10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended July 31, 2016
	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from             to

Commission file number 1-06089

H&R Block, Inc.

(Exact name of registrant as specified in its charter)

MISSOURI	44-0607856
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

One H&R Block Way, Kansas City, Missouri 64105

(Address of principal executive offices, including zip code)

(816) 854-3000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ     No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ     No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer þ          Accelerated filer ¨        Non-accelerated filer ¨         Smaller reporting company ¨

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨No  þ

The number of shares outstanding of the registrant's Common Stock, without par value, at the close of business on August 31, 2016: 219,093,448 shares.

Form 10-Q for the Period Ended July 31, 2016

Table of Contents

	PART I
Item 1.	Consolidated Statements of Operations and Comprehensive Loss
	Three months ended July 31, 2016 and 2015	1
	Consolidated Balance Sheets
	As of July 31, 2016, July 31, 2015 and April 30, 2016	2
	Condensed Consolidated Statements of Cash Flows
	Three months ended July 31, 2016 and 2015	3
	Notes to Consolidated Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
	PART II
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
	Signatures	35

PART I    FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS	(unaudited, in 000s, except  per share amounts)
	Three months ended July 31,
	2016			2015
REVENUES:
Service revenues	$	112,384		$	118,434
Royalty, product and other revenues	12,801			19,284
	125,185			137,718
OPERATING EXPENSES:
Cost of revenues:
Compensation and benefits	52,355			55,789
Occupancy and equipment	94,425			89,855
Provision for bad debt and loan losses	1,417			2,005
Depreciation and amortization	27,467			27,084
Other	35,422			38,775
	211,086			213,508
Selling, general and administrative:
Marketing and advertising	7,561			8,531
Compensation and benefits	57,522			54,669
Depreciation and amortization	13,815			13,010
Other selling, general and administrative	19,925			21,982
	98,823			98,192
Total operating expenses	309,909			311,700
Other income, net	2,968			433
Interest expense on borrowings	(21,466		)	(8,575		)
Other expenses, net	(327		)	(4,985		)
Loss from continuing operations before income tax benefit	(203,549		)	(187,109		)
Income tax benefit	(82,523		)	(90,604		)
Net loss from continuing operations	(121,026		)	(96,505		)
Net loss from discontinued operations, net of tax benefits of $1,557 and $1,889	(2,647		)	(3,154		)
NET LOSS	$	(123,673	)	$	(99,659	)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations	$	(0.55	)	$	(0.35	)
Discontinued operations	(0.01		)	(0.01		)
Consolidated	$	(0.56	)	$	(0.36	)
DIVIDENDS DECLARED PER SHARE	$	0.22		$	0.20
COMPREHENSIVE LOSS:
Net loss	$	(123,673	)	$	(99,659	)
Unrealized gains (losses) on securities, net of taxes:
Unrealized holding losses arising during the period, net of tax benefits of $5 and $875	(11		)	(1,360		)
Reclassification adjustment for gains included in income, net of taxes of $ - and $89	—			141
Change in foreign currency translation adjustments	(3,560		)	(8,755		)
Other comprehensive loss	(3,571		)	(9,974		)
Comprehensive loss	$	(127,244	)	$	(109,633	)

See accompanying notes to consolidated financial statements.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 1

CONSOLIDATED BALANCE SHEETS	(unaudited, in 000s, except  share and per share amounts)
As of	July 31, 2016			July 31, 2015			April 30, 2016
ASSETS
Cash and cash equivalents	$	306,871		$	1,299,382		$	896,801
Cash and cash equivalents - restricted	122,025			61,040			104,110
Receivables, less allowance for doubtful accounts of $56,381, $53,771 and $57,011	103,425			103,194			153,116
Deferred tax assets and income taxes receivable	—			160,390			—
Prepaid expenses and other current assets	74,929			80,550			65,441
Investments in available-for-sale securities	1,123			406,360			1,133
Total current assets	608,373			2,110,916			1,220,601
Mortgage loans held for investment, less allowance for loan losses of $5,310, $7,659 and $5,518	192,375			230,130			202,385
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120	284,114			297,321			293,565
Intangible assets, net	419,909			417,009			433,885
Goodwill	470,942			454,394			470,757
Deferred tax assets and income taxes receivable	90,498			11,377			120,123
Other noncurrent assets	97,331			108,307			105,909
Total assets	$	2,163,542		$	3,629,454		$	2,847,225
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Customer banking deposits	$	—		$	476,732		$	—
Accounts payable and accrued expenses	157,085			116,855			259,586
Accrued salaries, wages and payroll taxes	43,516			33,447			161,786
Accrued income taxes and reserves for uncertain tax positions	216,390			245,541			373,754
Current portion of long-term debt	864			799			826
Deferred revenue and other current liabilities	191,304			316,880			243,653
Total current liabilities	609,159			1,190,254			1,039,605
Long-term debt	1,491,790			501,960			1,491,375
Deferred tax liabilities and reserves for uncertain tax positions	116,709			137,603			132,960
Deferred revenue and other noncurrent liabilities	145,691			130,210			160,182
Total liabilities	2,363,349			1,960,027			2,824,122
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 258,179,891, 316,628,110 and 260,218,666	2,582			3,166			2,602
Additional paid-in capital	748,924			773,783			758,230
Accumulated other comprehensive loss	(14,804		)	(8,234		)	(11,233		)
Retained earnings (deficit)	(180,631		)	1,679,234			40,347
Less treasury shares, at cost, of 39,087,239, 40,312,382 and 39,701,409	(755,878		)	(778,522		)	(766,843		)
Total stockholders' equity (deficiency)	(199,807		)	1,669,427			23,103
Total liabilities and stockholders' equity	$	2,163,542		$	3,629,454		$	2,847,225

See accompanying notes to consolidated financial statements.

2 Q1 FY2017 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	(unaudited, in 000s)
Three months ended July 31,	2016			2015
NET CASH USED IN OPERATING ACTIVITIES	$	(475,675	)	$	(378,246	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities of and payments received on available-for-sale securities	58			32,103
Principal payments on mortgage loans held for investment, net	8,427			8,537
Capital expenditures	(6,246		)	(8,689		)
Payments made for business acquisitions, net of cash acquired	(1,635		)	(12,271		)
Franchise loans:
Loans funded	(2,219		)	(2,582		)
Payments received	6,473			11,434
Other, net	220			3,562
Net cash provided by investing activities	5,078			32,094
CASH FLOWS FROM FINANCING ACTIVITIES:
Customer banking deposits, net	—			(268,532		)
Dividends paid	(48,514		)	(55,063		)
Repurchase of common stock, including shares surrendered	(45,312		)	(17,756		)
Proceeds from exercise of stock options	1,639			13,015
Other, net	(24,779		)	(22,413		)
Net cash used in financing activities	(116,966		)	(350,749		)
Effects of exchange rate changes on cash	(2,367		)	(10,907		)
Net decrease in cash and cash equivalents	(589,930		)	(707,808		)
Cash and cash equivalents at beginning of the period	896,801			2,007,190
Cash and cash equivalents at end of the period	$	306,871		$	1,299,382
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received	$	61,289		$	75,358
Interest paid on borrowings	15,519			15,381
Accrued additions to property and equipment	10,147			5,977
Accrued purchase of common stock	8,895			—

See accompanying notes to consolidated financial statements.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 3

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                  (unaudited)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION –The consolidated balance sheets as of July 31, 2016 and 2015, the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2016 and 2015, and the condensed consolidated statements of cash flows for the three months ended July 31, 2016 and 2015 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows as of July 31, 2016 and 2015 and for all periods presented have been made.

"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and its subsidiaries, as appropriate to the context.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U. S. (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our April 30, 2016 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2016 or for the year then ended are derived from our April 30, 2016 Annual Report to Shareholders on Form 10-K.

MANAGEMENT ESTIMATES –The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, valuation allowances on deferred tax assets, reserves for uncertain tax positions and related matters. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates.

SEASONALITY OF BUSINESS –Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of January through April. Therefore, results for interim periods are not indicative of results to be expected for the full year.

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See notes 11 and 12 for additional information on litigation, claims and other loss contingencies related to our discontinued operations.

NEW ACCOUNTING PRONOUNCEMENTS – In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance must be applied retrospectively to all periods presented. We adopted this guidance effective May 1, 2016. Prior periods have been retrospectively adjusted to conform to the current period presentation. Debt issuance costs previously reported as other current assets and other noncurrent assets have been reclassified to long-term debt. This guidance did not have a material effect on our consolidated financial statements.

NOTE 2: LOSS PER SHARE AND STOCKHOLDERS' EQUITY

LOSS PER SHARE – Basic and diluted loss per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. The dilutive effect of potential common shares is included in diluted earnings per share except in those periods with a loss from continuing operations. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 4.7 million shares for the three months ended July 31, 2016, and 5.0 million shares for the three months ended July 31, 2015, as the effect would be antidilutive due to the net loss from continuing operations during those periods.

4 Q1 FY2017 Form 10-Q | H&R Block, Inc.

The computations of basic and diluted earnings per share from continuing operations are as follows:

(in 000s, except per share amounts)
	Three months ended July 31,
	2016			2015
Net loss from continuing operations attributable to shareholders	$	(121,026	)	$	(96,505	)
Amounts allocated to participating securities	(124		)	(102		)
Net loss from continuing operations attributable to common shareholders	$	(121,150	)	$	(96,607	)
Basic weighted average common shares	220,484			275,765
Potential dilutive shares	—			—
Dilutive weighted average common shares	220,484			275,765
Loss per share from continuing operations attributable to common shareholders:
Basic	$	(0.55	)	$	(0.35	)
Diluted	(0.55		)	(0.35		)

The weighted average shares outstanding for the three months ended July 31, 2016 decreased to 220.5 million from 275.8 million for the three months ended July 31, 2015, primarily due to share repurchases completed in the prior and current year. During the three months ended July 31, 2016, we purchased and immediately retired 2.0 million shares at an aggregate cost of $48.6 million (average price of $23.84 per share). The cost of shares retired during the current period was allocated to the components of stockholders’ equity as follows:

	(in 000s)
Common stock	$	20
Additional paid-in-capital	1,223
Retained earnings	47,351
Total	$	48,594

STOCK-BASED COMPENSATION – In addition to the shares repurchased as discussed above, during the three months ended July 31, 2016, we acquired 0.2 million shares of our common stock at an aggregate cost of $5.6 million. These shares represent shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards. During the three months ended July 31, 2015, we acquired 0.6 million shares at an aggregate cost of $17.8 million for similar purposes.

During the three months ended July 31, 2016 and 2015, we issued 0.9 million and 1.6 million shares of common stock, respectively, due to the vesting or exercise of stock-based awards.

During the three months ended July 31, 2016, we granted equity awards equivalent to 1.1 million shares under our stock-based compensation plans, consisting primarily of nonvested units. Nonvested units generally either vest over a three-year period with one-third vesting each year or cliff vest at the end of a three-year period, although the Compensation Committee may in limited circumstances approve grants with a modified vesting schedule. Stock-based compensation expense of our continuing operations totaled $5.5 million and $6.0 million for the three months ended July 31, 2016 and 2015, respectively. As of July 31, 2016, unrecognized compensation cost for stock options totaled $0.5 million, and for nonvested shares and units totaled $48.7 million.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 5

NOTE 3: RECEIVABLES

Receivables consist of the following:

(in 000s)
As of	July 31, 2016					July 31, 2015					April 30, 2016
	Short-term			Long-term		Short-term			Long-term		Short-term			Long-term
Loans to franchisees	$	47,905		$	46,461	$	56,277		$	57,792	$	50,000		$	46,284
Receivables for tax preparation and related fees	39,115			5,528		39,927			6,103		52,327			5,528
Cash Back® receivables	4,515			—		2,777			—		37,663			—
Emerald Advance lines of credit	24,857			111		20,321			598		25,092			869
Royalties from franchisees	6,885			—		4,509			—		9,997			—
Other	36,529			4,414		33,154			7,934		35,048			7,726
	159,806			56,514		156,965			72,427		210,127			60,407
Allowance for doubtful accounts	(56,381		)	—		(53,771		)	—		(57,011		)	—
	$	103,425		$	56,514	$	103,194		$	72,427	$	153,116		$	60,407

Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets.

LOANS TO FRANCHISEES –Franchisee loan balances as of July 31, 2016 and 2015 and April 30, 2016, consisted of $31.5 million, $38.4 million and $35.1 million, respectively, in revolving lines of credit primarily for the purpose of funding off-season working capital needs and $62.8 million, $75.7 million and $61.2 million, respectively, in term loans made primarily to finance the purchase of franchises.

As of July 31, 2016 and 2015 and April 30, 2016, loans with a principal balance of $2.6 million, $1.5 million and $0.3 million, respectively, were more than 30 days past due. We had no loans to franchisees on non-accrual status.

CANADIAN CASH BACK® PROGRAM –Refunds advanced under the Cash Back program are not subject to credit approval, therefore the primary indicator of credit quality is the age of the receivable amount. Cash Back amounts are generally received within 60 days of filing the client's return. As of July 31, 2016 and 2015 and April 30, 2016, $0.6 million, $0.6 million and $1.5 million of Cash Back balances were more than 60 days old, respectively.

H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT –Beginning in fiscal year 2016, we no longer originate H&R Block Emerald Advance® lines of credit (EAs). These lines of credit are originated by BofI Federal Bank, a federal savings bank (BofI), and we purchase a participation interest in them.

We review the credit quality of our EA receivables based on pools, which are segregated by the year of origination, with older years being deemed more unlikely to be repaid. These amounts as of July 31, 2016, by year of origination, are as follows:

(in 000s)
Credit Quality Indicator – Year of origination:
2016	$	9,224
2015 and prior	182
Revolving loans	15,562
	$	24,968

As of July 31, 2016 and 2015 and April 30, 2016, $21.4 million, $17.4 million and $21.1 million of EAs were on non-accrual status and classified as impaired, or more than 60 days past due, respectively.

6 Q1 FY2017 Form 10-Q | H&R Block, Inc.

ALLOWANCE FOR DOUBTFUL ACCOUNTS –Activity in the allowance for doubtful accounts for our receivables for the three months ended July 31, 2016 and 2015 is as follows:

(in 000s)
	EAs		All Other			Total
Balances as of May 1, 2016	$	9,007	$	48,004		$	57,011
Provision	451		966			1,417
Charge-offs	—		(2,047		)	(2,047		)
Balances as of July 31, 2016	$	9,458	$	46,923		$	56,381
Balances as of May 1, 2015	$	7,353	$	47,174		$	54,527
Provision	—		713			713
Charge-offs	—		(1,469		)	(1,469		)
Balances as of July 31, 2015	$	7,353	$	46,418		$	53,771

NOTE 4: MORTGAGE LOANS HELD FOR INVESTMENT

The composition of our mortgage loan portfolio is as follows:

(dollars in 000s)
As of	July 31, 2016					July 31, 2015					April 30, 2016
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	102,535		52	%	$	124,752		53	%	$	108,251		52	%
Fixed-rate loans	93,539			48	%	111,096			47	%	97,957			48	%
	196,074			100	%	235,848			100	%	206,208			100	%
Unamortized deferred fees and costs	1,611					1,941					1,695
Less: Allowance for loan losses	(5,310		)			(7,659		)			(5,518		)
	$	192,375				$	230,130				$	202,385

Our loan loss allowance as a percent of mortgage loans was 2.7% as of July 31, 2016, compared to 3.2% as of July 31, 2015 and 2.7% as of April 30, 2016.

Activity in the allowance for loan losses for the three months ended July 31, 2016 and 2015 is as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance at beginning of the period	$	5,518		$	7,886
Provision	—			(28		)
Recoveries	370			365
Charge-offs	(578		)	(564		)
Balance at end of the period	$	5,310		$	7,659

Detail of the aging of the mortgage loans in our portfolio as of July 31, 2016 is as follows:

(in 000s)
	Less than 60 Days Past Due		60 – 89 Days Past Due		90+ Days Past Due(1)		Total Past Due		Current		Total
Purchased from SCC	$	8,849	$	745	$	38,503	$	48,097	$	68,392	$	116,489
All other	1,457		349		5,236		7,042		72,543		79,585
	$	10,306	$	1,094	$	43,739	$	55,139	$	140,935	$	196,074

⁽¹⁾  We do not accrue interest on loans past due 90 days or more.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 7

NOTE 5: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three months ended July 31, 2016 and 2015 are as follows:

(in 000s)
	Goodwill			Accumulated Impairment Losses			Net
Balances as of April 30, 2016	$	503,054		$	(32,297	)	$	470,757
Acquisitions	23			—			23
Disposals and foreign currency changes, net	162			—			162
Impairments	—			—			—
Balances as of July 31, 2016	$	503,239		$	(32,297	)	$	470,942
Balances as of April 30, 2015	$	474,128		$	(32,297	)	$	441,831
Acquisitions	14,030			—			14,030
Disposals and foreign currency changes, net	(1,467		)	—			(1,467		)
Impairments	—			—			—
Balances as of July 31, 2015	$	486,691		$	(32,297	)	$	454,394

The increase in goodwill during the period ended July 31, 2015, resulted from acquired franchisee and competitor businesses where the purchase price allocation had not been finalized. These allocations were finalized by the end of fiscal year 2016.

We test goodwill for impairment annually or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

8 Q1 FY2017 Form 10-Q | H&R Block, Inc.

Components of the intangible assets are as follows:

(in 000s)
	Gross Carrying Amount		Accumulated Amortization			Net
As of July 31, 2016:
Reacquired franchise rights	$	319,545	$	(72,977	)	$	246,568
Customer relationships	206,606		(110,696		)	95,910
Internally-developed software	132,897		(99,873		)	33,024
Noncompete agreements	31,492		(26,045		)	5,447
Franchise agreements	19,201		(9,814		)	9,387
Purchased technology	54,700		(27,425		)	27,275
Acquired assets pending final allocation (1)	2,298		—			2,298
	$	766,739	$	(346,830	)	$	419,909
As of July 31, 2015:
Reacquired franchise rights	$	294,918	$	(51,233	)	$	243,685
Customer relationships	169,998		(83,471		)	86,527
Internally-developed software	120,522		(84,215		)	36,307
Noncompete agreements	30,576		(24,091		)	6,485
Franchise agreements	19,201		(8,534		)	10,667
Purchased technology	54,700		(21,362		)	33,338
	$	689,915	$	(272,906	)	$	417,009
As of April 30, 2016:
Reacquired franchise rights	$	319,354	$	(68,284	)	$	251,070
Customer relationships	206,607		(104,072		)	102,535
Internally-developed software	131,161		(95,768		)	35,393
Noncompete agreements	31,499		(25,572		)	5,927
Franchise agreements	19,201		(9,494		)	9,707
Purchased technology	54,700		(25,909		)	28,791
Acquired assets pending final allocation (1)	462		—			462
	$	762,984	$	(329,099	)	$	433,885

⁽¹⁾    Represents recent business acquisitions, for which final purchase price allocations have not yet been determined.

Amortization of intangible assets for the three months ended July 31, 2016 and 2015 was $18.0 million and $16.6 million, respectively. Estimated amortization of intangible assets for fiscal years 2017, 2018, 2019, 2020 and 2021 is $76.7 million, $66.1 million, $51.7 million, $37.3 million and $26.1 million, respectively.

NOTE 6: LONG-TERM DEBT

The components of long-term debt are as follows:

							(in 000s)
As of	July 31, 2016			July 31, 2015			April 30, 2016
Senior Notes, 4.125%, due October 2020	$	650,000		$	—		$	650,000
Senior Notes, 5.500%, due November 2022	500,000			500,000			500,000
Senior Notes, 5.250%, due October 2025	350,000			—			350,000
Capital lease obligation	7,229			8,031			7,435
Debt issuance costs and discounts	(14,575		)	(5,272		)	(15,234		)
	1,492,654			502,759			1,492,201
Less: Current portion	(864		)	(799		)	(826		)
	$	1,491,790		$	501,960		$	1,491,375

H&R Block, Inc. | Q1 FY2017 Form 10-Q 9

Effective May 1, 2016, we adopted the provisions of ASU 2015-3 on a retrospective basis. Accordingly, debt issuance costs related to our Senior Notes are included in long-term debt in the consolidated balance sheets. Amounts for prior periods have been retrospectively adjusted to conform to the current period presentation. See note 1 for additional information.

In September 2015, we entered into a Credit and Guarantee Agreement (2015 CLOC). The 2015 CLOC provides for an unsecured senior revolving credit facility in the aggregate principal amount of $2.0 billion, which includes a $200.0 million sublimit for swingline loans and a $100.0 million sublimit for standby letters of credit. We may request increases in the aggregate principal amount of the revolving credit facility of up to $500.0 million, subject to obtaining commitments from lenders therefor and meeting certain other conditions. The 2015 CLOC will mature on September 21, 2020, unless extended pursuant to the terms of the 2015 CLOC, at which time all outstanding amounts thereunder will be due and payable. The 2015 CLOC includes an annual facility fee, which will vary depending our then current credit ratings.

The 2015 CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier termination and contains customary representations, warranties, covenants and events of default, including, without limitation: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio calculated on a consolidated basis of no greater than (a) 3.50 to 1.00 as of the last day of each fiscal quarter ending on April 30, July 31, and October 31 of each year and (b) 4.50 to 1.00 as of the last day of each fiscal quarter ending on January 31 of each year; (2) a covenant requiring us to maintain an interest coverage (EBITDA-to-interest expense) ratio calculated on a consolidated basis of not less than 2.50 to 1.00 as of the last date of any fiscal quarter; and (3) covenants restricting our ability to incur certain additional debt, incur liens, merge or consolidate with other companies, sell or dispose of assets (including equity interests), liquidate or dissolve, engage in certain transactions with affiliates or enter into certain restrictive agreements. The 2015 CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the 2015 CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with these requirements as of July 31, 2016.

As of July 31, 2016, amounts available to borrow under the 2015 CLOC were limited by the debt-to-EBITDA covenant in the 2015 CLOC Agreement to approximately $1.3 billion, however our cash needs at July 31 generally do not require us to borrow on our CLOC at that time. We had no balance outstanding under the 2015 CLOC as of July 31, 2016. We subsequently borrowed $50 million under the 2015 CLOC on August 31, 2016 for seasonal working capital needs.

NOTE 7: FAIR VALUE

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying amounts and estimated fair values of our financial instruments are as follows:

(in 000s)
As of	July 31, 2016				July 31, 2015				April 30, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	$	306,871	$	306,871	$	1,299,382	$	1,299,382	$	896,801	$	896,801
Cash and cash equivalents - restricted	122,025		122,025		61,040		61,040		104,110		104,110
Receivables, net - short-term	103,425		103,425		103,194		103,194		153,116		153,116
Mortgage loans held for investment, net	192,375		185,057		230,130		184,277		202,385		190,503
Investments in AFS securities	1,123		1,123		407,426		407,426		1,133		1,133
Receivables, net - long-term	56,514		56,514		72,427		72,427		60,407		60,407
Liabilities:
Customer banking deposits	—		—		477,145		473,720		—		—
Long-term debt	1,492,654		1,606,364		502,759		552,431		1,492,201		1,566,098
Contingent consideration	8,347		8,347		10,650		10,650		8,657		8,657

10 Q1 FY2017 Form 10-Q | H&R Block, Inc.

Fair value estimates, methods and assumptions are set forth below. Fair value was not estimated for assets and liabilities that are not considered financial instruments.

▪ Cash and cash equivalents, including restricted - Fair value approximates the carrying amount (Level 1).

▪ Receivables, net - short-term - For short-term balances the carrying values reported in the balance sheet approximate fair market value due to the relative short-term nature of the respective instruments (Level 1).

▪ Mortgage loans held for investment, net - The fair value of mortgage loans held for investment is estimated using a third-party pricing service. The fair value is determined using the present value of expected future cash flows at the asset level, assuming future prepayments and using discount factors determined by prices obtained for residential loans with similar characteristics in the secondary market, as discounted for illiquid assets. Quarterly, we perform analytics to assess the reasonableness of the fair value received from the third-party pricing service based on changes in the portfolio and changes in market conditions. We evaluate whether adjustments to third-party pricing is necessary and historically, we have not made adjustments to prices obtained from our third-party pricing service (Level 3).

▪ Investments in available-for-sale (AFS) securities - For mortgage-backed securities, we historically used a third-party pricing service to determine fair value. The service's pricing model was based on market data and utilized available trade, bid and other market information for similar securities (Level 2). The fair value of our investment in common stock was determined based on quoted market prices (Level 1).

▪ Receivables, net - long-term - The carrying values for the long-term portion of loans to franchisees approximate fair market value due to variable interest rates, low historical delinquency rates and franchise territories serving as collateral (Level 1). Long-term EA receivables are carried at net realizable value which approximates fair value (Level 3). Net realizable value is determined based on historical collection rates.

▪ Customer banking deposits - The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, checking, money market and savings accounts, was equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits was estimated by discounting the future cash flows using the rates offered by HRB Bank for products with similar remaining maturities (Level 3).

▪ Long-term debt - The fair value of our Senior Notes is based on quotes from multiple banks (Level 2).

▪ Contingent consideration - Fair value approximates the carrying amount (Level 3).

NOTE 8: INCOME TAXES

We file a consolidated federal income tax return in the United States (U.S.) with the Internal Revenue Service (IRS) and file tax returns in various state and foreign jurisdictions. Tax returns are typically examined and settled upon completion of the examination, with tax controversies settled either at the exam level or through the appeals process. The Company currently does not have a U.S. federal income tax return under examination. Our U.S. federal returns for 2011 and all prior periods have been audited by the IRS and are closed. Our return for 2012 has been audited by the IRS but remains open until the expiration of the three year statute of limitations in the fall of 2016. Our U.S. federal returns for 2013 and after have not been audited and remain open to examination. With respect to state and local jurisdictions and countries outside the United States, we and our subsidiaries are typically subject to examination for three to six years after the income tax returns have been filed. Although the outcome of the audits is always uncertain, we believe that adequate amounts of tax, interest and penalties have been provided for in the consolidated financial statements for any adjustments that might be incurred due to state, local or foreign audits.

We had gross unrecognized tax benefits of $106.0 million, $76.5 million and $111.5 million as of July 31, 2016 and 2015 and April 30, 2016, respectively. The gross unrecognized tax benefits decreased$5.5 million and $9.8 million during the three months ended July 31, 2016 and 2015, respectively. The decrease in unrecognized tax benefits during the three months ending July 31, 2016 is primarily related to favorable audit settlements in various states. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $13.9 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations and anticipated closure of various state matters currently under exam. The portion of unrecognized benefits expected to be cash settled within the next twelve months amounts to $7.5 million and is included in accrued income taxes on

H&R Block, Inc. | Q1 FY2017 Form 10-Q 11

our consolidated balance sheet. The remaining liability for uncertain tax positions is classified as long-term and is included in other noncurrent liabilities in the consolidated balance sheet.

Consistent with prior years, our pretax loss for the three months ended July 31, 2016 is expected to be offset by income in the fourth quarter due to the established pattern of seasonality in our primary business operations. As such, management has determined that it is at least more-likely-than-not that realization of tax benefits recorded in our financial statements will occur within our fiscal year. The amount of tax benefit recorded reflects management’s estimate of the annual effective tax rate applied to the year-to-date loss from continuing operations. Certain discrete tax adjustments are also reflected in income tax expense for the periods presented.

A discrete income tax benefit of $6.8 million was recorded in the three months ended July 31, 2016, compared to a discrete tax benefit of $20.6 million in the same period of the prior year. The discrete tax benefit recorded in the current period resulted primarily from favorable settlements of state audits. The discrete tax benefit recorded in the prior year resulted primarily from a law change enacted in the state of Missouri.

Our effective tax rate for continuing operations, including the effects of discrete income tax items was 40.5% and 48.4% for the three months ended July 31, 2016 and 2015, respectively. Discrete items increased management's estimate of the annualized effective tax rate for the three months ended July 31, 2016 and 2015 by 3.3% and 11.0%, respectively. Due to the loss in both periods, a discrete tax benefit in either period increases the tax rate while an item of discrete tax expense decreases the tax rate. The impact of discrete tax items combined with the seasonal nature of our business can cause the effective tax rate through our first quarter to be significantly different than the rate for our full fiscal year.

NOTE 9: OTHER INCOME AND OTHER EXPENSES

The following table shows the components of other income and other expenses:

(in 000s)
	Three months ended July 31,
	2016			2015
Other income, net:
Mortgage loans and real estate owned, net	$	1,537		$	—
Interest and gains on AFS securities	31			—
Other	1,400			433
	$	2,968		$	433
Other expenses, net:
Foreign currency losses	$	(21	)	$	(4,599	)
Other	(306		)	(386		)
	$	(327	)	$	(4,985	)

In connection with our deregistration as a savings and loan holding company (SLHC), we no longer present interest income on mortgage loans held for investment and various other investments as revenues. Effective September 1, 2015, these amounts are prospectively reported in other income on the consolidated statements of operations and comprehensive loss.

12 Q1 FY2017 Form 10-Q | H&R Block, Inc.

NOTE 10: COMMITMENTS AND CONTINGENCIES

Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	204,342		$	189,779
Amounts deferred for new extended service plans issued	978			983
Revenue recognized on previous deferrals	(31,650		)	(31,069		)
Balance, end of the period	$	173,670		$	159,693

We accrued $5.8 million, $7.6 million and $7.0 million as of July 31, 2016 and 2015 and April 30, 2016, respectively, related to estimated losses under the standard guarantee, which is included with assisted tax preparation services. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets.

We have accrued estimated contingent consideration totaling $8.3 million, $10.7 million and $8.7 million as of July 31, 2016 and 2015 and April 30, 2016, respectively, related to acquisitions, with amounts recorded in deferred revenue and other liabilities. Estimates of contingent payments are typically based on expected financial performance of the acquired business and economic conditions at the time of acquisition. Should actual results differ from our assumptions, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations.

We have contractual commitments to fund certain franchises with approved revolving lines of credit. Our total obligation under these lines of credit was $59.4 million at July 31, 2016, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $28.1 million.

NOTE 11: LITIGATION AND RELATED CONTINGENCIES

We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise, including as described below. The matters described below are not all of the lawsuits to which we are subject. In some of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims over an extended period of time.

The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business activities, including as described below.

We accrue liabilities for litigation, claims and other loss contingencies and any related settlements (each referred to, individually, as a "matter" and, collectively, as "matters") when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been accrued for a number of the matters noted below. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 13

For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of July 31, 2016. While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our consolidated financial position, results of operations and cash flows. As of July 31, 2016 and 2015 and April 30, 2016, we accrued liabilities of $2.3 million, $9.3 million and $2.3 million, respectively, for matters addressed in this note.

For some matters where a liability has not been accrued, we are able to estimate a reasonably possible loss or range of loss. This estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Those matters for which an estimate is not reasonably possible are not included within this estimated range. Therefore, this estimated range of reasonably possible loss represents what we believe to be an estimate of reasonably possible loss only for certain matters meeting these criteria. It does not represent our maximum loss exposure. For those matters, and for matters where a liability has been accrued, as of July 31, 2016, we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations.

On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been, remains, and may in the future be subject to litigation, claims, including indemnification and contribution claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims, and lawsuits include actions by regulators, third parties seeking indemnification, including depositors, underwriters, and securitization trustees, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims, and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure, and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws, and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters.

14 Q1 FY2017 Form 10-Q | H&R Block, Inc.

On May 31, 2012, a lawsuit was filed by Homeward Residential, Inc. (Homeward) in the Supreme Court of the State of New York, County of New York, against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Index No. 651885/2012). SCC removed the case to the United States District Court for the Southern District of New York on June 28, 2012 (Case No. 12-cv-5067). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-2 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract, anticipatory breach, indemnity and declaratory judgment in connection with alleged losses incurred as a result of the breach of representations and warranties relating to SCC and to loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses, as well as a repurchase of all loans due to alleged misrepresentations by SCC as to itself and as to the loans' compliance with its underwriting standards and the value of underlying real estate. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase, anticipatory breach, indemnity, and declaratory judgment. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

On September 28, 2012, a second lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 12-cv-7319). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-3 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 96 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12, is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

On April 5, 2013, a third lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC. The suit, styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 13-cv-2107), was filed as a related matter to the September 2012 Homeward suit mentioned above. In this April 2013 lawsuit, the plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2007-4 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 159 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12, is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. SCC has received notices of claims for indemnification relating to lawsuits to which underwriters or depositors are party. Based on information currently available to SCC, it believes that the 22 lawsuits in which notice of a claim has been made involve 39 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al., filed in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) and settled as to SCC in August 2015), and has not had control of this litigation or any settlements thereof, SCC does not have precise information about the amount of damages or other remedies being asserted, the defenses to the claims in such lawsuits or the terms of any settlements of such lawsuits. SCC therefore cannot reasonably estimate the amount of potential losses or associated fees and expenses that may be incurred in connection with such lawsuits, which may be material. Additional lawsuits against the underwriters or depositors may be filed in the future, and SCC may receive additional notices of claims for indemnification from underwriters or depositors with respect to existing or new lawsuits or settlements of such lawsuits. Certain of the notices received included, and future notices may include, a reservation of rights, which are referred to as "reserved

H&R Block, Inc. | Q1 FY2017 Form 10-Q 15

contribution rights," that encompasses a right of contribution which may become operative if indemnification is unavailable or insufficient to cover all of the losses and expenses involved. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, nor have we accrued a liability related to any of these claims or rights.

Securitization trustees also are, or have been, involved in lawsuits related to securitization transactions in which SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers or other parties breached their representations and warranties or otherwise failed to fulfill their obligations, including that securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory requirements by failing to properly protect the certificate holders’ interests. SCC may receive notices for indemnification with respect to existing or new lawsuits or settlements of such lawsuits in its capacity as originator, depositor, or servicer. We have not concluded that a loss related to any indemnification claims by securitization trustees is probable, nor have we accrued a liability for such claims.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

Compliance Fee Litigation. On April 16, 2012, a putative class action lawsuit was filed against us in the Circuit Court of Jackson County, Missouri styled Manuel H. Lopez III v. H&R Block, Inc., et al. (Case # 1216CV12290) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all Missouri citizens who were charged the compliance fee, and asserts claims of violation of the Missouri Merchandising Practices Act, money had and received, and unjust enrichment. We filed a motion to compel arbitration of the 2011 claims. The court denied the motion. We filed an appeal. On May 6, 2014, the Missouri Court of Appeals, Western District, reversed the ruling of the trial court and remanded the case for further consideration of the motion. On March 12, 2015, the trial court denied the motion on remand. We filed an additional appeal. On March 8, 2016, the appellate court affirmed the decision of the trial court. We filed an application for transfer of the appeal in the Supreme Court of Missouri, which was denied. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK)concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff originally sought to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserted claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. In June 2014, the court denied class certification of the remaining 2012 claims. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. In January 2016, the plaintiff filed an amended complaint asserting claims of violation of Missouri and California state consumer laws, money had and received, and unjust enrichment, along with a motion to certify a class of all persons (excluding citizens of Missouri) who were charged the compliance fee in the state of California. We subsequently filed a motion for summary judgment on all claims. On April 29, 2016, the court granted our motion for summary judgment on all claims and denied the plaintiff's motion for class certification as moot. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

LITIGATION, CLAIMS AND OTHER LOSS CONTINGENCIES PERTAINING TO OTHER DISCONTINUED OPERATIONS –

Express IRA Litigation. On January 2, 2008, the Mississippi Attorney General in the Chancery Court of Hinds County, Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express IRA product that is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial Advisors, Inc., et al. The complaint alleges fraudulent business practices, deceptive acts and practices, common law fraud and breach of fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief, disgorgement of profits, damages and restitution, civil penalties and punitive damages. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation through an indemnification agreement.

16 Q1 FY2017 Form 10-Q | H&R Block, Inc.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

NOTE 12: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of residential mortgage-backed securities (RMBSs). In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. Claims under these representations and warranties together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims." These representations and warranties varied based on the nature of the transaction and the buyer's or insurer's requirements, but generally pertained to the ownership of the loan, the validity of the lien securing the loan, borrower fraud, the loan's compliance with the criteria for inclusion in the transaction, including compliance with SCC's underwriting standards or loan criteria established by the buyer, ability to deliver required documentation, and compliance with applicable laws. Representations and warranties related to borrower fraud in whole loan sale transactions to institutional investors, which were generally securitized by such investors and represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan.

Representation and warranty claims received by SCC have primarily related to alleged breaches of representations and warranties related to a loan's compliance with the underwriting standards established by SCC at origination and borrower fraud for loans originated in calendar years 2006 and 2007. SCC has received claims representing an original principal amount of $2.6 billion since May 1, 2008, of which $1.9 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS –SCC has entered into tolling agreements with counterparties that have made a significant portion of previously denied representation and warranty claims. While tolling agreements remain in effect, they toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC.

SCC has engaged in discussions with counterparties since fiscal year 2013 regarding the bulk settlement of previously denied and potential future representation and warranty and other claims against SCC. Based on settlement discussions with counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the claims that are the subject of these discussions, and SCC has utilized that approach in prior fiscal years to resolve certain of these claims. On December 18, 2015, SCC entered into settlement agreements with two additional counterparties to resolve certain additional claims, subject to the terms and conditions set forth in these settlement agreements. On July 13, 2016, SCC entered into a settlement agreement with an additional counterparty to resolve certain additional claims. The amounts paid under these settlement agreements were fully

H&R Block, Inc. | Q1 FY2017 Form 10-Q 17

covered by prior accruals. In the event that the ongoing efforts to settle are not successful, SCC believes claim volumes may increase or litigation may result.

SCC will continue to vigorously contest any request for repurchase when it has concluded that a valid basis for repurchase does not exist. SCC's decision whether to engage in bulk settlement discussions is based on factors that vary by counterparty or type of counterparty and include the considerations used by SCC in determining its loss estimate, described below under "Liability for Estimated Contingent Losses."

LIABILITY FOR ESTIMATED CONTINGENT LOSSES –SCC accrues a liability for losses related to representation and warranty claims when those losses are believed to be both probable and reasonably estimable. Development of loss estimates is subject to a high degree of management judgment and estimates may vary significantly period to period. SCC's loss estimate as of July 31, 2016, is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and the factors mentioned below. These factors include the terms of prior bulk settlements, the terms expected to result from ongoing bulk settlement discussions, and an assessment of, among other things, historical claim results, threatened claims, terms and provisions of related agreements, counterparty willingness to pursue a settlement, legal standing of counterparties to provide a comprehensive settlement, bulk settlement methodologies used and publicly disclosed by other market participants, the potential pro-rata realization of the claims as compared to all claims and other relevant facts and circumstances when developing its estimate of probable loss. SCC believes that the most significant of these factors are the terms expected to result from ongoing bulk settlement discussions, which have been primarily influenced by the bulk settlement methodologies used and publicly disclosed by other market participants and the anticipated pro-rata realization of the claims of particular counterparties as compared to the anticipated realization if all claims and litigation were resolved together with payment of SCC's related administration and legal expense. Changes in any one of the factors mentioned above could significantly impact the estimate.

The liability is included in deferred revenue and other current liabilities on the consolidated balance sheets. A rollforward of SCC's accrued liability for these loss contingencies is as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	65,265		$	149,765
Provisions	235			—
Payments	(40,000		)	—
Balance, end of the period	$	25,500		$	149,765

On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the RMBS transactions into which SCC entered. However this decision would not affect representation and warranty claims and lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement or a suit was timely filed. It is possible that in response to the statute of limitations rulings in the ACE case and similar rulings in other state and federal courts, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may seek to distinguish certain aspects of the ACE decision, pursue alternate legal theories of recovery, or assert claims against other contractual parties such as securitization trustees. For example, a recent ruling by a New York intermediate appellate court allowed a counterparty to pursue litigation on additional loans in the same trust even though only some of the loans complied with the condition precedent of timely pre-suit notice and opportunity to cure or repurchase. The impact on SCC, if any, from alternative legal theories seeking to avoid or distinguish the ACE decision, or judicial limitations on the ACE decision, is unclear. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations.

SCC believes it is reasonably possible that future losses related to representation and warranty claims may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably estimable possible losses in excess of amounts accrued is not material. This estimated range is based on the best information

18 Q1 FY2017 Form 10-Q | H&R Block, Inc.

currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses.

As described more fully in note 11, losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters, depositors, and securitization trustees in securitization transactions in which SCC participated. These indemnification claims or reserved contribution rights are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, have not accrued a liability for these claims or rights, and are not able to estimate a reasonably possible loss or range of loss for these claims or rights. Accordingly, neither the accrued liability described above totaling $25.5 million, nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims or reserved contribution rights. There can be no assurances as to the outcome or impact of these indemnification claims or reserved contribution rights. In the event of unfavorable outcomes on these claims or rights, the amount required to discharge or settle them could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations and cash flows.

If the amount that SCC is ultimately required to pay with respect to claims and litigation related to its past sales and securitizations of mortgage loans, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants may also attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities. SCC's principal assets, as of July 31, 2016, total approximately $347 million and consist primarily of an intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows.

NOTE 13: 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, our 2015 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 July 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	15,504		$	109,800		$	(119	)	$	125,185
Cost of revenues	—			8,606			202,599			(119		)	211,086
Selling, general and administrative	—			2,480			96,343			—			98,823
Total operating expenses	—			11,086			298,942			(119		)	309,909
Other income, net	—			3,679			4,684			(5,395		)	2,968
Interest expense on external borrowings	—			(21,314		)	(152		)	—			(21,466		)
Other expenses, net	(124,662		)	(2,853		)	(14,314		)	141,502			(327		)
Loss from continuing operations before tax benefit	(124,662		)	(16,070		)	(198,924		)	136,107			(203,549		)
Income tax benefit	(989		)	(5,794		)	(75,740		)	—			(82,523		)
Net loss from continuing operations	(123,673		)	(10,276		)	(123,184		)	136,107			(121,026		)
Net loss from discontinued operations	—			(2,646		)	(1		)	—			(2,647		)
Net loss	(123,673		)	(12,922		)	(123,185		)	136,107			(123,673		)
Other comprehensive loss	(3,571		)	—			(3,571		)	3,571			(3,571		)
Comprehensive loss	$	(127,244	)	$	(12,922	)	$	(126,756	)	$	139,678		$	(127,244	)

H&R Block, Inc. | Q1 FY2017 Form 10-Q 19

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Three months ended July 31, 2015	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	24,767		$	113,044		$	(93	)	$	137,718
Cost of revenues	—			11,755			201,846			(93		)	213,508
Selling, general and administrative	—			4,376			93,816			—			98,192
Total operating expenses	—			16,131			295,662			(93		)	311,700
Other income, net	909			495			554			(1,525		)	433
Interest expense on external borrowings	—			(8,436		)	(139		)	—			(8,575		)
Other expenses, net	(102,593		)	(468		)	(12,255		)	110,331			(4,985		)
Income (loss) from continuing operations before taxes (benefit)	(101,684		)	227			(194,458		)	108,806			(187,109		)
Income taxes (benefit)	(2,025		)	3,286			(91,865		)	—			(90,604		)
Net loss from continuing operations	(99,659		)	(3,059		)	(102,593		)	108,806			(96,505		)
Net loss from discontinued operations	—			(3,154		)	—			—			(3,154		)
Net loss	(99,659		)	(6,213		)	(102,593		)	108,806			(99,659		)
Other comprehensive loss	(9,974		)	(1,187		)	(9,974		)	11,161			(9,974		)
Comprehensive loss	$	(109,633	)	$	(7,400	)	$	(112,567	)	$	119,967		$	(109,633	)

20 Q1 FY2017 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING BALANCE SHEETS											(in 000s)
As of July 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—		$	3,902	$	302,969	$	—		$	306,871
Cash & cash equivalents - restricted	—			29,000		93,025		—			122,025
Receivables, net	—			72,865		30,560		—			103,425
Prepaid expenses and other current assets	—			7,114		67,815		—			74,929
Investments in AFS securities	—			—		1,123		—			1,123
Total current assets	—			112,881		495,492		—			608,373
Mortgage loans held for investment, net	—			192,375		—		—			192,375
Property and equipment, net	—			116		283,998		—			284,114
Intangible assets, net	—			—		419,909		—			419,909
Goodwill	—			—		470,942		—			470,942
Deferred tax assets and income taxes receivable	—			60,312		30,186		—			90,498
Investments in subsidiaries	1,611,887			—		96,216		(1,708,103		)	—
Amounts due from affiliates	—			1,282,286		1,794,655		(3,076,941		)	—
Other noncurrent assets	—			58,311		39,020		—			97,331
Total assets	$	1,611,887		$	1,706,281	$	3,630,418	$	(4,785,044	)	$	2,163,542
Accounts payable and accrued expenses	10,551			7,671		138,863		—			157,085
Accrued salaries, wages and payroll taxes	—			1,889		41,627		—			43,516
Accrued income taxes and reserves for uncertain tax positions	—			52,976		163,414		—			216,390
Current portion of long-term debt	—			—		864		—			864
Deferred revenue and other current liabilities	—			52,420		138,884		—			191,304
Total current liabilities	10,551			114,956		483,652		—			609,159
Long-term debt	—			1,485,426		6,364		—			1,491,790
Deferred tax liabilities and reserves for uncertain tax positions	6,488			8,577		101,644		—			116,709
Deferred revenue and other noncurrent liabilities	—			1,106		144,585		—			145,691
Amounts due to affiliates	1,794,655			—		1,282,286		(3,076,941		)	—
Total liabilities	1,811,694			1,610,065		2,018,531		(3,076,941		)	2,363,349
Stockholders' equity (deficiency)	(199,807		)	96,216		1,611,887		(1,708,103		)	(199,807		)
Total liabilities and stockholders' equity	$	1,611,887		$	1,706,281	$	3,630,418	$	(4,785,044	)	$	2,163,542

H&R Block, Inc. | Q1 FY2017 Form 10-Q 21

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of July 31, 2015	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	286,165	$	1,013,707	$	(490	)	$	1,299,382
Cash & cash equivalents - restricted	—		11,806		49,234		—			61,040
Receivables, net	1		77,539		25,654		—			103,194
Deferred tax assets and income taxes receivable	—		78,184		82,206		—			160,390
Prepaid expenses and other current assets	—		6,374		74,176		—			80,550
Investments in AFS securities	—		404,221		2,139		—			406,360
Total current assets	1		864,289		1,247,116		(490		)	2,110,916
Mortgage loans held for investment, net	—		230,130		—		—			230,130
Property and equipment, net	—		210		297,111		—			297,321
Intangible assets, net	—		—		417,009		—			417,009
Goodwill	—		—		454,394		—			454,394
Deferred tax assets and income taxes receivable	—		41,328		—		(29,951		)	11,377
Investments in subsidiaries	1,259,110		—		108,582		(1,367,692		)	—
Amounts due from affiliates	412,924		131,889		1,423		(546,236		)	—
Other noncurrent assets	—		69,215		39,092		—			108,307
Total assets	$	1,672,035	$	1,337,061	$	2,564,727	$	(1,944,369	)	$	3,629,454
Customer banking deposits	$	—	$	477,222	$	—	$	(490	)	$	476,732
Accounts payable and accrued expenses	1,206		6,679		108,970		—			116,855
Accrued salaries, wages and payroll taxes	—		2,293		31,154		—			33,447
Accrued income taxes and reserves for uncertain tax positions	—		49,240		196,301		—			245,541
Current portion of long-term debt	—		—		799		—			799
Deferred revenue and other current liabilities	—		169,900		146,980		—			316,880
Total current liabilities	1,206		705,334		484,204		(490		)	1,190,254
Long-term debt	—		494,727		7,233		—			501,960
Deferred tax liabilities and reserves for uncertain tax positions	—		26,737		140,817		(29,951		)	137,603
Deferred revenue and other noncurrent liabilities	—		1,660		128,550		—			130,210
Amounts due to affiliates	1,402		21		544,813		(546,236		)	—
Total liabilities	2,608		1,228,479		1,305,617		(576,677		)	1,960,027
Stockholders' equity	1,669,427		108,582		1,259,110		(1,367,692		)	1,669,427
Total liabilities and stockholders' equity	$	1,672,035	$	1,337,061	$	2,564,727	$	(1,944,369	)	$	3,629,454

22 Q1 FY2017 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2016	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	9,025	$	887,776	$	—		$	896,801
Cash & cash equivalents - restricted	—		29,004		75,106		—			104,110
Receivables, net	—		71,882		81,234		—			153,116
Prepaid expenses and other current assets	—		6,925		58,516		—			65,441
Investments in AFS securities	—		—		1,133		—			1,133
Total current assets	—		116,836		1,103,765		—			1,220,601
Mortgage loans held for investment, net	—		202,385		—		—			202,385
Property and equipment, net	—		136		293,429		—			293,565
Intangible assets, net	—		—		433,885		—			433,885
Goodwill	—		—		470,757		—			470,757
Deferred tax assets and income taxes receivable	5,917		77,270		36,936		—			120,123
Investments in subsidiaries	1,738,643		—		108,995		(1,847,638		)	—
Amounts due from affiliates	—		1,307,612		1,714,009		(3,021,621		)	—
Other noncurrent assets	—		62,806		43,103		—			105,909
Total assets	$	1,744,560	$	1,767,045	$	4,204,879	$	(4,869,259	)	$	2,847,225
Accounts payable and accrued expenses	$	1,531	$	18,596	$	239,459	$	—		$	259,586
Accrued salaries, wages and payroll taxes	—		1,766		160,020		—			161,786
Accrued income taxes and reserves for uncertain tax positions	—		52,976		320,778		—			373,754
Current portion of long-term debt	—		—		826		—			826
Deferred revenue and other current liabilities	—		87,982		155,671		—			243,653
Total current liabilities	1,531		161,320		876,754		—			1,039,605
Long-term debt	—		1,484,766		6,609		—			1,491,375
Deferred tax liabilities and reserves for uncertain tax positions	5,917		10,786		116,257		—			132,960
Deferred revenue and other noncurrent liabilities	—		1,178		159,004		—			160,182
Amounts due to affiliates	1,714,009		—		1,307,612		(3,021,621		)	—
Total liabilities	1,721,457		1,658,050		2,466,236		(3,021,621		)	2,824,122
Stockholders' equity	23,103		108,995		1,738,643		(1,847,638		)	23,103
Total liabilities and stockholders' equity	$	1,744,560	$	1,767,045	$	4,204,879	$	(4,869,259	)	$	2,847,225

H&R Block, Inc. | Q1 FY2017 Form 10-Q 23

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Three months ended July 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities:	$	—		$	(57,939	)	$	(417,736	)	$	—		$	(475,675	)
Cash flows from investing:
Sales, maturities of and payments received on AFS securities	—			58			—			—			58
Principal payments on mortgage loans held for investment, net	—			8,427			—			—			8,427
Capital expenditures	—			(5		)	(6,241		)	—			(6,246		)
Payments made for business acquisitions, net of cash acquired	—			—			(1,635		)	—			(1,635		)
Loans made to franchisees	—			(2,202		)	(17		)	—			(2,219		)
Repayments from franchisees	—			6,305			168			—			6,473
Intercompany borrowings (payments)	—			40,217			(92,187		)	51,970			—
Other, net	—			16			204			—			220
Net cash provided by (used in) investing activities	—			52,816			(99,708		)	51,970			5,078
Cash flows from financing:
Dividends paid	(48,514		)	—			—			—			(48,514		)
Repurchase of common stock, including shares surrendered	(45,312		)	—			—			—			(45,312		)
Proceeds from exercise of stock options	1,639			—			—			—			1,639
Intercompany borrowings (payments)	92,187			—			(40,217		)	(51,970		)	—
Other, net	—			—			(24,779		)	—			(24,779		)
Net cash provided by (used in) financing activities	—			—			(64,996		)	(51,970		)	(116,966		)
Effects of exchange rates on cash	—			—			(2,367		)	—			(2,367		)
Net decrease in cash and cash equivalents	—			(5,123		)	(584,807		)	—			(589,930		)
Cash and cash equivalents at beginning of the period	—			9,025			887,776			—			896,801
Cash and cash equivalents at end of the period	$	—		$	3,902		$	302,969		$	—		$	306,871

24 Q1 FY2017 Form 10-Q | H&R Block, Inc.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Three months ended July 31, 2015	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	27,342		$	(405,588	)	$	—		$	(378,246	)
Cash flows from investing:
Sales, maturities of and payments received on AFS securities	—			28,339			3,764			—			32,103
Principal payments on mortgage loans held for investment, net	—			8,537			—			—			8,537
Capital expenditures	—			(19		)	(8,670		)	—			(8,689		)
Payments made for business acquisitions, net of cash acquired	—			—			(12,271		)	—			(12,271		)
Loans made to franchisees	—			(2,582		)	—			—			(2,582		)
Repayments from franchisees	—			11,288			146			—			11,434
Intercompany borrowings (payments)	—			2,226			(59,804		)	57,578			—
Other, net	—			1,439			2,123			—			3,562
Net cash provided by (used in) investing activities	—			49,228			(74,712		)	57,578			32,094
Cash flows from financing:
Customer banking deposits, net	—			(268,482		)	—			(50		)	(268,532		)
Dividends paid	(55,063		)	—			—			—			(55,063		)
Repurchase of common stock, including shares surrendered	(17,756		)	—			—			—			(17,756		)
Proceeds from exercise of stock options	13,015			—			—			—			13,015
Intercompany borrowings (payments)	59,804			—			(2,226		)	(57,578		)	—
Other, net	—			—			(22,413		)	—			(22,413		)
Net cash used in financing activities	—			(268,482		)	(24,639		)	(57,628		)	(350,749		)
Effects of exchange rates on cash	—			—			(10,907		)	—			(10,907		)
Net decrease in cash and cash equivalents	—			(191,912		)	(515,846		)	(50		)	(707,808		)
Cash and cash equivalents at beginning of the period	—			478,077			1,529,553			(440		)	2,007,190
Cash and cash equivalents at end of the period	$	—		$	286,165		$	1,013,707		$	(490	)	$	1,299,382

H&R Block, Inc. | Q1 FY2017 Form 10-Q 25

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our subsidiaries provide assisted and DIY tax return preparation through multiple channels (including in-person, online and mobile applications, and desktop software) and distribute the H&R Block-branded financial products and services of BofI. Tax returns are either prepared by H&R Block tax professionals (in company-owned or franchise offices or virtually via the internet) or prepared and filed by our clients through our DIY tax solutions. We operate as a single segment that includes all of our continuing operations, which are designed to enable clients to obtain tax preparation services seamlessly.

26 Q1 FY2017 Form 10-Q | H&R Block, Inc.

RESULTS OF OPERATIONS

A summary of the financial results for our operations is as follows:

Consolidated – Financial Results							(in 000s)
Three months ended July 31,	2016			2015			$ Change			% Change
Revenues:
U.S. assisted tax preparation fees	$	25,429		$	27,285		$	(1,856	)	(6.8	)%
U.S. royalties	6,525			6,726			(201		)	(3.0	)%
U.S. DIY tax preparation fees	2,914			3,179			(265		)	(8.3	)%
International revenues	38,875			40,594			(1,719		)	(4.2	)%
Revenues from Refund Transfers	3,234			2,171			1,063			49.0	%
Revenues from Emerald Card®	13,065			15,689			(2,624		)	(16.7	)%
Revenues from Peace of Mind® Extended Service Plan	27,031			27,703			(672		)	(2.4	)%
Interest and fee income on Emerald Advance	804			314			490			156.1	%
Other	7,308			14,057			(6,749		)	(48.0	)%
Total revenues	125,185			137,718			(12,533		)	(9.1	)%
Compensation and benefits:
Field wages	45,043			45,938			(895		)	(1.9	)%
Other wages	42,100			41,869			231			0.6	%
Benefits and other compensation	22,734			22,651			83			0.4	%
	109,877			110,458			(581		)	(0.5	)%
Occupancy and equipment	94,371			89,799			4,572			5.1	%
Marketing and advertising	7,561			8,531			(970		)	(11.4	)%
Depreciation and amortization	41,282			40,094			1,188			3.0	%
Bad debt	1,417			2,005			(588		)	(29.3	)%
Supplies	2,077			2,399			(322		)	(13.4	)%
Other	53,324			58,414			(5,090		)	(8.7	)%
Total operating expenses	309,909			311,700			(1,791		)	(0.6	)%
Other income	2,968			433			2,535			585.5	%
Interest expense on borrowings	(21,466		)	(8,575		)	(12,891		)	(150.3	)%
Other expenses	(327		)	(4,985		)	4,658			93.4	%
Pretax loss	(203,549		)	(187,109		)	(16,440		)	(8.8	)%
Income tax benefit	(82,523		)	(90,604		)	8,081			8.9	%
Net loss from continuing operations	(121,026		)	(96,505		)	(24,521		)	(25.4	)%
Net loss from discontinued operations	(2,647		)	(3,154		)	507			16.1	%
Net loss	$	(123,673	)	$	(99,659	)	(24,014		)	(24.1	)%
Basic and diluted loss per share:
Continuing operations	$	(0.55	)	$	(0.35	)	$	(0.20	)	(57.1	)%
Discontinued operations	(0.01		)	(0.01		)	—			—	%
Consolidated	$	(0.56	)	$	(0.36	)	$	(0.20	)	(55.6	)%
EBITDA from continuing operations (1)	$	(140,801	)	$	(138,304	)	$	(2,497	)	(1.8	)%
EBITDA from continuing operations - adjusted (1)	(139,989		)	(137,346		)	$	(2,643	)	(1.9	)%

⁽¹⁾  See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.

Three months ended July 31, 2016 compared to July 31, 2015

Revenues decreased$12.5 million, or 9.1%, over the prior year. U.S. assisted tax preparation fees declined $1.9 million, or 6.8%, due primarily to lower tax return volumes, which were partially offset by improved rate and mix.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 27

Revenues from our international operations declined $1.7 million, or 4.2%, primarily due to foreign currency exchange rates and the extension of the Canadian tax filing season in the prior year.

Revenues from H&R Block Emerald Prepaid MasterCard® transactions decreased $2.6 million, or 16.7%, primarily

due to fees paid to BofI and lower assisted return volumes.

Other revenues declined $6.7 million, or 48.0%, primarily due to the sale of AFS securities and the presentation of income from our mortgage loan portfolio and investments in AFS securities as other income in the current year rather than revenue in the prior year.

Total operating expenses decreased$1.8 million, or 0.6%, from the prior year. Occupancy costs increased $4.6 million, or 5.1%, and depreciation and amortization expense increased$1.2 million, or 3.0%, due primarily to acquisitions of franchisee and competitor businesses. Other expenses decreased$5.1 million, or 8.7%, due to lower consulting and travel expenses, partially offset by higher POM expenses.

Interest expense on borrowings increased $12.9 million due to the issuance of $1.0 billion in Senior Notes in September 2015. Other income increased $2.5 million due to the change in presentation of our mortgage loan portfolio and AFS securities as discussed above. Other expenses declined $4.7 million, or 93.4%, primarily due to a decline in foreign currency exchange losses.

See Item 1, note 8 to the consolidated financial statements for discussion of the impact of income taxes for the period.

DISCONTINUED OPERATIONS

Discontinued operations include our discontinued mortgage operations.

CONTINGENT LOSSES –SCC has accrued a liability as of July 31, 2016, for estimated contingent losses arising from representation and warranty claims of $25.5 million. See Item 1, note 12 to the consolidated financial statements for changes in this accrual. The estimate of accrued loss is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and other factors. Changes in any one of these factors could significantly impact the estimate.

Losses may also be incurred with respect to various indemnification claims by underwriters, depositors and securitization trustees in securitization transactions in which SCC participated. SCC has not concluded that a loss is probable or reasonably estimable related to these indemnification claims, therefore there is no accrued liability for these contingent losses as of July 31, 2016.

See additional discussion in Item 1A, "Risk Factors" and Item 7, under "Critical Accounting Estimates" in our Annual Report on Form 10-K.

FINANCIAL CONDITION

These comments should be read in conjunction with the consolidated balance sheets and consolidated statements of cash flows included in Part 1, Item 1.

CAPITAL RESOURCES AND LIQUIDITY – OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in working capital), draws on our 2015 CLOC, and issuances of debt. We use our sources of liquidity primarily to fund working capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire businesses.

Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from January through April. Therefore, we require the use of cash to fund losses from May through December, and typically rely on available cash balances from the prior tax season and borrowings to meet our off-season liquidity needs.

Given the likely availability of a number of liquidity options discussed herein, we believe that, in the absence of any unexpected developments, our existing sources of capital as of July 31, 2016 are sufficient to meet our operating and financing needs.

28 Q1 FY2017 Form 10-Q | H&R Block, Inc.

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements of cash flows for the three months ended July 31, 2016 and 2015. See Item 1 for the complete condensed consolidated statements of cash flows for these periods.

	(in 000s)
Three months ended July 31,	2016			2015
Net cash provided by (used in):
Operating activities	$	(475,675	)	$	(378,246	)
Investing activities	5,078			32,094
Financing activities	(116,966		)	(350,749		)
Effects of exchange rates on cash	(2,367		)	(10,907		)
Net change in cash and cash equivalents	$	(589,930	)	$	(707,808	)

Operating Activities. Cash used in operations increased, primarily due to higher restricted cash balances and settlement payments related to representation and warranty claims.

Investing Activities. Cash provided by investing activities totaled $5.1 million for the three months ended July 31, 2016 compared to $32.1 million in the prior year period. This change resulted from cash received on our AFS securities in the prior year, offset by a decrease of $10.6 million in payments for business acquisitions.

Financing Activities. Cash used in financing activities totaled $117.0 million for the three months ended July 31, 2016 compared to $350.7 million in the prior year period. Changes in cash from financing activities resulted primarily from prior year changes in customer deposit balances, partially offset by current year share repurchase activity.

CASH REQUIREMENTS –

Dividends and Share Repurchases. Returning capital to shareholders in the form of dividends and the repurchase of outstanding shares has historically been a significant component of our capital allocation plan.

We have consistently paid quarterly dividends. Dividends paid totaled $48.5 million and $55.1 million for the three months ended July 31, 2016 and 2015, respectively. The decline from the prior year was primarily due to lower outstanding shares as a result of share repurchase activity. Although we have historically paid dividends and plan to continue to do so, there can be no assurances that circumstances will not change in the future that could affect our ability or decisions to pay dividends.

In September 2015, we announced that our Board of Directors approved a $3.5 billion share repurchase program, effective through June 2019. As a part of the repurchase program, in the current year, we purchased $48.6 million of our common stock at an average price of $23.84 per share. See Item 1, note 2 to the consolidated financial statements for additional information. As of July 31, 2016, payment of $8.9 million related to 0.4 million shares had not yet settled and was accrued as a liability on the consolidated balance sheet. Although we may continue to repurchase shares, there is no assurance that we will purchase up to the full board authorization.

Capital Investment. Our business is not capital intensive. Capital expenditures totaled $6.2 million and $8.7 million for the three months ended July 31, 2016 and 2015, respectively. Our capital expenditures relate primarily to recurring improvements to retail offices, as well as investments in computers, software and related assets. In addition to our capital expenditures, we also made payments to acquire franchisee and competitor businesses totaling $1.6 million and $12.3 million for the three months ended July 31, 2016 and 2015, respectively.

FINANCING RESOURCES – Our 2015 CLOC has capacity up to $2.0 billion, and is scheduled to expire in September 2020. See Item 1, note 6 to the consolidated financial statements for discussion of the Senior Notes and our 2015 CLOC. Proceeds under the 2015 CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with our 2015 CLOC covenants as of July 31, 2016.

As of July 31, 2016, amounts available to borrow under the 2015 CLOC were limited by the debt-to-EBITDA covenant in the 2015 CLOC Agreement to approximately $1.3 billion, however our cash needs at July 31 generally do not require us to borrow on our CLOC at that time. We had no balance outstanding under the 2015 CLOC as of July 31, 2016. We subsequently borrowed $50 million under the 2015 CLOC on August 31, 2016 for seasonal working capital needs.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 29

The following table provides ratings for debt issued by Block Financial as of July 31, 2016 and April 30, 2016:

As of	July 31, 2016			April 30, 2016
	Short-term	Long-term	Outlook	Short-term	Long-term	Outlook
Moody's	P-3	Baa3	Stable	P-3	Baa3	Stable
S&P	A-2	BBB	Negative	A-2	BBB	Stable

There have been no material changes in our borrowings from those reported as of April 30, 2016 in our Annual Report on Form 10-K.

CASH AND INVESTMENT SECURITIES – As of July 31, 2016, we held cash and cash equivalents of $306.9 million, including $111.0 million held by our foreign subsidiaries.

Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S. operations. To mitigate foreign currency exchange rate risk, we sometimes enter into foreign exchange forward contracts. There were no forward contracts outstanding as of July 31, 2016.

We do not currently intend to repatriate any non-borrowed funds held by our foreign subsidiaries.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $2.4 million during the three months ended July 31, 2016 compared to $10.9 million in the prior year.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – There have been no material changes in our contractual obligations and commercial commitments from those reported as of April 30, 2016 in our Annual Report on Form 10-K.

REGULATORY ENVIRONMENT – There have been no material changes in our regulatory environment from what was reported as of April 30, 2016 in our Annual Report on Form 10-K.

NON-GAAP FINANCIAL INFORMATION

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business on a consistent basis across reporting periods, as it eliminates the effect of items that are not indicative of our core operating performance.

The following are descriptions of adjustments we make for our non-GAAP financial measures:

▪ We exclude losses from settlements and estimated contingent losses from litigation and favorable reserve adjustments. This does not include legal defense costs.

▪ We exclude material non-cash charges to adjust the carrying values of goodwill, intangible assets, other long-lived assets and investments to their estimated fair values.

▪ We exclude material severance and other restructuring charges in connection with the termination of personnel, closure of offices and related costs.

▪ We exclude the material gains and losses on business dispositions, including investment banking, legal and accounting fees from both business dispositions and acquisitions.

▪ We exclude the gains and losses on extinguishment of debt.

We may consider whether other significant items that arise in the future should also be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations and adjusted EBITDA from continuing operations, adjusted pretax and net income of continuing operations, and adjusted diluted earnings per share from continuing operations. Adjusted EBITDA from continuing operations, adjusted pretax and net income from continuing operations,

30 Q1 FY2017 Form 10-Q | H&R Block, Inc.

and adjusted diluted earnings per share from continuing operations eliminate the impact of items that we do not consider indicative of our core operating performance and, we believe, provide meaningful information to assist in understanding our financial results, analyzing trends in our underlying business, and assessing our prospects for future performance. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

The following is a reconciliation of EBITDA from continuing operations to net loss:

				(in 000s)
	Three months ended July 31,
	2016			2015
Net loss - as reported	$	(123,673	)	$	(99,659	)
Add back:
Discontinued operations, net	2,647			3,154
Income taxes of continuing operations	(82,523		)	(90,604		)
Interest expense of continuing operations	21,466			8,711
Depreciation and amortization of continuing operations	41,282			40,094
	(17,128		)	(38,645		)
EBITDA from continuing operations	$	(140,801	)	$	(138,304	)

The following is a reconciliation of our results from continuing operations to our adjusted results from continuing operations, which are non-GAAP financial measures:

							(in 000s)
Three months ended July 31,	2016									2015
	Pretax loss			Net loss			EBITDA			Pretax loss			Net loss			EBITDA
From continuing operations	$	(203,549	)	$	(121,026	)	$	(140,801	)	$	(187,109	)	$	(96,505	)	$	(138,304	)
Adjustments (pretax):
Loss contingencies - litigation	812			812			812			618			618			618
Costs related to HRB Bank and recapitalization transactions	—			—			—			52			52			52
Losses on AFS securities	—			—			—			288			288			288
Tax effect of adjustments (1)	—			(302		)	—			—			(358		)	—
	812			510			812			958			600			958
As adjusted - from continuing operations	$	(202,737	)	$	(120,516	)	$	(139,989	)	$	(186,151	)	$	(95,905	)	$	(137,346	)
Adjusted EPS				$	(0.55	)							$	(0.35	)

¹Tax effect of adjustments is computed as the pretax effect of the adjustments multiplied by our effective tax rate before discrete items.

FORWARD-LOOKING INFORMATION

This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "could," "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include

H&R Block, Inc. | Q1 FY2017 Form 10-Q 31

estimates of revenues, income, earnings per share, capital expenditures, dividends, stock repurchase, liquidity, capital structure or other financial items, descriptions of management's plans or objectives for future operations, services or products, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law.

By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive, operational and regulatory factors, many of which are beyond the Company's control. Investors should understand that it is not possible to predict or identify all such factors and, consequently, should not consider any such list to be a complete set of all potential risks or uncertainties.

Details about risks, uncertainties and assumptions that could affect various aspects of our business are included throughout our Annual Report on Form 10-K for the fiscal year ended April 30, 2016 and are also described from time to time in other filings with the SEC. Investors should carefully consider all of these risks, and should pay particular attention to Item 1A, "Risk Factors," and Item 7 under "Critical Accounting Policies" of our Annual Report on Form 10-K for the fiscal year ended April 30, 2016.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risks from those reported at April 30, 2016 in our Annual Report on Form 10-K.

ITEM 4.     CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES – As of the end of the period covered by this Form 10-Q, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). The controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING – There were no changes during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see discussion in Part I, Item 1, note 11 to the consolidated financial statements.

ITEM 1A.    RISK FACTORS

There have been no material changes in our risk factors from those reported at April 30, 2016 in our Annual Report on Form 10-K.

32 Q1 FY2017 Form 10-Q | H&R Block, Inc.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

A summary of our purchases of H&R Block common stock during the first quarter of fiscal year 2017 is as follows:

(in 000s, except per share amounts)
	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans  or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans  or Programs (2)
May 1 - May 31	—	$	—	—	$	1,500,000
June 1 - June 30	242	$	23.00	—	$	1,500,000
July 1 - July 31	2,041	$	23.84	2,039	$	1,451,435
	2,283	$	23.75	2,039

⁽¹⁾  We purchased approximately 244 thousand shares in connection with funding employee income tax withholding obligations arising upon the lapse of restrictions on restricted shares and restricted share units.

⁽²⁾  In September 2015, we announced that our Board of Directors approved a $3.5 billion share repurchase program, effective through June 2019.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    OTHER INFORMATION

None.

ITEM 6.     EXHIBITS

The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:

10.1 Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on July 18, 2016, filed as Exhibit 10.1 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.2 Form of 2013 Long Term Incentive Plan Award Agreement for Market Stock Units, as approved on July 18, 2016, filed as Exhibit 10.2 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.3 Form of 2013 Long Term Incentive Plan Award Agreement for Performance Share Units, as approved on July 18, 2016, filed as Exhibit 10.3 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.4 Form of 2013 Long Term Incentive Plan Award Agreement for Non-Qualified Stock Options, as approved on July 18, 2016, filed as Exhibit 10.4 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.5 Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on July 18, 2016, filed as Exhibit 10.5 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.6 Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Market Stock Units, as approved on July 18, 2016, filed as Exhibit 10.6 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.7 Alternate Form of 2013 Long Term Incentive Plan Award Agreement for Performance Share Units, as approved on July 18, 2016, filed as Exhibit 10.7 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

10.8 Form of 2013 Long Term Incentive Plan Award Agreement for Restricted Share Units - Annual Vesting, as approved on July 18, 2016, filed as Exhibit 10.8 to the Company’s current report on Form 8-K filed July 22, 2016, file number 1-06089, is incorporated herein by reference.

H&R Block, Inc. | Q1 FY2017 Form 10-Q 33

12.1 Computation of Ratio of Earnings to Fixed Charges for H&R Block, Inc.

12.2 Computation of Ratio of Earnings to Fixed Charges for Block Financial LLC.

31.1 Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema

101.CAL XBRL Extension Calculation Linkbase

101.LAB XBRL Taxonomy Extension Label Linkbase

101.PRE XBRL Taxonomy Extension Presentation Linkbase

101.DEF XBRL Taxonomy Extension Definition Linkbase

34 Q1 FY2017 Form 10-Q | H&R Block, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

H&R BLOCK, INC.

/s/ William C. Cobb

William C. Cobb

President and Chief Executive Officer

September 1, 2016

/s/ Tony G. Bowen

Tony G. Bowen

Chief Financial Officer

September 1, 2016

/s/ Kellie J. Logerwell

Kellie J. Logerwell

Chief Accounting Officer

September 1, 2016

H&R Block, Inc. | Q1 FY2017 Form 10-Q 35

EX-12.1

													Exhibit 12.1
H&R BLOCK, INC.
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
	Three months ended July 31,						Twelve months ended April 30,
	2016			2015			2016		2015		2014		2013		2012
Pretax earnings (loss) from continuing operations	$	(203,549	)	$	(187,109	)	$	569,479	$	742,805	$	767,116	$	702,011	$	576,070
Add: Fixed charges	40,216			26,307			145,311		116,977		125,162		146,954		164,848
Total earnings (loss) before income taxes and fixed charges	$	(163,333	)	$	(160,802	)	$	714,790	$	859,782	$	892,278	$	848,965	$	740,918
Fixed charges:
Interest expense	$	21,466		$	8,575		$	68,962	$	45,246	$	55,279	$	74,297	$	85,354
Interest on deposits	—			136			179		682		2,109		5,660		6,735
Interest portion of net rent expense (a)	18,750			17,596			76,170		71,049		67,774		66,997		72,759
Total fixed charges	$	40,216		$	26,307		$	145,311	$	116,977	$	125,162	$	146,954	$	164,848
Ratio of earnings to fixed charges:
Including interest on deposits	-			-			4.9		7.4		7.1		5.8		4.5
Excluding interest on deposits	-			-			4.9		7.4		7.2		6.0		4.6
Deficiency in the coverage of fixed charges by earnings (loss) before income taxes and fixed charges	$	(203,549	)	$	(187,109	)	$	—	$	—	$	—	$	—	$	—

(a) One-third of net rent expense is the portion deemed representative of the interest factor.

Note: In computing the ratio of earnings to fixed charges: (a) earnings have been based on income from continuing operations before income taxes and fixed charges (exclusive of interest capitalized) and (b) fixed charges consist of interest expense and the estimated interest portion of rents. Interest expense on uncertain tax positions has been excluded from fixed charges, as it is included as a component of income taxes in the consolidated financial statements.

EX-12.2

												Exhibit 12.2
BLOCK FINANCIAL LLC
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
	Three months ended July 31,					Twelve months ended April 30,
	2016			2015		2016		2015		2014		2013			2012
Pretax earnings (loss) from continuing operations	$	(16,070	)	$	227	$	12,153	$	67,628	$	40,828	$	(6,112	)	$	(3,107	)
Add: Fixed charges	21,314			8,574		68,713		45,575		57,010		79,500			90,213
Total earnings before income taxes and fixed charges	$	5,244		$	8,801	$	80,866	$	113,203	$	97,838	$	73,388		$	87,106
Fixed charges:
Interest expense	$	21,314		$	8,436	$	68,531	$	44,884	$	54,892	$	73,831		$	83,469
Interest on deposits	—			136		179		682		2,109		5,660			6,735
Interest portion of net rent expense (a)	—			2		3		9		9		9			9
Total fixed charges	$	21,314		$	8,574	$	68,713	$	45,575	$	57,010	$	79,500		$	90,213
Ratio of earnings to fixed charges:
Including interest on deposits	-			1.0		1.2		2.5		1.7		-			-
Excluding interest on deposits	-			1.0		1.2		2.5		1.7		-			-
Deficiency in the coverage of fixed charges by earnings (loss) before income taxes and fixed charges	$	(16,070	)	$	—	$	—	$	—	$	—	$	(6,112	)	$	(3,107	)

(a) One-third of net rent expense is the portion deemed representative of the interest factor.

Note: In computing the ratio of earnings to fixed charges: (a) earnings have been based on income from continuing operations before income taxes and fixed charges (exclusive of interest capitalized) and (b) fixed charges consist of interest expense and the estimated interest portion of rents. Interest expense on uncertain tax positions has been excluded from fixed charges, as it is included as a component of income taxes in the consolidated financial statements.

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William C. Cobb, Chief Executive Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of H&R Block, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	September 1, 2016	/s/ William C. Cobb
		William C. Cobb
		Chief Executive Officer H&R Block, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tony G. Bowen, Chief Financial Officer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of H&R Block, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	September 1, 2016	/s/ Tony G. Bowen
		Tony G. Bowen
		Chief Financial Officer H&R Block, Inc.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of H&R Block, Inc. (the “Company”) on Form 10‑Q for the fiscal quarter ending July 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William C. Cobb, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ William C. Cobb

William C. Cobb

Chief Executive Officer

H&R Block, Inc.

September 1, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of H&R Block, Inc. (the “Company”) on Form 10‑Q for the fiscal quarter ending July 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tony G. Bowen, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Tony G. Bowen

Tony G. Bowen

Chief Financial Officer

H&R Block, Inc.

September 1, 2016

XML

Document And Entity Information - shares	3 Months Ended
	Jul. 31, 2016	Aug. 31, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 31, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Entity Registrant Name	H&R BLOCK INC
Entity Central Index Key	0000012659
Current Fiscal Year End Date	--04-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		219,093,448

XML

Consolidated Statements Of Operations And Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
REVENUES:
Service revenues	$ 112,384	$ 118,434
Royalty, product and other revenues	12,801	19,284
Total revenues	125,185	137,718
Cost of revenues:
Compensation and benefits	52,355	55,789
Occupancy and equipment	94,425	89,855
Provision for bad debt and loan losses	1,417	2,005
Depreciation and amortization	27,467	27,084
Other	35,422	38,775
Cost of revenues	211,086	213,508
Selling, general and administrative:
Marketing and advertising	7,561	8,531
Compensation and benefits	57,522	54,669
Depreciation and amortization	13,815	13,010
Other selling, general and administrative	19,925	21,982
Selling, general and administrative	98,823	98,192
Total operating expenses	309,909	311,700
Other income, net	(327)	(4,985)
Other Nonoperating Income	2,968	433
Interest expense on borrowings	(21,466)	(8,575)
Loss from continuing operations before income tax benefit	(203,549)	(187,109)
Income tax benefit	(82,523)	(90,604)
Net loss from continuing operations	(121,026)	(96,505)
Net loss from discontinued operations, net of tax benefits of $1,557 and $1,889	(2,647)	(3,154)
NET LOSS	$ (123,673)	$ (99,659)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations (in usd per share)	$ (0.55)	$ (0.35)
Discontinued operations (in usd per share)	(0.01)	(0.01)
Consolidated (in usd per share)	(0.56)	(0.36)
DIVIDENDS PAID PER SHARE (in usd per share)	$ 0.22	$ 0.20
COMPREHENSIVE LOSS:
NET LOSS	$ (123,673)	$ (99,659)
Unrealized gains (losses) on securities, net of taxes:
Unrealized holding losses arising during the period, net of tax benefits of $5 and $875	(11)	(1,360)
Reclassification adjustment for gains included in income, net of taxes of $ - and $89	0	141
Change in foreign currency translation adjustments	(3,560)	(8,755)
Other comprehensive loss	(3,571)	(9,974)
Comprehensive loss	$ (127,244)	$ (109,633)

XML

Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Income Statement [Abstract]
Tax benefit on discontinued operations	$ (5)	$ 875
Discontinued Operation, Tax Effect of Discontinued Operation	1,557	1,889
Marketable Securities, Realized Gain (Loss)	$ 0	$ 89

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
ASSETS
Cash and cash equivalents	$ 306,871	$ 896,801	$ 1,299,382
Cash and cash equivalents - restricted	122,025	104,110	61,040
Receivables, less allowance for doubtful accounts of $56,381, $53,771 and $57,011	103,425	153,116	103,194
Deferred tax assets and income taxes receivable			160,390
Prepaid expenses and other current assets	74,929	65,441	80,550
Investments in available-for-sale securities	1,123	1,133	406,360
Total current assets	608,373	1,220,601	2,110,916
Mortgage loans held for investment, less allowance for loan losses of $5,310, $7,659 and $5,518	192,375	202,385	230,130
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120	284,114	293,565	297,321
Intangible assets, net	419,909	433,885	417,009
Goodwill	470,942	470,757	454,394
Deferred tax assets and income taxes receivable	90,498	120,123	11,377
Other noncurrent assets	97,331	105,909	108,307
Total assets	2,163,542	2,847,225	3,629,454
LIABILITIES:
Customer banking deposits			476,732
Accounts payable and accrued expenses	157,085	259,586	116,855
Accounts payable and accrued expenses	191,304	243,653	316,880
Accrued salaries, wages and payroll taxes	43,516	161,786	33,447
Accrued income taxes and reserves for uncertain tax positions	216,390	373,754	245,541
Current portion of long-term debt	864	826	799
Total current liabilities	609,159	1,039,605	1,190,254
Long-term debt	1,491,790	1,491,375	501,960
Deferred tax liabilities and reserves for uncertain tax positions	116,709	132,960	137,603
Deferred revenue and other noncurrent liabilities	145,691	160,182	130,210
Total liabilities	2,363,349	2,824,122	1,960,027
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 258,179,891, 316,628,110 and 260,218,666	2,582	2,602	3,166
Additional paid-in capital	748,924	758,230	773,783
Accumulated other comprehensive loss	(14,804)	(11,233)	(8,234)
Retained earnings (deficit)	(180,631)	40,347	1,679,234
Less treasury shares, at cost, of 39,087,239, 40,312,382 and 39,701,409	(755,878)	(766,843)	(778,522)
Total stockholders' equity (deficiency)	(199,807)	23,103	1,669,427
Total liabilities and stockholders' equity	$ 2,163,542	$ 2,847,225	$ 3,629,454

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Statement of Financial Position [Abstract]
Treasury Stock, Shares	39,087,239	39,701,409	40,312,382
Allowance for doubtful accounts	$ 56,381	$ 57,011	$ 53,771
Allowance for loan losses	5,310	5,518	7,659
Accumulated depreciation and amortization	$ 622,937	$ 601,120	$ 538,823
Common stock, no par value	$ 0	$ 0	$ 0
Common stock, stated value per share	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	800,000,000	800,000,000	800,000,000
Common stock, shares issued	258,179,891	260,218,666	316,628,110

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Statement of Cash Flows [Abstract]
NET CASH USED IN OPERATING ACTIVITIES	$ (475,675)	$ (378,246)
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of and payments received on available-for-sale securities	58	32,103
Principal payments on mortgage loans held for investment, net	8,427	8,537
Purchases of property and equipment	(6,246)	(8,689)
Payments made for business acquisitions, net of cash acquired	(1,635)	(12,271)
Franchise loans:
Loans funded	(2,219)	(2,582)
Payments received	6,473	11,434
Other, net	220	3,562
Net cash provided by (used in) investing activities	5,078	32,094
CASH FLOWS FROM FINANCING ACTIVITIES:
Customer banking deposits, net	0	(268,532)
Dividends paid	(48,514)	(55,063)
Repurchase of common stock, including shares surrendered	(45,312)	(17,756)
Proceeds from exercise of stock options	1,639	13,015
Other, net	(24,779)	(22,413)
Net cash used in financing activities	(116,966)	(350,749)
Effects of exchange rates on cash	(2,367)	(10,907)
Net decrease in cash and cash equivalents	(589,930)	(707,808)
Cash and cash equivalents at beginning of the period	896,801	2,007,190
Cash and cash equivalents at end of the period	306,871	1,299,382
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received	61,289	75,358
Interest paid on borrowings	15,519	15,381
Accrued additions to property and equipment	10,147	5,977
Accrued Purchase Of Common Stock	$ 8,895	$ 0

XML

Summary Of Significant Accounting Policies

3 Months Ended

Jul. 31, 2016

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION –The consolidated balance sheets as of July 31, 2016 and 2015, the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2016 and 2015, and the condensed consolidated statements of cash flows for the three months ended July 31, 2016 and 2015 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows as of July 31, 2016 and 2015 and for all periods presented have been made.

"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and its subsidiaries, as appropriate to the context.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U. S. (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our April 30, 2016 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2016 or for the year then ended are derived from our April 30, 2016 Annual Report to Shareholders on Form 10-K.

MANAGEMENT ESTIMATES –The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, valuation allowances on deferred tax assets, reserves for uncertain tax positions and related matters. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates.

SEASONALITY OF BUSINESS –Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of January through April. Therefore, results for interim periods are not indicative of results to be expected for the full year.

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See notes 11 and 12 for additional information on litigation, claims and other loss contingencies related to our discontinued operations.

NEW ACCOUNTING PRONOUNCEMENTS – In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance must be applied retrospectively to all periods presented. We adopted this guidance effective May 1, 2016. Prior periods have been retrospectively adjusted to conform to the current period presentation. Debt issuance costs previously reported as other current assets and other noncurrent assets have been reclassified to long-term debt. This guidance did not have a material effect on our consolidated financial statements.

XML

Loss Per Share and Stockholders' Equity

3 Months Ended

Jul. 31, 2016

Earnings Per Share [Abstract]

Loss Per Share and Stockholders' Equity

NOTE 2: LOSS PER SHARE AND STOCKHOLDERS' EQUITY

LOSS PER SHARE – Basic and diluted loss per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. The dilutive effect of potential common shares is included in diluted earnings per share except in those periods with a loss from continuing operations. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 4.7 million shares for the three months ended July 31, 2016, and 5.0 million shares for the three months ended July 31, 2015, as the effect would be antidilutive due to the net loss from continuing operations during those periods.

The computations of basic and diluted earnings per share from continuing operations are as follows:

(in 000s, except per share amounts)
	Three months ended July 31,
	2016			2015
Net loss from continuing operations attributable to shareholders	$	(121,026	)	$	(96,505	)
Amounts allocated to participating securities	(124		)	(102		)
Net loss from continuing operations attributable to common shareholders	$	(121,150	)	$	(96,607	)
Basic weighted average common shares	220,484			275,765
Potential dilutive shares	—			—
Dilutive weighted average common shares	220,484			275,765
Loss per share from continuing operations attributable to common shareholders:
Basic	$	(0.55	)	$	(0.35	)
Diluted	(0.55		)	(0.35		)

The weighted average shares outstanding for the three months ended July 31, 2016 decreased to 220.5 million from 275.8 million for the three months ended July 31, 2015, primarily due to share repurchases completed in the prior and current year. During the three months ended July 31, 2016, we purchased and immediately retired 2.0 million shares at an aggregate cost of $48.6 million (average price of $23.84 per share). The cost of shares retired during the current period was allocated to the components of stockholders’ equity as follows:

	(in 000s)
Common stock	$	20
Additional paid-in-capital	1,223
Retained earnings	47,351
Total	$	48,594

STOCK-BASED COMPENSATION – In addition to the shares repurchased as discussed above, during the three months ended July 31, 2016, we acquired 0.2 million shares of our common stock at an aggregate cost of $5.6 million. These shares represent shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards. During the three months ended July 31, 2015, we acquired 0.6 million shares at an aggregate cost of $17.8 million for similar purposes.

During the three months ended July 31, 2016 and 2015, we issued 0.9 million and 1.6 million shares of common stock, respectively, due to the vesting or exercise of stock-based awards.

During the three months ended July 31, 2016, we granted equity awards equivalent to 1.1 million shares under our stock-based compensation plans, consisting primarily of nonvested units. Nonvested units generally either vest over a three-year period with one-third vesting each year or cliff vest at the end of a three-year period, although the Compensation Committee may in limited circumstances approve grants with a modified vesting schedule. Stock-based compensation expense of our continuing operations totaled $5.5 million and $6.0 million for the three months ended July 31, 2016 and 2015, respectively. As of July 31, 2016, unrecognized compensation cost for stock options totaled $0.5 million, and for nonvested shares and units totaled $48.7 million.

XML

Receivables

3 Months Ended

Jul. 31, 2016

Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract]

Receivables

NOTE 3: RECEIVABLES

Receivables consist of the following:

(in 000s)
As of	July 31, 2016					July 31, 2015					April 30, 2016
	Short-term			Long-term		Short-term			Long-term		Short-term			Long-term
Loans to franchisees	$	47,905		$	46,461	$	56,277		$	57,792	$	50,000		$	46,284
Receivables for tax preparation and related fees	39,115			5,528		39,927			6,103		52,327			5,528
Cash Back® receivables	4,515			—		2,777			—		37,663			—
Emerald Advance lines of credit	24,857			111		20,321			598		25,092			869
Royalties from franchisees	6,885			—		4,509			—		9,997			—
Other	36,529			4,414		33,154			7,934		35,048			7,726
	159,806			56,514		156,965			72,427		210,127			60,407
Allowance for doubtful accounts	(56,381		)	—		(53,771		)	—		(57,011		)	—
	$	103,425		$	56,514	$	103,194		$	72,427	$	153,116		$	60,407

Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets.

LOANS TO FRANCHISEES –Franchisee loan balances as of July 31, 2016 and 2015 and April 30, 2016, consisted of $31.5 million, $38.4 million and $35.1 million, respectively, in revolving lines of credit primarily for the purpose of funding off-season working capital needs and $62.8 million, $75.7 million and $61.2 million, respectively, in term loans made primarily to finance the purchase of franchises.

As of July 31, 2016 and 2015 and April 30, 2016, loans with a principal balance of $2.6 million, $1.5 million and $0.3 million, respectively, were more than 30 days past due. We had no loans to franchisees on non-accrual status.

CANADIAN CASH BACK® PROGRAM –Refunds advanced under the Cash Back program are not subject to credit approval, therefore the primary indicator of credit quality is the age of the receivable amount. Cash Back amounts are generally received within 60 days of filing the client's return. As of July 31, 2016 and 2015 and April 30, 2016, $0.6 million, $0.6 million and $1.5 million of Cash Back balances were more than 60 days old, respectively.

H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT –Beginning in fiscal year 2016, we no longer originate H&R Block Emerald Advance® lines of credit (EAs). These lines of credit are originated by BofI Federal Bank, a federal savings bank (BofI), and we purchase a participation interest in them.

We review the credit quality of our EA receivables based on pools, which are segregated by the year of origination, with older years being deemed more unlikely to be repaid. These amounts as of July 31, 2016, by year of origination, are as follows:

(in 000s)
Credit Quality Indicator – Year of origination:
2016	$	9,224
2015 and prior	182
Revolving loans	15,562
	$	24,968

As of July 31, 2016 and 2015 and April 30, 2016, $21.4 million, $17.4 million and $21.1 million of EAs were on non-accrual status and classified as impaired, or more than 60 days past due, respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS –Activity in the allowance for doubtful accounts for our receivables for the three months ended July 31, 2016 and 2015 is as follows:

(in 000s)
	EAs		All Other			Total
Balances as of May 1, 2016	$	9,007	$	48,004		$	57,011
Provision	451		966			1,417
Charge-offs	—		(2,047		)	(2,047		)
Balances as of July 31, 2016	$	9,458	$	46,923		$	56,381
Balances as of May 1, 2015	$	7,353	$	47,174		$	54,527
Provision	—		713			713
Charge-offs	—		(1,469		)	(1,469		)
Balances as of July 31, 2015	$	7,353	$	46,418		$	53,771

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Mortgage Loans Held For Investment And Related Assets

3 Months Ended

Jul. 31, 2016

Mortgage Loans Held For Investment And Related Assets [Abstract]

Mortgage Loans Held For Investment And Related Assets

NOTE 4: MORTGAGE LOANS HELD FOR INVESTMENT

The composition of our mortgage loan portfolio is as follows:

(dollars in 000s)
As of	July 31, 2016					July 31, 2015					April 30, 2016
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	102,535		52	%	$	124,752		53	%	$	108,251		52	%
Fixed-rate loans	93,539			48	%	111,096			47	%	97,957			48	%
	196,074			100	%	235,848			100	%	206,208			100	%
Unamortized deferred fees and costs	1,611					1,941					1,695
Less: Allowance for loan losses	(5,310		)			(7,659		)			(5,518		)
	$	192,375				$	230,130				$	202,385

Our loan loss allowance as a percent of mortgage loans was 2.7% as of July 31, 2016, compared to 3.2% as of July 31, 2015 and 2.7% as of April 30, 2016.

Activity in the allowance for loan losses for the three months ended July 31, 2016 and 2015 is as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance at beginning of the period	$	5,518		$	7,886
Provision	—			(28		)
Recoveries	370			365
Charge-offs	(578		)	(564		)
Balance at end of the period	$	5,310		$	7,659

Detail of the aging of the mortgage loans in our portfolio as of July 31, 2016 is as follows:

(in 000s)
	Less than 60 Days Past Due		60 – 89 Days Past Due		90+ Days Past Due(1)		Total Past Due		Current		Total
Purchased from SCC	$	8,849	$	745	$	38,503	$	48,097	$	68,392	$	116,489
All other	1,457		349		5,236		7,042		72,543		79,585
	$	10,306	$	1,094	$	43,739	$	55,139	$	140,935	$	196,074

⁽¹⁾  We do not accrue interest on loans past due 90 days or more.

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Goodwill And Intangible Assets

3 Months Ended

Jul. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill And Intangible Assets

NOTE 5: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three months ended July 31, 2016 and 2015 are as follows:

(in 000s)
	Goodwill			Accumulated Impairment Losses			Net
Balances as of April 30, 2016	$	503,054		$	(32,297	)	$	470,757
Acquisitions	23			—			23
Disposals and foreign currency changes, net	162			—			162
Impairments	—			—			—
Balances as of July 31, 2016	$	503,239		$	(32,297	)	$	470,942
Balances as of April 30, 2015	$	474,128		$	(32,297	)	$	441,831
Acquisitions	14,030			—			14,030
Disposals and foreign currency changes, net	(1,467		)	—			(1,467		)
Impairments	—			—			—
Balances as of July 31, 2015	$	486,691		$	(32,297	)	$	454,394

The increase in goodwill during the period ended July 31, 2015, resulted from acquired franchisee and competitor businesses where the purchase price allocation had not been finalized. These allocations were finalized by the end of fiscal year 2016.

We test goodwill for impairment annually or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

Components of the intangible assets are as follows:

(in 000s)
	Gross Carrying Amount		Accumulated Amortization			Net
As of July 31, 2016:
Reacquired franchise rights	$	319,545	$	(72,977	)	$	246,568
Customer relationships	206,606		(110,696		)	95,910
Internally-developed software	132,897		(99,873		)	33,024
Noncompete agreements	31,492		(26,045		)	5,447
Franchise agreements	19,201		(9,814		)	9,387
Purchased technology	54,700		(27,425		)	27,275
Acquired assets pending final allocation (1)	2,298		—			2,298
	$	766,739	$	(346,830	)	$	419,909
As of July 31, 2015:
Reacquired franchise rights	$	294,918	$	(51,233	)	$	243,685
Customer relationships	169,998		(83,471		)	86,527
Internally-developed software	120,522		(84,215		)	36,307
Noncompete agreements	30,576		(24,091		)	6,485
Franchise agreements	19,201		(8,534		)	10,667
Purchased technology	54,700		(21,362		)	33,338
	$	689,915	$	(272,906	)	$	417,009
As of April 30, 2016:
Reacquired franchise rights	$	319,354	$	(68,284	)	$	251,070
Customer relationships	206,607		(104,072		)	102,535
Internally-developed software	131,161		(95,768		)	35,393
Noncompete agreements	31,499		(25,572		)	5,927
Franchise agreements	19,201		(9,494		)	9,707
Purchased technology	54,700		(25,909		)	28,791
Acquired assets pending final allocation (1)	462		—			462
	$	762,984	$	(329,099	)	$	433,885

⁽¹⁾    Represents recent business acquisitions, for which final purchase price allocations have not yet been determined.

Amortization of intangible assets for the three months ended July 31, 2016 and 2015 was $18.0 million and $16.6 million, respectively. Estimated amortization of intangible assets for fiscal years 2017, 2018, 2019, 2020 and 2021 is $76.7 million, $66.1 million, $51.7 million, $37.3 million and $26.1 million, respectively.

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Long-Term Debt

3 Months Ended

Jul. 31, 2016

Long-term Debt, Unclassified [Abstract]

Long-term Debt

NOTE 6: LONG-TERM DEBT

The components of long-term debt are as follows:

							(in 000s)
As of	July 31, 2016			July 31, 2015			April 30, 2016
Senior Notes, 4.125%, due October 2020	$	650,000		$	—		$	650,000
Senior Notes, 5.500%, due November 2022	500,000			500,000			500,000
Senior Notes, 5.250%, due October 2025	350,000			—			350,000
Capital lease obligation	7,229			8,031			7,435
Debt issuance costs and discounts	(14,575		)	(5,272		)	(15,234		)
	1,492,654			502,759			1,492,201
Less: Current portion	(864		)	(799		)	(826		)
	$	1,491,790		$	501,960		$	1,491,375

Effective May 1, 2016, we adopted the provisions of ASU 2015-3 on a retrospective basis. Accordingly, debt issuance costs related to our Senior Notes are included in long-term debt in the consolidated balance sheets. Amounts for prior periods have been retrospectively adjusted to conform to the current period presentation. See note 1 for additional information.

In September 2015, we entered into a Credit and Guarantee Agreement (2015 CLOC). The 2015 CLOC provides for an unsecured senior revolving credit facility in the aggregate principal amount of $2.0 billion, which includes a $200.0 million sublimit for swingline loans and a $100.0 million sublimit for standby letters of credit. We may request increases in the aggregate principal amount of the revolving credit facility of up to $500.0 million, subject to obtaining commitments from lenders therefor and meeting certain other conditions. The 2015 CLOC will mature on September 21, 2020, unless extended pursuant to the terms of the 2015 CLOC, at which time all outstanding amounts thereunder will be due and payable. The 2015 CLOC includes an annual facility fee, which will vary depending our then current credit ratings.

The 2015 CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier termination and contains customary representations, warranties, covenants and events of default, including, without limitation: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio calculated on a consolidated basis of no greater than (a) 3.50 to 1.00 as of the last day of each fiscal quarter ending on April 30, July 31, and October 31 of each year and (b) 4.50 to 1.00 as of the last day of each fiscal quarter ending on January 31 of each year; (2) a covenant requiring us to maintain an interest coverage (EBITDA-to-interest expense) ratio calculated on a consolidated basis of not less than 2.50 to 1.00 as of the last date of any fiscal quarter; and (3) covenants restricting our ability to incur certain additional debt, incur liens, merge or consolidate with other companies, sell or dispose of assets (including equity interests), liquidate or dissolve, engage in certain transactions with affiliates or enter into certain restrictive agreements. The 2015 CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the 2015 CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with these requirements as of July 31, 2016.

As of July 31, 2016, amounts available to borrow under the 2015 CLOC were limited by the debt-to-EBITDA covenant in the 2015 CLOC Agreement to approximately $1.3 billion, however our cash needs at July 31 generally do not require us to borrow on our CLOC at that time. We had no balance outstanding under the 2015 CLOC as of July 31, 2016. We subsequently borrowed $50 million under the 2015 CLOC on August 31, 2016 for seasonal working capital needs.

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Fair Value

3 Months Ended

Jul. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value

NOTE 7: FAIR VALUE

ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying amounts and estimated fair values of our financial instruments are as follows:

(in 000s)
As of	July 31, 2016				July 31, 2015				April 30, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	$	306,871	$	306,871	$	1,299,382	$	1,299,382	$	896,801	$	896,801
Cash and cash equivalents - restricted	122,025		122,025		61,040		61,040		104,110		104,110
Receivables, net - short-term	103,425		103,425		103,194		103,194		153,116		153,116
Mortgage loans held for investment, net	192,375		185,057		230,130		184,277		202,385		190,503
Investments in AFS securities	1,123		1,123		407,426		407,426		1,133		1,133
Receivables, net - long-term	56,514		56,514		72,427		72,427		60,407		60,407
Liabilities:
Customer banking deposits	—		—		477,145		473,720		—		—
Long-term debt	1,492,654		1,606,364		502,759		552,431		1,492,201		1,566,098
Contingent consideration	8,347		8,347		10,650		10,650		8,657		8,657

Fair value estimates, methods and assumptions are set forth below. Fair value was not estimated for assets and liabilities that are not considered financial instruments.

▪ Cash and cash equivalents, including restricted - Fair value approximates the carrying amount (Level 1).

▪ Receivables, net - short-term - For short-term balances the carrying values reported in the balance sheet approximate fair market value due to the relative short-term nature of the respective instruments (Level 1).

▪ Mortgage loans held for investment, net - The fair value of mortgage loans held for investment is estimated using a third-party pricing service. The fair value is determined using the present value of expected future cash flows at the asset level, assuming future prepayments and using discount factors determined by prices obtained for residential loans with similar characteristics in the secondary market, as discounted for illiquid assets. Quarterly, we perform analytics to assess the reasonableness of the fair value received from the third-party pricing service based on changes in the portfolio and changes in market conditions. We evaluate whether adjustments to third-party pricing is necessary and historically, we have not made adjustments to prices obtained from our third-party pricing service (Level 3).

▪ Investments in available-for-sale (AFS) securities - For mortgage-backed securities, we historically used a third-party pricing service to determine fair value. The service's pricing model was based on market data and utilized available trade, bid and other market information for similar securities (Level 2). The fair value of our investment in common stock was determined based on quoted market prices (Level 1).

▪ Receivables, net - long-term - The carrying values for the long-term portion of loans to franchisees approximate fair market value due to variable interest rates, low historical delinquency rates and franchise territories serving as collateral (Level 1). Long-term EA receivables are carried at net realizable value which approximates fair value (Level 3). Net realizable value is determined based on historical collection rates.

▪ Customer banking deposits - The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, checking, money market and savings accounts, was equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits was estimated by discounting the future cash flows using the rates offered by HRB Bank for products with similar remaining maturities (Level 3).

▪ Long-term debt - The fair value of our Senior Notes is based on quotes from multiple banks (Level 2).

▪ Contingent consideration - Fair value approximates the carrying amount (Level 3).

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Income Taxes

3 Months Ended

Jul. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8: INCOME TAXES

We file a consolidated federal income tax return in the United States (U.S.) with the Internal Revenue Service (IRS) and file tax returns in various state and foreign jurisdictions. Tax returns are typically examined and settled upon completion of the examination, with tax controversies settled either at the exam level or through the appeals process. The Company currently does not have a U.S. federal income tax return under examination. Our U.S. federal returns for 2011 and all prior periods have been audited by the IRS and are closed. Our return for 2012 has been audited by the IRS but remains open until the expiration of the three year statute of limitations in the fall of 2016. Our U.S. federal returns for 2013 and after have not been audited and remain open to examination. With respect to state and local jurisdictions and countries outside the United States, we and our subsidiaries are typically subject to examination for three to six years after the income tax returns have been filed. Although the outcome of the audits is always uncertain, we believe that adequate amounts of tax, interest and penalties have been provided for in the consolidated financial statements for any adjustments that might be incurred due to state, local or foreign audits.

We had gross unrecognized tax benefits of $106.0 million, $76.5 million and $111.5 million as of July 31, 2016 and 2015 and April 30, 2016, respectively. The gross unrecognized tax benefits decreased$5.5 million and $9.8 million during the three months ended July 31, 2016 and 2015, respectively. The decrease in unrecognized tax benefits during the three months ending July 31, 2016 is primarily related to favorable audit settlements in various states. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $13.9 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations and anticipated closure of various state matters currently under exam. The portion of unrecognized benefits expected to be cash settled within the next twelve months amounts to $7.5 million and is included in accrued income taxes on our consolidated balance sheet. The remaining liability for uncertain tax positions is classified as long-term and is included in other noncurrent liabilities in the consolidated balance sheet.

Consistent with prior years, our pretax loss for the three months ended July 31, 2016 is expected to be offset by income in the fourth quarter due to the established pattern of seasonality in our primary business operations. As such, management has determined that it is at least more-likely-than-not that realization of tax benefits recorded in our financial statements will occur within our fiscal year. The amount of tax benefit recorded reflects management’s estimate of the annual effective tax rate applied to the year-to-date loss from continuing operations. Certain discrete tax adjustments are also reflected in income tax expense for the periods presented.

A discrete income tax benefit of $6.8 million was recorded in the three months ended July 31, 2016, compared to a discrete tax benefit of $20.6 million in the same period of the prior year. The discrete tax benefit recorded in the current period resulted primarily from favorable settlements of state audits. The discrete tax benefit recorded in the prior year resulted primarily from a law change enacted in the state of Missouri.

Our effective tax rate for continuing operations, including the effects of discrete income tax items was 40.5% and 48.4% for the three months ended July 31, 2016 and 2015, respectively. Discrete items increased management's estimate of the annualized effective tax rate for the three months ended July 31, 2016 and 2015 by 3.3% and 11.0%, respectively. Due to the loss in both periods, a discrete tax benefit in either period increases the tax rate while an item of discrete tax expense decreases the tax rate. The impact of discrete tax items combined with the seasonal nature of our business can cause the effective tax rate through our first quarter to be significantly different than the rate for our full fiscal year.

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Interest Income And Interest Expense

3 Months Ended

Jul. 31, 2016

Interest Income And Interest Expense [Abstract]

Other Income And Other Expenses

NOTE 9: OTHER INCOME AND OTHER EXPENSES

The following table shows the components of other income and other expenses:

(in 000s)
	Three months ended July 31,
	2016			2015
Other income, net:
Mortgage loans and real estate owned, net	$	1,537		$	—
Interest and gains on AFS securities	31			—
Other	1,400			433
	$	2,968		$	433
Other expenses, net:
Foreign currency losses	$	(21	)	$	(4,599	)
Other	(306		)	(386		)
	$	(327	)	$	(4,985	)

In connection with our deregistration as a savings and loan holding company (SLHC), we no longer present interest income on mortgage loans held for investment and various other investments as revenues. Effective September 1, 2015, these amounts are prospectively reported in other income on the consolidated statements of operations and comprehensive loss.

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Commitments And Contingencies

3 Months Ended

Jul. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

NOTE 10: COMMITMENTS AND CONTINGENCIES

Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	204,342		$	189,779
Amounts deferred for new extended service plans issued	978			983
Revenue recognized on previous deferrals	(31,650		)	(31,069		)
Balance, end of the period	$	173,670		$	159,693

We accrued $5.8 million, $7.6 million and $7.0 million as of July 31, 2016 and 2015 and April 30, 2016, respectively, related to estimated losses under the standard guarantee, which is included with assisted tax preparation services. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets.

We have accrued estimated contingent consideration totaling $8.3 million, $10.7 million and $8.7 million as of July 31, 2016 and 2015 and April 30, 2016, respectively, related to acquisitions, with amounts recorded in deferred revenue and other liabilities. Estimates of contingent payments are typically based on expected financial performance of the acquired business and economic conditions at the time of acquisition. Should actual results differ from our assumptions, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations.

We have contractual commitments to fund certain franchises with approved revolving lines of credit. Our total obligation under these lines of credit was $59.4 million at July 31, 2016, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $28.1 million.

NOTE 12: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of residential mortgage-backed securities (RMBSs). In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. Claims under these representations and warranties together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims." These representations and warranties varied based on the nature of the transaction and the buyer's or insurer's requirements, but generally pertained to the ownership of the loan, the validity of the lien securing the loan, borrower fraud, the loan's compliance with the criteria for inclusion in the transaction, including compliance with SCC's underwriting standards or loan criteria established by the buyer, ability to deliver required documentation, and compliance with applicable laws. Representations and warranties related to borrower fraud in whole loan sale transactions to institutional investors, which were generally securitized by such investors and represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan.

Representation and warranty claims received by SCC have primarily related to alleged breaches of representations and warranties related to a loan's compliance with the underwriting standards established by SCC at origination and borrower fraud for loans originated in calendar years 2006 and 2007. SCC has received claims representing an original principal amount of $2.6 billion since May 1, 2008, of which $1.9 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS –SCC has entered into tolling agreements with counterparties that have made a significant portion of previously denied representation and warranty claims. While tolling agreements remain in effect, they toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC.

SCC has engaged in discussions with counterparties since fiscal year 2013 regarding the bulk settlement of previously denied and potential future representation and warranty and other claims against SCC. Based on settlement discussions with counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the claims that are the subject of these discussions, and SCC has utilized that approach in prior fiscal years to resolve certain of these claims. On December 18, 2015, SCC entered into settlement agreements with two additional counterparties to resolve certain additional claims, subject to the terms and conditions set forth in these settlement agreements. On July 13, 2016, SCC entered into a settlement agreement with an additional counterparty to resolve certain additional claims. The amounts paid under these settlement agreements were fully covered by prior accruals. In the event that the ongoing efforts to settle are not successful, SCC believes claim volumes may increase or litigation may result.

SCC will continue to vigorously contest any request for repurchase when it has concluded that a valid basis for repurchase does not exist. SCC's decision whether to engage in bulk settlement discussions is based on factors that vary by counterparty or type of counterparty and include the considerations used by SCC in determining its loss estimate, described below under "Liability for Estimated Contingent Losses."

LIABILITY FOR ESTIMATED CONTINGENT LOSSES –SCC accrues a liability for losses related to representation and warranty claims when those losses are believed to be both probable and reasonably estimable. Development of loss estimates is subject to a high degree of management judgment and estimates may vary significantly period to period. SCC's loss estimate as of July 31, 2016, is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and the factors mentioned below. These factors include the terms of prior bulk settlements, the terms expected to result from ongoing bulk settlement discussions, and an assessment of, among other things, historical claim results, threatened claims, terms and provisions of related agreements, counterparty willingness to pursue a settlement, legal standing of counterparties to provide a comprehensive settlement, bulk settlement methodologies used and publicly disclosed by other market participants, the potential pro-rata realization of the claims as compared to all claims and other relevant facts and circumstances when developing its estimate of probable loss. SCC believes that the most significant of these factors are the terms expected to result from ongoing bulk settlement discussions, which have been primarily influenced by the bulk settlement methodologies used and publicly disclosed by other market participants and the anticipated pro-rata realization of the claims of particular counterparties as compared to the anticipated realization if all claims and litigation were resolved together with payment of SCC's related administration and legal expense. Changes in any one of the factors mentioned above could significantly impact the estimate.

The liability is included in deferred revenue and other current liabilities on the consolidated balance sheets. A rollforward of SCC's accrued liability for these loss contingencies is as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	65,265		$	149,765
Provisions	235			—
Payments	(40,000		)	—
Balance, end of the period	$	25,500		$	149,765

On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the RMBS transactions into which SCC entered. However this decision would not affect representation and warranty claims and lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement or a suit was timely filed. It is possible that in response to the statute of limitations rulings in the ACE case and similar rulings in other state and federal courts, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may seek to distinguish certain aspects of the ACE decision, pursue alternate legal theories of recovery, or assert claims against other contractual parties such as securitization trustees. For example, a recent ruling by a New York intermediate appellate court allowed a counterparty to pursue litigation on additional loans in the same trust even though only some of the loans complied with the condition precedent of timely pre-suit notice and opportunity to cure or repurchase. The impact on SCC, if any, from alternative legal theories seeking to avoid or distinguish the ACE decision, or judicial limitations on the ACE decision, is unclear. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations.

SCC believes it is reasonably possible that future losses related to representation and warranty claims may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably estimable possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses.

As described more fully in note 11, losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters, depositors, and securitization trustees in securitization transactions in which SCC participated. These indemnification claims or reserved contribution rights are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, have not accrued a liability for these claims or rights, and are not able to estimate a reasonably possible loss or range of loss for these claims or rights. Accordingly, neither the accrued liability described above totaling $25.5 million, nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims or reserved contribution rights. There can be no assurances as to the outcome or impact of these indemnification claims or reserved contribution rights. In the event of unfavorable outcomes on these claims or rights, the amount required to discharge or settle them could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations and cash flows.

If the amount that SCC is ultimately required to pay with respect to claims and litigation related to its past sales and securitizations of mortgage loans, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants may also attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities. SCC's principal assets, as of July 31, 2016, total approximately $347 million and consist primarily of an intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows.

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Litigation And Related Contingencies

3 Months Ended

Jul. 31, 2016

Litigation And Related Contingencies [Abstract]

Litigation And Related Contingencies

NOTE 11: LITIGATION AND RELATED CONTINGENCIES

We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise, including as described below. The matters described below are not all of the lawsuits to which we are subject. In some of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims over an extended period of time.

The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business activities, including as described below.

We accrue liabilities for litigation, claims and other loss contingencies and any related settlements (each referred to, individually, as a "matter" and, collectively, as "matters") when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been accrued for a number of the matters noted below. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range.

For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of July 31, 2016. While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our consolidated financial position, results of operations and cash flows. As of July 31, 2016 and 2015 and April 30, 2016, we accrued liabilities of $2.3 million, $9.3 million and $2.3 million, respectively, for matters addressed in this note.

For some matters where a liability has not been accrued, we are able to estimate a reasonably possible loss or range of loss. This estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Those matters for which an estimate is not reasonably possible are not included within this estimated range. Therefore, this estimated range of reasonably possible loss represents what we believe to be an estimate of reasonably possible loss only for certain matters meeting these criteria. It does not represent our maximum loss exposure. For those matters, and for matters where a liability has been accrued, as of July 31, 2016, we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations.

On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been, remains, and may in the future be subject to litigation, claims, including indemnification and contribution claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims, and lawsuits include actions by regulators, third parties seeking indemnification, including depositors, underwriters, and securitization trustees, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims, and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure, and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws, and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters.

On May 31, 2012, a lawsuit was filed by Homeward Residential, Inc. (Homeward) in the Supreme Court of the State of New York, County of New York, against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Index No. 651885/2012). SCC removed the case to the United States District Court for the Southern District of New York on June 28, 2012 (Case No. 12-cv-5067). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-2 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract, anticipatory breach, indemnity and declaratory judgment in connection with alleged losses incurred as a result of the breach of representations and warranties relating to SCC and to loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses, as well as a repurchase of all loans due to alleged misrepresentations by SCC as to itself and as to the loans' compliance with its underwriting standards and the value of underlying real estate. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase, anticipatory breach, indemnity, and declaratory judgment. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

On September 28, 2012, a second lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 12-cv-7319). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-3 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 96 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12, is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

On April 5, 2013, a third lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC. The suit, styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 13-cv-2107), was filed as a related matter to the September 2012 Homeward suit mentioned above. In this April 2013 lawsuit, the plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2007-4 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 159 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12, is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. SCC has received notices of claims for indemnification relating to lawsuits to which underwriters or depositors are party. Based on information currently available to SCC, it believes that the 22 lawsuits in which notice of a claim has been made involve 39 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al., filed in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) and settled as to SCC in August 2015), and has not had control of this litigation or any settlements thereof, SCC does not have precise information about the amount of damages or other remedies being asserted, the defenses to the claims in such lawsuits or the terms of any settlements of such lawsuits. SCC therefore cannot reasonably estimate the amount of potential losses or associated fees and expenses that may be incurred in connection with such lawsuits, which may be material. Additional lawsuits against the underwriters or depositors may be filed in the future, and SCC may receive additional notices of claims for indemnification from underwriters or depositors with respect to existing or new lawsuits or settlements of such lawsuits. Certain of the notices received included, and future notices may include, a reservation of rights, which are referred to as "reserved contribution rights," that encompasses a right of contribution which may become operative if indemnification is unavailable or insufficient to cover all of the losses and expenses involved. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, nor have we accrued a liability related to any of these claims or rights.

Securitization trustees also are, or have been, involved in lawsuits related to securitization transactions in which SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers or other parties breached their representations and warranties or otherwise failed to fulfill their obligations, including that securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory requirements by failing to properly protect the certificate holders’ interests. SCC may receive notices for indemnification with respect to existing or new lawsuits or settlements of such lawsuits in its capacity as originator, depositor, or servicer. We have not concluded that a loss related to any indemnification claims by securitization trustees is probable, nor have we accrued a liability for such claims.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

Compliance Fee Litigation. On April 16, 2012, a putative class action lawsuit was filed against us in the Circuit Court of Jackson County, Missouri styled Manuel H. Lopez III v. H&R Block, Inc., et al. (Case # 1216CV12290) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all Missouri citizens who were charged the compliance fee, and asserts claims of violation of the Missouri Merchandising Practices Act, money had and received, and unjust enrichment. We filed a motion to compel arbitration of the 2011 claims. The court denied the motion. We filed an appeal. On May 6, 2014, the Missouri Court of Appeals, Western District, reversed the ruling of the trial court and remanded the case for further consideration of the motion. On March 12, 2015, the trial court denied the motion on remand. We filed an additional appeal. On March 8, 2016, the appellate court affirmed the decision of the trial court. We filed an application for transfer of the appeal in the Supreme Court of Missouri, which was denied. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK)concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff originally sought to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserted claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. In June 2014, the court denied class certification of the remaining 2012 claims. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. In January 2016, the plaintiff filed an amended complaint asserting claims of violation of Missouri and California state consumer laws, money had and received, and unjust enrichment, along with a motion to certify a class of all persons (excluding citizens of Missouri) who were charged the compliance fee in the state of California. We subsequently filed a motion for summary judgment on all claims. On April 29, 2016, the court granted our motion for summary judgment on all claims and denied the plaintiff's motion for class certification as moot. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

LITIGATION, CLAIMS AND OTHER LOSS CONTINGENCIES PERTAINING TO OTHER DISCONTINUED OPERATIONS –

Express IRA Litigation. On January 2, 2008, the Mississippi Attorney General in the Chancery Court of Hinds County, Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express IRA product that is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial Advisors, Inc., et al. The complaint alleges fraudulent business practices, deceptive acts and practices, common law fraud and breach of fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief, disgorgement of profits, damages and restitution, civil penalties and punitive damages. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation through an indemnification agreement.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	65,265		$	149,765
Provisions	235			—
Payments	(40,000		)	—
Balance, end of the period	$	25,500		$	149,765

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Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations

3 Months Ended

Jul. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations

NOTE 10: COMMITMENTS AND CONTINGENCIES

Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	204,342		$	189,779
Amounts deferred for new extended service plans issued	978			983
Revenue recognized on previous deferrals	(31,650		)	(31,069		)
Balance, end of the period	$	173,670		$	159,693

We accrued $5.8 million, $7.6 million and $7.0 million as of July 31, 2016 and 2015 and April 30, 2016, respectively, related to estimated losses under the standard guarantee, which is included with assisted tax preparation services. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets.

We have accrued estimated contingent consideration totaling $8.3 million, $10.7 million and $8.7 million as of July 31, 2016 and 2015 and April 30, 2016, respectively, related to acquisitions, with amounts recorded in deferred revenue and other liabilities. Estimates of contingent payments are typically based on expected financial performance of the acquired business and economic conditions at the time of acquisition. Should actual results differ from our assumptions, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations.

We have contractual commitments to fund certain franchises with approved revolving lines of credit. Our total obligation under these lines of credit was $59.4 million at July 31, 2016, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $28.1 million.

NOTE 12: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS

SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations.

Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of residential mortgage-backed securities (RMBSs). In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. Claims under these representations and warranties together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims." These representations and warranties varied based on the nature of the transaction and the buyer's or insurer's requirements, but generally pertained to the ownership of the loan, the validity of the lien securing the loan, borrower fraud, the loan's compliance with the criteria for inclusion in the transaction, including compliance with SCC's underwriting standards or loan criteria established by the buyer, ability to deliver required documentation, and compliance with applicable laws. Representations and warranties related to borrower fraud in whole loan sale transactions to institutional investors, which were generally securitized by such investors and represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan.

Representation and warranty claims received by SCC have primarily related to alleged breaches of representations and warranties related to a loan's compliance with the underwriting standards established by SCC at origination and borrower fraud for loans originated in calendar years 2006 and 2007. SCC has received claims representing an original principal amount of $2.6 billion since May 1, 2008, of which $1.9 billion were received prior to fiscal year 2013.

SETTLEMENT ACTIONS –SCC has entered into tolling agreements with counterparties that have made a significant portion of previously denied representation and warranty claims. While tolling agreements remain in effect, they toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC.

SCC has engaged in discussions with counterparties since fiscal year 2013 regarding the bulk settlement of previously denied and potential future representation and warranty and other claims against SCC. Based on settlement discussions with counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the claims that are the subject of these discussions, and SCC has utilized that approach in prior fiscal years to resolve certain of these claims. On December 18, 2015, SCC entered into settlement agreements with two additional counterparties to resolve certain additional claims, subject to the terms and conditions set forth in these settlement agreements. On July 13, 2016, SCC entered into a settlement agreement with an additional counterparty to resolve certain additional claims. The amounts paid under these settlement agreements were fully covered by prior accruals. In the event that the ongoing efforts to settle are not successful, SCC believes claim volumes may increase or litigation may result.

SCC will continue to vigorously contest any request for repurchase when it has concluded that a valid basis for repurchase does not exist. SCC's decision whether to engage in bulk settlement discussions is based on factors that vary by counterparty or type of counterparty and include the considerations used by SCC in determining its loss estimate, described below under "Liability for Estimated Contingent Losses."

LIABILITY FOR ESTIMATED CONTINGENT LOSSES –SCC accrues a liability for losses related to representation and warranty claims when those losses are believed to be both probable and reasonably estimable. Development of loss estimates is subject to a high degree of management judgment and estimates may vary significantly period to period. SCC's loss estimate as of July 31, 2016, is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and the factors mentioned below. These factors include the terms of prior bulk settlements, the terms expected to result from ongoing bulk settlement discussions, and an assessment of, among other things, historical claim results, threatened claims, terms and provisions of related agreements, counterparty willingness to pursue a settlement, legal standing of counterparties to provide a comprehensive settlement, bulk settlement methodologies used and publicly disclosed by other market participants, the potential pro-rata realization of the claims as compared to all claims and other relevant facts and circumstances when developing its estimate of probable loss. SCC believes that the most significant of these factors are the terms expected to result from ongoing bulk settlement discussions, which have been primarily influenced by the bulk settlement methodologies used and publicly disclosed by other market participants and the anticipated pro-rata realization of the claims of particular counterparties as compared to the anticipated realization if all claims and litigation were resolved together with payment of SCC's related administration and legal expense. Changes in any one of the factors mentioned above could significantly impact the estimate.

The liability is included in deferred revenue and other current liabilities on the consolidated balance sheets. A rollforward of SCC's accrued liability for these loss contingencies is as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	65,265		$	149,765
Provisions	235			—
Payments	(40,000		)	—
Balance, end of the period	$	25,500		$	149,765

On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the RMBS transactions into which SCC entered. However this decision would not affect representation and warranty claims and lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement or a suit was timely filed. It is possible that in response to the statute of limitations rulings in the ACE case and similar rulings in other state and federal courts, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may seek to distinguish certain aspects of the ACE decision, pursue alternate legal theories of recovery, or assert claims against other contractual parties such as securitization trustees. For example, a recent ruling by a New York intermediate appellate court allowed a counterparty to pursue litigation on additional loans in the same trust even though only some of the loans complied with the condition precedent of timely pre-suit notice and opportunity to cure or repurchase. The impact on SCC, if any, from alternative legal theories seeking to avoid or distinguish the ACE decision, or judicial limitations on the ACE decision, is unclear. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations.

SCC believes it is reasonably possible that future losses related to representation and warranty claims may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably estimable possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses.

As described more fully in note 11, losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters, depositors, and securitization trustees in securitization transactions in which SCC participated. These indemnification claims or reserved contribution rights are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, have not accrued a liability for these claims or rights, and are not able to estimate a reasonably possible loss or range of loss for these claims or rights. Accordingly, neither the accrued liability described above totaling $25.5 million, nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims or reserved contribution rights. There can be no assurances as to the outcome or impact of these indemnification claims or reserved contribution rights. In the event of unfavorable outcomes on these claims or rights, the amount required to discharge or settle them could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations and cash flows.

If the amount that SCC is ultimately required to pay with respect to claims and litigation related to its past sales and securitizations of mortgage loans, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants may also attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities. SCC's principal assets, as of July 31, 2016, total approximately $347 million and consist primarily of an intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows.

XML

Condensed Consolidating Financial Statements

3 Months Ended

Jul. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

NOTE 13: 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, our 2015 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 BALANCE SHEETS										(in 000s)
As of July 31, 2015	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	286,165	$	1,013,707	$	(490	)	$	1,299,382
Cash & cash equivalents - restricted	—		11,806		49,234		—			61,040
Receivables, net	1		77,539		25,654		—			103,194
Deferred tax assets and income taxes receivable	—		78,184		82,206		—			160,390
Prepaid expenses and other current assets	—		6,374		74,176		—			80,550
Investments in AFS securities	—		404,221		2,139		—			406,360
Total current assets	1		864,289		1,247,116		(490		)	2,110,916
Mortgage loans held for investment, net	—		230,130		—		—			230,130
Property and equipment, net	—		210		297,111		—			297,321
Intangible assets, net	—		—		417,009		—			417,009
Goodwill	—		—		454,394		—			454,394
Deferred tax assets and income taxes receivable	—		41,328		—		(29,951		)	11,377
Investments in subsidiaries	1,259,110		—		108,582		(1,367,692		)	—
Amounts due from affiliates	412,924		131,889		1,423		(546,236		)	—
Other noncurrent assets	—		69,215		39,092		—			108,307
Total assets	$	1,672,035	$	1,337,061	$	2,564,727	$	(1,944,369	)	$	3,629,454
Customer banking deposits	$	—	$	477,222	$	—	$	(490	)	$	476,732
Accounts payable and accrued expenses	1,206		6,679		108,970		—			116,855
Accrued salaries, wages and payroll taxes	—		2,293		31,154		—			33,447
Accrued income taxes and reserves for uncertain tax positions	—		49,240		196,301		—			245,541
Current portion of long-term debt	—		—		799		—			799
Deferred revenue and other current liabilities	—		169,900		146,980		—			316,880
Total current liabilities	1,206		705,334		484,204		(490		)	1,190,254
Long-term debt	—		494,727		7,233		—			501,960
Deferred tax liabilities and reserves for uncertain tax positions	—		26,737		140,817		(29,951		)	137,603
Deferred revenue and other noncurrent liabilities	—		1,660		128,550		—			130,210
Amounts due to affiliates	1,402		21		544,813		(546,236		)	—
Total liabilities	2,608		1,228,479		1,305,617		(576,677		)	1,960,027
Stockholders' equity	1,669,427		108,582		1,259,110		(1,367,692		)	1,669,427
Total liabilities and stockholders' equity	$	1,672,035	$	1,337,061	$	2,564,727	$	(1,944,369	)	$	3,629,454

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2016	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	9,025	$	887,776	$	—		$	896,801
Cash & cash equivalents - restricted	—		29,004		75,106		—			104,110
Receivables, net	—		71,882		81,234		—			153,116
Prepaid expenses and other current assets	—		6,925		58,516		—			65,441
Investments in AFS securities	—		—		1,133		—			1,133
Total current assets	—		116,836		1,103,765		—			1,220,601
Mortgage loans held for investment, net	—		202,385		—		—			202,385
Property and equipment, net	—		136		293,429		—			293,565
Intangible assets, net	—		—		433,885		—			433,885
Goodwill	—		—		470,757		—			470,757
Deferred tax assets and income taxes receivable	5,917		77,270		36,936		—			120,123
Investments in subsidiaries	1,738,643		—		108,995		(1,847,638		)	—
Amounts due from affiliates	—		1,307,612		1,714,009		(3,021,621		)	—
Other noncurrent assets	—		62,806		43,103		—			105,909
Total assets	$	1,744,560	$	1,767,045	$	4,204,879	$	(4,869,259	)	$	2,847,225
Accounts payable and accrued expenses	$	1,531	$	18,596	$	239,459	$	—		$	259,586
Accrued salaries, wages and payroll taxes	—		1,766		160,020		—			161,786
Accrued income taxes and reserves for uncertain tax positions	—		52,976		320,778		—			373,754
Current portion of long-term debt	—		—		826		—			826
Deferred revenue and other current liabilities	—		87,982		155,671		—			243,653
Total current liabilities	1,531		161,320		876,754		—			1,039,605
Long-term debt	—		1,484,766		6,609		—			1,491,375
Deferred tax liabilities and reserves for uncertain tax positions	5,917		10,786		116,257		—			132,960
Deferred revenue and other noncurrent liabilities	—		1,178		159,004		—			160,182
Amounts due to affiliates	1,714,009		—		1,307,612		(3,021,621		)	—
Total liabilities	1,721,457		1,658,050		2,466,236		(3,021,621		)	2,824,122
Stockholders' equity	23,103		108,995		1,738,643		(1,847,638		)	23,103
Total liabilities and stockholders' equity	$	1,744,560	$	1,767,045	$	4,204,879	$	(4,869,259	)	$	2,847,225

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Three months ended July 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities:	$	—		$	(57,939	)	$	(417,736	)	$	—		$	(475,675	)
Cash flows from investing:
Sales, maturities of and payments received on AFS securities	—			58			—			—			58
Principal payments on mortgage loans held for investment, net	—			8,427			—			—			8,427
Capital expenditures	—			(5		)	(6,241		)	—			(6,246		)
Payments made for business acquisitions, net of cash acquired	—			—			(1,635		)	—			(1,635		)
Loans made to franchisees	—			(2,202		)	(17		)	—			(2,219		)
Repayments from franchisees	—			6,305			168			—			6,473
Intercompany borrowings (payments)	—			40,217			(92,187		)	51,970			—
Other, net	—			16			204			—			220
Net cash provided by (used in) investing activities	—			52,816			(99,708		)	51,970			5,078
Cash flows from financing:
Dividends paid	(48,514		)	—			—			—			(48,514		)
Repurchase of common stock, including shares surrendered	(45,312		)	—			—			—			(45,312		)
Proceeds from exercise of stock options	1,639			—			—			—			1,639
Intercompany borrowings (payments)	92,187			—			(40,217		)	(51,970		)	—
Other, net	—			—			(24,779		)	—			(24,779		)
Net cash provided by (used in) financing activities	—			—			(64,996		)	(51,970		)	(116,966		)
Effects of exchange rates on cash	—			—			(2,367		)	—			(2,367		)
Net decrease in cash and cash equivalents	—			(5,123		)	(584,807		)	—			(589,930		)
Cash and cash equivalents at beginning of the period	—			9,025			887,776			—			896,801
Cash and cash equivalents at end of the period	$	—		$	3,902		$	302,969		$	—		$	306,871

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Three months ended July 31, 2015	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	27,342		$	(405,588	)	$	—		$	(378,246	)
Cash flows from investing:
Sales, maturities of and payments received on AFS securities	—			28,339			3,764			—			32,103
Principal payments on mortgage loans held for investment, net	—			8,537			—			—			8,537
Capital expenditures	—			(19		)	(8,670		)	—			(8,689		)
Payments made for business acquisitions, net of cash acquired	—			—			(12,271		)	—			(12,271		)
Loans made to franchisees	—			(2,582		)	—			—			(2,582		)
Repayments from franchisees	—			11,288			146			—			11,434
Intercompany borrowings (payments)	—			2,226			(59,804		)	57,578			—
Other, net	—			1,439			2,123			—			3,562
Net cash provided by (used in) investing activities	—			49,228			(74,712		)	57,578			32,094
Cash flows from financing:
Customer banking deposits, net	—			(268,482		)	—			(50		)	(268,532		)
Dividends paid	(55,063		)	—			—			—			(55,063		)
Repurchase of common stock, including shares surrendered	(17,756		)	—			—			—			(17,756		)
Proceeds from exercise of stock options	13,015			—			—			—			13,015
Intercompany borrowings (payments)	59,804			—			(2,226		)	(57,578		)	—
Other, net	—			—			(22,413		)	—			(22,413		)
Net cash used in financing activities	—			(268,482		)	(24,639		)	(57,628		)	(350,749		)
Effects of exchange rates on cash	—			—			(10,907		)	—			(10,907		)
Net decrease in cash and cash equivalents	—			(191,912		)	(515,846		)	(50		)	(707,808		)
Cash and cash equivalents at beginning of the period	—			478,077			1,529,553			(440		)	2,007,190
Cash and cash equivalents at end of the period	$	—		$	286,165		$	1,013,707		$	(490	)	$	1,299,382

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Summary Of Significant Accounting Policies (Policy)

3 Months Ended

Jul. 31, 2016

Summary Of Significant Accounting Policies [Abstract]

Basis of Presentation

–The consolidated balance sheets as of July 31, 2016 and 2015, the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2016 and 2015, and the condensed consolidated statements of cash flows for the three months ended July 31, 2016 and 2015 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows as of July 31, 2016 and 2015 and for all periods presented have been made.

"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and its subsidiaries, as appropriate to the context.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U. S. (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our April 30, 2016 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2016 or for the year then ended are derived from our April 30, 2016 Annual Report to Shareholders on Form 10-K.

Management Estimates

MANAGEMENT ESTIMATES –The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, valuation allowances on deferred tax assets, reserves for uncertain tax positions and related matters. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates.

Nature of Operations [Text Block]

SEASONALITY OF BUSINESS –Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of January through April. Therefore, results for interim periods are not indicative of results to be expected for the full year.

Interest Expense Allocated to Discontinued Operations, Policy [Policy Text Block]

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See notes 11 and 12 for additional information on litigation, claims and other loss contingencies related to our discontinued operations.

New Accounting Pronouncements, Policy [Policy Text Block]

NEW ACCOUNTING PRONOUNCEMENTS – In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance must be applied retrospectively to all periods presented. We adopted this guidance effective May 1, 2016. Prior periods have been retrospectively adjusted to conform to the current period presentation. Debt issuance costs previously reported as other current assets and other noncurrent assets have been reclassified to long-term debt. This guidance did not have a material effect on our consolidated financial statements.

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Loss Per Share and Stockholders' Equity (Tables)

3 Months Ended

Jul. 31, 2016

Earnings Per Share [Abstract]

Schedule Of Share Repurchase And Retirements [Table Text Block]

The cost of shares retired during the current period was allocated to the components of stockholders’ equity as follows:

	(in 000s)
Common stock	$	20
Additional paid-in-capital	1,223
Retained earnings	47,351
Total	$	48,594

Computations Of Basic And Diluted Earnings Per Share

The computations of basic and diluted earnings per share from continuing operations are as follows:

(in 000s, except per share amounts)
	Three months ended July 31,
	2016			2015
Net loss from continuing operations attributable to shareholders	$	(121,026	)	$	(96,505	)
Amounts allocated to participating securities	(124		)	(102		)
Net loss from continuing operations attributable to common shareholders	$	(121,150	)	$	(96,607	)
Basic weighted average common shares	220,484			275,765
Potential dilutive shares	—			—
Dilutive weighted average common shares	220,484			275,765
Loss per share from continuing operations attributable to common shareholders:
Basic	$	(0.55	)	$	(0.35	)
Diluted	(0.55		)	(0.35		)

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Receivables (Tables)

3 Months Ended

Jul. 31, 2016

Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract]

Schedule Of Short-Term Receivables

Receivables consist of the following:

(in 000s)
As of	July 31, 2016					July 31, 2015					April 30, 2016
	Short-term			Long-term		Short-term			Long-term		Short-term			Long-term
Loans to franchisees	$	47,905		$	46,461	$	56,277		$	57,792	$	50,000		$	46,284
Receivables for tax preparation and related fees	39,115			5,528		39,927			6,103		52,327			5,528
Cash Back® receivables	4,515			—		2,777			—		37,663			—
Emerald Advance lines of credit	24,857			111		20,321			598		25,092			869
Royalties from franchisees	6,885			—		4,509			—		9,997			—
Other	36,529			4,414		33,154			7,934		35,048			7,726
	159,806			56,514		156,965			72,427		210,127			60,407
Allowance for doubtful accounts	(56,381		)	—		(53,771		)	—		(57,011		)	—
	$	103,425		$	56,514	$	103,194		$	72,427	$	153,116		$	60,407

Schedule Of Receivables Based On Year Of Origination

These amounts as of July 31, 2016, by year of origination, are as follows:

(in 000s)
Credit Quality Indicator – Year of origination:
2016	$	9,224
2015 and prior	182
Revolving loans	15,562
	$	24,968

Schedule Of Activity In The Allowance For Doubtful Accounts

Activity in the allowance for doubtful accounts for our receivables for the three months ended July 31, 2016 and 2015 is as follows:

(in 000s)
	EAs		All Other			Total
Balances as of May 1, 2016	$	9,007	$	48,004		$	57,011
Provision	451		966			1,417
Charge-offs	—		(2,047		)	(2,047		)
Balances as of July 31, 2016	$	9,458	$	46,923		$	56,381
Balances as of May 1, 2015	$	7,353	$	47,174		$	54,527
Provision	—		713			713
Charge-offs	—		(1,469		)	(1,469		)
Balances as of July 31, 2015	$	7,353	$	46,418		$	53,771

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Mortgage Loans Held For Investment And Related Assets (Tables)

3 Months Ended

Jul. 31, 2016

Mortgage Loans Held For Investment And Related Assets [Abstract]

Schedule Of Mortgage Loan Portfolio

The composition of our mortgage loan portfolio is as follows:

(dollars in 000s)
As of	July 31, 2016					July 31, 2015					April 30, 2016
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	102,535		52	%	$	124,752		53	%	$	108,251		52	%
Fixed-rate loans	93,539			48	%	111,096			47	%	97,957			48	%
	196,074			100	%	235,848			100	%	206,208			100	%
Unamortized deferred fees and costs	1,611					1,941					1,695
Less: Allowance for loan losses	(5,310		)			(7,659		)			(5,518		)
	$	192,375				$	230,130				$	202,385

Schedule Of Allowance For Loan Losses

Activity in the allowance for loan losses for the three months ended July 31, 2016 and 2015 is as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance at beginning of the period	$	5,518		$	7,886
Provision	—			(28		)
Recoveries	370			365
Charge-offs	(578		)	(564		)
Balance at end of the period	$	5,310		$	7,659

Schedule Of Past Due Mortgage Loans

Detail of the aging of the mortgage loans in our portfolio as of July 31, 2016 is as follows:

(in 000s)
	Less than 60 Days Past Due		60 – 89 Days Past Due		90+ Days Past Due(1)		Total Past Due		Current		Total
Purchased from SCC	$	8,849	$	745	$	38,503	$	48,097	$	68,392	$	116,489
All other	1,457		349		5,236		7,042		72,543		79,585
	$	10,306	$	1,094	$	43,739	$	55,139	$	140,935	$	196,074

⁽¹⁾  We do not accrue interest on loans past due 90 days or more.

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Goodwill And Intangible Assets (Tables)

3 Months Ended

Jul. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule Of Goodwill

Changes in the carrying amount of goodwill for the three months ended July 31, 2016 and 2015 are as follows:

(in 000s)
	Goodwill			Accumulated Impairment Losses			Net
Balances as of April 30, 2016	$	503,054		$	(32,297	)	$	470,757
Acquisitions	23			—			23
Disposals and foreign currency changes, net	162			—			162
Impairments	—			—			—
Balances as of July 31, 2016	$	503,239		$	(32,297	)	$	470,942
Balances as of April 30, 2015	$	474,128		$	(32,297	)	$	441,831
Acquisitions	14,030			—			14,030
Disposals and foreign currency changes, net	(1,467		)	—			(1,467		)
Impairments	—			—			—
Balances as of July 31, 2015	$	486,691		$	(32,297	)	$	454,394

Schedule Of Intangible Assets

Components of the intangible assets are as follows:

(in 000s)
	Gross Carrying Amount		Accumulated Amortization			Net
As of July 31, 2016:
Reacquired franchise rights	$	319,545	$	(72,977	)	$	246,568
Customer relationships	206,606		(110,696		)	95,910
Internally-developed software	132,897		(99,873		)	33,024
Noncompete agreements	31,492		(26,045		)	5,447
Franchise agreements	19,201		(9,814		)	9,387
Purchased technology	54,700		(27,425		)	27,275
Acquired assets pending final allocation (1)	2,298		—			2,298
	$	766,739	$	(346,830	)	$	419,909
As of July 31, 2015:
Reacquired franchise rights	$	294,918	$	(51,233	)	$	243,685
Customer relationships	169,998		(83,471		)	86,527
Internally-developed software	120,522		(84,215		)	36,307
Noncompete agreements	30,576		(24,091		)	6,485
Franchise agreements	19,201		(8,534		)	10,667
Purchased technology	54,700		(21,362		)	33,338
	$	689,915	$	(272,906	)	$	417,009
As of April 30, 2016:
Reacquired franchise rights	$	319,354	$	(68,284	)	$	251,070
Customer relationships	206,607		(104,072		)	102,535
Internally-developed software	131,161		(95,768		)	35,393
Noncompete agreements	31,499		(25,572		)	5,927
Franchise agreements	19,201		(9,494		)	9,707
Purchased technology	54,700		(25,909		)	28,791
Acquired assets pending final allocation (1)	462		—			462
	$	762,984	$	(329,099	)	$	433,885

⁽¹⁾    Represents recent business acquisitions, for which final purchase price allocations have not yet been determined.

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Long-Term Debt Long-Term Debt (Tables)

3 Months Ended

Jul. 31, 2016

Long-term Debt, Unclassified [Abstract]

Components of Long-Term Debt

The components of long-term debt are as follows:

							(in 000s)
As of	July 31, 2016			July 31, 2015			April 30, 2016
Senior Notes, 4.125%, due October 2020	$	650,000		$	—		$	650,000
Senior Notes, 5.500%, due November 2022	500,000			500,000			500,000
Senior Notes, 5.250%, due October 2025	350,000			—			350,000
Capital lease obligation	7,229			8,031			7,435
Debt issuance costs and discounts	(14,575		)	(5,272		)	(15,234		)
	1,492,654			502,759			1,492,201
Less: Current portion	(864		)	(799		)	(826		)
	$	1,491,790		$	501,960		$	1,491,375

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Fair Value (Tables)

3 Months Ended

Jul. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The carrying amounts and estimated fair values of our financial instruments are as follows:

(in 000s)
As of	July 31, 2016				July 31, 2015				April 30, 2016
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Cash and cash equivalents	$	306,871	$	306,871	$	1,299,382	$	1,299,382	$	896,801	$	896,801
Cash and cash equivalents - restricted	122,025		122,025		61,040		61,040		104,110		104,110
Receivables, net - short-term	103,425		103,425		103,194		103,194		153,116		153,116
Mortgage loans held for investment, net	192,375		185,057		230,130		184,277		202,385		190,503
Investments in AFS securities	1,123		1,123		407,426		407,426		1,133		1,133
Receivables, net - long-term	56,514		56,514		72,427		72,427		60,407		60,407
Liabilities:
Customer banking deposits	—		—		477,145		473,720		—		—
Long-term debt	1,492,654		1,606,364		502,759		552,431		1,492,201		1,566,098
Contingent consideration	8,347		8,347		10,650		10,650		8,657		8,657

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Interest Income And Interest Expense (Tables)

3 Months Ended

Jul. 31, 2016

Interest Income And Interest Expense [Abstract]

Schedule Of Other Income And Other Expenses

The following table shows the components of other income and other expenses:

(in 000s)
	Three months ended July 31,
	2016			2015
Other income, net:
Mortgage loans and real estate owned, net	$	1,537		$	—
Interest and gains on AFS securities	31			—
Other	1,400			433
	$	2,968		$	433
Other expenses, net:
Foreign currency losses	$	(21	)	$	(4,599	)
Other	(306		)	(386		)
	$	(327	)	$	(4,985	)

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Commitments And Contingencies (Tables)

3 Months Ended

Jul. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule Of Deferred Revenue Related To The Peace Of Mind Program

Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows:

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	204,342		$	189,779
Amounts deferred for new extended service plans issued	978			983
Revenue recognized on previous deferrals	(31,650		)	(31,069		)
Balance, end of the period	$	173,670		$	159,693

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Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Tables)

3 Months Ended

Jul. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Litigation And Related Contingencies

NOTE 11: LITIGATION AND RELATED CONTINGENCIES

We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise, including as described below. The matters described below are not all of the lawsuits to which we are subject. In some of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims over an extended period of time.

The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business activities, including as described below.

We accrue liabilities for litigation, claims and other loss contingencies and any related settlements (each referred to, individually, as a "matter" and, collectively, as "matters") when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been accrued for a number of the matters noted below. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range.

For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of July 31, 2016. While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our consolidated financial position, results of operations and cash flows. As of July 31, 2016 and 2015 and April 30, 2016, we accrued liabilities of $2.3 million, $9.3 million and $2.3 million, respectively, for matters addressed in this note.

For some matters where a liability has not been accrued, we are able to estimate a reasonably possible loss or range of loss. This estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Those matters for which an estimate is not reasonably possible are not included within this estimated range. Therefore, this estimated range of reasonably possible loss represents what we believe to be an estimate of reasonably possible loss only for certain matters meeting these criteria. It does not represent our maximum loss exposure. For those matters, and for matters where a liability has been accrued, as of July 31, 2016, we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material.

For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations.

On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows.

LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been, remains, and may in the future be subject to litigation, claims, including indemnification and contribution claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims, and lawsuits include actions by regulators, third parties seeking indemnification, including depositors, underwriters, and securitization trustees, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims, and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure, and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws, and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters.

On May 31, 2012, a lawsuit was filed by Homeward Residential, Inc. (Homeward) in the Supreme Court of the State of New York, County of New York, against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Index No. 651885/2012). SCC removed the case to the United States District Court for the Southern District of New York on June 28, 2012 (Case No. 12-cv-5067). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-2 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract, anticipatory breach, indemnity and declaratory judgment in connection with alleged losses incurred as a result of the breach of representations and warranties relating to SCC and to loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses, as well as a repurchase of all loans due to alleged misrepresentations by SCC as to itself and as to the loans' compliance with its underwriting standards and the value of underlying real estate. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase, anticipatory breach, indemnity, and declaratory judgment. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter.

On September 28, 2012, a second lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 12-cv-7319). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-3 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 96 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12, is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

On April 5, 2013, a third lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC. The suit, styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 13-cv-2107), was filed as a related matter to the September 2012 Homeward suit mentioned above. In this April 2013 lawsuit, the plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2007-4 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 159 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12, is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit.

Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. SCC has received notices of claims for indemnification relating to lawsuits to which underwriters or depositors are party. Based on information currently available to SCC, it believes that the 22 lawsuits in which notice of a claim has been made involve 39 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion). Because SCC has not been a party to these lawsuits (with the exception of Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al., filed in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) and settled as to SCC in August 2015), and has not had control of this litigation or any settlements thereof, SCC does not have precise information about the amount of damages or other remedies being asserted, the defenses to the claims in such lawsuits or the terms of any settlements of such lawsuits. SCC therefore cannot reasonably estimate the amount of potential losses or associated fees and expenses that may be incurred in connection with such lawsuits, which may be material. Additional lawsuits against the underwriters or depositors may be filed in the future, and SCC may receive additional notices of claims for indemnification from underwriters or depositors with respect to existing or new lawsuits or settlements of such lawsuits. Certain of the notices received included, and future notices may include, a reservation of rights, which are referred to as "reserved contribution rights," that encompasses a right of contribution which may become operative if indemnification is unavailable or insufficient to cover all of the losses and expenses involved. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, nor have we accrued a liability related to any of these claims or rights.

Securitization trustees also are, or have been, involved in lawsuits related to securitization transactions in which SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers or other parties breached their representations and warranties or otherwise failed to fulfill their obligations, including that securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory requirements by failing to properly protect the certificate holders’ interests. SCC may receive notices for indemnification with respect to existing or new lawsuits or settlements of such lawsuits in its capacity as originator, depositor, or servicer. We have not concluded that a loss related to any indemnification claims by securitization trustees is probable, nor have we accrued a liability for such claims.

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

Compliance Fee Litigation. On April 16, 2012, a putative class action lawsuit was filed against us in the Circuit Court of Jackson County, Missouri styled Manuel H. Lopez III v. H&R Block, Inc., et al. (Case # 1216CV12290) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all Missouri citizens who were charged the compliance fee, and asserts claims of violation of the Missouri Merchandising Practices Act, money had and received, and unjust enrichment. We filed a motion to compel arbitration of the 2011 claims. The court denied the motion. We filed an appeal. On May 6, 2014, the Missouri Court of Appeals, Western District, reversed the ruling of the trial court and remanded the case for further consideration of the motion. On March 12, 2015, the trial court denied the motion on remand. We filed an additional appeal. On March 8, 2016, the appellate court affirmed the decision of the trial court. We filed an application for transfer of the appeal in the Supreme Court of Missouri, which was denied. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK)concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff originally sought to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserted claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. In June 2014, the court denied class certification of the remaining 2012 claims. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. In January 2016, the plaintiff filed an amended complaint asserting claims of violation of Missouri and California state consumer laws, money had and received, and unjust enrichment, along with a motion to certify a class of all persons (excluding citizens of Missouri) who were charged the compliance fee in the state of California. We subsequently filed a motion for summary judgment on all claims. On April 29, 2016, the court granted our motion for summary judgment on all claims and denied the plaintiff's motion for class certification as moot. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

LITIGATION, CLAIMS AND OTHER LOSS CONTINGENCIES PERTAINING TO OTHER DISCONTINUED OPERATIONS –

Express IRA Litigation. On January 2, 2008, the Mississippi Attorney General in the Chancery Court of Hinds County, Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express IRA product that is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial Advisors, Inc., et al. The complaint alleges fraudulent business practices, deceptive acts and practices, common law fraud and breach of fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief, disgorgement of profits, damages and restitution, civil penalties and punitive damages. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter.

Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation through an indemnification agreement.

OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows.

We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

(in 000s)
Three months ended July 31,	2016			2015
Balance, beginning of the period	$	65,265		$	149,765
Provisions	235			—
Payments	(40,000		)	—
Balance, end of the period	$	25,500		$	149,765

XML

Condensed Consolidating Financial Statements (Tables)

3 Months Ended

Jul. 31, 2016

Jul. 31, 2015

Condensed Financial Statements, Captions [Line Items]

Schedule Of Condensed Consolidating Statement Of Operations [Table Text Block]

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Three months ended July 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	15,504		$	109,800		$	(119	)	$	125,185
Cost of revenues	—			8,606			202,599			(119		)	211,086
Selling, general and administrative	—			2,480			96,343			—			98,823
Total operating expenses	—			11,086			298,942			(119		)	309,909
Other income, net	—			3,679			4,684			(5,395		)	2,968
Interest expense on external borrowings	—			(21,314		)	(152		)	—			(21,466		)
Other expenses, net	(124,662		)	(2,853		)	(14,314		)	141,502			(327		)
Loss from continuing operations before tax benefit	(124,662		)	(16,070		)	(198,924		)	136,107			(203,549		)
Income tax benefit	(989		)	(5,794		)	(75,740		)	—			(82,523		)
Net loss from continuing operations	(123,673		)	(10,276		)	(123,184		)	136,107			(121,026		)
Net loss from discontinued operations	—			(2,646		)	(1		)	—			(2,647		)
Net loss	(123,673		)	(12,922		)	(123,185		)	136,107			(123,673		)
Other comprehensive loss	(3,571		)	—			(3,571		)	3,571			(3,571		)
Comprehensive loss	$	(127,244	)	$	(12,922	)	$	(126,756	)	$	139,678		$	(127,244	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Three months ended July 31, 2015	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	24,767		$	113,044		$	(93	)	$	137,718
Cost of revenues	—			11,755			201,846			(93		)	213,508
Selling, general and administrative	—			4,376			93,816			—			98,192
Total operating expenses	—			16,131			295,662			(93		)	311,700
Other income, net	909			495			554			(1,525		)	433
Interest expense on external borrowings	—			(8,436		)	(139		)	—			(8,575		)
Other expenses, net	(102,593		)	(468		)	(12,255		)	110,331			(4,985		)
Income (loss) from continuing operations before taxes (benefit)	(101,684		)	227			(194,458		)	108,806			(187,109		)
Income taxes (benefit)	(2,025		)	3,286			(91,865		)	—			(90,604		)
Net loss from continuing operations	(99,659		)	(3,059		)	(102,593		)	108,806			(96,505		)
Net loss from discontinued operations	—			(3,154		)	—			—			(3,154		)
Net loss	(99,659		)	(6,213		)	(102,593		)	108,806			(99,659		)
Other comprehensive loss	(9,974		)	(1,187		)	(9,974		)	11,161			(9,974		)
Comprehensive loss	$	(109,633	)	$	(7,400	)	$	(112,567	)	$	119,967		$	(109,633	)

Schedule Of Condensed Consolidating Balance Sheet [Table Text Block]

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of July 31, 2015	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	286,165	$	1,013,707	$	(490	)	$	1,299,382
Cash & cash equivalents - restricted	—		11,806		49,234		—			61,040
Receivables, net	1		77,539		25,654		—			103,194
Deferred tax assets and income taxes receivable	—		78,184		82,206		—			160,390
Prepaid expenses and other current assets	—		6,374		74,176		—			80,550
Investments in AFS securities	—		404,221		2,139		—			406,360
Total current assets	1		864,289		1,247,116		(490		)	2,110,916
Mortgage loans held for investment, net	—		230,130		—		—			230,130
Property and equipment, net	—		210		297,111		—			297,321
Intangible assets, net	—		—		417,009		—			417,009
Goodwill	—		—		454,394		—			454,394
Deferred tax assets and income taxes receivable	—		41,328		—		(29,951		)	11,377
Investments in subsidiaries	1,259,110		—		108,582		(1,367,692		)	—
Amounts due from affiliates	412,924		131,889		1,423		(546,236		)	—
Other noncurrent assets	—		69,215		39,092		—			108,307
Total assets	$	1,672,035	$	1,337,061	$	2,564,727	$	(1,944,369	)	$	3,629,454
Customer banking deposits	$	—	$	477,222	$	—	$	(490	)	$	476,732
Accounts payable and accrued expenses	1,206		6,679		108,970		—			116,855
Accrued salaries, wages and payroll taxes	—		2,293		31,154		—			33,447
Accrued income taxes and reserves for uncertain tax positions	—		49,240		196,301		—			245,541
Current portion of long-term debt	—		—		799		—			799
Deferred revenue and other current liabilities	—		169,900		146,980		—			316,880
Total current liabilities	1,206		705,334		484,204		(490		)	1,190,254
Long-term debt	—		494,727		7,233		—			501,960
Deferred tax liabilities and reserves for uncertain tax positions	—		26,737		140,817		(29,951		)	137,603
Deferred revenue and other noncurrent liabilities	—		1,660		128,550		—			130,210
Amounts due to affiliates	1,402		21		544,813		(546,236		)	—
Total liabilities	2,608		1,228,479		1,305,617		(576,677		)	1,960,027
Stockholders' equity	1,669,427		108,582		1,259,110		(1,367,692		)	1,669,427
Total liabilities and stockholders' equity	$	1,672,035	$	1,337,061	$	2,564,727	$	(1,944,369	)	$	3,629,454

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2016	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	9,025	$	887,776	$	—		$	896,801
Cash & cash equivalents - restricted	—		29,004		75,106		—			104,110
Receivables, net	—		71,882		81,234		—			153,116
Prepaid expenses and other current assets	—		6,925		58,516		—			65,441
Investments in AFS securities	—		—		1,133		—			1,133
Total current assets	—		116,836		1,103,765		—			1,220,601
Mortgage loans held for investment, net	—		202,385		—		—			202,385
Property and equipment, net	—		136		293,429		—			293,565
Intangible assets, net	—		—		433,885		—			433,885
Goodwill	—		—		470,757		—			470,757
Deferred tax assets and income taxes receivable	5,917		77,270		36,936		—			120,123
Investments in subsidiaries	1,738,643		—		108,995		(1,847,638		)	—
Amounts due from affiliates	—		1,307,612		1,714,009		(3,021,621		)	—
Other noncurrent assets	—		62,806		43,103		—			105,909
Total assets	$	1,744,560	$	1,767,045	$	4,204,879	$	(4,869,259	)	$	2,847,225
Accounts payable and accrued expenses	$	1,531	$	18,596	$	239,459	$	—		$	259,586
Accrued salaries, wages and payroll taxes	—		1,766		160,020		—			161,786
Accrued income taxes and reserves for uncertain tax positions	—		52,976		320,778		—			373,754
Current portion of long-term debt	—		—		826		—			826
Deferred revenue and other current liabilities	—		87,982		155,671		—			243,653
Total current liabilities	1,531		161,320		876,754		—			1,039,605
Long-term debt	—		1,484,766		6,609		—			1,491,375
Deferred tax liabilities and reserves for uncertain tax positions	5,917		10,786		116,257		—			132,960
Deferred revenue and other noncurrent liabilities	—		1,178		159,004		—			160,182
Amounts due to affiliates	1,714,009		—		1,307,612		(3,021,621		)	—
Total liabilities	1,721,457		1,658,050		2,466,236		(3,021,621		)	2,824,122
Stockholders' equity	23,103		108,995		1,738,643		(1,847,638		)	23,103
Total liabilities and stockholders' equity	$	1,744,560	$	1,767,045	$	4,204,879	$	(4,869,259	)	$	2,847,225

Schedule of Condensed Consolidating Statement of Cash Flows [Text Block]

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Three months ended July 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities:	$	—		$	(57,939	)	$	(417,736	)	$	—		$	(475,675	)
Cash flows from investing:
Sales, maturities of and payments received on AFS securities	—			58			—			—			58
Principal payments on mortgage loans held for investment, net	—			8,427			—			—			8,427
Capital expenditures	—			(5		)	(6,241		)	—			(6,246		)
Payments made for business acquisitions, net of cash acquired	—			—			(1,635		)	—			(1,635		)
Loans made to franchisees	—			(2,202		)	(17		)	—			(2,219		)
Repayments from franchisees	—			6,305			168			—			6,473
Intercompany borrowings (payments)	—			40,217			(92,187		)	51,970			—
Other, net	—			16			204			—			220
Net cash provided by (used in) investing activities	—			52,816			(99,708		)	51,970			5,078
Cash flows from financing:
Dividends paid	(48,514		)	—			—			—			(48,514		)
Repurchase of common stock, including shares surrendered	(45,312		)	—			—			—			(45,312		)
Proceeds from exercise of stock options	1,639			—			—			—			1,639
Intercompany borrowings (payments)	92,187			—			(40,217		)	(51,970		)	—
Other, net	—			—			(24,779		)	—			(24,779		)
Net cash provided by (used in) financing activities	—			—			(64,996		)	(51,970		)	(116,966		)
Effects of exchange rates on cash	—			—			(2,367		)	—			(2,367		)
Net decrease in cash and cash equivalents	—			(5,123		)	(584,807		)	—			(589,930		)
Cash and cash equivalents at beginning of the period	—			9,025			887,776			—			896,801
Cash and cash equivalents at end of the period	$	—		$	3,902		$	302,969		$	—		$	306,871

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Three months ended July 31, 2015	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	27,342		$	(405,588	)	$	—		$	(378,246	)
Cash flows from investing:
Sales, maturities of and payments received on AFS securities	—			28,339			3,764			—			32,103
Principal payments on mortgage loans held for investment, net	—			8,537			—			—			8,537
Capital expenditures	—			(19		)	(8,670		)	—			(8,689		)
Payments made for business acquisitions, net of cash acquired	—			—			(12,271		)	—			(12,271		)
Loans made to franchisees	—			(2,582		)	—			—			(2,582		)
Repayments from franchisees	—			11,288			146			—			11,434
Intercompany borrowings (payments)	—			2,226			(59,804		)	57,578			—
Other, net	—			1,439			2,123			—			3,562
Net cash provided by (used in) investing activities	—			49,228			(74,712		)	57,578			32,094
Cash flows from financing:
Customer banking deposits, net	—			(268,482		)	—			(50		)	(268,532		)
Dividends paid	(55,063		)	—			—			—			(55,063		)
Repurchase of common stock, including shares surrendered	(17,756		)	—			—			—			(17,756		)
Proceeds from exercise of stock options	13,015			—			—			—			13,015
Intercompany borrowings (payments)	59,804			—			(2,226		)	(57,578		)	—
Other, net	—			—			(22,413		)	—			(22,413		)
Net cash used in financing activities	—			(268,482		)	(24,639		)	(57,628		)	(350,749		)
Effects of exchange rates on cash	—			—			(10,907		)	—			(10,907		)
Net decrease in cash and cash equivalents	—			(191,912		)	(515,846		)	(50		)	(707,808		)
Cash and cash equivalents at beginning of the period	—			478,077			1,529,553			(440		)	2,007,190
Cash and cash equivalents at end of the period	$	—		$	286,165		$	1,013,707		$	(490	)	$	1,299,382

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Loss Per Share and Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	4,700	5,000
Net loss from continuing operations attributable to shareholders	$ (121,026)	$ (96,505)
Amounts allocated to participating securities	(124)	(102)
Net loss from continuing operations attributable to common shareholders	$ (121,150)	$ (96,607)
Basic weighted average common shares (in shares)	220,484	275,765
Potential dilutive shares (in shares)	0	0
Weighted Average Number of Shares Outstanding, Diluted	220,484	275,765
Basic (in usd per share)	$ (0.55)	$ (0.35)
Narrative Details [Abstract]
Stock Repurchased and Retired During Period, Shares	2,000
Stock Repurchased and Retired During Period, Value	$ 48,594
Accelerated Share Repurchases, Final Price Paid Per Share	$ 23.84
Shares repurchased during the period, (in shares)	200	600
Shares repurchased during the period, Value	$ 5,600	$ 17,800
Shares issued during period (in shares)	900	1,600
Nonvested units granted	1,100
Stock-based compensation	$ 5,500	$ 6,000
Unrecognized compensation costs, options	500
Unrecognized compensation costs, nonvested shares and units	48,700
Common Stock [Member]
Narrative Details [Abstract]
Stock Repurchased and Retired During Period, Value	20
Additional Paid-in Capital [Member]
Narrative Details [Abstract]
Stock Repurchased and Retired During Period, Value	1,223
Retained Earnings [Member]
Narrative Details [Abstract]
Stock Repurchased and Retired During Period, Value	$ 47,351

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Receivables (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Document Fiscal Year Focus	2017
Impaired non-accrual status term, days	60 days
Total Portfolio	$ 196,074	$ 206,208	$ 235,848
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Recorded Investment, Past Due	2,600	300	1,500
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Non-accrual status loans	21,400	21,100	17,400
Term Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, net	31,500	35,100	38,400
Revolving Lines Of Credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Receivables, net	62,800	61,200	75,700
Cash Back® receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Short-term	$ 600	$ 1,500	$ 600

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Receivables (Schedule Of Short-Term Receivables) (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	$ 159,806	$ 210,127	$ 156,965
Accounts Receivable, Gross, Noncurrent	56,514	60,407	72,427
Allowance for doubtful accounts	(56,381)	(57,011)	(53,771)
Allowance for Doubtful Accounts Receivable, Noncurrent	0	0	0
Receivables, net	103,425	153,116	103,194
Accounts Receivable, Net, Noncurrent	56,514	60,407	72,427
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	47,905	50,000	56,277
Accounts Receivable, Gross, Noncurrent	46,461	46,284	57,792
Receivables for tax preparation and related fees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	39,115	52,327	39,927
Accounts Receivable, Gross, Noncurrent	5,528	5,528	6,103
Cash Back® receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	4,515	37,663	2,777
Accounts Receivable, Gross, Noncurrent	0	0	0
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	24,857	25,092	20,321
Accounts Receivable, Gross, Noncurrent	111	869	598
Allowance for doubtful accounts	(9,458)	(9,007)
Royalties from franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	6,885	9,997	4,509
Accounts Receivable, Gross, Noncurrent	0	0	0
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	36,529	35,048	33,154
Accounts Receivable, Gross, Noncurrent	$ 4,414	$ 7,726	$ 7,934

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Receivables (Schedule Of Loans Receivable) (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	$ 159,806	$ 210,127	$ 156,965
Accounts Receivable, Gross, Noncurrent	56,514	60,407	72,427
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	24,857	25,092	20,321
Accounts Receivable, Gross, Noncurrent	111	869	598
Financing Receivable, Gross	24,968
Loans to franchisees
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	47,905	50,000	56,277
Accounts Receivable, Gross, Noncurrent	46,461	46,284	57,792
Cash Back® receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts Receivable, Gross, Current	4,515	37,663	2,777
Accounts Receivable, Gross, Noncurrent	$ 0	$ 0	$ 0

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Receivables (Schedule Of Receivables Based On Year Of Origination) (Details) - Emerald Advance lines of credit $ in Thousands	Jul. 31, 2016 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	$ 24,968
Year Of Origination2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	9,224
Year Of Origination2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	182
Revolving Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing Receivable, Gross	$ 15,562

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Receivables (Schedule Of Activity In The Allowance For Doubtful Accounts) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	$ 56,381	$ 53,771	$ 57,011
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		54,527
Provision	1,417	713
Charge-offs	(2,047)	(1,469)
Ending balance		53,771
Emerald Advance lines of credit
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	9,458		9,007
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		7,353
Provision	451	0
Charge-offs	0	0
Ending balance		7,353
All Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	46,923		$ 48,004
Allowance for Doubtful Accounts [Roll Forward]
Beginning balance		47,174
Provision	966	713
Charge-offs	$ (2,047)	(1,469)
Ending balance		$ 46,418

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Mortgage Loans Held For Investment And Related Assets (Narrative) (Details)	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Mortgage Loans Held For Investment And Related Assets [Abstract]
Allowance as Percent of Principal	2.70%	2.70%	3.20%

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Mortgage Loans Held For Investment And Related Assets (Schedule Of Mortgage Loan Portfolio) (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2015
Mortgage Loans Held For Investment And Related Assets [Abstract]
Adjustable-rate loans	$ 102,535	$ 108,251	$ 124,752
Adjustable-rate loans, percent of total loans	52.00%	52.00%	53.00%
Fixed-rate loans	$ 93,539	$ 97,957	$ 111,096
Fixed-rate loans, percent of Total loans	48.00%	48.00%	47.00%
Total loans	$ 196,074	$ 206,208	$ 235,848
Total loans, percent of Total loans	100.00%	100.00%	100.00%
Unamortized deferred fees and costs	$ 1,611	$ 1,695	$ 1,941
Less: Allowance for loan losses	(5,310)	(5,518)	(7,659)	$ (7,886)
Total	$ 192,375	$ 202,385	$ 230,130

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Mortgage Loans Held For Investment And Related Assets (Schedule Of Allowance For Loan Losses) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Loans and Leases Rollforward [Roll Forward]
Balance at beginning of the period	$ 5,518	$ 7,886
Provision	0	(28)
Recoveries	370	365
Charge-offs	(578)	(564)
Balance at end of the period	$ 5,310	$ 7,659

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Mortgage Loans Held For Investment And Related Assets (Schedule Of Past Due Mortgage Loans) (Details) - USD ($) $ in Thousands		Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		$ 196,074	$ 206,208	$ 235,848
Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		116,489
All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		79,585
Less than 60 Days Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		10,306
Less than 60 Days Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		8,849
Less than 60 Days Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		1,457
60 – 89 Days Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		1,094
60 – 89 Days Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		745
60 – 89 Days Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		349
90 Days Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	[1]	43,739
90 Days Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	[1]	38,503
90 Days Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio	[1]	5,236
Total Past Due
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		55,139
Total Past Due | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		48,097
Total Past Due | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		7,042
Current
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		140,935
Current | Purchased From SCC
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		68,392
Current | All Other
Mortgage Loans Held For Investment And Related Assets [Line Items]
Total Portfolio		$ 72,543

[1] We do not accrue interest on loans past due 90 days or more.

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Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization	$ 18.0	$ 16.6
Estimated amortization, 2015	26.1
Estimated amortization, 2016	76.7
Estimated amortization, 2017	66.1
Estimated amortization, 2018	51.7
Estimated amortization, 2019	$ 37.3

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Goodwill And Intangible Assets (Schedule Of Goodwill) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Goodwill [Roll Forward]
Goodwill before impairment losses, beginning balance	$ 503,054	$ 474,128
Accumulated impairment losses, beginning balance	(32,297)	(32,297)
Goodwill, beginning balance	470,757	441,831
Acquisitions	23	14,030
Disposals and foreign currency changes, net	(162)	1,467
Impairments	0	0
Goodwill before impairment losses, ending balance	503,239	486,691
Accumulated impairment losses, ending balance	(32,297)	(32,297)
Goodwill, ending balance	$ 470,942	$ 454,394

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Goodwill And Intangible Assets (Schedule Of Intangible Assets) (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	$ 766,739	$ 762,984	$ 689,915
Accumulated Amortization	(346,830)	(329,099)	(272,906)
Net	419,909	433,885	417,009
Reacquired Franchise Rights [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	319,545	319,354	294,918
Accumulated Amortization	(72,977)	(68,284)	(51,233)
Net	246,568	251,070	243,685
Customer Relationships [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	206,606	206,607	169,998
Accumulated Amortization	(110,696)	(104,072)	(83,471)
Net	95,910	102,535	86,527
Software and Software Development Costs [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	132,897	131,161	120,522
Accumulated Amortization	(99,873)	(95,768)	(84,215)
Net	33,024	35,393	36,307
Noncompete Agreements [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	31,492	31,499	30,576
Accumulated Amortization	(26,045)	(25,572)	(24,091)
Net	5,447	5,927	6,485
Franchise Rights [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	19,201	19,201	19,201
Accumulated Amortization	(9,814)	(9,494)	(8,534)
Net	9,387	9,707	10,667
Purchased Technology
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	54,700	54,700	54,700
Accumulated Amortization	(27,425)	(25,909)	(21,362)
Net	27,275	28,791	$ 33,338
Other Intangible Assets [Member]
Goodwill and Intangible Assets [Line Items]
Gross Carrying Amount	2,298	462
Accumulated Amortization	0	0
Net	$ 2,298	$ 462

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Long-Term Debt (Details)	Aug. 31, 2016 USD ($)	Jul. 31, 2016 USD ($)	Apr. 30, 2016 USD ($)	Jul. 31, 2015 USD ($)
Debt Instrument [Line Items]
Long-term debt		$ 1,492,654,000	$ 1,492,201,000	$ 502,759,000
Less: Current portion		(864,000)	(826,000)	(799,000)
Long-term debt excluding current portion		1,491,790,000	1,491,375,000	501,960,000
Maximum borrowing capacity		1,300,000,000
Subsequent Event [Member]
Debt Instrument [Line Items]
Long-term Line of Credit, Noncurrent	$ 50,000,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		2,000,000,000
Available increase in borrowing capacity		$ 500,000,000.0
Maximum quarterly debt-to-EBITDA ratio		3.50
Maximum annual debt-to-EBITDA ratio		4.50
Minimum interest coverage ratio		2.50
Swingline Loans [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 200,000,000.0
Standby Letters of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		100,000,000.0
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Long-term debt		7,229,000	7,435,000	8,031,000
Unamortized Debt Issuance Expense		(14,575,000)	(15,234,000)	(5,272,000)
Senior Notes due 2020 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt		650,000,000	650,000,000
Senior Notes due 2022 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt		500,000,000	500,000,000	$ 500,000,000
Senior Notes due 2025 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Long-term debt		$ 350,000,000	$ 350,000,000

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Fair Value Fair Value (Summary Of Carrying Amounts And Estimated Fair Values Of Company's Financial Instruments) (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash & cash equivalents	$ 306,871	$ 896,801	$ 1,299,382	$ 2,007,190
Cash and cash equivalents, Estimated Fair Value	306,871	896,801
Cash and cash equivalents - restricted, Carrying Amount	122,025	104,110	61,040
Cash and cash equivalents - restricted, Estimated Fair Value	122,025	104,110
Receivables, net	103,425	153,116	103,194
Receivables, net - short-term, Estimated Fair Value	103,425	153,116
Mortgage loans held for investment, less allowance for loan losses of $5,310, $7,659 and $5,518	192,375	202,385	230,130
Loans Receivable, Fair Value Disclosure	185,057	190,503
Investments in available-for-sale securities, Estimated Fair Value	1,123	1,133
Accounts Receivable, Net, Noncurrent	56,514	60,407	72,427
Receivables, net - long-term, Estimated Fair Value	56,514	60,407	72,427
Total Portfolio	196,074	206,208	235,848
Deposits, Estimated Fair Value	0	0	473,720
Long-term Debt	1,492,654	1,492,201
Long-term borrowings, Estimated Fair Value	1,606,364	1,566,098
Contingent consideration payments, carrying amount	8,347	8,657
Contingent consideration payments, estimated fair value	8,347	8,657
Level 1
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Cash and cash equivalents, Estimated Fair Value			1,299,382
Cash and cash equivalents - restricted, Estimated Fair Value			61,040
Receivables, net - short-term, Estimated Fair Value			103,194
Level 3
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Loans Receivable, Fair Value Disclosure			184,277
Long-term Debt			502,759
Long-term borrowings, Estimated Fair Value			552,431
Contingent consideration payments, carrying amount			10,650
Contingent consideration payments, estimated fair value			10,650
Level 2
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Investments in available-for-sale securities, Estimated Fair Value			407,426
HRB Bank [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Deposits, Carrying Amount	$ 0	$ 0	$ 477,145

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Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016
Income Tax Disclosure [Abstract]
Unrecognized Tax Benefits	$ 106,000	$ 76,500	$ 111,500
Unrecognized Tax Benefits, Period Increase (Decrease)	(5,500)	(9,800)
Effect of anticipated settlements of audit issues and expiring statutes of limitations	7,500
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	13,900
Accrued income taxes and reserves for uncertain tax positions	$ 216,390	$ 245,541	$ 373,754
Effective Income Tax Rate Reconciliation, Percent	40.50%	48.40%
Net Discreet Tax Expense (Benefit)	$ 6,800	$ (20,600)
Effective tax rate, impact of discrete tax items	3.30%	11.00%

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Interest Income And Interest Expense (Schedule Of Interest Income And Expense Of Continuing Operations) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Schedule Of Interest Income And Expense [Line Items]
Other Nonoperating Income	$ 2,968	$ 433
Interest expense on borrowings	(21,466)	(8,575)
Other income, net	(327)	(4,985)
Mortgage Loans, Net
Schedule Of Interest Income And Expense [Line Items]
Other Nonoperating Income	1,537	0
AFS Securities
Schedule Of Interest Income And Expense [Line Items]
Other Nonoperating Income	31	0
Other
Schedule Of Interest Income And Expense [Line Items]
Other Nonoperating Income	1,400	433
Borrowings
Schedule Of Interest Income And Expense [Line Items]
Interest expense on borrowings	(21)	(4,599)
Deposits
Schedule Of Interest Income And Expense [Line Items]
Interest Expense, Deposits	$ (306)	$ (386)

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Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016	Apr. 30, 2015
Commitments And Contingencies [Line Items]
Standard guarantee accrual amount	$ 5,800	$ 7,600	$ 7,000
Contingent business acquisition obligations	8,347		8,657
Lines of credit, total obligation	59,400
Remaining franchise equity lines of credit-undrawn commitment	28,100
Amounts deferred for new extended service plans issued	978	983
Deferred Revenue, Revenue Recognized	(31,650)	(31,069)
Deferred Revenue	$ 173,670	159,693	$ 204,342	$ 189,779
Level 3
Commitments And Contingencies [Line Items]
Contingent business acquisition obligations		$ 10,650

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Commitments And Contingencies (Schedule Of Deferred Revenue Related To The Peace Of Mind Program) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Movement in Deferred Revenue [Roll Forward]
Balance, beginning of the period	$ 204,342	$ 189,779
Amounts deferred for new extended service plans issued	978	983
Revenue recognized on previous deferrals	(31,650)	(31,069)
Balance, end of the period	$ 173,670	$ 159,693

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Litigation And Related Contingencies (Details) $ in Millions	35 Months Ended
	Nov. 30, 2007 securities	Jul. 31, 2016 USD ($)	Apr. 30, 2016 USD ($) loan lawsuit	Jul. 31, 2015 USD ($)
Loss Contingencies [Line Items]
Loss Contingency Accrual		$ 2.3	$ 2.3	$ 9.3
Securitization Transactions | securities	39
SCC [Member]
Loss Contingencies [Line Items]
Original Principal Amount of Loans Securitized		$ 14,000.0
SCC [Member] | Claims with Knowledge of Outstanding Principal Amount [Member]
Loss Contingencies [Line Items]
Initial principal on loans securitized			$ 4,000.0
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member]
Loss Contingencies [Line Items]
Number Of Lawsuits | lawsuit			22
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] | SCC [Member]
Loss Contingencies [Line Items]
Loans Sold To Trust, With Claims of Breach of Contract and Indemnity | loan			159

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Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations (Narrative) (Details) - USD ($) $ in Thousands	36 Months Ended	60 Months Ended	99 Months Ended
	Apr. 30, 2007	Apr. 30, 2013	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2015
Loss Contingencies [Line Items]
Percentage of fraud on originated loans	68.00%
Claims received for loans		$ 1,900,000	$ 2,600,000
Loss Contingency Accrual			2,300	$ 2,300	$ 9,300
Principal Assets of SCC			347,000
SCC [Member]
Loss Contingencies [Line Items]
Loss Contingency Accrual, Product Liability, Gross			$ 25,500	$ 65,265	$ 149,765	$ 149,765

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Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Details) - SCC [Member] - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Loss Contingency Accrual [Roll Forward]
Balance, beginning of the period	$ 65,265	$ 149,765
Provisions	235	0
Payments	(40,000)	0
Balance, end of the period	$ 25,500	$ 149,765

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Condensed Consolidating Financial Statements (Income Statement) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015
Condensed Financial Statements, Captions [Line Items]
Other Nonoperating Income	$ 2,968	$ 433
Total revenues	125,185	137,718
Cost of revenues	211,086	213,508
Selling, general and administrative	98,823	98,192
Total operating expenses	309,909	311,700
Interest expense on borrowings	(21,466)	(8,575)
Other income, net	(327)	(4,985)
Loss from continuing operations before income tax benefit	(203,549)	(187,109)
Income tax benefit	(82,523)	(90,604)
Net loss from continuing operations	(121,026)	(96,505)
Net income (loss) from discontinued operations	(2,647)	(3,154)
Net loss	(123,673)	(99,659)
Other comprehensive income (loss)	(3,571)	(9,974)
Comprehensive loss	(127,244)	(109,633)
Block Financial Issuer [Member]
Condensed Financial Statements, Captions [Line Items]
Other Nonoperating Income	3,679	495
Total revenues	15,504	24,767
Cost of revenues	8,606	11,755
Selling, general and administrative	2,480	4,376
Total operating expenses	11,086	16,131
Interest expense on borrowings	(21,314)	(8,436)
Other income, net	(2,853)	(468)
Loss from continuing operations before income tax benefit	(16,070)	227
Income tax benefit	(5,794)	3,286
Net loss from continuing operations	(10,276)	(3,059)
Net income (loss) from discontinued operations	(2,646)	(3,154)
Net loss	(12,922)	(6,213)
Other comprehensive income (loss)		(1,187)
Comprehensive loss	(12,922)	(7,400)
Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Other Nonoperating Income	4,684	554
Total revenues	109,800	113,044
Cost of revenues	202,599	201,846
Selling, general and administrative	96,343	93,816
Total operating expenses	298,942	295,662
Interest expense on borrowings	(152)	(139)
Other income, net	(14,314)	(12,255)
Loss from continuing operations before income tax benefit	(198,924)	(194,458)
Income tax benefit	(75,740)	(91,865)
Net loss from continuing operations	(123,184)	(102,593)
Net income (loss) from discontinued operations	(1)
Net loss	(123,185)	(102,593)
Other comprehensive income (loss)	(3,571)	(9,974)
Comprehensive loss	(126,756)	(112,567)
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Other Nonoperating Income		909
Interest expense on borrowings	0	0
Other income, net	(124,662)	(102,593)
Loss from continuing operations before income tax benefit	(124,662)	(101,684)
Income tax benefit	(989)	(2,025)
Net loss from continuing operations	(123,673)	(99,659)
Net income (loss) from discontinued operations	0	0
Net loss	(123,673)	(99,659)
Other comprehensive income (loss)	(3,571)	(9,974)
Comprehensive loss	(127,244)	(109,633)
Intersegment Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Other Nonoperating Income	(5,395)	(1,525)
Total revenues	(119)	(93)
Cost of revenues	(119)	(93)
Total operating expenses	(119)	(93)
Interest expense on borrowings	0	0
Other income, net	141,502	110,331
Loss from continuing operations before income tax benefit	136,107	108,806
Net loss from continuing operations	136,107	108,806
Net loss	136,107	108,806
Other comprehensive income (loss)	3,571	11,161
Comprehensive loss	$ 139,678	$ 119,967

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Condensed Consolidating Financial Statements (Balance Sheets) (Details) - USD ($) $ in Thousands	Jul. 31, 2016	Apr. 30, 2016	Jul. 31, 2015	Apr. 30, 2015
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	$ 306,871	$ 896,801	$ 1,299,382	$ 2,007,190
Cash and cash equivalents - restricted	122,025	104,110	61,040
Receivables, net	103,425	153,116	103,194
Deferred Tax Assets, Net, Current			160,390
Prepaid expenses and other current assets	74,929	65,441	80,550
Investments in available-for-sale securities	1,123	1,133	406,360
Total current assets	608,373	1,220,601	2,110,916
Mortgage loans held for investment, net	192,375	202,385	230,130
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120	284,114	293,565	297,321
Intangible assets, net	419,909	433,885	417,009
Goodwill	470,942	470,757	454,394	441,831
Deferred tax assets and income taxes receivable	90,498	120,123	11,377
Amounts due from affiliates	0	0	0
Other assets	97,331	105,909	108,307
Total assets	2,163,542	2,847,225	3,629,454
Customer banking deposits			476,732
Accounts payable and accrued expenses	157,085	259,586	116,855
Accrued salaries, wages and payroll taxes	43,516	161,786	33,447
Accrued income taxes and reserves for uncertain tax positions	216,390	373,754	245,541
Current portion of long-term debt	864	826	799
Accounts payable and accrued expenses	191,304	243,653	316,880
Total current liabilities	609,159	1,039,605	1,190,254
Long-term debt	1,491,790	1,491,375	501,960
Deferred tax liabilities and reserves for uncertain tax positions	116,709	132,960	137,603
Deferred revenue and other noncurrent liabilities	145,691	160,182	130,210
Total liabilities	2,363,349	2,824,122	1,960,027
Stockholders’ equity	(199,807)	23,103	1,669,427
Total liabilities and stockholders' equity	2,163,542	2,847,225	3,629,454
Block Financial Issuer [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	3,902	9,025	286,165	478,077
Cash and cash equivalents - restricted	29,000	29,004	11,806
Receivables, net	72,865	71,882	77,539
Deferred Tax Assets, Net, Current			78,184
Prepaid expenses and other current assets	7,114	6,925	6,374
Investments in available-for-sale securities			404,221
Total current assets	112,881	116,836	864,289
Mortgage loans held for investment, net	192,375	202,385	230,130
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120	116	136	210
Deferred tax assets and income taxes receivable	60,312	77,270	41,328
Amounts due from affiliates	1,282,286	1,307,612	131,889
Other assets	58,311	62,806	69,215
Total assets	1,706,281	1,767,045	1,337,061
Customer banking deposits			477,222
Accounts payable and accrued expenses	7,671	18,596	6,679
Accrued salaries, wages and payroll taxes	1,889	1,766	2,293
Accrued income taxes and reserves for uncertain tax positions	52,976	52,976	49,240
Accounts payable and accrued expenses	52,420	87,982	169,900
Total current liabilities	114,956	161,320	705,334
Long-term debt	1,485,426	1,484,766	494,727
Deferred tax liabilities and reserves for uncertain tax positions	8,577	10,786	26,737
Deferred revenue and other noncurrent liabilities	1,106	1,178	1,660
Amounts due to affiliates			21
Total liabilities	1,610,065	1,658,050	1,228,479
Stockholders’ equity	96,216	108,995	108,582
Total liabilities and stockholders' equity	1,706,281	1,767,045	1,337,061
Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents	302,969	887,776	1,013,707	1,529,553
Cash and cash equivalents - restricted	93,025	75,106	49,234
Receivables, net	30,560	81,234	25,654
Deferred Tax Assets, Net, Current			82,206
Prepaid expenses and other current assets	67,815	58,516	74,176
Investments in available-for-sale securities	1,123	1,133	2,139
Total current assets	495,492	1,103,765	1,247,116
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120	283,998	293,429	297,111
Intangible assets, net	419,909	433,885	417,009
Goodwill	470,942	470,757	454,394
Deferred tax assets and income taxes receivable	30,186	36,936
Investments in subsidiaries	96,216	108,995	108,582
Amounts due from affiliates	1,794,655	1,714,009	1,423
Other assets	39,020	43,103	39,092
Total assets	3,630,418	4,204,879	2,564,727
Accounts payable and accrued expenses	138,863	239,459	108,970
Accrued salaries, wages and payroll taxes	41,627	160,020	31,154
Accrued income taxes and reserves for uncertain tax positions	163,414	320,778	196,301
Current portion of long-term debt	864	826	799
Accounts payable and accrued expenses	138,884	155,671	146,980
Total current liabilities	483,652	876,754	484,204
Long-term debt	6,364	6,609	7,233
Deferred tax liabilities and reserves for uncertain tax positions	101,644	116,257	140,817
Deferred revenue and other noncurrent liabilities	144,585	159,004	128,550
Amounts due to affiliates	1,282,286	1,307,612	544,813
Total liabilities	2,018,531	2,466,236	1,305,617
Stockholders’ equity	1,611,887	1,738,643	1,259,110
Total liabilities and stockholders' equity	3,630,418	4,204,879	2,564,727
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Receivables, net			1
Total current assets			1
Deferred tax assets and income taxes receivable		5,917
Investments in subsidiaries	1,611,887	1,738,643	1,259,110
Amounts due from affiliates		0	412,924
Total assets	1,611,887	1,744,560	1,672,035
Accounts payable and accrued expenses	10,551	1,531	1,206
Total current liabilities	10,551	1,531	1,206
Deferred tax liabilities and reserves for uncertain tax positions	6,488	5,917
Amounts due to affiliates	1,794,655	1,714,009	1,402
Total liabilities	1,811,694	1,721,457	2,608
Stockholders’ equity	(199,807)	23,103	1,669,427
Total liabilities and stockholders' equity	1,611,887	1,744,560	1,672,035
Intersegment Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Cash & cash equivalents			(490)	$ (440)
Total current assets			(490)
Deferred tax assets and income taxes receivable			(29,951)
Investments in subsidiaries	(1,708,103)	(1,847,638)	(1,367,692)
Amounts due from affiliates	(3,076,941)	(3,021,621)	(546,236)
Other assets	0
Total assets	(4,785,044)	(4,869,259)	(1,944,369)
Customer banking deposits			(490)
Total current liabilities			(490)
Deferred tax liabilities and reserves for uncertain tax positions			(29,951)
Amounts due to affiliates	(3,076,941)	(3,021,621)	(546,236)
Total liabilities	(3,076,941)	(3,021,621)	(576,677)
Stockholders’ equity	(1,708,103)	(1,847,638)	(1,367,692)
Total liabilities and stockholders' equity	$ (4,785,044)	$ (4,869,259)	$ (1,944,369)

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Condensed Consolidating Financial Statements (Cash Flows) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 31, 2016	Jul. 31, 2015	Apr. 30, 2016	Apr. 30, 2015
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities:	$ (475,675)	$ (378,246)
Sales, maturities of and payments received on AFS securities	58	32,103
Principal payments on mortgage loans held for investment, net	8,427	8,537
Capital expenditures	(6,246)	(8,689)
Payments made for business acquisitions, net of cash acquired	(1,635)	(12,271)
Loans made to franchisees	(2,219)	(2,582)
Repayments from franchisees	6,473	11,434
Other, net	220	3,562
Net cash provided by (used in) investing activities	5,078	32,094
Customer banking deposits, net	0	(268,532)
Dividends paid	(48,514)	(55,063)
Repurchase of common stock, including shares surrendered	(45,312)	(17,756)
Proceeds from exercise of stock options	1,639	13,015
Other, net	(24,779)	(22,413)
Net cash used in financing activities	(116,966)	(350,749)
Effects of exchange rates on cash	(2,367)	(10,907)
Net decrease in cash and cash equivalents	(589,930)	(707,808)
Cash & cash equivalents	306,871	1,299,382	$ 896,801	$ 2,007,190
Parent Company [Member]
Condensed Financial Statements, Captions [Line Items]
Dividends paid	(48,514)	(55,063)
Repurchase of common stock, including shares surrendered	(45,312)	(17,756)
Proceeds from exercise of stock options	1,639	13,015
Intercompany borrowings	92,187	59,804
Block Financial Issuer [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities:	(57,939)	27,342
Sales, maturities of and payments received on AFS securities	58	28,339
Principal payments on mortgage loans held for investment, net	8,427	8,537
Capital expenditures	(5)	(19)
Loans made to franchisees	(2,202)	(2,582)
Repayments from franchisees	6,305	11,288
Intercompany payments/investments in subsidiaries	40,217	2,226
Other, net	16	1,439
Net cash provided by (used in) investing activities	52,816	49,228
Customer banking deposits, net		(268,482)
Net cash used in financing activities		(268,482)
Net decrease in cash and cash equivalents	(5,123)	(191,912)
Cash & cash equivalents	3,902	286,165	9,025	478,077
Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net cash used in operating activities:	(417,736)	(405,588)
Sales, maturities of and payments received on AFS securities		3,764
Capital expenditures	(6,241)	(8,670)
Payments made for business acquisitions, net of cash acquired	(1,635)	(12,271)
Loans made to franchisees	(17)
Repayments from franchisees	168	146
Intercompany payments/investments in subsidiaries	(92,187)	(59,804)
Other, net	204	2,123
Net cash provided by (used in) investing activities	(99,708)	(74,712)
Intercompany borrowings	(40,217)	(2,226)
Other, net	(24,779)	(22,413)
Net cash used in financing activities	(64,996)	(24,639)
Effects of exchange rates on cash	(2,367)	(10,907)
Net decrease in cash and cash equivalents	(584,807)	(515,846)
Cash & cash equivalents	302,969	1,013,707	$ 887,776	1,529,553
Intersegment Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Intercompany payments/investments in subsidiaries	51,970	57,578
Net cash provided by (used in) investing activities	51,970	57,578
Customer banking deposits, net		(50)
Intercompany borrowings	(51,970)	(57,578)
Net cash used in financing activities	$ (51,970)	(57,628)
Net decrease in cash and cash equivalents		(50)
Cash & cash equivalents		$ (490)		$ (440)