HR Block 2014 Annual Report Download

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2014 Annual Report

Table of contents

  • Page 1
    2014 Annual Report

  • Page 2
    ... million Emerald Prepaid MasterCards® with $9.2 billion in total deposits Tax return preparation services are provided in approximately 12,000 company-owned and franchise retail tax offices worldwide by professional tax preparers, and through H&R Block Tax Software products. H&R Block also offers...

  • Page 3
    ... tax services provider. IN FISCAL 2014: William C. Cobb President & Chief Executive Officer â- We enhanced our service levels while improving return mix, and increased attach rates on our best-in-class financial services products; â- We successfully launched the first year of our digital...

  • Page 4
    ...in-Category" awards as the best everyday use card with the most features and lowest cost structure. And finally, we made progress this year in our Health Care initiatives, demonstrating our expertise by providing a tax and health care review for our clients on the upcoming changes resulting from the...

  • Page 5
    2014 form 10-k

  • Page 6

  • Page 7
    ...Identification No.) One H&R Block Way, Kansas City, Missouri 64105 (Address of principal executive offices, including zip code) (816) 854-3000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange...

  • Page 8
    ... WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...

  • Page 9
    ...DIY) tax solutions and other services and products related to income tax return preparation to the general public primarily in the United States (U.S.) and its territories, Canada and Australia. This segment also offers retail banking services in the U.S. through H&R Block Bank (HRB Bank), a federal...

  • Page 10
    ...the right to use our trademark and software, access to product offerings and expertise, signs, specialized forms, advertising and initial training and supervisory services. Our franchisees pay us approximately 30% of gross tax return preparation and related service revenues as a franchise royalty in...

  • Page 11
    ... tax services, we also offer clients a number of additional services, including refund anticipation checks that include a fee deduction feature (RACs), H&R Block Emerald Advance® lines of credit (EAs), H&R Block Prepaid Emerald MasterCard®, our Peace of Mind® (POM) program, and, for our Canadian...

  • Page 12
    ... various forms of digital electronic assistance, including online, mobile and desktop software. Many other companies offer digital and online tax preparation services, including Intuit, Inc., our largest competitor offering such services. Like all tax return preparation services and products, price...

  • Page 13
    ...Frank Act) was signed into law on July 21, 2010. This federal statute made extensive changes to the laws regulating federal savings banks, their holding companies and other financial services companies. The Dodd-Frank Act requires various federal agencies to adopt many new rules and regulations. The...

  • Page 14
    ... 2013, the federal banking agencies issued final rules to implement changes required by the Dodd-Frank Act and to conform to the Basel III regulatory capital framework (the Basel III Capital Rules). The Basel III Capital Rules implement the Basel Committee's December 2010 framework known 6 2014 Form...

  • Page 15
    ... number of categories, depending on the nature of the assets, generally ranging from 0% for U.S. government and agency securities to 600% for certain equity exposures, and resulting in higher risk weights for a variety of asset categories. The prompt corrective action rules that apply to HRB Bank...

  • Page 16
    ... to federal laws designed to protect borrowers and promote lending, including the Equal Credit Opportunity Act, the Truth-in-Lending Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, and the Community Reinvestment Act (CR Act). In addition, federal banking regulations...

  • Page 17
    ... terms generally ranging from one to 20 years. EMPLOYEES AND EXECUTIVE OFFICERS We had approximately 2,200 regular full-time employees as of April 30, 2014. Our business is dependent on the availability of a seasonal workforce, including tax professionals, and our ability to hire, train, and...

  • Page 18
    ... provide refund transfers and other similar services and products. Commercial tax return preparers are highly competitive with regard to price and service. In the DIY category of the tax preparation industry, options include the use of traditional paper forms and various forms of digital electronic...

  • Page 19
    ... returns in fiscal years 2014, 2013 and 2012, respectively, at no charge through the FFA. We also have other free online tax preparation offerings and provided free Federal 1040EZ filings online and in retail offices in fiscal years 2013 and 2012, and free RACs to certain clients in fiscal year 2012...

  • Page 20
    ... DIY tax services and banking services provided by HRB Bank. Due to the nature of these services and products, we collect, transmit and store high volumes of personal and confidential client information through the use of multiple digital technologies across the Company. Information security risks...

  • Page 21
    ... refunds or otherwise reduce the need for a third-party tax return preparer could reduce demand for our services and products and could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows. H&R Block, Inc. | 2014 Form 10...

  • Page 22
    ..., 2014, we entered into the P&A Agreement with BofI. Simultaneously with a related closing, HRB Bank will convert into a national banking association, merge with and into Block Financial, surrender its bank charter, and cease to operate as a separate legal entity. At that time, our Holding Companies...

  • Page 23
    ...changes in government regulations or processes that affect how we provide such offerings to our clients, or significant problems with such offerings or the manner in which we provide them to our clients may harm our revenue, results of operations and reputation. Tax laws and tax forms are subject to...

  • Page 24
    ... to tax laws and tax forms can result in condensed development cycles for our tax service and product offerings because our clients expect high levels of accuracy and a timely launch of such offerings to prepare and file their taxes by the tax filing deadline and, in turn, receive any tax refund...

  • Page 25
    ... have been sued, in connection with the offering of different types of refund transfer products. In one court's issued ruling, which is not subject to appellate review, the court held that a competitor's specific version of a refund transfer product should be considered a loan, and subject to truth...

  • Page 26
    ...and future services and products and is an important element in attracting new clients. In addition, our franchisees may operate their businesses under our brands. Adverse publicity (whether or not justified) relating to events or activities attributed to us, our franchisees, employees or agents may...

  • Page 27
    ... the sale of the loans or RMBS, although there is limited and conflicting case law on this issue. During fiscal years 2014 and 2013, SCC entered into agreements with certain counterparties to toll the running of any applicable statute of limitations related to potential H&R Block, Inc. | 2014 Form...

  • Page 28
    ... financial position, results of operations and cash flows, as SCC's financial condition, operating results and cash flows are included in our consolidated financial statements. See Item 8, note 17 to the consolidated financial statements for additional information. 20 2014 Form 10-K | H&R Block...

  • Page 29
    ... is located in Kansas City, Missouri, which is also where HRB Bank is headquartered and operates its single branch location. Our Canadian executive offices are located in a leased office in Calgary, Alberta. Our Australian executive offices are located in a leased office in Thornleigh, New South...

  • Page 30
    ... the consolidated financial statements. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS - The information called for by this item appearing in our definitive proxy statement under the heading "Equity Compensation Plans," to be filed no later than 120 days after April 30, 2014, is...

  • Page 31
    ... tax professionals (in company-owned or franchise offices or virtually via the internet) or prepared and filed by our clients through H&R Block tax software, either online or using our software or mobile applications. RECENT DEVELOPMENTS In April 2014, our subsidiaries, HRB Bank and Block Financial...

  • Page 32
    ... were just over $3.0 billion, up 4.1% from the prior year, driven by improved return mix and other pricing changes in retail locations, digital tax software product enhancements and increases in paid federal returns, and increased financial product revenues. Pretax earnings grew $65.1 million, or...

  • Page 33
    ... company-owned and franchise offices which were accepted by the client after April 30. The revenues related to these returns will be recognized in fiscal year 2015. Shared locations included offices located within Walmart and Sears stores in fiscal years 2013 and 2012. H&R Block, Inc. | 2014 Form...

  • Page 34
    Tax Services - Financial Results Year ended April 30, Tax preparation fees: U.S. International Royalties Fees from refund anticipation checks Fees from Emerald Card Fees from Peace of Mind® guarantees Interest and fee income on Emerald Advance Other Total revenues Compensation and benefits: Field ...

  • Page 35
    ... offset by a 1.7% decrease in returns prepared in franchise offices. Fees earned on RACs increased $25.8 million, or 19.5%, primarily due to our decision to discontinue a promotion for free RACs offered last year, partially offset by lower RAC volumes. Emerald Card fees decreased $5.2 million, or...

  • Page 36
    ... our previously reported Business Services segment and discontinued mortgage operations. FISCAL YEAR 2014 COMPARED TO FISCAL YEAR 2013 - The net loss from our discontinued operations totaled $24.9 million for the current year, compared to a net loss of $31.2 million in the prior year. Pretax losses...

  • Page 37
    ... year 2014 and $40 million in fiscal year 2013. If future losses are in excess of SCC's accrued liability, those losses could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows, as SCC's financial condition, operating results...

  • Page 38
    ...of Estimates Required. The income tax laws of jurisdictions in which we operate are complex and subject to different interpretations by the taxpayer and applicable government taxing authorities. Income tax returns filed by us are based on our interpretation of these rules. The amount of income taxes...

  • Page 39
    ...) and issuances of debt. We use capital 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...

  • Page 40
    ... notes receivable in connection with the sale of RSM McGladrey in fiscal year 2012. We had proceeds in fiscal year 2013 totaling $81.1 million from liquidation of certain company-owned life insurance policies. Cash from Financing Activities. Cash used in financing activities decreased $219.6 million...

  • Page 41
    ... the majority of these securities in connection with a closing of the P&A Transaction. Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S. operations. To mitigate foreign currency exchange rate risk, in fiscal years 2014 and 2012 we entered into...

  • Page 42
    ...income tax returns, the offering of RACs, loan originations and assistance in loan originations, mortgage lending, privacy, consumer protection, franchising, sales methods and banking. We determine the applicability of such statutes, ordinances, rules and regulations (collectively, Laws) and work to...

  • Page 43
    ... reported - from continuing operations Adjustments: Loss contingencies - litigation Impairment of goodwill and intangible assets Severance Professional fees related to HRB Bank transaction Impairment of AFS securities Gain on sale of residual interests in securitizations Gain on sales of tax offices...

  • Page 44
    Year ended April 30, 2013 Revenues As reported - from continuing operations Adjustments: Loss contingencies - litigation Impairment of goodwill and intangible assets Severance Professional fees related to HRB Bank transaction Loss on extinguishment of debt Gain on sales of tax offices/businesses ...

  • Page 45
    ... for our banking operations, as well as the related interest yields and rates for fiscal years 2014, 2013 and 2012: (dollars in 000s) Year ended April 30, Average Balance Interest-earning assets: Mortgage loans, net Federal funds sold Credit cards Emerald Advance AFS securities FHLB stock Cash and...

  • Page 46
    ... credit cards. Non-accruing loans have been excluded. INVESTMENT PORTFOLIO - The following table presents the cost basis and fair value of HRB Bank's investment portfolio as of April 30, 2014, 2013 and 2012: (in 000s) As of April 30, Mortgage-backed securities Federal funds sold FHLB stock $ $ 2014...

  • Page 47
    ... particular geographical location. The table below presents outstanding loans by state, for states with a concentration of 5% or greater, for our portfolio of mortgage loans held for investment as of April 30, 2014: (dollars in 000s) Loans Purchased from SCC Florida New York California Wisconsin All...

  • Page 48
    ... table shows HRB Bank's average deposit balances and the average rate paid on those deposits for fiscal years 2014, 2013 and 2012: (dollars in 000s) Year ended April 30, 2014 Average Balance Money market and savings Interest-bearing checking accounts IRAs Certificates of deposit Non-interest-bearing...

  • Page 49
    ... the timing of the prepayment, the write-offs of mortgage origination costs may result in lower than anticipated yields. CUSTOMER DEPOSITS AND FHLB ADVANCES - HRB Bank's liabilities consist primarily of transactional deposit relationships, such as H&R Block Prepaid Emerald MasterCard® accounts and...

  • Page 50
    .... Our system of internal control over financial reporting also includes formal policies and procedures, including a Code of Business Ethics and Conduct that reinforces our commitment to ethical business conduct and is designed to encourage our employees and directors to act with high standards of...

  • Page 51
    ... respects, the financial position of H&R Block, Inc. and subsidiaries as of April 30, 2014 and 2013, and the results of their operations and their cash flows for each of the three years in the period ended April 30, 2014, in conformity with accounting principles generally accepted in the United...

  • Page 52
    ... in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of...

  • Page 53
    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year ended April 30, REVENUES: Service revenues Royalty, product and other revenues Interest income OPERATING EXPENSES: Cost of revenues: Compensation and benefits Occupancy and equipment Provision for bad debt and loan losses Interest ...

  • Page 54
    ... BALANCE SHEETS As of April 30, ASSETS Cash and cash equivalents Cash and cash equivalents - restricted Receivables, less allowance for doubtful accounts of $52,578 and $50,399 Prepaid expenses and other current assets Investments in available-for-sale securities Total current assets Mortgage loans...

  • Page 55
    CONSOLIDATED STATEMENTS OF CASH FLOWS (in 000s) Year ended April 30, 2014 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 475,157 $ 433,948 $ 265,932 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 115,604 92,407 103,576 ...

  • Page 56
    ... 1, 2011 Net income Other comprehensive income Stock-based compensation 2014 Form 10-K | H&R Block, Inc. Stock-based awards exercised or vested Acquisition of treasury shares Repurchase and retirement of common shares Cash dividends declared - $0.70 per share Balances as of April 30, 2012...

  • Page 57
    ... of mortgage loans held for investment, H&R Block Emerald Advance® lines of Credit (EAs), loans made to franchisees, and amounts due under our refund discount program in Canada (Cash Back®). H&R Block Emerald Advance® lines of credit. EAs are typically offered to clients in our offices from late...

  • Page 58
    ... the loan, we revoke franchise rights, write off the remaining balance of the loan and refranchise the territory or begin operating it as company-owned. Cash Back® receivables. During the tax season, our Canadian operations advance refunds due to certain clients from the Canada Revenue Agency (CRA...

  • Page 59
    ... balance of the loan and the present value of expected future cash flows discounted at the loan's effective interest rate. However, if we later assess that foreclosure of a modified loan is probable, we record an impairment based on the estimated fair value (typically appraised value less costs...

  • Page 60
    ...- Service revenues consist primarily of fees for preparation and filing of tax returns, both in offices and through our online programs, fees associated with our Peace of Mind® (POM) guarantee program and interchange income associated with our H&R Block Prepaid Emerald MasterCard® program. Service...

  • Page 61
    ... of fiscal year 2014 of $12.4 million. In connection with the additional agreements being entered into upon the closing of the P&A Transaction, BofI will offer H&R Block-branded financial products distributed by the Company to the Company's clients. An operating H&R Block, Inc. | 2014 Form 10-K 53

  • Page 62
    ...of HRB Bank from a federal savings bank to a national bank; (2) the sale of certain HRB Bank assets and liabilities, including all deposit liabilities, to BofI in the P&A Transaction; and (3) the merger of HRB Bank with and into Block Financial. The Company, H&R Block Group, Inc. and Block Financial...

  • Page 63
    ... lines of credit primarily for the purpose of funding off-season working capital needs. Loans made to franchisees as of April 30, 2013 consisted of $121.2 million in term loans and $47.3 million in revolving lines of credit. As of April 30, 2014, we had no loans more than 30 days past due, compared...

  • Page 64
    ... the receivable amount. Cash Back amounts are generally received within 60 days of filing the client's return. As of April 30, 2014 and 2013, $1.9 million and $1.8 million, respectively, of Cash Back balances were more than 60 days old. Allowance for Doubtful Accounts. Activity in the allowance for...

  • Page 65
    ... as of April 30, 2014 is as follows: (dollars in 000s) Outstanding Principal Balance Purchased from SCC All other $ $ 159,566 117,857 277,423 $ $ Loan Loss Allowance Amount 8,655 2,617 11,272 % of Principal 5.4% 2.2% 4.1% % 30+ Days Past Due 27.1% 7.5% 20.1% We review the credit quality of our...

  • Page 66
    ... Approximately 51% of our mortgage loan portfolio consists of loans to borrowers located in the states of Florida, California and New York. Detail of the aging of the mortgage loans in our portfolio as of April 30, 2014 is as follows: (in 000s) Less than 60 Days Past Due Purchased from SCC All other...

  • Page 67
    ...133,936 25,425 159,361 $ $ 211,867 33,940 245,807 2014 2013 2012 Interest income recognized on impaired and nonaccrual loans was immaterial for all periods presented. NOTE 6: INVESTMENTS The amortized cost and fair value of securities classified as AFS are summarized below: (in 000s) As of April 30...

  • Page 68
    ... Components of the intangible assets of our Tax Services segment are as follows: (in 000s) As of April 30, Gross Carrying Amount Reacquired franchise rights Customer relationships Internally-developed software Noncompete agreements Franchise agreements Purchased technology Trade name $ $ 233,749 123...

  • Page 69
    ... banking deposits as of April 30, 2014 and 2013 and the related interest expense recorded during the periods are as follows: (in 000s) April 30, 2014 Outstanding Balance Short-term: Money-market deposits Savings deposits Checking deposits: Interest-bearing Non-interest-bearing IRAs and other time...

  • Page 70
    ... certain agency and agency-sponsored mortgage-backed securities and municipal bonds. Quoted market prices are not available for these securities, as they are not actively traded and have fewer observable transactions. As a result, we use third-party pricing services to determine fair value and...

  • Page 71
    ... certified appraisers and reviewed internally by HRB Bank's asset management group. The inputs and assumptions used in our discounted cash flow model for TDRs are reviewed and approved by HRB Bank management each time the balances are remeasured. Significant changes in fair value from the previous...

  • Page 72
    ...-interest-bearing demand deposits, checking, money market and savings accounts, is equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits is estimated by discounting the future cash flows using the rates currently offered by HRB Bank for products with similar...

  • Page 73
    ...(in 000s) Shares Fiscal year: 2014 2013 2012 - 21,259 14,554 $ - 315,000 199,989 Cost During fiscal year 2013, we also retired 60.0 million shares of treasury stock. This retirement of treasury stock had no impact on our total consolidated stockholders' equity. H&R Block, Inc. | 2014 Form 10-K 65

  • Page 74
    ... units and other forms of equity to employees, non-employee directors and consultants. Stock-based compensation expense of our continuing operations totaled $20.1 million, $15.3 million and $14.2 million in fiscal years 2014, 2013 and 2012, respectively, net of related tax benefits of $7.6 million...

  • Page 75
    ... unrecognized compensation cost related to outstanding options. The cost is expected to be recognized over a weighted-average period of one year. When valuing our options on the grant date, we typically estimate the expected volatility using our historical stock price data. We also use historical...

  • Page 76
    ... compensation cost related to these shares. This cost is expected to be recognized over a weighted-average period of two years. When valuing our performance-based nonvested share units on the grant date, we typically estimate the expected volatility using historical volatility for H&R Block...

  • Page 77
    ... The reduction in the tax rate for fiscal year 2014 related to uncertain tax positions reflects changes to tax reserves related to settlements and new information regarding prior year tax positions. The net loss from discontinued operations for fiscal years 2014, 2013 and 2012 totaled $24.9 million...

  • Page 78
    ...million at April 30, 2013, which were fully realized during the fiscal year ended April 30, 2014. During 2014 we determined we would not implement a previously identified qualified tax-planning strategy for which we had expected to implement and realized a tax benefit in a prior period. Our decision...

  • Page 79
    ...year 2014. These settlements and the receipt of the related tax refunds resulted in a decline in prepaid expenses and other current assets, as we recorded a $151.3 million current asset for the anticipated refund as of April 30, 2013. Federal consolidated tax returns for calendar years 2011 and 2012...

  • Page 80
    ...8,249 98,094 $ $ 59,657 16,556 10,023 7,000 5,593 98,829 $ $ 59,660 20,322 10,234 4,463 5,121 99,800 2014 2013 2012 NOTE 16: COMMITMENTS AND CONTINGENCIES We offer guarantees under our POM program to tax clients whereby we (1) represent our clients if they are audited by the IRS, and (2) assume the...

  • Page 81
    ...2016 2017 2018 2019 2020 and beyond $ $ 183,701 119,377 70,447 33,047 11,892 5,166 423,630 Rent expense of continuing operations for fiscal years 2014, 2013 and 2012 totaled $203.3 million, $201.0 million and $218.3 million, respectively. See notes 17 and 18 to the consolidated financial statements...

  • Page 82
    ...claims and lawsuits allege discriminatory or unfair and deceptive loan origination and servicing practices, fraud and other common law torts, rights to indemnification and violations of securities laws, the Truth in Lending Act (TILA), Equal Credit Opportunity Act and the Fair Housing Act. Given the...

  • Page 83
    ... transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of the Federal Home Loan Bank of Chicago v. Bank of America H&R Block, Inc. | 2014 Form...

  • Page 84
    ... 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons...

  • Page 85
    ... lawsuits purport to represent certain clients nationwide who filed Form 8863 during tax season 2013 through an H&R Block office or using H&R Block At Home® online tax services or tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection...

  • Page 86
    ... April 2008, sold its servicing assets and discontinued its remaining operations. Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of RMBSs. In connection with the sale of loans and/or RMBSs, SCC made...

  • Page 87
    ... loss estimate as of April 30, 2014 is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and the factors mentioned below. These factors include the terms of prior bulk settlement...

  • Page 88
    ...by federal banking agencies. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on HRB Bank and our consolidated financial statements. All savings associations...

  • Page 89
    ... company-owned retail tax offices, royalties from franchise retail tax offices, sales of tax preparation software, fees for online tax preparation services, fees from RACs, fees related to H&R Block Prepaid Emerald MasterCard® and interest and fees from EAs. Our international operations contributed...

  • Page 90
    ... 31,393 2,893,771 2014 2013 2012 NOTE 21: QUARTERLY FINANCIAL DATA (UNAUDITED) (in 000s, except per share amounts) Fiscal Year 2014 Revenues Income (loss) from continuing operations before taxes (benefit) Income taxes (benefit) Net income (loss) from continuing operations Net loss from discontinued...

  • Page 91
    ... income tax return preparation and related services and products are earned during this period. As a result, we generally operate at a loss through a majority of the fiscal year. Revenues and earnings for the third and fourth quarters of fiscal year 2014 were impacted by an IRS filing delay, which...

  • Page 92
    ... on the consolidated financial statements as of April 30, 2013 or for the fiscal years ended April 30, 2013 and 2012. CONDENSED CONSOLIDATING INCOME STATEMENTS Year ended April 30, 2014 Total revenues Cost of revenues Selling, general and administrative Total expenses Operating income Other income...

  • Page 93
    Year ended April 30, 2013 Total revenues Cost of revenues Selling, general and administrative Total expenses Operating income (loss) Other income (expense), net (1) Income (loss) from continuing operations before taxes (benefit) Income taxes (benefit) (1) H&R Block, Inc. (Guarantor 433,948 433,948...

  • Page 94
    ... BALANCE SHEETS As of April 30, 2014 Cash & cash equivalents Cash & cash equivalents - restricted Receivables, net Prepaid expenses and other current assets Investments in available-for-sale securities Total current assets Mortgage loans held for investment, net Investments in available-for-sale...

  • Page 95
    ... current assets Mortgage loans held for investment, net Investments in available-for-sale securities Property and equipment, net Intangible assets, net Goodwill Investments in subsidiaries (1) Amounts due from affiliates Other assets Total assets Customer banking deposits Accounts payable, accrued...

  • Page 96
    ... STATEMENTS OF CASH FLOWS Year ended April 30, 2014 Net cash provided by operating activities: Cash flows from investing: Purchases of AFS securities Sales, maturities and payments received on AFS securities Mortgage loans held for investment, net Capital expenditures Payments for business...

  • Page 97
    ..., net Proceeds from sales of businesses, net Franchise loans funded Payments received on franchise loans Surrender of company-owned life insurance policies Intercompany payments/investments in subsidiaries (1) Other, net Net cash provided by (used in) investing activities Cash flows from financing...

  • Page 98
    ... that information required to be disclosed in the Company's reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission's rules and forms. Disclosure Controls...

  • Page 99
    ... on our website regarding amendments to, or waivers under, the Code of Business Ethics and Conduct. ITEM 11. EXECUTIVE COMPENSATION The information called for by this item is contained in our definitive proxy statement filed pursuant to Regulation 14A not later than 120 days after April 30, 2014, in...

  • Page 100
    ... is contained in Item 5 of this Form 10-K and in our definitive proxy statement filed pursuant to Regulation 14A not later than 120 days after April 30, 2014, in the sections entitled "Equity Compensation Plans" and "Information Regarding Security Holders," and is incorporated herein by reference...

  • Page 101
    ... behalf by the undersigned, thereunto duly authorized. H&R BLOCK, INC. /s/ William C. Cobb William C. Cobb President and Chief Executive Officer June 19, 2014 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 102
    ...18, 2000, among H&R Block, Inc., Block Financial Corporation, Bankers Trust Company and the Bank of New York, filed as Exhibit 4(a) to the Company's current report on Form 8-K filed April 17, 2000, file number 1-6089, is incorporated herein by reference. Officer's Certificate, dated October 26, 2004...

  • Page 103
    .... * Agreement between H&R Block Management, LLC, H&R Block, Inc. and William C. Cobb as of January 3, 2013 in connection with certain corrective actions relating to the June 30, 2011 Option Award, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed January 4, 2013, file number...

  • Page 104
    ... as Exhibit 10.1 to the Company's current report on Form 8-K filed August 20, 2012, file number 1-6089, is incorporated herein by reference. Advances, Pledge and Security Agreement dated April 17, 2006, between H&R Block Bank and the Federal Home Loan Bank of Des Moines, filed as Exhibit 10.11 to...

  • Page 105
    ...Taxonomy Extension Definition Linkbase Indicates management contracts, compensatory plans or arrangements. Confidential Information has been omitted from this exhibit and filed separately with the Commission pursuant to a confidential treatment request under Rule 24b-2. H&R Block, Inc. | 2014 Form...

  • Page 106
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  • Page 107
    ...the Chief Executive Officer and Chief Financial Officer of the company required by Section 302 of the Sarbanes-Oxley Act of 2002 have been filed as exhibits 31.1 and 31.2, respectively, in the company's Form 10-K for the fiscal year ended April 30, 2014. Certification Submitted to the New York Stock...

  • Page 108
    H&R BLOCK, INC. One H&R Block Way Kansas City, MO 64105 816.854.3000 www.hrblock.com