HR Block 2015 Annual Report Download - page 43

36 2015 Form 10-K | H&R Block, Inc.
The following table provides ratings for debt issued by Block Financial as of April 30, 2015 and 2014:
Short-term Long-term Outlook
Moody's P-2 Baa2 Stable
S&P A-2 BBB Negative
CASH AND INVESTMENT SECURITIES – As of April 30, 2015, we held cash and cash equivalents of $2.0 billion,
including $474.9 million held by HRB Bank and $155.5 million held by our foreign subsidiaries.
Dividends of cash balances held by HRB Bank would be subject to regulatory approval and are therefore not available
for general corporate purposes. HRB Bank received regulatory approval and subsequently paid cash dividends and
returned capital of $250.0 million during fiscal year 2015. HRB Bank did not pay any dividends during fiscal years 2014
or 2013.
As of April 30, 2015, we also held investments, primarily mortgage backed securities, with a carrying value of $441.7
million which we classified as available for sale. As discussed above, it is our intent (subject to market conditions) to
liquidate the majority of these securities in connection with a closing of the P&A Transaction.
Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S.
operations. To mitigate foreign currency exchange rate risk, in fiscal years 2015 and 2014 we entered into foreign
exchange forward contracts. There were no forward contracts outstanding as of April 30, 2015.
As of April 30, 2015, our Canadian operations had approximately $52 million of U.S. dollar denominated borrowings
owed to various U.S. subsidiaries. These borrowings may be repaid in full or in part at any time. Non-borrowed funds
would have to be repatriated to be available to fund domestic operations, and in certain circumstances this would
trigger additional income taxes on those amounts. We do not currently intend to repatriate any non-borrowed funds
held by our foreign subsidiaries.
The impact of changes in foreign exchange rates during the period on our international cash balances resulted in
a decrease of $10.0 million during fiscal year 2015 compared to a decrease of $17.6 million and an increase of $1.6
million in fiscal years 2014 and 2013, respectively. This change resulted primarily from a decline in Canadian exchange
rates.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – A summary of our obligations to make future
payments as of April 30, 2015, is as follows:
(in 000s)
Total Less Than
1 Year 1 - 3 Years 4 - 5 Years After 5 Years
Long-term debt (including interest) $ 717,436 $ 27,500 $ 55,000 $ 55,000 $ 579,936
Customer deposits (including interest) 745,242 744,772 462 8 —
Contingent acquisition payments 10,667 8,746 1,921 — —
Capital lease obligations 8,194 790 1,807 2,100 3,497
Operating leases 548,364 197,199 246,128 94,325 10,712
Total contractual cash obligations $ 2,029,903 $ 979,007 $ 305,318 $ 151,433 $ 594,145
The table above does not reflect unrecognized tax benefits of approximately $86 million due to the high degree
of uncertainty regarding the future cash flows associated with these amounts.
See discussion of contractual obligations and commitments in Item 8, within the notes to the consolidated financial
statements.