16. Condensed Consolidating Financial Statements

Block Financial LLC (BFC) is an indirect, wholly-owned consolidated subsidiary of the Company. BFC is the Issuer and the Company is the Guarantor of the Senior Notes issued on January 11, 2008 and October 26, 2004, our CLOCs and other indebtedness issued from time to time. These condensed consolidating financial statements have been prepared using the equity method of accounting. Earnings of subsidiaries are, therefore, reflected in the Company's investment in subsidiaries account. The elimination entries eliminate investments in subsidiaries, related stockholders' equity and other intercompany balances and transactions.


Condensed Consolidating Statements of Operations								(in 000s)
Three months ended		H&R Block, Inc.			BFC			Other					Consolidated
October 31, 2011		(Guarantor)			(Issuer)			Subsidiaries			Elims		H&R Block
Total revenues	$	—		$	17,560		$	111,634		$	—	$	129,194
Cost of revenues		—			36,978			190,635			—		227,613
Selling, general and administrative		—			6,444			101,568			—		108,012
Total expenses		—			43,422			292,203			—		335,625
Operating loss		—			(25,862	)		(180,569	)		—		(206,431	)
Other income (expense), net		(203,929	)		3,065			(563	)		203,929		2,502
Loss from continuing operations before tax benefit		(203,929	)		(22,797	)		(181,132	)		203,929		(203,929	)
Income tax benefit		(80,916	)		(15,063	)		(65,853	)		80,916		(80,916	)
Net loss from continuing operations		(123,013	)		(7,734	)		(115,279	)		123,013		(123,013	)
Net income (loss) from discontinued operations		(18,711	)		(19,066	)		355			18,711		(18,711	)
Net loss	$	(141,724	)	$	(26,800	)	$	(114,924	)	$	141,724	$	(141,724	)


Three months ended		H&R Block, Inc.			BFC			Other						Consolidated
October 31, 2010		(Guarantor)			(Issuer)			Subsidiaries			Elims			H&R Block
Total revenues	$	—		$	17,320		$	102,270		$	—		$	119,590
Cost of revenues		—			35,959			196,016			—			231,975
Selling, general and administrative		—			9,379			65,604			—			74,983
Total expenses		—			45,338			261,620			—			306,958
Operating loss		—			(28,018	)		(159,350	)		—			(187,368	)
Other income (expense), net		(183,516	)		4,890			(1,038	)		183,516			3,852
Loss from continuing operations before tax benefit		(183,516	)		(23,128	)		(160,388	)		183,516			(183,516	)
Income tax benefit		(72,072	)		(7,654	)		(64,418	)		72,072			(72,072	)
Net loss from continuing operations		(111,444	)		(15,474	)		(95,970	)		111,444			(111,444	)
Net income (loss) from discontinued operations		2,395			(1,330	)		3,725			(2,395	)		2,395
Net loss	$	(109,049	)	$	(16,804	)	$	(92,245	)	$	109,049		$	(109,049	)



Six months ended		H&R Block, Inc.			BFC			Other					Consolidated
October 31, 2011		(Guarantor)			(Issuer)			Subsidiaries			Elims		H&R Block
Total revenues	$	—		$	39,333		$	190,484		$	—	$	229,817
Cost of revenues		—			74,640			365,557			—		440,197
Selling, general and administrative		—			14,339			186,326			—		200,665
Total expenses		—			88,979			551,883			—		640,862
Operating loss		—			(49,646	)		(361,399	)		—		(411,045	)
Other income (expense), net		(404,530	)		6,346			169			404,530		6,515
Loss from continuing operations before tax benefit		(404,530	)		(43,300	)		(361,230	)		404,530		(404,530	)
Income tax benefit		(162,362	)		(16,913	)		(145,449	)		162,362		(162,362	)
Net loss from continuing operations		(242,168	)		(26,387	)		(215,781	)		242,168		(242,168	)
Net loss from discontinued operations		(74,654	)		(20,703	)		(53,951	)		74,654		(74,654	)
Net loss	$	(316,822	)	$	(47,090	)	$	(269,732	)	$	316,822	$	(316,822	)


Six months ended		H&R Block, Inc.			BFC			Other					Consolidated
October 31, 2010		(Guarantor)			(Issuer)			Subsidiaries			Elims		H&R Block
Total revenues	$	—		$	38,320		$	181,105		$	—	$	219,425
Cost of revenues		—			74,987			382,663			—		457,650
Selling, general and administrative		—			11,469			148,093			—		159,562
Total expenses		—			86,456			530,756			—		617,212
Operating loss		—			(48,136	)		(349,651	)		—		(397,787	)
Other income (expense), net		(390,667	)		5,272			1,848			390,667		7,120
Loss from continuing operations before tax benefit		(390,667	)		(42,864	)		(347,803	)		390,667		(390,667	)
Income tax benefit		(151,415	)		(15,495	)		(135,920	)		151,415		(151,415	)
Net loss from continuing operations		(239,252	)		(27,369	)		(211,883	)		239,252		(239,252	)
Net income (loss) from discontinued operations		(478	)		(4,334	)		3,856			478		(478	)
Net loss	$	(239,730	)	$	(31,703	)	$	(208,027	)	$	239,730	$	(239,730	)


Condensed Consolidating Balance Sheets							(in 000s)
		H&R Block, Inc.		BFC			Other						Consolidated
October 31, 2011		(Guarantor)		(Issuer)			Subsidiaries			Elims			H&R Block
Cash & cash equivalents	$	—	$	380,692		$	192,199		$	(280	)	$	572,611
Cash & cash equivalents – restricted		—		922			36,602			—			37,524
Receivables, net		33		105,082			22,947			—			128,062
Mortgage loans held for investment		—		450,137			—			—			450,137
Intangible assets and goodwill, net		—		—			700,509			—			700,509
Investments in subsidiaries		2,121,899		—			516			(2,121,899	)		516
Assets held for sale		—		—			729,153			—			729,153
Other assets		10,775		528,281			818,945			—			1,358,001
Total assets	$	2,132,707	$	1,465,114		$	2,500,871		$	(2,122,179	)	$	3,976,513
Customer deposits	$	—	$	723,598		$	—		$	(280	)	$	723,318
Long-term debt		—		999,145			40,786			—			1,039,931
Commercial paper borrowings		—		39,990			—			—			39,990
FHLB borrowings		—		25,000			—			—			25,000
Liabilities held for sale		—		—			199,030			—			199,030
Other liabilities		191		(127,614	)		1,213,845			—			1,086,422
Net intercompany advances		1,269,694		24,060			(1,293,754	)		—			—
Stockholders' equity		862,822		(219,065	)		2,340,964			(2,121,899	)		862,822
Total liabilities and stockholders' equity	$	2,132,707	$	1,465,114		$	2,500,871		$	(2,122,179	)	$	3,976,513


		H&R Block, Inc.		BFC			Other						Consolidated
April 30, 2011		(Guarantor)		(Issuer)			Subsidiaries			Elims			H&R Block
Cash & cash equivalents	$	—	$	616,238		$	1,061,656		$	(50	)	$	1,677,844
Cash & cash equivalents – restricted		—		9,522			38,861			—			48,383
Receivables, net		88		102,011			128,073			—			230,172
Mortgage loans held for investment, net		—		485,008			—			—			485,008
Intangible assets and goodwill, net		—		—			709,491			—			709,491
Investments in subsidiaries		2,699,555		—			32			(2,699,555	)		32
Assets held for sale		—		—			900,328			—			900,328
Other assets		13,613		469,461			755,121			—			1,238,195
Total assets	$	2,713,256	$	1,682,240		$	3,593,562		$	(2,699,605	)	$	5,289,453
Customer deposits	$	—	$	852,270		$	—		$	(50	)	$	852,220
Long-term debt		—		998,965			41,119			—			1,040,084
FHLB borrowings		—		25,000			—			—			25,000
Liabilities held for sale		—		—			241,562			—			241,562
Other liabilities		178		(26,769	)		1,707,604			—			1,681,013
Net intercompany advances		1,263,504		24,173			(1,287,677	)		—			—
Stockholders' equity		1,449,574		(191,399	)		2,890,954			(2,699,555	)		1,449,574
Total liabilities and stockholders' equity	$	2,713,256	$	1,682,240		$	3,593,562		$	(2,699,605	)	$	5,289,453


Condensed Consolidating Statements of Cash Flows								(in 000s)
Six months ended		H&R Block, Inc.			BFC			Other						Consolidated
October 31, 2011		(Guarantor)			(Issuer)			Subsidiaries			Elims			H&R Block
Net cash provided by (used in) operating
activities:	$	5,821		$	(40,451	)	$	(547,998	)	$	—		$	(582,628	)
Cash flows from investing:
Purchases of available-for-sale
securities		—			(155,159	)		—			—			(155,159	)
Mortgage loans originated for
investment, net		—			22,978			—			—			22,978
Purchase property & equipment		—			(94	)		(40,416	)		—			(40,510	)
Payments made for business
acquisitions, net		—			—			(8,164	)		—			(8,164	)
Proceeds from sale of businesses, net		—			—			37,036			—			37,036
Loans made to franchisees		—			(27,682	)		—			—			(27,682	)
Repayments from franchisees		—			7,447			—			—			7,447
Net intercompany advances		266,274			—			—			(266,274	)		—
Other, net		—			28,300			8,634			—			36,934
Net cash provided by (used in) investing
activities		266,274			(124,210	)		(2,910	)		(266,274	)		(127,120	)
Cash flows from financing:
Repayments of commercial paper		—			(37,989	)		—			—			(37,989	)
Proceeds from commercial paper		—			77,979			—			—			77,979
Customer banking deposits		—			(129,055	)		—			(230	)		(129,285	)
Dividends paid		(91,446	)		—			—			—			(91,446	)
Repurchase of common stock		(180,222	)		—			—			—			(180,222	)
Proceeds from exercise of stock
options, net		(430	)		—			—			—			(430	)
Net intercompany advances		—			17,228			(283,502	)		266,274			—
Other, net		3			952			(29,012	)		—			(28,057	)
Net cash used in financing activities		(272,095	)		(70,885	)		(312,514	)		266,044			(389,450	)
Effects of exchange rates on cash		—			—			(6,035	)		—			(6,035	)
Net decrease in cash		—			(235,546	)		(869,457	)		(230	)		(1,105,233	)
Cash – beginning of period		—			616,238			1,061,656			(50	)		1,677,844
Cash – end of period	$	—		$	380,692		$	192,199		$	(280	)	$	572,611


Six months ended		H&R Block, Inc.			BFC			Other						Consolidated
October 31, 2010		(Guarantor)			(Issuer)			Subsidiaries			Elims			H&R Block
Net cash used in operating activities:	$	(46,961	)	$	(15,379	)	$	(485,661	)	$	—		$	(548,001	)
Cash flows from investing:
Mortgage loans originated for
investment, net		—			30,829			—			—			30,829
Purchase property & equipment		—			—			(35,005	)		—			(35,005	)
Payments made for business
acquisitions, net		—			—			(43,310	)		—			(43,310	)
Proceeds from sale of businesses, net		—			—			58,834			—			58,834
Loans made to franchisees		—			(64,851	)		—			—			(64,851	)
Repayments from franchisees		—			8,673			—			—			8,673
Net intercompany advances		423,572			—			—			(423,572	)		—
Other, net		—			15,941			12,254			—			28,195
Net cash provided by (used in) investing
activities		423,572			(9,408	)		(7,227	)		(423,572	)		(16,635	)
Cash flows from financing:
Repayments of commercial paper		—			(75,000	)		—			—			(75,000	)
Proceeds from commercial paper		—			114,490			—			—			114,490
Customer banking deposits		—			76,923			—			100			77,023
Dividends paid		(95,068	)		—			—			—			(95,068	)
Repurchase of common stock		(283,470	)		—			—			—			(283,470	)
Proceeds from exercise of stock
options, net		1,493			—			—			—			1,493
Net intercompany advances		—			15,851			(439,423	)		423,572			—
Other, net		434			760			(22,546	)		—			(21,352	)
Net cash provided by (used in) financing
activities		(376,611	)		133,024			(461,969	)		423,672			(281,884	)
Effects of exchange rates on cash		—			—			2,221			—			2,221
Net increase (decrease) in cash		—			108,237			(952,636	)		100			(844,299	)
Cash – beginning of period		—			702,021			1,102,135			(111	)		1,804,045
Cash – end of period	$	—		$	810,258		$	149,499		$	(11	)	$	959,746