TJ Maxx 2004 Annual Report Download - page 74

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TJX had net deferred tax (liabilities) as follows:
January 29, January 31,
In Thousands 2005 2004
Deferred tax assets:
Foreign net operating loss carryforward $ 765 $ 9,074
Reserve for discontinued operations 4,209 6,735
Reserve for closed store and restructuring costs 3,028 3,374
Pension, postretirement and employee benefits 54,890 43,108
Leases 34,409 24,228
Other 45,397 35,985
Foreign tax credits -5,564
Total deferred tax assets 142,698 128,068
Deferred tax liabilities:
Property, plant and equipment 153,155 116,772
Safe harbor leases 10,914 11,862
Tradename 40,719 42,873
Undistributed foreign earnings 56,238 38,100
Other 36,579 33,299
Total deferred tax liabilities 297,605 242,906
Net deferred tax (liability) $(154,907) $(114,838)
The fiscal 2005 total net deferred tax liability is presented on the balance sheet as a current liability of $2.3 million and a non-
current liability of $152.6 million. For fiscal 2004, the net deferred tax liability is presented on the balance sheet as a current asset of
$9.0 million and a non-current liability of $123.8 million. TJX has provided for deferred U.S. taxes on all undistributed Canadian
earnings. All earnings of TJX’s other foreign subsidiaries are indefinitely reinvested and no deferred taxes have been provided for on
those earnings. The net deferred tax liability relating to foreign operations is included above and amounted to $31.0 million and
$16.0 million as of January 29, 2005 and January 31, 2004, respectively.
The American Jobs Creation Act of 2004 (AJCA) enacted on October 22, 2004 will allow companies to repatriate the
undistributed earnings of its foreign operations in fiscal 2006 at an effective rate of 5.25%. The Company is evaluating the impact of
the act on TJX.
TJX has a United Kingdom operating loss carryforward of approximately $2.4 million that may be applied against future
taxable income in the U.K., all of which has been recognized for financial reporting purposes. The U.K. net operating loss does not
expire under current tax law.
TJX’s worldwide effective income tax rate was 38.5% for fiscal 2005, 38.4% for fiscal 2004 and 38.3% for fiscal 2003. The
difference between the U.S. federal statutory income tax rate and TJX’s worldwide effective income tax rate is reconciled below:
Fiscal Year Ended
January 29, January 31, January 25,
2005 2004 2003
U.S. federal statutory income tax rate 35.0% 35.0% 35.0%
Effective state income tax rate 4.3 4.2 4.1
Impact of foreign operations (.4) (.6) (.3)
All other (.4) (.2) (.5)
Worldwide effective income tax rate 38.5% 38.4% 38.3%
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