HR Block 2010 Annual Report Download - page 8

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6 n H&R Block 2010 Annual Report
These are unprecedented times in the marketplace. Sustained,
high levels of U.S. unemployment have significantly impacted
our business and disproportionately impacted our core client
base. Fewer taxpayers are filing returns and the assisted tax
preparation market has declined modestly over the past two
years. Although we expect these headwinds to continue into
tax season 2011, H&R Block is well positioned to create oppor-
tunities out of these challenges and deliver improved returns to
our shareholders.
My optimism for the future of this business is the primary rea-
son I accepted the CEO role. H&R Block has a strong balance
sheet and consistently generates very significant free cash
flow. We have one of the highest brand awareness scores in
the world and our most important asset, our 100,000 highly
trained tax preparers, collectively reflect the highest quality
standards of expertise and professionalism.
Looking Ahead
Our top priorities for fiscal year 2011 are to reverse the early-
season client losses we experienced in each of the past two
years in our retail business, improve our value proposition in
both the retail and digital space, and to demonstrate profitable
growth. Our plans emphasize the continued development of
competitive products, continued client-centric service improve-
ments, and using a more direct marketing approach to increase
traffic and deliver a more compelling value proposition.
To profitably grow, we must create opportunities by leveraging
our strengths.
n Sharper marketing: We must leverage our strong brand with
more focused and more customer compelling marketing to
drive increased traffic in our retail offices.
n Improved retention: We need to continue to improve our
service levels to enhance the client experience and drive
higher retention rates.
n Settlement products: H&R Block will continue to have the
industry’s best-in-class financial settlement products this
year. These products, such as refund anticipation loans,
have been impacted by the disruption in the marketplace
over the past year, leading to reduced funding availability for
some of our competitors. This area may present significant
opportunities for us to recapture market share in the first-half
of the tax season because our access to settlement product
oriented consumers remains unparalleled in the industry.
n H&R Block’s tax preparers are second to none: New tax
preparer regulations are changing the landscape. We are
pleased that the IRS enacted new requirements and regula-
tion of most paid tax preparers. We believe this change is
good for both the industry and taxpayers as it will lead to
more accurate tax returns. While the benefits from this new
regulation will likely not come until fiscal 2012 when many of
I am pleased to be back as President & CEO of H&R Block! Many of
you may remember my role as Interim CEO back in 2007–2008.
During that time, we worked on selling our mortgage loan servic-
ing operation, selling our brokerage business, and restoring the
Company’s liquidity and balance sheet.
fellow shareholders:
n Message from the President and Chief Executive Officer