[ 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 | ||||
2023
[ ] 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) | ( | |||||
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770 Cochituate Road Framingham, Massachusetts | 01701 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, par value $1.00 per share | TJX | New York Stock Exchange | ||||||
Yes
☒ No ☐Yes
☐ No ☒Yes
☒ No ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[ ]
Yes
☒ No ☐.| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||||||||
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| Emerging growth company | ☐ | |||||||||||||||||||
Yes
☐ No ☒Form 10-K and our 2022 Annual Report to Shareholders. vendor relationships. In addition to our four main segments, we operate the Sierra business. The results of Sierra are included with the Marmaxx segment. 2013 and marshalls.com, launched in 2019. expanded departments, such as large furniture, ceiling lighting and rugs, as well as a general store and an entertaining marketplace. CANADA department. INTERNATIONAL acquire some merchandise that we offer under in-house brands or brands that are licensed to us. We develop some of this merchandise ourselves, 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 There may be additional risks that we are not aware of or that we currently believe are immaterial, and factors besides the ones discussed below, that could adversely affect our business. global pandemic. competitors are larger than we are or have more experience than we do in selling certain product lines or through certain channels. New competitors frequently enter the market. Additionally, existing competitors may enter or increase their presence in markets in which we operate, consolidate with other retailers, expand their merchandise offerings, expand their e-commerce capabilities, and/or add new sales channels or change their pricing strategies. More generally, consumer e-commerce spending may continue to increase, as it has in recent years, while our business is primarily in brick and mortar stores. If we fail to compete effectively, our sales and results of operations could be adversely affected. 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 most of our leases if or when we would like to do so. If we decide or are required to permanently close stores, we are typically 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 significant. When we assign leases to third parties, or if we sell or close a business, we can remain liable on the lease obligations for the balance of the term and we are contingently liable if the assignee does not perform (as was the case with some of our former operations). We also remain primarily liable if we sublease space to a third party. In addition, when the lease terms for the stores in our ongoing operations expire, we may be unable to negotiate renewals, either on commercially reasonable terms or at all, which could cause us to permanently close stores or to relocate stores within a market on less favorable terms or in a less favorable location. commodities. condition. Marshalls. HomeGoods operates HomeGoods and Homesense. First Second Third Fourth 1,933. Total Number of Shares Total Number of Shares Plans or Programs(3) October 30, 2016 through November 26, 2016 November 27, 2016 through December 31, 2016 January 1, 2017 through January 28, 2017 Total: Dollars in millions except per share amounts January 28, 2017 January 30, 2016 January 31, 2015 February 1, 2014 February 2, 2013 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 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 Reserved net sales. partially offset by a 2% negative impact from foreign currency exchange rates. The non-comp store sales increase reflects a fully open store base for fiscal 2023 compared to temporary store closures in fiscal 2022. Net sales from our e-commerce reports the open-only comp store sales for our Marmaxx and HomeGoods segments. Net sales Cost of sales, including buying and occupancy costs Selling, general and administrative expenses Loss on early extinguishment of debt Pension settlement charge Interest expense, net Income before provision for income taxes* Diluted earnings per share follows: exchange”. This primarily includes the impact that foreign currency exchange rates may have on the year-over-year comparison of merchandise margin as well as “foreign currency gains and losses” on transactions that are denominated in a currency other than the operating division's local currency. These two items can impact segment margin comparison of our foreign divisions and we have highlighted them when they are meaningful to understanding operating trends. fiscal 2023. Interest expense Capitalized interest Interest (income) Interest expense, net losses, partially offset by a reduction of excess tax benefits from share-based compensation. 2022. segments. SEGMENTS 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 STP Total Selling square footage at end of period (in thousands) T.J. Maxx Marshalls STP Total 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) of approximately 3 percentage points as well as higher markdowns, partially offset by strong markon. 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 incremental freight costs for fiscal 2023. 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 General corporate expense use, operating cash flow and cash on hand to repay portions of our indebtedness, depending on prevailing market conditions, liquidity requirements, existing economic conditions, contractual restrictions and other factors. As such, we may, from time to time, seek to retire, redeem, prepay or purchase our outstanding debt through redemptions, cash purchases, prepayments, refinancings and/or exchanges, in open market purchases, privately negotiated transactions, by tender offer or otherwise. If we use our operating cash flow and/or cash on hand to repay our debt, it will reduce the amount of cash available for additional capital expenditures. New stores Store renovations and improvements Office and distribution centers Capital expenditures other information systems) to support growth, approximately As of January 28, 2023, approximately $3.5 billion remained available under our existing stock repurchase programs. For further information regarding equity repurchases, see Note D—Capital Stock and Earnings Per Share of Notes to Consolidated Financial Statements. 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 ESTIMATES than not, based on the technical merits, that the positions we have taken will not be sustained. However, in the next twelve months and in future periods, the amounts we accrue for uncertain tax positions from time to time or ultimately pay, as the result of the final resolutions of examinations, judicial or administrative proceedings, changes in facts, law, or legal interpretations, in fiscal 2022. preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: 2023. Schedule FINANCIAL STATEMENT SCHEDULE Balance End of Sales Return Reserve: Fiscal Year Ended January 28, 2017 Fiscal Year Ended January 30, 2016 Fiscal Year Ended January 31, 2015 Casualty Insurance Reserve: Fiscal Year Ended January 28, 2017 Fiscal Year Ended January 30, 2016 Fiscal Year Ended January 31, 2015 applicable. /s/ ERNIE HERRMAN Michael F. Hines, Director CAROL MEYROWITZ* JACKWYN L. NEMEROV* Consolidated Financial Statements: Financial Statement Schedules: 29, 2023 Amounts in thousands except per share amounts January 28, 2017 January 30, 2016 January 31, 2015 Net sales Cost of sales, including buying and occupancy costs Selling, general and administrative expenses Loss on early extinguishment of debt Pension settlement charge 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 28, 2017 January 30, 2016 January 31, 2015 Net income Additions to other comprehensive income: Foreign currency translation adjustments, net of related tax provision of $25,656 in fiscal 2017, and benefits of $41,048 and $56,567 in fiscal 2016 and 2015, 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 benefit of $7,394, provision of $6,335, and benefit of $91,941 in fiscal 2017, 2016 and 2015, respectively Reclassifications from other comprehensive income to net income: Pension settlement charge, net of related tax provision of $12,369 in fiscal 2017 Amortization of loss on cash flow hedge, net of related tax provisions of $450, $450 and $300 in fiscal 2017, 2016 and 2015, respectively Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $11,584, $13,501, and $4,591 in fiscal 2017, 2016 and 2015, 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 Total current assets Net property at cost Non-current deferred income taxes, net Goodwill Other assets 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 M and Note O) 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 646,319,046 and 663,495,715, 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 (benefit) provision Share-based compensation Loss on early extinguishment of debt Pension settlement charge Excess tax benefits from share-based compensation Changes in assets and liabilities: (Increase) in accounts receivable Decrease (increase) in merchandise inventories (Increase) in prepaid expenses and other current assets Increase in accounts payable Increase 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 Acquisition of Trade Secret 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 increase (decrease) 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 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 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 28, 2017 30, 2021 (“fiscal 2021”) were 52-week fiscal years. Fiscal 2024 will be a 53-week fiscal year and will end February 3, 2024. other current assets” on the Company’s Consolidated Balance Sheets. Interest expense Capitalized interest Interest (income) Interest expense, net expense, net: 3 to 10 years. Depreciation and amortization expense for property was lease accounting. 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 Effect of exchange rate changes on goodwill Balance, January 28, 2017 segment: acquired by TJX in fiscal 2013 and the value assigned to the name “Trade Secret,” acquired by TJX in fiscal 2016. The tradenames were valued tradenames: 2023 or fiscal 2022. fiscal 2021. 2021. disclosed. Property at Cost Current assets Property and equipment Goodwill and intangible assets Total assets acquired Total liabilities assumed Net assets acquired Land and buildings Leasehold costs and improvements Furniture, fixtures and equipment Total property at cost Less accumulated depreciation and amortization Net property at cost January 28, 2017 January 30, 2016 United States Canada Europe Australia Total long-lived assets hedge on issued debt, all of which are recorded net of the related income tax effects. The following table details the changes in Deferred Benefit Costs 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 Foreign currency translation adjustments (net of taxes of $25,656) Recognition of net gains/losses on benefit obligations (net of taxes of $7,394) Pension settlement charge (net of taxes of $12,369) 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 $11,584) Balance, January 28, 2017 2021: Under this program and previously announced programs, TJX had approximately $3.5 billion available for repurchase as of January 28, 2023. January 28, 2017 January 30, 2016 January 31, 2015 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 in the fourth quarter of fiscal 2021. fuel requirements for fiscal Blended Contract Rate Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts — 2.5M gal Intercompany billings in Europe, primarily merchandise related Merchandise purchase commitments Total fair value of financial instruments 2023: Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts — 3.0M gal per — 3.0M gal per Intercompany billings in Europe, primarily merchandise related Merchandise purchase commitments Total fair value of financial instruments 29, 2022: 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 (Loss) Gain recognized in income Income is presented below: Measurements The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring basis: 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 For additional information on long-term debt, see Note J—Long-Term Debt and Credit Lines. The percentages of Apparel Clothing including footwear Jewelry and accessories Home fashions Total January 28, 2017 January 30, 2016 January 31, 2015 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 Pension settlement charge Interest expense, net Income before provision for income taxes January 28, 2017 January 30, 2016 January 31, 2015 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) 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: 2021. Options outstanding expected to vest Options exercisable Total outstanding options vested and expected to vest share-based compensation charge of $37 million in fiscal 2022. There were no modifications to stock awards in fiscal 2023. Nonvested at beginning of year Granted Vested Forfeited Nonvested at end of year 2021. 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 Settlements 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 Settlements 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) assets. Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended Discount rate Rate of compensation increase 2024. 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 Settlement charge Total expense Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net (gain) loss Amortization of net (loss) Settlement charge 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 plans: Funded Plan Expected Benefit Payments Unfunded Plan Expected Benefit Payments Fiscal Year 2018 2019 2020 2021 2022 2023 through 2027 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 Futures Contracts Total assets in the fair value hierarchy Assets measured at net asset value* Fair value of assets assets presented above. Actual Allocation for Fiscal Year Ended Return-seeking assets (previously equity securities) Liability-hedging assets (previously fixed income) All other – primarily cash 2021. 2021. adopted by these plans. General corporate debt: 6.95% senior unsecured notes, redeemed on October 12, 2016 (effective interest rate of 6.98% after reduction of unamortized debt discount of $223 in fiscal 2016) 2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $278 and $323 in fiscal 2017 and 2016, respectively) 2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $325 and $400 in fiscal 2017 and 2016, respectively) 2.25% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $7,149 in fiscal 2017) Debt issuance cost Long-term debt Fiscal Year 2019 2020 2021 2022 Later years Less amount representing unamortized debt discount Less amount representing debt issuance cost Aggregate maturities of long-term debt 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 Pension, stock compensation, postretirement and employee benefits Leases Accruals and reserves 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 material. 29, 2022. U.S. federal statutory income tax rate Effective state income tax rate Impact of foreign operations All other Worldwide effective income tax rate losses, partially offset by a reduction of excess tax benefits from share-based compensation. 2021. January 28, 2017 January 30, 2016 January 31, 2015 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 2021. 2021. L. Leases 2021 for a significant number of its stores. Fiscal Year 2018 2019 2020 2021 2022 Later years Total future minimum lease payments 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 Asset retirement obligation All other long-term liabilities Other long-term liabilities Commitments Contractual Obligations Consolidated Financial Statements for certain of its legal proceedings. 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 Fiscal Year Ended January 28, 2017 Net sales Gross earnings(1) Net income Basic earnings per share Diluted earnings per share Fiscal Year Ended January 30, 2016 Net sales Gross earnings(1) Net income Basic earnings per share Diluted earnings per share 2022.20162022 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,” relating to, among other things, the availability of merchandise, execution, payment of dividends, plans for future stock repurchases, future use and availability of cash and cash equivalents, expected capital expenditures, trends in demand for our products, the impact of foreign exchange rates and expectations with respect to future store openings, and in our 20162022 Annual Report to Shareholders underin our letter to shareholders and our performance graphs.shareholders. Forward-looking statements are inherently subject to risks, uncertainties and potentially inaccurate assumptions.assumptions that could cause actual results to differ materially from those expressed or implied by such statements. 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,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,“goal,” “looking forward,“intend,” “may,” “plan,” “potential,” “project,” “seek,” “should,” “target,” “will” and “would” or any variations of these words or other words with similar meanings.meanings, although not all forward-looking statements contain these identifying words. 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.TheApplicable risks and uncertainties include, among others: execution of buying strategy and inventory management; customer trends and preferences; competition; various marketing efforts; operational and business expansion; management of large size and scale; the ongoing COVID-19 pandemic and associated containment and remediation efforts; merchandise sourcing and transport; data security and maintenance and development of information technology systems; labor costs and workforce challenges; personnel recruitment, training and retention; corporate and retail banner reputation; evolving corporate governance and public disclosure regulations and expectations with respect to environmental, social and governance matters; expanding international operations; fluctuations in quarterly operating results and market expectations; inventory or asset loss;cash flow; mergers, acquisitions, or business investments and divestitures, closings or business consolidations; real estate activities; economic conditions and consumer spending; market instability; severe weather, serious disruptions or catastrophic events; disproportionate impact of disruptions in the second half of the fiscal year; commodity availability and pricing; fluctuations in currency exchange rates; compliance with laws, regulations and orders and changes in laws, regulations and applicable accounting standards; outcomes of litigation, legal proceedings and other legal or regulatory matters; quality, safety and other issues with our merchandise; tax matters; and other factors set forth under Item 1A of this Form 10-K describe major risks to our business. 10-K.You should bearWe caution investors, potential investors and others not to place considerable reliance on the forward-looking statements contained in this in mind as you consider forward-looking statements.otherwise.otherwise, unless required by law. You are advised, however, to consult any further disclosures we may make in our future reports to the Securities and Exchange Commission (SEC)(“SEC”), on our website, or otherwise.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. We have over 3,8004,800 stores and five distinctive branded e-commerce sites 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 retail prices on comparable merchandise, every day.are known forand online, we offer consumers our value proposition of brand, fashion, price and quality. Our opportunistic buying strategies and flexible business model differentiate us from traditional retailers. We offer a treasure hunt shopping experience and a rapid turn of inventories relative to traditional retailers. Our goal is to create a sense of excitement and urgency for our customers and encourage frequent customer visits. We acquire merchandise in a variety of ways to support that goal. We reach a broad range of customers across many income levels and across other demographic groups with our value proposition.proposition on a wide range of items. 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 alsocompany. Further, we can leverage the substantial buying power of our businesses inwith our global relationships with vendors.Businesses.Businesses:(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 2,2212,482 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 sectiondepartment called The Runway at T.J. Maxx and a full line of footwear and 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. OurMarmaxx currently operates two e-commerce website,sites, tjmaxx.com, was launched in 2013.:chain,segment operates HomeGoods and Homesense chains. HomeGoods, introduced in 1992, is the leading off-price retailer of home fashions in the U.S. Through its 579894 stores and its e-commerce site, homegoods.com, launched in 2021, 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 around the worldtabletop and other merchandise.We anticipate openingcookware, as well as expanded pet and gourmet food departments. In 2017, we launched our second home conceptHomesense chain in the U.S. in fiscal 2018. Our approach will be to differentiate these two home concepts through different product assortments, similar to our approach with T.J. Maxx46 Homesense stores complement HomeGoods, offering a differentiated mix and Marshalls stores.CANADA:Acquired in 1990, Winners is the leading off-price family apparel and home fashions retailer in Canada. The merchandise offering at its 255Canada and was acquired by TJX in 1990. Winners operates 297 stores, across Canada is comparable to T.J. Maxx, with select stores offering fine jewelry and some featuring The Runway, a high-end designer section. We opened ourdepartment. HomeSense chain in 2001, bringingintroduced the off-price home fashions off-price concept to Canada. HomeSense has 106 stores with a merchandise mix of home fashions similar to HomeGoods. We brought Marshalls to Canada in 2001. This chain operates 151 stores and offers an array of home decor, basics, furniture, and seasonal home merchandise. Marshalls, launched in Canada in 2011, operates 106 stores and operate 57offers off-price values on family apparel and home fashions. Marshalls stores in Canada. As3with Marshalls in the U.S., our Canadian Marshalls stores offerhas an expanded footweardress department, and The CubeCUBE, a juniors’ department, differentiating them from Winners stores.INTERNATIONAL: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 503629 stores in Europe, T.K. Maxx operates in the U.K., Ireland, Germany, Poland, Austria and the Netherlands. Through its stores and its e-commerce websitesite 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 4478 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 74 stores in Australia is comparable to T.J. Maxx.In addition to our four main segments, we operate Sierra Trading Post, 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 1998 and operates 12 retail stores in the U.S.Model.Model fashionable, brand name and designer merchandise at excellent values every day. Our buying and inventory management strategies give us flexibility to adjust our merchandise assortments more frequently than traditional retailers, and the design and operation of our stores and distribution centers support this flexibility. Our merchantsbuyers have more visibility into consumer, fashion and market trends and pricing when we buy closer to need, which can help us “buy smarter”buy better 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 gettingdelivering the right merchandise to the right stores at the right time.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 1,000over 1,200 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.order cancellations, manufacturer overruns, closeouts from brands, manufacturers and other retailers; special production direct from brands and factories.factories; order cancellations and manufacturer overruns. Our global buying strategies are intentionally flexible to allow us to react to frequently changing opportunities and trends in the market and to adjust how and what we source as well as when we source it. Our goal is to operate with lean inventory levels compared to conventional retailers to give us the flexibility to seek out and to take advantage of these opportunities as they arise.arise, close to the time the merchandise 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 also4in orderwhich allows us to supplement the depth of, or fill gaps in, our expected merchandise assortment.Our expansive vendor universe, which is in excess of 18,000, consists primarily of manufacturers along withandmade up our expansive universe of approximately 21,000 vendors across the globe, including thousands of new vendors in 2022, 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 storesstores and to target specific markets; we pay promptly; we generally dopromptly according to our payment terms; our practice is to 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.Managementcontinue 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 doOur practice is to 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.Operationsbut, relative to other retailers, do not spendwithout spending heavily on store fixtures. Additionally, our distribution network is designed to run cost effectively.Experience.Experiencecontinue tostrategically renovate and upgrade our stores across our retail banners to enhance our customers’ shopping experience and help drive sales. Although we offer a self-service format, we train our store Associates to provide friendly and helpful customer service and seek to staff our stores to deliver a positive shopping experience. We typically offer customer-friendly return policies. We accept a variety of payment methods including cash, credit cards and debit cards. We also offer TJX-branded credit cards in the U.S. through a bank, but do not own the customer receivables.Distribution.approximately 16approximately 26 million square feet in six countries including a third-party operated distribution center in Australia.. 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, fulfillment centers and warehouses 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, our growth estimates for fiscal 2018 andas well as our estimates of the long-term store growth potential of these segments in their current geographies: Approximate
Average Store
Size (square feet) Number of Stores at Year End
Growth
Potential Fiscal 2016 Fiscal 2017 Fiscal 2018
(estimated) 28,000 1,156 1,186 30,000 1,007 1,035 2,163 2,221 2,286 3,000 24,000 526 579 660 1,000 28,000 245 255 23,000 101 106 29,000 41 57 387 418 453 500 30,000 456 503 20,000 39 44 22,000 35 35 530 582 631 1,100 (2) 3,614 (1) 3,812 (1) 4,061 (1)(3) 5,600 (1)The TJX total includes 8 Sierra Trading Post stores for fiscal 2016, 12 Sierra Trading Post stores for fiscal 2017, and 27 Sierra Trading Post stores estimated for fiscal 2018; however, Sierra Trading Post stores are not included in estimated store growth potential.(2)Reflects store growth potential for T.K. Maxx in current geographies, for HomeSense in the United Kingdom and for Trade Secret in Australia only.(3)TJX total includes four of our new home concept stores for fiscal 2018; these are not reflected in estimated store growth potential. Approximate
Average Store
Size (square feet)Number of Stores at Year End Estimated Store
Potential Fiscal 2022 Fiscal 2023 Marmaxx: T.J. Maxx 27,000 1,284 1,299 Marshalls 28,000 1,148 1,183 Total Marmaxx 2,432 2,482 3,000 HomeGoods: HomeGoods 23,000 850 894 Homesense 27,000 39 46 Total HomeGoods 889 940 1,500 TJX Canada: Winners 27,000 293 297 HomeSense 23,000 147 151 Marshalls 26,000 106 106 Total TJX Canada 546 554 650 TJX International: T.K. Maxx (Europe) 28,000 618 629 Homesense (Europe) 19,000 77 78 T.K. Maxx (Australia) 21,000 68 74 Total TJX International 763 781 1,125 (a) 4,689 4,835 6,275 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 2017 Fiscal 2016 Fiscal 2015 24 % 24 % 23 % 12 12 12 25 25 25 16 16 16 77 77 76 10 9 10 13 14 14 100 % 100 % 100 % Revenue from Australia was not material during fiscal 2017 or fiscal 2016.6The percentages of our consolidated revenues by major product category for the last three fiscal years are as follows: Fiscal 2017 Fiscal 2016 Fiscal 2015 54 % 55 % 57 % 15 15 14 31 30 29 100 % 100 % 100 % Information about our long-lived assets by geography for the last three fiscal years can be found in Note C 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 H to the consolidated financial statements.7STORE LOCATIONSOur chains operated stores in the following locations at the end of fiscal 2017:United States: T.J. Maxx Marshalls HomeGoods Sierra Trading Post 23 5 4 — 14 16 11 — 11 4 4 — 115 141 70 — 16 10 9 3 28 24 12 1 3 5 3 — 4 4 — — 88 90 53 — 48 33 20 — 5 — — — 7 1 1 1 47 47 26 — 23 12 6 — 11 6 2 — 9 6 3 — 15 5 4 — 13 11 4 — 9 4 3 — 25 29 15 — 52 57 27 — 41 26 16 — 15 15 11 1 10 5 3 — 17 16 7 — 6 — — — 4 3 2 — 9 10 6 1 16 9 8 — 39 49 32 — 5 4 2 — 76 77 43 — 37 26 15 — 3 1 1 — 45 31 16 — 11 5 2 — 12 10 7 — 47 38 25 — 9 20 6 — 6 6 5 — 21 11 6 — 2 — — — 25 18 7 — 64 81 38 — 12 3 5 1 5 1 1 1 35 29 19 — 19 19 10 1 6 3 1 — 21 8 8 — 2 1 — 2 1,186 1,035 579 12 Store counts above include the T.J. Maxx, Marshalls or HomeGoods portion of a superstore.8Canada: Winners HomeSense Marshalls 32 15 7 35 16 7 7 1 2 4 3 1 3 1 — 11 2 2 113 50 30 1 1 — 45 15 7 4 2 1 255 106 57 Store counts above include the Winners or HomeSense portion of a superstore.Europe: T.K. Maxx HomeSense 323 44 26 — 108 — 34 — 7 — 5 — 503 44 Australia:Trade SecretAustralian Capital Territory2New South Wales11Queensland17Victoria5Total Stores35Competition.service and online shopping experience;experience and service; reputation and store location. We compete with local, regional, national and international department, specialty, off-price, discount, warehouse and outlet stores as well as other retailers that sell apparel, home fashions and other merchandise that we sell, whether in stores, online, or through catalogues, on-line or other media or channels.Employees. At2017,2023, we had approximately 235,000 329,000 employees (who we refer to as Associates), many of whom workworked less than 40 hours per week. In addition, weApproximately 86% of these Associates worked in our retail stores. We hire thousands of temporary employees each year, particularly during the peak back-to-school and holiday seasons.Trademarks. We offer positions at a variety of levels in our stores, distribution and fulfillment centers, and offices, as well as many opportunities for Associates to grow and advance. Many Associates in our distribution centers in the United States and Canada are covered by collective bargaining agreements and other Associates are members of works councils in Europe. Our large, global 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 merchandise in over 4,800 retail stores in nine countries and across five distinctive branded e-commerce sites. We believe our Associates are key to our business success, and we have remained committed to prioritizing the health and safety of our Associates. 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..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).Fiscal 2015 means the fiscal year ended January 31, 2015, fiscal 2016 means the fiscal year ended January 30, 2016, fiscal 2017 means the fiscal year ended January 28, 2017 and fiscal 2018 means the fiscal year ending February 3, 2018. Unless otherwise indicated, all store information in this Item 1 is as of January 28, 2017, 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. OF THE REGISTRANT28, 2017:29, 2023:Name Age AgeOffice and Business Experience Kenneth Canestrari 61 55Senior Executive Vice President, Group President since September 2014. President, HomeGoods from 2012 to September 2014. Executive Vice President, Chief Operating Officer, HomeGoods from 2008 until 2012. Various financial positions with TJX from 1988 to 2008. Scott Goldenberg 69 63Senior Executive Vice President, Finance since January 2023. Senior Executive Vice President and Chief Financial Officer sincefrom April 2014;2014 to January 2023; 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.Louise Greenlees 60 Senior Executive Vice President, Group President since June 2022. President, TJX Europe from January 2015 to June 2022. Managing Director, TJX Europe from January 2014 to January 2015. Group Buying Director, TJX Europe from April 2013 to January 2014. Homesense Managing Director, from December 2010 to April 2013. Ernie Herrman 62 56Chief 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. 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. John Klinger 58 Michael MacMillan60Senior Executive Vice President Group Presidentand Chief Financial Officer since 2011. President, Marmaxx from 2008 to 2011. President, Winners Merchants International (WMI) from 2003 to 2008.January 2023. Executive Vice President, WMICorporate Controller from 20002019 to 2003. Previous financeJanuary 2023. Senior Vice President, Corporate Controller from 2015 to 2019. Senior Vice President, Divisional Chief Financial Officer, TJX Europe from 2011 to 2015. Vice President, Corporate Finance from 2011 to 2011. Vice President, Divisional Chief Financial Officer for AJWright from 2007 to 2011. Various financial positions with TJX from 1985 tosince joining in 2000.Carol Meyrowitz 69 63Executive 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 63 Richard Sherr60Senior Executive Vice President, Group President since January 2012.February 2018. President, HomeGoodsTJX Canada from October 2011 to February 2018. Managing Director T.K. Maxx, UK from April 2010 to 2012.October 2011. Executive Vice President, Chief Operating Officer, MarmaxxWMI from 2007 untilFebruary 2006 to April 2010. Senior Vice President, Director of Store Operations, WMI from 2004 to 2006. Various merchandisingstore operations positions with TJX from 19921988 to 2007.2004.1020172023 and until their successors are elected and qualified.ITEM 1A.Risk Factorsof the other information set forth in this annual report on Form 10-K. The risks that followlisted below are those that we think, individually or in the aggregate, are potentially material to our business and could cause our actual results to differ materially from those stated or implied in forward-looking statements. management could adversely affect our results.Whileare key elements of our off-price business strategy, they subject us to risks related to the pricing, quantity, mix, nature and timing of inventory flowing to our stores.risks. Our merchants are in the marketplace frequently, as much of our merchandise is purchased for the current or immediately upcoming season,customer traffic and our opportunistic buying places considerable discretion with them. Our business model expects them to react to frequently changing opportunitiessales, margins, 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. Ifother financial results could be adversely affected if we do not obtain the right merchandise at the right times, in the right quantities, at the right prices, and in the right mix,mix.as well asand our sales, margins, and margins,other financial results could be adversely affected.We base our purchases of inventory, in part, on our sales forecasts. If our sales forecasts domerchandise is not match customer demand, we may experience higher inventory levels and need to take markdowns on excess or slow-moving inventory, leading to decreased profit margins, or we may have insufficient inventory to meet customer demand, leading to lost sales, either of which could adversely affect our financial performance.If we are unable to generally purchase inventorypurchased at prices sufficiently below prices paid by conventional retailers, we may not be able to maintain anour desired overall pricing differential to regularfull-price retailers, including department, specialty, and specialty stores, and our ability to attract customers or sustain our margins may be adversely affected. We may not achieve this pricing differentialmajor online retailers, at various times or in some reporting segments, chainsbanners, product categories or geographies, which could adversely affect our results.Similarly, we must also properly execute our inventory management strategy of distributing the right productgeographies. the right stores in the right quantities at the right time. To respond to customer demand and effectively manage pricing and markdowns, we need to appropriately allocate and deliver merchandise to our stores, maintain an appropriate mix and level of inventory in each store and appropriately change thebe flexible in our allocation of floor space at our stores among product categories. We also base our inventory purchases, in part, on our sales forecasts. If our sales forecasts do not match customer demand, we are not ablemay experience higher inventory levels and need to do so, our abilitytake markdowns on excess or slow-moving inventory, or we may have insufficient inventory to attract and retain customers and our results could be adversely affected.Failure to continue to expand our business and operations successfully or to manage our substantial size and scale effectivelymeet customer demand, either of which could adversely affect our financial results.Our growthperformance.includes successfully expanding 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 ourinventory management. Our ability to continue to expand successfully,allocate, deliver, and maintain our preferred mix and level of inventory has been impacted in recent years by temporary store closures, inflationary pressures and global supply chain disruptions, including, managing the implementation of this growth effectively. If any aspect of our expansion strategy does not achieve the success we expect,for example, an increase in whole or in part, we may fail to meet our financial performance expectations, be required to increase our investment, slow our planned growth or close stores or operations. For example, successful store growth requires us to findcompetition for limited shipping capacity and lease appropriate real estate on attractive terms in each of the locations where we seek to open stores. The success of this process depends on many factors, including availability of appropriate sites; real estate, constructionother operational and development costs; costs and availability of capital; and zoning or other land use regulations. If we cannot lease appropriate sites on attractive terms, it could limit our ability to successfully grow in various markets or adversely affect the economics of new stores in various markets. Similarly, new stores may not achieve the same sales or profit11levels as our existing stores, whether in current or new markets, or adding stores or banners to existing markets may otherwise adversely affect our sales and profitability.Further, our substantial size imposes demands on effectively managing our complex operations and maintaining appropriate internal resources and third party providers to support our business effectively. These demands may increase as we grow our business, adding pressure to management and various functions across our business, including administration, systems, merchandising, store operations, distribution and compliance, and on appropriately staffing and training Associates in these areas as we grow. The large size and scale of our operations, our multiple banners and locations in the U.S., Canada, Europe and Australia and the autonomy affordedmarket changes related to the banners in some aspects of the business increase the risk that our systems, controls, practices and policies will 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 as 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, we may operate with decreased operational efficiency, may need to reduce our rate of expansion of one or more operations or otherwise curtail growth in one or more markets, which may adversely affect our success in executing our business goals and adversely impact our sales and results.meetsmeet those trends and preferences. However, doingwe may not do so oneffectively and/or in a timely basismanner 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.anticipate and could change rapidly. Although our business model allows us greater flexibility to meet consumer product preferences and trends than many traditional retailers to meet consumer preferences(for example, by expanding and trends and to expand and contractcontracting merchandise categories in response to consumers’ changing tastes,tastes), we may not successfully do so, which could impact inventory turns, customer traffic, and sales, and may add difficulty in attracting new customers, retaining existing customers, and encouraging frequent customer visits, andwhich could adversely affect our results.(through Internet-based and other(for example, through various digital or mobile channels or particular forms of social media outlets), whichplatforms). These expectations may vary both across and within demographics and geographies and may evolve rapidly.rapidly or be impacted by external factors, including the COVID-19 pandemic. Meeting these expectations effectively generally 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 reputationfinancial results.financial results.various marketing efforts, if our marketing efforts are not successful in driving expected traffic to our stores or if our competitorscompetitors’ marketing 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 banners and the location of and service offered in our stores.efforts. Although we use various marketing channels to drive customer traffic, through various media including traditional format linear television, radio, print,streaming video, audio, outdoor, digital/social media, email,and mobile, and direct mail, some of our competitors may expend more for their marketing programs than we do, or use different approaches than we do, which may provide them with a competitive advantage. Further, we may not effectively implement strategies with respect to rapidly evolving Internet-based and other digital or mobile communication channels and other social media. Our programs 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.We operate in highly competitive markets, and we may not be able to compete effectively.The retail apparel and home fashion businesses are highly competitive. We compete with local, regional, national and international retailers that sell apparel, home fashions and other merchandise we sell, including in stores, through e-commerce, catalogueseffectively develop or other media or channels. Some of our competitors are larger than we are or have more experience in selling certain product lines than we do. New competitors frequently enter the12market and existing competitors enter or increase their presenceimplement strategies in the markets in which we operate, expand their merchandise offerings, add new sales channelsrapidly evolving digital/social media channels. If our marketing efforts are not as successful or change their pricing strategies, all of which affect the competitive landscape. We compete on the basis of value, meaning a combination of brand, fashion, price, and quality; merchandise selection and freshness; banner name recognition and appeal; customer service; reputation and store location. If we fail to compete effectively,cost effective as anticipated, our salesrevenue and results of operations could be adversely affected.includingand to retain key Associates and management could adversely affect our performance.Our performance depends on recruiting, hiring, developing, training and retaining talented Associates in key areas such as buying and management as well as quality store, systems, distribution center and other Associates in numbers. A significant number of capable, engaged Associates 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. Availabilityturnover and at times find seasonal talent in sufficient numbers. The availability and skill of Associates may differ across markets in which we do business and in new markets we enter, and we may be unable to meet or manage our labor needs effectively. In addition, becausedue to the COVID-19 pandemic and current economic conditions, we have faced and may continue to face additional challenges in recruiting or retaining sufficient talent due to shifts in the labor market, wage pressures and competition, and health and safety concerns, among other factors. We also have faced and may continue to face challenges in engaging, overseeing and training Associates who work remotely several days each week or work primarily remotely. We also have faced and may continue to face potential challenges relating to Associates’ willingness or ability to staff our stores and distribution centers or otherwise continue employment as a result of the distinctive nature of our off-price model, we must provide significant internalhealth concerns, economic pressures or otherwise.development forretaining talented Associates in key Associates across the company, including within ourareas such as buying organization.and management. 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, from other industries, and for talent in various geographic markets. In addition, because of the distinctive nature of our off-price model, we must provide significant internal training and development, including doing so remotely in some cases, for key Associates across the Company, including within our buying organization, and must effectively manage succession planning. If we do not effectively attract qualified individuals, train them in our business model, support their development, engage them in our business, and retain them in sufficient numbers and at appropriate levels of the organization, our growth could be limited, and the successful execution of our performancebusiness model could be adversely affected.Labor costs, including pension and healthcare costs, and other challenges from our large workforce may adversely affect our results and profitability.We have a large workforce, and our ability to meet our labor needs and control labor costs is subject to various factors such as unemployment levels; prevailing wage rates and wage requirements; participant benefit levels; changing demographics; economic conditions; interest rate changes; economic, demographic and other actuarial assumptions; health and other insurance costs and a dynamic 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 employment benefits may adversely affect our results of operations. In addition, when wage rates or benefit levels increase in a market, increasing our wages or benefits may negatively impact our earnings as they did during fiscal 2016 and fiscal 2017, while failing to increase our wages or benefits competitively or reducing our wages or benefits, could result in a decline in our ability to attract or retain Associates or in the quality of our workforce, causing our customer service or performance to suffer, which could impact our results. Many Associates in our distribution centers are members of unions and therefore subject us to the risk of labor actions of various kinds as well as risks and potential material expenses associated with multiemployer plans, including from plan underfunding, benefit cuts, withdrawal liability, or insolvency of other participating employers or governmental insurance programs. Other Associates are members of works councils, which may subject us to additional actions or expense.Compromises of our data security could materially harm our reputation and business.In the ordinary course of our business, we collect, store, process and transmit certain information from individuals, such as our customers and Associates, including, for example, customer payment card and check information. We rely in part on commercially available systems, software, hardware, services, tools and monitoring to provide security for collection, storage, processing, and transmission of personal and/or confidential information. As with many other companies, particularly in the retail industry, we are subject to 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 systems 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 security13compromise, that unauthorized parties will not gain access to the information that we collect, store, process or transmit or otherwise interfere with our systems, or that any such data security compromise or unauthorized access will be discovered in a timely way. In addition, an Associate, contractor or third parties with whom we work or to whom we outsource business operations may fail to monitor their or our systems effectively, may fail to maintain appropriate safeguards, may misuse the personal or confidential information to which they have access, may attempt to circumvent our security measures in order to access or misappropriate such types of information or may purposefully or, through error, inadvertently cause a breach involving, or otherwise disclose, such information. Advances in computer and software technology and capabilities, rapid changes in the sources, methods and targets of cyber-attacks and other developments, including the increasing sophistication of cyber criminals generally, may increase the risk of such a breach.Compromise of our data security or that of third parties with whom we work or to whom we outsource business operations, including through cyber-attacks or other external or internal methods or error, failure to prevent or mitigate the loss of personal or business information and delays in detecting any such compromise or loss could disrupt our operations, damage our reputation and decrease our customers’ willingness to shop in our stores or online, impact our ability to attract and retain customers, violate applicable laws, regulations, orders and agreements, and subject us to additional costs and liabilities which could be material.Failure to operate information systems and implement new technologies effectively could disrupt our business or reduce our sales or profitability.We rely extensively on various information systems, including data centers, telecommunications systems, 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 source, plan and track inventory, to manage logistics, to generate performance and financial reports, to comply with regulatory requirements 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 those needed to support our customized and legacy systems in an effective way. Our information systems, and the third-party systems we rely on, are also subject to damage or interruption from a number of causes, including power outages; system 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, contractors or third party service providers on which we rely. Although we seek to maintain our systems effectively, manage our team of internal and third party resources effectively and successfully address the risk of compromises of the integrity, security and consistent operations of our systems, we may not be successful in doing so. Our approach to disaster recovery may not be adequate and any 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 interruption in the operation of our websites, particularly oure-commerce sites, could cause us to suffer reputational harm or to lose sales if customers are unable to access our site or purchase merchandise from us during such an interruption.We modify, update, and replace our systems and infrastructure 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 or integrating with 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 implement, modify or replace them, there are inherent risks associated with implementing, modifying or replacing systems, with new or changed relationships and with changes from and integrations with acquisitions, including accurately capturing and maintaining data, efficiently testing and implementing changes in a timely manner, realizing the expected14benefit of the change and managing the potential disruption of the operation of the systems and diversion of internal teams’ attention as the changes are implemented. Further, potential issues associated with implementing technology initiatives and the time and resources required in seeking to optimize the benefits of new elements of our systems and its infrastructure could reduce the efficiency of our operations in the short term. Overall, the efficient operation and successful growth of our business depends upon our information systems, including our ability to operate, maintain and develop them effectively and a failure of those systems could disrupt our business, subject us to liability or otherwise impact our financial results.Economic conditions, on a global level or in particular markets, may adversely affect our financial performance.Global financial markets can experience volatility, disruption and credit contraction, which could adversely affect global economic conditions. Turmoil in the financial and credit markets or other changes in economic conditions could adversely affect sources of liquidity available to us or our costs of capital and could adversely affect plan asset values and investment performance, and increase our pension liabilities, expenses and funding requirements and other related financial exposure with respect to company-sponsored and multiemployer pension plans. Economic conditions, both on a global level and in particular markets, including unemployment, decreased disposable income and actual and perceived wealth, energy and health care costs, costs of oil, gas and other commodities, interest and tax rates and policies, weakness in the housing market, volatility in capital markets, decreased credit availability, inflation and deflation, as well as political or other factors beyond our control such as threats or possibilities of war, terrorism, global or national unrest, actual or threatened epidemics, and political instability may also have significant effects on consumer confidence and spending that would, in turn, affect retail sales. These conditions and factors could adversely affect discretionary 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, even if not extreme, may 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 vendors, 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.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 earnings 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.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 distribution facilities located in the affected areas. Day-to-day operations, including 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.15We believe that building the brand reputation of our company and our retail banners is important to our continuing success. In the many different markets in which we do business, we work to build through our various marketing campaigns and other activities. These relationships and our reputation are based, in part, on perceptions of subjective qualities, so incidentsqualities. Incidents involving us, our employees,retail banners, our executives and other Associates, our board of directors, our policies and practices, our third-party providers, our vendors and others within our supply chain, the merchandise and brands that we carrysell, including our licensed or owned brands, our investments, the regions where we have operations or investments, our partners and our industry more generally that erode trust or confidence could adversely affect our reputation and thereby impact our business, particularly if the incidents result in rapid or significant adverse publicity, protest, litigation or governmental inquiry. Information about us, our retail banners, our employees, our policies, and the merchandise we sell, including our licensed or owned brands,on such incidents that is publicized through traditional or digital media platforms, and similar venues, including social media, websites, 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 inaccurate, incomplete or unverified. The reputation of our company and our retail banners may be damaged by adverse events at the corporate level or at our retail banners, or by an associate acting outside of company policies in all, one or some of the markets in which we do business. Similarly, challenges or reactions to action (or inaction), or perceived action (or inaction), by our company to crises or sensitive topics or on issues like compliance related to environmental, social product, labor and environmental standards or other sensitive topics,governance (“ESG”) matters, and any perceived lack of transparency about such matters, could harm our reputation.opportunitiesopportunities; limit our ability to attract and Associate retention;retain quality Associates; divert the attention and resources fromof management, including to respond to inquiries or additional regulatory scrutiny; and otherwise adversely affect our financial results.Quality, safetyissues with merchandise we sell could damage our reputation, salesstakeholders have increasingly focused on social impact, environmental sustainability, human capital management, human rights and financial results.Various governmental authoritiesother ESG matters in the jurisdictions where we do business regulate the quality and safetya variety of the merchandise we sell to consumers. Regulations and standards in this area, including those related to the U.S. Consumer Product Safety Improvement Act of 2008, state regulations like California’s Proposition 65, and similar legislation in other countries in which we operate, impose restrictions and requirements on the merchandise we sell in our stores and through e-commerce. These regulations change fromways that are not necessarily consistent. From time to time, we announce certain initiatives related to our corporate responsibility efforts, which we have focused under four pillars: environmental sustainability, our workplace, our communities, and new federal, state, provincial or local regulations in the U.S.responsible sourcing and other countries thatbusiness operations. These initiatives 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, significant fines or penalties could be incurredconsidered inadequate by stakeholders, or we could havefail or be perceived to curtail some aspectsfail or fall short in our pursuit of such initiatives, or in accurately and comprehensively reporting our salesprogress on such initiatives and any related goals and commitments. If our ESG practices do not meet investor or operations,other stakeholder expectations and standards, including related to climate change, environmental sustainability, human capital management, and human rights, or do not meet related regulations and expectations for increased transparency, which could have a material adverse effect on our financial results. We rely on our vendorscontinue to provide quality merchandise that complies with applicable product safety laws and other applicable laws, but they may not comply with their obligations to do so. Although our arrangements with our vendors frequently provide for indemnification for product liabilities, the vendors may fail to honor those obligations to an extent we consider sufficient or at all. Customer concerns or issues with the quality and safety of merchandise, particularly with products subject to increased levels of regulation, or the genuineness of merchandise, regardless of whether verified or our fault, could cause damage toevolve, our reputation and could result in lost sales, uninsured claims or losses, merchandise recalls and increased costs, and regulatory, civil or criminal fines or penalties, any of which could have a material adverse effect on our financial results.Failure to comply with existing laws, regulations and orders or changes in existing laws, regulations and applicable accounting principles and interpretations couldmay be negatively affect our business operationsimpacted, and financial performance.We are subject to federal, state, provincial, regional and local laws, rules and regulations in various countries in which we operate, 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, tax, data protection and others. If we, or third parties that perform services on our16behalf, fail to comply with these laws, rules, regulations and orders, we may be subject to judgments, fines litigation risk and/or other costsregulatory enforcement. In addition, we could be criticized for the scope of our initiatives or penalties, which could materially adversely affect our operationsgoals or perceived as not acting responsibly in connection with these matters, and our financial results and condition.Complying with applicable laws, rules and regulations and our own internal policiesthat evaluation may also require usbe based on factors unrelated to spend additional time and resources to implement new procedures and financial and other controls, conduct audits, train Associates and third partiesthe impact of these matters on our compliance methodsbusiness, financial or take other actions, particularly as we continueotherwise. Our failure, or perceived failure, with these initiatives or more generally to grow globallymanage reputational threats and enter new marketsmeet shifting stakeholder expectations or countries, any of whichconsumer preferences could adverselynegatively impact our results.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 such changes involving:—labor and employment practices and 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;—Internet regulations, including e-commerce, electronic communications and privacy; and—protection of third party intellectual property rights.Particularly in a dynamic regulatory environment, anticipated changes to laws and regulations may require us to invest in compliance efforts before changes are certain.Further, applicable accounting principles and interpretations may change from time to time,brand, image, reputation, credibility, Associate retention and the changes could have material effects onwillingness of our future or previously reported financial results.Our expandingcustomers and suppliers to do business with us.Canada and incertain countries in Europe and have establishedin Canada and Australia. We also operate buying and other offices around the world. We have expanded our operations into additional countries in Europe and into Australia and ourOur goal is to continue to expand our operations into other countries in the future. It can be costly and complex to identify appropriate store locations and establish, develop and maintain international operations and to promote business in new international jurisdictions, which may differ significantly from 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, including 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 thean appropriate infrastructure; identifying suitable partners for local operations and for integration with our global 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.We are subjectrisks associated with sourcing merchandisequarter at points in the past, including in recent years varying significantly from other countriespast quarters, and moving merchandise internationally.Manymay do so again in the future. If we fail to increase our results over prior periods, to achieve our projected results or to meet the expectations of securities analysts or investors, our stock price may decline (as it did at times in recent years), and the products solddecrease in the stock price may be disproportionate to the shortfall in our stores are sourced by our vendors and, to a lesser extent, by us, in many countries outside of the country where the stores are located, particularly southeastern Asia. Where we are the17importer of record, wefinancial performance. Results may be subjectaffected by various factors, including those described in these risk factors. We maintain a forecasting process that seeks to regulatoryplan 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 suspend our buyback program, as we did during fiscal 2021, or if we have an active buyback program and are repurchasing shares but do not repurchase the number of shares we contemplated pursuant to our stock repurchase programs, our earnings per share may be adversely affected. Similarly, if we reduce or suspend our dividend distributions, as we did for part of fiscal 2021, our stock price may be adversely affected.requirementsassets from loss and theft may impact our financial results.those similar to requirements imposed uponinventory shrinkage, is inherent in the manufacturerretail business. Loss may be caused by error or misconduct of such products. We are subject to the various risks of sourcing merchandise from other countries, including moving merchandise internationally, such as:—potential disruptions in manufacturing, logistics and supply;—changes in duties, tariffs, trade restrictions, quotas and voluntary export restrictions on imported merchandise, including, for example, new potential tariffs and border adjustment taxes or changes resulting from Brexit;—transport capacity and costs;—information technology challenges;—problems in third-party distribution and warehousing and other interruptions of the supply chain;—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 fromAssociates, customers, or penalties from government agencies relating to products that are recalled, defective or otherwise noncompliant or alleged to be harmful;—intellectual property enforcement and infringement issues;—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.These and other factors relating to international trade and imported merchandise beyond our control could affect the availability and the price of our inventory and our operating costs. Furthermore, although we have implemented policies and procedures designed to facilitate compliance with laws and regulations relating to 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 businessincluding through organized retail crime and professional theft, and may be further impacted by macroeconomic factors, including the enforcement environment. Our inability to effectively prevent and/or minimize the loss or theft of assets, or to whom we outsource business operations will not violate such lawseffectively reduce, or to accurately predict and regulations or our policies, which could subject us to liability andaccrue for the impact of those losses, could adversely affect our reputation,financial performance, including in particular reporting periods, as it did for part of fiscal 2023.increases in the priceincreased cost of oil or other fuels, raw materials andfuels; or increased costs of other commodities or other increases in utility, transportation or logistics costs.dramatically, such as the cost of cotton and synthetic fabrics, which at times have risen significantly.dramatically. Such increases can increaseimpact the cost of merchandise, which could adversely affect our performance through potentially reduced consumer demand or reduced margins.18United StatesU.S. are denominated in the currency of the country in which the store is located, and changes in currency exchange rates affect the translation of the sales and earnings of these businesses into U.S. dollars for financial reporting purposes. Because of this, movements in currency exchange rates have had, and are expected to continue to have, a significant impact on our consolidated and segment results from time to time. Changes in currency exchange rates can also increase the cost of inventory purchases that are denominated in a currency other than the local currency of the business buying the merchandise. When exchange rates change significantly in a short period or move unfavorably over an extended period, as in recent years, it can be difficult for us to adjust retail prices accordingly, and gross margin can be adversely affected. In addition,For example, 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.ofresulting from merchandise purchases by our segments denominated in currencies other than their local currencies. These mitigation strategies may not be effective or sufficient. In addition, in accordance with GAAP, we evaluate the fair value of these derivative instruments and make mark-to-market adjustments at the end of each accounting period. These adjustments are of a much greater magnitude when there is significant volatility in currency exchange rates and may have a significant impact on our earnings.Although we implement foreign currency hedging and risk management strategies to reduce our exposure to fluctuations in earnings and cash flows associated with changes in currency exchange rates, weOur quarterly operating results fluctuatemay fall shortorders and applicable accounting principles and interpretations could negatively affect our business operations and financial performance.prior periods, our projectionsbusiness. We are also subject to new and changing laws, rules and regulations, mandates, evolving interpretations of existing laws by judicial and regulatory authorities, changes in accounting standards or the expectations of securities analystsinterpretations, and reforms in jurisdictions where we do business. These requirements, current or investors, whichchanging, could adversely affect our stock price.Our operating results, have fluctuatedincluding those involving:quarterchanges to quarter at points inrequirements or policies from the past, and they may do so inoutcome of Brexit or the future. If we fail to increase our results over prior periods, to achieve our projected results or to meet the expectations of securities analysts or investors, our stock price may decline,Uyghur Forced Labor Act and the decrease in the stock price may be disproportionate to the shortfall in our financial performance. Results may be affected by various factors, including those described in these risk factors. We maintainemergence of widespread sanctions as a forecasting process that seeks to project sales and align expenses. If we do not control costs or appropriately adjust costs to actual results, or if actual results differ significantly from our forecast, our financial performance could be adversely affected. In addition, if we do not repurchase the number of shares we contemplated pursuant to our stock repurchase programs, our earnings per share may be adversely affected.If we engage in mergers or acquisitions or investments in new businesses, or divest, close or consolidate any of our current businesses, our business will be subject to additional risks.We may acquire new businesses (as we did with Trade Secret in fiscal 2016 and STP in fiscal 2013), invest in or enter into joint ventures with other businesses, develop new businesses internally (as with our new home store concept) 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 cost of buying, investing in or closing businesses orresult of the integration of acquired businesses, all of which can be difficult, time-consumingongoing Russia-Ukraine conflict;dilutive. These activities may not meet our performancewaste;other expectationsproduct compliance;may expose us to unexpected safety requirements, including vaccination and/or greater-than-expected costs, liabilitiestesting requirements, such as those implemented and risks. In addition, we have recorded intangible assets and goodwill and the value of the tradenamesproposed in connection with our acquisitions of Trade Secretthe COVID-19 pandemic;STPreporting;19may similarly do so privacy, such as to comply with, or fines and penalties related to, General Data Protection Regulation in the future in connectionEuropean Union and the California Consumer Privacy Act;acquisitions. Ifcontrols, conduct audits, train Associates and third parties on our compliance methods, or take other actions, particularly as we are unablecontinue to realize the anticipated benefits from acquisitions, we may be required to impair somegrow globally and enter new markets, countries, or allproduct categories, any of the goodwill associated with an acquisition, which could adversely impact our results ofresults. Particularly in a dynamic regulatory environment, anticipated changes to laws and regulations may require us to invest in compliance efforts or otherwise expend resources before changes are certain.balance sheet. Divestitures, closingsour financial results 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.orin, and may in the future become involved in, legal proceedings, regulatory reviews, audits and other legal matters. These may involve inquiries, investigations, lawsuits and other proceedings by local, provincial, state and federalnational governmental entities (in the United StatesU.S. and other countries) and private plaintiffs, including with respect to employment and employee benefits including(such as classification, employment rights, discrimination, wage and hour and retaliation; whistle blowerretaliation); whistleblower claims; harassment claims; tax; securities; disclosure; real estate; environmental matters; hazardous materials and hazardous waste; tort; business practices; consumer protection; privacy/data security; product safety 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 reputational harm as well as 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.United StatesU.S. and numerous foreign jurisdictions. Our effective income tax rate and future tax liability could be adversely affected by numerous factors including the results of tax audits and examinations, income before taxes being lower than anticipated in countries with lower statutory income tax rates and higher than anticipated in countries with higher statutory income tax rates, changes in income tax rates, changes in transfer pricing, changes in the valuation of deferred tax assets and liabilities, changes in applicable tax legislation, regulations, treaties and 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. Significant judgment is required in evaluating and estimating our worldwide provision and accruals for taxes, and actual results may differ from our estimations.federal,national, state, provincial and local tax authorities in the U.S. and foreign countries, and the examining authorities may challenge positions we take. We are engaged in various proceedings, which are at various stages, with such authorities with respect to assessments, claims, deficiencies, and refunds. We regularly assess the likely outcomes of these proceedings to determine the adequacy and appropriateness of our provision for income taxes, and we increase and decrease our provision as a result of these assessments. However, the developments in and actual results of proceedings, rulings or the result of rulingssettlements by or settlements with tax authorities andor courts or(including due to changes in facts, law or legal interpretations, expiration of applicable statutes of limitations or other resolutions of tax positionspositions) could result in amounts that differ from the amountsthose we have accrued for such proceedings in either a positive or a negative manner, which could materially affect our effective income tax rate in a given financial period, the amount of taxes we are required to pay and our results of operations. In addition, we are subject to tax audits and examinations for payroll, value added, sales-based and other taxes relating to our businesses.20Our real estate leases generally obligate us for long periods, which subjects us to financial risks.We lease virtually all of our store locations, generally for an initial 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 for long periods our primary distribution centers and administrative offices. Accordingly, we are subject to the risks associated with leasing and owning real estate, which can adversely affect our results. 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 (as was the case with some of our former operations). In addition, when the lease term for the stores in our ongoing operations expire, we may be unable to negotiate renewals, either on commercially acceptable terms or at all,businesses, which could cause us to close stores or to relocate stores within a market on less favorable terms.We depend upon strong cash flows from our operations to supply capital to fund our operations, growth, stock repurchases and dividends and interest and debt repayment.Our business depends upon our operations to continue to generate strong cash flow to supply capital to support our general operating activities, to fund our growth and our return of cash to stockholders through our stock repurchase programs and dividends, and to pay our interest and debt repayments. Our inability to continue to generate sufficient cash flows to support these activities or to repatriate cash from our international operations in a manner that is cost effective could adversely affect our growth plans and financial performance including our earnings per share. We borrow on occasion to finance our activities and if financing were not available to us in adequate amounts and on appropriate terms when needed, it could also adversely affectimpact our financial performance.locations. Leaseslocations, as well as some of our distribution centers and office space. Most of TJX's leases in the U.S. and Canada are store operating leases, generally for an initial term of 10ten years with options to extend the lease term for one or more 5-yearfive-year periods. LeasesStore operating leases in Europe generally have an initial term of 10ten to 15fifteen years and leases in Australia thegenerally have an initial lease term is primarily 7of seven to 10 years. Someten years, some of the leases in Europe and Australiawhich have options to extend. WeSome of the Company's leases have the rightoptions to terminate someprior to the lease expiration date.these leases before the expiration date under specified circumstancesfiscal 2023. Counts include both banners within a combo or a superstore:United States Sierra Total Alabama 34 — 12 46 Arizona 38 — 15 53 Arkansas 18 — 5 23 California 271 — 99 370 Colorado 30 9 12 51 Connecticut 51 1 21 73 Delaware 8 — 6 14 District of Columbia 6 — — 6 Florida 200 — 78 278 Georgia 92 — 31 123 Hawaii 8 — — 8 Idaho 9 1 3 13 Illinois 99 5 34 138 Indiana 42 — 12 54 Iowa 18 — 6 24 Kansas 19 1 7 27 Kentucky 27 1 7 35 Louisiana 29 — 10 39 Maine 12 1 5 18 Maryland 56 1 26 83 Massachusetts 109 2 40 151 Michigan 73 5 23 101 Minnesota 35 8 16 59 Mississippi 17 — 5 22 Missouri 37 — 13 50 Montana 6 — 1 7 Nebraska 10 1 5 16 Nevada 20 1 7 28 New Hampshire 28 5 15 48 New Jersey 91 4 55 150 New Mexico 10 1 3 14 New York 170 4 65 239 North Carolina 68 — 23 91 North Dakota 6 1 2 9 Ohio 88 4 27 119 Oklahoma 20 — 6 26 Oregon 25 3 10 38 Pennsylvania 99 2 37 138 Puerto Rico 29 — 6 35 Rhode Island 12 — 6 18 South Carolina 36 — 14 50 South Dakota 4 — 1 5 Tennessee 51 — 16 67 Texas 175 — 68 243 Utah 19 4 10 33 Vermont 8 1 1 10 Virginia 70 4 37 111 Washington 42 2 17 61 West Virginia 11 — 5 16 Wisconsin 41 4 17 62 Wyoming 5 2 — 7 Total Stores 2,482 78 940 3,500 some with specified payments.21Canada Winners HomeSense Marshalls Total Alberta 43 21 17 81 British Columbia 40 22 9 71 Manitoba 9 5 5 19 New Brunswick 4 3 4 11 Newfoundland 3 2 2 7 Nova Scotia 11 3 2 16 Ontario 126 69 49 244 Prince Edward Island 1 1 — 2 Quebec 54 21 15 90 Saskatchewan 6 4 3 13 Total Stores 297 151 106 554 Europe T.K. Maxx Homesense Total United Kingdom 351 76 427 Republic of Ireland 27 2 29 Germany 166 — 166 Poland 52 — 52 Austria 18 — 18 The Netherlands 15 — 15 Total Stores 629 78 707 Australia T.K. Maxx Australian Capital Territory 4 New South Wales 23 Queensland 26 Victoria 19 South Australia 2 Total Stores 74 centers and primary administrative office locationsfulfillment centers as of January 28, 2017.2023. Square footage information for the distribution and fulfillment centers represents total “ground cover” of the facility.Square footage in millions Owned (sq/ft) Count Leased (sq/ft) Count Total (sq/ft) Total Count Marmaxx 9 9 4 8 13 17 HomeGoods 4 5 2 2 6 7 Sierra 1 1 1 1 2 2 TJX Canada — — 2 4 2 4 TJX International — — 3 8 3 8 Total 14 15 12 23 26 38 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, Tennessee800,000 s.f.—leased MarshallsDecatur, Georgia780,000 s.f.—ownedWoburn, Massachusetts472,000 s.f.—leasedBridgewater, Virginia562,000 s.f.—leasedPhiladelphia, Pennsylvania1,001,000 s.f.—leasedPhoenix, Arizona1,139,000 s.f.—ownedHomeGoodsBrownsburg, Indiana805,000 s.f.—ownedBloomfield, Connecticut803,000 s.f.—ownedJefferson, Georgia801,000 s.f.—ownedTucson, Arizona858,000 s.f.—ownedTJX CanadaBrampton, Ontario506,000 s.f.—leasedMississauga, Ontario679,000 s.f.—leasedDelta, British Columbia427,000 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 SPACECorporate, Marmaxx, HomeGoodsFramingham and Marlborough, Massachusetts2,034,000 s.f.—owned andleased in several buildingsTJX CanadaMississauga, Ontario434,000 s.f.—leasedTJX InternationalWatford, England280,000 s.f. — owned and leasedDusseldorf, Germany45,000 s.f.—leasedSierra Trading Post owns a 900,000 square foot facility in Cheyenne, Wyoming which houses its administrative offices and fulfillment center operations. Trade Secret, part of TJX International, leases office space and maintains third-party arrangements for a distribution center in Australia totaling approximately 107,000 square feet. In addition to the above office space, we also occupy smaller buying office locations in various countries.TJX is subjectcertainConsolidated Financial Statements for information on legal proceedings, lawsuits, disputes and claims that arise from time to time in the ordinary course of our business. In addition, TJX is a defendant in several lawsuits filed in federal and state courts brought as putative class or collective actions on behalf of various groups of current and former salaried and hourly Associates in the U.S. The lawsuits allege violations of the Fair Labor Standards Act and of state wage and hour and other labor statutes, including alleged misclassification of positions as exempt from overtime, alleged entitlement to additional wages for alleged off-the-clock work by hourly employees and alleged failure to pay all wages due upon termination. TJX is also a defendant in lawsuits filed in federal courts brought as putative class actions 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.proceedings.22Security HolderStockholder Matters and Issuer Purchases of Equity SecuritiesPrice Range of Common Stock The quarterly high and low sale prices for our common stock for fiscal 2017 and fiscal 2016 are as follows: Fiscal 2017 Fiscal 2016 Quarter High Low High Low $ 79.20 $ 66.82 $ 71.03 $ 63.66 $ 81.88 $ 72.43 $ 70.52 $ 64.30 $ 83.64 $ 72.51 $ 76.93 $ 67.25 $ 79.79 $ 71.50 $ 74.65 $ 63.53 20172023 was 122,400.Our Board of Directors declared four quarterly dividends of $0.26 per share for fiscal 2017 and $0.21 per share for fiscal 2016. While our dividend policy is subject to periodic review by our Board of Directors, we are currently planning to pay a $0.3125 per share quarterly dividend in fiscal 2018, subject to declaration and approval by our Board of Directors, and currently intend to continue to pay comparable dividends in the future.Information on Share Repurchases20172023 and the average price paid per share are as follows:
Repurchased(1) Average Price
Paid Per
Share(2)
Purchased as Part of
Publicly Announced Approximate Dollar
Value of Shares that
May Yet be Purchased
Under the Plans or
Programs(3) 1,007,814 $ 74.42 1,007,814 $ 2,240,761,477 2,386,775 $ 77.51 2,386,775 $ 2,055,762,135 3,493,576 $ 75.85 3,493,576 $ 2,790,762,156 6,888,165 6,888,165 (1)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 2017, TJX completed the $2.0 billion program announced in February 2015 and initiated a $2.0 billion stock repurchase program announced in February 2016. Under this program, we repurchased a total of 2.8 million shares at a cost of $209 million in the fourth quarter of 2017 and as of January 28, 2017, approximately $1.8 billion remained available for purchase under this plan. Additionally, as announced on February 22, 2017, our Board approved our 18th stock repurchase program in late January to authorize an additional $1.0 billion in repurchases from time to time, which is included in the table above.23October 30, 2022 through
November 26, 20221,207,147 $ 74.56 1,207,147 $ 1,903,792,649 November 27, 2022 through
December 31, 20223,226,241 $ 79.04 3,226,241 $ 1,648,792,687 January 1, 2023 through
January 28, 20231,294,774 $ 81.10 1,294,774 $ 3,543,792,734 Total 5,728,162 5,728,162 Selected Financial Data Fiscal Year Ended (53 Weeks) $ 33,184 $ 30,945 $ 29,078 $ 27,423 $ 25,878 $ 2,298 $ 2,278 $ 2,215 $ 2,137 $ 1,907 664,432 683,251 703,545 726,376 747,555 $ 3.46 $ 3.33 $ 3.15 $ 2.94 $ 2.55 $ 1.04 $ 0.84 $ 0.70 $ 0.58 $ 0.46 $ 2,930 $ 2,095 $ 2,494 $ 2,150 $ 1,812 $ 2,993 $ 2,370 $ 2,648 $ 2,449 $ 1,855 $ 12,884 $ 11,490 $ 10,978 $ 10,091 $ 9,415 $ 1,025 $ 889 $ 912 $ 947 $ 978 $ 2,228 $ 1,615 $ 1,613 $ 1,267 $ 768 $ 4,511 $ 4,307 $ 4,264 $ 4,230 $ 3,666 52.1 % 53.1 % 52.2 % 54.1 % 55.5 % 33.1 % 27.3 % 27.4 % 23.1 % 17.3 % 1,186 1,156 1,119 1,079 1,036 1,035 1,007 975 942 904 12 8 6 4 4 579 526 487 450 415 255 245 234 227 222 106 101 96 91 88 57 41 38 27 14 503 456 407 371 343 44 39 33 28 24 35 35 — — — 3,812 3,614 3,395 3,219 3,050 26,614 26,158 25,461 24,712 23,894 24,750 24,308 23,715 23,092 22,380 227 159 122 83 83 11,119 10,234 9,537 8,865 8,210 5,629 5,470 5,310 5,196 5,115 1,984 1,900 1,824 1,748 1,698 1,307 975 914 666 363 10,787 9,970 9,109 8,383 7,830 714 639 545 464 411 667 667 — — — 83,798 80,480 76,537 73,209 69,984 (1)Amounts adjusted to reflect the reclassification of debt issuance cost in accordance with ASU 2015-03. We reclassified $9 million, $11 million, $7 million and $6 million of debt issuance cost from other assets to long-term obligations at January 30, 2016, January 31, 2015, February 1, 2014, and February 2, 2013 respectively. See “Note A: Summary of Accounting Policies” within Item 8 of this Form 10-K for additional information.(2)Defined as long-term debt, exclusive of current installments and capital lease obligations, less the portion due within one year.(3)Defined as shareholders’ equity, short-term debt, long-term debt and capital lease obligations, including current maturities.2420172023 (fiscal 2017), January 30, 2016 (fiscal 2016)2023) and January 31, 201529, 2022 (fiscal 2015)2022) and our 53-week fiscal year ended February 3, 2024 (fiscal 2024).selldo this by selling 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 specialty storemajor online retailers) regular prices on comparable merchandise, every day.day through our stores and five distinctive branded e-commerce sites. We operate over 3,8004,800 stores through our four main segments: in the U.S., Marmaxx (which operates T.J. Maxx, Marshalls, tjmaxx.com and tjmaxx.com)marshalls.com) and HomeGoods;HomeGoods (which operates HomeGoods, Homesense, and homegoods.com); TJX Canada (which operates Winners, HomeSense and Marshalls in Canada); and TJX International (which operates T.K. Maxx, HomeSenseHomesense and tkmaxx.com in Europe, and Trade SecretT.K. Maxx in Australia). In addition to our four main segments, Sierra operates retail stores and sierra.com in the U.S. we also operate Sierra Trading Post (STP), an off-price Internet retailer with a small number of stores. The results of STPSierra are reportedincluded in ourthe Marmaxx segment.Fiscal 2017 was another successful year for TJX. We posted a strong increase in net sales and solid earnings per share growth on top of strong increases in both fiscal 2016 and fiscal 2015. We continued to generate strong cash flows, allowing us to return value to our shareholders through cash dividends and share repurchases. In addition, we continue to reinvest in our business by adding new stores and remodeling existing ones, while continuing to strengthen our infrastructure in support of our continuing growth, and we implemented the second phase of our wage initiative to raise wages for U.S. hourly store associates.20172023 include the following:—Same store sales increased 5% in fiscal 2017 over an increase of 5% in fiscal 2016 and an increase of 2% in fiscal 2015. The fiscal 2017 increase was driven primarily by an increase in customer traffic.—Net sales increased to $33.2 billion for fiscal 2017, up 7% over the same period last year. Net sales increased to $30.9 billion for fiscal 2016, up 6% over the prior year. At January 28, 2017, the number of stores in operation increased 5% and selling square footage increased 4% over the end of fiscal 2016.—Earnings per share for fiscal 2017 were $3.46 per diluted share compared to $3.33 per diluted share in fiscal 2016. Fiscal 2017 earnings per share was reduced by $0.07 from a loss on the early extinguishment of debt and a pension settlement charge during the third quarter.—Our fiscal 2017 pre-tax margin (the ratio of pre-tax income to net sales) was 11.2%, a 0.6 percentage point decrease compared to our fiscal 2016 pre-tax margin. The two third quarter charges reduced pre-tax margin by 0.3 percentage points in fiscal 2017.—Our cost of sales ratio for fiscal 2017 was 71.0%, a 0.2 percentage point decrease compared to the fiscal 2016 ratio. This improvement was driven by an increase in merchandise margin.—Our selling, general and administrative expense ratio for fiscal 2017 increased 0.6 percentage points to 17.4% from 16.8% in fiscal 2016. This increase is primarily due to higher store payroll costs due to wage increases and investments to support our growth.—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, were down 5% (down 4% on a constant currency basis) at the end of fiscal 2017 as compared to the prior year.—During fiscal 2017, we repurchased 22.3 million shares of our common stock for $1.7 billion. Earnings per share reflect the benefit of the stock repurchase program. In January 2017, our Board of Directors authorized our 18th stock repurchase program for an additional $1.0 billion.is a discussion oftable sets forth our consolidated operating results followed byas a discussionpercentage of our segment operating results. Percentage of Net Sales Fiscal 2023 Fiscal 2022 Net sales 100.0 % 100.0 % Cost of sales, including buying and occupancy costs 72.4 71.5 Selling, general and administrative expenses 17.9 18.7 Impairment on equity investment 0.4 — Loss on early extinguishment of debt — 0.5 Interest expense, net 0.0 0.2 9.3 % 9.1 % sales: Consolidated netSales20172023 totaled $33.2$49.9 billion, a 7%3% increase over $30.9versus net sales of $48.5 billion infor fiscal 2016.2022. The increase reflectedincludes a 5% increase from samein non-comp store sales, and a 4% increase from new stores,25businesses amountsites combined amounted to approximately 1%less than 3% of total sales for each of fiscal 2023 and had an immaterial impact on fiscal 20172022.growth. Consolidated net(as defined below). While stores in the U.S. were open for all of fiscal 2022, a significant number of stores in TJX Canada and TJX International experienced COVID-19 related temporary store closures and government-mandated shopping restrictions during fiscal 2022. Therefore, we cannot measure year-over-year comparable store sales with fiscal 2022 in these geographies in a meaningful way. As a result, the comparable stores included in the fiscal 2023 measure consist of U.S. stores only, which we refer to as U.S. comparable store sales (“U.S. comp store sales”), and are calculated against sales for the comparable periods in fiscal 2022. We expect all geographies to return to the historical definition of comparable store sales in fiscal 2024.2016 totaled $30.9 billion, a 6%2023 reflect an increase over $29.1 billion in fiscal 2015. The increase reflected a 5% increase from same store sales and a 4% increase from new stores,average basket driven by higher average ticket offset by a 3% negative impact from foreign currency exchange rates.Same store sales increases in the U.S. for fiscal 2017 were primarily due to an increasedecrease in customer traffic. We also hadStrong apparel sales offset a strong increasedecline in units sold which was largely offset by a reduction in the average ticket. In fiscal 2017, home fashions performed better than apparel but both recorded strongsales for fiscal 2023.growth. Geographically, in the U.S., sales were strong in virtually all regions, with the Southeast and the Great Lakes regions reporting the highest same store sales growth. In Canada, same store sales increases were well above the consolidated average while TJX International was below the consolidated average.Same store sales 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.We define sameor comp store sales, to be sales of those stores that have been in operation for all or a portion of two consecutive fiscal years, or in other words, stores that are starting their third fiscal year of operation. The sales of our e-commerce businesses, meaning Sierra Trading Post (including stores), tjmaxx.com and tkmaxx.com, are not included in same store sales. We classify a store as a new store until it meets the samecalculate comp store sales criteria. The recently 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 ofon a fiscal year and the classification remains constant throughout that year, unless a store is closed. We calculate same store sales results52-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. Samesamecomp store sales of our foreign segments at the same exchange rates used inusing the prior year.year’s exchange rates. This removes the effect of changes in currency exchange rates, which we believe is a more accurate measure of segment operating performance.included in the same store sales calculation 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 transactionstransactions.calculation.following table sets forthpercentages of our consolidated operating resultsrevenues by geography for the last two fiscal years are as a percentage of net sales: Percentage of Net Sales Fiscal Year 2017 Fiscal Year 2016 Fiscal Year 2015 100.0 % 100.0 % 100.0 % 71.0 71.2 71.5 17.4 16.8 16.1 0.2 — 0.1 0.1 — — 0.1 0.1 0.1 11.2 % 11.8 % 12.2 % $ 3.46 $ 3.33 $ 3.15 *Figures may not foot due to rounding.26Fiscal 2023 Fiscal 2022 United States: Northeast 22 % 23 % Midwest 13 13 South (including Puerto Rico) 27 27 West 15 16 Total United States 77 % 79 % Canada 10 9 Europe 12 11 Australia 1 1 Total TJX 100 % 100 % foreign currency exchange rates:Foreign Currency Exchange RatesTwo ways in whichWe specifically refer to “foreign currency” as the impact of translational foreign currency exchange rates affect our reported results areand mark-to-market of inventory derivatives, as follows:—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 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.—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 (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.We refer to the impact of the above two items throughout our discussion as “foreign currency.”described in detail below. This does not include the impact foreign currency exchange rates can have on various transactions that are denominated in a currency other than an operating division’s local currency. currency, which is referred to as “transactional foreign exchange,” and also described below.suchcertain transactions, we refer to it as “transactional foreign exchange.”sales, including buyingSales, Including Buying and occupancy costs:Occupancy Costs71.0% in72.4% for fiscal 2017 compared to 71.2% in fiscal 2016 and 71.5% in fiscal 2015. The improvement in this expense ratio was driven by2023, an increase of 0.9 percentage points over 71.5% of net sales for fiscal 2022.our profit margin on merchandise sold (merchandise margin) along with leverage onthe total cost of sales, including buying and occupancy costs, as a result of the 5% same store sales increase. Together these two items benefitted the fiscal 2017 expense ratio by approximately 0.5 percentage points.was primarily attributable to lower merchandise margin and investments in supply chain. Merchandise margin improved despite the continued pressure transactional foreign exchange had on the costreflected approximately 1.2 percentage points of merchandise at our foreign segments this year versus the prior year. Although notincremental freight costs as significantwell as in fiscal 2016, the change in exchange rates continued to impact the cost of merchandise that was denominated in currencies other than our foreign segments’ local currency, primarily the U.S. dollar. These improvements werehigher markdowns and shrink expense, partially offset by higher supply chain costs and the negative impactstrong markon. the mark to market of inventory derivatives.The improvement in the fiscal 2016 expense ratio as compared to fiscal 2015 was driven by leverage onsales, including buying and occupancy costs, as a result of the 5% same store sales increase along with an increase in merchandise margin. Similar to fiscal 2017, together these two items benefitted the fiscal 2016 expense ratiowas favorably impacted by approximately 0.5 percentage points. Merchandise margin improved despite the negative impact transactional foreign exchange had on the cost$9 million and $27 million of merchandise for TJX Canada and Europegovernment programs for fiscal 2016 versus2023 and fiscal 2015. The change2022, respectively, in exchange rates increased the cost of merchandise purchased by TJX Canadaregions where we had temporary store closures.Europe that were denominated in currencies other than the divisions’ respective 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 to market of inventory derivatives.Selling, general and administrative expenses: Selling, general and administrativeAdministrative Expenses17.4%17.9% for fiscal 2023, a decrease of 0.8 percentage points over 18.7% for fiscal 2022.2017, 16.8% in fiscal 2016 and 16.1% in fiscal 2015. The increase in this ratio in fiscal 20172023 was primarily driven by store payroll due to a combinationreduction of higher employee payrollCOVID-related costs due to wage27increases, investments to support our growth and supply chainthe favorable impact of reduced contributions to the TJX charitable foundations in fiscal 2017.Similar to fiscal 2017, the increase in this ratio in fiscal 2016higher store wages.primarily due to a combination of higher employee payroll costs, due to our wage initiative and an increase in supply chain costs, along with our incremental investments. In addition the fiscal 2016 expense ratio was unfavorablyfavorably impacted by higher contributions to TJX’s charitable foundations $214 million from government programs for fiscal 2022 in regions where we had temporary store closures.2016 as compared to2023, we announced and completed the prior year.Loss on early extinguishmentdivestiture of debt: On September 12, 2016our minority investment in Familia. As a result, we issued $1.0 billionrecorded an impairment charge of 2.25% ten year notes. We used a portion$218 million in the first quarter of fiscal 2023 representing the entire carrying value of the proceeds to redeem our $375investment. Additionally, we realized a $54 million 6.95% notes on October 12, 2016, prior to their scheduled maturitytax benefit when we completed the divestiture of April 15, 2019. We recorded a pre-tax loss onthis investment during the early extinguishment of debt of $51.8 million.Pension settlement charge: During the fiscal 2017 third quarter we offered eligible former TJX Associates, who had not yet commenced receiving their qualified pension plan benefit, an opportunity to receive a lump sum payout of their vested pension benefit. On October 21, 2016, TJX’s qualified pension plan paid $103.2 million from pension plan assets to those who accepted this offer. This transaction had no cash impact on TJX, but did result in a non-cash pre-tax settlement charge of $31.2 million.expense, net:Expense, netthreetwo fiscal years are summarized below: Fiscal Year Ended Dollars in thousands January 28,
2017 January 30,
2016 January 31,
2015 $ 69,219 $ 68,253 $ 64,783 (7,548 ) (7,984 ) (9,403 ) (18,137 ) (13,869 ) (15,593 ) $ 43,534 $ 46,400 $ 39,787 The decrease in net Fiscal Year Ended In millions January 28,
2023January 29,
2022Interest expense $ 91 $ 123 Capitalized interest (7) (4) Interest (income) (78) (4) Interest expense, net $ 6 $ 115 2017 is2023 compared to fiscal 2022, primarily due to additional interest income as a result of an increase in investments as well as an increase in interest rates.Theincome, due to an increase in prevailing rates, as well as the $2.75 billion pay down of outstanding debt during fiscal 2022.interest expense for fiscal 2016 reflects interest expensestock repurchases after December 31, 2022. The excise tax on the net repurchase portion of the IRA did not have an impact on our results of operations or financial position in fiscal 20162023 and we do not expect the Corporate AMT, excise tax, or other provisions of the IRA to have a material impact on the financing lease obligation related to TJX Canada’s new home office of $3.7 million. our consolidated financial statements.increase in net interest expense also reflects a reduction in capitalized interest costs and interest income in fiscal 2016 as compared to fiscal 2015.Income taxes: Our effective annual income tax rate was 38.3% in24.5% for fiscal 2017, 37.7% in2023 compared to 25.4% for fiscal 2016 and 37.6% in fiscal 2015.2022. The increasedecrease in the fiscal 2017 income tax rate was due to the jurisdictional mix of income and the valuation allowance on foreign net operating losses. In addition, the fiscal 2016 effective income tax rates benefitted from a reduction in our reserve for uncertain tax positions related to our adoption of the new Tangible Property Regulations. The increase in the fiscal 20162023 effective income tax rate as compared to fiscal 2015, was primarily due to the lapse of statutes of limitations and resolution of various tax matters, and the change of jurisdictional mix of incomeprofits and the valuation allowance on foreign net operating losses.incomeIncome and diluted earnings per share:Diluted Earnings Per Share$2.3$3.5 billion in fiscal 2017, a 1% increase over $2.32023 compared to $3.3 billion in fiscal 2016, which in turn was a 3% increase over $2.2 billion in fiscal 2015.2022. Diluted earnings per share were $3.46 in fiscal 2017, $3.332023 were $2.97 compared to $2.70 in fiscal 2016 and $3.152022. The $218 million impairment on our previously-held minority investment in Familia, net of the $54 million tax benefit, had a $0.14 negative impact on earnings per share for fiscal 2015. The third quarter charges from the loss on early extinguishment of debt and the pension settlement, collectively reduced fiscal 2017 net income by $50.0 million, or $0.07 per share.2023. Foreign currency exchange rates also affected the comparability of our results. Foreign currency exchange rates had a $0.07$0.06 negative impact on earnings per share in fiscal 2017 when2023 compared to fiscal 2016, and a $0.09 negativeneutral impact in fiscal 2016 when compared to fiscal 2015.Our stock repurchase programs, which reduce our weighted average diluted shares outstanding, benefited ouron earnings per share growth by approximately 3% in each fiscal year. We repurchased 22.3 million shares of our stock at a cost of $1.7 billion in fiscal 2017, 26.52022. A $242 million shares of our stock at a cost of $1.8 billiondebt extinguishment charge in fiscal 2016 and 27.7 million shares of our stock at2022 had a cost of $1.7 billion in$0.15 negative impact on earnings per share for fiscal 2015.28information:Informationtjmaxx.com)marshalls.com) and our HomeGoods segmentssegment (HomeGoods, Homesense and homegoods.com) 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. In addition to our four main segments, Sierra operates retail stores and sierra.com 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 ourthe Marmaxx segment.loss on early extinguishment of debt, the pension settlement charge and interest expense.expense, net, and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as we define the term, may not be comparable to similarly titled measures used by other entities.companies. 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 28,
2017 January 30,
2016 January 31,
2015 $ 21,246.0 $ 19,948.2 $ 18,687.9 $ 2,995.0 $ 2,858.8 $ 2,736.7 14.1 % 14.3 % 14.6 % 5 % 4 % 1 % 1,186 1,156 1,119 1,035 1,007 975 12 8 6 2,233 2,171 2,100 26,614 26,158 25,461 24,750 24,308 23,715 227 159 122 51,591 50,625 49,298 Fiscal Year Ended U.S. dollars in millions January 28,
2023January 29,
2022Net sales $ 30,545 $ 29,483 Segment profit $ 3,883 $ 3,813 Segment margin 12.7 % 12.9 % 3 % 13 % Stores in operation at end of period: T.J. Maxx 1,299 1,284 Marshalls 1,183 1,148 Sierra 78 59 Total 2,560 2,491 Selling square footage at end of period (in millions): T.J. Maxx 28 28 Marshalls 27 26 Sierra 1 1 Total 56 55 atfor Marmaxx increased 7% inwere $30.5 billion for fiscal 2017 as2023, an increase of 4% compared to $29.5 billion for fiscal 2016.2022. The increase reflectedin net sales reflects a 5%3% increase from samecomp store sales and a 2%1% increase from newnon-comp store sales. The same store sales increase of 5% in fiscal 2017 is on top of a 4% increase in the prior year. Same storefor fiscal 2017 was primarily dueattributable to an increase in customer traffic. Marmaxx sameaverage basket driven by higher average ticket. For fiscal 2023, positive apparel sales outperformed a decline in home fashion sales. All geographies generally performed in line with the overall comp store sales also reflect an increaseincrease.units sold, whichsegment profit margin was largelydriven by lower merchandise margin and higher store wages, partially offset by a decrease in the average ticket. Geographically, same store salespayroll reflecting lower COVID-related expenses. Within merchandise margin, incremental freight costs, higher markdowns and shrink expense were partially offset by strong throughout most of the countrymarkon.the Southeast and Great Lakes regions particularly strong. Home fashions outperformed apparel for fiscal 2017 with both categories posting same store sales growth. Overall,e-commerce sales represent approximately 2%sierra.com, represented less than 3% of Marmaxx’s net sales.The same store sales increase of 4% in fiscal 2016 was on top of a 1% increase in the prior year. Same store sales growth at Marmaxx for fiscal 2016 was due to an increase in customer traffic. Marmaxx same store sales also reflect an increase in units sold, which was more than offset by a decrease in the average ticket. Our merchandise mix2023 and pricing strategy throughout fiscal 2016 resulted in the lower average ticket which we believe contributed to strong growth in customer traffic2022 and in units sold. Geographically, same store sales were strong throughout most of the country with the Southeast region particularly strong. Home fashions outperformed apparel for fiscal 2016 with both categories posting same store sales growth.Segment margin in fiscal 2017 was 14.1% compared to 14.3% in fiscal 2016. Marmaxx results for fiscal 2017 reflect an increase in merchandise margin and buying and occupancy expense leverage, on same store29sales growth, of approximately 0.7 percentage points. However, these gains were more than offset by higher store payroll costs, primarily due to wage increases and processing more units at the store level, higher distribution costs, as well as an increase in credit card chargeback costs. Tjmaxx.com and STP (our U.S. e-commerce businesses) did not have a significant impact on year-over-year segment margin comparisons.Segment margin in fiscal 2016 was 14.3%, compared to 14.6% in fiscal 2015. Marmaxx results for fiscal 2016 reflect improvements in merchandise margin and occupancy expense leverage, on same store sales growth, of approximately 0.6 percentage points. However, these gains were offset by higher distribution costs, reflecting the 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 (our U.S. e-commerce businesses) had a negative impact on year-over-year segment margin comparisons of 0.3 percentage points. Oure-commerce businesses operate at lower profit margins and at STP, we incurred additional costs as we continue to transition this business to a more fully off-price model and to adjust its merchandise mix.2018,2024, we expect to openadd approximately 6545 Marmaxx net new stores and 18 new Sierra stores, which would increase selling square footage by approximately 2%. Fiscal Year Ended Dollars in millions January 28,
2017 January 30,
2016 January 31,
2015 $ 4,404.6 $ 3,915.2 $ 3,414.4 $ 613.8 $ 549.3 $ 463.2 13.9 % 14.0 % 13.6 % 6 % 8 % 7 % 579 526 487 11,119 10,234 9,537 HomeGoods’ Fiscal Year Ended U.S. dollars in millions January 28,
2023January 29,
2022Net sales $ 8,264 $ 8,995 Segment profit $ 522 $ 907 Segment margin 6.3 % 10.1 % (11) % 32 % Stores in operation at end of period: HomeGoods 894 850 Homesense 46 39 Total 940 889 Selling square footage at end of period (in millions): HomeGoods 16 15 Homesense 1 1 Total 17 16 increased 12% inreflects an 11% decrease from comp store sales, partially offset by a 3% increase from non-comp store sales.2017, on top of a 15% increase in fiscal 2016. The increase in fiscal 20172023 reflected a 6% increase from same store sales and a 6% increase from new store sales. The sales increase of 15% in fiscal 2016 reflected a same store sales increase of 8% and an increase from new stores of 7%. The increase in same store sales for fiscal 2017 and fiscal 2016 was primarily due to an increasedecrease in customer traffic.Segment profit margin for fiscal 2017 was 13.9% compared to 14.0% for fiscal 2016. Segment margin for fiscal 2017 was favorably impacted by an increase in merchandise margin and expense leverage, primarily occupancy costs, on strong same store sales growth. These increases in segment margin were more than offset by higher payroll costs related to wage increases, an increase in distribution costs, which includes the opening of a new distribution center in fiscal 2017, and an increase in credit card chargeback costs. Segment profit margin for fiscal 2016 was 14.0%, up from 13.6% for fiscal 2015. The increase in fiscal 2016 was driven by expense leverage, primarily buying and occupancy costs, on strong same store sales growth and an increase in merchandise margin,traffic, partially offset by an increase in distributionaverage basket driven by higher average ticket. All geographies performed in line with the overall comp store sales decline.related to our wage initiative.2018,2024, we plan an increase ofexpect to add up to approximately 8150 HomeGoods stores, of which 18 are Homesense stores. This would increase selling square footage by approximately 11%6%. We also plan on launching a new U.S. home concept, with the first few stores opening later in fiscal 2018.30Foreign Segments: Fiscal Year Ended U.S. Dollars in millions January 28,
2017 January 30,
2016 January 31,
2015 $ 3,171.1 $ 2,854.6 $ 2,883.9 $ 413.4 $ 375.3 $ 393.6 13.0 % 13.1 % 13.6 % 8 % 12 % 3 % 255 245 234 106 101 96 57 41 38 418 387 368 5,629 5,470 5,310 1,984 1,900 1,824 1,307 975 914 8,920 8,345 8,048 Fiscal Year Ended U.S. dollars in millions January 28,
2023January 29,
2022Net sales $ 4,912 $ 4,343 Segment profit $ 690 $ 485 Segment margin 14.0 % 11.2 % Stores in operation at end of period: Winners 297 293 HomeSense 151 147 Marshalls 106 106 Total 554 546 Selling square footage at end of period (in millions): Winners 6 6 HomeSense 3 3 Marshalls 2 2 Total 11 11 increased 11%were $4.9 billion for fiscal 2023, an increase of 13% compared to $4.3 billion for fiscal 2022. The increase in net sales reflected having a fully open store base for fiscal 2023, compared to temporary store closures in fiscal 20172022, as a result of the COVID-19 pandemic. Within net sales, an increase in average basket driven by higher average ticket was partially offset by the negative foreign currency exchange rate impact of 5% for fiscal 2023.decreasesegment profit margin of 1% in11.2% for fiscal 2016.2022. The increase in sales for fiscal 2017 reflected same store sales growth of 8% and a 5% increase from new stores offset by 2% from the negative impact of foreign currency translation. The decrease in net sales of 1% in fiscal 20162023 was due entirely to currency translation which negatively impacted sales growth by 16%, more than offsetting sales growth of 12% from same store sales and an increase of 3% from new stores. The same store sales increases in fiscal 2017 and fiscal 2016 were primarily due to an increase in customer traffic.Segment profit margin decreased 0.1 percentage point to 13.0% in fiscal 2017. The decline in segment margin was driven by a decreaseleverage on increased sales, primarily in merchandise marginoccupancy and administrative costs, and higher supply chain and distribution center costs, which included the opening of a new distribution center. The decline in merchandise margin similar to the prior year, was primarily due to 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 segment margin were largely offset by expense leverage, primarily buying and occupancy costs, on the same store sales growth, as well as the benefit of transactional foreign currency activity resulting in foreign currency gains in fiscal 2017 as compared to foreign currency losses in fiscal 2016. These foreign currency gainslower store payroll reflecting lower COVID-related expenses, and losses result from the timing and settlement of payables denominated in currencies other than the Canadian Dollar.Segment profitlower incentive compensation costs. Merchandise margin decreased 0.5 percentage points to 13.1% in fiscal 2016. The decrease in segment margin was primarily due to a decrease in merchandise margins, the unfavorable impact of mark-to-market adjustments on inventory-related derivatives 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 werereflects strong markon partially offset by expense leverage on same store sales, particularly buying and occupancy costs.2018,2024, we plan an increase ofexpect to add approximately 3511 stores in Canada, which would increase selling square footage by approximately 7%2%.31 Fiscal Year Ended U.S. Dollars in millions January 28,
2017 January 30,
2016 January 31,
2015 $ 4,362.0 $ 4,226.9 $ 4,092.3 $ 235.5 $ 316.9 $ 337.4 5.4 % 7.5 % 8.2 % 2 % 4 % 3 % 503 456 407 44 39 33 35 35 — 582 530 440 10,787 9,970 9,109 714 639 545 667 667 — 12,168 11,276 9,654 Fiscal Year Ended U.S. dollars in millions January 28,
2023January 29,
2022Net sales $ 6,215 $ 5,729 Segment profit $ 347 $ 161 Segment margin 5.6 % 2.8 % Stores in operation at end of period: T.K. Maxx 629 618 Homesense 78 77 T.K. Maxx Australia 74 68 Total 781 763 Selling square footage at end of period (in millions): T.K. Maxx 13 13 Homesense 1 1 T.K. Maxx Australia 1 1 Total 15 15 increased 3% inwere $6.2 billion for fiscal 2017 to $4.4 billion2023, an increase of 8% compared to $4.2$5.7 billion infor fiscal 2016, on top of a 3% increase in fiscal 2016 compared to fiscal 2015.2022. The increase in net sales reflects having a fully open store base, compared to temporary store closures in fiscal 2017 reflected2022 as a 12% increase from new store sales (which includes Trade Secret forresult of the full fiscal year) and a 2% increase from same store sales,COVID-19 pandemic, which was partially offset by the unfavorablenegative foreign currency exchange rate impact from currency translation of 11%14%. The increase in same store20172023 and fiscal 2022, respectively.an increaseleverage on increased sales, primarily in customer traffic. Net sales for TJX International increased 3%occupancy and administrative costs as well as higher merchandise margin, lower COVID-related expenses in fiscal 2016 to $4.2 billion compared to $4.1 billion in fiscal 2015. The increase in fiscal 2016 reflected a 9% increase from new store salesstores and a 4% increase from same store sales,distribution centers and lower incentive compensation costs. Within merchandise margin, strong markon was partially offset by the unfavorable impact from foreign currency translation of 10%. Overall, e-commerce sales represent approximately 2% of TJX International’s net sales.Segment profit margin decreased 2.1% percentage points to 5.4% in fiscal 2017 compared to fiscal 2016. The inclusion of Trade Secret for the full year negatively impacted segment margin by 0.9 percentage points. In addition fiscal 2017 segment margin was negatively affected by the unfavorable impact of the mark-to-market adjustment of inventory derivatives, higher store payrollincremental freight costs and expense deleverage on the weak samehigher markdowns. Fiscal 2022 also reflected $157 million from government programs received in regions where we had temporary store sales growth.Segment profit margin decreased 0.7 percentage points to 7.5% inclosures.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.We2024, we expect to add approximately 4918 net new stores to TJX International in fiscal 2018,Europe and approximately 6 net new stores in Australia, which would increase selling square footage by approximately 6%2%. We plan to rebrand the Trade Secret stores to T.K. Maxx stores during fiscal 2018.General Corporate Expense: Fiscal Year Ended Dollars in millions January 28,
2017 January 30,
2016 January 31,
2015 $ 408.2 $ 395.6 $ 324.4 Fiscal Year Ended In millions January 28,
2023January 29,
2022General corporate expense $ 582 $ 611 Virtually all generalGeneral corporate expenses are primarily included in selling, general32and administrativeSG&A expenses. The increasemark-to-market adjustment of our fuel and inventory hedges is included in cost of sales, including buying and occupancy costs.2017 is2023 was primarily driven by continued investments in corporate systemslower share-based and technology along with increases inincentive compensation benefits and professional services. These increases werecosts, timing of funding to TJX’s charitable foundations partially offset by the impactmark-to-market adjustment on fuel and inventory derivatives.lower contributions to the TJX charitable foundations in fiscal 2017 than fiscal 2016.Increased contributions to the TJX charitable foundations, higher incentive compensation accruals due tocommercial paper. As of January 28, 2023, there were no short-term bank borrowings or commercial paper outstanding. We believe our above-plan performanceexisting cash and costs related to the acquisition of Trade Secret in Australia accounted for approximately $61 millioncash equivalents, internally generated funds and our credit facilities, under which facilities we had $1.5 billion available as of the increaseperiod ended January 28, 2023, as described in general corporateNote J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements, are adequate to meet our operating needs for the foreseeable future.fiscal 2016 as comparedthe future we may continue to fiscal 2015.LIQUIDITY AND CAPITAL RESOURCESactivities:Activities$3,602 million$4.1 billion in fiscal 2017, $2,937 million2023 and $3.1 billion in fiscal 2016 and $3,008 million in fiscal 2015. The cash generated from2022. Our operating activities in each of these fiscal years was largely due to operating earnings.Operating cash flows for fiscal 2017 increased by $665 million$1 billion compared to fiscal 2016. Net income, adjusted for non-cash items and2022 primarily due to the early extinguishment$1.5 billion change in merchandise inventories net of debt, increasedaccounts payable. The change in inventory was primarily driven by the fiscal 2022 rebuilding of inventory levels. The increase in operating cash flows in fiscal 2017 as compared to fiscal 2016was partially offset by $86 million. The change in merchandise inventory, net of the related change in accounts payable, resulted in an increase of cash of $60 million in fiscal 2017, compared to a use of cash of $290 million in fiscal 2016, positively impacting year-over-year cash flows by $350 million. The positive cash flow impact of the change in inventory and accounts payable in 2017 was due to lower inventory levels at fiscal 2017 year end and increased payments in fiscal 2016 due to merchandise received late in the fourth quarter of fiscal 2015 that was paid for in fiscal 2016. The change$0.7 billion decrease in accrued expenses, and other liabilities favorably impactedthe largest component of which was lower incentive compensation costs.flows by $536 millionoutflows of $1.5 billion in fiscal 2017 versus a favorable impact of $353 million2023 and $1 billion in fiscal 2016. This favorable impact of $183 million in year-over-year cash flows from operations was driven primarily by increased liabilities for deferred compensation, gift cards and deferred revenue, sales taxes and income taxes payable. Fiscal 2016 cash flow from operations was reduced by $23 million for the cost to acquire favorable lease rights.Operating cash flows for fiscal 2016 decreased by $71 million compared to fiscal 2015. Net income adjusted for the non-cash impact of depreciation and deferred income tax provision, provided cash of $2,926 million in fiscal 2016 compared to $2,906 million in fiscal 2015, an increase of $20 million. 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.2022. The cash flow impact of the changeoutflows for both periods were primarily driven by capital expenditures. inventory and accounts payable was primarily due to an increase in packaway inventory at the end of fiscal 2016 as compared to the prior year as well as the impact of merchandise received late in the fourth quarter of fiscal 2015 that was paid for in fiscal 2016. 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 primarily by an additional $100 million of voluntary contributions to our qualified pension plan in fiscal 2015 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.Investing activities: Our cash flows for investing activities include capital expenditures for the last threetwo fiscal years as set forth in the table below: Fiscal Year Ended In millions January 28,
2017 January 30,
2016 January 31,
2015 $ 191.2 $ 199.1 $ 201.5 274.8 299.7 266.8 558.7 390.6 443.2 $ 1,024.7 $ 889.4 $ 911.5 Fiscal Year Ended In millions January 28,
2023January 29,
2022New stores $ 164 $ 79 Store renovations and improvements 594 367 Office and distribution centers 699 599 Total capital expenditures $ 1,457 $ 1,045 20182024 will be in the range of approximately $1.2$1.7 billion to $1.9 billion, including approximately $600 million approximately $0.9 billion to $1 billion for our offices and distribution centers (including buying and merchandising systems and33$350 million $0.6 billion to approximately $250 million approximately $0.2 billion for new stores. We plan to fund these expenditures with our existing cash balances and through internally generated funds.In fiscal 2017, we purchased $717 million of investments, compared to $798 million fiscal 2016. Additionally, $529 million of investments were sold or matured during fiscal 2017 compared to $681 million in the prior year. 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, fiscal 2016 investing activities include the initial payment of $57 million for the acquisition of Trade Secret.Financing activities: Cash flows from financing activities resulted in net cash outflows of $1,562 million$3.3 billion in fiscal 2017, $2,176 million in fiscal 2016 and $1,560 million in fiscal 2015.During the fiscal 2017 third quarter we received2023 compared to net proceeds of $992.5 million from the issuance of $1 billion of 2.25% ten-year notes. A portion of the proceeds were used to redeem our $375 million 6.95% notes prior to their scheduled maturity. The redemption of the notes, including the prepayment penalty, resulted in cash outflows of $426 million. $6.2 billion in fiscal 2022. In fiscal 2023 the cash outflows were primarily driven by equity repurchases and dividend payments. In fiscal 2022 the cash outflows were primarily driven by equity repurchases, dividend payments and $3 billion of debt repayments.remaindercash outflows in fiscal 2022 were due to the completion of make-whole calls and the proceeds fromredemption at par of certain of our notes.notes offering were usedsecond quarter of fiscal 2024 and are included within our current maturities of long-term debt. See Note J—Long-Term Debt and Credit Lines of Notes to Consolidated Financial Statements for working capital and other general corporate purposes.TJX repurchased and retired 22.3 million shares of its common stock at a cost of $1.7 billion during fiscal 2017, on a “trade date basis.” TJX reflects stock repurchases in its financial statements on a “settlement date” or cash basis. additional information.programs,program, we spent $1.7paid $2.3 billion to repurchase 22.3and retire 34.9 million shares of our stock on a settlement basis in fiscal 2017, $1.82023. We paid $2.2 billion to repurchase 26.6and retire 31.3 million shares of our stock on a settlement basis in fiscal 2016 and $1.72022. These outflows for both periods were partially offset by proceeds from the exercise of employee stock options of $0.3 billion to repurchase 27.6 million shares of our stock in fiscal 2015. See Note E to the consolidated financial statements for more information. 2023 and $0.2 billion in fiscal 2022.2017, we announced that our2023, the Board of Directors authorized an additionalannounced a new stock repurchase program authorizingthat authorizes the repurchase of up to an additional $1.0$2 billion of TJX stock.our common stock from time to time. We currently plan to repurchase approximately $1.3$2 billion to $1.8$2.5 billion of stock under our stock repurchase programs in fiscal 2018.2024. 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.2017, $0.84 per share in fiscal 2016 and $0.70 per share in fiscal 2015.2022. Cash payments for dividends on our common stock totaled $651 million in$1.3 billion for both fiscal 2017, $544 million in2023 and fiscal 2016 and $466 million in fiscal 2015. We also received proceeds from the exercise of employee stock options of $164 million in fiscal 2017, $132 million in fiscal 2016 and $143 million in fiscal 2015.2022. We expect to pay quarterly dividends for fiscal 20182024 of $0.3125$0.3325 per share, or an annual dividend of $1.25$1.33 per share, subject to the declaration and approval ofby our Board of Directors. This would represent a 20%13% increase over the per share dividends declared and paid in fiscal 2017.We traditionally have funded our working capital requirements, including for seasonal merchandise, primarily through cash generated from operations, supplemented, as needed, by short-term bank borrowings and2023.issuance of commercial paper. As of January 28, 2017, our cash and cash equivalents held outside the U.S. were $1.3 billion, of which $341.7 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 earningsdescriptions of our subsidiaries in Canada, Puerto Rico, Italy, Indiafinancing arrangements, commitments 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 cashcontingencies, and cash equivalents, internally generated funds and our credit facilities are more than adequate to meet our operating needs over the next fiscal year. One of our credit facilities was amended subsequent to the fiscal year end and is more fully described in Note K to the consolidated financial statements.34Contractual obligations: As of January 28, 2017, we had known contractual obligations (including current installments)outlined below and within the following Notes to Consolidated Financial Statements.leasesexpenses and, in some cases, rentals based on a percentage of sales; these items totaled approximately one-third of the total minimum rent for propertyfiscal 2023.equipmentOther Liabilities, Current and purchase obligations as follows (in thousands): Payments Due by Period Tabular Disclosure of Contractual Obligations Total $ 2,808,964 $ 64,774 $ 129,173 $ 870,380 $ 1,744,637 8,521,086 1,455,642 2,629,436 1,997,670 2,438,338 3,440,995 3,307,565 86,016 45,865 1,549 $ 14,771,045 $ 4,827,981 $ 2,884,625 $ 2,913,915 $ 4,184,524 (1)Includes estimated interest costs and financing lease obligations.(2)Reflects minimum rent. Does not include costsLong Term of Notes to Consolidated Financial Statements 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 2017.(3)Includes estimated obligations under purchase orders for merchandise and under agreements for capital items, products and services used in our business, including executive employment and other agreements. Excludes agreements that can be cancelled without penalty.We also have long-term liabilities for which it is not reasonably possible for us to predict when they may be paid, which include $471.7 millionincludes $0.6 billion for employee compensation and benefits and $36.7 million$0.2 billion for uncertain tax positions.POLICIESaccounting principles generally accepted in the United States of America (GAAP)GAAP which requirerequires 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,estimates, involving uncertainty requiring management estimates and 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, weWe 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, butperiods; however, we take a full physical inventory near the 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.Impairment of long-lived assets, goodwill and tradenames: We evaluate the recoverability of the carrying value of our long-lived assets, goodwill and tradenames at least annually and whenever events or circumstances occur that would indicate that the carrying amounts of those assets are not recoverable. Significant judgment is involved in projecting the cash flows of individual stores, as well as of our business units, which involve a number of factors including historical trends, recent performance and general economic assumptions. If we determine that an impairment of long-lived assets, goodwill and 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. We determine the fair value of our business units using the discounted cash flow method which requires assumptions for the weighted average cost of capital (WACC) and revenue growth for the related business unit. The fair value of our business units exceeds their carrying value by a significant amount with the exception of35Sierra Trading Post (STP). Currently the fair value of STP exceeds the carrying value by approximately 10%. Our valuation for STP assumes a WACC of 10.1% for similar type entities and a perpetuity growth rate of 2%. An increase of 50 basis points in the WACC reduces the valuation by approximately $30 million and a decrease in the perpetuity growth rate of 50 basis points reduces the fair value by approximately $10 to $15 million. The valuation also assumes 15 to 20 new stores are opened annually over the next 10 years. We continue to transition STP from a promotional model to the off-price model and expand its store base. Although we are optimistic about the future of STP, since its acquisition these changes have resulted in operating results that have not met our short term expectations. The operating results of STP are not material to TJX’s consolidated results, if however their operating results continue to fall short of our projections it is possible we could be faced with an impairment of some or all of the $97 million of goodwill recorded at the time of acquisition.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 we determine annually based on market interest rates, and our estimated long-term rate of return, which can differ considerably from actual returns, can have a significant impact on the annual cost of retirement benefits and the funded status of our qualified pension plan. If our discount rate decreased 0.25 percentage points, our fiscal 2017 pension cost for our funded plan would have increased by approximately $10 million. Similarly, 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 2017 pension cost by approximately $3 million. 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 2017, 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 fair value of the awards is amortized as “share-based compensation” over the vesting periods during which the recipients are required to provide service. We use the Black-Scholes option pricing model for determining the fair value of stock options granted, which requires management to make significant judgments and estimates such as participant activity and market results. The use of different assumptions and estimates could have a material impact on the estimated fair value of stock option grants and the related compensation cost. A 5% increase in expected volatility would increase the per-option value of our most recent option award by 6% while a decrease of the same amount would decrease the per-option value of our most recent option award by 6%.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 2017 were to change by 5%, the fiscal 2017 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 $30.8 million for the unfunded portion of our casualty insurance program as of January 28, 2017.uncertain tax positions: LikeUncertain Tax Positions36expirationsexpiration of applicable statute of limitations or other resolutions of, or changes in, tax positions may differ either positively or negatively from the amounts we have accrued, and may result in reductions to or additions to accruals, refund claims or payments for periods not currently under examination or for which no claims have been made. Final resolutions of our tax positions or changes in accruals for uncertain tax positions could result in additional tax expense or benefit and could have a material impact on our results of operations of the period in which an examination or proceeding is resolved or in the period in which a changed outcome becomes probable and reasonably estimable.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 for10-K. We do not expect any recently issued accounting standards, including the dates of adoption and estimated effectspronouncements will have a material effect on our results of operations,consolidated financial position or cash flows.statements.ITEM 7A.Quantitative and Qualitative Disclosure about Market RiskTJX isFE—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 and swap contracts, designed to offset the gains or losses on the underlying exposures. The contracts are executed with banks we believe are creditworthy and are denominated in currencies of major industrial countries. 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 January 28, 2017 and January 30, 2016, theThe analysis indicated that such an adverse movement would not have a material effectpotential impact of approximately $104 million on our consolidated financial position37but could have reduced our pre-tax income for thein fiscal year by2023 and approximately $65 million and $69 million, respectively.JI—Pension Plans and Other Retirement Benefits of Notes to the consolidated financial statements)Consolidated Financial Statements) in a manner that attempts to minimize and controlmanage 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 DataITEM 9.Changes in and Disagreements with Accountants on Accounting and Financial DisclosureITEM 9A.Controls and Procedures20172023 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—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.20172023 based on criteria established inInternal Control—Integrated Framework 2013issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)(“COSO”). Based on that evaluation, management concluded that its internal control over financial reporting was effective as of January 28, 2017.(d) Attestation Report of the Independent Registered Public Accounting Firmourthe consolidated financial statements contained herein, has audited the effectiveness of our internal control over financial reporting as of January 28, 2017,2023, and has issued an attestation report on the effectiveness of our internal controlcontrols over financial reporting included herein.39“Executive Officers of the Registrant”“Information about our Executive Officers” in Part I of this report. TJX will file with the Securities and Exchange Commission (SEC) a definitive proxy statement no later than 120 days after the close of its fiscal year ended January 28, 2017 (Proxy Statement)2023 (“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 CommitteesLeadership and Meetings,Committees,” and “Audit Committee Report” and, if applicable, “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,” “Director Compensation” and “Compensation Program Risk Assessment”Assessment,” “Compensation Discussion and Analysis,” “Compensation Tables” and “Director Compensation” in our Proxy Statement, which sections (excluding “Compensation Tables - Pay versus Performance”) are incorporated herein by reference.and “Board Independence,” in our Proxy Statement, which section issections are incorporated herein by reference.Report”Report,” “Pre-Approval Policies” and “Auditor Fees” in our Proxy Statement, which sections are incorporated herein by reference.40SchedulesFinancial Statement SchedulesIn thousands Balance
Beginning
of Period Amounts
Charged to
Net Income Write-Offs
Against
Reserve
Period $ 41,723 $ 1,483,146 $ 1,481,633 $ 43,236 $ 35,476 $ 1,497,963 $ 1,491,716 $ 41,723 $ 37,429 $ 1,348,933 $ 1,350,886 $ 35,476 $ 19,686 $ 87,110 $ 75,986 $ 30,810 $ 14,303 $ 80,738 $ 75,355 $ 19,686 $ 14,696 $ 72,604 $ 72,997 $ 14,303 41In millions Balance Beginning of Period Amounts Charged to Net Income Write-Offs Against Reserve Balance End of
PeriodSales Return Reserve: Fiscal Year Ended January 28, 2023 $ 142 $ 5,600 $ 5,594 $ 148 Fiscal Year Ended January 29, 2022 $ 168 $ 5,627 $ 5,653 $ 142 Fiscal Year Ended January 30, 2021 $ 109 $ 3,530 $ 3,471 $ 168 b) ExhibitsIncorporate by Reference Exhibit No. Description Form Exhibit No. Filing
Date3(i).1 10-K 3(i).1 4/3/2019 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 4.06 8-K 4.1 4/1/2020 4.07 8-K 4.2 4/1/2020 4.08 8-K 4.3 4/1/2020 4.09 8-K 4.4 4/1/2020 4.10 8-K 4.5 4/1/2020 4.11 8-K 4.1 12/3/2020 4.12 8-K 4.2 12/3/2020 4.13 10-K 4.06 3/27/2020 10.01 10-Q 10.2 12/4/2018 10.02 10-Q 10.3 12/4/2018 10.03 10-K 10.03 4/3/2019 10.04 10-K 10.04 3/30/2022 10.05 10-Q 10.4 12/4/2018 10.06 10-K 10.05 4/3/2019 10.07 10-K 10.07 3/30/2022 10.08 10-K 10.4 4/4/2018 10.09 10-Q 10.6 12/4/2018 10.10 10-K 10.10 4/3/2019 10.11 10-K 10.09 3/31/2021 Incorporate by Reference Exhibit No. Description Form Exhibit No. Filing
Date10.12 10-Q 10.1 5/27/2022 10.13 10-K 10.5 4/4/2018 10.14 10-Q 10.5 12/4/2018 10.15 10-K 10.13 4/3/2019 10.16 10-K 10.13 3/31/2021 10.17 10-K 10.6 4/4/2018 10.18 10-Q 10.7 12/4/2018 10.19 10-K 10.16 4/3/2019 10.20 10-K 10.17 3/31/2021 10.21 10-Q 10.4 11/29/2022 10.22 10-Q 10.5 11/29/2022 10.23 10-Q 10.6 11/29/2022 10.24 10-Q 10.1 5/31/2013 10.25 10-Q 10.1 8/26/2016 10.26 10-K 10.8 3/28/2017 10.27 10-K 10.23 4/3/2019 10.28 10-Q 10.1 8/26/2022 10.29 10-Q 10.1 12/4/2018 10.30 10-Q 10.2 8/26/2022 10.31 10-Q 10.3 11/29/2022 10.32 10-Q 10.1 12/3/2013 10.33 10-Q 10.2 12/3/2013 10.34 10-Q 10.4 12/2/2014 10.35 10-Q 10.5 12/2/2014 10.36 10-Q 10.1 12/1/2015 10.37 10-Q 10.2 12/1/2015 10.38 10-Q 10.2 11/29/2022 10.39 10-K 10.19 3/29/2016 10.40 10-Q 10.02 5/31/2019 10.41 10-Q 10.1 5/28/2021 10.42 10-Q 10.2 5/28/2021 10.43 10-Q 10.2 5/27/2022 10.44 10-Q 10.3 5/27/2022 Incorporate by Reference Exhibit No. Description Form Exhibit No. Filing
Date10.45 10-K 10.20 3/31/2015 10.46 10-Q 10.2 8/26/2016 10.47 10-K 10.22 4/2/2013 10.48 10-K 10.9 4/29/1999 10.49 10-K 10.10 4/28/2000 10.50 10-K 10.17 3/29/2006 10.51 10-K 10.17 3/31/2009 10.52 10-Q 10.3 5/29/2015 10.53 10.K 10.46 3/30/2022 10.54 10-Q 10.5 10/31/2015 10.55 10.56 The Form of TJX Indemnification Agreement for its executive officers and directors*(p) 10-K 10(r) 4/27/1990 10.57 10-K 10.55 3/27/2020 10.58 8-K 10.1 5/21/2020 10.59 10-K 10.58 3/31/2021 10.60 10-K 10.56 3/27/2020 10.61 8-K 10.2 5/21/2020 10.62 10-K 10.61 3/31/2021 10.63 8-K 10.1 8/11/2020 10.64 10-K 10.63 3/31/2021 10.65 8-K 10.1 6/29/2021 21 23 24 ExhibitNo.Description of ExhibitIncorporate by Reference3(i).1Exhibit No.Description Fourth Restated Certificate of Incorporation is incorporated herein by reference to FormExhibit 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.No.Filing
Date3(ii).131.1By-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).4.2Third 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, 2013.4.3Fourth 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, 2014.4.4Indenture between The TJX Companies, Inc. and U.S. Bank National Association dated September 12, 2016 is incorporated herein by reference to Exhibit 4.1 to the Form 8-K filed on September 12, 2016.4.5First Supplemental Indenture dated as of September 12, 2016 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 September 12, 2016.10.1The Amended and Restated Employment Agreement dated January 29, 2016 between Carol Meyrowitz and TJX is incorporated herein by reference to Exhibit 10.1 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.2The Amended and Restated Employment Agreement dated January 29, 2016 between Ernie Herrman and TJX is incorporated herein by reference to Exhibit 10.2 to the Form 10-K filed for the fiscal year ended January 30, 2016.*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 fiscal 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. The Letter Agreement dated January 27, 2017 between and among Michael MacMillan, NBC Attire, Inc. and TJX is filed herewith.*10.4The Employment Agreement dated March 10, 2017 between and among Michael MacMillan, Winners Merchants International LP and TJX is filed herewith.*10.5The 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.*10.6The 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.*10.7The 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.*4210.8The 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.* The First Amendment to the Stock Incentive Plan (2013 Restatement) effective as of June 7, 2016 is incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended July 30, 2016. The Second Amendment to the Stock Incentive Plan (2013 Restatement) effective as of January 29, 2017 is filed herewith.*10.9The 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.*10.10The 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.*10.11The 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.*10.12The 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 fiscal year ended January 28, 2012.*10.13The 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.*10.14The 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.*10.15The 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.*10.16The 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.*10.17The 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 fiscal 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.*10.18The 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.*4310.19The Form of Performance-Based Deferred Stock Award granted under the Stock Incentive Plan as of March 29, 2016 is incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended April 30, 2016.*10.20The Performance-Based Restricted Stock Award granted under the Stock Incentive Plan on January 29, 2016 to Carol Meyrowitz is incorporated herein by reference to Exhibit 10.17 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.21The Restricted Stock Unit Award granted under the Stock Incentive Plan on January 29, 2016 to Ernie Herrman is incorporated herein by reference to Exhibit 10.18 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.22The 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.* The Form of Deferred Stock Award for Directors granted under the Stock Incentive Plan as of June 7, 2016 is incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended July 30, 2016.*10.23Description of Director Compensation Arrangements is filed herewith.*10.24The 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 fiscal year ended February 2, 2013.*10.25The 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.*10.26The 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.*10.27The 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 incorporated herein by reference to Exhibit 10.24 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.28The 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.*10.29The 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.*10.30The 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.*10.31The 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.*10.32The 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 theForm 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.4424Power of Attorney given by the Directors and certain Executive Officers of TJX is filed herewith.31.131.2 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 January 28, 2017,2023, formatted in XBRL (ExtensibleInline Extensible Business Reporting Language)Language (iXBRL): (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.Statements104 The cover page from The TJX Companies, Inc.'s Annual Report on Form 10-K for the fiscal year ended January 28, 2023, formatted in iXBRL (included in Exhibit 101) *Management contract or compensatory plan or arrangement.applicable45THE TJX COMPANIES, INC. By/s/ SCOTT GOLDENBERGJOHN KLINGERDated: March 28, 201729, 2023 Scott Goldenberg,John Klinger, Chief Financial Officer/s/ JOHN KLINGER Ernie Herrman, Chief Executive Officer, President and Director (Principal (Principal Executive Officer)/s/ SCOTT GOLDENBERGScott Goldenberg,John Klinger, Chief Financial Officer
(Principal Financial and Accounting Officer)ZEIN ABDALLA*Zein Abdalla,JOSÉ B. ALVAREZ*MICHAEL F. HINES* José B. Alvarez, Director ALAN M. BENNETT* AMY B. LANE* Alan M. Bennett, Director Amy B. Lane, Director JOSE B. ALVAREZ*José B. Alvarez, DirectorRosemary T. Berkery, Director Carol Meyrowitz, Executive Chairman of the Board of Directors ALAN M. BENNETT*Alan M. Bennett, DirectorDavid T. Ching, Director Jackwyn L. Nemerov, Director DAVID T. CHING*David T. Ching, DirectorJOHN F. O’BRIEN*John F. O’Brien, DirectorC. Kim Goodwin, Director MICHAEL F. HINES*Michael F. Hines, DirectorWILLOW B. SHIRE*Willow B. Shire, Director*BY/s/ SCOTT GOLDENBERGDated: March 28, 2017Scott Goldenberg,as attorney-in-fact46The TJX Companies, Inc.INDEX TO CONSOLIDATED FINANCIAL STATEMENTSFor Fiscal Years Ended January 28, 2017, January 30, 2016 and January 31, 2015.*BY /s/ JOHN KLINGER Dated: March 29, 2023 John Klinger,
as attorney-in-factF-2F-3F-4F-5F-6F-7F-841ToThe:In our opinion,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”) atas of January 28, 20172023 and January 30, 2016,29, 2022 and the resultsrelated consolidated statements of their operationsincome, of comprehensive income, of shareholders' equity and theirof cash flows for each of the three years in the period ended January 28, 20172023 including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended January 28, 2023 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 January 28, 2023, 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 28, 2017,2023 based on criteria established inInternal Control - Integrated Framework 2013 (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO.Company’sCompany's management is responsible for these consolidated financial statements, and the financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control overOver 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’sCompany'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).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.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.28, 2017F-2The Fiscal Year Ended $ 33,183,744 $ 30,944,938 $ 29,078,407 23,565,754 22,034,523 20,776,522 5,768,467 5,205,715 4,695,384 51,773 — 16,830 31,173 — — 43,534 46,400 39,787 3,723,043 3,658,300 3,549,884 1,424,809 1,380,642 1,334,756 $ 2,298,234 $ 2,277,658 $ 2,215,128 $ 3.51 $ 3.38 $ 3.20 655,647 673,484 692,691 $ 3.46 $ 3.33 $ 3.15 664,432 683,251 703,545 $ 1.04 $ 0.84 $ 0.70 Fiscal Year Ended January 28,
2023January 29,
2022January 30,
2021Net sales $ 49,936 $ 48,550 $ 32,137 Cost of sales, including buying and occupancy costs 36,149 34,714 24,534 Selling, general and administrative expenses 8,927 9,081 7,021 Impairment on equity investment 218 — — Loss on early extinguishment of debt — 242 312 Interest expense, net 6 115 181 Income before income taxes 4,636 4,398 89 Provision (benefit) for income taxes 1,138 1,115 (1) Net income $ 3,498 $ 3,283 $ 90 Basic earnings per share $ 3.00 $ 2.74 $ 0.08 Weighted average common shares – basic 1,166 1,200 1,200 Diluted earnings per share $ 2.97 $ 2.70 $ 0.07 Weighted average common shares – diluted 1,178 1,216 1,215 F-3The Fiscal Year Ended Amounts in thousands $ 2,298,234 $ 2,277,658 $ 2,215,128 (52,611 ) (143,923 ) (218,700 ) — — (4,762 ) (11,239 ) 9,629 (139,366 ) 18,804 — — 684 684 452 17,608 20,523 7,523 (26,754 ) (113,087 ) (354,853 ) $ 2,271,480 $ 2,164,571 $ 1,860,275 Fiscal Year Ended January 28,
2023January 29,
2022January 30,
2021Net income $ 3,498 $ 3,283 $ 90 Additions to other comprehensive income (loss): Foreign currency translation adjustments, net of related tax benefit of $7 and tax provisions of $0 and $2 in fiscal 2023, 2022 and 2021, respectively (56) (45) 14 Recognition of net gains/losses on benefit obligations, net of related tax provision of $41 in fiscal 2023, tax benefit of $18 in fiscal 2022 and tax provision of $10 in fiscal 2021 121 (48) 31 Reclassifications from other comprehensive (loss) to net income: Amortization of loss on cash flow hedge, net of related tax provisions of $1 and $0 in fiscal 2022 and 2021, respectively — 0 1 Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $6, $5 and $7 in fiscal 2023, 2022 and 2021, respectively 16 13 20 Other comprehensive income (loss), net of tax 81 (80) 66 Total comprehensive income $ 3,579 $ 3,203 $ 156 F-4The Fiscal Year Ended January 28,
2017 January 30,
2016 $ 2,929,849 $ 2,095,473 543,242 352,313 258,831 238,072 3,644,959 3,695,113 373,893 391,589 7,750,774 6,772,560 4,532,894 4,137,575 6,193 13,831 195,871 193,911 398,076 372,554 $ 12,883,808 $ 11,490,431 $ 2,230,904 $ 2,203,050 2,320,464 2,069,659 206,288 129,521 4,757,656 4,402,230 1,073,954 881,021 314,000 285,102 2,227,599 1,615,003 — — 646,319 663,496 — — (694,226 ) (667,472 ) 4,558,506 4,311,051 4,510,599 4,307,075 $ 12,883,808 $ 11,490,431 Fiscal Year Ended January 28,
2023January 29,
2022Assets Current assets: Cash and cash equivalents $ 5,477 $ 6,227 Accounts receivable, net 563 518 Merchandise inventories 5,819 5,962 Prepaid expenses and other current assets 478 437 Federal, state and foreign income taxes recoverable 119 115 Total current assets 12,456 13,259 Net property at cost 5,783 5,271 Non-current deferred income taxes, net 158 185 Operating lease right of use assets 9,086 8,854 Goodwill 97 97 Other assets 769 795 Total assets $ 28,349 $ 28,461 Liabilities Current liabilities: Accounts payable $ 3,794 $ 4,465 Accrued expenses and other current liabilities 4,346 4,245 Current portion of operating lease liabilities 1,610 1,577 Current portion of long-term debt 500 — Federal, state and foreign income taxes payable 55 181 Total current liabilities 10,305 10,468 Other long-term liabilities 919 1,015 Non-current deferred income taxes, net 127 44 Long-term operating lease liabilities 7,775 7,576 Long-term debt 2,859 3,355 Commitments and contingencies (See 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 1,155,437,908 and 1,181,188,731 shares, respectively 1,155 1,181 Additional paid-in capital — — Accumulated other comprehensive (loss) income (606) (687) Retained earnings 5,815 5,509 Total shareholders’ equity 6,364 6,003 Total liabilities and shareholders’ equity $ 28,349 $ 28,461 F-5The Fiscal Year Ended Amounts in thousands January 28,
2017 January 30,
2016 January 31,
2015 $ 2,298,234 $ 2,277,658 $ 2,215,128 658,796 616,696 588,975 5,207 3,383 3,897 (5,503 ) 31,204 102,070 102,251 94,107 88,014 51,773 — 16,830 31,173 — — (70,999 ) (64,680 ) (95,063 ) (23,235 ) (27,357 ) (9,052 ) 11,862 (506,633 ) (332,271 ) (9,600 ) (40,103 ) (8,756 ) 48,253 216,265 285,223 389,399 284,929 20,800 146,766 68,014 144,977 (32,483 ) (16,140 ) (12,403 ) 3,601,894 2,937,343 3,008,369 (1,024,747 ) (889,380 ) (911,522 ) (716,953 ) (798,008 ) (431,152 ) 529,146 681,377 388,037 (2,324 ) (57,104 ) — (1,214,878 ) (1,063,115 ) (954,637 ) 992,540 — 749,475 (425,584 ) — (416,357 ) (9,921 ) — (6,185 ) (3,150 ) — (7,937 ) (1,699,998 ) (1,828,297 ) (1,650,704 ) 164,190 132,033 143,005 70,999 64,680 95,063 (650,988 ) (544,271 ) (465,902 ) (1,561,912 ) (2,175,855 ) (1,559,542 ) 9,272 (96,675 ) (150,161 ) 834,376 (398,302 ) 344,029 2,095,473 2,493,775 2,149,746 $ 2,929,849 $ 2,095,473 $ 2,493,775 Fiscal Year Ended January 28,
2023January 29,
2022January 30,
2021Cash flows from operating activities: Net income $ 3,498 $ 3,283 $ 90 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 887 868 871 Impairment on equity investment 218 — — Loss on early extinguishment of debt — 242 312 Loss on property disposals and impairment charges 23 9 84 Deferred income tax provision (benefit) 64 (44) (231) Share-based compensation 122 189 59 Changes in assets and liabilities: (Increase) in accounts receivable (51) (61) (71) Decrease (increase) in merchandise inventories 58 (1,658) 589 (Increase) decrease in income taxes recoverable (5) (78) 11 (Increase) decrease in prepaid expenses and other current assets (73) 33 (57) (Decrease) increase in accounts payable (600) (338) 2,111 (Decrease) increase in accrued expenses and other liabilities (23) 659 585 (Decrease) increase in income taxes payable (126) 100 53 (Decrease) increase in net operating lease liabilities (1) (129) 200 Other, net 93 (18) (44) Net cash provided by operating activities 4,084 3,057 4,562 Cash flows from investing activities: Property additions (1,457) (1,045) (568) Purchases of investments (31) (22) (29) Sales and maturities of investments 18 21 18 Net cash (used in) investing activities (1,470) (1,046) (579) Cash flows from financing activities: Payments for repurchase of common stock (2,255) (2,176) (202) Proceeds from issuance of common stock 321 229 211 Cash dividends paid (1,339) (1,252) (278) Payments on revolving credit facilities — — (1,000) Proceeds from long-term debt including revolving credit facilities — — 5,987 Payments of long-term debt and extinguishment expenses — (2,976) (1,418) Other (33) (25) (72) Net cash (used in) provided by financing activities (3,306) (6,200) 3,228 Effect of exchange rate changes on cash (58) (54) 42 Net (decrease) increase in cash and cash equivalents (750) (4,243) 7,253 Cash and cash equivalents at beginning of year 6,227 10,470 3,217 Cash and cash equivalents at end of year $ 5,477 $ 6,227 $ 10,470 F-6TheSHAREHOLDERS’SHAREHOLDERS' EQUITY Common Stock
Capital
Other
Comprehensive
Income (Loss)
Earnings Amounts in thousands Shares Par Value
$1 705,017 $ 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 — — — — 2,298,234 2,298,234 — — — (26,754 ) — (26,754 ) — — — — (680,183 ) (680,183 ) — — 102,251 — — 102,251 5,101 5,101 204,873 — — 209,974 (22,278 ) (22,278 ) (307,124 ) — (1,370,596 ) (1,699,998 ) 646,319 $ 646,319 $ — $ (694,226 ) $ 4,558,506 $ 4,510,599 Common Stock Additional
Paid-In
CapitalAccumulated
Other
Comprehensive (Loss) IncomeRetained
EarningsTotal Shares Balance, February 1, 2020 1,199 $ 1,199 $ — $ (673) $ 5,422 $ 5,948 Net income — — — — 90 90 Other comprehensive income, net of tax — — — 66 — 66 Cash dividends declared on common stock — — — — (312) (312) Recognition (reversal) of share-based compensation — — 113 — (54) 59 Issuance of common stock under stock incentive plan and related tax effect 9 9 175 — 0 184 Common stock repurchased (3) (3) (27) — (172) (202) Balance, January 30, 2021 1,205 $ 1,205 $ 261 $ (607) $ 4,974 $ 5,833 Net income — — — — 3,283 3,283 Other comprehensive (loss), net of tax — — — (80) — (80) Cash dividends declared on common stock — — — — (1,249) (1,249) Recognition of share-based compensation — — 189 — — 189 Issuance of common stock under stock incentive plan and related tax effect 7 7 196 — 0 203 Common stock repurchased (31) (31) (646) — (1,499) (2,176) Balance, January 29, 2022 1,181 $ 1,181 $ — $ (687) $ 5,509 $ 6,003 Net income — — — — 3,498 3,498 Other comprehensive income, net of tax — — — 81 — 81 Cash dividends declared on common stock — — — — (1,373) (1,373) Recognition of share-based compensation — — 122 — — 122 Issuance of common stock under stock incentive plan and related tax effect 9 9 279 — — 288 Common stock repurchased (35) (35) (401) — (1,819) (2,255) Balance, January 28, 2023 1,155 $ 1,155 $ — $ (606) $ 5,815 $ 6,364 F-7The TJX Companies, Inc.:consolidated 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 consolidated financial statements of all of TJX’s subsidiaries, all of which are wholly owned. All of itsthe Company's activities are conducted by TJX or its subsidiaries and are consolidated in these consolidated financial statements. All intercompany transactions have been eliminated in consolidation.:2017 (fiscal 2017)2023 (“fiscal 2023”), January 30, 2016 (fiscal 2016)29, 2022 (“fiscal 2022”) and January 31, 2015 (fiscal 2015) each included 52 weeks.Earnings Per Share: All earnings per share amounts refer to diluted earnings per share, unless otherwise indicated.: Preparation The TJX Companies, Inc. 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, impairment 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 thosethese estimates, and such differences could be material.Recognition: TJX records revenue at the time of sale and receiptRecognitionby 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% of total revenues, primarily generated from shipping fee revenue on our online sales. In addition, certain customers, primarily Associates, 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 are recognized when control of the goods transfer to the customer and are 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.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.In millions January 28,
2023January 29,
2022Balance, beginning of year $ 685 $ 576 Deferred revenue 1,927 1,832 Effect of exchange rates changes on deferred revenue (5) (2) Revenue recognized (1,886) (1,721) Balance, end of year $ 721 $ 685 we estimatethe Company estimates the amount of gift cards and store cards that will not be redeemed (referred to as breakage) and, to the extent allowed by local law, these amounts are amortized into income over the estimated redemption period. Revenue recognized from breakage was $20.5$44 million in fiscal 2017, $13.82023, $21 million in fiscal 20162022 and $17.8$14 million in fiscal 2015. We estimate2021.dateCompany may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of receipt byrevenue to recognize. The Company has elected to apply the customerportfolio practical expedient. The Company estimates the variable consideration using the expected 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 separately 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.:costs: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:EquivalentsInvestmentsIf applicable, investments with maturities greater than 90 days but less than one year at the date of purchase are included in short-term investments. These investments are classified as trading securities and are stated at fair value. Investments are classified as either short-short-term or long-term based on their original maturities. TJX’s investments are primarily high-grade commercial paper, institutional money market funds and time deposits with major banks.F-82017,2023, TJX’s cash and cash equivalents held outside the U.S. were $1.3$1.2 billion, of which $341.7 million$0.7 billion was held in countries where TJX has the intention to reinvest any undistributed earnings indefinitely.:Sierra Trading Post (STP), and Trade Secret.T.K. Maxx in Australia which is immaterial. 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.(i.e. inventory in transit and unprocessed inventory in ourthe Company’s 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 sheetConsolidated Balance Sheets include an accrual for in-transit inventory of $641.9 million$1.3 billion at January 28, 20172023 and $690.3 million$1.7 billion at January 30, 2016.29, 2022. Comparable amounts were reflected in accountsAccounts payable at those dates.Equity:Equity(APIC)(“APIC”) and the balance charged to retained earnings. Due to the high volume of share repurchases over the past several years,under previous programs, TJX has historically had no remaining balance in APIC at the end of any of the years presented.APIC. All shares repurchased have been retired.greater than the deferred tax assets created at the time of expensing the options are credited to APIC; any deficiencies in the tax benefits are debited to APIC to the extent a pool for such deficiencies exists. In the absence of a pool, anyor deficiencies are realizedincluded in the related periods’ statements of income through the provision for income taxes. Any excess income tax benefits are included in cash flows from financing activities in the statements of cash flows. The par value of performance share units and restricted stock awardsunits is also added to common stock when shares are delivered following performance measurement date or service period to the stock is issued, generally at grant date.extent vesting requirements have been achieved. The fair value of the restricted stock awards in excess of par value isand units are added to APIC as the awards are amortized into earnings over the related requisite service periods.Compensation:Compensationperformance-based restricted stock awards. Performance-based awards are evaluated quarterly for probability of vesting and performance achievement levels. See Note IH—Stock Incentive Plan for a detailed discussion of share-based compensation.:net interest expense: Fiscal Year Ended Dollars in thousands January 28,
2017 January
30, 2016 January
31, 2015 $ 69,219 $ 68,253 $ 64,783 (7,548 ) (7,984 ) (9,403) (18,137 ) (13,869 ) (15,593) $ 43,534 $ 46,400 $ 39,787 Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Interest expense $ 91 $ 123 $ 199 Capitalized interest (7) (4) (5) Interest (income) (78) (4) (13) Interest expense, net $ 6 $ 115 $ 181 projects. Capitalizedprojects and adds the interest is added to the cost of the related assets. Capitalized interest in fiscal 2017, 20162015 relates to costs on active owned real estate projects and development costs on a merchandising system.Depreciation and Amortization:EquipmentF-9$664.52017, $622.0 million in2022 and fiscal 2016 and $595.6 million in fiscal 2015.2021. TJX had no property held under capitalfinance leases during fiscal 2017, 2016,2023, fiscal 2022 or 2015.fiscal 2021. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for internally developed software are capitalized and amortized, generally 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.: TJX beginsrecord rent expense when it takesuse an underlying asset for the lease term and lease liabilities represent TJX’s obligation to make lease payments arising from the lease. At the inception of the arrangement, the Company determines if an arrangement is a lease based on assessment of the terms and conditions of the contract. Operating lease ROU assets and lease liabilities are recognized at possession date based on the present value of alease payments over the lease term. The majority of the Company’s leases are retail store whichlocations, and the possession date 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.Asset Retirement Obligations: The Company establishes TJX’s lessors do not provide an asset retirement obligation, and related asset, for leases of property that require us to return the property to its original condition (commonly referred to as a reinstatement provision) if and when we exit the facility. These reinstatement provisions are primarily applicable to our European locations. The income statement impact of our asset retirement obligationimplicit rate, nor is recorded in general corporate expenses and our operating divisions are charged the actual costs incurred when a retirement takes place.Build to Suit accounting—Lease agreements involving property built to our specifications are reviewed to determine if our involvement in the construction project requires that we account for the project costs as if we were the owner for accounting purposes. We have entered into several lease agreements where we are deemed the owner of a construction project for accounting purposes. Thus, during construction of the facility the construction costs incurred by the lessor are included as a construction in progress asset along with a related liability of the same amount on our balance sheet. Upon completion of the project, a sale-leaseback analysis is performed to determine ifone readily available, therefore the Company should record a saleuses its incremental borrowing rate based on the information available at possession date in determining the present value of future lease payments. The incremental borrowing rate is calculated based on the US Consumer Discretionary yield curve and adjusted for collateralization and foreign currency impact for TJX International and Canada leases. The operating lease ROU assets also include any acquisition costs offset by lease incentives. The Company’s lease terms include options to remove the related asset and related obligation and recordextend the lease as either an operating or capital lease obligation. Ifwhen it is reasonably certain that the Company is precluded from derecognizing the asset when construction is complete, due to continuing involvement beyond a normal leaseback, the lease is accountedwill exercise that option. Lease expense for as a financing transaction and the recorded asset and related financing obligation remain on the Consolidated Balance Sheets. Accordingly, the asset is depreciated over its estimated useful life in accordance with the Company’s policy and a portion of the lease payments is allocated to ground rent and treated as an operating lease. The portion ofrecognized on a straight-line basis over the lease payment allocated to ground rental expense is based on the fair valueterm within “Cost of the land at the commencementsales, including buying and occupancy costs”. See Note L—Leases for a detailed discussion of construction. Lease payments allocated to the non-land asset are recognized as reductions to the financing obligation and interest expense.:as well aswhich is included in the Marmaxx segment. The Company’s goodwill also includes the excess of cost over the estimated fair market value of the net assets acquired by TJX in the purchase of Winners in fiscal 1991, the purchase of Sierra Trading Postincluded in fiscal 2013, andTJX Canada, as well as the purchase of Trade Secret in fiscal 2016, (See Note B). which was re-branded under the T.K. Maxx name during fiscal 2018 and is included in TJX International.component:Amounts in thousands Marmaxx Winners Sierra
Trading
Post Trade
Secret Total $ 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 — 99 — 1,861 1,960 $ 70,027 $ 1,686 $ 97,254 $ 26,904 $ 195,871 In millions Marmaxx TJX Canada TJX International Total Balance, January 30, 2021 $ 70 $ 2 $ 27 $ 99 Effect of exchange rate changes on goodwill — 0 (2) (2) Balance, January 29, 2022 $ 70 $ 2 $ 25 $ 97 Effect of exchange rate changes on goodwill — 0 0 0 Balance, January 28, 2023 $ 70 $ 2 $ 25 $ 97 F-10by calculatingutilizing the relief from royalty method, which calculates the discounted present value of assumed after-tax royalty payments. The Marshalls tradename is carried 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 valueyears. During the first quarter of $28.0 million in fiscal 2017, $30.6 million in fiscal 2016 and $33.2 million in fiscal 2015 net of amortization of $10.5 million, $7.9 million and $5.3 million in fiscal 2017, fiscal 2016 and fiscal 2015, respectively. The2021, the Company fully impaired the Trade Secret tradename, recording an impairment charge of $5 million.being amortized over 7 years and was carried at a valueroll forward of $11.0 million in fiscal 2017 and $11.6 million in fiscal 2016 net of amortization of $1.6 million and $300,000 in fiscal 2017 and 2016, respectively.Fiscal Year Ended January 28, 2023 January 29, 2022 In millions Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Definite-lived intangible assets: Sierra Trading Post $ 39 $ (27) $ 12 $ 39 $ (24) $ 15 Trade Secret $ 13 $ (13) $ — $ 13 $ (13) $ — Indefinite-lived intangible asset: Marshalls $ 108 $ — $ 108 $ 108 $ — $ 108 :its long-lived assets, goodwillincluding tradenames that are amortized and tradenamesoperating lease right of use assets, for indicators of impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable, and at least annually in the fourth quarter of each fiscal year. An impairment exists when the undiscounted cash flow of an asset or asset group is less than the carrying cost of that asset or asset group.Therecoverable. This evaluation for long-lived assets is performed at the lowest level of identifiable cash flows which are largely independent of other groups of assets, which is generally at the individual store level.level for fixed assets and operating lease right of use assets, and at 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. The store-by-store evaluations did not indicate any recoverability issuescharge 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 resulted in each ofimmaterial impairment charges on operating lease ROU assets and store fixed assets in fiscal 2023, fiscal 2022 and fiscal 2021. In fiscal 2021, the past threeCompany fully impaired the Trade Secret tradename. There were no impairments related to tradenames in fiscal years.isand indefinite life tradenames 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. 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. WeThe Company 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 2017 and fiscal 2016, we bypassed the qualitative assessment and performed the first step of the quantitative goodwill impairment test.TradenamesIndefinite life tradenames are also tested for impairment whenever events or changes in circumstances indicate that theby comparing their carrying amount of the tradename may exceed itsvalue to their fair value, and at least annually in the fourth quarter of each fiscal year. Testingwhich is performeddetermined by comparingcalculating the discounted present value of assumed after-tax royalty paymentspayments. In fiscal 2023, fiscal 2022 and fiscal 2021, the Company bypassed the qualitative assessment and performed the quantitative impairment test. There were no impairments related to the carrying value of the tradename.There was no impairment related to ourCompany’s goodwill or indefinite life tradenames in fiscal 2017, 20162023, fiscal 2022, or 2015.:$402.6 million$0.5 billion for both fiscal 2023 and fiscal 2022 and $0.3 billion for fiscal 2017, $382.9 million for fiscal 2016 and $371.3 million for fiscal 2015.:accumulatedAccumulated other comprehensive income (loss). income. Activity of the foreign operations that affect the statementsConsolidated Statements of incomeIncome and cash flowsCash Flows is translated at average exchange rates prevailing during the fiscal year.Contingencies:ContingenciesRecently Issued: In May 2014, a pronouncement was issued that creates common revenue recognition guidance for GAAP. The new guidance supersedes most preexisting revenue recognitionF-11guidance. The core principle of the guidance is that an entity should recognize revenuedepict 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 deferred its effective date for one year.Accounting Standards Update (“ASU”). The proposed update stipulatesCompany has 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 presented 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 January 26, 2019. We believehas determined that there will be no change in the timing or amount of revenue recognized under the new standard as it relates to revenue from point of sale at the registers in our stores, which constitutes more than 95% of the Company’s revenue. We continue to evaluate other revenue streams such as e-commerce sales and shipping revenue and there may be a slight change in the timing of when such revenue is recognized. The new standard will require a change in the presentation of our sales return reserve on the balance sheet, which we record net. The new standard will require the reserve be established at the gross sales value with an asset established for the value of the merchandise returned. We do not expect this change to have material impact on our financial condition or results of operation.In February 2016, a pronouncement was issued that aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. The new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permitted and modified retrospective application is required. The company expects this standard to have a material impact on its statement of financial condition as it will record a significant asset and liability associated with its more than 3,800 leased locations. We cannot assess the income statement impact at this time as we needeither not apply to assess if the initial lease term will differ under the new standard versus current accounting practice. If the lease term remains unchanged the income statement impact of the new standardTJX or is not expected to be material. The company is inmaterial to its Consolidated Financial Statements upon adoption, and, therefore, the process of evaluating its lease portfolio and identifying what additional data will be needed to comply with the new standard. We are also evaluating available software options and system support that will be required to implement the new accounting process. We do not currently plan to adopt early.In March 2016, a pronouncement was issued that aims to simplify several aspects of accounting and reporting for share-based payment transactions. One provision requires that excess income tax benefits and tax deficiencies related to share-based payments be recognized within income tax expense in the statement of income, rather than within additional paid-in capital on the balance sheet. The guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods, with early adoption permitted. The impact of this standard is dependent upon levels of activity in future periods but would have been a $70.0 million benefit to provision for income taxes in fiscal 2017. The standard will be effective for the first quarter of fiscal 2018.In August 2016, a pronouncement was issued that addresses diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. The standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. TJX does not expect this standard to have a material impact on our consolidated financial statements.In January 2017, a pronouncement was issued that aims to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, goodwill impairment will be measured as the amount by which the carrying value exceeds the fair value. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. The new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods. Early adoption is permitted for annual or interim goodwill impairment tests performed on testing dates after January 1, 2017. TJX does not expect this standard to have a material impact on our consolidated financial statements.F-12Recently Adopted Accounting Standards: 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 was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For TJX, the standard was effective in the first quarter of fiscal 2017. As a result, we have recast the January 30, 2016 consolidated balance sheet to conform to the current period presentation. The adoption of this standard reduced previously-presented other assets by $9.1 million and reduced long-term debt by $9.1 million as of January 30, 2016.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 eligible to be measured at fair value using the net asset value per share practical expedient. Those disclosures are instead 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.Revisions: We have revised certain amounts in the financial statements and the accompanying notes to properly present debt issuance costs as a component of long-term debt rather than other assets.Acquisition of Trade SecretOn October 24, 2015, TJX purchased Trade Secret, an off-price retailer that operates 35 stores in Australia, for AUD$83.3 million (U.S. $59.4 million). the final allocation of the purchase price to the assets and liabilities acquired based on their estimated fair values as of October 24, 2015:In thousands Allocation of
purchase price $ 25,899 10,184 37,416 73,499 (14,071 ) $ 59,428 Goodwill and intangible assets include identified intangible assets of $12 million for the value of the tradename “Trade Secret” which is being amortized over 7 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 would not have produced a material impact on TJX’s sales, net income or earnings per share as reported.F-13Note C. Property at CostPresented below are the components of property at cost: Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 $ 1,247,585 $ 1,013,247 2,884,054 2,817,929 4,871,764 4,412,848 $ 9,003,403 $ 8,244,024 4,470,509 4,106,449 $ 4,532,894 $ 4,137,575 During fiscal 2017 the Company identified fully depreciated assets that were no longer in use and should have been written off during fiscal 2017 or prior periods. The fiscal 2016 property at cost and accumulated depreciation was reduced by $825 million. There was no impact to net property at cost. This error was not material to our consolidated financial statements, however we have corrected amounts for the prior fiscal year to reflect the write off that should have been recorded at that time. Fiscal Year Ended In millions January 28,
2023January 29,
2022Land and buildings $ 2,043 $ 1,912 Leasehold costs and improvements 3,874 3,652 Furniture, fixtures and equipment 7,400 6,872 Total property at cost $ 13,317 $ 12,436 Less accumulated depreciation and amortization 7,534 7,165 Net property at cost $ 5,783 $ 5,271 Fiscal Year Ended Dollars in thousands $ 3,312,210 $ 3,101,846 283,688 242,705 920,710 782,970 16,286 10,054 $ 4,532,894 $ 4,137,575 Fiscal Year Ended In millions January 28,
2023January 29,
2022United States $ 4,518 $ 4,041 Canada 274 248 Europe 923 927 Australia 68 55 Total long-lived tangible assets $ 5,783 $ 5,271 D.C. Accumulated Other Comprehensive (Loss) Income (Loss)accumulatedAccumulated other comprehensive (loss) income (loss) relate to the Company’s foreign currency translation adjustments, deferred gains/losses on pension and other post-retirement obligations and a cash flowF-14accumulatedAccumulated other comprehensive (loss) income (loss) for fiscal 2017,2023, fiscal 20162022 and fiscal 2015:Amounts in thousands Foreign
Currency
Translation Cash Flow
Hedge on Debt Accumulated
Other
Comprehensive
Income (Loss) $ (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 ) (52,611 ) — — (52,611 ) — (11,239 ) — (11,239 ) — 18,804 — 18,804 — — 684 684 — 17,608 — 17,608 $ (491,803 ) $ (199,481 ) $ (2,942 ) $ (694,226 ) In millions and net of immaterial taxes Foreign
Currency
TranslationDeferred
Benefit CostsCash Flow
Hedge on DebtAccumulated
Other
Comprehensive (Loss) IncomeBalance, February 1, 2020 $ (457) $ (215) $ (1) $ (673) Additions to other comprehensive loss: Foreign currency translation adjustments, net of taxes 14 — — 14 Recognition of net gains/losses on benefit obligations, net of taxes — 31 — 31 Reclassifications from other comprehensive loss to net income: Amortization of loss on cash flow hedge, net of taxes — — 1 1 Amortization of prior service cost and deferred gains/losses, net of taxes — 20 — 20 Balance, January 30, 2021 $ (443) $ (164) $ — $ (607) Additions to other comprehensive loss: Foreign currency translation adjustments, net of taxes (45) — — (45) Recognition of net gains/losses on benefit obligations, net of taxes — (48) — (48) Reclassifications from other comprehensive loss to net income: Amortization of loss on cash flow hedge, net of taxes — — 0 0 Amortization of prior service cost and deferred gains/losses, net of taxes — 13 — 13 Balance, January 29, 2022 $ (488) $ (199) $ — $ (687) Additions to other comprehensive loss: Foreign currency translation adjustments, net of taxes (56) — — (56) Recognition of net gains/losses on benefit obligations, net of taxes — 121 — 121 Reclassifications from other comprehensive loss to net income: Amortization of prior service cost and deferred gains/losses, net of taxes — 16 — 16 Balance, January 28, 2023 $ (544) $ (62) $ — $ (606) E.D. Capital Stock and Earnings Per ShareStock:Stock22.335 million shares of its common stock at a cost of $1.7approximately $2.3 billion during fiscal 2017,2023, on a “trade datedate” basis.” TJX reflects stock repurchases in its consolidated financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $1.7$2.3 billion in fiscal 2017, $1.82023, $2.2 billion in fiscal 20162022 and $1.7$0.2 billion in fiscal 2015,2021 and repurchased 22.335 million shares in fiscal 2017, 26.62023, 31 million shares in fiscal 20162022 and 27.63 million shares in fiscal 2015.2021. These expenditures were funded primarily by cash on hand and cash generated from operations. As of January 28, 2017 TJX had $1.8 billion available underexisting $2.0 billion stock repurchase programCompany announced by TJX in February 2016. In addition, in February 2017, TJX announced thethat its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $1.0$2 billion of TJX common stock from time to time.: Fiscal Year Ended Amounts in millions except per share amounts January 28,
2023January 29,
2022January 30,
2021Basic earnings per share: Net income $ 3,498 $ 3,283 $ 90 Weighted average common shares outstanding for basic earnings per share calculation 1,166 1,200 1,200 Basic earnings per share $ 3.00 $ 2.74 $ 0.08 Diluted earnings per share: Net income $ 3,498 $ 3,283 $ 90 Weighted average common shares outstanding for basic earnings per share calculation 1,166 1,200 1,200 Assumed exercise/vesting of stock options and awards 12 16 15 Weighted average common shares outstanding for diluted earnings per share calculation 1,178 1,216 1,215 Diluted earnings per share $ 2.97 $ 2.70 $ 0.07 $ 1.18 $ 1.04 $ 0.26 for net income: Fiscal Year Ended Amounts in thousands except per share amounts $ 2,298,234 $ 2,277,658 $ 2,215,128 655,647 673,484 692,691 $ 3.51 $ 3.38 $ 3.20 $ 2,298,234 $ 2,277,658 $ 2,215,128 655,647 673,484 692,691 8,785 9,767 10,854 664,432 683,251 703,545 $ 3.46 $ 3.33 $ 3.15 8.16 million, 4.15 million, and 8.86 million such options excluded at the end of fiscal 2017,2023, fiscal 20162022 and fiscal 2015,2021, respectively.F.E. Financial Instrumentsas 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 positionConsolidated Balance Sheet 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 Accumulated other comprehensive income(loss) 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, (andand the resulting per mile surcharges payable by TJX)TJX, by setting a fixed price per gallon for the period being hedged. During fiscal 2016 and fiscal 2017,2023, TJX entered into agreements to hedge a portion of its estimated notional diesel fuel requirements for fiscal 2017. Similarly, during fiscal 2017, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the fiscal year ending February 3, 2018 (fiscal 2018).2024. The hedge agreements outstanding at January 28, 20172023 relate to approximately 50% of TJX’s estimated notional dieselF-162018.2024. These diesel fuel hedge agreements will settle throughout fiscal 2018.2024 and the first month of fiscal 2025. TJX elected not to apply hedge accounting rules to these contracts.Contracts: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. These contracts typically have a term of twelve months or less. The contracts outstanding at January 28, 20172023 cover a portion of such actual and anticipated merchandise purchases throughoutthe Company is committed to over the next several months in fiscal 2018.2024. 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 merchandiseU.K. 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 central buying entity for changes in the exchange rate between the Euro and British Pound. The inflowA portion of the inflows 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 thisany excess Euro exposure each month and enters ainto forward contracts of approximately 30 day hedgedays’ duration to mitigate thethis exposure. TJX elected not to apply hedge accounting rules to these contracts.debt and intercompany interest payable.debt. The changes in fair value of these contracts are recorded in selling,Selling, general and administrative expenses and are offset by marking the underlying item to fair value in the same period. Upon settlement, the realized gains and losses on these contracts are offset by the realized gains and losses of the underlying item in selling,Selling, general and administrative expenses.2017:In thousands Pay Receive Balance Sheet
Location Current
Asset
U.S.$ Current
(Liability)
U.S.$ Net Fair
Value in
U.S.$ at
January 28,
2017 zł 67,000 £ 13,000 0.1940 (Accrued Exp) $ — $ (6 ) $ (6 ) € 63,000 £ 54,452 0.8643 Prepaid Exp 263 — 263 U.S.$ 68,445 £ 55,000 0.8036 Prepaid Exp 1,196 — 1,196 Fixed on 2.1M
— 2.5M gal
per month
Float on 2.1M
per month
N/A Prepaid Exp 2,183 — 2,183 € 68,000 £ 58,306 0.8574 Prepaid Exp 262 — 262 C$ 462,025 U.S.$ 349,750 0.7570 Prepaid Exp /
(Accrued Exp)
1,089 (3,081 ) (1,992 ) C$ 19,571 € 13,650 0.6975 Prepaid Exp /
(Accrued Exp)
22 (290 ) (268 ) £ 180,963 U.S.$ 227,500 1.2572 Prepaid Exp /
(Accrued Exp)
2,327 (2,695) (368 ) zł 249,079 £ 48,593 0.1951 Prepaid Exp /
(Accrued Exp)
681 (927 ) (246 ) U.S.$ 22,226 € 20,686 0.9307 Prepaid Exp /
(Accrued Exp)
178 (257 ) (79 ) $ 8,201 $ (7,256 ) $ 945 In millions Pay Receive Blended
Contract
RateBalance Sheet
LocationCurrent
Asset
U.S.$Current
(Liability)
U.S.$Fair value hedges: Intercompany balances, primarily debt: € 60 £ 53 0.8807 (Accrued Exp) $ — $ (0.3) $ (0.3) A$ 150 U.S.$ 105 0.7003 (Accrued Exp) — (2.6) (2.6) U.S.$ 69 £ 55 0.8010 (Accrued Exp) — (0.3) (0.3) £ 200 U.S.$ 244 1.2191 (Accrued Exp) — (5.5) (5.5) € 200 U.S.$ 213 1.0652 Prepaid Exp / (Accrued Exp) 0.8 (7.0) (6.2) Economic hedges for which hedge accounting was not elected: Diesel fuel contracts N/A Prepaid Exp 3.9 — 3.9 Intercompany billings in TJX International, primarily merchandise related: € 146 £ 129 0.8834 Prepaid Exp 0.8 — 0.8 Merchandise purchase commitments: C$ 705 U.S.$ 525 0.7449 Prepaid Exp / (Accrued Exp) 2.2 (7.1) (4.9) C$ 23 € 16 0.7064 Prepaid Exp / (Accrued Exp) 0.4 0.0 0.4 £ 299 U.S.$ 356 1.1916 Prepaid Exp / (Accrued Exp) 0.1 (15.4) (15.3) zł 507 £ 91 0.1788 (Accrued Exp) — (3.6) (3.6) A$ 104 U.S.$ 71 0.6819 (Accrued Exp) — (3.3) (3.3) U.S.$ 85 € 82 0.9634 Prepaid Exp 4.3 — 4.3 Total fair value of derivative financial instruments $ 12.5 $ (45.1) $ (32.6) 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
month
Float on 900K
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 In millions Pay Receive Blended
Contract
RateBalance Sheet
LocationCurrent
Asset
U.S.$Current
(Liability)
U.S.$Fair value hedges: Intercompany balances, primarily debt: zł 25 £ 5 0.1816 Prepaid Exp $ 0.1 $ — $ 0.1 € 60 £ 51 0.8428 Prepaid Exp 0.1 — 0.1 A$ 170 U.S.$ 122 0.7180 Prepaid Exp 2.0 — 2.0 U.S.$ 75 £ 55 0.7368 (Accrued Exp) — (1.0) (1.0) € 200 U.S.$ 230 1.1516 Prepaid Exp 4.5 — 4.5 Economic hedges for which hedge accounting was not elected: Diesel fuel contracts N/A Prepaid Exp 23.7 — 23.7 Intercompany billings in TJX International, primarily merchandise related: € 91 £ 76 0.8340 (Accrued Exp) — (0.1) (0.1) Merchandise purchase commitments: C$ 988 U.S.$ 783 0.7927 Prepaid Exp / (Accrued Exp) 6.7 (0.1) 6.6 C$ 38 € 27 0.6948 (Accrued Exp) — (0.2) (0.2) £ 325 U.S.$ 442 1.3583 Prepaid Exp / (Accrued Exp) 6.0 (0.6) 5.4 zł 453 £ 82 0.1813 Prepaid Exp / (Accrued Exp) 0.7 (0.4) 0.3 A$ 66 U.S.$ 48 0.7246 Prepaid Exp 1.3 — 1.3 U.S.$ 67 € 59 0.8807 (Accrued Exp) — (0.9) (0.9) Total fair value of derivative financial instruments $ 45.1 $ (3.3) $ 41.8 statementsConsolidated Statements of income during fiscal 2017, fiscal 2016 and fiscal 2015 are as follows: Amount of Gain (Loss) Recognized in
Income by Derivative In thousands Location of Gain (Loss) Recognized in
Income by Derivative January 28,
2017 January 30,
2016 January 31,
2015 Selling, general
and administrative
expenses $ (17,250 ) $ (3,927 ) $ 7,413 Cost of sales, including buying and occupancy costs 3,906 (21,797 ) (16,050 ) Cost of sales, including buying and occupancy costs (8,684 ) (5,768 ) — Cost of sales, including buying and occupancy costs 5,626 49,107 41,554 $ (16,402 ) $ 17,615 $ 32,917 Location of Gain (Loss) Recognized in Income by Derivative Amount of Gain (Loss) Recognized in
Income by DerivativeIn millions January 28,
2023January 29,
2022January 30,
2021Fair value hedges: Intercompany balances, primarily debt Selling, general and administrative expenses $ 12 $ 36 $ (60) Economic hedges for which hedge accounting was not elected: Diesel fuel contracts Cost of sales, including buying and occupancy costs 55 43 (6) Intercompany billings in TJX International, primarily merchandise related Cost of sales, including buying and occupancy costs (9) 5 (4) Merchandise purchase commitments Cost of sales, including buying and occupancy costs 71 24 (4) Gain (loss) recognized in income $ 129 $ 108 $ (74) lossesgains of $6.1$200 million in fiscal 2017,2023 and gains of $28.5$54 million in fiscal 20162022 and $24.3realized losses of $74 million in fiscal 2015,2021, all of which were largely offset by gains and losses on the underlying hedged item.G. Disclosures aboutF. Fair Value of Financial Instrumentsprice.”price”. The inputs used to measure fair value are generally classified into the following hierarchy:Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability Level 3: Unobservable inputs for the asset or liability Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 January 31,
2015 $ 195,733 $ 155,847 $ 151,936 $ 543,242 $ 352,313 $ 282,623 6,018 28,643 39,419 2,183 — — $ 7,256 $ 3,455 $ 1,942 — 13,952 15,324 Fiscal Year Ended In millions January 28,
2023January 29,
2022Level 1 Assets: Executive Savings Plan investments $ 371.6 $ 387.7 Level 2 Assets: Foreign currency exchange contracts $ 8.6 $ 21.4 Diesel fuel contracts 3.9 23.7 Liabilities: Foreign currency exchange contracts $ 45.1 $ 3.3 Short-term investments, foreign TJX’s investments are primarily high-grade commercial paper, institutional money market funds and time deposits with major banks. TJX does not make adjustments to quotes or prices obtained from brokers or pricing services but does assess the credit risk of counterparties and will adjust final valuations when appropriate. Where independent pricing services provide fair values, TJX obtains an understanding of the methods used in pricing. As such, these instruments are classified within Level 2.2.2 inputs. The fair value of long-term debt at January 28, 20172023 was $2.17$2.6 billion compared to a carrying value of $2.23$2.9 billion primarily due to the increase in interest rates. The fair value and the carrying value of the current portion of long-term debt as of January 28, 2023 were both $0.5 billion. The fair value of long-term debt at January 30, 201629, 2022 was $1.70$3.5 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$3.4 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.H.A—Basis of Presentation and Summary of Accounting Policies for additional information.tjmaxx.com)marshalls.com) and the HomeGoods segment (HomeGoods, Homesense and homegoods.com) both operate in the United States, the TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and the TJX International segment operates T.K. Maxx, HomeSenseHomesense and tkmaxx.com in Europe and Trade SecretT.K. Maxx in Australia. TJX alsoIn addition to the Company’s four main business segments, Sierra operates Sierra Trading Post, an off-price Internet retailer that operates a small number ofretail stores and sierra.com in the U.S. The results of STPSierra are included in the Marmaxx segment.F-19HomeSense,HomeSense/Homesense, sell family apparel and home fashions. HomeGoods and HomeSenseHomeSense/Homesense offer home fashions.ourthe Company’s consolidated revenues by major product category for the last three fiscal years are as follows: Fiscal
2017 Fiscal
2016 Fiscal
2015 54 % 55 % 57 % 15 15 14 31 30 29 100 % 100 % 100 % For fiscal 2017, TJX Canada and TJX International accounted for 23% of TJX’s net sales, 15% of segment profit and 24% of consolidated assets. 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. For fiscal 2015, TJX Canada and TJX International accounted for 24% of TJX’s net sales, 19% of segment profit and 23% of consolidated assets.Fiscal 2023 Fiscal 2022 Fiscal 2021 Apparel: Clothing including footwear 48 % 47 % 46 % Jewelry and accessories 17 15 15 Home fashions 35 38 39 Total 100 % 100 % 100 % loss on early extinguishment of debt, pension settlement charge and interest expense, net.net and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities. These measuresThis measure of performance should not be considered alternativesan alternative to net income or cash flows from operating activities as an indicator of TJX’s performance or as a measure of liquidity. Fiscal Year Ended In thousands $ 21,246,034 $ 19,948,227 $ 18,687,880 4,404,607 3,915,221 3,414,351 3,171,127 2,854,617 2,883,863 4,361,976 4,226,873 4,092,313 $ 33,183,744 $ 30,944,938 $ 29,078,407 $ 2,995,045 $ 2,858,780 $ 2,736,694 613,778 549,318 463,193 413,417 375,306 393,622 235,519 316,939 337,406 4,257,759 4,100,343 3,930,915 408,236 395,643 324,414 51,773 — 16,830 31,173 — — 43,534 46,400 39,787 $ 3,723,043 $ 3,658,300 $ 3,549,884 Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Net sales: In the United States: Marmaxx $ 30,545 $ 29,483 $ 19,363 HomeGoods 8,264 8,995 6,096 TJX Canada 4,912 4,343 2,836 TJX International 6,215 5,729 3,842 Total net sales $ 49,936 $ 48,550 $ 32,137 Segment profit (loss): In the United States: Marmaxx $ 3,883 $ 3,813 $ 891 HomeGoods 522 907 510 TJX Canada 690 485 124 TJX International 347 161 (504) Total segment profit $ 5,442 $ 5,366 $ 1,021 General corporate expense 582 611 439 Impairment on equity investment 218 — — Loss on early extinguishment of debt — 242 312 Interest expense, net 6 115 181 Income before income taxes $ 4,636 $ 4,398 $ 89 Fiscal Year Ended In thousands $ 5,440,448 $ 5,526,570 $ 5,014,573 1,086,947 915,549 777,214 1,345,003 1,021,584 1,020,955 1,789,140 1,645,296 1,531,661 3,222,270 2,381,432 2,633,590 $ 12,883,808 $ 11,490,431 $ 10,977,993 $ 449,169 $ 442,910 $ 445,041 173,979 130,593 148,354 100,437 71,071 100,779 301,162 244,806 217,348 $ 1,024,747 $ 889,380 $ 911,522 $ 385,007 $ 364,892 $ 340,830 77,287 67,204 54,867 62,427 54,573 66,141 129,376 126,020 123,547 4,699 4,007 3,590 $ 658,796 $ 616,696 $ 588,975 (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. 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. Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Identifiable assets: In the United States: Marmaxx $ 12,170 $ 11,229 $ 10,221 HomeGoods 3,590 3,461 2,851 TJX Canada 2,003 2,197 2,035 TJX International 4,075 4,281 4,389 6,511 7,293 11,318 Total identifiable assets $ 28,349 $ 28,461 $ 30,814 Capital expenditures: In the United States: Marmaxx $ 822 $ 513 $ 216 HomeGoods 295 244 162 TJX Canada 110 69 44 TJX International 230 219 146 Total capital expenditures $ 1,457 $ 1,045 $ 568 Depreciation and amortization: In the United States: Marmaxx $ 480 $ 465 $ 479 HomeGoods 165 149 135 TJX Canada 70 73 71 TJX International 167 174 176 5 7 10 Total depreciation and amortization $ 887 $ 868 $ 871 I.H. Stock Incentive PlanThisThe number of shares authorized for issuance under this plan has been approved by TJX’s shareholders, and all share-based compensation awards are made under this plan. The Stock Incentive Plan, as amended with shareholder approval, has provided for the issuance of up to 347.8723 million shares with 31.549 million shares available for future grants as of January 28, 2017.2023. TJX issues shares under the plan from authorized but unissued common stock.$102.3$122 million, $94.1$189 million and $88.0$59 million in fiscal 2017, 20162023, 2022 and 2015,2021, respectively. As of January 28, 2017,2023, there was $128.7$178 million of total unrecognized compensation cost related to nonvestednon-vested 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, the vesting information is reflected in the valuation. Fiscal Year Ended January 28,
2017 January 30,
2016 January 31,
2015 1.20 % 1.50 % 1.79 % 1.2 % 1.2 % 1.2 % 23.8 % 24.4 % 24.2 % 4.8 4.5 4.5 $ 14.55 $ 14.48 $ 12.00 Fiscal Year Ended January 28,
2023January 29,
2022January 30,
2021Risk-free interest rate 3.69 % 0.84 % 0.28 % Dividend yield 1.8 % 1.5 % 1.4 % Expected volatility factor 26.0 % 23.8 % 26.5 % Expected option life 5.5 years 5.0 years 5.0 years Weighted average fair value of options issued $ 16.68 $ 12.85 $ 11.29 We useThe Company uses historical data to estimate option exercises, employee termination behavior and dividend yield within the valuation model. Expected volatility is based on a combination of implied volatility from traded options on ourthe Company’s stock, and historical volatility during a term approximating the expected life of the option granted. The expected option life represents an estimate of the period of time options are expected to remain outstanding based upon historical exercise trends. Employee groups and option characteristics are considered separately for valuation purposes when applicable.Stock Options:(WAEP)(“WAEP”) is presented below (shares in thousands): Fiscal Year Ended January 28, 2017 January 30, 2016 January 31, 2015 Options WAEP Options WAEP Options WAEP 28,686 $ 41.68 30,078 $ 34.91 32,628 $ 28.30 4,305 75.04 4,169 72.54 4,849 59.70 (5,265 ) 30.83 (5,124 ) 25.87 (6,981 ) 20.39 (373 ) 66.15 (437 ) 55.06 (418 ) 48.76 27,353 $ 48.69 28,686 $ 41.68 30,078 $ 34.91 18,980 $ 38.69 20,175 $ 31.75 21,001 $ 25.75 Fiscal Year Ended Shares in millions January 28,
2023January 29,
2022January 30,
2021 Options WAEP Options WAEP Options WAEP Outstanding at beginning of year 40 $ 47.11 43 $ 41.79 45 $ 36.81 Granted 6 65.54 5 70.48 6 57.32 Exercised (8) 38.12 (7) 32.04 (8) 25.68 Forfeitures (1) 63.29 (1) 57.55 0 52.96 Outstanding at end of year 37 $ 51.88 40 $ 47.11 43 $ 41.79 Options exercisable at end of year 26 $ 45.99 29 $ 40.93 31 $ 36.05 $239.7 million$0.3 billion in each of fiscal 2017, $227.4 million in2023, fiscal 20162022 and $286.3 million in fiscal 2015.2017:Shares in thousands Shares Aggregate
Intrinsic
Value Weighted
Average
Remaining
Contract Life WAEP 7,747 $ 24,974 8.9 years $ 71.42 18,980 $ 675,109 5.0 years $ 38.69 26,727 $ 700,083 6.2 years $ 48.18 Options outstanding expected to vest represents total2023:Weighted
Average
Remaining
Contract LifeWAEP 10 $ 170 9.0 years $ 65.58 Options exercisable 26 939 4.9 years 45.99 Total outstanding options vested and expected to vest 36 $ 1,109 6.1 years $ 51.58 8.3 million adjusted for anticipated forfeitures.Performance-Based Awards:Awardshas granted performance-based restricted stock, performance-basedgrants 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. Restricted stock units and performance share units are collectively referred to as stock awards. These stock awards arewere granted without a purchase price to the recipient and are subject to vesting conditions. Vesting conditions includingfor performance share units 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, assumes that performance goals will be achieved. If such goals are not met, or only partially met, awardsachieved at target. Performance share units and related compensation costs recognized are reducedadjusted, as applicable, for performance above or below the target specified in the award.pro rata basis.F-22our nonvested performance-basedthe Company’s non-vested stock awards and changes during fiscal 20172023 is presented below:Shares in thousands Performance-
based stock
awards Weighted
Average
Grant Date
Fair Value 1,776 $ 63.57 514 78.50 (706 ) 54.47 (25 ) 69.31 1,559 $ 72.52 In thousands except grant date fair value Restricted Stock Units Performance Share Units Total Stock Awards Weighted
Average
Grant Date
Fair ValueNonvested at beginning of year 1,836 932 2,768 $ 58.91 Granted 461 471 932 60.46 Vested (368) (627) (995) 55.27 Forfeited (62) (15) (77) 27.29 Nonvested at end of year 1,867 761 2,628 $ 61.76 513,573 shares of performance-based stock awards,932 thousand units with a weighted average grant date fair value of $78.50,$60.46, granted in fiscal 2017, 696,057 shares of performance-based stock awards,2023, 820 thousand units, with a weighted average grant date fair value of $70.41,$65.53, granted in fiscal 2016,2022 and 717,500 shares of performance-based stock awards,857 thousand units, with a weighted average grant date fair value of $62.85,$56.24, granted in fiscal 2015.2021. The fair value of performance-based stock awards that vested was $38.5$55 million in fiscal 2017, $27.12023, $44 million in fiscal 2016,2022 and $21.4$57 million in fiscal 2015.Awards:AwardsThe outside directors are awarded two annual deferred share awards, each representing shares of TJX common stock, which were valued at $80,000 for fiscal 2017. 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 a directors continued service until the annual meeting that follows the grant of the award (subject to possible earlier vesting in connection with or following a change of control) and is payable, with accumulated dividends, in stock upon vesting, 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 2017,2023, a total of 313,367433 thousand of these deferred shares were outstanding under the plan.J.I. Pension Plans and Other Retirement Benefits: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. The Company has elected the practical expedient pursuant to ASU 2015-042015-4–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 January 28,
2017 January 30,
2016 January 28,
2017 January 30,
2016 $ 1,213,000 $ 1,309,889 $ 84,967 $ 82,238 45,440 50,080 1,835 1,562 56,094 51,710 3,391 3,033 91,114 (170,674 ) 740 3,806 (103,197 ) — — — (28,751 ) (24,956 ) (4,624 ) (5,672 ) (4,690 ) (3,049 ) — — — — — — $ 1,269,010 $ 1,213,000 $ 86,309 $ 84,967 $ 1,151,151 $ 1,120,602 $ 71,273 $ 70,750 Funded Plan
Fiscal Year EndedUnfunded Plan
Fiscal Year EndedIn millions January 28,
2023January 29,
2022January 28,
2023January 29,
2022Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 1,717 $ 1,619 $ 114 $ 113 Service cost 48 49 2 2 Interest cost 58 52 4 3 Actuarial (gains) losses (442) 29 (9) 0 Benefits paid (35) (29) (2) (4) Expenses paid (3) (3) — — Projected benefit obligation at end of year $ 1,343 $ 1,717 $ 109 $ 114 Accumulated benefit obligation at end of year $ 1,241 $ 1,560 $ 93 $ 100 In thousands January 28,
2017 January 30,
2016 January 28,
2017 January 30,
2016 $ 1,119,842 $ 1,170,748 $ — $ — 143,756 (72,901 ) — — 50,000 50,000 4,624 5,672 (103,197 ) — — — (28,751 ) (24,956 ) (4,624 ) (5,672 ) (4,690 ) (3,049 ) — — $ 1,176,960 $ 1,119,842 $ — $ — $ 1,269,010 $ 1,213,000 $ 86,309 $ 84,967 1,176,960 1,119,842 — — $ 92,050 $ 93,158 $ 86,309 $ 84,967 $ 92,050 $ 93,158 $ 86,309 $ 84,967 $ 2,313 $ 2,690 $ — $ — 303,612 348,289 26,438 29,046 $ 305,925 $ 350,979 $ 26,438 $ 29,046 Funded Plan
Fiscal Year EndedUnfunded Plan
Fiscal Year EndedIn millions January 28,
2023January 29,
2022January 28,
2023January 29,
2022Change in plan assets: Fair value of plan assets at beginning of year $ 1,713 $ 1,686 $ — $ — Actual return on plan assets (200) 59 — — Employer contribution 0 0 2 4 Benefits paid (35) (29) (2) (4) Expenses paid (3) (3) — — Fair value of plan assets at end of year $ 1,475 $ 1,713 $ — $ — Reconciliation of funded status: Projected benefit obligation at end of year $ 1,343 $ 1,717 $ 109 $ 114 Fair value of plan assets at end of year 1,475 1,713 — — Funded status – excess (asset) obligation $ (132) $ 4 $ 109 $ 114 Net (asset) liability recognized on Consolidated Balance Sheets $ (132) $ 4 $ 109 $ 114 Amounts not yet reflected in net periodic benefit cost and included in Accumulated other comprehensive income (loss): Prior service cost $ 0 $ 0 $ — $ — Accumulated actuarial losses 126 297 19 32 Amounts included in Accumulated other comprehensive income (loss) $ 126 $ 297 $ 19 $ 32 consolidated balance sheetsConsolidated Balance Sheets reflect the funded status of the plans with any unrecognized prior service cost and actuarial gains and losses recorded in accumulatedAccumulated other comprehensive income (loss). The funded plan asset of $132 million is reflected on the Consolidated Balance Sheets in other current assets as of January 28, 2023. The unfunded plan liability is reflected on the Consolidated Balance Sheets as of January 28, 2023 as current liabilities of $4 million and a long-term liability of $105 million. The combined net accrued liability of $178.4$118 million at January 28, 201729, 2022 is reflected on the balance sheetConsolidated Balance Sheets as of that date as a current liability of $4.0$4 million and a long-term liability of $174.4$114 million.combined net accrued liability of $178.1 million at January 30, 2016 is reflected ondecrease in the balance sheet as of that date as a current liability of $3.2 million and a long-term liability of $174.9 million.The estimated prior service cost that will be amortized from accumulatedactuarial losses included in Accumulated other comprehensive income (loss) into net periodic benefit cost in fiscal 2018 for the funded plan is $377,000. The estimated net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit costfor fiscal 2023 was driven by the impact of higher discount rates offset by a decrease in fiscal 2018 is $21.9 million for the fundedactual return on plan and $3.3 million for the unfunded plan.20172023 and fiscal 2016.2022. 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 28,
2017 January 30,
2016 January 28,
2017 January 30,
2016 4.40 % 4.80 % 4.00 % 4.20 % 4.00 % 4.00 % 6.00 % 6.00 % Funded Plan
Fiscal Year EndedUnfunded Plan
Fiscal Year Ended January 28,
2023January 29,
2022January 28,
2023January 29,
2022Discount rate 5.40 % 3.40 % 5.60 % 3.30 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 4.00 % $54.6$3 million in fiscal 2017, $55.72023 and $5 million in fiscal 2016 and $151.3 million in fiscal 20152022 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 doThe Company does not anticipate any required funding in fiscal 20182024 for the funded plan. We anticipateThe Company anticipates making contributions of $4.1$4 million to provide current benefits coming due under the unfunded plan in fiscal 2018.our pension plans: Dollars in thousands January 28,
2017 January 30,
2016 January 31,
2015 January 28,
2017 January 30,
2016 January 31,
2015 $ 45,440 $ 50,080 $ 40,481 $ 1,835 $ 1,562 $ 1,398 56,094 51,710 49,522 3,391 3,033 3,001 (70,535 ) (78,042 ) (65,187 ) — — — 377 377 — — — 2 31,397 33,146 13,848 3,349 3,958 2,146 31,173 — — — — — $ 93,946 $ 57,271 $ 38,664 $ 8,575 $ 8,553 $ 6,547 $ 17,894 $ (19,731 ) $ 209,091 $ 740 $ 3,806 $ 19,552 (31,397 ) (33,146 ) (13,848 ) (3,349 ) (3,958 ) (2,146 ) (31,173 ) — — — — — (377 ) (377 ) — — — (2 ) — — 3,067 — — — $ (45,053 ) $ (53,254 ) $ 198,310 $ (2,609 ) $ (152 ) $ 17,404 $ 48,893 $ 4,017 $ 236,974 $ 5,966 $ 8,401 $ 23,951 4.80%/3.80% 4.00% 5.00% 4.20% 3.70% 4.80% 6.50%/6.00% 6.75% 7.00% N/A N/A N/A 4.00% 4.00% 4.00% 6.00% 6.00% 6.00% During the third quarter of fiscal 2017, TJX offered eligible former TJX Associates, who had not yet commenced receiving their pension benefit, an opportunity to receive a lump sum payout of their vested pension benefit. On October 21, 2016 the Company’s pension plan paid $103.2 million from pension plan assets to those who accepted this offer, thereby reducing its pension benefit obligations. The transaction had no cash impact on TJX but did result in a non-cash pre-tax pension settlement charge of $31.2 million, which is reported separately on the consolidated statements of income. As a result of the lump sum payout the Company re-measured the funded status of its pension plan as of September 30, 2016. The assumptions for pension expense presented above includes a discount rate of 4.80% through the measurement date and 3.80% thereafter. The expected rate of return on plan assets is 6.50% through the measurement date and 6.00% thereafter.The rate of compensation increase presented for the unfunded plan (for measurement purposes and expense purposes) is the rate assumed for participants eligible for the primary benefit. The assumed rate of compensation increase for participants eligible for the alternative benefit under the unfunded plan is the same rate as assumed for the funded plan. Funded Plan
Fiscal Year EndedUnfunded Plan
Fiscal Year EndedIn millions January 28,
2023January 29,
2022January 30,
2021January 28,
2023January 29,
2022January 30,
2021Net periodic pension cost: Service cost $ 48 $ 49 $ 50 $ 2 $ 2 $ 2 Interest cost 58 52 50 4 3 3 Expected return on plan assets (89) (95) (88) — — — Amortization of prior service cost 0 0 0 — — — Amortization of net actuarial loss 18 14 23 4 4 4 Total expense $ 35 $ 20 $ 35 $ 10 $ 9 $ 9 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net (gain) loss $ (153) $ 66 $ (49) $ (9) $ 0 $ 8 Amortization of net (loss) (18) (14) (23) (4) (4) (4) Amortization of prior service cost 0 0 0 — — — Total (gain) loss recognized in other comprehensive income $ (171) $ 52 $ (72) $ (13) $ (4) $ 4 Total recognized in net periodic benefit cost and other comprehensive income (loss) $ (136) $ 72 $ (37) $ (3) $ 5 $ 13 Weighted average assumptions for expense purposes: Discount rate 3.40 % 3.20 % 3.30 % 3.30 % 2.80 % 3.10 % Expected rate of return on plan assets 5.25 % 5.75 % 5.75 % N/A N/A N/A Rate of compensation increase 4.00 % 4.00 % 4.00 % 4.00 % 4.00 % 4.00 % F-25In thousands $ 36,344 $ 4,063 39,888 4,534 43,673 39,428 47,775 4,425 52,167 4,380 329,327 26,285 In millions Funded Plan
Expected Benefit PaymentsUnfunded Plan
Expected Benefit PaymentsFiscal Year: 2024 $ 47 $ 4 2025 53 8 2026 59 50 2027 65 8 2028 71 9 2029 through 2033 440 43 table presentstables present the fair value hierarchy (See Note G)F—Fair Value Measurements) for pension assets measured at fair value on a recurring basis as of January 28, 2017: Funded Plan In thousands Level 1 Level 2 Total $ 63,704 $ — $ 63,704 208,451 — 208,451 — 386,777 386,777 — (31 ) (31 ) $ 272,155 $ 386,746 $ 658,901 — — 518,059 $ 272,155 $ 386,746 $ 1,176,960 *basis: Funded Plan at January 28, 2023 In millions Level 1 Level 2 Total Asset category: Short-term investments $ 9 $ — $ 9 Equity Securities 163 — 163 Fixed Income Securities: Corporate and government bond funds — 882 882 Futures Contracts — (4) (4) Total assets in the fair value hierarchy $ 172 $ 878 $ 1,050 — — 425 Fair value of assets $ 172 $ 878 $ 1,475 Funded Plan at January 29, 2022 In millions Level 1 Level 2 Total Asset category: Short-term investments $ 8 $ — $ 8 Equity Securities 178 — 178 Fixed Income Securities: Corporate and government bond funds — 1,022 1,022 Futures Contracts — 3 3 Total assets in the fair value hierarchy $ 186 $ 1,025 $ 1,211 — — 502 Fair value of assets $ 186 $ 1,025 $ 1,713 the fair value hierarchy to the fair value of assets presented above.The following table presents the fair value hierarchy for pension assets measured atto the 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 *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-26The followinga summary of TJX’s targetthe asset allocation guidelines forunder the qualified pension plan assets along with the actual allocation of plan assets as of the valuation date for the fiscal years presented: Target Allocation January 28,
2017 January 30,
2016 50% 44% 40% 50% 51% 55% — 5% 5% January 28,
2023January 29,
2022Return-seeking assets 46% 45% Liability-hedging assets 54% 55% All other – primarily cash —% —% Effective January 1, 2017, theThe investment policy includes a dynamic asset allocation strategy, whereby, over 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 a similar risk profile) may decline and the target allocation of liability-hedging assets (generally, fixed income and other instruments with a similar risk profile) may increase. Under the investment policy guidelines, the target asset allocation of return-seeking assets and liability-hedging assets was 44% and 56%, respectively, as of January 28, 2023. 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.all eligible U.S. employees and a similar type of plan for eligible employees in Puerto Rico. Assets under the plans totaled $1,480.9 million as of December 31, 2016 and $1,314.8 million as of December 31, 2015, and are invested in a variety of funds. Employees may contribute up to 50% of eligible pay, subject to limitations. For eligible employees who have completed the applicable service requirement, 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. EligibleTJX may also make additional discretionary contributions. Certain eligible employees are automatically enrolled in the U.S. Plan and the Puerto Rico savings plan at a 2% deferral rate, unless the employee elects otherwise. The total cost of TJX contributed $34.5contributions to these plans was $77 million in fiscal 2017, $30.82023, $83 million in fiscal 20162022 and $31.2$61 million in fiscal 2015 to these employee savings plans. The plans include 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 and is scheduled to be eliminated from the plans in March 2018. The TJX stock fund represented 6.2% of plan assets at December 31, 2016, 7.1% of plan assets at December 31, 2015 and 7.4% of plan assets at December 31, 2014.$5.8$6 million in fiscal 2017, $4.52023, $7 million in fiscal 20162022 and $3.5$3 million in fiscal 2015.2021. 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-27maintainscontributes to retirement/deferred savings plansprograms for eligible associatesAssociates at certain of its foreign subsidiaries. WeThe Company contributed $10.2$29 million for these plansprograms in fiscal 2017, $9.72023, $26 million for these plansprograms in fiscal 20162022 and $9.3$22 million in fiscal 2015.Plans:Plans$14.5$25 million in both fiscal 2023 and fiscal 2022, and $19 million in fiscal 2017, $13.4 million in fiscal 2016 and $11.5 million in fiscal 20152021 to the Legacy Plan of the National Retirement Fund (formerly, the National Retirement Fund) (EIN #13-6130178, plan #001) and#1), the Adjustable Plan of the National Retirement Fund (EIN #13-6130178, plan #002)#2), 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). TJX was listed in each plan’sthe Form 5500 for the Legacy Plan of the National Retirement Fund, the Adjustable Plan of the National Retirement Fund, and the Legacy Plan of the UNITE HERE Retirement Fund as providing more than 5% of the total contributions for the plan year ending December 31, 2015. Based2021. In addition, based on information available to TJX, the Pension Protection Act Zone Status ofstatus for the Legacy Plan of the National Retirement Fund is Criticalcritical and afor the Legacy Plan of the UNITE HERE Retirement Fund is critical and declining, and rehabilitation plan hasplans have been implemented.we ceaseTJX ceases to have an obligation to contribute to a multiemployer plan in which wethe Company had been a contributing employer, or in certain other circumstances, wethe Company may be required to pay to the plan an amount based on ourthe Company’s allocable share of the underfunded status of the plan, referred to as a withdrawal liability.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.During the first quarter of fiscal 2017, TJX terminated the unfunded postretirement medical plan and made a discretionary lump sum payment to participants. The settlement of the liability and the recognition of the remaining negative plan amendment resulted in a pre-tax benefit of $5.5 million in the first quarter of fiscal 2017.K.J. Long-Term Debt and Credit Linesexclusive of current installments, as of January 28, 20172023 and January 30, 2016.29, 2022. All amounts are net of unamortized debt discounts.In thousands January 28,
2017 January 30,
2016 $ — $ 374,777 499,722 499,677 749,675 749,600 992,851 — (14,649 ) (9,051 ) $ 2,227,599 $ 1,615,003 F-28In millions and net of immaterial unamortized debt discount January 28,
2023January 29,
2022General corporate debt: 2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount) $ 500 $ 500 2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount) 997 997 1.150% senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18% after reduction of unamortized debt discount) 499 499 3.875% senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89% after reduction of unamortized debt discount) 496 495 1.600% senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61% after reduction of unamortized debt discount) 500 500 4.500% senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52% after reduction of unamortized debt discount) 383 383 Total debt 3,375 3,374 Current maturities of long-term debt, net of debt issuance costs (500) — Debt issuance costs (16) (19) Long-term debt $ 2,859 $ 3,355 exclusiveinclusive of current installments at January 28, 20172023 are as follows:In thousands Long-Term
Debt $ — — — 750,000 1,500,000 (7,752 ) (14,649 ) $ 2,227,599 On September 12, 2016,In millions Fiscal Year: 2024 $ 500 2025 — 2026 — 2027 1,000 2028 — Later years 1,881 Unamortized debt discount (6) Debt issuance costs (16) Less: current maturities of long-term debt (500) Aggregate maturities of long-term debt $ 2,859 issued $1.0had outstanding $1 billion aggregate principal amount of 2.25%2.250% ten-year notesNotes due September 2026 alland $500 million aggregate principal amount of which were outstanding at January 28, 2017.2.500% ten-year Notes due May 2023. TJX entered into a rate-lock agreement to hedge $700 million of the 2.25% notes.2.250% notes and $250 million of the 2.500% notes prior to their issuance. The cost of these agreements areis being amortized to interest expense over the term of the notes resulting in an effective fixed rate of 2.36%. On October 12, 2016, TJX used a portion of the proceeds from for the 2.25% ten-year notes to redeem all outstanding 6.95% ten-year notes and recorded a pre-tax loss on the early extinguishment of debt of $51.8 million, which includes $50.6 million of redemption premium and $1.2 million to write off unamortized debt expenses and discount.At January 28, 2017, TJX also had outstanding $500 million aggregate principal amount of 2.50% ten-year notes due May 2023 and $750 million aggregate principal amount of 2.75% seven-year notes due June 2021. TJX entered into rate-lock agreements to hedge the underlying treasury rate of $250 million of the 2.50% notes. The costs of these agreements are being amortized to interest expense over the term of the respective notes, resulting in an effective fixed interest rate of 2.57% for the 2.50% notes.also entered into rate-lock agreements to hedge the underlying treasury rate of all of the 2.75% notes prior to their issuance. The agreements were accounted for as cash flow hedges and the pre-tax realized loss of $7.9 million was recorded as a component of other comprehensive income and is being amortized to interest expense over the term of the notes, resulting in an effective fixed interest rate of 2.91%.At January 28, 2017, TJX hadhas two $500 million revolving credit facilities, one which matures in March 2020 and one which matures in March 2021. At January 30, 2016, TJX had two $500 milliona $1 billion senior unsecured revolving credit facilities, one which was scheduled to mature in May 2016 and one which was scheduled to maturefacility maturing in June 2017. In March 2016, the2026 (the “2026 Revolving Credit Facility”) and a $500 million revolving credit facility scheduled to maturethat matures in May 2016 was replaced with2024 (the “2024 Revolving Credit Facility”). Under these credit facilities, the Company has maintained 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.borrowing capacity of $1.5 billion. The terms and covenants under the newof these revolving credit facilities are similar to those in the terminated facilities and require quarterly payments of 6.0 basis points per annum on the committed amounts for both agreements. Thisamount and payment of interest on borrowings at rates based on LIBOR or a base rate isplus a variable margin, in each case based on the credit ratings of TJX’sCompany’s long-term debt ratings. The 2024 Revolving Credit Facility requires usage fees based on total credit extensions under the facility. As of January 28, 2023 and will vary with specified changes in the credit ratings. These agreements hadJanuary 29, 2022, there were no compensating balance requirements and had various covenants.amounts outstanding under these facilities. 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 and rentals (EBITDAR) of not more than 2.753.50 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.20172023 and January 30, 2016, and during the years then ended, there were no amounts outstanding under these facilities. In March 2017, the $500 million revolving credit facility scheduled to mature in March 2021 was extended to March 2022. No other terms of the facility were modified at that time.As of January 28, 2017 and January 30, 2016,29, 2022, TJX Canada had two uncommitted credit lines, a C$10 million facility for operating expenses and a C$10 million letter of credit facility. As of January 28, 20172023 and January 30, 2016,29, 2022, and during the years then ended, there were no amounts outstanding on the Canadian credit linelines for operating expenses. As of January 28, 20172023 and January 30, 2016, our29, 2022, the Company’s European business at TJX International had an uncommitted credit line of £5 million. As of January 28, 20172023 and January 30, 201629, 2022, and during the years then ended, there were no amounts outstanding on the European credit line.F-29L.K. Income Taxes Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 January 31,
2015 $ 3,196,370 $ 3,102,304 $ 2,943,745 526,673 555,996 606,139 $ 3,723,043 $ 3,658,300 $ 3,549,884 Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021United States $ 4,029 $ 3,934 $ 642 Foreign 607 464 (553) Income before income taxes $ 4,636 $ 4,398 $ 89 Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 January 31,
2015 $ 1,068,778 $ 992,094 $ 896,672 213,505 208,357 180,616 148,367 149,408 155,398 (3,107 ) 34,620 87,057 (10,583 ) (9,979 ) 14,231 7,849 6,142 782 $ 1,424,809 $ 1,380,642 $ 1,334,756 Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Current: Federal $ 656 $ 766 $ 190 State 233 271 36 Foreign 185 122 5 Deferred: Federal 52 (32) (98) State 0 (26) (25) Foreign 12 14 (109) Provision (benefit) for income taxes $ 1,138 $ 1,115 $ (1) assets as follows: Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 $ 27,396 $ 18,872 5,107 7,623 412,391 380,523 57,223 51,823 67,662 60,498 48,463 31,077 $ 618,242 $ 550,416 (29,273 ) (11,998 ) $ 588,969 $ 538,418 $ 569,377 $ 539,818 51,077 47,374 51,976 49,111 213,948 167,968 10,398 5,418 $ 896,776 $ 809,689 $ (307,807 ) $ (271,271 ) $ 6,193 $ 13,831 (314,000 ) (285,102 ) $ (307,807 ) $ (271,271 ) 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 beginningF-30after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted and may be applied 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. Fiscal Year Ended In millions January 28,
2023January 29,
2022Deferred tax assets: Net operating loss carryforward $ 156 $ 159 Pension, stock compensation, postretirement and employee benefits 326 368 Operating lease liabilities 2,500 2,379 Accruals and reserves 245 237 Other 14 13 Total gross deferred tax assets $ 3,241 $ 3,156 Valuation allowance (86) (85) Total deferred tax asset $ 3,155 $ 3,071 Deferred tax liabilities: Property, plant and equipment $ 628 $ 553 Capitalized inventory 61 48 Operating lease right of use assets 2,404 2,289 Tradename/intangibles 21 19 Undistributed foreign earnings 5 9 Other 5 12 Total deferred tax liabilities $ 3,124 $ 2,930 Net deferred tax asset $ 31 $ 141 Non-current asset $ 158 $ 185 Non-current liability (127) (44) Total $ 31 $ 141 deferred U.S.all applicable state and foreign withholding taxes on all undistributed earnings through January 28, 2017 fromof its foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Hong Kong. ForVietnam through January 28, 2023. The Company has not provided for federal, state, or foreign withholding taxes on the approximately $1.2 billion of undistributed earnings related to all other foreign subsidiaries no U.S. income taxes have been provided on the approximately $785 million of undistributed earnings as of January 28, 2017 because such earnings are considered to be indefinitely reinvested in the business. A determination of theThe net amount of unrecognized deferredstate and foreign withholding tax liabilityliabilities related to the undistributed earnings is not practicable because of the complexities associated with the hypothetical calculations.2017, TJX had available2023 and January 29, 2022, for state income tax purposes, TJX had net operating loss carryforwards of $99.2$328 million and $291 million respectively, which expire, if unused, in the years 20182024 through 2036. As of January 30, 2016, TJX had available for state income tax purposes net operating loss carryforwards of $62.4 million.2043. 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 $6.8$16 million has been provided for the deferred tax asset as of January 28, 20172023 and $5.1$14 million as of January 30, 2016.As of January 28, 2017 and January 30, 2016, the29, 2022.Netherlands)U.K.) net operating loss carryforwards of $75$508 million as of January 28, 2023 and $51.1$534 million as of which $4.4 million and $3.9 million will expire, if unused, in fiscal 2025 and 2026 respectively.January 29, 2022. The remainingfull amount of the 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 $22.5$71 million as of both January 28, 20172023 and approximately $6.9 million as of January 30, 2016. Fiscal Year Ended January 28,
2017 January 30,
2016 January 31,
2015 35.0 % 35.0 % 35.0 % 3.5 3.5 3.6 (0.2 ) (0.7 ) (0.9 ) — (0.1 ) (0.1 ) 38.3 % 37.7 % 37.6 % Fiscal Year Ended January 28,
2023January 29,
2022January 30,
2021U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Effective state income tax rate 4.3 4.6 28.1 Impact of foreign operations 1.1 0.9 21.4 Excess share-based compensation (1.0) (1.2) (59.4) Tax credits (0.3) (0.3) (8.9) Nondeductible/nontaxable items (0.1) 0.2 (3.3) All other (0.5) 0.2 (0.3) Worldwide effective income tax rate 24.5 % 25.4 % (1.4) % increaseddecreased for fiscal 2017 as2023 compared to fiscal 2016.2022. The increasedecrease in the fiscal 2023 effective income tax rate wasis primarily due to the lapse of statutes of limitations and resolution of various tax matters, and the change of jurisdictional mix of incomeprofits and the increase in valuation allowance on foreign net operating losses.(net of federal benefit on state issues) of $38.5$265 million as of January 28, 2017, $34.12023, $288 million as of January 29, 2022 and $272 million as of January 30, 2016 and $32.7 million as of January 31, 2015. Fiscal Year Ended In thousands $ 43,326 $ 55,619 $ 48,680 7,018 2,248 4,771 327 11,707 5,278 (334 ) (23,874 ) (2,747 ) (1,245 ) (389 ) — — (1,985 ) (363 ) $ 49,092 $ 43,326 $ 55,619 F-31 Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Balance, beginning of year $ 280 $ 269 $ 259 Additions for uncertain tax positions taken in current year 8 10 12 Additions for uncertain tax positions taken in prior years 7 3 1 Reductions for uncertain tax positions taken in prior years (2) — — Reductions resulting from lapse of statute of limitations (18) (2) (3) Settlements with tax authorities (9) — 0 Balance, end of year $ 266 $ 280 $ 269 $43.8$251 million as of January 28, 2017, $39.02023, $260 million as of January 29, 2022 and $250 million as of January 30, 2016 and $34.8 million as of January 31, 2015., and India, fiscal years through 2010 are no longer subject to examination. In Canada, fiscal years through 2008 are no longer subject to examination. In all other jurisdictions, fiscal years through 20092011 are no longer subject to examination.TJX follows the with and without approach for direct and indirect effects of windfall tax deductions. $1.4$7 million for both of the fiscal years ended January 28, 2023 and January 29, 2022, and $8 million for the year ended January 28, 2017, $1.6 million for thefiscal year ended January 30, 2016 and $1.9 million for the year ended January 31, 2015.2021. The accrued amounts for interest and penalties are $8.0$37 million as of January 28, 2017, $7.02023, $43 million as of January 29, 2022 and $36 million as of January 30, 2016 and $10.1 million as of January 31, 2015.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 consolidated financial statements as of January 28, 2017.2023. During the next twelve months, it is reasonably possible that state tax audit resolutions may reduce unrecognized tax benefits by $0up to $13$52 million, which would reduce the provision for taxes on earnings.M. Commitmentsfixturescertain service contracts containing embedded leases, all of which are operating leases. Real estate leases represent virtually all of the Company’s store locations as well as some of its distribution centers and equipment.office space. Most of TJX’s leases in the U.S. and Canada are store operating leases with ten-year terms and options to extend for one or more five-year periodsperiods. Leases in the U.S. and Canada and Europe generally have an initial term of ten to fifteen year termsyears and leases in Europe,Australia generally have an initial lease term of primarily seven to ten years, some of which have options to extend. Many of the Company’sCompany's leases contain escalation clauses and we have the rightoptions to terminate someprior to the lease expiration date. The exercise of both lease renewal and termination options is at the Company’s sole discretion, as opposed to the landlord’s discretion, and is not reasonably certain at lease commencement. The Company has deemed that the expense of store renovations makes the renewal of the next lease option reasonably certain to be exercised after these renovations occur.before the expiration date under specified circumstances andhave fixed payment schedules, some with specified payments.leases have variable lease payments based on market indices adjusted periodically for inflation, or include rental payments based on a percentage of retail sales over contractual levels. In addition, for real estate leases, TJX is generally required to pay insurance, real estate taxes and certain other operating expenses including in some cases, rentalscommon area maintenance based on a percentageproportionate share of sales. These expensespremises as compared to the shopping center, and some of these costs are based on a market index, primarily in Canada. For leases with these payments based on a market index, the initial lease payment amount is used in the aggregate were approximately one-thirdcalculation of the total minimumoperating lease liability and corresponding operating lease assets included on the Consolidated Balance Sheets. Future payment changes to these market index rate leases are not reflected in the operating lease liability and are instead included in variable lease cost. Variable lease cost also includes variable operating expenses for third party service centers and dedicated transportation contracts that are deemed embedded leases. The operating lease ROU assets also includes any lease payments made in advance of the assets’ use and is reduced by lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.Fiscal Year Ended January 28,
2023January 29,
2022Weighted-average remaining lease term 6.5 years 6.6 years Weighted-average discount rate 2.7 % 2.4 % Fiscal Year Ended In millions Classification January 28,
2023January 29,
2022January 30,
2021Operating lease cost Cost of sales, including buying and occupancy costs $ 1,927 $ 1,906 $ 1,820 Variable and short term lease cost Cost of sales, including buying and occupancy costs 1,359 1,386 1,163 Total lease cost $ 3,286 $ 3,292 $ 2,983 Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 1,949 $ 2,080 $ 1,663 Lease liabilities arising from obtaining right of use assets $ 2,095 $ 1,658 $ 1,380 2017, fiscal 2016 and fiscal 2015 and are not included in the table below.is a scheduletable as of futureJanuary 28, 2023 summarizes the maturity of lease liabilities under operating leases:In millions Fiscal Year: 2024 $ 1,977 2025 1,825 2026 1,628 2027 1,402 2028 1,111 Later years 2,323 10,266 881 $ 9,385 continuing operations asleases signed but not yet commenced and include options to extend lease terms that are now deemed reasonably certain of January 28, 2017:In thousands Operating
Leases $ 1,455,642 1,382,818 1,246,618 1,089,046 908,624 2,438,338 $ 8,521,086 Rental expense under operating leases for continuing operations amountedbeing exercised according to $1,435.2 million for fiscal 2017, $1,365.6 million for fiscal 2016 and $1,321.6 million for fiscal 2015. Rental expense includes contingent rent and is reported net of sublease income. Contingent rent paid was $14.7 million in fiscal 2017, $15.7 million in fiscal 2016 and $15.2 million in fiscal 2015. Sublease income was $1.2 million in fiscal 2017, $0.9 million in fiscal 2016 and $0.8 million in fiscal 2015.As of January 28, 2017 we have a number of lease agreements for facilities and stores that resulted in TJX being considered the owner of the property for accounting purposes (seeCompany’s Lease Accounting within Policy.A). The assets related to these properties are included in “land and buildings” and the related liabilities of $176.2 million are included in “other long-term liabilities.”F-32TJX had outstanding letters of credit totaling $41.2 million as of January 28, 2017 and $29.3 million as of January 30, 2016. Letters of credit are issued by TJX primarily for the purchase of inventory.Note N.M. Accrued Expenses and Other Liabilities, Current and Long Term Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 $ 630,049 $ 573,965 170,490 141,295 111,963 132,871 214,001 202,653 362,473 307,350 84,363 65,983 199,602 134,535 547,523 511,007 $ 2,320,464 $ 2,069,659 Fiscal Year Ended In millions January 28,
2023January 29,
2022Employee compensation and benefits, current $ 968 $ 1,117 Merchandise credits and gift certificates 721 685 Sales tax collections and V.A.T. taxes 384 268 Occupancy costs, including rent, utilities and real estate taxes 378 399 Dividends payable 346 312 Accrued capital additions 199 186 All other current liabilities 1,350 1,278 Total accrued expenses and other current liabilities $ 4,346 $ 4,245 advertising,expense payables, insurance, customer rewards liability, interest, reserve for sales returns, reserve for taxes, fair value of derivatives, expense payables, purchased servicesadvertising, interest and other items, each of which is individually less than 5% of current liabilities. Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 $ 471,728 $ 418,156 231,681 216,040 77,887 93,024 36,713 33,403 176,232 85,214 45,573 24,774 34,140 10,410 $ 1,073,954 $ 881,021 Fiscal Year Ended In millions January 28,
2023January 29,
2022Employee compensation and benefits, long-term $ 597 $ 647 Tax reserve, long-term 235 277 Asset retirement obligation 66 66 All other long-term liabilities 21 25 Total other long-term liabilities $ 919 $ 1,015 O.N. Contingent Obligations, Contingencies, and ContingenciesObligations: TJX has contingent obligations on leases, for which it was a lessee or guarantor, which were assigned to third parties without TJX being released by the landlords. Over many years, TJX has assigned numerous leases that we originally leased or guaranteed to a significant number of third parties. With the exception of leases of former businesses for which TJX has reserved, we have rarely had a claim with respect to assigned leases, and accordingly, we do not expect that such leases will have a material adverse impact on our financial condition, results of operations or cash flows. TJX does not generally have sufficient information about these leases to estimate our potential contingent obligations under them, which could be triggered in the event that one or more of the current tenants does not fulfill their obligations related to one or more of these leases. TJX may also be contingently liable on up to nine leases of former TJX businesses which we believe the likelihood of future liability to TJX is remote.TJX also has contingent obligations in connection with certain assigned or sublet properties that TJX is able to estimate. We estimate that the undiscounted obligations of (i) leases of former operations not included in our reserve for former operations and (ii) properties of our former operations if the subtenants do not fulfill their obligations, are approximately $53.6 million as of January 28, 2017. 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.F-33breach of warranty orcertain losses related to such matters asincluding title to assets sold, specified environmental matters or certain income taxes. These obligations are typicallysometimes limited in time andor amount. There are no amounts reflected in our balance sheetsthe Company’s Consolidated Balance Sheets with respect to these contingent obligations.Contingencies:ourits business. In addition, TJX is a defendant in several lawsuits filed in federal and state courts brought as putative class or collective actions on behalf of various groups of current and former salaried and hourly associates in the U.S. The lawsuits allege violations of the Fair Labor Standards Act and of state wage and hour and other labor statutes, including alleged misclassification of positions as exempt from overtime, alleged entitlement to additional wages for alleged off-the-clock work by hourly employees and alleged failure to pay all wages due upon termination. TJX is also a defendant in a consolidated lawsuit filed in federal court brought as a putative class action 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.In connection with ongoing litigation anhas accrued immaterial amount has been accruedamounts in the accompanying financial statements.P.O. Supplemental Cash FlowsFlow Information Fiscal Year Ended In thousands January 28,
2017 January 30,
2016 January 31,
2015 $ 72,619 $ 64,188 $ 66,265 1,282,172 1,301,122 1,091,128 $ 29,195 $ 20,315 $ 17,377 (20,908 ) 33,384 8,254 $ (94,291 ) $ (30,767 ) $ (60,733 ) 94,291 30,767 60,733 Note Q. Selected Quarterly Financial Data (Unaudited)Presented below is selected quarterly consolidated financial data Fiscal Year Ended In millions January 28,
2023January 29,
2022January 30,
2021Cash paid for: $ 86 $ 139 $ 153 Income taxes 1,225 1,119 146 Non-cash investing and financing activity: Dividends payable $ 34 $ (3) $ 34 Property additions 13 97 (36) 2017 and2023 was due to the pay down of outstanding debt during fiscal 2016 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 First
Quarter Second
Quarter Third
Quarter Fourth
Quarter $ 7,542,356 $ 7,882,053 $ 8,291,688 $ 9,467,647 2,170,213 2,319,092 2,447,815 2,680,870 508,346 562,174 549,786 677,928 0.77 0.85 0.84 1.04 0.76 0.84 0.83 1.03 $ 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 (1)Gross earnings equal net sales less cost of sales, including buying and occupancy costs.