XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.21.2

Financial Instruments | 6 Months Ended
--- | ---
Jul. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | 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. TJX seeks to minimize risk from changes in interest and foreign currency exchange rates and fuel costs through the use of derivative financial instruments when and to the extent deemed appropriate. 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 Consolidated Balance Sheets 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 accumulated other comprehensive (loss) or are recognized currently in earnings, along with an offsetting adjustment against the basis of the item being hedged. Diesel Fuel Contracts TJX hedges portions of its estimated notional diesel requirements 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 based on the price of diesel fuel. 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. During fiscal 2021, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for fiscal 2022, and during the first six months of fiscal 2022, TJX entered into agreements to hedge a portion of its estimated notional diesel requirements for the first six months of fiscal 2023. The hedge agreements outstanding at July 31, 2021 relate to approximately 47% of TJX’s estimated notional diesel requirements for the remainder of fiscal 2022 and approximately 50% of TJX’s estimated notional diesel requirements for the first six months of fiscal 2023. These diesel fuel hedge agreements will settle throughout the remainder of fiscal 2022 and throughout the first seven months of fiscal 2023. TJX elected not to apply hedge accounting to these contracts. 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 the Company’s operations in currencies other than their respective functional currencies. The contracts outstanding at July 31, 2021 cover the merchandise purchases the Company is committed to over the next several months. Additionally, TJX’s operations in Europe are subject to foreign currency exposure as a result of their buying function being centralized in the U.K. All merchandise is purchased centrally in the U.K. and then shipped and billed to the retail entities in other countries. This intercompany billing to TJX’s European businesses’ Euro denominated operations creates exposure to the central buying entity for changes in the exchange rate between the Euro and British Pound. A portion of the inflows of Euros to the central buying entity provides a natural hedge for merchandise purchased from third-party vendors that is denominated in Euros. TJX calculates any excess Euro exposure each month and enters into forward contracts of approximately 30 days' duration to mitigate this exposure. TJX also enters into derivative contracts, generally designated as fair value hedges, to hedge intercompany debt. 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 July 31, 2021:
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 July 31, 2021
Fair value hedges: |  |  |  |  |  |  |
Intercompany balances, primarily debt related: |  |  |
| zł | 45,000 |  | £ | 8,846 |  | 0.1966 |  | Prepaid Exp | $ | 562 |  | $ | — |  | $ | 562 |
| A$ | 110,000 |  | U.S.$ | 84,198 |  | 0.7654 |  | Prepaid Exp | 3,100 |  | — |  | 3,100 |
| U.S.$ | 75,102 |  | £ | 55,000 |  | 0.7323 |  | Prepaid Exp | 1,351 |  | — |  | 1,351 |
| £ | 250,000 |  | U.S.$ | 346,344 |  | 1.3854 |  | Prepaid Exp / (Accrued Exp) | 426 |  | (1,504) |  | (1,078) |
| € | 170,000 |  | U.S.$ | 207,623 |  | 1.2213 |  | Prepaid Exp / (Accrued Exp) | 5,169 |  | (143) |  | 5,026 |
| C$ | 150,000 |  | U.S.$ | 124,009 |  | 0.8267 |  | Prepaid Exp | 3,698 |  | — |  | 3,698 |
Economic hedges for which hedge accounting was not elected: |  |  |
| Diesel fuel contracts | Fixed on 3.3M – 4.0M gal per month |  | Float on 3.3M – 4.0M gal per month | N/A | Prepaid Exp | 21,805 |  | — |  | 21,805 |
Intercompany billings in TJX International, primarily merchandise related: |  |
| € | 98,000 |  | £ | 84,053 |  | 0.8577 |  | Prepaid Exp | 343 |  | — |  | 343 |
Merchandise purchase commitments: |  |  |  |  |
| C$ | 630,947 |  | U.S.$ | 512,000 |  | 0.8115 |  | Prepaid Exp / (Accrued Exp) | 7,066 |  | (1,132) |  | 5,934 |
| C$ | 34,928 |  | € | 23,500 |  | 0.6728 |  | Prepaid Exp / (Accrued Exp) | 93 |  | (161) |  | (68) |
| £ | 396,740 |  | U.S.$ | 555,900 |  | 1.4012 |  | Prepaid Exp / (Accrued Exp) | 5,202 |  | (678) |  | 4,524 |
| A$ | 52,396 |  | U.S.$ | 39,225 |  | 0.7486 |  | Prepaid Exp / (Accrued Exp) | 656 |  | (36) |  | 620 |
| zł | 400,100 |  | £ | 75,659 |  | 0.1891 |  | Prepaid Exp / (Accrued Exp) | 961 |  | (126) |  | 835 |
| U.S.$ | 55,198 |  | € | 45,000 |  | 0.8152 |  | (Accrued Exp) | — |  | (1,713) |  | (1,713) |
Total fair value of derivative financial instruments |  | $ | 50,432 |  | $ | (5,492) |  | $ | 44,940 |
The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at January 30, 2021:
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 30, 2021
Fair value hedges: |  |  |  |  |  |  |
Intercompany balances, primarily debt related: |  |  |
| zł | 45,000 |  | £ | 8,846 |  | 0.1966 |  | Prepaid Exp | $ | 11 |  | $ | — |  | $ | 11 |
| A$ | 80,000 |  | U.S.$ | 62,032 |  | 0.7754 |  | Prepaid Exp | 738 |  | — |  | 738 |
| U.S.$ | 75,102 |  | £ | 55,000 |  | 0.7323 |  | Prepaid Exp | 357 |  | — |  | 357 |
| £ | 200,000 |  | U.S.$ | 274,853 |  | 1.3743 |  | Prepaid Exp | 32 |  | — |  | 32 |
| € | 200,000 |  | U.S.$ | 244,699 |  | 1.2235 |  | Prepaid Exp / (Accrued Exp) | 427 |  | (182) |  | 245 |
Economic hedges for which hedge accounting was not elected: |  |  |
| Diesel fuel contracts | Fixed on 1.5M – 3.8M gal per month |  | Float on 1.5M– 3.8M gal per month | N/A | Prepaid Exp | 4,880 |  | — |  | 4,880 |
Merchandise purchase commitments: |  |  |  |
| C$ | 384,679 |  | U.S.$ | 296,000 |  | 0.7695 |  | Prepaid Exp / (Accrued Exp) | 430 |  | (5,627) |  | (5,197) |
| C$ | 5,391 |  | € | 3,500 |  | 0.6492 |  | Prepaid Exp | 24 |  | — |  | 24 |
| £ | 203,264 |  | U.S.$ | 263,950 |  | 1.2986 |  | (Accrued Exp) | — |  | (15,086) |  | (15,086) |
| zł | 30,000 |  | £ | 5,865 |  | 0.1955 |  | (Accrued Exp) | — |  | (29) |  | (29) |
| A$ | 46,985 |  | U.S.$ | 35,250 |  | 0.7502 |  | Prepaid Exp / (Accrued Exp) | 144 |  | (837) |  | (693) |
| U.S.$ | 99,810 |  | € | 83,700 |  | 0.8386 |  | Prepaid Exp / (Accrued Exp) | 1,986 |  | (160) |  | 1,826 |
Total fair value of derivative financial instruments |  | $ | 9,029 |  | $ | (21,921) |  | $ | (12,892) |
The following is a summary of TJX’s derivative financial instruments, related fair value and balance sheet classification at August 1, 2020:
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 August 1, 2020
Fair value hedges: |  |  |  |  |  |  |
Intercompany balances, primarily debt related: |  |
| zł | 65,000 |  | £ | 12,780 |  | 0.1966 |  | (Accrued Exp) | $ | — |  | $ | (628) |  | $ | (628) |
| € | 60,000 |  | £ | 53,412 |  | 0.8902 |  | (Accrued Exp) | — |  | (1,033) |  | (1,033) |
| A$ | 110,000 |  | U.S.$ | 70,802 |  | 0.6437 |  | (Accrued Exp) | — |  | (7,798) |  | (7,798) |
| U.S.$ | 72,475 |  | £ | 55,000 |  | 0.7589 |  | (Accrued Exp) | — |  | (448) |  | (448) |
| £ | 200,000 |  | U.S.$ | 249,499 |  | 1.2475 |  | (Accrued Exp) | — |  | (12,538) |  | (12,538) |
| C$ | 550,000 |  | U.S.$ | 390,766 |  | 0.7105 |  | (Accrued Exp) | — |  | (19,571) |  | (19,571) |
Economic hedges for which hedge accounting was not elected: |  |  |
| Diesel fuel contracts | Fixed on 2.9M – 3.5M gal per month |  | Float on 2.9M – 3.5M gal per month | N/A | (Accrued Exp) | — |  | (13,920) |  | (13,920) |
Intercompany billings in TJX International, primarily merchandise related: |  |
| € | 73,400 |  | £ | 65,678 |  | 0.8948 |  | (Accrued Exp) | — |  | (570) |  | (570) |
Merchandise purchase commitments: |  |  |
| C$ | 271,576 |  | U.S.$ | 201,700 |  | 0.7427 |  | Prepaid Exp / (Accrued Exp) | 737 |  | (1,647) |  | (910) |
| £ | 240,694 |  | U.S.$ | 304,800 |  | 1.2663 |  | Prepaid Exp / (Accrued Exp) | 34 |  | (10,415) |  | (10,381) |
| A$ | 40,156 |  | U.S.$ | 28,250 |  | 0.7035 |  | (Accrued Exp) | — |  | (447) |  | (447) |
| zł | 87,000 |  | £ | 18,059 |  | 0.2076 |  | Prepaid Exp | 419 |  | — |  | 419 |
| U.S.$ | 3,771 |  | € | 3,383 |  | 0.8971 |  | Prepaid Exp | 213 |  | — |  | 213 |
Total fair value of derivative financial instruments |  | $ | 1,403 |  | $ | (69,015) |  | $ | (67,612) |
Presented below is the impact of derivative financial instruments on the Consolidated Statements of Income (Loss) for the periods shown:
|  | Amount of Gain (Loss) Recognized in Income / (Loss) by Derivative
| Location of (Loss) Gain Recognized in Income / (Loss) by Derivative | Thirteen Weeks Ended | Twenty-Six Weeks Ended
In thousands | July 31, 2021 | August 1, 2020 | July 31, 2021 | August 1, 2020
Fair value hedges: |  |  |  |  |
Intercompany balances, primarily debt related | Selling, general and administrative expenses | $ | 15,417 |  | $ | (38,060) |  | $ | 12,553 |  | $ | (43,233) |
Economic hedges for which hedge accounting was not elected: |  |  |
Diesel fuel contracts | Cost of sales, including buying and occupancy costs | 7,276 |  | 10,123 |  | 20,846 |  | (12,731) |
Intercompany billings in TJX International, primarily merchandise related | Cost of sales, including buying and occupancy costs | 3,427 |  | (2,039) |  | 3,545 |  | (3,891) |
Merchandise purchase commitments | Cost of sales, including buying and occupancy costs | 11,710 |  | (15,808) |  | (4,259) |  | 34,327 |
Gain (loss) recognized in income / (loss) | $ | 37,830 |  | $ | (45,784) |  | $ | 32,685 |  | $ | (25,528) |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration