Form 11-K
Table of Contents

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 Nine-Month Period Ended December 31, 2003

 


 

RadioShack 401(k) Plan

(full title of Program)

 

RADIOSHACK CORPORATION

100 Throckmorton Street

Suite 1800

Fort Worth, Texas 76102

(Name of issuer and address of principal executive offices)

 

 



Table of Contents

RADIOSHACK 401(k) PLAN

 

FINANCIAL STATEMENTS

 

At December 31, 2003 and March 31, 2003 and for the

Nine-Month Period Ended December 31, 2003

 

Additional information required for Form 5500 at December 31, 2003


Table of Contents

RADIOSHACK 401(k) PLAN

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

 

     Page Number

Report of Independent Registered Public Accounting Firm

   1

Financial Statements:

    

Statements of Net Assets Available for Benefits at December 31, 2003 and March 31, 2003

   2

Statement of Changes in Net Assets Available
for Benefits for the Nine-Month Period Ended December 31, 2003

   3

Notes to Financial Statements

   4

Supplemental Schedule:

    

Schedule of Assets (Held at End of Period) at December 31, 2003

   10


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Report of Independent Registered Public Accounting Firm

 

To the Participants and Administrative Committee of the

RadioShack 401(k) Plan

 

In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the RadioShack 401(k) Plan (the “Plan”) at December 31, 2003 and March 31, 2003, and the changes in net assets available for benefits for the nine-month period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 our opinion.

 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes at December 31, 2003 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

/s/ PricewaterhouseCoopers LLP

Fort Worth, Texas

June 25, 2004

 

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RADIOSHACK 401(k) PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

At December 31, 2003 and March 31, 2003

 

    

December

31, 2003


  

March 31,

2003


Assets

             

Investments, at fair value:

             

Participant-directed

   $ 413,367,171    $ 183,647,211

Company-directed:

             

RadioShack Corporation common stock

     —        147,418,061

Common stocks

     —        7,071
    

  

Total investments

     413,367,171      331,072,343

Non-interest bearing cash

     436,833      —  

Receivables:

             

Participant contributions

     266,346      81,107

Employer contributions

     4,044,409      —  
    

  

Total receivables

     4,310,755      81,107
    

  

Net assets available for benefits

   $ 418,114,759    $ 331,153,450
    

  

 

The accompanying notes are an integral part of these financial statements

 

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RADIOSHACK 401(k) PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

Nine-Month Period Ended December 31, 2003

 

Additions:

      

Investment income:

      

Dividends-RadioShack Corporation common stock

   $ 2,289,648

Dividends-All other investments

     602,793

Participant loan interest

     869,612

Net appreciation in fair value of RadioShack common stock

     80,161,872

Net appreciation in fair value of all other investments

     19,652,816
    

Total investment income

     103,576,741
    

Contributions:

      

Participants

     13,400,070

Employer

     4,044,409

Rollovers

     242,971
    

Total contributions

     17,687,450
    

Total additions

     121,264,191
    

Deductions:

      

Benefits paid to participants

     34,213,285

Administrative expenses

     89,597
    

Total deductions

     34,302,882
    

Net increase in plan assets

     86,961,309

Net assets available for benefits at beginning of period

     331,153,450
    

Net assets available for benefits at end of period

   $ 418,114,759
    

 

The accompanying notes are an integral part of these financial statements

 

3


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RADIOSHACK 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

1. Description of Plan:

 

The following description of the RadioShack 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Summary Plan Description, which also constitutes the Plan’s prospectus, for a more complete description of the Plan’s provisions.

 

General

 

The Plan is a defined contribution employee benefit plan covering eligible employees of RadioShack Corporation, its divisions and subsidiaries (the “Company” or “RadioShack”). The Plan is an individual account plan with multiple, participant-directed investment options and is intended to conform to and qualify under Section 401 of the Internal Revenue Code (the “Code”), as amended. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). At January 1, 2004, the Plan year was changed to a calendar year basis, resulting in a statement of changes in net assets available for benefits for a nine-month period ended December 31, 2003.

 

At December 31, 2003 and March 31, 2003, there were 9,814 and 10,648 employees of the Company participating in the Plan and 20,113 and 22,704 employees eligible to participate, respectively.

 

On April 1, 2003, the Plan consisted of both a Company-directed feature and a participant-directed feature. The Company-directed feature consisted solely of RadioShack common stock and the participant-directed feature consisted of a number of mutual funds, common/collective trusts and money market funds. The Plan was amended, effective December 1, 2003, to enable employees to sell the Company-directed investment and reinvest the funds into any of the participant-directed investment vehicles mentioned above, thus rendering all investments participant-directed as of December 31, 2003.

 

Administration

 

The Company’s Board of Directors has appointed Putnam Fiduciary Trust Company (“Putnam”) as the Plan’s trustee and record keeper. The Plan is administered by an Administrative Committee appointed by the Board of Directors of the Company.

 

Eligibility

 

An employee is eligible to participate in the Plan at the beginning of the calendar quarter in which they are expected to complete one year of service of at least 1,000 hours, as defined in the Summary Plan Description, and attain the age of 18. Temporary employees are excluded from participation in the Plan.

 

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RADIOSHACK 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

Participant Contributions

 

Through authorized payroll deductions, participants may contribute to the Plan, on a pre-tax basis, up to 8%, in increments of 1%, of their annual compensation. Participant contributions are limited to certain annual maximums as set forth by the Code.

 

Participants may direct their contributions into various investment options. Participants may elect to allocate their total contributions to the various investment options in increments of 5%.

 

Participants are not subject to federal income taxation on their contributions and earnings thereon until withdrawn from the Plan.

 

Company Contributions

 

All Company contributions are discretionary and are made in the form of RadioShack common stock equal to 30% of a participant’s contribution.

 

Participants’ Accounts

 

Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s discretionary matching contribution, and (b) Plan earnings. Allocations are based on the participant’s contribution or number of shares held, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

 

The common stock account represents the participants’ interest in RadioShack common stock that has been allocated on a pro rata basis to the participants’ individual accounts.

 

Vesting

 

Participants are immediately vested in their contributions to the Plan plus actual earnings thereon. All participants become fully vested in the Company’s contributions, plus actual earnings thereon, upon completion of three years of service with the Company.

 

Benefits Paid to Participants

 

Participants who withdraw from the Plan may receive the vested portion of their accounts under one of four withdrawal methods, which are summarized below:

 

  (a) Single lump sum payment in cash ;

 

  (b) 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) ;

 

  (c) Equal monthly cash installments for a period of up to ten years (or the participant’s actual life expectancy, if shorter) ; or

 

  (d) Part cash and part securities .

 

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RADIOSHACK 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

Forfeited Accounts

 

Forfeited nonvested accounts of terminated participants are allocated among the remaining participants’ accounts. A total of $351,847 was forfeited and reallocated for the nine-month period ended December 31, 2003.

 

Loans to Participants

 

Up to two times per each twelve month period, a participant may borrow from his or her vested account in the Plan. The loan amount may not exceed the lesser of $50,000 or 50% of the value of the participant’s vested accounts. The minimum loan amount is $500. Additionally, no loan may exceed an amount that would cause the total of principal and interest payments on all outstanding loans to exceed 25% of the participant’s regular payroll period earnings. Loans are repaid through authorized payroll deductions. The term of the loan must be at least six months (or multiples thereof) and may not exceed five years. The loans are collateralized by the balance in the participant’s account and bear interest at rates fixed by the Administrative Committee. The determination of these rates is based upon the interest rates currently being charged on similar commercial loans. For the nine-month period ended December 31, 2003, interest rates on participant loans ranged from 5.00% to 10.50%.

 

Plan Termination

 

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will immediately become fully vested in their accounts.

 

2. Summary of Significant Accounting Policies:

 

Basis of Accounting

 

The Plan’s accompanying financial statements have been prepared under the accrual basis of accounting.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 additions and deductions 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 and valued daily. Shares of registered investment companies are valued at quoted market prices, which represents the net asset value of shares held by the Plan at year-end. Units of common/collective trust funds are valued based on the current market values of the underlying assets of the fund. Common stock is valued at its closing market price. Participant loans are valued at cost plus accrued interest, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date and interest income is recorded on the accrual basis.

 

The Plan presents, in the statement of changes in net assets available for benefits, the net appreciation in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation on those investments.

 

Concentration, Market and Credit Risk

 

Approximately two thirds of the investments of the Plan consist of securities of its sponsor, RadioShack, at December 31, 2003 and March 31, 2003. The Plan provides for various investment options in a variety of stock, mutual funds and other investment securities. Stock, mutual funds, and other investment securities are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amount reported in the Plan’s statement of net assets available for benefits.

 

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RADIOSHACK 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

Benefits Paid to Participants

 

Benefits are recorded when paid.

 

Administrative Expenses

 

For the nine-month period ended December 31, 2003, Putnam was responsible for both the management and recordkeeping of the Plan’s assets. Administrative expenses of the Plan are generally paid directly to Putnam by the Company and thus are not a component of the changes in net assets available for Plan benefits. Administrative expenses paid by participants are summarized in the statement of changes in net assets available for benefits, and include loan origination and withdrawal processing fees.

 

3. Investments

 

The following table presents the individual investments that exceed 5% or more of the Plan’s net assets at December 31, 2003 and March 31, 2003:

 

     December 31, 2003

   March 31, 2003

     Shares

   Fair Value

   Shares

   Fair Value

RadioShack Common Stock

                       

Participant-Directed

   9,007,062    $ 276,336,667    3,254,693    $ 72,557,909

Company-Directed

   —        —      6,613,641      147,418,061

Putnam Voyager Fund

   2,638,311      41,817,232    2,617,252      32,768,001

Participant Loans

   —        —      —        17,342,727

 

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RADIOSHACK 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

During the nine-month period ended December 31, 2003, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $99,814,688 as follows:

 

Common stock

   $ 80,161,872

Common/collective trusts

     3,064,897

Mutual funds

     16,587,919
    

     $ 99,814,688
    

 

4. Company-Directed Investments

 

As discussed in Note 1, effective December 1, 2003, the Plan was amended to allow participants to sell investments in previously Company-directed RadioShack common stock and reinvest the proceeds in other investment options. As a result of this amendment, the value of the Company-directed RadioShack common stock on December 1, 2003, was reclassified to the participant-directed investments, as indicated below.

 

Information about the net assets and the significant components of the changes in net assets relating to the Company-directed investments is as follows:

 

     December 31,
2003


  

March 31,

2003


Net Assets:

             

RadioShack common stock

   $  —      $ 147,418,061

 

     Nine-month period
ended December 31,
2003


 

Net appreciation in common stock

   $ 48,336,578  

Benefits paid to participants

     (15,330,383 )

Transfer to participant-directed investments

     (180,424,256 )
    


     $ (147,418,061 )
    


 

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RADIOSHACK 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

5. Tax Status of the Plan:

 

The Plan received a determination letter from the Internal Revenue Service (“IRS”) dated April 28, 1998. The Plan has subsequently been amended and the Administrative Committee has applied for a similar determination letter from the IRS for the Plan. However, the Administrative Committee and the Plan’s legal counsel believe that the Plan remains qualified under Section 401(a) of the Code and applicable sections of ERISA and, therefore, the trust is exempt from taxation under Section 501(a) of the Code. Accordingly, employee contributions, employer contributions and investment earnings of the Plan are not taxable to participants until distributed.

 

6. Related Party Transactions:

 

Certain Plan investments are shares of mutual funds and common/collective trusts managed by Putnam Investments, an affiliate of Putnam and, therefore, these transactions qualify as party-in-interest. In addition, the Plan invests in common stock of the Company. At December 31, 2003 and March 31, 2003, the Plan held 9,007,062 and 9,868,334 shares of Radio Shack common stock, respectively, which represented 5.5% and 5.8%, respectively, of the outstanding shares of the Company at those dates.

 

7. Reconciliation of Financial Statements to Form 5500:

 

The financial statements of the Plan, as prepared under accounting principles generally accepted in the United States of America, includes benefit payments to participants as deductions when paid. The Department of Labor requires that amounts allocated to participants who have elected to withdraw from the Plan, but have not been paid, be recorded as a liability on the Form 5500.

 

The following is a reconciliation of the net assets available for benefits from the financial statements to the Form 5500:

 

    

December 31,

2003


   

March 31,

2003


Net assets available for benefits from the financial statements

   $ 418,114,759     $ 331,153,450

Amounts related to withdrawing participants

     (137,116 )     —  
    


 

Net assets available for benefits from Form 5500

   $ 417,977,643     $ 331,153,450
    


 

 

The following is a reconciliation of benefit payments to participants from the financial statements to the Form 5500:

 

     For the Nine
Month Period
Ended
December 31, 2003


Benefit payments to participants from the financial statements

   $ 34,213,285

Plus: Amounts related to withdrawing participants at December 31, 2003

     137,116

Less: Amounts related to withdrawing participants at March 31, 2003

     —  
    

Benefit payments to participants from the Form 5500

   $ 34,350,401
    

 

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Schedule I

 

RADIOSHACK 401(k) PLAN

EIN - 75-1047710

Schedule H, line 4i

Plan Number - 001

Schedule of Assets (Held at End of Period)

At December 31, 2003

(a)    (b)    (c)    (d)   (e)
    

Identity of issue,

borrower, lessor or

similar party


  

Description of investment including

maturity date, rate of interest,

collateral, par or maturity date


   Cost

  Current Value

*

  

RadioShack Corporation

  

Common stock, 9,007,062 shares

   (i)   $ 276,336,667
    

Royce Total Return Fund

  

Mutual Fund

   (i)     225,616
    

MSIF Small Company Growth Fund

  

Mutual Fund

   (i)     1,163,100

*

  

Putnam Retirement Ready Maturity

  

Common/Collective Trust

   (i)     2,802,598

*

  

Putnam Retirement Ready 2010

  

Common/Collective Trust

   (i)     5,498,680

*

  

Putnam Retirement Ready 2015

  

Common/Collective Trust

   (i)     7,883,995

*

  

Putnam Retirement Ready 2020

  

Common/Collective Trust

   (i)     8,342,240

*

  

Putnam Retirement Ready 2025

  

Common/Collective Trust

   (i)     7,655,782

*

  

Putnam Retirement Ready 2030

  

Common/Collective Trust

   (i)     3,644,483

*

  

Putnam Retirement Ready 2035

  

Common/Collective Trust

   (i)     1,940,245

*

  

Putnam Retirement Ready 2040

  

Common/Collective Trust

   (i)     924,475

*

  

Putnam Retirement Ready 2045

  

Common/Collective Trust

   (i)     336,431

*

  

Putnam Investors Fund

  

Mutual Fund

   (i)     3,567,769

*

  

Putnam Income Fund

  

Mutual Fund

   (i)     9,437,821

*

  

Putnam Voyager Fund

  

Mutual Fund

   (i)     41,817,232

*

  

S&P 500

  

Common/Collective Trust

   (i)     3,610,496

*

  

Putnam International Equity

  

Mutual Fund

   (i)     3,280,642

*

  

Putnam International US Gov. Income

  

Mutual Fund

   (i)     1,744,334

*

  

Putnam Money Market Fund

  

Money Market Fund

   (i)     12,968,335

*

  

Putnam Equity Income Fund

  

Mutual Fund

   (i)     2,373,983

*

  

Participant Loans

  

Participant loans receivable – terms of 6 months– 5 years, interest rates of 5.00%—10.50%

   —       17,812,247
                  

                   $ 413,367,171
                  


* Denotes a party-in-interest to the Plan as defined by ERISA.
(i) Cost omitted for participant directed investments.

 

10


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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 thereunto duly authorized.

 

   

RADIOSHACK 401(K) PLAN

By:  

/s/ A. Grothues


   

A. Grothues

   

Administrative Committee Member

By:  

/s/ D. Johnson


   

D. Johnson

   

Administrative Committee Member

By:  

/s/ R. Ray


   

R. Ray

   

Administrative Committee Member

 

Date: June 28, 2004


Table of Contents

Index to Exhibits

 

Exhibit Number

 

Description of Exhibit


23   Consent of Independent Registered Public Accounting Firm