SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
REPORT PURSUANT TO
SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For Period Ended March 31, 1997
TANDY FUND
(full title of plan)
TANDY CORPORATION
1800 One Tandy Center
Fort Worth, Texas 76102
(Name of issuer and address of principal executive office)
<PAGE>
TANDY CORPORATION
TANDY FUND
Index to Financial Statements and Supplemental Schedules
March 31, 1997
Page
Report of Independent Accountants......................... 1
Financial Statements:
Statement of Net Assets Available for Benefits with Fund Information
at March 31, 1997...................................... 2-3
Statement of Net Assets Available for Benefits with Fund Information
at March 31, 1996...................................... 4-5
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the Year Ended March 31, 1997.......... 6-7
Statement of Changes in Net Assets Available for Benefits with Fund
Information for the Year Ended March 31, 1996.......... 8-9
Notes to Financial Statement........................... 10-19
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at
March 31,1997.......................................... Schedule I-20
Schedule of Reportable Transactions for the Year Ended
March 31, 1997.......................................... Schedule II-21
Signature Page........................................... 22
Index to Exhibits........................................ 23
Consent of Independent Account........................... 24
Schedules required by ERISA not included herein have been omitted as there were
no transactions for the type required to be disclosed in such schedules.
<PAGE>
Report of Independent Accountants
August 1, 1997
The Administrative Committee and Participants of the Tandy Fund
In our opinion, the accompanying statements of net assets available for benefits
with fund information and the related statements of changes in net assets
available for benefits with fund information present fairly, in all material
respects, the net assets available for benefits of the Tandy Fund at March 31,
1997 and 1996, and the changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
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 of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audits 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the Tandy
Fund 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 Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The Fund
Information in the statements of net assets available for benefits and the
statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and Fund Information 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.
As discussed in Note 2 to the financial statements, the plan changed its method
of valuing investments in Tandy common stock during the year ended March 31,
1996.
/s/ Price Waterhouse LLP
-1-
<PAGE>
TANDY CORPORATION
TANDY FUND
Statement of Net Assets Available for Benefits with Fund
Information
March 31, 1997
<TABLE>
COMPANY-DIRECTED
INVESTMENTS
<CAPTION>
Tandy Tandy
Preferred Preferred Tandycrafts InterTAN Tandy
Stock Stock Common Common Common
Allocated Unallocated Stock Stock Stock
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating employer:
Restricted Preferred Stock (cost $82,668,781)
Allocated (37,906.859 shares outstanding at
March 31, 1997) $42,758,937 $ - $ - $ - $ -
Unallocated (44,761.922 shares outstanding at
March 31, 1997) - 50,491,448 - - -
Common Stock (cost $45,882,855) 1,483,676 shares
outstanding at March 31, 1997 - - 74,369,272
Tandycrafts, Inc. common stock (cost $953) 2,384
shares outstanding at March 31, 1997 - - 10,132 - -
InterTAN, Inc. common stock (cost $7,216) 1,003
shares outstanding at March 31, 1997 - - - 4,012 -
Investments in securities of unaffiliated issuer:
Putnam Income Fund - - - - -
Putnam Voyager Fund - - - - -
Putnam Asset Allocation - Growth Fund - - - - -
Putnam Asset Allocation - Balanced Fund - - - - -
Putnam Asset Allocation - Conservative Fund - - - - -
Other securities - Short-term money market funds:
Putnam Money Market Fund - - - - -
Notes receivable from participants - - - - -
Contributions receivable - Employees - - - - 42,790
Contributions receivable - Employer - 3,608,486 - - -
__________ __________ __________ ___________ ___________
Total assets 42,758,937 54,099,934 10,132 4,012 74,412,062
========== ========== ====== ===== ==========
LIABILITIES
Interest payable - 1,203,635 - - -
Notes payable - 52,219,000 - - -
Total liabilities - 53,422,635 - - -
Net assets available for benefits $ 42,758,937 $ 677,299 $10,132 $4,012 $74,412,062
============= ========== ======= ====== ===========
</TABLE>
<TABLE>
-2-
<PAGE>
PARTICIPANT-DIRECTED INVESTMENTS
<CAPTION>
Putnam Putnam Putnam Putnam Putnam Putnam
Income Voyager AA-Growth AA-Balanced AA-Conservative Money Mkt. Loan Fund Total
------ ------- --------- ----------- --------------- ---------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
$- $ - $ - $ - $ - $ - $ - $42,758,937
- - - - - - - 50,491,448
- - - - - - - 74,369,272
- - - - - - - 10,132
- - - - - - - 4,012
4,251,673 - - - - - - 4,251,673
- 21,575,040 - - - - - 21,575,040
- - 8,918,544 - - - - 8,918,544
- - - 11,286,181 - - - 11,286,181
- - - 2,836,510 - - - 2,836,510
- - - - - 3,454,231 - 3,454,231
- - - - - - 7,682,947 7,682,947
20,032 98,689 35,960 33,761 7,383 21,503 - 260,118
- - - - - - - 3,608,486
_________ __________ _________ __________ _________ _________ _________ ___________
4,271,705 21,673,729 8,954,504 11,319,942 2,843,893 3,475,734 7,682,947 231,507,531
--------- ---------- --------- ---------- --------- --------- --------- -----------
- - - - - - - 1,203,635
- - - - - - - 52,219,000
- - - - - - - 53,422,635
$4,271,705 $21,673,729 $8,954,504 $ 11,319,942 $ 2,843,893 $ 3,475,734 $ 7,682,947 $178,084,896
The accompanying notes are an integral part of these financial statements.
</TABLE>
-3-
<PAGE>
TANDY CORPORATION
TANDY FUND
Statement of Net Assets Available for Benefits with Fund Information
March 31, 1996
<TABLE>
COMPANY-DIRECTED
INVESTMENTS
<CAPTION>
Tandy Tandy
Preferred Preferred Tandy
Stock Stock Common Putnam Putnam
Allocated Unallocated Stock Income Voyager
--------- ----------- ----- ------ -------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating employer:
Restricted Preferred Stock (cost $85,592,957)
Allocated (32,826.152 shares outstanding at
March 31, 1996) $34,894,200 $ - $ - $ - $ -
Unallocated (52,766.805 shares outstanding at
March 31, 1996) - 56,091,114 - - -
Common Stock (cost $46,335,059) 1,290,920 shares
outstanding at March 31, 1996 - - 59,705,080 - -
Investments in securities of unaffiliated issuer:
Putnam Income Fund - - - 3,306,444 -
Putnam Voyager Fund - - - - 13,246,465
Putnam Asset Allocation - Growth Fund - - - - -
Putnam Asset Allocation - Balanced Fund - - - - -
Putnam Asset Allocation - Conservative Fund - - - - -
Other securities - Short-term money market funds:
Putnam Money Market Fund - - - - -
Bank One Money Market Fund - - - - -
Notes receivable from participants - - - - -
Contributions receivable - Employees - - 71,646 21,549 120,974
Contributions receivable - Employer - 2,839,500 - - -
Total assets 34,894,200 58,930,614 59,776,726 3,327,993 13,367,439
LIABILITIES
Interest payable - 1,329,028 - - -
Notes payable - 58,496,000 - - -
Total liabilities - 59,825,028 - - -
Net assets available for benefits $ 34,894,200 $ (894,414) $59,776,726 $ 3,327,993 $ 13,367,439
</TABLE>
-4-
<PAGE>
<TABLE>
PARTICIPANT-DIRECTED INVESTMENTS
<CAPTION>
Putnam Putnam Putnam Putnam Bank One
AA-Growth AA-Balanced AA-Conservative Money Mkt. Money Mkt. Loan Fund Total
--------- ----------- --------------- ---------- ---------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ - $ - $34,894,200
- - - - - - 56,091,114
- - - - - - 59,705,080
- - - - - - 3,306,444
- - - - - - 13,246,465
5,029,799 - - - - - 5,029,799
- 7,357,583 - - - - 7,357,583
- - 2,189,556 - - - 2,189,556
- - - 1,566,681 - - 1,566,681
- - - - 19,802 - 19,802
- - - - - 5,491,400 5,491,400
47,774 47,662 9,854 8,678 - - 328,137
- - - - - - 2,839,500
5,077,573 7,405,245 2,199,410 1,575,359 19,802 5,491,400 192,065,761
- - - - - - 1,329,028
- - - - - - 58,496,000
- - - - - - 59,825,028
$5,077,573 $ 7,405,245 $2,199,410 $ 1,575,359 $19,802 $ 5,491,400 $ 132,240,733
The accompanying notes are an integral part of these financial statements.
</TABLE>
-5-
<PAGE>
TANDY CORPORATION
TANDY FUND
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the Year Ended March 31, 1997
<TABLE>
COMPANY-DIRECTED
INVESTMENTS
<CAPTION>
Tandy Tandy
Preferred Preferred Tandycrafts InterTAN Tandy
Stock Stock Common Common Common
Allocated Unallocated Stock Stock Stock
--------- ----------- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Investment income
Dividends - participating employer $ 2,242,525 $ - $- $ - $ 974,355
Dividends - other - - - - -
____________ _________ ___________ _________ __________
2,242,525 - - - 974,355
Net appreciation (depreciation) in fair
value of securities:
Employer securities 2,032,932 3,429,842 - - 5,663,717
Other securities - - - - -
____________ __________ ____________ __________ _________
2,032,932 3,429,842 - - 5,663,717
____________ __________ ____________ __________ _________
Contributions:
Employee - - - 3,418,735
Employer - 12,129,455 - - 500,000
____________ __________ ____________ __________ _________
- 12,129,455 - - 3,918,735
Other additions (deductions):
Transfer from TIP - - 10,132 4,012 14,929,805
Release of preferred shares proportionate
to paydown of note payable (1) 6,786,983 (9,029,508) - - -
Interfund transfers, net - - - - (5,084,331)
Loans and repayments (including interest), - - - - (1,295,724)
net
Other - - - - (29,620)
_____________ ___________ ___________ ___________ ___________
6,786,983 (9,029,508) 10,132 4,012 8,520,130
_____________ ___________ ___________ ___________ ___________
Total 11,062,440 6,529,789 10,132 4,012 19,076,937
Less:
Withdrawals and termination payments 3,197,703 - - - 4,441,601
Interest expense - 4,958,076 - - -
_____________ __________ ___________ ___________ __________
Net increase (decrease) in plan assets 7,864,737 1,571,713 10,132 4,012 14,635,336
Plan equity at beginning of year 34,894,200 (894,414) - - 59,776,726
__________ __________ __________ ___________ __________
Plan equity at end of year $ 42,758,937 $ 677,299 $10,132 $ 4,012 $74,412,062
============ ========== ======= ======== ===========
<FN>
(1) Shares released includes dividends on allocated preferred stock.
</FN>
</TABLE>
-6-
<PAGE>
<TABLE>
PARTICIPANT-DIRECTED INVESTMENTS
<CAPTION>
Putnam Putnam Putnam Putnam Putnam-AA Putnam Bank One
Income Voyager AA-Growth AA-Balanced Conservative Money Mkt. Money Mkt. Loan Fund Total
------ ------- --------- ----------- ------------ ---------- ---------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ - $ - $ - $ - $ 3,216,880
259,876 1,317,225 412,494 759,407 174,397 113,979 - - 3,037,378
__________ __________ __________ __________ __________ _________ __________ __________ ___________
259,876 1,317,225 412,494 759,407 174,397 113,979 - - 6,254,258
- - - - - - - - 11,126,491
(51,590) (1,609,332) 428,291 416,237 53,516 - - - (762,878)
__________ __________ __________ __________ __________ _________ __________ _________ ____________
(51,590) (1,609,332) 428,291 416,237 53,516 - - - 10,363,613
1,381,710 7,494,253 2,818,748 2,623,138 513,952 1,480,777 - - 19,731,313
- - - - - - - - 12,629,455
__________ __________ __________ __________ __________ _________ ___________ _________ ____________
1,381,710 7,494,253 2,818,748 2,623,138 513,952 1,480,777 - - 32,360,768
- - - - - - - - 14,943,949
- - - - - - - - (2,242,525)
(232,597) 2,989,781 873,633 700,590 141,884 611,040 - - -
(81,548) (414,265) (111,098) (179,183) (46,630) (76,412) - 2,204,860 -
(1,438) (6,460) (5,033) (1,359) (1,059) 109,635 - (13,313) 51,353
__________ __________ __________ __________ ___________ _________ ___________ __________ ___________
(315,583) 2,569,056 757,502 520,048 94,195 644,263 - 2,191,547 12,752,777
__________ __________ __________ __________ ___________ _________ ___________ __________ ___________
1,274,413 9,771,202 4,417,035 4,318,830 836,060 2,239,019 - 2,191,547 61,731,416
330,701 1,464,912 540,104 404,133 191,577 338,644 19,802 - 10,929,177
- - - - - - - 4,958,076
__________ __________ __________ __________ ___________ _________ ___________ __________ ___________
943,712 8,306,290 3,876,931 3,914,697 644,483 1,900,375 (19,802) 2,191,547 45,844,163
3,327,993 13,367,439 5,077,573 7,405,245 2,199,410 1,575,359 19,802 5,491,400 132,240,733
__________ __________ __________ __________ ___________ _________ ___________ __________ ___________
$4,271,705 $ 21,673,729 $ 8,954,504 $ 11,319,942 $ 2,843,893 $3,475,734 $ - $7,682,947 $178,084,896
========== ============ =========== ============ =========== ========== ========== ========== ============
The accompanying notes are an integral part of these financial statements.
</TABLE>
-7-
<PAGE>
TANDY CORPORATION
TANDY FUND
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the Year Ended March 31, 1996
<TABLE>
COMPANY-DIRECTED
INVESTMENTS
<CAPTION>
Tandy Tandy
Preferred Preferred Tandy
Stock Stock Common Putnam Putnam
Allocated Unallocated Stock Income Voyager
<S> <C> <C> <C> <C> <C>
Investment income
Dividends - participating employer $ 1,860,466 $ - $ 395,230 $ - $ -
Dividends/interest - other - - - 52,536 -
____________ _____________ _________ ________ ___________
1,860,466 - 395,230 52,536 -
Net appreciation (depreciation) in fair
value of securities:
Employer securities 48,193 61,184 (5,855,698) - -
Other securities - - - (115,700) 873,288
____________ _____________ _________ ________ ___________
48,193 61,184 (5,855,698) (115,700) 873,288
Contributions:
Employee - - 3,467,400 405,578 1,992,894
Employer - 2,839,500 - - -
- 2,839,500 3,467,400 405,578 1,992,894
Other additions (deductions):
Transfers from TESOP fund
Preferred stock 27,157,724 64,555,132 - - -
Notes payable - (58,496,000) - - -
Release of preferred shares proportionate
to paydown of note payable (1) 6,664,736 (8,525,202) - - -
Interfund transfers, net - - (31,029,567) 3,022,697 10,702,323
Loans and repayments (including interest),
net - - 309,980 (2,371) 650
____________ _____________ _________ ________ ___________
33,822,460 (2,466,070) (30,719,587) 3,020,326 10,702,973
____________ _____________ _________ ________ ___________
Total 35,731,119 434,614 (32,712,655) 3,362,740 13,569,155
Less:
Withdrawals and termination payments 836,919 - 2,187,074 34,747 201,716
Interest expense - 1,329,028 - - -
____________ _____________ _________ ________ ___________
Net increase (decrease) in plan assets 34,894,200 (894,414) (34,899,729) 3,327,993 13,367,439
Cumulative effect of change in accounting
principle - - 495,688 - -
Plan equity at beginning of year - - 94,180,767 - -
____________ _____________ _________ ________ ___________
Plan equity at end of year $ 34,894,200 $ (894,414) $59,776,726 $3,327,993 $ 13,367,439
============ =========== =========== ========== ============
<FN>
(1) Shares released includes dividends on allocated preferred stock.
</FN>
</TABLE>
-8-
<PAGE>
<TABLE>
PARTICIPANT-DIRECTED INVESTMENTS
<CAPTION>
Putnam Putnam Putnam Putnam Bank One
AA-Growth AA-Balanced AA-Conservative Money Mkt. Money Mkt. Loan Fund Total
--------- ----------- --------------- ---------- ---------- --------- -----
<S> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ 1,064,496 $ - $ 3,320,192
- 32,484 13,380 18,537 292,460 - 409,397
___________ ____________ _______________ _________ ___________ __________ ___________
- 32,484 13,380 18,537 1,356,956 - 3,729,589
- - - - - - (5,746,321)
274,736 305,897 34,731 - - - 1,372,952
___________ ____________ _______________ _________ ___________ __________ ___________
274,736 305,897 34,731 - - - (4,373,369)
___________ ____________ _______________ _________ ___________ __________ ___________
789,539 767,581 148,209 168,729 4,563,968 - 12,303,898
- - - - - - 2,839,500
___________ ____________ _______________ _________ ___________ __________ ___________
789,539 767,581 148,209 168,729 4,563,968 - 15,143,398
___________ ____________ _______________ _________ ___________ __________ ___________
- - - - - - 91,712,856
- - - - - - (58,496,000)
- - - - - - (1,860,466)
4,115,418 6,345,917 2,010,956 1,401,131 3,431,125 - -
(2,312) 3,171 5,101 (6,737) (1,376,308) 1,068,826 -
___________ ____________ _______________ _________ ___________ __________ ___________
4,113,106 6,349,088 2,016,057 1,394,394 2,054,817 1,068,826 31,356,390
___________ ____________ _______________ _________ ___________ __________ ___________
5,177,381 7,455,050 2,212,377 1,581,660 7,975,741 1,068,826 45,856,008
99,808 49,805 12,967 6,301 10,771,237 - 14,200,574
- - - - - - 1,329,028
___________ ____________ _______________ _________ ___________ __________ ___________
5,077,573 7,405,245 2,199,410 1,575,359 (2,795,498) 1,068,826 30,326,404
- - - - - - 495,688
- - - - 2,815,300 4,422,574 101,418,641
___________ ____________ _______________ _________ ___________ __________ ___________
$ 5,077,573 $ 7,405,245 $ 2,199,410 $ 1,575,359 $ 19,802 $ 5,491,400 $ 132,240,733
=========== =========== =========== =========== =========== =========== =============
The accompanying notes are an integral part of these financial statements.
</TABLE>
-9-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the Tandy Fund (the "Plan") provides only general
information. Participants should refer to the Plan prospectus, the summary Plan
description or the Plan document for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan covering employees of Tandy Corporation
("the Company") who have completed one year of service of not less than 1,000
hours per year. Effective January 1, 1996, the Tandy Employees Stock Ownership
Plan ("TESOP"), a leveraged employee stock ownership plan, was amended and
merged with the Tandy Employees Deferred Salary and Investment Plan ("DIP"), and
renamed the Tandy Fund. Other changes made to the Tandy Fund on that date
provided that it be an individual account plan with multiple,
participant-directed investment options which are intended to comply with
Internal Revenue Code Section 404(c).
The Plan is subject to Titles I and II of the Employee Retirement Income
Security Act of 1974 (ERISA) relating to the protection of employee benefit
rights and amendments to the Internal Revenue Code, respectively, but is not
subject to Title IV, relating to plan termination insurance coverage.
As of March 31, 1997 and 1996, there were 10,178 and 11,495 employees of the
Company participating in the Plan and 19,774 and 20,166 employees eligible to
participate, respectively.
Merger of the TESOP
As noted above, effective January 1, 1996, the assets and liabilities of the
TESOP were merged into the Plan at their fair market value on the date of
transfer. The following is a listing of the assets and liabilities transferred:
Tandy Corporation Series "B"
Convertible Preferred Stock
---------------------------
Net Assets
Allocated* Unallocated* Debt** Transferred
---------- ------------ ------ -----------
Shares 25,572.24 60,786.38 - -
Market price per share $ 1,062 $ 1,062 - -
___________ ___________ _________ ____________
Market value $27,157,724 $64,555,132 $(58,496,000) $ 33,216,856
=========== =========== ============ ============
Cost $25,572,245 $60,786,377 $(58,496,000) $ 27,862,622
=========== =========== ============ ============
* Represents securities of Tandy Corporation, which is a party in interest.
** Plan debt is guaranteed by Tandy Corporation.
-10-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
Total Company contributions and dividends remitted to the TESOP amounted to
$11,215,518 for the nine month period ended December 31, 1995.
Merger of the TIP
Effective March 31, 1997, the Tandy Employees Investment Plan (the "TIP," a
frozen plan) was merged into the Tandy Fund and the respective assets were
transferred in at their respective fair market values on the date of transfer.
Change in Trustee
Effective October 1, 1995, the Plan's Administrative Committee appointed Putnam
Fiduciary Trust Company as the Plan's trustee and instructed Bank One Trust
Company, NA (the previous trustee) to continue processing certain transactions
until such conversion was complete. The conversion was subsequently completed on
December 22, 1995.
Methods of Operation
The Tandy Fund is a defined-contribution plan consisting of a Company-directed
portion (which includes an ESOP) and a participant-directed portion.
The ESOP portion of the Plan is comprised of two accounts; the "Suspense"
account and the "Stock" account.
The "Suspense" account had an original unallocated share account which consisted
of 100,000 shares of Tandy Corporation Series B TESOP Convertible Preferred
Stock ("Stock"). The Stock was purchased in July 1990 with funds obtained
through a one hundred million dollar ($100,000,000) borrowing. Each share of
preferred stock is convertible into 21.78 shares of Tandy common stock and its
minimum resale value is guaranteed by the Company to be $1,000 per share. This
series of stock has certain liquidation preferences and may be redeemed by the
Company at specified premiums. The borrowing is discussed in Note 2.
The unallocated shares of Stock and their related debt are held in the
"Suspense" account. Funds are derived from Company contributions and dividends
paid on the Stock. These funds are used to pay the debt which releases a pro
rata portion of the Stock and the Stock released is allocated to the individual
"Stock" accounts of the participants. The allocation to participants' accounts
occurs on March 31 of each plan year.
The "Stock" account represents the participants' interests in Stock that have
been allocated to the participants' individual accounts from the "Suspense"
account.
There were approximately 37,907 and 32,826 shares of Stock held in the
individual "Stock" accounts of participants as of March 31, 1997 and 1996,
respectively.
For periods prior to October 1, 1990, the Company contributed an additional
amount to the Plan equal to 80% of the amount of the employee's deferred salary
contribution. The Company's 80% matching contributions under the Plan were
terminated effective October 1, 1990, the date of commencement of employer
contributions under the TESOP.
-11-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
Prior to January 1, 1996, participants' contributions were invested in Company
common stock ("Common Stock") only. Effective January 1, 1996, as a result of
the amendment and restatement of the Plan, participants were provided with the
option to direct their contributions in various investment options each of which
is described in more detail in Note 4. Participants may elect to contribute
portions of their total contributions to the various investment options in
increments of 5%.
Participant Contributions
Prior to January 1, 1996, participants were able to defer 5% of their gross
salary which was paid into the Plan via direct salary reductions. Effective
January 1, 1996, as a result of the restatement and amendment of the Plan,
participants are now allowed to defer (in increments of 1%) a minimum of 1% of
gross salary and wages up to a maximum of 8%. Contributions per participant are
limited to certain annual maximums as set forth by the Internal Revenue Code.
Participants are not subject to current federal income taxation on their
deferred contributions to the Plan.
Company Contributions
For periods prior to January 1, 1996, Company contributions were made to the
TESOP. Subsequent to January 1, 1996, Company contributions are made directly to
the Tandy Fund through the TESOP portion of the Plan. Participants become fully
vested in Company contributions upon the earlier to occur of five years of
service with the Company or three years of participation in the Plan.
The Company is obligated to make semi-annual contributions to the Plan to enable
it to pay principal and interest on the indebtedness directly associated with
the Stock. Cash dividends are paid on shares of Stock semiannually on June 30
and December 31 at the rate of 7.5% per annum. Cash dividends paid on all shares
of Stock and additional cash contributed by the Company to the Plan are used to
make payments of principal and interest on the debt that was created to purchase
the Stock. As the debt is reduced, a pro rata number of shares of Stock is
released and allocated to participants' "Stock" accounts on March 31 of each
year. The allocation is based on the total number of shares to be allocated less
shares allocated in lieu of cash dividends, multiplied by a fraction equal to
the amount of a participants' deferred salary contribution to the Plan over the
total deferred salary contributions of all participants in the Plan for the
current Plan year.
As a result of using dividends to pay down the principal on the debt, shares of
Stock equal to the value of the dividend are released and allocated to
participants' accounts. The amount of dividends allocated to a participant is an
amount equal to the number of shares released multiplied by a fraction, the
numerator of which is the number of a participant's shares owned on the
allocation date, and the denominator of which is the total shares owned by all
participants.
Effective March 31, 1997, Tandy Corporation made a discretionary contribution of
9,975 shares of Tandy common stock to the Tandy Fund.
Participants' Accounts
Prior to January 1, 1996, participants' ESOP accounts were valued as of the last
day of each March, June, September and December. Subsequent to January 1, 1996,
participants' ESOP accounts were valued as of the last day of each month.
Participants' investments in Common stock and in the various other investment
options are valued daily. Each participant is mailed a quarterly statement
showing their contributions, Company contributions, total contributions and the
market value of their account. Each participant is also mailed a copy of the
annual report of Tandy Corporation, any Tandy Stock Plan/Plan prospectus
incorporated by reference into the registration statement on Form S-8 or an
appendix to the prospectus, any material amendment made to any
-12-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
revised summary plan description booklet and the summary annual report. New
participants also receive the latest prospectus.
Vesting
A participant who was an employee on September 30, 1990, is fully vested at all
times in all shares allocated to his or her Stock account, along with earnings
thereon and forfeitures of terminated participants' nonvested accounts. A
participant who does not meet this requirement will become fully vested upon the
earlier to occur of five years of service with the Company or three years of
participation in the Plan. Participants are immediately vested in their deferred
and voluntary contributions to the Plan plus actual earnings thereon.
Payments of Benefits
Participants who withdraw from the plan may receive the vested portion of their
accounts under one of four withdrawal methods, which are summarized below:
. Lump sum payment in cash
. Purchase of an annuity contract to provide regular monthly income over a
designated period of time, of not less than two years nor more than fifteen
years (or the participant's actual life expectancy, if shorter)
. Equal monthly cash installments for a period of up to ten years
(or the participant's actual life expectancy, if shorter)
. Part cash and part securities
Forfeited Accounts
Forfeited nonvested accounts of terminated participants are allocated among the
remaining participants' accounts. A total of $541,149 and $485,274 was allocated
to participants' accounts as a result of forfeitures for the years ended March
31, 1997 and 1996, respectively. For the year ended March 31, 1996, only
$145,215 of forfeitures are reflected in the Tandy Fund as a result of the
merger of the TESOP on January 1, 1996. The remainder is reflected in the TESOP
financial statements for the nine-month period ended December 31, 1995.
Loans to Participants
A participant may borrow up to 50% of his or her vested account value in the
Plan not to exceed the lesser of: 1) $50,000 or 2) an amount that can be fully
repaid by payroll deduction payments that do not exceed 25% of the participant's
regular gross wages. The minimum loan amount is $500, to be repaid through
authorized payroll deductions. The term of a loan may not be less than six
months (or multiples of six months) and not more than five years. The interest
rate of the loan is fixed by the Administrative Committee and based on the
interest rate currently being charged for similar commercial loans. The weighted
average interest rate charged on participant loan balances was 9.85% and 8.57%
for the years ended March 31, 1997 and 1996, respectively. Interest received on
participant loans was $649,024 and $424,592 for the years ended March 31, 1997
and 1996, respectively. A portion, not to exceed 50%, of the participant's
dollar value interest in the Plan, is pledged as collateral for the amount of
principal, interest and any collection costs which may be owed to the Plan.
-13-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Plan financial statements are prepared under the accrual method of
accounting.
Reclassifications of Prior Year Amounts
Certain amounts in the prior year financial statements have been reclassified to
conform to the current year presentation.
Change in Accounting Principle
Prior to fiscal 1996, Tandy common stock was valued at its closing market price
on the New York Stock Exchange less $0.25 per share. The Company discontinued
this practice in fiscal 1996 and commenced valuing Tandy Common Stock at its
closing market price. As a result, approximately $496,000 is reflected in the
Statement of Changes in Net Assets Available for Benefits with Fund Information
for the year ended March 31,1996 as the cumulative effect of change in
accounting principle.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of registered investment
companies are valued at quoted market prices which represent the net asset value
of shares held by the Plan at year-end. Tandy common stock is valued at its
closing market price. Tandy preferred stock is valued on a monthly basis by an
independent, third-party appraiser. Participant loans are valued at cost which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date. Net appreciation or depreciation of
investments as reported in the statement of changes in net assets available for
plan benefits is calculated based on a revalued cost method basis as required by
ERISA.
Contributions
Contributions from participants are accrued in the period in which they are
deducted in accordance with salary deferral agreements, and as such, become
obligations of the Company.
Notes Payable
The "1990 Notes" were issued under an indenture dated June 30, 1990 in
denominations of $1,000 limited to $100,000,000 aggregate principal amount that
have a final maturity of June 30, 2000 and are guaranteed by the Company. The
1990 Notes bear interest at 9.34% per annum payable semiannually on each
December 30 and June 30 from December 30, 1990 through June 30, 2000.
On December 15, 1994, the Plan entered into an agreement with an unrelated third
party to refinance a portion of the 1990 Notes by borrowing $5,063,000 at an
interest rate of 8.76% to retire a portion of the $100,000,000 indebtedness.
Under this same agreement, the Plan borrowed an additional $4,303,000 and
$3,523,000 at interest rates of 6.47% and 7.01% on December 28, 1995 and
December 27, 1996, respectively. These new notes are also guaranteed by the
Company and mature on December 30, 2000, December 30, 2001 and December 30,
2001, respectively. Maturities of the Notes are as follows:
-14-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
For the Plan's Fiscal Year:
4/1/97 - 3/31/98 $12,300,000
4/1/98 - 3/31/99 $12,425,000
4/1/99 - 3/31/00 $10,125,000
4/1/00 - 3/31/01 $ 9,543,000
4/1/01 - 3/31/02 $ 7,826,000
The fair value of the Plan's total debt of $52,219,000 and $58,496,000 is
approximately $54,866,397 and $62,612,094 at March 31, 1997 and 1996,
respectively.
Expenses of the Plan
At March 31, 1997, the trustee was responsible for both the management and
record keeping of the Plan's assets. Prior to January 1, 1996, the Plan sponsor
was responsible for the record keeping of the Plan's assets. Administrative
expenses of the Plan are paid directly to the trustee by the Company and thus
are not a component of the changes in net assets available for Plan benefits.
Concentration of Plan Assets
The Tandy Fund has approximately 72% and 78% of its total assets (including
unallocated Stock) invested in securities of its sponsor, Tandy Corporation, at
March 31, 1997 and 1996, respectively.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 3 - UNIT VALUE
Valuation
Quarter Ending Number of Units per Unit
March 31, 1995 71,703,789.8705 $1.4152771
June 30, 1995 69,024,311.4136 $1.5406053
September 30, 1995 68,305,731.4478 $1.8078888
Subsequent to September 30, 1995, the Plan no longer assigned units to
participants.
-15-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
NOTE 4 - INVESTMENTS
The following is a summary description of the various participant-directed
investment options. Participants should refer to the brochures and prospectuses
for each of the respective mutual funds and Company Common Stock for more
complete information including risks associated with investment options.
Tandy Corporation Common Stock - Funds are invested in common stock of Tandy
Corporation.
Putnam Voyager Fund - Funds are invested in shares of a registered investment
company that invests primarily in common stocks of companies (a significant
portion of which may be invested in securities of smaller and newer issuers).
This fund may also purchase convertible bonds, convertible preferred stocks,
warrants, preferred stocks, debt securities and may hold a portion of its
assets in cash or money market instruments. This fund may also invest up to 20%
of its assets in securities principally traded in foreign markets.
Putnam Asset Allocation Fund: Growth Portfolio - Funds are invested in shares
of a registered investment company that invests primarily in equity and fixed
income securities with a strategic allocation which is more heavily weighted
towards the equity class. The equity class portion of the fund may invest in
equity instruments of larger companies as well as smaller and less well-known
companies. The fixed income portion of the fund will typically include a
portfolio of debt securities, including both U.S. and foreign government
obligations and corporate obligations. This portion of the fund may also invest
in money market instruments and lower-rated fixed income securities. This fund
may also invest up to 40% of its assets in securities principally traded in
foreign markets.
Putnam Asset Allocation Fund: Balanced Portfolio - Funds are invested in shares
of a registered investment company that invests primarily in equity and fixed
income securities with a strategic allocation which is slightly weighted
towards the equity class. The equity class portion of the fund may invest in
equity instruments of larger companies as well as smaller and less well-known
companies. The fixed income portion of the fund will typically include a
portfolio of debt securities, including both U.S. and foreign government
obligations and corporate obligations. This portion of the fund may also invest
in money market instruments and lower-rated fixed income securities. This fund
may also invest up to 40% of its assets in securities principally traded in
foreign markets.
Putnam Asset Allocation Fund: Conservative Portfolio - Funds are invested in
shares of a registered investment company that invests primarily in equity and
fixed income securities with a strategic allocation which is more heavily
weighted towards the fixed income class. The equity class portion of the fund
may invest in equity instruments of larger companies as well as smaller and
less well-known companies. The fixed income portion of the fund will typically
include a portfolio of debt securities, including both U.S. and foreign
government obligations and corporate obligations. This portion of the fund may
also invest in money market instruments and lower-rated fixed income
securities. This fund may also invest up to 30% of its assets in securities
principally traded in foreign markets.
Putnam Income Fund - Funds are invested in shares of a registered investment
company that invests primarily in fixed-income securities such as debt
securities, including both government and corporate obligations, preferred
stocks, dividend-paying common stocks and may hold a portion of its assets in
cash or money market instruments. This fund may also invest up to 20% of its
assets in securities principally traded in foreign markets.
-16-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
Putnam Money Market Fund - Funds are invested in shares of a registered
investment company that invests primarily in short-term, high-quality money
market instruments such as bank certificates of deposit, bankers' acceptances,
prime commercial paper, corporate obligations, municipal obligations, U.S.
Government securities and repurchase agreements. This fund may also invest
without limit in U.S. dollar denominated
commercial paper of foreign issuers and in bank certificates of deposit and
bankers' acceptances payable in U.S. dollars and issued by foreign banks or by
foreign branches of U.S. banks.
The following investments, at fair value, represented 5% or more of net assets
available for Plan benefits as of March 31, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Tandy Common Stock -
1,483,676 and 1,290,920 shares at March 31, 1997
and 1996, respectively $74,369,272 $59,705,080
Series B TESOP Convertible Preferred Stock -
Allocated 37,906.859 and 32,826.152 shares
at March 31, 1997 and 1996, respectively 42,758,937 34,894,200
Series B TESOP Convertible Preferred Stock -
Unallocated 44,761.922 and 52,766.805 shares
at March 31, 1997 and 1996, respectively 50,491,448 56,091,114
Putnam Voyager Fund -
1,410,133 and 818,188 shares at March 31, 1997
and 1996, respectively 21,575,040 13,246,465
Putnam AA - Growth Fund -
787,162 and 478,118 shares at March 31, 1997
and 1996, respectively 8,918,544 5,029,799
Putnam AA - Balanced Fund -
1,071,812 and 736,495 shares at March 31, 1997
and 1996, respectively 11,286,181 7,357,583
</TABLE>
NOTE 5 - TAX STATUS OF THE PLAN
The Plan has received a determination letter from the Internal Revenue Service.
The Plan has subsequently been restated and amended and management will request
a similar determination letter from the Internal Revenue Service for the Plan,
as restated and amended. Management believes that the Plan is qualified under
Section 401(a) of the Internal Revenue Code and applicable sections of ERISA
and, therefore, the trust is exempt from taxation under Section 501(a).
Accordingly, employee contributions, employer contributions, and earnings of the
Plan are not taxable to participants until distributed. Management is unaware of
violations in the operation of the Plan from the terms of the Plan documents, as
amended. Management intends to maintain the Plan's qualification under the
Internal Revenue Code and ERISA.
-17-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
NOTE 6 - RELATED PARTY TRANSACTIONS
During 1996, Tandy common stock was sold to the Company at its current market
value on the transaction date in the amount of $32,059,882. No such sale
occurred during 1997. In addition, the Company redeemed $3,197,703 and $836,919
of Series B Convertible Preferred Stock from the Plan during 1997 and 1996,
respectively.
NOTE 7 - ADMINISTRATION OF PLAN ASSETS
The Plan is administered by an Administrative Committee comprising up to three
persons appointed by the Company's Board of Directors. The trust department of
an independent third party fiduciary trust company is the Plan's Trustee.
Certain administrative functions are performed by employees of the Company with
no compensation from the Plan.
Administrative expenses and Trustee fees are paid directly by the Company.
NOTE 8 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for Plan benefits per
the financial statements to the Form 5500:
March 31,
1997
___________
Net assets available for Plan benefits
per the financial statements $178,084,896
Less: Benefit obligations currently payable (248,574)
___________
Net assets available for Plan benefits
per the Form 5500 $177,836,322
============
-18-
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED MARCH 31, 1997 AND 1996
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended
March 31,
1997
____________
Benefits paid to participants per the
financial statements $10,929,177
Add: Benefit obligations payable at end of year 248,574
____________
Benefits paid to participants per the Form 5500 $11,177,751
===========
Amounts currently payable to or for participants, dependents, and beneficiaries
are recorded on the Form 5500 per benefit claims that have been processed and
approved for payment prior to March 31, 1997, but not yet paid as of that date.
-19-
<PAGE>
<TABLE>
Tandy Corporation Schedule I
Tandy Fund
Item 27A - Schedule of Assets Held for Investment Purposes
March 31, 1997
- --------------------------------------------------------------------
<CAPTION>
Identify of issue, borrower, Description of investment including maturity date,
lessor or similar party rate of interest, collateral, par or maturity date Cost Current Value
----------------------- -------------------------------------------------- ---- -------------
<S> <C> <C> <C>
Tandy Corporation * Common stock - 1,483,676 shares outstanding at
March 31, 1997 $ 45,882,857 $ 74,369,272
Tandy Corporation * Restricted Preferred Stock -
Allocated - 37,906.859 shares outstanding
at March 31, 1997
Unallocated - 44,761.922
outstanding at March 31, 1997 82,668,781 93,250,385
Tandy Crafts Common stock - 2,384 shares outstanding at
March 31, 1997 953 10,132
InterTAN Common stock - 1,003 shares outstanding at
March 31, 1997 7,216 4,012
Putnam Income Fund - 620,679.938 shares outstanding at
March 31, 1997 4,387,323 4,251,673
Putnam Voyager Fund - 1,410,133.348 shares outstanding
at March 31, 1997 22,523,064 21,575,040
Putnam Asset Allocation - Growth Portfolio - 787,161.893
shares outstanding at March 31, 1997 8,332,295 8,918,544
Putnam Asset Allocation - Balanced Portfolio
1,071,812.026 shares outstanding at
March 31, 1997 10,662,689 11,286,181
Putnam Asset Allocation - Conservative Portifolio-
296,704.450 shares outstanding at
March 31, 1997 2,766,929 2,836,510
Putnam Money Market Fund 3,454,231 3,454,231
Various participants Participant loans receivable - terms of 6 months
5 years, interest rates of 7% - 10% - 7,682,947
__________ __________
Total $180,686,336 $227,638,927
</TABLE>
-20-
<PAGE>
<TABLE>
Tandy Corporation Schedule II
Tandy Fund
Item 27D - Schedule of Reportable Transactions
Year Ended March 31, 1997
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Identity Description Purchase Selling Lease Expense Cost Current value Net
of party of asset price price rental incurred of of asset on gain
involved with asset transaction or (loss)
transaction date
_________ ____________ _________ ________ _______ ___________ _______ ____________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Putnam Voyager Fund
Purchases $ 14,460,779 - - $14,460,779 $14,460,779 -
Sales $ 4,527,654 - - $ 4,343,183 $ 4,527,654 $ 184,471
Tandy
Corporation Common stock
Purchases $ 8,217,508 - - $ 8,217,508 $ 8,217,508 -
$14,158,235 - - $10,847,776 $14,158,235 $ 3,310,459
</TABLE>
-21-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this report to be signed by the
undersigned hereunto duly authorized.
Tandy Fund
by: /s/ J. H. Bradley
-----------------
J. H. Bradley
Administrative Committee Member
by: /s/ D. Johnson
--------------
D. Johnson
Administrative Committee Member
by: /s/ D. Christopher
------------------
D. Christopher
Administrative Committee Member
Date: September 23, 1997
-22-
<PAGE>
INDEX TO EXHIBITS
Exhibit Description Page
Number of Exhibit Number
------ ----------- ------
23 Consent of 24
Independent
Accountants
-23-
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of Tandy Corproation of our report dated August 1, 1997
relating to the financial statements of the Tandy Fund, which appears in the
current Report on Form 11-K dated September 23, 1997.
PRICE WATERHOUSE LLP
Fort Worth, Texas
September 23, 1997
-24-
