TJ Maxx 2014 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2014 TJ Maxx annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

Note G. Disclosures about Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date or “exit price.” The inputs used to measure fair
value are generally classified into the following hierarchy:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices
for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted
prices that are observable for the asset or liability
Level 3: Unobservable inputs for the asset or liability
The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring
basis:
Fiscal Year Ended
In thousands
January 31,
2015
February 1,
2014
February 2,
2013
(53 weeks)
Level 1
Assets:
Executive Savings Plan investments $151,936 $131,049 $101,903
Level 2
Assets:
Short-term investments $282,623 $294,702 $235,853
Foreign currency exchange contracts 39,419 19,482 5,980
Diesel fuel contracts —137 3,372
Liabilities:
Foreign currency exchange contracts $ 1,942 $ 6,107 $ 11,874
Diesel fuel contracts 15,324 ——
Investments designed to meet obligations under the Executive Savings Plan are invested in registered investment
companies traded in active markets and are recorded at unadjusted quoted prices.
Short-term investments, foreign currency exchange contracts and diesel fuel contracts are valued using broker
quotations which include observable market information. TJX’s investments are primarily high-grade commercial
paper, institutional money market funds and time deposits with major banks. TJX does not make adjustments to
quotes or prices obtained from brokers or pricing services but does assess the credit risk of counterparties and will
adjust final valuations when appropriate. Where independent pricing services provide fair values, TJX obtains an
understanding of the methods used in pricing. As such, these instruments are classified within Level 2.
The fair value of TJX’s general corporate debt was estimated by obtaining market quotes given the trading levels
of other bonds of the same general issuer type and market perceived credit quality. These inputs are considered to be
Level 2. The fair value of long-term debt at January 31, 2015 was $1.73 billion compared to a carrying value of $1.62
billion. The fair value of long-term debt at February 1, 2014 was $1.34 billion compared to a carrying value of $1.27
billion. The fair value of long-term debt at February 2, 2013 was $911.0 million compared to a carrying value of $774.6
million. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might
affect TJX’s ability to settle these obligations.
TJX’s cash equivalents are stated at cost, which approximates fair value, due to the short maturities of these
instruments.
Note H. Segment Information
TJX operates four main business segments. The Marmaxx segment (T.J. Maxx, Marshalls and tjmaxx.com) and
the HomeGoods segment both operate in the United States, the TJX Canada segment operates Winners,
HomeSense and Marshalls in Canada, and the TJX Europe segment operates T.K. Maxx, HomeSense and
tkmaxx.com in Europe. TJX also operates STP, an off-price Internet retailer in the U.S. that operates a small number
of stores. The results of STP are included in the Marmaxx segment.
F-17