TJX COMPANIES INC /DE/
UNRESOLVED STAFF COMMENTS          None
PROPERTIES          We lease virtually all of our store locations, generally for 10 years with an option to extend the lease for one or more 5-year periods. We have the right to terminate some of these leases before the expiration date under specified circumstances and for specified payments.         The following is a summary of our primary distribution centers and administration office locations as of January 28, 2006. Square footage information for the distribution centers represents total “ground cover” of the facility. Square footage information for office space represents total space occupied:   Distribution Centers                       T.J. Maxx         Worcester, Massachusetts        (500,000 s.f. - owned)            Evansville, Indiana        (983,000 s.f. - owned)            Las Vegas, Nevada        (713,000 s.f. shared with Marshalls - owned)            Charlotte, North Carolina        (600,000 s.f. - owned)            Pittston Township, Pennsylvania        (1,017,000 s.f. - owned)         Marshalls         Decatur, Georgia        (780,000 s.f. - owned)            Woburn, Massachusetts        (474,000 s.f. - leased)            Bridgewater, Virginia        (672,000 s.f. - leased)            Philadelphia, Pennsylvania        (998,000 s.f. - leased)         Winners and HomeSense         Brampton, Ontario        (506,000 s.f. - leased)            Mississauga, Ontario        (667,000 s.f. - leased)         HomeGoods         Brownsburg, Indiana        (805,000 s.f. - owned)            Bloomfield, Connecticut        (443,000 s.f. - owned)         T.K. Maxx         Milton Keynes, England        (108,000 s.f. - leased)            Wakefield, England        (176,000 s.f. - leased)            Stoke, England        (261,000 s.f. - leased)            Walsall, England        (275,000 s.f. - leased)         A.J. Wright         Fall River, Massachusetts        (501,000 s.f. - owned)            South Bend, Indiana        (542,000 s.f. - owned)         Bob’s Stores         Meriden, Connecticut        (200,000 s.f. - leased)    10    Table of Contents  Office Space                       TJX, T.J. Maxx, Marshalls, HomeGoods, A.J. Wright         Framingham and Westboro, Massachusetts        (1,324,000 s.f. - leased in several buildings)         Bob’s Stores         Meriden, Connecticut        (34,000 s.f. - leased)         Winners and HomeSense         Mississauga, Ontario        (138,000 s.f. - leased)         T.K. Maxx         Watford, England        (61,000 s.f. - leased)           The table below indicates the approximate average store size as well as the gross square footage of stores and distribution centers, by division, as of January 28, 2006:                                           Total Square Feet           (In Thousands)                   Average       Distribution       Store Size   Stores   Centers             T.J. Maxx      30,000       23,754       3,813           Marshalls      32,000       22,663       2,924           Winners(1)      30,000       5,155       1,173           HomeSense(2)      24,000       1,406       -           HomeGoods(3)      25,000       6,223       1,248           T.K. Maxx      30,000       5,871       820           A.J. Wright      26,000       3,910       1,043           Bob’s Stores      46,000       1,593       200                                   Total              70,575       11,221                                   (1)       Distribution centers currently service both Winners and     HomeSense stores.   (2)       A HomeSense stand-alone store averages 25,000 square     feet, while the HomeSense portion of a superstore format     averages 23,000 square feet.   (3)       A HomeGoods stand-alone store averages 27,000 square     feet, while the HomeGoods portion of a superstore format     averages 22,000 square feet.
LEGAL PROCEEDINGS          None.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS          There was no matter submitted to a vote of TJX’s security holders during the fourth quarter of fiscal 2006.  11    Table of Contents
MARKET FOR THE REGISTRANT’S COMMON STOCK AND RELATED     SECURITY HOLDER MATTERS, ISSUER REPURCHASES OF EQUITY SECURITIES    Price Range of Common Stock         TJX’s common stock is listed on the New York Stock Exchange (Symbol: TJX). The quarterly high and low trading stock prices for fiscal 2006 and fiscal 2005 are as follows:                                             Fiscal 2006   Fiscal 2005               Quarter   High   Low   High   Low             First    $ 25.96     $ 22.51     $ 26.12     $ 22.51           Second    $ 25.10     $ 22.30     $ 26.82     $ 21.53           Third    $ 23.60     $ 19.95     $ 24.05     $ 20.64           Fourth    $ 25.48     $ 21.17     $ 25.50     $ 23.36             The approximate number of common shareholders at January 28, 2006 was 88,000.         TJX declared four quarterly dividends of $.06 per share for fiscal 2006 and $.045 per share for fiscal 2005.   Information on Share Repurchases         The number of shares of common stock repurchased by TJX during the fourth quarter of fiscal 2006 and the average price paid per share is as follows:                                                           Maximum Number                   (or Approximate               Total Number of   Dollar Value)               Shares Purchased   of Shares that               as Part of Publicly   May Yet be       Number of Shares   Average Price   Announced Plan or   Purchased Under       Repurchased   Paid Per Share   Program   Plans or Programs             October 30, 2005 through November 26, 2005      195,600     $ 22.23       195,600     $ 1,074,345,283           November 27, 2005 through December 31, 2005      2,246,700     $ 22.81       2,246,700     $ 1,023,108,321           January 1, 2006 through January 28, 2006      1,199,800     $ 24.73       1,199,800     $ 993,431,458                                         Total:      3,642,100               3,642,100                                                 In January 2006 we completed our $1 billion share repurchase program announced in May 2004, and on October 11, 2005 we announced a new repurchase program to repurchase up to $1 billion of TJX common stock from time to time. As of January 28, 2006 we had repurchased 268,298 shares at a cost of $6.6 million under the new $1 billion share repurchase program.  13    Table of Contents
SELECTED FINANCIAL DATA    Selected Financial Data (Continuing Operations)                                                       Fiscal Year Ended January(1)           Amounts In Thousands   2006   2005   2004   2003   2002   Except Per Share Amounts                           (53 weeks)                         Income statement and per share data:                                                    Net sales    $ 16,057,935     $ 14,913,483     $ 13,327,938     $ 11,981,207     $ 10,708,998             Income from continuing operations    $ 690,423     $ 609,699     $ 609,412     $ 538,662     $ 512,598             Weighted average common shares for diluted earnings per share     calculation      491,500       509,661       531,301       554,858       574,566             Diluted earnings per share from continuing operations    $ 1.41     $ 1.21     $ 1.16     $ .98     $ .91             Cash dividends declared per share    $ .24     $ .18     $ .14     $ .12     $ .09           Balance sheet data:                                                    Cash and cash equivalents    $ 465,649     $ 307,187     $ 246,403     $ 492,330     $ 492,776             Working capital      888,276       701,008       761,228       730,795       857,316             Total assets      5,496,305       5,075,473       4,396,767       3,951,569       3,628,774             Capital expenditures      495,948       429,133       409,037       396,724       449,444             Long-term obligations     (2)      807,150       598,540       692,321       693,764       702,379             Shareholders’ equity      1,892,654       1,746,556       1,627,053       1,462,196       1,373,729           Other financial data:                                                    After-tax return on average shareholders’ equity      37.9 %     36.2 %     39.5 %     38.0 %     39.2 %           Total debt as a percentage of total     capitalization(3)      29.9 %     28.6 %     30.0 %     32.7 %     33.9 %         Stores in operation at year-end:                                                    T.J. Maxx      799       771       745       713       687             Marshalls      715       697       673       629       582             Winners      174       168       160       146       131             T.K. Maxx      197       170       147       123       101             HomeGoods      251       216       182       142       112             A.J. Wright      152       130       99       75       45             HomeSense      58       40       25       15       7             Bob’s Stores      35       32       31       -       -                                             Total      2,381       2,224       2,062       1,843       1,665                                             Selling Square Footage at year-end:                                                    T.J. Maxx      18,781       18,033       17,385       16,646       15,993             Marshalls      18,206       17,511       16,716       15,625       14,475             Winners      4,012       3,811       3,576       3,261       2,885             T.K. Maxx      4,216       3,491       2,841       2,282       1,852             HomeGoods      4,859       4,159       3,548       2,830       2,279             A.J. Wright      3,054       2,606       1,967       1,498       916             HomeSense      1,100       747       468       282       120             Bob’s Stores      1,276       1,166       1,124       -       -                                             Total      55,504       51,524       47,625       42,424       38,520                                               (1)       Fiscal years ended January 29, 2005 and prior have been     adjusted to reflect the effect of adopting Statement of     Financial Accounting Standards No. 123(R). See Note A     to the consolidated financial statements at “Adoption of     New Accounting Pronouncements.”   (2)       Includes long-term debt, exclusive of current installments and     obligation under capital lease, less portion due within one year.   (3)       Total capitalization includes shareholders’ equity,     short-term debt, long-term debt and capital lease obligation,     including current maturities.   14    Table of Contents          ITEM 7.      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION     AND RESULTS OF OPERATIONS          The following discussion contains forward-looking information and should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including those discussed in Item 1A of this report under the section entitled “Risk Factors.”         The discussion that follows relates to our fiscal years ended January 28, 2006 (fiscal 2006), January 29, 2005 (fiscal 2005) and January 31, 2004 (fiscal 2004).         In the fourth quarter of fiscal 2006 TJX elected to early adopt the provisions of Statement of Financial Accounting Standards No. 123(R) (SFAS No. 123(R)), “Share-Based Payment.” This standard requires that the fair value of all stock based awards be reflected in the financial statements based on the fair value of the award. TJX has elected the modified retrospective transition method and accordingly, all prior periods have been adjusted to reflect the impact of this standard in those periods, based on the pro forma amounts as disclosed in the notes to our financial statements.   RESULTS OF OPERATIONS   Fiscal 2006 Overview:         —      Net sales for fiscal 2006 were $16.1 billion, an 8%     increase over fiscal 2005.   —      Consolidated same store sales increased 2% in fiscal 2006 over     the prior year, with approximately     1/2      percentage point of this increase coming from the     favorable effect of currency exchange rates on our Winners and     T.K. Maxx businesses.   —      We increased our number of stores by 7% in fiscal 2006, ending     the fiscal year with 2,381 stores in operation. Our selling     square footage grew by 8% in fiscal 2006.   —      Net income for fiscal 2006 was $690.4 million, or     $1.41 per share, compared to $609.7 million, or     $1.21 per share, last year. Both of these years include     certain items that affect the comparability of reported results.     The chart below shows the effect of these items on net income     and earnings per share.                                                  Fiscal 2006   Fiscal 2005               Dollars In Millions Except Per Share Amounts   $’s   EPS   $’s   EPS             Net income as reported    $ 690     $ 1.41     $ 610     $ 1.21             Adjusted for:                                              Cumulative lease accounting charge      -       -       19       .04               Impact of deferred tax liability correction      (22 )     (.04 )     -       -               Repatriation income tax benefit      (47 )     (.10 )     -       -               Third quarter events     *      12       .02       -       -                                           Net income as adjusted    $ 633     $ 1.29     $ 629     $ 1.25                                            *       The third quarter events include the cost of executive     resignation agreements,     e-commerce exit costs     and operating losses, and hurricane related costs including the     estimated impact of lost sales, partially offset by a gain from     a VISA/MasterCard antitrust litigation settlement.                       We believe this presentation reflects our results on a more     comparable basis, and is useful in understanding the underlying     trends in our business.          —      Our pre-tax margin (the ratio of pre-tax income to net sales)     declined from 6.6% in fiscal 2005 to 6.3% in fiscal 2006. The     decline was primarily due to the de-levering impact of low     single digit same store sales on our expense ratios.   —      Fourth quarter results for fiscal 2006 were stronger than     earlier quarters, with same store sales that increased 3% and     pre-tax margins that grew from 6.1% last year to 7.5% this year.     Approximately one-half of the pre-tax margin improvement was due     to increased gross profit margins and expense leverage during     the quarter, with the balance due to the impact on last     year’s results of a one-time charge related to lease     accounting. We believe that changes initiated in the third     quarter of fiscal 2006 to improve execution of our off-price     strategies, particularly off-price buying, contributed to our     strong fourth quarter results.   15   Table of Contents       —      We continued to generate strong cash flows from operations which     allowed us to fund our stock repurchase program as well as our     capital investment needs. During fiscal 2006, we repurchased     25.9 million of our shares at a cost of $600 million,     which favorably affected our earnings per share.   —      Average per store inventories, including inventory on hand at     our distribution centers, were down 11% at the end of fiscal     2006 as compared to the prior year end period. This decline is     largely due to lower levels of inventory in our distribution     centers.          The following is a summary of the operating results of TJX at the consolidated level. This discussion is followed by an overview of operating results by segment. All references to earnings per share are diluted earnings per share unless otherwise indicated. All prior periods have been adjusted to reflect the adoption of SFAS No. 123(R). See Note A to our consolidated financial statements.         Net sales: Net sales for fiscal 2006 totaled $16.1 billion, an 8% increase over net sales of $14.9 billion in fiscal 2005. Net sales for fiscal 2005 increased 12% over sales of $13.3 billion for fiscal 2004. Our reporting period for fiscal 2004 included 53 weeks compared to 52 weeks in both fiscal 2006 and fiscal 2005, which added incremental sales of approximately $200 million in fiscal 2004.         The 8% increase in net sales for fiscal 2006 includes a 6% increase attributable to new stores and a 2% increase in same store sales. The 12% increase in net sales for fiscal 2005 over fiscal 2004 reflects approximately 6% from new stores, 5% from same store sales growth and 2% from the acquisition of Bob’s Stores, partially offset by approximately a 1% reduction to the growth rate due to fiscal 2005 having one less week than fiscal 2004. Bob’s Stores was acquired on December 24, 2003 and our sales results for fiscal 2004 include Bob’s Stores from the date of acquisition as compared to a full year for fiscal 2005 and fiscal 2006.         New stores are a major source of sales growth. Our consolidated store count increased by 7.1% in fiscal 2006 and 7.8% in fiscal 2005 over the respective prior year period. Our selling square footage increased by 7.7% in fiscal 2006 and 8.2% in fiscal 2005. We expect to add 105 stores (net of store closings) in the fiscal year ending January 27, 2007 (fiscal 2007), a 4% projected increase in our consolidated store base, and we expect to increase our selling square footage base by 5%.         Same store sales for fiscal 2006 were driven by strong demand for jewelry, accessories, and footwear, which continued to generate significant increases on top of very strong results last year, as well as improved demand for men’s apparel. The positive impact of growth in these categories was partially offset by same store sales declines in home fashions and women’s sportswear. Marmaxx continued its program of expanding certain departments in its stores and ended the year with 594 T.J. Maxx stores with expanded jewelry/ accessories departments and 146 Marshalls stores with expanded footwear departments. These stores had same store sales growth which exceeded Marmaxx’s chain average. In the United States, where TJX generates approximately 80% of its sales, same store sales were strong in warm weather regions, particularly Florida, the Southwest and California, while flat to slightly negative in the Midwest and Northeast. Same store sales growth was positively impacted by foreign currency exchange rates, which contributed approximately 1/2  a percentage point of growth.         Net sales for fiscal 2005 reflected strong demand for jewelry and accessories, women’s apparel and footwear, partially offset by weaker demand for men’s apparel and home fashions. The 5% growth in consolidated same store sales for fiscal 2005 over the prior year was driven by a 4% same store sales increase at Marmaxx, our largest division. Marmaxx ended the year with 303 T.J. Maxx stores with expanded jewelry/ accessories departments and 67 Marshalls stores with expanded footwear departments which were significant factors in Marmaxx achieving a 4% same store sales increase in fiscal 2005. Same store sales growth in fiscal 2005 benefited by approximately 11/2  percentage points from foreign currency exchange rates.         We define same store sales to be sales of those stores that have been in operation for all or a portion of two consecutive fiscal years, or in other words, stores that are starting their third fiscal year of operation. We classify a store as a new store until it meets the same store criteria. We determine which stores are included in the same store sales calculation at the beginning of a fiscal year and the classification remains constant throughout that year, unless a store is closed. We calculate same store sales results by comparing the current and prior year on a comparable 52 week basis. Relocated stores and stores that are increased in size are generally classified in the same way as the original store and we  16   Table of Contents  believe the impact of these stores on the same store percentage is immaterial. Consolidated and divisional same store sales are calculated in U.S. dollars. We also show divisional same store sales in local currency for our foreign divisions, because this removes the effect of changes in currency exchange rates, and we believe it is a more appropriate measure of their operating performance.         The following table sets forth our consolidated operating results as a percentage of net sales:                                     Fiscal Year Ended January               2006   2005   2004           (53 weeks)         Net sales      100.0 %     100.0 %     100.0 %                               Cost of sales, including buying and occupancy costs      76.6       76.4       75.8           Selling, general and administrative expenses      16.9       16.8       16.6           Interest expense, net      .2       .2       .2                                 Income before provision for income taxes      6.3 %     6.6 %     7.4 %                                 Cost of sales, including buying and occupancy costs: Cost of sales, including buying and occupancy costs, as a percentage of net sales was 76.6% in fiscal 2006, 76.4% in fiscal 2005 and 75.8% in fiscal 2004. This ratio for fiscal 2006, as compared to fiscal 2005, reflects an improvement in our consolidated merchandise margin of .5%. The improvement in merchandise margin was largely due to lower markdowns at our smaller divisions, partially offset by an increase in fuel related freight costs. In addition, the comparison to the fiscal 2005 expense ratio was favorably impacted by a $30.7 million non-cash charge ($19.3 million after-tax) in fiscal 2005 to conform our lease accounting practices to generally accepted accounting principles. See Note A to the consolidated financial statements under the caption “Lease Accounting”. This charge was included in cost of sales in fiscal 2005 and increased last year’s expense ratio by .2%. These improvements in the fiscal 2006 expense ratio were more than offset by increases in operating costs as a percentage of net sales, primarily occupancy costs, which reflect the de-levering impact of a 2% same store sales growth as well as higher cost of sales ratios at divisions other than Marmaxx, which represent a greater proportion of the consolidated results in fiscal 2006 compared to fiscal 2005.         Cost of sales, including buying and occupancy costs, as a percentage of net sales for fiscal 2005 as compared with fiscal 2004 reflects consolidated merchandise margins that were essentially flat to the prior year. Throughout fiscal 2005, the Marmaxx division effectively executed its merchandising and inventory management strategies, maintaining a liquid inventory position and buying close to need, all of which led to improved merchandise margin at this division. However, this improved merchandise margin at Marmaxx in fiscal 2005 was offset by reduced merchandise margin at our other divisions, most of which experienced higher markdowns. The increase in this ratio in fiscal 2005 includes a .2% increase due to the lease accounting charge. This ratio in fiscal 2005, as compared to fiscal 2004, also reflects an increase of approximately .2% due to the absence of the 53rd week in fiscal 2005 as the sales volume from the extra week helped lever certain fixed costs in fiscal 2004. The balance of the increase in the ratio in fiscal 2005 is primarily due to higher cost of sales ratios at divisions other than Marmaxx, which represent a greater proportion of the consolidated results in fiscal 2005 as compared to fiscal 2004.         Selling, general and administrative expenses: Selling, general and administrative expenses as a percentage of net sales were 16.9% in fiscal 2006, 16.8% in fiscal 2005 and 16.6% in fiscal 2004. The increase in fiscal 2006 over the prior year is due to an increase in store payroll costs as a percentage of net sales, reflecting the de-levering impact of the low single digit same store sales increase. The increase in this ratio was also negatively impacted by the net impact of third quarter events including the cost of the executive resignation agreements, e-commerce exit and hurricane related costs, offset in part by the VISA/Mastercard antitrust litigation settlement. The increase in this ratio in fiscal 2005 was primarily due to a .1% increase in advertising costs as a percentage of sales as a result of the inclusion of Bob’s Stores for a full fiscal year in our consolidated results. Bob’s Stores operates with a higher advertising cost ratio than our off-price divisions. In addition, the fiscal 2005 expense ratio compared to fiscal 2004 reflects an increase in stock based compensation. TJX has taken various actions to reduce selling, general and administrative expenses in fiscal 2007 designed to improve profit margins. TJX also revised its approach to long-term compensation in fiscal 2006 by substantially decreasing the number  17    Table of Contents  of stock options issued and increasing the long-term cash incentive award opportunities, which is designed to help control the long-term portion of compensation costs going forward.         Interest expense, net: Interest expense, net of interest income, was $29.6 million in fiscal 2006, $25.8 million in fiscal 2005, and $27.3 million in fiscal 2004. Interest income was $9.4 million in fiscal 2006, $7.7 million in fiscal 2005 and $6.5 million in fiscal 2004. The increase in net interest expense in fiscal 2006 is due to higher short-term borrowings and interest rates. The higher borrowing levels were primarily driven by the timing of inventory purchases, capital expenditures and repurchase of the Company’s common stock. The additional interest expense from short-term borrowings was partially offset by reduced interest costs due to the repayment of $100 million of 7% unsecured notes in June 2005, as well as an increase in interest income due to higher interest rates. The reduction in net interest expense in fiscal 2005 as compared to fiscal 2004 is primarily due to an increase in interest income in fiscal 2005.         Income taxes: Our effective annual income tax rate was 31.6% in fiscal 2006, 38.3% in fiscal 2005 and 38.2% in fiscal 2004. The tax provision for fiscal 2006 includes a fourth quarter benefit of $47 million due to the repatriation of earnings from our Canadian subsidiary. In addition, during the fourth quarter of fiscal 2006, we corrected our accounting for the tax impact of foreign currency gains on certain intercompany loans. We had previously established a deferred tax liability on these gains which are not taxable. The impact of correcting for the tax treatment of these gains results in a tax benefit of $22 million, or $.04 per share in fiscal 2006. The cumulative impact of this adjustment through the end of the third quarter of fiscal 2006 was $18.2 million, all of which was recorded in the fourth quarter of fiscal 2006. Of the $18.2 million, $10.1 million related to fiscal 2005. These two items collectively reduced the fiscal 2006 effective income tax rate by 6.8%. See Note H to the consolidated financial statements. The increase in the effective income tax rate in fiscal 2005 as compared to fiscal 2004 was primarily due to increases in state income tax rates.         Net income: Net income was $690.4 million in fiscal 2006, $609.7 million in fiscal 2005 and $609.4 million in fiscal 2004. Net income per share was $1.41 in fiscal 2006, $1.21 in fiscal 2005 and $1.16 in fiscal 2004.         Net income for fiscal 2006 was favorably impacted by a tax benefit of $47 million, or $.10 per share, due to the repatriation of foreign earnings as well as a tax benefit of $22 million, or $.04 per share, relating to the correction of a previously established deferred tax liability. Net income for fiscal 2006 was adversely impacted by approximately $12 million, or $.02 per share, due to the third quarter events. These third quarter events included the after-tax cost of executive resignation agreements, primarily with respect to our former CEO ($5 million), e-commerce exit costs and third quarter operating losses ($6 million), and uninsured losses due to hurricanes in the third quarter, including the estimated impact of lost sales ($6 million), all of which were partially offset by a gain from a VISA/MasterCard antitrust litigation settlement ($5 million). Operating losses of the e-commerce operation in the first six months of fiscal 2006 were largely offset by fiscal 2005 start up costs and a fourth quarter operating loss in fiscal 2005.         Net income for fiscal 2005 was reduced by $19.3 million, or $.04 per share, as a result of the after-tax effect of the $30.7 million cumulative pre-tax, non-cash charge associated with our lease accounting practices. In fiscal 2004, we estimate that the 53rd week added approximately $24 million to net income and $.05 to our earnings per share. Lastly, favorable changes in currency exchange rates during fiscal 2005 and fiscal 2004 added approximately $.02 to our earnings per share in each year.         The change in earnings per share from year to year was favorably impacted by our share repurchase program. During fiscal 2006 we repurchased 25.9 million shares of our stock at a cost of $600 million and in fiscal 2005 we repurchased 25.1 million shares at a cost of $588 million. We plan to continue our share repurchase program in fiscal 2007 with planned purchases of approximately $650 million.  18    Table of Contents        Trends improved in the fourth quarter, with significant increases in net income and earnings per share compared to the prior year. Reported net income was $288.7 million, up 75% over the prior year, and earnings per share was $.60, up 82% over the prior year. Results for both of these years include certain items that affect the comparability of reported results. The chart below shows the effect of these items on fourth quarter net income and earnings per share:                                                 Fourth Quarter   Fourth Quarter       Fiscal 2006   Fiscal 2005               Dollars In Millions Except Per Share Amounts   $’s   EPS   $’s   EPS             Net income as reported    $ 289     $ .60     $ 165     $ .33             Adjusted for:                                              Cumulative lease accounting charge      -       -       19       .04               Impact of deferred tax liability correction      (22 )     (.04 )     -       -               Repatriation income tax benefit      (47 )     (.10 )     -       -                                       Net income as adjusted    $ 220     $ .46     $ 184     $ .37                                         Excluding these one-time items, fourth quarter net income was $220 million, up 19% and earnings per share was $.46, up 24%. Results were driven by same store sales growth of 3% as well as by decreases in cost of sales, including buying and occupancy costs and selling, general and administrative expenses as a percent of net sales. The reduction in the cost of sales ratio was due to improved merchandise margins, with reduced levels of markdowns at our Winners, HomeGoods and A.J. Wright divisions being the major factors. The reduction in the selling, general and administrative expense ratio was due to a decrease in store payroll and other store costs as a percentage of net sales.         Segment information: The following is a discussion of the operating results of our business segments. We consider each of our operating divisions to be a segment. We evaluate the performance of our segments based on “segment profit or loss,” which we define as pre-tax income before general corporate expense and interest expense, net. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities. In addition, this measure of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of our performance or as a measure of liquidity. More detailed information about our segments, including a reconciliation of “segment profit or loss” to “income before provision for income taxes” can be found in Note N to the consolidated financial statements.         Segment profit or loss for fiscal 2005 includes each segment’s share of the cumulative pre-tax charge relating to lease accounting. See Note A to the consolidated financial statements under the caption “Lease Accounting.” Also, segment profit for the current year and all prior periods include the effect of the adoption of SFAS No. 123(R).         Segment profit for fiscal 2006 was positively impacted by the strong fourth quarter, in which every division increased its segment profit, or decreased its segment loss, compared to the fourth quarter of the prior year.   MARMAXX:                                     Fiscal Year Ended January           Dollars In Millions   2006   2005   2004           (53 weeks)         Net sales    $ 10,956.8     $ 10,489.5     $ 9,937.2           Segment profit    $ 985.4     $ 982.1     $ 922.9           Segment profit as % of net sales      9.0 %     9.4 %     9.3 %         Percent increase (decrease) in same store sales      2 %     4 %     (1 )%         Stores in operation at end of period      1,514       1,468       1,418           Selling square footage at end of period (in thousands)      36,987       35,544       34,101             Marmaxx posted a 2% same store sales increase in fiscal 2006, compared to a 4% increase in same store sales for fiscal 2005. Same store sales growth in fiscal 2006 was driven by strong sales in the jewelry, accessories and footwear categories, while same store sales for home fashions and women’s sportswear were below the chain average. Same store sales in fiscal 2005 also reflected strong sales in the jewelry, accessories and footwear categories as well as women’s sportswear. Same store sales in both years benefited from the continuation of the Marmaxx program whereby certain  19    Table of Contents  departments in the T.J. Maxx and Marshalls stores were expanded. Marmaxx ended fiscal 2006 with 594 T.J. Maxx stores with expanded jewelry and accessories departments and 146 Marshalls stores with expanded footwear departments as compared to 303 T.J. Maxx stores with expanded jewelry and accessories departments and 67 Marshalls stores with expanded footwear departments at the end of fiscal 2005. These initiatives were significant factors in Marmaxx’s overall same store sales results, particularly in fiscal 2005 when sales in the stores with the expanded departments were above the chain average. Geographically in fiscal 2006, Florida, the Southwest and the West Coast all performed above the chain average, while the Northeast and the Midwest performed below the chain average.         Segment profit as a percentage of net sales (“segment margin”) decreased to 9.0% in fiscal 2006 from 9.4% in fiscal 2005. The decline in the fiscal 2006 segment margin was largely driven by the de-levering impact of a 2% same store sales increase, which impacted operating expense ratios, primarily occupancy costs (which increased .3% as a percentage of sales) and distribution center costs (which increased .1% as a percentage of sales). In addition, the certain third quarter events described earlier (e-commerce and hurricane related losses offset in part by the gain from the VISA/ MasterCard settlement) reduced segment margin in fiscal 2006 by .1%. The comparison to the fiscal 2005 margin is favorably impacted by the inclusion in last year’s segment profit of a $16.8 million charge for the cumulative impact of the lease accounting adjustment, which reduced fiscal 2005 segment profit margin by .2%. Merchandise margin for fiscal 2006 was essentially flat compared to fiscal 2005 despite fuel related increases in freight costs. As of January 28, 2006, average inventories per store were down 10% compared to the prior year primarily due to reduced inventory levels on hand at the distribution centers.         Segment margin increased in fiscal 2005 compared to fiscal 2004 despite the impact of the lease accounting charge described above. In fiscal 2005, Marmaxx executed its merchandising and inventory strategies effectively, which led to strong markon and improved merchandise margins which increased .4%. Marmaxx also effectively managed expenses in fiscal 2005. These improvements in segment profit margin were partially offset by an increase in occupancy costs of .3% as a percentage of sales, .2% of which represents the impact of the lease accounting charge. Segment profit and segment profit margin for fiscal 2005 as compared to fiscal 2004 are also impacted by the benefit of the 53rd week in the fiscal 2004 reporting period. The 53rd week in fiscal 2004 had an estimated favorable impact of .2% on the segment profit margin for that year, as the sales volume from this extra week helped to lever certain fixed costs.         We added a net of 46 new stores (T.J. Maxx or Marshalls) in fiscal 2006 and increased total selling square footage of the division by 4%. We expect to open 50 new stores (net of closings) in fiscal 2007, increasing the Marmaxx store base by 3% and increasing its selling square footage by 4%. We plan to add approximately 99 expanded jewelry and accessories departments in existing and new T.J. Maxx stores and to add approximately 130 expanded footwear departments in existing and new Marshalls stores.   WINNERS AND HOMESENSE:                                       Fiscal Year Ended January           U.S. Dollars In Millions   2006   2005   2004           (53 weeks)         Net sales    $ 1,457.7     $ 1,285.4     $ 1,076.3           Segment profit    $ 120.3     $ 99.7     $ 98.9           Segment profit as % of net sales      8.3 %     7.8 %     9.2 %         Percent increase (decrease) in same store sales                                    U.S. currency      4 %     10 %     19 %           Local currency      (3 )%     4 %     4 %         Stores in operation at end of period                                    Winners      174       168       160             HomeSense      58       40       25           Selling square footage at end of period (in thousands)                                    Winners      4,012       3,811       3,576             HomeSense      1,100       747       468             Net sales for Winners and HomeSense, our Canadian businesses, for fiscal 2006 increased by 13% over fiscal 2005, with approximately half of this growth due to currency exchange rates. Same store sales (in local currency) decreased by 3% in fiscal 2006 and increased by 4% in fiscal 2005. Same store sales for fiscal 2006 were adversely impacted by a decline  20    Table of Contents  in the average unit selling price. Same store sales were also impacted by lower clearance sales volume, primarily in the second half of the year, as Winners’ per-store inventories were significantly below the prior year due to improved inventory management. At the end of fiscal 2006, average per-store inventories were down 6% compared to the prior year. Same store sales were also negatively impacted by declines in the women’s sportswear and home fashion categories.         Segment profit margin improved by .5% compared to fiscal 2005. This improvement was primarily due to a 2.9% increase in merchandise margins which were driven by improved inventory management resulting in reduced clearance sales and lower markdowns. The increase in merchandise margin was partially offset by the de-levering impact of the 3% decline in same store sales. Expense ratios increased across most categories, with a 1.4% increase in occupancy and distribution costs being the most significant. Incremental costs associated with three store closings in fiscal 2006 also impacted segment profit. The comparison of segment profit and segment margin for fiscal 2006 to fiscal 2005 is also favorably impacted by the inclusion in the fiscal 2005 segment profit of a $3.5 million charge for this division’s share of the cumulative impact of the lease accounting adjustment.         The growth in Winners segment profit in fiscal 2005 over fiscal 2004 was due to favorable currency exchange rates. The segment profit margin for fiscal 2005 of 7.8% was 1.4% below fiscal 2004, primarily due to lower merchandise margins, which decreased .9% from the prior year, primarily driven by markdowns. Sales in the second half of fiscal 2005 slowed considerably from the first half, due to unseasonable weather and a promotional retail environment. This, combined with Winners’ aggressive buying based on the strength of its first-half sales, resulted in excess inventories, requiring the division to take aggressive markdowns to clear merchandise in the second half of the year, negatively impacting segment profit margin. The lease accounting charge reduced segment profit margin by .2% in fiscal 2005.         The change in segment profit margin for both fiscal 2006 and fiscal 2005 was negatively impacted by the growth of the Company’s HomeSense business, which is at an earlier stage of development than the core Winners business and therefore operates with higher expense ratios.         We added a net of 6 Winners stores and 18 HomeSense stores in fiscal 2006, and expanded selling square footage in Canada by 12%. We expect to add a net of 11 Winners and 10 HomeSense stores in fiscal 2007, increasing our total Canadian store base by 9%, and increasing selling square footage by 8%. The store counts include the Winners portion and HomeSense portion of this division’s superstores which either combine a Winners store with a HomeSense store or operates them side-by-side. As of January 28, 2006, we operated 22 of these superstores and expect to have a total of 29 superstores at the end of fiscal 2007.   T.K. MAXX:                                       Fiscal Year Ended January           U.S. Dollars In Millions   2006   2005   2004           (53 weeks)         Net sales    $ 1,517.1     $ 1,304.4     $ 992.2           Segment profit    $ 69.2     $ 64.0     $ 53.7           Segment profit as % of net sales      4.6 %     4.9 %     5.4 %         Percent increase (decrease) in same store sales                                    U.S. currency      (1 )%     14 %     16 %           Local currency      1 %     3 %     6 %         Stores in operation at end of period      197       170       147           Selling square footage at end of period (in thousands)      4,216       3,491       2,841             Net sales in fiscal 2006 for T.K. Maxx, operating in the United Kingdom and Ireland, increased by 16% over fiscal 2005. T.K. Maxx had a same store sales increase of 1% (in local currency) in fiscal 2006 on top of a 3% increase in fiscal 2005. T.K. Maxx’s same store sales in fiscal 2006 were negatively impacted by a weak retail environment in the United Kingdom, as well as unseasonably warm weather early in the year. Women’s sportswear and footwear categories were below the chain average, while sales of home fashions were strong.         Segment profit margin declined .3% to 4.6% of sales. T.K. Maxx had an improved merchandise margin in fiscal 2006, primarily due to lower markdowns. In addition, the comparison of segment profit and segment margin for fiscal 2006 to fiscal 2005 is favorably impacted by the inclusion in the fiscal 2005 segment profit of this division’s share of the  21    Table of Contents  cumulative impact of the lease accounting adjustment of $6.5 million. These improvements however, were more than offset by an increase in occupancy expense due to higher cost for rent, utilities and property taxes as well as the de-levering impact of a 1% same store sales increase. Distribution and administrative costs as a percentage of net sales were essentially flat compared to fiscal 2005, despite the low same store sales increase.         T.K. Maxx’s operating results for fiscal 2005 were adversely affected by unseasonable weather patterns in the first half of the year and a highly promotional retail environment in the latter half of the year. In light of the retail environment under which T.K. Maxx operated in fiscal 2005, this division was effective in managing inventories and expenses to minimize the impact on segment profit margins. Segment profit and segment margin for fiscal 2005 include a $6.5 million charge for T.K. Maxx’s share of the cumulative impact of the lease accounting adjustment. The significant growth in T.K. Maxx’s segment profit in fiscal 2005 is attributable to the increase in sales as well as the favorable benefit of foreign currency exchange rates. The segment profit margin in fiscal 2005 decreased .5% to 4.9%, primarily due to an increase in occupancy costs of .7% as a percentage of sales, of which .5% was attributable to the cumulative lease accounting charge.         We added 27 new T.K. Maxx stores in fiscal 2006 and increased the division’s selling square footage by 21%. We plan to open an additional 15 T.K. Maxx stores in fiscal 2007, and expand selling square footage by 10%.   HOMEGOODS:                                     Fiscal Year Ended January           Dollars In Millions   2006   2005   2004           (53 weeks)         Net sales    $ 1,186.9     $ 1,012.9     $ 876.5           Segment profit    $ 28.4     $ 18.1     $ 45.4           Segment profit as % of net sales      2.4 %     1.8 %     5.2 %         Percent increase in same store sales      1 %     1 %     1 %         Stores in operation at end of period      251       216       182           Selling square footage at end of period (in thousands)      4,859       4,159       3,548             HomeGoods’ same store sales grew 1% in both fiscal 2006 and fiscal 2005. Customer transactions and unit sales increased at HomeGoods during fiscal 2006 compared to fiscal 2005, but these increases were partially offset by a decline in the average ticket resulting from planned changes to the merchandise mix. Segment profit increased to $28.4 million from $18.1 million and segment profit margin increased to 2.4% of sales from 1.8% of sales in the prior year. The increase in segment profit margin resulted primarily from an increase in merchandise margin (lower markdowns partially offset by the impact of higher freight costs), as well as the impact on prior year results of the cumulative lease accounting charge of $2.2 million. HomeGoods fourth quarter same store sales and operating results were particularly strong. The strength of HomeGoods fourth quarter more than offset unfavorable factors to segment profit and margin for fiscal 2006, including the de-levering impact of the 1% same store sales increase, e-commerce operating loss of $3.7 million and approximately $2 million of costs related to the planned closing of a distribution center.         Segment profit in fiscal 2005 declined to $18.1 million from $45.4 million in the prior year. The business was adversely affected by weaker retail demand for home fashion product as well as an unfavorable merchandise mix, which led to a 1% same store sales increase. The business also took additional markdowns, which led to a reduction in its merchandise margin. The decline in segment profit margin from 5.2% in fiscal 2004 to 1.8% in fiscal 2005 is primarily due to this reduction in merchandise margin. Segment profit in fiscal 2005 also included a charge for $2.2 million for HomeGoods’ share of the cumulative impact of the lease accounting adjustment. Segment profit margin was also impacted by increases in occupancy costs and distribution center costs as a percentage of net sales. These expense ratio increases reflect the de-levering impact on expense ratios of a 1% same store sales increase.         We opened a net of 35 HomeGoods stores in fiscal 2006, a 16% increase, and increased selling square footage of the division by 17%. In fiscal 2007, we plan to add a net of 10 HomeGoods stores (15 new less 5 closings) and increase selling square footage by 5%, reflecting our plan to slow the pace of store openings for this division.  22   Table of Contents  A.J. WRIGHT:                                     Fiscal Year Ended January           Dollars In Millions   2006   2005   2004           (53 weeks)         Net sales    $ 651.0     $ 530.6     $ 421.6           Segment (loss)    $ (2.2 )   $ (19.6 )   $ (2.1 )         Segment (loss) as % of net sales      (0.3 )%     (3.7 )%     (0.5 )%         Percent increase in same store sales      3 %     4 %     8 %         Stores in operation at end of period      152       130       99           Selling square footage at end of period (in thousands)      3,054       2,606       1,967             A.J. Wright’s same store sales increased 3% for fiscal 2006 compared to a 4% increase in same store sales for fiscal 2005. A.J. Wright’s segment loss for fiscal 2006 was narrowed to $2.2 million from $19.6 million in fiscal 2005. This improvement was driven by improved merchandise margin, primarily the result of lower markdowns in fiscal 2006. The comparison to fiscal 2005 is also impacted by the inclusion of a $1.7 million charge in fiscal 2005 for its share of the lease accounting adjustment. In fiscal 2006, effective expense control also led to a reduction in expenses as a percentage of sales across most expense categories, primarily in advertising and store payroll and benefits. We reduced the number of our new store openings for A.J. Wright in fiscal 2006 as we believe that the pace of store openings in fiscal 2005 may have been too aggressive for this young division, placing a strain on operations.         A.J. Wright’s segment loss grew to $19.6 million in fiscal 2005 from $2.1 million in fiscal 2004. We believe that the A.J. Wright customer is more sensitive to economic factors, such as higher energy costs, and that such factors along with a weaker demand in urban fashion trends impacted sales in fiscal 2005. These sales trends caused us to take higher markdowns to clear inventories and to reposition our merchandise mix. Segment profit margin for fiscal 2005 reflected a reduction in merchandise margins of 1.2%, primarily due to this higher markdown activity. In addition, the lower-than- planned sales volume for fiscal 2005 negatively impacted expense ratios for occupancy costs, distribution center costs and store payroll. Distribution center costs were also impacted by expense increases relating to A.J. Wright’s new distribution facility in Indiana. Segment loss for fiscal 2005 also included a $1.7 million charge for A.J. Wright’s share of the cumulative impact of the lease accounting adjustment.         We added 22 new A.J. Wright stores in fiscal 2006, increasing selling square footage by 17%. In fiscal 2007, we plan to add a net of 8 new stores (10 new stores less 2 closings) and increase selling square footage by 5%, reflecting our plan to slow the pace of new store openings.   BOB’S STORES:                             Fiscal Year Ended       January           Dollars In Millions   2006   2005             Net sales    $ 288.5     $ 290.6           Segment (loss)    $ (28.0 )   $ (18.5 )         Segment (loss) as % of net sales      (9.7 )%     (6.4 )%         Stores in operation at end of period      35       32           Selling square footage at end of period (in thousands)      1,276       1,166             Fiscal 2005 was the first full fiscal year for Bob’s Stores as a TJX division. Bob’s Stores operated 35 stores as of the end of fiscal 2006. Net sales for fiscal 2006 were less than the prior year, primarily due to a reduction in the number of promotional advertising circulars. Although merchandise margin improved in fiscal 2006 (due to lower promotional markdowns), the sales decline and incremental operating costs resulted in an increased segment loss for fiscal 2006 as compared to fiscal 2005. Segment loss in fiscal 2006 also includes severance costs of $0.8 million in connection with a reduction in the work force at Bob’s Stores. For fiscal 2007, we plan to open 1 Bob’s store. We are in the process of implementing new strategies for Bob’s with the goal of reducing its segment loss in fiscal 2007.  23   Table of Contents  GENERAL CORPORATE EXPENSE:                                     Fiscal Year Ended January           Dollars In Millions   2006   2005   2004           (53 weeks)         General corporate expense    $ 134.1     $ 111.1     $ 99.7             General corporate expense for segment reporting purposes are those costs not specifically related to the operations of our business segments. This item includes the costs of the corporate office, including the compensation and benefits (including stock based compensation) for senior corporate management; payroll and operating costs of the corporate departments of accounting and budgeting, internal audit, treasury, investor relations, tax, risk management, legal, human resources and systems; and the occupancy and office maintenance costs associated with the corporate staff. In addition, general corporate expense includes the cost of benefits for existing retirees and non-operating costs and other gains and losses not attributable to individual divisions. General corporate expense is included in selling, general and administrative expenses in the consolidated statements of income.         The increase in general corporate expense in fiscal 2006 over fiscal 2005 is primarily due to the costs associated with executive resignation agreements ($9 million) and of exiting the e-commerce business of ($6 million). Both of these items occurred in our third quarter period ended October 29, 2005. In addition, general corporate expense includes a charge ($4 million) in connection with an idle leased facility.         The increase in general corporate expense in fiscal 2005 over the prior year reflects the change in net foreign exchange gains and losses, the majority of which relates to derivative contracts that hedge foreign currency exposures on intercompany activity. In addition, general corporate expense for fiscal 2005 reflects an increase in general corporate overhead, incremental audit fees and costs related to the start-up of our e-commerce businesses. This increase was offset in part by a $6.3 million reduction in contributions to The TJX Foundation in fiscal 2005, compared to fiscal 2004.   LIQUIDITY AND CAPITAL RESOURCES   Operating activities:         Net cash provided by operating activities was $1,158.0 million in fiscal 2006, $1,076.8 million in fiscal 2005, and $767.9 million in fiscal 2004. The cash generated from operating activities in each of these fiscal years was largely due to operating earnings. Net income adjusted for non-cash items was essentially the same in each year. The difference in net cash provided from operating activities from year to year was largely driven by the change in inventory, net of accounts payable, from prior year-end levels. In fiscal 2006 this change in net inventory position resulted in a source of cash of $26.2 million compared to a use of cash of $85.3 million in fiscal 2005 and $191.8 million in fiscal 2004. This trend is largely explained by our average per store inventory levels at each year-end period. Average per store inventories at January 28, 2006, including inventory on hand at our distribution centers, decreased 11% compared to the prior year and at January 29, 2005 they increased 1% compared to the prior year. This compares to inventories per store at January 31, 2004 that were up 11% compared to the prior year. Effective with the third quarter ended October 30, 2004, we began to accrue for inventory obligations at the time inventory is shipped rather than when received and accepted by TJX. This accrual increased inventory by $341 million as of January 28, 2006 and by $237 million as of January 29, 2005 along with a comparable increase to our accounts payable, and thus had no impact on cash flows from operations.         The cash flows from operating activities for both fiscal 2006 and fiscal 2005 were also impacted by increases in accrued expenses and other liabilities in each year. Accrued expenses and other liabilities increased in each year in part due to higher liabilities for rent, gift cards and payroll and benefits. In addition, fiscal 2005 was impacted by an increase in deferred landlord allowances. Cash flows from operating activities were reduced by contributions to our qualified pension fund of $40 million in fiscal 2006, $25.0 million in fiscal 2005 and $17.5 million in fiscal 2004. All of the contributions to the pension fund in fiscal 2006, 2005 and 2004 were made on a voluntary basis.         Discontinued operations reserve: We have a reserve for potential future obligations of discontinued operations that relates primarily to real estate leases of former TJX businesses. The reserve reflects TJX’s estimation of its cost for claims, updated quarterly, that have been, or are likely to be, made against TJX for liability as an original lessee or guarantor of  24   Table of Contents  the leases of these businesses, after mitigation of the number and cost of lease obligations. At January 28, 2006, substantially all leases of discontinued operations that were rejected in bankruptcy and for which the landlords asserted liability against TJX had been resolved. Although TJX’s actual costs with respect to any of these leases may exceed amounts estimated in our reserve, and TJX may incur costs for leases from these discontinued operations that were not terminated or had not expired, TJX does not expect to incur any material costs related to discontinued operations in excess of the reserve. The reserve balance amounted to $15.0 million as of January 28, 2006, $12.4 million as of January 29, 2005 and $17.5 million as of January 31, 2004. During fiscal 2006, TJX received creditor recoveries of $8.5 million, offset by equivalent additions to the reserve to reflect adjustments to the reserve during the year. Any additional creditor recoveries are expected to be immaterial.         We may also be contingently liable on up to 18 leases of BJ’s Wholesale Club, another former TJX business, for which BJ’s Wholesale Club is primarily liable. Our reserve for discontinued operations does not reflect these leases, because we believe that the likelihood of any future liability to TJX with respect to these leases is remote due to the current financial condition of BJ’s Wholesale Club.         Off-balance sheet liabilities: We have contingent obligations on leases, for which we were 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 our discontinued operations discussed above, 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 effect 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.         We also have contingent obligations in connection with some assigned or sublet properties that we are 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 leases discussed above, and properties of our discontinued operations that we have sublet, if the subtenants did not fulfill their obligations, is approximately $100 million as of January 28, 2006. 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.         We are 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.   Investing activities:   Our cash flows for investing activities include capital expenditures for the last two years as set forth in the table below:                             Fiscal Year Ended       January           In Millions   2006   2005             New stores    $ 171.9     $ 162.6           Store renovations and improvements      267.1       193.7           Office and distribution centers      56.9       72.8                           Capital expenditures    $ 495.9     $ 429.1                             We expect that capital expenditures will approximate $395 million for fiscal 2007. This includes $115 million for new stores, $226 million for store renovations, expansions and improvements and $54 million for our office and distribution centers. The planned decrease in capital expenditures is attributable to fewer new store openings, primarily at HomeGoods, A.J. Wright and T.K. Maxx, as well as lower capital spending across most other areas of our business.  25    Table of Contents  Financing activities:         Cash flows from financing activities resulted in net cash outflows of $503.7 million in fiscal 2006, $584.6 million in fiscal 2005, and $544.3 million in fiscal 2004. The majority of this outflow relates to our share repurchase program.         We spent $603.7 million in fiscal 2006, $594.6 million in fiscal 2005, and $520.7 million in fiscal 2004 under our stock repurchase programs. We repurchased 25.9 million shares in fiscal 2006, 25.1 million shares in fiscal 2005, and 26.8 million shares in fiscal 2004. All shares repurchased were retired. During fiscal 2006, we completed a $1 billion stock repurchase program and announced our intention to repurchase an additional $1 billion of common stock. Under the new $1 billion stock repurchase program, we repurchased 0.3 million shares at a total cost of $6.6 million through January 28, 2006.         In January 2006, Winners entered into a C$235 million (US$204.4) non-revolving term credit facility, due in January 2009 and guaranteed by TJX. Interest is payable at rates equal to, or less than the Canadian prime rate. Winners entered into an interest rate swap agreement which effectively establishes a fixed rate of approximately 4.5% on this debt. The proceeds were used to fund the repatriation of Winners earnings to TJX as well as other general corporate purposes of this division. Financing activities also included scheduled principal payments on long-term debt of $100 million in fiscal 2006, $5 million in fiscal 2005, and $15 million in fiscal 2004.         We declared quarterly dividends on our common stock which totaled $.24 per share in fiscal 2006, $.18 per share in fiscal 2005, and $.14 per share in fiscal 2004. Cash payments for dividends on our common stock totaled $105.3 million in fiscal 2006, $83.4 million in fiscal 2005, and $68.9 million in fiscal 2004. Financing activities also include proceeds of $102.4 million in fiscal 2006, $96.9 million in fiscal 2005, and $59.2 million in fiscal 2004 from the exercise of employee stock options.         We traditionally have funded our seasonal merchandise requirements through cash generated from operations, short-term bank borrowings and the issuance of short-term commercial paper. In May 2005, we entered into a $500 million four-year revolving credit facility and a $500 million five-year revolving credit facility. These arrangements replaced our $370 million five-year revolving credit facility entered into in March 2002 and our $330 million 364-day revolving credit facility, which had been extended through July 15, 2005. The new agreements have no compensating balance requirements and have various covenants including a requirement of a specified ratio of debt to earnings. These agreements serve as back up to our commercial paper program. As of January 28, 2006 there were no outstanding amounts under our credit facilities. The maximum amount of our U.S. short-term borrowings outstanding was $567 million during fiscal 2006, $5 million during fiscal 2005 and $27 million during fiscal 2004. The weighted average interest rate on our U.S. short-term borrowings was 3.69% in fiscal 2006, 2.04% in fiscal 2005 and 1.09% in fiscal 2004.         As of January 28, 2006, Winners had credit lines totaling C$20 million, C$10 million to meet certain operating needs and C$10 million letter of credit facility. There were credit lines totaling C$20 million at both January 29, 2005 and January 31, 2004, respectively. The maximum amount outstanding under our Canadian credit lines was C$4.6 million in fiscal 2006, C$6.8 million in fiscal 2005, and C$5.6 million in fiscal 2004. As of January 28, 2006, T.K. Maxx had a £2 million credit line to meet certain operating needs. The maximum amount outstanding in fiscal 2006 was £1.7 million on this line. There were no outstanding borrowings on either of these credit lines as of January 28, 2006.         We believe that our current credit facilities are more than adequate to meet our operating needs. See Note C to the consolidated financial statements for further information regarding our long-term debt and available financing sources.  26    Table of Contents        Contractual obligations: As of January 28, 2006, we had payment obligations (including current installments) under long-term debt arrangements, leases for property and equipment and purchase obligations that will require cash outflows as follows (in thousands):                                                         Payments Due by Year                       Less Than   1-3   3-5   More Than       Total   1 Year   Years   Years   5 Years         Long-Term Contractual Obligations                                                  Long-term debt obligations     including estimated interest    $ 884,710     $ 24,231     $ 644,590     $ 215,889     $ -           Operating lease commitments      5,035,904       766,622       1,413,553       1,147,319       1,708,410           Capital lease obligations      37,849       3,726       7,452       7,452       19,219           Purchase obligations      1,552,622       1,520,647       26,852       4,963       160                                           $ 7,511,085     $ 2,315,226     $ 2,092,447     $ 1,375,623     $ 1,727,789                                         The long-term debt obligations above includes estimated interest costs and assumes that all holders of the zero coupon convertible subordinated notes exercise their put option in fiscal 2008. The note holders also have a put option available to them in fiscal 2014. If none of the put options are exercised and the notes are not redeemed or converted, the notes will mature in fiscal 2022. The effect of the interest rate swap agreements was estimated based on their values as of January 28, 2006.         The lease commitments in the above table are for minimum rent and do not include costs for insurance, real estate taxes and common area maintenance costs that we are obligated to pay. These costs were approximately one-third of the total minimum rent for the fiscal year ended January 28, 2006.         Our purchase obligations consist of purchase orders for merchandise; purchase orders for capital expenditures, supplies and other operating needs; commitments under contracts for maintenance needs and other services; and commitments under executive employment agreements. We excluded long-term agreements for services and operating needs that can be cancelled without penalty.         We also have long-term liabilities which includes $138.7 million for employee compensation and benefits, most of which will come due beyond five years, derivative contracts of approximately $100 million, the majority of which comes due in fiscal 2010 and $133.2 million for accrued rent, the cash flow requirements of which are included in the lease commitments in the above table.   CRITICAL ACCOUNTING POLICIES         TJX must evaluate and select applicable accounting policies. We consider our most critical accounting policies, involving management estimates and judgments, to be those relating to inventory valuation, retirement obligations, casualty insurance, and accounting for taxes. We believe that we have selected the most appropriate assumptions in each of the following areas and that the results we would have obtained, had alternative assumptions been selected, would not be materially different from the results we have reported.         Inventory valuation: We use the retail method for valuing inventory on a first-in first-out basis. Under the retail method, the cost value of inventory and gross margins are determined by calculating a cost-to-retail ratio and applying it to the retail value of inventory. This method is widely used in the retail industry and involves management estimates with regard to such things as markdowns and inventory shrinkage. A significant factor involves the recording and timing of permanent markdowns. Under the retail method, permanent markdowns are reflected in the inventory valuation when the price of an item is changed. We believe the retail method results in a more conservative inventory valuation than other accounting methods. In addition, as a normal business practice, we have a very specific policy as to when markdowns are to be taken, greatly reducing the need for management estimates. Inventory shortage involves estimating a shrinkage rate for interim periods, but is based on a full physical inventory at fiscal year end. Thus, the difference between actual and estimated amounts may cause fluctuations in quarterly results, but is not a factor in full year results. Overall, we believe that the retail method, coupled with our disciplined permanent markdown policy and a full physical inventory taken at each fiscal year end, results in an inventory valuation that is fairly stated. Lastly, many retailers have arrangements with vendors that provide for rebates and allowances under certain conditions, which ultimately affect the  27    Table of Contents  value of the inventory. Our off-price businesses have historically not entered into such arrangements with our vendors. Bob’s Stores, the value-oriented retailer we acquired in December 2003, does have vendor relationships that provide for recovery of advertising dollars if certain conditions are met. These arrangements do have some impact on Bob’s inventory valuation but such amounts are immaterial to our consolidated results.         Retirement obligations: Retirement costs are accrued over the service life of an employee and represent in the aggregate obligations that will ultimately be settled far in the future and are therefore subject to estimates. We are required to make assumptions regarding variables, such as the discount rate for valuing pension obligations and the long-term rate of return assumed to be earned on pension assets, both of which impact the net periodic pension cost for the period. The discount rate, which we determine annually based on market interest rates, has dropped over the past several years and our actual returns on pension assets for fiscal 2006 and for several years prior to fiscal 2004 were considerably less than our expected returns. These two factors can have a considerable impact on the annual cost of retirement benefits and in recent years have had an unfavorable effect on the funded status of our qualified pension plan. We have made contributions of $82.5 million, which exceeded the minimum required, over the last three years to largely restore the funded status of our plan.         Casualty insurance: TJX’s casualty insurance program requires TJX to estimate the total claims it will incur as a component of its annual insurance cost. The estimated claims are developed, with the assistance of an actuary, based on historical experience and other factors. These estimates involve significant estimates and assumptions and actual results could differ from these estimates. If TJX’s estimate for the claims component of its casualty insurance expense for fiscal 2006 were to change by 10%, the fiscal 2006 pre-tax cost would increase or decrease by approximately $5.5 million. A large portion of these claims are funded with a non-refundable payment during the policy year, offsetting our estimated claims accrual. The company has a net accrual of $34.7 million for the unfunded portion of its casualty insurance program as of January 28, 2006.         Accounting for taxes: Like many large corporations, we are regularly under audit by the United States federal, state, local or foreign tax authorities in the areas of income taxes and the remittance of sales and use taxes. In evaluating the potential exposure associated with the various tax filing positions, we accrue charges for possible exposures. Based on the annual evaluations of tax positions, we believe we have appropriately filed our tax returns and accrued for possible exposures. To the extent we were to prevail in matters for which accruals have been established or be required to pay amounts in excess of reserves, our effective tax rate in a given financial period might be materially impacted. The Internal Revenue Service has examined the fiscal years ended January 2000 through January 2003 and several proposed adjustments are under appeal. We also have various state and foreign tax examinations in process.   RECENT ACCOUNTING PRONOUNCEMENTS         In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment” (SFAS No. 123R) which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the financial statements based on the estimated fair value of the awards on the grant date (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award or the requisite service period (usually the vesting period). TJX adopted this standard in the fourth quarter of fiscal 2006 and elected the modified retrospective transition method. Accordingly all prior periods have been adjusted to reflect the impact of SFAS No. 123R in amounts equal to the pro forma results presented in the notes to consolidated financial statements.         In November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) by requiring these items to be recognized as current-period charges. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application permitted. We do not believe the adoption of this Statement will have any material impact on our financial statements.         In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets,” an amendment of APB Opinion No. 29. This Statement addresses the measurement of exchanges of nonmonetary assets. It eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21(b) of  28    Table of Contents  APB 29 and replaces it with an exception for exchanges that do not have commercial substance. We adopted SFAS No. 153 in the second quarter of fiscal 2006 which did not have a material impact on our financial statements.         In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” a replacement of APB Opinion No. 20, and FASB Statement No. 3. SFAS No. 154 changes the requirements for accounting and reporting a change in accounting principle. The Statement requires retrospective application of a voluntary change in accounting principle to prior period financial statements rather than recording the cumulative effect of the change in net earnings in the current period. SFAS No. 154 also strictly defines the term “restatement” to mean the correction of an error by revising previously issued financial statements. SFAS No. 154 is effective for fiscal years beginning after December 15, 2005 (fiscal 2007 for TJX). We do not expect the adoption of SFAS No. 154 to have a material effect on our results of operations, financial condition or cash flows.         In June 2005, the EITF reached a consensus on Issue No. 05-06, “Determining the Amortization Period for Leasehold Improvements” (“EITF 05-06”). EITF 05-06 provides guidance for determining the amortization period used for leasehold improvements acquired in a business combination or purchased after the inception of a lease, collectively referred to as subsequently acquired leasehold improvements. EITF 05-06 provides that the amortization period used for the subsequently acquired leasehold improvements to be the lesser of (a) the subsequently acquired leasehold improvements’ useful lives, or (b) a period that reflects renewals that are reasonably assured upon the acquisition or the purchase. EITF 05-06 is effective on a prospective basis for subsequently acquired leasehold improvements purchased or acquired in periods beginning after the date of the FASB’s ratification, which was on June 29, 2005. The adoption of EITF 05-06 did not have a material impact on our results of operations or financial condition.         Financial Accounting Standards Board Interpretation No. 47 (FIN 47), “Accounting for Conditional Asset Retirement Obligations (an interpretation of FASB Statement No. 143)” was issued in March 2005. This Interpretation provides clarification with respect to the timing of liability recognition for legal obligations associated with the retirement of tangible long-lived assets when the timing and/or method of settlement of the obligation is conditional on a future event. This Interpretation requires that the fair value of a liability for a conditional asset retirement obligation be recognized in the period in which it occurred if a reasonable estimate of fair value can be made. We have determined that conditional legal obligations exist for certain of our leased facilities, primarily our distribution centers. The asset retirement obligation and the annual cost reflected in these financials is immaterial.   MARKET RISK         We are exposed to foreign currency exchange rate risk on our investment in our Canadian (Winners and HomeSense) and European (T.K. Maxx) operations. As more fully described in Notes A and D to the consolidated financial statements, we hedge a significant portion of our net investment in foreign operations; intercompany transactions with these operations; and certain merchandise purchase commitments incurred by these operations; with derivative financial instruments. We utilize currency forward and swap contracts, designed to offset the gains or losses in the underlying exposures. The contracts are executed with banks we believe are creditworthy and are denominated in currencies of major industrial countries. We do not enter into derivatives for speculative trading purposes.         We are also subject to interest rate risk under the terms of our revolving credit line, which has variable rate of interest. The impact on our future interest expense as a result of future changes in interest rates will depend largely on the gross amount of our borrowings.         In addition, the assets of our qualified pension plan, a large portion of which is invested in equity securities, are subject to the risks and uncertainties of the public stock market. We allocate the pension assets in a manner that attempts to minimize and control our exposure to these market uncertainties.  29    Table of Contents           ITEM 7A.      QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK          We are exposed to foreign currency exchange rate risk on our investment in our Canadian (Winners and HomeSense) and European (T.K. Maxx) operations. As more fully described in Notes A and D to the consolidated financial statements, we hedge a significant portion of our net investment in foreign operations; intercompany transactions with these operations; and certain merchandise purchase commitments incurred by these operations; with derivative financial instruments. We enter into derivative contracts only when there is an underlying economic exposure. We utilize currency forward and swap contracts, designed to offset the gains or losses in the underlying exposures; most of these gains and losses are recorded directly in shareholders’ equity. The contracts are executed with banks we believe are creditworthy and are denominated in currencies of major industrial countries. We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign currency exchange rates applied to the hedging contracts and the underlying exposures described above. As of January 28, 2006, the analysis indicated that such an adverse movement would not have a material effect on our consolidated financial position, results of operations or cash flows.         Our cash equivalents and short-term investments and certain lines of credit bear variable interest rates. Changes in interest rates affect interest earned and paid by the Company. We occasionally enter into financial instruments to manage our cost of borrowing; however, we believe that the use of primarily fixed rate debt minimizes our exposure to market conditions.         We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in interest rates applied to the maximum variable rate debt outstanding during the previous year. As of January 28, 2006, the analysis indicated that such an adverse movement would not have a material effect on our consolidated financial position, results of operations or cash flows.            ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA          The information required by this item may be found on pages F-1 through F-35 of this Annual Report on Form 10-K.            ITEM 9.      CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL     DISCLOSURE          Not applicable.            ITEM 9A.      CONTROLS AND PROCEDURES             (a)      Evaluation of Disclosure Controls and Procedures and Changes in     Internal Control Over Financial Reporting          The Company carried out an evaluation as of the end of the period covered by this report, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15e and 15d-15e of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in ensuring that all information required to be filed in this annual report was recorded, processed, summarized and reported within the time period required by the rules and regulations of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  30   Table of Contents        There have been no changes in internal controls over financial reporting, that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.            (b)      Management’s Annual Report on Internal Control Over     Financial Reporting          The management of TJX is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.         Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.         Under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting as of January 28, 2006 based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that evaluation, management concluded that its internal control over financial reporting was effective as of January 28, 2006.         PricewaterhouseCoopers LLP, an independent registered public accounting firm, who audited and reported on the consolidated financial statements of The TJX Companies, Inc., has audited management’s assessment of our internal control over financial reporting as of January 28, 2006, as stated in their report which is included herein.            (c)      Attestation Report of the Independent Registered Public     Accounting Firm          Management’s assessment of the effectiveness of the Company’s internal control over financial reporting as of January 28, 2006 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.            ITEM 9B.      OTHER INFORMATION          None.     PART III           ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT          TJX will file with the Securities and Exchange Commission a definitive proxy statement no later than 120 days after the close of its fiscal year ended January 28, 2006. The information required by this Item and not given in Item 4A, under the caption “Executive Officers of the Registrant,” will appear under the headings “Election of Directors,” “Corporate Governance,” “Audit Committee Report” and “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement, which sections are incorporated in this item by reference.  31    Table of Contents           ITEM 11.      EXECUTIVE COMPENSATION          The information required by this Item will appear under the heading “Executive Compensation” in our Proxy Statement, which section is incorporated in this item by reference.            ITEM 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT          The information required by this Item will appear under the heading “Beneficial Ownership” in our Proxy Statement, which section is incorporated in this item by reference.         The following table provides certain information as of January 28, 2006 with respect to our equity compensation plans:   Equity Compensation Plan Information                                     (a)       (c)       Number of securities to   (b)   Number of securities remaining       be issued upon exercise   Weighted-average exercise   available for future issuance under       of outstanding options,   price of outstanding   equity compensation plans   Plan Category   warrants and rights   options, warrants and rights   (excluding securities reflected in (a))             Equity compensation plans approved by security holders      47,902,352     $ 18.97       27,152,922           Equity compensation plans not approved by security holders     (1)      N/A       N/A       N/A                                 Total      47,902,352     $ 18.97       27,152,922                                   (1)       All equity compensation plans have been approved by shareholders.          For additional information concerning our equity compensation plans, see Note F to our consolidated financial statements, on page F-18.            ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS          The information required by this Item will appear under the heading “Retirement Plans” in our Proxy Statement, which section is incorporated in this item by reference.            ITEM 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES          The information required by this Item will appear under the heading “Audit Committee Report” in our Proxy Statement, which section is incorporated in this item by reference.  32    Table of Contents    PART IV           ITEM 15.      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES             (a)      Financial Statement Schedules          For a list of the consolidated financial information included herein, see Index to the Consolidated Financial Statements on page F-1.   Schedule II - Valuation and Qualifying Accounts                                             Balance   Amounts   Write-Offs   Balance       Beginning of   Charged to   Against   End of   (In Thousands)   Period   Net Income   Reserve   Period         Sales Return Reserve:                                          Fiscal Year Ended January 28, 2006    $ 13,162     $ 823,357     $ 822,418     $ 14,101                                       Fiscal Year Ended January 29, 2005    $ 11,596     $ 825,795     $ 824,229     $ 13,162                                       Fiscal Year Ended January 31, 2004    $ 10,201     $ 772,199     $ 770,804     $ 11,596                                   Discontinued Operations Reserve:                                          Fiscal Year Ended January 28, 2006    $ 12,365     $ 8,509     $ 5,893     $ 14,981                                       Fiscal Year Ended January 29, 2005    $ 17,518     $ 2,254     $ 7,407     $ 12,365                                       Fiscal Year Ended January 31, 2004    $ 55,361     $ -     $ 37,843     $ 17,518                                   Casualty Insurance Reserve:                                          Fiscal Year Ended January 28, 2006    $ 26,434     $ 62,064     $ 53,791     $ 34,707                                       Fiscal Year Ended January 29, 2005    $ 15,877     $ 58,045     $ 47,488     $ 26,434                                       Fiscal Year Ended January 31, 2004    $ 9,465     $ 44,531     $ 38,119     $ 15,877                                            (b)      Exhibits          Listed below are all exhibits filed as part of this report. Some exhibits are filed by the Registrant with the Securities and Exchange Commission pursuant to Rule 12b-32 under the Securities Exchange Act of 1934, as amended.                 Exhibit       No.   Description of Exhibit         3(i) .1        Fourth Restated Certificate of Incorporation is incorporated     herein by reference to Exhibit 99.1 to the Form 8-A/A     filed September 9, 1999. Certificate of Amendment of Fourth     Restated Certificate of Incorporation is incorporated herein by     reference to Exhibit 3(i) to the Form 10-Q filed for     the quarter ended July 28, 2005.         3(ii) .1        The by-laws of TJX, as amended, are incorporated herein by     reference to Exhibit 3(ii) to the Form 10-Q filed for     the quarter ended July 28, 2005.         4 .1        Indenture between TJX and The Bank of New York dated as of     February 13, 2001, incorporated by reference to     Exhibit 4.1 of the Registration Statement on Form S-3     filed on May 9, 2001.                Each other instrument relates to long-term debt securities the     total amount of which does not exceed 10% of the total assets of     TJX and its subsidiaries on a consolidated basis. TJX agrees to     furnish to the Securities and Exchange Commission copies of each     such instrument not otherwise filed herewith or incorporated     herein by reference.         10 .1        4-year Revolving Credit Agreement dated May 5, 2005 among     various financial institutions as lenders, including Bank of     America, N.A., JP Morgan Chase Bank, National Association, The     Bank of New York, Citizens Bank of Massachusetts, Key Bank     National Association and Union Bank of California, N.A., as     co-agents is incorporated herein by reference to     Exhibit 10.1 to the Form 8-K filed May 6, 2005.    33   Table of Contents                Exhibit       No.   Description of Exhibit         10 .2        5-year Revolving Credit Agreement dated May 5, 2005 among     various financial institutions as lenders, including Bank of     America, N.A., JP Morgan Chase Bank, National Association, The     Bank of New York, Citizens Bank of Massachusetts, Key Bank     National Association and Union Bank of California, N.A., as     co-agents is incorporated herein by reference to     Exhibit 10.2 to the Form 8-K filed May 6, 2005.         10 .3        The Employment Agreement dated as of June 3, 2003 between     Edmond J. English and the Company is incorporated herein by     reference to Exhibit 10.1 to the Form 10-Q filed for     the quarter ended July 26, 2003. The Letter Agreement dated     September 13, 2005 between Edmond J. English and the     Company is incorporated herein by reference to Exhibit 10.1     to the Form 8-K filed September 16, 2005.*         10 .4        The Employment Agreement dated as of June 3, 2003 between     Bernard Cammarata and the Company is incorporated herein by     reference to Exhibit 10.2 to the Form 10-Q filed for     the quarter ended July 26, 2003. The Letter Agreement dated     November 14, 2005 amending the Employment Agreement between     Bernard Cammarata and the Company is incorporated herein by     reference to Exhibit 10.1 to the Form 8-K filed on     November 14, 2005. The Amendment dated as of March 7,     2006 to the Employment Agreement dated as of June 3, 2003     with Bernard Cammarata, as amended, in incorporated herein by     reference to Exhibit 10.1 to the Form 8-K filed     March 8, 2006.*         10 .5        The Employment Agreement dated as of April 5, 2005 with     Donald G. Campbell is incorporated herein by reference to     Exhibit 10.2 to Form 8-K filed on April 7, 2005.     The Letter Agreement dated September 7, 2005 with Donald G.     Campbell is incorporated herein by reference to     Exhibit 10.7 to the Form 10-Q filed for the quarter     ended October 29, 2005. The Amendment dated as of     March 7, 2006 to the Employment Agreement dated as of     April 5, 2005 with Donald G. Campbell, as amended, is     incorporated herein by reference to Exhibit 10.4 to the     Form 8-K filed March 8, 2006.*         10 .6        The Employment Agreement dated as of October 17, 2005 with     Carol Meyrowitz is incorporated herein by reference to     Exhibit 10.1 to the Form 8-K filed on October 12,     2005. The Amendment dated as of March 7, 2006 to the     Employment Agreement dated as of October 17, 2005 with     Carol Meyrowitz, is incorporated herein by reference to     Exhibit 10.2 to the Form 8-K filed March 8, 2006.*         10 .7        The Employment Agreement dated as of April 5, 2005 with     Arnold Barron is incorporated herein by reference to     Exhibit 10.1 to the Form 8-K filed on April 7,     2005. The Letter Agreement dated September 7, 2005 with     Arnold Barron is incorporated herein by reference to     Exhibit 10.6 to the Form 10-Q filed for the quarter     ended October 29, 2005. The Letter Agreement dated     October 17, 2005 with Arnold Barron is incorporated herein     by reference to Exhibit 10.9 to the Form 10-Q filed     for the quarter ended October 29, 2005. The Amendment dated     as of March 7, 2006 to the Employment Agreement dated as of     April 5, 2005 with Arnold Barron, as amended, is     incorporated herein by reference to Exhibit 10.3 to the     Form 8-K filed March 8, 2006.*         10 .8        The Employment Agreement dated as of April 5, 2005 with     Alexander Smith is incorporated herein by reference to     Exhibit 10.3 to the Form 8-K filed on April 7,     2005. The Letter Agreement dated September 7, 2005 with     Alexander Smith is incorporated herein by reference to     Exhibit 10.8 to the Form 10-Q filed for the quarter     ended October 29, 2005. The Letter Agreement dated     October 17, 2005 with Alexander Smith is incorporated     herein by reference to Exhibit 10.10 to the Form 10-Q     filed for the quarter ended October 29, 2005. The Amendment     dated as of March 7, 2006 to the Employment Agreement dated     as of April 5, 2005 with Alexander Smith, as amended, is     incorporated herein by reference to Exhibit 10.5 to the     Form 8-K filed March 8, 2006.*         10 .9        The Separation Agreement dated October 14, 2005 with Peter     Maich is incorporated herein by reference to Exhibit 10.1     to the Form 8-K filed October 19, 2005.*         10 .10        The TJX Companies, Inc. Management Incentive Plan, as amended,     is incorporated herein by reference to Exhibit 10.2 to the     Form 10-Q filed for the quarter ended July 26, 1997. *         10 .11        The Stock Incentive Plan, as amended and restated through     June 1, 2004, is incorporated herein by reference to     Exhibit 10.1 to the Form 10-Q filed for the quarter     ended July 31, 2004. The related First Amendment to the     Stock Incentive Plan is filed herewith. *         10 .12        The Form of a Non-Qualified Stock Option Certificate Granted     Under the Stock Incentive Plan is incorporated herein by     reference to Exhibit 10.2 to the Form 10-Q filed for     the quarter ended July 31, 2004.*    34   Table of Contents                Exhibit       No.   Description of Exhibit         10 .13        The Form of a Performance-Based Restricted Stock Award Granted     Under Stock Incentive Plan is incorporated herein by reference     to Exhibit 10.3 to the Form 10-Q filed for the quarter     ended July 31, 2004.*         10 .14        The Form of a Performance-Based Restricted Stock Award Granted     Under Stock Incentive Plan is incorporated herein by reference     to Exhibit 10.2 to the Form 8-K filed     November 17, 2005.*         10 .15        Description of Director Compensation Arrangements is filed     herewith.*         10 .16        The TJX Companies, Inc. Long Range Performance Incentive Plan,     as amended, is incorporated herein by reference to     Exhibit 10.3 to the Form 10-Q filed for the quarter     ended July 26, 1997. Amendment to Long Range Performance     Incentive Plan adopted on September 7, 2005 is incorporated     herein by reference to Exhibit 10.11 to the Form 10-K     filed for the fiscal quarter ended October 29, 2005. *         10 .17        The General Deferred Compensation Plan (1998 Restatement) and     related First Amendment, effective January 1, 1999, are     incorporated herein by reference to Exhibit 10.9 to the     Form 10-K for the fiscal year ended January 30, 1999.     The related Second Amendment, effective January 1, 2000, is     incorporated herein by reference to Exhibit 10.10 to the     Form 10-K filed for the fiscal year ended January 29,     2000. The related Third and Fourth Amendments are filed     herewith. *         10 .18        The Supplemental Executive Retirement Plan, as amended, is     incorporated herein by reference to Exhibit 10(l) to the     Form 10-K filed for the fiscal year ended January 25,     1992. The 2005 Restatement to the Supplemental Executive     Retirement Plan is filed herewith. *         10 .19        The Executive Savings Plan and related Amendments No. 1 and     No. 2, effective as of October 1, 1998, is     incorporated herein by reference to Exhibit 10.12 to the     Form 10-K filed for the fiscal year ended January 30,     1999. The related Third and Fourth Amendments are filed     herewith. *         10 .20        The Restoration Agreement and related letter agreement regarding     conditional reimbursement dated December 31, 2002 between     TJX and Bernard Cammarata are incorporated herein by reference     to Exhibit 10.17 to the Form 10-K filed for the fiscal     year ended January 25, 2003. *         10 .21        The form of Indemnification Agreement between TJX and each of     its officers and directors is incorporated herein by reference     to Exhibit 10(r) to the Form 10-K filed for the fiscal     year ended January 27, 1990. *         10 .22        The Trust Agreement dated as of April 8, 1988 between TJX     and State Street Bank and Trust Company is incorporated herein     by reference to Exhibit 10(y) to the Form 10-K filed     for the fiscal year ended January 30, 1988. *         10 .23        The Trust Agreement dated as of April 8, 1988 between TJX     and Fleet Bank (formerly Shawmut Bank of Boston, N.A.) is     incorporated herein by reference to Exhibit 10(z) to the     Form 10-K filed for the fiscal year ended January 30,     1988. *         10 .24        The Trust Agreement for Executive Savings Plan dated as of     January 1, 2005 between TJX and Wells Fargo Bank, N.A. is     incorporated by reference to Exhibit 10.26 to the     Form 10-K filed for the fiscal year ended January 29,     2005. *         10 .25        The Distribution Agreement dated as of May 1, 1989 between     TJX and HomeBase, Inc. (formerly Waban Inc.) is incorporated     herein by reference to Exhibit 3 to TJX’s Current     Report on Form 8-K dated June 21, 1989. The First     Amendment to Distribution Agreement dated as of April 18,     1997 between TJX and HomeBase, Inc. (formerly Waban Inc.) is     incorporated herein by reference to Exhibit 10.22 to the     Form 10-K filed for the fiscal year ended January 25,     1997.         10 .26        The Indemnification Agreement dated as of April 18, 1997 by     and between TJX and BJ’s Wholesale Club, Inc. is     incorporated herein by reference to Exhibit 10.23 to the     Form 10-K filed for the fiscal year ended January 25,     1997.         14          Code of Ethics:     TJX’s Code of Ethics for TJX Executives is incorporated     herein by reference to Exhibit 14 to the Form 10-K     filed for the fiscal year ended January 25, 2003.         21          Subsidiaries:                A list of the Registrant’s subsidiaries is filed herewith.         23          Consents of Independent Registered Public Accounting Firm    35   Table of Contents                Exhibit       No.   Description of Exhibit                    The Consent of PricewaterhouseCoopers LLP is filed herewith.         24          Power of Attorney:                The Power of Attorney given by the Directors and certain     Executive Officers of TJX is filed herewith.         31 .1        Certification Statement of Chief Executive Officer pursuant to     Section 302 of the Sarbanes-Oxley Act of 2002 is filed     herewith.         31 .2        Certification Statement of Chief Financial Officer pursuant to     Section 302 of the Sarbanes-Oxley Act of 2002 is filed     herewith.         32 .1        Certification Statement of Chief Executive Officer pursuant to     Section 906 of the Sarbanes-Oxley Act of 2002 is filed     herewith.         32 .2        Certification Statement of Chief Financial Officer pursuant to     Section 906 of the Sarbanes-Oxley Act of 2002 is filed     herewith.           *       Management contract or compensatory plan or arrangement.   36    Table of Contents    SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.                THE TJX COMPANIES, INC.              /s/ JEFFREY G. NAYLOR                 Jeffrey G. Naylor          Senior Executive Vice President - Finance    Dated: March 29, 2006         Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.                      /s/ BERNARD CAMMARATA Bernard Cammarata, Acting Principal     Executive Officer and Director            /s/ JEFFREY G. NAYLOR Jeffrey G. Naylor, Senior Executive     Vice President - Finance,     Principal Financial and     Accounting Officer            DAVID A. BRANDON* David A. Brandon, Director            RICHARD G. LESSER* Richard G. Lesser, Director            GARY L. CRITTENDEN* Gary L. Crittenden, Director            JOHN F. O’BRIEN* John F. O’Brien, Director            GAIL DEEGAN* Gail Deegan, Director            ROBERT F. SHAPIRO* Robert F. Shapiro, Director            DENNIS F. HIGHTOWER* Dennis F. Hightower, Director            WILLOW B. SHIRE* Willow B. Shire, Director            AMY B. LANE* Amy B. Lane, Director            FLETCHER H. WILEY* Fletcher H. Wiley, Director                *BY:        /s/ JEFFREY G. NAYLOR Jeffrey G. Naylor     as attorney-in-fact     Dated: March 29, 2006  37   Table of Contents  The TJX Companies, Inc.    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS    For Fiscal Years Ended January 28, 2006, January 29, 2005 and January 31, 2004                         Report of Independent Registered Public Accounting Firm      F-2       Consolidated Financial Statements:                    Consolidated Statements of Income for the fiscal years ended     January 28, 2006, January 29, 2005 and     January 31, 2004      F-4             Consolidated Balance Sheets as of January 28, 2006 and     January 29, 2005      F-5             Consolidated Statements of Cash Flows for the fiscal years ended     January 28, 2006, January 29, 2005 and     January 31, 2004      F-6             Consolidated Statements of Shareholders’ Equity for the     fiscal years ended January 28, 2006, January 29, 2005     and January 31, 2004      F-7             Notes to Consolidated Financial Statements      F-8       Financial Statement Schedules:                    Schedule II — Valuation and Qualifying Accounts      33      F-1    Table of Contents    Report of Independent Registered Public Accounting Firm   To The Board of Directors and Shareholders of The TJX Companies, Inc:   We have completed integrated audits of The TJX Companies, Inc.’s 2006 and 2005 consolidated financial statements and of its internal control over financial reporting as of January 28, 2006, and an audit of its 2004 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.   Consolidated financial statements and financial statement schedule   In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of The TJX Companies, Inc. and its subsidiaries (the “Company”) at January 28, 2006 and January 29, 2005, and the results of their operations and their cash flows for each of the three years in the period ended January 28, 2006 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.   As discussed in Note F to the consolidated financial statements, the Company has adjusted its financial statements to reflect the adoption of Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment (Revised 2004)” for all periods presented.   Internal control over financial reporting   Also, in our opinion, management’s assessment, included in “Management’s Annual Report on Internal Control Over Financial Reporting” appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of January 28, 2006 based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 28, 2006, based on criteria established in Internal Control — Integrated Framework issued by the COSO. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.  F-2   Table of Contents  A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.   PricewaterhouseCoopers LLP   Boston, Massachusetts   March 27, 2006  F-3   Table of Contents    Consolidated Statements of Income                                       Fiscal Year Ended           Amounts In Thousands   January 28,   January 29,   January 31,   Except Per Share Amounts   2006   2005   2004           (53 Weeks)         Net sales    $ 16,057,935     $ 14,913,483     $ 13,327,938           Cost of sales, including buying and occupancy costs      12,295,016       11,398,656       10,101,279           Selling, general and administrative expenses      2,723,960       2,500,119       2,212,669           Interest expense, net      29,632       25,757       27,252                                 Income before provision for income taxes      1,009,327       988,951       986,738           Provision for income taxes      318,904       379,252       377,326                                 Net income    $ 690,423     $ 609,699     $ 609,412                                     Basic earnings per share:                                    Net income    $ 1.48     $ 1.25     $ 1.20             Weighted average common shares - basic      466,537       488,809       508,359               Diluted earnings per share:                                    Net income    $ 1.41     $ 1.21     $ 1.16             Weighted average common shares - diluted      491,500       509,661       531,301           Cash dividends declared per share    $ .24     $ .18     $ .14       Prior periods have been adjusted to reflect the effect of adopting SFAS 123(R). See Note A to consolidated financial statements.   The accompanying notes are an integral part of the financial statements.  F-4    Table of Contents    Consolidated Balance Sheets                                   January 28,   January 29,   In Thousands   2006   2005             Assets                            Current assets:                              Cash and cash equivalents    $ 465,649     $ 307,187               Accounts receivable, net      140,747       119,611               Merchandise inventories      2,365,861       2,352,032               Prepaid expenses and other current assets      158,624       126,290               Current deferred income taxes, net      9,246       -                                 Total current assets      3,140,127       2,905,120                             Property at cost:                              Land and buildings      260,556       261,778               Leasehold costs and improvements      1,493,747       1,332,580               Furniture, fixtures and equipment      2,177,614       1,940,178                           3,931,917       3,534,536               Less accumulated depreciation and amortization      1,941,020       1,697,791                           1,990,897       1,836,745                             Property under capital lease, net of accumulated amortization of     $10,423 and $8,190, respectively      22,149       24,382             Non-current deferred income taxes, net      6,395       -             Other assets      153,312       125,463             Goodwill and tradenames, net of accumulated amortization      183,425       183,763                                 Total Assets    $ 5,496,305     $ 5,075,473                               Liabilities                            Current liabilities:                              Current installments of long-term debt    $ -     $ 99,995               Obligation under capital lease due within one year      1,712       1,581               Accounts payable      1,313,472       1,276,035               Current deferred income taxes, net      -       2,354               Accrued expenses and other current liabilities      936,667       824,147                                 Total current liabilities      2,251,851       2,204,112                             Other long-term liabilities      544,650       466,786             Non-current deferred income taxes, net      -       59,479             Obligation under capital lease, less portion due within one year      24,236       25,947             Long-term debt, exclusive of current installments      782,914       572,593             Commitments and contingencies      -       -           Shareholders’ Equity                            Common stock, authorized 1,200,000,000 shares, par value     $1, issued and outstanding 460,967,060 and     480,699,154 shares, respectively      460,967       480,699             Additional paid-in capital      -       -             Accumulated other comprehensive income (loss)      (44,296 )     (26,245 )           Retained earnings      1,475,983       1,292,102                                 Total shareholders’ equity      1,892,654       1,746,556                                 Total Liabilities and Shareholders’ Equity    $ 5,496,305     $ 5,075,473                       Prior periods have been adjusted to reflect the effect of adopting SFAS 123(R). See Note A to consolidated financial statements.   The accompanying notes are an integral part of the financial statements.  F-5   Table of Contents    Consolidated Statements of Cash Flows                                         Fiscal Year Ended               January 28,   January 29,   January 31,   In Thousands   2006   2005   2004           (53 Weeks)         Cash flows from operating activities:                                    Net income    $ 690,423     $ 609,699     $ 609,412             Adjustments to reconcile net income to net cash provided by     operating activities:                                      Depreciation and amortization      314,285       279,059       238,385               Property disposals      10,600       4,908       5,679               Amortization of stock compensation expense      91,190       100,121       91,797               Excess tax benefits from stock compensation expense      -       (3,022 )     (2,552 )             Deferred income tax provision      (88,245 )     22,758       62,747             Changes in assets and liabilities:                                      (Increase) in accounts receivable      (20,997 )     (27,731 )     (11,818 )             (Increase) in merchandise inventories      (8,772 )     (390,655 )     (310,673 )             (Increase) decrease in prepaid expenses and other current assets      (35,197 )     35,912       (51,413 )             Increase in accounts payable      35,010       305,344       118,832               Increase (decrease) in accrued expenses and other liabilities      163,362       154,282       (11,663 )             Increase in income taxes payable      7,903       3,314       34,298             Other, net      (1,543 )     (17,180 )     (5,083 )                                 Net cash provided by operating activities      1,158,019       1,076,809       767,948                                 Cash flows from investing activities:                                    Property additions      (495,948 )     (429,133 )     (409,037 )           Proceeds from sale of property      9,688       -       -             Acquisition of Bob’s Stores, net of cash acquired      -       -       (57,138 )           Proceeds from repayments on note receivable      652       652       606                                   Net cash (used in) investing activities      (485,608 )     (428,481 )     (465,569 )                               Cash flows from financing activities:                                    Principal payments on long-term debt      (100,000 )     (5,002 )     (15,000 )           Payments on capital lease obligation      (1,580 )     (1,460 )     (1,348 )           Proceeds from sale and issuance of common stock      102,438       96,861       59,159             Proceeds from borrowings of long-term debt      204,427       -       -             Cash payments for repurchase of common stock      (603,739 )     (594,580 )     (520,746 )           Excess tax benefits from stock compensation expense      -       3,022       2,552             Cash dividends paid      (105,251 )     (83,418 )     (68,889 )                                 Net cash (used in) financing activities      (503,705 )     (584,577 )     (544,272 )                                 Effect of exchange rate changes on cash      (10,244 )     (2,967 )     (4,034 )                                 Net increase (decrease) in cash and cash equivalents      158,462       60,784       (245,927 )           Cash and cash equivalents at beginning of year      307,187       246,403       492,330                                   Cash and cash equivalents at end of year    $ 465,649     $ 307,187     $ 246,403                             Prior periods have been adjusted to reflect the effect of adopting SFAS 123(R). See Note A to consolidated financial statements.   The accompanying notes are an integral part of the financial statements.  F-6    Table of Contents    Consolidated Statements of Shareholders’ Equity                                                                 Common Stock       Accumulated                   Additional   Other                   Par   Paid-In   Comprehensive   Retained       In Thousands   Shares   Value $1   Capital   Income (Loss)   Earnings   Total               (In thousands)         Balance, January 25, 2003      520,515     $ 520,515     $ -     $ (3,164 )   $ 944,845     $ 1,462,196           Comprehensive income:                                                              Net income      -       -       -       -       609,412       609,412               Gain due to foreign currency translation adjustments      -       -       -       14,323       -       14,323               (Loss) on hedge contracts      -       -       -       (24,743 )     -       (24,743 )                                                   Total comprehensive income                                              598,992             Cash dividends declared on common stock      -       -       -       -       (70,745 )     (70,745 )           Restricted stock awards granted      600       600       (600 )     -       -       -             Amortization of unearned stock compensation      -       -       91,797       -       -       91,797           Issuance of common stock under stock incentive plans and related     tax effect      4,890       4,890       55,192       -       -       60,082           Common stock repurchased      (26,823 )     (26,823 )     (146,389 )     -       (342,057 )     (515,269 )                                                 Balance, January 31, 2004      499,182       499,182       -       (13,584 )     1,141,455       1,627,053           Comprehensive income:                                                              Net income      -       -       -       -       609,699       609,699               (Loss) due to foreign currency translation adjustments      -       -       -       (10,681 )     -       (10,681 )             Gain on net investment hedge contracts      -       -       -       3,759       -       3,759               (Loss) on cash flow hedge contract      -       -       -       (19,652 )     -       (19,652 )             Amount of cash flow hedge reclassified from other comprehensive     income to net income      -       -       -       13,913       -       13,913                                                     Total comprehensive income                                              597,038             Cash dividends declared on common stock      -       -       -       -       (87,578 )     (87,578 )           Restricted stock awards granted      220       220       (220 )     -       -       -             Amortization of unearned stock compensation      -       -       100,121       -       -       100,121           Issuance of common stock under stock incentive plans and related     tax effect      6,447       6,447       91,398       -       -       97,845           Common stock repurchased      (25,150 )     (25,150 )     (191,299 )     -       (371,474 )     (587,923 )                                                 Balance, January 29, 2005      480,699       480,699       -       (26,245 )     1,292,102       1,746,556           Comprehensive Income:                                                              Net Income      -       -       -       -       690,423       690,423               (Loss) due to foreign currency translation adjustments      -       -       -       (32,563 )     -       (32,563 )             Gain on net investment hedge contracts      -       -       -       14,981       -       14,981               (Loss) on cash flow hedge contract      -       -       -       (14,307 )     -       (14,307 )             Amount of cash flow hedge reclassified from other comprehensive     income to net income      -       -       -       13,838       -       13,838                                                     Total comprehensive income                                              672,372             Cash dividends declared on common stock      -       -       -       -       (111,278 )     (111,278 )           Restricted stock awards granted      377       377       (377 )     -       -       -             Amortization of unearned stock compensation      -       -       91,190       -       -       91,190           Issuance of common stock under stock incentive plans and related     tax effect      5,775       5,775       88,041       -       -       93,816           Common stock repurchased      (25,884 )     (25,884 )     (178,854 )     -       (395,264 )     (600,002 )                                                 Balance, January 28, 2006      460,967     $ 460,967     $ -     $ (44,296 )   $ 1,475,983     $ 1,892,654                                               Prior periods have been adjusted to reflect the effect of adopting SFAS 123(R). See Note A to consolidated financial statements.   The accompanying notes are an integral part of the financial statements.  F-7    Table of Contents    Notes to Consolidated Financial Statements         A.  Summary of Accounting Policies          Basis of Presentation: The consolidated financial statements of The TJX Companies, Inc. (referred to as “TJX”, the “Company” or “we”) include the financial statements of all of TJX’s subsidiaries, all of which are wholly owned. All of TJX’s activities are conducted within TJX or our subsidiaries and are consolidated in these financial statements. All intercompany transactions have been eliminated in consolidation. The notes pertain to continuing operations except where otherwise noted.         Fiscal Year: TJX’s fiscal year ends on the last Saturday in January. The fiscal year ended January 31, 2004 (“fiscal 2004”) included 53 weeks. The fiscal years ended January 28, 2006 (“fiscal 2006”) and January 29, 2005 (“fiscal 2005”) each included 52 weeks.         Earnings Per Share: All earnings per share amounts discussed refer to diluted earnings per share unless otherwise indicated.         Adoption of New Accounting Pronouncements: In the fourth quarter of fiscal 2006 we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)), which is a revision of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (SFAS 123). We adopted SFAS 123(R) using the modified retrospective transition method. The modified retrospective transition method requires that compensation cost be recognized beginning with the date of adoption of SFAS 123 (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the adoption date and (b) based on the requirements of SFAS 123 for all awards granted to employees prior to the adoption date of SFAS 123(R) that remain unvested on the date of adoption. The modified retrospective transition method also allowed companies to adjust all prior periods to the amounts previously recognized under pro forma disclosures for all prior years for which SFAS 123 was effective. Accordingly, all previously reported results included in these financial statements have been adjusted to reflect the effect of adopting SFAS 123(R). See Note F for a detailed discussion of our stock-based compensation and our adoption of SFAS 123(R).         Lease Accounting: During fiscal 2005, we recorded a one-time non-cash charge to conform our accounting policies to generally accepted accounting principles related to the timing of rent expense for certain leased locations. Previously, we began recording rent expense at the time a store opened and the lease term commenced as specified in the lease. Beginning in the fourth quarter of fiscal 2005, we record rent expense when we take possession of a store, which occurs before the commencement of the lease term, as specified in the lease, and generally 30 to 60 days prior to the opening of the store. This will result in an acceleration of the commencement of rent expense for each lease, as we record rent expense during the pre-opening period, but a reduction in monthly rent expense, as the total rent due under the lease is amortized over a greater number of months.         This correction resulted in a one-time, cumulative, non-cash charge of $30.7 million on a pre tax basis ($19.3 million net of tax), or $.04 per share, which we recorded in the fourth quarter of fiscal 2005.         Following is the cumulative effect of the correction by operating segment (in thousands):                       Marmaxx    $ 16,807           Winners and HomeSense      3,538           T.K. Maxx      6,473           HomeGoods      2,243           A.J. Wright      1,662           Bob’s Stores      -                   $ 30,723                       Use of Estimates: The preparation of the financial statements, in conformity with accounting principles generally accepted in the United States, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities, at the date of the financial statements as well as  F-8    Table of Contents  the reported amounts of revenues and expenses during the reporting period. TJX considers the more significant accounting policies that involve management estimates and judgments to be those relating to inventory valuation, retirement obligations, casualty insurance, and accounting for taxes. Actual amounts could differ from those estimates.         Revenue Recognition: TJX records revenue at the time of sale and receipt of merchandise by the customer, net of a reserve for estimated returns. We estimate returns based upon our historical experience. We defer recognition of a layaway sale and its related profit to the accounting period when the customer receives layaway merchandise. Proceeds from the sale of gift cards are deferred until the customer uses the gift card to acquire merchandise. Based on historical experience we estimate the amount of gift cards that will not be redeemed and, to the extent allowed by local law, these amounts are amortized into income over the redemption period.         Consolidated Statements of Income Classifications: Cost of sales, including buying and occupancy costs, include the cost of merchandise sold and gains and losses on inventory-related derivative contracts; store occupancy costs (including real estate taxes, utility and maintenance costs, and fixed asset depreciation); the costs of operating our distribution centers; payroll, benefits and travel costs directly associated with buying inventory; and systems costs related to the buying and tracking of inventory.         Selling, general and administrative expenses include store payroll and benefit costs; communication costs; credit and check expenses; advertising; administrative and field management payroll, benefits and travel costs; corporate administrative costs and depreciation; gains and losses on non-inventory related foreign currency exchange contracts and other gains or losses; and expense items.         Cash and Cash Equivalents: TJX generally considers highly liquid investments with an initial maturity of three months or less to be cash equivalents. Our investments are primarily high-grade commercial paper, institutional money market funds and time deposits with major banks. The fair value of cash equivalents approximates carrying value.         Merchandise Inventories: Inventories are stated at the lower of cost or market. TJX uses the retail method for valuing inventories on the first-in first-out basis. We almost exclusively utilize a permanent markdown strategy and lower the cost value of the inventory that is subject to markdown at the time the retail prices are lowered in our stores. Effective with the third quarter ended October 30, 2004, we have begun to accrue for inventory obligations at the time inventory is shipped rather than when received and accepted by TJX. At January 28, 2006 and January 29, 2005, the amount of in-transit inventory included in merchandise inventories on the balance sheet was $340.6 and $236.9 million, respectively. A comparable amount is reflected in accounts payable.         Common Stock and Equity: TJX’s equity transactions consist primarily of the repurchase of our common stock under our stock repurchase program and the issuance of common stock under our stock incentive plan. Under the stock repurchase program we repurchase our common stock on the open market. The par value of the shares repurchased is charged to common stock with the excess of the purchase price over par first charged against any available additional paid-in capital (“APIC”) and the balance charged to retained earnings. Due to the high volume of repurchases over the past several years we have no remaining balance in APIC. All shares repurchased have been retired.         Shares issued under our stock incentive plan are generally issued from authorized but previously unissued shares, and proceeds received are recorded by increasing common stock for the par value of the shares with the excess over par added to additional paid-in capital(“APIC”). Income tax benefits upon the expensing of options result in the creation of a deferred tax asset, while income tax benefits due to the exercise of stock options reduce deferred tax assets to the extent that an asset for the related grant has been created. Any tax benefit greater than the deferred tax asset created at the time of expensing the option is credited to APIC; any deficiency in the tax benefit is debited to APIC to the extent a ’pool’ for such deficiency exists. In the absence of a pool any deficiency is realized in the related periods’ statements of income through the provision for income taxes. The excess income tax benefits, if any, are included in cash flows from financing activities in the statements of cash flows. The par value of restricted stock awards is also added to common stock when the stock is issued, generally at grant date. The fair value of the award, in excess of par value, is added to APIC as the award is amortized into earnings over the related vesting period.  F-9    Table of Contents        Stock-Based Compensation: For purposes of applying the provisions of SFAS No. 123(R), the fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model. See Note F for a detailed discussion of stock-based compensation.         Interest: TJX’s interest expense, net was $29.6 million, $25.8 million and $27.3 million in fiscal 2006, 2005 and 2004 respectively. Interest expense is presented net of interest income of $9.4 million, $7.7 million and $6.5 million in fiscal 2006, 2005 and 2004, respectively. We capitalize interest during the active construction period of major capital projects. Capitalized interest is added to the cost of the related assets. No interest was capitalized in fiscal 2006 or 2005. We capitalized interest of $1.0 million in fiscal 2004. Debt discount and related issue expenses are amortized to interest expense over the lives of the related debt issues or to the first date the holders of the debt may require TJX to repurchase such debt.         Depreciation and Amortization: For financial reporting purposes, TJX provides for depreciation and amortization of property by the use of the straight-line method over the estimated useful lives of the assets. Buildings are depreciated over 33 years. Leasehold costs and improvements are generally amortized over their useful life or the committed lease term (typically 10 years), whichever is shorter. Furniture, fixtures and equipment are depreciated over 3 to 10 years. Depreciation and amortization expense for property was $307.7 million for fiscal 2006, $268.0 million for fiscal 2005, and $227.3 million for fiscal 2004. Amortization expense for property held under a capital lease was $2.2 million in fiscal 2006, 2005 and 2004. Maintenance and repairs are charged to expense as incurred. Significant costs incurred for internally developed software are capitalized and amortized over three to ten years. Upon retirement or sale, the cost of disposed assets and the related accumulated depreciation are eliminated and any gain or loss is included in net income. Pre-opening costs, including rent, are expensed as incurred.         Impairment of Long-Lived Assets: TJX periodically reviews the value of its property and intangible assets in relation to the current and expected operating results of the related business segments in order to assess whether there has been an other than temporary impairment of their carrying values. An impairment exists when the undiscounted cash flow of an asset is less than the carrying cost of that asset. Store by store impairment analysis is performed, at a minimum on an annual basis, in the fourth quarter of a fiscal year.         Goodwill and Tradename: Goodwill is primarily the excess of the purchase price paid over the carrying value of the minority interest acquired in fiscal 1990 in TJX’s former 83%-owned subsidiary and represents goodwill associated with the T.J. Maxx chain which is included in the Marmaxx segment at January 28, 2006, January 29, 2005 and January 31, 2004. In addition, goodwill includes the excess of cost over the estimated fair market value of the net assets of Winners acquired by TJX in fiscal 1991.         Goodwill, net of amortization, totaled $72.0 million, $71.8 million and $71.4 million as of January 28, 2006, January 29, 2005 and January 31, 2004, respectively, and through January 26, 2002 was being amortized over 40 years on a straight-line basis. There was no amortization of goodwill in fiscal 2006, 2005 or 2004. Cumulative amortization was $33.1 million as of January 28, 2006, $33.0 million at January 29, 2005, and $32.9 million at January 31, 2004. Changes in goodwill cost and accumulated amortization are attributable to the effect of exchange rate changes on Winners reported goodwill.         Tradenames include the values assigned to the name “Marshalls,” acquired by TJX in fiscal 1996 when we acquired the Marshalls chain, and to the name “Bob’s Stores” acquired by TJX in December 2003 when we acquired substantially all of the assets of Bob’s Stores (see note B to the consolidated financial statements). These values were determined by the discounted present value of assumed after-tax royalty payments, offset by a reduction for their pro-rata share of negative goodwill.         The Marshalls tradename, net of accumulated amortization prior to the implementation of SFAS No. 142 in fiscal 2003, is carried at a value of $107.7 million, and is considered to have an indefinite life and, accordingly, is no longer amortized. The Bob’s Stores tradename, pursuant to the purchase accounting method, was valued at $4.8 million which is being amortized over 10 years. Amortization expense of $477,000, $483,000 and $33,000 was recognized in fiscal 2006, 2005 and 2004, respectively. Cumulative amortization as of January 28, 2006, January 29, 2005 and January 31, 2004 was $993,000, $516,000 and $33,000, respectively.  F-10    Table of Contents        The Company occasionally acquires other trademarks in connection with private label merchandise. Such trademarks are included in other assets and are amortized to cost of sales, including buying and occupancy costs, over the term of the agreement generally from 7 to 10 years. Amortization expense related to trademarks was $492,000, $492,000, and $519,000 in fiscal 2006, 2005 and 2004, respectively. The Company had $2.2 million, $2.7 million and $3.0 million in trademarks, net of accumulated amortization, at January 28, 2006, January 29, 2005 and January 31, 2004, respectively. Trademarks and the related amortization are included in the related operating segment for which they were acquired.         An impairment analysis is performed for goodwill and tradenames, at a minimum on an annual basis, in the fourth quarter of a fiscal year. No impairments have been recorded on these assets to date.         Advertising Costs: TJX expenses advertising costs as incurred. Advertising expense was $206.1 million, $188.0 million, and $148.4 million for fiscal 2006, 2005 and 2004, respectively.         Foreign Currency Translation: TJX’s foreign assets and liabilities are translated at the fiscal year end exchange rate. Activity of the foreign operations that affect the statements of income and cash flows are translated at the average exchange rates prevailing during the fiscal year. The translation adjustments associated with the foreign operations are included in shareholders’ equity as a component of accumulated other comprehensive income (loss). Cumulative foreign currency translation adjustments included in shareholders’ equity amounted to a loss of $23.6 million, net of related tax effect of $6.2 million, as of January 28, 2006; a gain of $8.9 million, net of related tax effect of $11.0 million, as of January 29, 2005; and a gain of $21.4 million, net of related tax effect of $16.3 million, as of January 31, 2004.         Derivative Instruments and Hedging Activity: TJX enters into financial instruments to manage our cost of borrowing and to manage our exposure to changes in foreign currency exchange rates. The Company recognizes all derivative instruments as either assets or liabilities in the statements of financial position and measures those instruments at fair value. Changes to the fair value of derivative contracts that do not qualify for hedge accounting are reported in earnings in the period of the change. For derivatives that qualify for hedge accounting, changes in the fair value of the derivatives are either recorded in shareholders’ equity as a component of other comprehensive income or are recognized currently in earnings, ultimately offset by a similar gain or loss on the underlying item being hedged. Cumulative gains and losses on derivatives that have hedged our net investment in foreign operations and deferred gains and losses on cash flow hedges that have been recorded in other comprehensive income amounted to a loss of $20.7 million, net of related tax effects of $13.8 million at January 28, 2006; a loss of $35.1 million, net of related tax effects of $23.4 million as of January 29, 2005; and a loss of $35.0 million, net of related tax effects of $23.3 million as of January 31, 2004.         New Accounting Standards: In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123(R), “Share-Based Payment” (SFAS No. 123(R)) which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the financial statements based on the estimated fair value of the awards on the grant date (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award or the requisite service period (usually the vesting period). TJX adopted this standard in the fourth quarter of fiscal 2006 and elected the modified retrospective transition method. Accordingly, all prior periods have been adjusted to reflect the impact of SFAS No. 123 in amounts equal to the pro forma results presented in the previously reported notes to consolidated financial statements.         In November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” which clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) by requiring these items to be recognized as current-period charges. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application permitted. We do not believe the adoption of this Statement will have any material impact on our financial statements.         In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets,” which changes the guidance in Accounting Principles Board Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. We adopted SFAS No. 153 in the second quarter of fiscal 2006 which did not have a material impact on our financial results.  F-11   Table of Contents        In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections,” a replacement of APB Opinion No. 20, and FASB Statement No. 3. SFAS No. 154 changes the requirements for accounting and reporting a change in accounting principle. The Statement requires retrospective application of a voluntary change in accounting principle to prior period financial statements rather than recording the cumulative effect of the change in net earnings in the current period. SFAS No. 154 also strictly defines the term “restatement” to mean the correction of an error by revising previously issued financial statements. SFAS No. 154 is effective for fiscal years beginning after December 15, 2005 (TJX’s fiscal 2007). We do not expect the adoption of SFAS No. 154 to have a material effect on our results of operations, financial condition or cash flows.         In June 2005, the Emerging Issues Task Force (“EITF”) of the FASB reached a consensus on Issue No. 05-06, “Determining the Amortization Period for Leasehold Improvements” (“EITF 05-06”). EITF 05-06 provides guidance for determining the amortization period used for leasehold improvements acquired in a business combination or purchased after the inception of a lease, collectively referred to as subsequently acquired leasehold improvements. EITF 05-06 provides that the amortization period used for the subsequently acquired leasehold improvements to be the lesser of (a) the subsequently acquired leasehold improvements’ useful lives, or (b) a period that reflects renewals that are reasonably assured upon the acquisition or the purchase. EITF 05-06 is effective on a prospective basis for subsequently acquired leasehold improvements purchased or acquired in periods beginning after the date of the FASB’s ratification, which was on June 29, 2005. The adoption of EITF 05-06 did not have a material impact on our results of operations or financial condition.         Financial Accounting Standards Board Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations (an interpretation of FASB Statement No. 143)” was issued in March 2005. This Interpretation provides clarification with respect to the timing of liability recognition for legal obligations associated with the retirement of tangible long-lived assets when the timing and/or method of settlement of the obligation is conditional on a future event. This Interpretation requires that the fair value of a liability for a conditional asset retirement obligation be recognized in the period in which it occurred if a reasonable estimate of fair value can be made. We have determined that conditional legal obligations exist for certain of our leased facilities, primarily our distribution centers. The asset retirement obligation and the annual cost reflected in these financials is immaterial.         B.  Acquisition of Bob’s Stores          On December 24, 2003, TJX completed the acquisition of Bob’s Stores, a value-oriented retail chain in the Northeast United States. Pursuant to the acquisition agreement, TJX purchased substantially all of the assets of Bob’s Stores, including one owned location, and assumed leases for 30 of Bob’s Stores locations, its Meriden, Connecticut office and warehouse lease, along with specified operating contracts and customer, vendor and employee obligations. The purchase price, which is net of proceeds received from a third party, amounted to $57.6 million.         The acquisition was accounted for using the purchase method of accounting in accordance with SFAS No. 141, “Business Combinations.” Accordingly, the purchase price is allocated to the tangible assets and liabilities and intangible assets acquired, based on their estimated fair values. The excess purchase price over the fair value is recorded as goodwill and conversely, the excess fair value over purchase price, “negative goodwill,” is allocated as a reduction to the long-lived assets. The purchase accounting method allows a one year period to finalize the fair values of the net assets acquired. No further adjustments to fair market values are made after that point.  F-12    Table of Contents        The initial allocation of the purchase price resulted in the allocation of $2.4 million of negative goodwill. Subsequent to our fiscal year ended January 31, 2004, it was determined that additional inventory related obligations should have been reflected on the opening balance sheet, which essentially eliminated the negative goodwill. The following table presents the final allocation of the $57.6 million purchase price to the assets and liabilities acquired based on their fair values as of December 24, 2003:                 In Thousands   As of December 24, 2003             Current assets    $ 37,310           Property and equipment      23,529           Intangible assets      16,064                     Total assets acquired      76,903                     Current liabilities      19,288                     Total liabilities assumed      19,288                     Net assets acquired    $ 57,615                       The intangible assets include $11.0 million assigned to favorable leases, which is being amortized over the related lease terms, and includes $4.8 million for the value of the tradename “Bob’s Stores,” which is being amortized over 10 years.         The results of Bob’s Stores have been included in our consolidated financial statements from the date of acquisition. Pro forma results of operations assuming the acquisition of Bob’s Stores occurred as of the beginning of fiscal 2004 have not been presented, as the inclusion of the results of operations for the acquired business would not have produced a material impact on the reported sales, net income or earnings per share of the Company.         C.  Long-Term Debt and Credit Lines          The table below presents long-term debt, exclusive of current installments, as of January 28, 2006 and January 29, 2005. All amounts are net of unamortized debt discounts. Capital lease obligations are separately presented in Note E.                               January 28,   January 29,   In Thousands   2006   2005             General corporate debt:                            7.45% unsecured notes, maturing December 15, 2009     (effective interest rate of 7.50% after reduction of unamortized     debt discount of $247 and $311 in fiscal 2006 and 2005,     respectively)    $ 199,753     $ 199,689             Market value adjustment to debt hedged with interest rate swap      (4,574 )     (2,851 )           C$235 Non revolving term credit facility due January 12,     2009 (interest rate at Canadian Dollar Banker’s Acceptance     rate plus .35%)      204,427       -                           Total general corporate debt      399,606       196,838                           Subordinated debt:                            Zero coupon convertible subordinated notes due February 13,     2021, after reduction of unamortized debt discount of $134,189     and $141,742 in fiscal 2006 and 2005, respectively      383,308       375,755                             Total subordinated debt      383,308       375,755                           Long-term debt, exclusive of current installments    $ 782,914     $ 572,593                      F-13   Table of Contents        The aggregate maturities of long-term debt, exclusive of current installments at January 28, 2006 are as follows:                     Long       Term   In Thousands   Debt             Fiscal Year                  2008    $ 383,308           2009      204,427           2010      199,753           2011      -           Later years      -           Deferred (loss) on settlement of interest rate swap and fair     value adjustments on hedged debt, net      (4,574 )                   Aggregate maturities of long-term debt, exclusive of current     installments    $ 782,914                       The above maturity table assumes that all holders of the zero coupon convertible subordinated notes exercise their put option in fiscal 2008. The note holders also have a put option available to them in fiscal 2014. Any of the notes on which put options are not exercised, redeemed or converted will mature in fiscal 2022.         In January 2006, we entered into a C$235.0 million non revolving term credit facility (through our Canadian division, Winners), due in January, 2009. This debt is guaranteed by TJX. Interest is payable on borrowings under this facility at rates equal to, or less than Canadian prime rate. The variable rate on this note was 3.96% at January 28, 2006. The proceeds were used to fund the repatriation of earnings from our Canadian division as well as other general corporate purposes of this division.         In February 2001, TJX issued $517.5 million zero coupon convertible subordinated notes due in February 2021 and raised gross proceeds of $347.6 million. The issue price of the notes represents a yield to maturity of 2% per year. Due to provisions of the first put option on February 13, 2002, we amortized the debt discount assuming a 1.5% yield for fiscal 2002. The notes are subordinated to all existing and future senior indebtedness of TJX. The notes are convertible into 16.9 million shares of common stock of TJX if the sale price of our common stock reaches specified thresholds, if the credit rating of the notes is below investment grade, if the notes are called for redemption or if certain specified corporate transactions occur. The holders of the notes have the right to require us to purchase the notes for $391.7 million and $441.3 million on February 13, 2007 and 2013, respectively. The repurchase amounts represent original purchase price plus accrued original issue discount. We may pay the purchase price in cash, TJX stock or a combination of the two. If the holders exercise their put option, we expect to fund the payment with cash, financing from our short-term credit facility, new long-term borrowings or a combination thereof. At the put date on February 13, 2004, three of the notes were put to TJX. In addition, if a change in control of TJX occurs on or before February 13, 2007, each holder may require TJX to purchase for cash all or a portion of such holder’s notes. We may redeem for cash all, or a portion of, the notes at any time on or after February 13, 2007 for the original purchase price plus accrued original issue discount.         The fair value of our general corporate debt, including current installments, is estimated by obtaining market value quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality. The fair value of our zero coupon convertible subordinated notes is estimated by obtaining market quotes. The fair value of general corporate debt, including current installments, at January 28, 2006 is $417.4 million versus a carrying value of $399.6 million. The fair value of the zero coupon convertible subordinated notes, as of January 28, 2006, is $437.3 million versus a carrying value of $383.3 million. These estimates do not necessarily reflect certain provisions or restrictions in the various debt agreements which might affect our ability to settle these obligations.         In May 2005, we entered into a $500 million four-year revolving credit facility and a $500 million five-year revolving credit facility. These arrangements replaced our $370 million five-year revolving credit facility entered into in March 2002 and our $330 million 364-day revolving credit facility, which had been extended through July 15, 2005. The new agreements have no compensating balance requirements and have various covenants including a requirement of a specified ratio of debt to earnings. The revolving credit facilities are used as backup to our commercial paper program. As of January 28, 2006 there were no outstanding amounts under our credit facilities. The maximum amount of our U.S. short-term borrowings outstanding was $566.5 million during fiscal 2006, $5.0 million during fiscal 2005 and  F-14    Table of Contents  $27.0 million during fiscal 2004. The weighted average interest rate on our U.S. short-term borrowings was 3.69% in fiscal 2006, 2.04% in fiscal 2005 and 1.09% in fiscal 2004.         As of January 28, 2006, Winners had credit lines totaling C$20 million, including C$10 million to meet their operating needs and C$10 million for their letter of credit facility. There were credit lines totaling C$20 million at both January 28, 2006 and January 29, 2005. The maximum amount outstanding under our Canadian credit lines was C$4.6 million in fiscal 2006, C$6.8 million in fiscal 2005, and C$5.6 million in fiscal 2004. As of January 28, 2006, T.K. Maxx had a £2 million credit line to meet certain operating needs. The maximum amount outstanding under this credit line in fiscal 2006 was £1.7 million. There were no outstanding borrowings on either of these credit lines at January 28, 2006 or January 29, 2005.         D.  Financial Instruments          TJX enters into financial instruments to manage our cost of borrowing and to manage our exposure to changes in foreign currency exchange rates.         Interest Rate Contracts: In December 1999, prior to the issuance of the $200 million ten-year notes, TJX entered into a rate-lock agreement to hedge the underlying treasury rate of notes. The cost of this agreement has been deferred and is being amortized to interest expense over the term of the notes and results in an effective fixed rate of 7.60% on this debt. During fiscal 2004, TJX entered into interest rate swaps on $100 million of the $200 million ten-year notes effectively converting the interest on that portion of the unsecured notes from fixed to a floating rate of interest indexed to the six-month LIBOR rate. The maturity date of the interest rate swaps coincides with the maturity date of the underlying debt. Under these swaps, TJX pays a specified variable interest rate and receives the fixed rate applicable to the underlying debt. The interest income/expense on the swaps is accrued as earned and recorded as an adjustment to the interest expense accrued on the fixed-rate debt. The interest rate swaps are designated as fair value hedges of the underlying debt. The fair value of the contracts, excluding the net interest accrual, amounted to a liability of $4.6 million, $2.9 million and $3.1 million as of January 28, 2006, January 29, 2005 and January 31, 2004, respectively. The valuation of the swaps results in an offsetting fair value adjustment to the debt hedged; accordingly, long-term debt has been reduced by $4.6 million in fiscal 2006, $2.9 million in fiscal 2005 and was reduced by $3.1 million in fiscal 2004. The average effective interest rate, on the $100 million of the 7.45% unsecured notes to which the swaps apply, was approximately 8.30% in fiscal 2006, 6.45% in fiscal 2005 and 5.30% in fiscal 2004.         During fiscal 2006, concurrent with the issuance of the C$235 million three-year note, TJX entered an interest rate swap on the entire principal amount of the note converting the interest on the note from floating to a fixed rate of interest at approximately 4.136%. The maturity date of the interest rate swap coincides with the maturity date of the underlying debt. Under this swap, TJX pays a specified fixed interest rate and receives the floating rate applicable to the underlying debt. The interest income/expense on the swaps is accrued as earned and recorded as an adjustment to the interest expense accrued on the floating-rate debt. The interest rate swap is designated as a cash flow hedge of the underlying debt. The fair value of the contract, excluding the net interest accrual, amounted to an asset of $95,000 (C$110,000) as of January 28, 2006. The valuation of the swap results in an offsetting adjustment to other comprehensive income. The average effective interest rate, on the note to which the swap applies, was approximately 4.52% in fiscal 2006.         Foreign Currency Contracts: TJX enters into forward foreign currency exchange contracts to obtain an economic hedge on firm U.S. dollar and Euro merchandise purchase commitments made by its foreign subsidiaries, T. K. Maxx (United Kingdom) and Winners (Canada). These commitments are typically six months or less in duration. The contracts outstanding at January 28, 2006 cover certain commitments for the first quarter of fiscal 2007. TJX elected not to apply hedge accounting rules to these contracts. The change in the fair value of these contracts resulted in expense of $2.5 million in fiscal 2006, income of $1.8 million in fiscal 2005 and income of $1.1 million in fiscal 2004. TJX also enters into forward foreign currency exchange contracts to obtain an economic hedge on certain foreign intercompany payables, primarily license fees, for which we elected not to apply hedge accounting rules. There were no such contracts outstanding at January 28, 2006. The change in fair value of these contracts resulted in expense of $54,000 in fiscal 2006, income of $1.9 million in fiscal 2005 and expense of $1 million in fiscal 2004. The gain or loss on these contracts is ultimately offset by a similar gain or loss on the underlying item being hedged.  F-15   Table of Contents        TJX also enters into foreign currency forward and swap contracts in both Canadian dollars and British pound sterling and accounts for them as either a hedge of the net investment in and between our foreign subsidiaries or as a cash flow hedge of certain long-term intercompany debt. We apply hedge accounting to these hedge contracts of our investment in foreign operations, and changes in fair value of these contracts, as well as gains and losses upon settlement, are recorded in accumulated other comprehensive income, offsetting changes in the cumulative foreign translation adjustments of our foreign divisions. The change in fair value of the contracts designated as a hedge of our investment in foreign operations resulted in a gain of $15.0 million, net of income taxes, in fiscal 2006, a gain of $3.8 million, net of income taxes, in fiscal 2005, and a loss of $24.7 million, net of income taxes, in fiscal 2004. The change in the cumulative foreign currency translation adjustment resulted in a loss of $32.6 million, net of income taxes, in fiscal 2006, a loss of $10.7 million, net of income taxes, in fiscal 2005, and a gain of $14.3 million, net of income taxes, in fiscal 2004. Amounts included in other comprehensive income relating to cash flow hedges are reclassified to earnings as the currency exposure on the underlying intercompany debt impacts earnings. The net loss recognized in fiscal 2006 related to cash flow forward exchange contracts and related underlying activity was $13.8 million, net of income taxes. This amount was offset by a non-taxable gain of $22.5 million related to the underlying exposure and is also included as component of selling, general and administrative expenses in the statement of income. The net loss recognized in fiscal 2005 related to cash flow forward exchange contracts and related underlying activity was $13.9 million, net of income taxes, this amount was offset by a gain of $11.9 million, net of income taxes, related to the underlying exposure and is also included as component of selling, general and administrative expenses in the statement of income. We estimate that $4.6 million of losses, net of income taxes, deferred in accumulated other comprehensive income will be recognized in earnings over the next twelve months.         TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt and intercompany interest payable. The changes in fair value of these contracts are recorded in the statements of income and are offset by marking the underlying item to fair value in the same period. Upon settlement, the realized gains and losses on these contracts are offset by the realized gains and losses of the underlying item in the statement of income. The net impact of hedging activity related to these intercompany payables resulted in income of $318,000, in fiscal 2006 and expense of $2.2 million and $1.6 million in fiscal 2005 and 2004, respectively.         The value of foreign currency exchange contracts relating to inventory commitments is reported in current earnings as a component of cost of sales, including buying and occupancy costs. The income statement impact of all other foreign currency contracts is reported as a component of selling, general and administrative expenses.  F-16   Table of Contents        Following is a summary of TJX’s derivative financial instruments and related fair values, outstanding at January 28, 2006:                                                         Blended                   Contract   Fair Value Asset   In Thousands   Pay   Receive   Rate   (Liability)             Fair value hedges:                                            Interest rate swap fixed to floating on notional of $50,000      LIBOR+ 4.17 %     7.45 %     N/A     U.S.$ (3,107 )           Interest rate swap fixed to floating on notional of $50,000      LIBOR+ 3.42 %     7.45 %     N/A     U.S.$ (1,737 )           Intercompany balances, primarily short-term      C$128,207       U.S.$111,755       0.8717     U.S.$ (741 )             debt and related interest      £35,935       U.S.$63,369       1.7634     U.S.$ (403 )         Cash flow hedge:                                            Interest rate swap floating to fixed on notional of C$235,000      4.136 %     CAD BA %     N/A     U.S.$ 95             Intercompany balances, primarily long-term debt and related     interest      C$355,000       U.S.$225,540       0.6353     U.S.$ (106,586 )         Net investment hedges:                                            Net investment in and between foreign      U.S.$47,949       C$55,000       0.8718     U.S.$ 126               operations      £136,000       C$318,094       2.3389     U.S.$ 33,581           Hedge accounting not elected:                                            Merchandise purchase commitments      C$69,992       U.S.$60,183       0.8599     U.S.$ (789 )         £10,681       U.S.$18,570       1.7387     U.S.$ (306 )         £13,382       €19,365       1.4471     U.S.$ (181 )                                                           U.S.$ (80,048 )                                       The fair value of the derivatives is classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts. Following are the balance sheet classifications of the fair value of our derivatives:                             January 28,   January 29,   In Thousands   2006   2005             Current assets    $ 1,328     $ 2,840           Non-current assets      33,081       14,807           Current liabilities      (16,527 )     (4,380 )         Non-current liabilities      (97,930 )     (85,528 )                         Net fair value asset (liability)    $ (80,048 )   $ (72,261 )                           TJX’s forward foreign currency exchange and swap contracts require us to make payments of certain foreign currencies or U.S. dollars for receipt of Canadian dollars, U.S. dollars or Euros. All of these contracts except the contracts relating to our investment in our foreign operations and long-term debt mature during fiscal 2007. The British pound sterling investment hedges have maturities from fiscal 2007 to fiscal 2009, the Canadian dollar investment hedge contracts and long-term debt hedge contracts have maturities from fiscal 2007 to fiscal 2010.         The counterparties to the forward exchange contracts and swap agreements are major international financial institutions and the contracts contain rights of offset, which minimize our exposure to credit loss in the event of nonperformance by one of the counterparties. We do not require counterparties to maintain collateral for these contracts. We periodically monitor our position and the credit ratings of the counterparties and do not anticipate losses resulting from the nonperformance of these institutions.   E.       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 our leases are store operating leases with a ten-year initial term and options to extend for one or more five-year periods. Certain Marshalls leases, acquired in fiscal 1996, had remaining terms ranging up to  F-17   Table of Contents  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, we are generally required to pay insurance, real estate taxes and other operating expenses including, in some cases, rentals based on a percentage of sales. These costs were of an amount equal to approximately one-third of the total minimum rent for the fiscal year ended January 28, 2006 and January 29, 2005, respectively.         Following is a schedule of future minimum lease payments for continuing operations as of January 28, 2006:                             Capital   Operating   In Thousands   Lease   Leases             Fiscal Year                          2007    $ 3,726     $ 766,622           2008      3,726       726,121           2009      3,726       687,432           2010      3,726       614,156           2011      3,726       533,163           Later years      19,219       1,708,410                           Total future minimum lease payments      37,849     $ 5,035,904                           Less amount representing interest      11,901                                   Net present value of minimum capital lease payments    $ 25,948                                     The capital lease commitment relates to a 283,000-square-foot addition to TJX’s home office facility. Rental payments commenced June 1, 2001, and we recognized a capital lease asset and related obligation equal to the present value of the lease payments of $32.6 million.         Rental expense under operating leases for continuing operations amounted to $774.9 million, $713.3 million, and $597.8 million for fiscal 2006, 2005 and 2004, respectively. Rental expense includes contingent rent and is reported net of sublease income. Contingent rent paid was $7.1 million, $6.9 million, and $8.6 million in fiscal 2006, 2005 and 2004, respectively; and sublease income was $3.0 million in fiscal 2006, 2005 and 2004. The total net present value of TJX’s minimum operating lease obligations approximates $4,020.7 million as of January 28, 2006.         TJX had outstanding letters of credit totaling $39.9 million as of January 28, 2006 and $52.1 million as of January 29, 2005. Letters of credit are issued by TJX primarily for the purchase of inventory.   F.       Stock Compensation Plans         In November 2005, we adopted SFAS 123(R), which is a revision of SFAS 123. SFAS 123(R) supersedes Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees”, and amends Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows”.         We adopted SFAS 123(R) using the “modified retrospective” transition method. The modified retrospective transition method requires that compensation cost be recognized beginning with the date of adoption of SFAS 123 (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the adoption date and (b) based on the requirements of SFAS 123 for all awards granted to employees prior to the adoption date of SFAS 123(R) that remain unvested on the date of adoption. The modified retrospective transition method also allowed companies to adjust prior periods based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures for all prior years of which SFAS 123 was effective. Accordingly, we adjusted our January 25, 2003 Consolidated Statements of Shareholders’ Equity to increase “Retained earnings” by $53.0 million, and established a deferred tax asset for the same amount.         By using the modified retrospective transition method to adopt SFAS 123(R), we adjusted the amount of excess tax benefits we had previously recorded on our Consolidated Balance Sheets. Our accounting under SFAS 123(R) may affect our ability to fully realize the value shown on our balance sheet of deferred tax assets associated with compensation expense. Full realization of these deferred tax assets requires stock options to be exercised at a price equaling or exceeding the sum of the strike price plus the fair value of the option at the grant date. The provisions of SFAS 123(R)  F-18    Table of Contents  do not allow a valuation allowance to be recorded unless the company’s future taxable income is expected to be insufficient to recover the asset. Accordingly, there can be no assurance that the current stock price of our common shares will rise to levels sufficient to realize the entire tax benefit currently reflected in our balance sheet. However, to the extent that additional tax benefits are generated in excess of the deferred taxes associated with compensation expense previously recognized, the potential future impact on income would be reduced.         When the tax deduction exceeds the compensation cost resulting from the exercise of options, a tax benefit is created. Prior to the adoption of SFAS 123(R), we presented all such tax benefits as operating cash flows on our Consolidated Statements of Cash Flows. SFAS 123(R) requires that cash flows resulting from such tax benefits be classified as financing cash flows. Accordingly $3.0 million and $2.6 million of operating cash inflows have been reclassified to cash inflows from financing activity in fiscal 2005 and 2004, respectively. There were no such excess tax benefits in fiscal 2006.         The total compensation cost related to stock based compensation was $58.9 million net of income taxes of $32.3 million, in fiscal 2006, $60.1 million, net of income taxes of $40.0 million, in fiscal 2005, and $55.2 million, net of income taxes of $36.6 million, in fiscal 2004.         TJX has a stock incentive plan under which options and other stock awards may be granted to its directors, officers and key employees. This plan has been approved by TJX’s shareholders and all stock compensation awards are made under this plan. The Stock Incentive Plan, as amended with shareholder approval, provides for the issuance of up to 145.3 million shares with 27.2 million shares available for future grants as of January 28, 2006. TJX issues shares from previously authorized but unissued common stock. On December 6, 2005, the Board of Directors of TJX determined that beginning in fiscal 2007, non-employee directors would no longer be awarded stock option grants under the Stock Incentive Plan, and the plan was amended to eliminate such awards.         Under the Stock Incentive Plan, 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 outstanding vest over a three-year period starting one year after the grant, and are exercisable in their entirety three years after the grant date. Options granted to directors become fully exercisable one year after the date of grant.         For purposes of applying the provisions of SFAS No. 123 and SFAS No. 123(R), the fair value of each option granted during fiscal 2006, 2005 and 2004 is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:                                     Fiscal Year Ended               January 28,   January 29,   January 31,       2006   2005   2004             Risk-free interest rate      3.9 %     3.4 %     3.3 %         Dividend yield      1.0 %     .8 %     .6 %         Expected volatility factor      33 %     35 %     43 %         Expected option life in years      4.5       4.5       6.0           Weighted average fair value of options issued      $6.60       $6.96       $8.75             Expected volatility is based on a combination of implied volatility from traded options on our stock, and historical volatility during a term approximating the expected term of the option granted. We use historical data to estimate option exercise and employee termination behavior within the valuation model. Separate employee groups and option characteristics are considered separately for valuation purposes. The expected option life represents an estimate of the period of time options are expected to remain outstanding based upon historical exercise trends. The risk free rate is for periods within the contractual life of the option based on the U.S. Treasury yield curve in effect at the time of the grant.  F-19    Table of Contents        Stock Options Pursuant to the Stock Incentive Plan: A summary of the status of TJX’s stock options and related Weighted Average Exercise Prices (“WAEP”) is presented below (shares in thousands):                                                             Fiscal Year Ended               January 28, 2006   January 29, 2005   January 31, 2004       Shares   WAEP   Shares   WAEP   Shares   WAEP             Outstanding at beginning of year      48,558     $ 18.44       43,539     $ 16.97       37,196     $ 15.28           Granted      7,003       21.44       12,828       21.76       12,453       20.20           Exercised      (6,010 )     17.04       (6,534 )     14.83       (4,914 )     12.00           Forfeitures      (1,649 )     20.97       (1,275 )     20.06       (1,196 )     18.64                                                   Outstanding at end of year      47,902       18.97       48,558       18.44       43,539       16.97                                                   Options exercisable at end of year      30,457     $ 17.61       25,017     $ 16.04       21,138     $ 14.07                                                     The total intrinsic value of options exercised was $37.5 million, $59.7 million and $41.8 million in fiscal 2006, 2005 and 2004, respectively.         The following table summarizes information about stock options outstanding that are expected to vest and stock options outstanding that are exercisable at January 28, 2006 (amounts in thousands except per share data and years): Options outstanding expected to vest represents total unvested options of 17.4 million adjusted for anticipated forfeitures.                                             Weighted   Weighted           Aggregate   Average   Average           Intrinsic   Remaining   Exercise       Shares   Value   Contract Life   Price             Options Outstanding Expected to Vest         16,357   $ 58,359          8.8 years   $ 21.32           Options Exercisable         30,457   $ 221,683          6.1 years   $ 17.61             A summary of the status of our nonvested stock units and changes during the period ended January 28, 2006 is presented below (shares in thousands):                                     Weighted       Weighted           Average       Average           Grant Date   Restricted   Grant Date       Options   Fair Value   Stock   Fair Value             Nonvested at beginning of year      23,541          $7.81        864        $20.13         Granted      7,003          6.60        377        21.14         Vested      (11,579 )        8.07        (610)        19.47         Forfeited      (1,520 )        7.56        (19)        19.85                               Nonvested at end of year      17,445          $7.17        612        21.41                                 As of January 28, 2006, there was $116.0 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted average period of 1.8 years. The total fair value of shares vested in fiscal 2006 was $93.5 million.         Restricted Stock Pursuant to the Stock Incentive Plan: TJX has also issued restricted stock and performance-based stock awards under the Stock Incentive Plan. Restricted stock awards are issued at no cost to the recipient of the award, and have service restrictions that generally lapse over three to four years from date of grant. Performance-based shares have restrictions that generally lapse over one to four years when and if specified performance criteria are met. The grant date fair value of the award is charged to income ratably over the period during which these awards vest. Such pre-tax charges amounted to $7.2 million, $9.4 million and $10.2 million in fiscal 2006, 2005 and 2004, respectively. The fair value of the awards is determined at date of grant and assumes that performance goals will be achieved. If such goals are not met, no compensation cost is recognized and any recognized compensation cost is reversed.         A combined total of 377,000 shares, 220,000 shares and 600,000 shares for restricted and performance-based awards were issued in fiscal 2006, 2005 and 2004, respectively. 18,750 shares were forfeited during fiscal 2006. No shares  F-20    Table of Contents  were forfeited during fiscal 2005 or 2004. The weighted average market value per share of these stock awards at grant date was $21.14, $22.37 and $19.16 for fiscal 2006, 2005 and 2004, respectively.         In November 2005, we issued a market based deferred share award to our chief executive officer which is indexed to our stock price for a sixty-day period in fiscal 2007 (“measurement period”) whereby the executive can earn up to 94,000 shares of TJX stock. The weighted average grant date fair value of this award was $9.90 per share.         TJX maintained a separate deferred stock compensation plan for its outside directors under which deferred share awards valued at $10,000 each were issued annually to outside directors. During fiscal 2003, the Board merged this deferred stock compensation plan into the Stock Incentive Plan, and all deferred shares earned will be issued pursuant to the Stock Incentive Plan. Beginning in June 2003, the annual deferred share award granted to each outside director is valued at $30,000. As of the end of fiscal 2006, a total of 80,814 deferred shares had been granted under the plan. Actual shares will be issued at termination of service or a change of control. Prior to merging the deferred stock award plan into the Stock Incentive Plan, TJX planned to issue actual shares from shares held in treasury. At January 28, 2006, no shares are held in treasury related to this plan.   G.       Capital Stock and Earnings Per Share         Capital Stock: During fiscal 2005, we completed a $1 billion stock repurchase program begun in fiscal 2003 and initiated another multi-year $1 billion stock repurchase program. This repurchase program was completed in January 2006. In October 2005, we announced a new stock repurchase program, approved by the Board of Directors, pursuant to which we may repurchase up to an additional $1 billion of common stock. We had cash expenditures under all of our repurchase programs of $603.7 million, $594.6 million and $520.7 million in fiscal 2006, 2005 and 2004, respectively, funded primarily by cash generated from operations. The total common shares repurchased amounted to 25.9 million shares in fiscal 2006, 25.1 million shares in fiscal 2005 and 26.8 million shares in fiscal 2004. As of January 28, 2006, we had repurchased 268,298 shares of our common stock at a cost of $6.6 million under the current $1 billion stock repurchase program. All shares repurchased under our stock repurchase programs have been retired.         TJX has authorization to issue up to 5 million shares of preferred stock, par value $1. There was no preferred stock issued or outstanding at January 28, 2006.         Earnings Per Share: In October 2004, the Emerging Issues Task Force (“EITF”) of the Financial Accounting Standards Board (“FASB”) reached a consensus that EITF Issue No. 04-08, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” would be effective for reporting periods ending after December 15, 2004. This accounting pronouncement affects the company’s treatment, for earnings per share purposes, of its $517.5 million zero coupon convertible subordinated notes issued in February 2001. The notes are convertible into 16.9 million shares of TJX common stock if the sale price of our stock reaches certain levels or other contingencies are met. Prior to this reporting period, the 16.9 million shares were excluded from the diluted earnings per share calculation because criteria for conversion had not been met. EITF Issue No. 04-08 requires that shares associated with contingently convertible debt be included in diluted earnings per share computations regardless of whether contingent conversion conditions have been met. EITF Issue No. 04-08 also requires that diluted earnings per share for all prior periods be adjusted to reflect this change. As a result, diluted earnings per share for all periods presented reflect the assumed conversion of our convertible subordinated notes.  F-21    Table of Contents        The following schedule presents the calculation of basic and diluted earnings per share for income from continuing operations:                                       Fiscal Year Ended               January 28,   January 29,   January 31,   Amounts In Thousands Except Per Share Amounts   2006   2005   2004           (53 Weeks)     Basic earnings per share:                                    Net income      $690,423       $609,699       $609,412                                   Weighted average common stock outstanding for basic earnings per     share calculation      466,537       488,809       508,359             Basic earnings per share      $1.48       $1.25       $1.20       Diluted earnings per share:                                    Net income      $690,423       $609,699       $609,412             Add back: Interest expense on zero coupon convertible     subordinated notes, net of income taxes      4,532       4,482       4,823                                   Net income used for diluted earnings per share calculation      $694,955       $614,181       $614,235                                   Weighted average common stock outstanding for basic earnings per     share calculation      466,537       488,809       508,359             Assumed conversion/exercise of:                                    Convertible subordinated notes      16,905       16,905       16,905             Stock options and awards      8,058       3,947       6,037                                   Weighted average common shares for diluted earnings per share     calculation      491,500       509,661       531,301                                   Diluted earnings per share      $1.41       $1.21       $1.16             The weighted average common shares for the diluted earnings per share calculation exclude the incremental effect related to outstanding stock options, the exercise price of which is in excess of the related fiscal year’s average price of TJX’s common stock. Such options are excluded because they would have an antidilutive effect. There were 190,800 and 22.7 million such options excluded as of January 28, 2006 and January 31, 2004, respectively. No such options were excluded as of January 29, 2005.   H.       Income Taxes         The provision for income taxes includes the following:                                       Fiscal Year Ended               January 28,   January 29,   January 31,   In Thousands:   2006   2005   2004           (53 Weeks)         Current:                                    Federal      $317,721       $276,248       $236,231             State      42,014       64,926       53,648             Foreign      47,582       15,320       24,300           Deferred:                                    Federal      (84,771 )     18,374       56,379             State      (420 )     (4,581 )     1,890             Foreign      (3,222 )     8,965       4,878                                 Provision for income taxes      $318,904       $379,252       $377,326                            F-22    Table of Contents        TJX had net deferred tax (liabilities) as follows:                                 January 28,   January 29,   In Thousands   2006   2005             Deferred tax assets:                            Foreign net operating loss carryforward    $ -     $ 765             Reserve for discontinued operations      5,445       4,209             Reserve for closed store and restructuring costs      3,466       3,028             Pension, stock compensation, postretirement and employee benefits      160,911       147,964             Leases      37,044       34,409             Other      58,387       45,397                               Total deferred tax assets      265,253       235,772                           Deferred tax liabilities:                            Property, plant and equipment      157,785       153,155             Safe harbor leases      9,820       10,914             Tradename      40,950       40,719             Undistributed foreign earnings      -       56,238             Other      41,057       36,579                               Total deferred tax liabilities      249,612       297,605                           Net deferred tax asset (liability)    $ 15,641     $ (61,833 )                           The fiscal 2006 total net deferred tax asset is presented on the balance sheet as a current asset of $9.2 million and a non-current asset of $6.4 million. For fiscal 2005, the net deferred tax liability is presented on the balance sheet as a current liability of $2.3 million and a non-current liability of $59.5 million. TJX has distributed all of the earnings from its Canadian subsidiary through January 28, 2006 and therefore no U.S. deferred income taxes remain as of January 28, 2006. All earnings of TJX’s other foreign subsidiaries are indefinitely reinvested and no deferred taxes have been provided on those earnings. The net deferred tax asset (liability) summarized above includes deferred taxes relating to temporary differences at our foreign operations and amounted to $22.1 million net liability as of January 28, 2006 and $31.0 million net liability as of January 29, 2005.         Tax legislation enacted in 2004, allowed companies to repatriate the undistributed earnings of its foreign operations in fiscal 2006 at an effective U.S. Federal income tax rate of 5.25%. TJX recognized a one-time tax benefit of $47 million, or $.10 per share, from the repatriation of U.S. $259.5 million of Canadian earnings during the fourth quarter of fiscal 2006. In addition, during the fourth quarter of fiscal 2006 TJX corrected its accounting for the tax impact of foreign currency gains on certain intercompany loans. We had previously established a deferred tax liability on these gains which are not taxable. The impact of correcting for the tax treatment of these gains results in a tax benefit of $22 million. The cumulative impact of this adjustment through the end of the third quarter of fiscal 2006 was $18.2 million, all of which was recorded in the fourth quarter of fiscal 2006. Of the $18.2 million, $10.1 million related to fiscal 2005.         In fiscal 2006, TJX utilized a United Kingdom net operating loss carryforward of approximately $2.4 million. As of January 28, 2006, there are no United Kingdom net operating loss carryforwards.  F-23    Table of Contents        TJX’s worldwide effective income tax rate was 31.6% for fiscal 2006, 38.3% for fiscal 2005 and 38.2% for fiscal 2004. The difference between the U.S. federal statutory income tax rate and TJX’s worldwide effective income tax rate is reconciled below:                                     Fiscal Year Ended               January 28,   January 29,   January 31,       2006   2005   2004             U.S. federal statutory income tax rate      35.0 %     35.0 %     35.0 %         Effective state income tax rate      3.9       4.3       4.2           Impact of foreign operations      .5       (.4 )     (.6 )         Impact of repatriation of foreign earnings      (4.7 )     -       -           Impact of tax free currency gains on intercompany loans     including correction of deferred tax liability      (2.1 )     -       -           All other      (1.0 )     (.6 )     (.4 )                               Worldwide effective income tax rate      31.6 %     38.3 %     38.2 %                           I.       Pension Plans and Other Retirement Benefits         Pension: TJX has a funded defined benefit retirement plan covering the majority of its full-time U.S. employees. Employees who have attained twenty-one years of age and have completed one year of service are covered under the plan. No employee contributions are required and benefits are based on compensation earned in each year of service. Effective February 1, 2006, new employees will not participate in this plan but will be eligible to receive enhanced employer contributions to their 401(k) plans. This plan amendment will not have an impact on fiscal 2007 pension expense, but will result in savings in future years. We also have an unfunded supplemental retirement plan which covers key employees of the Company and provides additional retirement benefits based on average compensation. Our funded defined benefit retirement plan assets are invested primarily in stock and bonds of U.S. corporations, excluding TJX, as well as various investment funds.         Presented below is financial information relating to TJX’s funded defined benefit retirement plan (Funded Plan) and its unfunded supplemental pension plan (Unfunded Plan) for the fiscal years indicated. The valuation date for both plans is as of December 31 prior to the fiscal year end date:                                                 Funded Plan   Unfunded Plan       Fiscal Year Ended   Fiscal Year Ended               January 28,   January 29,   January 28,   January 29,   Dollars in Thousands   2006   2005   2006   2005             Change in projected benefit obligation:                                            Projected benefit obligation at beginning of year      $340,111       $288,758       $51,041       $45,817               Service cost      33,616       27,937       1,015       1,284               Interest cost      19,756       17,074       2,883       2,763               Actuarial losses      21,439       14,171       3,744       3,339               Liability transferred from Unfunded Plan      835       -       (835 )     -               Benefits paid      (7,321 )     (6,735 )     (1,978 )     (2,162 )             Expenses paid      (1,201 )     (1,094 )     -       -                                         Projected benefit obligation at end of year      $407,235       $340,111       $55,870       $51,041                                         Accumulated benefit obligation at end of year      $366,501       $315,256       $37,122       $34,326                                  F-24    Table of Contents                                                Funded Plan   Unfunded Plan       Fiscal Year Ended   Fiscal Year Ended               January 28,   January 29,   January 28,   January 29,   Dollars in Thousands   2006   2005   2006   2005             Change in plan assets:                                            Fair value of plan assets at beginning of year    $ 323,375     $ 274,171     $ -     $ -               Actual return on plan assets      18,194       32,033       -       -               Employer contribution      40,000       25,000       1,978       2,162               Benefits paid      (7,321 )     (6,735 )     (1,978 )     (2,162 )             Expenses paid      (1,201 )     (1,094 )     -       -                                         Fair value of plan assets at end of year    $ 373,047     $ 323,375     $ -     $ -                                       Reconciliation of funded status:                                            Projected benefit obligation at end of year    $ 407,235     $ 340,111     $ 55,870     $ 51,041             Fair value of plan assets at end of year      373,047       323,375       -       -                                         Funded status - excess obligations      34,188       16,736       55,870       51,041             Unrecognized transition obligation      -       -       -       75             Employer contributions after measurement date and on or before     fiscal year end      -       -       213       151             Unrecognized prior service cost      178       236       602       957             Unrecognized actuarial losses      98,075       75,536       14,989       14,718                                         Net (asset) liability recognized    $ (64,065 )   $ (59,036 )   $ 40,066     $ 35,140                                       Amount recognized in the statements of financial position     consists of:                                            Net (asset) accrued liability    $ (64,065 )   $ (59,036 )   $ 40,066     $ 35,140             Intangible asset      -       -       -       -                                         Net (asset) liability recognized    $ (64,065 )   $ (59,036 )   $ 40,066     $ 35,140                                         The net asset attributable to the funded plan is reflected on the balance sheets as a non-current asset of $25.6 million and a current asset of $38.5 million as of January 28, 2006 and a non-current asset of $26.1 million and a current asset of $32.9 million as of January 29, 2005. The net accrued liability attributable to TJX’s unfunded supplemental retirement plan is included in other long-term liabilities on the balance sheets.         Weighted average assumptions for measurement purposes:                                             Funded Plan   Unfunded Plan       Fiscal Year Ended   Fiscal Year Ended               January 28,   January 29,   January 28,   January 29,   Dollars in Thousands   2006   2005   2006   2005             Discount rate      5.50 %     5.75 %     5.50 %     5.50 %         Expected return on plan assets      8.00 %     8.00 %     NA       NA           Rate of compensation increase      4.00 %     4.00 %     6.00 %     6.00 %           We select the assumed discount rate using available high quality bond yields with maturities that match the forecasted cash flows of the related plan.         We made aggregate cash contributions of $42.0 million, $27.2 million and $19.7 million for fiscal 2006, 2005 and 2004, respectively, to the defined benefit retirement plan and to fund current benefit and expense payments under the unfunded supplemental retirement plan. Our funding policy is to fund any required contribution to the plan at the full funding limitation. Contributions in excess of any required contribution will be made so as to fully fund the accumulated benefit obligation to the extent such contribution is allowed for tax purposes. As a result of voluntary funding contributions made in fiscal 2006, fiscal 2005 and fiscal 2004, we do not anticipate any funding requirements for fiscal  F-25    Table of Contents  2007. The following is a summary of our target allocation for plan assets along with the actual allocation of plan assets as of the valuation date for the fiscal years presented:                                         Actual Allocation           for Fiscal Year Ended                   Target   January 28,   January 29,       Allocation   2006   2005             Equity securities      60 %     60 %     60 %         Fixed income      40 %     38 %     38 %         All other - primarily cash      -       2 %     2 %           We employ a total return investment approach whereby a mix of equities and fixed income investments is used to maximize the long-term return of plan assets with a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, funded plan status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as small and large capitalizations. Both actively managed and passively invested portfolios may be utilized for U.S. equity investments. Other assets such as real estate funds, private equity funds, and hedge funds are currently used for their diversification and return enhancing characteristics. Derivatives may be used to reduce market exposure, however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies.         We employ a building block approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term historical relationships between equities and fixed income are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long term. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. Proper consideration is also given to asset class diversification and rebalancing as well as to the expected returns likely to be earned over the life of the plan by each category of plan assets. Peer data and historical returns are reviewed to check for reasonability and appropriateness.         Following are the components of net periodic benefit cost for our pension plans:                                                               Funded Plan   Unfunded Plan       Fiscal Year Ended   Fiscal Year Ended               January 28,   January 29,   January 31,   January 28,   January 29,   January 31,   In Thousands   2006   2005   2004   2006   2005   2004           (53 Weeks)       (53 Weeks)         Service cost    $ 33,616     $ 27,937     $ 22,288     $ 1,015     $ 1,284     $ 1,146           Interest cost      19,756       17,074       15,088       2,883       2,763       2,673           Expected return on plan assets      (25,474 )     (21,585 )     (16,941 )     -       -       -           Amortization of transition obligation      -       -       -       75       75       75           Amortization of prior service cost      57       56       58       355       475       360           Recognized actuarial losses      6,405       6,309       9,320       3,249       1,785       4,023                                                   Net periodic pension cost    $ 34,360     $ 29,791     $ 29,813     $ 7,577     $ 6,382     $ 8,277                                                   Weighted average assumptions for expense purposes:                                                            Discount rate      5.75 %     6.00 %     6.50 %     5.50 %     5.55 %     5.85 %           Expected return on plan assets      8.00 %     8.00 %     8.00 %     NA       NA       NA             Rate of compensation increase      4.00 %     4.00 %     4.00 %     6.00 %     6.00 %     6.00 %           Net pension expense for fiscal 2006 and fiscal 2005 reflects an increase in service cost due to a reduction in the discount rate and is impacted by the change in the amortization of actuarial losses.         The unrecognized gains and losses in excess of 10% of the projected benefit obligation are amortized over the average remaining service life of participants. In addition, for the unfunded plan, unrecognized actuarial gains and losses that exceed 30% of the projected benefit obligation are fully recognized in net periodic pension cost.  F-26    Table of Contents        Following is a schedule of the benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter:                             Funded Plan   Unfunded Plan   In Thousands   Expected Benefit Payments   Expected Benefit Payments             Fiscal Year                          2007      $  9,587       $ 7,626           2008      10,741       2,051           2009      12,067       7,411           2010      13,644       1,978           2011      15,404       2,533           2012 through 2016      113,147       14,060             TJX also sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code for all eligible U.S. employees. As of December 31, 2005 and 2004, assets under the plan totaled $567.6 million and $504.7 million respectively, and are invested in a variety of funds. Employees may contribute up to 50% of eligible pay. TJX matches employee contributions, up to 5% of eligible pay, at rates ranging from 25% to 50% based upon the Company’s performance. TJX contributed $7.9 million in fiscal 2006, $8.1 million in fiscal 2005 and $7.3 million in fiscal 2004 to the 401(k) plan. Employees cannot invest their contributions in the TJX stock fund option in the 401(k) plan, and may elect to invest up to only 50% of the Company’s contribution in the TJX stock fund; the TJX stock fund has no other trading restrictions. The TJX stock fund represents 3.5%, 4.3% and 4.5% of plan investments at December 31, 2005, 2004 and 2003, respectively.         During fiscal 1999, TJX established a nonqualified savings plan for certain U.S. employees. TJX matches employee contributions at various rates which amounted to $313,000 in fiscal 2006, $274,000 in fiscal 2005, and $226,000 in fiscal 2004. TJX transfers employee withholdings and the related company match to a separate trust designated to fund the future obligations. The trust assets, which are invested in a variety of mutual funds, are included in other assets on the balance sheets.         In addition to the plans described above, we also maintain retirement/deferred savings plans for all eligible associates at our foreign subsidiaries. We contributed for these plans $3.0 million, $2.7 million and $2.3 million in fiscal 2006, 2005 and 2004, respectively.         Postretirement Medical: TJX has an unfunded postretirement medical plan that provides limited postretirement medical and life insurance benefits to employees who participate in our retirement plan and who retire at age 55 or older with ten or more years of service. During the fourth quarter of fiscal 2006, TJX eliminated this benefit for all active associates and modified the benefit to current retirees enrolled in the plan. The plan amendment replaces the previous medical benefits with a defined amount (up to $35.00 per month) that approximates the retirees cost of enrollment in the Medicare Plan.  F-27    Table of Contents        The valuation date for the plan is as of December 31 prior to the fiscal year end date. Presented below is certain financial information relating to the unfunded postretirement medical plan for the fiscal years indicated:                                 Postretirement Medical       Fiscal Year Ended               January 28,   January 29,   Dollars In Thousands   2006   2005             Change in benefit obligation:                            Benefit obligation at beginning of year    $ 47,053     $ 40,035               Service cost      3,780       3,920               Interest cost      2,142       2,332               Participants’ contributions      86       92               Amendments      (47,481 )     -               Actuarial (gain) loss      (604 )     2,072               Curtailment      (647 )     -               Benefits paid      (1,546 )     (1,398 )                           Benefit obligation at end of year    $ 2,783     $ 47,053                           Change in plan assets:                            Fair value of plan assets at beginning of year    $ -     $ -               Employer contribution      1,461       1,306               Participants’ contributions      86       92               Benefits paid      (1,547 )     (1,398 )                           Fair value of plan assets at end of year    $ -     $ -                                                   Postretirement Medical       Fiscal Year Ended               January 28,   January 29,   Dollars In Thousands   2006   2005             Reconciliation of funded status:                            Benefit obligation at end of year    $ 2,783     $ 47,053             Fair value of plan assets at end of year      -       -                             Funded status - excess obligations      2,783       47,053             Unrecognized prior service cost      (46,853 )     (382 )           Employer contributions after measurement     date and on or before fiscal year end      145       119             Unrecognized actuarial losses      6,141       7,691                             Net accrued liability recognized    $ 43,350     $ 39,625                           Weighted average assumptions for measurement purposes:                            Discount rate      5.25 %     5.50 %           The plan amendment results in a negative plan amendment of $46.8 million which will be amortized into income over the average remaining life (estimated at 12.6 years) of the active participants. Medical inflation is no longer a factor in determining the value of this obligation.  F-28    Table of Contents        Following are components of net periodic benefit cost related to our Postretirement Medical plan:                                       Postretirement Medical               January 28,   January 29,   January 31,   Dollars In Thousands   2006   2005   2004           (53 Weeks)         Service cost    $ 3,780     $ 3,920     $ 3,259           Interest cost      2,142       2,332       2,171           Amortization of prior service cost      (946 )     332       332           Recognized actuarial losses      300       130       68                                 Net periodic benefit cost    $ 5,276     $ 6,714     $ 5,830                                 Weighted average assumptions for expense purposes:                                    Discount rate      5.50 %     6.00 %     6.50 %           Following is a schedule of the benefits expected to be paid under the unfunded postretirement medical plan in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter:                     Expected Benefit   In Thousands   Payments             Fiscal Year                  2007    $ 372           2008      330           2009      289           2010      264           2011      242           2012 through 2016      941             J.      ACCRUED EXPENSES AND OTHER LIABILITIES, CURRENT AND LONG-TERM          The major components of accrued expenses and other current liabilities are as follows:                             January 28,   January 29,   In Thousands   2006   2005             Employee compensation and benefits, current    $ 238,586     $ 217,011           Rent, utilities, and occupancy, including real estate taxes      122,787       107,600           Merchandise credits and gift certificates      127,526       116,587           Insurance      53,550       42,680           Sales tax collections and V.A.T. taxes      96,413       88,679           All other current liabilities      297,805       251,590                           Accrued expenses and other current liabilities    $ 936,667     $ 824,147                             All other current liabilities include accruals for income taxes payable, property additions, dividends, freight and other items, each of which are individually less than 5% of current liabilities.         The major components of other long-term liabilities are as follows:                             January 28,   January 29,   In Thousands   2006   2005             Employee compensation and benefits, long-term    $ 138,739     $ 125,721           Reserve for store closing and restructuring      5,430       5,712           Reserve related to discontinued operations      14,981       12,365           Accrued rent      133,196       115,256           Landlord allowances      45,421       47,057           Fair value of derivatives      97,930       85,528           Long-term liabilities — other      108,953       75,147                           Other long-term liabilities    $ 544,650     $ 466,786                      F-29    Table of Contents        Activity related to the reserves for store closing and restructuring and discontinued operations are detailed in Notes K and L respectively.         K.      DISCONTINUED OPERATIONS RESERVE AND RELATED CONTINGENT     LIABILITIES          We have a reserve for potential future obligations of discontinued operations that relates primarily to real estate leases of former TJX businesses. The reserve reflects TJX’s estimation of its cost for claims, updated quarterly, that have been, or are likely to be, made against TJX for liability as an original lessee or guarantor of the leases of these businesses, after mitigation of the number and cost of lease obligations. At January 28, 2006, substantially all leases of discontinued operations that were rejected in bankruptcy and for which the landlords asserted liability against TJX had been resolved. Although TJX’s actual costs with respect to any of these leases may exceed amounts estimated in our reserve, and TJX may incur costs for leases from these discontinued operations that were not terminated or had not expired, TJX does not expect to incur any material costs related to discontinued operations in excess of the reserve. The reserve balance amounted to $15.0 million as of January 28, 2006, $12.4 million as of January 29, 2005 and $17.5 million as of January 31, 2004. During fiscal 2006, TJX received creditor recoveries of $8.5 million, offset by equivalent additions to the reserve to reflect adjustments to the reserve during the year. Any additional creditor recoveries are expected to be immaterial.         We may also be contingently liable on up to 18 leases of BJ’s Wholesale Club, another former TJX business, for which BJ’s Wholesale Club is primarily liable. Our reserve for discontinued operations does not reflect these leases, because we believe that the likelihood of any future liability to TJX with respect to these leases is remote due to the current financial condition of BJ’s Wholesale Club.         L.      GUARANTEES AND CONTINGENT OBLIGATIONS          We have contingent obligations on leases, for which we were 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 our discontinued operations discussed above, 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.         We also have contingent obligations in connection with some assigned or sublet properties that we are 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 leases discussed in Note K to the consolidated financial statements, and properties of our discontinued operations that we have sublet, if the subtenants did not fulfill their obligations, is approximately $100 million as of January 28, 2006. 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.         We are 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.         M.      SUPPLEMENTAL CASH FLOWS INFORMATION          The cash flows required to satisfy contingent obligations of the discontinued operations as discussed in Note L, are classified as a reduction in cash provided by continuing operations. There are no remaining operating activities relating to these operations.  F-30    Table of Contents        TJX’s cash payments for interest and income taxes and non-cash investing and financing activities are as follows:                                       Fiscal Year Ended               January 28,   January 29,   January 31,   In Thousands   2006   2005   2004           (53 Weeks)         Cash paid for:                                    Interest on debt    $ 30,499     $ 25,074     $ 25,313             Income taxes      365,902       338,952       260,818           Change in accrued expenses due to:                                    Stock repurchase    $ (3,737 )   $ (6,657 )   $ (5,477 )           Dividends payable      6,027       4,160       1,856             There were no non-cash financing or investing activities during fiscal 2006, 2005 or 2004.         N.      SEGMENT INFORMATION          The T.J. Maxx and Marshalls store chains are managed on a combined basis and are reported as the Marmaxx segment. The Winners and HomeSense chains are also managed on a combined basis and operate exclusively in Canada. T.K. Maxx operates in the United Kingdom and the Republic of Ireland. Winners and T.K. Maxx accounted for 19% of TJX’s net sales for fiscal 2006, 16% of segment profit and 20% of all consolidated assets. All of our other store chains operate in the United States with the exception of 14 stores operated in Puerto Rico by Marshalls which include 7 HomeGoods locations in a “Marshalls Mega Store” format. All of our stores, with the exception of HomeGoods, HomeSense and Bob’s Stores sell apparel for the entire family, including jewelry, accessories and footwear, with a limited offering of giftware and home fashions. The HomeGoods and HomeSense stores offer home fashions and home furnishings. Bob’s Stores is a value-oriented retailer of branded family apparel.         We evaluate the performance of our segments based on “segment profit or loss,” which we define as pre-tax income before general corporate expense and interest. “Segment profit or loss,” as defined by TJX, may not be comparable to similarly titled measures used by other entities. In addition, this measure of performance should not be considered an alternative to net income or cash flows from operating activities as an indicator of our performance or as a measure of liquidity.  F-31    Table of Contents        Presented below is selected financial information related to our business segments:                                       Fiscal Year Ended               January 28,   January 29,   January 31,   In Thousands   2006   2005   2004           (53 Weeks)         Net sales:                                    Marmaxx    $ 10,956,788     $ 10,489,478     $ 9,937,206             Winners and HomeSense      1,457,736       1,285,439       1,076,333             T.K. Maxx      1,517,116       1,304,443       992,187             HomeGoods      1,186,854       1,012,923       876,536             A.J. Wright      650,961       530,643       421,604             Bob’s     Stores(1)      288,480       290,557       24,072                               $ 16,057,935     $ 14,913,483     $ 13,327,938                                 Segment profit     (loss):(2)                                    Marmaxx    $ 985,361     $ 982,082     $ 922,907             Winners and HomeSense      120,319       99,701       98,928             T.K. Maxx      69,206       63,975       53,655             HomeGoods      28,418       18,148       45,388             A.J. Wright      (2,202 )     (19,626 )     (2,125 )           Bob’s     Stores(1)      (28,031 )     (18,512 )     (5,025 )                               1,173,071       1,125,768       1,113,728           General corporate     expense(3)      134,112       111,060       99,738           Interest expense, net      29,632       25,757       27,252                                 Income before provision for income taxes    $ 1,009,327     $ 988,951     $ 986,738                                 Identifiable assets:                                    Marmaxx    $ 3,046,811     $ 2,972,526     $ 2,677,291             Winners and HomeSense      522,311       422,215       315,765             T.K. Maxx      602,012       588,170       447,080             HomeGoods      346,812       326,964       291,967             A.J. Wright      223,118       218,788       182,360             Bob’s     Stores(1)      105,041       83,765       77,384             Corporate(4)      650,200       463,045       404,920                               $ 5,496,305     $ 5,075,473     $ 4,396,767                            F-32    Table of Contents                                      Fiscal Year Ended               January 28,   January 29,   January 31,   In Thousands   2006   2005   2004           (53 Weeks)         Capital expenditures:                                    Marmaxx    $ 269,649     $ 224,460     $ 234,667             Winners and HomeSense      57,255       52,214       40,141             T.K. Maxx      104,304       92,170       56,852             HomeGoods      28,864       18,782       45,301             A.J. Wright      24,872       31,767       31,863             Bob’s     Stores(1)      11,004       9,740       213                               $ 495,948     $ 429,133     $ 409,037                                 Depreciation and amortization:                                    Marmaxx    $ 183,864     $ 169,020     $ 154,666             Winners and HomeSense      31,582       24,883       19,956             T.K. Maxx      42,895       35,727       26,840             HomeGoods      22,468       20,881       17,254             A.J. Wright      17,275       14,356       10,128             Bob’s     Stores(1)      7,785       5,894       727             Corporate(5)      8,416       8,298       8,814                               $ 314,285     $ 279,059     $ 238,385                                   (1)       Bob’s Stores results for fiscal year ended January 31,     2004 are for the period following its acquisition on     December 24, 2003.   (2)       A one-time, non-cash charge was recorded in the fiscal year     ended January 29, 2005 to conform accounting policies with     generally accepted accounting principles related to the timing     of rent expense. This change resulted in a one-time, cumulative,     non-cash adjustment of $30.7 million. See note A at     “Lease Accounting.”   (3)       General corporate expense for fiscal 2006 includes costs     associated with executive resignation agreements     ($9 million) and of exiting the     e-commerce business of     ($6 million).   (4)       Corporate identifiable assets consist primarily of cash, prepaid     pension expense and a note receivable.   (5)       Includes debt discount and debt expense amortization.   F-33   Table of Contents        O.      SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)          Presented below is selected quarterly consolidated financial data for fiscal 2006 and 2005 that was prepared on the same basis as the audited consolidated financial statements and includes all adjustments necessary to present fairly, in all material respects, the information set forth therein on a consistent basis.                                                 First   Second   Third   Fourth   In Thousands Except Per Share Amounts   Quarter   Quarter   Quarter   Quarter             Fiscal Year Ended January 28, 2006 - As     Adjusted(1)                                            Net sales    $ 3,651,830     $ 3,647,866     $ 4,041,912     $ 4,716,327             Gross     earnings(2)      863,061       840,005       969,896       1,089,957             Net income      135,581       110,814       155,325       288,703               Basic earnings per share      .28       .24       .34       .63               Diluted earnings per share      .28       .23       .32       .60           Fiscal Year Ended January 28, 2006 - As Reported                                            Net sales    $ 3,651,830     $ 3,647,866     $ 4,041,912     $ 4,716,327             Gross     earnings(2)      870,301       846,490       976,848       1,089,957             Net income      149,344       123,141       171,163       288,703               Basic earnings per share      .31       .26       .37       .63               Diluted earnings per share      .30       .25       .36       .60           Fiscal Year Ended January 29, 2005 - As     Adjusted(1)                                            Net sales    $ 3,352,737     $ 3,414,287     $ 3,817,350     $ 4,329,109             Gross     earnings(2)      827,874       778,857       952,290       955,806             Net income      154,924       105,353       184,442       164,980               Basic earnings per share      .31       .21       .38       .34               Diluted earnings per share      .30       .21       .37       .33           Fiscal Year Ended January 29, 2005 - As Reported                                            Net sales    $ 3,352,737     $ 3,414,287     $ 3,817,350     $ 4,329,109             Gross     earnings(2)      834,391       785,080       960,245       962,020             Net income      168,112       118,242       200,855       176,935               Basic earnings per share      .34       .24       .41       .37               Diluted earnings per share      .32       .23       .40       .35             (1)       Adjusted for impact of expensing of stock options - See     Note A.   (2)       Gross earnings equal net sales less cost of sales, including     buying and occupancy costs.          In November 2005, we adopted Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (SFAS 123(R)) using the modified retrospective method which allows companies to adjust based on the amounts previously recognized under SFAS 123 for purposes of pro forma disclosures for all prior years SFAS 123 was effective. Quarterly results in the table above have been adjusted to reflect the adoption of this statement. The effect of this change on quarterly net income and related earnings per share in both fiscal 2006 and 2005 follow (in thousands except per share amounts):                                             Effect of Adjustment in   Effect of Adjustment in       Fiscal 2006   Fiscal 2005                       Net       Net       Net   Income Per   Net   Income Per   Quarter   Income   Share   Income   Share             First    $ (13,763 )   $ (.02 )   $ (13,188 )   $ (.02 )         Second      (12,327 )     (.02 )     (12,889 )     (.02 )         Third      (15,838 )     (.04 )     (16,413 )     (.03 )         Fourth      NA       NA       (11,955 )     (.02 )                                     Full Year    $ NA     $ NA     $ (54,445 )   $ (.09 )                                F-34   Table of Contents        The third quarter of fiscal 2006 includes the impact of certain one-time events that reduced net income by approximately $12 million, or $.02 per share. These third quarter events included executive resignation agreements, e-commerce exit costs and operating losses, and hurricane related costs including the estimated impact of lost sales, partially offset by a gain from a VISA/ MasterCard antitrust litigation settlement.         The fourth quarter of fiscal 2006 includes a $47 million income tax benefit, or $.10 per share, due to the repatriation of foreign subsidiary earnings and a $22 million tax benefit, or $.04 per share, relating to the correction of the tax treatment of foreign currency gains on certain intercompany loans. See note H to the consolidated financial statements.         During the fourth quarter of fiscal 2005, TJX recorded a one-time non-cash charge to conform its accounting policies with generally accepted accounting principles related to the timing of rent expense. This change resulted in a one-time, cumulative, non-cash adjustment of $19.3 million after-tax, or $.04 per share, which we recorded in the fourth quarter of fiscal 2005. See note A at “Lease Accounting.”  F-35      EX-10.11 2 b58738tjexv10w11.txt EX-10.11 THE STOCK INCENTIVE PLAN, AS AMENDED                                                                      EXHIBIT 10.11                               THE TJX COMPANIES, INC.                               STOCK INCENTIVE PLAN                                (2004 RESTATEMENT)                                   First Amendment        Pursuant to Section 10 of The TJX Companies, Inc. Stock Incentive Plan (2004 Restatement) (as amended, the "Plan"), the Plan is hereby amended as follows:  1.    Section 6(k) is hereby amended by adding the following sentence to the end       thereof:        "Notwithstanding the preceding, there shall be no further Awards granted       to Eligible Directors under this Section 6(k) in respect of any fiscal       year after the fiscal year ending in January 2006."  2.    New Section 7(e) is hereby added to the end of Article 7 to read as       follows:  "(e)  Annual Deferred Stock Awards, Additional Deferred Stock Awards and       Dividend Awards for Eligible Directors.        (i)   Accounts. The Company shall establish and maintain an Account in the             name of each Eligible Director to which the Annual Deferred Stock             Awards, Additional Deferred Stock Awards and Dividend Awards shall             be credited.        (ii)  Annual Awards. On the date of each Annual Meeting commencing at the             Annual Meeting in the year ending in January 2007, each Eligible             Director who is elected a Director at such Annual Meeting shall             automatically and without further action by the Board or Committee             be granted an Annual Deferred Stock Award as provided in subsection             (iv) and an Additional Deferred Stock Award as provided in             subsection (v). On each date other than the date of an Annual             Meeting on which an Eligible Director is first elected a Director by             the Board, the Eligible Director then so elected shall automatically             and without further action by the Board or Committee be granted a             prorated Annual Deferred Stock Award as provided in subsection (iv)             and a prorated Additional Deferred Stock Award as provided in             subsection (v). The grant of each Annual Deferred Stock Award and             Additional Deferred Stock Award shall entitle each recipient,             automatically and without further action by the Board or the             Committee, to Dividend Awards as provided in subsection (vi).        (iii) Nature of Awards. Each Annual Deferred Stock Award, Additional             Deferred Stock Award and Dividend Award shall be an Other             Stock-based Award subject to the terms of this Plan and shall             constitute an unfunded and unsecured promise of the Company to             deliver in the future to such Eligible Director, without payment,             the number of shares of Stock in the amounts and at the times             hereinafter provided. The shares of Stock notionally credited to the             Accounts of Eligible Directors shall                                         -1-               be notional shares only and shall not entitle the Eligible Director             to any voting rights, dividend or distribution or other rights             except as expressly set forth herein. Nothing herein shall obligate             the Company to issue or set aside shares of Stock, in trust or             otherwise, to meet its contractual obligations hereunder.        (iv)  Annual Deferred Stock Award. In respect of each Annual Deferred             Stock Award granted on the date of an Annual Meeting, the Company             shall credit to each Eligible Director's Account, effective as of             the date of such Annual Meeting, the number of notional shares of             Stock, including any fractional share, equal to $50,000 divided by             the Fair Market Value of a share of Stock on the date of such Annual             Meeting. In respect of each Annual Deferred Stock Award granted on a             date other than the date of an Annual Meeting, the Company shall             credit to the Account of the Eligible Director first elected on such             date the number of notional shares of Stock, including any             fractional share, equal to (i) $50,000 divided by the Fair Market             Value of a share of Stock on the date of such first election             multiplied by (ii) the quotient (not greater than one) obtained by             dividing (A) the number of days starting with the date of such first             election and ending on the day first preceding the anticipated date             (as determined by the Administrator) of the next Annual Meeting, by             (B) 365.        (v)   Additional Deferred Stock Award. In addition to the Annual Deferred             Stock Award, the Company shall credit to the Account of each             Eligible Director, effective as of the date that any Annual Deferred             Stock Award is credited to such Account, an Additional Deferred             Stock Award covering the same number of shares as are covered by             such Annual Deferred Stock Award determined in the same manner             prescribed in subsection (iv) above.        (vi)  Dividend Awards. The Company shall credit (each such credit, a             "Dividend Award") the Account of each Eligible Director on the date             of each Annual Meeting and on the date on which an Eligible Director             ceases to be a Director if not the date of an Annual Meeting with a             number of notional shares of Stock, including any fractional share,             equal to the product of (x) the aggregate number of shares of Stock             credited to such Account, excluding any shares first credited as of             such date, (such previously credited shares being referred to in             this subsection (vi) as the "subject shares"), multiplied by (y) the             aggregate amount of the cash dividends per share of Stock for which             record dates occurred during the period from the immediately             preceding Annual Meeting (or, in the case a subject share, from the             date of the initial crediting of such subject share) to the date of             such credit, divided by (z) the Fair Market Value of a share of             Stock the date of such credit.        (vii) Vesting. Each Annual Deferred Stock Award, and any Dividend Awards             in respect of Annual Deferred Stock Awards and/or Additional             Deferred Stock Awards, shall vest immediately upon grant and be             non-forfeitable. Each Additional Deferred Stock Award shall vest and             become non-forfeitable on the date immediately preceding the date of             the Annual Meeting next succeeding the date of grant of such Award;             provided, that the recipient is still a Director on such date. In             the event that an Eligible Director terminates his or her service as             a Director for any reason prior                                         -2-               to such vesting date, the Eligible Director shall forfeit any then             unvested Additional Deferred Stock Award.       (viii) Delivery. The Company shall deliver to an Eligible Director (or a             former Eligible Director) the number of shares of Stock, rounded up             to the next full share, represented by notional shares of Stock             credited to the Account of such Eligible Director in respect of             Annual Deferred Stock Awards (including any Dividend Awards made in             respect of such Annual Deferred Stock Awards) at the earlier of the             following: (x) immediately prior to a Change in Control or (y) as             soon as practicable following the termination of the Eligible             Director's service as a Director for any reason (including death).             With respect to any Additional Deferred Stock Award, absent an             election to defer delivery of the shares of Stock subject to such             Award pursuant to subsection (ix) below, the Company shall deliver             to an Eligible Director the number of shares of Stock, rounded up to             the next full share, represented by notional shares of Stock             credited to the Account of such Eligible Director in respect of such             Additional Deferred Stock Award (including any Dividend Awards made             in respect of such Additional Deferred Stock Award) at the earlier             of the following: (x) immediately prior to a Change in Control or             (y) the date following the date of vesting pursuant to subsection             (vii) above. In the event of a termination by reason of death, such             shares of Stock shall be delivered to such beneficiary or             beneficiaries designated by the Eligible Director in writing in such             form, and delivered prior to his or her death to such person at the             Company, as specified by the Company or, in the absence of such a             designation, to the legal representative of Eligible Director's             estate.        (ix)  Deferral of Delivery of Additional Deferred Stock Awards. By filing             a written notice to the Company in such form, and delivered to such             person at the Company, as specified by the Company, an Eligible             Director may irrevocably elect to defer receipt of the delivery of             shares of Stock representing all or a portion of the notional shares             of Stock subject to any Additional Deferred Stock Award (including             any Dividend Awards made in respect of such notional shares) until             the earlier of the following: (x) immediately prior to a Change in             Control or (y) as soon as practicable following the termination of             the Eligible Director's service as a Director for any reason             (including death). Any election made pursuant to this subsection             (ix) must be submitted with respect to any Additional Deferred Stock             Award (A) in the case of the Additional Deferred Stock Award granted             on the date an Eligible Director is first elected as a Director, no             later than 30 days after the date of such Eligible Director's             election to the Board or (B) in the case of any other Additional             Deferred Stock Award, no later than December 31 of the calendar year             preceding the calendar year in which such Award is granted, or (C)             at such other time as is necessary to satisfy the requirements of             Section 409A, as determined by the Administrator. "                                         -3-    3.    Section 14 is hereby amended to read as follows:  "SECTION 14. DEFINITIONS.        The following terms shall be defined as set forth below:              (a) "Account" means a bookkeeping account established and maintained       under Section 7(e) in the name of each Eligible Director to which Annual       Deferred Stock Awards, Additional Deferred Stock Awards, and Dividend       Awards are credited hereunder.              (b) "Act" means the Securities Exchange Act of 1934.              (c) "Additional Deferred Stock Award" means an Award granted to an       Eligible Director pursuant to Section 7(e)(v).              (d) "Adoption Date" means April 7, 2004.              (e) "Annual Deferred Stock Award" means an Award granted to an       Eligible Director pursuant to Section 7(e)(iv).              (f) "Annual Meeting" shall mean the annual meeting of stockholders       of the Company.              (g) "Approved Performance Criteria" means criteria based on any one       or more of the following (on a consolidated, divisional, line of business,       geographical or area of executive's responsibilities basis): one or more       items of or within (i) sales, revenues, assets or expenses; (ii) earnings,       income or margins, before or after deduction for all or any portion of       interest, taxes, depreciation, or amortization, whether or not on a       continuing operations and aggregate or per share basis; (iii) return on       investment, capital, assets, sales or revenues; and (iv) stock price. In       determining whether a performance goal based on one or more Approved       Performance Criteria has been satisfied for any period, any extraordinary       item, change in generally accepted accounting principles, or change in law       (including regulations) that would affect the determination as to whether       such performance goal had been achieved will automatically be disregarded       or taken into account, whichever would cause such performance goal to be       more likely to be achieved, and to the extent consistent with Section       162(m) of the Code the Committee may provide for other objectively       determinable and nondiscretionary adjustments; provided, that nothing       herein shall be construed as limiting the Committee's authority to reduce       or eliminate a Performance Award (including, without limitation, by       restricting vesting under any such Award) that would otherwise be deemed       to have been earned.              (h) "Award" or "Awards" except where referring to a particular       category of grant under the Plan shall include Stock Options, Other       Stock-based Awards and Performance Awards.              (i) "Board" means the Board of Directors of the Company.                                         -4-               (j) "Cause" means a felony conviction of a participant or the       failure of a participant to contest prosecution for a felony, or a       participant's willful misconduct or dishonesty, any of which is directly       harmful to the business or reputation of the Company or any Subsidiary.              (k) "Code" means the Internal Revenue Code of 1986, as amended, and       any successor Code, and related rules, regulations and interpretations.              (l) "Committee" means the Committee referred to in Section 2. If at       any time no Committee shall be in office, the functions of the Committee       shall be exercised by the Board.              (m) "Company" is defined in Section 1.              (n) "Director" means a member of the Board.              (o) "Disability" means disability as determined in accordance with       standards and procedures similar to those used under the Company's long       term disability program.              (p) "Dividend Award" means an Award granted to an Eligible Director       pursuant to Section 7(e)(vi).              (q) "Eligible Director" means a Director who is not employed (other       than as a Director) by the Company or by any Subsidiary.              (r) "Fair Market Value" on any given date means the last sale price       regular way at which Stock is traded on such date as reflected in the New       York Stock Exchange Composite Transactions Index or, where applicable, the       value of a share of Stock as determined by the Committee in accordance       with the applicable provisions of the Code.              (s) "Full Value Award" means an Award other than a Stock Option or       an SAR.              (t) "ISO" means a Stock Option intended to be and designated as an       "incentive stock option" as defined in the Code.              (u) "New Awards" is defined in Section 3(a).              (v) "Non-Employee Director" shall have the meaning set forth in Rule       16b-3(b)(3) promulgated under the Act, or any successor definition under       the Act.              (w) "NSO" means any Stock Option that is not an ISO.              (x) "Normal Retirement" means retirement from active employment with       the Company and its Subsidiaries at or after age 65 with at least five       years of service for the Company and its Subsidiaries as specified in The       TJX Companies, Inc. Retirement Plan.              (y) "Other Stock-based Award" means an Award of one of the types       described in Section 7.                                         -5-               (z) "Outside Director" means a member of the Board who is treated as       an "outside director" for purposes of Section 162(m) of the Code.              (aa) "Performance Award" means an Award described in Section 8.              (bb) "Plan" is defined in Section 1.              (cc) "Restricted Stock" is defined in Section 7(a).              (dd) "SAR" means an Award described in Section 6(m)(i).              (ee) "Share Limit" is defined in Section 3(a).              (ff) "Special Service Retirement" means retirement from active       employment with the Company and its Subsidiaries (i) at or after age 60       with at least twenty years of service for the Company and its       Subsidiaries, or (ii) at or after age 65 with at least ten years of       service for the Company and its Subsidiaries.              (gg) "Stock" means the Common Stock, $1.00 par value, of the       Company, subject to adjustments pursuant to Section 3.              (hh) "Stock Option" means any option to purchase shares of Stock       granted pursuant to Section 6.              (ii) "Subsidiary" means any corporation or other entity (other than       the Company) in an unbroken chain beginning with the Company if each of       the entities (other than the last entity in the unbroken chain) owns stock       or other interests possessing 50% or more of the total combined voting       power of all classes of stock or other interest in one of the other       corporations or other entities in the chain."                                         -6-     EX-10.15 3 b58738tjexv10w15.txt EX-10.15 DESCRIPTION OF DIRECTOR COMPENSATION ARRANGEMENTS            DESCRIPTION OF DIRECTOR COMPENSATION ARRANGEMENTS         EXHIBIT 10.15  Compensation of Directors who are Employees of the Company  Employees of TJX are not paid for their service as a director.  Compensation of Non-Employee Directors  On December 6, 2005, the Board of Directors of TJX adopted the following compensation arrangements for non-employee directors beginning in the fiscal year ending in 2007:  - -     Annual retainer of $40,000 for each director.  - -     Annual retainer of $10,000 for each Committee chair.  - -     Fee of $1,500 for each Board meeting attended.  - -     Fee of $2,000 for each Committee meeting attended as a Committee member or       $2,500 for each Committee meeting attended as Committee Chairperson.  - -     Additional annual retainer of $70,000 for the Lead Director.  - -     No annual stock option grant.  - -     Two annual deferred share awards, each representing shares of TJX common       stock valued at $50,000. One award vests immediately and is payable with       accumulated dividends in stock at the earlier of separation from service       as a director or change of control. The second award vests based on       service as a director until the annual meeting next following the award       and is payable with accumulated dividends in stock at the same time as the       first award, or, if an irrevocable advance election is made, upon vesting.  - -     Reimbursement for customary expenses for attending Board and committee       meetings.   The Executive Committee is excluded from the above committee-specific compensation. Directors may participate in TJX's General Deferred Compensation Plan. TJX does not provide retirement benefits or insurance for non-employee directors. The Stock Incentive Plan was amended to eliminate the annual director option grant and to provide for the deferred share grants described above.  The Lead Director will receive a one-time payment of $35,000, payable February 1, 2006 in recognition of his services in connection with the CEO transition.  The Corporate Governance Principles were amended to provide that each non-employee director's equity ownership should grow over five years to, and be maintained at, a minimum of $200,000 (including shares owned directly and vested deferred shares but excluding unexercised options).     EX-10.17 4 b58738tjexv10w17.txt EX-10.17 THE GENERAL DEFERRED COMPENSATION PLAN                                                                       EXHIBIT 10.17                               THE TJX COMPANIES, INC.                         GENERAL DEFERRED COMPENSATION PLAN                                   Third Amendment        Pursuant to Section 7.E of The TJX Companies, Inc. General Deferred Compensation Plan (the "GDCP"), Section 6.D of the GDCP is hereby amended and clarified as follows, effective as of January 1, 2004 except as hereinafter provided:              "D. Retirement Equalization Benefits. At the time a benefit is paid       to a Participant in the Plan under The TJX Companies, Inc. Retirement Plan       (the "Retirement Plan"), the Participant shall be entitled to receive a       retirement equalization benefit having a value equal to the difference       between (i) the amount such Participant would have been entitled to       receive under the Retirement Plan if none of his compensation had been       deferred under this Plan and (ii) the amount such Participant actually       receives under the Retirement Plan. Such retirement equalization benefit       shall be payable in the same form that the Participant elects to receive       benefits under the Retirement Plan. Such retirement equalization benefit       shall not be payable to the extent that the Participant is entitled to       receive an equalization benefit of comparable value under The TJX       Companies, Inc. Supplemental Executive Retirement Plan or any other plan.       For the avoidance of doubt, any benefit under the Retirement Plan that is       supplemental to the formula benefit described in Article 7 thereof shall       be treated as an equalization benefit for purposes of this Section 6.D       unless the E.C.C. expressly provides otherwise."  The action set forth herein with respect to the GDCP is not intended to constitute a "material modification" of the GDCP as that term is used in Section 885(d)(2)(B) of the American Jobs Creation Act of 2004, and shall be construed and applied accordingly.        IN WITNESS WHEREOF, The TJX Companies, Inc. has caused this instrument of amendment to be executed by its duly authorized officer this 16th day of December, 2004.                                        THE TJX COMPANIES, INC.                                       By:       /s/ Donald G. Campbell                                                ----------------------                                       Title:    Senior Executive Vice President                                                -------------------------------                                THE TJX COMPANIES, INC.                        GENERAL DEFERRED COMPENSATION PLAN                                (1998 RESTATEMENT)                                  FOURTH AMENDMENT        The TJX Companies, Inc. hereby amends its General Deferred Compensation Plan (1998 Restatement) (the "Plan"), as follows:        1. Effective for Eligible Compensation deferred under the Plan after the date hereof, Section 4.B.(i) is amended by deleting the words "or percentage".        2. Effective as of January 1, 2005, the following new Section 7.J is hereby added to the Plan:  "J.   Section 409A. Reference is made to Section 409A of the Internal Revenue       Code of 1986, as amended, and to the guidance (including transition rules       and exemptive relief provisions) issued thereunder ("Section 409A").       Consistent with Section 409A, it is intended that with respect to amounts       deferred under the Plan prior to January 1, 2005 that were both earned and       vested prior to January 1, 2005, the Plan will be administered consistent       with the objective of preserving for such amounts "grandfathered" status       under Section 409A, that is, the status of deferred compensation not       subject to the requirements and limitations of Section 409A. All other       deferrals under the Plan shall be administered in compliance with the       requirements of Section 409A. It is intended in this regard that the Plan       will be comprehensively amended to comply with final rules under Section       409A following the issuance of such rules or at such earlier time as may       be required under Section 409A or determined by the E.C.C. Without       limiting the generality of the foregoing, the Plan shall be deemed amended       by this Section 7.J to permit, with respect to any deferrals hereunder       that are subject to Section 409A, any transition-period elections       permitted under Section 409A that are authorized by the Senior Executive       Vice President - Chief Administrative and Business Development Officer of       the Company, the Senior Vice President - Chief Financial Officer of the       Company, or the successor of either (a "specified Company officer") and       any cancellations and withdrawals of any such amounts that are authorized       by a specified Company officer, except that any such action by a specified       Company officer that relates to his or her own benefit shall require the       approval of a member of the E.C.C. Notwithstanding the foregoing, neither       the Company nor any of its officers or directors, nor any other person       charged with administrative responsibilities under the Plan, shall be       liable to any Eligible Person or to any beneficiary of any Eligible Person       by reason of the failure of any deferral hereunder to comply with, or be       exempt from, the requirements of Section 409A."        IN WITNESS WHEREOF, The TJX Companies, Inc. has caused this instrument of amendment to be executed by its duly authorized officer this 12th day of December, 2005.                                                  THE TJX COMPANIES, INC.                                         By:      /s/ Donald G. Campbell                                                 --------------------------------                                         Title:   Senior Executive Vice President    EX-10.18 5 b58738tjexv10w18.txt EX-10.18 THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, AS AMENDED                                                                      EXHIBIT 10.18           THE TJX COMPANIES, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN                                (2005 RESTATEMENT)  Article 1. - Introduction        1.1. In General. The Supplemental Executive Retirement Plan, established in 1981, was amended and restated in 1984 and 1992 and has subsequently been further amended. The 2005 amendment and restatement of the Plan set forth herein is intended inter alia to conform the Plan to the requirements of Section 409A, including the transition rules and exemptive relief provisions thereunder, and shall be construed consistent with that intent. Notwithstanding the foregoing, neither the Company nor any of its officers or directors, nor any other person charged with administrative responsibilities under the Plan, shall be liable to any employee or former employee of the Company, or to any spouse or other beneficiary of any such employee or former employee, by reason of the failure of any benefit hereunder to comply with the requirements of Section 409A.        1.2. Purpose. The purpose of the amended and restated Plan set forth herein is to provide certain designated employees with retirement benefits supplemental to those payable under the Company's tax-qualified retirement plans.                                         -2-  Article 2. - Definitions        2.1. "Average Compensation" shall mean the average of the Key Employee's Compensation over the five (5) full calendar years yielding the highest such average and occurring during the last ten (10) calendar years prior to the earlier of the Key Employee's attainment of age 65 or separation from service with the Company. In the case of a Key Employee who becomes disabled as defined in the Company's long-term disability plan, Average Compensation shall be determined on the basis of the five (5) full calendar years yielding the highest such average and occurring during the last ten (10) calendar years of the Key Employee's employment with the Company prior to commencement of benefits under the Company's long-term disability plan. If the Key Employee has not completed five full calendar years of employment prior to the commencement of benefits under the Company's long-term disability plan, Average Compensation shall be based on the number of full calendar years he or she was employed by the Company prior to the commencement of such benefits.        2.2. "Beneficiary" shall mean a beneficiary entitled to receive certain death benefits under the Plan who has been designated as such by the Key Employee in writing in a form and manner acceptable to the Committee.        2.3. "Code" shall mean the Internal Revenue Code of 1986, as the same presently exists and as the same may hereafter be amended, or any successor statute of similar purpose. References to specific sections of the Code shall be considered references to identifiable similar provisions of successor statutes.        2.4. "Committee" shall mean the Executive Compensation Committee of the Board of Directors of The TJX Companies, Inc.                                         -3-        2.5. "Company" shall mean The TJX Companies, Inc. and any wholly-owned subsidiaries; provided, in determining whether an individual has separated from the service of the Company, "Company" shall include The TJX Companies, Inc. and any corporation or other trade or business that would be aggregated with The TJX Companies, Inc. under Sections 414(b) or 414(c) of the Code and "separation from service" shall be construed consistent with the rules under Section 409A.        2.6. "Compensation" shall mean, for any calendar year, a Key Employees actual base salary earned and any short-term incentives awarded during the calendar year (before taking into account any reduction in base salary or short-term incentives pursuant to a salary reduction agreement under Section 401(k) or Section 125 of the Code). Any base salary or short-term incentives that are deferred under the TJX Companies, Inc. General Deferred Compensation Plan or The TJX Companies, Inc. Executive Savings Plan shall be included as "Compensation" for the calendar year in which the salary is earned or short-term incentives are awarded but not included for the calendar year in which such deferred compensation is paid. By way of example and not by way of limitation, Compensation shall not include employer contributions to The TJX Companies, Inc. Retirement Plan, Matching Contributions under The TJX Companies, Inc. General Savings/Profit Sharing Plan, or any amounts credited to the Employer Credit Account under The TJX Companies, Inc. Executive Savings Plan; income or gains resulting from the receipt, sale, exchange, exercise or other disposition of stock or stock options, awards and benefits, including stock appreciation rights, under The TJX Companies, Inc. Stock Incentive Plan or any other long-term incentive plan of the Company; expense reimbursements or payments in lieu of expense reimbursement; auto allowances, financial counseling fees, tuition reimbursements or the value of other fringe benefits provided by the Company or any other                                         -4-  employer (even if wholly or partially currently taxable as income to the Key Employee); or employer contributions to Social Security made by the Company or another employer on behalf of the Key Employee.        2.7. "Deferred Compensation Amount" shall mean any income deferred under The TJX Companies, Inc. General Deferred Compensation Plan or the TJX Companies, Inc. Executive Savings Plan which (i) but for the deferral would be included in the definition of "Compensation" under The TJX Companies, Inc. Retirement Plan (without regard to the limitations described in Code Section 401(a) (17)) and (ii) is paid to the Key Employee after he or she retires or terminates. For the avoidance of doubt, "Deferred Compensation Amounts" shall be disregarded to the extent (as determined by the Committee in its sole discretion) the reduction in the Article 7 formula benefit under The TJX Companies, Inc. Retirement Plan attributable to the non-inclusion in "Compensation" described in clause (i) above of such Amounts is offset by the any benefit under The TJX Companies, Inc. Retirement Plan that is supplemental to the formula benefit described in Article 7 thereof.        2.8. "Executive Savings Plan Benefit" shall mean an annual benefit computed by converting the value of the Key Employee's Employer Credit Account under The TJX Companies, Inc. Executive Savings Plan to a life annuity commencing at age 65. The Committee shall determine the actuarial factors used in converting the Employer Credit Account to a life annuity.        2.9. "Interest Rate" shall mean the "Interest Rate" as in effect at the relevant time under The TJX Companies, Inc. General Deferred Compensation Plan (or, if at such time there is no such rate in effect under The TJX Companies, Inc. General Deferred Compensation Plan, the rate then used under The TJX Companies, Inc. Retirement Plan for determining lump-sum                                         -5-  actuarial equivalency). If at the relevant determination date The TJX Companies, Inc. Retirement Plan no longer exists or no longer provides for lump sum actuarial equivalency determinations, the Committee shall apply reasonable interest rate consistent with Section 409A.        2.10. "Key Employee" shall mean a Category A Key Employee, Category B Key Employee or Category C Key Employee as determined pursuant to Article 3.        2.11. "Plan" shall mean The TJX Companies, Inc. Supplemental Executive Retirement Plan (2005 Restatement) as set forth in this document, including any and all amendments hereto and restatements hereof.        2.12. "Primary Social Security Benefit" shall mean the annual primary insurance amount to which the Key Employee is entitled or would, upon application therefor, become entitled at age 65 under the provisions of the Federal Social Security Act as in effect on the Key Employee's termination date assuming that the Key Employee will have no income after termination which would be treated as wages for purposes of the Social Security Act.        2.13. "Retirement Agreement" shall mean an individual agreement between a Category A Key Employee and the Company providing for supplemental executive retirement benefits.        2.14. "Retirement Plan Benefit" shall mean the annual benefit payable at age 65 under The TJX Companies, Inc. Retirement Plan on a life annuity basis.        2.15. "Savings/Profit Sharing Plan Benefit" shall mean an annual benefit computed by converting the value of the Key Employee's Matching Contribution Account payable under The TJX Companies, Inc. General Savings/Profit Sharing Plan to a life annuity commencing at age 65. The Committee shall determine the actuarial factors used in converting the Matching Contribution Account to a life annuity.                                         -6-        2.16. "Section 409A" shall mean Section 409A of the Code.        2.17. "Years of Service" shall mean the total completed years and months of a Key Employee's uninterrupted service with the Company from the date that the Key Employee's commences employment with the Company until the earliest of termination of employment, retirement or age 65. A leave of absence approved by the Company shall not constitute an interruption of service but the period of such absence shall be excluded from Years of Service for all purposes under the Plan.                                         -7-  Article 3. - Key Employees        3.1. Designation of Key Employees. An employee or retired former employee of the Company shall be a Key Employee if, and only if, designated as such by the Committee, except that designation as a Category C Key Employee shall be automatic (based on the application of specified limits as described in Section 3.4 below) except as the Committee may limit eligibility for such benefits. Subject to Section 409A, the most recent "Category" to which such Key Employee is assigned determines the nature of the benefits to which he or she may become entitled under this Plan.        3.2. Category A Key Employee. Only the following shall be treated as having been designated as Category A Key Employees: (i) an executive employee of the Company who has a Retirement Agreement that refers directly to benefits payable under this Plan, or (ii) any other employee with a Retirement Agreement who is designated as a Category A Key Employee.        3.3. Category B Key Employee. A Category B Key Employee is a key employee of the Company who has been designated by the Committee as eligible to receive the benefits provided under Article 5 of this Plan. If, however, at the time a Category B Key Employee retires or otherwise terminates employment, the benefit under Article 6 of this Plan would provide a greater benefit to such Key Employee than the benefit provided under Article 5 of this plan, then such Key Employee will be deemed designated a Category C Key Employee and will receive the benefit provided under Article 6 in lieu of that provided under Article 5.        3.4. Category C Key Employee. A Category C Key Employee is an employee of the Company with a fully vested right to benefits under The TJX Companies, Inc. Retirement Plan whose benefits under that plan are limited by reason of (i) the operation of the limitation provisions of Section 401(a) (17) or Section 415 of the Code, and/or (ii) the deferral of certain                                         -8-  income which, but for the deferral, would be included in the definition of "Compensation" under The TJX Companies, Inc. Retirement Plan.                                         -9-  Article 4. - Category A Key Employee Benefit        4.1. Category A Key Employee Benefit. Each present or future Category A Key Employee (and, where so provided in the individual Retirement Agreements between the Company and such Key Employee, the surviving spouse or other beneficiary(ies) of such Key Employee) shall receive the benefit provided under the Retirement Agreement with such Key Employee under the terms and subject to the limitations set forth in said Retirement Agreement, which is incorporated herein by reference.                                         -10-  Article 5. - Category B Key Employee Benefit        5.1. Requirement for a Benefit. Each Category B Key Employee retiring at or after age 55 with 10 or more Years of Service shall be entitled to receive a supplemental retirement benefit under this Article 5.        5.2. Benefit Formula. The benefit payable at age 65 to a Category B Key Employee who qualifies for a benefit under Sections 5.1 and who separates from the service of the Company at or prior to attaining age 65, when expressed as a monthly benefit payable as a life annuity for the life of the Category B Key Employee commencing at age 65 (the "tentative life annuity"), shall be one-twelfth (1/12) of the product of (a) and (b), such product offset (reduced) by the sum of (c), (d) , (e) and (f), where:              (a)   is two and one-half percent (2 1/2%) of the Key Employee's                   Average Compensation,              (b)   is the number of Years of Service completed by the Key                   Employee, up to a maximum of twenty (20) such Years,              (c)   is the Key Employee's annual Retirement Plan Benefit,              (d)   is the Key Employee's annual Savings/Profit Sharing Plan                   Benefit,              (e)   is the Key Employee's annual Executive Savings Plan Benefit,                   and              (f)   is the Key Employee's annual Primary Social Security Benefit.  The lump-sum actuarial equivalent of such tentative life annuity (the "tentative lump sum amount"), determined in accordance with the rules prescribed in Section 7.2(c) as of the date the Category B Key Employee separates from service, shall be increased for six months' worth of interest at the Interest Rate in effect at separation from service and thereafter, if payment is delayed pursuant to Section 5.3 or by reason of a change in payment election under Section                                          -11-  7.2(b)(ii), at the rate from time to time in effect until the applicable determination date for the benefit payable to the Category B Key Employee.        5.3. Separation From Service After Age 65. In the case of each Category B Key Employee who at age 65 has not yet separated from service with the Company, there shall be determined (consistent with the rules set forth in Section 7.2(c)), as of the date the Category B Key Employee attains age 65, an opening lump sum balance equal to the tentative lump sum amount that would have been determined under Section 5.2 had such Category B Key Employee separated from service at age 65. Between the date such Category B Key Employee attains age 65 and the date that follows the Category B Key Employee's later separation from service by six (6) months (or any later payment date determined under Section 7.2(b)(iii)), the opening lump sum balance shall be adjusted for interest at the Interest Rate from time to time in effect during such period. The actuarial equivalent of such adjusted lump sum amount, expressed in the applicable form of payment, shall be paid as determined in accordance with Article 7.        5.4. Death Benefit. Death benefits shall be payable only to the extent provided in this Section 5.4:              (i)   If a Category B Key Employee dies after having become entitled                   to a benefit as set forth in Section 5.1 and after separating                   from service, but prior to the payment or commencement of such                   benefit, there shall be paid to the Category B Key Employee's                   Beneficiary, or if there is no Beneficiary surviving, to the                   Category B Key Employee's surviving spouse, if any, or                   otherwise to the Category B Key Employee's estate, in each                   case at or as soon as practicable after the decedent's death,                   a lump sum equal to the lump sum benefit that would then have                   been payable to                                         -12-                    the Category B Key Employee had the Category B Key Employee                   been entitled to payment on such date.              (ii)  If a Category B Key Employee dies after having satisfied the                   age and service requirements set forth in Section 5.1 but                   before separating from service, his or her surviving spouse,                   if any, will be entitled to receive, as soon as practicable                   following the Category B Key Employee's death, a lump sum                   payment that is the actuarial equivalent of the survivor                   benefit that would have been payable to the spouse on account                   of the Key Employee's death if the Key Employee had separated                   from service and commenced receiving benefits on the day six                   months following his or her death in a 50% joint and survivor                   annuity form (that is, in a form under which the Key Employee                   would have received a reduced pension upon retirement and upon                   such Key Employee's death one-half of such reduced benefit                   would have been payable to the Key Employee's spouse).                   Actuarial equivalency for this purpose shall be determined                   using an interest assumption equal to the Interest Rate in                   effect at the time of the Category B Key Employee's death and                   the same mortality assumption as is then used under The TJX                   Companies, Inc. Retirement Plan. If at the relevant                   determination date The TJX Companies, Inc. Retirement Plan no                   longer exists or no longer provides for lump sum actuarial                   equivalency determinations, the Committee shall apply                   reasonable actuarial assumptions consistent with Section 409A.                                         -13-              (iii) If the Category B Key Employee survives until the commencement                   of benefit payments hereunder but dies before the completion                   of such payments, then (A) if the benefit was payable in five                   (5) annual installments, the Category B Key Employee's                   Beneficiary, or if there is no Beneficiary surviving, the                   Category B Key Employee's surviving spouse, if any, or                   otherwise the Category B Key Employee's estate shall be paid,                   as soon as practicable following the Category B Key Employee's                   death, a single lump sum equal to the present value                   (determined using the Interest Rate then in effect) of the                   remaining installments, and (B) if the benefit was payable as                   a joint and survivor annuity under which the Category B Key                   Employee's spouse was the survivor annuitant, the Category B                   Key Employee's surviving spouse, if any and if the same as the                   person to whom the Category B Key Employee was married at the                   time such annuity was determined, shall be paid, as soon as                   practicable following the Category B Key Employee's death, a                   lump sum payment that is the actuarial equivalent of the                   survivor portion of such annuity. Actuarial equivalency for                   this purpose shall be determined using an interest assumption                   equal to the Interest Rate in effect at the time of the                   Category B Key Employee's death and the same mortality                   assumption as is then used under The TJX Companies, Inc.                   Retirement Plan. If at the relevant determination date The TJX                   Companies, Inc. Retirement Plan no longer exists or no longer                   provides for lump sum actuarial equivalency                                         -14-                    determinations, the Committee shall apply reasonable actuarial                   assumptions consistent with Section 409A.               (iv) No death benefit shall be payable under the Plan in any                   circumstances other than those described in Section 5.4(i),                   (ii) or (iii) above.        5.5. Benefits in the Event of Disability. If a Category B Key Employee should become disabled as defined by the Company's long-term disability plan, the Key Employee will be credited with Year(s) of Service for the period in which he or she receives such disability payments for purposes of Sections 5.1 and 5.2. For purposes of meeting the minimum requirements of Section 5.1, the Key Employee will be deemed to be actively employed while receiving long-term disability benefits. Long-term disability payments, however, will not be included in determining Compensation. A Key Employee who is disabled shall be entitled to benefits only upon separation from service in accordance with the Company's long-term disability practices and policies.                                         -15-  Article 6. - Category C Key Employee Benefit        6.1. Category C Key Employee Benefits. Each Category C Key Employee who has a fully vested right to benefits under The TJX Companies, Inc. Retirement Plan shall be entitled to receive a benefit under this Plan equal to the difference between (a) and (b) below, where              (a)   is the benefit the Key Employee would have received under The                   TJX Companies, Inc. Retirement Plan on a life annuity basis,                   if (1) neither the limitations of Code Sections 415(b) or                   415(e), whichever is applicable, nor the limitations of Code                   Section 401(a)(17) existed and/or (2) the Key Employee did not                   have any Deferred Compensation Amounts; and              (b)   is the benefit which the Key Employee is actually entitled to                   receive under The TJX Companies, Inc. Retirement Plan on a                   life annuity basis.        The lump-sum actuarial equivalent of such tentative life annuity, determined in accordance with the rules prescribed in Article 7 as of the date the Category C Key Employee separates from service, shall be increased for six months' worth of interest at the Interest Rate then in effect, and thereafter (if necessary because in a delay in payment under Section 7.2(b)(iii)) at the Interest Rate from time to time in effect, and the actuarial equivalent of such adjusted lump sum amount, expressed in the applicable form of payment determined in accordance with Article 7, shall be paid or commence to be paid six months and one day following the Category C Key Employee's separation from service or later as provided in Section 7.2(b)(iii).                                         -16-  Article 7. - Methods of Benefit Payment        7.1. Category A Key Employees. Benefits payable to Category A Key Employees shall be paid in the manner prescribed in the Retirement Agreement providing for such benefits, consistent with the requirements of Section 409A. If the Retirement Agreement to which reference is made does not specify the manner in which such benefits are to be paid, the manner in which such benefits are distributed and the timing of such distributions shall be determined by reference to the provisions of The TJX Companies, Inc. Retirement Plan, as though such benefits were being provided under that plan; provided, that if such benefits cannot, consistent with Section 409A, be distributed in accordance with the provisions of The TJX Companies, Inc. Retirement Plan or if The TJX Companies, Inc. Retirement Plan no longer exists, they shall instead be distributed in the same manner as benefits payable to a Category B Key Employee.        7.2. Category B Key Employees.              (a)   Available Forms of Payment. The benefit payable hereunder to a                   Category B Key Employee shall be paid in one of the following                   forms:                    (i)   either five (5) or ten (10) substantially equal                         installments commencing (except as provided at Section                         7.2(b)(iii) below) six months and one day following the                         date on which the Category B Key Employee separates from                         service with the Company;                    (ii)  a single lump-sum payment payable (except as provided at                         Section 7.2(b)(iii) below) six months and one day                         following the date on which the Category B Key Employee                         separates from service with the Company; or                                         -17-                    (iii) an annuity payable in a form generally available under                         The TJX Companies, Inc. Retirement Plan as of the date                         the Category B Key Employee selects such form of payment                         hereunder (whether or not the Category B Key Employee                         participates in The TJX Companies, Inc. Retirement Plan                         and whether or not such form is available under The TJX                         Companies, Inc. Retirement Plan as of the date the                         Category B Key Employee's benefit hereunder commences),                         such annuity to be paid commencing (except as provided                         at Section 7.2(b)(iii) below) six months and one day                         following the date on which the Category B Key Employee                         separates from service with the Company.                    The form and manner of payment of a Category B Key Employee's                   benefit shall be determined, from among these alternatives, in                   accordance with (b) below.              (b)   Election Provisions. The form in which a Category B Key                   Employee's benefit hereunder is paid shall be determined as                   follows:                    (i)   Except as otherwise elected in accordance with this                         Section 7.2(b), each Category B Key Employee's benefit                         hereunder shall be paid in five (5) annual installments                         as determined under (a)(i) above.                    (ii)  Each Category B Key Employee may elect to have his or                         her benefit hereunder paid in another form described in                         Section 7.2(a) above, but only if such election is made                         (A) in writing in a form and manner acceptable to the                         Committee, and (B) at least twelve                                         -18-                          (12) months prior to the date the Category B Key                         Employee separates from service with the Company. No                         election made under this Section 7.2(b)(ii) shall take                         effect until twelve (12) months after it is made. Any                         change election made in accordance with this Section                         7.2(b)(ii) shall be binding on the Category B Key                         Employee when made and may be altered only by a                         subsequent change election that complies with the                         requirements of this Section 7.2(b)(ii).                    (iii) Except as provided in Section 7.2(b)(iv) or Section                         7.2(b)(v) below, if a Category B elects a change in                         payment form pursuant to Section 7.2(b)(ii) above,                         payment (or, in the case of installments or an annuity,                         commencement of payment) of the benefit payable under                         the new form of payment shall be delayed by five years                         and one day measured from the date on which the                         pre-change form of payment would have been made or would                         have commenced to be made. For example, (A) under a                         valid change in payment form from lump sum to                         installments or to a life annuity, the first installment                         payment or the first annuity payment, as the case may                         be, shall be made five years and one day after the date                         the lump sum would otherwise have been paid, and (B)                         under a valid change from an installment or annuity form                         of payment to a lump sum payment, the lump sum shall be                         paid five years and one day after the first installment                         or annuity payment would have been made. In                                         -19-                          any case in which a delay in payment or commencement of                         payment is required under this Section 7.2(b)(iii), the                         lump sum amount used to calculate the actuarially                         equivalent payment to the Category B Key Employee shall                         continue to be credited with interest as described in                         Section 5 until payment is made or commences.                    (iv)  Notwithstanding Section 7.2(b)(ii) and Section                         7.2(b)(iii) above, a Category B Key Employee as to whom                         the applicable form of payment (pursuant to a prior                         election under Section 7.2(b)(ii)) is a life annuity or                         a joint and survivor annuity described in Prop. Regs.                         Section 1.409A-2(b)(2)(ii) or successor guidance may, to                         the extent consistent with Section 409A, elect in                         writing, in a form and manner acceptable to the                         Committee, to have his or her benefit hereunder payable                         in another such annuity form that is available under                         Section 7.2(a), without regard to whether such election                         is made at least twelve (12) months in advance and                         without any required delay in the commencement of such                         payment under Section 7.2(b)(iii) above, provided that                         no such change election shall be effective if made on or                         after the date the first annuity payment is made.                    (v)   The Committee may, consistent with Section 409A and the                         transition rules thereunder, permit a Category B Key                         Employee or former Category B Key Employee to elect an                         alternative form of                                         -20-                          payment from among those available under Section 7.2(a)                         without regard to the limitations of Section 7.2(b)(ii)                         or Section 7.2(b)(iii) above if (A) such election is in                         writing and made in a form and manner acceptable to the                         Committee on or before December 31, 2006 (except that                         with respect to an amount that would be paid or commence                         to be paid prior to calendar 2007, this Section                         7.2(b)(v) shall apply only if such change election is                         made by December 31, 2005), and (B) is made not later                         than six months prior to the later of separation from                         service or the date the benefit would have commenced to                         be paid absent such election.                    (vi)  Notwithstanding Sections 7.2(b)(i), (ii), (iii), (iv)                         and (v) above, a Category B Key Employee who commenced                         receiving a benefit under the Plan (as in effect prior                         to this amendment and restatement) prior to January 1,                         2005 shall continue to receive his or her benefit in                         accordance with the payment terms then in effect. It is                         the intent of this restatement that nothing herein shall                         be construed as subjecting to the requirements of                         Section 409A any benefit payable pursuant to the                         preceding sentence. In the case of a Category B Key                         Employee not described in the preceding sentence who                         separated from service prior to December 1, 2005,                         benefits under the Plan shall be paid, notwithstanding                         Sections 7.2(b)(i), (ii), (iii), and (iv) but subject to                         Section 7.2(b)(v) above, in accordance with the payment                         terms determined in connection                                         -21-                          with such termination, to the extent such payment terms                         are consistent with Section 409A (as applicable).              (c)   The amounts payable to a Category B Key Employee under the                   applicable payment shall be determined as follows:                    (i)   First, there shall be determined the "tentative lump                         sum" amount referred to in Section 5.2. The tentative                         lump sum amount shall equal the actuarial equivalent                         present value of the annuity described in Section 5.2,                         determined as of the date of the Category B Key                         Employee's separation from service (or attainment of age                         65 if earlier) using an interest assumption equal to the                         Interest Rate then in effect and the same mortality                         assumption as is then used under The TJX Companies, Inc.                         Retirement Plan. If at the relevant determination date                         The TJX Companies, Inc. Retirement Plan no longer exists                         or no longer provides for lump sum actuarial equivalency                         determinations, the Committee shall apply reasonable                         actuarial assumptions consistent with Section 409A.                    (ii)  Second, the tentative lump sum amount determined under                         Section 7.2(c)(i) above shall be increased by in                         interest factor as described in Section 5.2 or Section                         5.3, as applicable.                    (iii) If the benefit payable hereunder is payable as a lump                         sum, the amount of the payment shall equal the adjusted                         lump sum amount determined under Section 7.2(c)(ii)                         above.                                         -22-                    (iv)  If the benefit is payable in five (5) annual                         installments, each installment shall equal the level                         annual payment amount which, if payable in five                         successive annual installments, would have the same                         present value (using the same interest assumption as                         would be used under Section 7.2(c)(i) above if the                         determination under Section 7.2(c)(i) were made as of                         the date of the first annual installment) as the                         adjusted lump sum value determined under Section                         7.2(c)(ii) above.                    (v)   If the benefit is payable as an annuity, the annuity                         shall have an actuarially equivalent value, determined                         using the same actuarial assumptions as would be used                         under Section 7.2(c)(i) above if the determination were                         made as of the date of the first annuity payment, equal                         to the adjusted lump sum value determined under Section                         7.2(c)(ii) above.        7.3. Category C Key Employees. Benefits payable to Category C Key Employees shall be paid in the same manner as benefits payable to a Category B Key Employee. Rules analogous to those under Section 7.2(b)(vi) shall apply for purposes of this Section 7.3.                                         -23-  Article 8. - Divestiture        8.1. Divestiture of Category A Key Employee. Category A Key Employees shall be subject to divestiture of benefits to the extent that the Retirement Agreement(s) pursuant to which such benefits are included in the Plan so provide.        8.2. Competition. The Committee shall have the authority to divest the benefits under this Plan for any Category B or C Key Employee who separates from service voluntarily at any time, including by reason of retirement or disability, and who within two years following such separation, directly or indirectly, is a partner or investor in or engages in any employment, consulting, or fees-for-services arrangement with any business which is a competitor of The TJX Companies, Inc. and its subsidiaries, or undertakes any planning to engage in any such business. A business shall be deemed a competitor of The TJX Companies, Inc. and its subsidiaries if and only if (i) it shall then be so regarded by retailers generally, or (ii) it shall operate an off-price apparel, off-price footwear, off-price jewelry, off-price accessories, off-price home furnishings and/or off-price home fashions business, including any such business that is store-based, catalogue-based, or an on-line, "e-commerce" or other off-price internet-based business; provided, that the mere application for employment with a competitive business shall not be treated as prohibited planning to engage in such business. A Category B Key Employee or Category C Key Employee will not be deemed to have violated the provisions of this Section 8.2 merely by reason of being engaged in an employment, consulting or other fees-for-services arrangement with an entity that manages a private equity, venture capital or leveraged buyout fund that in turn invests in one or more businesses deemed competitors of the Company and its Subsidiaries under this Section 8.2, provided that (A) such fund is not intended to, and does not in fact, invest primarily in such businesses, and (B) the Category B Key Employee or Category C                                         -24-  Key Employee demonstrates to the reasonable satisfaction of the Company that his or her arrangement with such entity will not involve the provision of employment, consulting or other services, directly or indirectly, to any such business or to the fund with respect to its investment or proposed investment in any such business and that he or she will not participate in any meetings, discussions, or interactions in which any such business or any such proposed investment is proposed to be or is likely to be discussed. Each Category B Key Employee and Category C Key Employee by participating in the Plan agrees that if, at any time, pursuant to action of any court, administrative or governmental body or other arbitral tribunal, the operation of any part of this Section 8.2 shall be determined to be unlawful or otherwise unenforceable, then the coverage of this paragraph shall be deemed to be restricted as to duration, geographical scope or otherwise, as the case may be, to the extent, and only to the extent, necessary to make this paragraph lawful and enforceable in the particular jurisdiction in which such determination is made.        A Key Employee shall notify the Company immediately upon his or her securing employment or becoming self-employed during the two years following voluntary termination of employment, and shall furnish to the Committee written evidence of his or her compensation earned from any such employment or self-employment, in each case promptly following any request therefor by the Committee.        Any Key Employee may inquire of the Committee in writing whether any proposed act shall be considered competition under this section 8.2 and the Committee shall provide a prompt reply.        If any Key Employee covered under this Section 8.2 engages in a business determined by the Committee to be a competitor, the Committee shall give notice in writing to the Key                                         -25-  Employee that unless a written appeal is submitted by the Key Employee to the Committee within thirty (30) days, his or her benefits under this Plan will be forfeited. The Committee in its discretion may also provide that if the Key Employee ceases to engage in such business his or her benefits under this Plan will not be forfeited. Upon receipt of the Committee's notice, the Key Employee shall have 30 days to submit a written appeal of the Committees decision. The Committee shall review the Key Employees appeal and notify the Key Employee of its decision within 30 days from receipt of his or her appeal. If the Key Employee fails to submit an appeal within 30 days, his or her benefits will be forfeited at the expiration of. the 30-day period; provided, that if the Committee has determined that such benefits will not be forfeited if the Key Employee ceases to engage in the competitor business within a specified period, such benefits will be forfeited only if the Key Employee continues to engage in such business after the expiration of such specified period.        The provisions of this Section 8.2 shall cease to have effect upon the occurrence of a Change of Control as defined in the Company's Stock Incentive Plan or successor plan, as from time to time amended. The provisions of this section 8.2 shall not apply to a Key Employee who voluntarily terminates employment at a time when he or she has entered into an employment agreement with The TJX Companies, Inc. or a related company containing an express non-competition provision; instead, a violation by the Key Employee of such provision shall result in the automatic forfeiture of benefits under this Plan for such Key Employee.        If, at any time, pursuant to action of any court, administrative or governmental body or other arbitral tribunal, the operation of any part of this Section 8.2 shall be determined to be unlawful or otherwise unenforceable, then the coverage of this Section 8.2 shall be deemed to be                                         -26-  restricted as to duration, geographical scope or otherwise, as the case may be, to the extent, and only to the extant, enforceable in the particular jurisdiction in which such determination is made.        8.3. Termination for Cause. Notwithstanding anything to the contrary contained herein, if a Key Employee's employment is terminated for cause, all benefits otherwise payable under this Plan shall be forfeited. For this purpose, termination for cause shall mean termination of employment by reason of the Key Employee's dishonesty, conviction of a felony, gross neglect of duties, or conflict of interest. If, subsequent to termination of employment for other reasons, and prior to the payment of all benefits hereunder, it is discovered that a Key Employee engaged in acts or conduct which, had they been discovered, would have resulted in termination of employment for cause, his or her employment will be deemed to have been terminated for cause, and all unpaid benefits hereunder shall be forfeited.                                         -27-  Article 9. - Funding and Administration        9.1. Source of Funds. All payments of benefits hereunder and all costs of administration of this Plan shall be paid in cash from the' general funds of the Company, and no special or separate fund shall be required to be established or other segregation of assets required to be made to assure such payments. However, the Company may, in its discretion, establish a bookkeeping account or reserve to meet its obligations hereunder-and may establish a so-called "rabbi trust" or similar grantor trust, and may fund such trust, for the purpose of providing benefits hereunder, except that no such use of a trust shall violate the requirements of Section 409A. Except as provided in the preceding sentence, nothing contained in the Plan and no action taken pursuant to the provisions of this Plan shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company or the Committee and any employee or other person. To the extent that any person acquires a right to receive payments under the Plan, such right shall be no greater than the right of any unsecured general creditor of that person's employer or former employer.        9.2. Administration of Plan. The Plan shall be administered by the Committee, which shall have the full power, discretion and authority to interpret, construe and administer the Plan and any part thereof. The Committee may delegate such administrative responsibilities as it deems appropriate to officers or employees of the Company or to others (in which case, to the extent of such delegation, references herein to the Committee shall be deemed to include a reference to the person(s) to whom such responsibilities have been delegated) and may employ legal counsel, consultants, actuaries and agents as it deems desirable in the administration of the Plan and may rely on the opinions of such counsel, the advice of such consultants, and the computations oPound Sterling such actuaries. No member of the Committee shall be eligible for a benefit                                         -28-  under this Plan unless approved by the Board of Directors of The TJX Companies, Inc. The Committee shall establish claims procedures under the Plan consistent with the requirements of Section 503 of the Employee Retirement Income Security Act of 1974, as amended.                                         -29-  Article 10. - Amendment, Suspension, Termination or Assignment.        10.1. Amendment, Suspension and Termination. The Plan may be amended, suspended, or terminated in whole or in part at any time and from time to time by the Committee. No such amendment, suspension or termination shall retroactively impair or otherwise adversely affect the rights of any person to benefits under this Plan that have accrued prior to the date of such amendment, suspension or termination as determined by the Committee, unless such reduction is by reason of an amendment required by law or regulation of an administrative agency; provided, however, that the Committee may amend the Interest Rate without regard to whether such amendment has the effect of decreasing the lump sum value of the participating Key Employee's benefit.        10.2. Assignment. The rights and obligations of The TJX Companies, Inc. shall enure to the benefit of and shall be binding upon the successors and assigns of The TJX Companies, Inc.                                         -30-  Article 11. - Miscellaneous        11.1. Notices. Each Key Employee shall be responsible for furnishing the Committee with the current and proper address for the mailing of notices, reports and benefit payments. Any notice required or permitted to be given shall be deemed given if directed to the person to whom addressed at such address and mailed by regular United States mail, first-class and prepaid. If any check mailed to such address is returned as undeliverable to the addressee, the mailing of checks will be suspended until the Key Employee or beneficiary furnishes the proper address.        11.2. Lost Distributees. A benefit shall be deemed forfeited if the Committee is unable to locate the Key Employee or beneficiary to whom payment is due, after diligent effort, for a period of at least two (2) years, provided, however, that the Committee shall have the authority (but not the obligation) to reinstate such benefit upon the later discovery of a proper payee for such benefit. Mailing of a notice in writing, by certified or registered mail, to the last known address of the Key Employee and to the beneficiaries of such Key Employee (if the addresses of such beneficiaries are known to the Committee) not less frequently than once each year for the two-year period shall be considered a diligent effort for this purpose.        11.3. Nonalienation of Benefits. None of the payments, benefits or rights of any Key Employee or beneficiary shall be subject to any claim of any creditor, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be free from attachment, garnishment, trustee's process, or any other legal or equitable process available to any creditor of such Key Employee or beneficiary. No Key Employee or beneficiary shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or                                         -31-  payments which he or she may expect to receive, contingently or otherwise, under this Plan, except the right to designate a beneficiary or beneficiaries as hereinabove provided.        11.4. Reliance on Data. The Company, the Committee and all other persons associated with the Plan's operation shall have the right to rely on the veracity and accuracy of any data provided by the Key Employee or by any beneficiary, including representations as to age, health and marital status. Such representations are binding upon any party seeking to claim a benefit through a Key Employee. The Company, the Committee and all other persons associated with the Plan's operation are absolved completely from inquiring into the accuracy or veracity of any representation made at any time by a Key Employee or beneficiary.        11.5. No Contract of Employment. Neither the establishment of the Plan, nor any modification thereof, nor the creation of any fund, trust or account, nor the payment of any benefits shall be construed as giving any Key Employee, or any person whomsoever, the right to be retained in the service of the Company, and all Key Employees and other persons shall remain subject to discharge to the same extent as if the Plan had never been adopted.        11.6. Severability of Provision. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and this Plan shall be construed and enforced as if such provision had not been included.        11.7. Heirs, Assigns and Personal Representative. This Plan shall be binding upon the heirs, executors, administrators, successors and assigns of the parties, including each Key Employee and beneficiary, present and future.        11.8. Payments to Minors, Etc. Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting thereof shall be deemed paid when paid to such person's guardian or to the party providing or reasonably appearing to provide for                                         -32-  the care of such person, and such payment shall fully discharge the Company, the Committee and all other parties with respect thereto.        11.9. Effect on other Plans. Any benefit payable under the Plan shall not be deemed salary or other compensation for the purpose of computing benefits under any employee benefit Plan or other arrangement of the Company for the benefit of its employees.        11.10. Government Regulations. It is intended that this Plan will comply with all applicable laws and government regulations, and the Company shall not be obligated to perform an obligation hereunder in any case where, in the opinion of the Company's counsel, such performance would result in violation of any law or regulation.        11.11. Certain Benefits. In any case in which a Key Employee has earned benefits under a plan or arrangement other than the plans and arrangements maintained by the Company for its U.S. employees, the offsets under the Plan for other benefits (e.g., under Section 5.2) shall be adjusted to include, to the extent determined by the Committee, offsets for such other benefits.        11.12. Heading and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.        11.13. Singular Includes Plural. Except where otherwise clearly indicated by context, the singular shall include the plural, and vice-versa.        11.14. Controlling Law. This Plan shall be construed and enforced according to the laws of the Commonwealth of Massachusetts, to the extent not preempted by Federal law, which shall otherwise control.                                         -33-    EX-10.19 6 b58738tjexv10w19.txt EX-10.19 THE EXECUTIVE SAVINGS PLAN                                                                       EXHIBIT 10.19                               THE TJX COMPANIES, INC.                               EXECUTIVE SAVINGS PLAN                                   Third Amendment        Pursuant to Section 9.1 of The TJX Companies, Inc. Executive Savings Plan (the "ESP"), Section 11.5 of the ESP is hereby amended and clarified as follows, effective as of January 1, 2004 except as hereinafter provided:              "11.5. RETIREMENT EQUALIZATION BENEFITS. At the time a benefit is       paid to a Participant under The TJX Companies, Inc. Retirement Plan (the       "Retirement Plan") or The TJX Companies, Inc. Supplemental Executive       Retirement Plan (the "SERP") (the "Retirement Plan" and the "SERP" being       hereinafter referred to as the "Pension Plans"), the Participant shall be       entitled to receive a retirement equalization benefit having a value equal       to the difference between (a) the amount such Participant would have been       entitled to receive under the Pension Plans if none of his or her Salary       had been deferred under this Plan and (b) the amount such Participant       actually receives under the Pension Plans. Such retirement equalization       benefit shall be payable in the same form that the Participant elects to       receive benefits under the Pension Plans. Such retirement equalization       benefit shall not be payable to the extent that the Participant is       entitled to receive an equalization benefit of comparable value under the       SERP or any other plan. For the avoidance of doubt, any benefit under the       Retirement Plan that is supplemental to the formula benefit described in       Article 7 thereof shall be treated as an equalization benefit for purposes       of this Section 11.5 unless the E.C.C. expressly provides otherwise."  The action set forth herein with respect to the ESP is not intended to constitute a "material modification" of the ESP as that term is used in Section 885(d)(2)(B) of the American Jobs Creation Act of 2004, and shall be construed and applied accordingly.        IN WITNESS WHEREOF, The TJX Companies, Inc. has caused this instrument of amendment to be executed by its duly authorized officer this 16th day of December, 2004.                                        THE TJX COMPANIES, INC.                                       By:       /s/ Donald G. Campbell                                                ----------------------                                       Title:    Senior Executive Vice President                                                -------------------------------                               THE TJX COMPANIES, INC.                              EXECUTIVE SAVINGS PLAN                                  FOURTH AMENDMENT        The TJX Companies, Inc. hereby amends its Executive Savings Plan (the "Plan"), effective as of January 1, 2005, by adding the following new Section 11.5:              "11.5 SECTION 409A. Reference is made to Section 409A of the Code       and to the guidance (including transition rules and exemptive relief       provisions) issued thereunder ("Section 409A"). Consistent with Section       409A, it is intended that with respect to amounts deferred under the Plan       prior to January 1, 2005 that were both earned and vested prior to January       1, 2005, the Plan will be administered consistent with the objective of       preserving for such amounts "grandfathered" status under Section 409A,       that is, the status of deferred compensation not subject to the       requirements and limitations of Section 409A. All other deferrals under       the Plan shall be administered in compliance with the requirements of       Section 409A. It is intended in this regard that the Plan will be       comprehensively amended to comply with final rules under Section 409A       following the issuance of such rules or at such earlier time as may be       required under Section 409A or determined by the Administrator. Without       limiting the generality of the foregoing, the Plan shall be deemed amended       by this Section 11.5 to permit, with respect to any deferrals hereunder       that are subject to Section 409A, any transition-period elections       permitted under Section 409A that are authorized by the Senior Executive       Vice President - Chief Administrative and Business Development Officer of       the Company, the Senior Executive Vice President - Chief Financial Officer       of the Company, or the successor of either (a "specified Company officer")       and any cancellations and withdrawals of such any such amounts that are       authorized by a specified Company officer, except that any such action by       a specified Company officer that relates to his or her own benefit shall       require the approval of a member of the E.C.C. Notwithstanding the       foregoing, neither the Company nor any of its officers or directors, nor       any other person charged with administrative responsibilities under the       Plan, shall be liable to any Eligible Person or to any beneficiary of any       Eligible Person by reason of the failure of any deferral hereunder to       comply with, or be exempt from, the requirements of Section 409A."        IN WITNESS WHEREOF, The TJX Companies, Inc. has caused this instrument of amendment to be executed by its duly authorized officer this 12th day of December, 2005.                                               THE TJX COMPANIES, INC.                                     By:       /s/ Donald G. Campbell                                              ----------------------                                    Title:    Senior Executive Vice President     EX-21 7 b58738tjexv21.txt EX-21 SUBSIDIARIES                                                                                  .                                                                                .                                                                                .                                                                       EXHIBIT 21                                      SUBSIDIARIES  All of the following subsidiaries are either directly or indirectly owned by The TJX Companies, Inc.                                                      STATE OR JURISDICTION       NAME UNDER WHICH                                                     OF INCORPORATION            DOES BUSINESS OPERATING SUBSIDIARIES                               OR ORGANIZATION           (IF DIFFERENT) - ----------------------                            ---------------------       ----------------    NBC Attire Inc.                                   Massachusetts Newton Buying Corp.                               Delaware NBC Distributors Inc.                             Massachusetts NBC Merchants, Inc.                               Indiana NBC Charlotte Merchants, Inc.                     North Carolina NBC Nevada Merchants, Inc.                        Nevada NBC Philadelphia Merchants, Inc.                  Pennsylvania NBC Pittston Merchants, Inc.                      Pennsylvania NBC Houston Merchants, Inc.                       Texas NBC Manteca Merchants, Inc.                       California TJX Incentive Sales, Inc.                         Virginia Marmaxx Operating Corp.                           Delaware                    T.J. Maxx/Marshalls Marshalls Atlanta Merchants, Inc.                 Georgia Marshalls Bridgewater Merchants, Inc.             Virginia Marshalls Woburn Merchants, Inc.                  Massachusetts Marshalls of MA, Inc.                             Massachusetts New York Department Stores                        Puerto Rico                 Marshalls    de Puerto Rico, Inc. Marshalls of Richfield, MN, Inc.                  Minnesota Marshalls of Northridge-Devonshire, CA, Inc.      California Marshalls of Glen Burnie, MD, Inc.                Maryland Marshalls of Beacon, VA, Inc.                     Virginia Marshalls of Laredo, TX, Inc.                     Texas Marshalls of Calumet City, IL, Inc.               Illinois Marshalls of Chicago-Clark, IL, Inc.              Illinois Marshalls of Streamwood, IL, Inc.                 Illinois Marshalls of Chicago-Brickyard, IL, Inc.          Illinois Marshalls of Matteson, IL, Inc.                   Illinois Marshalls of Elizabeth, NJ, Inc.                  New Jersey Marshalls of Nevada, Inc.                         Nevada Newton Buying Company of CA, Inc.                 Delaware                    Marshalls Strathmex Corp.                                   Delaware HomeGoods, Inc.                                   Delaware H.G. Merchants, Inc.                              Massachusetts H.G. Indiana Distributors, Inc.                   Indiana H. G. Conn. Merchants, Inc.                       Connecticut HomeGoods of Puerto Rico, Inc.                    Puerto Rico NBC Apparel, Inc.                                 Delaware NBC Apparel                                       United Kingdom              T.K. Maxx T.K. Maxx Group Limited                           United Kingdom T.K. Maxx                                         United Kingdom NBC Card Services Ltd.                            United Kingdom                                          -1-                                                       STATE OR JURISDICTION       NAME UNDER WHICH                                                     OF INCORPORATION            DOES BUSINESS OPERATING SUBSIDIARIES                               OR ORGANIZATION           (IF DIFFERENT) - ----------------------                            ---------------------       ----------------    T.K. Maxx Ireland                                 Ireland Concord Buying Group, Inc.                        New Hampshire               A.J. Wright AJW Merchants Inc.                                Massachusetts               A.J. Wright NBC Manager, LLC                                  Delaware NBC Trust                                         Massachusetts NBC Operating, LP                                 Delaware NBC GP, LLC                                       Delaware T.J. Maxx of CA, LLC                              Delaware T.J. Maxx of IL, LLC                              Delaware Marshalls of CA, LLC                              Delaware Marshalls of IL, LLC                              Delaware NYDS, LLC                                         Delaware AJW South Bend Merchants, Inc.                    Indiana Bob's Stores Corp                                 New Hampshire Bob's Conn. Merchants, Inc.                       Connecticut WMI-1 Holding Company                             Nova Scotia, Canada WMI-99 Holding Company                            Nova Scotia, Canada Winners Merchants International, L.P.             Ontario, Canada NBC Holding, Inc.                                 Delaware NBC Hong Kong Merchants Limited                   Hong Kong   LEASING SUBSIDIARIES - -------------------- Cochituate Realty, Inc.                           Massachusetts NBC First Realty Corp.                            Indiana NBC Second Realty Corp.                           Massachusetts NBC Fourth Realty Corp.                           Nevada NBC Fifth Realty Corp.                            Illinois NBC Sixth Realty Corp.                            North Carolina NBC Seventh Realty Corp.                          Pennsylvania AJW Realty of Fall River, Inc.                    Massachusetts H.G. Brownsburg Realty Corp.                      Indiana H.G. Conn. Realty Corp.                           Delaware AJW South Bend Realty Corp.                       Indiana Progress Lane Realty Corp                         Connecticut                                          -2-    EX-23 8 b58738tjexv23.txt EX-23 CONSENT OF PRICEWATERHOUSECOOPERS                                                                         Exhibit 23              CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (Nos. 333-60540 and 333-05501) and on Form S-8 (Nos. 333-116277, 333-86966, 333-63293, 333-35073, and 33-49747)of The TJX Companies, Inc. of our report dated March 27, 2006 relating to the financial statements, financial statement schedule, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.   PricewaterhouseCoopers LLP Boston, Massachusetts March 28, 2006    EX-24 9 b58738tjexv24.txt EX-24 POWER OF ATTORNEY                                                                         EXHIBIT 24                                  POWER OF ATTORNEY         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Bernard Cammarata and Jeffrey Naylor and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the form 10-K to be filed by The TJX Companies, Inc. for the fiscal year ended January 28, 2006 and any or all amendments thereto and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.  /s/ Bernard Cammarata                     /s/ Jeffrey Naylor - -------------------------------------     ------------------------------------ Bernard Cammarata, Acting Chief           Jeffrey Naylor, Senior Executive Vice Executive Officer, Principal Executive    President-Finance, Principal Financial Officer and Director                      and Accounting Officer  /s/ David A. Brandon                      /s/ Richard Lesser - -------------------------------------     ------------------------------------ David A. Brandon, Director                Richard Lesser, Director  /s/ Gary Crittenden                       /s/ John F. O'Brien - -------------------------------------     ------------------------------------ Gary Crittenden, Director                 John F. O'Brien, Director  /s/ Gail Deegan                           /s/ Robert F. Shapiro - -------------------------------------     ------------------------------------ Gail Deegan, Director                     Robert F. Shapiro, Director  /s/ Dennis F. Hightower                   /s/ Willow B. Shire - -------------------------------------     ------------------------------------ Dennis F. Hightower, Director             Willow B. Shire, Director  /s/ Amy B. Lane                           /s/ Fletcher H. Wiley - -------------------------------------     ------------------------------------ Amy B. Lane, Director                     Fletcher H. Wiley, Director    Dated:     January 31, 2006    EX-31.1 10 b58738tjexv31w1.txt EX-31.1 SECTION 302 CERTIFICATION OF CEO                                SECTION 302 CERTIFICATION               EXHIBIT 31.1  CERTIFICATION  I, Bernard Cammarata, certify that:  1.    I have reviewed this annual report on Form 10-K of The TJX Companies,       Inc.;  2.    Based on my knowledge, this report does not contain any untrue statement       of a material fact or omit to state a material fact necessary to make the       statements made, in light of the circumstances under which such statements       were made, not misleading with respect to the period covered by this       report;  3.    Based on my knowledge, the financial statements, and other financial       information included in this report, fairly present in all material       respects the financial condition, results of operations and cash flows of       the registrant as of, and for, the periods presented in this report;  4.    The registrant's other certifying officer(s) and I are responsible for       establishing and maintaining disclosure controls and procedures (as       defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant       and have:        (a)   Designed such disclosure controls and procedures, or caused such             disclosure controls and procedures to be designed under our             supervision, to ensure that material information relating to the             registrant, including its consolidated subsidiaries, is made known             to us by others within those entities, particularly during the             period in which this report is being prepared;        (b)   Designed such internal control over financial reporting, or caused             such internal control over financial reporting to be designed under             our supervision, to provide reasonable assurance regarding the             reliability of financial reporting and the preparation of financial             statements for external purposes in accordance with generally             accepted accounting principles;        (c)   Evaluated the effectiveness of the registrant's disclosure controls             and procedures and presented in this report our conclusions about             the effectiveness of the disclosure controls and procedures, as of             the end of the period covered by this report based on such             evaluation; and        (d)   Disclosed in this report any change in the registrant's internal             control over financial reporting that occurred during the             registrant's most recent fiscal quarter that has materially             affected, or is reasonably likely to materially affect, the             registrant's internal control over financial reporting; and  5.    The registrant's other certifying officer(s) and I have disclosed, based       on our most recent evaluation of internal control over financial       reporting, to the registrant's auditors and the audit committee of the       registrant's board of directors (or persons performing the equivalent       functions):        (a)   All significant deficiencies and material weaknesses in the design             or operation of internal control over financial reporting which are             reasonably likely to adversely affect the registrant's ability to             record, process, summarize and report financial information; and        (b)   Any fraud, whether or not material, that involves management or             other employees who have a significant role in the registrant's             internal control over financial reporting.  Date:  March 29, 2006                                   /s/ Bernard Cammarata                                   ----------------------------------------                                    Name:     Bernard Cammarata                                   Title:    Acting Chief Executive Officer    EX-31.2 11 b58738tjexv31w2.txt EX-31.2 SECTION 302 CERTIFICATION OF CFO                         SECTION 302 CERTIFICATION                      EXHIBIT 31.2  CERTIFICATION  I, Jeffrey G. Naylor, certify that:  1.    I have reviewed this annual report on Form 10-K of The TJX Companies,       Inc.;  2.    Based on my knowledge, this report does not contain any untrue statement       of a material fact or omit to state a material fact necessary to make the       statements made, in light of the circumstances under which such statements       were made, not misleading with respect to the period covered by this       report;  3.    Based on my knowledge, the financial statements, and other financial       information included in this report, fairly present in all material       respects the financial condition, results of operations and cash flows of       the registrant as of, and for, the periods presented in this report;  4.    The registrant's other certifying officer(s) and I are responsible for       establishing and maintaining disclosure controls and procedures (as       defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant       and have:        (a)   Designed such disclosure controls and procedures, or caused such             disclosure controls and procedures to be designed under our             supervision, to ensure that material information relating to the             registrant, including its consolidated subsidiaries, is made known             to us by others within those entities, particularly during the             period in which this report is being prepared;        (b)   Designed such internal control over financial reporting, or caused             such internal control over financial reporting to be designed under             our supervision, to provide reasonable assurance regarding the             reliability of financial reporting and the preparation of financial             statements for external purposed in accordance with generally             accepted accounting principles;        (c)   Evaluated the effectiveness of the registrant's disclosure controls             and procedures and presented in this report our conclusions about             the effectiveness of the disclosure controls and procedures, as of             the end of the period covered by this report based on such             evaluation; and        (d)   Disclosed in this report any change in the registrant's internal             control over financial reporting that occurred during the             registrant's most recent fiscal quarter that has materially             affected, or is reasonably likely to materially affect, the             registrant's internal control over financial reporting; and  5.    The registrant's other certifying officer(s) and I have disclosed, based       on our most recent evaluation of internal control over financial       reporting, to the registrant's auditors and the audit committee of the       registrant's board of directors (or persons performing the equivalent       functions):        (a)   All significant deficiencies and material weaknesses in the design             or operation of internal control over financial reporting which are             reasonably likely to adversely affect the registrant's ability to             record, process, summarize and report financial information; and        (b)   Any fraud, whether or not material, that involves management or             other employees who have a significant role in the registrant's             internal control over financial reporting.  Date:  March 29, 2006                                  /s/ Jeffrey G. Naylor                                  -----------------------------------------------                                  Name:     Jeffrey G. Naylor                                  Title:    Senior Executive Vice President and                                            Chief Financial Officer    EX-32.1 12 b58738tjexv32w1.txt EX-32.1 SECTION 906 CERTIFICATION OF CEO                                                                        EXHIBIT 32.1                              CERTIFICATION PURSUANT TO             SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,                              AS ADOPTED PURSUANT TO                   SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Acting Chief Executive Officer of The TJX Companies, Inc. (the "Company"), does hereby certify that to my knowledge:        1.    the Company's Annual Report on Form 10-K for the fiscal year ended             January 28, 2006 fully complies with the requirements of Section             13(a) or 15(d) of the Securities Exchange Act of 1934; and        2.    the information contained in the Company's Annual Report on Form             10-K for the fiscal year ended January 28, 2006 fairly presents, in             all material respects, the financial condition and results of             operations of the Company.                                  /s/ Bernard Cammarata                                ----------------------------------------                                Name:  Bernard Cammarata                                Title: Acting Chief Executive Officer  Dated: March 29, 2006    EX-32.2 13 b58738tjexv32w2.txt EX-32.2 SECTION 906 CERTIFICATION OF CFO                                                                        EXHIBIT 32.2                              CERTIFICATION PURSUANT TO             SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE,                              AS ADOPTED PURSUANT TO                   SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Senior Executive Vice President and Chief Financial Officer of The TJX Companies, Inc. (the "Company"), does hereby certify that to my knowledge:        1.    the Company's Annual Report on Form 10-K for the fiscal year ended             January 28, 2006, fully complies with the requirements of Section             13(a) or 15(d) of the Securities Exchange Act of 1934; and        2.    the information contained in the Company's Annual report on Form             10-K for the fiscal year ended January 28, 2006 fairly presents, in             all material respects, the financial condition and results of             operations of the Company.                                  /s/ Jeffrey G. Naylor                                ----------------------------------------------                                Name:  Jeffrey G. Naylor                                Title: Senior Executive Vice President and                                       Chief Financial Officer  Dated: March 29, 2006    -----END PRIVACY-ENHANCED MESSAGE-----