An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee statement of financial position, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.

Operating Leases Accounting Policy
Present Value of Future Operating Lease Payments
Analyst Adjustments for Operating Leases
Adjusted Ratios for Operating Leases (Summary)
Adjusted Total Asset Turnover
Adjusted Debt to Equity
Adjusted Return on Assets (ROA)
Adjusted Interest Coverage
Estimation of Depreciation Expense, Operating Leased Assets
Estimation of Interest Expense, Operating Lease Obligations
Present Value of Operating Lease Payments, at Beginning of Year

TJX generally leases stores, distribution centers and office space under operating leases. Store lease agreements generally include rent holidays, rent escalation clauses and contingent rent provisions for percentage of sales in excess of specified levels. TJX recognizes rent on a straight-line basis over the term of the lease, including rent holiday periods and scheduled rent increases. TJX begins recording rent expense when TJX takes possession of a store, which is typically 30 to 60 days prior to the opening of the store and generally occurs before the commencement of the lease term, as specified in the lease.

Source: 10-K (filing date: 2019-04-03).

TJX Cos. Inc., future operating lease payments

USD $ in thousands

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	Total undiscounted future operating lease payments
	Discount rate¹

	Total present value of future operating lease payments

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

¹ Weighted-average interest rate for TJX Cos. Inc.’s debt

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at
2020		2020
2021		2021
2022		2022
2023		2023
2024		2024
2025 and thereafter		2025
		2026
		2027
Total:

Based on: 10-K (filing date: 2019-04-03).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at
2019		2019
2020		2020
2021		2021
2022		2022
2023		2023
2024 and thereafter		2024
		2025
		2026
Total:

Based on: 10-K (filing date: 2018-04-04).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at
2018		2018
2019		2019
2020		2020
2021		2021
2022		2022
2023 and thereafter		2023
		2024
		2025
Total:

Based on: 10-K (filing date: 2017-03-28).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at
2017		2017
2018		2018
2019		2019
2020		2020
2021		2021
2022 and thereafter		2022
		2023
		2024
Total:

Based on: 10-K (filing date: 2016-03-29).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at
2016		2016
2017		2017
2018		2018
2019		2019
2020		2020
2021 and thereafter		2021
		2022
		2023
		2024
Total:

Based on: 10-K (filing date: 2015-03-31).

Year	Future operating lease payments (as reported)	Year	Future operating lease payments (estimated)	Present value at
2015		2015
2016		2016
2017		2017
2018		2018
2019		2019
2020 and thereafter		2020
		2021
		2022
		2023
Total:

Based on: 10-K (filing date: 2014-04-01).

TJX Cos. Inc., adjustments to financial data

USD $ in thousands

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	Adjustment to Total Assets
	Total assets (as reported)
	Add: Operating leased assets¹
	Total assets (adjusted)
	Adjustment to Total Debt
	Total debt (as reported)
	Add: Operating lease obligations²
	Total debt (adjusted)
	Adjustment to Earnings before Interest and Tax (EBIT)
	EBIT³ (as reported)
	Add-back: Rental expense under operating leases
	Less: Depreciation expense, operating leased assets⁴
	EBIT (adjusted)
	Adjustment to Interest Expense, Excluding Capitalized Interest
	Interest expense, excluding capitalized interest (as reported)
	Add: Interest expense, operating lease obligations⁵
	Interest expense, excluding capitalized interest (adjusted)

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

^{1, 2} Equal to total present value of future operating lease payments. See Details »

³ See Details »

⁴ See Details »

⁵ See Details »

TJX Cos. Inc., Financial Data: Reported vs. Adjusted

TJX Cos. Inc., adjusted ratios

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	Total Asset Turnover¹
	Reported total asset turnover
	Adjusted total asset turnover
	Debt to Equity²
	Reported debt to equity
	Adjusted debt to equity
	Return on Assets³ (ROA)
	Reported ROA
	Adjusted ROA
	Interest Coverage⁴
	Reported interest coverage
	Adjusted interest coverage

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

¹ See Details »

² See Details »

³ See Details »

⁴ See Details »

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	TJX Cos. Inc.’s adjusted total asset turnover deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	TJX Cos. Inc.’s adjusted debt-to-equity improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	TJX Cos. Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.
Adjusted interest coverage	A solvency ratio calculated as adjusted EBIT divided by adjusted interest payments.	TJX Cos. Inc.’s adjusted interest coverage deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

TJX Cos. Inc., Ratios: Reported vs. Adjusted

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net sales
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Operating Leases
	Selected Financial Data (USD $ in thousands)
	Net sales
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

2019 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	TJX Cos. Inc.’s adjusted total asset turnover deteriorated from 2017 to 2018 but then improved from 2018 to 2019 exceeding 2017 level.

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Total debt
	Shareholders’ equity
	Ratio
	Debt to equity¹
	Adjusted for Operating Leases
	Selected Financial Data (USD $ in thousands)
	Adjusted total debt
	Shareholders’ equity
	Ratio
	Adjusted debt to equity²

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

2019 Calculations

¹ Debt to equity = Total debt ÷ Shareholders’ equity
= hidden ÷ hidden = hidden

² Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted debt-to-equity	A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity.	TJX Cos. Inc.’s adjusted debt-to-equity improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019 not reaching 2017 level.

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income
	Total assets
	Ratio
	ROA¹
	Adjusted for Operating Leases
	Selected Financial Data (USD $ in thousands)
	Net income
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

2019 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	TJX Cos. Inc.’s adjusted ROA improved from 2017 to 2018 and from 2018 to 2019.

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	As Reported
	Selected Financial Data (USD $ in thousands)
	Earnings before interest and tax¹ (EBIT)
	Interest expense, excluding capitalized interest
	Ratio
	Interest coverage²
	Adjusted for Operating Leases
	Selected Financial Data (USD $ in thousands)
	Adjusted EBIT
	Adjusted interest expense, excluding capitalized interest
	Ratio
	Adjusted interest coverage³

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

¹ See Details »

2019 Calculations

² Interest coverage = EBIT ÷ Interest expense, excluding capitalized interest
= hidden ÷ hidden = hidden

³ Adjusted interest coverage = Adjusted EBIT ÷ Adjusted interest expense, excluding capitalized interest
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as adjusted EBIT divided by adjusted interest payments.	TJX Cos. Inc.’s adjusted interest coverage ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

USD $ in thousands

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	Rental expense under operating leases
	Less: Estimated interest expense, operating lease obligations¹
	Estimated depreciation expense, operating leased assets

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

¹ See Details »

USD $ in thousands

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	Operating leased assets, at beginning of year¹
	Discount rate²

	Estimated interest expense, operating lease obligations³

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

¹ See Details »

² Weighted-average interest rate for TJX Cos. Inc.’s debt

2019 Calculations

³ Estimated interest expense, operating lease obligations = Operating leased assets, at beginning of year × Discount rate
= hidden × hidden = hidden

USD $ in thousands

		Feb 2, 2019	Feb 3, 2018	Jan 28, 2017	Jan 30, 2016	Jan 31, 2015	Feb 1, 2014
	Total present value of future operating lease payments¹
	Rental expense under operating leases
	Discount rate²

	Total present value of operating lease payments, at beginning of year³

Based on: 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-04-01).

¹ Equal to total present value of future operating lease payments. See Details »

² Weighted-average interest rate for TJX Cos. Inc.’s debt

2019 Calculations

³ Total present value of operating lease payments, at beginning of year = (Total present value of future operating lease payments + Rental expense under operating leases) ÷ (1 + Discount rate)
= ( hidden + hidden ) ÷ (1 + hidden ) = hidden

	TJX Cos. Inc.	Other companies (not purchased previously)
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Relative Valuation
Discounted Cash Flow (DCF) Valuation
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Long-term Trends
Analysis
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Common-Size Financial Statements
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Long-term Trends
Analysis
Financial Reporting Quality

TJX Cos. Inc. (TJX)

Analysis of Operating Leases

Operating Leases Accounting Policy

Present Value of Future Operating Lease Payments

Analyst Adjustments for Operating Leases

TJX Cos. Inc., Financial Data: Reported vs. Adjusted

Adjusted Ratios for Operating Leases (Summary)

TJX Cos. Inc., Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)

Adjusted Interest Coverage

Estimation of Depreciation Expense, Operating Leased Assets

Estimation of Interest Expense, Operating Lease Obligations

Present Value of Operating Lease Payments, at Beginning of Year

TJX Cos. Inc. (TJX)

Analysis of Operating Leases

Operating Leases Accounting Policy

Present Value of Future Operating Lease Payments

2019 Calculations

2018 Calculations

2017 Calculations

2016 Calculations

2015 Calculations

2014 Calculations

Analyst Adjustments for Operating Leases

TJX Cos. Inc., Financial Data: Reported vs. Adjusted

Adjusted Ratios for Operating Leases (Summary)

TJX Cos. Inc., Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Debt to Equity

Adjusted Return on Assets (ROA)

Adjusted Interest Coverage

Estimation of Depreciation Expense, Operating Leased Assets

Estimation of Interest Expense, Operating Lease Obligations

Present Value of Operating Lease Payments, at Beginning of Year