TJ Maxx 1999 Annual Report Download - page 8

Ja n u a ry 30, 1999, respectivel y, and is being amortized over 40 years on a straight-line basis.Annual amortiza-
tion of goodwill was $2.6 million in fiscal years 2000, 1999 and 1998. Cumulative amortization as of January
29, 2000 and January 30, 1999 was $27.7 million and $25.1 million, respectively.
Tradename is the value assigned to the name “Marshalls” as a result of the Company’s acquisition of the
Marshalls chain on November 17, 1995. The value of the tradename was determined by the discounted pre s e n t
value of assumed after- t a x royalty pay m e n t s , o f fset by a reduction for its pro - rata share of the total negat ive go o d-
will acquire d . The final purchase price allocated to the tradename, including a reduction for a pro-rata share of
reserve adjustments recorded in fiscal 2000 and fiscal 1998 (see Note J) amounted to $128.3 million.The tra d e-
name is deemed to have an indefinite life and accord i n g l y is being amortized over 40 ye a rs .A m o r t i z ation ex p e n s e
was $3.2 million for fiscal ye a rs 2000 and 1999, and $3.4 million for fiscal 1998. C u m u l at i ve amortization as of
Ja n u a ry 29, 2000 and Ja n u a ry 30, 1999 was $14.2 million and $11.0 million, re s p e c t i ve l y.
I m p a irm en t o f L on g-Liv e d A s s e t s : The Company periodically reviews the value of its property and intan-
gible assets in relation to the current and expected operating results of the related business segments in order to
assess whether there has been a permanent impairment of their carrying values.
A d v e rtisin g C o st s: The Company expenses advertising costs during the fiscal year incurred. Advertising
expense was $114.7 million, $106.4 million and $103.8 million for fiscal ye a rs 2000, 1999 and 1998, re s p e c t i ve ly .
E a rn ings Pe r S h a re : All earnings per share amounts discussed refer to diluted earnings per share unless
otherwise indicated.All historical earnings per share amounts reflect the June 1998 and June 1997 two-for-one
stock splits.
Fo r e ign Cu rre n c y Tra n s l a t i o n : The Company’s foreign assets and liabilities are translated at the year-end
exchange rate and income statement items are translated at the average exchange rates prevailing during the
year. A large portion of the Company’s net investment in foreign operations is hedged with foreign currency
swap agreements and forward contracts.The translation adjustments associated with the foreign operations and
the related hedging instruments are included in shareholders’ equity as a component of comprehensive income
(loss). Cumulative foreign currency translation adjustments included in shareholders’ equity amounted to losses
of $1.3 million as of January 29, 2000 and $1.5 million as of January 30, 1999.
N e w A cco u n t in g S t a n d a rd s : During 1998, the Financial Accounting Standards Board (FASB) issued State-
ment of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging
Activities.” This Statement established accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging activities. This Statement requires
that an entity recognize all derivatives as either assets or liabilities in the statements of financial position and
measure those instruments at fair value. SFAS No. 133 was later amended by SFAS No. 137 which deferred the
implementation date of SFAS No. 133 to fiscal years beginning after June 15, 2000.The Company believes that
the impact of implementation of this new standard will be immaterial.The Company will adopt SFAS No. 133,
as amended by SFAS No. 137, in its fiscal year ending January 26, 2002.
R e c l a s s i f i c a t i o n s : Certain amounts in prior years’ financial statements have been reclassified for comparative
purposes.
A . C h a n ge I n A cco u n t i n g P ri n cip l e
Effective January 31, 1999,the Company changed its method of accounting for layaway sales in compliance with
Staff Accounting Bulletin No. 101 “Revenue Recognition in Financial Statements,” issued by the Securities and
Exchange Commission during the fourth quarter of fiscal 2000. Under the new accounting method, the
Company will defer recognition of a layaway sale and its related profit to the accounting period when the
customer picks up layaway merchandise. The cumulative effect of this change for periods prior to January 31,