3
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, 1998
-------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ------------------------
Commission file number 1-10683
---------------------------------------------------------
MBNA Corporation
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1713008
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Wilmington, DE 19884-0141
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(800) 362-6255
- -------------------------------------------------------------------------------
(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
6 7/8% Senior Notes due October 1, 1999 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, 1998, 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 Schedules
(A) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES:
Page Number
-----------
FINANCIAL STATEMENTS:
Report of Independent Auditors............................... 1
Statements of Net Assets Available for Benefits.............. 2
Statements of Changes in Net Assets Available for Benefits... 3
Notes to Financial Statements................................ 4
SUPPLEMENTAL SCHEDULES:
Line 27a-Schedule of Assets Held for Investment Purposes..... 20
Line 27d-Schedule of Reportable Transactions................. 21
(B) EXHIBITS
Exhibit 23: Consent of Independent Auditors................. 25
(C) SIGNATURE.................................................... 26
REPORT OF INDEPENDENT AUDITORS
To the Pension and 401(k) Plus Savings 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, 1998
and 1997, and the related statements of changes in net assets available for
benefits for the years then ended. 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 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 benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for the purpose of
additional analysis and are not a required part of the financial statements but
are 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. These supplemental schedules are the responsibility of
the Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ Ernst & Young LLP
Baltimore, Maryland
June 24, 1999
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
----------------------------
1998 1997
------------- -------------
ASSETS
Investments at fair value:
Common trust funds............................ $ 83,859,644 $ 54,429,538
Interest in registered investment companies... 97,840,785 74,028,280
Short-term investment fund.................... 4,164,862 5,062,981
Common Stock of MBNA Corporation.............. 167,211,299 125,080,216
Guaranteed investment contracts............... 31,771,880 19,192,472
Loans receivable.............................. 19,191,482 16,448,866
------------- -------------
Total investments........................... 404,039,952 294,242,353
Receivable for investment sold.................. 974,763 -
Income receivable............................... 489,152 435,509
------------- -------------
Total assets................................ 405,503,867 294,677,862
LIABILITIES
Accrued expenses and other liabilities.......... 181,927 151,442
------------- -------------
Total liabilities........................... 181,927 151,442
------------- -------------
Net assets available for benefits........... $ 405,321,940 $ 294,526,420
============= =============
==============================================================================
See accompanying notes to the financial statements.
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended
December 31,
----------------------------
1998 1997
------------- -------------
ADDITIONS
Investment income:
Interest...................................... $ 2,170,138 $ 580,052
Income from common trust funds................ 68,070 1,137,966
Income from interest in registered investment
companies.................................... 1,599,250 1,281,087
Dividends from Common Stock of
MBNA Corporation............................. 1,593,285 1,421,387
Interest income from loans receivable......... 1,663,836 1,251,180
------------- -------------
Total investment income..................... 7,094,579 5,671,672
Contributions:
Employer...................................... 14,775,858 12,110,078
Employee...................................... 33,332,570 31,015,487
------------- -------------
Total additions............................. 55,203,007 48,797,237
DEDUCTIONS
Payments to participants........................ 16,649,502 8,872,985
Administrative expenses......................... 774,458 834,245
------------- -------------
Total deductions............................ 17,423,960 9,707,230
Net realized and unrealized appreciation in
fair value of investments...................... 73,016,473 58,206,345
------------- -------------
Net additions............................... 110,795,520 97,296,352
Net assets available for benefits at
beginning of year.............................. 294,526,420 197,230,068
------------- -------------
Net assets available for benefits at
end of year.................................... $ 405,321,940 $ 294,526,420
============= =============
==============================================================================
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 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 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 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/(depreciation) in fair value of investments.
Benefits are recognized when paid. Administrative expenses of $774,458 and
$834,245 in 1998 and 1997, respectively, 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 $10,000 and $9,500 per year for
1998 and 1997, respectively) 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. MBNA
Corporation (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 seven 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 - Assets in this fund are invested primarily in guaranteed
investment contracts issued by major insurance companies and banks. The fund
also includes synthetic and alternative guaranteed investment contracts.
Bond Fund - Assets in this fund are invested in corporate bonds, U.S.
Government fixed income securities, and money market instruments.
Diversified Fund - Assets in this fund are invested in investment grade stocks,
bonds and short-term investments such as U.S. Government notes, and
certificates of deposit.
Index Fund - Assets in this fund are primarily invested in stocks of most of
the companies included in the Standard & Poor's 500 Index.
Growth Fund - Assets in this fund are invested in stocks of a wide range of
companies, both small and large.
MBNA Stock Fund - Assets in this fund are invested primarily in the common
stock of MBNA Corporation.
Aggressive Growth Fund - Assets in this fund are primarily invested in common
stocks and securities convertible into common stocks. However, up to 5% of its
assets may be invested in warrants and rights to purchase common stocks. The
Aggressive Growth Fund was a new investment option beginning in October 1997.
In addition to the seven 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.
The number of participants in each fund at December 31, 1998, is as follows:
Fixed Income Fund 9,013
Bond Fund 1,729
Diversified Fund 5,376
Index Fund 7,685
Growth Fund 6,769
MBNA Stock Fund 9,230
Aggressive Growth Fund 2,301
The total number of participants in the Plan is less than the sum of the fund
participants shown above because many participate in more than one fund.
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 fair value of the Plan's investments at December 31, 1998 and 1997 is as
follows:
December 31,
----------------------------
1998 1997
------------- -------------
Common trust funds:
Barclays Global Equity Index Fund............. $ 69,459,644 $ 48,256,870
Lasalle National Trust Income Plus Fund....... - 6,172,668
SEI Stable Asset Fund......................... 14,400,000 -
------------- -------------
Total common trust funds.................... 83,859,644 54,429,538
Interest in registered investment companies:
American Balanced Fund........................ 39,121,347 34,400,361
MFS Research Fund............................. 46,944,173 32,530,219
Bond Fund of America.......................... 5,513,927 3,467,642
PBHG Growth Fund.............................. 6,261,338 3,630,058
------------- -------------
Total interest in registered investment
companies.................................. 97,840,785 74,028,280
Short-term investment fund...................... 4,164,862 5,062,981
Common Stock of MBNA Corporation................ 167,211,299 125,080,216
Guaranteed investment contracts................. 31,771,880 19,192,472
Loans receivable................................ 19,191,482 16,448,866
------------- -------------
Total investments........................... $ 404,039,952 $ 294,242,353
============= =============
The net realized and unrealized appreciation in fair value of the Plan's
investments was as follows:
For the Year Ended
December 31,
----------------------------
1998 1997
------------- -------------
Common trust funds............................ $ 14,451,303 $ 11,229,710
Interest in registered investment companies... 9,947,056 10,231,450
Common Stock of MBNA Corporation.............. 48,618,114 36,745,185
------------- -------------
Total net realized and unrealized
appreciation in fair value of investments.. $ 73,016,473 $ 58,206,345
============= =============
The fair value of individual investments that represent 5% or more of the
Plan's net assets available for benefits at December 31, 1998 and 1997 are as
follows:
1998 1997
---------------------- ----------------------
Units Fair Value Units Fair Value
--------- ------------ --------- ------------
Common trust funds:
Barclays Global Equity Index
Fund......................... 2,067,251 $ 69,459,644 1,846,093 $ 48,256,870
Interest in registered
investment companies:
American Balanced Fund........ 2,482,319 39,121,347 2,193,901 34,400,361
MFS Research Fund............. 1,866,568 46,944,173 1,527,958 32,530,219
Common Stock of MBNA
Corporation.................... 6,705,215 167,211,299 4,579,596 125,080,216
The Plan's investments in guaranteed investment contracts in the aggregate for
the year ended December 31, 1998 and 1997 were as follows:
1998 1997
--------------- ---------------
Contract value............................ $ 31,771,880 $ 19,192,472
Fair value................................ 31,771,880 19,192,472
Weighted average yield.................... 5.87% 6.40%
Crediting interest rates ranging from..... 4.62% to 6.37% 5.90% to 6.46%
Maturity dates ranging from............... 1999 to 2003 1998 to 2002
The guaranteed investment contracts held by the Plan at December 31, 1998 had
Standard and Poor's ratings ranging from AA to AAA. The Plan holds fixed rate
guaranteed investment contracts. The fair value of the guaranteed investment
contracts approximates book value.
NOTE 4: TRANSACTIONS WITH PARTIES-IN-INTEREST
For the years ended December 31, 1998 and 1997, the Plan earned investment
income of $122,538 and $104,988, respectively, on its investments administered
by the trustee. In addition, for the years ended December 31, 1998 and 1997,
the Plan earned dividend income of $1,593,285 and $1,421,387, respectively, on
shares of MBNA Corporation common stock held by the Plan. For the years ended
December 31, 1998 and 1997, the Plan also had a dividend receivable of $416,293
and $375,992, 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
("the IRS") dated June 12, 1995, stating that the Plan is qualified under
Section 401(a) of the Internal Revenue Code ("the Code") and, therefore, the
related trust is exempt from taxation. Once qualified, the Plan is required to
operate in conformity with the Code to maintain its qualification. The Plan
Administrator believes the Plan is being operated in compliance with the
applicable requirements of the Code 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, 1998 and 1997 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
lines 32b(4) and 32b(5) of Form 5500. In addition, a liability for benefits
payable of $477,837 and $68,826 at December 31, 1998 and 1997, respectively,
has been recorded on line 31(g) of the 1998 and 1997 Form 5500, respectively,
and has not been recorded in these financial statements.
NOTE 7: STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY FUND
Fixed Diversified
Income Fund Bond Fund Fund
------------ ------------ ------------
December 31, 1998
ASSETS
Investments....................... $ 49,468,135 $ 5,513,927 $ 39,121,347
Receivable for investment sold.... - - -
Income receivable................. 72,592 - -
Interfund (payable)/receivable.... (277,710) (6,903) 100,660
------------ ------------ ------------
Total assets.................. 49,263,017 5,507,024 39,222,007
LIABILITIES
Accrued expenses and other
liabilities...................... 6,100 915 8,752
------------ ------------ ------------
Total liabilities............. 6,100 915 8,752
------------ ------------ ------------
Net assets available for
benefits..................... $ 49,256,917 $ 5,506,109 $ 39,213,255
============ ============ ============
December 31, 1997
ASSETS
Investments....................... $ 28,030,470 $ 3,467,642 $ 34,400,361
Income receivable................. 59,507 - -
Interfund (payable)/receivable.... (220,163) (24,920) (24,728)
------------ ------------ ------------
Total assets.................. 27,869,814 3,442,722 34,375,633
LIABILITIES
Accrued expenses and other
liabilities...................... 4,141 1,101 8,351
------------ ------------ ------------
Total liabilities............. 4,141 1,101 8,351
------------ ------------ ------------
Net assets available for
benefits..................... $ 27,865,673 $ 3,441,621 $ 34,367,282
============ ============ ============
MBNA
Index Fund Growth Fund Stock Fund
------------ ------------ ------------
December 31, 1998
ASSETS
Investments....................... $ 69,459,644 $ 46,944,173 $168,079,906
Receivable for investment sold.... - - 974,763
Income receivable................. - - 416,293
Interfund (payable)/receivable.... 256,162 144,610 (218,094)
------------ ------------ ------------
Total assets.................. 69,715,806 47,088,783 169,252,868
LIABILITIES
Accrued expenses and other
liabilities...................... 17,954 8,472 20,875
------------ ------------ ------------
Total liabilities............. 17,954 8,472 20,875
------------ ------------ ------------
Net assets available for
benefits..................... $ 69,697,852 $ 47,080,311 $169,231,993
============ ============ ============
December 31, 1997
ASSETS
Investments....................... $ 48,256,870 $ 32,530,219 $127,477,867
Income receivable................. - - 375,992
Interfund (payable)/receivable.... (16,154) 78,587 86,331
------------ ------------ ------------
Total assets.................. 48,240,716 32,608,806 127,940,190
LIABILITIES
Accrued expenses and other
liabilities...................... 15,437 7,701 32,119
------------ ------------ ------------
Total liabilities............. 15,437 7,701 32,119
------------ ------------ ------------
Net assets available for
benefits..................... $ 48,225,279 $ 32,601,105 $127,908,071
============ ============ ============
Aggressive
Growth Fund Loan Fund Total
------------ ------------ ------------
December 31, 1998
ASSETS
Investments....................... $ 6,261,338 $ 19,191,482 $404,039,952
Receivable for investment sold.... - - 974,763
Income receivable................. - 267 489,152
Interfund (payable)/receivable.... (11,574) 12,849 -
------------ ------------ ------------
Total assets.................. 6,249,764 19,204,598 405,503,867
LIABILITIES
Accrued expenses and other
liabilities...................... 459 118,400 181,927
------------ ------------ ------------
Total liabilities............. 459 118,400 181,927
------------ ------------ ------------
Net assets available for
benefits..................... $ 6,249,305 $ 19,086,198 $405,321,940
============ ============ ============
December 31, 1997
ASSETS
Investments....................... $ 3,630,058 $ 16,448,866 $294,242,353
Income receivable................. - 10 435,509
Interfund (payable)/receivable.... 82,189 38,858 -
------------ ------------ ------------
Total assets.................. 3,712,247 16,487,734 294,677,862
LIABILITIES
Accrued expenses and other
liabilities...................... - 82,592 151,442
------------ ------------ ------------
Total liabilities............. - 82,592 151,442
------------ ------------ ------------
Net assets available for
benefits..................... $ 3,712,247 $ 16,405,142 $294,526,420
============ ============ ============
NOTE 8: STATEMENTS OF CHANGES NET ASSETS AVAILABLE FOR BENEFITS BY FUND
Fixed Diversified
Income Fund Bond Fund Fund
------------ ------------ ------------
For the Year Ended
December 31, 1998
ADDITIONS
Investment income................. $ 2,111,983 $ 310,325 $ 1,286,104
Contributions:
Employer........................ 2,485,069 306,065 1,918,901
Employee........................ 3,533,383 735,986 4,302,091
------------ ------------ ------------
Total additions............... 8,130,435 1,352,376 7,507,096
DEDUCTIONS
Payments to participants.......... 2,673,236 316,960 1,655,803
Administrative expenses........... 79,320 10,501 80,742
------------ ------------ ------------
Total deductions.............. 2,752,556 327,461 1,736,545
Interfund transfers............... 16,013,365 1,128,975 (3,458,292)
Net realized and unrealized
(depreciation)/appreciation in
fair value of investments........ - (89,402) 2,533,714
------------ ------------ ------------
Net additions................. 21,391,244 2,064,488 4,845,973
Net assets available for
benefits at beginning of year.... 27,865,673 3,441,621 34,367,282
------------ ------------ ------------
Net assets available for
benefits at end of year.......... $ 49,256,917 $ 5,506,109 $ 39,213,255
============ ============ ============
MBNA
Index Fund Growth Fund Stock Fund
------------ ------------ ------------
For the Year Ended
December 31, 1998
ADDITIONS
Investment income................. $ 3,687 $ 2,511 $ 1,715,823
Contributions:
Employer........................ 3,599,420 2,987,804 2,888,949
Employee........................ 8,616,005 7,464,427 7,118,640
------------ ------------ ------------
Total additions............... 12,219,112 10,454,742 11,723,412
DEDUCTIONS
Payments to participants.......... 2,699,954 2,001,821 5,842,622
Administrative expenses........... 186,993 89,120 316,944
------------ ------------ ------------
Total deductions.............. 2,886,947 2,090,941 6,159,566
Interfund transfers............... (2,310,895) (1,464,746) (12,858,038)
Net realized and unrealized
(depreciation)/appreciation in
fair value of investments........ 14,451,303 7,580,151 48,618,114
------------ ------------ ------------
Net additions................. 21,472,573 14,479,206 41,323,922
Net assets available for
benefits at beginning of year.... 48,225,279 32,601,105 127,908,071
------------ ------------ ------------
Net assets available for
benefits at end of year.......... $ 69,697,852 $ 47,080,311 $169,231,993
============ ============ ============
Aggressive
Growth Fund Loan Fund Total
------------ ------------ ------------
For the Year Ended
December 31, 1998
ADDITIONS
Investment income................. $ 310 $ 1,663,836 $ 7,094,579
Contributions:
Employer........................ 589,650 - 14,775,858
Employee........................ 1,562,038 - 33,332,570
------------ ------------ ------------
Total additions............... 2,151,998 1,663,836 55,203,007
DEDUCTIONS
Payments to participants.......... 271,464 1,187,642 16,649,502
Administrative expenses........... 10,838 - 774,458
------------ ------------ ------------
Total deductions.............. 282,302 1,187,642 17,423,960
Interfund transfers............... 744,769 2,204,862 -
Net realized and unrealized
(depreciation)/appreciation in
fair value of investments........ (77,407) - 73,016,473
------------ ------------ ------------
Net additions................. 2,537,058 2,681,056 110,795,520
Net assets available for
benefits at beginning of year.... 3,712,247 16,405,142 294,526,420
------------ ------------ ------------
Net assets available for
benefits at end of year.......... $ 6,249,305 $ 19,086,198 $405,321,940
============ ============ ============
Fixed Diversified
Income Fund Bond Fund Fund
------------ ------------ ------------
For the Year Ended
December 31, 1997
ADDITIONS
Investment income................. $ 1,613,030 $ 191,239 $ 1,089,848
Contributions:
Employer........................ 2,243,788 236,443 1,820,498
Employee........................ 3,810,286 629,794 4,317,700
------------ ------------ ------------
Total additions............... 7,667,104 1,057,476 7,228,046
DEDUCTIONS
Payments to participants.......... 1,321,661 102,343 1,047,525
Administrative expenses........... 85,940 11,868 105,879
------------ ------------ ------------
Total deductions.............. 1,407,601 114,211 1,153,404
Interfund transfers............... (6,248,482) 10,507 (4,383,502)
Net realized and unrealized
(depreciation)/appreciation in
fair value of investments........ - 52,695 4,736,551
------------ ------------ ------------
Net additions................. 11,021 1,006,467 6,427,691
Net assets available for
benefits at beginning of year.... 27,854,652 2,435,154 27,939,591
------------ ------------ ------------
Net assets available for
benefits at end of year.......... $ 27,865,673 $ 3,441,621 $ 34,367,282
============ ============ ============
MBNA
Index Fund Growth Fund Stock Fund
------------ ------------ ------------
For the Year Ended
December 31, 1997
ADDITIONS
Investment income................. $ - $ - $ 1,526,375
Contributions:
Employer........................ 2,953,960 2,403,441 2,397,767
Employee........................ 7,810,466 6,489,191 7,747,854
------------ ------------ ------------
Total additions............... 10,764,426 8,892,632 11,671,996
DEDUCTIONS
Payments to participants.......... 1,097,421 798,039 4,078,612
Administrative expenses........... 169,808 87,207 373,543
------------ ------------ ------------
Total deductions.............. 1,267,229 885,246 4,452,155
Interfund transfers............... (4,242,961) (2,910,690) 10,519,679
Net realized and unrealized
(depreciation)/appreciation in
fair value of investments........ 11,229,710 5,665,981 36,745,185
------------ ------------ ------------
Net additions................. 16,483,946 10,762,677 54,484,705
Net assets available for
benefits at beginning of year.... 31,741,333 21,838,428 73,423,366
------------ ------------ ------------
Net assets available for
benefits at end of year.......... $ 48,225,279 $ 32,601,105 $127,908,071
============ ============ ============
Aggressive
Growth Fund Loan Fund Total
------------ ------------ ------------
For the Year Ended
December 31, 1997
ADDITIONS
Investment income................. $ - $ 1,251,180 $ 5,671,672
Contributions:
Employer........................ 54,181 - 12,110,078
Employee........................ 210,196 - 31,015,487
------------ ------------ ------------
Total additions............... 264,377 1,251,180 48,797,237
DEDUCTIONS
Payments to participants.......... 989 426,395 8,872,985
Administrative expenses........... - - 834,245
------------ ------------ ------------
Total deductions.............. 989 426,395 9,707,230
Interfund transfers............... 3,672,636 3,582,813 -
Net realized and unrealized
(depreciation)/appreciation in
fair value of investments........ (223,777) - 58,206,345
------------ ------------ ------------
Net additions................. 3,712,247 4,407,598 97,296,352
Net assets available for
benefits at beginning of year.... - 11,997,544 197,230,068
------------ ------------ ------------
Net assets available for
benefits at end of year.......... $ 3,712,247 $ 16,405,142 $294,526,420
============ ============ ============
NOTE 9: Year 2000 Issue (unaudited)
The Corporation has substantially completed the assessment, renovation and
testing of the Plan's systems and applications for Year 2000 compliance. The
Corporation is currently conducting a series of end-to-end interoperability
tests involving hardware, software, telecommunications and key external vendors
and interfaces for the Plan. Year 2000-specific contingency and business
recovery plans have been developed for the Plan including those that address
potential disruptions with vendor products and services. The Corporation does
not expect this project to have a material impact on the Plan's operations.
ATTACHMENT TO FORM 5500
EIN: 52-1713008
PN: 001
LINE 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
December 31, 1998
Identity of Issue, Borrower, Description of Current
Lessor or Similar Party Investment Cost Value
- --------------------------------- ---------------- ------------ ------------
Common trust funds:
Barclay Global Equity
Index Fund.................... 2,067,251 units $ 42,956,901 $ 69,459,644
SEI Stable Asset Fund.......... 14,400,000 units 14,400,000 14,400,000
------------ ------------
Total common trust funds..... 57,356,901 83,859,644
Interest in registered
investment companies:
American Balanced Fund......... 2,482,319 units 36,136,152 39,121,347
MFS Research Fund.............. 1,866,568 units 43,380,118 46,944,173
Bond Fund of America........... 405,138 units 5,598,855 5,513,927
PBHG Growth Fund............... 245,158 units 6,209,870 6,261,338
------------ ------------
Total interest in registered
investment companies........ 91,324,995 97,840,785
Short-term investment fund....... 4,164,862 4,164,862
Common Stock of MBNA Corporation. 6,705,215 units 75,879,662 167,211,299
Guaranteed investment
contracts ("GIC"):
Peoples Security GIC........... 6.37% 3,200,627 3,200,627
Sun America GIC................ 6.33% 3,001,009 3,001,009
John Hancock GIC............... 4.62% 5,041,007 5,041,007
The Travelers GIC.............. 6.00% 3,138,643 3,138,643
Life of Denver GIC............. 5.77% 3,153,653 3,153,653
State Street Bank & Trust
Synthetic GIC................. 6.11% 14,236,941 14,236,941
------------ ------------
Total guaranteed investment
Contracts................... 31,771,880 31,771,880
Loans receivable................. 19,191,482 19,191,482
------------ ------------
Total investments............ $279,689,782 $404,039,952
============ ============
ATTACHMENT TO FORM 5500
EIN: 52-1713008
PN: 001
LINE 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
MBNA CORPORATION 401(k) PLUS SAVINGS PLAN
Year Ended December 31, 1998
Category (iii) - Series of Transactions (Aggregate) in Excess of 5%
of Plan Assets:
Identity of Description
Party Involved of Assets Purchase Price Selling Price
- -------------- ------------------ --------------- ---------------
Northern Trust American Balanced $ 13,623,789 $ -
Fund (105 purchases)
Northern Trust American Balanced - 11,436,519
Fund (155 sales)
Northern Trust MBNA Corporation 30,840,305 -
Common Stock (31 purchases)
Northern Trust MBNA Corporation - 36,624,117
Common Stock (28 sales)
Northern Trust MFS Research Fund 19,474,675 -
(122 purchases)
Northern Trust MFS Research Fund - 12,640,872
(132 sales)
Northern Trust Barclays Global 21,522,272 -
Equity Index Fund (112 purchases)
Northern Trust Barclays Global - 14,770,801
Equity Index Fund (140 sales)
Northern Trust Short-term 123,736,346 -
investment fund (377 purchases)
Northern Trust Short-term - 124,630,901
investment fund (394 sales)
Northern Trust MBNA Corporation 11,438,521 -
401(k) Plus (263 purchases)
Savings Trust
Loan Asset
Identity of Description
Party Involved of Assets Purchase Price Selling Price
- -------------- ------------------ --------------- ---------------
Northern Trust MBNA Corporation $ - $ 8,695,905
401(k) Plus (206 sales)
Savings Trust
Loan Asset
There were no category (i), (ii) or (iv) reportable transactions for the year
ended December 31, 1998.
Fair Value of
Asset on
Identity of Description Transaction
Party Involved of Assets Cost of Asset Date Net Gain
- -------------- ------------------ ------------- ------------- -----------
Northern Trust American Balanced $ 13,623,789 $ 13,623,789 $ -
Fund
Northern Trust American Balanced 8,039,859 11,436,519 3,396,660
Fund
Northern Trust MBNA Corporation 30,840,305 30,840,305 -
Common Stock
Northern Trust MBNA Corporation 16,519,549 36,624,117 20,104,568
Common Stock
Northern Trust MFS Research Fund 19,474,675 19,474,675 -
Northern Trust MFS Research Fund 11,160,908 12,640,872 1,479,964
Northern Trust Barclays Global 21,522,272 21,522,272 -
Equity Index Fund
Northern Trust Barclays Global 9,853,332 14,770,801 4,917,469
Equity Index Fund
Northern Trust Short-term 123,736,346 123,736,346 -
investment fund
Northern Trust Short-term 124,630,901 124,630,901 -
investment fund
Northern Trust MBNA Corporation 11,438,521 11,438,521 -
401(k) Plus
Savings Trust
Loan Asset
Fair Value of
Asset on
Identity of Description Transaction
Party Involved of Assets Cost of Asset Date Net Gain
- -------------- ------------------ ------------- ------------- -----------
Northern Trust MBNA Corporation $ 8,695,905 $ 8,695,905 $ -
401(k) Plus
Savings Trust
Loan Asset
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 24, 1999 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, 1998:
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 Amendment
No. 2) 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 (as amended by Amendment
No. 1) dated April 6, 1998
Number 333-51477 on Form S-8 dated April 30, 1998
Number 333-79987 on Form S-8 dated June 4, 1999
/s/ Ernst & Young LLP
Ernst & Young LLP
Baltimore, Maryland
June 24, 1999
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, 1999 By: /s/ M. Scot Kaufman
---------------------------
M. Scot Kaufman
Executive Vice President
and Chief Financial Officer
