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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 for the fiscal year ended December 31, 1995 or
( ) TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from __________ to __________
Commission File No. 1-9583
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
MBIA INC.
Employees Profit Sharing and 401 (K) Salary
Deferral Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
MBIA Inc.
113 King Street
Armonk, N. Y. 10504
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MBIA INC.
EMPLOYEES PROFIT SHARING AND
401(K) SALARY DEFERRAL PLAN
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1995 AND 1994
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
FINANCIAL STATEMENTS
INDEX
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Pages
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Report of Independent Accountants .................................... 2
Financial Statements:
Statements of Net Assets Available for Plan
Benefits as of December 31, 1995 and 1994 ..................... 3
Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
December 31, 1995 and 1994 .................................... 4
Notes to Financial Statements ................................... 5-10
Signatures .......................................................... 11
1
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REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
TO THE PLAN ADMINISTRATOR OF
MBIA INC. EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN:
We have audited the accompanying statements of net assets available for plan
benefits of the MBIA Inc. Employees Profit Sharing and 401(K) Salary Deferral
Plan as of December 31, 1995 and 1994 and the related statements of changes in
net assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the plan administrator. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 plan benefits of the MBIA
Inc. Employees Profit Sharing and 401(K) Salary Deferral Plan as of December 31,
1995 and 1994, and the changes in net assets available for plan benefits for the
years then ended in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
-----------------------------
New York, New York
June 10, 1996.
2
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31 December 31
1995 1994
------------ ------------
Assets:
Allocated share of Master Trust
net assets, at fair value $32,599,172 $22,946,984
Receivables:
Employer contributions 107 ---
Employee contributions --- 33,679
----------- -----------
Total assets $32,599,279 $22,980,663
Liabilities:
Other liabilities --- 3,936
----------- -----------
Net assets available for
plan benefits $32,599,279 $22,976,727
=========== ===========
The accompanying notes are an integral part of the
financial statements.
3
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Years ended December 31
----------------------------
1995 1994
------------ ------------
Contributions:
Employees' salary deferral ................... $ 1,950,823 $ 1,780,414
Employer ..................................... 1,192,514 1,122,997
Income (loss) from investment activities ....... 7,228,916 (412,511)
Benefit distributions .......................... (749,701) (575,612)
------------ ------------
Net increase .......................... 9,622,552 1,915,288
Net assets available for plan
benefits, beginning of year .................. 22,976,727 21,061,439
------------ ------------
Net assets available for plan
benefits, end of year ............... $ 32,599,279 $ 22,976,727
============ ============
The accompanying notes are an integral part of the
financial statements.
4
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS
1. PLAN DESCRIPTION
- ---------------------
The MBIA Inc. Employees Profit Sharing and 401(K) Salary Deferral Plan (the
"Plan") is a defined contribution plan for employees of MBIA Inc. and
Subsidiaries (the "Company"). Effective April 1, 1987, a 401(K) deferral feature
was implemented enabling eligible participants to defer up to 10% of their total
eligible compensation. Matching contributions are made by the Company for those
participants making salary deferred contributions at the rate of 100% of the
participant's contribution and up to a maximum of 5% of the participant's
eligible compensation. Participants may request loans from their accounts in
accordance with established guidelines.
The assets of both the Plan and the MBIA Inc. Employees Pension Plan are managed
by Fidelity Management Trust Company ("Fidelity"), the investment advisor,
master trustee and custodian. The participants of the Plan have the option to
direct the investment of their contribution share into one or more of nine
Fidelity funds and the Employer Stock Fund.
Vesting in employer contributions begins after three years of service and full
vesting is achieved after five years of service. Participants are fully vested
in their salary deferred contributions at all times. Upon reaching the normal
retirement date, death or becoming disabled, a participant becomes fully vested
in the Company's contributions. Nonvested benefits remaining after termination
of employment serve to reduce future Company contributions.
The benefit to which a participant is entitled is the benefit that can be
provided by the contributions and income thereon, including net realized and
unrealized investment gains and losses of each participant's account. Upon
retirement, death or termination, a participant or beneficiary can elect to
receive a lump-sum distribution, installment distributions or purchase a joint
and survivor annuity contract or single life annuity contract.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"). Participants should refer to the Summary Plan Description
and Plan Document for specific information regarding Plan provisions.
5
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- -----------------------------------------------
INVESTMENTS
The Plan's assets are invested in the MBIA Inc. Master Trust (the "Trust") with
the assets of the MBIA Inc. Employees Pension Plan.
The Plan's share of investments and income from investment activities in the
Trust is determined based on the Plan's underlying contribution to the
investment classification which is, in turn, based on the investment fund
elections of the participants.
Investments in the Fidelity funds and the Company's common stock are valued at
their current fair values based on last reported sales prices on the last
business day of the year. Participant loans are stated at cost plus accrued
income, which approximates fair value.
Gain or loss on sale of investments is based on specifically identified cost.
Interest income from investments is recorded as earned on the accrual basis.
Dividend income is recorded on the ex-dividend date.
The Plan's income from investment activities includes the net appreciation
(depreciation) in the fair value of its investments which consists of the
realized gains or losses and the unrealized appreciation (depreciation) on those
investments.
CONTRIBUTIONS
Contributions from eligible participants and matching Company contributions are
recorded in the month the related payroll deductions are made.
PARTICIPANT ACCOUNTS
Each participant has an account which is credited with the Company's
contribution, employees' contribution and the income (loss) from the investment
activities of the participant's account.
ADMINISTRATIVE EXPENSES
Administrative expenses are paid directly by the Company rather than out of Plan
assets. Employee loan fees are paid out of the participants' accounts.
6
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
3. PLAN TERMINATION
- ---------------------
The Company has not expressed any intent to discontinue its contributions or
terminate the Plan. However, it reserves the right to temporarily suspend
contributions to or amend or terminate the Plan. Upon termination of the Plan,
the accounts of all participants shall become fully vested, and the net assets
of the Plan shall be distributed among the participants and beneficiaries of the
Plan in proportion to their respective account balances.
4. INVESTMENTS
- ----------------
As of December 31, 1995 and 1994, the financial position of the Master Trust on
a cash basis (excluding the ending accrual for employer contributions) and the
Plan's percentage interest in each asset category were as follows:
<TABLE>
<CAPTION>
As of December 31, 1995 As of December 31, 1994
-------------------------------- ------------------------------------
Total Master Trust Total Master Trust
----------------------- Plan's ------------------------ Plan's
Cost Fair Value %Interest Cost Fair Value % Interest
----------- ----------- --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investments at fair value as determined
by quoted market price:
Employer Stock Fund $ 9,806,441 $12,768,677 100.00% $ 9,545,532 $ 8,640,565 100.00%
Fidelity Puritan Fund 1,419,737 1,583,453 38.85 1,231,509 1,163,026 38.08
Fidelity Magellan Fund 3,220,299 3,822,072 43.73 2,592,316 2,461,358 43.74
Fidelity Growth Company Fund 2,448,628 3,045,981 40.45 1,769,790 1,677,874 38.76
Fidelity Growth and Income Portfolio 18,274,576 22,878,824 43.81 16,757,958 15,978,056 44.06
Fidelity Intermediate Bond Fund 1,211,229 1,273,320 49.87 1,068,373 990,843 48.50
Fidelity Overseas Fund 948,355 998,664 46.78 947,439 928,024 44.26
Fidelity Blue Chip Growth Fund 2,981,030 3,336,181 45.17 1,828,858 1,933,640 44.19
Managed Income Portfolio 6,757,801 6,757,801 41.19 6,050,045 6,050,045 41.89
----------- ---------- ----------- ----------
47,068,096 56,464,973 56.15 41,791,820 39,823,431 55.57
Investments at estimated fair value:
Participant loans 1,111,334 1,111,334 80.60 1,097,170 1,097,170 74.48
----------- ----------- ----------- -----------
Total invested assets available for
benefits of participating plans $48,179,430 $57,576,307 56.62% $42,888,990 $40,920,601 56.08%
=========== =========== =========== ===========
</TABLE>
For the years ended December 31, 1995 and 1994, net appreciation (depreciation)
in the fair value of investments (determined by quoted market price) of the
Master Trust (including investments bought and sold, as well as held during the
year) was as follows:
Years ended December 31
--------------------------
1995 1994
----------- -----------
Fidelity funds .............................. $ 6,869,526 ($1,101,182)
Employer Stock Fund ......................... 3,034,019 (928,820)
----------- -----------
$ 9,903,545 ($2,030,002)
=========== ===========
7
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
For the years ended December 31, 1995 and 1994, investment income consisting of
dividends and interest in the Master Trust were $2,576,601 and $2,102,733,
respectively.
5. NET ASSETS AND CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS BY FUND
- ---------------------------------------------------------------------------
As of December 31, 1995 and 1994, the net assets available for Plan benefits of
the individual investment funds were as follows:
As of December 31
---------------------------------
1995 1994
--------------- ----------------
Employer Stock Fund $12,768,784 $ 8,670,308
Fidelity Puritan Fund 615,142 442,856
Fidelity Magellan Fund 1,671,441 1,076,482
Fidelity Growth Company Fund 1,231,989 650,287
Fidelity Growth and Income Portfolio 10,023,820 7,039,153
Fidelity Intermediate Bond Fund 635,027 480,600
Fidelity Overseas Fund 467,180 410,752
Fidelity Blue Chip Growth Fund 1,506,884 854,507
Managed Income Portfolio 2,783,298 2,534,659
Participant Loans 895,714 817,123
------------ ------------
$32,599,279 $22,976,727
============ ============
For the years ended December 31, 1995 and 1994, the changes in net assets
available for Plan benefits of the individual investment funds were as shown on
the following page:
8
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<TABLE>
MBIA INC.
EMPLOYEES PROFIT SHARING and 401 (K) SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
<CAPTION>
Year ended December 31, 1995
------------------------------------------------------------------------------------------------------------------
Growth Inter- Blue
Employer Growth and mediate Chip Managed
Stock Puritan Magellan Company Income Bond Overseas Growth Income Participant
Fund Fund Fund Fund Fund Fund Fund Fund Portfolio Loans Total
---------- -------- -------- -------- ---------- --------- -------- -------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employees'
salary
deferral $ 60,340 $ 82,062 $248,397 $194,652 $ 674,673 $ 79,220 $104,123 $259,493 $247,863 $ --- $1,950,823
Employer 1,264,917 --- --- --- --- --- --- --- (72,403) --- 1,192,514
Income from
investment
activities 3,238,144 104,128 417,962 294,773 2,539,996 68,714 39,952 283,767 157,760 83,720 7,228,916
Benefit
distributions (314,315) (11,502) (85,953) (11,640) (136,507) (28) (6,385) (9,084) (169,844) (4,443) (749,701)
Transfers
(to)from
other funds (150,610) (2,401) 14,553 103,918 (93,495) 6,520 (81,262) 118,201 85,264 (688) ---
---------- -------- -------- -------- ---------- -------- -------- -------- -------- ------- ----------
Net increase
(decrease) in
net assets
available
for Plan
benefits $4,098,476 $172,287 $594,959 $581,703 $2,984,667 $154,426 $ 56,428 $652,377 $248,640 $78,589 $9,622,552
========== ======== ======== ======== ========== ======== ======== ======== ======== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
Year ended December 31, 1994
------------------------------------------------------------------------------------------------------------------
Growth Inter- Blue
Employer Growth and mediate Chip Managed
Stock Puritan Magellan Company Income Bond Overseas Growth Income Participant
Fund Fund Fund Fund Fund Fund Fund Fund Portfolio Loans Total
---------- -------- -------- -------- -------- ------- -------- -------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Contributions:
Employees'
salary
deferral $ 162,623 $ 68,908 $237,893 $124,361 $652,962 $59,396 $ 99,927 $122,171 $252,173 $ --- $1,780,414
Employer 1,122,997 --- --- --- --- --- --- --- --- --- 1,122,997
Income from
investment
activities (779,006) 5,047 (22,275) (15,316) 150,790 (8,177) (1,860) 66,299 139,866 52,121 (412,511)
Benefit
distributions (222,668) (3,331) (28,829) (15,426) (150,353) (2,464) (5,634) (47,717) (65,243) (33,947) (575,612)
Transfers (to)
from other
funds 25,009 63,249 4,353 (46,583) (100,224) (18,225) 101,717 85,999 (333,881) 218,586 ---
------- -------- -------- ------- -------- ------- -------- -------- --------- -------- -----------
Net increase
(decrease)
in net
assets
available for
Plan benefits $ 308,955 $133,873 $191,142 $ 47,036 $553,175 $30,530 $194,150 $226,752 $ (7,085) $236,760 $1,915,288
========== ======== ======== ======== ======== ======= ======== ======== ======== ======== ==========
</TABLE>
9
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MBIA INC.
EMPLOYEES PROFIT SHARING AND 401(K) SALARY DEFERRAL PLAN
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Tax Status
The Internal Revenue Service has advised that the Plan constitutes a qualified
plan under Section 401 (a) of the Internal Revenue Code and is therefore exempt
from federal income taxes under provisions of Section 501 (a).
10
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
MBIA Inc.
Employees Profit Sharing and
401(K) Salary Deferral Plan
Date: June 10, 1996 \s\ KEVIN D. SILVA
- -------------------- -----------------------------
Kevin D. Silva
Senior Vice President
Plan Administrator
Date: June 10, 1996 \s\ LOUIS G. LENZI
- -------------------- ----------------------------
Louis G. Lenzi
General Counsel
11
