Q: TJX achieved an after-tax return on average shareholders’ equity of 44% in 2003 and has achieved a return of over 42% for the last five consecutive years. How does the Company’s financial strength help it achieve its goals?

A: At TJX, we believe financial stability translates to ability to expand our existing businesses, ability to embark on new ventures to support our long-term growth, and ability to continue achieving strong returns for our shareholders, simultaneously. Our long history of delivering consistent growth has benefited our shareholders, Associates, vendors, and other business associates, and gives us great confidence in our ability to achieve our future growth plans.

With our strong operations, we produce significant amounts of cash that allow us to fund our growth internally while returning excellent value to our shareholders through share repurchases and dividend payments. In 2003, having begun the year with a significant cash balance, we generated an additional $771 million in cash from operations. We utilized $409 million to reinvest in our growing businesses, approximately $58 million to acquire Bob?s Stores and repurchased $515 million of TJX stock. Once again, we began another year in an excellent financial position, with $246 million of cash at the beginning of 2004.

With our disciplined approach to investing capital, we make relatively small investments in opening stores. New stores typically achieve profitability within their first year of operation and deliver returns on investment well above our cost of capital and higher than most in the retail industry.

Our financial stability and conservative balance sheet allow us to embark on new ventures while we continue to grow our existing operations. Our acquisition of Bob?s Stores in December 2003 for approximately $58 million represents a relatively small investment in a business with great long-term growth potential for TJX. Bob?s Stores is a value-oriented retailer of casual apparel for the whole family that we believe we can grow to a multi-billion-dollar chain over time.

Our Company continues to achieve earnings growth and returns to investors that far exceed most other companies, both within and outside the retail industry. In the 2004 Fortune 500 rankings, in which TJX ranked 148, we placed in the top ten percent of all Fortune 500 companies for 10-year growth in earnings and in the top five percent for return on shareholders? equity.

With our strong balance sheet, we have one of the highest investment credit ratings in the retail industry. This excellent credit rating is very valuable to our vendors and real estate developers because of the assurance it offers them in our financial stability.

We remain committed to maintaining our strong financial position and believe it will continue to benefit our growth in the short and long term.