TJ Maxx 2009 Annual Report Download - page 93

Stores, which was offset by a comparable amount due to favorable settlements on several A.J. Wright locations. The
majority of the reserve relates to lease obligations with respect to the closure of the A.J. Wright stores and the sale of Bob’s
Stores. The remainder of the reserve reflects our estimation of the cost of claims, updated quarterly, that have been, or we
believe are likely to be, made against us for liability as an original lessee or guarantor of the leases of former businesses,
after mitigation of the number and cost of these lease obligations. The actual net cost of the various lease obligations
included in the reserve may differ from our initial estimate. Although our actual costs with respect to the lease obligations
may exceed amounts estimated in our reserve, and we may incur costs for other leases from former discontinued
operations, we do not expect to incur any material costs related to these discontinued operations in excess of the amounts
estimated. We estimate that the majority of the discontinued operations reserve will be paid in the next three to five years.
The actual timing of cash outflows will vary depending on how the remaining lease obligations are actually settled.
TJX may also be contingently liable on up to 15 leases of BJ’s Wholesale Club, and on 7 additional Bob’s Stores
leases both former TJX businesses. Our reserve for discontinued operations does not reflect these leases, because we
currently believe that the likelihood of any future liability to TJX is not probable.
O. Guarantees and Contingent Obligations
TJX has contingent obligations on leases, for which it was a lessee or guarantor, which were assigned to third parties
without TJX being released by the landlords. Over many years, we have assigned numerous leases that we originally
leased or guaranteed to a significant number of third parties. With the exception of leases of former businesses for which
we have reserved, we have rarely had a claim with respect to assigned leases, and accordingly, we do not expect that such
leases will have a material adverse impact on our financial condition, results of operations or cash flows. We do not
generally have sufficient information about these leases to estimate our potential contingent obligations under them,
which could be triggered in the event that one or more of the current tenants does not fulfill their obligations related to
one or more of these leases.
TJX also has contingent obligations in connection with some assigned or sublet properties that TJX is able to
estimate. We estimate the undiscounted obligations (not reflected in our reserves) of leases of closed stores of continuing
operations, BJ’s Wholesale Club and Bob’s Stores leases (discussed in Note N) and properties of our discontinued
operations that we have sublet, if the subtenants did not fulfill their obligations, is approximately $94 million as of
January 30, 2010. We believe that most or all of these contingent obligations will not revert to TJX and, to the extent
they do, will be resolved for substantially less due to mitigating factors.
TJX is a party to various agreements under which we may be obligated to indemnify the other party with respect to
breach of warranty or losses related to such matters as title to assets sold, specified environmental matters or certain
income taxes. These obligations are typically limited in time and amount. There are no amounts reflected in our balance
sheets with respect to these contingent obligations.
P. Supplemental Cash Flows Information
The cash flows required to satisfy contingent obligations of the discontinued operations as discussed in Note N, are
classified as a reduction in cash provided by continuing operations. There are no remaining operating activities relating
to these operations.
F-30