SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
REPORT PURSUANT TO
SECTION 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Period Ended March 31, 1999
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)
TANDY CORPORATION
TANDY FUND
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
March 31, 1999
Report of Independent Accountants....................................... 3
Financial Statements:
Statement of Net Assets Available for Benefits,
with Fund Information - March 31, 1999............................. 4-5
Statement of Net Assets Available for Benefits,
with Fund Information - March 31, 1998............................. 6-7
Statement of Changes in Net Assets Available for Benefits,
with Fund Information for the Year Ended March 31, 1999............ 8-9
Notes to Financial Statements....................................... 10-16
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at March 31, 1999.... 17
Schedule of Reportable Transactions for the Year Ended March 31, 1999... 18
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.
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 (the
"Plan") at March 31, 1999 and 1998, and the changes in net assets available for
benefits for the year ended March 31, 1999, 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 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, 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 conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions 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 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 benefits of each fund. These supplemental
schedules and fund information are the responsibility of the Plan's management.
These 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.
PricewaterhouseCoopers LLP
September 10, 1999
<TABLE>
TANDY CORPORATION
TANDY FUND
Statement of Net Assets Available for Benefits, with Fund Information
March 31, 1999
<CAPTION>
FUND IINFORMATION
-----------------------------------------------------------------
COMPANY-DIRECTED INVESTMENTS
-----------------------------------------------------------------
Tandy Preferred Stock Common Stock
Total Allocated Unallocated Tandy Tandycrafts InterTAN
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments in securities of participating
employer
Tandy Preferred Stock (cost$76,200,628)
Allocated (51,642.33 shares) $145,379,609 $145,379,609 - - - -
Unallocated (24,558.30 shares) 69,134,704 - 69,134,704 - - -
Tandy Common Stock (cost $52,093,170) 169,366,050 - - 47,594,072
2,654,120 shares
Investments in securities of unaffiliated issuer:
Tandycraft, Inc. Common Stock (cost$953) 5,215 - - - 5,215 -
2,384 shares
InterTAN, Inc. Common Stock (cost $7,216) 9,779 - - - - 9,779
1,003 shares
Putnam Income Fund 6,094,049 - - - - -
Putnam Voyager Fund 45,455,885 - - - - -
Putnam Asset Allocation-Growth Fund 14,656,020 - - - - -
Putnam Asset Allocation-Balanced Fund 16,663,590 - - - - -
Putnam Asset Allocation-Conservative - - - - -
Fund 4,895,208 - - - - -
Putnam International Growth Fund 310,388 - - - - -
Putnam Investors Fund 1,491,520 - - - - -
Other Securities - Short-term money market funds:
Putnam Money Market Fund 6,887,733 - - - - -
Notes receivable from participants 12,289,095 - - - - -
Contributions receivable - employee 323,980 - - - - -
Contributions receivable - employer 2,981,890 - 2,981,890 - - -
-------------- ------------- ------------ ------------- ----------- -----------
Total assets 495,944,715 145,379,609 72,116,594 47,594,072 5,215 9,779
-------------- ------------- ------------ ------------- ----------- -----------
LIABILITIES
Interest payable 637,186 - 637,18 - - -
Notes payable 30,845,000 - 30,845,000 -
-------------- ------------- ------------ ------------- ----------- -----------
Totallities 31,482,186 - 31,482,186 - - -
-------------- ------------- ------------ ------------- ----------- -----------
Net assets available for benefits $464,462,529 $145,379,609 40,634,408 47,594,072 5,215 9,779
============== ============= ============ ============= =========== ===========
- ----------------------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
- ----------------------------------------------------------------------------------------------------------------------------------
PARTICIPANT-DIRECTED INVESTMENTS
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Tandy Putnam Putnam
Common Putnam Putnam Putnam Asset Allocation Funds Putnam Investors Money Loan
Intn'l
--------------------------------------
Stock Income Voyager Growth Balanced Conservative Growth Fund Fund Market Fund
- --------------------------- ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ - - - - - - - - - -
- - - - - - - - - -
121,771,978 - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- 6,094,049 - - - - - - - -
- - 45,455,885 - - - - - -
- - - 14,656,020 - - - - - -
- - - - 16,663,590 - - - - -
- - - - - 4,895,208 - - - -
- - - - - - 310,388 - - -
- - - - - - - 1,491,520 - -
- - - - - - - - 6,887,733 -
- - - - - - - - - 12,289,095
69,331 16,600 115,784 44,708 39,949 8,345 2,800 6,627 19,836 -
- - - - - - - - - -
------------------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------
121,841,309 6,110,649 45,571,669 14,700,728 16,703,539 4,903,553 313,188 1,498,147 6,907,569 12,289,095
- --------------------------- ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------
- - - - - - - - - -
- - - - - - - - - -
- --------------------------- ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------
- - - - - - - - - -
- --------------------------- ------------ ------------ ------------ ------------ ------------ ----------- ----------- ------------
$121,841,309 $6,110,649 $45,571,669 $14,700,728 $16,703,539 $4,903,553 $313,188 $1,498,147 $6,907,569 $12,289,095
=========================== ============ ============ ============ ============ ============ =========== =========== ============
</TABLE>
TANDY CORPORATION
TANDY FUND
Statement of Net Assets Available for Benefits, with Fund Information
March 31, 1998
<TABLE>
FUND INFORMATION
-----------------------------------------------------------------------
COMPANY-DIRECTED INVESTMENTS
-----------------------------------------------------------------------
Tandy Preferred Stock Common Stock
-----------------------------------------------------------------------
<CAPTION>
Total Allocated Unallocated Tandy Tandycrafts InterTAN
-------------- -------------- ---------------------------- ------------ -------------
ASSETS
Investments in securities of participating employer:
Preferred Stock (cost $79,513,099)
<S> <C> <C> <C> <C> <C> <C>
Allocated (44,803.18 shares) $93,330,631 $93,330,631 $ - $ - $ - $ -
Unallocated (34,709.92 shares) 72,305,094 - 72,305,094 - - -
Common stock (cost $47,267,305)
2,730,933 shares 128,353,838 - - 36,986,427 - -
Investments in securities of unaffiliated
issuers:
Tandycrafts, Inc. common stock (cost $953)
2,384 shares 12,516 - - - 12,516 -
InterTAN, Inc. common stock (cost $7,216)
1,003 shares 5,203 - - - - 5,203
Putnam Income Fund 5,405,629 - - - - -
Putnam Voyager Fund 37,090,154 - - - - -
Putnam Asset Allocation - Growth Fund 14,014,428 - - - - -
Putnam Asset Allocation - Balanced Fund 15,588,513 - - - - -
Putnam Asset Allocation - Conservative Fund 4,745,944 - - - - -
Other securities - Short-term money market funds:
Putnam Money Market Fund 5,302,306 - - - - -
Notes receivable from participants 10,255,202 - - - - -
Contributions receivable - Employees 242,646 - - - - -
Contributions receivable - Employer 3,663,494 - 3,663,494 - - -
-------------- -------------- ---------------------------- ------------ -------------
Total assets 390,315,598 93,330,631 75,968,588 36,986,427 12,516 5,203
-------------- -------------- ---------------------------- ------------ -------------
LIABILITIES
Interest payable 910,848 - 910,848 - - -
Notes payable 42,143,000 42,143,000 - - -
-------------- -------------- -------------- ------------- ------------ -------------
Total liabilities 43,053,848 - 43,053,848 - - -
-------------- -------------- ---------------------------- ------------ -------------
Net assets available for benefits $ 347,261,750 $93,330,631 $32,914,740 $36,986,427 $ 12,516 $ 5,203
============== ============== ============== ============= ============ =============
</TABLE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
- -------------------------------------------------------------------------------------------------------------------
PARTICIPANT-DIRECTED INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Tandy Putnam
Common Putnam Putnam Putnam Asset Allocation Funds Money Loan
------------------------------------------
Stock Income Voyager Growth Balanced Conservative Market Fund
- ---------------- ------------- ------------- ------------- ------------- ------------- ---------------------------
<S><C> <C> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ - $ - $ - $ -
- - - - - - - -
91,367,411 - - - - - - -
- - - - - - - -
- - - - - - - -
- 5,405,629 - - - - - -
- - 37,090,154 - - - - -
- - - 14,014,428 - - - -
- - - - 15,588,513 - - -
- - - - - 4,745,944 - -
- - - - - - 5,302,306 -
- - - - - - - 10,255,202
48,246 17,259 89,882 33,208 29,859 6,119 18,073 -
- - - - - - - -
- ---------------- ------------- ------------- ------------- ------------- -----------------------------------------
91,415,657 5,422,888 37,180,036 14,047,636 15,618,372 4,752,063 5,320,379 10,255,202
- ---------------- ------------- ------------- ------------- ------------- ------------- ---------------------------
- - - - - - - -
- - - - - - - -
- ---------------- ------------- ------------- ------------- ------------- ------------- ---------------------------
- - - - - - - -
- ---------------- ------------- ------------- ------------- ------------- ------------- ---------------------------
$ 91,415,657 $ 5,422,888 $37,180,036 $14,047,636 $15,618,372 $4,752,063 $5,320,379 $10,255,202
<S><C> <C> <C> <C> <C> <C> <C> <C>
================ ============= ============= ============= ============= ============= ===========================
</TABLE>
TANDY CORPORATION
TANDY FUND
Statement of Changes in Net Assets Available for Benefits with Fund Information
For the Year Ended March 31, 1999
<TABLE>
FUND INFORMATION
--------------------------------------------------------------
COMPANY-DIRECTED INVESTMENTS
--------------------------------------------------------------
<CAPTION>
Tandy Preferred Stock Common Stock
------------------------- ------------------------------------
Total Allocated Unallocated Tandy Tandycrafts InterTAN
---------------- ------------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Dividends - participating employer $ 6,794,688 $ 3,111,836 $ 2,603,244 $ 308,167 $ - $ -
Dividends - other 4,542,573 - - - - -
---------------- ------------- ----------- ------------ ----------- -----------
11,337,261 3,111,836 2,603,244 308,167 - -
---------------- ------------- ----------- ------------ ----------- -----------
Net appreciation (depreciation) in fair value of securities:
Employer securities 101,750,093 30,863,636 25,407,943 12,726,042 - -
Other securities 2,834,265 - - - (7,301) 4,576
---------------- ------------- ----------- ------------ ----------- -----------
104,584,358 30,863,636 25,407,943 12,726,042 (7,301) 4,576
---------------- ------------- ----------- ------------ ----------- -----------
Contributions:
Employee 19,817,312 - - - - -
Employer 8,286,502 - 8,257,290 29,212 - -
---------------- ------------- ----------- ------------ ----------- -----------
28,103,814 - 8,257,290 29,212 - -
---------------- ------------- ----------- ------------ ----------- -----------
Other additions(deductions):
Release of preferred shares proportionate to paydown
of notes payable - 25,466,49 (25,466,496) - - -
Interfund transfers, net - - - - - -
Loans and repayments (including - - - 117,429 - -
interest), net
Other (101,673) - - (30,193) - -
---------------- ------------- ----------- ------------ ----------- -----------
(101,673) 25,466,496 (25,466,496) 87,236 - -
---------------- ------------- ----------- ------------ ----------- -----------
Total 143,923,760 59,441,968 10,801,981 13,150,657 (7,301) 4,576
Less:
Withdrawals and termination payments 23,640,668 7,392,990 - 2,543,012 - -
Interest expense 3,082,313 - 3,082,313 - - -
---------------- ------------- ----------- ------------ ----------- -----------
Net increase (decrease) in plan assets 117,200,779 52,048,978 7,719,668 10,607,645 (7,301) 4,576
Plan equity at beginning of year 347,261,750 93,330,631 32,914,740 36,986,427 12,516 5,203
---------------- ------------- ----------- ------------ ----------- -----------
Plan equity at end of year $464,462,529 $145,379,609 $40,634,408 $47,594,072 $5,215 $9,779
================ ============= =========== ============ =========== ===========
- ---------------------------------------------------------------------------------------------------------------------------
FUND INFORMATION
- ---------------------------------------------------------------------------------------------------------------------------
PARTICIPANT-DIRECTED INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Tandy Putnam Putnam
Common Putnam Putnam Putnam Asset Allocation Funds Putnam Investors Money Loan
Intn'l
-----------------------------------
Stock Income Voyager Growth Balanced ConservativeGrowth Fund Fund Market Fund
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$771,441 $ - $ - $ - $ - $ - $ - $ - $ - $
- 361,275 2,741,324 371,813 518,977 218,119 4,161 21,266 305,638 -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
771,441 361,275 2,741,324 371,813 518,977 218,119 4,161 21,266 305,638 -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
32,752,472 - - - - - - - - -
- (283,751) 2,792,155 224,049 31,622 (15,864) (8,883) 97,662 - -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
32,752,472 (283,751) 2,792,155 224,049 31,622 (15,864) (8,883) 97,662 - -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
- - - - - - - - - -
4,201,548 1,196,186 7,107,451 2,732,684 2,381,647 498,638 76,090 167,466 1,455,602 -
- - - - - - - - - -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
4,201,548 1,196,186 7,107,451 2,732,684 2,381,647 498,638 76,090 167,466 1,455,602 -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
- - - - - - - - - -
(221,433) 22,174 (976,361) (1,310,518) (444,909) (113,009) 255,394 1,246,056 1,542,606 -
(1,241,525) (25,044) (751,626) (318,205) (203,227) (22,042) (6,620) (18,058) (163,048) 2,631,966
(15,537) (2,827) (14,229) (5,013) (5,315) (1,031) (67) (136) (8,993) (18,332)
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
(1,478,495) (5,697) (1,742,216) (1,633,736) (653,451) (136,082) 248,707 1,227,862 1,370,565 2,613,634
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
36,246,966 1,268,013 10,898,714 1,694,810 2,278,795 564,811 320,075 1,514,256 3,131,805 2,613,634
5,821,314 580,252 2,507,081 1,041,718 1,193,628 413,321 6,887 16,109 1,544,615 579,741
- - - - - - - - - -
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
30,425,652 687,761 8,391,633 653,092 1,085,167 151,490 313,188 1,498,147 1,587,190 2,033,893
91,415,657 5,422,888 37,180,036 14,047,636 15,618,372 4,752,063 - - 5,320,379 10,255,202
- -------------- ---------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- -----------
$121,841,309 $6,110,649 $45,571,669 $14,700,728 $16,703,539 $4,903,553 $313,188 $1,498,147 $6,907,569 $12,289,095
============ ========== ============ =========== =========== ========== ========= ========== ========= =========
</TABLE>
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, its divisions and subsidiaries ("the Company" or "Tandy") who will
have completed at least one year of service, of not less than 1,000 hours in the
following calendar quarter. The Tandy Fund is an individual account plan with
multiple, participant-directed investment options which is intended to comply
with the Employee Retirement Income Security Act of 1974 ("ERISA") Section
404(c).
The Plan is subject to Titles I and II of 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, 1999 and 1998, there were 11,104 and 10,261 employees of the
Company participating in the Plan and 18,361 and 20,043 employees eligible to
participate, respectively.
Plan Trustee - The Company's Board of Directors 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 three accounts: the "Suspense"
account, the "Preferred Stock" account and the "Profit Sharing" account. The
"Profit Sharing" account was included with the ESOP portion of the Plan
effective January 1, 1999.
The "Suspense" account had an original unallocated share account, which
consisted of 100,000 shares of Tandy Corporation Series B TESOP Convertible
Preferred Stock (the "Preferred Stock"). The Preferred Stock was purchased in
July 1990 with funds obtained through a $100,000,000 borrowing. Each share of
Preferred Stock is convertible into 43.56 shares of Tandy common stock and its
minimum resale value is guaranteed by the Company to be $1,000 per share. This
series of Preferred 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 Preferred Stock and their related debt are held in the
"Suspense" account. Funds are derived from Company contributions and dividends
paid on the Preferred Stock. These funds are used to pay the debt which releases
a pro rata portion of the Preferred Stock and the Preferred Stock released is
allocated to the individual "Preferred Stock" account of the participants. The
allocation to participants' accounts occurs on the last day of each plan year.
The "Preferred Stock" account represents the participants' interests in
Preferred Stock that have been allocated to the participants' individual
accounts from the "Suspense" account.
There were 51,642.33 and 44,803.18 shares of Preferred Stock held in the
individual "Preferred Stock" accounts of participants as of March 31, 1999 and
1998, respectively.
The "Profit Sharing" account represents discretionary matching contributions
made to the Plan by Tandy Corporation and allocated to the participants'
individual accounts.
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 provided with the option to direct their contributions in
various investment options; each of which is described in more detail in Note 3.
Participants may elect to contribute portions of their total contributions to
the various investment options in increments of 5%.
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 ESOP 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 Preferred Stock. Cash dividends
are paid on shares of Preferred Stock semiannually on June 30 and December 31 at
the rate of 7.5% per annum. Cash dividends paid on all shares of Preferred 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
Preferred Stock. As the debt is reduced, a pro rata number of shares of
Preferred Stock is released and allocated to participants' "Preferred 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
Preferred 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.
Tandy corporation is eligible to make discretionary matching contributions to
the participants' "Profit Sharing" account at any time. Discretionary "Profit
Sharing" contributions of $29,212 and $63,909 were made to the Plan during the
years ended March 31, 1999 or 1998, respectively.
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 the following:
o a copy of the annual report of Tandy Corporation,
o any Tandy Stock Plan/Plan prospectus incorporated by reference into the
registration statements on Form S-8 ( Nos. 33-51603, 333-27437 and
333-63659) or an appendix to the prospectus,
o any material amendment made to any revised summary plan description
booklet, which also constitutes the Plan's prospectus, and
o 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:
1) Single sum payment in cash
2) 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)
3) Equal monthly cash installments for a period of up to ten years (or the
participant's actual life expectancy, if shorter)
4) Part cash and part securities
Forfeited Accounts - Forfeited nonvested accounts of terminated participants are
allocated among the remaining participants' accounts. A total of $1,138,554 and
$1,214,047 were allocated to participants' accounts as a result of forfeitures
for the years ended March 31, 1999 and 1998, 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% for the years ended March 31, 1999 and 1998. Interest received on
participant loans was $1,044,860 and $831,006 for the years ended March 31, 1999
and 1998, respectively. A portion, not to exceed 50%, of the participant's
dollar value interest in the Plan, is pledged as collateral on outstanding
participant loans.
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.
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 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. Under this agreement, the Plan
has borrowed $16,240,000 at interest rates ranging from 5.84% to 8.76%. These
notes are also guaranteed by the Company and mature on dates ranging from
December 30, 2000 to December 30, 2002. Maturities of the Notes are as follows:
For the Plan's Fiscal Year:
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 3,351,000
-- --------------------
$ 30,845,000
== ====================
The fair value of the Plan's total debt of $30,845,000 and $42,143,000 is
approximately $32,369,000 and $41,457,000 at March 31, 1999 and 1998,
respectively.
Expenses of the Plan - At March 31, 1999, 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 78% and 76% of
its total assets (including unallocated Preferred Stock) invested in securities
of its sponsor, Tandy Corporation, at March 31, 1999 and 1998, 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 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 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 International Growth Fund - Funds are invested in shares of a registered
investment company which invests mainly in medium and large-sized companies.
This fund diversifies its investments among a number of different countries by
investing at least 65% of its total assets in at least three countries other
than the United States. This fund may also invest in companies located in less
developed and developing countries and it may use derivatives both for hedging
and non-hedging purposes. This fund may also purchase preferred stocks,
convertible securities and fixed income investments.
Putnam Investors Fund - Funds are invested in shares of a registered investment
company that invests primarily in equity and fixed income securities of large
growth companies. This may include the use of derivatives both for hedging and
non-hedging purposes.
This fund may also invest without limit in securities of foreign issuers.
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, 1999 and 1998:
<TABLE>
<CAPTION>
Shares Fair Value
--------------------------------- --------------------------------------
1999 1998 1999 1998
---------------- --------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Tandy Common Stock 2,654,120 2,730,933 $ 169,366,050 $ 128,353,838
Series B TESOP Convertible
Preferred Stock - Allocated 51,642 44,803 145,379,609 93,330,631
Series B TESOP Convertible
Preferred Stock - Unallocated 24,558 34,707 69,134,704 72,305,094
Putnam Voyager Fund 1,958,461 1,698,267 45,455,885 37,090,154
</TABLE>
NOTE 4 - TAX STATUS OF THE PLAN
The Plan has received a determination letter from the Internal Revenue Service
dated April 28, 1998. The Plan has subsequently been 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 $7,392,990 and $4,473,692 of Preferred Stock from the Plan
during 1999 and 1998, 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, 1999
-------------------------------
Net assets available for Plan
benefits per the financial statements $ 464,462,529
Less: Benefit obligations currently payable (1,285,533)
-------------------------------
Net assets available for Plan benefits
per the Form 5500 $ 463,176,996
===============================
The following is a reconciliation of benefits paid to participants per the
financial statements to the IRS Form 5500:
Year Ended
March 31, 1999
-------------------------------
Benefits paid to participants per
the financial statements $ 23,640,668
Add: Benefit obligations payable at
March 31, 1999 1,285,533
Less: Benefit obligations payable
at March 31, 1998 $ (425,199)
----------------------------
Benefits paid to participants per
the Form 5500 $ 24,501,002
============================
Amounts currently payable to or for participants, dependents, and beneficiaries
are recorded on the IRS Form 5500 for benefit claims that have been processed
and approved for payment prior to March 31, 1999, but not yet paid as of that
date.
<TABLE>
Schedule 1
TANDY CORPORATION
TANDY FUND
Item 27A - Schedule of Assets Held for Investment Purposes
March 31, 1999
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Identity of issue, Description of investment including maturity Shares
borrower, date,rate of interest, collateral, par or
lessor or similar party maturity date Outstanding Cost Current Value
- ---------------------------- ------------------------------------------------ -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Tandy Corporation * Common stock 2,654,120.28 $52,093,170 $ 169,366,050
Tandy Corporation * Preferred Stock -
Allocated 51,642.33
Unallocated 24,558.30 76,200,628 214,514,313
Tandycrafts, Inc. Common stock 2,384.00 953 5,215
InterTAN, Inc. Common stock 1,003.00 7,216 9,779
Putnam Investments * Income Fund 900,154.89 6,329,366 6,094,049
Putnam Investments * Voyager Fund 1,958,461.24 35,540,269 45,455,885
Putnam Investments * Asset Allocation-Growth Portfolio 1,053,631.89 12,389,839 14,656,020
Putnam Investments * Asset Allocation-Balanced Portfolio 1,374,883.66 14,680,541 16,663,590
Putnam Investments * Asset Allocation-Conservative Portfolio 467,546.09 4,602,637 4,895,208
Putnam Investments * International Growth Fund 15,320.24 300,458 310,388
Putnam Investments * Investors Fund 95,426.73 1,354,933 1,491,520
Putnam Investments * Money Market Fund 6,887,733 6,887,733
Various participants * Participant loans receivable - terms of 6
months - 5 years, interest rates of 8.75% - 9.50% - 12,289,095
---------------- ----------------
$210,387,743 $ 492,638,845
=============== ================
</TABLE>
* - Party in interest
<TABLE>
TANDY CORPORATION Schedule 2
TANDY FUND
Item 27D - Schedule of Reportable Transactions
Year Ended March 31, 1999
<CAPTION>
Expense Current value
incurred of asset on
Identity of Description Purchase Selling Lease with Cost transaction Net gain
party involved Of asset price price rental transaction of asset date Or (loss)
- --------------------- -------------- ------------ ------------ -------- ------------ ------------- --------------- ------------
Tandy Corporation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases Common stock $17,273,954 - - - $17,273,954 $17,273,954
Sales Common stock $21,980,974 - - 12,688,794 21,980,974 $9,292,180
</TABLE>
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: __________________________________
J. H. Bradley
Administrative Committee Member
By: ___________________________________
D. Johnson
Administrative Committee Member
By: ___________________________________
Francesca Spinelli
Administrative Committee Member
Date: September 24, 1999
Index to Exhibits
Exhibit Number Description of Exhibit Page 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 our report
dated September 10, 1999 relating to the financial statements and supplemental
schedules, which appears in Tandy Corporation's Annual Report of the Tandy Fund
on Form 11-K for the year ended March 31, 1999.
/s/ PricewaterhouseCoopers LLP
Fort Worth, Texas
September 24, 1999
