HR Block 2016 Annual Report Download - page 56

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48 2016 Form 10-K | H&R Block, Inc.
Balances presented above as short-term are included in receivables, while the long-term portions are included in
other noncurrent assets in the consolidated balance sheets.
Loans to Franchisees. Loans made to franchisees as of April 30, 2016 consisted of $61.2 million in term loans made
primarily to finance the purchase of franchises and $35.1 million in revolving lines of credit primarily for the purpose
of funding off-season working capital needs. Loans made to franchisees as of April 30, 2015 consisted of $80.8 million
in term loans and $40.3 million in revolving lines of credit.
As of April 30, 2016 and 2015, we had $0.3 million and $0.1 million of loans, respectively, more than 30 days past
due. We had no loans to franchisees on non-accrual status as of April 30, 2016 or 2015.
Canadian Cash Back® Program. Refunds advanced under the Cash Back program are not subject to credit approval,
therefore the primary indicator of credit quality is the age of the receivable amount. Cash Back amounts are generally
received within 60 days of filing the client's return. As of April 30, 2016 and 2015, $1.5 million and $1.3 million,
respectively, of Cash Back balances were more than 60 days old.
H&R Block Emerald Advance® lines of credit. Beginning in fiscal year 2016, we no longer originate EAs. These lines
of credit are originated by BofI, and we purchase a participation interest in them.
We review the credit quality of our EA receivables based on pools, which are segregated by the year of origination,
with older years being deemed more unlikely to be repaid. These amounts as of April 30, 2016, by year of origination,
are as follows:
(in 000s)
Credit Quality Indicator – Year of origination:
2016 $ 10,867
2015 2,789
2014 and prior (2,127)
Revolving loans 14,432
$ 25,961
As of April 30, 2016 and 2015, $21.1 million and $18.7 million of EAs were on non-accrual status and classified as
impaired, or more than 60 days past due, respectively.
Allowance for Doubtful Accounts. Activity in the allowance for doubtful accounts for our receivables is as follows:
(in 000s)
EAs All Other Total
Balances as of May 1, 2013 $ 7,390 $ 50,313 $ 57,703
Provision 24,619 46,439 71,058
Charge-offs (24,479) (51,704) (76,183)
Balances as of April 30, 2014 7,530 45,048 52,578
Provision 27,065 44,002 71,067
Charge-offs (27,242) (41,876) (69,118)
Balances as of April 30, 2015 7,353 47,174 54,527
Provision 24,939 48,743 73,682
Charge-offs (23,285) (47,913) (71,198)
Balances as of April 30, 2016 $ 9,007 $ 48,004 $ 57,011