HR Block 2005 Annual Report Download - page 131

Acquisition, or (2) the expiration of the rights. The Rights under including the right to vote or to receive dividends. The issuance
the plan will expire on March 25, 2008, unless extended by the of the Rights alone has no dilutive effect and does not affect
Board of Directors. Until a Right is exercised, the holder thereof, reported earnings per share.
as such, will have no rights as a stockholder of the Company,
NOTE 15: INCOME TAXES
The components of income upon which domestic and foreign The following table reconciles the provision for income taxes
income taxes have been provided are as follows: at the federal statutory rate of 35% to income tax expense:
(in 000s) (dollars in 000s)
Restated Restated Restated Restated
Year Ended April 30, 2005 2004 2003 Year Ended April 30, 2005 2004 2003
Domestic $ 1,013,844 $ 1,150,450 $ 844,565 Statutory tax $ 356,200 $ 407,041 $ 299,447
Foreign 3,871 12,525 10,999 Increases in income taxes resulting
from:
$ 1,017,715 $ 1,162,975 $ 855,564 State income taxes, net of
Federal income tax benefit 25,552 26,652 24,093
Deferred income tax provisions (benefits) reflect the future tax
Impairment of non-deductible
consequences attributable to differences between the financial goodwill –– 42,788
statement carrying amounts of existing assets and liabilities and Other 106 13,674 11,621
their respective tax bases. The current and deferred components Total income tax expense $ 381,858 $ 447,367 $ 377,949
of taxes on income are as follows:
(in 000s) Effective tax rate 37.5% 38.5% 44.2%
Restated Restated
Year Ended April 30, 2005 2004 2003 The components of deferred taxes are as follows:
(in 000s)
Current:
Federal $ 384,735 $ 389,557 $ 361,676 Restated
State 37,192 54,169 40,964 April 30, 2005 2004
Foreign 2,276 4,627 5,253 Gross deferred tax assets:
424,203 448,353 407,893 Accrued expenses $ 53,006 $ 55,643
Allowance for credit losses and related reserves 35,116 23,099
Deferred:
Net operating losses 3,524 270
Federal (39,770) (895) (27,610)
State (1,666) (87) (1,646) Current 91,646 79,012
Foreign (909) (4) (688) Residual interest income 131,580 114,743
(42,345) (986) (29,944) Deferred and stock-based compensation 61,111 34,724
Property and equipment 31,379 6,107
Total provision for income taxes
Net operating losses 20,018 23,661
before change in accounting
principle 381,858 447,367 377,949 Noncurrent 244,088 179,235
Income tax on cumulative effect of
change in accounting principle –(4,031) – 335,734 258,247
Income tax included in Valuation allowance (20,018) (23,661)
comprehensive income (3,991) (3,387) (1,387)
315,716 234,586
Total income taxes $ 377,867 $ 439,949 $ 376,562
Gross deferred tax liabilities:
Prepaid expenses and revenue deferred for tax (13,454) (15,040)
Current (13,454) (15,040)
Mortgage servicing rights (61,190) (38,005)
Intangible assets (100,923) (87,728)
Noncurrent (162,113) (125,733)
Net deferred tax assets $ 140,149 $ 93,813
H&R BLOCK 2005 Form 10K
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