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H&R Block, Inc. | 2016 Form 10-K 33
We exclude the gains and losses on business dispositions, including investment banking, legal and accounting
fees from both business dispositions and acquisitions.
We exclude the gains and losses on extinguishment of debt.
We may consider whether other significant items that arise in the future should also be excluded from our non-
GAAP financial measures.
We measure the performance of our business using a variety of metrics, including EBITDA from continuing
operations, adjusted EBITDA and EBITDA margin from continuing operations, adjusted pretax and net income of
continuing operations, and adjusted diluted earnings per share from continuing operations. Adjusted EBITDA from
continuing operations, adjusted pretax and net income from continuing operations, and adjusted diluted earnings per
share from continuing operations eliminate the impact of items that we do not consider indicative of our core operating
performance and, we believe, provide meaningful information to assist in understanding our financial results, analyzing
trends in our underlying business, and assessing our prospects for future performance. We also use EBITDA from
continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as
performance metrics in incentive compensation calculations for our employees.
The following is a reconciliation of EBITDA from continuing operations to net income:
(in 000s)
Year ended April 30, 2016 2015 2014
Net income - as reported $ 374,267 $ 473,663 $ 475,157
Add back:
Discontinued operations, net 9,286 13,081 24,940
Income taxes of continuing operations 185,926 256,061 267,019
Interest expense of continuing operations 69,141 45,928 57,388
Depreciation and amortization of continuing operations 173,598 159,804 115,604
437,951 474,874 464,951
EBITDA from continuing operations $ 812,218 $ 948,537 $ 940,108