THE TJX COMPANIES, INC.
2011 ANNUAL REPORT
35 YEARS of SUCCESSFUL GROWTHand counting… what’s
…
next?
More
U.S./International
Customers
More Powerful
Marketing
More Brands
More Vendors
Faster-Turning
Inventories
Supply Chain
Precision
Exciting Store
Locations
Upgraded Shopping
Experience
Investing for
the Future
To our fellow
shareholders:
The year 2011 marked another
great year for our Company. The
In 2011, net sales reached $23.2
billion, up 6% over the prior year.
Consolidated comparable store
sales grew 4% over last year’s
4% increase. Income from con-
tinuing operations rose to $1.5
billion. Adjusted diluted earnings
per share from continuing oper-
ations were $1.99, up 14%
over the prior year’s significant
double-digit increase.1 The year
power of our extraordinary values on ever-changing
2011 marks the 16th consecutive year of earnings
assortments of current fashions and great brands
per share growth on a continuing operations basis.
continues to resonate with our loyal customers and
attract new ones. In 2011, for the third consecutive
year, we ended the year with significant increases in
customer traffic. Since opening the first two T.J. Maxx
stores 35 years ago, our successful growth through
so many years demonstrates the ability of our flexible
business model to perform in virtually all kinds of retail
and economic environments. In 2011, we ran our
Overall, we netted a total of 46 additional stores to
end the fiscal year with 2,905 stores, and we grew
total square footage by 2%. (Excluding the impact of
A.J. Wright store closings and consolidations, square
footage increased 4% in 2011.)
Raising the Bar to
Continue Momentum
business with even leaner store inventories, which
drove faster inventory turns and strong merchandise
We are convinced we will continue to attract more
U.S. and international customers with our extra-
margins, and we believe we have further opportunities
ordinary values and believe that value will remain a
in this area.
It is a fair question for our investors to ask, “What’s
next?” We are excited to lay out what we believe
the future holds for TJX as we grow toward becoming
a $30 billion, then $40 billion, company and beyond!
We enter a new year with tremendous momentum
for 2012 and the long term. To continue this
momentum, we must raise the
bar in executing our mission
throughout our business, striving
to maximize all of the elements
of our flexible business model
that have made this Company
great. Importantly, we are proud
of our ability to invest for the
long term while simultaneously
driving strong, consistent sales
and earnings growth.
top priority for consumers. While we have substan-
tially added to our customer base and widened our
already broad demographic reach, our data indicates
that in the U.S. alone, our market penetration is
still well below that of most department stores,
which translates into tens of millions of untapped
U.S. consumers. Beyond the U.S., we see vast
opportunities in Europe and Canada. In Europe,
we are the only major off-price
retailer and believe we can trade
in a very wide demographic
range, and in Canada, we have
substantial growth potential
through Marshalls.
We will also raise the bar with
even more powerful market-
ing to gain new customers.
During the 2011 holiday season,
2
we increased our advertising impressions by 30%
to over one billion. Our tri-branding campaign for
T.J. Maxx, Marshalls and HomeGoods worked very
well as did our dual-branding advertisements for
T.J. Maxx and Marshalls. In 2012, we plan to further
increase our advertising penetration, leverage our
global marketing abilities, and aggressively engage
consumers through social media, educating them
about our current fashions and exciting values.
One of our favorite sayings is that our brilliance is
in our brands. We will be working to make our best
brand penetration even better with more brands.
We firmly believe that our frequently changing mix
of great brands at great prices differentiates us from
other retailers. The flexibility of our off-price model
allows us to offer consumers an exciting selection of
apparel and home fashions that is virtually an entire
mall in a single store!
We believe we have some of the best vendor relation-
ships in the retail industry, yet we are constantly
working to make our current relationships even
stronger and to forge new ones. We have been
extremely successful in opening the doors of many
more vendors over the last several years and
believe adding vendors helps us gain even greater
flexibility in sourcing. We have built a flexible, value-
driven, global sourcing machine over the last 35 years.
Our vendor universe now numbers over 15,000 and
our buying organization is over 700 people strong.
A major factor in our confidence in sustaining
our top- and bottom-line growth is our belief that
there is still significant opportunity for operating
with leaner and even faster-turning inventories.
Our distribution network and inventory planning
systems are highly efficient, allowing us to tailor
our merchandise mix for particular regions and
customer preferences. One of our major areas
of investment in 2012, which is discussed
below, will be in supply chain precision. As
effective as our supply chain is, we believe we
3
more
U.S. and
international
customers
more
powerful
marketing
can become even more precise in delivering the right
goods to the right stores at the right time.
Exciting store locations , both within the
U.S. and internationally, have helped widen our
demographic reach and customer appeal. We are
capitalizing on advantageous real estate opportunities
to open stores in very favorable locations and believe
we will continue to do so. In 2011, we were extremely
proud to see our T.J. Maxx banner hanging across the
front of the New York Stock Exchange (see photo on
page 10) in honor of our T.J. Maxx store opening on
Wall Street!
Our store remodeling program and in-store initiatives
have been very successful in offering our customers
an upgraded shopping experience. With our
enhanced amenities, customers have found shopping
in our stores much more enjoyable. In 2012, we plan
to net 150 new stores, growing square footage by
5%, and remodel stores throughout the Company
to continue to make shopping in our stores a truly
great experience.
U.S. and International
Growth Opportunities
Our vision to grow TJX to be a global, $40 billion
value retailer is as clear as it has ever been. Our
Company is comprised of a focused portfolio of
four large divisions, which we believe all have very
appealing short- and long-term economics, and
together represent tremendous growth potential for
TJX in the U.S. and internationally. Our businesses
operate as “one TJX,” sharing best practices,
information, ideas, and talent across divisions. With
over 2,900 stores today, we see the potential to
grow to up to approximately 4,500 stores long term,
representing what we believe to be our potential
with just our current portfolio of businesses in our
current markets alone.
Marmaxx achieved another year of outstanding
performance in 2011 with a comparable store
5
more
vendors
more brands sales increase of 5%, on top of
substantial increases in each
of the two prior years. Segment
profit surpassed $2 billion, up
11% over the prior year and nearly
double what it was three years
ago! With Marmaxx’s continued
outperformance, we are very
confident in our potential to grow
Marmaxx to 2,300–2,400 stores
long term. Marmaxx has significantly widened its
customer demographic reach in the past three
years and has been very successful in moderate-
income markets. Another factor in our confidence is
Marmaxx’s new store performance over the last three
years, which has been extraordinarily strong!
vehicle in that country. Long
term, we see the potential to
grow TJX Canada overall to
approximately 430 stores, with
Marshalls being a 90 –100
store chain.
At TJX Europe, we slowed
growth in 2011 to refocus the
organization on the fundamen-
tals of our value proposition and
we ended the year with a very strong finish. We began
2012 with strong momentum and are confident this
business is back on its solid track. Importantly, our
customer traffic increases in the fourth quarter of
2011 tell us that our combination of great fashions,
brands, quality and price is once again resonating
HomeGoods also delivered excellent performance
with consumers. Our European team has learned
in 2011. Comparable store sales grew 6% over
a lot, and while we plan to proceed prudently with
6% and 9% increases in each of the two prior years,
growth, we remain as confident as ever in our vast
respectively, and HomeGoods’ segment profit has
increased five-fold in the last three years! HomeGoods
is becoming a more and more powerful brand, and
growth opportunities in Europe. Long term, we see
the potential to expand our store base to 750–
875 stores with our existing brands in our existing
we now believe that we have the potential to grow
markets alone.
this chain to 750 stores, 150 more stores than we
previously envisioned. Further, HomeGoods’ new
Investing for the Future
store performance has been outstanding over the
last three years. We still have over 100 markets in
the U.S. where we operate a T.J. Maxx or Marshalls
without a HomeGoods store, which speaks to our
growth opportunities for this chain.
Beyond the growth catalysts we have in our current
portfolio, we view e-commerce as a major opportunity
for TJX. We envision a marriage between our
stores and the web and plan to lever our $23 billion
brick-and-mortar business and 700–person buying
TJX Canada’s results through the third quarter of
organization to increase our customer base and add
2011 were disappointing, but we
were pleased to see this division
regain its momentum by the end
of 2011 and start the new year
off well. We have a strong team
in place and they are ready to
move forward in 2012. Our launch
of Marshalls in Canada in 2011
was very successful and we are
thrilled to have another growth
6
incrementally to our top and
bottom lines over time. We also
plan to capitalize on the over
4 million average total monthly
visits to our brand websites.
The more we learn, the more
convinced we are of the huge
opportunity e-commerce can
be for TJX. That said, being the
conservative company that we
faster-
turning
inventories
supply chain
precision
are, we have factored very little top-line benefit into
our long-range growth model at this juncture. We will
take our time to do it right and make it profitable, and
while we have not announced our timing yet, we are
very excited about this growth catalyst!
In 2012, some of our other major investments will be
in supply chain and infrastructure. As we mentioned
earlier, we are working to make our supply chain even
more precise, through enhanced systems capabilities.
We will also be investing in a distribution center to
service our U.S. western region that we anticipate will
open in 2013, the first distribution center we have
added to our TJX network in the U.S. in about 10
years, even with the growth we have achieved over
that period.
Another important investment area will be our TJX
University to develop talent and the future leaders of
our Company. As TJX grows, so must the organization.
Developing the talent to take TJX to the $30 billion
and then $40 billion level, and beyond, is key to our
future success.
Importantly, while we are investing for the future,
we are maintaining our expectations for earnings
per share to increase at a compound annual rate of
10%–13% over the next three years, which assumes
annual consolidated comparable store sales growth
of approximately 2%. To help fund our investments
and drive profitability and returns to shareholders, we
will continue with our cost control measures. In 2011,
we exceeded our plans to reduce expenses and are
planning cost reductions in the $50 million–$75 million
range in 2012.
Financial Strength
Gives Us Confidence
Our flexible business model enables us to deliver
superior financial returns for shareholders that are
among the highest in retail and generate enormous
amounts of excess cash. Our “A” Standard & Poor’s
credit rating is one of the strongest in retail, which
7
upgraded
shopping
experience
is important to our vendors, landlords and other
business associates. In 2011, we generated $1.9
billion in cash from operations and spent a total
of $1.4 billion to repurchase TJX stock, which was
more than we originally planned, retiring 49.7 million
shares, and increased the per-share dividend
27%. In early 2012, we split the stock two-for-
one, reflecting our confidence in our future. Since
our last stock split in 2002, TJX’s stock price has
more than tripled.
In 2012, we intend to continue our significant share
buyback program, with approximately $1.2 billion–
$1.3 billion of repurchases planned for the year.
Further, our Board approved an increase in the
per-share dividend of 21% in April 2012, which
represents the 16th consecutive year of dividend
increases. Over this period of time, the Company’s
dividend has grown at a compound annual rate of
23%. These actions underscore our confidence in
our ability to continue to deliver significant increases
in sales, earnings, and cash flow, and generate
superior financial returns.
Always About Value
Looking ahead, as we raise the bar in executing our
off-price mission, we will always be about value.
Value has been our mission for 35 years – to offer
great value through our four pillars of great fashion,
brand, quality and price. We continuously strive to
stretch the boundaries of our off-price business
model and take intelligent risks to offer consumers
even greater value. We begin a new year with great
momentum and are excited about our global growth
prospects and investments to support them. As we
grow, our commitment is to always be about value
in the short and long term.
9
exciting store locations investing for
the future
always
about value
Our Board of Directors
and Our Gratitude
We would like to gratefully acknow-
ledge the dedicated service of
Fletcher “Flash” Wiley and David
Brandon, both of whom stepped
down as members of our Board
of Directors since our last letter.
Flash, a Director since 1990, and
David, a Director since 2001,
made significant contributions to
our Company during their many years of service. We wish them and their
families the very best for future success and good health.
We welcome Zein Abdalla to our Board of Directors. Zein brings extensive
knowledge of European and other international consumer markets that
we believe will be an important complement to our Board and support
our growth strategy in Europe. We are delighted that he has joined our
Board and look forward to working with him.
We would like to extend our gratitude and wish continued success to
Paul Sweetenham, who served as Senior Executive Vice President, TJX
Europe, since 2007, and decided to leave the Company earlier this year.
Paul joined TJX in 1993 and under his leadership, T.K. Maxx built its brand
and presence in Europe and HomeSense was launched.
We sincerely thank our approximately 168,000 Associates, whose hard
work and dedication have made our 35 years of success possible. Our
entire organization is motivated to grow TJX to be a $40 billion company
and beyond. Of course, we are very grateful to our loyal customers for their
continued patronage. We also thank our fellow shareholders, vendors and
other business associates for their ongoing support.
Respectfully,
Bernard Cammarata
CHAIRMAN OF THE BOARD
Carol Meyrowitz
CHIEF EXECUTIVE OFFICER
1 All earnings per share and share amounts reflect the 2-for-1 stock split which occurred in February 2012. On a
GAAP basis, diluted earnings per share from continuing operations in fiscal 2012 increased 17% to $1.93 from
$1.65 in fiscal 2011. Adjusted earnings per share exclude the negative impact of $.04 per share in fiscal 2012
and $.11 per share in fiscal 2011 from the previously announced A.J. Wright consolidation and store closings
and $.02 per share in fiscal 2012 from costs related to convert and grand re-open certain former A.J. Wright
stores into other TJX banners, as well as a $.01 per share positive impact in fiscal 2011 from an adjustment to
the provision for costs for the computer intrusion(s) that occurred over five years ago.
10
Acting with integrity is at the core of everything we do at TJX and providing value
to our customers, Associates, shareholders and communities is central to our
mission. Our V.A.L.U.E. Corporate Social Responsibility (CSR) program captures
the essence of our Company, and the five tenets of our program represent
pursuits that have been important since the Company’s inception. In 2011, we were proud to publish our first, global,
consolidated CSR report. We have also continued our work to implement a software solution to track our CSR activities,
which should aid us in our reporting. We have highlighted a sampling of our recent accomplishments below and invite you
to visit the CSR section of our website, www.tjx.com, for our CSR report.
V. Our V E N D O R S O C I A L C O M P L I A N C E program is based on our commit-
ment to uphold the highest standards of business ethics. We require our vendors to
comply with the standards set out in our Vendor Code of Conduct. Although only a small
percentage of product sold in our stores is produced specifically for us, since 2005, we
have conducted approximately 80 training sessions for buying agents, vendors and factory
management in 10 countries.
A. AT T E N T I O N T O G O V E R N A N C E has played a central role at TJX for more
than three decades. Our high standards in this area are reflected in our Director
Code of Business Conduct and Ethics, Code of Ethics for TJX Executives, and Global
Associate Code of Conduct. In 2011, TJX’s Board of Directors was recognized by the
National Association of Corporate Directors as the “New England Board of the Year.”
L. L E V E R A G I N G D I F F E R E N C E S among our Associates, customers, and
vendors, and within the communities we serve, is an important part of being a
Company of Choice and critical to our success. As of year-end 2011, TJX supported five
Associate Resource Groups, including The Multicultural Coalition (MCC); Women Adding
Value Everyday (WAVE); a resource group for Gays, Lesbians, Bisexuals, Transgendered
People and Friends (PRIDE); Supporting TJX Armed Forces Relations (STAR); and our
newest group, Leadership, Education, and Adaptation for Disabilities (LEAD).
U. Being U N I T E D W I T H O U R C O M M U N I T I E S is central to our role as a
Neighbor of Choice. In 2011, The TJX Foundation funded over 1,500 non-profit
organizations in the U.S., and worldwide, TJX helped support more than 2,100 charitable
organizations. Organizations that have received major support include: Alzheimer’s
Association, Save the Children, St. Jude Children’s Research Hospital, Canadian
Women’s Foundation and Cancer Research U.K., to name a few.
E. ENVIRONMENTAL INITIATIVES are important to TJX, as we have long been
committed to initiatives that are smart for our business and good for the
environment. Our efforts to implement cost-effective ways to reduce carbon emissions,
minimize waste and conserve natural resources continue. One example is our membership
in the U.S. Environmental Protection Agency’s logistics optimization program, SmartWay.
In 2011, we once again participated in the Carbon Disclosure Project and filled a new
management position to coordinate our environmental sustainability efforts.
11
C ON SOLIDAT ED PER FORM ANCE
Succeeding in All Types of Environments
S
E
L
A
S
T
E
N
S
N
O
I
L
L
I
B
$
24
20
16
12
8
4
0
I
T
F
O
R
P
T
N
E
M
G
E
S
S
N
O
I
L
L
I
B
$
3.0
2.5
2.0
1.5
1.0
0.5
0
82*83*
* Recession
91*
02*
09* 10* 12
( F Y )
82*83*
* Recession
91*
02*
09* 10* 12
( F Y)
Reinvesting in Our Business
Returning Value to Shareholders
Growing a Global,
Off-Price/Value Company
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
08
12
08
12
08
12
( F Y )
Property
Additions
Net Cash
from Operating
Activities
Share
Repurchases
Dividend
Payments
MARMAXX 1
HOMEGOODS
WINNERS
(CANADA)
HOMESENSE
(CANADA)
MARSHALLS
(CANADA)
T.K. MAXX
(U.K. & IRELAND)
HOMESENSE
(U.K.)
T.K. MAXX
(GERMANY)
T.K. MAXX
(POLAND)
TJX STORES
1,867 2,300-2,400
374
7 50
216 2 40
86 90
90-100
261 3 00-325
S
E
R
O
T
S
100-150
250-300
100
6
24
54
17
0%
20%
40%
60%
80%
100%
F Y 12: 2,905
POTENTIAL:
~4,200-4,500
( F Y E )
Store growth potential with current chains in current markets
1 Includes Marshalls Shoe Mega Shop
Form 10-K
CONTENTS
Business Overview
Store Locations
Selected Financial Data
Management’s Discussion and Analysis
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements
Notes to Consolidated Financial Statements:
Selected Business Segment Financial Information
Selected Quarterly Financial Data
PAGE
3
7
22
23
F-2
F-3
F-7
F-17
F-32
TJX Stock Performance
TJX Stock Performance
Five-Year Cumulative Performance of TJX Stock Compared with the
S&P 500 Index and the DJ Apparel Index
Five-Year Cumulative Performance of TJX Stock Compared with the
S&P 500 Index and the DJ Apparel Index
TJX
DJARI
S&P
S
R
A
L
L
O
D
250
225
200
175
150
125
100
75
50
25
0
BASE YEAR
2008
2009
2010
2011
2012
The 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 fiscal year for which index data is readily available
for each year in the five-year period ended January 28, 2012. The graph assumes that
$100 was invested on January 26, 2007, 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.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
[ x ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended January 28, 2012
or
[
] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from
to
Commission file number 1-4908
THE TJX COMPANIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
04-2207613
(IRS Employer Identification No.)
770 Cochituate Road
Framingham, Massachusetts
(Address of principal executive offices)
01701
(Zip Code)
Registrant’s telephone number, including area code (508) 390-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $1.00 per share
Securities registered pursuant to Section 12(g) of the Act: NONE
Name of each exchange
on which registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
YES [ x ] NO [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
YES [ ] NO [ x ]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [ x ] NO [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files). YES [ x ] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this
chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ x ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a
smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting
company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated Filer [ x ] Accelerated Filer [ ] Non-Accelerated Filer [ ] Smaller Reporting Company [ ]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES [ ] NO [ x ]
The aggregate market value of the voting common stock held by non-affiliates of the registrant on July 30, 2011 was
$20,932,228,111 based on the closing sale price as reported on the New York Stock Exchange.
There were 746,702,028 shares (adjusted for the two-for-one stock split) of the registrant’s common stock, $1.00 par
value, outstanding as of January 28, 2012.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be filed with the Securities and Exchange Commission in connection with the Annual
Meeting of Stockholders to be held on June 13, 2012 (Part III).
Cautionary Note Regarding Forward-Looking Statements
This Form 10-K and our 2011 Annual Report to Shareholders contain “forward-looking statements” intended to
qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995,
including some of the statements in this Form 10-K under Item 1, “Business,” Item 7, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” and Item 8, “Financial Statements and
Supplementary Data,” and in our 2011 Annual Report to Shareholders under our letter to shareholders and our
performance graphs. Forward-looking statements are inherently subject to risks, uncertainties and potentially
inaccurate assumptions. Such statements give our current expectations or forecasts of future events; they do
not relate strictly to historical or current facts. We have generally identified such statements by using words
indicative of the future such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,”
“looking forward,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will” and “would” or any variations of
these words or other words with similar meanings. All statements that address activities, events or
developments that we intend, expect or believe may occur in the future are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, or Exchange Act. These “forward-looking statements” may relate to such
matters as our future actions, future performance or results of current and anticipated sales, expenses, interest
rates, foreign exchange rates and results and the outcome of contingencies such as legal proceedings.
We cannot guarantee that the results and other expectations expressed, anticipated or implied in any forward-
looking statement will be realized. The risks set forth under Item 1A of this Form 10-K describe major risks to our
business. A variety of factors including these risks could cause our actual results and other expectations to differ
materially from the anticipated results or other expectations expressed, anticipated or implied in our forward-
looking statements. Should known or unknown risks materialize, or should our underlying assumptions prove
inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected
in the forward-looking statements. You should bear this in mind as you consider forward-looking statements.
Our forward-looking statements speak only as of the dates on which they are made, and we do not undertake
any obligation to update any forward-looking statement, whether to reflect new information, future events or
otherwise. You are advised, however, to consult any further disclosures we may make in our future reports to the
Securities and Exchange Commission (“SEC”), on our website, or otherwise.
2
PART I
ITEM 1. BUSINESS
B U S I N E S S O V E R V I E W
The TJX Companies, Inc. (TJX) is the leading off-price apparel and home fashions retailer in the United
States and worldwide. Our over 2,900 stores offer a rapidly changing assortment of quality, fashionable, brand-
name and designer merchandise at prices generally 20% to 60% below department and specialty store regular
prices, every day.
Retail Concept: We operate apparel and home fashions off-price retail chains which are known for their
treasure hunt shopping experience and excellent values on fashionable, brand-name merchandise within four
major divisions: the Marmaxx Group (or Marmaxx) and HomeGoods in the U.S., TJX Canada and TJX Europe.
Inventories turn rapidly in our stores relative to traditional retailers to create a sense of urgency and excitement
for our customers which encourages frequent customer visits. With our flexible “no walls” business model, we
can quickly expand and contract merchandise categories in response to consumers’ changing tastes and
market conditions. Although our stores primarily target the middle to upper middle income customer, we reach a
broad range of customers across many demographic groups and income levels with the values we offer. The
operating platforms and strategies of all of our retail concepts are synergistic. As a result, we capitalize on our
expertise and systems throughout our business, leveraging information, best practices, initiatives and new ideas,
and developing talent across our concepts. We also leverage the substantial buying power of our businesses in
our global relationships with vendors.
In the United States:
— T.J. MAXX and MARSHALLS (MARMAXX): T.J. Maxx and Marshalls (referred to together in the U.S. as
Marmaxx) are collectively the largest off-price retailer in the United States with a total of 1,867 stores. We
founded T.J. Maxx in 1976 and acquired Marshalls in 1995. Both chains sell family apparel (including
footwear and accessories), home fashions (including home basics, accent furniture, lamps, rugs, wall
décor, decorative accessories and giftware) and other merchandise. We differentiate T.J. Maxx and
Marshalls through different product assortment (including an expanded assortment of fine jewelry and
accessories and a designer section called The Runway at T.J. Maxx and a full line of footwear, a broader
men’s offering and a juniors’ department called The Cube at Marshalls), in-store initiatives, marketing and
store appearance. This differentiated shopping experience at T.J. Maxx and Marshalls encourages our
customers to shop both chains.
— HOMEGOODS: HomeGoods, introduced in 1992, is the leading off-price retailer of home fashions in the
U.S. Through its 374 stores, the chain offers a broad array of home basics, giftware, accent furniture,
lamps, rugs, wall décor, decorative accessories, children’s furniture, seasonal and other merchandise.
TJX Canada:
— WINNERS: Acquired in 1990, Winners is the leading off-price apparel and home fashions retailer in
Canada. The merchandise offering at its 216 stores across Canada is comparable to T.J. Maxx and
Marshalls.
— MARSHALLS: In March 2011, we brought the Marshalls chain to Canada, and successfully opened a total
of six Canadian Marshalls stores during fiscal 2012. Like Marshalls in the U.S., our Canadian Marshalls
stores offer an expanded footwear department and a juniors’ department called The Cube, differentiating
it from the Winners chain.
— HOMESENSE: HomeSense introduced the home fashions off-price concept to Canada in 2001. The
chain has 86 stores with a merchandise mix of home fashions similar to HomeGoods.
3
TJX Europe:
— T.K. MAXX: Launched in 1994, T.K. Maxx introduced off-price to Europe and remains Europe’s only
major off-price retailer of apparel and home fashions. With 332 stores, T.K. Maxx operates in the U.K. and
Ireland as well as Germany, to which it expanded in 2007, and Poland, to which it expanded in 2009.
Through its stores and online website, T.K. Maxx offers a merchandise mix similar to T.J. Maxx, Marshalls
and Winners.
— HOMESENSE: HomeSense brought the home fashions off-price concept to Europe, opening in the U.K.
in 2008. Its 24 stores offer a merchandise mix of home fashions in the U.K. similar to that of HomeGoods
in the U.S. and HomeSense in Canada.
A.J. Wright Consolidation: In the first quarter of fiscal 2012, we completed the consolidation of A.J. Wright,
converting 90 of the A.J. Wright stores to T.J. Maxx, Marshalls or HomeGoods banners and closing the
remaining 72 stores, two distribution centers and home office. We continue to serve the customer demographic
previously targeted by A.J. Wright through our other banners.
Flexible Business Model: Our off-price business model is flexible, particularly for a company of our size,
allowing us to react to market trends. Our opportunistic buying and inventory management strategies give us
flexibility to adjust our merchandise assortments more frequently than traditional retailers, and the design and
operation of our stores and distribution centers support this flexibility. By maintaining a liquid inventory position,
our merchants can buy close to need, enabling them to buy into current market trends and take advantage of
opportunities in the marketplace. Buying close to need gives us visibility into consumer and fashion trends and
current pricing at the time we make our purchases, helping us “buy smarter” and reduce our markdown
exposure. Our selling floor space is flexible, without walls between departments and largely free of permanent
fixtures, so we can easily expand and contract departments in response to customer demand, as well as market
and fashion trends. Our distribution facilities are designed to accommodate our methods of receiving and
shipping broadly ranging quantities of product to our large store base quickly and efficiently.
Opportunistic Buying: We are differentiated from traditional retailers by our opportunistic buying of quality,
fashionable, brand name merchandise, which permits us to buy into current trends and pricing. We purchase the
majority of our apparel
inventory and a significant portion of our home fashion inventory opportunistically.
Virtually all of our opportunistic purchases are made at discounts from initial wholesale prices. Our buying
organization numbers over 700, and we operate 12 buying offices in nine countries. In contrast to traditional
retailers, which typically order goods far in advance of the time the product appears on the selling floor, our
merchants are in the marketplace virtually every week. They buy primarily for the current selling season, and to a
limited extent, for a future selling season. Buying later in the inventory cycle than traditional retailers and using
the flexibility of our stores to shift in and out of categories, we are able to take advantage of opportunities to
acquire merchandise at substantial discounts that regularly arise from the routine flow of inventory in the highly
fragmented apparel and home fashions marketplace, such as order cancellations, manufacturer overruns and
special production. We operate with lean inventory levels compared to conventional retailers to give ourselves
the flexibility to take advantage of these opportunities.
We buy most of our inventory directly from manufacturers, with some coming from retailers and other
sources. A small percentage of the merchandise we sell is private label merchandise produced for us by third
parties. Our expansive vendor universe, which is in excess of 15,000, provides us substantial and diversified
access to merchandise. We have not historically experienced difficulty in obtaining adequate amounts of quality
inventory for our business in either favorable or difficult retail environments and believe that we will continue to
have adequate inventory as we continue to grow.
We believe a number of factors make us an attractive outlet for the vendor community and provide us
excellent access on an ongoing basis to leading branded merchandise. We are typically willing to purchase less-
than-full assortments of items, styles and sizes and quantities ranging from small to very large; we are able to
disperse inventory across our geographically diverse network of stores or to specific markets; we pay promptly;
and we generally do not ask for typical retail concessions (such as advertising, promotional and markdown
allowances), delivery concessions (such as drop shipments to stores or delayed deliveries) or return privileges.
Importantly, we provide vendors an outlet with financial strength and an excellent credit rating.
4
Inventory Management: We offer our customers a rapidly changing selection of merchandise to create a
“treasure hunt” experience in our stores and spur customer visits. To achieve this, we seek to turn the inventory
in our stores rapidly, regularly offering fresh selections of apparel and home fashions at excellent values. Our
specialized inventory planning, purchasing, monitoring and markdown systems, coupled with distribution center
storage, processing, handling and shipping systems, enable us to tailor the merchandise in our stores to local
preferences and demographics, achieve rapid in-store inventory turnover on a vast array of products and sell
substantially all merchandise within targeted selling periods. We make pricing and markdown decisions and
store inventory replenishment determinations centrally, using information provided by specialized computer
systems, designed to move inventory through our stores in a timely and disciplined manner. We do not generally
engage in promotional pricing activity such as sales or coupons. Over the past several years, we have improved
our supply chain, allowing us to reduce inventory levels and ship more efficiently and quickly. We plan to
continue to invest in our supply chain with the goal of more precisely and effectively allocating the right
merchandise to each store and delivering it even more quickly and efficiently.
Pricing: Our mission is to offer retail prices in our stores generally 20% to 60% below department and
specialty store regular retail prices. Through our opportunistic purchasing, we are generally able to react to price
fluctuations in the wholesale market to maintain our pricing gap relative to prices offered by other retailers. For
example,
if conventional retailers increase retail prices to preserve
merchandise margin, we typically are able to increase our retail prices correspondingly, while maintaining our
value relative to conventional retailers and preserve our own merchandise margin. If conventional retailers do not
raise prices to pass rising inventory costs on to consumers, we seek to buy inventory at prices that permit us to
maintain our values relative to conventional retailers and sustain our merchandise margins.
in a time of rising inventory prices,
Low Cost Operations: We operate with a low cost structure compared to many traditional retailers. We
focus aggressively on expenses throughout our business. Our advertising is focused on our banners rather than
individual products, and partially as a result, our advertising budget as a percentage of sales remains low
compared to traditional retailers. We design our stores, generally located in community shopping centers, to
provide a pleasant, convenient shopping environment but, relative to other retailers, do not spend heavily on
store fixtures. Additionally, our distribution network is designed to run cost effectively. We continue to pursue
cost savings in our operations.
Customer Service/Shopping Experience: While we offer a self-service format, we train our store
associates to provide friendly and helpful customer service and seek to staff our stores to deliver a positive
shopping experience. We typically offer customer-friendly return policies. We accept a variety of payment
methods including cash, credit cards and debit cards. In the U.S., we offer a co-branded TJX credit card and a
private label credit card, both through a bank, but do not own the customer receivables related to either
program. We plan to continue our program of renovating and upgrading stores across our banners, which we
believe has enhanced our customers’ shopping experience and has helped to drive sales.
Distribution: We operate distribution centers encompassing approximately 11 million square feet in four
countries. These centers are large, highly automated and built to suit our specific, off-price business model. We
ship substantially all of our merchandise to our stores through these distribution centers as well as warehouses
and shipping centers operated by third parties. We shipped approximately 1.8 billion units to our stores during
fiscal 2012.
5
Store Growth: Expansion of our business through the addition of new stores is an important part of our
strategy for TJX as a global, off-price, value company. The following table provides information on the growth
and potential growth of each of our current chains in their current geographies:
In the United States:
T.J. Maxx
Marshalls
Marmaxx
HomeGoods
In Canada:
Winners
HomeSense
Marshalls
In Europe:
T.K. Maxx
HomeSense
Approximate
Average Store
Size (square feet)
Number of Stores at Year End(1)
Fiscal 2011
Fiscal 2012
Fiscal 2013
(estimated)
Estimated
Ultimate Number
of Stores
29,000
31,000
25,000
29,000
24,000
33,000
32,000
21,000
923
830
1,753
336
215
82
—
307
24
2,717
983
884
1,867
374
216
86
6
332
24
2,905
1,952
414
221
87
15
342
24
3,055
2,300-2,400
750
240
90
90-100
650-725*
100-150**
4,220-4,455
(1) Does not include stores operating under A.J. Wright banner. Winners fiscal 2011 count includes 3 StyleSense stores.
* Estimates include U.K., Ireland, Germany and Poland only
** Estimates include U.K. and Ireland only
Included in the Marshalls store counts above are free-standing Marshalls Shoe MegaShop stores, which sell
family footwear and accessories (nine stores at fiscal 2012 year end). Some of our HomeGoods and Canadian
HomeSense stores are co-located with one of our apparel stores in a superstore format. We count each of the
stores in the superstore format as a separate store.
Revenue Information: The percentages of our consolidated revenues by geography for the last three fiscal
years are as follows:
United States
Northeast
Midwest
South (including Puerto Rico)
West
Canada
Europe
Total
Fiscal 2010
Fiscal 2011
Fiscal 2012
78%
77%
76%
26%
13%
26%
13%
26%
14%
24%
13%
24%
13%
25%
14%
11%
11%
100%
12%
11%
100%
12%
12%
100%
The percentages of our consolidated revenues by major product category for the last three fiscal years are
as follows:
Clothing including footwear
Home fashions
Jewelry and accessories
Total
Fiscal 2010
Fiscal 2011
Fiscal 2012
61%
26%
13%
100%
61%
26%
13%
100%
60%
27%
13%
100%
Segment Overview: We operate four business segments. We have two segments in the U.S., Marmaxx
(T.J. Maxx and Marshalls) and HomeGoods; one in Canada, TJX Canada (Winners, Marshalls and HomeSense)
and one in Europe, TJX Europe (T.K. Maxx and HomeSense). Each of our segments has its own management,
administrative, buying and merchandising organization and distribution network. The A.J. Wright chain was also
reported as a separate segment through the first quarter of fiscal 2012, when the consolidation of A.J. Wright
was completed. More detailed information about our segments, including financial information for each of the
last three fiscal years, can be found in Note H to the consolidated financial statements.
6
S T O R E L O C A T I O N S
Our chains operated stores in the following locations as of January 28, 2012:
Stores located in the United States:
T.J. Maxx Marshalls HomeGoods
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total Stores
20
11
10
90
12
27
3
2
71
41
5
45
19
8
6
13
10
9
15
51
36
12
7
15
3
4
7
14
34
3
60
31
3
40
5
8
41
6
6
20
2
25
47
10
5
32
15
6
17
1
983
4
14
—
120
7
24
3
1
75
30
1
45
12
2
3
4
10
4
27
52
21
12
3
13
—
2
8
8
46
3
72
20
—
24
5
7
33
17
6
9
—
14
71
1
1
28
11
3
8
—
884
2
7
2
38
4
10
2
—
36
14
1
21
3
—
1
3
—
3
9
25
12
8
—
6
—
—
4
6
24
—
32
12
—
9
—
3
17
6
4
4
—
6
19
4
1
11
—
1
4
—
374
Store counts above include the T.J. Maxx, Marshalls or HomeGoods portion of a superstore.
7
Stores Located in Canada:
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland
Nova Scotia
Ontario
Prince Edward Island
Quebec
Saskatchewan
Total Stores
Winners HomeSense Marshalls
26
28
6
3
2
8
100
1
39
3
216
10
16
1
2
1
2
40
—
12
2
86
—
—
—
—
—
—
6
—
—
—
6
Store counts above include the Winners or HomeSense portion of a superstore.
Stores Located in Europe:
United Kingdom
Republic of Ireland
Germany
Poland
Total Stores
T.K. Maxx HomeSense
245
16
54
17
332
24
—
—
—
24
Competition: The retail apparel and home fashion business is highly competitive. We compete on the basis
of factors such as fashion, quality, price, value, merchandise selection and freshness, brand-name recognition,
service, reputation and store location. We compete with local, regional, national and international department,
specialty, off-price, discount, warehouse and outlet stores as well as other retailers that sell apparel, home
fashions and other merchandise that we sell, whether in stores, through catalogues or other media or over the
internet.
Employees: At January 28, 2012, we had approximately 168,000 employees, many of whom work less than
40 hours per week. In addition, we hire temporary employees, particularly during the peak back-to-school and
holiday seasons.
Trademarks: We have the right to use our principal trademarks and service marks, which are T.J. Maxx,
in relevant countries. Our rights in these
Marshalls, HomeGoods, Winners, HomeSense and T.K. Maxx,
trademarks and service marks endure for as long as they are used.
Seasonality: Our business is subject to seasonal influences. In the second half of the year, which includes
the back-to-school and year-end holiday seasons, we generally realize higher levels of sales and income.
SEC Filings and Certifications: Copies of our annual reports on Form 10-K, proxy statements, quarterly
reports on Form 10-Q and current reports on Form 8-K filed with or furnished to the SEC, and any amendments
to those documents, are available free of charge on our website, www.tjx.com, under “SEC Filings,” as soon as
reasonably practicable after they are electronically filed with, or furnished to, the SEC. They are also available
free of charge from TJX Global Communications, 770 Cochituate Road, Framingham, Massachusetts 01701. The
public can read and copy materials at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC
20549, 1-800-SEC-0330. The SEC maintains a website containing all reports, proxies, information statements,
and all other information regarding issuers that file electronically (http://www.sec.gov).
Information appearing on www.tjx.com is not a part of, and is not incorporated by reference in, this Form 10-K.
Unless otherwise indicated, all store information in this Item 1 is as of January 28, 2012, and references to
store square footage are to gross square feet. Fiscal 2010 means the fiscal year ended January 30, 2010, fiscal
2011 means the fiscal year ended January 29, 2011, fiscal 2012 means the fiscal year ended January 28, 2012
and fiscal 2013 means the fiscal year ending February 2, 2013.
8
Unless otherwise stated or the context otherwise requires, references in this Form 10-K to “TJX” and “we,”
refer to The TJX Companies, Inc. and its subsidiaries.
ITEM 1A. RISK FACTORS
The statements in this section describe the major risks to our business and should be considered carefully,
in connection with all of the other information set forth in this annual report on Form 10-K. The risks that follow,
individually or in the aggregate, are those that we think could cause our actual results to differ materially from
those stated or implied in forward-looking statements.
Failure to execute our opportunistic buying and inventory management could adversely affect our business.
We purchase the majority of our apparel inventory and much of our home inventory opportunistically with
our buyers purchasing close to need. Establishing the treasure hunt nature of the off-price buying experience to
drive traffic to the stores and to increase same store sales requires us to offer rapidly changing assortments of
merchandise in our stores. While opportunistic buying provides our buyers the ability to buy at desirable times
and prices, in the quantities we need and into market trends, it places considerable discretion in our buyers,
subjecting us to risks related to the pricing, quantity, nature and timing of inventory flowing to our stores. If we
are unable to provide frequent replenishment of fresh, high quality, attractively priced merchandise in our stores,
it could adversely affect traffic to the stores as well as our sales and margins. We base our purchases of
inventory, in part, on our sales forecasts. If our sales forecasts do not match customer demand, we may
experience higher inventory levels and need to take markdowns on excess or slow-moving inventory, leading to
decreased profit margins, or we may have insufficient inventory to meet customer demand, leading to lost sales,
either of which could adversely affect our financial performance. We need to purchase inventory sufficiently
below conventional retail to maintain our pricing differential to regular department and specialty store prices and
to attract customers and sustain our margins, which we may not achieve at various times or in some divisions or
geographies and which could adversely affect our results or those of one of our segments.
We must also properly execute our
inventory management strategies by appropriately allocating
merchandise among our stores, timely and efficiently distributing inventory to stores, maintaining an appropriate
mix and level of inventory in stores, appropriately changing the allocation of floor space of stores among product
categories to respond to customer demand and effectively managing pricing and markdowns, and there is no
assurance we will be able to do so. In addition to our own execution, inventory flow may be adversely affected
by factors outside our control, such as extreme weather or natural disasters or other changes in conditions
affecting our vendors and others in our supply chain, such as political instability, labor issues or increasing cost
or regulations. If we are not able to adjust appropriately to such factors, our merchandise distribution may be
affected. Failure to execute our opportunistic inventory buying and inventory management well could adversely
affect our performance and our relationship with our customers.
Failure to continue to expand our operations successfully or to manage our substantial size and scale effectively
could adversely affect our financial results.
Our revenue growth is dependent, among other things, on our ability to continue to expand successfully
through successfully opening new stores as well as increasing the sales of our existing stores. Successful store
growth requires acquisition and development of appropriate store real estate including availability and selection
of appropriate sites in appropriate geographies and negotiation of acceptable terms. Competition for desirable
sites; increases in real estate, construction and development costs; variations in or changes to zoning or other
land use regulations as well as costs and availability of capital could limit our ability to open new stores
successfully in various markets or adversely affect the economics of new stores in various markets. We may
encounter difficulties in attracting customers when we enter new markets for various reasons,
including
customers’ lack of familiarity with our brands or our lack of familiarity with local customer preferences or cultural
differences. New stores may not achieve the same sales or profit levels as our existing stores, and new and
existing stores in a market may adversely affect each other’s sales and profitability.
Further, expansion places significant demands on management and the administrative, merchandising, store
operations, distribution, compliance and other organizations in our businesses, and we may not successfully
9
manage our growth. Under our business model, some aspects of the businesses and operations of our chains in
the U.S., Canada and Europe are conducted with relative autonomy. The large size and scale of our operations, our
multiple businesses in the U.S., Canada and Europe and the autonomy afforded to the chains increase the risk that
our systems and practices will not be implemented appropriately throughout our company and that information
may not be appropriately shared across our operations, which risks may increase as we continue to grow,
particularly in different countries. If business information is not shared effectively or we are otherwise unable to
manage our growth effectively, we may operate with decreased operational efficiency, may need to reduce our rate
of expansion of one or more operations or otherwise curtail growth in one or more markets, which may adversely
affect our success in executing our business goals and adversely impact our sales and results.
Failure to identify customer trends and preferences to meet customer demand could negatively impact our
performance.
Because our success depends on our ability to meet customer demand, we work to follow customer trends
and preferences on an ongoing basis and to buy inventory in response to those trends and preferences.
However, identifying consumer trends and preferences in the diverse product lines and many markets in which
we do business and successfully meeting customer demand across those lines and for those markets on a
timely basis is challenging. Although our flexible business model allows us to buy close to need and in response
to consumer preferences and trends and to expand and contract merchandise categories in response to
consumers’ changing tastes, we may not successfully do so, which could adversely affect our results.
Our future performance is dependent upon our ability to continue to expand within our existing markets and to
extend our off-price model in new product lines, banners and geographic regions.
Our strategy is to continue to expand within existing markets, to expand to new markets and geographies
and to attract new customers in existing and new markets across demographics. In addition to the risks
associated with finding appropriate locations and managing our existing business effectively, this growth
strategy includes developing new ways to sell more or different categories of merchandise within our existing
stores, continued expansion of our existing chains in our existing markets and countries, expansion of these
chains to new markets and countries, and development or acquisition of new banners or businesses, including
our planned expansion into e-commerce, all of which entail significant risk. Our growth is dependent upon our
ability to successfully extend our business in these ways and on managing the timing and implementation of our
growth effectively. If any aspect of our expansion strategy does not achieve the success we expect in whole or
in part, we may be required to increase our investment or close stores or operations. Unsuccessful expansion of
our model could adversely affect growth and financial performance.
If we fail to successfully implement our marketing, advertising and promotional programs, or if our competitors
are more effective with their programs than we are, our revenue may be adversely affected.
Although we use marketing, advertising and promotional programs to attract customers to our stores
through various media including print, television, social media, database marketing and direct marketing, some
of our competitors expend more for their programs than we do, or use different approaches than we do, which
may provide them with a competitive advantage. There can be no assurance that we will be able to continue to
execute our marketing, advertising and promotional programs effectively, and any failure to do so could have a
material adverse effect on our revenue and results of operations. In addition, internet-based communication
channels are evolving rapidly, and we may not adjust our programs effectively to reflect the changing forms of
social media and other methods of communication.
We operate in highly competitive markets, and we may not be able to compete effectively.
The retail apparel and home fashion business is highly competitive. We compete with many other local,
regional, national and international retailers that sell apparel, home fashions and other merchandise we sell,
whether in stores, through catalogues or other media or over the internet. Some of our competitors are larger
than we are, have more experience in selling certain products or have greater financial resources than we do;
new competitors frequently enter the market, and existing competitors enter or increase their presence in the
markets in which we operate, expand their merchandise offerings or change their pricing methods. We compete
10
on the basis of fashion, quality, price, value, merchandise selection and freshness, brand-name recognition,
service, reputation and store location. Other competitive factors that influence the demand for our merchandise
include our advertising, marketing and promotional activities and the name recognition and reputation of our
chains. If we fail to compete effectively, our sales and results of operations could be adversely affected.
Failure to attract, train and retain quality sales, distribution center and other associates in appropriate numbers as
well as experienced buying and management personnel could adversely affect our performance.
Our performance depends on recruiting, developing,
training and retaining quality sales, systems,
distribution center and other associates in large numbers as well as experienced buying and management
personnel. Many of our associates are in entry level or part-time positions with historically high rates of turnover.
Availability and skill of associates may differ across markets in which we do business and as we enter new
markets, and our ability to meet our labor needs while controlling labor costs is subject to external factors such
as unemployment levels, prevailing wage rates, minimum wage legislation, changing demographics, health care
reform, health and other insurance costs and governmental labor and employment requirements. The nature of
industry also subjects us to the risk of immigration law violations, which risk has
the workforce in the retail
increased in recent years, and certain associates in our distribution centers are members of unions and therefore
subject us to the risk of labor actions. In addition, any failure of third-parties that perform services on our behalf
to comply with immigration, employment or other laws could damage our reputation or disrupt our ability to
failure to increase our wages
obtain needed labor.
competitively could result in a decline in the quality of our workforce, causing our customer service to suffer,
while increasing our wages could cause our earnings to decrease.
increasing wage rates in a market,
In the event of
In addition, because of the distinctive nature of our off-price model, we must do significant internal training
and development for key associates. The market for retail management is highly competitive and, similar to other
retailers, we face challenges in securing sufficient management talent. If we do not continue to attract, train and
retain management personnel and other quality associates, our performance could be adversely affected.
Global economic conditions may adversely affect our financial performance.
During the recent economic recession, global financial markets experienced extreme volatility, disruption and
credit contraction, which adversely affected global economic conditions. Renewed financial turmoil in the financial
and credit markets could adversely affect our costs of capital and the sources of liquidity available to us and could
increase our pension funding requirements. Economic conditions, both on a global level and in particular markets,
including continued unemployment, decreased disposable income and actual and perceived wealth, high energy and
health care costs, interest and tax rates and policies, weakness in the housing market, volatility in capital markets and
tighter credit, as well as political or other factors beyond our control such as threats or possibilities of war, terrorism
global or national unrest, actual or threatened epidemics, and political or financial instability also have significant
effects on consumer confidence and spending. Consumer spending, in turn, affects retail sales. These conditions and
factors could adversely affect discretionary consumer spending and, although we benefit from being an off-price
retailer, may adversely affect our sales, cash flows and results of operations and performance.
Compromises of our data security could materially harm our reputation and business.
In the ordinary course of our business, we collect and store certain personal information from individuals,
such as our customers and associates, and we process customer payment card and check information.
We suffered an unauthorized intrusion or intrusions (such intrusion or intrusions, collectively, the “Computer
into portions of our computer system that process and store information related to customer
Intrusion”)
transactions, discovered late in fiscal 2007, in which we believe customer data were stolen. We have taken steps
designed to further strengthen the security of our computer system and protocols and have instituted an
ongoing program with respect to data security, consistent with a consent order with the Federal Trade
Commission, to assess the ongoing effectiveness of our information security program and to maintain and
enhance our program as appropriate. Nevertheless, there can be no assurance that we will not suffer a future
data compromise, that unauthorized parties will not gain access to personal information, or that any such data
compromise or access will be discovered in a timely way.
11
We rely on commercially available systems, software,
tools and monitoring to provide security for
processing, transmission and storage of confidential
information. Further, the systems currently used for
transmission and approval of payment card transactions, and the technology utilized in payment cards
themselves, all of which can put payment card data at risk, are determined and controlled by the payment card
industry, not by us. This is also true for check information and approval. Computer hackers may attempt to
penetrate our computer system and, if successful, misappropriate personal information, payment card or check
information or confidential business information of our company. In addition, our associates, contractors or third
parties with whom we do business or to whom we outsource business operations may attempt to circumvent
our security measures in order to misappropriate such information, and may purposefully or inadvertently cause
a breach involving such information. Advances in computer and software capabilities and encryption technology,
new tools and other developments may increase the risk of such a breach.
Compromise of our data security, failure to prevent or mitigate the loss of personal or business information
and delays in detecting any such compromise or loss could disrupt our operations, damage our reputation and
customers’ willingness to shop in our stores, violate applicable laws, regulations, orders and agreements, and
subject us to additional costs and liabilities which could be material.
Failure to operate information systems and implement new technologies effectively could disrupt our business or
reduce our sales or profitability.
We rely extensively on various information systems, data centers and software applications to manage many
aspects of our business,
including to process and record transactions in our stores, to enable effective
communication systems, to plan and track inventory flow, and to generate performance and financial reports.
We are dependent on the integrity, security and consistent operations of these systems and related back-up
systems. Our computer systems are subject to damage or interruption from power outages, computer and
telecommunications failures, computer viruses, security breaches, cyber-attacks, catastrophic events such as
fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism and usage errors by our associates or
contractors. We incur expenses to maintain our systems and to address the risk of interruptions in service.
Interruptions or shutdowns of our systems could lead to delays in our business operations and, if significant or
extreme, affect our results of operations.
We modify and update our systems and infrastructure, such as with new data centers, replace or update
legacy systems and may acquire new systems with additional functionality, such as for the development of an
e-commerce business. Although we believe we are diligent in selecting vendors, systems and procedures to
enable us to maintain the integrity of our systems, we recognize that there are inherent risks associated with
these modifications and acquisitions, including accurately capturing and maintaining data, realizing the expected
benefit of the change and the possibility of system disruptions as the changes are implemented.
The efficient operation and successful growth of our business depends upon these information systems,
including our ability to operate and maintain them effectively and to select and implement appropriate new
technologies, systems, controls, data centers and adequate disaster recovery systems successfully. The failure
of our information systems to perform as designed or our failure to implement and operate them effectively could
disrupt our business or subject us to liability and thereby harm our profitability.
As our business is subject to seasonal influences, a decrease in sales or margins during the second half of the
year could have a disproportionately adverse affect on our operating results.
Our business is subject to seasonal influences; we generally realize higher levels of sales and income in the
second half of the year, which includes the back-to-school and year-end holiday seasons. Any decrease in sales
or margins during this period could have a disproportionately adverse effect on our results of operations.
Adverse or unseasonable weather in the markets in which our stores operate or our distribution centers are
located could adversely affect our operating results.
Both adverse and unseasonable weather affect customers’ buying patterns and willingness to shop and
accordingly the demand for the merchandise in our stores, particularly in seasonal apparel. Severe weather can
also affect our ability to transport merchandise to our stores from our distribution and shipping centers or
12
elsewhere in our supply chain. As a result, unusually extreme or unseasonable weather in our markets, such as
snow,
ice or rain storms, severe cold or heat or extended periods of unseasonable temperatures, could
adversely affect our sales, increase markdowns and adversely affect our operating results.
Our results may be adversely affected by serious disruptions or catastrophic events.
Unforeseen public health issues, such as pandemics and epidemics, as well as natural disasters such as
hurricanes, tornadoes, floods, earthquakes and other extreme weather and climate conditions in any of our
markets could disrupt our operations or the operations of one or more of our vendors or could severely damage
or destroy one or more of our stores or distribution facilities located in the affected areas. Day-to-day
operations, particularly our ability to receive products from our vendors or transport products to our stores could
be adversely affected, or we could be required to close stores or distribution centers in the affected areas or in
areas served by affected distribution centers. As a result, our business could be adversely affected.
Damage to our corporate reputation or those of our banners could adversely affect our sales and operating
results.
We believe that building the brand reputation of our retail banners is an important part of our marketing efforts
and we expend resources building relationships with our customers through our print marketing, websites, social
media and other means. We also develop private label brands for certain merchandise sold in our stores.
Reputational value is based, in part, on perceptions of subjective qualities, so isolated incidents involving us or our
merchandise that erode trust or confidence could adversely affect our reputation and our business, particularly if
the incidents result in significant adverse publicity or governmental inquiry. Similarly, information posted about us,
our banners or our merchandise, including our private label brands, on social media platforms and similar venues,
including blogs, social media websites, and other forums for internet-based communications that allow individuals
access to a broad audience of consumers and other interested persons may adversely affect our reputation and
brand, even if the information is inaccurate. Damage to the perception or reputation of our company and our
banners could result in declines in customer loyalty and sales, affect our vendor relationships, development
opportunities and associate retention and otherwise adversely affect our business.
Issues with merchandise quality or safety could damage our reputation, sales and financial results.
Various governmental authorities in the jurisdictions where we do business regulate the quality and safety of
the merchandise we sell in our stores. Regulations and standards in this area, including those related to the
Consumer Product Safety Improvement Act of 2008 in the United States and similar legislation in other countries
in which we operate, change from time to time. Also, new state or local regulations that may affect our business
are contemplated and enacted with some regularity. Our inability to comply with regulatory requirements on a
timely basis or at all could result in significant fines or penalties, which could have a material adverse effect on
our financial results. We rely on our vendors to provide quality merchandise that complies with applicable
product safety laws and other applicable laws, but they may not comply with their contractual obligations with
us to do so. Although our arrangements with our vendors frequently provide for indemnification for product
liabilities, the vendors may fail to honor those obligations to an extent we consider sufficient or at all. Issues with
the quality and safety of merchandise, particularly with food, bath and body and children’s products, or issues
with the genuineness of merchandise, regardless of our fault, or customer concerns about such issues, could
cause damage to our reputation and could result in lost sales, uninsured product liability claims or losses,
merchandise recalls and increased costs, and regulatory, civil or criminal fines or penalties, any of which could
have a material adverse effect on our financial results.
Our expanding international operations increasingly expose us to risks inherent in operating in foreign
jurisdictions.
We have a significant retail presence in Canada and Europe and have established buying offices around the
world, and our goal as a global retailer is to continue to expand our operations into other international markets in
the future. In addition to facing risks similar to our U.S. operations, our foreign operations encounter risks
local customs and
inherent
in foreign operations, such as understanding the retail climate and trends,
13
competitive conditions in foreign markets, complying with foreign laws, rules and regulations, as well as risks
from foreign currency fluctuations, adverse tax consequences or limitations on the repatriation and investment of
funds, which could have an adverse impact on our operations or profitability. Complying with foreign and U.S.
laws and our own internal policies may require us to spend additional time and resources to implement new
procedures and financial controls, conduct audits, train associates and third parties on our compliance methods
or take other actions, which could adversely impact our operations.
We are subject to risks associated with importing merchandise from foreign countries.
Many of the products sold in our stores are sourced by our vendors and, to a lesser extent, by us, in many
foreign countries, particularly southeastern Asia. Where we are the importer of record, we may be subject to
regulatory or other requirements similar to those imposed upon the manufacturer of such products. We are
subject to the various risks of importing merchandise from abroad and purchasing product made in foreign
countries, such as:
— potential disruptions in manufacturing, logistics and supply;
— changes in duties, tariffs, quotas and voluntary export restrictions on imported merchandise;
— strikes and other events affecting delivery;
— consumer perceptions of the safety of imported merchandise;
— product compliance with laws and regulations of the destination country;
— product liability claims from customers or penalties from government agencies relating to products that
are recalled, defective or otherwise noncompliant or alleged to be harmful;
— concerns about human rights, working conditions and other labor rights and conditions in foreign
countries where merchandise is produced, and changing labor, environmental and other laws in these
countries;
— compliance with laws and regulations concerning ethical business practices, such as the U.S. Foreign
Corrupt Practices Act and the U.K. Bribery Act;
— exposure for product warranty and intellectual property issues; and
— economic, political or other problems in countries from or through which merchandise is imported.
Political or financial instability, trade restrictions, tariffs, currency exchange rates, labor conditions, transport
capacity and costs, systems issues, problems in third party distribution and warehousing and other interruptions
of the supply chain, compliance with U.S. and foreign laws and regulations and other factors relating to
international trade and imported merchandise beyond our control could affect the availability and the price of our
inventory. Furthermore, although we have implemented policies and procedures designed to facilitate
compliance with laws and regulations relating to doing business in foreign markets and importing merchandise
from abroad, there can be no assurance that contractors, agents, vendors or other third parties with whom we
do business will not violate such laws and regulations or our policies, which could subject us to liability and
could adversely affect our operations or operating results.
Our results may be adversely affected by reduced availability or increases in the price of oil or other fuels, raw
materials and other commodities.
Energy and fuel costs have fluctuated dramatically in the past, particularly the price of oil and gasoline,
which have recently risen significantly. An increase in the price of oil
increases our transportation costs for
distribution, utility costs for our retail stores and costs to purchase our products from suppliers. Although we
have implemented a hedging strategy designed to manage a portion of our transportation costs, increases in oil
and gasoline prices could adversely affect consumer spending and demand for our products and increase our
operating costs, which could have an adverse effect on our performance.
Increased regulation related to
environmental costs, including cap and trade or other emissions management systems could also affect the
costs of doing business, including utility costs, transportation and logistics.
14
Similarly, other commodity prices can fluctuate dramatically, such as the cost of cotton and synthetic
fabrics, which at times have risen significantly. Such increases can increase the cost of merchandise, which
could adversely affect our performance through potentially reduced consumer demand or reduced margins.
Fluctuations in foreign currency exchange rates may lead to lower revenues and earnings.
In addition to our U.S. businesses, we operate stores in Canada and Europe and plan to continue to expand
our international operations. Sales made by our stores outside the United States are denominated in the
currency of the country in which the store is located, and changes in foreign exchange rates affect the
translation of the sales and earnings of these businesses into U.S. dollars for financial reporting purposes.
Because of this, movements in exchange rates have had and are expected to continue to have a significant
impact on our consolidated and segment results from time to time.
Changes in foreign currency exchange rates can also increase the cost of inventory purchases that are
denominated in a currency other than the local currency of the business. When these changes occur suddenly, it
can be difficult for us to adjust retail prices accordingly, and gross margin can be adversely affected. A
significant amount of merchandise we offer for sale is made in China and accordingly, a revaluation of the
Chinese currency, or increased market flexibility in the exchange rate for that currency, increasing its value
relative to the U.S. dollar or currencies in which our stores are located could be particularly significant.
Additionally, we routinely enter into inventory-related hedging instruments to mitigate the impact of foreign
currency exchange rates on merchandise margins of merchandise purchased by our segments that
is
denominated in currencies other than their local currencies. In accordance with GAAP, we evaluate the fair value
of these hedging instruments and make mark-to-market adjustments at the end of an accounting period. These
adjustments are of a much greater magnitude when there is significant volatility in currency exchange rates and
may have a significant impact on our earnings.
Although we implement foreign currency hedging and risk management strategies to reduce our exposure to
fluctuations in earnings and cash flows associated with changes in foreign exchange rates, we expect that
foreign currency fluctuations could have a material adverse effect on our net sales and results of operations. In
addition, fluctuations in foreign currency exchange rates may have a greater impact on our earnings and
operating results if a counterparty to one of our hedging arrangements fails to perform.
Our quarterly operating results fluctuate and may fall short of prior periods, our projections or the expectations of
securities analysts or investors, which could adversely affect our stock price.
Our operating results have fluctuated from quarter to quarter at points in the past, and they may continue to
do so in the future. The public trading of our stock is based in large part on market expectations that our
business will continue to grow and that we will achieve certain levels of increased net income and earnings per
share. Our results have at points in the past fallen short of results in prior periods, our projections or the
expectations of securities analysts or investors, and they may do so in the future. If we fail to increase our results
over prior periods, to achieve our projected results or to meet the expectations of securities analysts or
investors, our share price may decline, and the decrease in the stock price may be disproportionate to the
shortfall in our financial performance. Factors that could cause us not to do so include some factors that are
within our control, such as the execution of our off-price buying; selection, pricing and mix of merchandise;
inventory management including flow, pricing markon and markdowns; and management of our growth; and
some factors that are not within our control, including actions of competitors, weather conditions, economic
conditions, consumer confidence, seasonality, and cost increases due, among other things, to government
regulation and increased healthcare costs. Most of our operating expenses, such as rent expense and associate
salaries, do not vary directly with the amount of our sales and are difficult to adjust in the short term. As a result,
if sales in a particular quarter are below expectations for that quarter, we may not be able to proportionately
reduce operating expenses for that quarter, resulting in a disproportionate effect on our net income for the
quarter. We maintain a forecasting process that seeks to project sales and align expenses. If we do not correctly
15
forecast sales and control costs or appropriately adjust costs to actual results, our financial performance could
be adversely affected. In addition, if we do not repurchase the number of shares we contemplate pursuant to our
stock repurchase programs, our earnings per share may be adversely affected.
If we engage in mergers or acquisitions of new businesses, or divest, close or consolidate any of our current
businesses, our business will be subject to additional risks.
We have grown our business in part through mergers and acquisitions and may acquire new businesses or
divest, close or consolidate current businesses. Acquisition or divestiture activities may divert attention of
management from operating the existing businesses. We may not effectively evaluate target companies or
assess the risks, benefits and cost of integration of acquisitions, which can be difficult, time-consuming and
dilutive. Acquisitions may not meet our performance and other expectations or may expose us to unexpected or
greater-than-expected liabilities and risks. Divestitures, closings and consolidations also involve risks, such as
significant costs and obligations of closure,
including exposure on leases, owned real estate and other
contractual, employment and severance obligations, and potential liabilities that may arise under law as a result
of the disposition or the subsequent failure of an acquirer. Failure to execute on mergers, acquisitions,
divestitures, closings and consolidations in a satisfactory manner could adversely affect our future results of
operations and financial condition.
Failure to comply with existing laws, regulations and orders or changes in existing laws and regulations could
negatively affect our business operations and financial performance.
We are subject to federal, state, provincial and local laws, rules and regulations in the United States and
abroad, any of which may change from time to time, as well as orders and assurances. These legal, regulatory
and administrative requirements collectively affect multiple aspects of our business, from cost of health care,
workforce management, logistics, marketing, import/export and others. If we fail to comply with these laws,
rules, regulations and orders, we may be subject to fines or other penalties, which could materially adversely
affect our operations and our financial results and condition. Further, GAAP may change from time to time, and
the changes could have material effects on our reported financial results and condition.
We must also comply with new and changing laws and regulations. New legislative and regulatory initiatives
and reforms in the U.S. and internationally could increase our costs of compliance or of doing business and
could adversely affect our operating results, including those involving:
— labor and employment rights, including addressing rights of labor unions;
— consumer protection and financial regulations;
— data protection and privacy;
— climate change, energy or waste, at local, state or federal level;
— internet regulations, including regarding e-commerce, electronic communications and privacy; and
— protection of third party intellectual property rights.
Our results may be materially adversely affected by the outcomes of litigation, legal proceedings and other legal
matters.
We are involved, or may in the future become involved, in various legal proceedings, regulatory reviews and
audits. These may involve local, state and federal government inquiries and investigations; tax, employment, real
estate, tort, consumer and intellectual property litigation; or other disputes. There have been a growing number
of employment-related lawsuits, including class actions, in the United States, and we are subject to these types
of suits.
In addition, we may be subject to investigations and other proceedings by regulatory agencies,
including consumer protection laws, product safety laws, advertising regulations, escheat and employment and
wage and hour regulations. We cannot predict the results of legal and regulatory proceedings with certainty, and
actual results may differ from reserves we establish estimating the probable outcome. Regardless of merit,
litigation can be both time-consuming and disruptive to our operations and may cause significant expense and
diversion of management attention. Legal and regulatory proceedings and investigations could expose us to
16
significant defense costs, fines, penalties and liability to private parties and governmental entities for monetary
recoveries and other amounts and attorneys’ fees and/or require us to change aspects of our operations, any of
which could have a material adverse effect on our business and results of operations.
Tax matters could adversely affect our results of operations and financial condition.
We are subject to income taxes in the United States and numerous foreign jurisdictions. Our effective
income tax rate and future tax liability could be adversely affected by numerous factors including the results of
tax audits and examinations, income before taxes being lower than anticipated in countries with lower statutory
income tax rates and higher than anticipated in countries with higher statutory income tax rates, changes in
income tax rates, changes in transfer pricing, changes in the valuation of deferred tax assets and liabilities,
changes in U.S. tax legislation and regulation, changes in foreign tax laws, regulations and treaties, exposure to
additional tax liabilities, changes in accounting principles and interpretations relating to tax matters, which could
adversely impact our results of operations and financial condition in future periods.
We are subject to the continuous examination of our tax returns and reports by federal, state and local tax
authorities in the U.S. and foreign countries, and the examining authorities may challenge positions we take. We
are engaged in various proceedings with such authorities and in court with respect to assessments, claims,
deficiencies and refunds. We regularly assess the likely outcomes of these proceedings to determine the
adequacy and appropriateness of our provision for income taxes, and increase and decrease our provision as a
result of these assessments. However, the actual results of proceedings as the result of rulings by or settlements
with tax authorities and courts or due to changes in facts, law or legal interpretations, expiration of applicable
statutes of limitations or other resolutions of tax positions could differ from the amounts we have accrued for
such proceedings in either a positive or a negative manner, which could materially affect our effective income tax
rate in a given financial period, the amount of taxes we are required to pay and our results of operations.
In addition, we are subject to tax audits and examinations for payroll, value added, sales- based and other
taxes relating to our businesses.
Our real estate leases generally obligate us for long periods, which subjects us to various financial risks.
We lease virtually all of our store locations, generally for long terms, and either own or lease for long periods
our primary distribution centers and administrative offices. Accordingly, we are subject to the risks associated
with leasing and owning real estate, which can have a material adverse effect on our results, for example, as has
been reflected in our reserve for former operations. While we have the right to terminate some of our leases
under specified conditions by making specified payments, we may not be able to terminate a particular lease if
or when we would like to do so. If we decide to close stores, we are generally required to continue to perform
obligations under the applicable leases, which generally includes, among other things, paying rent and operating
expenses for the balance of the lease term, or paying to exercise rights to terminate, and the performance of any
of these obligations may be expensive. When we assign or sublease leases, we can remain liable on the lease
obligations if the assignee or sublessee does not perform. In addition, when leases for the stores in our ongoing
operations expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all,
which could cause us to close stores.
We depend upon strong cash flows from our operations to supply capital to fund our expansion, operations,
interest and debt repayments, stock repurchases and dividends.
Our business depends upon our operations to generate strong cash flow, and to some extent upon the
availability of financing sources, to supply capital to fund our expansions, general operating activities, stock
repurchases, dividends, interest and debt repayments. Our inability to continue to generate sufficient cash flows
to support these activities, to access cash across our international operations or the lack of availability of
financing in adequate amounts and on appropriate terms when needed could adversely affect our financial
performance including our earnings per share.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
17
ITEM 2. PROPERTIES
We lease virtually all of our over 2,900 store locations, generally for 10 years with options to extend the lease
term for one or more 5-year periods. We have the right to terminate some of these leases before the expiration
date under specified circumstances and some with specified payments.
The following is a summary of our primary owned and leased distribution centers and primary administrative
office locations as of January 28, 2012. Square footage information for the distribution centers represents total
“ground cover” of the facility. Square footage information for office space represents total space occupied.
D I S T R I B U T I O N C E N T E R S
Marmaxx:
T.J. Maxx
Marshalls
HomeGoods
TJX Canada
TJX Europe
Worcester, Massachusetts
Evansville, Indiana
Las Vegas, Nevada
Charlotte, North Carolina
Pittston Township, Pennsylvania
Tolleson, Arizona
Decatur, Georgia
Woburn, Massachusetts
Bridgewater, Virginia
Philadelphia, Pennsylvania
Brownsburg, Indiana
Bloomfield, Connecticut
Brampton, Ontario
Mississauga, Ontario
Wakefield, England
Stoke, England
Walsall, England
Bergheim, Germany
494,000 s.f.—owned
989,000 s.f.—owned
713,000 s.f. shared with
Marshalls—owned
595,000 s.f.—owned
1,017,000 s.f.—owned
303,000 s.f.—leased
780,000 s.f.—owned
472,000 s.f.—leased
562,000 s.f.—leased
1,001,000 s.f.—leased
805,000 s.f.—owned
803,000 s.f.—owned
506,000 s.f.—leased
679,000 s.f.—leased
176,000 s.f.—leased
261,000 s.f.—leased
277,000 s.f.—leased
322,000 s.f.—leased
O F F I C E S P A C E
Corporate, Marmaxx, HomeGoods
TJX Canada
TJX Europe
ITEM 3. LEGAL PROCEEDINGS
Framingham and Westboro,
Massachusetts
1,290,000 s.f.—leased in several
buildings
Mississauga, Ontario
180,000 s.f.—leased
Watford, England
Dusseldorf, Germany
61,000 s.f.—leased
21,000 s.f.—leased
TJX is subject to certain legal proceedings and claims that arise from time to time in the ordinary course of
our business. In addition, TJX is a defendant in several lawsuits filed in federal and state courts in California,
Nevada, New York and Texas brought as putative class or collective actions on behalf of various groups of
current and former salaried and hourly associates in the U.S. The lawsuits allege violations of the Fair Labor
Standards Act and of state wage and hour statutes, including alleged misclassification of positions as exempt
from overtime and alleged entitlement to additional wages for alleged off-the-clock work by hourly employees.
The lawsuits seek unspecified monetary damages,
injunctive relief and attorneys’ fees. TJX is vigorously
defending these claims.
We provide the following additional
information concerning these lawsuits, setting forth the name of the
matter, the court in which the matter is pending, the related case number and the date on which the lawsuit was
filed.
18
Wage and Hour Class Actions: Bunch v. T.J. Maxx of CA, LLC, et al., Superior Court of the State of
California, County of Orange, Case No. 30 2011-00505750-CU-WT-CXC, September 1, 2011; Halton-Hurt et al.
v. The TJX Companies, Inc. d/b/a T.J. Maxx, U.S. District Court, Northern District of Texas, 3:09-CV-02171-N,
November 13, 2009; Ebo v. The TJX Companies, et al., Superior Court of CA, Los Angeles County Superior
Court, BC380575, November 13, 2007.
Exempt Status Cases: Cusenza v. The TJX Companies, Inc., et al., United States District Court for the
Southern District of New York, 1:11-CV-08725, September 15, 2011; Luksza, et. al v. The TJX Companies, Inc.,
U.S. District Court, District of Nevada, 2:11-CV-01359, August 22, 2011; Ahmed v. T.J. Maxx Corp. et al., U.S.
District Court, Eastern District of New York, 10-CV-03609, August 5, 2010; Archibald, et al. v. Marshalls of MA,
Inc., et al., U.S. District Court, Southern District of New York, 09-CV-2323, March 12, 2009; Guillen v. Marshalls
of MA, Inc., et al., U.S. District Court, Southern District of New York, 09-CV-9575, November 18, 2009; Jenkins
v. The TJX Companies,
Inc. et al., U.S. District Court, Eastern District of New York, Case No. CV-10
3753, August 16, 2010.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
19
PART II
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SECURITY HOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
On February 2, 2012, we affected a two-for-one stock split in the form of a stock dividend to shareholders of
record as of January 17, 2012. All share and per share information has been retroactively adjusted to reflect the
stock split.
Price Range of Common Stock
Our common stock is listed on the New York Stock Exchange (Symbol: TJX). The quarterly high and low
sale prices for our common stock for fiscal 2012 and fiscal 2011 are as follows:
Quarter
First
Second
Third
Fourth
Fiscal 2012
Fiscal 2011
High
Low
High
Low
$27.00 $23.48 $24.25 $18.56
$28.39 $24.60 $23.75 $20.04
$30.64 $25.07 $23.31 $19.78
$34.22 $28.60 $24.38 $21.28
The approximate number of common shareholders at January 28, 2012 was 73,000.
Our Board of Directors declared four quarterly dividends of $0.095 per share for fiscal 2012 and $0.075 per
share for fiscal 2011. While our dividend policy is subject to periodic review by our Board of Directors, we are
currently planning to pay a $0.115 per share quarterly dividend in fiscal 2013, subject to declaration and
approval by our Board of Directors, and currently intend to continue to pay comparable dividends in the future.
Information on Share Repurchases
The number of shares of common stock repurchased by TJX during the fourth quarter of fiscal 2012 and the
average price paid per share are as follows:
Total
Number of Shares
Repurchased(1)
(a)
Average Price Paid
Per
Share(2)
(b)
Total Number of Shares
Purchased as Part of a
Publicly Announced
Plan or Program(3)
(c)
Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
be Purchased
Under the Plans or
Programs(4)
(d)
2,173,838
2,876,044
7,435,666
12,485,548
$29.90
$31.34
$33.20
2,173,838
$561,608,609
2,876,044
$471,471,804
7,435,666
$224,596,515
12,485,548
October 30, 2011 through
November 26, 2011
November 27, 2011 through
December 31, 2011
January 1, 2012 through
January 28, 2012
Total:
(1) All shares were repurchased as part of publicly announced stock repurchase programs.
(2) Average price paid per share includes commissions for shares repurchased under stock repurchase programs and is rounded to the nearest
two decimal places.
(3) During the second quarter of fiscal 2012, we completed a $1 billion stock repurchase program approved in February 2010 and initiated
another $1 billion stock repurchase program approved in February 2011. Under this new program, we repurchased a total of 26.4 million
shares of common stock (including 12.5 million shares in the fourth quarter) at a cost of $775 million.
(4) As of January 28, 2012, $225 million remained available for purchase under the current stock repurchase program. In February 2012, we
announced that our Board of Directors had approved an additional $2 billion stock repurchase program.
20
Equity Compensation Plan Information
The following table provides certain information as of January 28, 2012 with respect to our equity
compensation plans:
Plan Category
Equity compensation plans
approved by security holders
Equity compensation plans not
approved by security holders(1)
Total
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
Weighted-average exercise
price of outstanding
options, warrants and
rights
(b)
Number of securities remaining
available for future issuance under
equity compensation plans (excluding
securities reflected in column (a))
(c)
40,943,800
N/A
40,943,800
$18.27
N/A
$18.27
29,595,824
N/A
29,595,824
(1) All equity compensation plans have been approved by shareholders.
For additional
financial statements.
information concerning our equity compensation plans, see Note I to our consolidated
21
ITEM 6. SELECTED FINANCIAL DATA
Amounts in thousands
except per share amounts
Fiscal Year Ended January(1)
2012
2011
2010
2009
2008
Income statement and per share data:
Net sales
Income from continuing operations
Weighted average common shares
for diluted earnings per share
calculation(2)
Diluted earnings per share from
continuing operations(2)
Cash dividends declared per share(2)
Balance sheet data:
Cash and cash equivalents
Working capital
Total assets
Capital expenditures
Long-term obligations(3)
Shareholders’ equity
Other financial data:
After-tax return (continuing
operations) on average
shareholders’ equity
Total debt as a percentage of total
capitalization(4)
Stores in operation at fiscal year end:
In the United States:
T.J. Maxx
Marshalls
HomeGoods
A.J. Wright(5)
In Canada:
Winners
HomeSense
Marshalls
In Europe:
T.K. Maxx
HomeSense
Total
Selling Square Footage at year-end:
In the United States:
T.J. Maxx
Marshalls
HomeGoods
A.J. Wright(5)
In Canada:
Winners
HomeSense
Marshalls
In Europe:
T.K. Maxx
HomeSense
Total
$23,191,455 $21,942,193 $20,288,444 $18,999,505 $18,336,726
$ 1,496,090 $ 1,339,530 $ 1,213,572 $
782,432
914,886 $
(53 Weeks)
773,772
812,826
855,239
884,510
936,092
$
$
1.93 $
0.38 $
1.65 $
0.30 $
1.42 $
0.24 $
1.04 $
0.22 $
0.84
0.18
$ 1,507,112 $ 1,741,751 $ 1,614,607 $
453,527 $
732,612
$ 2,069,209 $ 1,966,406 $ 1,908,870 $
858,238 $ 1,231,301
$ 8,281,605 $ 7,971,763 $ 7,463,977 $ 6,178,242 $ 6,599,934
$
526,987
$
853,460
$ 3,209,290 $ 3,099,899 $ 2,889,276 $ 2,134,557 $ 2,131,245
803,330 $
784,623 $
429,282 $
790,169 $
582,932 $
383,782 $
707,134 $
787,517 $
47.4%
19.7%
44.7%
20.3%
48.3%
21.5%
42.9%
26.7%
35.4%
28.6%
983
884
374
—
216
86
6
332
24
2,905
22,894
22,042
7,391
—
5,008
1,670
162
7,588
402
67,157
923
830
336
142
215
82
—
307
24
2,859
21,611
20,912
6,619
2,874
4,966
1,594
—
7,052
402
66,030
890
813
323
150
211
79
—
263
14
2,743
20,890
20,513
6,354
3,012
4,847
1,527
—
6,106
222
63,471
874
806
318
135
202
75
—
235
7
2,652
20,543
20,388
6,248
2,680
4,647
1,437
—
5,404
107
61,454
847
776
289
129
191
71
—
226
—
2,529
20,025
19,759
5,569
2,576
4,389
1,358
—
5,096
—
58,772
(1) Fiscal 2008 has been adjusted to reclassify the operating results of Bob’s Stores to discontinued operations.
(2) Fiscal 2011 and prior have been restated to reflect the two-for-one stock split announced in January 2012.
(3) Includes long-term debt, exclusive of current installments and capital lease obligation, less portion due within one year.
(4) Total capitalization includes shareholders’ equity, short-term debt, long-term debt and capital lease obligation, including current maturities.
(5) As a result of the consolidation of the A.J. Wright chain, all A.J. Wright stores ceased operations by the end of February 2011.
22
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The discussion that
follows relates to our 52-week fiscal years ended January 28, 2012 (fiscal
2012), January 29, 2011 (fiscal 2011) and January 30, 2010 (fiscal 2010).
O V E R V I E W
The TJX Companies, Inc. is the largest off-price retailer of apparel and home fashions in the U.S. and
worldwide. We sell a rapidly changing assortment of apparel, home fashions and other merchandise through our
four segments: in the U.S., Marmaxx (which operates T.J. Maxx and Marshalls) and HomeGoods; TJX Canada
(which operates Winners, HomeSense and Marshalls); and TJX Europe (which operates T.K. Maxx and
HomeSense). Fiscal 2012 was another record year for us. Highlights of our financial performance for fiscal 2012
include the following:
— In fiscal 2012, we posted strong gains in same store sales, net sales and earnings per share on top of
significant increases in the last two fiscal years.
(cid:129) Same store sales increased 4% in fiscal 2012 over increases of 4% and 6% in the previous two
years. The fiscal 2012 increase reflected an increase in both the value of the average transaction and
an increase in customer traffic as we continued to grow our customer base.
(cid:129) Net sales increased to $23.2 billion for fiscal 2012, up 6% over last year’s comparable period.
(cid:129) Earnings per share for fiscal 2012 were $1.93 per diluted share, up 17% compared to $1.65 per
diluted share in fiscal 2011. Diluted earnings per share, adjusted to exclude the items under
“Adjusted Financial Measures” below, were $1.99 in fiscal 2012 compared to $1.75 in fiscal 2011, up
14%. Foreign currency exchange rates benefited fiscal 2012 earnings by $0.01 per share compared
to a $0.01 negative impact last year.
(cid:129) Our U.S. businesses continued to exceed our expectations in fiscal 2012, posting strong same store
sales increases on top of significant increases in the prior two years and increasing their segment
profits.
(cid:129) Both of our international businesses recovered momentum at the end of fiscal 2012. TJX Europe
returned to a strong same store sales increase in the fourth quarter of fiscal 2012 after issues with the
execution of our off-price fundamentals, as well as growth which we believe was too aggressive and
had led to performance issues that had begun in fiscal 2011. TJX Canada also posted a positive
same store sales increase in the fourth quarter of fiscal 2012 following execution issues in women’s
and, to a lesser extent, children’s categories earlier in the year.
— In fiscal 2012, we continued to drive the growth of our chains.
(cid:129) At January 28, 2012, both stores in operation and selling square footage were up 2% over the end of
fiscal 2011 including the effect of store closures from our A.J. Wright consolidation.
(cid:129) We increased our long-term potential growth estimates in the U.S. for HomeGoods from 600 to 750
stores and believe we have widened the demographic reach of our customer base. We completed
the consolidation of our A.J. Wright business, which has focused our financial and managerial
resources on fewer, larger businesses with higher returns and enhanced the growth prospects of the
overall company.
(cid:129) We introduced the Marshalls chain to Canada, which we believe can ultimately grow to be a 90 to
100 store chain in Canada. We ended fiscal 2012 with six Canadian Marshalls stores and closed our
three StyleSense stores to focus our shoe business on the much larger and more profitable shoe
categories at Winners and Marshalls.
(cid:129) We slowed growth at TJX Europe in fiscal 2012 to permit the business to focus on improving its
operating results and saw improvements by the end of the fiscal year. We continue to believe in the
23
significant growth opportunities for our business in Europe, estimating a total of 750 to 875 stores
long-term, with just our current banners in the countries in which we currently operate.
— We continued to work to strengthen the execution of our business model of buying opportunistically and
close to need, operating with lean inventories and rapid merchandise turns and controlling expenses.
(cid:129) Our fiscal 2012 pre-tax margin (the ratio of pre-tax income to net sales) was 10.4%, a 0.5 percentage
point increase from 9.9% in fiscal 2011, while our adjusted pre-tax margin was 10.7%, a 0.1
fiscal 2011. See “Adjusted Financial
percentage point
Measures” below for definition of adjustments.
increase from an adjusted 10.6% for
(cid:129) Our cost of sales ratio for fiscal 2012 compared to the same period last year improved 0.4
percentage points to 72.7% and improved 0.3 percentage points from 72.9% to 72.6% on an
adjusted basis. The improvements over last year were primarily due to buying and occupancy
expense leverage.
(cid:129) Our selling, general and administrative expense ratio for fiscal 2012 decreased 0.1 percentage points
to 16.8% and, on an adjusted basis, increased 0.2 percentage points from 16.3% to 16.5%.
(cid:129) Our consolidated average per store inventories for our existing businesses, including inventory on
hand at our distribution centers, were up 3% at the end of fiscal 2012.
— We continue to use cash to return value to our shareholders.
(cid:129) During fiscal 2012, we repurchased 49.7 million shares of our common stock for $1.4 billion. Earnings
per share reflect the benefit of the stock repurchase program. On January 31, 2012, our Board of
Directors authorized our 13th stock repurchase program for an additional $2 billion. In the first quarter
of fiscal 2013, we announced our expectation to repurchase approximately $1.2 to $1.3 billion in
fiscal 2013.
(cid:129) We paid quarterly dividends of $0.095 per share, aggregating $275 million, for fiscal 2012. We expect
to pay quarterly dividends for fiscal 2013 of $0.115 per share, or an annual dividend of $0.46, up 21%
over the prior year, subject to the declaration and approval of our Board of Directors.
(cid:129) Our Board of Directors approved a two-for-one stock split of our common stock, reflecting our strong
performance and confidence in our future. (All share and related data have been adjusted to reflect
the split.)
The following is a discussion of our consolidated operating results, followed by a discussion of our segment
operating results.
Net sales: Consolidated net sales for fiscal 2012 totaled $23.2 billion, a 6% increase over $21.9 billion in
fiscal 2011. The increase reflected a 5% increase from new stores, a 4% increase from same store sales and a
1% increase from foreign currency exchange rates, offset in part by a 4% decrease due to the elimination of
sales from stores operating under the A.J. Wright banner. (The fiscal 2012 sales from the converted A.J. Wright
stores are included in new stores.) Consolidated net sales for fiscal 2011 totaled $21.9 billion, an 8% increase
over $20.3 billion in fiscal 2010. The increase reflected a 4% increase from same store sales, a 3% increase from
new stores and a 1% increase from foreign currency exchange rates.
Our consolidated store count and selling square footage as of January 28, 2012 each increased 2% as
compared to the same period last year. These levels of increase, lower than our historical levels, were primarily
due to the 72 A.J. Wright stores that were closed and not converted to other banners. We expect to end fiscal
2013 with 3,055 stores, which would represent a 5% increase in both our consolidated store base and our
selling square footage.
Same store sales increases in the U.S. for fiscal 2012 reflected an increase in both the value of the average
transaction and the number of transactions, which in turn reflected an increase in customer traffic. Same store
sales of our home, dresses, men’s, shoes and accessories categories were particularly strong. Geographically,
same store sales increases in the U.S. were strong throughout most regions with Florida and the Southwest
performing above the consolidated average and the Midwest trailing the consolidated average. Although for the
24
full fiscal year 2012, the same store sales increase for TJX Europe was well below the consolidated average, and
same store sales at TJX Canada decreased from the prior year, both Europe and Canada posted strong same
store sales gains in the fourth quarter of fiscal 2012.
The 4% same store sales increase in fiscal 2011 was driven entirely by growth in the number of transactions,
with the value of the average transaction down slightly for the year. Juniors, jewelry and home performed
particularly well in fiscal 2011. Geographically, in the U.S., same store sales were strong throughout the country
with the West Coast and Southwest above the consolidated average and the Northeast below the consolidated
average. The same store sales increase in Canada was in line with the consolidated average, while same store
sales decreased in Europe.
We define same store sales to be sales of those stores that have been in operation for all or a portion of two
consecutive fiscal years, or in other words, stores that are starting their third fiscal year of operation. We classify
a store as a new store until it meets the same store sales criteria. We determine which stores are included in the
same store sales calculation at the beginning of a fiscal year and the classification remains constant throughout
that year, unless a store is closed. We calculate same store sales results by comparing the current and prior year
weekly periods that are most closely aligned. Relocated stores and stores that have increased in size are
generally classified in the same way as the original store, and we believe that the impact of these stores on the
consolidated same store percentage is immaterial. Same store sales of our foreign segments are calculated on a
constant currency basis, meaning we translate the current year’s same store sales of our foreign segments at
the same exchange rates used in the prior year. This removes the effect of changes in currency exchange rates,
which we believe is a more accurate measure of segment operating performance.
The following table sets forth our consolidated operating results from continuing operations as a percentage
of net sales on an as reported and as adjusted basis:
Percentage of Net Sales
Fiscal Year
2012
Percentage of Net Sales
Fiscal Year
2011
Percentage of Net Sales
Fiscal Year
2010***
As reported As adjusted* As reported As adjusted* As reported As adjusted*
100.0%
100.0% 100.0% 100.0% 100.0% n/a
72.7
16.8
—
0.2
72.6
16.5
—
0.2
73.1
16.9
(0.1)
0.2
72.9
16.3
—
0.2
73.8
16.4
—
0.2
n/a
n/a
n/a
n/a
Net sales
Cost of sales, including buying and
occupancy costs
Selling, general and administrative
expenses
Provision (credit) for Computer Intrusion
related expenses
Interest expense, net
Income from continuing operations
before provision for income taxes**
10.4%
10.7%
9.9%
10.6%
9.6% n/a
Diluted earnings per share-continuing
operations
$ 1.93
$ 1.99
$ 1.65
$ 1.75
$ 1.42
n/a
* See “Adjusted Financial Measures” below.
** Figures may not foot due to rounding.
*** There were no adjustments for fiscal 2010.
Impact of foreign currency exchange rates: Our operating results are affected by foreign currency
exchange rates as a result of changes in the value of the U.S. dollar in relation to other currencies. Two ways in
which foreign currency affects our reported results are as follows:
— Translation of foreign operating results into U.S. dollars: In our financial statements we translate the
operations of TJX Canada and TJX Europe from local currencies into U.S. dollars using currency rates in
effect at different points in time. Significant changes in foreign exchange rates between comparable prior
periods can result in meaningful variations in consolidated net sales, net income and earnings per share
growth as well as the net sales and operating results of these segments. Currency translation generally
does not affect operating margins, or affects them only slightly, as sales and expenses of the foreign
operations are translated at essentially the same rates within a given period.
25
— Inventory hedges: We routinely enter into inventory-related hedging instruments to mitigate the impact of
foreign currency exchange rates on merchandise margins when our divisions, principally in Europe and
Canada, purchase goods in currencies other than their local currencies. As we have not elected “hedge
accounting” for these instruments as defined by GAAP, we record a mark-to-market gain or loss on the
hedging instruments in our results of operations at the end of each reporting period. In subsequent
periods, the income statement impact of the mark-to-market adjustment is effectively offset when the
inventory being hedged is sold. While these effects occur every reporting period, they are of much greater
magnitude when there are sudden and significant changes in currency exchange rates during a short
period of time. The mark-to-market adjustment on these hedges does not affect net sales, but it does
affect the cost of sales, operating margins and earnings we report.
Cost of sales, including buying and occupancy costs: Cost of sales, including buying and occupancy
costs, as a percentage of net sales was 72.7% in fiscal 2012, 73.1% in fiscal 2011 and 73.8% in fiscal 2010. The
improvement in this ratio for fiscal 2012 was due to expense leverage on buying and occupancy costs
(particularly at Marmaxx and HomeGoods) partially offset by lower merchandise margins at TJX Europe and TJX
Canada.
The improvement in this ratio for fiscal 2011 reflected improved consolidated merchandise margin, which
increased 0.5 percentage points over the prior year, along with expense leverage on the 4% same store sales
increase, partially offset by a 0.2 percentage point negative impact from the A.J. Wright segment loss in the
fiscal 2011 fourth quarter arising from the A.J. Wright consolidation. Merchandise margin improvement was
driven by our strategy of operating with leaner inventories and buying closer to need,
leading to lower
markdowns compared to the prior year.
Selling, general and administrative expenses: Selling, general and administrative expenses as a
percentage of net sales were 16.8% in fiscal 2012, 16.9% in fiscal 2011 and 16.4% in fiscal 2010. The A.J.
Wright consolidation had a significant impact on this ratio in fiscal 2012 and fiscal 2011, increasing the ratio by
0.3 percentage points in fiscal 2012 and 0.6 percentage points in fiscal 2011. Excluding the impact of the A.J.
Wright consolidation, selling, general and administrative expenses as a percentage of net sales increased by 0.2
percentage points in fiscal 2012 and decreased 0.1 percentage points in fiscal 2011. The increase in the
adjusted selling, general and administrative expense ratio in fiscal 2012 compared to fiscal 2011 was due to
increased general corporate expenses, primarily investment in new systems, talent and e-commerce, costs
associated with a voluntary retirement program and fourth quarter charges and write-offs at TJX Canada and
TJX Europe (see segment discussions below), offset in part by expense leverage on strong same store sales,
particularly at HomeGoods.
The decrease in selling, general and administrative expenses in fiscal 2011 as a percentage of net sales, on
an adjusted basis, compared to fiscal 2010 reflected the benefit of cost reduction programs, a reduction in
incentive compensation versus the prior year and expense leverage on strong same store sales.
Interest expense, net: Interest expense, net was an expense of $35.6 million for fiscal 2012, $39.1 million
for fiscal 2011 and $39.5 million for fiscal 2010. The components of interest expense, net for the last three fiscal
years are summarized below:
Dollars in thousands
Interest expense
Capitalized interest
Interest (income)
Interest expense, net
Fiscal Year Ended January
2011
2012
2010
$ 49,276
(2,593)
(11,035)
$49,014
—
(9,877)
$49,278
(758)
(9,011)
$ 35,648
$39,137
$39,509
Gross interest expense for both fiscal 2012 and fiscal 2011 was essentially flat to the respective prior
periods.
Income taxes: Our effective annual income tax rate was 38.0% in fiscal 2012, 38.1% in fiscal 2011 and
37.8% in fiscal 2010. The decrease in the effective income tax rate for fiscal 2012 as compared to fiscal 2011 is
primarily attributable to a reduction in tax reserves related to the resolution of U.S. Federal tax audits, partially
offset by an increase in state and federal tax reserves, for a net decrease in the provision.
26
The increase in our effective income tax rate for fiscal 2011 as compared to fiscal 2010 is primarily
attributable to the effects of repatriation of cash from Europe and an increase in our state tax reserves, partially
offset by the finalization of an advance pricing agreement between Canada and the United States (related to our
intercompany transfer pricing) and a favorable Canadian court ruling regarding withholding taxes.
We anticipate our effective annual income tax rate for fiscal 2013 will increase to 38.5% primarily due to the
expiration of the U.S. Work Opportunity Tax Credit legislation and the absence of the fiscal 2012 net benefit due
to a reduction in our tax reserves.
Income from continuing operations and diluted earnings per share from continuing operations:
Income from continuing operations was $1.5 billion in fiscal 2012, a 12% increase over $1.3 billion in fiscal 2011,
which in turn was a 10% increase over $1.2 billion in fiscal 2010.
Fiscal 2012 diluted earnings per share from continuing operations were $1.93. Our adjusted diluted earnings
per share for fiscal 2012 were $1.99, which exclude the negative impact of $0.04 of costs related to closing the
A.J. Wright stores not closed in fiscal 2011 and $0.02 of costs to convert and re-open A.J. Wright stores under
other banners.
Fiscal 2011 diluted earnings per share from continuing operations were $1.65. Our adjusted diluted earnings
per share for fiscal 2011 were $1.75, which exclude the negative effect of the fiscal 2011 fourth quarter segment
loss for A.J. Wright arising from closing A.J. Wright, which reduced earnings per share by $0.11, offset in part by
a $0.01 per share benefit for a reduction in the provision for the Computer Intrusion related costs.
Foreign currency exchange rates also affected the comparability of our results. When comparing fiscal 2012
to fiscal 2011, foreign currency exchange rates benefited fiscal 2012 earnings per share by $0.01 per share
compared with a $0.01 per share negative impact in fiscal 2011. When comparing fiscal 2011 to fiscal 2010,
foreign currency exchange rates benefited fiscal 2011 earnings per share by $0.02 per share compared to an
immaterial impact in fiscal 2010.
In addition, our weighted average diluted shares outstanding affect the comparability of earnings per share.
Our stock repurchases benefit our earnings per share. We repurchased 49.7 million shares of our stock at a cost
of $1.4 billion in fiscal 2012, 55.1 million shares of our stock at a cost of $1.2 billion in fiscal 2011, and
54.0 million shares at a cost of $950 million in fiscal 2010.
Discontinued operations and net income: In fiscal 2011, we had a net gain from discontinued operations
reflecting an after-tax benefit of $3.6 million (which did not impact diluted earnings per share) as a result of a $6
million pre-tax reduction of the estimated cost of settling lease-related obligations of former businesses. Net
income, which includes the impact of these discontinued operations, was $1.5 billion, or $1.93 per share, for
fiscal 2012, $1.3 billion, or $1.65 per share, for fiscal 2011, and $1.2 billion, or $1.42 per share, for fiscal 2010.
Adjusted Financial Measures: In addition to presenting financial results in conformity with GAAP, we are
also presenting them on an “adjusted” basis. We adjusted them to exclude:
— from the fiscal 2012 results, the costs related to the A.J. Wright consolidation, including closing costs and
additional operating losses related to the A.J. Wright stores closed in fiscal 2012 and the costs incurred
by the Marmaxx and HomeGoods segments to convert former A.J. Wright stores to their banners and
hold grand re-opening events for these stores, and
— from the fiscal 2011 results, the operating loss of the A.J. Wright segment for the fourth quarter of fiscal
2011, which included a majority of the costs related to closing the A.J. Wright business, and the benefit of
a reduction to the provision for the Computer Intrusion which occurred over four years ago.
These adjusted financial results are non-GAAP financial measures. We believe that the presentation of
adjusted financial results provides additional information on comparisons between periods including underlying
trends of our business by excluding these items that affect overall comparability. We use these adjusted
measures in making financial, operating and planning decisions and in evaluating our performance, and our
Board of Directors use them in assessing our business and making compensation decisions. Non-GAAP
financial measures should be considered in addition to, and not as an alternative for, our reported results
prepared in accordance with GAAP.
27
Reconciliations of each of the adjusted financial measures to the financial measures in accordance with
GAAP are provided below.
Fiscal year ended
2012
As reported
% of Net
Fiscal year ended
2012
As adjusted
% of Net
Sales
72.6%
27.4%
16.5%
10.7%
% of Net
Sales
72.9%
27.1%
16.3%
10.6%
Dollars in millions, except per share data
U.S.$
Sales Adjustments
U.S.$*
Net sales
Cost of sales, including buying and occupancy costs
Gross profit margin
Selling, general and administrative expenses
Income from continuing operations before provision for
income taxes
Diluted earnings per share-continuing operations
$23,191
16,854
—
3,890
$ 2,411
$ 1.93
72.7%
27.3%
16.8%
$
(9)(1) $23,182
(16)(2) 16,838
—
3,828
(63)(3)
10.4% $
69
$ 2,481
$ 0.06(4) $ 1.99
Fiscal year ended
2011
As reported
% of Net
Fiscal year ended
2011
As adjusted
Dollars in millions, except per share data
U.S.$
Sales Adjustments
U.S.$*
Net sales
Cost of sales, including buying and occupancy costs
Gross profit margin
Selling, general and administrative expenses
Provision (credit) for Computer Intrusion related costs
Income from continuing operations before provision for
income taxes
Diluted earnings per share-continuing operations
* Figures may not cross-foot due to rounding.
(1) Sales of A.J. Wright stores prior to closing ($9 million).
$21,942
16,040
—
3,710
(12)
$ 2,164
$ 1.65
73.1%
26.9%
16.9%
(0.1)%
$ (279)(5) $21,663
(242)(6) 15,798
—
3,533
—
(177)(7)
12(8)
9.9% $ 129
$ 2,293
$ 0.10(9) $ 1.75
(2) Cost of sales, including buying and occupancy costs of A.J. Wright prior to closing ($15 million) and applicable conversion costs of A.J. Wright
stores converted to Marmaxx and HomeGoods banners ($1 million).
(3) Operating costs of A.J. Wright prior to closing and costs to close A.J. Wright stores not converted to other banners ($44 million) and
applicable conversion and grand re-opening costs for A.J. Wright stores converted to Marmaxx and HomeGoods banners ($19 million).
(4) Impact on earnings per share of operating loss and closing costs of A.J. Wright stores ($0.04 per share) and conversion and grand re-opening
costs at Marmaxx and HomeGoods ($0.02 per share). Effective tax rate used in computation.
(5) Sales associated with A.J. Wright prior to closing ($279 million).
(6) Cost of sales, including buying and occupancy costs associated with closing A.J. Wright stores, distribution centers and home office ($242
million).
(7) Operating costs of A.J. Wright prior to closing and costs to close A.J. Wright stores not being converted to other banners ($177 million).
(8) Reduction of the provision for Computer Intrusion related costs, primarily as a result of insurance proceeds and adjustments to our remaining
reserve ($12 million).
(9) Impact on earnings per share of operating losses and closing costs of A.J. Wright stores ($0.11 per share) and impact on earnings per share
of the reduction to the provision for Computer Intrusion related costs ($0.01 per share). Effective tax rate used in computation.
The costs to convert A.J. Wright stores to other banners and to hold grand re-openings affected our
Marmaxx and HomeGoods segments in fiscal 2012. A reconciliation of adjusted segment margin, a non-GAAP
financial measure, to segment margin as reported in accordance with GAAP for each of these segments is as
follows:
Marmaxx segment profit
HomeGoods segment profit
Fiscal 2012
As reported
Fiscal 2012
As adjusted
Fiscal 2011
As reported
US$ in
Millions
$2,073
$ 234
% of Net
Sales Adjustments
US$ in
Millions*
% of Net
Sales
US$ in
Millions
% of Net
Sales
13.5%
10.4%
$17(1) $2,090
$ 3(2) $ 238
13.6% $1,876
10.6% $ 187
13.3%
9.5%
* Figures may not cross-foot due to rounding.
(1) Conversion costs and grand re-opening costs for A.J. Wright stores converted to a T.J. Maxx or Marshalls store.
(2) Conversion costs and grand re-opening costs for A.J. Wright stores converted to a HomeGoods store.
28
Segment information: We operate four business segments. In the United States, our two segments are
Marmaxx (T.J. Maxx and Marshalls stores) and HomeGoods. Our TJX Canada segment operates our stores in
Canada (Winners, HomeSense and Marshalls), and our TJX Europe segment operates our stores in Europe (T.K.
Maxx and HomeSense). A. J. Wright ceased to be a segment following its consolidation. We evaluate the
performance of our segments based on “segment profit or loss,” which we define as pre-tax income or loss
before general corporate expense and interest expense. “Segment profit or loss,” as we define the term, may not
be comparable to similarly titled measures used by other entities. The terms “segment margin” or “segment
profit margin” are used to describe segment profit or loss as a percentage of net sales.
Presented below is selected financial information related to our business segments:
U . S . S e g m e n t s :
Marmaxx
Dollars in millions
Net sales
Segment profit
Segment profit as a percentage of net sales
Adjusted segment profit as a percentage of net sales*
Percent increase in same store sales
Stores in operation at end of period
T.J. Maxx
Marshalls
Total Marmaxx
Selling square footage at end of period (in thousands)
T.J. Maxx
Marshalls
Total Marmaxx
* See reconciliation under “Adjusted Financial Measures.”
Fiscal Year Ended January
2012
2011
2010
$15,367.5 $14,092.2 $13,270.9
$ 2,073.4 $ 1,876.0 $ 1,588.5
13.5%
13.6%
5%
983
884
13.3%
n/a
4%
923
830
12.0%
n/a
7%
890
813
1,867
1,753
1,703
22,894
22,042
44,936
21,611
20,912
42,523
20,890
20,513
41,403
Net sales at Marmaxx increased 9% in fiscal 2012 as compared to fiscal 2011. Same store sales for
Marmaxx were up 5%, on top of a 4% increase in the prior year.
Same store sales growth at Marmaxx for fiscal 2012 was driven by a balanced increase in the value of the
average transaction and an increase in customer traffic. Customer transactions grew in fiscal 2012 on top of a
significant increase in fiscal 2011. The categories that posted particularly strong same store sales increases in
fiscal 2012 were dresses, men’s, shoes and accessories. Geographically, there were strong same store sales
increases throughout the country, with Florida and the Southwest the strongest and the Midwest below the
chain average.
Segment margin was up 0.2 percentage points to 13.5% for fiscal 2012 compared to 13.3% for fiscal 2011,
primarily due to expense leverage (particularly occupancy costs, which improved by 0.3 percentage points) on
strong same store sales growth. This improvement was offset in part by slightly lower merchandise margins and
the store conversion and grand re-opening costs of former A.J. Wright stores converted to T.J. Maxx or
Marshalls. Adjusted segment profit margin, which excludes the A.J. Wright conversion costs, increased 0.3
percentage points to 13.6% for fiscal 2012.
Segment margin increased to 13.3% in fiscal 2011 from 12.0% in fiscal 2010. This increase in segment
margin for fiscal 2011 was primarily due to an increase in merchandise margins of 0.8 percentage points, largely
as a result of lower markdowns. In addition, the 4% increase in same store sales for this period provided
expense leverage as a percentage of net sales, particularly occupancy costs, which improved by 0.2 percentage
points.
In fiscal 2013, we expect to open approximately 85 new Marmaxx stores (net of closings) and increase
selling square footage by 4%.
29
HomeGoods
Dollars in millions
Net sales
Segment profit
Segment profit as a percentage of net sales
Adjusted segment profit as a percentage of net sales*
Percent increase in same store sales
Stores in operation at end of period
Selling square footage at end of period (in thousands)
* See reconciliation under “Adjusted Financial Measures.”
Fiscal Year Ended January
2012
2011
2010
$2,244.0 $1,958.0 $1,794.4
$ 234.4 $ 186.5 $ 137.5
10.4%
10.6%
6%
374
7,391
9.5%
n/a
6%
7.7%
n/a
9%
336
6,619
323
6,354
HomeGoods’ net sales increased 15% in fiscal 2012 compared to fiscal 2011. Same store sales increased
6% in fiscal 2012, on top of a strong same store sales increase of 6% in fiscal 2011 resulting from a strong
increase in customer traffic along with an increase in the value of the average transaction. Segment profit margin
for fiscal 2012 was 10.4% up from 9.5% for fiscal 2011. The increase was due to expense leverage on the 6%
same store sales increase and an increase in merchandise margins (primarily due to lower markdowns), partially
offset by the conversion and grand re-opening costs of former A.J. Wright stores converted to HomeGoods.
Adjusted segment profit margin for fiscal 2012 excluding the A.J. Wright conversion costs increased 1.1
percentage points to 10.6%.
HomeGoods’ net sales increased 9% in fiscal 2011 compared to fiscal 2010. Same store sales increased
6% in fiscal 2011, driven by continued strong growth in customer traffic, compared to a same store sales
increase of 9% in fiscal 2010. Segment margin of 9.5% was up from 7.7% for fiscal 2010, due to increased
merchandise margins, driven by decreased markdowns, levering of expenses on the 6% same store sales and
operational efficiencies. The merchandise margin improvements were driven by efforts to manage this business
with much lower inventory levels than in previous years and by increasing our inventory turns.
In fiscal 2013, we plan a net increase of approximately 40 HomeGoods stores and plan to increase selling
square footage by 11%.
A.J. Wright
We completed the consolidation of the A.J. Wright division in the first quarter of fiscal 2012, closing the
remaining stores not being converted to other banners. These closing costs (primarily lease-related obligations)
and A.J. Wright operating losses incurred in the first quarter of fiscal 2012 were reported as an A.J. Wright
segment loss in the first quarter of fiscal 2012.
Due to the anticipated migration of customers to other chains, A.J. Wright was not treated as a discontinued
operation for financial reporting purposes.
Dollars in millions
Net sales
Segment profit (loss)
Percent increase in same store sales
Stores in operation at end of period
Selling square footage at end of period (in thousands)
Fiscal Year Ended January
2012
2010
2011
$ 9.2 $ 888.4 $779.8
$(49.3) $(130.0) $ 12.6
6%
—
—
142
— 2,874
9%
150
3,012
30
A majority of the costs related to the closing of the A.J. Wright business were recorded in the fourth quarter
of fiscal 2011. The operating results of the A.J. Wright segment for the full year of fiscal 2011 include a fourth
quarter loss of $140.6 million, which includes the following:
Dollars in thousands
Fixed asset impairment charges—Non cash
Severance and termination benefits
Lease obligations and other closing costs
Operating losses
Total segment loss
I n t e r n a t i o n a l S e g m e n t s :
TJX Canada
U.S. Dollars in millions
Net sales
Segment profit
Segment profit as a percentage of net sales
Percent (decrease) increase in same store sales
Stores in operation at end of period
Winners
HomeSense
Marshalls
Total
Selling square footage at end of period (in thousands)
Winners
HomeSense
Marshalls
Total
Fiscal 2011
Fourth Quarter
$ 82,589
25,400
11,700
20,912
$140,601
Fiscal Year Ended January
2011
2012
2010
$2,680.1 $2,510.2 $2,167.9
$ 348.0 $ 352.0 $ 255.0
13.0% 14.0% 11.8%
2%
(1)%
4%
216
86
6
308
5,008
1,670
162
6,840
215
82
—
297
4,966
1,594
—
6,560
211
79
—
290
4,847
1,527
—
6,374
Net sales for TJX Canada increased 7% in fiscal 2012 as compared to fiscal 2011. Currency translation
benefited fiscal 2012 sales growth by approximately 4 percentage points, as compared to the same period last
year. Same store sales decreased 1% in fiscal 2012 compared to an increase of 4% in fiscal 2011 largely due to
execution issues in women’s and, to a lesser extent, children’s categories. Our efforts to address these issues
showed improved results in the fourth quarter of fiscal 2012 with same store sales growth of 3%.
Segment profit for fiscal 2012 decreased to $348.0 million, due to weak sales volume in the first three
quarters (mitigated in part by strong inventory and expense management) and, to a lesser extent, a fourth
quarter charge of $6 million for the closure of our StyleSense stores. These decreases in segment profit more
than offset a $10 million benefit from foreign currency translation and a $4 million benefit from mark-to-market
adjustment on inventory-related hedges. The decrease in segment margin for fiscal 2012 as compared to fiscal
2011 was due to expense deleverage and lower merchandise margins, which more than offset the favorable
change in the mark-to-market adjustment of our inventory-related hedges.
Net sales for TJX Canada increased 16% in fiscal 2011 as compared to fiscal 2010. Currency translation
benefited fiscal 2011 sales growth by approximately 9 percentage points, as compared to the same period in the
prior year. Same store sales were up 4% in fiscal 2011 compared to an increase of 2% in fiscal 2010. Same
store sales of men’s apparel, dresses and home fashions were above the segment average for fiscal 2011.
Segment profit for fiscal 2011 increased to $352 million, compared to $255 million in fiscal 2010. The impact
of foreign currency translation increased segment profit by $25 million in fiscal 2011 as compared to fiscal 2010.
The mark-to-market adjustment on inventory-related hedges reduced segment profit in fiscal 2011 by $7 million
compared to an immaterial impact in fiscal 2010. Segment margin increased 2.2 percentage points to 14.0% in
31
fiscal 2011, compared to 11.8% in fiscal 2010. The segment margin improvement in fiscal 2011 was driven by a
strong improvement
in merchandise margins, offset by the unfavorable change in the mark-to-market
adjustment of our inventory hedges, which reduced fiscal 2011 segment margin by 0.3 percentage points.
We opened our first six Marshalls stores in Canada in fiscal 2012. We expect to add a net of 15 stores in
Canada in fiscal 2013 and plan to increase selling square footage by 5%.
TJX Europe
U.S. Dollars in millions
Net sales
Segment profit
Segment profit as a percentage of net sales
Percent increase (decrease) in same store sales
Stores in operation at end of period
T.K. Maxx
HomeSense
Total
Selling square footage at end of period (in thousands)
T.K. Maxx
HomeSense
Total
Fiscal Year Ended January
2011
2012
2010
$2,890.7 $2,493.5 $2,275.4
$
75.8 $ 164.0
68.7 $
2.4%
2%
3.0%
(3)%
7.2%
5%
332
24
356
7,588
402
7,990
307
24
331
7,052
402
7,454
263
14
277
6,106
222
6,328
Net sales for TJX Europe increased 16% in fiscal 2012 to $2.9 billion compared to $2.5 billion in fiscal 2011.
Currency translation benefited fiscal 2012 sales growth by 4 percentage points. Same store sales were up 2% in
fiscal 2012 compared to a decrease of 3% in fiscal 2011. TJX Europe ended fiscal 2012 by posting a fourth
quarter same store sales increase of 10%. We believe the improvement at the end of fiscal 2012 reflected the
benefits of our strategy of slowing growth in Europe and re-focusing on execution of our off-price fundamentals.
Segment profit decreased to $68.7 million for fiscal 2012, and segment profit margin decreased to 2.4%. For
fiscal 2012, the impact of foreign currency translation and the mark-to-market adjustment on inventory-related
hedges was immaterial. Our fiscal 2012 results reflect aggressive markdowns, primarily taken in the first quarter
to clear inventory and adjust our merchandise mix. In addition, during the fourth quarter of fiscal 2012 TJX
Europe incurred charges for the closing of an office facility and the write-off of certain technology systems and
other adjustments, which contributed to the decrease in segment profit and segment margin. Despite these
fourth quarter charges, segment profit for the fourth quarter of fiscal 2012 nearly doubled reflecting the effects of
the changes we made to address the execution issues that adversely affected fiscal 2011 and earlier parts of
fiscal 2012.
Net sales for TJX Europe increased in fiscal 2011 to $2.5 billion compared to $2.3 billion in fiscal 2010.
Currency translation negatively impacted the fiscal 2011 results, reducing net sales by $86 million. Same store
sales were down 3% in fiscal 2011 compared to a 5% increase in fiscal 2010. Segment profit decreased to
$75.8 million for fiscal 2011, and segment profit margin decreased to 3.0%. Issues with the execution of our
off-price fundamentals as well as growth, which we believe was too aggressive, led to TJX Europe’s below-plan
sales and segment profit in fiscal 2011.
In fiscal 2013, we plan to keep our growth rate modest with a net of 10 new T.K. Maxx stores in Europe,
expanding selling square footage by 2%. Longer term, we continue to believe that TJX Europe holds significant
growth potential for our Company.
32
General Corporate Expense:
Dollars in millions
General corporate expense
Fiscal Year Ended January
2012
2010
2011
$228.3 $168.7 $166.4
General corporate expense for segment reporting purposes represents those costs not specifically related to
the operations of our business segments and is included in selling, general and administrative expenses. The
increase in general corporate expense for fiscal 2012 was primarily due to our investments in systems and
technology, talent and associate training expenses, costs related to our e-commerce initiative and costs related
to a fourth quarter voluntary retirement program and an executive separation agreement. Collectively, these
items accounted for approximately $40 million of the increase in general corporate expenses for fiscal 2012.
Fiscal 2011 general corporate expense was relatively flat to the prior year.
L I Q U I D I T Y A N D C A P I T A L R E S O U R C E S
Operating activities:
Net cash provided by operating activities was $1,916 million in fiscal 2012, $1,976 million in fiscal 2011 and
$2,272 million in fiscal 2010. The cash generated from operating activities in each of these fiscal years was
largely due to operating earnings.
Operating cash flows for fiscal 2012 decreased $60 million compared to fiscal 2011. Net income plus the
non-cash impact of depreciation and impairment charges provided cash of $1,995 million in fiscal 2012
compared to $1,897 in fiscal 2011, an increase of $98 million. The change in merchandise inventory, net of the
related change in accounts payable, resulted in a use of cash of $224 million in fiscal 2012, compared to $48
million in fiscal 2011. The increase in inventory was in our distribution centers, primarily due to higher pack-away
inventory as we continued to take advantage of market opportunities. The average inventory in our stores at the
end of fiscal 2012 was below fiscal 2011 levels. The additional cash outlay for the net change in inventory and
accounts payable is due to the timing of payments. The impact of the changes in all other assets and liabilities,
which reduced operating cash flows by $77 million year-over-year, was more than offset by the favorable impact
on cash flows of $94 million due to a higher deferred income tax provision.
Operating cash flows for fiscal 2011 decreased $295 million compared to fiscal 2010. Net income plus the
non-cash impact of depreciation and impairment charges provided cash of $1,897 million in fiscal 2011
compared to $1,659 in fiscal 2010, an increase of $238 million. The change in merchandise inventory, net of the
related change in accounts payable, resulted in a use of cash of $48 million in fiscal 2011, compared to a source
of cash of $345 million in fiscal 2010. Although we continued to operate with leaner inventories throughout fiscal
2011, our strategy of being more aggressive with managing inventories had a much greater impact on cash
flows in fiscal 2010. In addition, the increase in inventory in fiscal 2011 reflected our business growth, as well as
a year-end increase in packaway merchandise to take advantage of market opportunities. Changes in current
income taxes payable/recoverable unfavorably impacted fiscal 2011 cash flows, as compared to fiscal 2010, by
$203 million due to the timing of tax payments. The change in accrued expenses and other liabilities provided
cash of $78 million in fiscal 2011 compared to cash provided of $31 million in fiscal 2010.
We have a reserve for the remaining future obligations of operations we have closed, sold or otherwise disposed
of including, among others, Bob’s Stores and A.J. Wright. The majority of these obligations relate to real estate leases
associated with these operations. The reserve balance was $45.4 million at January 28, 2012 and $54.7 million at
January 29, 2011. The cash flows required to satisfy obligations of former operations are classified as a reduction in
cash provided by operating activities. See Note C to the consolidated financial statements for more information.
Investing activities:
Our cash flows for investing activities include capital expenditures for the last three fiscal years as set forth
in the table below:
In millions
New stores
Store renovations and improvements
Office and distribution centers
Capital expenditures
33
Fiscal Year Ended January
2012
2010
2011
$211.6 $196.3 $127.8
206.8
301.0
94.7
209.8
$803.3 $707.1 $429.3
319.8
271.9
We expect that we will spend approximately $875 million to $900 million on capital expenditures in fiscal
2013,
including approximately $415 million for our offices and distribution centers (including information
systems) to support growth, $305 million for store renovations and $180 million for new stores. We plan to fund
these expenditures through internally generated funds.
We also purchased short-term investments that had initial maturities in excess of 90 days which, per our
policy, are not classified as cash on the balance sheets presented. In fiscal 2012, we purchased $152 million of
such short-term investments, compared to $120 million in fiscal 2011. Additionally, $133 million of such short-
term investments were sold or matured during fiscal 2012 compared to $180 million last year.
Financing activities:
Cash flows from financing activities resulted in net cash outflows of $1,336 million in fiscal 2012, $1,224
million in fiscal 2011 and $584 million in fiscal 2010.
Under our stock repurchase programs, we spent $1,370 million to repurchase 49.7 million shares of our
stock in fiscal 2012, $1,201 million to repurchase 55.1 million shares in fiscal 2011 and $950 million to
repurchase 54.0 million shares in fiscal 2010, all of which were retired. We record the purchase of our stock on a
settlement basis, and the amounts reflected in the financial statements may vary from the above due to the
timing of the settlement of our repurchases. All share information disclosed is on a post-split basis. As of
January 28, 2012, $225 million was available for purchase under the stock repurchase program approved in
February 2011. On January 31, 2012, our Board of Directors approved an additional repurchase program
authorizing the repurchase of up to an additional $2 billion of TJX stock. We currently plan to repurchase
approximately $1.2 billion to $1.3 billion of stock under our stock repurchase programs in fiscal 2013. We
determine the timing and amount of repurchases based on our assessment of various factors including excess
cash flow, liquidity, economic and market conditions, our assessment of prospects for our business, legal
requirements and other factors. The timing and amount of these purchases may change.
In April 2009, we issued $375 million aggregate principal amount of 6.95% ten-year notes.
Cash flows from financing activities for fiscal 2010 include the net proceeds of $774 million from two debt
offerings.
In
connection with this issuance, we called for the redemption of our zero coupon convertible subordinated notes,
virtually all of which were converted into 30.2 million shares of common stock. We used the proceeds of the
6.95% notes to repurchase additional shares of common stock under our stock repurchase program. In July
2009, we issued $400 million aggregate principal amount of 4.20% six-year notes. We used a portion of the
proceeds of this offering to refinance our C$235 million term credit facility in August 2009, prior to its scheduled
maturity, and used the remainder, together with funds from operations, to pay our 7.45% notes on their
scheduled maturity date in December 2009.
We declared quarterly dividends on our common stock which totaled $0.38 per share in fiscal 2012, $0.30
per share in fiscal 2011 and $0.24 per share in fiscal 2010. Cash payments for dividends on our common stock
totaled $275 million in fiscal 2012, $229 million in fiscal 2011 and $198 million in fiscal 2010. We announced our
intention to increase the quarterly dividend on our common stock to $0.115 per share, effective with the dividend
to be declared in April 2012 and payable in May 2012, subject to the approval and declaration of our Board of
Directors. We also received proceeds from the exercise of employee stock options of $219 million in fiscal 2012,
$176 million in fiscal 2011 and $170 million in fiscal 2010.
We traditionally have funded our seasonal merchandise requirements primarily through cash generated from
operations, short-term bank borrowings and the issuance of short-term commercial paper. We also have $1
billion in revolving credit facilities, which are described in Note K to the consolidated financial statements. We
believe our existing cash and cash equivalents, internally generated funds and our revolving credit facilities are
more than adequate to meet our operating needs over the next fiscal year.
34
Contractual obligations: As of January 28, 2012, we had payment obligations (including current
installments) under long-term debt arrangements, leases for property and equipment and purchase obligations
requiring cash outflows as follows (in thousands):
Tabular Disclosure of Contractual Obligations
Long-term debt obligations including estimated
interest and current installments
Operating lease commitments
Capital lease obligation
Purchase obligations
Payments Due by Period
Total
Less Than
1 Year
1-3
Years
3-5
Years
More Than
5 Years
42,863 $
$ 1,037,669 $
6,985,102
15,322
2,486,221
1,124,042
3,912
2,466,278
85,725 $ 468,925 $ 440,156
2,361,779
—
43
1,500,107
3,586
210
1,999,174
7,824
19,690
Total Obligations
$10,524,314 $3,637,095 $2,112,413 $1,972,828 $2,801,978
The long-term debt obligations above include estimated interest costs. The operating lease commitments
above are for minimum rent and do not include costs for insurance, real estate taxes, other operating expenses
and, in some cases, rentals based on a percentage of sales; these items totaled approximately one-third of the
for fiscal 2012. Purchase obligations include obligations under purchase orders for
total minimum rent
merchandise, capital
items, supplies and other operating items, contracts for maintenance needs and other
services, and executive employment and other agreements. Our purchase obligations do not include agreements
that can be cancelled without penalty.
We also have long-term liabilities which include $302.2 million for employee compensation and benefits, the
majority of which will come due beyond five years, $163.6 million for accrued rent, the cash flow requirements of
which are included in the lease commitments in the above table, and $249.6 million for uncertain tax positions
for which it is not reasonably possible for us to predict when they may be paid.
C R I T I C A L A C C O U N T I N G P O L I C I E S
We prepare our consolidated financial statements in accordance with accounting principles generally
accepted in the United States (GAAP) which require us to make certain estimates and judgments that impact our
reported results. These judgments and estimates are based on historical experience and other factors which we
continually review and believe are reasonable. We consider our most critical accounting policies, involving
management estimates and judgments, to be those relating to the areas described below.
Inventory valuation: We use the retail method for valuing inventory, which results in a weighted average
cost. Under the retail method, the cost value of inventory and gross margins are determined by calculating a
cost-to-retail ratio and applying it to the retail value of inventory. This method is widely used in the retail industry,
and we believe the retail method results in a more conservative inventory valuation than other inventory
accounting methods. It involves management estimates with regard to markdowns and inventory shrinkage.
Under the retail method, permanent markdowns are reflected in inventory valuation when the price of an item is
reduced. Typically, a significant area of judgment in the retail method is the amount and timing of permanent
markdowns. However, as a normal business practice, we have a specific policy as to when and how markdowns
are to be taken, greatly reducing management’s discretion and the need for management estimates as to
markdowns. Inventory shrinkage requires estimating a shrinkage rate for interim periods, but we take a full
physical
inventory near the fiscal year end to determine shrinkage at year end. Thus, actual and estimated
amounts of shrinkage may differ in quarterly results, but the difference is typically not a significant factor in full
year results. Overall, we believe that the retail method, coupled with our disciplined permanent markdown policy
and the full physical inventory taken at each fiscal year end, results in an inventory valuation that is fairly stated.
Lastly, many retailers have arrangements with vendors that provide for rebates and allowances under certain
conditions that ultimately affect the value of inventory. We have generally not entered into such arrangements
with our vendors in our continuing operations.
Impairment of long-lived assets: We evaluate the recoverability of the carrying value of our long-lived
assets at least annually and whenever events or circumstances occur that would indicate that the carrying
amounts of those assets are not recoverable. Significant judgment is involved in projecting the cash flows of
35
individual stores, as well as of our business units, which involve a number of factors including historical trends,
recent performance and general economic assumptions. If we determine that an impairment of long-lived assets
has occurred, we record an impairment charge equal to the excess of the carrying value of those assets over the
estimated fair value of the assets. We believe as of January 28, 2012 that the carrying value of our long-lived
assets was appropriate.
Retirement obligations: Retirement costs are accrued over the service life of an employee and represent, in
the aggregate, obligations that will ultimately be settled far in the future and are therefore subject to estimates.
We are required to make assumptions regarding variables, such as the discount rate for valuing pension
obligations and the long-term rate of return assumed to be earned on pension assets, both of which impact the
net periodic pension cost for the period. The discount rate, which we determine annually based on market
interest rates, and our estimated long-term rate of return, which can differ considerably from actual returns, are
two factors that can have a significant impact on the annual cost of retirement benefits and the funded status of
our qualified pension plan. When the market performance of our plan assets, discount rates or other factors have
a negative impact on the funded status of our plan, we may make contributions to the plan in excess of
mandatory funding requirements.
In fiscal 2012 we funded our qualified pension plan with a voluntary
contribution of $75 million.
Share-based compensation: In accordance with GAAP, we estimate the fair value of stock awards issued
to employees and directors under our stock incentive plan. The fair value of the awards is amortized as “share-
based compensation” over the vesting periods during which the recipients are required to provide service. We
use the Black-Scholes option pricing model for determining the fair value of stock options granted, which
requires management to make significant judgments and estimates such as participant activity and market
results. The use of different assumptions and estimates could have a material impact on the estimated fair value
of stock option grants and the related compensation cost.
Reserves for uncertain tax positions: Like many large corporations, our income and other tax returns and
reports are regularly audited by federal, state and local tax authorities in the United States and in foreign
jurisdictions where we operate and such authorities may challenge positions we take. We are engaged in various
administrative and judicial proceedings in multiple jurisdictions with respect to assessments, claims, deficiencies
and refunds and other tax matters, which proceedings are in various stages of negotiation, assessment,
examination, litigation and settlement. The outcomes of these proceedings are uncertain. In accordance with
GAAP, we evaluate our uncertain tax positions based on our understanding of the facts, circumstances and
information available at the reporting date, and we accrue for exposure when we believe that it is more likely
than not, based on the technical merits, that the positions we have taken will not be sustained. However, in the
next twelve months and in future periods, the amounts we accrue for uncertain tax positions from time to time or
ultimately pay, as the result of the final resolutions of examinations, judicial or administrative proceedings,
changes in facts, law, or legal interpretations, expirations of applicable statute of limitations or other resolutions
of, or changes in, tax positions may differ either positively or negatively from the amounts we have accrued, and
may result in a reduction to or additional accruals, refund claims or payments for periods not currently under
examination or for which no claims have been made. Final resolutions of our tax positions or changes in accruals
for uncertain tax positions could result in additional tax expense or benefit and could have a material impact on
our results of operations of the period in which an examination or proceeding is resolved or in the period in
which a changed outcome becomes probable and reasonably estimable.
Reserves for former operations: As discussed in Note C to the consolidated financial statements and
elsewhere in the Management’s Discussion and Analysis, we have reserves for probable losses arising for future
obligations of former operations, primarily real estate leases. We must make estimates and assumptions about
the costs and expenses we will incur in connection with the future obligations of our former operations. The
leases relating to A.J. Wright and other former operations are long-term obligations, and the estimated cost to us
involves numerous estimates and assumptions including when and on what terms we will assign the lease, or
sublease the leased properties, whether and for how long we remain obligated with respect to particular leases,
the extent to which assignees or subtenants will fulfill our financial and other obligations under the leases, how
particular obligations may ultimately be settled and what mitigating factors, including indemnification, may exist
36
to any liability we may have. We develop these assumptions based on past experience and evaluation of various
potential outcomes and the circumstances surrounding each situation and location. We believe that our reserves
are reasonable estimates of the most likely outcomes of the future obligations arising out of the future
obligations of our former operations and should be adequate to cover the ultimate costs we will incur. However,
actual results may differ from our current estimates, and we may decrease or increase the amount of our
reserves to adjust for future developments relating to the underlying assumptions and other factors, although we
do not expect any such differences to be material to our results of operations.
Loss contingencies: Certain conditions may exist as of the date the financial statements are issued that
may result in a loss to us but will not be resolved until one or more future events occur or fail to occur. Our
management, with the assistance of our legal counsel, assesses such contingent liabilities. Such assessments
inherently involve the exercise of judgment. In assessing loss contingencies related to legal proceedings that are
pending against us or claims that may result in such proceedings, our legal counsel assists us in evaluating the
perceived merits of any legal proceedings or claims as well as the perceived merits of the relief sought or
expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and
the amount of the liability can be reasonably estimated, we will accrue for the estimated liability in the financial
statements. If the assessment indicates that a potentially material
loss contingency is not probable, but is
reasonably possible, or is probable but cannot be reasonably estimated, we will disclose the nature of the
contingent liability, together with an estimate of the range of the possible loss or a statement that such loss is
not reasonably estimable.
R E C E N T A C C O U N T I N G P R O N O U N C E M E N T S
See Note A to our consolidated financial statements included in this annual report for recently issued
accounting standards, including the expected dates of adoption and estimated effects on our consolidated
financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
TJX is exposed to market risks in the ordinary course of business, some potential market risks are discussed
below:
F O R E I G N C U R R E N C Y E X C H A N G E R I S K
We are exposed to foreign currency exchange rate risk on the translation of our foreign operations into the
U.S. dollar and on purchases of goods in currencies that are not the local currencies of stores where the goods
are sold and on intercompany debt and interest payable between our domestic and international operations. As
more fully described in Note F to our consolidated financial statements, we use derivative financial instruments
to hedge a portion of certain merchandise purchase commitments, primarily at our international operations, and
intercompany transactions with our international operations. We enter into derivative contracts only for the
purpose of hedging the underlying economic exposure. We utilize currency forward and swap contracts,
designed to offset the gains or losses on the underlying exposures. The contracts are executed with banks we
believe are creditworthy and are denominated in currencies of major industrial countries. We have performed a
sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates applied
to the hedging contracts and the underlying exposures described above as well as the translation of our foreign
operations into our reporting currency. As of January 28, 2012, the analysis indicated that such an adverse
movement would not have a material effect on our consolidated financial position but could have reduced our
pre-tax income for fiscal 2012 by approximately $42 million.
I N T E R E S T R A T E R I S K
Our cash equivalents, short-term investments and certain lines of credit bear variable interest rates. Changes
in interest rates affect interest earned and paid by us.
In addition, changes in the gross amount of our
borrowings and future changes in interest rates will affect our future interest expense. We periodically use
37
financial instruments to manage our cost of borrowing; however, we believe that fixed interest rates on most of
our debt minimizes our exposure to changes in market conditions. We have performed a sensitivity analysis
assuming a hypothetical 10% adverse movement in interest rates applied to our cash and cash equivalents and
short-term investments as of January 28, 2012. There were no variable rate borrowings outstanding as of
January 28, 2012. The analysis indicated that such an adverse movement as of that date would not have had a
material effect on our consolidated financial position, results of operations or cash flows.
E Q U I T Y P R I C E R I S K
The assets of our qualified pension plan, a large portion of which are equity securities, are subject to the
risks and uncertainties of the financial markets. We invest the pension assets in a manner that attempts to
minimize and control our exposure to market uncertainties. Investments, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility risks. A significant decline in the financial markets could
adversely affect the value of our pension plan assets and the funded status of our pension plan, resulting in
increased contributions to the plan.
We do not enter into derivatives for speculative or trading purposes.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item may be found on pages F-1 through F-33 of this Annual Report on
Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
We have carried out an evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation
of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act,
as of the end of the period covered by this report pursuant to Rules 13a-15 and 15d-15 of the Exchange Act.
Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective at a reasonable assurance level in ensuring that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms; and (ii) accumulated
and communicated to our management, including our principal executive and principal financial officers, or
persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.
Management recognizes that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving their objectives and management necessarily applies its
judgment in evaluating the cost-benefit relationship of implementing controls and procedures.
(b) Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fourth quarter of fiscal 2012 identified in connection with our Chief
Executive Officer’s and Chief Financial Officer’s evaluation that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.
(c) Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under
the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal
financial officers, or persons performing similar functions, and effected by our Board of Directors, management
38
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP and includes those policies
and procedures that:
— Pertain to the maintenance of
records that
in reasonable detail accurately and fairly reflect
the
transactions and dispositions of the assets of TJX;
— Provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, and that receipts and expenditures of TJX are being made
only in accordance with authorizations of management and directors of TJX; and
— Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of TJX’s assets that could have a material effect on the financial statements.
Our internal control system is designed to provide reasonable assurance to our management and Board of
Directors regarding the preparation and fair presentation of published financial statements. Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore,
even those systems designed to be effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial
reporting as of January 28, 2012 based on the framework in Internal Control—Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that evaluation,
management concluded that its internal control over financial reporting was effective as of January 28, 2012.
(d) Attestation Report of the Independent Registered Public Accounting Firm
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited and reported
on our consolidated financial statements contained herein, has audited the effectiveness of our internal control
over financial reporting as of January 28, 2012, and has issued an attestation report on the effectiveness of our
internal control over financial reporting included herein.
ITEM 9B. OTHER INFORMATION
Not applicable.
39
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following are the executive officers of TJX as of March 27, 2012:
Name
Age Office and Employment During Last Five Years
Bernard Cammarata
72 Chairman of the Board since 1999. Acting Chief Executive Officer from September
2005 to January 2007 and Chief Executive Officer from 1989 to 2000. Led TJX and
its former TJX subsidiary and T.J. Maxx Division from the organization of the
business in 1976 until 2000, including serving as Chief Executive Officer and
President of TJX, Chairman and President of TJX’s T.J. Maxx Division, and
Chairman of The Marmaxx Group.
Ernie Herrman
51 President since January 2011. Senior Executive Vice President, Group President
from August 2008 to January 2011. Senior Executive Vice President since January
2007 and President, Marmaxx from January 2005 to August 2008. Senior Executive
Vice President, Chief Operating Officer, Marmaxx from 2004 to 2005. Executive
Vice President, Merchandising, Marmaxx from 2001 to 2004. Various
merchandising positions with TJX since joining in 1989.
Scott Goldenberg
58 Executive Vice President and Chief Financial Officer since January 2012. Executive
Vice President, Finance from June 2009 to January 2012. Senior Vice President,
Corporate Controller from May 2007 to June 2009 and Senior Vice President,
Director of Finance, Marmaxx, from 2000 to 2007. Various financial positions with
TJX from 1983 to 1988 and 1997 to 2000.
Michael MacMillan
55 Senior Executive Vice President, Group President, TJX Europe since January 2012.
Carol Meyrowitz
Senior Executive Vice President, Group President from February 2011 to January
2012. President, Marmaxx from August 2008 to January 2011. President, Winners
Merchants International (WMI) from June 2003 to August 2008, Executive Vice
President, WMI from 2000 to 2003. Various finance positions with TJX since joining
in 1985.
58 Chief Executive Officer since January 2007, Director since September 2006 and
President from October 2005 to January 2011. Consultant to TJX from January
2005 to October 2005. Senior Executive Vice President from March 2004 to
January 2005. President, Marmaxx from 2001 to January 2005. Executive Vice
President of TJX from 2001 to 2004.
Jeffrey G. Naylor
53 Senior Executive Vice President, Chief Administrative Officer since January 2012.
Senior Executive Vice President, Chief Financial and Administrative Officer from
February 2009 to January 2012. Senior Executive Vice President, Chief
Administrative and Business Development Officer, June 2007 to February 2009.
Chief Financial and Administrative Officer, September 2006 to June 2007. Senior
Executive Vice President, Chief Financial Officer, from March 2004 to September
2006, Executive Vice President, Chief Financial Officer effective February 2004.
Jerome Rossi
68 Senior Executive Vice President, Group President, since January 2007. Senior
Executive Vice President, Chief Operating Officer, Marmaxx from 2005 to January
2007. President, HomeGoods, from 2000 to 2005. Executive Vice President, Store
Operations, Human Resources and Distribution Services, Marmaxx from 1996 to
2000.
Richard Sherr
54 Senior Executive Vice President, Group President, since January 2012. President,
HomeGoods from 2010 to January 2012. Chief Operating Officer, Marmaxx from
2007 until 2010. Various merchandising positions at TJX since 1992.
Nan Stutz
54 Senior Executive Vice President, Group President, since February 2011. Group
President from 2010 to 2011. President, HomeGoods from 2007 to 2010, Executive
Vice President, Merchandise and Marketing from 2006 to 2007 and Senior Vice
President, Merchandise and Marketing from 2005 to 2006. Various merchandising
positions with Marmaxx and HomeGoods since 1996.
40
The executive officers hold office until the next annual meeting of the Board in June 2012 and until their
successors are elected and qualified.
TJX will file with the Securities and Exchange Commission a definitive proxy statement no later than 120
days after the close of its fiscal year ended January 28, 2012 (Proxy Statement). The information required by this
Item and not given in this Item will appear under the headings “Election of Directors,” “Corporate Governance,”
“Audit Committee Report” and “Beneficial Ownership” in our Proxy Statement, which sections are incorporated
in this item by reference.
TJX has a Code of Ethics for TJX Executives governing its Chairman, Chief Executive Officer, President,
Chief Administrative Officer, Chief Financial Officer, Principal Accounting Officer and other senior operating,
financial and legal executives. The Code of Ethics for TJX Executives is designed to ensure integrity in its
financial reports and public disclosures. TJX also has a Code of Conduct and Business Ethics for Directors
which promotes honest and ethical conduct, compliance with applicable laws, rules and regulations and the
avoidance of conflicts of interest. Both of these codes of conduct are published at www.tjx.com. We intend to
disclose any future amendments to, or waivers from, the Code of Ethics for TJX Executives or the Code of
Business Conduct and Ethics for Directors within four business days of the waiver or amendment through a
website posting or by filing a Current Report on Form 8-K with the Securities and Exchange Commission.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item will appear under the heading “Executive Compensation” in our Proxy
Statement, which section is incorporated in this item by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this Item will appear under the heading “Beneficial Ownership” in our Proxy
Statement, which section is incorporated in this item by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by this Item will appear under the headings “Transactions with Related Persons”
and “Corporate Governance” in our Proxy Statement, which sections are incorporated in this item by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this Item will appear under the heading “Audit Committee Report” in our Proxy
Statement, which section is incorporated in this item by reference.
41
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statement Schedules
For a list of the consolidated financial information included herein, see Index to the Consolidated Financial
Statements on page F-1.
Schedule II—Valuation and Qualifying Accounts
In thousands
Sales Return Reserve:
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Fiscal Year Ended January 30, 2010
Reserves Related to Former Operations:
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Fiscal Year Ended January 30, 2010
Casualty Insurance Reserve:
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Fiscal Year Ended January 30, 2010
Computer Intrusion Reserve:
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Fiscal Year Ended January 30, 2010
Balance
Beginning
of Period
Amounts
Charged to
Net Income
Write-Offs
Against
Reserve
Balance
End of
Period
$17,151 $1,387,956 $1,382,759 $22,348
$16,855 $1,051,999 $1,051,703 $17,151
$14,006 $1,015,470 $1,012,621 $16,855
$54,695 $
33,547 $
42,861 $45,381
$35,897 $
32,575 $
13,777 $54,695
$40,564 $
1,761 $
6,428 $35,897
$14,241 $
(3,942) $
1,220 $ 9,079
$17,116 $
(555) $
2,320 $14,241
$20,759 $
1,093 $
4,736 $17,116
$17,340 $
— $
1,476 $15,864
$23,481 $
(1,550) $
4,591 $17,340
$42,211 $
— $
18,730 $23,481
42
(b) Exhibits
Listed below are all exhibits filed as part of this report. Some exhibits are filed by the Registrant with the
Securities and Exchange Commission pursuant to Rule 12b-32 under the Exchange Act.
Exhibit
No.
Description of Exhibit
3(i).1
Fourth Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 99.1 to the
Form 8-A/A filed September 9, 1999. Certificate of Amendment of Fourth Restated Certificate of
Incorporation is incorporated herein by reference to Exhibit 3(i) to the Form 10-Q filed for the quarter
ended July 28, 2005.
3(ii).1 By-laws of TJX, as amended, are incorporated herein by reference to Exhibit 3.1 to the Form 8-K filed on
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
September 22, 2009.
Indenture between TJX and U.S. Bank National Association dated as of April 2, 2009, incorporated by
reference to Exhibit 4.1 of the Registration Statement on Form S-3 filed on April 2, 2009.
First Supplemental Indenture between TJX and U.S. Bank National Association dated as of April 7, 2009,
incorporated by reference to Exhibit 4.1 to the Form 8-K filed on April 7, 2009.
Second Supplemental Indenture between TJX and U.S. Bank National Association dated as of July 23,
2009, incorporated herein by reference to Exhibit 4.1 to the Form 8-K filed on July 23, 2009.
The Employment Agreement dated as of June 2, 2009 between Bernard Cammarata and TJX is
incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended May 1,
2010.*
The Employment Agreement dated January 28, 2011 between Carol Meyrowitz and TJX is incorporated
herein by reference to Exhibit 10.2 to the Form 10-K filed for the year ended January 29, 2011.*
The Employment Agreement dated January 28, 2011 between Jeffrey Naylor and TJX is incorporated
herein by reference to Exhibit 10.3 to the Form 10-K filed for the year ended January 29, 2011.*
The Amended and Restated Employment Agreement dated January 28, 2011 between Ernie Herrman
and TJX is incorporated herein by reference to Exhibit 10.4 to the Form 10-K filed for the year ended
January 29, 2011.*
The Employment Agreement dated as of January 29, 2010 between Jerome Rossi and TJX is
incorporated herein by reference to Exhibit 10.6 to the Form 10-Q filed for the quarter ended May 1,
2010. The Amendment, to Employment Agreement dated November 30, 2011 between Jerome Rossi
and TJX is filed herewith.*
The Employment Agreement dated as of January 29, 2012 between Jerome Rossi and TJX is filed
herewith.*
The Employment Agreement dated as of January 29, 2010 between and among Paul Sweetenham, TJX
UK, and TJX is incorporated herein by reference to Exhibit 10.7 to the Form 10-Q filed for the quarter
ended May 1, 2010. The letter agreement dated November 29, 2010 between and among Paul
Sweetenham, TJX UK, and TJX is incorporated herein by reference to Exhibit 10.7 to the Form 10-K filed
for the year ended January 29, 2011.*
The Letter Agreement dated December 30, 2011 between Paul Sweetenham and TJX is filed herewith.*
The Compromise Agreement dated December 30, 2011 between Paul Sweetenham and TJX Europe is
filed herewith.*
10.10 The Employment Agreement dated January 28, 2011 between Michael MacMillan and TJX is
incorporated herein by reference to Exhibit 10.8 to the Form 10-K filed for the year ended January 29,
2011. The Letter Agreement dated January 10, 2012 between and among Michael MacMillan, TJX and
NBC Attire, Inc. is filed herewith.*
10.11 The Amended and Restated Employment Agreement dated January 28, 2011 between Nan Stutz and
TJX is incorporated herein by reference to Exhibit 10.9 to the Form 10-K filed for the year ended
January 29, 2011.*
10.12 The Employment Agreement effective as of January 29, 2012 between Richard Sherr and TJX is filed
herewith.*
43
Exhibit
No.
Description of Exhibit
10.13 The Employment Agreement effective as of January 29, 2012 between Scott Goldenberg and TJX is filed
herewith.*
10.14 The Management Incentive Plan, as amended and restated effective as of March 5, 2010, is
incorporated herein by reference to Exhibit 10.11 to the Form 10-Q filed for the quarter ended May 1,
2010.*
10.15 The Stock Incentive Plan (2009 Restatement), as amended and restated effective as of February 2, 2012,
is filed herewith.*
10.16 The Stock Incentive Plan Rules for U.K. Employees, as amended April 7, 2009, is incorporated herein by
reference to Exhibit 10.3 to the Form 10-Q filed for the quarter ending July 31, 2010.*
10.17 The Form of a Non-Qualified Stock Option Certificate Granted under the Stock Incentive Plan as
amended and restated through June 1, 2004 is incorporated herein by reference to Exhibit 10.2 to the
Form 10-Q filed for the quarter ended July 31, 2004.*
10.18 The Form of Non-Qualified Stock Option Certificate Granted under the Stock Incentive Plan as of
September 17, 2009 is incorporated herein by reference to Exhibit 12.1 to the Form 10-Q filed for the
quarter ended October 31, 2009. The Form of Non-Qualified Stock Option Terms and Conditions
Granted under the Stock Incentive Plan as of September 17, 2009 is incorporated herein by reference to
Exhibit 12.2 to the Form 10-Q filed for the quarter ended October 31, 2009.*
10.19 The Form of Non-Qualified Stock Option Certificate Granted under the Stock Incentive Plan as of
September 9, 2010 is incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the
quarter ended October 30, 2010. The Form of Non-Qualified Stock Option Terms and Conditions
Granted under the Stock Incentive Plan as of September 9, 2010 is filed herewith.*
10.20 The Form of Performance-Based Restricted Stock Award Granted Under the Stock Incentive Plan is
incorporated herein by reference to Exhibit 10.13 to the Form 10-K filed for the fiscal year ended
January 30, 2010.*
10.21 The Form of Performance-Based Deferred Stock Award Granted Under the Stock Incentive Plan is
incorporated herein by reference to Exhibit 10.14 to the Form 10-K filed for the fiscal year ended
January 30, 2010.*
10.22 Description of Director Compensation Arrangements is filed herewith.*
10.23 The Long Range Performance Incentive Plan, as amended through April 5, 2007, is incorporated herein
by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended April 28, 2007. The 409A
Amendment to the Long Range Performance Incentive Plan, effective as of January 1, 2008, is
incorporated herein by reference to Exhibit 10.16 to the Form 10-K filed for the fiscal year ended
January 31, 2009. The Long Range Performance Incentive Plan, as amended and restated effective as of
March 5, 2010, is incorporated herein by reference to Exhibit 10.17 to the Form 10-K filed for the year
ended January 29, 2011.*
10.24 The General Deferred Compensation Plan (1998 Restatement) (the “GDCP”) and First Amendment to the
GDCP, effective January 1, 1999, are incorporated herein by reference to Exhibit 10.9 to the Form 10-K
for the fiscal year ended January 30, 1999. The Second Amendment to the GDCP, effective January 1,
2000, is incorporated herein by reference to Exhibit 10.10 to the Form 10-K filed for the fiscal year ended
January 29, 2000. The Third and Fourth Amendments to the GDCP are incorporated herein by reference
to Exhibit 10.17 to the Form 10-K for the fiscal year ended January 28, 2006. The Fifth Amendment to
the GDCP, effective January 1, 2008 is incorporated herein by reference to Exhibit 10.17 to the
Form 10-K filed the fiscal year ended January 31, 2009.*
10.25 The Supplemental Executive Retirement Plan (2008 Restatement) is incorporated herein by reference to
Exhibit 10.18 to the Form 10-K filed for the fiscal year ended January 31, 2009.*
10.26 The Executive Savings Plan (2010 Restatement) is incorporated herein by reference to Exhibit 10.14 to
the Form 10-Q filed for the quarter ended May 1, 2010.*
10.27 The form of TJX Indemnification Agreement for its executive officers and directors is incorporated herein
by reference to Exhibit 10(r) to the Form 10-K filed for the fiscal year ended January 27, 1990.*
44
Exhibit
No.
Description of Exhibit
10.28 The Trust Agreement dated as of April 8, 1988 between TJX and State Street Bank and Trust Company
is incorporated herein by reference to Exhibit 10(y) to the Form 10-K filed for the fiscal year ended
January 30, 1988.*
10.29 The Trust Agreement dated as of April 8, 1988 between TJX and Fleet Bank (formerly Shawmut Bank of
Boston, N.A.) is incorporated herein by reference to Exhibit 10(z) to the Form 10-K filed for the fiscal year
ended January 30, 1988.*
10.30 The Trust Agreement for Executive Savings Plan dated as of January 1, 2005 between TJX and Wells
Fargo Bank, N.A. is incorporated herein by reference to Exhibit 10.26 to the Form 10-K filed for the fiscal
year ended January 29, 2005.*
21
23
24
31.1
31.2
32.1
32.2
101
Subsidiaries of TJX, filed herewith.
Consent of Independent Registered Public Accounting Firm is filed herewith.
Power of Attorney given by the Directors and certain Executive Officers of TJX is filed herewith.
Certification Statement of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 is filed herewith.
Certification Statement of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 is filed herewith.
Certification Statement of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 is filed herewith.
Certification Statement of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 is filed herewith.
The following materials from The TJX Companies, Inc.’s Annual Report on Form 10-K for the fiscal year
January 28, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated
Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Cash
Flows, (iv) the Consolidated Statements of Shareholders’ Equity, and (v) Notes to Consolidated Financial
Statements.
* Management contract or compensatory plan or arrangement.
45
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
THE TJX COMPANIES, INC.
By /s/ Scott Goldenberg
Scott Goldenberg, Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: March 27, 2012
46
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on the date indicated.
/s/ CAROL MEYROWITZ
SCOTT GOLDENBERG*
Carol Meyrowitz, Chief Executive Officer and Director
(Principal Executive Officer)
Scott Goldenberg, Chief Financial Officer (Principal
Financial and Accounting Officer)
ZEIN ABDALLA*
Zein Abdalla, Director
JOSE B. ALVAREZ*
José B. Alvarez, Director
ALAN M. BENNETT*
Alan M. Bennett, Director
MICHAEL F. HINES*
Michael F. Hines, Director
AMY B. LANE*
Amy B. Lane, Director
JOHN F. O’BRIEN*
John F. O’Brien, Director
BERNARD CAMMARATA*
WILLOW B. SHIRE*
Bernard Cammarata, Chairman of the Board of Directors Willow B. Shire, Director
DAVID T. CHING*
David T. Ching, Director
Dated: March 27, 2012
*BY /s/ SCOTT GOLDENBERG
Scott Goldenberg,
for himself and as attorney-in-fact
47
The TJX Companies, Inc.
I N D E X T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
For Fiscal Years Ended January 28, 2012, January 29, 2011 and January 30, 2010.
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Financial Statements:
Consolidated Statements of Income for the fiscal years ended January 28, 2012, January 29, 2011 and
January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Balance Sheets as of January 28, 2012 and January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Cash Flows for the fiscal years ended January 28, 2012, January 29, 2011
and January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Shareholders’ Equity for the fiscal years ended January 28,
2012, January 29, 2011 and January 30, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Financial Statement Schedules:
Schedule II — Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
F-1
Report of Independent Registered Public Accounting Firm
To The Board of Directors and Shareholders of The TJX Companies, Inc:
In addition,
In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all
material respects, the financial position of The TJX Companies, Inc. and its subsidiaries (the “Company”) at
January 28, 2012, and January 29, 2011, and the results of their operations and their cash flows for each of the
three years in the period ended January 28, 2012 in conformity with accounting principles generally accepted in
the United States of America.
in our opinion, the financial statement schedule listed in the
accompanying index presents fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of January 28, 2012, based on criteria
established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO). The Company’s management is responsible for these financial statements
and the financial statement schedule, for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual
Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express
opinions on these financial statements, on the financial statement schedule, and on the Company’s internal
control over financial reporting based on our integrated audits. We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of
material misstatement and whether effective internal control over financial reporting was maintained in all
material respects. Our audits of the financial statements included examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall financial statement presentation. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such
other procedures as we considered necessary in the circumstances. We believe that our audits provide a
reasonable basis for our opinions.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company;
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the financial statements.
its inherent
reporting may not prevent or detect
Because of
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
internal control over
limitations,
financial
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
March 27, 2012
F-2
The TJX Companies, Inc.
C O N S O L I D A T E D S T A T E M E N T S O F I N C O M E
Amounts in thousands
except per share amounts
Net sales
Cost of sales, including buying and occupancy costs
Selling, general and administrative expenses
Provision (credit) for Computer Intrusion related costs
Interest expense, net
Income from continuing operations before provision for income
taxes
Provision for income taxes
Income from continuing operations
Gain from discontinued operations, net of income taxes
Net income
Basic earnings per share:
Income from continuing operations
Gain from discontinued operations, net of income taxes
Net income
Weighted average common shares—basic
Diluted earnings per share:
Income from continuing operations
Gain from discontinued operations, net of income taxes
Net income
Weighted average common shares—diluted
Cash dividends declared per share
Fiscal Year Ended
January 28,
2012
January 29,
2011
January 30,
2010
$23,191,455 $21,942,193 $20,288,444
16,854,249
3,890,144
—
35,648
16,040,461
3,710,053
(11,550)
39,137
14,968,429
3,328,944
—
39,509
2,411,414
915,324
1,496,090
—
2,164,092
824,562
1,339,530
3,611
1,951,562
737,990
1,213,572
—
$ 1,496,090 $ 1,343,141 $ 1,213,572
$
$
$
$
$
$
$
1.97 $
— $
1.97 $
1.67 $
0.01 $
1.68 $
761,109
800,291
1.93 $
— $
1.93 $
1.65 $
— $
1.65 $
773,772
812,826
0.38 $
0.30 $
1.45
—
1.45
835,592
1.42
—
1.42
855,239
0.24
The accompanying notes are an integral part of the financial statements.
F-3
The TJX Companies, Inc.
C O N S O L I D A T E D B A L A N C E S H E E T S
Amounts in thousands
except share amounts
ASSETS
Current assets:
Cash and cash equivalents
Short-term investments
Accounts receivable, net
Merchandise inventories
Prepaid expenses and other current assets
Current deferred income taxes, net
Total current assets
Property at cost:
Land and buildings
Leasehold costs and improvements
Furniture, fixtures and equipment
Total property at cost
Less accumulated depreciation and amortization
Net property at cost
Property under capital lease, net of accumulated amortization of $23,824 and
$21,591, respectively
Other assets
Goodwill and tradename, net of amortization
TOTAL ASSETS
LIABILITIES
Current liabilities:
Obligation under capital lease due within one year
Accounts payable
Accrued expenses and other current liabilities
Federal, foreign and state income taxes payable
Total current liabilities
Other long-term liabilities
Non-current deferred income taxes, net
Obligation under capital lease, less portion due within one year
Long-term debt, exclusive of current installments
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Common stock, authorized 1,200,000,000 shares, par value $1, issued and
outstanding 746,702,028 and 389,657,340, respectively
Additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings
Total shareholders’ equity
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
The accompanying notes are an integral part of the financial statements.
F-4
Fiscal Year Ended
January 28,
2012
January 29,
2011
$1,507,112 $1,741,751
76,261
200,147
2,765,464
249,832
66,072
94,691
204,304
2,950,523
270,133
105,869
5,132,632
5,099,527
349,778
2,311,813
3,426,966
6,088,557
3,382,180
320,633
2,112,151
3,256,446
5,689,230
3,239,429
2,706,377
2,449,801
8,748
253,913
179,935
10,981
231,518
179,936
$8,281,605 $7,971,763
$
2,970 $
1,645,324
1,364,705
50,424
2,727
1,683,929
1,347,951
98,514
3,063,423
3,133,121
861,768
362,501
10,147
774,476
709,321
241,905
13,117
774,400
746,702
—
(192,575)
2,655,163
389,657
—
(91,755)
2,801,997
3,209,290
3,099,899
$8,281,605 $7,971,763
The TJX Companies, Inc.
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
In thousands
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
Loss on property disposals and impairment charges
Deferred income tax provision
Share-based compensation
Excess tax benefits from share-based compensation
Changes in assets and liabilities:
(Increase) in accounts receivable
Decrease (increase) in merchandise inventories
Decrease (increase) in prepaid expenses and other current assets
Increase (decrease) in accounts payable
Increase in accrued expenses and other liabilities
Increase (decrease) in income taxes payable
Other
Net cash provided by operating activities
Cash flows from investing activities:
Property additions
Purchase of short-term investments
Sales and maturities of short-term investments
Other
Net cash (used in) investing activities
Cash flows from financing activities:
Proceeds from issuance of long-term debt
Principal payments on current portion of long-term debt
Cash payments for debt issuance expenses
Payments on capital lease obligation
Cash payments for repurchase of common stock
Proceeds from issuance of common stock
Excess tax benefits from share-based compensation
Cash dividends paid
Net cash (used in) financing activities
Effect of exchange rate changes on cash
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Fiscal Year Ended
January 28,
2012
January 29,
2011
January 30,
2010
$ 1,496,090 $ 1,343,141 $1,213,572
485,701
13,559
144,762
64,175
(46,143)
(4,410)
(187,157)
(20,709)
(36,553)
13,747
(3,097)
(3,931)
458,052
96,073
50,641
58,804
(28,095)
(23,587)
(211,823)
495
163,823
77,846
(11,801)
2,912
435,218
10,270
53,155
55,145
(17,494)
(1,862)
147,805
21,219
197,496
31,046
152,851
(26,495)
1,916,034
1,976,481
2,271,926
(803,330)
(152,042)
132,679
11,652
(707,134)
(119,530)
180,116
(1,065)
(429,282)
(278,692)
153,275
(5,578)
(811,041)
(647,613)
(560,277)
—
—
(2,299)
(2,727)
(1,320,812)
218,999
46,143
(275,016)
—
—
(3,118)
(2,355)
(1,193,380)
176,159
28,095
(229,329)
774,263
(393,573)
(7,202)
(2,174)
(944,762)
169,862
17,494
(197,662)
(1,335,712)
(1,223,928)
(583,754)
(3,920)
22,204
33,185
(234,639)
1,741,751
127,144
1,614,607
1,161,080
453,527
Cash and cash equivalents at end of year
$ 1,507,112 $ 1,741,751 $1,614,607
The accompanying notes are an integral part of the financial statements.
F-5
The TJX Companies, Inc.
C O N S O L I D A T E D S T A T E M E N T S O F S H A R E H O L D E R S ’ E Q U I T Y
In thousands
Balance, January 31, 2009
Comprehensive income:
Net income
Foreign currency translation
adjustments
Recognition of prior service cost and
deferred gains/losses
Recognition of unfunded post retirement
obligations
Total comprehensive income
Cash dividends declared on common stock
Recognition of share-based compensation
Issuance of common stock upon conversion
of convertible debt
Issuance of common stock under stock
incentive plan and related tax effect
Common stock repurchased
Balance, January 30, 2010
Comprehensive income:
Net income
Foreign currency translation
adjustments
Recognition of prior service cost and
deferred gains/losses
Recognition of unfunded post retirement
obligations
Total comprehensive income
Cash dividends declared on common stock
Recognition of share-based compensation
Issuance of common stock under stock
incentive plan and related tax effect
Common stock repurchased
Balance, January 29, 2011
Comprehensive income:
Net income
Foreign currency translation
adjustments
Recognition of prior service cost and
deferred gains/losses
Recognition of unfunded post retirement
obligations
Total comprehensive income
Cash dividends declared on common stock
Recognition of share-based compensation
Issuance of common stock under stock
incentive plan and related tax effect
Common stock repurchased
Adjustment to effect stock split, two-for-one
Balance, January 28, 2012
Common Stock
Shares
Par Value
$1
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
412,822 $412,822 $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
55,145
15,094
15,094
349,994
8,329
(26,859)
8,329
(26,859)
175,180
(580,319)
409,386
409,386
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
58,804
7,713
(27,442)
7,713
(27,442)
190,979
(249,783)
389,657
389,657
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
64,175
7,872
(24,178)
373,351
7,872
(24,178)
373,351
250,921
(315,096)
—
$(217,781)
$1,939,516 $ 2,134,557
—
1,213,572
1,213,572
76,678
8,191
(1,212)
—
—
—
—
—
—
—
—
(201,490)
—
76,678
8,191
(1,212)
1,297,229
(201,490)
55,145
—
365,088
—
(337,584)
183,509
(944,762)
(134,124)
2,614,014
2,889,276
—
1,343,141
1,343,141
38,325
5,219
(1,175)
—
—
—
—
—
—
—
(239,003)
—
38,325
5,219
(1,175)
1,385,510
(239,003)
58,804
—
(916,155)
198,692
(1,193,380)
(91,755)
2,801,997
3,099,899
—
1,496,090
1,496,090
(14,253)
4,833
(91,400)
—
—
—
—
—
—
—
—
(288,035)
—
(14,253)
4,833
(91,400)
1,395,270
(288,035)
64,175
—
(981,538)
(373,351)
258,793
(1,320,812)
—
746,702 $746,702 $
—
$(192,575)
$2,655,163 $ 3,209,290
The accompanying notes are an integral part of the financial statements.
F-6
The TJX Companies, Inc.
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
Note A. Summary of Accounting Policies
Basis of Presentation: The consolidated financial statements of The TJX Companies, Inc. (referred to as “TJX”
or “we”) include the financial statements of all of TJX’s subsidiaries, all of which are wholly owned. All of its activities
intercompany
are conducted by TJX or its subsidiaries and are consolidated in these financial statements. All
transactions have been eliminated in consolidation.
Fiscal Year: During fiscal 2010, TJX amended its bylaws to change its fiscal year end to the Saturday nearest to
the last day of January of each year. Previously TJX’s fiscal year ended on the last Saturday of January. The fiscal
years ended January 28, 2012 (fiscal 2012), January 29, 2011 (fiscal 2011) and January 30, 2010 (fiscal 2010) all
included 52 weeks. This change shifted the timing of TJX’s next 53 week fiscal year to the fiscal year ending
February 2, 2013 (fiscal 2013).
Earnings Per Share: All earnings per share amounts refer to diluted earnings per share, unless otherwise
indicated, and have been adjusted to reflect the two-for-one stock split in the form of a dividend announced on
January 5, 2012.
Use of Estimates: The preparation of the TJX financial statements, in conformity with accounting principles
generally accepted in the United States of America (GAAP), requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities, at the
date of the financial statements as well as the reported amounts of revenues and expenses during the reporting
period. TJX considers its accounting policies relating to inventory valuation, impairments of long-lived assets,
retirement obligations, share-based compensation,
former
operations and loss contingencies to be the most significant accounting policies that involve management estimates
and judgments. Actual amounts could differ from those estimates, and such differences could be material.
reserves for uncertain tax positions,
reserves for
Revenue Recognition: TJX records revenue at the time of sale and receipt of merchandise by the customer, net
of a reserve for estimated returns. We estimate returns based upon our historical experience. We defer recognition of
a layaway sale and its related profit to the accounting period when the customer receives the layaway merchandise.
Proceeds from the sale of store cards as well as the value of store cards issued to customers as a result of a return or
exchange are deferred until the customers use the cards to acquire merchandise. Based on historical experience, we
estimate the amount of store cards that will not be redeemed (“store card breakage”) and, to the extent allowed by
local law, these amounts are amortized into income over the redemption period. Revenue recognized from store card
breakage was $10.9 million in fiscal 2012, $10.1 million in fiscal 2011 and $7.8 million in fiscal 2010.
Consolidated Statements of Income Classifications: Cost of sales, including buying and occupancy costs,
includes the cost of merchandise sold and gains and losses on inventory and fuel-related derivative contracts; store
occupancy costs (including real estate taxes, utility and maintenance costs and fixed asset depreciation); the costs of
operating our distribution centers; payroll, benefits and travel costs directly associated with buying inventory; and
systems costs related to the buying and tracking of inventory.
Selling, general and administrative expenses include store payroll and benefit costs; communication costs; credit
and check expenses; advertising; administrative and field management payroll, benefits and travel costs; corporate
administrative costs and depreciation; gains and losses on non-inventory related foreign currency exchange
contracts; and other miscellaneous income and expense items.
Cash and Cash Equivalents: TJX generally considers highly liquid investments with a maturity of 90 days or less
at the date of purchase to be cash equivalents. Investments with maturities greater than 90 days but less than one
year at the date of purchase are included in short-term investments. Our investments are primarily high-grade
commercial paper, institutional money market funds and time deposits with major banks.
TJX had $15.1 million of restricted cash at January 28, 2012, and $14.6 million of restricted cash at January 29,
2011 all of which is reported in other assets on the consolidated balance sheets. The restricted cash is held in escrow
to secure TJX’s performance of its obligations under certain leases in Europe.
F-7
Merchandise Inventories: Inventories are stated at the lower of cost or market. TJX uses the retail method for
valuing inventories which results in a weighted average cost. We utilize a permanent markdown strategy and lower
the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in our stores. We
accrue for inventory obligations at the time inventory is shipped. At January 28, 2012 and January 29, 2011, in-transit
inventory included in merchandise inventories was $395.9 million and $445.7 million, respectively. Comparable
amounts are reflected in accounts payable at those dates.
Common Stock and Equity: On January 5, 2012, TJX announced that its Board of Directors approved a
two-for-one stock split of the Company’s common stock in the form of a stock dividend. One additional share was
paid for each share held by holders of record as of the close of business on January 17, 2012. The shares were
distributed on February 2, 2012 and resulted in the issuance of 373 million shares of common stock and a
corresponding decrease of $373 million to retained earnings. The balance sheet as of January 28, 2012 has been
adjusted to retroactively present the two-for-one stock split. In addition, all historical per share amounts and
references to common stock activity, as well as basic and diluted share amounts utilized in the calculation of earnings
per share in this report, have been adjusted to reflect this stock split.
Equity transactions consist primarily of the repurchase by TJX of its common stock under its stock repurchase
programs and the recognition of compensation expense and issuance of common stock under TJX’s stock incentive
plan. In fiscal 2010, we also issued shares upon conversion of convertible notes that were called for redemption,
discussed in Note K. Under our stock repurchase programs we repurchase our common stock on the open market.
The par value of the shares repurchased is charged to common stock with the excess of the purchase price over par
first charged against any available additional paid-in capital (“APIC”) and the balance charged to retained earnings.
Due to the high volume of repurchases over the past several years, we have no remaining balance in APIC at the end
of any of the years presented. All shares repurchased have been retired.
Shares issued under TJX’s stock incentive plan are issued from authorized but unissued shares, and proceeds
received are recorded by increasing common stock for the par value of the shares with the excess over par added to
APIC. Income tax benefits upon the expensing of options result in the creation of a deferred tax asset, while income
tax benefits due to the exercise of stock options reduce deferred tax assets to the extent that an asset for the related
grant has been created. Any tax benefits greater than the deferred tax assets created at the time of expensing the
options are credited to APIC; any deficiencies in the tax benefits are debited to APIC to the extent a pool for such
deficiencies exists. In the absence of a pool any deficiencies are realized in the related periods’ statements of income
through the provision for income taxes. Any excess income tax benefits are included in cash flows from financing
activities in the statements of cash flows. The par value of restricted stock awards is also added to common stock
when the stock is issued, generally at grant date. The fair value of the restricted stock awards in excess of par value is
added to APIC as the awards are amortized into earnings over the related vesting periods. Upon the call of our
convertible notes in fiscal 2010 most holders of the notes converted them into TJX common stock. When converted
the face value of the convertible notes less unamortized debt discount was relieved, common stock was credited with
the par value of the shares issued, and the excess of the carrying value of the convertible notes over par was added
to APIC.
Share-Based Compensation: TJX accounts for share-based compensation by estimating the fair value of each
award on the date of grant. TJX uses the Black-Scholes option pricing model for options awarded and for
performance-based restricted stock awards TJX uses the market price on the date of the award. See Note I for a
detailed discussion of share-based compensation.
Interest: TJX’s interest expense is presented as a net amount. The following is a summary of net interest
expense:
Dollars in thousands
Interest expense
Capitalized interest
Interest (income)
Interest expense, net
January 28,
2012
$ 49,276
(2,593)
(11,035)
$ 35,648
Fiscal Year Ended
January 29,
2011
$49,014
—
(9,877)
$39,137
January 30,
2010
$49,278
(758)
(9,011)
$39,509
F-8
We capitalize interest during the active construction period of major capital projects. Capitalized interest is added
to the cost of the related assets. Capitalized interest relates to construction of a data center and implementation of a
merchandising system in fiscal 2012 and the implementation of a finance system in fiscal 2010. There was no
capitalized interest in fiscal 2011.
financial
Depreciation and Amortization: For
reporting purposes, TJX provides for depreciation and
amortization of property using the straight-line method over the estimated useful lives of the assets. Buildings are
depreciated over 33 years. Leasehold costs and improvements are generally amortized over their useful life or the
committed lease term (typically 10 years), whichever is shorter. Furniture, fixtures and equipment are depreciated over
3 to 10 years. Depreciation and amortization expense for property was $490.6 million for fiscal 2012, $461.5 million for
fiscal 2011 and $435.8 million for fiscal 2010. Amortization expense for property held under a capital lease was $2.2
million in each of fiscal 2012, 2011 and 2010. Maintenance and repairs are charged to expense as incurred.
Significant costs incurred for internally developed software are capitalized and amortized over 3 to 10 years. Upon
retirement or sale, the cost of disposed assets and the related accumulated depreciation are eliminated and any gain
or loss is included in income. Pre-opening costs, including rent, are expensed as incurred.
Lease Accounting: TJX begins to record rent expense when it takes possession of a store, which is typically 30
to 60 days prior to the opening of the store and generally occurs before the commencement of the lease term, as
specified in the lease.
Long-Lived Assets: Information related to carrying values of our long-lived assets by geographic location is
presented below:
Dollars in thousands
United States
Canada
Europe
Total long-lived assets
January 28,
2012
$1,879,176
220,522
615,427
January 29,
2011
$1,657,090
210,693
592,999
January 30,
2010
$1,607,733
195,434
483,930
$2,715,125
$2,460,782
$2,287,097
Goodwill and Tradename: Goodwill is primarily the excess of the purchase price paid over the carrying value of
the minority interest acquired in fiscal 1990 in TJX’s former 83%-owned subsidiary and represents goodwill
associated with the T.J. Maxx chain. In addition, goodwill includes the excess of cost over the estimated fair market
value of the net assets of Winners acquired by TJX in fiscal 1991.
Goodwill totaled $72.2 million as of January 28, 2012, $72.2 million as of January 29, 2011 and $72.1 million as of
January 30, 2010. Goodwill is considered to have an indefinite life and accordingly is not amortized. Changes in
goodwill are attributable to the effect of exchange rate changes on Winners’ reported goodwill.
Tradename is the value assigned to the name “Marshalls,” acquired by TJX in fiscal 1996 as part of the
acquisition of the Marshalls chain. The value of the tradename was determined by the discounted present value of
assumed after-tax royalty payments, offset by a reduction for their pro-rata share of negative goodwill acquired. The
Marshalls tradename is carried at a value of $107.7 million and is considered to have an indefinite life.
TJX occasionally acquires or licenses other trademarks to be used in connection with private label merchandise.
Such trademarks are included in other assets and are amortized to cost of sales, including buying and occupancy
costs, over their useful life, generally from 7 to 10 years.
Goodwill, tradename and trademarks, and the related accumulated amortization if any, are included in the
respective operating segment to which they relate.
Impairment of Long-Lived Assets, Goodwill and Tradename: TJX evaluates its long-lived assets and assets
with indefinite lives (other than goodwill and tradename) for indicators of impairment whenever events or changes in
circumstances indicate their carrying amounts may not be recoverable, and at least annually in the fourth quarter of
each fiscal year. An impairment exists when the undiscounted cash flow of an asset or asset group is less than the
carrying cost of that asset or asset group. The evaluation for long-lived assets is performed at the lowest level of
identifiable cash flows, which is generally at the individual store level. If indicators of impairment are identified, an
undiscounted cash flow analysis is performed to determine if an impairment exists. The store-by-store evaluations did
not indicate any recoverability issues (for any of our continuing operations) during the past three fiscal years. Our
F-9
decision to close the A.J. Wright chain (see Note C) resulted in the impairment of A.J. Wright’s fixed assets and
impairment charges of $83 million are reflected in the A.J. Wright segment for fiscal 2011.
Goodwill is tested for impairment whenever events or changes in circumstances indicate that an impairment may
have occurred and at least annually in the fourth quarter of each fiscal year, by comparing the carrying value of the
related reporting unit to its fair value. An impairment exists when this analysis, using typical valuation models such as
the discounted cash flow method, shows that the fair value of the reporting unit is less than the carrying cost of the
reporting unit.
Tradename is also tested for impairment whenever events or changes in circumstances indicate that the carrying
amount of the tradename may exceed its fair value and at least annually in the fourth quarter of each fiscal year.
Testing is performed by comparing the discounted present value of assumed after-tax royalty payments to the
carrying value of the tradename.
There was no impairment related to our goodwill, tradename or trademarks in fiscal 2012, 2011 or 2010.
Advertising Costs: TJX expenses advertising costs as incurred. Advertising expense was $271.6 million for fiscal
2012, $249.8 million for fiscal 2011 and $227.5 million for fiscal 2010.
Foreign Currency Translation: TJX’s foreign assets and liabilities are translated into U.S. dollars at fiscal
year-end exchange rates with resulting translation gains and losses included in shareholders’ equity as a component
of accumulated other comprehensive income (loss). Activity of the foreign operations that affect the statements of
income and cash flows is translated at average exchange rates prevailing during the fiscal year.
Loss Contingencies: TJX records a reserve for loss contingencies when it is both probable that a loss will be
incurred and the amount of the loss is reasonably estimable. TJX evaluates pending litigation and other contingencies
at least quarterly and adjusts the reserve for such contingencies for changes in probable and reasonably estimable
losses. TJX includes an estimate for related legal costs at the time such costs are both probable and reasonably
estimable.
New Accounting Standards: We do not expect the adoption of recently issued accounting pronouncements to
have a significant impact on our results of operations, financial position or cash flow.
Subsequent Events: On February 2, 2012, one additional share of TJX stock was paid for each share held by
holders of record as of the close of business on January 17, 2012 in accordance with a Board of Directors approved
two-for-one stock split announced on January 5, 2012. As a result of the stock split TJX issued 373 million shares of
its common stock and recorded a corresponding decrease of $373 million to retained earnings. The balance sheet as
of January 28, 2012 has been adjusted to retroactively present the two-for-one stock split.
Note B. Provision (Credit) for Computer Intrusion Related Costs
TJX has a reserve for its estimate of the remaining probable losses arising from an unauthorized intrusion or
intrusions (the intrusion or intrusions, collectively, the “Computer Intrusion”) into portions of its computer system,
which was discovered late in fiscal 2007 and in which TJX believes customer data were stolen. TJX reduced the
Provision for Computer Intrusion related costs by $11.6 million in fiscal 2011 as a result of negotiations, settlements,
insurance proceeds and adjustments in our estimated losses. The reserve balance was $15.9 million at January 28,
2012 and $17.3 million at January 29, 2011. As an estimate, the reserve is subject to uncertainty, actual costs may
vary from the current estimate however such variations are not expected to be material.
Note C. Dispositions and Reserves Related to Former Operations
Consolidation of A.J. Wright: On December 8, 2010, the Board of Directors approved the consolidation of the
A.J. Wright division whereby TJX would convert 90 A.J. Wright stores into T.J. Maxx, Marshalls or HomeGoods stores
and close A.J. Wright’s remaining 72 stores, two distribution centers and home office. The liquidation process
commenced in the fourth quarter of fiscal 2011 and was completed during the first quarter of fiscal 2012. Even though
the A.J. Wright chain was profitable, consolidating the A.J. Wright chain was intended to allow TJX to focus its
financial and managerial resources on fewer, larger businesses with higher returns and enhance the growth prospects
for TJX overall.
F-10
The A.J. Wright consolidation was not classified as a discontinued operation due to our expectation that a
significant portion of the sales of the A.J. Wright stores would migrate to other TJX stores. Thus the costs incurred in
fiscal 2012 and fiscal 2011 relating to the A.J. Wright consolidation are reflected in continuing operations as part of the
A.J. Wright segment which reported a segment loss of $49 million for fiscal 2012 and $130 million for fiscal 2011
including the following:
In thousands
Fixed asset impairment charges—Non cash
Severance and termination benefits
Lease obligations and other closing costs
Operating losses
Total segment loss
Fiscal Year Ended
January 28,
2012
January 29,
2011
$
—
—
32,686
16,605
$49,291
$ 82,589
25,400
11,700
10,297
$129,986
The impairment charges relate to furniture and fixtures and leasehold improvements that were disposed of and
deemed to have no value, as well as A.J. Wright’s two owned distribution centers. The distribution centers were
closed prior to the end of fiscal 2011, were held for sale during fiscal 2012 and adjusted to fair market value. In the
third quarter of fiscal 2012 the A.J. Wright Fall River, Massachusetts distribution center was sold and an immaterial
loss was recorded. The impairment charges, severance and termination benefits, lease obligations and other closing
costs are included in selling, general and administrative expenses on the consolidated statements of income.
Fiscal 2012 also included $20 million of costs to convert the 90 A.J. Wright stores to other banners, with $17
million incurred by the Marmaxx segment and $3 million incurred by the HomeGoods segment.
Reserves Related to Former Operations: TJX has a reserve for its estimate of future obligations of business
operations it has closed, sold or otherwise disposed of. The reserve activity for the last three fiscal years is presented
below:
In thousands
Balance at beginning of year
Additions (reductions) to the reserve charged to net income:
Reduction in reserve for lease related obligations of former operations
classified as discontinued operations
A.J. Wright closing costs
Interest accretion
Charges against the reserve:
Lease related obligations
Termination benefits and all other
Balance at end of year
Fiscal Year Ended
January 28,
2012
January 29,
2011
January 30,
2010
$ 54,695
$35,897
$40,564
—
32,686
861
(21,821)
(21,040)
(6,000)
37,100
1,475
(7,155)
(6,622)
—
—
1,761
(5,891)
(537)
$ 45,381
$54,695
$35,897
In the first quarter of fiscal 2012, TJX increased this reserve by $33 million for the estimated costs of closing the
A.J. Wright stores that were not converted to other banners or closed in fiscal 2011.
In the fourth quarter of fiscal 2011 TJX reduced its reserve by $6 million to reflect a lower estimated cost for lease
obligations for former operations classified as discontinued operations, which was recorded to discontinued
operations on the consolidated statements of income. TJX also added to the reserve the consolidation costs of the
A.J. Wright chain detailed above. The reserve balance as of January 29, 2011 includes approximately $20 million for
severance and termination benefits relating to the A.J. Wright consolidation.
The lease-related obligations included in the reserve reflect TJX’s estimation of lease costs, net of estimated
subtenant income, and the cost of probable claims against TJX for liability, as an original lessee or guarantor of the
leases of A.J. Wright and other former TJX businesses, after mitigation of the number and cost of these lease
obligations. The actual net cost of these lease-related obligations may differ from TJX’s estimate. TJX estimates that
the majority of the former operations reserve will be paid in the next three to five years. The actual timing of cash
outflows will vary depending on how the remaining lease obligations are actually settled.
F-11
TJX may also be contingently liable on up to 13 leases of BJ’s Wholesale Club, a former TJX business, and up to
seven leases of Bob’s Stores, also a former TJX business, in addition to those included in the reserve. The reserve for
discontinued operations does not reflect these leases because TJX believes that the likelihood of future liability to TJX
is remote.
Note D. Other Comprehensive Income
TJX’s comprehensive income information, net of related tax effects, is presented below:
In thousands
Net income
Other comprehensive income (loss):
Foreign currency translation adjustments
Recognition of prior service cost and deferred gains
Recognition of unfunded post retirement obligations
Total comprehensive income
Note E. Capital Stock and Earnings Per Share
Fiscal Year Ended
January 28,
2012
January 29,
2011
$1,496,090 $1,343,141
(14,253)
4,833
(91,400)
38,325
5,219
(1,175)
$1,395,270 $1,385,510
Capital Stock: On January 5, 2012, TJX announced that its Board of Directors approved a two-for-one stock
split of the Company’s common stock in the form of a stock dividend. One additional share was paid for each share
held by holders of record as of the close of business on January 17, 2012. The shares were distributed on February 2,
2012 and resulted in the issuance of 373 million shares of common stock. The balance sheet as of January 28, 2012
has been adjusted to retroactively present the two-for-one stock split. Also, all historical per share amounts and
references to common stock activity, as well as basic and diluted share amounts utilized in the calculation of earnings
per share, have been adjusted to reflect the two-for-one stock split.
TJX repurchased and retired 49.7 million shares of its common stock at a cost of $1.4 billion during fiscal 2012.
TJX reflects stock repurchases in its financial statements on a “settlement” basis. We had cash expenditures under
our repurchase programs of $1.3 billion in fiscal 2012, $1.2 billion in fiscal 2011 and $944.8 million in fiscal 2010. We
repurchased 48.4 million shares in fiscal 2012, 54.9 million shares in fiscal 2011 and 53.7 million shares in fiscal 2010.
These expenditures were funded primarily by cash generated from operations. In June 2011, TJX completed the $1
billion stock repurchase program authorized in February 2010 under which TJX repurchased 41.3 million shares of
common stock. In February 2011, TJX’s Board of Directors approved another stock repurchase program that
authorizes the repurchase of up to an additional $1 billion of TJX common stock from time to time.
Under the repurchase program authorized in February 2011, on a “trade date” basis, TJX repurchased
26.4 million shares of common stock at a cost of $775.4 million during fiscal 2012 and $224.6 million remained
available at January 28, 2012 under this program.
All shares repurchased under the stock repurchase programs have been retired.
In the first quarter of fiscal 2013, TJX’s Board of Directors approved a new stock repurchase program that
authorizes the repurchase of up to an additional $2 billion of TJX common stock from time to time.
TJX has five million shares of authorized but unissued preferred stock, $1 par value.
F-12
Earnings Per Share: The following schedule presents the calculation of basic and diluted earnings per share for
income from continuing operations:
Amounts in thousands except per share amounts
Basic earnings per share:
Income from continuing operations
Weighted average common stock outstanding for basic earnings per
share calculation
Basic earnings per share
Diluted earnings per share:
January 28,
2012
Fiscal Year Ended
January 29,
2011
January 30,
2010
$1,496,090 $1,339,530 $1,213,572
761,109
800,291
$
1.97 $
1.67 $
835,592
1.45
Income from continuing operations
Add back: Interest expense on zero coupon convertible subordinated
$1,496,090 $1,339,530 $1,213,572
notes, net of income taxes
—
—
1,073
Income from continuing operations used for diluted earnings per share
calculation
$1,496,090 $1,339,530 $1,214,645
Weighted average common stock outstanding for basic earnings per
share calculation
Assumed conversion / exercise of:
Convertible subordinated notes
Stock options and awards
Weighted average common stock outstanding for diluted earnings per
share calculation
Diluted earnings per share
761,109
800,291
835,592
—
12,663
—
12,535
7,802
11,845
773,772
812,826
855,239
$
1.93 $
1.65 $
1.42
In fiscal 2010, TJX issued 30.2 million shares of common stock upon conversion of 462,057 zero coupon
convertible subordinated notes which had a carrying value of $365.1 million. TJX redeemed the remaining 2,886 notes
that were not converted for $2.3 million.
The weighted average common shares for the diluted earnings per share calculation excludes the impact of
outstanding stock options if the assumed proceeds per share of the option is in excess of the related fiscal period’s
average price of TJX’s common stock. Such options are excluded because they would have an antidilutive effect.
There were no such options excluded at the end of fiscal 2012 or 2011. There were 19.1 million such options
excluded at the end of fiscal 2010.
Note F. Financial Instruments
As a result of its operating and financing activities, TJX is exposed to market risks from changes in interest and
foreign currency exchange rates and fuel costs. These market risks may adversely affect TJX’s operating results and
financial position. When deemed appropriate, TJX seeks to minimize risk from changes in interest and foreign
currency exchange rates and fuel costs through the use of derivative financial
instruments. Derivative financial
instruments are not used for trading or other speculative purposes. TJX does not use leveraged derivative financial
instruments. TJX recognizes all derivative instruments as either assets or liabilities in the statements of financial
position and measures those instruments at fair value. The fair values of the derivatives are classified as assets or
liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts.
Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in
the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives
are either recorded in shareholders’ equity as a component of other comprehensive income or are recognized
currently in earnings, along with an offsetting adjustment against the basis of the item being hedged. TJX does not
hedge its net investments in foreign subsidiaries.
Interest Rate Contracts: During fiscal 2004, TJX entered into interest rate swaps with respect to $100 million of
the $200 million ten-year notes outstanding at that time. Under those interest rate swaps, which settled in December
2009, TJX paid a specific variable interest rate indexed to the six-month LIBOR rate and received a fixed rate
applicable to the underlying debt, effectively converting the interest on a portion of the notes from fixed to a floating
F-13
rate of interest. The interest rate swaps were designated as fair value hedges on the underlying debt. The valuation of
the swaps resulted in an offsetting fair value adjustment to the debt hedged. The average effective interest rate on
$100 million of the 7.45% unsecured notes, inclusive of the effect of hedging activity, was approximately 4.04% in
fiscal 2010.
Diesel Fuel Contracts: During fiscal 2012, TJX entered into agreements to hedge a portion of its estimated
notional diesel requirements for fiscal 2013, based on the diesel fuel consumed by independent freight carriers
transporting the Company’s inventory. The hedge agreements outstanding at January 28, 2012 relate to 49% of TJX’s
estimated notional diesel requirements in the first half of fiscal 2013 and 21% of TJX’s estimated notional diesel
requirements in the second half of fiscal 2013. These diesel fuel hedge agreements will settle throughout fiscal 2013.
The fuel hedge agreements outstanding at January 29, 2011 hedged approximately 10% of TJX’s notional diesel fuel
requirements in the first quarter of fiscal 2012, and settled during the first half of fiscal 2012.
Independent freight carriers transporting the Company’s inventory charge TJX a mileage surcharge for diesel fuel
price increases as incurred by the carrier. The hedge agreements are designed to mitigate the volatility of diesel fuel
pricing (and the resulting per mile surcharges payable by TJX) by setting a fixed price per gallon for the period being
hedged. TJX elected not to apply hedge accounting rules to these contracts. The change in the fair value of the hedge
agreements resulted in income of $0.95 million in fiscal 2012, income of $1.2 million in fiscal 2011 and income of $4.5
million in fiscal 2010, all of which are reflected in earnings as a component of cost of sales, including buying and
occupancy costs.
Foreign Currency Contracts: TJX enters into forward foreign currency exchange contracts to obtain economic
hedges on portions of merchandise purchases made and anticipated to be made in currencies other than the
functional currency of TJX Europe (United Kingdom, Ireland, Germany and Poland), TJX Canada (Canada), Marmaxx
and HomeGoods (U.S.). These contracts are typically twelve months or less in duration. The contracts outstanding at
January 28, 2012 cover certain commitments and anticipated needs throughout fiscal 2013. TJX elected not to apply
hedge accounting rules to these contracts. The change in the fair value of these contracts resulted in income of $3.3
million in fiscal 2012, loss of $6.8 million in fiscal 2011 and income of $0.5 million in fiscal 2010 and is included in
earnings as a component of cost of sales, including buying and occupancy costs.
TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt
and intercompany interest payable. The changes in fair value of these contracts are recorded in selling, general and
administrative expenses and are offset by marking the underlying item to fair value in the same period. Upon
settlement, the realized gains and losses on these contracts are offset by the realized gains and losses of the
underlying item in selling, general and administrative expenses. The net impact on the income statement of hedging
activity related to these intercompany payables was income of $0.1 million in fiscal 2012, income of $0.1 million in
fiscal 2011 and income of $3.7 million in fiscal 2010.
F-14
The following is a summary of TJX’s derivative financial
instruments, related fair value and balance sheet
classification at January 28, 2012:
In thousands
Fair value hedges:
Intercompany balances, primarily short-term
debt and related interest
Pay
Receive
Blended
Contract
Rate
Balance
Sheet
Location
Current
Asset
US$
Current
(Liability)
US$
zł 62,000 C$
€ 25,000
£
€ 75,292 US$ 100,781 1.3385
55,000 0.6441
US$ 85,389
£
18,237 0.2941 (Accrued Exp) $ — $ (784)
Prepaid Exp
—
21,335 0.8534
Prepaid Exp /
(Accrued Exp)
Prepaid Exp
1,156
796
(98)
—
333
Net Fair
Value in
US$ at
January 28,
2012
$ (784)
333
1,058
796
Economic hedges for which hedge accounting
was not elected:
Diesel contracts
Fixed on 450K-
1.5M gal
per month
Float on 450K-
1.5M gal
per month
N/A
Prepaid Exp 1,698
—
1,698
Merchandise purchase commitments
C$
€
8,475
£ 40,401 US$
£ 33,793
US$
3,135
€
€
Total fair value of financial instruments
C$ 272,210 US$ 273,356 1.0042
6,300 0.7434
Prepaid Exp /
(Accrued Exp)
Prepaid Exp /
(Accrued Exp)
63,000 1.5594 (Accrued Exp)
Prepaid Exp /
(Accrued Exp)
Prepaid Exp /
(Accrued Exp)
40,000 1.1837
2,366 0.7547
4,201
(2,175)
2,026
53
—
(178)
(541)
(125)
(541)
135
(405)
(270)
28
(36)
$8,400 $(4,217)
(8)
$4,183
The following is a summary of TJX’s derivative financial
instruments, related fair value and balance sheet
classification at January 29, 2011:
Net Fair
Value in
US$ at
January 29,
2011
$ (278)
(1,944)
In thousands
Fair value hedges:
Intercompany balances, primarily short-term
debt and related interest
Pay
Receive
Blended
Contract
Rate
Balance
Sheet
Location
Current
Asset
US$
Current
(Liability)
US$
€
€
25,000
50,442
US$
85,894
£ 21,265 0.8506 (Accrued Exp) $ — $ (278)
— (1,944)
US$ 66,363 1.3156 (Accrued Exp)
Prepaid Exp /
(Accrued Exp)
£ 55,000 0.6403
1,008
(77)
931
Economic hedges for which hedge accounting
was not elected:
Diesel contracts
Merchandise purchase commitments
Fixed on 2.1M gal Float on 2.1M gal
N/A
Prepaid Exp
746
—
746
C$ 403,031
C$
4,951
£ 42,813
£ 28,465
420
US$
US$ 399,036 0.9901
Prepaid Exp /
(Accrued Exp)
Prepaid Exp /
(Accrued Exp)
US$ 66,900 1.5626 (Accrued Exp)
Prepaid Exp
Prepaid Exp
€ 33,900 1.1909
€
312 0.7429
3,700 0.7473
€
Total fair value of financial instruments
F-15
678
(2,938)
(2,260)
102
—
976
4
(10)
(986)
—
—
92
(986)
976
4
$3,514 $(6,233)
$(2,719)
The impact of derivative financial instruments on the statements of income during fiscal 2012, fiscal 2011 and
fiscal 2010 are as follows:
In thousands
Fair value hedges:
Intercompany balances, primarily
short-term debt and related
interest
Interest rate swap fixed to floating
on notional of $50,000
Interest rate swap fixed to floating
on notional of $50,000
Economic hedges for which hedge
accounting was not elected:
Diesel contracts
Merchandise purchase
commitments
Gain (loss) recognized in income
Location of Gain
(Loss) Recognized in Income by Derivative
January 28,
2012
January 29,
2011
January 30,
2010
Amount of Gain (Loss)
Recognized in Income by
Derivative
Selling, general
and administrative
expenses
Interest expense, net
Interest expense, net
$4,313
$ 2,551
$(9,249)
—
—
—
—
1,092
1,422
Cost of sales, including buying and
occupancy costs
Cost of sales, including buying and
occupancy costs
951
1,188
4,490
3,256
$8,520
(6,786)
494
$(3,047)
$(1,751)
Note G. Disclosures about Fair Value of Financial Instruments
The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring
basis:
In thousands
Level 1
Assets:
January 28,
2012
January 29,
2011
Executive Savings Plan investments
$81,702
$73,925
Level 2
Assets:
Short-term investments
Foreign currency exchange contracts
Diesel fuel contracts
Liabilities:
Foreign currency exchange contracts
$94,691
6,702
1,698
$76,261
2,768
746
$ 4,217
$ 6,233
The fair value of TJX’s general corporate debt, including current installments, was estimated by obtaining market
quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality.
The fair value of long-term debt at January 28, 2012 was $936.8 million compared to a carrying value of $774.5
million. The fair value of long-term debt as of January 29, 2011 was $881.7 million compared to a carrying value of
$774.4 million. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements
that might affect TJX’s ability to settle these obligations.
TJX’s cash equivalents are stated at cost, which approximates fair value, due to the short maturities of these
instruments.
Investments designed to meet obligations under the Executive Savings Plan are invested in securities traded in
active markets and are recorded at unadjusted quoted prices.
Foreign currency exchange and diesel fuel contracts are valued using broker quotations which include observable
market information. TJX does not make adjustments to quotes or prices obtained from brokers or pricing services but
F-16
does assess the credit risk of counterparties and will adjust final valuations when appropriate. Where independent
pricing services provide fair values, TJX obtains an understanding of the methods used in pricing. As such, these
derivative instruments are classified within level 2.
Note H. Segment Information
TJX operates four business segments. In the United States, its two segments are Marmaxx (T.J. Maxx and
Marshalls) and HomeGoods. TJX Canada operates its stores in Canada (Winners, HomeSense and Marshalls), and
TJX Europe operates its stores in Europe (T.K. Maxx and HomeSense). A.J. Wright ceased to be a segment following
its consolidation.
For fiscal 2012, TJX Canada and TJX Europe accounted for 24% of TJX’s net sales, 16% of segment profit and
22% of consolidated assets. All of our stores, with the exception of HomeGoods and HomeSense, sell family apparel
and home fashions. HomeGoods and HomeSense offer exclusively home fashions. By merchandise category, we
derived approximately 60% of our sales from clothing (including footwear), 27% from home fashions and 13% from
jewelry and accessories in fiscal 2012.
TJX evaluates the performance of its segments based on “segment profit or loss,” which it defines as pre-tax
income before general corporate expense, provision (credit) for Computer Intrusion related costs, and interest
expense, net. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used
by other entities. In addition, this measure of performance should not be considered an alternative to net income or
cash flows from operating activities as an indicator of our performance or as a measure of liquidity.
F-17
Presented below is selected financial information related to our business segments:
In thousands
Net sales:
In the United States
Marmaxx
HomeGoods
A.J. Wright(1)
TJX Canada
TJX Europe
Segment profit (loss):
In the United States
Marmaxx
HomeGoods
A.J. Wright(1)
TJX Canada
TJX Europe
General corporate expense
Provision (credit) for Computer Intrusion related costs
Interest expense, net
Income from continuing operations before provision for income
taxes
Identifiable assets:
In the United States
Marmaxx
HomeGoods
A.J. Wright(1)
TJX Canada
TJX Europe
Corporate(2)
Capital expenditures:
In the United States
Marmaxx
HomeGoods
A.J. Wright(1)
TJX Canada
TJX Europe
Depreciation and amortization:
In the United States
Marmaxx
HomeGoods
A.J. Wright(1)
TJX Canada
TJX Europe
Corporate(3)
Fiscal Year Ended
January 28,
2012
January 29,
2011
January 30,
2010
$15,367,519
2,243,986
9,229
2,680,071
2,890,650
$23,191,455
$14,092,159
1,958,007
888,364
2,510,201
2,493,462
$21,942,193
$13,270,863
1,794,409
779,811
2,167,912
2,275,449
$20,288,444
$ 2,073,430
234,445
(49,291)
348,028
68,739
2,675,351
228,289
—
35,648
$ 1,875,951
186,535
(129,986)
351,989
75,849
2,360,338
168,659
(11,550)
39,137
$ 1,588,452
137,525
12,565
254,974
163,969
2,157,485
166,414
—
39,509
$ 2,411,414
$ 2,164,092
$ 1,951,562
$ 4,115,124
488,405
—
746,593
1,070,655
1,860,828
$ 8,281,605
$ 3,625,780
427,162
71,194
726,781
1,088,399
2,032,447
$ 7,971,763
$ 3,340,745
415,230
269,190
762,338
861,122
1,815,352
$ 7,463,977
$
$
$
$
458,720
77,863
—
92,846
173,901
803,330
289,921
37,881
—
59,112
96,370
2,417
485,701
$
$
$
$
360,296
46,608
29,135
66,391
204,704
707,134
272,037
35,129
18,981
54,815
74,868
2,222
458,052
$
$
$
$
214,308
25,769
34,285
38,960
115,960
429,282
262,901
32,876
19,542
49,105
67,783
3,011
435,218
(1) On December 8, 2010, the Board of Directors of TJX approved the consolidation of the A.J. Wright segment. All stores operating under the
A.J. Wright banner closed by February 13, 2011 and the conversion process of certain stores to other banners was completed during the first
quarter of fiscal 2012 (see Note C).
(2) Corporate identifiable assets consist primarily of cash, receivables, prepaid insurance, a note receivable, the trust maintained in connection
with the Executive Savings Plan and deferred taxes.
(3) Includes debt discount accretion and debt expense amortization.
F-18
Note I. Stock Incentive Plan
TJX has a stock incentive plan under which options and other share-based awards may be granted to its
directors, officers and key employees. This plan has been approved by TJX’s shareholders, and all stock
compensation awards are made under this plan. The Stock Incentive Plan, as amended with shareholder
approval, has provided for the issuance of up to 321.8 million shares with 29.6 million shares available for future
grants as of January 28, 2012. TJX issues shares under the plan from authorized but unissued common stock.
All share amounts and per share data presented have been adjusted to reflect the two-for-one stock split
distributed on February 2, 2012.
As of January 28, 2012, there was $97.8 million of total unrecognized compensation cost related to nonvested
share-based compensation arrangements granted under the plan. That cost is expected to be recognized over a
weighted-average period of two years.
Options for the purchase of common stock are granted at 100% of market price on the grant date and generally
vest in thirds over a three-year period starting one year after the grant, and have a ten-year maximum term.
The fair value of options is estimated as of the date of grant using the Black-Scholes option pricing model with
the following weighted average assumptions:
Fiscal Year
2011
2012
2010
Risk-free interest rate
Dividend yield
Expected volatility factor
Expected option life in years
Weighted average fair value of options issued
0.92% 1.57% 2.49%
1.4% 1.5% 1.3%
31.1% 32.3% 37.3%
5.0
5.0
$6.55 $5.42 $6.14
5.0
Expected volatility is based on a combination of implied volatility from traded options on our stock, and historical
volatility during a term approximating the expected term of the option granted. We use historical data to estimate
option exercises, employee termination behavior and dividend yield within the valuation model. Employee groups and
option characteristics are considered separately for valuation purposes when applicable. These distinctions did not
apply during the fiscal years presented. The expected option life represents an estimate of the period of time options
are expected to remain outstanding based upon historical exercise trends. The risk-free interest rate is for periods
within the contractual life of the option based on the U.S. Treasury yield curve in effect at the time of grant.
Stock Options: A summary of the status of TJX’s stock options and related weighted average exercise prices
(“WAEP”) is presented below (shares in thousands):
Outstanding at beginning of year
Granted
Exercised
Forfeitures
Outstanding at end of year
January 28, 2012
WAEP
Options
50,095
7,922
(15,433)
(1,640)
$15.70
26.56
13.98
20.29
Fiscal Year Ended
January 29, 2011
WAEP
Options
55,950
9,893
(14,735)
(1,013)
$13.96
20.56
12.22
17.60
January 30, 2010
WAEP
Options
63,545
9,754
(16,025)
(1,324)
$12.41
18.87
10.65
15.89
40,944
$18.27
50,095
$15.70
55,950
$13.96
Options exercisable at end of year
24,540
$15.04
31,226
$13.40
36,743
$12.00
The total intrinsic value of options exercised was $210.9 million in fiscal 2012, $143.3 million in fiscal 2011 and
$109.2 million in fiscal 2010.
F-19
The following table summarizes information about stock options outstanding that were expected to vest and
stock options outstanding that were exercisable at January 28, 2012:
Shares in thousands
Options outstanding expected to vest
Options exercisable
Aggregate
Intrinsic
Value
$163,512
$631,234
Weighted
Average
Remaining
Contract Life
8.9 years
5.3 years
Shares
15,281
24,540
Total outstanding options vested and expected to vest
39,821
$794,746
6.7 years
WAEP
$22.98
$15.04
$18.09
Options outstanding expected to vest represents total unvested options of 16.4 million adjusted for anticipated
forfeitures.
Performance-Based Restricted Stock and Performance-Based Deferred Stock Awards: TJX issues
performance-based restricted stock and performance-based deferred stock awards under the Stock Incentive Plan
which are granted without a purchase price to the recipient of the award and are subject to achievement of specified
performance criteria for a period of one to three fiscal years. The grant date fair value of the award is charged to
income ratably over the requisite service period during which the recipient must remain employed. The fair value of
the awards is determined at date of grant and assumes that performance goals will be achieved. If such goals are not
met, awards and related compensation costs recognized are reduced pro rata on a straight-line basis to zero if
threshold targets are not met.
A summary of the status of our nonvested performance-based restricted stock and performance-based deferred
stock awards and changes during fiscal 2012 is presented below:
Shares in thousands
Nonvested at beginning of year
Granted
Vested
Forfeited
Nonvested at end of year
Restricted
and
Deferred
Awards
Weighted
Average
Grant Date
Fair Value
1,942
299
(615)
(144)
1,482
$19.59
24.81
16.32
20.50
$21.91
There were 298,500 shares of performance-based restricted stock and performance-based deferred stock
awards, with a weighted average grant date fair value of $24.81, granted in fiscal 2012; 1,242,000 shares, with a
weighted average grant date fair value of $23.08, granted in fiscal 2011; and 940,500 shares with a weighted average
grant date fair value of $12.96, granted in fiscal 2010. The fair value of performance-based restricted stock and
performance-based deferred stock awards that vested was $10.0 million in fiscal 2012, $7.0 million in fiscal 2011 and
$6.7 million in fiscal 2010.
Other Awards: TJX also awards deferred shares to its outside directors under the Stock Incentive Plan. The
outside directors are awarded two annual deferred share awards, each representing shares of TJX common stock
valued at $62,500. One award vests immediately and is payable, with accumulated dividends, in stock at the earlier of
separation from service as a director or a change of control. The second award vests based on service as a director
until the annual meeting that follows the award and is payable, with accumulated dividends, in stock following the
vesting date, unless an irrevocable advance election is made whereby it is payable at the same time as the first
award. As of the end of fiscal 2012, a total of 232,434 of these deferred shares were outstanding under the plan.
Note J. Pension Plans and Other Retirement Benefits
Pension: TJX has a funded defined benefit retirement plan which covers a majority of its full-time U.S. employees
hired prior to February 1, 2006. As a result of an amendment to the plan, employees hired on or after February 1, 2006
do not participate in this plan but are eligible to receive enhanced employer contributions to their 401(k) plans. This
plan amendment has not had a material impact on pension expense in the periods presented, but is expected to
reduce net periodic pension costs gradually due to a reduction in the number of participants. Eligible employees who
F-20
had attained twenty-one years of age and completed one year of service, remain covered under the plan. No
employee contributions are required, and benefits are based principally on compensation earned in each year of
service. Our funded defined benefit retirement plan assets are invested in domestic and international equity and fixed
income securities, both directly and through investment funds. The plan does not invest in the securities of TJX. TJX
also has an unfunded supplemental retirement plan which covers certain key employees and provides additional
retirement benefits based on average compensation for certain of those employees or, alternatively based on benefits
that would be provided under the funded retirement plan absent Internal Revenue Code limitations.
Presented below is financial information relating to TJX’s funded defined benefit retirement plan (funded plan) and
its unfunded supplemental pension plan (unfunded plan) for the fiscal years indicated:
In thousands
Change in projected benefit obligation:
Projected benefit obligation at beginning of year
Service cost
Interest cost
Actuarial losses (gains)
Settlements
Benefits paid
Expenses paid
Projected benefit obligation at end of year
Accumulated benefit obligation at end of year
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contribution
Benefits paid
Settlements
Expenses paid
Funded Plan
Fiscal Year Ended
Unfunded Plan
Fiscal Year Ended
January 28,
2012
January 29,
2011
January 28,
2012
January 29,
2011
$666,356
33,858
38,567
128,154
—
(14,151)
(2,097)
$580,203
32,142
34,429
34,246
—
(12,662)
(2,002)
$49,526
1,188
2,410
3,582
—
(3,355)
—
$850,687
$666,356
$53,351
$785,402
$614,584
$46,775
$51,727
1,202
2,682
(2,727)
—
(3,358)
—
$49,526
$43,229
$
$663,591
28,454
75,000
(14,151)
—
(2,097)
$508,420
69,835
100,000
(12,662)
—
(2,002)
— $
—
3,355
(3,355)
—
—
— $
—
—
3,358
(3,358)
—
—
—
Fair value of plan assets at end of year
$750,797
$663,591
$
Reconciliation of funded status:
Projected benefit obligation at end of year
Fair value of plan assets at end of year
Funded status—excess obligation
$850,687
750,797
$666,356
663,591
$53,351
—
$ 99,890
$ 2,765
$53,351
Net liability recognized on consolidated balance sheets
$ 99,890
$ 2,765
$53,351
Amounts not yet reflected in net periodic benefit cost and
included in accumulated other comprehensive income (loss):
Prior service cost
Accumulated actuarial losses
$
— $
— $
286,939
149,034
8
12,400
$49,526
—
$49,526
$49,526
$
12
9,483
Amounts included in accumulated other comprehensive
income (loss)
$286,939
$149,034
$12,408
$ 9,495
The consolidated balance sheets reflect the funded status of the plans with any unrecognized prior service cost
and actuarial gains and losses recorded in accumulated other comprehensive income (loss). The combined net
accrued liability of $153.2 million at January 28, 2012 is reflected on the balance sheet as of that date as a current
liability of $2.4 million and a long-term liability of $150.8 million.
F-21
The combined net accrued liability of $52.3 million at January 29, 2011 is reflected on the balance sheet as of that
date as a current liability of $2.8 million and a long-term liability of $49.5 million.
The estimated prior service cost that will be amortized from accumulated other comprehensive income (loss) into
net periodic benefit cost in fiscal 2013 for both the funded and unfunded plan is immaterial. The estimated net
actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit
cost in fiscal 2013 is $24.9 million for the funded plan and $2.0 million for the unfunded plan.
Weighted average assumptions for measurement purposes for determining the obligation at the year end
measurement date:
Discount rate
Rate of compensation increase
Funded Plan
Fiscal Year Ended
Unfunded Plan
Fiscal Year Ended
January 28,
2012
January 29,
2011
January 28,
2012
January 29,
2011
4.80%
4.00%
5.75%
4.00%
4.40%
6.00%
5.25%
6.00%
At January 28, 2012 TJX changed its method for determining its discount rate by using the RATE: Link model
which TJX believes provides a more reasonable discount rate. For fiscal 2011 and prior we used the Citigroup
Pension Liability Index.
TJX made aggregate cash contributions of $78.4 million in fiscal 2012, $103.4 million in fiscal 2011 and $147.9
million in fiscal 2010 to the defined benefit retirement plan and to fund current benefit and expense payments under
the unfunded plan. TJX’s policy with respect to the qualified defined benefit plan is to fund, at a minimum, the amount
required to maintain a funded status of 80% of the applicable pension liability (the Funding Target) or such other
amount sufficient to avoid restrictions with respect to the funding of nonqualified plans under the Internal Revenue
Code. As a result of funding in fiscal 2012, we do not anticipate any required funding in fiscal 2013 for the defined
benefit retirement plan. We anticipate making contributions of $3.4 million to fund current benefit and expense
payments under the unfunded plan in fiscal 2013.
F-22
The following are the components of net periodic benefit cost and other amounts recognized in other
comprehensive income related to our pension plans:
Dollars in thousands
Net periodic pension cost:
Service cost
Interest cost
Expected return on plan assets
Settlement costs
Amortization of prior service cost
Amortization of net actuarial loss
Funded Plan
Fiscal Year Ended
January 29,
2011
January 28,
2012
January 30,
2010
January 28,
2012
Unfunded Plan
Fiscal Year Ended
January 29,
2011
January 30,
2010
$ 33,858
38,567
(49,059)
—
—
10,854
$ 32,142
34,429
(40,043)
—
—
11,172
$ 30,049
31,320
(28,222)
—
15
13,656
$ 1,188
2,410
—
—
4
666
$ 4,268
$ 1,202
2,682
—
—
81
941
$ 4,906
$
876
2,923
—
2,447
125
1,045
$ 7,416
Net periodic pension cost
$ 34,220
$ 37,700
$ 46,818
Other changes in plan assets and
benefit obligations recognized in
other comprehensive income:
Net (gain) loss
Settlement costs
Amortization of net (loss)
Amortization of prior service cost
Total recognized in other
comprehensive income
Total recognized in net periodic
benefit cost and other
comprehensive income
Weighted average assumptions for
expense purposes:
Discount rate
Expected rate of return on plan
assets
Rate of compensation increase
$148,759
—
(10,854)
—
$ 4,454
—
(11,172)
—
$ (6,866)
—
(13,656)
(15)
$ 3,582
—
(666)
(4)
$ (2,727)
—
(941)
(81)
$ 7,686
(2,447)
(1,045)
(125)
$137,905
$ (6,718)
$(20,537)
$ 2,912
$ (3,749)
$ 4,069
$172,125
$ 30,982
$ 26,281
$ 7,180
$ 1,157
$11,485
5.75%
6.00%
6.50%
5.25%
5.75%
6.50%
7.50%
4.00%
8.00%
4.00%
8.00%
4.00%
N/A
6.00%
N/A
6.00%
N/A
6.00%
TJX develops its long-term rate of return assumption by evaluating input from professional advisors taking into
account the asset allocation of the portfolio and long-term asset class return expectations, as well as long-term
inflation assumptions.
The unrecognized gains and losses in excess of 10% of the projected benefit obligation are amortized over the
average remaining service life of participants. In addition, for the unfunded plan, unrecognized actuarial gains and
losses that exceed 30% of the projected benefit obligation are fully recognized in net periodic pension cost.
The following is a schedule of the benefits expected to be paid in each of the next five fiscal years and in the
aggregate for the five fiscal years thereafter:
In thousands
Fiscal Year
2013
2014
2015
2016
2017
2018 through 2022
Funded Plan
Expected Benefit Payments
Unfunded Plan
Expected Benefit Payments
$ 20,849
23,260
25,854
28,730
32,027
214,986
$ 3,421
3,141
3,089
2,110
4,206
20,137
F-23
The following table presents the fair value hierarchy for pension and postretirement assets measured at fair
value on a recurring basis as of January 28, 2012:
In thousands
Asset category:
Short-term investments
Equity Securities:
Domestic equity
International equity
Fixed Income Securities:
Corporate and government bond funds
Common/Collective Trusts
Limited Partnerships
Fair value of plan assets
Funded Plan
Level 1
Level 2
Level 3
Total
$ 82,220 $
— $
— $ 82,220
98,386
44,679
—
—
—
—
98,386
44,679
31,349
—
— 467,346
—
—
14,775
— 12,042
31,349
482,121
12,042
$225,285 $498,695 $26,817 $750,797
The following table presents the fair value hierarchy for pension and postretirement assets measured at fair
value on a recurring basis as of January 29, 2011:
In thousands
Asset category:
Short-term investments
Equity Securities:
Domestic equity
International equity
Fixed Income Securities:
Corporate and government bond funds
Common/Collective Trusts
Limited Partnerships
Fair value of plan assets
Funded Plan
Level 1
Level 2
Level 3
Total
$108,414 $
— $
— $108,414
83,793
37,016
—
—
—
—
83,793
37,016
—
25,968
— 381,691
—
—
16,100
— 10,609
25,968
397,791
10,609
$229,223 $407,659 $26,709 $663,591
The following table presents a reconciliation of level 3 plan assets measured at fair value for the year ended
January 28, 2012:
In thousands
Balance as of January 30, 2010
Earned income, net of management expenses
Unrealized gain on investment
Purchases, sales, issuances and settlements, net
Balance as of January 29, 2011
Earned income, net of management expenses
Unrealized gain on investment
Purchases, sales, issuances and settlements, net
Balance as of January 28, 2012
Common/Collective Trusts
Limited Partnerships
$19,817
(269)
2,233
(5,681)
16,100
517
1,427
(3,269)
$14,775
$ 7,779
(416)
2,896
350
10,609
230
2,291
(1,088)
$12,042
Pension plan assets are reported at fair value. Investments in equity securities traded on a national securities
exchange are valued at the composite close price, as reported in the Wall Street Journal, as of the financial
statement date. This information is provided by the independent pricing services IDC, Bloomberg and Reuters.
Certain corporate and government bonds are valued at the closing price reported in the active market in
which the bond is traded. Other bonds are valued based on yields currently available on comparable securities
of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond
is valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of
similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and
liquidity risks. All bonds are priced by IDC, JP Morgan and Reuters.
F-24
The investments in the limited partnerships are stated at the fair value of the Plan’s partnership interest
based on information supplied by the partnerships as compared to financial statements of
the limited
partnership or other fair value information as determined by management. Any cash equivalents or short-term
investments are stated at cost which approximates fair value. The fair value of the investments in the common/
collective trusts is determined based on net asset value as reported by their fund managers.
The following is a summary of our target allocation for plan assets along with the actual allocation of plan
assets as of the valuation date for the fiscal years presented:
Actual Allocation for
Fiscal Year Ended
January 28,
2012
January 29,
2011
Target Allocation
Equity securities
Fixed income
All other—primarily cash
50%
50%
—
44%
46%
10%
43%
41%
16%
We employ a total return investment approach whereby a mix of equities and fixed income investments is
used to seek to maximize the long-term return on plan assets with a prudent level of risk. Risks are sought to be
mitigated through asset diversification and the use of multiple investment managers.
Investment risk is
measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability
measurements and periodic asset/liability studies.
TJX also sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code for all
eligible U.S. employees and a similar type plan for eligible employees in Puerto Rico. Assets under the plans
totaled $787.1 million as of December 31, 2011 and $776.0 million as of December 31, 2010 and are invested in
a variety of funds. Employees may contribute up to 50% of eligible pay, subject to limitation. TJX matches
employee contributions, up to 5% of eligible pay, at rates generally ranging from 25% to 50%, based upon
TJX’s performance. Employees hired after February 1, 2006 are eligible for participation in the savings plans with
an enhanced matching formula beginning five years after hire date. TJX contributed $11.8 million in fiscal 2012,
$13.9 million in fiscal 2011 and $13.3 million in fiscal 2010 to the employee savings plans. Employees cannot
invest their contributions in the TJX stock fund option in the plans, and may elect to invest up to only 50% of
TJX’s contribution in the TJX stock fund. The TJX stock fund has no other trading restrictions. The TJX stock
fund represents 6.6% of plan investments at December 31, 2011, 4.7% at December 31, 2010 and 4.5% at
December 31, 2009.
TJX also has a nonqualified savings plan for certain U.S. employees. TJX matches employee deferrals at
various rates which amounted to $2.6 million in fiscal 2012, $2.4 million in fiscal 2011 and $1.9 million in fiscal
2010. Although the plan is unfunded, in order to help meet its future obligations TJX transfers an amount equal
to employee deferrals and the related company match to a separate “rabbi” trust. The trust assets, which are
invested in a variety of mutual funds, are included in other assets on the balance sheets.
In addition to the plans described above, TJX also maintains retirement/deferred savings plans for eligible
associates at its foreign subsidiaries. We contributed $5.8 million for these plans in fiscal 2012, $5.2 million in
fiscal 2011 and $4.6 million in fiscal 2010.
Multiemployer Pension plans: TJX contributes to the National Retirement Fund (EIN #13-6130178) a
multiemployer defined benefit pension plan under the terms of collective-bargaining agreements that cover union-
represented employees. TJX contributed $10.8 million in fiscal 2012, $9.9 million in fiscal 2011 and $9.2 million in
fiscal 2010 to the fund. TJX was listed in the plans’ forms 5500 as providing more than 5% of the total contributions
for the plan year ending December 31, 2010. The Pension Protection Act Zone Status of the plan is Critical and a
rehabilitation plan has been implemented.
Postretirement Medical: TJX has an unfunded postretirement medical plan that provides limited postretirement
medical and life insurance benefits to retirees who participate in its retirement plan and who retired at age 55 or older
F-25
with ten or more years of service. During the fourth quarter of fiscal 2006, TJX eliminated this benefit for all active
associates and modified the benefit to cover only retirees enrolled in the plan at that time. The plan amendment
replaces the previous medical benefits with a defined amount (up to $35.00 per month) that approximates the cost of
enrollment in the Medicare Plan for retirees enrolled in the plan at the time of modification.
TJX paid $217,000 of benefits in fiscal 2012 and will pay similar amounts over the next several years. The
liability as of January 28, 2012 is estimated at $1.4 million, of which $1.2 million is
postretirement medical
included in non-current liabilities on the balance sheet.
The amendment to plan benefits in fiscal 2006 resulted in a negative plan amendment of $46.8 million which
is being amortized into income over the average remaining life of the active plan participants. The unamortized
balance of $19.9 million as of January 28, 2012 is included in accumulated other comprehensive income (loss) of
which $3.8 million will be amortized into income in fiscal 2013. During fiscal 2012, there was a pre-tax net benefit
of $3.4 million reflected in the consolidated statements of income as it relates to this post retirement medical
plan.
Note K. Long-Term Debt and Credit Lines
The table below presents long-term debt, exclusive of current installments, as of January 28, 2012 and
January 29, 2011. All amounts are net of unamortized debt discounts. Capital lease obligations are separately
presented in Note M.
In thousands
General corporate debt:
January 28,
2012
January 29,
2011
4.20% senior unsecured notes, maturing August 15, 2015 (effective interest rate of
4.20% after reduction of unamortized debt discount of $19 and $24 in fiscal
2012 and 2011, respectively)
6.95% senior unsecured notes, maturing April 15, 2019 (effective interest rate of
6.98% after reduction of unamortized debt discount of $505 and $576 in fiscal
2012 and 2011, respectively)
Long-term debt, exclusive of current installments
$399,981
$399,976
374,495
374,424
$774,476
$774,400
The aggregate maturities of long-term debt, exclusive of current installments at January 28, 2012 are as follows:
In thousands
Fiscal Year
2014
2015
2016
2017
Later years
Less amount representing unamortized debt discount
Aggregate maturities of long-term debt, exclusive of current installments
Long-Term
Debt
$
—
—
400,000
—
375,000
(524)
$774,476
On April 7, 2009, TJX issued $375 million aggregate principal amount of 6.95% ten-year notes and used the
proceeds from the 6.95% notes offering to repurchase additional common stock under its stock repurchase
program in fiscal 2010. Also in April 2009, prior to the issuance of the 6.95% notes, TJX entered into a rate-lock
agreement to hedge the underlying treasury rate of those notes. The cost of this agreement is being amortized to
interest expense over the term of the 6.95% notes and results in an effective fixed rate of 7.00% on those notes.
On July 23, 2009, TJX issued $400 million aggregate principal amount of 4.20% six-year notes. TJX used a
portion of the proceeds from the sale of the notes to refinance its C$235 million term credit facility on August 10,
2009, prior to its scheduled maturity, and used the remainder, together with funds from operations, to repay its
$200 million 7.45% notes due December 15, 2009, at maturity. Also in July 2009, prior to the issuance of the
4.20% notes, TJX entered into a rate-lock agreement to hedge the underlying treasury rate on $250 million of
those notes. The cost of this agreement is being amortized to interest expense over the term of the 4.20% notes
and results in an effective fixed rate of 4.19% on the notes.
F-26
In February 2001, TJX issued $517.5 million zero coupon convertible subordinated notes due in February
2021 and raised gross proceeds of $347.6 million. The issue price of the notes represented a yield to maturity of
2% per year. During fiscal 2010, TJX called for the redemption of these notes at the original issue price plus
accrued original issue discount, and 462,057 notes with a carrying value of $365.1 million were converted into
30.2 million shares of TJX common stock at a rate of 32.667 shares (65.334 on a two-for-one split basis) per
note. TJX paid $2.3 million to redeem the remaining 2,886 notes outstanding that were not converted. Prior to
fiscal 2010, a total of 52,557 notes were either converted into common shares of TJX or put back to TJX.
TJX traditionally has funded seasonal merchandise requirements through cash generated from operations,
short-term bank borrowings and the issuance of short-term commercial paper. TJX had two $500 million
revolving credit facilities at January 28, 2012 one which matures in May 2016 and one which matures in May
2013. TJX also had two $500 million revolving credit facilities at January 29, 2011. One of the $500 million
facilities at January 29, 2011 matured in May 2011 and was replaced at that time with a new $500 million, five-
year revolving credit facility with similar terms and provisions but updated for market pricing. The agreement
maturing in 2013 requires the payment of 17.5 basis points annually on the unused committed amount. The five-
year agreement requires the payment of 12.5 basis points annually on the unused committed amount. There
were no U.S. short-term borrowings outstanding during fiscal 2012 or fiscal 2011. These agreements have no
compensating balance requirements and have various covenants including a requirement of a specified ratio of
debt to earnings and serve as backup to the commercial paper program. There were no outstanding amounts
under these credit facilities as of January 28, 2012 or January 29, 2011.
As of January 28, 2012 and January 29, 2011, TJX’s foreign subsidiaries had uncommitted credit facilities.
TJX Canada had two credit lines, a C$10 million facility for operating expenses and a C$10 million letter of credit
facility. As of January 28, 2012 and January 29, 2011, there were no amounts outstanding on the Canadian credit
line for operating expenses and there were no short-term borrowings during fiscal 2012 or fiscal 2011. As of
January 28, 2012, TJX Europe had a credit line of £20 million. There were no borrowings under this credit line in
fiscal 2012 and the maximum amount outstanding under this U.K. line was £1.0 million in fiscal 2011. There were
no outstanding borrowings on this U.K. credit line as of January 28, 2012 or January 29, 2011.
Note L.
Income Taxes
The provision for income taxes includes the following:
In thousands
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
Provision for income taxes
January 28,
2012
Fiscal Year Ended
January 29,
2011
January 30,
2010
$554,847
126,237
99,463
$510,629
113,573
105,489
$465,799
104,621
114,195
131,527
6,202
(2,952)
$915,324
91,568
1,731
1,572
$824,562
54,544
1,773
(2,942)
$737,990
Income from continuing operations before income taxes includes foreign pre-tax income of $319.4 million in
fiscal 2012, $354.2 million in fiscal 2011, and $342.3 million in fiscal 2010.
F-27
TJX had net deferred tax (liabilities) assets as follows:
In thousands
Deferred tax assets:
Foreign tax credit carryforward
Reserve for former operations
Pension, stock compensation, postretirement and employee benefits
Leases
Foreign currency and hedging
Computer Intrusion reserve
Other
Total deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
Capitalized inventory
Tradename
Undistributed foreign earnings
Other
Total deferred tax liabilities
Net deferred tax (liability)
Fiscal Year Ended
January 28,
2012
January 29,
2011
4,555
265,397
39,778
3,407
5,699
65,371
$ 24,861 $ 43,088
17,641
214,578
39,567
3,973
6,285
61,421
$ 409,068 $ 386,553
46,864
42,873
201,012
14,322
$ 360,629 $ 274,725
45,871
42,873
183,906
15,011
$ 665,700 $ 562,386
$(256,632) $(175,833)
The fiscal 2012 net deferred tax liability is presented on the balance sheet as a current asset of $105.9 million and
a non-current liability of $362.5 million. The fiscal 2011 net deferred tax liability is presented on the balance sheet as a
current asset of $66.1 million and a non-current liability of $241.9 million. TJX has provided for deferred U.S. taxes on
all undistributed earnings from its Winners Canadian subsidiary,
its Marshalls Puerto Rico subsidiary and its
subsidiaries in Italy, India, Hong Kong, and Australia through January 28, 2012. The net deferred tax liability
summarized above includes deferred taxes relating to temporary differences at our foreign operations and amounted
to a $17.0 million net liability as of January 28, 2012, and $20.1 million net liability as of January 29, 2011.
No income taxes have been provided on the approximately $346 million of undistributed earnings of foreign
subsidiaries as of January 28, 2012, because such earnings are considered to be indefinitely reinvested in the
business. A determination of the amount of unrecognized deferred tax liability related to the undistributed earnings is
not practicable because of the complexities associated with the hypothetical calculations.
TJX established valuation allowances against certain deferred tax assets, primarily related to state tax net
operating losses from non operational subsidiaries, which may not be realized in future years. The amount of the
valuation allowances was $5.9 million as of January 28, 2012 and $4.9 million as of January 29, 2011.
TJX’s worldwide effective income tax rate was 38.0% for fiscal 2012, 38.1% for fiscal 2011 and 37.8% for fiscal
2010. The difference between the U.S. federal statutory income tax rate and TJX’s worldwide effective income tax
rate is reconciled below:
U.S. federal statutory income tax rate
Effective state income tax rate
Impact of foreign operations
All Other
Worldwide effective income tax rate
January 28,
2012
Fiscal Year Ended
January 29,
2011
January 30,
2010
35.0%
4.1
(0.6)
(0.5)
38.0%
35.0%
4.1
(0.5)
(0.5)
38.1%
35.0%
4.3
(0.6)
(0.9)
37.8%
The decrease in TJX’s effective rate for fiscal 2012 as compared to fiscal 2011 is primarily attributed to the
resolution of U.S. Federal tax audit partially offset by an increase in the U.S. federal and state tax reserves. The
increase in our effective income tax rate for fiscal 2011 as compared to fiscal 2010 is primarily attributed to the effects
F-28
of repatriation of cash from Europe and the increase in state tax reserves, partially offset by the finalization of an
advance pricing agreement between Canada and the United States and a favorable Canadian court ruling regarding
withholding taxes.
TJX had net unrecognized tax benefits of $116.6 million as of January 28, 2012, $122.9 million as of January 29,
2011 and $121.0 million as of January 30, 2010.
A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
In thousands
Balance at beginning of year
Additions for uncertain tax positions taken in current year
Additions for uncertain tax positions taken in prior years
Reductions for uncertain tax positions taken in prior years
Reductions resulting from lapse of statute of limitations
Settlements with tax authorities
Balance at end of year
January 28,
2012
$123,094
1,131
63,463
(40,558)
—
(2,625)
Fiscal Year Ended
January 29,
2011
$191,741
3,968
23,730
(92,483)
(1,123)
(2,739)
January 30,
2010
$202,543
59,301
1,444
(53,612)
(3,267)
(14,668)
$144,505
$123,094
$191,741
Included in the gross amount of unrecognized tax benefits are items that will not impact future effective tax rates
upon recognition. These items amount to $20.0 million as of January 28, 2012, $11.0 million as of January 29, 2011
and $57.6 million as of January 30, 2010.
TJX is subject to U.S. federal income tax as well as income tax in multiple state, local and foreign jurisdictions. In
nearly all jurisdictions, the tax years through fiscal 2001 are no longer subject to examination.
TJX’s accounting policy is to classify interest and penalties related to income tax matters as part of income tax
expense. The amount of interest and penalties expensed was $5.8 million for the year ended January 28, 2012;
$1.9 million for the year ended January 29, 2011 and $7.6 million for the year ended January 30, 2010. The accrued
amounts for interest and penalties are $33.0 million as of January 28, 2012, $34.6 million as of January 29, 2011 and
$50.6 million as of January 30, 2010.
Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law,
expirations of statute of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions, it is
reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may
change materially from those represented on the financial statements as of January 28, 2012. During the next
twelve months, it is reasonably possible that such circumstances may occur that would have a material effect on
previously unrecognized tax benefits. As a result, the total net amount of unrecognized tax benefits may decrease,
which would reduce the provision for taxes on earnings by a range estimated at $1.0 million to $50 million.
Note M. Commitments
TJX is committed under long-term leases related to its continuing operations for the rental of real estate and
fixtures and equipment. Most of our leases are store operating leases with a ten-year initial term and options to
extend for one or more five-year periods. TJX Europe generally enters leases for ten to fifteen years with five or
ten-year kick-out options. Many of our leases contain escalation clauses and some contain early termination
penalties. In addition, we are generally required to pay insurance, real estate taxes and other operating expenses
including,
in some cases, rentals based on a percentage of sales. These expenses in the aggregate were
approximately one-third of the total minimum rent in fiscal 2012, fiscal 2011 and fiscal 2010 and are not included in
the table below.
F-29
The following is a schedule of future minimum lease payments for continuing operations as of January 28, 2012:
In thousands
Fiscal Year
2013
2014
2015
2016
2017
Later years
Total future minimum lease payments
Less amount representing interest
Net present value of minimum capital lease payments
Capital
Lease
Operating
Leases
$ 3,912 $1,124,042
1,057,770
3,912
941,404
3,912
819,481
3,586
—
680,626
— 2,361,779
15,322 $6,985,102
2,205
$13,117
The capital
lease relates to a 283,000-square-foot portion of TJX’s home office facility. Rental payments
commenced June 1, 2001, and we recognized a capital lease asset and related obligation equal to the present value
of the lease payments of $32.6 million.
Rental expense under operating leases for continuing operations amounted to $1,086.0 million for fiscal 2012,
$1,031.4 million for fiscal 2011 and $962.0 million for fiscal 2010. Rental expense includes contingent rent and is
reported net of sublease income. Contingent rent paid was $12.9 million in fiscal 2012, $12.0 million in fiscal 2011 and
$13.0 million in fiscal 2010. Sublease income was $1.3 million in fiscal 2012, $1.2 million in fiscal 2011 and $1.3 million
in fiscal 2010. The total net present value of TJX’s minimum operating lease obligations approximated $5,951.8 million
as of January 28, 2012.
TJX had outstanding letters of credit totaling $36.5 million as of January 28, 2012 and $39.1 million as of
January 29, 2011. Letters of credit are issued by TJX primarily for the purchase of inventory.
Note N. Accrued Expenses and Other Liabilities, Current and Long Term
The major components of accrued expenses and other current liabilities are as follows:
In thousands
Employee compensation and benefits, current
Computer Intrusion reserve
Reserve for former operations — short term
Rent, utilities and occupancy, including real estate taxes
Merchandise credits and gift certificates
Insurance
Sales tax collections and V.A.T. taxes
All other current liabilities
Accrued expenses and other current liabilities
Fiscal Year Ended
January 28,
2012
$ 403,200
15,863
13,338
157,303
189,554
29,558
119,293
436,596
January 29,
2011
$ 375,013
17,340
30,598
164,459
167,675
39,518
93,234
460,114
$1,364,705
$1,347,951
All other current liabilities include accruals for advertising, property additions, dividends, freight, interest, reserve
for sales returns, purchased services, and other items, each of which are individually less than 5% of current liabilities.
F-30
The major components of other long-term liabilities are as follows:
In thousands
Employee compensation and benefits, long term
Reserve for former operations — long term
Accrued rent
Landlord allowances
Tax reserve, long term
Long-term liabilities — other
Other long-term liabilities
Fiscal Year Ended
January 28,
2012
January 29,
2011
$302,217
32,043
163,630
82,465
249,566
31,847
$861,768
$209,042
24,097
165,284
76,236
179,758
54,904
$709,321
Note O. Contingent Obligations and Contingencies
Contingent Obligations: TJX has contingent obligations on leases, for which it was a lessee or guarantor, which
were assigned to third parties without TJX being released by the landlords. Over many years, we have assigned
numerous leases that we originally leased or guaranteed to a significant number of third parties. With the exception of
leases of former businesses for which we have reserved, we have rarely had a claim with respect to assigned leases,
and accordingly, we do not expect that such leases will have a material adverse impact on our financial condition,
results of operations or cash flows. We do not generally have sufficient information about these leases to estimate our
potential contingent obligations under them, which could be triggered in the event that one or more of the current
tenants does not fulfill their obligations related to one or more of these leases.
TJX also has contingent obligations in connection with certain assigned or sublet properties that TJX is able to
estimate. We estimate that the undiscounted obligations of (i) leases of former operations not included in our reserve
for former operations and (ii) properties of our former operations that we would expect to sublet, if the subtenants did
not fulfill their obligations, are approximately $105 million as of January 28, 2012. We believe that most or all of these
contingent obligations will not revert to us and, to the extent they do, will be resolved for substantially less due to
mitigating factors.
TJX is a party to various agreements under which we may be obligated to indemnify the other party with respect
to breach of warranty or losses related to such matters as title to assets sold, specified environmental matters or
certain income taxes. These obligations are typically limited in time and amount. There are no amounts reflected in
our balance sheets with respect to these contingent obligations.
Contingencies: TJX is involved from time to time in claims, proceedings and litigation arising in the ordinary
course of business. Among these, TJX is a defendant in several lawsuits filed in federal and state courts in California,
Nevada, New York and Texas purportedly brought as class or collective actions on behalf of various groups of current
and former salaried and hourly associates in the U.S. The lawsuits allege violations of the Fair Labor Standards Act
and of state wage and hour statutes, including alleged misclassification of positions as exempt from overtime and
alleged entitlement to additional wages for alleged off-the-clock work by hourly employees. The lawsuits seek
unspecified monetary damages, injunctive relief and attorneys’ fees. TJX is vigorously defending these claims. At this
time, TJX is not able to predict the outcome of these lawsuits or the amount of any loss that may arise from them.
Note P. Supplemental Cash Flows Information
The cash flows required to satisfy obligations of former operations as discussed in Note C, are classified as a
reduction in cash provided by operating activities. There are no remaining operating activities relating to these
operations.
F-31
TJX’s cash payments for interest and income taxes and non-cash investing and financing activities are as follows:
In thousands
Cash paid for:
Interest on debt
Income taxes
Changes in accrued expenses due to:
Dividends payable
Property additions
Non-cash investing and financing activity:
Conversion of zero coupon convertible notes
January 28,
2012
Fiscal Year Ended
January 29,
2011
January 30,
2010
$ 46,691
781,170
$ 48,501
787,273
$ 30,638
494,169
$ 13,018
(23,746)
$ 9,675
14,568
$ 3,829
37,060
$
— $
— $365,088
There were no non-cash financing or investing activities during fiscal 2012 and fiscal 2011.
Note Q. Selected Quarterly Financial Data (Unaudited)
Presented below is selected quarterly consolidated financial data for fiscal 2012 and fiscal 2011 which was
prepared on the same basis as the audited consolidated financial statements and includes all adjustments necessary
to present fairly, in all material respects, the information set forth therein on a consistent basis.
In thousands except per share amounts
Fiscal Year Ended January 28, 2012
Net sales
Gross earnings(2)
Income from continuing operations
Net income
Income from continuing operations—As Adjusted(3)
Basic earnings per share
Diluted earnings per share
Net income—As Adjusted(3)
Basic earnings per share
Diluted earnings per share
Income from continuing operations—As Reported
Basic earnings per share
Diluted earnings per share
Net income—As Reported
Basic earnings per share
Diluted earnings per share
Fiscal Year Ended January 29, 2011
Net sales
Gross earnings(2)
Income from continuing operations(4)
Net income(5)
Income from continuing operations—As Adjusted(3)
Basic earnings per share
Diluted earnings per share
Net income—As Adjusted(3)
Basic earnings per share
Diluted earnings per share
Income from continuing operations—As Reported
Basic earnings per share
Diluted earnings per share
Net income—As Reported
Basic earnings per share
Diluted earnings per share
First
Quarter(1)
Second
Quarter
Third
Quarter
Fourth
Quarter
$5,220,295 $5,468,274 $5,793,128 $6,709,758
1,825,389
475,314
475,314
1,393,037
265,951
265,951
1,492,239
348,338
348,338
1,626,541
406,487
406,487
0.34
0.34
0.34
0.34
0.69
0.67
0.69
0.67
0.46
0.45
0.46
0.45
0.91
0.90
0.91
0.90
0.54
0.53
0.54
0.53
1.08
1.06
1.08
1.06
0.63
0.62
0.63
0.62
0.63
0.62
0.63
0.62
$5,016,540 $5,068,080 $5,525,847 $6,331,726
1,665,553
330,803
334,414
1,519,443
372,309
372,309
1,367,866
331,434
331,434
1,348,870
304,984
304,984
0.41
0.40
0.41
0.40
0.81
0.80
0.81
0.80
0.38
0.37
0.38
0.37
0.76
0.74
0.76
0.74
0.47
0.46
0.47
0.46
0.94
0.92
0.94
0.92
0.42
0.42
0.43
0.42
0.84
0.83
0.85
0.84
(1) First quarter of fiscal 2012 includes operating results of A.J. Wright. See Note C.
(2) Gross earnings equal net sales less cost of sales, including buying and occupancy costs.
F-32
(3) Adjusted for two-for-one stock split announced by TJX on January 5, 2012. See Note A.
(4) The fourth quarter of fiscal 2011 income from continuing operations includes a pre-tax $141 million negative impact from the A.J. Wright
segment, or $0.11 per share (see Note C). The second quarter of fiscal 2011 income from continuing operations includes a pre-tax $12 million
benefit from a reduction in TJX’s provision for Computer Intrusion related costs, or $0.01 per share (see Note B).
(5) The fourth quarter of fiscal 2011 net income includes a $4 million, net of income taxes of $2 million (immaterial per share impact), benefit from
a reduction in TJX’s reserve related to former businesses.
F-33
Carol Meyrowitz
Chief Executive Officer,
The TJX Companies, Inc.
John F. O’Brien
Lead Director,
The TJX Companies, Inc.
Retired Chief Executive Officer,
Allmerica Financial Corporation
Willow B. Shire
Executive Consultant,
Orchard Consulting Group
Board of Directors
Bernard Cammarata
Chairman of the Board,
The TJX Companies, Inc.
Zein Abdalla
Chief Executive Officer,
PepsiCo Europe
José B. Alvarez
Member of the Faculty,
Harvard Business School
Alan M. Bennett
Retired President and
Chief Executive Officer,
H&R Block Inc.
David T. Ching
Senior Vice President and
Chief Information Officer,
Safeway Inc.
Michael F. Hines
Former Executive Vice President and
Chief Financial Officer,
Dick’s Sporting Goods, Inc.
Amy B. Lane
Retired Managing Director,
Global Retailing
Investment Banking Group,
Merrill Lynch & Co., Inc.
Committees of the
Board of Directors
EXECUTIVE COMMITTEE
Bernard Cammarata, Chairman
Amy B. Lane
John F. O’Brien
AUDIT COMMITTEE
Michael F. Hines, Chairman
José B. Alvarez
David T. Ching
Amy B. Lane
EXECUTIVE COMPENSATION
COMMITTEE
Alan M. Bennett, Chairman
José B. Alvarez
John F. O’Brien
Willow B. Shire
FINANCE COMMITTEE
Amy B. Lane, Chairperson
Alan M. Bennett
Michael F. Hines
CORPORATE GOVERNANCE
COMMITTEE
Willow B. Shire, Chairperson
Zein Abdalla
Alan M. Bennett
David T. Ching
Senior Corporate Officers
Bernard Cammarata
Chairman of the Board
Carol Meyrowitz
Chief Executive Officer
Ernie Herrman
President
SENIOR EXECUTIVE
VICE PRESIDENTS
Jeffrey Naylor
Chief Administrative Officer
Michael MacMillan
Group President
Jerome R. Rossi
Group President
Richard Sherr
Group President
Nan Stutz
Group President
EXECUTIVE VICE PRESIDENTS
Gregorio R. Flores
Chief Human Resources Officer
Scott Goldenberg
Chief Financial Officer
Kathy S. Lane
Chief Information Officer
Peter Lindenmeyer
Chief Logistics Officer
Louis Luciano
Merchandise Coaching and
Development
Ann McCauley
General Counsel and Secretary
SENIOR VICE PRESIDENTS
DIVISIONAL LEADERSHIP
The Marmaxx Group*
Richard Sherr
TJX Group President
HomeGoods
Nan Stutz
TJX Group President
Ken Canestrari
President
TJX Canada**
Nan Stutz
TJX Group President
Douglas Mizzi
President
TJX Europe***
Michael MacMillan
TJX Group President
Combination of T.J. Maxx
*
and Marshalls
**
Combination of Winners/
HomeSense/Marshalls
***
Combination of T.K. Maxx and
HomeSense
Alfred Appel
Corporate Tax and Insurance
Marc Boesch
Global Procurement
Elaine Boltz
E-Commerce
Norman Cantin
Merchandising
Amy Fardella
Global Talent and Organizational
Development
Paul Kangas
Enterprise Risk Management and
Chief Compliance Officer
Sherry Lang
Global Communications
Christina Lofgren
Real Estate and Property
Development
Nancy Maher
Associate Engagement
Manuela Millington
California Buying Office
Laura Mulcahy
IT Development
John Reichelt
Global Enterprise Architecture
Mary B. Reynolds
Treasurer
David Spooner
Application Development
George Wilson
Corporate Controller
Barry Zelman
Brand Development
Shareholder Information
Transfer Agent and Registrar
Investor Relations
COMMON STOCK
Computershare
(formerly BNY Mellon Shareowner Services)
1-866-606-8365
1-800-231-5469 (TDD services for the hearing impaired)
1-201-680-6578 (Outside the U.S.)
Analysts and investors seeking financial data
about the Company are asked to visit our corporate
website at www.tjx.com or to contact:
Sherry Lang
Senior Vice President,
Global Communications
508-390-2323
ADDRESS SHAREHOLDER INQUIRIES AND
SEND CERTIFICATES FOR TRANSFER AND
ADDRESS CHANGES TO:
Executive Offices
Framingham, Massachusetts 01701
Computershare
P.O. Box 358015
Pittsburgh, PA 15252-8015
E-MAIL ADDRESS:
shrrelations@bnymellon.com
Computershare website:
www.bnymellon.com/shareowner/equityaccess
Trustees
Public Notes
4.20% Notes
6.95% Notes
U.S. Bank National Association
Independent Registered Public
Accounting Firm
PricewaterhouseCoopers LLP
Independent Counsel
Ropes & Gray LLP
Form 10-K
Information concerning the Company’s operations
and financial position is provided in this report and in
the Form 10-K filed with the Securities and Exchange
Commission. A copy of the Form 10-K is included in
this report and additional copies may be obtained
without charge by accessing the Company’s website
at www.tjx.com or by writing or calling:
The TJX Companies, Inc.
Global Communications
770 Cochituate Road
Framingham, MA 01701
508-390-2323
Public Information and SEC Filings:
Visit our corporate website: www.tjx.com
For the store nearest you, call or
visit us online at:
UNITED STATES
T.J. Maxx: 1-800-2-TJMAXX
www.tjmaxx.com
Marshalls: 1-800-MARSHALLS
www.marshallsonline.com
HomeGoods: 1-800-614-HOME
www.homegoods.com
TJX CANADA
Winners: 1-800-646-9466
www.winners.ca
HomeSense: 1-800-646-9466
www.homesense.ca
Marshalls: 1-800-646-9466
www.marshallscanada.ca
TJX EUROPE
T.K. Maxx: 01923 473561 (U.K. and Ireland)
www.tkmaxx.com (U.K. and Ireland)
T.K. Maxx: 0211 88223100 (Germany)
www.tkmaxx.de (Germany)
T.K. Maxx: 022 55 10 700 (Poland)
www.tkmaxx.pl (Poland)
HomeSense: 01923 473561 (U.K.)
www.homesense.com (U.K.)
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 four major divisions: The Marmaxx Group, HomeGoods, TJX Canada and TJX
Europe. With over 2,900 stores and approximately 168,000 Associates, we see ourselves as a global, off-price, value
retailer, and our mission is to deliver great value to our customers through the combination of fashion, brand, quality,
and price. We operate with a rapidly changing assortment of brand name merchandise at prices that are 20% to 60%
less than department and specialty store regular prices, every day. We continue to broaden our customer reach by
appealing to a wider demographic, with our core target customer being a middle- to upper-middle-income shopper,
who is fashion and value conscious and fits the same profile as a department store shopper.
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
983 stores in 48 states and Puerto Rico at year-end 2011.
T.J. Maxx offers family apparel and home fashions with
expanded fine jewelry and accessories departments and in
some stores, The Runway, a high-end designer department.
T.J. Maxx stores average approximately 29,000 square
feet in size.
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
884 stores in 43 states and Puerto Rico at 2011’s year
end. Marshalls offers family apparel and home fashions,
including expanded footwear and men’s departments and
The CUBE, a department specifically for juniors. Marshalls
also operates the Marshalls Shoe Shop, a standalone store
featuring shoes and accessories. Marshalls stores average
approximately 31,000 square feet in size.
HomeGoods, introduced in 1992, is a destination for off-
price home fashions, including giftware, home basics, accent
furniture, lamps, rugs and wall décor. HomeGoods operates
in a standalone and superstore format, which couples
HomeGoods with T.J. Maxx or Marshalls. At 2011’s year end,
HomeGoods operated 374 stores in 37 states and Puerto
Rico, with standalone stores averaging approximately 27,000
square feet in size.
Winners is the leading off-price family apparel and home
fashions retailer in Canada, acquired by TJX in 1990. Select
Winners stores offer fine jewelry and some feature The Runway,
a high-end designer department. Winners operated 216 stores
at 2011’s year end, which average approximately 29,000 square
feet in size.
HomeSense introduced the home fashions off-price concept
to Canada in 2001. This chain offers a broad array of home
basics and home décor merchandise. It operates in a
standalone and superstore format, which pairs HomeSense
with Winners. At 2011’s year end, HomeSense operated
86 stores in Canada, with standalone stores averaging
approximately 25,000 square feet in size.
Marshalls launched in Canada in March 2011. In Canada,
Marshalls offers great, off-price values on family apparel with
an expanded footwear department and The CUBE, an exciting
juniors department. Marshalls operated 6 stores in Canada
at 2011’s year end, averaging approximately 33,000 square
feet in size.
TJX EUROPE
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 family apparel as
well as home fashions at great values, and ended 2011 with
332 stores, which average approximately 32,000 square
feet in size.
HomeSense introduced the off-price home fashions concept
to the U.K. in 2008. This business offers our U.K. customers
great values on top-quality home fashions, including
home basics and home décor merchandise. At 2011’s
year end, HomeSense operated 24 stores, each averaging
approximately 21,000 square feet in size.
The TJX Companies, Inc.
770 Cochituate Road
Framingham, MA 01701
508-390-1000
www.tjx.com