12_12 11-K 401K


UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
  

 
FORM 11-K
 
 
 
ý ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
For the fiscal year end December 31, 2012
 
 
OR
 
 
o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from   N/A   to   N/A
 
 
 
Commission File Number: 1-05046
 
 
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

 
  
Con-way 401(k) Plan
 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
 

Con-way Inc.
2211 Old Earhart Road, Suite 100 
Ann Arbor, MI  48105
























CON-WAY 401(k) PLAN
 
Financial Statements and Supplemental Schedule
 
December 31, 2012 and 2011
 
(With Reports of Independent Registered Public Accounting Firms)








































CON-WAY 401(k) PLAN
 
 
Table of Contents
 
 
Page
 
 
Reports of Independent Registered Public Accounting Firms
 
 
Financial Statements:
 
 
 
Statements of Net Assets Available for Benefits – December 31, 2012 and 2011
 
 
Statement of Changes in Net Assets Available for Benefits – Year ended December 31, 2012
 
 
Notes to Financial Statements
 
 
Supplemental Schedule:
 
 
 
Schedule H, Line 4i – Schedule of Assets (Held at End of Year) as of December 31, 2012
 
 
Signatures
 
 
Exhibit Index
 
 
 
 




Report of Independent Registered Public Accounting Firm



Con-way Inc. Administrative Committee
Con-way 401(k) Plan:
We have audited the accompanying statement of net assets available for benefits of Con-way 401(k) Plan as of December 31, 2012, and the related statement of changes in net assets available for benefits for the year 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 audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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 audit provides 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 as of December 31, 2012, and the changes in net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2012, is presented for purposes of additional analysis and is not a required part of the basic 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 the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
 
/s/ Kieckhafer Schiffer & Company LLP

Portland, Oregon
June 25, 2013

 

 

 




1



Report of Independent Registered Public Accounting Firm
 



To the Con-way Inc. Administrative Committee
Con-way 401(k) Plan

We have audited the accompanying statement of net assets available for benefits of the Con-way 401(k) Plan (the “Plan”) as of December 31, 2011. This financial statement is the responsibility of the Plan's management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (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. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of net assets available for benefits referred to above presents fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.


/s/ Perkins & Company, P.C.

Portland, Oregon
June 25, 2012




2



CON-WAY 401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 2012 and 2011
 
 
2012
 
2011
Assets:
 
 
 
 
Investments, at fair value:
 
 
 
 
Mutual funds
 
$
30,980,238

 
$
29,052,586

Common trust funds
 
4,747,477

 
4,618,384

Con-way Common Stock
 
1,229,228

 
1,482,889

Total investments
 
36,956,943

 
35,153,859

Receivables:
 
 

 
 

Participant contributions
 
53,338

 
48,749

Con-way contributions
 
208,179

 
99,770

Notes receivable from participants
 
1,792,286

 
1,713,119

Total receivables
 
2,053,803

 
1,861,638

Cash
 
80,884

 

Net assets available for benefits
 
$
39,091,630

 
$
37,015,497

See accompanying notes to financial statements.



3



CON-WAY 401(k) PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2012
Additions:
 
Participant contributions
$
2,258,345

Con-way contributions
775,687

Rollover contributions
28,291

Net appreciation in fair value of investments
3,664,746

Dividend and interest income
739,335

Interest received on notes receivable from participants
67,490

Total additions
7,533,894

Deductions:
 

Distributions to participants
(5,457,761
)
Net increase
2,076,133

Net assets available for benefits, beginning of year
37,015,497

Net assets available for benefits, end of year
$
39,091,630

See accompanying notes to financial statements.



4




CON-WAY 401(k) PLAN
Notes to Financial Statements
December 31, 2012 and 2011
1. Description of Plan
The following description of the Con-way 401(k) Plan (the Plan), is provided for general information purposes only. Participants should refer to the Con-way Employee Benefits Plan Description or the Plan document for more complete information. The term “Con-way” or “Company” refers to Con-way Inc. and subsidiaries.
General
The Con-way sponsored Plan is a defined contribution plan with profit-sharing, salary deferral and employee stock ownership plan features and is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. The Plan is intended to qualify under Section 401(a) of the Internal Revenue Code (the Code).
Overall responsibility for administering the Plan rests with the Con-way Inc. Administrative Committee (the Committee), which is appointed by the Chief Executive Officer of Con-way. The Plan’s trustee, T. Rowe Price (the Trustee), is responsible for the control of the Plan’s assets, which are held in individual participant investment accounts (collectively known as the Trust).
Eligibility
Prior to January 1, 2012, eligibility was restricted to employees of Con-way Truckload, a subsidiary of the Company, who were not sales managers, directors, vice presidents or the president. Effective January 1, 2012, this restriction was changed to permit Con-way employees who are classified as sales managers, directors, vice presidents, or president to participate in the Plan so long as they are not considered a Qualified Employee under the Con-way Retirement Savings Plan and so long as they otherwise meet the Plan’s definition of a Qualified Employee. Employees are eligible to participate in the Plan if they are not covered by a collective bargaining agreement, are not a leased employee, are not a nonresident alien or are not a resident of Puerto Rico. There are no age requirements for eligibility. One year of service is required for participation. A supplemental employee must complete one year of service during which the employee works 1,000 hours.
Contributions
Participants may contribute up to 50% of their eligible compensation subject to certain limitations. Con-way, at its discretion, makes Matching Contributions to the Plan. During 2012, Con-way made Matching Contributions equal to 50% of the first seven percent of eligible compensation that participants contributed to the Plan.
Participant Accounts
The Plan allows participants to select any one or more of the investment funds established under the Plan in which contributions can be invested. As with balances in other invested funds, participants may transfer Con-way’s contributions to investments other than Con-way Common Stock.
A separate account is maintained for each participant of the Plan. Allocations of net Plan earnings are based upon participant account balances. The benefits to which participants are entitled are the benefits that can be provided from participants’ vested accounts.
Vesting
Participants are fully vested at all times in all elective deferrals and rollover contributions made to the Plan plus net earnings thereon. Matching Contributions for current employees vest as follows: 
Less than two years
 
—%

Two years
 
 
 
20

Three years
 
 
 
40

Four years
 
 
 
60

Five years
 
 
 
80

Six or more years
 
100


5



Employees of Con-way’s pre-acquisition truckload business with three or more years of service as of December 31, 2007 vest in Matching Contributions as follows:
Less than two years
 
—%

Two years
 
 
 
40

Three years
 
 
 
60

Four years
 
 
 
80

Five or more years
 
100

Forfeited balances are used to reduce future Con-way contributions or are redistributed to Plan participants. At December 31, 2012 and 2011, forfeitures totaling approximately $32,000 and $166,000, respectively, were available to reduce future contributions. During 2012, forfeitures totaling approximately $100,000 were used to reduce employer contributions.
Notes Receivable from Participants
The Plan has a loan provision allowing participants access to funds. Loans can be no less than $1,000 and cannot exceed the lesser of $50,000 or 50% of a participant’s vested account balance (subject to administrative adjustment to assure compliance with the 50% limit). Loans can be made for a term not to exceed 4-1/2 years. Loans outstanding at December 31, 2012 bear interest at rates ranging from 4.25% to 8.75%. Principal and interest are paid ratably through payroll deductions.
Payments and Benefits
Participants can receive a total distribution from their accounts upon death or termination of employment. Disabled participants can receive a partial distribution of their accounts, provided they qualify for benefits under Con-way’s long-term disability coverage. Other types of withdrawals are permitted by the Plan in limited situations. Participants can elect to have their accounts distributed in a single lump sum or in a series of substantially equal annual installments, as defined by the Plan. Distributions will be made in cash except participant accounts invested in Con-way Common Stock can, at the direction of the participant, be paid in shares.
Plan Termination
Although Con-way has no current intention to terminate the Plan, it may do so at any time by resolution of the Board of Directors. In the event that the Plan is terminated, all balances will become 100% vested and the net assets of the Plan shall be distributed to participants in the amount credited to their accounts.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements have been prepared using the accrual method of accounting.
Risks and Uncertainties
The Plan offers various investments that are generally exposed to various risks, such as interest-rate, credit and overall market-volatility risks. Investments are reported at fair value. Due to the risk associated with certain investment securities, it is reasonably possible that the value of investment securities will change and that such changes could materially affect amounts reported in the statements of net assets available for benefits.
Investment Valuation and Income Recognition
Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 3, "Fair-Value Measurements," for a discussion of fair value measurements.
The annual change in market value, including realized gains and losses, is reported in net appreciation in fair value of investments in the accompanying statement of changes in net assets available for benefits.
Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Purchases and sales of securities are recorded on the trade-date basis.


6



Administrative Expenses
During 2012, administrative expenses of the Plan were paid by Con-way and by Plan participants. Participant payments of administrative expenses were collected in administrative fees through a reduction in certain funds’ net asset value and paid directly to the Trustee. Certain funds also charge investment management fees in accordance with each fund’s prospectus, through a reduction in the funds’ net asset value.
Payment of Benefits
Benefits paid to participants are recorded upon distribution.
Estimates
Con-way makes estimates and assumptions when preparing the financial statements in conformity with U.S. generally accepted accounting principles (GAAP). These estimates and assumptions affect the amounts reported in the accompanying financial statements and notes. Actual results could differ from those estimates.
Notes Receivable from Participants
Notes receivable from participants are carried at amortized cost plus accrued interest.
3. Fair-Value Measurements
Assets and liabilities reported at fair value are classified in one of the following three levels in the fair-value hierarchy:
Level 1 - Quoted market prices in active markets for identical assets or liabilities
Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3 - Unobservable inputs that are not corroborated by market data
The following table summarizes the valuation of Plan assets within the fair-value hierarchy:

 
 
December 31, 2012
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds:
 
 
 
 
 
 
 
 
U.S. large company growth
 
$
3,373,963

 
$

 
$

 
$
3,373,963

U.S. large company value
 
1,048,667

 

 

 
1,048,667

U.S. small company growth
 
429,921

 

 

 
429,921

International equity
 
1,002,928

 

 

 
1,002,928

Targeted retirement date
 
23,439,768

 

 

 
23,439,768

Fixed income
 
1,684,991

 

 

 
1,684,991

Total mutual funds
 
30,980,238

 

 

 
30,980,238

 
 
 
 
 
 
 
 
 
Common trust funds:
 
 

 
 

 
 

 
 

U.S. equity index
 

 
375,986

 

 
375,986

Balanced
 

 
457,150

 

 
457,150

Fixed income
 

 
392,129

 

 
392,129

Money market
 

 
3,522,212

 

 
3,522,212

Total common trust funds
 

 
4,747,477

 

 
4,747,477

 
 
 
 
 
 
 
 
 
Con-way Common Stock
 
1,229,228

 

 

 
1,229,228

 
 
 
 
 
 
 
 
 
Total assets at fair value
 
$
32,209,466

 
$
4,747,477

 
$

 
$
36,956,943


7



 
 
December 31, 2011
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds:
 
 
 
 
 
 
 
 
U.S. large company growth
 
$
3,338,072

 
$

 
$

 
$
3,338,072

U.S. large company value
 
1,042,114

 

 

 
1,042,114

U.S. small company growth
 
368,918

 

 

 
368,918

International equity
 
913,882

 

 

 
913,882

Targeted retirement date
 
21,786,986

 

 

 
21,786,986

Fixed income
 
1,602,614

 

 

 
1,602,614

Total mutual funds
 
29,052,586

 

 

 
29,052,586

 
 
 
 
 
 
 
 
 
Common trust funds:
 
 

 
 

 
 

 
 

U.S. equity index
 

 
395,568

 

 
395,568

Balanced
 

 
339,662

 

 
339,662

Fixed income
 

 
406,410

 

 
406,410

Money market
 

 
3,476,744

 

 
3,476,744

Total common trust funds
 

 
4,618,384

 

 
4,618,384

 
 
 
 
 
 
 
 
 
Con-way Common Stock
 
1,482,889

 

 

 
1,482,889

 
 
 
 
 
 
 
 
 
Total assets at fair value
 
$
30,535,475

 
$
4,618,384

 
$

 
$
35,153,859

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2012 and 2011.
Mutual funds and Con-way Common Stock: Valued at fair value equal to the daily closing price reported on the active market on which the individual securities are traded.
Common trust funds: Valued at the fair value of the underlying investments and reported at the net asset value (NAV) of units held by the Plan at year end. The common trust funds are considered Level 2 investments as the underlying securities are publicly traded.
The following table provides information regarding redemption of investments where the NAV has been used as a practical expedient to measure fair value at December 31, 2012 and 2011:
 
 
 
 
 
 
Redemption
 
 
Fair Value
 
Redemption
 
Notice
 
 
2012
 
2011
 
Frequency
 
Period
 
 
 
 
 
 
 
 
 
Common trust funds
 
$
4,747,477

 
$
4,618,384

 
Daily
 
1 - 2 days
The common trust funds include investments that are operated by a trust company that manages a pooled group of trust accounts. Common trust funds combine the assets of various institutional investors to create a larger, well-diversified portfolio. Each investor owns a participating interest that is calculated in units and represents a portion of the holdings of the fund.
The investments in common trust funds can generally be redeemed without restriction; however, in certain cases, redemption or purchase may be limited to prevent excess and/or short-term trading. There are no unfunded commitments related to the common trust funds.

8




4. Investments
The following investments represent 5% or more of the Plan’s net assets. 
 
 
December 31,
 
 
2012
 
2011
Mutual funds:
 
 

 
 

T. Rowe Price Growth Stock Fund, 54,888 and 63,540 shares, respectively
 
$
2,073,671

 
$
2,022,484

T. Rowe Price Retirement 2015 Fund, 338,037 and 372,102 shares, respectively
 
$
4,353,910

 
$
4,308,937

T. Rowe Price Retirement 2020 Fund, 309,703 and 325,847 shares, respectively
 
$
5,537,487

 
$
5,184,231

T. Rowe Price Retirement 2025 Fund, 324,610 and 304,775 shares, respectively
 
$
4,258,881

 
$
3,529,291

T. Rowe Price Retirement 2030 Fund, 193,906 and 200,247 shares, respectively
 
$
3,668,698

 
$
3,312,088

Common trust funds:
 
 

 
 

T. Rowe Price U.S. Treasury Money Market Trust, 3,522,212 and 3,476,744 shares, respectively
 
$
3,522,212

 
$
3,476,744

During 2012, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated or depreciated in value as follows:
Mutual funds
$
3,602,147

Common trust funds
124,377

Con-way Common Stock
(61,778
)
 
$
3,664,746

5. Income Tax Status
The Internal Revenue Service (IRS) has determined and informed Con-way by a letter dated October 3, 2001, that the Plan and related trust are designed in accordance with applicable sections of the Code. The Plan has been amended since receiving the determination letter. However, Con-way believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. Therefore, Con-way believes that the Plan was qualified and the related trust was tax exempt as of the financial statement date. In 2009, the Plan applied for a new determination letter in accordance with IRS requirements. Con-way and its outside legal counsel are currently working to provide additional information requested by the IRS with respect to the Plan's application.
6. Related-Party Transactions
Certain Plan investments are mutual funds and common trust funds managed by T. Rowe Price, the Plan trustee, as defined. Therefore, these investments and investment transactions qualify as party-in-interest transactions.
The Plan offers Con-way Common Stock as an investment option for participants. Con-way Inc. is the Plan sponsor as defined by the Plan, and, therefore, these transactions qualify as party-in-interest transactions.

9



 
 
 
 
 
 
 
 
Schedule I

CON-WAY 401(k) PLAN
EIN 94-1444798
Plan No. 012
Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2012
 
 
Identity of
 
 
 
 
 
 
 
 
issue, borrower,
 
 
 
 
 
 
 
 
lessor, or
 
Description of investment including maturity date, rate of
 
 
 
Current
 
 
similar party
 
interest, collateral, par, or maturity value
 
Cost
 
value
 
 
 
 
Mutual Funds:
 
 
 
 
*
 
T. Rowe Price
 
Growth Stock Fund (54,888 shares)
 
$
1,770,717

 
$
2,073,671

*
 
T. Rowe Price
 
Equity Income Fund (39,647 shares)
 
922,787

 
1,048,667

*
 
T. Rowe Price
 
Science and Technology Fund (47,787 shares)
 
1,230,187

 
1,300,292

*
 
T. Rowe Price
 
Small-Cap Stock Fund (12,634 shares)
 
405,807

 
429,921

*
 
T. Rowe Price
 
Retirement 2005 Fund (63,070 shares)
 
708,730

 
765,667

*
 
T. Rowe Price
 
Retirement 2010 Fund (83,083 shares)
 
1,262,347

 
1,368,375

*
 
T. Rowe Price
 
Retirement 2015 Fund (338,037 shares)
 
3,968,600

 
4,353,910

*
 
T. Rowe Price
 
Retirement 2020 Fund (309,703 shares)
 
5,009,358

 
5,537,487

*
 
T. Rowe Price
 
Retirement 2025 Fund (324,610 shares)
 
3,818,547

 
4,258,881

*
 
T. Rowe Price
 
Retirement 2030 Fund (193,906 shares)
 
3,260,770

 
3,668,698

*
 
T. Rowe Price
 
Retirement 2035 Fund (99,528 shares)
 
1,191,672

 
1,331,690

*
 
T. Rowe Price
 
Retirement 2040 Fund (63,549 shares)
 
1,075,501

 
1,213,145

*
 
T. Rowe Price
 
Retirement 2045 Fund (36,010 shares)
 
408,371

 
457,685

*
 
T. Rowe Price
 
Retirement 2050 Fund (11,151 shares)
 
105,671

 
118,868

*
 
T. Rowe Price
 
Retirement 2055 Fund (5,821 shares)
 
56,551

 
61,353

*
 
T. Rowe Price
 
Retirement Income Fund (21,793 shares)
 
284,079

 
304,009

 
 
PIMCO
 
PIMCO Total Return Institutional Fund (149,910 shares)
 
1,645,898

 
1,684,991

 
 
Dodge & Cox
 
Dodge & Cox International Stock Fund (28,953 shares)
 
857,018

 
1,002,928

 
 
 
 
Common trust funds:
 
 

 
 

*
 
T. Rowe Price
 
Equity Index Trust Class C (24,040 shares)
 
328,512

 
375,986

*
 
T. Rowe Price
 
Bond Index Trust (11,615 shares)
 
376,467

 
392,129

*
 
T. Rowe Price
 
U.S. Treasury Money Market Trust (3,522,212 shares)
 
3,522,212

 
3,522,212

*
 
T. Rowe Price
 
Retirement Strategy Trust - Balanced (12,583 shares)
 
414,348

 
457,150

 
 
 
 
Common stock:
 
 

 
 

*
 
Con-way Inc.
 
Con-way Common Stock (44,185 shares)
 
1,307,969

 
1,229,228

 
 
 
 
Participant loans:
 
 

 
 

*
 
Plan participants
 
Participant loans with interest from 4.25% to 8.75% and maturity dates through 2017
 

 
1,792,286

 
 
 
 
 
 
 

 
$
38,749,229

*
 
Represents a party-in-interest as of December 31, 2012.
 
 

 
 

 
 
Note: Cost is calculated using the current value rolling-average cost method
 
 
 
 
See accompanying report of independent registered public accounting firm.



10





SIGNATURES
The Plan. 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 hereunto duly authorized.
 
 
Con-way 401(k) Plan
 
 
(Name of Plan)
 
 
 
 
June 25, 2013
/s/ Michael J. Morris
 
 
Michael  J. Morris
 
 
Chairman, Con-way Inc. Administrative Committee
 
 
 


11



EXHIBIT INDEX
 
 

 
Exhibit Number            Exhibit

23.1            Consent of Independent Registered Public Accounting Firm
23.2            Consent of Independent Registered Public Accounting Firm



12