17. Condensed Consolidating Financial Statements

BFC is an indirect, wholly-owned 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 CLOC 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 January 31, 2012	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Total revenues	$ —	$ 65,604	$ 597,837	$ (161 )	$ 663,280

Cost of revenues	—	77,965	377,436	(161 )	455,240
Selling, general and administrative	—	9,705	202,031	—	211,736

Total expenses	—	87,670	579,467	(161 )	666,976

Operating income (loss)	—	(22,066 )	18,370	—	(3,696 )
Other income (expense), net	(1,026 )	1,301	1,369	1,026	2,670

Income (loss) from continuing operations before tax (benefit)	(1,026 )	(20,765 )	19,739	1,026	(1,026 )
Income tax (benefit)	2,541	12,036	(9,495 )	(2,541 )	2,541

Net income (loss) from continuing operations	(3,567 )	(32,801 )	29,234	3,567	(3,567 )
Net income (loss) from discontinued operations	218	(15,695 )	15,913	(218 )	218

Net income (loss)	$ (3,349 )	$ (48,496 )	$ 45,147	$ 3,349	$ (3,349 )


Three months ended January 31, 2011	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Total revenues	$ —	$ 74,103	$ 606,193	$ —	$ 680,296

Cost of revenues	—	118,708	376,176	—	494,884
Selling, general and administrative	—	10,220	203,119	—	213,339

Total expenses	—	128,928	579,295	—	708,223

Operating income (loss)	—	(54,825 )	26,898	—	(27,927 )
Other income (expense), net	(25,968 )	(521 )	2,480	25,968	1,959

Income (loss) from continuing operations before taxes (benefit)	(25,968 )	(55,346 )	29,378	25,968	(25,968 )
Income taxes (benefit)	(14,934 )	(26,783 )	11,849	14,934	(14,934 )

Net income (loss) from continuing operations	(11,034 )	(28,563 )	17,529	11,034	(11,034 )
Net income (loss) from discontinued operations	(1,687 )	(8,283 )	6,596	1,687	(1,687 )

Net income (loss)	$ (12,721 )	$ (36,846 )	$ 24,125	$ 12,721	$ (12,721 )


Nine months ended January 31, 2012	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Total revenues	$ —	$ 104,937	$ 788,321	$ (161 )	$ 893,097

Cost of revenues	—	152,605	742,993	(161 )	895,437
Selling, general and administrative	—	24,044	388,357	—	412,401

Total expenses	—	176,649	1,131,350	(161 )	1,307,838

Operating loss	—	(71,712 )	(343,029 )	—	(414,741 )
Other income (expense), net	(405,556 )	7,647	1,538	405,556	9,185

Loss from continuing operations before tax benefit	(405,556 )	(64,065 )	(341,491 )	405,556	(405,556 )
Income tax benefit	(159,821 )	(4,877 )	(154,944 )	159,821	(159,821 )

Net loss from continuing operations	(245,735 )	(59,188 )	(186,547 )	245,735	(245,735 )
Net loss from discontinued operations	(74,436 )	(36,398 )	(38,038 )	74,436	(74,436 )

Net loss	$ (320,171 )	$ (95,586 )	$ (224,585 )	$ 320,171	$ (320,171 )


Nine months ended January 31, 2011	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Total revenues	$ —	$ 112,423	$ 787,298	$ —	$ 899,721

Cost of revenues	—	193,695	758,839	—	952,534
Selling, general and administrative	—	21,689	351,212	—	372,901

Total expenses	—	215,384	1,110,051	—	1,325,435

Operating loss	—	(102,961 )	(322,753 )	—	(425,714 )
Other income (expense), net	(416,635 )	4,751	4,328	416,635	9,079

Loss from continuing operations before tax benefit	(416,635 )	(98,210 )	(318,425 )	416,635	(416,635 )
Income tax benefit	(166,349 )	(42,278 )	(124,071 )	166,349	(166,349 )

Net loss from continuing operations	(250,286 )	(55,932 )	(194,354 )	250,286	(250,286 )
Net income (loss) from discontinued operations	(2,165 )	(12,617 )	10,452	2,165	(2,165 )

Net loss	$ (252,451 )	$ (68,549 )	$ (183,902 )	$ 252,451	$ (252,451 )

Condensed Consolidating Balance Sheets


					(in 000s)
As of January 31, 2012	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Cash & cash equivalents	$ —	$ 1,065,448	$ 153,825	$ (289 )	$ 1,218,984
Cash & cash equivalents – restricted	—	2,254	31,914	—	34,168
Receivables, net	63	502,231	533,608	—	1,035,902
Mortgage loans held for investment	—	430,189	—	—	430,189
Intangible assets and goodwill, net	—	—	701,743	—	701,743
Investments in subsidiaries	1,694,728	—	1,706	(1,694,728 )	1,706
Other assets	8,841	535,743	885,513	—	1,430,097

Total assets	$ 1,703,632	$ 2,535,865	$ 2,308,309	$ (1,695,017 )	$ 4,852,789

Customer deposits	$ —	$ 1,588,277	$ —	$ (289 )	$ 1,587,988
Long-term debt	—	999,235	41,002	—	1,040,237
Commercial paper borrowings	—	230,947	—	—	230,947
FHLB borrowings	—	25,000	—	—	25,000
Other liabilities	246	(108,361 )	1,270,283	—	1,162,168
Net intercompany advances	896,937	68,684	(965,621 )	—	—
Stockholders' equity	806,449	(267,917 )	1,962,645	(1,694,728 )	806,449

Total liabilities and stockholders' equity	$ 1,703,632	$ 2,535,865	$ 2,308,309	$ (1,695,017 )	$ 4,852,789


As of April 30, 2011	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated 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	—	—	709,493	—	709,493
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	755,119	—	1,238,193

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)
Nine months ended January 31, 2012	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Net cash provided by (used in) operating activities:	$ 8,193	$ (448,362 )	$ (942,602 )	$ —	$ (1,382,771 )

Cash flows from investing:
Purchases of available–for–sale securities	—	(178,014 )	—	—	(178,014 )
Mortgage loans originated for investment, net	—	35,460	—	—	35,460
Purchase property & equipment	—	(152 )	(71,397 )	—	(71,549 )
Payments made for business acquisitions, net	—	—	(16,022 )	—	(16,022 )
Proceeds from sale of businesses, net	—	—	533,055	—	533,055
Loans made to franchisees	—	(43,649 )	—	—	(43,649 )
Repayments from franchisees	—	8,455	—	—	8,455
Net intercompany advances	322,729	—	—	(322,729 )	—
Other, net	—	47,230	8,564	—	55,794

Net cash provided by (used in) investing activities	322,729	(130,670 )	454,200	(322,729 )	323,530

Cash flows from financing:
Repayments of commercial paper	—	(413,221 )	—	—	(413,221 )
Proceeds from commercial paper	—	644,168	—	—	644,168
Customer banking deposits	—	735,491	—	(239 )	735,252
Dividends paid	(150,058 )	—	—	—	(150,058 )
Repurchase of common stock	(180,566 )	—	—	—	(180,566 )
Proceeds from exercise of stock options, net	(324 )	—	—	—	(324 )
Net intercompany advances	—	61,747	(384,476 )	322,729	—
Other, net	26	57	(31,507 )	—	(31,424 )

Net cash provided by (used in) financing activities	(330,922 )	1,028,242	(415,983 )	322,490	603,827

Effects of exchange rates on cash	—	—	(3,446 )	—	(3,446 )

Net increase (decrease) in cash	—	449,210	(907,831 )	(239 )	(458,860 )
Cash – beginning of period	—	616,238	1,061,656	(50 )	1,677,844

Cash – end of period	$ —	$ 1,065,448	$ 153,825	$ (289 )	$ 1,218,984


Nine months ended January 31, 2011	H&R Block, Inc. (Guarantor)	BFC (Issuer)	Other Subsidiaries	Eliminations	Consolidated H&R Block
Net cash used in operating activities:	$ (43,026 )	$ (725,197 )	$ (737,195 )	$ —	$ (1,505,418 )

Cash flows from investing:
Mortgage loans originated for investment, net	—	45,316	—	—	45,316
Purchase property & equipment	—	—	(51,198 )	—	(51,198 )
Payments made for business acquisitions, net	—	—	(50,832 )	—	(50,832 )
Proceeds from sale of businesses, net	—	—	62,298	—	62,298
Loans made to franchisees	—	(90,304 )	—	—	(90,304 )
Repayments from franchisees	—	9,926	—	—	9,926
Net intercompany advances	467,873	—	—	(467,873 )	—
Other, net	—	28,612	10,039	—	38,651

Net cash provided by (used in) investing activities	467,873	(6,450 )	(29,693 )	(467,873 )	(36,143 )

Cash flows from financing:
Repayments of short-term borrowings	—	(2,654,653 )	—	—	(2,654,653 )
Proceeds from short-term borrowings	—	3,286,603	—	—	3,286,603
Customer banking deposits	—	1,003,482	—	(1,208 )	1,002,274
Dividends paid	(140,926 )	—	—	—	(140,926 )
Repurchase of common stock	(283,494 )	—	—	—	(283,494 )
Proceeds from exercise of stock options	(866 )	—	—	—	(866 )
Net intercompany advances	—	(315,752 )	(152,121 )	467,873	—
Other, net	439	(365 )	(10,136 )	—	(10,062 )

Net cash provided by (used in) financing activities	(424,847 )	1,319,315	(162,257 )	466,665	1,198,876

Effects of exchange rates on cash	—	—	4,330	—	4,330

Net increase (decrease) in cash	—	587,668	(924,815 )	(1,208 )	(338,355 )
Cash – beginning of period	—	702,021	1,102,135	(111 )	1,804,045

Cash – end of period	$ —	$ 1,289,689	$ 177,320	$ (1,319 )	$ 1,465,690