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Financial Instruments | 12 Months Ended
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Feb. 02, 2013
Financial Instruments | Note E. Financial Instruments As a result of its operating and financing activities, TJX is exposed to market risks from changes in interest and foreign currency exchange rates and fuel costs. These market risks may adversely affect TJX’s operating results and financial position. When and to the extent deemed appropriate, TJX seeks to minimize risk from changes in interest and foreign currency exchange rates and fuel costs through the use of derivative financial instruments. TJX does not use derivative financial instruments for trading or other speculative purposes and does not use any leveraged derivative financial instruments. TJX recognizes all derivative instruments as either assets or liabilities in the statements of financial position and measures those instruments at fair value. The fair values of the derivatives are classified as assets or liabilities, current or non-current, based upon valuation results and settlement dates of the individual contracts. 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, along with an offsetting adjustment against the basis of the item being hedged. TJX does not hedge its net investments in foreign subsidiaries. Diesel Fuel Contracts: During fiscal 2012 and fiscal 2013, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2013 and fiscal 2014, based on the diesel fuel expected to be consumed by independent freight carriers transporting TJX’s inventory. Independent freight carriers transporting TJX’s inventory charge TJX a mileage surcharge for diesel fuel price increases as incurred by the carrier. The hedge agreements are designed to mitigate the volatility of diesel fuel pricing (and the resulting per mile surcharges payable by TJX) by setting a fixed price per gallon for the period being hedged. TJX elected not to apply hedge accounting rules to these contracts. The hedge agreements outstanding at February 2, 2013 relate to 29% of TJX’s estimated notional diesel requirements for fiscal 2014. These diesel fuel hedge agreements will settle throughout fiscal 2014. Foreign Currency Contracts: TJX enters into forward foreign currency exchange contracts to obtain economic hedges on portions of merchandise purchases made and anticipated to be made by TJX Europe (United Kingdom, Ireland, Germany and Poland), TJX Canada (Canada), Marmaxx (U.S.) and HomeGoods (U.S.) in currencies other than their respective functional currencies. These contracts typically have a term of twelve months or less. The contracts outstanding at February 2, 2013 cover a portion of such actual and anticipated merchandise purchases throughout fiscal 2014. TJX elected not to apply hedge accounting rules to these contracts. 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 selling, general and administrative expenses 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 selling, general and administrative expenses. The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at February 2, 2013:
In thousands |  | Pay |  |  | Receive |  |  | Blended Contract Rate |  |  | Balance Sheet Location |  |  | Current Asset U.S.$ |  |  | Current (Liability) U.S.$ |  |  | Net Fair Value in U.S.$ at February 2, 2013 |
Fair value hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany balances, primarily short-term debt and related interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | zł 141,500 |  |  |  | C$ 44,551 |  |  |  | 0.3148 |  |  |  | (Accrued Exp) |  |  | $ | — |  |  | $ | (1,357 | ) |  | $ | (1,357 | )
|  |  | € 44,281 |  |  |  | £ 35,781 |  |  |  | 0.8080 |  |  |  | (Accrued Exp) |  |  |  | — |  |  |  | (4,531 | ) |  |  | (4,531 | )
|  |  | € 90,292 |  |  |  | U.S.$ 118,511 |  |  |  | 1.3125 |  |  |  | (Accrued Exp) |  |  |  | — |  |  |  | (4,823 | ) |  |  | (4,823 | )
|  |  | U.S.$ 87,117 |  |  |  | £ 55,000 |  |  |  | 0.6313 |  |  |  | (Accrued Exp) |  |  |  | — |  |  |  | (974 | ) |  |  | (974 | )
Economic hedges for which hedge accounting was not elected: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diesel contracts |  |  | Fixed on 1.1M —1.7M gal per month |  |  |  | Float on 1.1M —1.7M gal per month |  |  |  | N/A |  |  |  | Prepaid Exp |  |  |  | 3,372 |  |  |  | — |  |  |  | 3,372 |
Merchandise purchase commitments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | C$ 238,273 |  |  |  | U.S.$ 240,814 |  |  |  | 1.0107 |  |  |  | Prepaid Exp / (Accrued Exp) |  |  |  | 2,205 |  |  |  | (189 | ) |  |  | 2,016 |
|  |  | C$ 4,752 |  |  |  | € 3,700 |  |  |  | 0.7786 |  |  |  | Prepaid Exp |  |  |  | 282 |  |  |  | — |  |  |  | 282 |
|  |  | £ 67,746 |  |  |  | U.S.$ 108,900 |  |  |  | 1.6075 |  |  |  | Prepaid Exp |  |  |  | 2,602 |  |  |  | — |  |  |  | 2,602 |
|  |  | £ 10,935 |  |  |  | € 13,000 |  |  |  | 1.1888 |  |  |  | Prepaid Exp |  |  |  | 565 |  |  |  | — |  |  |  | 565 |
|  |  | U.S.$ 7,099 |  |  |  | € 5,443 |  |  |  | 0.7667 |  |  |  | Prepaid Exp |  |  |  | 326 |  |  |  | — |  |  |  | 326 |
Total fair value of financial instruments |  |  |  |  |  |  |  |  |  |  | $ | 9,352 |  |  | $ | (11,874 | ) |  | $ | (2,522 | )
The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 28, 2012:
In thousands |  | Pay |  |  | Receive |  |  | Blended Contract Rate |  |  | Balance Sheet Location |  |  | Current Asset U.S.$ |  |  | Current (Liability) U.S.$ |  |  | Net Fair Value in U.S.$ at January 28, 2012 |
Fair value hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany balances, primarily short-term debt and related interest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | zł 62,000 |  |  |  | C$ 18,237 |  |  |  | 0.2941 |  |  |  | (Accrued Exp) |  |  | $ | — |  |  | $ | (784 | ) |  | $ | (784 | )
|  |  | € 25,000 |  |  |  | £ 21,335 |  |  |  | 0.8534 |  |  |  | Prepaid Exp |  |  |  | 333 |  |  |  | — |  |  |  | 333 |
|  |  | € 75,292 |  |  |  | U.S.$ 100,781 |  |  |  | 1.3385 |  |  |  | Prepaid Exp / (Accrued Exp) |  |  |  | 1,156 |  |  |  | (98 | ) |  |  | 1,058 |
|  |  | U.S.$ 85,389 |  |  |  | £ 55,000 |  |  |  | 0.6441 |  |  |  | Prepaid Exp |  |  |  | 796 |  |  |  | — |  |  |  | 796 |
Economic hedges for which hedge accounting was not elected: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diesel contracts |  |  | Fixed on 450K—1.5M gal per month |  |  |  | Float on 450K—1.5M gal per month |  |  |  | N/A |  |  |  | Prepaid Exp |  |  |  | 1,698 |  |  |  | — |  |  |  | 1,698 |
Merchandise purchase commitments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | C$ 272,210 |  |  |  | US$ 273,356 |  |  |  | 1.0042 |  |  |  | Prepaid Exp / (Accrued Exp) |  |  |  | 4,201 |  |  |  | (2,175 | ) |  |  | 2,026 |
|  |  | C$ 8,475 |  |  |  | € 6,300 |  |  |  | 0.7434 |  |  |  | Prepaid Exp / (Accrued Exp) |  |  |  | 53 |  |  |  | (178 | ) |  |  | (125 | )
|  |  | £ 40,401 |  |  |  | U.S.$ 63,000 |  |  |  | 1.5594 |  |  |  | (Accrued Exp) |  |  |  | — |  |  |  | (541 | ) |  |  | (541 | )
|  |  | £ 33,793 |  |  |  | € 40,000 |  |  |  | 1.1837 |  |  |  | Prepaid Exp / (Accrued Exp) |  |  |  | 135 |  |  |  | (405 | ) |  |  | (270 | )
|  |  | U.S.$ 3,135 |  |  |  | € 2,366 |  |  |  | 0.7547 |  |  |  | Prepaid Exp / (Accrued Exp) |  |  |  | 28 |  |  |  | (36 | ) |  |  | (8 | )
Total fair value of financial instruments |  |  |  |  |  |  |  |  |  |  | $ | 8,400 |  |  | $ | (4,217 | ) |  | $ | 4,183 |
The impact of derivative financial instruments on the statements of income during fiscal 2013, fiscal 2012 and fiscal 2011 are as follows:
|  |  |  | Amount of Gain (Loss) Recognized in Income by Derivative |
In thousands |  | Location of Gain (Loss) Recognized in Income by Derivative |  | February 2, 2013 |  |  | January 28, 2012 |  |  | January 29, 2011 |
|  |  |  | (53 weeks) |  |  |  |  |  |  |
Fair value hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany balances, primarily short-term debt and related interest |  | Selling, general and administrative expenses |  | $ | (7,661 | ) |  | $ | 4,313 |  |  | $ | 2,551 |
Economic hedges for which hedge accounting was not elected: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diesel contracts |  | Cost of sales, including buying and occupancy costs |  |  | 4,261 |  |  |  | 1,626 |  |  |  | (2,872 | )
Merchandise purchase commitments |  | Cost of sales, including buying and occupancy costs |  |  | (2,084 | ) |  |  | (1,345 | ) |  |  | (15,688 | )
Gain (loss) recognized in income |  |  |  | $ | (5,484 | ) |  | $ | 4,594 |  |  | $ | (16,009 | )

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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