HR Block 2013 Annual Report Download - page 75

68 H&R Block 2013 Form 10-K
under the 2012 CLOC from time to time in the future to support working capital requirements or for other general
corporate purposes.
On October 26, 2004, we issued $400.0 million of 5.125% Senior Notes under our shelf registration. The Senior
Notes are due to mature on October 30, 2014 and are not redeemable by the bondholders prior to maturity.
We have a capitalized lease obligation of $9.7 million at April 30, 2013, that is collateralized by land and buildings.
The obligation is due over the next 10 years.
The aggregate payments required to retire long-term debt are $0.7 million, $400.4 million, $0.8 million, $0.8 million,
$1.0 million and $503.0 million in fiscal years 2014, 2015, 2016, 2017, 2018 and beyond, respectively.
HRB Bank is a member of the FHLB, which extends credit to member banks based on eligible collateral. At April 30,
2013, HRB Bank had FHLB advance capacity of $436.2 million. At April 30, 2013, we had no balance outstanding on
this facility. Mortgage loans held for investment of $252.5 million and AFS securities of $264.0 million serve as eligible
collateral and are used to determine total capacity.
NOTE 10: OTHER NONCURRENT ASSETS AND LIABILITIES
We have deferred compensation plans that permit certain employees to defer portions of their compensation and accrue
income on the deferred amounts. Included in other noncurrent liabilities is $42.5 million and $48.0 million at April 30,
2013 and 2012, respectively, reflecting our obligation under these plans. We purchased whole-life insurance contracts
on certain participants to recover distributions made or to be made under these plans. The cash surrender value of the
policies and other assets totaled $17.8 million and $99.0 million at April 30, 2013 and 2012, respectively. Certain of
these assets are restricted, as they are only available to fund the related liabilities. The decline in these assets is due to
the redemption of policies with a recorded cash value of $81.1 million in fiscal year 2013. The cash surrender value of
these policies and other assets are included in other noncurrent assets on the consolidated balance sheet as of April 30,
2013. As of April 30, 2012, $81.4 million of these assets were classified as current and included in prepaid and other
current assets on the consolidated balance sheet, due to our plan to liquidate. The remaining balance of $17.6 million
was included in other noncurrent assets as of April 30, 2012.
NOTE 11: FAIR VALUE
FAIR VALUE MEASUREMENT
We use the following classification of financial instruments pursuant to the fair value hierarchy methodologies for
assets measured at fair value:
Level 1 - inputs to the valuation are quoted prices in an active market for identical assets.
Level 2 - inputs to the valuation include quoted prices for similar assets in active markets utilizing a third-party
pricing service to determine fair value.
Level 3 - valuation is based on significant inputs that are unobservable in the market and our own estimates of
assumptions that we believe market participants would use in pricing the asset.
Financial instruments are presented in the tables that follow by recurring or nonrecurring measurement status.
Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the financial
statements at each reporting date. Assets measured on a nonrecurring basis are assets that, as a result of an event or
circumstance, were required to be remeasured at fair value after initial recognition in the financial statements at some
time during the reporting period.
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