HR Block 2011 Annual Report Download - page 66

Download and view the complete annual report

Please find page 66 of the 2011 HR Block annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

The following table presents for each hierarchy level the assets that were remeasured at fair value on both a
recurring and non-recurring basis during fiscal years 2011 and 2010 and the gains (losses) on those
remeasurements:
Total Level 1 Level 2 Level 3 Gain (loss)
(dollars in 000s)
As of April 30, 2011:
Recurring:
Mortgage-backed securities $ 158,177 $ –$ 158,177 $ –$ 207
Municipal bonds 8,740 –8,740 –405
Non-recurring:
REO 12,366 ––12,366 (1,920)
Impaired mortgage loans held for investment 90,628 ––90,628 (11,390)
$ 269,911 $ –$ 166,917 $ 102,994 $ (12,698)
As a percentage of total assets 5.2% –% 3.2% 2.0%
As of April 30, 2010:
Recurring:
Mortgage-backed securities $ 23,016 $ – $ 23,016 $ – $ (10)
Municipal bonds 8,901 – 8,901 – 459
Trust preferred security 31 – 31 – (1,823)
Non-recurring:
REO 16,291 – – 16,291 (4,430)
Impaired mortgage loans held for investment 88,456 – – 88,456 (9,453)
$ 136,695 $ – $ 31,948 $ 104,747 $ (15,257)
As a percentage of total assets 2.6% – % 0.6% 2.0%
There were no changes to the unobservable inputs used in determining the fair values of our level 2 and level 3
financial assets.
The following methods were used to determine the fair values of our other financial instruments:
쐍Cash equivalents, accounts receivable, investment in FHLB stock, accounts payable, accrued liabilities,
commercial paper borrowings and the current portion of long-term debt – The carrying values reported in the
balance sheet for these items approximate fair market value due to the relative short-term nature of the
respective instruments.
쐍Mortgage loans held for investment – The fair value of mortgage loans held for investment is generally
determined using market pricing sources based on origination channel and performance characteristics.
쐍Deposits – The estimated fair value of demand deposits is the amount payable on demand at the reporting
date. The estimated fair value of IRAs and other time deposits is estimated by discounting the future cash
flows using the rates currently offered by HRB Bank for products with similar remaining maturities.
쐍Long-term borrowings and FHLB borrowings – The fair value of borrowings is based on rates currently
available to us for obligations with similar terms and maturities, including current market rates on our Senior
Notes.
The carrying amounts and estimated fair values of our financial instruments at April 30, 2011 are as follows:
Carrying
Amount
Estimated
Fair Value
(in 000s)
Mortgage loans held for investment $ 485,008 $ 295,154
Deposits 863,898 865,318
Long-term debt 1,053,191 1,112,886
FHLB advances 25,000 24,998
54 H&R BLOCK 2011 Form 10K