TJ Maxx 2004 Annual Report Download - page 69

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Effective January 31, 2004 the value of foreign currency exchange contracts relating to inventory commitments is reported in
current earnings as a component of cost of sales, including buying and occupancy costs. The income statement impact of all other
foreign currency contracts is reported as a component of selling, general and administrative expenses.
Following is a summary of TJX’s derivative financial instruments and related fair values, outstanding at January 29, 2005:
Fair
Blended Value
Contract Asset
In Thousands Pay Receive Rate (Liability)
Fair value hedges:
Interest rate swap fixed to floating on notional of LIBOR+ 4.17% 7.45% N/A U.S.$ (2,284)
$50,000
Interest rate swap fixed to floating on notional of LIBOR+ 3.42% 7.45% N/A U.S.$ (550)
$50,000
Intercompany balances, primarily short-term C$241,995 U.S.$194,619 0.8042 U.S.$ (1,017)
debt, related interest and license fees £ 24,777 U.S.$ 45,902 1.8526 U.S.$ (315)
£ 12,089 C$ 27,399 2.2664 U.S.$ (253)
Cash flow hedge:
Intercompany balances, primarily long-term debt and
related interest C$355,000 U.S.$225,540 0.6353 U.S.$(82,741)
Net investment hedges:
Net investment in and between foreign C$ 27,500 U.S.$ 22,256 0.8093 U.S.$ 20
operations £121,000 C$293,536 2.4259 U.S.$ 13,688
Hedge accounting not elected:
Merchandise purchase commitments C$ 92,173 U.S.$ 76,299 0.8278 U.S.$ 1,881
C$ 730 4450 0.6164 U.S.$ (2)
£ 11,372 U.S.$ 21,430 1.8845 U.S.$ 11
£ 18,600 426,319 1.4150 U.S.$ (699)
U.S.$(72,261)
The fair value of the derivatives is classified as assets or liabilities, current or non-current, based upon valuation results and
settlement dates of the individual contracts. Following are the balance sheet classifications of the fair value of our derivatives:
January 29, January 31,
In Thousands 2005 2004
Current assets $ 2,840 $ 6,096
Non-current assets 14,807 9,103
Current liabilities (4,380) (8,088)
Non-current liabilities (85,528) (59,991)
Net fair value asset (liability) $(72,261) $(52,880)
TJX’s forward foreign currency exchange and swap contracts require us to make payments of certain foreign currencies for
receipt of U.S. dollars, Canadian dollars or Euros. All of these contracts except the contracts relating to our investment in our foreign
operations and long-term debt mature during fiscal 2006. The British pound sterling investment hedges have maturities from fiscal
2006 to fiscal 2009, the Canadian dollar investment hedge contracts and long-term debt hedge contracts have maturities from fiscal
2006 to fiscal 2010.
F-15