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 the Period Ended March 31, 1998
TANDY FUND
(full title of Program)
TANDY CORPORATION
100 Throckmorton Street
Suite 1800
Fort Worth, Texas 76102
(Name of issuer and address of principal executive offices)
<PAGE>
TANDY CORPORATION
TANDY FUND
Index to Financial Statements and Supplemental Schedules
March 31, 1998
- ---------------------------------------------------------------------------
Report of Independent Accountants................ 1
Financial Statements:
Statement of Net Assets Available for Benefits,
with Fund Information - March 31, 1998....... 2-3
Statement of Net Assets Available for Benefits,
with Fund Information - March 31, 1997....... 4-5
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the
Year Ended March 31, 1998.................... 6-7
Notes to Financial Statements.................. 8-15
Supplemental Schedules:
Schedules of Assets Held for Investment Purposes
at March 31, 1998........................... Schedule 1
Schedule of Reportable Transactions for the
Year Ended March 31, 1998................... Schedule 2
Consent of Independent Accountants............... 21
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
To the Participants and Administrative Committee
of the Tandy Fund
In our opinion, the accompanying statements of net assets available for
benefits, with fund information and the related statement 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, 1998 and 1997, and the changes in net assets available for benefits
for the year ended March 31, 1998, 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 additional information included in
schedules 1 and 2 is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The Fund Information in the statements of net assets
available for benefits and the statement 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. Schedules 1 and 2 and the 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.
PricewaterhouseCoopers LLP
Fort Worth, Texas
September 9, 1998
<PAGE>
<TABLE>
Tandy Corporation
Tandy Fund
Statement of Net Assets Available for Benefits, with Fund Information
March 31, 1998
<CAPTION>
FUND INFORMATION
----------------------------------------------------------------------------------------
COMPANY-DIRECTED INVESTMENTS
----------------------------------------------------------------------------------------
Tandy Tandy
Preferred Preferred Tandy Tandycrafts InterTAN Tandy
Stock Stock Common Common Common Common Putnam
Allocated Unallocated Stock Stock Stock Stock Income
----------- ------------ ----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating employer:
Preferred Stock (cost $79,513,099)
Allocated (44,803.18 shares
outstanding at
March 31, 1998) $93,330,631 $ $ $ $ $ $
<S> <C> <C> <C> <C> <C> <C> <C>
Unallocated (34,709.92 shares
outstanding at
March 31, 1998)
- 72,305,094 - - - - -
Common stock (cost $47,267,305)
2,730,933
shares outstanding at March 31,
1998 36,986,427 91,367,411
Tandycrafts, Inc. common stock
(cost $953)
2,384 shares outstanding at March
31, 1998 - - - 12,516 - - -
InterTAN, Inc. common stock (cost
$7,216)
1,003 shares outstanding at March
31, 1998 - - - - 5,203 - -
Investments in securities of unaffiliated issuer:
Putnam Income Fund - - - - - - 5,405,629
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
- - - - - 48,246 17,259
Contributions receivable - Employer
- 3,663,494 - - - - -
----------- ------------ ----------- ------------ ------------ ----------- ------------
Total assets
$93,330,631 $75,968,588 $36,986,427 $12,516 $5,203 $91,415,657 $5,422,888
LIABILITIES
Interest payable
- 910,848 - - - - -
Notes payable
- 42,143,000 - - - - -
----------- ------------ ----------- ------------ ------------ ----------- ------------
Total liabilities
- 43,053,848 - - - - -
----------- ------------ ----------- ------------ ------------ ----------- ------------
Net assets available for benefits $93,330,631 $32,914,740 $36,986,427 $12,516 $5,203 $91,415,657 $5,422,888
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FUND INFORMATION
----------------------------------------------------------------------------
PARTICIPANT-DIRECTED INVESTMENTS
----------------------------------------------------------------------------
Putnam
Putnam Putnam Putnam Putnam Money Loan
Voyager AA-Growth AA-Balanced AA-ConservativeMarket Fund Total
----------- ------------ ------------ ------------------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating employer:
Preferred Stock (cost $79,513,099)
Allocated (44,803.18 shares
outstanding at
March 31, 1998) $ - $ - $ - $ - $ - $ - $93,330,631
Unallocated (34,709.92 shares
outstanding at
March 31, 1998)
- - - - - - 72,305,094
Common stock (cost $47,267,305)
2,730,933
shares outstanding at March 31,
1998 - - - - - - 128,353,838
Tandycrafts, Inc. common stock (cost
$953)
2,384 shares outstanding at March
31, 1998 - - - - - - 12,516
InterTAN, Inc. common stock (cost
$7,216)
1,003 shares outstanding at March
31, 1998 - - - - - - 5,203
Investments in securities of unaffiliated issuer:
Putnam Income Fund
- - - - - - 5,405,629
Putnam Voyager Fund
37,090,154 - - - - - 37,090,154
Putnam Asset Allocation - Growth Fund
- 14,014,428 - - - - 14,014,428
Putnam Asset Allocation - Balanced
Fund - - 15,588,513 - - - 15,588,513
Putnam Asset Allocation - 4,745,944
Conservative Fund - - - 4,745,944 - -
Other securities - Short-term money market funds:
Putnam Money Market Fund
- - - - 5,302,306 - 5,302,306
Notes receivable from participants 10,255,202
- - - - - 10,255,202
Contributions receivable - Employees 242,646
89,882 33,208 29,859 6,119 18,073 -
Contributions receivable - Employer
- - - - - - 3,663,494
----------- ------------ ------------ ----------- ----------- ------------ ------------
Total assets
37,180,036 14,047,636 15,618,372 4,752,063 5,320,379 10,255,202 390,315,598
----------- ------------ ------------ ----------- ----------- ------------ ------------
LIABILITIES
Interest payable
- - - - - - 910,848
Notes payable
- - - - - - 42,143,000
----------- ------------ ------------ ----------- ----------- ------------ ------------
Total liabilities
- - - - - - 43,053,848
----------- ------------ ------------ ----------- ----------- ------------ ------------
Net assets available for benefits
$37,180,036 $14,047,636 $15,618,372 $4,752,063 $5,320,379 $10,255,202 $347,261,750
----------- ------------ ------------ ----------- ----------- ------------ ------------
</TABLE>
<PAGE>
<TABLE>
Tandy Corporation
Tandy Fund
Statement of Net Assets Available for Benefits, with Fund Information
March 31, 1997
<CAPTION>
FUND INFORMATION
------------------------------------------------------------------------------------
COMPANY-DIRECTED INVESTMENTS
------------------------------------------------------------------------------------
Tandy Tandy
Preferred Preferred Tandy Tandycrafts InterTAN Tandy
Stock Stock Common Common Common Common Putnam
Allocated Unallocated Stock Stock Stock Stock Income
------------ ----------- ----------- ----------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating employer:
Preferred Stock (cost $82,668,781)
Allocated (37,906.86 shares
outstanding at
March 31, 1997) $42,758,937 $ $ $ $ $ $
Unallocated (44,761.92 shares
outstanding
at March 31, 1997)
- 50,491,448
Common Stock (cost $45,882,855)
1,483,676
shares outstanding at March 31,
1997 - - 20,856,888 - - 53,512,384 -
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
- - - - - - 4,251,673
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 20,032
Contributions receivable - Employer
- 3,608,486 - - - - -
------------ ----------- ----------- ----------- ----------- ------------ ---------
Total assets
42,758,937 54,099,934 20,856,888 10,132 4,012 53,555,174 4,271,705
------------ ----------- ----------- ----------- ----------- ------------ ---------
LIABILITIES
Interest payable
- 1,203,635 - - - - -
Notes payable
- 52,219,000 - - - - -
------------ ----------- ----------- ----------- ----------- ------------ --------
Total liabilities
- 53,422,635 - - - - -
------------ ----------- ----------- ----------- ----------- ------------ --------
Net assets available for $42,758,937 $ 677,299 $20,856,888 $ 10,132 $ 4,012 $53,555,174 $4,271,705
benefits
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------
PARTICIPANT-DIRECTED INVESTMENTS
-----------------------------------------------------------------------------
Putnam
Putnam Putnam Putnam Putnam Money Loan
Voyager AA-Growth AA-Balanced AA-ConservativeMarket Fund Total
-------------- ----------- ----------- ------------------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating employer:
Preferred Stock (cost $82,668,781)
Allocated (37,906.86 shares
outstanding at March 31, 1997) $ - $ - $ - $ - $ - $ - $42,758,937
Unallocated (44,761.92 shares
outstanding
at March 31, 1997) - - - - - - 50,491,448
Common Stock (cost $45,882,855)
1,483,676
shares outstanding at March 31, 74,369,272
1997 - - - - - -
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 4,251,673
- - - - - -
Putnam Voyager Fund 21,575,040 21,575,040
- - - - -
Putnam Asset Allocation - Growth Fund 8,918,544
- 8,918,544 - - - -
Putnam Asset Allocation - Balanced 11,286,181
Fund - - 11,286,181 - - -
Putnam Asset Allocation - Conservative 2,836,510
Fund - - - 2,836,510 - -
Other securities - Short-term money market funds:
Putnam Money Market Fund
- - - - 3,454,231 - 3,454,231
Notes receivable from 7,682,947
participants - - - - - 7,682,947
Contributions receivable - Employees 260,118
98,689 35,960 33,761 7,383 21,503 -
Contributions receivable - Employer 3,608,486
- - - - - -
-------------- ----------- ----------- ----------- ----------- ------------ --------
Total assets 21,673,729 8,954,504 11,319,942 2,843,893 3,475,734 7,682,947 231,507,531
-------------- ----------- ----------- ----------- ----------- ------------ --------
LIABILITIES
Interest payable
- - - - - - 1,203,635
Notes payable
- - - - - - 52,219,000
-------------- ----------- ----------- ----------- ----------- ------------ --------
Total liabilities
- - - - - - 53,422,635
-------------- ----------- ----------- ----------- ----------- ------------ --------
Net assets available for Benefits $21,673,729 $8,954,504 $11,319,942 $2,843,893 $3,475,734 $7,682,947$178,084,896
_____________ __________ ___________ __________ __________ ______________________
</TABLE>
<PAGE>
<TABLE>
Tandy Corporation
Tandy Fund
Statement of Changes in Net Assets Available for Benefits, with Fund Information
For the Year Ended March 31, 1998
<CAPTION>
COMPANY-DIRECTED INVESTMENTS
-----------------------------------------------------------------------------------------
Tandy Tandy
Preferred Preferred Tandy Tandycrafts InterTAN Tandy
Stock Stock Common Common Common Common Putnam
Allocated Unallocated Stock Stock Stock Stock Income
------------ ------------ ------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends - participating employer $2,606,367 $3,357,144 $320,796 $ - $ - $811,823 $ -
Dividends -
other - - - - - - 321,004
------------ ------------ ------------ ------------ ------------ ----------- ------------
2,606,367 3,357,144 320,796 - - 811,823 321,004
------------ ------------ ------------ ------------ ------------ ----------- ------------
Net appreciation (depreciation) in
fair value
of securities:
Employer securities
34,106,248 42,753,230 17,553,603 - - 43,841,677 -
Other securities
- - - 2,384 1,191 - 167,410
------------ ------------ ------------ ------------ ------------ ----------- ------------
34,106,248 42,753,230 17,553,603 2,384 1,191 43,841,677 167,410
------------ ------------ ------------ ------------ ------------ ----------- ------------
Contributions:
Employee
- - - - - 3,252,464 1,204,491
Employer
- 8,524,993 63,909 - - - -
------------ ------------ ------------ ------------ ----------- ------------ -----------
- 8,524,993 63,909 - - 3,252,464 1,204,491
------------ ------------ ------------ ------------ ------------ ----------- ------------
Other additions (deductions);
Release of preferred shares
proportionate to
paydown of note payable
18,332,771 (18,332,771) - - - - -
Interfund transfers, net
- - (1,218) - - (3,089,372) 1,549
Loans and repayments (including
interest), net - - 213,958 - - (1,258,008) (108,040)
Other
- - (65,015) - - (11,098) (3,570)
------------ ------------ ------------ ------------ ------------ ----------- -----------
18,332,771 (18,332,771) 147,725 - - (4,358,478) (110,061)
------------ ------------ ------------ ------------ ------------ ----------- ------------
Total
55,045,386 36,302,596 18,086,033 2,384 1,191 43,547,486 1,582,844
Less:
Withdrawals and termination
payments 4,473,692 - 1,956,494 - - 5,687,003 431,661
Interest expense
- 4,065,155 - - - - -
------------ ------------ ------------ ------------ ------------ ----------- ------------
Net increase (decrease) in plan assets
50,571,694 32,237,441 16,129,539 2,384 1,191 37,860,483 1,151,183
Plan equity at beginning of year
42,758,937 677,299 20,856,888 10,132 4,012 53,555,174 4,271,705
------------ ------------ ------------ ------------ ------------ ----------- ------------
Plan equity at end of year $93,330,631 $32,914,740 $36,986,427 $12,516 $ 5,203 $91,415,657 $5,422,888
------------ ------------ ------------ ------------ ------------ ----------- ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED INVESTMENTS
----------------------------------------------------------------------------
Putnam
Putnam Putnam Putnam Putnam Money Loan
Voyager AA-Growth AA-Balanced AA-ConservativMarket Fund Total
------------ ------------ ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends - participating employer $ - $ - $ - $ - $ - $ - $ 7,096,130
Dividends -
other 1,775,582 847,801 1,168,514 295,186 223,700 - 4,631,787
------------ ------------ ------------ ----------- ----------- --------- -----------
1,775,582 847,801 1,168,514 295,186 223,700 - 11,727,917
------------ ------------ ------------ ----------- ----------- --------- ----------
Net appreciation (depreciation) in
fair value
of securities:
Employer securities - - - - - - 138,254,758
Other securities 10,127,743 2,128,846 1,888,787 317,312 - - 14,633,673
------------ ------------ ------------ ----------- ----------- --------- ----------
10,127,743 2,128,846 1,888,787 317,312 - - 152,888,431
------------ ------------ ------------ ----------- ----------- --------- ----------
Contributions:
Employee 7,016,019 2,775,596 2,517,710 529,892 1,390,807 - 18,686,979
Employer - - - - - - 8,588,902
------------ ------------ ------------ ----------- ----------- --------- ----------
7,016,019 2,775,596 2,517,710 529,892 1,390,807 - 27,275,881
------------ ------------ ------------ ----------- ----------- --------- ----------
Other additions (deductions);
Release of preferred shares
proportionate to
paydown of note payable - - - - - - -
Interfund transfers, net (48,122) 579,115 110,284 1,047,158 1,400,575 - (31)
Loans and repayments (including
interest), net (702,102) (318,566) (247,983) (84,152) (134,637) 2,640,613 1,083
Other
(19,001) (9,294) (6,542) (1,451) (4,423) (58,621) (179,015)
------------ ------------ ------------ ----------- ----------- --------- ----------
(769,225) 251,255 (144,241) 961,555 1,261,515 2,581,992 (177,963)
------------ ------------ ------------ ----------- ----------- --------- ----------
Total 18,150,119 6,003,498 5,430,770 2,103,945 2,876,022 2,581,992 191,714,266
Less:
Withdrawals and termination
payments 2,643,812 910,366 1,132,340 195,775 1,031,377 9,737 18,472,257
Interest expense
- - - - - 4,065,155
------------ ------------ ------------ ----------- ----------- --------- ----------
Net increase (decrease) in plan assets
15,506,307 5,093,132 4,298,430 1,908,170 1,844,645 2,572,255 169,176,854
Plan equity at beginning of year
21,673,729 8,954,504 11,319,942 2,843,893 3,475,734 7,682,947 178,084,896
------------ ------------ ------------ ----------- ----------- --------- ----------
$37,180,036 $14,047,636 $15,618,372 $4,752,063 $5,320,379 $10,255,202 $347,261,750
------------ ------------ ------------ ----------- ----------- ---------- ----------
</TABLE>
<PAGE>
TANDY CORPORATION
TANDY FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the Tandy Fund (the "Plan") provides only general
information. Participants should refer to the summary Plan description, which
also constitutes the Plan's prospectus, 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" or "Tandy") who have completed one year of service of
not less than 1,000 hours per year. The Tandy Fund is an individual account plan
with multiple, participant-directed investment options which is 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, 1998 and 1997, there were 10,261 and 10,178 employees of the
Company participating in the Plan and 20,043 and 19,774 employees eligible to
participate, respectively.
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.
Plan Trustee - The Plan's Administrative Committee has appointed Putnam
Fiduciary Trust Company as the Plan's trustee.
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 $100,000,000 borrowing. Each share of 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 the last day 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 44,803.18 and 37,906.16 shares of Stock held in the individual
"Stock" accounts of participants as of March 31, 1998 and 1997, respectively.
Participants are 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 - Participants are 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 - Company contributions are made directly to the Tandy
Fund through the TESOP portion of 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 the last day of each plan 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. No discretionary
contribution was made to the Plan during the year ended March 31, 1998.
Participants' Accounts - Participants' ESOP accounts are 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 revised summary plan description booklet, which also constitutes the
Plan's prospectus, and the summary annual report.
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 in the Company's contributions 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.
Payment 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 $1,214,047 and
$541,149 were allocated to participants' accounts as a result of forfeitures for
the years ended March 31, 1998 and 1997, respectively.
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 is based on the interest rate currently being charged for similar commercial
loans. The weighted average interest rate charged on participant loan balances
was 9.27% and 9.85% for the years ended March 31, 1998 and 1997, respectively.
Interest received on participant loans was $831,006 and $649,024 for the years
ended March 31, 1998 and 1997, 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.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The Plan's financial statements are prepared under the
accrual method of accounting.
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.
Reclassification of Prior Year Amounts - Certain amounts in the prior year
financial statements has been reclassified to conform to the current year
presentation.
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 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 and assets of the Plan.
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.
This indebtedness matures on December 31, 2000. Under this same agreement, the
Plan borrowed an additional $4,303,000, $3,523,000 and $2,224,000 at interest
rates of 6.47%, 7.01% and 6.73% on December 28, 1995, December 27, 1996 and
December 29, 1997, respectively. These new notes are also guaranteed by the
Company and mature on December 30, 2001, December 30, 2001 and December 30,
2002, respectively. Maturities of the Notes are as follows:
For the Plan's Fiscal Year:
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
4/1/02 - 3/31/03 2,224,000
----------------
$ 42,143,000
The fair value of the Plan's total debt of $42,143,000 and $52,219,000 is
approximately $41,457,000 and $54,866,397 at March 31, 1998 and 1997,
respectively.
Expenses of the Plan- At March 31, 1998, the trustee was responsible for both
the management and record keeping of the Plan's assets. Administrative expenses
of the Plan are generally 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 76% and 72% of
its total assets (including unallocated Stock) invested in securities of its
sponsor, Tandy Corporation, at March 31, 1998 and 1997, respectively.
NOTE 3 - 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.
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, 1998 and 1997:
1998 1997
Tandy Common Stock:
2,730,933 and 1,483,676 shares at
March 31, 1998 and 1997, respectively $128,353,838 $ 74,369,272
Series B TESOP Convertible Preferred
Stock Allocated 44,803.18 and
37,906.86 shares at March 31, 1998
and 1997, respectively 93,330,631 42,758,937
Series B TESOP Convertible Preferred
Stock Unallocated 34,706.92 and
44,761.92 shares at March 31, 1998
and 1997, respectively 72,305,094 50,491,448
Putnam Voyager Fund -
1,698,267 and 1,410,133 shares at
March 31, 1998 and 1997, respectively 37,090,154 21,575,040
Putnam AA - Growth Fund -
1,024,447 and 787,162 shares at
March 31, 1998 and 1997, respectively 14,014,428 8,918,544
Putnam AA - Balanced Fund -
1,286,181 and 1,071,812 shares at
March 31, 1998 and 1997, respectively 15,588,513 11,286,181
NOTE 4 - TAX STATUS OF THE PLAN
The Plan has received a determination letter from the Internal Revenue Service
dated February 20, 1998. The Plan has subsequently been restated and amended and
management will request a similar determination letter from the Internal Revenue
Service for the Plan. 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.
NOTE 5 - RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Putnam
Investments. Putnam Investments is the trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest.
The Company redeemed $4,473,692 and $3,197,703 of Series B Convertible Preferred
Stock from the Plan during 1998 and 1997, respectively.
NOTE 6 - 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. 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 7 - 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 IRS Form 5500:
March 31, 1998
Net assets available for Plan benefits per
the financial statements $347,261,750
Less: Benefit obligations currently payable (425,199)
Net assets available for Plan benefits per ------------
the Form 5500 $346,836,551
============
The following is a reconciliation of benefits paid to participants per the
financial statements to the IRS Form 5500:
Year Ended
March 31, 1998
Benefits paid to participants per the
financial statements $18,472,257
Add: Benefit obligations payable at end of year 425,199
-------
Benefits paid to participants per the Form 5500 $18,897,456
===========
Amounts currently payable to or for participants, dependents, and beneficiaries
are recorded on the IRS Form 5500 per benefit claims that have been processed
and approved for payment prior to March 31, 1998, but not yet paid as of that
date.
<PAGE>
Schedule 1
TANDY CORPORATION
TANDY FUND
Item 27A - Schedule of Assets Held for Investment Purposes
March 31, 1998
<TABLE>
<CAPTION>
Identity 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 - 2,730,933 shares outstanding
at March 31, 1998 $47,267,305 $128,353,838
Tandy Corporation * Preferred Stock -
Allocated 44,803.18 shares outstanding at
March 31, 1998
Unallocated 34,709.92 shares outstanding at
March 31, 1998
79,513,099 165,635,725
Tandycrafts Common stock - 2,384 shares outstanding at
March 31, 1998
953 12,516
InterTAN Common stock - 1,003 shares outstanding at
March 31, 1998
7,216 5,203
Putnam Income Fund - 760,285.40 shares outstanding at
March 31, 1998
5,376,876 5,405,629
Putnam Voyager Fund - 1,698,267.12 shares outstanding at
March 31, 1998
28,539,103 37,090,154
Putnam Asset Allocation-Growth Portfolio - 1,024,446.52 shares
outstanding at March 31, 1998
11,664,789 14,014,428
Putnam Asset Allocation-Balanced Portfolio - 1,286,180.94 shares
outstanding at March 31, 1998
13,399,522 15,588,513
Putnam Asset Allocation-Conservative Portfolio - 452,425.50
shares 4,401,944 4,745,944
outstanding at March 31, 1998
Putnam * Money Market Fund
5,302,306 5,302,306
Various participants * Participant loans receivable - terms of 6 months - 5
years,
interest rates of 7% - 10% -
10,255,202
---------------------------------
$195,473,113 $ 386,409,458
=================================
</TABLE>
* - Party in interest
<PAGE>
TANDY CORPORATION
TANDY FUND
Item 27D - Schedule of Reportable Transactions
Year Ended March 31, 1998
<TABLE>
<CAPTION>
Current value
Identity of Description Purchase Selling Lease Expense Cost of asset on Net gain
party involved of asset price price rental incurred with of asset transaction or (loss)
transaction date
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Putnam
Purchases Voyager Fund $13,438,873 - - $13,438,873 $13,438,873
Sales $8,051,278 - - 7,115,570 8,051,278 $ 935,708
Tandy Corporation
Purchases Common stock 11,920,748 - - 11,920,748 11,920,748
Sales $19,373,761 - - 10,581,065 19,373,761 8,792,696
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee has duly caused this annual report to be signed on its
behalf 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 25, 1998
<PAGE>
Index to Exhibits
Exhibit Description Page
Number of Exhibit Number
23 Consent of Independent Accountants 21
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-51603, 333-27437 and 333-63659) of Tandy
Corporation of our report dated September 9, 1998 appearing on page 21 of this
Form 11-K.
PRICEWATERHOUSECOOPERS LLP
Fort Worth, Texas
September 25, 1998
