UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A-1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-10683
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MBNA Corporation
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(Exact name of registrant as specified in its charter)
Maryland 52-1713008
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Wilmington, Delaware 19884-0141
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(Address of principal executive offices) (Zip Code)
(800) 362-6255
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(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------------------------------------ ---------------------------
Common Stock, $.01 par value New York Stock Exchange
7 1/2% Cumulative Preferred Stock, Series A New York Stock Exchange
Adjustable Rate Cumulative Preferred Stock,
Series B New York Stock Exchange
MBNA Capital A 8.278% Capital Securities,
Series A, guaranteed by MBNA Corporation
to the extent described therein New York Stock Exchange
MBNA Capital B Floating Rate Capital
Securities, Series B, guaranteed by MBNA
Corporation to the extent described therein New York Stock Exchange
MBNA Capital C 8.25% Trust Originated Preferred
Securities, Series C, guaranteed by MBNA
Corporation to the extent described therein New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Pursuant to Rule 15d-21 of the Securities and Exchange Commission under the
Securities Act of 1934 (as amended), the Registrant amends its Annual Report on
Form 10-K for the fiscal year ended December 31, 2000, to file the financial
statements required by Form 11-K with respect to the MBNA Corporation 401(k)
Plus Savings Plan.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
Index to Financial Statements and Supplemental Schedule
Page
----
(A) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE:
FINANCIAL STATEMENTS:
Report of Independent Auditors......................................... 1
Statements of Net Assets Available for Benefits (audited).............. 2
Statement of Changes in Net Assets Available for Benefits (audited).... 3
Notes to Financial Statements (audited)................................ 4
SUPPLEMENTAL SCHEDULE:
Schedule H, line 4i-Schedule of Assets (Held At End of Year) (audited). 8
(B) EXHIBITS
Exhibit 23: Consent of Independent Auditors........................... 10
(C) SIGNATURE.............................................................. 11
REPORT OF INDEPENDENT AUDITORS
To the Pension and 401(k) Plan Committee of MBNA Corporation
We have audited the accompanying statements of net assets available for
benefits of MBNA Corporation 401(k) Plus Savings Plan as of December 31, 2000
and 1999, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2000. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2000 and 1999, and the changes in its net assets available for
benefits for the year ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedule
of assets (held at end of year) as of December 31, 2000 is presented for the
purpose of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Baltimore, Maryland
June 8, 2001
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
----------------------------
2000 1999
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ASSETS
Investments at fair value:
Common trust funds............................ $ 89,042,850 $ 107,411,626
Interest in registered investment companies... 181,643,875 134,337,765
Short-term investment fund.................... 5,697,905 2,356,083
Common Stock of MBNA Corporation.............. 225,404,482 197,729,897
Guaranteed investment contracts............... 53,090,764 33,185,167
Loans receivable.............................. 25,153,658 21,865,593
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Total investments........................... 580,033,534 496,886,131
Receivable for investment sold.................. - 2,954,760
Income receivable............................... 786,103 607,717
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Total assets................................ 580,819,637 500,448,608
LIABILITIES
Accrued expenses and other liabilities.......... 52,390 112,986
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Total liabilities........................... 52,390 112,986
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Net assets available for benefits........... $ 580,767,247 $ 500,335,622
============= =============
==============================================================================
See accompanying notes to the financial statements.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended
December 31, 2000
------------------
ADDITIONS
Investment income:
Interest........................................... $ 3,045,800
Income from common trust funds..................... 822,628
Income from interest in registered investment
companies......................................... 19,494,071
Dividends from Common Stock of
MBNA Corporation.................................. 2,037,073
Interest income from loans receivable.............. 2,146,768
------------------
Total investment income.......................... 27,546,340
Contributions:
Employer........................................... 18,826,853
Employee........................................... 44,368,048
------------------
Total additions.................................. 90,741,241
DEDUCTIONS
Payments to participants............................. 26,373,173
Administrative expenses.............................. 732,241
------------------
Total deductions................................. 27,105,414
Net realized and unrealized appreciation in
fair value of investments........................... 16,795,798
------------------
Net additions.................................... 80,431,625
Net assets available for benefits at
beginning of year................................... 500,335,622
------------------
Net assets available for benefits at
end of year......................................... $ 580,767,247
==================
==============================================================================
See accompanying notes to the financial statements.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
The MBNA Corporation 401(k) Plus Savings Plan's ("the Plan") financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States on the accrual basis, which requires MBNA
Corporation's ("the Corporation") management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
Investments, except for loans receivable and guaranteed investment contracts
which are "fully benefit responsive," are stated at aggregate fair value. The
guaranteed investment contracts generally have stated maturities and are valued
at the amount contributed plus interest earned less withdrawals. Certain of
these contracts contain early withdrawal penalties except to fulfill benefits
elected by plan participants in accordance with the terms of the contract. A
"fully benefit responsive" guaranteed investment contract provides a liquidity
guarantee by a financially responsible third party of principal and previously
accrued interest for liquidations, transfers, loans, or hardship withdrawals
initiated by plan participants exercising their rights to withdraw, borrow, or
transfer funds under the terms of the Plan. A traditional guaranteed
investment contract is an investment contract in which the Plan enters into a
contract with an independent third party which provides the Plan with a call on
the contract issuer's assets in the event of default. A synthetic guaranteed
investment contract is an investment contract in which the Plan owns the
underlying assets. With synthetic guaranteed investment contracts, the Plan
purchases a benefit responsive wrapper contract issued by an independent third
party that provides market and cash flow risk protection to the Plan. A
guaranteed investment contract which is "fully benefit responsive" is recorded
at contract value. Securities traded on a national securities exchange are
valued at the last reported sales price on the last business day of the year.
Investments traded in the over-the-counter market and listed securities for
which no sale was reported on that date are valued at the last reported bid
price. Interest in registered investment companies and investments in common
trust funds are stated at the Plan's interest in the fair value of the
underlying assets in the registered investment companies and common trust
funds. Loans receivable are stated at the amount borrowed by the participant
less principal repayments, which approximates fair value.
The difference between fair value and cost of investments held, and net
realized gain or loss on sale of investments (difference between the proceeds
received and the average cost of investments sold), is reflected in the
Statement of Changes in Net Assets Available for Benefits as net realized and
unrealized appreciation in fair value of investments.
Benefits are recognized when paid. Administrative expenses of $732,241 in
2000, including amounts paid to The Northern Trust Company, for acting as
trustee and custodian of the Plan's investments, are paid by the Plan.
NOTE 2: DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan which qualifies under section 401(k) of
the Internal Revenue Code ("IRC"). Employees can invest up to a maximum of 12%
of eligible earnings on a pre-tax basis (up to $10,500 per year for 2000 and up
to $10,000 per year for 1999) and a maximum of 10% of eligible earnings on an
after-tax basis. Combined employee contributions, including after-tax
contributions limited to 10%, may not exceed 17% of eligible earnings. The
Corporation automatically contributes 1% of eligible earnings for each
participant and matches the first 6% of either before-tax or after-tax employee
contributions at fifty cents on the dollar. Both employee and employer
contributions for highly compensated employees have been limited to ensure the
passage of non-discrimination tests.
All contributions to the Plan are immediately 100% vested. Pre-tax
contributions, as well as the automatic 1% contribution by the Corporation, are
not available for withdrawal before attaining age 59-1/2 or termination of
employment. Pre-tax contributions may also be available in certain
circumstances of financial hardship.
Subject to certain limitations, participants may elect to withdraw all or part
of their after-tax and matching contributions plus earnings from the Plan. In
addition, participants can borrow money against their savings in the Plan.
The Plan provides eight investment options. A participant's contribution may be
invested in 5% increments in any of the available funds. In addition, not more
than 25% of new contributions may be invested in the MBNA Stock Fund.
Participants have the option to change the contributions and investments once a
month or as determined by the Pension and 401(k) Plan Committee. The Plan's
investment options are:
Fixed Income Fund
Bond Fund
Diversified Fund
Index Fund
Growth Fund
MBNA Stock Fund
Aggressive Growth Fund
Moderate Aggressive Fund
In addition to the eight investment options, borrowings by participants against
their savings in the Plan and related activity are reported in the Loan Fund.
Although it has not expressed any intention to do so, the Corporation has the
right to terminate the Plan in whole or in part at any time; however, in such
circumstances, the participants would receive the full value of their account.
Information about the Plan, including distribution provisions and withdrawal
limitations, is contained in the Summary Plan Description. Copies of the
Summary Plan Description are available from the Benefits and Compensation
Department of the Corporation.
NOTE 3: INVESTMENTS
The net realized and unrealized (depreciation) appreciation in fair value of
the Plan's investments was as follows:
For the Year Ended
December 31, 2000
------------------
Common trust funds................................. $ (8,338,757)
Interest in registered investment companies........ (35,102,620)
Common Stock of MBNA Corporation................... 60,237,175
------------------
Total net realized and unrealized
appreciation in fair value of investments....... $ 16,795,798
==================
The fair value of individual investments that represent 5% or more of the
Plan's net assets available for benefits at December 31, 2000 and 1999 are as
follows:
2000 1999
---------------------- ----------------------
Units Fair Value Units Fair Value
--------- ------------ --------- ------------
Common trust funds:
Barclays Global Equity Index
Fund......................... 2,197,755 $ 81,207,048 2,237,443 $ 90,974,452
Interest in registered
investment companies:
American Balanced Fund........ 3,003,014 46,456,634 2,829,813 40,805,897
MFS Research Fund............. 2,960,293 70,987,829 2,134,761 61,609,202
PBHG Growth Fund.............. 1,381,999 42,980,182 - -
Common Stock of MBNA
Corporation.................... 6,102,321 225,404,482 7,256,143 197,729,897
The Plan's investments in guaranteed investment contracts in the aggregate for
the years ended December 31, 2000 and 1999 were as follows:
2000 1999
--------------- ---------------
Contract value............................ $ 53,090,764 $ 33,185,167
Fair value................................ 53,090,764 33,185,167
Weighted average yield.................... 6.86% 6.09%
Crediting interest rates ranging from..... 5.74% to 7.67% 5.99% to 6.37%
Maturity dates ranging from (a)........... 2001 to 2005 2000 to 2003
(a) The synthetic GICs do not have a stated maturity and are periodically
reviewed by the investment manager to ensure the contracts remain
reasonable in comparison to the market.
The guaranteed investment contracts held by the Plan at December 31, 2000 and
1999 had Standard and Poor's ratings ranging from AA to AAA. The Plan holds
fixed rate and variable rate guaranteed investment contracts. The variable
rate guaranteed investment contracts reprice quarterly. The fair value of the
guaranteed investment contracts approximates book value.
NOTE 4: TRANSACTIONS WITH PARTIES-IN-INTEREST
For the year ended December 31, 2000, the Plan earned investment income of
$184,967 on its investments administered by the trustee. In addition, for the
year ended December 31, 2000, the Plan earned dividend income of $2,037,073 on
shares of MBNA Corporation Common Stock held by the Plan. As of December 31,
2000 and 1999, the Plan also had a dividend receivable of $485,413 and
$518,356, respectively, on shares of MBNA Corporation Common Stock held by the
Plan.
Fees paid during the year for services rendered to the Plan by parties-in-
interest were based on customary and reasonable rates for such services.
NOTE 5: INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated June 12, 1995, stating that the Plan is qualified under Section 401(a) of
the IRC and, therefore, the related trust is exempt from taxation. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Administrator believes the Plan is being
operated in compliance with the applicable requirements of the IRC and,
therefore, believes the Plan is qualified and the related trust is tax exempt.
NOTE 6: RECONCILIATION TO FORM 5500
The financial statements for the years ended December 31, 2000 and 1999 differ
from the Form 5500 filed with the IRS in that net gains and losses and
unrealized appreciation and depreciation of investment assets have been
combined in the financial statements as net realized and unrealized
appreciation in fair value of investments rather than shown separately as on
schedule H, lines 2b(4) and 2b(5) of Form 5500. In addition, a liability for
benefits payable of $90,332 and $34,788 at December 31, 2000 and 1999,
respectively, has been recorded on schedule H, line 2i of the Form 5500, and
has not been recorded in these financial statements.
NOTE 7: NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("Statement No. 133"), establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and hedging
activities. In June 1999, Statement of Financial Accounting Standards No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of FASB Statement No. 133" ("Statement No. 137") was issued and
extended the effective date for Statement No. 133 to all fiscal quarters of all
fiscal years beginning after June 15, 2000. In June 2000, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities-an Amendment of FASB Statement No. 133" ("Statement No. 138").
Statement No. 138 amended the accounting and reporting standards of Statement
No. 133 for certain derivative instruments and certain hedging activities. The
Plan's implementation of Statement No. 133, as amended by Statement No. 137 and
Statement No. 138, on January 1, 2001 did not have a material impact on the
Plan's financial statements.
ATTACHMENT TO FORM 5500
EIN: 52-1713008
PN: 001
SCHEDULE H, LINE 4i
SCHEDULE OF ASSETS (HELD AT END OF YEAR) (1)
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
December 31, 2000
Identity of Issue, Borrower, Description of Current
Lessor or Similar Party Investment Value
- ----------------------------------------------- ---------------- ------------
Common trust funds:
Barclay Global Equity
Index Fund.................................. 2,197,755 units $ 81,207,048
SEI Stable Asset Fund........................ 7,835,802 units 7,835,802
------------
Total common trust funds................... 89,042,850
Interest in registered
investment companies:
American Balanced Fund....................... 3,003,014 units 46,456,634
MFS Research Fund............................ 2,960,293 units 70,987,829
Bond Fund of America......................... 448,677 units 5,738,573
PBHG Growth Fund............................. 1,381,999 units 42,980,182
Baron Asset Fund............................. 284,623 units 15,480,657
------------
Total interest in registered
investment companies...................... 181,643,875
Short-term investment fund..................... 5,697,905
Common Stock of MBNA Corporation*.............. 6,102,321 units 225,404,482
Guaranteed investment contracts ("GIC"):
Peoples Security GIC......................... 6.370% 3,621,375
Sun America GIC.............................. 6.360% 3,190,973
John Hancock GIC............................. 5.740% 5,046,857
The Travelers GIC (#17695)................... 7.430% 5,390,510
The Travelers GIC (#17640)................... 7.590% 3,098,387
The Travelers GIC (#16864)................... 6.000% 1,763,290
New York Life GIC............................ 7.670% 3,096,894
Monumental GIC............................... 7.520% 3,106,372
Identity of Issue, Borrower, Description of Current
Lessor or Similar Party Investment Value
- ---------------------------------------------- ---------------- ------------
Dwight Target 2 Fund........................ 5,219,384
CDC-FP wrapper contract..................... (113,840)
------------
CDC-FP synthetic GIC....................... 7.200% 5,105,544
Dwight Target 5 Fund........................ 20,128,179
State Street wrapper contract............... (457,617)
------------
State Street Bank & Trust synthetic GIC.... 6.815% 19,670,562
------------
Total guaranteed investment contracts..... 53,090,764
Loans receivable due from participants*....... 25,153,658
------------
Total investments......................... $580,033,534
============
(1) Historical cost omitted as all investments are participant-directed
* Party-in-interest
EXHIBIT 23: CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following Registration
Statements of MBNA Corporation, and in the related Prospectuses, of our report
dated June 8, 2001 included in Form 10-K/A-1, with respect to the financial
statements and schedules of the MBNA Corporation 401(k) Plus Savings Plan for
the year ended December 31, 2000:
Number 33-41936 on Form S-8 dated July 22, 1991
Number 33-41895 on Form S-8 dated July 24, 1991
Number 33-50498 on Form S-3 (as amended by Post-Effective
Amendment No. 1) dated August 28, 1992
Number 33-71640 on Form S-8 dated November 15, 1993
Number 33-76278 on Form S-3 (as amended by Amendment No. 1)
dated April 8, 1994
Number 33-95438 on Form S-8 dated August 4, 1995
Number 33-95600 on Form S-3 (as amended by Pre-Effective
Amendment No. 1) dated September 1, 1995
Number 333-17187 on Form S-3 dated December 3, 1996
Number 333-15721 on Form S-3 (as amended by Post-Effective
Amendment No. 1) dated December 10, 1996
Number 333-21181 on Form S-4 (as amended by Amendment
No. 1) dated February 25, 1997
Number 333-06824 on Form S-8 dated April 22, 1997
Number 333-47179 on Form S-3 dated April 6, 1998
Number 333-51477 on Form S-8 dated April 30, 1998
Number 333-74919 on Form S-3 (as amended by Post-Effective
Amendment No. 1) dated March 24, 1999
Number 333-79987 on Form S-8 dated June 4, 1999
Number 333-44422 on Form S-8 dated August 24, 2000
Number 333-45814 on Form S-3 dated September 14, 2000
/s/ Ernst & Young LLP
Baltimore, Maryland
June 27, 2001
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
MBNA CORPORATION
Date: June 29, 2001 By: /s/ M. Scot Kaufman
-------------------------------
M. Scot Kaufman
Senior Executive Vice President
and Chief Financial Officer