HR Block 2010 Annual Report Download - page 82

Block Financial LLC (BFC) typically makes capital contributions to HRB Bank to help it meet its capital
requirements. BFC made capital contributions to HRB Bank of $235.0 million during fiscal year 2010, and
$245.0 million during fiscal year 2009.
NOTE 20: DISCONTINUED OPERATIONS
Discontinued operations for the year ended April 30, 2010, consist primarily of the continued wind-down of our
mortgage operations. Fiscal year 2009 and 2008 include the results of operations of H&R Block Financial Advisors,
Inc. (HRBFA) and its direct corporate parent, as well as our mortgage operations and three smaller lines of
business related to our Business Services segment.
The financial results of discontinued operations are as follows:
Year Ended April 30, 2010 2009 2008
(in 000s)
Net revenue $ 372 $129,863 $ (105,964)
Pretax loss from operations $(23,872) $ (37,015) $(1,120,216)
Gain (loss) on sale and estimated impairments 6,194 (10,626) (45,510)
Pretax loss (17,678) (47,641) (1,165,726)
Income tax benefit (7,974) (20,259) (411,132)
Net loss from discontinued operations $ (9,704) $ (27,382) $ (754,594)
NOTE 21: SEGMENT INFORMATION
Management has determined the reportable segments identified below according to types of services offered and
the manner in which operational decisions are made. Operating results of our reportable segments are all seasonal.
Effective May 1, 2009, we realigned certain segments of our business to reflect a new management reporting
structure. The operations of HRB Bank, which was previously reported as the Consumer Financial Services
segment, have now been reclassified, with activities that support our retail tax network included in the Tax
Services segment, and the net interest margin and gains and losses relating to our portfolio of mortgage loans held
for investment and related assets included in corporate. Presentation of prior period results reflects the new
segment reporting structure.
TAX SERVICES – Our Tax Services segment is primarily engaged in providing tax return preparation and related
services and products in the U.S. and its territories, Canada and Australia. Major revenue sources include fees
earned for tax preparation services performed at company-owned retail tax offices, royalties from franchise retail
tax offices, fees for tax-related services, sales of tax preparation and other software, online tax preparation fees,
participation in RALs, fees from activities related to H&R Block Prepaid Emerald MasterCard», and interest and
fees from Emerald Advance lines of credit. HRB Bank also offers traditional banking services including checking
and savings accounts, individual retirement accounts and certificates of deposit.
Our international operations contributed $190.9 million, $160.7 million and $170.2 million in revenues for fiscal
years 2010, 2009 and 2008, respectively, and $46.7 million, $31.6 million and $32.1 million of pretax income,
respectively.
BUSINESS SERVICES – This segment offers tax and consulting services, wealth management, and capital
markets services to middle-market companies in offices located throughout the U.S.
CORPORATE – This segment’s operations include interest income from U.S. passive investments, interest
expense on borrowings, net interest margin and gains or losses relating to mortgage loans held for
investment, real estate owned, residual interests in securitizations and other corporate expenses, principally
related to finance, legal and other support departments.
IDENTIFIABLE ASSETS – Identifiable assets are those assets, including goodwill and intangible assets,
associated with each reportable segment. The remaining assets are classified as Corporate assets, which
consist primarily of cash and marketable securities. The carrying value of assets held outside the U.S. totaled
$166.8 million, $126.8 million and $124.8 million at April 30, 2010, 2009 and 2008, respectively.
66 H&R BLOCK 2010 Form 10K