[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| ☒ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
February 2, 2019
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| ☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 04-2207613 | |
(State or other jurisdiction of incorporation or organization) | ( | |
770 Cochituate Road | ||
Framingham, Massachusetts | 01701 | |
(Address of principal executive offices) | (Zip Code) | |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $1.00 per share | New York Stock Exchange | |
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March 2, 2019.
vendor relationships. International. Our T.J. Maxx and Marshalls chains in the United States expanded departments, such as large furniture, ceiling lighting and rugs, as well as different departments, such as a general store and an entertaining marketplace. CANADA INTERNATIONAL time. Approximate Estimated Store Marmaxx T.J. Maxx Marshalls HomeGoods TJX Canada Winners HomeSense Marshalls TJX International T.K. Maxx HomeSense Trade Secret TJX Total United States Northeast Midwest South (including Puerto Rico) West Subtotal Canada Europe Total Apparel Clothing including footwear Jewelry and accessories Home fashions Total 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 Alberta British Columbia Manitoba New Brunswick Newfoundland Nova Scotia Ontario Prince Edward Island Quebec Saskatchewan Total Stores United Kingdom Republic of Ireland Germany Poland Austria The Netherlands Total Stores media channels. margins, could be adversely affected. increase profitability in those markets. may not be or remain effective or could require increased expenditures, which could have a significant adverse effect on our revenue and results of operations. affected. results. countries and moving merchandise internationally. potential disruptions in manufacturing changes in duties, tariffs, trade restrictions, sanctions, quotas and voluntary export restrictions on imported transport capacity and costs; information technology challenges; problems in third-party distribution and warehousing, logistics, transportation and other strikes, threats of strikes and other events affecting delivery; consumer perceptions of the safety or quality of imported merchandise; product and international trade compliance with laws and regulations of the destination country; compliance with laws and regulations including changing labor, environmental, international trade and other laws in those countries and those concerning ethical business practices, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act; 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; concerns about transparent sourcing and supply chains; currency exchange rates, financial or economic instability; and political or other disruptions in countries from, to or through which merchandise is imported. commodities, or other increases in utility, transportation or logistics costs. 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 terms or in a less favorable location. Corporate, Marmaxx, HomeGoods, TJX Canada TJX International a stock dividend, paid on November 6, 2018 to the shareholders of record at the close of business on October 30, 2018. All historical share and per share information, as well as basic and diluted earnings per share amounts, have been retroactively adjusted to reflect the two-for-one stock split. Our common stock is listed on the New York Stock Exchange (Symbol: TJX). First Second Third Fourth 2,196. Total Number of Shares Repurchased(1) Average Price Paid Share(2) Total Number of Shares Plans or Programs(3) November 1, 2015 through November 28, 2015 November 29, 2015 through January 2, 2016 January 3, 2016 through January 30, 2016 Total: Dollars in millions except per share amounts January 30, 2016 January 31, 2015 February 1, 2014 February 2, 2013 January 28, 2012 Income statement and per share data: Net sales Income from continuing operations Weighted average common shares for diluted earnings per share calculation (in thousands) Diluted earnings per share from continuing operations Cash dividends declared per share Balance sheet data: Cash and cash equivalents Working capital(1) Total assets(1) Capital expenditures Long-term obligations(2) Shareholders’ equity Other financial data: After-tax return (continuing operations) on average shareholders’ equity Total debt as a percentage of total capitalization(3) Stores in operation: In the United States: T.J. Maxx Marshalls Sierra Trading Post HomeGoods In Canada: Winners HomeSense Marshalls In Europe: T.K. Maxx HomeSense In Australia: Trade Secret Total Selling square footage (in thousands): In the United States: T.J. Maxx Marshalls Sierra Trading Post HomeGoods In Canada: Winners HomeSense Marshalls In Europe: T.K. Maxx HomeSense In Australia: Trade Secret Total We are the leading off-price apparel and home fashions retailer in the U.S. and worldwide. We sell a rapidly changing assortment of apparel, home fashions and other merchandise at prices generally 20% to 60% below full-price retailers’ (including department, specialty, and split. Net sales increased to Our fiscal Our cost of sales, including buying and occupancy costs, ratio for fiscal Our selling, general and administrative (“SG&A”) expense ratio for fiscal Our consolidated average per store inventories, including inventory on hand at our distribution centers (which excludes inventory in transit) and excluding our e-commerce businesses, increases, and the Northeast was below the consolidated average. In Canada, comp sales increases were well above the consolidated average and TJX International was at the consolidated average. Net sales Cost of sales, including buying and occupancy costs Selling, general and administrative expenses Loss on early extinguishment of debt Interest expense, net Income before provision for income taxes* Diluted earnings per share Translation of foreign operating results into U.S. dollars:In our financial statements, we translate the operations of TJX Canada and TJX International 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, Inventory-related derivatives: We routinely enter into inventory-related hedging instruments to mitigate the impact on earnings of changes in foreign currency exchange rates on merchandise purchases denominated in currencies other than the local currencies of our divisions, principally TJX Canada and TJX International. As we have not elected “hedge accounting” for these instruments as defined by U.S. generally accepted accounting principles margin was essentially flat to fiscal 2017. the Marmaxx segment. Interest expense Capitalized interest Interest (income) Interest expense, net return rates. 2017. year presented. segments. SEGMENTS January 30, 2016 Net sales Segment profit Segment profit as a percentage of net sales 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 Segment margin in fiscal year-over-year segment margin comparisons. Net sales Segment profit Segment profit as a percentage of net sales Increase in same store sales Stores in operation at end of period Selling square footage at end of period (in thousands) HomeGoods’ net sales increased approximately 1.1 percentage points. the benefit of the 53 Net sales Segment profit Segment profit as a percentage of net sales Increase in same store sales Stores in operation at end of period Winners HomeSense Marshalls Total Selling square footage at end of period (in thousands) Winners HomeSense Marshalls Total currency translation and a 2% impact of the 53 the strong comp sales. point. Net sales Segment profit Segment profit as a percentage of net sales Increase in same store sales Stores in operation at end of period T.K. Maxx HomeSense Trade Secret Total Selling square footage at end of period (in thousands) T.K. Maxx HomeSense Trade Secret Total the benefit of the 53 General corporate expense 2018. New stores Store renovations and improvements Office and distribution centers Capital expenditures below. 2017. These cash outflows were primarily driven by equity repurchases partially offset by issuances, dividend payments and debt transactions. Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Long-term debt obligations(1) Operating lease commitments(2) Purchase obligations(3) Total obligations fiscal year end to determine shrinkage at year end. Historically, the variance between estimated shrinkage and actual shrinkage has not been material to our annual financial results. We do not generally enter into arrangements with vendors that provide for rebates and allowances that could ultimately affect the value of inventory. amount. 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. Our foreign exchange risk management policy prohibits us from using derivative financial instruments for trading or other speculative purposes and we do not use any leveraged derivative financial instruments. 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 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. FINANCIAL STATEMENT SCHEDULES Balance End of Sales Return Reserve: Fiscal Year Ended January 30, 2016 Fiscal Year Ended January 31, 2015 Fiscal Year Ended February 1, 2014 Casualty Insurance Reserve: Fiscal Year Ended January 30, 2016 Fiscal Year Ended January 31, 2015 Fiscal Year Ended February 1, 2014 /s/ ERNIE HERRMAN ZEIN ABDALLA* Amy B. Lane, Director PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Internal Control over Financial Reporting Amounts in thousands except per share amounts January 30, 2016 January 31, 2015 February 1, 2014 Net sales Cost of sales, including buying and occupancy costs Selling, general and administrative expenses Loss on early extinguishment of debt Interest expense, net Income before provision for income taxes Provision for income taxes Net income Basic earnings per share: Net income Weighted average common shares – basic Diluted earnings per share: Net income Weighted average common shares – diluted Cash dividends declared per share January 30, 2016 January 31, 2015 February 1, 2014 Net income Additions to other comprehensive income: Foreign currency translation adjustments, net of related tax benefits of $41,048, $56,567 and $41,713 in fiscal 2016, 2015 and 2014, respectively Loss on cash flow hedge, net of related tax benefit of $3,149 in fiscal 2015 Recognition of net gains/losses on benefit obligations, net of related tax provision of $6,335, benefit of $91,941, and provision of $36,856 in fiscal 2016, 2015 and 2014, respectively Reclassifications from other comprehensive income to net income: Amortization of loss on cash flow hedge, net of related tax provision of $450 and $300 in fiscal 2016 and 2015, respectively Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $13,501, $4,591, and $11,001 in fiscal 2016, 2015 and 2014, respectively Other comprehensive income (loss), net of tax Total comprehensive income 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 Federal, state, and foreign income taxes recoverable 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 Non-current deferred income taxes, net Other assets Goodwill and tradenames, net of amortization TOTAL ASSETS LIABILITIES Current liabilities: Accounts payable Accrued expenses and other current liabilities Federal, state and foreign income taxes payable Total current liabilities Other long-term liabilities Non-current deferred income taxes, net Long-term debt Commitments and contingencies (See Note L and Note N) SHAREHOLDERS’ EQUITY Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued Common stock, authorized 1,200,000,000 shares, par value $1, issued and outstanding 663,495,715 and 684,733,200, respectively Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total shareholders’ equity TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 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 Early extinguishment of debt Excess tax benefits from share-based compensation Changes in assets and liabilities: (Increase) decrease in accounts receivable (Increase) decrease in merchandise inventories Decrease (increase) in taxes recoverable (Increase) decrease in prepaid expenses and other current assets Increase (decrease) in accounts payable Increase (decrease) in accrued expenses and other liabilities Increase in income taxes payable Other Net cash provided by operating activities Cash flows from investing activities: Property additions Purchases of investments Sales and maturities of investments Cash paid for acquisition of Trade Secret, net of cash received Cash received at completion of acquisition of Sierra Trading Post Net cash (used in) investing activities Cash flows from financing activities: Proceeds from issuance of long-term debt Cash payments for extinguishment of debt Cash payments for debt issuance expenses Cash payments for rate lock agreement Cash payments for repurchase of common stock Proceeds from issuance of common stock Excess tax benefits from share-based compensation Cash dividends paid Net cash (used in) financing activities Effect of exchange rate changes on cash Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Additional Paid-In Accumulated Retained Total Balance, February 2, 2013 Net income Other comprehensive income (loss), net of tax Cash dividends declared on common stock Recognition of share-based compensation Issuance of common stock under stock incentive plan and related tax effect Common stock repurchased Balance, February 1, 2014 Net income Other comprehensive income (loss), net of tax Cash dividends declared on common stock Recognition of share-based compensation Issuance of common stock under stock incentive plan and related tax effect Common stock repurchased Balance, January 31, 2015 Net income Other comprehensive income (loss), net of tax Cash dividends declared on common stock Recognition of share-based compensation Issuance of common stock under stock incentive plan and related tax effect Common stock repurchased Balance, January 30, 2016 fiscal 2017 was a 52-week fiscal year. other current assets” on our Consolidated Balance Sheets. Interest expense Capitalized interest Interest (income) Interest expense, net expense, net: January 30, 2016 January 31, 2015 February 1, 2014 United States Canada Europe Australia Total long-lived assets New Accounting Standards,” our accounting for build-to-suit leases will change upon adoption of the new lease accounting standard. Balance, February 2, 2013 Adjustment to purchase price Effect of exchange rate changes on goodwill Balance, February 1, 2014 Effect of exchange rate changes on goodwill Balance, January 31, 2015 Additions Effect of exchange rate changes on goodwill Balance, January 30, 2016 In fiscal 2018, the Company recorded an impairment charge of $99.3 million which included $97.3 million of Sierra goodwill and $2.0 million for certain long-lived assets of Sierra as the estimated fair value of this business fell below the carrying value due to a decrease in projected revenue growth rates. The impairment charge is included within the Marmaxx segment results. tradenames. recoverable. 2017. due to a decrease in projected revenue growth rates. There 2017. 2017. disclosed. comparability among organizations by requiring lessees to recognize condition as of February 3, 2019 with corresponding right of use assets based on the present value of the remaining minimum rental payments associated with our more than 4,300 leased locations. This impact includes the derecognition of build-to-suit lease assets and liabilities when we do not control the building during the construction period. We do not believe the new standard will have a notable impact on our liquidity and we do not believe it will have an impact on our debt-covenant compliance under our current agreements. We will implement the transition package of three practical expedients permitted within the standard, which among other things, allows for the carryforward of historical lease classifications. As our leases do not provide an implicit rate, nor is one readily available, we will use our incremental borrowing rate based on information available at commencement date to determine the present value of future payments. practice. The Allocation of purchase price Current assets Property and equipment Goodwill and intangible assets Total assets acquired Total liabilities assumed Net assets acquired long-lived assets by geographic location: Deferred Benefit Costs Balance, February 2, 2013 Foreign currency translation adjustments (net of taxes of $41,713) Recognition of net gains/losses on benefit obligations (net of taxes of $36,856) Amortization of deferred benefit costs (net of taxes of $11,001) Balance, February 1, 2014 Foreign currency translation adjustments (net of taxes of $56,567) Recognition of net gains/losses on benefit obligations (net of taxes of $91,941) Loss on cash flow hedge (net of taxes of $3,149) Amortization of loss on cash flow hedge (net of taxes of $300) Amortization of prior service cost and deferred gains/losses (net of taxes of $4,591) Balance, January 31, 2015 Foreign currency translation adjustments (net of taxes of $41,048) Recognition of net gains/losses on benefit obligations (net of taxes of $6,335) Amortization of loss on cash flow hedge (net of taxes of $450) Amortization of prior service cost and deferred gains/losses (net of taxes of $13,501) Balance, January 30, 2016 2017: January 30, 2016 January 31, 2015 February 1, 2014 Basic earnings per share: Net income Weighted average common stock outstanding for basic earnings per share calculation Basic earnings per share Diluted earnings per share: Net income 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 Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts Intercompany billings in Europe, primarily merchandise related Merchandise purchase commitments Total fair value of financial instruments February 2, 2019: Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts Merchandise purchase commitments Total fair value of financial instruments February 3, 2018: Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts Intercompany billings in Europe, primarily merchandise related Merchandise purchase commitments Gain recognized in income Measurements Level 1 Assets: Executive Savings Plan investments Level 2 Assets: Short-term investments Foreign currency exchange contracts Diesel fuel contracts Liabilities: Foreign currency exchange contracts Diesel fuel contracts The percentages of our consolidated revenues by major product category for the last three fiscal years are as follows: Apparel Clothing including footwear Jewelry and accessories Home fashions Total January 30, 2016 January 31, 2015 February 1, 2014 Net sales: In the United States Marmaxx HomeGoods TJX Canada TJX International Segment profit: In the United States Marmaxx HomeGoods TJX Canada TJX International General corporate expense Loss on early extinguishment of debt Interest expense, net Income before provision for income taxes January 30, 2016 January 31, 2015 February 1, 2014 Identifiable assets: In the United States Marmaxx HomeGoods TJX Canada TJX International Corporate(1) Capital expenditures: In the United States Marmaxx HomeGoods TJX Canada TJX International Depreciation and amortization: In the United States Marmaxx HomeGoods TJX Canada TJX International Corporate(2) All share amounts and per share data presented have been adjusted to reflect the two-for-one stock split completed on November 6, 2018. Risk-free interest rate Dividend yield Expected volatility factor Expected option life in years Weighted average fair value of options issued Outstanding at beginning of year Granted Exercised Forfeitures Outstanding at end of year Options exercisable at end of year below: 2017. Options outstanding expected to vest Options exercisable Total outstanding options vested and expected to vest adjusted, as applicable, for performance above or below the target specified in the award. Nonvested at beginning of year Granted Vested Forfeited Nonvested at end of year 2017. Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended Change in projected benefit obligation: Projected benefit obligation at beginning of year Service cost Interest cost Actuarial (gains) losses Benefits paid Expenses paid Plan amendment Projected benefit obligation at end of year Accumulated benefit obligation at end of year Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended 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 Net liability recognized on consolidated balance sheets 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 income (loss) indicated. The The combined net accrued liability of Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended Discount rate Rate of compensation increase 2020. Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended Net periodic pension cost: Service cost Interest cost Expected return on plan assets Amortization of prior service cost Amortization of net actuarial loss Total expense 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 Plan amendment Total recognized in other comprehensive income (loss) Total recognized in net periodic benefit cost and other comprehensive income (loss) Weighted average assumptions for expense purposes: Discount rate Expected rate of return on plan assets Rate of compensation increase Funded Plan Expected Benefit Payments Unfunded Plan Expected Benefit Payments Fiscal Year 2017 2018 2019 2020 2021 2022 through 2026 Asset category: Short-term investments Equity Securities Fixed Income Securities: Corporate and government bond funds Futures Contracts Total assets in the fair value hierarchy Assets measured at net asset value* Fair value of assets Asset category: Short-term investments Equity Securities Fixed Income Securities: Corporate and government bond funds Total assets in the fair value hierarchy Assets measured at net asset value* Fair value of assets Actual Allocation for Fiscal Year Ended Equity securities Fixed income All other – primarily cash 2017. 2017. General corporate debt: 6.95% senior unsecured notes, maturing April 15, 2019 (effective interest rate of 6.98% after reduction of unamortized debt discount of $223 and $294 in fiscal 2016 and 2015, respectively) 2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $323 and $367 in fiscal 2016 and 2015, respectively) 2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $400 and $475 in fiscal 2016 and 2015, respectively) Long-term debt Fiscal Year 2018 2019 2020 2021 Later years Less amount representing unamortized debt discount Aggregate maturities of long-term debt As of United States Foreign Income before provision for income taxes Current: Federal State Foreign Deferred: Federal State Foreign Provision for income taxes Deferred tax assets: Net operating loss carryforward Reserves for lease obligations and computer intrusion Pension, stock compensation, postretirement and employee benefits Leases Other Total gross deferred tax assets Valuation allowance Net deferred tax asset Deferred tax liabilities: Property, plant and equipment Capitalized inventory Tradename/intangibles Undistributed foreign earnings Other Total deferred tax liabilities Net deferred tax (liability) Non-current asset Non-current liability Total approximately $1 million. February 3, 2018. February 3, 2018. U.S. federal statutory income tax rate Effective state income tax rate Impact of foreign operations All other Worldwide effective income tax rate fiscal 2019 versus only a portion of fiscal 2018. 28, 2017. January 30, 2016 January 31, 2015 February 1, 2014 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 28, 2017. 28, 2017. The US Treasury issued several proposed regulations supplementing the 2017 Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, expansion of existing foreign tax credit rules to newly created categories, and various other guidance. These proposed regulations are intended to be applied retroactively. As a result, the Company will monitor their impact to the Company's filing positions and will record any impacts as a discrete event in the period that the guidance is finalized. Fiscal Year 2017 2018 2019 2020 2021 Later years Total future minimum lease payments February 2, 2019: 2017. Long-Term Employee compensation and benefits, current Dividends payable Accrued capital additions 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 Employee compensation and benefits, long term Accrued rent Landlord allowances Tax reserve, long term Financing lease obligations All other long-term liabilities Other long-term liabilities and accordingly, Cash paid for: Interest on debt Income taxes Changes in accrued expenses due to: Dividends payable Property additions Non-cash investing and financing activity: Construction in progress Financing lease obligation First Quarter Fiscal Year Ended January 30, 2016 Net sales Gross earnings(1) Net income Basic earnings per share Diluted earnings per share Fiscal Year Ended January 31, 2015 Net sales Gross earnings(1) Net income Basic earnings per share Diluted earnings per share20152018 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 20152018 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 the 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.2(TJX)(together with its subsidiaries, "TJX", the "Company", "we", or "our") is the leading off-price apparel and home fashions retailer in the United States and worldwide. OurWe have over 3,6004,300 stores that offer a rapidly changing assortment of quality, fashionable, brand name and designer merchandise at prices generally 20% to 60% below full-price retailers’ (including department, specialty, and specialty storemajor online retailers) regular prices on comparable merchandise, every day.many income levels and other demographic groups with our value proposition. Our strategies and operations are synergistic across 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 to develop talent across our Company. We alsoFurther, we can leverage the substantial buying power of our businesses inwith our global relationships with vendors.Businesses.Businessesmajormain segments: Marmaxx and HomeGoods, both in the U.S., TJX Canada and TJX International (formerly referred to as TJX Europe).MARMAXX:(referred to together as The Marmaxx Group or Marmaxx)(“Marmaxx”) are collectively the largest off-price retailer in the United States with a total of 2,1632,343 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 high-end 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, as well as varying in-store initiatives. This differentiated shopping experience at T.J. Maxx and Marshalls encourages our customers to shop both chains. Our e-commerce website, tjmaxx.com, was launched in 2013.:chain,segment, introduced in 1992, is the leading off-price retailer of home fashions in the U.S. Through its 526749 stores, HomeGoods offers a broad arrayan eclectic assortment of home fashions, including home basics, giftware, accent furniture, lamps, rugs, wall décor, seasonal items,lighting, soft home, decorative accessories, from aroundtabletop and cookware as well as expanded pet, kids and gourmet food departments. In 2017, we launched Homesense in the worldU.S. Our 16 Homesense stores complement HomeGoods, offering a differentiated mix and other merchandise.CANADA:245271 stores across Canada is comparable to T.J. Maxx, with select stores offering fine jewelry, and The Runway, a designer section. We opened our HomeSense chain in 2001, bringing the home fashions off-price concept to Canada. HomeSense has 101125 stores with a merchandise mix of home fashions similar to HomeGoods.HomeGoods in the U.S. We brought Marshalls to Canada in 2011 and operate 4188 Marshalls stores in Canada. As with Marshalls in the U.S., our Canadian Marshalls stores offer an expanded footwear department and The Cube juniors’ department, differentiating them from Winners stores.3INTERNATIONAL:HomeSenseHomesense chains in Europe and starting in late 2015, the Trade SecretT.K. Maxx chain in Australia. Launched in 1994, T.K. Maxx introduced off-price retail to Europe and remains Europe’s only major brick-and-mortar off-price retailer of apparel and home fashions. With 456567 stores, T.K. Maxx operates in the U.K., Ireland, Germany, Poland, Austria and the Netherlands. Through its stores and its e-commerce website for the U.K., tkmaxx.com, T.K. Maxx offers a merchandise mix similar to T.J. Maxx. We brought the off-price home fashions concept to Europe, opening HomeSenseHomesense in the U.K. in 2008.2008 and in Ireland in 2017. Its 3968 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. We acquired Trade Secret in Australia in 2015 and re-branded it under the fall of 2015.T.K. Maxx name during 2017. The merchandise offering at its 35T.K. Maxx in Australia's 44 stores in Australia is comparable to T.J. Maxx.majormain segments, we operate Sierra, Trading Post, acquired in 2012 a leadingand rebranded from Sierra Trading Post in 2018. Sierra is an off-price Internet retailer of brand name and quality outdoor gear, family apparel and footwear, sporting goods and home fashions. Sierra Trading Post launched its e-commerce site, sierratradingpost.com, in 1998operates sierra.com and operates eight35 retail stores in the U.S.Model.Modelmerchantsbuyers 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 global 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.Buying.Buyingspecialty stores.major online retailers. We seek out and select merchandise from the broad range of opportunities in the marketplacemarket to achieve this end. Our global buying organization, which numbers more than 1,000approximately 1,100 Associates and has offices across 4 continents in 15 buying offices in 1112 countries, executes this opportunistic buying strategy, buying merchandise from more than 100 countries in a variety of ways, depending on market conditions and other factors.arise.arise, close to the time it is needed in our stores and online and when we have more visibility into fashion trends and price. In contrast to traditional retailers, which tend to order most of their goods far in advance of the time the product appears on the selling floor, our merchants generally remain in the marketplace for goods throughout the year, 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 that is available in the market with the intention of storing it for sale, typically in future selling seasons. We generally make these purchases, referred to as packaway, in response to opportunities in the marketplace to buy merchandise that we believe has the right combination of brand, fashion, price and quality to supplement the product we expect to be available to purchase later for those future seasons. We also acquire some merchandise that we offer under in-house brands or brands that are licensed to us. We develop some of this merchandise ourselves in order to supplement the depth of, or fill gaps in, our expected merchandise assortment.4Our expansive vendor universe, which is in excess of 18,000, consists primarily of manufacturers along withandmake up our expansive universe of more than 21,000 vendors, which 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 provide us excellent access on an ongoing basis to leading branded merchandise and make us an attractive channel for many vendors in the market. 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 geographically diverse network of stores and to target specific markets; we pay promptly; 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; and we have financial strength and an excellent credit rating.Management.ManagementOver the past several years, we have been investingWe continue to invest 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.offerdeliver great value to our customers every day. We do this by offering quality, fashionable, brand name and designer merchandise in our stores with retail prices that are generally 20% to 60% below full-price retailers’ (including department, specialty, and specialty storemajor online retailers) regular retail prices on comparable merchandise, 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.Operations.OperationsExperience.ExperienceDistribution.1419 million square feet in six countries. These centers are generally large, highly automated and built to suit our specific, off-price business model.model, with a combination of automated systems and manual processes to manage the variety of merchandise we acquire. We ship substantially all of our merchandise to our stores through thesea network of distribution centers, as well as warehouses and shipping centers operated by third parties.5Growth.Growthinformation on the store growth ofinformation for our four major segments infor the last two most recently completed fiscal years, as well as our growth estimates for fiscal 20172020 and our estimates of the long-term store growth potential of these segments in their current geographies:
Average Store
Size (square feet) Number of Stores at Year End
Growth
Potential Fiscal 2015 Fiscal 2016 Fiscal 2017
(estimated) 29,000 1,119 1,156 30,000 975 1,007 2,094 2,163 2,223 3,000 25,000 487 526 576 1,000 28,000 234 245 24,000 96 101 30,000 38 41 368 387 417 500 30,000 407 456 21,000 33 39 22,000 — 35 440 530 580 1,100 (2) 3,395 (1) 3,614 (1) 3,809 (1) 5,600 Number of Stores at Year End Fiscal 2018 Fiscal 2019 Marmaxx T.J. Maxx 28,000 1,223 1,252 Marshalls 29,000 1,062 1,091 2,285 2,343 2,403 3,000 HomeGoods HomeGoods 23,000 667 749 Homesense 27,000 4 16 671 765 845 1,400 TJX Canada Winners 28,000 264 271 HomeSense 23,000 117 125 Marshalls 27,000 73 88 454 484 514 600 TJX International T.K. Maxx (Europe) 29,000 540 567 Homesense (Europe) 20,000 55 68 T.K. Maxx (Australia) 22,000 38 44 633 679 729 1,100 4,070 4,306 4,536 6,100 (1) IncludedHomeGoods and TJX total includes 31 Homesense stores in the TJX Total are six Sierra Trading Post stores for fiscal 2015, eight Sierra Trading Post stores for fiscal 2016, and 13 Sierra Trading Post storesU.S. estimated for fiscal 2017.2020 and store growth potential includes 400 Homesense stores.(2) Reflects store growth potential for T.K. Maxx in current geographies and for HomeSenseHomesense in the United Kingdom and for Trade Secret in Australia only.Ireland.(3) Includes 27 Sierra stores in fiscal 2018, 35 Sierra stores for fiscal 2019, and 45 Sierra stores estimated for fiscal 2020. Sierra stores are not included in estimated store growth potential. HomeGoods and Canadian HomeSensehome fashion stores are co-located with one of our apparel stores in a combo or superstore format. We count each of the stores in the combo or 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: Fiscal 2016 Fiscal 2015 Fiscal 2014 24 % 23 % 24 % 12 12 12 25 25 25 16 16 15 77 76 76 9 10 11 14 14 13 100 % 100 % 100 % Revenue from Australia was not material during fiscal 2016.6The percentages of our consolidated revenues by major product category for the last three fiscal years are as follows: Fiscal 2016 Fiscal 2015 Fiscal 2014 55 % 57 % 58 % 15 14 14 30 29 28 100 % 100 % 100 % Information about our long-lived assets by geography for the last three fiscal years can be found in Note A to the consolidated financial statements.Segment Overview.We report our results in four main business segments. Marmaxx (T.J. Maxx, Marshalls and tjmaxx.com) and HomeGoods both operate in the United States. Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates T.K. Maxx, HomeSense and tkmaxx.com in Europe and Trade Secret in Australia. We also operate Sierra Trading Post (STP), an off-price Internet retailer with a small number of stores in the U.S. The results of STP are reported in our 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.7STORE LOCATIONS.Our major chains operated stores in the following locations at the end of fiscal 2016:United States: T.J. Maxx Marshalls HomeGoods 22 5 4 13 16 9 11 3 4 112 137 65 15 8 7 27 24 12 3 4 2 4 3 — 88 87 49 47 33 16 5 — — 7 1 1 47 46 24 23 12 5 10 6 2 7 6 1 14 5 4 13 10 2 9 4 3 25 29 14 51 57 26 40 25 15 15 13 10 10 3 3 16 16 7 6 — — 4 3 2 9 10 5 16 9 7 37 49 31 4 4 1 74 75 41 37 25 15 3 1 1 43 30 14 10 5 1 12 9 5 45 38 23 9 20 6 6 6 4 21 11 6 2 — — 25 17 7 62 79 35 12 3 4 5 1 1 33 29 18 19 18 7 6 3 1 21 8 6 1 1 — 1,156 1,007 526 8Store counts above include the T.J. Maxx, Marshalls or HomeGoods portion of a superstore. Not included above are eight Sierra Trading Post stores; three in Colorado, two in Wyoming and one each in Idaho, Nevada, and Vermont.Canada: Winners HomeSense Marshalls 29 13 3 32 16 4 7 1 2 4 3 1 2 1 — 11 2 2 112 47 24 1 1 — 43 15 4 4 2 1 245 101 41 Store counts above include the Winners or HomeSense portion of a superstore.Europe: T.K. Maxx HomeSense 304 39 24 — 93 — 30 — 3 — 2 — 456 39 Australia:Trade SecretAustralian Capital Territory2New South Wales11Queensland17Victoria5Total Stores35Competition.catalogues, on-linecatalogs, or other media.Employees.At January 30, 2016,As of February 2, 2019, we had approximately 216,000270,000 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. Our full-time, part-time, temporary, and seasonal workforce supports the execution of our flexible off-price business model, including the timing and frequency of store deliveries and the management of a rapidly changing mix of store inventory in over Trademarks.4,300 retail stores in nine countries. and Trade Secret, in relevant countries. We expect our rights in these trademarks and service marks to endure in locations where we use them for as long as we continue to do so.Seasonality.9Certifications.Certificationspublic 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 (www.sec.gov)(www.sec.gov).Fiscal 2014 means the fiscal year ended February 1, 2014, fiscal 2015 means the fiscal year ended January 31, 2015, fiscal 2016 means the fiscal year ending January 30, 2016 and fiscal 2017 means the fiscal year ending January 28, 2017. Unless otherwise indicated, all store information in this Item 1 is as of January 30, 2016, 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.Executive Officers of the RegistrantMarch 29, 2016:April 3, 2019:Name Age Office and Business Experience Kenneth Canestrari 5457 Senior Executive Vice President, Group President since September 2014. President, HomeGoods from 2012 untilto September 2014. Executive Vice President, Chief Operating Officer, HomeGoods from 2008 until 2012. Various financial positions with TJX from 1988 to 2008.Scott Goldenberg 6265 Senior Executive Vice President and Chief Financial Officer since April 2014; Executive Vice President and Chief Financial Officer from January 2012 to April 2014. Executive 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. Ernie Herrman 5558 Chief Executive Officer since January 2016. Director since October 2015. 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.Michael MacMillan59Senior Executive Vice President, Group President since 2011. 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 with TJX from 1985 to 2000.Carol Meyrowitz 6265 Executive Chairman of the Board since January 2016. Chairman of the Board from June 2015 to January 2016. Chief Executive Officer from January 2007 to January 2016. 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 senior management and merchandising positions with Marmaxx and with Chadwick’s of Boston and Hit or Miss, former divisions of TJX, from 1983 to 2001. Douglas Mizzi 59 Senior Executive Vice President, Group President since February 2018. President, TJX Canada from October 2011 to February 2018. Managing Director T.K. Maxx, UK from April 2010 to October 2011. Executive Vice President, Chief Operating Officer, WMI from February 2006 to April 2010. Senior Vice President, Director of Store Operations, WMI from 2004 to 2006. Various store operations positions with TJX from 1988 to 2004. Richard Sherr 5962 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. 1020162019 and until their successors are elected and qualified.ITEM 1A.Risk Factors are those that we think could cause our actual results to differ materially from those stated or implied in forward-looking statements.business.While opportunisticresults.theybut subject us to risks related to the pricing, quantity, mix, 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, and our opportunisticfocus on buying opportunistically places considerable discretion with them. Our business model expects themour merchants to effectively 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, in the right quantities, at the right prices and prices, orin the right mix, of merchandise, it could adversely affectour customer traffic, as well as our sales and margins.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.ana sufficient overall pricing differential to regularfull-price retailers, including department, specialty, and specialty stores,major online retailers, and our ability to attract customers or sustain our margins may be adversely affected. We may not achieve this pricing differential at various times or in some reporting segments, chains or geographies, which could adversely affect our results.We must also properly execute our inventory management strategy of delivering the right productthe right stores at the right time. Wecustomer demand and effectively manage pricing and markdowns, we need to appropriately allocate and deliver merchandise amongto our stores, timely and efficiently distribute inventory to stores, maintain an appropriate mix and level of inventory in each store, appropriately change theand be flexible in our allocation of floor space ofat our stores among product categories to respond to customer demand and effectively manage pricing and markdowns.categories. If we are not able to do so, our ability to attract and retain customers and our results could be adversely affected.In addition to our own execution, we may need to react to factors affecting inventory flow that are outside our control, discussed further below, such as adverse weather and natural disasters or changes in conditions affecting our vendors and others in our supply chain, such as political instability; labor issues, including port labor disputes, strikes or threats of strikes; or increasing cost of compliance with regulations. If we are not able to adjust appropriately to such factors, our inventory management may be affected, which could impact our performance and our relationship with our customers. our off-price model within our current markets and into new geographic regions, product lines, businesses and channels and, as appropriate, adding new businesses, whether by development, investment or acquisition. There are significant risks associated with our ability to continue to expand successfully, including managing the implementation of thisManaging growth effectively.effectively can be difficult. If any aspect of our expansion strategy does not achieve the success we expect, in whole or in part, we may fail to meet our financial performance expectations and/or may be required to11our investment,investments, slow our planned growth or close stores or operations, whichoperations. Various circumstances could adversely affect our financial performance.expansion plans. For example, successful store growth requires usif we are not able to find and lease appropriate real estate on attractive terms in each of the locations where we seek to open stores. Our abilitystores, we may need to do so depends, among other things, on availability and selection of appropriate siteschange our planned growth in appropriate geographies; degree of competition for sites; factors affecting costs such as real estate, construction and development costs and 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 ofthose areas. Similarly, new stores in various markets. There are risks in entering new markets, including those detailed further below. New stores may not achieve the same sales or profit levels as our existing stores, whether in current or new markets; our financial performance in new markets may not be the same as in existing markets; and adding stores or banners to existing markets may otherwise adversely affect our sales and profitability.may add operational complexitycan make it challenging to manage our complex operations effectively and imposes demands on maintainingto maintain appropriate internal resources and third party providers to support our business effectively. These demands maychallenges increase as we grow our business, addingand may add pressure to management and to various functions across our business, including administration, systems, including information technology systems, merchandising, store operations, distribution, logistics, and compliance,compliance. Increasing our size and complexity may also put additional pressure on appropriately staffing and training personnelAssociates in these areas as we grow.and/or managing appropriate third party providers that support these areas. The large size and scale of our operations, our multiple chains inbanners and locations across the U.S., Canada, and Europe and our new chain in Australia and the autonomy afforded to the chainsbanners in some aspects of the business increasealso increases the risk that our systems, controls, practices and policies willmay not be implemented effectively or consistently throughout our Company and that information may not be appropriately shared across our operations. These risks may increase as we continue to grow, particularly asif we expand into additional countries. If business information is not shared effectively, or if we are otherwise unable to manage our size or growth effectively, weour business may operate with decreased operational efficiency,be adversely affected or we may need to reduce ourthe 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 ourplans, sales and results.customerconsumer trends and preferences to meet customer demand in new or existing markets or channels could negatively impact our performance.Becausecustomerconsumer trends and preferences on an ongoing basis and to offer inventory and shopping experiences that meetsmeet those trends and preferences. However, doingwe may not do so effectively and on a timely basis across our diverse merchandise categories and in each of the many markets in the U.S., Canada, Europe and Australia in which we do business is challenging.business. Trends and preferences in new markets may differ from what we anticipate. Although our business model allows us greater flexibility than many traditional retailers to meet consumer preferences and trends (for example, by expanding and to expand and contractcontracting merchandise categories in response to consumers’ changing tastes,tastes), we may not successfully do so, which could add difficulty in successfully entering new markets, attracting new customers, retaining existing customers and encouraging frequent customer visits and could adversely affect our results.or media (through Internet-based and other(for example, through various digital or mobile channels or particular forms of social media)platforms), which expectations may vary across demographics and may evolve rapidly. Meeting demandthese expectations effectively involves identifying the right opportunities and making the right investments at the right time and with the right speed, among other things, and failure to do so may impact our reputation and our financial results.competitorscompetitors’ programs are more effective with their programs than we are,ours, our revenue or results of operations may be adversely affected.efforts, the name recognition and reputation of our chains and the location of and service offered in our stores.efforts. Although we use marketing to drive customer traffic through various media including television, radio, print, outdoor, digital/social media, database marketing,email, mobile marketing, print and direct marketing,mail, some of our competitors expend more for their programs than we do, or use different approaches than we do, which may provide them with a competitive advantage. Internet-based and otherFurther, we may not effectively implement strategies with respect to rapidly evolving digital or mobile communication channels and other social media rapidly evolve.channels. Our programs12business isbusinesses are highly competitive. We compete with local, regional, national and international retailers that sell apparel, home fashions and other merchandise that we sell, including inretailers that operate through stores, through e-commerce, catalogues and/or other media.media or channels. Some of our competitors are larger than we are or have more experience in selling certain product lines or through certain channels than we do. New competitors frequently enter the market and existingmarket. Existing competitors enter or increase their presence in the markets in which we operate and may expand their merchandise offerings, add new sales channels or change their pricing methods,strategies, all of which affect the competitive landscape. Consumer spending online has increased and may continue to increase, competition for customers.while our business is primarily in stores. We compete on the basis of various factors affecting value, meaning athe combination of brand, fashion, price, quality;and quality as well as merchandise selection and freshness; brandbanner name recognition; customer service; reputationrecognition and appeal; both in-store and online service and shopping experience; convenience and store location. Our competitiveness is highly dependent on our effective execution of our off-price model of offering our customers a fresh, rapidly changing and attractive mix of merchandise delivering value. If we fail to compete effectively, our sales and results of operations could be adversely affected.attract, train and retainemploy quality Associates in appropriate numbers includingand to retain key Associates and management could adversely affect our performance.quality sales, systems, distribution center and other Associates in large numbers as well as experiencedtalented Associates in key areas such as buying and management. ManyWe also need to hire capable, engaged Associates in large numbers for our stores and distribution centers and for other areas of our business, including information technology functions. We must constantly recruit new Associates are into fill entry level orand part-time positions with historically high rates of turnover.turnover and at times find seasonal talent in sufficient numbers. Availability and skill of Associates may differ across markets in which we do business and in new markets we enter, and we needmay be unable to manage our labor needs effectively. In addition, because of the distinctive nature of our off-price model, we must provide significant internal training and development for key Associates across the company,Company, 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 for talent in the retail industry generally and for talent in various geographic markets. If we do not continue toeffectively attract qualified individuals, train them in our business model, support their development and retain them in sufficient numbers and at appropriate levels of the organization, our growth could be limited and our performance could be adversely affected or our growth could be limited.unemployment levels;minimum wage laws and benefits requirements; market pressures, including prevailing wage rates and wage requirements; participant benefit levels and unemployment levels; changing demographics; economic conditions; interest rate changes; economic, demographicactuarial assumptions and other actuarial assumptions; health and other insurance costs andmethods; the regulatory environment, including health care legislation, immigration law, and governmental labor and employment and employee benefits programs and requirements, each of which could increase our costs. Increased labor costs, including costs of providing and managing retirement, health and other employee benefits, including health and insurance costs; and a dynamic regulatory and policy environment, including with respect to health care, immigration, labor, employment, pension and other employee benefits, and taxes. Any of these factors could increase our labor costs.as(as they did during the past several fiscal 2016, whileyears). Conversely, failing to increase our wages or benefits competitively or reducing ouroffer competitive wages or benefits could result in a decline inadversely affect our ability to attract or retain Associatessufficient or in the quality of our workforce,Associates, causing our customer service or performance to suffer, which could impact our results. Certain us to the risk of labor actions of various kinds as well as risks and potential material expenses associated with multiemployer plans, including from potentialpension plan underfunding, benefit cuts, increased contribution requirements, changes in plan terms, withdrawal liability, and potentialincreased premium costs, or insolvency of other participating employers.employers or governmental insurance programs. Other Associates in Europe are members of works councils, which may subject us to additional requirements, actions or expense. In addition, any failure of third parties that perform services on our behalf to comply with immigration, employment or other laws and regulations could damage our reputation or disrupt our ability to obtain needed labor.13reputationreputation.business.In the ordinary courseprocess information of customers, Associates and other persons, as well as information of our business we collect, store, process and transmit certain information from individuals, such asof our customerssuppliers and Associates, including, for example, customer payment card and check information.service providers. We rely in partheavily on commercially availableinformation technology systems, software, toolsincluding those of suppliers and monitoringservice providers, to manage all key aspects of our business, including planning, purchasing, sales, supply chain management, inventory management, point-of-sale processing, e-commerce, human resources, financial management, communications, safeguarding information, and compliance with legal obligations. This reliance requires us to accurately anticipate our current and future information technology needs and successfully develop and implement appropriate systems that can provide the right support at the right time. Our ongoing operations and successful growth are dependent on the doing so, as well as the ongoing integrity, security for processing, transmission and storageconsistent operations of personal and/or confidential information. these systems, including related back-up systems.with many other companies, particularlyis common in the retail industry, weour information technology systems, as well as those of our suppliers and service providers, are subject totargeted by attempts to compromise our data security. Computer hackers may, for example, attempt to penetrate our computer systems or those of the third parties with whom we work or to whom we outsource business operations and, if successful, misappropriate customer or Associate information or confidential business information of our company. While we have taken steps designed to further strengthen the security of our computer system since the unauthorized intrusion(s) into our network discovered late in 2006, in which we believe customer data were stolen, there can be no assurance that we will not suffer a future data compromise, that unauthorized parties will not gain access to the information that we collect, store, process or transmit, or that any such data compromise or unauthorized access will be discovered in a timely way. In addition, an Associate, contractor or third party with whom we do business or to whom we outsource business operations may fail to monitor their or our systems effectively, may fail to maintain appropriate safeguards or one of those parties may misuse the personal or confidentialsensitive information, attempts to which they have access, may attemptsteal money, and attempts to circumvent our security measures in order to accessdisrupt business. These attempts could include use of malware, ransomware, phishing, social engineering, denial-of-service attacks, exploitation of software or misappropriate such types of information or may purposefully or, through error, inadvertently cause a breach involving, or otherwise disclose, such information. Advances in computerproduct vulnerabilities, employee malfeasance, skimmers and software technology and capabilities, rapid changes in the sources, methods and targets of cyber-attacksshimmers, and other developments, including the increasing sophisticationforms of cyber criminals generally, may increaseattacks. These attempts are becoming increasingly sophisticated, heightening the risk of suchcompromise or disruption. Our and our suppliers’ and service providers’ information technology systems also may be damaged or disrupted, or personal or sensitive information compromised, from a breach.Compromisenumber of other causes, including power outages, system failures, catastrophic events, or employee inadvertence. Such damage or interruption could materially impair our data security or that of third parties with whom we doability to operate our business or to whom we outsource business operations, including through cyber-attacks or other external or internal methods, failure to prevent or mitigateotherwise result in material impacts on our operating results. In addition, the lossglobal regulatory environment surrounding information security and privacy is increasingly demanding, and unauthorized access of personal or businesssensitive information and delayscould result in detecting any suchregulatory enforcement actions, class actions, contract liability, or other forms of material legal liability. Any successful compromise or lossdisruption of our information technology systems could disrupt our operations, damage our reputationresult in material reputational harm and decreaseimpact our customers’ willingness to shop in our stores or online impactand/or our abilitysuppliers’ willingness to attractdo business with us.retain customers, violate applicable laws, regulations, orders and agreements, and subject uscontrols designed 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, including data centers, hardware and software and 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, to generate performance and financial reports and to operate our e-commerce sites. We are dependent on the integrity, security and consistent operations of these systems and related back-up systems. Supporting these internal and external systems requires a number of resources, including effective and qualified, and in some cases, specialized, teams. As we grow and as our systems evolve, we must continue to hire, train, manage and retain these teams, including to support our customized and legacy systems, in an effective way. Our computer systems and the third-party systems we rely on are also subject to damage or interruption from a number of causes, including power outages; computer and telecommunications failures; computer viruses or malware; security breaches; cyber-attacks; catastrophic events such as fires, floods, earthquakes, tornadoes and hurricanes; acts of war or terrorism; and design or usage errors by our Associates or contractors. Although we seek to maintain our systems effectively, manage our team of internal and third party resources effectively and successfully address the risk of data security compromises ofand information technology failures or disruptions. While we have implemented measures designed to further strengthen these policies, procedures and controls since the integrity, security and consistent operations ofunauthorized intrusions into our systems,network discovered late in 2006, we may not be successful in doing so. Compromises, interruptions or shutdowns of our systems, including those managed by third parties, whether intentional or inadvertent, could lead to delays in our business operations and, if significant or extreme, affect our results of operations. In addition, any interruptionsuffer a similar event in the operationfuture. These measures also require costly and ongoing investment in technologies, hiring, training, and compliance.our websites, particularly our e-commerce sites, could cause usmaterial business disruption, liability and reputational damage associated with ongoing actions intended to suffer reputational harmupdate, enhance, modify or to lose sales if customers are unable to access our site or purchase merchandise from us during such an interruption.14We modify, update, and replace our systems and infrastructure, including from time to time, including by adding new hardware, software and applications; maintaining, updating or replacing legacy programs; converting to global systems; integrating new service providers and adding enhanced or new functionality, such as for cloud computing technologies and for the continued operation and development of our e-commerce businesses; and adding new systems when we acquire new businesses. We also modify and change our procedures for, and add and change vendors and internal teams who assist us with designing, implementing and maintaining our systems. Although we believe we are diligent in selecting systems, teams and vendors and implementing procedures to enable us to maintain the integrity of our systems when we modify them, there are inherent risks associated with modifying or replacing systems, with new or changed relationships and with changes from acquisitions, includingnot accurately capturing and maintaining data, efficiently testing and implementing changes, in a timely manner, realizing the expected benefit of the change and managing the potential disruption of the operation of the systemsactions and diversion toof internal teams’ attention as the changes are implemented. Further, potential issues associated with implementing technology initiatives and the time and resources required to optimize the benefits of new elements of our systems and its infrastructure could reduce the efficiency of our operations in the short term. The efficient operation and successful growth of our business depends upon our information systems, including our ability to operate and maintain them effectively, to select appropriate internal teams and vendors to maintain or enhance them and to select and implement appropriate new technologies, systems, controls, hardware, software and applications 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. extreme volatility, disruption and credit contraction, which could adversely affect global economic conditions. Turmoil in the financial, equity 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, and increase our pension liabilities, expenses and funding requirements and other related financial exposure with respect to company-sponsored and multiemployer pension plans. Our strategies for managing these financial risks and exposures may not be effective or sufficient. Economic conditions, both on a global level and in particular markets, including unemployment decreasedlevels; availability of disposable income and actual and perceived wealth,wealth; energy and health care costs; costs of oil, gas and other commodities; interest and tax rates and policies,policies; weakness in the housing market,market; volatility in capital markets, decreasedmarkets; credit availability,availability; inflation and deflation, as well as political or other factors beyond our control such as threats or possibilities of war, terrorism, global or national unrest,unrest; actual or threatened epidemics,epidemics; geopolitical instability or uncertainty; and political instabilityregulatory volatility or uncertainty, including in areas such as international trade (for example, the ongoing discussions and uncertainty related to Brexit, the U.K.’s decision to withdraw from the European Union) may also have significant effects on consumer confidence and spending. Consumer spending that would, in turn, affectsaffect our business or the retail sales.industry generally. These conditions and factors could adversely affect discretionary consumer spending or shift trends in consumer spending and, although we believe our flexible off-price model helps us react, they may adversely affect our sales, cash flows and results of operations and performance.Adverse or unseasonable weather in the markets in which our stores operate or along our supply chain 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 the ability to transport merchandise to our stores from our distribution and shipping centers or elsewhere in our supply chain efficiently or in a timely way. As a result, adverse or unseasonable weather 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, natural or other disasters, such as hurricanes, tornadoes, floods, earthquakes and other extreme weather and climate conditions, or fires, explosions and acts of war or terrorism 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 distribution15facilities 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.As our business is subject to seasonal influences, a decrease in sales or margins, a severe disruption or other significant event that impacts our business during the second half of the year could have a disproportionately adverse effect 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 or any significant adverse event during this period could have a disproportionately adverse effect on our results of operations.campaigns.campaigns and other activities. These relationships and our reputation are based, in part, on perceptions of subjective qualities, so incidentsqualities. Incidents involving us, our retail banners, our executives or other Associates, our policies and practices, our third party providers, our vendors, the merchandise and brands (including our licensed or owned brands) that we carry or our industry more generally that erode trust or confidence could adversely affect our reputation and our business, particularly if the incidents result in rapid or significant adverse publicity, litigation or governmental inquiry. Similarly, informationInformation about us, our retail banners, our executives and other Associates, our board of directors, our policies and practices, our third party providers, our vendors, and the merchandise and brands we sell, including our licensed or owned brands, that is publicized through traditional or socialdigital media platforms, and similar venues, including blogs, websites and other forums forthat facilitate rapid, broad communications to an audience of consumers and other interested persons, may adversely affect our reputation and brand, even if the information is unverifiedinaccurate, incomplete or inaccurate.unverified. The reputation of our company and our retail banners may be damaged in a market or markets in which we do business by adverse events at the corporate level or at our retail banners, in all, one or someby a director or an executive or other Associate acting outside of the markets in which we do business.company policies and practices. Similarly, challenges or reactions to action (or inaction), perceived action (or inaction), by our company on issues like social policies, privacy, merchandising, compensation, compliance related to social, product, labor and environmental standards or other sensitive topics, and any perceived lack of transparency about such matters, could harm our reputation, particularly as expectations of companies and of companies’ corporate responsibility obligations may continue to change. Damage to the reputation of our company and our banners could result in declines in customer loyalty and sales,sales; affect our vendor relationships, business development opportunities and Associate retentionour ability to attract and retain quality Associates; divert attention and resources from management, including to respond to inquiries or additional regulatory scrutiny; and otherwise adversely affect our business.thosefederal regulations related to the U.S. Consumer Product Safety Improvement Act of 2008 and the U.S. Food Safety Modernization Act, 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. These regulations change from time to time and 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 or our merchandise vendors 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, we could incur significant fines or penalties could be incurred or we could have to curtail some aspects of our sales or operations, which could have a materialan adverse effect on our financial results. We rely on our vendors to provide quality merchandise that complies with applicable product safety laws, labeling requirements 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. IssuesConcerns or issues with the quality and safety of merchandise raised publicly, particularly with food, bath and body and children’s products and issues withsubject to increased levels of regulation, or the genuineness of merchandise, or customer concerns about such issues, regardless of whether verified or our fault, could cause damage to our reputation and could result in lost sales,sales; uninsured product liability claims or losses,losses; merchandise recalls and increased costs,costs; and regulatory, civil or criminal fines or penalties, any of which could have a materialan adverse effect on our financial results.16– labor and employment practices and benefits, including for labor unions and works councils; – climate change, energy and waste; – supply chain, trade restrictions and logistics, including resulting from changes to requirements or policies from the outcome of Brexit discussions; – health and welfare regulations; – consumer protection and product safety; – financial regulations; – data protection and privacy, such as to comply with, or fines and penalties related to, the General Data Protection Regulation in Europe; – Internet regulations, including e-commerce, electronic communications and privacy; and – protection of intellectual property rights. may expose us to risks inherent in operating in new countries.establishedexpanded our retail operations into Australia. We also operate buying offices around the world. We have recently expanded our operations into additional markets in Europe and Australia and ourOur goal is to continue to expand our operations into other international marketscountries 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, suchregulations likeour current operations, there are risks inherent in opening and developing operations in new countries, such those related to compliance under the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, there are additional risks inherent in opening and developing operations in new countries. These additionalAct. Additional risks include, among others, understanding the local retail climate and trends, local customs and cultures, seasonal differences, business practices and competitive conditions; complying with relevant laws, rules and regulations; developing the appropriate infrastructure; and identifying suitable partners for local operations and for integration with our global operations.operations and effectively communicating and implementing company policies and practices in new, possibly remote, jurisdictions. There are also financial, regulatory and other risks associated with international operations, including currency exchange fluctuations; potentially adverse tax consequences; limitations on the repatriation and investment of funds outside of the country where earned; trade regulations; the risk of sudden policy or regulatory changes; the risk of political, economic and civil instability and labor unrest; and uncertainties regarding interpretation, application and enforceability of laws and agreements. Any of these risks could adversely impact our operations, profitability or liquidity. Complying with applicable laws, rules and regulations and our own internal policies may also require us to spend additional time and resources to implement new procedures and financial and other controls, conduct audits, train Associates and third parties on our compliance methods or take other actions, any of which could adversely impact our operations.importingsourcing merchandise from others, particularly where sourcing from other countries.many countrieslocations, particularly southeastern Asia, which are outside of the country where the stores are located, particularly southeastern Asia.they will be sold. Where we are the importer of record, we may be subject to regulatory or other requirements, including those similar to thoserequirements 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:These risk include:—– logistics and supply;—– merchandise;—– —– —– interruptions of the supply chain;—– —– —– —– —– —– exposure for product warranty and intellectual property enforcement and infringement issues;—– —– 17—– —– beyond our control could affect the availability and the price of our inventory.inventory and our operating costs. Furthermore, although we have implemented policies and procedures designed to facilitate compliance with laws and regulations relating to operating in non-U.S. jurisdictionsproduction of merchandise, international operations and importing merchandise, there can be no assurance that our Associates and our contractors, agents, vendors or other third parties with whom we do business or to whom we outsource business operations will not violate such laws and regulations or our policies, which could subject us to liability and could adversely affect our reputation, operations or operating results.raw materials andincreased costs of other commodities.implement a hedging strategyenter into derivative instruments designed to manage a portion of our transportation costs that(a hedging strategy), any such strategy may not be effective or sufficient and could result in increased operating costs. Increases in oil and gasoline prices could also adversely affect consumer spending and demand for our products. Increased operating costs and decreased consumer spending and demand for our products could have an adverse effect on our results of operations, either individually or in the aggregate. Increased regulation related to environmental costs, including cap and trade, carbon taxes or other emissions management systems could also adversely affect our costs of doing business, including utility, transportation and logistics costs.costs, as could other shortages or disruptions impacting transportation, such as those relating to trucking and freight hauling. For example, in recent years, increased freight cost related to labor and equipment shortages, as well as other factors, had an impact on our margins. Similarly, other commodity prices can fluctuate dramatically, such as the cost of cotton and synthetic fabrics, which at times have risen significantly.dramatically. Such increases can increase the cost of merchandise, which could adversely affect our performance through potentially reduced consumer demand or reduced margins.they did in fiscal 2015 and fiscal 2016, respectively,recent years, it can be difficult for us to adjust retail prices accordingly, and gross margin can be adversely affected. In addition, a significant amount of merchandise we offer for sale is made in China and accordingly, a revaluation of 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.18projectplan 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.Trade Secretour Australia business in fiscal 2016 and STPSierra in fiscal 2013), invest in or enter into joint ventures with other businesses, develop new businesses internally (as with Homesense, our U.S. home store concept launched in fiscal 2018) and divest, close or consolidate businesses. 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. Acquisition, investment or divestiture activities may divert attention of management from operating the existing businesses, and we may not effectively evaluate target companies, investments or investment partners or assess the risks, benefits and costcosts of buying, investing in or closing businesses or of the integration of acquired businesses, all of which can be difficult, time-consuming and dilutive. These activities may not meet our performance and other expectations and may expose us to unexpected or greater-than-expected costs, liabilities and risks. In addition, we recorded intangible assets and goodwill and the value of the tradenames in connection with our last acquisitions and may similarly do so in the future in connection with other acquisitions. If we are unable to realize the anticipated benefits from acquisitions, we may be required to impair some or all of the goodwill associated with an acquisition, which couldwould adversely impact our results of operations.operations and balance sheet, such as with the impairment charge related to Sierra taken during fiscal 2018. Divestitures, closings and consolidations could involve risks such as 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 comply with existing laws, regulations and orders or changes in existing laws, regulations and applicable accounting principles and interpretations could negatively affect our business operations and financial performance.We are subject to federal, state, provincial, regional 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 the cost of providing 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 judgments, fines or other costs or penalties, which could materially adversely affect our operations and our financial results and condition.We must also comply with new and changing laws and regulations, new regulatory initiatives, evolving interpretation of existing laws by judicial and regulatory authorities, and reforms in jurisdictions where we do business. These changes could increase our costs of compliance or of doing business and could adversely affect our operating results, including those involving:—labor and employment benefits, including regarding labor unions and works councils;—health and welfare and financial regulations;—consumer protection and product safety;—data protection and privacy;—climate change, supply chain, energy and waste;19—Internet regulations, including e-commerce, electronic communications and privacy; and—protection of third party intellectual property rights.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.tax, escheat, whistleblower claims, employment and employee benefits including(such as classification, employment rights, discrimination, wage and hour and retaliation, securities, disclosure,retaliation); whistle blower claims; tax; securities; disclosure; real estate, tort,estate; environmental matters; tort; business practices; consumer protection,protection; privacy/data security,security; product safety advertising,and compliance; advertising; and intellectual property. There continue to be a number of employment-related and consumer protection lawsuits, including putative 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, litigationthese proceedings can be both time-consuming and disruptive to our operations and may cause significant expense and diversion of management attention. Legal, regulatory and regulatoryother 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.treaties, exposure to additional tax liabilities, including interest and penalties,other guidance, 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. The U.S. Tax Cut and Jobs Act of 2017 (the “2017 Tax Act”) significantly revised the previous federal income tax code. It is expected that additional interpretive guidance will be issued with respect to the 2017 Tax Act and such guidance may be different from our interpretation and thus adversely affect our results. In addition, it is uncertain if and to what extent various states will conform to the newly enacted federal tax law, which could also impact our tax obligations. Significant judgment is required in evaluating and estimating our worldwide provision and accruals for taxes, and actual results may differ from our estimations.generally for an initial term of 10 years, with options to renew the term, in the U.S. and Canada or an initial term of 10 to 15 years in Europe. In addition, we either own or lease for20results as, for example, was the case in the closures of various of our former operations.results. 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 include, 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, or if we sell a business, we can remain liable on the lease obligations if the assignee or sublessee does not perform.perform (as was the case with some of our former operations). In addition, when the lease termterms for the stores in our ongoing operations expire, we may be unable to negotiate renewals, either on commercially acceptablereasonable terms or at all, which could cause us to close stores or to relocate stores within a market on less favorable terms.over 3,600 store locations,locations. Leases in the U.S. and Canada are generally for an initial term of 10ten years with options to extend the lease term for one or more 5-year periodsfive year periods. Leases in the U.S. and Canada, andEurope generally have an initial term of 10ten to 15fifteen years and leases in Australia generally have an initial lease term of seven to ten years. Some of the leases in Europe some of whichand Australia have options to extend. We have the right to terminate some of these leases before the expiration date under specified circumstances and some with specified payments.21 T.J. Maxx Marshalls HomeGoods Homesense Sierra Alabama 25 6 6 — — Arizona 17 18 14 — — Arkansas 14 4 5 — — California 121 145 89 — — Colorado 17 11 10 — 5 Connecticut 28 24 18 — 1 Delaware 3 5 4 — — District of Columbia 4 4 — — — Florida 95 94 67 — — Georgia 50 34 27 — — Hawaii 6 — — — — Idaho 7 2 2 — 1 Illinois 51 45 31 — 3 Indiana 23 14 8 — — Iowa 11 7 5 — — Kansas 9 6 7 — — Kentucky 16 5 5 — — Louisiana 15 12 8 — — Maine 9 3 3 — — Maryland 25 29 20 2 — Massachusetts 52 57 37 4 2 Michigan 41 27 19 — 3 Minnesota 17 16 12 — 2 Mississippi 10 5 4 — — Missouri 19 17 10 — — Montana 6 — 1 — — Nebraska 5 4 4 — 1 Nevada 9 11 7 — 1 New Hampshire 16 10 10 — 1 New Jersey 40 51 42 4 2 New Mexico 5 4 2 — — New York 80 83 49 3 2 North Carolina 37 27 18 — — North Dakota 5 1 1 — — Ohio 47 35 22 — 1 Oklahoma 12 6 3 — — Oregon 12 9 8 — 3 Pennsylvania 51 40 32 2 — Puerto Rico 8 21 6 — — Rhode Island 6 6 6 — — South Carolina 22 12 9 — — South Dakota 2 1 1 — — Tennessee 26 18 9 — — Texas 70 91 50 — — Utah 14 4 7 — 1 Vermont 5 1 1 — 1 Virginia 37 30 23 1 — Washington 19 21 13 — 2 West Virginia 7 3 2 — — Wisconsin 23 11 12 — 1 Wyoming 3 1 — — 2 Total Stores 1,252 1,091 749 16 35 Winners HomeSense Marshalls Alberta 34 20 15 British Columbia 36 18 7 Manitoba 9 3 3 New Brunswick 4 3 2 Newfoundland 3 1 1 Nova Scotia 11 2 2 Ontario 118 55 42 Prince Edward Island 1 1 — Quebec 49 19 14 Saskatchewan 6 3 2 Total Stores 271 125 88 T.K. Maxx Homesense United Kingdom 345 66 Republic of Ireland 26 2 Germany 131 — Poland 43 — Austria 12 — The Netherlands 10 — Total Stores 567 68 T.K. Maxx Australian Capital Territory 2 New South Wales 15 Queensland 18 Victoria 9 Total Stores 44 January 30, 2016.February 2, 2019. Square footage information for the distribution and fulfillment centers represents total “ground cover” of the facility. Square footage information for office space represents total space occupied.DISTRIBUTION CENTERSMarmaxx T.J. MaxxWorcester, Massachusetts494,000 s.f.—ownedEvansville, Indiana989,000 s.f.—ownedLas Vegas, Nevada1,103,000 s.f.—ownedCharlotte, North Carolina595,000 s.f.—ownedPittston Township, Pennsylvania1,017,000 s.f.—ownedChickasaw, Tennessee415,000 s.f.—leasedMemphis, Tennessee300,000 s.f.—leasedMarshalls Decatur, GeorgiaT.J. Maxx Worcester, Massachusetts 494,000 s.f.—owned Evansville, Indiana 989,000 s.f.—owned Las Vegas, Nevada 1,110,000 s.f.—owned Charlotte, North Carolina 595,000 s.f.—owned Pittston Township, Pennsylvania 1,017,000 s.f.—owned Memphis, Tennessee 800,000 s.f.—leased San Antonio, Texas 1,215,000 s.f.—owned Marshalls Atlanta, Georgia 780,000 s.f.—owned Woburn, Massachusetts 472,000 s.f.—leased Bridgewater, Virginia 562,000 s.f.—leased Philadelphia, Pennsylvania 1,001,000 s.f.—leased Phoenix, Arizona 1,139,000 s.f.—owned Sierra Cheyenne, Wyoming 780,000 s.f.—owned HomeGoods Brownsburg, Indiana 805,000 s.f.—owned Bloomfield, Connecticut 803,000 s.f.—owned Jefferson, Georgia 801,000 s.f.—owned Tucson, Arizona 858,000 s.f.—owned Carteret, New Jersey 460,000 s.f.—leased TJX Canada Brampton, Ontario 506,000 s.f.—leased Mississauga, Ontario 679,000 s.f.—leased Torbram, Ontario 445,000 s.f.—leased Delta, British Columbia 432,000 s.f.—leased TJX International Wakefield, England 641,000 s.f.—leased Stoke, England 261,000 s.f.—leased Walsall, England 277,000 s.f.—leased Bergheim, Germany 322,000 s.f.—leased Wroclaw, Poland 303,000 s.f.—leased Chullora, Australia 154,000 s.f.—leased HomeGoodsBrownsburg, Indiana805,000 s.f.—ownedBloomfield, Connecticut803,000 s.f.—ownedJefferson, Georgia801,000 s.f.—ownedTJX CanadaBrampton, Ontario506,000 s.f.—leasedMississauga, Ontario679,000 s.f.—leasedTJX InternationalWakefield, England176,000 s.f.—leasedStoke, England261,000 s.f.—leasedWalsall, England274,000 s.f.—leasedBergheim, Germany322,000 s.f.—leasedWroclaw, Poland303,000 s.f.—leasedOFFICE SPACE Sierra Framingham and Marlborough, Massachusetts 1,672,000
buildingsSierra Cheyenne, Wyoming 120,000 s.f. —owned Mississauga, Ontario 434,000 s.f.—leased Watford, England 238,000282,000 s.f.—owned and leased Dusseldorf, Germany 29,000 s.f.46,000 s. f.—leasedBanksmeadow,Mascot, Australia13,000 s.f.44,000 s. f.—shared serviceagreementleasedSierra Trading Post owns a 468,000 square foot facilityCheyenne, Wyoming which houses its administrative offices and fulfillment center operations. Trade Secret, part of TJX International, maintains third-party arrangements for two distribution centers in Australia totaling approximately 98,000 square feet.various countries.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.statutes. TJX is also a defendant in lawsuits filed in federal courts brought asa putative class actionsaction on behalf of customers relating to TJX’s compare at pricing. The lawsuits are in various procedural stages and seek unspecified monetary damages, injunctive relief and attorneys’ fees.22Security HolderStockholder Matters and Issuer Purchases of Equity SecuritiesPrice RangeCommon Stock The quarterly high and low sale prices for our common stock for fiscal 2016 and fiscal 2015 are as follows: Fiscal 2016 Fiscal 2015 Quarter High Low High Low $ 71.03 $ 63.66 $ 62.37 $ 55.82 $ 70.52 $ 64.30 $ 59.95 $ 51.91 $ 76.93 $ 67.25 $ 64.20 $ 52.76 $ 74.65 $ 63.53 $ 69.84 $ 59.69 January 30, 2016February 2, 2019 was 152,500.Our Board of Directors declared four quarterly dividends of $0.21 per share for fiscal 2016 and $0.175 per share for fiscal 2015. While our dividend policy is subject to periodic review by our Board of Directors, we are currently planning to pay a $0.26 per share quarterly dividend in fiscal 2017, subject to declaration and approval by our Board of Directors, and currently intend to continue to pay comparable dividends in the future.20162019 and the average price paid per share are as follows:
Per
Purchased as Part of
Publicly Announced Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Plans or
Programs 2,322,030 $ 69.47 2,322,030 $ 1,839,083,436 2,061,924 $ 70.81 2,061,924 $ 1,693,083,493 2,956,614 $ 68.43 2,956,614 $ 3,490,760,082 7,340,568 7,340,568 November 4, 2018 through December 1, 2018 2,629,102 $51.35 2,629,102 $2,400,789,659 December 2, 2018 through January 5, 2019 3,594,376 $45.91 3,594,376 $2,235,789,672 January 6, 2019 through February 2, 2019 11,544,855 $48.07 11,544,855 $3,180,789,706 Total: 17,768,333 17,768,333 (1) RepurchasedConsists of shares repurchased under publicly announced stock repurchase programs.(2) Includes commissions for the shares repurchased under stock repurchase programs. (3) During the fourth quarter of fiscal 2016,In February 2018, TJX completed the $2.0 billion program announced in February 2014 and initiated a $2.0 billion stock repurchase program announced in February 2015. Under this program, we repurchased a total of 7.3 million shares at a cost of $509 million in the fourth quarter of 2016 and as of January 30, 2016, approximately $1.5 billion remained available for purchase under this plan. Additionally, as announced on February 24, 2016, our Board approved our 17th stock repurchase program in late January to authorizeauthorizing an additional $2.0$3.0 billion in repurchases, from time to time, under which is included inapproximately $1.7 billion remained available as of February 2, 2019. In February 2019, the table above.23 Fiscal Year Ended (53 Weeks) $ 30,945 $ 29,078 $ 27,423 $ 25,878 $ 23,191 $ 2,278 $ 2,215 $ 2,137 $ 1,907 $ 1,496 683,251 703,545 726,376 747,555 773,772 $ 3.33 $ 3.15 $ 2.94 $ 2.55 $ 1.93 $ 0.84 $ 0.70 $ 0.58 $ 0.46 $ 0.38 $ 2,095 $ 2,494 $ 2,150 $ 1,812 $ 1,507 $ 2,370 $ 2,648 $ 2,449 $ 1,855 $ 1,963 $ 11,499 $ 10,989 $ 10,098 $ 9,422 $ 8,180 $ 912 $ 912 $ 947 $ 978 $ 803 $ 1,624 $ 1,624 $ 1,274 $ 775 $ 785 $ 4,307 $ 4,264 $ 4,230 $ 3,666 $ 3,209 53.1 % 52.2 % 54.1 % 55.5 % 47.4 % 27.4 % 27.6 % 23.2 % 17.4 % 19.7 % 1,156 1,119 1,079 1,036 983 1,007 975 942 904 884 8 6 4 4 — 526 487 450 415 374 245 234 227 222 216 101 96 91 88 86 41 38 27 14 6 456 407 371 343 332 39 33 28 24 24 35 — — — — 3,614 3,395 3,219 3,050 2,905 26,158 25,461 24,712 23,894 22,894 24,308 23,715 23,092 22,380 22,042 159 122 83 83 — 10,234 9,537 8,865 8,210 7,391 5,470 5,310 5,196 5,115 5,008 1,900 1,824 1,748 1,698 1,670 975 914 666 363 162 9,970 9,109 8,383 7,830 7,588 639 545 464 411 402 667 — — — — 80,480 76,537 73,209 69,984 67,157 Fiscal Year Ended Amounts in millions, except per share amounts (53 Weeks) Income statement and per share data: Net sales $ 38,973 $ 35,865 $ 33,184 $ 30,945 $ 29,078 Net income $ 3,060 $ 2,608 $ 2,298 $ 2,278 $ 2,215 1,259,252 1,292,209 1,328,864 1,366,502 1,407,090 $ 2.43 $ 2.02 $ 1.73 $ 1.67 $ 1.57 $ 0.78 $ 0.625 $ 0.52 $ 0.42 $ 0.35 Balance sheet data: Cash and cash equivalents $ 3,030 $ 2,758 $ 2,930 $ 2,095 $ 2,494 Working capital $ 2,938 $ 3,360 $ 2,993 $ 2,370 $ 2,648 Total assets $ 14,326 $ 14,058 $ 12,884 $ 11,490 $ 10,978 Capital expenditures $ 1,125 $ 1,058 $ 1,025 $ 889 $ 912 $ 2,234 $ 2,231 $ 2,228 $ 1,615 $ 1,613 Shareholders’ equity $ 5,049 $ 5,148 $ 4,511 $ 4,307 $ 4,264 Other financial data: After-tax return on average shareholders’ equity 60.1 % 54.0 % 52.1 % 53.1 % 52.2 % 30.7 % 30.2 % 33.1 % 27.3 % 27.4 % Stores in operation 4,306 4,070 3,812 3,614 3,395 Selling square footage (in thousands) 91,075 87,548 83,798 80,480 76,537 (1) Amounts adjustedFiscal 2019 and Fiscal 2017 include a pension settlement charge and Fiscal 2017 includes a loss on early extinguishment of debt.(2) Fiscal 2018 includes an impairment charge of $99.3 million and a net benefit from the enactment of the 2017 Tax Act described in Item 7 under “Tax Cuts and Jobs Act of 2017.” (3) Fiscal 2018 and prior periods have been restated to reflect the reclassification of current deferred tax assets and liabilities to noncurrenttwo-for-one stock split completed in accordance with ASU 2015-17. We reclassified $138 million, $102 million, $96 million and $106 million of net deferred tax assets from current to noncurrent at January 31, 2015, February 1, 2014, February 2, 2013 and January 28, 2012, respectively. See “Note A: Summary of Accounting Policies” within Item 8 of this Form 10-K for additional information.November 2018.(2)Includes(4) Defined as long-term debt, exclusive of current installments and capital lease obligations, less the portion due within one year.installments.(3)Total capitalization includes(5) Defined as shareholders’ equity, short-term debt, and long-term debt and capital lease obligations, including current maturities.24yearsyear ended February 2, 2019 (fiscal 2019), our 53-week fiscal year ended February 3, 2018 (fiscal 2018), and our 52-week fiscal year ended January 30, 201628, 2017 (fiscal 2016), January 31, 2015 (fiscal 2015) and February 1, 2014 (fiscal 2014)2017).OVERVIEWspecialty storemajor online retailers) regular prices on comparable merchandise, every day. We operate over 3,6004,300 stores through our four main segments: in the U.S., Marmaxx (which operates T.J. Maxx, Marshalls and tjmaxx.com) and HomeGoods;HomeGoods (which operates HomeGoods and Homesense); TJX Canada (which operates Winners, HomeSense and Marshalls in Canada); and TJX International formerly TJX Europe (which operates T.K. Maxx, HomeSenseHomesense and tkmaxx.com in Europe, and Trade SecretT.K. Maxx in Australia). In the U.S. weWe also operate Sierra, formerly known as Sierra Trading Post (STP), a leading off-price Internet retailer with a small number of stores.that operates sierra.com and retail stores in the U.S. The results of STPSierra are reported in our Marmaxx segment.Fiscal 2016another successful year for TJXenacted. The 2017 Tax Act, along with the related reinvestments made by the Company, had a significant impact on our fiscal 2019 and fiscal 2018 results (see “Tax Cuts and Jobs Act of 2017” below).we posted strong gains in net salessuch, all share and solidrelated data, as well as basic and diluted earnings per share growth on top of strong increases in both fiscal 2015 and fiscal 2014. We continuedamounts have been adjusted to generate strong cash flows, allowing us to return value to our shareholders through cash dividends and share repurchases, while continuing to reinvest in our business by adding new stores and remodeling existing ones, and while continuing to strengthen our infrastructure in support of our continuing growth. In fiscal 2016, we implementedreflect the first phase of an initiative to raise wages for our U.S. full- and part-time hourly store associates. The second phase of additional wage increases will occur in fiscal 2017.20162019 include the following:—– Same store sales increased 5% in fiscal 2016 over an increase of 2% in fiscal 2015 and an increase of 3% in fiscal 2014. The fiscal 2016 increase was driven by an increase in customer traffic. We also had a strong increase in units sold which was offset by a reduction in the average ticket.—$30.9$39 billion for fiscal 2016,2019, up 6%9% over the same period last year. Net sales increased to $29.1 billion for fiscal 2015, up 6% over the prior year.2018. At January 30, 2016,February 2, 2019, the number of stores in operation increased 6% and selling square footage increased 5%4% over the end of fiscal 2015.—– Comp sales increased 6% in fiscal 2019 over an increase of 2% in fiscal 2018 and an increase of 5% in fiscal 2017. The fiscal 2019 increase was driven primarily by an increase in customer traffic at each of our four segments. Earnings– Diluted earnings per share for fiscal 20162019 were $3.33 per diluted share$2.43 compared to $3.15$2.02 per diluted share in fiscal 2015. Fiscal 2015 earnings per share includes a charge of $0.01 from a loss on early extinguishment of debt.2018.—– 20162019 pre-tax margin (the ratio of pre-tax income to net sales) was 11.8%10.7%, a 0.40.1 percentage point decrease compared to our fiscal 2015 pre-tax margin. The loss on early extinguishment of debt reduced pre-tax margin by 0.1 percentage point10.8% in fiscal 2015.—– 20162019 was 71.2%,71.4% a 0.3 percentage point decreaseincrease compared to the71.1% in fiscal 2015 ratio. This improvement was driven by buying and occupancy expense leverage on strong same store sales growth as well as an increase in merchandise margin.—– 2016 increased 0.7 percentage points2019 was 17.8%, which was flat to 16.8% from 16.1% in fiscal 2015. This increase is primarily due to higher store payroll costs due to our wage initiative and the impact of handling a large increase in units sold.—– were up 5% (up 6%increased 1% on a reported basis and increased 3% on a constant currency basis)basis at the end of fiscal 20162019 as compared to the prior year.—– 2016,2019, we repurchased 26.551.8 million shares of our common stock for $1.8 billion.$2.5 billion, on a “trade date basis”. Earnings per share reflect the benefit of theour stock repurchase program.programs. In January 2016,February 2019, our Board of Directors authorized our 17th stockapproved a repurchase program forthat authorizes the repurchase of up to an additional $2.0 billion.$1.5 billion of TJX common stock.25sales:Sales20162019 totaled $30.9$39 billion, a 6%9% increase over $29.1$35.9 billion in fiscal 2015.2018. The increase reflected a 4%6% increase from newcomp stores and a 5%3% increase from same store sales, offset bynon-comp sales. Foreign currency had a 3% negativeneutral impact from foreign currency exchange rates.in fiscal 2019. Net sales from our e-commerce businesses amountcombined amounted to approximately 1%2% of total sales and had an immaterial impact on fiscal 20162019 sales growth.20152018 totaled $29.1$35.9 billion, a 6%an 8% increase over $27.4$33.2 billion in fiscal 2014.2017. The increase reflected a 4% increase from new storesnon-comp sales, a 2% increase from comp sales, and a 2% increase from same store sales.the impact of the 53rd week in the fiscal 2018 calendar. Foreign currency exchange rates and e-commerce sales had an immateriala neutral impact onin fiscal 2015 net sales growth.2018.Same Fiscal 2019 Fiscal 2018 Fiscal 2017 United States Northeast 23 % 24 % 24 % Midwest 13 12 12 South (including Puerto Rico) 25 25 25 West 15 15 16 Subtotal 76 76 77 Canada 10 10 10 Europe 13 13 13 Australia 1 1 * Total 100 % 100 % 100 % * Revenue from Australia was less than one percent during fiscal 2017. increases in the U.S. for fiscal 2016 were due to an increase in customer traffic. We also had a strong increase in units sold which was offset by a reduction in the average ticket. In fiscal 2016, home fashions performed better than apparel but both recorded strong same store sales growth. Geographically, in the U.S., sales were strong in virtually all regions, with the Southeast reporting the highest same store sales growth. In Canada, same store sales increases were well above the consolidated average while TJX International was slightly below the consolidated average.Same store sales increases in the U.S. for fiscal 2015 were driven by increases in the value of the average transaction and customer traffic. In fiscal 2015, within apparel, sales from jewelry and accessories and activewear performed particularly well, as did home fashions. Geographically, in the U.S., sales were strongest in the Southeast and Southwest. Same store sales increases at TJX International and TJX Canada were above the consolidated average.We define same store sales(“comp 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. The sales of Sierra Trading Post (including stores), tjmaxx.com and tkmaxx.com (our e-commerce businesses) are not included in same store sales. We classify a store as a new store until it meets the same store sales criteria. The newly acquired Trade Secret stores will be included in same store sales when they meet the above definition. 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 storecomp sales resultson a 52-week basis by comparing the current and prior year weekly periods that are most closely aligned. Relocated stores and stores that have increasedchanged 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 storecomp percentage is immaterial. Same– New stores - stores that have not yet met the comp sales criteria, which represents a substantial majority of non-comp sales – Stores that are closed permanently or for an extended period of time – Sales from our e-commerce businesses, meaning Sierra (including stores), tjmaxx.com and tkmaxx.com on a constant currency basis, meaning we translateby translating the current year’s same storecomp 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.define customer traffic to bealso had an increase in the number of transactions in stores includedunits sold, which was more than offset by a reduction in the same store sales calculationaverage ticket. In fiscal 2018, home fashions and define average ticket to be the average retail price of the units sold. We define average transaction or average basket to be the average dollar value of transactions includedapparel both grew, with home fashions performing better than apparel. Geographically, in the same storeU.S., the Southeast and the Southwest regions reported the highest comp sales calculation.26sales: Percentage of Net Sales Fiscal Year 2016 Fiscal Year 2015 Fiscal Year 2014 100.0 % 100.0 % 100.0 % 71.2 71.5 71.5 16.8 16.1 16.3 — 0.1 — 0.1 0.1 0.1 11.8 % 12.2 % 12.1 % $ 3.33 $ 3.15 $ 2.94 Percentage of Net Sales Fiscal Year 2019 Fiscal Year 2018 Fiscal Year 2017 Net sales 100.0 % 100.0 % 100.0 % Cost of sales, including buying and occupancy costs 71.4 71.1 71.0 Selling, general and administrative expenses 17.8 17.8 17.4 Impairment of goodwill and other long-lived assets — 0.3 — Loss on early extinguishment of debt — — 0.2 Pension settlement charge 0.1 — 0.1 Interest expense, net — 0.1 0.1 Income before provision for income taxes* 10.7 % 10.8 % 11.2 % * Figures may not foot due to rounding. :—– as a percentage of net sales, or affects them only slightly, as sales and expenses of the foreign operations are translated at approximately the same rates within a given period.—– (GAAP)(“GAAP”), we record a mark-to-market gain or loss on the derivative 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 received and paid for. 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 derivatives does not affect net sales, but it does affect the cost of sales, operating margins and earnings we report.sales, including buyingSales, Including Buying and occupancy costs:Occupancy Costs71.2%71.4% in fiscal 20162019 compared to 71.5%71.1% in both fiscal 20152018 and 71.0% in fiscal 2014.2017. The improvementincrease in this expense ratio during fiscal 2019 was driven by higher supply chain costs as we continue to invest in existing and open new distribution centers as well as the absence of the benefit of the 53rd week reflected in last year's expense ratio. Merchandise margin was essentially flat compared to fiscal 2018 despite significantly higher freight costs.leverage on buying and occupancyhigher supply chain costs as a resultwe continue to invest and open new distribution centers. This was offset by the favorable impact of mark-to-market of inventory derivatives that benefited the 5% same store sales increase along with an increase on our profit margin on merchandise sold (merchandise margin). Together these two items benefitted the fiscal 2016 expense ratio by approximately 0.50.1 percentage points. Merchandise margin improved despitepoint as well as an estimated 0.1 percentage point benefit from the negative impact transactional foreign exchange had on the cost of merchandise for Canada and Europe this year versus last year. The change in exchange rates increased the cost of merchandise purchased by Canada and Europe that were denominated in currencies other than their local currency, primarily the U.S. dollar. This expense ratio was also negatively impacted by increased freight and distribution costs associated with moving more units through our supply chain and the mark to27market of inventory derivatives. The fiscal 2015 expense ratio was comparable to that of fiscal 2014 with a slight increase53rd week in the Company’s fiscal 20152018 calendar. Fiscal 2018 merchandise margin.generalGeneral and administrative expenses: Selling, general and administrativeAdministrative Expenses16.8%17.8% in fiscal 2016, 16.1%2019 and fiscal 2018, and 17.4% in fiscal 2015 and 16.3% in2017. The fiscal 2014. The2019 expense ratio reflects an increase in this ratio in fiscal 2016 was primarilyincentive compensation accruals due to a combinationstronger than expected operating performance as well as store wage increases, partially offset by leverage on strong comp sales. The fiscal 2018 expense ratio reflects the impact of the incremental investments related to the 2017 Tax Act and higher employee payroll costs due to our wage initiativeincreases.an increase in units handled atOther Long-lived Assets, Related to Sierrastores, along with our incremental investments and increased contributionsfourth quarter of fiscal 2018, we recorded a $99.3 million impairment charge, primarily related to TJX’s charitable foundations.The reduction in this ratio for fiscal 2015 was largelygoodwill, as the estimated fair value of Sierra fell below the carrying value due to a reductiondecrease in our reserves for former operationsprojected revenue growth rates. The impairment charge is included in fiscal 2015, as well as costs incurred in fiscal 2014 relating to our home office relocations.early extinguishmentEarly Extinguishment of debt: On July 8, 2014,Debtredeemedissued $1.0 billion of 2.25% ten-year notes. We used a portion of the proceeds to redeem our $400$375 million aggregate principal amount6.95% notes on October 12, 2016, prior to their scheduled maturity of 4.20% notes due August 2015April 15, 2019 and we recorded a pre-tax loss on the early extinguishment of debt of $16.8$51.8 million.expense, net:Expense, net Fiscal Year Ended Dollars in thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 68,253 $ 64,783 $ 57,084 (7,984 ) (9,403 ) (10,993 ) (13,869 ) (15,593 ) (15,010 ) $ 46,400 $ 39,787 $ 31,081 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Interest expense $ 69,102 $ 69,237 $ 69,219 Capitalized interest (4,263 ) (4,942 ) (7,548 ) Interest (income) (55,979 ) (32,707 ) (18,137 ) Interest expense, net $ 8,860 $ 31,588 $ 43,534 increasedecrease in net interest expense, net for fiscal 2016 reflects interest expense in2019 and fiscal 2016 on the financing lease obligation related to TJX Canada’s new home office of $3.7 million. The increase in net interest expense also reflects a reduction in capitalized interest costs and2018 was driven by additional interest income, in the fiscal 2016 periods as compared to the same periods last year.The increase in net interest expense for fiscal 2015 reflected the interest cost from the date of issuance (June 5, 2014) on the $750 million 2.75% seven-year notes. In addition, fiscal 2015 included 12 months of interest expense on the $500 million 2.50% ten-year notes, compared to fiscal 2014, which only reflected nine months of interest expense. These costs were partially offset by interest savingsprimarily due to the redemption of the $400 million 4.20% notes. The reduction in capitalized interest on ongoing capital projects is partially offset by an increase in interest income driven by higher cash balances.taxes:Taxes37.7%26.7% in fiscal 2016, 37.6%2019, 32.4% in fiscal 20152018 and 35.6%38.3% in fiscal 2014.2017. The increasedecrease in the fiscal 2016 income tax rate was due to the jurisdictional mix of income and the valuation allowance on foreign net operating losses. The increase in the fiscal 20152019 effective income tax rate as comparedis primarily driven by the reduction of the U.S. federal statutory rate from 35% to 21%. The decrease in the effective income tax rate in fiscal 2014,2018 was primarily due to the impact onfavorable effect of the 2017 Tax Act, excess tax benefit from share-based compensation attributable to the adoption of ASU 2016-09-Compensation- Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting, and the jurisdictional mix of income.2014 income2019 and fiscal 2018 including, but not limited to, reducing the U.S. federal corporate tax rate from 35% to 21%. In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 118, which allows a measurement period, not to exceed one year, to finalize the accounting for the income tax benefitsimpacts of the 2017 Tax Act. We completed our analysis in the fourth quarter of fiscal 2019 and determined there was no material adjustment to the income tax expense.2014 of approximately $80 million, which were primarily due2019 compared to a reduction$2.6 billion in our reserve for uncertain tax positions as a result of settlements with state taxing authoritiesfiscal 2018 and the reversal of valuation allowances against foreign net operating loss carryforwards. These benefits reduced the fiscal 2014 effective income tax rate by 2.2 percentage points. See Note K to the consolidated financial statements for more information relating to income taxes.Net income and diluted earnings per share: Net income was $2.3 billion in fiscal 2016, a 3% increase over $2.2 billion in fiscal 2015, which in turn was a 4% increase over $2.1 billion in fiscal 2014.2017. Diluted earnings per share were $3.33$2.43 in fiscal 2016, $3.152019, $2.02 in fiscal 20152018 and $2.94$1.73 in fiscal 2014. The after-tax cost for the loss on the early extinguishment of debt in the second quarter of fiscal 2015 reduced earnings per share for fiscal 20152017. Year over year results are impacted by $0.01 per share. The tax benefits referred to above added $0.11 to earnings per share for fiscal 2014. Foreign currency exchange rates also affected thenumerous items that impact comparability of our results. Foreignas summarized below. Fiscal Year Ended February 2,
2019February 3,
2018January 28,
2017 (53 weeks) $ (0.34 ) $ (0.09 ) $ — $ — $ (0.06 ) $ — Sierra impairment charge $ — $ 0.05 $ — Pension settlement charge $ 0.02 $ — $ 0.01 Loss on early extinguishment of debt $ — $ — $ 0.02 (1) Refer to the Tax Cuts and Jobs Act of 2017 section within this MD&A for further details on the net benefit of 2017 Tax Act items. $0.09 negativeneutral impact on earnings per share in fiscal 20162019 when compared to fiscal 2015,2018, and a $0.02 negativepositive impact in fiscal 20152018 when compared to fiscal 2014.28in fiscal 2016 by approximately 3%. We repurchased 26.5 million shares of our stock at a cost of $1.8 billion in each fiscal 2016, 27.7 million shares of our stock at a cost of $1.7 billion in fiscal 2015 and 27.0 million shares of our stock at a cost of $1.5 billion in fiscal 2014.information:Informationsegmentssegment (HomeGoods and Homesense) both operate in the United States. Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates T.K. Maxx, HomeSenseHomesense and tkmaxx.com in Europe and Trade SecretT.K. Maxx in Australia. InWe also operate Sierra, formerly Sierra Trading Post that operates sierra.com and retail stores in the U.S., we also operate STP, an off-price Internet retailer with a small number of stores. We currently consider all of STP, including its limited number of stores, as part of our e-commerce businesses. The results of STP have beenSierra are included in our Marmaxx segment. The former TJX Europe segment has been renamed TJX International to reflect the acquisition of Trade Secret in Australia. expense.expense, net. “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.segments:Segments: Fiscal Year Ended Dollars in millions January 31,
2015 February 1,
2014 $ 19,948.2 $ 18,687.9 $ 17,929.6 $ 2,858.8 $ 2,736.7 $ 2,612.7 14.3 % 14.6 % 14.6 % 4 % 1 % 3 % 1,156 1,119 1,079 1,007 975 942 2,163 2,094 2,021 26,158 25,461 24,712 24,308 23,715 23,092 50,466 49,176 47,804 At January 30, 2016, STP operated eight stores with selling square footage of 159,000. At January 31, 2015, STP operated six stores with selling square footage of 122,000. At February 1, 2014, STP operated four stores with selling square footage of 83,000. Fiscal Year Ended In millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 24,058.0 $ 22,249.1 $ 21,246.0 Segment profit $ 3,253.9 $ 2,949.4 $ 2,995.0 Segment profit as a percentage of net sales 13.5 % 13.3 % 14.1 % Increase in comp sales 7 % 1 % 5 % Stores in operation at end of period T.J. Maxx 1,252 1,223 1,186 Marshalls 1,091 1,062 1,035 Sierra 35 27 12 Total 2,378 2,312 2,233 Selling square footage at end of period (in thousands) T.J. Maxx 27,484 27,077 26,614 Marshalls 25,269 24,916 24,750 Sierra 598 470 227 Total 53,351 52,463 51,591 atfor Marmaxx increased 7%8% in fiscal 2016 as compared to fiscal 2015. The increase reflected a 3% increase from new store sales and a 4% increase from same store sales. The same store sales increase of 4% in fiscal 2016 is2019 on top of a 5% increase in fiscal 2018. The fiscal 2019 increase reflects a 7% increase from comp sales and a 1% increase from non-comp sales. The sales increase of 5% in fiscal 2018 reflects a 2% increase from non-comp sales, a 2% increase from the prior year. Same store53rd week and a 1% increase from comp sales. Comp sales growth at Marmaxx for fiscal 20162019 was driven by anprimarily due to a 5% increase in customer traffic. Marmaxx same store sales also reflect antraffic on top of a 3% increase in units sold, which was more than offset by a decrease in the average ticket. Our merchandise mix and pricing strategy throughout fiscal 2016 resulted in the lower average ticket which we believe contributed to strong growth in customer traffic and in units sold.fiscal 2018. Geographically, same storecomp sales were strong throughout most of the country with the Southeast region particularly strong. Homeas all regions posted a 5% comp or greater. Apparel outperformed home fashions outperformed apparel forin fiscal 20162019 with both categories posting same storesolid comp sales growth.Same store sales for Marmaxx were up 1% Sales of our U.S. e-commerce businesses represented approximately 3% of Marmaxx’s net sales.2015, on top of a 3% increase in the prior year. Same store sales growth at Marmaxx for fiscal 2015 was driven by an increase in the average transaction with a slight29increase in customer traffic. Same store sales increases for home fashions were above the chain average while apparel overall was below the chain average. Within apparel, jewelry and accessories and activewear were well above the average. Geographically, same store sales increases were strongest in the Southeast and Southwest.Segment margin2019 compared to 13.3% in fiscal 2016 was 14.3% compared to 14.6% in2018. This comparison is impacted by items impacting the fiscal 2015.2018 segment margin, primarily the Sierra impairment charge which reduced last year’s segment margin by 0.4 percentage points. Marmaxx results for fiscal 20162019 reflect an improvement due to expense leverage on the strong comp sales which was more than offset by higher incentive compensation accruals due to the stronger than expected operating performance and an increase in merchandisedistribution costs and store wages. Collectively these items reduced the fiscal 2019 segment margin and occupancy expense leverage on same store sales growth of approximately 0.6by 0.7 percentage points. However, these gains were offset by higher distribution costs, reflecting theMerchandise margin was essentially flat for fiscal 2019 compared to fiscal 2018 despite a significant increase in units processed as well as higher store payroll, primarily due to our wage initiative, and processing more units at the store level. In addition, tjmaxx.com and STP (ourfreight costs. Our U.S. e-commerce businesses) hadbusinesses, excluding the fiscal 2018 impairment charge, did not have a negativesignificant impact on year-over-year segment margin comparisons of 0.3 percentage points. Ourcomparisons.e-commerce businesses operate at lower profit margins and at STP, we incurred additional costs as we work to transition this business to be less promotional to align more closely with our off-price model and to adjust its merchandise mix. Overall, e-commerce sales represent less than 2% of Marmaxx’s net sales.20152018 was 14.6%,13.3% compared to 14.1% in fiscal 2017. Marmaxx results for fiscal 2018 reflect a 0.4 percentage point negative impact from the Sierra impairment charge. In addition, higher store payroll costs, primarily due to wage increases, and higher distribution costs, primarily due to processing more units, collectively reduced segment margin by approximately 0.5 percentage points. The fiscal 2018 segment margin was also negatively impacted by expense deleverage on the 1% comp sales but was favorably impacted by approximately 0.1 percentage point due to the 53rd week. Merchandise margin was flat for fiscal 2018 compared to fiscal 2014. Improvements in merchandise margin as well as a reduction in administrative costs and insurance costs as a percentage of sales were offset by the impact of our2017. Our U.S. e-commerce businesses, and expense deleverage, primarily occupancy costs,excluding the impairment charge, did not have a significant impact on the 1% same store sales growth.2017,2020, we expect to open approximately 60 Marmaxx stores and 10 Sierra stores, which would increase selling square footage by approximately 2%. Fiscal Year Ended In millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 5,787.4 $ 5,116.3 $ 4,404.6 Segment profit $ 671.9 $ 674.5 $ 613.8 Segment profit as a percentage of net sales 11.6 % 13.2 % 13.9 % Increase in comp sales 4 % 4 % 6 % Stores in operation at end of period HomeGoods 749 667 579 Homesense 16 4 — Total 765 671 579 Selling square footage at end of period (in thousands) HomeGoods 13,775 12,448 11,119 Homesense 343 81 — Total 14,118 12,529 11,119 HomeGoods Fiscal Year Ended Dollars in millions January 30,
2016 January 31,
2015 February 1,
2014 $ 3,915.2 $ 3,414.4 $ 2,993.7 $ 549.3 $ 463.2 $ 386.5 14.0 % 13.6 % 12.9 % 8 % 7 % 7 % 526 487 450 10,234 9,537 8,865 15%13% in fiscal 2016,2019, on top of a 14%16% increase in fiscal 2015.2018. The increase in fiscal 2016 reflected2019 reflects a 7%9% increase from new storenon-comp sales and an 8%a 4% increase from same storecomp sales. The same store sales increase of 8%16% in fiscal 2016 is2018 reflects a 10% increase from non-comp sales, a 4% increase from comp sales and a 2% increase due to the 53rd week. Comp sales growth at HomeGoods for fiscal 2019 was due to a 5% increase in customer traffic on top of a same store sales increase of 7% in fiscal 2015. The increase in same store sales for fiscal 2016 was primarily due to an4% increase in customer traffic. Same store sales growthtraffic in fiscal 2015 was driven2018.an increase in the value of the average transaction along with an increase in customer traffic.20162018 was 14.0%, up from 13.6%13.2% compared to 13.9% for fiscal 2015.2017. The growthdecrease in segment margin for fiscal 2016 was driven by expense leverage, primarily buying and occupancy costs, on strong same store sales growth and an increase2018 includes a decline in merchandise margin partially offset by an increase inof 0.5 percentage points, primarily as a result of increased freight costs. In addition, higher distribution center costs andprimarily due to opening a new distribution center, higher store payroll costs, relatedprimarily due to wage increases, as well as costs in connection with opening more stores as compared to fiscal 2017, including our wage initiative. Segment profitfirst Homesense stores, collectively reduced segment margin for fiscal 2015 was 13.6%, up from 12.9% for fiscal 2014. The increase in fiscal 2015 was drivenby approximately 0.8 percentage points. These costs were partially offset by expense leverage on the 7% same storecomp sales increase, due to buying and occupancy costsgrowth as well as administrative costs, and an increase in merchandise margins.2017,2020, we plan an increase of approximately 5065 HomeGoods stores and plan to15 Homesense stores, which would increase selling square footage by approximately 8%11%.30Foreign Segments: Fiscal Year Ended U.S. Dollars in millions January 30,
2016 January 31,
2015 February 1,
2014 $ 2,854.6 $ 2,883.9 $ 2,877.8 $ 375.3 $ 393.6 $ 405.4 13.1 % 13.6 % 14.1 % 12 % 3 % 0 % 245 234 227 101 96 91 41 38 27 387 368 345 5,470 5,310 5,196 1,900 1,824 1,748 975 914 666 8,345 8,048 7,610 Fiscal Year Ended U.S. dollars in millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 3,869.8 $ 3,642.3 $ 3,171.1 Segment profit $ 551.6 $ 530.1 $ 413.4 Segment profit as a percentage of net sales 14.3 % 14.6 % 13.0 % Increase in comp sales 4 % 5 % 8 % Stores in operation at end of period Winners 271 264 255 HomeSense 125 117 106 Marshalls 88 73 57 Total 484 454 418 Selling square footage at end of period (in thousands) Winners 5,862 5,780 5,629 HomeSense 2,323 2,179 1,984 Marshalls 1,885 1,621 1,307 Total 10,070 9,580 8,920 2016 were down 1% compared to2019, on top of a 15% increase in fiscal 2015. While net2018. The increase in sales reflected a 3% increase from new store sales and a 12% increase from same store sales, these were more than offset by currency translation that negatively impactedfor fiscal 2019 reflects comp sales growth by 16%. The same store sales increase of 12% in fiscal 2016 was primarily due to an increase in customer traffic. Same store sales increased 3% in fiscal 2015. Net sales for TJX Canada were essentially flat in fiscal 2015 compared to fiscal 2014 as4% and a 4% increase from new storenon-comp sales, and a 3% increase in same store sales were completely offset by a 7%2% negative impact of foreign currency translation. The increase in sales for fiscal 2018 reflects comp sales growth of 5%, a 5% increase from non-comp stores, a 3% positive impact of foreign currency.0.5 percentage points to 13.1%14.3% in fiscal 2016.2019 compared to 14.6% in fiscal 2018. The decrease in segment margin was primarily due to the combination of a decrease in merchandise margins, the unfavorable impact of mark-to-market adjustments on inventory-related derivativeshigher store wage and an increase in incentive pay due to the above-plan performance. Collectively, these items reduced segment margin by 1.2 percentage points. The decrease in merchandise margin was driven by transactional foreign exchange as the year-over-year changes in currency exchange rates increased TJX Canada’s cost of merchandise purchased in U.S. dollars. These declines in the segment margin werefreight costs, partially offset by expense leverage on same store sales, particularly buying and occupancy costs.decreased 0.5increased 1.6 percentage points to 13.6%14.6% in fiscal 2015.2018. The decreaseincrease in segment margin was primarily due to a decreasethe combination of an increase in merchandise marginsmargin of 0.6 percentage points, which benefited from the year-over-year increase in the Canadian dollar, and expense leverage on the unfavorablestrong comp sales. The increase in the segment margin also included a favorable impact of 0.3 percentage points due to foreign currency, primarily the mark-to-market adjustments on inventory-related derivatives,impact of the inventory derivatives. The fiscal 2018 segment margin also benefited from the 53rd week, which collectively reducedlifted the segment margin by 0.8approximately 0.1 percentage points. The decline in merchandise margin in fiscal 2015 as compared to fiscal 2014 was also largely related to transactional foreign exchange. The decline in the fiscal 2015 segment margin was partially offset by expense leverage on same store sales, particularly buying and occupancy costs, along with a reduction in advertising costs as a percentage of sales.2017,2020, we plan an increase of approximately 30 stores in Canada, and plan towhich would increase selling square footage by approximately 7%5%.31 Fiscal Year Ended U.S. Dollars in millions January 30,
2016 January 31,
2015 February 1,
2014 $ 4,226.9 $ 4,092.3 $ 3,621.6 $ 316.9 $ 337.4 $ 275.5 7.5 % 8.2 % 7.6 % 4 % 3 % 6 % 456 407 371 39 33 28 35 — — 530 440 399 9,970 9,109 8,383 639 545 464 667 — — 11,276 9,654 8,847 Fiscal Year Ended U.S. dollars in millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 5,257.8 $ 4,856.9 $ 4,362.0 Segment profit $ 285.8 $ 249.2 $ 235.5 Segment profit as a percentage of net sales 5.4 % 5.1 % 5.4 % Increase in comp sales 3 % 2 % 2 % Stores in operation at end of period T.K. Maxx 567 540 503 Homesense 68 55 44 T.K. Maxx Australia 44 38 35 Total 679 633 582 Selling square footage at end of period (in thousands) T.K. Maxx 11,693 11,379 10,787 Homesense 1,029 883 714 T.K. Maxx Australia 814 714 667 Total 13,536 12,976 12,168 3%8% in fiscal 2016 to $4.2 billion compared to $4.1 billion in fiscal 2015,2019 on top of a 13%an 11% increase in fiscal 2015 compared to2018. The increase in sales for fiscal 2014.2019 reflects a 4% increase from non-comp sales, comp sales growth of 3%, and a 1% positive impact from foreign currency translation. The increase in comp sales for fiscal 2019 was driven by a 4% increase in customer traffic. E-commerce sales represent less than 3% of TJX International’s net sales in fiscal 2019 and fiscal 2018. The increase in fiscal 2016 reflected2018 reflects a 9%7% increase from new storenon-comp sales, comp sales growth of 2% and a 4% increase2% benefit from same store sales, offset by the unfavorable impact from53rd week. Foreign currency translation of 10%.had a neutral impact on fiscal 2018 sales growth. The increase in same storecomp sales for fiscal 20162018 was primarily driven by an increase in customer traffic. Net sales for TJX International increased 13% in fiscal 2015 to $4.1 billion compared to $3.6 billion in fiscal 2014. The increase in fiscal 2015 reflected an 8% increase from new store sales, a 3% increase from same store sales and a 2% favorable impact from foreign currency translation.Segment profit margin decreased 0.7 percentage points to 7.5% in fiscal 2016 compared to fiscal 2015. The fiscal 2016 segment margin was favorably impacted by strong buying and occupancy expense leverage on the strong same stores sales increase, which was more than offset by the impact of several of our investment initiatives and a decrease in merchandise margin. The investment initiatives include costs associated with centralizing support areas of our business, investing in our infrastructure to support our growth plans, our new store openings in Austria and the Netherlands and the acquisition of Trade Secret in Australia.0.6 percentage points to 8.2% in5.4% for fiscal 20152019 compared to 5.1% for fiscal 2014.2018. The improvementincrease in segment margin was driven by favorable merchandise margins of 0.4 percentage points, primarily due to an increase in merchandise marginslower markdowns, along with the favorable reserve adjustment relating to a wage audit and expense leverage on same store sales, particularly buying and occupancy costs. The mark-to-market adjustment on inventory-related derivatives also had a positive impact. These margin improvements were partially offset by an increasehigher supply chain costs associated with the opening of a new distribution center in fiscal 2018 and higher store payroll, which collectively reduced segment margin by approximately 0.4 percentage points.asassociated with the opening of a new distribution center and higher store payroll, which collectively reduced segment margin by approximately 0.7 percentage points. Segment margin was also negatively impacted by expense deleverage on the 2% comp sales growth. These declines in segment margin were partially offset by a favorable impact of sales0.4 percentage points due to foreign currency, primarily the mark-to-market impact of the inventory derivatives as well as investments in talent and research to open stores in two new countries in fiscal 2016.2017 and plan to2020, which would increase selling square footage by approximately 8%5%.General Corporate Expense: Fiscal Year Ended Dollars in millions January 30,
2016 January 31,
2015 February 1,
2014 $ 395.6 $ 324.4 $ 329.5 Fiscal Year Ended In millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) General corporate expense $ 545.0 $ 515.0 $ 408.2 Virtually all generalGeneral corporate expenses are primarily included in selling, generalSG&A expenses. The mark-to-market adjustment of our fuel hedges is included in cost of sales, including buying and administrative expenses. Increased contributions to the TJX charitable foundations, higher incentive32compensation accruals due to our above-plan performance and costs related to the acquisition of Trade Secret in Australia accounted for approximately $61 million of theoccupancy costs.2016 as compared to2019 of the Associate related investments of approximately $70 million incurred in fiscal 2015.General2018 associated with the 2017 Tax Act.2015 decreased slightly from2018 was primarily driven by the prior year primarily dueincremental investments related to the 2017 Tax Act. These investments include a favorable adjustmentdiscretionary bonus to our reserve for former operations as well as costs incurredeligible non-bonus plan Associates, additional retirement plan contributions and contributions to TJX’s charitable foundations, which totaled $100 million in fiscal 2014 relating to our home office relocations. These reductions in general corporate expense were partially offset by an increase in stock compensation expense and higher contributions to the TJX Foundation.activities:Activities$2,937 million$4.1 billion in fiscal 2016, $3,008 million2019, $3.0 billion in fiscal 20152018 and $2,600 million$3.6 billion in fiscal 2014.2017. The cash generated from operating activities in each of these fiscal years was largely due to operating earnings.2016 decreased2019 increased by $71 million$1.1 billion compared to fiscal 2015.2018. Net income, plus theadjusted for non-cash impact of depreciation provideditems increased operating cash of $2,894 millionflows in fiscal 20162019 as compared to $2,804 millionfiscal 2018 by $0.5 billion. In addition there was a $0.6 billion increase in cash flows related to prepaid expenses and other current assets largely due to the prefunding of certain service contracts in fiscal 2015, an increase of $90 million. The change in the deferred income tax provision unfavorably impacted year-over-year2018.$71 million, which$0.6 billion compared to fiscal 2017. Net income, adjusted for non-cash items increased operating cash flows in fiscal 2018 as compared to fiscal 2017 by $0.3 billion. This increase in cash flows was more than offset by a $0.3 billion decrease in cash flows related to merchandise inventories, net of related accounts payable, a $0.3 billion decrease in cash flows related to accounts receivable and prepaid expenses and a $0.3 billion decrease in cash flows related to accrued expenses and other liabilities. Merchandise inventories, net of related accounts payable increased in fiscal 2018 due in part to the lower inventory levels we carried at fiscal 2017 year end. The increase in accounts receivable was driven by the deferred tax impact of the higher contributions to the pension plancredit card receivables. The increase in fiscal 2015. The change in merchandise inventory, net of the related change in accounts payable, resulted in a use of cash of $290 million in fiscal 2016, compared to a use of cash of $47 million in fiscal 2015, negatively impacting year-over-year cash flows by $243 million. The cash flow impact of the change in inventoryprepaid expenses and accounts payableother current assets was primarily due to an increase in packaway inventory at the endprefunding of fiscal 2016 as compared to the prior yearcertain service contracts as well as the impacttiming of merchandise received laterent payments which was impacted by the timing in the fourth quarter ofour fiscal 2015 that was paid for in fiscal 2016.year end dates. The change in accrued expenses and other liabilities favorably impacted cash flows by $353 million in fiscal 2016 versus a favorable impact of $166 million in fiscal 2015. This favorable impact of $187 million in year-over-year cash flows from operations was driven by a reduction in sales taxes and income taxes payable, primarily by an additionaldue to timing of payments and benefits associated with the 2017 Tax Act, as well as a contribution of $100 million of voluntary contributions to our qualifiedthe Company’s defined benefit pension plan in fiscal 20152018, as compared to fiscal 2016. Lastly, fiscal 2016 cash flow from operations was reduced by $23 million for the cost to acquire favorable lease rights.Operating cash flows for fiscal 2015 increased $408 million compared to fiscal 2014. Net income plus the non-cash impact of depreciation provided cash of $2,804$50 million in fiscal 2015 compared to $2,686 million2017.2014, an increase of $118 million.2019, $1.0 billion in fiscal 2018 and $1.2 billion in fiscal 2017. The change in the deferred income tax provision, which wascash outflows were primarily driven by capital expenditures and, in addition, the tax treatment of the voluntary contributions to our funded pension plan of $150 millionactivity in fiscal 2015, favorably impacted fiscal 2015 operating2019 reflects the liquidation of short-term investments by TJX Canada as a result of a repatriation of earnings completed during the second quarter.flows by $50 million. The changeused in merchandise inventory, net of the related change in accounts payable, resulted in a use of cash of $47 million in fiscal 2015, compared to a use of cash of $117 million in fiscal 2014, favorably impacting year-over-year cash flows by $70 million. The cash flow impact of the change in inventory and accounts payable was driven by the timing of receipt and payment of merchandise purchases. The improvement in operating cash flows in fiscal 2015 as compared to fiscal 2014 reflects an increase in the receipt of merchandise later in the fourth quarter that was paid for in the following fiscal year. The change in accrued expenses and other liabilities favorably impacted cash flows by $21 million in fiscal 2015 versus an unfavorable impact of $30 million in fiscal 2014. This favorable impact of $51 million in year-over-year cash flows from operations was driven by a payment in fiscal 2015 of approximately $80 million for settlements with tax authorities reducing our fiscal 2014 reserve for uncertain tax positions. Additionally, operating cash flows increased by $122 million year-over-year due to the change in income taxes payable and recoverable, which was largely driven by the increase in the current tax provision.33Investing activities: Our cash flows for investing activities include capital expenditures for the last three fiscal years as set forth in the table below: Fiscal Year Ended In millions January 30,
2016 January 31,
2015 February 1,
2014 $ 199.1 $ 201.5 $ 185.4 299.7 266.8 308.0 390.6 443.2 453.3 $ 889.4 $ 911.5 $ 946.7 Fiscal Year Ended In millions New stores $ 201.2 $ 226.0 $ 191.2 Store renovations and improvements 347.2 335.2 274.8 Office and distribution centers 576.7 496.4 558.7 Total capital expenditures $ 1,125.1 $ 1,057.6 $ 1,024.7 20172020 will be approximately $1.1$1.5 billion, including approximately $600$900 million for our offices and distribution centers (including buying and merchandising systems and other information systems) to support growth, approximately $300$400 million for store renovations and approximately $200 million for new stores. We plan to fund these expenditures through internally generated funds.2016,2019, we purchased $798 million$0.2 billion of investments, compared to $431 million$0.9 billion in fiscal 2015.2018. Additionally, $681 million$0.6 billion of investments were sold or matured during fiscal 20162019 compared to $388 million$0.9 billion in the prior year. The increased investment activity in fiscal 2016 reflects the impact of changing the investments of our Executive Savings Plan. This change in investments resulted in $154 million of assets being liquidated and then reinvested in new investment options. The balance of this activity primarily relates to short-term investments which had initial maturities in excess of 90 days and, per our policy, are not classified as cash on the consolidated balance sheets presented. Finally, investing activities include the initial payment of $57 million for the acquisition of Trade Secret.activities: Cash flows fromActivities$2,176 million$3.1 billion in fiscal 2016, $1,560 million2019, $2.3 billion in fiscal 20152018 and $1,144 million$1.6 billion in fiscal 2014.26.551.8 million shares of its common stock at a cost of $1.8$2.5 billion during fiscal 2016,2019, on a “trade date basis.” TJX reflects stock repurchases in its financial statements on a “settlement date” or cash basis. Under our stock repurchase programs, we spent $1.8$2.4 billion to repurchase 26.650.8 million shares of our stock in fiscal 2016, $1.72019, $1.6 billion to repurchase 27.644.4 million shares of our stock in fiscal 20152018 and $1.5$1.7 billion to repurchase 27.344.6 million shares of our stock in fiscal 2014. See2017.the consolidated financial statements for more information. Consolidated Financial Statements.2016, we announced that2019, our Board of Directors authorizedapproved an additional repurchase program authorizing the repurchase of up to an additional $2.0$1.5 billion of TJX stock. We currently plan to repurchase approximately $1.5$1.75 billion to $2.0$2.25 billion of stock under our stock repurchase programs in fiscal 2017.2020. 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.$0.84$0.78 per share in fiscal 2016, $0.702019, $0.625 per share in fiscal 20152018 and $0.58$0.52 per share in fiscal 2014.2017. Cash payments for dividends on our common stock totaled $544$923 million in fiscal 2016, $4662019, $764 million in fiscal 20152018 and $394$651 million in fiscal 2014.2017. We also received proceeds from the exercise of employee stock options of $132$255 million in fiscal 2016, $1432019, $134 million in fiscal 20152018 and $146$164 million in fiscal 2014.2017. We expect to pay quarterly dividends for fiscal 20172020 of $0.26$0.23 per share, or an annual dividend of $1.04$0.92 per share, subject to the declaration and approval of our Board of Directors. This would represent a 24%an 18% increase over the per share dividends declared and paid forin fiscal 2016.In June 2014,2019.issued $750received net proceeds of $992.5 million aggregate principal amountfrom the issuance of 2.75% seven-year notes generating proceeds, net$1 billion of debt issuance expenses and fees, of $743 million. In July 2014, we used a2.25% ten-year notes. A portion of the proceeds from the 2.75% seven-year noteswere used to redeem our $375 million 6.95% notes prior to their scheduled maturity. The redemption of the $400 million aggregate principal amountnotes, including the prepayment penalty, resulted in cash outflows of 4.20% notes paying $416 million to the note holders for the present value of principal and future remaining interest payments due on the notes. In fiscal 2014, we issued $500 million of 2.50% ten-year notes generating proceeds, net of$426 million.issuance expenses and fees, of $495 million. Seesee Note J – Long-Term Debt and Credit Lines of Notes to the consolidated financial statements for more information.34We 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. Consolidated Financial Statements.January 30, 2016, our cash and cash equivalents held outside the U.S. were $1.2 billion, of which $355.4 million was held in countries where we have the intention to reinvest any undistributed earnings indefinitely. We have provided for deferred U.S. taxes on all undistributed earnings of our subsidiaries in Canada, Puerto Rico, Italy, India and Hong Kong. If we repatriate cash from such subsidiaries, we would not expect to incur additional tax expense, but our cash would be reduced by the amount of taxes paid. For all other foreign subsidiaries, no income taxes have been provided on the undistributed earnings because such earnings are considered to be indefinitely reinvested in the business. We have no current plans to repatriate cash balances held by such foreign subsidiaries. We believe our existing cash and cash equivalents, internally generated funds and our credit facilities are more than adequate to meet our operating needs over the next fiscal year. Our credit facilities were amended subsequent to the fiscal year end and are more fully described in Note J to the consolidated financial statements.Contractual obligations: As of January 30, 2016,February 2, 2019, we had known contractual obligations (including current installments) under long-term debt arrangements (including current installments), other long-term obligations, operating leases for property and equipment and purchase obligations as follows (in thousands): Payments Due by Period Tabular Disclosure of Contractual Obligations Total $ 2,089,437 $ 63,950 $ 136,723 $ 473,313 $ 1,415,451 7,997,821 1,368,050 2,424,060 1,851,037 2,354,674 3,075,339 2,894,674 161,346 19,308 11 $ 13,162,597 $ 4,326,674 $ 2,722,129 $ 2,343,658 $ 3,770,136 In thousands Payments Due by Period Tabular Disclosure of Contractual Obligations Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years $ 2,537,813 $ 55,625 $ 850,938 $ 563,750 $ 1,067,500 9,791,971 1,676,700 3,044,822 2,295,604 2,774,845 3,843,184 3,666,288 155,963 20,933 — Total obligations $ 16,172,968 $ 5,398,613 $ 4,051,723 $ 2,880,287 $ 3,842,345 (1) Includes estimated interest costs and financing lease obligations.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 2016.2019.(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 cancelledcanceled without penalty.$418.2$449.1 million for employee compensation and benefits and $33.4$235.5 million for uncertain tax positions.accounting principles generally accepted in the United States of America (GAAP)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,judgments, to be those relating to the areas described below.valuation:ValuationSTP and Trade Secret.T.K. Maxx in Australia. The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as it has not been fully processed for sale (i.e. inventory in transit and unprocessed inventory in our distribution centers). 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. 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 the35long-lived assets, goodwillLong-lived Assets, Goodwill and tradenames:Tradenames the recoverability of the carrying value of our long-lived assets, goodwill and tradenames for indicators of impairment at least annually andin the fourth quarter of each fiscal year or whenever events or changes in circumstances occur that would indicate that thetheir carrying amounts of those assets aremay not be 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 or tradenames 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. We are required to make economic, demographic and other assumptions regarding variables, such as the discount rate for valuing pension obligations, the long-term rate of return assumed to be earned on pension assets and assumptions about mortality, all of which impact the net periodic pension cost for the period. These assumptions, including the discount rate, which If we determine annually based on market interest rates, and our estimated long-term ratethat an impairment 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. If our discount rate decreased 0.25 percentage points, our fiscal 2016 pension cost for our funded plan would have increased by approximately $8 million. Similarly,goodwill has occurred, we record an increase in the discount of rate of 0.25 percentage points would result in a comparable reduction of pension cost. A change of 0.25 percentage points in our long-term rate of return would increase or decrease our fiscal 2016 pension cost by approximately $3 million. During fiscal 2015, we adjusted our assumptions relating to mortality (the expected lives of our pension participants) in light of new mortality tables issued by the Society of Actuaries which project longer life expectancies. The change in our mortality assumptions added $59 millionimpairment charge equal to the projected benefit obligation for the funded plan as of January 31, 2015 and added approximately $7 million to our fiscal 2016 pension cost. When the discount rate, market performance of our plan assets, changes in laws, regulations, actuarial standards 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 2016, we funded our qualified pension plan with a voluntary contribution of $50 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 faircarrying value of the awards is amortized as “share-based compensation”applicable reporting unit 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. A 5% increasereporting unit, but not in expected volatility would increaseexcess of the per-optioncarrying amount of goodwill. We determine the fair value of our most recent option award by 4% while a decreasebusiness units using the discounted cash flow method which requires assumptions for the weighted average cost of capital (“WACC”) and revenue growth for the same amount would decrease the per-optionrelated business unit. The fair value of our most recent option awardbusiness units exceeds their carrying value by 5%.Casualty insurance: Our casualty insurance program is a self-insured program which requires us to estimate the total claims we would incur as a component of our annual insurance cost. The estimated claims are developed, with the assistance of an actuary, based on historical experience and other factors. These estimates involve significant judgments and assumptions, and actual results could differ from these estimates. If our estimate for the claims component of our casualty insurance for fiscal 2016 were to change by 5%, the fiscal 2016 pre-tax cost would increase or decrease by approximately $4 million. A large portion of these claims is funded with a non-refundable payment during the policy year, offsetting our estimated claims accrual. We had a net accrual of $19.7 million for the unfunded portion of our casualty insurance program as of January 30, 2016.36uncertain tax positions:Uncertain Tax Positionsmade.made, such as the recently enacted 2017 Tax Act. 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.contingencies:ContingenciesSeeAA- Basis of Presentation and Summary of Accounting Policies of Notes to the consolidated financial statementsConsolidated Financial Statements included in this annual report on Form 10-K, for recently issued accounting standards, including the dates of adoption and estimated effects on our results of operations, financial position or cash flows.ITEM 7A.Quantitative and Qualitative Disclosure about Market RiskEE- Financial Instruments of Notes to our consolidated financial statements,Consolidated Financial Statements, we use derivative financial instruments to hedge a portion of certain merchandise purchase commitments, primarily at our international operations, and a portion of our intercompany transactions with and within our international operations. We enter into derivative contracts only for the purpose of hedging the underlying economic exposure. We utilize currency forward and37January 30, 2016February 2, 2019 and January 31, 2015,February 3, 2018, 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 the fiscal year by approximately $69$84 million and $73$78 million, in fiscal years 2019 and 2018, respectively. large portion of which are equity securities, are subject to the risks and uncertainties of the financial markets. We invest the pension assets (described further in Note II- Pension Plans and Other Retirement Benefits of Notes to the consolidated financial statements)Consolidated Financial Statements) 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 required contributions to the plan or other plan-related liabilities. Our pension plan investment policy prohibits the use of derivatives for speculative purposes.ITEM 8.Financial Statements and Supplementary DataF-34F-38 of this annual report on Form 10-K.ITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A.Controls and Procedures20162019 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.38—– —– —– January 30, 2016February 2, 2019 based on criteria established inInternal Control—Integrated Framework 2013issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, management concluded that its internal control over financial reporting was effective as of January 30, 2016.February 2, 2019.January 30, 2016,February 2, 2019, and has issued an attestation report on the effectiveness of our internal control over financial reporting included herein.39January 30, 2016February 2, 2019 (Proxy Statement). The other information required by this Item and not given in this Item will appear under the headings “Election of Directors” and “Corporate Governance,” including in “Board Committees and Meetings,” and “Audit Committee Report” and in “Beneficial Ownership” in “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement, which sections are incorporated herein by reference.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 tjx.com. We intend to disclose any future amendments to, or waivers from, the Code of Ethics for TJX Executives or the Directors 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 SEC.“Executive Compensation,“Compensation Discussion and Analysis,” “Compensation Tables,” “Director Compensation” and “Compensation Program Risk Assessment” in our Proxy Statement, which sections are incorporated herein by reference.40Financial Statement SchedulesIn thousands Balance
Beginning
of Period Amounts
Charged to
Net Income Write-Offs
Against
Reserve
Period $ 35,476 $ 1,497,963 $ 1,491,716 $ 41,723 $ 37,429 $ 1,348,933 $ 1,350,886 $ 35,476 $ 36,618 $ 1,667,466 $ 1,666,655 $ 37,429 $ 14,303 $ 80,738 $ 75,355 $ 19,686 $ 14,696 $ 72,604 $ 72,997 $ 14,303 $ 14,632 $ 71,093 $ 71,029 $ 14,696 41b) ExhibitsIn thousands Balance Beginning of Period Amounts Charged to Net Income Write-Offs Against Reserve Sales Return Reserve: $ 103,243 $ 4,861,960 $ 4,861,703 $ 103,500 $ 43,236 $ 2,073,146 $ 2,071,237 $ 45,145 $ 41,723 $ 1,926,489 $ 1,924,976 $ 43,236 (1) Upon adoption of Revenue Recognition (Topic 606) in the first quarter of fiscal 2019, the sales return reserve balance now reflects the gross sales amount whereas prior years' reflect the sales net of estimated value of merchandise to be returned. (2) During fiscal 2019, the Company identified that while the net sales return reserve balances recorded on our balance sheets and in this schedule for fiscal 2018 and 2017 were properly stated, the amounts disclosed as “Amounts Charged to Net Income” and “Write Offs Against Reserve” were understated by $0.5 billion and $0.4 billion in fiscal 2018 and fiscal 2017, respectively. The Company concluded these errors are not material to prior periods, however, the amounts disclosed in the above schedule have been revised to reflect the correct activity. Incorporate by Reference Exhibit No. Description Form Exhibit No. 3(i).1 3(ii).1 8-K 3.1 2/5/2018 4.01 S-3 4.1 4/2/2009 4.02 8-K 4.2 5/2/2013 4.03 8-K 4.2 6/5/2014 4.04 8-K 4.1 9/12/2016 4.05 8-K 4.2 9/12/2016 10.01 10-Q 10.2 12/4/2018 10.02 10-Q 10.3 12/4/2018 10.03 10.04 10-Q 10.4 12/4/2018 10.05 10.06 10-K 10.4 3/28/2017 10.07 10-K 10.3 4/4/2018 Incorporate by Reference Exhibit No. Description Form Exhibit No. 10.08 10-K 10.4 4/4/2018 10.09 10-Q 10.6 12/4/2018 10.10 10.11 10-K 10.5 4/4/2018 10.12 10-Q 10.5 12/4/2018 10.13 10.14 10-K 10.6 4/4/2018 10.15 10-Q 10.7 12/4/2018 10.16 10.17 10-K 10.7 4/4/2018 10.18 10-Q 10.8 12/4/2018 10.19 10.20 10-Q 10.1 5/31/2013 10.21 10-Q 10.1 8/26/2016 10.22 10-K 10.8 3/28/2017 10.23 10.24 10-Q 10.1 12/4/2018 10.25 10-Q 12.1 12/1/2009 10.26 10-Q 12.2 12/1/2009 10.27 10-Q 10.2 11/24/2010 10.28 10-K 10.19 3/27/2012 10.29 10-Q 10.1 11/29/2012 10.30 10-Q 10.2 11/29/2012 10.31 10-Q 10.1 12/3/2013 10.32 10-Q 10.2 12/3/2013 10.33 10-Q 10.4 12/2/2014 10.34 10-Q 10.5 12/2/2014 10.35 10-Q 10.1 12/1/2015 10.36 10-Q 10.2 12/1/2015 10.37 10-Q 10.1 5/27/2016 10.38 10-Q 10.1 5/26/2017 Incorporate by Reference Exhibit No. Description Form Exhibit No. 10.39 10-K 10.18 3/29/2016 10.40 10-K 10.19 3/29/2016 10.41 10-Q 10.1 6/1/2018 10.42 10-Q 10.2 6/1/2018 10.43 10-K 10.20 3/31/2015 10.44 10-Q 10.2 8/26/2016 10.45 10.46 10-K 10.22 4/2/2013 10.47 10-K 10.9 4/29/1999 10.48 10-K 10.10 4/28/2000 10.49 10-K 10.17 3/29/2006 10.50 10-K 10.17 3/31/2009 10.51 10-Q 10.3 5/29/2015 10.52 10-K 10.25 3/31/2015 10.53 10-K 10.25 3/29/2016 10.54 The Form of TJX Indemnification Agreement for its executive officers and directors*(p) 10-K 10(r) 4/27/1990 10.55 The Trust Agreement dated as of April 8, 1988 between TJX and State Street Bank and Trust Company*(p) 10-K 10(y) 4/28/1988 10.56 The Trust Agreement dated as of April 8, 1988 between TJX and Fleet Bank (formerly Shawmut Bank of Boston, N.A.)*(p) 10-K 10(z) 4/28/1988 10.57 10-Q 10.5 10/31/2015 21 23 24 31.1 31.2 32.1 32.2 101 The following materials from The TJX Companies, Inc.’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019, 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 ExhibitNo.Description of Exhibit3(i).1Fourth Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 99.1 to the Form 8-A/A filed September 9, 1999. Certificate of Amendment of Fourth Restated Certificate of Incorporation is incorporated herein by reference to Exhibit 3(i) to the Form 10-Q filed for the quarter ended July 28, 2005.3(ii).1By-laws of TJX, as amended, are incorporated herein by reference to Exhibit 3.1 to the Form 8-K filed on September 22, 2009.4.1Indenture between TJX and U.S. Bank National Association dated as of April 2, 2009 is incorporated herein by reference to Exhibit 4.1 of the Registration Statement on Form S-3 filed on April 2, 2009 (File 333-158360).4.2First Supplemental Indenture between TJX and U.S. Bank National Association dated as of April 7, 2009 is incorporated herein by reference to Exhibit 4.1 to the Form 8-K filed on April 7, 2009.4.3Second Supplemental Indenture between TJX and U.S. Bank National Association dated as of July 23, 2009 is incorporated herein by reference to Exhibit 4.1 to the Form 8-K filed on July 23, 2009.4.4Third Supplemental Indenture dated as of May 2, 2013 by and between The TJX Companies, Inc. and U.S. Bank National Association, as Trustee, including the form of Global Note attached as Annex A thereto, is incorporated herein by reference to Exhibit 4.2 to the Form 8-K filed on May 2, 2013.4.5Fourth Supplemental Indenture dated as of June 5, 2014 by and between The TJX Companies, Inc. and U.S. Bank National Association, as Trustee, including the form of Global Note attached as Annex A thereto, is incorporated herein by reference to Exhibit 4.2 to the Form 8-K filed on June 5, 2014.10.1The Amended and Restated Employment Agreement dated January 29, 2016 between Carol Meyrowitz and TJX is filed herewith.*10.2The Amended and Restated Employment Agreement dated January 29, 2016 between Ernie Herrman and TJX is filed herewith.*10.3The Employment Agreement dated January 31, 2014 between and among Michael MacMillan, NBC Attire, Inc. and TJX is incorporated herein by reference to Exhibit 10.5 to the Form 10-K filed for the year ended February 1, 2014. The Letter Agreement dated March 30, 2015 between and among Michael MacMillan, NBC Attire, Inc. and TJX is incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended May 2, 2015.*10.4The Employment Agreement dated January 30, 2015 between Richard Sherr and TJX is incorporated herein by reference to Exhibit 10.7 to the Form 10-K filed for the fiscal year ended January 31, 2015.*10.5The Employment Agreement dated January 30, 2015 between Scott Goldenberg and TJX is incorporated herein by reference to Exhibit 10.8 to the Form 10-K filed for the fiscal year ended January 31, 2015.*10.6The Employment Agreement dated as of September 29, 2014 between Kenneth Canestrari and TJX is incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed for the quarter ended November 1, 2014.*10.7The Stock Incentive Plan (2013 Restatement) is incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended May 4, 2013.*10.8The 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 ended July 31, 2010.*10.9The 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.*Paper filing.4210.10The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of September 17, 2009 is incorporated herein by reference to Exhibit 12.1 to the Form 10-Q filed for the quarter ended October 31, 2009. The Form of Non-Qualified Stock Option Terms and Conditions granted under the Stock Incentive Plan as of September 17, 2009 is incorporated herein by reference to Exhibit 12.2 to the Form 10-Q filed for the quarter ended October 31, 2009.*10.11The 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.*10.12The 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.*10.13The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of September 19, 2013 is incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended November 2, 2013. The Form of Non-Qualified Stock Option Terms and Conditions granted under the Stock Incentive Plan as of September 19, 2013 is incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended November 2, 2013.*10.14The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of September 10, 2014 is incorporated herein by reference to Exhibit 10.4 to the Form 10-Q filed for the quarter ended November 1, 2014. The Form of Non-Qualified Stock Option Terms and Conditions granted under the Stock Incentive Plan as of September 10, 2014 is incorporated herein by reference to Exhibit 10.5 to the Form 10-Q filed for the quarter ended November 1, 2014.*10.15The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of September 17, 2015 is incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended October 31, 2015. The Form of Non-Qualified Stock Option Terms and Conditions granted under the Stock Incentive Plan as of September 17, 2015 is incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended October 31, 2015.*10.16The Form of Performance-Based Restricted Stock Award granted under the Stock Incentive Plan as of February 1, 2013 is incorporated herein by reference to Exhibit 10.16 to the Form 10-K filed for the year ended February 2, 2013. The Form of Performance-Based Restricted Stock Award granted under the Stock Incentive Plan as of September 19, 2013 is incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed for the quarter ended November 2, 2013.*10.17The Form of Performance-Based Deferred Stock Award granted under the Stock Incentive Plan as of April 2, 2013 is incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended May 4, 2013.*10.18The Performance-Based Restricted Stock Award granted under the Stock Incentive Plan on January 29, 2016 to Carol Meyrowitz is filed herewith.*10.19The Restricted Stock Unit Award granted under the Stock Incentive Plan on January 29, 2016 to Ernie Herrman is filed herewith.*10.20The Form of Deferred Stock Award for Directors granted under the Stock Incentive Plan is incorporated herein by reference to Exhibit 10.20 to the Form 10-K filed for the fiscal year ended January 31, 2015.*10.21Description of Director Compensation Arrangements is filed herewith.*10.22The Management Incentive Plan and Long Range Performance Incentive Plan (2013 Restatement) is incorporated herein by reference to Exhibit 10.22 to the Form 10-K filed for the year ended February 2, 2013.*4310.23The 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 theForm 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 for the fiscal year ended January 31, 2009.*10.24The Supplemental Executive Retirement Plan (2015 Restatement) is incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed for the quarter ended May 2, 2015.*10.25The Executive Savings Plan (As Amended and Restated, Effective January 1, 2015) (the ESP) is incorporated herein by reference to Exhibit 10.25 to the Form 10-K filed for the fiscal year ended January 31, 2015. The First Amendment to the ESP, dated December 30, 2015, is filed herewith.*10.26The Canadian Executive Savings Plan (effective November 1, 1999) of Winners Merchants International, LP (successor to Winners Apparel Ltd.) is incorporated herein by reference to Exhibit 10.26 to the Form 10-K filed for the fiscal year ended February 2, 2013.*10.27The 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.*10.28The Trust Agreement dated as of April 8, 1988 between TJX and State Street Bank and Trust Company is incorporated herein by reference to Exhibit 10(y) to the Form 10-K filed for the fiscal year ended January 30, 1988.*10.29The Trust Agreement dated as of April 8, 1988 between TJX and Fleet Bank (formerly Shawmut Bank of Boston, N.A.) is incorporated herein by reference to Exhibit 10(z) to the Form 10-K filed for the fiscal year ended January 30, 1988.*10.30The Trust Agreement for Executive Savings Plan dated as of October 23, 2015 between TJX and Vanguard Fiduciary Trust Company is incorporated herein by reference to Exhibit 10.5 to the Form 10-Q filed for the quarter ended October 31, 2015.*21Subsidiaries of TJX is filed herewith.23Consent of Independent Registered Public Accounting Firm is filed herewith.24Power of Attorney given by the Directors and certain Executive Officers of TJX is filed herewith.31.1Certification Statement of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is filed herewith.31.2Certification Statement of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is filed herewith.32.1Certification Statement of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith.32.2Certification Statement of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith.101 The following materials from The TJX Companies, Inc.’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016, 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.44 THE TJX COMPANIES, INC. By /s/ SCOTT GOLDENBERG Dated: March 29, 2016April 3, 2019 Scott Goldenberg, Chief Financial Officer /s/ SCOTT GOLDENBERG Ernie Herrman, Chief Executive Officer, President and Director (Principal (Principal Executive Officer) /s/ SCOTT GOLDENBERGAMY B. LANE* Zein Abdalla, Director AMY B. LANE*JOSE B. ALVAREZ*José B. Alvarez, Director ALAN M. BENNETT* CAROL MEYROWITZ* Alan M. Bennett, Director Carol Meyrowitz, Executive Chairman of the Board of Directors ALAN M. BENNETT*Alan M. Bennett, Director ROSEMARY T. BERKERY* JACKWYN L. NEMEROV* Rosemary T. Berkery, Director Jackwyn L. Nemerov, Director DAVID T. CHING* JOHN F. O’BRIEN* David T. Ching, Director John F. O’Brien, Director DAVID T. CHING*David T. Ching, Director MICHAEL F. HINES* WILLOW B. SHIRE* Michael F. Hines, Director Willow B. Shire, Director MICHAEL F. HINES*Michael F. Hines, DirectorWILLIAM H. SWANSON*William H. Swanson, Director *BY /s/ SCOTT GOLDENBERG Dated: March 29, 2016April 3, 2019 4530, 2016, January 31, 2015 and February 1, 2014.28, 2017.F-2Consolidated Financial Statements: Consolidated Financial Statements:F-3F-4F-5F-6F-7F-8Financial Statement Schedules: Financial Statement Schedules:F-1Thethe Board of Directors and Shareholders of The TJX Companies, Inc:In our opinion,Inc.:consolidated financial statements listed inFinancial Statements and Internal Control over Financial Reportingindex present fairly, in all material respects, the financial positionconsolidated balance sheets of The TJX Companies, Inc. and its subsidiaries (the “Company”) at January 30, 2016as of February 2, 2019 and January 31, 2015,February 3, 2018, and the resultsrelated consolidated statements of their operationsincome, comprehensive income, shareholders’ equity and their cash flows for each of the three years in the period ended January 30, 2016,February 2, 2019, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended February 2, 2019 appearing under Item 15 (a) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of February 2, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 30, 2016,February 2, 2019, based on criteria established inInternal Control—Control - Integrated Framework 2013 (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO. 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 thesethe Company’s consolidated financial statements on the financial statement schedule, and on the Company’s internal control over financial reporting based on our integrated audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Public Company Accounting Oversight Board (United States).supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, andas well as evaluating the overall presentation of the consolidated financial statement presentation.statements. 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.As discussed in Note K to the consolidated financial statements, the Company changed the manner in which it accounts for the classificationdeferred taxes in the consolidated balance sheets due to the adoption of ASU 2015-17, Balance Sheet Classification of Deferred Taxes.March 29, 2016F-2 Fiscal Year Ended $ 30,944,938 $ 29,078,407 $ 27,422,696 22,034,523 20,776,522 19,605,037 5,205,715 4,695,384 4,467,089 — 16,830 — 46,400 39,787 31,081 3,658,300 3,549,884 3,319,489 1,380,642 1,334,756 1,182,093 $ 2,277,658 $ 2,215,128 $ 2,137,396 $ 3.38 $ 3.20 $ 3.00 673,484 692,691 713,470 $ 3.33 $ 3.15 $ 2.94 683,251 703,545 726,376 $ 0.84 $ 0.70 $ 0.58 Fiscal Year Ended Amounts in thousands except per share amounts February 2
2019February 3
2018January 28
2017 (53 weeks) Net sales $ 38,972,934 $ 35,864,664 $ 33,183,744 Cost of sales, including buying and occupancy costs 27,831,177 25,502,167 23,565,754 Selling, general and administrative expenses 6,923,564 6,375,071 5,768,467 Impairment of goodwill and other long-lived assets, related to Sierra — 99,250 — Loss on early extinguishment of debt — — 51,773 Pension settlement charge 36,122 — 31,173 Interest expense, net 8,860 31,588 43,534 Income before provision for income taxes 4,173,211 3,856,588 3,723,043 Provision for income taxes 1,113,413 1,248,640 1,424,809 Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Basic earnings per share: Net income $ 2.47 $ 2.05 $ 1.75 Weighted average common shares – basic 1,241,153 1,273,654 1,311,294 Diluted earnings per share: Net income $ 2.43 $ 2.02 $ 1.73 Weighted average common shares – diluted 1,259,252 1,292,209 1,328,864 F-3 Fiscal Year Ended Amounts in thousands $ 2,277,658 $ 2,215,128 $ 2,137,396 (143,923 ) (218,700 ) (57,926 ) — (4,762 ) — 9,629 (139,366 ) 55,285 684 �� 452 — 20,523 7,523 16,501 (113,087 ) (354,853 ) 13,860 $ 2,164,571 $ 1,860,275 $ 2,151,256 Fiscal Year Ended In thousands February 2
2019February 3
2018January 28
2017 (53 weeks) Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Additions to other comprehensive income: Foreign currency translation adjustments, net of related tax benefit of $8,233 in fiscal 2019, and provisions of $36,929 and $25,656 in fiscal 2018 and fiscal 2017, respectively (192,664 ) 211,752 (52,611 ) Gain on net investment hedges, net of related tax provision of $7,113 in fiscal 2019 19,538 — — Recognition of net gains/losses on benefit obligations, net of related tax benefit of $19,813 in fiscal 2019, provision of $8,989 in fiscal 2018 and benefit of $7,394 in fiscal 2017 (54,420 ) 24,691 (11,239 ) Reclassifications from other comprehensive income to net income: Pension settlement charge, net of related tax provision of $9,641 in fiscal 2019 and $12,369 in fiscal 2017 26,481 — 18,804 Amortization of loss on cash flow hedge, net of related tax provisions of $304, $438 and $450 in fiscal 2019, 2018 and 2017, respectively 847 696 684 Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $4,280, $9,592, and $11,584 in fiscal 2019, 2018 and 2017, respectively 11,756 15,228 17,608 Other comprehensive (loss) income, net of tax (188,462 ) 252,367 (26,754 ) Total comprehensive income $ 2,871,336 $ 2,860,315 $ 2,271,480 F-4 Fiscal Year Ended January 30,
2016 January 31,
2015 $ 2,095,473 $ 2,493,775 352,313 282,623 238,072 213,824 3,695,113 3,217,923 380,530 356,824 11,059 12,475 6,772,560 6,577,444 1,013,247 888,580 2,943,191 2,780,932 5,112,229 4,671,029 9,068,667 8,340,541 4,931,092 4,472,176 4,137,575 3,868,365 13,831 22,532 231,720 210,539 343,796 309,870 $ 11,499,482 $ 10,988,750 $ 2,203,050 $ 2,007,511 2,069,659 1,796,122 129,521 126,001 4,402,230 3,929,634 881,021 888,137 285,102 282,885 1,624,054 1,623,864 — — 663,496 684,733 — — (667,472 ) (554,385 ) 4,311,051 4,133,882 4,307,075 4,264,230 $ 11,499,482 $ 10,988,750 Fiscal Year Ended Amounts in thousands except share amounts February 2,
2019February 3,
2018ASSETS Current assets: Cash and cash equivalents $ 3,030,229 $ 2,758,477 Short-term investments — 506,165 Accounts receivable, net 346,298 327,166 Merchandise inventories 4,579,033 4,187,243 Prepaid expenses and other current assets 513,662 706,676 Total current assets 8,469,222 8,485,727 Net property at cost 5,255,208 5,006,053 Non-current deferred income taxes, net 6,467 6,558 Goodwill 97,552 100,069 Other assets 497,580 459,608 TOTAL ASSETS $ 14,326,029 $ 14,058,015 LIABILITIES Current liabilities: Accounts payable $ 2,644,143 $ 2,488,373 Accrued expenses and other current liabilities 2,733,076 2,522,961 Federal, state and foreign income taxes payable 154,155 114,203 Total current liabilities 5,531,374 5,125,537 Other long-term liabilities 1,354,242 1,320,505 Non-current deferred income taxes, net 158,191 233,057 Long-term debt 2,233,616 2,230,607 Commitments and contingencies (See Note L and Note N) SHAREHOLDERS’ EQUITY Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued — — Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,217,182,508 and 1,256,018,044, respectively 1,217,183 1,256,018 Additional paid-in capital — — Accumulated other comprehensive (loss) income (630,321 ) (441,859 ) Retained earnings 4,461,744 4,334,150 Total shareholders’ equity 5,048,606 5,148,309 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 14,326,029 $ 14,058,015 F-5 Fiscal Year Ended Amounts in thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 2,277,658 $ 2,215,128 $ 2,137,396 616,696 588,975 548,823 3,383 3,897 7,914 31,204 102,070 52,233 94,107 88,014 76,080 — 16,830 — (64,680 ) (95,063 ) (82,546 ) (27,357 ) (9,052 ) 11,979 (506,633 ) (332,271 ) 35,233 1,416 (12,475 ) — (41,519 ) 3,719 (3,354 ) 216,265 285,223 (152,271 ) 284,929 20,800 (29,590 ) 68,014 144,977 10,994 (16,140 ) (12,403 ) (12,425 ) 2,937,343 3,008,369 2,600,466 (889,380 ) (911,522 ) (946,678 ) (798,008 ) (431,152 ) (496,657 ) 681,377 388,037 394,914 (57,104 ) — — — — 2,653 (1,063,115 ) (954,637 ) (1,045,768 ) — 749,475 499,555 — (416,357 ) — — (6,185 ) (4,297 ) — (7,937 ) (3,251 ) (1,828,297 ) (1,650,704 ) (1,471,096 ) 132,033 143,005 146,495 64,680 95,063 82,546 (544,271 ) (465,902 ) (393,755 ) (2,175,855 ) (1,559,542 ) (1,143,803 ) (96,675 ) (150,161 ) (73,106 ) (398,302 ) 344,029 337,789 2,493,775 2,149,746 1,811,957 $ 2,095,473 $ 2,493,775 $ 2,149,746 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Cash flows from operating activities: Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 819,655 725,957 658,796 Loss on property disposals and impairment charges 17,653 8,871 5,207 Deferred income tax (benefit) (88,594 ) (137,440 ) (5,503 ) Share-based compensation 103,557 101,362 102,251 Impairment of goodwill and long-lived assets, related to Sierra — 99,250 — Loss on early extinguishment of debt — — 51,773 Pension settlement charge 36,122 — 31,173 Excess tax benefits from share-based compensation — — (70,999 ) Changes in assets and liabilities: (Increase) in accounts receivable (23,532 ) (62,358 ) (23,235 ) (Increase) decrease in merchandise inventories (465,429 ) (450,377 ) 11,862 Decrease (increase) in prepaid expenses and other current assets 236,342 (317,850 ) (9,600 ) Increase in accounts payable 198,212 205,111 48,253 Increase in accrued expenses and other liabilities 169,418 334,522 389,399 Increase (decrease) in income taxes payable 40,965 (94,492 ) 146,766 Other (15,708 ) 5,120 (7,518 ) Net cash provided by operating activities 4,088,459 3,025,624 3,626,859 Cash flows from investing activities: Property additions (1,125,139 ) (1,057,617 ) (1,024,747 ) Purchases of investments (161,625 ) (861,256 ) (716,953 ) Sales and maturities of investments 636,560 906,137 529,146 Other 26,652 — (2,324 ) Net cash (used in) investing activities (623,552 ) (1,012,736 ) (1,214,878 ) Cash flows from financing activities: Proceeds from issuance of long-term debt — — 992,540 Cash payments for extinguishment of debt — — (425,584 ) Cash payments for debt issuance expenses — — (9,921 ) Cash payments on build to suit leases (7,115 ) (3,138 ) — Cash payments for rate lock agreement — — (3,150 ) Cash payments for repurchase of common stock (2,406,997 ) (1,644,581 ) (1,699,998 ) Proceeds from issuance of common stock 255,241 133,687 164,190 Cash payments of employee tax withholdings for performance based stock awards (16,014 ) (19,274 ) (24,965 ) Excess tax benefits from share-based compensation — — 70,999 Cash dividends paid (922,596 ) (764,040 ) (650,988 ) Net cash (used in) financing activities (3,097,481 ) (2,297,346 ) (1,586,877 ) Effect of exchange rate changes on cash (95,674 ) 113,086 9,272 Net increase (decrease) in cash and cash equivalents 271,752 (171,372 ) 834,376 Cash and cash equivalents at beginning of year 2,758,477 2,929,849 2,095,473 Cash and cash equivalents at end of year $ 3,030,229 $ 2,758,477 $ 2,929,849 F-6 Common Stock
Capital
Other
Comprehensive
Income (Loss)
Earnings Amounts in thousands Shares Par Value
$1 723,902 $ 723,902 $ — $ (213,392 ) $ 3,155,427 $ 3,665,937 — — — — 2,137,396 2,137,396 — — — 13,860 — 13,860 — — — — (413,134 ) (413,134 ) — — 76,080 — — 76,080 8,462 8,462 212,388 — — 220,850 (27,347 ) (27,347 ) (288,468 ) — (1,155,281 ) (1,471,096 ) 705,017 705,017 — (199,532 ) 3,724,408 4,229,893 — — — — 2,215,128 2,215,128 — — — (354,853 ) — (354,853 ) — — — — (483,280 ) (483,280 ) — — 88,014 — — 88,014 7,318 7,318 212,714 — — 220,032 (27,602 ) (27,602 ) (300,728 ) — (1,322,374 ) (1,650,704 ) 684,733 684,733 — (554,385 ) 4,133,882 4,264,230 — — — — 2,277,658 2,277,658 — — — (113,087 ) — (113,087 ) — — — — (564,586 ) (564,586 ) — — 94,107 — — 94,107 5,317 5,317 171,733 — — 177,050 (26,554 ) (26,554 ) (265,840 ) — (1,535,903 ) (1,828,297 ) 663,496 $ 663,496 $ — $ (667,472 ) $ 4,311,051 $ 4,307,075 Common Stock Total In thousands Shares Balance, January 30, 2016 1,326,992 $ 1,326,992 $ — $ (667,472 ) $ 3,647,555 $ 4,307,075 Net income — — — — 2,298,234 2,298,234 Other comprehensive (loss), net of tax — — — (26,754 ) — (26,754 ) Cash dividends declared on common stock — — — — (680,183 ) (680,183 ) Recognition of share-based compensation — — 102,251 — — 102,251 Issuance of common stock under stock incentive plan and related tax effect 10,202 10,202 204,873 — (5,101 ) 209,974 Common stock repurchased (44,556 ) (44,556 ) (307,124 ) — (1,348,318 ) (1,699,998 ) Balance, January 28, 2017 1,292,638 1,292,638 — (694,226 ) 3,912,187 4,510,599 Net income — — — — 2,607,948 2,607,948 Other comprehensive income, net of tax — — — 252,367 — 252,367 Cash dividends declared on common stock — — — — (793,878 ) (793,878 ) Recognition of share-based compensation — — 101,362 — — 101,362 Issuance of common stock under stock incentive plan and related tax effect 7,790 7,790 110,597 — (3,895 ) 114,492 Common stock repurchased (44,410 ) (44,410 ) (211,959 ) — (1,388,212 ) (1,644,581 ) Balance, February 3, 2018 1,256,018 1,256,018 — (441,859 ) 4,334,150 5,148,309 Net income — — — — 3,059,798 3,059,798 Cumulative effect of accounting change (See Note A) — — — — 58,712 58,712 Other comprehensive (loss), net of tax — — — (188,462 ) — (188,462 ) Cash dividends declared on common stock — — — — (965,539 ) (965,539 ) Recognition of share-based compensation — — 103,557 — — 103,557 Issuance of common stock under stock incentive plan and related tax effect 11,988 11,988 227,240 — — 239,228 Common stock repurchased (50,823 ) (50,823 ) (330,797 ) — (2,025,377 ) (2,406,997 ) Balance, February 2, 2019 1,217,183 $ 1,217,183 $ — $ (630,321 ) 4,461,744 $ 5,048,606 F-7Presentation:Presentationconsolidated financial statementsConsolidated Financial Statements and Notes thereto of The TJX Companies, Inc. (referred to as “TJX,” “we” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and 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.Year:Yearyearsyear ended January 30, 2016 (fiscal 2016), January 31, 2015 (fiscal 2015)February 2, 2019 (“fiscal 2019”) was a 52-week fiscal year. Fiscal 2018 was a 53-week year and February 1, 2014 (fiscal 2014) each included 52 weeks.Earnings Per Share: All earnings per share amounts refer to diluted earnings per share, unless otherwise indicated.Estimates: PreparationEstimatesthe TJX Companies, Inc.TJX’s financial statements, in conformity with accounting principles generally accepted in the United States of America (GAAP),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, impairmentsimpairment of long-lived assets, goodwill and tradenames, retirement obligations, share-based compensation, casualty insurance, reserves for uncertain tax positions 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.Recognition:Recognitionrecordsadopted Revenue from Contracts with Customers (referred to as “ASC 606”), on February 4, 2018 (“the adoption date”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. TJX adopted the new guidance under the modified retrospective approach which resulted in a $59 million cumulative adjustment to increase retained earnings. The cumulative adjustment primarily related to revenue recognized on the value of unredeemed rewards certificates issued to customers as part of the Company’s U.S. co-branded credit card loyalty program. We now recognize the estimated unredeemed awards when they are earned, rather than when merchandise credits expire or when the likelihood of redemption becomes remote. In addition, online sales are now recognized at the timeshipping point rather than receipt by the customer. Other changes relate to the presentation of revenue as certain expenses previously presented as a reduction of revenue are now classified as selling, general and administrative expenses (“SG&A”). The new standard required a change in the presentation of our sales return reserve on the balance sheet, which we previously recorded net of the value of returned merchandise and now is presented at gross sales value with an asset established for the value of the merchandise returned. There was no change in the timing or amount of revenue recognized under the new standard as it related to revenue from point of sale at the registers in our stores, which constitutes more than 98% of our revenue. Financial results for fiscal periods after the adoption date are presented under ASC 606 while results from prior periods are not adjusted and receiptcontinue to be reported under the accounting standards in effect for the prior period. We applied ASC 606 only to contracts that were not completed prior to fiscal 2019.by the customer,sales, which are recorded net of a reserve for estimated returns. We estimate returns, based uponany discounts and sales taxes, for the sales of merchandise both within our historical experience. We defer recognitionstores and online. Net sales also include an immaterial amount of a layawayother revenues that represent less than 1.0% of total revenues, primarily generated from TJX’s co-branded loyalty rewards credit card program offered in the United States only. In addition, certain customers may receive discounts that are accounted for as consideration reducing the transaction price. Merchandise sales from our stores are recognized at the point of sale and its related profitwhen TJX provides the merchandise to the accounting periodcustomer. The performance obligation is fulfilled at this point when the customer receiveshas obtained control by paying for and leaving with the layaway merchandise. Merchandise sales made online are recognized when the product has been shipped, which is when legal title has passed and when TJX is entitled to payment, and the customer has obtained the ability to direct the use of and obtain substantially all of the remaining benefits from the goods. Shipping and handling activities related to online sales occur after the customer obtains control of the goods. TJX’s policy is to treat shipping costs as part of our fulfillment center costs within our operating expenditures. As a result, shipping fee revenues received is recognized when control of the goods transfer to the customer and is recorded as net sales. Shipping and handling costs incurred by TJX are included in cost of sales, including buying and occupancy costs. TJX disaggregates revenue by operating segment, see Note G—Segment Information of Notes to Consolidated Financial Statements.merchandise.merchandise, as TJX does not fulfill its performance obligation until the gift card has been redeemed. While gift cards have an indefinite life, substantially all are redeemed in the first year of issuance. Fiscal Period In thousands February 2,
2019Balance, February 3, 2018 $ 406,506 Deferred revenue 1,677,251 Effect of exchange rates changes on deferred revenue (6,279 ) Revenue recognized (1,627,176 ) Balance, February 2, 2019 $ 450,302 $13.8$20.6 million in fiscal 2016, $17.82019, $21.1 million in fiscal 20152018 and $17.5$20.5 million in fiscal 2014.2017.date of receipt byvariable consideration using the customerexpected value method when recognizing revenue from sales by our e-commerce operations and shipping and handling costs chargedcalculating the returns reserve because the difference in applying it to the customerindividual contract would not differ materially. Returns are estimated based on historical experience and are required to be established and presented at the gross sales value with an asset established for the estimated value of the merchandise returned separate from the refund liability. Liabilities for return allowances are included in revenue. The shipping“Accrued expenses and handling costs incurred by TJX areother current liabilities” and the estimated value of the merchandise to be returned is included in cost of sales, including buying“Prepaid expenses and occupancy costs.Classifications:Classificationsstoreasset retirement obligation costs; divisional 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.Equivalents:EquivalentsJanuary 30, 2016,February 2, 2019, TJX’s cash and cash equivalents held outside the U.S. were $1.2 billion, of which $355.4$420.6 million was held in countries where TJX has the intention to reinvest any undistributed earnings indefinitely.F-8:Sierra Trading Post (STP), and Trade Secret.T.K. Maxx in Australia. The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as itthat inventory has not been fully processed for sale (e.g. inventory in transit and unprocessed inventory in our distribution centers). Under the retail method, 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 forrecords inventory obligations at the time title transfers, which is typically at the time when inventory is shipped. As a result, merchandise inventories on TJX’s balance sheet include an accrual for in-transit inventory of $690.3$832.1 million at January 30, 2016February 2, 2019 and $495.2$755.4 million at January 31, 2015.February 3, 2018. Comparable amounts were reflected in accounts payable at those dates.Equity:Equity(APIC)(“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.AnyPrior to fiscal 2018, any tax benefits greater than the deferred tax assets created at the time of expensing the options arewere credited to APIC; any deficiencies in the tax benefits arewere debited to APIC to the extent a pool for such deficiencies exists.existed. In the absence of a pool, any deficiencies arewere realized in the related periods’ statements of income through the provision for income taxes. AnyBeginning in fiscal 2018, upon adoption of ASU 2016-9-Compensation-Stock compensation (Topic 718): Improvements to employee share-based payment accounting, any excess income tax benefits or deficiencies are included in cash flows from financing activities in the statements of cash flows.provision for income taxes. The par value of performance-based deferred stock awards, performance share units and restricted stock units is added to common stock when shares are delivered following vesting. The par value of performance-based 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 and units in excess of any par value is added to APIC as the awards are amortized into earnings over the related requisite service periods.Compensation:Compensationperformance-based restricted stock awards. See Note H – Stock Incentive Plan of Notes to Consolidated Financial Statements for a detailed discussion of share-based compensation.:net interest expense: Fiscal Year Ended Dollars in thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 68,253 $ 64,783 $ 57,084 (7,984 ) (9,403 ) (10,993) (13,869 ) (15,593 ) (15,010) $ 46,400 $ 39,787 $ 31,081 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Interest expense $ 69,102 $ 69,237 $ 69,219 Capitalized interest (4,263 ) (4,942 ) (7,548 ) Interest (income) (55,979 ) (32,707 ) (18,137 ) Interest expense, net $ 8,860 $ 31,588 $ 43,534 2016, 20152019, 2018 and 20142017 relates to costs on active owned real estate projects and development costs on a merchandising system.Amortization:Amortization$622.0$818.9 million in fiscal 2016, $595.62019, $727.2 million in fiscal 20152018 and $555.8$664.5 million in fiscal 2014.2017. TJX had no property held under capital leaseleases during fiscal 2016, 2015,2019, 2018, orF-92014. 2017. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for internally developed software are capitalized and amortized over 3 to 155 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.Accounting: TJX begins to recordAccountingit takeswe take 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 As disclosed in “Future Adoption of TJX’s long-lived assets by geographic location is presented below: Fiscal Year Ended Dollars in thousands $ 3,101,846 $ 2,927,297 $ 2,693,670 242,705 266,332 214,459 782,970 674,736 686,372 10,054 — — $ 4,137,575 $ 3,868,365 $ 3,594,501 Tradenames:Tradenames(See Note B).which was re-branded under the T.K. Maxx name during fiscal 2018. The following is a rollforwardroll forward of goodwill by component:Amounts in thousands Marmaxx Winners Sierra
Trading
Post Trade
Secret Total $ 70,027 $ 2,226 $ 98,035 $ — $ 170,288 — — (781 ) — (781 ) — (234 ) — — (234 ) 70,027 1,992 97,254 — 169,273 — (251 ) — — (251 ) 70,027 1,741 97,254 — 169,022 — — — 25,233 25,233 — (154 ) — (190 ) (344 ) $ 70,027 $ 1,587 $ 97,254 $ 25,043 $ 193,911 In thousands Marmaxx Winners Sierra Total Balance, January 28, 2017 70,027 1,686 97,254 26,904 195,871 Impairment — — (97,254 ) — (97,254 ) Effect of exchange rate changes on goodwill — 98 — 1,354 1,452 Balance, February 3, 2018 70,027 1,784 — 28,258 100,069 Effect of exchange rate changes on goodwill (92 ) (2,425 ) (2,517 ) Balance, February 2, 2019 $ 70,027 $ 1,692 $ — $ 25,833 $ 97,552 F-10carried at a value of $107.7 million and is considered to have an indefinite life.life and accordingly is not amortized. The Sierra Trading Post tradename is being amortized over 15 years and was carried at a value of $30.6 million in fiscal 2016, $33.2 million in fiscal 2015 and $35.7 million in fiscal 2014 net of amortization of $7.9 million, $5.3 million and $2.8 million in fiscal 2016, fiscal 2015 and fiscal 2014, respectively.years. The Trade Secret tradename is being amortized over 10 years and was carried at7 years. The following is a valueroll forward of $11.6 million in fiscal 2016 net of amortization of $300,000. Fiscal Year Ended February 2, 2019 February 3, 2018 In thousands Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value Definite-lived intangible assets Sierra Trading Post $ 38,500 $ (15,614 ) $ — $ 22,886 $ 38,500 $ (13,029 ) $ — $ 25,471 Trade Secret $ 12,541 $ (4,117 ) $ (1,048 ) $ 7,376 $ 12,541 $ (2,899 ) $ 2,072 $ 11,714 Indefinite-lived intangible asset Marshalls $ 107,695 $ — $ — $ 107,695 $ 107,695 $ — $ — $ 107,695 Tradenames:Tradenamesrecoverable, 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.which is generally at the individual store level.level for fixed assets and the reporting unit for tradenames that are amortized. If indicators of impairment are identified, an undiscounted cash flow analysis is performed to determine if the carrying value of the asset or asset group is recoverable. If the cash flow is less than the carrying value then an impairment exists.charge will be recorded to the extent the fair value of an asset or asset group is less than the carrying value of that asset or asset group. This analysis resulted in immaterial impairment charges of store fixed assets in fiscal 2019 and fiscal 2018. The store-by-store evaluations did not indicate any recoverability issues in each of the past three fiscal years.isand tradenames with an indefinite life are 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,year. The carrying value of tradenames with an indefinite life is compared to its fair value determined by calculating the discounted present value of assumed after-tax royalty payments to the carrying value of the tradename. There was no impairment related to tradenames in fiscal 2019, 2018 or 2017. Goodwill is tested for impairment by 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. In fiscal 20162019 and fiscal 2015,2018, we bypassed the qualitative assessment and performed the first step of the quantitative goodwill impairment test.Tradenames are also tested In fiscal 2018 the Company recorded an impairment charge of impairment whenever events or changes in circumstances indicate thatSierra goodwill as the carrying amount of the tradename may exceed itsestimated 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 tothis business fell below the carrying value of the tradename.waswere no impairmentimpairments related to our goodwill or tradenames in fiscal 2016, 20152019 or 2014.Costs:Costs$382.9$446.3 million for fiscal 2016, $371.32019, $412.4 million for fiscal 20152018 and $333.5$402.6 million for fiscal 2014.Translation:Translationincome (loss). income. 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.Contingencies:ContingenciesF-11Standards: In May 2014, a pronouncement was issued that creates common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenueStandardsdepict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard was originally scheduled to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In April 2015,time, the Financial Accounting Standards Board proposed(“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an update to this rule which would defer its effective date for one year. The proposed update stipulatesAccounting Standards Update (“ASU”). Unless otherwise discussed, we have reviewed the new standard would be effective for annual reporting periods beginning after December 15, 2017,guidance and interim periods therein, with an option to adopt the standard on the originally scheduled effective date. The standard shall be applied either retrospectively to each period presentedhave determined that they will not apply or as a cumulative-effect adjustment as of the date of adoption. For TJX, the standard will be effective in the first quarter of the fiscal year ending February 2, 2019. TJX is in the process of evaluating this guidance to determine the impact it will have on our consolidated financial statements.In April 2015, a pronouncement was issued that allows employers with fiscal year ends that doare not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year end. This update is effective for interim and annual reporting periods beginning after December 15, 2015. TJX is in the process of evaluating this guidance to determine the impact it will have on our consolidated financial statements.In April 2015, a pronouncement was issued that requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For TJX, the standard will be effective in the first quarter of fiscal 2017. TJX expects to change the presentation of our debt issuance costs as prescribed by the new guidance.In May 2015, a pronouncement was issued that removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The pronouncement also removes the requirement to make certain disclosures for all investments that are eligibleexpected to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosuresmaterial to our Consolidated Financial Statements upon adoption and therefore, are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The guidance is effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Earlier application is permitted and TJX has adopted these provisions, including the retrospective application, to all periods presented in the consolidated financial statements.In September 2015, a pronouncement was issued that eliminates the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The guidance requires that the cumulative impact of a measurement period adjustment be recognized in the reporting period in which the adjustment is identified. The portion of the adjustment which relates to a prior period should either be presented separately on the face of the income statement or disclosed in the notes. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. The guidance is to be applied prospectively to adjustments to provisional amounts that occur after the effective date. TJX does not expect this new guidance to have a material impact on our consolidated financial statements.In November 2015, a pronouncement was issued that requires entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classified balance sheet. It simplifies the current guidance, which requires entities to separately present DTAs and DTLs as current or noncurrent in a classified balance sheet. Netting of DTAs and DTLs by tax jurisdiction is still required under the new guidance. This pronouncement is effective for annual periods beginning after December 15, 2016, and interim periods within those fiscal years; early adoption is permitted. TJX has adopted this guidance as of January 30, 2016, and has applied it retrospectively. As a result, we have recast the January 31, 2015 consolidated balance sheet to conform to the current period presentation. The adoption of this standard reduced previously-presented current DTAs by $137.6 million, decreased long-term DTAs by $2.0 million and reduced long-term DTLs by $139.6 million as of January 31, 2015.ASU 2016-02, “Leases (Topic 842),” which will replace the existingupdated guidance in ASC 840, “Leases.” The updated standard aimson leases to increase transparency andF-12leaseright of use assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. ASU 2016-02The new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permittedpermitted. In July 2018, the FASB issued ASU 2018-11, Leasesis required. TJX is inof the processnew guidance for leases that exist or are entered into after the beginning of evaluatingthe earliest comparative period presented. We will adopt this guidancestandard on February 3, 2019 using the optional transition method under ASU 2018-11.determineassess the impact itthis standard will have on our Consolidated Financial Statements and Notes thereto. The Company has determined that the initial lease term will not differ under the new standard versus current accounting practice, and therefore the income statement impact of the new standard will not be material. Any impact to the income statement will be the result of the timing of expense recognition and will not be incremental over the term of the lease. For example, under ASC 842 certain initial direct costs will no longer be capitalized and amortized over the lease term and will be expensed as incurred. In addition, in certain instances, the cost of our renewal options may be recognized earlier in the life of the lease than under the existing lease accounting rules. On adoption of this standard we will recognize an operating lease liability of approximately $9 billion on our statement of financial statements.March 2016,February 2018, the Financial Accounting Standards BoardFASB issued ASU 2016-04 “Liabilities-Extinguishmentsupdated guidance related to reporting comprehensive income. The amendments in the update allow for a one-time reclassification from accumulated other comprehensive income (“AOCI”) to retained earnings for stranded tax effect as a result from the enactment of Liabilities.”the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). The updated guidance is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for reporting periods for which financial statements have not yet been issued. The updated guidance should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the 2017 Tax Act is recognized. The Company will adopt the standard aimsin the first quarter of fiscal 2020 and plans on electing not to addressreclassify the diversitystranded tax effects as of result of the 2017 Tax Act to retained earnings. The Company is still evaluating the impact of the adoption on its consolidated disclosures.practice a cloud computingderecognition of prepaid store-value product liabilities. ASU 2016-04 is service contract and which costs to expense. The guidance specifies classification for capitalizing implementation2017 and interim periods within those annual periods; early2019. Early adoption is permitted and modified retrospective applicationcan be applied either retrospectively or prospectively. The Company is required.currently evaluating theisadopted a pronouncement that addresses differences in the processway certain cash receipts andevaluating thiscash flows. The new guidance provides clarity around the cash flowdeterminereduce the impact it will have on our financial statements.Note B. Acquisition of Trade SecretOn October 24, 2015, TJX purchased Trade Secret, an off-price retailer that operates 35 storescurrent and potential future differences in Australia, for approximately AUD$83 million (U.S. $59 million), which is subject to customary post-closing adjustments.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 (after preliminary adjustment for customary post-closing adjustments) to the assets and liabilities acquired based on their estimated fair values as of October 24, 2015:In thousands $ 25,962 10,184 37,225 73,371 (14,071 ) $ 59,300 As is customary, the amounts above may be further adjusted up to one year after date of acquisition.Goodwill and intangible assets include identified intangible assets of $12 million for the value of the tradename “Trade Secret” which is being amortized over 10 years, and $25 million representing goodwill (See Note A).The operating results of Trade Secret have been included in TJX’s consolidated financial statements from the date of acquisition and Trade Secret is now part of the TJX International segment along with our European operations. Pro forma results of operations assuming the acquisition of Trade Secret occurred as of the beginning of fiscal 2015 have not been presented as the inclusion of the results of operations for the acquired business wouldstandard produced a material impact on our consolidated statements of cash flows. Fiscal Year Ended In thousands February 2,
2019February 3,
2018Land and buildings $ 1,457,835 $ 1,355,777 Leasehold costs and improvements 3,377,045 3,254,830 Furniture, fixtures and equipment 5,894,239 5,357,701 Total property at cost $ 10,729,119 $ 9,968,308 Less accumulated depreciation and amortization 5,473,911 4,962,255 Net property at cost $ 5,255,208 $ 5,006,053 sales, net income or earnings per share as reported.F-13 Fiscal Year Ended In thousands February 2,
2019February 3,
2018United States $ 3,756,929 $ 3,514,628 Canada 303,414 308,259 Europe 1,154,564 1,151,972 Australia 40,301 31,194 Total long-lived assets $ 5,255,208 $ 5,006,053 (Loss) (loss) relate to the Company’s foreign currency translation adjustments, minimumdeferred gains/losses on pension and other post-retirement liabilitiesobligations and a cash flow hedge on issued debt, all of which are recorded net of the related income tax effects. The following table details the changes in accumulated other comprehensive (loss) income (loss) for fiscal 2016,2019, fiscal 20152018 and fiscal 2014:Amounts in thousands Foreign
Currency
Translation Cash Flow
Hedge on Debt Accumulated
Other
Comprehensive
Income (Loss) $ (18,643 ) $ (194,749 ) $ — $ (213,392 ) (57,926 ) — — (57,926 ) — 55,285 — 55,285 — 16,501 — 16,501 (76,569 ) (122,963 ) — (199,532 ) (218,700 ) — — (218,700 ) — (139,366 ) — (139,366 ) — — (4,762 ) (4,762 ) — — 452 452 — 7,523 — 7,523 (295,269 ) (254,806 ) (4,310 ) (554,385 ) (143,923 ) — — (143,923 ) — 9,629 — 9,629 — — 684 684 — 20,523 — 20,523 $ (439,192 ) $ (224,654 ) $ (3,626 ) $ (667,472 ) In thousands Accumulated
Other
Comprehensive(Loss) Income$ (439,192 ) $ (224,654 ) $ (3,626 ) $ (667,472 ) Foreign currency translation adjustments (net of taxes of $25,656) (52,611 ) — — (52,611 ) Recognition of net gains/losses on benefit obligations (net of taxes of $7,394) — (11,239 ) — (11,239 ) Pension settlement charge (net of taxes of $12,369) — 18,804 — 18,804 Amortization of loss on cash flow hedge (net of taxes of $450) — — 684 684 Amortization of prior service cost and deferred gains/losses (net of taxes of $11,584) — 17,608 — 17,608 (491,803 ) (199,481 ) (2,942 ) (694,226 ) Foreign currency translation adjustments (net of taxes of $36,929) 211,752 — — 211,752 Recognition of net gains/losses on benefit obligations (net of taxes of $8,989) — 24,691 — 24,691 Amortization of loss on cash flow hedge (net of taxes of $438) — — 696 696 Amortization of prior service cost and deferred gains/losses (net of taxes of $9,592) — 15,228 — 15,228 Balance, February 3, 2018 (280,051 ) (159,562 ) (2,246 ) (441,859 ) Foreign currency translation adjustments (net of taxes of $8,233) (192,664 ) — — (192,664 ) Recognition of net gains/losses on investment hedges (net of taxes $7,113) 19,538 — — 19,538 Recognition of net gains/losses on benefit obligations (net of taxes of $19,813) — (54,420 ) — (54,420 ) Pension settlement charge (net of taxes of $9,641) — 26,481 — 26,481 Amortization of loss on cash flow hedge (net of taxes of $304) — — 847 847 Amortization of prior service cost and deferred gains/losses (net of taxes of $4,280) — 11,756 — 11,756 Balance, February 2, 2019 $ (453,177 ) $ (175,745 ) $ (1,399 ) $ (630,321 ) Stock:Stock26.551.8 million shares of its common stock at a cost of $1.8$2.5 billion during fiscal 2016,2019, on a “trade date basis.” TJX reflects stock repurchases in its financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $1.8$2.4 billion in fiscal 2016,2019, $1.6 billion in fiscal 2018 and $1.7 billion in fiscal 2015 and $1.5 billion in fiscal 2014,2017, and repurchased 26.650.8 million shares in fiscal 2016, 27.62019, 44.4 million shares in fiscal 20152018 and 27.344.6 million shares in fiscal 2014.2017. These expenditures were funded primarily by cash generated from operations.January 30, 2016February 2, 2019 TJX had $1.5approximately $1.7 billion available under the existing $2.0 billionpreviously announced stock repurchase program announced by TJX inprograms. In February 2015. In addition, in February 2016, TJX announced the2019, our Board of Directors had approved the repurchase of an additional $2.0$1.5 billion of TJX common stock from time to time.F-14Share:Share Fiscal Year Ended Amounts in thousands except per share amounts $ 2,277,658 $ 2,215,128 $ 2,137,396 673,484 692,691 713,470 $ 3.38 $ 3.20 $ 3.00 $ 2,277,658 $ 2,215,128 $ 2,137,396 673,484 692,691 713,470 9,767 10,854 12,906 683,251 703,545 726,376 $ 3.33 $ 3.15 $ 2.94 Fiscal Year Ended Amounts in thousands except per share amounts February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Basic earnings per share: Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Weighted average common stock outstanding for basic earnings per share calculation 1,241,153 1,273,654 1,311,294 Basic earnings per share $ 2.47 $ 2.05 $ 1.75 Diluted earnings per share: Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Weighted average common stock outstanding for basic earnings per share calculation 1,241,153 1,273,654 1,311,294 Assumed exercise / vesting of: Stock options and awards 18,099 18,555 17,570 Weighted average common stock outstanding for diluted earnings per share calculation 1,259,252 1,292,209 1,328,864 Diluted earnings per share $ 2.43 $ 2.02 $ 1.73 Cash dividends declared per share $ 0.78 $ 0.63 $ 0.52 excludesexclude the impact of outstanding stock options if the assumed proceeds per share of the option is in excess of the average price of TJX’s common stock for the related fiscal periods. Such options are excluded because they would have an antidilutive effect. There were 4.16.1 million, 8.824.9 million and 4.716.3 million such options excluded at the end of fiscal 2016,2019, fiscal 20152018 and fiscal 2014,2017, respectively.as well asand fuel costs. These market risks may adversely affect TJX’s operating results and financial position. TJX seeks to minimize risk from changes in interest rates and foreign currency exchange rates and fuel costs to the extent we deem appropriate, through the use of derivative financial instruments.instruments when and to the extent deemed appropriate. TJX does not use derivative financial instruments for trading or other speculative purposes and does not use any leveraged derivative financial instruments. TJX recognizes all derivative instruments as either assets or liabilities in the statements of financial position and measures those instruments at fair value. The fair values of the derivatives are classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts. Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of other comprehensive income or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged. TJX does not hedge its net investments in foreign subsidiaries.Contracts:Contractsforbased on the price of diesel fuel price increases as incurred by the carrier.fuel. 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. During fiscal 2015 and fiscal 2016,2019, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2016. Similarly, during fiscal 2016, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the fiscal year ending January 28, 2017 (fiscal 2017).2020. The hedge agreements outstanding at January 30, 2016February 2, 2019 relate to approximately 40%50% of TJX’s estimated notional diesel requirements for fiscal 2017.2020. These diesel fuel hedge agreements will settle throughout fiscal 2017.2020 and the first month of fiscal 2021. TJX elected not to apply hedge accounting rules to these contracts.F-15Contracts:ContractsEurope (United Kingdom, Ireland, Germany, Poland, Austria, and the Netherlands), TJX Canada (Canada), Marmaxx (U.S.) and HomeGoods (U.S.) in currencies other than their respective functional currencies.currencies, primarily in TJX International and TJX Canada. These contracts typically have a term of twelve months or less. The contracts outstanding at January 30, 2016February 2, 2019 cover a portion of such actual and anticipated merchandise purchases throughout fiscal 2017.2020. Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the United Kingdom. All merchandise is purchased centrally in the U.K. and then shipped and billed to the retail entities in other countries. This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the buying entity for changes in the exchange rate between the Euro and British Pound. The inflow of Euros to the central buying entity provides a natural hedge for merchandise purchased from third-party vendors that is denominated in Euros. However, with the growth of TJX’s Euro denominated retail operations, the intercompany billings committed to the Euro denominated operations is generating Euros in excess of those needed to meet merchandise commitments to outside vendors. TJX calculates this excess Euro exposure each month and enters ainto forward contracts of approximately 30 day hedgedays duration to mitigate the exposure. TJX elected not to apply hedge accounting rules to these contracts.January 30, 2016:In thousands Pay Receive Blended
Contract
Rate Balance Sheet
Location Current
Asset
U.S.$ Current
(Liability)
U.S.$ Net Fair
Value in
U.S.$ at
January 30,
2016 zł 87,073 C$ 29,950 0.3440 Prepaid Exp $ 144 $ — $ 144 zł 45,000 £ 7,403 0.1645 (Accrued Exp) — (448 ) (448 ) € 45,000 £ 34,496 0.7666 (Accrued Exp) — (200 ) (200 ) U.S.$ 77,957 £ 55,000 0.7055 Prepaid Exp 535 — 535
Fixed on 900K
—3.0M gal per
month
Float on 900K
—3.0M gal
per month
N/A (Accrued Exp ) — (13,952 ) (13,952 ) € 60,000 £ 46,113 0.7686 Prepaid Exp 566 — 566 C$ 434,271 U.S.$ 322,050 0.7416
Prepaid Exp /
(Accrued Exp)
12,891 (1,601 ) 11,290 C$ 16,719 € 11,250 0.6729
Prepaid Exp /
(Accrued Exp)
316 (90 ) 226 £ 174,235 U.S.$ 262,250 1.5052 Prepaid Exp 13,996 — 13,996 zł 195,892 £ 33,088 0.1689
Prepaid Exp /
(Accrued Exp)
123 (926 ) (803 ) U.S.$ 18,243 € 16,724 0.9167
Prepaid Exp /
(Accrued Exp)
72 (190 ) (118 ) $ 28,643 $ (17,407 ) $ 11,236 F-16In thousands Pay Receive Fair value hedges: Intercompany balances, primarily debt and related interest: zł 59,000 £ 12,021 0.2037 Prepaid Exp $ 56 $ — $ 56 € 55,950 £ 49,560 0.8858 Prepaid Exp /
(Accrued Exp)126 (140 ) (14 ) A$ 30,000 U.S.$ 21,483 0.7161 (Accrued Exp) — (314 ) (314 ) U.S.$ 72,020 £ 55,000 0.7637 Prepaid Exp 1,037 — 1,037 Economic hedges for which hedge accounting was not elected: Diesel contracts Fixed on 2.7M - 3.3M gal per month Float on 2.7M - 3.3M gal per month N/A (Accrued Exp) — (3,786 ) (3,786 ) Intercompany billings in TJX International, primarily merchandise related: € 46,600 £ 41,835 0.8977 Prepaid Exp 1,300 — 1,300 Merchandise purchase commitments: C$ 546,083 U.S.$ 414,100 0.7583 Prepaid Exp /
(Accrued Exp)1,239 (4,741 ) (3,502 ) C$ 31,455 € 20,700 0.6581 (Accrued Exp) — (248 ) (248 ) £ 173,624 U.S.$ 230,000 1.3247 Prepaid Exp /
(Accrued Exp)3,459 (1,466 ) 1,993 zł 280,167 £ 57,586 0.2055 Prepaid Exp /
(Accrued Exp)707 (86 ) 621 A$ 51,043 U.S.$ 36,961 0.7241 Prepaid Exp /
(Accrued Exp)97 (213 ) (116 ) U.S.$ 56,847 € 49,355 0.8682 Prepaid Exp /
(Accrued Exp)115 (207 ) (92 ) Total fair value of financial instruments $ 8,136 $ (11,201 ) $ (3,065 ) January 31, 2015:In thousands Pay Receive Blended
Contract
Rate Balance Sheet
Location Current
Asset
U.S.$ Current
(Liability)
U.S.$ Net Fair
Value in
U.S.$ at
January 31,
2015 zł 94,073 C$ 32,318 0.3435
Prepaid Exp /
(Accrued Exp)
$ 153 $ (81 ) $ 72 € 39,000 £ 30,988 0.7946
Prepaid Exp /
(Accrued Exp)
2,536 (72 ) 2,464 € 19,850 U.S.$ 22,647 1.1409 Prepaid Exp 108 — 108 U.S.$ 83,401 £ 55,000 0.6595 (Accrued Exp) — (725 ) (725 )
Fixed on 1.2M
—1.9M gal per
month
Float on 1.2M
—1.9M gal per
month
N/A (Accrued Exp) — (15,324 ) (15,324 ) C$ 322,492 U.S.$ 281,890 0.8741 Prepaid Exp 28,789 — 28,789 C$ 13,426 € 9,500 0.7076 Prepaid Exp 183 — 183 £ 77,722 U.S.$ 123,500 1.5890 Prepaid Exp 6,477 — 6,477 zł 139,215 £ 25,547 0.1835
Prepaid Exp /
(Accrued Exp)
1,172 (166 ) 1,006 U.S.$ 12,590 € 10,353 0.8223
Prepaid Exp /
(Accrued Exp)
1 (898 ) (897 ) $ 39,419 $ (17,266 ) $ 22,153 In thousands Pay Receive Fair value hedges: Intercompany balances, primarily debt and related interest: zł 67,000 £ 14,035 0.2095 (Accrued Exp) $ — $ (45 ) $ (45 ) € 51,950 £ 46,095 0.8873 (Accrued Exp) — (318 ) (318 ) U.S.$ 77,079 £ 55,000 0.7136 Prepaid Exp 1,636 — 1,636 Economic hedges for which hedge accounting was not elected: Diesel contracts Fixed on 2.2M – 3.0M gal per month Float on 2.2M – 3.0M gal per month N/A Prepaid Exp 7,854 — 7,854 Intercompany billings in TJX International, primarily merchandise related: € 26,000 £ 22,948 0.8826 (Accrued Exp) — (2 ) (2 ) Merchandise purchase commitments: C$ 462,464 U.S.$ 367,200 0.7940 Prepaid Exp /
(Accrued Exp)49 (5,478 ) (5,429 ) C$ 22,562 € 15,000 0.6648 Prepaid Exp 557 — 557 £ 176,911 U.S.$ 238,000 1.3453 Prepaid Exp /
(Accrued Exp)173 (12,838 ) (12,665 ) zł 288,646 £ 60,023 0.2079 (Accrued Exp) — (1,303 ) (1,303 ) A$ 28,635 U.S.$ 22,230 0.7763 Prepaid Exp / (Accrued Exp) $ 43 $ (573 ) $ (530 ) U.S.$ 44,223 € 36,950 0.8355 Prepaid Exp 1,905 — 1,905 Total fair value of financial instruments $ 12,217 $ (20,557 ) $ (8,340 ) 2016,2019, fiscal 20152018 and fiscal 20142017 are as follows: Amount of Gain (Loss) Recognized in
Income by Derivative In thousands Location of Gain (Loss) Recognized in
Income by Derivative January 30,
2016 January 31,
2015 February 1,
2014 Selling, general
and administrative
expenses $ (3,927 ) $ 7,413 $ 6,099 Cost of sales, including buying and occupancy costs (21,797 ) (16,050 ) (1,831 ) Cost of sales, including buying and occupancy costs (5,768 ) — — Cost of sales, including buying and occupancy costs 49,107 41,554 22,338 $ 17,615 $ 32,917 $ 26,606 In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Fair value hedges: Intercompany balances, primarily debt and related interest Selling, general and administrative expenses $ (2,674 ) $ 1,207 $ (17,250 ) Economic hedges for which hedge accounting was not elected: Intercompany receivable Selling, general and administrative expenses 18,823 — — Diesel contracts Cost of sales, including buying and occupancy costs 1,373 7,946 3,906 Intercompany billings in TJX International, primarily merchandise related Cost of sales, including buying and occupancy costs 1,137 (3,042 ) (8,684 ) Merchandise purchase commitments Cost of sales, including buying and occupancy costs 60,407 (45,886 ) 5,626 Gain (loss) recognized in income $ 79,066 $ (39,775 ) $ (16,402 ) gainsgain of $28.5$73.8 million in fiscal 2016, $24.32019, and losses of $30.5 million in fiscal 20152018 and $10.7$6.1 million in fiscal 2014,2017, all of which were largely offset by gains and losses on the underlying hedged item.F-17Disclosures about Fair Value of Financial InstrumentsLevel 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 Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 155,847 $ 151,936 $ 131,049 $ 352,313 $ 282,623 $ 294,702 28,643 39,419 19,482 — — 137 $ 3,455 $ 1,942 $ 6,107 13,952 15,324 — Fiscal Year Ended In thousands February 2,
2019February 3,
2018Level 1 Assets: Executive Savings Plan investments $ 253,215 $ 249,045 Level 2 Assets: Short-term investments $ — $ 506,165 Foreign currency exchange contracts 8,136 4,363 Diesel fuel contracts — 7,854 Liabilities: Foreign currency exchange contracts $ 7,415 $ 20,557 Diesel fuel contracts 3,786 — January 30, 2016February 2, 2019 was $1.70$2.17 billion compared to a carrying value of $1.62 billion. The fair value of long-term debt at January 31, 2015 was $1.73 billion compared to a carrying value of $1.62$2.23 billion. The fair value of long-term debt at February 1, 20143, 2018 was $1.34$2.16 billion compared to a carrying value of $1.27$2.23 billion. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might affect TJX’s ability to settle these obligations.HomeSenseHomesense and tkmaxx.com in Europe and Trade SecretT.K. Maxx in Australia. TJX alsoIn addition to our four main business segments, Sierra operates Sierra Trading Post, an off-price Internet retailer that operates a small number ofsierra.com and retail stores in the U.S. The results of STPSierra are included in the Marmaxx segment.F-18 Fiscal
2016 Fiscal
2015 Fiscal
2014 55 % 57 % 58 % 15 14 14 30 29 28 100 % 100 % 100 % For fiscal 2016, TJX Canada and TJX International accounted for 23% of TJX’s net sales, 17% of segment profit and 23% of consolidated assets. Fiscal
2019Fiscal
2018Fiscal
2017Apparel Clothing including footwear 52 % 52 % 54 % Jewelry and accessories 15 15 15 Home fashions 33 33 31 Total 100 % 100 % 100 % Fiscal Year Ended In thousands $ 19,948,227 $ 18,687,880 $ 17,929,576 3,915,221 3,414,351 2,993,718 2,854,617 2,883,863 2,877,834 4,226,873 4,092,313 3,621,568 $ 30,944,938 $ 29,078,407 $ 27,422,696 $ 2,858,780 $ 2,736,694 $ 2,612,693 549,318 463,193 386,541 375,306 393,622 405,363 316,939 337,406 275,453 4,100,343 3,930,915 3,680,050 395,643 324,414 329,480 — 16,830 — 46,400 39,787 31,081 $ 3,658,300 �� $ 3,549,884 $ 3,319,489 F-19 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales: In the United States Marmaxx $ 24,057,970 $ 22,249,105 $ 21,246,034 HomeGoods 5,787,365 5,116,328 4,404,607 TJX Canada 3,869,779 3,642,282 3,171,127 TJX International 5,257,820 4,856,949 4,361,976 $ 38,972,934 $ 35,864,664 $ 33,183,744 Segment profit: In the United States $ 3,253,949 $ 2,949,358 $ 2,995,045 HomeGoods 671,871 674,511 613,778 TJX Canada 551,617 530,113 413,417 TJX International 285,790 249,226 235,519 4,763,227 $ 4,403,208 $ 4,257,759 General corporate expense 545,034 515,032 408,236 Loss on early extinguishment of debt — — 51,773 Pension settlement charge 36,122 — 31,173 Interest expense, net 8,860 31,588 43,534 Income before provision for income taxes $ 4,173,211 $ 3,856,588 $ 3,723,043 (1) Fiscal 2018 amount includes an impairment charge of $99.3 million for goodwill and certain long-lived assets of Sierra. Fiscal Year Ended In thousands $ 5,526,570 $ 5,014,573 $ 4,700,347 915,549 777,214 638,742 1,021,584 1,020,955 962,101 1,645,296 1,531,661 1,510,132 2,390,483 2,644,347 2,286,345 $ 11,499,482 $ 10,988,750 $ 10,097,667 $ 442,910 $ 445,041 $ 551,839 130,593 148,354 99,828 71,071 100,779 104,888 244,806 217,348 190,123 $ 889,380 $ 911,522 $ 946,678 $ 364,892 $ 340,830 $ 318,414 67,204 54,867 47,176 54,573 66,141 66,295 126,020 123,547 114,651 4,007 3,590 2,287 $ 616,696 $ 588,975 $ 548,823 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017Identifiable assets: In the United States Marmaxx $ 6,223,110 $ 5,676,464 $ 5,440,448 HomeGoods 1,416,687 1,237,811 1,086,947 TJX Canada 914,789 1,459,924 1,345,003 TJX International 2,344,033 2,321,001 1,789,140 3,427,410 3,362,815 3,222,270 Total identifiable assets $ 14,326,029 $ 14,058,015 $ 12,883,808 Capital expenditures: In the United States Marmaxx $ 598,955 $ 532,348 $ 449,169 HomeGoods 170,978 149,505 173,979 TJX Canada 82,333 88,761 100,437 TJX International 272,873 287,003 301,162 Total capital expenditures $ 1,125,139 $ 1,057,617 $ 1,024,747 Depreciation and amortization: In the United States Marmaxx $ 456,420 $ 399,014 $ 385,007 HomeGoods 110,978 94,709 77,287 TJX Canada 66,365 68,033 62,427 TJX International 180,631 159,010 129,376 5,261 5,191 4,699 Total depreciation and amortization $ 819,655 $ 725,957 $ 658,796 (1) Corporate identifiable assets consist primarily of cash, receivables, prepaid insurance, prepaid service contracts and the trust assets in connection with the Executive Savings Plan and deferred taxes.Plan. Consolidated cash, including cash held in our foreign entities, is included with corporate assets for consistency with the reporting of cash for our segments in the U.S.(2) Includes debt discount accretion and debt expense amortization. 347.8695.7 million shares with 36.046.3 million shares available for future grants as of January 30, 2016.February 2, 2019. TJX issues shares under the plan from authorized but unissued common stock.$94.1$103.6 million, $88.0$101.4 million and $76.1$102.3 million in fiscal 2016, 20152019, 2018 and 2014,2017, respectively. As of January 30, 2016,February 2, 2019, there was $132.4$146.5 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 two2 years.three-year3-year period starting one1 year after the grant, and have a ten-year10-year maximum term. When options are granted with other vesting terms, suchthe vesting information is incorporated intoreflected in the valuation.F-20 Fiscal Year Ended January 30,
2016 January 31,
2015 February 1,
2014 1.50 % 1.79 % 1.42 % 1.2 % 1.2 % 1.0 % 24.4 % 24.2 % 25.9 % 4.5 4.5 4.4 $ 14.48 $ 12.00 $ 11.92 Fiscal Year Ended February 2,
2019February 3,
2018January 28,
2017Risk-free interest rate 2.88 % 1.75 % 1.20 % Dividend yield 1.4 % 1.5 % 1.2 % Expected volatility factor 23.5 % 23.5 % 23.8 % Expected option life in years 4.9 4.8 4.8 Weighted average fair value of options issued $ 11.85 $ 7.16 $ 7.28 Stock Options:(WAEP)(“WAEP”) is presented below (shares in thousands): Fiscal Year Ended January 30, 2016 January 31, 2015 February 1, 2014 Options WAEP Options WAEP Options WAEP 30,078 $ 34.91 32,628 $ 28.30 36,620 $ 22.31 4,169 72.54 4,849 59.70 4,742 56.71 (5,124 ) 25.87 (6,981 ) 20.39 (8,258 ) 17.71 (437 ) 55.06 (418 ) 48.76 (476 ) 34.74 28,686 $ 41.68 30,078 $ 34.91 32,628 $ 28.30 20,175 $ 31.75 21,001 $ 25.75 22,473 $ 20.19 Fiscal Year Ended Shares in thousands February 2,
2019February 3,
2018January 28,
2017 Options WAEP Options WAEP Options WAEP Outstanding at beginning of year 55,260 $ 27.52 54,706 $ 24.35 57,372 $ 20.84 Granted 6,143 53.98 9,404 36.61 8,610 37.52 Exercised (11,670 ) 21.88 (8,192 ) 16.12 (10,530 ) 15.42 Forfeitures (680 ) 38.59 (658 ) 35.70 (746 ) 33.08 Outstanding at end of year 49,053 $ 32.02 55,260 $ 27.52 54,706 $ 24.35 Options exercisable at end of year 34,344 $ 26.95 37,952 $ 23.28 37,960 $ 19.35 $227.4$284.4 million in fiscal 2016, $286.32019, $176.7 million in fiscal 20152018 and $289.8$239.7 million in fiscal 2014.January 30, 2016:Shares in thousands Shares Aggregate
Intrinsic
Value Weighted
Average
Remaining
Contract Life WAEP 7,862 $ 51,648 8.9 years $ 65.29 20,175 $ 796,741 5.1 years $ 31.75 28,037 $ 848,389 6.2 years $ 41.15 Options outstanding expected to vest represents total unvested options of 8.5 million adjusted for anticipated forfeitures.Performance-Based February 2, 2019:Shares in thousands Shares WAEP 13,672 $ 98,458 8.8 years $ 43.73 Options exercisable 34,344 $ 754,018 5.0 years $ 26.95 Total outstanding options vested and expected to vest 48,016 $ 852,476 6.1 years $ 31.72 (1) Reflects 14.6 million unvested options, net of anticipated forfeitures. Awards:Awardsgrants performance-based restricted stock, performance-basedgranted restricted stock units and performance-based deferred stock awards (collectively referred to as performance-based stock awards)performance share units under the Stock Incentive Plan.Plan during fiscal 2019. Restricted stock units, performance share units, and previously-granted performance-based stock awards are collectively referred to as stock awards. These awards arewere granted without a purchase price to the recipient and are subject to vesting conditions. Vesting conditions includingfor performance share units and performance-based stock awards include specified performance criteria, aligned with management incentive plansgenerally for a period of generally one to three fiscal years. The grant date fair value of the stock awards is charged to income over the requisite service period during which the recipient must remain employed. The fair value of the stock awards is determined at date of grant in accordance with ASC Topic 718 and, for performance share units and performance-based stock awards, assumes that performance goals will be achieved. If such goals are not met, or only partially met,achieved at target. Performance share units, performance-based stock awards and related compensation costs recognized are reduced on a pro rata basis.F-21performance-based stock awards and changes during fiscal 20162019 is presented below:Shares in thousands Performance-
based stock
awards Weighted
Average
Grant Date
Fair Value 1,810 $ 53.16 696 70.41 (646 ) 41.97 (84 ) 61.89 1,776 $ 63.57 Shares in thousands Stock Awards Nonvested at beginning of year 3,045 $ 38.68 Granted 1,268 41.17 Vested (859 ) 35.03 Forfeited (32 ) 39.93 Nonvested at end of year 3,422 $ 40.51 696,0571,267,802 shares of restricted stock unit and performance share unit awards, with a weighted average grant date fair value of $41.17, granted in fiscal 2019, 1,124,012 shares of performance-based stock awards, with a weighted average grant date fair value of $70.41,$38.36, granted in fiscal 2016, 717,5002018, and 1,027,146 shares of performance-based stock awards, with a weighted average grant date fair value of $62.85,$39.25, granted in fiscal 2015, and 743,576 shares of performance-based stock awards, with a weighted average grant date fair value of $51.02, granted in fiscal 2014.2017. The fair value of performance-based stock awards that vested was $27.1$30.1 million in fiscal 2016, $21.42019, $35.2 million in fiscal 2015,2018, and $14.2$38.5 million in fiscal 2014.Awards:AwardsThe outside directors are awarded two annual deferred share awards, each representing shares of TJX common stock which were valued at $75,000 for fiscal 2016. 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 2016,2019, a total of 301,654607,552 of these deferred shares were outstanding under the plan.:primary benefit)“primary benefit”) or, alternatively, based on benefits that would be provided under the funded retirement plan absent Internal Revenue Code limitations (the alternative benefit)“alternative benefit”).(qualified(“qualified pension planplan” or funded plan)“funded plan”) and its unfunded supplemental pension plan (unfunded plan)(“unfunded plan”) for the fiscal years indicated: In thousands January 30,
2016 January 31,
2015 January 30,
2016 January 31,
2015 $ 1,309,889 $ 996,968 $ 82,238 $ 59,566 50,080 40,481 1,562 1,398 51,710 49,522 3,033 3,001 (170,674 ) 251,144 3,806 19,552 (24,956 ) (28,348 ) (5,672 ) (1,279 ) (3,049 ) (2,945 ) — — — 3,067 — — $ 1,213,000 $ 1,309,889 $ 84,967 $ 82,238 $ 1,120,602 $ 1,203,464 $ 70,750 $ 68,591 F-22 In thousands January 30,
2016 January 31,
2015 January 30,
2016 January 31,
2015 $ 1,170,748 $ 944,801 $ — $ — (72,901 ) 107,240 — — 50,000 150,000 5,672 1,279 (24,956 ) (28,348 ) (5,672 ) (1,279 ) (3,049 ) (2,945 ) — — $ 1,119,842 $ 1,170,748 $ — $ — $ 1,213,000 $ 1,309,889 $ 84,967 $ 82,238 1,119,842 1,170,748 — — $ 93,158 $ 139,141 $ 84,967 $ 82,238 $ 93,158 $ 139,141 $ 84,967 $ 82,238 $ 2,690 $ 3,067 $ — $ — 348,289 401,165 29,046 29,198 $ 350,979 $ 404,232 $ 29,046 $ 29,198 consolidated balance sheetsCompany has elected the practical expedient pursuant to ASU 2015-4– Compensation-retirement benefits (Topic 715) and has selected the measurement date of January 31, the calendar month end closest to the Company’s fiscal year end. In thousands February 2,
2019February 3,
2018February 2,
2019February 3,
2018Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 1,404,089 $ 1,269,010 $ 91,047 $ 86,309 Service cost 45,342 46,845 2,391 1,888 Interest cost 54,355 55,301 3,600 3,316 Actuarial (gains)/losses (38,304 ) 67,232 5,955 4,580 Settlements (207,369 ) — — — Benefits paid (33,226 ) (30,993 ) (6,234 ) (5,046 ) Expenses paid (3,717 ) (3,306 ) — — Projected benefit obligation at end of year $ 1,221,170 $ 1,404,089 $ 96,759 $ 91,047 Accumulated benefit obligation at end of year $ 1,100,358 $ 1,277,216 $ 80,166 $ 77,668 In thousands February 2,
2019February 3,
2018February 2,
2019February 3,
2018Change in plan assets: Fair value of plan assets at beginning of year $ 1,417,531 $ 1,176,960 $ — $ — Actual return on plan assets (27,884 ) 174,870 — — Employer contribution 100,000 100,000 6,234 5,046 Settlements (207,369 ) — — — Benefits paid (33,226 ) (30,993 ) (6,234 ) (5,046 ) Expenses paid (3,717 ) (3,306 ) — — Fair value of plan assets at end of year $ 1,245,335 $ 1,417,531 $ — $ — Reconciliation of funded status: Projected benefit obligation at end of year $ 1,221,170 $ 1,404,089 $ 96,759 $ 91,047 Fair value of plan assets at end of year 1,245,335 1,417,531 — — Funded status – excess (asset) obligation $ (24,165 ) $ (13,442 ) $ 96,759 $ 91,047 Net (asset) liability recognized on consolidated balance sheets $ (24,165 ) $ (13,442 ) $ 96,759 $ 91,047 Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss): Prior service cost $ 1,558 $ 1,935 $ — $ — Accumulated actuarial losses 264,160 243,761 30,709 28,164 Amounts included in accumulated other comprehensive income (loss) $ 265,718 $ 245,696 $ 30,709 $ 28,164 $178.1$72.6 million at January 30, 2016February 2, 2019 is reflected on the balance sheet as of that date as a current liability of $3.2$4.7 million, a long-term liability of $92.1 million, and a long-term liabilityasset of $174.9$24.2 million.$221.4 million$77.6 at January 31, 2015February 3, 2018 is reflected on the balance sheet as of that date as a current liability of $3.5$2.4 million, a long-term liability of $88.6 million, and a long-term liabilityasset of $217.9$13.4 million.20172020 for the funded plan is $377,000.$0.4 million. The estimated net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in fiscal 20172020 is $28.5$17.7 million for the funded plan and $3.5$3.7 million for the unfunded plan.In fiscal 2015, the Society of Actuaries issued new mortality tables projecting longer life expectancies that will result in higher postretirement benefit obligations for U.S. companies. Accordingly, we updated our mortality assumptions at January 31, 2015. The new mortality assumptions increased our funded plan’s benefit obligation by $59 million and the unfunded plan’s benefit obligation by $4 million at January 31, 2015. Both of these amounts are included in actuarial gains/losses presented in the change in the projected benefit obligation.20162019 and fiscal 2015.2018. TJX uses the BOND: Link model as this model allows for the selection of specific bonds resulting in better matches in timing of the plans’ expected cash flows. Presented below are weighted average assumptions for measurement purposes for determining the obligation at the year-end measurement date: January 30,
2016 January 31,
2015 January 30,
2016 January 31,
2015 4.80 % 4.00 % 4.20 % 3.70 % 4.00 % 4.00 % 6.00 % 6.00 % F-23 February 2,
2019February 3,
2018February 2,
2019February 3,
2018Discount rate 4.30% 4.00% 4.10% 3.80% Rate of compensation increase 4.00% 4.00% 6.00% 6.00% $55.7$106.2 million in fiscal 2016, $151.32019, $105.0 million in fiscal 20152018 and $32.7$54.6 million in fiscal 20142017 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 20172020 for the funded plan. We anticipate making contributions of $3.3$4.8 million to provide current benefits coming due under the unfunded plan in fiscal 2017. Dollars in thousands January 30,
2016 January 31,
2015 February 1,
2014 January 30,
2016 January 31,
2015 February 1,
2014 $ 50,080 $ 40,481 $ 44,623 $ 1,562 $ 1,398 $ 1,716 51,710 49,522 44,654 3,033 3,001 2,447 (78,042 ) (65,187 ) (60,474 ) — — — 377 — — — 2 3 33,146 13,848 28,070 3,958 2,146 2,884 $ 57,271 $ 38,664 $ 56,873 $ 8,553 $ 6,547 $ 7,050 $ (19,731 ) $ 209,091 $ (89,265 ) $ 3,806 $ 19,552 $ (2,925 ) (33,146 ) (13,848 ) (28,070 ) (3,958 ) (2,146 ) (2,884 ) (377 ) — — — (2 ) (3 ) — 3,067 — — — — $ (53,254 ) $ 198,310 $ (117,335 ) $ (152 ) $ 17,404 $ (5,812 ) $ 4,017 $ 236,974 $ (60,462 ) $ 8,401 $ 23,951 $ 1,238 4.00% 5.00% 4.40% 3.70% 4.80% 4.00% 6.75% 7.00% 7.00% N/A N/A N/A 4.00% 4.00% 4.00% 6.00% 6.00% 6.00% In thousands February 2,
2019February 3,
2018January 28,
2017February 2,
2019February 3,
2018January 28,
2017Net periodic pension cost: Service cost $ 45,342 $ 46,845 $ 45,440 $ 2,391 $ 1,888 $ 1,835 Interest cost 54,355 55,301 56,094 3,600 3,316 3,391 Expected return on plan assets (79,190 ) (69,345 ) (70,535 ) — — — Amortization of prior service cost 377 377 377 — — — Amortization of net actuarial loss 12,250 21,557 31,397 3,409 2,852 3,349 Settlement charge 36,122 — 31,173 — — — Total expense $ 69,256 $ 54,735 $ 93,946 $ 9,400 $ 8,056 $ 8,575 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net (gain) loss $ 68,770 $ (38,293 ) $ 17,894 $ 5,955 $ 4,580 $ 740 Amortization of net (loss) (12,250 ) (21,557 ) (31,397 ) (3,409 ) (2,852 ) (3,349 ) Settlement charge (36,122 ) — (31,173 ) — — — Amortization of prior service cost (377 ) (377 ) (377 ) — — — Total recognized in other comprehensive income (loss) $ 20,021 $ (60,227 ) $ (45,053 ) $ 2,546 $ 1,728 $ (2,609 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 89,277 $ (5,492 ) $ 48,893 $ 11,946 $ 9,784 $ 5,966 Weighted average assumptions for expense purposes: Discount rate 4.00%/4.40% 4.40% 4.80%/3.80% 3.80% 4.00% 4.20% Expected rate of return on plan assets 6.00%/6.00% 6.00% 6.50%/6.00% N/A N/A N/A Rate of compensation increase 4.00% 4.00% 4.00% 6.00% 6.00% 6.00% F-24In thousands $ 32,624 $ 3,324 36,341 5,505 40,419 5,778 44,794 34,008 49,427 3,534 319,360 22,974 In thousands Fiscal Year 2020 $ 25,557 $ 4,799 2021 30,134 3,684 2022 35,072 4,625 2023 40,515 47,780 2024 46,200 6,104 2025 through 2029 313,971 32,706 F)F – Fair Value Measurements of Notes to Consolidated Financial Statements) for pension assets measured at fair value on a recurring basis as of January 30, 2016: Funded Plan In thousands Level 1 Level 2 Total $ 57,713 $ — $ 57,713 216,526 — 216,526 — 337,864 337,864 — (33 ) (33 ) $ 274,239 $ 337,831 $ 612,070 — — 507,772 $ 274,239 $ 337,831 $ 1,119,842 Funded Plan at February 2, 2019 In thousands Level 1 Level 2 Total Asset category: Short-term investments $ 111,803 $ — $ 111,803 Equity Securities 226,042 — 226,042 Fixed Income Securities: Corporate and government bond funds — 376,438 376,438 Futures Contracts — 1,029 1,029 Total assets in the fair value hierarchy $ 337,845 $ 377,467 $ 715,312 Assets measured at net asset value* — — 530,023 Fair value of assets $ 337,845 $ 377,467 $ 1,245,335 Funded Plan at February 3, 2018 In thousands Level 1 Level 2 Total Asset category: Short-term investments $ 109,183 $ — $ 109,183 Equity Securities 279,635 — 279,635 Fixed Income Securities: Corporate and government bond funds — 420,117 420,117 Futures Contracts — 337 337 Total assets in the fair value hierarchy $ 388,818 $ 420,454 $ 809,272 Assets measured at net asset value* — — 608,259 Fair value of assets $ 388,818 $ 420,454 $ 1,417,531 * In accordance with Subtopic 820-10, certain investments that were measured using net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of assets presented above. The following table presents the fair value hierarchy for pension assets measured at fair value on a recurring basis as of January 31, 2015: Funded Plan In thousands Level 1 Level 2 Total $ 136,276 $ — $ 136,276 234,765 — 234,765 — 300,761 300,761 $ 371,041 $ 300,761 $ 671,802 — — 498,946 $ 371,041 $ 300,761 $ 1,170,748 *In accordance with Subtopic 820-10, certain investments that were measured using net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of assets presented above.F-25management, cashmanagement. Cash equivalents or short-term investments are stated at cost which approximates fair value, and the fair value of common/collective trusts is determined based on net asset value as reported by their fund managers. Target Allocation January 30,
2016 January 31,
2015 50% 40% 44% 50% 55% 45% — 5% 11% TJX employs Target Allocation February 2,
2019February 3,
2018Return-seeking assets 50% 43% 47% Liability-hedging assets 50% 49% 46% All other – primarily cash —% 8% 7% total return investment approachdynamic asset allocation strategy, whereby, a mixover time, in connection with any improvements in the plan’s funded status, the target allocation of return-seeking assets (generally, equities and other instruments with similar risk profile) may decline and the target allocation of liability-hedging assets (generally, fixed income investments is used to seek to maximize the long-term return on plan assetsand other instruments with a prudent level of risk.similar risk profile) may increase. 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. Assets under the plans totaled $1,314.8 million as of December 31, 2015 and $1,275.4 million as of December 31, 2014, and are invested in a variety of funds. Employees may contribute up to 50% of eligible pay, subject to limitations. TJX matches employee contributions, up to 5% of eligible pay, including a basic match at rates of 25% or 75% (based upon date of hire and other eligibility criteria) plus a discretionary match, generally up to 25%, based on TJX’s performance. TJX may also make additional discretionary contributions. Eligible employees are automatically enrolled in the U.S. plan at a 2% deferral rate, unless the employee elects otherwise. The total cost to TJX contributed $30.8for these plans was $60.8 million in fiscal 2016, $31.22019, $54.5 million in fiscal 20152018 and $29.7$45.6 million in fiscal 2014 to these employee savings plans.2017. The plans includepreviously included a TJX stock fund in which participants could invest a portion of TJX’s matching contribution. The TJX stock fund was closed to new investments, other than reinvestment of dividends, at the end of calendar 2015.2015 and was eliminated from the plans during fiscal 2019. The TJX stock fund represented 7.1%3.9% of plan assets at December 31, 2015, 7.4% of plan assets at December 31, 2014 and 8.3% of plan investments at December 31, 2013.$1.3$6.0 million in fiscal 2016, $3.52019, $6.3 million in fiscal 20152018 and $2.4$5.8 million in fiscal 2014.2017. Although the plan is unfunded, in order to help meet its future obligations TJX transfers an amount generally 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.F-26maintainscontributes to retirement/deferred savings plans for eligible associatesAssociates at certain of its foreign subsidiaries. We contributed $9.7$15.3 million for these plans in fiscal 2016, $9.32019, $12.6 million for these plans in fiscal 20152018 and $8.1$10.2 million in fiscal 2014.Plans:Plans$13.4$18.5 million in fiscal 2016, $11.52019, $16.3 million in fiscal 20152018 and $11.5$14.5 million in fiscal 20142017 to the Legacy Plan of the National Retirement Fund (EIN #13-6130178)#13-6130178, plan #1), the Adjustable Plan of the National Retirement Fund (EIN #13-6130178, plan #2), and their respective successor funds described below. TJX was listed in the plan’s Form 5500 for the Legacy Plan of the National Retirement Fund and the Adjustable Plan of the National Retirement Fund as providing more than 5% of the total contributions for the plan year ending December 31, 2014.2017. Based on information available to TJX, received fromeffective January 1, 2018 a portion of each of the Legacy Plan of the National Retirement Fund and the Adjustable Plan of the National Retirement Fund was transferred to the Legacy Plan of the UNITE HERE Retirement Fund (EIN #82-0994119, plan #1) and the Adjustable Plan of the UNITE HERE Retirement Fund (EIN #82-0994119, plan #2), respectively, two newly established multiemployer defined benefit pension plans. In addition, based on information available to TJX, the Pension Protection Act Zone Status for each of the Legacy Plan of the National Retirement Fund and the Legacy Plan of the UNITE HERE Retirement Fund is Critical and a rehabilitation plan hasplans have been implemented.Postretirement Medical: TJX has maintained a postretirement medical plan that provides limited postretirement medical benefits to retirees who are eligible for the defined benefit plan and who retired at age 55 or older with ten or more years of service. During fiscal 2006, TJX eliminated this benefit for all active associates and modified the benefit that was offered to retirees enrolled in the plan at that time.TJX paid $161,000 of benefits in fiscal 2016 and has a postretirement liability of $1 million as of January 31, 2016, representing the present value of future benefits TJX expected to pay. The amendment to the plan in fiscal 2006 resulted in a negative plan amendment of $46.8 million, which was being amortized over the average remaining life of the active participants. As of January 31, 2016 the unamortized balance of $6.2 million was included in accumulated other comprehensive income (loss). During fiscal 2016 there was a pre-tax benefit of $3.5 million reflected in the consolidated statements of income as it relates to this postretirement medical plan.During fiscal 2017, TJX decided to terminate the plan and make a discretionary lump sum payment to participants. The settlement of the liability and the recognition of the remaining negative plan amendment is expected to result in a pre-tax benefit of $5.6 million in the first quarter of fiscal 2017.January 30, 2016February 2, 2019 and January 31, 2015.February 3, 2018. All amounts are net of unamortized debt discounts.In thousands January 30,
2016 January 31,
2015 $ 374,777 $ 374,706 499,677 499,633 749,600 749,525 $ 1,624,054 $ 1,623,864 F-27In thousands February 2,
2019February 3,
2018General corporate debt: 2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $189 and $234 in fiscal 2019 and 2018, respectively) $ 499,811 $ 499,766 2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $174 and $250 in fiscal 2019 and 2018, respectively) $ 749,826 $ 749,750 2.25% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $5,657 and $6,403 in fiscal 2019 and 2018, respectively) $ 994,343 $ 993,597 Debt issuance cost $ (10,364 ) $ (12,506 ) Total long-term debt $ 2,233,616 $ 2,230,607 exclusiveinclusive of current installments at January 30, 2016February 2, 2019 are as follows:In thousands Long-Term
Debt $ — — 375,000 — 1,250,000 (946 ) $ 1,624,054 At January 30,In thousands Fiscal Year 2020 $ — 2021 — 2022 750,000 2023 — 2024 500,000 Later years 1,000,000 Less amount representing unamortized debt discount (6,020 ) Less amount representing debt issuance cost (10,364 ) Aggregate maturities of long-term debt $ 2,233,616 In July 2014, TJX used a portion of the proceeds of the 2.75% seven-year notes to redeem the 4.20% notes and recorded a pre-tax loss on the early extinguishment of debt of $16.8 million, which includes $16.4 million of redemption premium and approximately $400,000 to write off unamortized debt expenses and discount.January 30, 2016, TJX also had outstanding $500 million aggregate principal amount of 2.50% ten-year notes due May 2023 and $375 million aggregate principal amount of 6.95% ten-year notes due April 2019. TJX entered into rate-lock agreements to hedge the underlying treasury rate of $250 million of the 2.50% notes and all of the 6.95% notes. The cost of these agreements are being amortized to interest expense over the term of the respective notes, resulting in an effective fixed interest rate of 2.57% for the 2.50% notes and 7.00% for the 6.95% notes.At January 30, 2016,February 2, 2019, TJX had two $500 million revolving credit facilities, one which wasmatures in March 2020 and one which matures in March 2022. The $500 million revolving credit facilities maturing in March 2020 and March 2022 were also outstanding at February 3, 2018. In March 2017, the maturity of the $500 million revolving credit facility scheduled to mature in June 2017March 2021 was extended to March 2022. No other terms of the facility were modified at that time.one which was scheduled to mature in May 2016. As of January 30, 2016 and January 31, 2015, and duringcovenants under the years then ended, there were no amounts outstanding under these facilities. At January 30, 2016, the agreements requiredrevolving credit facilities require quarterly payments on the unused committed amounts of 6.0 basis points per annum on the committed amounts for both agreements. This rate is based on the agreement maturingcredit ratings of TJX’s long-term debt and will vary with specified changes in 2017 and 10 basis points for the agreement maturing in 2016.credit ratings. These agreements hadhave no compensating balance requirements and hadhave various covenants. Each of these facilities requiredrequire TJX to maintain a ratio of funded debt and four-times consolidated rentals to consolidated earnings before interest, taxes, consolidated rentals, depreciation and amortization (EBITDAR) of not more than 2.75 to 1.00 on a rolling four-quarter basis. TJX was in compliance with all covenants related to its credit facilities at the end of all periods presented. In March 2016, the $500 million revolving credit facility scheduled to mature in May 2016 was replaced with a new five-year $500 million revolving credit facility maturing in March 2021 and the $500 million revolving credit facility scheduled to mature in June 2017 was replaced with a new four-year $500 million revolving credit facility maturing in March 2020. The terms and covenants under the new revolving credit facilities are similar to those in the terminated facilities and require quarterly payments of 6.0 basis points on the committed amounts for both agreements. This rate is based on the credit ratings of TJX’s long-term debt and will vary with specified changes in the credit ratings.January 30, 2016February 2, 2019 and January 31, 2015, TJX’s foreign subsidiaries had uncommitted creditFebruary 3, 2018, and during the years then ended, there were no amounts outstanding under these facilities.January 30, 2016February 2, 2019 and January 31, 2015February 3, 2018, and during the years then ended, there were no amounts outstanding on the Canadian credit line for operating expenses. As of January 30, 2016February 2, 2019 and January 31, 2015,February 3, 2018, our European business at TJX International had aan uncommitted credit line of£5million and£20 million, respectively. £5 million. As of January 30, 2016February 2, 2019 and January 31, 2015February 3, 2018, and during the years then ended, there were no amounts outstanding on this U.K.the European credit line.F-28 Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 3,102,304 $ 2,943,745 $ 2,746,925 555,996 606,139 572,564 $ 3,658,300 $ 3,549,884 $ 3,319,489 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) United States $ 3,463,785 $ 3,255,057 $ 3,196,370 Foreign $ 709,426 $ 601,531 $ 526,673 Income before provision for income taxes $ 4,173,211 $ 3,856,588 $ 3,723,043 Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 992,094 $ 896,672 $ 815,811 208,357 180,616 177,009 149,408 155,398 136,626 34,620 87,057 73,206 (9,979 ) 14,231 5,928 6,142 782 (26,487 ) $ 1,380,642 $ 1,334,756 $ 1,182,093 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Current: Federal $ 711,369 $ 1,063,141 $ 1,068,778 State 251,187 160,650 213,505 Foreign 238,692 161,974 148,367 Deferred: Federal (62,278 ) (164,523 ) (3,107 ) State (27,831 ) 27,595 (10,583 ) Foreign 2,274 (197 ) 7,849 Provision for income taxes $ 1,113,413 $ 1,248,640 $ 1,424,809 Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 $ 18,872 $ 18,305 7,623 16,242 380,523 351,171 51,823 47,464 91,575 74,451 $ 550,416 $ 507,633 (11,998 ) (5,122 ) $ 538,418 $ 502,511 $ 539,818 $ 474,179 47,374 50,536 49,111 47,443 167,968 181,822 5,418 8,884 $ 809,689 $ 762,864 $ (271,271 ) $ (260,353 ) $ 13,831 $ 22,532 (285,102 ) (282,885 ) $ (271,271 ) $ (260,353 ) In November 2015, the FASB issued ASU 2015-17, “Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes.” This guidance requires deferred tax liabilities, deferred tax assets and valuation allowances be classified as non-current in a classified balance sheet. This ASU is effective for annual reporting periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted and may beF-29applied either prospectively or retrospectively to all periods presented. TJX has elected to early adopt the new reporting standard retrospectively on its fiscal 2016 consolidated financial statements. The classification for deferred tax assets (liabilities) for fiscal 2015 has been recast to reflect the new reporting standard. Current asset, non-current asset and non-current liability balances were $137.6 million, $24.6 million and $422.5 million, respectively on the original financial statements for fiscal 2015. Fiscal Year Ended In thousands February 2,
2019February 3,
2018Deferred tax assets: Net operating loss carryforward $ 49,489 $ 40,088 Reserves for lease obligations 2,799 3,637 Pension, stock compensation, postretirement and employee benefits 273,482 232,887 Leases 45,740 42,999 Accruals and reserves 42,709 51,281 Other 65,776 25,599 Total gross deferred tax assets $ 479,995 $ 396,491 Valuation allowance (51,711 ) (42,332 ) Net deferred tax asset $ 428,284 $ 354,159 Deferred tax liabilities: Property, plant and equipment $ 497,906 $ 437,621 Capitalized inventory 42,981 45,125 Tradename/intangibles 14,019 12,628 Undistributed foreign earnings 1,856 65,013 Other 23,246 20,271 Total deferred tax liabilities $ 580,008 $ 580,658 Net deferred tax (liability) $ (151,724 ) $ (226,499 ) Non-current asset $ 6,467 $ 6,558 Non-current liability (158,191 ) (233,057 ) Total $ (151,724 ) $ (226,499 ) deferred U.S.all applicable state and foreign withholding taxes on all undistributed earnings through January 30, 2016 fromof its foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Hong Kong. ForVietnam through February 2, 2019. We have not provided for state and foreign withholding taxes on the approximately $1.4 billion of undistributed earnings related to all other foreign subsidiaries no income taxes have been provided on the approximately $727 million of undistributed earnings as of January 30, 2016 because such earnings are considered to be indefinitely reinvested in the business. A determination of theThe net amount of unrecognized deferredstate tax liabilityliabilities related to the undistributed earnings is not practicable because of the complexities associated with the hypothetical calculations.January 30, 2016, TJX had availableFebruary 2, 2019 and February 3, 2018, for state income tax purposes, TJX had net operating loss carryforwards of $62.4$133.2 million and $113.9 million respectively, which expire, if unused, in the years 20172020 through 2035. As of January 31, 2015, TJX had available for state income tax purposes net operating loss carryforwards of $61.5 million.2038. TJX has analyzed the realization of the state net operating loss carryforwards on an individual state basis. For those states where the Company has determined that it is more likely than not that the state net operating loss carryforwards will not be realized, a valuation allowance of $5.1$10 million has been provided for the deferred tax asset as of January 30, 2016,February 2, 2019 and $5.1$8.9 million as of January 31, 2015.January 30, 2016,February 2, 2019 and February 3, 2018, the Company had available for foreign income tax purposes (primarily related(related to Germany, Australia, Austria and the Netherlands) net operating loss carryforwards of $51.1$138.8 million and $111 million respectively, of which $3.9$18.3 million will expire, if unused, in fiscal 2025.years 2025 through 2028. The remaining loss carryforwards do not expire. For the deferred tax assets associated with the net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax assets will not be realized, TJX had valuation allowances recorded of approximately $6.9 million. As$41.7 million as of January 31, 2015, the Company had available for foreign income tax purposes (primarily related to GermanyFebruary 2, 2019, and Poland) net operating loss carryforwardsapproximately $33.4 million as of $48.3 million. Fiscal Year Ended January 30,
2016 January 31,
2015 February 1,
2014 35.0 % 35.0 % 35.0 % 3.5 3.6 3.6 (0.7 ) (0.9 ) (0.8 ) (0.1 ) (0.1 ) (2.2 ) 37.7 % 37.6 % 35.6 % Fiscal Year Ended February 2,
2019February 3,
2018January 28,
2017 (53 weeks) U.S. federal statutory income tax rate 21.0 % 33.7 % 35.0 % Effective state income tax rate 4.5 3.6 3.5 Impact of foreign operations 1.2 (0.1 ) (0.2 ) Excess share-based compensation (1.2 ) (1.3 ) — Impact of 2017 Tax Act 1.5 (2.3 ) — All other (0.3 ) (1.2 ) — Worldwide effective income tax rate 26.7 % 32.4 % 38.3 % increaseddecreased for fiscal 20162019 as compared to fiscal 2015.2018. The increasedecrease is primarily driven by the decrease in the effective incomeU.S. federal statutory rate to 21%. The reduced tax rate was primarily due torates per the jurisdictional mix2017 Tax Act were applicable for all of income and the increase in valuation allowance on foreign net operating losses.(net of federal benefit on state issues)$233.4 million as of $34.1February 2, 2019, $57.3 million as of February 3, 2018 and $38.5 million as of January 30, 2016, $32.7 million as of January 31, 2015 and $26.2 million as of February 1, 2014.F-30 Fiscal Year Ended In thousands $ 55,619 $ 48,680 $ 148,777 2,248 4,771 4,212 11,707 5,278 5,096 (23,874 ) (2,747 ) (69,292 ) (389 ) — (317 ) (1,985 ) (363 ) (39,796 ) $ 43,326 $ 55,619 $ 48,680 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017Balance at beginning of year $ 61,704 $ 49,092 $ 43,326 Additions for uncertain tax positions taken in current year 7,406 6,504 7,018 Additions for uncertain tax positions taken in prior years 177,741 7,990 327 Reductions for uncertain tax positions taken in prior years — (587 ) (334 ) Reductions resulting from lapse of statute of limitations (1,388 ) (1,295 ) (1,245 ) Settlements with tax authorities (1,268 ) — — Balance at end of year $ 244,195 $ 61,704 $ 49,092 $39.0$222 million as of February 2, 2019, $55.8 million as of February 3, 2018 and $43.8 million as of January 30, 2016, $34.8 million as of January 31, 2015 and $27.8 million as of February 1, 2014., and in Canada, fiscal years through 2010 are no longer subject to examination. In Canada, fiscal years through 2007 are no longer subject to examination. In all other jurisdictions, fiscal years through 2009 are no longer subject to examination.TJX follows the with and without approach for direct and indirect effects of windfall tax deductions. $1.6$11.9 million for the year ended February 2, 2019, $1.9 million for the year ended February 3, 2018 and $1.4 million for the year ended January 30, 2016, $1.9 million for the year ended January 31, 2015 and $4.0 million for the year ended February 1, 2014.28, 2017. The accrued amounts for interest and penalties are $7.0$23.6 million as of February 2, 2019, $11.9 million as of February 3, 2018 and $8.0 million as of January 30, 2016, $10.1 million as of January 31, 2015 and $8.1 million as of February 1, 2014.statutestatutes of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those represented on the financial statements as of January 30, 2016.February 2, 2019. During the next twelve months, it is reasonably possible that state tax audit resolutions may reduce unrecognized tax benefits by $0 to $11$30 million, which would reduce the provision for taxes on earnings.ten-yearinitial ten year terms and options to extend for one or more five-yearfive year periods in the U.S. and Canada andCanada; initial ten to fifteen year terms in Europe and initial seven to ten year terms in Australia, some of which have options to extend. Many of the Company’s leases contain escalation clauses and we have the right to terminate some of the leases before the expiration date under specified circumstances and some with specified payments. In addition, TJX is generally required to pay insurance, real estate taxes and other operating expenses including, in some cases, rentals based on a percentage of sales. These expenses in the aggregate were approximately one-third of the total minimum rent in fiscal 2016,2019, fiscal 20152018 and fiscal 20142017 and are not included in the table below.January 30, 2016:In thousands Operating
Leases $ 1,368,050 1,273,888 1,150,172 1,005,127 845,910 2,354,674 $ 7,997,821 F-31In thousands Fiscal Year 2020 $ 1,676,700 2021 1,603,378 2022 1,441,444 2023 1,253,420 2024 1,042,184 Later years 2,774,845 Total future minimum lease payments $ 9,791,971 $1,365.6 million$1.7 billion for fiscal 2016, $1,321.6 million2019, $1.6 billion for fiscal 20152018 and $1,238.2 million$1.4 billion for fiscal 2014.2017. Rental expense includes contingent rent and is reported net of sublease income. Contingent rent paid was $15.7$22.8 million in fiscal 2016, $15.22019, $18.4 million in fiscal 20152018 and $15.7$14.7 million in fiscal 2014.2017. Sublease income was $0.9$1.2 million in fiscal 2016, $0.82019, $1.3 million in fiscal 20152018 and $0.9$1.2 million in fiscal 2014.January 30, 2016February 2, 2019 we have twoa number of lease agreements for facilities and stores that resulted in TJX being considered the owner of the property for accounting purposes (see Lease Accounting within Note A). One of the leases is for our home office facility in Canada which did not meet the sale-leaseback criteria and is therefore being accounted for as a financing transaction.purposes. The otherbuild-to-suit lease relates to a facility under construction in Europe. Upon completion, a sale-leaseback analysis will be performed to determine if the Company should record a sale to remove the assets and related obligation and record the lease as either an operating or capital lease obligation. The assets related to these properties are included in “land and buildings” and the related liabilities of $85.2$243.3 million are included as build-to-suit lease obligations in “other long-term liabilities.”$29.3$41.9 million as of January 30, 2016February 2, 2019 and $42.9$40.2 million as of January 31, 2015.February 3, 2018. Letters of credit are issued by TJX primarily for the purchase of inventory.Long Term Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 $ 573,965 $ 470,887 141,295 120,980 132,871 99,487 202,653 205,819 307,350 274,557 65,983 38,514 134,535 118,821 511,007 467,057 $ 2,069,659 $ 1,796,122 Fiscal Year Ended In thousands February 2,
2019February 3,
2018Employee compensation and benefits, current $ 737,920 $ 686,294 Dividends payable 241,972 199,029 Accrued capital additions 119,172 90,336 Rent, utilities and occupancy, including real estate taxes 243,192 234,183 Merchandise credits and gift certificates 450,302 399,482 Sales tax collections and V.A.T. taxes 170,249 200,005 All other current liabilities 770,269 713,632 Total accrued expenses and other current liabilities $ 2,733,076 $ 2,522,961 purchased services and other items, each of which is individually less than 5% of current liabilities. Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 $ 418,156 $ 460,086 216,040 203,216 93,024 97,861 33,403 28,088 85,214 60,733 35,184 38,153 $ 881,021 $ 888,137 Fiscal Year Ended In thousands February 2,
2019February 3,
2018Employee compensation and benefits, long-term $ 449,065 $ 442,624 Accrued rent 269,057 263,178 Landlord allowances 80,425 88,747 Income taxes payable — 176,772 Tax reserve, long-term 235,467 44,753 Build-to-suit lease obligations 243,258 221,917 Asset retirement obligation 49,692 49,266 All other long-term liabilities 27,278 33,248 Total other long-term liabilities $ 1,354,242 $ 1,320,505 Obligations:Obligationsweit had 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 havethe Company has rarely had a claim with respect to assigned leases,F-32we dothe Company does 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.nineeight leases of former TJX businesses, for which we believe the likelihood of future liability to TJX is remote.TJX alsoremote, and 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 or assignees do not fulfill their obligations, are approximately $42.6$37.1 million as of January 30, 2016.February 2, 2019. 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.breach of warranty orcertain losses related to such matters as title to assets sold, specified environmental matters or certain income taxes. These obligations are typicallyoften limited in time and amount. There are no amounts reflected in our balance sheets with respect to these contingent obligations.Contingencies:associatesAssociates 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.statutes. TJX is also a defendant in lawsuits filed in federal courts brought asa putative class actionsaction on behalf of customers relating to TJX’s compare at pricing. The lawsuits are in various procedural stages and seek unspecified monetary damages, injunctive relief and attorneys’ fees. 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. Fiscal Year Ended In thousands January 30,
2016 January 31,
2015 February 1,
2014 $ 64,188 $ 66,265 $ 52,196 1,301,122 1,091,128 1,240,377 $ 20,315 $ 17,377 $ 19,380 33,384 8,254 (6,432 ) $ (30,767 ) $ (60,733 ) $ — 30,767 60,733 — F-33 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Cash paid for: Interest on debt $ 64,007 $ 64,308 $ 72,619 Income taxes 1,147,511 1,289,964 1,282,172 Non-cash investing and financing activity: Build-to-suit construction in progress $ (40,911 ) $ (27,207 ) $ (94,291 ) Build-to-suit lease obligation 40,911 27,207 94,291 Dividends payable 42,943 29,836 29,195 Property additions 28,836 (21,627 ) (20,908 ) 20162019 and fiscal 20152018 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 Second
Quarter Third
Quarter Fourth
Quarter $ 6,865,637 $ 7,363,731 $ 7,753,495 $ 8,962,075 1,945,396 2,144,540 2,246,596 2,573,883 474,601 549,335 587,256 666,466 0.70 0.81 0.88 1.00 0.69 0.80 0.86 0.99 $ 6,491,176 $ 6,917,212 �� $ 7,366,066 $ 8,303,953 1,813,176 1,981,356 2,162,437 2,344,916 454,317 517,624 594,957 648,230 0.65 0.75 0.86 0.95 0.64 0.73 0.85 0.93 Amounts in thousands except per share amounts Fiscal Year Ended February 2, 2019 (52 weeks) Net sales $ 8,688,720 $ 9,331,115 $ 9,825,759 $ 11,127,340 2,510,481 2,695,300 2,842,276 3,093,700 Net income 716,381 739,626 762,253 841,538 0.57 0.59 0.62 0.69 0.56 0.58 0.61 0.68 Fiscal Year Ended February 3, 2018 (53 weeks) Net sales $ 7,784,024 $ 8,357,700 $ 8,762,220 $ 10,960,720 2,253,952 2,385,025 2,612,200 3,111,320 Net income 536,279 552,957 641,436 877,276 0.41 0.43 0.51 0.70 0.41 0.42 0.50 0.69 (1) Gross earnings equal net sales less cost of sales, including buying and occupancy costs. F-34(2) The third quarter of fiscal 2019 includes a $36.1 million pension settlement charge. (3) (4) Adjusted for two-for-one stock split completed in November 2018. See Note D - Capital Stock and Earnings Per Share.