HR Block 2006 Annual Report Download - page 131

the registered holder of each Right may purchase from the Company one exchange ratio of one share of Common Stock per Right (the
four-hundredth of a share of a class of our Participating Preferred Stock, ‘‘Exchange’’). Upon any such Exchange, the right of any holder to
without par value, at a price of $53.75, subject to adjustment. The exercise a Right terminates. Upon the occurrence of any of the events
registered holder of each Right then also has the right (the ‘‘Subscription giving rise to the exercisability of the Subscription Right or the Merger
Right’’) to purchase for the exercise price of the Right, in lieu of shares of Right or the ability of the Board of Directors to effect the Exchange, the
Participating Preferred Stock, a number of shares of our Common Stock Rights held by the acquiring person or group under the new plan will
having a market value equal to twice the exercise price of the Right. become void as they relate to the Subscription Right, the Merger Right
Following an Unapproved Stock Acquisition, if we are involved in a or the Exchange.
merger, or 50% or more of our assets or earning power are sold, the We may redeem the Rights at a price of $0.0003125 per Right at any
registered holder of each Right has the right (the ‘‘Merger Right’’) to time prior to the earlier of (1) an Unapproved Stock Acquisition, or
purchase for the exercise price of the Right a number of shares of the (2) the expiration of the rights. The Rights under the plan will expire on
common stock of the surviving or purchasing company having a market March 25, 2008, unless extended by the Board of Directors. Until a Right
value equal to twice the exercise price of the Right. is exercised, the holder thereof, as such, will have no rights as a
After an Unapproved Stock Acquisition, but before any person or stockholder of the Company, including the right to vote or to receive
group of persons acquires 50% or more of the outstanding shares of our dividends. The issuance of the Rights alone has no dilutive effect and
Common Stock, the Board of Directors may exchange all or part of the does not affect reported earnings per share.
then outstanding and exercisable Rights for Common Stock at an
NOTE 14: INCOME TAXES
The components of income upon which domestic and foreign income respective tax bases. The current and deferred components of taxes on
taxes have been provided are as follows: income are as follows:
(in 000s)
(in 000s) Year Ended April 30, 2006 2005 2004
Year Ended April 30, 2006 2005 2004 Current:
Domestic $ 808,992 $ 1,013,844 $ 1,150,450 Federal $ 320,244 $ 379,907 $ 382,865
Foreign 18,401 3,871 12,525 State 53,783 53,452 77,112
$ 827,393 $ 1,017,715 $ 1,162,975 Foreign 6,367 469 4,627
380,394 433,828 464,604
Deferred income tax provisions (benefits) reflect the future tax
Deferred:
consequences attributable to differences between the financial
Federal (36,545) (37,681) (1,880)
statement carrying amounts of existing assets and liabilities and their
State (6,137) (1,433) (197)
Foreign (727) (909) (4)
(43,409) (40,023) (2,081)
Total provision for income taxes
before change in accounting
principle 336,985 393,805 462,523
Income tax on cumulative effect of
change in accounting principle –– (4,031)
Income tax included in
comprehensive income (27,261) (3,991) (3,387)
Income tax included in stockholders’
equity for compensation expense
for tax purposes in excess of
amounts recognized for financial
reporting purposes (9,529) (10,918) (24,730)
Total income taxes $ 300,195 $ 378,896 $ 430,375
H&R BLOCK 2006 Form 10K
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