XML 115 R21.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Stock-Based Compensation | 12 Months Ended
--- | ---
Apr. 30, 2014
Share-based Compensation [Abstract] |
Stock-Based Compensation | We have a stock-based Long Term Incentive Plan (Plan), under which we can grant stock options, restricted shares, performance-based share units, restricted share units, deferred stock units and other forms of equity to employees, non-employee directors and consultants. Stock-based compensation expense of our continuing operations totaled $20.1 million, $15.3 million and $14.2 million in fiscal years 2014, 2013 and 2012, respectively, net of related tax benefits of $7.6 million, $5.8 million and $5.4 million, respectively. We realized tax benefits of $10.6 million, $5.0 million and $4.4 million in fiscal years 2014, 2013 and 2012, respectively. As of April 30, 2014, we had 10.5 million shares reserved for future awards under our Plan. We issue shares from our treasury stock to satisfy the exercise or vesting of stock-based awards and believe we have adequate treasury stock balances available for future issuances. We measure the fair value of options on the grant date or modification date using the Black-Scholes-Merton (Black-Scholes) option valuation model based upon the expected term of the options. We measure the fair value of nonvested shares and share units based on the closing price of our common stock on the grant date. We measure the fair value of performance-based share units based on the Monte Carlo valuation model, taking into account as necessary those provisions of the performance-based nonvested share units that are characterized as market conditions. We generally expense the grant-date fair value, net of estimated forfeitures, over the vesting period on a straight-line basis. Options, nonvested shares and nonvested share units (other than performance-based nonvested share units) granted to employees typically vest pro-rata based upon service over a three-year or four-year period with a portion vesting each year. Performance-based nonvested share units granted to employees typically cliff vest at the end of a three-year period based upon satisfaction of both service-based and performance-based requirements. The number of performance-based share units that ultimately vest ranges from zero to 250 percent of the number granted, based on the form of award, performance metrics such as earnings before interest, taxes, depreciation and amortization (EBITDA), revenues or pretax earnings and various market conditions such as our total shareholder return (TSR) ranked against other public companies or our stock price. Deferred stock units granted to non-employee directors vest when they are granted and are settled six months after the director separates from service as a director of the Company, except in the case of death. All share units granted to employees and non-employee directors receive cumulative dividend equivalents at the time of distribution. Options granted under our Plan have a maximum contractual term of ten years. STOCK OPTIONS – A summary of options for the fiscal year ended April 30, 2014, is as follows:
(dollars in 000s, except per share amounts) |
|  | Shares |  |  | Weighted-Average Exercise Price |  |  | Weighted-Average Remaining Contractual Term |  | Aggregate Intrinsic Value |
Outstanding, beginning of the year |  | 4,504 |  |  | $ | 17.53 |  |  |  |  |
Granted |  | 35 |  |  | 28.26 |  |  |  |  |
Exercised |  | (1,179 | ) |  | 18.15 |  |  |  |  |
Forfeited or expired |  | (237 | ) |  | 18.56 |  |  |  |  |
Outstanding, end of the year |  | 3,123 |  |  | $ | 17.34 |  |  | 6 years |  | $ | 34,655 |
Exercisable, end of the year |  | 2,317 |  |  | $ | 17.50 |  |  | 6 years |  | $ | 25,344 |
Exercisable and expected to vest |  | 3,076 |  |  | 17.33 |  |  | 6 years |  | 34,150 |
The total intrinsic value of options exercised during fiscal years 2014, 2013 and 2012 was $13.6 million, $6.0 million and $1.0 million, respectively. As of April 30, 2014, we had $1.0 million of total unrecognized compensation cost related to outstanding options. The cost is expected to be recognized over a weighted-average period of one year. When valuing our options on the grant date, we typically estimate the expected volatility using our historical stock price data. We also use historical exercise and forfeiture behaviors to estimate the options expected term and our forfeiture rate. The dividend yield is calculated based on the current dividend and the market price of our common stock on the grant date. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve in effect on the grant date. Both expected volatility and the risk-free interest rate are based on a period that approximates the expected term. The following assumptions were used to value options during the periods:
Year ended April 30, |  | 2014 |  |  | 2013 |  |  | 2012 |
Options - management and director: |  |  |  |  |  |
Expected volatility |  | 30.89% - 31.57% |  |  | 29.69% - 31.43% |  |  | 31.75% - 32.34% |
Expected term |  | 4 years |  |  | 4 - 5 years |  |  | 5 years |
Dividend yield |  | 2.77% - 2.87% |  |  | 4.18% - 5.21% |  |  | 3.43% - 4.80% |
Risk-free interest rate |  | 1.06% - 1.31% |  |  | 0.61% - 0.75% |  |  | 0.79% - 1.95% |
Weighted-average fair value |  | $ | 5.57 |  |  | $ | 2.79 |  |  | $ | 3.31 |
OTHER AWARDS – A summary of nonvested shares, nonvested share units and deferred stock units, including those that are performance-based, for the year ended April 30, 2014, is as follows:
(shares in 000s) |
|  | Nonvested Shares and Nonvested Share Units |  | Performance-Based Nonvested Share Units
|  | Shares |  | Weighted-Average Grant Date Fair Value |  |  | Shares |  | Weighted-Average Grant Date Fair Value |
Outstanding, beginning of the year |  | 1,806 |  |  | $ | 14.64 |  |  | 658 |  |  | $ | 16.89 |
Granted |  | 488 |  |  | 27.69 |  |  | 390 |  |  | 28.59 |
Released |  | (578 | ) |  | 14.89 |  |  | — |  |  | — |
Forfeited |  | (149 | ) |  | 17.74 |  |  | (82 | ) |  | 21.82 |
Outstanding, end of the year |  | 1,567 |  |  | $ | 18.23 |  |  | 966 |  |  | $ | 20.98 |
The total fair value of shares and units vesting during fiscal years 2014, 2013 and 2012 was $8.6 million, $7.2 million and $11.9 million, respectively. As of April 30, 2014, we had $23.5 million of total unrecognized compensation cost related to these shares. This cost is expected to be recognized over a weighted-average period of two years. When valuing our performance-based nonvested share units on the grant date, we typically estimate the expected volatility using historical volatility for H&R Block, Inc. and selected comparable companies. The dividend yield is calculated based on the current dividend and the market price of our common stock on the grant date. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve in effect on the grant date. Both expected volatility and the risk-free interest rate are based on a period that approximates the expected term. The following assumptions were used to value performance-based nonvested share units using the Monte Carlo valuation model during the periods:
Year ended April 30, |  | 2014 |  |  | 2013 |  |  | 2012 |
Expected volatility |  | 11.75% – 70.17% |  |  | 12.61% – 71.96% |  |  | 20.68% – 143.12% |
Expected term |  | 3 years |  |  | 3 years |  |  | 3 years |
Dividend yield (1) |  | 0% – 2.88% |  |  | 0% – 5.01% |  |  | — | %
Risk-free interest rate |  | 0.61 | % |  | 0.40 | % |  | 0.75 | %
Weighted-average fair value |  | $ | 28.59 |  |  | $ | 16.72 |  |  | $ | 17.46 |
(1) | The valuation model assumes that dividends are reinvested by the Company on a continuous basis.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_ShareBasedCompensationAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration