Item 1. Consolidated Financial Statements

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

			Thirteen Weeks Ended						Twenty-Six Weeks Ended
			July 30, 2022			July 31, 2021			July 30, 2022			July 31, 2021
Net sales			$	11,843,008		$	12,077,063		$	23,249,482		$	22,163,724
Cost of sales, including buying and occupancy costs			8,571,550			8,528,130			16,794,763			15,783,765
Selling, general and administrative expenses			2,174,861			2,223,692			4,269,443			4,288,684
Impairment on equity investment			—			—			217,619			—
Loss on early extinguishment of debt			—			242,248			—			242,248
Interest expense, net			11,007			28,661			29,792			73,349
Income before income taxes			1,085,590			1,054,332			1,937,865			1,775,678
Provision for income taxes			276,250			268,651			541,052			456,067
Net income			$	809,340		$	785,681		$	1,396,813		$	1,319,611
Basic earnings per share			$	0.69		$	0.65		$	1.19		$	1.09
Weighted average common shares – basic			1,167,922			1,205,054			1,172,531			1,205,247
Diluted earnings per share			$	0.69		$	0.64		$	1.18		$	1.08
Weighted average common shares – diluted			1,178,140			1,220,615			1,183,704			1,221,012

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

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

IN THOUSANDS

			Thirteen Weeks Ended
			July 30, 2022			July 31, 2021
Net income			$	809,340		$	785,681
Additions to other comprehensive (loss) income:
Foreign currency translation adjustments, net of related tax provision of $409 in fiscal 2023 and tax benefit of $1,140 in fiscal 2022			(30,935)			(876)
Reclassifications from other comprehensive (loss) to net income:
Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $1,376 in fiscal 2023 and $1,590 in fiscal 2022			3,778			4,368
Other comprehensive (loss) income, net of tax			(27,157)			3,492
Total comprehensive income			$	782,183		$	789,173

			Twenty-Six Weeks Ended
			July 30, 2022			July 31, 2021
Net income			$	1,396,813		$	1,319,611
Additions to other comprehensive (loss) income:
Foreign currency translation adjustments, net of related tax benefit of $165 in fiscal 2023 and tax provision of $1,758 in fiscal 2022			(88,547)			21,373
Reclassifications from other comprehensive (loss) to net income:
Amortization of prior service cost and deferred gains/losses, net of related tax provisions of $2,751 in fiscal 2023 and $2,646 in fiscal 2022			7,556			7,269
Amortization of loss on cash flow hedge, net of related tax provision of $603 in fiscal 2022			—			(263)
Other comprehensive (loss) income, net of tax			(80,991)			28,379
Total comprehensive income			$	1,315,822		$	1,347,990

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

THE TJX COMPANIES, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

IN THOUSANDS, EXCEPT SHARE DATA

			July 30, 2022			January 29, 2022			July 31, 2021
Assets
Current assets:
Cash and cash equivalents			$	3,531,212		$	6,226,765		$	7,106,016
Accounts receivable, net			555,691			517,623			615,634
Merchandise inventories			7,083,260			5,961,573			5,086,631
Prepaid expenses and other current assets			552,480			438,099			459,046
Federal, state and foreign income taxes recoverable			112,122			114,537			121,703
Total current assets			11,834,765			13,258,597			13,389,030
Net property at cost			5,389,735			5,270,827			5,107,346
Non-current deferred income taxes, net			171,723			184,971			127,483
Operating lease right of use assets			8,986,682			8,853,934			9,183,258
Goodwill			96,648			96,662			97,972
Other assets			611,053			796,467			878,357
Total assets			$	27,090,606		$	28,461,458		$	28,783,446
Liabilities
Current liabilities:
Accounts payable			$	4,085,478		$	4,465,427		$	4,413,316
Accrued expenses and other current liabilities			3,928,610			4,244,997			3,968,968
Current portion of operating lease liabilities			1,571,508			1,576,561			1,612,603
Current portion of long-term debt			499,646			—			—
Federal, state and foreign income taxes payable			61,877			181,155			47,171
Total current liabilities			10,147,119			10,468,140			10,042,058
Other long-term liabilities			916,663			1,015,720			1,072,847
Non-current deferred income taxes, net			67,030			44,175			3,451
Long-term operating lease liabilities			7,706,002			7,575,590			7,905,814
Long-term debt			2,857,143			3,354,841			3,352,892
Commitments and contingencies (See Note K)
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 1,161,886,769; 1,181,188,731 and 1,202,980,524 respectively			1,161,887			1,181,189			1,202,981
Additional paid-in capital			—			—			117,603
Accumulated other comprehensive loss			(768,141)			(687,150)			(577,692)
Retained earnings			5,002,903			5,508,953			5,663,492
Total shareholders’ equity			5,396,649			6,002,992			6,406,384
Total liabilities and shareholders’ equity			$	27,090,606		$	28,461,458		$	28,783,446

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

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

IN THOUSANDS

			Twenty-Six Weeks Ended
			July 30, 2022			July 31, 2021
Cash flows from operating activities:
Net income			$	1,396,813		$	1,319,611
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			437,733			430,561
Loss on early extinguishment of debt			—			242,248
Impairment on equity investment			217,619			—
Loss on property disposals and impairment charges			5,232			482
Deferred income tax provision (benefit)			25,867			(39,258)
Share-based compensation			58,186			114,121
Changes in assets and liabilities:
(Increase) in accounts receivable			(47,758)			(154,350)
(Increase) in merchandise inventories			(1,206,761)			(733,035)
Decrease (increase) in income taxes recoverable			2,415			(85,441)
(Increase) decrease in prepaid expenses and other current assets			(49,755)			19,738
(Decrease) in accounts payable			(311,338)			(425,274)
(Decrease) increase in accrued expenses and other liabilities			(392,606)			468,039
(Decrease) in income taxes payable			(122,617)			(34,819)
Increase (decrease) in net operating lease liabilities			5,771			(96,648)
Other, net			(12,564)			(79,096)
Net cash provided by operating activities			6,237			946,879
Cash flows from investing activities:
Property additions			(693,495)			(444,944)
Purchases of investments			(20,901)			(12,182)
Sales and maturities of investments			11,013			14,365
Net cash (used in) investing activities			(703,383)			(442,761)
Cash flows from financing activities:
Payments on debt			—			(2,975,518)
Payments for repurchase of common stock			(1,307,202)			(297,099)
Cash dividends paid			(655,213)			(628,859)
Proceeds from issuance of common stock			49,982			62,510
Payments of employee tax withholdings for stock awards			(32,454)			(24,478)
Net cash (used in) financing activities			(1,944,887)			(3,863,444)
Effect of exchange rate changes on cash			(53,520)			(4,228)
Net (decrease) in cash and cash equivalents			(2,695,553)			(3,363,554)
Cash and cash equivalents at beginning of year			6,226,765			10,469,570
Cash and cash equivalents at end of period			$	3,531,212		$	7,106,016

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

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN THOUSANDS

			Thirteen Weeks Ended
			Common Stock
			Shares			Par Value $1			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balance, April 30, 2022			1,172,711			$	1,172,711		$	—		$	(740,984)		$	5,163,713		$	5,595,440
Net income			—			—			—			—			809,340			809,340
Other comprehensive (loss), net of tax			—			—			—			(27,157)			—			(27,157)
Cash dividends declared on common stock			—			—			—			—			(343,280)			(343,280)
Recognition of share-based compensation			—			—			30,850			—			—			30,850
Issuance of common stock under stock incentive plan, and related tax effect			1,022			1,022			31,034			—			(599)			31,457
Common stock repurchased			(11,846)			(11,846)			(61,884)			—			(626,271)			(700,001)
Balance, July 30, 2022			1,161,887			$	1,161,887		$	—		$	(768,141)		$	5,002,903		$	5,396,649

			Thirteen Weeks Ended
			Common Stock
			Shares			Par Value $1			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balance, May 1, 2021			1,206,387			$	1,206,387		$	321,475		$	(581,184)		$	5,192,536		$	6,139,214
Net income			—			—			—			—			785,681			785,681
Other comprehensive income, net of tax			—			—			—			3,492			—			3,492
Cash dividends declared on common stock			—			—			—			—			(314,378)			(314,378)
Recognition of share-based compensation			—			—			63,585			—			—			63,585
Issuance of common stock under stock incentive plan, and related tax effect			1,105			1,105			25,131			—			(347)			25,889
Common stock repurchased and retired			(4,511)			(4,511)			(292,588)			—			—			(297,099)
Balance, July 31, 2021			1,202,981			$	1,202,981		$	117,603		$	(577,692)		$	5,663,492		$	6,406,384

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

THE TJX COMPANIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

IN THOUSANDS

			Twenty-Six Weeks Ended
			Common Stock
			Shares			Par Value $1			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balance, January 29, 2022			1,181,189			$	1,181,189		$	—		$	(687,150)		$	5,508,953		$	6,002,992
Net income															1,396,813			1,396,813
Other comprehensive (loss), net of tax			—			—			—			(80,991)						(80,991)
Cash dividends declared on common stock			—			—			—			—			(690,202)			(690,202)
Recognition of share-based compensation			—			—			58,186			—			—			58,186
Issuance of common stock under stock incentive plan, net of shares used to pay tax withholdings			2,167			2,167			15,485			—			(599)			17,053
Common stock repurchased and retired			(21,469)			(21,469)			(73,671)			—			(1,212,062)			(1,307,202)
Balance, July 30, 2022			1,161,887			$	1,161,887		$	—		$	(768,141)		$	5,002,903		$	5,396,649

			Twenty-Six Weeks Ended
			Common Stock
			Shares			Par Value $1			Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Total
Balance, January 30, 2021			1,204,698			$	1,204,698		$	260,515		$	(606,071)		$	4,973,542		$	5,832,684
Net income			—			—			—			—			1,319,611			1,319,611
Other comprehensive income, net of tax			—			—			—			28,379						28,379
Cash dividends declared on common stock			—			—			—			—			(629,314)			(629,314)
Recognition of share-based compensation			—			—			114,121			—			—			114,121
Issuance of common stock under stock incentive plan, net of shares used to pay tax withholdings			2,794			2,794			35,555			—			(347)			38,002
Common stock repurchased			(4,511)			(4,511)			(292,588)			—			—			(297,099)
Balance, July 31, 2021			1,202,981			$	1,202,981		$	117,603		$	(577,692)		$	5,663,492		$	6,406,384

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

THE TJX COMPANIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements and Notes thereto have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These Consolidated Financial Statements and Notes thereto are unaudited and, in the opinion of management, reflect all normal recurring adjustments, accruals and deferrals among periods required to match costs properly with the related revenue or activity, considered necessary by The TJX Companies, Inc. (together with its subsidiaries, “TJX”) for a fair statement of its Consolidated Financial Statements for the periods reported, all in conformity with GAAP consistently applied. Investments for which the Company exercises significant influence but does not have control are accounted for under the equity method. The Consolidated Financial Statements and Notes thereto should be read in conjunction with the audited Consolidated Financial Statements, including the related notes, contained in TJX’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022 (“fiscal 2022”).

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

The January 29, 2022 balance sheet data was derived from audited Consolidated Financial Statements and does not include all disclosures required by GAAP.

Fiscal Year

TJX’s fiscal year ends on the Saturday nearest to the last day of January of each year. The current fiscal year ends January 28, 2023 (“fiscal 2023”) and is a 52-week fiscal year. Fiscal 2022 was also a 52-week fiscal year. Fiscal 2024 will be a 53-week fiscal year and will end February 3, 2024.

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 inventory valuation, reserves for uncertain tax positions and loss contingencies to be the most significant accounting policies that involve management estimates and judgments. Actual amounts could differ from these estimates, and such differences could be material.

Equity Investment

In fiscal 2020, the Company acquired a minority ownership stake in privately held Familia, an off-price retailer of apparel and home fashions domiciled in Luxembourg that operates stores throughout Russia. During the quarter ended April 30, 2022, the Company announced that it had committed to divesting its minority investment and as a result, the Company performed an impairment analysis of this investment. Based on this analysis the Company concluded that there was an other-than-temporary impairment of this investment and recorded an impairment charge of $218 million representing the entirety of the Company’s investment. See Note F—Fair Value Measurements for additional information.

Deferred Gift Card Revenue

The following table presents deferred gift card revenue activity:

In thousands			July 30, 2022			July 31, 2021
Balance, beginning of year			$	685,202		$	576,187
Deferred revenue			852,192			769,970
Effect of exchange rates changes on deferred revenue			(3,288)			2,041
Revenue recognized			(905,519)			(802,194)
Balance, end of period			$	628,587		$	546,004

TJX recognized $462 million in gift card revenue for the three months ended July 30, 2022 and $436 million in gift card revenue for the three months ended July 31, 2021. 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.

Leases

Supplemental cash flow information related to leases is as follows:

			Twenty-Six Weeks Ended
In thousands			July 30, 2022			July 31, 2021
Operating cash flows paid for operating leases			$	972,062		$	1,061,163
Lease liabilities arising from obtaining right of use assets			$	1,151,045		$	1,016,813

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

Note B. Property at Cost

The following table presents the components of property at cost:

In thousands			July 30, 2022			January 29, 2022			July 31, 2021
Land and buildings			$	1,960,479		$	1,911,569		$	1,771,907
Leasehold costs and improvements			3,666,573			3,652,280			3,634,959
Furniture, fixtures and equipment			7,080,322			6,871,777			6,692,117
Total property at cost			$	12,707,374		$	12,435,626		$	12,098,983
Less: accumulated depreciation and amortization			7,317,639			7,164,799			6,991,637
Net property at cost			$	5,389,735		$	5,270,827		$	5,107,346

Depreciation expense was $216 million for the three months ended July 30, 2022 and $213 million for the three months ended July 31, 2021. Depreciation expense was $434 million for the six months ended July 30, 2022 and $425 million for the six months ended July 31, 2021.

Non-cash investing activities in the cash flows consist of accrued capital additions of $145 million and $126 million as of the periods ended July 30, 2022 and July 31, 2021, respectively.

Note C. Accumulated Other Comprehensive (Loss) Income

Amounts included in Accumulated other comprehensive loss are recorded net of taxes. The following table details the changes in Accumulated other comprehensive loss for the twelve months ended January 29, 2022 and the six months ended July 30, 2022:

In thousands			Foreign Currency Translation			Deferred Benefit Costs			Cash Flow Hedge on Debt			Accumulated Other Comprehensive (Loss) Income
Balance, January 30, 2021			$	(441,532)		$	(164,802)		$	263		$	(606,071)
Additions to other comprehensive loss:
Foreign currency translation adjustments (net of taxes of $207)			(46,715)			—			—			(46,715)
Recognition of net gains/losses on benefit obligations (net of taxes of $17,659)			—			(48,504)			—			(48,504)
Reclassifications from other comprehensive loss to net income:
Amortization of loss on cash flow hedge (net of taxes of $603)			—			—			(263)			(263)
Amortization of prior service cost and deferred gains/losses (net of taxes of $4,588)			—			14,403			—			14,403
Balance, January 29, 2022			$	(488,247)		$	(198,903)		$	—		$	(687,150)
Additions to other comprehensive loss:
Foreign currency translation adjustments (net of taxes of $165)			(88,547)									(88,547)
Reclassifications from other comprehensive loss to net income:
Amortization of prior service cost and deferred gains/losses (net of taxes of $2,751)			—			7,556			—			7,556
Balance, July 30, 2022			$	(576,794)		$	(191,347)		$	—		$	(768,141)

Note D. Capital Stock and Earnings Per Share

Capital Stock

TJX repurchased and retired 11.8 million shares of its common stock at a cost of approximately $0.7 billion during the quarter ended July 30, 2022, on a “trade date” basis. During the six months ended July 30, 2022, TJX repurchased and retired 21.4 million shares of its common stock at a cost of approximately $1.3 billion, on a “trade date” basis. TJX reflects stock repurchases in its consolidated financial statements on a “settlement date” or cash basis. TJX had cash expenditures under repurchase programs of $1.3 billion for the six months ended July 30, 2022 and $0.3 billion for the six months ended July 31, 2021. These expenditures were funded by cash generated from current and prior period operations.

In February 2022, the Company announced that its Board of Directors had approved a new stock repurchase program that authorizes the repurchase of up to an additional $3.0 billion of TJX common stock from time to time. Under this program TJX had approximately $2.5 billion available for repurchase as of July 30, 2022.

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

Earnings Per Share

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

			Thirteen Weeks Ended						Twenty-Six Weeks Ended
Amounts in thousands, except per share amounts			July 30, 2022			July 31, 2021			July 30, 2022			July 31, 2021
Basic earnings per share:
Net income			$	809,340		$	785,681		$	1,396,813		$	1,319,611
Weighted average common shares outstanding for basic earnings per share calculation			1,167,922			1,205,054			1,172,531			1,205,247
Basic earnings per share			$	0.69		$	0.65		$	1.19		$	1.09
Diluted earnings per share:
Net income			$	809,340		$	785,681		$	1,396,813		$	1,319,611
Weighted average common shares outstanding for basic earnings per share calculation			1,167,922			1,205,054			1,172,531			1,205,247
Assumed exercise / vesting of stock options and awards			10,218			15,561			11,173			15,765
Weighted average common shares outstanding for diluted earnings per share calculation			1,178,140			1,220,615			1,183,704			1,221,012
Diluted earnings per share			$	0.69		$	0.64		$	1.18		$	1.08
Cash dividends declared per share			$	0.295		$	0.26		$	0.59		$	0.52

The weighted average common shares for the diluted earnings per share calculation excludes the impact of outstanding stock options if the assumed proceeds per share of the option is in excess of the average price of TJX’s common stock for the related fiscal period. Such options are excluded because they would have an antidilutive effect. There were 5.1 million such options excluded for the thirteen weeks and twenty-six weeks ended July 30, 2022. There were no such options excluded for the thirteen weeks and twenty-six weeks ended July 31, 2021.

Note E. Financial Instruments

As a result of its operating and financing activities, TJX is exposed to market risks from changes in interest and foreign currency exchange rates and fuel costs. These market risks may adversely affect TJX’s operating results and financial position. 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 Consolidated Balance Sheet and measures those instruments at fair value. The fair values of the derivatives are classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts. Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of Accumulated other comprehensive loss or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged.

Diesel Fuel Contracts

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 2022, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2023, and during the first six months of fiscal 2023, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the first six months of fiscal 2024. The hedge agreements outstanding at July 30, 2022 relate to approximately 54% of TJX’s estimated notional diesel requirements for the remainder of fiscal 2023 and approximately 47% of TJX’s estimated notional diesel requirements for the first six months of fiscal 2024. These diesel fuel hedge agreements will settle throughout fiscal 2023 and throughout the first seven months of fiscal 2024. TJX elected not to apply hedge accounting to these contracts.

Foreign Currency Contracts

TJX enters into forward foreign currency exchange contracts to obtain economic hedges on portions of merchandise purchases made and anticipated to be made by the Company’s operations in currencies other than their respective functional currencies. The contracts outstanding at July 30, 2022 cover merchandise purchases the Company is committed to over the next several months. Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the U.K. 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 central buying entity for changes in the exchange rate between the Euro and British Pound. A portion of the inflows of Euros to the central buying entity provides a natural hedge for merchandise purchased from third-party vendors that is denominated in Euros. TJX calculates any excess Euro exposure each month and enters into forward contracts of approximately 30 days' duration to mitigate this exposure.

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

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at July 30, 2022:

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 July 30, 2022
Fair value hedges:
Intercompany balances, primarily debt related:
			€			60,000			£			50,568			0.8428			Prepaid Exp			$	343		$	—		$	343
			A$			170,000			U.S.$			119,579			0.7034			Prepaid Exp / (Accrued Exp)			810			(1,040)			(230)
			U.S.$			74,646			£			55,000			0.7368			(Accrued Exp)			—			(6,831)			(6,831)
			£			150,000			U.S.$			203,667			1.3578			Prepaid Exp			19,059			—			19,059
			€			200,000			U.S.$			223,126			1.1156			Prepaid Exp / (Accrued Exp)			14,663			(117)			14,546
Economic hedges for which hedge accounting was not elected:
			Diesel fuel contracts			Fixed on 2.6M – 3.9M gal per month						Float on 2.6M – 3.9M gal per month			N/A			Prepaid Exp			38,234			—			38,234
Intercompany billings in TJX International, primarily merchandise related:
			€			205,500			£			173,888			0.8462			Prepaid Exp			2,145			—			2,145
Merchandise purchase commitments:
			C$			807,155			U.S.$			635,000			0.7867			Prepaid Exp / (Accrued Exp)			6,657			(984)			5,673
			C$			25,978			€			19,000			0.7314			(Accrued Exp)			—			(685)			(685)
			£			439,682			U.S.$			569,000			1.2941			Prepaid Exp / (Accrued Exp)			29,989			(2,151)			27,838
			A$			71,070			U.S.$			50,750			0.7141			Prepaid Exp / (Accrued Exp)			1,055			(364)			691
			zł			701,000			£			124,092			0.1770			Prepaid Exp / (Accrued Exp)			2,215			(34)			2,181
			U.S.$			113,734			€			104,500			0.9188			Prepaid Exp / (Accrued Exp)			110			(5,970)			(5,860)
Total fair value of derivative financial instruments																					$	115,280		$	(18,176)		$	97,104

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

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 29, 2022
Fair value hedges:
Intercompany balances, primarily debt related:
			zł			25,000			£			4,541			0.1816			Prepaid Exp			$	72		$	—		$	72
			€			60,000			£			50,568			0.8428			Prepaid Exp			111			—			111
			A$			170,000			U.S.$			122,061			0.7180			Prepaid Exp			2,047			—			2,047
			U.S.$			74,646			£			55,000			0.7368			(Accrued Exp)			—			(918)			(918)
			€			200,000			U.S.$			230,319			1.1516			Prepaid Exp			4,535			—			4,535
Economic hedges for which hedge accounting was not elected:
			Diesel fuel contracts			Fixed on 3.6M – 4.0M gal per month						Float on 3.6M– 4.0M gal per month			N/A			Prepaid Exp			23,649			—			23,649
Intercompany billings in TJX International, primarily merchandise related:
			€			91,000			£			75,894			0.8340			(Accrued Exp)			—			(145)			(145)
Merchandise purchase commitments:
			C$			987,756			U.S.$			783,000			0.7927			Prepaid Exp / (Accrued Exp)			6,641			(80)			6,561
			C$			38,138			€			26,500			0.6948			(Accrued Exp)			—			(248)			(248)
			£			325,482			U.S.$			442,100			1.3583			Prepaid Exp / (Accrued Exp)			6,023			(632)			5,391
			zł			453,000			£			82,112			0.1813			Prepaid Exp / (Accrued Exp)			744			(449)			295
			A$			65,551			U.S.$			47,500			0.7246			Prepaid Exp			1,270			—			1,270
			U.S.$			66,989			€			59,000			0.8807			(Accrued Exp)			—			(820)			(820)
Total fair value of derivative financial instruments																					$	45,092		$	(3,292)		$	41,800

The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at July 31, 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 July 31, 2021
Fair value hedges:
Intercompany balances, primarily debt related:
			zł			45,000			£			8,846			0.1966			Prepaid Exp			$	562		$	—		$	562
			A$			110,000			U.S.$			84,198			0.7654			Prepaid Exp			3,100			—			3,100
			U.S.$			75,102			£			55,000			0.7323			Prepaid Exp			1,351			—			1,351
			£			250,000			U.S.$			346,344			1.3854			Prepaid Exp / (Accrued Exp)			426			(1,504)			(1,078)
			€			170,000			U.S.$			207,623			1.2213			Prepaid Exp / (Accrued Exp)			5,169			(143)			5,026
			C$			150,000			U.S.$			124,009			0.8267			Prepaid Exp			3,698			—			3,698
Economic hedges for which hedge accounting was not elected:
			Diesel fuel contracts			Fixed on 3.3M – 4.0M gal per month						Float on 3.3M – 4.0M gal per month			N/A			Prepaid Exp			21,805			—			21,805
Intercompany billings in TJX International, primarily merchandise related:
			€			98,000			£			84,053			0.8577			Prepaid Exp			343			—			343
Merchandise purchase commitments:
			C$			630,947			U.S.$			512,000			0.8115			Prepaid Exp / (Accrued Exp)			7,066			(1,132)			5,934
			C$			34,928			€			23,500			0.6728			Prepaid Exp / (Accrued Exp)			93			(161)			(68)
			£			396,740			U.S.$			555,900			1.4012			Prepaid Exp / (Accrued Exp)			5,202			(678)			4,524
			A$			52,396			U.S.$			39,225			0.7486			Prepaid Exp / (Accrued Exp)			656			(36)			620
			zł			400,100			£			75,659			0.1891			Prepaid Exp / (Accrued Exp)			961			(126)			835
			U.S.$			55,198			€			45,000			0.8152			(Accrued Exp)			—			(1,713)			(1,713)
Total fair value of derivative financial instruments																					$	50,432		$	(5,492)		$	44,940

The impact of derivative financial instruments on the Consolidated Statements of Income is presented below:

						Amount of Gain (Loss) Recognized in Income by Derivative
			Location of Gain (Loss) Recognized in Income by Derivative			Thirteen Weeks Ended						Twenty-Six Weeks Ended
In thousands			July 30, 2022			July 31, 2021			July 30, 2022			July 31, 2021
Fair value hedges:
Intercompany balances, primarily debt related			Selling, general and administrative expenses			$	8,961		$	15,417		$	33,356		$	12,553
Economic hedges for which hedge accounting was not elected:
Diesel fuel contracts			Cost of sales, including buying and occupancy costs			9,356			7,276			53,529			20,846
Intercompany billings in TJX International, primarily merchandise related			Cost of sales, including buying and occupancy costs			252			3,427			(118)			3,545
Merchandise purchase commitments			Cost of sales, including buying and occupancy costs			7,465			11,710			48,394			(4,259)
Gain recognized in income						$	26,034		$	37,830		$	135,161		$	32,685

Note F. 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:

In thousands			July 30, 2022			January 29, 2022			July 31, 2021
Level 1
Assets:
Executive Savings Plan investments			$	364,333		$	387,666		$	394,078
Level 2
Assets:
Foreign currency exchange contracts			$	77,046		$	21,443		$	28,627
Diesel fuel contracts			38,234			23,649			21,805
Liabilities:
Foreign currency exchange contracts			$	18,176		$	3,292		$	5,492

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 as of July 30, 2022 was $2.7 billion compared to a carrying value of $2.9 billion. The fair value of the current portion of long-term debt as of July 30, 2022 was $0.5 billion compared to a carrying value of $0.5 billion. The fair value of long-term debt as of January 29, 2022 was $3.5 billion compared to a carrying value of $3.4 billion. The fair value of long-term debt as of July 31, 2021 was $3.7 billion compared to a carrying value of $3.4 billion. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might affect TJX’s ability to settle these obligations. For additional information on long-term debt, see Note I—Long-Term Debt and Credit Lines.

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

Certain assets and liabilities are measured at fair value on a nonrecurring basis, whereas the majority of assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances, such as when there is evidence of an impairment. For the periods ended July 30, 2022, January 29, 2022 and July 31, 2021, the Company did not record any material impairments to long-lived assets.

During the first quarter of fiscal 2023, the Company announced its intention to divest from its position in its minority investment in Familia and re-characterized this investment as held-for-sale valued as a Level 3 position. Given the lack of an active market or observable inputs, the Company derived an exit price which indicated that this investment had no market value. The Company recorded a $218 million charge in the first quarter of fiscal 2023 which represents the entirety of its investment.

Note G. 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, Homesense, and homegoods.com) both operate in the United States, the TJX Canada segment operates Winners, HomeSense and Marshalls in Canada, and the TJX International segment operates T.K. Maxx, Homesense and tkmaxx.com in Europe and T.K. Maxx in Australia. In addition to the Company’s four main business segments, Sierra operates sierra.com and retail stores in the U.S. The results of Sierra are included in the Marmaxx segment.

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

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

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

			Thirteen Weeks Ended						Twenty-Six Weeks Ended
In thousands			July 30, 2022			July 31, 2021			July 30, 2022			July 31, 2021
Net sales:
In the United States:
Marmaxx			$	7,235,219		$	7,348,931		$	14,107,489		$	13,989,417
HomeGoods			1,856,313			2,083,261			3,892,098			4,225,017
TJX Canada			1,248,706			1,021,549			2,330,234			1,787,085
TJX International			1,502,770			1,623,322			2,919,661			2,162,205
Total net sales			$	11,843,008		$	12,077,063		$	23,249,482		$	22,163,724
Segment profit (loss):
In the United States:
Marmaxx			$	933,177		$	1,014,175		$	1,837,399		$	1,839,030
HomeGoods			49,616			182,526			171,601			434,128
TJX Canada			197,772			118,686			324,390			190,263
TJX International			104,615			173,456			117,847			(48,102)
Total segment profit			1,285,180			1,488,843			2,451,237			2,415,319
General corporate expense			188,583			163,602			265,961			324,044
Impairment on equity investment			—			—			217,619			—
Loss on early extinguishment of debt			—			242,248			—			242,248
Interest expense, net			11,007			28,661			29,792			73,349
Income before income taxes			$	1,085,590		$	1,054,332		$	1,937,865		$	1,775,678

Note H. Pension Plans and Other Retirement Benefits

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 periods shown:

			Funded Plan						Unfunded Plan
			Thirteen Weeks Ended						Thirteen Weeks Ended
In thousands			July 30, 2022			July 31, 2021			July 30, 2022			July 31, 2021
Service cost			$	12,168		$	12,718		$	728		$	755
Interest cost			14,426			13,188			931			780
Expected return on plan assets			(22,229)			(23,992)			—			—
Amortization of net actuarial loss and prior service cost			4,276			4,697			878			1,155
Total expense			$	8,641		$	6,611		$	2,537		$	2,690
			Funded Plan						Unfunded Plan
			Twenty-Six Weeks Ended						Twenty-Six Weeks Ended
In thousands			July 30, 2022			July 31, 2021			July 30, 2022			July 31, 2021
Service cost			$	24,336		$	24,937		$	1,455		$	1,510
Interest cost			28,852			26,000			1,862			1,560
Expected return on plan assets			(44,457)			(47,984)			—			—
Amortization of net actuarial loss and prior service cost			8,550			7,500			1,757			2,309
Total expense			$	17,281		$	10,453		$	5,074		$	5,379

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

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

Note I. Long-Term Debt and Credit Lines

The table below presents long-term debt as of July 30, 2022, January 29, 2022 and July 31, 2021. All amounts are net of unamortized debt discounts.

In thousands			July 30, 2022			January 29, 2022			July 31, 2021
General corporate debt:
2.500% senior unsecured notes, maturing May 15, 2023 (effective interest rate of 2.51% after reduction of unamortized debt discount of $33 at July 30, 2022, $56 at January 29, 2022 and $78 at July 31, 2021)			$	499,967		$	499,944		$	499,922
2.250% senior unsecured notes, maturing September 15, 2026 (effective interest rate of 2.32% after reduction of unamortized debt discount of $3,046 at July 30, 2022, $3,419 at January 29, 2022 and $3,792 at July 31, 2021)			996,954			996,581			996,208
1.150% senior unsecured notes, maturing May 15, 2028 (effective interest rate of 1.18% after reduction of unamortized debt discount of $747 at July 30, 2022, $811 at January 29, 2022, and $875 at July 31, 2021)			499,253			499,189			499,125
3.875% senior unsecured notes, maturing April 15, 2030 (effective interest rate of 3.89% after reduction of unamortized debt discount of $475 at July 30, 2022, $506 at January 29, 2022 and $537 at July 31, 2021)			495,375			495,344			495,313
1.600% senior unsecured notes, maturing May 15, 2031 (effective interest rate of 1.61% after reduction of unamortized debt discount of $521 at July 30, 2022, $551 at January 29, 2022, and $581 at July 31, 2021)			499,479			499,449			499,419
4.500% senior unsecured notes, maturing April 15, 2050 (effective interest rate of 4.52% after reduction of unamortized debt discount of $2,094 at July 30, 2022, $2,132 at January 29, 2022 and $2,170 at July 31, 2021)			383,405			383,367			383,329
Total debt			3,374,433			3,373,874			3,373,316
Current maturities of long-term debt, net of debt issuance costs			(499,646)			—			—
Debt issuance costs			(17,644)			(19,033)			(20,424)
Long-term debt			$	2,857,143		$	3,354,841		$	3,352,892

Credit Facilities

The Company has two revolving credit facilities, a $1 billion senior unsecured revolving credit facility maturing in June 2026 (the “2026 Revolving Credit Facility”) and a $500 million revolving credit facility that matures in May 2024 (the “2024 Revolving Credit Facility”). Under these credit facilities, the Company has maintained a borrowing capacity of $1.5 billion. The terms of these revolving credit facilities require quarterly payments on the committed amount and payment of interest on borrowings at rates based on LIBOR or a base rate plus a variable margin, in each case based on the Company’s long-term debt ratings. The 2024 Revolving Credit Facility requires usage fees based on total credit extensions under the facility. As of July 30, 2022, January 29, 2022 and July 31, 2021, there were no amounts outstanding under any of the Company’s facilities. Each of these facilities require TJX to maintain a ratio of funded debt to earnings before interest, taxes, depreciation and amortization and rentals (EBITDAR) of not more than 3.50 to 1.00 on a rolling four-quarter basis. TJX was in compliance with all covenants related to its credit facilities at the end of all periods presented.

As of July 30, 2022, January 29, 2022 and July 31, 2021, TJX Canada had two uncommitted credit lines, a C$10 million facility for operating expenses and a C$10 million letter of credit facility. As of July 30, 2022, January 29, 2022 and July 31, 2021, and during the quarters and year then ended, there were no amounts outstanding on the Canadian credit lines for operating expenses. As of July 30, 2022, January 29, 2022 and July 31, 2021, the Company’s European business at TJX International had an uncommitted credit line of £5 million. As of July 30, 2022, January 29, 2022 and July 31, 2021, and during the quarters and year then ended, there were no amounts outstanding on the European credit line.

Note J. Income Taxes

The effective income tax rate was 25.4% for the second quarter of fiscal 2023 and 25.5% for the second quarter of fiscal 2022. The effective income tax rate was 27.9% for the first six months of fiscal 2023 and 25.7% for the first six months of fiscal 2022. The increase in the effective income tax rate for the first six months of fiscal 2023 was primarily due to the impairment of the Company’s minority investment in Familia, which as of July 30, 2022, did not have an associated tax benefit, and a reduction of excess tax benefits from share-based compensation, partially offset by the change of jurisdictional mix of profits and losses and the resolution of various tax matters.

TJX had net unrecognized tax benefits of $272 million as of July 30, 2022, $288 million as of January 29, 2022 and $280 million as of July 31, 2021.

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 accrued amounts for interest and penalties on the Consolidated Balance Sheets was $39 million as of July 30, 2022, $43 million as of January 29, 2022 and $40 million as of July 31, 2021.

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 consolidated financial statements as of July 30, 2022. During the next 12 months, it is reasonably possible that tax audit resolutions may reduce unrecognized tax benefits by up to $40 million, which would reduce the provision for taxes on earnings.

Note K. Contingent Obligations, Contingencies, and Commitments

Contingent Contractual Obligations

TJX is a party to various agreements under which it may be obligated to indemnify the other party with respect to certain losses related to matters including title to assets sold, specified environmental matters or certain income taxes. These obligations are sometimes limited in time or amount. There are no amounts reflected in the Company’s Consolidated Balance Sheets with respect to these contingent obligations.

Legal Contingencies

TJX is subject to certain legal proceedings, lawsuits, disputes and claims that arise from time to time in the ordinary course of its business. TJX has accrued immaterial amounts in the accompanying Consolidated Financial Statements for certain of its legal proceedings.