Table of Contents

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 11-K

(Mark One)
x		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2002
OR
o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from            to

Commission file number 1-6089

H&R Block Retirement Savings Plan
(Full title of the Plan)

H&R BLOCK, INC.
4400 Main Street
Kansas City, Missouri 64111
(Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office)

 

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Report of Independent Auditors
Financial Statements:
Statements of Net Assets Available for Benefits, December 31, 2002 and 2001
Statement of Changes in Net Assets Available for Benefits, For the Year Ended Decmeber 31, 2002
Notes to Financial Statements
Supplemental Information:
Schedule H, Line 4i — Schedule of Assets (Held at End of Year) December 31, 2002
Signatures
EXHIBITS
EX-23 Consent of Independent Accountants
EX-99.1 Certification Pursuant to 18 USC Sec. 1350

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Table of Contents

The H&R Block Retirement Savings Plan
Index to Financial Statements and Supplemental Information

		Page
Report of Independent Auditors			1
Financial Statements:
Statements of Net Assets Available for Benefits, December 31, 2002 and 2001			2
Statement of Changes in Net Assets Available for Benefits, For the Year Ended December 31, 2002			3
Notes to Financial Statements			4
Supplemental Information: *
Schedule H, Line 4i — Schedule of Assets (Held at End of Year) December 31, 2002			11
Signatures			17
Exhibits
Consent of Independent Accountants (Exhibit 23)			19
Certification pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 (Exhibit 99.1)			20

*A schedule of party-in-interest transactions has not been presented because there were no party-in-interest transactions, which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. Schedules of loans, fixed income obligations, and leases in default or uncollectible are not presented, as such loans, fixed income obligations, or leases do not exist.

 

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Report of Independent Auditors

To the Participants and Administrator of
the H&R Block Retirement Savings Plan:

In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the H&R Block Retirement Savings Plan (the “Plan”) at December 31, 2002 and 2001, and the changes in net assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule H, line 4i - schedule of assets (held at end of year) as of December 31, 2002 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

PricewaterhouseCoopers LLP

Kansas City, Missouri
June 27, 2003

 

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Table of Contents

The H&R Block Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001

				December 31,
				2002				2001
Assets
	Cash, non-interest bearing			$	36,169,840			$	—
	Investments, at fair value:
		H&R Block, Inc. common stock fund			10,067,064				6,278,117
		Mutual funds			214,274,162				172,318,771
		Self-directed brokerage accounts			4,778,244				-
		Participant loans			4,264,271				1,950,857
	Total investments				233,383,741				180,547,745
	Receivables:
		Employer contributions			1,205,778				153,418
		Participant contributions			879,193				696,608
		Dividends receivable			171,638				—
		SmartRetirement: The OLDE 401(k) Plan and Trust transfer			—				33,993,519
		Option One Mortgage Company Retirement Plus Plan transfer			706,478				—
	Total receivables				2,963,087				34,843,545
Total assets					272,516,668				215,391,290
Liabilities
	Due to broker for securities purchased				22,669,976				—
	Accrued liabilities				70,066				45,453
Net assets available for benefits				$	249,776,626			$	215,345,837

The accompanying notes are an integral part of these financial statements.

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The H&R Block Retirement Savings Plan
Statement of Changes iin Net Assets Available for Benefits
For the Year Ended December 31, 2002

				For the Year Ended
				December 31, 2002
Additions:
	Investment income:
		Dividends and interest		$	4,870,528
		Net depreciation in fair value of investments			(33,671,499	)
					(28,800,971	)
	Contributions:
		Employer			16,988,934
		Participant			25,086,081
					42,075,015
	Other:
		Transfer from Option One Mortgage Company Retirement Plus Plan			38,119,889
	Total additions				51,393,933
Deductions:
	Distributions to participants				16,572,986
	Administrative expenses				390,158
	Total deductions				16,963,144
Net increase in net assets available for benefits					34,430,789
Net assets available for benefits
	Beginning of year				215,345,837
	End of year			$	249,776,626

The accompanying notes are an integral part of these financial statements.

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Table of Contents

The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

1.		Description of the Plan
		The H&R Block Retirement Savings Plan (the “Plan”) is a contributory, defined contribution plan sponsored by HRB Management, Inc. (the “Company”) for its employees and the employees of certain of its affiliates. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”).
		The Plan became effective on January 1, 1985, and was originally known as the H&R Block Savings Plan. On December 31, 2000, the H&R Block Profit Sharing Plan merged into the H&R Block Savings Plan, and sponsorship of the H&R Block Savings Plan transferred to the Company from H&R Block Tax Services, Inc., an affiliate of the Company.
		Effective January 1, 2001, the Company amended and restated the Plan to, among other things, rename the H&R Block Savings Plan to the H&R Block Retirement Savings Plan, and select a new trustee, custodian, and recordkeeper for the Plan. In addition, the Plan began offering a wider selection of investment options to its participants, including the H&R Block, Inc. Common Stock Fund (the “Common Stock Fund”). The Common Stock Fund uses “unit” accounting. As a unitized stock fund, the Common Stock Fund holds primarily H&R Block, Inc. Common Stock and a small percentage of cash and short-term investments, while participants hold units of the Common Stock Fund.
		During December 2001, the Company approved a plan to merge the SmartRetirement: The OLDE 401(k) Plan and Trust (the “OLDE Plan”) into the Plan effective December 31, 2001. The OLDE Plan was sponsored by OLDE Financial Corporation, an affiliate of the Company. As a result of this decision to merge, the net assets of the OLDE Plan are presented as a receivable at December 31, 2001 on the statement of net assets available for benefits. These net assets were transferred to the Plan by February 22, 2002.
		In December 2001, the Plan was amended and restated to, among other things, allow participants to make pre-tax contributions up to fifty percent of their compensation (subject to Internal Revenue Code limitations), with a discretionary employer matching contribution of up to one hundred percent of a participant’s contributions not to exceed five percent of the participant’s compensation. In addition, the amendment made vesting in any prospective employer matching contributions immediate. These amendments were effective as of January 1, 2002 for participants employed by a participating employer in the “Investment Services Line of Business,” as such term is defined by the Plan, and July 1, 2002 for all other participants. Additionally, individual brokerage accounts were added as an investment option during February 2002 for participants employed by a participating employer in the Investment Services Line of Business and as of April 1, 2002 for all other participants.
		During December 2002, the Company approved a plan to merge the Option One Mortgage Corporation Retirement Plus Plan (the “Option One Plan”) into the Plan. The Option One Plan was sponsored by Option One Mortgage Corporation, an affiliate of the Company. Substantially all of the net assets of the Option One Plan were transferred to the Plan by December 31, 2002. Remaining assets totaling $706,478 were transferred in

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The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

		2003 and are presented as a receivable in the statement of net assets available for benefits.
		The following description provides only general information. Participants should refer to the Plan document for a more complete description of the Plan.
		Eligibility The timing of an employee’s eligibility for participation in the Plan depends on whether the employee is classified as a nonseasonal employee or seasonal employee. With respect to participant contributions and employer matching contributions: (a) nonseasonal employees are automatically enrolled in the Plan beginning the first day of the month following or coinciding with the date they complete 90 “Days of Service,” as such term is defined in the Plan, and (b) seasonal employees are automatically enrolled in the Plan beginning with the first participation date (January 1 or July 1) following or coinciding with the date they complete a “Year of Service,” as such term is defined in the Plan. With respect to employer profit sharing contributions, both nonseasonal and seasonal employees are eligible to participate beginning the first day of the Plan year that immediately precedes or is coincident with the date the employee completes a “Year of Service.”
		Contributions Participants may make pre-tax contributions from two to fifty percent of their compensation, subject to Internal Revenue Code limitations. The Company may make discretionary matching contributions of up to one hundred percent of a participant’s contributions, not to exceed five percent of the participant’s compensation. The Company may make discretionary profit sharing contributions, which will be allocated among participant accounts based on the participant’s eligible compensation. For the year ended December 31, 2002, the Company contributed $9,305,314 and $7,683,620 for the matching contribution and the profit sharing contribution, respectively.
		Vesting Participant contributions, and earnings thereon, are fully vested and nonforfeitable at all times. Beginning January 1, 2002 for participants in the Investment Services line of business, and beginning July 1, 2002 for all other participants, employer matching contributions made after such applicable effective date, and earnings thereon, are fully vested and nonforfeitable at all times.
		Forfeitures A participant forfeits the unvested portion of his/her account on the last day of the plan year in which the participant incurs the fifth of five consecutive one-year breaks in service. Forfeitures for the plan year are used to reduce employer matching contributions or to reduce the administrative expenses of the Plan. For the year ended December 31, 2002 the amount forfeited was $841,651. Forfeitures of $377,258 were used to pay Plan administrative expenses during the year ended December 31, 2002.

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The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

		Earnings Earnings are allocated each day to participant accounts based upon the participant’s balance in each investment option as a percentage of the Plan’s balance in the respective investment option.
		Loans Participant loans must be at least $1,000 and are limited to the lesser of $50,000 or fifty percent of the participant’s vested account balance. Interest is prime plus one percent. Loans are payable over one to five years except for loans for the purchase of a residence, which may be longer.
		Distributions Generally, distributions may not be made to a participant, or in the case of death, a participant’s beneficiary, until administratively feasible following the earliest of the participant’s death, disability, or severance from employment. Distributions are in the form of a lump sum cash payment.
		Termination Although the Company has not expressed any intent to do so, it has the right to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in the Plan and under ERISA.
		Investments Participants may direct to have their accounts invested in one or more of the following investments. Investment options, as described in the respective prospectuses, are as follows:

	•		H&R Block Common Stock Fund: Seeks to provide a high rate of return by investing primarily in the stock of H&R Block, Inc., and holds a small percentage in cash and short-term investments.
	•		AIM Constellation Fund: Seeks capital appreciation by investing primarily in common stocks, emphasizing small- to mid-size emerging-growth companies. Companies in which the fund invests typically fall into two categories: companies that have experienced above-average and consistent long-term earnings growth and exhibit favorable prospects for future growth, and companies that are currently experiencing a dramatic increase in profits.
	•		AIM Global Science and Technology Fund: Seeks long-term growth of capital by investing at least 65% of assets in equity securities of telecommunications and technology companies. The fund will normally invest in the securities of companies located in at least three different countries, including the United States.
	•		AIM Premier Equity Fund: Seeks long-term growth of capital by investing primarily in equities management believes to be undervalued relative to management’s appraisal of the current or projected earnings of the companies issuing the securities, or relative to current market values of assets owned by the companies issuing the securities or relative to the equity markets generally. The fund also may invest in

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The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

			preferred stocks and debt instruments that have prospects for growth of capital. It may hold up to 25% in foreign securities.
	•		AIM Weingarten Fund: Seeks growth of capital by investing primarily in common stocks. Its investments usually fall into one of the following two categories: companies that management considers to have experienced above-average and consistent growth in earnings and to have potential for significant future growth, and companies that management believes are currently experiencing a dramatic increase in profits. The fund may invest up to 20% of assets in foreign securities.
	•		Columbia Small Cap Fund: Seeks to provide long-term capital appreciation by investing at least 65 percent of its net assets in common stocks, or in securities convertible into common stocks, of small capitalization companies.
	•		Dodge & Cox Stock Fund: Seeks to provide long-term capital growth by investing primarily in stocks that, in the fund manager’s opinion, appear to be undervalued by the market.
	•		EuroPacific Growth Fund: Seeks to provide long-term capital growth by investing at least 80 percent of its assets in issuers located in Europe and the Pacific basin.
	•		Franklin DynaTech Fund: Seeks capital appreciation by investing primarily in companies that emphasize technological development in fast-growing industries or in undervalued securities. It primarily purchases common stocks, but it may also hold utility debt securities and preferred stocks. The fund typically invests in high-quality debt; a B rating is its lowest parameter.
	•		Franklin Small-Mid Cap Growth Fund: Seeks long-term capital growth by investing at least 80% of assets in equity securities of companies that have a market capitalization not exceeding $8.5 billion. It may invest the balance of assets in equity securities of larger companies. The fund may also invest in IPOs, and can invest a very small portion of assets in private or illiquid securities.
	•		Growth Fund of America: Seeks capital growth by investing primarily in common stocks. Management selects securities that it believes are reasonably priced and represent solid long-term investment opportunities. The fund may invest up to 10% of assets in securities of issuers domiciled outside of the U.S. and Canada, and not included in the S&P 500 index.
	•		INVESCO Dynamics Fund: Seeks to provide long-term capital appreciation by investing primarily in common stocks of mid-sized U.S. companies, as well as preferred stocks, convertible securities, and bonds.
	•		Investment Company of America Fund: Seeks long-term growth of capital and income by investing primarily in common stocks. When choosing securities, management gives the possibility of appreciation and potential dividends more weight than current yield.
	•		Legg Mason Value Trust Fund: Seeks to provide long-term capital appreciation by investing primarily in stocks that, in the fund manager’s opinion, are being offered at large discounts to the manager’s assessment of their intrinsic value.
	•		Lord Abbett Mid-Cap Value Fund: Seeks to provide long-term capital appreciation by investing at least 80 percent of its net assets in equity securities of medium capitalization companies.

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The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

	•		New Perspective Fund: Seeks long-term growth of capital by investing primarily in common stocks of foreign and U.S. companies.
	•		PIMCO Total Return Fund: Seeks to provide maximum total return, consistent with preservation of capital, by investing at least 65 percent of its assets in a diversified portfolio of fixed income instruments of varying maturities, primarily investment grade debt securities.
	•		SEI Tax Exempt Fund: Seeks to provide current income while preserving capital and tracking interest rates over the intermediate term.
	•		Strong Blue Chip 100 Fund: Seeks long-term capital appreciation as well as current income by investing in the common stocks of the 100 largest market capitalization companies primarily traded in the U.S.
	•		Strong Opportunity Fund: Seeks to provide long-term capital growth by investing in stocks of medium-capitalization companies the fund’s manager believes are underpriced, yet have attractive growth prospects.
	•		UAM ICM Small Company Fund: Seeks to provide long-term capital appreciation by investing in stocks of small-capitalization companies.
	•		Vanguard Institutional Index 500: Seeks to provide long-term capital appreciation and match the performance of the S&P 500 Index, by investing all or substantially all of its assets in the stocks that make up the Index.
	•		Vanguard Wellington Fund: Seeks to provide conservation of capital, a moderate level long-term capital appreciation and current income, by investing 60 to 70 percent of its assets in dividend paying stocks of established large and medium-sized companies.
	•		Washington Mutual Investors Fund: Seeks income and the opportunity for growth of principal by investing in common stocks or equivalent securities, which are legal for the investment of trust funds in the District of Columbia. It intends to be fully invested and well diversified. Management tries to select a portfolio that an investor with fiduciary responsibility might select under the Prudent Investor Rule of the Superior Court of the District of Columbia.
	•		Reserve Primary Institutional Fund: Seeks to provide current income while preserving capital and tracking interest rates over the intermediate term.
	•		Self-Directed Brokerage Accounts: Participants also have the option to open an individual brokerage account and access and invest contributions in a wide variety of mutual funds, not all of which are listed above.

		Participants should refer to the respective prospectuses for a more complete description of the objectives and strategies of each investment option.
2.		Significant Accounting Policies
		Basis of Accounting The financial statements of the Plan have been prepared on the accrual basis of accounting.

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The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

		Investment Valuation and Income Recognition H&R Block, Inc. Common Stock is stated at fair value as determined by the market closing price on the last business day of the plan year. Mutual funds, including those in self-directed brokerage accounts, are stated at fair value as determined by quoted market prices. Participant loans are valued at cost, which approximates fair value. The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date.
		Expenses All administrative expenses of the Plan are paid by the Plan, except to the extent paid by the Company.
		Payment of Benefits Benefits are recorded when they have been approved for payment.
		Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from net assets available for benefits during the reporting period. Actual results could differ from those estimates.
3.		Investments
		The Plan’s investments (including investments bought, sold, and held during the year) depreciated in fair value as follows:

		For the Year Ended
		December 31,
		2002
Common stock fund		$	(1,452,653	)
Mutual funds and self-directed brokerage accounts			(32,218,846	)
		$	(33,671,499	)

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The H&R Block Retirement Savings Plan
Notes to Financial Statements
December 31, 2002

Individual investments that represent five percent or more of the fair value of the Plan’s net assets are as follows:

		December 31,
		2002				2001
Legg Mason Value Trust Fund		$	28,250,123			$	32,414,672
SEI Tax Exempt Fund			23,456,013				—
Vanguard Institutional Index 500			31,165,946				31,800,732
Vanguard Prime Money Market Fund			—				16,966,468
Vanguard Wellington Fund			72,821,444				80,996,160

4.		Plan Committees and Trustee
		The Plan provides for selection of an administrative committee, a plan administrator and a trustee by the Board of Directors of the Company. The administrative committee is responsible for the general administration of the plan and the interpretation of its provisions. The plan administrator is responsible for the reporting and disclosure requirements under ERISA. BNY Western Trust Company is the Plan’s trustee.
5.		Benefits Payable
		The Plan does not record a liability relating to the obligations for benefit payments to terminated employees. The Plan’s Form 5500 reflects the liability in the year of termination. As of December 31, 2002 and 2001, net assets available for benefits included assets of $27,076 and $4,310, respectively, due to participants who have terminated employment with the Company.
6.		Income Tax Status of the Plan
		The Plan received a favorable determination letter from the Internal Revenue Service dated September 20, 1995. The Plan has been amended since receiving the letter. However, the plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
7.		Related Party Transactions
		As of December 31, 2002 and 2001, the Plan’s investment portfolio includes an investment in the Common Stock of H&R Block, Inc., a party-in-interest to the Plan.
		The Plan’s recordkeeper, RSM McGladrey (“RSM”), is an affiliate of the Company and was paid $419,368 in administrative fees and reimbursements during the year ended December 31, 2002. As of December 31, 2002, administrative fees payable to RSM totaled $6,940 and are included in accrued administrative expenses in the Statement of Net Assets Available for Benefits.
		The Plan’s custodian, H&R Block Financial Advisors, Inc., is an affiliate of the Company.

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The H&R Block Retirement Savings Plan
EIN: 43-1910017, Plan Number: 002
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002

															(e)
			(b)				(c)				Shares Held				Current
(a)			Identity of Issuer or Borrower				Description of Investment				or Interest Rate				Value
	*		H&R Block, Inc. Common				H&R Block, Inc. Common Stock					236,296			$	9,499,099
			Stock Fund				Cash and other assets, net					567,965				567,965
																10,067,064
Mutual funds:
			AIM Family of Funds				AIM Constellation Fund Class A					188,555				3,135,666
			AIM Family of Funds				AIM Global Science & Tech Fund					190,137				887,937
			AIM Family of Funds				AIM Premier Equity Fund Class A					199,464				1,497,972
			AIM Family of Funds				AIM Weingarten Fund Class A					46,967				433,978
			Columbia Funds				Columbia Small Cap Fund					169,816				2,768,004
			Dodge & Cox Funds				Dodge & Cox Stock Fund					43,808				3,857,338
			American Funds Group				EuroPacific Growth Fund					370,518				8,510,780
			Franklin Templeton Investments				Franklin DynaTech Fund A					38,113				622,385
			Franklin Templeton Investments				Franklin Small Mid Cap Fund					78,007				1,712,264
			American Funds Group				Growth Fund of America					79,281				1,464,313
			INVESCO Family of Funds				INVESCO Dynamics Fund					117,993				1,257,805
			American Funds Group				Investment Company of America Fund					36,333				853,108
			Legg Mason Family of Funds				Legg Mason Value Trust Fund					651,375				28,250,123
			Lord Abbett Family of Funds				Lord Abbett Mid-Cap Value A Fund					294,200				4,527,734
			American Funds Group				New Perspective Fund					40,978				739,238
			PIMCO Funds				PIMCO Total Return Fund					1,133,041				12,089,557
			Bainbridge				SEI Tax Exempt Fund					23,456,013				23,456,013
			Strong Funds				Strong Blue Chip 100 Fund					1,022,974				8,818,020
			Strong Funds				Strong Opportunity Fund					91,929				2,638,369
			Advisors Inner Circle Funds				UAM ICM Small Company Fund					16,646				398,676
			Vanguard Group				Vanguard Institutional Index 500					387,395				31,165,946
			Vanguard Group				Vanguard Wellington Fund					2,965,043				72,821,444
			American Funds Group				Washington Mutual Investors					89,319				2,099,897

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The H&R Block Retirement Savings Plan
EIN: 43-1910017, Plan Number: 002
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002

															(e)
			(b)				(c)				Shares Held				Current
(a)			Identity of Issuer or Borrower				Description of Investment				or Interest Rate				Value
			The Reserve Funds				Reserve Primary Institutional Fund					267,595				267,595
																214,274,162
Self-directed brokerage accounts:
			AIM Family of Funds				AIM Basic Value Fund Class A Fund					743				16,248
			AIM Family of Funds				AIM Mid Cap Core Equity Fund					14,260				302,030
			AIM Family of Funds				AIM Global Health Care Class A Fund					4,704				101,361
			AIM Family of Funds				AIM Global Science Fund					1,138				5,313
			AIM Family of Funds				AIM Developing Markets Fund					6,734				48,622
			AIM Family of Funds				AIM Investment Strategic Fund Class A					739				5,675
			AIM Family of Funds				AIM Equity Funds Inc.					12,402				119,184
			AIM Family of Funds				AIM Constellation Fund Class A					582				9,680
			AIM Family of Funds				AIM Weingarten Fund Class A					555				5,126
			AIM Family of Funds				AIM Funds Group Small Cap Equity					863				7,105
			AIM Family of Funds				AIM Funds Group Class A Fund					664				4,892
			AIM Family of Funds				AIM International Growth Fund					12,797				163,550
			AIM Family of Funds				AIM International Mutual Fund					64				799
			AIM Family of Funds				AIM International Mutual Fund Class A					201				1,710
			AIM Family of Funds				AIM International Fund Class A					1,507				26,303
			AIM Family of Funds				AIM International Asia Pacific Fund					8,553				73,467
			AllianceBernstein Funds				AllianceBernstein American Govt Fund					1,510				10,646
			AllianceBernstein Funds				AllianceBernstein Small Cap Value Fund					1,081				11,672
			American Funds Group				AMCAP Fund Inc. Class A Fund					3,087				46,004
			American Funds Group				American Balanced Fund Class A					3,081				44,424
			American Funds Group				American High Income Fund Class A					245				2,533
			American Funds Group				American Mutual Fund Inc. Class A					1,266				25,722
			Calamos Funds				Calamos Convertible Growth and Income Fund					757				16,809

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The H&R Block Retirement Savings Plan
EIN: 43-1910017, Plan Number: 002
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002

															(e)
			(b)				(c)				Shares Held				Current
(a)			Identity of Issuer or Borrower				Description of Investment				or Interest Rate				Value
			Calamos Funds				Calamos Growth Fund					2,235				70,299
			American Funds Group				Capital Income Builder Fund					63				2,590
			Credit Suisse				Credit Suisse Small Company Fund					235				4,050
			Davis Funds				Davis New York Venture Fund					95				1,989
			Delaware Investments				Delaware Real Estate Trust Fund					68				983
			Delaware Investments				Delaware Technology & Innovation Fund					4,237				4,788
			Dreyfus				Dreyfus Index Fund					424				10,843
			Eaton Vance Group				Eaton Vance Worldwide Health Fund					1,088				8,320
			Eaton Vance Group				Eaton Vance Asian Fund					140				2,768
			American Funds Group				EuroPacific Growth Fund					285				6,544
			Excelsior Funds				Excelsior Funds Value Fund					320				7,837
			Franklin Templeton Investments				Franklin Income Fund					12,944				25,759
			Franklin Templeton Investments				Franklin Custodial Utilities Fund					1,354				11,211
			Franklin Templeton Investments				Franklin Custodial Growth Fund					710				16,895
			Franklin Templeton Investments				Franklin Custodial US Government Fund					1,285				7,553
			Franklin Templeton Investments				Franklin Equity Capital Growth					4,407				35,388
			Franklin Templeton Investments				Franklin Gold Fund					8,739				112,569
			Franklin Templeton Investments				Franklin High Income Fund					32,366				54,052
			Franklin Templeton Investments				Franklin Investment US Government Fund					1,817				16,969
			Franklin Templeton Investments				Franklin Investment Securities Fund					148				2,332
			Franklin Templeton Investments				Franklin Rising Dividends Fund					4,931				119,031
			Franklin Templeton Investments				Franklin Real Estate Securities Fund					3,851				62,085
			Franklin Templeton Investments				Franklin Small Mid Cap Fund					656				14,390
			Franklin Templeton Investments				Franklin Strategic Fund					2,190				32,460
			Franklin Templeton Investments				Franklin Strategic Services Fund					2,199				12,312
			Franklin Templeton Investments				Franklin Value Investments Fund					192				7,104

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The H&R Block Retirement Savings Plan
EIN: 43-1910017, Plan Number: 002
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002

															(e)
			(b)				(c)				Shares Held				Current
(a)			Identity of Issuer or Borrower				Description of Investment				or Interest Rate				Value
			Franklin Templeton Investments				Franklin Small Cap Fund					67				1,541
			American Funds Group				Fundamental Investors Fund					4,179				92,893
			GE Funds				GE Small Cap Value Fund					1,804				21,070
			Gabelli Funds				Gabelli Gold Fund					8,322				102,199
			American Funds Group				Growth Fund of America					6,489				119,852
			John Hancock Funds				John Hancock Investment Fund					10,889				150,377
			John Hancock Funds				John Hancock Bond Fund					1,288				5,343
			John Hancock Funds				John Hancock High Income Fund					563				5,193
			Oakmark Funds				Oakmark Investments Fund					753				22,648
			Oakmark Funds				Oakmark International Investments Fund					462				6,069
			Oakmark Funds				Oakmark Equity Income Fund					735				13,223
			ING Funds				ING Mid Cap Value Fund					753				5,197
			ING Funds				ING Russia Fund					1,129				13,927
			ING Funds				ING Global Technology Fund					590				1,999
			American Funds Group				Income Fund of America					1,830				26,256
			American Funds Group				Investment Company of America Fund					1,878				44,094
			Janus				Janus Growth & Income Fund					169				3,946
			John Hancock Funds				John Hancock Technology Fund					2,667				6,587
			Liberty Financial Funds				Liberty Acorn Fund					536				8,226
			Lord Abbett Family of Funds				Lord Abbett Mid-Cap Value A Fund					1,261				19,404
			MFS Family of Funds				MFS Government Securities Fund					128				1,282
			MFS Family of Funds				MFS Mid Cap Growth Fund					894				5,063
			The Munder Funds				Munder Healthcare Fund					344				4,911
			The Munder Funds				Munder Future Income Fund					8,256				22,704
			The Munder Funds				Munder Power Plus Fund					2,419				14,154
			Navellier Performance Funds				Navellier Aggressive Growth Fund					467				4,192

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The H&R Block Retirement Savings Plan
EIN: 43-1910017, Plan Number: 002
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002

															(e)
			(b)				(c)				Shares Held				Current
(a)			Identity of Issuer or Borrower				Description of Investment				or Interest Rate				Value
			American Funds Group				New Perspective Fund					1,259				22,720
			American Funds Group				New World Fund					90				1,750
			One Group				One Group Small Cap Fund					713				11,621
			One Group				One Group Market Expansion Fund					115				852
			OppenheimerFunds				Oppenheimer Main Street Fund					3,696				100,093
			OppenheimerFunds				Oppenheimer Quest Balanced Value Fund					333				4,207
			OppenheimerFunds				Oppenheimer Gold & Special Minerals Fund					9,968				138,558
			PBHG Funds				PBHG Clipper Focus Fund					244				3,223
			PBHG Funds				PBHG Small Cap Fund					178				2,505
			PIMCO Funds				PIMCO PEA Renaissance Fund					4,143				60,237
			PIMCO Funds				PIMCO PEA Growth Fund					2,083				31,896
			PIMCO Funds				PIMCO Low Duration Fund					333				3,422
			PIMCO Funds				PIMCO Total Return Fund					666				7,102
			PIMCO Funds				PIMCO Real Return Fund					3,131				35,259
			Pioneer Group				Pioneer Science & Technology Fund					6,813				15,601
			Putnam Funds				Putnam International Fund					1,203				9,408
			Putnam Funds				Putnam International Growth Fund					497				8,149
			Rydex Funds				Rydex Dynamic Venture Fund					589				42,255
			Rydex Funds				Rydex Ursa Fund					1,564				20,000
			Rydex Funds				Rydex Dynamic Velocity Fund					12,883				130,249
			Rydex Funds				Rydex Tempest 500 Fund					582				54,281
			Rydex Funds				Rydex Dynamic Titan Fund					3,672				77,773
			Rydex Funds				Rydex Telecommunications Investment Fund					11,838				127,846
			Seligman Group				Seligman Communications Fund					747				12,068
			Babson Fund Group				Shadow Stock Fund Inc.					425				5,036

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The H&R Block Retirement Savings Plan
EIN: 43-1910017, Plan Number: 002
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2002

															(e)
			(b)				(c)				Shares Held				Current
(a)			Identity of Issuer or Borrower				Description of Investment				or Interest Rate				Value
			American Funds Group				Small Cap World Fund					46				812
			Turner Funds				Turner Small Cap Value Fund					306				4,727
			Franklin Templeton Investments				Templeton Developing Markets Fund					17,989				179,891
			Franklin Templeton Investments				Templeton World Fund					12,234				157,693
			Franklin Templeton Investments				Templeton Foreign Fund					25,074				208,366
			Franklin Templeton Investments				Templeton Growth Fund					1,460				23,262
			Franklin Templeton Investments				Templeton Global Fund					3,828				39,045
			Franklin Templeton Investments				Templeton Global Bond Fund					3,080				27,626
			Vanguard Group				Vanguard Explorer Fund					110				4,999
			Vanguard Group				Vanguard Institutional Index 500					18				1,493
			Vanguard Group				Vanguard Index Small Cap Fund					89				1,396
			Delaware Investments				Voyageur Mutual Fund					302				4,580
			American Funds Group				Washington Mutual Investment Fund					1,079				25,363
			Westcore Funds				Westcore Growth Fund					1,022				8,671
			The Reserve Funds				Reserve Funds Primary Fund					741,863				741,863
																4,778,244
Plan participants							Participant Loans, 5.6% to 11.0% per annum									4,264,271
Total investments															$	233,383,741

Column (d) omitted as cost information is not required for participant directed assets.

*		Indicates party-in-interest to the Plan.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

		H&R Block Retirement Savings Plan
Date    June 30, 2003		By:		/s/ FRANK J. COTRONEO
				Frank J. Cotroneo
				Chief Financial Officer
				H&R Block, Inc.

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Exhibit Index

Exhibits
Consent of Independent Accountants (Exhibit 23)			19
Certification pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 (Exhibit 99.1)			20

18

 

EXHIBIT 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-56400) of H&R Block, Inc. of our report dated June 27, 2003 relating to the financial statements of the H&R Block Retirement Savings Plan, which appears in this Form 11-K.

PricewaterhouseCoopers LLP

Kansas City, Missouri
June 30, 2003

19

 

EXHIBIT 99.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the annual report of H&R Block Retirement Savings Plan (the “Plan”) on Form 11-K for the period ended December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all material respects, the net assets available for benefits and changes in net assets available for benefits of the Plan.

		HRB Management, Inc.
	By:	/s/ Frank J. Cotroneo           Frank J. Cotroneo Chief Financial Officer June 30, 2003

20