According to TJX's earnings statement issued Wednesday (Feb. 25), the chain had set aside significantly more money than it ended up needing to deal with the 2006 breach, thereby allowing the company to reallocate cash for other purposes and add about $18 million to the year's net income.
"TJX was not able to reasonably estimate the losses it would incur as a result of the Computer Intrusion until the second quarter of fiscal 2008. Prior to establishing this reserve, TJX expensed the costs related to the Computer Intrusion as incurred," the TJX earnings statement said. "The provision for Computer Intrusion related costs for the fiscal year ended Jan. 26, 2008, was a pre-tax charge of $197 million, which reduced net income for the fiscal year by $119 million, or $0.25 per share. TJX evaluates its provision for Computer Intrusion related costs on an ongoing basis as result of negotiations, settlement of disputes, insurance recoveries and other matters."
The statement added that "TJX reduced the provision during the fiscal 2008 fourth quarter by $19 million, which increased net income by $11 million, or $0.02 per share, last year. During the current fiscal year, TJX reduced its provision for Computer Intrusion related costs by $23.5 million in the fourth quarter ended Jan. 31, 2009, and $30.5 million for the full year, increasing fiscal 2009 fourth quarter net income by $14 million, or $0.03 per share, and fiscal 2009 net income by $18 million, or $0.04 per share."