THE TJX COMPANIES, INC.
RETAILER
for TODAY &
TOMORROW
ANNUAL REPORT
2012
TJX IS IN AN
EXCELLENT POSITION
as a RETAILER
FOR TODAY & TOMORROW.
With a long history of steady sales and profit growth, we are focused on four large,
powerful divisions. Capitalizing on the extreme flexibility of our off-price business
model, we offer value-conscious consumers compelling prices on great brands, quality
and fashion in apparel and for the home. Our increases in customer traffic, which drove our
comparable store sales growth in 2012, demonstrate that our value proposition highly
resonates with consumers, not only in the U.S., but in Canada and Europe as well. Further,
we believe that our broad demographic reach is one of the widest in retail and have
been happy to see that more and more young customers are shopping our stores and
loving our great values. Even as a nearly $26 billion business, we are very excited about
our tremendous growth opportunities as we move forward. We see enormous potential to
increase our U.S. and international market share by growing our brick-and-mortar banners,
pursuing category and other initiatives, and over time, expanding our e-commerce presence.
While we drive our top line, we expect to also drive our profitability through even better
inventory management and an even further improved supply chain. We have great
confidence in the short- and long-term future and are well on the road to fulfilling our
vision of becoming a $40 billion company and beyond!
TO OUR FELLOW
SHAREHOLDERS:
The year 2012 was another great year for TJX
on top of many great years! Our off-price shop-
ping experience continued to attract consumers
against the backdrop of a very competitive retail
environment, a volatile economy and growth in
online shopping in the retail industry. Customer
traffic rose again in 2012 for the fifth consecu-
tive year. All of our divisions delivered excellent
results. Marmaxx, our largest division, continues
to be very powerful with strong performance of
new T.J. Maxx and Marshalls stores as we further
expand our U.S. penetration. HomeGoods posted
outstanding results as it takes hold as a shopping
destination for exciting, quality merchandise from
around the world. TJX Canada had a terrific year
with Marshalls in Canada outperforming our ex-
pectations. Last, but certainly not least, we were
delighted to see TJX Europe continue to regain
its momentum as Europe holds so much growth
potential for us.
22
2
We surpassed the $25-billion milestone
lasting paradigm shift to value throughout retail,
in 2012, with net sales reaching $25.9 billion, up
at TJX, value has been our mission since day
12% or almost $3 billion over 2011. Consolidated
one, so we were there to capitalize upon this
comparable store sales grew
by a very strong 7% over
last year’s 4% increase. Net
income rose to $1.9 billion
and diluted earnings per
share were $2.55, up 28%
on an adjusted basis over
the prior year’s double-digit
increase. 1 The year 2012
marked the 17th consecutive
year of earnings per share
growth, and on an adjusted
basis, our five year com-
pound annual EPS growth
rate was 21%.2 We grew to
over 3,000 stores in 2012, netting a total
of 145 additional stores to end the fiscal year
with 3,050 stores or an increase in overall
square footage of 4%.
Gaining
U.S. and
international
customers
A key factor in our confidence in our future is our
shift! We are convinced
that our off-price combi-
nation of fashion, brands,
quality and price will con-
tinue to be a tremendous
draw for consumers in up
or down economies and
that value is here to stay!
We believe we have
one of the widest custom-
er demographic reaches
in retail and have sig-
nificantly broadened our
reach in the last five years.
Recently, we have been
successfully attracting more and more
younger consumers. We are aggressively
targeting a younger audience with our mer-
chandising and marketing, including social
media, while continuing to serve our core cus-
tomers. We believe we will retain our younger
customers, both female and male, as loyal
shoppers for the future.
While we have grown our customer base
over the last several years, our market penetra-
tion in the U.S. still remains below department
store levels, which speaks to our potential to
gain more market share. To continue attracting
more new customers, we are planning even
more powerful marketing this year, increas-
ing advertising impressions and leveraging
strong belief that we will continue to grow our U.S.
our global marketing abilities even further to
and international customer base. Our annual com-
reach more consumers, all with only a slight
parable store sales have increased in 35 of the last
increase in spending. A great example of
36 years and over the last five years, our comp
utilizing our marketing across our banners is
sales growth reflects an increase in customer
traffic. To us, this indicates that our value prop-
osition continues to resonate with consumers
and set us apart from many other retailers. While
our tri-branded marketing campaigns, which
we brought to Winners, HomeSense and
Marshalls in Canada following great success
for T.J. Maxx, Marshalls and HomeGoods in the
we believe that the Great Recession brought a
U.S. We believe these campaigns helped drive
3
3
Growing our younger
audience while serving
core customers
customer traffic in both the U.S. and Canada
GLOBAL STORE GROWTH POTENTIAL
during the 2012 holiday season and we will roll
As proud as we are to have topped 3,000 total
out more in the upcoming year. In Europe, we
stores and 1,000 T.J. Maxx stores in 2012, we
will continue to increase our advertising pen-
see enormous potential to continue our global
etration this year, which we believe led to sig-
store growth. Today, we see the potential to ex-
nificant customer traffic gains in 2012.
pand our store base by over 50%, up to almost
We believe our store remodel program
4,800 stores, with our current chains in our
has been very effective in helping to retain the
new customers our marketing is attracting, and
in 2013, we will continue upgrading the shop-
ping experience in our stores. Further, we have
many in-store merchandising initiatives
underway across the Company as we con-
current markets alone. We recently raised our
estimates for the potential size of our U.S. busi-
nesses and internationally, we believe we have
vast opportunities. Over time, we could envision
our numbers growing even larger. We operate
successfully in six countries and believe we
tinuously read and respond to customers’
are the only retailer in the world with our deep
changing tastes. With no walls between de-
understanding and experience in successfully
partments in our stores, we will continue
bringing the off-price concept to different
to capitalize on the extreme
flexibility of our business
model to quickly shift in and
out of merchandise catego-
ries in our stores. For a com-
pany of our size, we have
great nimbleness to navigate
the marketplace and take
advantage of the best buy-
ing opportunities.
We understand the
power of brands for con-
sumers, which is why we are
constantly working to make
our best brand representa-
tion even stronger. We view
TJX as a value-driven, glob-
al sourcing machine. Our
countries and that this gives
us tremendous advantages.
In 2013, we plan to net approx-
imately 150 additional stores,
which would represent 4%
square footage growth.
At Marmaxx, we still see
plenty of room to profitably
grow our largest division. We
recently raised our estimates
for Marmaxx’s long-term po-
tential to 2,400-2,600 stores,
200 more stores than our prior
thinking. Marmaxx’s consis-
tent, excellent results give us
confidence in its higher growth
potential, with new stores sig-
nificantly outperforming our
buying organization of over 800 merchants
expectations in each of the last four years. We
sources from more than 60 countries and
operate T.J. Maxx and Marshalls stores nearly
we continue to expand our worldwide reach
20 years old that continue to post comparable
to get even closer to sources of merchan-
store sales increases, which is quite remarkable
dise. Our universe of over 16,000 vendors af-
in retailing! Further, we have been very success-
fords us tremendous flexibility and we contin-
ful in expanding the geographic opportunities
ue to strengthen our vendor relationships and
for Marmaxx, opening up stores in more rural
build new ones to offer consumers even more
markets and large cities like New York. These
exciting brands.
expansions into different markets continue to
55
broaden Marmaxx’s
already wide custom-
er demographic reach.
store sales increased
an extremely strong 10%,
segment profit margin grew
We also see HomeGoods as potentially
an even bigger business than our prior view,
nearly three-fold over the prior year, and we
saw broad-based strength across geographies
recently increasing our long-term outlook for
with a variety of economic climates. We remain
HomeGoods to grow to 750-825 stores, versus
the only major off-price retailer in Europe and
our prior estimate of 750 stores. HomeGoods
view our store growth opportunities there as
has also driven consistently strong results for
nothing short of amazing! Our HomeSense
several years and its 2012 fleet of new stores
chain operates only 24 stores in the U.K., so
well exceeded our expectations. Also giving us
we have a long runway for growth with this
confidence is that there are about 100 U.S. mar-
one banner alone. Overall, we see TJX Europe’s
kets where we operate a T.J. Maxx or Marshalls
long-term potential to grow to up to 875 stores
store without a HomeGoods store. In addition,
with just our current chains in just our current
other U.S. retailers selling merchandise for
countries. While our store base in Europe is still
the home are about double the current size of
relatively small compared to 875 and we plan
HomeGoods, which speaks to the potential for
to proceed prudently, we believe our off-price
this division.
TJX Europe got solidly back on track
in 2012 and had a fantastic year. Comparable
model could work in virtually any country where
consumers seek branded merchandise at
great prices.
66
At TJX Canada, we continue to see
significant growth ahead. As other U.S. retailers
very well together and believe our synergies
will yield very positive results in the medium
are just beginning to cross over to Canada, we
and long term.
believe our over 22 years of experience in
At the same time, our TJX e-commerce
Canada will continue to serve us well. The
team continues to develop our capabilities to
launch of Marshalls in Canada has been very
leverage our infrastructure, large buying or-
successful. This young chain has reached
ganization, vendor universe, and marketing
profitability in less than two years, which
presence to deliver our value proposition on the
underscores our ability to expand profitably
Internet. Earlier this year, we announced our
internationally. Long term, we see the potential
goal to launch a T.J. Maxx website in a small,
to expand Marshalls to about 100 stores in
controlled mode in the second half of 2013. As
Canada and overall, believe TJX Canada has
we have said many times, we plan to take our
the potential to grow to about 430 stores.
time with this initiative to do it right and make
E-COMMERCE:
it profitable, having only little top-line benefit
assumed in our near- and long-term growth
ANOTHER PLATFORM FOR VALUE
plans at this time. That said, we are extremely
Beyond our successful brick-and-mortar busi-
excited about our online prospects! Whether
ness, we continue to view e-commerce as a
with brick-and-mortar stores, e-commerce or
great opportunity for TJX and another plat-
mobile, our goal is to target an extremely wide
form to reach more consumers with our great
customer demographic!
values. In late 2012, we were delighted to add
Sierra Trading Post, an off-price, Internet retailer,
to our family of businesses. We will run Sierra
Trading Post as its own banner as we develop
TJX’s e-commerce initiative and see excellent
opportunities to gain leverage in both business-
Supply chain
opportunities
es. We view Sierra Trading Post as providing
As we have discussed many times before,
immediate scale, giving us tremendous know-
operating with leaner inventories over the
ledge and infrastructure for our e-commerce
last several years has resulted in excellent
business. In turn, Sierra Trading Post can use
results for our business. It has allowed us
TJX’s merchandising strengths to build its
to be more nimble in the marketplace and
brand further. As we have brought Sierra Trading
be smarter in our purchasing, which in turn
Post into the TJX fold, we already see our simi-
gives us the ability to drive higher merchandise
lar corporate cultures working
margins. It has also led to a
7
more exciting shopping experience and bet-
In 2013, we plan to continue our
ter values in our stores, which we believe has
significant share buyback program, with
driven customer traffic and the top line. As
approximately $1.3 billion to $1.4 billion of
effective as our supply chain is, we are con-
repurchases planned for the year. Further, our
tinuing with our investments to become even
Board of Directors approved a 26% increase
more precise at delivering the right goods to
in the per-share dividend in April 2013, which
the right stores at the right time. We are being
represents the 17th consecutive year of divi-
very deliberate with this initiative, so we still
dend increases. Over this period of time, the
have approximately two more years before
Company’s dividend has risen at a com-
we expect to start seeing the benefits from our
pound annual rate of 23%. All of these ac-
investment. During this time, we are also
tions underscore our confidence in our abil-
working on several other initiatives to improve
ity to continue to deliver significant increases
our supply chain.
in sales and profit, and generate superior
Strategic
vision for
growth
financial returns.
LONG-TERM VIEW
While we clearly plan for the year ahead and
have a three-year growth model, our strategic
vision for TJX goes well beyond that! As
a management team, we are laser focused
on sharp execution in the near term, but are
simultaneously looking far into the future,
FINANCIAL STRENGTH
positioning this Company for successful
GIVES US GREAT CONFIDENCE
growth for many years to come. We encour-
Our financial strength and flexibility give us
age intelligent risk taking, sharing ideas
great confidence and provide a solid foun-
across divisions, and testing many new initia-
dation upon which to grow
in the future. Our strong
operations generate finan-
cial returns that are among
the highest in retail and
our “A” Standard & Poor’s
credit rating is one of the
strongest in our industry,
which is important to our
vendors, landlords, and
business associates. In
2012, we generated $3.0
billion in cash from opera-
tions and spent a total of
$1.3 billion to repurchase
tives, constantly find-
ing new ways to grow.
We are keenly aware
that this growth requires
a deep and talented
pool of Associates. We
remain steadfast in de-
veloping this talent by
having many TJX vet-
erans mentor the next
generation of leaders.
Additionally, in 2013, we
plan to capitalize and
build upon our success
and continue to invest
TJX stock, retiring 30.6 million shares, and we
in store growth, building our organization, e-
increased the per-share dividend 21%.
commerce, and infrastructure, as we position
9
TJX for our next phase of growth and to be-
Advisor to the Company. In his nine years
come a $40 billion-plus company.
with TJX, Jeff has overseen the financial and
Value is
our mission
administrative aspects of our business, includ-
ing more than six years as Chief Financial
Officer, and he has been an enormous part of
TJX’s success. We are very grateful for Jeff’s
dedicated service to TJX and pleased that he
will remain in a new role and continue to par-
As we begin a new year, our winning formula
ticipate in developing TJX’s growth strategy.
has not changed. We will continue to raise
Without the great work and dedication
the bar on execution of the many elements of
of our approximately 179,000 Associates,
our off-price business model that have made
TJX would not be the successful Company
this Company great. Our management team
it is today. Of course, we are very grateful to
remains as passionate as ever about driving
our new and loyal customers for their patron-
profitable sales growth. Above all, through-
age. We also thank our fellow shareholders,
out our organization, we remain focused on
vendors and other business associates for
our value mission to be a retailer for today
their ongoing support.
and tomorrow!
IN REMEMBRANCE
We were deeply saddened by the passing of
John Nelson, past Chairman of our Board of
Directors. John became a Director in 1993,
served as Chairman of the Board from 1995 to
1999, and retired from the Board in June 2001.
As Chairman, John was extremely supportive
at an important time in the Company’s history,
when we acquired Marshalls. He will be greatly
missed and we extend our deepest condo-
lences to his family, friends and colleagues.
OUR GRATITUDE
Earlier this year, Jeff Naylor stepped down from
his position as Chief Administrative Officer
of TJX and will remain as Senior Corporate
10
Respectfully,
Bernard Cammarata
CHAIRMAN OF THE BOARD
Carol Meyrowitz
CHIEF EXECUTIVE OFFICER
1 Fiscal 2013 had 53 weeks. Fiscal 2013 consolidated comparable store sales are
for the 52-week period ended 1/26/13 versus the same period in Fiscal 2012. On
a GAAP basis, diluted earnings per share in Fiscal 2013 increased 32% over $1.93
in Fiscal 2012. Fiscal 2012 adjusted earnings per share exclude the negative im-
pact of $.04 per share from the consolidation and store closings of the former A.J.
Wright division and $.02 per share from costs related to the conversion and grand
re-openings of certain former A.J. Wright stores into other TJX banners.
2 The five-year compound annual growth rate for earnings per share on a GAAP basis
was 25%. The five-year compound annual growth rate for earnings per share on an
adjusted basis of 21% excludes from Fiscal 2008 earnings per share the negative
impact of $.13 per share due to the Company’s provision related to the previously
announced computer intrusion(s).
TJX believes in approaching our
Corporate Social Responsibility
commitments with the same level
of seriousness as our business
commitments. We are pleased
with the strides we’ve made in
several areas of our V.A.L.U.E.
program over the past year, and
expect to report on that progress
when we electronically publish
our second global Corporate
Social Responsibility report
on our corporate website,
www.tjx.com, in May 2013.
Reflecting our steadfast focus
on continuous improvement, we
have highlighted a sampling of our
recent accomplishments here.
V
endor Social
Compliance
is our vendor program based on our
commitment to uphold the highest stan-
dards of business ethics. Our merchant
training programs represent a good ex-
ample, as they include a review of TJX’s
Vendor Code of Conduct, anti-bribery
laws and vendor social compliance
requirements. We incorporate workshop
exercises that illustrate the ethical deci-
sion-making process and help enhance
merchant skills so they may better edu-
cate suppliers about our global vendor
social compliance expectations.
A
ttention to
Governance
has played a central role at TJX for
more than 35 years. TJX believes in
integrity in corporate governance
practices and in regularly engaging in
open dialogue with our shareholders.
To that end, members of TJX
management and subject matter
experts have met periodically with
socially conscious investors to
address important issues.
L
everaging
Differences
and diversity among our Associates,
customers, and vendors is critical to
being a Company of Choice. In the
U.S., where the vast majority of TJX
Associates work, our Associate base in
2012 was over 75% women and more
than 52% people of color, and our
management was comprised of about
61% women and nearly 29% people
of color. As an equal-opportunity
employer, TJX has scored 100 on
the Corporate Equality Index of the
Human Rights Campaign in each of
the past five years.
U
nited with our
Communities
is central to how we view our role as a
Neighbor of Choice. In addition to our
charitable focus on children, women
and families, our giving extends to the
community at large. In 2012, in addition
to our considerable support of the Red
Cross’ Annual Disaster Giving Program,
T.J. Maxx, Marshalls and HomeGoods
conducted a major in-store fundraising
campaign to benefit those impacted by
Hurricane Sandy. In total, through the
Company’s direct donations and our
customer fundraising event, we made
it possible for the Red Cross to receive
over a $1.5 million donation to help
relief efforts.
E
nvironmental
Initiatives
are important to TJX, as we have long
been committed to initiatives that are
smart for our business and good for
the environment. We have made great
strides in this area over the last several
years, with a more cohesive, global
focus and far greater sharing of best
practices and knowledge. In 2011, TJX
announced its target to reduce green-
house gas emissions on a worldwide
basis relative to our revenue growth by
2012. We are pleased to report we ex-
ceeded our emissions reduction target.
CONSOLIDATED PERFORMANCE
Succeeding in All Types of Environments
S
E
L
A
S
T
E
N
S
N
O
I
L
L
I
B
$
28
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
$
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
82*83*
* Recession
91*
02*
09* 10* 13
( F Y )
82*83*
* Recession
91*
02*
09* 10* 13
( 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
$
3,000
2,750
2,500
2,250
2,000
1,750
1,500
1,250
1,000
750
500
250
0
MARMAXX
HOMEGOODS
WINNERS
(CANADA)
HOMESENSE
(CANADA)
MARSHALLS
(CANADA)
T.K. MAXX
(U.K. & IRELAND)
HOMESENSE
(U.K.)
T.K. MAXX
(GERMANY)
T.K. MAXX
(POLAND)
14
24
57
18
1,940 2,400-2,600
415
750-825
222 240
88 90
90-100
268 300-325
S
E
R
O
T
S
100-150
250-300
100
09
13
09
13
09
13
( F Y )
Property
Additions
Net Cash
from Operating
Activities
Share
Repurchases
Dividend
Payments
0%
20%
40%
60%
80%
100%
TJX STORES 1
F Y 13: 3,050
POTENTIAL:
~4,300-4,700
( F Y E )
Store growth potential with current chains in
current markets.
1 Total TJX stores includes 4 Sierra Trading Post stores
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
8
22
23
F-2
F-3
F-8
F-17
F-31
TJX Stock Performance
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
325
300
275
250
225
200
175
150
125
100
75
50
25
0
BASE YEAR
2009
2010
2011
2012
2013
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 February 2, 2013. The graph assumes that
$100 was invested on January 25, 2008, 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 February 2, 2013
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. [ ]
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.
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 28, 2012 was
$32,702,582,804 based on the closing sale price as reported on the New York Stock Exchange.
There were 723,902,001 shares of the registrant’s common stock, $1.00 par value, outstanding as of February 2, 2013.
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 11, 2013 (Part III).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K and our 2012 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 2012 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 3,000 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.
Our stores are known for our value proposition of brand, fashion, quality and price and offer a treasure hunt
shopping experience through the rapid turn of inventories relative to traditional retailers. Our goal is to create a
sense of excitement and urgency for our customers and encourage frequent customer visits. We reach a broad
range of customers across many income levels and other demographic groups with our value proposition. Our
strategies and operating platforms are synergistic across all of our retail chains. As a result, we are able to
leverage our expertise throughout our business, sharing information, best practices, initiatives and new ideas,
and developing talent across our Company. We also leverage the substantial buying power of our businesses in
our global relationships with vendors.
Our Businesses. We operate our business in four major divisions: Marmaxx and HomeGoods, both in the
U.S., TJX Canada and TJX Europe.
MARMAXX:
Our T.J. Maxx and Marshalls chains in the United States (referred to together as The Marmaxx Group or
Marmaxx) are collectively the largest off-price retailer in the United States with a total of 1,940 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 primarily 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) and in-store initiatives. This
differentiated shopping experience at T.J. Maxx and Marshalls encourages our customers to shop both
chains. We intend to launch, in a small, controlled mode, a T.J. Maxx website in fiscal 2014.
HOMEGOODS:
Our HomeGoods chain, introduced in 1992, is the leading off-price retailer of home fashions in the U.S.
Through its 415 stores, HomeGoods offers a broad array of home basics, giftware, accent furniture, lamps,
rugs, wall décor, decorative accessories from around the world, seasonal and other merchandise.
TJX CANADA:
Our TJX Canada division operates the Winners, Marshalls and HomeSense chains in Canada. Acquired in
1990, Winners is the leading off-price apparel and home fashions retailer in Canada. The merchandise
offering at its 222 stores across Canada is comparable to T.J. Maxx. We opened our HomeSense chain in
2001, bringing the home fashions off-price concept
to Canada. HomeSense has 88 stores with a
merchandise mix of home fashions similar to HomeGoods. We brought Marshalls to Canada in fiscal 2012
and operate 14 Marshalls stores in Canada. Like Marshalls in the U.S., our Canadian Marshalls stores offer
an expanded footwear department and The Cube juniors’ department, differentiating them from Winners
stores.
TJX EUROPE:
Our TJX Europe division operates the T.K. Maxx and HomeSense chains in Europe. Launched in 1994, T.K.
Maxx introduced off-price to Europe and remains Europe’s only major off-price retailer of apparel and home
3
fashions. With 343 stores, T.K. Maxx operates in the U.K., Ireland, Germany and Poland. Through its stores
and, for the U.K, an online website, T.K. Maxx offers a merchandise mix similar to T.J. Maxx, Marshalls and
Winners. We brought the off-price home fashions concept to Europe, opening HomeSense in the U.K. in
2008. Its 24 stores in the U.K. offer a merchandise mix of home fashions similar to that of HomeGoods in
the U.S. and HomeSense in Canada.
In December 2012, we acquired Sierra Trading Post, an off-price on-line retailer of apparel and home
fashions, which we are maintaining as a separate banner.
Flexible Business Model. Our flexible off-price business model,
including our opportunistic buying,
inventory management, logistics and store layouts, is designed to deliver our customers a compelling value
proposition of fashionable quality brand-name and designer merchandise at excellent values. Our 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.
Our merchants have more visibility into consumer, fashion and market trends and pricing when we buy closer to
need, which can help 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 to accommodate the merchandise we purchase. Our logistics and distribution operations are
designed to support our buying strategies and to facilitate quick, efficient and differentiated delivery of
merchandise to our stores, with a goal of getting the right merchandise to the right stores at the right times.
Opportunistic Buying. As an off-price retailer, our buying practices, which we refer to as opportunistic
buying, differentiate us from traditional retailers. Our overall opportunistic buying strategy is to acquire
merchandise on an ongoing basis that will enable us to offer a desirable and rapidly changing mix of branded,
designer and other quality merchandise in our stores at prices below regular prices for comparable merchandise
at department and specialty stores. We seek out and select from the broad range of opportunities in the
marketplace to achieve this end. Our buying organization, which numbers over 800 individuals in 13 buying
offices in ten countries, executes this opportunistic buying strategy in a variety of ways, depending on market
conditions and other factors.
We take advantage of opportunities to acquire merchandise at substantial discounts that regularly arise from
the production and flow of inventory in the apparel and home fashions marketplace, which include, among
others, order cancellations, manufacturer overruns, closeouts and special production. Our buying strategies are
intentionally flexible to allow us to react to frequently changing opportunities and trends in the market and to
adjust how and what we source as well as when we source it. Our goal is to operate with lean inventory levels
compared to conventional retailers to give us the flexibility to seek out and to take advantage of these
opportunities as they arise. 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 frequently looking for
opportunities to buy merchandise. We buy much of our merchandise for the current or immediately upcoming
selling season. We also buy some merchandise, which we refer to as “packaway,” with the intention of storing it
for sale in future selling seasons. We generally make these packaway purchases in response to opportunities in
the marketplace to buy merchandise that we believe has the right combination of brand, fashion, quality and
price to supplement the product we expect to be available to purchase later for those future seasons. We also
develop some merchandise, which we refer to as private label, that is produced for us under in-house and
licensed brands. We generally acquire this type of merchandise to supplement the depth of or fill gaps in our
expected merchandise assortment.
Our expansive vendor universe is in excess of 16,000, consists primarily of manufacturers along with
retailers and others, and provides us substantial and diversified access to merchandise. We have not
experienced difficulty in obtaining sufficient quality merchandise for our business in either favorable or difficult
retail environments and expect this will continue 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
as well as quantities ranging from small to very large; we are able to disperse merchandise across our
4
geographically diverse network of stores and to target 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. We provide vendors an
outlet with financial strength and an excellent credit rating.
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
generally sell within the period we planned. 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. Over the past several years, we have
been investing in our supply chain with the goal of continuing to operate with low inventory levels, to ship more
efficiently and quickly and to more precisely and effectively allocate merchandise to each store.
Pricing. Our mission is to offer quality, fashionable, brand-name and designer merchandise in our stores
with retail prices that are generally 20% to 60% below department and specialty store regular retail prices, every
day. We do not generally engage in promotional pricing activity such as sales or coupons. We have generally
been able to react to price fluctuations in the wholesale market to maintain our pricing gap relative to prices
offered by traditional retailers as well as our merchandise margins through various economic cycles.
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 generally focused on our banners
rather than individual products,
including at times promoting all banners in each division together, which
contributes to our advertising budget as a percentage of sales remaining low compared to many traditional
retailers. We design our stores 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.
Customer Service/Shopping Experience. We are in the process of renovating and upgrading stores across
our banners to enhance our customers’ shopping experience and help drive sales. Although 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, and offer TJX-branded credit
cards in the U.S. through a bank, but do not own the customer receivables.
Distribution. We operate distribution centers encompassing approximately 11 million square feet in five
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 2.0 billion units to our stores during
fiscal 2013.
5
Store Growth. Expansion of our business through the addition of new stores continues to be an important
part of our growth strategy. The following table provides information on the store growth of our four divisions in
the last two fiscal years, our growth estimates for fiscal 2014 and our estimates of the store growth potential of
the current chains in these divisions in their current geographies:
Marmaxx
T.J. Maxx
Marshalls
HomeGoods
TJX Canada
Winners
HomeSense
Marshalls
TJX Europe
T.K. Maxx
HomeSense
TJX Total
Approximate
Average Store
Size (square feet)
Number of Stores at Year End
Fiscal 2012
Fiscal 2013
Fiscal 2014
(estimated)
Estimated Store
Growth
Potential
29,000
31,000
983
884
1,867
1,036
904
1,940
2,015
2,400-2,600
25,000
374
415
445
750-825
29,000
24,000
32,000
32,000
21,000
216
86
6
308
332
24
356
222
88
14
324
343
24
367
344
392
240
90
90-100
420-430
650-725(1)
100-150(2)
750-875
2,905
3,050(3)
3,200(3)
4,320-4,730
(1) Includes U.K., Ireland, Germany and Poland only
(2) Includes U.K. and Ireland only
(3) Included in the fiscal 2013 and estimated fiscal 2014 TJX Total are four Sierra Trading Post stores.
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 2011
Fiscal 2012
Fiscal 2013
26%
14
24
13
77%
12%
11%
24%
13
25
14
76%
12%
12%
24%
13
25
14
76%
11%
13%
100%
100%
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 2011
Fiscal 2012
Fiscal 2013
61%
26%
13%
60%
27%
13%
59%
28%
13%
100%
100%
100%
A.J. Wright Consolidation. In the first quarter of fiscal 2012, we completed the consolidation of A.J. Wright,
our former off-price chain targeting lower middle income customers, converting 90 of the A.J. Wright stores to
6
T.J. Maxx, Marshalls or HomeGoods banners and closing A.J.Wright’s 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 U.S. banners.
Segment Overview. We operate four main business segments: Marmaxx, HomeGoods, TJX Canada and
TJX Europe. Marmaxx operates our T.J. Maxx and Marshalls chains in the United States. HomeGoods operates
our HomeGoods chain in the U.S. TJX Canada operates our Winners, HomeSense and Marshalls chains in
Canada. TJX Europe operates our T.K. Maxx and HomeSense chains in Europe. A.J. Wright ceased to be a
segment following its consolidation. Sierra Trading Post is reported as part of the Marmaxx segment. Each of
our segments has its own management, administrative, buying and merchandising organization and distribution
network. More detailed information about our segments, including financial information for each of the last three
fiscal years, can be found in Note G to the consolidated financial statements.
7
STORE LOCATIONS
Our major chains operated stores in the following locations at the end of fiscal 2013:
United States:
Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
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
T.J. Maxx Marshalls HomeGoods
20
11
10
98
15
26
3
3
73
45
3
6
44
21
8
6
14
10
9
16
52
38
12
10
16
4
4
8
14
33
3
63
33
3
42
6
9
43
7
6
20
2
25
51
10
5
32
17
6
20
1
1,036
4
14
1
126
7
24
3
1
79
30
—
1
45
11
2
4
4
10
4
27
53
22
12
3
13
—
2
8
9
45
3
71
21
—
24
5
6
35
19
6
10
—
14
73
2
1
27
13
3
7
—
904
3
9
2
45
5
11
2
—
39
12
—
1
21
4
—
1
4
—
3
10
25
12
9
1
8
—
1
4
6
25
1
35
13
—
10
—
3
18
6
4
5
—
8
26
4
1
11
2
1
4
—
415
Store counts above include the T.J. Maxx, Marshalls or HomeGoods portion of a superstore. Additionally,
TJX operates four Sierra Trading Post stores, 1 in Idaho, 1 in Nevada and 2 in Wyoming.
8
Canada:
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland
Nova Scotia
Ontario
Prince Edward Island
Quebec
Saskatchewan
Total Stores
Winners HomeSense Marshalls
28
29
6
3
2
8
101
1
40
4
222
10
16
1
2
1
2
41
—
13
2
88
—
—
—
—
—
—
14
—
—
—
14
Store counts above include the Winners or HomeSense portion of a superstore.
Europe:
United Kingdom
Republic of Ireland
Germany
Poland
Total Stores
T.K. Maxx HomeSense
252
16
57
18
343
24
—
—
—
24
Competition. The retail apparel and home fashion business is highly competitive. We compete on the basis
of factors including merchandise fashion, quality, brand-name, price, selection and freshness; in-store service
and shopping experience; 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, on-
line or other media.
Employees. At February 2, 2013, we had approximately 179,000 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,
Marshalls, HomeGoods, Winners, HomeSense, T.K. Maxx and Sierra Trading Post, in relevant countries. Our
rights in these 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 and obtain information on the operation of the reference room by calling the SEC at 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.
9
Fiscal 2011 means the fiscal year ended January 29, 2011, fiscal 2012 means the fiscal year ended
January 28, 2012, fiscal 2013 means the fiscal year ended February 2, 2013 and fiscal 2014 means the fiscal
year ending February 1, 2014. Unless otherwise indicated, all store information in this Item 1 is as of February 2,
2013, and references to store square footage are to gross square feet. 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 strategy and inventory management could adversely affect our
business.
While our opportunistic buying strategy and our goals of operating with lean inventory levels and frequent
inventory turns are key elements of our off-price business, they subject us to risks related to the pricing,
quantity, nature and timing of inventory flowing to our stores. Our merchants are in the marketplace frequently,
as much of our merchandise is purchased for the current or immediately upcoming season. Our opportunistic
buying places considerable discretion in our merchants. They react to frequently changing opportunities and
trends in the market, assess the desirability and value of merchandise and generally make determinations of how
and what we source as well as when we source it. If we do not obtain the right fresh, desirable merchandise at
the right times, quantities and prices, it could adversely affect traffic to our 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.
If we are unable to generally purchase inventory at prices sufficiently below prices paid by conventional
retailers to allow us to maintain our overall pricing differential to regular department and specialty stores, our
ability to attract customers and sustain our margins may be adversely affected. We may not achieve this at
various times or in some divisions or geographies, which could adversely affect our results or those of one of our
segments.
We must also properly execute our inventory management strategy of delivering the right product to the right
stores at the right time. We need to appropriately allocate merchandise among our stores, timely and efficiently
distribute inventory to stores, maintain an appropriate mix and level of inventory in each store, appropriately
change the allocation of floor space of stores among product categories to respond to customer demand and
effectively manage pricing and markdowns. There is no assurance we will be able to do so.
In addition to our own execution, we may need to react to factors affecting inventory flow that are outside
our control, such as extreme weather and natural disasters or other changes in conditions affecting our vendors
and others in our supply chain, such as political instability, labor issues, including strikes or threats of strikes, or
increasing cost of 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 through
successfully opening new stores. Successful store growth requires us to lease appropriate real estate on
10
attractive terms in each of the locations where we seek to open stores. Our ability to do so depends, among
other things, on availability and selection of appropriate sites in appropriate geographies; competition for sites;
factors affecting costs such as real estate, construction and development costs, as well as costs and availability
of capital; and variations in or changes to zoning or other land use regulations. If we cannot lease appropriate
sites on attractive terms, it could limit our ability to successfully grow in various markets or adversely affect the
economics of new stores in various markets. Further, we may encounter difficulties in attracting customers when
we enter new markets for a variety of 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, our substantial size imposes demands on maintaining appropriate internal resources and third party
providers to support our business effectively and expansion places increased demands on management and the
administrative, merchandising, store operations, distribution, compliance and other organizations in our
businesses, and we may not efficiently manage our business or successfully manage our growth. In addition,
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
chains 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 if 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 offer inventory that meets those trends and preferences. However,
identifying consumer trends and preferences and successfully meeting customer demand across our diverse
merchandise categories and in the many markets in the United States, Canada and Europe in which we do
business on a timely basis is challenging. Although our business model allows us greater flexibility than many
traditional retailers to meet 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, and geographic regions and businesses.
Our growth strategy is to continue to successfully expand the number of stores in our existing markets, to
continue to successfully expand our existing chains to new markets and geographies and, as appropriate, to
successfully develop or acquire new businesses, including our planned expansion into e-commerce, all of which
entail significant risk. There are significant risks associated with both our ability to continue to successfully
extend our current business and to enter new businesses, including managing the implementation of this 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, slow our planned growth or close stores or operations and our
growth and financial performance could be adversely affected.
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 television, social media, database marketing, print and direct marketing, some
of our competitors expend more for their programs than we do, or use different approaches than we do, which
11
may provide them with a competitive advantage. Our marketing, advertising and promotional programs may not
be effective or could require increased expenditures, which could have a material adverse effect on our revenue
and results of operations. We may need to adjust our marketing, advertising and promotional programs
effectively as internet-based and other digital or mobile communication channels rapidly evolve, and there is no
assurance that we will successfully do so.
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 local, regional, national
and international retailers that sell apparel, home fashions and other merchandise we sell, including in stores,
through catalogues or other media or over the internet. Some of our competitors are larger than we are or have
more experience in selling certain product lines 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, all of which increase competition for customers. We
compete on the basis of fashion, quality, price, value, merchandise selection and freshness, brand-name
recognition, service, reputation and store location. Our competitiveness is highly dependent on our effective
execution of our off-price model of offering the customer a fresh, rapidly changing and attractive mix of
merchandise delivering value. The demand for our merchandise is also influenced by our advertising, marketing
and promotional activities, the name recognition and reputation of our chains and the location of and service
offered in our stores. If we fail to compete effectively, our sales and results of operations could be adversely
affected.
Failure to attract, train and retain quality associates in appropriate numbers, including management, buying,
sales, distribution center and other personnel, and increased costs from our existing or expanding labor force,
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 in new markets we
enter, and our ability to meet our labor needs while controlling labor costs, including costs of retirement, health
and other employee benefits, is subject to external factors such as unemployment levels, prevailing wage rates,
minimum wage legislation, changing demographics, economic conditions, health care legislation, health and
other insurance costs and governmental labor and employment and employee benefits requirements. The nature
of the workforce in the retail industry also subjects us to the risk of immigration law violations, which risk has
increased in recent years. Certain associates in our distribution centers are members of unions and therefore
subject us to the risk of labor actions of various kinds as well as risks and potential expenses associated with
multiemployer plans, including from potential withdrawal liability and potential insolvency of other participating
employers, and other associates are members of works councils, which may subject us to additional actions or
expense. 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 obtain needed labor. In the event
of increasing wage rates in a market, failure to increase our wages 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.
Because of the distinctive nature of our off-price model, we must provide significant internal training and
development for key associates, including within our buying organization. Similar to other retailers, we face
challenges in securing and retaining sufficient talent in management and other key areas for many reasons,
including competition in the retail industry generally and for talent in various geographic markets. If we do not
continue to attract qualified individuals, train them in our business model, support their development and retain
them, our performance could be adversely affected or our growth could be limited.
12
Global economic conditions may adversely affect our financial performance.
During the 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 or other changes in economic conditions could adversely affect sources of liquidity available to us
or our costs of capital and could adversely affect plan asset values and investment performance, increasing our
pension liabilities, expenses and funding requirements with respect to company-sponsored and multiemployer
pension plans. Economic conditions, both on a global level and in particular markets, including unemployment,
decreased disposable income and actual and perceived wealth, energy and health care costs, interest and tax
rates and policies, weakness in the housing market, volatility in capital markets, decreased credit availability,
inflation and deflation, as well as political or other factors beyond our control such as threats or possibilities of
instability also have
war, terrorism, global or national unrest, actual or threatened epidemics, and political
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 believe our
flexible off-price model helps us respond, they 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
Intrusion”)
into portions of our computer system that process and store information related to customer
transactions, discovered late in 2006, 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.
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 or of third parties with whom we do business, 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, to manage logistics and to generate performance and
financial reports. We are dependent on the integrity, security and consistent operations of these systems and
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related back-up systems. Our computer systems and the third party systems we rely on 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. Although we seek to maintain our systems
effectively and to successfully address the risk of compromises of the integrity, security and consistent
operations of our systems, we may not be successful in doing so. Compromises, interruptions or shutdowns of
our systems, including those managed by third parties, could lead to delays in our business operations and, if
significant or extreme, affect our results of operations.
We modify, update, and replace our systems and infrastructure from time to time, including adding new data
centers, replacing or updating legacy programs, converting to global systems, integrating new service providers,
such as for cloud computing technologies, adding additional functionality, such as for the development of our e-
commerce business, and adding new systems when we acquire new businesses. We also modify and change
our procedures for, and add and change vendors who assist us with, designing, implementing and maintaining
our systems and infrastructure. Although we believe we are diligent
in selecting systems, vendors and
procedures to enable us to maintain the integrity of our systems and infrastructure when we modify them, there
are inherent risks associated with managing and changing systems, infrastructure and relationships and with
acquisitions, including accurately capturing and maintaining data, realizing the expected benefit of the change
and potentially disrupting the operation of the systems as the changes are implemented. Additionally, potential
issues associated with implementing technology initiatives and the time and resources required to optimize the
benefits of new systems could reduce the efficiency of our operations in the short term.
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 and the third party systems we rely on 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, such as storms, severe cold or heat or unseasonable
temperatures, affect customers’ buying patterns and willingness to shop certain categories or at all, and
accordingly, can adversely affect the demand for the merchandise in our stores, particularly in apparel and
seasonal merchandise. Weather can also affect our ability to transport merchandise to our stores from our
distribution and shipping centers or elsewhere in our supply chain. As a result, adverse or unseasonable weather
in our markets 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 of our supply chain 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 for a short or extended period of time. As a result, our
business could be adversely affected.
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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 social media and other
advertising and promotional activities. Our reputation is based, in part, on perceptions of subjective qualities, so
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 and the merchandise we sell, including our private label
brands, on social media platforms and similar venues, including blogs, 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. The reputation of
our company and our retail banners may be damaged by adverse events at the corporate level or by adverse
events at our other banners. Damage to the 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 to consumers. Regulations and standards in this area, including those related to the
U.S. Consumer Product Safety Improvement Act of 2008, state regulations like California’s Proposition 65, and
similar legislation in other countries in which we operate,
impose restrictions and requirements on the
merchandise we sell in our stores and through e-commerce and change from time to time. Also, new federal,
state, provincial or local regulations in the U.S. and other countries that may affect our business are
contemplated and enacted with some regularity. If we are unable to comply with regulatory requirements on a
timely basis or at all or to adequately monitor new regulations that may apply to existing or new merchandise
categories or in new geographies, significant fines or penalties could be incurred or we could have to curtail
some aspects of our sales or operations, 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 obligations 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 may expose us to risks inherent in operating in new countries.
We have a significant retail presence in Canada and Europe and have established buying offices around the
world, and our goal is to continue to expand our operations into other international markets in the future. It can
be costly and complex to establish, develop and maintain international operations and promote business in new
international jurisdictions, which may differ significantly from the U.S. and other countries in which we currently
operate.
In addition to facing risks similar to our U.S. and current international operations, such as with
regulations such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, we face additional risks
inherent in operating in new countries, such as understanding the retail climate and trends, local customs and
competitive conditions; and complying with new laws, rules and regulations; developing the appropriate
infrastructure for local operations; as well as financial risks including currency exchange fluctuations and adverse
tax consequences or limitations on the repatriation and investment of funds outside of the country where earned,
which could have an adverse impact on our operations or profitability. Complying with applicable 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.
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We are subject to risks associated with importing merchandise from other countries.
Many of the products sold in our stores are sourced by our vendors and, to a lesser extent, by us, in many
countries outside of the country where the stores are located, 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 other
countries and purchasing product made in other countries, such as:
— potential disruptions in manufacturing, logistics and supply;
— changes in duties, tariffs, quotas and voluntary export restrictions on imported merchandise;
— strikes, threats of 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 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 laws and regulations and other factors relating to international trade and
inventory.
imported merchandise beyond our control could affect
Furthermore, although we have implemented policies and procedures designed to facilitate compliance with
laws and regulations relating to operating in non-U.S. jurisdictions and importing merchandise, 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.
the availability and the price of our
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 and had significant cost increases in the past, particularly
the price of oil and gasoline. 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, that strategy may not
be effective or sufficient and 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 adversely affect our costs of doing business,
including utility costs,
transportation and logistics.
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 currency exchange rates may lead to lower revenues and earnings.
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 currency 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 currency
16
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 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 buying the
merchandise. 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 significant.
Additionally, we routinely enter into inventory-related hedging instruments to mitigate the impact of currency
exchange rates on merchandise margins of merchandise purchases by our divisions denominated in currencies
In accordance with GAAP, we evaluate the fair value of these hedging
other than their local currencies.
instruments and make mark-to-market adjustments at the end of each 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 currency exchange rates, we expect that
currency exchange rate fluctuations could have a material adverse effect on our sales and results of operations
from time to time. In addition, fluctuations in 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. If we fail to increase our results over prior periods, to achieve our projected results or goals
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. Results may be affected by
factors we can control, such as the execution of our off-price buying, including selection, pricing and mix of
merchandise; inventory management including flow, pricing markon and markdowns; and management of our
including actions of
growth, but also may be affected by some factors that are not within our control,
competitors, weather conditions, economic conditions, consumer confidence, seasonality, and cost increases
due, for example, to government regulation and increased healthcare and benefits 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 our expectations for that
quarter, we generally are not 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 control costs or appropriately adjust costs to actual results, or if
actual results differ significantly from our forecast, our financial performance could be adversely affected. In
addition, if we do not repurchase the number of shares we contemplated pursuant to our stock repurchase
programs, our earnings per share may be adversely affected.
If we engage in mergers or acquisitions or investments in new businesses, or divest, close or consolidate any of
our current businesses, our business will be subject to additional risks.
We may acquire new businesses (as in our recent acquisition of Sierra Trading Post), invest in or enter into
joint ventures with other businesses, develop new businesses internally and divest, close or consolidate
businesses. Acquisition, investment or divestiture activities may divert attention of management from operating
the existing businesses, and we may not effectively evaluate target companies or investments or assess the
risks, benefits and cost of buying, investing in or closing businesses or of the integration of acquired businesses,
all of which can be difficult, time-consuming and dilutive. Acquisitions, investments, closings and divestitures
may not meet our performance and other expectations or may expose us to unexpected or greater-than-
liabilities and risks. Divestitures, closings and consolidations also involve risks, such as
expected costs,
17
significant costs and obligations of closure,
including exposure on leases, owned real estate and other
contractual, employment, pension 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,
investments, 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
other countries, 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 and retirement benefits, workforce management, logistics, marketing, import/export, sourcing and
manufacturing, data protection 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, applicable accounting principles and interpretations 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 jurisdictions where we do business could increase our costs of compliance or of doing business
and could adversely affect our operating results, including those involving:
— labor and employment and employment benefits, including regarding labor unions and works councils;
— consumer protection and financial regulations;
— data protection and privacy;
— climate change, energy and waste;
— internet, including 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 legal proceedings, regulatory reviews and audits.
These may involve inquiries, investigations, law suits and other proceedings by local, provincial, state and
federal governmental entities (in the United States and other countries) and private plaintiffs, including with
respect to tax, escheat, whistleblower claims, employment and employee benefits including classification,
employment rights, discrimination, wage and hour and retaliation, securities, disclosure, real estate, tort,
consumer protection, product safety, advertising, and intellectual property. There continue to be a number of
employment-related lawsuits, including class actions, in the United States, and we are subject to these types of
suits. We cannot predict the results of legal and regulatory proceedings with certainty, and actual results may
differ from any reserves we establish estimating the probable outcome. Regardless of merit or outcome,
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
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,
18
changes in applicable tax legislation, regulations and treaties, exposure to additional tax liabilities, including
interest and penalties, and changes in accounting principles and interpretations relating to tax matters, any of
which could adversely impact our results of operations and financial condition in future periods. Significant
judgment is required in evaluating and estimating our worldwide provision and accruals for taxes, and actual
results may differ from our estimations.
We are subject to the continuous examination of our tax returns and reports by federal, state, provincial 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 developments in and actual results of proceedings or 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 financial risks.
We lease virtually all of our store locations, generally for an initial terms of ten years, with options to renew
the term, 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 adversely
affect our results as, for example, was the case in the closure of various of our former operations. While we have
the right to terminate some of our leases under specified conditions, including 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
leases or sublease space to third parties, we can remain liable on the lease obligations if the assignee or
sublessee does not perform. In addition, when the lease term 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 or to relocate stores within a market on less favorable terms.
We depend upon strong cash flows from our operations to supply capital to fund our operations, growth, stock
repurchases and dividends and interest and debt repayment.
Our business depends upon our operations to continue to generate strong cash flow to supply capital to
support our general operating activities, to fund our growth and our return to stockholders through our stock
repurchase programs and dividends, and to pay our interest and debt repayments. Our inability to continue to
generate sufficient cash flows to support these activities, to repatriate cash from our international operations in a
manner that is cost effective could adversely affect our growth plans and financial performance including our
earnings per share. We borrow on occasion to finance our activities and if financing were not available to us in
adequate amounts and on appropriate terms when needed,
it could also adversely affect our financial
performance.
ITEM 1B. Unresolved Staff Comments
None.
ITEM 2. Properties
We lease virtually all of our over 3,000 store locations, generally for 10-year terms 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.
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The following is a summary of our primary owned and leased distribution centers and primary administrative
office locations as of February 2, 2013. 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
Wroclaw, Poland
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
303,000 s.f.—leased
O F F I C E S P A C E
Corporate, Marmaxx, HomeGoods
TJX Canada
TJX Europe
Framingham and Westboro,
Massachusetts
1,290,000 s.f.—leased/owned in
several buildings
Mississauga, Ontario
Watford, England
Dusseldorf, Germany
198,000 s.f.—leased
81,000 s.f.—leased
21,000 s.f.—leased
In addition to the office space listed above, TJX acquired approximately 700,000 square feet of office space in
Marlborough, Massachusetts during fiscal 2013, which when ready for use is expected to replace some of the
leased space in Framingham and Westboro, Massachusetts.
Sierra Trading Post, acquired in December 2012, is located in Cheyenne, Wyoming and owns a 60,000 square
foot home office facility and a 223,000 square foot fulfillment center.
ITEM 3. Legal Proceedings
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 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 and other labor statutes,
including alleged misclassification of positions as exempt from overtime, alleged entitlement to additional wages for
alleged off-the-clock work by hourly employees and alleged failure to pay all wages due upon termination. The
lawsuits seek unspecified monetary damages, injunctive relief and attorneys’ fees. TJX is vigorously defending these
claims. These lawsuits include Ebo v. The TJX Companies, et al., Superior Court of CA, Los Angeles County Superior
Court, BC380575, November 13, 2007 and Ahmed v. T.J. Maxx Corp. et al., U.S. District Court, Eastern District of
New York, 10-CV-03609, August 5, 2010. Case No 4:12 cv 558, May 17, 2012.
ITEM 4. Mine Safety Disclosures
Not applicable.
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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 effected 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 2013 and fiscal 2012 are as follows:
Quarter
First
Second
Third
Fourth
Fiscal 2013
Fiscal 2012
High
Low
High
Low
$42.56 $33.41 $27.00 $23.48
$45.39 $39.46 $28.39 $24.60
$46.67 $40.38 $30.64 $25.07
$45.64 $40.08 $34.22 $28.60
The approximate number of common shareholders at February 2, 2013 was 107,800.
Our Board of Directors declared four quarterly dividends of $0.115 per share for fiscal 2013 and $0.095 per
share for fiscal 2012. While our dividend policy is subject to periodic review by our Board of Directors, we are
currently planning to pay a $0.145 per share quarterly dividend in fiscal 2014, 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 2013 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
(d)
2,239,417
2,974,339
2,885,100
8,098,856
$41.98
$43.03
$44.37
2,239,417
$1,180,719,276
2,974,339
$1,052,719,350
2,885,100
8,098,856
$ 924,719,463
October 28, 2012 through
November 24, 2012
November 25, 2012 through
December 29, 2012
December 30, 2012 through
February 2, 2013
Total:
(1) Repurchased under publicly announced stock repurchase programs.
(2) Includes commissions for the shares repurchased under stock repurchase programs.
(3) During the first quarter of fiscal 2013, we completed a $1 billion stock repurchase program announced in February 2011 and initiated a $2
billion stock repurchase program announced in February 2012. Under this new program, we repurchased a total of 24.7 million shares of
common stock (including 8.1 million in shares in the fourth quarter) at a cost of $1.1 billion in fiscal 2013. Additionally, in February 2013, we
announced our 14th stock repurchase program for an additional $1.5 billion.
21
ITEM 6. Selected Financial Data
Dollars in millions
except per share amounts
Income statement and per share data:
Net sales
Income from continuing operations
Weighted average common shares for diluted
Fiscal Year Ended January
2013
2012
2011
2010
2009
(53 Weeks)
(53 Weeks)
$ 25,878
$ 1,907
$ 23,191 $ 21,942 $ 20,288 $ 19,000
915
$ 1,496 $ 1,340 $ 1,214 $
earnings per share calculation (in thousands)(1)
747,555
773,772
812,826
855,239
884,510
Diluted earnings per share from continuing
operations(1)
Cash dividends declared per share(1)
Balance sheet data:
Cash and cash equivalents
Working capital
Total assets
Capital expenditures
Long-term obligations(2)
Shareholders’ equity
Other financial data:
$
$
2.55
0.46
$
$
1.93 $
0.38 $
1.65 $
0.30 $
1.42 $
0.24 $
1.04
0.22
$ 1,812
$ 1,951
$ 9,512
978
$
$
775
$ 3,666
454
$ 1,507 $ 1,742 $ 1,615 $
$ 2,069 $ 1,966 $ 1,909 $
858
$ 8,282 $ 7,972 $ 7,464 $ 6,178
583
$
$
384
$ 3,209 $ 3,100 $ 2,889 $ 2,135
429 $
790 $
707 $
788 $
803 $
785 $
After-tax return (continuing operations) on average
shareholders’ equity
Total debt as a percentage of total capitalization(3)
55.5%
17.4%
47.4%
19.7%
44.7%
20.3%
48.3%
21.5%
42.9%
26.7%
Stores in operation:
In the United States:
T.J. Maxx
Marshalls
Sierra Trading Post
HomeGoods
A.J. Wright(4)
In Canada:
Winners
HomeSense
Marshalls
In Europe:
T.K. Maxx
HomeSense
Total
Selling square footage (in thousands):
In the United States:
T.J. Maxx
Marshalls
Sierra Trading Post
HomeGoods
A.J. Wright(4)
In Canada:
Winners
HomeSense
Marshalls
In Europe:
T.K. Maxx
HomeSense
Total
1,036
904
4
415
—
222
88
14
343
24
3,050
23,894
22,380
83
8,210
—
5,115
1,698
363
7,830
411
69,984
983
884
—
374
—
216
86
6
923
830
—
336
142
215
82
—
890
813
—
323
150
211
79
—
874
806
—
318
135
202
75
—
332
24
2,905
307
24
2,859
263
14
2,743
235
7
2,652
22,894
22,042
—
7,391
—
5,008
1,670
162
7,588
402
67,157
21,611
20,912
—
6,619
2,874
4,966
1,594
—
7,052
402
66,030
20,890
20,513
—
6,354
3,012
4,847
1,527
—
6,106
222
63,471
20,543
20,388
—
6,248
2,680
4,647
1,437
—
5,404
107
61,454
(1) Fiscal 2011, fiscal 2010 and fiscal 2009 have been restated to reflect the two-for-one stock split effected in February 2012.
(2) Includes long-term debt, exclusive of current installments and capital lease obligation, less portion due within one year.
(3) Total capitalization includes shareholders’ equity, short-term debt, long-term debt and capital lease obligation, including current maturities.
(4) 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 53-week fiscal year ended February 2, 2013 (fiscal 2013) and our
52-week fiscal years ended January 28, 2012 (fiscal 2012) and January 29, 2011 (fiscal 2011).
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. Our over 3,000 stores offer a rapidly changing assortment of quality, fashionable, brand-name and
designer apparel, home fashions and other merchandise at prices generally 20% to 60% below department and
specialty store regular prices, every day. We operate our business in four divisions: Marmaxx (which operates
T.J. Maxx and Marshalls) and HomeGoods, both in the United States; TJX Canada (which operates Winners,
HomeSense and Marshalls in Canada); and TJX Europe (which operates T.K. Maxx and HomeSense in Europe).
Fiscal 2013 was another record year for us. Highlights of our financial performance for fiscal 2013 include
the following:
— In fiscal 2013, 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.
• Net sales increased to $25.9 billion for fiscal 2013, up 12% over fiscal 2012. The 53rd week in fiscal
2013 increased net sales by 2%.
• Same store sales, on a 52-week basis, increased 7% in fiscal 2013 over increases of 4% in each of
the previous two years. The fiscal 2013 increase was driven by an increase in customer traffic as we
continued to grow our customer base.
• Earnings per share for fiscal 2013 were $2.55 per diluted share, up 32% compared to $1.93 per
diluted share in fiscal 2012, or up 28% compared to fiscal 2012 adjusted* diluted earnings per share
of $1.99. The 53rd week added approximately $0.08 per share to fiscal 2013 earnings.
• All of our divisions exceeded our expectations in fiscal 2013, posting strong same store sales
increases and increases in segment profits.
* Adjusted measures exclude certain items affecting comparability. See “Adjusted Financial Measures” below.
— In fiscal 2013, we continued to drive the growth of our divisions.
• At February 2, 2013, the number of stores in operation was up 5% and selling square footage was up
4% over the end of fiscal 2012. We expect to end fiscal 2014 with 3,200 stores, which would
represent a 5% increase in our consolidated store base and a 4% increase in our selling square
footage.
• All of our divisions posted strong same store sales increases, driven by increases in customer traffic.
New T.J. Maxx and Marshalls stores performed well as we expanded into more rural markets as well
as major cities. The Marshalls chain in Canada also has performed well and TJX Europe regained its
momentum with a very strong 10% same store sales increase.
• We invested in e-commerce. In December, 2012, we purchased Sierra Trading Post, an off-price
internet retailer. We expect to launch our T.J. Maxx website in a small, controlled mode in the second
half of fiscal 2014.
— We continued our focus on operating with lean inventories, driving rapid merchandise turns and
controlling expenses.
• Our fiscal 2013 pre-tax margin (the ratio of pre-tax income to net sales) was 11.9%, a 1.5 percentage
point increase compared to fiscal 2012, and a 1.2 percentage point increase from an adjusted 10.7%
for fiscal 2012. The 53rd week benefited the fiscal 2013 pre-tax margin by approximately 0.2
percentage points.
23
• Our cost of sales ratio for fiscal 2013 improved 1.1 percentage points to 71.6% compared to fiscal
2012 and improved 1.0 percentage points compared to an adjusted basis for fiscal 2012. The
improvements over last year were primarily due to improved merchandise margins and buying and
occupancy expense leverage.
• Our selling, general and administrative expense ratio for fiscal 2013 decreased 0.4 percentage points
from 16.8% in fiscal 2012 to 16.4%. On an adjusted basis, this ratio decreased 0.1 percentage points
from an adjusted16.5% in fiscal 2012.
• Our consolidated average per store inventories,
including inventory on hand at our distribution
centers, but excluding our internet based business Sierra Trading Post, were down 6% at the end of
fiscal 2013.
— We continued to use cash to return value to our shareholders.
• During fiscal 2013, we repurchased 30.6 million shares of our common stock for $1.3 billion. Earnings
per share reflect the benefit of the stock repurchase program. In February 2013, our Board of
Directors authorized our 14th stock repurchase program for an additional $1.5 billion. We expect to
repurchase approximately $1.3 to $1.4 billion of our stock in fiscal 2014.
• We paid quarterly dividends of $0.115 per share for fiscal 2013. We expect to pay quarterly dividends
for fiscal 2014 of $0.145 per share, or an annual dividend of $0.58 per share, which would represent a
26% increase over the prior year, subject to the declaration and approval of our Board of Directors.
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 2013 totaled $25.9 billion, a 12% increase over $23.2 billion in
fiscal 2012. The increase reflected a 7% increase from same store sales, a 3% increase from new stores and a
2% increase from the impact of the 53rd week in the fiscal 2013 calendar. Foreign currency exchange rates had
an immaterial impact on fiscal 2013 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 store sales.)
Same store sales increases in the U.S. for fiscal 2013 were driven by an increase in customer traffic, and to a
lesser extent an increase in the value of the average transaction. Sales of both apparel and home fashions were
equally 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 virtually all other regions close to the
consolidated average. Our foreign segments both posted same store sales increases, with TJX Europe above
the consolidated average and TJX Canada below the consolidated average.
Same store sales increases in the U.S. for fiscal 2012 reflected an increase in both the value of the average
transaction and 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. For the 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, but both Europe and Canada posted strong same store sales gains in the fourth quarter of fiscal 2012.
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
24
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. We define customer traffic to
be the number of transactions in stores included in the same store sales calculation.
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 2013
Percentage of Net Sales
Fiscal year 2012
Percentage of Net Sales
Fiscal year 2011
As reported
As reported As adjusted* As reported As adjusted*
100.0%
100.0%
100.0%
100.0%
100.0%
71.6
16.4
—
0.1
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
11.9%
10.4%
10.7%
9.9%
10.6%
$ 2.55
$ 1.93
$ 1.99
$ 1.65
$ 1.75
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**
Diluted earnings per share-continuing
operations
* See “Adjusted Financial Measures” below.
** Figures may not foot due to rounding.
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 exchange rates affect 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.
— 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 generally accepted accounting principles (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 71.6% in fiscal 2013, 72.7% in fiscal 2012 and 73.1% in fiscal 2011. The
1.1 percentage point improvement in this ratio for fiscal 2013 was primarily due to improved merchandise
margins, driven by lower markdowns, as well as expense leverage on the strong same store sales increase. In
addition, the 53rd week in fiscal 2013 benefitted this expense ratio by approximately 0.2 percentage points.
25
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 a decrease in merchandise margins at TJX Europe
and TJX Canada.
Selling, general and administrative expenses: Selling, general and administrative expenses as a
percentage of net sales were 16.4% in fiscal 2013, 16.8% in fiscal 2012 and 16.9% in fiscal 2011. On an
adjusted basis, this ratio was 16.5% in fiscal 2012 and 16.3% in fiscal 2011. The improvement in this ratio for
fiscal 2013 was primarily due to expense leverage on strong same store sales, partially offset by contributions to
the TJX Foundation and by expenses related to two third quarter items: a non-cash charge for the cumulative
impact of a correction to our pension accrual for prior years and a non-operating charge due to the adjustment
in our reserve for former operations relating to closed stores.
The increase in the adjusted selling, general and administrative expense ratio in fiscal 2012 compared to
fiscal 2011 was driven by 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.
Interest expense, net: 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
February 2,
2013
January 28,
2012
January 29,
2011
$ 48,582
(7,750)
(11,657)
$ 49,276
(2,593)
(11,035)
$49,014
—
(9,877)
$ 29,175
$ 35,648
$39,137
Gross interest expense has remained fairly constant over the last three fiscal years. The reduction in our net
interest expense position in both fiscal 2013 and in fiscal 2012 was due to capitalized interest on major capital
projects that have not yet been placed in service.
Income taxes: Our effective annual income tax rate was 38.0% in fiscal 2013, 38.0% in fiscal 2012 and
38.1% in fiscal 2011. TJX’s effective rate remained constant for fiscal 2013 as compared to fiscal 2012. The
fiscal 2013 effective tax rate benefitted from an increase in foreign earnings, which are taxed at lower rates, but
this benefit was offset by the absence of the benefit in fiscal 2012 due to a net reduction in federal and state tax
reserves. The decrease in the effective income tax rate for fiscal 2012 as compared to fiscal 2011 is primarily
attributable to a reduction in the fiscal 2012 tax reserves related to the favorable resolution of U.S. Federal tax
audits, partially offset by an increase in state and U.S. Federal tax reserves, for a net decrease in the provision.
Income from continuing operations and diluted earnings per share from continuing operations:
Income from continuing operations was $1.9 billion in fiscal 2013, a 27% increase over $1.5 billion in fiscal 2012,
which in turn was a 12% increase over $1.3 billion in fiscal 2011. Diluted earnings per share were $2.55 in fiscal
2013, $1.93 in fiscal 2012 and $1.65 in fiscal 2011.
Fiscal 2013 diluted earnings per share included an approximate $0.08 per share benefit due to the impact of
the 53rd week in the fiscal 2013 calendar. Adjusted diluted earnings per share were $1.99 for fiscal 2012 and
$1.75 for fiscal 2011 (see Adjusted Financial Measures).
Foreign currency exchange rates also affected the comparability of our results. Foreign currency exchange
rates had an immaterial impact on earnings per share in fiscal 2013 compared to fiscal 2012 but benefitted fiscal
2012 earnings per share by $0.01 per share compared with a $0.01 per share negative impact in fiscal 2011.
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 30.6 million shares of our stock at a cost
of $1.3 billion in fiscal 2013, 49.7 million shares of our stock at a cost of $1.4 billion in fiscal 2012, and
55.1 million shares at a cost of $1.2 billion in fiscal 2011.
26
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 $1.9 billion, or $2.55 per share, for
fiscal 2013, $1.5 billion, or $1.93 per share, for fiscal 2012, and $1.3 billion, or $1.65 per share, for fiscal 2011.
Adjusted Financial Measures: In addition to presenting financial results in conformity with GAAP, we are
also presenting certain measures on an “adjusted” basis. We adjusted them to exclude:
•
•
from the fiscal 2012 results, costs related to the A.J. Wright consolidation incurred in fiscal 2012,
including closing costs, additional operating losses related to the A.J. Wright stores closed in fiscal
2012 and the costs incurred by the Marmaxx and HomeGoods segments to convert former A.J. Wright
stores to their banners and hold grand re-opening events for these stores, and
from the fiscal 2011 results, costs related to the A.J. Wright consolidation incurred in fiscal 2011 (which
included a majority of the costs related to closing the A.J. Wright business and the operating loss of the
A.J. Wright segment for the fourth quarter of fiscal 2011), and the benefit of a reduction to the provision
for the Computer Intrusion which occurred over four years ago.
These adjusted financial results are non-GAAP financial measures. We believe that the presentation of
adjusted financial results provides additional information on comparisons between periods including underlying
trends of our business by excluding these items that affect overall comparability. We use these adjusted
measures in making financial, operating and planning decisions and in evaluating our performance, and our
Board of Directors uses them in assessing our business and making compensation decisions. Non-GAAP
financial measures should be considered in addition to, and not as an alternative for, our reported results
prepared in accordance with GAAP.
Reconciliations of each of the adjusted financial measures to the financial measures in accordance with
GAAP for fiscal 2012 and fiscal 2011 are provided below.
Fiscal year 2012
As reported
% of Net
Fiscal year 2012
As adjusted
Dollars in millions, except per share data
U.S.$
Sales Adjustments
U.S.$*
Net sales
Cost of sales, including buying and occupancy costs
Gross profit margin
Selling, general and administrative expenses
Income from continuing operations before provision for
income taxes
Diluted earnings per share-continuing operations
$
$23,191
16,854
—
3,890
72.7%
27.3%
16.8%
(16)(2)
(9)(1) $23,182
16,838
—
3,828
(63)(3)
$ 2,411
$ 1.93
10.4% $ 69
$ 2,481
$0.06(4) $ 1.99
% of Net
Sales
72.6%
27.4%
16.5%
10.7%
Fiscal year 2011
As reported
% of Net
Fiscal year 2011
As adjusted
% of Net
Sales
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
15,798
(242)(6)
(177)(7)
12(8)
3,533
—
72.9%
— 27.1%
16.3%
9.9% $ 129
$ 2,293
$ 0.10(9) $ 1.75
10.6%
(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).
27
(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). 2012 effective tax rate used in computation.
(5) Sales associated with A.J. Wright prior to closing ($279 million).
(6) Cost of sales, including and 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 ($0.01 per share). 2011 effective tax rate used in computation.
The costs to convert A.J. Wright stores to other banners and to hold grand re-openings affected our
Marmaxx and HomeGoods segments in fiscal 2012. A reconciliation of adjusted segment margin, a non-GAAP
financial measure, to segment margin as reported in accordance with GAAP for each of these segments is as
follows:
Fiscal 2012
As reported
Fiscal 2012
As adjusted
Fiscal 2011
As reported
U.S.$ in
Millions
$2,073
$ 234
% of Net
Sales Adjustments
U.S.$ in
Millions*
% of Net
Sales
U.S.$ in
Millions
% of Net
Sales
13.5%
10.4%
$17(1)
$ 3(2)
$2,090
$ 238
13.6% $1,876
10.6% $ 187
13.3%
9.5%
Marmaxx segment profit
HomeGoods segment profit
* 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.
Segment information: We operate four main business segments. Marmaxx (T.J. Maxx and Marshalls) and
HomeGoods both operate stores in the United States. 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.) Late in fiscal 2013 we
acquired Sierra Trading Post (STP), an off-price internet retailer. The results of STP are not material and have
been included with our Marmaxx segment. 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. These measures 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.
28
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
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
$17,011.4 $15,367.5 $14,092.2
$ 2,486.3 $ 2,073.4 $ 1,876.0
14.6%
n/a
6%
1,036
904
1,940
23,894
22,380
46,274
13.5%
13.6%
5%
983
884
13.3%
n/a
4%
923
830
1,867
1,753
22,894
22,042
44,936
21,611
20,912
42,523
* See “Adjusted Financial Measures” above.
At February 2, 2013, STP operated 4 stores with a selling square footage of 83,000.
Net sales at Marmaxx increased 11% in fiscal 2013 as compared to fiscal 2012. Same store sales for
Marmaxx were up 6% in fiscal 2013, on top of a 5% increase in the prior year. Same store sales growth at
Marmaxx for fiscal 2013 was driven by an increase in customer traffic, with both apparel and home fashions
posting solid same store sales gains. Geographically, same store sales were strong throughout the country.
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. The categories that posted particularly strong same
store sales increases in fiscal 2012 were dresses, men’s, shoes and accessories. Geographically, same store
sales increases were strong throughout the country, with Florida and the Southwest the strongest and the
Midwest below the chain average.
Segment margin was up 1.1 percentage points to 14.6% for fiscal 2013 compared to 13.5% for fiscal 2012.
This increase was primarily due to a 0.6 percentage point improvement in merchandise margin, largely due to
lower markdowns. The fiscal 2013 segment margin also benefitted from expense leverage (particularly
occupancy costs, which improved by 0.4 percentage points) on strong same store sales growth and the 53rd
week which lifted the fiscal 2013 segment margin by approximately 0.2 percentage points.
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.
We believe our ongoing store remodel program has benefited our sales in this segment. As a result of the
remodel program and our new store openings, approximately 75% of T.J. Maxx and Marshall’s stores were in
the new prototype at the end of fiscal 2013.
In fiscal 2014, we expect to open approximately 75 new Marmaxx stores (net of closings) and increase
selling square footage by approximately 3%.
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 “Adjusted Financial Measures” above.
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
$2,657.1
$ 324.6
$2,244.0
$ 234.4
$1,958.0
$ 186.5
12.2%
n/a
7%
415
8,210
10.4%
10.6%
6%
374
7,391
9.5%
n/a
6%
336
6,619
HomeGoods’ net sales increased 18% in fiscal 2013 compared to fiscal 2012, on top of a 15% increase in
fiscal 2012 when compared to fiscal 2011. Same store sales increased 7% in fiscal 2013, on top of a same store
sales increase of 6% in fiscal 2012. Same store sales growth was driven by an increase in customer traffic and,
to a lesser extent, an increase in the value of the average transaction in both years. Segment profit margin for
fiscal 2013 was 12.2%, up from 10.4% for fiscal 2012. The increase was driven by expense leverage on the 7%
same store sales increase, particularly occupancy and administrative costs, and an increase in merchandise
margins. 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 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 (which excludes the A.J. Wright
conversion costs) increased 1.1 percentage points to 10.6%.
In fiscal 2014, we plan a net increase of approximately 30 HomeGoods stores and plan to increase selling
square footage by approximately 7%.
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 totaled $49.3 million and were reported as an A.J. Wright segment loss in the
first quarter of fiscal 2012.
In fiscal 2011 A.J. Wright had a segment loss of $130.0 million on net sales of $888.4 million. A majority of
the costs related to the closing of A.J. Wright were recorded in the fourth quarter of fiscal 2011. The fiscal 2011
segment loss includes a fourth quarter loss of $140.6 million.
Due to the anticipated migration of A.J. Wright customers to our other U.S. segments, A.J. Wright was not
treated as a discontinued operation for financial reporting purposes.
30
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 increase (decrease) 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 Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
$2,926.0
$ 414.9
$2,680.1
$ 348.0
$2,510.2
$ 352.0
14.2%
5%
13.0%
(1)%
14.0%
4%
222
88
14
324
5,115
1,698
363
7,176
216
86
6
308
5,008
1,670
162
6,840
215
82
—
297
4,966
1,594
—
6,560
Net sales for TJX Canada increased 9% in fiscal 2013 as compared to fiscal 2012. Currency translation
negatively impacted sales growth by 1 percentage point in fiscal 2013, as compared to the same period last
year. Same store sales increased 5% in fiscal 2013 compared to a decrease of 1% in fiscal 2012.
Segment profit for fiscal 2013 increased to $414.9 million, and segment profit margin increased 1.2
percentage points to 14.2%. The improvement in segment margin was driven by increased merchandise margin,
largely due to lower markdowns. This increase in segment margin was partially offset by increased incentive
compensation accruals in fiscal 2013 as compared to fiscal 2012. Foreign currency translation and the mark-to-
market adjustment on inventory related hedges did not have a significant impact on fiscal 2013 segment profit
and segment margin.
Net sales for TJX Canada increased 7% in fiscal 2012 as compared to fiscal 2011. Currency translation
benefitted fiscal 2012 sales growth by approximately 4 percentage points, as compared to the same period in
fiscal 2011. 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.
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.
31
We expect to add a net of approximately 20 stores in Canada in fiscal 2014 and plan to increase selling
square footage by approximately 6%.
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
February 2,
2013
January 28,
2012
January 29,
2011
$3,283.9
$ 215.7
$2,890.7
68.7
$
$2,493.5
75.8
$
6.6%
10%
2.4%
2%
3.0%
(3)%
343
24
367
7,830
411
8,241
332
24
356
7,588
402
7,990
307
24
331
7,052
402
7,454
Net sales for TJX Europe increased 14% in fiscal 2013 to $3.3 billion compared to $2.9 billion in fiscal 2012.
Currency translation negatively impacted fiscal 2013 sales growth by 2 percentage points. Fiscal 2013 same
store sales increased 10% compared to an increase of 2% in fiscal 2012.
Segment profit more than tripled to $215.7 million for fiscal 2013, and segment profit margin increased to
6.6%. The improvements we saw in the fourth quarter of fiscal 2012 in this segment’s performance as we
slowed growth and re-focused on off-price fundamentals continued throughout fiscal 2013. More than half of the
improvement in segment margin came from improved merchandise margins, which was virtually all due to lower
markdowns. Segment profit and segment margin for fiscal 2013 as compared to 2012, benefitted from the
absence of the fiscal 2012 charges for closing an office facility and the write-off of certain technology systems
and other adjustments. The impact of foreign currency translation and the mark-to-market adjustment on
inventory-related hedges was immaterial for fiscal 2013.
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%.
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 and the charges and write-offs referenced above. 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.
32
We expect to add approximately 25 net stores in Europe in fiscal 2014 and plan to increase selling square
footage by approximately 6%.
General Corporate Expense:
Dollars in millions
General corporate expense
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
$335.0
$228.3
$168.7
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 2013 includes contributions to the TJX Foundation, an
adjustment to our reserve for former operations and the acquisition costs of Sierra Trading Post. These items
account for $56 million of the increase in general corporate expense. In addition, general corporate expense for
fiscal 2013 includes increased incentive compensation accruals under our performance-based plans, additional
investments in systems and technology and additional costs related to the expansion of our home office
facilities.
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.
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 $3,046 million in fiscal 2013, $1,916 million in fiscal 2012 and
$1,976 million in fiscal 2011. The cash generated from operating activities in each of these fiscal years was
largely due to operating earnings.
Operating cash flows for fiscal 2013 increased $1,130 million compared to fiscal 2012. Net income plus the
non-cash impact of depreciation and impairment charges provided cash of $2,427 million in fiscal 2013
compared to $1,995 million in fiscal 2012, an increase of $432 million. The change in merchandise inventory, net
of the related change in accounts payable, resulted in a source of cash of $239 million in fiscal 2013, compared
to a use of cash of $224 million in fiscal 2012. This change was attributable to faster inventory turns and a
reduction in consolidated inventories on a per-store basis, including the distribution centers, which was down
6% at the end of fiscal 2013 as compared to fiscal 2012 (excluding Sierra Trading Post). The increase in accrued
expenses and other liabilities favorably impacted cash by $269 million in fiscal 2013 versus $14 million in fiscal
2012, which was primarily driven by an increase in accrued incentive compensation and accrued pension.
Additionally, operating cash flows increased by $48 million year-over-year due to the change in deferred income
tax provision and income taxes payable which was largely offset by a reduction in operating cash flows of $47
million due to an increase in accounts receivable and prepaid expenses. The increase in prepaid expenses was
primarily due to the timing of rental payments.
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 million 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.
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
33
real estate leases associated with these operations. The reserve balance was $45.2 million at February 2, 2013
and $45.4 million at January 28, 2012. 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
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
$170.7
282.7
524.8
$978.2
$211.6
319.8
271.9
$803.3
$196.3
301.0
209.8
$707.1
We expect that we will spend approximately $925 million to $950 million on capital expenditures in fiscal
2014,
including approximately $444 million for our offices and distribution centers (including buying and
merchandising systems and information systems) to support growth, $316 million for store renovations and $190
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 2013, we purchased $356 million of
such short-term investments, compared to $152 million in fiscal 2012. Additionally, $213 million of such short-
term investments were sold or matured during fiscal 2013 compared to $133 million last year.
Investing activities for fiscal 2013 also included the net cash paid in December 2012 for the acquisition of
STP, an off-price internet retailer. The purchase price, net of cash acquired was $190 million which is subject to
customary post-closing adjustments. See Note B to the consolidated financial statements for more information.
Financing activities:
Cash flows from financing activities resulted in net cash outflows of $1,476 million in fiscal 2013; $1,336
million in fiscal 2012 and $1,224 million in fiscal 2011.
Under our stock repurchase programs, we spent $1,300 million to repurchase 30.6 million shares of our
stock in fiscal 2013, $1,370 million to repurchase 49.7 million shares in fiscal 2012 and $1,201 million to
repurchase 55.1 million shares in fiscal 2011. See Note D to the consolidated financial statements for more
information. In February 2013, our Board of Directors authorized an additional repurchase program authorizing
the repurchase of up to an additional $1.5 billion of TJX stock. We currently plan to repurchase approximately
$1.3 billion to $1.4 billion of stock under our stock repurchase programs in fiscal 2014. 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.
We declared quarterly dividends on our common stock which totaled $0.46 per share in fiscal 2013, $0.38
per share in fiscal 2012 and $0.30 per share in fiscal 2011. Cash payments for dividends on our common stock
totaled $324 million in fiscal 2013, $275 million in fiscal 2012 and $229 million in fiscal 2011. We also received
proceeds from the exercise of employee stock options of $134 million in fiscal 2013, $219 million in fiscal 2012
and $176 million in fiscal 2011.
We traditionally have funded our working capital requirements, including for seasonal merchandise, primarily
through cash generated from operations, supplemented, as needed, by short-term bank borrowings and the
issuance of commercial paper. We believe our existing cash and cash equivalents, internally generated funds
and our credit facilities, described in Note J to the consolidated financial statements, are more than adequate to
meet our operating needs over the next fiscal year.
34
Contractual obligations: As of February 2, 2013, we had known contractual obligations (including current
installments) under long-term debt arrangements, operating leases for property and equipment and purchase
obligations as follows (in thousands):
Tabular Disclosure of Contractual Obligations
Long-term debt obligations(1)
Operating lease commitments(2)
Purchase obligations(3)
Payments Due by Period
Total
Less Than
1 Year
1-3
Years
3-5
Years
More Than
5 Years
$ 1,007,838 $
6,719,214
2,956,330
42,863 $ 485,725 $
1,185,379
2,823,533
2,080,098
119,250
52,125 $ 427,125
1,966,484
52
1,487,253
13,495
Total Obligations
$10,683,382 $4,051,775 $2,685,073 $1,552,873 $2,393,661
(1) Includes estimated interest costs.
(2) Reflects minimum rent. Does 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 total minimum rent for fiscal 2013. Does not include leases
reflected in our reserve for former operations.
(3) Includes estimated obligations under purchase orders for merchandise and under agreements for capital items, products and services used in
our business, including executive employment and other agreements. Excludes agreements that can be cancelled without penalty.
We also have long-term liabilities for which it is not reasonably possible for us to predict when they may be
paid which include $395.3 million for employee compensation and benefits and $257.2 million for uncertain tax
positions.
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. We do not generally enter into arrangements with vendors that provide for rebates and allowances
that could ultimately affect the value of inventory.
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
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.
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.
35
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, can
have a significant impact on the annual cost of retirement benefits and the funded status of our qualified pension
plan. When the discount rate, market performance of our plan assets, changes in tax or other benefits laws and
regulations, or other factors have a negative impact on the funded status of our plan, our required contributions
may increase. We also consider these factors in determining the amount of voluntary contributions we may make
to the plan in excess of mandatory funding requirements. In fiscal 2013 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 reductions to or additions to 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 leases, 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
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. 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
36
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 E 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 February 2, 2013, 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 2013 by approximately $65 million.
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-31 of this Annual Report on
Form 10-K.
37
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 2013 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
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
38
reporting as of February 2, 2013 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 February 2, 2013.
(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 February 2, 2013, 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
Executive Officers of the Registrant
The following are the executive officers of TJX as of April 2, 2013:
Name
Age Office and Employment During Last Five Years
Bernard Cammarata
Ernie Herrman
73 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.
52 President since January 2011. Senior Executive Vice President, Group President
from August 2008 to January 2011. Senior Executive Vice President from 2007 to
2008 and President, Marmaxx from 2005 to 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
59 Executive Vice President and Chief Financial Officer since January 2012. Executive
Michael MacMillan
Carol Meyrowitz
Vice President, Finance from June 2009 to January 2012. Senior Vice President,
Corporate Controller from 2007 to 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.
56 Senior Executive Vice President, Group President, TJX Europe since January 2012.
Senior Executive Vice President, Group President from 2011 to January 2012.
President, Marmaxx from 2008 to 2011. President, Winners Merchants International
(WMI) from 2003 to 2008, Executive Vice President, WMI from 2000 to 2003.
Previous finance positions from 1985 to 2000.
59 Chief Executive Officer since January 2007, Director since 2006 and President from
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. Various merchandising positions with TJX since joining in 1987.
Jerome Rossi
69 Senior Executive Vice President, Group President, since January 2007. Senior
Executive Vice President, Chief Operating Officer, Marmaxx from 2005 to 2007.
President, HomeGoods, from 2000 to 2005. Executive Vice President, Store
Operations, Human Resources and Distribution Services, Marmaxx from 1996 to
2000.
Richard Sherr
55 Senior Executive Vice President, Group President, since January 2012. President,
HomeGoods from 2010 to 2012. Chief Operating Officer, Marmaxx from 2007 until
2010. Various merchandising positions at TJX from 1992 to 2007.
Nan Stutz
55 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 TJX since 1990.
The executive officers hold office until the next annual meeting of the Board in June 2013 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 February 2, 2013 (Proxy Statement). The information required by this
Item and not given in this Item will appear under the headings “Election of Directors” and “Corporate
40
Governance,” including in “Board Committees and Meetings”, “Audit Committee Report” and “Section 16(a)
Beneficial Ownership Reporting Compliance” 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 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 headings “Executive Compensation” and
“Director Compensation” in our Proxy Statement, which sections are 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 headings “Equity Compensation Plan
Information” and “Beneficial Ownership” in our Proxy Statement, which sections are 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 heading “Corporate Governance,” including in
“Transactions with Related Persons” and “Board Independence,” in our Proxy Statement, which section is
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 February 2, 2013
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Reserves Related to Former Operations :
Fiscal Year Ended February 2, 2013
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Casualty Insurance Reserve:
Fiscal Year Ended February 2, 2013
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Computer Intrusion Reserve:
Fiscal Year Ended February 2, 2013
Fiscal Year Ended January 28, 2012
Fiscal Year Ended January 29, 2011
Balance
Beginning
of Period
Amounts
Charged to
Net Income
Write-Offs
Against
Reserve
Balance
End of
Period
$22,348 $1,603,462 $1,589,192 $36,618
$17,151 $1,387,956 $1,382,759 $22,348
$16,855 $1,051,999 $1,051,703 $17,151
$45,381 $
$54,695 $
16,996 $
33,547 $
17,148 $45,229
42,861 $45,381
$35,897 $
32,575 $
13,777 $54,695
$ 9,079 $
$14,241 $
6,436 $
(3,942) $
883 $14,632
1,220 $ 9,079
$17,116 $
(555) $
2,320 $14,241
$15,864 $
$17,340 $
— $
— $
97 $15,767
1,476 $15,864
$23,481 $
(1,550) $
4,591 $17,340
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.
3(i).1
3(ii).1
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
Description of Exhibit
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.
By-laws of TJX, as amended, are incorporated herein by reference to Exhibit 3.1 to the Form 8-K filed
on 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 (File 333-
158360).
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 13, 2012 between Bernard Cammarata and TJX is
incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended July 28,
2012.*
The Employment Agreement dated February 1, 2013 between Carol Meyrowitz and TJX is filed
herewith.*
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
Letter Agreement between Jeffrey Naylor and TJX dated February 1, 2013 is filed herewith.*
The Employment Agreement dated February 1, 2013 between Ernie Herrman and TJX is filed
herewith.*
The Employment Agreement dated as of January 29, 2012 between Jerome Rossi and TJX is
incorporated herein by reference to Exhibit 10.6 to the Form 10-K filed for the year ended January 28,
2012.*
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 incorporated herein by reference to Exhibit 10.10 to the Form 10-K filed for the year
ended January 28, 2012.*
The Employment Agreement dated February 1, 2013 between Nan Stutz and TJX is filed herewith.*
The Employment Agreement effective as of January 29, 2012 between Richard Sherr and TJX is
incorporated herein by reference to Exhibit 10.12 to the Form 10-K filed for the year ended January 28,
2012.*
The Employment Agreement effective as of January 29, 2012 between Scott Goldenberg and TJX is
incorporated herein by reference to Exhibit 10.13 to the Form 10-K filed for the year ended January 28,
2012.*
The Stock Incentive Plan (2009 Restatement), as amended and restated effective as of February 2,
2012, is incorporated herein by reference to Exhibit 10.15 to the Form 10-K filed for the year ended
January 28, 2012.*
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.*
43
Exhibit
No.
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
Description of Exhibit
The Form of 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.*
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.*
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 incorporated herein by reference to
Exhibit 10.19 to the Form 10-K filed for the year ended January 28, 2012.*
The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of
September 20, 2012 is incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the
quarter ended October 27, 2012. The Form of Non-Qualified Stock Option Terms and Conditions
granted under the Stock Incentive Plan as of September 20, 2012 is incorporated herein by reference
to Exhibit 10.2 to the Form 10-Q filed for the quarter ended October 27, 2012.*
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. The Form of Performance-Based Restricted Stock Award granted under the Stock
Incentive Plan as of April 2, 2012 is incorporated herein by reference to Exhibit 10.3 to the Form 10-Q
filed for the quarter ended April 28, 2012. The Form of Performance-Based Restricted Stock Award
granted under the Stock Incentive Plan as of February 1, 2013 is filed herewith.*
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. The Form of Performance-Based Deferred Stock Award granted under the Stock
Incentive Plan as of April 2, 2012 is incorporated herein by reference to Exhibit 10.3 to the Form 10-Q
filed for the quarter ended April 28, 2012.*
The Form of Deferred Stock Award for Directors granted under the Stock Incentive Plan is filed
herewith.*
Description of Director Compensation Arrangements is filed herewith.*
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. The Amendment to the Management Incentive Plan dated April 20, 2012 is incorporated herein
by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended April 28, 2012.*
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. The Amendment to the Long Range Performance Incentive Plan dated April 20, 2012 is
incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended April 28,
2012.*
The Management Incentive Plan and Long Range Performance Incentive Plan (2013 Restatement) is
filed herewith.*
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.*
44
Exhibit
No.
10.24
10.25
10.26
10.27
10.28
10.29
10.30
21
23
24
31.1
31.2
32.1
32.2
101
Description of Exhibit
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.*
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.*
The Canadian Executive Savings Plan (effective November 1, 1999) of Winners Merchants
International, LP (successor to Winners Apparel Ltd.) is filed herewith.*
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. *
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.*
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.*
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.*
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 February 2, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the
Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income,
(iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the
Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Consolidated Financial
Statements.
* Management contract or compensatory plan or arrangement.
Unless otherwise indicated, exhibits incorporated by reference were filed under Commission File
Number 001-04908.
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: April 2, 2013
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: April 2, 2013
*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 February 2, 2013, January 28, 2012 and January 29, 2011.
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Financial Statements:
Consolidated Statements of Income for the fiscal years ended February 2, 2013, January 28, 2012 and
January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Comprehensive Income for the fiscal years ended February 2,
2013, January 28, 2012 and January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Balance Sheets as of February 2, 2013 and January 28, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Cash Flows for the fiscal years ended February 2, 2013, January 28, 2012
and January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
Consolidated Statements of Shareholders’ Equity for the fiscal years ended February 2,
2013, January 28, 2012 and January 29, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
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
February 2, 2013 and January 28, 2012, and the results of their operations and their cash flows for each of the
three years in the period ended February 2, 2013 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 February 2, 2013, 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
April 2, 2013
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
February 2,
2013
(53 weeks)
$25,878,372 $23,191,455 $21,942,193
18,521,400
4,250,446
—
29,175
16,854,249
3,890,144
—
35,648
16,040,461
3,710,053
(11,550)
39,137
3,077,351
1,170,664
1,906,687
—
2,411,414
915,324
1,496,090
—
2,164,092
824,562
1,339,530
3,611
$ 1,906,687 $ 1,496,090 $ 1,343,141
$
$
$
$
$
$
$
2.60 $
— $
2.60 $
1.97 $
— $
1.97 $
733,588
761,109
2.55 $
— $
2.55 $
1.93 $
— $
1.93 $
747,555
773,772
0.46 $
0.38 $
1.67
0.01
1.68
800,291
1.65
—
1.65
812,826
0.30
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 S T A T E M E N T S O F C O M P R E H E N S I V E I N C O M E
Amounts in thousands
Net income
Other comprehensive income, net of related tax benefits of $16,727;
$54,792 in fiscal 2013 and 2012, respectively and tax provision of
$9,132 in fiscal 2011:
Foreign currency translation adjustments
Amortization of actuarial losses
Recognition of unfunded post retirement obligations
Total comprehensive income
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(53 weeks)
$1,906,687 $1,496,090 $1,343,141
6,200
14,026
(41,043)
(14,253)
4,833
(91,400)
38,325
5,219
(1,175)
$1,885,870 $1,395,270 $1,385,510
The accompanying notes are an integral part of the financial statements.
F-4
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 at
January 28, 2012
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 723,902,001 and 746,702,028, respectively
Additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings
Total shareholders’ equity
Fiscal Year Ended
February 2,
2013
January 28,
2012
$1,811,957 $1,507,112
94,691
204,304
2,950,523
270,133
105,869
235,853
222,788
3,014,214
330,512
96,219
5,711,543
5,132,632
607,759
2,514,998
3,771,999
6,894,756
3,671,514
349,778
2,311,813
3,426,966
6,088,557
3,382,180
3,223,242
2,706,377
—
260,801
316,269
8,748
253,913
179,935
$9,511,855 $8,281,605
$
— $
1,930,568
1,666,216
163,812
2,970
1,645,324
1,364,705
50,424
3,760,596
3,063,423
961,284
349,486
—
774,552
861,768
362,501
10,147
774,476
723,902
—
(213,392)
3,155,427
746,702
—
(192,575)
2,655,163
3,665,937
3,209,290
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$9,511,855 $8,281,605
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 C A S H F L O W S
Amounts 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
Cash paid for acquisition of Sierra Trading Post, net of cash
received
Other
Net cash (used in) investing activities
Cash flows from financing activities:
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 increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(53 weeks)
$ 1,906,687 $ 1,496,090 $ 1,343,141
508,929
11,876
13,265
64,416
(62,472)
(18,418)
27,186
(53,705)
211,689
268,901
176,076
(8,816)
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
3,045,614
1,916,034
1,976,481
(978,228)
(355,736)
213,000
(190,374)
34,490
(803,330)
(152,042)
132,679
(707,134)
(119,530)
180,116
—
11,652
—
(1,065)
(1,276,848)
(811,041)
(647,613)
(1,370)
(1,456)
(1,345,082)
133,771
62,472
(323,922)
(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)
(1,475,587)
(1,335,712)
(1,223,928)
11,666
(3,920)
22,204
304,845
1,507,112
(234,639)
127,144
1,741,751
1,614,607
$ 1,811,957 $ 1,507,112 $ 1,741,751
The accompanying notes are an integral part of the financial statements.
F-6
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
Amounts in thousands
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
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
Share-based compensation
Issuance of common stock under
stock incentive plan and related tax
effect
Common stock repurchased
Balance, January 28, 2012
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
Share-based compensation
Issuance of common stock under
stock incentive plan and related tax
effect
Common stock repurchased
Balance, February 2, 2013
Common Stock
Shares
Par Value
$1
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Total
818,772 $818,772 $
— $(134,124)
$ 2,204,628 $ 2,889,276
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,343,141
1,343,141
38,325
5,219
(1,175)
—
—
—
38,325
5,219
(1,175)
1,385,510
—
58,804
—
—
(239,003)
—
(239,003)
58,804
15,426
(54,884)
779,314
15,426
(54,884)
779,314
183,266
(242,070)
—
—
—
(91,755)
—
(896,426)
2,412,340
198,692
(1,193,380)
3,099,899
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,496,090
1,496,090
(14,253)
4,833
(91,400)
—
—
—
(14,253)
4,833
(91,400)
1,395,270
—
64,175
—
—
(288,035)
—
(288,035)
64,175
15,744
(48,356)
746,702
15,744
(48,356)
746,702
243,049
(307,224)
—
—
—
(192,575)
—
(965,232)
2,655,163
258,793
(1,320,812)
3,209,290
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,906,687
1,906,687
6,200
14,026
(41,043)
—
—
—
6,200
14,026
(41,043)
1,885,870
—
64,416
—
—
(336,214)
—
(336,214)
64,416
9,159
(31,959)
723,902 $723,902 $
9,159
(31,959)
178,498
(242,914)
—
—
— $(213,392)
—
(1,070,209)
187,657
(1,345,082)
$ 3,155,427 $ 3,665,937
The accompanying notes are an integral part of the financial statements.
F-7
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
are conducted by TJX or its subsidiaries and are consolidated in these financial statements. All
intercompany
transactions have been eliminated in consolidation.
Fiscal Year: TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year. The fiscal
years ended January 28, 2012 (fiscal 2012) and January 29, 2011 (fiscal 2011) each included 52 weeks. The fiscal year
ended February 2, 2013 (fiscal 2013) included 53 weeks.
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 effected in February,
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 $13.9 million in fiscal 2013, $10.9 million in fiscal 2012 and $10.1 million in fiscal 2011.
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 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. TJX’s investments are primarily high-grade
commercial paper, institutional money market funds and time deposits with major banks.
As of February 2, 2013, TJX’s cash and cash equivalents held outside the U.S. were $948.6 million, of which
$338.8 million was held in countries where TJX has the intention to reinvest any undistributed earnings indefinitely.
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. TJX utilizes a permanent markdown strategy and lowers
the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in the stores. TJX
accrues for inventory obligations at the time inventory is shipped. As a result, merchandise inventories on TJX’s
balance sheet include an accrual for in-transit inventory of $418.3 million at February 2, 2013 and $395.9 million at
January 28, 2012. Comparable amounts were reflected in accounts payable at those dates.
F-8
Common Stock and Equity: In February 2012, TJX effected a two-for-one stock split of its common stock
in the form of a stock dividend resulting in the issuance of 372 million shares of common stock. The balance
sheets and statement of shareholders’ equity for fiscal 2012 and prior have been adjusted to retroactively reflect
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. Under TJX’s stock repurchase programs the Company repurchases its 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, TJX has 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 up to the amount 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.
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 H 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
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(53 weeks)
$ 48,582
(7,750)
(11,657)
$ 49,276
(2,593)
(11,035)
$49,014
—
(9,877)
$ 29,175
$ 35,648
$39,137
TJX capitalizes interest during the active construction period of major capital projects. Capitalized interest is
added to the cost of the related assets. Capitalized interest in fiscal 2013 and 2012 relates to costs on active owned
real estate projects and development costs on a merchandising system. 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 $515.9 million for fiscal 2013, $490.6 million for
fiscal 2012 and $461.5 million for fiscal 2011. Amortization expense for property held under a capital lease was $1.7
million in fiscal 2013, $2.2 million in fiscal 2012 and $2.2 million in fiscal 2011. 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.
F-9
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 TJX’s long-lived assets by geographic location is
presented below:
Dollars in thousands
United States
Canada
Europe
Total long-lived assets
February 2,
2013
January 28,
2012
January 29,
2011
$2,350,539 $1,879,176 $1,657,090
210,693
592,999
$3,223,242 $2,715,125 $2,460,782
237,232
635,471
220,522
615,427
Goodwill and Tradename: Goodwill includes 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, as well as the excess of cost over the estimated fair market value of the net assets acquired
by TJX in the purchase of Winners in fiscal 1991 and the purchase of Sierra Trading Post in fiscal 2013 (See Note B).
Goodwill totaled $170.3 million as of February 2, 2013, $72.2 million as of January 28, 2012 and $72.2 million as
of January 29, 2011. Goodwill is considered to have an indefinite life and accordingly is not amortized.
Tradename is the value assigned to the name “Marshalls,” acquired by TJX in fiscal 1996 as part of the
acquisition of the Marshalls chain and the value assigned to the name “Sierra Trading Post,” acquired by TJX in fiscal
2013. The value of the tradename was determined by the discounted present value of assumed after-tax royalty
payments, offset by a reduction in the case of Marshalls, for the 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 and the Sierra
Trading Post tradename is carried at a value of $38.3 million and is being amortized over 15 years.
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) in each of the past three fiscal years. Our 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, using a quantitative assessment
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. We may assess qualitative factors to
determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount,
including goodwill. The assessment of qualitative factors is optional and at the Company’s discretion. We may
bypass the qualitative assessment in any period and perform the first step of the quantitative goodwill
impairment test as we did in fiscal 2013.
F-10
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 2013, 2012 or 2011.
Advertising Costs: TJX expenses advertising costs as incurred. Advertising expense was $298.6 million for fiscal
2013, $271.6 million for fiscal 2012 and $249.8 million for fiscal 2011.
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: TJX does not expect the adoption of recently issued accounting pronouncements
to have a significant impact on the Company’s results of operations, financial position or cash flow.
Note B. Acquisition of Sierra Trading Post
On December 21, 2012, TJX acquired Sierra Trading Post (STP), an off-price Internet retailer, which includes
the operating assets of its online business and four retail locations for $196 million, subject to customary post-
closing adjustments.
The acquisition was accounted for using the purchase method of accounting, accordingly, the purchase price has
been allocated to the tangible assets and liabilities and intangible assets acquired, based on their estimated fair
values.
The following table presents the allocation of the purchase price to the assets and liabilities acquired based on
their estimated fair values as of December 21, 2012:
Dollars in thousands
Current assets
Property and equipment
Other assets
Intangible assets
Total assets acquired
Total liabilities assumed
Net assets acquired
As of
December 21,
2012
$100,920
39,862
1,153
144,536
286,471
90,689
$195,782
The intangible assets include identified intangible assets of $39 million for the value of the tradename “Sierra
Trading Post” which is being amortized over 15 years and $8 million for customer relationships which is being
amortized over 6 years. The balance of the intangible assets is goodwill of $98 million.
The results of STP have been included in TJX’s consolidated financial statements from the date of
acquisition and were not material to our consolidated results for the period ended February 2, 2013 and have
been included with the Marmaxx segment. Pro forma results of operations assuming the acquisition of STP
occurred as of the beginning of fiscal 2013 have not been presented, as the inclusion of the results of operations
for the acquired business would not have produced a material impact on the reported sales, net income or
earnings per share of TJX.
F-11
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.
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
$
— $ 82,589
25,400
—
11,700
32,686
10,297
16,605
$129,986
$49,291
The impairment charges relate to furniture and fixtures and leasehold improvements that were disposed of
and deemed to have no value, as well as the costs of closure and adjustment to fair market value of A.J.
Wright’s two owned distribution centers, which were then classified as ‘held for sale’. Both distribution centers
had been sold as of February 2, 2013.
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 or sold. 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
February 2,
2013
January 28,
2012
January 29,
2011
$ 45,381
$ 54,695
$35,897
—
16,000
996
—
32,686
861
(6,000)
37,100
1,475
(15,682)
(1,466)
(21,821)
(21,040)
(7,155)
(6,622)
$ 45,229
$ 45,381
$54,695
In the third quarter of fiscal 2013, TJX increased this reserve by $16 million to reflect a change in TJX’s estimate of
lease related obligations. 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. TJX also added to the reserve the consolidation costs of the A.J. Wright chain detailed above.
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
F-12
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.
TJX may also be contingently liable on up to 12 leases of BJ’s Wholesale Club, a former TJX business, and up to
four leases of Bob’s Stores, also a former TJX business, in addition to leases included in the reserve. The reserve for
former operations does not reflect these leases because TJX believes that the likelihood of future liability to TJX is
remote.
Note D. Capital Stock and Earnings Per Share
Capital Stock: In February 2012, TJX effected a two-for-one stock split in the form of a stock dividend. All share
and per share information has been retroactively adjusted to reflect the stock split (see Note A).
TJX repurchased and retired 30.6 million shares of its common stock at a cost of $1.3 billion during fiscal 2013.
TJX reflects stock repurchases in its financial statements on a “settlement” basis. TJX had cash expenditures under
repurchase programs of $1.3 billion in fiscal 2013, $1.3 billion in fiscal 2012 and $1.2 billion in fiscal 2011 and
repurchased 32.0 million shares in fiscal 2013, 48.4 million shares in fiscal 2012 and 54.9 million shares in fiscal 2011.
These expenditures were funded primarily by cash generated from operations. In April 2012, TJX completed the $1
billion stock repurchase program authorized in February 2011. In February 2012, TJX’s Board of Directors approved
another stock repurchase program that authorizes the repurchase of up to an additional $2 billion of TJX common
stock from time to time.
Under the repurchase program authorized in February 2012, on a “trade date” basis, TJX repurchased
24.7 million shares of common stock at a cost of $1,075.3 million during fiscal 2013 and $924.7 million remained
available at February 2, 2013 under this program.
All shares repurchased under the stock repurchase programs have been retired.
In the first quarter of fiscal 2014, TJX’s Board of Directors approved a new stock repurchase program that
authorizes the repurchase of up to an additional $1.5 billion of TJX common stock from time to time.
TJX has five million shares of authorized but unissued preferred stock, $1 par value.
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:
Income from continuing operations
Weighted average common stock outstanding for basic earnings per
share calculation
Assumed exercise / vesting of:
Stock options and awards
Weighted average common stock outstanding for diluted earnings per
share calculation
Diluted earnings per share
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(53 weeks)
$1,906,687 $1,496,090 $1,339,530
733,588
761,109
$
2.60 $
1.97 $
800,291
1.67
$1,906,687 $1,496,090 $1,339,530
733,588
761,109
800,291
13,967
12,663
12,535
747,555
773,772
812,826
$
2.55 $
1.93 $
1.65
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
F-13
average price of TJX’s common stock. Such options are excluded because they would have an antidilutive effect.
There were 4.9 million such options excluded at the end of fiscal 2013. There were no such options excluded at the
end of fiscal 2012 or 2011.
Note E. 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 and to the extent 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. TJX does not
use derivative financial
instruments for trading or other speculative purposes and does not use any leveraged
instruments. TJX recognizes all derivative instruments as either assets or liabilities in the
derivative financial
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.
Diesel Fuel Contracts: During fiscal 2012 and fiscal 2013, TJX entered into agreements to hedge a portion of its
estimated notional diesel requirements for fiscal 2013 and fiscal 2014, based on the diesel fuel expected to be
consumed by independent freight carriers transporting TJX’s inventory. Independent freight carriers transporting
TJX’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 hedge agreements outstanding at February 2, 2013 relate to 29% of TJX’s estimated
notional diesel requirements for fiscal 2014. These diesel fuel hedge agreements will settle throughout fiscal 2014.
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 by TJX Europe (United Kingdom,
Ireland, Germany and Poland), TJX Canada (Canada), Marmaxx (U.S.) and HomeGoods (U.S.) in currencies other than
their respective functional currencies. These contracts typically have a term of twelve months or less. The contracts
outstanding at February 2, 2013 cover a portion of such actual and anticipated merchandise purchases throughout
fiscal 2014. TJX elected not to apply hedge accounting rules to these contracts.
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.
F-14
The following is a summary of TJX’s derivative financial
instruments, related fair value and balance sheet
classification at February 2, 2013:
In thousands
Pay
Receive
Fair value hedges:
Intercompany balances, primarily short-term
debt and related interest
44,551
zł 141,500
€ 44,281
35,781
€ 90,292 U.S.$ 118,511
55,000
C$
£
£
U.S.$ 87,117
Economic hedges for which hedge
accounting was not elected:
Diesel contracts
Fixed on 1.1M
—1.7M gal per
month
Merchandise purchase commitments
Float on 1.1M
—1.7M gal per
month
4,752
C$ 238,273 U.S.$ 240,814
3,700
C$
£ 67,746 U.S.$ 108,900
13,000
£ 10,935
5,443
7,099
€
€
€
U.S.$
Total fair value of financial instruments
Blended
Contract
Rate
Balance Sheet
Location
Current
Asset
U.S.$
Current
(Liability)
U.S.$
Net Fair
Value in
U.S.$ at
February 2,
2013
0.3148
0.8080
1.3125
0.6313
(Accrued Exp)
(Accrued Exp)
(Accrued Exp)
(Accrued Exp)
$ — $ (1,357)
(4,531)
(4,823)
(974)
—
—
—
$(1,357)
(4,531)
(4,823)
(974)
N/A
Prepaid Exp
3,372
—
3,372
1.0107
0.7786
1.6075
1.1888
0.7667
Prepaid Exp /
(Accrued Exp)
Prepaid Exp
Prepaid Exp
Prepaid Exp
Prepaid Exp
2,205
282
2,602
565
326
$9,352
(189)
—
—
—
—
$(11,874)
2,016
282
2,602
565
326
$(2,522)
The following is a summary of TJX’s derivative financial
instruments, related fair value and balance sheet
classification at January 28, 2012:
In thousands
Pay
Receive
Fair value hedges:
Intercompany balances, primarily short-term
debt and related interest
Blended
Contract
Rate
Balance Sheet
Location
Current
Asset
U.S.$
Current
(Liability)
U.S.$
Net Fair
Value in
U.S.$ at
January 28,
2012
zł
€
62,000
25,000
C$ 18,237
£ 21,335
0.2941
0.8534
75,292 U.S.$ 100,781
£ 55,000
85,389
Economic hedges for which hedge accounting
€
U.S.$
1.3385
0.6441
(Accrued Exp)
Prepaid Exp
Prepaid Exp /
(Accrued Exp)
Prepaid Exp
$ — $ (784)
—
333
$ (784)
333
1,156
796
(98)
—
1,058
796
was not elected:
Diesel contracts
Fixed on
450K—1.5M
gal per month
Float on
450K—1.5M
gal per month
Merchandise purchase commitments
N/A
Prepaid Exp
1,698
—
1,698
C$ 272,210
US$ 273,356
1.0042
C$
£
8,475
6,300
40,401 U.S.$ 63,000
€
0.7434
1.5594
£
33,793
€ 40,000
1.1837
U.S.$
3,135
€
2,366
0.7547
Total fair value of financial instruments
F-15
Prepaid Exp /
(Accrued Exp)
Prepaid Exp /
(Accrued Exp)
(Accrued Exp)
Prepaid Exp /
(Accrued Exp)
Prepaid Exp /
(Accrued Exp)
4,201
(2,175)
2,026
53
—
135
(178)
(541)
(405)
(125)
(541)
(270)
28
$8,400
(36)
$(4,217)
(8)
$4,183
The impact of derivative financial instruments on the statements of income during fiscal 2013, fiscal 2012 and
fiscal 2011 are as follows:
In thousands
Location of Gain (Loss) Recognized in
Income by Derivative
February 2,
2013
January 28,
2012
January 29,
2011
Amount of Gain (Loss) Recognized in
Income by Derivative
Fair value hedges:
Intercompany balances, primarily
short-term debt and related
interest
Economic hedges for which hedge
accounting was not elected:
Diesel contracts
Merchandise purchase
commitments
Gain (loss) recognized in income
(53 weeks)
Selling, general
and administrative
expenses
$(7,661)
$ 4,313
$ 2,551
Cost of sales, including buying and
occupancy costs
Cost of sales, including buying and
occupancy costs
4,261
1,626
(2,872)
(2,084)
(1,345)
(15,688)
$(5,484)
$ 4,594
$(16,009)
Note F. Disclosures about Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date or ‘exit price’. The inputs used to measure fair
value are generally classified into the following hierarchy:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices
for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted
prices that are observable for the asset or liability
Level 3: Unobservable inputs for the asset or liability
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:
February 2,
2013
January 28,
2012
Executive Savings Plan investments
$101,903
$81,702
Level 2
Assets:
Short-term investments
Foreign currency exchange contracts
Diesel fuel contracts
Liabilities:
Foreign currency exchange contracts
$235,853
5,980
3,372
$94,691
6,702
1,698
$ 11,874
$ 4,217
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.
These inputs are considered to be Level 2. The fair value of long-term debt at February 2, 2013 was $911.0 million
compared to a carrying value of $774.6 million. The fair value of long-term debt at January 28, 2012 was $936.8
million compared to a carrying value of $774.5 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.
F-16
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.
Short-term investments, foreign currency exchange contracts 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 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 instruments are classified within Level 2.
Note G. Segment Information
TJX operates four reportable business segments. In the United States, TJX’s two segments are Marmaxx (T.J. Maxx
and Marshalls stores) and HomeGoods. The TJX Canada segment operates stores in Canada (Winners, HomeSense
and Marshalls), and the TJX Europe segment operates stores in Europe (T.K. Maxx and HomeSense). A.J. Wright
ceased to be a segment following its consolidation. Sierra Trading Post is reported as part of the Marmaxx segment.
All of TJX’s stores, with the exception of HomeGoods and HomeSense, sell family apparel and home fashions.
HomeGoods and HomeSense offer exclusively home fashions. For fiscal 2013, TJX Canada and TJX Europe
accounted for 24% of TJX’s net sales, 18% of segment profit and 24% of consolidated assets. By merchandise
category, approximately 59% of TJX’s sales were derived from clothing (including footwear), 28% from home
fashions and 13% from jewelry and accessories in fiscal 2013.
TJX evaluates the performance of its segments based on “segment profit or loss,” which it defines as pre-tax
income or loss before general corporate expense and interest expense. “Segment profit or loss,” as defined by TJX,
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. These measures of
performance should not be considered alternatives to net income or cash flows from operating activities as an
indicator of TJX’s performance or as a measure of liquidity.
F-17
Presented below is financial information with respect to TJX’s 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
Fiscal Year Ended
January 28,
2012
January 29,
2011
February 2,
2013
(53 weeks)
$17,011,409 $15,367,519 $14,092,159
1,958,007
888,364
2,510,201
2,493,462
$25,878,372 $23,191,455 $21,942,193
2,657,111
—
2,925,991
3,283,861
2,243,986
9,229
2,680,071
2,890,650
$ 2,486,274 $ 2,073,430 $ 1,875,951
186,535
(129,986)
351,989
75,849
234,445
(49,291)
348,028
68,739
324,623
—
414,914
215,713
3,441,524
334,998
—
29,175
2,675,351
228,289
—
35,648
2,360,338
168,659
(11,550)
39,137
$ 3,077,351 $ 2,411,414 $ 2,164,092
$ 4,569,887 $ 4,115,124 $ 3,625,780
427,162
71,194
726,781
1,088,399
2,032,447
$ 9,511,855 $ 8,281,605 $ 7,971,763
569,476
—
978,577
1,261,556
2,132,359
488,405
—
746,593
1,070,655
1,860,828
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)
$
$
$
$
590,307 $
90,291
—
132,874
164,756
978,228 $
458,720 $
77,863
—
92,846
173,901
360,296
46,608
29,135
66,391
204,704
803,330 $
707,134
293,820 $
47,915
—
64,810
99,487
2,897
508,929 $
289,921 $
37,881
—
59,112
96,370
2,417
485,701 $
272,037
35,129
18,981
54,815
74,868
2,222
458,052
F-18
(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.
Note H. 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 share-based
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 24.4 million shares available for future grants as of
February 2, 2013. 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 effected in February 2012 (see
Note A).
As of February 2, 2013, there was $102.6 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:
Risk-free interest rate
Dividend yield
Expected volatility factor
Expected option life in years
Weighted average fair value of options issued
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
0.70%
1.0%
29.0%
4.5
$10.28
0.92%
1.4%
31.1%
5.0
$6.55
1.57%
1.5%
32.3%
5.0
$5.42
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 life 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 were not
applicable 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):
Fiscal Year Ended
February 2, 2013
Options WAEP
January 28, 2012
WAEP
Options
January 29, 2011
WAEP
Options
Outstanding at beginning of year
Granted
Exercised
Forfeitures
Outstanding at end of year
(53 weeks)
40,944 $18.27
7,922
45.09
15.90 (15,433)
(1,640)
23.35
36,620 $22.31
4,951
(8,385)
(890)
50,095 $15.70
26.56
9,893
13.98 (14,735)
(1,013)
20.29
55,950 $13.96
20.56
12.22
17.60
40,944 $18.27
50,095 $15.70
Options exercisable at end of year
24,050 $17.02
24,540 $15.04
31,226 $13.40
F-19
The total intrinsic value of options exercised was $223.8 million in fiscal 2013, $210.9 million in fiscal 2012 and
$143.3 million in fiscal 2011.
The following table summarizes information about stock options outstanding that were expected to vest and
stock options outstanding that were exercisable as of February 2, 2013:
Shares in thousands
Options outstanding expected to vest
Options exercisable
Aggregate
Intrinsic
Value
Weighted
Average
Remaining
Contract Life
Shares
11,783 $155,514
24,050 $841,753
8.7 years
5.3 years
WAEP
$32.10
$17.02
Total outstanding options vested and expected to vest
35,833 $997,267
6.5 years
$21.98
Options outstanding expected to vest represents total unvested options of 12.6 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.
These awards are granted without a purchase price to the recipient and are subject to vesting conditions, including
specified performance criteria for a period generally of one to three 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 in accordance with ASC Topic 718 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.
A summary of the status of our nonvested performance-based restricted stock and performance-based deferred
stock awards and changes during fiscal 2013 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
1,482
731
(508)
(28)
1,677
$21.91
41.74
19.03
20.25
$31.45
There were 730,500 shares of performance-based restricted stock and performance-based deferred stock
awards, with a weighted average grant date fair value of $41.74, granted in fiscal 2013; 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; and 1,242,000 shares, with a weighted average grant date fair value
of $23.08, granted in fiscal 2011. The fair value of performance-based restricted stock and performance-based
deferred stock awards that vested was $9.7 million in fiscal 2013, $10.0 million in fiscal 2012 and $7.0 million in fiscal
2011. In fiscal 2013, TJX also awarded 281,076 shares of performance-based restricted stock which were not
recognized under ASC Topic 718 as having been granted during fiscal 2013 because all of the applicable
performance terms had not been established during the fiscal year.
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 2013, a total of 249,325 of these deferred shares were outstanding under the plan.
F-20
Note I. Pension Plans and Other Retirement Benefits
Pension: TJX has a funded defined benefit retirement plan that covers a majority of its full-time U.S. employees
hired prior to February 1, 2006. No employee contributions are required, and benefits are based principally on
compensation earned in each year of service. TJX’s 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 TJX securities. TJX also has an unfunded supplemental retirement plan that 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
Correction of prior years pension accruals
Actuarial losses (gains)
Benefits paid
Expenses paid
Projected benefit obligation at end of year
Accumulated benefit obligation at end of year
In thousands
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contribution
Benefits paid
Expenses paid
Fair value of plan assets at end of year
Reconciliation of funded status:
Projected benefit obligation at end of year
Fair value of plan assets at end of year
Funded status – excess obligation
Funded Plan
Fiscal Year Ended
Unfunded Plan
Fiscal Year Ended
February 2,
2013
January 28,
2012
February 2,
2013
January 28,
2012
(53 weeks)
(53 weeks)
$ 850,687
41,813
42,029
33,788
70,438
(17,989)
(2,054)
$666,356
33,858
38,567
—
128,154
(14,151)
(2,097)
$53,351
1,448
2,321
—
6,666
(2,753)
—
$1,018,712
$850,687
$61,033
$ 939,905
$785,402
$49,879
$49,526
1,188
2,410
—
3,582
(3,355)
—
$53,351
$46,775
Funded Plan
Fiscal Year Ended
Unfunded Plan
Fiscal Year Ended
February 2,
2013
January 28,
2012
February 2,
2013
January 28,
2012
(53 weeks)
(53 weeks)
$
$ 750,797
70,329
75,000
(17,989)
(2,054)
$663,591
28,454
75,000
(14,151)
(2,097)
$ 876,083
$750,797
$
— $
—
2,753
(2,753)
—
— $
—
—
3,355
(3,355)
—
—
$1,018,712
876,083
$850,687
750,797
$61,033
—
$ 142,629
$ 99,890
$61,033
$53,351
—
$53,351
$53,351
$
8
12,400
Net liability recognized on consolidated balance sheets
$ 142,629
$ 99,890
$61,033
Amounts not yet reflected in net periodic benefit cost and
included in accumulated other comprehensive income
(loss):
Prior service cost
Accumulated actuarial losses
Amounts included in accumulated other comprehensive
$
— $
— $
323,258
286,939
5
17,601
income (loss)
$ 323,258
$286,939
$17,606
$12,408
F-21
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 $203.7 million at February 2, 2013 is reflected on the balance sheet as of that date as a current
liability of $2.4 million and a long-term liability of $201.3 million.
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.
The estimated prior service cost that will be amortized from accumulated other comprehensive income (loss) into
net periodic benefit cost in fiscal 2014 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 2014 is $27.7 million for the funded plan and $2.2 million for the unfunded plan.
TJX determines the assumed discount rate using the RATE:Link model. 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
February 2,
2013
January 28,
2012
February 2,
2013
January 28,
2012
4.40%
4.00%
4.80%
4.00%
4.00%
6.00%
4.40%
6.00%
TJX made aggregate cash contributions of $77.8 million in fiscal 2013, $78.4 million in fiscal 2012 and $103.4
million in fiscal 2011 to the funded plan and to fund current benefit and expense payments under the unfunded plan.
TJX’s policy with respect to the funded 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 pursuant to the Internal Revenue Code section
430) or such other amount as is sufficient to avoid restrictions with respect to the funding of nonqualified plans under
the Internal Revenue Code. We do not anticipate any required funding in fiscal 2014 for the funded plan. We
anticipate making contributions of $3.5 million to provide current benefits coming due under the unfunded plan in
fiscal 2014.
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:
Funded Plan
Fiscal Year Ended
Unfunded Plan
Fiscal Year Ended
Dollars in thousands
February 2,
2013
January 28,
2012
January 29,
2011
February 2,
2013
January 28,
2012
January 29,
2011
Net periodic pension cost:
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of net actuarial loss
Expense related to current period
Correction of prior years pension accruals
(53 weeks)
$ 41,813
42,029
(54,759)
—
25,373
54,456
26,964
$ 33,858
38,567
(49,059)
—
10,854
34,220
—
$ 32,142
34,429
(40,043)
—
11,172
37,700
—
(53 weeks)
$ 1,448
2,321
—
3
1,465
5,237
—
$ 1,188
2,410
—
4
666
4,268
—
$ 1,202
2,682
—
81
941
4,906
—
Total expense
$ 81,420
$ 34,220
$ 37,700
$ 5,237
$ 4,268
$ 4,906
Other changes in plan assets and benefit
obligations recognized in other
comprehensive income:
Net (gain) loss
Amortization of net (loss)
Amortization of prior service cost
Total recognized in other comprehensive
$ 61,692
(25,373)
—
$148,759
(10,854)
—
$ 4,454
(11,172)
—
$ 6,666
(1,465)
(3)
$ 3,582
(666)
(4)
$ (2,727)
(941)
(81)
income
$ 36,319
$137,905
$ (6,718)
$ 5,198
$ 2,912
$ (3,749)
Total recognized in net periodic benefit
cost and other comprehensive income
$117,739
$172,125
$ 30,982
$10,435
$ 7,180
$ 1,157
Weighted average assumptions for
expense purposes:
Discount rate
Expected rate of return on plan assets
Rate of compensation increase
4.80%
7.40%
4.00%
5.75%
7.50%
4.00%
6.00%
8.00%
4.00%
4.40%
N/A
6.00%
5.25%
N/A
6.00%
5.75%
N/A
6.00%
During fiscal 2013, TJX recorded an adjustment to its pension accrual to correct an understatement related to a
computational error that commenced in fiscal 2008. The cumulative impact through fiscal 2012 of correcting for the
error resulted in incremental pension expense of $27.0 million and an increase in the projected benefit obligation of
$33.8 million. Management evaluated the impact of correcting the error in the current period and determined that
there was no material impact on the current year or the prior year financial statements as reported.
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
2014
2015
2016
2017
2018
2019 through 2023
Funded Plan
Expected Benefit Payments
Unfunded Plan
Expected Benefit Payments
$ 23,766
26,424
29,492
32,938
36,714
244,079
$ 3,517
3,433
2,462
4,797
4,859
22,738
F-23
The following table presents the fair value hierarchy (see Note F) for pension assets measured at fair value on a
recurring basis as of February 2, 2013:
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
$144,008 $
— $
— $144,008
65,105
61,944
—
—
—
—
65,105
61,944
— 203,931
— 376,873
—
13,158
— 11,064
— 203,931
390,031
11,064
$271,057 $580,804 $24,222 $876,083
The following table presents the fair value hierarchy for pension 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 a reconciliation of Level 3 plan assets measured at fair value for the years ended
February 2, 2013 and January 28, 2012:
In thousands
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
Earned income, net of management expenses
Unrealized gain on investment
Purchases, sales, issuances and settlements, net
Balance as of February 2, 2013
Common/Collective Trusts
Limited Partnerships
$16,100
517
1,427
(3,269)
$14,775
1,258
39
(2,914)
$13,158
$10,609
230
2,291
(1,088)
$12,042
348
595
(1,921)
$11,064
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 TJX’s target allocation for plan assets along with the actual allocation of plan
assets as of the valuation date for the fiscal years presented:
Equity securities
Fixed income
All other – primarily cash
Actual Allocation for
Fiscal Year Ended
Target Allocation
February 2,
2013
January 28,
2012
50%
50%
—
46%
44%
10%
44%
46%
10%
TJX employs 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 $903.7
million as of December 31, 2012 and $787.1 million as of December 31, 2011 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, including a basic match at rates between 25% and 75% (based upon date of hire and other
eligibility criteria) plus a discretionary match, generally up to 25%, based on TJX’s performance. As of February 2,
2013 eligible employees are automatically enrolled in the U.S. plan at a 2% deferral rate, unless the employee elects
otherwise. TJX contributed $16.1 million in fiscal 2013, $11.8 million in fiscal 2012 and $13.9 million in fiscal 2011 to
these employee savings plans. Employees cannot invest their contributions in the TJX stock fund option in the plans,
and may elect to invest no more than 50% of TJX’s contribution in the TJX stock fund. The TJX stock fund represents
7.2% of plan investments at December 31, 2012, 6.6% at December 31, 2011 and 4.7% at December 31, 2010.
TJX also has a nonqualified savings plan for certain U.S. employees. TJX matches employee deferrals at various
rates which amounted to $4.0 million in fiscal 2013, $2.6 million in fiscal 2012 and $2.4 million in fiscal 2011. 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 $7.1 million for these plans in fiscal 2013, $5.8 million in fiscal
2012 and $5.2 million in fiscal 2011. TJX also maintains a 401(k) plan for eligible associates of Sierra Trading Post,
assets under this plan totaled $1.9 million as of February 2, 2013.
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 $10.9 million in fiscal 2013, $10.8 million in fiscal 2012 and $9.9 million in
fiscal 2011 to the fund. TJX was listed in the plan’s forms 5500 as providing more than 5% of the total contributions
for the plan year ending December 31, 2011. 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
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.
F-25
TJX paid $196,000 of benefits in fiscal 2013 and will pay similar amounts over the next several years. The
postretirement medical liability as of February 2, 2013 is estimated at $1.3 million, all of which is 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 $16.3 million as of February 2, 2013 is included in accumulated other comprehensive income (loss) of which
approximately $3.5 million will be amortized into income in fiscal 2014. During fiscal 2013, there was a pre-tax net
benefit of $3.5 million reflected in the consolidated statements of income as it relates to this postretirement medical
plan.
Note J. Long-Term Debt and Credit Lines
The table below presents long-term debt, exclusive of current installments, as of February 2, 2013 and
January 28, 2012. All amounts are net of unamortized debt discounts.
In thousands
General corporate debt:
February 2,
2013
January 28,
2012
4.20% senior unsecured notes, maturing August 15, 2015 (effective interest rate of
4.20% after reduction of unamortized debt discount of $13 and $19 in fiscal 2013
and 2012, respectively)
6.95% senior unsecured notes, maturing April 15, 2019 (effective interest rate of
6.98% after reduction of unamortized debt discount of $435 and $505 in fiscal
2013 and 2012, respectively)
Long-term debt, exclusive of current installments
$399,987
$399,981
374,565
374,495
$774,552
$774,476
The aggregate maturities of long-term debt, exclusive of current installments at February 2, 2013 are as follows:
In thousands
Fiscal Year
2015
2016
2017
2018
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
(448)
$774,552
At February 2, 2013, TJX had outstanding $375 million aggregate principal amount of 6.95% ten-year notes due
April 2019 and $400 million aggregate principal amount of 4.20% six-year notes due August 2015. TJX entered into
rate-lock agreements to hedge the underlying treasury rate of all of the 6.95% notes and $250 million of the 4.20%
notes prior to the issuance of the notes. The costs of these agreements are being amortized to interest expense over
the term of the respective notes, resulting in an effective fixed interest rate of 7.00% for the 6.95% notes and 4.19%
for the 4.20% notes.
At February 2, 2013, TJX had two $500 million revolving credit facilities, one which matures in June 2017 and one
which matures in May 2016. The agreement maturing in 2017 replaced a revolving credit agreement maturing in May
2013. As of February 2, 2013 and January 28, 2012 and during the years then ended, there were no amounts
outstanding under these facilities. At February 2, 2013 the agreements require quarterly payments on the unused
committed amounts of 8.0 basis points for the agreement maturing in 2017 and 12.5 basis points for the agreement
maturing in 2016. These rates are based on the credit ratings of TJX’s long-term debt and would vary with changes in
the credit ratings. These agreements have no compensating balance requirements and have various covenants
including a requirement of a specified ratio of debt to earnings.
F-26
As of February 2, 2013 and January 28, 2012, 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 February 2, 2013 and January 28, 2012, and during the years then ended there were no amounts outstanding
on the Canadian credit line for operating expenses. As of February 2, 2013 and January 28, 2012, TJX Europe had a
credit line of £20 million. The maximum amount outstanding under this U.K. line was £7.3 million in fiscal 2013 and
there were no borrowings under this credit line in fiscal 2012. There were no amounts outstanding under this U.K.
credit line at the end of fiscal 2013 or fiscal 2012.
Note K.
Income Taxes
The provision for income taxes includes the following:
In thousands
Current:
Federal
State
Foreign
Deferred:
Federal
State
Foreign
Provision for income taxes
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(53 weeks)
$ 842,149
162,200
153,083
$554,847
126,237
99,463
$510,629
113,573
105,489
22,394
1,583
(10,745)
$1,170,664
131,527
6,202
(2,952)
$915,324
91,568
1,731
1,572
$824,562
Income from continuing operations before income taxes includes foreign pre-tax income of $559.7 million in fiscal
2013, $319.4 million in fiscal 2012 and $354.2 million in fiscal 2011.
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
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
February 2,
2013
January 28,
2012
$
19,565
313,597
40,440
5,661
64,393
— $ 24,861
7,363
265,397
39,778
5,699
65,970
$ 443,656 $ 409,068
47,903
43,520
233,002
12,216
$ 360,282 $ 360,629
46,864
42,873
201,012
14,322
$ 696,923 $ 665,700
$(253,267) $(256,632)
The fiscal 2013 net deferred tax liability is presented on the balance sheet as a current asset of $96.2 million and a
non-current liability of $349.5 million. 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. TJX has provided for deferred U.S. taxes
on all undistributed earnings from its Winners Canadian subsidiary, its Puerto Rico subsidiary and its subsidiaries in
Italy, India, Hong Kong, and Australia through February 2, 2013. The net deferred tax liability summarized above
includes deferred taxes relating to temporary differences at our foreign operations and amounted to a $5.2 million net
liability as of February 2, 2013 and $17.0 million net liability as of January 28, 2012.
F-27
No income taxes have been provided on the approximately $385.4 million of undistributed earnings of foreign
subsidiaries as of February 2, 2013, 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 $4.6 million as of February 2, 2013 and $5.9 million as of January 28, 2012.
TJX’s worldwide effective income tax rate was 38.0% for fiscal 2013, 38.0% for fiscal 2012 and 38.1% for fiscal
2011. 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
February 2,
2013
(53 weeks)
35.0%
4.2
(0.9)
(0.3)
38.0%
Fiscal Year Ended
January 28,
2012
January 29,
2011
35.0%
4.1
(0.6)
(0.5)
38.0%
35.0%
4.1
(0.5)
(0.5)
38.1%
TJX’s effective rate remained constant for fiscal 2013 as compared to fiscal 2012. The fiscal 2013 effective tax
rate benefitted from an increase in foreign earnings, which are taxed at lower rates, but this benefit was offset by the
absence of the benefit in fiscal 2012 due to a net reduction in federal and state tax reserves. The decrease in TJX’s
effective rate for fiscal 2012 as compared to fiscal 2011 is primarily attributed to the favorable resolution of U.S.
Federal tax audits partially offset by an increase in the U.S. federal and state tax reserves.
TJX had net unrecognized tax benefits of $125.3 million as of February 2, 2013, $116.6 million as of January 28,
2012 and $122.9 million as of January 29, 2011.
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
February 2,
2013
Fiscal Year Ended
January 28,
2012
January 29,
2011
$144,505
1,949
3,009
—
(129)
(557)
$148,777
$123,094
1,131
63,463
(40,558)
—
(2,625)
$191,741
3,968
23,730
(92,483)
(1,123)
(2,739)
$144,505
$123,094
Included in the gross amount of unrecognized tax benefits are items that will not impact future effective tax rates
upon recognition. These items amounted to $19.8 million as of February 2, 2013, $20.0 million as of January 28, 2012
and $11.0 million as of January 29, 2011.
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 $4.7 million for the year ended February 2, 2013; $5.8
million for the year ended January 28, 2012 and $1.9 million for the year ended January 29, 2011. The accrued
amounts for interest and penalties are $38.6 million as of February 2, 2013, $33.0 million as of January 28, 2012 and
$34.6 million as of January 29, 2011.
F-28
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 February 2, 2013. 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 L. 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 TJX’s leases are store operating leases with ten-year terms and options to extend for
one or more five-year periods in the U.S. and Canada and ten to fifteen year terms with five or ten-year kick-out
options in Europe. Many of the Company’s leases contain escalation clauses and some contain early termination
penalties. In addition, TJX is generally required to pay insurance, real estate taxes and other operating expenses
in some cases, rentals based on a percentage of sales. These expenses in the aggregate were
including,
approximately one-third of the total minimum rent in fiscal 2013, fiscal 2012 and fiscal 2011 and are not included in
the table below.
The following is a schedule of future minimum lease payments for continuing operations as of February 2, 2013:
In thousands
Fiscal Year
2014
2015
2016
2017
2018
Later years
Total future minimum lease payments
Operating
Leases
$1,185,379
1,104,693
975,405
819,532
667,721
1,966,484
$6,719,214
Rental expense under operating leases for continuing operations amounted to $1,171.6 million for fiscal 2013,
$1,086.0 million for fiscal 2012 and $1,031.4 million for fiscal 2011. Rental expense includes contingent rent and is
reported net of sublease income. Contingent rent paid was $15.0 million in fiscal 2013, $12.9 million in fiscal 2012 and
$12.0 million in fiscal 2011. Sublease income was $0.9 million in fiscal 2013, $1.3 million in fiscal 2012 and $1.2 million
in fiscal 2011. The total net present value of TJX’s minimum operating lease obligations approximated $5,992.8 million
as of February 2, 2013.
TJX had outstanding letters of credit totaling $48.5 million as of February 2, 2013 and $36.5 million as of
January 28, 2012. Letters of credit are issued by TJX primarily for the purchase of inventory.
Note M. 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
F-29
Fiscal Year Ended
February 2,
2013
January 28,
2012
$ 513,999 $ 403,200
15,863
13,338
157,303
189,554
29,558
119,293
436,596
$1,666,216 $1,364,705
15,767
17,648
177,693
218,488
31,423
109,874
581,324
All other current liabilities include accruals for advertising, property additions, dividends, freight, interest, reserve
for sales returns, expense payables, purchased services and other items, each of which is individually less than 5% of
current liabilities.
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
February 2,
2013
January 28,
2012
$395,282
27,581
164,593
94,570
257,190
22,068
$302,217
32,043
163,630
82,465
249,566
31,847
$961,284
$861,768
Note N. 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, TJX has 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 TJX has 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. TJX does 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 if the subtenants do not fulfill their obligations, are
approximately $60 million as of February 2, 2013. 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 including our
expectation to further sublet.
TJX is a party to various agreements under which it 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 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 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 and other labor
statutes, including alleged misclassification of positions as exempt from overtime, alleged entitlement to additional
wages for alleged off-the-clock work by hourly employees and alleged failure to pay all wages due upon termination.
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.
F-30
Note O. Supplemental Cash Flows Information
The cash flows required to satisfy obligations of former operations 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.
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
Fiscal Year Ended
February 2,
2013
January 28,
2012
January 29,
2011
(53 weeks)
$ 45,653
971,732
$ 46,691
781,170
$ 48,501
787,273
$ 12,291
33,615
$ 13,018
(23,746)
$ 9,675
14,568
There were no non-cash financing or investing activities during fiscal 2013, 2012 or 2011.
Note P. Selected Quarterly Financial Data (Unaudited)
Presented below is selected quarterly consolidated financial data for fiscal 2013 and fiscal 2012 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 February 2, 2013 (53 weeks)
Net sales
Gross earnings(2)
Net income
Basic earnings per share
Diluted earnings per share
Fiscal Year Ended January 28, 2012 (52 weeks)
Net sales
Gross earnings(2)
Net income
Basic earnings per share(3)
Diluted earnings per share(3)
First
Quarter(1)
Second
Quarter
Third
Quarter
Fourth
Quarter(4)
$5,798,086 $5,945,559 $6,410,913 $7,723,814
2,209,288
604,844
0.83
0.82
1,632,358
419,200
0.56
0.55
1,670,486
421,092
0.57
0.56
1,844,840
461,551
0.63
0.62
$5,220,295 $5,468,274 $5,793,128 $6,709,758
1,825,389
475,314
0.63
0.62
1,393,037
265,951
0.34
0.34
1,492,239
348,338
0.46
0.45
1,626,541
406,487
0.54
0.53
(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.
(3) Adjusted for two-for-one stock split in February 2012. See Note A.
(4) The fourth quarter of fiscal 2013 included 14 weeks.
F-31
Board of Directors
Committees of the
Board of Directors
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
Bernard Cammarata
Chairman of the Board,
The TJX Companies, Inc.
Zein M. Abdalla
President,
PepsiCo, Inc.
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
Former 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.
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 M. Abdalla
David T. Ching
Senior Corporate Officers
Bernard Cammarata
Chairman of the Board
Carol Meyrowitz
Chief Executive Officer
Ernie Herrman
President
SENIOR EXECUTIVE
VICE PRESIDENTS
Michael MacMillan
Group President
Jerome R. Rossi
Group President
Richard Sherr
Group President
Nan Stutz
Group President
EXECUTIVE VICE PRESIDENTS
Karen Coppola
Chief Marketing Officer
Amy Fardella
Chief HR Officer
Gregorio R. Flores
Chief HR Administration Officer
Scott Goldenberg
Chief Financial Officer
Peter Lindenmeyer
Chief Information Officer
Louis Luciano
Merchandise Coaching and
Development
Ann McCauley
General Counsel and Secretary
Barry Zelman
Brand and Product Development
SENIOR VICE PRESIDENTS
Alfred Appel
Corporate Tax and Insurance
John Bauer
Chief Logistics Officer
Marc Boesch
Global Procurement
Elaine Boltz
E-Commerce
Norman Cantin
New York Buying Office
George Drummey
Property Development
Gary Imig
President, Sierra Trading Post
Paul Kangas
Enterprise Risk Management and
Chief Compliance Officer
Stephen Krasker
Information Technology Director
Sherry Lang
Global Communications
Christina Lofgren
Real Estate and Property
Development
Nancy Maher
Corporate HR Business Partner
Julio Mantilla
Global Total Rewards
Manuela Millington
California Buying Office
Laura Mulcahy
Business Solutions Director
John Reichelt
Chief Technology Officer
Mary B. Reynolds
Treasurer
David Spooner
Information Technology Director
George Wilson
Corporate Controller
Karen Winney
Information Technology International
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
Shareholder Information
Transfer Agent and Registrar
Investor Relations
COMMON STOCK
Computershare
Analysts and investors seeking financial data about
the Company are asked to visit our corporate
website at www.tjx.com or to contact:
1-866-606-8365
1-800-231-5469 (TDD services for the hearing impaired)
1-201-680-6578 (Outside the U.S.)
Sherry Lang
Senior Vice President,
Global Communications
508-390-2323
ADDRESS SHAREHOLDER INQUIRIES AND
SEND CERTIFICATES FOR TRANSFER AND
ADDRESS CHANGES TO:
Computershare
P.O. Box 43006
Providence, RI 02940-3006
Overnight Delivery
250 Royall St.
Canton, MA 02021
E-MAIL ADDRESS:
shrrelations@cpushareownerservices.com
Computershare website:
www.computershare.com/investor
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 Com-
mission. 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
Executive Offices
Framingham, Massachusetts 01701
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 leading 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.
In late 2012, we acquired Sierra Trading Post, an off-price, Internet retailer of apparel and home fashions, bringing it into
our family of businesses. With over 3,000 stores and approximately 179,000 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 and designer merchandise at
prices generally 20% to 60% below department and specialty store regular prices, every day. With our value proposition,
we reach a broad range of fashion and value conscious customers across many income levels and demographic groups.
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
1,036 stores in 49 states and Puerto Rico at year-end 2012.
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
904 stores in 44 states and Puerto Rico at 2012’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
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 2012’s
year end, HomeGoods operated 415 stores in 41 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 222 stores
at 2012’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 2012’s year end, HomeSense operated
88 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 14 stores in Canada
at 2012’s year end, averaging approximately 32,000 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 2012 with
343 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 2012’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