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54 2014 Form 10-K | H&R Block, Inc.
subsidiary of the Company will provide certain marketing, servicing and operational support to BofI with respect to
such financial products.
The P&A Transaction is part of a three-step transaction pursuant to which the Company plans to divest HRB Bank
(Divestiture Transaction), including: (1) the conversion of HRB Bank from a federal savings bank to a national bank;
(2) the sale of certain HRB Bank assets and liabilities, including all deposit liabilities, to BofI in the P&A Transaction;
and (3) the merger of HRB Bank with and into Block Financial.
The Company, H&R Block Group, Inc. and Block Financial (our Holding Companies) are savings and loan holding
companies (SLHCs) because they control HRB Bank. By consummating the Divestiture Transaction, our Holding
Companies will cease to be SLHCs and will no longer be subject to regulation by the Board of Governors of the Federal
Reserve System (Federal Reserve) as an SLHC or to the regulatory capital requirements applicable to SLHCs.
The obligations of the parties to complete the P&A Transaction are subject to the fulfillment of numerous conditions
including regulatory approval. We cannot be certain when or if the conditions to and other components of the P&A
Transaction will be satisfied, or whether the P&A Transaction will be completed. In addition, there may be changes
to the terms and conditions of the P&A Agreement and other contemplated agreements as part of the regulatory
approval process.
NOTE 3: EARNINGS PER SHARE
Basic and diluted earnings per share is computed using the two-class method. The two-class method is an earnings
allocation formula that determines net income per share for each class of common stock and participating security
according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed
by dividing net income from continuing operations attributable to common shareholders by the weighted average
shares outstanding during each period.
The computations of basic and diluted earnings per share from continuing operations are as follows:
(in 000s, except per share amounts)
Year ended April 30, 2014 2013 2012
Net income from continuing operations attributable to shareholders $ 500,097 $ 465,158 $ 345,968
Amounts allocated to participating securities (692) (542) (455)
Net income from continuing operations attributable to common shareholders $ 499,405 $ 464,616 $ 345,513
Basic weighted average common shares 273,830 273,057 297,863
Potential dilutive shares 2,197 1,302 738
Dilutive weighted average common shares 276,027 274,359 298,601
Earnings per share from continuing operations attributable to common
shareholders:
Basic $ 1.82 $ 1.70 $ 1.16
Diluted 1.81 1.69 1.16
Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain
restrictions or the exercise of options to purchase 0.1 million, 3.3 million and 8.9 million shares of stock for fiscal years
2014, 2013 and 2012, respectively, as the effect would be antidilutive.