Condensed Consolidating Financial Statements

12 Months Ended

Apr. 30, 2015

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, 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.

As discussed in note 15, the presentation of interest expense on borrowings for fiscal years 2014 and 2013 has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption.

CONDENSED CONSOLIDATING INCOME STATEMENTS													(in 000s)
Year ended April 30, 2015	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	226,285		$	2,858,474		$	(6,101	)	$	3,078,658
Cost of revenues	—			96,493			1,540,091			(6,094		)	1,630,490
Selling, general and administrative	—			19,053			634,456			(7		)	653,502
Total operating expenses	—			115,546			2,174,547			(6,101		)	2,283,992
Other income	475,336			2,726			50,434			(527,182		)	1,314
Interest expense on external borrowings	—			(44,884		)	(362		)	—			(45,246		)
Other expenses	—			(953		)	(14,976		)	8,000			(7,929		)
Income from continuing operations before taxes	475,336			67,628			719,023			(519,182		)	742,805
Income taxes	1,673			2,602			251,786			—			256,061
Net income from continuing operations	473,663			65,026			467,237			(519,182		)	486,744
Net income (loss) from discontinued operations	—			(16,725		)	3,644			—			(13,081		)
Net income	473,663			48,301			470,881			(519,182		)	473,663
Other comprehensive income (loss)	(3,437		)	6,738			(3,437		)	(3,301		)	(3,437		)
Comprehensive income	$	470,226		$	55,039		$	467,444		$	(522,483	)	$	470,226

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 (1)	—			124,887			1,453,832			(6,342		)	1,572,377
Selling, general and administrative	—			22,505			610,923			—			633,428
Total operating expenses	—			147,392			2,064,755			(6,342		)	2,205,805
Other income	478,866			20,925			5,580			(469,056		)	36,315
Interest expense on external borrowings (1)	—			(54,892		)	(387		)	—			(55,279		)
Other expenses	—			(12,888		)	(19,522		)	—			(32,410		)
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

⁽¹⁾  Amounts have been restated, including the presentation of interest expense on borrowings as discussed in note 15.

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 (1)	—			119,569			1,417,358			(6,436		)	1,530,491
Selling, general and administrative	—			42,530			562,529			(590		)	604,469
Total operating expenses	—			162,099			1,979,887			(7,026		)	2,134,960
Other income	433,948			5,126			7,449			(433,948		)	12,575
Interest expense on external borrowings (1)	—			(73,831		)	(466		)	—			(74,297		)
Other expenses	—			(6,290		)	(960		)	—			(7,250		)
Income (loss) from continuing operations before taxes (benefit)	433,948			(6,112		)	708,123			(433,948		)	702,011
Income taxes (benefit)	—			(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	—			(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 interest expense on borrowings as discussed in note 15.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2015	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	478,077	$	1,529,553	$	(440	)	$	2,007,190
Cash & cash equivalents - restricted	—		45,098		46,874		—			91,972
Receivables, net	—		80,332		87,632		—			167,964
Deferred tax assets and income taxes receivable	—		77,418		96,849		—			174,267
Prepaid expenses and other current assets	—		7,771		62,512		—			70,283
Investments in available-for-sale securities	—		434,924		4,701		—			439,625
Total current assets	—		1,123,620		1,828,121		(440		)	2,951,301
Mortgage loans held for investment, net	—		239,338		—		—			239,338
Property and equipment, net	—		218		311,169		—			311,387
Intangible assets, net	—		—		432,142		—			432,142
Goodwill	—		—		441,831		—			441,831
Deferred tax assets and income taxes receivable	—		44,788		—		(31,327		)	13,461
Investments in subsidiaries	1,371,677		—		116,870		(1,488,547		)	—
Amounts due from affiliates	463,434		134,094		1,058		(598,586		)	—
Other noncurrent assets	—		81,075		44,885		—			125,960
Total assets	$	1,835,111	$	1,623,133	$	3,176,076	$	(2,118,900	)	$	4,515,420
Customer banking deposits	$	—	$	744,681	$	—	$	(440	)	$	744,241
Accounts payable and accrued expenses	1,104		7,672		222,546		—			231,322
Accrued salaries, wages and payroll taxes	—		1,946		142,798		—			144,744
Accrued income taxes	—		49,529		385,155		—			434,684
Current portion of long-term debt	—		—		790		—			790
Deferred revenue and other current liabilities	—		177,063		145,445		—			322,508
Total current liabilities	1,104		980,891		896,734		(440		)	1,878,289
Long-term debt	—		497,893		7,405		—			505,298
Deferred tax liabilities and reserves for uncertain tax positions	—		25,696		148,217		(31,327		)	142,586
Deferred revenue and other noncurrent liabilities	—		1,783		154,515		—			156,298
Amounts due to affiliates	1,058		—		597,528		(598,586		)	—
Total liabilities	2,162		1,506,263		1,804,399		(630,353		)	2,682,471
Stockholders' equity	1,832,949		116,870		1,371,677		(1,488,547		)	1,832,949
Total liabilities and stockholders' equity	$	1,835,111	$	1,623,133	$	3,176,076	$	(2,118,900	)	$	4,515,420

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
Deferred tax assets and income taxes receivable	—		—		135,327			—			135,327
Prepaid expenses and other current assets	—		10,202		52,738			—			62,940
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
Property and equipment, net	—		121		304,790			—			304,911
Intangible assets, net	—		—		355,622			—			355,622
Goodwill	—		—		436,117			—			436,117
Deferred tax assets and income taxes receivable	11,271		58,696		(22,720		)	—			47,247
Investments in subsidiaries	904,331		—		60,902			(965,233		)	—
Amounts due from affiliates	642,101		386,818		397			(1,029,316		)	—
Other noncurrent assets	—		114,472		52,726			—			167,198
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 and accrued expenses	757		11,279		210,453			—			222,489
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
Deferred revenue and other current liabilities	—		212,398		134,120			—			346,518
Total current liabilities	757		1,467,766		845,693			(1,100		)	2,313,116
Long-term debt	—		497,612		8,225			—			505,837
Deferred tax liabilities and reserves for uncertain tax positions	—		3,473		153,992			—			157,465
Deferred revenue and other noncurrent liabilities	—		2,293		158,269			—			160,562
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

Year ended April 30, 2014	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by operating activities:	$	—		$	35,034		$	774,547		$	—		$	809,581
Cash flows from investing:
Purchases of AFS securities	—			(45,158		)	—			—			(45,158		)
Sales, maturities and payments received on AFS securities	—			106,873			228			—			107,101
Mortgage loans held for investment, net	—			46,664			—			—			46,664
Capital expenditures	—			(75		)	(146,936		)	—			(147,011		)
Payments for business acquisitions, net	—			—			(68,428		)	—			(68,428		)
Proceeds from notes receivable	—			—			64,865			—			64,865
Franchise loans funded	—			(63,960		)	—			—			(63,960		)
Payments received on franchise loans	—			87,220			—			—			87,220
Intercompany borrowings (payments)	—			33,497			(196,840		)	163,343			—
Other, net	—			19,746			9,651			—			29,397
Net cash provided by (used in) investing activities	—			184,807			(337,460		)	163,343			10,690
Cash flows from financing:
Repayments of short-term borrowings	—			(316,000		)	—			—			(316,000		)
Proceeds from short-term borrowings	—			316,000			—			—			316,000
Customer banking deposits, net	—			(165,575		)	—			1,623			(163,952		)
Dividends paid	(218,980		)	—			—			—			(218,980		)
Repurchase of common stock	(6,106		)	—			—			—			(6,106		)
Proceeds from exercise of stock options	28,246			—			—			—			28,246
Intercompany borrowings (payments)	196,840			—			(33,497		)	(163,343		)	—
Other, net	—			—			(4,138		)	—			(4,138		)
Net cash used in financing activities	—			(165,575		)	(37,635		)	(161,720		)	(364,930		)
Effects of exchange rate changes on cash	—			—			(17,618		)	—			(17,618		)
Net increase in cash	—			54,266			381,834			1,623			437,723
Cash - beginning of the year	—			558,110			1,192,197			(2,723		)	1,747,584
Cash - end of the year	$	—		$	612,376		$	1,574,031		$	(1,100	)	$	2,185,307

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		)
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	—			(274,090		)	(963,613		)	1,237,703			—
Other, net	—			(18,822		)	12,838			—			(5,984		)
Net cash 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	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