UNITED STATES
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 |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number 333-91478-99
For the fiscal years ended December 31, 2010 and 2009
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
Gateway Western Railway Union 401(k) Plan
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
Kansas City Southern
427 West 12th Street
Kansas City, Missouri 64105-1804
401(k) PLAN
Table of Contents
| Page | ||||
| 1 | ||||
| Financial Statements: |
||||
| Statements of Net Assets Available for Benefits as of December 31, 2010 and 2009 |
2 | |||
| 3 | ||||
| 4 | ||||
| Supplemental Schedule: |
||||
| Schedule H, line 4(i)—Schedule of Assets (Held at End of Year) as of December 31, 2010 |
12 | |||
| Schedule H, Line 4(a)—Schedule of Delinquent Participant Contributions |
13 | |||
| 14 | ||||
| Exhibit: |
||||
| Exhibit 23 — Consent of Independent Registered Public Accounting Firm |
||||
Report of Independent Registered Public Accounting Firm
To the Plan Administrator of
Gateway Western Railway Union 401(k) Plan
Kansas City, Missouri
We have audited the accompanying statements of net assets available for benefits of Gateway Western Railway Union 401(k) Plan as of December 31, 2010 and 2009 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 the auditing 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 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 Gateway Western Railway Union 401(k) Plan as of December 31, 2010 and 2009 and the changes in net assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) and schedule of delinquent participant contributions as of and for the year ended December 31, 2010, are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the United States Department of Labor 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 the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
| /s/ McGladrey & Pullen, LLP |
| Kansas City, Missouri |
| June 15, 2011 |
401(k) PLAN
Statements of Net Assets Available for Benefits
December 31, 2010 and 2009
| 2010 | 2009 | |||||||
| Assets: |
||||||||
| Cash and temporary investments |
$ | — | $ | 3,238 | ||||
| Investments, at fair value: |
||||||||
| Plan interest in the Master Trust |
3,353,650 | — | ||||||
| Common stock of Kansas City Southern |
— | 88,152 | ||||||
| Common collective trust |
— | 420,729 | ||||||
| Mutual funds |
— | 2,442,808 | ||||||
| Total investments |
3,353,650 | 2,951,689 | ||||||
| Contributions receivable: |
||||||||
| Company |
— | 826 | ||||||
| Total contributions receivable |
— | 826 | ||||||
| Total assets |
3,353,650 | 2,955,753 | ||||||
| Liabilities: |
||||||||
| Investment trades payable |
— | 418 | ||||||
| Total liabilities |
— | 418 | ||||||
| Net assets available for benefits at fair value |
3,353,650 | 2,955,335 | ||||||
| Adjustment from fair value to contract value for fully benefit-responsive investment contracts |
— | (8,258 | ) | |||||
| Net assets available for benefits at contract value |
$ | 3,353,650 | $ | 2,947,077 | ||||
See accompanying notes to financial statements.
2
401(k) PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2010 and 2009
| 2010 | 2009 | |||||||
| Additions: |
||||||||
| Investment income in Master Trust: |
||||||||
| Interest and dividends |
$ | 49,869 | $ | — | ||||
| Net appreciation in fair value of investments |
176,615 | — | ||||||
| Total investment income in Master Trust |
226,484 | — | ||||||
| Investment income: |
||||||||
| Interest and dividends |
29,726 | 57,997 | ||||||
| Net appreciation in fair value of investments |
112,358 | 496,785 | ||||||
| Total |
142,084 | 554,782 | ||||||
| Total investment income |
368,568 | 554,782 | ||||||
| Contributions: |
||||||||
| Participant contributions |
146,287 | 135,980 | ||||||
| Company contributions |
71,238 | 59,095 | ||||||
| Total contributions |
217,525 | 195,075 | ||||||
| Total additions |
586,093 | 749,857 | ||||||
| Deductions: |
||||||||
| Fees and expenses |
(4,529 | ) | (4,921 | ) | ||||
| Benefits paid |
(174,991 | ) | (258,796 | ) | ||||
| Total deductions |
(179,520 | ) | (263,717 | ) | ||||
| Increase in net assets available for benefits |
406,573 | 486,140 | ||||||
| Net assets available for benefits: |
||||||||
| Beginning of year |
2,947,077 | 2,460,937 | ||||||
| End of year |
$ | 3,353,650 | $ | 2,947,077 | ||||
See accompanying notes to financial statements.
3
401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
| (1) | Description of the Plan |
The following description of the Gateway Western Railway Union 401(k) Plan (the “Plan”) is provided for general informational purposes only. More complete information regarding the Plan’s provisions may be found in the Plan document.
| (a) | General |
The Plan is a participant-directed, defined contribution plan adopted on July 1, 1997. The Plan covers certain union employees of The Kansas City Southern Railway Company (the “Company”), generally located from Kansas City to East St. Louis, who are members in a craft represented by one of the following organizations: Brotherhood of Locomotive Engineers, Brotherhood of Maintenance of Way Employees, Brotherhood of Railroad Signalmen, International Brotherhood of Electrical Workers, International Association of Machinists and Aerospace Workers. Employees are eligible to participate in the Plan on the first day of each calendar month coincident with or immediately following the employee’s first day of employment. On October 1, 2010, the plan was amended to modify eligibility provisions such that the attainment of age 18 was no longer an eligibility condition for any employee. A Plan participant that ends his or her membership in any of the above collective bargaining units is no longer eligible to make elective deferrals or receive Company matching contributions under the Plan but will continue to be vested under the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
| (b) | Plan Administration |
The Plan is administered by the Advisory Committee which is appointed by the Compensation and Organization Committee of the Company. On October 1, 2010, the Plan’s trustee changed from Charles Schwab Trust Company to Fidelity Management Trust Company (the “Trustee”). In addition, Kansas City Southern (“KCS”), the plan sponsor of the Kansas City Southern 401(k) and Profit Sharing Plan and the Kansas City Southern Employee Stock Ownership Plan, and The Kansas City Southern Railway Company, a subsidiary of KCS and sponsor of the Gateway Western Railway Union 401(k) Plan, entered into an agreement with the Trustee to create the Kansas City Southern Master Trust (the “Master Trust”). The Master Trust includes the investment assets of each of the Plans. The Trustee is responsible for the custody and management of the Plan’s assets.
| (c) | Contributions |
Each year, participants may contribute a portion of their annual eligible compensation, as defined in the Plan document, not to exceed a specified dollar amount as determined by the Internal Revenue Code (IRC). Subject to the terms of the applicable collective bargaining agreements, the Company matches 50% of participant contributions, up to 6% of annual eligible compensation. Upon enrollment in the Plan, a participant may direct their contributions into any of the various funds offered by the Plan which includes Kansas City Southern (NYSE:KSU) common stock as an investment option.
| (d) | Vesting |
Participants are immediately vested in their contributions and Company matching contributions, plus actual Plan earnings thereon.
| (e) | Payment of Benefits |
Distributions generally will be made in the event of retirement, death, disability, resignation, or dismissal. A participant’s normal retirement age is 65. The Plan also provides for distributions at age 59 1/2. Distributions after termination of employment will be made in a lump-sum payment. Balances not exceeding $1,000 will be paid as soon as administratively practicable following the participant’s separation from services, but in no event later than the 60th day following the close of the Plan year which is the later of the year of the participant’s separation from service or the year in which the participant attains normal retirement age (age 65). Balances exceeding $1,000 will be paid upon the distribution date elected by the participant, but in no event will payment commence later than April 1 of the calendar year following the later of the year in which the participant attains age 70 1/2 or the year of the participant’s separation from service. On retirement, death, disability, or termination of service, a participant (or participant’s beneficiary in the event of death) may elect to receive a lump-sum distribution equal to the participant’s vested account balance. In addition, hardship distributions are permitted if certain criteria are met.
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401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
| (f) | Participant Accounts |
Each participant’s account is credited with the participant’s contribution, Company matching contribution, and an allocation of Plan earnings, net of investment expenses. Allocations are based on participant earnings or account balances as set forth in the Plan agreement. The benefit to which a participant is entitled is that which can be provided from the participant’s vested account.
| (g) | Administrative Expenses |
Investment expenses are paid by the Plan as long as Plan assets are sufficient to provide for such expenses. Administrative expenses of the Plan are paid by the Company.
| (2) | Summary of Significant Accounting Policies |
| (a) | Basis of Accounting |
The accompanying financial statements are prepared on the accrual basis of accounting.
Investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for the portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. Prior to October 1, 2010, the Plan invested in one investment contract through a collective trust (the Invesco Stable Value Trust). The statement of net assets available for benefits presents the fair value of the investment in the collective trust as well as the adjustment of the investment in the collective trust from fair value to contract value. The statement of changes in net assets available for benefits is prepared on a contract value basis.
| (b) | Use of Estimates |
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan’s management to use estimates and assumptions that affect the accompanying financial statements and disclosures. Actual results could differ from these estimates.
| (c) | Income Recognition |
Interest income is recorded as earned on the accrual basis. Dividend income is recorded on the ex-dividend date.
| (d) | Investment Valuation |
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 5 for discussion of fair value measurements.
Purchases and sales of securities are recorded on a trade-date basis.
Unsettled security transactions at year end are reflected in the financial statements as investment trades payable or receivable.
| (e) | Net Appreciation (Depreciation) in Fair Value of Investments |
Net realized and unrealized appreciation (depreciation) is recorded in the accompanying statement of changes in net assets available for benefits as net appreciation (depreciation) in fair value of investments. Brokerage fees are added to the acquisition costs of assets purchased and subtracted from the proceeds of assets sold.
| (f) | Payment of Benefits |
Benefit payments are recorded when paid.
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401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
| (g) | New Accounting Standards |
In January 2010, the FASB issued guidance which expanded the required disclosures about fair value measurements. In particular, this guidance requires (i) separate disclosure of the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements along with the reasons for such transfers, (ii) information about purchases, sales, issuances and settlements to be presented separately in the reconciliation for Level 3 fair value measurements, (iii) fair value measurement disclosures for each class of assets and liabilities and (iv) disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements for fair value measurements that fall in either Level 2 or Level 3. This guidance was effective for annual reporting periods beginning after December 15, 2009 except for (ii) above which is effective for fiscal years beginning after December 15, 2010. The Company has adopted this guidance which did not have a material impact on the Plan’s financial statements and disclosures.
| (3) | Investments |
The following investments represent 5% of more of the Master Trust net assets at December 31, 2010:
| Kansas City Southern common stock, 770,478 shares |
$ | 36,876,583 | ||
| Janus Capital Group common stock, 417,388 shares |
5,414,017 | |||
| Vanguard Prime Money Market, 9,664,051 shares |
9,664,051 | |||
| Fidelity Freedom 2015, 470,797 shares |
5,338,838 |
The following investments represent 5% or more of the Plan’s net assets at December 31, 2009:
| Growth Fund of America, 18,431 shares |
$ | 503,708 | ||
| Invesco Stable Value Trust, 412,472 shares |
420,729 | |||
| PIMCO Total Return Administrative Shares, 32,069 shares |
346,344 | |||
| Washington Mutual Investors, 10,633 shares |
262,007 | |||
| EuroPacific Growth, 4,850 shares |
185,944 | |||
| American Balanced, 10,825 shares |
175,468 | |||
| DWS Equity 500 Index, 1,380 shares |
172,692 | |||
| ING International Value Fund, 13,431 shares |
154,187 | |||
| CRM Mid Cap Value Fund/Investment, 6,179 shares |
147,605 | |||
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GATEWAY WESTERN RAILWAY UNION
401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
For the nine months ended September 30, 2010 and the year ended December 31, 2009, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value as follows:
| 2010 | 2009 | |||||||
| Kansas City Southern common stock |
$ | 13,611 | $ | 54,624 | ||||
| Mutual funds: |
||||||||
| Value |
14,408 | 70,424 | ||||||
| Blend |
11,865 | 61,884 | ||||||
| Growth |
22,779 | 187,354 | ||||||
| Balanced |
7,115 | 24,190 | ||||||
| International |
8,654 | 69,891 | ||||||
| Real Estate |
7,305 | 8,938 | ||||||
| Bond Fund - Intermediate |
26,621 | 19,480 | ||||||
| Total net investment appreciation |
$ | 112,358 | $ | 496,785 | ||||
| (4) | Plan Interest in Master Trust |
Effective October 1, 2010, the Plan’s assets are held in a Master Trust. The Master Trust holds the assets of the Kansas City Southern 401(k) and Profit Sharing Plan, Kansas City Southern Employee Stock Ownership Plan and the Gateway Western Railway Union 401(k) Plan (collectively, the “Plans”). The Plans’ record keeper maintains supporting records for the purpose of allocating net assets and net gains or losses of the investments to each of the Plans and to each participant’s account. The net investment income or loss of the investment assets is allocated by the record keeper to each Plan and to each participant’s account based on the investment held in-participant directed account balances.
The net assets of the Master Trust at December 31, 2010 consist of the following:
| Investments, at fair value |
||||
| Common stock of Kansas City Southern |
$ | 36,876,583 | ||
| Common stock of Janus Capital Group |
5,414,017 | |||
| Mutual funds |
59,618,702 | |||
| Net assets available for benefits at fair value |
$ | 101,909,302 | ||
| Net investment in Master Trust - by Plan |
||||
| Kansas City Southern 401(k) and Profit Sharing Plan |
||||
| Investment in Master Trust |
$ | 59,786,596 | ||
| Plan’s percentage interest in net assets of the Master Trust |
59% | |||
| Gateway Western Railway Union 401(k) Plan |
||||
| Investment in Master Trust |
$ | 3,353,650 | ||
| Plan’s percentage interest in net assets of the Master Trust |
3% | |||
| Kansas City Southern Employee Stock Ownership Plan |
||||
| Investment in Master Trust |
$ | 38,769,056 | ||
| Plan’s percentage interest in net assets of the Master Trust |
38% | |||
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GATEWAY WESTERN RAILWAY UNION
401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
Investment income of the Master Trust for the three months ended December 31, 2010 consists of the following:
| Investment income |
||||
| Interest and dividends |
$ | 894,396 | ||
| Net appreciation in fair value of investments |
||||
| Kansas City Southern common stock |
8,386,504 | |||
| Janus Capital Group Income common stock |
838,088 | |||
| Mutual funds |
2,327,343 | |||
| Total net investment appreciation |
11,551,935 | |||
| Net investment income |
$ | 12,446,331 | ||
| Net investment income from Master Trust - by Plan |
||||
| Kansas City Southern 401(k) and Profit Sharing Plan |
$ | 5,609,407 | ||
| Gateway Western Railway Union 401(k) Plan |
226,484 | |||
| Kansas City Southern Employee Stock Ownership Plan |
6,610,440 | |||
| $ | 12,446,331 | |||
| (5) | Fair Value Measurements |
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Plan determines the fair values of its financial instruments based on the fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy is broken down into three levels based upon the observability of inputs. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Plan has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
The following is a description of the valuation methodologies used for assets measured at fair value.
Common stocks: valued at the closing market prices reported on the active market on which the individual securities are traded.
Mutual funds: valued at quoted market prices, which represents the net asset value of the securities held in such funds.
Common collective trust: Prior to October 1, 2010, the Plan held a portion of its assets in a common collective trust. The common collective trust’s (Invesco Stable Value Trust or the “Trust”) primary investment objectives are to provide preservation of principal, maintain a stable interest rate, and provide daily liquidity at contract value for participant withdrawals and transfers. The net asset value is determined as of the close of each business day. Participants’ units are issued and redeemed only at the end of each day and at the net unit value at contract value, providing that the Plan complies with the required one-year notice provision. When the market value of units is less than the contract value, the Plan may also elect to withdraw units at their market value upon 10 days’ notice. The Trust is valued at the net asset value as determined using the estimated fair value of the investments in the respective trust at year end. The Trust holds synthetic guaranteed investment contracts (“synthetic GICs”). Synthetic GICs are portfolios of securities (debt securities or units of collective trusts) owned by the Trust with wrap contracts associated with the portfolios. The fair value of wrap contracts is determined based on the change in the present value of the contract’s replacement cost. Investment contracts may have elements of risk due to lack of a secondary market and resale restrictions which may result in the inability of the Trust to sell a contract at a fair price and may substantially delay the sale of contracts which the Trust seeks to sell. In addition, investment contracts may be subject to credit risk based on the ability of the insurance company or bank to meet interest or principal payments, or both, as they become due.
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GATEWAY WESTERN RAILWAY UNION
401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Assets measured at fair value as of December 31, 2010:
| Fair Value Measurements | Assets at Fair Value |
|||||||||||||||
| Level 1 | Level 2 | Level 3 | ||||||||||||||
| Investment in Master Trust: |
||||||||||||||||
| Common stock of Kansas City Southern |
$ | 36,876,583 | $ | — | $ | — | $ | 36,876,583 | ||||||||
| Common stock of Janus Capital Group |
5,414,017 | 5,414,017 | ||||||||||||||
| Mutual funds: |
||||||||||||||||
| Value |
5,152,428 | — | — | 5,152,428 | ||||||||||||
| Blend |
3,375,467 | — | — | 3,375,467 | ||||||||||||
| Growth |
6,909,916 | — | — | 6,909,916 | ||||||||||||
| Balanced |
1,649,266 | — | — | 1,649,266 | ||||||||||||
| International |
4,316,900 | — | — | 4,316,900 | ||||||||||||
| Real Estate |
632,908 | — | — | 632,908 | ||||||||||||
| Target Date |
23,324,391 | — | — | 23,324,391 | ||||||||||||
| Money Market Fund |
9,664,051 | — | — | 9,664,051 | ||||||||||||
| Bond Fund - Intermediate |
4,593,375 | — | — | 4,593,375 | ||||||||||||
| $ | 101,909,302 | $ | — | $ | — | $ | 101,909,302 | |||||||||
As of December 31, 2010, the fair value of the Plan’s portion of assets held in the Master Trust was $3,353,650. See Note 4 for a further discussion on the Master Trust.
Assets measured at fair value as of December 31, 2009:
| Fair Value Measurements | Assets at | |||||||||||||||
| Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||
| Assets: |
||||||||||||||||
| Common collective trust |
$ | — | $ | 420,729 | $ | — | $ | 420,729 | ||||||||
| Common stock of Kansas City Southern |
88,152 | — | — | 88,152 | ||||||||||||
| Mutual funds: |
||||||||||||||||
| Value |
499,380 | — | — | 499,380 | ||||||||||||
| Blend |
320,297 | — | — | 320,297 | ||||||||||||
| Growth |
716,769 | — | — | 716,769 | ||||||||||||
| Balanced |
175,468 | — | — | 175,468 | ||||||||||||
| International |
340,131 | — | — | 340,131 | ||||||||||||
| Real Estate |
44,419 | — | — | 44,419 | ||||||||||||
| Bond Fund - Intermediate |
346,344 | — | — | 346,344 | ||||||||||||
| $ | 2,530,960 | $ | 420,729 | $ | — | $ | 2,951,689 | |||||||||
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GATEWAY WESTERN RAILWAY UNION
401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
| (6) | Portfolio Risk |
The Plan provides for investments in various securities that, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits.
| (7) | Tax Status |
The Plan received a favorable determination letter from the Internal Revenue Service, dated January 18, 2011, indicating that it is qualified under Section 401(a) of the Internal Revenue Code (the Code), and therefore, the related trust is exempt from tax under Section 501(a) of the Code. The determination letter is applicable for amendments executed through August 23, 2010 and no amendments have been executed subsequently. The Plan administrator believes that the Plan was qualified and the related trust was tax-exempt for the year ended December 31, 2010. Therefore, no provision for income taxes has been included in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan administrator believes it is no longer subject to income tax examinations for tax years prior to 2007.
| (8) | Related Party Transactions |
Certain plan investments are shares of mutual funds managed by Fidelity Management Trust Company, the trustee of the Plan, and certain investments held in the Trust are shares of KCS common stock. These transactions are considered party-in-interest transactions. At December 31, 2010, the fair value of Kansas City Southern common stock shares held in the Master Trust is $36,876,583 and the Plan’s portion held in the Master Trust is $129,018. At December 31, 2009, the fair value of Kansas City Southern common stock shares held in the Plan is $88,152.
| (9) | Plan Termination |
Although it has expressed no intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. Upon termination of the Plan, the participants shall receive amounts equal to their respective account balances.
| (10) | Reconciliation of the Financial Statements to the Form 5500 |
The following is a reconciliation of the net assets available for benefits per the financial statements to the Form 5500:
| 2010 | 2009 | |||||||
| Net assets available for benefits per the financial statements |
$ | 3,353,650 | $ | 2,947,077 | ||||
| Adjustment from contract value to fair value for fully benefit-responsive investment contracts |
— | 8,258 | ||||||
| Net assets available for benefits per the Form 5500 |
$ | 3,353,650 | $ | 2,955,335 | ||||
The following is a reconciliation of the total investment income per the financial statements to the Form 5500:
| 2010 | 2009 | |||||||
| Total investment income per the financial statements |
$ | 368,568 | $ | 554,782 | ||||
| Adjustment from contract value to fair value for fully benefit-responsive investment contracts |
(8,258 | ) | 27,959 | |||||
| Total investment income per the Form 5500 |
$ | 360,310 | $ | 582,741 | ||||
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GATEWAY WESTERN RAILWAY UNION
401(k) PLAN
Notes to Financial Statements
December 31, 2010 and 2009
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500:
| 2010 | 2009 | |||||||
| Benefits paid to participants per the financial statements |
$ | 174,991 | $ | 258,796 | ||||
| Add amounts allocated to withdrawing participants |
— | — | ||||||
| Less prior year amounts allocated to withdrawing participants |
— | (39,387 | ) | |||||
| Benefits paid to participants per the Form 5500 |
$ | 174,991 | $ | 219,409 | ||||
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that were processed and approved for payment prior to December 31, 2010 but not yet paid as of that date.
| (11) | Prohibited Transaction |
During the year ended December 31, 2010, the Company failed to remit to the Trustee certain employee contributions totaling approximately $8,512 within a timely manner. Delays in remitting contributions to the Plan’s trustee were due to administrative errors, and the Company made contributions to the affected participant’s account to compensate in aggregate the approximate lost income due to the delays. There were no prohibited transactions for the year ended December 31, 2009.
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401(k) PLAN
Schedule H, line 4(i)—Schedule of Assets (Held at End of Year)
December 31, 2010
| Identity |
Description |
Fair Value | ||||
| * Plan interest in investment held in Master Trust |
Kansas City Southern Master Trust | $ | 3,353,650 | |||
| Total investments |
$ | 3,353,650 | ||||
| * | Party-in-interest. |
See accompanying report of independent registered public accounting firm.
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401(k) PLAN
Schedule H, line 4(a)—Schedule of Delinquent Participant Contributions
December 31, 2010
| Participant Contributions Transferred Late to Plan |
Total that Constitute Prohibited Non Exempt Transactions |
|||||
| $ | 8,512 | $ | 8,512 | |||
| ¨
Check Here if Late Repayments are Included |
Contributions Not Corrected |
Contributions Corrected Outside VFCP |
Contributions Pending Correction in VFCP |
Total Fully Corrected Under VFCP and PTE 2002-51 |
||||||||||||
| 2010 |
$ | — | $ | 8,512 | $ | — | $ | — | ||||||||
See accompanying report of independent registered public accounting firm.
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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.
| Gateway Western Railway Union 401(k) Plan | ||
| June 15, 2011 | /s/ John E. Derry | |
| John E. Derry Senior Vice President Human Resources | ||
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