What changed in this filing

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Item 1. Financial Statements

2021-05-28 compared with 2020-12-01 · 175 added, 314 removed, 392 unchanged (56% of the section changed)

3 unchanged sentences

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

Thirteen Weeks Ended Thirty-Nine Weeks Ended

2020 November 2,

2019 October 31,

2020 November 2,

Thirteen Weeks Ended

Net sales $ 10,086,661 $ 4,408,888

14 unchanged sentences

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Thirteen Weeks Ended

2020 November 2,

Net income $ 866,656 $ 828,263

Additions to other comprehensive (loss) income:

Foreign currency translation adjustments, net of related tax provisions of $ 993 in fiscal 2021 and $ 241 in fiscal 2020

( 25,568 ) 70,785

Reclassifications from other comprehensive (loss) income to net income:

Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $ 1,981 in fiscal 2021 and $ 1,609 in fiscal 2020

Amortization of loss on cash flow hedge, net of related tax provisions of $ 75 in fiscal 2021 and $ 75 in fiscal 2020

Other comprehensive (loss) income, net of tax ( 19,920 ) 75,411

Total comprehensive income $ 846,736 $ 903,674

Thirty-Nine Weeks Ended

2020 November 2,

Net (loss) income $ ( 235,053 ) $ 2,287,403

Additions to other comprehensive (loss):

Foreign currency translation adjustments, net of related tax benefit of $ 493 in fiscal 2021 and $ 711 in fiscal 2020

Net income (loss) $ 533,930 $ ( 887,489 )

Additions to other comprehensive income (loss):

Foreign currency translation adjustments, net of related tax provision of $ 2,898 in fiscal 2022 and tax benefit of $ 6,948 in fiscal 2021

22,249 ( 129,158 )

Reclassifications from other comprehensive (loss) to net (loss) income:

Reclassifications from other comprehensive income (loss) to net income (loss):

Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $ 1,056 in fiscal 2022 and $ 1,746 in fiscal 2021

15,034 12,402

Amortization of loss on cash flow hedge, net of related tax provisions of $ 603 in fiscal 2022 and $ 76 in fiscal 2021

Other comprehensive (loss), net of tax ( 69,690 ) ( 7,093 )

Total comprehensive (loss) income $ ( 304,743 ) $ 2,280,310

Other comprehensive income (loss), net of tax 24,887 ( 124,153 )

Total comprehensive income (loss) $ 558,817 $ ( 1,011,642 )

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

2 unchanged sentences

IN THOUSANDS, EXCEPT SHARE DATA

2020 February 1,

2020 November 2,

2021 January 30,

Current assets:

22 unchanged sentences

Long-term debt 5,334,864 5,332,921 7,192,413

Commitments and contingencies (See Note L)

Commitments and contingencies (See Note K)

SHAREHOLDERS’ EQUITY

11 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Thirty-Nine Weeks Ended

2020 November 2,

Thirteen Weeks Ended

Cash flows from operating activities:

Net (loss) income $ ( 235,053 ) $ 2,287,403

Adjustments to reconcile net (loss) income to cash provided by operating activities:

Net income (loss) $ 533,930 $ ( 887,489 )

Adjustments to reconcile net income (loss) to cash used in operating activities:

Depreciation and amortization 215,379 219,460

Loss on property disposals and impairment charges 931 26,424

Deferred income tax (benefit) provision ( 112,965 ) 42,120

Deferred income tax (benefit) ( 16,181 ) ( 48,464 )

Share-based compensation 50,536 ( 11,531 )

Changes in assets and liabilities:

(Increase) in accounts receivable ( 76,604 ) ( 99,476 )

(Increase) decrease in accounts receivable ( 156,999 ) 210,419

(Increase) in merchandise inventories ( 750,553 ) ( 136,027 )

(Increase) in income taxes recoverable ( 27,949 ) ( 434,674 )

(Increase) in prepaid expenses and other current assets ( 53,702 ) ( 62,358 )

Increase in accounts payable 3,464,266 805,766

Increase in accrued expenses and other liabilities 550,261 133,651

Decrease (increase) in prepaid expenses and other current assets 12,254 ( 39,580 )

(Decrease) in accounts payable ( 410,244 ) ( 1,567,597 )

Increase (decrease) in accrued expenses and other liabilities 12,214 ( 578,178 )

Increase (decrease) in income taxes payable 203,740 ( 13,290 )

Increase in net operating lease liabilities 226,909 32,056

(Decrease) increase in net operating lease liabilities ( 50,319 ) 65,578

Other, net ( 49,466 ) 34,466

Net cash provided by operating activities 4,276,760 1,873,528

Net cash (used in) operating activities ( 432,727 ) ( 3,160,483 )

Cash flows from investing activities:

2 unchanged sentences

Sales and maturities of investments 7,733 4,214

Other — 7,419

Net cash (used in) investing activities ( 224,905 ) ( 221,103 )

Cash flows from financing activities:

Cash payments on revolving credit facilities ( 1,000,000 ) —

Payments on debt ( 750,000 ) —

Proceeds from long-term debt including revolving credit facilities — 4,988,452

Cash payments for debt issuance expenses ( 33,872 ) —

Cash payments for repurchase of common stock ( 201,500 ) ( 1,190,390 )

Payments for debt issuance expenses — ( 33,872 )

Payments for repurchase of common stock — ( 201,500 )

Cash dividends paid ( 315,215 ) ( 278,250 )

Proceeds from issuance of common stock 36,539 37,444

Cash payments of employee tax withholdings for performance based stock awards ( 21,843 ) ( 23,297 )

Net cash provided by (used in) financing activities 3,540,708 ( 1,833,494 )

Payments of employee tax withholdings for performance based stock awards ( 24,426 ) ( 21,765 )

Net cash (used in) provided by financing activities ( 1,053,102 ) 4,490,509

Effect of exchange rate changes on cash 16,649 ( 37,840 )

Net increase (decrease) in cash and cash equivalents 7,365,241 ( 970,053 )

Net (decrease) increase in cash and cash equivalents ( 1,694,085 ) 1,071,083

Cash and cash equivalents at beginning of year 10,469,570 3,216,752

9 unchanged sentences

Earnings Total

Balance, August 1, 2020 1,199,061 $ 1,199,061 $ 68,532 $ ( 722,941 ) $ 4,115,917 $ 4,660,569

Net income — — — — 866,656 866,656

Other comprehensive (loss), net of tax — — — ( 19,920 ) — ( 19,920 )

Recognition of share-based compensation — — 31,262 — — 31,262

Issuance of common stock under Stock Incentive Plan, net of shares used to pay tax withholdings 1,570 1,570 26,619 — — 28,189

Balance, October 31, 2020 1,200,631 $ 1,200,631 $ 126,413 $ ( 742,861 ) $ 4,982,573 $ 5,566,756

Thirteen Weeks Ended

Shares Par Value

Additional Paid-In

Capital Accumulated Other Comprehensive

Loss Retained

Earnings Total

Balance, August 3, 2019 1,208,933 $ 1,208,933 $ — $ ( 712,825 ) $ 4,806,504 $ 5,302,612

Balance, January 30, 2021 1,204,698 $ 1,204,698 $ 260,515 $ ( 606,071 ) $ 4,973,542 $ 5,832,684

Net income — — — — 533,930 533,930

3 unchanged sentences

Issuance of common stock under Stock Incentive Plan, net of shares used to pay tax withholdings 1,689 1,689 10,424 — — 12,113

Common stock repurchased and retired ( 8,824 ) ( 8,824 ) ( 100,925 ) — ( 380,890 ) ( 490,639 )

Balance, November 2, 2019 1,203,184 $ 1,203,184 $ — $ ( 637,414 ) $ 4,976,762 $ 5,542,532

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

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Thirty-Nine Weeks Ended

Balance, May 1, 2021 1,206,387 $ 1,206,387 $ 321,475 $ ( 581,184 ) $ 5,192,536 $ 6,139,214

Thirteen Weeks Ended

Shares Par Value

9 unchanged sentences

Common stock repurchased and retired ( 3,387 ) ( 3,387 ) ( 25,715 ) — ( 172,398 ) ( 201,500 )

Balance, October 31, 2020 1,200,631 $ 1,200,631 $ 126,413 $ ( 742,861 ) $ 4,982,573 $ 5,566,756

Thirty-Nine Weeks Ended

Shares Par Value

Additional Paid-In

Capital Accumulated Other Comprehensive

Loss Retained

Earnings Total

Balance February 2, 2019 1,217,183 $ 1,217,183 $ — $ ( 630,321 ) $ 4,461,744 $ 5,048,606

Net income — — — — 2,287,403 2,287,403

Cumulative effect of accounting change — — — — 403 403

Other comprehensive (loss), net of tax — — — ( 7,093 ) — ( 7,093 )

Cash dividends declared on common stock — — — — ( 834,975 ) ( 834,975 )

Recognition of share-based compensation — — 86,590 — — 86,590

Issuance of common stock under Stock Incentive Plan, net of shares used to pay tax withholdings 8,169 8,169 143,819 — — 151,988

Common stock repurchased and retired ( 22,168 ) ( 22,168 ) ( 230,409 ) — ( 937,813 ) ( 1,190,390 )

Balance, November 2, 2019 1,203,184 $ 1,203,184 $ — $ ( 637,414 ) $ 4,976,762 $ 5,542,532

Balance, May 2, 2020 1,197,877 $ 1,197,877 $ 8,104 $ ( 797,324 ) $ 4,330,561 $ 4,739,218

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

7 unchanged sentences

Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method.

The Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements, including the related notes, contained in TJX’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 (“fiscal 2020”).

These interim results are not necessarily indicative of results for the full fiscal year.

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.

TJX is also impacted by the uncertainty surrounding the financial impact of the novel coronavirus (“COVID-19”) pandemic as discussed in Note B—Impact of the COVID-19 Pandemic.

The February 1, 2020 balance sheet data was derived from audited Consolidated Financial Statements and does not include all disclosures required by GAAP.

The January 30, 2021 balance sheet data was derived from audited Consolidated Financial Statements and does not include all disclosures required by GAAP.

COVID-19 Pandemic

The novel coronavirus disease (“COVID-19”), was first identified in December 2019 before spreading worldwide.

The Company has been, and may continue to be, impacted by the COVID-19 pandemic.

In response to the pandemic, primarily during the first quarter of fiscal 2021, the Company took several steps to strengthen its financial position and balance sheet and to maintain financial liquidity and flexibility.

The COVID-19 pandemic is complex and rapidly evolving and the severity and duration of the pandemic is still unknown.

Additionally, the resurgence or the emergence of new variants has caused and may continue to cause intermittent or prolonged periods of temporary store closures, and could elicit further actions and recommendations from governments and public health authorities that could impact our operations.

In the first quarter of fiscal 2021, the Company temporarily closed all of its stores, distribution centers and offices, and online businesses until the second quarter of fiscal 2021, while during the first quarter of fiscal 2022, our stores in the United States remained open for the entire first quarter, and we had (and continue to have) store closures primarily in Europe and Canada.

The Company continues to monitor developments, including government requirements and recommendations at the national, state, and local level that could result in possible additional impacts to our operations.

The Company cannot reasonably estimate the duration and severity of this pandemic which has had, and may continue to have, a material impact on its business, results of operations, financial position and cash flows.

TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year.

3 unchanged sentences

The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period.

TJX considers its accounting policies relating to leases, inventory valuation, impairment of long-lived assets, goodwill and tradenames, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments.

The Company considered COVID-19 related impacts to its estimates, as appropriate, within its unaudited consolidated financial statements and there may be changes to those estimates in future periods.

We believe that our accounting estimates are appropriate after giving consideration to the ongoing uncertainties surrounding the severity and duration of the COVID-19 pandemic and the associated containment and remediation efforts.

TJX considers its accounting policies relating to leases, inventory valuation, impairment of long-lived assets, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments.

The Company considered COVID-19 related impacts to its estimates, as appropriate, within its consolidated financial statements and there may be changes to those estimates in future periods.

The Company believes that its accounting estimates are appropriate after giving consideration to the ongoing uncertainties surrounding the severity and duration of the COVID-19 pandemic and the associated containment and remediation efforts.

Actual amounts could differ from these estimates, and such differences could be material.

Reclassifications

Certain reclassifications have been made to prior year financial information to conform to the current year’s presentation.

Deferred Gift Card Revenue

The following table presents deferred gift card revenue activity:

In thousands October 31,

2020 November 2,

In thousands May 1,

Balance, beginning of year $ 576,187 $ 500,844

3 unchanged sentences

Balance, end of period $ 537,005 $ 475,050

TJX recognized $ 306.8 million in gift card revenue for the three months ended October 31, 2020 and $ 358.3 million for the three months ended November 2, 2019.

The decrease in both deferred revenue and revenue recognized versus the prior year reflects the impact of lower customer traffic for the three months ended October 31, 2020 and temporary store and e-commerce closures due to the COVID-19 pandemic for the nine months ended October 31, 2020.

The increase in both deferred revenue and revenue recognized versus the prior year reflects the impact of the temporary store and e-commerce closures in the first quarter of fiscal 2021 due to the COVID-19 pandemic.

Gift cards are combined in one homogeneous pool and are not separately identifiable.

As such, the revenue recognized consists of gift cards that were part of the deferred revenue balance at the beginning of the period as well as gift cards that were issued during the period.

Equity Investment

On November 18, 2019, the Company, through a wholly owned subsidiary, completed an investment of $ 225 million, excluding acquisition costs, for a 25 % ownership stake in privately held Familia, an established, off-price apparel and home fashions retailer with more than 275 stores throughout Russia.

The Company's investment represents a non-controlling, minority position and is accounted for under the equity method of accounting.

Included in the initial carrying value of $ 225 million, which represents the transaction date fair value, was a basis difference of $ 212 million related to the difference between the cost of the investment and the Company's proportionate share of the net assets of Familia.

Goodwill comprised $ 186 million of the difference, and the remainder was allocated to the Familia tradename and customer relationships.

The carrying value of the equity method investment is primarily adjusted for the Company's share in the earnings of Familia, as adjusted for basis differences, and the foreign currency exchange translation adjustment related to translating the investment from Russian rubles to U.S.

The Company amortizes the tradename and customer relationships over their useful lives of 10 and 7 years, respectively, using the straight-line method.

This investment is included in Other assets on our Consolidated Balance Sheets.

The Company reports its share of Familia’s results on a one-quarter lag.

The losses from the Company's investment in Familia were $ 3.2 million for the three months ended October 31, 2020 and $ 2.5 million for the nine months ended October 31, 2020, which has been recorded in our Consolidated Statements of Income (Loss) and is included in Selling, general and administrative expenses.

Revaluing the investment from Russian rubles to the U.S.

dollar as of October 31, 2020 resulted in a cumulative translation loss and reduced the carrying value of our investment by $ 44 million.

The cumulative translation loss has been recorded in our Consolidated Balance Sheets as a component of Accumulated other comprehensive loss.

The carrying value of the equity investment on the Consolidated Balance Sheets at October 31, 2020, including acquisition costs of $ 5.6 million, was $ 184.1 million.

Familia operations have also been impacted by the COVID-19 pandemic and virtually all stores were temporarily closed.

We have not impaired our investment due to our belief that any decline in fair value of our investment is temporary and we expect Familia to have adequate liquidity to continue operations notwithstanding the COVID-19 pandemic.

Supplemental cash flow information related to leases for the thirty-nine weeks ended October 31, 2020 and November 2, 2019 is as follows:

Thirty-Nine Weeks Ended

In thousands October 31,

2020 November 2,

Supplemental cash flow information related to leases for the thirteen weeks ended May 1, 2021 and May 2, 2020 is as follows:

Thirteen Weeks Ended

In thousands May 1,

Operating cash flows paid for operating leases $ 531,836 $ 445,901

Lease liabilities arising from obtaining right of use assets $ 488,666 $ 553,075

During the first nine months of fiscal 2021, we negotiated rent deferrals (primarily for second quarter lease payments) for a significant number of our stores, with repayment at later dates, primarily in fiscal 2022.

See Note B—Impact of the COVID-19 Pandemic for additional information.

Recently Adopted Accounting Standards

Simplified Accounting for Income Taxes

In December 2019, the Financial Accounting Standards Board (“FASB”) issued guidance related to simplified accounting for income taxes.

The new standard simplifies accounting for income taxes by removing certain exceptions to the general principals in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

This standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2020, with early adoption permitted in any interim period within that year.

The Company reviewed the provisions of this standard and determined that most of them do not apply to TJX.

The most significant impact to the Company is the simplification of the tax benefit calculation recognized on pre-tax losses in interim periods.

The Company elected to early adopt this standard as of February 2, 2020, which did not have an impact on the Company's financial statements or disclosures for the first nine months of fiscal 2021.

From time to time, the FASB or other standard setting bodies issue new accounting pronouncements.

During fiscal 2021, the Company negotiated rent deferrals for a significant number of its stores, with repayment primarily throughout fiscal 2022.

Future Adoption of New Accounting Standards

From time to time, the Financial Accounting Standards Board (“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.

Impact of the COVID-19 Pandemic

In December 2019, COVID-19 emerged and has subsequently spread worldwide.

The World Health Organization declared COVID-19 a pandemic, resulting in federal, state and local governments and private entities mandating various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantine or isolation protocols for those who may have been exposed to the virus.

In March 2020, the Company temporarily closed all of its stores, its online businesses, its distribution centers and its offices, with Associates working remotely where possible.

In May 2020, the Company began reopening its stores with capacity constraints and reduced operating hours.

By the end of the second quarter, more than 4,500 of the Company’s worldwide stores, and each of its online businesses, had reopened.

In response to increasing cases of COVID-19, a number of our stores have temporarily closed again.

As of November 30, 2020, the Company has approximately 500 stores temporarily closed due to local government mandates, primarily located in Europe.

The Company’s tkmaxx.com e-commerce business in the U.K.

remains open.

In the first quarter of fiscal 2021 the Company amended the credit agreements governing its revolving credit facilities and as a result, we expect to maintain compliance with our covenants for at least one year from the issuance of these financial statements.

As the COVID-19 pandemic is complex and rapidly evolving, and cases have been rising around the world, the Company cannot reasonably estimate the duration and severity of this pandemic, which has had and may continue to have a material impact on our business, results of operations, financial position and cash flows.

Financial Actions

Balance Sheet, Cash Flow and Liquidity

During the third quarter the Company generated positive operating cash flows and ended the third quarter with $ 10.6 billion of cash.

In addition, in the third quarter of fiscal 2021 the Company increased its borrowing capacity by entering into a new $ 500 million 364 Day Revolving Credit Facility, making a total of $ 1.5 billion available to the Company under revolving credit facilities.

For additional information on the new credit facility, see Note J—Long-Term Debt and Credit Lines.

Additionally, subsequent to the end of the third quarter, the Company issued $ 1.0 billion in aggregate long-term debt and commenced cash tender offers to repurchase up to $ 750.0 million combined aggregate principal amount of certain of its notes issued on April 1, 2020.

For additional information on these transactions, see Note M—Subsequent Events.

While the Company's Board of Directors did not declare a dividend in the first nine months of fiscal 2021, the Company expects a dividend of $ 0.26 per share to be declared in the fourth quarter of fiscal 2021, payable in March 2021, subject to the approval by its Board of Directors.

The Company has and will continue to monitor its expenses, capital spending and shareholder distributions in the context of the current environment.

Consistent with updated guidance from the FASB in April 2020, we have elected to treat the COVID-19 pandemic-related rent deferrals as a resolution of a contingency by remeasuring the remaining consideration in the contract, with a corresponding adjustment to the right-of-use asset, using the remeasured consideration.

The Company did not reassess the lease classification and did not update the discount rate used to measure the lease liability.

For additional information on cash flows for operating leases see Note A—Basis of Presentation and Summary of Significant Accounting Policies.

In addition to negotiating deferral of lease payments, the Company also temporarily extended payment terms on merchandise orders, which increased our accounts payable as of the end of the third quarter, benefiting our third quarter operating cash flows.

We have reduced the length of our extended payment terms to more closely align with our typical business terms and as we make deferred payments, our operating cash flows are likely to be negatively impacted.

The Company evaluated the value of its inventory in light of the temporary store closures in the first quarter of fiscal 2021 due to the COVID-19 pandemic.

Permanent markdowns, which have been taken upon reopening of the stores, on transitional or out of season merchandise and merchandise that was already in markdown status, combined with the write-off of perishable goods, resulted in a reduction of approximately $ 0.4 billion in inventory for the first six months of fiscal 2021.

Additional markdowns throughout the year were taken in the ordinary course of business operations.

TJX evaluates its long-lived assets, operating lease right of use assets, goodwill and tradenames for indicators of impairment at least annually in the fourth quarter of each fiscal year or whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Given the substantial reduction in our sales and the reduced cash flow projections as a result of the temporary store closures during the first half of fiscal 2021 due to the COVID-19 pandemic, we determined that a triggering event had occurred in the first and second quarters of fiscal 2021 and that an impairment assessment was warranted for certain stores.

This analysis resulted in an immaterial amount of impairment charges related to long-lived assets and operating lease right of use assets in the first nine months of fiscal 2021.

As a result of the COVI D-19 pandemic, governments in the U.S., United Kingdom ( “ U.K.

” ), Canada and various other jurisdictions have implemented programs to encourage companies to retain and pay employees who are unable to work or are limited in the work that they can perform in light of closures or a significant decline in sales.

The Company continued to qualify for certain of these provisions, which partially offset related expenses.

During the third quarter of fiscal 2021 the impact of these programs on our expenses was immaterial.

During the nine months ended October 31, 2020 , these programs reduced our expenses by approximately $ 0.4 billion on our Consolidated Statements of Income (Loss), and increased Accounts receivable, net on our Consolidated Balance Sheets by approxim ately $ 0.1 billion.

These government programs also provide for the option to defer payroll tax and VAT payments, which has resulted in an increase in Accrued expenses and other current liabilities on our Consolidated Balance Sheets b y approximately $ 0.3 billion.

The Company also incurred incremental costs associated with the COVID-19 pandemic, including primarily from:

– Incremental payroll costs associated with monitoring occupancy limits to comply with social distancing protocols and implementing enhanced cleaning regimens.

– Incremental expense related to the discre tionary appreciation bonus for store and distribution center Associates.

– Incremental cleaning supplies and personal protective equipment for our Associates.

Unless otherwise discussed, the Company has reviewed the guidance and have determined that they will not apply or are not expected to be material to its Consolidated Financial Statements upon adoption and therefore are not disclosed.

Property at Cost

The following table presents the components of property at cost:

In thousands October 31,

2020 February 1,

2020 November 2,

In thousands May 1,

2021 January 30,

Land and buildings

7 unchanged sentences

Net property at cost $ 5,067,824 $ 5,036,096 $ 5,201,697

Depreciation expense was $ 215.6 million for the three months ended October 31, 2020 and $ 216.3 million three months ended November 2, 2019.

Depreciation expense was $ 649.1 million for the nine months ended October 31, 2020 and $ 640.5 million for the nine months ended November 2, 2019 .

Depreciation expense was $ 212 million for the three months ended May 1, 2021 and $ 217 million for the three months ended May 2, 2020.

Accumulated Other Comprehensive (Loss) Income

Amounts included in accumulated other comprehensive loss are recorded net of taxes.

The following table details the changes in accumulated other comprehensive loss for the twelve months ended February 1, 2020 and the nine months ended October 31, 2020:

The following table details the changes in accumulated other comprehensive loss for the twelve months ended January 30, 2021 and the three months ended May 1, 2021:

In thousands Foreign

14 unchanged sentences

— 20,046 — 20,046

Balance, February 1, 2020

Balance, January 30, 2021

$ ( 441,532 ) $ ( 164,802 ) $ 263 $ ( 606,071 )

2 unchanged sentences

22,249 — — 22,249

Reclassifications from other comprehensive loss to net (loss):

Reclassifications from other comprehensive loss to net income:

Amortization of loss on cash flow hedge (net of taxes of $ 603 )

— — ( 263 ) ( 263 )

Amortization of prior service cost and deferred gains/losses (net of taxes of $ 1,056 )

— 2,901 — 2,901

Balance, October 31, 2020

Balance, May 1, 2021

$ ( 419,283 ) $ ( 161,901 ) $ — $ ( 581,184 )

1 unchanged sentence

Capital Stock

In March 2020, in connection with the actions taken related to the COVID-19 pandemic as described in Note B—Impact of the COVID-19 Pandemic, the Company suspended its share repurchase program.

During the first quarter of fiscal 2021, prior to the suspension of our share repurchase program, TJX repurchased and retired 3.2 million shares of its common stock at a cost of $ 190.1 million on a “trade date” basis.

All share repurchases occurred during the first quarter of fiscal 2021.

Prior to the suspension of the Company’s share repurchase program, during the first quarter of fiscal 2021, TJX repurchased and retired 3.2 million shares of its common stock at a cost of $ 190 million 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 $ 201.5 million for the nine months ended October 31, 2020 and $ 1.2 billion for the nine months ended November 2, 2019.

TJX had cash expenditures under repurchase programs of $ 201 million for the three months ended May 2, 2020.

These expenditures were funded by cash generated from operations.

1 unchanged sentence

In February 2019, TJX announced that its Board of Directors had approved an additional stock repurchase program that authorized the repurchase of up to $ 1.5 billion of TJX common stock from time to time.

As of October 31, 2020, TJX had approximately $ 3.0 billion available under these previously announced stock repurchase programs.

As of May 1, 2021, TJX had approximately $ 3.0 billion available under these previously announced stock repurchase programs.

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

Subsequent to the end of the first quarter of fiscal 2022, the Company lifted the temporary suspension of its previously authorized stock repurchase programs.

Earnings (Loss) Per Share

The following table presents the calculation of basic and diluted earnings (loss) per share for net income (loss):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

Amounts in thousands, expect per share amounts October 31,

2020 November 2,

2019 October 31,

2020 November 2,

Thirteen Weeks Ended

Amounts in thousands, expect per share amounts May 1,

Basic earnings (loss) per share:

10 unchanged sentences

1,205,439 1,197,809

Assumed exercise / vesting of:

Stock options and awards 14,244 17,919 — 18,428

Assumed exercise / vesting of stock options and awards 16,078 —

Weighted average common shares outstanding for diluted earnings (loss) per share calculation

5 unchanged sentences

Such options are excluded because they would have an antidilutive effect.

There were 17.7 million such options excluded for the thirteen weeks ended October 31, 2020.

There were 12.0 million such options excluded for each of the thirteen weeks and thirty-nine weeks ended November 2, 2019.

During periods of net loss, all common stock equivalents are excluded because they are anti-dilutive.

For the thirty-nine weeks ended October 31, 2020, there were approximately 49.1 million common stock equivalents excluded from diluted earnings per share.

In November 2020, the Company announced that it expects a quarterly dividend of $ 0.26 per share to be declared in the fourth quarter of fiscal 2021, payable in March 2021, subject to approval by its Board of Directors.

There were no such options excluded for the thirteen weeks ended May 1, 2021.

For the period ended May 2, 2020, as a result of the net loss for the quarter, all options were antidilutive and therefore have been excluded from the calculation.

The Board of Directors declared a quarterly dividend of $ 0.26 per share in the first quarter of fiscal 2022.

Financial Instruments

11 unchanged sentences

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 2020, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2021, and during the first nine months of fiscal 2021, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the first nine months of fiscal 2022.

The hedge agreements outstanding at October 31, 2020 relate to approximately 40 % of TJX’s estimated notional diesel requirements for the remainder of fiscal 2021 and approximately 41 % of TJX’s estimated notional diesel requirements for the first nine months of fiscal 2022.

These diesel fuel hedge agreements will settle throughout the remainder of fiscal 2021 and throughout the first ten months of fiscal 2022.

During fiscal 2021, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2022, and during the first three months of fiscal 2022, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the first three months of fiscal 2023.

The hedge agreements outstanding at May 1, 2021 relate to approximately 48 % of TJX’s estimated notional diesel requirements for the remainder of fiscal 2022 and approximately 40 % of TJX’s estimated notional diesel requirements for the first three months of fiscal 2023.

These diesel fuel hedge agreements will settle throughout the remainder of fiscal 2022 and throughout the first four months of fiscal 2023.

TJX elected not to apply hedge accounting to these contracts.

1 unchanged sentence

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 currencies other than their respective functional currencies.

As a result of the COVID-19 pandemic, there was a significant change in the Company's anticipated merchandise purchases and we early settled derivative contracts designed to hedge merchandise purchases that would no longer take place.

As a result of the COVID-19 pandemic, there was a significant change in the Company's anticipated merchandise purchases during the first quarter of fiscal 2021 and the Company early settled derivative contracts designed to hedge merchandise purchases that would no longer take place.

The settlement of these contracts resulted in a net gain of $ 25 million in the first quarter of fiscal 2021.

The contracts outstanding at October 31, 2020 cover the merchandise purchases the Company is committed to over the next several months.

The contracts outstanding at May 1, 2021 cover the merchandise purchases the Company is committed to over the next several months.

Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the U.K.

7 unchanged sentences

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.

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at October 31, 2020:

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at May 1, 2021:

In thousands Pay Receive Blended

5 unchanged sentences

Intercompany balances, primarily debt and related interest:

zł 65,000 £ 12,780 0.1966 Prepaid Exp / (Accrued Exp) $ 195 $ ( 68 ) $ 127

€ 60,000 £ 53,412 0.8902 (Accrued Exp) — ( 904 ) ( 904 )

A$ 80,000 U.S.$ 58,016 0.7252 Prepaid Exp 1,749 — 1,749

U.S.$ 72,475 £ 55,000 0.7589 (Accrued Exp) — ( 1,280 ) ( 1,280 )

£ 200,000 U.S.$ 249,499 1.2475 (Accrued Exp) — ( 9,810 ) ( 9,810 )

zł 45,000 £ 8,846 0.1966 Prepaid Exp $ 353 $ — $ 353

A$ 80,000 U.S.$ 62,032 0.7754 (Accrued Exp) — ( 98 ) ( 98 )

U.S.$ 75,102 £ 55,000 0.7323 Prepaid Exp 1,505 — 1,505

£ 450,000 U.S.$ 620,918 1.3798 Prepaid Exp / (Accrued Exp) 40 ( 5,582 ) ( 5,542 )

€ 200,000 U.S.$ 244,699 1.2235 Prepaid Exp 2,301 — 2,301

Economic hedges for which hedge accounting was not elected:

4 unchanged sentences

gal per month

N/A (Accrued Exp) — ( 15,078 ) ( 15,078 )

N/A Prepaid Exp 17,816 — 17,816

Intercompany billings in TJX International, primarily merchandise related:

€ 163,000 £ 141,240 0.8665 (Accrued Exp) — ( 166 ) ( 166 )

Merchandise purchase commitments:

C$ 637,508 U.S.$ 481,000 0.7545 Prepaid Exp / (Accrued Exp) 3,328 ( 1,152 ) 2,176

C$ 574,390 U.S.$ 457,000 0.7956 (Accrued Exp) — ( 11,054 ) ( 11,054 )

C$ 29,455 € 19,500 0.6620 (Accrued Exp) — ( 444 ) ( 444 )

£ 282,746 U.S.$ 391,800 1.3857 Prepaid Exp / (Accrued Exp) 1,939 ( 3,751 ) ( 1,812 )

A$ 45,584 U.S.$ 32,650 0.7163 Prepaid Exp 600 — 600

zł 264,400 £ 53,293 0.2016 Prepaid Exp 2,189 — 2,189

U.S.$ 53,605 € 45,600 0.8507 (Accrued Exp) — ( 394 ) ( 394 )

A$ 50,830 U.S.$ 39,125 0.7697 Prepaid Exp / (Accrued Exp) 42 ( 356 ) ( 314 )

U.S.$ 53,680 € 44,400 0.8271 Prepaid Exp / (Accrued Exp) 185 ( 267 ) ( 82 )

Total fair value of derivative financial instruments $ 24,181 $ ( 21,718 ) $ 2,463

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at February 1, 2020:

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 30, 2021:

In thousands Pay Receive Blended

3 unchanged sentences

U.S.$ Net Fair

February 1, 2020

Fair value hedges:

3 unchanged sentences

U.S.$ 75,102 £ 55,000 0.7323 Prepaid Exp 357 — 357

£ 200,000 U.S.$ 274,853 1.3743 Prepaid Exp 32 — 32

€ 200,000 U.S.$ 244,699 1.2235 Prepaid Exp / (Accrued Exp) 427 ( 182 ) 245

Economic hedges for which hedge accounting was not elected:

3 unchanged sentences

gal per month

N/A (Accrued Exp) — ( 9,927 ) ( 9,927 )

Intercompany billings in TJX International, primarily merchandise related:

€ 58,700 £ 49,848 0.8492 Prepaid Exp 655 — 655

N/A Prepaid Exp 4,880 — 4,880

Merchandise purchase commitments:

C$ 384,679 U.S.$ 296,000 0.7695 Prepaid Exp / (Accrued Exp) 430 ( 5,627 ) ( 5,197 )

C$ 37,051 € 25,200 0.6801 Prepaid Exp / (Accrued Exp) 61 ( 44 ) 17

£ 265,653 U.S.$ 341,880 1.2869 Prepaid Exp / (Accrued Exp) 11 ( 9,792 ) ( 9,781 )

zł 362,700 £ 72,217 0.1991 Prepaid Exp 1,903 — 1,903

A$ 29,400 U.S.$ 20,151 0.6854 Prepaid Exp 435 — 435

C$ 5,391 € 3,500 0.6492 Prepaid Exp 24 — 24

£ 203,264 U.S.$ 263,950 1.2986 (Accrued Exp) — ( 15,086 ) ( 15,086 )

zł 30,000 £ 5,865 0.1955 (Accrued Exp) — ( 29 ) ( 29 )

A$ 46,985 U.S.$ 35,250 0.7502 Prepaid Exp / (Accrued Exp) 144 ( 837 ) ( 693 )

U.S.$ 99,810 € 83,700 0.8386 Prepaid Exp / (Accrued Exp) 1,986 ( 160 ) 1,826

Total fair value of derivative financial instruments $ 9,029 $ ( 21,921 ) $ ( 12,892 )

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at November 2, 2019:

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at May 2, 2020:

In thousands Pay Receive Blended

7 unchanged sentences

€ 60,000 £ 53,412 0.8902 Prepaid Exp 437 — 437

A$ 50,000 U.S.$ 34,370 0.6874 (Accrued Exp) — ( 303 ) ( 303 )

A$ 110,000 U.S.$ 70,802 0.6437 Prepaid Exp / (Accrued Exp) 1,788 ( 1,656 ) 132

U.S.$ 72,475 £ 55,000 0.7589 (Accrued Exp) — ( 3,744 ) ( 3,744 )

£ 200,000 U.S.$ 249,499 1.2475 Prepaid Exp / (Accrued Exp) 999 ( 2,332 ) ( 1,333 )

C$ 350,000 U.S.$ 248,821 0.7109 Prepaid Exp / (Accrued Exp) 640 ( 478 ) 162

Economic hedges for which hedge accounting was not elected:

6 unchanged sentences

Intercompany billings in TJX International, primarily merchandise related:

€ 86,800 £ 76,837 0.8852 Prepaid Exp 2,411 — 2,411

€ 49,100 £ 43,144 0.8787 (Accrued Exp) — ( 65 ) ( 65 )

Merchandise purchase commitments:

C$ 642,859 U.S.$ 487,300 0.7580 Prepaid Exp / (Accrued Exp) 808 ( 2,960 ) ( 2,152 )

C$ 31,863 € 21,600 0.6779 Prepaid Exp / (Accrued Exp) 36 ( 111 ) ( 75 )

£ 308,166 U.S.$ 386,700 1.2548 Prepaid Exp / (Accrued Exp) 373 ( 14,122 ) ( 13,749 )

A$ 42,054 U.S.$ 28,767 0.6840 Prepaid Exp / (Accrued Exp) 46 ( 414 ) ( 368 )

zł 369,290 £ 76,343 0.2067 Prepaid Exp / (Accrued Exp) 2,192 ( 148 ) 2,044

C$ 77,979 U.S.$ 59,200 0.7592 Prepaid Exp 3,819 — 3,819

£ 63,618 U.S.$ 82,200 1.2921 Prepaid Exp 2,469 — 2,469

A$ 17,438 U.S.$ 11,780 0.6755 Prepaid Exp 578 — 578

zł 69,400 £ 13,880 0.2000 Prepaid Exp 666 — 666

U.S.$ 30,651 € 27,588 0.9001 Prepaid Exp / (Accrued Exp) 30 ( 404 ) ( 374 )

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Recognized in Income / (Loss) by

Thirteen Weeks Ended Thirty-Nine Weeks Ended

In thousands October 31,

2020 November 2,

2019 October 31,

2020 November 2,

Thirteen Weeks Ended

In thousands May 1,

Fair value hedges:

1 unchanged sentence

Economic hedges for which hedge accounting was not elected:

Intercompany receivable Selling, general and administrative expenses — — — 3,257

Diesel fuel contracts Cost of sales, including buying and occupancy costs 13,570 ( 22,854 )

Intercompany billings in TJX International, primarily merchandise related Cost of sales, including buying and occupancy costs 118 ( 1,852 )

International lease liabilities Cost of sales, including buying and occupancy costs — 301 — ( 1,113 )

Merchandise purchase commitments Cost of sales, including buying and occupancy costs ( 15,969 ) 50,135

6 unchanged sentences

The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring basis:

In thousands October 31,

2020 February 1,

2020 November 2,

In thousands May 1,

2021 January 30,

Executive Savings Plan investments $ 384,442 $ 363,729 $ 296,031

Foreign currency exchange contracts $ 6,365 $ 4,149 $ 11,777

Diesel fuel contracts 17,816 4,880 —

Foreign currency exchange contracts $ 21,718 $ 21,921 $ 8,679

7 unchanged sentences

These inputs are considered to be Level 2.

The fair value of long-term debt as of October 31, 2020 was $ 6.3 billion compared to a carrying value of $ 5.4 billion.

The fair value of the current portion of long-term debt as of October 31, 2020 was $ 758.5 million compared to a carrying value of $ 749.4 million.

For additional information on the new debt issuances, see Note J—Long-Term Debt and Credit Lines.

The fair value of long-term debt as of February 1, 2020 and November 2, 2019 was $ 2.3 billion compared to a carrying value of $ 2.2 billion.

The fair value of long-term debt as of May 1, 2021 was $ 5.8 billion compared to a carrying value of $ 5.3 billion.

The fair value of long-term debt as of January 30, 2021 was $ 5.9 billion compared to a carrying value of $ 5.3 billion.

The fair value of the current portion of long-term debt as of January 30, 2021 was $ 754 million compared to a carrying value of $ 750 million.

The fair value of long-term debt as of May 2, 2020 was $ 7.8 billion compared to a carrying value of $ 7.2 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.

TJX’s cash equivalents are stated at cost, which approximates fair value due to the short maturities of these instruments.

Certain assets and liabilities are measured at fair value on a nonrecurring basis, where as the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of an impairment.

For the periods ended May 1, 2021, January 30, 2021 and May 2, 2020, the Company did not record any material impairments to long-lived assets.

Segment Information

13 unchanged sentences

Presented below is financial information with respect to TJX’s business segments:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

In thousands October 31,

2020 November 2,

2019 October 31,

2020 November 2,

Thirteen Weeks Ended

In thousands May 1,

In the United States:

10 unchanged sentences

TJX International ( 221,558 ) ( 258,617 )

Total segment profit 1,219,375 1,263,303 88,955 3,474,417

Total segment profit (loss) 926,476 ( 1,219,170 )

General corporate expense 160,442 100,327

5 unchanged sentences

Thirteen Weeks Ended Thirteen Weeks Ended

In thousands October 31,

2020 November 2,

2019 October 31,

2020 November 2,

Service cost $ 12,512 $ 11,415 $ 404 $ 440

Interest cost 12,620 13,149 860 871

Expected return on plan assets ( 22,264 ) ( 18,630 ) — —

Amortization of net actuarial loss and prior service cost 6,028 5,556 1,394 471

Total expense $ 8,896 $ 11,490 $ 2,658 $ 1,782

Funded Plan Unfunded Plan

Thirty-Nine Weeks Ended Thirty-Nine Weeks Ended

In thousands October 31,

2020 November 2,

2019 October 31,

2020 November 2,

In thousands May 1,

Service cost $ 12,219 $ 12,540 $ 755 $ 709

4 unchanged sentences

TJX’s policy with respect to the funded plan is to fund, at a minimum, the amount required to maintain a funded status of 80 % of the applicable pension liability (the Funding Target pursuant to the Internal Revenue Code section 430) or such other amount as is sufficient to avoid restrictions with respect to the funding of nonqualified plans under the Internal Revenue Code.

We do not anticipate any required funding in fiscal 2021 for the funded plan.

We anticipate making contributions of $ 3.1 million to provide current benefits coming due under the unfunded plan in fiscal 2021.

The Company does not anticipate any required funding in fiscal 2022 for the funded plan.

The Company anticipates making contributions of $ 4 million to provide current benefits coming due under the unfunded plan in fiscal 2022.

The amounts included in amortization of net actuarial loss and prior service cost in the table above have been reclassified in their entirety from accumulated other comprehensive loss to the Consolidated Statements of Income (Loss), net of related tax effects, for the periods presented.

Long-Term Debt and Credit Lines

The table below presents long-term debt, exclusive of current installments, as of October 31, 2020, February 1, 2020 and November 2, 2019.

The table below presents long-term debt, exclusive of current installments, as of May 1, 2021, January 30, 2021 and May 2, 2020.

All amounts are net of unamortized debt discounts.

In thousands October 31,

2020 February 1,

2020 November 2,

In thousands May 1,

2021 January 30,

Revolving credit facilities:

$ 500 million revolver, maturing March 11, 2022

$ — $ — $ 500,000

$ 500 million revolver, maturing May 10, 2024

General corporate debt:

2.75 % senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76 % after reduction of unamortized debt discount of $ 44 at October 31, 2020, $ 100 at February 1, 2020 and $ 119 at November 2, 2019)

2.750 % senior unsecured notes, redeemed on April 15, 2021 (effective interest rate of 2.76 % after reduction of unamortized debt discount of $ 25 at January 30, 2021 and $ 81 at May 2, 2020)

$ — $ 749,975 $ 749,919

2.50 % senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51 % after reduction of unamortized debt discount of $ 111 at October 31, 2020, $ 145 at February 1, 2020 and $ 156 at November 2, 2019)

2.500 % senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51 % after reduction of unamortized debt discount of $ 89 at May 1, 2021, $ 100 at January 30, 2021 and $ 134 at May 2, 2020)

499,911 499,900 499,866

3.50 % senior unsecured notes, maturing April 15, 2025 (effective interest rate of 3.58 % after reduction of unamortized debt discount of $ 4,461 at October 31, 2020)

3.500 % senior unsecured notes, maturing April 15, 2025 (effective interest rate of 3.58 % after reduction of unamortized debt discount of $ 3,956 at May 1, 2021, $ 4,208 at January 30, 2021 and $ 4,966 at May 2, 2020)

1,246,044 1,245,792 1,245,034

2.25 % senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32 % after reduction of unamortized debt discount of $ 4,352 at October 31, 2020, $ 4,911 at February 1, 2020 and $ 5,097 at November 2, 2019)

2.250 % senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32 % after reduction of unamortized debt discount of $ 3,979 at May 1, 2021, $ 4,165 at January 30, 2021 and $ 4,725 at May 2, 2020)

996,021 995,835 995,275

3.75 % senior unsecured notes, maturing April 15, 2027 (effective interest rate of 3.76 % after reduction of unamortized debt discount of $ 474 at October 31, 2020)

3.875 % senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89 % after reduction of unamortized debt discount of $ 1,471 at October 31, 2020)

3.750 % senior unsecured notes, maturing April 15, 2027 (effective interest rate of 3.76 % after reduction of unamortized debt discount of $ 437 at May 1, 2021, $ 456 at January 30, 2021 and $ 511 at May 2, 2020)

749,563 749,544 749,489

4.50 % senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52 % after reduction of unamortized debt discount of $ 4,333 at October 31, 2020)

1.150 % senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18 % after reduction of unamortized debt discount of $ 907 at May 1, 2021 and $ 939 at January 30, 2021)

499,093 499,061 —

3.875 % senior unsecured notes, maturing April 15, 2030, see tender offer details below (effective interest rate of 3.89 % after reduction of unamortized debt discount of $ 553 at May 1, 2021, $ 568 at January 30, 2021 and $ 1,549 at May 2, 2020)

495,297 495,282 1,248,451

1.600 % senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61 % after reduction of unamortized debt discount of $ 595 at May 1, 2021 and $ 610 at January 30, 2021)

499,405 499,390 —

4.500 % senior unsecured notes, maturing April 15, 2050;

see tender offer details below (effective interest rate of 4.52 % after reduction of unamortized debt discount of $ 2,189 at May 1, 2021, $ 2,208 at January 30, 2021 and $ 4,405 at May 2, 2020)

383,310 383,291 745,595

Total debt 5,368,644 6,118,070 7,233,629

2 unchanged sentences

Long-term debt $ 5,334,864 $ 5,332,921 $ 7,192,413

On April 1, 2020, given the rapidly changing environment and level of uncertainty created by the COVID-19 pandemic and the associated impact on future earnings, the Company completed the issuance and sale of (a) $ 1.25 billion aggregate principal amount of 3.500 % notes due 2025, (b) $ 750.0 million aggregate principal amount of 3.750 % notes due 2027, (c) $ 1.25 billion aggregate principal amount of 3.875 % notes due 2030 and (d) $ 750.0 million aggregate principal amount of 4.500 % notes due 2050, all of which was outstanding at October 31, 2020.

Subsequent to the end of the third quarter, on November 18, 2020, in order to refinance a portion of the notes issued on April 1, 2020, the Company simultaneously commenced cash tender offers (collectively the “Tender Offer”) to repurchase up to $ 750.0 million combined aggregate principal amount of certain of its existing notes and commenced a notes offering pursuant to which, on November 30, 2020, it issued (a) $ 500.0 million aggregate principal amount of 1.150 % notes due 2028 and (b) $ 500.0 million aggregate principal amount of 1.600 % notes due 2031 to fund, in whole or in part, the Tender Offer.

The Tender Offer will expire on December 16, 2020 at 11:59 pm New York City time, unless extended or earlier terminated by the Company.

The early tender deadline is December 2, 2020 at 5:00 pm New York City time, unless extended or early terminated by the Company.

For additional information on these transactions, see Note M—Subsequent Events.

During the fiscal quarter ended October 31, 2020, TJX had a $ 500.0 million revolving credit facility that matures in March 2022 (the “2022 Revolving Credit Facility”) and a $ 500.0 million revolving credit facility that matures in May 2024 (the “2024 Revolving Credit Facility”) and, on August 10, 2020, the Company increased its borrowing capacity with a $ 500 million 364 day revolving credit facility (the “364-Day Revolving Credit Facility”).

During the fiscal quarter ended May 2, 2020 , given the rapidly changing environment and level of uncertainty created by the COVID-19 pandemic, the Company completed the issuance and sale of (a) $ 1.25 billion aggregate principal amount of 3.500 % notes due 2025, (b) $ 750 million aggregate principal amount of 3.750 % notes due 2027, (c) $ 1.25 billion aggregate principal amount of 3.875 % notes due 2030 and (d) $ 750 million aggregate principal amount of 4.500 % notes due 2050.

Portions of the 3.875 % notes due 2030 and 4.500 % notes due 2050 were subsequently repurchased, reducing the aggregate principal amount outstanding to $ 495.5 million and $ 385.5 million, respectively, pursuant to cash tender offers made by the Company in December 2020.

Interest on these notes are payable semi-annually.

In November 2020, TJX completed the issuance of (a) $ 500 million aggregate principal amount of 1.150 % notes due 2028 and (b) $ 500 million aggregate principal amount of 1.600 % notes due 2031.

Interest on these notes are payable semi-annually beginning May 2021.

On April 15, 2021, the Company redeemed all of the outstanding $ 750 million in aggregate principal amount of its 2.750 % Notes due June 15, 2021 at a redemption price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest thereon to the redemption date.

Subsequent to the end of the first quarter of fiscal 2022, the Company announced make-whole calls for its $ 1.25 billion aggregate principal amount of 3.500 % Notes maturing in 2025 and its $ 750 million aggregate principal amount of 3.750 % Notes maturing in 2027 pursuant to notices of redemption issued to holders of such notes in accordance with the applicable indenture.

These make-whole calls are expected to settle in June 2021, and once completed the Company anticipates recording a pre-tax loss on the early extinguishment of these notes of approximately $ 250 million in the second quarter of fiscal 2022.

During the fiscal quarter ended May 1, 2021, TJX had a $ 500 million 364 day revolving credit facility that matures in August 2021 (the “364-Day Revolving Credit Facility”), a $ 500 million revolving credit facility that matures in March 2022 (the “2022 Revolving Credit Facility”) and a $ 500 million revolving credit facility that matures in May 2024 (the “2024 Revolving Credit Facility”).

Under these credit facilities, the Company has borrowing capacity of $ 1.5 billion, all of which remains available to the Company.

I n July 2020, t he Company paid off the $ 1.0 billion it had drawn down on the 2022 Revolving Credit Facility and 2024 Revolving Credit Facility during the first quarter of fiscal 2021.

The six month interest rate on these borrowings was 1.757 % through May 15, 2020, and increased to 2.007 % through the payoff date.

The terms of these revolving credit facilities require quarterly payments on the committed amount and payment of interest on borrowings at rates based on LIBOR or a base rate plus a variable margin, in each case based on the Company’s long term debt ratings.

The 2022 Revolving Credit Facility and the 2024 Revolving Credit Facility require usages fees based on total credit extensions under such facilities.

As of October 31, 2020, February 1, 2020 and November 2, 2019, and during the quarter and year then ended, there were no amounts outstanding under these facilities.

Beginning with the fiscal quarter ending May 1, 2021, the terms and covenants under the revolving credit facilities require the Company to maintain a quarterly-tested leverage ratio of funded debt to earnings before interest, taxes, depreciation and amortization and rentals (“EBITDAR”) of not more than 5.00 to 1.00, with an incremental 0.50 stepdown each quarter thereafter, until the fourth quarter of fiscal 2022 when the new covenant of 3.50 to 1.00 permanently applies.

In addition, the Company is required to maintain a minimum liquidity, defined as unrestricted cash and cash equivalents and aggregate borrowing availability under the 2022 revolving credit facility and the 2024 revolving credit facility plus, under the 364 Day Revolving Credit Facility, borrowing ability under that facility, of at least $ 1.5 billion through the period ending April 30, 2021, as well as minimum EBITDAR of $ 650.0 million for the fiscal quarter ending January 30, 2021.

The Company was in compliance with all covenants related to its credit facilities at the end of all periods presented.

As of October 31, 2020, February 1, 2020 and November 2, 2019, 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 October 31, 2020, February 1, 2020 and November 2, 2019, and during the quarters and year then ended, there were no amounts outstanding on the Canadian credit line.

As of October 31, 2020, February 1, 2020 and November 2, 2019, our European business at TJX International had an uncommitted credit line of £ 5 million.

As of October 31, 2020, February 1, 2020 and November 2, 2019, and during the quarters and year then ended, there were no amounts outstanding on the European credit line.

The e ffective income tax rate was 14.7 % for the third quarter of fiscal 2021 and 26.2 % for the third quarter of fiscal 2020.

The e ffective income tax rate was 43.9 % for the nine months ended October 31, 2020 compared to 25.7 % for the nine months ended November 2, 2019.

The decrease in the third quarter, and increase in the year to date, effective income tax rates of fiscal 2021 are primarily due to the jurisdictional mix of profits and losses and the better than anticipated third quarter results.

TJX had net unrecognized tax benefits of $ 267.1 million as of October 31, 2020, $ 254.8 million as of February 1, 2020 and $ 245.8 million as of November 2, 2019.

As of May 2, 2020, $ 1 billion was outstanding under these two facilities, and was subsequently repaid in July 2020.

The amounts drawn are included as outstanding long-term debt in the table above.

The six month interest rate on these borrowings was 1.757 % through May 15, 2020, and increased to 2.007 % through the payoff date.

As of May 1, 2021 and January 30, 2021, there were no amounts outstanding under any of the Company’s facilities.

TJX was in compliance with all covenants related to its credit facilities at the end of all periods presented.

As of May 1, 2021, January 30, 2021 and May 2, 2020, 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 May 1, 2021, January 30, 2021 and May 2, 2020, and during the quarters and year then ended, there were no amounts outstanding on the Canadian credit line.

As of May 1, 2021, January 30, 2021 and May 2, 2020, our European business at TJX International had an uncommitted credit line of £ 5 million.

As of May 1, 2021, January 30, 2021 and May 2, 2020, and during the quarters and year then ended, there were no amounts outstanding on the European credit line.

The e ffective income tax rate was 26.0 % for the first quarter of fiscal 2022 and 33.9 % for the first quarter of fiscal 2021.

The decrease in the effective income tax rate was primarily a result of the ability to carry back the anticipated loss from the first quarter of fiscal 2021 to earlier tax years with higher tax rates due to a benefit provided by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted on March 27, 2020.

TJX had net unrecognized tax benefits of $ 278 million as of May 1, 2021, $ 272 million as of January 30, 2021 and $ 256 million as of May 2, 2020.

TJX is subject to U.S.

3 unchanged sentences

TJX’s accounting policy classifies interest and penalties related to income tax matters as part of income tax expense.

The total accrued amount on the Consolidated Balance Sheets for interest and penalties was $ 34.2 million as of October 31, 2020, $ 27.9 million as of February 1, 2020 and $ 29.3 million as of November 2, 2019.

The total accrued amount on the Consolidated Balance Sheets for interest and penalties was $ 38 million as of May 1, 2021, $ 36 million as of January 30, 2021 and $ 30 million as of May 2, 2020.

Based on the outcome of tax examinations or judicial or administrative proceedings, or as a result of the expiration of statutes of limitations in specific jurisdictions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those presented in the Consolidated Financial Statements.

4 unchanged sentences

TJX has contingent obligations on leases, for which it was a lessee or guarantor, which were assigned to third parties without TJX being released by the landlords.

We have had numerous leases from our former operations where our guarantee required us to satisfy some of these lease obligations and we established appropriate reserves.

We may be contingently liable on up to eight leases of former TJX businesses, for which we believe the likelihood of future liability to TJX is remote.

We may also be contingently liable for assignments and subleases if the subtenants or assignees do not fulfill their obligations.

TJX estimates the undiscounted value of these contingent obligations as of October 31, 2020 to be approximately $ 12 million.

TJX believes that most or all of these contingent obligations will not revert to the Company and, to the extent they do, may be resolved for substantially less due to mitigating factors including TJX's expectation to further sublet.

The Company has had numerous leases from its former operations where its guarantee required it to satisfy some of these lease obligations and TJX established appropriate reserves.

The Company may be contingently liable on up to eight leases of former TJX businesses, for which the Company believes the likelihood of future liability to TJX is remote.

The Company may also be contingently liable for assignments and subleases if the assignees or subtenants do not fulfill their obligations.

TJX estimates the undiscounted value of these contingent obligations as of May 1, 2021 to be approximately $ 9 million.

TJX is a party to various agreements under which it may be obligated to indemnify the other party with respect to certain losses related to matters including title to assets sold, specified environmental matters or certain income taxes.

These obligations are often limited in time and amount.

There are no amounts reflected in our Consolidated Balance Sheets with respect to these contingent obligations.

There are no amounts reflected in the Company’s Consolidated Balance Sheets with respect to these contingent obligations.

Contingencies

TJX is subject to certain legal proceedings, lawsuits, disputes and claims that arise from time to time in the ordinary course of our business.

In addition, TJX is a defendant in several lawsuits filed in federal and state courts brought as putative class or collective actions on behalf of various groups of current and former salaried and hourly Associates in the U.S.

TJX is subject to certain legal proceedings, lawsuits, disputes and claims that arise from time to time in the ordinary course of its business.

In addition, TJX is a defendant in several lawsuits filed in federal and state courts brought as putative class, collective, and/or representative actions on behalf of various groups of current and former salaried and hourly associates in the U.S.

The lawsuits allege violations of the Fair Labor Standards Act and of state wage and hour and other labor statutes.

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In connection with ongoing litigation, an immaterial amount has been accrued in the accompanying Consolidated Financial Statements.

Subsequent Events

On November 18, 2020, the Company announced the issuance of $ 500.0 million in aggregate principal amount of 1.150 % notes due 2028 (“2028 Notes”) and $ 500.0 million in aggregate principal amount of 1.600 % notes due 2031 (“2031 Notes”).

This issuance was completed on November 30, 2020.

On November 18, 2020, the Company concurrently announced the commencement of the Tender Offer to purchase up to $ 750.0 million combined aggregate principal amount (the “Maximum Tender Amount”) of certain of its existing notes (collectively, the “Tender Offer Notes”) in the following priority (1) 4.500 % notes due 2050, (2) 3.875 % notes due 2030, and (3) 3.750 % notes due 2027.

TJX reserves the absolute right to increase or decrease the Maximum Tender Amount, subject to compliance with applicable law.

There can be no assurance that TJX will increase or decrease the Maximum Tender Amount.

The Tender Offer will expire on December 16, 2020 at 11:59pm New York City time, unless extended or earlier terminated by the Company.

The early tender deadline is December 2, 2020, at 5:00pm New York City time, unless extended or earlier terminated by the Company.

Tender Offer Notes validly tendered by the early tender deadline will qualify for an early tender premium and repurchase of such Tender Offer Notes is expected to be completed on December 4, 2020.

The Company expects to use the proceeds from this issuance, together with cash on hand, for the repurchase of the Tender Offer Notes tendered and the payment of related premiums, fees and expenses.

Any net proceeds not used for the foregoing shall be used for general corporate purposes, which may include working capital and capital expenditures and repayment of indebtedness.

In the fourth quarter of fiscal 2021, the Company expects to record a loss on early extinguishment of debt, the amount of which would be dependent on the results of the Tender Offer.

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What changed 10-Q

Item 1. Financial Statements