UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 9, 2004
H&R BLOCK, INC.
Missouri | 1-6089 | 44-0607856 | ||
(State of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
4400 Main Street, Kansas City, MO | 64111 | |
(Address of Principal Executive Offices) | (Zip Code) |
(816) 753-6900
Not Applicable
Item 12. Results of Operations and Financial Condition. | ||||||||
SIGNATURES | ||||||||
EXHIBIT INDEX | ||||||||
Press Release |
Item 12. Results of Operations and Financial Condition.
On June 9, 2004, H&R Block, Inc. (the Company) issued a press release regarding the Companys results of operations for the fiscal year ended April 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
H&R BLOCK, INC. | ||||
Date: June 10, 2004
|
By: | /s/ Bret G. Wilson | ||
Bret G. Wilson | ||||
Vice President and Secretary |
Exhibit 99.1
News Release
For Further Information
Media Relations:
Bob Schneider, 816.932.4835, bschneider@hrblock.com
Investor Relations:
Mark Barnett, 816.701.4443, marbarnett@hrblock.com
H&R BLOCK REPORTS RECORD ANNUAL REVENUES AND EARNINGS
Company Announces Dividend and Share Repurchases Authorization
Increases
FOR RELEASE JUNE 9, 2004 4 P.M. EDT
KANSAS CITY, Mo. H&R Block Inc. (NYSE: HRB) today reported record revenues and net income for both its fourth quarter and fiscal year ended April 30.
Fourth quarter revenues totaled $2.2 billion, a 14.8 percent increase over the fourth quarter last year. Consolidated net income for the quarter increased 16.4 percent to $575.6 million. Fourth quarter earnings per diluted share increased 19.2 percent to $3.23.
Fiscal year revenues increased 12.3 percent to $4.2 billion. Consolidated net income for the fiscal year increased 20.3 percent to $697.9 million. Earnings per diluted share increased 23.8 percent to $3.90, excluding a change in accounting principle. After the change in accounting principle, earnings per share increased 22.5 percent to $3.86. The company adopted Emerging Issues Task Force No. 00-21 (EITF 00-21) in its second quarter.
Fourth quarter results completed a year that saw record revenues, record earnings and balanced growth from our mix of businesses, said H&R Block Chairman and Chief Executive Officer Mark A. Ernst. We experienced improved results across all business lines in our fourth quarter.
H&R Blocks combined annual growth rate for earnings per share has increased 29 percent in the past five years. Our mix of businesses has generated solid results, even in challenging business environments, Ernst said.
H&R Block began to expense the costs of all stock-based compensation at the beginning of fiscal year 2004. The fiscal year results include $25.7 million, or 9 cents per diluted share, in stock-based compensation expense, compared with $2.1 million last year.
- more -
Fiscal 2005 Outlook
Next year, we expect earnings per share in the range of $4.00 to $4.25 per share. We expect solid growth in our mix of businesses. We continue to believe that, over the long-term, the companys mix of businesses can generate earnings consistent with our long-term guidance of earnings per share growth in the range of 13 to 18 percent per year, Ernst said.
A changing interest rate environment will likely result in a flattening or slight decline in mortgage earnings, which will partially offset solid earnings growth in our other businesses, he said.
Board Actions
Reflecting the companys strong financial condition and continuing performance, H&R Blocks board of directors approved an increase of the quarterly cash dividend from 20 cents to 22 cents per share, a ten percent increase, effective with the quarterly dividend payment on Oct. 1, 2004 to shareholders of record on Sept. 10, 2004. This payment will be the companys 168th consecutive quarterly dividend.
Also, the board authorized the company to repurchase up to 15 million of its shares, in addition to the 11.3 million shares remaining at year end on its previous repurchase authorization from June 11, 2003.
In the past year, the company has returned significant value to shareholders by repurchasing $518.5 million, or 10.6 million, of its shares, Ernst said. The new repurchase authorization reflects the confidence that the board of directors has in H&R Blocks future. Given our strong cash position, share repurchase continues to be a great way for us to enhance shareholder value.
During the fourth quarter, the company repurchased 2.8 million shares at an average cost of $52.77 per share.
U.S. Tax Operations
For the fiscal year, U.S. tax operations reported pretax income of $627.6 million, an increase of 14.7 percent from pretax income of $547.1 million in fiscal 2003.
U.S. tax operations reported a 3.2 percent increase in fourth quarter pretax income, which totaled $783.5 million, up from $759.3 million in the fourth quarter of fiscal 2003.
The segments revenues for the year increased 12.5 percent to $2.1 billion. The increase was driven by an 8 percent increase in the average fee per client served, the acquisition of former major franchise territories during fiscal year 2004, and a change from last years contractual agreement with Household Taxmasters Inc. that resulted in increased revenues from refund anticipation loan (RAL) participation.
The segment reported $1.5 billion in revenues for the fourth quarter, an increase of 10.1 percent compared with last years fourth quarter.
We improved client satisfaction with our combination of financial information and tax services, which is a unique value of the H&R Block brand. And we made solid progress with our multi-channel strategy. The number of software and online clients increased 12.2 percent to 3.2 million, with the fastest growth in tax solutions that blend the services of a tax professional with software and online products, Ernst said.
While were disappointed in the 0.8 percent decline in clients served, we understand the factors behind the decline and are taking steps to strengthen our market position. We will open 500 to 600 new offices in underserved areas where we could not provide the convenience clients wanted. And we are reviewing our marketing plans to identify the best mix of messages, products and services to drive client growth in the early part of tax season.
Mortgage Operations
Mortgage operations, which includes Option One Mortgage Corp. and H&R Block Mortgage Corp., reported fourth quarter pretax income of $175.9 million, a 34.4 percent increase, compared with $130.9 million in the fourth quarter last year.
For fiscal 2004, the mortgage segment reported pretax income of $678.3 million, a 2.3 percent decrease compared with $694.0 million in pretax income in fiscal 2003.
Fourth quarter revenues grew 28.4 percent to $344.3 million, up from $268.3 million the prior year. Fiscal 2004 revenues increased 10 percent to $1.3 billion, up from $1.2 billion in fiscal 2003.
For fiscal 2004, gains on sales of mortgage loans increased 8 percent to $716.7 million, compared with $663.6 million in fiscal 2003. In fiscal year 2003, the company reported a $130.9 million gain on the sale of previously securitized residual interests, compared to $40.7 million in the current year. Net of $30.7 million in impairments of older residuals, compared with $54.1 million in 2003, the mortgage segments total gains on sales were $726.7 million for fiscal 2004, compared to $740.3 million in the prior year.
Loan production increased to $23.3 billion in fiscal 2004, a 40.3 percent increase over the previous year. An increase in the number of loan specialists, improvements in the companys closing ratio, and a 4.9 percent increase in the average loan size all contributed to this growth.
Included within these results, H&R Block Mortgage Corp., H&R Blocks retail mortgage subsidiary, originated 6.4 percent more loans, 48.9 percent of which were made to retail clients of other H&R Block businesses.
The mortgage business performed as we expected it would. We saw continued growth in mortgage originations and lower margins due to the anticipated increase in interest rates, Ernst said.
Originations have been strong across all of our origination channels, and loan performance has exceeded modeled expectations. We continue to manage our mortgage business to optimize cash earnings, and we remain confident that mortgage operations will continue to perform well, he said.
Option Ones mortgage servicing business increased the number of loans serviced 31.6 percent to 324,364. The servicing portfolio at year-end increased 44.7 percent to $45.3 billion, compared with last years portfolio.
The segments residual interests continued to perform better than expected, primarily due to better than modeled credit losses and interest rates. Consequently, the company realized a net write-up to residual balances of $167.1 million during fiscal year 2004, including $67.1 million in the fourth quarter, which was recorded in other comprehensive income on the balance sheet, net of deferred taxes.
Business Services
RSM McGladrey Business Services, Inc. reported fourth quarter pretax earnings of $26.8 million, compared with a net loss of $1.9 million in the same quarter last year. For fiscal 2004, the segment reported pretax earnings of $19.3 million, compared with a net loss of $14.1 million in 2003.
In the fourth quarter, the business services segment reported revenues of $179.4 million, an increase of 28 percent. For the fiscal year, revenues increased 15 percent to $499.2 million.
We are beginning to realize the potential that exists in this business segment. Our capital markets business enjoyed a strong year, and an improving economic environment for our middle market clients resulted in higher revenues in our core accounting and tax services, Ernst said.
Fiscal year 2003 includes a goodwill impairment charge of $11.8 million related to the segments payroll and benefits processing company. The segment wrote off $576,000 in intangible assets in the fourth quarter of 2004.
Investment Services
Investment services reported a fourth quarter pretax loss of $22.5 million, an improvement of $13.3 million from a fourth quarter loss last year of $35.8 million. For the fiscal year, investment services recorded a pretax loss of $64.4 million, an improvement of $63.8 million compared with a loss of $128.3 million in fiscal 2003. Fiscal year 2003 results include $24 million of goodwill impairment charges.
Investment services reported fourth quarter revenues of $62 million, a 40.8 percent increase from the same quarter last year. Revenues for the fiscal year increased 14.3 percent to $229.5 million.
We see continued improvement in H&R Block Financial Advisors results. We believe that this business has been restructured in a way that allows us to compete effectively as the investment climate improves, Ernst said.
The retention and recruitment of experienced advisors continues to be a key initiative in the upcoming year, along with building stronger links between financial advisors and tax professionals in our U.S. tax operations.
Other
The company will host a conference call for analysts and institutional investors at 5 p.m. EDT (4 p.m. CDT) June 9. Ernst and Jeff Yabuki, executive vice president and chief operating officer, will discuss the quarter and year-end results and future expectations, as well as respond to analysts questions. To access the call, please dial the number approximately five to 10 minutes prior to the scheduled starting time:
U.S./Canada (888) 425-2715
International (706) 679-8257
The call will be Webcast in a listen-only format for the media and public. The link to the Webcast can be obtained at www.hrblock.com. Supplemental slides will be available in connection with the Webcast, or can be accessed directly on H&R Blocks Investor Relations website at www.hrblock.com/about/investor following market close.
A replay of the call will be available beginning at 8 p.m. EDT June 9 until 8 p.m. EDT June 23, by dialing 800-642-1687 (U.S./Canada) or 706-645-9291 (International). The replay access code is 6540535. A replay of the Webcast will also be available on the companys Web site at www.hrblock.com through June 30.
###
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 uncertainty that the company will achieve or exceed its revenue, earnings, and earnings per share growth goals or expectations for fiscal year 2005; the uncertainty of the companys ability to purchase shares of its common stock pursuant to the boards authorization; the uncertainty of the effect of any share repurchases upon the company and its shareholders; changes in interest rates; changes in economic, political or regulatory environments; changes in competition; litigation involving the company and its subsidiaries; 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. (www.hrblock.com) is a diversified company with subsidiaries that deliver tax services and financial advice, investment and mortgage products and
services, and business accounting and consulting services. The worlds largest tax preparation company, H&R Block in fiscal year 2004 served 21.6 million clients at more than 11,000 retail offices worldwide and with software and online services. H&R Block is the only major tax preparation and financial services company that focuses primarily on helping middle-income Americans achieve their financial objectives. 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 Corp. offers retail mortgage products. Option One Mortgage Corp offers wholesale mortgage products and a range of mortgage services. RSM McGladrey Inc. serves mid-sized businesses with accounting, tax and consulting services.
H&R BLOCK, INC.
KEY OPERATING RESULTS
Unaudited, amounts in thousands, except per share data
Three months ended April 30, |
|||||||||
2004 |
2003 |
||||||||
Revenues |
$ | 2,191,793 | $ | 1,909,755 | |||||
Income before taxes |
952,074 | 842,294 | |||||||
Net income |
$ | 575,635 | $ | 494,642 | |||||
Basic earnings per share |
$ | 3.30 | $ | 2.76 | |||||
Basic shares outstanding |
174,300 | 179,314 | |||||||
Diluted earnings per share |
$ | 3.23 | $ | 2.71 | |||||
Diluted shares outstanding |
178,194 | 182,615 |
Year ended April 30, |
|||||||||
2004 |
2003 |
||||||||
Revenues |
$ | 4,205,570 | $ | 3,746,457 | |||||
Income before taxes |
1,164,157 | 987,077 | |||||||
Net income before change in accounting principle |
704,256 | 580,064 | |||||||
Cumulative effect of change in accounting principle, net of taxes |
(6,359 | ) | | ||||||
Net income |
$ | 697,897 | $ | 580,064 | |||||
Basic earnings per share: |
|||||||||
Before change in accounting principle |
$ | 3.98 | $ | 3.23 | |||||
Net income |
$ | 3.94 | $ | 3.23 | |||||
Basic shares outstanding |
177,076 | 179,638 | |||||||
Diluted earnings per share: |
|||||||||
Before change in accounting principle |
$ | 3.90 | $ | 3.15 | |||||
Net income |
$ | 3.86 | $ | 3.15 | |||||
Diluted shares outstanding |
180,802 | 184,078 |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In the second quarter of fiscal year 2004, the Company adopted Emerging Issues Task Force Issue No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21) as of May 1, 2003. As a result of the adoption of EITF 00-21, the Company recorded a cumulative effect of a change in accounting principle of $6.4 million, net of taxes of $4.0 million.
Basic earnings per share is based on the weighted average number of shares outstanding. The dilutive effect of potential common shares is included in diluted earnings per share.
Certain reclassifications have been made to prior year amounts to conform to the current period presentation. These reclassifications had no effect on the results of operations or stockholders equity as previously reported.
H&R BLOCK, INC.
SEGMENT FINANCIAL RESULTS
Unaudited, amounts in thousands
Three months ended April 30, |
||||||||||||||||
Revenues |
Income (loss) |
|||||||||||||||
2004 |
2003 |
2004 |
2003 |
|||||||||||||
U.S. Tax Operations |
$ | 1,542,260 | $ | 1,401,120 | $ | 783,466 | $ | 759,270 | ||||||||
Mortgage Operations |
344,347 | 268,285 | 175,930 | 130,879 | ||||||||||||
Business Services |
179,394 | 140,202 | 26,777 | (1,863 | ) | |||||||||||
Investment Services |
62,027 | 44,057 | (22,542 | ) | (35,804 | ) | ||||||||||
International Tax Operations |
62,157 | 56,694 | 23,359 | 22,900 | ||||||||||||
Corporate Operations |
1,608 | (603 | ) | (34,916 | ) | (33,088 | ) | |||||||||
$ | 2,191,793 | $ | 1,909,755 | 952,074 | 842,294 | |||||||||||
Income taxes |
376,439 | 347,652 | ||||||||||||||
Net income |
$ | 575,635 | $ | 494,642 | ||||||||||||
Year ended April 30, |
||||||||||||||||
Revenues |
Income (loss) |
|||||||||||||||
2004 |
2003 |
2004 |
2003 |
|||||||||||||
U.S. Tax Operations |
$ | 2,093,617 | $ | 1,861,681 | $ | 627,592 | $ | 547,078 | ||||||||
Mortgage Operations |
1,281,399 | 1,165,411 | 678,261 | 693,950 | ||||||||||||
Business Services |
499,210 | 434,140 | 19,321 | (14,118 | ) | |||||||||||
Investment Services |
229,470 | 200,794 | (64,446 | ) | (128,292 | ) | ||||||||||
International Tax Operations |
97,560 | 85,082 | 11,097 | 10,464 | ||||||||||||
Corporate Operations |
4,314 | (651 | ) | (107,668 | ) | (122,005 | ) | |||||||||
$ | 4,205,570 | $ | 3,746,457 | 1,164,157 | 987,077 | |||||||||||
Income taxes |
459,901 | 407,013 | ||||||||||||||
Net income before change in accounting principle |
704,256 | 580,064 | ||||||||||||||
Cumulative effect of change in accounting principle, net of taxes |
(6,359 | ) | | |||||||||||||
Net income |
$ | 697,897 | $ | 580,064 | ||||||||||||
H&R BLOCK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Amounts in thousands, except share data
April 30, | April 30, | |||||||
2004 |
2003 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 1,071,676 | $ | 875,353 | ||||
Cash and cash equivalents restricted |
545,428 | 438,242 | ||||||
Receivables from customers, brokers, dealers and clearing
organizations, net |
625,076 | 517,037 | ||||||
Receivables, net |
347,910 | 403,197 | ||||||
Prepaid expenses and other current assets |
371,209 | 391,402 | ||||||
Total current assets |
2,961,299 | 2,625,231 | ||||||
Residual interests in securitizations available-for-sale |
210,973 | 264,337 | ||||||
Beneficial interest in Trust trading |
137,757 | 122,130 | ||||||
Mortgage servicing rights |
113,821 | 99,265 | ||||||
Property and equipment, net |
279,220 | 288,594 | ||||||
Intangible assets, net |
325,829 | 341,865 | ||||||
Goodwill, net |
959,418 | 714,215 | ||||||
Other |
391,709 | 148,268 | ||||||
Total assets |
$ | 5,380,026 | $ | 4,603,905 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Current portion of long-term debt |
$ | 275,669 | $ | 55,678 | ||||
Accounts payable to customers, brokers and dealers |
1,065,793 | 862,694 | ||||||
Accounts payable, accrued expenses and other |
456,167 | 468,933 | ||||||
Accrued salaries, wages and payroll taxes |
268,747 | 210,629 | ||||||
Accrued income taxes |
405,667 | 299,262 | ||||||
Total current liabilities |
2,472,043 | 1,897,196 | ||||||
Long-term debt |
545,811 | 822,302 | ||||||
Other non-current liabilities |
465,163 | 220,698 | ||||||
Total liabilities |
3,483,017 | 2,940,196 | ||||||
Stockholders equity: |
||||||||
Common stock, no par, stated value $.01 per share |
2,179 | 2,179 | ||||||
Additional paid-in capital |
545,065 | 496,393 | ||||||
Accumulated other comprehensive income |
57,953 | 36,862 | ||||||
Retained earnings |
2,781,368 | 2,221,868 | ||||||
Less cost of 44,849,128 and 38,343,944 shares of
common stock in treasury |
(1,489,556 | ) | (1,093,593 | ) | ||||
Total stockholders equity |
1,897,009 | 1,663,709 | ||||||
Total liabilities and stockholders equity |
$ | 5,380,026 | $ | 4,603,905 | ||||
H&R BLOCK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited, amounts in thousands
Year ended April 30, |
||||||||
2004 |
2003 |
|||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 697,897 | $ | 580,064 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
172,038 | 161,821 | ||||||
Accretion of residual interests in securitizations |
(168,029 | ) | (145,165 | ) | ||||
Impairment of residual interests in securitizations |
30,661 | 54,111 | ||||||
Additions to trading securities residual interests in securitizations |
(327,996 | ) | (542,544 | ) | ||||
Proceeds from net interest margin transactions |
310,358 | 541,791 | ||||||
Realized gain on sale of previously securitized residuals |
(40,689 | ) | (130,881 | ) | ||||
Additions to mortgage servicing rights |
(84,274 | ) | (65,345 | ) | ||||
Amortization of mortgage servicing rights |
69,718 | 47,107 | ||||||
Net change in beneficial interest in Trust |
(15,627 | ) | (69,529 | ) | ||||
Cumulative effect of change in accounting principle |
6,359 | | ||||||
Impairment of goodwill |
| 35,777 | ||||||
Mortgage loans held for sale: |
||||||||
Originations and purchases |
(23,256,013 | ) | (16,577,621 | ) | ||||
Sales and principal repayments |
23,227,547 | 16,587,116 | ||||||
Other net changes in working capital, net of acquisitions |
304,857 | 214,123 | ||||||
Net cash provided by operating activities |
926,807 | 690,825 | ||||||
Cash flows from investing activities: |
||||||||
Available-for-sale securities: |
||||||||
Purchases of available-for-sale securities |
(11,434 | ) | (14,614 | ) | ||||
Cash received from residual interests in securitizations |
193,606 | 140,795 | ||||||
Cash received from sale of previously securitized residuals |
53,391 | 142,486 | ||||||
Sales of other available-for-sale securities |
14,377 | 14,081 | ||||||
Purchases of property and equipment, net |
(112,153 | ) | (150,897 | ) | ||||
Payments made for business acquisitions, net of cash acquired |
(280,865 | ) | (26,408 | ) | ||||
Other, net |
11,945 | 19,896 | ||||||
Net cash provided by (used in) investing activities |
(131,133 | ) | 125,339 | |||||
Cash flows from financing activities: |
||||||||
Repayments of notes payable |
(4,618,853 | ) | (9,925,516 | ) | ||||
Proceeds from issuance of notes payable |
4,618,853 | 9,925,516 | ||||||
Payments on acquisition debt |
(59,003 | ) | (57,469 | ) | ||||
Dividends paid |
(138,397 | ) | (125,898 | ) | ||||
Payments to acquire treasury shares |
(519,862 | ) | (317,570 | ) | ||||
Proceeds from issuance of common stock |
119,956 | 126,325 | ||||||
Other, net |
(2,045 | ) | (2,344 | ) | ||||
Net cash used in financing activities |
(599,351 | ) | (376,956 | ) | ||||
Net increase in cash and cash equivalents |
196,323 | 439,208 | ||||||
Cash and cash equivalents at beginning of the period |
875,353 | 436,145 | ||||||
Cash and cash equivalents at end of the period |
$ | 1,071,676 | $ | 875,353 | ||||
Supplementary cash flow data: |
||||||||
Income taxes paid |
$ | 329,752 | $ | 247,057 | ||||
Interest paid |
84,551 | 84,094 |
H&R BLOCK, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
Unaudited, amounts in thousands, except per share data
Three Months Ended | Year Ended | |||||||||||||||
April 30, |
April 30, |
|||||||||||||||
2004 |
2003 |
2004 |
2003 |
|||||||||||||
Revenues: |
||||||||||||||||
Service revenues |
$ | 1,694,888 | $ | 1,487,807 | $ | 2,740,983 | $ | 2,398,081 | ||||||||
Gain on sale of mortgage assets |
193,750 | 162,342 | 726,718 | 740,343 | ||||||||||||
Interest income |
102,602 | 69,009 | 379,064 | 297,185 | ||||||||||||
Product sales |
58,361 | 52,260 | 157,417 | 123,510 | ||||||||||||
Royalties |
135,472 | 131,577 | 184,882 | 174,659 | ||||||||||||
Other income |
6,720 | 6,760 | 16,506 | 12,679 | ||||||||||||
2,191,793 | 1,909,755 | 4,205,570 | 3,746,457 | |||||||||||||
Operating expenses: |
||||||||||||||||
Employee compensation and benefits |
751,272 | 605,841 | 1,610,103 | 1,387,731 | ||||||||||||
Occupancy and equipment |
131,393 | 122,318 | 384,622 | 345,960 | ||||||||||||
Depreciation and amortization |
49,541 | 47,083 | 172,038 | 161,821 | ||||||||||||
Marketing and advertising |
88,551 | 65,512 | 188,317 | 150,847 | ||||||||||||
Interest |
20,099 | 22,855 | 84,556 | 92,644 | ||||||||||||
Supplies, freight and postage |
37,839 | 33,276 | 89,189 | 88,748 | ||||||||||||
Impairment of goodwill |
| 11,777 | | 35,777 | ||||||||||||
Other |
166,403 | 161,058 | 522,442 | 502,687 | ||||||||||||
1,245,098 | 1,069,720 | 3,051,267 | 2,766,215 | |||||||||||||
Operating income |
946,695 | 840,035 | 1,154,303 | 980,242 | ||||||||||||
Other income, net |
5,379 | 2,259 | 9,854 | 6,835 | ||||||||||||
Income before taxes |
952,074 | 842,294 | 1,164,157 | 987,077 | ||||||||||||
Income taxes |
376,439 | 347,652 | 459,901 | 407,013 | ||||||||||||
Net income before cumulative effect of
change in accounting principle |
575,635 | 494,642 | 704,256 | 580,064 | ||||||||||||
Cumulative effect of change in accounting principle
for multiple deliverable revenue arrangements,
less income taxes of $4,031 |
| | (6,359 | ) | | |||||||||||
Net income |
$ | 575,635 | $ | 494,642 | $ | 697,897 | $ | 580,064 | ||||||||
Basic earnings per share: |
||||||||||||||||
Before change in accounting principle |
$ | 3.30 | $ | 2.76 | $ | 3.98 | $ | 3.23 | ||||||||
Cumulative effect of change in accounting |
| | (0.04 | ) | | |||||||||||
Net income |
$ | 3.30 | $ | 2.76 | $ | 3.94 | $ | 3.23 | ||||||||
Basic shares outstanding |
174,300 | 179,314 | 177,076 | 179,638 | ||||||||||||
Diluted earnings per share: |
||||||||||||||||
Before change in accounting principle |
$ | 3.23 | $ | 2.71 | $ | 3.90 | $ | 3.15 | ||||||||
Cumulative effect of change in accounting |
| | (0.04 | ) | | |||||||||||
Net income |
$ | 3.23 | $ | 2.71 | $ | 3.86 | $ | 3.15 | ||||||||
Diluted shares outstanding |
178,194 | 182,615 | 180,802 | 184,078 |
H&R BLOCK, INC.
SELECTED OPERATING DATA
Unaudited
Option One Mortgage Corporation | Year ended |
Three months ended |
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4/30/2004 |
4/30/2004 |
4/30/2003 |
% change |
1/31/2004 |
||||||||||||||||
Number of loans originated: |
||||||||||||||||||||
Wholesale (non-prime) |
130,356 | 34,951 | 26,126 | 33.8 | % | 30,678 | ||||||||||||||
Retail: Prime |
9,763 | 2,523 | 3,813 | -33.8 | % | 1,291 | ||||||||||||||
Non-prime |
15,220 | 4,281 | 2,566 | 66.8 | % | 3,826 | ||||||||||||||
Total |
155,339 | 41,755 | 32,505 | 28.5 | % | 35,795 | ||||||||||||||
Volume of loans originated (000s): |
||||||||||||||||||||
Wholesale (non-prime) |
$ | 20,150,992 | $ | 5,410,469 | $ | 3,981,480 | 35.9 | % | $ | 4,732,182 | ||||||||||
Retail: Prime |
1,258,347 | 312,923 | 503,130 | -37.8 | % | 157,438 | ||||||||||||||
Non-prime |
1,846,674 | 523,438 | 305,841 | 71.1 | % | 464,926 | ||||||||||||||
Total |
$ | 23,256,013 | $ | 6,246,830 | $ | 4,790,451 | 30.4 | % | $ | 5,354,546 | ||||||||||
Loan sales |
$ | 23,234,935 | $ | 6,294,346 | $ | 4,813,186 | 30.8 | % | $ | 5,308,800 | ||||||||||
Servicing portfolio: |
||||||||||||||||||||
Number of loans serviced |
324,364 | 324,364 | 246,463 | 31.6 | % | 308,305 | ||||||||||||||
Servicing portfolio ($ bns) |
$ | 45.3 | $ | 45.3 | $ | 31.3 | 44.7 | % | $ | 42.2 |
H&R Block Financial Advisors, Inc. | Year ended |
Three months ended |
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4/30/2004 |
4/30/2004 |
4/25/2003 |
% change |
1/31/2004 |
||||||||||||||||
Customer trades |
1,514,969 | 390,750 | 244,843 | 59.6 | % | 413,338 | ||||||||||||||
Customer daily average trades |
5,918 | 6,202 | 4,221 | 46.9 | % | 6,776 | ||||||||||||||
Average revenue per trade |
$ | 119.36 | $ | 121.58 | $ | 128.89 | -5.7 | % | $ | 113.61 | ||||||||||
Number of active accounts |
863,116 | 863,116 | 752,903 | 14.6 | % | 741,824 | ||||||||||||||
Ending balance of assets under administration ($ bns) |
$ | 26.7 | $ | 26.7 | $ | 22.3 | 19.7 | % | $ | 27.5 | ||||||||||
Average assets per active account |
$ | 30,970 | $ | 30,970 | $ | 29,616 | 4.6 | % | $ | 37,122 | ||||||||||
Ending customer margin balances ($ millions) |
$ | 608 | $ | 608 | $ | 486 | 25.1 | % | $ | 594 | ||||||||||
Ending payables to customers ($ millions) |
$ | 1,007 | $ | 1,007 | $ | 848 | 18.8 | % | $ | 1,076 |