8-KEarnings & ResultsOther EventsExhibits & Filings

TJX COMPANIES INC /DE/ 8-K Report, Financial Results (Feb 2, 2006)

Filed February 2, 2006For Securities:TJX

Summary

TJX Companies, Inc. (TJX) has filed an 8-K report detailing two significant financial events impacting its fourth quarter and full fiscal year 2006 results. The company announced its early adoption of SFAS No. 123R, which requires expensing stock-based compensation. This adoption is expected to reduce earnings per share by $0.03 in the fourth quarter and $0.12 for the full fiscal year. TJX has chosen a modified retrospective transition, meaning prior period financial statements will be restated to reflect this new expense.

Key Highlights

  • 1Early adoption of SFAS No. 123R for stock-based compensation in Q4 FY2006.
  • 2SFAS 123R adoption expected to reduce FY2006 EPS by $0.12 and Q4 FY2006 EPS by $0.03.
  • 3TJX elected the modified retrospective transition method for SFAS 123R, adjusting prior period financial statements.
  • 4Announcement of a one-time tax benefit from the repatriation of foreign earnings.
  • 5Repatriation of approximately US$260 million in accumulated earnings from its Canadian subsidiary.
  • 6The repatriation is expected to yield a one-time tax benefit of approximately $47 million, or $0.10 per share, in Q4 FY2006.
  • 7This repatriation is enabled by recent U.S. tax legislation offering a reduced tax rate for repatriating foreign earnings.

Frequently Asked Questions

SFAS No. 123R is a accounting standard that requires companies to recognize the cost of stock-based compensation (like stock options) as an expense. TJX's early adoption of this standard in the fourth quarter of fiscal year 2006 is expected to reduce its earnings per share by $0.03 for that quarter and $0.12 for the full fiscal year. Prior financial statements will be adjusted to reflect this.

TJX will recognize a one-time tax benefit of approximately $47 million, or $0.10 per share, in the fourth quarter of fiscal year 2006. This benefit arises from the repatriation of approximately US$260 million in accumulated earnings from its Canadian subsidiary, Winners Merchants International L.P., under a new U.S. tax law that allows for a reduced tax rate on such repatriations.

Yes, TJX has elected the modified retrospective transition method for SFAS 123R. This means that prior period financial statements will be adjusted to reflect the expense of stock option compensation on a consolidated basis, as well as within the segment data.

TJX's Board of Directors approved the repatriation of approximately US$260 million of accumulated earnings from its Canadian subsidiary, Winners Merchants International L.P. This repatriation was completed in January 2006.