Condensed Consolidating Financial Statements

9 Months Ended

Jan. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

Block Financial is an indirect, 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full and unconditional Guarantor of the Senior Notes issued on October 25, 2012 and October 26, 2004, our 2012 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.

Nine months ended January 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	102,840		$	360,095		$	(1,630	)	$	461,305
Cost of revenues	—			121,925			674,159			(1,630		)	794,454
Selling, general and administrative	—			25,753			339,484			—			365,237
Total expenses	—			147,678			1,013,643			(1,630		)	1,159,691
Operating loss	—			(44,838		)	(653,548		)	—			(698,386		)
Other income (expense), net	(711,681		)	1,938			(15,233		)	711,681			(13,295		)
Loss from continuing operations before tax benefit	(711,681		)	(42,900		)	(668,781		)	711,681			(711,681		)
Income tax benefit	(282,645		)	(3,999		)	(278,646		)	282,645			(282,645		)
Net loss from continuing operations	(429,036		)	(38,901		)	(390,135		)	429,036			(429,036		)
Net loss from discontinued operations	(5,805		)	(4,834		)	(971		)	5,805			(5,805		)
Net loss	(434,841		)	(43,735		)	(391,106		)	434,841			(434,841		)
Other comprehensive loss	(15,326		)	(9,668		)	(5,658		)	15,326			(15,326		)
Comprehensive loss	$	(450,167	)	$	(53,403	)	$	(396,764	)	$	450,167		$	(450,167	)

Nine months ended January 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	98,531		$	608,773		$	(1,573	)	$	705,731
Cost of revenues	—			137,146			647,476			(1,569		)	783,053
Selling, general and administrative	—			26,288			326,518			(4		)	352,802
Total expenses	—			163,434			973,994			(1,573		)	1,135,855
Operating loss	—			(64,903		)	(365,221		)	—			(430,124		)
Other income (expense), net	(427,825		)	(2,428		)	4,727			427,825			2,299
Loss from continuing operations before tax benefit	(427,825		)	(67,331		)	(360,494		)	427,825			(427,825		)
Income tax benefit	(204,061		)	(46,374		)	(157,687		)	204,061			(204,061		)
Net loss from continuing operations	(223,764		)	(20,957		)	(202,807		)	223,764			(223,764		)
Net loss from discontinued operations	(6,628		)	(6,503		)	(125		)	6,628			(6,628		)
Net loss	(230,392		)	(27,460		)	(202,932		)	230,392			(230,392		)
Other comprehensive loss	(3,090		)	(315		)	(2,775		)	3,090			(3,090		)
Comprehensive loss	$	(233,482	)	$	(27,775	)	$	(205,707	)	$	233,482		$	(233,482	)

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of January 31, 2014	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	181,483	$	256,541	$	(620	)	$	437,404
Cash & cash equivalents — restricted	—		4,883		39,972		—			44,855
Receivables, net	—		529,954		147,267		—			677,221
Mortgage loans held for investment, net	—		282,149		—		—			282,149
Intangible assets and goodwill, net	—		—		756,105		—			756,105
Investments in subsidiaries	2,845,467		—		1,079		(2,845,467		)	1,079
Amounts due from affiliates	—		542,657		2,167,747		(2,710,404		)	—
Other assets	9,708		598,966		707,800		—			1,316,474
Total assets	$	2,855,175	$	2,140,092	$	4,076,511	$	(5,556,491	)	$	3,515,287
Customer deposits	$	—	$	807,507	$	—	$	(620	)	$	806,887
Commercial paper borrowings	—		194,984		—		—			194,984
Long-term debt	—		897,365		9,164		—			906,529
Other liabilities	669		237,199		682,260		—			920,128
Amounts due to affiliates	2,167,747		—		542,657		(2,710,404		)	—
Stockholders’ equity	686,759		3,037		2,842,430		(2,845,467		)	686,759
Total liabilities and stockholders’ equity	$	2,855,175	$	2,140,092	$	4,076,511	$	(5,556,491	)	$	3,515,287

As of January 31, 2013	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)			Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	294,816		$	124,102	$	(533	)	$	418,385
Cash & cash equivalents — restricted	—		1,613			36,345		—			37,958
Receivables, net	963		555,418			392,779		—			949,160
Mortgage loans held for investment, net	—		357,887			—		—			357,887
Intangible assets and goodwill, net	—		—			723,491		—			723,491
Investments in subsidiaries	2,834,612		556			—		(2,834,612		)	556
Amounts due from affiliates	62		496,760			2,208,626		(2,705,448		)	—
Other assets	8,244		630,999			805,816		—			1,445,059
Total assets	$	2,843,881	$	2,338,049		$	4,291,159	$	(5,540,593	)	$	3,932,496
Customer deposits	$	—	$	1,037,501		$	—	$	(533	)	$	1,036,968
Commercial paper borrowings	—		424,967			—		—			424,967
Long-term debt	—		896,848			9,877		—			906,725
Other liabilities	367		251,833			676,748		—			928,948
Amounts due to affiliates	2,208,626		—			496,822		(2,705,448		)	—
Stockholders’ equity	634,888		(273,100		)	3,107,712		(2,834,612		)	634,888
Total liabilities and stockholders’ equity	$	2,843,881	$	2,338,049		$	4,291,159	$	(5,540,593	)	$	3,932,496

As of April 30, 2013	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	558,110	$	1,192,197	$	(2,723	)	$	1,747,584
Cash & cash equivalents — restricted	—		75,096		42,741		—			117,837
Receivables, net	769		99,844		106,222		—			206,835
Mortgage loans held for investment, net	—		338,789		—		—			338,789
Intangible assets and goodwill, net	—		—		719,221		—			719,221
Investments in subsidiaries	3,444,442		473		—		(3,444,442		)	473
Amounts due from affiliates	—		410,590		2,189,625		(2,600,215		)	—
Other assets	8,390		645,166		753,484		—			1,407,040
Total assets	$	3,453,601	$	2,128,068	$	5,003,490	$	(6,047,380	)	$	4,537,779
Customer deposits	$	—	$	939,187	$	—	$	(2,723	)	$	936,464
Long-term debt	—		896,978		9,702		—			906,680
Other liabilities	429		245,862		1,184,797		—			1,431,088
Amounts due to affiliates	2,189,625		—		410,590		(2,600,215		)	—
Stockholders’ equity	1,263,547		46,041		3,398,401		(3,444,442		)	1,263,547
Total liabilities and stockholders’ equity	$	3,453,601	$	2,128,068	$	5,003,490	$	(6,047,380	)	$	4,537,779

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Nine months ended January 31, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities	$	(309	)	$	(347,188	)	$	(772,825	)	$	—		$	(1,120,322	)
Cash flows from investing:
Purchases of AFS securities	—			(45,158		)	—			—			(45,158		)
Maturities and payments received on AFS securities	—			72,502			—			—			72,502
Mortgage loans held for investment, net	—			35,320			—			—			35,320
Capital expenditures	—			(59		)	(125,595		)	—			(125,654		)
Payments for business acquisitions, net	—			—			(37,865		)	—			(37,865		)
Proceeds received on notes receivable	—			—			64,865			—			64,865
Loans made to franchisees	—			(62,039		)	—			—			(62,039		)
Repayments from franchisees	—			17,893			—			—			17,893
Intercompany advances (payments)	142,407			—			—			(142,407		)	—
Other, net	—			6,384			5,843			—			12,227
Net cash provided by (used in) investing activities	142,407			24,843			(92,752		)	(142,407		)	(67,909		)
Cash flows from financing:
Repayments of commercial paper	—			(80,930		)	—			—			(80,930		)
Proceeds from commercial paper	—			275,914			—			—			275,914
Customer banking deposits, net	—			(127,050		)	—			2,103			(124,947		)
Dividends paid	(164,134		)	—			—			—			(164,134		)
Repurchase of common stock	(6,047		)	—			—			—			(6,047		)
Proceeds from stock options	28,083			—			—			—			28,083
Intercompany advances (payments)	—			(122,216		)	(20,191		)	142,407			—
Other, net	—			—			(29,872		)	—			(29,872		)
Net cash used in financing activities	(142,098		)	(54,282		)	(50,063		)	144,510			(101,933		)
Effects of exchange rates on cash	—			—			(20,016		)	—			(20,016		)
Net decrease in cash	—			(376,627		)	(935,656		)	2,103			(1,310,180		)
Cash – beginning of the period	—			558,110			1,192,197			(2,723		)	1,747,584
Cash – end of the period	$	—		$	181,483		$	256,541		$	(620	)	$	437,404

Nine months ended January 31, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities:	$	(158	)	$	(408,904	)	$	(902,864	)	$	—		$	(1,311,926	)
Cash flows from investing:
Purchases of AFS securities	—			(108,351		)	—			—			(108,351		)
Maturities and payments received on AFS securities	—			86,756			52			—			86,808
Mortgage loans held for investment, net	—			31,205			—			—			31,205
Capital expenditures	—			(58		)	(96,005		)	—			(96,063		)
Payments for business acquisitions, net	—			—			(20,662		)	—			(20,662		)
Loans made to franchisees	—			(68,874		)	—			—			(68,874		)
Repayments from franchisees	—			9,594			—			—			9,594
Net intercompany advances	491,619			—			—			(491,619		)	—
Other, net	—			(21,879		)	7,906			—			(13,973		)
Net cash provided by (used in) investing activities	491,619			(71,607		)	(108,709		)	(491,619		)	(180,316		)
Cash flows from financing:
Repayments of commercial paper	—			(789,271		)	—			—			(789,271		)
Proceeds from commercial paper	—			1,214,238			—			—			1,214,238
Repayments of long-term debt	—			(605,790		)	(30,831		)	—			(636,621		)
Proceeds from long-term debt	—			497,185			—			—			497,185
Customer banking deposits, net	—			208,443			—			310			208,753
Dividends paid	(162,692		)	—			—			—			(162,692		)
Repurchase of common stock	(340,298		)	—			—			—			(340,298		)
Proceeds from stock options	11,529			—			—			—			11,529
Net intercompany advances	—			(251,638		)	(239,981		)	491,619			—
Other, net	—			(12,987		)	(23,126		)	—			(36,113		)
Net cash provided by (used in) financing activities	(491,461		)	260,180			(293,938		)	491,929			(33,290		)
Effects of exchange rates on cash	—			—			(417		)	—			(417		)
Net decrease in cash	—			(220,331		)	(1,305,928		)	310			(1,525,949		)
Cash – beginning of the period	—			515,147			1,430,030			(843		)	1,944,334
Cash – end of the period	$	—		$	294,816		$	124,102		$	(533	)	$	418,385