| ☒ | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended February 3, 2018
2, 2019
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| ☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
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Delaware | 04-2207613 | |
(State or other jurisdiction of incorporation or organization) | ( | |
770 Cochituate Road | ||
Framingham, Massachusetts | 01701 | |
(Address of principal executive offices) | (Zip Code) | |
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $1.00 per share | New York Stock Exchange | |
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2, 2019.
vendor relationships. CANADA to HomeGoods in the U.S. We brought Marshalls to Canada in 2011 and operate INTERNATIONAL 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 Estimated Store Marmaxx T.J. Maxx Marshalls HomeGoods HomeGoods(3) Homesense TJX Canada Winners HomeSense Marshalls TJX International T.K. Maxx (Europe) Homesense (Europe) T.K. Maxx (Australia) TJX Total United States Northeast Midwest South (including Puerto Rico) West Subtotal Canada Europe Australia Total Apparel Clothing including footwear Jewelry and accessories Home fashions Total United States Canada Europe Australia Total long-lived assets 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 development, investment or acquisition. profitability in those markets. provide quality merchandise that complies with applicable product safety laws, labeling requirements and other applicable laws, but they may not comply with their obligations to do so. Although our arrangements with our vendors frequently provide for indemnification for product liabilities, the vendors may fail to honor those obligations to an extent we consider sufficient or at all. Concerns or issues with the quality and safety of merchandise raised publicly, particularly with products subject to increased levels of regulation, or the genuineness of merchandise, regardless of whether verified or our fault, could cause damage to our reputation and could result in lost labor and employment practices and benefits, including consumer protection and product safety; Internet regulations, includinge-commerce, electronic communications and privacy; and protection of For example, the ongoing uncertainty around Brexit, including relating to timing and the range of possible outcomes, has required us to consider and in some cases implement strategies for mitigating potential disruptions to our supply chain. potential disruptions in manufacturing and supply; changes in duties, tariffs, trade restrictions, sanctions, quotas and voluntary export restrictions on imported merchandise, including, for example, transport capacity and costs; information technology challenges; problems in third-party distribution and warehousing, logistics, transportation and other supply chain interruptions; strikes, threats of strikes and other events affecting delivery; consumer perceptions of the safety or quality of imported merchandise; product and international trade compliance with laws and regulations of the destination country; compliance with laws and regulations including changing labor, environmental, international trade and other laws in those countries and those concerning ethical business practices, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act; product liability claims from customers or penalties from government agencies relating to products that are recalled, defective or otherwise noncompliant or alleged to be harmful; 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. production of merchandise, international operations and importing merchandise, there can be no assurance that our Associates and our contractors, agents, vendors or other third parties with whom we do business or to whom we outsource business operations will not violate such laws and regulations or our policies, which could subject us to liability and could adversely affect our reputation, operations or operating results. including those described in these risk factors. We maintain a forecasting process that seeks to plan 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. 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 Significant judgment is required in evaluating and estimating our worldwide provision and accruals for taxes, and actual results may differ from our estimations. terms or in a less favorable location. Corporate, Marmaxx, HomeGoods, TJX Canada TJX International customers relating to a stock dividend, paid on November 6, 2018 to the shareholders of record at the close of business on October 30, 2018. All historical share and per share information, as well as basic and diluted earnings per share amounts, have been retroactively adjusted to reflect the two-for-one stock split. Our common stock is listed on the New York Stock Exchange (Symbol: TJX). First Second Third Fourth 2,196. Total Number of Shares Total Number of Shares Plans or Programs(3) October 29, 2017 through November 25, 2017 November 26, 2017 through December 30, 2017 December 31, 2017 through February 3, 2018 Total: Dollars in millions, except per share amounts February 3, 2018(1) January 28, 2017(2) January 30, 2016 January 31, 2015 February 1, 2014 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 Total assets(3) Capital expenditures Long-term obligations(4) Shareholders’ equity Other financial data: After-tax return on average shareholders’ equity Total debt as a percentage of total capitalization(5) Stores in operation: Selling square footage (in thousands): Net sales increased to Comp sales Diluted earnings per share for fiscal Our fiscal Our cost of sales, including buying and occupancy costs, ratio for fiscal Our selling, general and administrative (“SG&A”) expense ratio for fiscal Our consolidated average per store inventories, including inventory on hand at our distribution centers (which excludes inventory in transit) and excluding oure-commerce businesses, increased a 3% increase from non-comp sales. Foreign currency had a neutral impact in fiscal 2019. Net years are as follows: New Stores that are closed permanently or for an extended period of time Sales from oure-commerce businesses, meaning Sierra Net sales Cost of sales, including buying and occupancy costs Selling, general and administrative expenses Impairment of goodwill and other long-lived assets Loss on early extinguishment of debt Pension settlement charge Interest expense, net Income before provision for income taxes* Diluted earnings per share Translation of foreign operating results into U.S. dollars:In our financial statements, we translate the operations of TJX Canada and TJX International from local currencies into U.S. dollars using currency rates in effect at different points in time. Significant changes in foreign exchange rates between comparable prior periods can result in meaningful variations in consolidated net sales, net income and earnings per share growth as well as the net sales and operating results of these segments. Currency translation generally does not affect operating margins, 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 amark-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 themark-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. Themark-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. currency other than an operating division’s local currency. When discussing the impact on our results of the effect of currency exchange rates on such transactions we refer to it as “transactional foreign exchange.” Interest expense Capitalized interest Interest (income) Interest expense, net 2019 and determined there was no material adjustment to the income tax expense. 2017. segments. SEGMENTS Net sales Segment profit Segment profit as a percentage of net sales Increase in comp 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 comp sales Stores in operation at end of period HomeGoods Homesense Total Selling square footage at end of period (in thousands) HomeGoods Homesense Total Net sales Segment profit Segment profit as a percentage of net sales Increase in comp 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 the combination of a higher store wage and freight costs, partially offset by expense leverage on the strong comp sales. Net sales Segment profit Segment profit as a percentage of net sales Increase in comp sales Stores in operation at end of period T.K. Maxx Homesense T.K. Maxx Australia Total Selling square footage at end of period (in thousands) T.K. Maxx Homesense T.K. Maxx Australia Total approximately 0.4 percentage points. General corporate expense New stores Store renovations and improvements Office and distribution centers Capital expenditures below. transactions. 2017. 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. 2019. Tabular Disclosure of Contractual Obligations Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Long-term debt and other long-term obligations(1) Operating lease commitments(2) Purchase obligations(3) Total obligations We prepare our consolidated financial statements in accordance with actual shrinkage has not been material to our annual financial results. We do not generally enter into arrangements with vendors that provide for rebates and allowances that could ultimately affect the value of inventory. amount. Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of TJX; Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of TJX are being made only in accordance with authorizations of management and directors of TJX; and Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of TJX’s assets that could have a material effect on the financial statements. FINANCIAL STATEMENT SCHEDULES Balance End of Sales Return Reserve: Fiscal Year Ended February 3, 2018 Fiscal Year Ended January 28, 2017 Fiscal Year Ended January 30, 2016 Casualty Insurance Reserve: Fiscal Year Ended February 3, 2018 Fiscal Year Ended January 28, 2017 Fiscal Year Ended January 30, 2016 applicable. /s/ ERNIE HERRMAN ZEIN ABDALLA* Amy B. Lane, Director DAVID T. CHING* John F. O’Brien, Director MICHAEL F. HINES* Willow B. Shire, Director Dated: accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 3, 2019 February 3, 2018 January 28, 2017 January 30, 2016 Net sales Cost of sales, including buying and occupancy costs Selling, general and administrative expenses Impairment of goodwill and other long-lived assets, related to Sierra Trading Post (“STP”) 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 February 3, 2018 January 28, 2017 January 30, 2016 Net income Additions to other comprehensive income: Foreign currency translation adjustments, net of related tax provisions of $36,929 and $25,656 in fiscal 2018 and fiscal 2017, respectively, and benefit of $41,048 in fiscal 2016 Recognition of net gains/losses on benefit obligations, net of related tax provision of $8,989 in fiscal 2018, benefit of $7,394 in fiscal 2017 and provision of $6,335 in fiscal 2016 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 $438, $450 and $450 in fiscal 2018, 2017 and 2016, respectively Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $9,592, $11,584, and $13,501 in fiscal 2018, 2017 and 2016, respectively Other comprehensive income (loss), net of tax Total comprehensive income 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 L and Note N) SHAREHOLDERS’ EQUITY Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued Common stock, authorized 1,200,000,000 shares, par value $1, issued and outstanding 628,009,022 and 646,319,046, respectively Additionalpaid-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 Impairment of goodwill and long-lived assets, related to STP 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 (Increase) decrease in merchandise inventories (Increase) in prepaid expenses and other current assets Increase in accounts payable Increase in accrued expenses and other liabilities (Decrease) 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 on build to suit leases Cash payments for rate lock agreement Cash payments for repurchase of common stock Proceeds from issuance of common stock Cash payments of employee tax withholdings for performance based stock awards Excess tax benefits from share-based compensation Cash dividends paid Net cash (used in) financing activities Effect of exchange rate changes on cash Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Additional Paid-In Accumulated Retained Total Balance, 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 Net income Other comprehensive income (loss), net of tax Cash dividends declared on common stock Recognition of share-based compensation Issuance of common stock under stock incentive plan and related tax effect Common stock repurchased Balance, February 3, 2018 year. other current assets” on our Consolidated Balance Sheets. Interest expense Capitalized interest Interest (income) Interest expense, net 3 to 10 years. Depreciation and amortization expense for property was $818.9 million in fiscal 2019, $727.2 million in fiscal 2018 and $664.5 million in fiscal As disclosed in “Future Adoption of New Accounting Standards,” our accounting for build-to-suit leases will change upon adoption of the new lease accounting standard. 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 Impairment Effect of exchange rate changes on goodwill Balance, February 3, 2018 In fiscal 2018, the Company recorded an impairment charge of $99.3 million which included $97.3 million of tradenames. 2017. 2017. the result of the timing of expense recognition and will not be incremental over the term of the lease. For example, under ASC 842 certain initial direct costs will no longer be capitalized and amortized over the lease term and will be expensed as incurred. In future payments. impact upon adoption. statements of cash flows. Land and buildings Leasehold costs and improvements Furniture, fixtures and equipment Total property at cost Less accumulated depreciation and amortization Net property at cost February 3, 2018 January 28, 2017 United States Canada Europe Australia Total long-lived assets Deferred Benefit Costs 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 Foreign currency translation adjustments (net of taxes of $36,929) Recognition of net gains/losses on benefit obligations (net of taxes of $8,989) Amortization of loss on cash flow hedge (net of taxes of $438) Amortization of prior service cost and deferred gains/losses (net of taxes of $9,592) Balance, February 3, 2018 2017: February 3, 2018 January 28, 2017 January 30, 2016 Basic earnings per share: Net income Weighted average common stock outstanding for basic earnings per share calculation Basic earnings per share Diluted earnings per share: Net income Weighted average common stock outstanding for basic earnings per share calculation Assumed exercise / vesting of: Stock options and awards Weighted average common stock outstanding for diluted earnings per share calculation Diluted earnings per share Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts – 3.0M gal Intercompany billings in TJX Europe, primarily merchandise related Merchandise purchase commitments Total fair value of financial instruments Fair value hedges: Intercompany balances, primarily debt and related interest Economic hedges for which hedge accounting was not elected: Diesel contracts – 2.5M gal per Intercompany billings in Europe, primarily merchandise related Merchandise purchase commitments Total fair value of financial instruments 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 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 Maxx, Homesense and tkmaxx.com in Europe and T.K. Maxx in Australia. The percentages of our consolidated revenues by major product category for the last three fiscal years are as follows: Apparel Clothing including footwear Jewelry and accessories Home fashions Total February 3, 2018 January 28, 2017 January 30, 2016 Net sales: In the United States Marmaxx HomeGoods TJX Canada TJX International Segment profit: In the United States Marmaxx(1) 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 February 3, 2018 January 28, 2017 January 30, 2016 Identifiable assets: In the United States Marmaxx HomeGoods TJX Canada TJX International Corporate(2) 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(3) All share amounts and per share data presented have been adjusted to reflect the two-for-one stock split completed on November 6, 2018. Risk-free interest rate Dividend yield Expected volatility factor Expected option life in years Weighted average fair value of options issued Outstanding at beginning of year Granted Exercised Forfeitures Outstanding at end of year Options exercisable at end of year below: 2017. Options outstanding expected to vest Options exercisable Total outstanding options vested and expected to vest adjusted, as applicable, for performance above or below the target specified in the award. Nonvested at beginning of year Granted Vested Forfeited Nonvested at end of year 2017. Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended Change in projected benefit obligation: Projected benefit obligation at beginning of year Service cost Interest cost Actuarial losses Settlements Benefits paid Expenses paid 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 (asset) obligation Net (asset) 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) Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended Discount rate Rate of compensation increase the Internal Revenue Code. We do not anticipate any required funding in fiscal 2020. Funded Plan Fiscal Year Ended Unfunded Plan Fiscal Year Ended February 3, 2018 January 28, 2017 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 Total recognized in other comprehensive income (loss) Total recognized in net periodic benefit cost and other comprehensive income (loss) Weighted average assumptions for expense purposes: Discount rate Expected rate of return on plan assets Rate of compensation increase Funded Plan Expected Benefit Payments Unfunded Plan Expected Benefit Payments Fiscal Year 2019 2020 2021 2022 2023 2024 through 2028 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 Actual Allocation for Fiscal Year Ended Return-seeking assets Liability-hedging assets All other – primarily cash 2017. 2017. General corporate debt: 2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $234 and $278 in fiscal 2018 and 2017, respectively) 2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $250 and $325 in fiscal 2018 and 2017, respectively) 2.25% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $6,403 and $7,149 in fiscal 2018 and 2017, respectively) Debt issuance cost Long-term debt Fiscal Year 2019 2020 2021 2022 2023 Later years Less amount representing unamortized debt discount Less amount representing debt issuance cost Aggregate maturities of long-term debt benefit for foreign derived intangible income (FDII). 2019 and determined there is no material adjustment to the income tax expense. We have recorded current tax on GILTI relative to fiscal 2019 operations and will continue to account for GILTI as a period cost when incurred. 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 February 3, 2018. 2018. U.S. federal statutory income tax rate Effective state income tax rate Impact of foreign operations Excess share-based compensation Impact of 2017 Tax Act All other Worldwide effective income tax rate 2017. February 3, 2018 January 28, 2017 January 30, 2016 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 2017. 2017. The US Treasury issued several proposed regulations supplementing the 2017 Tax Act in 2018, including detailed guidance clarifying the calculation of the mandatory tax on previously unrepatriated earnings, expansion of existing foreign tax credit rules to newly created categories, and various other guidance. These proposed regulations are intended to be applied retroactively. As a result, the Company will monitor their impact to the Company's filing positions and will record any impacts as a discrete event in the period that the guidance is finalized. Fiscal Year 2019 2020 2021 2022 2023 Later years Total future minimum lease payments 2, 2019: 2017. Long-Term Employee compensation and benefits, current Dividends payable Accrued capital additions Rent, utilities and occupancy, including real estate taxes Merchandise credits and gift certificates Insurance Sales tax collections and V.A.T. taxes All other current liabilities Accrued expenses and other current liabilities Employee compensation and benefits, long term Accrued rent Landlord allowances Income taxes payable Tax reserve, long term Financing lease obligations Asset retirement obligation All other long-term liabilities Other long-term liabilities Cash paid for: Interest on debt Income taxes Non-cash investing and financing activity: Construction in progress Financing lease obligation Dividends payable Property additions Fiscal Year Ended February 3, 2018 (53 weeks) Net sales Gross earnings(1) Net income Basic earnings per share Diluted earnings per share Fiscal Year Ended January 28, 2017 (52 weeks) Net sales Gross earnings(1) Net income Basic earnings per share Diluted earnings per share20172018 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 Form10-K under Item 1, “Business,” Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8, “Financial Statements and Supplementary Data,” and in our 20172018 Annual Report to Shareholders under our letter to shareholders and our performance graphs. Forward-looking statements are inherently subject to risks, uncertainties and potentially inaccurate assumptions. Such statements give our current expectations or forecasts of future events; they do not relate strictly to historical or current facts. We have generally identified such statements by using words indicative of the future such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “looking forward,” “may,” “plan,” “potential,” “project,” “should,” “target,” “will” and “would” or any variations of these words or other words with similar meanings. All statements that address activities, events or developments that we intend, expect or believe may occur in the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These “forward-looking statements” may relate to such matters as our future actions, future performance or results of current and anticipated sales, expenses, interest rates, foreign exchange rates and results and the outcome of contingencies such as legal proceedings.2(TJX)(together with its subsidiaries, "TJX", the "Company", "we", or "our") is the leadingoff-price apparel and home fashions retailer in the United States and worldwide. We have over 4,0004,300 stores that offer a rapidly changing assortment of quality, fashionable, brand name and designer merchandise at prices generally 20% to 60% below full-price retailers’ (including department, specialty, and major online retailers) regular prices on comparable merchandise, every day.many income levels and across other demographic groups with our value proposition. Our strategies and operations are synergistic across our retail chains. As a result, we are able to leverage our expertise throughout our business, sharing information, best practices, initiatives and new ideas, and to develop talent across our Company. We alsoFurther, we can leverage the substantial buying power of our businesses inwith our global relationships with vendors.Businesses.BusinessesMARMAXX:2,2852,343 stores. We founded T.J. Maxx in 1976 and acquired Marshalls in 1995. Both chains sell family apparel (including footwear and accessories), home fashions (including home basics, accent furniture, lamps, rugs, wall décor, decorative accessories and giftware) and other merchandise. We primarily differentiate T.J. Maxx and Marshalls through different product assortment, including an expanded assortment of fine jewelry and accessories and a high-end designer section called The Runway at T.J. Maxx and a full line of footwear, a broader men’s offering and a juniors’ department called The Cube at Marshalls, as well as varyingin-store initiatives. This differentiated shopping experience at T.J. Maxx and Marshalls encourages our customers to shop both chains. Our e-commerce website, e-commercetjmaxx.com website,tjmaxx.com, was launched in 2013.HOMEGOODS:667749 stores, HomeGoods offers an eclectic assortment of home fashions, including furniture, rugs, lighting, soft home, decorative accessories, tabletop and cookware as well as expanded pet, kids and gourmet food departments. In 2017, we launched Homesense in the U.S. with 4 stores.Our 16 Homesense complementsstores complement HomeGoods, offering a differentiated mix and expanded departments, such as large-scalelarge furniture, ceiling lighting and rugs, as well as newdifferent departments, such as a general store and an entertaining marketplace.CANADA:264271 stores across Canada is comparable to T.J. Maxx, with select stores offering fine jewelry, and The Runway, a designer section. We opened our HomeSense chain in 2001, bringing the home fashionsoff-price concept to Canada. HomeSense has 117125 stores with a merchandise mix of home fashions similar37388 Marshalls stores in Canada. As with Marshalls in the U.S., our Canadian Marshalls stores offer an expanded footwear department and The Cube juniors’ department, differentiating them from Winners stores.INTERNATIONAL:starting in late 2015, the T.K. Maxx chain in Australia. Launched in 1994, T.K. Maxx introducedoff-price retail to Europe and remains Europe’s only majorbrick-and-mortaroff-price retailer of apparel and home fashions. With 540567 stores, T.K. Maxx operates in the U.K., Ireland, Germany, Poland, Austria and the Netherlands. Through its stores and itse-commerce website for the U.K., tkmaxx.com, T.K. Maxx offers a merchandise mix similar to T.J. Maxx. We brought theoff-price home fashions concept to Europe, opening Homesense in the U.K. in 2008. In fiscal 2018, we opened 2 Homesense stores2008 and in Ireland.Ireland in 2017. Its 5568 stores 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 fiscal 20162015 andre-branded it under the T.K. Maxx name during fiscal 2018.2017. The merchandise offering at its 38T.K. Maxx in Australia's 44 stores is comparable to T.J. Maxx.(“STP”),in 2018. Sierra is anoff-price Internet retailer of brand name and quality outdoor gear, family apparel and footwear, sporting goods and home fashions. Sierra Trading Post launched itse-commerce site, sierratradingpost.com, in 1998operates sierra.com and operates 2735 retail stores in the U.S.Model.ModelBuying.Buyingmarketplacemarket to achieve this end. Our global buying organization, which numbers more than 1,000approximately 1,100 Associates in 16 buyingand has offices across 4 continents in 12 countries, executes this opportunistic buying strategy, buying merchandise from more than 100 countries in a variety of ways, depending on market conditions and other factors.arise.arise, close to the time it is needed in our stores and online and when we have more visibility into fashion trends and price. In contrast to traditional retailers, which tend to order most of their goods far in advance of the time the product appears on the selling floor, our merchants generally remain in the marketplace for goods throughout the year, frequently looking for opportunities to buy merchandise. We buy much of our merchandise for the current or immediately upcoming selling season. We also buy some merchandise that is available in the market4 in the marketplace to buy merchandise that we believe has the right combination of brand, fashion, price and quality to supplement the product we expect to be available to purchase later for those future seasons. We also acquire some merchandise that we offer underin-house brands or brands that are licensed to us. We develop some of this merchandise ourselves in order to supplement the depth of, or fill gaps in, our expected merchandise assortment.Our expansive vendor universe, which is in excess of 20,000, consists primarily of manufacturers as well asandmake up our expansive universe of more than 21,000 vendors, which provides us substantial and diversified access to merchandise. We have not experienced difficulty in obtaining sufficient quality merchandise for our business in either favorable or difficult retail environments and expect this will continue as we continue to grow. We believe a number of factors provide us excellent access on an ongoing basis to leading branded merchandise and make us an attractive channel for many vendors in the market. We are typically willing to purchase less-than-full assortments of items, styles and sizes as well as quantities ranging from small to very large; we are able to disperse merchandise across our geographically diverse network of stores and to target specific markets; we pay promptly; we generally do not ask for typical retail concessions (such as advertising, promotional and markdown allowances), delivery concessions (such as drop shipments to stores or delayed deliveries) or return privileges; and we have financial strength and an excellent credit rating.Management.ManagementPricing.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 major online retailers) regular prices on comparable merchandise, every day. We do not generally engage in promotional pricing activity such as sales or coupons. We have generally been able to react to price fluctuations in the wholesale market to maintain our pricing gap relative to prices offered by traditional retailers as well as our merchandise margins through various economic cycles.Operations.OperationsExperience.ExperienceDistribution.17.519 million square feet in six countries, including a third-party operated distribution center in Australia.countries. These centers are generally large,5highly automated and built to suit our specific,off-price business model.model, with a combination of automated systems and manual processes to manage the variety of merchandise we acquire. We ship substantially all of our merchandise to our stores through thesea network of distribution centers, as well as warehouses and shipping centers operated by third parties.Growth.Growthinformation on the store growth ofinformation for our four major segments infor the last two most recently completed fiscal years, as well as our growth estimates for fiscal 20192020 and 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 2017 Fiscal 2018 Fiscal 2019
(estimated) 28,000 1,186 1,223 29,000 1,035 1,062 2,221 2,285 2,350 3,000 24,000 579 667 25,000 — 4 579 671 771 1,400 28,000 255 264 23,000 106 117 28,000 57 73 418 454 484 600 29,000 503 540 20,000 44 55 22,000 35 38 582 633 668 1,100 (1) 3,812 (2) 4,070 (2) 4,308 (2)(3) 6,100 (2)(3) Number of Stores at Year End Fiscal 2018 Fiscal 2019 Marmaxx T.J. Maxx 28,000 1,223 1,252 Marshalls 29,000 1,062 1,091 2,285 2,343 2,403 3,000 HomeGoods HomeGoods 23,000 667 749 Homesense 27,000 4 16 671 765 845 1,400 TJX Canada Winners 28,000 264 271 HomeSense 23,000 117 125 Marshalls 27,000 73 88 454 484 514 600 TJX International T.K. Maxx (Europe) 29,000 540 567 Homesense (Europe) 20,000 55 68 T.K. Maxx (Australia) 22,000 38 44 633 679 729 1,100 4,070 4,306 4,536 6,100 (1) HomeGoods and TJX total includes 31 Homesense stores in the U.S. estimated for fiscal 2020 and store growth potential includes 400 Homesense stores. (2) Reflects store growth potential for T.K. Maxx in current geographies and for Homesense in the United Kingdom and Ireland. (2)The TJX total includes 12(3) Includes 27 Sierra Trading Post stores in fiscal 2017, 272018, 35 Sierra Trading Post stores for fiscal 2018,2019, and 3545 Sierra Trading Post stores estimated for fiscal 2019.2020. Sierra Trading Post stores are not included in estimated store growth potential.(3)HomeGoods and TJX total includes 15 new Homesense stores in the U.S. for fiscal 2019 and store growth potential includes 400 Homesense stores.Revenue Information.The percentages of our consolidated revenues by geography for the last three fiscal years are as follows: Fiscal 2018 Fiscal 2017 Fiscal 2016 24 % 24 % 24 % 12 12 12 25 25 25 15 16 16 76 77 77 10 10 9 13 13 14 1 * * 100 % 100 % 100 % * Revenue from Australia was less than one percent during fiscal 2017 and fiscal 2016.6The percentages of our consolidated revenues by major product category for the last three fiscal years are as follows: Fiscal 2018 Fiscal 2017 Fiscal 2016 52 % 54 % 55 % 15 15 15 33 31 30 100 % 100 % 100 % Information about our long-lived assets by geography for the last three fiscal years are as follows: Fiscal Year Ended Dollars in thousands February 3, 2018 January 28, 2017 January 30, 2016 $ 3,514,628 $ 3,312,210 $ 3,101,846 308,259 283,688 242,705 1,151,972 920,710 782,970 31,194 16,286 10,054 $ 5,006,053 $ 4,532,894 $ 4,137,575 Segment Overview.We report our results in four business segments. The Marmaxx segment (T.J. Maxx, Marshalls and tjmaxx.com) and the HomeGoods segment (HomeGoods and Homesense) both operate in the United States. Our TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and our TJX International segment operates T.K. Maxx, Homesense and tkmaxx.com in Europe and T.K. Maxx in Australia. We also operate STP, anoff-price Internet retailer that operates sierratradingpost.com and retail 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 NoteG- Segment Information of Notes to Consolidated Financial Statements.7Store Locations.Our chains operated stores in the following locations at the end of fiscal 2018; store counts below include both banners within a combo or a superstore:United States: T.J. Maxx Marshalls HomeGoods Homesense Sierra Trading Post 24 6 6 — — 16 16 12 — — 12 4 4 — — 117 143 78 — — 17 10 10 — 4 28 24 16 — 1 3 5 3 — — 4 4 — — — 91 92 61 — — 50 34 22 — — 5 — — — — 7 2 1 — 1 50 47 28 — 2 23 14 7 — — 11 7 4 — — 9 6 4 — — 16 5 4 — — 14 11 6 — — 9 4 3 — — 25 29 19 — — 52 58 33 2 2 41 26 17 — 2 16 15 11 — 2 10 5 4 — — 18 16 10 — — 6 — 1 — — 5 3 3 — — 9 10 6 — 1 16 9 8 — — 39 51 38 2 2 5 4 2 — — 79 79 47 — 2 37 26 18 — — 4 1 1 — — 47 34 20 — — 12 6 3 — — 12 10 7 — 2 49 38 30 — — 8 20 6 — — 6 6 6 — — 21 11 7 — — 2 1 1 — — 26 18 8 — — 67 85 43 — — 13 3 5 — 1 5 1 1 — 1 36 29 21 — — 19 20 11 — 1 7 3 2 — — 22 10 9 — 1 3 1 — — 2 1,223 1,062 667 4 27 8Canada: Winners HomeSense Marshalls 34 19 13 35 18 7 9 2 3 4 3 1 3 1 1 11 2 2 114 52 34 1 1 — 47 16 11 6 3 1 264 117 73 Europe: T.K. Maxx Homesense 337 53 26 2 120 — 39 — 10 — 8 — 540 55 Australia:T.K. MaxxAustralian Capital Territory2New South Wales13Queensland16Victoria7Total Stores38Competition.on-line online service and shopping experience; reputation and store location. We compete with local, regional, national and international department, specialty,off-price, discount, warehouse and outlet stores as well as other retailers that sell apparel, home fashions and other merchandise that we sell, whether in stores,on-line, online, through catalogues,catalogs, or other media channels.Employees.AtAs of February 3, 2018,2, 2019, we had approximately 249,000270,000 employees, many of whom work less than 40 hours per week. In addition, we hire temporary employees, particularly during the peakback-to-school and holiday seasons. Our full-time, part-time, temporary, and seasonal workforce supports the execution of our flexibleoff-price business model, including the timing and frequency of store deliveries and the management of a rapidly changing mix of store inventory in over 4,0004,300 retail stores in nine countries.Trademarks. and Trade Secret, in relevant countries. We expect our rights in these trademarks and service marks to endure in locations where we use them for as long as we continue to do so.Seasonality.9Certifications.Certificationspublic can read and copy materials at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549 and obtain information on the operation of the reference room by calling the SEC at1-800-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).In this report, fiscal 2016 means the fiscal year ended January 30, 2016; fiscal 2017 means the fiscal year ended January 28, 2017; fiscal 2018 means the fiscal year ended February 3, 2018 and fiscal 2019 means the fiscal year ending February 2, 2019. Unless otherwise indicated, all store information in this Item 1 is as of February 3, 2018, and references to store square footage are to gross square feet. Unless otherwise stated or the context otherwise requires, references in this Form10-K to “TJX” and “we,” refer to The TJX Companies, Inc. and its subsidiaries.4, 2018:3, 2019:Name Age Office and Business Experience Kenneth Canestrari 5657 Senior 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 6465 Senior Executive Vice President and Chief Financial Officer since April 2014; Executive Vice President and Chief Financial Officer from January 2012 to April 2014. Executive Vice President, Finance from June 2009 to January 2012. Senior Vice President, Corporate Controller from 2007 to 2009 and Senior Vice President, Director of Finance, Marmaxx, from 2000 to 2007. Various financial positions with TJX from 1983 to 1988 and 1997 to 2000. Ernie Herrman 5758 Chief Executive Officer since January 2016. Director since October 2015. President since January 2011. Senior Executive Vice President, Group President from August 2008 to January 2011. President, Marmaxx from 2005 to 2008. Senior Executive Vice President, Chief Operating Officer, Marmaxx from 2004 to 2005. Executive Vice President, Merchandising, Marmaxx from 2001 to 2004. Various merchandising positions with TJX since joining in 1989. Michael MacMillan61Senior Executive Vice President, Group President since 2011. President, Marmaxx from 2008 to 2011. President, Winners Merchants International (WMI) from 2003 to 2008. Executive Vice President, WMI from 2000 to 2003. Various finance positions with TJX from 1985 to 2000. Mr. MacMillan is retiring from TJX, with a scheduled retirement date in April 2018.Carol Meyrowitz 6465 Executive Chairman of the Board since January 2016. Chairman of the Board from June 2015 to January 2016. Chief Executive Officer from January 2007 to January 2016. Director since 2006 and President from 2005 to January 2011. Consultant to TJX from January 2005 to October 2005. Senior Executive Vice President from March 2004 to January 2005. President, Marmaxx from 2001 to January 2005. Executive Vice President of TJX from 2001 to 2004. Various senior management and merchandising positions with Marmaxx and with Chadwick’s of Boston and Hit or Miss, former divisions of TJX, from 1983 to 2001. 10NameAgeOffice and Business ExperienceDougDouglas Mizzi5859 Senior Executive Vice President, Group President since February 2018. President, TJX Canada from October 2011 to February 2018. Managing Director T.K. Maxx, UK from April 2010 to October 2011. Executive Vice President, Chief Operating Officer, WMI from February 2006 to April 2010. Senior Vice President, Director of Store Operations, WMI from 2004 to 2006. Various store operations positions with TJX from 1988 to 2004. Richard Sherr 6162 Senior Executive Vice President, Group President since January 2012. President, HomeGoods from 2010 to 2012. Chief Operating Officer, Marmaxx from 2007 until 2010. Various merchandising positions at TJX from 1992 to 2007. 20182019 and until their successors are elected and qualified.ITEM 1A.Risk FactorsWhile opportunistictheybut subject us to risks related to the pricing, quantity, mix, nature, and timing of inventory flowing to our stores. Our merchants are in the marketplace frequently, as much of our merchandise is purchased for the current or immediately upcoming season, and our opportunisticfocus on buying opportunistically places considerable discretion with them. Our business model expects themour merchants to effectively react to frequently changing opportunities and trends in the market, assess the desirability and value of merchandise and generally make determinations of how and what we source as well as when we source it. If we do not obtain the right merchandise at the right times, in the right quantities, at the right prices and in the right mix, our customer traffic, as well as our sales and margins, could be adversely affected.leading to decreased profit margins, or we may have insufficient inventory to meet customer demand, leading to lost sales, either of which could adversely affect our financial performance.ana sufficient overall pricing differential to full-price retailers, including department, specialty, and major online retailers, and our ability to attract customers or sustain our margins may be adversely affected. We may not achieve this pricing differential at various times or in some reporting segments, chains or geographies, which could adversely affect our results.Similarly, we must also properly execute our inventory management strategy of distributing the right merchandise to the right stores in the right quantities at the right time. appropriately change thebe flexible in our allocation of floor space at our stores among product categories. If we are not able to do so, our ability to attract and retain customers and our results could be adversely affected. ouroff-price model within our current markets and into new geographic regions, product lines, and channels and, as appropriate, adding new businesses, whether by11There are significant risks associated with our ability to continue to expand successfully and managing the implementation of thisManaging growth effectively.effectively can be difficult. If any aspect of our expansion strategy does not achieve the success we expect, in whole or in part, we may fail to meet our financial performance expectations and/or may be required to increase our investment,investments, slow our planned growth or close stores or operations. Various circumstances could adversely affect our expansion plans. For example, if we are not able to find and lease appropriate real estate on attractive terms in the locations where we seek to open stores, we may need to slowchange our planned growth in those areas. Similarly, new stores may not achieve the same sales or profit levels as our existing stores, whether in current or new markets; our financial performance in new markets may not be the same as in existing markets; and adding stores or banners to existing markets may otherwise adversely affect our sales and profitability.may increase as we grow our business, addingand may add pressure to management and to various functions across our business, including administration, systems, including information technology systems, merchandising, store operations, distribution, logistics, and compliance, as well as puttingcompliance. Increasing our size and complexity may also put additional pressure on appropriately staffing and training Associates in these areas as we grow and/or managing appropriate third party providers tothat support these areas. The large size and scale of our operations, our multiple banners and locations across the U.S., Canada, Europe and Australia and the autonomy afforded to the banners in some aspects of the business also increases the risk that our systems, controls, practices and policies may 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 if 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, our business may be adversely affected or we may need to reduce ourthe rate of expansion of one or more operations or otherwise curtail growth, in one or more markets, which may adversely affect our success in executing our business goals and adversely impact ourplans, sales and results.a shopping experienceexperiences that meetsmeet those trends and preferences. However, doingwe may not do so effectively and on a timely basis across our diverse merchandise categories and in each of the many markets in the U.S., Canada, Europe and Australia in which we do business is challenging.business. Trends and preferences in markets may differ from what we anticipate. Although our business model allows us greater flexibility than many traditional retailers to meet consumer preferences and trends for(for example, by expanding and contracting merchandise categories in response to consumers’ changing tastes,tastes), we may not successfully do so, which could add difficulty in attracting new customers, retaining existing customers and encouraging frequent customer visits and could adversely affect our results.(through technology including Internet-based and other(for example, through various digital or mobile channels or particular forms of social media outlets)platforms), which expectations may vary across demographics and may evolve rapidly. Overall consumer spending online also continues to grow. Meeting these expectations effectively involves identifying the right opportunities and making the right investments at the right time and with the right speed, among other things, and failure to do so may impact our financial results.competitorscompetitors’ programs are more effective with their programs than we are,ours, our revenue or results of operations may be adversely affected.Internet-based and other digital or mobile communication channels, including social media.channels. 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.12inretailers that operate through stores, throughe-commerce, catalogues and/or other media or channels. Some of our competitors are larger than we are or have more experience in selling certain product lines or through certain channels than we do. New competitors frequently enter the market and existingmarket. Existing competitors enter or increase their presence in the markets in which we operate and may expand their merchandise offerings, add new sales channels or change their pricing strategies, all of which affect the competitive landscape. Consumer spending online has increased and may continue to increase, while our business is primarily in stores. We compete on the basis of various factors affecting value, meaning the combination of brand, fashion, price, and quality;quality as well as merchandise selection and freshness; banner name recognition and appeal; bothin-store and online service and shopping experience; convenience and store location. If we fail to compete effectively, our sales and results of operations could be adversely affected.management as well as quality store, systems, distribution center and othermanagement. We also need to hire capable, engaged Associates in large numbers.numbers for our stores and distribution centers and for other areas of our business, including information technology functions. We must constantly recruit new Associates to fill entry level and part-time positions with historically high rates of turnover.turnover and at times find seasonal talent in sufficient numbers. Availability and skill of Associates may differ across markets in which we do business and in new markets we enter, and we may be unable to manage our labor needs effectively. In addition, because of the distinctive nature of ouroff-price model, we must provide significant internal training and development for key Associates across the Company, including within our buying organization. Similar to other retailers, we face challenges in securing and retaining sufficient talent in management and other key areas for many reasons, including competition for talent in the retail industry and for talent in various geographic markets. If we do not effectively attract qualified individuals, train them in our business model, support their development and retain them in sufficient numbers and at appropriate levels of the organization, our growth could be limited and our performance could be adversely affected.unemployment levels;minimum wage laws and benefits requirements; market pressures, including prevailing wage rates and benefit levels minimum wage laws and benefits requirements and other market pressures on wages and benefits;unemployment levels; changing demographics; economic conditions; interest rate changes; economic, demographicactuarial assumptions and other actuarial assumptions;methods; the costs of providing and managing retirement, health and other employee benefits, including health and insurance costs; and a dynamic regulatory and policy environment, including with respect to health care, legislation, immigration, law and policy, and governmental labor, employment, pension and other employee benefits, programs and requirements. Changes to one or moretaxes. Any of these factors could increase our labor costs.as(as they did during the past threeseveral fiscal years, whileyears). Conversely, failing to increase our wages or benefits competitively or reducing ouroffer competitive wages or benefits could result in a decline inadversely affect our ability to attract or retain Associatessufficient or in the quality of our workforce,Associates, causing our customer service or performance to suffer, which could impact our results.13reputationreputation.business.In the ordinary courseprocess information of customers, Associates and other persons, as well as information of our business we collect, store, process and transmit confidentialof our suppliers and service providers. We rely heavily on information technology systems, including those of suppliers and service providers, to manage all key aspects of our business, including planning, purchasing, sales, supply chain management, inventory management, point-of-sale processing, e-commerce, human resources, financial management, communications, safeguarding information, and certaincompliance with legal obligations. This reliance requires us to accurately anticipate our current and future information relating to individuals, suchtechnology needs and successfully develop and implement appropriate systems that can provide the right support at the right time. Our ongoing operations and successful growth are dependent on the doing so, as our customers, Associateswell as the ongoing integrity, security and vendors (including, for example, customer payment card and check information and other personal data). We rely in part on commercially availableconsistent operations of these systems, software, hardware, services, tools and monitoring to provide security for collection, storage, processing, and transmission of personal and/or confidential information. including related back-up systems.with many other companiesis common in the retail industry, weour information technology systems, as well as those of our suppliers and service providers, are subject totargeted by attempts to compromise our data security. For example, computer hackers have attemptedaccess personal or sensitive information, attempts to steal money, and we expect will continue to attempt to penetrate our computer systems or those of third parties with whom we work or to whom we outsource business operations. If successful, such computer hackers may further attempt to misappropriate personal information or confidential business information and/orattempts to disrupt our business operations. While we have taken steps designed to further strengthen the securitybusiness. These attempts could include use 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 security compromise, 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 or resolved without a disruption to our business.In addition, an Associate, contractor or third party 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, may purposefully or inadvertently allow unauthorized access to our systems or to personal or confidential information or may otherwise disrupt our business operations. Advances in computer and software technology and capabilities, rapid changes in the sources, methods and targets of cyberattacks (for example, malware, ransomware, and phishing, attacks) and the usesocial engineering, denial-of-service attacks, exploitation of devices to tamper with payment entry devices (such assoftware or product vulnerabilities, employee malfeasance, skimmers and shimmers),shimmers, and the increasing sophisticationother forms of cyber criminals generally increaseattacks. These attempts are becoming increasingly sophisticated, heightening the risk of a data compromise or disruption. Our and our suppliers’ and service providers’ information technology systems also may be damaged or disrupted, or personal or sensitive information compromised, from a number of other causes, including power outages, system failures, catastrophic events, or employee inadvertence. Such damage or interruption could materially impair our ability to operate our business disruption.Compromise ofor otherwise result in material impacts on our dataoperating results. In addition, the global regulatory environment surrounding information 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 lossand privacy is increasingly demanding, and unauthorized access of personal or businesssensitive information and delayscould result in detecting any suchregulatory enforcement actions, class actions, contract liability, or other forms of material legal liability. Any successful compromise or lossdisruption of our information technology systems could among other adverse impacts to our business, disrupt our operations; damage our reputationresult in material reputational harm and decreaseimpact our customers’ willingness to shop in our stores or online; impactonline and/or our abilitysuppliers’ willingness to attractdo business with us.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 to 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, software and applications to manage many aspects of our business, including to process and record transactions in our stores and oure-commerce sites; to manage our customer, vendor and Associate data; 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 otherwise operate oure-commerce sites. We are dependent on the integrity, security and consistent operations of these systems and relatedback-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, may be subjected to damage or interruption from a number of causes, including power outages; system failures; cyberattacks (including malware, ransomware and phishing attacks) and devices to tamper with our payment or other systems (including skimmers and shimmers); catastrophic events; and design or usage errors by our Associates, contractors or third party service providers on which we rely. Although we have taken stepscontrols designed to reduce the risk of data security compromises and information technology failures or disruptions. While we have implemented measures designed to further strengthen these events occurring, there can be no guarantee thatpolicies, procedures and controls since the unauthorized intrusions into our network discovered late in 2006, we ormay suffer a third party on14which we rely will not suffer one of these events. Our approach to disaster recoverysimilar event in the future. These measures also require costly and business continuity planning may not be adequateongoing investment in technologies, hiring, training, and any compromises, interruptions or shutdowns of our systems, including those managed and/or operated 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, cause us to suffer reputational harm, or result in liability.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; adding enhanced or new functionality, such as cloud computing technologies ande-commerce solutions; and adding or integrating with new systems when we acquire new businesses. We also modify and update our procedures for, and add vendors and internal teams who assist us with, designing, implementing and maintaining our systems and infrastructure. compliance.theseongoing actions intended to update, enhance, modify or replace our systems and infrastructure, including from not accurately capturing and maintaining data, efficiently testing and implementing changes, realizing the expected benefit of the change and managing the potential disruption of the actions 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. The efficient operation and successful growth of our business depends upon our information systems, including our ability to operate, maintain and develop them effectively. A failure of those systems could disrupt our business, subject us to liability, damage our reputation, or otherwise impact our financial results.unemployment; decreasedunemployment levels; availability of 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; geopolitical instability or uncertainty; and regulatory volatility or uncertainty, including in areas likesuch as international trade (for example, the ongoing discussions regarding Brexit)and uncertainty related to Brexit, the U.K.’s decision to withdraw from the European Union) may also have significant effects on consumer confidence and spending that would, in turn, affect our business or the retail sales.industry generally. These conditions and factors could adversely affect discretionary consumer spending or shift trends in consumer spending and, although we believe our flexibleoff-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 we offer or at all, and accordingly, can adversely affect the demand for the merchandise in our stores, particularly in apparel and seasonal merchandise. As discussed further below, adverse weather can also affect the efficient or timely transportation of merchandise to our distribution and shipping centers, stores ande-commerce customers or elsewhere along our supply chain, and may impact transportation to or from our stores and other facilities. As a result, adverse or unseasonable weather could adversely affect our sales, increase markdowns, impact customer satisfaction and adversely affect our operating results.15Our results may be adversely affected by serious disruptions or catastrophic events.Natural or other disasters, such as hurricanes, tornadoes, floods, earthquakes and other extreme weather; climate conditions; unforeseen public health issues, such as pandemics and epidemics; or fires, explosions and acts of war or terrorism could disrupt our operations in a number of ways, including severely damaging or destroying one or more of our stores, distribution facilities or data centers, or could disrupt the operations of one or more of our vendors or other parts of our supply chain located in the affected areas.Day-to-day operations, including our ability to receive products from our vendors or transport products to our stores or to oure-commerce customers could be adversely affected, transportation to and from our stores (by customers or Associates) could be limited, 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 we did in areas of the U.S., including Puerto Rico, after severe hurricanes during fiscal 2018. As a result, our business could be adversely affected.and similar venues, including blogs, websites and other forums forthat facilitate rapid, broad communications to an audience of consumers and other interested persons, may adversely affect our reputation and brand, even if the information is inaccurate, incomplete or unverified. The reputation of our company and our retail banners may be damaged in all, onea market or some of the markets in which we do business by adverse events at the corporate level or at our retail banners, or by a director or an executive or other Associate acting outside of company policies and practices. Similarly, challenges or reactions to action (or inaction), perceived action (or inaction), by our company on issues like social policies, privacy, merchandising, compensation, compliance related to social, product, labor and environmental standards or other sensitive topics, and any perceived lack of transparency about such matters, could harm our reputation, particularly as expectations of companies and of companies’ corporate responsibility obligations may continue to change. Damage to the reputation of our company and our banners could result in declines in customer loyalty and sales; affect our vendor relationships, business development opportunities and Associate retention;our ability to attract and retain quality Associates; divert attention and resources from management, including to respond to inquiries or additional regulatory scrutiny; and otherwise adversely affect our results.thosefederal regulations related to the U.S. Consumer Product Safety Improvement Act of 2008 and the U.S. Food Safety Modernization Act, state regulations like California’s Proposition 65, and similar legislation in other countries in which we operate, impose restrictions and requirements on the merchandise we sell in our stores and throughe-commerce. These regulations change from time to time and new federal, state, provincial or local regulations in the U.S. and other countries that may affect our business are contemplated and enacted with some regularity. If we or our merchandise vendors are unable to comply with regulatory requirements on a timely basis or at all, or to adequately monitor new regulations that may apply to existing or new merchandise categories or in new geographies, we could incur significant fines or penalties or we could have to curtail some aspects of our sales or operations, which could have a materialan adverse effect on our financial results. We rely on our vendors to16sales,sales; uninsured claims or losses,losses; merchandise recalls and increased costs,costs; and regulatory, civil or criminal fines or penalties, any of which could have an adverse effect on our financial results.and regulations, orders and our own internal policies may also require us to spend additional time and resources to implement new procedures and financial and other controls, conduct audits, train Associates and third parties on our compliance methods or take other actions, particularly as we continue to grow globally and enter new markets or countries, any of which could adversely impact our results.interpretationinterpretations 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:—– regardingfor labor unions and works councils;—– climate change, energy and waste; – supply chain, trade restrictions and logistics, including resulting from changes to requirements or policies from the outcome of Brexit discussions; – health and welfare and financial regulations;—– —– financial regulations; – data protection and privacy, such as to comply with, or fines and penalties related to, the General Data Protection Regulation in Europe; —– climate change, supply chain, energy and waste;——– third party intellectual property rights.We have expanded our operations 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 establish, develop and maintain international operations and promote business in new international jurisdictions, which may differ significantly from other countries in which we currently operate.17In addition to facing risks similar to our U.S. and current international operations, suchregulations likeour current operations, there are risks inherent in opening and developing operations in new countries, such those related to compliance under the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, there are additional risks inherent in opening and developing operations in new countries. These additionalAct. Additional risks include, among others, understanding the local retail climate and trends, local customs and cultures, seasonal differences, business practices and competitive conditions; complying with relevant laws, rules and regulations; developing the appropriate infrastructure; 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.many locations, particularly southeastern Asia, which are outside of the country where the particular store is located, particularly southeastern Asia.they will be sold. Where we are the importer of record, we may be subject to regulatory or other requirements, including those similar to requirements imposed upon the manufacturer of such products. More generally, we are subject to various risks of sourcing merchandise from other countries, including moving merchandise internationally, such as:These risk include:—– —– new potential tariffs and border adjustment taxes,taxes; changes to the North American Free Trade Agreement or successor or other trade agreements; or changes to trade requirements resulting from Brexit;—– —– —– —– —– —– —– —– —– —– —– —– —– 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 to18transportation.transportation, such as those relating to trucking and freight hauling. For example, at the end of fiscal 2018,in recent years, increased freight cost related to labor and equipment shortages, as well as other factors, had an impact on our margins. Similarly, other commodity prices can fluctuate dramatically. Such increases can increase the cost of merchandise, which could adversely affect our performance through potentially reduced consumer demand or reduced margins.19Trade Secretour Australia business in fiscal 2016 and STPSierra in fiscal 2013), invest in or enter into joint ventures with other businesses, develop new businesses internally (as with Homesense, our new U.S. home store concept)concept launched in fiscal 2018) and divest, close or consolidate businesses. Failure to execute on mergers, acquisitions, investments, divestitures, closings and consolidations in a satisfactory manner could adversely affect our future results of operations and financial condition. Acquisition, investment or divestiture activities may divert attention of management from operating the existing businesses, and we may not effectively evaluate target companies, investments or investment partners or assess the risks, benefits and costcosts of buying, investing in or closing businesses or of the integration of acquired businesses, all of which can be difficult, time-consuming and dilutive. These activities may not meet our performance and other expectations and may expose us to unexpected or greater-than-expected costs, liabilities and risks. In addition, we recorded intangible assets and goodwill and the value of the tradenames in connection with our last acquisitions of Trade Secret and STP and may similarly do so in the future in connection with other acquisitions. If we are unable to realize the anticipated benefits from acquisitions, we may be required to impair some or all of the goodwill associated with an acquisition, which would adversely impact our results of operations and balance sheet, such as with the impairment charge related to STPSierra taken during fiscal 2018. Divestitures, closings and consolidations could involve risks such as significant costs and obligations of closure, including exposure on leases, owned real estate and other contractual, employment, pension and severance obligations, and potential liabilities that may arise under law as a result of the disposition or the subsequent failure of an acquirer.including(such as classification, employment rights, discrimination, wage and hour and retaliation;retaliation); whistle blower claims; tax; securities; disclosure; real estate; environmental matters; tort; business practices; consumer protection; privacy/data security; product safety and compliance; advertising; and intellectual property. There continue to be employment-related and consumer protection lawsuits, including putative class actions, in the United States, and we are subject to these types of suits. We cannot predict the results of legal and regulatory proceedings with certainty, and actual results may differ from any reserves we establish estimating the probable outcome. Regardless of merit or outcome, litigationthese proceedings can be both time-consuming and disruptive to our operations and may cause significant expense and diversion of management attention. Legal, regulatory and regulatoryother proceedings and investigations could expose us to significant defense costs, fines, penalties and liability to private parties and governmental entities for monetary recoveries and other amounts and attorneys’ fees and/or require us to change aspects of our operations, any of which could have a material adverse effect on our business and results of operations.20treaties, 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.In December 2017, theThe U.S. Tax Cut and Jobs Act of 2017 (the “2017 Tax Act”) significantly revised the currentprevious federal income tax codecode. It is expected that additional interpretive guidance will be issued with significant changesrespect to corporate taxation, including reducing the corporate tax rate, limiting certain tax deductions, revising the treatment of foreign earnings for U.S. federal income tax purposes and modifying or repealing many business deductions and credits. While the 2017 Tax Act reduces the federal income tax rate for corporations, it could negatively affect our business and financial condition. Many aspects of the new tax law are uncertain. Significant judgements will need tosuch guidance may be made in the interpretation of various provisions, and U.S. regulators could interpret or issue guidance that is different from our interpretation.interpretation and thus adversely affect our results. In addition, it is uncertain if and to what extent various states will conform to the newly enacted federal tax law, which could also impact our tax obligations.termterms 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 close stores or to relocate stores within a market on less favorable terms.21apparel and home fashion businesses.business. Loss may be caused by error or misconduct of Associates, customers, vendors or third parties. Our inability to effectively combat and/or minimize the loss or theft of assets, or to effectively reduce the impact of those losses, could adversely affect our financial performance.10ten years with options to extend the lease term for one or more5-year five year periods. 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 10ten years. Some of the leases in Europe and Australia have options to extend. We have the right to terminate some of these leases before the expiration date under specified circumstances and some with specified payments.22 T.J. Maxx Marshalls HomeGoods Homesense Sierra Alabama 25 6 6 — — Arizona 17 18 14 — — Arkansas 14 4 5 — — California 121 145 89 — — Colorado 17 11 10 — 5 Connecticut 28 24 18 — 1 Delaware 3 5 4 — — District of Columbia 4 4 — — — Florida 95 94 67 — — Georgia 50 34 27 — — Hawaii 6 — — — — Idaho 7 2 2 — 1 Illinois 51 45 31 — 3 Indiana 23 14 8 — — Iowa 11 7 5 — — Kansas 9 6 7 — — Kentucky 16 5 5 — — Louisiana 15 12 8 — — Maine 9 3 3 — — Maryland 25 29 20 2 — Massachusetts 52 57 37 4 2 Michigan 41 27 19 — 3 Minnesota 17 16 12 — 2 Mississippi 10 5 4 — — Missouri 19 17 10 — — Montana 6 — 1 — — Nebraska 5 4 4 — 1 Nevada 9 11 7 — 1 New Hampshire 16 10 10 — 1 New Jersey 40 51 42 4 2 New Mexico 5 4 2 — — New York 80 83 49 3 2 North Carolina 37 27 18 — — North Dakota 5 1 1 — — Ohio 47 35 22 — 1 Oklahoma 12 6 3 — — Oregon 12 9 8 — 3 Pennsylvania 51 40 32 2 — Puerto Rico 8 21 6 — — Rhode Island 6 6 6 — — South Carolina 22 12 9 — — South Dakota 2 1 1 — — Tennessee 26 18 9 — — Texas 70 91 50 — — Utah 14 4 7 — 1 Vermont 5 1 1 — 1 Virginia 37 30 23 1 — Washington 19 21 13 — 2 West Virginia 7 3 2 — — Wisconsin 23 11 12 — 1 Wyoming 3 1 — — 2 Total Stores 1,252 1,091 749 16 35 Winners HomeSense Marshalls Alberta 34 20 15 British Columbia 36 18 7 Manitoba 9 3 3 New Brunswick 4 3 2 Newfoundland 3 1 1 Nova Scotia 11 2 2 Ontario 118 55 42 Prince Edward Island 1 1 — Quebec 49 19 14 Saskatchewan 6 3 2 Total Stores 271 125 88 T.K. Maxx Homesense United Kingdom 345 66 Republic of Ireland 26 2 Germany 131 — Poland 43 — Austria 12 — The Netherlands 10 — Total Stores 567 68 T.K. Maxx Australian Capital Territory 2 New South Wales 15 Queensland 18 Victoria 9 Total Stores 44 3, 2018.2, 2019. Square footage information for the distribution and fulfillment centers represents total “ground cover” of the facility. Square footage information for office space represents total space occupied.Distribution CentersMarmaxx T.J. MaxxWorcester, Massachusetts494,000 s.f.—ownedEvansville, Indiana989,000 s.f.—ownedLas Vegas, Nevada1,110,000 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, GeorgiaMarmaxx T.J. Maxx Worcester, Massachusetts 494,000 s.f.—owned Evansville, Indiana 989,000 s.f.—owned Las Vegas, Nevada 1,110,000 s.f.—owned Charlotte, North Carolina 595,000 s.f.—owned Pittston Township, Pennsylvania 1,017,000 s.f.—owned Memphis, Tennessee 800,000 s.f.—leased San Antonio, Texas 1,215,000 s.f.—owned Marshalls Atlanta, Georgia 780,000 s.f.—owned Woburn, Massachusetts 472,000 s.f.—leased Bridgewater, Virginia 562,000 s.f.—leased Philadelphia, Pennsylvania 1,001,000 s.f.—leased Phoenix, Arizona 1,139,000 s.f.—owned 1,139,000Sierra Cheyenne, Wyoming 780,000 s.f.—owned HomeGoods Brownsburg, Indiana 805,000 s.f.—owned Bloomfield, Connecticut 803,000 s.f.—owned Jefferson, Georgia 801,000 s.f.—owned Tucson, Arizona 858,000 s.f.—owned Carteret, New Jersey 460,000 s.f.—leased TJX Canada Brampton, Ontario 506,000 s.f.—leased Mississauga, Ontario 679,000 s.f.—leased Torbram, Ontario 445,000 s.f.—leased Delta, British Columbia 432,000 s.f.—leased TJX International Wakefield, England 641,000 s.f.—leased Stoke, England 261,000 s.f.—leased Walsall, England 277,000 s.f.—leased Bergheim, Germany 322,000 s.f.—leased Wroclaw, Poland 303,000 s.f.—leased Chullora, Australia 154,000 s.f.—leased HomeGoodsBrownsburg, Indiana805,000 s.f.—ownedBloomfield, Connecticut803,000 s.f.—ownedJefferson, Georgia801,000 s.f.—ownedTucson, Arizona858,000 s.f.—ownedTJX CanadaBrampton, Ontario506,000 s.f.—leasedMississauga, Ontario679,000 s.f.—leasedTorbram, Ontario445,000 s.f.—leasedDelta, British Columbia432,000 s.f.—leasedTJX InternationalWakefield, England641,000 s.f.—leasedStoke, England261,000 s.f.—leasedWalsall, England277,000 s.f.—leasedBergheim, Germany322,000 s.f.—leasedWroclaw, Poland303,000 s.f.—leasedOffice Space Sierra Framingham and Marlborough, Massachusetts Sierra Cheyenne, Wyoming 120,000 s.f. —owned Mississauga, Ontario 434,000 s.f.—leased Watford, England 286,000282,000 s.f.—owned and leased Dusseldorf, Germany 45,00046,000 s. f.—leasedMascot, Australia 44,000 s. f.—leased Sierra Trading Post owns a 900,000 square foot facility in Cheyenne, Wyoming which houses administrative offices and fulfillment center operations. T.K. Maxx in Australia, part of TJX International, leases office space and maintains third-party arrangements for a distribution center in Australia totaling approximately 173,000 square feet. buying office locations in various countries.We areTJX is also defendinga defendant in a putative class action claims on behalf of23 TJX’s compare at pricing. The lawsuits are in various procedural stages and seek monetary damages, injunctive relief and attorneys’ fees. In connection with ongoing litigation, an immaterial amount has been accrued in the accompanying financial statements.24Security HolderStockholder Matters and Issuer Purchases of Equity SecuritiesPrice RangeCommon Stock The quarterly high and low sale prices for our common stock for fiscal 2018 and fiscal 2017 are as follows: Fiscal 2018 Fiscal 2017 Quarter High Low High Low $ 79.97 $ 73.25 $ 79.20 $ 66.82 $ 80.92 $ 66.66 $ 81.88 $ 72.43 $ 74.38 $ 68.89 $ 83.64 $ 72.51 $ 81.46 $ 66.44 $ 79.79 $ 71.50 3, 20182, 2019 was 2,260.Our Board of Directors declared four quarterly dividends of $0.3125 per share for fiscal 2018 and $0.26 per share for fiscal 2017. While our dividend policy is subject to periodic review by our Board of Directors, we are currently planning to pay a $0.39 per share quarterly dividend in fiscal 2019, subject to declaration and approval by our Board of Directors, and currently intend to continue to pay comparable dividends in the future.20182019 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(4) 1,412,273 $ 69.39 1,412,273 $ 1,442,780,056 2,114,512 $ 74.72 2,114,512 $ 1,284,779,833 1,944,055 $ 77.90 1,912,816 $ 4,135,779,792 5,470,840 5,439,601 November 4, 2018 through December 1, 2018 2,629,102 $51.35 2,629,102 $2,400,789,659 December 2, 2018 through January 5, 2019 3,594,376 $45.91 3,594,376 $2,235,789,672 January 6, 2019 through February 2, 2019 11,544,855 $48.07 11,544,855 $3,180,789,706 Total: 17,768,333 17,768,333 (1) Consists of shares repurchased under publicly announced stock repurchase programs and 31,239 shares surrendered to satisfy tax withholding obligations in connection with the vesting of restricted stock awards.programs.(2) Includes commissions for the shares repurchased under stock repurchase programs. (3)Consists of shares repurchased under publicly announced stock repurchase programs.(4)(3)In February 2018, TJX announced a stock repurchase program authorizing an additional $3.0 billion in repurchases, from time to time, under which approximately $1.7 billion remained available as of February 2, 2019. In February 2019, the Company announced that its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $3.0$1.5 billion of TJX common stock from time to time. In February 2016 and 2017, TJX announced stock repurchase programs authorizing an additional $2.0 billion and $1.0 billion in repurchases, respectively, from time to time, under which $1.1 billion remained available as of February 3, 2018.25 Fiscal Year Ended (53 Weeks) $ 35,865 $ 33,184 $ 30,945 $ 29,078 $ 27,423 $ 2,608 $ 2,298 $ 2,278 $ 2,215 $ 2,137 646,105 664,432 683,251 703,545 726,376 $ 4.04 $ 3.46 $ 3.33 $ 3.15 $ 2.94 $ 1.25 $ 1.04 $ 0.84 $ 0.70 $ 0.58 $ 2,758 $ 2,930 $ 2,095 $ 2,494 $ 2,150 $ 3,360 $ 2,993 $ 2,370 $ 2,648 $ 2,449 $ 14,058 $ 12,884 $ 11,490 $ 10,978 $ 10,091 $ 1,058 $ 1,025 $ 889 $ 912 $ 947 $ 2,231 $ 2,228 $ 1,615 $ 1,613 $ 1,267 $ 5,148 $ 4,511 $ 4,307 $ 4,264 $ 4,230 54.0 % 52.1 % 53.1 % 52.2 % 54.1 % 30.2 % 33.1 % 27.3 % 27.4 % 23.1 % 4,070 3,812 3,614 3,395 3,219 87,548 83,798 80,480 76,537 73,209 Fiscal Year Ended Amounts in millions, except per share amounts (53 Weeks) Income statement and per share data: Net sales $ 38,973 $ 35,865 $ 33,184 $ 30,945 $ 29,078 Net income $ 3,060 $ 2,608 $ 2,298 $ 2,278 $ 2,215 1,259,252 1,292,209 1,328,864 1,366,502 1,407,090 $ 2.43 $ 2.02 $ 1.73 $ 1.67 $ 1.57 $ 0.78 $ 0.625 $ 0.52 $ 0.42 $ 0.35 Balance sheet data: Cash and cash equivalents $ 3,030 $ 2,758 $ 2,930 $ 2,095 $ 2,494 Working capital $ 2,938 $ 3,360 $ 2,993 $ 2,370 $ 2,648 Total assets $ 14,326 $ 14,058 $ 12,884 $ 11,490 $ 10,978 Capital expenditures $ 1,125 $ 1,058 $ 1,025 $ 889 $ 912 $ 2,234 $ 2,231 $ 2,228 $ 1,615 $ 1,613 Shareholders’ equity $ 5,049 $ 5,148 $ 4,511 $ 4,307 $ 4,264 Other financial data: After-tax return on average shareholders’ equity 60.1 % 54.0 % 52.1 % 53.1 % 52.2 % 30.7 % 30.2 % 33.1 % 27.3 % 27.4 % Stores in operation 4,306 4,070 3,812 3,614 3,395 Selling square footage (in thousands) 91,075 87,548 83,798 80,480 76,537 (1) Fiscal 2019 and Fiscal 2017 include a pension settlement charge and Fiscal 2017 includes a loss on early extinguishment of debt. (2) Fiscal 2018 includes an impairment charge of $99.3 million and a net benefit from the enactment of the 2017 Tax Act described in Item 7 under “Tax Cuts and Jobs Act of 2017.” (2)Fiscal 2017 includes a loss on early extinguishment of debt and a pension settlement charge.(3) Amounts adjustedFiscal 2018 and prior periods have been restated to reflect the reclassification of debt issuance costtwo-for-one stock split completed in accordance with ASU2015-03. We reclassified $9 million, $11 million and $7 million of debt issuance cost from other assets to long-term obligations at January 30, 2016, January 31, 2015 and February 1, 2014, respectively. See NoteA- Basis of Presentation and Summary of Accounting Policies of Notes to Consolidated Financial Statements for additional information.November 2018.(4) Defined as long-term debt, exclusive of current installments and capital lease obligations, less the portion due within one year.installments.(5) Defined as shareholders’ equity, short-term debt, and long-term debt and capital lease obligations, including current maturities.yearsyear ended January 28, 2017 (fiscal 2017) and January 30, 2016 (fiscal 2016).4,0004,300 stores through our four main segments: in the U.S., Marmaxx26(which (which operates T.J. Maxx, Marshalls and tjmaxx.com) and HomeGoods (which operates HomeGoods and Homesense); TJX Canada (which operates Winners, HomeSense and Marshalls in Canada); and TJX International (which operates T.K. Maxx, Homesense and tkmaxx.com in Europe, and T.K. Maxx in Australia). We also operate Sierra, formerly known as Sierra Trading Post (“STP”), anoff-price Internet retailer that operates sierratradingpost.comsierra.com and retail stores in the U.S. The results of STPSierra are reported in our Marmaxx segment.20182019 include the following:—– $35.9$39 billion for fiscal 2018,2019, up 8%9% over the same period last year. The 53rd week in fiscal 2018 increased net sales by 2%.2018. At February 3, 2018,2, 2019, the number of stores in operation increased 7%6% and selling square footage increased 4% over the end of fiscal 2017.—– on a52-week basis increased 6% in fiscal 2019 over an increase of 2% in fiscal 2018 over an increase of 5% in fiscal 2017 and an increase of 5% in fiscal 2016.2017. The fiscal 20182019 increase was driven primarily by an increase in customer traffic at each of our four segments.—– 20182019 were $4.04$2.43 compared to $3.46$2.02 per share in fiscal 2017. Fiscal 2018 earnings per share includes a $0.17 net benefit from tax reform along with the related investments made by the Company, an $0.11 benefit from the 53rd week in the Company’s fiscal 2018 calendar partially offset by a $0.10 impairment charge related to STP. Fiscal 2017 earnings per share includes a $0.07 reduction due to a loss on the early extinguishment of debt and a pension settlement charge during the third quarter.—– 20182019 pre-tax margin (the ratio ofpre-tax income to net sales) was 10.8%10.7%, a 0.40.1 percentage point decrease compared to 11.2%10.8% in fiscal 2017. The impairment charge relating to STP and the cost of incremental investments we made in connection with the 2017 Tax Act collectively reducedpre-tax margin by 0.6 percentage points while the 53rd week in the fiscal 2018 calendar lifted pretax margin by approximately 0.1 percentage point. Fiscal 2017pre-tax margin was reduced by 0.3 percentage points due to the two third quarter charges referred to above.—– 20182019 was 71.1%,71.4% a 0.10.3 percentage point increase compared to 71.0%71.1% in fiscal 2017. This increase was driven by higher supply chain costs partially offset by the favorable impact ofmark-to-market of inventory derivatives and a benefit from the 53rd week in the fiscal 2018 calendar. Merchandise margins were flat compared to fiscal 2017.—– 20182019 was 17.8%, a 0.4 percentage point increase from 17.4% inwhich was flat to fiscal 2017. The incremental investments described below related to the 2017 Tax Act increased the fiscal 2018 expense ratio by 0.3 percentage points. The remaining increase is primarily due to higher store payroll costs due to wage increases.—– 6%1% on a reported basis and increased 4%3% on a constant currency basis at the end of fiscal 20182019 as compared to the prior year.—– 2018,2019, we repurchased 22.351.8 million shares of our common stock for $1.7$2.5 billion, on a “trade date basis”. Earnings per share reflect the benefit of theour stock repurchase program. With $1.1 billion remaining under previously announced stock repurchase programs,programs. In February 2019, our Board of Directors approved our 19th stocka repurchase program that authorizes the repurchase of up to an additional $3.0 billion.$1.5 billion of TJX common stock.272017:2017among other things, includes aone-time mandatory transition tax on accumulated foreign undistributed earnings andincluded a reduction of the U.S. corporate income tax rate to 21 percent, effective January 1, 2018.2018 and had a significant impact on our fiscal 2019 and fiscal 2018 operating results. The change in the U.S. income tax rate also requires usbenefits recognized due to revalue our deferred tax assets and liabilities. Although we are still evaluating the impact of the 2017 Tax Act on TJX, the Company has estimated the impact of the 2017 Tax Act which resulted in a reductionnet benefit to net income of $0.34 per share for fiscal 2019. In fiscal 2018, the full year tax provision. The Company has reinvested a portion of thesethe tax benefits by approvingthrough a discretionary bonus to eligiblenon-bonus plan Associates globally providingand an incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally, as well as making contributions to the Company’s charitable foundations, collectively referred to as “incremental investments related to the 2017 Tax Act.” The tax benefits recognized due to the 2017 Tax Act, offset by theafter-tax impact of incremental investments we made related to the 2017 Tax Act, resulted in a net benefit to net income of $0.17$0.09 per share for fiscal 2018.2018 fourth quarter2019 totaled $39 billion, a 9% increase over $35.9 billion in fiscal 2018. The increase reflected a 6% increase from comp stores and full year.sales:sales from our e-commerce businesses combined amounted to approximately 2% of total sales and had an immaterial impact on fiscal 2019 sales growth.new stores,non-comp sales, a 2% increase from comp sales, and a 2% increase from the impact of the 53rd week in the fiscal 2018 calendar. Foreign currency had a neutral impact in fiscal 2018. Net sales frome-commerce businesses amounted to approximately 2% of total sales and had an immaterial impact on consolidated revenues by geography for the last three fiscal 2018 sales growth. Consolidated net sales for fiscal 2017 totaled $33.2 billion, a 7% increase over $30.9 billion in fiscal 2016. The increase reflected a 5% increase from comp sales and a 4% increase from new stores, offset by a 2% negative impact from foreign currency exchange rates. Fiscal 2019 Fiscal 2018 Fiscal 2017 United States Northeast 23 % 24 % 24 % Midwest 13 12 12 South (including Puerto Rico) 25 25 25 West 15 15 16 Subtotal 76 76 77 Canada 10 10 10 Europe 13 13 13 Australia 1 1 * Total 100 % 100 % 100 % * Revenue from Australia was less than one percent during fiscal 2017. Sales:Sales, formerly referred to as same-store sales, to be sales of stores that have been in operation for all or a portion of two consecutive fiscal years, or in other words, stores that are starting their third fiscal year of operation. We calculate comp sales on a52-week basis by comparing the current and prior year weekly periods that are most closely aligned. Relocated stores and stores that have changed 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 comp percentage is immaterial.(“ (“non-comp sales”) consists of:of—– stores-stores - stores that have not yet met the comp sales criteria,—– —– Trading Post (including stores), tjmaxx.com and tkmaxx.com28foursegments for fiscal 2019 were primarily due to an increase in customer traffic. In fiscal 2019, home fashions and apparel both grew, with apparel outperforming home fashions. Geographically, in the U.S., the Southeast, Great Lakes and the Southwest regions reported the highest comp sales increases, and the Mid Atlantic was below the consolidated average. Comp sales increases for TJX Canada and TJX International were below the consolidated average.increase,increases, and the Northeast was below the consolidated average. In Canada, comp sales increases were well above the consolidated average and TJX International was at the consolidated average.Comp sales increases in the U.S. for fiscal 2017 were primarily due to an increase in customer traffic. We also had an increase 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 comp sales growth. Geographically, in the U.S., sales were strong in virtually all regions, with the Southeast and the Great Lakes regions reporting the highest comp sales growth. In Canada, comp sales increases were well above the consolidated average while TJX International was below the consolidated average.sales: Percentage of Net Sales Fiscal Year 2018 Fiscal Year 2017 Fiscal Year 2016 100.0 % 100.0 % 100.0 % 71.1 71.0 71.2 17.8 17.4 16.8 0.3 — — — 0.2 — — 0.1 — 0.1 0.1 0.1 10.8 % 11.2 % 11.8 % $ 4.04 $ 3.46 $ 3.33 Percentage of Net Sales Fiscal Year 2019 Fiscal Year 2018 Fiscal Year 2017 Net sales 100.0 % 100.0 % 100.0 % Cost of sales, including buying and occupancy costs 71.4 71.1 71.0 Selling, general and administrative expenses 17.8 17.8 17.4 Impairment of goodwill and other long-lived assets — 0.3 — Loss on early extinguishment of debt — — 0.2 Pension settlement charge 0.1 — 0.1 Interest expense, net — 0.1 0.1 Income before provision for income taxes* 10.7 % 10.8 % 11.2 % * Figures may not foot due to rounding. :—– —– 29sales, including buyingSales, Including Buying and occupancy costs:Occupancy Costscompared toand 71.0% in fiscal 2017 and 71.2% in fiscal 2016.2017. The increase in this expense ratio during fiscal 2019 was driven by higher supply chain costs as we continue to invest in existing and open new distribution centers as well as the absence of the benefit of the 53rd week reflected in last year's expense ratio. Merchandise margin was essentially flat compared to fiscal 2018 despite significantly higher freight costs.benefittedbenefited the expense ratio by approximately 0.1 percentage point as well as an estimated 0.1 percentage point benefit from the 53rd week in the Company’s fiscal 2018 calendar. MerchandiseFiscal 2018 merchandise margin was essentially flat to fiscal 2017.The improvement in the fiscal 2017 expense ratio was driven by an increase in our merchandise margin along with leverage on buyingoccupancy costs as a result of the 5% comp sales increase. Together these two items benefitted the fiscal 2017 expense ratio by approximately 0.5 percentage points. Merchandise margin improved despite the continued pressure transactional foreign exchange had on the cost of merchandise at our foreign segments this year versus the prior year. Although not as significant 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 were partially offset by higher supply chain costs and the negative impact of themark-to-market of inventory derivatives.SG&A:Administrative Expenses2017 and 16.8%2017. The fiscal 2019 expense ratio reflects an increase in fiscal 2016.incentive compensation accruals due to a stronger than expected operating performance as well as store wage increases, partially offset by leverage on strong comp sales. The fiscal 2018 expense ratio increased by 0.3 percentage points due toreflects the impact of the incremental investments related to the 2017 Tax Act. The remaining increase in fiscal 2018 was primarily due toAct and higher employee payroll costs due to wage increases.The increase in this ratio in fiscal 2017 was primarily due to a combination of higher employee payroll costs, due to wage increases and investments to support our growth and supply chain costs, partially offset by the favorable impact of reduced contributions to the TJX charitable foundations in fiscal 2017 as compared to fiscal 2016.goodwillGoodwill and other long-lived assets, relatedOther Long-lived Assets, Related to STP:OurSierraresults includedwe recorded a $99.3 million impairment charge, primarily related to goodwill, as the estimated fair value of STPSierra fell below the carrying value due to a decrease in projected revenue growth rates. The impairment charge is included in the Marmaxx segment. As we continue transitioning this business to anoff-price model, we saw improvement intop line during the second halfthird quarter of fiscal 2018. We remain confident in the potential of STP and believe we are positioned for successful growth going forward.Loss on early extinguishment of debt: During the fiscal 2017, third quarter, we issued $1.0 billion of 2.25%ten-year notes. We used a portion of the proceeds to redeem our $375 million 6.95% notes on October 12, 2016, prior to their scheduled maturity of April 15, 2019 and we recorded apre-tax loss on the early extinguishment of debt of $51.8 million.settlement charge:Settlement Charge 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. As a result, 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 onto TJX, but did result in anon-cashpre-tax non-cash pre-tax pension settlement charge of $31.2 million.expense, net:Expense, net Fiscal Year Ended Dollars in thousands February 3,
2018 January 28,
2017 January 30,
2016 $ 69,237 $ 69,219 $ 68,253 (4,942 ) (7,548 ) (7,984 ) (32,707 ) (18,137 ) (13,869 ) $ 31,588 $ 43,534 $ 46,400 30 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Interest expense $ 69,102 $ 69,237 $ 69,219 Capitalized interest (4,263 ) (4,942 ) (7,548 ) Interest (income) (55,979 ) (32,707 ) (18,137 ) Interest expense, net $ 8,860 $ 31,588 $ 43,534 20182019 and fiscal 20172018 was driven by additional interest income, primarily due to an increase in invested balances and higher return rates.taxes:Taxes2017 and 37.7%2017. The decrease in the fiscal 2016.2019 effective income tax rate is primarily driven by the reduction of the U.S. federal statutory rate from 35% to 21%. The decrease in the effective income tax rate in fiscal 2018 was primarily due to the favorable effect of the 2017 Tax Act, excess tax benefit from share-based compensation attributable to the adoption ofASU2016-09-Compensation- Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting, and the jurisdictional mix of income. The increase 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.requiringExchange Commission issued Staff Accounting Bulletin No. 118, which allows aone-time transition measurement period, not to exceed one year, to finalize the accounting for the income tax on certain undistributed earnings of foreign subsidiaries. The provisional tax benefitimpacts of the 2017 Tax Act is based on currently available information and interpretations, which are continuing to evolve.Act. We will continue to analyze additional information and guidance related to the 2017 Tax Act as supplemental legislation, regulatory guidance, or evolving technical interpretations become available. The final impacts may differ from the recorded amounts as of February 3, 2018, and we will continue to refine such amounts within the measurement period provided by Staff Accounting Bulletin No. 118. We expect to completecompleted our analysis no later thanin the fourth quarter of fiscal 2019.incomeIncome and diluted earnings per share:Diluted Earnings Per Sharecompared toand $2.3 billion in both fiscal 2017 and fiscal 2016.2017. Diluted earnings per share were $4.04$2.43 in fiscal 2019, $2.02 in fiscal 2018 $3.46and $1.73 in fiscal 2017 and $3.33 in fiscal 2016. The tax benefits recognized due to the 2017 Tax Act, offset2017. Year over year results are impacted by theafter-taxnumerous items that impact of the incremental investments related to the 2017 Tax Act, resulted in a net benefit to diluted earnings per share of $0.17 per share. The impairment charge related to STP reduced fiscal 2018 diluted earnings per share by $0.10 per share while the 53rd week in the fiscal 2018 calendar provided a benefit of approximately $0.11 per share. Foreigncomparability as summarized below. Fiscal Year Ended February 2,
2019February 3,
2018January 28,
2017 (53 weeks) $ (0.34 ) $ (0.09 ) $ — $ — $ (0.06 ) $ — Sierra impairment charge $ — $ 0.05 $ — Pension settlement charge $ 0.02 $ — $ 0.01 Loss on early extinguishment of debt $ — $ — $ 0.02 (1) Refer to the Tax Cuts and Jobs Act of 2017 section within this MD&A for further details on the net benefit of 2017 Tax Act items. $0.02 positiveneutral impact on earnings per share in fiscal 2019 when compared to fiscal 2018, and a $0.02 positive impact in fiscal 2018 when compared to fiscal 2017, and a $0.07 negative impact in fiscal 2017 when compared to fiscal 2016. During the third quarter of fiscal 2017, we incurred charges from the loss on early extinguishment of debt and the pension settlement, collectively reducing fiscal 2017 net income by $50 million, or $0.07 per share. We repurchased 22.3 million shares of our stock at a cost of $1.7 billion in both fiscal 2018 and fiscal 2017, and 26.5 million shares of our stock at a cost of $1.8 billion in fiscal 2016.information:InformationSTP, anoff-price Internet retailerSierra, formerly Sierra Trading Post that operates sierratradingpost.comsierra.com and retail stores in the U.S. The results of STP have beenSierra are included in our Marmaxx segment.31segments:Segments: Fiscal Year Ended Dollars in millions February 3,
2018 January 28,
2017 January 30,
2016 $ 22,249.1 $ 21,246.0 $ 19,948.2 $ 2,949.4 $ 2,995.0 $ 2,858.8 13.3 % 14.1 % 14.3 % 1 % 5 % 4 % 1,223 1,186 1,156 1,062 1,035 1,007 27 12 8 2,312 2,233 2,171 27,077 26,614 26,158 24,916 24,750 24,308 470 227 159 52,463 51,591 50,625 Fiscal Year Ended In millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 24,058.0 $ 22,249.1 $ 21,246.0 Segment profit $ 3,253.9 $ 2,949.4 $ 2,995.0 Segment profit as a percentage of net sales 13.5 % 13.3 % 14.1 % Increase in comp sales 7 % 1 % 5 % Stores in operation at end of period T.J. Maxx 1,252 1,223 1,186 Marshalls 1,091 1,062 1,035 Sierra 35 27 12 Total 2,378 2,312 2,233 Selling square footage at end of period (in thousands) T.J. Maxx 27,484 27,077 26,614 Marshalls 25,269 24,916 24,750 Sierra 598 470 227 Total 53,351 52,463 51,591 5%8% in fiscal 20182019 on top of a 7%5% increase in fiscal 2017.2018. The fiscal 2019 increase reflects a 7% increase from comp sales and a 1% increase from non-comp sales. The sales increase of 5% in fiscal 2018 reflects a 2% increase from new storenon-comp sales, a 2% increase from the 53rd53rd week and a 1% increase from comp sales. The comp sales increase of 1% in fiscal 2018 is on top of a 5% increase in the prior year. Comp sales growth at Marmaxx for fiscal 20182019 was primarily due to a 3%5% increase in customer traffic on top of a 4%3% increase in customer traffic in fiscal 2017, which was offset by a decrease in the average basket.2018. Geographically, comp sales were strong throughout most of the country as all regions posted a 5% comp or greater. Apparel outperformed home fashions in fiscal 2019 with the Southeast and Southwest regions particularly strong and the Northeast was below the segment average. Home fashions outperformed apparel for fiscal 2018, with apparelboth categories posting flatcomp sales on top of strongsolid comp sales in fiscal 2017.E-commerce salesgrowth. Sales of our U.S. e-commerce businesses represented approximately 2%3% of Marmaxx’s net sales.decreasedincreased to 13.5% in fiscal 2019 compared to 13.3% in fiscal 2018. This comparison is impacted by items impacting the fiscal 2018 segment margin, primarily the Sierra impairment charge which reduced last year’s segment margin by 0.4 percentage points. Marmaxx results for fiscal 2019 reflect an improvement due to expense leverage on the strong comp sales which was more than offset by higher incentive compensation accruals due to the stronger than expected operating performance and an increase in distribution costs and store wages. Collectively these items reduced the fiscal 2019 segment margin by 0.7 percentage points. Merchandise margin was essentially flat for fiscal 2019 compared to fiscal 2018 despite a significant increase in freight costs. Our U.S. e-commerce businesses, excluding the fiscal 2018 impairment charge, did not have a significant impact on year-over-year segment margin comparisons.STPSierra impairment charge. In addition, higher store payroll costs, primarily due to wage increases, and higher distribution costs, primarily due to processing more units, collectively reduced segment margin by approximately 0.5 percentage points. The fiscal 2018 segment margin was also negatively impacted by expense deleverage on the 1% comp sales but was favorably impacted by approximately 0.1 percentage point due to the 53rd week. Merchandise margin was flat for fiscal 2018 compared to fiscal 2017. Tjmaxx.com and STP,Our U.S. e-commerce businesses, excluding the impairment charge, did not have a significant impact on year-over-year segment margin comparisons.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 comp sales 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 did not have a significant impact on year-over-year segment margin comparisons.2019,2020, we expect to open approximately 6560 Marmaxx stores and 10 Sierra stores, which would increase selling square footage by approximately 2%.32 Fiscal Year Ended Dollars in millions February 3,
2018 January 28,
2017 January 30,
2016 $ 5,116.3 $ 4,404.6 $ 3,915.2 $ 674.5 $ 613.8 $ 549.3 13.2 % 13.9 % 14.0 % 4 % 6 % 8 % 667 579 526 4 — — 671 579 526 12,448 11,119 10,234 81 — — 12,529 11,119 10,234 Fiscal Year Ended In millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 5,787.4 $ 5,116.3 $ 4,404.6 Segment profit $ 671.9 $ 674.5 $ 613.8 Segment profit as a percentage of net sales 11.6 % 13.2 % 13.9 % Increase in comp sales 4 % 4 % 6 % Stores in operation at end of period HomeGoods 749 667 579 Homesense 16 4 — Total 765 671 579 Selling square footage at end of period (in thousands) HomeGoods 13,775 12,448 11,119 Homesense 343 81 — Total 14,118 12,529 11,119 on top of a 12% increase in fiscal 2017. The increase in fiscal 2018 reflectedreflects a 10% increase from new storenon-comp sales, a 4% increase from comp sales and a 2% increase due to the 53rd week. The sales increase of 12% in fiscal 2017 reflected a 6% increase from new store sales and a 6% increase from comp sales. Comp sales growth at HomeGoods for fiscal 20182019 was due to a 4%5% increase in customer traffic on top of a 5%4% increase in customer traffic in fiscal 2017. Comp sales growth in fiscal 2018 and fiscal 2017 was also due to an increase in units sold, which was partially offset by a decrease in the average ticket.2018.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 comp 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.2019,2020, we plan an increase of approximately 85HomeGoods65 HomeGoods stores and 15 Homesense stores, which would increase selling square footage by approximately 18%11%.33Foreign Segments: Fiscal Year Ended U.S. Dollars in millions February 3,
2018 January 28,
2017 January 30,
2016 $ 3,642.3 $ 3,171.1 $ 2,854.6 $ 530.1 $ 413.4 $ 375.3 14.6 % 13.0 % 13.1 % 5 % 8 % 12 % 264 255 245 117 106 101 73 57 41 454 418 387 5,780 5,629 5,470 2,179 1,984 1,900 1,621 1,307 975 9,580 8,920 8,345 Fiscal Year Ended U.S. dollars in millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 3,869.8 $ 3,642.3 $ 3,171.1 Segment profit $ 551.6 $ 530.1 $ 413.4 Segment profit as a percentage of net sales 14.3 % 14.6 % 13.0 % Increase in comp sales 4 % 5 % 8 % Stores in operation at end of period Winners 271 264 255 HomeSense 125 117 106 Marshalls 88 73 57 Total 484 454 418 Selling square footage at end of period (in thousands) Winners 5,862 5,780 5,629 HomeSense 2,323 2,179 1,984 Marshalls 1,885 1,621 1,307 Total 10,070 9,580 8,920 15%6% in fiscal 2018,2019, on top of an 11%a 15% increase in fiscal 2017.2018. The increase in sales for fiscal 2019 reflects comp sales growth of 4% and a 4% increase from non-comp sales, offset by a 2% negative impact of foreign currency translation. The increase in sales for fiscal 2018 reflectedreflects comp sales growth of 5%, a 5% increase from newnon-comp stores, a 3% from the positive impact of foreign currency translation and a 2% impact of the 53rd week. The comp sales increase in sales for fiscal 2017 reflected comp sales growth of 8% and2019 was due to a 5% increase from new stores offset by 2% from the negative impactin customer traffic on top of foreign currency translation. The comp sales increasesa 5% increase in customer traffic in fiscal 2018 and2018.2017 were2019 compared to 14.6% in fiscal 2018. The decrease in segment margin was primarily due to an increase in customer traffic.2018 compared to 13.0% in fiscal 2017.2018. The increase in segment margin was primarily due to the combination of an increase in merchandise margin of 0.6 percentage points, which benefittedbenefited from the year-over-year increase in the Canadian dollar, and expense leverage on the strong comp sales. The increase in the segment margin also included a favorable impact of 0.3 percentage points due to foreign currency, primarily themark-to-market impact of the inventory derivatives. The fiscal 2018 segment margin also benefittedbenefited from the 53rdweek, which lifted the segment margin by approximately 0.1 percentage point.Segment profit margin decreased 0.1 percentage point to 13.0% in fiscal 2017. The decline in segment margin was driven by a decrease in merchandise margin and higher supply chain and distribution center costs, which included the opening of a new distribution center. The decline in merchandise margin 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 comp 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 gains and losses result from the timing and settlement of payables denominated in currencies other than the Canadian Dollar.2019,2020, we plan an increase of approximately 30 stores in Canada, which would increase selling square footage by approximately 6%5%.34 Fiscal Year Ended U.S. Dollars in millions February 3,
2018 January 28,
2017 January 30,
2016 $ 4,856.9 $ 4,362.0 $ 4,226.9 $ 249.2 $ 235.5 $ 316.9 5.1 % 5.4 % 7.5 % 2 % 2 % 4 % 540 503 456 55 44 39 38 35 35 633 582 530 11,379 10,787 9,970 883 714 639 714 667 667 12,976 12,168 11,276 Fiscal Year Ended U.S. dollars in millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales $ 5,257.8 $ 4,856.9 $ 4,362.0 Segment profit $ 285.8 $ 249.2 $ 235.5 Segment profit as a percentage of net sales 5.4 % 5.1 % 5.4 % Increase in comp sales 3 % 2 % 2 % Stores in operation at end of period T.K. Maxx 567 540 503 Homesense 68 55 44 T.K. Maxx Australia 44 38 35 Total 679 633 582 Selling square footage at end of period (in thousands) T.K. Maxx 11,693 11,379 10,787 Homesense 1,029 883 714 T.K. Maxx Australia 814 714 667 Total 13,536 12,976 12,168 11%8% in fiscal 20182019 on top of a 3%an 11% increase in fiscal 2017.2018. The increase in sales for fiscal 2019 reflects a 4% increase from non-comp sales, comp sales growth of 3%, and a 1% positive impact from foreign currency translation. The increase in comp sales for fiscal 2019 was driven by a 4% increase in customer traffic. E-commerce sales represent less than 3% of TJX International’s net sales in fiscal 2019 and fiscal 2018. The increase in fiscal 2018 reflectedreflects a 7% increase from new stores,non-comp sales, comp sales growth of 2%, and a 2% benefit from the 53rdweek. Foreign currency translation had a neutral impact on fiscal 2018 sales growth. The increase in comp sales for fiscal 2018 was primarily driven by an increase in customer traffic.E-commerce sales represent less than 3% of TJX International’s net sales.fiscal 2017 reflectedsegment margin was driven by favorable merchandise margins of 0.4 percentage points, primarily due to lower markdowns, along with the favorable reserve adjustment relating to a 12% increase from new store sales (which includes a full fiscal year of T.K. Maxx in Australia)wage audit and a 2% increase from comp sales,expense leverage on occupancy costs. These improvements were partially offset by higher supply chain costs associated with the unfavorable impact from currency translationopening of 11%. The increasea new distribution center in comp sales for fiscal 2017 was primarily driven2018 and higher store payroll, which collectively reduced segment margin by an increase in customer traffic.forin fiscal 2018 compared to 5.4% forin fiscal 2017. The declinedecrease in segment margin was driven by higher supply chain costs associated with the opening of a new distribution center and higher store payroll, which collectively reduced segment margin by approximately 0.7 percentage points. Segment margin was also negatively impacted by expense deleverage on the 2% comp sales growth. These declines in segment margin were partially offset by a favorable impact of 0.4 percentage points due to foreign currency, primarily themark-to-market impact of the inventory derivatives as well as the benefit of the 53rdweek, which lifted the segment margin by approximately 0.2 percentage points.Segment profit margin decreased 2.1% percentage points to 5.4% in fiscal 2017 compared to fiscal 2016. The inclusion of T.K. Maxx in Australia 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 themark-to-market adjustment of inventory derivatives, higher store payroll costs and expense deleverage on the lower comp sales growth.3550 stores to TJX International in fiscal 2019,2020, which would increase selling square footage by approximately 5%.General Corporate Expense: Fiscal Year Ended Dollars in millions February 3,
2018 January 28,
2017 January 30,
2016 $ 515.0 $ 408.2 $ 395.6 35 Fiscal Year Ended In millions February 2,
2019February 3,
2018January 28,
2017 (53 weeks) General corporate expense $ 545.0 $ 515.0 $ 408.2 associates,Associates, additional retirement plan contributions and contributions to TJX’s charitable foundations, which totaled $100 million in fiscal 2018.The increase in general corporate expense for fiscal 2017 was primarily driven by incremental systems and technology costs as well as increases in compensation, benefits and professional services. These increases were partially offset by the impact of lower contributions to the TJX charitable foundations in fiscal 2017 as compared to fiscal 2016.Liquidity and Capital Resources3, 2018,2, 2019, there were no short-term bank borrowings or commercial paper outstanding.Long TermLong-Term Debt and Credit Lines of Notes to Consolidated Financial Statements, are more than adequate to meet our operating needs over the next fiscal year.3, 2018,2, 2019, TJX held $2.8$3.0 billion in cash and $0.5 billion in short-term investments.cash. Approximately $1.8$1.2 billion of our cash was held by our foreign subsidiaries with $398.6$420.6 million held in countries where we provisionally intend to indefinitely reinvest any undistributed earnings. TJX has provided for all applicable state and foreign withholding taxes on all undistributed earnings of its foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Vietnam through February 3, 2018.2, 2019. If we repatriate cash from such subsidiaries, we should not incur additional tax expense and our cash would be reduced by the amount of withholding taxes paid. We expect to repatriate more than $1 billion in cash from our subsidiary in Canada during fiscal 2019. Additionally, as part of the 2017 Tax Act we recorded a transition tax related to the undistributed earnings of our foreign subsidiaries of $193 million which is payable over 8 years.activities:Activities2017 and $3.0 billion in fiscal 2016.2017. The cash generated from operating activities in each of these fiscal years was largely due to operating earnings.changetiming in our fiscal year end dates. The change in accrued expenses and other liabilities was driven by a reduction in sales taxes and income taxes payable, primarily due to timing of payments and benefits associated with the 2017 Tax Act, as well as a contribution of $100 million to the Company’s defined benefit pension plan in fiscal 2018, as compared to $50 million last year.Operating cash flows for fiscal 2017 increased by $0.7 billion compared to fiscal 2016. Net income, adjusted fornon-cash items and the early extinguishment of debt, increased operating cash flows in fiscal 2017 as compared to fiscal 2016 by $0.1 billion. The remaining increase2017.operatinginvesting activities resulted in net cash flows was primarily due to a $0.3outflows of $0.6 billion increase in cash flows related to merchandise inventory, net of related accounts payable and a36$0.2 billion increase in cash flows related to accrued expenses and other liabilities. The positive cash flow impact from the change in inventory, net of related 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 for2019, $1.0 billion in fiscal 2016.2018 and $1.2 billion in fiscal 2017. The positive impact from accrued expensescash outflows were primarily driven by capital expenditures and, other liabilities was driven primarilyin addition, the activity in fiscal 2019 reflects the liquidation of short-term investments by increased liabilities for deferred compensation, gift cards and deferred revenue, sales taxes and income taxes payable.Investing activities:TJX Canada as a result of a repatriation of earnings completed during the second quarter.below: Fiscal Year Ended In millions February 3,
2018 January 28,
2017 January 30,
2016 $ 226.0 $ 191.2 $ 199.1 335.2 274.8 299.7 496.4 558.7 390.6 $ 1,057.6 $ 1,024.7 $ 889.4 Fiscal Year Ended In millions New stores $ 201.2 $ 226.0 $ 191.2 Store renovations and improvements 347.2 335.2 274.8 Office and distribution centers 576.7 496.4 558.7 Total capital expenditures $ 1,125.1 $ 1,057.6 $ 1,024.7 20192020 will be approximately $1.4$1.5 billion, including approximately $800$900 million for our offices and distribution centers (including buying and merchandising systems and other information systems) to support growth, approximately $400 million for store renovations and approximately $200 million for new stores. We plan to fund these expenditures through internally generated funds.2018,2019, we purchased $0.9$0.2 billion of investments, compared to $0.7$0.9 billion in fiscal 2017.2018. Additionally, $0.9$0.6 billion of investments were sold or matured during fiscal 20182019 compared to $0.5$0.9 billion 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.activities:Activities2017 and $2.2 billion in fiscal 2016.2017. These cash outflows were primarily driven by debt transactions, equity repurchases partially offset by issuances, dividend payments and dividend payments.DebtDuring the fiscal 2017 third quarter we received 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. The remainder of the proceeds from the notes offering were used for working capital and other general corporate purposes.For further information regarding debt see Note J – Long Term Debt and Credit Lines of Notes to Consolidated Financial Statements.22.351.8 million shares of its common stock at a cost of $1.7$2.5 billion during fiscal 2018,2019, on a “trade date basis.” TJX reflects stock repurchases in its financial statements on a “settlement date” or cash basis. Under our stock repurchase programs, we spent $2.4 billion to repurchase 50.8 million shares of our stock in fiscal 2019, $1.6 billion to repurchase 22.244.4 million shares of our stock in fiscal 2018 and $1.7 billion to repurchase 22.344.6 million shares of our stock in fiscal 2017 and $1.8 billion to repurchase 26.6 million shares of our stock in fiscal 2016.2018, we announced that2019, our Board of Directors authorizedapproved an additional repurchase program authorizing the repurchase of up to an additional $3.0$1.5 billion of TJX stock. We currently plan to repurchase approximately $2.5$1.75 billion to $3.0$2.25 billion of stock under our stock repurchase programs in fiscal 2019.2020. We37$1.25$0.78 per share in fiscal 2019, $0.625 per share in fiscal 2018 $1.04and $0.52 per share in fiscal 2017 and $0.84 per share in fiscal 2016.2017. Cash payments for dividends on our common stock totaled $923 million in fiscal 2019, $764 million in fiscal 2018 and $651 million in fiscal 2017 and $544 million in fiscal 2016.2017. We also received proceeds from the exercise of employee stock options of $255 million in fiscal 2019, $134 million in fiscal 2018 and $164 million in fiscal 2017 and $132 million in fiscal 2016.2017. We expect to pay quarterly dividends for fiscal 20192020 of $0.39$0.23 per share, or an annual dividend of $1.56$0.92 per share, subject to the declaration and approval of our Board of Directors. This would represent a 25%an 18% increase over the per share dividends declared and paid in fiscal 2018.obligations:Obligations3, 2018,2, 2019, we had known contractual obligations under long-term debt arrangements (including current installments), other long-term obligations, operating leases for property and equipment and purchase obligations as follows (in thousands): Payments Due by Period Total $ 2,960,726 $ 83,782 $ 166,810 $ 886,782 $ 1,823,352 9,494,751 1,600,536 2,924,504 2,233,360 2,736,351 3,689,892 3,474,158 153,249 62,485 — $ 16,145,369 $ 5,158,476 $ 3,244,563 $ 3,182,627 $ 4,559,703 In thousands Payments Due by Period Tabular Disclosure of Contractual Obligations Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years $ 2,537,813 $ 55,625 $ 850,938 $ 563,750 $ 1,067,500 9,791,971 1,676,700 3,044,822 2,295,604 2,774,845 3,843,184 3,666,288 155,963 20,933 — Total obligations $ 16,172,968 $ 5,398,613 $ 4,051,723 $ 2,880,287 $ 3,842,345 (1) Includes estimated interest costs, financing lease obligations and other long-term liabilities.costs.(2) Reflects minimum rent. Does not include costs for insurance, real estate taxes, other operating expenses and, in some cases, rentals based on a percentage of sales; these items totaled approximatelyone-third of the total minimum rent for fiscal 2018.2019.(3) Includes estimated obligations under purchase orders for merchandise and under agreements for capital items, products and services used in our business, including executive employment and other agreements. Excludes agreements that can be cancelledcanceled without penalty.$442.6$449.1 million for employee compensation and benefits and $44.8$235.5 million for uncertain tax positions.Critical Accounting Policiesaccounting principles generally accepted in the United States of America (“GAAP”)GAAP which require us to make certain estimates and judgments that impact our reported results. These judgments and estimates are based on historical experience and other factors which we continually review and believe are reasonable. We consider our most critical accounting policies, involving management estimates and judgments,judgments, to be those relating to the areas described below.valuation:ValuationAustralia and STP.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 acost-to-retail ratio and applying it to the retail value of inventory. It involves management estimates with regard to markdowns and inventory shrinkage. Under the retail method, permanent markdowns are reflected in inventory valuation when the price of an item is reduced. Typically, a significant area of judgment in the retail method is the amount and timing of permanent markdowns. However, as a normal business practice, we have a specific policy as to when and how markdowns are to be taken, greatly reducing management’s discretion and the need for management estimates as to markdowns. Inventory shrinkage requires estimating a shrinkage rate for interim periods, but we take a full physical inventory near the fiscal year end to determine shrinkage at year end. Historically, the variance between estimated shrinkage and38long-lived assets, goodwillLong-lived Assets, Goodwill and tradenames:Tradenamestestevaluate our long-lived assets, goodwill and tradenames for indicators of impairment at least annually for impairment andin the fourth quarter of each fiscal year or whenever events or changes in circumstances occur that would indicate that thetheir carrying amounts of those assets may not be impaired.recoverable. Significant judgment is involved in projecting the cash flows of individual stores, as well as of our business units, which involve a number of factors including historical trends, recent performance and general economic assumptions. If we determine that an impairment of long-lived assets or tradenames has occurred, we record an impairment charge equal to the excess of the carrying value of those assets over the estimated fair value of the assets. If we determine that an impairment of goodwill has occurred, we record an impairment charge equal to the excess of the carrying value of the applicable reporting unit over the estimated fair value of the reporting unit, but not in excess of the carrying amount of goodwill. 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 of STP. As a result of a reduction in the projected revenue growth rates of STP the estimated fair value of this reporting unit was less than its carrying value, and therefore we have recorded an impairment charge of $97.3 million for the goodwill recorded at the time of acquisition. We continue to transition STP from a promotional model to theoff-price model and expand its store base. Although we are optimistic about the future of STP, since its acquisition, operating results have not met our short term expectations. The operating results of STP are not material to TJX’s consolidated results.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 2018 pension cost for our funded plan would have increased by approximately $7 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 2018 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, any 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 2018, we funded our qualified pension plan with a voluntary contribution of $100 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 theper-option value of our most recent option award by 4% while a decrease of the same amount would decrease theper-option value of our most recent option award by 5%.Casualty insurance:Our casualty insurance program is a self-insured program which requires us to estimate the total claims we would incur as a component of our annual insurance cost. The estimated claims are developed, with the assistance of an actuary, based on historical experience and other factors. These estimates involve significant judgments and assumptions, and actual results could differ from these estimates. If our39estimate for the claims component of our casualty insurance for fiscal 2018 were to change by 5%, the fiscal 2018pre-tax cost would increase or decrease by approximately $5 million. A large portion of these claims is funded with anon-refundable payment during the policy year, offsetting our estimated claims accrual. We had a net accrual of $39.6 million for the unfunded portion of our casualty insurance program as of February 3, 2018.uncertain tax positions:Uncertain Tax Positionstax reform. Finally, foreign governments may enact tax laws in response to the 2017 Tax Act that could result in further changes to global taxation and materially affect our financial position and results of operations.Act. Final resolutions of our tax positions or changes in accruals for uncertain tax positions could result in additional tax expense or benefit and could have a material impact on our results of operations of the period in which an examination or proceeding is resolved or in the period in which a changed outcome becomes probable and reasonably estimable.completecontinue our analysis of the 2017 Tax Act, collect and prepare necessary data, and interpret any additional guidance, we may make adjustments to provisional amounts that we have recorded that may materially impact our provision for income taxes in the period in which the adjustments are made.contingencies:Contingencies40ITEM 7A.Quantitative and Qualitative Disclosure about Market Risk and January 28, 2017, the analysis indicated that such an adverse movement would not have a material effect on our consolidated financial position but could have reduced ourpre-tax income by approximately $78$84 million and $65$78 million, in fiscal years 2019 and 2018, and 2017, respectively.F-36 F-38 of this annual report onForm 10-K.41ITEM 9A.Controls and ProceduresEffective January 26, 2018, we implemented a new merchandise accounting system at TJX Europe that resulted in material changes to our process and procedures affecting internal control over financial reporting. Otherwise, there20182019 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.—– —– —– 3, 20182, 2019 based on criteria established inInternal Control—Integrated Framework 2013issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, management concluded that its internal control over financial reporting was effective as of February 3, 2018.2, 2019.423, 2018,2, 2019, and has issued an attestation report on the effectiveness of our internal control over financial reporting included herein.433, 20182, 2019 (Proxy Statement). The other information required by this Item and not given in this Item will appear under the headings “Election of Directors” and “Corporate Governance,” including in “Board Committees and Meetings,” and “Audit Committee Report” and in “Beneficial Ownership” in “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement, which sections are incorporated herein by reference.44Financial Statement SchedulesIn thousands Balance
Beginning
of Period Amounts
Charged to
Net Income Write-Offs
Against
Reserve
Period $ 43,236 $ 1,539,854 $ 1,537,945 $ 45,145 $ 41,723 $ 1,483,146 $ 1,481,633 $ 43,236 $ 35,476 $ 1,497,963 $ 1,491,716 $ 41,723 $ 30,810 $ 96,975 $ 88,214 $ 39,571 $ 19,686 $ 87,110 $ 75,986 $ 30,810 $ 14,303 $ 80,738 $ 75,355 $ 19,686 45b) ExhibitsIn thousands Balance Beginning of Period Amounts Charged to Net Income Write-Offs Against Reserve Sales Return Reserve: $ 103,243 $ 4,861,960 $ 4,861,703 $ 103,500 $ 43,236 $ 2,073,146 $ 2,071,237 $ 45,145 $ 41,723 $ 1,926,489 $ 1,924,976 $ 43,236 (1) Upon adoption of Revenue Recognition (Topic 606) in the first quarter of fiscal 2019, the sales return reserve balance now reflects the gross sales amount whereas prior years' reflect the sales net of estimated value of merchandise to be returned. (2) During fiscal 2019, the Company identified that while the net sales return reserve balances recorded on our balance sheets and in this schedule for fiscal 2018 and 2017 were properly stated, the amounts disclosed as “Amounts Charged to Net Income” and “Write Offs Against Reserve” were understated by $0.5 billion and $0.4 billion in fiscal 2018 and fiscal 2017, respectively. The Company concluded these errors are not material to prior periods, however, the amounts disclosed in the above schedule have been revised to reflect the correct activity. Incorporate by Reference Exhibit No. Description Form Exhibit No. 3(i).1 3(ii).1 8-K 3.1 2/5/2018 4.01 S-3 4.1 4/2/2009 4.02 8-K 4.2 5/2/2013 4.03 8-K 4.2 6/5/2014 4.04 8-K 4.1 9/12/2016 4.05 8-K 4.2 9/12/2016 10.01 10-Q 10.2 12/4/2018 10.02 10-Q 10.3 12/4/2018 10.03 10.04 10-Q 10.4 12/4/2018 10.05 10.06 10-K 10.4 3/28/2017 10.07 10-K 10.3 4/4/2018 Incorporate by Reference Exhibit No. Description Form Exhibit No. 10.08 10-K 10.4 4/4/2018 10.09 10-Q 10.6 12/4/2018 10.10 10.11 10-K 10.5 4/4/2018 10.12 10-Q 10.5 12/4/2018 10.13 10.14 10-K 10.6 4/4/2018 10.15 10-Q 10.7 12/4/2018 10.16 10.17 10-K 10.7 4/4/2018 10.18 10-Q 10.8 12/4/2018 10.19 10.20 10-Q 10.1 5/31/2013 10.21 10-Q 10.1 8/26/2016 10.22 10-K 10.8 3/28/2017 10.23 10.24 10-Q 10.1 12/4/2018 10.25 10-Q 12.1 12/1/2009 10.26 10-Q 12.2 12/1/2009 10.27 10-Q 10.2 11/24/2010 10.28 10-K 10.19 3/27/2012 10.29 10-Q 10.1 11/29/2012 10.30 10-Q 10.2 11/29/2012 10.31 10-Q 10.1 12/3/2013 10.32 10-Q 10.2 12/3/2013 10.33 10-Q 10.4 12/2/2014 10.34 10-Q 10.5 12/2/2014 10.35 10-Q 10.1 12/1/2015 10.36 10-Q 10.2 12/1/2015 10.37 10-Q 10.1 5/27/2016 10.38 10-Q 10.1 5/26/2017 Incorporate by Reference Exhibit No. Description Form Exhibit No. 10.39 10-K 10.18 3/29/2016 10.40 10-K 10.19 3/29/2016 10.41 10-Q 10.1 6/1/2018 10.42 10-Q 10.2 6/1/2018 10.43 10-K 10.20 3/31/2015 10.44 10-Q 10.2 8/26/2016 10.45 10.46 10-K 10.22 4/2/2013 10.47 10-K 10.9 4/29/1999 10.48 10-K 10.10 4/28/2000 10.49 10-K 10.17 3/29/2006 10.50 10-K 10.17 3/31/2009 10.51 10-Q 10.3 5/29/2015 10.52 10-K 10.25 3/31/2015 10.53 10-K 10.25 3/29/2016 10.54 The Form of TJX Indemnification Agreement for its executive officers and directors*(p) 10-K 10(r) 4/27/1990 10.55 The Trust Agreement dated as of April 8, 1988 between TJX and State Street Bank and Trust Company*(p) 10-K 10(y) 4/28/1988 10.56 The Trust Agreement dated as of April 8, 1988 between TJX and Fleet Bank (formerly Shawmut Bank of Boston, N.A.)*(p) 10-K 10(z) 4/28/1988 10.57 10-Q 10.5 10/31/2015 21 23 24 31.1 31.2 32.1 32.2 101 The following materials from The TJX Companies, Inc.’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Consolidated Financial Statements 4610.9The Stock Incentive Plan Rules for U.K. Employees, as amended April 7, 2009,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,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,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, 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,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,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,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,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,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,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,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,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,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,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, 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,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,incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended May 4, 2013.*10.19The Form of Performance-Based Deferred Stock Award granted under the Stock Incentive Plan as of March 29, 2016,incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended April 30, 2016.*10.20The Form of Performance-Based Deferred Stock award granted under the Stock Incentive Plan as of April 4, 2017,incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed for the quarter ended April 29, 2017.*4710.21The Performance-Based Restricted Stock Award granted under the Stock Incentive Plan on January 29, 2016 to Carol Meyrowitz,incorporated herein by reference to Exhibit 10.18 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.22The Restricted Stock Unit Award granted under the Stock Incentive Plan on January 29, 2016 to Ernie Herrman,incorporated herein by reference to Exhibit 10.19 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.23The Form of Deferred Stock Award for Directors granted under the Stock Incentive Plan, 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,incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed for the quarter ended July 30, 2016.*10.24Description of Director Compensation Arrangements, filed herewith.*10.25The Management Incentive Plan and Long Range Performance Incentive Plan (2013 Restatement),incorporated herein by reference to Exhibit 10.22 to the Form 10-K filed for the fiscal year ended February 2, 2013.*10.26The General Deferred Compensation Plan (1998 Restatement) (the GDCP) and First Amendment to the GDCP, effective January 1, 1999,incorporated herein by reference to Exhibit 10.9 to the Form 10-K for the fiscal year ended January 30, 1999. The Second Amendment to the GDCP, effective January 1, 2000,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,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,incorporated herein by reference to Exhibit 10.17 to the Form 10-K filed for the fiscal year ended January 31, 2009.*10.27The Supplemental Executive Retirement Plan (2015 Restatement),incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed for the quarter ended May 2, 2015.*10.28The Executive Savings Plan (As Amended and Restated, Effective January 1, 2015) (the ESP),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,incorporated herein by reference to Exhibit 10.25 to the Form 10-K filed for the fiscal year ended January 30, 2016.*10.29The Canadian Executive Savings Plan (effective November 1, 1999) of Winners Merchants International, LP (successor to Winners Apparel Ltd.),incorporated herein by reference to Exhibit 10.26 to the Form 10-K filed for the fiscal year ended February 2, 2013. Amendment to The Canadian Executive Savings Plan effective January 1, 2018,filed herewith.*10.30The Form of TJX Indemnification Agreement for its executive officers and directors, incorporated herein by reference to Exhibit 10(r) to the Form 10-K filed for the fiscal year ended January 27, 1990.*(p)10.31The Trust Agreement dated as of April 8, 1988 between TJX and State Street Bank and Trust Company, incorporated herein by reference to Exhibit 10(y) to the Form 10-K filed for the fiscal year ended January 30, 1988.*(p)10.32The Trust Agreement dated as of April 8, 1988 between TJX and Fleet Bank (formerly Shawmut Bank of Boston, N.A.), incorporated herein by reference to Exhibit 10(z) to the Form 10-K filed for the fiscal year ended January 30, 1988.*(p)10.33The Trust Agreement for Executive Savings Plan dated as of October 23, 2015 between TJX and Vanguard Fiduciary Trust Company,incorporated herein by reference to Exhibit 10.5 to the Form 10-Q filed for the quarter ended October 31, 2015.*21Subsidiaries of TJX, filed herewith.23Consent of Independent Registered Public Accounting Firm, filed herewith.24Power of Attorney given by the Directors and certain Executive Officers of TJX, filed herewith.31.1Certification Statement of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.4831.2Certification Statement of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.32.1Certification Statement of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.32.2Certification Statement of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.101The following materials from The TJX Companies, Inc.’s Annual Report on Form 10-K for the fiscal year ended February 3, 2018, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Shareholders’ Equity, and (vi) Notes to Consolidated Financial Statements.*Management contract or compensatory plan or arrangement.(p) Paper filing. applicable49 THE TJX COMPANIES, INC. /s/ SCOTT GOLDENBERG Dated: April 4, 20183, 2019 Scott Goldenberg, Chief Financial Officer /s/ SCOTT GOLDENBERG Ernie Herrman, Chief Executive Officer, President and Director (Principal (Principal Executive Officer) /s/ SCOTT GOLDENBERGAMY B. LANE* Zein Abdalla, Director AMY B. LANE*JOSE B. ALVAREZ*José B. Alvarez, Director ALAN M. BENNETT* CAROL MEYROWITZ* Alan M. Bennett, Director Carol Meyrowitz, Executive Chairman of the Board of Directors ALAN M. BENNETT*Alan M. Bennett, Director ROSEMARY T. BERKERY* JACKWYN L. NEMEROV* Rosemary T. Berkery, Director Jackwyn L. Nemerov, Director JOHN F. O’BRIEN* David T. Ching, Director JOHN F. O’BRIEN*WILLOW B. SHIRE* Michael F. Hines, Director WILLOW B. SHIRE* *BY /s/ SCOTT GOLDENBERG April 4, 20183, 2019 502017 and January 30, 2016.2017.F-2Consolidated Financial Statements: Consolidated Financial Statements:F-9Financial Statement Schedules: Financial Statement Schedules:45F-1ToThe and January 28, 2017, and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended February 3, 2018,2, 2019, including the related notes and financial statement schedule listedof valuation and qualifying accounts for each of the three years in the accompanying index listed withinperiod ended February 2, 2019 appearing under Item 15 (a) (collectively referred to as the “consolidated financial statements”).We. We also have audited the Company’s internal control over financial reporting as of February 3, 2018,2, 2019, based on criteria established inInternal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).consolidatedfinancialconsolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of February 2, 2019 and February 3, 2018, and January 28, 2017, and the results of theirits operations and theirits cash flows for each of the three years in the period ended February 3, 20182, 2019 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 3, 2018,2, 2019, based on criteria established inInternal Control - Integrated Framework (2013) issued by the COSO.consolidatedfinancialconsolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(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.F-24, 2018F-3 Fiscal Year Ended Amounts in thousands except per share amounts (53 weeks) $ 35,864,664 $ 33,183,744 $ 30,944,938 25,502,167 23,565,754 22,034,523 6,375,071 5,768,467 5,205,715 99,250 — — — 51,773 — — 31,173 — 31,588 43,534 46,400 3,856,588 3,723,043 3,658,300 1,248,640 1,424,809 1,380,642 $ 2,607,948 $ 2,298,234 $ 2,277,658 $ 4.10 $ 3.51 $ 3.38 636,827 655,647 673,484 $ 4.04 $ 3.46 $ 3.33 646,105 664,432 683,251 $ 1.25 $ 1.04 $ 0.84 Fiscal Year Ended Amounts in thousands except per share amounts February 2
2019February 3
2018January 28
2017 (53 weeks) Net sales $ 38,972,934 $ 35,864,664 $ 33,183,744 Cost of sales, including buying and occupancy costs 27,831,177 25,502,167 23,565,754 Selling, general and administrative expenses 6,923,564 6,375,071 5,768,467 Impairment of goodwill and other long-lived assets, related to Sierra — 99,250 — Loss on early extinguishment of debt — — 51,773 Pension settlement charge 36,122 — 31,173 Interest expense, net 8,860 31,588 43,534 Income before provision for income taxes 4,173,211 3,856,588 3,723,043 Provision for income taxes 1,113,413 1,248,640 1,424,809 Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Basic earnings per share: Net income $ 2.47 $ 2.05 $ 1.75 Weighted average common shares – basic 1,241,153 1,273,654 1,311,294 Diluted earnings per share: Net income $ 2.43 $ 2.02 $ 1.73 Weighted average common shares – diluted 1,259,252 1,292,209 1,328,864 F-4 Fiscal Year Ended Amounts in thousands (53 weeks) $ 2,607,948 $ 2,298,234 $ 2,277,658 211,752 (52,611 ) (143,923 ) 24,691 (11,239 ) 9,629 — 18,804 — 696 684 684 15,228 17,608 20,523 252,367 (26,754 ) (113,087 ) $ 2,860,315 $ 2,271,480 $ 2,164,571 Fiscal Year Ended In thousands February 2
2019February 3
2018January 28
2017 (53 weeks) Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Additions to other comprehensive income: Foreign currency translation adjustments, net of related tax benefit of $8,233 in fiscal 2019, and provisions of $36,929 and $25,656 in fiscal 2018 and fiscal 2017, respectively (192,664 ) 211,752 (52,611 ) Gain on net investment hedges, net of related tax provision of $7,113 in fiscal 2019 19,538 — — Recognition of net gains/losses on benefit obligations, net of related tax benefit of $19,813 in fiscal 2019, provision of $8,989 in fiscal 2018 and benefit of $7,394 in fiscal 2017 (54,420 ) 24,691 (11,239 ) Reclassifications from other comprehensive income to net income: Pension settlement charge, net of related tax provision of $9,641 in fiscal 2019 and $12,369 in fiscal 2017 26,481 — 18,804 Amortization of loss on cash flow hedge, net of related tax provisions of $304, $438 and $450 in fiscal 2019, 2018 and 2017, respectively 847 696 684 Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $4,280, $9,592, and $11,584 in fiscal 2019, 2018 and 2017, respectively 11,756 15,228 17,608 Other comprehensive (loss) income, net of tax (188,462 ) 252,367 (26,754 ) Total comprehensive income $ 2,871,336 $ 2,860,315 $ 2,271,480 F-5 Fiscal Year Ended Amounts in thousands except share amounts February 3,
2018 January 28,
2017 $ 2,758,477 $ 2,929,849 506,165 543,242 327,166 258,831 4,187,243 3,644,959 706,676 373,893 8,485,727 7,750,774 5,006,053 4,532,894 6,558 6,193 100,069 195,871 459,608 398,076 $ 14,058,015 $ 12,883,808 $ 2,488,373 $ 2,230,904 2,522,961 2,320,464 114,203 206,288 5,125,537 4,757,656 1,320,505 1,073,954 233,057 314,000 2,230,607 2,227,599 — — 628,009 646,319 — — (441,859 ) (694,226 ) 4,962,159 4,558,506 5,148,309 4,510,599 $ 14,058,015 $ 12,883,808 Fiscal Year Ended Amounts in thousands except share amounts February 2,
2019February 3,
2018ASSETS Current assets: Cash and cash equivalents $ 3,030,229 $ 2,758,477 Short-term investments — 506,165 Accounts receivable, net 346,298 327,166 Merchandise inventories 4,579,033 4,187,243 Prepaid expenses and other current assets 513,662 706,676 Total current assets 8,469,222 8,485,727 Net property at cost 5,255,208 5,006,053 Non-current deferred income taxes, net 6,467 6,558 Goodwill 97,552 100,069 Other assets 497,580 459,608 TOTAL ASSETS $ 14,326,029 $ 14,058,015 LIABILITIES Current liabilities: Accounts payable $ 2,644,143 $ 2,488,373 Accrued expenses and other current liabilities 2,733,076 2,522,961 Federal, state and foreign income taxes payable 154,155 114,203 Total current liabilities 5,531,374 5,125,537 Other long-term liabilities 1,354,242 1,320,505 Non-current deferred income taxes, net 158,191 233,057 Long-term debt 2,233,616 2,230,607 Commitments and contingencies (See Note L and Note N) SHAREHOLDERS’ EQUITY Preferred stock, authorized 5,000,000 shares, par value $1, no shares issued — — Common stock, authorized 1,800,000,000 shares, par value $1, issued and outstanding 1,217,182,508 and 1,256,018,044, respectively 1,217,183 1,256,018 Additional paid-in capital — — Accumulated other comprehensive (loss) income (630,321 ) (441,859 ) Retained earnings 4,461,744 4,334,150 Total shareholders’ equity 5,048,606 5,148,309 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 14,326,029 $ 14,058,015 F-6 Fiscal Year Ended Amounts in thousands February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks) $ 2,607,948 $ 2,298,234 $ 2,277,658 725,957 658,796 616,696 8,871 5,207 3,383 (137,440 ) (5,503 ) 31,204 101,362 102,251 94,107 99,250 — — — 51,773 — — 31,173 — — (70,999 ) (64,680 ) (62,358 ) (23,235 ) (27,357 ) (450,377 ) 11,862 (506,633 ) (317,850 ) (9,600 ) (40,103 ) 205,111 48,253 216,265 334,522 389,399 284,929 (94,492 ) 146,766 68,014 5,120 (7,518 ) 3,432 3,025,624 3,626,859 2,956,915 (1,057,617 ) (1,024,747 ) (889,380 ) (861,256 ) (716,953 ) (798,008 ) 906,137 529,146 681,377 — (2,324 ) (57,104 ) (1,012,736 ) (1,214,878 ) (1,063,115 ) — 992,540 — — (425,584 ) — — (9,921 ) — (3,138 ) — — — (3,150 ) — (1,644,581 ) (1,699,998 ) (1,828,297 ) 133,687 164,190 132,033 (19,274 ) (24,965 ) (19,572 ) — 70,999 64,680 (764,040 ) (650,988 ) (544,271 ) (2,297,346 ) (1,586,877 ) (2,195,427 ) 113,086 9,272 (96,675 ) (171,372 ) 834,376 (398,302 ) 2,929,849 2,095,473 2,493,775 $ 2,758,477 $ 2,929,849 $ 2,095,473 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Cash flows from operating activities: Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 819,655 725,957 658,796 Loss on property disposals and impairment charges 17,653 8,871 5,207 Deferred income tax (benefit) (88,594 ) (137,440 ) (5,503 ) Share-based compensation 103,557 101,362 102,251 Impairment of goodwill and long-lived assets, related to Sierra — 99,250 — Loss on early extinguishment of debt — — 51,773 Pension settlement charge 36,122 — 31,173 Excess tax benefits from share-based compensation — — (70,999 ) Changes in assets and liabilities: (Increase) in accounts receivable (23,532 ) (62,358 ) (23,235 ) (Increase) decrease in merchandise inventories (465,429 ) (450,377 ) 11,862 Decrease (increase) in prepaid expenses and other current assets 236,342 (317,850 ) (9,600 ) Increase in accounts payable 198,212 205,111 48,253 Increase in accrued expenses and other liabilities 169,418 334,522 389,399 Increase (decrease) in income taxes payable 40,965 (94,492 ) 146,766 Other (15,708 ) 5,120 (7,518 ) Net cash provided by operating activities 4,088,459 3,025,624 3,626,859 Cash flows from investing activities: Property additions (1,125,139 ) (1,057,617 ) (1,024,747 ) Purchases of investments (161,625 ) (861,256 ) (716,953 ) Sales and maturities of investments 636,560 906,137 529,146 Other 26,652 — (2,324 ) Net cash (used in) investing activities (623,552 ) (1,012,736 ) (1,214,878 ) Cash flows from financing activities: Proceeds from issuance of long-term debt — — 992,540 Cash payments for extinguishment of debt — — (425,584 ) Cash payments for debt issuance expenses — — (9,921 ) Cash payments on build to suit leases (7,115 ) (3,138 ) — Cash payments for rate lock agreement — — (3,150 ) Cash payments for repurchase of common stock (2,406,997 ) (1,644,581 ) (1,699,998 ) Proceeds from issuance of common stock 255,241 133,687 164,190 Cash payments of employee tax withholdings for performance based stock awards (16,014 ) (19,274 ) (24,965 ) Excess tax benefits from share-based compensation — — 70,999 Cash dividends paid (922,596 ) (764,040 ) (650,988 ) Net cash (used in) financing activities (3,097,481 ) (2,297,346 ) (1,586,877 ) Effect of exchange rate changes on cash (95,674 ) 113,086 9,272 Net increase (decrease) in cash and cash equivalents 271,752 (171,372 ) 834,376 Cash and cash equivalents at beginning of year 2,758,477 2,929,849 2,095,473 Cash and cash equivalents at end of year $ 3,030,229 $ 2,758,477 $ 2,929,849 F-7 Common Stock
Capital
Other
Comprehensive
Income (Loss)
Earnings Amounts in thousands Shares Par Value
$1 684,733 $ 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 — — — — 2,607,948 2,607,948 — — — 252,367 — 252,367 — — — — (793,878 ) (793,878 ) — — 101,362 — — 101,362 3,895 3,895 110,597 — — 114,492 (22,205 ) (22,205 ) (211,959 ) — (1,410,417 ) (1,644,581 ) 628,009 $ 628,009 $ — $ (441,859 ) $ 4,962,159 $ 5,148,309 Common Stock Total In thousands Shares Balance, January 30, 2016 1,326,992 $ 1,326,992 $ — $ (667,472 ) $ 3,647,555 $ 4,307,075 Net income — — — — 2,298,234 2,298,234 Other comprehensive (loss), net of tax — — — (26,754 ) — (26,754 ) Cash dividends declared on common stock — — — — (680,183 ) (680,183 ) Recognition of share-based compensation — — 102,251 — — 102,251 Issuance of common stock under stock incentive plan and related tax effect 10,202 10,202 204,873 — (5,101 ) 209,974 Common stock repurchased (44,556 ) (44,556 ) (307,124 ) — (1,348,318 ) (1,699,998 ) Balance, January 28, 2017 1,292,638 1,292,638 — (694,226 ) 3,912,187 4,510,599 Net income — — — — 2,607,948 2,607,948 Other comprehensive income, net of tax — — — 252,367 — 252,367 Cash dividends declared on common stock — — — — (793,878 ) (793,878 ) Recognition of share-based compensation — — 101,362 — — 101,362 Issuance of common stock under stock incentive plan and related tax effect 7,790 7,790 110,597 — (3,895 ) 114,492 Common stock repurchased (44,410 ) (44,410 ) (211,959 ) — (1,388,212 ) (1,644,581 ) Balance, February 3, 2018 1,256,018 1,256,018 — (441,859 ) 4,334,150 5,148,309 Net income — — — — 3,059,798 3,059,798 Cumulative effect of accounting change (See Note A) — — — — 58,712 58,712 Other comprehensive (loss), net of tax — — — (188,462 ) — (188,462 ) Cash dividends declared on common stock — — — — (965,539 ) (965,539 ) Recognition of share-based compensation — — 103,557 — — 103,557 Issuance of common stock under stock incentive plan and related tax effect 11,988 11,988 227,240 — — 239,228 Common stock repurchased (50,823 ) (50,823 ) (330,797 ) — (2,025,377 ) (2,406,997 ) Balance, February 2, 2019 1,217,183 $ 1,217,183 $ — $ (630,321 ) 4,461,744 $ 5,048,606 F-8::3, 20182, 2019 (“fiscal 2018”2019”) was a53-week 52-week fiscal year. Fiscal 2018 was a 53-week year and fiscal 2017 and 2016 werewas a 52-week fiscal years.:retirement obligations, share-based compensation, casualty insurance, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments. Actual amounts could differ from those estimates, and such differences could be material.Recognition:Recognitionrecordsadopted Revenue from Contracts with Customers (referred to as “ASC 606”), on February 4, 2018 (“the adoption date”). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. TJX adopted the new guidance under the modified retrospective approach which resulted in a $59 million cumulative adjustment to increase retained earnings. The cumulative adjustment primarily related to revenue recognized on the value of unredeemed rewards certificates issued to customers as part of the Company’s U.S. co-branded credit card loyalty program. We now recognize the estimated unredeemed awards when they are earned, rather than when merchandise credits expire or when the likelihood of redemption becomes remote. In addition, online sales are now recognized at the timeshipping point rather than receipt by the customer. Other changes relate to the presentation of revenue as certain expenses previously presented as a reduction of revenue are now classified as selling, general and administrative expenses (“SG&A”). The new standard required a change in the presentation of our sales return reserve on the balance sheet, which we previously recorded net of the value of returned merchandise and now is presented at gross sales value with an asset established for the value of the merchandise returned. There was no change in the timing or amount of revenue recognized under the new standard as it related to revenue from point of sale at the registers in our stores, which constitutes more than 98% of our revenue. Financial results for fiscal periods after the adoption date are presented under ASC 606 while results from prior periods are not adjusted and receiptcontinue to be reported under the accounting standards in effect for the prior period. We applied ASC 606 only to contracts that were not completed prior to fiscal 2019.by the customer,sales, which are recorded net of a reserve for estimated returns. We estimate returns, based uponany discounts and sales taxes, for the sales of merchandise both within our historical experience. We defer recognitionstores and online. Net sales also include an immaterial amount of a layawayother revenues that represent less than 1.0% of total revenues, primarily generated from TJX’s co-branded loyalty rewards credit card program offered in the United States only. In addition, certain customers may receive discounts that are accounted for as consideration reducing the transaction price. Merchandise sales from our stores are recognized at the point of sale and its related profitwhen TJX provides the merchandise to the accounting periodcustomer. The performance obligation is fulfilled at this point when the customer receiveshas obtained control by paying for and leaving with the layaway merchandise. Merchandise sales made online are recognized when the product has been shipped, which is when legal title has passed and when TJX is entitled to payment, and the customer has obtained the ability to direct the use of and obtain substantially all of the remaining benefits from the goods. Shipping and handling activities related to online sales occur after the customer obtains control of the goods. TJX’s policy is to treat shipping costs as part of our fulfillment center costs within our operating expenditures. As a result, shipping fee revenues received is recognized when control of the goods transfer to the customer and is recorded as net sales. Shipping and handling costs incurred by TJX are included in cost of sales, including buying and occupancy costs. TJX disaggregates revenue by operating segment, see Note G—Segment Information of Notes to Consolidated Financial Statements.merchandise.merchandise, as TJX does not fulfill its performance obligation until the gift card has been redeemed. While gift cards have an indefinite life, substantially all are redeemed in the first year of issuance. Fiscal Period In thousands February 2,
2019Balance, February 3, 2018 $ 406,506 Deferred revenue 1,677,251 Effect of exchange rates changes on deferred revenue (6,279 ) Revenue recognized (1,627,176 ) Balance, February 2, 2019 $ 450,302 20172017.$13.8 million in fiscal 2016.we may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. We have elected to apply the portfolio practical expedient. We estimate the date of receipt byvariable consideration using the customerexpected value method when recognizing revenue from sales by oure-commerce operations and shipping and handling costs chargedcalculating the returns reserve because the difference in applying it to the customerindividual contract would not differ materially. Returns are estimated based on historical experience and are required to be established and presented at the gross sales value with an asset established for the estimated value of the merchandise returned separate from the refund liability. Liabilities for return allowances are included in revenue. The shipping“Accrued expenses and handling costs incurred by TJX areother current liabilities” and the estimated value of the merchandise to be returned is included in cost of sales, including buying“Prepaid expenses and occupancy costs.: (“SG&A”) expenses include store payroll and benefit costs; communication costs; credit and check expenses; advertising; administrative and field management payroll, benefits and travel costs; corporate administrative costs and depreciation; gains and losses onnon-inventory related foreign currency exchange contracts; and other miscellaneous income and expense items.Equivalents:Equivalents3, 2018,2, 2019, TJX’s cash and cash equivalents held outside the U.S. were $1.8$1.2 billion, of which $398.6$420.6 million was held in countries where TJX has the intention to reinvest any undistributed earnings indefinitely.F-9: Sierra Trading Post (“STP”), and T.K. Maxx in Australia. The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as itthat inventory has not been fully processed for sale (e.g. inventory in transit and unprocessed inventory in our distribution centers). Under the retail method, TJX utilizes a permanent markdown strategy and lowers the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in the stores. TJX records inventory at the time title transfers, which is typically at the time when inventory is shipped. As a result, merchandise inventories on TJX’s balance sheet includein-transit inventory of $832.1 million at February 2, 2019 and $755.4 million at February 3, 2018 and $641.9 million at January 28, 2017.2018. Comparable amounts were reflected in accounts payable at those dates.Equity:Equity2016-09-Compensation-Stock 2016-9-Compensation-Stock compensation (Topic 718): Improvements to employee share-based payment accounting, any excess tax benefits or deficiencies are included in the provision for income taxes. The par value of performance-based deferred stock awards, performance share units and restricted stock units is added to common stock when shares are delivered following vesting. The par value of performance-based restricted stock awards is also added to common stock when the stock is issued, generally at grant date. The fair value of the performance-based restricted stock awards and units in excess of any par value is added to APIC as the awards are amortized into earnings over the related requisite service periods.Compensation:Compensationperformance-based restricted stock awards. See Note H – Stock Incentive Plan of Notes to Consolidated Financial Statements for a detailed discussion of share-based compensation.: Fiscal Year Ended Dollars in thousands February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks) $ 69,237 $ 69,219 $ 68,253 (4,942 ) (7,548 ) (7,984 ) (32,707 ) (18,137 ) (13,869 ) $ 31,588 $ 43,534 $ 46,400 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Interest expense $ 69,102 $ 69,237 $ 69,219 Capitalized interest (4,263 ) (4,942 ) (7,548 ) Interest (income) (55,979 ) (32,707 ) (18,137 ) Interest expense, net $ 8,860 $ 31,588 $ 43,534 2017 and 20162017 relates to costs on owned real estate projects and development costs on a merchandising system.:F-102017 and $622.0 million in fiscal 2016.2017. TJX had no property held under capital leases during fiscal 2019, 2018, 2017, or 2016.2017. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for internally developed software are capitalized and amortized over 3 to 155 years. Upon retirement or sale, the cost of disposed assets and the related accumulated depreciation are eliminated and any gain or loss is included in income.Pre-opening costs, including rent, are expensed as incurred.:Obligations:ObligationsBuild to Suit Accounting::STPSierra Trading Post in fiscal 2013, rebranded as Sierra in fiscal 2019, and the purchase of Trade Secret in fiscal 2016, which wasre-branded under the T.K. Maxx name during fiscal 2018. The following is a roll forward of goodwill by component:Amounts in thousands Marmaxx Winners Sierra
Trading
Post T.K.
Maxx in
Australia Total $ 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 — — (97,254 ) — (97,254 ) — 98 — 1,354 1,452 $ 70,027 $ 1,784 $ — $ 28,258 $ 100,069 F-11In thousands Marmaxx Winners Sierra Total Balance, January 28, 2017 70,027 1,686 97,254 26,904 195,871 Impairment — — (97,254 ) — (97,254 ) Effect of exchange rate changes on goodwill — 98 — 1,354 1,452 Balance, February 3, 2018 70,027 1,784 — 28,258 100,069 Effect of exchange rate changes on goodwill (92 ) (2,425 ) (2,517 ) Balance, February 2, 2019 $ 70,027 $ 1,692 $ — $ 25,833 $ 97,552 STPSierra goodwill and $2.0 million for certain long-lived assets of STPSierra as the estimated fair value of this business fell below the carrying value due to a decrease in projected revenue growth rates. The impairment charge is included within the Marmaxx segment results.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 value of $25.5 million in fiscal 2018, $28.0 million in fiscal 2017 and $30.6 million in fiscal 2016 net of amortization of $13.0 million, $10.5 million and $7.9 million in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.years. The Trade Secret tradename is being amortized over 7 years and was carried atyears. The following is a valueroll forward of $11.7 million in fiscal 2018, $11.0 million in fiscal 2017 and $11.6 million in fiscal 2016, which included a positive impact from foreign exchange of $2.1 million in fiscal 2018, $640,000 in fiscal 2017 and a negative impact from foreign exchange of $90,000 in 2016. The carrying value is also net of amortization of $2.9 million, $1.6 million and $300,000 in fiscal 2018, 2017 and 2016, respectively. Fiscal Year Ended February 2, 2019 February 3, 2018 In thousands Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value Definite-lived intangible assets Sierra Trading Post $ 38,500 $ (15,614 ) $ — $ 22,886 $ 38,500 $ (13,029 ) $ — $ 25,471 Trade Secret $ 12,541 $ (4,117 ) $ (1,048 ) $ 7,376 $ 12,541 $ (2,899 ) $ 2,072 $ 11,714 Indefinite-lived intangible asset Marshalls $ 107,695 $ — $ — $ 107,695 $ 107,695 $ — $ — $ 107,695 :During fiscal 2018, thisThis analysis resulted in immaterial impairment charges of store fixed assets.assets in fiscal 2019 and fiscal 2018. Thestore-by-store evaluations did not indicate any recoverability issues in fiscal 2017 and 2016.2017 or 2016.2017. Goodwill is tested for impairment by using a quantitative assessment by comparing the carrying value of the related reporting unit to its fair value. An impairment exists when this analysis, using typical valuation models such as the discounted cash flow method, shows that the fair value of the reporting unit is less than the carrying cost of the reporting unit. We may assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The assessment of qualitative factors is optional and at the Company’s discretion. In fiscal 20182019 and fiscal 2017,2018, we bypassed the qualitative assessment and performed the first step of the quantitative goodwill impairment test. In fiscal 2018 the Company recorded an impairment charge of $97.3$97.3 million for STPSierra goodwill as the estimated fair value of this business fell below the carrying value due to a decrease in projected revenue growth rates. There were no impairments related to our goodwill in fiscal 20172019 or 2016.2017.:2017 and $382.9 million for fiscal 2016.F-12:income (loss). income. Activity of the foreign operations that affect the statements of income and cash flows is translated at average exchange rates prevailing during the fiscal year.Contingencies:ContingenciesRevenue RecognitionIn May 2014,(the “FASB”(“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we have reviewed the guidance and have determined that they will not apply or are not expected to be material to our Consolidated Financial Statements upon adoption and therefore, are not disclosed.revenue recognition. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard is effective for annual reporting periods beginning after December 15, 2017. We will adopt the new revenue recognition guidance on February 4, 2018 under the modified retrospective approach, which will result in immaterial cumulative adjustment to retained earnings. The cumulative adjustment will primarily relate to revenue recognized on the value of unredeemed rewards certificates issued to customers as part of the Company’s cobranded credit card rewards program as we will recognize the estimated unredeemed awards when they are earned, rather than when merchandise credits expire or the likelihood of redemption becomes remote. Other changes that have been identified relate to the presentation of revenue whereby outside cobranded credit card expenses will be classified as SG&A rather than as a reduction of revenue. The new standard will require a change in the presentation of our sales return reserve on the balance sheet, which we currently record net of the value of returned merchandise. 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 believe 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 our revenue. Overall we do not expect these changes to have a material impact on our financial condition or results of operations other than additional disclosure requirements.LeasesIn February 2016, the FASB issued updated guidance on leases that aims to increase transparency and comparability among organizations by requiring lessees to recognize leaseright of use 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 permittedpermitted. In July 2018, the FASB issued ASU 2018-11, Leasesis required.of the new guidance for leases that exist or are entered into after the beginning of the earliest comparative period presented. We plan towill adopt this standard inon February 3, 2019 using the first quarter of the fiscal year ending February 1, 2020. optional transition method under ASU 2018-11.is in the process of implementingimplemented a new lease accounting system and has established a cross-functional team to implement the updated lease guidance and who are in the process of evaluatingevaluated our lease portfolio andto assess the impact this standard will have on our Consolidated Financial Statements and Notes thereto. 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 4,000 leased locations. We plan to take the transition package of three practical expedients permitted within the standard, which among other things, allows the carryforward of historical lease classifications. We expect to make an accounting policy election that will keep leases with a term of 12 months or less off the balance sheet and result in recognizing those lease payments on a straight-line basis over the lease term. As our leases do not provide an implicit rate, we plan to use our incremental borrowing rate based on information available at commencement date in the determining the present value of future payments. The Company has determined that the initial lease term will not differ under the new standard versus current accounting practice, and therefore the income statement impact of the new standard iswill not expectedbe material. Any impact to the income statement will be material.F-13Cash FlowsAugust 2016,addition, in certain instances, the FASB issued a pronouncement that addresses diversity in how certain cash receipts and cash payments are presentedcost of our renewal options may be recognized earlier in the life of the lease than under the existing lease accounting rules. On adoption of this standard we will recognize an operating lease liability of approximately $9 billion on our statement of cash flows. The new guidance provides clarity aroundfinancial condition as of February 3, 2019 with corresponding right of use assets based on 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. We plan to adopt this standard in the first quarterpresent value of the fiscal year ending February 2, 2019remaining minimum rental payments associated with our more than 4,300 leased locations. This impact includes the derecognition of build-to-suit lease assets and liabilities when we do not control the building during the construction period. We do not believe the new standard will have a notable impact on our liquidity and we do not expect there to be a materialbelieve it will have an impact on our consolidated financial statements.Retirement BenefitsIn March 2017,debt-covenant compliance under our current agreements. We will implement the FASB issued updated guidance related to retirement benefits,transition package of three practical expedients permitted within the standard, which requires that an employer reportamong other things, allows for the service cost componentcarryforward of net periodic pension and net periodic post retirement cost in the same line item as other compensation costs arising from services rendered by the employees during the period. It also requires the other components of net periodic pension and net periodic postretirement benefit cost to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations if such a subtotal is typically presented. Wehistorical lease classifications. As our leases do not include such a subtotalprovide an implicit rate, nor is one readily available, we will use our incremental borrowing rate based on our income statement so we intendinformation available at commencement date to recorddetermine thenon-service components present value of pension cost in our SG&A expenses and present appropriate disclosures. Additionally, only the service cost component is eligible for capitalization. This pronouncement is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. The amendments in this update are to be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost as well as net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We plan to adopt this standard in the first quarter of the fiscal year ending February 2, 2019. We do not expect there to be a material impact on our consolidated financial statements.Hedging ActivitiesIn August 2017, the FASB issued updated guidance on hedge accounting. The updates allow hedge accounting for new types of interest rate hedges of financial instruments and simplify documentation requirements to qualify for hedge accounting. In addition, any gain or loss from hedge ineffectiveness will be reported in the same income statement line with the effective hedge results and the hedged transaction. The updated guidance is effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet determined the timing for adoption or estimated the effect on the Company’s financial statements.–- Reporting Comprehensive Incomehaswill adopt the standard in the first quarter of fiscal 2020 and plans on electing not yet determinedto reclassify the timingstranded tax effects as of result of the 2017 Tax Act to retained earnings. The Company is still evaluating the impact of the adoption on its consolidated disclosures.estimatedprospectively. The Company is currently evaluating the effectthe Company’sits consolidated financial statements.GoodwillInfourth quarter of fiscal 2018, TJX early adopted a pronouncement that simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, goodwillF-14impairment is to be measured as the amount by which the carrying value exceeds the fair value of the reporting unit. The loss recognized should not exceed the total amount of goodwill allocated to the reporting unit.Share Based Compensation2018,2019, TJX adopted a pronouncement that aims to simplify several aspects of accountingaddresses differences in the way certain cash receipts and reporting for share-based payment transactions. One provision within this pronouncement requires that excess income tax benefits and tax deficiencies related to share-basedbe recognized within income tax expenseare presented in the statement of income, rather than within additionalpaid-in capital on the balance sheet.cash flows. The adoption of this provision has been applied prospectively. The impact to TJX’s results of operations related to the adoption of this standard was a decrease in the provision for income taxes of $51.5 million for the fiscal year ended February 3, 2018. The impact of this benefit on TJX’s future results of operations will depend in part on the market prices for TJX’s shares on the dates there are taxable events related to share awards, and therefore the impact is difficult to predict. In addition, this pronouncement requiresnew guidance provides clarity around the cash paidflowa taxing authority when shares are withheld to pay employee taxes to be classified as a “financing activity” rather than an “operating activity,” as previously classified onreduce the Statement of Cash Flows. This reclassification was made on a retrospective basis. This provisions within the pronouncement current and potential future differences in practice. The standardfinancial statements. Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 $ 1,355,777 $ 1,247,585 3,254,830 2,884,054 5,357,701 4,871,764 $ 9,968,308 $ 9,003,403 4,962,255 4,470,509 $ 5,006,053 $ 4,532,894 Fiscal Year Ended In thousands February 2,
2019February 3,
2018Land and buildings $ 1,457,835 $ 1,355,777 Leasehold costs and improvements 3,377,045 3,254,830 Furniture, fixtures and equipment 5,894,239 5,357,701 Total property at cost $ 10,729,119 $ 9,968,308 Less accumulated depreciation and amortization 5,473,911 4,962,255 Net property at cost $ 5,255,208 $ 5,006,053 Fiscal Year Ended In thousands $ 3,514,628 $ 3,312,210 308,259 283,688 1,151,972 920,710 31,194 16,286 $ 5,006,053 $ 4,532,894 F-15 Fiscal Year Ended In thousands February 2,
2019February 3,
2018United States $ 3,756,929 $ 3,514,628 Canada 303,414 308,259 Europe 1,154,564 1,151,972 Australia 40,301 31,194 Total long-lived assets $ 5,255,208 $ 5,006,053 (Loss) (loss) relate to the Company’s foreign currency translation adjustments, deferred gains/losses on pension and other post-retirement obligations and a cash flow hedge on issued debt, all of which are recorded net of the related income tax effects. The following table details the changes in accumulated other comprehensive (loss) income (loss) for fiscal 2018,2019, fiscal 20172018 and fiscal 2016:Amounts in thousands Foreign
Currency
Translation Cash Flow
Hedge on Debt Accumulated
Other
Comprehensive
Income (Loss) $ (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 ) 211,752 — — 211,752 — 24,691 — 24,691 — — 696 696 — 15,228 — 15,228 $ (280,051 ) $ (159,562 ) $ (2,246 ) $ (441,859 ) In thousands Accumulated
Other
Comprehensive(Loss) Income$ (439,192 ) $ (224,654 ) $ (3,626 ) $ (667,472 ) Foreign currency translation adjustments (net of taxes of $25,656) (52,611 ) — — (52,611 ) Recognition of net gains/losses on benefit obligations (net of taxes of $7,394) — (11,239 ) — (11,239 ) Pension settlement charge (net of taxes of $12,369) — 18,804 — 18,804 Amortization of loss on cash flow hedge (net of taxes of $450) — — 684 684 Amortization of prior service cost and deferred gains/losses (net of taxes of $11,584) — 17,608 — 17,608 (491,803 ) (199,481 ) (2,942 ) (694,226 ) Foreign currency translation adjustments (net of taxes of $36,929) 211,752 — — 211,752 Recognition of net gains/losses on benefit obligations (net of taxes of $8,989) — 24,691 — 24,691 Amortization of loss on cash flow hedge (net of taxes of $438) — — 696 696 Amortization of prior service cost and deferred gains/losses (net of taxes of $9,592) — 15,228 — 15,228 Balance, February 3, 2018 (280,051 ) (159,562 ) (2,246 ) (441,859 ) Foreign currency translation adjustments (net of taxes of $8,233) (192,664 ) — — (192,664 ) Recognition of net gains/losses on investment hedges (net of taxes $7,113) 19,538 — — 19,538 Recognition of net gains/losses on benefit obligations (net of taxes of $19,813) — (54,420 ) — (54,420 ) Pension settlement charge (net of taxes of $9,641) — 26,481 — 26,481 Amortization of loss on cash flow hedge (net of taxes of $304) — — 847 847 Amortization of prior service cost and deferred gains/losses (net of taxes of $4,280) — 11,756 — 11,756 Balance, February 2, 2019 $ (453,177 ) $ (175,745 ) $ (1,399 ) $ (630,321 ) Stock:Stock22.351.8 million shares of its common stock at a cost of $1.7$2.5 billion during fiscal 2018,2019, on a “trade date basis.” TJX reflects stock repurchases in its financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $2.4 billion in fiscal 2019, $1.6 billion in fiscal 2018 and $1.7 billion in fiscal 2017, and $1.8 billionrepurchased 50.8 million shares in fiscal 2016, and repurchased 22.22019, 44.4 million shares in fiscal 2018 22.3and 44.6 million shares in fiscal 2017 and 26.6 million shares in fiscal 2016.2017. These expenditures were funded primarily by cash generated from operations.3, 20182, 2019 TJX had $1.1approximately $1.7 billion available under previously announced stock repurchase programs. In February 2018, TJX announced that its2019, our Board of Directors had approved the repurchase of an additional $3.0$1.5 billion of TJX common stock from time to time.F-16: Fiscal Year Ended Amounts in thousands except per share amounts (53 weeks) $ 2,607,948 $ 2,298,234 $ 2,277,658 636,827 655,647 673,484 $ 4.10 $ 3.51 $ 3.38 $ 2,607,948 $ 2,298,234 $ 2,277,658 636,827 655,647 673,484 9,278 8,785 9,767 646,105 664,432 683,251 $ 4.04 $ 3.46 $ 3.33 Fiscal Year Ended Amounts in thousands except per share amounts February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Basic earnings per share: Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Weighted average common stock outstanding for basic earnings per share calculation 1,241,153 1,273,654 1,311,294 Basic earnings per share $ 2.47 $ 2.05 $ 1.75 Diluted earnings per share: Net income $ 3,059,798 $ 2,607,948 $ 2,298,234 Weighted average common stock outstanding for basic earnings per share calculation 1,241,153 1,273,654 1,311,294 Assumed exercise / vesting of: Stock options and awards 18,099 18,555 17,570 Weighted average common stock outstanding for diluted earnings per share calculation 1,259,252 1,292,209 1,328,864 Diluted earnings per share $ 2.43 $ 2.02 $ 1.73 Cash dividends declared per share $ 0.78 $ 0.63 $ 0.52 12.56.1 million, 8.124.9 million and 4.116.3 million such options excluded at the end of fiscal 2019, fiscal 2018 and fiscal 2017, and fiscal 2016, respectively.as well as changes inand 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 through the use of derivative financial instruments when and to the extent we deemdeemed appropriate. TJX does not use derivative financial instruments for trading or other speculative purposes and does not use any leveraged derivative financial instruments. TJX recognizes all derivative instruments as either assets or liabilities in the statements of financial position and measures those instruments at fair value. The fair values of the derivatives are classified as assets or liabilities, current ornon-current, based upon valuation results and settlement dates of the individual contracts. Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of other comprehensive income or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged. TJX periodically reviews its net investments in foreign subsidiaries and did not enter into hedges for such investments during fiscal 2018.Contracts:Contracts2018,2019, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2019.2020. The hedge agreements outstanding at February 3, 20182, 2019 relate to approximately 50% of TJX’s estimated notional diesel requirements for fiscal 2019.2020. These diesel fuel hedge agreements will settle throughout fiscal 20192020 and the first month of fiscal 2020.2021. TJX elected not to apply hedge accounting rules to these contracts.F-17Contracts:ContractsTJX International (United Kingdom, Ireland, Germany, Poland, Austria, the Netherlands and Australia), TJX Canada (Canada), Marmaxx (U.S.) and HomeGoods (U.S.) in currencies other than their respective functional currencies.currencies, primarily in TJX International and TJX Canada. These contracts typically have a term of twelve months or less. The contracts outstanding at February 3, 20182, 2019 cover a portion of such actual and anticipated merchandise purchases throughout fiscal 2019.2020. Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the United Kingdom. All merchandise is purchased centrally in the U.K. and then shipped and billed to the retail entities in other countries. This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the buying entity for changes in the exchange rate between the Euro and British Pound. The inflow of Euros to the central buying entity provides a natural hedge for merchandise purchased from third-party vendors that is denominated in Euros. However, with the growth of TJX’s Euro denominated retail operations, the intercompany billings committed to the Euro denominated operations is generating Euros in excess of those needed to meet merchandise commitments to outside vendors. TJX calculates this excess Euro exposure each month and enters into forward contracts of approximately 30 days duration to mitigate the exposure. TJX elected not to apply hedge accounting rules to these contracts.In thousands Pay Receive Fair value hedges: Intercompany balances, primarily debt and related interest: zł 59,000 £ 12,021 0.2037 Prepaid Exp $ 56 $ — $ 56 € 55,950 £ 49,560 0.8858 Prepaid Exp /
(Accrued Exp)126 (140 ) (14 ) A$ 30,000 U.S.$ 21,483 0.7161 (Accrued Exp) — (314 ) (314 ) U.S.$ 72,020 £ 55,000 0.7637 Prepaid Exp 1,037 — 1,037 Economic hedges for which hedge accounting was not elected: Diesel contracts Fixed on 2.7M - 3.3M gal per month Float on 2.7M - 3.3M gal per month N/A (Accrued Exp) — (3,786 ) (3,786 ) Intercompany billings in TJX International, primarily merchandise related: € 46,600 £ 41,835 0.8977 Prepaid Exp 1,300 — 1,300 Merchandise purchase commitments: C$ 546,083 U.S.$ 414,100 0.7583 Prepaid Exp /
(Accrued Exp)1,239 (4,741 ) (3,502 ) C$ 31,455 € 20,700 0.6581 (Accrued Exp) — (248 ) (248 ) £ 173,624 U.S.$ 230,000 1.3247 Prepaid Exp /
(Accrued Exp)3,459 (1,466 ) 1,993 zł 280,167 £ 57,586 0.2055 Prepaid Exp /
(Accrued Exp)707 (86 ) 621 A$ 51,043 U.S.$ 36,961 0.7241 Prepaid Exp /
(Accrued Exp)97 (213 ) (116 ) U.S.$ 56,847 € 49,355 0.8682 Prepaid Exp /
(Accrued Exp)115 (207 ) (92 ) Total fair value of financial instruments $ 8,136 $ (11,201 ) $ (3,065 ) 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
February 3,
2018 zł 67,000 £ 14,035 0.2095 (Accrued Exp) $ — $ (45 ) $ (45 ) € 51,950 £ 46,095 0.8873 (Accrued Exp) — (318 ) (318 ) U.S.$ 77,079 £ 55,000 0.7136 Prepaid Exp 1,636 — 1,636 Fixed on 2.2M
– 3.0M gal
per month
Float on 2.2M
per month
N/A Prepaid Exp 7,854 — 7,854 € 26,000 £ 22,948 0.8826 (Accrued Exp ) — (2 ) (2 ) C$ 462,464 U.S.$ 367,200 0.7940 Prepaid Exp /
(Accrued Exp)
49 (5,478 ) (5,429 ) C$ 22,562 € 15,000 0.6648 Prepaid Exp 557 — 557 £ 176,911 U.S.$ 238,000 1.3453 Prepaid Exp /
(Accrued Exp)
173 (12,838 ) (12,665 ) zł 288,646 £ 60,023 0.2079 (Accrued Exp) — (1,303 ) (1,303 ) A$ 28,635 U.S.$ 22,230 0.7763 Prepaid Exp /
(Accrued Exp)
43 (573 ) (530 ) U.S.$ 44,223 € 36,950 0.8355 Prepaid Exp 1,905 — 1,905 $ 12,217 $ (20,557 ) $ (8,340 ) F-18The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 28, 2017: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 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
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 thousands Pay Receive Fair value hedges: Intercompany balances, primarily debt and related interest: zł 67,000 £ 14,035 0.2095 (Accrued Exp) $ — $ (45 ) $ (45 ) € 51,950 £ 46,095 0.8873 (Accrued Exp) — (318 ) (318 ) U.S.$ 77,079 £ 55,000 0.7136 Prepaid Exp 1,636 — 1,636 Economic hedges for which hedge accounting was not elected: Diesel contracts Fixed on 2.2M – 3.0M gal per month Float on 2.2M – 3.0M gal per month N/A Prepaid Exp 7,854 — 7,854 Intercompany billings in TJX International, primarily merchandise related: € 26,000 £ 22,948 0.8826 (Accrued Exp) — (2 ) (2 ) Merchandise purchase commitments: C$ 462,464 U.S.$ 367,200 0.7940 Prepaid Exp /
(Accrued Exp)49 (5,478 ) (5,429 ) C$ 22,562 € 15,000 0.6648 Prepaid Exp 557 — 557 £ 176,911 U.S.$ 238,000 1.3453 Prepaid Exp /
(Accrued Exp)173 (12,838 ) (12,665 ) zł 288,646 £ 60,023 0.2079 (Accrued Exp) — (1,303 ) (1,303 ) A$ 28,635 U.S.$ 22,230 0.7763 Prepaid Exp / (Accrued Exp) $ 43 $ (573 ) $ (530 ) U.S.$ 44,223 € 36,950 0.8355 Prepaid Exp 1,905 — 1,905 Total fair value of financial instruments $ 12,217 $ (20,557 ) $ (8,340 ) and fiscal 2016 are as follows: Amount of Gain (Loss) Recognized in
Income by Derivative In thousands Location of Gain (Loss) Recognized in
Income by Derivative February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks) Selling, general
and administrative
expenses $ 1,207 $ (17,250 ) $ (3,927 ) Cost of sales, including buying and occupancy costs 7,946 3,906 (21,797 ) Cost of sales, including buying and occupancy costs (3,042 ) (8,684 ) (5,768 ) Cost of sales, including buying and occupancy costs (45,886 ) 5,626 49,107 $ (39,775 ) $ (16,402 ) $ 17,615 F-19 In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Fair value hedges: Intercompany balances, primarily debt and related interest Selling, general and administrative expenses $ (2,674 ) $ 1,207 $ (17,250 ) Economic hedges for which hedge accounting was not elected: Intercompany receivable Selling, general and administrative expenses 18,823 — — Diesel contracts Cost of sales, including buying and occupancy costs 1,373 7,946 3,906 Intercompany billings in TJX International, primarily merchandise related Cost of sales, including buying and occupancy costs 1,137 (3,042 ) (8,684 ) Merchandise purchase commitments Cost of sales, including buying and occupancy costs 60,407 (45,886 ) 5,626 Gain (loss) recognized in income $ 79,066 $ (39,775 ) $ (16,402 ) and a gain of $28.5 million in fiscal 2016, all of which were largely offset by gains and losses on the underlying hedged item.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 February 3,
2018 January 28,
2017 January 30,
2016 $ 249,045 $ 195,733 $ 155,847 $ 506,165 $ 543,242 $ 352,313 4,363 6,018 28,643 7,854 2,183 — $ 20,557 $ 7,256 $ 3,455 — — 13,952 Fiscal Year Ended In thousands February 2,
2019February 3,
2018Level 1 Assets: Executive Savings Plan investments $ 253,215 $ 249,045 Level 2 Assets: Short-term investments $ — $ 506,165 Foreign currency exchange contracts 8,136 4,363 Diesel fuel contracts — 7,854 Liabilities: Foreign currency exchange contracts $ 7,415 $ 20,557 Diesel fuel contracts 3,786 — 3, 2018 was $2.16 billion compared to a carrying value of $2.23 billion. The fair value of long-term debt at January 28, 20172, 2019 was $2.17 billion compared to a carrying value of $2.23 billion. The fair value of long-term debt at January 30, 2016February 3, 2018 was $1.70$2.16 billion compared to a carrying value of $1.62$2.23 billion. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might affect TJX’s ability to settle these obligations.F-20TJX alsoIn addition to our four main business segments, Sierra operates STP, anoff-price Internet retailer that operates sierratradingpost.comsierra.com and retail stores in the U.S. The results of STPSierra are included in the Marmaxx segment. Fiscal
2018 Fiscal
2017 Fiscal
2016 52 % 54 % 55 % 15 15 15 33 31 30 100 % 100 % 100 % For fiscal 2018, TJX Canada and TJX International accounted for 24% of TJX’s net sales, 18% of segment profit and 27% of consolidated assets. 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. Fiscal
2019Fiscal
2018Fiscal
2017Apparel Clothing including footwear 52 % 52 % 54 % Jewelry and accessories 15 15 15 Home fashions 33 33 31 Total 100 % 100 % 100 % Fiscal Year Ended In thousands (53 weeks) $ 22,249,105 $ 21,246,034 $ 19,948,227 5,116,328 4,404,607 3,915,221 3,642,282 3,171,127 2,854,617 4,856,949 4,361,976 4,226,873 $ 35,864,664 $ 33,183,744 $ 30,944,938 $ 2,949,358 $ 2,995,045 $ 2,858,780 674,511 613,778 549,318 530,113 413,417 375,306 249,226 235,519 316,939 4,403,208 4,257,759 4,100,343 515,032 408,236 395,643 — 51,773 — — 31,173 — 31,588 43,534 46,400 $ 3,856,588 $ 3,723,043 $ 3,658,300 F-21Business segment information (continued): Fiscal Year Ended In thousands $ 5,676,464 $ 5,440,448 $ 5,526,570 1,237,811 1,086,947 915,549 1,459,924 1,345,003 1,021,584 2,321,001 1,789,140 1,645,296 3,362,815 3,222,270 2,381,432 $ 14,058,015 $ 12,883,808 $ 11,490,431 $ 532,348 $ 449,169 $ 442,910 149,505 173,979 130,593 88,761 100,437 71,071 287,003 301,162 244,806 $ 1,057,617 $ 1,024,747 $ 889,380 $ 399,014 $ 385,007 $ 364,892 94,709 77,287 67,204 68,033 62,427 54,573 159,010 129,376 126,020 5,191 4,699 4,007 $ 725,957 $ 658,796 $ 616,696 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Net sales: In the United States Marmaxx $ 24,057,970 $ 22,249,105 $ 21,246,034 HomeGoods 5,787,365 5,116,328 4,404,607 TJX Canada 3,869,779 3,642,282 3,171,127 TJX International 5,257,820 4,856,949 4,361,976 $ 38,972,934 $ 35,864,664 $ 33,183,744 Segment profit: In the United States $ 3,253,949 $ 2,949,358 $ 2,995,045 HomeGoods 671,871 674,511 613,778 TJX Canada 551,617 530,113 413,417 TJX International 285,790 249,226 235,519 4,763,227 $ 4,403,208 $ 4,257,759 General corporate expense 545,034 515,032 408,236 Loss on early extinguishment of debt — — 51,773 Pension settlement charge 36,122 — 31,173 Interest expense, net 8,860 31,588 43,534 Income before provision for income taxes $ 4,173,211 $ 3,856,588 $ 3,723,043 (1) Fiscal 2018 amount includes an impairment charge of $99.3 million for goodwill and certain long-lived assets of STP.Sierra. Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017Identifiable assets: In the United States Marmaxx $ 6,223,110 $ 5,676,464 $ 5,440,448 HomeGoods 1,416,687 1,237,811 1,086,947 TJX Canada 914,789 1,459,924 1,345,003 TJX International 2,344,033 2,321,001 1,789,140 3,427,410 3,362,815 3,222,270 Total identifiable assets $ 14,326,029 $ 14,058,015 $ 12,883,808 Capital expenditures: In the United States Marmaxx $ 598,955 $ 532,348 $ 449,169 HomeGoods 170,978 149,505 173,979 TJX Canada 82,333 88,761 100,437 TJX International 272,873 287,003 301,162 Total capital expenditures $ 1,125,139 $ 1,057,617 $ 1,024,747 Depreciation and amortization: In the United States Marmaxx $ 456,420 $ 399,014 $ 385,007 HomeGoods 110,978 94,709 77,287 TJX Canada 66,365 68,033 62,427 TJX International 180,631 159,010 129,376 5,261 5,191 4,699 Total depreciation and amortization $ 819,655 $ 725,957 $ 658,796 (2)(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. (3)(2) Includes debt discount accretion and debt expense amortization. 347.8695.7 million shares with 26.646.3 million shares available for future grants as of February 3, 2018.2, 2019. TJX issues shares under the plan from authorized but unissued common stock.$102.3 million and $94.1$102.3 million in fiscal 2019, 2018 2017 and 2016,2017, respectively. As of February 3, 2018,2, 2019, there was $130.7$146.5 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted-average period of two2 years.three-year3-year period starting one1 year after the grant, and have aten-year 10-year maximum term. When options are granted with other vesting terms, the vesting information is reflected in the valuation.F-22 Fiscal Year Ended February 3,
2018 January 28,
2017 January 30,
2016 1.75 % 1.20 % 1.50 % 1.5 % 1.2 % 1.2 % 23.5 % 23.8 % 24.4 % 4.8 4.8 4.5 $ 14.32 $ 14.55 $ 14.48 Fiscal Year Ended February 2,
2019February 3,
2018January 28,
2017Risk-free interest rate 2.88 % 1.75 % 1.20 % Dividend yield 1.4 % 1.5 % 1.2 % Expected volatility factor 23.5 % 23.5 % 23.8 % Expected option life in years 4.9 4.8 4.8 Weighted average fair value of options issued $ 11.85 $ 7.16 $ 7.28 Stock Options:below (shares in thousands): Fiscal Year Ended February 3, 2018 January 28, 2017 January 30, 2016 Options WAEP Options WAEP Options WAEP (53 weeks) 27,353 $ 48.69 28,686 $ 41.68 30,078 $ 34.91 4,702 73.21 4,305 75.04 4,169 72.54 (4,096 ) 32.23 (5,265 ) 30.83 (5,124 ) 25.87 (329 ) 71.40 (373 ) 66.15 (437 ) 55.06 27,630 $ 55.03 27,353 $ 48.69 28,686 $ 41.68 18,976 $ 46.56 18,980 $ 38.69 20,175 $ 31.75 Fiscal Year Ended Shares in thousands February 2,
2019February 3,
2018January 28,
2017 Options WAEP Options WAEP Options WAEP Outstanding at beginning of year 55,260 $ 27.52 54,706 $ 24.35 57,372 $ 20.84 Granted 6,143 53.98 9,404 36.61 8,610 37.52 Exercised (11,670 ) 21.88 (8,192 ) 16.12 (10,530 ) 15.42 Forfeitures (680 ) 38.59 (658 ) 35.70 (746 ) 33.08 Outstanding at end of year 49,053 $ 32.02 55,260 $ 27.52 54,706 $ 24.35 Options exercisable at end of year 34,344 $ 26.95 37,952 $ 23.28 37,960 $ 19.35 2017 and $227.4 million in fiscal 2016.3, 2018:Shares in thousands Shares Aggregate
Intrinsic
Value Weighted
Average
Remaining
Contract Life WAEP 8,014 $ 38,245 9.0 years $ 73.70 18,976 $ 605,624 5.0 years $ 46.56 26,990 $ 643,869 6.2 years $ 54.61 Options outstanding expected to vest represents total unvested options of 8.6 million adjusted for anticipated forfeitures.Performance-Based 2, 2019:Shares in thousands Shares WAEP 13,672 $ 98,458 8.8 years $ 43.73 Options exercisable 34,344 $ 754,018 5.0 years $ 26.95 Total outstanding options vested and expected to vest 48,016 $ 852,476 6.1 years $ 31.72 (1) Reflects 14.6 million unvested options, net of anticipated forfeitures. Awards:Awards performance-based restricted stock, performance-based 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 during fiscal 2018.2019. Restricted stock units, performance share units, and previously-granted performance-based stock awards are collectively referred to as stock awards. These awards were granted without a purchase price to the recipient and are subject to vesting conditions. Vesting conditions includingfor performance share units and performance-based stock awards include specified performance criteria, aligned with management incentive plansgenerally for a period of generally one to three fiscal years. The grant date fair value of the performance-based stock awards is charged to income over the requisite service period during which the recipient must remain employed. The fair value of the performance-based stock awards is determined at date of grant in accordance with ASC Topic 718 and, for performance share units and performance-based stock awards, assumes that performance goals will be achieved. If such goals are not met, or only partially met,achieved at target. Performance share units, performance-based stock awards and related compensation costs recognized are reduced on a pro rata basis.F-23performance-based stock awards and changes during fiscal 20182019 is presented below:Shares in thousands Performance-
based stock
awards Weighted
Average
Grant Date
Fair Value 1,559 $ 72.52 562 76.71 (551 ) 63.77 (47 ) 68.21 1,523 $ 77.37 Shares in thousands Stock Awards Nonvested at beginning of year 3,045 $ 38.68 Granted 1,268 41.17 Vested (859 ) 35.03 Forfeited (32 ) 39.93 Nonvested at end of year 3,422 $ 40.51 562,0061,267,802 shares of restricted stock unit and performance share unit awards, with a weighted average grant date fair value of $41.17, granted in fiscal 2019, 1,124,012 shares of performance-based stock awards, with a weighted average grant date fair value of $76.71,$38.36, granted in fiscal 2018, 513,573and 1,027,146 shares of performance-based stock awards, with a weighted average grant date fair value of $78.50,$39.25, granted in fiscal 2017, and 696,057 shares of performance-based stock awards, with a weighted average grant date fair value of $70.41, granted in fiscal 2016.2017. The fair value of performance-based stock awards that vested was $30.1 million in fiscal 2019, $35.2 million in fiscal 2018, and $38.5 million in fiscal 2017, and $27.1 million in fiscal 2016.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 2018. 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 director’s 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 2018,2019, a total of 331,595607,552 of these deferred shares were outstanding under the plan.:securities.TJXsecurities. TJX also has an unfunded supplemental retirement plan that covers certain key employees and provides additional retirement benefits based on final average compensation for certain of those employees (the “primary benefit”) or, alternatively, based on benefits that would be provided under the funded retirement plan absent Internal Revenue Code limitations (the “alternative benefit”).2015-04– 2015-4– Compensation-retirement benefits (Topic 715) and has selected the measurement date of January 31, the calendar month end closest to the Company’s fiscal year end. In thousands February 3,
2018 January 28,
2017 February 3,
2018 January 28,
2017 (53 weeks ) (53 weeks ) $ 1,269,010 $ 1,213,000 $86,309 $ 84,967 46,845 45,440 1,888 1,835 55,301 56,094 3,316 3,391 67,232 91,114 4,580 740 — (103,197 ) — — (30,993 ) (28,751 ) (5,046 ) (4,624 ) (3,306 ) (4,690 ) — — $ 1,404,089 $ 1,269,010 $91,047 $ 86,309 $ 1,277,216 $ 1,151,151 $77,668 $ 71,273 F-24 In thousands February 3,
2018 January 28,
2017 February 3,
2018 January 28,
2017 (53 weeks ) (53 weeks ) $ 1,176,960 $ 1,119,842 $ — $ — 174,870 143,756 — — 100,000 50,000 5,046 4,624 — (103,197 ) — — (30,993 ) (28,751 ) (5,046 ) (4,624 ) (3,306 ) (4,690 ) — — $ 1,417,531 $ 1,176,960 $ — $ — $ 1,404,089 $ 1,269,010 $ 91,047 $ 86,309 1,417,531 1,176,960 — — $ (13,442 ) $ 92,050 $ 91,047 $ 86,309 $ (13,442 ) $ 92,050 $ 91,047 $ 86,309 $ 1,935 $ 2,313 $ — $ — 243,761 303,612 28,164 26,438 $ 245,696 $ 305,925 $ 28,164 $ 26,438 In thousands February 2,
2019February 3,
2018February 2,
2019February 3,
2018Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 1,404,089 $ 1,269,010 $ 91,047 $ 86,309 Service cost 45,342 46,845 2,391 1,888 Interest cost 54,355 55,301 3,600 3,316 Actuarial (gains)/losses (38,304 ) 67,232 5,955 4,580 Settlements (207,369 ) — — — Benefits paid (33,226 ) (30,993 ) (6,234 ) (5,046 ) Expenses paid (3,717 ) (3,306 ) — — Projected benefit obligation at end of year $ 1,221,170 $ 1,404,089 $ 96,759 $ 91,047 Accumulated benefit obligation at end of year $ 1,100,358 $ 1,277,216 $ 80,166 $ 77,668 In thousands February 2,
2019February 3,
2018February 2,
2019February 3,
2018Change in plan assets: Fair value of plan assets at beginning of year $ 1,417,531 $ 1,176,960 $ — $ — Actual return on plan assets (27,884 ) 174,870 — — Employer contribution 100,000 100,000 6,234 5,046 Settlements (207,369 ) — — — Benefits paid (33,226 ) (30,993 ) (6,234 ) (5,046 ) Expenses paid (3,717 ) (3,306 ) — — Fair value of plan assets at end of year $ 1,245,335 $ 1,417,531 $ — $ — Reconciliation of funded status: Projected benefit obligation at end of year $ 1,221,170 $ 1,404,089 $ 96,759 $ 91,047 Fair value of plan assets at end of year 1,245,335 1,417,531 — — Funded status – excess (asset) obligation $ (24,165 ) $ (13,442 ) $ 96,759 $ 91,047 Net (asset) liability recognized on consolidated balance sheets $ (24,165 ) $ (13,442 ) $ 96,759 $ 91,047 Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income (loss): Prior service cost $ 1,558 $ 1,935 $ — $ — Accumulated actuarial losses 264,160 243,761 30,709 28,164 Amounts included in accumulated other comprehensive income (loss) $ 265,718 $ 245,696 $ 30,709 $ 28,164 million at February 3, 2018 is reflected on the balance sheet as of that date as a current liability of $2.4 million, a long-term liability of $88.6 million, and a long-term asset of $13.4 million. The combined net accrued liability of $178.4 million at January 28, 2017 is reflected on the balance sheet as of that date as a current liability of $4.0 million and a long-term liability of $174.4 million.20192020 for the funded plan is $0.4 million. The estimated net actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in fiscal 20192020 is $12.1$17.7 million for the funded plan and $3.3$3.7 million for the unfunded plan.20182019 and fiscal 2017.2018. TJX uses the BOND: Link model as this model allows for the selection of specific bonds resulting in better matches in timing of the plans’ expected cash flows. Presented below are weighted average assumptions for measurement purposes for determining the obligation at theyear-end measurement date: February 3,
2018 January 28,
2017 February 3,
2018 January 28,
2017 4.00 % 4.40 % 3.80 % 4.00 % 4.00 % 4.00 % 6.00 % 6.00 % February 2,
2019February 3,
2018February 2,
2019February 3,
2018Discount rate 4.30% 4.00% 4.10% 3.80% Rate of compensation increase 4.00% 4.00% 6.00% 6.00% and $55.7 million in fiscal 2016 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 underF-2520192020 for the funded plan. We anticipate making contributions of $2.4$4.8 million to provide current benefits coming due under the unfunded plan in fiscal 2019. Dollars in thousands January 30,
2016 February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks ) (53 weeks ) $ 46,845 $ 45,440 $ 50,080 $ 1,888 $ 1,835 $ 1,562 55,301 56,094 51,710 3,316 3,391 3,033 (69,345 ) (70,535 ) (78,042 ) — — — 377 377 377 — — — 21,557 31,397 33,146 2,852 3,349 3,958 — 31,173 — — — — $ 54,735 $ 93,946 $ 57,271 $ 8,056 $ 8,575 $ 8,553 $(38,293 ) $ 17,894 $ (19,731 ) $ 4,580 $ 740 $ 3,806 (21,557 ) (31,397 ) (33,146 ) (2,852 ) (3,349 ) (3,958 ) — (31,173 ) — — — — (377 ) (377 ) (377 ) — — — $(60,227 ) $(45,053 ) $ (53,254 ) $ 1,728 $(2,609 ) $ (152 ) $ (5,492 ) $ 48,893 $ 4,017 $ 9,784 $ 5,966 $ 8,401 4.40% 4.80%/3.80% 4.00% 4.00% 4.20% 3.70% 6.00% 6.50%/6.00% 6.75% N/A N/A N/A 4.00% 4.00% 4.00% 6.00% 6.00% 6.00% In thousands February 2,
2019February 3,
2018January 28,
2017February 2,
2019February 3,
2018January 28,
2017Net periodic pension cost: Service cost $ 45,342 $ 46,845 $ 45,440 $ 2,391 $ 1,888 $ 1,835 Interest cost 54,355 55,301 56,094 3,600 3,316 3,391 Expected return on plan assets (79,190 ) (69,345 ) (70,535 ) — — — Amortization of prior service cost 377 377 377 — — — Amortization of net actuarial loss 12,250 21,557 31,397 3,409 2,852 3,349 Settlement charge 36,122 — 31,173 — — — Total expense $ 69,256 $ 54,735 $ 93,946 $ 9,400 $ 8,056 $ 8,575 Other changes in plan assets and benefit obligations recognized in other comprehensive income: Net (gain) loss $ 68,770 $ (38,293 ) $ 17,894 $ 5,955 $ 4,580 $ 740 Amortization of net (loss) (12,250 ) (21,557 ) (31,397 ) (3,409 ) (2,852 ) (3,349 ) Settlement charge (36,122 ) — (31,173 ) — — — Amortization of prior service cost (377 ) (377 ) (377 ) — — — Total recognized in other comprehensive income (loss) $ 20,021 $ (60,227 ) $ (45,053 ) $ 2,546 $ 1,728 $ (2,609 ) Total recognized in net periodic benefit cost and other comprehensive income (loss) $ 89,277 $ (5,492 ) $ 48,893 $ 11,946 $ 9,784 $ 5,966 Weighted average assumptions for expense purposes: Discount rate 4.00%/4.40% 4.40% 4.80%/3.80% 3.80% 4.00% 4.20% Expected rate of return on plan assets 6.00%/6.00% 6.00% 6.50%/6.00% N/A N/A N/A Rate of compensation increase 4.00% 4.00% 4.00% 6.00% 6.00% 6.00% non-cashpre-tax 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 Companyre-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.F-26In thousands $ 40,133 $ 2,483 43,782 42,591 47,693 3,517 52,158 4,503 56,718 4,972 352,753 27,953 In thousands Fiscal Year 2020 $ 25,557 $ 4,799 2021 30,134 3,684 2022 35,072 4,625 2023 40,515 47,780 2024 46,200 6,104 2025 through 2029 313,971 32,706 2018 and January 28, 2017:2018: Funded Plan at February 2, 2019 In thousands Level 1 Level 2 Total Asset category: Short-term investments $ 111,803 $ — $ 111,803 Equity Securities 226,042 — 226,042 Fixed Income Securities: Corporate and government bond funds — 376,438 376,438 Futures Contracts — 1,029 1,029 Total assets in the fair value hierarchy $ 337,845 $ 377,467 $ 715,312 Assets measured at net asset value* — — 530,023 Fair value of assets $ 337,845 $ 377,467 $ 1,245,335 Funded Plan at February 3, 2018 In thousands Level 1 Level 2 Total Asset category: Short-term investments $ 109,183 $ — $ 109,183 Equity Securities 279,635 — 279,635 Fixed Income Securities: Corporate and government bond funds — 420,117 420,117 Futures Contracts — 337 337 Total assets in the fair value hierarchy $ 388,818 $ 420,454 $ 809,272 Assets measured at net asset value* — — 608,259 Fair value of assets $ 388,818 $ 420,454 $ 1,417,531 Funded Plan at January 28, 2017 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 * In accordance with Subtopic820-10, 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-27 Target Allocation February 3,
2018 January 28,
2017 50% 47% 44% 50% 46% 51% — 7% 5% Target Allocation February 2,
2019February 3,
2018Return-seeking assets 50% 43% 47% Liability-hedging assets 50% 49% 46% All other – primarily cash —% 8% 7% 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 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. Risks are sought to be mitigated through asset diversification and the use of multiple investment managers. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies. Assets under the plans totaled $1,787.9 million as of December 31, 2017 and $1,480.9 million as of December 31, 2016, and are invested in a variety of funds. Employees may contribute up to 50% of eligible pay, subject to limitations. TJX matches employee contributions, up to 5% of eligible pay, including a basic match at rates of 25% or 75% (based upon date of hire and other eligibility criteria) plus a discretionary match, generally up to 25%, based on TJX’s performance. TJX may also make additional discretionary contributions. Eligible employees are automatically enrolled in the U.S. plan at a 2% deferral rate, unless the employee elects otherwise. The total cost to TJX for these plans was $60.8 million in fiscal 2019, $54.5 million in fiscal 2018 and $45.6 million in fiscal 2017 and $41.9 million in fiscal 2016.2017. The plans includepreviously included a TJX stock fund in which participants could invest a portion of TJX’s matching contribution. The TJX stock fund was closed to new investments, other than reinvestment of dividends, at the end of calendar 2015 and subsequent to year-end, was eliminated from the plans.plans during fiscal 2019. The TJX stock fund represented 3.9% of plan assets at December 31, 2017 and 6.2% of plan assets at December 31, 2016.2017 and $4.5 million in fiscal 2016.2017. Although the plan is unfunded, in order to help meet its future obligations TJX transfers an amount generally equal to employee deferrals and the related company match to a separate “rabbi” trust. The trust assets, which are invested in a variety of mutual funds, are included in other assets on the balance sheets.F-28maintainscontributes to retirement/deferred savings plans for eligible associatesAssociates at certain of its foreign subsidiaries. We contributed $15.3 million for these plans in fiscal 2019, $12.6 million for these plans in fiscal 2018 $10.2 million for these plans in fiscal 2017 and $9.7$10.2 million in fiscal 2016.Plans:Plans and $13.4 million in fiscal 2016 to the Legacy Plan of the National Retirement Fund (formerly,(EIN #13-6130178, plan #1), the Adjustable Plan of the National Retirement Fund)Fund (EIN#13-6130178, plan #001)#2), and their respective successor funds described below. TJX was listed in the Form 5500 for the Legacy Plan of the National Retirement Fund and the Adjustable Plan of the National Retirement Fund (EIN#13-6130178, plan #002) and was listed in each plan’s Form 5500 as providing more than 5% of the total contributions for the plan year ending December 31, 2016.2017. Based on information available to TJX, effective January 1, 2018 a portion of each of the Legacy Plan of the National Retirement Fund and the Adjustable Plan of the National Retirement Fund was transferred to the Legacy Plan of the UNITE HERE Retirement Fund (EIN #82-0994119, plan #1) and the Adjustable Plan of the UNITE HERE Retirement Fund (EIN #82-0994119, plan #2), respectively, two newly established multiemployer defined benefit pension plans. In addition, based on information available to TJX, the Pension Protection Act Zone Status for each of the Legacy Plan of the National Retirement Fund and the Legacy Plan of the UNITE HERE Retirement Fund is Critical and a rehabilitation plan hasplans have been implemented. In addition, based on information available to TJX, a portion of the National Retirement Fund that is related to UNITE HERE participants was transferred to a newly established fund at the end of 2017. TJX has not yet determined the effect of any such transfer.Postretirement Medical: TJX previously maintained a postretirement medical plan that provided limited postretirement medical benefits to retirees who were 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 apre-tax benefit of $5.5 million in the first quarter of fiscal 2017.2018 and January 28, 2017.2018. All amounts are net of unamortized debt discounts.In thousands February 3,
2018 January 28,
2017 $ 499,766 $ 499,722 749,750 749,675 993,597 992,851 (12,506 ) (14,649 ) $ 2,230,607 $ 2,227,599 F-29In thousands February 2,
2019February 3,
2018General corporate debt: 2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $189 and $234 in fiscal 2019 and 2018, respectively) $ 499,811 $ 499,766 2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76% after reduction of unamortized debt discount of $174 and $250 in fiscal 2019 and 2018, respectively) $ 749,826 $ 749,750 2.25% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $5,657 and $6,403 in fiscal 2019 and 2018, respectively) $ 994,343 $ 993,597 Debt issuance cost $ (10,364 ) $ (12,506 ) Total long-term debt $ 2,233,616 $ 2,230,607 3, 20182, 2019 are as follows:In thousands Long-Term
Debt $ — — — 750,000 — 1,500,000 (6,887 ) (12,506 ) $ 2,230,607 In thousands Fiscal Year 2020 $ — 2021 — 2022 750,000 2023 — 2024 500,000 Later years 1,000,000 Less amount representing unamortized debt discount (6,020 ) Less amount representing debt issuance cost (10,364 ) Aggregate maturities of long-term debt $ 2,233,616 3, 2018,2, 2019, 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. TJX 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 thepre-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%.3, 2018,2, 2019, TJX had two $500 million revolving credit facilities, one which matures in March 2020 and one which matures in March 2022. The $500 million revolving credit facilityfacilities maturing in March 2020 wasand March 2022 were also outstanding at January 28, 2017, while the facility maturing in 2022 had a March 2021 maturity date as of that date.February 3, 2018. In March 2017, the maturity of 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. and January 28, 2017, and during the years then ended, there were no amounts outstanding under these facilities. and January 28, 2017, 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 February 2, 2019 and February 3, 2018, and January 28, 2017, and during the years then ended, there were no amounts outstanding on the Canadian credit line for operating expenses. As of February 2, 2019 and February 3, 2018, and January 28, 2017, our European business at TJX International had an uncommitted credit line of £5 million. As of February 2, 2019 and February 3, 2018, and January 28, 2017, and during the years then ended, there were no amounts outstanding on the European credit line.F-302017fiscal 2018 and fiscal 2019 tax expense, including reducing the U.S. federal corporate tax rate from 35% to 21%, expanded rules regarding expensing of fixed assets, and requiredone-time transition tax on certain undistributed earnings of foreign subsidiaries. Other provisions that are not yetbecame effective but may impactin Fiscal 2019 impacting income taxes in future years include: an exemption from U.S. tax on dividends of future foreign earnings, expanded limitations on executive compensation, and a minimum tax on certain foreign earnings in excess of 10% of the foreign subsidiaries tangible assets (i.e. global intangiblelow-taxed income or “GILTI”). Because of the complexity of the new provisions, the Company is continuing to evaluate how the provisions will be accounted under GAAP. We do not expect these provisions to have, and allows a significant impact on the Company when effective.To the extent our accounting for certain income tax effects of the 2017 Tax Act is incomplete but we are able to determine a reasonable estimate, we recorded a provisional estimate in the financial statements. The provisional tax benefit of the 2017 Tax Act is based on currently available information and interpretations, which are continuing to evolve. We will continue to analyze additional information and guidance related to the 2017 Tax Act as supplemental legislation, regulatory guidance, or evolving technical interpretations become available. The final impacts may differ from the recorded amounts as of February 3, 2018, and we will continue to refine such amounts within the measurement period provided by Staff Accounting Bulletin No. 118. We expect to completehave completed our analysis no later thanin the fourth quarter of fiscal 2019. Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks ) $ 3,255,057 $ 3,196,370 $ 3,102,304 601,531 526,673 555,996 $ 3,856,588 $ 3,723,043 $ 3,658,300 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) United States $ 3,463,785 $ 3,255,057 $ 3,196,370 Foreign $ 709,426 $ 601,531 $ 526,673 Income before provision for income taxes $ 4,173,211 $ 3,856,588 $ 3,723,043 Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks ) $ 1,063,141 $ 1,068,778 $ 992,094 160,650 213,505 208,357 161,974 148,367 149,408 (164,523 ) (3,107 ) 34,620 27,595 (10,583 ) (9,979 ) (197 ) 7,849 6,142 $ 1,248,640 $ 1,424,809 $ 1,380,642 F-31 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Current: Federal $ 711,369 $ 1,063,141 $ 1,068,778 State 251,187 160,650 213,505 Foreign 238,692 161,974 148,367 Deferred: Federal (62,278 ) (164,523 ) (3,107 ) State (27,831 ) 27,595 (10,583 ) Foreign 2,274 (197 ) 7,849 Provision for income taxes $ 1,113,413 $ 1,248,640 $ 1,424,809 Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 $ 40,088 $ 27,396 3,637 5,107 232,887 412,391 42,999 57,223 51,281 67,662 25,599 48,463 $ 396,491 $ 618,242 (42,332 ) (29,273 ) $ 354,159 $ 588,969 $ 437,621 $ 569,377 45,125 51,077 12,628 51,976 65,013 213,948 20,271 10,398 $ 580,658 $ 896,776 $ (226,499 ) $ (307,807 ) $ 6,558 $ 6,193 (233,057 ) (314,000 ) $ (226,499 ) $ (307,807 ) Fiscal Year Ended In thousands February 2,
2019February 3,
2018Deferred tax assets: Net operating loss carryforward $ 49,489 $ 40,088 Reserves for lease obligations 2,799 3,637 Pension, stock compensation, postretirement and employee benefits 273,482 232,887 Leases 45,740 42,999 Accruals and reserves 42,709 51,281 Other 65,776 25,599 Total gross deferred tax assets $ 479,995 $ 396,491 Valuation allowance (51,711 ) (42,332 ) Net deferred tax asset $ 428,284 $ 354,159 Deferred tax liabilities: Property, plant and equipment $ 497,906 $ 437,621 Capitalized inventory 42,981 45,125 Tradename/intangibles 14,019 12,628 Undistributed foreign earnings 1,856 65,013 Other 23,246 20,271 Total deferred tax liabilities $ 580,008 $ 580,658 Net deferred tax (liability) $ (151,724 ) $ (226,499 ) Non-current asset $ 6,467 $ 6,558 Non-current liability (158,191 ) (233,057 ) Total $ (151,724 ) $ (226,499 ) 3, 2018.2, 2019. We have not provided for state and foreign withholding taxes on the approximately $1$1.4 billion of undistributed earnings related to all other foreign subsidiaries as we have provisionally asserted that thesesuch earnings are considered to be indefinitely reinvested in the business. The net amount of unrecognized state and foreign withholding tax liabilities related to the undistributed earnings is approximately $31$1 million. and January 28, 2017, for state income tax purposes, TJX had net operating loss carryforwards of $113.9$133.2 million and $99.2$113.9 million respectively, which expire, if unused, in the years 20192020 through 2037.2038. TJX has analyzed the realization of the state net operating loss carryforwards on an individual state basis. For those states where the Company has determined that it is more likely than not that the state net operating loss carryforwards will not be realized, a valuation allowance of $8.9$10 million has been provided for the deferred tax asset as of February 3, 20182, 2019 and $6.8$8.9 million as of January 28, 2017. and January 28, 2017, the Company had available for foreign income tax purposes (related to Australia, Austria and the Netherlands) net operating loss carryforwards of $111$138.8 million and $75$111 million respectively, of which $13.6$18.3 million will expire, if unused, in fiscal years 2025 through 2027.2028. The remaining loss carryforwards do not expire. For the deferred tax assets associated with the net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax assets will not be realized, TJX had valuation allowances recorded of approximately $41.7 million as of February 2, 2019, and approximately $33.4 million as of February 3, 2018, and approximately $22.5 million as of January 28, 2017.F-32 Fiscal Year Ended February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks) 33.7 % 35.0 % 35.0 % 3.6 3.5 3.5 (0.1 ) (0.2 ) (0.7 ) (1.3 ) — — (2.3 ) — — (1.2 ) — (0.1 ) 32.4 % 38.3 % 37.7 % TJX’s U.S. federal statutory rate of 33.7% is a blended rate of the year due to the enactment of the 2017 Tax Act. Fiscal Year Ended February 2,
2019February 3,
2018January 28,
2017 (53 weeks) U.S. federal statutory income tax rate 21.0 % 33.7 % 35.0 % Effective state income tax rate 4.5 3.6 3.5 Impact of foreign operations 1.2 (0.1 ) (0.2 ) Excess share-based compensation (1.2 ) (1.3 ) — Impact of 2017 Tax Act 1.5 (2.3 ) — All other (0.3 ) (1.2 ) — Worldwide effective income tax rate 26.7 % 32.4 % 38.3 % 20182019 as compared to fiscal 2017.2018. The decrease is primarily driven by the decrease in the effective incomeU.S. federal statutory rate to 21%. The reduced tax rate was primarily due to the favorable effect ofrates per the 2017 Tax Act excess tax benefit from share-based compensation attributable to the adoptionwere applicable for all of ASU2016-09, and the jurisdictional mixfiscal 2019 versus only a portion of income.We have reasonably estimated the effects of the 2017 Tax Act and recorded a provisional benefit of approximately $88 million in our financial statements as of February 3,fiscal 2018. This amount consists of a net benefit of $281 million for the remeasurement of deferred taxes as of December 22, 2017 due to the corporate tax rate reduction and the reversal of all previous deferred U.S. tax liabilities, reduced for the applicable state and foreign withholding taxes, on undistributed earnings, reduced by a net expense of $193 million for the transition tax of which, $16 million is expected to be paid during fiscal 2019.(net of federal benefit on state issues)$233.4 million as of February 2, 2019, $57.3 million as of February 3, 2018 and $38.5 million as of January 28, 2017 and $34.1 million as of January 30, 2016. Fiscal Year Ended In thousands $ 49,092 $ 43,326 $ 55,619 6,504 7,018 2,248 7,990 327 11,707 (587 ) (334 ) (23,874 ) (1,295 ) (1,245 ) (389 ) — — (1,985 ) $ 61,704 $ 49,092 $ 43,326 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017Balance at beginning of year $ 61,704 $ 49,092 $ 43,326 Additions for uncertain tax positions taken in current year 7,406 6,504 7,018 Additions for uncertain tax positions taken in prior years 177,741 7,990 327 Reductions for uncertain tax positions taken in prior years — (587 ) (334 ) Reductions resulting from lapse of statute of limitations (1,388 ) (1,295 ) (1,245 ) Settlements with tax authorities (1,268 ) — — Balance at end of year $ 244,195 $ 61,704 $ 49,092 2017 and $39.0 million as of January 30, 2016., and in Canada, 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 2009 are no longer subject to examination.2017 and $1.6 million for the year ended January 30, 2016.2017. The accrued amounts for interest and penalties are $23.6 million as of February 2, 2019, $11.9 million as of February 3, 2018 and $8.0 million as of January 28, 2017 and $7.0 million as of January 30, 2016.F-33statutestatutes of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those represented on the financial statements as of February 3, 2018.2, 2019. During the next twelve months, it is reasonably possible that state tax audit resolutions may reduce unrecognized tax benefits by $0 to $21$30 million, which would reduce the provision for taxes on earnings.ten-year initial ten year terms and options to extend for one or more five-yearfive year periods in the U.S. and Canada andCanada; initial ten to fifteen year terms in Europe and initial seven to ten year terms in Australia, some of which have options to extend. Many of the Company’s leases contain escalation clauses and we have the right to terminate some of the leases before the expiration date under specified circumstances and some with specified payments. In addition, TJX is generally required to pay insurance, real estate taxes and other operating expenses including, in some cases, rentals based on a percentage of sales. These expenses in the aggregate were approximatelyone-third of the total minimum rent in fiscal 2019, fiscal 2018 and fiscal 2017 and fiscal 2016 and are not included in the table below.3, 2018:In thousands Operating
Leases $ 1,600,536 1,534,650 1,389,854 1,208,046 1,025,314 2,736,351 $ 9,494,751 In thousands Fiscal Year 2020 $ 1,676,700 2021 1,603,378 2022 1,441,444 2023 1,253,420 2024 1,042,184 Later years 2,774,845 Total future minimum lease payments $ 9,791,971 $1,591.4 million$1.7 billion for fiscal 2019, $1.6 billion for fiscal 2018 $1,435.2 millionand $1.4 billion for fiscal 2017 and $1,365.6 million for fiscal 2016.2017. Rental expense includes contingent rent and is reported net of sublease income. Contingent rent paid was $22.8 million in fiscal 2019, $18.4 million in fiscal 2018 and $14.7 million in fiscal 2017 and $15.72017. Sublease income was $1.2 million in fiscal 2016. Sublease income was2019, $1.3 million in fiscal 2018 and $1.2 million in fiscal 2017 and $0.9 million in fiscal 2016.3, 20182, 2019 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 (see Lease Accounting within Note A – Basis of Presentation and Summary of Accounting Policies of Notes to Consolidated Financial Statements).purposes. The build-to-suit lease assets related to these properties are included in “land and buildings” and the related liabilities of $221.9$243.3 million are included as build-to-suit lease obligations in “other long-term liabilities.”2018 and $41.2 million as of January 28, 2017.2018. Letters of credit are issued by TJX primarily for the purchase of inventory.F-34Long Term Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 $ 686,294 $ 630,049 199,029 170,490 90,336 111,963 234,183 214,001 399,482 362,473 87,546 84,363 200,005 199,602 626,086 547,523 $ 2,522,961 $ 2,320,464 Fiscal Year Ended In thousands February 2,
2019February 3,
2018Employee compensation and benefits, current $ 737,920 $ 686,294 Dividends payable 241,972 199,029 Accrued capital additions 119,172 90,336 Rent, utilities and occupancy, including real estate taxes 243,192 234,183 Merchandise credits and gift certificates 450,302 399,482 Sales tax collections and V.A.T. taxes 170,249 200,005 All other current liabilities 770,269 713,632 Total accrued expenses and other current liabilities $ 2,733,076 $ 2,522,961 purchased services and other items, each of which is individually less than 5% of current liabilities. Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 $ 442,624 $ 471,728 263,178 231,681 88,747 77,887 176,772 — 44,753 36,713 221,917 176,232 49,266 45,573 33,248 34,140 $ 1,320,505 $ 1,073,954 Fiscal Year Ended In thousands February 2,
2019February 3,
2018Employee compensation and benefits, long-term $ 449,065 $ 442,624 Accrued rent 269,057 263,178 Landlord allowances 80,425 88,747 Income taxes payable — 176,772 Tax reserve, long-term 235,467 44,753 Build-to-suit lease obligations 243,258 221,917 Asset retirement obligation 49,692 49,266 All other long-term liabilities 27,278 33,248 Total other long-term liabilities $ 1,354,242 $ 1,320,505 Obligations:Obligations$48.7$37.1 million as of February 3, 2018.2, 2019. We believe that most or all of these contingent obligations will not revert to us and, to the extent they do, will be resolved for substantially less due to mitigating factors including our expectation to further sublet.F-35Contingencies:associatesAssociates in the U.S. The lawsuits allege violations of the Fair Labor Standards Act and of state wage and hour and other labor statutes. TJX is also defendinga defendant in a putative class action claims on behalf of customers relating to TJX’s compare at pricing. The lawsuits are in various procedural stages and seek monetary damages, injunctive relief and attorneys’ fees. In connection with ongoing litigation, an immaterial amount has been accrued in the accompanying financial statements. Fiscal Year Ended In thousands February 3,
2018 January 28,
2017 January 30,
2016 (53 weeks) $ 64,308 $ 72,619 $ 64,188 1,289,964 1,282,172 1,301,122 $ (27,207 ) $ (94,291 ) $ (30,767 ) 27,207 94,291 30,767 29,836 29,195 20,315 (21,627 ) (20,908 ) 33,384 Fiscal Year Ended In thousands February 2,
2019February 3,
2018January 28,
2017 (53 weeks) Cash paid for: Interest on debt $ 64,007 $ 64,308 $ 72,619 Income taxes 1,147,511 1,289,964 1,282,172 Non-cash investing and financing activity: Build-to-suit construction in progress $ (40,911 ) $ (27,207 ) $ (94,291 ) Build-to-suit lease obligation 40,911 27,207 94,291 Dividends payable 42,943 29,836 29,195 Property additions 28,836 (21,627 ) (20,908 ) 20182019 and fiscal 20172018 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(2) Fourth
Quarter(3) $ 7,784,024 $ 8,357,700 $ 8,762,220 $ 10,960,720 2,253,952 2,385,025 2,612,200 3,111,320 536,279 552,957 641,436 877,276 0.83 0.87 1.01 1.39 0.82 0.85 1.00 1.37 $ 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 Amounts in thousands except per share amounts Fiscal Year Ended February 2, 2019 (52 weeks) Net sales $ 8,688,720 $ 9,331,115 $ 9,825,759 $ 11,127,340 2,510,481 2,695,300 2,842,276 3,093,700 Net income 716,381 739,626 762,253 841,538 0.57 0.59 0.62 0.69 0.56 0.58 0.61 0.68 Fiscal Year Ended February 3, 2018 (53 weeks) Net sales $ 7,784,024 $ 8,357,700 $ 8,762,220 $ 10,960,720 2,253,952 2,385,025 2,612,200 3,111,320 Net income 536,279 552,957 641,436 877,276 0.41 0.43 0.51 0.70 0.41 0.42 0.50 0.69 (1) Gross earnings equal net sales less cost of sales, including buying and occupancy costs. (2) The third quarter of fiscal 20172019 includes a loss on early extinguishment of debt and a$36.1 million pension settlement charge.(3) F-36(4) Adjusted for two-for-one stock split completed in November 2018. See Note D - Capital Stock and Earnings Per Share.