HR Block 2015 Annual Report Download - page 41

34 2015 Form 10-K | H&R Block, Inc.
FINANCIAL CONDITION
These comments should be read in conjunction with the consolidated balance sheets and consolidated statements
of cash flows included in Item 8.
CAPITAL RESOURCES AND LIQUIDITY –
OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in working
capital) and issuances of debt. We use our sources of liquidity primarily to fund working capital, service and repay
debt, pay dividends, repurchase shares of our common stock, and acquire businesses.
Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the
period from January through April. Therefore, we require the use of cash to fund losses from May through December,
and typically rely on available cash balances from the prior tax season and short-term borrowings to meet our off-
season liquidity needs.
Given the likely availability of a number of liquidity options discussed herein, including borrowing capacity under
the 2012 CLOC and the issuance of commercial paper, we believe that, in the absence of any unexpected developments,
our existing sources of capital as of April 30, 2015 are sufficient to meet our operating and financing needs.
DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements
of cash flows for fiscal years 2015, 2014 and 2013. See Item 8 for the complete consolidated statements of cash flows
for these periods.
(in 000s)
Year ended April 30, 2015 2014 2013
Net cash provided by (used in):
Operating activities $ 626,608 $ 809,581 $ 497,108
Investing activities (148,932) 10,690 (110,937)
Financing activities (645,807) (364,930) (584,541)
Effects of exchange rate changes on cash (9,986) (17,618) 1,620
Net change in cash and cash equivalents $ (178,117) $ 437,723 $ (196,750)
Cash from Operating Activities. Cash provided by operations, which consists primarily of cash received from
customers, declined $183.0 million from fiscal year 2014. The decrease from the prior year was primarily due to an
increase in income tax payments of $80.9 million and a $50.0 million settlement payment related to representations
and warranties.
Cash from Investing Activities. Cash used in investing activities totaled $148.9 million compared to cash provided
of $10.7 million in the prior year primarily due to proceeds received in fiscal year 2014 totaling $64.9 million from full
repayment of principal and accrued interest outstanding on notes receivable in connection with the sale of RSM
McGladrey, an increase in purchases of available-for-sale (AFS) securities of $45.4 million, and an increase in payments
for business acquisitions of $44.8 million.
Cash from Financing Activities. Cash used in financing activities increased $280.9 million primarily due to the
repayment of $400.0 million in 5.125% Senior Notes which matured in October 2014. This was partially offset by a
reduction in cash used to fund customer deposit balances.
CASH REQUIREMENTS –
Dividends and Share Repurchase. Returning capital to shareholders in the form of dividends and the repurchase
of outstanding shares has historically been a significant component of our capital allocation plan.
We have consistently paid quarterly dividends. Dividends paid totaled $220.0 million, $219.0 million and $217.2
million in fiscal years 2015, 2014 and 2013, respectively. Although we have historically paid dividends and plan to
continue to do so, there can be no assurances that circumstances will not change in the future that could affect our
ability or decisions to pay dividends.