TJ Maxx 2004 Annual Report Download - page 72

TJX maintained a separate deferred stock compensation plan for its outside directors under which deferred share awards valued
at $10,000 each were issued annually to outside directors. During fiscal 2003, the Board merged this deferred stock compensation
plan into the Stock Incentive Plan, and all deferred shares earned will be issued pursuant to the Stock Incentive Plan. Beginning in
June 2003, the annual deferred share award granted to each outside director is valued at $30,000. As of the end of fiscal 2005, a total
of 68,536 deferred shares had been granted under the plan. Actual shares will be issued at termination of service or a change of
control. Prior to merging the deferred stock award plan into the Stock Incentive Plan, TJX planned to issue actual shares from shares
held in treasury.
G. Capital Stock and Earnings Per Share
Capital Stock: TJX distributed a two-for-one stock split, effected in the form of a 100% stock dividend, on May 8, 2002 to
shareholders of record on April 25, 2002, which resulted in the issuance of 269.4 million shares of common stock and a
corresponding decrease of $269.4 million in retained earnings. All historical earnings per share amounts and reference to common
stock activity in the notes have been restated to reflect the two-for-one stock split.
During fiscal 2003, we completed a $1 billion stock repurchase program begun in fiscal 2001 and initiated another multi-year
$1 billion stock repurchase program. This repurchase program was completed in May 2004. On May 24, 2004, we announced a new
stock repurchase program, approved by the Board of Directors, pursuant to which we may repurchase up to an additional $1 billion
of common stock. We had cash expenditures under all of our repurchase programs of $594.6 million, $520.7 million and
$481.7 million in fiscal 2005, 2004 and 2003, respectively, funded primarily by cash generated from operations. The total common
shares repurchased amounted to 25.1 million shares in fiscal 2005, 26.8 million shares in fiscal 2004 and 25.9 million shares in fiscal
2003. As of January 29, 2005, we had repurchased 17.7 million shares of our common stock at a cost of $406.6 million under the
current $1 billion stock repurchase program. All shares repurchased have been retired except 75,000 shares and 87,638 shares
purchased in fiscal 2004 and 2003, respectively, which are held in treasury.
TJX has authorization to issue up to 5 million shares of preferred stock, par value $1. There was no preferred stock issued or
outstanding at January 29, 2005.
Earnings Per Share: In October 2004, the Emerging Issues Task Force (‘‘EITF’’) of the Financial Accounting Standards Board
(‘‘FASB’’) reached a consensus that EITF Issue No. 04-08, ‘‘The Effect of Contingently Convertible Debt on Diluted Earnings per
Share’’ would be effective for reporting periods ending after December 15, 2004. This accounting pronouncement affects the
company’s treatment, for earnings per share purposes, of its $517.5 million zero coupon convertible subordinated notes issued in
February 2001. The notes are convertible into 16.9 million shares of TJX common stock if the sale price of our stock reaches certain
levels or other contingencies are met. Prior to this reporting period, the 16.9 million shares were excluded from the diluted earnings
per share calculation because criteria for conversion had not been met. EITF Issue No. 04-08 requires that shares associated with
contingently convertible debt be included in diluted earnings per share computations regardless of whether contingent conversion
conditions have been met. EITF Issue No. 04-08 also requires that diluted earnings per share for all prior periods be restated to
reflect this change. As a result diluted earnings per share for all periods presented reflect the assumed conversion of our convertible
subordinated notes.
F-18