HR Block 2009 Annual Report Download - page 5

INTRODUCTION AND FORWARD-LOOKING STATEMENTS
Specified portions of our proxy statement, which will be filed in July 2009, are listed as “incorporated by reference”
in response to certain items. Our proxy statement will be made available to shareholders in July 2009, and will also
be available on our website at www.hrblock.com.
This report and other documents filed with the Securities and Exchange Commission (SEC) may contain
forward-looking statements. In addition, our senior management may make forward-looking statements orally to
analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not
relate strictly to historical or current facts. They often include words such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “seeks,” “estimates,” “will,” “would,” “should,” “could” or “may.” Forward-looking statements
provide management’s current expectations or predictions of future conditions, events or results. They may
include projections of revenues, income, earnings per share, capital expenditures, dividends, liquidity, capital
structure or other financial items, descriptions of management’s plans or objectives for future operations,
products or services, or descriptions of assumptions underlying any of the above. They are not guarantees of
future performance. By their nature, forward-looking statements are subject to risks and uncertainties. These
statements speak only as of the date they are made and management does not undertake to update them to reflect
changes or events occurring after that date except as required by federal securities laws.
PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
H&R Block, Inc. has subsidiaries that provide tax, retail banking, accounting and business consulting services and
products. Our Tax Services segment primarily consists of our income tax preparation businesses – retail, online
and software. These businesses serve the general public in the United States (U.S.), Canada and Australia.
Additionally, this segment includes commercial tax businesses, which provide tax preparation software to
certified public accountants (CPAs) and other tax preparers in the U.S. Our Business Services segment
consists of a national accounting, tax and business consulting firm primarily serving middle-market
companies under the RSM McGladrey, Inc. (RSM) brand. Our Consumer Financial Services segment is
engaged in retail banking through H&R Block Bank (HRB Bank).
H&R Block, Inc. was organized as a corporation in 1955 under the laws of the State of Missouri. “H&R Block,”
“the Company,” “we,” “our” and “us” are used interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and
its subsidiaries, as appropriate to the context. A complete list of our subsidiaries can be found in Exhibit 21.
DISCONTINUED OPERATIONS –Effective November 1, 2008, we sold H&R Block Financial Advisors, Inc.
(HRBFA) to Ameriprise Financial, Inc. (Ameriprise). We received cash proceeds, net of selling costs, of
$304.0 million and repayment of $46.6 million in intercompany liabilities. At April 30, 2009, HRBFA and its direct
corporate parent are presented as discontinued operations in the consolidated financial statements. All periods
presented have been reclassified to reflect our discontinued operations. See additional discussion in Item 8, note 19
to our consolidated financial statements.
Our discontinued operations also include the wind-down of our mortgage loan origination business and the sale
of our mortgage loan servicing business in the prior year. Also included in the prior years are the results of three
smaller lines of business previously reported in our Business Services segment.
ISSUANCE OF COMMON STOCK –In October 2008, we sold 8.3 million shares of our common stock, without par
value, at a price of $17.50 per share in a registered direct offering through subscription agreements with selected
institutional investors. We received net proceeds of $141.4 million, after deducting placement agent fees and other
offering expenses. The purpose of the equity offering was to ensure we maintained adequate equity levels, as a
condition of certain borrowings, during our off-season. Proceeds were used for general corporate purposes.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
See discussion below and in Item 8, note 20 to our consolidated financial statements.
DESCRIPTION OF BUSINESS
TAX SERVICES
GENERAL –Our Tax Services segment is primarily engaged in providing tax return preparation and related
services and products in the U.S. and its territories, Canada and Australia. Major revenue sources include fees
earned for tax preparation services performed at company-owned retail tax offices, royalties from franchise retail
tax offices, sales of tax-related services, sales of tax preparation and other software, online tax preparation fees,
H&R BLOCK 2009 Form 10K 1