H&R Block Reports Record Q3 Results, Strong Start to Tax Season
Company Reports 16-Cent Earnings Per Share, Raises Fiscal 2002 Earnings Guidance
H&R Block Inc. (NYSE: HRB) today reported record third quarter revenues and earnings due to strong results in its U.S. tax and mortgage businesses. The company raised its earnings guidance for the fiscal year on the basis of its strong third quarter results and growing confidence in the results expected from the current tax-filing season. In addition, the company declared its quarterly dividend.For the third quarter ended Jan. 31, 2002, H&R Block's earnings increased to $29.6 million, or 16 cents per basic and diluted share, up from $4.5 million, or 2 cents per basic and diluted share, last year. Cash earnings improved $13.5 million, or 52.2 percent, to $39.4 million, or 21 cents per diluted share, compared with $25.9 million, or 14 cents per diluted share last year. The company defines cash earnings as net earnings from operations excluding the after-tax effect of amortization expense of acquired intangible assets.
Revenues for the third quarter increased 11 percent to $728 million, compared to $656 million in last year's third quarter.
"We had a great start to the tax season and an outstanding third quarter. We saw growth in the number of tax clients that we served in January, and our clients' tax returns were more complex due to changes in the tax laws," said Mark A. Ernst, president and chief executive officer, H&R Block.
"It's difficult to fully predict results for the entire tax season based on early season filings, but overall trends indicate that we're on track with previously announced growth targets for our U.S. tax operations," Ernst said. "Coupled with the continued strength of our mortgage operations, we're raising guidance for our full year results to a range of $2.20-to-$2.30, up 45-to-50 percent over last year's earnings. We expect overall revenue growth to be within our target range of 10-to-15 percent for the year."
Fiscal 2002 third quarter results reflect the company's previously announced early adoption of Statement of Financial Accounting Standards No. 141 and 142 (SFAS 141 and 142) related to business combinations, goodwill and other intangible assets. This change resulted in the elimination of goodwill and certain other intangible asset amortization as of May 1, 2001. The adoption of SFAS 141 and 142 represents $11.9 million, or 6 cents per diluted share, of the improvement over the prior year's third quarter.
In the quarter, the company's performance as measured by earnings before interest (including interest expense on acquisition debt, investment income and interest allocated to operating business units), taxes, depreciation and amortization (EBITDA), increased 25.1 percent, or $21.8 million to $108.5 million compared to $86.7 million last year.
U.S. Tax Operations
H&R Block's U.S. tax operations reported revenues of $379.2 million, an increase of $57.3 million, or 17.8 percent, compared with $322 million in the same quarter a year ago. Pretax earnings for the segment improved $23.8 million to $25.3 million, compared to $1.5 million last year. Increases in both the number of clients and average fees per client, along with strict cost management, were the primary contributors to the segment's improved results. The adoption of SFAS 141 and 142 accounts for $2.9 million of the improvement over last year. EBITDA increased $18.8 million to $39.5 million, compared to $20.8 million in the third quarter last year.
From Jan. 1 through Jan. 31, tax preparation and related fees from company-owned and franchised offices increased 16.5 percent compared with the same period last year, while the number of tax returns prepared increased 7.4 percent compared to last year. As of Jan. 31, H&R Block had filed 3.5 million federal returns electronically, representing a 7.8 percent increase over the prior year. Through the first month of the tax season, 95.5 percent of returns processed by the company were filed electronically. The number of Refund Anticipation Loans (RALs) processed by Block increased 17.9 percent to 2 million, compared with 1.7 million for the same period in 2001.
For the period Jan. 1 through Feb. 15, company-owned and franchised operations served 8.9 million clients, an increase of 4 percent over the same period last year. For the same period, tax preparation and related fees increased 12.9 percent to $964.2 million.
Outlook for Remainder of Tax Season
"While we are very encouraged by our strong start this tax season, a significant share of the tax filing season remains," Ernst said. "Our analysis of early season data that filing patterns to date are consistent with our net client growth expectation of 3-to-5 percent for the full year. While we believe our marketing efforts during the early season helped drive expected levels of new business, our ultimate results from the tax season will depend heavily on the success of our marketing initiatives for the balance of the season.
"Average fee increases are expected to be lower in the fourth quarter than those experienced in the third quarter. The increase in average fees to date is in large measure due to greater complexity from specific provisions of the tax laws affecting early filing clients. We don't expect to see this level of increase in average fees continue late into the tax season," Ernst explained.
International Tax Operations
International tax operations, which includes Canada, Australia and the United Kingdom, generated revenues of $8 million, up 1.7 percent over last year. The pretax loss improved $1.2 million, or 19.2 percent, to $5.2 million, compared with a loss of $6.5 million a year-ago. Good cost control, particularly in Canadian operations, drove the improved results.
Mortgage Operations
Mortgage operations, which primarily include Option One Mortgage Corp. and H&R Block Mortgage Corp., reported pretax earnings that rose 103.5 percent to $77.4 million, compared with $38.1 million last year. The adoption of SFAS 141 and 142 accounts for $3.4 million of the improvement in earnings over the prior year. Revenues rose 57.4 percent to $179.8 million.
An 81.9 percent increase in loan originations, larger servicing volume, improved pricing on loans generated, and contributions from retail mortgage combined for an outstanding quarter. In addition, higher volumes and cost controls helped drive a 22 percent decline in the cost of origination, contributing to the 7 basis point year-over-year improvement in operating profit margin. Operating profit margin for the quarter was 2.67 percent compared with 2.6 percent in last year's third quarter. Operating profit margin is defined as pretax earnings before goodwill amortization divided by mortgage fundings. EBITDA increased $37.5 million to $81.1 million, or 85.9 percent over the prior year.
"The performance of our mortgage businesses continues to be strong," Ernst said. "In its third consecutive profitable quarter, H&R Block Mortgage contributed 11.4 percent of the segment's $39.4 million year-over-year improvement. H&R Block tax clients generated 12.6 percent of all loans originated and 66.4 percent of all retail loans during the quarter."
Option One and H&R Block Mortgage originated $2.9 billion in loans during the third quarter. Option One's ending servicing portfolio was $22.7 billion, compared with $18 billion last year.
Based on current trends and market conditions, the company expects continued strength in its mortgage segment in the fourth quarter.
Investment Services
H&R Block's investment services operations, which consists primarily of H&R Block Financial Advisors Inc., continues to be adversely affected by the decline in investor activity and weak market conditions. Third quarter revenues totaled $61.1 million, compared with $118.2 million last year. The segment reported a pretax loss of $12.3 million compared with pretax earnings of $7.4 million last year. The adoption of SFAS 141 and 142 positively impacted the change over the prior year by $4 million. Investment services reported a decline in EBITDA to $1 million from $23.8 million in the prior year.
Key drivers of revenues for the business, including trading levels and margin balances, were consistent with those seen in the previous quarter. Consistent with industry trends, the company expects low levels of trading activity to continue through its fourth quarter.
Business Services
Business services, which primarily includes RSM McGladrey, reported pretax earnings of $1.8 million, compared to $769,000 last year. Revenues rose 1.6 percent to $94.2 million, compared with $92.7 million last year. Growth in tax consulting was offset by a slowdown in business consulting services, off-season losses from newly acquired firms, and normal operating cost increases. Business services reports the bulk of its earnings in the fourth quarter of the year.
The adoption of SFAS 141 and 142 positively affected results by $5.2 million compared to the third quarter last year. Business services reported a decline in EBITDA to $7 million, compared with $10.8 million last year.
Nine month results
For the nine months ended Jan. 31, 2002, H&R Block's revenues were $1.4 billion, up 10.3 percent from the same period a year ago. The net loss was $29.2 million, or 16 cents per basic share, compared with a net loss of $96.9 million, or 53 cents per basic share for the same nine-month period last year. Cash earnings improved to a loss of $492,000, compared with a loss of $33.8 million, or 18 cents per basic share. EBITDA improved by $61.6 million to $115.2 million, compared with $53.6 million for the prior year's nine-month period. The adoption of SFAS 141 and 142 represents $35 million, or 19 cents per share, of the improvement over the same period last year.
Dividend Announced
The Board of Directors of H&R Block Inc. declared a quarterly dividend of 16 cents per share payable April 1, 2002, to shareholders of record on March 11, 2002.
Other
Effective May 1, 2001, the company adopted a new methodology for allocation of corporate services and support costs to business units. This change was made in an effort to more accurately reflect each business line's performance. Prior year results have been restated to reflect the new methodology.
A conference call with H&R Block management discussing third quarter results will be conducted live today at 5 p.m. EST (4 p.m. Central) and may be accessed at www.hrblock.com .
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements based upon current information and expectations. Such statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that could cause actual results to differ materially from what is expressed, implied or forecast in such forward-looking statements. Such differences could be caused by a number of factors, including, but not limited to, the uncertainties that the company will achieve its revenue, earnings and earnings per share goals for fiscal year 2002, that the level of growth experienced in U.S. tax operations in the third quarter and early tax season will continue throughout the remainder of the tax season and fiscal year, that actual financial results for fiscal year 2002 will fall within the guidance provided by the company, of the success of the company's marketing efforts, and of the continued strong performance of the mortgage operations segment; changes in economic, political or regulatory environments; changes in competition and the effects of such changes; litigation involving the company; and risks described from time to time in reports and registration statements filed by H&R Block Inc. and its subsidiaries with the Securities and Exchange Commission. Readers should take these factors into account in evaluating such forward-looking statements.
About H&R Block:
H&R Block Inc. is a diversified company with subsidiaries providing a range of financial products and services. In 2001, H&R Block served 19.2 million taxpayers -- - more than any tax or accounting firm -- - through its more than 10,400 offices located in the United States, Canada, Australia and the United Kingdom. H&R Block served another 2.3 million tax clients through its award-winning TaxCut(R) software program and through its online tax preparation services. Investment services and securities products are offered through H&R Block Financial Advisors Inc., member NYSE, SIPC. H&R Block, Inc. is not a registered broker-dealer. H&R Block Mortgage Corporation and Option One Mortgage Corporation offer a range of home mortgage products. RSM McGladrey Inc. is a national accounting, tax and consulting firm with 100 offices nationwide, as well as an affiliation with 550 offices in 75 countries as the U.S. member of RSM International. Additional information is available on the company's Web site at www.hrblock.com .
H&R BLOCK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited, amounts in thousands, except per share data
Three months ended January 31,
2002 2001 2000
Revenues $728,038 $656,000 $512,507
Earnings (loss) before income taxes
(benefit) 49,774 7,792 (13,523)
Net earnings (loss) $29,616 $4,460 $(7,075)
Basic net earnings (loss) per share:
Net earnings (loss) $0.16 $0.02 $(0.04)
Basic shares outstanding 182,936 182,597 196,716
Diluted net earnings (loss) per
share:
Net earnings (loss) $0.16 $0.02 $(0.04)
Diluted shares outstanding 188,181 184,072 196,716
Nine months ended January 31,
2002 2001 2000
Revenues $1,430,892 $1,297,584 $844,013
Loss before income tax benefit (49,041) (168,557) (145,477)
Net loss $(29,179) $(96,941) $(88,886)
Basic net earnings (loss) per share:
Net loss $(0.16) $(0.53) $(0.45)
Basic shares outstanding 183,028 183,975 195,923
Notes to Consolidated Statements of Operations
On June 20, 2001, the Company's Board of Directors declared a two-for-one
stock split of its Common Stock in the form of a 100% stock distribution
effective August 1, 2001, to shareholders of record as of the close of
business on July 10, 2001. Basic net earnings (loss) per share is based
on the weighted average number of shares outstanding during each period.
The dilutive effect of potential common shares is included in diluted net
earnings per share. All periods presented have been adjusted to reflect
the stock split.
Reclassifications have been made to prior years to conform with current
period presentation.
Results for the three months and the nine months ended January 31, 2001
have been adjusted to reflect the implementation of SEC Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101).
The effect of this change was to reduce revenues by $5.4 million and net
earnings by $1.2 million in the third quarter and increase revenues and
net earnings in the fourth quarter of fiscal 2001 by the same amounts.
Therefore, there was no effect to the full fiscal 2001 results from the
implementation of SAB 101.
Effective May 1, 2001, the Company adopted a new methodology for
allocation of corporate services and support costs to business units.
This change was made in an effort to more accurately reflect each business
line's performance. Prior year results have been restated to reflect the
new methodology.
In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, "Business Combinations," and No.
142, "Goodwill and Other Intangible Assets" (SFAS 141 & 142). SFAS 141
addresses financial accounting and reporting for business combinations and
replaces APB Opinion No. 16, "Business Combinations" (APB 16). SFAS 141
no longer allows the pooling of interests method of accounting for
acquisitions, provides new recognition criteria for intangible assets and
carries forward without reconsideration the guidance in APB 16 related to
the application of the purchase method of accounting. SFAS 142 addresses
financial accounting and reporting for acquired goodwill and other
intangible assets and replaces APB Opinion No. 17, "Intangible Assets"
(APB 17). SFAS 142 addresses how intangible assets should be accounted
for upon their acquisition and after they have been initially recognized
in the financial statements. As of May 1, 2001, the Company elected early
adoption of both SFAS 141 & 142. The implementation of these standards
has the effect of reducing amortization expense of acquired intangible
assets.
On December 1, 1999, the Company completed the acquisition of the
outstanding capital stock of Olde Financial Corporation and Financial
Marketing Services, Inc. (collectively, OLDE). The purchase price was
$850 million in cash plus net tangible book value payments of
$48.5 million. The acquisition was accounted for as a purchase and,
accordingly, OLDE's results are included since the date of the
acquisition. The acquisition was funded with short-term borrowings and
the issuance of $500 million in Senior Notes in the fourth quarter of
fiscal 2000.
On August 2, 1999, the Company, through a subsidiary, RSM McGladrey, Inc.,
completed the purchase of substantially all of the non-attest assets of
McGladrey & Pullen, LLP. The purchase price was $240 million in
cashpayments over four years and the assumption of certain pension
liabilities with a present value of $52.7 million. The acquisition was
accounted for as a purchase, and accordingly, results are included since
the date of acquisition.
During the nine months ended January 31, 2002, 2001 and 2000, the Company
issued shares of its common stock pursuant to provisions for exercise of
the Company's stock option plans as follows: 2002 - 9,260,707 shares;
2001 -213,550 shares; 2000 - 1,907,730 shares. During the same periods,
the Company reacquired shares of its common stock as follows: 2002 -
9,697,158 shares at an aggregate cost of $352,213,000; 2001 - 13,632,196
shares at an aggregate cost of $222,894,000; 2000 - 1,443,600 shares at an
aggregate cost of $32,366,000.
H&R BLOCK, INC.
SELECTED OPERATIONAL INFORMATION
Unaudited, amounts in thousands
Three months ended January 31,
Revenues Earnings (loss)
2002 2001 2002 2001
U.S. tax operations $379,235 $321,956 $25,280 $1,498
International tax
operations 7,989 7,857 (5,242) (6,486)
Mortgage operations 179,751 114,169 77,427 38,051
Investment services 61,085 118,164 (12,300) 7,378
Business services 94,194 92,729 1,780 769
Unallocated corporate 5,784 1,125 (16,660) (7,366)
Interest expense on
acquisition debt - - (19,243) (23,988)
$728,038 $656,000 51,042 9,856
Investment income, net 466 1,099
Intercompany interest* (1,734) (3,163)
49,774 7,792
Taxes on earnings 20,158 3,332
Net earnings $29,616 $4,460
Nine months ended January 31,
Revenues Earnings (loss)
2002 2001 2002 2001
U.S. tax operations $427,229 $359,709 $(160,113) $(169,788)
International tax
operations 26,530 27,655 (11,886) (13,692)
Mortgage operations 508,897 279,459 237,397 80,014
Investment services 194,837 380,404 (27,533) 30,840
Business services 265,955 247,093 2,163 (3,495)
Unallocated corporate 7,444 3,264 (31,917) (19,266)
Interest expense on
acquisition debt - - (60,001) (75,760)
$1,430,892 $1,297,584 (51,890) (171,147)
Investment income, net 2,678 6,354
Intercompany interest* 171 (3,764)
(49,041) (168,557)
Income tax benefit (19,862) (71,616)
Net loss $(29,179) $(96,941)
* Intercompany interest represents net interest expense charged to
financial related businesses for corporate cash that was borrowed to
fund their operating activities and net unallocated interest expense
attributable to commitment fees on the Company's credit facility.
H&R Block, Inc.
Consolidated Balance Sheets
Unaudited, amounts in thousands, except share data
January 31,
2002 2001
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $640,225 $380,918
Marketable securities --
available-for-sale - 8,288
Marketable securities -- trading 21,733 42,690
Receivables from customers,
brokers, dealers and clearing
organizations, less allowance for
doubtful accounts of $1,745 and $878 910,967 1,913,319
Receivables, less allowance for
doubtful accounts of
$53,407 and $37,042 1,241,470 1,057,458
Prepaid expenses and other
current assets 329,275 229,583
TOTAL CURRENT ASSETS 3,143,670 3,632,256
INVESTMENTS AND OTHER ASSETS:
Investments in available-for-
sale marketable securities 281,135 295,415
Excess of cost over fair value
of net tangible assets
acquired, net of amortization 1,116,675 1,069,302
Other 237,176 260,494
1,634,986 1,625,211
PROPERTY AND EQUIPMENT, at cost less
accumulated depreciation and amortization 287,812 286,897
$5,066,468 $5,544,364
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $1,638,832 $1,626,806
Accounts payable to customers,
brokers and dealers 948,722 1,626,612
Accounts payable, accrued
expenses and deposits 264,616 285,276
Accrued salaries, wages and
payroll taxes 171,999 141,744
Accrued taxes on earnings 48,100 20,825
Current portion of long-term debt 53,192 50,419
TOTAL CURRENT LIABILITIES 3,125,461 3,751,682
LONG-TERM DEBT 874,644 869,249
OTHER NONCURRENT LIABILITIES 100,951 100,328
STOCKHOLDERS' EQUITY:
Common stock, no par, stated
value $.01 per share 2,179 2,179
Additional paid-in capital 465,963 419,517
Retained earnings 1,308,310 1,074,384
1,776,452 1,496,080
Less cost of 34,646,147 and
35,294,012 shares of common
stock in treasury 811,040 672,975
965,412 823,105
$5,066,468 $5,544,364
H&R Block, Inc.
Consolidated Statements of Cash Flows
Unaudited, amounts in thousands
Nine months ended January 31,
2002 2001
Cash flows from operating
activities:
Net loss $(29,179) $(96,941)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 107,095 148,990
Net (gain) loss on sale of
operating unit (362) (2,040)
Provision for bad debt 50,194 43,448
Accretion of acquisition liabilities 8,999 8,766
Tax benefit from stock option exercises 55,004 -
Changes in:
Receivables from customers, brokers,
dealers and clearing organizations 399,579 942,791
Receivables (929,660) (826,093)
Marketable securities - trading 24,425 2,713
Prepaid expenses and other
current assets (96,383) (84,742)
Accounts payable to customers,
brokers and dealers (109,278) (943,588)
Accounts payable, accrued
expenses and deposits (96,594) 62,565
Accrued salaries, wages and
payroll taxes (49,831) (31,185)
Accrued taxes on earnings (247,499) (205,592)
Other, net 34,902 180
Net cash used in operating activities (878,588) (980,728)
Cash flows from investing activities:
Purchases of available-for-sale
securities (3,695) (5,413)
Maturities of available-for-sale
securities 61,209 32,375
Purchases of property and equipment, net (71,343) (47,674)
Payments made for business
acquisitions, net of cash acquired (44,397) (13,285)
Proceeds from sale of operating units 428 23,200
Other, net (33,506) 16,376
Net cash provided by (used in)
investing activities (91,304) 5,579
Cash flows from financing activities:
Repayments of notes payable (6,147,398) (11,864,855)
Proceeds from issuance of notes payable 7,786,230 13,207,864
Payments on acquisition debt (49,479) (67,643)
Dividends paid (86,349) (80,433)
Payments to acquire treasury shares (352,213) (222,894)
Proceeds from stock options exercised 186,825 3,019
Other, net 688 1,108
Net cash provided by financing
activities 1,338,304 976,166
Net increase in cash and cash equivalents 368,412 1,017
Cash and cash equivalents at
beginning of the period 271,813 379,901
Cash and cash equivalents at end of
the period $640,225 $380,918
Supplementary cash flow data:
Income taxes paid $162,902 $123,296
Interest paid 72,896 173,137
H&R Block, Inc.
Consolidated Statements of Operations
Unaudited, amounts in thousands, except per share data
Three Months Ended Nine Months Ended
January 31, January 31,
2002 2001 2002 2001
Revenues:
Service revenues $523,878 $513,639 $967,052 $1,026,353
Product sales 155,702 103,011 391,925 214,602
Royalties 33,329 28,636 37,772 33,829
Other income 15,129 10,714 34,143 22,800
728,038 656,000 1,430,892 1,297,584
Operating expenses:
Employee compensation and
benefits 321,353 305,404 698,069 624,844
Occupancy and equipment 72,678 63,717 194,106 180,175
Interest 30,733 68,048 90,323 195,219
Depreciation and amortization 38,167 52,848 107,095 148,990
Marketing and advertising 59,277 36,447 83,360 60,949
Supplies, freight and
postage 22,008 19,539 38,051 37,123
Bad debt 33,095 29,194 50,194 43,448
Other 101,781 76,170 221,928 183,804
679,092 651,367 1,483,126 1,474,552
Operating earnings (loss) 48,946 4,633 (52,234) (176,968)
Other income:
Investment income, net 468 1,099 2,679 6,354
Other, net 360 2,060 514 2,057
828 3,159 3,193 8,411
Earnings (loss) before income
taxes (benefit) 49,774 7,792 (49,041) (168,557)
Income taxes (benefit) 20,158 3,332 (19,862) (71,616)
Net earnings (loss) $29,616 $4,460 $(29,179) $(96,941)
Basic net earnings (loss) per
share $0.16 $0.02 $(0.16) $(0.53)
Basic shares outstanding 182,936 182,597 183,028 183,975
Diluted net earnings (loss) per
share $0.16 $0.02 $(0.16) $(0.53)
Diluted shares outstanding 188,181 184,072 183,028 183,975
H&R BLOCK, INC.
FINANCIAL SERVICES OPERATING DATA
Unaudited
H&R Block Financial Advisors, Inc.
For the three months ended
1/25/2002 1/26/2001 % Change 10/26/2001
Customer trades (000's) 402 599 -32.9% 377
Customer daily average trades 6,241 9,816 -36.4% 6,285
Average commission per trade $64.61 $68.61 -5.8% $63.17
Number of active accounts (000's) 603 605 -0.4% 609
Average trades per active
account per quarter 0.67 0.99 -32.6% 0.62
Average trades per active
account per year (annualized) 2.67 3.96 -32.6% 2.48
Ending balance of assets
under administration ($ bn's) $27.2 $36.3 -25.0% $27.1
Average assets per active
account $45,191 $60,028 -24.7% $44,448
Ending debit balances ($ bn's) $0.9 $1.9 -53.8% $0.9
Ending credit balances ($ bn's) $0.9 $0.9 -7.3% $0.8
Option One Mortgage Corporation
For the three months ended
1/31/2002 1/31/2001 % Change 10/31/2001
Number of loans originated
Wholesale 17,344 12,443 39.4% 18,172
Retail 4,056 2,424 67.3% 3,352
Total 21,400 14,867 43.9% 21,524
Volume of loans originated
(000's)
Wholesale $2,346,687 $1,297,435 80.9% $2,206,041
Retail 549,112 294,241 86.6% 438,158
Total $2,895,799 $1,591,676 81.9% $2,644,199
Loan sales $2,868,690 $1,547,169 85.4% $2,618,065
Servicing portfolio
Number of loans serviced
(000's) 202.4 172.6 17.3% 184.8
Servicing portfolio ($ bn's) $22.7 $18.0 26.1% $20.9
H&R Block, Inc.
Preliminary U.S. Tax Operating Data
Period January 1 through January 31 and February 15
Amounts in thousands, except average charge and number of offices
For the period ended For the period ended
1/31/ 1/31/ % 2/15/ 2/15/ %
2002 2001 change 2002 2001 change
Tax preparation &
related fees
Company owned
offices $259,783 $226,830 14.5% $615,317 $548,779 12.1%
Franchised offices 149,078 124,116 20.1% 348,840 305,417 14.2%
$408,861 $350,946 16.5% $964,157 $854,196 12.9%
Tax returns prepared
Company owned
offices 2,129 2,029 4.9% 5,002 4,825 3.7%
Franchised offices 1,354 1,214 11.5% 3,169 2,954 7.3%
3,483 3,243 7.4% 8,171 7,779 5.0%
Total clients served
Company owned
offices 2,149 2,069 3.9% 5,051 4,921 2.6%
Franchised offices 1,406 1,303 7.9% 3,283 3,156 4.0%
E-commerce * 143 109 31.2% 557 476 17.0%
3,698 3,481 6.2% 8,891 8,553 4.0%
Tax returns filed
electronically**
Company owned
offices 2,081 1,977 5.3% 4,807 4,590 4.7%
Franchised offices 1,333 1,204 10.7% 3,008 2,782 8.1%
E-commerce * 119 96 24.0% 501 448 11.8%
3,533 3,277 7.8% 8,316 7,820 6.3%
Percent filed
electronically
Company owned
offices 96.8% 95.6% 95.2% 93.3%
Franchised offices 94.8% 92.4% 91.6% 88.1%
E-commerce * 83.2% 88.1% 89.9% 94.1%
95.5% 94.1% 93.5% 91.4%
Average fee per
client served
Company owned
offices $120.89 $109.63 10.3% $121.82 $111.52 9.2%
Franchised offices 106.03 95.25 11.3% 106.26 96.77 9.8%
$115.01 $104.08 10.5% $115.69 $105.76 9.4%
Refund anticipation
loans
Company owned
offices 1,196 1,020 17.3% 2,514 2,197 14.4%
Franchised offices 767 647 18.5% 1,591 1,351 17.8%
E-commerce * 8 5 60.0% 25 22 13.6%
1,971 1,672 17.9% 4,130 3,570 15.7%
Offices
Company owned
offices 5,017 5,060 -0.8% 5,017 5,060 -0.8%
Franchised offices 3,998 4,012 -0.3% 3,998 4,012 -0.3%
9,015 9,072 -0.6% 9,015 9,072 -0.6%
* Includes on-line completed and paid returns and e-filings for software
clients
** Includes Federal only. State returns also electronically filed are not
included in this total.
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SOURCE H&R Block Inc.
CONTACT: Media Relations, Bob Schneider, +1-816-932-4835, or Investor
Relations, Mark Barnett, +1-816-701-4443, both of H&R Block Inc.
URL: http://www.hrblock.com
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