HR Block 2006 Annual Report Download - page 81

officers and employees, and the supervision of employees. The various brokerage operations and clearing activities. Securities firms are also
governmental authorities and industry self-regulatory organizations that subject to regulation by state securities administrators in states in
have supervisory and regulatory jurisdiction over us generally have which they conduct business.
broad enforcement powers to censure, fine, issue cease-and-desist As a registered broker-dealer, HRBFA is subject to the Net Capital
orders or suspend or expel a broker-dealer or any of its officers or Rule (Rule 15c3-1) promulgated by the SEC and adopted through
employees who violate applicable laws or regulations. incorporation by reference in NYSE Rule 325. The Rule, which specifies
The SEC is the federal agency responsible for the administration of minimum net capital requirements for registered brokers and dealers, is
the federal securities laws. The SEC has delegated much of the designed to measure the financial soundness and liquidity of a broker-
regulation of broker-dealers to self-regulatory organizations, principally dealer and requires at least a minimum portion of its assets be kept in
the NASD, Municipal Securities Rulemaking Board and the NYSE, which liquid form. Additional discussion of this requirement and HRBFA’s
has been designated as HRBFA’s primary regulator. These self- calculation of net capital is located in Item 7, under ‘‘Capital Resources
regulatory organizations adopt rules, subject to SEC approval, and Liquidity by Segment.’’
governing the industry and conduct periodic examinations of HRBFA’s See discussion in ‘‘Risk Factors’’ for additional information.
SERVICE MARKS, TRADEMARKS AND PATENTS –
We have made a practice of selling our services and products under trademarks, in the aggregate, to be of material importance to our
service marks and trademarks and of obtaining protection for these by business, particularly our business segments providing services and
all available means. Our service marks and trademarks are protected by products under the ‘‘H&R Block’’ brand.
registration in the U.S. and other countries where our services and We have no registered patents that are material to our business.
products are marketed. We consider these service marks and
EMPLOYEES –
We have approximately 16,000 regular full-time employees. The highest
number of persons we employed during the fiscal year ended April 30,
2006, including seasonal employees, was approximately 134,500.
AVAILABILITY OF REPORTS AND OTHER INFORMATION –
Our annual report on Form 10-K, quarterly reports on Form 10-Q, Governance Guidelines, (4) the H&R Block, Inc. Code of Business
current reports on Form 8-K, and all amendments to those reports filed Ethics and Conduct, (5) the H&R Block, Inc. Audit Committee Charter,
with or furnished to the SEC are available, free of charge, through our (6) the H&R Block, Inc. Governance and Nominating Committee
website at www.hrblock.com as soon as reasonably practicable after Charter, and (7) the H&R Block, Inc. Compensation Committee Charter.
such reports are electronically filed with or furnished to the SEC. If you would like a printed copy of any of these corporate governance
Copies of the following corporate governance documents are posted documents, please send your request to the Office of the Secretary,
on our website: (1) The Amended and Restated Articles of H&R Block, Inc., 4400 Main Street, Kansas City, Missouri 64111.
Incorporation of H&R Block, Inc., (2) The Amended and Restated Information contained on our website does not constitute any part of
Bylaws of H&R Block, Inc., (3) The H&R Block, Inc. Corporate this report.
ITEM 1A. RISK FACTORS
In this report, and from time to time throughout the year, we share our stock and acquire businesses. We are dependent on the use of our off-
expectations for the Company’s future performance. The following balance sheet arrangements to fund our daily non-prime originations
explains the critical risk factors impacting our business and reasons and the secondary market to securitize and sell mortgage loans and
actual results may differ from our expectations. This discussion does residual interests. See Item 7, under ‘‘Off-Balance Sheet Financing
not intend to be a comprehensive list and there may be other risks and Arrangements.’’ We are also dependent on commercial paper issuances
factors that may have an effect on our business. and/or bank lines to fund RAL participations and seasonal working
LIQUIDITY AND CAPITAL –We use capital primarily to fund working capital needs. A disruption in such markets could adversely affect our
capital requirements, pay dividends, repurchase shares of our common
H&R BLOCK 2006 Form 10K
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