Missouri
(State of Incorporation)
|
1-6089
(Commission File Number)
|
44-0607856
(I.R.S. Employer
Identification Number)
|
(d)
|
Exhibits
|
Exhibit Number
|
Description
|
H&R BLOCK, INC.
|
|
Date: December 6, 2012
|
By: /s/ Scott W. Andreasen
|
Scott W. Andreasen
|
|
Vice President and Secretary
|
§
|
Total revenues grew 6 percent to $137 million due primarily to a strong tax season in Australia
|
§
|
Net loss from continuing operations improved 18 percent to $101 million, or $0.37 per share2
|
§
|
Adjusted net loss from continuing operations improved 11 percent to $100 million, or $0.37 per share
|
§
|
The company remains on pace to deliver $85 to $100 million of pretax earnings from cost reduction initiatives in fiscal 2013
|
Actual
|
Adjusted*
|
|||||
in millions, except EPS
|
Q2
FY13
|
Q2
FY12
|
Change
|
Q2
FY13
|
Q2
FY12
|
Change
|
Revenue
|
$137
|
$129
|
6%
|
$137
|
$129
|
6%
|
EBITDA*
|
($117)
|
($159)
|
26%
|
($117)
|
($141)
|
17%
|
Pretax Income (Loss)
|
($162)
|
($204)
|
20%
|
($163)
|
($186)
|
13%
|
Net Income (Loss)
|
($101)
|
($123)
|
18%
|
($100)
|
($112)
|
11%
|
Shares Outstanding
|
271.1
|
299.9
|
-10%
|
271.1
|
299.9
|
-10%
|
EPS
|
($0.37)
|
($0.41)
|
10%
|
($0.37)
|
($0.37)
|
0%
|
§
|
Revenues grew by $9 million, or 7 percent, to $130 million, primarily due to an 8 percent increase in tax returns prepared in Australia
|
§
|
Pretax loss improved by 25 percent or $44 million, to $130 million
|
§
|
Adjusted pretax loss improved by 17 percent or $26 million, to $130 million primarily due to lower field wages and occupancy costs resulting from the company’s cost reduction initiatives
|
§
|
Revenues declined by $1 million due to lower interest income from H&R Block Bank’s shrinking mortgage loan portfolio
|
§
|
Pretax loss increased by $2 million, or 7 percent, to $32 million
|
§
|
Net loss improved by $15 million to $4 million, as prior year results included a $12 million after-tax provision for estimated losses on representation and warranty claims at Sand Canyon Corporation (SCC), a separate legal entity from H&R Block, Inc.
|
§
|
SCC received new claims during the quarter for alleged breaches of representations and warranties in the principal amount of $10 million
|
§
|
SCC reviewed claims in the principal amount of $257 million during the quarter; no losses were charged against SCC’s accrual for contingent losses related to representations and warranties during the quarter
|
§
|
$28 million of claims remained subject to review at Oct. 31, 2012
|
§
|
SCC’s accrual for contingent losses related to representations and warranties remained essentially unchanged at $129 million
|
Three months ended October 31,
|
||||||||
Revenues
|
Income (loss)
|
|||||||
2012
|
2011
|
2012
|
2011
|
|||||
Tax Services
|
$ 129,819
|
$ 121,018
|
$ (130,109)
|
$ (173,966)
|
||||
Corporate and Eliminations
|
7,444
|
8,176
|
(32,179)
|
(29,963)
|
||||
$ 137,263
|
$ 129,194
|
(162,288)
|
(203,929)
|
|||||
Income tax benefit
|
(61,089)
|
(80,916)
|
||||||
Net loss from continuing operations
|
(101,199)
|
(123,013)
|
||||||
Net loss from discontinued operations
|
(4,044)
|
(18,711)
|
||||||
Net loss
|
$ (105,243)
|
$ (141,724)
|
||||||
Basic and diluted loss per share:
|
||||||||
Net loss from continuing operations
|
$ (0.37)
|
$ (0.41)
|
||||||
Net loss from discontinued operations
|
(0.02)
|
(0.06)
|
||||||
Net loss
|
$ (0.39)
|
$ (0.47)
|
||||||
Basic and diluted shares
|
271,145
|
299,895
|
Six months ended October 31,
|
||||||||
Revenues
|
Income (loss)
|
|||||||
2012
|
2011
|
2012
|
2011
|
|||||
Tax Services
|
$ 220,072
|
$ 212,443
|
$ (271,014)
|
$ (343,449)
|
||||
Corporate and Eliminations
|
13,680
|
17,374
|
(60,543)
|
(61,081)
|
||||
$ 233,752
|
$ 229,817
|
(331,557)
|
(404,530)
|
|||||
Income tax benefit
|
(124,708)
|
(162,362)
|
||||||
Net loss from continuing operations
|
(206,849)
|
(242,168)
|
||||||
Net loss from discontinued operations
|
(5,835)
|
(74,654)
|
||||||
Net loss
|
$ (212,684)
|
$ (316,822)
|
||||||
Basic and diluted loss per share:
|
||||||||
Net loss from continuing operations
|
$ (0.76)
|
$ (0.80)
|
||||||
Net loss from discontinued operations
|
(0.02)
|
(0.25)
|
||||||
Net loss
|
$ (0.78)
|
$ (1.05)
|
||||||
Basic and diluted shares
|
274,150
|
302,693
|
October 31,
|
October 31,
|
April 30,
|
||||
2012
|
2011
|
2012
|
||||
ASSETS
|
||||||
Current assets:
|
||||||
Cash and cash equivalents
|
$ 1,260,901
|
$ 572,611
|
$ 1,944,334
|
|||
Cash and cash equivalents - restricted
|
38,667
|
37,524
|
48,100
|
|||
Receivables, net
|
124,511
|
128,062
|
193,858
|
|||
Prepaid expenses and other current assets
|
282,874
|
218,054
|
314,702
|
|||
Assets of discontinued operations, held for sale
|
-
|
729,153
|
-
|
|||
Total current assets
|
1,706,953
|
1,685,404
|
2,500,994
|
|||
Mortgage loans held for investment, net
|
370,850
|
450,137
|
406,201
|
|||
Investments in available-for-sale securities
|
388,640
|
306,310
|
371,315
|
|||
Property and equipment, net
|
285,335
|
257,870
|
252,985
|
|||
Intangible assets, net
|
262,296
|
262,106
|
264,451
|
|||
Goodwill
|
434,492
|
438,403
|
427,566
|
|||
Other assets
|
448,164
|
576,283
|
426,055
|
|||
Total assets
|
$ 3,896,730
|
$ 3,976,513
|
$ 4,649,567
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||
Current liabilities:
|
||||||
Customer banking deposits
|
$ 790,106
|
$ 723,318
|
$ 827,549
|
|||
Accounts payable, accrued expenses and other current liabilities
|
406,447
|
581,069
|
567,079
|
|||
Accrued salaries, wages and payroll taxes
|
39,345
|
46,588
|
163,992
|
|||
Accrued income taxes
|
95,126
|
135,858
|
336,374
|
|||
Commercial paper borrowings
|
-
|
39,990
|
-
|
|||
Current portion of long-term debt
|
600,678
|
30,735
|
631,434
|
|||
Federal Home Loan Bank borrowings
|
-
|
25,000
|
-
|
|||
Liabilities of discontinued operations, held for sale
|
-
|
199,030
|
-
|
|||
Total current liabilities
|
1,931,702
|
1,781,588
|
2,526,428
|
|||
Long-term debt
|
906,125
|
1,009,196
|
409,115
|
|||
Other noncurrent liabilities
|
365,970
|
322,907
|
388,132
|
|||
Total liabilities
|
3,203,797
|
3,113,691
|
3,323,675
|
|||
Stockholders' equity:
|
||||||
Common stock, no par, stated value $.01 per share
|
3,166
|
3,994
|
3,979
|
|||
Additional paid-in capital
|
748,298
|
799,270
|
796,784
|
|||
Accumulated other comprehensive income
|
8,685
|
4,359
|
12,145
|
|||
Retained earnings
|
795,707
|
2,080,162
|
2,523,997
|
|||
Less treasury shares, at cost
|
(862,923)
|
(2,024,963)
|
(2,011,013)
|
|||
Total stockholders' equity
|
692,933
|
862,822
|
1,325,892
|
|||
Total liabilities and stockholders' equity
|
$ 3,896,730
|
$ 3,976,513
|
$ 4,649,567
|
Three months ended October 31,
|
Six months ended October 31,
|
||||||||
2012
|
2011
|
2012
|
2011
|
||||||
Revenues:
|
|||||||||
Service revenues
|
$ 116,438
|
$ 109,983
|
$ 196,334
|
$ 193,003
|
|||||
Product and other revenues
|
10,966
|
9,290
|
17,686
|
16,553
|
|||||
Interest income
|
9,859
|
9,921
|
19,732
|
20,261
|
|||||
137,263
|
129,194
|
233,752
|
229,817
|
||||||
Expenses:
|
|||||||||
Cost of revenues:
|
|||||||||
Compensation and benefits
|
54,764
|
61,438
|
94,349
|
108,659
|
|||||
Occupancy and equipment
|
82,398
|
86,551
|
162,349
|
170,054
|
|||||
Depreciation and amortization of property and equipment
|
17,927
|
16,652
|
34,232
|
33,124
|
|||||
Provision for bad debt and loan losses
|
3,725
|
8,200
|
8,370
|
15,491
|
|||||
Interest
|
23,390
|
22,873
|
45,467
|
45,809
|
|||||
Other
|
29,807
|
31,899
|
60,668
|
67,060
|
|||||
212,011
|
227,613
|
405,435
|
440,197
|
||||||
Impairment of goodwill
|
-
|
4,257
|
-
|
4,257
|
|||||
Selling, general and administrative expenses
|
90,327
|
103,755
|
165,805
|
196,408
|
|||||
302,338
|
335,625
|
571,240
|
640,862
|
||||||
Operating loss
|
(165,075)
|
(206,431)
|
(337,488)
|
(411,045)
|
|||||
Other income, net
|
2,787
|
2,502
|
5,931
|
6,515
|
|||||
Loss from continuing operations before tax benefit
|
(162,288)
|
(203,929)
|
(331,557)
|
(404,530)
|
|||||
Income tax benefit
|
(61,089)
|
(80,916)
|
(124,708)
|
(162,362)
|
|||||
Net loss from continuing operations
|
(101,199)
|
(123,013)
|
(206,849)
|
(242,168)
|
|||||
Net loss from discontinued operations
|
(4,044)
|
(18,711)
|
(5,835)
|
(74,654)
|
|||||
Net loss
|
$ (105,243)
|
$ (141,724)
|
$ (212,684)
|
$ (316,822)
|
|||||
Basic and diluted loss per share:
|
|||||||||
Net loss from continuing operations
|
$ (0.37)
|
$ (0.41)
|
$ (0.76)
|
$ (0.80)
|
|||||
Net loss from discontinued operations
|
(0.02)
|
(0.06)
|
(0.02)
|
(0.25)
|
|||||
Net loss
|
$ (0.39)
|
$ (0.47)
|
$ (0.78)
|
$ (1.05)
|
|||||
Basic and diluted shares
|
271,145
|
299,895
|
274,150
|
302,693
|
Six months ended October 31,
|
|||||||||
2012
|
2011
|
||||||||
Net cash used in operating activities
|
$ (567,036)
|
$ (582,628)
|
|||||||
Cash flows from investing activities:
|
|||||||||
Purchases of available-for-sale securities
|
(67,474)
|
(155,159)
|
|||||||
Sales, maturities and payments received on available-for-sale securities
|
53,098
|
23,249
|
|||||||
Principal repayments on mortgage loans held for investment, net
|
23,608
|
22,978
|
|||||||
Purchases of property and equipment, net
|
(60,720)
|
(40,510)
|
|||||||
Payments made for acquisitions of businesses and intangibles, net
|
(10,442)
|
(8,164)
|
|||||||
Proceeds from sales of businesses, net
|
943
|
37,036
|
|||||||
Franchise loans:
|
|||||||||
Loans funded
|
(20,670)
|
(27,682)
|
|||||||
Payments received
|
8,303
|
7,447
|
|||||||
Other, net
|
9,275
|
13,685
|
|||||||
Net cash used in investing activities
|
(64,079)
|
(127,120)
|
|||||||
Cash flows from financing activities:
|
|||||||||
Repayments of commercial paper
|
-
|
(37,989)
|
|||||||
Proceeds from commercial paper
|
-
|
77,979
|
|||||||
Repayments of long-term debt
|
(30,831)
|
-
|
|||||||
Proceeds from issuance of long-term debt
|
497,185
|
-
|
|||||||
Customer banking deposits, net
|
(37,913)
|
(129,285)
|
|||||||
Dividends paid
|
(108,428)
|
(91,446)
|
|||||||
Repurchase of common stock, including shares surrendered
|
(339,919)
|
(180,222)
|
|||||||
Proceeds from exercise of stock options, net
|
1,288
|
(430)
|
|||||||
Other, net
|
(33,004)
|
(28,057)
|
|||||||
Net cash used in financing activities
|
(51,622)
|
(389,450)
|
|||||||
Effects of exchange rates on cash
|
(696)
|
(6,035)
|
|||||||
Net decrease in cash and cash equivalents
|
(683,433)
|
(1,105,233)
|
|||||||
Cash and cash equivalents at beginning of the period
|
1,944,334
|
1,677,844
|
|||||||
Cash and cash equivalents at end of the period
|
$ 1,260,901
|
$ 572,611
|
|||||||
Supplementary cash flow data:
|
|||||||||
Income taxes paid, net
|
$ 48,201
|
$ 122,832
|
|||||||
Interest paid on borrowings
|
42,106
|
27,748
|
|||||||
Interest paid on deposits
|
2,683
|
3,323
|
|||||||
Transfers of foreclosed loans to other assets
|
5,312
|
4,438
|
|||||||
Accrued additions to property and equipment
|
10,273
|
10,798
|
Three months ended October 31,
|
Six months ended October 31,
|
||||||||
EBITDA (1)
|
2012
|
2011
|
2012
|
2011
|
|||||
Net loss from continuing operations - as reported
|
$ (101,199)
|
$ (123,013)
|
$ (206,849)
|
$ (242,168)
|
|||||
Add back :
|
|||||||||
Income taxes
|
(61,089)
|
(80,916)
|
(124,708)
|
(162,362)
|
|||||
Interest expense
|
23,390
|
22,873
|
45,467
|
45,809
|
|||||
Depreciation and amortization
|
22,053
|
22,089
|
42,604
|
43,621
|
|||||
(15,646)
|
(35,954)
|
(36,637)
|
(72,932)
|
||||||
EBITDA of continuing operations
|
(116,845)
|
(158,967)
|
(243,486)
|
(315,100)
|
|||||
Adjustments:
|
|||||||||
Loss contingencies - litigation charges
|
(2,451)
|
8,193
|
(4,753)
|
23,357
|
|||||
Impairment of goodwill and intangibles
|
1,421
|
8,237
|
1,421
|
8,237
|
|||||
Severance
|
1,558
|
526
|
1,057
|
2,110
|
|||||
Loss (gain) on sales of tax offices
|
(754)
|
806
|
(524)
|
912
|
|||||
(226)
|
17,762
|
(2,799)
|
34,616
|
||||||
Adjusted EBITDA of continuing operations
|
$ (117,071)
|
$ (141,205)
|
$ (246,285)
|
$ (280,484)
|
Non-GAAP Pretax Results
|
|||||||||
Pretax loss from continuing operations - as reported
|
$ (162,288)
|
$ (203,929)
|
$ (331,557)
|
$ (404,530)
|
|||||
Add back :
|
|||||||||
Loss contingencies - litigation charges
|
(2,451)
|
8,193
|
(4,753)
|
23,357
|
|||||
Impairment of goodwill and intangibles
|
1,421
|
8,237
|
1,421
|
8,237
|
|||||
Severance
|
1,558
|
526
|
1,057
|
2,110
|
|||||
Loss (gain) on sales of tax offices
|
(754)
|
806
|
(524)
|
912
|
|||||
(226)
|
17,762
|
(2,799)
|
34,616
|
||||||
Pretax loss from continuing operations - as adjusted
|
$ (162,514)
|
$ (186,167)
|
$ (334,356)
|
$ (369,914)
|
|||||
Non-GAAP After-Tax Results
|
|||||||||
Net loss from continuing operations - as reported
|
$ (101,199)
|
$ (123,013)
|
$ (206,849)
|
$ (242,168)
|
|||||
Add back (net of tax) :
|
|||||||||
Loss contingencies - litigation charges
|
(1,506)
|
4,926
|
(2,906)
|
14,124
|
|||||
Impairment of goodwill and intangibles
|
869
|
4,981
|
869
|
4,981
|
|||||
Severance
|
951
|
315
|
646
|
1,276
|
|||||
Loss (gain) on sales of tax offices
|
(460)
|
487
|
(320)
|
551
|
|||||
Discrete tax items
|
1,472
|
79
|
4,173
|
(2,451)
|
|||||
1,326
|
10,788
|
2,462
|
18,481
|
||||||
Net loss from continuing operations - as adjusted
|
$ (99,873)
|
$ (112,225)
|
$ (204,387)
|
$ (223,687)
|
Three months ended October 31,
|
Six months ended October 31,
|
||||||||
Non-GAAP EPS
|
2012
|
2011
|
2012
|
2011
|
|||||
EPS from continuing operations - as reported
|
$ (0.37)
|
$ (0.41)
|
$ (0.76)
|
$ (0.80)
|
|||||
Add back :
|
|||||||||
Loss contingencies - litigation charges
|
(0.01)
|
0.02
|
(0.01)
|
0.05
|
|||||
Impairment of goodwill and intangibles
|
-
|
0.02
|
-
|
0.02
|
|||||
Severance
|
-
|
-
|
-
|
-
|
|||||
Loss (gain) on sales of tax offices
|
-
|
-
|
-
|
-
|
|||||
Discrete tax items
|
0.01
|
-
|
0.02
|
(0.01)
|
|||||
-
|
0.04
|
0.01
|
0.06
|
||||||
EPS from continuing operations - as adjusted
|
$ (0.37)
|
$ (0.37)
|
$ (0.75)
|
$ (0.74)
|
|||||
Non-GAAP Pretax Results - Tax Services segment
|
|||||||||
Pretax loss - as reported
|
$ (130,109)
|
$ (173,966)
|
$ (271,014)
|
$ (343,449)
|
|||||
Add back :
|
|||||||||
Loss contingencies - litigation charges
|
(2,451)
|
8,192
|
(4,753)
|
23,356
|
|||||
Impairment of goodwill and intangibles
|
1,421
|
8,237
|
1,421
|
8,237
|
|||||
Severance
|
1,593
|
526
|
1,092
|
2,110
|
|||||
Loss (gain) on sales of tax offices
|
(754)
|
806
|
(524)
|
912
|
|||||
(191)
|
17,761
|
(2,764)
|
34,615
|
||||||
Pretax loss - as adjusted
|
$ (130,300)
|
$ (156,205)
|
$ (273,778)
|
$ (308,834)
|
|||||
Supplemental Information
|
|||||||||
Stock-based compensation expense:
|
|||||||||
Pretax
|
$ 5,384
|
$ 4,486
|
$ 7,737
|
$ 7,824
|
|||||
After-tax
|
3,299
|
2,706
|
4,730
|
4,731
|
|||||
Amortization of intangible assets:
|
|||||||||
Pretax
|
$ 4,126
|
$ 5,435
|
$ 8,372
|
$ 10,497
|
|||||
After-tax
|
2,536
|
3,277
|
5,118
|
6,348
|
·
|
Bill Cobb, President and Chief Executive Officer
|
·
|
Jason Houseworth, President, U.S. Tax Services
|
·
|
Susan Ehrlich, President, Financial Services
|
·
|
Greg Macfarlane, Chief Financial Officer
|