HR Block 2016 Annual Report Download - page 3

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William C. Cobb
President & CEO, H&R Block, Inc.
For over 62 years, H&R Block has been
a trusted advisor to millions of people
throughout the world. This year was no
exception, as we helped prepare over 23
million tax returns worldwide. We were
there to assist our clients with what, for
many, is their largest financial transaction
of the year. We helped them to under-
stand the complexities within the tax
system. In addition, for the more than
80% of our clients who receive a refund,
we helped them to obtain the maximum
refund to which they were entitled. And
through it all, we remained focused on
our Purpose: We look at your life through
tax…and find ways to help.
DIVESTITURE OF THE H&R
BLOCK BANK AND CREATION
OF NEW CAPITAL STRUCTURE
During fiscal year 2016, we completed the
final step in our multi-year effort to return
to our core business of providing the best
tax preparation and related services to
our clients. We successfully completed the
H&R Block Bank divestiture transaction,
allowing us to no longer be regulated as
a savings and loan holding company. This
represented the culmination of a lot of
hard work over the past several years and
once again gave us more control over our
capital structure.
Following the completion of our bank
divestiture, we were able to put into place
a capital structure that demonstrated a
strong commitment to and confidence in
H&R Block’s future. The three key elements
of the new structure include:
• The Board of Directors approved a new
$3.5 billion share repurchase program
that runs through June 2019. We subse-
quently repurchased 56.4 million shares
through the end of fiscal year 2016,
representing over 20% of our outstand-
ing shares from the beginning of the
fiscal year.
• We issued $1 billion of long-term debt
and increased borrowing capacity under
our line of credit.
• We increased the quarterly dividend
10%. This increase represented a bit of
a catch-up for the years during which
we were prohibited from increasing our
dividend while we were regulated as a
savings and loan holding company. In
July 2016, we paid our 215th consecu-
tive dividend.
H&R Block is an efficient user of capital,
and these changes facilitated our ability
to continue this practice while increasing
our ability to return capital to you, our
shareholders. I’m pleased to say that since
I became CEO in May 2011, we have
returned a total of $3.9 billion of capital
to shareholders.
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