TJ Maxx 2006 Annual Report Download - page 85

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TJX’s worldwide effective income tax rate was 37.7% for fiscal 2007, 31.6% for fiscal 2006 and 38.3% for fiscal 2005.
The difference between the U.S. federal statutory income tax rate and TJX’s worldwide effective income tax rate is
reconciled below:
January 27,
2007
January 28,
2006
January 29,
2005
Fiscal Year Ended
U.S. federal statutory income tax rate 35.0% 35.0% 35.0%
Effective state income tax rate 4.0 3.9 4.3
Impact of foreign operations (0.4) 0.5 (0.4)
Impact of repatriation of foreign earnings -(4.7) -
Impact of tax free currency gains on intercompany loans, including correction
of deferred tax liability (0.2) (2.1) -
All other (0.7) (1.0) (0.6)
Worldwide effective income tax rate 37.7% 31.6% 38.3%
J. Pension Plans and Other Retirement Benefits
Pension: TJX has a funded defined benefit retirement plan covering the majority of its full-time U.S. employees.
Employees who have attained twenty-one years of age and have completed one year of service are covered under the
plan. No employee contributions are required and benefits are based on compensation earned in each year of service.
New employees after February 1, 2006 do not participate in this plan but are eligible to receive enhanced employer
contributions to their 401(k) plans. This plan amendment did not have an impact on fiscal 2007 pension expense, but is
expected to result in savings in future years. Our funded defined benefit retirement plan assets are invested primarily in
stock and bonds of U.S. corporations excluding TJX, as well as various investment funds. We also have an unfunded
supplemental retirement plan which covers key employees of the Company and provides for certain employees
additional retirement benefits based on average compensation.
Presented below is financial information relating to TJX’s funded defined benefit retirement plan (funded plan)
and its unfunded supplemental pension plan (unfunded plan) for the fiscal years indicated. The valuation date for both
plans is as of December 31 prior to the fiscal year end date:
Dollars in Thousands
January 27,
2007
January 28,
2006
January 27,
2007
January 28,
2006
Funded Plan
Fiscal Year Ended
Unfunded Plan
Fiscal Year Ended
Change in projected benefit obligation:
Projected benefit obligation at beginning of year $407,235 $340,111 $55,870 $51,041
Service cost 37,528 33,616 1,043 1,015
Interest cost 21,982 19,756 2,929 2,883
Actuarial (gains) losses (38,471) 21,439 408 3,744
Liability transferred from Unfunded Plan -835 -(835)
Settlements - (6,131) -
Special termination benefits 664 -247 -
Benefits paid (9,565) (7,321) (1,257) (1,978)
Expenses paid (1,937) (1,201) --
Projected benefit obligation at end of year $417,436 $407,235 $53,109 $55,870
Accumulated benefit obligation at end of year $376,235 $366,501 $41,298 $37,122
F-23