HR Block 2007 Annual Report Download - page 8

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6
retention rates for tax clients who fund investment
accounts.One of every five current clients of
H&RBlock Financial Advisors has a relationship with
an H&RBlock tax professional.Our PreferredPartner
Program, linking tax professionals to financial advisors,
drives this client acquisition model.
BUSINESS SERVICES FOCUSES ON CORE OFFERINGS
Revenue growth continued to be strong in 2007 in the
RSM McGladrey core service offerings –accounting,
tax, business consulting and wealth management.
This lifted total revenues from continuing operations
by 13 percent to a record $932 million.The increase
includes a full year of operation of American Express
Tax and Business Services (Amex TBS), acquired in
October 2005.We completed a plan during the year
to sell or wind down three small businesses in this
segment to sharpen our focus on core operations.
Pretax income from continuing operations declined
to $58 million from $71 million, reflecting 2007 off-
season expenses for Amex TBS not incurred during the
prior year, losses in a portion of the capital markets
business now being scaled back, and costs associated
with branding initiatives and acquisition efforts.
We progressed significantly on our branding strategy
for RSM McGladrey, including development of a new
brand mark and advertising.To stimulate revenue
growth through brand awareness, we are sponsoring
The focus and market leadership we have in our core tax and
accounting businesses position us well for creating long-term
value. H&R Block has the right businesses and strategies in place
for the future, along with competitive advantages that enable us
to extend our lead.”
“
Bank.Pretax income from continuing operations was
nearly $20 million compared with a $33 million loss a
year earlier.H&RBlock Bank and H&RBlock Financial
Advisors each contributed about equally to the year’s
profit improvement.
H&RBlock Financial Advisors turned profitable
during the year’s second half and exceeded its annual
goals by focusing on advisor productivity, annuitized
products and programs to control costs and improve
efficiencies.Advisor productivity was up 11 percent,
reflecting in part the recruitment in recent years
of high-productivity advisors, and we exceeded our
targets in retaining these new associates.
H&RBlock Bank successfully launched not only the
Emerald Card, but also two new savings products
–the H&RBlock Easy IRASM and H&RBlock Easy
SavingsSM account –that have helped many of our
tax clients save for the first time for a better financial
future.The bank had $1.5 billion in assets at fiscal
year-end, including tax-client Emerald Card and
savings account balances and funds held for clients
of H&RBlock Financial Advisors.
Both businesses differentiate H&RBlock from the tax
services competition by providing our clients with
integrated financial services.Asecond connection
with clients can strengthen our relationship as their
financial partner, and we have significantly higher
SHARE REPURCHASES
DIVIDENDS PAID
2007
VALUE RETURNED TO SHAREHOLDERS
IN I I NS
72
9