UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM10-Q

(mark one)

For the quarterly period ended OctoberApril 29, 20162017

OR

For the transition period from                    to                    

Commission file number1-4908

The TJX Companies, Inc.

(Exact name of registrant as specified in its charter)

(508)390-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  ☒    NO  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  ☒    NO  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company.company or an “emerging growth company”. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” and “emerging growth company” in Rule12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).    YES  ☐    NO  ☒

The number of shares of registrant’s common stock outstanding as of OctoberApril 29, 2016: 651,900,7392017: 643,276,269

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

The accompanying notes are an integral part of the unaudited consolidated financial statements.

2

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

The accompanying notes are an integral part of the unaudited consolidated financial statements.

3

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEBALANCE SHEETS

(UNAUDITED)

IN THOUSANDS, EXCEPT SHARE DATA

The accompanying notes are an integral part of the unaudited consolidated financial statements.

4

THE TJX COMPANIES, INC.

CONSOLIDATED BALANCE SHEETSSTATEMENTS OF CASH FLOWS

(UNAUDITED)

IN THOUSANDS EXCEPT SHARE DATA

The accompanying notes are an integral part of the unaudited consolidated financial statements.

5

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTSSTATEMENT OF CASH FLOWSSHAREHOLDERS’ EQUITY

(UNAUDITED)

IN THOUSANDS

The accompanying notes are an integral part of the unaudited consolidated financial statements.

6

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN THOUSANDS

The accompanying notes are an integral part of the unaudited consolidated financial statements.

7

THE TJX COMPANIES, INC.

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Note A. Summary of Significant Accounting Policies

Basis of Presentation:The consolidated interim financial statements are unaudited and, in the opinion of management, reflect all normal recurring adjustments, accruals and deferrals among periods required to match costs properly with the related revenue or activity, considered necessary by The TJX Companies, Inc. (together with its subsidiaries, “TJX”) for a fair statement of its financial statements for the periods reported, all in conformity with accounting principles generally accepted in the United States of America (“GAAP”) consistently applied. The consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements, including the related notes, contained in TJX’s Annual Report on Form10-K for the fiscal year ended January 30, 201628, 2017 (“fiscal 2016”2017”).

These interim results are not necessarily indicative of results for the full fiscal year, becauseyear. TJX’s business, in common with the businesses of retailers generally, is subject to seasonal influences, with higher levels of sales and income generally realized in the second half of the year.

The January 30, 201628, 2017 balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

Fiscal Year: TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year. The current fiscal year ends January 28, 2017February 3, 2018 (“fiscal 2017”2018”) and is a 52-week53-week fiscal year. Fiscal 20162017 was also a52-week fiscal year.

Share-Based Compensation:TJX accounts for share-based compensation by estimating the fair value of each award on the date of grant. TJX uses the Black-Scholes option pricing model for stock options awarded and uses the market price on the grant date for performance-based restricted stockshare awards. Total share-based compensation expense was $27.5$24.1 million for the quarter ended OctoberApril 29, 20162017 and $27.3$25.0 million for the quarter ended October 31, 2015. Total share-based compensation expense was $77.4 million for the nine months ended October 29, 2016 and $71.1 million for the nine months ended October 31, 2015.April 30, 2016. These amounts include stock option expense as well as restricted and deferredperformance-based stock amortization. There were options to purchase 0.71.6 million shares of common stock exercised during the quarter ended OctoberApril 29, 2016 and options to purchase 4.0 million shares of common stock exercised during the nine months ended October 29, 2016.2017. There were options outstanding to purchase 28.725.6 million shares of common stock as of OctoberApril 29, 2016.2017. As of OctoberApril 29, 2016,2017, there was $100.7$146.7 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under TJX’s stock incentive plan.

Cash and Cash Equivalents: TJX generally considers highly liquid investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. As of OctoberApril 29, 2016,2017, TJX’s cash and cash equivalents held by its foreign subsidiaries were $1,138.2$1,233.4 million, of which $253.3$263.2 million was held in countries where TJX has the intention to reinvest any undistributed earnings indefinitely.

Investments: Investments with maturities greater than 90 days but less than one year at the date of purchase are included in short-term investments. These investments are classified as trading securities and are stated at fair value. Investments are classified as either short- or long-term based on their original maturities. TJX’s investments are primarily high-grade commercial paper, institutional money market funds and time deposits with major banks.

Merchandise Inventories: Inventories are stated at the lower of cost or market. TJX uses the retail method for valuing inventories at all of its businesses, except at Sierra Trading Post (“STP”) and Trade Secret.T.K. Maxx in Australia. The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as it has not been fully processed for sale (e.g. inventory in transit and unprocessed inventory in our distribution centers). Under the retail method, TJX utilizes a permanent markdown strategy and lowers the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in the stores. TJX accrues for inventory obligations at the time title transfers, which is typically at the time when inventory is shipped. As a result, merchandise inventories on TJX’s balance sheet include an accrual forin-transit inventory of $785.0$501.5 million at OctoberApril 29, 2016, $690.32017, $641.9 million at January 30, 201628, 2017 and $816.6$544.0 million at October 31, 2015.April 30, 2016. Comparable amounts were reflected in accounts payable at those dates.

8

Leases:TJX begins to record rent expense when it takes possession of a store, which is typically 30 to 60 days prior to the opening of the store and generally occurs before the commencement of the lease term, as specified in the lease. Lease agreements involving property built to our specifications are reviewed to determine if our involvement in the construction project requires that we account for the project costs as if we were the owner for accounting purposes. We have entered into several lease agreements where we are deemed the owner of a construction project for accounting purposes. Thus, during construction of the facility the construction costs incurred by the lessor are included as a construction in progress asset along with a related liability of the same amount on our balance sheet. Upon completion of the project, a sale-leaseback analysis is performed to determine if the Company should record a sale to remove the related asset and related obligation and record the lease as either an operating or capital lease obligation. If the Company is precluded from derecognizing the asset when construction is complete, due to continuing involvement beyond a normal leaseback, the lease is accounted for as a financing transaction and the recorded asset and related financing obligation remain on the Consolidated Balance Sheets. Accordingly, the asset is depreciated over its estimated useful life in accordance with the Company’s policy and a portion of the lease payments is allocated to ground rent and treated as an operating lease. The portion of the lease payment allocated to ground rental expense is based on the fair value of the land at the commencement of construction. Lease payments allocated to the non-land asset are recognized as reductions to the financing obligation and interest expense.

NewRecently Issued Accounting Standards:Standards: In March 2016,May 2014, a pronouncement was issued that aimscreates common revenue recognition guidance for GAAP. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to simplify several aspectsdepict the transfer of accounting and reporting for share-based payment transactions. One provision requirespromised goods or services to customers in an amount that excess income tax benefits and tax deficiencies relatedreflects the consideration to share-based payments be recognized within income tax expense inwhich the statement of income, rather than within additional paid-in capital on the balance sheet. The Company is currently evaluating the potential impact that this provision, which isentity expects to be applied prospectively,entitled in exchange for those goods or services. The new standard was originally scheduled to be effective for annual reporting

7

periods beginning after December 15, 2016, including interim periods within that reporting period. In April 2015, the Financial Accounting Standards Board proposed an update to this rule which deferred its effective date for one year. The new standard will have on its financial statements. The Company does not expect the other provisions within the pronouncement will have a material impact on its financial statements. The guidance isbe effective for annual reporting periods beginning after December 15, 2016, including2017, and interim periods therein, with an option to adopt the standard early. The standard shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. For TJX, the standard will be effective in the first quarter of the fiscal year ending January 26, 2019. We 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 the Company’s revenue. We continue to evaluate other revenue streams such ase-commerce sales and shipping revenue, and there may be a slight change in the timing of when such revenue is recognized. The new standard will require a change in the presentation of our sales return reserve on the balance sheet, which we record net. The new standard will require the reserve to be established at the gross sales value with an asset established for the value of the merchandise returned. We do not expect this change to have material impact on our financial condition or results of operations.

In February 2016, a pronouncement was issued that aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. The new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption permitted.is permitted and modified retrospective application is required. The Company expects this standard to have a material impact on its statement of financial condition as it will record a significant asset and liability associated with its more than 3,800 leased locations. We cannot assess the income statement impact at this time as we need to assess if the initial lease term will differ under the new standard versus current accounting practice. If the lease term remains unchanged the income statement impact of the new standard is not expected to be material. The Company is in the process of evaluating its lease portfolio and identifying what additional data will be needed to comply with the new standard. We are also evaluating available software options and system support that will be required to implement the new accounting process. We do not currently plan to adopt early.

In August 2016, a pronouncement was issued that addresses diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. The new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. The standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. TJX is in the process of evaluatingdoes not expect this guidancestandard to determine thehave a material impact it will have on our consolidated financial statements.

In October 2016,January 2017, a pronouncement was issued that aims to reducesimplify the diversity in practice and complexity associated with accounting forsubsequent measurement of goodwill by eliminating Step 2 from the income tax consequencesgoodwill impairment test. Under the new guidance, goodwill impairment will be measured as the amount by which the carrying value exceeds the fair value. The loss recognized should not exceed the total amount of intra-entity transfers of assets other than inventory. Current GAAP prohibitsgoodwill allocated to the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs.reporting unit. The new guidance will be effective for annual reporting periods beginning after December 15, 2017,2019, including interim reporting periods within thoseperiods. Early adoption is permitted for annual reporting periods, with earlyor interim goodwill impairment tests performed on testing dates after January 1, 2017. TJX does not expect the adoption permitted in the first interim period only. The amendments areof this standard to be appliedhave a material impact on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. TJX is in the process of evaluating this guidance to determine the impact it will have on our consolidated financial statements.

In May 2014,March 2017, a pronouncement was issued that creates common revenue recognition guidance for GAAP. The new guidance supersedes most preexisting revenue recognition guidance. The core principlerequires an employer report the service cost component of net periodic pension and net periodic post retirement cost in the guidance is that an entity should recognize revenue to depictsame line item as other compensation costs arising from services rendered by the transferemployees during the period. It also requires the other components of promised goods or services to customers in an amount that reflects the consideration to which the entity expectsnet periodic pension and net periodic postretirement benefit cost to be entitledpresented in exchangethe income statement separately from the service cost component and outside a subtotal of income from operations. Additionally, only the service cost component is eligible for those goods or services. The new standard was originally scheduled to becapitalization. This pronouncement is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. In April 2015, the Financial Accounting Standards Board proposed an update to this rule which deferred its effective date for one year. The proposed update stipulates the new standard would be effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, withduring those fiscal years. Early adoption is permitted as of the beginning of an optionannual period for which financial statements have not been issued or made available for issuance. We are evaluating the presentation of the other components of net benefit cost.

Recently Adopted Accounting Standards: In the first quarter of 2017, TJX adopted a pronouncement that aims to adoptsimplify several aspects of accounting and reporting for share-based payment transactions. One provision within this pronouncement requires that excess income tax benefits and tax deficiencies related to share-based payments be recognized within income tax expense in the standardstatement of income, rather than within additionalpaid-in capital on the originally scheduled effective date. The standard shall be

98

balance sheet. The adoption of this provision is to be applied either retrospectivelyprospectively. The impact to each period presented or as a cumulative-effect adjustment asTJX’s results of the date of adoption. For TJX, the standard will be effectiveoperations related to this provision in the first quarter of 2017 was a decrease in the fiscal year ending January 26, 2019. TJX is currently evaluatingprovision for income taxes of $24.6 million. 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 ofis difficult to predict. This change and the newremaining provisions within the pronouncement did not have a material impact on itsour consolidated financial statements.

In February 2016, a pronouncement was issued that aims to increase transparency and comparability among organizations by requiring lessees to recognize lease assets and lease liabilities onNote B. Property at Cost

Presented below are the balance sheet and requiring disclosurecomponents of key information about leasing arrangements. The new standard is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods; early adoption is permitted and modified retrospective application is required. TJX is in the process of evaluating this guidance to determine the impact it will have on our financial statements.

In April 2015, a pronouncement was issued that requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance was effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. For TJX, the standard was effective in the first quarter of fiscal 2017. As a result, we have recast the January 30, 2016 consolidated balance sheet to conform to the current period presentation. The adoption of this standard reduced previously-presented other assets by $9.1 million and reduced long-term debt by $9.1 millionproperty at cost as of April 29, 2017, January 28, 2017 and April 30, 2016. In addition, we have also recast the October 31, 2015 consolidated balance sheet to conform to the current period presentation. The adoption of this standard reduced previously-presented other assets by $9.5 million and reduced long-term debt by $9.5 million as of October 31, 2015.

In November 2015, a pronouncement was issued that requires entities to present deferred tax assets (DTAs) and deferred tax liabilities (DTLs) as noncurrent in a classified balance sheet. It simplified then existing guidance, which required entities to separately present DTAs and DTLs as current or noncurrent in a classified balance sheet. TJX adopted this guidance as of January 30, 2016, and applied it retrospectively. The impact on the October 31, 2015 consolidated balance sheet was to reduce previously-presented current DTAs by $120.9 million, decreased long-term DTAs by $2.6 million and reduced long-term DTLs by $123.5 million as of October 31, 2015.

Note B. Acquisition of Trade Secret

On October 24, 2015, TJX purchased Trade Secret, an off-price retailer that operates 35 stores in Australia, for AUD$83.3 million (US$59.4 million).

The following table presents the final allocation of the purchase price to the assets and liabilities acquired based on their estimated fair values as of October 24, 2015 (in thousands):2016:

Goodwill and intangible assets include goodwill of $25 million and identified intangible assets of $12Depreciation expense was $172.6 million for the value ofthree months ended April 29, 2017 and $160.0 million for the tradename “Trade Secret” which is being amortized over 10 years.three months ended April 30, 2016. Depreciation expense was $658.8 million for the twelve months ended January 28, 2017.

The operating results of Trade SecretDuring fiscal 2017 the Company identified fully depreciated assets that were no longer in use and should have been included in TJX’swritten off during fiscal 2017 or prior periods. The April 30, 2016 property at cost and accumulated depreciation was reduced by $840 million. There was no impact to net property at cost. This error was not material to our consolidated financial statements, from the date of acquisition and Trade Secret is now part of the TJX International segment along with our European operations. Pro forma results of operation assuming the acquisition of Trade Secret occurred as of the beginning of fiscal 2015however we have not been presented as the inclusion of the results of operationscorrected amounts for the acquired business would notquarter ended April 30, 2016 to reflect the write-off that should have produced a material impact on TJX’s sales, net income or earnings per share as reported.been recorded at that time.

10

Note C. Accumulated Other Comprehensive Income (Loss)

Amounts included in accumulated other comprehensive income (loss) are recorded net of the related income tax effects. The following table details the changes in accumulated other comprehensive income (loss) for the related periods:

Note D. Capital Stock and Earnings per Share

Capital Stock: TJX repurchased and retired 5.24.5 million shares of its common stock at a cost of $400.0$350.0 million during the quarter ended OctoberApril 29, 2016, on a “trade date” basis. During the nine months ended October 29, 2016, TJX repurchased and retired 15.4 million shares of its common stock at a cost of $1.2 billion,2017, on a “trade date” basis. TJX reflects stock repurchases in its financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $1.2 billion$350.0 million for the ninethree months ended OctoberApril 29, 20162017 and $1.3 billion$341.3 million for the ninethree months ended October 31, 2015.April 30, 2016.

9

In February 2015,2016, TJX announced that its Board of Directors had approved a stock repurchase program that authorized the repurchase of up to an additional $2.0 billion of TJX common stock from time to time. Under this program, on a “trade date” basis through OctoberApril 29, 2016,2017, TJX repurchased 22.77.3 million shares of common stock at a cost of $1.7 billion.$559.2 million. At OctoberApril 29, 2016, $315.8 million2017, $1.4 billion remained available for purchase under this program.

In February 2016,2017, TJX announced that its Board of Directors had approved anotheran additional stock repurchase program that authorized the repurchase of up to an additional $2.0$1.0 billion of TJX common stock from time to time, all of which remained available at OctoberApril 29, 2016.2017.

All shares repurchased under the stock repurchase programs have been retired.

11

Earnings per share:The following schedule presents the calculation of basic and diluted earnings per share (“EPS”) for net income:

The weighted average common shares for the diluted earnings per share calculation exclude the impact of outstanding stock options if the assumed proceeds per share of the option is in excess of the related fiscal period’s average price of TJX’s common stock. Such options are excluded because they would have an antidilutive effect. There were 4.38.0 million such options excluded for the thirteen weeks and thirty-nine weeks ended OctoberApril 29, 2016.2017. There were 4.24.1 million such options excluded for the thirteen weeks and thirty-nine weeks ended October 31, 2015.April 30, 2016.

1210

Note E. Financial Instruments

As a result of its operating and financing activities, TJX is exposed to market risks from changes in interest and foreign currency exchange rates and fuel costs. These market risks may adversely affect TJX’s operating results and financial position. When and to the extent deemed appropriate, TJX seeks to minimize risk from changes in interest and foreign currency exchange rates and fuel costs through the use of derivative financial instruments. TJX does not use derivative financial instruments for trading or other speculative purposes and does not use any leveraged 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 does not hedge its net investments in foreign subsidiaries.

Diesel Fuel Contracts:When and to the extent deemed appropriate, TJX hedges portions of its estimated notional diesel requirements based on the diesel fuel expected to be consumed by independent freight carriers transporting TJX’s inventory. Independent freight carriers transporting TJX’s inventory charge TJX a mileage surcharge based on the price of diesel fuel. The hedge agreements are designed to mitigate the volatility of diesel fuel pricing (and the resulting per mile surcharges payable by TJX) by setting a fixed price per gallon for the period being hedged. During fiscal 20162017 and the first three months of fiscal 2017,2018, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2017.2018. In addition, during fiscal 2017,2018, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the first ninethree months of fiscal 2018.2019. The hedge agreements outstanding at OctoberApril 29, 20162017 relate to approximately 51%53% of TJX’s estimated notional diesel requirements for the remainder of fiscal 20172018 and approximately 50% of TJX’s estimated notional diesel requirements for the first ninethree months of fiscal year 2018.2019. These diesel fuel hedge agreements will settle throughout the remainder of fiscal 20172018 and the first tenthree months of fiscal 2018. TJX2019.TJX elected not to apply hedge accounting rules to these contracts.

Foreign Currency Contracts:When and to the extent deemed appropriate, TJX enters into forward foreign currency exchange contracts to obtain economic hedges on portions of merchandise purchases made and anticipated to be made by the Company’s operations in Europeat TJX International (United Kingdom, Ireland, Germany, Poland, Austria, The Netherlands and The Netherlands)Australia), TJX Canada (Canada), Marmaxx (U.S.) and HomeGoods (U.S.) in currencies other than their respective functional currencies. These contracts typically have a term of twelve months or less. The contracts outstanding at OctoberApril 29, 20162017 cover a portion of such actual and anticipated merchandise purchases throughout the remainder of fiscal 2017 and the first two quarters of the fiscal year ending February 3, 2018, (“fiscal 2018”).2018. 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.

When and to the extent deemed appropriate, TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt and intercompany interest payable. The changes in fair value of these contracts are recorded in selling, general and administrative expenses and are offset by marking the underlying item to fair value in the same period. Upon settlement, the realized gains and losses on these contracts are offset by the realized gains and losses of the underlying item in selling, general and administrative expenses.

1311

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at OctoberApril 29, 2016:2017:

1412

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at October 31, 2015:April 30, 2016: