TJ Maxx 1999 Annual Report Download - page 26

Fi scal Ye a r E n d e d
Ja n u a ry 2 9 , Ja n u a ry 3 0, Ja nu a ry 3 1 ,
I n Th o u s a n d s 2 0 0 0 1 9 9 9 1 9 9 8
Balance at beginning of year $ 44,598 $ 57,966 $ 95,867
Additions to the reserve –1,961 –
Reserve adjustments:
Adjust Marshalls restructuring reserve (3,000) – (15,843)
Adjust T.J. Maxx store closing reserve (300) (1,800) 700
Charges against the reserve:
Lease related obligations (23,734) (12,521) (13,593)
Severance and all other cash charges –(927) (1,876)
Net activity relating to HomeGoods closings (1,833) (81) (1,887)
Non-cash property write-offs –– (5,402)
Balance at end of year $ 15,731 $ 44,598 $ 57,966
The use of the reserve will reduce operating cash flows in varying amounts over the next ten to fifteen years as
the related leases reach their expiration dates or are settled.This future spending will not have a material impact
on future cash flows or TJX’s financial condition.
TJX also has a reserve for future obligations relating to its discontinued operations. During fiscal 2000, net
expenditures of $2.3 million, relating primarily to lease obligations, reduced the reserve. During fiscal 1999, the
reserve increased by a net amount of $11.9 million. We added $15.0 million to the reserve for additional lease
related obligations, primarily for our former Hit or Miss division, which was offset by charges against the reserve
in fiscal 1999 of $3.1 million, primarily for lease related costs associated with the former Zayre stores. The
reserve decreased in fiscal 1998 by $5.8 million, primarily due to settlement costs associated with our former
Chadwick’s division as well as lease related costs associated with the former Zayre and Hit or Miss locations.The
balance of the discontinued operations reserve as of January 29,2000 is $27.3 million and relates to lease related
obligations of the former Zayre and Hit or Miss locations. Future spending against the discontinued operations
reserve will reduce operating cash flows in varying amounts over the next ten to fifteen years, as leases reach
termination dates or are settled. This future spending will not have a material impact on future cash flows or
T J X ’s financial condition. TJX is also continge n t ly liable on certain leases of its discontinued
operations. See Note L to the consolidated financial statements for further information.
I n v e sti n g A c t i v i t i e s : TJX’s cash flows for investing activities include capital expenditures for the last two
years as set forth in the table below:
Fi scal Ye a r E n d e d
Ja n u a ry 2 9 , Ja n u a ry 3 0,
I n Millio n s 2 0 0 0 1 9 9 9
New stores $ 81.2 $ 66.7
Store renovations and improvements 96.1 92.1
Office and distribution centers 61.3 48.9
Capital expenditures $238.6 $207.7
TJX expects that capital expenditures will approximate $285 million for fiscal year 2001. This includes $102.1
million for new stores, $92.1 million for store renovations and improvements and $90.8 million for our office
and distribution centers.
I nvesting activities for fiscal 1999 and fiscal 1998 include proceeds of $9.4 million and $15.7 million, re s p e c t i ve ly,
for the sale of shares of Brylane, Inc. common stock. The Brylane, Inc. common stock, all of which has been
disposed of, was obtained through the conversion of a $20 million convertible note received by the Company
as partial consideration for the sale of Chadwick’s. Fiscal 1998 also includes a payment by TJX, to Brylane, of
$33.2 million as a final settlement of the proceeds from the sale of Chadwick’s.As part of the sale of Chadwick’s,
TJX retained the consumer credit card receivables of the division as of the closing date, which totaled approxi-
mately $125 million, with $54.5 million still outstanding as of January 25, 1997.The balance of the receivables
was collected in the first quarter of fiscal 1998 and is classified as cash provided by discontinued operations.