What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-30 compared with 2021-03-31 · 319 added, 446 removed, 1219 unchanged (39% of the section changed)

12 unchanged sentences

– Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of TJX are being made only in accordance with authorizations of management and directors of TJX;

– Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of TJX’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

5 unchanged sentences

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

15 unchanged sentences

The information required by this Item will appear under the headings “Audit Committee Report” and “Auditor Fees” in our Proxy Statement, which sections are incorporated herein by reference.

Exhibits, Financial Statement Schedules

(a) FINANCIAL STATEMENT SCHEDULES

Exhibits, Financial Statement Schedule

(a) FINANCIAL STATEMENT SCHEDULE

For a list of the consolidated financial information `included herein, see Index to the Consolidated Financial Statements on page F-1.

4 unchanged sentences

$ 168 $ 5,627 $ 5,653 $ 142

Fiscal Year Ended February 1, 2020

Fiscal Year Ended January 30, 2021

$ 109 $ 3,530 $ 3,471 $ 168

53 unchanged sentences

10-K 10.03 4/3/2019

10.04 The Amendment to the Employment Agreement between Carol Meyrowitz and TJX effective as of January 28, 2022, filed herewith*

10.05 The Executive Severance Plan Participation Agreement dated September 27, 2018 between Ernie Herrman and TJX*

2 unchanged sentences

10-K 10.05 4/3/2019

10.07 The Amendment to the Employment Agreement between Ernie Herrman and TJX effective as of January 28, 2022, filed herewith*

10.08 The Employment Agreement dated February 2, 2018 between Richard Sherr and TJX*

4 unchanged sentences

10-K 10.10 4/3/2019

10.09 The Amendment to the Employment Agreement between Richard Sherr and TJX effective as of January 29, 2021, filed herewith*

10.11 The Amendment to the Employment Agreement between Richard Sherr and TJX effective as of January 29, 2021 *

10-K 10.09 3/31/2021

Incorporate by Reference

Description Form Exhibit No.

10.12 The Employment Agreement dated February 2, 2018 between Scott Goldenberg and TJX*

2 unchanged sentences

10-Q 10.5 12/4/2018

Incorporate by Reference

Description Form Exhibit No.

10.14 The Amendment to the Employment Agreement between Scott Goldenberg and TJX effective as of February 13, 2019*

10-K 10.13 4/3/2019

10.13 The Amendment to the Employment Agreement between Scott Goldenberg and TJX effective as of January 29, 2021, filed herewith*

10.15 The Amendment to the Employment Agreement between Scott Goldenberg and TJX effective as of January 29, 2021 *

10-K 10.13 3/31/2021

10.16 The Employment Agreement dated February 2, 2018 between Kenneth Canestrari and TJX*

4 unchanged sentences

10-K 10.16 4/3/2019

10.17 The Amendment to the Employment Agreement between Kenneth Canestrari and TJX effective as of January 29, 2021, filed herewith*

10.18 The Employment Agreement dated January 16, 2018 between Douglas Mizzi and TJX*

10-K 10.7 4/4/2018

10.19 The Executive Severance Plan Participation Agreement dated September 27, 2018 between Douglas Mizzi and TJX*

10-Q 10.8 12/4/2018

10.20 The Amendment to the Employment Agreement between Douglas Mizzi and TJX effective as of February 13, 2019*

10.19 The Amendment to the Employment Agreement between Kenneth Canestrari and TJX effective as of January 29, 2021 *

10-K 10.17 3/31/2021

10.21 The Amendment to the Employment Agreement between Douglas Mizzi and TJX effective as of January 29, 2021, filed herewith*

10.20 The Stock Incentive Plan (2013 Restatement)*

12 unchanged sentences

10.26 The Form of Non-Qualified Stock Option Terms and Conditions granted under the Stock Incentive Plan as of September 20, 2012*

10-K 10.19 3/27/2012

10.29 The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of September 20, 2012*

10-Q 10.2 11/29/2012

10.30 The Form of Non-Qualified Stock Option Terms and Conditions granted under the Stock Incentive Plan as of September 20, 2012*

10-Q 10.2 11/29/2012

10.27 The Form of Non-Qualified Stock Option Certificate granted under the Stock Incentive Plan as of September 19, 2013*

16 unchanged sentences

10-Q 10.02 5/31/2019

10.40 The Form of Performance Share Unit Award granted under the Stock Incentive Plan as of April 1, 2019*

10.36 The Form of Performance Share Unit Award granted under the Stock Incentive Plan as of March 29, 2021*

10-Q 10.1 5/28/2021

10.41 The Form of Restricted Stock Unit Award granted under the Stock Incentive Plan as of April 1, 2019*

10.37 The Form of Restricted Stock Unit Award granted under the Stock Incentive Plan as of March 29, 2021*

10-Q 10.2 5/28/2021

Incorporate by Reference

Description Form Exhibit No.

10.38 The Form of Deferred Stock Award for Directors granted under the Stock Incentive Plan*

8 unchanged sentences

10-K 10.10 4/28/2000

Incorporate by Reference

Description Form Exhibit No.

10.43 The Third and Fourth Amendments to the GDCP*

4 unchanged sentences

10-Q 10.3 5/29/2015

10.50 The Executive Savings Plan (As Amended and Restated, Effective January 1, 2015) (the ESP)*

10-K 10.25 3/31/2015

10.51 The First Amendment to the ESP, dated December 30, 2015*

10-K 10.25 3/29/2016

10.46 The Executive Savings Plan (As Amended and Restated, Effective January 1, 20 22 ) (the ESP) , filed herewith *

10.47 The Form of TJX Indemnification Agreement for its executive officers and directors*(p) 10-K 10(r) 4/27/1990

10 unchanged sentences

10.53 Third Amendment to 2022 Revolving Credit Agreement, dated as of November 24, 2020, by and among The TJX Companies, Inc., the lenders party thereto and U.S.

Bank National Association, as administrative agent, filed herewith

Bank National Association, as administrative agent

10-K 10.58 3/31/2021

10.54 First Amendment to 2024 Revolving Credit Agreement, dated as of May 10, 2019, by and among TJX, U.S.

5 unchanged sentences

10.56 Third Amendment to 2024 Revolving Credit Agreement, dated as of November 24, 2020, by and among TJX, the lender party thereto and U.S.

Bank National Association, as administrative agent, filed herewith

Bank National Association, as administrative agent

10-K 10.61 3/31/2021

10.57 364 Day Revolving Credit Agreement, dated August 10, 2020, by and among The TJX Companies, Inc., the lenders from time to time party thereto, Bank of America, N.A., as syndication agent, U.S.

8 unchanged sentences

Bank National Association, Deutsche Bank Securities Inc., HSBC Bank USA, National Association, JPMorgan Chase Bank, N.A.

and Wells Fargo Bank, National Association, as lead arrangers and bookrunners, filed herewith

and Wells Fargo Bank, National Association, as lead arrangers and bookrunners

10-K 10.63 3/31/2021

10.59 2026 Revolving Credit Agreement, dated June 25, 2021, by and among the TJX Companies, Inc., the lenders from time to time party thereto, U.S.

Bank National Association, as administrative agent, HSBC Bank USA, National Association and Wells Fargo Bank, National Association, as co-syndication agents, and Bank of America, N.A., JPMorgan Chase Bank, N.A.

and Deutsche Bank Securities, Inc., as co-documentation agents.

8-K 10.1 6/29/2021

21 Subsidiaries of TJX, filed herewith

2 unchanged sentences

31.1 Certification Statement of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith

Incorporate by Reference

Description Form Exhibit No.

31.2 Certification Statement of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith

32.1 Certification Statement of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith

Incorporate by Reference

Description Form Exhibit No.

32.2 Certification Statement of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith

29 unchanged sentences

O’Brien, Director

KIM GOODWIN* WILLOW B.

Kim Goodwin, Director Willow B.

Shire, Director

Kim Goodwin, Director

*BY /s/ SCOTT GOLDENBERG

3 unchanged sentences

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

For Fiscal Years Ended January 30, 2021, February 1, 2020 and February 2, 2019.

Report of Independent Registered Public Accounting Firm

For Fiscal Years Ended January 29, 2022, January 30, 2021 and February 1, 2020.

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Financial Statements:

11 unchanged sentences

We have audited the accompanying consolidated balance sheets of The TJX Companies, Inc.

and its subsidiaries (the “Company”) as of January 30, 2021 and February 1, 2020, and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended January 30, 2021, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended January 30, 2021 appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of January 29, 2022 and January 30, 2021 and the related consolidated statements of income, of comprehensive income, of shareholders' equity and of cash flows for each of the three years in the period ended January 29, 2022 including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended January 29, 2022 appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 30, 2021 and February 1, 2020, and the results of its operations and its cash flows for each of the three years in the period ended January 30, 2021 in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of January 29, 2022 and January 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 29, 2022 in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2022 based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

24 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Tax (Benefit) Provision

As described in Note L to the consolidated financial statements, the Company recorded a benefit for income taxes of $1.2 million for the year ended January 30, 2021, has a deferred tax asset net of deferred tax liability of $90 million, including a valuation allowance of $77 million, as of January 30, 2021 and total gross unrecognized tax benefits of $269 million as of January 30, 2021, of which $250 million would affect the Company’s effective tax rate if recognized in a future period.

The Company is subject to taxation in the United States, as well as various state, local and foreign jurisdictions.

The use of estimates and judgments, as well as the interpretation and application of complex tax laws is required by management to determine its (benefit) provision for income taxes.

The principal considerations for our determination that performing procedures relating to the (benefit) provision for income taxes is a critical audit matter are the (i) the significant judgment by management when determining the (benefit) provision for income taxes, which led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures relating to the (benefit) provision for income taxes.

Income Tax Provision (Benefit)

As described in Note K to the consolidated financial statements, the Company recorded a provision for income taxes of $1.1 billion for the year ended January 29, 2022, has a deferred tax asset net of deferred tax liability of $141 million, including a valuation allowance of $85 million, as of January 29, 2022 and total gross unrecognized tax benefits of $280 million as of January 29, 2022, of which $260 million would affect the Company’s effective tax rate if recognized in a future period.

The Company is subject to taxation in the United States, as well as multiple state, local and foreign jurisdictions.

The use of estimates and judgments, as well as the interpretation and application of complex tax laws is required by management to determine its provision (benefit) for income taxes.

The principal considerations for our determination that performing procedures relating to the provision (benefit) for income taxes is a critical audit matter are the (i) the significant judgment by management when determining the provision (benefit) for income taxes, which led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures relating to the provision (benefit) for income taxes.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the (benefit) provision for income taxes.

These procedures also included, among others (i) testing the (benefit) provision for income taxes, including the rate reconciliation and current and deferred tax (benefit) provision, and (ii) evaluating the completeness of uncertain tax positions, including application of foreign and domestic tax laws and regulations.

These procedures included testing the effectiveness of controls relating to the provision (benefit) for income taxes.

These procedures also included, among others (i) testing the provision (benefit) for income taxes, including the rate reconciliation and current and deferred tax provision (benefit), and (ii) evaluating the completeness of uncertain tax positions, including application of foreign and domestic tax laws and regulations.

/s/ PricewaterhouseCoopers LLP

6 unchanged sentences

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

4 unchanged sentences

Interest expense, net 115,076 180,734 10,026

Pension settlement charge — — 36,122

Income before income taxes 4,397,608 89,263 4,406,183

Benefit (provision) for income taxes 1,207 ( 1,133,990 ) ( 1,113,413 )

Provision (benefit) for income taxes 1,114,793 ( 1,207 ) 1,133,990

Net income $ 3,282,815 $ 90,470 $ 3,272,193

3 unchanged sentences

Weighted average common shares – diluted 1,215,591 1,214,703 1,226,519

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

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

THE TJX COMPANIES, INC.

1 unchanged sentence

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

Net income $ 3,282,815 $ 90,470 $ 3,272,193

Additions to other comprehensive income (loss):

Foreign currency translation adjustments, net of related tax provision of $ 2,442 in fiscal 2021 and tax benefits of $ 1,189 and $ 8,233 in fiscal 2020 and 2019, respectively

Additions to other comprehensive (loss) income:

Foreign currency translation adjustments, net of related tax provisions of $ 207 and $ 2,442 in fiscal 2022 and 2021, respectively and tax benefit of $ 1,189 in fiscal 2020

( 46,715 ) 15,588 ( 3,943 )

Gain on net investment hedges, net of related tax provision of $ 7,113 in fiscal 2019

Recognition of net gains/losses on benefit obligations, net of related tax provision of $ 9,974 in fiscal 2021 and tax benefits of $ 20,489 and $ 19,813 in fiscal 2020 and 2019, respectively

Recognition of net gains/losses on benefit obligations, net of related tax benefit of $ 17,659 in fiscal 2022, tax provision of $ 9,974 in fiscal 2021 and tax benefit of $ 20,489 in fiscal 2020

( 48,504 ) 30,635 ( 56,275 )

Reclassifications from other comprehensive loss to net income:

Pension settlement charge, net of related tax provision of $ 9,641 in fiscal 2019

Amortization of loss on cash flow hedge, net of related tax provisions of $ 603 , $ 303 , and $ 303 in fiscal 2022, 2021 and 2020, respectively

( 263 ) 831 831

Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $ 4,588 , $ 7,298 , and $ 6,019 , in fiscal 2022, 2021 and 2020, respectively

14,403 20,046 16,537

Other comprehensive income (loss), net of tax 67,100 ( 42,850 ) ( 188,462 )

Other comprehensive (loss) income, net of tax ( 81,079 ) 67,100 ( 42,850 )

Total comprehensive income $ 3,201,736 $ 157,570 $ 3,229,343

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

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

THE TJX COMPANIES, INC.

2 unchanged sentences

Fiscal Year Ended

2021 February 1,

2022 January 30,

Current assets:

22 unchanged sentences

Long-term debt 3,354,841 5,332,921

Commitments and contingencies (See Note O)

Commitments and contingencies (See Note N)

Shareholders’ equity

Preferred stock, authorized 5,000,000 shares, par value $ 1 , no shares issued

Common stock, authorized 1,800,000,000 shares, par value $ 1 , issued and outstanding 1,204,698,124 and 1,199,099,768 , respectively

Common stock, authorized 1,800,000,000 shares, par value $ 1 , issued and outstanding 1,181,188,731 and 1,204,698,124 shares, respectively

1,181,189 1,204,698

4 unchanged sentences

Total liabilities and shareholders’ equity $ 28,461,458 $ 30,813,555

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

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

THE TJX COMPANIES, INC.

1 unchanged sentence

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

7 unchanged sentences

Share-based compensation 189,048 58,519 124,957

Pension settlement charge — — 36,122

Changes in assets and liabilities:

(Increase) in accounts receivable ( 61,452 ) ( 71,091 ) ( 42,998 )

Decrease (increase) in merchandise inventories 588,756 ( 296,541 ) ( 465,429 )

Decrease (increase) in income taxes recoverable 10,707 ( 34,177 ) 15,452

(Increase) decrease in prepaid expenses and other current assets ( 57,450 ) ( 17,084 ) 220,890

Increase in accounts payable 2,111,189 29,338 198,212

(Increase) decrease in merchandise inventories ( 1,657,753 ) 588,756 ( 296,541 )

(Increase) decrease in income taxes recoverable ( 78,275 ) 10,707 ( 34,177 )

Decrease (increase) in prepaid expenses and other current assets 32,563 ( 57,450 ) ( 17,084 )

(Decrease) increase in accounts payable ( 338,091 ) 2,111,189 29,338

Increase in accrued expenses and other liabilities 658,817 584,502 345,745

Increase (decrease) in income taxes payable 99,682 52,791 ( 128,342 )

Increase in net operating lease liabilities 200,243 29,617 —

(Decrease) increase in net operating lease liabilities ( 129,062 ) 200,243 29,617

Other, net ( 15,208 ) ( 42,842 ) ( 93,292 )

16 unchanged sentences

Cash dividends paid ( 1,251,833 ) ( 278,256 ) ( 1,071,562 )

Other — — ( 7,115 )

Net cash provided by (used in) financing activities 3,228,262 ( 2,414,871 ) ( 3,097,481 )

Net cash (used in) provided by financing activities ( 6,199,758 ) 3,228,262 ( 2,414,871 )

Effect of exchange rate changes on cash ( 54,146 ) 41,264 ( 3,175 )

Net increase in cash and cash equivalents 7,252,818 186,523 271,752

Net (decrease) increase in cash and cash equivalents ( 4,242,805 ) 7,252,818 186,523

Cash and cash equivalents at beginning of year 10,469,570 3,216,752 3,030,229

Cash and cash equivalents at end of year $ 6,226,765 $ 10,469,570 $ 3,216,752

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

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

THE TJX COMPANIES, INC.

17 unchanged sentences

Net income — — — — 90,470 90,470

Cumulative effect of accounting change — — — — 403 403

Other comprehensive (loss), net of tax — — — ( 42,850 ) — ( 42,850 )

Other comprehensive income, net of tax — — — 67,100 — 67,100

Cash dividends declared on common stock — — — — ( 311,970 ) ( 311,970 )

Recognition of share-based compensation — — 124,957 — — 124,957

Recognition (reversal) of share-based compensation — — 112,923 — ( 54,404 ) 58,519

Issuance of common stock under stock incentive plan and related tax effect 8,985 8,985 173,307 — ( 439 ) 181,853

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

Balance, February 1, 2020

Balance, January 30, 2021

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

Net income — — — — 3,282,815 3,282,815

Other comprehensive income, net of tax — — — 67,100 — 67,100

Other comprehensive (loss), net of tax — — — ( 81,079 ) — ( 81,079 )

Cash dividends declared on common stock — — — — ( 1,248,037 ) ( 1,248,037 )

Recognition (reversal) of share-based compensation — — 112,923 — ( 54,404 ) 58,519

Recognition of share-based compensation — — 189,048 — — 189,048

Issuance of common stock under stock incentive plan and related tax effect 7,780 7,780 196,426 — ( 347 ) 203,859

2 unchanged sentences

1,181,189 $ 1,181,189 $ — $ ( 687,150 ) $ 5,508,953 $ 6,002,992

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

The Consolidated Financial Statements and Notes thereto of The TJX Companies, Inc.

(referred to as “TJX,” “we” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the financial statements of all of TJX’s subsidiaries, all of which are wholly owned.

All of the Company's activities are conducted by TJX or its subsidiaries and are consolidated in these financial statements.

(referred to as “TJX,” “we” or “the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the consolidated financial statements of all of TJX’s subsidiaries, all of which are wholly owned.

All of the Company's activities are conducted by TJX or its subsidiaries and are consolidated in these consolidated financial statements.

All intercompany transactions have been eliminated in consolidation.

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

TJX is 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.

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

The fiscal years ended January 30, 2021 (“fiscal 2021”), February 1, 2020 (“fiscal 2020”) and February 2, 2019 ("fiscal 2019") were 52-week fiscal years.

The fiscal years ended January 29, 2022 (“fiscal 2022”), January 30, 2021 (“fiscal 2021”) and February 1, 2020 (“fiscal 2020”) were 52-week fiscal years.

Use of Estimates

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, 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.

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

Actual amounts could differ from 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 presentation.

COVID-19 Pandemic

The COVID-19 pandemic continued to impact the U.S.

and other countries around the world in fiscal 2022.

During fiscal 2022, while the Company's stores in the U.

and all of the Company’s e-commerce businesses remained open for the entire period, the Company had government-mandated temporary store closures in Europe, Canada, and Australia, and intermittently throughout the year, stores operated under government-mandated shopping restrictions, including capacity limitations.

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 with certainty 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.

Summary of Accounting Policies

8 unchanged sentences

TJX’s policy is to treat shipping costs as part of our fulfillment center costs within our operating expenditures.

As a result, shipping fee revenues received is recognized when control of the goods transfer to the customer and is recorded as net sales.

As a result, shipping fee revenues received are recognized when control of the goods transfer to the customer and are recorded as net sales.

Shipping and handling costs incurred by TJX are included in cost of sales, including buying and occupancy costs.

TJX disaggregates revenue by operating segment, see Note H—Segment Information.

TJX disaggregates revenue by operating segment, see Note G—Segment Information.

Deferred Gift Card Revenue

3 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

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

3 unchanged sentences

Balance, end of year $ 685,202 $ 576,187

TJX recognized $ 1.1 billion in gift card revenue in fiscal 2021 and $ 1.6 billion in each of fiscal 2020 and fiscal 2019.

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

TJX recognized $ 1.7 billion in gift card revenue in fiscal 2022 and $ 1.1 billion in fiscal 2021 and $ 1.6 billion in fiscal 2020.

The increase in fiscal 2022 in both deferred revenue and revenue recognized versus the prior year reflects the impact of lower customer traffic and temporary store and e-commerce closures in fiscal 2021 due to the COVID-19 pandemic.

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

6 unchanged sentences

The Company estimates the variable consideration using the expected value method when calculating the returns reserve because the difference in applying it to the individual contract would not differ materially.

Returns are estimated based on historical experience and are required to be established and presented at the gross sales value with an asset established for the estimated value of the merchandise returned separate from the refund liability.

Liabilities for return allowances are included in “Accrued expenses and other current liabilities” and the estimated value of the merchandise to be returned is included in “Prepaid expenses and other current assets” on our Consolidated Balance Sheets.

Consolidated Statements of Income Classifications

25 unchanged sentences

Maxx in Australia which is immaterial.

The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as that inventory has not been fully processed for sale (e.g.

inventory in transit and unprocessed inventory in our distribution centers).

The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as that inventory has not been fully processed for sale (i..

inventory in transit and unprocessed inventory in the Company’s distribution centers).

Under the retail method, TJX utilizes a permanent markdown strategy and lowers the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in the stores.

TJX records inventory at the time title transfers, which is typically at the time when inventory is shipped.

As a result, merchandise inventories on TJX’s Consolidated Balance Sheets include in-transit inventory of $ 1.2 billion at January 30, 2021 and $ 0.8 billion at February 1, 2020.

As a result, merchandise inventories on TJX’s Consolidated Balance Sheets include in-transit inventory of $ 1.7 billion at January 29, 2022 and $ 1.2 billion at January 30, 2021.

Comparable amounts were reflected in Accounts payable at those dates.

14 unchanged sentences

Performance-based awards are evaluated quarterly for probability of vesting and performance achievement levels.

See Note I—Stock Incentive Plan for a detailed discussion of share-based compensation.

See Note H—Stock Incentive Plan for a detailed discussion of share-based compensation.

TJX’s interest expense is presented net of capitalized interest and interest income.

2 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

4 unchanged sentences

TJX capitalizes interest during the active construction period of major capital projects and adds the interest to the related assets.

Depreciation and Amortization

Property and Equipment

For financial reporting purposes, TJX provides for depreciation and amortization of property using the straight-line method over the estimated useful lives of the assets.

2 unchanged sentences

Furniture, fixtures and equipment are depreciated over 3 to 10 years.

Depreciation and amortization expense for property was $ 858 million in fiscal 2021, $ 858 million in fiscal 2020 and $ 819 million in fiscal 2019.

TJX had no property held under finance leases during fiscal 2021 and fiscal 2020 or under capital leases during fiscal 2019.

Depreciation and amortization expense for property was $ 858 million in fiscal 2022, fiscal 2021 and fiscal 2020.

TJX had no property held under finance leases during fiscal 2022, fiscal 2021 or fiscal 2020.

Maintenance and repairs are charged to expense as incurred.

7 unchanged sentences

The Company has elected the practical expedient to not separate non-lease components from the lease components to which they relate and instead to combine them and account for them as a single lease component.

The Company also elected the accounting policy election to keep leases with a term of twelve months or less off the Consolidated Balance Sheets and recognizes these lease payments on a straight-line basis over the lease term.

Operating leases are included in “Operating lease right of use assets”, “Current portion of operating lease liabilities”, and “Long-term operating lease liabilities” on our Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

The Company also made the accounting policy election to keep leases with a term of twelve months or less off the Consolidated Balance Sheets and recognizes these lease payments on a straight-line basis over the lease term.

Operating leases are included in “Operating lease right of use assets,” “Current portion of operating lease liabilities,” and “Long-term operating lease liabilities” on the Company’s Consolidated Balance Sheets.

Right of use assets (“ROU”) assets represent TJX’s right to use an underlying asset for the lease term and lease liabilities represent TJX’s obligation to make lease payments arising from the lease.

At the inception of the arrangement, the Company determines if an arrangement is a lease based on assessment of the terms and conditions of the contract.

Operating lease ROU assets and lease liabilities are recognized at possession date based on the present value of lease payments over the lease term.

The majority of our leases are retail store locations and the possession date is typically 30 to 60 days prior to the opening of the store and generally occurs before the commencement of the lease term, as specified in the lease.

Our lessors do not provide an implicit rate, nor is one readily available, therefore the Company uses its incremental borrowing rate based on the information available at possession date in determining the present value of future lease payments.

The majority of the Company’s leases are retail store locations, and the possession date is typically 30 to 60 days prior to the opening of the store and generally occurs before the commencement of the lease term, as specified in the lease.

TJX’s lessors do not provide an implicit rate, nor is one readily available, therefore the Company uses its incremental borrowing rate based on the information available at possession date in determining the present value of future lease payments.

The incremental borrowing rate is calculated based on the US Consumer Discretionary yield curve and adjusted for collateralization and foreign currency impact for TJX International and Canada leases.

2 unchanged sentences

Lease expense for lease payments is recognized on a straight-line basis over the lease term within “Cost of sales, including buying and occupancy costs”.

See Note M—Leases for a detailed discussion of lease accounting.

See Note L—Leases for a detailed discussion of lease accounting.

Goodwill and Tradenames

Goodwill includes the excess of the purchase price paid over the carrying value of the minority interest acquired in fiscal 1990 in TJX’s former 83 %-owned subsidiary and represents goodwill associated with the T.J.

Maxx chain, and the purchase of Sierra Trading Post in fiscal 2013, which was rebranded as Sierra in fiscal 2019, both which are included in Marmaxx.

Maxx chain, and the purchase of Sierra Trading Post in fiscal 2013, which was rebranded as Sierra in fiscal 2019, both of which are included in Marmaxx.

The Company fully impaired the Sierra goodwill, recording an impairment charge of $ 97 million in fiscal 2018.

5 unchanged sentences

Effect of exchange rate changes on goodwill — 61 3,391 3,452

Balance, February 1, 2020 $ 70,027 $ 1,675 $ 23,844 $ 95,546

Balance, January 30, 2021 $ 70,027 $ 1,736 $ 27,235 $ 98,998

Effect of exchange rate changes on goodwill — — ( 2,336 ) ( 2,336 )

2 unchanged sentences

Tradenames, which are included in other assets, are the value assigned to the name “Marshalls,” acquired by TJX in fiscal 1996 as part of the acquisition of the Marshalls chain, the value assigned to the name “Sierra Trading Post,” acquired by TJX in fiscal 2013 and the value assigned to the name “Trade Secret,” acquired by TJX in fiscal 2016.

The tradenames were valued by calculating the discounted present value of assumed after-tax royalty payments.

The tradenames were valued utilizing the relief from royalty method, which calculates the discounted present value of assumed after-tax royalty payments.

The Marshalls tradename is considered to have an indefinite life and accordingly is not amortized.

3 unchanged sentences

Fiscal Year Ended

January 30, 2021 February 1, 2020

In thousands Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value

January 29, 2022 January 30, 2021

In thousands Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Impact of FX Net Carrying Value

Definite-lived intangible assets:

11 unchanged sentences

If the cash flow is less than the carrying value then an impairment charge will be recorded to the extent the fair value of an asset or asset group is less than the carrying value of that asset or asset group.

This resulted in immaterial impairment charges on operating lease right of use assets and store fixed assets in fiscal 2021 and fiscal 2020, and immaterial impairment charges on store fixed assets in fiscal 2019.

This resulted in immaterial impairment charges on operating lease right of use assets and store fixed assets in fiscal 2022, fiscal 2021 and fiscal 2020.

In fiscal 2021, the Company fully impaired the Trade Secret tradename.

There were no impairments related to tradenames in fiscal 2020 or 2019.

There were no impairments related to tradenames in fiscal 2022 or fiscal 2020.

Goodwill and indefinite life tradenames are tested for impairment whenever events or changes in circumstances indicate that an impairment may have occurred and at least annually in the fourth quarter of each fiscal year.

5 unchanged sentences

In fiscal 2022, fiscal 2021 and fiscal 2020, the Company bypassed the qualitative assessment and performed the quantitative impairment test.

There were no impairments related to the Company’s goodwill or indefinite life tradenames in fiscal 2021, 2020, or 2019.

There were no impairments related to the Company’s goodwill or indefinite life tradenames in fiscal 2022, fiscal 2021, or fiscal 2020.

Advertising Costs

11 unchanged sentences

In fiscal 2020, the Company acquired a 25 % ownership stake in privately held Familia, an established, off-price apparel and home fashions retailer operating stores throughout Russia.

The Company accounts for its equity investment in Familia using the equity method of accounting, with the investment recorded in Other assets on our Consolidated Balance Sheets, and the Company’s share of Familia’s results recorded in Selling, general and administrative expenses in our Consolidated Statements of Income.

The Company accounts for its equity investment in Familia using the equity method of accounting, with the investment recorded in Other assets on the Company’s Consolidated Balance Sheets, and the Company’s share of Familia’s results recorded in Selling, general and administrative expenses in the Company’s Consolidated Statements of Income.

Due to the timing and availability of financial information of Familia, the Company accounts for this equity method investment on a one-quarter lag.

1 unchanged sentence

Substantially all of this difference is comprised of goodwill.

Other indefinite-lived intangible assets consisting of tradename and customer relationships are amortized straight line over their useful lives of 10 years for the tradename and 7 years for customer relationships.

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

dollar as of January 30, 2021 resulted in a cumulative translation loss and reduced the carrying value of our investment by $ 35 million.

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

dollar as of January 29, 2022 resulted in a cumulative translation loss, which reduced the carrying value of TJX’s investment by approximately $ 40 million.

The cumulative translation loss has been recorded in the Company’s Consolidated Balance Sheets as a component of Accumulated other comprehensive loss.

This investment is evaluated for indicators of impairment on a periodic basis or whenever events or circumstances indicate the carrying amount may be other-than-temporarily impaired.

1 unchanged sentence

As of fiscal year ended 2022, 2021 and 2020, the Company determined that no impairment of its equity method investment existed.

Subsequent to the fiscal year ended January 29, 2022, given the recent Russian invasion of Ukraine, the Company has committed to divesting its equity ownership in Familia.

As a result of this commitment to divest, the Company may recognize an investment loss of up to $ 225 million.

Prior to divestiture, the Company may be required to record an impairment charge if the fair value of its investment in Familia declines below the carrying value on the Consolidated Balance Sheets.

Future Adoption of New Accounting Standards

1 unchanged sentence

Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”).

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 our Consolidated Financial Statements upon adoption and therefore, are not disclosed.

Recently Adopted Accounting Standards

Simplified Accounting for Income Taxes

In December 2019, the 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 Consolidated Financial Statements or disclosures for fiscal 2021.

Impact of the COVID-19 Pandemic

After a novel coronavirus disease (“COVID-19”) emerged and spread worldwide, the World Health Organization declared COVID-19 a pandemic in March 2020, and national, state and local governments and private entities began issuing various restrictions, including travel restrictions, restrictions on public gatherings, stay at home orders and advisories and quarantine or isolation protocols.

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

During April 2020, the Company temporarily furloughed the majority of the hourly store and distribution center Associates in the U.S.

and Canada, with employee benefits coverage for eligible Associates continuing during the temporary furlough at no cost to impacted Associates.

The Company also took comparable actions with respect to portions of our European and Australian workforces.

When the Company began to reopen stores and distribution centers in May 2020, it implemented new health and safety practices, including practices related to personal protective equipment and social distancing protocols.

Early in the fourth quarter of fiscal 2021, in response to increasing cases of COVID-19, hundreds of stores had additional temporary closures, primarily in Europe and Canada.

As of March 30, 2021, the Company has approximately 580 stores, primarily in Europe, that are temporarily closed due to government mandates in response to the COVID-19 global pandemic.

All of the Company’s e-commerce businesses remain open, including tkmaxx.com in the U.K.

In fiscal 2021, the Company amended the credit agreements governing its revolving credit facilities and as a result, the Company expects to maintain compliance with its covenants for at least one year from the issuance of these consolidated 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 its business, results of operations, financial position and cash flows.

Financial Actions

Balance Sheet, Cash Flow and Liquidity

During fiscal 2021 the Company generated $ 4.6 billion of operating cash flows and ended the year with $ 10.5 billion of cash.

In addition, the Company increased its borrowing capacity by entering into a $ 500 million 364 Day Revolving Credit Facility (as defined in Note K—Long-Term Debt and Credit Lines), making a total of $ 1.5 billion available to the Company under revolving credit facilities.

In the first quarter of fiscal 2021, TJX issued $ 4 billion aggregate principal amount of notes.

During the fourth quarter of fiscal 2021, the Company issued $ 1 billion in notes and accepted $ 1.12 billion in combined aggregate principal amount of certain of its notes issued in the first quarter of fiscal 2021 pursuant to cash tender offers.

The Company paid $ 1.42 billion aggregate consideration (including transaction costs) and recorded a $ 0.3 billion pre-tax loss on the early extinguishment for the accepted notes.

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

The Company's Board of Directors suspended its share buyback program and did not declare a dividend in the first nine months of fiscal 2021.

The Board of Directors declared a dividend of $ 0.26 per share in the fourth quarter of fiscal 2021, paid in March 2021.

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

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

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 fiscal year, benefiting operating cash flows.

As payment terms are reduced and we make deferred payments, the Company expects our operating cash flows to be negatively impacted.

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

Permanent markdowns, which had been or will be 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 inventory for fiscal 2021.

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

Given the substantial reduction in the Company’s sales and the reduced cash flow projections as a result of the temporary store closures during fiscal 2021 due to the COVID-19 pandemic, the Company determined that triggering events had occurred and that impairment assessments were warranted for certain stores.

This resulted in immaterial impairment charges for fiscal 2021 , related to operating lease right of use assets and store fixed assets.

In response to 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.

Throughout fiscal 2021, the Company continued to qualify for certain of these provisions, which partially offset related expenses.

During fiscal 2021, these programs reduced the Company’s expenses by approximately $ 0.5 billion o n its Consolidated Statements of Income, and increased Accounts receivable, net on its 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 a combined increase in Accrued expenses and other current liabilities and Other long-term liabilities o n 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.

The Company has reviewed the new guidance and has determined that it will either not apply to TJX or is not expected to be material to its Consolidated Financial Statements upon adoption and therefore, they are not disclosed.

Property at Cost

Presented below are the components of property at cost:

The following table presents the components of property at cost:

Fiscal Year Ended

In thousands January 29,

2021 February 1,

2022 January 30,

Land and buildings

10 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

United States $ 4,040,955 $ 3,844,711

4 unchanged sentences

Accumulated Other Comprehensive (Loss) Income

Amounts included in Accumulated other comprehensive (loss) income relate to the Company’s foreign currency translation adjustments, gains/losses on net investment derivatives, deferred gains/losses on pension and other post-retirement obligations and a cash flow hedge on issued debt, all of which are recorded net of the related income tax effects.

Amounts included in Accumulated other comprehensive (loss) income relate to the Company’s foreign currency translation adjustments, deferred gains/losses on pension and other post-retirement obligations and a cash flow hedge on issued debt, all of which are recorded net of the related income tax effects.

The following table details the changes in Accumulated other comprehensive (loss) income for fiscal 2022, fiscal 2021 and fiscal 2020:

8 unchanged sentences

( 3,943 ) — — ( 3,943 )

Recognition of net gains/losses on investment hedges (net of taxes of $ 7,113 )

19,538 — — 19,538

Recognition of net gains/losses on benefit obligations (net of taxes of $ 20,489 )

1 unchanged sentence

Reclassifications from other comprehensive loss to net income:

Pension settlement charge (net of taxes of $ 9,641 )

— 26,481 — 26,481

Amortization of loss on cash flow hedge (net of taxes of $ 303 )

11 unchanged sentences

— 20,046 — 20,046

Balance, February 1, 2020 $ ( 457,120 ) $ ( 215,483 ) $ ( 568 ) $ ( 673,171 )

Balance, January 30, 2021 $ ( 441,532 ) $ ( 164,802 ) $ 263 $ ( 606,071 )

Additions to other comprehensive loss:

5 unchanged sentences

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 $ 4,588 )

3 unchanged sentences

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 the Company’s 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.

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 in fiscal 2021, $ 1.6 billion in fiscal 2020 and $ 2.4 billion in fiscal 2019 and repurchased 3.4 million shares in fiscal 2021, 28.2 million shares in fiscal 2020 and 50.8 million shares in fiscal 2019.

During the second quarter of fiscal 2022, the Company lifted the temporary suspension of its previously authorized stock repurchase programs.

TJX repurchased and retired 32 million shares of its common stock at a cost of approximately $ 2.2 billion during fiscal 2022, on a “trade date” basis.

Prior to the suspension of the Company’s share repurchase program, during the first quarter of fiscal 2021, TJX repurchased and retired 3 million shares of its common stock at a cost of $ 0.2 billion on a “trade date” basis, and no shares were repurchased during the second quarter of fiscal 2021 through the first quarter of fiscal 2022.

TJX reflects stock repurchases in its consolidated financial statements on a “settlement date” or cash basis.

TJX had cash expenditures under repurchase programs of $ 2.2 billion in fiscal 2022, $ 0.2 billion in fiscal 2021 and $ 1.6 billion in fiscal 2020 and repurchased 31 million shares in fiscal 2022, 3 million shares in fiscal 2021 and 28 million shares in fiscal 2020.

These expenditures were funded by cash generated from operations.

As of January 30, 2021 TJX had approximately $ 3.0 billion available under previously announced stock repurchase programs.

In February 2022, the Company announced that its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $ 3.0 billion of TJX common stock from time to time.

Under this program and previously announced programs, TJX had approximately $ 3.8 billion available for repurchase as of January 29, 2022.

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

1 unchanged sentence

Earnings Per Share

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

The following table presents the calculation of basic and diluted earnings per share:

Fiscal Year Ended

Amounts in thousands except per share amounts January 30,

2021 February 1,

In thousands except per share amounts January 29,

2022 January 30,

2021 February 1,

14 unchanged sentences

The Company declared a dividend of $ 0.26 per share in the fourth quarter of fiscal 2021.

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 average price of TJX’s common stock for the related fiscal periods.

The weighted average common shares for the diluted earnings per share calculation excludes the impact of outstanding stock options if the assumed proceeds per share of the option is in excess of the average price of TJX’s common stock for the related fiscal periods.

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

5 unchanged sentences

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.

TJX recognizes all derivative instruments as either assets or liabilities in the Consolidated Balance Sheet and measures those instruments at fair value.

The fair values of the derivatives are classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts.

Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change.

For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of other comprehensive income or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged.

For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of accumulated other comprehensive (loss) or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged.

Diesel Fuel Contracts

4 unchanged sentences

The hedge agreements outstanding at January 29, 2022 relate to approximately 50 % of TJX’s estimated notional diesel requirements for fiscal 2023.

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

TJX elected not to apply hedge accounting rules to these contracts.

These diesel fuel hedge agreements will settle throughout fiscal 2023 and throughout the first month of fiscal 2024.

TJX elected not to apply hedge accounting to these contracts.

Foreign Currency Contracts

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, primarily in TJX International and TJX Canada.

These contracts typically have a term of twelve months or less.

The contracts outstanding at January 30, 2021 cover a portion of such actual and anticipated merchandise purchases throughout fiscal 2022.

The contracts outstanding at January 29, 2022 cover 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.

1 unchanged sentence

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 may sometimes generate 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.

TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt and intercompany interest payable.

This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the central buying entity for changes in the exchange rate between the Euro and British Pound.

A portion of the inflows of Euros to the central buying entity provides a natural hedge for merchandise purchased from third-party vendors that is denominated in Euros.

TJX calculates any excess Euro exposure each month and enters into forward contracts of approximately 30 days’ duration to mitigate this exposure.

TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt.

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.

TJX periodically reviews its net investments in foreign subsidiaries.

During the fiscal quarter ended May 5, 2018, TJX entered into net investment hedge contracts related to a portion of its investment in TJX Canada.

During the fiscal quarter ended August 4, 2018, TJX de-designated the net investment hedge contracts.

The remaining life of the foreign currency contracts provided a natural hedge to the declared cash dividend from TJX Canada.

The contracts settled during the second quarter of fiscal 2019 resulting in a pre-tax gain of $ 27 million while designated as a net investment hedge and subsequent to de-designation, a pre-tax gain of $ 19 million.

The $ 27 million gain is reflected in shareholders equity as a component of other comprehensive income.

The $ 19 million gain subsequent to de-designation is reflected in the income statement offsetting a foreign currency loss of $ 18 million on the declared dividends.

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 29, 2022:

3 unchanged sentences

U.S.$ Current

U.S.$ Net Fair

U.S.$ Net Fair Value

January 29, 2022

2 unchanged sentences

zł 25,000 £ 4,541 0.1816 Prepaid Exp $ 72 $ — $ 72

€ 60,000 £ 50,568 0.8428 Prepaid Exp 111 — 111

A$ 170,000 U.S.$ 122,061 0.7180 Prepaid Exp 2,047 — 2,047

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

U.S.$ 74,646 £ 55,000 0.7368 (Accrued Exp) — ( 918 ) ( 918 )

€ 200,000 U.S.$ 230,319 1.1516 Prepaid Exp 4,535 4,535

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

Economic hedges for which hedge accounting was not elected:

5 unchanged sentences

N/A Prepaid Exp 23,649 — 23,649

Intercompany billings in TJX International, primarily merchandise related:

€ 91,000 £ 75,894 0.8340 (Accrued Exp) — ( 145 ) ( 145 )

Merchandise purchase commitments:

C$ 987,756 U.S.$ 783,000 0.7927 Prepaid Exp / (Accrued Exp) 6,641 ( 80 ) 6,561

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 )

C$ 38,138 € 26,500 0.6948 (Accrued Exp) — ( 248 ) ( 248 )

£ 325,482 U.S.$ 442,100 1.3583 Prepaid Exp / (Accrued Exp) 6,023 ( 632 ) 5,391

zł 453,000 £ 82,112 0.1813 Prepaid Exp / (Accrued Exp) 744 ( 449 ) 295

A$ 65,551 U.S.$ 47,500 0.7246 Prepaid Exp 1,270 — 1,270

U.S.$ 66,989 € 59,000 0.8807 (Accrued Exp) — ( 820 ) ( 820 )

Total fair value of financial instruments $ 45,092 $ ( 3,292 ) $ 41,800

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

2 unchanged sentences

U.S.$ Current

U.S.$ Net Fair

February 1, 2020

U.S.$ Net Fair Value

January 30, 2021

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:

4 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 financial instruments $ 9,029 $ ( 21,921 ) $ ( 12,892 )

The impact of derivative financial instruments on the Consolidated Statements of Income during fiscal 2021, fiscal 2020 and fiscal 2019 are as follows:

Amount of Gain (Loss) Recognized in

The impact of derivative financial instruments on the Consolidated Statement of Income during fiscal 2022, fiscal 2021 and fiscal 2020 is presented below:

Location of Gain (Loss) Recognized in Income by Derivative Amount of Gain (Loss) Recognized in

Income by Derivative

In thousands Location of Gain (Loss) Recognized in Income by Derivative January 30,

2021 February 1,

In thousands January 29,

2022 January 30,

2021 February 1,

7 unchanged sentences

Merchandise purchase commitments Cost of sales, including buying and occupancy costs 23,952 ( 4,468 ) 10,484

(Loss) gain recognized in income $ ( 74,184 ) $ 10,288 $ 79,066

Included in the table above are realized losses of $ 74 million in fiscal 2021 and realized gains of $ 20 million in fiscal 2020 and $ 74 million in fiscal 2019, all of which were largely offset by gains and losses on the underlying hedged item.

Gain (loss) recognized in income $ 108,312 $ ( 74,184 ) $ 10,288

Included in the table above are realized gains of $ 54 million in fiscal 2022, realized losses of $ 74 million in fiscal 2021 and realized gains of $ 20 million in fiscal 2020, all of which were largely offset by gains and losses on the underlying hedged item.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date or “exit price.” The inputs used to measure fair value are generally classified into the following hierarchy:

The inputs used to measure fair value are generally classified into the following hierarchy:

Unadjusted quoted prices in active markets for identical assets or liabilities

4 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

Executive Savings Plan investments $ 387,666 $ 363,729

2 unchanged sentences

Foreign currency exchange contracts $ 3,292 $ 21,921

Diesel fuel contracts — 9,927

Investments designed to meet obligations under the Executive Savings Plan are invested in registered investment companies traded in active markets and are recorded at unadjusted quoted prices.

6 unchanged sentences

The fair value of long-term debt at January 29, 2022 was $ 3.5 billion compared to a carrying value of $ 3.4 billion.

The fair value of long-term debt at 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.

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

The fair value of long-term debt at February 1, 2020 was $ 2.3 billion compared to a carrying value of $ 2.2 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.

For additional information on long-term debt, see Note J—Long-Term Debt and Credit Lines.

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 years ended January 30, 2021, February 1, 2020 and February 2,

Certain assets and liabilities are measured at fair value on a nonrecurring basis, whereas the majority of 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 years ended January 29, 2022, January 30, 2021 and February 1,

2020, the Company did not record any material impairments to long-lived assets.

2 unchanged sentences

The Marmaxx segment (T.J.

Maxx, Marshalls, tjmaxx.com and marshalls.com) and the HomeGoods segment (HomeGoods and Homesense) both operate in the United States, the TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and the TJX International segment operates T.K.

Maxx, Marshalls, tjmaxx.com and marshalls.com) and the HomeGoods segment (HomeGoods, Homesense and homegoods.com) both operate in the United States, the TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and the TJX International segment operates T.K.

Maxx, Homesense and tkmaxx.com in Europe and T.K.

Maxx in Australia.

In addition to our four main business segments, Sierra operates sierra.com and retail stores in the U.S.

In addition to the Company’s four main business segments, Sierra operates sierra.com and retail stores in the U.S.

The results of Sierra are included in the Marmaxx segment.

1 unchanged sentence

HomeGoods and HomeSense offer home fashions.

The percentages of our consolidated revenues by major product category for the last three fiscal years are as follows:

The percentages of the Company’s consolidated revenues by major product category for the last three fiscal years are as follows:

Fiscal 2022 Fiscal 2021 Fiscal 2020

5 unchanged sentences

“Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities.

These measures of performance should not be considered alternatives to net income or cash flows from operating activities as an indicator of TJX’s performance or as a measure of liquidity.

This measure of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of TJX’s performance or as a measure of liquidity.

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

1 unchanged sentence

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

15 unchanged sentences

Interest expense, net 115,076 180,734 10,026

Pension settlement charge — — 36,122

Income before income taxes $ 4,397,608 $ 89,263 $ 4,406,183

2 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

7 unchanged sentences

7,292,905 11,317,381 4,023,043

Total identifiable assets (b)

Total identifiable assets

$ 28,461,458 $ 30,813,555 $ 24,145,003

5 unchanged sentences

TJX International 218,517 145,756 254,766

Total capital expenditures (c)

Total capital expenditures (b)

$ 1,044,794 $ 568,021 $ 1,223,116

5 unchanged sentences

TJX International 174,216 175,824 197,262

Corporate (d)

Corporate (c)

7,489 9,989 5,080

2 unchanged sentences

Consolidated cash, including cash held in the Company’s foreign entities, is included with corporate assets for consistency with the reporting of cash for the Company’s segments in the U.S.

The increase in Corporate identifiable assets in fiscal 2021 is primarily attributable to the increase in cash.

(b) On February 3, 2019, the Company adopted ASU 2016-02, Leases (Topic 842) using the modified retrospective method under ASU 2018-11, allowing it to not restate its prior period Consolidated Balance Sheets to reflect the new guidance.

The adoption of the new lease standard significantly increased assets and current and long term liabilities on the Company’s Consolidated Balance Sheets as it recorded operating lease right of use assets and corresponding operating lease liabilities.

For additional information, see Note M—Leases.

(d) Includes debt discount accretion and debt expense amortization.

(b) Fiscal 2022 increase in capital spending due to the COVID-19 pandemic impacts in fiscal 2021.

Stock Incentive Plan

TJX has a Stock Incentive Plan under which options and other share-based awards may be granted to its directors, officers and key employees.

This plan has been approved by TJX’s shareholders, and all share-based compensation awards are made under this plan.

The number of shares authorized for issuance under this plan has been approved by TJX’s shareholders, and all share-based compensation awards are made under this plan.

The Stock Incentive Plan, as amended with shareholder approval, has provided for the issuance of up to 696 million shares with 28 million shares available for future grants as of January 29, 2022.

1 unchanged sentence

Total compensation cost related to share-based compensation was $ 189 million, $ 59 million and $ 125 million in fiscal 2022, 2021 and 2020, respectively.

As of January 30, 2021, there was $ 149 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plan.

As of January 29, 2022, there was $ 160 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plan.

That cost is expected to be recognized over a weighted-average period of 2 years.

4 unchanged sentences

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

5 unchanged sentences

Weighted average fair value of options issued $ 12.85 $ 11.29 $ 10.84

(a) The reduction in the yield reflects the temporary suspension of dividends due to the COVID-19 pandemic.

(a) The reduction in the yield in fiscal 2021 reflected the temporary suspension of dividends due to the COVID-19 pandemic.

TJX calculated an implied dividend yield of 1.4 % by anticipating dividends to resume.

The decrease in expected dividend yield reflects the suspension of dividend payments during the first nine months of fiscal 2021.

The decrease in expected dividend yield reflected the suspension of dividend payments during the first nine months of fiscal 2021.

The risk-free interest rate is for periods within the contractual life of the option based on the U.S.

1 unchanged sentence

The Company uses historical data to estimate option exercises, employee termination behavior and dividend yield within the valuation model.

Expected volatility is based on a combination of implied volatility from traded options on our stock, and historical volatility during a term approximating the expected life of the option granted.

Expected volatility is based on a combination of implied volatility from traded options on the Company’s stock, and historical volatility during a term approximating the expected life of the option granted.

The expected option life represents an estimate of the period of time options are expected to remain outstanding based upon historical exercise trends.

3 unchanged sentences

Shares in thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

17 unchanged sentences

TJX grants restricted stock units and performance share units under the Stock Incentive Plan.

Restricted stock units, performance share units, and previously-granted performance-based stock awards are collectively referred to as stock awards.

Restricted stock units and performance share units are collectively referred to as stock awards.

These awards were granted without a purchase price to the recipient and are subject to vesting conditions.

Vesting conditions for performance share units and performance-based stock awards include specified performance criteria, generally for a period of three fiscal years.

Vesting conditions for performance share units include specified performance criteria, generally for a period of three fiscal years.

The grant date fair value of the stock awards is charged to income over the requisite service period during which the recipient must remain employed.

The fair value of the stock awards is determined at date of grant in accordance with ASC Topic 718 and, for performance share units and performance-based stock awards, assumes that performance goals will be achieved at target.

Performance share units, performance-based stock awards and related compensation costs recognized are adjusted, as applicable, for performance above or below the target specified in the award.

During fiscal 2021, TJX determined that performance share unit awards granted during fiscal 2019 and fiscal 2020 were not expected to vest under the original performance vesting conditions.

As a result, the expense previously recognized for these awards was reversed which decreased fiscal 2021 compensation expense by $ 55 million.

In January 2021, for certain participants, a discretionary payout with respect to performance share unit awards granted during fiscal 2019 was approved and constituted a modification of the awards during fiscal 2021.

Under ASC Topic 718 the modification requires that the fair value of these awards be adjusted to reflect the fair value on the date of the modification and resulted in a stock compensation charge of $ 16 million in fiscal 2021.

A summary of the status of our nonvested stock awards and changes during fiscal 2021 is presented below:

(in thousands) Weighted

The fair value of the stock awards is determined at date of grant in accordance with ASC Topic 718 and, for performance share units, assumes that performance goals will be achieved at target.

Performance share units and related compensation costs recognized are adjusted, as applicable, for performance above or below the target specified in the award.

During fiscal 2022 and fiscal 2021, modifications were approved to previously-granted nonvested performance share unit awards.

Under ASC Topic 718 these modifications required that the fair value of these awards be adjusted to reflect the fair value on the date of the modification and resulted in a share-based compensation charge of $ 37 million in fiscal 2022 and $ 16 million in fiscal 2021.

A summary of the status of the Company’s non-vested stock awards and changes during fiscal 2022 is presented below:

In thousands except grant date fair value Restricted Stock Units Performance Share Units Total Stock Awards Weighted

Nonvested at beginning of year 1,799 1,122 2,921 $ 51.36

6 unchanged sentences

The fair value of awards that vested was $ 44 million in fiscal 2022, $ 57 million in fiscal 2021, and $ 38 million in fiscal 2020.

The nonvested performance share units are based on the target level of performance achievement under the awards.

The actual payout of performance share units will depend on performance results for the award cycle.

TJX also awards deferred shares to its outside directors under the Stock Incentive Plan.

12 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

2021 January 29,

2022 January 30,

Change in projected benefit obligation:

10 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

2021 January 29,

2022 January 30,

Change in plan assets:

8 unchanged sentences

Fair value of plan assets at end of year 1,713,675 1,686,735 — —

Funded status – excess (asset) obligation $ ( 67,461 ) $ ( 29,858 ) $ 113,478 $ 104,823

Net (asset) liability recognized on Consolidated Balance Sheets $ ( 67,461 ) $ ( 29,858 ) $ 113,478 $ 104,823

Funded status – excess obligation (asset) $ 3,580 $ ( 67,461 ) $ 114,789 $ 113,478

Net liability (asset) recognized on Consolidated Balance Sheets $ 3,580 $ ( 67,461 ) $ 114,789 $ 113,478

Amounts not yet reflected in net periodic benefit cost and included in Accumulated other comprehensive income (loss):

3 unchanged sentences

The Consolidated Balance Sheets reflect the funded status of the plans with any unrecognized prior service cost and actuarial gains and losses recorded in Accumulated other comprehensive income (loss).

The combined net accrued liability of $ 46 million at January 30, 2021 is reflected on the Consolidate Balance Sheets as of that date as a current liability of $ 7 million, a long-term liability of $ 106 million, and a long-term asset of $ 67 million.

The combined net accrued liability of $ 75 million at February 1, 2020 is reflected on the Consolidated Balance Sheets as of that date as a current liability of $ 3 million, a long-term liability of $ 102 million, and a long-term asset of $ 30 million.

The reduction in the actuarial losses included in Accumulated other comprehensive income (loss) for the funded plan for fiscal 2021 was driven by the actual return on assets which exceeded our estimated return by $ 63 million.

The combined net accrued liability of $ 118 million at January 29, 2022 is reflected on the Consolidate Balance Sheets as of that date as a current liability of $ 4 million and a long-term liability of $ 114 million.

The combined net accrued liability of $ 46 million at January 30, 2021 is reflected on the Consolidated Balance Sheets as of that date as a current liability of $ 7 million, a long-term liability of $ 106 million, and a long-term asset of $ 67 million.

The increase in the actuarial losses included in Accumulated other comprehensive income (loss) for the funded plan for fiscal 2022 was driven by the actual return on assets which was $ 37 million less than the Company’s estimated return.

TJX determined the assumed discount rate using the BOND:

5 unchanged sentences

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

2021 January 29,

2022 January 30,

Discount rate 3.40 % 3.20 % 3.30 % 2.80 %

6 unchanged sentences

The Company anticipates making contributions of $ 4 million to provide current benefits coming due under the unfunded plan in fiscal 2023.

The following are the components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) related to our pension plans:

The following are the components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) related to the Company’s pension plans:

Fiscal Year Ended Unfunded Plan

1 unchanged sentence

In thousands January 29,

2021 February 1,

2020 February 2,

2022 January 30,

2021 February 1,

2020 January 29,

2022 January 30,

2021 February 1,

5 unchanged sentences

Amortization of net actuarial loss 14,101 22,351 19,055 4,513 4,616 3,124

Settlement charge — — 36,122 — — —

Total expense $ 19,689 $ 34,064 $ 42,148 $ 10,038 $ 10,329 $ 8,923

Other changes in plan assets and benefit obligations recognized in other comprehensive income:

Net (gain) loss ( 48,838 ) $ 71,590 $ 68,770 $ 8,229 $ 4,682 $ 5,955

Net loss (gain) $ 65,930 $ ( 48,838 ) $ 71,590 $ 233 $ 8,229 $ 4,682

Amortization of net (loss) ( 14,101 ) ( 22,351 ) ( 19,055 ) ( 4,513 ) ( 4,616 ) ( 3,124 )

Settlement charge — — ( 36,122 ) — — —

Amortization of prior service cost ( 377 ) ( 377 ) ( 377 ) — — —

3 unchanged sentences

Discount rate 3.20 % 3.30 % 4.30 % 2.80 % 3.10 % 4.10 %

3.10 % 4.10 % 3.80 %

Expected rate of return on plan assets 5.75 % 6.00 % 6.00 %/ 6.00 %

Expected rate of return on plan assets 5.75 % 5.75 % 6.00 % N/A N/A N/A

Rate of compensation increase (a)

4.00 % 4.00 % 4.00 % 4.00 % 4.00 % 6.00 %

(a) For fiscal 2020 and fiscal 2019, the rate of compensation increase for participants eligible for the primary benefit under the unfunded plan is 6.00 %.

(a) For fiscal 2020, the rate of compensation increase for participants eligible for the primary benefit under the unfunded plan is 6.00 %.

The assumed rate of compensation increase for participants eligible for the alternative benefit under the unfunded plan is 4.00 %.

During the third quarter of fiscal 2019, TJX annuitized and transferred current pension obligations for certain U.S.

retirees and beneficiaries under the funded plan through the purchase of a group annuity contract with an insurance company.

TJX transferred $ 207 million of pension plan assets to the insurance company, thereby reducing its pension benefit obligations.

The transaction had no cash impact on TJX but did result in a non-cash pre-tax pension settlement charge of $ 36 million, which is reported separately on the Consolidated Statements of Income.

As a result of the annuity purchase the Company re-measured the funded status of its pension plan as of September 30, 2018.

The assumptions for pension expense presented above include a discount rate of 4.00 % through the measurement date and 4.40 % thereafter.

The expected rate of return on plan assets is 6.00 % through the measurement date and 6.00 % thereafter.

The discount rate for determining the obligation at the measurement date is 4.40 %.

TJX develops its long-term rate of return assumption by evaluating input from professional advisors taking into account the asset allocation of the portfolio and long-term asset class return expectations, as well as long-term inflation assumptions.

10 unchanged sentences

2028 through 2032 408,023 41,209

The following tables present the fair value hierarchy (See Note G—Fair Value Measurements) for pension assets measured at fair value on a recurring basis as of January 30, 2021 and February 1, 2020:

The following tables present the fair value hierarchy (See Note F—Fair Value Measurements) for pension assets measured at fair value on a recurring basis as of January 29, 2022 and January 30, 2021:

Funded Plan at January 29, 2022

9 unchanged sentences

Fair value of assets $ 186,873 $ 1,024,418 $ 1,713,675

Funded Plan at February 1, 2020

Funded Plan at January 30, 2021

In thousands Level 1 Level 2 Total

20 unchanged sentences

Cash equivalents or short-term investments are stated at cost which approximates fair value, and the fair value of common/collective trusts is determined based on net asset value as reported by their fund managers.

The following is a summary of TJX’s target allocation guidelines for qualified pension plan assets as of January 30, 2021 along with the actual allocation of qualified pension plan assets as of the valuation date for the fiscal years presented:

Target Allocation January 30,

2021 February 1,

Following is the asset allocation under the qualified pension plan as of the valuation date for the fiscal years presented:

2022 January 30,

Return-seeking assets 45 % 48 %

1 unchanged sentence

All other – primarily cash — % 1 %

Under TJX’s investment policy, plan assets are to be invested with the objective of generating investment returns that, in combination with funding contributions, provide adequate assets to meet all current and reasonably anticipated future benefit obligations under the plan.

The investment policy includes a dynamic asset allocation strategy, whereby, over time, in connection with any improvements in the plan’s funded status, the target allocation of return-seeking assets (generally, equities and other instruments with similar risk profile) may decline and the target allocation of liability-hedging assets (generally, fixed income and other instruments with a similar risk profile) may increase.

Under TJX’s investment policy, qualified pension plan assets are to be invested with the objective of generating investment returns that, in combination with funding contributions, provide adequate assets to meet all current and reasonably anticipated future benefit obligations under the plan.

The investment policy includes a dynamic asset allocation strategy, whereby, over time, in connection with improvements in the plan’s funded status, the target allocation of return-seeking assets (generally, equities and other instruments with similar risk profile) may decline and the target allocation of liability-hedging assets (generally, fixed income and other instruments with a similar risk profile) may increase.

Under the investment policy guidelines, the target asset allocation of return-seeking assets and liability-hedging assets was 44 % and 56 %, respectively, as of January 29, 2022.

Risks are sought to be mitigated through asset diversification and the use of multiple investment managers.

7 unchanged sentences

Eligible employees are automatically enrolled in the U.S.

plan at a 2 % deferral rate, unless the employee elects otherwise.

Plan and, effective February 1, 2022, the Puerto Rico savings plan at a 2 % deferral rate, unless the employee elects otherwise.

The total cost of TJX contributions to these plans was $ 83 million in fiscal 2022, $ 61 million in fiscal 2021 and $ 59 million in fiscal 2020.

9 unchanged sentences

TJX was listed in the Form 5500 for the Legacy Plan of the National Retirement Fund and the Adjustable Plan of the National Retirement Fund as providing more than 5 % of the total contributions for the plan year ending December 31, 2020.

In addition, based on information available to TJX, the Pension Protection Act Zone Status for each of the Legacy Plan of the National Retirement Fund and the Legacy Plan of the UNITE HERE Retirement Fund is Critical and rehabilitation plans have been implemented.

In addition, based on information available to TJX, the Pension Protection Act Zone status for the Legacy Plan of the National Retirement Fund is critical and for the Legacy Plan of the UNITE HERE Retirement Fund is critical and declining, and rehabilitation plans have been adopted by these plans.

The risks of participating in multiemployer pension plans are different from the risks of single-employer pension plans in certain respects, including the following:

1 unchanged sentence

(b) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers;

(c) if we cease to have an obligation to contribute to a multiemployer plan in which we had been a contributing employer, or in certain other circumstances, we may be required to pay to the plan an amount based on our allocable share of the underfunded status of the plan, referred to as a withdrawal liability.

(c) if TJX ceases to have an obligation to contribute to a multiemployer plan in which the Company had been a contributing employer, or in certain other circumstances, the Company may be required to pay to the plan an amount based on the Company’s allocable share of the underfunded status of the plan, referred to as a withdrawal liability.

Long-Term Debt and Credit Lines

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

The table below presents long-term debt, exclusive of current installments, as of January 29, 2022 and January 30, 2021.

All amounts are net of unamortized debt discounts.

In thousands January 29,

2021 February 1,

2022 January 30,

General corporate debt:

2.750 % senior unsecured notes, maturing June 15, 2021 (effective interest rate of 2.76 % after reduction of unamortized debt discount of $ 25 and $ 100 in fiscal 2021 and 2020, respectively)

2.750 % senior unsecured notes, redeemed on April 15, 2021 (effective interest rate of 2.76 % after reduction of unamortized debt discount of $ 25 in fiscal 2021)

$ — $ 749,975

1 unchanged sentence

499,944 499,900

3.500 % senior unsecured notes, maturing April 15, 2025 (effective interest rate of 3.58 % after reduction of unamortized debt discount of $ 4,208 in fiscal 2021)

3.500 % senior unsecured notes, redeemed on June 4, 2021 (effective interest rate of 3.58 % after reduction of unamortized debt discount of $ 4,208 in fiscal 2021)

2.250 % senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32 % after reduction of unamortized debt discount of $ 3,419 and $ 4,165 in fiscal 2022 and 2021, respectively)

996,581 995,835

3.750 % senior unsecured notes, maturing April 15, 2027 (effective interest rate of 3.76 % after reduction of unamortized debt discount of $ 456 in fiscal 2021)

1.150 % senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18 % after reduction of unamortized debt discount of $ 939 in fiscal 2021)

3.875 % senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89 % after reduction of unamortized debt discount of $ 568 in fiscal 2021)

1.600 % senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61 % after reduction of unamortized debt discount of $ 610 in fiscal 2021)

4.500 % senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52 % after reduction of unamortized debt discount of $ 2,208 in fiscal 2021)

3.750 % senior unsecured notes, redeemed on June 4, 2021 (effective interest rate of 3.76 % after reduction of unamortized debt discount of $ 456 in fiscal 2021)

1.150 % senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18 % after reduction of unamortized debt discount of $ 811 and $ 939 in fiscal 2022 and 2021, respectively)

499,189 499,061

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 $ 506 and $ 568 in fiscal 2022 and 2021, respectively)

495,344 495,282

1.600 % senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61 % after reduction of unamortized debt discount of $ 551 and $ 610 in fiscal 2022 and 2021, respectively)

499,449 499,390

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 $ 2,132 and $ 2,208 in fiscal 2022 and 2021, respectively)

383,367 383,291

Total debt 3,373,874 6,118,070

Current maturities of long-term debt, net of debt issuance costs — ( 749,684 )

Debt issuance cost ( 35,465 ) ( 8,219 )

Debt issuance costs ( 19,033 ) ( 35,465 )

Long-term debt $ 3,354,841 $ 5,332,921

3 unchanged sentences

Later years 1,881,349

amount representing unamortized debt discount ( 13,279 )

amount representing debt issuance cost ( 35,465 )

current maturities of long-term debt ( 749,684 )

Unamortized debt discount ( 7,475 )

Debt issuance costs ( 19,033 )

Aggregate maturities of long-term debt $ 3,354,841

In April 2020, given the rapidly changing environment and level of uncertainty created by the COVID-19 pandemic and the associated impact on future earnings, TJX 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.

Interest on these notes are payable semi-annually.

In December 2020, TJX accepted $ 1.12 billion in aggregate principal amount of certain of its notes issued in April 2020 pursuant to cash tender offers as foll ows:

$ 365 million of the 2050 Notes and $ 754 million of the 2030 Notes.

TJX paid $ 1.42 billion aggregate consideration in connection with the tender offers (including transaction costs) and recorded a $ 0.3 billion pre-tax loss on the early extinguishment for the accepted notes.

Senior Unsecured Notes

On June 4, 2021, the Company completed 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, which 3.500 % Notes and 3.750 % Notes were originally issued and sold on April 1, 2020.

The Notes redeemed via make-whole calls were issued in the first quarter of fiscal 2021 in response to the COVID-19 pandemic.

As a result of these redemptions prior to their scheduled maturities, the Company recorded a pre-tax debt extinguishment charge of $ 242 million in the second quarter of fiscal 2022.

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.

On April 1, 2020, in response to the COVID-19 pandemic, the Company issued and sold $ 1.25 billion aggregate principal amount of 3.875 % Notes due 2030 and $ 750 million aggregate principal amount of 4.500 % Notes due 2050, portions of which were subsequently repurchased pursuant to cash tender offers completed by the Company in December 2020, reducing the aggregate principal amount outstanding to $ 495.5 million and $ 385.0 million, respectively.

Interest on these notes is 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.

Cash proceeds, net of discounts and other issuance costs, were $ 990 million.

Interest on the 2028 and 2031 Notes is payable semi-annually beginning May 2021.

TJX used the net proceeds from the offering of the 2028 and 2031 Notes to partially fund the purchase of the accepted notes from its December 2020 tender offers.

At January 30, 2021, TJX had outstanding $ 1 billion aggregate principal amount of 2.250 % ten-year notes due September 2026 and $ 500 million aggregate principal amount of 2.500 % ten-year notes due May 2023.

Interest on these notes is payable semi-annually.

As of January 29, 2022, TJX had outstanding $ 1 billion aggregate principal amount of 2.250 % ten-year Notes due September 2026 and $ 500 million aggregate principal amount of 2.500 % ten-year Notes due May 2023.

TJX entered into a rate-lock agreement to hedge $ 700 million of the 2.250 % notes and $ 250 million of the 2.500 % notes prior to their issuance.

The cost of these agreements are being amortized to interest expense over the term of the notes resulting in an effective fixed rate of 2.36 % for the 2.25 % notes and 2.57 % for the 2.50 % notes.

At January 30, 2021, TJX also had outstanding $ 750 million aggregate principal amount of 2.750 % seven-year notes due June 2021.

TJX also entered into rate-lock agreements to hedge the underlying treasury rate of all of the 2.750 % notes prior to their issuance.

The agreements were accounted for as cash flow hedges and the pre-tax realized loss of $ 8 million was recorded as a component of other comprehensive income and is being amortized to interest expense over the term of the notes, resulting in an effective fixed interest rate of 2.91 %.

At January 30, 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, TJX has borrowing capacity of $ 1.5 billion, all of which remains available to the Company.

I n July 2020, TJX paid off the $ 1 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 TJX’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 January 30, 2021 and February 1, 2020, 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 TJX 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 for the four fiscal quarter period then ended (a “Test Period”), with an incremental 0.5 0 stepdown each Test Period thereafter, until the fourth quarter of fiscal 2022 when the new covenant of 3.50 to 1.00 permanently applies.

In addition, TJX is required to maintain a minimum liquidity of at least $ 1.5 billion through the period ending April 30, 2021, and a minimum EBITDAR of $ 650 million for the fiscal quarter ending January 30, 2021.

The cost of these agreements is being amortized to interest expense over the term of the notes resulting in an effective fixed rate of 2.36 % for the 2.25 % notes and 2.57 % for the 2.50 % notes.

Credit Facilities

On June 25, 2021, the Company entered into a revolving credit agreement providing for a $ 1 billion senior unsecured revolving credit facility maturing on June 25, 2026 (the “2026 Revolving Credit Facility”).

The 2026 Revolving Credit Facility replaced the Company's $ 500 million revolving credit facility that was scheduled to mature in March 2022 (the “2022 Revolving Credit Facility”), and the $ 500 million 364 revolving credit facility that was scheduled to mature in August 2021 (the “364-Day Revolving Credit Facility”).

Each of the 2022 Revolving Credit Facility and the 364-Day Revolving Credit Facility were terminated on June 25, 2021.

With the 2026 Revolving Credit Facility and the Company’s existing $ 500 million revolving credit facility that matures in May 2024 (the “2024 Revolving Credit Facility”), the Company maintained borrowing capacity of $ 1.5 billion.

The 2024 Revolving Credit Facility requires usage fees based on total credit extensions under the facility.

As of January 29, 2022 and January 30, 2021, there were no amounts outstanding under these facilities.

Each of these facilities require TJX to maintain a ratio of funded debt to earnings before interest, taxes, depreciation and amortization and rentals (EBITDAR) of not more than 3.50 to 1.00 on a rolling four-quarter basis.

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

As of January 30, 2021 and February 1, 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 January 30, 2021 and February 1, 2020, and during the years then ended, there were no amounts outstanding on the Canadian credit line for operating expenses.

As of January 30, 2021 and February 1, 2020, and during the years then ended, our European business at TJX International had an uncommitted credit line of £ 5 million.

As of January 30, 2021 and February 1, 2020, there were no amounts outstanding on the European credit line.

As of January 29, 2022 and January 30, 2021, TJX Canada had two uncommitted credit lines, a C$ 10 million facility for operating expenses and a C$ 10 million letter of credit facility.

As of January 29, 2022 and January 30, 2021, and during the years then ended, there were no amounts outstanding on the Canadian credit line for operating expenses.

As of January 29, 2022 and January 30, 2021, and during the years then ended, the Company’s European business at TJX International had an uncommitted credit line of £ 5 million.

As of January 29, 2022 and January 30, 2021, there were no amounts outstanding on the European credit line.

For financial reporting purposes, components of income before income taxes are as follows:

1 unchanged sentence

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

2 unchanged sentences

Income before income taxes $ 4,397,608 $ 89,263 $ 4,406,183

The (benefit) provision for income taxes includes the following:

The provision (benefit) for income taxes includes the following:

Fiscal Year Ended

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

5 unchanged sentences

Foreign 14,073 ( 109,181 ) ( 7,615 )

(Benefit) provision for income taxes $ ( 1,207 ) $ 1,133,990 $ 1,113,413

Provision (benefit) provision for income taxes $ 1,114,793 $ ( 1,207 ) $ 1,133,990

TJX had net deferred tax assets (liabilities) as follows:

1 unchanged sentence

In thousands January 29,

2021 February 1,

2022 January 30,

Deferred tax assets:

7 unchanged sentences

Valuation allowance ( 85,497 ) ( 76,682 )

Net deferred tax asset $ 3,031,596 $ 2,813,801

Total deferred tax asset $ 3,070,636 $ 3,031,596

Deferred tax liabilities:

6 unchanged sentences

Total deferred tax liabilities $ 2,929,840 $ 2,941,569

Net deferred tax asset (liability) $ 90,027 $ ( 130,038 )

Net deferred tax asset $ 140,796 $ 90,027

Non-current asset $ 184,971 $ 127,191

4 unchanged sentences

The net amount of unrecognized state and foreign withholding tax liabilities related to the undistributed earnings is not material.

As of January 30, 2021 and February 1, 2020, for state income tax purposes, TJX had net operating loss carryforwards of $ 224 million and $ 190 million respectively, which expire, if unused, in the years 2022 through 2041 .

As of January 29, 2022 and January 30, 2021, for state income tax purposes, TJX had net operating loss carryforwards of $ 291 million and $ 224 million respectively, which expire, if unused, in the years 2023 through 2042.

TJX has analyzed the realization of the state net operating loss carryforwards on an individual state basis.

For those states where the Company has determined that it is more likely than not that the state net operating loss carryforwards will not be realized, a valuation allowance of $ 14 million has been provided for the deferred tax asset as of January 30, 2021 and $ 13 million as of February 1, 2020.

The Company had available for foreign income tax purposes net operating loss carryforwards of $ 626 million (related to Australia, Austria, Germany, the Netherlands, Poland and the U.K.) as of January 30, 2021, and $ 156 million (related to Australia, Austria and the Netherlands) as of February 1, 2020.

Of the net operating loss carryforwards as of January 30, 2021, $ 48 million will expire, if unused, in fiscal years 2025 through 2028 .

The Company had available for foreign income tax purposes (related to Australia, Austria, Germany, the Netherlands, Poland and the U.K.) net operating loss carryforwards of $ 534 million as of January 29, 2022, and $ 626 million as of January 30, 2021.

Of the net operating loss carryforwards as of January 29, 2022, $ 5 million will expire, if unused, in fiscal year 2026.

The remaining loss carryforwards do not expire.

For the deferred tax assets associated with the net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax assets will not be realized, TJX had valuation allowances recorded of approximately $ 62 million as of January 30, 2021, and approximately $ 47 million as of February 1, 2020.

For the deferred tax assets associated with the net operating loss carryforwards for which management has determined it is more likely than not that the deferred tax assets will not be realized, TJX had valuation allowances recorded of approximately $ 71 million as of January 29, 2022, and approximately $ 62 million as of January 30, 2021.

The difference between the U.S.

1 unchanged sentence

Fiscal Year Ended

2021 February 1,

2022 January 30,

2021 February 1,

5 unchanged sentences

Nondeductible/nontaxable items 0.2 ( 3.3 ) —

Impact of 2017 Tax Act — — 1.5

All other 0.2 ( 0.3 ) 0.6

Worldwide effective income tax rate 25.4 % ( 1.4 ) % 25.7 %

TJX’s effective income tax rate decreased for fiscal 2021 as compared to fiscal 2020.

The decrease in the fiscal 2021 effective income tax rate is primarily driven by the negative impact of the COVID-19 pandemic to the Company’s results and the change in the jurisdictional mix of income and losses.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law, which provides emergency economic assistance for American workers, families and businesses affected by the COVID-19 pandemic.

The CARES Act does not have a significant impact on our fiscal 2021 tax expense.

The 2017 Tax Act made broad and complex changes to the U.S.

tax code which had a significant impact on our fiscal 2018 and fiscal 2019 tax expense, including reducing the U.S.

federal corporate tax rate from 35% to 21%, expanded rules regarding expensing of fixed assets, and required one-time transition tax on certain undistributed earnings of foreign subsidiaries.

Other provisions that became effective in Fiscal 2019 impacting income taxes include:

an exemption from U.S.

tax on dividends of future foreign earnings, expanded limitations on executive compensation, a minimum tax on certain foreign earnings in excess of 10 % of the foreign subsidiaries tangible assets (i.e.

global intangible low-taxed income or “GILTI”), and allows a benefit for foreign derived intangible income (“FDII”).

In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin No.

118, which allows a measurement period, not to exceed one year, to finalize the accounting for the income tax impacts of the 2017 Tax Act.

The Company completed our analysis in the fourth quarter of fiscal 2019 and determined there was no material adjustment to the income tax expense.

The Company has recorded current tax on GILTI relative to fiscal 2020 operations and will continue to account for GILTI as a period cost when incurred.

TJX had net unrecognized tax benefits of $ 272 million as of January 30, 2021, $ 255 million as of February 1, 2020 and $ 233 million as of February 2, 2019.

TJX’s effective income tax rate increased for fiscal 2022 as compared to fiscal 2021.

The increase in the fiscal 2022 effective income tax rate is primarily due to the significant increase in profit in fiscal 2022 as compared to the mix of income and losses by jurisdictions in fiscal 2021.

TJX had net unrecognized tax benefits of $ 288 million as of January 29, 2022, $ 272 million as of January 30, 2021 and $ 255 million as of February 1, 2020.

A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:

1 unchanged sentence

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

6 unchanged sentences

Included in the gross amount of unrecognized tax benefits are items that will impact future effective tax rates upon recognition.

These items amounted to $ 250 million as of January 30, 2021, $ 240 million as of February 1, 2020 and $ 222 million as of February 2, 2019.

These items amounted to $ 260 million as of January 29, 2022, $ 250 million as of January 30, 2021 and $ 240 million as of February 1, 2020.

TJX is subject to U.S.

3 unchanged sentences

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

The amount of interest and penalties expensed was $ 8 million for the year ended January 30, 2021, $ 5 million for the year ended February 1, 2020 and $ 12 million for the year ended February 2, 2019.

The accrued amounts for interest and penalties are $ 36 million as of January 30, 2021, $ 28 million as of February 1, 2020 and $ 24 million as of February 2, 2019.

Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law, expirations of statutes of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions, it is reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may change materially from those represented on the financial statements as of January 30, 2021.

During the next twelve months, it is reasonably possible that tax audit resolutions may reduce unrecognized tax benefits by $ 0 to $ 40 million, which would reduce the provision for taxes on earnings.

The amount of interest and penalties expensed was $ 7 million for the year ended January 29, 2022, $ 8 million for the year ended January 30, 2021 and $ 5 million for the year ended February 1, 2020.

The accrued amounts for interest and penalties are $ 43 million as of January 29, 2022, $ 36 million as of January 30, 2021 and $ 28 million as of February 1, 2020.

During the next twelve months, it is reasonably possible that tax audit resolutions may reduce unrecognized tax benefits by up to $ 45 million, which would reduce the provision for taxes on earnings.

TJX is committed under long-term leases related to its continuing operations for the rental of real estate and certain service contracts containing embedded leases, all of which are operating leases.

Real estate leases represent virtually all of our store locations as well as some of our distribution centers and office space.

Real estate leases represent virtually all of the Company’s store locations as well as some of its distribution centers and office space.

Most of TJX’s leases in the U.S.

2 unchanged sentences

Many of the Company's leases have options to terminate prior to the lease expiration date.

The exercise of both lease renewal and termination options is at our sole discretion and is not reasonably certain at lease commencement.

The exercise of both lease renewal and termination options is at the Company’s sole discretion and is not reasonably certain at lease commencement.

The Company has deemed that the expense of store renovations makes the renewal of the next lease option reasonably certain to be exercised after these renovations occur.

8 unchanged sentences

Fiscal Year Ended

2021 February 1,

2022 January 30,

Weighted-average remaining lease term 6.6 years 6.8 years

3 unchanged sentences

In thousands Classification January 29,

2022 January 30,

2021 February 1,

5 unchanged sentences

In thousands January 29,

2022 January 30,

2021 February 1,

2 unchanged sentences

Lease liabilities arising from obtaining right of use assets $ 1,658,240 $ 1,380,402 $ 1,786,212

During fiscal 2021, the Company 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.

During fiscal 2022, the Company repaid the rent deferrals that had been negotiated due to the COVID-19 pandemic in fiscal 2021 for a significant number of its stores.

The following table summarizes the maturity of lease liabilities under operating leases as of January 29, 2022:

9 unchanged sentences

Total lease liabilities (c)

(a) Operating lease payments exclude legally binding minimum lease payments for leases signed but not yet commenced and include options to extend lease terms that are now deemed reasonably certain of being exercised according to our Lease Accounting Policy.

(b) Calculated using the incremental borrowing rate for each lease.

4 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

Employee compensation and benefits, current

1 unchanged sentence

Merchandise credits and gift certificates 685,202 576,187

Dividends payable 315,604 281,703

Occupancy costs, including rent, utilities and real estate taxes

399,015 314,850

Dividends payable 311,808 315,604

Sales tax collections and V.A.T.

4 unchanged sentences

Total accrued expenses and other current liabilities $ 4,244,997 $ 3,471,459

All other current liabilities include accruals for insurance, expense payables, customer rewards liability, reserve for sales returns, reserve for taxes, interest, advertising, fair value of derivatives and other items, each of which is individually less than 5 % of current liabilities.

All other current liabilities include accruals for expense payables, insurance, customer rewards liability, reserve for sales returns, reserve for taxes, advertising, interest, fair value of derivatives and other items, each of which is individually less than 5 % of current liabilities.

The major components of other long-term liabilities are as follows:

1 unchanged sentence

In thousands January 29,

2021 February 1,

2022 January 30,

Employee compensation and benefits, long-term $ 647,214 $ 679,661

4 unchanged sentences

Contingent Obligations, Contingencies, and Commitments

Contingent Obligations

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.

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 January 30, 2021 to be approximately $ 11 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 ability to potentially further sublet.

Contingent Contractual Obligations

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.

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, 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.

The lawsuits are in various procedural stages and seek monetary damages, injunctive relief and attorneys’ fees.

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

These obligations are sometimes limited in time or amount.

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

Legal Contingencies

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

TJX has accrued immaterial amounts in the accompanying Consolidated Financial Statements for certain of its legal proceedings.

Letters of Credit

TJX had outstanding letters of credit totaling $ 28 million as of January 30, 2021 and $ 30 million as of February 1, 2020.

TJX had outstanding letters of credit totaling $ 53 million as of January 29, 2022 and $ 28 million as of January 30, 2021.

Letters of credit are issued by TJX primarily for the purchase of inventory.

3 unchanged sentences

In thousands January 29,

2021 February 1,

2022 January 30,

2021 February 1,

7 unchanged sentences

Property additions 96,585 ( 36,251 ) 6,189

Build-to-suit construction in progress (c)

— — ( 40,911 )

Build-to-suit lease obligation (c)

(a) Increased interest is due to the issuance of additional debt due to the COVID-19 pandemic.

(b) Decreased income taxes is primarily due to lower profits due to the COVID-19 pandemic and the change in the jurisdictional mix of profits and losses.

(c) The assets and liabilities related to non-TJX owned properties that had previously existed under build-to-suit accounting have been de-recognized in fiscal 2020 upon adoption of the new lease accounting standard.

Selected Quarterly Financial Data (Unaudited)

Presented below is selected quarterly consolidated financial data for fiscal 2021 and fiscal 2020 which was prepared on the same basis as the audited consolidated financial statements and includes all adjustments necessary to state fairly, in all material respects, the information set forth therein on a consistent basis.

Amounts in thousands except per share amounts First

Fiscal Year Ended January 30, 2021

Net sales $ 4,408,888 $ 6,667,575 $ 10,117,289 $ 10,943,210

Gross earnings (b)

( 5,577 ) 1,493,085 3,055,004 3,060,635

Net income (c)

( 887,489 ) ( 214,220 ) 866,656 325,523

Basic earnings per share (d)

( 0.74 ) ( 0.18 ) 0.72 0.27

Diluted earnings per share (d)

( 0.74 ) ( 0.18 ) 0.71 0.27

Fiscal Year Ended February 1, 2020

Net sales $ 9,277,585 $ 9,781,596 $ 10,451,334 $ 12,206,462

Gross earnings (b)

2,639,700 2,755,539 3,011,301 3,464,657

Net income 700,178 758,962 828,263 984,790

Basic earnings per share

0.58 0.63 0.69 0.82

Diluted earnings per share

0.57 0.62 0.68 0.81

(a) Fiscal 2021 quarters reflect the impact of the COVID-19 pandemic.

(b) Gross earnings equal net sales less cost of sales, including buying and occupancy costs.

(d) As a result of the net loss for the first and second quarters of fiscal 2021, basic and diluted earnings per share were the same.

(a) Decreased interest for fiscal 2022 was due to the refinancing of certain notes in fiscal 2021 as well as the pay down of outstanding debt during fiscal 2022.

(b) Increased income taxes for fiscal 2022 was primarily due to increase in profits in fiscal 2022 as compared to the mix of income and losses by jurisdictions in fiscal 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures