TJ Maxx 2000 Annual Report Download - page 18

Fiscal Year Ended
January 27, January 29, January 30,
In Thousands 2001 2000 1999
Balance at beginning of year $27,304 $29,660 $17,843
Additions to the reserve ––15,000
CHARGES AGAINST THE RESERVE:
Lease related obligations (1,792) (2,150) (2,768)
All other –(206) (415)
Balance at end of year $25,512 $27,304 $29,660
In fiscal 1999, TJX increased this reserve by $15 million, primarily for potential liabilities relating to guarantees on leases of its former
Hit or Miss division. The after-tax cost of $9 million, or $.02 per diluted share, was recorded as a loss from discontinued operations.
On November 12, 2000, the Hit or Miss store chain filed for bankruptcy and subsequently announced that it is in the process of liqui-
dating its assets under Chapter 11 of the Federal Bankruptcy Code. TJX believes this reserve is adequate relating to contingent
obligations associated with Hit or Miss. 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. TJX believes this future spending
will not have a material impact on future cash flows or its financial condition.
In addition to the above obligations, TJX is also contingently liable on certain other leases of the former Zayre stores as well as leases
on its former warehouse club operations. See Note M to the consolidated financial statements for further information.
L. SUPPLEMENTAL CASH FLOWS INFORMATION
There were no cash flows attributable to the operating results of TJX’s discontinued operations during the years ended January 27,
2001, January 29, 2000 or January 30, 1999. However, TJX is responsible for certain leases related to, and other obligations arising
from, the sale of these operations. The cash flow impact of these obligations is reflected as a component of cash provided by operating
activities in the statements of cash flows.
TJX’s cash payments for interest and income taxes and its non–cash investing and financing activities are as follows:
Fiscal Year Ended
January 27, January 29, January 30,
In Thousands 2001 2000 1999
CASH PAID FOR:
Interest on debt $ 34,509 $ 19,018 $ 22,542
Income taxes 335,265 332,622 275,538
NON–CASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Series E cumulative convertible preferred
stock into common stock $ – $ – $ 72,730
Distribution of two–for–one stock split ––158,954
CHANGE IN ACCRUED EXPENSES DUE TO:
Stock repurchase $ (9,275) $ (3,300) $ 12,575
Dividends payable 573 977 1,246
Investing activities include advances TJX has made under a $35 million construction loan agreement in connection with the expansion
of its leased home office facility. The advances are classified as a note receivable in other assets on the balance sheets and amounted
to $28.9 million as of January 27, 2001 and $5.8 million as of January 29, 2000. The note bears interest at 7.25% per year. Upon
completion of the project the note will be converted into a term loan with a maturity date of December 31, 2015.
M. DISCONTINUED OPERATIONS AND RELATED CONTINGENT LIABILITIES
In October 1988, TJX completed the sale of its former Zayre Stores division to Ames Department Stores, Inc. (Ames). In April 1990,
Ames filed for protection under Chapter 11 of the Federal Bankruptcy Code and in December 1992, Ames emerged from bankruptcy
under a plan of reorganization.
THE TJX COMPANIES, INC.
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