The Company periodically enters into forward foreign exchange contracts to hedge firm U.S. dollar merchandise purchase commitments made by its Canadian subsidiary. As of January 31, 1998, the Company had $20.2 million of such contracts outstanding. The contracts cover commitments for the first quarter of fiscal 1999 and any gain or loss on the contract will ultimately be reflected in the cost of the merchandise. Deferred gains and losses on the contracts as of January 31, 1998 were immaterial.
  The Company also has entered into several foreign currency swap and forward contracts in both Canadian dollars and British pounds sterling. Both the swap and forward agreements are accounted for as a hedge against the Company's investment in foreign subsidiaries; thus, foreign exchange gains and losses on the agreements are recognized in shareholders' equity thereby offsetting translation adjustments associated with the Company's investment in foreign operations. The gains or losses on this hedging activity as of January 31, 1998 are immaterial.
  The Canadian swap and forward agreements will require the Company to pay C$41.7 million in exchange for $31.2 million in U.S. currency between October 2003 and September 2004. The British pounds sterling swap and forward agreements will require the Company to pay £59.9 million between October 1999 and September 2002 in exchange for $94.1 million in U.S. currency.
  The agreements contain rights of offset which minimize the Company's exposure to credit loss in the event of nonperformance by one of the counterparties. The interest rates payable on the foreign currency swap agreements are slightly higher than the interest rates receivable on the currency exchanged, resulting in deferred interest costs which are being amortized to interest expense over the term of the related agreements. The premium cost or discount associated with the forward contracts is being amortized over the term of the related agreements and is included with the gain or loss of the hedging instrument. The unamortized balance of the net deferred costs was $4.3 million and $4.1 million as of January 31, 1998 and January 25, 1997, respectively.
  The counterparties to the exchange contracts and swap agreements are major international financial institutions. The Company periodically monitors its position and the credit ratings of the counterparties and does not anticipate losses resulting from the nonperformance of these institutions.
  The fair value of the Company's long-term debt, including current installments, is estimated using discounted cash flow analysis based upon the Company's current incremental borrowing rates for similar types of borrowing arrangements. The fair value of long-term debt, including current installments, at January 31, 1998 is estimated to be $253 million compared to a carrying value of $244.4 million. These estimates do not necessarily reflect certain provisions or restrictions in the various debt agreements which might affect the Company's ability to settle these obligations.

The Company is committed under long-term leases related to its continuing operations for the rental of real estate, and fixtures and equipment. T.J. Maxx leases are generally for a ten year initial term with options to extend for one or more five year periods. Marshalls leases, acquired in fiscal 1996, have remaining terms ranging up to twenty-five years. In addition, the Company is generally required to pay insurance, real estate taxes and other operating expenses including, in some cases, rentals based on a percentage of sales.
  Following is a schedule of future minimum lease payments for continuing operations as of January 31, 1998:

	Operating
In Thousands	Leases
Fiscal Year
1999	$  302,177
2000	288,603
2001	260,753
2002	233,513
2003	210,983
Later years	1,006,059
Total future minimum lease payments	$2,302,088