Note C. Reserves Related to Former Operations

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


	Thirty-Nine Weeks Ended
In thousands	October 31, 2015			November 1, 2014
Balance at beginning of year	$	14,574		$	31,363
Additions (reductions) to the reserve charged to net income:
Adjustments to lease-related obligations		—			(10,313	)
Interest accretion		—			470
Charges against the reserve:
Lease-related obligations		(1,595	)		(4,267	)
Other		(428	)		(77	)

Balance at end of period	$	12,551		$	17,176

The lease-related obligations included in the reserve reflect TJX’s estimation of lease costs, net of estimated assignee/subtenant income, and the cost of probable claims against TJX for liability, as an original lessee and/or guarantor of the leases of former TJX businesses, after mitigation of the number and cost of these lease obligations. During the first nine months of fiscal 2015, TJX decreased this reserve by $10.3 million to reflect a change in the Company’s estimate of the subtenant income. 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 two 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 10 leases of former TJX businesses, 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.