In a footnote in its Nov. 13 earnings announcement, TJX increased its estimate of pre-tax charges for the worlds worst credit card data breach to $216 million. Back in August, it had projected only a $168 million pre-tax hit.
The data breach consisted of extensive cyber-thief activity within TJXs network from 2003 through June 2004 and then again from mid-May 2006 through mid-December 2006, TJX said. Court filings have estimated that the data from some 96 million credit cards was accessed during the incidents.
"This reserve reflects [TJXs] estimation of probable losses in accordance with generally accepted accounting principles based on information available to [TJX] and includes an estimation of total potential cash liabilities, from pending litigation, proceedings, investigations and other claims, as well as legal and other costs and expenses, arising from the computer intrusion," TJX said in its SEC filing.
In the second quarter (which ended July 28, 2007), TJX "recorded an after-tax reserve of $107 million for its estimated exposure to potential losses" on top of an earlier $23 million hit, TJX said.
Retail Center Editor Evan Schuman can be reached at Evan.Schuman@ziffdavisenterprise.com.
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