Radio Shack 2008 Annual Report Download - page 49

we may have an adjustment to our financial statements in future periods. A 10% change in our stock-
based compensation expense in 2008 would have affected our net income by approximately $1.3 million.
FACTORS THAT MAY AFFECT FUTURE RESULTS
Matters discussed in MD&A and in other parts of this report include forward-looking statements within the
meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements
are statements that are not historical and may be identified by the use of words such as “expect,”
“believe,” “anticipate,” “estimate,” “intend,” “potential” or similar words. These matters include statements
concerning management’s plans and objectives relating to our operations or economic performance and
related assumptions. We specifically disclaim any duty to update any of the information set forth in this
report, including any forward-looking statements. Forward-looking statements are made based on
management’s current expectations and beliefs concerning future events and, therefore, involve a number
of assumptions, risks and uncertainties, including the risk factors described in Item 1A, “Risk Factors,” of
this Annual Report on Form 10-K. Management cautions that forward-looking statements are not
guarantees, and our actual results could differ materially from those expressed or implied in the forward-
looking statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
At December 31, 2008, the only derivative instruments that materially increased our exposure to market
risks for interest rates, foreign currency rates, commodity prices or other market price risks were the
interest rate swaps noted in our MD&A. We do not use derivatives for speculative purposes.
Our exposure to interest rate risk results from changes in short-term interest rates. Interest rate risk exists
with respect to our net investment position at December 31, 2008, of $597.8 million, consisting of
fluctuating short-term investments of $747.8 million and offset by $150 million of indebtedness which,
because of our interest rate swaps, effectively bears interest at short-term floating rates. A hypothetical
increase or decrease of 100 basis points in the interest rate applicable to this floating-rate net exposure
would result in a change in annual net interest expense of $6.0 million. This hypothesis assumes no
change in the principal or investment balance.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Index to our Consolidated Financial Statements is found on page 46. Our Consolidated Financial
Statements and Notes to Consolidated Financial Statements follow the index.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We have established a system of disclosure controls and other procedures that are designed to ensure
that information required to be disclosed by us in the reports that we file or submit under the Securities
Exchange Act of 1934 (“Exchange Act”), is recorded, processed, summarized and reported within the time
periods specified by the SEC’s rules and forms, and that such information is accumulated and
communicated to management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under
the Exchange Act) was performed as of the end of the period covered by this annual report. This
evaluation was performed under the supervision and with the participation of management, including our
CEO and CFO.
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