Note B. Reserves related to Former Operations

Reserves Related to Former Operations: TJX has a reserve for its estimate of future obligations of former business operations that TJX has either closed or sold. The reserve activity is presented below:


	Thirty-Nine Weeks Ended
In thousands	November 2, 2013			October 27, 2012
Balance at beginning of year	$	45,229		$	45,381
Additions to the reserve charged to net income:
A.J. Wright closing costs		—			16,000
Interest accretion		1,080			536
Charges against the reserve:
Lease-related obligations		(9,591	)		(10,008	)
Termination benefits and all other		(516	)		(1,124	)

Balance at end of period	$	36,202		$	50,785

During the third quarter of fiscal 2013 TJX increased this reserve by $16 million to reflect a change in the Company’s estimate of lease-related obligations. The lease-related obligations included in the reserve reflect TJX’s estimation of lease costs, net of estimated subtenant income, and the cost of probable claims against TJX for liability, as an original lessee or guarantor of the leases of A.J. Wright and other former TJX businesses, after mitigation of the number and cost of these lease obligations. The actual net cost of these lease-related obligations may differ from TJX’s estimate. TJX estimates that the majority of the former operations reserve will be paid in the next three years. The actual timing of cash outflows will vary depending on how the remaining lease obligations are actually settled.

TJX may also be contingently liable on up to 12 leases of BJ’s Wholesale Club, a former TJX business, and up to four leases of Bob’s Stores, also a former TJX business, in addition to leases included in the reserve. The reserve for former operations does not reflect these leases because TJX believes that the likelihood of future liability to TJX is remote.