Item 16. Form 10-K Summary

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

												THE TJX COMPANIES, INC.
																		/s/ SCOTT GOLDENBERG
Dated:			March 31, 2021															Scott Goldenberg, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

/s/ ERNIE HERRMAN						/s/ SCOTT GOLDENBERG
Ernie Herrman, Chief Executive Officer, President and Director (Principal Executive Officer)						Scott Goldenberg, Chief Financial Officer (Principal Financial and Accounting Officer)
ZEIN ABDALLA*						MICHAEL F. HINES*
Zein Abdalla, Director						Michael F. Hines, Director
JOSÉ B. ALVAREZ*						AMY B. LANE*
José B. Alvarez, Director						Amy B. Lane, Director
ALAN M. BENNETT*						CAROL MEYROWITZ*
Alan M. Bennett, Director						Carol Meyrowitz, Executive Chairman of the Board of Directors
ROSEMARY T. BERKERY*						JACKWYN L. NEMEROV*
Rosemary T. Berkery, Director						Jackwyn L. Nemerov, Director
DAVID T. CHING*						JOHN F. O’BRIEN*
David T. Ching, Director						John F. O’Brien, Director
C. KIM GOODWIN*						WILLOW B. SHIRE*
C. Kim Goodwin, Director						Willow B. Shire, Director

						*BY			/s/ SCOTT GOLDENBERG
Dated:			March 31, 2021						Scott Goldenberg, as attorney-in-fact

The TJX Companies, Inc.

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			F-2
Consolidated Financial Statements:
Consolidated Statements of Income			F-4
Consolidated Statements of Comprehensive Income			F-5
Consolidated Balance Sheets			F-6
Consolidated Statements of Cash Flows			F-7
Consolidated Statements of Shareholders’ Equity			F-8
Notes to Consolidated Financial Statements			F-9
Financial Statement Schedules:
Schedule II – Valuation and Qualifying Accounts			43

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of The TJX Companies, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

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”). We also have audited the Company's internal control over financial reporting as of January 30, 2021, 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. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note A to the consolidated financial statements, the Company changed the manner in which it accounts for leases as of February 3, 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

F-2

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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.

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.

/s/PricewaterhouseCoopers LLP

Boston, Massachusetts

March 31, 2021

We have served as the Company’s auditor since 1962.

F-3

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

			Fiscal Year Ended
			January 30, 2021			February 1, 2020			February 2, 2019
Net sales			$	32,136,962		$	41,716,977		$	38,972,934
Cost of sales, including buying and occupancy costs			24,533,815			29,845,780			27,831,177
Selling, general and administrative expenses			7,020,917			7,454,988			6,923,564
Loss on early extinguishment of debt			312,233			—			—
Interest expense, net			180,734			10,026			8,860
Pension settlement charge			—			—			36,122
Income before income taxes			89,263			4,406,183			4,173,211
Benefit (provision) for income taxes			1,207			(1,133,990)			(1,113,413)
Net income			$	90,470		$	3,272,193		$	3,059,798
Basic earnings per share			$	0.08		$	2.71		$	2.47
Weighted average common shares – basic			1,199,927			1,208,163			1,241,153
Diluted earnings per share			$	0.07		$	2.67		$	2.43
Weighted average common shares – diluted			1,214,703			1,226,519			1,259,252

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

F-4

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

IN THOUSANDS

			Fiscal Year Ended
			January 30, 2021			February 1, 2020			February 2, 2019
Net income			$	90,470		$	3,272,193		$	3,059,798
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			15,588			(3,943)			(192,664)
Gain on net investment hedges, net of related tax provision of $7,113 in fiscal 2019			—			—			19,538
Recognition of net gains/losses on benefit obligations, net of related tax provision of $9,974 in fiscal 2021 and tax benefits of $20,489 and $19,813 in fiscal 2020 and 2019, respectively			30,635			(56,275)			(54,420)
Reclassifications from other comprehensive loss to net income:
Pension settlement charge, net of related tax provision of $9,641 in fiscal 2019			—			—			26,481
Amortization of loss on cash flow hedge, net of related tax provisions of $303, $303, and $304 in fiscal 2021, 2020 and 2019, respectively			831			831			847
Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $7,298, $6,019, and $4,280, in fiscal 2021, 2020 and 2019, respectively			20,046			16,537			11,756
Other comprehensive income (loss), net of tax			67,100			(42,850)			(188,462)
Total comprehensive income			$	157,570		$	3,229,343		$	2,871,336

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

F-5

THE TJX COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

			Fiscal Year Ended
			January 30, 2021			February 1, 2020
ASSETS
Current assets:
Cash and cash equivalents			$	10,469,570		$	3,216,752
Accounts receivable, net			461,139			386,261
Merchandise inventories			4,337,389			4,872,592
Prepaid expenses and other current assets			434,977			368,048
Federal, state and foreign income taxes recoverable			36,262			46,969
Total current assets			15,739,337			8,890,622
Net property at cost			5,036,096			5,325,048
Non-current deferred income taxes, net			127,191			12,132
Operating lease right of use assets			8,989,998			9,060,332
Goodwill			98,998			95,546
Other assets			821,935			761,323
TOTAL ASSETS			$	30,813,555		$	24,145,003
LIABILITIES
Current liabilities:
Accounts payable			$	4,823,397		$	2,672,557
Accrued expenses and other current liabilities			3,471,459			3,041,774
Current portion of operating lease liabilities			1,677,605			1,411,216
Current portion of long-term debt			749,684			—
Federal, state and foreign income taxes payable			81,523			24,700
Total current liabilities			10,803,668			7,150,247
Other long-term liabilities			1,063,902			851,116
Non-current deferred income taxes, net			37,164			142,170
Long-term operating lease liabilities			7,743,216			7,816,633
Long-term debt			5,332,921			2,236,625
Commitments and contingencies (See Note O)
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			1,204,698			1,199,100
Additional paid-in capital			260,515			—
Accumulated other comprehensive (loss) income			(606,071)			(673,171)
Retained earnings			4,973,542			5,422,283
Total shareholders’ equity			5,832,684			5,948,212
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	30,813,555		$	24,145,003

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

F-6

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

IN THOUSANDS

			Fiscal Year Ended
			January 30, 2021			February 1, 2020			February 2, 2019
Cash flows from operating activities:
Net income			$	90,470		$	3,272,193		$	3,059,798
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			870,758			867,303			819,655
Loss on early extinguishment of debt			312,233			—			—
Loss on property disposals and impairment charges			83,794			16,054			17,653
Deferred income tax (benefit)			(230,690)			(6,233)			(88,594)
Share-based compensation			58,519			124,957			103,557
Pension settlement charge			—			—			36,122
Changes in assets and liabilities:
(Increase) in accounts receivable			(71,091)			(42,998)			(23,532)
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 in accrued expenses and other liabilities			584,502			345,745			169,418
Increase (decrease) in income taxes payable			52,791			(128,342)			40,965
Increase in net operating lease liabilities			200,243			29,617			—
Other, net			(42,842)			(93,292)			(15,708)
Net cash provided by operating activities			4,561,889			4,066,540			4,088,459
Cash flows from investing activities:
Property additions			(568,021)			(1,223,116)			(1,125,139)
Investment in Familia			—			(230,156)			—
Purchases of investments			(29,100)			(28,838)			(161,625)
Sales and maturities of investments			18,524			12,720			636,560
Other			—			7,419			26,652
Net cash (used in) investing activities			(578,597)			(1,461,971)			(623,552)
Cash flows from financing activities:
Payments on revolving credit facilities			(1,000,000)			—			—
Proceeds from long-term debt including revolving credit facilities			5,986,873			—			—
Payments of long-term debt and extinguishment expenses			(1,418,358)			—			—
Payments for debt issuance expenses			(42,377)			—			—
Payments for repurchase of common stock			(201,500)			(1,551,992)			(2,406,997)
Proceeds from issuance of common stock			211,189			232,106			255,241
Payments of employee tax withholdings for performance based stock awards			(29,309)			(23,423)			(16,014)
Cash dividends paid			(278,256)			(1,071,562)			(922,596)
Other			—			—			(7,115)
Net cash provided by (used in) financing activities			3,228,262			(2,414,871)			(3,097,481)
Effect of exchange rate changes on cash			41,264			(3,175)			(95,674)
Net increase in cash and cash equivalents			7,252,818			186,523			271,752
Cash and cash equivalents at beginning of year			3,216,752			3,030,229			2,758,477
Cash and cash equivalents at end of year			$	10,469,570		$	3,216,752		$	3,030,229

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

F-7

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

IN THOUSANDS

			Common Stock						Additional Paid-In Capital			Accumulated Other Comprehensive(Loss) Income			Retained Earnings			Total
			Shares			Par Value $1
Balance, February 3, 2018			1,256,018			$	1,256,018		$	—		$	(441,859)		$	4,334,150		$	5,148,309
Net income			—			—			—			—			3,059,798			3,059,798
Cumulative effect of accounting change			—			—			—			—			58,712			58,712
Other comprehensive (loss), net of tax			—			—			—			(188,462)			—			(188,462)
Cash dividends declared on common stock			—			—			—			—			(965,539)			(965,539)
Recognition of share-based compensation			—			—			103,557			—			—			103,557
Issuance of common stock under stock incentive plan and related tax effect			11,988			11,988			227,240			—			—			239,228
Common stock repurchased			(50,823)			(50,823)			(330,797)			—			(2,025,377)			(2,406,997)
Balance, February 2, 2019			1,217,183			1,217,183			—			(630,321)			4,461,744			5,048,606
Net income			—			—			—			—			3,272,193			3,272,193
Cumulative effect of accounting change			—			—			—			—			403			403
Other comprehensive (loss), net of tax			—			—			—			(42,850)			—			(42,850)
Cash dividends declared on common stock			—			—			—			—			(1,111,788)			(1,111,788)
Recognition of share-based compensation			—			—			124,957			—			—			124,957
Issuance of common stock under stock incentive plan and related tax effect			10,067			10,067			198,616			—			—			208,683
Common stock repurchased			(28,150)			(28,150)			(323,573)			—			(1,200,269)			(1,551,992)
Balance, February 1, 2020			1,199,100			1,199,100			—			(673,171)			5,422,283			5,948,212
Net income			—			—			—			—			90,470			90,470
Other comprehensive income, net of tax			—			—			—			67,100			—			67,100
Cash dividends declared on common stock			—			—			—			—			(311,970)			(311,970)
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, January 30, 2021			1,204,698			$	1,204,698		$	260,515		$	(606,071)		$	4,973,542		$	5,832,684

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

F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A. Basis of Presentation and Summary of Accounting Policies

Basis of Presentation

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. 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.

Fiscal Year

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.

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. 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.

Summary of Accounting Policies

Revenue Recognition

Net Sales

Net sales consist primarily of merchandise sales, which are recorded net of a reserve for estimated returns, any discounts and sales taxes, for the sales of merchandise both within our stores and online. Net sales also include an immaterial amount of other revenues that represent less than 1% of total revenues, primarily generated from shipping fee revenue on our online sales. In addition, certain customers may receive discounts that are accounted for as consideration reducing the transaction price. Merchandise sales from our stores are recognized at the point of sale when TJX provides the merchandise to the customer. The performance obligation is fulfilled at this point when the customer has obtained control by paying for and leaving with the merchandise. Merchandise sales made online are recognized when the product has been shipped, which is when legal title has passed and when TJX is entitled to payment, and the customer has obtained the ability to direct the use of and obtain substantially all of the remaining benefits from the goods. Shipping and handling activities related to online sales occur after the customer obtains control of the goods. TJX’s policy is to treat shipping costs as part of our fulfillment center costs within our operating expenditures. As a result, shipping fee revenues received is recognized when control of the goods transfer to the customer and is recorded as net sales. Shipping and handling costs incurred by TJX are included in cost of sales, including buying and occupancy costs. TJX disaggregates revenue by operating segment, see Note H—Segment Information.

Deferred Gift Card Revenue

Proceeds from the sale of gift cards as well as the value of store cards issued to customers as a result of a return or exchange are deferred until the customers use the cards to acquire merchandise, as TJX does not fulfill its performance obligation until the gift card has been redeemed. While gift cards have an indefinite life, substantially all are redeemed in the first year of issuance.

F-9

The following table presents deferred gift card revenue activity:

In thousands			January 30, 2021			February 1, 2020
Balance, beginning of year			$	500,844		$	450,302
Deferred revenue			1,159,242			1,690,073
Effect of exchange rates changes on deferred revenue			3,758			258
Revenue recognized			(1,087,657)			(1,639,789)
Balance, end of year			$	576,187		$	500,844

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. Gift cards are combined in one homogeneous pool and are not separately identifiable. As such, the revenue recognized consists of gift cards that were part of the deferred revenue balance at the beginning of the period as well as gift cards that were issued during the period. Based on historical experience, the Company estimates the amount of gift cards and store cards that will not be redeemed (referred to as breakage) and, to the extent allowed by local law, these amounts are amortized into income over the estimated redemption period. Revenue recognized from breakage was $14 million in fiscal 2021, $20 million in fiscal 2020 and $21 million in fiscal 2019.

Sales Return Reserve

The Company's products are generally sold with a right of return and the Company may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company has elected to apply the portfolio practical expedient. 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

Cost of sales, including buying and occupancy costs, includes the cost of merchandise sold including foreign currency gains and losses on merchandise purchases denominated in other currencies; gains and losses on inventory and fuel-related derivative contracts; asset retirement obligation costs; divisional occupancy costs (including real estate taxes, utility and maintenance costs and fixed asset depreciation); the costs of operating distribution centers; payroll, benefits and travel costs directly associated with buying inventory; and systems costs related to the buying and tracking of inventory.

Selling, general and administrative expenses include store payroll and benefit costs; communication costs; credit and check expenses; advertising; administrative and field management payroll, benefits and travel costs; corporate administrative costs and depreciation; gains and losses on non-inventory related foreign currency exchange contracts; and other miscellaneous income and expense items.

Cash and Cash Equivalents

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

As of January 30, 2021, TJX’s cash and cash equivalents held outside the U.S. were $1.2 billion, of which $0.8 billion was held in countries where TJX has the intention to reinvest any undistributed earnings indefinitely.

F-10

Merchandise Inventories

Inventories are stated at the lower of cost or market. TJX uses the retail method for valuing inventories at all of its businesses, except T.K. Maxx in Australia which is immaterial. The businesses that utilize the retail method have some inventory that is initially valued at cost before the retail method is applied as that inventory has not been fully processed for sale (e.g. inventory in transit and unprocessed inventory in our distribution centers). Under the retail method, TJX utilizes a permanent markdown strategy and lowers the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in the stores. TJX records inventory at the time title transfers, which is typically at the time when inventory is shipped. As a result, merchandise inventories on TJX’s Consolidated Balance Sheets include in-transit inventory of $1.2 billion at January 30, 2021 and $0.8 billion at February 1, 2020. Comparable amounts were reflected in Accounts payable at those dates.

Common Stock and Equity

Equity transactions consist primarily of the repurchase by TJX of its common stock under its stock repurchase programs and the recognition of compensation expense and issuance of common stock under TJX’s Stock Incentive Plan. Under TJX’s stock repurchase programs, the Company repurchases its common stock on the open market. The par value of the shares repurchased is charged to common stock with the excess of the purchase price over par first charged against any available additional paid-in capital (“APIC”) and the balance charged to retained earnings. Due to the volume of share repurchases under previous programs, TJX has historically had no remaining balance in APIC. All shares repurchased have been retired.

Shares issued under TJX’s Stock Incentive Plan are issued from authorized but unissued shares, and proceeds received are recorded by increasing common stock for the par value of the shares with the excess over par added to APIC. Income tax benefits upon the expensing of options result in the creation of a deferred tax asset, while income tax benefits due to the exercise of stock options reduce deferred tax assets up to the amount that an asset for the related grant has been created. Any excess tax benefits or deficiencies are included in the provision for income taxes. The par value of performance share units and restricted stock units is added to common stock when shares are delivered following performance measurement date or service period to the extent vesting requirements have been achieved. The fair value of stock awards and units are added to APIC as the awards are amortized into earnings over the related requisite service periods.

Share-Based Compensation

TJX accounts for share-based compensation by estimating the fair value of each award on the date of grant. TJX uses the Black-Scholes option pricing model for options awarded and the market price on the grant date for stock awards. 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.

Interest

TJX’s interest expense is presented net of capitalized interest and interest income. The following is a summary of interest expense, net:

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
Interest expense			$	199,038		$	61,400		$	69,102
Capitalized interest			(5,384)			(2,314)			(4,263)
Interest (income)			(12,920)			(49,060)			(55,979)
Interest expense, net			$	180,734		$	10,026		$	8,860

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

Depreciation and Amortization

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. Buildings are depreciated over 33 years. Leasehold costs and improvements are generally amortized over their useful life or the committed lease term (typically 10 years to 15 years), whichever is shorter. 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. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for internally developed software are capitalized and amortized, generally over 5 years. Upon retirement or sale, the cost of disposed assets and the related accumulated depreciation are eliminated and any gain or loss is included in income. Pre-opening costs, including rent, are expensed as incurred.

F-11

Lease Accounting

The Company adopted ASU No. 2016-02, Leases (Topic 842), as of February 3, 2019, using the modified retrospective method under ASU 2018-11. The Company elected the transition package of three practical expedients, which among other things, allowed it to carry forward the historical lease classification. 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. 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 incremental borrowing rate is calculated based on the US Consumer Discretionary yield curve and adjusted for collateralization and foreign currency impact for TJX International and Canada leases. The operating lease ROU assets also include any acquisition costs offset by lease incentives. The Company’s lease terms include options to extend the lease when it is reasonably certain that the Company will exercise that option. 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.

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. The Company fully impaired the Sierra goodwill, recording an impairment charge of $97 million in fiscal 2018. The Company’s goodwill also includes, the excess of cost over the estimated fair market value of the net assets acquired by TJX in the purchase of Winners in fiscal 1991, included in TJX Canada, as well as the purchase of Trade Secret in fiscal 2016, which was re-branded under the T.K. Maxx name during fiscal 2018 and is included in TJX International. The following is a roll forward of goodwill by segment:

In thousands			Marmaxx			TJX Canada			TJX International			Total
Balance, February 2, 2019			$	70,027		$	1,692		$	25,833		$	97,552
Effect of exchange rate changes on goodwill			—			(17)			(1,989)			(2,006)
Balance, February 1, 2020			$	70,027		$	1,675		$	23,844		$	95,546
Effect of exchange rate changes on goodwill			—			61			3,391			3,452
Balance, January 30, 2021			$	70,027		$	1,736		$	27,235		$	98,998

Goodwill is considered to have an indefinite life and accordingly is not amortized.

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 Marshalls tradename is considered to have an indefinite life and accordingly is not amortized. The Sierra Trading Post tradename is being amortized over 15 years. During the first quarter of fiscal 2021, the Company fully impaired the Trade Secret tradename, recording an impairment charge of $5 million.

F-12

The following is a roll forward of tradenames:

			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
Definite-lived intangible assets:
Sierra Trading Post			$	38,500					$	(20,747)		$	—		$	17,753					$	38,500		$	(18,181)		$	—		$	20,319
Trade Secret			$	12,541					$	(10,247)		$	(2,294)		$	—					$	12,541		$	(5,242)		$	(1,948)		$	5,351
Indefinite-lived intangible asset:
Marshalls			$	107,695					$	—		$	—		$	107,695					$	107,695		$	—		$	—		$	107,695

TJX occasionally acquires or licenses other trademarks to be used in connection with private label merchandise. Such trademarks are included in other assets and are amortized to cost of sales, including buying and occupancy costs, over their useful life, generally from 7 to 10 years.

Goodwill, tradenames and trademarks, and the related accumulated amortization or impairment if any, are included in the respective operating segment to which they relate.

Impairment of Long-Lived Assets, Goodwill and Tradenames

TJX evaluates long-lived assets, including tradenames that are amortized and operating lease right of use assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. This evaluation is performed at the lowest level of identifiable cash flows which are largely independent of other groups of assets, generally at the individual store level for fixed assets and operating lease right of use assets, and at the reporting unit for tradenames that are amortized. If indicators of impairment are identified, an undiscounted cash flow analysis is performed to determine if the carrying value of the asset or asset group is recoverable. If the cash flow is less than the carrying value then an impairment 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. In fiscal 2021, the Company fully impaired the Trade Secret tradename. There were no impairments related to tradenames in fiscal 2020 or 2019.

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. Goodwill is tested for impairment by using a quantitative assessment by comparing the carrying value of the related reporting unit to its fair value. An impairment exists when this analysis, using typical valuation models such as the discounted cash flow method, shows that the fair value of the reporting unit is less than the carrying cost of the reporting unit. The Company may assess qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The assessment of qualitative factors is optional and at the Company’s discretion. Indefinite life tradenames are tested for impairment by comparing their carrying value to their fair value, which is determined by calculating the discounted present value of assumed after-tax royalty payments. In fiscal 2021, fiscal 2020 and fiscal 2019, 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.

Advertising Costs

TJX expenses advertising costs as incurred. Advertising expense was $296 million for fiscal 2021, $452 million for fiscal 2020 and $446 million for fiscal 2019.

Foreign Currency Translation

TJX’s foreign assets and liabilities are translated into U.S. dollars at fiscal year-end exchange rates with resulting translation gains and losses included in shareholders’ equity as a component of Accumulated other comprehensive (loss) income. Activity of the foreign operations that affect the Consolidated Statements of Income and Cash Flows is translated at average exchange rates prevailing during the fiscal year.

F-13

Loss Contingencies

TJX records a reserve for loss contingencies when it is both probable that a loss will be incurred and the amount of the loss is reasonably estimable. TJX evaluates pending litigation and other contingencies at least quarterly and adjusts the reserve for such contingencies for changes in probable and reasonably estimable losses. TJX includes an estimate for related legal costs at the time such costs are both probable and reasonably estimable.

Equity Investment

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

As of fiscal 2021 and fiscal 2020, the carrying value of the Company’s equity investment in Familia was $196 million and $230 million, respectively, which exceeded its share of Familia’s net assets by approximately $186 million and $212 million, respectively. Substantially all of this difference is comprised of goodwill. 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. 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 relationship.

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. If the Company concludes that there is an other-than-temporary impairment of this equity investment, it will adjust the carrying amount of the investment to the current fair value. As of fiscal year ended 2021 and 2020, the Company determined that no impairment of its equity method investment existed.

Future Adoption of New Accounting Standards

From time to time, the Financial Accounting Standards Board (“FASB”) or other standard setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, 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.

F-14

Note B. 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.

F-15

In response to the COVID-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 on its Consolidated Statements of Income, and increased Accounts receivable, net on its Consolidated Balance Sheets by approximately $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 on our Consolidated Balance Sheets by 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 discretionary appreciation bonus for store and distribution center Associates.

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

Note C. Property at Cost

Presented below are the components of property at cost:

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
Land and buildings			$	1,668,381		$	1,505,039
Leasehold costs and improvements			3,568,829			3,481,313
Furniture, fixtures and equipment			6,525,615			6,385,926
Total property at cost			$	11,762,825		$	11,372,278
Less accumulated depreciation and amortization			6,726,729			6,047,230
Net property at cost			$	5,036,096		$	5,325,048

Presented below is information related to carrying values of TJX’s long-lived tangible assets by geographic location:

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
United States			$	3,844,711		$	4,054,833
Canada			241,086			259,977
Europe			898,518			965,751
Australia			51,781			44,487
Total long-lived tangible assets			$	5,036,096		$	5,325,048

F-16

Note D. 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. The following table details the changes in Accumulated other comprehensive (loss) income for fiscal 2021, fiscal 2020 and fiscal 2019:

In thousands			Foreign Currency Translation			Deferred Benefit Costs			Cash Flow Hedge on Debt			Accumulated Other Comprehensive(Loss) Income
Balance, February 3, 2018			$	(280,051)		$	(159,562)		$	(2,246)		$	(441,859)
Additions to other comprehensive loss:
Foreign currency translation adjustments (net of taxes of $8,233)			(192,664)			—			—			(192,664)
Recognition of net gains/losses on investment hedges (net of taxes of $7,113 )			19,538			—			—			19,538
Recognition of net gains/losses on benefit obligations (net of taxes of $19,813)			—			(54,420)			—			(54,420)
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 $304			—			—			847			847
Amortization of prior service cost and deferred gains/losses (net of taxes of $4,280)			—			11,756			—			11,756
Balance, February 2, 2019			$	(453,177)		$	(175,745)		$	(1,399)		$	(630,321)
Additions to other comprehensive loss:
Foreign currency translation adjustments (net of taxes of $1,189)			(3,943)			—			—			(3,943)
Recognition of net gains/losses on benefit obligations (net of taxes of $20,489)			—			(56,275)			—			(56,275)
Reclassifications from other comprehensive loss to net income:
Amortization of loss on cash flow hedge (net of taxes of $303)			—			—			831			831
Amortization of prior service cost and deferred gains/losses (net of taxes of $6,019)			—			16,537			—			16,537
Balance, February 1, 2020			$	(457,120)		$	(215,483)		$	(568)		$	(673,171)
Additions to other comprehensive loss:
Foreign currency translation adjustments (net of taxes of $2,442)			15,588			—			—			15,588
Recognition of net gains/losses on benefit obligations (net of taxes of $9,974)			—			30,635			—			30,635
Reclassifications from other comprehensive loss to net income:
Amortization of loss on cash flow hedge (net of taxes of $303)			—			—			831			831
Amortization of prior service cost and deferred gains/losses (net of taxes of $7,298)			—			20,046			—			20,046
Balance, January 30, 2021			$	(441,532)		$	(164,802)		$	263		$	(606,071)

F-17

Note E. Capital Stock and Earnings Per Share

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. 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.

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

TJX has five million shares of authorized but unissued preferred stock, $1 par value.

Earnings Per Share

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

			Fiscal Year Ended
Amounts in thousands except per share amounts			January 30, 2021			February 1, 2020			February 2, 2019
Basic earnings per share:
Net income			$	90,470		$	3,272,193		$	3,059,798
Weighted average common stock outstanding for basic earnings per share calculation			1,199,927			1,208,163			1,241,153
Basic earnings per share			$	0.08		$	2.71		$	2.47
Diluted earnings per share:
Net income			$	90,470		$	3,272,193		$	3,059,798
Weighted average common stock outstanding for basic earnings per share calculation			1,199,927			1,208,163			1,241,153
Assumed exercise / vesting of:
Stock options and awards			14,776			18,356			18,099
Weighted average common stock outstanding for diluted earnings per share calculation			1,214,703			1,226,519			1,259,252
Diluted earnings per share			$	0.07		$	2.67		$	2.43
Cash dividends declared per share(a)			$	0.26		$	0.92		$	0.78

(a)There were no dividends declared during the first three quarters of fiscal 2021. 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. Such options are excluded because they would have an antidilutive effect. There were 6.2 million, 11.8 million and 6.1 million such options excluded at the end of fiscal 2021, fiscal 2020 and fiscal 2019, respectively.

F-18

Note F. Financial Instruments

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

Diesel Fuel Contracts

TJX hedges portions of its estimated notional diesel requirements based on the diesel fuel expected to be consumed by independent freight carriers transporting TJX’s inventory. Independent freight carriers transporting TJX’s inventory charge TJX a mileage surcharge based on the price of diesel fuel. The hedge agreements are designed to mitigate the volatility of diesel fuel pricing (and the resulting per mile surcharges payable by TJX) by setting a fixed price per gallon for the period being hedged. During fiscal 2021, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2022. The hedge agreements outstanding at January 30, 2021 relate to approximately 42% of TJX’s estimated notional diesel requirements for fiscal 2022. 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.

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. 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. All merchandise is purchased centrally in the U.K. and then shipped and billed to the retail entities in other countries. This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the buying entity for changes in the exchange rate between the Euro and British Pound. The inflow of Euros to the central buying entity provides a natural hedge for merchandise purchased from third-party vendors that is denominated in Euros. However, with the growth of TJX’s Euro denominated retail operations, the intercompany billings committed to the Euro denominated operations 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. 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.

F-19

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 Contract Rate			Balance Sheet Location			Current Asset U.S.$			Current (Liability) U.S.$			Net Fair Value in U.S.$ at January 30, 2021
Fair value hedges:
Intercompany balances, primarily debt and related interest:
			zł			45,000			£			8,846			0.1966			Prepaid Exp			$	11		$	—		$	11
			A$			80,000			U.S.$			62,032			0.7754			Prepaid Exp			738			—			738
			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:
Diesel contracts			Diesel fuel contracts			Fixed on 1.5M - 3.8M gal per month						Float on 1.5M - 3.8M gal per month			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$			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)

F-20

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

In thousands						Pay			Receive						Blended Contract Rate			Balance Sheet Location			Current Asset U.S.$			Current (Liability) U.S.$			Net Fair Value in U.S.$ at February 1, 2020
Fair value hedges:
Intercompany balances, primarily debt and related interest:
			zł			45,000			£			8,930			0.1984			Prepaid Exp			$	270		$	—		$	270
			A$			50,000			U.S.$			33,911			0.6782			Prepaid Exp			275			—			275
			U.S.$			72,475			£			55,000			0.7589			Prepaid Exp			743			—			743
Economic hedges for which hedge accounting was not elected:
			Diesel fuel contracts			Fixed on 2.9M - 3.5M gal per month						Float on 2.9M - 3.5M 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
Merchandise purchase commitments:
			C$			609,340			U.S.$			463,200			0.7602			Prepaid Exp / (Accrued Exp)			2,877			(207)			2,670
			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
			U.S.$			49,849			€			44,635			0.8954			Prepaid Exp / (Accrued Exp)			10			(235)			(225)
Total fair value of financial instruments																					$	7,240		$	(20,205)		$	(12,965)

F-21

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 Income by Derivative
In thousands			Location of Gain (Loss) Recognized in Income by Derivative			January 30, 2021			February 1, 2020			February 2, 2019
Fair value hedges:
Intercompany balances, primarily debt and related interest			Selling, general and administrative expenses			$	(59,829)		$	4,788		$	(2,674)
Economic hedges for which hedge accounting was not elected:
Intercompany receivable			Selling, general and administrative expenses			—			3,257			18,823
Diesel fuel contracts			Cost of sales, including buying and occupancy costs			(5,638)			(9,780)			1,373
Intercompany billings in TJX International, primarily merchandise related			Cost of sales, including buying and occupancy costs			(4,249)			2,652			1,137
International lease liabilities			Cost of sales, including buying and occupancy costs			—			(1,113)			—
Merchandise purchase commitments			Cost of sales, including buying and occupancy costs			(4,468)			10,484			60,407
(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.

Note G. 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:

Level 1:						Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2:						Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3:						Unobservable inputs for the asset or liability

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
Level 1
Assets:
Executive Savings Plan investments			$	363,729		$	305,777
Level 2
Assets:
Foreign currency exchange contracts			$	4,149		$	7,240
Diesel fuel contracts			4,880			—
Liabilities:
Foreign currency exchange contracts			$	21,921		$	10,278
Diesel fuel contracts			—			9,927

F-22

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.

Foreign currency exchange contracts and diesel fuel contracts are valued using broker quotations, which include observable market information. TJX does not make adjustments to quotes or prices obtained from brokers or pricing services but does assess the credit risk of counterparties and will adjust final valuations when appropriate. Where independent pricing services provide fair values, TJX obtains an understanding of the methods used in pricing. As such, these instruments are classified within Level 2.

The fair value of TJX’s general corporate debt was estimated by obtaining market quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality. These inputs are considered to be Level 2. 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.

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, 2019, the Company did not record any material impairments to long-lived assets.

Note H. Segment Information

TJX operates four main business segments. 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, 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. The results of Sierra are included in the Marmaxx segment.

All of TJX’s stores, with the exception of HomeGoods and HomeSense, sell family apparel and home fashions. 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:

			Fiscal 2021			Fiscal 2020			Fiscal 2019
Apparel
Clothing including footwear			46		%	51		%	52		%
Jewelry and accessories			15			16			15
Home fashions			39			33			33
Total			100		%	100		%	100		%

TJX evaluates the performance of its segments based on “segment profit or loss,” which it defines as pre-tax income or loss before general corporate expense, interest expense, net and certain separately disclosed unusual or infrequent items. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities. These 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.

F-23

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
Net sales:
In the United States:
Marmaxx			$	19,362,573		$	25,664,805		$	24,057,970
HomeGoods			6,096,237			6,355,770			5,787,365
TJX Canada			2,836,088			4,031,406			3,869,779
TJX International			3,842,064			5,664,996			5,257,820
Total net sales			$	32,136,962		$	41,716,977		$	38,972,934
Segment profit (loss):
In the United States:
Marmaxx			$	891,180		$	3,469,794		$	3,253,949
HomeGoods			509,562			680,520			671,871
TJX Canada			124,143			515,559			551,617
TJX International			(503,618)			307,081			285,790
Total segment profit			$	1,021,267		$	4,972,954		$	4,763,227
General corporate expense			439,037			556,745			545,034
Loss on early extinguishment of debt			312,233			—			—
Interest expense, net			180,734			10,026			8,860
Pension settlement charge			—			—			36,122
Income before income taxes			$	89,263		$	4,406,183		$	4,173,211

F-24

Business segment information (continued):

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
Identifiable assets:
In the United States:
Marmaxx			$	10,220,441		$	11,162,890		$	6,223,110
HomeGoods			2,851,131			2,785,006			1,416,687
TJX Canada			2,035,341			1,889,679			914,789
TJX International			4,389,261			4,284,385			2,344,033
Corporate(a)			11,317,381			4,023,043			3,427,410
Total identifiable assets(b)			$	30,813,555		$	24,145,003		$	14,326,029
Capital expenditures:
In the United States:
Marmaxx			$	216,186		$	614,624		$	598,955
HomeGoods			162,200			251,864			170,978
TJX Canada			43,879			101,862			82,333
TJX International			145,756			254,766			272,873
Total capital expenditures(c)			$	568,021		$	1,223,116		$	1,125,139
Depreciation and amortization:
In the United States:
Marmaxx			$	478,963		$	473,908		$	456,420
HomeGoods			135,205			124,360			110,978
TJX Canada			70,777			66,693			66,365
TJX International			175,824			197,262			180,631
Corporate(d)			9,989			5,080			5,261
Total depreciation and amortization			$	870,758		$	867,303		$	819,655

(a)Corporate identifiable assets consist primarily of cash, the trust assets in connection with the Executive Savings Plan and the investment in Familia. 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.

(c)Fiscal 2021 reduction in capital spending due to the COVID-19 pandemic.

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

Note I. 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 Stock Incentive Plan, as amended with shareholder approval, has provided for the issuance of up to 695.7 million shares with 33.9 million shares available for future grants as of January 30, 2021. TJX issues shares under the plan from authorized but unissued common stock.

Total compensation cost related to share-based compensation was $59 million, $125 million and $104 million in fiscal 2021, 2020 and 2019, 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. That cost is expected to be recognized over a weighted-average period of 2 years.

Stock Options

Options for the purchase of common stock are granted with an exercise price that is 100% of market price on the grant date, generally vest in thirds over a 3-year period starting 1 year after the grant, and have a 10-year maximum term. When options are granted with other vesting terms, the vesting information is reflected in the valuation.

F-25

The fair value of options is estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

			Fiscal Year Ended
			January 30, 2021			February 1, 2020			February 2, 2019
Risk-free interest rate			0.28		%	1.65		%	2.88		%
Dividend yield(a)			1.4		%	1.6		%	1.4		%
Expected volatility factor			26.5		%	23.4		%	23.5		%
Expected option life			5.0 years			4.9 years			4.9 years
Weighted average fair value of options issued			$	11.29		$	10.84		$	11.85

(a)The reduction in the yield reflects 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 risk-free interest rate is for periods within the contractual life of the option based on the U.S. Treasury yield curve in effect at the time of grant. 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. The expected option life represents an estimate of the period of time options are expected to remain outstanding based upon historical exercise trends. Employee groups and option characteristics are considered separately for valuation purposes when applicable.

A summary of the status of TJX’s stock options and related weighted average exercise prices (“WAEP”) is presented below:

			Fiscal Year Ended
Shares in thousands			January 30, 2021						February 1, 2020						February 2, 2019
			Options			WAEP			Options			WAEP			Options			WAEP
Outstanding at beginning of year			45,065			$	36.81		49,053			$	32.02		55,260			$	27.52
Granted			6,268			57.32			6,150			56.74			6,143			53.98
Exercised			(8,239)			25.68			(9,518)			24.40			(11,670)			21.88
Forfeitures			(490)			52.96			(620)			46.37			(680)			38.59
Outstanding at end of year			42,604			$	41.79		45,065			$	36.81		49,053			$	32.02
Options exercisable at end of year			30,659			$	36.05		32,276			$	31.04		34,344			$	26.95

The total intrinsic value of options exercised was $279 million in fiscal 2021, $293 million in fiscal 2020 and $284 million in fiscal 2019.

The following table summarizes information about stock options outstanding that were expected to vest and stock options outstanding that were exercisable as of January 30, 2021:

			Shares (in thousands)			Aggregate Intrinsic Value (in thousands)			Weighted Average Remaining Contract Life			WAEP
Options outstanding expected to vest(a)			11,060			$	82,510		9.0 years			$	56.58
Options exercisable			30,659			$	858,015		5.0 years			$	36.05
Total outstanding options vested and expected to vest			41,719			$	940,525		6.1 years			$	41.50

(a)Reflects 11.9 million unvested options, net of anticipated forfeitures.

F-26

Stock Awards

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. 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. 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:

			Stock Awards (in thousands)			Weighted Average Grant Date Fair Value
Nonvested at beginning of year			3,445			$	44.54
Granted			857			56.24
Vested			(1,317)			43.25
Forfeited			(14)			48.04
Modification			(50)			52.17
Nonvested at end of year			2,921			51.36

There were 857,216 units with a weighted average grant date fair value of $56.24, granted in fiscal 2021, 1,001,849 units, with a weighted average grant date fair value of $53.20, granted in fiscal 2020, and 1,267,802 units, with a weighted average grant date fair value of $41.17, granted in fiscal 2019. The fair value of awards that vested was $57 million in fiscal 2021, $38 million in fiscal 2020, and $30 million in fiscal 2019.

Other Awards

TJX also awards deferred shares to its outside directors under the Stock Incentive Plan. As of the end of fiscal 2021, a total of 665,477 of these deferred shares were outstanding under the plan.

Note J. Pension Plans and Other Retirement Benefits

Pension

TJX has a funded defined benefit retirement plan that covers eligible U.S. employees hired prior to February 1, 2006. No employee contributions are required, or permitted, and benefits are based principally on compensation earned in each year of service. TJX’s funded defined benefit retirement plan assets are invested in domestic and international equity and fixed income securities, both directly and through investment funds. The plan does not invest in TJX securities. TJX also has an unfunded supplemental retirement plan that covers certain key employees and provides additional retirement benefits based on final average compensation for certain of those employees (the “primary benefit”) or, alternatively, based on benefits that would be provided under the funded retirement plan absent Internal Revenue Code limitations (the “alternative benefit”).

Presented below is financial information relating to TJX’s funded defined benefit pension plan (“qualified pension plan” or “funded plan”) and its unfunded supplemental pension plan (“unfunded plan”) for the fiscal years indicated. The Company has elected the practical expedient pursuant to ASU 2015-4– Compensation-retirement benefits (Topic 715) and has selected the measurement date of January 31, the calendar month end closest to the Company’s fiscal year end.

F-27

			Funded Plan Fiscal Year Ended						Unfunded Plan Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			January 30, 2021			February 1, 2020
Change in projected benefit obligation:
Projected benefit obligation at beginning of year			$	1,532,416		$	1,221,170		$	104,823		$	96,759
Service cost			50,123			44,685			2,430			2,059
Interest cost			50,210			52,172			3,283			3,740
Actuarial losses			13,758			237,125			8,229			4,682
Benefits paid			(24,527)			(19,891)			(5,287)			(2,417)
Expenses paid			(2,706)			(2,845)			—			—
Projected benefit obligation at end of year			$	1,619,274		$	1,532,416		$	113,478		$	104,823
Accumulated benefit obligation at end of year			$	1,481,505		$	1,383,298		$	97,451		$	88,038

			Funded Plan Fiscal Year Ended						Unfunded Plan Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			January 30, 2021			February 1, 2020
Change in plan assets:
Fair value of plan assets at beginning of year			$	1,562,274		$	1,245,335		$	—		$	—
Actual return on plan assets			151,594			239,675			—			—
Employer contribution			100			100,000			5,287			2,417
Benefits paid			(24,527)			(19,891)			(5,287)			(2,417)
Expenses paid			(2,706)			(2,845)			—			—
Fair value of plan assets at end of year			$	1,686,735		$	1,562,274		$	—		$	—
Reconciliation of funded status:
Projected benefit obligation at end of year			$	1,619,274		$	1,532,416		$	113,478		$	104,823
Fair value of plan assets at end of year			1,686,735			1,562,274			—			—
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
Amounts not yet reflected in net periodic benefit cost and included in Accumulated other comprehensive income (loss):
Prior service cost			$	803		$	1,181		$	—		$	—
Accumulated actuarial losses			245,506			316,695			35,880			32,266
Amounts included in Accumulated other comprehensive income (loss)			$	246,309		$	317,876		$	35,880		$	32,266

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.

F-28

TJX determined the assumed discount rate using the BOND: Link model in fiscal 2021 and fiscal 2020. TJX uses the BOND: Link model as this model allows for the selection of specific bonds resulting in better matches in timing of the plans’ expected cash flows. Presented below are weighted average assumptions for measurement purposes for determining the obligation at the year-end measurement date:

			Funded Plan Fiscal Year Ended						Unfunded Plan Fiscal Year Ended
			January 30, 2021			February 1, 2020			January 30, 2021			February 1, 2020
Discount rate			3.20		%	3.30		%	2.80		%	3.10		%
Rate of compensation increase(a)			4.00		%	4.00		%	4.00		%	4.00		%

(a)As of fiscal 2020, the rate of compensation increase for the Unfunded Plan, reflects the rate for participants eligible for the alternative benefit as the participants eligible for the primary benefit no longer accrue benefits under this plan.

TJX made aggregate cash contributions of $5 million in fiscal 2021, $102 million in fiscal 2020 and $106 million in fiscal 2019 to the funded plan and to fund current benefit and expense payments under the unfunded plan. TJX’s policy with respect to the funded plan is to fund, at a minimum, the amount required to maintain a funded status of 80% of the applicable pension liability (the Funding Target pursuant to the Internal Revenue Code section 430) or such other amount as is sufficient to avoid restrictions with respect to the funding of nonqualified plans under the Internal Revenue Code. The Company does not anticipate any required funding in fiscal 2022 for the funded plan. The Company anticipates making contributions of $4 million to provide current benefits coming due under the unfunded plan in fiscal 2022.

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

			Funded Plan Fiscal Year Ended									Unfunded Plan Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019			January 30, 2021			February 1, 2020			February 2, 2019
Net periodic pension cost:
Service cost			$	50,123		$	44,685		$	45,342		$	2,430		$	2,059		$	2,391
Interest cost			50,210			52,172			54,355			3,283			3,740			3,600
Expected return on plan assets			(88,997)			(74,141)			(79,190)			—			—			—
Amortization of prior service cost			377			377			377			—			—			—
Amortization of net actuarial loss			22,351			19,055			12,250			4,616			3,124			3,409
Settlement charge			—			—			36,122			—			—			—
Total expense			$	34,064		$	42,148		$	69,256		$	10,329		$	8,923		$	9,400
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
Amortization of net (loss)			(22,351)			(19,055)			(12,250)			(4,616)			(3,124)			(3,409)
Settlement charge			—			—			(36,122)			—			—			—
Amortization of prior service cost			(377)			(377)			(377)			—			—			—
Total recognized in other comprehensive income (loss)			$	(71,566)		$	52,158		$	20,021		$	3,613		$	1,558		$	2,546
Total recognized in net periodic benefit cost and other comprehensive income (loss)			$	(37,502)		$	94,306		$	89,277		$	13,942		$	10,481		$	11,946
Weighted average assumptions for expense purposes:
Discount rate			3.30		%	4.30		%	4.00%/4.40%			3.10		%	4.10		%	3.80		%
Expected rate of return on plan assets			5.75		%	6.00		%	6.00%/6.00%			N/A			N/A			N/A
Rate of compensation increase(a)			4.00		%	4.00		%	4.00		%	4.00		%	6.00		%	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%. The assumed rate of compensation increase for participants eligible for the alternative benefit under the unfunded plan is 4.00%.

F-29

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.

The unrecognized gains and losses in excess of 10% of the projected benefit obligation are amortized over the average remaining service life of participants.

The following is a schedule of the benefits expected to be paid in each of the next five fiscal years and in the aggregate for the five fiscal years thereafter:

In thousands			Funded Plan Expected Benefit Payments			Unfunded Plan Expected Benefit Payments
Fiscal Year
2022			$	35,475		$	4,088
2023			40,692			45,914
2024			46,242			6,148
2025			51,865			7,356
2026			57,629			7,992
2027 through 2031			371,352			37,035

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:

			Funded Plan at January 30, 2021
In thousands			Level 1			Level 2			Total
Asset category:
Short-term investments			$	8,598		$	—		$	8,598
Equity Securities			174,691			—			174,691
Fixed Income Securities:
Corporate and government bond funds			—			548,667			548,667
Futures Contracts			—			4,896			4,896
Total assets in the fair value hierarchy			$	183,289		$	553,563		$	736,852
Assets measured at net asset value(a)			—			—			949,883
Fair value of assets			$	183,289		$	553,563		$	1,686,735

F-30

			Funded Plan at February 1, 2020
In thousands			Level 1			Level 2			Total
Asset category:
Short-term investments			$	109,953		$	—		$	109,953
Equity Securities			231,607			—			231,607
Fixed Income Securities:
Corporate and government bond funds			—			480,519			480,519
Futures Contracts			—			(2,540)			(2,540)
Total assets in the fair value hierarchy			$	341,560		$	477,979		$	819,539
Assets measured at net asset value(a)			—			—			742,735
Fair value of assets			$	341,560		$	477,979		$	1,562,274

(a)In accordance with Subtopic 820-10, certain investments that were measured using net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the fair value of assets presented above.

Pension plan assets are reported at fair value. Investments in equity securities traded on a national securities exchange are valued at the composite close price, as reported in the Wall Street Journal, as of the financial statement date. This information is provided by the independent pricing sources.

Short-term investments are primarily cash related to funding of the plan which had yet to be invested as of balance sheet dates.

Certain corporate and government bonds are valued at the closing price reported in the active market in which the bond is traded. Other bonds are valued based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the bond is valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks. All bonds are priced by independent pricing sources.

Assets measured at net asset value include investments in limited partnerships which are stated at the fair value of the plan’s partnership interest based on information supplied by the partnerships as compared to financial statements of the limited partnership or other fair value information as determined by management. 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, 2020
Return-seeking assets			50%			48%			44%
Liability-hedging assets			50%			51%			49%
All other – primarily cash			—%			1%			7%

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. Risks are sought to be mitigated through asset diversification and the use of multiple investment managers. Investment risk is measured and monitored on an ongoing basis through investment portfolio reviews, annual liability measurements and periodic asset/liability studies.

F-31

Other Retirement Benefits

TJX also sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code for all eligible U.S. employees and a similar type of plan for eligible employees in Puerto Rico. Employees may contribute up to 50% of eligible pay, subject to limitations. TJX matches employee contributions, up to 5% of eligible pay, including a basic match at rates of 25% or 75% (based upon date of hire and other eligibility criteria) plus a discretionary match, generally up to 25%, based on TJX’s performance. TJX may also make additional discretionary contributions. Eligible employees are automatically enrolled in the U.S. plan at a 2% deferral rate, unless the employee elects otherwise. The total cost of TJX contributions to these plans was $61 million in fiscal 2021, $59 million in fiscal 2020 and $61 million in fiscal 2019.

TJX also has a nonqualified savings plan (the Executive Savings Plan) for certain U.S. employees. TJX matches employee deferrals at various rates which amounted to $3 million in fiscal 2021, $7 million in fiscal 2020 and $6 million in fiscal 2019. Although the plan is unfunded, in order to help meet its future obligations TJX transfers an amount generally equal to employee deferrals and the related company match to a separate “rabbi” trust. The trust assets, which are invested in a variety of mutual funds, are included in other assets on the balance sheets.

In addition to the plans described above, TJX also contributes to retirement/deferred savings programs for eligible Associates at certain of its foreign subsidiaries. The Company contributed $22 million for these programs in fiscal 2021, $20 million for these programs in fiscal 2020 and $15 million in fiscal 2019.

Multiemployer Pension Plans

TJX contributes to certain multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover union-represented employees. TJX contributed $19 million in fiscal 2021, $20 million in fiscal 2020 and $19 million in fiscal 2019 to the Legacy Plan of the National Retirement Fund (EIN #13-6130178, plan #1), the Adjustable Plan of the National Retirement Fund (EIN #13-6130178, plan #2), the Legacy Plan of the UNITE HERE Retirement Fund (EIN #82-0994119, plan #1) and the Adjustable Plan of the UNITE HERE Retirement Fund (EIN #82-0994119, plan #2). TJX was listed in 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, 2019. 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.

The risks of participating in multiemployer pension plans are different from the risks of single-employer pension plans in certain respects, including the following: (a) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (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.

F-32

Note K. 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. All amounts are net of unamortized debt discounts.

In thousands			January 30, 2021			February 1, 2020
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)			$	749,975		$	749,900
2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $100 and $145 in fiscal 2021 and 2020, respectively)			499,900			499,855
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)			1,245,792			—
2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $4,165 and $4,911 in fiscal 2021 and 2020, respectively)			995,835			995,089
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)			749,544			—
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)			499,061			—
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)			495,282			—
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)			499,390			—
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)			383,291			—
Total Debt			6,118,070			2,244,844
Current maturities of long-term debt, net of debt issuance costs			(749,684)			—
Debt issuance cost			(35,465)			(8,219)
Long-term debt			$	5,332,921		$	2,236,625

The aggregate maturities of long-term debt, inclusive of current installments at January 30, 2021 are as follows:

In thousands			Long-Term Debt
Fiscal Year
2022			$	750,000
2023			—
2024			500,000
2025			—
2026			1,250,000
Later years			3,631,349
Less: amount representing unamortized debt discount			(13,279)
Less: amount representing debt issuance cost			(35,465)
Less: current maturities of long-term debt			(749,684)
Aggregate maturities of long-term debt			$	5,332,921

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 follows: $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.

F-33

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. 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. In 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 0.50 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. 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.

Note L. Income Taxes

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
United States			$	642,482		$	3,742,227		$	3,463,785
Foreign			(553,219)			663,956			709,426
Income before income taxes			$	89,263		$	4,406,183		$	4,173,211

F-34

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
Current:
Federal			$	189,854		$	708,508		$	711,369
State			36,246			250,830			251,187
Foreign			4,985			181,061			238,692
Deferred:
Federal			(97,705)			9,409			(62,278)
State			(25,406)			(8,203)			(27,831)
Foreign			(109,181)			(7,615)			2,274
(Benefit) provision for income taxes			$	(1,207)		$	1,133,990		$	1,113,413

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
Deferred tax assets:
Net operating loss carryforward			$	171,568		$	57,886
Pension, stock compensation, postretirement and employee benefits			272,872			290,144
Operating lease liabilities			2,409,392			2,384,486
Accruals and reserves			239,696			125,022
Other			14,750			16,349
Total gross deferred tax assets			$	3,108,278		$	2,873,887
Valuation allowance			(76,682)			(60,086)
Net deferred tax asset			$	3,031,596		$	2,813,801
Deferred tax liabilities:
Property, plant and equipment			$	530,675		$	557,848
Capitalized inventory			47,769			46,778
Operating lease right of use assets			2,321,733			2,315,690
Tradename / intangibles			17,391			15,705
Undistributed foreign earnings			4,789			1,806
Other			19,212			6,012
Total deferred tax liabilities			$	2,941,569		$	2,943,839
Net deferred tax asset (liability)			$	90,027		$	(130,038)
Non-current asset			$	127,191		$	12,132
Non-current liability			(37,164)			(142,170)
Total			$	90,027		$	(130,038)

TJX has provided for all applicable state and foreign withholding taxes on all undistributed earnings of its foreign subsidiaries in Canada, Puerto Rico, Italy, India, Hong Kong and Vietnam through January 30, 2021. The Company has not provided for federal, state, or foreign withholding taxes on the approximately $1 billion of undistributed earnings related to all other foreign subsidiaries as such earnings are considered to be indefinitely reinvested in the business. The net amount of unrecognized state and foreign withholding tax liabilities related to the undistributed earnings is not material.

F-35

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. 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 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.

The difference between the U.S. federal statutory income tax rate and TJX’s worldwide effective income tax rate is reconciled below:

			Fiscal Year Ended
			January 30, 2021			February 1, 2020			February 2, 2019
U.S. federal statutory income tax rate			21.0		%	21.0		%	21.0		%
Effective state income tax rate			28.1			4.6			4.5
Impact of foreign operations			21.4			0.8			1.2
Excess share-based compensation			(59.4)			(1.3)			(1.2)
Tax credits			(8.9)			—			—
Nondeductible / nontaxable items			(3.3)			—			—
Impact of 2017 Tax Act			—			—			1.5
All other			(0.3)			0.6			(0.3)
Worldwide effective income tax rate			(1.4)		%	25.7		%	26.7		%

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.

F-36

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
Balance, beginning of year			$	259,359		$	244,195		$	61,704
Additions for uncertain tax positions taken in current year			11,751			21,559			7,406
Additions for uncertain tax positions taken in prior years			834			722			177,741
Reductions resulting from lapse of statute of limitations			(2,352)			(4,022)			(1,388)
Settlements with tax authorities			(221)			(3,095)			(1,268)
Balance, end of year			$	269,371		$	259,359		$	244,195

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.

TJX is subject to U.S. federal income tax as well as income tax in multiple state, local and foreign jurisdictions. In the U.S. and India, fiscal years through 2010 are no longer subject to examination. In all other jurisdictions, fiscal years through 2011 are no longer subject to examination.

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.

Note M. Leases

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. Most of TJX’s leases in the U.S. and Canada are store operating leases with ten-year terms and options to extend for one or more five-year periods. Leases in Europe generally have an initial term of ten to fifteen years and leases in Australia generally have an initial lease term of primarily seven to ten years, some of which have options to extend. 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 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.

While the overwhelming majority of leases have fixed payment schedules, some leases have variable lease payments based on market indices adjusted periodically for inflation, or include rental payments based on a percentage of retail sales over contractual levels. In addition, for real estate leases, TJX is generally required to pay insurance, real estate taxes and other operating expenses including common area maintenance based on a proportionate share of premises, and some of these costs are based on a market index, primarily in Canada. For leases with these payments based on a market index, the initial lease payment amount is used in the calculation of the operating lease liability and corresponding operating lease assets included on the Consolidated Balance Sheets. Future payment changes to these market index rate leases are not reflected in the operating lease liability and are instead included in variable lease cost. Variable lease cost also includes variable operating expenses for third party service centers and dedicated transportation contracts that are deemed embedded leases. The operating lease ROU assets also includes any lease payments made in advance of the assets use and is reduced by lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

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Supplemental balance sheet information related to leases is as follows:

			Fiscal Year Ended
			January 30, 2021			February 1, 2020
Weighted-average remaining lease term			6.8 years			7.2 years
Weighted-average discount rate			2.6		%	2.9		%

The following table is a summary of the Company’s components of net lease cost for the fiscal years ended:

						Fiscal Year Ended
In thousands			Classification			January 30, 2021			February 1, 2020
Operating lease cost			Cost of sales, including buying and occupancy costs			$	1,820,396		$	1,752,122
Variable and short term lease cost			Cost of sales, including buying and occupancy costs			1,162,971			1,226,716
Total lease cost						$	2,983,367		$	2,978,838

Supplemental cash flow information related to leases is as follows:

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows paid for operating leases			$	1,663,005		$	1,736,403
Lease liabilities arising from obtaining right of use assets			$	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.

The following table summarizes the maturity of lease liabilities under operating leases as of January 30, 2021:

In thousands			January 30, 2021
Fiscal Year
2022			$	2,049,652
2023			1,741,490
2024			1,559,123
2025			1,331,267
2026			1,087,555
Later years			2,507,701
Total lease payments(a)			10,276,788
Less: imputed interest(b)			855,967
Total lease liabilities(c)			$	9,420,821

(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.

(c)Total lease liabilities are broken out on the Consolidated Balance Sheets between Current portion of operating lease liabilities and Long-term operating lease liabilities.

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Note N. Accrued Expenses and Other Liabilities, Current and Long Term

The major components of accrued expenses and other current liabilities are as follows:

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
Employee compensation and benefits, current			$	946,229		$	819,368
Merchandise credits and gift certificates			576,187			500,844
Dividends payable			315,604			281,703
Occupancy costs, including rent, utilities and real estate taxes			314,850			283,383
Sales tax collections and V.A.T. taxes			115,409			195,059
Accrued capital additions			89,110			125,361
All other current liabilities			1,114,070			836,056
Total accrued expenses and other current liabilities			$	3,471,459		$	3,041,774

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.

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

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020
Employee compensation and benefits, long-term			$	679,661		$	514,788
Tax reserve, long-term			264,104			255,371
Asset retirement obligation			58,385			52,214
All other long-term liabilities			61,752			28,743
Total other long-term liabilities			$	1,063,902		$	851,116

Note O. 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.

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.

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

Note P. Supplemental Cash Flow Information

TJX’s cash payments for interest and income taxes and non-cash investing and financing activities are as follows:

			Fiscal Year Ended
In thousands			January 30, 2021			February 1, 2020			February 2, 2019
Cash paid for:
Interest on debt(a)			$	153,045		$	56,322		$	64,007
Income taxes(b)			146,008			1,280,680			1,147,511
Non-cash investing and financing activity:
Dividends payable			$	33,714		$	40,226		$	42,943
Property additions			(36,251)			6,189			28,836
Build-to-suit construction in progress(c)			—			—			(40,911)
Build-to-suit lease obligation(c)			—			—			40,911

(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.

Note Q. 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 Quarter(a)			Second Quarter(a)			Third Quarter(a)			Fourth Quarter(a)
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.

(c)The fourth quarter of fiscal 2021 includes a $0.3 billion early extinguishment of debt charge.

(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.

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