TJ Maxx 2014 Annual Report Download - page 89

Note K. Long-Term Debt and Credit Lines
The table below presents long-term debt, exclusive of current installments, as of January 31, 2015 and
February 1, 2014. All amounts are net of unamortized debt discounts.
In thousands
January 31,
2015
February 1,
2014
General corporate debt:
4.20% senior unsecured notes, redeemed on July 8, 2014 (effective interest rate of
4.20% after reduction of unamortized debt discount of $8 in fiscal 2014) $—$ 399,992
6.95% senior unsecured notes, maturing April 15, 2019 (effective interest rate of
6.98% after reduction of unamortized debt discount of $294 and $364 in fiscal
2015 and 2014, respectively) 374,706 374,636
2.50% senior unsecured notes, maturing May 15, 2023 (effective interest rate of
2.51% after reduction of unamortized debt discount of $367 and $412 in fiscal
2015 and 2014, respectively) 499,633 499,588
2.75% senior unsecured notes, maturing June 15, 2021 (effective interest rate of
2.76% after reduction of unamortized debt discount of $475 in fiscal 2015) 749,525 —
Long-term debt $1,623,864 $1,274,216
The aggregate maturities of long-term debt, exclusive of current installments at January 31, 2015 are as follows:
In thousands
Long-Term
Debt
Fiscal Year
2017 $—
2018 —
2019 —
2020 375,000
Later years 1,250,000
Less amount representing unamortized debt discount (1,136)
Aggregate maturities of long-term debt $1,623,864
At January 31, 2015, TJX had outstanding $750 million aggregate principal amount of 2.75% seven-year notes,
due June 2021. TJX entered into rate-lock agreements to hedge the underlying treasury rate of all of the 2.75% notes
prior to their issuance. The agreements were accounted for as cash flow hedges and the pre-tax realized loss of $7.9
million was recorded as a component of other comprehensive income and is being amortized to interest expense
over the term of the notes, resulting in an effective fixed interest rate of 2.91%. On July 8, 2014 TJX used a portion of
the proceeds of the 2.75% seven-year notes to redeem the 4.20% notes and recorded a pre-tax loss on the early
extinguishment of debt of $16.8 million, which includes $16.4 million of redemption premium and $0.4 million to write
off unamortized debt expenses and discount.
At January 31, 2015, TJX also had outstanding $500 million aggregate principal amount of 2.50% ten-year notes
due May 2023 and $375 million aggregate principal amount of 6.95% ten-year notes due April 2019. TJX entered into
rate-lock agreements to hedge the underlying treasury rate of $250 million of the 2.50% notes and all of the 6.95%
notes. The costs of these agreements are being amortized to interest expense over the term of the respective notes,
resulting in an effective fixed interest rate of 2.57% for the 2.50% notes and 7.00% for the 6.95% notes.
At January 31, 2015, TJX had two $500 million revolving credit facilities, one which matures in June 2017 and one
which matures in May 2016. As of January 31, 2015 and February 1, 2014 and during the years then ended, there
were no amounts outstanding under these facilities. At January 31, 2015 the agreements require quarterly payments
on the unused committed amounts of 8.0 basis points for the agreement maturing in 2017 and 12.5 basis points for
the agreement maturing in 2016. These rates are based on the credit ratings of TJX’s long-term debt and would vary
with specified changes in the credit ratings. These agreements have no compensating balance requirements and
have various covenants. Each of these facilities requires TJX to maintain a ratio of funded debt and four-times
consolidated rentals to consolidated earnings before interest, taxes, consolidated rentals, depreciation and
amortization (“EBITDAR”) of not more that 2.75 to 1.00 on a rolling four-quarter basis. TJX was in compliance with all
covenants related to its credit facilities at the end of all periods presented.
F-27