Note C. Reserves Related to Former Operations

TJX has a reserve for its estimate of future obligations of business operations it has closed or sold. The reserve activity for the last three fiscal years is presented below:


	Fiscal Year Ended
In thousands	January 31, 2015			February 1, 2014			February 2, 2013
Balance at beginning of year	$	31,363		$	45,229		$	45,381
Additions (reductions) to the reserve charged to net income:
Adjustments to lease-related obligations		(12,300	)		(3,312	)		16,000
Interest accretion		525			1,440			996
Charges against the reserve:
Lease-related obligations		(4,907	)		(11,088	)		(15,682	)
Termination benefits and all other		(107	)		(906	)		(1,466	)
Balance at end of year	$	14,574		$	31,363		$	45,229

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 A.J. Wright and other former TJX businesses, after mitigation of the number and cost of these lease obligations. TJX decreased this reserve by $12.3 million in fiscal 2015 and $3.3 million in fiscal 2014 and in fiscal 2013, increased the reserve by $16.0 million. In each case these adjustments were required to reflect a change in TJX’s estimate of lease-related obligations and/or assignee/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 ten leases of BJ’s Wholesale Club, a former TJX business, and up to two 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.