TJ Maxx 2001 Annual Report Download

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T H E T J X C O M P A N I E S , I N C .
17
Selected Financial Data (Continuing Operations)
D OL LA RS IN THO US ANDS F IS CAL YE AR EN DE D JA N U AR Y
EX CE PT PE R SH A RE A MOU NTS 2 0 0 2 2 0 0 1 2 0 0 0 1 9 9 9 1 9 9 8
( 53 we eks)
Income statement and per share data:
Net sales $10,708,998 $9,579,006 $8,795,347 $7,949,101 $7,389,069
Income from continuing operations
before extraordinary item
and cumulative effect of
accounting change $ 540,397 $ 538,066 $ 526,822 $ 433,202 $ 306,592
Weighted average common
shares for diluted earnings
per share calculation 278,133,862 289,196,228 317,790,764 334,647,950 349,612,184
Diluted earnings per share from
continuing operations before
extraordinary item and cumulative
effect of accounting change $1.94 $1.86 $1.66 $1.29 $.88
Cash dividends declared per share $ .18 $ .16 $ .14 $ .12 $.10
Balance sheet data:
Cash and cash equivalents $ 492,776 $ 132,535 $ 371,759 $ 461,244 $ 404,369
Working capital 800,916 537,185 532,017 663,902 648,918
Total assets 3,595,743 2,932,283 2,804,963 2,760,127 2,636,310
Capital expenditures 449,444 257,005 238,569 207,742 192,382
Long–term obligations(1) 702,379 319,372 319,367 220,344 221,024
Shareholders' equity 1,340,698 1,218,712 1,119,228 1,220,656 1,164,092
Other financial data:
After–tax return on average
shareholders' equity 42.2% 46.0% 45.0% 36.3% 26.8%
Total debt as a percentage
of total capitalization(2) 34.4% 22.7% 27.3% 15.3% 17.3%
Stores in operation at year end:
T.J. Maxx 687 661 632 604 580
Marshalls 582 535 505 475 461
Winners 131 117 100 87 76
T.K. Maxx 101 74 54 39 31
HomeGoods 112 81 51 35 23
A.J. Wright 45 25 15 6 –
HomeSense 7––––
Total 1,665 1,493 1,357 1,246 1,171
(1 ) Incl ude s lo n g –t e rm deb t a nd o b li g ati o n under capi tal lease.
( 2) To tal capi ta liz ati o n inc lu d es s har e ho l ders’ equi ty, sh ort–te rm de bt, long –t e r m de b t, cap it a l l ease ob l i g a ti on a n d cur r en t ma t u r i t i e s t h ere on .

Table of contents

  • Page 1
    ...cash equivalents Working capital Total assets Capital expenditures Long-term obligations (1) Shareholders' equity Other financial data: After-tax return on average shareholders' equity Total debt as a percentage of total capitalization (2) Stores in operation at year end: T.J. Maxx Marshalls Winners...

  • Page 2
    ... cumulative effect of accounting change Net income Weighted average common shares - basic Diluted earnings per share: Income from continuing operations before cumulative effect of accounting change Net income Weighted average common shares - diluted Cash dividends declared per share $10,708,998...

  • Page 3
    ...X C O M PA NI ES, IN C. Consolidated Balance Sheets I N T H O U S AN D S JANUAR Y 2 6, 2002 JANUAR Y 27, 2001 Assets Current assets: Cash and cash equivalents Accounts receivable, net Merchandise inventories Prepaid expenses and other current assets Current deferred income taxes, net Total current...

  • Page 4
    ... Principal payments on long-term debt Payments on short-term debt Payments on capital lease obligation Proceeds from sale and issuance of common stock, net Cash payments for repurchase of common stock Cash dividends paid Net cash (used in) financing activities Effect of exchange rate changes on cash...

  • Page 5
    ... loss on securities Total comprehensive income Cash dividends declared on common stock Common stock repurchased Issuance of common stock under stock incentive plans and related tax benefits Balance, January 27, 2001 Comprehensive income: Net income Cumulative effect of accounting change (SFAS No...

  • Page 6
    ... high-grade commercial paper, institutional money market funds and time deposits with major banks. The fair value of cash equivalents approximates carrying value. During September 1999, TJX received 693,537 common shares of Manulife Financial Corporation (Manulife). The shares reflected ownership...

  • Page 7
    ...result of TJX's acquisition of the Marshalls chain in fiscal 1996. The value of the tradename was determined by the discounted present value of assumed after-tax royalty payments, offset by a reduction for its pro-rata share of the total negative goodwill acquired. The final purchase price allocated...

  • Page 8
    ... method, TJX defers recognition of a layaway sale and its related profit to the accounting period when the customer receives layaway merchandise. The cumulative effect of this change for periods prior to January 31, 1999 of $5.2 million (net of income taxes of $3.4 million), or $.02 per share, was...

  • Page 9
    ...at any time on or after February 13, 2007 for the original purchase price plus accrued original issue discount. TJX used the proceeds to fund its accelerated store roll-out program, investment in its distribution center network, its common stock repurchase program and for general corporate purposes.

  • Page 10
    ... terms which include financial covenants requiring that TJX maintain specified fixed charge coverage and leverage ratios. The Company's ability to borrow under the agreements is not limited by its debt rating level. The revolving credit facilities are used as backup to TJX's commercial paper program...

  • Page 11
    ... terms ranging up to twenty-five years. Leases for T.K. Maxx are generally for fifteen to twenty-five years with ten-year kick-out options. Many of the leases contain escalation clauses and early termination penalties. In addition, TJX is generally required to pay insurance, real estate taxes...

  • Page 12
    ... 38,000 shares reserved under the former Directors' Stock Option Plan at January 27, 2001. Under these stock option plans, TJX has granted options for the purchase of common stock, generally within ten years from the grant date at option prices of 100% of market price on the grant date. Most options...

  • Page 13
    ... weighted average market value per share of these stock awards at grant/earned date was $30.00, $29.60 and $29.55 for fiscal 2002, 2001 and 2000, respectively. TJX maintains a deferred stock compensation plan for its outside directors. Deferred share awards valued at $10,000 are issued annually to...

  • Page 14
    ... Y EAR E NDE D JANUAR Y 27, 2001 JANUAR Y 29, 2000 Basic earnings per share: Income from continuing operations before cumulative effect of accounting change Weighted average common stock outstanding for basic earnings per share calculation Basic earnings per share Diluted earnings per share: Income...

  • Page 15
    ... other Worldwide effective income tax rate I. PENSION PLANS AND OT HER RET IREME NT BENEFITS 35.0% 3.8 (.4) (.2) 38.2% 35.0% 4.0 (1.0) (.2) 37.8% 35.0% 4.2 (1.0) .1 38.3% TJX has a non-contributory defined benefit retirement plan covering the majority of its full-time U.S. employees. Employees...

  • Page 16
    ...of service. TJX's funded defined benefit retirement plan assets are invested primarily in stock and bonds of U.S. corporations, excluding TJX stock, as well as various investment funds. Presented below is financial information relating to TJX's funded defined benefit retirement plan and its unfunded...

  • Page 17
    ... 29, 2000, TJX and an executive officer entered into an agreement whereby the officer waived his right to benefits under TJX's unfunded supplemental retirement plan in exchange for TJX's funding of a split-dollar life insurance policy. The exchange was accounted for as a settlement and TJX incurred...

  • Page 18
    ...costs were charged to operations while the costs associated with Marshalls were a component of the allocation of the purchase price. This reserve also includes activity relating to the closing of three T.K. Maxx stores in the Netherlands as well as several HomeGoods stores. Following is a summary of...

  • Page 19
    ... financial condition, operating results or cash flows. On August 20, 2001, Ames Department Stores, Inc. filed a voluntary petition for relief under Chapter 11 of the Federal Bankruptcy Code and is reorganizing. In 1988, TJX completed the sale of its former Zayre Stores division to Ames. Ames emerged...

  • Page 20
    ...T INFORMATION The T.J. Maxx and Marshalls store chains are managed on a combined basis and are reported as the Marmaxx segment. The Winners chain, including HomeSense, operates exclusively in Canada, and T.K. Maxx operates in Europe, primarily the United Kingdom. Winners and T.K. Maxx accounted for...

  • Page 21
    ... Income from continuing operations before income taxes and cumulative effect of accounting change Identifiable assets: Marmaxx Winners(1) T.K. Maxx HomeGoods A.J. Wright Corporate (primarily cash, goodwill and deferred taxes) Capital expenditures: Marmaxx Winners(1) T.K. Maxx HomeGoods A.J. Wright...

  • Page 22
    ... the same terms and conditions as the credit facilities they replaced. On April 10, 2002, TJX approved a two-for-one stock split to be distributed on May 8, 2002 to shareholders of record on April 25, 2002. The stock split will require retroactive restatement of all historical per share data in...

  • Page 23
    ...Board of Directors who are neither officers nor employees of TJX, meets periodically with management, internal auditors and the independent public accountants to review matters relating to TJX's financial reporting, the adequacy of internal accounting controls and the scope and results of audit work...

  • Page 24
    ... of our increased investment in our distribution network. The increase in this ratio in fiscal 2001 is primarily due to the slower sales growth in that year, distribution center capacity issues and an increase in our freight costs. Due to our liquid inventory position at all divisions at the end...

  • Page 25
    ... with the September 11 attacks, primarily for benefits to the families of our associates lost in the tragedy. Selling, general and administrative expenses for fiscal 2001 include a pre-tax charge of $6.3 million for the estimated cost of closing T.K. Maxx stores operated in the Netherlands. The...

  • Page 26
    ...in the United Kingdom and Ireland, recorded a same store sales increase of 5% in local currency in fiscal 2002, on top of an 8% increase in the prior year. The operating income for fiscal 2001 includes costs of closing the Netherlands stores and the operating loss of the stores, all of which totaled...

  • Page 27
    ... T.J. Maxx closing costs were charged to operations while the costs associated with Marshalls were a component of the allocation of the purchase price. This reserve also includes activity relating to the closing of the T.K. Maxx stores in the Netherlands as well as several HomeGoods stores. STORE CL...

  • Page 28
    ... financial condition, operating results or cash flows. On August 20, 2001, Ames Department Stores, Inc. filed a voluntary petition for relief under Chapter 11 of the Federal Bankruptcy Code and is reorganizing. In 1988, we completed the sale of our former Zayre Stores division to Ames. Ames emerged...

  • Page 29
    ... exercise this option, we expect to fund the payment with cash, financing from our short-term credit facility, new long-term borrowings or a combination thereof. We used the proceeds for our accelerated store roll-out program, investment in our distribution center network, general corporate purposes...

  • Page 30
    ...stock option exercises also provided tax benefits of $30.6 million in fiscal 2002, $15.9 million in fiscal 2001 and $11.7 million in fiscal 2000, which are included in cash provided by operating activities. On April 10, 2002 our Board of Directors approved a two-for-one stock split to be distributed...

  • Page 31
    ... the Marshalls tradename, which has an indefinite life, but will periodically test them for impairment. This will increase annual net income by approximately $5 million, or $.02 per share. In July 2001, the FASB issued SFAS No. 143, "Accounting for Obligations Associated with the Retirement of Long...

  • Page 32
    ... future changes make it clear that any projected results expressed or implied therein will not be realized. Price Range of Common Stock 48 TJX's common stock is listed on the New York Stock Exchange (Symbol: TJX). The quarterly high and low trading stock prices for fiscal 2002 and fiscal 2001 are...

  • Page 33
    ... Vice President and Chief Financial Officer, American Express Company Gail Deegan Executive in Residence, Simmons School of Management Babson College Edmond J. English President and Chief Executive Officer, The TJX Companies, Inc. Dennis F. Hightower Retired Business Executive Richard Lesser Senior...

  • Page 34
    ... Edmond J. English Chairman Carol Meyrowitz President EXECUT IVE VICE PRES IDENT S Arnold S. Barron Chief Operating Officer Ernie Herrman Merchandising David J. Weiner Finance and Distribution Services SE NIOR VICE PRESIDEN TS Douglas Benjamin Inventory Management Robert Garofalo Store Operations...

  • Page 35
    ...Alex Smith Chairman Paul Sweetenham President EXECUTIVE VICE PRESIDENTS Michael MacMillan Finance, Systems and Distribution S ENIOR VICE PR ESIDENTS Heather Arts Merchandising Connie McCulloch Merchandising, HomeSense Russ Schaller Store Operations VICE PRESIDENT S Gordon Bullock Store Operations...

  • Page 36
    ... Locations Alabama Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New...