HR Block 2006 Annual Report Download - page 71

INTRODUCTION AND FORWARD LOOKING STATEMENTS
Specified portions of our proxy statement, which will be filed in July markets in which we operate, and our assumptions and beliefs at that
2006, are listed as ‘‘incorporated by reference’’ in response to certain time. These statements speak only as of the date on which they are
items. Our proxy statement will be printed within our Annual Report made, are not guarantees of future performance, and involve certain
and mailed to shareholders in July 2006 and will also be available on our risks, uncertainties and assumptions, which are difficult to predict.
website at www.hrblock.com.Therefore, actual outcomes and results could materially differ from
In this report, and from time to time throughout the year, we share what is expressed, implied or forecast in these forward-looking
our expectations for the Company’s future performance. These forward- statements. Words such as ‘‘believe,’’ ‘‘will,’’ ‘‘plan,’’ ‘‘expect,’’ ‘‘intend,’’
looking statements are based upon current information, expectations, ‘‘estimate,’’ ‘‘approximate,’’ and similar expressions may identify such
estimates and projections regarding the Company, the industries and forward-looking statements.
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS –
H&R Block is a diversified company with subsidiaries providing tax, interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and
investment, mortgage and business services and products. Our Tax its subsidiaries, as appropriate to the context.
Services segment provides income tax return preparation and other RECENT DEVELOPMENTS –In March 2006, the Office of Thrift
services and products related to tax return preparation to the general Supervision (OTS) approved the charter of the H&R Block Bank. The
public in the United States, and in Canada, Australia and the United bank will commence operations on May 1, 2006. In fiscal year 2007, we
Kingdom. We also offer investment services and securities products will realign certain segments of our business to reflect a new
through H&R Block Financial Advisors, Inc. (HRBFA). Our Mortgage management reporting structure.
Services segment offers a full range of home mortgage services through On February 22, 2006, the Company’s management and the Audit
Option One Mortgage Corporation (Option One) and H&R Block Committee of the Board of Directors concluded to restate previously
Mortgage Corporation (HRBMC). RSM McGladrey Business Services, issued consolidated financial statements for the fiscal quarters ended
Inc. (RSM) is a national accounting, tax and business consulting firm October 31, 2005 and July 31, 2005, and the fiscal years ended April 30,
primarily serving mid-sized businesses. 2005 and 2004 and the related fiscal quarters. The Company arrived at
this conclusion during the course of its closing process for the quarter
H&R BLOCK’S MISSION –ended January 31, 2006. The restatement pertained primarily to errors in
‘‘To help our clients achieve their financial objectives determining the Company’s state effective income tax rate, including
by serving as their tax and financial partner.’’ errors in identifying changes in state apportionment, expiring state net
operating losses and related factors, for the fiscal years ended April 30,
We serve our clients’ financial needs through the consistent high
2005 and 2004, and the related fiscal quarters.
quality delivery of a variety of tax and financial services. Operating
On June 8, 2005, our Board of Directors declared a two-for-one stock
through multiple lines of business allows us to better meet the changing
split of the Company’s Common Stock in the form of a 100% stock
financial needs of our clients.
distribution, effective August 22, 2005, to shareholders of record as of
H&R Block, Inc. was organized as a corporation in 1955 under the
the close of business on August 1, 2005. All share and per share amounts
laws of the State of Missouri, and is a holding company with operating
in this document have been adjusted to reflect the retroactive effect of
subsidiaries providing financial services and products to the general
the stock split.
public. ‘‘H&R Block,’’ ‘‘the Company,’’ ‘‘we,’’ ‘‘our’’ and ‘‘us’’ are used
H&R BLOCK 2006 Form 10K
1