The TJX Companies, Inc. An Unconventional Retailer… T h e T J X C o m p a n e s , i I n c . 2 0 0 9 A n n u a l R e p o r t The TJX Companies, Inc. 770 Cochituate Road Framingham, MA 01701 508-390-1000 www.tjx.com 2009 Annual Report TJX_AR09_04.06.10-cover_ACME.indd 1 4/19/10 7:04 AM Our comparable store sales have increased in recessions and recoveries... Customers from a wide range of income brackets find our values compelling… We added >2,000 new vendors in 2009... ...with Sustainable Profitability We ship 30.8 million items to our stores every week… Our store layouts have no walls between departments… We operate successfully in 6 countries... 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 2,700 stores and approximately 154,000 Associates. We see ourselves as a global, off-price, value retailer and our 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. The values we offer appeal to a broad range of customer income demographics, with our core target customer being a middle- to upper-middle-income shopper, who is fashion and value conscious and fits the same pro- file as a department store shopper. A.J. Wright targets a more moderate-income market. T.J. Maxx, Marshalls, A.J. Wright, Winners, and T.K. Maxx offer brand name family apparel, footwear, acces- sories, lingerie, as well as home fashions, and in certain chains, fine jewelry. HomeGoods, HomeSense in Canada, and HomeSense in Europe offer exclusively home fashions, including a broad and ever- fresh array of giftware, home basics, accent furniture, lamps, and accessories for the home. UnITed STATeS TJX CAnAdA 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 890 stores in 48 states at year-end 2009. T.J. Maxx differentiates itself with an expanded assortment of fine jewelry and accessories. T.J. Maxx stores average approximately 30,000 square feet in size. Winners is the leading off-price apparel and home fash- ions retailer in Canada, having been acquired by TJX in 1990. Winners operated 211 stores at 2009’s year-end, which average approximately 29,000 square feet in size. Winners also began testing STYLESENSE, which offers exclusively women’s shoes and accessories, in 2008. Marshalls was acquired by TJX in 1995, and with T.J. Maxx, forms The Marmaxx Group, the largest off-price retailer of apparel and home fashions in the U.S. Marshalls operated 813 stores in 42 states and Puerto Rico at 2009’s year-end. Marshalls differentiates itself with an expanded footwear department and The Cube, an expanded juniors department, and carries a broader selection of men’s apparel. Marshalls also operates the Shoe MegaShop by Marshalls, a standalone store featuring shoes and accesso- ries. Marshalls stores average approximately 32,000 square feet in size. HomeSense introduced the home fashions off-price concept to Canada in 2001. This chain operates in a standalone and superstore format, which pairs HomeSense with Winners. At 2009’s year-end, HomeSense operated 79 stores in Canada, with standalone stores averaging approximately 25,000 square feet in size. TJX eURope HomeGoods, introduced in 1992, is a destination for off- price home fashions. HomeGoods operates in a standalone and superstore format which couples HomeGoods with T.J. Maxx or Marshalls. At 2009’s year-end, HomeGoods operated 323 stores, with standalone stores averaging approximately 27,000 square feet in size. Launched in 1998, A.J. Wright sells off-price family ap- parel, home fashions, and other merchandise, but unlike our other chains, primarily targets the moderate-income cus- tomer. A.J. Wright operated 150 stores at 2009’s year-end, with an average size of approximately 25,000 square feet. Launched in 1994, T.K. Maxx introduced off-price retailing to the U.K. and Ireland, and is Europe’s only major off-price retailer. T.K. Maxx expanded into Germany in 2007 and into Poland in 2009. T.K. Maxx offers top-brand apparel as well as home fashions at great values, and ended 2009 with 263 stores, which average approximately 32,000 square feet in size. HomeSense introduced the off-price home fashions concept to the U.K. in 2008. Patterned after HomeGoods in the U.S. and HomeSense in Canada, this business offers our U.K. customers top-quality home fashions at great values. At 2009’s year-end, HomeSense operated 14 stores, each averaging approxi- mately 20,000 square feet in size. TJX_AR09_04.06.10-cover_ACME.indd 2 4/19/10 7:04 AM …In 33 years, our annual consolidated comp sales have declined only once. …Our demographic reach is one of the widest in apparel retail. …Our vast vendor universe now numbers >12,000. and Global Growth ...That works out to inventories turning about 9 times per year in our stores. …This flexibility enables us to shift merchandise categories rapidly as consumers’ tastes change. …Very few U.S. retailers have expanded profitably internationally. TJX_AR09_04.07.10-interior-pages.indd 1 4/19/10 7:20 AM TJX is an unconventional retailer. Our stores have no walls between departments and our business model is extremely flexible, which allows us to navigate various economic and business cycles successfully. Our inventories turn about nine times per year at store level, which enables our buyers to buy with short lead times, reacting quickly to changing consumer demand and driving strong merchandise margins. We source globally and operate more like a sourcing machine than most retailers. We have an unusually broad demographic reach. We are one of the very few U.S. retailers to have grown successfully in Europe, where we continue to have major growth potential. These elements have been at the root of our consistent, successful performance, having delivered steady earnings growth, some of the highest returns on investment in retail, and only one year in 33 with a negative consolidated comparable store sales figure. These elements are also at the root of our confidence in our ability to continue to grow our top and bottom lines in 2010 and beyond and that our Company can grow to be a $30 billion and then a $40 billion Company in the longer term. To Our Fellow Shareholders: The year 2009 was an outstanding year for our Company. In one of the worst economic environments the U.S., Canada and Europe have ever faced, we delivered superior results, with all of our businesses achieving top- and bottom-line growth that exceeded our expec- tations. Our strong sales performance was driven by significant increases in customer traffic as a whole new group of consumers were attracted to our selections of top brands at great values. We ran our business with historically low levels of inventories, leading to faster inventory turns, and significantly reduced our costs, which fueled profitability. We seized the day by taking advantage of the unusually good real estate opportunities that the economic environment presented and also opened thousands of new vendor doors. We also learned a great deal from managing through these tough times that will benefit our business in the future. We surpassed the $20-billion milestone in 2009, with net sales reaching $20.3 billion, a 7% increase over the 53-week prior year. Consolidated comparable store sales increased by a strong 6% over last year despite compari- sons that were significantly more challenging than those of most other retailers. Net income from continuing operations rose to $1.2 bil- lion, and diluted earnings per share from con- tinuing operations were $2.84, a 48% increase over the adjusted $1.92 in the prior year.* The year 2009 marks our 14th consecutive year of earnings per share growth on a continuing operations basis. Overall, we grew total square footage by 3% in 2009, netting 91 additional stores to end the year with 2,743 stores. CONFIDENCE IN TOP-LINE GROWTH Consumers Shift to Value We saw significant increases in customer transactions across all of our businesses in 2009. We believe that there has been a para- digm shift among consumers to value and that our new customers will continue to be attracted to our great values even as the reces- * On a GAAP basis, diluted earnings per share from continuing operations increased 37% over $2.08 in the prior year. Fiscal 2009 adjusted earnings per share from continuing operations exclude the positive impacts of a $.09 per share benefit from the 53rd week in the fiscal year, a $.04 per share reduction to the reserve for the previously announced computer intrusion(s) and a $.03 per share benefit due to a tax-related adjustment. 2 TJX_AR09_04.07.10-interior-pages.indd 2 4/19/10 7:20 AM sion abates. Whether the economy is weak or strong, value isn’t going out of style! Customers have shopped with us during good economic times and recessions, and they have stayed with us after the recessions have ended. What sets this recession apart from previous ones is that we have seen positive business trends accelerate during the recession, underscoring our belief that there has been a fundamental shift in the consumer psyche toward value. Unusually Broad Customer Appeal In 2009, we grew our customer base significantly as we have attracted customers from the moderate-, middle- and high- income brackets with our values. Internation- ally, our customer demographic reach is even greater than in the U.S. as we are the only major off-price retailer operating on an inter- national platform. Our customer research tells us that the new customers we gained in 2009 are from a widening range of demographic groups and even more importantly, that they intend to continue shopping our stores. Further, the opportunity for us to attract even more customers and gain more market share with our values is enormous. Our customer research further tells us that 75% of U.S. consumers did not shop our stores in the past year, which translates to tens of millions of untapped shoppers in the U.S. alone! In 33 years of business, our consolidated comparable store sales have increased in strong and weak economies and declined in only one year. This gives us confidence in our ability to continue achieving profitable growth. TJX_AR09_04.07.10-interior-pages.indd 3 4/19/10 7:20 AM T.J. Maxx in the 1980s Investing to Retain New Customers In the tough economic environment of 2009, we were one of the few retailers to invest significantly in marketing and enhancing our customers’ shopping experience, and we will continue to prioritize investments to drive customer traffic in 2010. Our marketing campaigns are stepping out and educating consumers about off-price. Customers re- sponded extremely well to our new campaign for T.J. Maxx and Marshalls, which enables us to lever advertising costs. We vastly extended our advertising reach and plan to further in- crease our market penetration in 2010. While our effective marketing is driving customers to our stores, a terrific shopping experience is what will keep them coming back. To that end, we are upgrading stores across all of our businesses. At Marmaxx, we began an ex- tensive store remodel program in 2009 and expect to have 700 of our stores in our new prototype by fall 2010, ahead of the holiday selling season. A Global Sourcing Machine One way to think about our business model is as more of a sourcing machine than most other retailers. We source product globally, operating buying offices in nine countries around the world. We work with a vast ven- dor universe and are not dependent on any one particular vendor. In 2009, we opened TJX has an unusually wide demographic reach through our variety of retail chains in many geographies, attracting customers from a wide and diverse group from the moderate-, middle- and higher-income levels. TJX_AR09_04.07.10-interior-pages.indd 4 4/19/10 7:20 AM We opened more than 2,000 new vendor doors in 2009, expanding our vast vendor universe to over 12,000. Our merchant organization of over 700 people is constantly meeting with vendors, finding new sources of merchandise all the time. more than 2,000 new vendor doors, bringing the number of vendors in our universe to over 12,000, and further enhancing our flexibil- ity. Our expectation for 2010 is to continue to grow our vendor base and “WOW” our customers even more with our great values on great brands and great fashions! CONFIDENCE IN BOTTOM-LINE GROWTH Driving Merchandise Margins merchandise margins. In 2010, our plan is to continue these strategies which gives us confidence in our ability to sustain strong profit margins. On a consolidated average, we now turn in-store inventories approximately nine times per year, which, for our customers, means an entirely fresh store about every 40 days! In 2010, we will be investing further in our supply chain to become even more pointed in flowing the right merchandise to the right stores at the right time. One of our key strategies for managing through the 2009 retail environment was maintaining exceptionally low inventory levels which drove faster inventory turns and higher Controlling and Levering Costs At TJX, operating with a low-cost structure has been a cornerstone of our business since the beginning because it enables us to pass TJX_AR09_04.07.10-interior-pages.indd 5 5 4/19/10 7:21 AM great values through to our customers while maintaining strong profitability. We focus aggressively on expenses throughout the operations of our business and our advertis- ing expenses as a percent of sales are very low relative to other retailers. Overall, our selling, general and administrative expenses as a per- centage of sales have remained essentially even over the last four years despite rising health- care and other costs. In 2009, we undertook a series of actions to reduce costs by more than $150 million, which not only helped drive the bottom line, but also reduced our cost structure in ways that will benefit our business longer term. This is another reason for our confidence in our strong profit margins being sustainable. We continue to see meaningful opportunities to remove costs from our business and our expectation is to reduce expenses by $50 - $75 million in 2010. Our “big rock” cost savings initiatives include non-merchan- dise procurement, improving efficiencies at our stores and distribution centers, employing best practices and further improv- ing our supply chain. The cost leverage that we are gaining as we grow our businesses is another major factor driving our profitable growth. Our younger businesses continue to move toward their targeted profit margin potentials. As they expand their store bases, we gain We ship a total of 30.8 million items to our stores in an average week. Our in-store inventories turn an average of about nine times per year, meaning our customers experience an entirely fresh store about every 40 days! TJX_AR09_04.07.10-interior-pages.indd 6 4/19/10 7:21 AM Our stores have no walls between departments, which allows us to shift product assortments quickly as customers’ tastes change. This helps drive business and also leads to higher merchandise margins. leverage on infrastructure costs. We also lever costs as our more established businesses continue to add stores to their chains, and in Europe, we are strengthening the bottom line as we expand because we are spreading costs across a wider European store base. OUR VISION FOR PROFITABLE GROWTH Prioritizing Investments Our vision is to grow TJX as a global off- price/value Company. As always, we will take a strategic, deliberate approach to growth, prioritizing investments in businesses with the strongest financial performance and opportu- nities. In 2010, we are prioritizing the growth of Marmaxx and TJX Europe. Marmaxx delivered excellent results in 2009, with comparable store sales up a strong 7% and segment profit margin reaching an all-time high of 12%. Today, we believe T.J. Maxx and Marshalls are more differentiated than ever before, giving customers more reasons to shop both chains. With the changing retail landscape, we have both big and small market opportunities for Marmaxx. In 2010, we plan to net 53 additional stores at T.J. Maxx and Marshalls, combined. Longer term, we now believe that Marmaxx has the potential to add several hundred more stores. In Europe, our business has developed from a promising growth seed into a core business over the last 15 years. T.K. Maxx TJX_AR09_04.07.10-interior-pages.indd 7 7 4/19/10 7:21 AM is now the 7th largest fashion retailer in the U.K.! Overall, TJX Europe outperformed our 2009 expectations, at the top and bottom line. We expect T.K. Maxx in Germany, launched in 2007, to be profitable in 2010. In Poland, where we opened our first T.K. Maxx stores in fall 2009, initial results are very promising. Customer response to HomeSense in the U.K., which we opened in 2008, is phenomenal. We are the only major off-price retailer of any size in Europe and our growth opportunities are vast. We expect to net a total of 54 additional stores in Europe in 2010. We will take a steady approach to support- ing our HomeGoods and A.J. Wright growth vehicles in 2010, with a view to accelerat- ing store growth in 2011. HomeGoods had an outstanding year in 2009, sharpening its values and delivering segment profit margins that support our long-term growth plans. A.J. Wright drove store profit contributions in 2009 to levels that give us confidence to ultimately roll out this chain further. At TJX Canada, which also delivered strong performance in 2009 and has the highest return on investment of any of our businesses, we are refreshing the store prototype to inject excitement into our Canadian stores. We believe that we continue to have very exciting growth opportunities in Canada. We operate successfully in six countries and are one of the few American retailers to have expanded profitably internationally. In Europe, where our growth potential is vast, we plan to net 54 additional stores in 2010. TJX_AR09_04.07.10-interior-pages.indd 8 4/19/10 7:21 AM Accelerating Store Growth With over 2,700 stores today, we believe we have the potential to ultimately grow to over 4,200 stores with just our current portfolio, in just our current markets. This is our poten- tial before expanding into new countries in Europe, let alone other continents or new off- price concepts. With the vast majority of our new stores exceeding our expectations in 2009 and the success of our growth vehicles, we are picking up the pace of our store growth. We are increasing annual store growth from the 3% level in 2009 to 5% in 2010, and in 2011, we believe we can accelerate to the 6% level. We have a successful track record of de- livering growth with strong financial returns and have increased our returns on investment while expanding our business, which under- scores our confidence in our plans for acceler- ating the pace of growth. Planting Seeds for the Future Beyond our current investment priorities and growth vehicles, we are constantly testing and developing new seeds for growth. Customers love our standalone shoe concepts, Marshalls Shoe MegaShop in the U.S. and STYLESENSE in Canada, and we will continue to fine-tune these stores and strategically take advantage of exceptional real estate deals with these businesses. We are also working on tests that are twists of existing concepts, including our new e-commerce website in the U.K., which could develop into a promising growth vehicle. Further, we are very excited about our plans to launch a new off-price chain in spring 2011, which we believe can add another 90 to 100 stores, and for which we will announce specifics later this year. TEACHING AND TALENT KEy TO SUCCESS With our enormous growth potential, one of our greatest challenges is growing our org- anization with the right talent to support our plans. In the last few years, we have strength- ened our senior management team, developed our existing talent, and taken full advantage of the retail environment to bring in new tal- ent from outside our organization on a global level. We believe that we have one of the best, if not the best, merchant and executive train- ing programs in the retail world. In 2010, we will continue to dedicate resources and remain committed to having the best talent and being the best organization in retail. FINANCIAL STRENGTH CRITICAL IN UNCERTAIN TIMES Our financial stability and flexibility have always been a strong foundation for our business and are even more critical in uncertain economic times. We have an “A” Standard & Poor’s credit rating, one of the strongest in the retail industry, and ample financial liquidity, which are important to our vendors, landlords and other business associates. Our strong operations and low-cost model enable us to deliver superior financial returns that are among the highest, not only in retail, but also many other industries. In 2009, we generated $2.3 billion in cash from operations and our after-tax return on invested capital was greater than 20%. Our operations generate huge amounts of cash, which we deploy with a careful balance between maintaining our financial flexibil- ity, investing in our growth and distributing excess cash to our shareholders. In 2009, we spent a total of $950 million to repurchase TJX shares, retiring 27 million shares, more than we originally planned, and were one of the few retailers to raise its dividend. TJX_AR09_04.07.10-interior-pages.indd 9 9 4/19/10 7:21 AM In 2010, we plan to increase capital spending to approximately $750 million, which will support our plans for accelerated annual store growth, as well as fund our significant investments to enhance our stores and provide infrastructure for future growth. Simultaneously, we plan to increase the distribution of excess cash to our shareholders. We expect to repurchase $900 million to $1 billion of TJX stock in 2010. Further, we increased the per-share dividend by 25% in April 2010. This increase represents the 14th consecutive year we have increased the dividend. These actions underscore our confidence in our ability to drive profitable sales and distribute excess cash to shareholders while simultaneously reinvesting in the business and maintaining our financial flexibility. CONFIDENCE IN OUR NEAR- AND LONG-TERM GLOBAL VISION We continue to firmly believe in our vision as a global, off-price/value Company. We start 2010 with very strong momentum and are extremely well positioned to capitalize upon the value-conscious mindset of consumers. Our very broad customer appeal is widen- ing even further in this environment. We are reaching new customers through our effec- tive marketing and investing in the shopping experience to retain them. We remain focused on running with leaner, faster-turning inven- tories and controlling and levering costs to drive profitability. We have plentiful growth opportunities and are confident that we will continue to deliver growth with strong financial returns. Further, our “no walls” ap- proach to communicating with one another is enabling us to lever all aspects of our business for the future and grow as a global Company. We are excited about our growth prospects for 2010 and believe that TJX has many more great years to come! We sincerely thank our 154,000 Associates for their hard work, dedication and excellent execution in 2009. We extend our gratitude to our customers for their loyalty and patron- age, and we also thank our fellow sharehold- ers, vendors, and other business associates for their ongoing support. Respectfully, Bernard Cammarata Chairman of the Board Carol Meyrowitz President and Chief Executive Officer 10 TJX_AR09_04.07.10-interior-pages.indd 10 4/19/10 7:21 AM The TJX Companies…Always about V.A.L.U.E. Since our inception, delivering value to our customers has been our mission, valuing our Associates has been at our core, returning value to our shareholders has been a constant priority and adding value to our communities has been a central pursuit. Above all else, our corporate value has always been to act with integrity which impacts everything we do. As our Company grows, so must our work to ensure that our core values of integrity and openness continue to be an integral part of our world. To that end, we are introducing our global Corporate Social Responsibility program, V.A.L.U.E., aimed at helping us continue to make a positive, sustainable impact within five major areas that are key to our business and the interests of our shareholders, Associates, customers, vendors and communities. V. Vendor Social Compliance Since 1999, TJX has maintained a robust, global Vendor Social Compliance Program. The Program has a dedicated manager who reports to a senior compliance officer, and has monitoring capabilities to see that TJX’s vendors are adhering to our Vendor Code of Conduct. A. Attention to Governance TJX has long been recognized and ranked highly for its attention to corporate governance. Our Board of Directors is comprised of individuals who bring high integrity, diverse backgrounds and a vast array of experience to the ethical oversight of the Company. The Board is guided by a Code of Business Conduct & Ethics. Policies and practices for Associates are clearly outlined in the Company’s Code of Conduct and TJX Executives are also bound by a Code of Ethics for Executives. L. Leveraging Differences With an extremely diverse workforce (in U.S. alone, over 75% women and 50% minorities), TJX believes that in our diversity lies great strength. Through our Company of Choice program, we promote the benefits of leveraging the differences among our customers as a Retailer of Choice, among our Associates as an Employer of Choice and within our communities as a Neighbor of Choice. U. United with Our Communities Through our philanthropic giving, volunteerism, community relations and workforce initiatives, TJX has long been a Neighbor of Choice, having a lasting, positive impact on the lives of many people within our communities. Our focus continues to be the support of organizations that help children, women and fami- lies, aid education, assist the disadvantaged, and help prevent domestic violence. E. Environmental Improvements TJX has for many years pursued initiatives that are smart for our business and improve the environment, monitoring energy and water usage. Through our Energy Management Group, we are implementing con- servation strategies and best practices and monitoring year-over-year performance. Our distribution centers conserve energy, and reduce, reuse and recycle waste. We are members of the EPA’s SmartWay Transport Partnership, tasked with finding innovative ways to reduce fuel consumption and greenhouse emissions. While our commitment to social responsibility and sustainability, along with the good work behind each of the V.A.L.U.E. elements, has been taking place at TJX for many years, with the launch of this program, the results of our work will be more visible and accessible to our growing community of stakeholders. TJX_AR09_04.07.10-interior-pages.indd 11 11 4/19/10 7:21 AM S E L A S T E N s n o i l l i b $ 22 20 16 12 8 4 0 s n o i l l i m $ 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 CONSOLIDATED PERFORMANCE Succeeding in All Types of Environments T I F O R P T N E M G E S s n o i l l i m $ 2,200 2,000 1,600 1,200 800 400 0 82* 83* 91* 02* 09* 10* 82* 83* 91* 02* 09* 10* * Recession ( f y ) * Recession ( f y ) Reinvesting in Our Business Returning Value to Shareholders Growing a Global, Off-Price/Value Company 150 marmaxx 1 homegoods a.j.wright winners 2 (canada) homesense (canada) t.k.maxx (u.k. & ireland) homesense (u.k. & ireland) t.k.maxx (germany) t.k.maxx (poland) 14 24 4 1,703 2,000+ 323 550-600 500+ 211 240 79 90 235 300-325 s e r o t s 100-150 250-300 100 0% 20% 40% 60% 80% 100% tjx stores f y 10: 2,743 potential: ~ 4,200 ( f y e ) 1 Includes Shoe MegaShop by Marshalls 2 Includes STYLESENSE 06 10 06 10 06 10 ( f y ) Property Additions Net Cash from Operating Activities Share Repurchases Dividend Payments TJX_AR09_04.07.10-interior-pages.indd 12 4/19/10 7:21 AM FORM 10-KContentsBusiness OverviewStore LocationsSelected Financial DataManagement’s Discussion and AnalysisReport of Independent Registered Public Accounting FirmConsolidated Financial StatementsNotes to Consolidated Financial Statements: Selected Business Segment Financial Information Selected Quarterly Financial Datapage372122F-2F-3F-7F-31F-33 2006base yeardollars2007200820092010tjxdjaris&p180160140120100806040200Th e 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, 2010. Th e graph assumes that $100 was invested on January 29, 2005, in each of TJX’s common stock, the S&P Composite-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 THE S&P 500 INDEX AND THE DJ APPAREL INDEXTJX Stock Performance UNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWASHINGTON,DC20549FORM10-K[x]AnnualReportPursuanttoSection13or15(d)oftheSecuritiesExchangeActof1934ForthefiscalyearendedJanuary30,2010or[]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[]IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).YES[x]NO[]IndicatebycheckmarkifdisclosureofdelinquentfilerspursuanttoItem405ofRegulationS-K(§229.405ofthischapter)isnotcontainedherein,andwillnotbecontained,tothebestofregistrant’sknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.[x]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-affiliatesoftheregistrantonAugust1,2009was$15,271,706,337,basedontheclosingsalepriceasreportedontheNewYorkStockExchange.Therewere409,386,126sharesoftheregistrant’scommonstock,$1.00parvalue,outstandingasofJanuary30,2010.DOCUMENTSINCORPORATEDBYREFERENCEPortionsoftheProxyStatementtobefiledwiththeSecuritiesandExchangeCommissioninconnectionwiththeAnnualMeetingofStockholderstobeheldonJune2,2010(PartIII). CautionaryNoteRegardingForward-LookingStatementsThisForm10-Kandour2009AnnualReporttoShareholderscontain“forward-lookingstatements”intendedtoqualifyforthesafeharborfromliabilityestablishedbythePrivateSecuritiesLitigationReformActof1995,includingsomeofthestatementsinthisForm10-KunderItem1,“Business,”Item7,“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations,”andItem8,“FinancialStatementsandSupplementaryData,”andinour2009AnnualReporttoShareholdersunder“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,foreignexchangeratesandresultsandtheoutcomeofcontingenciessuchaslegalproceedings.Wecannotguaranteethattheresultsandotherexpectationsexpressed,anticipatedorimpliedinanyforward-lookingstatementwillberealized.TheriskssetforthunderItem1AofthisForm10-Kdescribemajorriskstoourbusiness.Avarietyoffactorsincludingtheseriskscouldcauseouractualresultsandotherexpectationstodiffermateriallyfromtheanticipatedresultsorotherexpectationsexpressed,anticipatedorimpliedinourforward-lookingstatements.Shouldknownorunknownrisksmaterialize,orshouldourunderlyingassumptionsproveinaccurate,actualresultscoulddiffermateriallyfrompastresultsandthoseanticipated,estimatedorprojectedintheforward-lookingstatements.Youshouldbearthisinmindasyouconsiderforward-lookingstatements.Ourforward-lookingstatementsspeakonlyasofthedatesonwhichtheyaremade,andwedonotundertakeanyobligationtoupdateanyforward-lookingstatement,whethertoreflectnewinformation,futureeventsorotherwise.Youareadvised,however,toconsultanyfurtherdisclosureswemaymakeinourfuturereportstotheSecuritiesandExchangeCommission(‘SEC’),onourwebsite,orotherwise.2 PartIITEM1.BUSINESSBUSINESSOVERVIEWTheTJXCompanies,Inc.(TJX)istheleadingoff-priceapparelandhomefashionsretailerintheUnitedStatesandworldwide.Ourover2,700storesofferarapidlychangingassortmentofquality,brand-nameanddesignermerchandiseatpricesgenerally20%to60%belowdepartmentandspecialtystoreregularpriceseveryday.RetailConcepts:Weoperateeightoff-priceretailchainsintheU.S.,CanadaandEuropeandareknownforourtreasurehuntshoppingexperienceandexcellentvaluesonbrand-namemerchandise.Weturnourinventoriesrapidlyrelativetotraditionalretailerstocreateasenseofurgencyandexcitementforourcustomersandtoencouragefrequentcustomervisits.Ourflexible“nowalls”businessmodelallowsustoexpandandcontractmerchandisecategoriesquicklyinresponsetoconsumers’changingtastes.Thevaluesweofferappealtoabroadrangeofcustomersacrossdemographicgroupsandincomelevels.Theoperatingplatformsandstrategiesofallofourretailconceptsaresynergistic.Asaresult,wecapitalizeonouroff-priceexpertiseandsystemsthroughoutourbusiness,leveragingbestpractices,initiativesandnewideasanddevelopingtalentacrossourconcepts.Wealsoleveragethesubstantialbuyingpowerofourbusinessestodevelopourglobalrelationshipswithvendors.IntheUnitedStates:—T.J.MAXXandMARSHALLS:T.J.MaxxandMarshalls(togetherknownasMarmaxx)arethelargestoff-priceretailersintheUnitedStateswithatotalof1,703stores.WefoundedT.J.Maxxin1976andacquiredMarshallsin1995.Bothchainssellfamilyapparel(includingfootwearandaccessories),homefashions(includinghomebasics,accentfurniture,lamps,rugs,walldécor,decorativeaccessoriesandgiftware)andothermerchandise,primarilytargetingthemiddletoupper-middleincomecustomerdemographic.WedifferentiateT.J.MaxxandMarshallsthroughproductassortment(includinganexpandedassortmentoffinejewelryandaccessoriesatT.J.Maxxandafulllineoffootwearandbroadermen’sandjuniors’offeringsatMarshalls),in-storeinitiatives,marketingandstoreappearance.ThisdifferentiatedshoppingexperienceatT.J.MaxxandMarshallsencouragesourcustomerstoshopbothchains.—HOMEGOODS:HomeGoods,introducedin1992,isanoff-priceretailerofhomefashionsintheU.S.Through323stores,itsellsabroadarrayofhomebasics,giftware,accentfurniture,lamps,rugs,walldécor,decorativeaccessories,children’sfurniture,seasonalmerchandiseandotherfashionsforthehome.TheHomeGoods’targetcustomersaresimilartothoseofT.J.MaxxandMarshalls.—A.J.WRIGHT:Launchedin1998,A.J.Wright,likeT.J.MaxxandMarshalls,sellsoff-pricefamilyapparel,homefashionsandothermerchandise.Cateringtotheentirefamily,keyapparelcategoriesforA.J.Wright’s150storesincludebasics,children’s,women’splussizes,juniors,youngmen’sandfootwear.Differentfromallofourotherchains,A.J.Wrightprimarilytargetsthemoderate-incomecustomerdemographic.InCanada:—WINNERS:Acquiredin1990,Winnersistheleadingoff-priceapparelandhomefashionsretailerinCanada.Themerchandiseofferingatits211storesacrossCanadaanditstargetcustomersaresimilartoT.J.MaxxandMarshalls.In2008,WinnersbegantestingStyleSense,anewconceptthatoffersfamilyfootwearandaccessories.—HOMESENSE:HomeSenseintroducedthehomefashionsoff-priceconcepttoCanadain2001.Thechainhas79storeswithamerchandisemixofhomefashionsandtargetcustomerssimilartoHomeGoods.InEurope:—T.K.MAXX:Launchedin1994,T.K.Maxxintroducedoff-pricetoEuropeandremainsEurope’sonlymajoroff-priceretailerofapparelandhomefashions.With263stores,T.K.MaxxoperatesintheU.K.andIrelandas3 wellasGermany,whereitexpandedin2007,andPoland,whereitexpandedin2009.T.K.MaxxoffersamerchandisemixandtargetscustomerssimilartoT.J.MaxxandMarshallsintheU.S.andWinnersinCanada.—HOMESENSE:HomeSenseintroducedthehomefashionsoff-priceconcepttotheU.K.in2008andits14storesofferamerchandisemixofhomefashionsintheU.K.likethatofHomeGoodsintheU.S.andHomeSenseinCanada.HomeSenseprimarilytargetscustomerssimilartothoseofHomeGoodsintheU.S.andHomeSenseinCanada.FlexibleBusinessModel:Ouroff-pricebusinessmodelisflexible,particularlyforacompanyofoursize,allowingustoreacttomarkettrends.Ouropportunisticbuyingandinventorymanagementstrategiesgiveusflexibilitytoadjustourassortmentsmorefrequentlythantraditionalretailers,andourstoresanddistributioncentersarebuiltanddesignedtosupportthisflexibility.Bymaintainingaliquidinventoryposition,ourmerchantscanbuyclosetoneed,enablingthemtobuyintocurrentmarkettrendsandtotakeadvantageofopportunitiesinthemarketplace.Buyingclosetoneedgivesustheabilitytoturnourinventorymorerapidlyandadjustourpricingtothecurrentmarketmorefrequentlythanconventionalretailers.Oursellingfloorspaceisflexible,withoutwallsbetweendepartmentsandlargelyfreeofpermanentfixtures,sowecaneasilyexpandandcontractdepartmentsinresponsetocustomerdemand,availablemerchandiseandfashiontrends.Ourdistributionfacilitiesaredesignedtoaccommodateourmethodsofreceivingandshippingbothsmallandlargequantitiesofproducttoourlargestorebasequicklyandefficiently.OpportunisticBuying:Wearedifferentiatedfromtraditionalretailersbyouropportunisticbuyingofquality,brandnamemerchandise.Wepurchasethemajorityofourapparelinventoryandasignificantportionofourhomefashioninventoryopportunisticallyandpurchasevirtuallyallofourinventoryatdiscountsfrominitialwholesaleprices.Ourmerchantorganizationnumbersover700,andweoperate12buyingofficesintheU.S.andabroad.Wecontinuetoopenmanynewvendorseachyear,sourcingfromavendoruniverseofover12,000infiscal2010.Incontrasttotraditionalretailers,whichtypicallyordergoodsfarinadvanceofthetimetheproductappearsonthesellingfloor,ourmerchantsareinthemarketplacevirtuallyeveryweek,buyingprimarilyforthecurrentsellingseason,andtoalimitedextent,forafuturesellingseason.Wehavenotexperienceddifficultyinobtainingadequateamountsofqualityinventoryforourbusinessineitherfavorableordifficultretailenvironmentsandbelievethatwewillcontinuetohaveadequateinventoryaswecontinuetogrow.Buyinglaterintheinventorycyclethantraditionalretailersandmaintainingflexibilityinadaptingtochangingconditions,weareabletotakeadvantageofopportunitiestoacquiremerchandiseatsubstantialdiscounts,suchasordercancellationsandmanufactureroverruns,whichregularlyarisefromtheroutineflowofinventoryinthehighlyfragmentedapparelandhomefashionsmarketplace.Asaresult,weareabletobuythevastmajorityofourinventoryopportunisticallyanddirectlyfrommanufacturers,withsomecomingfromretailersandothersources.Asmallpercentageofthemerchandisewesellisprivatelabelmerchandiseproducedspecificallyforusbythirdpartymanufacturers.Webelieveanumberoffactorsmakeusanattractiveoutletforthevendorcommunityandprovideusexcellentaccessonanongoingbasistoleadingbrandedmerchandise.Wearewillingtopurchaseless-than-fullassortmentsofitems,stylesandsizes,paypromptlyanddonotaskfortypicalretailconcessions(suchasadvertising,promotionalandmarkdownallowances),deliveryconcessions(suchasdropshipmentstostoresordelayeddeliveries)orreturnprivileges.Weareabletopurchasequantitiesofinventorythatrangefromsmalltoverylarge,andwehavetheabilitytosellproductthroughageographicallydiversenetworkofstores.Importantly,inTJX,weoffervendorsanoutletwithfinancialstrengthandanexcellentcreditrating.InventoryManagement:Weofferourcustomersarapidlychangingselectionofmerchandisetocreatea“treasurehunt”experienceinourstores.Toachievethis,weseektorapidlyturntheinventoryinourstores,regularlyofferingfreshselectionsofapparelandhomefashionsatexcellentvalues.Ourspecializedinventoryplanning,purchasing,monitoringandmarkdownsystems,coupledwithdistributioncenterstorage,processing,handlingandshippingsystems,enableustotailorthemerchandiseinourstorestolocalpreferences,achieverapidin-storeinventoryturnoveronavastarrayofproductsandsellsubstantiallyallmerchandisewithintargetedsellingperiods.Wemakepricingandmarkdowndecisionsandstoreinventoryreplenishmentdeterminationscentrally,usinginformationprovidedbyspecializedcomputer4 systems,designedtomoveinventorythroughourstoresinatimelyanddisciplinedmanner.Wedonotgenerallyengageinpromotionalpricingactivity.LowCostOperations:Weoperatewithalowcoststructurecomparedtomanyothertraditionalretailers.Wefocusaggressivelyonexpensesthroughoutourbusiness.Ouradvertisingbudgetasapercentageofsalesislowcomparedtotraditionalretailers.Wedesignourstores,generallylocatedincommunityshoppingcenters,toprovideapleasant,convenientshoppingenvironmentbutdonotspendheavilyonstorefixtures.Additionally,ourdistributionnetworkisdesignedtoruncosteffectively.Wecontinuetopursuecostsavingstrategiesinareassuchasnon-merchandiseprocurement,operatingefficienciesinourdistributioncentersandstores,aswellasefficienciesinoursupplychain.CustomerService:Whileweofferaself-serviceformat,wetrainourstoreassociatestoprovidefriendlyandhelpfulcustomerservice.Wealsohavecustomer-friendlyreturnpolicies.Weacceptavarietyofpaymentmethodsincludingcash,creditcardsanddebitcards.IntheU.S.,weofferaco-brandedTJXcreditcardandaprivatelabelcreditcard,boththroughamajorbank,butdonotmaintaincustomercreditreceivablesrelatedtoeitherprogram.Distribution:Weoperate13distributioncentersintheU.S.,2inCanadaand4intheU.K.Ourdistributioncentersencompassapproximately11millionsquarefeet.Weshipsubstantiallyallofourmerchandisetoourstoresthroughthesedistributioncenters,whicharelarge,highlyautomatedandbuilttosuitourspecific,off-pricebusinessmodel,aswellaswarehousesoperatedbythirdparties.Weshippedapproximately1.6billionunitstoourstoresduringfiscal2010.StoreGrowth:ExpansionofourbusinessthroughtheadditionofnewstoresisanimportantpartofourstrategyforTJXasaglobal,off-price,valuecompany.Thefollowingtableprovidesinformationonthegrowthandpotentialgrowthofeachofourchains:ApproximateAverageStoreSize(squarefeet)Fiscal2009Fiscal2010Fiscal2011(estimated)EstimatedUltimateNumberofStoresNumberofStoresatYearEndIntheUnitedStates:T.J.Maxx30,000874890Marshalls32,000806813Marmaxx1,6801,7031,7562,000HomeGoods25,000318323332550-600A.J.Wright25,000135150158500InCanada:Winners29,000202211215240HomeSense24,00075798190InEurope:T.K.Maxx32,000235263311650-725*HomeSense20,00071420100-150**2,6522,7432,8734,130-4,305*U.K.,Ireland,GermanyandPolandonly**U.K.andIrelandonlyIncludedintheMarshallsstorecountsabovearefree-standingShoeMegaShopbyMarshallsstores,whichsellfamilyfootwear(3storesatfiscal2010yearend).IncludedintheWinnersstorecountsaboveareStyleSensestoresinCanada,whichsellfamilyfootwearandaccessories(3storesatfiscal2010yearend).SomeofourHomeGoodsandHomeSensestoresareco-locatedwithoneofourapparelstoresinasuperstoreformat.Wecounteachofthestoresinthesuperstoreformatasaseparatestore.5 RevenueInformation:Thepercentagesofourconsolidatedrevenuesbygeographyforthelastthreefiscalyearswereasfollows:Fiscal2008Fiscal2009Fiscal2010UnitedStates77%77%78%Northeast26%26%26%Midwest13%13%13%South(includingPuertoRico)25%25%26%West13%13%13%Canada11%11%11%Europe12%12%11%Total100%100%100%Thepercentagesofourconsolidatedrevenuesbymajorproductcategoryforthelastthreefiscalyearswereasfollows:Fiscal2008Fiscal2009Fiscal2010Clothingincludingfootwear62%62%61%Homefashions26%25%26%Jewelryandaccessories12%13%13%Total100%100%100%SegmentOverview:Weoperatefivebusinesssegments:threeintheU.S.andoneineachofCanadaandEurope.Eachofoursegmentshasitsownadministrative,buyingandmerchandisingorganizationanddistributionnetwork.OfourU.S.-basedstores,T.J.MaxxandMarshalls,referredtoasMarmaxx,aremanagedtogetherandreportedasasinglesegment,andA.J.WrightandHomeGoodseachisreportedasaseparatesegment.OutsidetheU.S.,ourchainsinCanadaaremanagedtogether,andourchainsinEuropearemanagedtogether.Thus,CanadaisreportedasasegmentandEuropeisreportedasasegment.Moredetailedinformationaboutoursegments,includingfinancialinformationforeachofthelastthreefiscalyears,canbefoundinNoteQtotheconsolidatedfinancialstatements.6 STORELOCATIONSWeoperatedstoresinthefollowinglocationsasofJanuary30,2010:StoresLocatedintheUnitedStates:T.J.Maxx*Marshalls*HomeGoods*A.J.WrightAlabama1842–Arizona11146–Arkansas8–1–California81114347Colorado1174–Connecticut2523107Delaware331–DistrictofColumbia11–1Florida6771333Georgia3727107Idaho511–Illinois37411719Indiana171028Iowa62––Kansas631–Kentucky10432Louisiana910––Maine843–Maryland112377Massachusetts47492120Michigan3320118Minnesota12128–Mississippi53––Missouri13126–Montana3–––Nebraska42––Nevada784–NewHampshire14851NewJersey3140238NewMexico33––NewYork48622421NorthCarolina292010–NorthDakota3–––Ohio381898Oklahoma44––Oregon853–Pennsylvania3931126PuertoRico–166–RhodeIsland5642SouthCarolina1994–SouthDakota2–––Tennessee251363Texas436615–Utah10–2–Vermont411–Virginia312589Washington159––WestVirginia631–Wisconsin17653Wyoming1–––TotalStores890813323150*IncludesT.J.Maxx,MarshallsorHomeGoodsportionofasuperstore.7 StoresLocatedinCanada:Winners*HomeSense*Alberta249BritishColumbia2714Manitoba61NewBrunswick22Newfoundland31NovaScotia82Ontario9836PrinceEdwardIsland1–Quebec3912Saskatchewan32TotalStores21179*IncludesWinnersorHomeSenseportionofasuperstore.StoresLocatedinEurope:T.K.MaxxHomeSenseUnitedKingdom22014RepublicofIreland15–Germany24–Poland4–TotalStores26314CompetitionTheretailapparelandhomefashionbusinessishighlycompetitive.Wecompeteonthebasisoffashion,quality,price,value,merchandiseselectionandfreshness,brandnamerecognition,service,reputationandstorelocation.Wecompetewithlocal,regional,nationalandinternationaldepartment,specialty,off-price,discount,warehouseandoutletstoresaswellasotherretailersthatsellapparel,homefashionsandothermerchandisethatwesell,whetherinstores,throughcataloguesormediaorovertheinternet.EmployeesAtJanuary30,2010,wehadapproximately154,000employees,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-KfiledwithorfurnishedtotheSEC,andanyamendmentstothosedocuments,areavailablefreeofchargeonourwebsite,www.tjx.com,under“SECFilings,”assoonasreasonablypracticableaftertheyareelectronicallyfiled8 withorfurnishedtotheSEC.TheyarealsoavailablefreeofchargefromTJXInvestorRelations,770CochituateRoad,Framingham,Massachusetts,01701.ThepubliccanreadandcopymaterialsattheSEC’sPublicReferenceRoomat100FStreet,NE,Washington,DC20549,1-800-SEC-0330.TheSECmaintainsawebsitecontainingallreports,proxies,informationstatements,andallotherinformationregardingissuersthatfileelectronically(http://www.sec.gov).InformationappearingonTJX’swebsiteisnotapartof,andisnotincorporatedbyreferencein,thisForm10-K.Unlessotherwiseindicated,allstoreinformationinthisItem1isasofJanuary30,2010,andreferencestostoresquarefootagearetogrosssquarefeet.Fiscal2008meansthefiscalyearendedJanuary26,2008,fiscal2009meansthefiscalyearendedJanuary31,2009,fiscal2010meansthefiscalyearendedJanuary30,2010andfiscal2011meansthefiscalyearendingJanuary29,2011.Unlessotherwisestatedorthecontextotherwiserequires,referencesinthisForm10-Kto“TJX,”“we,”“us”and“our”refertoTheTJXCompanies,Inc.anditssubsidiaries.ITEM1A.RISKFACTORSThestatementsinthissectiondescribethemajorriskstoourbusinessandshouldbeconsideredcarefully,inconnectionwithalloftheotherinformationsetforthinthisannualreportonForm10-K.Therisksthatfollow,individuallyorintheaggregate,arethosethatwethinkcouldcauseouractualresultstodiffermateriallyfromthosestatedorimpliedinforward-lookingstatements.Globaleconomicconditionsmayadverselyaffectourfinancialperformance.In2009,economiesworldwidewereincrisis,andglobalfinancialmarketsexperiencedextremevolatility,disruptionandcreditcontraction.Thevolatilityanddisruptiontothecapitalmarketssignificantlyadverselyaffectedglobaleconomicconditions,resultinginadditionalsignificantrecessionarypressuresanddeclinesinemploymentlevels,disposableincomeandactualandperceivedwealth.Althoughtherehasbeensomerecentimprovement,continuingorworsenedadverseeconomicconditions,includinghigherunemployment,energyandhealthcarecosts,interestratesandtaxesandtightercredit,couldcontinuetoaffectconsumerconfidenceanddiscretionaryconsumerspendingadverselyandmayadverselyaffectoursales,cashflowsandresultsofoperations.Additionally,renewedfinancialturmoilinthefinancialandcreditmarketscouldadverselyaffectourcostsofcapitalandthesourcesofliquidityavailabletousandcouldincreaseourpensionfundingrequirements.Fluctuationsinforeigncurrencyexchangeratesmayleadtolowerrevenuesandearnings.InadditiontoourU.S.businesses,weoperatestoresinCanadaandEuropeandplantocontinuetoexpandourinternationaloperations.SalesmadebyourstoresoutsidetheUnitedStatesaredenominatedinthecurrencyofthecountryinwhichthestoreislocated,andchangesinforeignexchangeratesaffectthetranslationofthesalesandearningsofthesebusinessesintoU.S.dollarsforfinancialreportingpurposes.Becauseofthis,movementsinexchangerateshavehadandareexpectedtocontinuetohaveasignificantimpactonournetsalesandearnings.Additionally,weroutinelyenterintoinventory-relatedhedginginstrumentstomitigatetheimpactofforeignexchangeonmerchandisemarginsofmerchandisepurchasedbyourinternationalsegmentsthatisdenominatedincurrenciesotherthantheirlocalcurrencies.InaccordancewithU.S.GAAP,weevaluatethefairvalueofthesehedginginstrumentsandmakemark-to-marketadjustmentsattheendofanaccountingperiod.Theseadjustmentsareofamuchgreatermagnitudewhenthereissignificantvolatilityincurrencyexchangeratesandmayhaveasignificantimpactonourearnings.Inaddition,changesinforeignexchangeratescanincreasethecostofinventorypurchasesbyourbusinessesthataredenominatedinacurrencyotherthanthelocalcurrencyofthebusiness.Whenthesechangesoccursuddenly,itcanbedifficultforustoadjustretailpricesaccordingly,andgrossmargincanbeadverselyaffected.Althoughweimplementforeigncurrencyhedgingandriskmanagementstrategiestoreduceourexposuretofluctuationsinearningsandcashflowsassociatedwithchangesinforeignexchangerates,weexpectthatforeigncurrencyfluctuationscouldhaveamaterialadverseeffectonournetsalesandresultsofoperations.9 Failuretoexecuteouropportunisticbuyingandinventorymanagementcouldadverselyaffectourbusiness.Wepurchasethemajorityofourapparelinventoryandmuchofourhomeinventoryopportunisticallywithourbuyerspurchasingclosetoneed.Todrivetraffictothestoresandtoincreasesamestoresales,thetreasurehuntnatureoftheoff-pricebuyingexperiencerequirescontinuedreplenishmentoffresh,highquality,attractivelypricedmerchandiseinourstores.Whileopportunisticbuyingprovidesourbuyerstheabilitytobuyatdesirabletimesandprices,inthequantitiesweneedandintomarkettrends,itplacesconsiderablediscretioninourbuyers,subjectingustorisksonthetiming,pricing,quantityandnatureofinventoryflowingtothestores.Inaddition,webaseourpurchasesofinventory,inpart,onsalesforecasts.Ifoursalesforecastsdonotmatchcustomerdemand,wemayexperiencehigherinventorylevelsanddecreasedprofitmarginsifwehaveexcessorslow-movinginventory,orwemayhaveinsufficientinventorytomeetcustomerdemand,eitherofwhichcouldadverselyaffectourfinancialperformance.Inadditiontoacquiringinventory,wemustproperlyexecuteourinventorymanagementstrategiesthrougheffectivelyallocatingmerchandiseamongourstores,timelyandefficientlydistributinginventorytostores,maintaininganappropriatemixandlevelofinventoryinstores,appropriatelychangingtheallocationoffloorspaceofstoresamongproductcategoriestorespondtocustomerdemandandeffectivelymanagingpricingandmarkdowns.Failuretoexecuteouropportunisticinventorybuyingandinventorymanagementwellcouldadverselyaffectourperformanceandourrelationshipwithourcustomers.Failuretocontinuetoexpandouroperationssuccessfullycouldadverselyaffectourfinancialresults.Wehavesteadilyexpandedthenumberofconceptsandstoresweoperate.Ourrevenuegrowthisdependent,amongotherthings,uponourabilitytocontinuetoexpandsuccessfullythroughnewstoreopeningsaswellasourabilitytoincreasesamestoresales.Successfulstoregrowthrequiresacquisitionanddevelopmentofappropriaterealestateincludingselectionofstorelocationsinappropriategeographies,availabilityofattractivestoresorstoresitesinsuchlocationsandnegotiationofacceptableterms.Competitionfordesirablesites,increasesinrealestate,constructionanddevelopmentcostsandavailabilityandcostsofcapitalcouldlimitourabilitytoopennewstoresindesirablelocationsinthefutureoradverselyaffecttheeconomicsofnewstores.Wemayencounterdifficultiesinattractingcustomersinnewmarketsforvariousreasonsincludingcustomers’lackoffamiliaritywithourbrandsorourlackoffamiliaritywithlocalcustomerpreferencesandculturaldifferences.Newstoresmaynotachievethesamesalesorprofitlevelsasourexistingstores,andnewandexistingstoresinamarketareamayadverselyaffecteachother’ssalesandprofitability.Further,expansionplacessignificantdemandsontheadministrative,merchandising,storeoperations,distributionandotherorganizationsinourbusinessestomanagerapidgrowth,andwemaynotdososuccessfully.Failuretosuccessfullyidentifycustomertrendsandpreferencestomeetcustomerdemandcouldnegativelyimpactourperformance.Becauseoursuccessdependsonourabilitytomeetcustomerdemand,wetakevariousstepstokeepupwithcustomertrendsandpreferencesincludingcontactswithvendors,monitoringproductcategoryandfashiontrendsandcomparisonshopping.Ourflexiblebusinessmodelallowsustobuyclosetoneedandinresponsetoconsumerpreferencesandtrendsandtoexpandandcontractmerchandisecategoriesinresponsetoconsumers’changingtastes.However,identifyingconsumertrendsandpreferencesandsuccessfullymeetingcustomerdemandischallenging,andwemaynotsuccessfullydoso,whichcouldadverselyaffectourresults.Ourquarterlyoperatingresultscanbesubjecttosignificantfluctuationsandmayfallshortofeitherapriorquarterorinvestors’expectations.Ouroperatingresultshavefluctuatedfromquartertoquarteratpointsinthepast,andtheymaycontinuetodosointhefuture.Ourearningsmaynotcontinuetogrowatratesweplanandmayfallshortofeitherapriorquarterorinvestors’expectations.Ifwefailtomeettheexpectationsofsecuritiesanalystsorinvestors,oursharepricemaydecline.Factorsthatcouldcauseusnottomeetoursecuritiesanalysts’orinvestors’earningsexpectationsincludesomefactorsthatarewithinourcontrol,suchastheexecutionofouroff-pricebuying;selection,pricingandmixofmerchandise;andinventorymanagementincludingflow,markonandmarkdowns;andsomefactorsthatarenotwithinourcontrol,includingactionsofcompetitors,weatherconditions,economicconditions,consumerconfidenceandseasonality.Inaddition,ifwedonotrepurchasethenumberofshareswecontemplatepursuanttoourstockrepurchaseprogram,ourearningspersharemaybeadverselyaffected.Mostofouroperatingexpenses,suchasrentexpenseandassociatesalaries,donotvarydirectlywiththeamountofsalesandaredifficulttoadjustintheshortterm.Asaresult,ifsalesinaparticular10 quarterarebelowexpectationsforthatquarter,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.Therecanbenoassurancethatwewillbeabletocontinuetoexecuteourmarketing,advertisingandpromotionalprogramseffectively,andanyfailuretodosocouldhaveamaterialadverseeffectonourrevenueandresultsofoperations.Compromisesofourdatasecuritycouldmateriallyharmourreputationandbusiness.Intheordinarycourseofourbusiness,wecollectandstorecertainpersonalinformationfromindividuals,suchasourcustomersandassociates,andweprocesscustomerpaymentcardandcheckinformation.Wesufferedanunauthorizedintrusionorintrusions(suchintrusionorintrusions,collectively,the“ComputerIntrusion”)intoportionsofourcomputersystemthatprocessandstoreinformationrelatedtocustomertransactions,discoveredlateinfiscal2007inwhichwebelievecustomerdatawerestolen.Wehavetakenstepsdesignedtofurtherstrengthenthesecurityofourcomputersystemandprotocolsandhaveinstitutedanongoingprogramwithrespecttodatasecurity,consistentwithaconsentorderwiththeFederalTradeCommission.Nevertheless,therecanbenoassurancethatwewillnotsufferafuturedatacompromise.Werelyoncommerciallyavailablesystems,software,toolsandmonitoringtoprovidesecurityforprocessing,transmissionandstorageofconfidentialinformation.Further,thesystemscurrentlyusedfortransmissionandapprovalofpaymentcardtransactions,andthetechnologyutilizedinpaymentcardsthemselves,allofwhichcanputpaymentcarddataatrisk,aredeterminedandcontrolledbythepaymentcardindustry,notbyus.Thisisalsotrueforcheckinformationandapproval.Computerhackersmayattempttopenetrateourcomputersystemand,ifsuccessful,misappropriatepersonalinformation,paymentcardorcheckinformationorconfidentialCompanybusinessinfor-mation.Inaddition,aCompanyassociate,contractororotherthirdpartywithwhomwedobusinessmayattempttocircumventoursecuritymeasuresinordertoobtainsuchinformationmayorinadvertentlycauseabreachinvolvingsuchinformation.Advancesincomputerandsoftwarecapabilitiesandencryptiontechnology,newtoolsandotherdevelopmentsmayincreasetheriskofsuchabreach.Anysuchcompromiseofourdatasecurityandlossofpersonalorbusinessinformationcoulddisruptouroperations,damageourreputationandcustomers’willingnesstoshopinourstores,violateapplicablelaws,regulations,ordersandagreements,andsubjectustoadditionalcostsandliabilitieswhichcouldbematerial.Ourbusinessissubjecttoseasonalinfluences;adecreaseinsalesormarginsduringthesecondhalfoftheyearcoulddisproportion-atelyadverselyaffectouroperatingresults.Ourbusinessissubjecttoseasonalinfluences;wegenerallyrealizehigherlevelsofsalesandincomeinthesecondhalfoftheyear,whichincludestheback-to-schoolandyear-endholidayseasons.Anydecreaseinsalesormarginsduringthisperiodcouldhaveadisproportionatelyadverseeffectonourresultsofoperations.11 Wemayexperiencerisksassociatedwithoursubstantialsizeandscale.WeoperateeightretailchainsintheU.S.,CanadaandEurope.Someaspectsofthebusinessesandoperationsofthechainsareconductedwithrelativeautonomy.Thelargesizeofouroperations,ourmultiplebusinessesandtheautonomyaffordedtothechainsincreasetheriskthatsystemsandpracticeswillnotbeimplementeduniformlythroughoutourcompanyandthatinformationwillnotbeappropriatelysharedacrossdifferentchainsandcountries.Unseasonableweatherinthemarketsinwhichourstoresoperateorourdistributioncentersarelocatedcouldadverselyaffectouroperatingresults.Adverseandunseasonableweatheraffectscustomers’willingnesstoshopandtheirdemandforthemerchandiseinourstores.Severeweathercouldalsoaffectourabilitytotransportmerchandisetoourstoresfromourdistributioncenters.Asaresult,frequent,unusuallyheavy,unseasonableoruntimelyweatherinourmarkets,suchassnow,iceorrainstorms,severecoldorheatorextendedperiodsofunseasonabletemperatures,couldadverselyaffectoursalesandincreasemarkdowns.Ourresultsmaybeadverselyaffectedbyseriousdisruptionsorcatastrophicevents.Unforeseenpublichealthissues,suchaspandemicsandepidemics,aswellasnaturaldisasterssuchashurricanes,tornadoes,floods,earthquakesandotheradverseweatherandclimateconditions,whetheroccurringintheUnitedStatesorabroad,coulddisrupttheoperationsofoneormoreofourvendorsorcouldseverelydamageordestroyoneormoreofourstoresordistributionfacilitieslocatedintheaffectedareas.Ourabilitytoreceiveproductsfromourvendorsortransportproductstoourstorescouldbeadverselyaffectedorwecouldberequiredtoclosestoresordistributioncentersintheaffectedareasorinareasservedbytheaffecteddistributioncenter.Asaresult,ourbusinesscouldbeadverselyaffected.Weoperateinhighlycompetitivemarkets,andwemaynotbeabletocompeteeffectively.Theretailapparelandhomefashionbusinessishighlycompetitive.Wecompetewithmanyotherlocal,regional,nationalandinternationalretailersthatsellapparel,homefashionsandothermerchandisethatwesell,whetherinstores,throughcataloguesormediaorovertheinternet.Wecompeteonthebasisoffashion,quality,price,value,merchandiseselectionandfreshness,brandnamerecognition,service,reputationandstorelocation.Othercompetitivefactorsthatinfluencethedemandforourmerchandiseincludeouradvertising,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,wemustdosignificantinternaltraininganddevelopmentforasubstantialnumberofourassociates.Themarketforretailmanagementishighlycompetitiveand,incommonwithotherretailers,wefacechallengesinsecuringsufficientmanagementtalent.Ifwedonotcontinuetoattractandretainqualityassociatesandmanagementpersonnel,ourperformancecouldbeadverselyaffected.12 Ifweengageinmergersoracquisitionsofnewbusinesses,ordivestanyofourcurrentbusinesses,ourbusinesswillbesubjecttoadditionalrisks.Wehavegrownourbusinessinpartthroughmergersandacquisitionsandmayacquirenewbusinessesordivestcurrentbusinesses.Acquisitionordivestitureactivitiesmaydivertattentionofmanagementfromoperatingtheexistingbusinesses.Wemaydoaless-than-optimaljobofevaluatingtargetcompaniesandtheirrisksandbenefits,andintegrationofacquisitionscanbedifficultandtime-consuming.Acquisitionsmaynotmeetourperformanceandotherexpectationsormayexposeustounexpectedorgreater-than-expectedliabilitiesandrisks.Divestiturealsoinvolvesrisks,suchastherisksofexposureonleaseobligations,obligationsundertakeninthedispositionandpotentialliabilitiesthatmayariseunderlawasaresultofthedispositionorthesubsequentfailureoftheacquirer.Failuretoexecuteonmergersordivestituresinasatisfactorymannercouldadverselyaffectourfutureresultsofoperationsandfinancialcondition.Failuretooperateinformationsystemsandimplementnewtechnologieseffectivelycoulddisruptourbusinessorreduceoursalesorprofitability.Theefficientoperationandsuccessfulgrowthofourbusinessdependsonourinformationsystems,includingourabilitytooperatethemeffectivelyandtoselectandimplementnewtechnologies,systems,controlsandadequatedisasterrecoverysystemssuccessfully.Thefailureofourinformationsystemstoperformasdesignedorourfailuretoimplementandoperatethemeffectivelycoulddisruptourbusinessorsubjectustoliabilityandtherebyharmourprofitability.Wedependuponstrongcashflowsfromouroperationstosupplycapitaltofundourexpansion,operations,interestanddebtrepayment,stockrepurchasesanddividends.Ourbusinessdependsuponouroperationstogeneratestrongcashflow,andtosomeextentupontheavailabilityoffinancingsources,tosupplycapitaltofundourexpansions,generaloperatingactivities,stockrepurchases,dividends,interestanddebtrepayment.Ourinabilitytocontinuetogeneratesufficientcashflowstosupporttheseactivitiesorthelackofavailabilityoffinancinginadequateamountsandonappropriatetermswhenneededcouldadverselyaffectourfinancialperformanceincludingourearningspershare.Generaleconomicandotherfactorsmayadverselyaffectconsumerspending,whichcouldadverselyaffectoursalesandoperatingresults.Interestrates;recession;inflation;deflation;consumercreditavailability;consumerdebtlevels;energycosts;taxratesandpolicy;unemploymenttrends;threatsorpossibilitiesofwar,terrorismorotherglobalornationalunrest;actualorthreatenedepidemics;politicalorfinancialinstability;andgeneraleconomic,politicalandotherfactorsbeyondourcontrolhavesignificanteffectsonconsumerconfidenceandspending.Consumerspending,inturn,affectssalesatretailers,whichmayincludeTJX.Althoughwebenefitfrombeinganoff-priceretailer,thesefactorscouldadverselyaffectoursalesandperformanceifwearenotabletoimplementstrategiestomitigatethempromptlyandsuccessfully.Issueswithmerchandisequalityorsafetycoulddamageourreputation,salesandfinancialresults.Variousgovernmentalauthoritiesinthejurisdictionswherewedobusinessregulatethequalityandsafetyofthemerchandisewesellinourstores.Regulationsandstandardsinthisarea,includingthoserelatedtotheConsumerProductSafetyImprovementActof2008intheUnitedStates,maychangefromtimetotime.Ourinabilitytocomplyonatimelybasiswithregulatoryrequirementscouldresultinsignificantfinesorpenalties,whichcouldhaveamaterialadverseeffectonourfinancialresults.Issueswiththequalityandsafetyandgenuinenessofmerchandise,regardlessofourfault,orcustomerconcernsaboutsuchissues,couldcausedamagetoourreputationandcouldresultinlostsales,uninsuredproductliabilityclaimsorlosses,merchandiserecallsandincreasedcosts,andregulatory,civilorcriminalfinesorpenalties,anyofwhichcouldhaveamaterialadverseeffectonourfinancialresults.13 Wearesubjecttoimportrisksassociatedwithimportingmerchandisefromabroad.Manyoftheproductssoldinourstoresaresourcedbyourvendorsand,toalimitedextent,byus,inmanyforeigncountries.Asaresult,wearesubjecttothevariousrisksofdoingbusinessinforeignmarketsandimportingmerchandisefromabroad,suchas:—potentialdisruptionsinsupply;—changesinduties,tariffs,quotasandvoluntaryexportrestrictionsonimportedmerchandise;—strikesandothereventsaffectingdelivery;—consumerperceptionsofthesafetyofimportedmerchandise;—productcompliancewithlawsandregulationsofthedestinationcountry;—concernsabouthumanrights,workingconditionsandotherlaborrightsandconditionsinforeigncountrieswheremerchandiseisproduced;—compliancewithlawsandregulationsconcerningethicalbusinesspractices,suchastheU.S.ForeignCorruptPracticesAct;and—economic,politicalorotherproblemsincountriesfromorthroughwhichmerchandiseisimported.Politicalorfinancialinstability,traderestrictions,tariffs,currencyexchangerates,laborconditions,transportcapacityandcosts,compliancewithU.S.andforeignlawsandregulationsandotherfactorsrelatingtointernationaltradeandimportedmerchandisebeyondourcontrolcouldaffecttheavailabilityandthepriceofourinventory.Furthermore,althoughwehaveimplementedpoliciesandproceduresdesignedtofacilitatecompliancewithlawsandregulationsrelatingtodoingbusinessinforeignmarketsandimportingmerchandisefromabroad,therecanbenoassurancethatourassociates,contractors,agents,vendorsorotherthirdpartieswithwhomwedobusinesswillnotviolatesuchlawsandregulationsorourpolicies,whichcouldadverselyaffectouroperationsoroperatingresults.Ourexpandinginternationaloperationsincreasinglyexposeustorisksinherentinoperatinginforeignjurisdictions.WehaveasignificantretailpresenceinCanadaandEurope,aswellasbuyingofficesaroundtheworld,andourgoalasaglobalretaileristocontinuetoexpandintootherinternationalmarketsinthefuture.OurforeignoperationsencounterriskssimilartothosefacedbyourU.S.operations,aswellasrisksinherentinforeignoperations,suchasunderstandingtheretailclimateandtrends,localcustomsandcompetitiveconditionsinforeignmarkets,complyingwithforeignlaws,rulesandregulations,andforeigncurrencyfluctuations,whichcouldhaveanadverseimpactonourprofitability.Ourresultsmaybeadverselyaffectedbyfluctuationsinthepriceofoil.Pricesofoilhavefluctuateddramaticallyinthepast.Fluctuationsmayresultinanincreaseinourtransportationcostsfordistribution,utilitycostsforourretailstoresandcoststopurchaseourproductsfromsuppliers.Continuedvolatilityinoilpricescouldadverselyaffectconsumerspendinganddemandforourproductsandincreaseouroperatingcosts,bothofwhichcouldhaveanadverseeffectonourperformance.Failuretocomplywithexistinglaws,regulationsandordersorchangesinexistinglawsandregulationscouldnegativelyaffectourbusinessoperationsandfinancialperformance.Wearesubjecttofederal,state,provincialandlocallaws,rulesandregulationsintheUnitedStatesandabroad,anyofwhichmaychangefromtimetotime,aswellasordersandassurances.Ifwefailtocomplywiththeselaws,rules,regulationsandorders,wemaybesubjecttofinesorotherpenalties,whichcouldmateriallyadverselyaffectouroperationsandourfinancialresultsandcondition.Wemustalsocomplywithnewandchanginglaws.Further,U.S.GAAPmaychangefromtimetotime,andthesechangescouldhavematerialeffectsonourreportedfinancialresultsandcondition.Inaddition,therehavebeenalargenumberofnewlegislativeandregulatoryinitiativesandreformsintroducedintheU.S.,andtheinitiativesandreformsthathavebeenandmaybeenactedmayincreaseourcosts.14 Ourresultsmaybemateriallyadverselyaffectedbytheoutcomesoflitigationandotherlegalproceedings.Weareperiodicallyinvolvedinvariouslegalproceedings,whichmayinvolvelocalstateandfederalgovernmentinquiriesandinvestigations;tax,employment,realestate,tort,consumerlitigationandintellectualpropertylitigation;orotherdisputes.Inaddition,wemaybesubjecttoinvestigationsandotherproceedingsbyregulatoryagencies,including,butnotlimitedto,consumerprotectionlaws,advertisingregulations,escheatandemploymentandwageandhourregulations.Resultsoflegalandregulatoryproceedingscannotbepredictedwithcertaintyandmaydifferfromreserveswemakeestimatingtheprobableoutcome.Regardlessofmerit,litigationmaybebothtime-consuminganddisruptivetoouroperationsandcausesignificantexpenseanddiversionofmanagementattention.Legalandregulatoryproceedingsandinvestigationscouldexposeustosignificantdefensecosts,fines,penaltiesandliabilitytoprivatepartiesandgovernmentalentitiesformonetaryrecoveriesandotheramountsandattorneys’feesand/orrequireustochangeaspectsofouroperations,anyofwhichcouldhaveamaterialadverseeffectonourbusinessandresultsofoperations.Ourrealestateleasesgenerallyobligateusforlongperiods,whichsubjectsustovariousfinancialrisks.Weleasevirtuallyallofourstorelocations,generallyforlongtermsandeitherownorleaseforlongperiodsourprimarydistributioncentersandadministrativeoffices.Accordingly,wearesubjecttotherisksassociatedwithowningandleasingrealestate.Whilewehavetherighttoterminatesomeofourleasesunderspecifiedconditionsbymakingspecifiedpayments,wemaynotbeabletoterminateaparticularleaseiforwhenwewouldliketodoso.Ifwedecidetoclosestores,wemayberequiredtocontinuetoperformobligationsundertheapplicableleases,whichmayinclude,amongotherthings,payingrentandoperatingexpensesforthebalanceoftheleaseterm,orpayingtoexerciserightstoterminate,andtheperformanceofanyoftheseobligationsmaybeexpensive.Whenweassignorsubleaseleases,wecanremainliableontheleaseobligationsiftheassigneeorsublesseedoesnotperform.Inaddition,whenleasesexpire,wemaybeunabletonegotiaterenewals,eitheroncommerciallyacceptabletermsoratall,whichcouldcauseustoclosestores.Ourstockpricemayfluctuatebasedonmarketexpectations.Thepublictradingofourstockisbasedinlargepartonmarketexpectationsthatourbusinesswillcontinuetogrowandthatwewillachievecertainlevelsofnetincome.Ifthesecuritiesanalyststhatregularlyfollowourstocklowertheirratingorlowertheirprojectionsforfuturegrowthandfinancialperformance,themarketpriceofourstockislikelytodrop.Inaddition,ifourquarterlyfinancialperformancedoesnotmeettheexpectationsofsecuritiesanalysts,ourstockpricewouldlikelydecline.Thedecreaseinthestockpricemaybedisproportionatetotheshortfallinourfinancialperformance.15 Taxmatterscouldadverselyaffectourresultsofoperationsandfinancialcondition.WearesubjecttoincometaxesinboththeUnitedStatesandnumerousforeignjurisdictions.Ourprovisionforincometaxesandcashtaxliabilityinthefuturecouldbeadverselyaffectedbynumerousfactorsincluding,butnotlimitedto,incomebeforetaxesbeinglowerthananticipatedincountrieswithlowerstatutorytaxratesandhigherthananticipatedincountrieswithhigherstatutorytaxrates,changesinthevaluationofdeferredtaxassetsandliabilities,changesinU.S.taxlegislationandregulation,foreigntaxlaws,regulationsandtreaties,exposuretoadditionaltaxliabilities,changesinaccountingprinciplesandinterpretationsrelatingtotaxmatters,whichcouldadverselyimpactourresultsofoperationsandfinancialconditioninfutureperiods.Inaddition,wearesubjecttothecontinuousexaminationofourincometaxreturnsbyfederal,stateandlocaltaxauthoritiesintheU.S.andforeigncountries,suchauthoritiesmaychallengepositionswetake,andweareengagedinvariousproceedingswithsuchauthoritieswithrespecttoassessments,claims,deficienciesandrefunds,andtheresultsoftheseexaminations,judicialproceedingsorasaresultoftheexpirationofstatuteoflimitationsinspecificjurisdictions.Weregularlyassessthelikelihoodofadverseoutcomesresultingfromtheseexaminationstodeterminetheadequacyofourprovisionforincometaxes.However,itispossiblethattheactualresultsofproceedingswithtaxauthoritiesandincourts,changesinfacts,expirationofstatutesoflimitationsorotherresolutionsoftaxpositionswilldifferfromtheamountswehaveaccruedineitherapositiveoranegativemanner,whichcouldmateriallyaffectoureffectiveincometaxrateinagivenfinancialperiod,theamountoftaxeswearerequiredtopayandourresultsofoperations.ITEM1B.UNRESOLVEDSTAFFCOMMENTSNone.16 ITEM2.PROPERTIESWeleasevirtuallyallofourover2,700storelocations,generallyfor10yearswithoptionstoextendtheleasetermforoneormore5-yearperiods.Wehavetherighttoterminatesomeoftheseleasesbeforetheexpirationdateunderspecifiedcircumstancesandsomewithspecifiedpayments.ThefollowingisasummaryofourprimaryownedandleaseddistributioncentersandprimaryadministrativeofficelocationsbysegmentasofJanuary30,2010.Squarefootageinformationforthedistributioncentersrepresentstotal“groundcover”ofthefacility.Squarefootageinformationforofficespacerepresentstotalspaceoccupied:DISTRIBUTIONCENTERSMarmaxx:T.J.MaxxWorcester,Massachusetts494,000s.f.—ownedEvansville,Indiana989,000s.f.—ownedLasVegas,Nevada713,000s.f.sharedwithMarshalls—ownedCharlotte,NorthCarolina595,000s.f.—ownedPittstonTownship,Pennsylvania1,017,000s.f.—ownedMarshallsDecatur,Georgia780,000s.f.—ownedWoburn,Massachusetts472,000s.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.—ownedTJXCanadaBrampton,Ontario507,000s.f.—leasedMississauga,Ontario669,000s.f.—leasedTJXEuropeMiltonKeynes,England108,000s.f.—leasedWakefield,England176,000s.f.—leasedStoke,England261,000s.f.—leasedWalsall,England275,000s.f.—leasedOFFICESPACECorporate,Marmaxx,HomeGoods,A.J.WrightFraminghamandWestboro,Massachusetts1,271,000s.f.—leasedinseveralbuildingsTJXCanadaMississauga,Ontario171,000s.f.—leasedTJXEuropeWatford,England61,000s.f.—leasedDusseldorf,Germany14,000s.f.—leased17 ITEM3.LEGALPROCEEDINGSTheCompanysettledwiththeremainingfinancialinstitutionsthateitherwereorsoughttobenamedplaintiffsinthefinancialtrackoftheputativeclassactionwithrespecttotheComputerIntrusion,TJXCompaniesRetailSecurityBreachLitigation,DocketNo.07-10162-WGY,MDLDocketNo.1838,andthatcaseandrelatedstatecourtlitigationweredismissed.Underthesettlement,theCompanypaid$525,000,whichprimarilyreimbursedthesettlingfinancialinstitutionsforaportionoftheirexpenses,excludingattorneys’fees,incurredinpursuingtheputativefinancialinstitutionsclassaction,anddeniedallwrongdoing.ITEM4.(REMOVEDANDRESERVED)18 PartIIITEM5.MARKETFORTHEREGISTRANT’SCOMMONEQUITY,RELATEDSECURITYHOLDERMATTERSANDISSUERPURCHASESOFEQUITYSECURITIESPriceRangeofCommonStockOurcommonstockislistedontheNewYorkStockExchange(Symbol:TJX).Thequarterlyhighandlowsalepricesfortheequityforfiscal2010andfiscal2009areasfollows:QuarterHighLowHighLowFiscal2010Fiscal2009First$29.17$19.19$34.93$29.44Second$37.00$26.62$36.44$30.32Third$40.64$33.80$37.52$23.20Fourth$39.75$35.75$28.01$17.80TheapproximatenumberofcommonshareholdersatJanuary30,2010was59,000.Wedeclaredfourquarterlydividendsof$0.12pershareforfiscal2010and$0.11pershareforfiscal2009.WhileourdividendpolicyissubjecttoperiodicreviewbyourBoardofDirectors,wearecurrentlyplanningtopaya$0.15persharequarterlydividendinfiscal2011andintendtocontinuetopaycomparabledividendsinthefuture.InformationonShareRepurchasesThenumberofsharesofcommonstockrepurchasedbyTJXduringthefourthquarteroffiscal2010andtheaveragepricepaidpershareareasfollows:PeriodTotalNumberofSharesRepurchased(1)AveragePricePaidPerShare(2)TotalNumberofSharesPurchasedasPartofaPubliclyAnnouncedPlanorProgram(3)MaximumNumber(orApproximateDollarValue)ofSharesthatMayYetbePurchasedUnderthePlansorProgramsNovember1,2009throughNovember28,20092,891,700$38.852,891,700$1,091,951,792November29,2009throughJanuary2,20107,097,500$37.227,097,500$827,807,068January3,2010throughJanuary30,2010873,300$37.59873,300$794,975,793Total:10,862,50010,862,500(1)Allshareswerepurchasedaspartofpubliclyannouncedplans.(2)Averagepricepaidpershareincludescommissionsandisroundedtothenearesttwodecimalplaces.(3)Ourfourthquarterfiscal2010repurchasescompletedthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsandannouncedinFebruary2008andincludedtherepurchaseof5.5millionsharesatacostof$205millionunderthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsandannouncedinSeptember2009.AsofJanuary30,2010,$795millionremainedavailableforpurchaseunderthecurrent$1billionprogram.InFebruary2010,theBoardofDirectorsapprovedandannouncedanadditional$1billionstockrepurchaseprogram.19 ThefollowingtableprovidescertaininformationasofJanuary30,2010withrespecttoourequitycompensationplans:EquityCompensationPlanInformationPlanCategoryNumberofSecuritiestobeIssuedUponExerciseofOutstandingOptions,WarrantsandRightsWeighted-AverageExercisePriceofOutstandingOptions,WarrantsandRightsNumberofSecuritiesRemainingAvailableforFutureIssuanceUnderEquityCompensationPlans(ExcludingSecuritiesReflectedinColumn(a))(a)(b)(c)Equitycompensationplansapprovedbysecurityholders27,975,194$27.9222,726,883Equitycompensationplansnotapprovedbysecurityholders(1)N/AN/AN/ATotal27,975,194$27.9222,726,883(1)AllequitycompensationplanshavebeenapprovedbyshareholdersForadditionalinformationconcerningourequitycompensationplans,seeNoteHtoourconsolidatedfinancialstatements.20 ITEM6.SELECTEDFINANCIALDATAAmountsinthousandsexceptpershareamounts20102009200820072006FiscalYearEndedJanuary(1)(53Weeks)Incomestatementandpersharedata:Netsales$20,288,444$18,999,505$18,336,726$17,104,013$15,667,463Incomefromcontinuingoperations$1,213,572$914,886$782,432$787,172$706,653Weightedaveragecommonsharesfordilutedearningspersharecalculation427,619442,255468,046480,045491,500Dilutedearningspersharefromcontinuingoperations$2.84$2.08$1.68$1.65$1.45Cashdividendsdeclaredpershare$0.48$0.44$0.36$0.28$0.24Balancesheetdata:Cashandcashequivalents$1,614,607$453,527$732,612$856,669$465,649Workingcapital$1,908,870$858,238$1,231,301$1,365,833$888,276Totalassets$7,463,977$6,178,242$6,599,934$6,085,700$5,496,305Capitalexpenditures$429,282$582,932$526,987$378,011$495,948Long-termobligations(2)$790,169$383,782$853,460$808,027$807,150Shareholders’equity$2,889,276$2,134,557$2,131,245$2,290,121$1,892,654Otherfinancialdata:After-taxreturn(continuingoperations)onaverageshareholders’equity48.3%42.9%35.4%37.6%38.8%Totaldebtasapercentageoftotalcapitalization(3)21.5%26.7%28.6%26.1%29.9%Storesinoperationatfiscalyearend:IntheUnitedStates:T.J.Maxx890874847821799Marshalls813806776748715HomeGoods323318289270251A.J.Wright(4)150135129129152InCanada:Winners211202191184174HomeSense7975716858InEurope:T.K.Maxx263235226210197HomeSense147———Total2,7432,6522,5292,4302,346SellingSquareFootageatyear-end:IntheUnitedStates:T.J.Maxx20,89020,54320,02519,39018,781Marshalls20,51320,38819,75919,07818,206HomeGoods6,3546,2485,5695,1814,859A.J.Wright(4)3,0122,6802,5762,5773,054InCanada:Winners4,8474,6474,3894,2144,012HomeSense1,5271,4371,3581,2801,100InEurope:T.K.Maxx6,1065,4045,0964,6364,216HomeSense222107———Total63,47161,45458,77256,35654,228(1)Fiscal2008andpriorfiscalyearshavebeenadjustedtoreclassifytheoperatingresultsofBob’sStorestodiscontinuedoperations.Fiscal2006hasbeenadjustedtoreclassifytheoperatingresultsoftheA.J.Wrightstoreclosingstodiscontinuedoperations.(2)Includeslong-termdebt,exclusiveofcurrentinstallmentsandcapitalleaseobligation,lessportionduewithinoneyear.(3)Totalcapitalizationincludesshareholders’equity,short-termdebt,long-termdebtandcapitalleaseobligation,includingcurrentmaturities.(4)A.J.Wrightstoresinoperationandsellingsquarefootageforfiscal2006includestorecountsandsquarefootageforthestoresthatarepartofdiscontinuedoperations.21 ITEM7.MANAGEMENT’SDISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTSOFOPERATIONSThediscussionthatfollowsrelatestoour52-weekfiscalyearendedJanuary30,2010(fiscal2010),the53-weekfiscalyearendedJanuary31,2009(fiscal2009)andthe52-weekfiscalyearendedJanuary26,2008(fiscal2008).Likemostretailerswehavea53-weekfiscalperiodeveryfivetosixyears.Thisextraweekofsalesvolume,whichalsoprovidesalifttopre-taxmarginsduetotheflowofcertainmonthlyandannualexpenses,impactscomparisonstootherfiscalperiods.RESULTSOFOPERATIONSWeenteredfiscal2010facedwiththechallengesofaworldwiderecessionandestablishedathree-prongedstrategyformanagingthroughthechallengingeconomictimes:conservativelyplansamestoresales,allowingbetterflow-throughtothebottomlineifweexceedplans;runwithveryleaninventoriesandbuyclosertoneedthaninthepast,increasinginventoryturnsandprotectinggrossmargins;andfocusoncost-cuttingmeasuresandcontrollingexpenses.Implementingthisstrategyhasprovensuccessful,andwepostedresultssignificantlyaboveourexpectationsandaheadoflastyearonaconsolidatedbasisandforeachofourbusinesses.Customertrafficincreasedastheyearprogressed,drivingsales.Additionally,wetookadvantageofopportunitiestheenvironmentpresented,openingmorenewstoresthanplannedandaddingmanynewvendors.Weareconfidentinourabilitytocontinuetogrowbothsalesandearningsinfiscal2011,drivingmarketsharewithourvaluepropositionandcontinuingthemarketing,inventorymanagementandcostreductionstrategiesthatweresuccessfulinfiscal2010.Highlightsofourfinancialperformanceforfiscal2010includethefollowing:—Samestoresalesforfiscal2010increased6%overtheprioryear.Samestoresalesgrowthwasdrivenbysignificantincreasesincustomertraffic,asweattractednewcustomersacrossvariousincomelevels,andstrongperformancebyallofourbusinesses.—Netsalesincreased7%to$20.3billionforfiscal2010.Storesinoperationandsellingsquarefootagewerebothup3%attheendoffiscal2010comparedtolastfiscalyearend.Increasesinconsolidatedsamestoresalesandsalesgrowthfromournewstoreswerepartiallyoffsetbyforeigncurrencyexchangerates,whichnegativelyimpactedsalesgrowthby2percentagepoints.Unlikemanyotherretailers,wehada53rdweekinfiscal2009,whichbenefitedfiscal2009salesbutnegativelyimpactedthefiscal2010comparisonbyapproximately1percentagepoint.—Ourfiscal2010pre-taxmargin(theratioofpre-taxincometonetsales)was9.6%comparedto7.6%forfiscal2009.Theimprovementinfiscal2010wasprimarilydrivenbyincreasedmerchandisemargins,whichwereachievedasaresultofmanagingthebusinesswithsubstantiallylowerlevelsofinventory.Thecomparisonofpre-taxmarginsforfiscal2010tofiscal2009wasadverselyimpactedbythe53rdweekinthefiscal2009calendarandafavorableadjustmenttotheProvisionforComputerIntrusionrelatedcostsinfiscal2009.Combined,thesetwoitemsbenefitedthefiscal2009pre-taxmarginbyapproximately0.4percentagepoints.—Ourcostofsalesratioforfiscal2010decreased2.1percentagepoints,primarilyduetoimprovedmerchandisemarginsandleverageofbuyingandoccupancycostsonstrongsamestoresales,partiallyoffsetbythebenefittofiscal2009’scostofsalesratioduetothe53rdweekincludedinfiscal2009.Theselling,generalandadministrativeexpenseratioforfiscal2010decreasedby0.1percentagepoints,withthebenefitofcostreductionprogramsandexpenseleverageonstrongsamestoresalesinfiscal2010,partiallyoffsetbya0.5percentagepointincreaseduetoperformance-basedincentivecompensation.—Incomefromcontinuingoperationswas$1.2billion,or$2.84perdilutedshare,forfiscal2010comparedto$914.9million,or$2.08perdilutedshare,forfiscal2009.Fiscal2009dilutedearningspersharefromcontinuingoperationsbenefitedby$0.16persharefromanumberofitems,whichaffectedtheyear-over-yearcomparison;the53rdweekadded$0.09pershare,thecredittotheProvisionforComputerIntrusionrelatedcostsadded$0.04pershareandataxrelatedadjustmentadded$0.03pershare.22 —Duringfiscal2010,werepurchased27.0millionsharesofourcommonstockfor$950million.Thisyear’srepurchasesincludedtheuseofthe$375millionproceedsfromourApril2009debtofferingtorepurchaseamajorityofthe15.1millionsharesissueduponconversionofourzerocouponconvertiblesubordinatednotescalledforredemption.Dilutedearningspersharereflectthebenefitofthestockrepurchaseprogram.—Consolidatedaverageperstoreinventoriesfromourcontinuingoperations,includinginventoryonhandatourdistributioncenters,weredown10%attheendoffiscal2010overtheprioryearendascomparedtoadecreaseof6%attheendoffiscal2009overtheprioryearend.Thefollowingisadiscussionofourconsolidatedoperatingresults,followedbyadiscussionofoursegmentoperatingresults:Netsales:Consolidatednetsalesforfiscal2010totaled$20.3billion,a7%increaseovernetsalesof$19.0billioninfiscal2009.Theincreasereflecteda6%increasefromsamestoresalesanda4%increasefromnewstores,offsetbya2%declinefromthenegativeimpactofforeigncurrencyexchangeratesanda1%decreasefromthe53rdweekinfiscal2009.Consolidatednetsalesforfiscal2009increased4%overnetsalesof$18.3billionforfiscal2008.Theincreasereflecteda4%increasefromnewstores,a1%increasefromthe53rdweekinfiscal2009anda1%increaseinsamestoresales,offsetbya2%declinefromthenegativeimpactofforeigncurrencyexchangerates.Newstoreshavebeenasignificantsourceofsalesgrowth.Bothourconsolidatedstorecountandoursellingsquarefootageincreasedby3%infiscal2010ascomparedtofiscal2009.Bothourconsolidatedstorecountandoursellingsquarefootageincreasedby5%infiscal2009overthepriorfiscalyear.Weexpecttoadd130stores(netofstoreclosings)infiscal2011,a5%increaseinbothourconsolidatedstorebaseandoursellingsquarefootage.The6%samestoresalesincreaseinfiscal2010wasdrivenbysignificantincreasesincustomertrafficatallofourbusinesses,partiallyoffsetbyadeclineinthevalueoftheaveragetransaction.Theincreaseincustomertrafficacceleratedduringthecourseoftheyear.Juniors,dresses,children’sapparel,footwear,accessoriesandhomefashionsperformedparticularlywellinfiscal2010.Geographically,samestoresalesincreasesinEuropeandCanadatrailedtheconsolidatedaverage.IntheU.S.,saleswerestrongthroughoutthecountrywiththeMidwest,SoutheastandWestCoastabovetheaverage,andNewEnglandandFloridabelowtheaverage.The1%samestoresalesincreaseinfiscal2009reflectedastrongfirsthalfperformance,especiallyatourinternationalsegments,partiallyoffsetbysamestoresalesdecreasesinthesecondhalfoftheyearlargelyduetotheeconomicrecession.Customertrafficincreasedatvirtuallyallofourbusinessesinfiscal2009,eveninthethirdandfourthquarters,butwaspartiallyoffsetbyareductioninthevalueoftheaveragetransaction.Asformerchandisecategories,footwear,accessoriesanddresseswerethestrongestperformers,whilehomefashionswereadverselyaffectedbytheweakhousingmarketandeconomicconditions.Geographically,samestoresalesinCanadaandEuropewereabovetheconsolidatedaverageforfiscal2009,whileintheU.S.,samestoresalesintheWestCoastandFloridatrailedtheconsolidatedaverage.Wedefinesamestoresalestobesalesofthosestoresthathavebeeninoperationforalloraportionoftwoconsecutivefiscalyears,orinotherwords,storesthatarestartingtheirthirdfiscalyearofoperation.Weclassifyastoreasanewstoreuntilitmeetsthesamestoresalescriteria.Wedeterminewhichstoresareincludedinthesamestoresalescalculationatthebeginningofafiscalyearandtheclassificationremainsconstantthroughoutthatyear,unlessastoreisclosed.Wecalculatesamestoresalesresultsbycomparingthecurrentandprioryearweeklyperiodsthataremostcloselyaligned.Relocatedstoresandstoresthathaveincreasedinsizearegenerallyclassifiedinthesamewayastheoriginalstore,andwebelievethattheimpactofthesestoresontheconsolidatedsamestorepercentageisimmaterial.Samestoresalesofourforeigndivisionsarecalculatedonaconstantcurrencybasis,meaningwetranslatethecurrentyear’ssamestoresalesofourforeigndivisionsatthesameexchangeratesusedintheprioryear.Thisremovestheeffectofchangesincurrencyexchangerates,whichwebelieveisamoreaccuratemeasureofdivisionaloperatingperformance.23 Thefollowingtablesetsforthourconsolidatedoperatingresultsasapercentageofnetsales:201020092008FiscalYearEndedJanuaryNetsales100.0%100.0%100.0%Costofsales,includingbuyingandoccupancycosts73.875.975.7Selling,generalandadministrativeexpenses16.416.516.3ProvisionforComputerIntrusionrelatedcosts—(0.2)1.1Interest(income)expense,net0.20.1—Incomefromcontinuingoperationsbeforeprovisionforincometaxes*9.6%7.6%6.9%*Duetorounding,theindividualitemsmaynotfoottoIncomefromcontinuingoperationsbeforeprovisionforincometaxes.Impactofforeigncurrencyexchangerates:OuroperatingresultscanbenefitorbeadverselyaffectedbyforeigncurrencyexchangeratesasaresultofsignificantchangesinthevalueoftheU.S.dollarinrelationtoothercurrencies.Twoofthemoresignificantwaysinwhichforeigncurrencyimpactsusareasfollows:TranslationofforeignoperatingresultsintoU.S.dollars:Inourfinancialstatements,wetranslatetheoperationsofourstoresinCanadaandEuropefromlocalcurrenciesintoU.S.dollarsusingcurrencyratesineffectatdifferentpointsintime.Significantchangesinforeignexchangeratesbetweencomparablepriorperiodscanresultinmeaningfulvariationsinconsolidatednetsales,incomefromcontinuingoperationsandearningspersharegrowthaswellasthenetsalesandoperatingresultsofourCanadianandEuropeansegments.Currencytranslationgenerallydoesnotaffectoperatingmargins,assalesandexpensesoftheforeignoperationsaretranslatedatessentiallythesamerateseachperiod.Inventoryhedges:Weroutinelyenterintoinventory-relatedhedginginstrumentstomitigatetheimpactofforeigncurrencyexchangeratesonmerchandisemarginswhenourinternationaldivisionspurchasegoodsincurrenciesotherthantheirlocalcurrencies(primarilyU.S.dollarpurchases).Aswehavenotelected“hedgeaccounting”asdefinedbyU.S.GAAP,werecordamark-to-marketgainorlossonthehedginginstrumentsinourresultsofoperationsattheendofeachreportingperiod.Insubsequentperiods,theincomestatementimpactoftheseadjustmentsiseffectivelyoffsetwhentheinventorybeinghedgedissold.Whiletheseeffectsoccureveryreportingperiod,theyareofmuchgreatermagnitudewhentherearesuddenandsignificantchangesincurrencyexchangeratesduringashortperiodoftime.Themark-to-marketadjustmentonthesehedgesdoesnotaffectnetsales,butitdoesaffectcostofsales,operatingmarginsandreportedearnings.Costofsales,includingbuyingandoccupancycosts:Costofsales,includingbuyingandoccupancycosts,asapercentageofnetsaleswas73.8%infiscal2010,75.9%infiscal2009and75.7%infiscal2008.Theimprovementinfiscal2010wasprimarilyduetoimprovedconsolidatedmerchandisemargin,whichincreased2.1percentagepoints,alongwithexpenseleverageonthe6%samestoresalesincrease,particularlyinoccupancycosts,whichimprovedby0.3percentagepoints.Merchandisemarginimprovementwasdrivenbyourstrategyofoperatingwithleanerinventoriesandbuyingclosertoneed,whichresultedinanincreaseinmarkon,alongwithareductioninmarkdownscomparedtotheprioryear.Theseimprovementswerepartiallyoffsetbyabenefittothisexpenseratioinfiscal2009duetothe53rdweek(approximately0.2percentagepoints).Additionally,forfiscal2010,buyingandoccupancyexpenseleveragewasoffsetbyhigheraccrualsforperformance-basedincentivecompensationthatcoversmanyassociatesacrossourorganization.Thehigheraccrualsaretheresultofoperatingperformancethatwaswellaheadofourobjectives.Thisratioforfiscal2009,ascomparedtofiscal2008,increased0.2percentagepointsprimarilyduetodeleverageofbuyingandoccupancycostsonthe1%samestoresalesincrease.Thisdeleveragemorethanoffsetabenefittothisexpenseratioduetothe53rdweekinfiscal2009(approximately0.2percentagepoints)aswellasanimprovementinourconsolidatedmerchandisemarginof0.2percentagepoints.Throughoutfiscal2009,weeffectivelyexecutedouroff-pricefundamentals,buyingclosetoneed,operatingwithleanerinventoriesandtakingadvantageofopportunitiesinthemarketplace.Selling,generalandadministrativeexpenses:Selling,generalandadministrativeexpensesasapercentageofnetsaleswere16.4%infiscal2010,16.5%infiscal2009and16.3%infiscal2008.Theimprovementinfiscal2010comparedtofiscal2009wasduetoleveringofexpensesandsavingsfromourexpensereductioninitiatives.These24 improvementswerepartiallyoffsetbytheincreaseinperformance-basedincentivecompensationmentionedabove,whichhadanevengreaterimpactonselling,generalandadministrativeexpenseratioincreasingitby0.5percentagepoints.Thefiscal2009expenseratioincreasedslightlycomparedtofiscal2008duetodeleveragefromthelowsamestoresalesincrease,primarilyinstorepayrollandfieldcosts,partiallyoffsetbysavingsfromcostcontainmentinitiatives.Advertisingcostsasapercentageofnetsalesinfiscal2009wereessentiallyflatcomparedtofiscal2008.ProvisionforComputerIntrusionrelatedcosts:Inthesecondquarteroffiscal2008,weestablishedareservetoreflectourestimateofourprobablelossesinaccordancewithU.S.GAAPwithrespecttotheComputerIntrusion.FromthetimeofthediscoveryoftheComputerIntrusionlateinfiscal2007,throughtheendoffiscal2010,wecumulativelyexpensed$171.5million(pre-tax)withrespecttotheComputerIntrusion,includinganetchargeof$159.2millioninfiscal2008toreserveforprobablelosses,costsof$42.8millionincurredpriortotheestablishmentofthereserve($5millionofwhichwasrecordedinfiscal2007)anda$30.5millionreductioninthereserveinfiscal2009asaresultofnegotiations,settlements,insuranceproceedsandadjustmentsinourestimatedlosses.CostsrelatingtotheComputerIntrusionincurredandpaidafterestablishmentofthereservewerechargedagainstthereserve,whichisincludedinaccruedexpensesandotherliabilitiesonourbalancesheet.AsofJanuary30,2010,ourreservebalancewas$23.5million,whichreflectsourcurrentestimateofremainingprobablelosseswithrespecttotheComputerIntrusion,includinglitigation,proceedingsandotherclaims,aswellaslegal,monitoring,reportingandothercosts.Asanestimate,ourreserveissubjecttouncertainty,ouractualcostsmayvaryfromourcurrentestimateandsuchvariationsmaybematerial.Wemaydecreaseorincreasetheamountofourreserveasaresultofdevelopmentsinlitigationandclaims,relatedexpenses,receiptofinsuranceproceedsandforotherchanges.Interestexpense(income),net:Interestexpense(income),netamountedtoexpenseof$39.5millionforfiscal2010,expenseof$14.3millionforfiscal2009andincomeof$1.6millionforfiscal2008.Thecomponentsofnetinterestexpense(income)forthelastthreefiscalyearsaresummarizedbelow:Dollarsinthousands201020092008FiscalYearEndedJanuaryInterestexpense$49,278$38,123$39,926Capitalizedinterest(758)(1,647)(799)Interest(income)(9,011)(22,185)(40,725)Netinterestexpense(income)$39,509$14,291$(1,598)Grossinterestexpenseforfiscal2010increasedoverfiscal2009asaresultoftheincrementalinterestcostofthe$375millionaggregateprincipalamountof6.95%notesissuedinApril2009andthe$400millionaggregateprincipalamountof4.20%notesissuedinJuly2009.The6.95%noteswereissuedinconjunctionwiththecallforredemptionofourzerocouponconvertiblesecurities,andwerefinancedourC$235millioncreditfacilitypriortoitsscheduledmaturitywithaportionoftheproceedsofthe4.20%notes.Theimpactonearningspershareoftheincrementalinterestcostofthesetwodebtissuanceswaspartiallyoffsetbyabenefitinourearningspershare,asthemajorityofthe15.1millionsharesissueduponconversionoftheconvertiblenoteswererepurchasedwiththenetproceedsofthe6.95%notes.Onafullyearbasis,weexpectthebenefitofthesharerepurchasetomorethanoffsettheimpactonfullydilutedearningspersharefromtheinterestonthe6.95%notes.Formoreinformationonthesenoteofferings,seethediscussionunderLiquidityandCapitalResources.Inaddition,interestincomeforfiscal2010waslessthanfiscal2009duetoconsiderablylowerratesofreturnoninvestmentsmorethanoffsettinghighercashbalancesavailableforinvestmentduringfiscal2010.Thechangeinnetinterestexpenseinfiscal2009comparedtofiscal2008wasdrivenbythechangeininterestincome.Infiscal2008,wegeneratedmoreinterestincomeduetohighercashbalancesavailableforinvestmentaswellashigherinterestratesearnedonourinvestments.25 Incometaxes:Oureffectiveannualincometaxratewas37.8%infiscal2010,36.9%infiscal2009and37.9%infiscal2008.Theincreaseinoureffectiveincometaxrateforfiscal2010ascomparedtofiscal2009isprimarilyattributedtothefavorableimpactinfiscal2009ofa$19millionreductioninthereserveforuncertaintaxpositionsarisingfromthesettlementofseveralstatetaxaudits.Theabsenceofthisfiscal2009benefitincreasedtheeffectiveincometaxrateinfiscal2010by1.3percentagepoints,partiallyoffsetbyareductionintheeffectiveincometaxraterelatedtoforeignincome.Thedecreaseinthetaxrateforfiscal2009ascomparedtofiscal2008reflecteda1.3percentagepointfavorableimpactofareductioninthereserveforuncertaintaxposition.Thisbenefitintheannualincometaxrateinfiscal2009wasoffsetbytheabsenceofafiscal2008favorabletaxbenefitof0.4percentagepointsrelatingtothetaxtreatmentofourPuertoRicosubsidiary.SeeNoteKtotheconsolidatedfinancialstatements.TJXanticipatesaneffectiveannualincometaxrateof38.0%to38.5%forfiscal2011.Incomefromcontinuingoperationsandincomepersharefromcontinuingoperations:Incomefromcontinuingoperationswas$1.2billioninfiscal2010,a33%increaseoverthe$914.9millioninfiscal2009,whichinturnwasa17%increaseoverthe$782.4millioninfiscal2008.Incomefromcontinuingoperationspersharewas$2.84infiscal2010,$2.08infiscal2009and$1.68infiscal2008.Severalitems,discussedbelow,affectedearningspersharecomparisonsforfiscal2010,fiscal2009andfiscal2008.Weestimatethatthe53rdweekinfiscal2009favorablyaffectedearningspershareinthatyearby$0.09pershare.ThereductionintheProvisionforComputerIntrusionrelatedcostsinfiscal2009benefitedincomefromcontinuingoperationsinfiscal2009byapproximately$0.04pershare.ThechargerelatingtotheComputerIntrusionrelatedcostsinfiscal2008adverselyaffectedincomefromcontinuingoperationsinthatyearby$0.25pershare.Foreigncurrencyexchangeratesalsoaffectedthecomparabilityofourresults.Foreigncurrencyratesreducedearningspershareby$0.01pershareinfiscal2010comparedtoa$0.01persharebenefitinfiscal2009.Whencomparingfiscal2009tofiscal2008,foreigncurrencyexchangeratesreducedearningspershareby$0.05pershareinfiscal2009comparedtoa$0.01persharebenefitinfiscal2008.Inaddition,ourweightedaveragedilutedsharesoutstandingaffectthecomparabilityofearningspershare,whicharebenefitedbyoursharerepurchaseprograms.Werepurchased27.0millionsharesofourstockatacostof$950millioninfiscal2010;24.0millionsharesatacostof$741millioninfiscal2009;and33.3millionsharesatacostof$950millioninfiscal2008.Wesignificantlyreducedourweightedaveragedilutedsharesoutstandingfrom442.3millionto427.6millioninfiscal2010withtheincrementalpurchaseoverthoseplannedunderourstockrepurchaseprogrambyusingtheproceedsofourApril2009debtofferingtorepurchasethemajorityofthe15.1millionsharesissuedonconversionofourzerocouponconvertiblesubordinatednotesfollowingtheircall.Discontinuedoperationsandnetincome:Fiscal2009andpriorperiodsincludethelossonthesaleoftheBob’sStoresdivisionindiscontinuedoperations.Inaddition,theoperatingresultsforBob’sStoresforallperiodspriortothesaleareincludedindiscontinuedoperations.Includingtheimpactofdiscontinuedoperations,netincomewas$1.2billion,or$2.84pershare,forfiscal2010,$880.6million,or$2.00pershare,forfiscal2009and$771.8million,or$1.66pershare,forfiscal2008.Segmentinformation:Thefollowingisadiscussionoftheoperatingresultsofourbusinesssegments.IntheUnitedStates,ourT.J.MaxxandMarshallsstoresareaggregatedastheMarmaxxsegment,andeachofHomeGoodsandA.J.Wrightisreportedasaseparatesegment.TJX’sstoresoperatedinCanada(WinnersandHomeSense)arereportedastheTJXCanadasegment,andTJX’sstoresoperatedinEurope(T.K.MaxxandHomeSense)arereportedastheTJXEuropesegment.Weevaluatetheperformanceofoursegmentsbasedon“segmentprofitorloss,”whichwedefineaspre-taxincomebeforegeneralcorporateexpense,ProvisionforComputerIntrusionrelatedcostsandinterest.“Segmentprofitorloss,”aswedefinetheterm,maynotbecomparabletosimilarlytitledmeasuresusedbyotherentities.Inaddition,thismeasureofperformanceshouldnotbeconsideredanalternativetonetincomeorcashflowsfrom26 operatingactivitiesasanindicatorofourperformanceorasameasureofliquidity.Presentedbelowisselectedfinancialinformationrelatedtoourbusinesssegments:U.S.Segments:Marmaxx:Dollarsinmillions201020092008FiscalYearEndedJanuaryNetsales$13,270.9$12,362.1$11,966.7Segmentprofit$1,588.5$1,155.8$1,158.2Segmentprofitasapercentageofnetsales12.0%9.3%9.7%Percentincreaseinsamestoresales7%0%1%StoresinoperationatendofperiodT.J.Maxx890874847Marshalls813806776TotalMarmaxx1,7031,6801,623Sellingsquarefootageatendofperiod(inthousands)T.J.Maxx20,89020,54320,025Marshalls20,51320,38819,759TotalMarmaxx41,40340,93139,784NetsalesatMarmaxxincreased7%infiscal2010ascomparedtofiscal2009.SamestoresalesforMarmaxxwereup7%comparedtobeingflatinfiscal2009.SalesatMarmaxxforfiscal2010reflectedsignificantlyincreasedcustomertraffic,partiallyoffsetbyadecreaseinthevalueoftheaveragetransaction.Categoriesthatpostedparticularlystrongsamestoresalesincreasesincludedjuniors,dresses,children’sapparelandfootwear.HomecategoriesimprovedsignificantlyatMarmaxxduringtheyear,withsamestoresalesincreasesabovethechainaverageforfiscal2010.Geographically,therewerestrongtrendsthroughoutthecountry.SamestoresaleswerestrongestintheMidwest,WestCoastandSoutheast,whileNewEnglandandFloridatrailedthechainaverageforfiscal2010.Wealsosawaliftinthenetsalesofstoresrenovatedduringtheyear,andweanticipateincreasingourstorerenovationprograminfiscal2011.Segmentprofitasapercentageofnetsales(“segmentmargin”or“segmentprofitmargin”)increasedto12.0%infiscal2010from9.3%infiscal2009.Thisincreaseinsegmentmarginforfiscal2010wasprimarilyduetoanincreaseinmerchandisemarginof2.4percentagepointsdrivenbylowermarkdownsandhighermarkon.Inaddition,the7%increaseinsamestoresalesprovidedexpenseleverageonnumerouscostsasapercentageofnetsales,particularlyoccupancycosts,whichimprovedby0.3percentagepoints.Theseincreaseswerepartiallyoffsetbyanincreaseinadministrativecostsasapercentageofsales,primarilyduetohigheraccrualsforperformance-basedincentivecompensationasaresultofoperatingperformancewellaheadofobjectives.Segmentmargindecreasedto9.3%infiscal2009from9.7%infiscal2008.Segmentmarginwasnegativelyimpactedbyanincreaseinoccupancycostsasapercentageofnetsales(0.5percentagepoints)duetodeleverageontheflatsamestoresales.Thisdecreasewaspartiallyoffsetbyanincreaseinmerchandisemargin(0.1percentagepoint)duetoincreasedmarkon.AsofJanuary30,2010,Marmaxx’saverageperstoreinventories,includinginventoryonhandatitsdistributioncenters,weredown10%ascomparedtotheseinventorylevelsatthesametimelastyear.AverageperstoreinventoriesatJanuary31,2009weredown4%comparedtothoseoftheprioryearperiod.AsofJanuary30,2010,inventorycommitments(inventoryonhandandmerchandiseonorder)wereessentiallyflatonaperstorebasiscomparedtotheendoffiscal2009.Weexpecttoopenapproximately53newstores(netofclosings)infiscal2011,increasingtheMarmaxxstorebaseby3%andincreasingitssellingsquarefootageby3%.27 HomeGoods:Dollarsinmillions201020092008FiscalYearEndedJanuaryNetsales$1,794.4$1,578.3$1,480.4Segmentprofit$137.5$42.4$76.2Segmentprofitasapercentageofnetsales7.7%2.7%5.1%Percentincrease(decrease)insamestoresales9%(3)%3%Storesinoperationatendofperiod323318289Sellingsquarefootageatendofperiod(inthousands)6,3546,2485,569HomeGoods’netsalesincreased14%infiscal2010comparedtofiscal2009.Samestoresalesincreased9%infiscal2010,drivenbysignificantlyincreasedcustomertraffic,comparedtoadecreaseof3%infiscal2009.Segmentmarginof7.7%wasupsignificantlyfrom2.7%forfiscal2009,duetoincreasedmerchandisemarginsdrivenbyincreasedmarkonanddecreasedmarkdowns,leveringofexpensesonthe9%samestoresalesandoperationalefficiencies.Themerchandisemarginimprovementsweredrivenbymanagingthisbusinesswithmuchlowerinventorylevels,whichdrovebetteroff-pricebuyingandincreasedinventoryturns.Theseimprovementswerepartiallyoffsetbyhigheraccrualsforperformance-basedincentivecompensationasaresultofoperatingperformancewellaheadofobjectives.HomeGoods’netsalesforfiscal2009increased7%comparedtofiscal2008,andsamestoresalesdecreased3%.Segmentmarginof2.7%forfiscal2009wasdownfrom5.1%forfiscal2008.Merchandisemarginsdeclinedinfiscal2009,primarilyduetoincreasedmarkdownsandoperatingcostsdeleveredasaresultofthedeclineinsamestoresales.Infiscal2011,weplantoaddanetof9HomeGoodsstoresandincreasesellingsquarefootageby3%.A.J.Wright:Dollarsinmillions201020092008FiscalYearEndedJanuaryNetsales$779.8$677.6$632.7Segmentprofit(loss)$12.6$2.9$(1.8)Segmentprofit(loss)asapercentageofnetsales1.6%0.4%(0.3)%Percentincreaseinsamestoresales9%4%2%Storesinoperationatendofperiod150135129Sellingsquarefootageatendofperiod(inthousands)3,0122,6802,576A.J.Wright’snetsalesincreased15%infiscal2010ascomparedtofiscal2009,andsamestoresalesincreased9%.A.J.Wright’simprovementinsaleswasdrivenbyanincreasinglybetterunderstandingofitscustomers’tastesandshoppinghabits,whichhasledtoimprovedmerchandisingandmarketing.Segmentprofitincreasedsignificantlyto$12.6millioninfiscal2010,comparedtosegmentprofitof$2.9millioninfiscal2009.Theincreaseinsegmentmargininfiscal2010wasprimarilyduetoimprovedmerchandisemargin.Likeourotherdivisions,costreductioninitiativesandthebenefitofexpenseleverageonthesamestoresalesincreasewaspartiallyoffsetbyhigheraccrualsforperformance-basedincentivecompensation.A.J.Wright’snetsalesincreased7%forfiscal2009comparedtofiscal2008,andsegmentprofitincreasedto$2.9millioncomparedtoalossof$1.8millioninfiscal2008.Samestoresalesincreased4%forfiscal2009andA.J.Wrightrecordeditsfirstsegmentprofitinfiscal2009comparedtolossesintheprioryears.Infiscal2011,weplantoaddanetof8A.J.Wrightstoresandincreasesellingsquarefootageby6%.28 InternationalSegments:TJXCanada:U.S.Dollarsinmillions201020092008FiscalYearEndedJanuaryNetsales$2,167.9$2,139.4$2,040.8Segmentprofit$255.0$236.1$235.1Segmentprofitasapercentageofnetsales11.8%11.0%11.5%Percentincreaseinsamestoresales2%3%5%StoresinoperationatendofperiodWinners211202191HomeSense797571Total290277262Sellingsquarefootageatendofperiod(inthousands)Winners4,8474,6474,389HomeSense1,5271,4371,358Total6,3746,0845,747NetsalesforTJXCanada(whichincludesWinnersandHomeSense)increased1%infiscal2010ascomparedtofiscal2009.Currencyexchangetranslationreducedfiscal2010salesbyapproximately$62million,or3%,ascomparedtofiscal2009.Samestoresaleswereup2%infiscal2010comparedtoanincreaseof3%infiscal2009.Samestoresalesofjuniors,dresses,mensandfootwear,aswellasHomeSenseonastandalonebasis,wereabovethesegmentaverageforfiscal2010.Segmentprofitforfiscal2010increasedto$255millioncomparedto$236millioninfiscal2009.Theimpactofforeigncurrencytranslationdecreasedsegmentprofitby$4million,or2%,infiscal2010comparedtofiscal2009.Themark-to-marketadjustmentoninventoryrelatedhedgesdidnothaveamaterialimpactonsegmentprofitinfiscal2010comparedtofiscal2009.Segmentmarginincreased0.8percentagepointsto11.8%infiscal2010,comparedto11.0%infiscal2009,whichwasprimarilyduetoanimprovementinmerchandisemargins.Improvementsinstorepayrollanddistributioncostsasapercentageofnetsalesinfiscal2010duetooperatingefficiencieswereoffsetbyhigheraccrualsforperformance-basedincentivecompensationasaresultofoperatingperformancewellaheadofobjectives.Netsalesforfiscal2009increasedby5%overfiscal2008.Currencyexchangetranslationreducedfiscal2009salesbyapproximately$68million.Samestoresalesincreased3%infiscal2009comparedtoanincreaseof5%infiscal2008.Segmentprofitforfiscal2009increasedslightlyto$236millioncomparedto$235millioninfiscal2008,whilesegmentmargindecreased0.5percentagepointsto11.0%.Currencyexchangetranslationreducedsegmentprofitby$11millionforfiscal2009,ascomparedtofiscal2008.However,becausecurrencytranslationimpactsbothsalesandexpenses,ithaslittleornoimpactonsegmentmargin.Inaddition,themark-to-marketadjustmentofinventoryrelatedhedgesreducedsegmentprofitinfiscal2009by$1million,incontrasttoa$5millionbenefitinfiscal2008,whichadverselyimpactedsegmentmargincomparisonsby0.3percentagepoints.Segmentmarginforfiscal2009reflectedincreasesindistributioncentercostsandstorepayrollcostsasapercentageofnetsales,partiallyoffsetbyanincreaseinmerchandisemargins.Weexpecttoaddanetof6storesinCanadainfiscal2011andplantoincreasesellingsquarefootageby2%.29 TJXEurope:U.S.Dollarsinmillions201020092008FiscalYearEndedJanuaryNetsales$2,275.4$2,242.1$2,216.2Segmentprofit$164.0$137.6$127.2Segmentprofitasapercentageofnetsales7.2%6.1%5.7%Percentincreaseinsamestoresales5%4%6%StoresinoperationatendofperiodT.K.Maxx263235226HomeSense147—Total277242226Sellingsquarefootageatendofperiod(inthousands)T.K.Maxx6,1065,4045,096HomeSense222107—Total6,3285,5115,096NetsalesforTJXEuropeincreasedinfiscal2010to$2.3billioncomparedto$2.2billioninfiscal2009.Currencyexchangeratetranslationreducedfiscal2010salesbyapproximately$252million,or11%,ascomparedtofiscal2009.Samestoresalesincreased5%forfiscal2010comparedtoa4%increaseinfiscal2009.Segmentprofitforfiscal2010increased19%to$164million,andsegmentprofitmarginincreased1.1percentagepointsto7.2%.Theincreaseinsegmentmarginforfiscal2010reflectsimprovedmerchandisemarginsandleverageofexpensesonthe5%samestoresalesincrease,partiallyoffsetbycostsofoperationsinGermanyandPolandalongwithhigheraccrualsforperformance-basedincentivecompensation.WeareencouragedbytheperformanceofourstoresinGermanyandPolandandourHomeSensestoresintheU.K.,butasneweroperations,theyreducethesegmentmargingeneratedbythemoreestablishedT.K.MaxxstoresintheU.K.andIreland.WealsoinvestedinstrengtheningthesharedservicesinfrastructureforourplannedEuropeanexpansion.Foreigncurrencyhadanimmaterialimpactonfiscal2010segmentprofit,whilesegmentprofitforfiscal2009includedafavorablemark-to-marketadjustmentof$10million,primarilyrelatingtotheconversionofEurostoPoundSterling.NetsalesforTJXEuropeforfiscal2009wereup1%comparedtofiscal2008.Currencyexchangeratetranslationnegativelyaffectedfiscal2009netsalesbyapproximately$282million.Segmentprofitforfiscal2009increased8%to$137.6million,andsegmentmarginincreased0.4percentagepointsto6.1%comparedtofiscal2008.Currencyexchangeratetranslationnegativelyaffectedsegmentprofitbyapproximately$26millioninfiscal2009ascomparedtofiscal2008.Theincreaseinsegmentmargininfiscal2009reflectedimprovedmerchandisemargins,partiallyoffsetbyanincreaseinoccupancycostsasapercentageofsalesandthecostofoperationsinGermany.Duringfiscal2009,T.K.Maxxadded4morestoresinGermany,followingtheopeningofitsfirst5storesinGermanyinfiscal2008.Infiscal2009,T.K.MaxxalsointroducedtheHomeSenseconceptintotheU.K.with7newstores.AsaresultoftheperformanceofTJXEuropeandtheopportunityforoff-priceretailinEurope,weintendtoincreasetherateofexpansioninEurope.Infiscal2011,weplantoopenanetof48newT.K.MaxxstoresinEuropeandanetof6HomeSensestoresintheU.K.foranettotalof54newstoresinEurope.WealsoplantoexpandtotalTJXEuropesellingsquarefootageby16%.GeneralCorporateExpense:Dollarsinmillions201020092008FiscalYearEndedJanuaryGeneralcorporateexpense$166.4$140.0$139.4Generalcorporateexpenseforsegmentreportingpurposesrepresentsthosecostsnotspecificallyrelatedtotheoperationsofourbusinesssegmentsandisincludedinselling,generalandadministrativeexpenses.Theincreaseingeneralcorporateexpenseinfiscal2010comparedtofiscal2009isprimarilyduetoan$18millioncontributiontothe30 TJXFoundationinfiscal2010comparedtonocontributioninfiscal2009.Additionally,fiscal2010hadhigherperformance-basedincentiveandbenefitplanaccrualsascomparedtofiscal2009,whichwerepartiallyoffsetbybenefitsrelatedtohedgingactivity.Generalcorporateexpenseinfiscal2009versusfiscal2008wasvirtuallyflat.LIQUIDITYANDCAPITALRESOURCESOperatingActivities:Netcashprovidedbyoperatingactivitieswas$2,272millioninfiscal2010,$1,155millioninfiscal2009and$1,375millioninfiscal2008.Thecashgeneratedfromoperatingactivitiesineachofthesefiscalyearswaslargelyduetooperatingearnings.Thedecreaseinfiscal2009reflectedtheeffectsoftheeconomicrecession.Operatingcashflowsforfiscal2010increased$1,117millioncomparedtofiscal2009.Netincomeprovidedcashof$1,214millioninfiscal2010,anincreaseof$333millionovernetincomeof$881millioninfiscal2009.Thechangeinmerchandiseinventory,netoftherelatedchangeinaccountspayable,providedasourceofcashof$345millioninfiscal2010,comparedtoa$210millionuseofcashinfiscal2009.Thereductionininventoryinfiscal2010wastheresultoftheongoingimplementationofourstrategyofoperatingwithleanerinventoriesandbuyingclosertoneed,which,inturn,increasedinventoryturnover.Changesincurrentincometaxespayable/recoverableincreasedcashinfiscal2010by$191millioncomparedtoadecreaseincashof$49millioninfiscal2009.Thechangeinprepaidexpensesandothercurrentassetshadafavorableimpactonfiscal2010cashflowsof$64million,primarilyduetothetimingofFebruaryrentalpayments.Thechangeinaccruedexpensesandotherliabilitiesprovidedcashof$31millioninfiscal2010,comparedtoa$35millionuseofcashinfiscal2009,reflectinghigheraccrualsinfiscal2010forperformance-basedincentivecompensation,partiallyoffsetbyincreasedfundingofthepensionplan.Partiallyoffsettingthesefavorablechangestofiscal2010operatingcashflowswasthechangeinthedeferredincometaxprovision,whichreducedcashflowsby$79millioncomparedtofiscal2009andtheunfavorableimpactof$61millionofallotheritems,whichprimarilyreflectsunrealizedgainsonassetsoftheexecutivesavingsplaninfiscal2010versusunrealizedlossesinfiscal2009.Operatingcashflowsforfiscal2009decreasedby$220millionascomparedtofiscal2008.Netincomeandthenon-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$5millioninfiscal2008.Thechangeinmerchandiseinventoriesandaccountspayableinfiscal2009wasprimarilydrivenbyatimingdifferenceinthepaymentofouraccountspayableduetoachangeinourbuyingpattern.Thechangeinaccruedexpensesandotherliabilitiesresultedinauseofcashof$35millioninfiscal2009versusasourceofcashof$203millioninfiscal2008.Infiscal2008,theincreaseinaccruedexpensesandotherliabilitiesreflected$117millionforthepre-taxreserveestablishedfortheComputerIntrusion,whichfavorablyimpactedcashflows,whilefiscal2009’scashflowswerereducedby$75millionforpaymentsagainstandadjustmentstothisreserve.Changesincurrentincometaxespayable/recoverablereducedcashinfiscal2009by$49millioncomparedtoanincreaseof$56millioninfiscal2008andthechangeinprepaidexpensesreducedfiscal2009operatingcashflowsbyanadditional$65million,primarilyduetothetimingofFebruaryrentalpayments.31 Discontinuedoperationsreserve:Wehaveareserveforfutureobligationsofdiscontinuedoperationsthatrelatesprimarilytorealestateleasesassociatedwiththeclosureof34A.J.Wrightstoresinfiscal2007,aswellascertainleasesofformerTJXbusinesses.Thebalanceinthereserveandtheactivityforthelastthreefiscalyearsispresentedbelow:Inthousands201020092008FiscalYearEndedJanuaryBalanceatbeginningofyear$40,564$46,076$57,677Additionstothereservechargedtonetincome:A.J.Wrightstoreclosings8(2,908)—Otherleaserelatedobligations(8)2,908—Interestaccretion1,7611,8201,820Chargesagainstthereserve:Lease-relatedobligations(5,891)(7,323)(11,214)Terminationbenefitsandallother(537)(9)(2,207)Balanceatendofyear$35,897$40,564$46,076Thechargesagainstthereserveinfiscal2010,fiscal2009andfiscal2008relatedprimarilytotheclosedA.J.Wrightstores.Infiscal2009,wereservedanadditional$3millionforexposuretopropertiesrelatedtothesaleofBob’sStores,whichwasoffsetbyacomparableamountduetofavorablesettlementsonseveralA.J.Wrightlocations.ThemajorityofthereserverelatestoleaseobligationswithrespecttotheclosureoftheA.J.WrightstoresandthesaleofBob’sStores.Theremainderofthereservereflectsourestimationofthecostofclaims,updatedquarterly,thathavebeen,orwebelievearelikelytobe,madeagainstusforliabilityasanoriginallesseeorguarantoroftheleasesofformerbusinesses,aftermitigationofthenumberandcostoftheseleaseobligations.Theactualnetcostofthevariousleaseobligationsincludedinthereservemaydifferfromourinitialestimate.Althoughouractualcostswithrespecttotheleaseobligationsmayexceedamountsestimatedinourreserve,andwemayincurcostsforotherleasesfromformerdiscontinuedoperations,wedonotexpecttoincuranymaterialcostsrelatedtothesediscontinuedoperationsinexcessoftheamountsestimated.Weestimatethatthemajorityofthediscontinuedoperationsreservewillbepaidinthenextthreetofiveyears.Theactualtimingofcashoutflowswillvarydependingonhowtheremainingleaseobligationsareactuallysettled.Wemayalsobecontingentlyliableonupto15leasesofBJ’sWholesaleCluband7additionalBob’sStoresleases,bothformerTJXbusinesses.Ourreservefordiscontinuedoperationsdoesnotreflecttheseleases,becausewecurrentlybelievethatthelikelihoodofanyfutureliabilitytousisnotprobable.Off-balancesheetliabilities:Wehavecontingentobligationsonleases,forwhichwewerealesseeorguarantor,whichwereassignedtothirdpartieswithoutTJXbeingreleasedbythelandlords.Overmanyyears,wehaveassignednumerousleasesthatweoriginallyleasedorguaranteedtoasignificantnumberofthirdparties.Withtheexceptionofleasesofourformerbusinessesforwhichwehavereserved,wehaverarelyhadaclaimwithrespecttoassignedleases,andaccordingly,wedonotexpectthatsuchleaseswillhaveamaterialadverseimpactonourfinancialcondition,resultsofoperationsorcashflows.Wedonotgenerallyhavesufficientinformationabouttheseleasestoestimateourpotentialcontingentobligationsunderthem,whichcouldbetriggeredintheeventthatoneormoreofthecurrenttenantsdonotfulfilltheirobligationsrelatedtooneormoreoftheseleases.Wealsohavecontingentobligationsinconnectionwithsomeassignedorsubletpropertiesthatweareabletoestimate.Weestimatetheundiscountedobligations,notreflectedinourreserves,ofleasesofclosedstoresofcontinuingoperations,BJ’sWholesaleClubandBob’sStoresleasesdiscussedabove,andpropertiesofourdiscontinuedoperationsthatwehavesublet,ifthesubtenantsdidnotfulfilltheirobligations,tobeapproximately$94millionasofJanuary30,2010.Webelievethatmostorallofthesecontingentobligationswillnotreverttousand,totheextenttheydo,willberesolvedforsubstantiallylessduetomitigatingfactors.Weareapartytovariousagreementsunderwhichwemaybeobligatedtoindemnifyotherpartieswithrespecttobreachofwarrantyorlossesrelatedtosuchmattersastitletoassetssold,specifiedenvironmentalmattersorcertainincometaxes.Theseobligationsaretypicallylimitedintimeandamount.Therearenoamountsreflectedinourbalancesheetswithrespecttothesecontingentobligations.32 InvestingActivities:Ourcashflowsforinvestingactivitiesincludecapitalexpendituresforthelastthreefiscalyearsassetforthinthetablebelow:Inmillions201020092008FiscalYearEndedJanuaryNewstores$127.8$147.6$120.7Storerenovationsandimprovements206.8264.3269.8Officeanddistributioncenters94.7171.0136.5Capitalexpenditures$429.3$582.9$527.0Weexpectthatcapitalexpenditureswillapproximate$750millionforfiscal2011,whichweexpecttofundthroughinternallygeneratedfunds.Thisincludes$216millionfornewstores,$289millionforstorerenovations,expansionsandimprovementsand$245millionforourofficeanddistributioncenters.Theplannedincreaseincapitalexpendituresisattributabletoinvestmentinsystems,distributionandotherinfrastructuretosupportgrowthaswellasanincreaseinplannedstoreopenings,andincreasedspendingonrenovationsandimprovementstoexistingstores.Investingactivitiesforfiscal2010includethepurchaseandsaleofsomeshort-terminvestmentsbyTJXCanada,asexcesscashwasinvestedinfundswithinitialmaturitiesgreaterthanthreemonthstoenhanceinvestmentreturns.Investingactivitiesforfiscal2009and2008alsoincludecashflowsassociatedwithournetinvestmenthedges.Duringfiscal2009,wesuspendedourpolicyofhedgingthenetinvestmentinourforeignsubsidiariesandsettledsuchhedgesduringthefourthquarter.Thenetcashreceivedonnetinvestmenthedgesduringfiscal2009amountedto$14.4millionversusnetcashpaymentsof$13.7millioninfiscal2008.FinancingActivities:Cashflowsfromfinancingactivitiesresultedinnetcashoutflowsof$584millioninfiscal2010,$769millioninfiscal2009and$953millioninfiscal2008.Themajorityofthisoutflowrelatestooursharerepurchaseprograms.Cashflowsfromfinancingactivitiesforfiscal2010includethenetproceedsof$774millionfromtwodebtofferings.OnApril7,2009,weissued$375millionaggregateprincipalamountof6.95%ten-yearnotes.Relatedtothistransaction,TJXcalledfortheredemptionofitszerocouponconvertiblesubordinatednotes,virtuallyallofwhichwereconvertedinto15.1millionsharesofcommonstock.Weusedtheproceedsofthe6.95%notestorepurchaseadditionalsharesofcommonstockunderourstockrepurchaseprogram.OnJuly23,2009,weissued$400millionaggregateprincipalamountof4.20%six-yearnotes.WeusedaportionoftheproceedsofthisofferingtorefinanceourC$235milliontermcreditfacilityonAugust10,2009,priortoitsscheduledmaturity,andusedtheremainder,togetherwithfundsfromoperations,topayour7.45%notesontheirscheduledmaturityofDecember15,2009.Wespent$950millioninfiscal2010,$741millioninfiscal2009and$950millioninfiscal2008underourstockrepurchaseprograms.Werepurchased27.0millionsharesinfiscal2010,24.0millionsharesinfiscal2009and33.3millionsharesinfiscal2008.Allsharesrepurchasedwereretired.Werecordtherepurchaseofourstockonacashbasis,andtheamountsreflectedinthefinancialstatementsmayvaryfromtheaboveduetothetimingofthesettlementofourrepurchases.Duringfiscal2010,wecompletedthe$1billionstockrepurchaseprogramapprovedbytheBoardofDirectorsinfiscal2009andinitiatedanothermulti-yearrepurchaseprogramthathadbeenapprovedbytheBoardinSeptember2009.AsofJanuary30,2010,$795millionremainedavailableforpurchaseundertheprogramauthorizedinSeptember2009.InFebruary2010,theBoardauthorizedanadditional$1billionstockrepurchaseprogram.Wecurrentlyplantorepurchaseuptoapproximately$900millionto$1billionofourstockinfiscal2011.WedeterminethetimingandamountofrepurchasesandexecutionofRule10b5-1plansfromtimetotimebasedonourassessmentofvariousfactorsincludingexcesscashflow,liquidity,marketconditions,theeconomicenvironmentandprospectsforthebusinessandotherfactors,andthetimingandamountofthesepurchasesmaychange.Wedeclaredquarterlydividendsonourcommonstockwhichtotaled$0.48pershareinfiscal2010,$0.44pershareinfiscal2009and$0.36pershareinfiscal2008.Cashpaymentsfordividendsonourcommonstocktotaled33 $198millioninfiscal2010,$177millioninfiscal2009and$151millioninfiscal2008.Weannouncedourintentiontoincreasethequarterlydividendonourcommonstockto$0.15pershare,effectivewiththedividendpayableinJune2010,subjecttotheapprovalofourBoardofDirectors.Financingactivitiesalsoincludedproceedsof$170millioninfiscal2010,$142millioninfiscal2009and$134millioninfiscal2008fromtheexerciseofemployeestockoptions.Wetraditionallyhavefundedourseasonalmerchandiserequirementsthroughcashgeneratedfromoperations,short-termbankborrowingsandtheissuanceofshort-termcommercialpaper.Wehavea$500millionrevolvingcreditfacilitymaturinginMay2010anda$500millionrevolvingcreditfacilitymaturinginMay2011.TJXpayssixbasispointsannuallyonthecommittedamountsundereachofthesecreditfacilities.Theseagreementshavenocompensatingbalancerequirementsandhavevariouscovenantsincludingarequirementofaspecifiedratioofdebttoearnings.Theseagreementsserveasbackuptoourcommercialpaperprogram.AsofJanuary30,2010andJanuary31,2009therewerenooutstandingshort-termborrowings.ThemaximumamountofourU.S.short-termborrowingsoutstandingwas$165millionduringfiscal2010and$222millionduringfiscal2009.TheweightedaverageinterestrateonourU.S.short-termborrowingswas1.01%infiscal2010.AsofJanuary30,2010andJanuary31,2009,ourforeignsubsidiarieshaduncommittedcreditfacilities.TJXCanadahadtwocreditlines,aC$10millioncreditfacilityforoperatingexpensesandaC$10millionletterofcreditfacility.TherewerenoborrowingsundertheCanadiancreditlineforoperatingexpensesinfiscal2010orfiscal2009.TherewerenoamountsoutstandingontheCanadiancreditlineforoperatingexpensesattheendoffiscal2010orfiscal2009.AsofJanuary30,2010andJanuary31,2009,TJXEuropehadacreditlineof£20millionforourEuropeanoperations.ThemaximumamountoutstandingunderthisU.K.creditlinewas£1.9millioninfiscal2010and£6.1millioninfiscal2009.TherewerenooutstandingborrowingsonthisU.K.creditlineattheendoffiscal2010orfiscal2009.Webelievethatinternallygeneratedfundsandourcurrentcreditfacilitiesaremorethanadequatetomeetouroperating,debtandcapitalneedsforatleastthenexttwelvemonths.SeeNoteDtotheconsolidatedfinancialstatementsforfurtherinformationregardingourlong-termdebtandotherfinancingsources.Contractualobligations:AsofJanuary30,2010,wehadpaymentobligations(includingcurrentinstallments)underlong-termdebtarrangements,leasesforpropertyandequipmentandpurchaseobligationsthatwillrequirecashoutflowsasfollows(inthousands):TabularDisclosureofContractualObligationsTotalLessThan1Year1-3Years3-5YearsMoreThan5YearsPaymentsDuebyPeriodLong-termdebtobligationsincludingestimatedinterestandcurrentinstallments$1,135,751$42,863$85,725$85,725$921,438Operatingleasecommitments5,695,0611,005,3661,771,0551,307,7731,610,867Capitalleaseobligation22,9453,7267,8097,8243,586Purchaseobligations2,329,7192,264,57862,0283,113—TotalObligations$9,183,476$3,316,533$1,926,617$1,404,435$2,535,891Thelong-termdebtobligationsaboveincludeestimatedinterestcosts.Theleasecommitmentsintheabovetableareforminimumrentanddonotincludecostsforinsurance,realestatetaxes,otheroperatingexpensesand,insomecases,rentalsbasedonapercentageofsales;theseitemstotaledapproximatelyone-thirdofthetotalminimumrentforthefiscalyearendedJanuary30,2010.Ourpurchaseobligationsprimarilyconsistofpurchaseordersformerchandise;purchaseordersforcapitalexpenditures,suppliesandotheroperatingneeds;commitmentsundercontractsformaintenanceneedsandotherservices;andcommitmentsunderexecutiveemploymentandotheragreements.Weexcludefrompurchaseobligationslong-termagreementsforservicesandoperatingneedsthatcanbecancelledwithoutpenalty.Wealsohavelong-termliabilitieswhichinclude$254.5millionforemployeecompensationandbenefits,themajorityofwhichwillcomeduebeyondfiveyears,$151.0millionforaccruedrent,thecashflowrequirementsofwhich34 areincludedintheleasecommitmentsintheabovetable,and$181.7millionforuncertaintaxpositionsforwhichitisnotreasonablypossibleforustopredictwhentheymaybepaid.CRITICALACCOUNTINGPOLICIESWeprepareourconsolidatedfinancialstatementsinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates(U.S.GAAP)whichrequireustomakecertainestimatesandjudgmentsthatimpactourreportedresults.Thesejudgmentsandestimatesarecontinuallyreviewedandbasedonhistoricalexperienceandotherfactorswhichwebelievearereasonable.Weconsiderourmostcriticalaccountingpolicies,involvingmanagementestimatesandjudgments,tobethoserelatingtotheareasdescribedbelow.Inventoryvaluation:Weusetheretailmethodforvaluinginventoryonafirst-infirst-outbasis.Undertheretailmethod,thecostvalueofinventoryandgrossmarginsaredeterminedbycalculatingacost-to-retailratioandapplyingittotheretailvalueofinventory.Thismethodiswidelyusedintheretailindustryandinvolvesmanagementestimateswithregardtosuchthingsasmarkdownsandinventoryshrinkage.Asignificantfactorinvolvestherecordingandtimingofpermanentmarkdowns.Undertheretailmethod,permanentmarkdownsarereflectedininventoryvaluationwhenthepriceofanitemisreduced.Webelievetheretailmethodresultsinamoreconservativeinventoryvaluationthanotherinventoryaccountingmethods.Inaddition,asanormalbusinesspractice,wehaveaspecificpolicyastowhenmarkdownsaretobetaken,greatlyreducingtheneedformanagementestimates.Inventoryshortageinvolvesestimatingashrinkagerateforinterimperiods,butisbasedonafullphysicalinventorynearthefiscalyearend.Thus,thedifferencebetweenactualandestimatedamountsofshrinkagemaycausefluctuationsinquarterlyresults,butisnotasignificantfactorinfullyearresults.Overall,webelievethattheretailmethod,coupledwithourdisciplinedpermanentmarkdownpolicyandthefullphysicalinventorytakenateachfiscalyearend,resultsinaninventoryvaluationthatisfairlystated.Lastly,manyretailershavearrangementswithvendorsthatprovideforrebatesandallowancesundercertainconditions,whichultimatelyaffectthevalueofinventory.Wehavehistoricallynotenteredintosucharrangementswithourvendorsinourcontinuingoperations.Impairmentoflong-livedassets:Wereviewtherecoverabilityofthecarryingvalueofourlong-livedassetsatleastannuallyandwhenevereventsorcircumstancesoccurthatwouldindicatethatthecarryingamountsofthoseassetsarenotrecoverable.Significantjudgmentisinvolvedinprojectingthecashflowsofindividualstores,aswellasourbusinessunits,whichinvolveanumberoffactorsincludinghistoricaltrends,recentperformanceandgeneraleconomicassumptions.Ifwedeterminethatanimpairmentoflong-livedassetshasoccurred,werecordanimpairmentchargeequaltotheexcessofthecarryingvalueofthoseassetsovertheestimatedfairvalueoftheassets.WebelieveasofJanuary30,2010thatthecarryingvalueofourlong-livedassetsisappropriate.Retirementobligations:Retirementcostsareaccruedovertheservicelifeofanemployeeandrepresent,intheaggregate,obligationsthatwillultimatelybesettledfarinthefutureandarethereforesubjecttoestimates.Wearerequiredtomakeassumptionsregardingvariables,suchasthediscountrateforvaluingpensionobligationsandthelong-termrateofreturnassumedtobeearnedonpensionassets,bothofwhichimpactthenetperiodicpensioncostfortheperiod.Thediscountrate,whichwedetermineannuallybasedonmarketinterestrates,andourestimatedlong-termrateofreturn,whichcandifferconsiderablyfromactualreturns,aretwofactorsthatcanhaveaconsiderableimpactontheannualcostofretirementbenefitsandthefundedstatusofourqualifiedpensionplan.Themarketperformanceonplanassetsduringfiscal2009wasconsiderablyworsethanourexpectedreturn,andasaresulttheunfundedstatusofourqualifiedplanincreasedsignificantlyattheendoffiscal2009.Despitethis,wewerenotrequiredtofundourplanduringfiscal2009,primarilyduetovoluntaryfundinginprioryears.Infiscal2010wefundedourqualifiedpensionplanwith$132.7millionandmaymakeadditionalvoluntarycontributionsduringfiscal2011.Share-basedcompensation:InaccordancewithU.S.GAAP,TJXestimatesthefairvalueofstockawardsissuedtoemployeesanddirectorsunderitsstockincentiveplan.Thefairvalueoftheawardsisamortizedas“share-basedcompensationexpense”overthevestingperiodsduringwhichtherecipientsarerequiredtoprovideservice.WeusetheBlack-Scholesoptionpricingmodelfordeterminingthefairvalueofstockoptionsgranted,whichrequiresmanagement35 tomakesignificantjudgmentsandestimates.Theuseofdifferentassumptionsandestimatescouldhaveamaterialimpactontheestimatedfairvalueofstockoptiongrantsandtherelatedexpense.Casualtyinsurance:Infiscal2008,weinitiatedafixedpremiumprogramforourcasualtyinsurance.Previously,ourcasualtyinsuranceprogramrequiredustoestimatethetotalclaimswewouldincurasacomponentofourannualinsurancecost.Theestimatedclaimsaredeveloped,withtheassistanceofanactuary,basedonhistoricalexperienceandotherfactors.Theseestimatesinvolvesignificantjudgmentsandassumptions,andactualresultscoulddifferfromtheseestimates.Alargeportionoftheseclaimsarefundedwithanon-refundablepaymentduringthepolicyyear,offsettingourestimatedclaimsaccrual.Wehadanetaccrualof$17.1millionfortheunfundedportionofourcasualtyinsuranceprogramasofJanuary30,2010.Incometaxes:Likemanylargecorporations,ourincometaxreturnsareregularlyauditedbyfederal,stateandlocaltaxauthoritiesintheUnitedStatesandinforeigncountrieswhereweoperate.Suchauthoritiesmaychallengepositionswetake,andweareengagedinvariousproceedingswithsuchauthoritieswithrespecttoassessments,claims,deficienciesandrefunds.InaccordancewithU.S.GAAP,weevaluateuncertaintaxpositionsbasedonourunderstandingofthefacts,circumstancesandinformationavailableatthereportingdate,andweaccrueforexposurewhenwebelievethatitismorelikelythannot,basedonthetechnicalmerits,thatthepositionswillnotbesustaineduponexamination.However,itispossiblethatamountsaccruedorpaidastheresultofthefinalresolutionsofexaminations,judicialoradministrativeproceedings,changesinfactsorlaw,expirationsofstatuteoflimitationsinspecificjurisdictionsorotherresolutionsof,orchangesin,taxpositions,willdiffereitherpositivelyornegativelyfromtheamountswehaveaccrued,andmayresultinaccrualsorpaymentsforperiodsnotcurrentlyunderexaminationorforwhichnoclaimshavebeenmade.Itispossiblethatsuchfinalresolutionsorchangesinaccrualscouldhaveamaterialadverseimpactontheresultsofoperationsoftheperiodinwhichaexaminationorproceedingisresolvedorintheperiodinwhichachangedoutcomebecomesprobableandreasonablyestimable.ReservesforComputerIntrusionrelatedcostsandfordiscontinuedoperations:AsdiscussedinNoteBandNoteNtotheconsolidatedfinancialstatementsandelsewhereintheManagement’sDiscussionandAnalysis,wehavereservesforprobablelossesarisingoutoftheComputerIntrusionandforleasesrelatingtooperationsdiscontinuedbyuswhereweweretheoriginallesseeoraguarantorandwhichhavebeenassignedorsublettothirdparties.TheComputerIntrusionreserverequiresustomakeestimatesandassumptionsabouttheoutcomeandcostsofclaims,litigationandinvestigationsandcostsandexpenseswewillincur.Wemaketheseestimatesbasedonourbestjudgmentsoftheoutcomeofsuchclaims,litigationandinvestigationsandoftheamountofsuchcostsandexpenses.Theleasesrelatingtodiscontinuedoperationsarelong-termobligations,andtheestimatedcosttousinvolvesnumerousestimatesandassumptionsincludingwhetherandforhowlongweremainobligatedwithrespecttoparticularleases,theextenttowhichassigneesorsubtenantswillfulfillourfinancialandotherobligationsundertheleases,howparticularobligationsmayultimatelybesettledandwhatmitigatingfactors,includingindemnification,mayexisttoanyliabilitywemayhave.Wedeveloptheseassumptionsbasedonpastexperienceandbyevaluatingvariousprobableoutcomesandthecircumstancessurroundingeachsituationandlocation.WebelievethatourreservesareareasonableestimateofthemostlikelyoutcomesarisingoutoftheComputerIntrusionandtheleasesrelatingtodiscontinuedoperationsandthatthereservesshouldbeadequatetocovertheultimatecashcostswewillincur.However,actualresultsmaydifferfromourcurrentestimates,andsuchdifferencescouldbematerial.Wemaydecreaseorincreasetheamountofourreservestoadjustfordevelopmentsrelatingtotheunderlyingassumptionsandotherfactors.Losscontingencies:Certainconditionsmayexistasofthedatethefinancialstatementsareissuedthatmayresultinalosstousbutwillnotberesolveduntiloneormorefutureeventsoccurorfailtooccur.Ourmanagement,whererelevant,withtheassistanceofourlegalcounsel,assessessuchcontingentliabilities,andsuchassessmentsinherentlyinvolveexercisesofjudgment.Inassessinglosscontingenciesrelatedtolegalproceedingsthatarependingagainstusorclaimsthatmayresultinsuchproceedings,ourlegalcounselassistsusinevaluatingtheperceivedmeritsofanylegalproceedingsorclaimsaswellastheperceivedmeritsofthereliefsoughtorexpectedtobesoughttherein.Iftheassessmentofacontingencyindicatesthatitisprobablethatamateriallosshasbeenincurredandtheamountoftheliabilitycanbereasonablyestimated,thenwewillaccruefortheestimatedliabilityinthefinancialstatements.If36 theassessmentindicatesthatapotentiallymateriallosscontingencyisnotprobable,butisreasonablypossible,orisprobablebutcannotbereasonablyestimated,thenwewilldisclosethenatureofthecontingentliability,togetherwithanestimateoftherangeofthepossiblelossorastatementthatsuchlossisnotreasonablyestimable.RECENTACCOUNTINGPRONOUNCEMENTSSeeNoteAtoourconsolidatedfinancialstatementsincludedinthisannualreportforrecentlyissuedaccountingstandards,includingtheexpecteddatesofadoptionandestimatedeffectsonourconsolidatedfinancialstatements.ITEM7A.QUANTITATIVEANDQUALITATIVEDISCLOSUREABOUTMARKETRISKWedonotenterintoderivativesforspeculativeortradingpurposes.FOREIGNCURRENCYEXCHANGERISKWeareexposedtoforeigncurrencyexchangerateriskonourinvestmentinourCanadianandEuropeanoperationsonthetranslationoftheseforeignoperationsintotheU.S.dollarandonpurchasesbyouroperationsofgoodsincurrenciesthatarenottheirlocalcurrencies.AsmorefullydescribedinNoteEtoourconsolidatedfinancialstatements,wehedgeaportionofourintercompanytransactionswithforeignoperationsandcertainmerchandisepurchasecommitmentsincurredbytheseoperationswithderivativefinancialinstruments.Duringfiscal2009,weceasedhedgingournetinvestmentpositioninourforeignoperations.Weenterintoderivativecontractsonlywhenthereisanunderlyingeconomicexposure.Weutilizecurrencyforwardandswapcontractsdesignedtooffsetthegainsorlossesintheunderlyingexposures.Thecontractsareexecutedwithbankswebelievearecreditworthyandaredenominatedincurrenciesofmajorindustrialcountries.Wehaveperformedasensitivityanalysisassumingahypothetical10%adversemovementinforeigncurrencyexchangeratesappliedtothehedgingcontractsandtheunderlyingexposuresdescribedaboveaswellasthetranslationofourforeignoperationsintoourreportingcurrency.AsofJanuary30,2010,theanalysisindicatedthatsuchanadversemovementwouldnothaveamaterialeffectonourconsolidatedfinancialpositionbutcouldhavereducedourpre-taxincomefromcontinuingoperationsforfiscal2010byapproximately$42million.INTERESTRATERISKOurcashequivalents,short-terminvestmentsandcertainlinesofcreditbearvariableinterestrates.Changesininterestratesaffectinterestearnedandpaidbyus.Inaddition,changesinthegrossamountofourborrowingsandfuturechangesininterestrateswillaffectourfutureinterestexpense.Weperiodicallyenterintofinancialinstrumentstomanageourcostofborrowing;however,webelievethattheuseofprimarilyfixedratedebtminimizesourexposuretomarketconditions.Wehaveperformedasensitivityanalysisassumingahypothetical10%adversemovementininterestratesappliedtothemaximumvariable-ratedebtoutstanding,cashandcashequivalentsandshort-terminvestments.AsofJanuary30,2010,theanalysisindicatedthatsuchanadversemovementwouldnothaveamaterialeffectonourconsolidatedfinancialposition,resultsofoperationsorcashflows.EQUITYPRICERISKTheassetsofourqualifiedpensionplan,alargeportionofwhichareinvestedinequitysecurities,aresubjecttotherisksanduncertaintiesofthefinancialmarkets.Weallocatethepensionassetsinamannerthatattemptstominimizeandcontrolourexposuretomarketuncertainties.Investments,ingeneral,areexposedtovariousrisks,suchasinterestrate,credit,andoverallmarketvolatilityrisks.Thesignificantdeclineinthefinancialmarketsoverthelastseveralyearshasimpactedthevalueofourpensionplanassetsandthefundedstatusofourplan,resultinginincreasedcontributionstotheplan.ITEM8.FINANCIALSTATEMENTSANDSUPPLEMENTARYDATATheinformationrequiredbythisitemmaybefoundonpagesF-1throughF-33ofthisAnnualReportonForm10-K.37 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)ChangesinInternalControlOverFinancialReportingEffectiveJanuary1,2010,weimplementedanewpayrollprocessingsystemforourdomesticbusinessoperationswithintheCompanywhichresultedinmaterialchangestoourprocessesandproceduresaffectinginternalcontroloverfinancialreporting.Otherwisetherewerenochangesinourinternalcontroloverfinancialreporting(asdefinedinRules13a-15(f)and15d-15(f)undertheExchangeAct)duringthefourthquarteroffiscal2010identifiedinconnectionwithourChiefExecutiveOfficer’sandChiefFinancialOfficer’sevaluationthathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.(c)Management’sAnnualReportonInternalControlOverFinancialReportingOurmanagementisresponsibleforestablishingandmaintainingadequateinternalcontroloverfinancialreporting.InternalcontroloverfinancialreportingisdefinedinRules13a-15(f)and15d-15(f)promulgatedundertheExchangeActasaprocessdesignedby,orunderthesupervisionof,ourprincipalexecutiveandprincipalfinancialofficers,orpersonsperformingsimilarfunctions,andeffectedbyourboardofdirectors,managementandotherpersonnel,toprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithU.S.GAAPandincludesthosepoliciesandproceduresthat:—PertaintothemaintenanceofrecordsthatinreasonabledetailaccuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofTJX;—ProvidereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithU.S.GAAP,andthatreceiptsandexpendituresofTJXarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofTJX;and—Providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,useordispositionofTJX’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.OurinternalcontrolsystemisdesignedtoprovidereasonableassurancetoourmanagementandBoardofDirectorsregardingthepreparationandfairpresentationofpublishedfinancialstatements.Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Therefore,eventhosesystemsdeterminedtobeeffectivecanprovideonlyreasonableassurancewithrespecttofinancialstatementpreparationandpresentation.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmay38 becomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.Underthesupervisionandwiththeparticipationofourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,weconductedanevaluationoftheeffectivenessofourinternalcontroloverfinancialreportingasofJanuary30,2010basedontheframeworkinInternalControl—IntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(“COSO”).Basedonthatevaluation,managementconcludedthatitsinternalcontroloverfinancialreportingwaseffectiveasofJanuary30,2010.(d)AttestationReportoftheIndependentRegisteredPublicAccountingFirmPricewaterhouseCoopersLLP,theindependentregisteredpublicaccountingfirmthatauditedandreportedonourconsolidatedfinancialstatementscontainedherein,hasauditedtheeffectivenessofourinternalcontroloverfinancialreportingasofJanuary30,2010,andhasissuedanattestationreportontheeffectivenessofourinternalcontroloverfinancialreportingincludedherein.ITEM9B.OTHERINFORMATIONNotapplicable.39 PartIIIITEM10.DIRECTORS,EXECUTIVEOFFICERSANDCORPORATEGOVERNANCEThefollowingaretheexecutiveofficersofTJXasofMarch30,2010:NameAgeOfficeandEmploymentDuringLastFiveYearsBernardCammarata70ChairmanoftheBoardsince1999.ActingChiefExecutiveOfficerfromSeptember2005toJanuary2007andChiefExecutiveOfficerfrom1989to2000.LedTJXanditsformerTJXsubsidiaryandT.J.MaxxDivisionfromtheorganizationofthebusinessin1976until2000,includingservingasChiefExecutiveOfficerandPresidentofTJX,ChairmanandPresidentofTJX’sT.J.MaxxDivision,andChairmanofTheMarmaxxGroup.ErnieHerrman49SeniorExecutiveVicePresident,GroupPresidentsinceAugust2008.SeniorExecutiveVicePresidentsinceJanuary2007andPresident,MarmaxxfromJanuary2005toAugust2008.SeniorExecutiveVicePresident,ChiefOperatingOfficer,Marmaxxfrom2004to2005.ExecutiveVicePresident,Merchandising,Marmaxxfrom2001to2004.VariousmerchandisingpositionswithTJXsincejoiningin1989.CarolMeyrowitz56ChiefExecutiveOfficersinceJanuary2007,DirectorsinceSeptember2006andPresidentsinceOctober2005.ConsultanttoTJXfromJanuary2005toOctober2005.SeniorExecutiveVicePresidentfromMarch2004toJanuary2005.PresidentofMarmaxxfrom2001toJanuary2005.ExecutiveVicePresidentofTJXfrom2001to2004.JeffreyG.Naylor51SeniorExecutiveVicePresident,ChiefFinancialandAdministrativeOfficersinceFebruary2009.SeniorExecutiveVicePresident,ChiefAdministrativeandBusinessDevelopmentOfficer,June2007toFebruary2009.ChiefFinancialandAdministrativeOfficer,September2006toJune2007.SeniorExecutiveVicePresident,ChiefFinancialOfficer,fromMarch2004toSeptember2006,ExecutiveVicePresident,ChiefFinancialOfficereffectiveFebruary2004.JeromeRossi66SeniorExecutiveVicePresident,GroupPresident,sinceJanuary2007.SeniorExecutiveVicePresident,ChiefOperatingOfficer,Marmaxxfrom2005toJanuary2007.President,HomeGoods,from2000to2005.ExecutiveVicePresident,StoreOperations,HumanResourcesandDistributionServices,Marmaxxfrom1996to2000.PaulSweetenham45SeniorExecutiveVicePresident,GroupPresident,Europe,sinceJanuary2007.President,T.K.Maxxsince2001.SeniorVicePresident,MerchandisingandMarketing,T.K.Maxxfrom1999to2001.VariousmerchandisingpositionswithT.K.Maxxfrom1993to1999.AllofficersholdofficeuntilthenextannualmeetingoftheBoardinJune2010anduntiltheirsuccessorsareelected,orappointed,andqualified.TJXwillfilewiththeSecuritiesandExchangeCommissionadefinitiveproxystatementnolaterthan120daysafterthecloseofitsfiscalyearendedJanuary30,2010(ProxyStatement).TheinformationrequiredbythisItemandnotgiveninthisItemwillappearundertheheadings“ElectionofDirectors,”“CorporateGovernance,”“AuditCommitteeReport”and“BeneficialOwnership”inourProxyStatement,whichsectionsareincorporatedinthisitembyreference.TJXhasaCodeofEthicsforTJXExecutivesgoverningitsChairman,ChiefExecutiveOfficer,President,ChiefFinancialandAdministrativeOfficer,PrincipalAccountingOfficerandothersenioroperating,financialandlegalexecutives.TheCodeofEthicsforTJXExecutivesisdesignedtoensureintegrityinitsfinancialreportsandpublicdisclosures.TJXalsohasaCodeofConductandBusinessEthicsforDirectorswhichpromoteshonestandethicalconduct,compliancewithapplicablelaws,rulesandregulationsandtheavoidanceofconflictsofinterest.Bothofthesecodesofconductarepublishedatwww.tjx.com.Weintendtodiscloseanyfutureamendmentsto,orwaiversfrom,theCodeofEthicsforTJXExecutivesortheCodeofBusinessConductandEthicsforDirectorswithinfourbusinessdaysof40 thewaiveroramendmentthroughawebsitepostingorbyfilingaCurrentReportonForm8-KwiththeSecuritiesandExchangeCommission.ITEM11.EXECUTIVECOMPENSATIONTheinformationrequiredbythisItemwillappearundertheheading“ExecutiveCompensation”inourProxyStatement,whichsectionisincorporatedinthisitembyreference.ITEM12.SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENTANDRELATEDSTOCKHOLDERMATTERSTheinformationrequiredbythisItemwillappearundertheheading“BeneficialOwnership”inour2010ProxyStatement,whichsectionisincorporatedinthisitembyreference.ITEM13.CERTAINRELATIONSHIPSANDRELATEDTRANSACTIONS,ANDDIRECTORINDEPENDENCETheinformationrequiredbythisItemwillappearundertheheadings“TransactionswithRelatedPersons”and“CorporateGovernance”inourProxyStatement,whichsectionsareincorporatedinthisitembyreference.ITEM14.PRINCIPALACCOUNTANTFEESANDSERVICESTheinformationrequiredbythisItemwillappearundertheheading“AuditCommitteeReport”inourProxyStatement,whichsectionisincorporatedinthisitembyreference.41 PartIVITEM15.EXHIBITS,FINANCIALSTATEMENTSCHEDULES(a)FinancialStatementSchedulesForalistoftheconsolidatedfinancialinformationincludedherein,seeIndextotheConsolidatedFinancialStatementsonpageF-1.ScheduleII—ValuationandQualifyingAccountsInthousandsBalanceBeginningofPeriodAmountsChargedtoNetIncomeWrite-OffsAgainstReserveBalanceEndofPeriodSalesReturnReserve:FiscalYearEndedJanuary30,2010$14,006$1,015,470$1,012,621$16,855FiscalYearEndedJanuary31,2009$15,298$934,017$935,309$14,006FiscalYearEndedJanuary26,2008$14,182$913,036$911,920$15,298DiscontinuedOperationsReserve:FiscalYearEndedJanuary30,2010$40,564$1,761$6,428$35,897FiscalYearEndedJanuary31,2009$46,076$1,820$7,332$40,564FiscalYearEndedJanuary26,2008$57,677$1,820$13,421$46,076CasualtyInsuranceReserve:FiscalYearEndedJanuary30,2010$20,759$1,093$4,736$17,116FiscalYearEndedJanuary31,2009$26,373$1,232$6,846$20,759FiscalYearEndedJanuary26,2008$31,443$17,673$22,743$26,373ComputerIntrusionReserve:FiscalYearEndedJanuary30,2010$42,211$—$18,730$23,481FiscalYearEndedJanuary31,2009$117,266$(13,000)$62,055$42,211FiscalYearEndedJanuary26,2008$—$159,200$41,934$117,26642 (b)ExhibitsListedbelowareallexhibitsfiledaspartofthisreport.SomeexhibitsarefiledbytheRegistrantwiththeSecuritiesandExchangeCommissionpursuanttoRule12b-32undertheExchangeAct.ExhibitNo.DescriptionofExhibit3(i).1FourthRestatedCertificateofIncorporationisincorporatedhereinbyreferencetoExhibit99.1totheForm8-A/AfiledSeptember9,1999.CertificateofAmendmentofFourthRestatedCertificateofIncorporationisincorporatedhereinbyreferencetoExhibit3(i)totheForm10-QfiledforthequarterendedJuly28,2005.3(ii).1By-lawsofTJX,asamended,areincorporatedhereinbyreferencetoExhibit3.1totheForm8-KfiledonSeptember22,2009.4.1IndenturebetweenTJXandU.S.BankNationalAssociationdatedasofApril2,2009,incorporatedbyreferencetoExhibit4.1oftheRegistrationStatementonFormS-3filedonApril2,2009.4.2FirstSupplementalIndenturebetweenTJXandU.S.BankNationalAssociationdatedasofApril7,2009,incorporatedbyreferencetoExhibit4.1totheForm8-KfiledonApril7,2009.4.3SecondSupplementalIndenturebetweenTJXandU.S.BankNationalAssociationdatedasofJuly23,2009,incorporatedhereinbyreferencetoExhibit4.1totheForm8-KfiledonJuly23,2009.10.14-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-KfiledMay17,2006.10.3TheEmploymentAgreementdatedasofJune2,2009betweenBernardCammarataandTJXisincorporatedhereinbyreferencetoExhibit10.2totheForm10-QfiledforthequarterendedAugust1,2009.*10.4TheEmploymentAgreementdatedasofFebruary1,2009betweenCarolMeyrowitzandTJXisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonFebruary1,2009.*10.5TheEmploymentAgreementdatedasofApril5,2008betweenJeffreyNaylorandTJXisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonApril7,2008.TheAmendmenttoEmploymentAgreement,datedApril21,2009,betweenJeffreyNaylorandTJXisincorporatedhereinbyreferencetoExhibit10.2totheForm8-KfiledonApril24,2009.*10.6TheAmendmenttoEmploymentAgreement,datedApril21,2009,betweenErnieHerrmanandTJXisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonApril24,2009.Theletteragreement,datedSeptember17,2008,betweenErnieHerrmanandTJXisincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedOctober31,2009.TheEmploymentAgreementdatedasofJanuary29,2010betweenErnieHerrmanandTJXisincorporatedhereinbyreferencetoExhibit10.1totheForm8-KfiledonJanuary29,2010.*10.7TheFormof409AAmendmenttoEmploymentAgreementsforthenamedexecutiveofficersisincorporatedhereinbyreferencetoExhibit10.9totheForm10-KfiledforthefiscalyearendedJanuary31,2009.*10.8TheEmploymentAgreementdatedasofJanuary29,2010betweenJeromeRossiandTJXisfiledherewith.*43 ExhibitNo.DescriptionofExhibit10.9TheEmploymentAgreementdatedasofJanuary29,2010betweenandamongPaulSweetenham,TJXU.K.,andTJXisfiledherewith.*10.10TheManagementIncentivePlan,asamendedthroughApril5,2007,isincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedApril28,2007.The409AAmendmenttotheManagementIncentivePlan,effectiveasofJanuary1,2008,isincorporatedhereinbyreferencetoExhibit10.10totheForm10-KfiledforthefiscalyearendedJanuary31,2009.*10.11TheStockIncentivePlan,asamendedthroughJune2,2009,isincorporatedhereinbyreferencetoExhibit10.1totheForm10-QfiledforthequarterendedAugust1,2009.*10.12TheFormofaNon-QualifiedStockOptionCertificateGrantedUndertheStockIncentivePlan(forcertainexecutives)isincorporatedhereinbyreferencetoExhibit12.1totheForm10-QfiledforthequarterendedOctober31,2009.TheFormofNon-QualifiedStockOptionTermsandConditionsGrantedUndertheStockIncentivePlan(foremployees)isincorporatedhereinbyreferencetoExhibit12.2totheForm10-QfiledforthequarterendedOctober31,2009.*10.13TheFormofaPerformance-BasedRestrictedStockAwardGrantedUnderStockIncentivePlanisfiledherewith.*10.14TheFormofaPerformance-BasedDeferredStockAwardGrantedUnderStockIncentivePlanisfiledherewith.*10.15DescriptionofDirectorCompensationArrangementsisincorporatedhereinbyreferencetoExhibit10.15totheForm10-KforthefiscalyearendedJanuary26,2008.*10.16TheLongRangePerformanceIncentivePlan,asamendedthroughApril5,2007,isincorporatedhereinbyreferencetoExhibit10.2totheForm10-QfiledforthequarterendedApril28,2007.The409AAmendmenttotheLongRangePerformanceIncentivePlan,effectiveasofJanuary1,2008,isincorporatedhereinbyreferencetoExhibit10.16totheForm10-KfiledforthefiscalyearendedJanuary31,2009.*10.17TheGeneralDeferredCompensationPlan(1998Restatement)andrelatedFirstAmendment,effectiveJanuary1,1999,areincorporatedhereinbyreferencetoExhibit10.9totheForm10-KforthefiscalyearendedJanuary30,1999.TherelatedSecondAmendment,effectiveJanuary1,2000,isincorporatedhereinbyreferencetoExhibit10.10totheForm10-KfiledforthefiscalyearendedJanuary29,2000.TherelatedThirdandFourthAmendmentsareincorporatedhereinbyreferencetoExhibit10.17totheForm10-KforthefiscalyearendedJanuary28,2006.TherelatedFifthAmendment,effectiveJanuary1,2008isincorporatedhereinbyreferencetoExhibit10.17totheForm10-KfiledthefiscalyearendedJanuary31,2009.*10.18TheSupplementalExecutiveRetirementPlan(2008Restatement)isincorporatedhereinbyreferencetoExhibit10.18totheForm10-KfiledforthefiscalyearendedJanuary31,2009.*10.19TheExecutiveSavingsPlan,asamendedandrestated,asofJanuary1,2008,isincorporatedhereinbyreferencetoExhibit10.19totheForm10-KfiledforthefiscalyearendedJanuary31,2009.*10.20TheformofIndemnificationAgreementbetweenTJXandeachofitsofficersanddirectorsisincorporatedhereinbyreferencetoExhibit10(r)totheForm10-KfiledforthefiscalyearendedJanuary27,1990.*10.21TheTrustAgreementdatedasofApril8,1988betweenTJXandStateStreetBankandTrustCompanyisincorporatedhereinbyreferencetoExhibit10(y)totheForm10-KfiledforthefiscalyearendedJanuary30,1988.*10.22TheTrustAgreementdatedasofApril8,1988betweenTJXandFleetBank(formerlyShawmutBankofBoston,N.A.)isincorporatedhereinbyreferencetoExhibit10(z)totheForm10-KfiledforthefiscalyearendedJanuary30,1988.*10.23TheTrustAgreementforExecutiveSavingsPlandatedasofJanuary1,2005betweenTJXandWellsFargoBank,N.A.isincorporatedhereinbyreferencetoExhibit10.26totheForm10-KfiledforthefiscalyearendedJanuary29,2005.*21Subsidiaries:AlistoftheRegistrant’ssubsidiariesisfiledherewith.44 ExhibitNo.DescriptionofExhibit23ConsentsofIndependentRegisteredPublicAccountingFirm:TheConsentofPricewaterhouseCoopersLLPisfiledherewith.24PowerofAttorney:ThePowerofAttorneygivenbytheDirectorsandcertainExecutiveOfficersofTJXisfiledherewith.31.1CertificationStatementofChiefExecutiveOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002isfiledherewith.31.2CertificationStatementofChiefFinancialOfficerpursuanttoSection302oftheSarbanes-OxleyActof2002isfiledherewith.32.1CertificationStatementofChiefExecutiveOfficerpursuanttoSection906oftheSarbanes-OxleyActof2002isfiledherewith.32.2CertificationStatementofChiefFinancialOfficerpursuanttoSection906oftheSarbanes-OxleyActof2002isfiledherewith.*Managementcontractorcompensatoryplanorarrangement.45 SIGNATURESPursuanttotherequirementsofSection13or15(d)oftheSecuritiesExchangeActof1934,theRegistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersigned,thereuntodulyauthorized.THETJXCOMPANIES,INC./s/JEFFREYG.NAYLORJeffreyG.Naylor,SeniorExecutiveVicePresident,ChiefFinancialandAdministrativeOfficer,onbehalfofTheTJXCompanies,Inc.Dated:March30,201046 PursuanttotherequirementsoftheSecuritiesExchangeActof1934,thisreporthasbeensignedbelowbythefollowingpersonsonbehalfoftheRegistrantandinthecapacitiesandonthedateindicated./S/CAROLMEYROWITZCarolMeyrowitz,PresidentandChiefExecutiveOfficerandDirectorJEFFREYG.NAYLOR*JeffreyG.Naylor,ChiefFinancialandAdministrativeOfficerJOSEB.ALVAREZ*JoseB.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:March30,201047 TheTJXCompanies,Inc.INDEXTOCONSOLIDATEDFINANCIALSTATEMENTSForFiscalYearsEndedJanuary30,2010,January31,2009andJanuary26,2008ReportofIndependentRegisteredPublicAccountingFirm....................................F-2ConsolidatedFinancialStatements:ConsolidatedStatementsofIncomeforthefiscalyearsendedJanuary30,2010,January31,2009andJanuary26,2008................................................................F-3ConsolidatedBalanceSheetsasofJanuary30,2010andJanuary31,2009......................F-4ConsolidatedStatementsofCashFlowsforthefiscalyearsendedJanuary30,2010,January31,2009andJanuary26,2008............................................................F-5ConsolidatedStatementsofShareholders’EquityforthefiscalyearsendedJanuary30,2010,January31,2009andJanuary26,2008..............................................F-6NotestoConsolidatedFinancialStatements...............................................F-7FinancialStatementSchedules:ScheduleII—ValuationandQualifyingAccounts.........................................42F-1 ReportofIndependentRegisteredPublicAccountingFirmToTheBoardofDirectorsandShareholdersofTheTJXCompanies,Inc:Inouropinion,theconsolidatedfinancialstatementslistedintheaccompanyingindexpresentfairly,inallmaterialrespects,thefinancialpositionofTheTJXCompanies,Inc.anditssubsidiaries(the“Company”)asofJanuary30,2010andJanuary31,2009,andtheresultsoftheiroperationsandtheircashflowsforeachofthethreeyearsintheperiodendedJanuary30,2010inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica.Inaddition,inouropinion,thefinancialstatementschedulelistedintheaccompanyingindexpresentsfairly,inallmaterialrespects,theinformationsetforththereinwhenreadinconjunctionwiththerelatedconsolidatedfinancialstatements.Alsoinouropinion,theCompanymaintained,inallmaterialrespects,effectiveinternalcontroloverfinancialreportingasofJanuary30,2010,basedoncriteriaestablishedinInternalControl—IntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission(COSO).TheCompany’smanagementisresponsibleforthesefinancialstatementsandthefinancialstatementschedule,formaintainingeffectiveinternalcontroloverfinancialreportingandforitsassessmentoftheeffectivenessofinternalcontroloverfinancialreporting,includedinManagement’sAnnualReportonInternalControloverFinancialReportingappearingunderItem9A.Ourresponsibilityistoexpressopinionsonthesefinancialstatements,onthefinancialstatementschedule,andontheCompany’sinternalcontroloverfinancialreportingbasedonourintegratedaudits.WeconductedourauditsinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).Thosestandardsrequirethatweplanandperformtheauditstoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatementandwhethereffectiveinternalcontroloverfinancialreportingwasmaintainedinallmaterialrespects.Ourauditsofthefinancialstatementsincludedexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements,assessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,andevaluatingtheoverallfinancialstatementpresentation.Ourauditofinternalcontroloverfinancialreportingincludedobtaininganunderstandingofinternalcontroloverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Ourauditsalsoincludedperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourauditsprovideareasonablebasisforouropinions.AsdiscussedinNoteKtotheaccompanyingconsolidatedfinancialstatements,theCompanychangeditsmethodofaccountingforuncertaintaxpositionsasofJanuary28,2007.Acompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalcontroloverfinancialreportingincludesthosepoliciesandproceduresthat(i)pertaintothemaintenanceofrecordsthat,inreasonabledetail,accuratelyandfairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(ii)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyacceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorizationsofmanagementanddirectorsofthecompany;and(iii)providereasonableassuranceregardingpreventionortimelydetectionofunauthorizedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.Becauseofitsinherentlimitations,internalcontroloverfinancialreportingmaynotpreventordetectmisstatements.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate./s/PricewaterhouseCoopersLLPBoston,MassachusettsMarch30,2010F-2 TheTJXCompanies,Inc.ConsolidatedStatementsofIncomeAmountsinthousandsexceptpershareamountsJanuary30,2010January31,2009January26,2008(53weeks)FiscalYearEndedNetsales$20,288,444$18,999,505$18,336,726Costofsales,includingbuyingandoccupancycosts14,968,42914,429,18513,883,952Selling,generalandadministrativeexpenses3,328,9443,135,5892,997,263Provision(credit)forComputerIntrusionrelatedcosts—(30,500)197,022Interestexpense(income),net39,50914,291(1,598)Incomefromcontinuingoperationsbeforeprovisionforincometaxes1,951,5621,450,9401,260,087Provisionforincometaxes737,990536,054477,655Incomefromcontinuingoperations1,213,572914,886782,432(Loss)fromdiscontinuedoperations,netofincometaxes—(34,269)(10,682)Netincome$1,213,572$880,617$771,750Basicearningspershare:Incomefromcontinuingoperations$2.90$2.18$1.77(Loss)fromdiscontinuedoperations,netofincometaxes$—$(0.08)$(0.03)Netincome$2.90$2.10$1.74Weightedaveragecommonshares—basic417,796419,076443,050Dilutedearningspershare:Incomefromcontinuingoperations$2.84$2.08$1.68(Loss)fromdiscontinuedoperations,netofincometaxes$—$(0.08)$(0.02)Netincome$2.84$2.00$1.66Weightedaveragecommonshares—diluted427,619442,255468,046Cashdividendsdeclaredpershare$0.48$0.44$0.36Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-3 TheTJXCompanies,Inc.ConsolidatedBalanceSheetsInthousandsJanuary30,2010January31,2009FiscalYearEndedASSETSCurrentassets:Cashandcashequivalents$1,614,607$453,527Short-terminvestments130,636—Accountsreceivable,net148,126143,500Merchandiseinventories2,532,3182,619,336Prepaidexpensesandothercurrentassets255,707274,091Currentdeferredincometaxes,net122,462135,675Totalcurrentassets4,803,8563,626,129Propertyatcost:Landandbuildings281,527280,278Leaseholdcostsandimprovements1,930,9771,728,362Furniture,fixturesandequipment3,087,4192,784,316Totalpropertyatcost5,299,9234,792,956Lessaccumulateddepreciationandamortization3,026,0412,607,200Netpropertyatcost2,273,8822,185,756Propertyundercapitallease,netofaccumulatedamortizationof$19,357and$17,124,respectively13,21515,448Otherassets193,230171,381Goodwillandtradename,netofamortization179,794179,528TOTALASSETS$7,463,977$6,178,242LIABILITIESCurrentliabilities:Currentinstallmentsoflong-termdebt$—$392,852Obligationundercapitalleaseduewithinoneyear2,3552,175Accountspayable1,507,8921,276,098Accruedexpensesandothercurrentliabilities1,248,0021,096,766Federal,foreignandstateincometaxespayable136,737—Totalcurrentliabilities2,894,9862,767,891Otherlong-termliabilities697,099765,004Non-currentdeferredincometaxes,net192,447127,008Obligationundercapitallease,lessportionduewithinoneyear15,84418,199Long-termdebt,exclusiveofcurrentinstallments774,325365,583Commitmentsandcontingencies——SHAREHOLDERS’EQUITYCommonstock,authorized1,200,000,000shares,parvalue$1,issuedandoutstanding409,386,126and412,821,592,respectively409,386412,822Additionalpaid-incapital——Accumulatedothercomprehensiveincome(loss)(134,124)(217,781)Retainedearnings2,614,0141,939,516Totalshareholders’equity2,889,2762,134,557TOTALLIABILITIESANDSHAREHOLDERS’EQUITY$7,463,977$6,178,242Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-4 TheTJXCompanies,Inc.ConsolidatedStatementsofCashFlowsInthousandsJanuary30,2010January31,2009January26,2008FiscalYearEnded(53weeks)Cashflowsfromoperatingactivities:Netincome$1,213,572$880,617$771,750Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities:Depreciationandamortization435,218401,707369,396Assetsofdiscontinuedoperationsold—31,328—Lossonpropertydisposalsandimpairmentcharges10,27023,90325,944Deferredincometaxprovision(benefit)53,155132,480(101,799)Amortizationofshare-basedcompensationexpense55,14551,22957,370Excesstaxbenefitsfromstockcompensationexpense(17,494)(18,879)(6,756)Changesinassetsandliabilities:(Increase)inaccountsreceivable(1,862)(8,245)(25,516)Decrease(increase)inmerchandiseinventories147,805(68,489)(112,411)Decrease(increase)inprepaidexpensesandothercurrentassets21,219(118,830)2,144Increase(decrease)inaccountspayable197,496(141,580)117,304Increase(decrease)inaccruedexpensesandotherliabilities31,046(34,525)202,893Increase(decrease)inincometaxespayable152,851(10,488)37,909Other(26,495)34,34436,546Netcashprovidedbyoperatingactivities2,271,9261,154,5721,374,774Cashflowsfrominvestingactivities:Propertyadditions(429,282)(582,932)(526,987)Proceeds(payments)tosettlenetinvestmenthedges—14,379(13,667)Purchaseofshort-terminvestments(278,692)——Salesandmaturitiesofshort-terminvestments153,275——Other(5,578)(34)753Netcash(usedin)investingactivities(560,277)(568,587)(539,901)Cashflowsfromfinancingactivities:Proceedsfromissuanceoflong-termdebt774,263——Principalpaymentsoncurrentportionoflong-termdebt(393,573)——Cashpaymentsfordebtissuanceexpenses(7,202)——Paymentsoncapitalleaseobligation(2,174)(2,008)(1,854)Cashpaymentsforrepurchaseofcommonstock(944,762)(751,097)(940,208)Proceedsfromsaleandissuanceofcommonstock169,862142,154134,109Excesstaxbenefitsfromstockcompensationexpense17,49418,8796,756Cashdividendspaid(197,662)(176,749)(151,492)Netcash(usedin)financingactivities(583,754)(768,821)(952,689)Effectofexchangeratechangesoncash33,185(96,249)(6,241)Netincrease(decrease)incashandcashequivalents1,161,080(279,085)(124,057)Cashandcashequivalentsatbeginningofyear453,527732,612856,669Cashandcashequivalentsatendofyear$1,614,607$453,527$732,612Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-5 TheTJXCompanies,Inc.ConsolidatedStatementsofShareholders’EquityInthousandsSharesParValue$1AdditionalPaid-InCapitalAccumulatedOtherComprehensiveIncome(Loss)RetainedEarningsTotalCommonStockBalance,January27,2007453,650$453,650$—$(33,989)$1,870,460$2,290,121Comprehensiveincome: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—429Totalcomprehensiveincome777,221Implementationofaccountingforuncertaintaxpositions(seenoteK)————(27,178)(27,178)Implementationofthemeasurementprovisionsrelatingtoretirementobligations(seenoteL)———(167)(1,641)(1,808)Cashdividendsdeclaredoncommonstock————(158,202)(158,202)Amortizationofshare-basedcompensationexpense——57,370——57,370StockoptionsrepurchasedbyTJX——(3,266)——(3,266)Issuanceofcommonstockunderstockincentiveplanandrelatedtaxeffect7,2537,253129,942——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)Amortizationofshare-basedcompensationexpense——51,229——51,229Issuanceofcommonstockuponconversionofconvertibledebt1,7171,71739,326——41,043StockoptionsrepurchasedbyTJX——(987)——(987)Issuanceofcommonstockunderstockincentiveplanandrelatedtaxeffect7,4397,439147,858——155,297Commonstockrepurchased(24,284)(24,284)(237,426)—(489,387)(751,097)Balance,January31,2009412,822412,822—(217,781)1,939,5162,134,557Comprehensiveincome:Netincome————1,213,5721,213,572Gainduetoforeigncurrencytranslationadjustments———76,678—76,678Recognitionofpriorservicecostandgains(losses)———8,191—8,191Recognitionofunfundedpostretirementliabilities———(1,212)—(1,212)Totalcomprehensiveincome1,297,229Cashdividendsdeclaredoncommonstock————(201,490)(201,490)Amortizationofshare-basedcompensationexpense——55,145——55,145Issuanceofcommonstockuponconversionofconvertibledebt15,09415,094349,994——365,088Issuanceofcommonstockunderstockincentiveplanandrelatedtaxeffect8,3298,329175,180——183,509Commonstockrepurchased(26,859)(26,859)(580,319)—(337,584)(944,762)Balance,January30,2010409,386$409,386$—$(134,124)$2,614,014$2,889,276Theaccompanyingnotesareanintegralpartofthefinancialstatements.F-6 TheTJXCompanies,Inc.NotestoConsolidatedFinancialStatementsA.SummaryofAccountingPoliciesBasisofPresentation:TheconsolidatedfinancialstatementsofTheTJXCompanies,Inc.(referredtoas“TJX”or“we”)includethefinancialstatementsofallofTJX’ssubsidiaries,allofwhicharewhollyowned.AllofitsactivitiesareconductedbyTJXoritssubsidiariesandareconsolidatedinthesefinancialstatements.Allintercompanytransactionshavebeeneliminatedinconsolidation.FiscalYear:Duringfiscal2010,TJXamendeditsbylawstoprovidethatitsfiscalyearwillendontheSaturdaynearesttothelastdayofJanuaryofeachyear.PriortothisTJX’sfiscalyearendedonthelastSaturdayofJanuary.ThischangeonlyaffectsTJXprospectivelybyshiftingthetimingofitsnext53weekfiscalyear.ThefiscalyearendedJanuary30,2010(“fiscal2010”)included52weeks,thefiscalyearendedJanuary31,2009(“fiscal2009”)included53weeksandthefiscalyearendedJanuary26,2008(“fiscal2008”)included52weeks.EarningsPerShare:Allearningspershareamountsdiscussedrefertodilutedearningspershareunlessotherwiseindicated.UseofEstimates:Thepreparationofthefinancialstatements,inconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica(“U.S.GAAP”),requiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,anddisclosureofcontingentliabilities,atthedateofthefinancialstatementsaswellasthereportedamountsofrevenuesandexpensesduringthereportingperiod.TJXconsidersitsaccountingpoliciesrelatingtoinventoryvaluation,impairmentsoflong-livedassets,retirementobligations,share-basedcompensation,casualtyinsurance,incometaxes,reservesforComputerIntrusionrelatedcostsandfordiscontinuedoperations,andlosscontingenciestobethemostsignificantaccountingpoliciesthatinvolvemanagementestimatesandjudgments.Actualamountscoulddifferfromthoseestimates,andsuchdifferencescouldbematerial.RevenueRecognition:TJXrecordsrevenueatthetimeofsaleandreceiptofmerchandisebythecustomer,netofareserveforestimatedreturns.Weestimatereturnsbaseduponourhistoricalexperience.Wedeferrecognitionofalayawaysaleanditsrelatedprofittotheaccountingperiodwhenthecustomerreceivesthelayawaymerchandise.Proceedsfromthesaleofstorecardsaswellasthevalueofstorecardsissuedtocustomersasaresultofareturnorexchange,aredeferreduntilthecustomersusethecardstoacquiremerchandise.Basedonhistoricalexperience,weestimatetheamountofstorecardsthatwillnotberedeemed(“storecardbreakage”)and,totheextentallowedbylocallaw,theseamountsareamortizedintoincomeovertheredemptionperiod.Revenuerecognizedfromstorecardbreakagewas$7.8millioninfiscal2010,$10.7millioninfiscal2009and$10.1millioninfiscal2008.ConsolidatedStatementsofIncomeClassifications:Costofsales,includingbuyingandoccupancycosts,includesthecostofmerchandisesoldandgainsandlossesoninventoryandfuel-relatedderivativecontracts;storeoccupancycosts(includingrealestatetaxes,utilityandmaintenancecostsandfixedassetdepreciation);thecostsofoperatingourdistributioncenters;payroll,benefitsandtravelcostsdirectlyassociatedwithbuyinginventory;andsystemscostsrelatedtothebuyingandtrackingofinventory.Selling,generalandadministrativeexpensesincludestorepayrollandbenefitcosts;communicationcosts;creditandcheckexpenses;advertising;administrativeandfieldmanagementpayroll,benefitsandtravelcosts;corporateadministrativecostsanddepreciation;gainsandlossesonnon-inventoryrelatedforeigncurrencyexchangecontracts;andothermiscellaneousincomeandexpenseitems.CashandCashEquivalents:TJXgenerallyconsidershighlyliquidinvestmentswithamaturityofthreemonthsorlessatthedateofpurchasetobecashequivalents.Investmentswithmaturitiesgreaterthanthreemonthsbutlessthanoneyearatthedateofpurchaseareincludedinshort-terminvestments.Ourinvestmentsareprimarilyhigh-gradecommercialpaper,institutionalmoneymarketfundsandtimedepositswithmajorbanks.F-7 MerchandiseInventories:Inventoriesarestatedatthelowerofcostormarket.TJXusestheretailmethodforvaluinginventoriesonthefirst-infirst-outbasis.Wealmostexclusivelyutilizeapermanentmarkdownstrategyandlowerthecostvalueoftheinventorythatissubjecttomarkdownatthetimetheretailpricesareloweredinourstores.WeaccrueforinventoryobligationsatthetimeinventoryisshippedratherthanwhenreceivedandacceptedbyTJX.AtJanuary30,2010andJanuary31,2009,in-transitinventoryincludedinmerchandiseinventorieswas$396.8millionand$329.9million,respectively.Comparableamountswerereflectedinaccountspayableatthosedates.CommonStockandEquity:Equitytransactionsconsistprimarilyoftherepurchaseofourcommonstockunderourstockrepurchaseprogramsandtheamortizationofexpenseandissuanceofcommonstockunderourstockincentiveplan.Infiscal2010,wealsoissuedsharesuponconversionofconvertiblenotescalledforredemption,discussedinNoteD.Underourstockrepurchaseprogramswerepurchaseourcommonstockontheopenmarket.Theparvalueofthesharesrepurchasedischargedtocommonstockwiththeexcessofthepurchasepriceoverparfirstchargedagainstanyavailableadditionalpaid-incapital(“APIC”)andthebalancechargedtoretainedearnings.Duetothehighvolumeofrepurchasesoverthepastseveralyears,wehavenoremainingbalanceinAPICinanyoftheyearspresented.Allsharesrepurchasedhavebeenretired.SharesissuedunderTJX’sstockincentiveplanareissuedfromauthorizedbutunissuedshares,andproceedsreceivedarerecordedbyincreasingcommonstockfortheparvalueoftheshareswiththeexcessoverparaddedtoAPIC.Incometaxbenefitsupontheexpensingofoptionsresultinthecreationofadeferredtaxasset,whileincometaxbenefitsduetotheexerciseofstockoptionsreducedeferredtaxassetstotheextentthatanassetfortherelatedgranthasbeencreated.AnytaxbenefitsgreaterthanthedeferredtaxassetscreatedatthetimeofexpensingtheoptionsarecreditedtoAPIC;anydeficienciesinthetaxbenefitsaredebitedtoAPICtotheextentapoolforsuchdeficienciesexists.Intheabsenceofapoolanydeficienciesarerealizedintherelatedperiods’statementsofincomethroughtheprovisionforincometaxes.Anyexcessincometaxbenefitsareincludedincashflowsfromfinancingactivitiesinthestatementsofcashflows.Theparvalueofrestrictedstockawardsisalsoaddedtocommonstockwhenthestockisissued,generallyatgrantdate.ThefairvalueoftherestrictedstockawardsinexcessofparvalueisaddedtoAPICastheawardsareamortizedintoearningsovertherelatedvestingperiods.UponthecallofourconvertiblenotesmostholdersofthenoteschosetoconvertintoTJXcommonstock.Whenconvertedthefacevalueoftheconvertiblenoteslessunamortizeddebtdiscountwasrelieved,commonstockwascreditedwiththeparvalueofthesharesissuedandtheexcessofthecarryingvalueoftheconvertiblenotesoverparwasaddedtoAPIC.Share-BasedCompensation:TJXaccountsforsharebasedcompensationinaccordancewithU.S.GAAPwherebyitestimatesthefairvalueofeachoptiongrantonthedateofgrantusingtheBlack-Scholesoptionpricingmodel.SeeNoteHforadetaileddiscussionofshare-basedcompensation.Interest:TJX’sinterestexpense(income)ispresentedasanetamount.Thefollowingisasummaryofnetinterest:DollarsinthousandsJanuary30,2010January31,2009January26,2008FiscalYearEndedInterestexpense$49,278$38,123$39,926Capitalizedinterest(758)(1,647)(799)Interest(income)(9,011)(22,185)(40,725)Netinterestexpense(income)$39,509$14,291$(1,598)Wecapitalizeinterestduringtheactiveconstructionperiodofmajorcapitalprojects.Capitalizedinterestisaddedtothecostoftherelatedassets.DepreciationandAmortization:Forfinancialreportingpurposes,TJXprovidesfordepreciationandamortizationofpropertybytheuseofthestraight-linemethodovertheestimatedusefullivesoftheassets.Buildingsaredepreciatedover33years.Leaseholdcostsandimprovementsaregenerallyamortizedovertheirusefullifeorthecommittedleaseterm(typically10years),whicheverisshorter.Furniture,fixturesandequipmentaredepreciatedover3to10years.Depreciationandamortizationexpenseforpropertywas$435.8millionforfiscal2010,$398.0millionforfiscal2009F-8 and$364.2millionforfiscal2008.Amortizationexpenseforpropertyheldunderacapitalleasewas$2.2millioninfiscal2010,2009and2008.Maintenanceandrepairsarechargedtoexpenseasincurred.Significantcostsincurredforinternallydevelopedsoftwarearecapitalizedandamortizedover3to10years.Uponretirementorsale,thecostofdisposedassetsandtherelatedaccumulateddepreciationareeliminatedandanygainorlossisincludedinincome.Pre-openingcosts,includingrent,areexpensedasincurred.LeaseAccounting:TJXbeginstorecordrentexpensewhenittakespossessionofastore,whichistypically30to60dayspriortotheopeningofthestoreandgenerallyoccursbeforethecommencementoftheleaseterm,asspecifiedinthelease.Long-LivedAssets:Presentedbelowisinformationrelatedtocarryingvaluesofourlong-livedassetsbygeographiclocation:DollarsinthousandsJanuary30,2010January31,2009January26,2008UnitedStates$1,607,733$1,631,370$1,533,914TJXCanada195,434178,176217,342TJXEurope483,930391,658483,879Totallong-livedassets$2,287,097$2,201,204$2,235,135GoodwillandTradename:Goodwillisprimarilytheexcessofthepurchasepricepaidoverthecarryingvalueoftheminorityinterestacquiredinfiscal1990inTJX’sformer83%-ownedsubsidiaryandrepresentsgoodwillassociatedwiththeT.J.Maxxchain.Inaddition,goodwillincludestheexcessofcostovertheestimatedfairmarketvalueofthenetassetsofWinnersacquiredbyTJXinfiscal1991.Goodwilltotaled$72.1millionasofJanuary30,2010,$71.8millionasofJanuary31,2009and$72.2millionasofJanuary26,2008.Goodwillisconsideredtohaveanindefinitelifeandaccordinglyisnotamortized.ChangesingoodwillareattributabletotheeffectofexchangeratechangesonWinners’reportedgoodwill.Tradenameisthevalueassignedtothename“Marshalls,”acquiredbyTJXinfiscal1996aspartoftheacquisitionoftheMarshallschain.Thevalueofthetradenamewasdeterminedbythediscountedpresentvalueofassumedafter-taxroyaltypayments,offsetbyareductionfortheirpro-ratashareofnegativegoodwillacquired.TheMarshallstradenameiscarriedatavalueof$107.7millionandisconsideredtohaveanindefinitelife.TJXoccasionallyacquiresorlicensesothertrademarkstobeusedinconnectionwithprivatelabelmerchandise.Suchtrademarksareincludedinotherassetsandareamortizedtocostofsales,includingbuyingandoccupancycosts,overtheirusefullife,generallyfrom7to10years.Goodwill,tradenameandtrademarks,andtherelatedamortizationifany,areincludedintherespectiveoperatingsegmenttowhichtheyrelate.Thereisnoaccumulatedimpairmentrelatedtoourgoodwill,tradenameortrademarks.ImpairmentofLong-LivedAssets,GoodwillandTradename:TJXevaluatesitslong-livedassetsandassetswithindefinitelives(otherthanGoodwillandTradename)forindicatorsofimpairmentwhenevereventsorchangesincircumstancesindicatetheircarryingamountsmaynotberecoverable,andatleastannuallyinthefourthquarterofeachfiscalyear.Animpairmentexistswhentheundiscountedcashflowofanassetorassetgroupislessthanthecarryingcostofthatassetorassetgroup.Theevaluationforlong-livedassetsisperformedatthelowestlevelofidentifiablecashflows,whichisgenerallyattheindividualstorelevel.Ifindicatorsofimpairmentareidentified,anundiscountedcashflowanalysisisperformedtodetermineifanimpairmentexists.Thestore-by-storeevaluationsdidnotindicateanyrecoverabilityissues(foranyofourcontinuingoperations)duringthepastthreefiscalyears.Goodwillistestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatanimpairmentmayhaveoccurredandatleastannuallyinthefourthquarterofeachfiscalyear,bycomparingthecarryingvalueoftherelatedreportingunittoitsfairvalue.Animpairmentexistswhenthisanalysis,usingtypicalvaluationmodelssuchasthediscountedcashflowmethod,showsthatthefairvalueofthereportingunitislessthanthecarryingcostofthereportingF-9 unit.Thefairvalueofourreportingunits,usingtypicalvaluationmodelssuchasthediscountedcashflowmethod,isconsiderablyhigherthanthebookvalues,andnoimpairmenthasoccurredinthelastthreefiscalyears.Tradenameisalsotestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountofthetradenamemayexceeditsfairvalueandatleastannuallyinthefourthquarterofeachfiscalyear.Testingisperformedbycomparingthediscountedpresentvalueofassumedafter-taxroyaltypaymentstothecarryingvalueofthetradename.Noimpairmenthasoccurredinthelastthreefiscalyears.AdvertisingCosts:TJXexpensesadvertisingcostsasincurred.Advertisingexpensewas$227.5millionforfiscal2010,$254.0millionforfiscal2009and$255.0millionforfiscal2008.ForeignCurrencyTranslation:TJX’sforeignassetsandliabilitiesaretranslatedintoU.S.dollarsatfiscalyearendexchangerateswithresultingtranslationgainsandlossesincludedinshareholders’equityasacomponentofaccumulatedothercomprehensiveincome(loss).Activityoftheforeignoperationsthataffectsthestatementsofincomeandcashflowsistranslatedataverageexchangeratesprevailingduringthefiscalyear.LossContingencies:TJXrecordsareserveforlosscontingencieswhenitisbothprobablethatalosshasbeenincurredandtheamountofthelossisreasonablyestimable.TJXreviewspendinglitigationandothercontingenciesatleastquarterlyandadjuststhereserveforsuchcontingenciesforchangesinprobableandreasonablyestimablelosses.TJXincludesanestimateforrelatedlegalcostsatthetimesuchcostsarebothprobableandreasonablyestimable.NewAccountingStandards:InJune2009,theFinancialAccountingStandardsBoard(“FASB”)establishedtheFASBAccountingStandardsCodification(“Codification”),whichwaseffectiveonJuly1,2009,tobecomethesourceofauthoritativeU.S.GAAPrecognizedbytheFASBtobeappliedbynongovernmentalentities.RulesandinterpretivereleasesoftheSecuritiesandExchangeCommission(“SEC”)underauthorityofU.S.federalsecuritieslawsarealsosourcesofauthoritativeU.S.GAAPforSECregistrants.Generally,theCodificationisnotexpectedtochangeU.S.GAAP.AllotheraccountingliteratureexcludedfromtheCodificationwillbeconsiderednon-authoritative.TheCodificationiseffectiveforfinancialstatementsissuedforinterimandannualperiodsendingafterSeptember15,2009.WeadoptedthenewstandardsforourfiscalyearendingJanuary30,2010.InJune2009,FASBissuedguidancerelatedtoaccountingfortransfersoffinancialassets,inordertoimprovetherelevance,representationalfaithfulness,andcomparabilityoftheinformationthatareportingentityprovidesinitsfinancialreportsaboutatransferoffinancialassets;theeffectsofatransferonitsfinancialposition,financialperformance,andcashflows;andthetransferor’scontinuinginvolvementintransferredfinancialassets.Thisguidancemustbeappliedasofthebeginningofeachreportingentity’sfirstannualreportingperiodthatbeginsafterNovember15,2009,forinterimperiodswithinthatfirstannualreportingperiodandforinterimandannualreportingperiodsthereafter.Earlierapplicationisprohibited.Thisguidancemustbeappliedtotransfersoccurringonoraftertheeffectivedate.TJXexpectsthattheadoptionofthisguidancewillhavenoimpactonitsfinancialstatements.Reclassifications:ForcomparativepurposesTJXreclassified$34.4millioninthefiscal2009and$42.3millioninthefiscal2008ConsolidatedStatementsofIncomefrom“selling,generalandadministrativeexpenses”to“costofsales,includingbuyingandoccupancycosts”tobeconsistentwiththefiscal2010presentation.Thisreclassificationhadnoimpactonnetincomeortotalcashflowsaspreviouslyreported.B.ProvisionforComputerIntrusionrelatedcostsTJXincurredlossesasaresultofanunauthorizedintrusionorintrusions(theintrusionorintrusions,collectively,the“ComputerIntrusion”)intoportionsofitscomputersystem,whichwasdiscoveredlateinfiscal2007andinwhichTJXbelievescustomerdatawerestolen.Duringthefirstsixmonthsoffiscal2008,weexpensedpre-taxcostsof$37.8millionforcostsweincurredrelatedtotheComputerIntrusion.Inthesecondquarteroffiscal2008,weestablishedapre-taxreserveof$178.1milliontoreflectourestimationofprobablelossesinaccordancewithU.S.GAAPwithrespecttotheComputerIntrusionandrecordedapre-taxchargeinthatamount.WereducedtheProvisionforComputerIntrusionrelatedcostsby$30.5millioninfiscal2009and$18.9millioninfiscal2008asaresultofnegotiations,settlements,insuranceproceedsandadjustmentsinourestimatedlosses.Ourreserveof$23.5millionatJanuary30,2010reflectedF-10 ourcurrentestimationoftotalpotentialcashliabilitiesfrompendinglitigation,proceedings,investigationsandotherclaims,aswellaslegal,ongoingmonitoringandothercostsandexpenses,arisingfromtheComputerIntrusion.Asanestimate,ourreserveissubjecttouncertainty,andouractualcostsmayvaryfromourcurrentestimate,andsuchvariationsmaybematerial.Wemaydecreaseorincreasetheamountofourreservetoadjustfordevelopmentsinthecourseandresolutionoflitigation,claimsandinvestigationsandrelatedexpenses,insuranceproceedsandchangesinourestimates.C.DiscontinuedOperationsSaleofBob’sStores:Infiscal2009,TJXsoldBob’sStoresandrecordedasacomponentofdiscontinuedoperationsalossondisposal(includingexpensesrelatingtothesale)of$19.0million,netoftaxbenefitsof$13.0million.ThenetcarryingvalueofBob’sStoresassetssoldwas$33million,whichconsistedprimarilyofmerchandiseinventoryof$56million,offsetbymerchandisepayableof$21million.Thelossondisposalreflectssalesproceedsof$7.2millionaswellasexpensesof$5.8millionrelatingtothesale.TJXremainscontingentlyliableon7oftheBob’sStoresleaseswhicharediscussedinNoteNtotheconsolidatedfinancialstatements.TJXalsoreclassifiedtheoperatingresultsofBob’sStoresforallperiodspriortothesaleasacomponentofdiscontinuedoperations.Thefollowingtablepresentsthenetsales,segmentprofit(loss)andafter-taxlossfromoperationsreclassifiedtodiscontinuedoperationsforallperiodspriortothesaleofBob’sStores:Inthousands20092008FiscalYearEndedJanuaryNetsales$148,040$310,400Segment(loss)(25,524)(17,398)After-tax(loss)fromoperations(15,314)(10,682)Thetablebelowsummarizesthepre-taxandafter-taxlossfromdiscontinuedoperationsforfiscal2009andfiscal2008:Inthousands20092008FiscalYearEndedJanuary(Loss)fromdiscontinuedoperationsbeforeprovisionforincometaxes$(56,980)$(17,398)Taxbenefits22,7116,716(Loss)fromdiscontinuedoperations,netofincometaxes$(34,269)$(10,682)D.Long-TermDebtandCreditLinesThetablebelowpresentslong-termdebt,exclusiveofcurrentinstallments,asofJanuary30,2010andJanuary31,2009.Allamountsarenetofunamortizeddebtdiscounts.CapitalleaseobligationsareseparatelypresentedinNoteG.InthousandsJanuary30,2010January31,2009Generalcorporatedebt:4.20%seniorunsecurednotes,maturingAugust15,2015(effectiveinterestrateof4.20%afterreductionofunamortizeddebtdiscountof$29infiscal2010)$399,971$—6.95%seniorunsecurednotes,maturingApril15,2019(effectiveinterestrateof6.98%afterreductionofunamortizeddebtdiscountof$646infiscal2010)374,354—Totalgeneralcorporatedebt774,325—Subordinateddebt:Zerocouponconvertiblesubordinatednotes(netofreductionofunamortizeddebtdiscountof$99,360infiscal2009)—365,583Totalsubordinateddebt—365,583Long-termdebt,exclusiveofcurrentinstallments$774,325$365,583F-11 Theaggregatematuritiesoflong-termdebt,exclusiveofcurrentinstallmentsatJanuary30,2010areasfollows:InthousandsLong-TermDebtFiscalYear2012$—2013—2014—2015—Lateryears775,000Lessamountrepresentingunamortizeddebtdiscount(675)Aggregatematuritiesoflong-termdebt,exclusiveofcurrentinstallments$774,325InFebruary2001,TJXissued$517.5millionzerocouponconvertiblesubordinatednotesdueinFebruary2021andraisedgrossproceedsof$347.6million.Theissuepriceofthenotesrepresentedayieldtomaturityof2%peryear.Duringfiscal2010,TJXcalledfortheredemptionofthesenotesattheoriginalissuepriceplusaccruedoriginalissuediscount,and462,057ofsuchnoteswithacarryingvalueof$365.1millionwereconvertedinto15.1millionsharesofTJXcommonstockatarateof32.667sharespernote.TJXpaid$2.3milliontoredeemtheremaining2,886notesoutstandingthatwerenotconverted.Priortofiscal2010,atotalof52,557noteswereeitherconvertedintocommonsharesofTJXorputbacktotheCompany.OnApril7,2009,TJXissued$375millionaggregateprincipalamountof6.95%ten-yearnotesandusedtheproceedsfromthe6.95%notesofferingtorepurchaseadditionalcommonstockunderitsstockrepurchaseprograminfiscal2010.AlsoinApril2009,priortotheissuanceofthe6.95%notes,TJXenteredintoarate-lockagreementtohedgetheunderlyingtreasuryrateofthosenotes.Thecostofthisagreementisbeingamortizedtointerestexpenseoverthetermofthe6.95%notesandresultsinaneffectivefixedrateof7.00%onthosenotes.OnJuly23,2009,TJXissued$400millionaggregateprincipalamountof4.20%six-yearnotes.TJXusedaportionoftheproceedsfromthesaleofthenotestorefinanceitsC$235milliontermcreditfacilityonAugust10,2009,priortoitsscheduledmaturity,andusedtheremainder,togetherwithfundsfromoperations,torepayits$200million7.45%notesdueDecember15,2009,atmaturity.AlsoinJuly2009,priortotheissuanceofthe4.20%notes,TJXenteredintoarate-lockagreementtohedgetheunderlyingtreasuryrateon$250millionofthosenotes.Thecostofthisagreementisbeingamortizedtointerestexpenseoverthetermofthe4.20%notesandresultsinaneffectivefixedrateof4.19%onthenotes.TJXhasa$500millionrevolvingcreditfacilitymaturingMay2010anda$500millionrevolvingcreditfacilitymaturingMay2011.TJXpayssixbasispointsannuallyonthecommittedamountsundereachofthecreditfacilities.Theseagreementshavenocompensatingbalancerequirementsandhavevariouscovenantsincludingarequirementofaspecifiedratioofdebttoearnings.TheseagreementsserveasbackuptoTJX’scommercialpaperprogram.AsofJanuary30,2010,therewerenooutstandingamountsunderthesecreditfacilities.ThemaximumamountofourU.S.short-termborrowingsoutstandingwas$165.0millionduringfiscal2010and$222.0millioninfiscal2009.TheweightedaverageinterestrateonourU.S.short-termborrowingswas1.01%infiscal2010.Wedidnotborrowunderthesecreditfacilitiesduringfiscal2008.AsofJanuary30,2010andJanuary31,2009,TJX’sforeignsubsidiarieshaduncommittedcreditfacilities.TJXCanadahadtwocreditlines,aC$10millionfacilityforoperatingexpensesandaC$10millionletterofcreditfacility.TherewerenoborrowingsundertheCanadiancreditlineforoperatingexpensesinfiscal2010orfiscal2009.ThemaximumamountoutstandingunderourCanadiancreditlineforoperatingexpenseswasC$5.7millioninfiscal2008.TherewerenoamountsoutstandingontheCanadiancreditlineforoperatingexpensesattheendoffiscal2010orfiscal2009.AsofJanuary30,2010,TJXEuropehadacreditlineof£20million.ThemaximumamountoutstandingunderthisU.K.linewas£1.9millioninfiscal2010,£6.1millioninfiscal2009and£16.4millioninfiscal2008.TherewerenooutstandingborrowingsonthisU.K.creditlineattheendoffiscal2010orfiscal2009.F-12 E.FinancialInstrumentsTJXentersintofinancialinstrumentstomanageitscostofborrowingandtomanageitsexposuretochangesinfuelcostsandforeigncurrencyexchangerates.TJXrecognizesallderivativeinstrumentsaseitherassetsorliabilitiesinthestatementsoffinancialpositionandmeasuresthoseinstrumentsatfairvalue.Changestothefairvalueofderivativecontractsthatdonotqualifyforhedgeaccountingarereportedinearningsintheperiodofthechange.Forderivativesthatqualifyforhedgeaccounting,changesinthefairvalueofthederivativesareeitherrecordedinshareholders’equityasacomponentofothercomprehensiveincomeorarerecognizedcurrentlyinearnings,alongwithanoffsettingadjustmentagainstthebasisoftheitembeinghedged.Effectiveinthefourthquarteroffiscal2009,TJXnolongerenteredintocontractstohedgeitsnetinvestmentsinforeignsubsidiariesandsettledallexistingcontracts.Asaresult,therewerenonetinvestmentcontractsasofJanuary30,2010orJanuary31,2009.InterestRateContracts:Duringfiscal2004,TJXenteredintointerestrateswapson$100millionofthe$200millionten-yearnotesoutstandingatthattime,effectivelyconvertingtheinterestonthatportionoftheunsecurednotesfromfixedtoafloatingrateofinterestindexedtothesix-monthLIBORrate.TheinterestrateswapssettledinDecember2009.Undertheseswaps,TJXpaidaspecificvariableinterestrateandreceivedthefixedrateapplicabletotheunderlyingdebt.Theinterestincome/expenseontheswapswasaccruedasearnedandrecordedasanadjustmenttotheinterestexpenseaccruedonthefixed-ratedebt.Theinterestrateswapsweredesignatedasfairvaluehedgesontheunderlyingdebt.Thefairvalueofthecontracts,excludingthenetinterestaccrual,amountedtoanassetof$1.6millionasofJanuary31,2009andanassetof$1.2millionatJanuary26,2008.Thevaluationoftheswapsresultedinanoffsettingfairvalueadjustmenttothedebthedged.Accordingly,currentinstallmentsoflong-termdebtwasincreasedby$1.6millioninfiscal2009andby$1.2millioninfiscal2008.Theaverageeffectiveinterestrateon$100millionofthe7.45%unsecurednotes,inclusiveoftheeffectofhedgingactivity,wasapproximately4.04%infiscal2010,6.54%infiscal2009and8.77%infiscal2008.ConcurrentwiththeissuanceoftheC$235millionthree-yearnoteinfiscal2006,TJXenteredaninterestrateswapontheprincipalamountofthenoteeffectivelyconvertingtheinterestonthenotefromfloatingtoafixedrate.InJanuary2009thisinterestrateswapsettled,oneyearbeforethematuritydateoftheunderlyingdebt,whichwasextendedoneyeartoJanuary2010andsubsequentlyrepaidinthesecondquarteroffiscal2010beforeitsscheduledmaturity.UnderthisswapTJXpaidaspecifiedfixedinterestrateandreceivedthefloatingrateapplicabletotheunderlyingdebt.Theinterestincome/expenseontheswapwasaccruedasearnedandrecordedasanadjustmenttotheinterestexpenseaccruedonthefloating-ratedebt.Theinterestrateswapwasdesignatedasacashflowhedgeoftheunderlyingdebt.Thefairvalueoftheinterestrateswap,excludingthenetinterestaccrual,amountedtoanassetof$1.1million(C$1.1million)asofJanuary26,2008.Thevaluationoftheswapresultedinanadjustmenttoothercomprehensiveincomeofasimilaramount.Theaverageeffectiveinterestrateonthenote,inclusiveoftheeffectofhedgingactivity,wasapproximately4.50%inbothfiscal2009and2008.DieselFuelContracts:Duringfiscal2010,TJXenteredintoagreementstohedgeaportionofitsnotionaldieselrequirementsforfiscal2011,basedonthedieselfuelconsumedbyindependentfreightcarrierstransportingtheCompany’sinventory.Theseeconomichedgesrelateto10%ofournotionaldieselrequirementsinthesecondquarteroffiscal2011and20%ofournotionaldieselrequirementsinthethirdandfourthquartersoffiscal2011.Thesedieselfuelhedgeagreementswillsettleduringthelastthreequartersoffiscal2011andexpireinFebruary2011.Duringfiscal2009,TJXenteredintoagreementstohedgeapproximately30%ofitsnotionaldieselfuelrequirementsforfiscal2010,whichsettledthroughouttheyearandterminatedinFebruary2010.IndependentfreightcarrierstransportingtheCompany’sinventorychargeTJXamileagesurchargefordieselfuelpriceincreasesasincurredbythecarrier.Thehedgeagreementsaredesignedtomitigatethevolatilityofdieselfuelpricing(andtheresultingpermilesurchargespayablebyTJX)bysettingafixedpricepergallonfortheyear.TJXelectednottoapplyhedgeaccountingrulestothesecontracts.Thechangeinthefairvalueofthehedgeagreementsresultedinagainof$4.5millioninfiscal2010andalossof$4.9millioninfiscal2009bothofwhicharereflectedinearningsasacomponentofcostofsales,includingbuyingandoccupancycosts.F-13 ForeignCurrencyContracts:TJXentersintoforwardforeigncurrencyexchangecontractstoobtaineconomichedgesonfirmU.S.dollarandEurodenominatedmerchandisepurchasecommitmentsmadebyT.K.Maxx(UnitedKingdom,Ireland,GermanyandPoland),Winners(Canada)andMarmaxx.Thesecommitmentsaretypicallytwelvemonthsorlessinduration.ThecontractsoutstandingatJanuary30,2010covercertaincommitmentsforthefourquartersoffiscal2011.TJXelectednottoapplyhedgeaccountingrulestothesecontractsinfiscal2010,fiscal2009andfiscal2008.Thechangeinthefairvalueofthesecontractsresultedinincomeof$494,000infiscal2010,alossof$2.3millioninfiscal2009andincomeof$6.6millioninfiscal2008andisincludedinearningsasacomponentofcostofsales,includingbuyingandoccupancycosts.Untilthefourthquarteroffiscal2009,TJXenteredintoforeigncurrencyforwardandswapcontractsinbothCanadiandollarsandBritishpoundsterlingandaccountedforthemashedgesofthenetinvestmentinandbetweenforeignsubsidiariesorcashflowhedgesofWinnerslong-termintercompanydebt.TJXappliedhedgeaccountingtothesehedgecontractsofourinvestmentinforeignsubsidiaries,andchangesinfairvalueofthesecontracts,aswellasgainsandlossesuponsettlement,wererecordedinaccumulatedothercomprehensiveincome,offsettingchangesinthecumulativeforeigntranslationadjustmentsoftheforeignsubsidiaries.Thechangeinfairvalueofthecontractsdesignatedashedgesoftheinvestmentinforeignsubsidiariesresultedinagainof$68.8million,netofincometaxes,infiscal2009,andalossof$15.8million,netofincometaxes,infiscal2008.Theineffectiveportionofthenetinvestmenthedgesresultedinpre-taxchargestotheincomestatementof$2.2millioninfiscal2009and$9.1millioninfiscal2008.Thechangeinthecumulativeforeigncurrencytranslationadjustmentresultedinalossof$76.7million,netofincometaxes,infiscal2010,againof$171.2million,netofincometaxes,infiscal2009,andagainof$21.0million,netofincometaxes,infiscal2008.Amountsincludedinothercomprehensiveincomerelatingtocashflowhedgeswerereclassifiedtoearningsastheunderlyingexposureonthedebthadanimpactonearnings.Thenetamountreclassifiedfromothercomprehensiveincometotheincomestatementinfiscal2009relatedtocashflowhedgeswas$677,368,netofincometaxes.Thenetlossrecognizedinfiscal2008relatedtocashflowhedgeswas$1.1million,netofincometaxes.TJXalsoentersintoderivativecontracts,generallydesignatedasfairvaluehedges,tohedgeintercompanydebtandintercompanyinterestpayable.Thechangesinfairvalueofthesecontractsarerecordedinselling,generalandadministrativeexpensesandareoffsetbymarkingtheunderlyingitemtofairvalueinthesameperiod.Uponsettlement,therealizedgainsandlossesonthesecontractsareoffsetbytherealizedgainsandlossesoftheunderlyingiteminselling,generalandadministrativeexpenses.TherewerenosuchcontractsoutstandingasofJanuary30,2010.Thenetimpactontheincomestatementofhedgingactivityrelatedtotheseintercompanypayableswasincomeof$3.7millioninfiscal2010,expenseof$1.7millioninfiscal2009andincomeof$2.6millioninfiscal2008.F-14 FollowingisasummaryofTJX’sderivativefinancialinstrumentsandrelatedfairvaluesoutstandingatJanuary30,2010:InthousandsPayReceiveBlendedContractRateBalanceSheetLocationAssetUS$(Liability)US$NetFairValueinUS$atJanuary30,2010Hedgeaccountingnotelected:DieselcontractsFixedon260K-520KgalpermonthFloaton260K-520KgalpermonthN/A(AccruedExp)$—$(442)$(442)MerchandisepurchasecommitmentsC$220,244US$210,4760.9556PrepaidExpense4,719—4,719C$2,264S1,4500.6406(AccruedExp)—(105)(105)£19,000US$31,3071.6477PrepaidExpense923—923£16,074S17,9101.1142(AccruedExp)—(882)(882)US$1,175S8181.4370(AccruedExp)—(42)(42)Totalfairvalueofallfinancialinstruments$4,171FollowingisasummaryofTJX’sderivativefinancialinstrumentsandrelatedfairvaluesoutstandingatJanuary31,2009:InthousandsPayReceiveBlendedContractRateBalanceSheetLocationAssetUS$(Liability)US$NetFairValueinUS$atJanuary31,2009Fairvaluehedges:Interestrateswapfixedtofloatingonnotionalof$50,000LIBOR+4.17%7.45%N/AIntRec/PrepaidExp$766$—$766Interestrateswapfixedtofloatingonnotionalof$50,000LIBOR+3.42%7.45%N/AIntRec/PrepaidExp1,093—1,093Intercompanybalancehedgesprimarilyshort-termdebtandrelatedinterestC$37,795US$33,8260.8950PrepaidExpense/(AccruedExp)3,157(106)3,051US$114,990C$143,0510.8038PrepaidExpense/(AccruedExp)1,652(352)1,300US$39,997S30,9361.2929(AccruedExp)—(370)(370)Hedgeaccountingnotelected:DieselcontractsFixedon750KgalpermonthFloaton750KgalpermonthN/A(AccruedExp)—(4,931)(4,931)MerchandisepurchasecommitmentsC$206,109US$172,5000.8369PrepaidExpense/(AccruedExp)4,879(42)4,837C$4,828S2,9500.6110(AccruedExp)—(149)(149)£19,394US$28,0001.4437PrepaidExpense/(AccruedExp)160(364)(204)£7,273S8,0001.1000(AccruedExp)—(343)(343)US$441S3271.3486PrepaidExpense/(AccruedExp)2(25)(23)Totalfairvalueofallfinancialinstruments$5,027F-15 Thefairvaluesofthederivativesareclassifiedasassetsorliabilities,currentornon-current,baseduponvaluationresultsandsettlementdatesoftheindividualcontracts.FollowingarethebalancesheetclassificationsofthefairvalueofTJX’sderivatives:InthousandsJanuary30,2010January31,2009Currentassets$5,642$11,772Non-currentassets——Currentliabilities(1,471)(6,745)Non-currentliabilities——Netfairvalue$4,171$5,027Theimpactofderivativefinancialinstrumentsonstatementsofincomeduringfiscal2010isasfollows:InthousandsLocationofGain(Loss)RecognizedinIncomebyDerivativeAmountofGain(Loss)RecognizedinIncomebyDerivativeDerivativesdesignatedashedginginstruments:FairvaluehedgesInterestrateswapfixedtofloatingonnotionalof$50,000Interestexpense,net$1,092Interestrateswapfixedtofloatingonnotionalof$50,000Interestexpense,net1,422Intercompanybalances,primarilyshort-termdebtandrelatedinterestSelling,general&administrativeexpenses(9,249)Derivativesnotdesignatedashedginginstruments:DieselcontractsCostofsales,includingbuyingandoccupancycosts4,490MerchandisepurchasecommitmentsCostofsales,includingbuyingandoccupancycosts494Gain(loss)recognizedinincome$(1,751)Thecounterpartiestotheforwardexchangecontractsandswapagreementsaremajorinternationalfinancialinstitutions,andthecontractscontainrightsofoffset,whichminimizeTJX’sexposuretocreditlossintheeventofnonperformancebyoneofthecounterparties.TJXisnotrequiredbycounterparties,andTJXdoesnotrequirethatcounterparties,maintaincollateralforthesecontracts.TJXperiodicallymonitorsitspositionandthecreditratingsofthecounterpartiesanddoesnotanticipatelossesresultingfromthenonperformanceoftheseinstitutions.F.DisclosuresaboutFairValueofFinancialInstrumentsFairvalueisdefinedasthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate(exitprice).U.S.GAAPclassifiestheinputsusedtomeasurefairvalueintothefollowinghierarchy:Level1:Unadjustedquotedpricesinactivemarketsforidenticalassetsorliabilities.Level2:Unadjustedquotedpricesinactivemarketsforsimilarassetsorliabilities,orunadjustedquotedpricesforidenticalorsimilarassetsorliabilitiesinmarketsthatarenotactive,orinputsotherthanquotedpricesthatareobservablefortheassetorliability.Level3:Unobservableinputsfortheassetorliability.TJXendeavorstoutilizethebestavailableinformationinmeasuringfairvalueandclassifiesfinancialassetsandliabilitiesintheirentiretybasedonthelowestlevelofinputthatissignificanttothefairvaluemeasurement.TJXhasF-16 determinedthatitsfinancialassetsandliabilitiesaregenerallyclassifiedwithinlevel1orlevel2inthefairvaluehierarchy.ThefollowingtablesetsforthTJX’sfinancialassetsandliabilitiesthatareaccountedforatfairvalueonarecurringbasis:InthousandsJanuary30,2010January31,2009Level1Assets:Executivesavingsplan$55,404$40,636Level2Assets:Short-terminvestments$130,636$—Foreigncurrencyexchangecontracts5,6429,534Interestrateswaps—1,859Liabilities:Foreigncurrencyexchangecontracts$1,029$1,435Dieselfuelcontracts4424,931ThefairvalueofTJX’sgeneralcorporatedebt,includingcurrentinstallments,wasestimatedbyobtainingmarketquotesgiventhetradinglevelsofotherbondsofthesamegeneralissuertypeandmarketperceivedcreditquality.Thefairvalueofthezerocouponconvertiblesubordinatednoteswasestimatedbyobtainingmarketquotes.Thefairvalueoflong-termdebtatJanuary30,2010was$862.3millionversusacarryingvalueof$774.3million.Thefairvalueofthecurrentinstallmentsoflong-termdebtatJanuary31,2009was$399.9millionversusacarryingvalueof$392.9million.ThefairvalueofthesubordinatednotesasofJanuary31,2009,was$358.3millionversusacarryingvalueof$365.6million.TheseestimatesdonotnecessarilyreflectprovisionsorrestrictionsinthevariousdebtagreementsthatmightaffectTJX’sabilitytosettletheseobligations.Ourcashequivalentsarestatedatcost,whichapproximatesfairvalue,duetotheshortmaturitiesoftheseinstruments.Investmentsdesignedtomeetobligationsunderourexecutivesavingsplanareinvestedinsecuritiestradedinactivemarketsandcarriedatunadjustedquotedprices.Asaresultofitsinternationaloperatingandfinancingactivities,TJXisexposedtomarketrisksfromchangesininterestandforeigncurrencyexchangerates,whichmayadverselyaffectitsoperatingresultsandfinancialposition.Whendeemedappropriate,weminimizeriskfrominterestandforeigncurrencyexchangeratefluctuationsthroughtheuseofderivativefinancialinstruments.DerivativefinancialinstrumentsareusedtomanageriskandarenotusedfortradingorotherspeculativepurposesandTJXdoesnotuseleveragedderivativefinancialinstruments.Theforwardforeigncurrencyexchangecontractsandinterestrateswapsarevaluedusingbrokerquotationswhichincludeobservablemarketinformation.TJXmakesnoadjustmentstoquotesorpricesobtainedfrombrokersorpricingservicesbutdoesassessthecreditriskofcounterpartiesandwilladjustfinalvaluationswhenappropriate.Whereindependentpricingservicesprovidefairvalues,TJXobtainsanunderstandingofthemethodsusedinpricing.Assuch,thesederivativeinstrumentsareclassifiedwithinlevel2.G.CommitmentsTJXiscommittedunderlong-termleasesrelatedtoitscontinuingoperationsfortherentalofrealestateandfixturesandequipment.Mostofourleasesarestoreoperatingleaseswithaten-yearinitialtermandoptionstoextendforoneormorefive-yearperiods.CertainMarshallsleases,acquiredinfiscal1996,hadthenremainingtermsranginguptotwenty-fiveyears.T.K.Maxxleasesaregenerallyfortentotwenty-fiveyearswithten-yearkick-outoptions.Manyofourleasescontainescalationclausesandearlyterminationpenalties.Inaddition,wearegenerallyrequiredtopayinsurance,realestatetaxesandotheroperatingexpensesincluding,insomecases,rentalsbasedonapercentageofsales.Theseexpensesintheaggregatewereapproximatelyone-thirdofthetotalminimumrentinfiscal2010,fiscal2009andfiscal2008.F-17 FollowingisascheduleoffutureminimumleasepaymentsforcontinuingoperationsasofJanuary30,2010:InthousandsCapitalLeaseOperatingLeasesFiscalYear2011$3,726$1,005,36620123,897940,06320133,912830,99220143,912721,11120153,912586,662Lateryears3,5861,610,867Totalfutureminimumleasepayments22,945$5,695,061Lessamountrepresentinginterest4,746Netpresentvalueofminimumcapitalleasepayments$18,199Thecapitalleaserelatestoa283,000-square-footadditiontoTJX’shomeofficefacility.RentalpaymentscommencedJune1,2001,andwerecognizedacapitalleaseassetandrelatedobligationequaltothepresentvalueoftheleasepaymentsof$32.6million.Rentalexpenseunderoperatingleasesforcontinuingoperationsamountedto$962.0millionforfiscal2010,$936.6millionforfiscal2009and$875.6millionforfiscal2008.Rentalexpenseincludescontingentrentandisreportednetofsubleaseincome.Contingentrentpaidwas$13.0millioninfiscal2010,$8.3millioninfiscal2009and$9.7millioninfiscal2008.Subleaseincomewas$1.3millioninfiscal2010,$2.1millioninfiscal2009and$2.9millioninfiscal2008.ThetotalnetpresentvalueofTJX’sminimumoperatingleaseobligationsapproximated$4,450.2millionasofJanuary30,2010.TJXhadoutstandinglettersofcredittotaling$37.6millionasofJanuary30,2010and$32.0millionasofJanuary31,2009.LettersofcreditareissuedbyTJXprimarilyforthepurchaseofinventory.H.StockIncentivePlanTJXhasastockincentiveplanunderwhichoptionsandothersharebasedawardsmaybegrantedtoitsdirectors,officersandkeyemployees.ThisplanhasbeenapprovedbyTJX’sshareholders,andallstockcompensationawardsaremadeunderthisplan.TheStockIncentivePlan,asamendedwithshareholderapproval,providesfortheissuanceofupto160.9millionshareswith22.7millionsharesavailableforfuturegrantsasofJanuary30,2010.TJXissuessharesfromauthorizedbutunissuedcommonstock.Totalcompensationcostrelatedtoshare-basedcompensationwas$33.5millionnetofincometaxesof$21.6millioninfiscal2010,$31.2millionnetofincometaxesof$20.1millioninfiscal2009and$37.0millionnetofincometaxesof$20.3millioninfiscal2008.AsofJanuary30,2010,therewas$87.2millionoftotalunrecognizedcompensationcostrelatedtononvestedshare-basedcompensationarrangementsgrantedundertheplan.Thatcostisexpectedtoberecognizedoveraweighted-averageperiodoftwoyears.Optionsforthepurchaseofcommonstockhavebeengrantedat100%ofmarketpriceonthegrantdateandgenerallyvestinthirdsoverathree-yearperiodstartingoneyearafterthegrant,andhaveaten-yearterm.F-18 ThefairvalueofoptionsisestimatedasofthedateofgrantusingtheBlack-Scholesoptionpricingmodelwiththefollowingweightedaverageassumptions:201020092008FiscalYearRisk-freeinterestrate2.49%2.96%4.00%Dividendyield1.3%1.3%1.2%Expectedvolatilityfactor37.3%33.9%31.0%Expectedoptionlifeinyears5.04.84.5Weightedaveragefairvalueofoptionsissued$12.27$10.46$8.38Expectedvolatilityisbasedonacombinationofimpliedvolatilityfromtradedoptionsonourstock,andhistoricalvolatilityduringatermapproximatingtheexpectedtermoftheoptiongranted.Weusehistoricaldatatoestimateoptionexercise,employeeterminationbehavioranddividendyieldwithinthevaluationmodel.Employeegroupsandoptioncharacteristicsareconsideredseparatelyforvaluationpurposeswhenapplicable.Nosuchdistinctionsexistedduringthefiscalyearspresented.Theexpectedoptionliferepresentsanestimateoftheperiodoftimeoptionsareexpectedtoremainoutstandingbaseduponhistoricalexercisetrends.Therisk-freerateisforperiodswithinthecontractuallifeoftheoptionbasedontheU.S.Treasuryyieldcurveineffectatthetimeofgrant.StockOptions:AsummaryofthestatusofTJX’sstockoptionsandrelatedWeightedAverageExercisePrices(“WAEP”)ispresentedbelow(sharesinthousands):OptionsWAEPOptionsWAEPOptionsWAEPJanuary30,2010FiscalYearEndedJanuary31,2009January26,2008(53weeks)Outstandingatbeginningofyear31,773$24.8335,153$22.1737,854$20.50Granted4,87737.745,19935.025,71629.23Exercisedandrepurchased(8,012)21.30(7,533)19.08(7,473)18.84Forfeitures(663)31.79(1,046)27.59(944)24.25Outstandingatendofyear27,975$27.9231,773$24.8335,153$22.17Optionsexercisableatendofyear18,372$24.0121,664$21.5624,243$19.88Includedintheexercisedandrepurchasedamountinthetableaboveareapproximately77,000optionsthatwererepurchasedfromoptioneesbyTJXduringfiscal2009and341,000optionsrepurchasedduringfiscal2008.Therewerenosuchoptionrepurchasesduringfiscal2010.Cashpaidforsuchrepurchasedoptionsamountedto$659,305infiscal2009and$2.3millioninfiscal2008.Thetotalintrinsicvalueofoptionsexercisedwas$109.2millioninfiscal2010,$108.1millioninfiscal2009and$79.7millioninfiscal2008.ThefollowingtablesummarizesinformationaboutstockoptionsoutstandingthatwereexpectedtovestandstockoptionsoutstandingthatwereexercisableatJanuary30,2010.Optionsoutstandingexpectedtovestrepresentstotalunvestedoptionsof9.6millionadjustedforanticipatedforfeitures.InthousandsexceptyearsandpershareamountsSharesAggregateIntrinsicValueWeightedAverageRemainingContractLifeWeightedAverageExercisePriceOptionsoutstandingexpectedtovest8,933$24,0488.9years$35.32Optionsexercisable18,372$282,1725.3years$24.01Totaloutstandingoptionsvestedandexpectedtovest27,305$306,2206.5years$27.71Performance-BasedRestrictedStockandOtherAwards:TJXhasissuedperformance-basedrestrictedstockawardsundertheStockIncentivePlanwhichareissuedatnocosttotherecipientoftheawardandhaverestrictionsthatgenerallylapseoveronetofouryearsfromdateofgrantwhenandifspecifiedperformancecriteriaaremet.ThegrantF-19 datefairvalueoftheawardischargedtoincomeratablyovertheperiodduringwhichtheseawardsvest.Thefairvalueoftheawardsisdeterminedatdateofgrantandassumesthatperformancegoalswillbeachieved.Ifsuchgoalsarenotmet,nocompensationcostisrecognizedandanyrecognizedcompensationcostisreversed.Asummaryofthestatusofournonvestedperformance-basedrestrictedstockandchangesduringfiscal2010ispresentedbelow:SharesinthousandsPerformanceBasedRestrictedStockWeightedAverageGrantDateFairValueNonvestedatbeginningofyear442$28.38Granted47025.91Vested(252)26.43Forfeited(19)29.53Nonvestedatendofyear641$27.30Therewere470,000sharesofperformance-basedrestrictedstock,withaweightedaveragegrantdatefairvalueof$25.91,grantedinfiscal2010;173,000shareswithaweightedaveragegrantdatefairvalueof$33.49weregrantedinfiscal2009and200,000shareswithaweightedaveragegrantdatefairvalueof$28.04weregrantedinfiscal2008.Thefairvalueofperformance-basedrestrictedstockthatvestedwas$6.7millioninfiscal2010,$5.9millioninfiscal2009and$3.9millioninfiscal2008.TJXalsoawardsdeferredsharestoitsoutsidedirectorsundertheStockIncentivePlan.Theoutsidedirectorsareawardedtwoannualdeferredshareawards,eachrepresentingsharesofTJXcommonstockvaluedat$50,000.Oneawardvestsimmediatelyandispayable,withaccumulateddividends,instockattheearlierofseparationfromserviceasadirectororchangeofcontrol.Thesecondawardvestsbasedonserviceasadirectoruntiltheannualmeetingthatfollowstheawardandispayable,withaccumulateddividends,instockatvestingdate,unlessanirrevocableadvanceelectionismadewherebyitispayableatthesametimeasthefirstaward.Asoftheendoffiscal2010,atotalof174,577deferredshareswereoutstandingundertheplan.I.CapitalStockandEarningsPerShareCapitalStock:InDecember2009,wecompleteda$1billionstockrepurchaseprogramwhichbeganinfiscal2009andinitiatedanothermulti-year$1billionstockrepurchaseprogramapprovedinSeptember2009.Werepurchasedandretired27.0millionsharesofourcommonstockatacostof$949.9millionduringfiscal2010.TJXreflectsstockrepurchasesinitsfinancialstatementsona“settlement”basis.Wehadcashexpendituresunderourrepurchaseprogramsof$944.8millioninfiscal2010,$751.1millioninfiscal2009and$940.2millioninfiscal2008,fundedprimarilybycashgeneratedfromoperations.Werepurchased26.9millionsharesinfiscal2010,24.3millionsharesinfiscal2009and33.0millionsharesinfiscal2008.AsofJanuary30,2010,ona“tradedate”basis,wehadrepurchased5.5millionsharesofourcommonstockatacostof$205.0millionunderthe$1billionstockrepurchaseprogramauthorizedinSeptember2009.Allsharesrepurchasedunderourstockrepurchaseprogramshavebeenretired.InFebruary2010,TJX’sBoardofDirectorsapprovedanewstockrepurchaseprogramthatauthorizestherepurchaseofuptoanadditional$1billionofTJXcommonstockfromtimetotime.TJXhasfivemillionsharesofauthorizedbutunissuedpreferredstock,$1parvalue.F-20 EarningsPerShare:Thefollowingschedulepresentsthecalculationofbasicanddilutedearningspershareforincomefromcontinuingoperations:AmountsinthousandsexceptpershareamountsJanuary30,2010January31,2009January26,2008(53weeks)Basicearningspershare:Incomefromcontinuingoperations$1,213,572$914,886$782,432Weightedaveragecommonstockoutstandingforbasicearningspersharecalculation417,796419,076443,050Basicearningspershare$2.90$2.18$1.77Dilutedearningspershare:Incomefromcontinuingoperations$1,213,572$914,886$782,432Addback:Interestexpenseonzerocouponconvertiblesubordinatednotes,netofincometaxes1,0734,6534,716Incomefromcontinuingoperationsusedfordilutedearningspersharecalculation$1,214,645$919,539$787,148Weightedaveragecommonstockoutstandingforbasicearningspersharecalculation417,796419,076443,050Assumedconversion/exerciseof:Convertiblesubordinatednotes3,90116,43416,905Stockoptionsandawards5,9226,7458,091Weightedaveragecommonstockoutstandingfordilutedearningspersharecalculation427,619442,255468,046Dilutedearningspershare$2.84$2.08$1.68InApril2009,TJXcalledfortheredemptionofitszerocouponconvertiblesubordinatednotes.Therewere462,057ofsuchnoteswithacarryingvalueof$365.1millionthatwereconvertedinto15.1millionsharesofTJXcommonstockataconversionrateof32.667sharespernote.TJXpaid$2.3milliontoredeemtheremaining2,886notesoutstandingthatwerenotconverted.Theweightedaveragecommonsharesforthedilutedearningspersharecalculationexcludetheimpactofoutstandingstockoptionsiftheassumedproceedspershareoftheoptionisinexcessoftherelatedfiscalyear’saveragepriceofTJX’scommonstock.Suchoptionsareexcludedbecausetheywouldhaveanantidilutiveeffect.Excludedwere9.5millionoptionsatJanuary30,2010,5.2millionatJanuary31,2009and5.7millionatJanuary26,2008.J.AccumulatedOtherComprehensiveIncomeCumulativeforeigncurrencytranslationadjustmentsincludedinshareholders’equityamountedtoalossof$76.3million,netofrelatedtaxeffectof$21.6million,asofJanuary30,2010;alossof$152.9million,netofrelatedtaxeffectof$2.6million,asofJanuary31,2009;andagainof$17.8million,netofrelatedtaxeffectof$23.7million,asofJanuary26,2008.Cumulativegainsandlossesonderivativesthathedgedournetinvestmentinforeignoperationsanddeferredgainsandlossesoncashflowhedgesthathavebeenrecordedinaccumulatedothercomprehensiveincomeamountedtoagainof$27.3million,netofrelatedtaxeffectsof$18.2millionatbothJanuary30,2010andJanuary31,2009,andalossof$42.1million,netofrelatedtaxeffectsof$28.1millionatJanuary26,2008.InaccordancewithU.S.GAAP,TJXisrequiredtorecognizethefundedstatusofitspostretirementbenefitplanswhicharediscussedinNoteL.Cumulativelossadjustmentsincludedinaccumulatedothercomprehensiveincomewas$85.2million,netofrelatedtaxeffectsof$56.8millionatJanuary30,2010,$92.2million,netofrelatedtaxeffectsof$61.5millionatJanuary31,2009,and$4.4million,netofrelatedtaxeffectsof$3.7millionatJanuary26,2008.F-21 K.IncomeTaxesTheprovisionforincometaxesincludesthefollowing:InthousandsJanuary30,2010January31,2009January26,2008FiscalYearEnded(53weeks)Current:Federal$465,799$259,857$375,799State104,62127,37694,727Foreign114,19597,97687,260Deferred:Federal54,544126,816(64,363)State1,77323,955(15,698)Foreign(2,942)74(70)Provisionforincometaxes$737,990$536,054$477,655Incomefromcontinuingoperationsbeforeincometaxesincludesforeignpre-taxincomeof$342.3millioninfiscal2010,$292.6millioninfiscal2009and$260.8millioninfiscal2008.TJXhadnetdeferredtax(liabilities)assetsasfollows:InthousandsJanuary30,2010January31,2009FiscalYearEndedDeferredtaxassets:Foreigntaxcreditcarryforward$89,796$37,611Reservefordiscontinuedoperations11,81314,859Pension,stockcompensation,postretirementandemployeebenefits253,926238,557Leases39,63538,889Foreigncurrencyandhedging3,7434,571ComputerIntrusionreserve8,72216,749Other88,44783,483Totaldeferredtaxassets$496,082$434,719Deferredtaxliabilities:Property,plantandequipment$274,937$215,462Capitalizedinventory44,07944,102Tradename42,87342,873Undistributedforeignearnings193,252111,506Other10,92612,109Totaldeferredtaxliabilities566,067426,052Netdeferredtax(liability)asset$(69,985)$8,667Thefiscal2010netdeferredtaxliabilityispresentedonthebalancesheetasacurrentassetof$122.5millionandanon-currentliabilityof$192.4million.Forfiscal2009,thenetdeferredtaxassetispresentedonthebalancesheetasacurrentassetof$135.7millionandanon-currentliabilityof$127.0million.TJXhasprovidedfordeferredU.S.taxesonallundistributedearningsfromitsWinnersCanadiansubsidiary,itsMarshallsPuertoRicosubsidiaryanditsItaliansubsidiarythroughJanuary30,2010.AllearningsofTJX’sotherforeignsubsidiariesareconsideredindefinitelyreinvestedandnoU.S.deferredtaxeshavebeenprovidedonthoseearnings.Thenetdeferredtax(liability)assetsummarizedaboveincludesdeferredtaxesrelatingtotemporarydifferencesatourforeignoperationsandamountedtoan$18.9millionnetliabilityasofJanuary30,2010anda$19.9millionnetliabilityasofJanuary31,2009.Infiscal2009,TJX’sHomeGoodssubsidiaryutilizedaPuertoRiconetoperatinglosscarryforwardofapproximately$1.1millionwhichhadnotbeenpreviouslyrecognized.TherewerenofurtherPuertoRiconetoperatinglossesasoftheF-22 fiscalyearendedJanuary31,2009.TJX’sGermansubsidiary,whichistreatedasabranchforU.S.taxpurposes,incurrednetoperatinglossesof$11.4millioninfiscal2010,$15.0millioninfiscal2009and$14.4millioninfiscal2008fortaxandfinancialreportingpurposes.ThelosseswerefullyutilizedineachyeartoreduceTJX’scurrentU.S.taxableincome.AnyfutureutilizationofthelossesinGermanywillresultinacorrespondingamountoftaxableincomeforU.S.taxpurposes.TJXestablishedvaluationallowancesagainstcertaindeferredtaxassetswhichmaynotberealizedinfutureyears.Theamountofthevaluationallowanceswas$3.9millionasofJanuary30,2010and$6.2millionasofJanuary31,2009.TJX’sworldwideeffectiveincometaxratewas37.8%forfiscal2010,36.9%forfiscal2009,and37.9%forfiscal2008.ThedifferencebetweentheU.S.federalstatutoryincometaxrateandTJX’sworldwideeffectiveincometaxrateisreconciledbelow:January30,2010January31,2009January26,2008FiscalYearEnded(53weeks)U.S.federalstatutoryincometaxrate35.0%35.0%35.0%Effectivestateincometaxrate4.32.84.1Impactofforeignoperations(0.6)(0.1)(0.6)Impactofrepatriationofforeignearnings——(0.4)Allother(0.9)(0.8)(0.2)Worldwideeffectiveincometaxrate37.8%36.9%37.9%TheincreaseinTJX’seffectivestateincometaxrateforfiscal2010ascomparedtofiscal2009isprimarilyattributedtothesettlement,infiscal2009,ofseveralstatetaxauditsandtheresultingreductiontoourreservesforuncertaintaxpositions.Inthefirstquarteroffiscal2008,TJXadoptedtheprovisionsforrecognizingandmeasuringtaxpositionstakenorexpectedtobetakeninataxreturnthataffectamountsreportedinthefinancialstatements.Asaresultoftheimplementation,TJXrecognizedachargeofapproximately$27.2milliontoitsretainedearningsbalanceatthebeginningoffiscal2008.TJXhadnetunrecognizedtaxbenefitsof$121.0millionasofJanuary30,2010,$129.9millionasofJanuary31,2009and$140.7millionasofJanuary26,2008.Areconciliationofthebeginningandendinggrossamountofunrecognizedtaxbenefitsisasfollows:InthousandsJanuary30,2010January31,2009January26,2008Balanceatbeginningofyearordateofimplementation$202,543$232,859$188,671Additionsforuncertaintaxpositionstakenincurrentyear59,30159,80730,811Additionsforuncertaintaxpositionstakeninprioryears1,4441,84852,328Reductionsforuncertaintaxpositionstakeninprioryears(53,612)(80,959)(36,474)Reductionsresultingfromlapseofstatuteoflimitations(3,267)(2,002)(307)Settlementswithtaxauthorities(14,668)(9,010)(2,170)Balanceatendofyear$191,741$202,543$232,859Includedinthegrossamountofunrecognizedtaxbenefitsareitemsthatwillnotimpactfutureeffectivetaxratesuponrecognition.Theseitemsamountto$57.6millionasofJanuary30,2010,$49.3millionasofJanuary31,2009and$67.8millionasofJanuary26,2008.TJXissubjecttoU.S.federalincometaxaswellasincometaxinmultiplestate,localandforeignjurisdictions.Innearlyalljurisdictions,thetaxyearsthroughfiscal2001arenolongersubjecttoexamination.TJX’saccountingpolicyistoclassifyinterestandpenaltiesrelatedtoincometaxmattersaspartofincometaxexpense.Theamountofinterestandpenaltiesexpensedwas$7.6millionfortheyearendedJanuary30,2010,$15.3millionfortheyearendedJanuary31,2009and$16.2millionfortheyearendedJanuary26,2008.TheaccruedF-23 amountsforinterestandpenaltiesare$50.6millionasofJanuary30,2010,$51.1millionasofJanuary31,2009and$52.5millionasofJanuary26,2008.Basedonthefinalresolutionoftaxexaminations,judicialoradministrativeproceedings,changesinfactsorlaw,expirationsofstatuteoflimitationsinspecificjurisdictionsorotherresolutionsof,orchangesin,taxpositions;itisreasonablypossiblethatunrecognizedtaxbenefitsforcertaintaxpositionstakenonpreviouslyfiledtaxreturnsmaychangemateriallyfromthoserepresentedonthefinancialstatementsasofJanuary30,2010.Duringthenexttwelvemonths,itisreasonablypossiblethatsuchcircumstancesmayoccurthatwouldhaveamaterialeffectonpreviouslyunrecognizedtaxbenefits.Asaresult,thetotalnetamountofunrecognizedtaxbenefitsmaydecrease,whichwouldreducetheprovisionfortaxesonearningsbyarangeestimatedat$1.0millionto$49.0million.L.PensionPlansandOtherRetirementBenefitsPension:TJXhasafundeddefinedbenefitretirementplancoveringthemajorityofitsfull-timeU.S.employees.Asaresultofanamendmenttotheplan,employeeshiredafterFebruary1,2006donotparticipateinthisplanbutareeligibletoreceiveenhancedemployercontributionstotheir401(k)plans.Thisplanamendmenthasnothadamaterialimpactonpensionexpenseintheperiodspresented,butisexpectedtoreducenetperiodicpensioncostsgraduallyinsubsequentyearsduetoareductioninthenumberofparticipants.Employeeswhohadattainedtwenty-oneyearsofageandcompletedoneyearofservicepriortoamendmentwere,andremain,coveredundertheplan.Noemployeecontributionsarerequired,andbenefitsarebasedoncompensationearnedineachyearofservice.Ourfundeddefinedbenefitretirementplanassetsareinvestedindomesticandinternationalequityandfixedincomesecurities,bothdirectlyandthroughinvestmentfunds.TheplandoesnotinvestinthesecuritiesofTJX.TJXalsohasanunfundedsupplementalretirementplanwhichcoverscertainkeyemployeesandprovidesadditionalretirementbenefitsbasedonaveragecompensationforcertainofthoseemployees.PresentedbelowisfinancialinformationrelatingtoTJX’sfundeddefinedbenefitretirementplan(fundedplan)anditsunfundedsupplementalpensionplan(unfundedplan)forthefiscalyearsindicated:InthousandsJanuary30,2010January31,2009January30,2010January31,2009(53weeks)(53weeks)FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEndedChangeinprojectedbenefitobligation:Projectedbenefitobligationatbeginningofyear$492,413$447,684$55,463$51,588Servicecost30,04930,4068761,069Interestcost31,32028,7112,9233,366Actuariallosses(gains)39,931(1,411)7,6862,252Settlements——(12,156)—Benefitspaid(11,403)(10,713)(3,065)(2,812)Expensespaid(2,107)(2,264)——Projectedbenefitobligationatendofyear$580,203$492,413$51,727$55,463Accumulatedbenefitobligationatendofyear$532,276$451,260$41,855$42,560F-24 InthousandsJanuary30,2010January31,2009January30,2010January31,2009(53weeks)(53weeks)FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEndedChangeinplanassets:Fairvalueofplanassetsatbeginningofyear$314,212$436,416$—$—Actualreturnonplanassets75,018(109,227)——Employercontribution132,700—15,2212,812Benefitspaid(11,403)(10,713)(3,065)(2,812)Settlements——(12,156)—Expensespaid(2,107)(2,264)——Fairvalueofplanassetsatendofyear$508,420$314,212$—$—Reconciliationoffundedstatus:Projectedbenefitobligationatendofyear$580,203$492,413$51,727$55,463Fairvalueofplanassetsatendofyear508,420314,212——Fundedstatus—excessobligation$71,783$178,201$51,727$55,463Netliabilityrecognizedonconsolidatedbalancesheets$71,783$178,201$51,727$55,463Amountsnotyetreflectedinnetperiodicbenefitcostandincludedinaccumulatedothercomprehensiveincome(loss):Priorservicecost$—$15$93$218Accumulatedactuariallosses155,752176,27413,1528,958Amountsincludedinaccumulatedothercomprehensiveincome(loss)$155,752$176,289$13,245$9,176Theconsolidatedbalancesheetsreflectthefundedstatusoftheplanswithanyunrecognizedpriorservicecostandactuarialgainsandlossesrecordedinaccumulatedothercomprehensiveincome(loss).Thecombinednetaccruedliabilityof$123.5millionatJanuary30,2010isreflectedonthebalancesheetasofthatdateasacurrentliabilityof$3.8millionandalong-termliabilityof$119.7million.Thecombinednetaccruedliabilityof$233.7millionatJanuary31,2009isreflectedonthebalancesheetasofthatdateasacurrentliabilityof$13.1millionandalong-termliabilityof$220.6million.Theestimatedpriorservicecostthatwillbeamortizedfromaccumulatedothercomprehensiveincome(loss)intonetperiodicbenefitcostinfiscal2011fortheunfundedplanis$81,000.Thereisnoestimatedamortizationforthefundedplan.Theestimatednetactuariallossthatwillbeamortizedfromaccumulatedothercomprehensiveincome(loss)intonetperiodicbenefitcostinfiscal2011is$10.8millionforthefundedplanand$2.3millionfortheunfundedplan.Weightedaverageassumptionsformeasurementpurposesfordeterminingtheobligationattheyearendmeasurementdate:January30,2010January31,2009January30,2010January31,2009FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEndedDiscountrate6.00%6.50%5.75%6.50%Expectedreturnonplanassets8.00%8.00%N/AN/ARateofcompensationincrease4.00%4.00%6.00%6.00%TJXselectstheassumeddiscountrateusingtheCitigroupPensionLiabilityIndex.TJXdevelopsitslong-termrateofreturnassumptionbyevaluatinginputfromprofessionaladvisorstakingintoaccounttheassetallocationoftheportfolioandlong-termassetclassreturnexpectations,aswellaslong-terminflationassumptions.F-25 TJXmadeaggregatecashcontributionsof$147.9millioninfiscal2010,$2.8millioninfiscal2009and$27.5millioninfiscal2008tothedefinedbenefitretirementplanandtofundcurrentbenefitandexpensepaymentsundertheunfundedsupplementalretirementplan.Thecashcontributionsmadeinfiscal2009weresolelytofundcurrentbenefitandexpensepaymentsundertheunfundedsupplementalretirementplan.Throughfiscal2008,ourfundingpolicyforthefundedplanwastofundanyrequiredcontributiontotheplanatthefullfundinglimitationandgenerallytofundcontributionsinexcessofanyrequiredcontributionsoastofullyfundtheaccumulatedbenefitobligationtotheextentsuchcontributionisallowedfortaxpurposes.Asaresultofvoluntaryfundingcontributionsmadeinprioryears,therewasnorequiredfundingduringfiscal2009.Infiscal2009,thePensionProtectionAct(PPA)becameeffectiveandTJX’spolicybecametofund,ataminimum,theamountrequiredtomaintainafundedstatusof75%to80%ofthepensionliabilityasdefinedbythePPA.Asaresultoffundinginfiscal2010,wedonotanticipateanyrequiredfundinginfiscal2011forthedefinedbenefitretirementplan.Weanticipatemakingcontributionsof$3.8milliontofundcurrentbenefitandexpensepaymentsundertheunfundedsupplementalretirementplaninfiscal2011.Followingarethecomponentsofnetperiodicbenefitcostandotheramountsrecognizedinothercomprehensiveincomerelatedtoourpensionplans:DollarsinthousandsJanuary30,2010January31,2009January26,2008January30,2010January31,2009January26,2008FundedPlanFiscalYearEndedUnfundedPlanFiscalYearEnded(53weeks)(53weeks)Netperiodicpensioncost:Servicecost$30,049$30,406$34,704$876$1,069$992Interestcost31,32028,71124,6322,9233,3662,867Expectedreturnonplanassets(28,222)(34,369)(32,259)———Settlementcosts———2,447—168Amortizationofpriorservicecosts154357125124125Amortizationofnetactuariallosses13,656——1,0451,270789Netperiodicpensioncost$46,818$24,791$27,134$7,416$5,829$4,941OtherChangesinPlanAssetsandBenefitObligationsRecognizedinOtherComprehensiveIncomeNet(gain)loss$(6,866)$142,186$(482)$7,686$2,252$(3,420)Settlementcosts———(2,447)——Amortizationofnet(loss)gain(13,656)——(1,045)(1,270)(893)Amortizationofpriorservicecost(15)(44)(62)(125)(125)(135)Totalrecognizedinothercomprehensiveincome$(20,537)$142,142$(544)$4,069$857$(4,448)Totalrecognizedinnetperiodicbenefitcostandothercomprehensiveincome$26,281$166,933$26,590$11,485$6,686$493Weightedaverageassumptionsforexpensepurposes:Discountrate6.50%6.50%6.00%6.50%6.25%5.75%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.F-26 Followingisascheduleofthebenefitsexpectedtobepaidineachofthenextfivefiscalyearsandintheaggregateforthefivefiscalyearsthereafter:InthousandsFundedPlanExpectedBenefitPaymentsUnfundedPlanExpectedBenefitPaymentsFiscalYear2011$15,662$3,753201217,4933,682201319,9173,204201422,5273,367201525,3303,2592016through2020176,43321,605Thefollowingtablepresentsthefairvaluehierarchy(SeeNoteF)forpensionandpostretirementassetsmeasuredatfairvalueonarecurringbasisasofJanuary30,2010:DollarsinthousandsLevel1Level2Level3TotalFundedPlanAssetcategoryShort-terminvestments$85,511$—$—$85,511EquitySecurities:Domesticequity43,950——43,950Internationalequity33,784——33,784Emergingmarkets————FixedIncomeSecurities:Corporateandgovernmentbondfunds—21,787—21,787Common/CollectiveTrusts—295,79219,817315,609LimitedPartnerships——7,7797,779Fairvalueofplanassets$163,245$317,579$27,596$508,420Thefollowingtablepresentsareconciliationoflevel3planassetsmeasuredatfairvaluefortheyearendedJanuary30,2010:DollarsinthousandsCommon/CollectiveTrustsLimitedPartnershipsBeginningbalanceasofFebruary1,2009$35,200$14,264Earnedincome,netofmanagementexpenses(261)(570)Unrealizedgain(loss)oninvestment(294)(6,615)Purchases,sales,issuancesandsettlements,net(14,828)700EndingbalanceasofJanuary30,2010$19,817$7,779Pensionplanassetsarereportedatfairvalue.Investmentsinequitysecuritiestradedonanationalsecuritiesexchangearevaluedatthecompositecloseprice,asreportedintheWallStreetJournal,asofthefinancialstatementdate.ThisinformationisprovidedbytheindependentpricingservicesIDCandMerrillLynch.Certaincorporateandgovernmentbondsarevaluedattheclosingpricereportedintheactivemarketinwhichthebondistraded.Otherbondsarevaluedbasedonyieldscurrentlyavailableoncomparablesecuritiesofissuerswithsimilarcreditratings.Whenquotedpricesarenotavailableforidenticalorsimilarbonds,thebondisvaluedunderadiscountedcashflowsapproachthatmaximizesobservableinputs,suchascurrentyieldsofsimilarinstruments,butincludesadjustmentsforcertainrisksthatmaynotbeobservable,suchascreditandliquidityrisks.AllbondsarepricedbyIDCexceptformortgage-backedpoolswhicharepricedbyMerrillLynchPricingService.TheinvestmentsinthelimitedpartnershipsarestatedatthefairvalueofthePlan’spartnershipinterestbasedoninformationsuppliedbythepartnershipsascomparedtofinancialstatementsofthelimitedpartnershiporotherfairvalueinformationasdeterminedbymanagement.Cashequivalentsarestatedatcostwhichapproximatesfairvalue.TheF-27 marketvalueoftheinvestmentsinthecommon/collectivetrustsaredeterminedbasedonnetassetvalueasreportedbytheirfundmanagers.Thefollowingisasummaryofourtargetallocationforplanassetsalongwiththeactualallocationofplanassetsasofthevaluationdateforthefiscalyearspresented:TargetAllocationJanuary30,2010January31,2009ActualAllocationforFiscalYearEndedEquitysecurities50%47%48%Fixedincome50%37%50%Allother—primarilycash—16%2%Weemployatotalreturninvestmentapproachwherebyamixofequitiesandfixedincomeinvestmentsisusedtoseektomaximizethelong-termreturnonplanassetswithaprudentlevelofrisk.Risksaresoughttobemitigatedthroughassetdiversificationandtheuseofmultipleinvestmentmanagers.Investmentriskismeasuredandmonitoredonanongoingbasisthroughquarterlyinvestmentportfolioreviews,annualliabilitymeasurementsandperiodicasset/liabilitystudies.TJXalsosponsorsanemployeesavingsplanunderSection401(k)oftheInternalRevenueCodeforalleligibleU.S.employees.Assetsundertheplantotaled$676.4millionasofDecember31,2009and$529.5millionasofDecember31,2008andareinvestedinavarietyoffunds.Employeesmaycontributeupto50%ofeligiblepay,subjecttolimitation.TJXmatchesemployeecontributions,upto5%ofeligiblepay,atratesrangingfrom25%to50%,baseduponTJX’sperformance.EmployeeshiredafterFebruary1,2006areeligibleforparticipationinthe401(k)planwithanenhancedmatchingformulabeginningfiveyearsafterhiredate.TJXcontributed$13.3millioninfiscal2010,$8.6millioninfiscal2009and$10.2millioninfiscal2008tothe401(k)plan.EmployeescannotinvesttheircontributionsintheTJXstockfundoptioninthe401(k)plan,andmayelecttoinvestuptoonly50%ofTJX’scontributionintheTJXstockfund.TheTJXstockfundhasnoothertradingrestrictions.TheTJXstockfundrepresents4.5%ofplaninvestmentsatDecember31,2009,3.3%atDecember31,2008and3.5%atDecember31,2007.TJXalsohasanonqualifiedsavingsplanforcertainU.S.employees.TJXmatchesemployeecontributionsatvariousrateswhichamountedto$1.9millioninfiscal2010,$425,432infiscal2009and$1.2millioninfiscal2008.TJXtransfersemployeewithholdingsandtherelatedcompanymatchtoaseparatetrustdesignatedtofundthefutureobligations.Thetrustassets,whichareinvestedinavarietyofmutualfunds,areincludedinotherassetsonthebalancesheets.Inadditiontotheplansdescribedabove,wealsomaintainretirement/deferredsavingsplansforalleligibleassociatesatourforeignsubsidiaries.Wecontributed$4.6millionfortheseplansinfiscal2010,$4.2millioninfiscal2009and$4.1millioninfiscal2008.PostretirementMedical:TJXhasanunfundedpostretirementmedicalplanthatprovideslimitedpostretirementmedicalandlifeinsurancebenefitstoretireeswhoparticipateinitsretirementplanandwhoretiredatage55orolderwithtenormoreyearsofservice.Duringthefourthquarteroffiscal2006,TJXeliminatedthisbenefitforallactiveassociatesandmodifiedthebenefittocoveronlyretireesenrolledintheplanatthattime.Theplanamendmentreplacesthepreviousmedicalbenefitswithadefinedamount(upto$35.00permonth)thatapproximatesthecostofenrollmentintheMedicarePlanforretireesenrolledintheplanatthetimeofmodification.TJXpaid$253,000ofbenefitsinfiscal2010andwillpaysimilaramountsoverthenextseveralyears.ThepostretirementmedicalliabilityasofJanuary30,2010isestimatedat$1.6million,ofwhich$1.4millionisincludedinnon-currentliabilitiesonthebalancesheet.Theamendmenttoplanbenefitsinfiscal2006resultedinanegativeplanamendmentof$46.8millionwhichisbeingamortizedintoincomeovertheaverageremaininglifeoftheactiveplanparticipants.Theunamortizedbalanceof$26.8millionasofJanuary30,2010isincludedinaccumulatedothercomprehensiveincome(loss)ofwhichF-28 $3.8millionwillbeamortizedintoincomeinfiscal2011.Duringfiscal2010,therewasapre-taxnetbenefitof$3.4millionreflectedintheincomestatementasitrelatestothispostretirementmedicalplan.M.AccruedExpensesandOtherLiabilities,CurrentandLong-TermThemajorcomponentsofaccruedexpensesandothercurrentliabilitiesareasfollows:InthousandsJanuary30,2010January31,2009FiscalYearEndedEmployeecompensationandbenefits,current$394,070$300,366ComputerIntrusion23,48142,211Rent,utilitiesandoccupancy,includingrealestatetaxes152,997151,273Merchandisecreditsandgiftcertificates146,464133,104Insurance39,30240,428SalestaxcollectionsandV.A.T.taxes97,16788,528Allothercurrentliabilities394,521340,856Accruedexpensesandothercurrentliabilities$1,248,002$1,096,766Allothercurrentliabilitiesincludeaccrualsforoutstandingchecks,advertising,propertyadditions,dividends,freight,interest,reserveforsalesreturns,purchasedservices,andotheritems,eachofwhichareindividuallylessthan5%ofcurrentliabilities.Themajorcomponentsofotherlong-termliabilitiesareasfollows:InthousandsJanuary30,2010January31,2009FiscalYearEndedEmployeecompensationandbenefits,long-term$254,503$272,881Reserverelatedtodiscontinuedoperations35,89740,564Accruedrent151,006137,876Landlordallowances57,69353,761Taxreserve,long-term181,740240,582Long-termliabilities—other16,26019,340Otherlong-termliabilities$697,099$765,004N.DiscontinuedOperationsReserveandRelatedContingentLiabilitiesTJXhasareserveforfutureobligationsofdiscontinuedoperationsthatrelatesprimarilytorealestateleasesassociatedwith34discontinuedA.J.WrightstoresaswellasleasesofformerTJXbusinesses.Thebalanceinthereserveandtheactivityforthelastthreefiscalyearsispresentedbelow:InthousandsJanuary30,2010January31,2009January26,2008FiscalYearEndedBalanceatbeginningofyear$40,564$46,076$57,677Additions(reductions)tothereservechargedtonetincome:A.J.Wrightstoreclosings8(2,908)—Otherleaserelatedobligations(8)2,908—Interestaccretion1,7611,8201,820Chargesagainstthereserve:Leaserelatedobligations(5,891)(7,323)(11,214)Terminationbenefitsandallother(537)(9)(2,207)Balanceatendofyear$35,897$40,564$46,076Thechargesagainstthereserveinfiscal2010,fiscal2009andfiscal2008relatedprimarilytotheclosedA.J.Wrightstores.Infiscal2009,wereservedanadditional$2.9millionforexposuretocertainpropertiesrelatedtothesaleofBob’sF-29 Stores,whichwasoffsetbyacomparableamountduetofavorablesettlementsonseveralA.J.Wrightlocations.ThemajorityofthereserverelatestoleaseobligationswithrespecttotheclosureoftheA.J.WrightstoresandthesaleofBob’sStores.Theremainderofthereservereflectsourestimationofthecostofclaims,updatedquarterly,thathavebeen,orwebelievearelikelytobe,madeagainstusforliabilityasanoriginallesseeorguarantoroftheleasesofformerbusinesses,aftermitigationofthenumberandcostoftheseleaseobligations.Theactualnetcostofthevariousleaseobligationsincludedinthereservemaydifferfromourinitialestimate.Althoughouractualcostswithrespecttotheleaseobligationsmayexceedamountsestimatedinourreserve,andwemayincurcostsforotherleasesfromformerdiscontinuedoperations,wedonotexpecttoincuranymaterialcostsrelatedtothesediscontinuedoperationsinexcessoftheamountsestimated.Weestimatethatthemajorityofthediscontinuedoperationsreservewillbepaidinthenextthreetofiveyears.Theactualtimingofcashoutflowswillvarydependingonhowtheremainingleaseobligationsareactuallysettled.TJXmayalsobecontingentlyliableonupto15leasesofBJ’sWholesaleClub,andon7additionalBob’sStoresleasesbothformerTJXbusinesses.Ourreservefordiscontinuedoperationsdoesnotreflecttheseleases,becausewecurrentlybelievethatthelikelihoodofanyfutureliabilitytoTJXisnotprobable.O.GuaranteesandContingentObligationsTJXhascontingentobligationsonleases,forwhichitwasalesseeorguarantor,whichwereassignedtothirdpartieswithoutTJXbeingreleasedbythelandlords.Overmanyyears,wehaveassignednumerousleasesthatweoriginallyleasedorguaranteedtoasignificantnumberofthirdparties.Withtheexceptionofleasesofformerbusinessesforwhichwehavereserved,wehaverarelyhadaclaimwithrespecttoassignedleases,andaccordingly,wedonotexpectthatsuchleaseswillhaveamaterialadverseimpactonourfinancialcondition,resultsofoperationsorcashflows.Wedonotgenerallyhavesufficientinformationabouttheseleasestoestimateourpotentialcontingentobligationsunderthem,whichcouldbetriggeredintheeventthatoneormoreofthecurrenttenantsdoesnotfulfilltheirobligationsrelatedtooneormoreoftheseleases.TJXalsohascontingentobligationsinconnectionwithsomeassignedorsubletpropertiesthatTJXisabletoestimate.Weestimatetheundiscountedobligations(notreflectedinourreserves)ofleasesofclosedstoresofcontinuingoperations,BJ’sWholesaleClubandBob’sStoresleases(discussedinNoteN)andpropertiesofourdiscontinuedoperationsthatwehavesublet,ifthesubtenantsdidnotfulfilltheirobligations,isapproximately$94millionasofJanuary30,2010.WebelievethatmostorallofthesecontingentobligationswillnotreverttoTJXand,totheextenttheydo,willberesolvedforsubstantiallylessduetomitigatingfactors.TJXisapartytovariousagreementsunderwhichwemaybeobligatedtoindemnifytheotherpartywithrespecttobreachofwarrantyorlossesrelatedtosuchmattersastitletoassetssold,specifiedenvironmentalmattersorcertainincometaxes.Theseobligationsaretypicallylimitedintimeandamount.Therearenoamountsreflectedinourbalancesheetswithrespecttothesecontingentobligations.P.SupplementalCashFlowsInformationThecashflowsrequiredtosatisfycontingentobligationsofthediscontinuedoperationsasdiscussedinNoteN,areclassifiedasareductionincashprovidedbycontinuingoperations.Therearenoremainingoperatingactivitiesrelatingtotheseoperations.F-30 TJX’scashpaymentsforinterestandincometaxesandnon-cashinvestingandfinancingactivitiesareasfollows:InthousandsJanuary30,2010January31,2009January26,2008FiscalYearEnded(53weeks)Cashpaidfor:Interestondebt$30,638$28,269$31,190Incometaxes494,169449,916463,835Changesinaccruedexpensesdueto:Dividendspayable$3,829$6,945$6,710Propertyadditions37,060(19,829)23,557Non-cashinvestingandfinancingactivity:Conversionofzerocouponconvertiblenotes$365,088$—$—Therewerenonon-cashfinancingorinvestingactivitiesduringfiscal2009or2008.Q.SegmentInformationTJXoperatesfivebusinesssegments,threeintheUnitedStatesandoneeachinCanadaandEurope.Eachofoursegmentshasitsownadministrative,buyingandmerchandisingorganizationanddistributionnetwork.OfourU.S.basedstorechains,T.J.MaxxandMarshalls,referredtoasMarmaxx,aremanagedtogetherandreportedasasinglesegmentandA.J.WrightandHomeGoodseachisreportedasaseparatesegment.OutsidetheU.S.,ourstorechainsinCanada(WinnersandHomeSense)areundercommonmanagementandreportedastheTJXCanadasegment,andourstorechainsinEurope(T.K.MaxxandHomeSense)arealsoundercommonmanagementandreportedastheTJXEuropesegment.Forfiscal2010,TJXCanadaandTJXEuropeaccountedfor22%ofTJX’snetsales,19%ofsegmentprofitand22%ofconsolidatedassets.Allofourstores,withtheexceptionofHomeGoodsandHomeSense,sellfamilyapparelandhomefashions.TheHomeGoodsandHomeSensestoresofferexclusivelyhomefashions.Bymerchandisecategory,wederivedapproximately61%ofoursalesfromclothing(includingfootwear),26%fromhomefashionsand13%fromjewelryandaccessoriesinfiscal2010.TJXevaluatestheperformanceofitssegmentsbasedon“segmentprofitorloss,”whichitdefinesaspre-taxincomebeforegeneralcorporateexpense,ProvisionforComputerIntrusionrelatedcostsandinterest.“Segmentprofitorloss,”asdefinedbyTJX,maynotbecomparabletosimilarlytitledmeasuresusedbyotherentities.Inaddition,thismeasureofperformanceshouldnotbeconsideredanalternativetonetincomeorcashflowsfromoperatingactivitiesasanindicatorofourperformanceorasameasureofliquidity.F-31 Presentedbelowisselectedfinancialinformationrelatedtoourbusinesssegments:InthousandsJanuary30,2010January31,2009January26,2008FiscalYearEnded(53weeks)Netsales:(1)IntheUnitedStatesMarmaxx$13,270,863$12,362,122$11,966,651HomeGoods1,794,4091,578,2861,480,382A.J.Wright779,811677,597632,661TJXCanada2,167,9122,139,4432,040,814TJXEurope2,275,4492,242,0572,216,218$20,288,444$18,999,505$18,336,726Segmentprofit(loss):(1)IntheUnitedStatesMarmaxx$1,588,452$1,155,838$1,158,179HomeGoods137,52542,37076,224A.J.Wright12,5652,862(1,801)TJXCanada254,974236,086235,128TJXEurope163,969137,612127,2182,157,4851,574,7681,594,948Generalcorporateexpense166,414140,037139,437ProvisionforComputerIntrusionrelatedcosts(2)—(30,500)197,022Interestexpense(income),net39,50914,291(1,598)Incomefromcontinuingoperationsbeforeprovisionforincometaxes$1,951,562$1,450,940$1,260,087Identifiableassets:IntheUnitedStatesMarmaxx$3,340,745$3,538,663$3,407,240HomeGoods415,230455,045435,605A.J.Wright269,190242,657204,808TJXCanada762,338609,363659,004TJXEurope861,122675,283847,107Discontinuedoperations(1)——87,291Corporate(3)1,815,352657,231958,879$7,463,977$6,178,242$6,599,934Capitalexpenditures:IntheUnitedStatesMarmaxx$214,308$328,965$287,558HomeGoods25,76947,51950,062A.J.Wright34,28519,09815,425TJXCanada38,96061,48640,928TJXEurope115,960122,902127,646Discontinuedoperations(1)—2,9625,368$429,282$582,932$526,987Depreciationandamortization:IntheUnitedStatesMarmaxx$262,901$241,940$215,439HomeGoods32,87628,89224,261A.J.Wright19,54216,29815,296TJXCanada49,10543,52742,418TJXEurope67,78359,94956,163Discontinuedoperations(1)—2,6107,361Corporate(4)3,0118,4918,458$435,218$401,707$369,396(1)Fiscal2009and2008adjustedtoreclassifytheresultsofoperationsfromBob’sStoresthroughthedateofsaletodiscontinuedoperations.(2)TJXhasincurredlossesasaresultoftheComputerIntrusion.Inthesecondquarteroffiscal2008,TJXestablishedapre-taxreserveof$178.1milliontoreflectitsestimationofprobablelosses.TJXreducedthereserveby$30.5millioninfiscal2009and$18.9millioninfiscal2008.(3)Corporateidentifiableassetsconsistprimarilyofcash,receivables,prepaidinsurance,anotereceivable,andreflectstheincreaseincashfromfiscal2009tofiscal2010andthedecreaseincashfromfiscal2008tofiscal2009.(4)Includesdebtdiscountanddebtexpenseamortization.F-32 R.SelectedQuarterlyFinancialData(Unaudited)Presentedbelowisselectedquarterlyconsolidatedfinancialdataforfiscal2010and2009whichwaspreparedonthesamebasisastheauditedconsolidatedfinancialstatementsandincludesalladjustmentsnecessarytopresentfairly,inallmaterialrespects,theinformationsetforththereinonaconsistentbasis.InthousandsexceptpershareamountsFirstQuarterSecondQuarterThirdQuarterFourthQuarter(3)FiscalYearEndedJanuary30,2010(52weeks)Netsales$4,354,224$4,747,528$5,244,946$5,941,746Grossearnings(1)1,080,8781,213,2261,442,7671,583,144Netincome209,214261,561347,799394,998Basicearningspershare0.510.620.820.96Dilutedearningspershare0.490.610.810.94FiscalYearEndedJanuary31,2009(53weeks)Netsales$4,303,555$4,554,395$4,761,530$5,380,025Grossearnings(1)(2)1,026,6121,106,9521,224,5401,212,216Incomefromcontinuingoperations198,000212,073254,117250,696Netincome193,849200,223235,849250,696IncomefromcontinuingoperationsBasicearningspershare0.470.500.610.61Dilutedearningspershare0.440.480.580.58NetincomeBasicearningspershare0.460.480.570.61Dilutedearningspershare0.430.450.540.58(1)Grossearningsequalnetsaleslesscostofsales,includingbuyingandoccupancycosts.(2)Certainamountsinthepriorperiodstatementsofincomehavebeenreclassifiedfrom“selling,generalandadministrativeexpenses”to“costofsales,includingbuyingandoccupancycosts”tobeconsistentwiththefiscal2010presentation.Priortothisreclassificationgrossearningsinthefourthquarteroffiscal2009werereportedas$1,219,313.(3)Thefourthquarteroffiscal2009includes14weeks.F-33 BOARD OF DIRECTORSBernard CammarataChairman of the Board,Th e TJX Companies, Inc.José B. AlvarezMember of the Faculty,Harvard Business SchoolAlan M. BennettFormer Interim Chief Executive H&R Block Inc.David A. BrandonChairman, Domino’s Pizza, Inc.Director of Athletics, Th e University of MichiganDavid T. ChingSenior Vice President andChief 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.COMMITTEES OF THE BOARD OF DIRECTORSEXECUTIVE COMMITTEEBernard Cammarata, ChairmanAmy B. LaneJohn F. O’BrienRobert F. ShapiroAUDIT COMMITTEEMichael F. Hines, ChairmanJosé B. AlvarezDavid T. ChingAmy B. LaneRobert F. Shapiro Fletcher H. WileyDavid A. Brandon, ChairmanJosé B. Alvarez John F. O’BrienWillow B. ShireFINANCE COMMITTEEAmy B. Lane, ChairpersonAlan M. BennettDavid A. BrandonMichael F. HinesWillow B. Shire, ChairpersonAlan M. BennettDavid T. ChingRobert F. ShapiroFletcher H. WileyEXECUTIVE COMPENSATION COMMITTEECORPORATE GOVERNANCE COMMITTEECarol MeyrowitzPresident and Chief Executive Offi cer,Th e TJX Companies, Inc.John F. O’BrienLead Director,Th e 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. Wiley Retired Executive Vice President and General Counsel PRWT Services, Inc. Of Counsel, Bingham McCutchen LLPOffi cer, Bernard CammarataChairman of the BoardCarol MeyrowitzPresident and Chief Executive Offi cerSENIOR EXECUTIVE VICE PRESIDENTSErnie HerrmanGroup PresidentJeff rey NaylorChief Financial and Administrative Offi cerJerome R. RossiGroup PresidentPaul SweetenhamGroup PresidentEXECUTIVE VICE PRESIDENTSGregorio R. FloresChief Human Resources Offi cerScott GoldenbergFinanceKathy S. LaneChief Information Offi cerPeter LindenmeyerChief Logistics Offi cerAnn McCauleyGeneral Counsel and SecretarySENIOR VICE PRESIDENTSAlfred AppelCorporate Tax and InsuranceMarc BoeschGlobal ProcurementPaul KangasEnterprise Risk Management and Chief Compliance Offi cerLynn JackGlobal Talent DevelopmentSherry LangGlobal CommunicationsChristina LofgrenReal Estate and Property DevelopmentMary B. ReynoldsTreasurerBarry ZelmanBrand DevelopmentDIVISIONAL LEADERSHIPUNITED STATESTh e Marmaxx Group*Michael MacMillanPresidentHomeGoodsNan StutzPresidentA.J. WrightCelia ClancyPresidentTJX CANADAWinners/HomeSense/STYLESENSERobert CataldoPresidentTJX EUROPET.K. MaxxGino BarreaManaging Director Douglas MizziManaging DirectorHomeSense David AlvesManaging Director * Combination of T.J. Maxx and MarshallsSENIOR CORPORATE OFFICERS TRANSFER AGENT AND REGISTRARCommon StockBNY Mellon Shareowner Services1-866-606-8365 1-800-231-5469 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 Notes4.20% Notes6.95% NotesU.S. Bank National AssociationINDEPENDENT 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 ad-ditional copies may be obtained without charge by access-ing the Company’s website at www.tjx.com or by writing or calling: Th e 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 corporatewebsite at www.tjx.com or to contact:Sherry LangSenior Vice President,Global Communications508-390-2323EXECUTIVE OFFICESFramingham, Massachusetts 01701PUBLIC INFORMATION AND SEC FILINGS:Visit our corporate website: www.tjx.comFOR THE STORE NEAREST YOU, CALL OR VISIT US ONLINE AT:United StatesT.J. Maxx: 1-800-2-TJMAXXwww.tjmaxx.comMarshalls: 1-800-MARSHALLSwww.marshallsonline.comHomeGoods: 1-800-614-HOMEwww.homegoods.comA.J. Wright: 1-888-SHOPAJWwww.aj-wright.comTJX CanadaWinners: 1-800-646-9466www.winners.caHomeSense: 1-800-646-9466www.homesense.caSTYLESENSE: 1-800-646-9466www.stylesense.caTJX EuropeT.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)T.K. Maxx: 071 38 58 457 (Poland)www.tkmaxx.pl (Poland)HomeSense: 0800 328 2601 (U.K.)www.homesense.com (U.K.)SHAREHOLDER INFORMATION(TDD services for the hearing impaired) Our comparable store sales have increased in recessions and recoveries... Customers from a wide range of income brackets find our values compelling… We added >2,000 new vendors in 2009... ...with Sustainable Profitability We ship 30.8 million items to our stores every week… Our store layouts have no walls between departments… We operate successfully in 6 countries... 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 2,700 stores and approximately 154,000 Associates. We see ourselves as a global, off-price, value retailer and our 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. The values we offer appeal to a broad range of customer income demographics, with our core target customer being a middle- to upper-middle-income shopper, who is fashion and value conscious and fits the same pro- file as a department store shopper. A.J. Wright targets a more moderate-income market. T.J. Maxx, Marshalls, A.J. Wright, Winners, and T.K. Maxx offer brand name family apparel, footwear, acces- sories, lingerie, as well as home fashions, and in certain chains, fine jewelry. HomeGoods, HomeSense in Canada, and HomeSense in Europe offer exclusively home fashions, including a broad and ever- fresh array of giftware, home basics, accent furniture, lamps, and accessories for the home. UnITed STATeS TJX CAnAdA 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 890 stores in 48 states at year-end 2009. T.J. Maxx differentiates itself with an expanded assortment of fine jewelry and accessories. T.J. Maxx stores average approximately 30,000 square feet in size. Winners is the leading off-price apparel and home fash- ions retailer in Canada, having been acquired by TJX in 1990. Winners operated 211 stores at 2009’s year-end, which average approximately 29,000 square feet in size. Winners also began testing STYLESENSE, which offers exclusively women’s shoes and accessories, in 2008. Marshalls was acquired by TJX in 1995, and with T.J. Maxx, forms The Marmaxx Group, the largest off-price retailer of apparel and home fashions in the U.S. Marshalls operated 813 stores in 42 states and Puerto Rico at 2009’s year-end. Marshalls differentiates itself with an expanded footwear department and The Cube, an expanded juniors department, and carries a broader selection of men’s apparel. Marshalls also operates the Shoe MegaShop by Marshalls, a standalone store featuring shoes and accesso- ries. Marshalls stores average approximately 32,000 square feet in size. HomeSense introduced the home fashions off-price concept to Canada in 2001. This chain operates in a standalone and superstore format, which pairs HomeSense with Winners. At 2009’s year-end, HomeSense operated 79 stores in Canada, with standalone stores averaging approximately 25,000 square feet in size. TJX eURope HomeGoods, introduced in 1992, is a destination for off- price home fashions. HomeGoods operates in a standalone and superstore format which couples HomeGoods with T.J. Maxx or Marshalls. At 2009’s year-end, HomeGoods operated 323 stores, with standalone stores averaging approximately 27,000 square feet in size. Launched in 1998, A.J. Wright sells off-price family ap- parel, home fashions, and other merchandise, but unlike our other chains, primarily targets the moderate-income cus- tomer. A.J. Wright operated 150 stores at 2009’s year-end, with an average size of approximately 25,000 square feet. Launched in 1994, T.K. Maxx introduced off-price retailing to the U.K. and Ireland, and is Europe’s only major off-price retailer. T.K. Maxx expanded into Germany in 2007 and into Poland in 2009. T.K. Maxx offers top-brand apparel as well as home fashions at great values, and ended 2009 with 263 stores, which average approximately 32,000 square feet in size. HomeSense introduced the off-price home fashions concept to the U.K. in 2008. Patterned after HomeGoods in the U.S. and HomeSense in Canada, this business offers our U.K. customers top-quality home fashions at great values. At 2009’s year-end, HomeSense operated 14 stores, each averaging approxi- mately 20,000 square feet in size. TJX_AR09_04.06.10-cover_ACME.indd 2 4/19/10 7:04 AM The TJX Companies, Inc. An Unconventional Retailer… T h e T J X C o m p a n e s , i I n c . 2 0 0 9 A n n u a l R e p o r t The TJX Companies, Inc. 770 Cochituate Road Framingham, MA 01701 508-390-1000 www.tjx.com 2009 Annual Report TJX_AR09_04.06.10-cover_ACME.indd 1 4/19/10 7:04 AM