TJ Maxx 2009 Annual Report Download - page 31

Our results may be materially adversely affected by the outcomes of litigation and other legal proceedings.
We are periodically involved in various legal proceedings, which may involve local state and federal government
inquiries and investigations; tax, employment, real estate, tort, consumer litigation and intellectual property litigation; or
other disputes. In addition, we may be subject to investigations and other proceedings by regulatory agencies, including,
but not limited to, consumer protection laws, advertising regulations, escheat and employment and wage and hour
regulations. Results of legal and regulatory proceedings cannot be predicted with certainty and may differ from reserves
we make estimating the probable outcome. Regardless of merit, litigation may be both time-consuming and disruptive
to our operations and cause significant expense and diversion of management attention. Legal and regulatory
proceedings and investigations could expose us to significant defense costs, fines, penalties and liability to private
parties and governmental entities for monetary recoveries and other amounts and attorneys’ fees and/or require us to
change aspects of our operations, any of which could have a material adverse effect on our business and results of
operations.
Our real estate leases generally obligate us for long periods, which subjects us to various financial risks.
We lease virtually all of our store locations, generally for long terms and either own or lease for long periods our
primary distribution centers and administrative offices. Accordingly, we are subject to the risks associated with owning
and leasing real estate. While we have the right to terminate some of our leases under specified conditions by making
specified payments, we may not be able to terminate a particular lease if or when we would like to do so. If we decide to
close stores, we may be required to continue to perform obligations under the applicable leases, which may include,
among other things, paying rent and operating expenses for the balance of the lease term, or paying to exercise rights to
terminate, and the performance of any of these obligations may be expensive. When we assign or sublease leases, we can
remain liable on the lease obligations if the assignee or sublessee does not perform. In addition, when leases expire, we
may be unable to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close
stores.
Our stock price may fluctuate based on market expectations.
The public trading of our stock is based in large part on market expectations that our business will continue to grow
and that we will achieve certain levels of net income. If the securities analysts that regularly follow our stock lower their
rating or lower their projections for future growth and financial performance, the market price of our stock is likely to
drop. In addition, if our quarterly financial performance does not meet the expectations of securities analysts, our stock
price would likely decline. The decrease in the stock price may be disproportionate to the shortfall in our financial
performance.
15