Condensed Consolidating Financial Statements

12 Months Ended

Apr. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

Block Financial is a 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.

Certain amounts included in the following income statements and statements of cash flows for the years ended April 30, 2013 and 2012 and the balance sheet as of April 30, 2013 have been restated to correct errors in presentation. The income statements have been corrected to properly reflect equity earnings in subsidiaries of H&R Block, Inc. (Guarantor) in “Other income (expense), net” to include income taxes and discontinued operations which were previously shown on separate lines. The balance sheet has been corrected to properly reflect a classified balance sheet and to show the investment in Block Financial by Other Subsidiaries. The statements of cash flows have been corrected to properly reflect intercompany borrowings and payments as either investing or financing activities, as appropriate. These restatements did not have an impact on the consolidated financial statements as of April 30, 2013 or for the fiscal years ended April 30, 2013 and 2012.



CONDENSED CONSOLIDATING INCOME STATEMENTS													(in 000s)
Year ended April 30, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	235,075		$	2,795,562		$	(6,342	)	$	3,024,295
Cost of revenues	—			179,779			1,454,219			(6,342		)	1,627,656
Selling, general and administrative	—			22,505			610,923			—			633,428
Total expenses	—			202,284			2,065,142			(6,342		)	2,261,084
Operating income	—			32,791			730,420			—			763,211
Other income (expense), net	478,866			8,037			(13,942		)	(469,056		)	3,905
Income from continuing operations before taxes	478,866			40,828			716,478			(469,056		)	767,116
Income taxes	3,709			10,551			252,759			—			267,019
Net income from continuing operations	475,157			30,277			463,719			(469,056		)	500,097
Net loss from discontinued operations	—			(23,771		)	(1,169		)	—			(24,940		)
Net income	475,157			6,506			462,550			(469,056		)	475,157
Other comprehensive loss	(5,373		)	(2,012		)	(5,373		)	7,385			(5,373		)
Comprehensive income	$	469,784		$	4,494		$	457,177		$	(461,671	)	$	469,784



Year ended April 30, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	230,982		$	2,681,987		$	(7,026	)	$	2,905,943
Cost of revenues	—			193,400			1,417,824			(6,436		)	1,604,788
Selling, general and administrative	—			42,530			562,529			(590		)	604,469
Total expenses	—			235,930			1,980,353			(7,026		)	2,209,257
Operating income (loss)	—			(4,948		)	701,634			—			696,686
Other income (expense), net ⁽¹⁾	433,948			(1,164		)	6,489			(433,948		)	5,325
Income (loss) from continuing operations before taxes (benefit)	433,948			(6,112		)	708,123			(433,948		)	702,011
Income taxes (benefit) ⁽¹⁾	—			(29,221		)	266,074			—			236,853
Net income from continuing operations	433,948			23,109			442,049			(433,948		)	465,158
Net income (loss) from discontinued operations ⁽¹⁾	—			(31,954		)	744			—			(31,210		)
Net income (loss)	433,948			(8,845		)	442,793			(433,948		)	433,948
Other comprehensive income (loss)	(1,595		)	189			(1,784		)	1,595			(1,595		)
Comprehensive income (loss)	$	432,353		$	(8,656	)	$	441,009		$	(432,353	)	$	432,353


⁽¹⁾	Amounts have been restated, including the presentation of equity in earnings of subsidiaries net of income taxes and discontinued operations.



Year ended April 30, 2012	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—	$	234,925		$	2,666,267		$	(7,421	)	$	2,893,771
Cost of revenues	—		221,988			1,487,128			(7,421		)	1,701,695
Impairment of goodwill	—		—			7,409			—			7,409
Selling, general and administrative	—		24,730			593,645			—			618,375
Total expenses	—		246,718			2,088,182			(7,421		)	2,327,479
Operating income (loss)	—		(11,793		)	578,085			—			566,292
Other income, net ⁽¹⁾	265,932		8,686			1,092			(265,932		)	9,778
Income (loss) from continuing operations before taxes (benefit)	265,932		(3,107		)	579,177			(265,932		)	576,070
Income taxes (benefit) ⁽¹⁾	—		(1,191		)	231,293			—			230,102
Net income (loss) from continuing operations	265,932		(1,916		)	347,884			(265,932		)	345,968
Net loss from discontinued operations ⁽¹⁾	—		(40,172		)	(39,864		)	—			(80,036		)
Net income (loss)	265,932		(42,088		)	308,020			(265,932		)	265,932
Other comprehensive income (loss)	912		3,085			(2,173		)	(912		)	912
Comprehensive income (loss)	$	266,844	$	(39,003	)	$	305,847		$	(266,844	)	$	266,844


⁽¹⁾	Amounts have been restated, including the presentation of equity in earnings of subsidiaries net of income taxes and discontinued operations.



CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2014	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	612,376	$	1,574,031	$	(1,100	)	$	2,185,307
Cash & cash equivalents - restricted	—		67,463		47,856		—			115,319
Receivables, net	—		89,975		101,643		—			191,618
Prepaid expenses and other current assets	—		10,202		188,065		—			198,267
Investments in available-for-sale securities	—		423,495		—		—			423,495
Total current assets	—		1,203,511		1,911,595		(1,100		)	3,114,006
Mortgage loans held for investment, net	—		268,428		—		—			268,428
Investments in available-for-sale securities	—		—		4,329		—			4,329
Property and equipment, net	—		121		304,790		—			304,911
Intangible assets, net	—		—		355,622		—			355,622
Goodwill	—		—		436,117		—			436,117
Investments in subsidiaries	904,331		—		60,902		(965,233		)	—
Amounts due from affiliates	642,101		386,818		397		(1,029,316		)	—
Other assets	11,271		173,168		25,677		—			210,116
Total assets	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529

Customer banking deposits	$	—	$	770,885	$	—	$	(1,100	)	$	769,785
Accounts payable, accrued expenses and other current liabilities	757		223,677		344,573		—			569,007
Accrued salaries, wages and payroll taxes	—		2,190		164,842		—			167,032
Accrued income taxes	—		71,132		335,523		—			406,655
Current portion of long-term debt	—		399,882		755		—			400,637
Total current liabilities	757		1,467,766		845,693		(1,100		)	2,313,116
Long-term debt	—		497,612		8,225		—			505,837
Other noncurrent liabilities	—		5,766		312,261		—			318,027
Amounts due to affiliates	397		—		1,028,919		(1,029,316		)	—
Total liabilities	1,154		1,971,144		2,195,098		(1,030,416		)	3,136,980
Stockholders' equity	1,556,549		60,902		904,331		(965,233		)	1,556,549
Total liabilities and stockholders' equity	$	1,557,703	$	2,032,046	$	3,099,429	$	(1,995,649	)	$	4,693,529



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
Prepaid expenses and other current assets	—		17,915		372,172		—			390,087
Total current assets	769		750,965		1,713,332		(2,723		)	2,462,343
Mortgage loans held for investment, net	—		338,789		—		—			338,789
Investments in available-for-sale securities	—		482,378		4,498		—			486,876
Property and equipment, net	—		877		267,003		—			267,880
Intangible assets, net	—		—		284,439		—			284,439
Goodwill	—		—		434,782		—			434,782
Investments in subsidiaries ⁽¹⁾	3,444,442		—		46,041		(3,490,483		)	—
Amounts due from affiliates	—		410,590		2,189,625		(2,600,215		)	—
Other assets	8,390		144,469		109,811		—			262,670
Total assets	$	3,453,601	$	2,128,068	$	5,049,531	$	(6,093,421	)	$	4,537,779

Customer banking deposits	$	—	$	939,187	$	—	$	(2,723	)	$	936,464
Accounts payable, accrued expenses and other current liabilities	429		191,133		332,359		—			523,921
Accrued salaries, wages and payroll taxes	—		1,225		133,745		—			134,970
Accrued income taxes	—		36,545		379,583		—			416,128
Current portion of long-term debt	—		—		722		—			722
Total current liabilities	429		1,168,090		846,409		(2,723		)	2,012,205
Long-term debt	—		896,978		8,980		—			905,958
Other noncurrent liabilities	—		16,959		339,110		—			356,069
Amounts due to affiliates	2,189,625		—		410,590		(2,600,215		)	—
Total liabilities	2,190,054		2,082,027		1,605,089		(2,602,938		)	3,274,232
Stockholders' equity ⁽¹⁾	1,263,547		46,041		3,444,442		(3,490,483		)	1,263,547
Total liabilities and stockholders' equity	$	3,453,601	$	2,128,068	$	5,049,531	$	(6,093,421	)	$	4,537,779



Year ended April 30, 2013	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	(22,533	)	$	(3,299	)	$	522,940		$	—		$	497,108
Cash flows from investing:
Purchases of AFS securities	—			(227,177		)	—			—			(227,177		)
Sales, maturities and payments received on AFS securities	—			117,346			1,065			—			118,411
Mortgage loans held for investment, net	—			44,031			—			—			44,031
Capital expenditures	—			(58		)	(113,181		)	—			(113,239		)
Payments for business acquisitions, net	—			—			(20,742		)	—			(20,742		)
Proceeds from sales of businesses, net	—			—			3,785			—			3,785
Franchise loans funded	—			(70,807		)	—			—			(70,807		)
Payments received on franchise loans	—			83,445			—			—			83,445
Surrender of company-owned life insurance policies	—			—			81,125			—			81,125
Intercompany payments/investments in subsidiaries ⁽¹⁾	—			(274,090		)	(963,613		)	1,237,703			—
Other, net	—			(18,822		)	9,053			—			(9,769		)
Net cash provided by (used in) investing activities	—			(346,132		)	(1,002,508		)	1,237,703			(110,937		)
Cash flows from financing:
Repayments of short-term borrowings	—			(1,214,238		)	—			—			(1,214,238		)
Proceeds from short-term borrowings	—			1,214,238			—			—			1,214,238
Repayments of long-term debt	—			(605,790		)	(30,831		)	—			(636,621		)
Proceeds from issuance of long-term debt	—			497,185			—			—			497,185
Customer banking deposits, net	—			105,488			—			(1,880		)	103,608
Dividends paid	(217,201		)	—			—			—			(217,201		)
Repurchase of common stock	(340,413		)	—			—			—			(340,413		)
Proceeds from exercise of stock options	25,139			—			—			—			25,139
Intercompany borrowings/capital contributions ⁽¹⁾	555,008			408,605			274,090			(1,237,703		)	—
Other, net	—			(13,094		)	(3,144		)	—			(16,238		)
Net cash provided by (used in) financing activities	22,533			392,394			240,115			(1,239,583		)	(584,541		)
Effects of exchange rate changes on cash	—			—			1,620			—			1,620
Net increase (decrease) in cash	—			42,963			(237,833		)	(1,880		)	(196,750		)
Cash - beginning of the year	—			515,147			1,430,030			(843		)	1,944,334
Cash - end of the year	$	—		$	558,110		$	1,192,197		$	(2,723	)	$	1,747,584


⁽¹⁾	Amounts have been restated, including the presentation of intercompany borrowings (payments) as either investing or financing activities.



Year ended April 30, 2012	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by operating activities:	$	33,046		$	15,144		$	313,859		$	—		$	362,049
Cash flows from investing:
Purchases of AFS securities	—			(256,173		)	—			—			(256,173		)
Maturities and payments received on AFS securities	—			63,291			3,091			—			66,382
Mortgage loans held for investment, net	—			49,142			—			—			49,142
Capital expenditures	—			(153		)	(82,304		)	—			(82,457		)
Payments for business acquisitions, net	—			—			(15,258		)	—			(15,258		)
Proceeds from sales of businesses, net	—			—			560,499			—			560,499
Franchise loans funded	—			(46,246		)	—			—			(46,246		)
Payments received on franchise loans	—			56,591			—			—			56,591
Intercompany borrowings (payments) ⁽¹⁾	—			55,721			(344,000		)	288,279			—
Other, net	—			11,785			7,602			—			19,387
Net cash provided by (used in) investing activities	—			(66,042		)	129,630			288,279			351,867
Cash flows from financing:
Repayments of short-term borrowings	—			(664,167		)	—			—			(664,167		)
Proceeds from short-term borrowings	—			664,167			—			—			664,167
Repayments of FHLB borrowings	—			(25,000		)	—			—			(25,000		)
Customer banking deposits, net	—			(25,298		)	—			(793		)	(26,091		)
Dividends paid	(208,801		)	—			—			—			(208,801		)
Repurchase of common stock	(180,592		)	—			—			—			(180,592		)
Proceeds from exercise of stock options	12,275			—			—			—			12,275
Intercompany borrowings (payments) ⁽¹⁾	344,000			—			(55,721		)	(288,279		)	—
Other, net	72			105			(17,030		)	—			(16,853		)
Net cash provided by (used in) financing activities	(33,046		)	(50,193		)	(72,751		)	(289,072		)	(445,062		)
Effects of exchange rate changes on cash	—			—			(2,364		)	—			(2,364		)
Net increase (decrease) in cash	—			(101,091		)	368,374			(793		)	266,490
Cash - beginning of the year	—			616,238			1,061,656			(50		)	1,677,844
Cash - end of the year	$	—		$	515,147		$	1,430,030		$	(843	)	$	1,944,334


⁽¹⁾	Amounts have been restated, including the presentation of intercompany borrowings (payments) as either investing or financing activities.

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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