HR Block 2016 Annual Report Download - page 68

60 2016 Form 10-K | H&R Block, Inc.
Substantially all of the operations of our subsidiaries are conducted in leased premises. Most of the operating
leases are for periods ranging from three years to five years, with renewal options, and provide for fixed monthly
rentals. Future minimum operating lease commitments as of April 30, 2016, are as follows:
(in 000s)
2017 $ 213,523
2018 165,281
2019 124,750
2020 81,190
2021 32,191
2022 and beyond 63,881
$ 680,816
Rent expense of continuing operations for fiscal years 2016, 2015 and 2014 totaled $228.5 million, $213.1 million
and $203.3 million, respectively.
See notes 15 and 16 to the consolidated financial statements for additional discussion regarding guarantees and
indemnifications.
NOTE 15: LITIGATION AND RELATED CONTINGENCIES
We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise,
including as described below. The matters described below are not all of the lawsuits to which we are subject. In some
of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit
considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not
to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient
to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in
amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the
monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value
due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims
over an extended period of time.
The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be
difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary
evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the
law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves
view the relevant evidence and applicable law.
In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business
activities, including as described below.
We accrue liabilities for litigation, claims, and other loss contingencies and any related settlements (each referred
to, individually, as a "matter" and, collectively, as "matters") when it is probable that a loss has been incurred and the
amount of the loss can be reasonably estimated. Liabilities have been accrued for a number of the matters noted
below. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any
other amount within that range, then that amount is accrued. If no amount within the range can be identified as a
better estimate than any other amount, we accrue the minimum amount in the range.
For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be
reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or
make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of April 30, 2016.
While the potential future liabilities could be material in the particular quarterly or annual periods in which they are
recorded, based on information currently known, we do not believe any such liabilities are likely to have a material
adverse effect on our consolidated financial position, results of operations and cash flows. As of April 30, 2016 and
2015, we accrued liabilities of $2.3 million and $8.9 million, respectively, for matters addressed in this note.