TJ Maxx 2015 Annual Report Download - page 92

A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
Fiscal Year Ended
In thousands
January 30,
2016
January 31,
2015
February 1,
2014
Balance at beginning of year $ 55,619 $48,680 $148,777
Additions for uncertain tax positions taken in current year 2,248 4,771 4,212
Additions for uncertain tax positions taken in prior years 11,707 5,278 5,096
Reductions for uncertain tax positions taken in prior years (23,874) (2,747) (69,292)
Reductions resulting from lapse of statute of limitations (389) — (317)
Settlements with tax authorities (1,985) (363) (39,796)
Balance at end of year $ 43,326 $55,619 $ 48,680
Included in the gross amount of unrecognized tax benefits are items that will impact future effective tax rates
upon recognition. These items amounted to $39.0 million as of January 30, 2016, $34.8 million as of January 31, 2015
and $27.8 million as of February 1, 2014.
TJX is subject to U.S. federal income tax as well as income tax in multiple state, local and foreign jurisdictions. In
the U.S., fiscal years through 2010 are no longer subject to examination. In Canada, fiscal years through 2007 are no
longer subject to examination. In all other jurisdictions, fiscal years through 2009 are no longer subject to examination.
TJX follows the with and without approach for direct and indirect effects of windfall tax deductions. TJX’s
accounting policy is to classify interest and penalties related to income tax matters as part of income tax expense.
The amount of interest and penalties expensed was $1.6 million for the year ended January 30, 2016, $1.9 million for
the year ended January 31, 2015 and $4.0 million for the year ended February 1, 2014. The accrued amounts for
interest and penalties are $7.0 million as of January 30, 2016, $10.1 million as of January 31, 2015 and $8.1 million as
of February 1, 2014.
Based on the final resolution of tax examinations, judicial or administrative proceedings, changes in facts or law,
expirations of statute of limitations in specific jurisdictions or other resolutions of, or changes in, tax positions it is
reasonably possible that unrecognized tax benefits for certain tax positions taken on previously filed tax returns may
change materially from those represented on the financial statements as of January 30, 2016. During the next twelve
months, it is reasonably possible that state tax audit resolutions may reduce unrecognized tax benefits by $0 to $11
million, which would reduce the provision for taxes on earnings.
Note L. Commitments
TJX is committed under long-term leases related to its continuing operations for the rental of real estate and
fixtures and equipment. Most of TJX’s leases are store operating leases with ten-year terms and options to extend for
one or more five-year periods in the U.S. and Canada and ten to fifteen year terms in Europe, some of which have
options to extend. Many of the Company’s leases contain escalation clauses and we have the right to terminate some
of the leases before the expiration date under specified circumstances and some with specified payments. In
addition, TJX is generally required to pay insurance, real estate taxes and other operating expenses including, in some
cases, rentals based on a percentage of sales. These expenses in the aggregate were approximately one-third of the
total minimum rent in fiscal 2016, fiscal 2015 and fiscal 2014 and are not included in the table below.
The following is a schedule of future minimum lease payments for continuing operations as of January 30, 2016:
In thousands
Operating
Leases
Fiscal Year
2017 $1,368,050
2018 1,273,888
2019 1,150,172
2020 1,005,127
2021 845,910
Later years 2,354,674
Total future minimum lease payments $7,997,821
F-31