HR Block 2010 Annual Report Download - page 50

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currency rates during the periods in which the contracts are outstanding. The counterparties to our currency
exchange contracts consist of major financial institutions, each of which is rated investment grade. We are
exposed to credit risk to the extent of potential non-performance by counterparties on financial instruments. Any
potential credit exposure does not exceed the fair value. We believe the risk of incurring losses due to credit risk is
remote. At April 30, 2010 we had no forward exchange contracts outstanding.
SENSITIVITY ANALYSIS
The sensitivities of certain financial instruments to changes in interest rates as of April 30, 2010 and 2009 are
presented below. The following table represents hypothetical instantaneous and sustained parallel shifts in
interest rates and should not be relied on as an indicator of future expected results. The impact of a change in
interest rates on other factors, such as delinquency and prepayment rates, is not included in the analysis below.
Carrying Value at
April 30, 2010 ⫺300 ⫺200 ⫺100 +100 +200 +300
Basis Point Change
(in 000s)
Mortgage loans held for investment $ 595,405 $ 60,251 $ 43,363 $ 20,780 $ (7,906) $ (12,525) $ (14,664)
Mortgage-backed securities 23,016 123 125 134 (272) (411) (510)
Carrying Value at
April 30, 2009 ⫺300 ⫺200 ⫺100 +100 +200 +300
Basis Point Change
Mortgage loans held for investment $ 744,899 $ 115,319 $ 76,202 $ 33,253 $ (28,847) $ (58,293) $ (85,922)
Mortgage-backed securities 26,793 803 727 398 (1,188) (1,675) (1,906)
34 H&R BLOCK 2010 Form 10K