TJX Companies Annual Report 2008

FY2008 Annual Report · TJX Companies
Loading PDF…
tjx

p o s i t i o n e d   f o r   t o d ay 
a n d   t h e   f u t u r e

t h e   t j x   c o m p a n i e s ,   i n c .
2 0 0 8   a n n u a l   r e p o r t

The TJX Companies, Inc., the largest off-price apparel and home 
fashions retailer in the United States and worldwide, is a Fortune 200 
company operating under eight nameplates with over 2,600 stores and 
approximately 133,000 Associates. At 2008’s year-end, TJX’s off-price 
concepts included T.J. Maxx, Marshalls, HomeGoods, and A.J. Wright, 
in the U.S., Winners and HomeSense in Canada, and T.K. Maxx and 
HomeSense in Europe. Our off-price mission is to deliver a rapidly 
changing assortment of quality, brand name merchandise at prices that 
are 20-60% less than department and specialty store regular prices, 
every day. Our core target customer is a middle- to upper-middle-
income shopper, who is fashion and value conscious and ﬁ ts the same 
proﬁ le as a department store shopper. A.J. Wright targets a more 
moderate-income market.

The TJX Companies, Inc.

Positioned for Today

Positioned for the Future 

(cid:129) Flexible Business Model

(cid:129) Growing Customer/Vendor Base

(cid:129) Financial Strength

(cid:129) Stronger Competitive Position

(cid:129) Conservative Approach 
  for 2009

(cid:129) Promising Growth Vehicles

To Our Fellow Shareholders:

In a difﬁ cult economy like the one we faced in 2008, ﬂ exibility is key. TJX has one 
of the most ﬂ exible business models in the world along with great ﬁ nancial strength. 
For a Company as large as TJX, our ﬂ exibility allowed us to react quickly and strategi-
cally when the economy declined dramatically in the fall. Our business held its own 
and performed better than most of the retail industry in 2008. We continued to deliver 
great value, which continued to attract customers to our stores even as the holiday 
shopping season became deeply promotional. Customer trafﬁ c was up for the year, 
which indicates we are gaining market share in this tough environment. We believe 
the retail environment will remain extremely difﬁ cult in the year ahead and we are 
taking a prudent approach in 2009. That said, our long-term vision to grow TJX as a 
global, off-price/value retailer remains unchanged. We are capitalizing on the ﬂ exibility 
in our business to take actions today that will help us weather the recession and posi-
tion us well to emerge in an even stronger competitive position when times improve. 

While our 2008 results were below our expectations for the full year, our performance 
exceeded our plans up until the fourth quarter, as the economy deteriorated suddenly 
and signiﬁ cantly. The economic downturn impacted retailers across the board, but 
as the fourth quarter progressed, our off-price/value proposition continued to reso-

nate with customers and our consolidated 
comparable store sales were among the top 
of our retail peer group’s. Overall for 2008, 
net sales were $19.0 billion, a 4% increase 
over the prior year, and consolidated 
comparable store sales increased 1%. Net 
income from continuing operations was 
$915 million. Adjusted diluted earnings per 
share from continuing operations were 
$2.01, a 4% increase over the adjusted 
$1.93 in the prior year.1 Overall, we grew 
total square footage by 4%, netting 123 
stores to end the year with 2,652 stores. 

One of the highlights of the year 
was that consolidated merchandise 
margins were up overall, despite 
the challenging consumer envi-
ronment and over strong increases 
last year. Additionally, our A.J. 
Wright division, an important 
growth vehicle for our future, 
made great progress in 2008 and 
achieved proﬁ tability for the year. 
Further, our T.K. Maxx businesses 

Our extremely ﬂ exible business model enables
us to respond swiftly to macro challenges.

in Europe performed extremely well in a very difﬁ cult retail environment. Our new 
HomeSense business in the U.K. got off to a solid start. Our stores in Germany 
outperformed our expectations, which is very encouraging for our growth prospects 
in Europe, considering that we believe Germany alone could support 250-300 stores 
in the long term.

conse rvative approach  i n  20 09

We are taking a conservative approach in 2009. We are implementing actions in the 
short term to protect the bottom line in an uncertain economic environment that we 
believe also will position us to be even stronger in the long term. The three main planks 
of our strategy are to plan comparable store sales conservatively, run the business with 
very lean inventories, and eliminate approximately $150 million from our already low 
cost structure. 

eve n smarte r  off-pric e  buy i ng

Establishing conservative comparable store sales plans forces inventory levels and ex-
penses to be structured around this reduced sales expectation. To the extent that we 
exceed our plans, we will ﬂ ow more proﬁ ts to the bottom line. One key opportunity 
to drive sales goes to the heart of our business and that is being even smarter off-price 
buyers. In a ﬁ ercely promotional environment, delivering great fashion and brands at 
extreme value is critical. We are placing an even greater emphasis on brands and buying 
even closer to need. Further, we are aggressively shifting more of our purchase dollars to 
off-price, closeout deals, which create excitement in our stores and the “WOW” factor 
that our customers love. We see our stores as the destination for moderate- to high-end 

1  On a GAAP basis, diluted earnings per share from continuing operations for Fiscal 2009 were $2.08 versus $1.68 in the prior year.  
  Fiscal 2009 adjusted earnings per share from continuing operations exclude the positive impacts of a $.04 per share reduction to the  
  reserve for the previously announced computer intrusion(s) and a $.03 per share beneﬁ t due to a tax-related adjustment. Fiscal 2008  
  adjusted results exclude an after-tax charge of $.25 per share related to the computer intrusion(s). Fiscal 2009 had 53 weeks.

3

We believe that value is the place to be, in 
good as well as difﬁ cult times.

brands at low-end prices! The ﬂ exibility we have in our stores and distribution centers 
supports our off-price buying strategies. Our stores have no walls between departments, 
so we can expand and contract departments to take advantage of buying opportunities. 
Further, we have implemented greater efﬁ ciencies in our distribution network, which 
gives our buyers conﬁ dence to make closer-to-need buys, knowing the merchandise 
will ﬂ ow to our stores when it is needed on the selling ﬂ oor. 

initiative s to  drive  sale s

As always, we are taking intelligent risks to drive sales, which includes testing new 
merchandise initiatives and expanding those that are working. At Marshalls, The Cube, 
which we rolled out to over 280 additional stores in 2008, following successful testing 
in the prior year, is driving the Juniors business. This is exciting because attracting 
younger customers is a key to our growth. At T.J. Maxx, our expanded accessories 
departments continue to do very well and The Runway designer departments continue 
to help us attract upscale department-store customers in speciﬁ cally targeted demo-

4

graphic markets. The continued success of our expanded footwear departments at 
Marshalls and Winners prompted our 2008 tests of the Shoe MegaShop by Marshalls 
in the U.S. and STYLESENSE in Canada. We opened just four stores between these 
two concepts in 2008, and in 2009, we will continue to test these concepts. If they 
continue to be successful, as we expect they will be, they represent two new growth 
vehicles for North America. Testing new merchandise initiatives is a key way to inject 
more excitement into our stores and develop ways in which to grow our business.

marketing: bolde r  me ssag e,  bi g g e r  aud i e nc e

We will be bolder in our marketing in 2009 through our new advertising campaigns, 
which will aggressively communicate our value message and educate customers about 
our off-price concept. We learned a lot from the testing and analysis that we conducted 
in 2008 and have found a strategy that we believe will simultaneously reduce our 
marketing spend and reach a broader audience in the upcoming year. We are looking 
forward to the launch of our ﬁ rst-ever national network television campaign, which 
means penetrating advertising markets for 35% of our store base where we have never 
before advertised on television.

tighte r inve ntorie s, faste r  turn s

Another major strategy of our conservative approach in this challenging retail environ-
ment is to run our business with both leaner and even fresher inventories. We entered 
the year in a historically low and liquid inventory position. For our buyers, this means 
having “sweaty palms” and making more off-price 
deals. We are ﬂ owing new merchandise assortments 
to our stores nearly every day and driving faster 
turns. We believe our stores look fresher than ever 
this spring, which sets us apart from many other 
retailers. We expect that managing with very lean 
inventories, combined with our initiatives to drive 
sales, will lead to even higher merchandise margins 
in 2009 while simultaneously offering truly excel-
lent value to customers. 

co st savings  boo st  profi tabi li ty 

The third major strategy in our conservative 
approach in 2009 is lowering our cost structure by 
approximately $150 million to protect proﬁ tability. 
As part of our off-price business model, we have 
always operated with a low cost structure. How-
ever, with the challenges of an extremely weak 
consumer environment, we have taken a hard 
look at opportunities to improve efﬁ ciencies 
and processes that will reduce our expenses 
even further. Overall, these strategies were 

well received when communicated to the organization, and Associates across the Com-
pany are contributing new ideas for reducing expenses. The cost-savings measures span 
all areas of the organization, including a hiring and salary freeze and voluntary retirement 
program; store and distribution center efﬁ ciencies; the reduced marketing spend we 
mentioned earlier, and; driving savings in the procurement of non-merchandise supplies 
and services. These are just some of the actions that we are taking at this time and we 
hope they will be enough to endure the recession; that said, we may need to implement 
additional measures should the economic environment worsen. Importantly, we expect 
these actions will not only help protect the bottom line in the short term, but will also 
improve our cost structure for the long term.

g row i ng  our   c u stom e r   and   ve ndor  base

The volatile retail environment offers opportunities for us to grow our customer and 
vendor base for the future. With our value proposition, we are attracting new customers 
and gaining market share. Despite consumer weakness in 2008, we remained a shopping 
destination of choice. Even as the department and specialty stores reached historically 
high levels of promotions in the fourth quarter, we saw an increase in customer trafﬁ c at 
our stores. Our history tells us that when customers discover our values in difﬁ cult times, 
they continue to shop our stores when times improve. This is key, because even a slight 
improvement in the economy and capturing a piece of an increase in consumers’ discre-
tionary spending would be very meaning-
ful for our business. Just as we attract new 
customers in tough times, this retail envi-
ronment also is an opportunity for us to 
expand our vendor universe, which already 
numbers over 10,000 vendors and spans 
over 60 countries. We opened hundreds of 
new vendor doors in 2008, and establishing 
new vendor relationships remains a priority 
in 2009. TJX has some of the best vendor 
relationships in retailing and new vendors 
learn quickly that they like doing business 
with us. With a merchant organization over 
600 people strong, we believe in support-
ing our vendors and work hard to build 
longstanding relationships that are mutu-
ally beneﬁ cial in the short and long terms. 
Broadening our purchase universe affords us 
even greater ﬂ exibility in sourcing product 
and allows us to offer an even wider selec-
tion of brands for our customers. 

6

We see ourselves today as the destination for 
moderate/high-end brands at low-end prices.

st rong e r  com petitive  po sit i on

Unfortunately, many retailers already have gone out of business and many others will 
likely do the same. Consumer demand has decreased signiﬁ cantly, but fewer open retail 
stores creates an opportunity for our business. We believe this will be particularly true 
in the home fashions area, which should beneﬁ t HomeGoods and our other home 
businesses. Consolidation within retail also creates real estate opportunities that give us 
a tremendous advantage for the future both in the U.S. as well as abroad. The current 
real estate landscape is presenting unprecedented opportunities not only for new store 
locations, but also for relocating stores to more favorable locations and renegotiating 
leases on even better terms. For example, in the U.K., we are relocating some of our 
early stores to more desirable locations, and other locations that were previously 
unavailable to us are opening up for the ﬁ rst time. 

7

Our ﬁ nancial strength and ﬂ exibility are more
important today than ever.

g rowth ve hicle s  pe rforming we ll 

An important reason for our continued conﬁ dence is that the growth vehicles we have 
in our younger and smaller businesses are performing very well, despite the challenging 
economy. A.J. Wright gained signiﬁ cant traction in 2008. We have a better understanding 
of how to market to our A.J. Wright customers, are focusing on key merchandise catego-
ries that are important for them, and have sharpened our values. The proﬁ tability of indi-
vidual A.J. Wright stores dramatically improved in 2008, which bodes well for long-term 
investment returns. We will continue to be prudent in our approach to growth, but we 
believe A.J. Wright, with its large moderate-income customer demographic in the U.S., 
holds great potential for the future of TJX. 

We continue to believe that being an international retailer gives us great advantages in 
the short and long term. Our new T.K. Maxx stores in Germany exceeded our expecta-
tions in 2008 and are achieving ﬁ nancial results very close to those of our established 
stores in the U.K. and Ireland, which bodes well for our future growth in Europe. We also 
opened our ﬁ rst HomeSense stores in the U.K. in 2008 to positive customer response, 
which presents another vehicle for us to grow in Europe. We are the only major off-price 
retailer of any size in Europe, and believe we have major opportunities to grow 
our Company there.

financial stre ngth  and f lex ib i li ty

Our ﬁ nancial strength and ﬂ exibility have always been cornerstones of TJX’s success and 
have become even more critical in today’s economy. In this very uncertain economic 
environment, our approach is to manage our strong balance sheet and cash position to 
preserve ﬁ nancial ﬂ exibility. We have an “A” Standard & Poor’s credit rating, one of the 
strongest in retail, and ample ﬁ nancial liquidity, including the signiﬁ cant excess cash gen-
erated by our strong operations. In 2008, we generated $1.2 billion from operations. After 
reinvesting in our businesses, we increased the per-share dividend by 22%, and bought 
back $741 million of TJX stock, which was less than we originally anticipated, as we took 
a more conservative approach to share repurchases in response to the economic crisis. 

8

Our capital expenditures are planned at $450 million for 2009, which is $133 million 
less than last year. We have reduced our pace of store openings to net approximately 
65 new stores overall in 2009, about half the number we opened in 2008, and have 
approached these plans very strategically. With these conservative plans, we will be 
maintaining our ﬂ exibility and keeping our powder dry to take advantage of real estate 
opportunities that we expect will become increasingly attractive as the year proceeds. 
Therefore, we may decide to open more stores, but we will see how the year progresses. 
We have slowed the pace at HomeGoods as we believe the competitive landscape will 
improve for this business as the recession eases over time. Although we will proceed 
prudently, A.J. Wright’s solid progress and improved results in 2008 give us the conﬁ -
dence to increase the pace of growth at this division and open the new market of 
Atlanta, Georgia, in 2009. As T.K. Maxx in Germany continues to outperform, we 
expect to open ten additional stores in that country by 2009 year-end.

We expect to repurchase approximately $250 million of TJX stock in 2009, which we 
may adjust up or down, depending on the economic environment. We remain com-
mitted to returning value to our shareholders through stock repurchases and dividends, 
which we will balance with maintaining ﬁ nancial liquidity. In April 2009, the Board 
of Directors approved a 9% increase in the per-share dividend, which underscores our 
conﬁ dence in the Company and its ﬁ nancial position. With our strong ﬁ nancial foun-
dation and cash ﬂ ow, we believe we are well positioned to respond to the challenges of 
this economy and take advantage of opportunities it may present.

global off -price retai le r v i si on 

While we are facing what is the worst retail envi-
ronment this Company has ever seen, our long-
term vision to grow TJX as a global, off-price/
value retailer is unwavering. This Company has 
held its own through three past recessions and we 
are conﬁ dent that with our value proposition, we 
will remain a retailer of choice for customers in 
challenging times and build our customer base 
for the future. While our execution in the short 
term has shifted to accommodate the current 
retail environment, we have great conﬁ dence in 
this Company’s ability to weather these tough 
times and believe we will be in an even stronger 
competitive position in a smaller retail landscape 
when the recession is over. 

9

The ﬂ exibility and resiliency of our business model give us great advantages. We are 
developing new vendor relationships and taking advantage of real estate opportunities, 
which will beneﬁ t our business longer term. Our younger and smaller growth vehicles 
are performing well, domestically and internationally. We are taking actions in the short 
term to protect the bottom line and preserve our ﬁ nancial liquidity. Importantly, our 
ﬁ nancial strength underscores our conﬁ dence in our ability to manage through the 
recession and successfully grow TJX in the years ahead. 

our g ratitude

In April 2009, Donald Campbell stepped down from his position as Vice Chairman of 
TJX and will remain available as an Advisor to the Company. In his over three decades 
of dedicated service, Don served as Chief Administrative and Business Development 
Ofﬁ cer and prior to that, as the Company’s Chief Financial Ofﬁ cer, a post he held from 
1989-2004. With Don’s business acumen, in-depth knowledge of TJX and steadfastness, 
he has been a highly valued resource to our Company and has played a major role in 
the Company’s success. We will always be grateful for Don’s many years of tireless com-
mitment to TJX.

In January 2009, Arnold Barron, who served in the role of Senior Executive Vice Presi-
dent, Group President since 2004, retired. Over the past 30 years, Arnold has been an 
integral part of the culture, growth and success of our business. He was instrumental in 
the development and growth of T.J. Maxx and made signiﬁ cant contributions to each of 
our other businesses. We will miss working with Arnold and extend to him our sincerest 
gratitude, and wish good health and happiness to him and his family.

We have a management team and organization determined to manage through these 
challenging times and build upon opportunities for the future. We want to sincerely 
thank our 133,000 Associates for their hard work and dedication, especially in such dif-
ﬁ cult times. The year 2009 will present many challenges, and we have great conﬁ dence 
that with this organization’s strong commitment and dedicated efforts, we will meet the 
challenges of the recession head on and grow successfully in the future. We extend our 
gratitude to our customers for their loyalty and patronage, and we also thank our fellow 
shareholders, vendors, and other business associates for their ongoing support.

Respectfully,

Bernard Cammarata
Chairman of the Board

Carol Meyrowitz
President and  
Chief Executive Ofﬁ cer

10

A Neighbor of Choice

Photo credit: Save the Children

A major component of our platform as a Company of 
Choice is being a Neighbor of Choice. As a Neighbor of 
Choice, we embrace the communities and neighbor-
hoods in which we live and work, and in these 
difﬁ cult economic times, being a good neighbor is 
more important than ever.

Through The TJX Foundation, TJX touches many 
communities in signiﬁ cant ways. In 2008, The TJX 
Foundation, together with our divisions, supported 
over 1,800 nonproﬁ t organizations. Our charitable 
focus continues to be organizations that support 
women, children and families in need.  As part of 
our philanthropic work, we invite Associates in our 
stores, ofﬁ ces and distribution centers to recommend 
organizations in their communities to receive 
charitable grants, making our efforts more localized 
and meaningful for both our Associates and custom-
ers. In 2008, nearly 30,000 Associates participated 
in our annual United Way campaign, in addition 
to donating their time, talent and efforts to many 
worthwhile charitable causes throughout the year.  

In 2008, in the U.S., T.J. Maxx continued its long-
standing support of Save the Children, an organiza-
tion dedicated to the welfare of children in need.  
Marshalls continued its support of organizations for 
the prevention of domestic violence against women 
and children. HomeGoods again conducted fund-
raising for the Family Violence Prevention Fund, 
as well as for the Jimmy Fund in its search for a 
cure for childhood cancer. A.J. Wright continued 
its support of the Boys & Girls Clubs of America, 
both at the national level and locally, giving kids a 
safe place to play and be kids. In Canada, Winners, 
HomeSense and STYLESENSE continued to 
support the Canadian Women’s Foundation, which
is dedicated to preventing violence against women, 
as well as Ovarian Cancer Canada and The Sunshine 

Foundation: Dreams for Kids. In Europe, T.K. Maxx 
continued its support of Action for Children 
(formerly NCH), which assists vulnerable children, 
and also ran an extremely successful campaign to 
beneﬁ t Cancer Research UK. Recently, T.K. Maxx 
held its most successful Comic Relief campaign, 
which helps people suffering poverty or social 
injustice in the U.K. and Africa. HomeSense U.K. 
supports Emmaus, a charity dedicated to improving 
the lives of people who are homeless.

Being a Neighbor of Choice also encompasses our 
community and governmental programs. Through 
TJX Community Relations, we continued our 
outreach programs that align with our business 
goals, including working with school, professional 
and cultural organizations. Our Workforce Initiatives 
Group continued the Welfare-to-Work Program, 
through which we have hired more than 82,000 
people from the welfare system since 1997. Through 
our relationships with community-based organiza-
tions, we have also helped transition many talented 
individuals with special needs to work in our stores, 
distribution centers and home ofﬁ ces. We are proud 
of our involvement with the 5-Star Statement of 
Support for the National Guard and Reserve. In 
2008, TJX was nationally recognized for our 
commitment to Associates who serve in the 
military and their families.  

We take pride in our community efforts and are 
equally proud that our successes in this regard are 
due to the hard work and dedication of our Associ-
ates. Integrity and treating people with dignity and 
fairness are at the core of TJX’s values. By being true 
to who we are and the communities that we serve, 
TJX is able to add great value to the lives of those 
in the communities around us. 

11

C O N S O L I DAT E D   P E R F O R M A N C E

N E T   S A L E S

S E G M E N T   P RO F I T

s
n
o
i
l
l
i

m

$

1,600

1,200

800

400

0

82* 83*

91*

02*

09*

82*

83*

91*

02*

09*

* Recession

( f y )

* Recession

( f y )

S E L E C T E D   C A S H   F L OW   DATA  

S T O R E   C O U N T

Net Cash 
from Operating
Activities

Property
Additions

Share
Repurchases
Dividend 
Payments

s
e
r
o
t
s

3,000

2,500

2,000

1,500

1,000

500

0

05

09

05

09

05

09

83

89

94

99

04

09

( f y )

( f y e )

20

16

12

8

4

0

s
n
o
i
l
l
i
b

$

s
n
o
i
l
l
i

m

$

1,500

1,250

1,000

750

500

250

0

 
 
 
form 10-kcontents  Business Overview  3Store Locations  7Selected Financial Data  21Management’s Discussion & Analysis  22Report of Independent Registered Public Accounting Firm  F-2Consolidated Financial Statements  F-3Notes to Consolidated Financial Statements:  F-7 Selected Business Segment Financial Information  F-30 Selected Quarterly Financial Data  F-33pageThe line graph above compares the cumulative performance of TJX’s common stock with the S&P Composite-500 Stock Index and the Dow Jones Apparel Retailers Index as of the date nearest the end of TJX’s ﬁ scal year for which index data is readily available for each year in the ﬁ ve-year period ended January 31, 2009. The graph assumes that $100 was invested on January 30, 2004, in each of TJX’s common stock, the S&P Compos-ite-500 Stock Index and the Dow Jones Apparel Retailers Index and that all dividends were reinvested.FIVE-YEAR CUMULATIVE PERFORMANCE OF TJX STOCK COMPARED WITH S&P 500 INDEX AND THE DJ APPAREL INDEXTJX Stock Performance2005base yeardollars2006200720082009180160140120100806040200tjxs&pdjarUNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWASHINGTON,DC20549FORM10-K[x]AnnualReportPursuanttoSection13or15(d)oftheSecuritiesExchangeActof1934ForthefiscalyearendedJanuary31,2009or[]TransitionReportPursuanttoSection13or15(d)oftheSecuritiesExchangeActof1934ForthetransitionperiodfromtoCommissionfilenumber1-4908THETJXCOMPANIES,INC.(Exactnameofregistrantasspecifiedinitscharter)Delaware04-2207613(Stateorotherjurisdictionofincorporationororganization)(IRSEmployerIdentificationNo.)770CochituateRoadFramingham,Massachusetts01701(Addressofprincipalexecutiveoffices)(ZipCode)Registrant’stelephonenumber,includingareacode(508)390-1000SecuritiesregisteredpursuanttoSection12(b)oftheAct:TitleofeachclassCommonStock,parvalue$1.00pershareNameofeachexchangeonwhichregisteredNewYorkStockExchangeSecuritiesregisteredpursuanttoSection12(g)oftheAct:NONEIndicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YES[x]NO[]IndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YES[]NO[x]Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YES[x]NO[]IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-K(§229.405ofthischapter)isnotcontainedherein,andwillnotbecontained,tothebestofregistrant’sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.[]Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,orasmallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler”and“smallerreportingcompany”inRule12b-2oftheExchangeAct.(Checkone):LargeAcceleratedFiler[x]AcceleratedFiler[]Non-AcceleratedFiler[]SmallerReportingCompany[](Donotcheckifasmallerreportingcompany)Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheAct).YES[]NO[x]Theaggregatemarketvalueofthevotingcommonstockheldbynon-affiliatesoftheregistrantonJuly26,2008was$13,553,030,893,basedontheclosingsalepriceasreportedontheNewYorkStockExchange.Therewere412,821,592sharesoftheregistrant’scommonstock,$1.00parvalue,outstandingasofJanuary31,2009.DOCUMENTSINCORPORATEDBYREFERENCEPortionsoftheProxyStatementtobefiledwiththeSecuritiesandExchangeCommissioninconnectionwiththeAnnualMeetingofStockholderstobeheldonJune2,2009(PartIII).CautionaryNoteRegardingForward-LookingStatementsOurdisclosureandanalysisinthisForm10-Kandinour2008AnnualReporttoShareholderscontain“forward-lookingstatements,”withinthemeaningofthePrivateSecuritiesLitigationReformActof1995,includingsomeofthestatementsinthisForm10-KunderItem1,“Business,”Item7,“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations,”andItem8,“FinancialStatementsandSupplementaryData,”andinour2008AnnualReporttoShareholdersunder“LettertoShareholders”and“FinancialGraphs.”Forward-lookingstatementsareinherentlysubjecttorisks,uncertaintiesandpotentiallyinaccurateassumptions.Suchstatementsgiveourcurrentexpectationsorforecastsoffutureevents;theydonotrelatestrictlytohistoricalorcurrentfacts.Wehavegenerallyidentifiedsuchstatementsbyusingwordssuchas“anticipate,”“believe,”“could,”“estimate,”“expect,”“forecast,”“intend,”“lookingforward,”“may,”“plan,”“potential,”“project,”“should,”“target,”“will”and“would”oranyvariationsofthesewordsorotherwordswithsimilarmeanings.Allstatementsthataddressactivities,eventsordevelopmentsthatweintend,expectorbelievemayoccurinthefutureareforward-lookingstatementswithinthemeaningofSection27AoftheSecuritiesActof1933,asamendedandSection21EoftheSecuritiesExchangeActof1934,asamended,orExchangeAct.These“forwardlookingstatements”mayrelatetosuchmattersasourfutureactions,futureperformanceorresultsofcurrentandanticipatedsales,expenses,interestrates,foreignexchangeratesandtheoutcomeofcontingenciessuchaslegalproceedings,andfinancialresults.Wecannotguaranteethattheresultsandotherexpectationsexpressed,anticipatedorimpliedinanyforward-lookingstatementwillberealized.TheriskssetforthunderItem1AofthisForm10-Kdescribemajorriskstoourbusiness.Avarietyoffactorsincludingtheseriskscouldcauseouractualresultsandotherexpectationstodiffermateriallyfromtheanticipatedresultsorotherexpectationsexpressed,anticipatedorimpliedinourforward-lookingstatements.Shouldknownorunknownrisksmaterialize,orshouldourunderlyingassumptionsproveinaccurate,actualresultscoulddiffermateriallyfrompastresultsandthoseanticipated,estimatedorprojectedintheforward–lookingstatements.Youshouldbearthisinmindasyouconsiderforward-lookingstatements.Ourforward-lookingstatementsspeakonlyasofthedatesonwhichtheyaremade,andwedonotundertakeanyobligationtoupdateanyforward-lookingstatement,whethertoreflectnewinformation,futureeventsorotherwise.Youareadvised,however,toconsultanyfurtherdisclosureswemaymakeinourfuturereportstotheSECorotherwise.2PartIITEM1.BUSINESSBUSINESSOVERVIEWTheTJXCompanies,Inc.(TJX)istheleadingoff-priceapparelandhomefashionsretailerintheUnitedStatesandworldwide.Ourover2,600storesofferarapidlychangingassortmentofquality,brand-nameanddesignermerchandiseatpricesgenerally20%to60%belowdepartmentandspecialtystoreregularpriceseveryday.RetailConcepts:Weoperatesevenoff-priceretailconceptsintheU.S.,CanadaandEuropeandareknownforourtreasurehuntshoppingexperienceandexcellentvalues.Theoperatingplatformsandstrategiesofallofourretailconceptsaresynergistic.Therefore,wecapitalizeonouroff-priceexpertiseandsystemsthroughoutourbusiness,leveragebestpractices,initiativesandnewideasacrossourconcepts,utilizethesubstantialbuyingpowerofourbusinessestoleverageourglobalrelationshipswithvendors,anddeveloptalentbyprovidingopportunitiesacrossourconcepts.IntheUnitedStates:—T.J.MAXXandMARSHALLS:T.J.MaxxandMarshallsarethelargestoff-priceretailersintheUnitedStateswith1,680stores.WefoundedT.J.Maxxin1976andacquiredMarshallsin1995.Bothchainssellfamilyapparel(includingfootwearandaccessories),homefashions(includinghomebasics,accentfurniture,lamps,rugs,walldécor,decorativeaccessoriesandgiftware)andothermerchandise,primarilytargetingthemiddletoupper-middleincomecustomerdemographic.WemaintaintheseparateidentitiesofT.J.MaxxandMarshallsthroughdifferentproductassortment(includinganexpandedassortmentoffinejewelryandaccessoriesatT.J.Maxxandafulllineoffootwearandbroadermen’sandjuniors’offeringsatMarshalls),in-storeinitiatives,marketingandstoreappearance.ThedifferentiatedshoppingexperienceatT.J.MaxxandMarshallsencouragesourcustomerstoshopbothchains.—HOMEGOODS:HomeGoods,introducedin1992,isanoff-priceretailerofhomefashionsintheU.S.Through318stores,itsellsabroadarrayofhomebasics,giftware,accentfurniture,lamps,rugs,walldécor,decorativeaccessories,children’sfurniture,seasonalmerchandiseandotherfashionsforthehome.—A.J.WRIGHT:Launchedin1998,A.J.Wright,likeT.J.MaxxandMarshalls,sellsoff-pricefamilyapparel,homefashionsandothermerchandise.Cateringtotheentirefamily,keyapparelcategoriesforA.J.Wright’s135storesincludebasics,children’s,women’splussizes,juniors,youngmen’sandfootwear.Differentfromallofourotherchains,A.J.Wrightprimarilytargetsthemoderate-incomecustomerdemographic.InCanada:—WINNERS:Acquiredin1990,Winnersistheleadingoff-priceapparelandhomefashionsretailerinCanada.Themerchandiseofferingatits202storesacrossCanadaissimilartoT.J.MaxxandMarshalls.In2008,WinnersbegantestingStyleSense,anewconceptthatoffersfamilyfootwearandaccessories.—HOMESENSE:HomeSenseintroducedthehomefashionsoff-priceconcepttoCanadain2001.Thechainhas75storesofferingamerchandisemixofhomefashionssimilartoHomeGoods.InEurope:—T.K.MAXX:Launchedin1994,T.K.Maxxintroducedoff-pricetotheU.K.andisEurope’sonlymajoroff-priceretailerofapparelandhomefashions.With235stores,T.K.MaxxoperatesintheU.K.andIrelandandexpandedtoGermanyin2007.T.K.MaxxoffersamerchandisemixsimilartoT.J.MaxxandMarshallsintheU.S.andWinnersinCanada.—HOMESENSE:HomeSenseintroducedthehomefashionsoff-priceconcepttotheU.K.in2008anditssevenstoresofferamerchandisemixofhomefashionsintheU.K.likethatofHomeGoodsintheU.S.andHomeSenseinCanada.3FlexibleBusinessModel:Ouroff-pricebusinessmodelisflexible,particularlyforacompanyofoursize,allowingustoreacttomarkettrends.Ouropportunisticbuyingandinventorymanagementstrategiesgiveusflexibilitytoadjustthemerchandiseinourstoresmorefrequentlythantraditionalretailers,andourstoresanddistributioncentersarebuilttosupportthisflexibility.Bymaintainingaliquidinventoryposition,ourmerchantscanbuyclosetoneed,enablingthemtobuyintocurrentmarkettrendsandtakeadvantageofopportunitiesinthemarketplace.Buyingclosetoneedgivesustheabilitytoturnourinventorymorerapidlyandadjustourpricingtothecurrentmarketmorefrequentlythanconventionalretailers.Oursellingfloorspaceisflexible,withoutwallsbetweendepartmentsandlargelyfreeofpermanentfixtures,sowecaneasilyexpandandcontractdepartmentsinresponsetocustomerdemand,availablemerchandiseandfashiontrends.Ourdistributionfacilitiesaredesignedtoaccommodateourmethodsofreceivingandshippingbothsmallandlargequantitiesofproducttoourlargestorebasequicklyandefficiently.OpportunisticBuying:Wearedistinguishedfromtraditionalretailersbyouropportunisticbuyingofbrandname,fashionablemerchandise.Wepurchasethemajorityoftheinventoryforourapparelchainsandasignificantportionoftheinventoryforourhomefashionchainsopportunistically.Ourmerchantorganizationnumbersover600.Incontrasttotraditionalretailers,whichtypicallyordergoodsfarinadvanceofthetimetheproductappearsonthesellingfloor,ourmerchantsareinthemarketplacevirtuallyeveryweek,buyingprimarilyforthecurrentsellingseason,andtoalimitedextent,forafuturesellingseason.Duetotheunpredictablenatureofsupplyandconsumerdemandinthehighlyfragmentedapparelandhomefashionsmarketplace,weareabletobuythevastmajorityofouropportunisticinventorydirectlyfrommanufacturers,withsomecomingfromotherretailersandsources.Wesourcefromavendoruniverseofover10,000vendorsayearandpurchasevirtuallyallofourinventoryatdiscountsfrominitialwholesaleprices.Asmallpercentageofthemerchandisewesellisprivatelabelmerchandiseproducedspecificallyforusbythirdpartymanufacturers.Webelieveanumberoffactorsmakeusanattractiveoutletforthevendorcommunityandprovideusexcellentaccessonanongoingbasistoleadingbrandedmerchandise.Wearewillingtopurchaseless-than-fullassortmentsofitems,stylesandsizes,paypromptlyanddonotaskfortypicalretailconcessions(suchasadvertising,promotionalandmarkdownallowances),deliveryconcessions(suchasdropshipmentstostoresordelayeddeliveries)orreturnprivileges.Weareabletopurchasequantitiesofinventorythatrangefromsmalltoverylargeandwehavetheabilitytosellproductthroughageographicallydiversenetworkofstores.Importantly,inTJX,weoffervendorsanoutletwithfinancialstrengthandanexcellentcreditrating.InventoryManagement:Weofferourcustomersarapidlychangingselectionofmerchandisetocreatea“treasurehunt”experienceinourstores.Toachievethis,weseektorapidlyturntheinventoryinourstores,regularlyofferingfreshselectionsofapparelandhomefashionsatexcellentvalues.Ourspecializedinventoryplanning,purchasing,monitoringandmarkdownsystems,coupledwithdistributioncenterstorage,processing,handlingandshippingsystems,enableustotailorthemerchandiseinourstorestolocalpreferences,achieverapidin-storeinventoryturnoveronavastarrayofproductsandsellsubstantiallyallmerchandisewithintargetedsellingperiods.Pricingandmarkdowndecisionsandstoreinventoryreplenishmentaredeterminedcentrally,usinginformationprovidedbyspecializedcomputersystems,andaredesignedtomoveinventorythroughourstoresinatimelyanddisciplinedmanner.Wedonotgenerallyengageinpromotionalpricingactivity.LowCostOperations:Weoperatewithalowcoststructurecomparedtomanyothertraditionalretailers.Wefocusaggressivelyonexpensesthroughoutourbusiness,includingmerchandiseandnon-merchandiseprocurement.Ouradvertisingbudgetasapercentageofsalesislowcomparedtotraditionalretailers.Wedesignourstores,generallylocatedincommunityshoppingcenters,toprovideapleasant,convenientshoppingenvironmentbutdonotspendheavilyonstorefixtures.Additionally,ourdistributionnetworkisdesignedtoruncosteffectively.CustomerService:Whileweofferaself-serviceformat,wetrainourstoreassociatestoprovidefriendlyandhelpfulcustomerservice.Wealsohavecustomer-friendlyreturnpolicies.Weacceptavarietyofpaymentmethodsincludingcash,creditcardsanddebitcards.IntheU.S.,weofferaco-brandedTJXcreditcardandaprivatelabelcreditcard,boththroughamajorbank,butdonotmaintaincustomercreditreceivablesrelatedtoeitherprogram.4Distribution:Weoperate13distributioncentersintheU.S.,2inCanadaand4intheU.K.Ourdistributioncentersencompassapproximately11millionsquarefeet.Weshipsubstantiallyallofourmerchandisetoourstoresthroughthesedistributioncenters,whicharelarge,highlyautomatedandbuilttosuitourspecific,off-pricebusinessmodel,aswellaswarehousesoperatedbythirdparties.Weshippedapproximately1.5billionunitstoourstoresduringfiscal2009.StoreGrowth:ExpansionofourbusinessthroughtheadditionofnewstoresisanimportantpartofourstrategyforTJXasaglobal,off-price,valuecompany.Thefollowingtableprovidesinformationonthegrowthandpotentialgrowthofeachofourchains:ApproximateAverageStoreSize(squarefeet)Fiscal2008Fiscal2009Fiscal2010(estimated)EstimatedUltimateNumberofStoresNumberofStoresatYearEndIntheUnitedStates:T.J.Maxx30,000847874Marshalls32,000776806Marmaxx1,6231,6801,6972,000HomeGoods25,000289318322550-600A.J.Wright26,000129135148500InCanada:Winners29,000191202211230HomeSense24,00071757980InEurope:T.K.Maxx32,000226235249525-575*HomeSense19,000—710100-1502,5292,6522,7163,985-4,135*RepresentsestimatednumberofstoresforU.K.,GermanyandIrelandonly.Inaddition,Marshallsopened2free-standingShoeMegaShopbyMarshallsstoresintheU.S.infiscal2009,whichsellfamilyfootwear,andWinnersopened2StyleSensestoresinCanadainfiscal2009,whichsellfamilyfootwearandaccessories.SomeofourHomeGoodsandHomeSensestoresareco-locatedwithoneofourapparelstoresinasuperstoreformat.Wecounteachofthestoresinthesuperstoreformatasaseparatestore.RevenueInformation:Thepercentagesofourconsolidatedrevenuesbygeographyforthelastthreefiscalyearswereasfollows:Fiscal2007Fiscal2008Fiscal2009UnitedStates79%77%77%Northeast27%26%26%Midwest14%13%13%South(includingPuertoRico)25%25%25%West13%13%13%Canada10%11%11%Europe11%12%12%Total100%100%100%5Thepercentagesofourconsolidatedrevenuesbymajorproductcategoryforthelastthreefiscalyearswereasfollows:Fiscal2007Fiscal2008Fiscal2009Clothingincludingfootwear63%62%62%Homefashions25%26%25%Jewelryandaccessories12%12%13%Total100%100%100%SegmentOverview:Weoperatefivebusinesssegments:threeintheU.S.andoneineachofCanadaandEurope.Eachofoursegmentshasitsownadministrative,buyingandmerchandisingorganizationanddistributionnetwork.OfourU.S.-basedstores,T.J.MaxxandMarshalls,referredtoasMarmaxx,aremanagedtogetherandreportedasasinglesegment,andA.J.WrightandHomeGoodseachisreportedasaseparatesegment.OutsidetheU.S.,ourchainsinCanadaaremanagedtogetherandourchainsinEuropearemanagedtogether.Thus,CanadaisreportedasasegmentandEuropeisreportedasasegment.Moredetailedinformationaboutoursegments,includingfinancialinformationforeachofthelastthreefiscalyears,canbefoundinNotePtotheconsolidatedfinancialstatements.6STORELOCATIONSWeoperatedstoresinthefollowinglocationsasofJanuary31,2009:StoresLocatedintheUnitedStates:T.J.Maxx*Marshalls*HomeGoods*A.J.WrightAlabama1852—Arizona11166—Arkansas8—1—California76111347Colorado1174—Connecticut2523116Delaware331—DistrictofColumbia11—1Florida6570333Georgia362710—Idaho511—Illinois37401518Indiana171028Iowa62——Kansas631—Kentucky9432Louisiana810——Maine843—Maryland112376Massachusetts47482120Michigan3320118Minnesota12128—Mississippi52——Missouri13126—Montana3———Nebraska42——Nevada673—NewHampshire14851NewJersey3140227NewMexico33——NewYork47592319NorthCarolina282110—NorthDakota3———Ohio381898Oklahoma44——Oregon853—Pennsylvania3931126PuertoRico—146—RhodeIsland5642SouthCarolina1994—SouthDakota2———Tennessee251463Texas426614—Utah10—2—Vermont411—Virginia312578Washington1510——WestVirginia521—Wisconsin16762Wyoming1———TotalStores874806318135*IncludesT.J.Maxx,MarshallsorHomeGoodsportionofasuperstore.7StoresLocatedinCanada:Winners*HomeSense*Alberta238BritishColumbia2614Manitoba61NewBrunswick32Newfoundland21NovaScotia62Ontario9535PrinceEdwardIsland1—Quebec3711Saskatchewan31TotalStores20275*IncludesWinnersorHomeSenseportionofasuperstore.StoresLocatedinEurope:T.K.MaxxHomeSenseUnitedKingdom2117RepublicofIreland15—Germany9—TotalStores2357CompetitionTheretailapparelandhomefashionbusinessishighlycompetitive.Wecompeteonthebasisoffashion,quality,price,value,merchandiseselectionandfreshness,brandnamerecognition,service,reputationandstorelocation.Wecompetewithlocal,regional,nationalandinternationaldepartment,specialty,off-price,discount,warehouseandoutletstoresaswellasotherretailersthatsellapparel,homefashionsandothermerchandisethatwesell,whetherinstores,throughcataloguesormediaorovertheinternet.EmployeesAtJanuary31,2009,wehadapproximately133,000employees,manyofwhomworklessthan40hoursperweek.Inaddition,wehiretemporaryemployeesduringthepeakback-to-schoolandholidayseasons.TrademarksWehavetherighttouseourprincipaltrademarksandservicemarks,whichareT.J.Maxx,Marshalls,HomeGoods,Winners,HomeSense,T.K.MaxxandA.J.Wright,inrelevantcountries.Ourrightsinthesetrademarksandservicemarksendureforaslongastheyareused.SeasonalityOurbusinessissubjecttoseasonalinfluences.Inthesecondhalfoftheyear,whichincludestheback-to-schoolandholidayseasons,wegenerallyrealizehigherlevelsofsalesandincome.SaleofBob’sStoresInfiscal2009,wesoldBob’sStores,avalue-oriented,brandedapparelchainweacquiredinfiscal2004.Thelossonthesaleandhistoricalresultsofoperationshavebeenaccountedforasdiscontinuedoperations.SECFilingsandCertificationsCopiesofourannualreportsonForm10-K,proxystatements,quarterlyreportsonForm10-QandcurrentreportsonForm8-KfiledwithorfurnishedtotheSecuritiesandExchangeCommission,orSEC,andany8amendmentstothosedocuments,areavailablefreeofchargeonourwebsite,www.tjx.com,under“SECFilings,”assoonasreasonablypracticableaftertheyareelectronicallyfiledwithorfurnishedtotheSEC.TheyarealsoavailablefreeofchargefromTJXInvestorRelations,770CochituateRoad,Framingham,Massachusetts,01701.ThepubliccanreadandcopymaterialsattheSEC’sPublicReferenceRoomat100FStreet,NE,Washington,DC20549,1-800-SEC-0330.TheSECmaintainsawebsitecontainingallreports,proxies,informationstatements,andallotherinformationregardingissuersthatfileelectronically(http://www.sec.gov).TheAnnualCEOCertificationforthefiscalyearendedJanuary26,2008,asrequiredbytheNewYorkStockExchange,regardingourcompliancewiththecorporategovernancelistingstandardsoftheNYSE,wassubmittedtotheNYSEonJune23,2008.Unlessotherwiseindicated,allstoreinformationinthisItem1isasofJanuary31,2009,andreferencestostoresquarefootagearetogrosssquarefeet.Fiscal2007meansthefiscalyearendedJanuary27,2007,fiscal2008meansthefiscalyearendedJanuary26,2008,fiscal2009meansthefiscalyearendedJanuary31,2009andfiscal2010meansthefiscalyearendingJanuary30,2010.Unlessotherwisestatedorthecontextotherwiserequires,referencesinthisForm10-Kto“TJX,”“we,”“us”and“our”refertoTheTJXCompanies,Inc.anditssubsidiaries.ITEM1A.RISKFACTORSThestatementsinthisSectiondescribethemajorriskstoourbusinessandshouldbeconsideredcarefully,inconnectionwithalloftheotherinformationsetforthinthisannualreportonForm10-K.Therisksthatfollow,individuallyorintheaggregate,arethosethatwethinkcouldcauseouractualresultstodiffermateriallyfromthosestatedorimpliedinforward-lookingstatements.Theadversechangesinglobaleconomicconditionsandinfinancialandcreditmarketshaveadverselyaffectedandcouldcontinuetoadverselyaffectourfinancialperformance.Aswidelyreported,economiesworldwideareincrisis,andglobalfinancialmarketshavebeenexperiencingextremevolatility,disruptionandcreditcontraction.Thecurrentvolatilityanddisruptiontothecapitalmarketshavereachedunprecedentedlevelsandhavesignificantlyadverselyimpactedglobaleconomicconditionsandmaycontinuetodoso,resultinginadditionalsignificantrecessionarypressuresanddeclinesinemploymentlevels,disposableincomeandactualandperceivedwealth.Adverseeconomicconditionscontinuetoaffectconsumerconfidenceanddiscretionaryconsumerspendingandhaveadverselyaffectedandmaycontinuetoadverselyaffectoursales,cashflowsandresultsofoperations.Additionally,adverseconditionsinthefinancialandcreditmarketscouldadverselyaffectourcostsofcapitalandthesourcesofliquidityavailabletousandhaveincreasedandcouldinthefutureincreaseourpensionfundingrequirements.Finally,theeffectsandconsequencesofthecurrentglobaleconomiccrisismaynotyetbeknown,whichcouldpotentiallyhaveamaterialadverseeffectonourliquidityandcapitalresources,orotherwisenegativelyaffectourbusinessandfinancialresults.Fluctuationsinforeigncurrencyexchangeratesmayleadtolowerrevenuesandearnings.InadditiontoourU.S.businesses,weoperatestoresinCanada,theU.K.,IrelandandGermany.SalesmadebyourstoresoutsidetheUnitedStatesaredenominatedinthecurrencyofthecountryinwhichthestoreislocated,andchangesinforeignexchangeratesaffectthetranslationofthesalesandearningsofthesebusinessesintoU.S.dollarsforfinancialreportingpurposes.Becauseofthis,movementsinexchangerateshavehadandareexpectedtocontinuetohaveasignificantimpactonournetsalesandearnings.Additionally,weroutinelyenterintoinventory-relatedhedginginstrumentstomitigatetheimpactofforeignexchangeonmerchandisemarginsofmerchandisepurchasedbyourinternationalsegmentsthatisdenominatedincurrenciesotherthantheirlocalcurrencies.Inaccordancewithgenerallyacceptedaccountingprinciples,weevaluatethefairvalueofthesehedginginstrumentsandmakemark-to-marketadjustmentsattheendofanaccountingperiod.Theseadjustmentsareofamuchgreatermagnitudewhenthereissignificantvolatilityincurrencyexchangeratesandmayhaveasignificantimpactonourearnings.9Inaddition,changesinforeignexchangeratescanincreasethecostofinventorypurchasesbyoneofourbusinessesthataredenominatedinacurrencyotherthanthelocalcurrencyofthatbusiness.Whenthesechangesoccursuddenly,itcanbedifficultforustoadjustretailpricesaccordingly,andgrossmargincanbeadverselyaffected.WeexpectthatsuchchangesmaymateriallyaffectthegrossmarginsofourCanadasegment.Althoughweimplementforeigncurrencyhedgingandriskmanagementstrategiestoreduceourexposuretofluctuationsinearningsandcashflowsassociatedwithchangesinforeignexchangerates,weexpectthatforeigncurrencyfluctuationscouldhaveamaterialadverseeffectonournetsalesandresultsofoperations.Failuretoexecuteouropportunisticbuyingandinventorymanagementcouldadverselyaffectourbusiness.Wepurchasethemajorityofourinventoryopportunisticallywithourbuyerspurchasingclosetoneed.Todrivetraffictothestoresandtoincreasesamestoresales,thetreasurehuntnatureoftheoff-pricebuyingexperiencerequirescontinuedreplenishmentoffresh,highquality,attractivelypricedmerchandiseinourstores.Whileopportunisticbuyingenablesourbuyerstobuyatopportunetimesandprices,inthequantitiesweneedandintomarkettrends,itplacesconsiderablediscretioninourbuyers,subjectingustorisksonthetiming,pricing,quantityandnatureofinventoryflowingtothestores.Inaddition,webaseourpurchasesofinventory,inpart,onsalesforecasts.Ifoursalesforecastsdonotmatchcustomerdemand,wemayexperiencehigherinventorylevelsanddecreasedprofitmarginsifwehaveexcessorslow-movinginventory,orwemayhaveinsufficientinventorytomeetcustomerdemand,eitherofwhichcouldadverselyaffectourfinancialperformance.Inadditiontoacquiringinventory,wemustproperlyexecuteourinventorymanagementstrategiesthrougheffectivelyallocatingmerchandiseamongourstores,timelyandefficientlydistributinginventorytostores,maintaininganappropriatemixandlevelofinventoryinstores,appro-priatelychangingtheallocationoffloorspaceofstoresamongproductcategoriestorespondtocustomerdemandandeffectivelymanagingpricingandmarkdowns.Failuretoexecuteouropportunisticinventorybuyingandinventorymanagementwellcouldadverselyaffectourperformanceandourrelationshipwithourcustomers.Failuretocontinuetoexpandouroperationssuccessfullycouldadverselyaffectourfinancialresults.Wehavesteadilyexpandedthenumberofconceptsandstoresweoperate.Ourrevenuegrowthisdependent,amongotherthings,uponourabilitytocontinuetoexpandsuccessfullythroughnewstoreopeningsaswellasourabilitytoincreasesamestoresales.Successfulstoregrowthrequiresacquisitionanddevelopmentofappropriaterealestateincludingselectionofstorelocationsinappropriategeographies,availabilityofattractivestoresorstoresitesinsuchlocationsandnegotiationofacceptableterms.Competitionfordesirablesites,increasesinrealestate,constructionanddevelopmentcostsandavailabilityandcostsofcapitalcouldlimitourabilitytoopennewstoresindesirablelocationsinthefutureoradverselyaffecttheeconomicsofnewstores.Whenweopenstoresinnewmarkets,wemayencounterdifficultiesinattractingcustomersduetoalackofcustomerfamiliaritywithourbrand,ourlackoffamiliaritywithlocalcustomerpreferences,andseasonaldifferencesinthemarket.Newstoresmaynotachievethesamesalesorprofitlevelsasourexistingstoresandmaybeadverselyaffectedbythesalesandprofitabilityofexistingstoresintheirmarketareas.Further,expansionplacessignificantdemandsontheadministrative,merchandising,storeoperations,distributionandotherorganizationsinourbusinessestomanagerapidgrowth,andwemaynotdososuccessfully.Failuretosuccessfullyidentifycustomertrendsandpreferencestomeetcustomerdemandcouldnegativelyimpactourperformance.Becauseoursuccessdependsonourabilitytomeetcustomerdemand,wetakevariousstepstokeepupwithconsumertrendsandpreferencesincludingcontactswithvendors,monitoringproductcategoryandfashiontrendsandcomparisonshoppingandactivelymonitoringfashiontrends.Ouropportunisticbuyingmodelallowsustobuyclosetoneedandinresponsetoconsumerpreferencesandtrends.However,identifyingconsumertrendsandpreferencesandsuccessfullymeetingcustomerdemandischallenging,andthesestepsandouroff-pricebuyingmaybeinsufficienttodoso,whichcouldadverselyaffectourresults.10Ourquarterlyoperatingresultscanbesubjecttosignificantfluctuationsandmayfallshortofeitherapriorquarterorinvestors’expectations.Ouroperatingresultshavefluctuatedfromquartertoquarteratpointsinthepast,andtheymaycontinuetodosointhefuture.Ourearningsmaynotcontinuetogrowatratessimilartothegrowthratesachievedinrecentyearsandmayfallshortofeitherapriorquarterorinvestors’expectations.Ifwefailtomeettheexpectationsofsecuritiesanalystsorinvestors,oursharepricemaydecline.Factorsthatcouldcauseusnottomeetanalysts’earningsexpectationsincludesomefactorsthatarewithinourcontrol,suchastheexecutionofouroff-pricebuying;selection,pricingandmixofmerchandise;andinventorymanagementincludingflow,markonandmarkdowns;andsomefactorsthatarenotwithinourcontrol,includingactionsofcompetitors,weatherconditions,economicconditionsandconsumerconfidence,andseasonality.Inaddition,ifwedonotrepurchasethenumberofshareswecontemplatepursuanttoourstockrepurchaseprogram,ourearningspersharemaybeadverselyaffected.Mostofouroperatingexpenses,suchasrentexpenseandassociatesalaries,donotvarydirectlywiththeamountofsalesandaredifficulttoadjustintheshortterm.Asaresult,ifsalesinaparticularquarterarebelowexpectationsforthatquarter,wemaynotproportionatelyreduceoperatingexpensesforthatquarter,andthereforesuchasalesshortfallwouldhaveadisproportionateeffectonournetincomeforthequarter.Wemaintainaforecastingprocessthatseekstoprojectsalesandalignexpenses.Ifwedonotcorrectlyforecastsalesorappropriatelyadjusttoactualresults,ourfinancialperformancecouldbeadverselyaffected.Ourfutureperformanceisdependentuponourabilitytocontinuetoexpandwithinourexistingmarketsandtoextendouroff-pricemodelinnewproductlines,chainsandgeographicregions.Ourstrategyistocontinuetoexpandwithinexistingmarketsandtoexpandtonewmarketsandgeographies.Thisgrowthstrategyincludesdevelopingnewwaystosellmoreordifferentmerchandisewithinourexistingstores,continuedexpansionofourexistingchainsinourexistingmarketsandcountries,expansionofthesechainstonewmarketsandcountries,anddevelopmentandopeningofnewchains,allofwhichentailsignificantrisk.Ourgrowthisdependentuponourabilitytosuccessfullyextendouroff-priceretailapparelandhomefashionsconceptsintheseways.Unsuccessfulextensionofourmodelcouldadverselyaffectfuturegrowthorfinancialperformance.Failuretoimplementourmarketing,advertisingandpromotionalprogramssuccessfully,orifourcompetitorsaremoreeffectivewiththeirprogramsthanweare,mayadverselyaffectourrevenue.Weusemarketing,advertisingandpromotionalprogramstoattractcustomerstoourstores.Weusevariousmediafortheseprograms,includingprint,television,databasemarketinganddirectmarketing.Someofourcompetitorsmayhavesubstantiallylargerexpendituresfortheirprograms,whichmayprovidethemwithacompetitiveadvantage.Therecanbenoassurancethatwewillbeabletocontinuetoeffectivelyexecuteourmarketing,advertisingandpromotionalprograms,andanyfailuretodosocouldhaveamaterialadverseeffectonourrevenueandresultsofoperations.OuractuallossesarisingfromtheComputerIntrusioncouldexceedourreserveforourestimatedprobablelosses,andourreputationandbusinesscouldbemateriallyharmedasaresultofanyfuturedatabreach.Wesufferedanunauthorizedintrusionorintrusions(suchintrusionorintrusions,collectively,the“ComputerIntrusion”)intoportionsofourcomputersystemthatprocessandstoreinformationrelatedtocustomertransactions,whichwasdiscoveredlateinfiscal2007andinwhichwebelievethatcustomerdatawerestolen.Asaresultwefacedandcontinuetofacelitigation,claimsandinvestigations.WehaverecordedareservethatreflectsourestimationofprobablelossesarisingfromtheComputerIntrusioninaccordancewithgenerallyacceptedaccountingprinciples.Whilethisreserverepresentsourbestestimationoftotal,potentialcashliabilitiesfromlitigation,proceedings,investigationsandotherclaims,aswellaslegalandothercostsandexpenses,arisingfromtheComputerIntrusion,thereisnoassurancethatouractuallosseswillnotbegreater.SincediscoveringtheComputerIntrusion,wehavetakenstepsdesignedtofurtherstrengthenthesecurityofourcomputersystemandprotocolsandhaveinstitutedanongoingprogramwithrespecttodatasecurity.Nevertheless,therecanbenoassurancethatwewillnotsufferafuturedatacompromise.Werelyoncommerciallyavailablesystems,11software,toolsandmonitoringtoprovidesecurityforprocessing,transmissionandstorageofconfidentialcustomerinformation,suchaspaymentcardandpersonalinformation.Further,thesystemscurrentlyusedfortransmissionandapprovalofpaymentcardtransactions,andthetechnologyutilizedinpaymentcardsthemselves,allofwhichcanputpaymentcarddataatrisk,aredeterminedandcontrolledbythepaymentcardindustry,notbyus.Improperactivitiesbythirdparties,advancesincomputerandsoftwarecapabilitiesandencryptiontechnology,newtoolsanddiscoveriesandothereventsordevelopmentsmayfacilitateorresultinafurthercompromiseorbreachofourcomputersystem.Anysuchfurthercompromisesorbreachescouldcauseinterruptionsinouroperations,damagetoourreputationandcustomers’willingnesstoshopinourstores,violationofapplicablelaws,regulations,ordersandagreements,andsubjectustoadditionalcostsandliabilitieswhichcouldbematerial.Ourbusinessissubjecttoseasonalinfluencesandadecreaseinsalesormarginsduringthesecondhalfoftheyearcouldadverselyaffectouroperatingresults.Ourbusinessissubjecttoseasonalinfluences;wegenerallyrealizehigherlevelsofsalesandincomeinthesecondhalfoftheyear,whichincludestheback-to-schoolandyear-endholidayseasons.Anydecreaseinsalesormarginsduringthisperiodcouldhaveadisproportionatelyadverseeffectonourfinancialconditionandresultsofoperations.Weexperiencerisksassociatedwithoursubstantialsizeandscale.Weoperatesevenretailconceptsinseveralcountries.Someaspectsofthebusinessesandoperationsoftheconceptsareconductedwithrelativeautonomy.Thelargesizeofouroperations,ourmultiplebusinessesandtheautonomyaffordedtotheconceptsincreasetheriskthatsystemsandpracticeswillnotbeimplementeduniformlythroughoutourcompanyandthatinformationwillnotbeappropriatelysharedacrossdifferentconceptsandcountries.Unseasonableweatherinthemarketsinwhichourstoresoperateorourdistributioncentersarelocatedcouldadverselyaffectouroperatingresults.Adverseandunseasonableweatheraffectscustomers’willingnesstoshopandtheirdemandforthemerchandiseinourstores.Frequentorunusuallyheavysnow,iceorrainstorms,severecoldorheatorextendedperiodsofunseasonabletemperaturesinourmarketscouldadverselyaffectoursalesandincreasemarkdowns.Inaddition,naturaldisasterssuchashurricanes,tornadoes,floodsandearthquakescouldseverelydamageordestroyoneormoreofourstoresordistributionfacilitieslocatedintheaffectedareasorresultinthesuspensionofbusinessintheaffectedareasorinareasservedbytheaffecteddistributioncenter,therebydisruptingourbusinessoperations.Weoperateinhighlycompetitivemarkets,andwemaynotbeabletocompeteeffectively.Theretailbusinessishighlycompetitive.Wecompetewithmanyotherlocal,regional,nationalandinternationalretailersthatsellapparel,homefashionsandothermerchandisethatwesell,whetherinstores,throughcatalogsormediaorovertheinternet.Wecompeteonthebasisofquality,price,value,merchandiseselectionandfreshness,brandnamerecognition,service,reputationandstorelocation.Othercompetitivefactorsthatinfluencethedemandforthemerchandisewesellincludeouradvertising,marketingandpromotionalactivitiesandthenamerecognitionandreputationofourchains.Ifwefailtocompeteeffectively,oursalesandresultsofoperationscouldbeadverselyaffected.Failuretoattractandretainqualitysales,distributioncenterandotherassociatesinappropriatenumbersaswellasexperiencedbuyingandmanagementpersonnelcouldadverselyaffectourperformance.Ourperformancedependsonrecruiting,developing,trainingandretainingqualitysales,distributioncenterandotherassociatesinlargenumbersaswellasexperiencedbuyingandmanagementpersonnel.Manyofourassociatesareinentrylevelorpart-timepositionswithhistoricallyhighratesofturnover.Thenatureoftheworkforceintheretailindustrysubjectsustotheriskofimmigrationlawviolations,whichriskhasincreasedinrecentyears.Ourabilitytomeetourlaborneedswhilecontrollinglaborcostsissubjecttoexternalfactorssuchasunemploymentlevels,prevailingwagerates,minimumwagelegislation,changingdemographics,healthandotherinsurancecostsandgovernmentallaborandemploymentrequirements.Intheeventofincreasingwagerates,ifwefailtoincreaseourwagescompetitively,thequalityofourworkforcecoulddecline,causingourcustomerservicetosuffer,whileincreasingourwagescouldcauseourearningstodecrease.Inaddition,certainassociatesinourdistributioncentersaremembersofunionsandthereforesubjectustotheriskoflaboractions.Becauseofthedistinctivenatureofouroff-pricemodel,12wemustdosignificantinternaltraininganddevelopmentforasubstantialnumberofourassociates.Themarketforretailmanagementishighlycompetitiveand,incommonwithotherretailers,wefacechallengesinsecuringsufficientmanagementtalent.Changesthatadverselyimpactourabilitytoattractandretainqualityassociatesandmanagementpersonnelcouldadverselyaffectourperformance.Ifweengageinmergersoracquisitionsofnewbusinesses,ordivestanyofourcurrentbusinesses,ourbusinesswillbesubjecttoadditionalrisks.Wehavegrownourbusinessinpartthroughmergersandacquisitions.Wemayconsideropportunitiestoacquirenewbusinessesortodivestcurrentbusinesses.Acquisitionordivestitureactivitiesmaydivertattentionofmanagementfromoperatingtheexistingbusinesses.Wemaydoaless-than-optimaljobofevaluatingtargetcompaniesandtheirrisksandbenefits,andintegrationofacquisitionscanbedifficultandtime-consuming.Acquisitionsmaynotmeetourexpectationsormayexposeustounexpectedorgreater-than-expectedliabilities.Divestiturealsoinvolvesrisks,suchastherisksofexposureonleaseobligations,obligationsundertakeninthedispositionandpotentialliabilitiesthatmayariseunderlawasaresultofthedispositionorthesubsequentfailureoftheacquirer.Failuretoexecuteonmergersordivestituresinasatisfactorymannercouldadverselyaffectourfutureresultsofoperationsandfinancialcondition.Failuretooperateinformationsystemsandimplementnewtechnologieseffectivelycoulddisruptourbusinessorreduceoursalesorprofitability.Theefficientoperationofourbusinessdependsonourinformationsystems,includingourabilitytooperatethemeffectivelyandtosuccessfullyselectandimplementnewtechnologies,systems,controlsandadequatedisasterrecoverysystems.WemustoperateandimplementthesesystemsandtechnologiessuchthatweprotecttheconfidentialityofdataofourCompany,ourassociates,ourcustomersandotherthirdparties.Thefailureofourinformationsystemstoperformasdesignedorourfailuretoimplementandoperatethemeffectivelycoulddisruptourbusinessorsubjectustoliabilityandtherebyharmourprofitability.Wedependuponstrongcashflowsfromouroperationstosupportnewcapitalexpansion,operations,debtrepayment,stockrepurchaseprogramanddividends.Ourbusinessdependsuponouroperationstogeneratestrongcashflowsandupontheavailabilityoffinancingsourcestosupportourcapitalexpansionrequirements,generaloperatingactivities,stockrepurchaseprogramanddividendsandtofunddebtrepayment.Ourinabilitytocontinuetogeneratesufficientcashflowstosupporttheseactivitiesorthelackofavailabilityoffinancinginadequateamountsandonappropriatetermscouldadverselyaffectourfinancialperformanceorourearningspersharegrowth.Generaleconomicandotherfactorsadverselyaffectconsumerspending,whichcouldadverselyaffectoursalesandoperatingresults.Interestrates;recession;inflation;deflation;consumercreditavailability;consumerdebtlevels;energycosts;taxratesandpolicy;unemploymenttrends;threatsorpossibilitiesofwar,terrorismorotherglobalornationalunrest;actualorthreatenedepidemics;politicalorfinancialinstability;andgeneraleconomic,politicalandotherfactorsbeyondourcontrolhavesignificanteffectsonconsumerconfidenceandspending.Consumerspending,inturn,affectssalesatretailers,whichcouldincludeTJX.Thesefactorscouldadverselyaffectoursalesandperformanceifwedonotsuccessfullyimplementstrategiestomitigatethem.Issueswithmerchandisequalityorsafetycoulddamageourreputation,salesorfinancialresults.Variousgovernmentalauthoritiesregulatethequalityandsafetyofthemerchandisewesellinourstores.Regulationsandstandardsinthisarea,includingthoserelatedtotherecentlyenactedConsumerProductSafetyImprovementActof2008intheUnitedStates,maychangefromtimetotime.Ourinabilitytocomplyonatimelybasiswithregulatoryrequirementscouldresultinsignificantfinesorpenalties,whichcouldhaveamaterialadverseeffectonourfinancialresults.Issueswiththequalityandsafetyofmerchandisewesellinourstores,regardlessofourfault,orcustomerconcernsaboutsuchissues,couldcausedamagetoourreputation,lostsales,uninsuredproductliabilityclaimsorlosses,merchandiserecallsandincreasedcosts,andregulatory,civilorcriminalfinesorpenalties,whichcouldhaveamaterialadverseeffectonourfinancialresults.13Wearesubjecttoimportrisksassociatedwithimportingmerchandisefromabroad.Manyoftheproductssoldinourstoresaresourcedbyourvendorsandtoalimitedextentbyusinmanyforeigncountries.Asaresult,wearesubjecttothevariousrisksofdoingbusinessinforeignmarketsandimportingmerchandisefromabroad,suchas:—potentialdisruptionsinsupply;—changesinduties,tariffs,quotasandvoluntaryexportrestrictionsonimportedmerchandise;—strikesandothereventsaffectingdelivery;—consumerperceptionsofthesafetyofimportedmerchandise,particularlymerchandiseimportedfromthePeople’sRepublicofChina;and—economic,politicalorotherproblemsincountriesfromorthroughwhichmerchandiseisimported.Politicalorfinancialinstability,traderestrictions,tariffs,currencyexchangerates,transportcapacityandcostsandotherfactorsrelatingtointernationaltradeandimportedmerchandisecouldaffecttheavailabilityandthepriceofourinventory.Ourexpandinginternationaloperationsexposeustorisksinherentinforeignoperations.WehaveasignificantretailpresenceinCanada,theUnitedKingdomandIreland,andhaverecentlyexpandedintoGermany.Ourgoalistocontinuetoexpandintootherinternationalmarketsinthefuture.OurforeignoperationsencounterriskssimilartothosefacedbyourU.S.operations,aswellasrisksinherentinforeignoperations,suchasunderstandingtheretailclimateandtrends,localcustomsandcompetitiveconditionsinforeignmarkets,complyingwithforeignlaws,rulesandregulations,andforeigncurrencyfluctuations,whichcouldhaveanadverseimpactonourprofitability.Ourresultsmaybeadverselyaffectedbyfluctuationsinthepriceofoil.Pricesofoilhavefluctuateddramaticallyinthepast.Thesefluctuationsmayresultinanincreaseinourtransportationcostsfordistribution,utilitycostsforourretailstoresandcoststopurchaseourproductsfromsuppliers.Acontinuedriseinoilpricescouldadverselyaffectconsumerspendinganddemandforourproductsandincreaseouroperatingcosts,bothofwhichcouldhaveanadverseeffectonourperformance.Changesinlawsandregulationsandoutcomesoflitigationandproceedingscouldnegativelyaffectourbusinessoperationsandfinancialperformance.Wearesubjecttofederal,state,provincialorlocallaws,rulesandregulationsintheUnitedStatesandabroad,anyofwhichmaychangefromtimetotimeinwayswhichcouldmateriallyadverselyaffectouroperationsandourfinancialresultsandcondition.Wearefromtimetotimeinvolvedinlitigationandproceedings,theoutcomesofwhichifdeterminedadverselytouscouldmateriallyadverselyaffectouroperationsandourfinancialresultsandcondition.Inaddition,U.S.generallyacceptedaccountingprinciplesinaccordancewithwhichweprepareourfinancialstatementsmaychangefromtimetotime,andthesechangescouldhavematerialeffectsonourreportedfinancialresultsandcondition.Weownandleaseforlongperiodssignificantamountsofrealestate,whichsubjectsustovariousfinancialrisks.Weleasevirtuallyallofourstorelocationsgenerallyforlongtermsandeitherownorleaseforlongperiodsourprimarydistributioncentersandadministrativeoffices.Accordingly,wearesubjecttotherisksassociatedwithowningandleasingrealestate.Whilewehavetherighttoterminatesomeofourleasesunderspecifiedconditionsbymakingspecifiedpayments,wemaynotbeabletoterminateaparticularleaseiforwhenwewouldliketodoso.Ifanexistingorfuturestoreisnotprofitable,andwedecidetocloseit,wemaybecommittedtoperformobligationsundertheapplicablelease,including,amongotherthings,payingrentandoperatingexpensesforthebalanceoftheleaseterm,orexercisingrightstoterminate,andtheperformanceofanyoftheseobligationsmaybeexpensive.Whenweassignorsubleaseleasedproperty,wecanremainliableontheleaseobligationsiftheassigneeorsublesseedoesnotperform.In14addition,whenleasesexpire,wemaybeunabletonegotiaterenewals,eitheroncommerciallyacceptabletermsoratall,whichcouldcauseustoclosestores.Ourstockpricemayfluctuatebasedonmarketexpectations.Thepublictradingofourstockisbasedinlargepartonmarketexpectationsthatourbusinesswillcontinuetogrowandthatwewillachievecertainlevelsofnetincome.Ifthesecuritiesanalyststhatregularlyfollowourstocklowertheirratingorlowertheirprojectionsforfuturegrowthandfinancialperformance,themarketpriceofourstockislikelytodrop.Inaddition,ifourquarterlyfinancialperformancedoesnotmeettheexpectationsofsecuritiesanalysts,ourstockpricewouldlikelydecline.Thedecreaseinthestockpricemaybedisproportionatetotheshortfallinourfinancialperformance.ITEM1B.UNRESOLVEDSTAFFCOMMENTSNone.15ITEM2.PROPERTIESWeleasevirtuallyallofourover2,600storelocations,generallyfor10yearswithoptionstoextendtheleasetermforoneormore5-yearperiods.Wehavetherighttoterminatesomeoftheseleasesbeforetheexpirationdateunderspecifiedcircumstancesandsomewithspecifiedpayments.ThefollowingisasummaryofourprimarydistributioncentersandprimaryadministrativeofficelocationsbysegmentasofJanuary31,2009.Squarefootageinformationforthedistributioncentersrepresentstotal“groundcover”ofthefacility.Squarefootageinformationforofficespacerepresentstotalspaceoccupied:DISTRIBUTIONCENTERSMarmaxx:T.J.MaxxWorcester,Massachusetts500,000s.f.—ownedEvansville,Indiana983,000s.f.—ownedLasVegas,Nevada713,000s.f.sharedwithMarshalls—ownedCharlotte,NorthCarolina600,000s.f.—ownedPittstonTownship,Pennsylvania1,017,000s.f.—ownedMarshallsDecatur,Georgia780,000s.f.—ownedWoburn,Massachusetts473,000s.f.—leasedBridgewater,Virginia562,000s.f.—leasedPhiladelphia,Pennsylvania1,001,000s.f.—leasedHomeGoodsBrownsburg,Indiana805,000s.f.—ownedBloomfield,Connecticut803,000s.f.—ownedA.J.WrightFallRiver,Massachusetts501,000s.f.—ownedSouthBend,Indiana542,000s.f.—ownedCanadaBrampton,Ontario507,000s.f.—leasedMississauga,Ontario669,000s.f.—leasedEuropeMiltonKeynes,England108,000s.f.—leasedWakefield,England176,000s.f.—leasedStoke,England261,000s.f.—leasedWalsall,England275,000s.f.—leasedOFFICESPACECorporate,Marmaxx,HomeGoods,A.J.WrightFraminghamandWestboro,Massachusetts1,254,000s.f.—leasedinseveralbuildingsCanadaMississauga,Ontario140,000s.f.—leasedEuropeWatford,England61,000s.f.—leasedDusseldorf,Germany14,000s.f.—leased16ITEM3.LEGALPROCEEDINGSPutativeclassactionsconsolidatedintheUnitedStatesDistrictCourtfortheDistrictofMassachusetts,InreTJXCompaniesRetailSecurityBreachLitigation,07-cv-10162,werefiledagainstTJX(i)putativelyonbehalfofcustomersintheUnitedStates,PuertoRicoandCanadawhosetransactiondatawereallegedlycompromisedbytheComputerIntrusion(“CustomerTrack”)and(ii)putativelyonbehalfoffinancialinstitutionsthatreceivedalertsfromMasterCardorVisarelatedtotheComputerIntrusionidentifyingpaymentcardsissuedbysuchfinancialinstitutionsandthatthereaftersuffereddamagesfromactualreissuancecosts,monitoringexpensesorfraudloss(“FinancialInstitutionsTrack”).Theseputativeclassactionsassertedclaimsfornegligenceandrelatedcommon-lawand/orstatutorycausesofactionstemmingfromtheComputerIntrusion,andsoughtvariousformsofreliefincludingdamages,relatedinjunctiveorequitableremedies,multipleorpunitivedamages,andattorneys’fees.(cid:129)CustomerTrack.OnDecember30,2008,theDistrictCourtjudgmentintheCustomerTrackapprovingtheAmendedSettlementAgreement,datedasofNovember14,2007,amongTJX,itsacquiringbankandthenamedplaintiffs,individuallyandonbehalfofthesettlementclass,becamefinal.(cid:129)FinancialInstitutionsTrack.OnOctober12,2007,theDistrictCourtdismissedtheplaintiffs’claimsintheFinancialInstitutionsTrack,otherthantheirclaimsofnegligentmisrepresentationandviolationoftheMassachusettsconsumerprotectionstatute(Chapter93A)basedonnegligentmisrepresentation,anddeniedtheplaintiffs’motionforclasscertificationofthenon-dismissedclaims.Subsequently,theDistrictCourtdismissedtheFinancialInstitutionsTrackoftheactionforlackofsubjectmatterjurisdictionandorderedthecasetransferredtostatecourtinMassachusetts.OnMarch30,2009,theUnitedStatesCourtofAppealsfortheFirstCircuitaffirmedthedismissaloftheplaintiffs’claimsfornegligenceandbreachofcontract,affirmedthedenialoftheplaintiffs’motionforleavetoamendtheircomplainttoaddacountforconversion,andvacatedtheordertransferringthecasetostatecourtinMassachusetts.TheFirstCircuitfurtherupheldthedecisionnottodismissplaintiffs’claimsfornegligentmisrepresentationandforviolationofChapter93Abasedonnegligentmisrepresentation(butinsodoingnotedthattheplaintiffshadnotappealedfromthelowercourt’sdenialofclasscertificationofsuchclaims)andreversedthedismissaloftheplaintiffs’claimforbreachofChapter93Abasedonanunfairnesstheory.Finally,theFirstCircuitremandedtotheDistrictCourtforfurtherproceedingsonthoseclaimsthattheFirstCircuitruledwerenotsubjecttodismissal,notingthatduringsuchfurtherproceedingsTJXwillhaveanopportunitytomoveforsummaryjudgmentonallsuchclaimsandtochallengeclasscertificationoftheplaintiffs’claimforbreachofChapter93Abasedonanunfairnesstheory.Thosefinancialinstitutionsthat(forthemselvesand,inthecaseofMasterCardissuers,onbehalfoftheiraffiliatedandtheirsponsoredissuers)acceptedthesettlementofferundertheSettlementAgreementamongTJX,VisaU.S.A.Inc.andVisaInc.andTJX’sacquiringbankdatedasofNovember29,2007ortheSettlementAgreementbetweenTJXandMasterCardInternationalIncorporateddatedasofApril2,2008,releasedandindemnifiedTJXanditsacquiringbankswithrespecttoanyclaimsofsuchissuersasVisaissuersorMasterCardissuers,respectively,withrespecttoanyclaimsbyreasonofanymatter,occurrence,oreventpertainingtotheComputerIntrusion,includingbutnotlimitedtoclaimsintheFinancialInstitutionTrackandstatecourtcasedescribedbelow.Inaddition,thenamedplaintiffsintheFinancialInstitutionsTrackotherthanAmeriFirstBankpreviouslysettledwithTJX.OnJanuary16,2008,AmeriFirstBankandanadditionalplaintifffiledanactioninMassachusettsstatecourt,AmeriFirstBanketal.v.TheTJXCompanies,Inc.etal,MassachusettsSuperiorCourt08-0229,raisingallegationsandclaimsnearlyidenticaltothoseassertedintheFinancialInstitutionsTrackofthepurportedfederalclassaction.Thecomplaintstatedplaintiffs’intentiontobringclassallegationsdependingonpre-trialrulingsbythestatecourt.ThestatecourtstayedthestateactionpendingadjudicationbythefederalcourtoftheappealsintheFinancialInstitutionsTrack.OnMarch30,2009,theFirstCircuitissuedtheopiniondescribedaboveonthoseappeals.17Amulti-stategroupof41stateAttorneysGeneralisinvestigatingwhetherTJXmayhaveviolatedtheirrespectivestateconsumerprotectionlawswithrespecttotheComputerIntrusion.TJXhasrespondedtoCivilInvestigativeDemandswithrespecttothisinvestigation.ITEM4.SUBMISSIONOFMATTERSTOAVOTEOFSECURITYHOLDERSTherewasnomattersubmittedtoavoteofTJX’ssecurityholdersduringthefourthquarteroffiscal2009.18PartIIITEM5.MARKETFORTHEREGISTRANT’SCOMMONEQUITY,RELATEDSECURITYHOLDERMATTERSANDISSUERPURCHASESOFEQUITYSECURITIESPriceRangeOfCommonStockOurcommonstockislistedontheNewYorkStockExchange(Symbol:TJX).Thequarterlyhighandlowsalepricesfortheequityforfiscal2009andfiscal2008areasfollows:QuarterHighLowHighLowFiscal2009Fiscal2008First$34.93$29.44$29.84$25.74Second$36.44$30.32$30.19$26.34Third$37.52$23.20$32.46$26.29Fourth$28.01$17.80$31.95$25.49TheapproximatenumberofcommonshareholdersatJanuary31,2009was54,000.Wedeclaredfourquarterlydividendsof$0.11pershareforfiscal2009and$0.09pershareforfiscal2008.WhileourdividendpolicyissubjecttoperiodicreviewbyourBoardofDirectors,wecurrentlyintendtocontinuetopaycomparabledividendsinthefuture.InformationOnShareRepurchasesThenumberofsharesofcommonstockrepurchasedbyTJXduringthefourthquarteroffiscal2009andtheaveragepricepaidpershareareasfollows:PeriodTotalNumberofSharesRepurchased(1)AveragePricePaidPerShare(2)TotalNumberofSharesPurchasedasPartofaPubliclyAnnouncedPlanorProgram(3)MaximumNumber(orApproximateDollarValue)ofSharesthatMayYetbePurchasedUnderthePlansorProgramsOctober26,2008throughNovember22,20082,736,300$23.752,736,300$744,893,130November23,2008throughDecember27,2008—$——$744,893,130December28,2008throughJanuary31,2009—$——$744,893,130Total:2,736,3002,736,300(1)Allshareswerepurchasedaspartofpubliclyannouncedplans.(2)Averagepricepaidpershareincludescommissionsandisroundedtothenearesttwodecimalplaces.(3)Ourfiscal2009repurchasescompletedthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsandannouncedinFebruary2007andincludedtherepurchaseof8.9millionsharesatacostof$255millionunderthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsandannouncedinFebruary2008.AsofJanuary31,2009,$745millionremainedavailableforpurchaseunderthecurrent$1billionprogram.19ThefollowingtableprovidescertaininformationasofJanuary31,2009withrespecttoourequitycompensationplans:EquityCompensationPlanInformationPlanCategoryNumberofSecuritiestobeIssuedUponExerciseofOutstandingOptions,WarrantsandRightsWeighted-AverageExercisePriceofOutstandingOptions,WarrantsandRightsNumberofSecuritiesRemainingAvailableforFutureIssuanceUnderEquityCompensationPlans(ExcludingSecuritiesReflectedinColumn(a))(a)(b)(c)Equitycompensationplansapprovedbysecurityholders31,772,628$24.8312,409,505Equitycompensationplansnotapprovedbysecurityholders(1)N/AN/AN/ATotal31,772,628$24.8312,409,505(1)Allequitycompensationplanshavebeenapprovedbyshareholders.Foradditionalinformationconcerningourequitycompensationplans,seeNoteHtoourconsolidatedfinancialstatements.20ITEM6.SELECTEDFINANCIALDATASelectedFinancialDataAmountsinthousandsexceptpershareamounts20092008200720062005FiscalYearEndedJanuary(1)(53Weeks)Incomestatementandpersharedata:Netsales$18,999,505$18,336,726$17,104,013$15,667,463$14,570,189Incomefromcontinuingoperations$914,886$782,432$787,172$706,653$620,838Weightedaveragecommonsharesfordilutedearningspersharecalculation442,255468,046480,045491,500509,661Dilutedearningspersharefromcontinuingoperations$2.08$1.68$1.65$1.45$1.23Cashdividendsdeclaredpershare$0.44$0.36$0.28$0.24$0.18Balancesheetdata:Cashandcashequivalents$453,527$732,612$856,669$465,649$307,187Workingcapital$858,238$1,231,301$1,365,833$888,276$701,008Totalassets$6,178,242$6,599,934$6,085,700$5,496,305$5,075,473Capitalexpenditures$582,932$526,987$378,011$495,948$429,133Long-termobligations(2)$383,782$853,460$808,027$807,150$598,540Shareholders’equity$2,134,557$2,131,245$2,290,121$1,892,654$1,746,556Otherfinancialdata:After-taxreturn(continuingoperations)onaverageshareholders’equity42.9%35.4%37.6%38.8%36.8%Totaldebtasapercentageoftotalcapitalization(3)26.7%28.6%26.1%29.9%28.6%Storesinoperationatyear-end:IntheUnitedStates:T.J.Maxx874847821799771Marshalls806776748715697HomeGoods318289270251216A.J.Wright(4)135129129152130InCanada:Winners202191184174168HomeSense7571685840InEurope:T.K.Maxx235226210197170HomeSense7————Total2,6522,5292,4302,3462,192SellingSquareFootageatyear-end:IntheUnitedStates:T.J.Maxx20,54320,02519,39018,78118,033Marshalls20,38819,75919,07818,20617,511HomeGoods6,2485,5695,1814,8594,159A.J.Wright(4)2,6802,5762,5773,0542,606InCanada:Winners4,6474,3894,2144,0123,811HomeSense1,4371,3581,2801,100747InEurope:T.K.Maxx5,4045,0964,6364,2163,491HomeSense107————Total61,45458,77256,35654,22850,358(1)Fiscal2008andpriorfiscalyearshavebeenadjustedtoreclassifytheoperatingresultsofBob’sStorestodiscontinuedoperations.Fiscal2006andpriorfiscalyearshavebeenadjustedtoreclassifytheoperatingresultsoftheA.J.Wrightstoreclosingstodiscontinuedoperations.SeeNoteCtotheconsolidatedfinancialstatements.Fiscal2005hasbeenadjustedtoreflecttheeffectofadoptingStatementofFinancialAccountingStandardsNo.123(R)infiscal2006.(2)Includeslong-termdebt,exclusiveofcurrentinstallmentsandcapitalleaseobligation,lessportionduewithinoneyear.(3)Totalcapitalizationincludesshareholders’equity,short-termdebt,long-termdebtandcapitalleaseobligation,includingcurrentmaturities.(4)A.J.Wrightstoresinoperationandsellingsquarefootageforfiscal2006andpriorfiscalyearsincludestorecountsandsquarefootageforthestoresthatarepartofdiscontinuedoperations.21ITEM7.MANAGEMENT’SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONSThediscussionthatfollowsrelatestoour53-weekfiscalyearendedJanuary31,2009(fiscal2009),andthefiscalyearsendedJanuary26,2008(fiscal2008)andJanuary27,2007(fiscal2007),eachofwhichincluded52weeks.Ourresultsreflecttwodiscontinuedoperations:Bob’sStores,soldinfiscal2009and34A.J.Wrightstoresclosedinfiscal2007aspartofarepositioningofthechain.SeeNoteCtotheconsolidatedfinancialstatements.Allreferencesinthefollowingdiscussionaretocontinuingoperationsunlessotherwiseindicated.Ourresultsreflectthecostsoftheunauthorizedintrusionorintrusions(collectively,the“ComputerIntrusion”)intoportionsofourcomputersystem,whichwasdiscoveredinlatefiscal2007andinwhichwebelievecustomerdatawerestolen.See“ProvisionforComputerIntrusionrelatedcosts”below.RESULTSOFOPERATIONSOurfiscal2009performancewasadverselyaffectedinthesecondhalfoftheyearbytwomacroeconomicfactors:theworldwiderecessionwhichadverselyaffectedconsumerspendingandretailsalesatTJXandgenerallyandthesignificantstrengtheningoftheU.S.dollaragainsttheCanadiandollarandtheBritishpound,whichadverselyaffectedthetranslationoftheoperatingresultsofourCanadianandEuropeanbusinesses.Withtheflexibilityofouroff-pricebusinessmodel,infiscal2009weincreasedourinventoryturnsandmaintainedthevaluepropositionofourmerchandisebybuyingclosertoneedandoperatingwithleaner-than-usualinventories.Wealsocontinuedafocusontightexpensecontrolduringfiscal2009.Despitethechallengingenvironment,customertrafficinfiscal2009wasupacrossvirtuallyallofourdivisions,andmerchandisemarginsremainedstrong.Highlightsofourfinancialperformanceforfiscal2009includethefollowing:—Netsalesforfiscal2009were$19.0billion,a4%increaseoverfiscal2008.The53rdweekinfiscal2009increasednetsalesbyapproximately1%,whichwasmorethanoffsetbya2%declineinnetsalesduetotheimpactofforeigncurrencyexchangerates.Wecontinuedtogrowourbusiness,withbothstoresinoperationandsellingsquarefootageup5%attheendoffiscal2009comparedtolastfiscalyearend.—Samestoresalesona52-weekbasisforfiscal2009increased1%overtheprioryear.—Ourcostofsalesratioforfiscal2009increased0.3percentagepoints,asanincreaseinmerchandisemarginsandthebenefitofthe53rdweekweremorethanoffsetbybuyingandoccupancyexpensedeleverageona1%samestoresalesincrease.Selling,generalandadministrativeexpensesasapercentageofnetsalesforfiscal2009increasedby0.1percentagepointscomparedtotheprioryear,primarilyduetodeleverageonthe1%samestoresalesincrease.—Ourfiscal2009pre-taxmargin(theratioofpre-taxincometonetsales)was7.6%comparedto6.9%forfiscal2008.Thecomparisonofpre-taxmarginsforfiscal2009tofiscal2008wasaffectedbytheProvisionforComputerIntrusionrelatedcostsineachyear.Fiscal2009includeda$31millioncredit(pre-tax)totheprovision,whichincreasedpre-taxmarginby0.2percentagepoints,whilefiscal2008includedapre-taxchargeof$197million,whichreducedthefiscal2008pre-taxmarginby1.1percentagepoints.—Incomefromcontinuingoperationswas$914.9million,or$2.08perdilutedshare,forfiscal2009comparedto$782.4million,or$1.68perdilutedshare,lastyear.Thefiscal2009credittotheProvisionforComputerIntrusionrelatedcostsincreasedfiscal2009incomefromcontinuingoperationsby$18million,or$0.04perdilutedshare,whilethefiscal2008chargefortheProvisionforComputerIntrusionrelatedcostsreducedfiscal2008incomefromcontinuingoperationsby$119million,or$0.25perdilutedshare.—Duringfiscal2009,werepurchased24.0millionsharesofourcommonstockatacostof$741million.Ourdilutedearningspersharereflectthebenefitofourstockrepurchaseprogram.—Consolidatedaverageperstoreinventoriesofourcontinuingoperations,includinginventoryonhandatourdistributioncenters,weredown6%attheendoffiscal2009ascomparedtoanincreaseof2%attheprioryear22end.Onacomparablebasis,adjustingforcurrencyandacalendarshiftduetothe53rdweekinfiscal2009,averageperstoreinventories,includinginventoryonhandatourdistributioncenters,weredown4%infiscal2009ascomparedtofiscal2008andwereessentiallyflatinfiscal2008ascomparedtofiscal2007.WehaveimplementedstepstopositionourselvesforthefiscalyearendingJanuary30,2010(fiscal2010)inlightoftheongoingworldwiderecessionincluding:—Wehaveplannedourconsolidatedsamestoresalesconservatively,settingourinventoryandexpenseplansaroundnegativelowsingledigitcomparablestoresales.—Weplantocontinuetooperatewithhistoricallyleaninventoriesandtobuyclosertoneedthaninthepast,designedtoincreaseinventoryturnsanddrivetraffictoourstores.—Wearetakingmeasuresdesignedtoreduceexpensesinfiscal2010byupto$150millionincludingfurthersavingsinnon-merchandiseprocurement,implementingprocessestomoreefficientlymanagepayrollinourstoreanddistributioncenters,reducingmarketingexpenditureswhileincreasingpenetration,eliminatingopenpositions,eliminatingmeritpayincreasesacrossthemajorityoftheorganization,restructuringcertainareastoimproveproductivityandefficiencyandofferingavoluntaryretirementprogramforcertainemployees.Thefollowingisadiscussionofourconsolidatedoperatingresults,followedbyadiscussionofoursegmentoperatingresults.Netsales:Consolidatednetsalesforfiscal2009totaled$19.0billion,a4%increaseovernetsalesof$18.3billioninfiscal2008.Theincreasereflecteda4%increasefromnewstores,a1%increasefromthe53rdweekanda1%increaseinsamestoresales,offsetbya2%declinefromthenegativeimpactofforeigncurrencyexchangerates.Consolidatednetsalesforfiscal2008increased7%overnetsalesof$17.1billionforfiscal2007.Theincreasereflectedincreasesof3%fromnewstores,2%fromsamestoresalesanda2%favorableimpactduetoforeigncurrencyexchangerates.Newstoreshavebeenasignificantsourceofsalesgrowth.Bothourconsolidatedstorecountandoursellingsquarefootageincreasedby5%infiscal2009andby4%infiscal2008overtherespectiveprioryearperiods.Asaresultofeconomicconditions,wehaveplannedstoreopeningsmoreconservativelyandexpecttoadd64stores(netofstoreclosings)infiscal2010,a2%increaseinourconsolidatedstorebaseandanincreaseof2%inoursellingsquarefootage.The1%samestoresalesincreaseinfiscal2009reflectedastrongfirsthalfperformance,especiallyatourinternationalsegments,partiallyoffsetbysamestoresalesdecreasesinthesecondhalfoftheyearlargelyduetotheeconomicrecession.Customertrafficincreasedatvirtuallyallofourbusinessesinfiscal2009,eveninthethirdandfourthquarters,whichwaspartiallyoffsetbyareductioninthevalueoftheaveragetransaction.Asformerchandisecategories,shoes,accessoriesanddresseswerethestrongestperformers,whilehomefashionswereadverselyaffectedbytheweakhousingmarketandeconomicconditions.Geographically,samestoresalesinCanadaandtheUnitedKingdomwereabovetheconsolidatedaverageforfiscal2009,whileintheU.S.,samestoresalesintheWestCoastandFloridatrailedtheconsolidatedaverage.The2%increaseinsamestoresalesforfiscal2008wasdrivenbyastrongperformanceatourinternationalsegments.IntheU.S.,salesofdresses,footwearandaccessorieswerestrong,partiallyoffsetbysoftersalesinthebalanceofthewomen’sapparelcategory.AtMarmaxx,ourlargestbusiness,homecategorieswerealsoweak.SamestoresalesincreasesbenefitedfromthecontinuedexpansionoffootweardepartmentsinMarshalls.Duringfiscal2008,weopenedexpandedfootweardepartmentsinapproximately240additionalMarshallsstores.Samestoresalesforfiscal2008atourinternationalsegmentswereabovetheconsolidatedaverage.WithintheU.S.,thestrongestregionsweretheWestCoastandtheNortheast,whileFloridaandtheSoutheasttrailedtheU.S.average.Overalltransactionvolumewasslightlydowninfiscal2008,morethanoffsetbyanincreaseinthevalueoftheaveragetransaction.Wedefinesamestoresalestobesalesofthosestoresthathavebeeninoperationforalloraportionoftwoconsecutivefiscalyears,orinotherwords,storesthatarestartingtheirthirdfiscalyearofoperation.Weclassifyastoreasanewstoreuntilitmeetsthesamestoresalescriteria.Wedeterminewhichstoresareincludedinthesamestoresalescalculationatthebeginningofafiscalyearandtheclassificationremainsconstantthroughoutthatyear,unlessastoreis23closed.Wecalculatesamestoresalesresultsbycomparingthecurrentandprioryearweeklyperiodsthataremostcloselyaligned.Relocatedstoresandstoresthatareincreasedinsizearegenerallyclassifiedinthesamewayastheoriginalstore,andwebelievethattheimpactofthesestoresontheconsolidatedsamestorepercentageisimmaterial.Samestoresalesofourforeigndivisionsarecalculatedonaconstantcurrencybasis,whichremovestheeffectofchangesincurrencyexchangerates,andwebelieveitisamoreaccuratemeasureofthedivisionaloperatingperformance.Thefollowingtablesetsforthourconsolidatedoperatingresultsasapercentageofnetsales:200920082007FiscalYearEndedJanuaryNetsales100.0%100.0%100.0%Costofsales,includingbuyingandoccupancycosts75.875.575.8Selling,generalandadministrativeexpenses16.716.616.7ProvisionforComputerIntrusionrelatedcosts(0.2)1.1—Interest(income)expense,net0.1—0.1Incomefromcontinuingoperationsbeforeprovisionforincometaxes*7.6%6.9%7.4%*Duetorounding,theindividualitemsmaynotfoottoIncomefromcontinuingoperationsbeforeprovisionforincometaxes.Impactofforeigncurrencyexchangerates:OuroperatingresultscanbeadverselyaffectedbyforeigncurrencyexchangeratesasaresultofsignificantchangesinthevalueoftheU.S.dollarinrelationtoothercurrencies.Twoofthemoresignificantwaysinwhichforeigncurrencyimpactsusareasfollows:TranslationofforeignoperatingresultsintoU.S.dollars:Inourfinancialstatements,wetranslatetheoperationsofourstoresinCanadaandEuropefromlocalcurrenciesintoU.S.dollarsusingcurrencyratesineffectatdifferentpointsintime.Significantchangesinforeignexchangeratesfromcomparablepriorperiodscanresultinmeaningfulvariationsinconsolidatednetsales,incomefromcontinuingoperationsandearningspersharegrowthaswellasthenetsalesandoperatingresultsofourCanadianandEuropeansegments.Currencytranslationgenerallydoesnotaffectoperatingmargins,assalesandexpensesoftheforeignoperationsaretranslatedatessentiallythesamerateseachperiod.Inventoryhedges:Additionally,weroutinelyenterintoinventory-relatedhedginginstrumentstomitigatetheimpactofforeigncurrencyexchangeratesonmerchandisemarginswhenourinternationaldivisionspurchasegoodsincurrenciesthatarenottheirlocalcurrencies,primarilyU.S.dollarpurchases.Aswehavenotelected“hedgeaccounting”asdefinedbySFASNo.133(“AccountingforDerivativeInstrumentsandHedgingActivities”),undergenerallyacceptedaccountingprincipleswerecordamark-to-marketadjustmentonthehedginginstrumentsinourresultsofoperationsattheendofeachreportingperiod,priortothecurrencygainorlossbeingrecordedontheitemsbeinghedged.Insubsequentperiods,theincomestatementimpactofthehedgesareeffectivelyoffsetwhentherelatedinventoryissold.Whiletheseeffectsoccureveryreportingperiod,theyareofmuchgreatermagnitudewhentherearesuddenandsignificantchangesincurrencyexchangerates,astherewereinthethirdandfourthquartersoffiscal2009.Historically,theimpactonafull-yearbasishasnotbeenmaterial.Sincethemark-to-marketadjustmentonthesehedgeshasnoimpactonnetsales,itaffectsbothouroperatingmarginsandearningsgrowth.Costofsales,includingbuyingandoccupancycosts:Costofsales,includingbuyingandoccupancycosts,asapercentageofnetsaleswas75.8%infiscal2009,75.5%infiscal2008and75.8%infiscal2007.Thisratioforfiscal2009,ascomparedtofiscal2008,increased0.3percentagepointsprimarilyduetodeleverageofbuyingandoccupancycostsonthe1%samestoresalesincrease.Thisdeleveragemorethanoffsetabenefittothisexpenseratioduetothe53rdweek(estimatedatapproximately0.2percentagepoints)aswellasanimprovementinourconsolidatedmerchandisemarginof0.2percentagepoints.Throughoutfiscal2009,wesolidlyexecutedouroff-pricefundamentals,buyingclosetoneed,operatingwithleanerinventoriesandtakingadvantageofopportunitiesinthemarketplace.Costofsales,includingbuyingandoccupancycosts,asapercentageofnetsalesforfiscal2008,ascomparedtofiscal2007,reflectedanimprovementinourconsolidatedmerchandisemargin(0.4percentagepoints),duetoimprovedmarkonandlowermarkdowns.Throughoutfiscal2008,wesolidlyexecutedouroff-pricefundamentals,buyingclose24toneedandtakingadvantageofopportunitiesinthemarketplace.Thismerchandisemarginimprovementwaspartiallyoffsetbyaslightincreaseinoccupancycostsasapercentageofnetsales.Allotherbuyingandoccupancycostsremainedrelativelyflatascomparedtothesameperiodintheprioryear.Selling,generalandadministrativeexpenses:Selling,generalandadministrativeexpensesasapercentageofnetsaleswere16.7%infiscal2009,16.6%infiscal2008and16.7%infiscal2007.Theincreaseinfiscal2009comparedtofiscal2008reflectsdeleveragefromthelowsamestoresalesincrease,primarilyinstorepayrollandfieldcosts,partiallyoffsetbysavingsfromcostcontainmentinitiatives.Advertisingcostsasapercentageofnetsalesinfiscal2009wereessentiallyflattotheprioryear.Thefiscal2008expenseratiowasslightlydowncomparedtotheprioryearwithaplannedincreaseinadvertisingcosts(0.1percentagepoint)beingoffsetbycostcontainmentinitiatives.ProvisionforComputerIntrusionrelatedcosts:FromthetimeofthediscoveryoftheComputerIntrusionlateinfiscal2007,throughtheendoffiscal2009,wecumulativelyexpensed$171.5million(pre-tax)withrespecttotheComputerIntrusion,includinganetchargeof$159.2millioninfiscal2008toreserveforprobablelosses,costsof$42.8millionincurredpriortoestablishmentofthereserve($5millionofwhichwasrecordedinfiscal2007)anda$30.5millionreductioninthereserveinfiscal2009asaresultofnegotiations,settlements,insuranceproceedsandadjustmentsinourestimatedlosses.CostsrelatingtotheComputerIntrusionincurredandpaidafterestablishmentofthereservewerechargedagainstthereserve,whichisincludedinaccruedexpensesandotherliabilitiesonourbalancesheet.AsofJanuary31,2009,ourreservebalancewas$42.2million,whichreflectsourcurrentestimationofremainingprobablelosses(inaccordancewithU.S.generallyacceptedaccountingprinciples)withrespecttotheComputerIntrusion,includinglitigation,proceedings,investigationsandotherclaims,aswellaslegal,monitoring,reportingandothercosts.Asanestimate,ourreserveissubjecttouncertainty,ouractualcostsmayvaryfromourcurrentestimateandsuchvariationsmaybematerial.Wemaydecreaseorincreasetheamountofourreservetoadjustfordevelopmentsinthecourseandresolutionoflitigation,claimsandinvestigationsandrelatedexpensesandreceiptofinsuranceproceedsandforotherchanges.Interest(income)expense,net:Interest(income)expense,netamountedtoexpenseof$14.3millionforfiscal2009,incomeof$1.6millionforfiscal2008andexpenseof$15.6millionforfiscal2007.Thechangesfromyeartoyearrelateprimarilytointerestincomewhichtotaled$22.2millioninfiscal2009,$40.7millioninfiscal2008and$23.6millioninfiscal2007.Infiscal2008,wegeneratedmoreinterestincomeduetohighercashbalancesavailableforinvestmentaswellashigherinterestratesearnedonourinvestments.Incometaxes:Oureffectiveannualincometaxratewas36.9%infiscal2009,37.9%infiscal2008and37.7%infiscal2007.Thedecreaseinthetaxrateforfiscal2009ascomparedtofiscal2008reflectsthefavorableimpactofa$19millionreductionintheFIN48taxliability,whichreducedtheannualeffectiveincometaxrateforfiscal2009by1.3percentagepoints.Thisimprovementintheannualincometaxrateinfiscal2009wasoffsetbytheabsenceofafiscal2008favorabletaxbenefitof0.4percentagepointsrelatingtothetaxtreatmentofourPuertoRicosubsidiary.SeeNoteJtotheconsolidatedfinancialstatements.Theincreaseinthetaxrateforfiscal2008ascomparedtofiscal2007reflectstheabsenceofsomefiscal2007one-timebenefitsaswellasanincreaseduetocertainFIN48taxpositions,partiallyoffsetbythefavorableimpactofincreasedincomeatourforeignoperationsandincreasedforeigntaxcreditsrelatingtothetaxtreatmentofourPuertoRicosubsidiary.Incomefromcontinuingoperations:Incomefromcontinuingoperationswas$914.9millioninfiscal2009,$782.4millioninfiscal2008and$787.2millioninfiscal2007.Incomefromcontinuingoperationspersharewas$2.08infiscal2009,$1.68infiscal2008and$1.65infiscal2007.Unlikemanycompaniesintheretailindustry,wedidnothavea53rdweekinfiscal2007,butdidhavea53rdweekinfiscal2009.Weestimatethe53rdweekinfiscal2009favorablyaffectedearningspershareby$0.09pershare.25ThereductionintheProvisionforComputerIntrusionrelatedcostsinfiscal2009benefitedincomefromcontinuingoperationsbyapproximately$18million,after-tax,or$0.04pershare.ThechargerelatingtotheComputerIntrusionrelatedcostsinfiscal2008,adverselyaffectedincomefromcontinuingoperationsbyapprox-imately$119million,aftertax,or$0.25pershare.Changesinforeigncurrencyexchangeratesalsoaffectedthecomparabilityofourresults.Changesincurrencyratesreducedearningspershareby$0.05pershareinfiscal2009ascomparedtoanincreaseof$0.01pershareinfiscal2008.Changesinforeigncurrencyexchangeratesincreasedfiscal2008earningspershareby$0.05pershareincomparisontofiscal2007.Inaddition,oursharerepurchaseprogramaffectsthecomparabilityofearningspershare.Werepurchased24.0millionsharesofourstockatacostof$741millioninfiscal2009;werepurchased33.3millionsharesatacostof$950millioninfiscal2008;andwerepurchased22.0millionsharesatacostof$557millioninfiscal2007.Discontinuedoperationsandnetincome:AllhistoricalincomestatementshavebeenadjustedtoreflectthesaleofBob’sStoresinfiscal2009andtheclosureof34A.J.Wrightstoresinfiscal2007asdiscontinuedoperations.Includingtheimpactofdiscontinuedoperations,netincomewas$880.6million,or$2.00pershare,forfiscal2009,$771.8million,or$1.66pershare,forfiscal2008and$738.0million,or$1.55pershare,forfiscal2007.Segmentinformation:Thefollowingisadiscussionoftheoperatingresultsofourbusinesssegments.IntheUnitedStates,ourT.J.MaxxandMarshallsstoresareaggregatedastheMarmaxxsegment,andHomeGoodsandA.J.Wrighteachisreportedasaseparatesegment.TJX’sstoresoperatedinCanada(WinnersandHomeSense)arereportedastheCanadiansegment,andTJX’sstoresoperatedinEurope(T.K.MaxxandHomeSense)arereportedastheEuropeansegment.Weevaluatetheperformanceofoursegmentsbasedon“segmentprofitorloss,”whichwedefineaspre-taxincomebeforegeneralcorporateexpense,ProvisionforComputerIntrusionrelatedcostsandinterest.“Segmentprofitorloss,”aswedefinetheterm,maynotbecomparabletosimilarlytitledmeasuresusedbyotherentities.Inaddition,thismeasureofperformanceshouldnotbeconsideredanalternativetonetincomeorcashflowsfromoperatingactivitiesasanindicatorofourperformanceorasameasureofliquidity.Presentedbelowisselectedfinancialinformationrelatedtoourbusinesssegments:Marmaxx:Dollarsinmillions200920082007FiscalYearEndedJanuaryNetsales$12,362.1$11,966.7$11,531.8Segmentprofit$1,155.8$1,158.2$1,079.3Segmentprofitasapercentageofnetsales9.3%9.7%9.4%Percentincreaseinsamestoresales0%1%2%StoresinoperationatendofperiodT.J.Maxx874847821Marshalls806776748TotalMarmaxx1,6801,6231,569Sellingsquarefootageatendofperiod(inthousands)T.J.Maxx20,54320,02519,390Marshalls20,38819,75919,078TotalMarmaxx40,93139,78438,468NetsalesatMarmaxxincreased3%infiscal2009ascomparedtofiscal2008.SamestoresalesforMarmaxxwereflatinfiscal2009comparedtoa1%samestoresalesincreaseinfiscal2008.SalesatMarmaxxforfiscal2009reflectedincreasedcustomertrafficoffsetbyadecreaseinthevalueoftheaveragetransaction.Categoriesthatpostedsamestoresalesincreasesincludedfootwearandaccessories,children’sclothinganddresses.Duringfiscal2009,weaddedexpandedfootweardepartmentstoapproximately220Marshallsstores,whichnearlycompletestheexpansionoffootweardepartmentsatMarshalls.HomecategoriesatMarmaxxreportedsame26storesalesdecreasesinfiscal2009.Geographicallyinfiscal2009,samestoresalesintheNortheast,MidwestandMid-Atlanticregionswereabovethechainaverage,whilesamestoresalesintheWestCoast,FloridaandtheSoutheastwerebelowthechainaverage.Segmentprofitasapercentageofnetsales(“segmentmargin”or“segmentprofitmargin”)decreasedto9.3%infiscal2009from9.7%infiscal2008.Segmentmarginwasnegativelyimpactedbyanincreaseinoccupancycostsasapercentageofnetsales(0.5percentagepoints)duetodeleverageontheflatsamestoresales.Thisdecreasewaspartiallyoffsetbyanincreaseinmerchandisemargin(0.1percentagepoint)duetoincreasedmarkon.AsofJanuary31,2009,averageperstoreinventories,includinginventoryonhandatdistributioncenters,weredown4%comparedtoa2%decreaseattheprioryearend.Thedecreasesinaverageinventorieswereprimarilyduetocontinuedfocusonmaintainingaliquidinventoryposition.Segmentmarginforfiscal2008increasedto9.7%comparedto9.4%infiscal2007.Segmentmarginwasfavorablyimpactedbymerchandisemargins,whichincreased0.4percentagepoints(asapercentageofnetsales)duetolowermarkdownsandahighermarkon,aswellassomeexpenseleverageduetoourcostcontainmentmeasures.Theseimprovementsinsegmentmarginwerepartlyoffsetbyanincreaseinoccupancycostsandaplannedincreaseinadvertisingexpense.Weexpecttoopenapproximately17newstores(netofclosings)infiscal2010,increasingtheMarmaxxstorebaseby1%andincreasingitssellingsquarefootageby1%.Canada:U.S.Dollarsinmillions200920082007FiscalYearEndedJanuaryNetsales$2,139.4$2,040.8$1,740.8Segmentprofit$236.1$235.1$181.9Segmentprofitasapercentageofnetsales11.0%11.5%10.4%Percentincreaseinsamestoresales3%5%5%StoresinoperationatendofperiodWinners202191184HomeSense757168Total277262252Sellingsquarefootageatendofperiod(inthousands)Winners4,6474,3894,214HomeSense1,4371,3581,280Total6,0845,7475,494NetsalesfortheCanadiansegmentforfiscal2009increasedby5%overfiscal2008.Currencyexchangetranslationreducedfiscal2009salesbyapproximately$68million.Samestoresalesincreased3%infiscal2009comparedtoastrongincreaseof5%infiscal2008.Samestoresalesofouterwear,footwear,jewelryandaccessorieswereabovethesegmentaverage,whileHomeSensesamestoresaleswerebelowthesegmentaverageforfiscal2009.Segmentprofitforfiscal2009increasedslightlyto$236millioncomparedto$235millioninfiscal2008,whilesegmentmargindecreased0.5percentagepointsto11.0%.Currencyexchangetranslationreducedsegmentprofitby$11millionforfiscal2009,ascomparedtofiscal2008.However,becausecurrencytranslationimpactsbothsalesandexpenses,ithaslittleornoimpactonsegmentmargin.Inaddition,themark-to-marketadjustmentofinventoryrelatedhedgesreducedsegmentprofitinfiscal2009by$1million,incontrasttoa$5millionbenefitofthemark-to-marketadjustmentofinventoryrelatedhedgesinfiscal2008whichadverselyimpactedsegmentmargincomparisonsby0.3percentagepoints.Segmentmarginforfiscal2009,reflectedincreasesindistributioncentercostsandstorepayrollcostsasapercentageofnetsales,partiallyoffsetbyanincreaseinmerchandisemargins.Inthethirdquarteroffiscal2009,Winnersopened2StyleSensestores,anewconceptthatoffersfamilyfootwearandaccessories.WeanticipatethatmerchandisemarginsintheCanadiansegmentwillalsodeclineinfiscal2010asaresultofforeign27currencyexchange,duetothehighvolumeofmerchandisepurchasesbytheCanadiansegmentdenominatedinU.S.dollars.Segmentprofitmarginforfiscal2008increased1.1percentagepointsto11.5%comparedto10.4%forfiscal2007.Thisimprovementinsegmentmarginwasprimarilyduetoimprovedexpenseratios(leveragefromthe5%samestoresalesincreaseaswellascostcontainmentinitiatives).Currencyexchangeratesincreasedsegmentprofitbyapprox-imately$24millionforfiscal2008,ascomparedtofiscal2007.Mostofthisincreasewasduetocurrencytranslation,andasaresult,ithadnoimpactonsegmentmargin.Theincreaseinsegmentprofitinfiscal2008alsoincludedthefavorableimpactofamark-to-marketadjustmentofinventoryhedgecontracts,whichincreasedsegmentmarginby0.3percentagepoints.Thefiscal2008segmentmarginalsoreflectedanincreaseinmerchandisemargin,primarilyduetoincreasedmarkonaswellasthefavorableimpactofcostcontainmentinitiativesandstrongsamestoresalesresultsonexpenseratios.Weexpecttoaddanetof13storesinCanadainfiscal2010,whichisanincreaseof5%andwillincreasesellingsquarefootageby5%.Europe:U.S.Dollarsinmillions200920082007FiscalYearEndedJanuaryNetsales$2,242.1$2,216.2$1,864.5Segmentprofit$137.6$127.2$109.3Segmentprofitasapercentageofnetsales6.1%5.7%5.9%Percentincreaseinsamestoresales4%6%9%StoresinoperationatendofperiodT.K.Maxx235226210HomeSense7——Total242226210Sellingsquarefootageatendofperiod(inthousands)T.K.Maxx5,4045,0964,636HomeSense107——Total5,5115,0964,636Europeannetsalesforfiscal2009increased1%to$2.2billioncomparedtofiscal2008.Currencyexchangeratetranslationnegativelyaffectedfiscal2009salesbyapproximately$282million.Samestoresalesincreased4%forfiscal2009comparedtoa6%increaselastyear.Samestoresalesforfootwearandaccessoriesandmostotherwomen’sapparelcategoriesperformedabovethechainaverage,whilehomefashionswerebelowthechainaverage.Segmentprofitforfiscal2009increased8%to$137.6million,andsegmentmarginincreased0.4percentagepointsto6.1%comparedtolastyear.Currencyexchangeratetranslationnegativelyaffectedsegmentprofitbyapproximately$26millioninfiscal2009.Theincreaseinsegmentmarginreflectsimprovedmerchandisemargins,partiallyoffsetbyanincreaseinoccupancycostsasapercentageofsalesandthecostofoperationsinGermany.WeareencouragedbytheperformanceofourGermanstoresbutastheyarenewstores,theyreducethesegmentmargingeneratedbythemoreestablishedstoresintheU.K.andIreland.Duringfiscal2009,T.K.Maxxadded4morestoresinGermany,followingtheopeningofitsfirst5storesinGermanyinfiscal2008.T.K.MaxxalsointroducedtheHomeSenseconceptintotheU.K.with7newstores.Segmentprofitforfiscal2008increased16%to$127.2million,whilesegmentmargindecreasedslightlyto5.7%comparedtofiscal2007.Currencyexchangeratetranslationfavorablyimpactedsegmentprofitbyapproximately$10millioninfiscal2008,butdidnotimpactthesegmentprofitmargin.Theopeningof5storesinGermanyreducedsegmentprofitforfiscal2008by$11millionandreducedthefiscal2008segmentmarginby0.6percentagepoints,offsettingtheslightlyimprovedmerchandisemarginintheremainderofthesegment,aswellasthefavorableimpactofsamestoresalesgrowthonexpenseratiosandthesegment’scostcontainmentinitiatives.28Infiscal2010,weplantoopenanetof17T.K.Maxxstores,including10inGermanyand3HomeSensestoresintheU.K.andtoexpandsellingsquarefootageby8%.HomeGoods:Dollarsinmillions200920082007FiscalYearEndedJanuaryNetsales$1,578.3$1,480.4$1,365.1Segmentprofit$42.4$76.2$60.9Segmentprofitasapercentageofnetsales2.7%5.1%4.5%Percent(decrease)increaseinsamestoresales(3)%3%4%Storesinoperationatendofperiod318289270Sellingsquarefootageatendofperiod(inthousands)6,2485,5695,181HomeGoods’netsalesforfiscal2009increased7%comparedtofiscal2008,andsamestoresalesdecreased3%infiscal2009.Salesofhomefashionshavebeenparticularlyimpactedbytheweakhousingmarketandrecession.Segmentmarginof2.7%wasdownfrom5.1%forfiscal2008.Merchandisemarginsdeclinedinfiscal2009,primarilyduetoincreasedmarkdowns.Inaddition,HomeGoodsexperienceddeleverageonoperatingcostsasaresultofthedeclineinsamestoresales.Weareseekingtoaddressthedifficulthomeenvironmentbyoperatingwithveryleaninventoriesandfocusingonmerchandisecategoriesthatwebelievewillresonatewithconsumersinthesedifficulttimes.HomeGoods’netsalesforfiscal2008increased8%comparedtofiscal2007,andsamestoresalesincreased3%infiscal2008.Segmentmarginof5.1%forfiscal2008improvedoverfiscal2007,primarilyduetoimprovedmerchandisemarginsandtheleveragingofexpenses,particularlyoccupancycosts.Thesesegmentmarginimprovementswereoffsetinpartbyanincreaseinadvertisingexpensesasapercentageofnetsales.Infiscal2010,weplantoaddanetof4HomeGoodsstoresandincreasesellingsquarefootageby1%.A.J.Wright:Dollarsinmillions200920082007FiscalYearEndedJanuaryNetsales$677.6$632.7$601.8Segmentprofit(loss)$2.9$(1.8)$(10.3)Segmentprofit(loss)asapercentageofnetsales0.4%(0.3)%(1.7)%Percentincreaseinsamestoresales4%2%3%Storesinoperationatendofperiod135129129Sellingsquarefootageatendofperiod(inthousands)2,6802,5762,577A.J.Wright’snetsalesincreased7%forfiscal2009comparedtofiscal2008,andsegmentprofitincreasedto$2.9millioncomparedtoalossof$1.8millioninfiscal2008.Samestoresalesincreased4%forfiscal2009andA.J.Wrightrecordeditsfirstsegmentprofitinfiscal2009comparedtolossesintheprioryears.WebelieveA.J.Wrighthasimproveditsresultsthroughbettermerchandisingandadvertisingeffectiveness,asaresultofourimprovedunderstandingofA.J.Wright’scustomertastesandspendinghabits.A.J.Wright’snetsalesincreased5%forfiscal2008comparedtofiscal2007.A.J.Wright’ssamestoresalesincreased2%forfiscal2008,andsegmentlossforfiscal2008was$1.8millioncomparedto$10.3millionforfiscal2007.Thisimprovementwasprimarilyduetostrongermerchandisemargin,areductioninoccupancycostsasapercentageofnetsalesandtheimpactofcostcontainmentinitiatives.AsaresultofA.J.Wright’simprovedresults,weplantoincreasetherateofstoreopeningsforthischainforfiscal2010,currentlyplanningtoaddanetof13A.J.Wrightstoresandincreasesellingsquarefootageby10%.29GeneralCorporateExpense:Dollarsinmillions200920082007FiscalYearEndedJanuaryGeneralcorporateexpense$140.0$139.4$136.4Generalcorporateexpenseforsegmentreportingpurposesisthosecostsnotspecificallyrelatedtotheoperationsofourbusinesssegmentsandisincludedinselling,generalandadministrativeexpenses.Generalcorporateexpenseinfiscal2009versusfiscal2008wasvirtuallyflat.Thecomparisonofgeneralcorporateexpenseinfiscal2008versusfiscal2007reflectedanincreaseincorporatesupportcostsinfiscal2008anda$5millionchargeinfiscal2007relatingtothecostofaworkforcereductionandotherterminationbenefitsatthecorporatelevel.LIQUIDITYANDCAPITALRESOURCESOperatingActivities:Netcashprovidedbyoperatingactivitieswas$1,155millioninfiscal2009,$1,375millioninfiscal2008,and$1,213millioninfiscal2007.Thecashgeneratedfromoperatingactivitiesineachofthesefiscalyearswaslargelyduetooperatingearnings.Operatingcashflowsforfiscal2009decreasedby$220millionascomparedtotheprioryear.Netincome,afteradjustingforthenon-cashimpactofdepreciationandthesaleofBob’sStoresassetsof$31millioninfiscal2009(includingthebenefitofthe53rdweek),providedcashof$1,314million,anincreaseof$173millionfromtheadjusted$1,141millioninfiscal2008.Thechangeindeferredincometaxesfavorablyimpactedcashflowsinfiscal2009by$132million,whilelastyear’sdeferredincometaxesreducedcashflowsby$102million.Deferredtaxesinfiscal2008reflectedthenon-cashtaxbenefitof$47millionrelatingtotheestablishmentoftheComputerIntrusionreserve.Thefavorableimpactondeferredincometaxesinfiscal2009reflectedthetaxtreatmentofpaymentsagainsttheComputerIntrusionreserveandfavorableimpactoftaxdepreciation.Thechangeinmerchandiseinventory,netoftherelatedchangeinaccountspayableoffsetthefavorablechangesincashflowsinfiscal2009,asitresultedinauseofcashof$210millioninfiscal2009,comparedtoasourceofcashof$5millionlastyear.Thechangeinmerchandiseinventoriesandaccountspayableinfiscal2009wasprimarilydrivenbyatimingdifferenceinthepaymentofouraccountspayableduetochangeinourbuyingpattern.Thechangeinaccruedexpensesandotherliabilitiesresultedinauseofcashof$35millioninfiscal2009versusasourceofcashof$203millioninfiscal2008.Lastyear,theincreaseinaccruedexpensesandotherliabilitiesreflected$117millionforthepre-taxreserveestablishedfortheComputerIntrusion,whichfavorablyimpactedcashflows,whilefiscal2009’scashflowswerereducedby$75millionforpaymentsagainstandadjustmentstothereserve.Changesincurrentincometaxespayable/recoverablereducedcashinfiscal2009by$49millioncomparedtoanincreaseof$56millioninfiscal2008andthechangeinprepaidexpensesreducedfiscal2009operatingcashflowsbyanadditional$65million,primarilyduetothetimingofFebruaryrentalpayments.Operatingcashflowsforfiscal2008increasedby$162millionovertheprioryear.Netincome,afteradjustingforthenon-cashimpactofdepreciation,forfiscal2008increased$50million.Thechangeininventory,netofaccountspayable,fromprioryear-endlevelswasasignificantcomponentofoperatingcashflows.Infiscal2008,thechangeinmerchandiseinventory,netoftherelatedchangeinaccountspayable,favorablyimpactedoperatingcashflowsby$5millioncomparedtoauseofcashof$151millioninfiscal2007.Additionally,fiscal2008operatingcashflowswerefavorablyimpactedbythechangeinincometaxespayable.Theseincreasesinfiscal2008operatingcashflowsascomparedtofiscal2007wereoffsetbytheunfavorablecashflowimpactofthedeferredincometaxprovision,changesinaccruedexpensesandotherliabilitiesandchangesinaccountsreceivable.Discontinuedoperationsreserve:Wehaveareserveforfutureobligationsofdiscontinuedoperationsthatrelatesprimarilytorealestateleasesassociatedwiththeclosureof34A.J.WrightstoresaswellasleasesofformerTJXbusinesses.Infiscal2009,wereservedanadditional$3millionfor2Bob’sStoreslocations,whichthebuyerofBob’s30Storeshastherighttoputbacktousandwhichweconsiderprobable.ThiswasoffsetbyacomparableamountduetofavorablesettlementsonseveralA.J.Wrightlocations.Thebalanceinthereserveandtheactivityforthelastthreefiscalyearsispresentedbelow:Inthousands200920082007FiscalYearEndedJanuaryBalanceatbeginningofyear$46,076$57,677$14,981Additionstothereservechargedtonetincome:A.J.Wrightstoreclosings(2,908)—61,968Otherleaserelatedobligations2,908—1,555Interestaccretion1,8201,820400Chargesagainstthereserve:Leaserelatedobligations(7,323)(11,214)(1,696)Fixedassetwrite-off(non-cash)——(18,732)Terminationbenefitsandallother(9)(2,207)(799)Balanceatendofyear$40,564$46,076$57,677Weadded$62millioninfiscal2007fortheexitcostsrelatedtotheclosingof34A.J.Wrightstores(seeNoteCtoourconsolidatedfinancialstatements).Theadditionstothereserveforotherleaserelatedobligationsinfiscal2007weretheresultofperiodicadjustmentstotheestimatedleaseobligationsofourformerbusinessesandwereoffsetbyincomefromcreditorrecoveriesofasimilaramount.Theleaserelatedchargesagainstthereserveduringfiscal2007relatedprimarilytoourformerbusinesses.Thefixedassetwrite-offsandotherchargesagainstthereserveforfiscal2007andallofthechargesagainstthereserveinfiscal2008andfiscal2009,relatedprimarilytothe34A.J.Wrightclosedstores.Approximately$25millionofthefiscal2009reservebalancerelatestotheA.J.Wrightstoreclosings,primarilyourestimationofleasecosts,netofestimatedsubtenantincome.Approximately$3millionofthereserveatfiscal2009relatesto2Bob’sStoreslocationswhichareconsideredprobableforbeingputbacktoTJXbythebuyer.Theremainderofthereservereflectsourestimationofthecostofclaims,updatedquarterly,thathavebeen,orwebelievearelikelytobe,madeagainstusforliabilityasanoriginallesseeorguarantoroftheleasesofformerbusinesses,aftermitigationofthenumberandcostoftheseleaseobligations.AtJanuary31,2009,substantiallyalltheleasesofformerbusinessesthatwererejectedinbankruptcyandforwhichthelandlordsassertedliabilityagainstushadbeenresolved.Theactualnetcostoftheseleaseobligationsmaydifferfromouroriginalestimate.Althoughouractualcostswithrespecttotheleaseobligationsofformerbusinessesmayexceedamountsestimatedinourreserve,andwemayincurcostsforleasesfromtheseformerbusinessesthatwerenotterminatedorhadnotexpired,wedonotexpecttoincuranymaterialcostsrelatedtothesediscontinuedoperationsinexcessoftheamountsestimated.Weestimatethatthemajorityofthediscontinuedoperationsreservewillbepaidinthenextthreetofiveyears.Theactualtimingofcashoutflowswillvarydependingonhowtheremainingleaseobligationsareactuallysettled.Wemayalsobecontingentlyliableonupto15leasesofBJ’sWholesaleClub,aformerTJXbusiness,and8additionalBob’sStoresleases.Ourreservefordiscontinuedoperationsdoesnotreflecttheseleasesbecausewedonotbelievethatthelikelihoodofanyfutureliabilitytousisprobable.Off-balancesheetliabilities:Wehavecontingentobligationsonleases,forwhichwewerealesseeorguarantor,whichwereassignedtothirdpartieswithoutTJXbeingreleasedbythelandlords.Overmanyyears,wehaveassignednumerousleasesthatweoriginallyleasedorguaranteedtoasignificantnumberofthirdparties.Withtheexceptionofleasesofourformerbusinessesdiscussedabove,wehaverarelyhadaclaimwithrespecttoassignedleases,andaccordingly,wedonotexpectthatsuchleaseswillhaveamaterialadverseeffectonourfinancialcondition,resultsofoperationsorcashflows.Wedonotgenerallyhavesufficientinformationabouttheseleasestoestimateourpotentialcontingentobligationsunderthem,whichcouldbetriggeredintheeventthatoneormoreofthecurrenttenantsdoesnotfulfilltheirobligationsrelatedtooneormoreoftheseleases.31Wealsohavecontingentobligationsinconnectionwithsomeassignedorsubletpropertiesthatweareabletoestimate.Weestimatetheundiscountedobligations,notreflectedinourreserves,ofleasesofclosedstoresofcontinuingoperations,BJ’sWholesaleClubandBob’sStoresleasesdiscussedabove,andpropertiesofourdiscontinuedoperationsthatwehavesublet,ifthesubtenantsdidnotfulfilltheirobligations,tobeapproximately$100millionasofJanuary31,2009.Webelievethatmostorallofthesecontingentobligationswillnotreverttousand,totheextenttheydo,willberesolvedforsubstantiallylessduetomitigatingfactors.Weareapartytovariousagreementsunderwhichwemaybeobligatedtoindemnifyotherpartieswithrespecttobreachofwarrantyorlossesrelatedtosuchmattersastitletoassetssold,specifiedenvironmentalmattersorcertainincometaxes.Theseobligationsaretypicallylimitedintimeandamount.Therearenoamountsreflectedinourbalancesheetswithrespecttothesecontingentobligations.InvestingActivities:Ourcashflowsforinvestingactivitiesincludecapitalexpendituresforthelastthreeyearsassetforthinthetablebelow:Inmillions200920082007FiscalYearEndedJanuaryNewstores$147.6$120.7$123.0Storerenovationsandimprovements264.3269.8190.2Officeanddistributioncenters171.0136.564.8Capitalexpenditures$582.9$527.0$378.0Weexpectthatcapitalexpenditureswillapproximate$450millionforfiscal2010,whichweexpecttofundthroughinternallygeneratedfunds.Thisincludes$153millionfornewstores,$182millionforstorerenovations,expansionsandimprovementsand$115millionforourofficeanddistributioncenters.Theplanneddecreaseincapitalexpendituresisattributabletofewerplannedstoreopeningsandreducedspendingonrenovationsandimprovementstoexistingstores.Investingactivitiesalsoincludecashflowsassociatedwithournetinvestmenthedges.Duringfiscal2009,wesuspendedourpolicyofhedgingthenetinvestmentinourforeignsubsidiariesandsettledsuchhedgesduringthefourthquarter.Thenetcashreceivedonnetinvestmenthedgesduringfiscal2009amountedto$14.4millionversusnetcashpaymentsof$13.7millioninfiscal2008and$17.7millioninfiscal2007.FinancingActivities:Cashflowsfromfinancingactivitiesresultedinnetcashoutflowsof$769millioninfiscal2009,$953millioninfiscal2008and$418millioninfiscal2007.Themajorityofthisoutflowrelatestooursharerepurchaseprogram.Wespent$741millioninfiscal2009,$950millioninfiscal2008and$557millioninfiscal2007underourstockrepurchaseprograms.Werepurchased24.0millionsharesinfiscal2009,33.3millionsharesinfiscal2008and22.0millionsharesinfiscal2007.Allsharesrepurchasedwereretired.Werecordtherepurchaseofourstockonacashbasis,andtheamountsreflectedinthefinancialstatementsmayvaryfromtheaboveduetothetimingofthesettlementofourrepurchases.Ourfiscal2009repurchasescompletedthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsinJanuary2007andincludedtherepurchaseof8.9millionsharesatacostof$255millionunderthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsinFebruary2008.AsofJanuary31,2009,$745millionremainedavailableforpurchaseunderthecurrentprogram.ThetimingofpurchasesunderthisprogramisdeterminedbyTJXfromtimetotimebasedonitsassessmentofvariousfactorsincludingexcesscashflow,liquidityandmarketconditions.Wearetakingamoreconservativeapproachtoourstockrepurchaseprogramandcurrentlyplantorepurchaseuptoapproximately$250millionofourstockinfiscal2010.Thistimingandamountofthesepurchasesaresubjecttochangedependingupontheeconomicenvironmentandotherfactors.The$464.9millionaggregateprincipalamountoutstandingofourzerocouponconvertiblesubordinatednotes(whicharedueinFebruary2021)areconvertibleinto15.2millionsharesofcommonstockundercertainconditions,32includingiftheclosingsalepriceofourcommonstockreachesspecifiedtriggerprices.Thetriggerpricewasmetduringaportionoffiscal2009and52,552noteswereconvertedduringfiscal2009,resultingintheissuanceof1.7millionsharesofcommonstock.Thenoteswerenotconvertibleduringthefourthquarteroffiscal2009becauseourstockpricedidnotmeetthetriggerpricesduringrelevantperiods.Thetriggerpriceswillhavetobemetduringapplicablefutureperiodsforthenotestobeconvertibleinfuturequarters.Wedeclaredquarterlydividendsonourcommonstockwhichtotaled$0.44pershareinfiscal2009,$0.36pershareinfiscal2008and$0.28pershareinfiscal2007.Cashpaymentsfordividendsonourcommonstocktotaled$177millioninfiscal2009,$151millioninfiscal2008and$123millioninfiscal2007.Financingactivitiesalsoincludedproceedsof$142millioninfiscal2009,$134millioninfiscal2008and$260millioninfiscal2007fromtheexerciseofemployeestockoptions.Wetraditionallyhavefundedourseasonalmerchandiserequirementsthroughcashgeneratedfromoperations,short-termbankborrowingsandtheissuanceofshort-termcommercialpaper.Wehavea$500millionrevolvingcreditfacilitymaturinginMay2010anda$500millionrevolvingcreditfacilitymaturinginMay2011.Theseagreementshavenocompensatingbalancerequirementsandhavevariouscovenantsincludingarequirementofaspecifiedratioofdebttoearnings.Theseagreementsserveasbackuptoourcommercialpaperprogram.AsofJanuary31,2009therewerenooutstandingamountsunderourcreditfacilities.ThemaximumamountofourU.S.short-termborrowingsoutstandingwas$222millionduringfiscal2009.TheweightedaverageinterestrateonourU.S.short-termborrowingswas3.92%infiscal2009.Therewerenoborrowingsonourcreditfacilitiesduringfiscal2008.AsofJanuary31,2009andJanuary26,2008,Winnershadtwocreditlines,oneforC$10millionforoperatingexpensesandoneC$10millionletterofcreditfacility.Winnersdidnotborrowunderthecreditlineforoperatingexpensesinfiscal2009.ThemaximumamountoutstandingunderourCanadiancreditlineforoperatingexpenseswasC$5.7millioninfiscal2008andC$3.8millioninfiscal2007.Therewerenoamountsoutstandingonthislineattheendoffiscal2009orfiscal2008.AsofJanuary31,2009,T.K.Maxxhadacreditlineof£20million.Themaximumamountoutstandingwas£6.1millioninfiscal2009and£16.4millioninfiscal2008.Therewerenooutstandingborrowingsonthiscreditlineattheendoffiscal2009orfiscal2008.Webelievethatinternallygeneratedfundsandourcurrentcreditfacilitiesaremorethanadequatetomeetouroperating,debtandcapitalneedsforatleastthenexttwelvemonths.SeeNoteDtotheconsolidatedfinancialstatementsforfurtherinformationregardingourlong-termdebtandotherfinancingsources.Contractualobligations:AsofJanuary31,2009,wehadpaymentobligations(includingcurrentinstallments)underlong-termdebtarrangements,leasesforpropertyandequipmentandpurchaseobligationsthatwillrequirecashoutflowsasfollows(inthousands):TabularDisclosureofContractualObligationsTotalLessThan1Year1-3Years3-5YearsMoreThan5YearsPaymentsDuebyPeriodLong-termdebtobligationsincludingestimatedinterestandcurrentinstallments$806,654$410,125$—$396,529$—Operatingleasecommitments5,071,283913,4461,582,3971,137,9411,437,499Capitalleaseobligation26,6713,7267,6237,8247,498Purchaseobligations1,922,5371,803,500112,2044,6352,198TotalObligations$7,827,145$3,130,797$1,702,224$1,546,929$1,447,195Thelong-termdebtobligationsaboveincludeestimatedinterestcostsandassumethatallholdersofthezerocouponconvertiblesubordinatednotesexercisetheirputoptionsinfiscal2014.Ifnoneoftheputoptionsareexercisedandthenotesarenotredeemedorconverted,thenoteswillmatureinfiscal2022.TheeffectoftheinterestrateswapagreementswasestimatedbasedontheirvaluesasofJanuary31,2009.33Theleasecommitmentsintheabovetableareforminimumrentanddonotincludecostsforinsurance,realestatetaxes,otheroperatingexpensesand,insomecases,rentalsbasedonapercentageofsales,whichtogetherwereapproximatelyone-thirdofthetotalminimumrentforthefiscalyearendedJanuary31,2009.Ourpurchaseobligationsprimarilyconsistofpurchaseordersformerchandise;purchaseordersforcapitalexpenditures,suppliesandotheroperatingneeds;commitmentsundercontractsformaintenanceneedsandotherservices;andcommitmentsunderexecutiveemploymentandotheragreements.Weexcludedlong-termagreementsforservicesandoperatingneedsthatcanbecancelledwithoutpenalty.Wealsohavelong-termliabilitieswhichinclude$272.9millionforemployeecompensationandbenefits,themajorityofwhichwillcomeduebeyondfiveyears,$137.9millionforaccruedrent,thecashflowrequirementsofwhichareincludedintheleasecommitmentsintheabovetableand$240.6millionforuncertaintaxpositionsforwhichitisnotreasonablypossibletopredictwhenitmaybepaid.CRITICALACCOUNTINGPOLICIESWemustevaluateandselectapplicableaccountingpolicies.Weconsiderourmostcriticalaccountingpolicies,involvingmanagementestimatesandjudgments,tobethoserelatingtotheareasdescribedbelow.Webelievethatwehaveselectedthemostappropriateassumptionsineachofthefollowingareasandthattheresultswewouldhaveobtained,hadalternativeassumptionsbeenselected,wouldnotbemateriallydifferentfromtheresultswehavereported.Inventoryvaluation:Weusetheretailmethodforvaluinginventoryonafirst-infirst-outbasis.Undertheretailmethod,thecostvalueofinventoryandgrossmarginsaredeterminedbycalculatingacost-to-retailratioandapplyingittotheretailvalueofinventory.Thismethodiswidelyusedintheretailindustryandinvolvesmanagementestimateswithregardtosuchthingsasmarkdownsandinventoryshrinkage.Asignificantfactorinvolvestherecordingandtimingofpermanentmarkdowns.Undertheretailmethod,permanentmarkdownsarereflectedintheinventoryvaluationwhenthepriceofanitemischanged.Webelievetheretailmethodresultsinamoreconservativeinventoryvaluationthanotheraccountingmethods.Inaddition,asanormalbusinesspractice,wehaveaspecificpolicyastowhenmarkdownsaretobetaken,greatlyreducingtheneedformanagementestimates.Inventoryshortageinvolvesestimatingashrinkagerateforinterimperiods,butisbasedonafullphysicalinventorynearthefiscalyearend.Thus,thedifferencebetweenactualandestimatedamountsmaycausefluctuationsinquarterlyresults,butisnotasignificantfactorinfullyearresults.Overall,webelievethattheretailmethod,coupledwithourdisciplinedpermanentmarkdownpolicyandafullphysicalinventorytakenateachfiscalyearend,resultsinaninventoryvaluationthatisfairlystated.Lastly,manyretailershavearrangementswithvendorsthatprovideforrebatesandallowancesundercertainconditions,whichultimatelyaffectthevalueoftheinventory.Ouroff-pricebusinesseshavehistoricallynotenteredintosucharrangementswithourvendors.Impairmentoflong-livedassets:Wereviewtherecoverabilityofthecarryingvalueofourlong-livedassetsatleastannuallyandwhenevereventsorcircumstancesoccurthatwouldindicatethattheircarryingamountsarenotrecoverable.Significantjudgmentsareinvolvedinprojectingthecashflowsofindividualstoresandourbusinessunitsandinvolveanumberoffactorsincludinghistoricaltrends,recentperformanceandgeneraleconomicassumptions.Ifitisdeterminedthatanimpairmentoflong-livedassetshasoccurred,werecordanimpairmentchargeequaltotheexcessofthecarryingvalueoftheassetsovertheestimatedfairvalueoftheassets.Retirementobligations:Retirementcostsareaccruedovertheservicelifeofanemployeeandrepresent,intheaggregate,obligationsthatwillultimatelybesettledfarinthefutureandarethereforesubjecttoestimates.Wearerequiredtomakeassumptionsregardingvariables,suchasthediscountrateforvaluingpensionobligationsandthelong-termrateofreturnassumedtobeearnedonpensionassets,bothofwhichimpactthenetperiodicpensioncostfortheperiod.Thediscountrate,whichwedetermineannuallybasedonmarketinterestrates,andourestimatedlong-termrateofreturn,whichcandifferconsiderablyfromactualreturns,aretwofactorsthatcanhaveaconsiderableimpactontheannualcostofretirementbenefitsandthefundedstatusofourqualifiedpensionplan.Themarketperformanceonplanassetsduringfiscal2009wasconsiderablyworsethanourexpectedreturnandasaresultthe34unfundedstatusofourqualifiedplanincreasedsignificantly.Despitethiswewerenotrequiredtofundourplanduringfiscal2009,primarilyduetovoluntaryfundinginprioryears.Asofthedateofthisreportwehavefunded$50millionintothequalifiedpensionplanandmaymakeadditionalvoluntarycontributionsduringfiscal2010.Sharebasedcompensation:InaccordancewithSFASNo.123(revised2004)“Share-BasedPayment”(“SFASNo.123R”)TJXestimatesthefairvalueofstockawardsissuedtoemployeesanddirectorsunderitsstockincentiveplan.Thefairvalueoftheawardsisamortizedas“stockcompensationcost”overthevestingperiodsduringwhichtherecipientsarerequiredtoprovideservice.WeusetheBlackScholesmethodfordeterminingthefairvalueofstockoptionsgrantedwhichrequiresmanagementtomakesignificantjudgmentsandestimates.Theuseofdifferentassumptionsandestimatescouldhaveamaterialimpactontheestimatedfairvalueofstockoptiongrantsandtherelatedexpense.Casualtyinsurance:InJuly2007,weenteredintoafixedpremiumprogramforourcasualtyinsurance.Ourcasualtyinsuranceprogrampriorto2007requiredustoestimatethetotalclaimswewillincurasacomponentofourannualinsurancecost.Theestimatedclaimsaredeveloped,withtheassistanceofanactuary,basedonhistoricalexperienceandotherfactors.Theseestimatesinvolvesignificantjudgmentsandassumptionsandactualresultscoulddifferfromtheseestimates.Ifourestimatefortheclaimscomponentofourcasualtyinsuranceexpenseforfiscal2009weretochangeby10%,thefiscal2009pre-taxcostwouldincreaseordecreasebyapproximately$2million.Alargeportionoftheseclaimsarefundedwithanon-refundablepaymentduringthepolicyyear,offsettingourestimatedclaimsaccrual.Wehadanetaccrualof$20.8millionfortheunfundedportionofourcasualtyinsuranceprogramasofJanuary31,2009.Incometaxes:Likemanylargecorporations,ourincometaxreturnsareregularlyauditedbyfederal,stateandlocaltaxauthoritiesintheUnitedStatesandinforeigncountrieswhereweoperate.Suchauthoritiesmaychallengepositionswetake,andweareengagedinvariousproceedingswithsuchauthoritieswithrespecttoassessments,claims,deficienciesandrefunds.Inaccordancewithgenerallyacceptedaccountingprinciples,weevaluateuncertaintaxpositionsbasedonourevaluationofthefacts,circumstancesandinformationavailableatthereportingdateandweaccrueforexposureswhenwebelievethatitismorelikelythannot,basedonthetechnicalmerits,thatthepositionswillnotbesustaineduponexamination.However,itispossiblethattheactualresultsofproceedingswithtaxauthoritiesandincourts,changesinfacts,expirationofstatutesoflimitationsorotherresolutionsoftaxpositionswilldifferfromtheamountswehaveaccruedineitherapositiveoranegativemanner,whichcouldmateriallyaffectoureffectiveincometaxrateinagivenfinancialperiod,theamountoftaxeswearerequiredtopayandourresultsofoperations.ReservesforComputerIntrusionrelatedcostsandfordiscontinuedoperations:AsdiscussedinNoteBandNoteMtotheconsolidatedfinancialstatementsandelsewhereintheManagement’sDiscussionandAnalysis,wehavereservesestablishedforprobablelossesarisingoutoftheComputerIntrusionandforleasesrelatingtooperationsdiscontinuedbyuswhereweweretheoriginallesseeoraguarantorandwhichhavebeenassignedorsublettothirdparties.TheComputerIntrusionreserverequiresustomakeestimatesandassumptionsabouttheoutcomeandcostsofclaims,litigationandinvestigationsandcostsandexpenseswewillincur.Wemaketheseestimatesbasedonourbestjudgmentsoftheoutcomeofsuchclaims,litigationandinvestigationandtheamountofsuchcostsandexpenses.Theleasesrelatingtodiscontinuedoperationsarelong-termobligationsandtheestimatedcosttousinvolvesnumerousestimatesandassumptionsincludingwhetherandforhowlongweremainobligatedwithrespecttoaparticularleasetheextenttowhichanassigneeorsubtenantwillassumeourobligationsundertheleases,amountsofsubtenantincome,howaparticularobligationmayultimatelybesettledandwhatmitigatingfactors,includingindemnification,mayexisttoanyliability.Wedeveloptheseassumptionsbasedonpastexperienceandbyevaluatingvariousprobableoutcomesandthecircumstancessurroundingeachsituationandlocation.Webelievethatourcurrentreservesareareasonableestimateofthemostlikelyoutcomesandthatthereservesshouldbeadequatetocovertheultimatecashcostswewillincur.However,actualresultsmaydifferfromourcurrentestimates,andsuchdifferencescouldbematerial.Wemaydecreaseorincreasetheamountofourreservestoadjustfordevelopmentsrelatingtotheunderlyingassumptions.35Losscontingencies:Certainconditionsmayexistasofthedatethefinancialstatementsareissued,whichmayresultinalosstousbutwhichwillnotberesolveduntiloneormorefutureeventsoccurorfailtooccur.Ourmanagement,whererelevant,withtheassistanceofourlegalcounsel,assessessuchcontingentliabilities,andsuchassessmentinherentlyinvolvesanexerciseofjudgment.Inassessinglosscontingenciesrelatedtolegalproceedingsthatarependingagainstusorclaimsthatmayresultinsuchproceedings,ourlegalcounselassistsusinevaluatingtheperceivedmeritsofanylegalproceedingsorclaimsaswellastheperceivedmeritsofthereliefsoughtorexpectedtobesoughttherein.Iftheassessmentofacontingencyindicatesthatitisprobablethatamateriallosshasbeenincurredandtheamountoftheliabilitycanbeestimated,thentheestimatedliabilitywouldbeaccruedinthefinancialstatements.Iftheassessmentindicatesthatapotentiallymateriallosscontingencyisnotprobable,butisreasonablypossible,orisprobablebutcannotbeestimated,thenwewilldisclosethenatureofthecontingentliability,togetherwithanestimateoftherangeofthepossiblelossorastatementthatsuchlossisnotestimable.RECENTACCOUNTINGPRONOUNCEMENTSSeeNoteAtoourconsolidatedfinancialstatementsincludedinthisannualreportforrecentlyissuedaccountingstandards,includingtheexpecteddatesofadoptionandestimatedeffectsonourconsolidatedfinancialstatements.ITEM7A.QUANTITATIVEANDQUALITATIVEDISCLOSUREABOUTMARKETRISKWedonotenterintoderivativesforspeculativeortradingpurposes.FOREIGNCURRENCYEXCHANGERISKWeareexposedtoforeigncurrencyexchangerateriskonourinvestmentinourCanadian(WinnersandHomeSense)andEuropean(T.K.MaxxandHomeSense)operationsandonthetranslationoftheseforeignoperationsintotheU.S.dollar.AsmorefullydescribedinNotesAandEtotheconsolidatedfinancialstatementstotheAnnualReportonForm10-KforthefiscalyearendedJanuary31,2009,wehedgeasignificantportionofourintercompanytransactionswithforeignoperationsandcertainmerchandisepurchasecommitmentsincurredbytheseoperations,withderivativefinancialinstruments.Duringfiscal2009weceasedhedgingournetinvestmentpositioninourforeignoperations.Weenterintoderivativecontractsonlywhenthereisanunderlyingeconomicexposure.Weutilizecurrencyforwardandswapcontracts,designedtooffsetthegainsorlossesintheunderlyingexposures.Thecontractsareexecutedwithbankswebelievearecreditworthyandaredenominatedincurrenciesofmajorindustrialcountries.Wehaveperformedasensitivityanalysisassumingahypothetical10%adversemovementinforeigncurrencyexchangeratesappliedtothehedgingcontractsandtheunderlyingexposuresdescribedaboveaswellasthetranslationofourforeignoperationsintoourreportingcurrency.AsofJanuary31,2009,theanalysisindicatedthatsuchanadversemovementwouldnothaveamaterialeffectonourconsolidatedfinancialpositionbutcouldhavereducedourpre-taxincomefromcontinuingoperationsforfiscal2009byapproximately$37million.INTERESTRATERISKOurcashequivalentsandshort-terminvestmentsandcertainlinesofcreditbearvariableinterestrates.Changesininterestratesaffectinterestearnedandpaidbyus.Inaddition,changesinthegrossamountofourborrowingsandfuturechangesininterestrateswillaffectourfutureinterestexpense.Weoccasionallyenterintofinancialinstrumentstomanageourcostofborrowing;however,webelievethattheuseofprimarilyfixedratedebtminimizesourexposuretomarketconditions.Wehaveperformedasensitivityanalysisassumingahypothetical10%adversemovementininterestratesappliedtothemaximumvariableratedebtoutstanding.AsofJanuary31,2009,theanalysisindicatedthatsuchanadversemovementwouldnothaveamaterialeffectonourconsolidatedfinancialposition,resultsofoperationsorcashflows.36EQUITYPRICERISKTheassetsofourqualifiedpensionplan,alargeportionofwhichisinvestedinequitysecurities,aresubjecttotherisksanduncertaintiesofthepublicstockmarket.Weallocatethepensionassetsinamannerthatattemptstominimizeandcontrolourexposuretothesemarketuncertainties.Investments,ingeneral,areexposedtovariousrisks,suchasinterestrate,credit,andoverallmarketvolatility.Asaresultofthesignificantdeclineinthecapitalmarketsin2009thevalueofourpensionplanassetsdecreasedsubstantiallyincreasingtheunfundedstatusofourplanandreducingshareholder’sequityonourbalancesheet.ITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATATheinformationrequiredbythisitemmaybefoundonpagesF-1throughF-34ofthisAnnualReportonForm10-K.ITEM9.CHANGESINANDDISAGREEMENTSWITHACCOUNTANTSONACCOUNTINGANDFINANCIALDISCLOSURENotapplicable.ITEM9A.CONTROLSANDPROCEDURES(a)EvaluationofDisclosureControlsandProceduresWehavecarriedoutanevaluation,underthesupervisionandwiththeparticipationofourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,oftheeffectivenessofthedesignandoperationofourdisclosurecontrolsandprocedures,asdefinedinRules13a-15(e)and15d-15(e)undertheExchangeAct,asoftheendoftheperiodcoveredbythisreportpursuanttoRules13a-15and15d-15oftheExchangeAct.Baseduponthatevaluation,ourChiefExecutiveOfficerandChiefFinancialOfficerconcludedthatourdisclosurecontrolsandproceduresareeffectiveinensuringthatinformationrequiredtobedisclosedbyusinthereportsthatwefileorsubmitundertheExchangeActis(i)recorded,processed,summarizedandreported,withinthetimeperiodsspecifiedintheSEC’srulesandforms;and(ii)accumulatedandcommunicatedtoourmanagement,includingourprincipalexecutiveandprincipalfinancialofficers,orpersonsperformingsimilarfunctions,asappropriatetoallowtimelydecisionsregardingrequireddisclosures.Managementrecognizesthatanycontrolsandprocedures,nomatterhowwelldesignedandoperated,canprovideonlyreasonableassuranceofachievingtheirobjectivesandmanagementnecessarilyappliesitsjudgmentinevaluatingthecost-benefitrelationshipofimplementingpossiblecontrolsandprocedures.(b)ChangesinInternalControlOverFinancialReportingTherewerenochangesinourinternalcontroloverfinancialreporting(asdefinedinRules13a-15(f)and15d-15(f)undertheExchangeAct)duringthefourthquarteroffiscal2009identifiedinconnectionwithourChiefExecutiveOfficer’sandChiefFinancialOfficer’sevaluationthathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.(c)Management’sAnnualReportonInternalControlOverFinancialReportingOurmanagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreporting.InternalcontroloverfinancialreportingisdefinedinRules13a-15(f)and15d-15(f)promulgatedundertheExchangeActasaprocessdesignedby,orunderthesupervisionof,ourprincipalexecutiveandprincipalfinancialofficers,orpersonsperformingsimilarfunctions,andeffectedbyourboardofdirectors,managementandotherpersonnel,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciplesandincludesthosepoliciesandproceduresthat:—PertaintothemaintenanceofrecordsthatinreasonabledetailaccuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofTJX;37—Providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofTJXarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofTJX;and—Providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,useordispositionofTJX’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.OurinternalcontrolsystemisdesignedtoprovidereasonableassurancetoourmanagementandBoardofDirectorsregardingthepreparationandfairpresentationofpublishedfinancialstatements.Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Therefore,eventhosesystemsdeterminedtobeeffectivecanprovideonlyreasonableassurancewithrespecttofinancialstatementpreparationandpresentation.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.Underthesupervisionandwiththeparticipationofourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,weconductedanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingasofJanuary31,2009basedontheframeworkinInternalControl-IntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(“COSO”).Basedonthatevaluation,managementconcludedthatitsinternalcontroloverfinancialreportingwaseffectiveasofJanuary31,2009.(d)AttestationReportoftheIndependentRegisteredPublicAccountingFirmPricewaterhouseCoopersLLP,theindependentregisteredpublicaccountingfirmthatauditedandreportedonourconsolidatedfinancialstatementscontainedherein,hasauditedtheeffectivenessofourinternalcontroloverfinancialreportingasofJanuary31,2009,andhasissuedanattestationreportontheeffectivenessofourinternalcontroloverfinancialreportingincludedherein.ITEM9B.OTHERINFORMATIONNone.38PartIIIITEM10.DIRECTORS,EXECUTIVEOFFICERSANDCORPORATEGOVERNANCEThefollowingaretheExecutiveOfficersofTJXasofMarch31,2009:NameAgeOfficeandEmploymentDuringLastFiveYearsBernardCammarata69ChairmanoftheBoardsince1999.ActingChiefExecutiveOfficerfromSeptember2005toJanuary2007andChiefExecutiveOfficerfrom1989to2000.LedTJXanditsformerTJXsubsidiaryandT.J.MaxxDivisionfromtheorganizationofthebusinessin1976until2000,includingservingasChiefExecutiveOfficerandPresidentofTJX,ChairmanandPresidentofTJX’sT.J.MaxxDivision,andChairmanofTheMarmaxxGroup.DonaldG.Campbell57ViceChairmansinceSeptember2006,SeniorExecutiveVicePresident,ChiefAdministrativeandBusinessDevelopmentOfficerfromMarch2004toSeptember2006.ExecutiveVicePresident—Financefrom1996to2004andChiefFinancialOfficerofTJXfrom1989to2004.SeniorVicePresident—Finance,from1989to1996.VariousfinancialpositionswithTJXanditspredecessorssincejoiningin1973.ErnieHerrman48SeniorExecutiveVicePresident,GroupPresidentSinceAugust2008.SeniorExecutiveVicePresidentsinceJanuary2007andPresident,MarmaxxfromJanuary2005toAugust2008.SeniorExecutiveVicePresident,ChiefOperatingOfficer,Marmaxxfrom2004to2005.ExecutiveVicePresident,Merchandising,Marmaxxfrom2001to2004.VariousmerchandisingpositionswithTJXsincejoiningin1989.CarolMeyrowitz55ChiefExecutiveOfficersinceJanuary2007,DirectorsinceSeptember2006andPresidentsinceOctober2005.ConsultanttoTJXfromJanuary2005toOctober2005.SeniorExecutiveVicePresidentfromMarch2004toJanuary2005.PresidentofMarmaxxfrom2001toJanuary2005.ExecutiveVicePresidentofTJXfrom2001to2004.JeffreyG.Naylor50SeniorExecutiveVicePresident,ChiefFinancialandAdministrativeOfficersinceFebruary2009.SeniorExecutiveVicePresident,ChiefAdministrativeandBusinessDevelopmentOfficer,June2007toFebruary2009.ChiefFinancialandAdministrativeOfficer,September2006toJune2007.SeniorExecutiveVicePresident,ChiefFinancialOfficer,fromMarch2004toSeptember2006,ExecutiveVicePresident,ChiefFinancialOfficereffectiveFebruary2004.JeromeRossi65SeniorExecutiveVicePresident,GroupPresident,sinceJanuary2007.SeniorExecutiveVicePresident,ChiefOperatingOfficer,Marmaxxfrom2005toJanuary2007.President,HomeGoods,from2000to2005.ExecutiveVicePresident,StoreOperations,HumanResourcesandDistributionServices,Marmaxxfrom1996to2000.PaulSweetenham44SeniorExecutiveVicePresident,GroupPresident,Europe,sinceJanuary2007.President,T.K.Maxxsince2001.SeniorVicePresident,MerchandisingandMarketing,T.K.Maxxfrom1999to2001.VariousmerchandisingpositionswithT.K.Maxxfrom1993to1999.AllofficersholdofficeuntilthenextannualmeetingoftheBoardinJune2009anduntiltheirsuccessorsareelected,orappointed,andqualified.TJXwillfilewiththeSecuritiesandExchangeCommissionadefinitiveproxystatementnolaterthan120daysafterthecloseofitsfiscalyearendedJanuary31,2009(theProxyStatement).TheinformationrequiredbythisItemandnotgiveninthisItemwillappearundertheheadings“ElectionofDirectors,”“CorporateGovernance,”“AuditCommitteeReport”and“Section16(a)BeneficialOwnershipReportingCompliance”inourProxyStatement,whichsectionsareincorporatedinthisitembyreference.39TJXhasaCodeofEthicsforTJXExecutivesgoverningitsChairman,ViceChairman,ChiefExecutiveOfficer,President,ChiefAdministrativeOfficer,ChiefFinancialOfficer,PrincipalAccountingOfficerandothersenioroperating,financialandlegalexecutives.TheCodeofEthicsforTJXExecutivesisdesignedtoensureintegrityinitsfinancialreportsandpublicdisclosures.TJXalsohasaCodeofConductandBusinessEthicsforDirectorswhichpromoteshonestandethicalconduct,compliancewithapplicablelaws,rulesandregulationsandtheavoidanceofconflictsofinterest.Bothofthesecodesofconductarepublishedatwww.tjx.com.Weintendtodiscloseanyfutureamendmentsto,orwaiversfrom,theCodeofEthicsforTJXExecutivesortheCodeofBusinessConductandEthicsforDirectorswithinfourbusinessdaysofthewaiveroramendmentthroughawebsitepostingorbyfilingaCurrentReportonForm8-KwiththeSecuritiesandExchangeCommission.ITEM11.EXECUTIVECOMPENSATIONTheinformationrequiredbythisItemwillappearundertheheading“ExecutiveCompensation”inourProxyStatement,whichsectionisincorporatedinthisitembyreference.ITEM12.SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENTANDRELATEDSTOCKHOLDERMATTERSTheinformationrequiredbythisItemwillappearundertheheading“BeneficialOwnership”inourProxyStatement,whichsectionisincorporatedinthisitembyreference.ITEM13.CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS,ANDDIRECTORINDEPENDENCETheinformationrequiredbythisItemwillappearundertheheadings“TransactionswithRelatedPersons”and“CorporateGovernance”inourProxyStatement,whichsectionsareincorporatedinthisitembyreference.ITEM14.PRINCIPALACCOUNTANTFEESANDSERVICESTheinformationrequiredbythisItemwillappearundertheheading“AuditCommitteeReport”inourProxyStatement,whichsectionisincorporatedinthisitembyreference.40PartIVITEM15.EXHIBITS,FINANCIALSTATEMENTSCHEDULES(a)FinancialStatementSchedulesForalistoftheconsolidatedfinancialinformationincludedherein,seeIndextotheConsolidatedFinancialStatementsonpageF-1.ScheduleII—ValuationandQualifyingAccountsInthousandsBalanceBeginningofPeriodAmountsChargedtoNetIncomeWrite-OffsAgainstReserveBalanceEndofPeriodSalesReturnReserve:FiscalYearEndedJanuary31,2009$15,298$866,757$868,049$14,006FiscalYearEndedJanuary26,2008$14,182$841,687$840,571$15,298FiscalYearEndedJanuary27,2007$14,101$795,941$795,860$14,182DiscontinuedOperationsReserve:FiscalYearEndedJanuary31,2009$46,076$1,820$7,332$40,564FiscalYearEndedJanuary26,2008$57,677$1,820$13,421$46,076FiscalYearEndedJanuary27,2007$14,981$63,923$21,227$57,677CasualtyInsuranceReserve:FiscalYearEndedJanuary31,2009$26,373$1,232$6,846$20,759FiscalYearEndedJanuary26,2008$31,443$17,673$22,743$26,373FiscalYearEndedJanuary27,2007$34,707$54,429$57,693$31,443ComputerIntrusionReserve:FiscalYearEndedJanuary31,2009$117,266$(13,000)$62,055$42,211FiscalYearEndedJanuary26,2008$—$159,200$41,934$117,26641(b)ExhibitsListedbelowareallexhibitsfiledaspartofthisreport.SomeexhibitsarefiledbytheRegistrantwiththeSecuritiesandExchangeCommissionpursuanttoRule12b-32undertheExchangeAct.ExhibitNo.DescriptionofExhibit3(i).1FourthRestatedCertificateofIncorporationisincorporatedhereinbyreferencetoExhibit99.1totheForm8-A/AfiledSeptember9,1999.CertificateofAmendmentofFourthRestatedCertificateofIncorporationisincorporatedhereinbyreferencetoExhibit3(i)totheForm10-QfiledforthequarterendedJuly28,2005.3(ii).1By-lawsofTJX,asamended,areincorporatedhereinbyreferencetoExhibit3.1totheForm8-KfiledonDecember8,2008.4.1IndenturebetweenTJXandTheBankofNewYorkdatedasofFebruary13,2001,incorporatedbyreferencetoExhibit4.1oftheRegistrationStatementonFormS-3filedonMay9,2001.10.14-yearRevolvingCreditAgreementdatedMay5,2005amongvariousfinancialinstitutionsaslenders,includingBankofAmerica,N.A.,JPMorganChaseBank,NationalAssociation,TheBankofNewYork,CitizensBankofMassachusetts,KeyBankNationalAssociationandUnionBankofCalifornia,N.A.,asco-agentsisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledMay6,2005.TherelatedAmendmentNo.1tothe4-yearRevolvingCreditAgreementdatedMay12,2006isincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledMay17,2006.10.25-yearRevolvingCreditAgreementdatedMay5,2005amongvariousfinancialinstitutionsaslenders,includingBankofAmerica,N.A.,JPMorganChaseBank,NationalAssociation,TheBankofNewYork,CitizensBankofMassachusetts,KeyBankNationalAssociationandUnionBankofCalifornia,N.A.,asco-agentsisincorporatedhereinbyreferencetoExhibit10.2totheForm8-KfiledMay6,2005.TherelatedAmendmentNo.1tothe5-yearRevolvingCreditAgreementdatedMay12,2006isincorporatedhereinbyreferencetoExhibit10.2totheForm8-KfiledMay17,2006.10.3TheEmploymentAgreementdatedasofJune6,2006betweenBernardCammarataandTJXisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledJune9,2006.*10.4TheEmploymentAgreementdatedasofJune6,2008withDonaldG.CampbellisincorporatedhereinbyreferencetoExhibit10.1toForm8-KfiledonJune6,2008.*10.5TheEmploymentAgreementdatedasofJanuary28,2007withCarolMeyrowitzisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonApril10,2007.TheLetterAgreementdatedasofJanuary31,2009withCarolMeyrowitzisfiledherewith.*10.6TheEmploymentAgreementdatedasofApril5,2008withJeffreyNaylorisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonApril7,2008.*10.7TheEmploymentAgreementdatedasofSeptember8,2006withErnieHerrmanisincorporatedhereinbyreferencetoExhibit10.9totheForm10-KforthefiscalyearendedJanuary26,2008.*10.8TheEmploymentAgreementdatedasofJune11,2007withNirmalTripathyisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonJune15,2007.TheLetterAgreementdatedasofJanuary28,2009withNirmalTripathyisfiledherewith.*10.9TheFormof409AAmendmenttoEmploymentAgreementsforthenamedexecutiveofficersisfiledherewith.*10.10TheTJXCompanies,Inc.ManagementIncentivePlan,asamended,isincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedApril28,2007.The409AAmendmenttotheManagementIncentivePlan,effectiveasofJanuary1,2008isfiledherewith.*10.11TheStockIncentivePlan,asamendedandrestatedthroughJune1,2004,isincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedJuly31,2004.TherelatedFirstAmendmenttotheStockIncentivePlanisincorporatedhereinbyreferencetoExhibit10.11totheForm10-KfiledforthefiscalyearendedJanuary28,2006.TheStockIncentivePlan,asamendedthroughJune5,2006,isincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedJuly29,2006.*10.12TheFormofaNon-QualifiedStockOptionCertificateGrantedUndertheStockIncentivePlanisincorporatedhereinbyreferencetoExhibit10.2totheForm10-QfiledforthequarterendedJuly31,2004.*42ExhibitNo.DescriptionofExhibit10.13TheFormofaPerformance-BasedRestrictedStockAwardGrantedUnderStockIncentivePlanisincorporatedhereinbyreferencetoExhibit10.3totheForm10-QfiledforthequarterendedJuly31,2004*10.14TheFormofaPerformance-BasedRestrictedStockAwardGrantedUnderStockIncentivePlanisincorporatedhereinbyreferencetoExhibit10.2totheForm8-KfiledNovember17,2005.*10.15DescriptionofDirectorCompensationArrangementsisincorporatedhereinbyreferencetoExhibit10.15totheForm10-KforthefiscalyearendedJanuary26,2008.*10.16TheTJXCompanies,Inc.LongRangePerformanceIncentivePlan,asamended,isincorporatedhereinbyreferencetoExhibit10.3totheForm10-QfiledforthequarterendedJuly26,1997.TheAmendmenttoTheLongRangePerformanceIncentivePlanadoptedonSeptember7,2005isincorporatedhereinbyreferencetoExhibit10.2totheForm10-QfiledforthefiscalquarterendedApril28,2007.The409AAmendmenttotheLongRangePerformanceIncentivePlan,effectiveasofJanuary1,2008isfiledherewith.*10.17TheGeneralDeferredCompensationPlan(1998Restatement)andrelatedFirstAmendment,effectiveJanuary1,1999,areincorporatedhereinbyreferencetoExhibit10.9totheForm10-KforthefiscalyearendedJanuary30,1999.TherelatedSecondAmendment,effectiveJanuary1,2000,isincorporatedhereinbyreferencetoExhibit10.10totheForm10-KfiledforthefiscalyearendedJanuary29,2000.TherelatedThirdandFourthAmendmentsareincorporatedhereinbyreferencetoExhibit10.17totheForm10-KforthefiscalyearendedJanuary28,2006.TherelatedFifthAmendment,effectiveJanuary1,2008isfiledherewith.*10.18TheSupplementalExecutiveRetirementPlan,asamended,isincorporatedhereinbyreferencetoExhibit10(l)totheForm10-KfiledforthefiscalyearendedJanuary25,1992.The2005RestatementtotheSupplementalExecutiveRetirementPlanisincorporatedhereinbyreferencetoExhibit10.18totheForm10-KforthefiscalyearendedJanuary28,2006.The2008RestatementtotheSupplementalExecutiveRetirementPlanisfiledherewith.*10.19TheExecutiveSavingsPlan,asamendedandrestated,effectiveJanuary1,2008,isfiledherewith.*10.20TheRestorationAgreementandrelatedletteragreementregardingconditionalreimbursementdatedDecember31,2002betweenTJXandBernardCammarataareincorporatedhereinbyreferencetoExhibit10.17totheForm10-KfiledforthefiscalyearendedJanuary25,2003.*10.21TheformofIndemnificationAgreementbetweenTJXandeachofitsofficersanddirectorsisincorporatedhereinbyreferencetoExhibit10(r)totheForm10-KfiledforthefiscalyearendedJanuary27,1990.*10.22TheTrustAgreementdatedasofApril8,1988betweenTJXandStateStreetBankandTrustCompanyisincorporatedhereinbyreferencetoExhibit10(y)totheForm10-KfiledforthefiscalyearendedJanuary30,1988.*10.23TheTrustAgreementdatedasofApril8,1988betweenTJXandFleetBank(formerlyShawmutBankofBoston,N.A.)isincorporatedhereinbyreferencetoExhibit10(z)totheForm10-KfiledforthefiscalyearendedJanuary30,1988.*10.24TheTrustAgreementforExecutiveSavingsPlandatedasofJanuary1,2005betweenTJXandWellsFargoBank,N.A.isincorporatedhereinbyreferencetoExhibit10.26totheForm10-KfiledforthefiscalyearendedJanuary29,2005.*10.25TheDistributionAgreementdatedasofMay1,1989betweenTJXandHomeBase,Inc.(formerlyWabanInc.)isincorporatedhereinbyreferencetoExhibit3toTJX’sCurrentReportonForm8-KdatedJune21,1989.TheFirstAmendmenttoDistributionAgreementdatedasofApril18,1997betweenTJXandHomeBase,Inc.(formerlyWabanInc.)isincorporatedhereinbyreferencetoExhibit10.22totheForm10-KfiledforthefiscalyearendedJanuary25,1997.10.26TheIndemnificationAgreementdatedasofApril18,1997byandbetweenTJXandBJ’sWholesaleClub,Inc.isincorporatedhereinbyreferencetoExhibit10.23totheForm10-KfiledforthefiscalyearendedJanuary25,1997.43ExhibitNo.DescriptionofExhibit10.27TheAmendedSettlementAgreement,datedasofNovember14,2007,byandamongthenamedplaintiffs,individuallyandonbehalfoftheSettlementClass,TheTJXCompanies,Inc.andFifthThirdBancorpisincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedOctober27,2007.10.28TheSettlementAgreementamongTheTJXCompanies,Inc.,VisaU.S.A.Inc.andVisaInc.andFifthThirdBank,datedNovember29,2007isincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonNovember30,2007.21Subsidiaries:AlistoftheRegistrant’ssubsidiariesisfiledherewith.23ConsentsofIndependentRegisteredPublicAccountingFirm:TheConsentofPricewaterhouseCoopersLLPisfiledherewith.24PowerofAttorney:ThePowerofAttorneygivenbytheDirectorsandcertainExecutiveOfficersofTJXisfiledherewith.31.1CertificationStatementofChiefExecutiveOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002isfiledherewith.31.2CertificationStatementofChiefFinancialOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002isfiledherewith.32.1CertificationStatementofChiefExecutiveOfficerpursuanttoSection906oftheSarbanes-OxleyActof2002isfiledherewith.32.2CertificationStatementofChiefFinancialOfficerpursuanttoSection906oftheSarbanes-OxleyActof2002isfiledherewith.*Managementcontractorcompensatoryplanorarrangement.44SIGNATURESPursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theRegistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.THETJXCOMPANIES,INC./s/JEFFREYG.NAYLORJeffreyG.Naylor,ChiefFinancialandAdministrativeOfficer,onbehalfofTheTJXCompanies,Inc.Dated:March31,200945PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheRegistrantandinthecapacitiesandonthedateindicated./S/CAROLMEYROWITZCarolMeyrowitz,PresidentandChiefExecutiveOfficerandDirectorJEFFREYG.NAYLOR*JeffreyG.Naylor,ChiefFinancialandAccountingOfficerJOSÉB.ALVAREZ*JoséB.Alvarez,DirectorAMYB.LANE*AmyB.Lane,DirectorALANM.BENNETT*AlanM.Bennett,DirectorJOHNF.O’BRIEN*JohnF.O’Brien,DirectorDAVIDA.BRANDON*DavidA.Brandon,DirectorROBERTF.SHAPIRO*RobertF.Shapiro,DirectorBERNARDCAMMARATA*BernardCammarata,ChairmanoftheBoardofDirectorsWILLOWB.SHIRE*WillowB.Shire,DirectorDAVIDT.CHING*DavidT.Ching,DirectorFLETCHERH.WILEY*FletcherH.Wiley,DirectorMICHAELF.HINES*MichaelF.Hines,Director*BY/S/JEFFREYG.NAYLORJeffreyG.Naylorforhimselfandasattorney-in-factDated:March31,200946TheTJXCompanies,Inc.INDEXTOCONSOLIDATEDFINANCIALSTATEMENTSForFiscalYearsEndedJanuary31,2009,January26,2008andJanuary27,2007ReportofIndependentRegisteredPublicAccountingFirm.................................F-2ConsolidatedFinancialStatements:ConsolidatedStatementsofIncomeforthefiscalyearsendedJanuary31,2009,January26,2008andJanuary27,2007...........................................................F-3ConsolidatedBalanceSheetsasofJanuary31,2009andJanuary26,2008.....................F-4ConsolidatedStatementsofCashFlowsforthefiscalyearsendedJanuary31,2009,January26,2008andJanuary27,2007.......................................................F-5ConsolidatedStatementsofShareholders’EquityforthefiscalyearsendedJanuary31,2009,January26,2008andJanuary27,2007..............................................F-6NotestoConsolidatedFinancialStatements..............................................F-7FinancialStatementSchedules:ScheduleII—ValuationandQualifyingAccounts........................................41F-1ReportofIndependentRegisteredPublicAccountingFirmToTheBoardofDirectorsandShareholdersofTheTJXCompanies,Inc:Inouropinion,theconsolidatedfinancialstatementslistedintheaccompanyingindexpresentfairly,inallmaterialrespects,thefinancialpositionofTheTJXCompanies,Inc.anditssubsidiaries(the“Company”)asofJanuary31,2009andJanuary26,2008,andtheresultsoftheiroperationsandtheircashflowsforeachofthethreeyearsintheperiodendedJanuary31,2009inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.Inaddition,inouropinion,thefinancialstatementschedulelistedintheaccompanyingindexpresentsfairly,inallmaterialrespects,theinformationsetforththereinwhenreadinconjunctionwiththerelatedconsolidatedfinancialstatements.Alsoinouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofJanuary31,2009,basedoncriteriaestablishedinInternalControl—IntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).TheCompany’smanagementisresponsibleforthesefinancialstatementsandfinancialstatementschedule,formaintainingeffectiveinternalcontroloverfinancialreportingandforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedinManagement’sAnnualReportonInternalControloverFinancialReportingappearingunderItem9A.Ourresponsibilityistoexpressopinionsonthesefinancialstatements,onthefinancialstatementschedule,andontheCompany’sinternalcontroloverfinancialreportingbasedonourintegratedaudits.WeconductedourauditsinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).Thosestandardsrequirethatweplanandperformtheauditstoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatementandwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.Ourauditsofthefinancialstatementsincludedexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements,assessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,andevaluatingtheoverallfinancialstatementpresentation.Ourauditofinternalcontroloverfinancialreportingincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Ourauditsalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditsprovideareasonablebasisforouropinions.AsdiscussedinNoteKtotheaccompanyingconsolidatedfinancialstatements,theCompanychangeditsmethodofaccountingfordefinedbenefitpensionandotherpostretirementobligationsasofJanuary27,2007.Inaddition,asdiscussedinNoteJtotheaccompanyingconsolidatedfinancialstatements,theCompanychangeditsmethodofaccountingforuncertaintaxpositionsasofJanuary28,2007.Acompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(ii)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(iii)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstate-ments.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate./s/PricewaterhouseCoopersLLPBoston,MassachusettsMarch31,2009F-2TheTJXCompanies,Inc.ConsolidatedStatementsofIncomeAmountsinthousandsexceptpershareamountsJanuary31,2009January26,2008January27,2007FiscalYearEnded(53weeks)Netsales$18,999,505$18,336,726$17,104,013Costofsales,includingbuyingandoccupancycosts14,394,75613,841,69512,969,996Selling,generalandadministrativeexpenses3,170,0183,039,5202,849,283ProvisionforComputerIntrusionrelatedcosts(30,500)197,0224,960Interest(income)expense,net14,291(1,598)15,566Incomefromcontinuingoperationsbeforeprovisionforincometaxes1,450,9401,260,0871,264,208Provisionforincometaxes536,054477,655477,036Incomefromcontinuingoperations914,886782,432787,172(Loss)fromdiscontinuedoperations,netofincometaxes(34,269)(10,682)(49,133)Netincome$880,617$771,750$738,039Basicearningspershare:Incomefromcontinuingoperations$2.18$1.77$1.73(Loss)fromdiscontinuedoperations,netofincometaxes$(0.08)$(0.03)$(0.10)Netincome$2.10$1.74$1.63Weightedaveragecommonshares—basic419,076443,050454,044Dilutedearningspershare:Incomefromcontinuingoperations$2.08$1.68$1.65(Loss)fromdiscontinuedoperations,netofincometaxes$(0.08)$(0.02)$(0.10)Netincome$2.00$1.66$1.55Weightedaveragecommonshares—diluted442,255468,046480,045Cashdividendsdeclaredpershare$0.44$0.36$0.28Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-3TheTJXCompanies,Inc.ConsolidatedBalanceSheetsInthousandsJanuary31,2009January26,2008FiscalYearEndedASSETSCurrentassets:Cashandcashequivalents$453,527$732,612Accountsreceivable,net143,500143,289Merchandiseinventories2,619,3362,737,378Prepaidexpensesandothercurrentassets274,091215,550Currentdeferredincometaxes,net135,675163,465Totalcurrentassets3,626,1293,992,294Propertyatcost:Landandbuildings280,278277,988Leaseholdcostsandimprovements1,728,3621,785,429Furniture,fixturesandequipment2,784,3162,675,009Totalpropertyatcost4,792,9564,738,426Lessaccumulateddepreciationandamortization2,607,2002,520,973Netpropertyatcost2,185,7562,217,453Propertyundercapitallease,netofaccumulatedamortizationof$17,124and$14,890,respectively15,44817,682Otherassets171,381190,981Goodwillandtradename,netofamortization179,528181,524TOTALASSETS$6,178,242$6,599,934LIABILITIESCurrentliabilities:Currentinstallmentsoflong-termdebt$392,852$—Obligationundercapitalleaseduewithinoneyear2,1752,008Accountspayable1,276,0981,516,754Accruedexpensesandothercurrentliabilities1,096,7661,213,987Federal,foreignandstateincometaxespayable—28,244Totalcurrentliabilities2,767,8912,760,993Otherlong-termliabilities765,004811,333Non-currentdeferredincometaxes,net127,00842,903Obligationundercapitallease,lessportionduewithinoneyear18,19920,374Long-termdebt,exclusiveofcurrentinstallments365,583833,086Commitmentsandcontingencies——SHAREHOLDERS’EQUITYCommonstock,authorized1,200,000,000shares,parvalue$1,issuedandoutstanding412,821,592and427,949,533,respectively412,822427,950Additionalpaid-incapital——Accumulatedothercomprehensiveincome(loss)(217,781)(28,685)Retainedearnings1,939,5161,731,980Totalshareholders’equity2,134,5572,131,245TOTALLIABILITIESANDSHAREHOLDERS’EQUITY$6,178,242$6,599,934Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-4TheTJXCompanies,Inc.ConsolidatedStatementsofCashFlowsInthousandsJanuary31,2009January26,2008January27,2007FiscalYearEnded(53weeks)Cashflowsfromoperatingactivities:Netincome$880,617$771,750$738,039Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities:Depreciationandamortization401,707369,396353,110Assetsofdiscontinuedoperationsold31,328——Lossonpropertydisposalsandimpairmentcharges23,90325,94432,743Amortizationofsharebasedcompensationexpense51,22957,37069,804Excesstaxbenefitsfromstockcompensationexpense(18,879)(6,756)(3,632)Deferredincometax(benefit)provision132,480(101,799)6,286Changesinassetsandliabilities:(Increase)decreaseinaccountsreceivable(8,245)(25,516)26,397(Increase)inmerchandiseinventories(68,489)(112,411)(201,413)(Increase)decreaseinprepaidexpensesandothercurrentassets(118,830)2,144(23,179)Increase(decrease)inaccountspayable(141,580)117,30450,165Increase(decrease)inaccruedexpensesandotherliabilities(34,525)202,893170,592Increase(decrease)inincometaxespayable(10,488)37,909(42,558)Other,net34,34436,54636,392Netcashprovidedbyoperatingactivities1,154,5721,374,7741,212,746Cashflowsfrominvestingactivities:Propertyadditions(582,932)(526,987)(378,011)Proceeds(payments)tosettlenetinvestmenthedges14,379(13,667)(17,713)Other(34)753700Netcash(usedin)investingactivities(568,587)(539,901)(395,024)Cashflowsfromfinancingactivities:Paymentsoncapitalleaseobligation(2,008)(1,854)(1,712)Proceedsfromsaleandissuanceofcommonstock142,154134,109260,197Cashpaymentsforrepurchaseofcommonstock(751,097)(940,208)(557,234)Excesstaxbenefitsfromstockcompensationexpense18,8796,7563,632Cashdividendspaid(176,749)(151,492)(122,927)Netcash(usedin)financingactivities(768,821)(952,689)(418,044)Effectofexchangeratechangesoncash(96,249)(6,241)(8,658)Net(decrease)increaseincashandcashequivalents(279,085)(124,057)391,020Cashandcashequivalentsatbeginningofyear732,612856,669465,649Cashandcashequivalentsatendofyear$453,527$732,612$856,669Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-5TheTJXCompanies,Inc.ConsolidatedStatementsofShareholders’EquityInthousandsSharesParValue$1AdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarningsTotalCommonStockBalance,January28,2006460,967$460,967—$(44,296)$1,475,983$1,892,654Comprehensiveincome:Netincome————738,039738,039Gainduetoforeigncurrencytranslationadjustments———20,433—20,433(Loss)onnetinvestmenthedgecontracts———(5,626)—(5,626)(Loss)oncashflowhedgecontracts———(3,950)—(3,950)Amountofcashflowhedgereclassifiedfromothercomprehensiveincometonetincome———5,011—5,011Totalcomprehensiveincome753,907Recognitionofunfundedpostretirementliabilities———(5,561)—(5,561)Cashdividendsdeclaredoncommonstock————(127,024)(127,024)Performancebasedrestrictedstockawardsgranted236236(236)———Amortizationofstockcompensationexpense——69,804——69,804Issuanceofcommonstockunderstockincentiveplanandrelatedtaxeffect14,45314,453249,122——263,575Commonstockrepurchased(22,006)(22,006)(318,690)—(216,538)(557,234)Balance,January27,2007453,650453,650—(33,989)1,870,4602,290,121Comprehensiveincome:Netincome————771,750771,750Gainduetoforeigncurrencytranslationadjustments———20,998—20,998(Loss)onnetinvestmenthedgecontracts———(15,823)—(15,823)(Loss)oncashflowhedgecontracts———(1,526)—(1,526)Recognitionofpriorservicecostandgains(losses)———1,393—1,393Amountofcashflowhedgereclassifiedfromothercomprehensiveincometonetincome———429—429Totalcomprehensiveincome777,221ImplementationofFIN48(seenoteJ)————(27,178)(27,178)ImplementationofSFASNo.158measurementprovisions(seenoteK)———(167)(1,641)(1,808)Cashdividendsdeclaredoncommonstock————(158,202)(158,202)Performancebasedrestrictedstockandotherstockawardsissued285285(285)———Amortizationofstockcompensationexpense——57,370——57,370StockoptionsrepurchasedbyTJX——(3,266)——(3,266)Issuanceofcommonstockunderstockincentiveplanandrelatedtaxeffect6,9686,968130,227——137,195Commonstockrepurchased(32,953)(32,953)(184,046)—(723,209)(940,208)Balance,January26,2008427,950427,950—(28,685)1,731,9802,131,245Comprehensiveincome:Netincome————880,617880,617(Loss)duetoforeigncurrencytranslationadjustments———(171,225)—(171,225)Gainonnetinvestmenthedgecontracts———68,816—68,816Recognitionofpriorservicecostandgains(losses)———(1,206)—(1,206)Recognitionofunfundedpostretirementliabilities———(86,158)—(86,158)Amountofcashflowhedgereclassifiedfromothercomprehensiveincometonetincome———677—677Totalcomprehensiveincome691,521Cashdividendsdeclaredoncommonstock————(183,694)(183,694)Performancebasedrestrictedstockandotherstockawardsissued170170(170)———Amortizationofstockcompensationexpense——51,229——51,229Issuanceofcommonstockuponconversionofconvertibledebt1,7171,71739,326——41,043StockoptionsrepurchasedbyTJX——(987)——(987)Issuanceofcommonstockunderstockincentiveplanandrelatedtaxeffect7,2697,269148,028——155,297Commonstockrepurchased(24,284)(24,284)(237,426)—(489,387)(751,097)Balance,January31,2009412,822$412,822$—$(217,781)$1,939,516$2,134,557Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-6TheTJXCompanies,Inc.NotestoConsolidatedFinancialStatementsA.SummaryofAccountingPoliciesBasisofPresentation:TheconsolidatedfinancialstatementsofTheTJXCompanies,Inc.(referredtoas“TJX”or“we”)includethefinancialstatementsofallofTJX’ssubsidiaries,allofwhicharewhollyowned.AllofTJX’sactivitiesareconductedwithinTJXoritssubsidiariesandareconsolidatedinthesefinancialstatements.Allintercompanytransactionshavebeeneliminatedinconsolidation.FiscalYear:TJX’sfiscalyearendsonthelastSaturdayinJanuary.ThefiscalyearendedJanuary31,2009(“fiscal2009”)included53weeks,whilethefiscalyearsendedJanuary26,2008(“fiscal2008”)andJanuary27,2007(“fiscal2007”)eachincluded52weeks.EarningsPerShare:Allearningspershareamountsdiscussedrefertodilutedearningspershareunlessotherwiseindicated.UseofEstimates:Thepreparationofthefinancialstatements,inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica,requiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,anddisclosureofcontingentliabilities,atthedateofthefinancialstatementsaswellasthereportedamountsofrevenuesandexpensesduringthereportingperiod.TJXconsidersthemoresignificantaccountingpoliciesthatinvolvemanagementestimatesandjudgmentstobethoserelatingtoinventoryvaluation,impairmentsoflong-livedassets,retirementobligations,sharebasedcompensation,casualtyinsurance,accountingfortaxes,reservesforComputerIntrusionrelatedcostsandfordiscontinuedoperations,andlosscontingencies.Actualamountscoulddifferfromthoseestimates,andsuchdifferencescouldbematerial.RevenueRecognition:TJXrecordsrevenueatthetimeofsaleandreceiptofmerchandisebythecustomer,netofareserveforestimatedreturns.Weestimatereturnsbaseduponourhistoricalexperience.Wedeferrecognitionofalayawaysaleanditsrelatedprofittotheaccountingperiodwhenthecustomerreceivesthelayawaymerchandise.Proceedsfromthesaleofstorecardsaswellasthevalueofstorecardsissuedtocustomersasaresultofareturnorexchange,aredeferreduntilthecustomersusethecardstoacquiremerchandise.Basedonhistoricalexperience,weestimatetheamountofstorecardsthatwillnotberedeemed(“breakage”)and,totheextentallowedbylocallaw,theseamountsareamortizedintoincomeovertheredemptionperiod.Revenuerecognizedfromstorecardbreakagewas$10.7millioninfiscal2009,$10.1millioninfiscal2008and$7.6millioninfiscal2007.ConsolidatedStatementsofIncomeClassifications:Costofsales,includingbuyingandoccupancycosts,includethecostofmerchandisesoldandgainsandlossesoninventoryandfuel-relatedderivativecontracts;storeoccupancycosts(includingrealestatetaxes,utilityandmaintenancecostsandfixedassetdepreciation);thecostsofoperatingourdistributioncenters;payroll,benefitsandtravelcostsdirectlyassociatedwithbuyinginventory;andsystemscostsrelatedtothebuyingandtrackingofinventory.Selling,generalandadministrativeexpensesincludestorepayrollandbenefitcosts;communicationcosts;creditandcheckexpenses;advertising;administrativeandfieldmanagementpayroll,benefitsandtravelcosts;corporateadministrativecostsanddepreciation;gainsandlossesonnon-inventoryrelatedforeigncurrencyexchangecontracts;andothermiscellaneousincomeandexpenseitems.CashandCashEquivalents:TJXgenerallyconsidershighlyliquidinvestmentswithamaturityofthreemonthsorlessatthedateofpurchasetobecashequivalents.Ourinvestmentsareprimarilyhigh-gradecommercialpaper,institutionalmoneymarketfundsandtimedepositswithmajorbanks.MerchandiseInventories:Inventoriesarestatedatthelowerofcostormarket.TJXusestheretailmethodforvaluinginventoriesonthefirst-infirst-outbasis.Wealmostexclusivelyutilizeapermanentmarkdownstrategyandlowerthecostvalueoftheinventorythatissubjecttomarkdownatthetimetheretailpricesareloweredinourstores.WeaccrueforinventoryobligationsatthetimeinventoryisshippedratherthanwhenreceivedandacceptedbyTJX.F-7AtJanuary31,2009andJanuary26,2008,in-transitinventoryincludedinmerchandiseinventorieswas$329.9millionand$362.9million,respectively.Comparableamountswerereflectedinaccountspayableatthosedates.CommonStockandEquity:Equitytransactionsconsistprimarilyoftherepurchaseofourcommonstockunderourstockrepurchaseprogramsandtheamortizationofexpenseandissuanceofcommonstockunderourstockincentiveplan.Underourstockrepurchaseprogramswerepurchaseourcommonstockontheopenmarket.Theparvalueofthesharesrepurchasedischargedtocommonstockwiththeexcessofthepurchasepriceoverparfirstchargedagainstanyavailableadditionalpaid-incapital(“APIC”)andthebalancechargedtoretainedearnings.Duetothehighvolumeofrepurchasesoverthepastseveralyears,wehavenoremainingbalanceinAPICinanyoftheyearspresented.Allsharesrepurchasedhavebeenretired.SharesissuedunderTJX’sstockincentiveplanareissuedfromauthorizedbutunissuedshares,andproceedsreceivedarerecordedbyincreasingcommonstockfortheparvalueoftheshareswiththeexcessoverparaddedtoAPIC.Incometaxbenefitsupontheexpensingofoptionsresultinthecreationofadeferredtaxasset,whileincometaxbenefitsduetotheexerciseofstockoptionsreducedeferredtaxassetstotheextentthatanassetfortherelatedgranthasbeencreated.AnytaxbenefitgreaterthanthedeferredtaxassetcreatedatthetimeofexpensingtheoptioniscreditedtoAPIC;anydeficienciesinthetaxbenefitisdebitedtoAPICtotheextenta‘pool’forsuchdeficienciesexists.Intheabsenceofapoolanydeficienciesarerealizedintherelatedperiods’statementsofincomethroughtheprovisionforincometaxes.Theexcessincometaxbenefits,ifany,areincludedincashflowsfromfinancingactivitiesinthestatementsofcashflows.Theparvalueofrestrictedstockawardsisalsoaddedtocommonstockwhenthestockisissued,generallyatgrantdate.ThefairvalueoftherestrictedstockawardsinexcessofparvalueisaddedtoAPICastheawardisamortizedintoearningsovertherelatedvestingperiod.ShareBasedCompensation:TJXaccountsforsharebasedcompensationundertheprovisionsofStatementofFinancialAccountingStandardsNo.123(revised2004)“Share-BasedPayment”(SFASNo.123(R)).ForpurposesofapplyingtheprovisionsofSFASNo.123(R),thefairvalueofeachoptiongrantedisestimatedonthedateofgrantusingtheBlackScholesoptionpricingmodel.SeeNoteHforadetaileddiscussionofsharebasedcompensation.Interest:TJX’sinterest(income)expense,netwasexpenseof$14.3millioninfiscal2009,incomeof$1.6millioninfiscal2008andexpenseof$15.6millioninfiscal2007.Interest(income)expenseispresentedasanetamount.TJXhadgrossinterestincomeof$22.2million,$40.7millionand$23.6millioninfiscal2009,2008and2007,respectively.Wecapitalizeinterestduringtheactiveconstructionperiodofmajorcapitalprojects.Capitalizedinterestisaddedtothecostoftherelatedassets.TJXcapitalizedinterestof$1.6millioninfiscal2009and$799,000infiscal2008.Nointerestwascapitalizedinfiscal2007.DebtdiscountandrelatedissueexpensesareamortizedtointerestexpenseusingtheeffectiveinterestmethodoverthelivesoftherelateddebtissuesortothefirstdatetheholdersofthedebtmayrequireTJXtorepurchasesuchdebt.DepreciationandAmortization:Forfinancialreportingpurposes,TJXprovidesfordepreciationandamortizationofpropertybytheuseofthestraight-linemethodovertheestimatedusefullivesoftheassets.Buildingsaredepreciatedover33years.Leaseholdcostsandimprovementsaregenerallyamortizedovertheirusefullifeorthecommittedleaseterm(typically10years),whicheverisshorter.Furniture,fixturesandequipmentaredepreciatedover3to10years.Depreciationandamortizationexpenseforpropertywas$398.0millionforfiscal2009,$364.2millionforfiscal2008and$347.0millionforfiscal2007.Amortizationexpenseforpropertyheldunderacapitalleasewas$2.2millioninfiscal2009,2008and2007.Maintenanceandrepairsarechargedtoexpenseasincurred.Significantcostsincurredforinternallydevelopedsoftwarearecapitalizedandamortizedover3to10years.Uponretirementorsale,thecostofdisposedassetsandtherelatedaccumulateddepreciationareeliminatedandanygainorlossisincludedinnetincome.Pre-openingcosts,includingrent,areexpensedasincurred.LeaseAccounting:TJXrecordsrentexpensewhenittakespossessionofastore,whichoccursbeforethecommencementoftheleaseterm,asspecifiedinthelease,andgenerally30to60dayspriortotheopeningofthestore.Thisresultsinanaccelerationofthecommencementofrentexpenseforeachlease,aswerecordrentexpenseduringthepre-openingperiod,butareductioninmonthlyrentexpense,asthetotalrentdueundertheleaseisamortizedoveragreaternumberofmonths.F-8GoodwillandTradename:Goodwillisprimarilytheexcessofthepurchasepricepaidoverthecarryingvalueoftheminorityinterestacquiredinfiscal1990inTJX’sformer83%-ownedsubsidiaryandrepresentsgoodwillassociatedwiththeT.J.Maxxchain,whichisincludedintheMarmaxxsegmentinallperiodspresented.Inaddition,goodwillincludestheexcessofcostovertheestimatedfairmarketvalueofthenetassetsofWinnersacquiredbyTJXinfiscal1991.Goodwilltotaled$71.8millionasofJanuary31,2009,$72.2millionasofJanuary26,2008and$71.9millionasofJanuary27,2007.Goodwillisconsideredtohaveanindefinitelifeandaccordinglyisnotamortized.ChangesingoodwillareattributabletotheeffectofexchangeratechangesonWinners’reportedgoodwill.Tradenameisthevalueassignedtothename“Marshalls,”acquiredbyTJXinfiscal1996aspartoftheacquisitionoftheMarshallschain.Thevalueofthetradenamewasdeterminedbythediscountedpresentvalueofassumedafter-taxroyaltypayments,offsetbyareductionfortheirpro-ratashareofnegativegoodwillacquired.TheMarshallstradenameiscarriedatavalueof$107.7million,andisconsideredtohaveanindefinitelife.TJXoccasionallyacquiresorlicensesothertrademarkstobeusedinconnectionwithprivatelabelmerchandise.Suchtrademarksareincludedinotherassetsandareamortizedtocostofsales,includingbuyingandoccupancycosts,overtheirusefullife,generallyfrom7to10years.Trademarksandtherelatedamortizationareincludedintheoperatingsegmentforwhichtheywereacquired.ImpairmentofLong-LivedAssets,GoodwillandTradename:TJXevaluatesitslong-livedassetsandassetswithindefinitelives(otherthanGoodwillandTradename)forindicatorsofimpairmentwhenevereventsorchangesincircumstancesindicatetheircarryingamountsmaynotberecoverable,andatleastannuallyinthefourthquarterofafiscalyear.Theevaluationforlong-livedassetsisperformedatthelowestlevelofidentifiablecashflows,whichisgenerallyattheindividualstorelevel.Ifindicatorsofimpairmentareidentified,anundiscountedcashflowanalysisisperformedtodetermineifanimpairmentexists.Thestorebystoreevaluationsdidnotindicateanyrecoverabilityissues(foranyofourcontinuingoperations)duringthepastthreefiscalyears.Animpairmentexistswhentheundiscountedcashflowofanassetorassetgroupislessthanthecarryingcostofthatassetorassetgroup.GoodwillistestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountofGoodwillmayexceeditsfairvalueandatleastannuallyinthefourthquarterofafiscalyear,bycomparingthecarryingvalueoftherelatedreportingunittoitsfairvalue.Animpairmentexistswhenthisanalysisshowsthatthefairvalueislessthanitscarryingcost.Thefairvalueofourreportingunits,usingtypicalvaluationmodelssuchasthediscountedcashflowmethod,isconsiderablyhigherthanthebookvaluesandnoimpairmenthasoccurredinthelastthreefiscalyears.TradenameisalsotestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountoftheTradenamemayexceeditsfairvalueandatleastannuallyinthefourthquarterofafiscalyear.Testingisperformedbycomparingthediscountedpresentvalueofassumedafter-taxroyaltypaymentstothecarryingvalueoftheTradename.Noimpairmenthasoccurredinthelastthreefiscalyears.AdvertisingCosts:TJXexpensesadvertisingcostsasincurred.Advertisingexpensewas$254.0million,$255.0millionand$221.0millionforfiscal2009,2008and2007,respectively.AccumulatedOtherComprehensiveIncome(Loss):TJX’sforeignassetsandliabilitiesaretranslatedatthefiscalyearendexchangerate.Activityoftheforeignoperationsthataffectsthestatementsofincomeandcashflowsistranslatedattheaverageexchangeratesprevailingduringthefiscalyear.Thetranslationadjustmentsassociatedwiththeforeignoperationsareincludedinshareholders’equityasacomponentofaccumulatedothercomprehensiveincome.Cumulativeforeigncurrencytranslationadjustmentsincludedinshareholders’equityamountedtoalossof$152.9million,netofrelatedtaxeffectof$2.6million,asofJanuary31,2009;againof$17.8million,netofrelatedtaxeffectof$23.7million,asofJanuary26,2008;andalossof$3.2million,netofrelatedtaxeffectof$15.8million,asofJanuary27,2007.F-9TJXentersintofinancialinstrumentstomanageourcostofborrowingandtomanageourexposuretochangesinforeigncurrencyexchangerates.TJXrecognizesallderivativeinstrumentsaseitherassetsorliabilitiesinthestatementsoffinancialpositionandmeasuresthoseinstrumentsatfairvalue.Changestothefairvalueofderivativecontractsthatdonotqualifyforhedgeaccountingarereportedinearningsintheperiodofthechange.Forderivativesthatqualifyforhedgeaccounting,changesinthefairvalueofthederivativesareeitherrecordedinshareholders’equityasacomponentofothercomprehensiveincomeorarerecognizedcurrentlyinearnings,alongwithanoffsettingadjustmentagainstthebasisoftheitembeinghedged.Cumulativegainsandlossesonderivativesthathedgedournetinvestmentinforeignoperationsanddeferredgainsandlossesoncashflowhedgesthathavebeenrecordedinothercomprehensiveincomeamountedtoagainof$27.3million,netofrelatedtaxeffectsof$18.2millionatJanuary31,2009;alossof$42.1million,netofrelatedtaxeffectsof$28.1millionatJanuary26,2008;andalossof$25.2million,netofrelatedtaxeffectsof$16.8millionatJanuary27,2007.TherequirementtorecognizethefundedstatusofTJX’spostretirementbenefitplansinaccordancewithSFASNo.158(discussedinNoteK)resultedinalossadjustmenttoaccumulatedothercomprehensiveincomeof$92.2million,netofrelatedtaxeffectsof$61.5millionatJanuary31,2009.ThecumulativelossadjustmentatJanuary26,2008was$4.4million,netofrelatedtaxeffectsof$3.7millionandwas$5.6million,netofrelatedtaxeffectsof$3.7millionatJanuary27,2007.LossContingencies:TJXrecordsareserveforlosscontingencieswhenitisbothprobablethatalosshasbeenincurredandtheamountofthelossisreasonablyestimable.TJXreviewspendinglitigationandothercontingenciesatleastquarterlyandadjuststhereserveforsuchcontingenciesforchangesinprobableandreasonablyestimablelosses.TJXincludesanestimateforrelatedlegalcostsatthetimesuchcostsarebothprobableandreasonablyestimable.NewAccountingStandards:InDecember2008,theFinancialAccountingStandardsBoard,orFASB,issuedFASBStaffPosition(FSP)No.FAS132(R)-1Employers’DisclosuresaboutPostretirementBenefitPlanAssetswhichiseffectiveforfiscalyearsendingafterDecember15,2009.ThisFSPrequiresadditionaldisclosuressuchastheinvestmentallocationdecisionmakingprocess;thefairvalueofeachmajorcategoryofplanassets;inputsandvaluationtechniquesusedtomeasurethefairvalueofplanassetsandsignificantconcentrationsofriskwithinplanassets.WeareintheprocessofassessingtheimpactofFSPNo.FAS132(R)-1onourfinancialstatementdisclosures.InDecember2007,theFASBissuedSFASNo.141(revised2007)“BusinessCombinations”(SFAS141R).SFAS141Restablishesprinciplesandrequirementsforhowtheacquirerofabusinessrecognizesandmeasuresinitsfinancialstatementstheidentifiableassetsacquired,theliabilitiesassumed,andanynoncontrollinginterestintheacquiree.SFAS141Ralsoprovidesguidanceforrecognizingandmeasuringthegoodwillacquiredinbusinesscombinationsandwhatinformationtodisclosetoenableusersofthefinancialstatementstoevaluatethenatureandfinancialeffectsofthebusinesscombination.SFAS141RiseffectiveforfinancialstatementsissuedforfiscalyearsbeginningafterDecember15,2008andistobeappliedprospectively.TJXwillconsiderthepotentialimpact,ifany,oftheadoptionofSFAS141Ronitsfuturebusinesscombinations.InApril2008,theFASBissuedFSP142-3,whichamendsthefactorsthatshouldbeconsideredindevelopingrenewalorextensionassumptionsusedtodeterminetheusefullifeofarecognizedintangible.FSP142-3iseffectiveforfinancialstatementsissuedforfiscalyearsbeginningafterDecember15,2008,andinterimperiodswithinthosefiscalyears.Asthisguidanceappliesonlytoassetswemayacquireinthefuture,wearenotabletopredictitsimpact,ifany,onourconsolidatedfinancialstatements.AtitsJune2008meetingtheFASBratifiedEmergingIssuesTaskForce(EITF)issue08-03:AccountingbyLesseesforMaintenanceDeposits,whichclarifieshowalesseeshallaccountforamaintenancedepositunderanarrangementaccountedforasalease.EITF08-03iseffectiveforusinthefirstquarteroffiscal2010.WeareintheprocessofassessingtheimpactofEITF08-03anddonotbelieveitwillhaveamaterialimpactonourresultsofoperationsorfinancialcondition.InMarch2008,theFASBissuedSFAS161,whichrequiresdisclosuresofhowandwhyanentityusesderivativeinstruments,howderivativeinstrumentsandrelatedhedgeditemsareaccountedforandhowderivativeinstrumentsF-10andrelatedhedgeditemsaffectanentity’sfinancialposition,financialperformance,andcashflows.SFAS161iseffectiveforTJXinthefirstquarteroffiscal2010.WeareintheprocessofassessingtheimpactofSFAS161onourfinancialstatementdisclosures.Reclassifications:ForcomparativepurposeswereclassifiedactivityontheConsolidatedStatementsofCashFlowsinfiscal2008and2007for“Proceeds(payments)tosettlenetinvestmenthedges”fromoperatingactivitiestoinvestingactivities.Thisreclassificationhadnoimpactonnetincomeortotalcashflowsaspreviouslyreported.B.ProvisionforComputerIntrusionrelatedcostsTJXhasincurredlossesasaresultofanunauthorizedintrusionorintrusions(theintrusionorintrusions,collectively,the“ComputerIntrusion”)intoportionsofitscomputersystem,whichwasdiscoveredlateinfiscal2007andinwhichTJXbelievescustomerdatawerestolen.Duringthefirstsixmonthsoffiscal2008,weexpensedpre-taxcostsof$37.8millionforcostsweincurredrelatedtotheComputerIntrusion.Inthesecondquarteroffiscal2008,weestablishedapre-taxreserveof$178.1milliontoreflectourestimationofprobablelossesinaccordancewithgenerallyacceptedaccountingprincipleswithrespecttotheComputerIntrusionandrecordedapre-taxchargeinthatamount.WereducedtheProvisionforComputerIntrusionrelatedcostsby$30.5millioninfiscal2009and$18.9millioninfiscal2008asaresultofnegotiations,settlements,insuranceproceedsandadjustmentsinourestimatedlosses.Ourreserveof$42.2millionatJanuary31,2009includesourcurrentestimationoftotalpotentialcashliabilities,frompendinglitigation,proceedings,investigationsandotherclaims,aswellaslegal,ongoingmonitoringandothercostsandexpenses,arisingfromtheComputerIntrusion.Asanestimate,ourreserveissubjecttouncertainty,andouractualcostsmayvaryfromourcurrentestimateandsuchvariationsmaybematerial.Wemaydecreaseorincreasetheamountofourreservetoadjustfordevelopmentsinthecourseandresolutionoflitigation,claimsandinvestigationsandrelatedexpenses,insuranceproceedsandchangesinourestimates.C.DiscontinuedOperationsSaleofBob’sStores:Infiscal2009,TJXsoldBob’sStoresandrecordedasacomponentofdiscontinuedoperationsalossondisposal(includingexpensesrelatingtothesale)of$19.0million,netoftaxbenefitsof$13.0million.ThenetcarryingvalueofBob’sStoresassetssoldwas$33million,whichconsistedprimarilyofmerchandiseinventoryof$56million,offsetbymerchandisepayableof$21million.Thelossondisposalreflectssalesproceedsof$7.2millionaswellasexpensesrelatingtothesaleof$5.8million.TJXremainscontingentlyliableonseveraloftheBob’sStoresleaseswhicharediscussedinNoteMtotheconsolidatedfinancialstatements.TJXalsoreclassifiedtheoperatingresultsofBob’sStoresforallperiodspriortothesaleasacomponentofdiscontinuedoperations.Thefollowingtablepresentsthenetsales,segmentprofit(loss)andafter-taxlossfromoperationsreclassifiedtodiscontinuedoperationsforallperiodspriortothesaleofBob’sStores:Inthousands200920082007FiscalYearEndedJanuaryNetsales$148,040$310,400$300,624Segmentprofit(loss)(25,524)(17,398)(17,360)After-taxlossfromoperations(15,314)(10,682)(10,416)A.J.WrightStoreClosings:Duringthefourthquarteroffiscal2007,managementdevelopedaplantoclose34underperformingA.J.Wrightstores.TheplanwasapprovedbytheExecutiveCommitteeoftheBoardofDirectorsonNovember27,2006,andvirtuallyallofthestoreswereclosedasoftheendoffiscal2007.Theafter-taxcostofthestoreclosingsof$38.1million,or$0.08pershare,wasrecordedasalossondisposalofdiscontinuedoperationsinthefourthquarteroffiscal2007.TJXalsoclassifiedtheoperatingincome(loss)ofthe34closedstoresforfiscal2007,aswellasallpriorperiods,asacomponentofdiscontinuedoperations.Theoperatinglossoftheclosedstoresforfiscal2007includedindiscontinuedoperationswas$1.0million.F-11Thetablebelowsummarizesthepre-taxandafter-taxlossfromalldiscontinuedoperationsforthelastthreefiscalyears:Inthousands200920082007FiscalYearEndedJanuary(Loss)fromdiscontinuedoperationsbeforeprovisionforincometaxes$(56,980)$(17,398)$(81,888)Taxbenefits22,7116,71632,755(Loss)fromdiscontinuedoperations,netofincometaxes$(34,269)$(10,682)$(49,133)D.Long-TermDebtandCreditLinesThetablebelowpresentslong-termdebt,exclusiveofcurrentinstallments,asofJanuary31,2009andJanuary26,2008.Allamountsarenetofunamortizeddebtdiscounts.CapitalleaseobligationsareseparatelypresentedinNoteG.InthousandsJanuary31,2009January26,2008Generalcorporatedebt:7.45%unsecurednotes,maturingDecember15,2009(effectiveinterestrateof7.50%afterreductionofunamortizeddebtdiscountof$119infiscal2008)$—$199,881Marketvalueadjustmenttodebthedgedwithinterestrateswap—1,215C$235termcreditfacilitydueJanuary11,2010(interestrateCanadianDollarBanker’sAcceptancerateplus0.35%)—233,120Totalgeneralcorporatedebt—434,216Subordinateddebt:ZerocouponconvertiblesubordinatednotesdueFebruary13,2021(netofreductionofunamortizeddebtdiscountof$99,360and$118,625infiscal2009and2008,respectively)365,583398,870Totalsubordinateddebt365,583398,870Long-termdebt,exclusiveofcurrentinstallments$365,583$833,086Theaggregatematuritiesoflong-termdebt,exclusiveofcurrentinstallmentsatJanuary31,2009areasfollows:InthousandsLong-TermDebtFiscalYear2011$—2012—2013—2014396,529Lateryears—Lessamountrepresentingunamortizeddebtdiscount(30,946)Aggregatematuritiesoflong-termdebt,exclusiveofcurrentinstallments$365,583Theabovematuritytableassumesthatallholdersofthezerocouponconvertiblesubordinatednotesexercisetheirputoptionsinfiscal2014.Anyofthenotesonwhichputoptionsarenotexercised,redeemedorconvertedwillmatureinfiscal2022.InJanuary2006,TJXenteredintoaC$235.0milliontermcreditfacility(throughourCanadiansubsidiary,Winners)dueinJanuary2010.ThisdebtisguaranteedbyTJX.InterestispayableonborrowingsunderthisfacilityatratesequaltoorlessthanCanadianprimerate.Thevariablerateonthisfacilitywas1.69%atJanuary31,2009.TheproceedswereusedtofundtherepatriationofearningsfromWinnersaswellasothergeneralcorporatepurposesofWinners.InFebruary2001,TJXissued$517.5millionzerocouponconvertiblesubordinatednotesdueinFebruary2021andraisedgrossproceedsof$347.6million.Theissuepriceofthenotesrepresentedayieldtomaturityof2%peryear.DuetothefirstputoptiononFebruary13,2002,weamortizedthedebtdiscountassuminga1.5%yieldforfiscal2002.F-12ThenotesaresubordinatedtoallexistingandfutureseniorindebtednessofTJX.Theoutstandingnotesareconvertibleinto15.2millionsharesofcommonstockofTJXifthesalepriceofourcommonstockreachesspecifiedthresholds,ifthecreditratingofthenotesisbelowinvestmentgrade,ifthenotesarecalledforredemptionorifcertainspecifiedcorporatetransactionsoccur.EachholderofthenoteshastherighttorequireustopurchasethenotesonFebruary13,2013atoriginalpurchasepriceplusaccruedoriginalissuediscountforatotalof$396.5millionforallnotes.Wemaypaythepurchasepriceincash,TJXstockoracombinationofthetwo.Iftheholdersexercisetheirputoptions,weexpecttofundthepaymentwithcash,financingfromourshort-termcreditfacility,newlong-termborrowingsoracombinationthereof.Atotalof52,552noteswereconvertedintocommonsharesinfiscal2009.ThereweretwonotesputtoTJXonFebruary13,2007andthreeonFebruary13,2004.Inaddition,ifachangeincontrolofTJXoccursonorbeforeFebruary13,2013,eachholdermayrequireTJXtopurchaseforcashalloraportionofsuchholder’snotes.AsofFebruary13,2007TJXcanredeemforcashall,oraportionof,thenotesatanytimefortheoriginalpurchasepriceplusaccruedoriginalissuediscount.Includedincurrentinstallmentsoflong-termdebtarethefairvalueofinterestrateswapsof$1.6million;$199.9millionof7.45%unsecurednotes(netofdebtdiscountof$55,000)whichmatureinDecember2009andatermcreditfacilityof$191.3million(C$235.0million)whichmaturesinJanuary2010.TJXhasa$500millionrevolvingcreditfacilitymaturingMay2010anda$500millionrevolvingcreditfacilitymaturingMay2011.Theseagreementshavenocompensatingbalancerequirementsandhavevariouscovenantsincludingarequirementofaspecifiedratioofdebttoearnings.TheseagreementsserveasbackuptoTJX’scommercialpaperprogram.AsofJanuary31,2009,therewerenooutstandingamountsunderourcreditfacilities,andthemaximumamountofourU.S.short-termborrowingsoutstandingwas$222.0millionduringfiscal2009.TheweightedaverageinterestrateonourU.S.short-termborrowingswas3.92%infiscal2009.Wedidnotborrowunderthesecreditfacilitiesduringfiscal2008,andthemaximumamountofourU.S.short-termborrowingsoutstandingwas$204.5millionduringfiscal2007.AsofJanuary31,2009andJanuary26,2008,Winnershadtwocreditlines,oneforC$10millionforoperatingexpensesandoneC$10millionletterofcreditfacility.Winnersdidnotborrowunderthecreditlineforoperatingexpensesinfiscal2009.ThemaximumamountoutstandingunderWinners’CanadiancreditlineforoperatingexpenseswasC$5.7millioninfiscal2008andC$3.8millioninfiscal2007.Therewerenoamountsoutstandingonthislineattheendoffiscal2009orfiscal2008.AsofJanuary31,2009,T.K.Maxxhadacreditlineof£20million.Themaximumamountoutstandingunderthislinewas£6.1millioninfiscal2009and£16.4millioninfiscal2008.Therewerenooutstandingborrowingsonthiscreditlineattheendoffiscal2009orfiscal2008.E.FinancialInstrumentsTJXentersintofinancialinstrumentstomanageitscostofborrowingandtomanageitsexposuretochangesinfuelcostsandforeigncurrencyexchangerates.InterestRateContracts:InDecember1999,priortotheissuanceof$200millionten-yearnotes,TJXenteredintoarate-lockagreementtohedgetheunderlyingtreasuryrateofthenotes.Thecostofthisagreementisbeingamortizedtointerestexpenseoverthetermofthenotesandresultsinaneffectivefixedrateof7.60%onthesenotes.Duringfiscal2004,TJXenteredintointerestrateswapson$100millionofthe$200millionten-yearnoteseffectivelyconvertingtheinterestonthatportionoftheunsecurednotesfromfixedtoafloatingrateofinterestindexedtothesix-monthLIBORrate.Thematuritydatesoftheinterestrateswapsarethesameasthematuritydateoftheunderlyingdebt.Undertheseswaps,TJXpaysaspecifiedvariableinterestrateandreceivesthefixedrateapplicabletotheunderlyingdebt.Theinterestincome/expenseontheswapsisaccruedasearnedandrecordedasanadjustmenttotheinterestexpenseaccruedonthefixed-ratedebt.Theinterestrateswapsaredesignatedasfairvaluehedgesoftheunderlyingdebt.Thefairvalueofthecontracts,excludingthenetinterestaccrual,amountedtoanassetof$1.6millionasofJanuary31,2009,anassetof$1.2millionatJanuary26,2008,andaliabilityof$4.4million,asofJanuary27,2007.Thevaluationoftheswapsresultsinanoffsettingfairvalueadjustmenttothedebthedged.Accordingly,currentinstallmentsoflong-termdebthasbeenincreasedby$1.6millioninfiscal2009.Thelong-termdebthasbeenincreasedby$1.2millioninfiscal2008andreducedby$4.4millioninfiscal2007.TheaverageeffectiveinterestrateonF-13$100millionofthe7.45%unsecurednotes,inclusiveoftheeffectofhedgingactivity,wasapproximately6.54%infiscal2009,8.77%infiscal2008and9.42%infiscal2007.ConcurrentwiththeissuanceoftheC$235millionthree-yearnoteinfiscal2006,TJXenteredaninterestrateswapontheprincipalamountofthenoteeffectivelyconvertingtheinterestonthenotefromfloatingtoafixedrate.InJanuary2009thisinterestrateswapsettled,oneyearbeforethematuritydateoftheunderlyingdebtwhichwasextendedoneyeartoJanuary2010.UnderthisswapTJXpaidaspecifiedfixedinterestrateandreceivedthefloatingrateapplicabletotheunderlyingdebt.Theinterestincome/expenseontheswapwasaccruedasearnedandrecordedasanadjustmenttotheinterestexpenseaccruedonthefloating-ratedebt.Theinterestrateswapwasdesignatedasacashflowhedgeoftheunderlyingdebt.Thefairvalueoftheinterestrateswap,excludingthenetinterestaccrual,amountedtoanassetof$1.1million(C$1.1million)asofJanuary26,2008andanassetof$699,000(C$825,000)asofJanuary27,2007.Thevaluationoftheswapresultedinanadjustmenttoothercomprehensiveincomeofasimilaramount.Theaverageeffectiveinterestrateonthenote,inclusiveoftheeffectofhedgingactivity,wasapproximately4.50%inbothfiscal2009and2008.DieselFuelContracts:Duringfiscal2009,TJXenteredintothreeagreementstohedgeapproximately30%ofitsnotionaldieselfuelrequirementsforfiscal2010,basedonthedieselfuelconsumedbyindependentfreightcarrierstransportingtheCompany’sinventory.ThesecarrierschargeTJXamileagesurchargefordieselfuelpriceincreasesasincurredbythefreightcarrier.Thehedgeagreementsaredesignedtomitigatethevolatilityofdieselfuelpricing(andtheresultingpermilesurchargespayablebyTJX)bysettingafixedpricepergallonfortheyear.TJXelectednottoapplyhedgeaccountingrulestothesecontracts.Thechangeinthemarketvalueofthehedgeagreementsresultedina$4.9millionlossinfiscal2009,whichisreflectedincostofsales,includingbuyingandoccupancycosts.AllofthedieselfuelhedgeagreementsexpireinFebruary2010.ForeignCurrencyContracts:TJXentersintoforwardforeigncurrencyexchangecontractstoobtaineconomichedgesonfirmU.S.dollarandEurodenominatedmerchandisepurchasecommitmentsmadebyitsforeignsubsidiaries,T.K.Maxx(UnitedKingdom,IrelandandGermany)andWinners(Canada).Thesecommitmentsaretypicallysixmonthsorlessinduration.ThecontractsoutstandingatJanuary31,2009coveredcertaincommitmentsforthefirstquarteroffiscal2010.TJXelectednottoapplyhedgeaccountingrulestothesecontracts.Thechangeinthefairvalueofthesecontractsresultedinalossof$2.3millioninfiscal2009,incomeof$6.6millioninfiscal2008andincomeof$1.2millioninfiscal2007andisincludedinearningsasacomponentofcostofsales,includingbuyingandoccupancycosts.Effectiveinthefourthquarteroffiscal2009,TJXnolongerenteredintocontractstohedgeitsnetinvestmentsinforeignsubsidiariesandsettledallexistingcontracts.Asaresult,therewerenonetinvestmentcontractsasofJanuary31,2009.Untilthefourthquarteroffiscal2009,TJXenteredintoforeigncurrencyforwardandswapcontractsinbothCanadiandollarsandBritishpoundsterlingandaccountedforthemashedgesofthenetinvestmentinandbetweenforeignsubsidiariesorcashflowhedgesofWinnerslong-termintercompanydebt.TJXappliedhedgeaccountingtothesehedgecontractsofourinvestmentinforeignsubsidiaries,andchangesinfairvalueofthesecontracts,aswellasgainsandlossesuponsettlement,wererecordedinaccumulatedothercomprehensiveincome,offsettingchangesinthecumulativeforeigntranslationadjustmentsoftheforeignsubsidiaries.Thechangeinfairvalueofthecontractsdesignatedashedgesoftheinvestmentinforeignsubsidiariesresultedinagainof$68.8million,netofincometaxes,infiscal2009,alossof$15.8million,netofincometaxes,infiscal2008,andalossof$5.6million,netofincometaxes,infiscal2007.Thechangeinthecumulativeforeigncurrencytranslationadjustmentresultedinagainof$171.2million,netofincometaxes,infiscal2009,againof$21.0million,netofincometaxes,infiscal2008,andagainof$20.4million,netofincometaxes,infiscal2007.Amountsincludedinothercomprehensiveincomerelatingtocashflowhedgeswerereclassifiedtoearningsastheunderlyingexposureonthedebthadanimpactonearnings.Thenetamountreclassifiedfromothercomprehensiveincometotheincomestatementinfiscal2009relatedtocashflowhedgeswas$677,368,netofincometaxes.Thenetlossrecognizedinfiscal2008relatedtocashflowhedgeswas$1.1million,netofincometaxes.Thenetlossrecognizedinfiscal2007relatedtoF-14cashflowhedgeswas$5.0million,netofincometaxes,whichwasoffsetbyanon-taxablegainof$4.6million,relatedtotheunderlyingexposure.OnJuly20,2006TJXdeterminedthattheC$355millionintercompanyloan,duefromWinnerstoTJX,wouldnotbepayableintheforeseeablefutureduetothecapitalandcashflowneedsofWinners.Asaresult,thatintercompanyloanandtherelatedcurrencyswapthathadbeendesignatedasacashflowhedgeoflong-termintercompanydebtwerere-designatedasanetinvestmentinaforeignoperation.Accordingly,foreigncurrencygainsorlossesontheintercompanyloanandgainsorlossesontherelatedcurrencyswapfromre-designationdatetodateofsettlementinthefourthquarteroffiscal2009,totheextenteffective,havebeenrecordedinothercomprehensiveincome.Theineffectiveportionofthecurrencyswapresultedinpre-taxchargestotheincomestatementof$2.2millioninfiscal2009,$9.1millioninfiscal2008and$2.9millioninfiscal2007.TJXalsoentersintoderivativecontracts,generallydesignatedasfairvaluehedges,tohedgeintercompanydebtandintercompanyinterestpayable.Thechangesinfairvalueofthesecontractsarerecordedinthestatementsofincomeandareoffsetbymarkingtheunderlyingitemtofairvalueinthesameperiod.Uponsettlement,therealizedgainsandlossesonthesecontractsareoffsetbytherealizedgainsandlossesoftheunderlyingiteminthestatementofincome.Thenetimpactontheincomestatementofhedgingactivityrelatedtotheseintercompanypayableswasimmaterial.Thevalueofforeigncurrencyexchangecontractsrelatingtoinventorycommitmentsisreportedinearningsasacomponentofcostofsales,includingbuyingandoccupancycosts.Theincomestatementimpactofallotherforeigncurrencyderivativecontractsandunderlyingexposuresisreportedasacomponentofselling,generalandadmin-istrativeexpenses.FollowingisasummaryofTJX’sderivativefinancialinstrumentsandrelatedfairvaluesoutstandingatJanuary31,2009:CurrencyamountsinthousandsPayReceiveBlendedContractRateFairValueAsset(Liability)Fairvaluehedges:Interestrateswapfixedtofloatingonnotionalof$50,000LIBOR+4.17%7.45%N/AUS$766Interestrateswapfixedtofloatingonnotionalof$50,000LIBOR+3.42%7.45%N/AUS$1,093Intercompanybalancehedges,primarilyshort-termdebtandrelatedinterestC$37,795US$33,8260.8950US$3,051US$114,990C$143,0510.8038US$1,300US$39,997S30,9361.2929US$(370)Hedgeaccountingnotelected:DieselcontracthedgesFixedon750KgalFloaton750KgalN/AUS$(4,931)MerchandisepurchasecommitmenthedgesC$206,109US$172,5000.8369US$4,837C$4,828S2,9500.6110US$(149)£19,394US$28,0001.4437US$(204)£7,273S8,0001.1000US$(343)US$441S3271.3486US$(23)US$5,027F-15Thefairvalueofthederivativesisclassifiedasassetsorliabilities,currentornon-current,baseduponvaluationresultsandsettlementdatesoftheindividualcontracts.Followingarethebalancesheetclassificationsofthefairvalueofourderivatives:InthousandsJanuary31,2009January26,2008Currentassets$11,772$53,094Non-currentassets——Currentliabilities(6,745)(1,267)Non-currentliabilities—(143,091)Netfairvalueasset(liability)$5,027$(91,264)TJX’sforwardforeigncurrencyexchangeandswapcontractsrequireTJXtomakepaymentsofcertainforeigncurrenciesorU.S.dollarsforreceiptofCanadiandollars,U.S.dollarsorEuros.AllofthecontractsoutstandingatJanuary31,2009matureduringfiscal2010.Thecounterpartiestotheforwardexchangecontractsandswapagreementsaremajorinternationalfinancialinstitutionsandthecontractscontainrightsofoffset,whichminimizeourexposuretocreditlossintheeventofnonperformancebyoneofthecounterparties.Wedonotrequirecounterpartiestomaintaincollateralforthesecontracts.Weperiodicallymonitorourpositionandthecreditratingsofthecounterpartiesanddonotanticipatelossesresultingfromthenonperformanceoftheseinstitutions.F.DisclosuresaboutFairValueofFinancialInstrumentsInSeptember2006,theFASBissuedStatementofFinancialAccountingStandardNo.157,“FairValueMeasurements”(SFAS157).SFAS157establishesacommondefinitionforfairvaluetobeappliedtoU.S.GAAPrequiringuseoffairvalue,establishesaframeworkformeasuringfairvalue,andexpandsdisclosureaboutsuchfairvaluemeasurements.SFAS157waseffectiveforfinancialassetsandfinancialliabilitiesforfiscalyearsbeginningafterNovember15,2007.IssuedinFebruary2008,FSP157-1“ApplicationofFASBStatementNo.157toFASBStatementNo.13andOtherAccountingPronouncementsThatAddressFairValueMeasurementsforPurposesofLeaseClassificationorMeasurementunderStatement13”removedleasingtransactionsaccountedforunderFASBStatementNo.13andrelatedguidancefromthescopeofSFAS157.FSP157-2“PartialDeferraloftheEffectiveDateofStatement157,”deferredtheeffectivedateofSFAS157forallnonfinancialassetsandnonfinancialliabilitiesexceptforthosethatarerecognizedordisclosedatfairvalueonarecurringbasis(atleastannually)tofiscalyearsbeginningafterNovember15,2008.TheimplementationofSFAS157forfinancialassetsandfinancialliabilities,effectiveJanuary27,2008forTJX,didnothaveamaterialimpactonitsconsolidatedfinancialpositionandresultsofoperations.TJXiscurrentlyassessingtheimpactofSFAS157fornonfinancialassetsandnonfinancialliabilitiesonitsconsolidatedfinancialpositionandresultsofoperations.SFAS157definesfairvalueasthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate(exitprice).SFAS157classifiestheinputsusedtomeasurefairvalueintothefollowinghierarchy:Level1:Unadjustedquotedpricesinactivemarketsforidenticalassetsorliabilities.Level2:Unadjustedquotedpricesinactivemarketsforsimilarassetsorliabilities,orunadjustedquotedpricesforidenticalorsimilarassetsorliabilitiesinmarketsthatarenotactive,orinputsotherthanquotedpricesthatareobservablefortheassetorliability.Level3:Unobservableinputsfortheassetorliability.Financialassetsandliabilitiesareclassifiedintheirentiretybasedonthelowestlevelofinputthatissignificanttothefairvaluemeasurement.TJXhasdeterminedthatitsfinancialassetsandliabilitiesatJanuary31,2009weregenerallyF-16classifiedwithinlevel1orlevel2inthefairvaluehierarchy.ThefollowingtablesetsforthTJX’sfinancialassetsandliabilitiesthatwereaccountedforatfairvalueonarecurringbasis:InthousandsAsofJanuary31,2009Level1Assets:Cashequivalents$161,592Executivesavingsplanassets40,636Level2Assets:Foreigncurrencyexchangecontracthedges$9,534Interestrateswaps1,859Liabilities:Foreigncurrencyexchangecontracthedges$1,435Dieselfuelcontracthedges4,931Thefairvalueofourgeneralcorporatedebt,includingcurrentinstallments,isestimatedbyobtainingmarketvaluequotesgiventhetradinglevelsofotherbondsofthesamegeneralissuertypeandmarketperceivedcreditquality.Thefairvalueofthezerocouponconvertiblesubordinatednotesisestimatedbyobtainingmarketquotes.Thefairvalueofthecurrentinstallmentsoflong-termdebtatJanuary31,2009is$399.9millionversusacarryingvalueof$392.9million.ThefairvalueofthezerocouponconvertiblesubordinatednotesasofJanuary31,2009,is$358.3millionversusacarryingvalueof$365.6million.Theseestimatesdonotnecessarilyreflectprovisionsorrestrictionsinthevariousdebtagreementsthatmightaffectourabilitytosettletheseobligations.Asaresultofitsinternationaloperatingandfinancingactivities,TJXisexposedtomarketrisksfromchangesininterestandforeigncurrencyexchangerates,whichmayadverselyaffectitsoperatingresultsandfinancialposition.Whenitdeemsappropriate,TJXminimizesrisksfrominterestandforeigncurrencyexchangeratefluctuationsthroughtheuseofderivativefinancialinstruments.DerivativefinancialinstrumentsareusedtomanageriskandarenotusedfortradingorotherspeculativepurposesandTJXdoesnotuseleveragedderivativefinancialinstruments.Theforwardforeigncurrencyexchangecontractsandinterestrateswapsarevaluedusingbrokerquotationswhichincludeobservablemarketinformation.TJXmakesnoadjustmentstoquotesorpricesobtainedfrombrokersorpricingservicesbutdoesassessthecreditriskofcounterpartiesandwilladjustfinalvaluationswhenappropriate.Whereindependentpricingservicesprovidefairvalues,TJXobtainedanunderstandingofthemethodsusedinpricing.Assuch,thesederivativeinstrumentsareclassifiedwithinlevel2.InFebruary2007,theFASBissuedSFAS159,“TheFairValueOptionforFinancialAssetsandFinancialLiabilities—includinganamendmentofFASBStatementNo.115”(SFAS159).SFAS159providescompanieswithanoptiontoreportselectedfinancialassetsandliabilitiesatfairvalueandestablishespresentationanddisclosurerequirementsdesignedtofacilitatecomparisonsbetweencompaniesthatchoosedifferentfairvaluemeasurementattributesforsimilartypesofassetsandliabilities.SFAS159iseffectiveforfiscalyearsbeginningafterNovember15,2007,andinterimperiodswithinthoseyearsandwasadoptedbyTJXinthefirstquarteroffiscal2009.Uponadoption,TJXelectednottoadjustanyfinancialassetsorliabilitiesnotpreviouslyrecordedatfairvalueandtherefore,theadoptionofSFAS159didnothaveanimpactonTJX’sconsolidatedbalancesheetorstatementofoperations.G.CommitmentsTJXiscommittedunderlong-termleasesrelatedtoitscontinuingoperationsfortherentalofrealestateandfixturesandequipment.Mostofourleasesarestoreoperatingleaseswithaten-yearinitialtermandoptionstoextendforoneormorefive-yearperiods.CertainMarshallsleases,acquiredinfiscal1996,hadthenremainingtermsranginguptotwenty-fiveyears.T.K.Maxxleasesaregenerallyforfifteentotwenty-fiveyearswithten-yearkick-outoptions.Manyofourleasescontainescalationclausesandearlyterminationpenalties.Inaddition,wearegenerallyrequiredtopayinsurance,realestatetaxesandotheroperatingexpensesincluding,insomecases,rentalsbasedonapercentageofF-17sales.Theseexpensesintheaggregatewereapproximatelyone-thirdofthetotalminimumrentforthefiscalyearendedJanuary31,2009,thefiscalyearendedJanuary26,2008andthefiscalyearendedJanuary27,2007.FollowingisascheduleoffutureminimumleasepaymentsforcontinuingoperationsasofJanuary31,2009:InthousandsCapitalLeaseOperatingLeasesFiscalYear2010$3,726$913,44620113,726840,45720123,897741,94020133,912624,87220143,912513,069Lateryears7,4981,437,499Totalfutureminimumleasepayments26,671$5,071,283Lessamountrepresentinginterest6,297Netpresentvalueofminimumcapitalleasepayments$20,374Thecapitalleaserelatestoa283,000-square-footadditiontoTJX’shomeofficefacility.RentalpaymentscommencedJune1,2001,andwerecognizedacapitalleaseassetandrelatedobligationequaltothepresentvalueoftheleasepaymentsof$32.6million.Rentalexpenseunderoperatingleasesforcontinuingoperationsamountedto$936.6millionforfiscal2009,$875.6millionforfiscal2008and$816.4millionforfiscal2007.Rentalexpenseincludescontingentrentandisreportednetofsubleaseincome.Contingentrentpaidwas$8.3millioninfiscal2009,$9.7millioninfiscal2008and$9.0millioninfiscal2007.Subleaseincomewas$2.1millioninfiscal2009,$2.9millioninfiscal2008,and$3.0millioninfiscal2007.ThetotalnetpresentvalueofTJX’sminimumoperatingleaseobligationsapproximated$3,962.2millionasofJanuary31,2009.TJXhadoutstandinglettersofcredittotaling$32.0millionasofJanuary31,2009and$32.7millionasofJanuary26,2008.LettersofcreditareissuedbyTJXprimarilyforthepurchaseofinventory.H.StockIncentivePlanTotalcompensationcostrelatedtosharebasedcompensationwas$31.2millionnetofincometaxesof$20.1millioninfiscal2009,$37.0millionnetofincometaxesof$20.3millioninfiscal2008and$45.1millionnetofincometaxesof$24.7millioninfiscal2007.AsofJanuary31,2009,therewas$77.5millionoftotalunrecognizedcompensationcostrelatedtononvestedsharebasedcompensationarrangementsgrantedundertheplan.Thatcostisexpectedtoberecognizedoveraweighted-averageperiodof2.0years.TJXhasastockincentiveplanunderwhichoptionsandothersharebasedawardsmaybegrantedtoitsdirectors,officersandkeyemployees.ThisplanhasbeenapprovedbyTJX’sshareholders,andallstockcompensationawardsaremadeunderthisplan.TheStockIncentivePlan,asamendedwithshareholderapproval,providesfortheissuanceofupto145.3millionshareswith12.4millionsharesavailableforfuturegrantsasofJanuary31,2009.TJXissuessharesfromauthorizedbutunissuedcommonstock.Optionsforthepurchaseofcommonstockhavebeengrantedat100%ofmarketpriceonthegrantdateandgenerallyvestinthirdsoverathree-yearperiodstartingoneyearafterthegrant,andhaveatenyearterm.ForpurposesF-18ofapplyingtheprovisionsofSFASNo.123(R),thefairvalueofoptionsisestimatedasofthedateofgrantusingtheBlack-Scholesoptionpricingmodelwiththefollowingweightedaverageassumptions:January31,2009January26,2008January27,2007FiscalYearEndedRiskfreeinterestrate2.96%4.00%4.75%Dividendyield1.3%1.2%1.1%Expectedvolatilityfactor33.9%31.0%32.0%Expectedoptionlifeinyears4.84.54.5Weightedaveragefairvalueofoptionsissued$10.46$8.38$8.35Expectedvolatilityisbasedonacombinationofimpliedvolatilityfromtradedoptionsonourstock,andhistoricalvolatilityduringatermapproximatingtheexpectedtermoftheoptiongranted.Weusehistoricaldatatoestimateoptionexercise,employeeterminationbehavioranddividendyieldwithinthevaluationmodel.Separateemployeegroupsandoptioncharacteristicsareconsideredseparatelyforvaluationpurposeswhenapplicable.Nosuchdistinctionsexistedduringthefiscalyearspresented.Theexpectedoptionliferepresentsanestimateoftheperiodoftimeoptionsareexpectedtoremainoutstandingbaseduponhistoricalexercisetrends.TheriskfreerateisforperiodswithinthecontractuallifeoftheoptionbasedontheU.S.Treasuryyieldcurveineffectatthetimeofthegrant.StockOptions:AsummaryofthestatusofTJX’sstockoptionsandrelatedWeightedAverageExercisePrices(“WAEP”)ispresentedbelow(sharesinthousands):OptionsWAEPOptionsWAEPOptionsWAEPJanuary31,2009January26,2008January27,2007FiscalYearEndedOutstandingatbeginningofyear35,153$22.1737,854$20.5047,902$18.97Granted5,19935.025,71629.235,78827.03Exercisedandrepurchased(7,533)19.08(7,473)18.84(14,524)17.92Forfeitures(1,046)27.59(944)24.25(1,312)21.93Outstandingatendofyear31,773$24.8335,153$22.1737,854$20.50Optionsexercisableatendofyear21,664$21.5624,243$19.8824,848$18.69Includedintheexercisedandrepurchasedamountinthetableaboveareapproximately77,000optionsrepurchasedfromoptioneesbyTJXduringfiscal2009and341,000optionsrepurchasedduringfiscal2008.Cashpaidforsuchrepurchasedoptionsamountedto$659,305infiscal2009and$2.3millioninfiscal2008.Thetotalintrinsicvalueofoptionsexercisedwas$108.1millioninfiscal2009,$79.7millioninfiscal2008and$131.6millioninfiscal2007.ThefollowingtablesummarizesinformationaboutstockoptionsoutstandingthatareexpectedtovestandstockoptionsoutstandingthatareexercisableatJanuary31,2009.Optionsoutstandingexpectedtovestrepresentstotalunvestedoptionsof10.1millionadjustedforanticipatedforfeitures.InthousandsexceptyearsandpershareamountsSharesAggregateIntrinsicValueWeightedAverageRemainingContractLifeWeightedAverageExercisePriceOptionsoutstandingexpectedtovest9,396$08.9years$31.71Optionsexercisable21,664$05.4years$21.56Totaloutstandingoptionsvestedandexpectedtovest31,060$06.5years$24.63PerformanceBasedRestrictedStockandOtherAwards:TJXhasissuedperformance-basedrestrictedstockawardsundertheStockIncentivePlan.Performance-basedrestrictedstockawardsareissuedatnocosttotherecipientoftheaward,andhaverestrictionsthatgenerallylapseoveronetofouryearsfromdateofgrantwhenandifspecifiedF-19performancecriteriaaremet.Thegrantdatefairvalueoftheawardischargedtoincomeratablyovertheperiodduringwhichtheseawardsvest.Thefairvalueoftheawardsisdeterminedatdateofgrantandassumesthatperformancegoalswillbeachieved.Ifsuchgoalsarenotmet,nocompensationcostisrecognizedandanyrecognizedcompensationcostisreversed.Asummaryofthestatusofournonvestedperformance-basedrestrictedstockandchangesduringfiscal2009ispresentedbelow:SharesinthousandsPerformanceBasedRestrictedStockWeightedAverageGrantDateFairValueNonvestedatbeginningofyear593$24.82Granted17333.49Vested(251)23.49Forfeited(73)28.35Nonvestedatendofyear442$28.37Therewere173,000sharesofperformance-basedrestrictedstock,withaweightedaveragegrantdatefairvalueof$33.49,grantedinfiscal2009;200,000shareswithaweightedaveragegrantdatefairvalueof$28.04weregrantedinfiscal2008and236,000shareswithaweightedaveragegrantdatefairvalueof$27.16weregrantedinfiscal2007.Thefairvalueofperformance-basedrestrictedstockthatvestedwas$5.9millioninfiscal2009,$3.9millioninfiscal2008and$4.9millioninfiscal2007.InNovember2005,TJXissuedamarket-baseddeferredshareawardforupto94,000sharestoitsactingchiefexecutiveofficerwhichwasindexedtoTJX’sstockpriceforthesixty-dayperiodbeginningFebruary22,2007(“measurementperiod”).Theweightedaveragegrantdatefairvalueofthisawardwas$9.90pershare.InJune2007,58,750shareswereissuedunderthisaward.InSeptember2007,thisofficerreceivedaspecialawardof25,000sharesofcommonstock.TJXalsoawardsdeferredsharestoitsoutsidedirectorsundertheStockIncentivePlan.Theoutsidedirectorsareawardedtwoannualdeferredshareawards,eachrepresentingsharesofTJXcommonstockvaluedat$50,000.Oneawardvestsimmediatelyandispayablewithaccumulateddividendsinstockattheearlierofseparationfromserviceasadirectororchangeofcontrol.Thesecondawardvestsbasedonserviceasadirectoruntiltheannualmeetingnextfollowingtheawardandispayablewithaccumulateddividendsinstockatvestingdate,unlessanirrevocableadvanceelectionismadewherebyitispayableatthesametimeasthefirstaward.Asoftheendoffiscal2009,atotalof144,588deferredshareswereoutstandingundertheplan.I.CapitalStockandEarningsPerShareCapitalStock:InAugust2008,wecompleteda$1billionstockrepurchaseprogrambeguninfiscal2007andinitiatedanothermulti-year$1billionstockrepurchaseprogramthathadbeenapprovedinFebruary2008.Werepurchasedandretired24.0millionsharesofourcommonstockatacostof$741.1millionduringfiscal2009.TJXreflectsstockrepurchasesinitsfinancialstatementsona“settlement”basis.Wehadcashexpendituresunderourrepurchaseprogramsof$751.1millioninfiscal2009,$940.2millioninfiscal2008and$557.2millioninfiscal2007,fundedprimarilybycashgeneratedfromoperations.Thetotalcommonsharesrepurchasedamountedto24.3millionsharesinfiscal2009,33.0millionsharesinfiscal2008and22.0millionsharesinfiscal2007.AsofJanuary31,2009,wehadrepurchased8.9millionsharesofourcommonstockatacostof$255.1millionunderthecurrent$1billionstockrepurchaseprogram.Allsharesrepurchasedunderourstockrepurchaseprogramshavebeenretired.TJXhas5millionsharesofauthorizedbutunissuedpreferredstock,$1parvalue.F-20EarningsPerShare:Thefollowingschedulepresentsthecalculationofbasicanddilutedearningspershareforincomefromcontinuingoperations:AmountsinthousandsexceptpershareamountsJanuary31,2009January26,2008January27,2007(53weeks)Basicearningspershare:Incomefromcontinuingoperations$914,886$782,432$787,172Weightedaveragecommonstockoutstandingforbasicearningspersharecalculation419,076443,050454,044Basicearningspershare$2.18$1.77$1.73Dilutedearningspershare:Incomefromcontinuingoperations$914,886$782,432$787,172Addback:Interestexpenseonzerocouponconvertiblesubordinatednotes,netofincometaxes4,6534,7164,623Incomefromcontinuingoperationsusedfordilutedearningspersharecalculation$919,539$787,148$791,795Weightedaveragecommonstockoutstandingforbasicearningspersharecalculation419,076443,050454,044Assumedconversion/exerciseof:Convertiblesubordinatednotes16,43416,90516,905Stockoptionsandawards6,7458,0919,096Weightedaveragecommonstockoutstandingfordilutedearningspersharecalculation442,255468,046480,045Dilutedearningspershare$2.08$1.68$1.65Theweightedaveragecommonsharesforthedilutedearningspersharecalculationexcludetheincrementaleffectrelatedtooutstandingstockoptions,theexercisepriceofwhichisinexcessoftherelatedfiscalyear’saveragepriceofTJX’scommonstock.Suchoptionsareexcludedbecausetheywouldhaveanantidilutiveeffect.Therewere5.2millionsuchoptionsexcludedasofJanuary31,2009and5.7millionexcludedatbothJanuary26,2008andJanuary27,2007.J.IncomeTaxesTheprovisionforincometaxesincludesthefollowing:InthousandsJanuary31,2009January26,2008January27,2007FiscalYearEnded(53weeks)Current:Federal$259,857$375,799$327,716State27,37694,72758,170Foreign97,97687,26060,149Deferred:Federal126,816(64,363)28,923State23,955(15,698)397Foreign74(70)1,681Provisionforincometaxes$536,054$477,655$477,036F-21TJXhadnetdeferredtaxassetsasfollows:InthousandsJanuary31,2009January26,2008FiscalYearEndedDeferredtaxassets:Foreigntaxcreditcarryforward$37,611$12,409Reservefordiscontinuedoperations14,85920,264Pension,stockcompensation,postretirementandemployeebenefits238,557189,619Leases38,88939,373Foreigncurrencyhedges4,57136,654ComputerIntrusionreserve16,74946,531Other83,48385,199Totaldeferredtaxassets$434,719$430,049Deferredtaxliabilities:Property,plantandequipment$203,829$139,396Safeharborleases6,5217,548Tradename42,87340,761Undistributedforeignearnings111,50677,198Other61,32344,584Totaldeferredtaxliabilities426,052309,487Netdeferredtaxasset$8,667$120,562Thefiscal2009netdeferredtaxassetispresentedonthebalancesheetasacurrentassetof$135.7millionandanon-currentliabilityof$127.0million.Forfiscal2008,thenetdeferredtaxassetispresentedonthebalancesheetasacurrentassetof$163.5millionandanon-currentliabilityof$42.9million.TJXchangeditsassertionduringfiscal2008regardingtheundistributedearningsofitsMarshallsPuertoRicosubsidiaryandthereforetheearningsofthissubsidiaryarenolongerconsideredindefinitelyreinvested.Asaresult,TJXrecognizeda$5.5milliontaxbenefitinfiscal2008afterprovidingfordeferredU.S.taxesforthissubsidiary.TJXhasprovidedfordeferredU.S.taxesonallundistributedearningsfromitsWinnersCanadiansubsidiaryanditsMarshallsPuertoRicosubsidiarythroughJanuary31,2009.AllearningsofTJX’sotherforeignsubsidiariesareconsideredindefinitelyreinvestedandnoU.S.deferredtaxeshavebeenprovidedonthoseearnings.Thenetdeferredtaxassetsummarizedaboveincludesdeferredtaxesrelatingtotemporarydifferencesatourforeignoperationsandamountedtoa$19.9millionnetliabilityasofJanuary31,2009anda$26.7millionnetliabilityasofJanuary26,2008.Infiscal2009,TJX’sHomeGoodssubsidiaryutilizedaPuertoRiconetoperatinglosscarryforwardofapprox-imately$1.1millionwhichhadnotbeenpreviouslyrecognized.TherearenofurtherPuertoRiconetoperatinglossesasofthefiscalyearendedJanuary31,2009.TJX’sGermansubsidiary,whichistreatedasabranchforU.S.taxpurposes,incurrednetoperatinglossesof$15.0millioninfiscal2009and$14.4millioninfiscal2008fortaxandfinancialreportingpurposes.ThelosseswerefullyutilizedineachyeartoreduceTJX’scurrentU.S.taxableincome.AnyfutureutilizationofthelossesinGermanywillresultinacorrespondingamountoftaxableincomeforU.S.taxpurposes.TJXestablishedvaluationallowancesagainstcertaindeferredtaxassetswhichmaynotberealizedinfutureyears.Theamountofthevaluationallowanceswas$6.2millionasofJanuary31,2009and$4.0millionasofJanuary26,2008.F-22TJX’sworldwideeffectiveincometaxratewas36.9%forfiscal2009,37.9%forfiscal2008and37.7%forfiscal2007.ThedifferencebetweentheU.S.federalstatutoryincometaxrateandTJX’sworldwideeffectiveincometaxrateisreconciledbelow:January31,2009January26,2008January27,2007FiscalYearEndedU.S.federalstatutoryincometaxrate35.0%35.0%35.0%Effectivestateincometaxrate2.84.14.0Impactofforeignoperations(0.1)(0.6)(0.4)Impactofrepatriationofforeignearnings—(0.4)—Impactoftaxfreecurrency(gains)lossesonintercompanyloans0.1(0.1)(0.2)Allother(0.9)(0.1)(0.7)Worldwideeffectiveincometaxrate36.9%37.9%37.7%ThedecreaseinTJX’seffectivestateincometaxrateforfiscal2009ascomparedtofiscal2008isprimarilyattributedtothesettlementofseveralstatetaxauditsandtheresultingreductiontoFIN48reservesforuncertaintaxpositions.TJXadoptedtheprovisionsofFASBInterpretationNo.48,“AccountingforUncertaintyinIncomeTaxes”(FIN48),inthefirstquarteroffiscal2008.FIN48clarifiestheaccountingforincometaxesbyprescribingaminimumthresholdforbenefitrecognitionofataxpositionforfinancialstatementpurposes.FIN48alsoestablishestaxaccountingrulesformeasurement,classification,interestandpenalties,disclosureandinterimperiodaccounting.Asaresultoftheimplementation,TJXrecognizedachargeofapproximately$27.2milliontoitsretainedearningsbalanceatthebeginningoffiscal2008.TJXhadnetunrecognizedtaxbenefitsof$129.9millionasofJanuary31,2009,$140.7millionasofJanuary26,2008and$124.4millionasofJanuary28,2007.Areconciliationofthebeginningandendinggrossamountofunrecognizedtaxbenefitsisasfollows:InthousandsJanuary31,2009January26,2008Balanceatbeginningofyearordateofimplementation$232,859$188,671Additionsforuncertaintaxpositionstakenincurrentyear59,80730,811Additionsforuncertaintaxpositionstakeninprioryears1,84852,328Reductionsforuncertaintaxpositionstakeninprioryears(80,959)(36,474)Reductionsresultingfromlapseofstatuteoflimitation(2,002)(307)Settlementswithtaxauthorities(9,010)(2,170)Balanceatendofyear$202,543$232,859Includedinthegrossamountofunrecognizedtaxbenefitsareitemsthatwillnotimpactfutureeffectivetaxratesuponrecognition.Theseitemsamountto$49.3millionasofJanuary31,2009and$67.8millionasofJanuary26,2008.TJXissubjecttoU.S.federalincometaxaswellasincometaxinmultiplestate,localandforeignjurisdictions.Innearlyalljurisdictions,thetaxyearsthroughfiscal2001arenolongersubjecttoexamination.TJX’saccountingpolicyistoclassifyinterestandpenaltiesrelatedtoincometaxmattersaspartofincometaxexpense.Theamountofinterestandpenaltiesexpensedwas$15.3millionfortheyearendedJanuary31,2009and$16.2millionfortheyearendedJanuary26,2008.Theaccruedamountsforinterestandpenaltiesare$51.1millionasofJanuary31,2009and$52.5millionasofJanuary26,2008.Basedontheoutcomeoftaxexaminations,judicialproceedingsorasaresultoftheexpirationofstatuteoflimitationsinspecificjurisdictions,itisreasonablypossiblethatunrecognizedtaxbenefitsforcertaintaxpositionstakenonpreviouslyfiledtaxreturnsmaychangemateriallyfromthoserepresentedonthefinancialstatementsasofJanuary31,2009.Duringthenext12months,itisreasonablypossiblethatsuchcircumstancesmayoccurthatwouldhaveamaterialeffectonpreviouslyunrecognizedtaxbenefits.Asaresult,thetotalnetamountofunrecognizedtaxF-23benefitsmaydecrease,whichwouldreducetheprovisionfortaxesonearningsbyarangeestimatedat$2.0millionto$70.0million.K.PensionPlansandOtherRetirementBenefitsPension:TJXhasafundeddefinedbenefitretirementplancoveringthemajorityofitsfull-timeU.S.employees.Employeeswhohaveattainedtwenty-oneyearsofageandhavecompletedoneyearofservicearecoveredundertheplan.Noemployeecontributionsarerequiredandbenefitsarebasedoncompensationearnedineachyearofservice.Asaresultofanamendmenttotheplan,employeeshiredafterFebruary1,2006donotparticipateinthisplanbutareeligibletoreceiveenhancedemployercontributionstotheir401(k)plans.Thisplanamendmentdidnothaveamaterialimpactonpensionexpenseforthelastthreefiscalyears,butisexpectedtograduallyreducenetperiodicpensioncostsinsubsequentyearsduetoareductioninparticipants.Ourfundeddefinedbenefitretirementplanassetsareinvestedindomesticandinternationalequityandfixedincomesecurities,bothdirectlyandthroughinvestmentfunds.TheplandoesnotinvestinthesecuritiesofTJX.TJXalsohasanunfundedsupplementalretirementplanwhichcoverskeyemployeesandprovidesforadditionalretirementbenefitsbasedonaveragecompensationforcertainemployees.InSeptember2006,theFASBissuedStatementofFinancialAccountingStandardsNo.158,“Employers’AccountingforDefinedBenefitPensionandOtherPostretirementPlans—AnamendmentofFASBStatementsNo.87,88,106and132(R)”(SFASNo.158).SFASNo.158requirestherecognitionofthefundedstatusofabenefitplaninthebalancesheet;therecognitioninothercomprehensiveincomeofgainsorlossesandpriorservicecostsorcreditsarisingduringtheperiodbutwhicharenotincludedascomponentsofperiodicbenefitcost;themeasurementofdefinedbenefitplanassetsandobligationsasofthebalancesheetdate(themeasurementprovisions);anddisclosureofadditionalinformationabouttheeffectsonperiodicbenefitcostforthefollowingfiscalyeararisingfromdelayedrecognitioninthecurrentperiod.TherecognitionofthefundedstatusofplansonthebalancesheetwasrequiredforourfiscalyearendedJanuary27,2007.TheadjustmenttoaccumulatedothercomprehensiveincomeofinitiallyapplyingtherecognitionprovisionsofSFASNo.158forourpensionandpostretirementplanswasareduction,netoftaxes,of$5.6millioninfiscal2007.TJXdeferredtheimplementationofthemeasurementprovisionsofSFASNo.158untilfiscal2008.Theimpactofadoptingthemeasurementprovisionswastoincreaseourpostretirementliabilitiesby$2.7millionandanadjustmenttoretainedearningsof$1.6million,netofincometaxesof$1.1million,whichrepresentsthenetbenefitcostfromJanuary1,2007toJanuary27,2007.Thevaluationdateforbothplansinfiscal2007wasasofDecember31,2006.PresentedbelowisfinancialinformationrelatingtoTJX’sfundeddefinedbenefitretirementplan(fundedplan)anditsunfundedsupplementalpensionplan(unfundedplan)forthefiscalyearsindicated:InthousandsJanuary31,2009January26,2008January31,2009January26,2008(53weeks)(53weeks)FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEndedChangeinprojectedbenefitobligation:Projectedbenefitobligationatbeginningofyear$447,684$417,436$51,588$53,109Effectofchangeinmeasurementdate—4,395—152Servicecost30,40634,7041,069992Interestcost28,71124,6323,3662,867Actuarial(gains)losses(1,411)(21,673)2,252(3,420)Settlements————Specialterminationbenefits———168Benefitspaid(10,713)(9,586)(2,812)(2,280)Expensespaid(2,264)(2,224)——Projectedbenefitobligationatendofyear$492,413$447,684$55,463$51,588Accumulatedbenefitobligationatendofyear$451,260$408,437$42,560$46,023F-24InthousandsJanuary31,2009January26,2008January31,2009January26,2008FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEnded(53weeks)(53weeks)Changeinplanassets:Fairvalueofplanassetsatbeginningofyear$436,416$410,318$—$—Effectofchangeinmeasurementdate—1,840—(175)Actualreturnonplanassets(109,227)11,068——Employercontribution—25,0002,8122,455Benefitspaid(10,713)(9,586)(2,812)(2,280)Expensespaid(2,264)(2,224)——Fairvalueofplanassetsatendofyear$314,212$436,416$—$—Reconciliationoffundedstatus:Projectedbenefitobligationatendofyear$492,413$447,684$55,463$51,588Fairvalueofplanassetsatendofyear314,212436,416——Fundedstatus—excessobligation178,20111,26855,46351,588Employercontributionsaftermeasurementdate,andonorbeforefiscalyearend————Unrecognizedpriorservice(cost)————Unrecognizedactuarial(losses)————Netliabilityrecognizedonconsolidatedbalancesheets$178,201$11,268$55,463$51,588Amountsnotyetreflectedinnetperiodicbenefitcostandincludedinaccumulatedothercomprehensiveincome(loss):Priorservicecost$15$59$218$342Accumulatedactuariallosses176,27434,0888,9587,976Amountsincludedinaccumulatedothercomprehensiveincome(loss)$176,289$34,147$9,176$8,318Theconsolidatedbalancesheetsreflectthefundedstatusoftheplanswithanyunrecognizedpriorservicecostandactuarialgainsandlossesrecordedinaccumulatedothercomprehensiveincome(loss).Thecombinednetaccruedliabilityof$233.7millionatJanuary31,2009isreflectedonthebalancesheetasofthatdateasacurrentliabilityof$13.1millionandalong-termliabilityof$220.6million.Thecombinednetaccruedliabilityof$62.9millionatJanuary26,2008isreflectedonthebalancesheetasofthatdateasacurrentliabilityof$2.7millionandalong-termliabilityof$60.2million.Theestimatedpriorservicecostthatwillbeamortizedfromaccumulatedothercomprehensiveincome(loss)intonetperiodicbenefitcostinfiscal2010is$15,354forthefundedplanand$124,652fortheunfundedplan.Theestimatednetactuariallossthatwillbeamortizedfromaccumulatedothercomprehensiveincome(loss)intonetperiodicbenefitcostinfiscal2010is$13.6millionforthefundedplanand$861,926fortheunfundedplan.Weightedaverageassumptionsformeasurementpurposesfordeterminingtheobligationatmeasurementdate:January31,2009January26,2008January31,2009January26,2008FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEndedDiscountrate6.50%6.50%6.50%6.25%Expectedreturnonplanassets8.00%8.00%N/AN/ARateofcompensationincrease4.00%4.00%6.00%6.00%F-25TJXselectstheassumeddiscountrateusingtheCitigroupPensionLiabilityIndex.TJXdevelopsitslong-termrateofreturnassumptionbyevaluatinginputfromprofessionaladvisorstakingintoaccounttheassetallocationoftheportfolioandlong-termassetclassreturnexpectations,aswellaslong-terminflationassumptions.TJXmadeaggregatecashcontributionsof$2.8millioninfiscal2009,$27.5millioninfiscal2008and$7.4millioninfiscal2007tothedefinedbenefitretirementplanandtofundcurrentbenefitandexpensepaymentsundertheunfundedsupplementalretirementplan.Thecashcontributionsmadeinfiscal2009and2007weresolelytofundcurrentbenefitandexpensepaymentsundertheunfundedsupplementalretirementplan.Throughfiscal2008ourfundingpolicyforthefundedplanwastofundanyrequiredcontributiontotheplanatthefullfundinglimitationandgenerallytofundcontributionsinexcessofanyrequiredcontributionsoastofullyfundtheaccumulatedbenefitobligationtotheextentsuchcontributionisallowedfortaxpurposes.Asaresultofvoluntaryfundingcontributionsmadeinprioryears,therewasnorequiredfundingduringthelastthreefiscalyears.Infiscal2009thePensionProtectionAct(PPA)becameeffectiveandTJX’spolicywillbetofund,ataminimum,theamountrequiredtomaintainafundedstatusof75%to80%ofthepensionliabilityasdefinedbythePPA.Asofthedateofthisreport,TJXhadcontributed$50milliontothefundedplanandmaymakeadditionalvoluntarycontributionsduringfiscal2010.Weanticipatemakingcontributionsof$13.1milliontofundcurrentbenefitandexpensepaymentsundertheunfundedsupplementalretirementplaninfiscal2010.Thefollowingisasummaryofourtargetallocationforplanassetsalongwiththeactualallocationofplanassetsasofthevaluationdateforthefiscalyearspresented:TargetAllocationJanuary31,2009January26,2008ActualAllocationforFiscalYearEndedEquitysecurities60%48%53%Fixedincome40%50%40%Allother—primarilycash—2%7%Weemployatotalreturninvestmentapproachwherebyamixofequitiesandfixedincomeinvestmentsisusedtoseektomaximizethelong-termreturnonplanassetswithaprudentlevelofrisk.Risksaremitigatedthroughassetdiversificationandtheuseofmultipleinvestmentmanagers.Investmentriskismeasuredandmonitoredonanongoingbasisthroughquarterlyinvestmentportfolioreviews,annualliabilitymeasurementsandperiodicasset/liabilitystudies.F-26Followingarethecomponentsofnetperiodicbenefitcostandotheramountsrecognizedinothercomprehensiveincomerelatedtoourpensionplans:DollarsinthousandsJanuary31,2009January26,2008January27,2007January31,2009January26,2008January27,2007FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEnded(53weeks)(53weeks)NetPeriodicPensionCost:Servicecost$30,406$34,704$37,528$1,069$992$1,043Interestcost28,71124,63221,9823,3662,8672,929Expectedreturnonplanassets(34,369)(32,259)(29,395)———Amortizationoftransitionobligation——————Settlementcost————1681,421Amortizationofpriorservicecosts435757124125124Recognizedactuariallosses——5,6561,2707891,686Netperiodicpensioncost$24,791$27,134$35,828$5,829$4,941$7,203OtherChangesinPlanAssetsandBenefitObligationsRecognizedinOtherComprehensiveIncomeNet(gain)loss$142,186$(482)$40,226$2,252$(3,420)$13,976Priorservicecost(credit)——178——602Amortizationofrecognizedloss——(5,656)(1,270)(893)(1,686)Amortizationofpriorservicecost(44)(62)(57)(125)(135)(125)Totalrecognizedinothercomprehensiveincome$142,142$(544)$34,691$857$(4,448)$12,767Totalrecognizedinnetperiodicbenefitcostandothercomprehensiveincome$166,933$26,590$70,519$6,686$493$19,970Weightedaverageassumptionsforexpensepurposes:Discountrate6.50%6.00%5.50%6.25%5.75%5.50%Expectedrateofreturnonplanassets8.00%8.00%8.00%N/AN/AN/ARateofcompensationincrease4.00%4.00%4.00%6.00%6.00%6.00%Theunrecognizedgainsandlossesinexcessof10%oftheprojectedbenefitobligationareamortizedovertheaverageremainingservicelifeofparticipants.Inaddition,fortheunfundedplan,unrecognizedactuarialgainsandlossesthatexceed30%oftheprojectedbenefitobligationarefullyrecognizedinnetperiodicpensioncost.Followingisascheduleofthebenefitsexpectedtobepaidineachofthenextfivefiscalyearsandintheaggregateforthefivefiscalyearsthereafter:InthousandsFundedPlanExpectedBenefitPaymentsUnfundedPlanExpectedBenefitPaymentsFiscalYear2010$14,511$13,059201116,1493,613201217,9683,633201320,4383,301201422,9943,3692015through2019161,36320,242TJXalsosponsorsanemployeesavingsplanunderSection401(k)oftheInternalRevenueCodeforalleligibleU.S.employees.Assetsundertheplantotaled$529.5millionasofDecember31,2008and$688.3millionasofDecember31,2007andareinvestedinavarietyoffunds.Employeesmaycontributeupto50%ofeligiblepay,subjecttolimitation.TJXmatchesemployeecontributions,upto5%ofeligiblepay,atratesrangingfrom25%toF-2750%,baseduponTJX’sperformance.EmployeeshiredafterFebruary1,2006areeligibleforparticipationinthe401(k)planwithanenhancedmatchingformulabeginningfiveyearsafterhiredate.TJXcontributed$8.6millioninfiscal2009,$10.2millioninfiscal2008and$11.4millioninfiscal2007tothe401(k)plan.EmployeescannotinvesttheircontributionsintheTJXstockfundoptioninthe401(k)plan,andmayelecttoinvestuptoonly50%ofTJX’scontributionintheTJXstockfund.TheTJXstockfundhasnoothertradingrestrictions.TheTJXstockfundrepresents3.3%ofplaninvestmentsatDecember31,2008,3.5%atDecember31,2007and3.8%atDecember31,2006.TJXalsohasanonqualifiedsavingsplanforcertainU.S.employees.TJXmatchesemployeecontributionsatvariousrateswhichamountedto$425,432infiscal2009,$1.2millioninfiscal2008and$1.2millioninfiscal2007.TJXtransfersemployeewithholdingsandtherelatedcompanymatchtoaseparatetrustdesignatedtofundthefutureobligations.Thetrustassets,whichareinvestedinavarietyofmutualfunds,areincludedinotherassetsonthebalancesheets.Inadditiontotheplansdescribedabove,wealsomaintainretirement/deferredsavingsplansforalleligibleassociatesatourforeignsubsidiaries.Wecontributed$4.2millionfortheseplansinfiscal2009,$4.1millioninfiscal2008and$3.6millioninfiscal2007.PostretirementMedical:TJXhasanunfundedpostretirementmedicalplanthatprovideslimitedpostretirementmedicalandlifeinsurancebenefitstoemployeeswhoparticipateinitsretirementplanandwhoretiredatage55orolderwithtenormoreyearsofservice.Duringthefourthquarteroffiscal2006,TJXeliminatedthisbenefitforallactiveassociatesandmodifiedthebenefittocurrentretireesenrolledintheplan.Theplanamendmentreplacesthepreviousmedicalbenefitswithadefinedamount(upto$35.00permonth)thatapproximatesthecostofenrollmentintheMedicarePlanforretireesenrolledintheplanatthetimeofmodification.Thecompanypaid$262,000ofbenefitsinfiscal2009andwillpaysimilaramountsoverthenextseveralyears.ThepostretirementmedicalliabilityasofJanuary31,2009isestimatedat$2.3million,ofwhich$2.0millionisincludedinnon-currentliabilitiesonthebalancesheet.Theamendmenttoplanbenefitsinfiscal2006resultedinanegativeplanamendmentof$46.8millionwhichisbeingamortizedintoincomeovertheaverageremaininglifeoftheactiveplanparticipants.Theunamortizedbalanceof$29.8millionasofJanuary31,2009isincludedinaccumulatedothercomprehensiveincome(loss)ofwhich$3.8millionwillbeamortizedintoincomeinfiscal2010.Duringfiscal2009therewasapre-taxnetbenefitof$3.4millionreflectedintheincomestatementasitrelatestothispostretirementmedicalplan.L.AccruedExpensesandOtherLiabilities,CurrentandLong-TermThemajorcomponentsofaccruedexpensesandothercurrentliabilitiesareasfollows:InthousandsJanuary31,2009January26,2008FiscalYearEndedEmployeecompensationandbenefits,current$300,366$335,180ComputerIntrusion42,211117,266Rent,utilitiesandoccupancy,includingrealestatetaxes151,273158,870Merchandisecreditsandgiftcertificates133,104141,528Insurance40,42848,954SalestaxcollectionsandV.A.T.taxes88,528117,585Allothercurrentliabilities340,856294,604Accruedexpensesandothercurrentliabilities$1,096,766$1,213,987Allothercurrentliabilitiesincludeaccrualsforoutstandingchecks,advertising,propertyadditions,dividends,freight,reserveforsalesreturns,purchasedservices,andotheritems,eachofwhichareindividuallylessthan5%ofcurrentliabilities.F-28Themajorcomponentsofotherlong-termliabilitiesareasfollows:InthousandsJanuary31,2009January26,2008FiscalYearEndedEmployeecompensationandbenefits,long-term$272,881$125,421Reserverelatedtodiscontinuedoperations40,56446,076Accruedrent137,876150,530Landlordallowances53,76158,797Fairvalueofderivatives—143,091Taxreserve,long-term240,582269,157Long-termliabilities—other19,34018,261Otherlong-termliabilities$765,004$811,333M.DiscontinuedOperationsReserveandRelatedContingentLiabilitiesTJXhasareserveforfutureobligationsofdiscontinuedoperationsthatrelatesprimarilytorealestateleasesassociatedwithour34discontinuedA.J.Wrightstores(seeNoteC)aswellasleasesofformerTJXbusinesses.Thebalanceinthereserveandtheactivityforthelastthreefiscalyearsispresentedbelow:InthousandsJanuary31,2009January26,2008January27,2007FiscalYearEndedBalanceatbeginningofyear$46,076$57,677$14,981Additions(reductions)tothereservechargedtonetincome:A.J.Wrightstoreclosings(2,908)—61,968Otherleaserelatedobligations2,908—1,555Interestaccretion1,8201,820400Chargesagainstthereserve:Leaserelatedobligations(7,323)(11,214)(1,696)Fixedassetwrite-offs——(18,732)Terminationbenefitsandallother(9)(2,207)(799)Balanceatendofyear$40,564$46,076$57,677Theexitcostsrelatedtoour34discontinuedA.J.Wrightstores(seeNoteC)resultedinanadditiontothereserveof$62millioninfiscal2007.Theotheradditionstothereserveforleaserelatedobligationsinfiscal2007weretheresultofperiodicadjustmentstoourestimatedleaseobligationsofourformerbusinessesandwereoffsetbyincomefromcreditorrecoveriesofasimilaramount.Theleaserelatedchargesagainstthereserveduringfiscal2007relateprimarilytoourformerbusinesses.Thefixedassetwrite-offsandotherchargesagainstthereserveforfiscal2007andallofthechargesagainstthereserveinfiscal2008andfiscal2009,relateprimarilytothe34A.J.Wrightclosedstores.Ofthereservebalance,approximately$25millionatfiscal2009yearend,$32millionatfiscal2008yearendand$43millionatfiscal2007yearendrelatetotheA.J.Wrightstoreclosings,primarilyourestimationofleasecosts,netofestimatedsubtenantincome.Approximately$3millionofthereserveatfiscal2009relatesto2Bob’sStoreslocationswhichareconsideredprobableforbeingputbacktoTJXbythebuyer.Theremainderofthereservereflectsourestimationofthecostofclaims,updatedquarterly,thathavebeen,orwebelievearelikelytobe,madeagainstTJXforliabilityasanoriginallesseeorguarantoroftheleasesofformerbusinesses,aftermitigationofthenumberandcostofleaseobligations.AtJanuary31,2009,substantiallyalltheleasesoftheformerbusinessesthatwererejectedinbankruptcyandforwhichthelandlordsassertedliabilityagainstTJXhadbeenresolved.Theactualnetcostofthevariousleaseobligationsincludedinthereservemaydifferfromourinitialestimate.AlthoughTJX’sactualcostswithrespecttotheseleaseobligationsmayexceedamountsestimated,andTJXmayincurcostsforotherleasesfromdiscontinuedoperations,TJXdoesnotexpecttoincuranymaterialcostsrelatedtothesediscontinuedoperationsinexcessoftheamountsestimated.WeestimatethatthemajorityofthediscontinuedoperationsreservewillbepaidinF-29thenextthreetofiveyears.Theactualtimingofcashoutflowswillvarydependingonhowtheremainingleaseobligationsareactuallysettled.TJXmayalsobecontingentlyliableonupto15leasesofBJ’sWholesaleClub,anotherformerTJXbusinessforwhichBJ’sWholesaleClubisprimarilyliable,andon8additionalBob’sStoresleases.Ourreservefordiscontinuedoperationsdoesnotreflecttheseleases,becausewecurrentlybelievethatthelikelihoodofanyfutureliabilitytoTJXwithrespecttotheseleasesisnotprobable.N.GuaranteesandContingentObligationsTJXhascontingentobligationsonleases,forwhichitwasalesseeorguarantor,whichwereassignedtothirdpartieswithoutourbeingreleasedbythelandlords.Overmanyyears,wehaveassignednumerousleasesthatweoriginallyleasedorguaranteedtoasignificantnumberofthirdparties.Withtheexceptionofleasesofourdiscontinuedoperationsdiscussedabove,wehaverarelyhadaclaimwithrespecttoassignedleases,andaccordingly,wedonotexpectthatsuchleaseswillhaveamaterialadverseimpactonourfinancialcondition,resultsofoperationsorcashflows.Wedonotgenerallyhavesufficientinformationabouttheseleasestoestimateourpotentialcontingentobligationsunderthem,whichcouldbetriggeredintheeventthatoneormoreofthecurrenttenantsdoesnotfulfilltheirobligationsrelatedtooneormoreoftheseleases.TJXalsohascontingentobligationsinconnectionwithsomeassignedorsubletpropertiesthatTJXisabletoestimate.Weestimatetheundiscountedobligations(notreflectedinourreserves)ofleasesofclosedstoresofcontinuingoperations,BJ’sWholesaleClubandBob’sStoresleases(discussedinNoteM)andpropertiesofourdiscontinuedoperationsthatwehavesublet,ifthesubtenantsdidnotfulfilltheirobligations,isapproximately$100millionasofJanuary31,2009.WebelievethatmostorallofthesecontingentobligationswillnotreverttoTJXand,totheextenttheydo,willberesolvedforsubstantiallylessduetomitigatingfactors.TJXisapartytovariousagreementsunderwhichwemaybeobligatedtoindemnifytheotherpartywithrespecttobreachofwarrantyorlossesrelatedtosuchmattersastitletoassetssold,specifiedenvironmentalmattersorcertainincometaxes.Theseobligationsaretypicallylimitedintimeandamount.Therearenoamountsreflectedinourbalancesheetswithrespecttothesecontingentobligations.O.SupplementalCashFlowsInformationThecashflowsrequiredtosatisfycontingentobligationsofthediscontinuedoperationsasdiscussedinNoteM,areclassifiedasareductionincashprovidedbycontinuingoperations.Therearenoremainingoperatingactivitiesrelatingtotheseoperations.TJX’scashpaymentsforinterestandincometaxesandnon-cashinvestingandfinancingactivitiesareasfollows:InthousandsJanuary31,2009January26,2008January27,2007FiscalYearEnded(53weeks)Cashpaidfor:Interestondebt$28,269$31,190$31,489Incometaxes449,916463,835510,274Changesinaccruedexpensesdueto:Dividendspayable6,9456,7104,097Propertyadditions(19,829)23,557(6,149)Therewerenonon-cashfinancingorinvestingactivitiesduringfiscal2009,2008or2007.P.SegmentInformationTJXoperatesfivebusinesssegments,threeintheUnitedStatesandoneeachinCanadaandEurope.Eachofoursegmentshasitsownadministrative,buyinganddistributionnetwork.OfourU.S.basedstorechains,T.J.MaxxandMarshalls,referredtoasMarmaxx,aremanagedtogetherandreportedasasinglesegmentandA.J.WrightandF-30HomeGoodseachisreportedasaseparatesegment.OutsidetheU.S.,ourstorechainsinCanada(WinnersandHomeSense)areundercommonmanagementandreportedasourCanadiansegmentandourstorechainsinEurope(T.K.MaxxandHomeSense)arealsoundercommonmanagementandreportedasourEuropeansegment.Forfiscal2009,ourCanadianandEuropeansegmentsaccountedfor23%ofTJX’snetsales,24%ofsegmentprofitand21%ofallconsolidatedassets.Allofourstores,withtheexceptionofHomeGoodsandHomeSense,sellapparelfortheentirefamily,includingfootwear,jewelryandaccessoriesandalimitedofferingofgiftwareandhomefashions.TheHomeGoodsandHomeSensestoresofferexclusivelyhomefashionsandhomefurnishings.Bymerchandisecategory,wederivedapproximately62%ofoursalesfromclothing(includingfootwear),25%fromhomefashionsand13%fromjewelryandaccessoriesinfiscal2009.TJXevaluatestheperformanceofitssegmentsbasedon“segmentprofitorloss,”whichitdefinesaspre-taxincomebeforegeneralcorporateexpense,ProvisionforComputerIntrusionrelatedcostsandinterest.“Segmentprofitorloss,”asdefinedbyTJX,maynotbecomparabletosimilarlytitledmeasuresusedbyotherentities.Inaddition,thismeasureofperformanceshouldnotbeconsideredanalternativetonetincomeorcashflowsfromoperatingactivitiesasanindicatorofourperformanceorasameasureofliquidity.F-31Presentedbelowisselectedfinancialinformationrelatedtoourbusinesssegments:InthousandsJanuary31,2009January262008January27,2007FiscalYearEnded(53weeks)Netsales:(1)Marmaxx$12,362,122$11,966,651$11,531,785Canada2,139,4432,040,8141,740,796Europe2,242,0572,216,2181,864,502HomeGoods1,578,2861,480,3821,365,103A.J.Wright677,597632,661601,827$18,999,505$18,336,726$17,104,013Segmentprofit(loss):(1)Marmaxx$1,155,838$1,158,179$1,079,275Canada236,086235,128181,863Europe137,612127,218109,305HomeGoods42,37076,22460,938A.J.Wright2,862(1,801)(10,250)1,574,7681,594,9481,421,131Generalcorporateexpense140,037139,437136,397ProvisionforComputerIntrusionrelatedcosts(2)(30,500)197,0224,960Interest(income)expense,net14,291(1,598)15,566Incomefromcontinuingoperationsbeforeprovisionforincometaxes$1,450,940$1,260,087$1,264,208Identifiableassets:Marmaxx$3,538,663$3,407,240$3,257,019Canada609,363659,004483,505Europe675,283847,107694,071HomeGoods455,045435,605377,692A.J.Wright242,657204,808193,619Discontinuedoperations(1)—87,29199,459Corporate(3)657,231958,879980,335$6,178,242$6,599,934$6,085,700Capitalexpenditures:Marmaxx$328,965$287,558$221,158Canada61,48640,92843,879Europe122,902127,64672,656HomeGoods47,51950,06225,888A.J.Wright19,09815,42510,838Discontinuedoperations(1)2,9625,3683,592$582,932$526,987$378,011Depreciationandamortization:Marmaxx$241,940$215,439$201,504Canada43,52742,41836,743Europe59,94956,16356,909HomeGoods28,89224,26122,825A.J.Wright16,29815,29618,400Discontinuedoperations(1)2,6107,3618,411Corporate(4)8,4918,4588,318$401,707$369,396$353,110(1)AdjustedtoreclassifytheresultsofoperationsfromBob’sStoresthroughthedateofsaletodiscontinuedoperations.(2)TJXhasincurredlossesasaresultoftheComputerIntrusion.Inthesecondquarteroffiscal2008,TJXestablishedapre-taxreserveof$178.1milliontoreflectitsestimationofprobablelosses.Infiscal2009and2008,TJXreducedourreserveby$30.5millionand$18.9million,respectively.(3)Corporateidentifiableassetsconsistprimarilyofcash,receivables,prepaidinsurance,prepaidpensionexpense,anotereceivable,andreflectsthedecreaseincashfromfiscal2008tofiscal2009.(4)Includesdebtdiscountanddebtexpenseamortization.F-32Q.SelectedQuarterlyFinancialData(Unaudited)Presentedbelowisselectedquarterlyconsolidatedfinancialdataforfiscal2009and2008whichwaspreparedonthesamebasisastheauditedconsolidatedfinancialstatementsandincludesalladjustmentsnecessarytopresentfairly,inallmaterialrespects,theinformationsetforththereinonaconsistentbasis.InthousandsexceptpershareamountsFirstQuarterSecondQuarterThirdQuarterFourthQuarter(4)FiscalYearEndedJanuary31,2009(53weeks)—AsAdjusted(1)Netsales$4,303,555$4,554,395$4,761,530$5,380,025Grossearnings(2)1,037,4341,114,4811,233,5211,219,313Incomefromcontinuingoperations(3)198,000212,073254,117250,696Netincome(3)193,849200,223235,849250,696IncomefromcontinuingoperationsBasicearningspershare0.470.500.610.61Dilutedearningspershare0.440.480.580.58NetincomeBasicearningspershare0.460.480.570.61Dilutedearningspershare0.430.450.540.58FiscalYearEndedJanuary31,2009(53weeks)—AsReportedNetsales$4,364,125$4,621,292$4,761,530$5,380,025Grossearnings(2)1,048,3901,128,4771,233,5211,219,313Incomefromcontinuingoperations(3)193,849200,223254,117250,696Netincome(3)193,849200,223235,849250,696IncomefromcontinuingoperationsBasicearningspershare0.460.480.610.61Dilutedearningspershare0.430.450.580.58NetincomeBasicearningspershare0.460.480.570.61Dilutedearningspershare0.430.450.540.58FiscalYearEndedJanuary26,2008—AsAdjusted(1)Netsales$4,044,073$4,242,059$4,658,718$5,391,876Grossearnings(2)977,3111,020,5301,178,1111,319,079Incomefromcontinuingoperations(3)166,14161,167251,261303,863Netincome(3)162,10859,032249,461301,149IncomefromcontinuingoperationsBasicearningspershare0.370.140.570.70Dilutedearningspershare0.350.130.540.67NetincomeBasicearningspershare0.360.130.570.70Dilutedearningspershare0.340.130.540.66FiscalYearEndedJanuary26,2008—AsReportedNetsales$4,108,081$4,313,298$4,737,491$5,488,256Grossearnings(2)990,8661,035,6011,195,9931,342,218Incomefromcontinuingoperations(3)162,10859,032249,461301,149Netincome(3)162,10859,032249,461301,149IncomefromcontinuingoperationsBasicearningspershare0.360.130.570.70Dilutedearningspershare0.340.130.540.66NetincomeBasicearningspershare0.360.130.570.70Dilutedearningspershare0.340.130.540.66F-33(1)AdjustedtoreclassifytheresultsofoperationsfromBob’sStorestodiscontinuedoperations—SeeNoteC.ThefollowingtablesummarizesthequarterlyamountsofnetincomethathavebeenreclassifiedfromcontinuingoperationstodiscontinuedoperationsasaresultofthesaleoftheBob’sStoreschain:InmillionsexceptpershareamountsIncome(loss)ofdiscontinuedoperationsAmountpershareIncome(loss)ofdiscontinuedoperationsAmountpershareFiscal2009Fiscal2008QuarterFirst$(4.2)$(0.01)$(4.0)$(0.01)Second(11.8)(0.03)(2.1)—Third0.7—(1.8)—Fourth—N/A(2.8)(0.01)FullYear$(15.3)$(0.04)$(10.7)$(0.02)TheBob’sStoreschainwassoldinthethirdquarteroffiscal2009.TJXincurredalossondisposalof$19.0million,netoftaxes,or$0.04pershare.(2)Grossearningsequalnetsaleslesscostofsales,includingbuyingandoccupancycosts.(3)ThefollowingtablesummarizesthequarterlynetoftaxamountschargedtonetincomerelatingtocostsincurredinconnectionwiththeComputerIntrusion—SeeNoteB.InmillionsexceptpershareamountsCharge(benefit)tonetincomeAmountpershareCharge(benefit)tonetincomeAmountpershareFiscal2009Fiscal2008QuarterFirst$—$—$12$0.03Second——1180.25Third(4)(0.01)——Fourth(14)(0.03)(11)(0.02)FullYear$(18)$(0.04)$119$0.25Note:Duetoroundingindividualitemsmaynotfoot.(4)Thefourthquarteroffiscal2009includes14weeks.F-34BOARD OF DIRECTORSBernard CammarataChairman of the Board,The TJX Companies, Inc.José B. AlvarezMember of the Faculty,Harvard Business SchoolAlan M. BennettFormer Interim Chief Executive Ofﬁ cer,H&R Block Inc.David A. BrandonChairman and Chief Executive Ofﬁ cer,Domino’s Pizza, Inc.David T. ChingSenior Vice President and Chief Information Ofﬁ cer,Safeway Inc.Michael F. HinesFormer Executive Vice Presidentand Chief Financial Ofﬁ cer,Dick’s Sporting Goods, Inc.Amy B. LaneRetired Managing Director,Global RetailingInvestment Banking GroupMerrill Lynch & Co., Inc.Carol MeyrowitzPresident and Chief Executive Ofﬁ cer,The TJX Companies, Inc.John F. O’BrienLead Director,The TJX Companies, Inc.Retired Chief Executive Ofﬁ cer,Allmerica Financial CorporationRobert F. ShapiroVice Chairman,Klingenstein, Fields & Co., L.L.C.Willow B. ShireExecutive Consultant,Orchard Consulting GroupFletcher H. WileyPrincipal, PRWT Services, Inc.Of Counsel,Bingham McCutchen LLPCOMMITTEES OF THE BOARD OF DIRECTORSEXECUTIVE COMMITTEEBernard Cammarata, ChairmanJohn F. O’BrienRobert F. ShapiroAUDIT COMMITTEEMichael F. Hines, ChairmanJosé B. AlvarezDavid T. ChingAmy B. LaneRobert F. Shapiro Fletcher H. WileyEXECUTIVE COMPENSATION COMMITTEEDavid A. Brandon, ChairmanJosé B. Alvarez John F. O’BrienWillow B. ShireFINANCE COMMITTEEAmy B. Lane, ChairpersonAlan M. BennettDavid A. BrandonMichael F. HinesCORPORATE GOVERNANCE COMMITTEEWillow B. Shire, ChairpersonAlan M. BennettDavid T. ChingRobert F. ShapiroFletcher H. WileyBernard CammarataChairman of the BoardCarol MeyrowitzPresident and Chief Executive Ofﬁ cerSENIOR EXECUTIVE VICEPRESIDENTSErnie HerrmanGroup PresidentJeffrey NaylorChief Financial and Administrative Ofﬁ cerJerome R. RossiGroup PresidentPaul SweetenhamGroup President EXECUTIVE VICEPRESIDENTSPaul ButkaGlobal Application DevelopmentGregorio R. FloresChief Human Resources Ofﬁ cerKathy S. LaneChief Information Ofﬁ cerPeter LindenmeyerChief Logistics Ofﬁ cerAnn McCauleyGeneral Counsel and SecretarySENIOR VICE PRESIDENTSAlfred AppelCorporate Tax and InsuranceMarc BoeschProcurement DirectorScott GoldenbergCorporate ControllerPaul KangasEnterprise Risk Management and Chief Compliance Ofﬁ cerLynn JackGlobal Talent ManagementSherry LangInvestor and Public RelationsChristina LofgrenReal Estate and Property Development DirectorMary B. ReynoldsTreasurerBarry ZelmanBrand Development DirectorDIVISIONAL LEADERSHIPThe Marmaxx Group*Michael MacMillanPresidentHomeGoodsNan StutzPresidentA.J. WrightCelia ClancyPresidentWinners/HomeSenseRobert CataldoPresidentT.K. MaxxSusanne GivenManaging Director,U.K. and IrelandGino BarreaManaging Director,GermanyHomeSense (U.K.)David AlvesDirector*Combination of T.J. Maxx and MarshallsSENIOR CORPORATE OFFICERSSHAREHOLDER INFORMATIONTRANSFER AGENT AND REGISTRARCommon StockBNY Mellon Shareowner Services1-866-606-8365 1-800-231-5469 (TDD services for the hearing impaired) 1-201-680-6578 (Outside the U.S.)Address shareholder inquiries and send certiﬁ cates for transfer and address changes to:BNY Mellon Shareowner ServicesP.O. Box 358015Pittsburgh, PA 15252-8015E-mail address:shrrelations@bnymellon.comBNY Mellon Shareowner Services website: www.bnymellon.com/shareowner/isdTRUSTEES Public Notes7.45% Promissory NotesThe Bank of New York Mellon6.95% NotesU.S. Bank National AssociationZero Coupon ConvertibleSubordinated NotesThe Bank of New York Mellon Trust Company, N.A.INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRMPricewaterhouseCoopers LLPINDEPENDENT COUNSELRopes & Gray LLPFORM 10-KInformation concerning the Company’s operations and ﬁ nancial position is provided in this report and in the Form 10–K ﬁ led with the Securities and Exchange Commission. A copy of the Form 10–K is included in this report and additional copies may be obtained without charge by accessing the Company’s website at www.tjx.com or by writing or calling: The TJX Companies, Inc.Investor Relations770 Cochituate RoadFramingham, MA 01701508-390-2323INVESTOR RELATIONSAnalysts and investors seeking ﬁ nancial data about the Company are asked to visit our corporate website at www.tjx.com or to contact:Sherry LangSenior Vice President,Investor and Public Relations508-390-2323EXECUTIVE OFFICESFramingham, Massachusetts 01701PUBLIC INFORMATION AND SEC FILINGS:Visit our corporate website: www.tjx.comFOR THE STORE NEAREST YOU, CALL OR VISIT US ONLINE AT:In the U.S.  T.J. Maxx: 1-800-2-TJMAXX www.tjmaxx.com Marshalls: 1-800-MARSHALLS www.marshallsonline.com HomeGoods: 1-800-614-HOME www.homegoods.com A.J. Wright: 1-888-SHOPAJW www.aj-wright.comIn Canada Winners: 1-800-646-9466 www.winners.ca HomeSense: 1-800-646-9466 www.homesense.ca STYLESENSE: 1-800-646-9466 www.stylesense.caIn Europe T.K. Maxx: 01923 473561 (U.K. and Ireland) www.tkmaxx.com (U.K. and Ireland) T.K. Maxx: 0211 88223100 (Germany) www.tkmaxx.de (Germany) HomeSense: 0800 328 2601 (U.K.) www.homesense.com (U.K.)T.J. Maxx was founded in 1976, and together with Marshalls, forms The Marmaxx Group, the 
largest off-price retailer of apparel and home fashions in the U.S. T.J. Maxx operated 874 stores 
in 48 states at year-end 2008. T.J. Maxx sells brand name family apparel, including women’s 
shoes, and home fashions, and differentiates itself with an expanded assortment of ﬁ ne jew-
elry and accessories. T.J. Maxx stores average approximately 30,000 square feet in size.

Marshalls  was  acquired  by  TJX  in  1995,  and  together  with  T.J.  Maxx,  forms  The  Marmaxx 
Group, the largest off-price retailer of apparel and home fashions in the U.S. Marshalls oper-
ated 806 stores in 42 states and Puerto Rico at 2008’s year-end. With a product assortment 
similar  to  T.J.  Maxx,  Marshalls  differentiates  itself  with  a  full  line  of  footwear  as  well  as  a 
broader men’s selection. In 2008, Marshalls launched a new concept called Shoe MegaShop 
by Marshalls, which is a standalone store featuring shoes and accessories. Marshalls stores 
average approximately 32,000 square feet in size.

HomeGoods,  introduced  in  1992,  is  a  U.S.  off-price  retailer  of  home  fashions  including  a 
broad  and  ever-fresh  array  of  giftware,  home  basics,  accent  furniture,  lamps,  rugs,  decora-
tive accessories, children’s furniture, seasonal merchandise, and other fashions for the home. 
This chain operates in a standalone and superstore format, which couples HomeGoods with 
T.J. Maxx or Marshalls. At 2008’s year-end, HomeGoods operated 318 stores, with standalone 
stores averaging approximately 27,000 square feet.

Launched in 1998, A.J. Wright, like T.J. Maxx and Marshalls, sells off-price family apparel, 
home fashions and other merchandise. Catering to the entire family, key apparel categories 
for A.J. Wright include basics, children’s, women’s plus sizes, juniors apparel, young men’s, 
and  footwear.  Unlike  our  other  chains,  A.J. Wright  primarily  targets  the  moderate-income 
customer. A.J. Wright operated 135 stores at 2008’s year-end, with an average size of approxi-
mately 26,000 square feet. 

Winners  is  the  leading  off-price  apparel  and  home  fashions  retailer  in  Canada,  having 
been acquired by TJX in 1990. Winners offers a merchandise mix similar to T.J. Maxx and 
Marshalls, including women’s, children’s and men’s apparel, which consists of family foot-
wear, ﬁ ne jewelry, lingerie, and accessories, as well as home fashions. Winners operated 200 
stores at 2008’s year-end, which average approximately 29,000 square feet in size. In 2008, 
Winners opened two STYLESENSE stores, which offer exclusively shoes and accessories in a 
standalone format.

HomeSense, launched in 2001, introduced the home fashions off-price concept to Canada. 
Similar to HomeGoods in the U.S., HomeSense offers customers a wide and rapidly changing 
selection of off-price home fashions, including giftware, home basics, accent furniture, lamps, 
and  accessories  for  the  home.  This  chain  operates  in  a  standalone  and  superstore  format, 
which pairs HomeSense with Winners. At 2008’s year-end, HomeSense operated 75 stores in 
Canada, with standalone stores averaging approximately 25,000 square feet. 

Launched in 1994, T.K. Maxx introduced off-price retailing to Europe, and is Europe’s only 
major off-price retailer. T.K. Maxx operates stores in the U.K. and Ireland, and has recently 
expanded to Germany. T.K. Maxx offers a merchandise mix similar to T.J. Maxx and Marshalls 
in the U.S. and Winners in Canada, including brand name family apparel, which consists of  
women’s footwear, lingerie and accessories, as well as home fashions. T.K. Maxx ended 2008 
with 235 stores, which average approximately 32,000 square feet in size. 

HomeSense introduced the home fashions off-price concept to the U.K. in 2008. Patterned 
after HomeGoods in the U.S. and HomeSense in Canada, this business offers a wide, ever-
fresh  selection  of  top  quality  and  branded  home  fashions  at  great  values  to  our  U.K.  cus-
tomers. Selections include giftware, home basics, accent furniture, lamps, and accessories. 
At 2008’s year-end, HomeSense operated seven stores in the U.K., averaging approximately 
19,000 square feet.

The TJX Companies, Inc.
770 Cochituate Road
Framingham, MA 01701
508-390-1000
www.tjx.com