879,492 910,874 14% Cumulative Redeemable Preferred Stock Series A (B) 289 shs. 8/4/00 289,224 269,735 Limited Partnership Interests of Saw Mill Capital Fund II, L.P. (B) 2.50% int. 8/3/00 886,451 443,253 Warrants, exercisable until 2008 and 2009, to purchase common stock at $.01 per share (B) 50,870 shs. 8/4/00 115,412 509 ---------------------------------------------------------------------------------------------------------------------------------- 2,170,579 1,624,371 ---------------------------------------------------------------------------------------------------------------------------------- KEEPSAKE QUILTING, INC. A seller of quilting fabrics, books, patterns, kits and notions to consumers. Senior Secured Floating Rate Revolving Note Due 2005 $ 91,732 6/16/00 91,732 91,420 Senior Secured Floating Rate Tranche A Note due 2007 $ 889,800 6/16/00 889,800 879,581 12% Senior Secured Tranche B Note due 2008 $ 550,392 6/16/00 519,108 572,408 Limited Partnership Interest of Riverside XVI Holding Company, L.P. (B) 5.29% int. 6/12/00 333,490 300,132 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 1,108 shs. 6/12/00 45,866 11 ---------------------------------------------------------------------------------------------------------------------------------- 1,879,996 1,843,552 ---------------------------------------------------------------------------------------------------------------------------------- 19 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- KENAN-ADVANTAGE TRANSPORT COMPANY A transporter of light petroleum, petrochemicals, lubricants and residual fuels. 12.5% Senior Subordinated Note due 2009 $ 1,817,435 4/30/01 $ 1,817,435 $ 1,807,665 Preferred Stock (B) 307 shs. 4/30/01 307,000 614,000 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 269 shs. 4/30/01 14 3 ---------------------------------------------------------------------------------------------------------------------------------- 2,124,449 2,421,668 ---------------------------------------------------------------------------------------------------------------------------------- LANCASTER LABORATORIES, INC. A laboratory testing operation in the United States. 12% Senior Subordinated Note due 2007 $ 1,669,643 9/25/00 1,434,677 1,703,036 Common Stock (B) 455,357 shs. 9/25/00 455,357 409,821 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 405,485 shs. 9/25/00 348,348 4,055 ---------------------------------------------------------------------------------------------------------------------------------- 2,238,382 2,116,912 ---------------------------------------------------------------------------------------------------------------------------------- LIH INVESTORS, L.P. A manufacturer 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 * 3,423,055 3,845,000 Common Stock (B) 5,800 shs. * 406,003 203,000 Warrant, exercisable until 2006, to purchase common stock at $.11 per share (B) 15,572 shs. * 602,127 545,020 ---------------------------------------------------------------------------------------------------------------------------------- *12/23/98 AND 1/28/99. 4,431,185 4,593,020 ---------------------------------------------------------------------------------------------------------------------------------- MEDASSIST, INC. A provider of patient eligibility and accounts receivable management services to hospitals and physician practices. 12% Senior Subordinated Note due 2011 $ 2,125,000 5/1/03 2,086,358 2,122,924 Warrant, exercisable until 2013, to purchase common stock at $.01 per share (B) 83,214 shs. 5/1/03 40,675 832 ---------------------------------------------------------------------------------------------------------------------------------- 2,127,033 2,123,756 ---------------------------------------------------------------------------------------------------------------------------------- MOSS, INC. A manufacturer and distributor of large display and exhibit structures. Senior Secured Floating Rate Revolving Note due 2005 $ 67,240 9/21/00 67,240 60,516 Senior Secured Floating Rate Tranche A Note due 2007 $ 1,109,460 9/21/00 1,109,460 998,513 12% Senior Secured Tranche B Note due 2008 $ 420,250 9/21/00 391,322 378,225 Limited Partnership Interest of Riverside Capital Appreciation Fund I, L.P. (B) 7.47% int. * 311,481 155,733 Warrant, exercisable until 2008, to purchase common stock at $100 per share (B) 463 shs. 9/21/00 40,344 5 ---------------------------------------------------------------------------------------------------------------------------------- * 9/20/00 AND 5/23/02. 1,919,847 1,592,992 ---------------------------------------------------------------------------------------------------------------------------------- 20 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- MUSTANG VENTURES COMPANY A natural gas gathering and processing operation located in Oklahoma and Texas. 11.5% Subordinated Note due 2011 $ 566,667 12/11/02 $ 471,201 $ 583,419 8.5% Redeemable Preferred Stock 155,833 shs. 12/11/02 1,108,087 1,110,297 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 18,425 shs. 12/11/02 553,539 414,562 ---------------------------------------------------------------------------------------------------------------------------------- 2,132,827 2,108,278 ---------------------------------------------------------------------------------------------------------------------------------- NEFF MOTIVATION, INC. A manufacturer and distributor of customized awards and sportswear to schools. 12.5% Senior Subordinated Note due 2011 $ 1,062,500 1/31/03 892,201 1,055,028 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 212 shs. 1/31/03 180,625 2 ---------------------------------------------------------------------------------------------------------------------------------- 1,072,826 1,055,030 ---------------------------------------------------------------------------------------------------------------------------------- NPC, INC. A manufacturer of flexible connectors and equipment used in the installation of sewers and storm drain pipelines. Senior Secured Floating Rate Revolving Note due 2006 $ 374,276 6/25/99 374,276 364,071 Senior Secured Floating Rate Note due 2006 $ 2,224,576 6/25/99 2,224,525 2,161,396 12% Senior Secured Tranche B Note due 2007 $ 978,814 6/25/99 895,896 975,205 Limited Partnership Interest of Riverside XIII Holding Company L.P. (B) 3.38% int. 6/11/99 296,883 221,438 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 201 shs. 6/25/99 142,373 2 ---------------------------------------------------------------------------------------------------------------------------------- 3,933,953 3,722,112 ---------------------------------------------------------------------------------------------------------------------------------- NYLONCRAFT, INC. A supplier of engineered plastic components for the automotive industry. 9% Senior Secured Note due 2009 $ 812,500 1/28/02 812,500 839,836 11.5% Senior Subordinated Note due 2012 $ 1,500,000 1/28/02 1,356,580 1,550,299 Common Stock (B) 312,500 shs. 1/28/02 312,500 326,250 Warrant, exercisable until 2012, to purchase common stock at $.01 per share (B) 243,223 shs. 1/28/02 162,045 251,736 ---------------------------------------------------------------------------------------------------------------------------------- 2,643,625 2,968,121 ---------------------------------------------------------------------------------------------------------------------------------- 21 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- OLYMPIC SALES, INC. A boat retailer in Washington state, Oregon, California and British Columbia. 12% Senior Subordinated Note due 2006 $ 2,774,000 8/7/98 $ 2,632,214 $ 2,431,692 12% Senior Subordinated Note due 2008 $ 307,071 2/9/00 283,097 250,539 Limited Partnership Interest of Riverside VIII, VIII-A and VIII-B Holding Company, L.P. (B) 1,555,729 uts. * 1,555,729 798,930 Warrants, exercisable until 2007and 2008, to purchase common stock at $.01 per share (B) 28,648 shs. ** 389,188 287 ---------------------------------------------------------------------------------------------------------------------------------- *8/7/98, 2/23/99, 12/22/99 AND 2/25/03. **8/7/98 AND 2/9/00. 4,860,228 3,481,448 ---------------------------------------------------------------------------------------------------------------------------------- PARADIGM PACKAGING, INC. A manufacturer 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 1,927,271 2,188,750 Membership Interests of MM/Lincap PPI Investments, Inc., LLC (B) 2.42% int. 12/21/00 265,625 265,625 ---------------------------------------------------------------------------------------------------------------------------------- 2,192,896 2,454,375 ---------------------------------------------------------------------------------------------------------------------------------- PGT INDUSTRIES, INC. A manufacturer of residential windows and patio doors and a provider of custom patio rooms and porch enclosures. 12% Senior Subordinated Notes due 2009 $ 1,965,000 1/29/01 1,764,366 1,965,000 Common Stock (B) 115 shs. 1/29/01 115,000 322,000 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 325 shs. 1/29/01 264,519 909,944 ---------------------------------------------------------------------------------------------------------------------------------- 2,143,885 3,196,944 ---------------------------------------------------------------------------------------------------------------------------------- PHARMACEUTICAL BUYERS, INC. A group purchasing organization which specializes in arranging and negotiating contracts for the purchase of pharmaceutical goods and medical equipment. 10.5% Senior Secured Note due 2005 $ 34,553 11/30/95 34,553 36,170 10.5% Senior Secured Convertible Note due 2005, convertible into common stock at $50,000 per share $ 195,000 11/30/95 195,000 303,868 Common Stock 6 shs. 11/30/95 337,500 478,101 ---------------------------------------------------------------------------------------------------------------------------------- 567,053 818,139 ---------------------------------------------------------------------------------------------------------------------------------- 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 1,845,914 2,210,000 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 351 shs. 10/25/02 296,747 4 ---------------------------------------------------------------------------------------------------------------------------------- 2,142,661 2,210,004 ---------------------------------------------------------------------------------------------------------------------------------- 22 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- POLYMER TECHNOLOGIES, INC./POLI-TWINE WESTERN, INC. A manufacturer of polypropylene twine for the hay bailing marketplace. ---------------------------------------------------------------------------------------------------------------------------------- 8% Senior Subordinated Note due 2010 (B) $ 743,750 9/27/02 $ 743,722 $ 260,312 ---------------------------------------------------------------------------------------------------------------------------------- PRECISION DYNAMICS, INC. A manufacturer of custom-designed solenoid valves and controls. Senior Secured Floating Rate Revolving Credit Facility due 2003 $ 896,500 7/22/96 896,500 896,500 Senior Secured Floating Rate Term Note due 2003 $ 1,149,150 7/22/96 1,149,150 1,149,150 12% Senior Secured Term Note due 2004 $ 489,000 7/22/96 481,739 489,000 8% Preferred Stock (B) 374 shs. 7/22/96 231,964 -- Common Stock (B) 599 shs. 7/22/96 28,978 -- Warrant, exercisable until 2004, to purchase common stock at $.01 per share (B) 322 shs. 7/22/96 97,800 -- ---------------------------------------------------------------------------------------------------------------------------------- 2,886,131 2,534,650 ---------------------------------------------------------------------------------------------------------------------------------- PROCESS CHEMICALS LLC A specialty chemical company that manufactures processed chemicals for the fertilizer, asphalt and concrete industries. Common Membership Interests 9,863 uts. * 4 -- ---------------------------------------------------------------------------------------------------------------------------------- *7/31/97 AND 1/4/99. 4 -- ---------------------------------------------------------------------------------------------------------------------------------- PROGRESSIVE SOFTWARE HOLDING, INC. A designer and manufacturer of point-of-sale monitors and keyboards used by retailers and restaurants. ---------------------------------------------------------------------------------------------------------------------------------- Common Stock (B) 729,946 shs. 7/9/02 3,500,003 13,139 ---------------------------------------------------------------------------------------------------------------------------------- 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. 8/12/94 100,350 -- Common Stock (B) 2,600 shs. ** 126,866 -- ---------------------------------------------------------------------------------------------------------------------------------- **11/14/01 AND 8/12/94. 227,216 -- ---------------------------------------------------------------------------------------------------------------------------------- PW EAGLE, INC. - O.T.C. An extruder of small and medium diameter plastic pipe and tubing in the United States. 14% Senior Subordinated Note due 2007 $ 3,574,133 9/16/99 3,571,115 2,501,892 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 197,040 shs. 9/16/99 1 432,503 ---------------------------------------------------------------------------------------------------------------------------------- 3,571,116 2,934,395 ---------------------------------------------------------------------------------------------------------------------------------- 23 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- ROYAL BATHS MANUFACTURING COMPANY A manufacturer and distributor of acrylic and cultured marble bathroom products. 12.5% Senior Subordinated Notes due 2011 $ 1,062,500 11/14/03 $ 940,422 $ 1,059,380 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 140 shs. 11/14/03 122,946 1 ---------------------------------------------------------------------------------------------------------------------------------- 1,063,368 1,059,381 ---------------------------------------------------------------------------------------------------------------------------------- SABEX 2002, INC. A Canadian specialty pharmaceutical company which manufactures and distributes generic injectable drugs and eye products. 12% Senior Subordinated Note due 2009 $ 2,125,000 4/19/02 2,009,744 2,210,000 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 51,088 shs. 4/19/02 138,052 246,449 ---------------------------------------------------------------------------------------------------------------------------------- 2,147,796 2,456,449 ---------------------------------------------------------------------------------------------------------------------------------- SAFETY SPEED CUT MANUFACTURING COMPANY, INC. A manufacturer of vertical panel saws and routers for the wood working industry. Senior Secured Floating Rate Revolving Note due 2006 $ 94,221 5/1/03 94,221 96,537 Senior Secured Floating Rate Tranche A Note due 2007 $ 1,743,088 6/2/99 1,743,088 1,743,088 12% Senior Secured Tranche B Note Due 2007 $ 1,130,652 6/2/99 1,130,652 1,130,652 Class B Common Stock (B) 1,480 shs. 6/2/99 256,212 495,007 ---------------------------------------------------------------------------------------------------------------------------------- 3,224,173 3,465,284 ---------------------------------------------------------------------------------------------------------------------------------- SELIG ACQUISITION CORPORATION A manufacturer of container sealing materials for bottles used in consumer products. 12% Senior Subordinated Note due 2009 $ 2,125,000 6/13/02 1,969,750 2,184,500 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 2,011 shs. 6/13/02 182,023 130,764 ---------------------------------------------------------------------------------------------------------------------------------- 2,151,773 2,315,264 ---------------------------------------------------------------------------------------------------------------------------------- SHELTER ACQUISITION, INC. A distributor of roofing supplies and products throughout the Midwest. 12.5% Senior Subordinated Note due 2008 $ 1,517,857 8/1/02 1,335,935 1,535,310 Common Stock (B) 758,929 shs. * 758,929 683,036 Warrant, exercisable until 2009, to purchase common stock at $.01 per share (B) 263,444 shs. 8/1/02 216,446 2,634 ---------------------------------------------------------------------------------------------------------------------------------- * 8/1/02 AND 1/17/03 2,311,310 2,220,980 ---------------------------------------------------------------------------------------------------------------------------------- SNYDER INDUSTRIES, INC. A manufacturer of proprietary rotationally molded polyethylene containers. 12.25% Senior Subordinated Note due 2007 $ 3,125,000 12/6/99 2,854,719 3,156,250 Warrant, exercisable until 2007, to purchase common stock at $.01 per share (B) 513 shs. 12/6/99 426,136 77,187 ---------------------------------------------------------------------------------------------------------------------------------- 3,280,855 3,233,437 ---------------------------------------------------------------------------------------------------------------------------------- 24 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- SPECIALTY FOODS GROUP, INC. A manufacturer and distributor of branded meat products. Limited Partnership Interest of MHD Holdings LLC (B) 1.43% int. 8/29/00 $ 525,155 $ 367,609 ---------------------------------------------------------------------------------------------------------------------------------- STRATEGIC EQUIPMENT & SUPPLY CORP., INC. A provider of kitchen and restaurant design, equipment fabrication and installation services. 12% Senior Subordinated Note due 2008 $ 3,875,000 1/14/00 3,445,195 3,861,681 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 106,539 shs. 1/14/00 658,751 -- ---------------------------------------------------------------------------------------------------------------------------------- 4,103,946 3,861,681 ---------------------------------------------------------------------------------------------------------------------------------- SYNVENTIVE EQUITY LLC A manufacturer of hot runner systems used in the plastic injection molding process. 12% Senior Subordinated Note due 2007 $ 1,841,667 8/21/03 1,762,024 1,850,989 Limited Partnership Interest (B) 0.61% int. 8/20/03 283,333 255,000 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 86,780 shs. 8/21/03 85,000 868 ---------------------------------------------------------------------------------------------------------------------------------- 2,130,357 2,106,857 ---------------------------------------------------------------------------------------------------------------------------------- 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 2/5/98 2,460,207 2,712,000 Common Stock (B) 630 shs. 2/4/98 630,000 570,856 Warrant, exercisable until 2006, to purchase common stock at $.01 per share (B) 444 shs. 2/5/98 368,832 402,313 ---------------------------------------------------------------------------------------------------------------------------------- 3,459,039 3,685,169 ---------------------------------------------------------------------------------------------------------------------------------- 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 1,120 shs. 7/25/96 1,120,000 896,000 common stock at $1,000 per share (B) Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 474 shs. 7/25/96 48,216 379,008 ---------------------------------------------------------------------------------------------------------------------------------- 1,728,216 1,807,008 ---------------------------------------------------------------------------------------------------------------------------------- TINNERMAN-PALNUT ENGINEERED COMPONENTS A manufacturer of precision engineered metal and plastic fasteners and assembly components. 12.75% Senior Subordinated Note due 2008 $ 1,875,000 12/6/01 1,439,687 1,893,750 Membership Interests (B) 1.34% int. 12/6/01 685,313 225,000 ---------------------------------------------------------------------------------------------------------------------------------- 2,125,000 2,118,750 ---------------------------------------------------------------------------------------------------------------------------------- 25 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- TOMAH HOLDINGS, INC. A producer of specialty chemicals. 16% Senior Subordinated Note due 2011 $ 1,416,667 12/8/03 $ 1,363,537 $ 1,381,572 16% Preferred Stock Series A (B) 37 shs. 12/8/03 631,630 616,282 Common Stock (B) 5,269 shs. 12/8/03 131,471 118,323 ---------------------------------------------------------------------------------------------------------------------------------- 2,126,638 2,116,177 ---------------------------------------------------------------------------------------------------------------------------------- TRONAIR, INC. A designer, engineer and manufacturer of ground support equipment for the business, commuter and commercial aviation markets. 10.5% Senior Secured Term Note due 2008 $ 1,974,022 1/20/00 1,974,022 1,936,643 12% Senior Subordinated Note due 2010 $ 1,326,500 1/20/00 1,255,055 1,267,989 Common Stock (B) 227,400 shs. 1/20/00 227,400 181,920 Warrant, exercisable until 2010, to purchase common stock at $1 per share (B) 260,563 shs. 1/20/00 98,540 2,606 ---------------------------------------------------------------------------------------------------------------------------------- 3,555,017 3,389,158 ---------------------------------------------------------------------------------------------------------------------------------- TRUSTILE DOORS, INC. A manufacturer and distributor of interior doors. 12.5% Senior Subordinated Note due 2010 $ 1,062,500 4/11/03 973,262 1,059,772 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 5,781 shs. 4/11/03 95,625 58 ---------------------------------------------------------------------------------------------------------------------------------- 1,068,887 1,059,830 ---------------------------------------------------------------------------------------------------------------------------------- TVI, INC. A retailer of used clothing in the United States, Canada and Australia. 15.971% Senior Subordinated Note due 2008 $ 2,092,038 5/2/00 2,048,945 2,207,923 Common Stock (B) 354,167 shs. 5/2/00 354,167 247,917 ---------------------------------------------------------------------------------------------------------------------------------- 2,403,112 2,455,840 ---------------------------------------------------------------------------------------------------------------------------------- U S M HOLDINGS CORP. A provider of facility maintenance services to retail and corporate clients with multiple locations. 12% Senior Subordinated Note due 2011 $ 1,789,474 8/6/03 1,499,360 1,775,450 Preferred Stock (B) 3,345 shs. 8/6/03 334,494 301,045 Common Stock (B) 1,032 shs. 8/6/03 1,032 929 Warrant, exercisable until 2011, to purchase common stock at $.01 per share (B) 949 shs. 8/6/03 298,198 9 ---------------------------------------------------------------------------------------------------------------------------------- 2,133,084 2,077,433 ---------------------------------------------------------------------------------------------------------------------------------- VICTORY VENTURES LLC An acquirer of controlling or substantial interests in other entities. Series A Preferred Units (B) 0.13% int. 12/2/96 1 2 ---------------------------------------------------------------------------------------------------------------------------------- 26 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 Shares, Units Warrants, Ownership Acquisition CORPORATE RESTRICTED SECURITIES: (A) CONTINUED or Principal Amount Date Cost Fair Value ---------------------------------------------------------------------------------------------------------------------------------- VITEX PACKAGING, INC. A manufacturer of specialty packaging, primarily envelopes and tags used on tea bags. 12% Senior Subordinated Note due 2008 $ 2,045,265 12/18/00 $ 1,921,422 $ 2,069,808 Limited Partnership Interest of Riverside VI Holding Company, L.P. (B) 4.80% int. * 351,323 316,186 Limited Partnership Interest of Riverside Capital Appreciation Fund II L.P. (B) 1.72% int. 12/18/00 79,735 71,762 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 308 shs. ** 227,729 3 ---------------------------------------------------------------------------------------------------------------------------------- *12/30/97 AND 9/9/99. **1/2/98 AND 12/18/00. 2,580,209 2,457,759 ---------------------------------------------------------------------------------------------------------------------------------- WASHINGTON INVENTORY SERVICES, INC. A provider of physical inventory taking and other related services to retailers. 12.5% Senior Subordinated Note due 2008 $ 1,646,881 11/3/00 1,610,978 1,639,892 Senior Preferred Stock (B) 4,692 shs. 11/1/00 469,160 443,296 Class B Common Stock (B) 8,959 shs. 11/1/00 8,959 8,063 Warrant, exercisable until 2008, to purchase common stock at $.01 per share (B) 3,979 shs. 11/3/00 49,804 40 ---------------------------------------------------------------------------------------------------------------------------------- 2,138,901 2,091,291 ---------------------------------------------------------------------------------------------------------------------------------- WEASLER HOLDINGS LLC A manufacturer of mechanical power transmission components for the agricultural, lawn and turf industries. 13.25% Senior Subordinated Note due 2010 $ 2,023,810 2/4/03 1,827,070 2,067,277 Limited Partnership Interest (B) 1.55% int. 2/3/03 101,190 80,952 Warrant, exercisable until 2010, to purchase common stock at $.01 per share (B) 256 shs. 2/4/03 209,829 3 ---------------------------------------------------------------------------------------------------------------------------------- 2,138,089 2,148,232 ---------------------------------------------------------------------------------------------------------------------------------- W E C COMPANY, INC. A maker of attachments for prime moving equipment. Common Stock (B) 5,938 shs. 12/31/01 800,000 159,990 ---------------------------------------------------------------------------------------------------------------------------------- WICOR AMERICAS, INC. A manufacturer of cellulose based insulation products, systems and services for electrical transformer equipment manufacturers. 20% Senior Subordinated Secured Note due 2009 $ 2,352,484 11/9/01 2,431,334 2,320,749 ---------------------------------------------------------------------------------------------------------------------------------- TOTAL PRIVATE PLACEMENT INVESTMENTS $168,337,778 $149,314,351 ================================================================================================================================== 27 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 INTEREST DUE SHARES OR CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE PRINCIPAL AMOUNT COST FAIR VALUE -------------------------------------------------------------------------------------------------------------------------------- RULE 144A SECURITIES - 12.43%: (A) BONDS - 11.02% A E S Corporation 9.000% 05/15/15 $ 200,000 $ 200,000 $ 226,000 A E S Corporation 8.750 05/15/13 200,000 200,000 223,500 Calpine Corporation 8.750 07/15/13 500,000 465,000 487,500 Chesapeake Energy Corporation 6.875 01/15/16 500,000 494,885 515,000 Cincinnati Bell, Inc. 8.375 01/15/14 100,000 100,000 107,500 Dana Credit Corporation 8.375 08/15/07 500,000 500,000 537,500 Dex Media West 9.875 08/15/13 500,000 500,000 581,250 Dollar Financial Group 9.750 11/15/11 600,000 600,000 621,000 Dominos, Inc. 8.250 07/01/11 400,000 397,112 428,500 Esterline Technologies 7.750 06/15/13 200,000 200,000 215,000 Gencorp, Inc. 9.500 08/15/13 400,000 400,000 415,000 General Nutrition Center 8.500 12/01/10 800,000 800,000 820,000 Great Lakes Dredge & Dock Corporation 7.750 12/15/13 250,000 250,000 257,188 Huntsman LLC 11.625 10/15/10 500,000 494,075 510,000 IMAX Corporation 9.625 12/01/10 500,000 500,000 525,625 Intrawest Corporation 7.500 10/15/13 500,000 500,000 520,000 Koppers, Inc. 9.875 10/15/13 1,200,000 1,200,000 1,323,000 Land O' Lakes, Inc. 9.000 12/15/10 1,500,000 1,500,000 1,511,250 M S X International, Inc. 11.000 10/15/07 350,000 347,004 304,500 Majestic Star Casino LLC 9.500 10/15/10 500,000 500,000 512,500 Metaldyne Corporation 10.000 11/01/13 185,000 185,000 186,850 Mortons Restaurant Group 7.500 07/01/10 450,000 385,757 423,000 N R G Energy, Inc. 8.000 12/15/13 700,000 700,000 735,875 Nalco Company 7.750 11/15/11 500,000 500,000 535,000 North American Energy Partners 8.750 12/01/11 400,000 400,000 420,000 P G & E Corporation 6.875 07/15/08 400,000 400,000 433,000 Pinnacle Food Holding 8.250 12/01/13 450,000 450,000 465,750 Quality Distribution LLC 9.000 11/15/10 150,000 150,000 156,938 Quintiles Transnational Corporation 10.000 10/01/13 500,000 500,000 540,000 Rent-Way, Inc. 11.875 06/15/10 300,000 294,756 334,500 Rhodia SA 8.875 06/01/11 500,000 490,000 460,000 River Rock Entertainment 9.750 11/01/11 300,000 295,953 322,500 Sheridan Acquisition Corporation 10.250 08/15/11 500,000 493,335 530,625 Ship Finance International Ltd. 8.500 12/15/13 1,500,000 1,500,000 1,485,000 Tekni-Plex, Inc. 8.750 11/15/13 1,500,000 1,500,000 1,563,750 Telex Communications, Inc. 11.500 10/15/08 500,000 500,000 531,250 United Rentals, Inc. 7.750 11/15/13 625,000 625,000 638,281 Von Hoffman Press, Inc. 10.250 03/15/09 200,000 209,203 213,000 Vought Aircraft Industries 8.000 07/15/11 725,000 730,678 740,406 ----------- ---------- ---------- TOTAL BONDS $20,585,000 20,457,758 21,357,538 =========== ========== ========== 28 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 INTEREST DUE SHARES OR CORPORATE RESTRICTED SECURITIES:(A) (CONTINUED) RATE DATE PRINCIPAL AMOUNT COST FAIR VALUE -------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK - 0.00% Jordan Telecom Products (B) 70 $ 14,000 $ -- --------- --------- TOTAL COMMON STOCK 14,000 -- --------- --------- CONVERTIBLE BONDS - 1.36% Advanced Micro Devices, Inc. 4.750% 02/01/22 $ 500,000 $ 397,449 $ 510,000 Centerpoint Energy, Inc. 3.750 05/15/23 350,000 350,000 371,875 Cymer, Inc. 3.500 02/15/09 850,000 850,000 980,688 F E I Company 5.500 08/15/08 175,000 175,000 173,687 Invitrogen Corporation 2.250 12/15/06 425,000 425,000 446,781 Viropharma, Inc. 6.000 03/01/07 215,000 147,282 145,125 ---------- ---------- ---------- TOTAL CONVERTIBLE BONDS $2,515,000 2,344,731 2,628,156 ========== ========== ========== CONVERTIBLE PREFERRED STOCK - 0.05% D T Industries, Inc. (B) 20,000 $1,000,000 $ 100,000 ---------- ---------- TOTAL CONVERTIBLE PREFERRED 1,000,000 100,000 ---------- ---------- WARRANTS - 0.00% Winsloew Furniture, Inc. (B) 900 $ 9 $ 9 ---------- ---------- TOTAL WARRANTS 9 9 TOTAL RULE 144A SECURITIES 23,816,498 24,085,703 ========== ========== TOTAL CORPORATE RESTRICTED SECURITIES $192,154,276 $173,400,054 ============ ============ 29 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 INTEREST DUE SHARES OR MARKET CORPORATE PUBLIC SECURITIES - 14.26%: (A) RATE DATE PRINCIPAL AMOUNT COST VALUE -------------------------------------------------------------------------------------------------------------------------------- BONDS - 9.09% A E P Industries, Inc. 9.875% 11/15/07 $ 350,000 $ 333,375 $ 351,750 Activant Solutions, Inc. 10.500 06/15/11 400,000 394,768 430,500 Alamosa Delaware, Inc 11.000 07/31/10 325,000 331,018 352,625 American Media Operation, Inc. 8.875 01/15/11 200,000 200,000 217,000 Bally Total Fitness Holding Corporation 9.875 10/15/07 200,000 191,000 182,000 Bausch & Lomb, Inc. 6.950 11/15/07 500,000 523,125 546,250 C S C Holdings, Inc. 7.625 04/01/11 500,000 502,438 526,250 Dana Corporation 9.000 08/15/11 500,000 529,129 602,500 Del Monte Corporation 8.625 12/15/12 225,000 225,000 246,375 Dynegy Holding, Inc. 6.875 04/01/11 500,000 422,500 460,625 Flextronics International Ltd. 6.500 05/15/13 400,000 400,000 414,000 G F S I, Inc. 9.625 03/01/07 500,000 433,678 460,625 Host Marriott L.P. 8.375 02/15/06 500,000 521,945 533,125 Lodgenet Entertainment Co. 9.500 06/15/13 425,000 425,000 465,375 Lyondell Chemical Co. 9.500 12/15/08 400,000 380,000 418,000 M G M Mirage, Inc. 6.000 10/01/09 500,000 502,427 513,750 Manitowoc Company, Inc. 7.125 11/01/13 200,000 200,000 206,750 Neff Corporation 10.250 06/01/08 170,000 168,062 115,600 Nextel Communications Corporation 7.375 08/01/15 400,000 392,000 430,000 Nextel Partners, Inc. 8.125 07/01/11 1,000,000 1,000,000 1,065,000 Numatics, Inc. 9.625 04/01/08 550,000 540,200 440,688 Offshore Logistics, Inc. 6.125 06/15/13 450,000 450,000 441,000 Rayovac Corporation 8.500 10/01/13 200,000 200,000 212,000 Rent-A-Center, Inc. 7.500 05/01/10 400,000 400,000 422,000 S P X Corporation 6.250 06/15/11 400,000 400,000 411,000 Service Corp International 6.000 12/15/05 500,000 504,501 510,000 Sports Club Co. 11.375 03/15/06 600,000 582,000 564,000 Steelcase, Inc. 6.375 11/15/06 500,000 513,780 522,871 Tekni-Plex, Inc. 12.750 06/15/10 550,000 533,000 599,500 Telex Communications, Inc. (B) 0.000 11/15/06 471,915 206,820 235,958 Tenet Healthcare Corporation 6.375 12/01/11 500,000 482,500 480,000 Tenneco Automotive, Inc. 10.250 07/15/13 400,000 400,000 455,000 Triton P C S, Inc. 8.500 06/01/13 550,000 550,000 591,250 Tyco International Group SA 6.375 10/15/11 350,000 346,500 374,063 United Refining Co. 10.750 06/15/07 830,000 830,000 664,000 United Rentals, Inc. 9.000 04/01/09 350,000 343,000 370,562 Williams Companies, Inc. 8.625 06/01/10 500,000 500,000 561,250 Williams Scotsman, Inc. 9.875 06/01/07 500,000 492,500 506,250 Winsloew Furniture, Inc. 12.750 08/15/07 900,000 879,472 720,000 ----------- ---------- ---------- TOTAL BONDS $17,696,915 17,229,738 17,619,492 =========== ========== ========== 30 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 INTEREST DUE SHARES OR MARKET CORPORATE PUBLIC SECURITIES:(A) (CONTINUED) RATE DATE PRINCIPAL AMOUNT COST VALUE -------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK - 4.05% Aspen Insurance Holdings Ltd. (B) 1,900 $ 42,750 $ 47,139 Central Freight Lines, Inc. (B) 14,100 211,500 250,275 China Life Insurance Co. (B) 1,600 29,888 52,752 D T Industries, Inc. (B) 178,876 1,168,093 220,017 EOS International, Inc. (B) 100,000 300,000 44,000 Franklin Bank Corporation (B) 4,400 63,800 83,600 H C I Direct, Inc. (B) 1,000 -- -- International Steel Group (B) 32,700 915,600 1,273,665 Nelnet, Inc. (B) 13,100 275,100 293,440 Orbitz, Inc. (B) 15,900 413,400 368,880 PepsiAmericas, Inc. 92,145 2,006,365 1,577,522 Rent-Way, Inc. (B) 92,866 916,263 760,573 Supreme Industries, Inc. (B) 115,722 267,325 705,904 Surebeam Corporation (B) 40,555 17,507 8,517 T G C Industries (B) 6,361 9,497 4,452 Transmontaigne, Inc. (B) 333,326 1,109,176 2,149,953 --------- --------- TOTAL COMMON STOCK 7,746,264 7,840,689 --------- --------- CONVERTIBLE BONDS - 1.03% CommScope, Inc. 4.000% 12/15/06 $ 185,000 $ 179,550 $ 177,137 Duke Energy Corporation 1.750 05/15/23 400,000 400,000 413,000 F E I Company 5.500 08/15/08 340,000 305,150 337,450 Mediacom Communications Corporation 5.250 07/01/06 400,000 400,000 387,000 S C I Systems, Inc. 3.000 03/15/07 500,000 427,862 472,500 Triquint Semiconductor, Inc. 4.000 03/01/07 225,000 168,442 216,000 ---------- --------- --------- TOTAL CONVERTIBLE BONDS $2,050,000 1,881,004 2,003,087 ========== --------- --------- CONVERTIBLE PREFERRED STOCK - 0.09% Alamosa Holdings, Inc. 500 $ 158,973 $ 172,500 --------- --------- TOTAL CONVERTIBLE PREFERRED STOCK 158,973 172,500 --------- --------- PREFERRED STOCK - 0.00% Telex Communications, Inc. 17,707 $ 1 $ 177 --------- --------- TOTAL PREFERRED STOCK 1 177 --------- --------- WARRANTS - 0.00% Telex Communications, Inc. 698 $ 7 $ 7 --------- --------- TOTAL WARRANTS 7 7 --------- --------- TOTAL CORPORATE PUBLIC SECURITIES $27,015,987 $27,635,952 =========== =========== 31 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 INTEREST DUE SHARES OR MARKET SHORT-TERM SECURITIES - 3.22% RATE DATE PRINCIPAL AMOUNT COST VALUE -------------------------------------------------------------------------------------------------------------------------------- COMMERCIAL PAPER - 3.22% Countrywide Home Loans, Inc. 1.080% 01/12/04 $ 3,175,000 $ 3,173,952 $ 3,173,952 Walt Disney Company 1.120 01/16/04 3,075,000 3,073,565 3,073,565 ----------- ----------- ----------- TOTAL SHORT-TERM SECURITIES $ 6,250,000 $ 6,247,517 $ 6,247,517 =========== ----------- ----------- TOTAL INVESTMENTS 106.96% $225,417,780 $207,283,523 ============ ------------ Other Assets 8.32 16,129,704 Liabilities (15.28) (29,627,113) ------ ------------ TOTAL NET ASSETS 100.00% $193,786,114 ====== ============ (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, 2003 FAIR VALUE/ INDUSTRY CLASSIFICATION MARKET VALUE ----------------------------------------------------------- AEROSPACE - 0.49% Esterline Technologies $ 215,000 Vought Aircraft Industries 740,406 ----------------------------------------------------------- $ 955,406 ----------------------------------------------------------- AUTOMOBILE - 6.50% America's Body Company, Inc. 1,750,001 Dana Corporation 602,500 Gencorp, Inc. 415,000 Jason, Inc. 1,624,371 LIH Investors, L.P. 4,593,020 Metaldyne Corporation 186,850 Nyloncraft, Inc. 2,968,121 Tenneco Automotive, Inc. 455,000 ----------------------------------------------------------- $ 12,594,863 ----------------------------------------------------------- BEVERAGE, DRUG & FOOD - 3.09% Beta Brands Ltd 35,051 Cains Foods, L.P. 113,276 Del Monte Corporation 246,375 Dominos, Inc. 428,500 Land O' Lakes, Inc. 1,511,250 Mortons Restaurant Group 423,000 PepsiAmericas, Inc. 1,577,522 Pharmaceutical Buyers, Inc. 818,139 Pinnacle Foods Holdings 465,750 Specialty Foods Group, Inc. 367,609 ----------------------------------------------------------- $ 5,986,472 ----------------------------------------------------------- BROADCASTING & ENTERTAINMENT - 0.71% C S C Holdings, Inc. 526,250 Lodgenet Entertainment Co. 465,375 Mediacom Communications Corporation 387,000 ----------------------------------------------------------- $ 1,378,625 ----------------------------------------------------------- BUILDINGS & REAL ESTATE - 5.87% Adorn, Inc. 2,311,731 Eagle Window & Door Holding Co. 2,575,112 P G T Industries, Inc. 3,196,944 Shelter Acquisition, Inc. 2,220,980 TruStile Doors, Inc. 1,059,830 ----------------------------------------------------------- $ 11,364,597 ----------------------------------------------------------- CARGO TRANSPORT - 3.16% Central Freight Lines, Inc. 250,275 Kenan Advantage Transport Company 2,421,668 Quality Distribution LLC 156,938 Ship Finance International Ltd. 1,485,000 Tidewater Holdings, Inc. 1,807,008 ----------------------------------------------------------- $ 6,120,889 ----------------------------------------------------------- CHEMICAL, PLASTICS & RUBBER - 2.49% Capital Specialty Plastics, Inc. $ 403 Huntsman LLC 510,000 Koppers Inc. 1,323,000 Lyondell Chemical Company 418,000 Process Chemicals LLC -- Rhodia SA 460,000 Tomah Holdings, Inc. 2,116,177 ----------------------------------------------------------- $ 4,827,580 ----------------------------------------------------------- CONSUMER PRODUCTS - 5.78% Colibri Holdings Corporation 1,852,583 Euro-Pro Corporation 2,163,282 G F S I, Inc. 460,625 H C I Direct, Inc. -- Neff Motivation, Inc. 1,055,030 Rayovac Corporation 212,000 Royal Baths Manufacturing Company 1,059,381 The Tranzonic Companies 3,685,169 Winsloew Furniture, Inc. 720,009 ----------------------------------------------------------- $ 11,208,079 ----------------------------------------------------------- CONTAINERS, PACKAGING & GLASS - 6.70% A E P Industries, Inc. 351,750 Paradigm Packaging, Inc. 2,454,375 Selig Acquisition Corporation 2,315,264 Snyder Industries, Inc. 3,233,437 Tekni-Plex, Inc. 2,163,250 Vitex Packaging, Inc. 2,457,759 ----------------------------------------------------------- $ 12,975,835 ----------------------------------------------------------- DISTRIBUTION - 8.10% Corvest Group, Inc. 3,826,736 Fasteners For Retail, Inc. 6,709,697 G C-Sun Holdings L.P. 1,293,750 Strategic Equip & Supply Corp., Inc. 3,861,681 ----------------------------------------------------------- $ 15,691,864 ----------------------------------------------------------- DIVERSIFIED/CONGLOMERATE, MANUFACTURING - 5.53% Activant Solutions Inc 430,500 Coining of America LLC 2,073,007 Dexter Magnetics Technologies, Inc. 1,588,801 Evans Consoles, Inc. 1,150,214 Great Lakes Dredge & Dock Corporation 257,188 S P X Corporation 411,000 Tinnerman-Palnut Engineered Components 2,118,750 Tyco International Group SA 374,063 Wicor Americas, Inc. 2,320,749 ----------------------------------------------------------- $ 10,724,272 ----------------------------------------------------------- 33 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 FAIR VALUE/ INDUSTRY CLASSIFICATION MARKET VALUE ----------------------------------------------------------- DIVERSIFIED/CONGLOMERATE, SERVICE - 7.86% CapeSuccess LLC $ 5,862 Diversco, Inc./DHI Holdings, Inc. 1,113,655 Dwyer Group, Inc. 2,031,198 Examination Management Services, Inc. 3,004,997 Hamilton Funeral Services Centers, Inc. 380,271 Lancaster Laboratories, Inc. 2,116,912 Moss, Inc. 1,592,992 M S X International, Inc. 304,500 Service Corp International 510,000 U S M Holdings Corp. 2,077,433 Washington Inventory Services, Inc. 2,091,291 ----------------------------------------------------------- $ 15,229,111 ----------------------------------------------------------- ELECTRONICS - 6.05% A E S Corporation 449,500 Calpine Corporation 487,500 Directed Electronics, Inc. 6,638,491 Flextronics International Ltd. 414,000 N R G Energy, Inc. 735,875 Precision Dynamics, Inc. 2,534,650 Progressive Software Holding, Inc. 13,139 S C I Systems, Inc. 472,500 ----------------------------------------------------------- $ 11,745,655 ----------------------------------------------------------- FARMING & AGRICULTURE - 0.13% Polymer Technologies, Inc./Poli-Twine Western, Inc. 260,312 Protein Genetics, Inc. -- ----------------------------------------------------------- $ 260,312 ----------------------------------------------------------- FINANCIAL SERVICES - 1.13% Aspen Insurance Holdings Ltd. 47,139 China Life Insurance Co. 52,752 Dana Credit Corporation 537,500 Dollar Financial Group 621,000 East River Ventures I, L.P. 27,148 Franklin Bank Corporation 83,600 Highgate Capital LLC 19,008 Nelnet, Inc. 293,440 Victory Ventures LLC 2 Williams Scotsman, Inc. 506,250 ----------------------------------------------------------- $ 2,187,839 ----------------------------------------------------------- HEALTHCARE, EDUCATION & CHILDCARE - 1.62% Quintiles Transnational Corporation 540,000 MedAssist, Inc. 2,123,756 Tenet Healthcare Corporation 480,000 ----------------------------------------------------------- $ 3,143,756 ----------------------------------------------------------- HOME & OFFICE FURNISHINGS, HOUSEWARES, AND DURABLE CONSUMER PRODUCTS - 1.89% Hussey Seating Corporation $ 3,130,544 Steelcase, Inc. 522,871 ----------------------------------------------------------- $ 3,653,415 ----------------------------------------------------------- LEISURE, AMUSEMENT, ENTERTAINMENT - 2.75% Host Marriott L.P. 533,125 Bally Total Fitness Holding Corporation 182,000 IMAX Corporation 525,625 Intrawest Corporation 520,000 Keepsake Quilting, Inc. 1,843,552 M G M Mirage, Inc. 513,750 Majestic Star Casino LLC 512,500 Orbitz, Inc. 368,880 River Rock Entertainment 322,500 ----------------------------------------------------------- $ 5,321,932 ----------------------------------------------------------- MACHINERY - 12.92% Ames True Temper Group 2,167,487 C & M Conveyor, Inc. 2,331,189 D T Industries, Inc. 320,017 Integration Technology Systems, Inc. 1,635,844 Manitowoc Company, Inc. 206,750 N P C, Inc. 3,722,112 Numatics, Inc. 440,688 P W Eagle, Inc. 2,934,395 Safety Speed Cut Manufacturing Company, Inc. 3,465,284 Surebeam Corporation 8,517 Synventive Equity LLC 2,106,857 Tronair, Inc. 3,389,158 W E C Company, Inc. 159,990 Weasler Holdings LLC 2,148,232 ----------------------------------------------------------- $ 25,036,520 ----------------------------------------------------------- MEDICAL DEVICES/BIOTECH - 3.01% Bausch & Lomb, Inc. 546,250 Beacon Medical Products, Inc. 1,866,122 Coeur, Inc. 1,116,715 D H D Healthcare, Inc. 1,851,755 Invitrogen Corporation 446,781 ----------------------------------------------------------- $ 5,827,623 ----------------------------------------------------------- MINING, STEEL, IRON & NON PRECIOUS METALS - 0.71% Better Minerals & Aggregates 108,991 International Steel Group 1,273,665 ----------------------------------------------------------- $ 1,382,656 ----------------------------------------------------------- 34 MASSMUTUAL CORPORATE INVESTORS CONSOLIDATED SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 FAIR VALUE/ INDUSTRY CLASSIFICATION MARKET VALUE ----------------------------------------------------------- OIL AND GAS - 4.34% Centerpoint Energy, Inc. $ 371,875 Chesapeake Energy Corporation 515,000 Dynegy Holdings, Inc. 460,625 Mustang Ventures Company 2,108,278 North American Energy Partners 420,000 Offshore Logistics, Inc. 441,000 Supreme Industries, Inc. 705,904 T G C Industries, Inc. 4,452 Transmontaigne, Inc. 2,149,953 United Refining Company 664,000 Williams Companies, Inc. 561,250 ----------------------------------------------------------- $ 8,402,337 ----------------------------------------------------------- PHARMACEUTICALS - 1.84% Enzymatic Therapy, Inc. 961,567 Sabex 2002, Inc. 2,456,449 Viropharma, Inc. 145,125 ----------------------------------------------------------- $ 3,563,141 ----------------------------------------------------------- PUBLISHING/PRINTING - 0.80% American Media Operation, Inc. 217,000 Dex Media West 581,250 Sheridan Acquisition Corporation 530,625 Von Hoffman Press, Inc. 213,000 ----------------------------------------------------------- $ 1,541,875 ----------------------------------------------------------- RETAIL STORES - 6.30% E O S International, Inc. 44,000 General Nutrition Center 820,000 Neff Corporation 115,600 Olympic Sales, Inc. 3,481,448 P H I Holding Company 2,210,004 Rent-A-Center, Inc. 422,000 Rent-Way, Inc. 1,095,073 Sports Club Co. 564,000 TVI, Inc. 2,455,840 United Rentals, Inc. 1,008,843 ----------------------------------------------------------- $ 12,216,808 ----------------------------------------------------------- TECHNOLOGY - 1.37% Advanced Micro Devices, Inc. 510,000 Cymer, Inc. 980,688 Delstar Holding Corporation 432,315 F E I Company 511,137 TriQuint Semiconductor, Inc. 216,000 ----------------------------------------------------------- $ 2,650,140 ----------------------------------------------------------- TELECOMMUNICATIONS - 1.89% Alamosa Holdings, Inc. $ 525,125 Cincinnati Bell, Inc. 107,500 CommScope, Inc. 177,137 Jordan Telecom Products -- Nextel Communications Corporation 430,000 Nextel Partners, Inc. 1,065,000 Telex Communications, Inc. 767,392 Triton P C S, Inc. 591,250 ----------------------------------------------------------- $ 3,663,404 ----------------------------------------------------------- UTILITIES - 0.71% Duke Energy Corporation 413,000 Nalco Company 535,000 P G & E Corporation 433,000 ----------------------------------------------------------- $ 1,381,000 ----------------------------------------------------------- TOTAL CORPORATE RESTRICTED AND PUBLIC SECURITIES - 103.74% $201,036,006 =========================================================== MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 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. David L. Babson & Company Inc. ("Babson"), a majority owned 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, conversion 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 the 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. During 2003, the Trust's Board of Trustees considered whether changes to the Trust's Bylaws were necessary or appropriate in response to the Sarbanes-Oxley Act of 2002. At their July, 2003 meeting, the Trust's Trustees approved the following changes to the Trust's Bylaws: SECTION 4.7 For the purposes of (1) any standard of care applicable to a Trustee in the discharge of his or her duties as a trustee and (2) indemnification of a Trustee pursuant to Article IV, Section 4.3 of the Declaration of Trust, the conduct of the Trustee shall be evaluated solely by reference to a hypothetical reasonable person, without regard to any special expertise, knowledge or other qualifications of the Trustee. In particular, and without limiting the generality of the foregoing, neither the determination that a Trustee is an "audit committee financial expert" nor the knowledge, experience or other qualifications underlying such a determination shall result in that Trustee being held to a standard of care that is higher than the standard that would be applicable in the absence of such a determination or such knowledge, experience or qualification, nor shall such a determination or such knowledge, experience or other qualification impose any duties, obligations or liabilities that are greater than would obtain in the absence of such a determination or such knowledge, experience or qualification. SECTION 4.8 For the purposes of the determinations by the Trustees and/or opinion of independent legal counsel referred to in Article IV, Section 4.3 of the Declaration of Trust and for the purposes of the determinations by the Trustees and/or opinion of independent legal counsel referred to in Article IV, Section 4.4 of the Declarations of Trust, the Trustees acting on the matter, or the independent legal counsel, as the case may be, shall be entitled to rely on a rebuttable presumption that the relevant Trustee, officer, employee or agent (each a "Covered Person") (1) has acted in good faith and in the reasonable belief that his or her actions were in the best interests of the Trust and (2) has not engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such Covered Person's office or agency. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Trust in the preparation of its 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 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 its acquisition 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. 36 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 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 Babson's reports 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 consolidated financial statements include restricted securities valued at $149,314,351 (77.05% of net assets) as of December 31, 2003 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, 2003, 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. 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. The Trust has elected to accrue, for financial reporting purposes, certain premiums and discounts which are required to be accrued for federal income tax purposes. 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 consolidated 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: No provision for federal taxes on net investment income and short-term capital gains is considered necessary for the Trust because it is 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 that Trustees either designate the net realized long-term gains as undistributed and pay the federal capital gains taxes thereon, or distribute all or a portion of such net gains. 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. In 2003, the Trust reclassed ($36,038) from undistributed net investment income to additional paid in capital and $3,000,000 from undistributed net realized loss on investments to undistributed net investment income to more accurately portray the Trust's financial position. The reclass has no impact on net asset value. 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, 2003, the MMCI Subsidiary Trust accrued federal and state income taxes in the amount of $1,761,469 for net income and realized gains on investments held in the MMCI Subsidiary Trust. 37 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 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. 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 Industrial 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 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 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 Adjustments for the quarters ended March 31, June 30, September 30, and December 31, 2003 were as follows: Quarters Performance Ended Adjustment Amount ----- ---------- ------ March 31, 2003 0.0625% $ 113,048 June 30, 2003 0.0625% $ 116,310 September 30, 2003 0.0625% $ 122,721 December 31, 2003 0.0625% $ 122,006 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, 2003, 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 a 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 up-front 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, 2003, there were no outstanding loans drawn against the revolving credit facility. For the year ended December 31, 2003, the Trust incurred $37,500 in expense related to the undrawn portion. 38 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 5. PURCHASES AND SALES OF INVESTMENTS For the Year Ended 12/31/2003 -------------------------------------------------------------------------------- Cost of Investments Acquired -------------------------------------------------------------------------------- Corporate restricted securities $ 90,666,673 Corporate public securities 18,073,893 Short-term securities 506,714,869 -------------------------------------------------------------------------------- Proceeds from Sales or Maturities -------------------------------------------------------------------------------- Corporate restricted securities $ 97,053,926 Corporate public securities 17,370,295 Short-term securities 511,419,831 The aggregate cost of investments was the same for financial reporting and federal income tax purposes as of December 31, 2003. The net unrealized depreciation of investments for financial reporting and federal tax purposes as of December 31, 2003 is $18,134,257 and consists of $18,591,903 appreciation and $36,726,160 depreciation. 6. QUARTERLY RESULTS OF INVESTMENT OPERATIONS (UNAUDITED) Amount Per Share -------------------------------------------------------------------------------- March 31, 2003 -------------------------------------------------------------------------------- Investment income $ 4,242,541 Net investment income 2,995,578 $ 0.34 Net realized and unrealized gain on investments 5,781,368 0.66 -------------------------------------------------------------------------------- June 30, 2003 -------------------------------------------------------------------------------- Investment income 4,011,172 Net investment income 2,789,107 0.31 Net realized and unrealized gain on investments 5,592,226 0.63 -------------------------------------------------------------------------------- September 30, 2003 -------------------------------------------------------------------------------- Investment income 4,528,390 Net investment income 3,083,600 0.35 Net realized and unrealized gain on investments (net of taxes) 9,891,110 1.11 -------------------------------------------------------------------------------- December 31, 2003 -------------------------------------------------------------------------------- Investment income 5,302,179 Net investment income 3,936,293 0.44 Net realized and unrealized gain on investments (net of taxes) 3,814,754 0.43 39 MASSMUTUAL CORPORATE INVESTORS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 7. AGGREGATE REMUNERATION PAID TO OFFICERS, TRUSTEES AND THEIR AFFILIATED PERSONS During 2003, the Trust paid its Trustees aggregate remuneration of $133,060. 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. Mr. Reese is an interested person due to his employment by MassMutual and Babson. Mr. Joyal retired from Babson as of June 1, 2003 and, prior to his retirement, served as Babson's President. Accordingly, the Trust classifies Messers. Reese and Joyal as "interested persons" of the Trust. All of the Trust's officers are employees of Babson or MassMutual. Pursuant to the Investment Services Contract, the Trust does not compensate its officers who are employees of Babson or MassMutual. MassMutual and Babson 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 during 2003, other than amounts payable to Babson pursuant to the Investment Services Contract. During 2003, 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 Reports to Shareholders $ 2,262 Preparation of Certain of the Trust's Shareholder communications 1,630 Preparation of the Trust's Annual Proxy Statements 373 ---------- $ 4,265 ---------- 8. CONTINGENCIES The Trust, together with other investors including MassMutual, is a plaintiff in litigation connected 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 7 liquidation proceedings, have pleaded guilty to criminal fraud charges. Initially, 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, KPMG LLP, is in its preliminary stages. The parties to this lawsuit, including the Trust, have recently agreed to submit the matters which are the subject of the lawsuit to a non-binding mediation proceeding. The Trust is unable to estimate any potential recovery from this lawsuit as of December 31, 2003. 40 MASSMUTUAL CORPORATE INVESTORS CHANGE IN INDEPENDENT ACCOUNTANTS During 2003, the Trust, Babson and MassMutual solicited proposals for their independent audit and tax engagements from the four nationally recognized public accounting firms (including Deloitte & Touche LLP ("D&T") and KPMG LLP ("KPMG")). The Trust's Audit Committee and its Board of Trustees determined that, based on KPMG's more favorable fee structure, engaging KPMG was in the best interests of the Trust. Effective January 1, 2004, and for the fiscal year ending December 31, 2004, the Trust's Audit Committee and Board of Trustees have appointed KPMG as the Trust's independent auditors replacing D&T. Babson and MassMutual also engaged KPMG to perform certain audit, tax and other services for them. During its two most recently completed fiscal years, the Trust had no disagreements with D&T concerning any matter of accounting principles or practices, consolidated financial statement disclosure or auditing scope and procedure and D&T never advised the Trust that: (1) the Trust's internal controls were unreliable; (2) the representations of the Trust's management were unreliable or that D&T was unwilling to be associated with the consolidated financial statements prepared by the Trust's management; (3) D&T needed to expand significantly the scope of its audits (and D&T never, in fact, so expanded such audit scope); (4) D&T became aware of any information that materially impacted the fairness or reliability of either a previously issued audit report or such report's underlying consolidated financial statements or that caused D&T to cease reliance on the assertions of the Trust's management related to such consolidated financial statements; and (5) an issue existed related to any of D&T's audit reports or their underlying consolidated financial statements were resolved other than to the satisfaction of D&T. 41 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* (48) Trustee 3 years/10 months Executive Vice President and 48 Trustee, Chairman (since Chief Investment Officer 1999) and President MassMutual Life Ins. Co. Chairman 1 year/7 months (since 1999) of MassMutual; (1993-1999) of the Trust; 1295 State Street President (since 2003), Director (since 1995), Springfield, MA 01111 (since 1999) Director and CEO (since MassMutual Corporate Value 2000), and President (2000- Partners Limited 2001) of Babson; Chief (investment company); Executive Director (1997- President (1994- 1999), 1999), Senior Vice President Chairman and Trustee (1993-1997) of MassMutual. (since 1999), MassMutual Institutional Funds; President (1993-1999), Chairman and Trustee (since 1999), MML Series Investment Fund; Director (since 1993), MML Baystate Life Insurance Company; 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), President (1998-2001) and Chairman (since 2001), MMCI Subsidiary Trust and MMPI Subsidiary Trust; Trustee, Chairman (since 1999), and President (1993-1999), MassMutual Participation Investors (closed-end investment 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 a Director, President and CEO of Babson. 42 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** (59) Trustee 1 year/10 months President (2001-2003), 48 President (1999-2003) and Managing Director (2000- Trustee (since 2003) of MassMutual (since 2003) 2001) and Executive Director the Trust; Director (since Corporate Investors (1999-2000) of Babson; 1996), Antares Capital 1500 Main Street Executive Director (1997- Corporation (bank loan Suite 1100 1999) of MassMutual. syndication); Director Springfield, MA 01115 (since 1996), First Israel Mezzanine Investors Ltd. (general partner and manager of The Israel Mezzanine Fund, L.P.); Director (since 2003), Pemco Aviation Group, Inc.; Director (since 2003), MML Series Investment Fund (an open-end investment Company sub-advised by Babson); Director (since 2003), MassMutual Institutional Fund (an open-end investment company sub-advised by Babson); 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. 43 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 ------------------------------------------------------------------------------------------------------------------------------------ DONALD E. BENSON (73) Trustee 3 years/2 years, Executive Vice President and 2 Director (since 1997), (since 1986) 10 months Director (since 1992), MAIR Holdings, Inc. MassMutual Marquette Financial (commuter airline holding Corporate Investors Companies (financial company); Director (since 1500 Main Street services); Partner (since 1997), National Mercantile Suite 1100 1996), Benson Family Limited Bancorp (bank holding Springfield, MA 01115 Partnership No. 1 and Benson company) and Mercantile Family Limited Partnership National Bank; Trustee No. 2 (investment (since 1986), MassMutual partnerships); Partner (since Participation Investors 1987), Benson, Pinckney, (closed-end investment Oates Partnership company advised by (building partnership). Babson). ------------------------------------------------------------------------------------------------------------------------------------ DONALD GLICKMAN (70) Trustee 3 years/2 years, Chairman (since 1992), 2 Director (1988-2000), (since 1992) 10 months Donald Glickman and CalTex Industries, Inc. MassMutual Company, Inc. (investment (manufacturer of windows); Corporate Investors banking); Partner (since Director (since 1984), 1500 Main Street 1992), J.F. Lehman & Co. Monro Muffler Brake, Inc. Suite 1100 (private investments). (automobile repair Springfield, MA 01115 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 (since 2002), 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). 44 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 ------------------------------------------------------------------------------------------------------------------------------------ MARTIN T. HART (68) Trustee 3 years/10 months Private Investor; President 13 Director (since 1997), (since 1991) and Director (since 1983), T-Netix Inc. MassMutual H Corporation. (communications company); Corporate Investors Director (since 1999), 1500 Main Street ValueClick Inc. (internet Suite 1100 advertising company); Springfield, MA 01115 Director (since 2002), Spectranetics Corp. (medical device company); Director (1990-1998), PNB Financial Group; Director (1992-2002), Schuler Homes, Inc.; Director (1993 to 2000), Optical Security Group; Director (1994-1999), Ardent Software Inc.; Director (since 1996), PJ America/PJ United; Director (since 1994), Houston Pizza Venture; Director (since 1994), PJ Iowa; Director (since 1998), PJ Nor-Cal; Director (1998-2002), Vail Banks Inc.; Trustee (since 1994), Regis University; Director (since 1999), Stephany's Chocolate; Director (since 2002), Interactive Telesis, Inc.; Director (since 2000), Digital Directions, Inc.; Partner (since 1986), HFTF L.L.C. (wholesale nursery and garden center); Trustee (since 1991), MassMutual Participation Investors (closed-end investment company advised by Babson) ------------------------------------------------------------------------------------------------------------------------------------ STEVEN A. KANDARIAN (51) Trustee 3 years/ 1 year, Executive Director 2 Trustee (since 2002), The (since 2002) 10 months (since 2001), Pension Benefit DLB Fund Group (open-end MassMutual Guaranty Corp., (a Federal investment company advised Corporate Investors pension agency); Managing by Babson); Trustee (since 1500 Main Street Director (1993-2001), 2002), MassMutual Suite 1100 Orion Partners, L.P. (a private Participation Investors (a Springfield, MA 01115 equity fund). closed-end investment company advised by Babson). 45 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 ------------------------------------------------------------------------------------------------------------------------------------ JACK A. LAUGHERY (69) Trustee 3 years/1 year, President and Partner (since 2 Director (since 1993), (since 1996) 10 months 1996), Laughery Investments. Papa John's International MassMutual (food service companies); Corporate Investors Director (since 1994), 1500 Main Street Houston Pizza Venture LLC Suite 1100 (pizza restaurant); Springfield, MA 01115 Partner (since 1987), Coastal Lodging (hotels); Part Owner (since 1998), 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 (66) Trustee 3 years/1 year, Dean (since 1996), 2 Director (since 1997), The (since 1998) 10 months Barney School of Business, Advest Bank; Trustee MassMutual University of Hartford. (since 1993), Aetna Series Corporate Investors Funds (investment 1500 Main Street company); Director (since Suite 1100 1992), Aetna Variable Springfield, MA 01115 Series Funds; Trustee (since 1998), MassMutual Participation Investors (a closed-end investment company advised by Babson). 46 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 (39) President 1 year/7 months President (since 2003) and Vice President (2002-2003) of the Trust; Director (since 2003) and Managing Director (since 2000) of Babson; MassMutual Managing Director (1993-2000) of MassMutual; Trustee and President Corporate Investors (since 2003), MMCI Subsidiary Trust and MMPI Subsidiary Trust; 1500 Main Street President (since 2003), Vice President (2002-2003), MassMutual Suite 1100 Participation Investors. Springfield, MA 01115 ------------------------------------------------------------------------------------------------------------------------------------ CLIFFORD M. NOREEN (46) MassMutual Vice President 1 year/7 months Vice President (since 1993) of the Trust; Managing Director (since Corporate Investors 2000) of Babson; Managing Director (1996-1999) of MassMutual; Vice 1500 Main Street President (since 1993), MassMutual Participation Investors. Suite 1100 Springfield, MA 01115 ------------------------------------------------------------------------------------------------------------------------------------ STEPHEN L. KUHN (57) Vice President 1 year/7 months Vice President (since 1989) and Secretary (since 1980) of the and Secretary Trust; General Counsel and Clerk (since 2000) of Babson; Senior MassMutual Vice President (since 1999), Deputy General Counsel (since 1998), Corporate Investors and Assistant Secretary (since 1996) of MassMutual; Secretary 1500 Main Street (since 1998), MMCI Subsidiary Trust and MMPI Subsidiary Trust; Vice Suite 1100 President and Secretary (since 1988) of MassMutual Participation Springfield, MA 01115 Investors. ------------------------------------------------------------------------------------------------------------------------------------ CHARLES C. MCCOBB, JR. (60) Vice President 1 year/7 months Chief Financial Officer (since 1998) and Vice President (since and Chief 1997) of the Trust; Managing Director (since 2000) of Babson; MassMutual Financial Officer Managing Director (1997-1999) of MassMutual; Trustee, Vice Corporate Investors President, Treasurer and Chief Financial Officer (since 1998), MMCI 1500 Main Street Subsidiary Trust and MMPI Subsidiary Trust; Chief Financial Officer Suite 1100 (since 1998) and Vice-President (since 1997), MassMutual Springfield, MA 01115 Participation Investors. ------------------------------------------------------------------------------------------------------------------------------------ JOHN T. DAVITT, JR. (36) Comptroller 1 year/7 months Comptroller (since 2001) of the Trust; Director (since 2000) of Babson; Associate Director (1997-2000) of MassMutual; Comptroller MassMutual (since 2001), MassMutual Participation Investors. Corporate Investors 1500 Main Street Suite 1100 Springfield, MA 01115 ------------------------------------------------------------------------------------------------------------------------------------ JAMES M. ROY (41) Treasurer 1 year/7 months Treasurer (since 2003) and Associate Treasurer (1999-2003) of the Trust; Director (since 2000) and Associate Director (1996-2000) of MassMutual Babson; Controller (since 2003), MMCI Subsidiary Trust and MMPI Corporate Investors Subsidiary Trust; Treasurer (since 2003), Associate Treasurer 1500 Main Street (1999-2003), MassMutual Participation Investors. Suite 1100 Springfield, MA 01115 47 MASSMUTUAL CORPORATE INVESTORS INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF MASSMUTUAL CORPORATE INVESTORS We have audited the accompanying consolidated statement of assets and liabilities of MassMutual Corporate Investors (the "Trust"), as of December 31, 2003 (including the consolidated schedule of investments as of December 31, 2003), and the related consolidated statements of operations and cash flows for the year then ended, changes in net assets for each of the two years in the period then ended and the consolidated selected financial highlights for each of the five years in the period then ended. These consolidated financial statements and consolidated selected financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these consolidated financial statements and consolidated selected financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements and consolidated selected financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. Our procedures included confirmation of securities owned as of December 31, 2003 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements and consolidated selected financial highlights referred to above present fairly, in all material respects, the financial position of MassMutual Corporate Investors as of December 31, 2003, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the consolidated selected financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Deloitte & Touche LLP -------------------------------- New York, New York February 6, 2004 48 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. A shareholder 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. [PHOTO OF MEMBERS OF THE BOARD OF TRUSTEES] MEMBERS OF THE BOARD OF TRUSTEES (LEFT TO RIGHT): Donald Glickman, Chairman, Donald Glickman & Company, Inc. Martin T. Hart*, Private Investor Jack A. Laughery, President and Partner, Laughery Investments Steven A. Kandarian, Executive Director, Pension Benefit Guaranty Corp. Donald E. Benson*, Executive Vice President and Director, Marquette Financial Companies Corine T. Norgaard*, Dean, Barney School of Business, University of Hartford Stuart H. Reese, Executive Vice President and Chief Investment Officer, Massachusetts Mutual Life Insurance Company Robert E. Joyal, Retired President of David L. Babson & Company Inc. * Member of the Audit Committee -------------------------------------------------------------------------------- OFFICERS Stuart H. Reese Stephen L. Kuhn Chairman Vice President and Secretary Roger W. Crandall Michael P. Hermsen President Vice President Charles C. McCobb, Jr. Mary Wilson Kibbe Vice President and Vice President Chief Financial Officer Michael L. Klofas Richard E. Spencer, II Vice President Vice President Richard C. Morrison James M. Roy Vice President Treasurer Clifford M. Noreen John T. Davitt, Jr. Vice President Comptroller -------------------------------------------------------------------------------- [LOGO] MASSMUTUAL CORPORATE INVESTORS DB1035 204 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.massmutual.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 Year Ended Year Ended December 31, December 31, 2003 2002 ---------- ---------- Audit Fees $ 60,500 $ 39,600 Audit-Related Fees 5,500 0 Tax Fees 7,400 7,400 All Other Fees 0 0 ---------- ---------- Total Fees $ 73,400 $ 47,000 ========== ========== NON-AUDIT FEES BILLED TO BABSON AND MASSMUTUAL Year Ended Year Ended December 31, December 31, 2003 2002 ---------- ---------- Audit-Related Fees $ 340,000 $ 367,405 Tax Fees 35,100 18,350 All Other Fees 5,000 22,104 ---------- ---------- Total Fees $ 380,100 $ 407,859 ========== ========== The category "Audit Related Fees" reflects fees billed by Deloitte & Touche LLP for services related to the audit and other assurance services performed in connection with the audit engagements of the Registrant, Babson and 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 Deloitte & Touche LLP ("D&T") for various non-audit and non-tax services rendered to the Registrant, Babson and MassMutual, such as product development, database and analysis training, and tax compliance and planning. 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 2003, the Registrant's Audit Committee approved all of the services rendered to the Registrant by D&T 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 D&T 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 the Registrant's Trustees 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 Charter, which is available on the Registrant's website, www.massmutual.com/mci. The present members of the Audit Committee are Donald E. Benson and Martin T. Hart, and Corine T. Norgaard. ITEM 6. [Reserved]. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED END MANAGEMENT INVESTMENT COMPANIES. The Registrant's Board of Trustees delegated proxy voting responsibilities relating to voting securities held by the Registrant to its investment adviser, David L. Babson & Company Inc.("Babson") at the July 18, 2003 meeting of the Registrant's Board of Trustees. 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.massmutual.com/mci. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not Applicable for this filing. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Applicable for this filing. ITEM 10. 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 this 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 have been no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred 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 11. EXHIBITS. (a) 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. (b) 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-99.302CERT for the Section 302 certifications and EX-99.906CERT for the Section 906 certifications. (c) 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. 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 5, 2004 ---------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Roger W. Crandall ---------------------------------- Roger W. Crandall, President ---------------------------------- Date: March 5, 2004 ---------------------------------- By: /s/ Charles C. McCobb, Jr. ---------------------------------- Charles C. McCobb, Jr., Vice President, and Chief Financial Officer ---------------------------------- Date: March 5, 2004 ------------------------------