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H&R Block, Inc. | 2016 Form 10-K 23
Consolidated – Financial Results (in 000s, except per share amounts)
Year ended April 30, 2016 2015 $ Change % Change
Tax preparation fees:
U.S. assisted $ 1,890,175 $ 1,865,438 $ 24,737 1.3 %
International 190,527 207,772 (17,245) (8.3)%
U.S. DIY 234,341 231,854 2,487 1.1 %
2,315,043 2,305,064 9,979 0.4 %
Royalties 266,418 292,743 (26,325) (9.0)%
Revenues from Refund Transfers 165,152 171,094 (5,942) (3.5)%
Revenues from Emerald Card® 92,608 103,300 (10,692) (10.4)%
Revenues from Peace of Mind® Extended Service Plan 86,830 81,551 5,279 6.5 %
Interest and fee income on Emerald Advance 57,268 57,202 66 0.1 %
Other 54,834 67,704 (12,870) (19.0)%
Total revenues 3,038,153 3,078,658 (40,505) (1.3)%
Compensation and benefits:
Field wages 724,019 731,309 (7,290) (1.0)%
Other wages 166,445 176,697 (10,252) (5.8)%
Benefits and other compensation 183,512 183,001 511 0.3 %
1,073,976 1,091,007 (17,031) (1.6)%
Occupancy and equipment 405,493 375,743 29,750 7.9 %
Marketing and advertising 297,762 273,682 24,080 8.8 %
Depreciation and amortization 173,598 159,804 13,794 8.6 %
Bad debt 75,395 74,993 402 0.5 %
Supplies 36,340 42,872 (6,532) (15.2)%
Other 342,397 265,891 76,506 28.8 %
Total operating expenses 2,404,961 2,283,992 120,969 5.3 %
Other income 17,701 1,314 16,387 **
Interest expense on borrowings (68,962) (45,246) (23,716) (52.4)%
Other expenses (12,452) (7,929) (4,523) (57.0)%
Pretax income 569,479 742,805 (173,326) (23.3)%
Income taxes 185,926 256,061 (70,135) (27.4)%
Net income from continuing operations 383,553 486,744 (103,191) (21.2)%
Net loss from discontinued operations (9,286) (13,081) 3,795 29.0 %
Net income $ 374,267 $ 473,663 $ (99,396) (21.0)%
Basic earnings (loss) per share:
Continuing operations $1.54$ 1.77 $ (0.23) (13.0)%
Discontinued operations (0.04) (0.05) 0.01 20.0 %
Consolidated $1.50$ 1.72 $ (0.22) (12.8)%
Diluted earnings (loss) per share:
Continuing operations $1.53$ 1.75 $ (0.22) (12.6)%
Discontinued operations (0.04) (0.04) — — %
Consolidated $1.49$ 1.71 $ (0.22) (12.9)%
EBITDA from continuing operations (1) $ 812,218 $ 948,537 $ (136,319) (14.4)%
EBITDA from continuing operations - adjusted (1) 838,654 951,006 (112,352) (11.8)%
(1) See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.
FISCAL 2016 COMPARED TO FISCAL 2015
Revenues decreased $40.5 million, or 1.3%, compared to the prior year.
U.S. assisted tax preparation fees increased $24.7 million, or 1.3%, while royalty revenues declined $26.3 million,
or 9.0%. We acquired a number of franchisee businesses during the year, and declines in royalty revenues are due