HR Block 2007 Annual Report Download - page 114

Commitments to fund loans involve, to varying degrees, elements of market, such as the level of and fluctuations in interest rates, real estate
credit risk and interest rate risk in excess of the amount recognized in and other asset values, changes in the securitization market and
the financial statements. Credit risk is mitigated by our evaluation of the competition.
creditworthiness of potential borrowers on a case-by-case basis.
Risks to the stability of our mortgage operations include external
events impacting the asset-backed securities market and loan sale
NOTE 21: SEGMENT INFORMATION
HRB Bank commenced operations on May 1, 2006 as a wholly-owned BUSINESS SERVICES –This segment offers middle-market companies
subsidiary, at which time we realigned certain segments of our business accounting, tax and business consulting services, wealth management,
to reflect a new management reporting structure. The previously and capital markets services in offices located throughout the U.S.
reported Investment Services segment and HRB Bank have been Revenues of this segment are seasonal in nature.
combined in the Consumer Financial Services segment. CONSUMER FINANCIAL SERVICES –The Consumer Financial
During fiscal year 2007, we met the criteria requiring us to present the Services segment is primarily engaged in offering brokerage services,
related financial results of OOMC, HRBMC and other businesses as along with investment planning and related financial advice through
discontinued operations and the assets and liabilities of all of the HRBFAand full-service banking through HRB Bank. HRB Bank offers
businesses being sold as held-for-sale in the consolidated financial traditional banking services, including checking and savings accounts,
statements. All periods presented have been reclassified to reflect our home equity lines of credit, individual retirement accounts, certificates
discontinued operations. See additional discussion in note 20. of deposit and prepaid debit card accounts. HRB Bank also purchases
Management has determined the reportable segments identified loans from OOMC, HRBMC and other lenders to hold for investment
below according to types of services offered and the manner in which purposes.
operational decisions are made. We operate in the following reportable CORPORATE –Corporate support departments provide services to
segments: our operating segments, consisting of marketing, information
TAXSERVICES –This segment is primarily engaged in providing tax technology, facilities, human resources, executive, legal, finance,
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return preparation and related services and products in the U.S., Canada government relations and corporate communications. These support
and Australia. During fiscal year 2007, our operations in the United department costs are largely allocated to our operating segments. Our
Kingdom were closed. Segment revenues include fees earned for tax- captive insurance and franchise financing subsidiaries are also included
related services performed at company-owned tax offices, royalties below within Corporate. The pretax losses shown below result
from franchise offices, sales of tax preparation and other software, fees primarily from interest expense and overhead costs previously allocated
from online tax preparation, and payments related to RAL to our discontinued operations. The pretax loss from Corporate for
participations. This segment includes the Company’s tax preparation fiscal year 2005 includes a non-operating gain of $17.3 million, or $0.03
software — TaxCut from H&R Block, and other personal productivity per diluted share, resulting from legal recoveries.
software offered to the general public, and offers online do-it-yourself- IDENTIFIABLE ASSETS –Identifiable assets are those assets,
tax preparation, online tax advice to the general public through various including goodwill and intangible assets, associated with each
websites. Revenues of this segment are seasonal in nature. reportable segment. The remaining assets are classified as corporate
Our international operations contributed $131.8 million, assets, which consist primarily of cash, marketable securities and
$120.3 million and $102.2 million in revenues for fiscal years 2007, 2006 equipment, or assets of discontinued operations.
and 2005, respectively, and $20.1 million, $17.7 million and $10.8 million Information concerning the Company’s operations by reportable
of pretax income, respectively. segment is as follows.
H&R BLOCK 2007 Form 10K