Condensed Consolidating Financial Statements

6 Months Ended

Oct. 31, 2017

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Statements

NOTE 11: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Block Financial LLC (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 2017 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)
Six months ended October 31, 2017	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	29,261		$	255,154		$	(5,759	)	$	278,656
Cost of revenues	—			12,964			454,913			(143		)	467,734
Selling, general and administrative	—			6,791			210,920			(5,616		)	212,095
Total operating expenses	—			19,755			665,833			(5,759		)	679,829
Other income (expense), net	(288,263		)	13,065			(13,639		)	291,068			2,231
Interest expense on external borrowings	—			(42,382		)	(160		)	—			(42,542		)
Loss from continuing operations before tax benefit	(288,263		)	(19,811		)	(424,478		)	291,068			(441,484		)
Income tax benefit	(4,130		)	(5,613		)	(155,611		)	—			(165,354		)
Net loss from continuing operations	(284,133		)	(14,198		)	(268,867		)	291,068			(276,130		)
Net loss from discontinued operations	—			(8,001		)	(2		)	—			(8,003		)
Net loss	(284,133		)	(22,199		)	(268,869		)	291,068			(284,133		)
Other comprehensive income	1,077			—			1,077			(1,077		)	1,077
Comprehensive loss	$	(283,056	)	$	(22,199	)	$	(267,792	)	$	289,991		$	(283,056	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS													(in 000s)
Six months ended October 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	26,438		$	230,223		$	(144	)	$	256,517
Cost of revenues	—			14,272			422,660			(144		)	436,788
Selling, general and administrative	—			4,212			208,263			—			212,475
Total operating expenses	—			18,484			630,923			(144		)	649,263
Other income (expense), net	(273,435		)	2,033			(22,824		)	299,040			4,814
Interest expense on external borrowings	—			(43,562		)	(524		)	—			(44,086		)
Loss from continuing operations before tax benefit	(273,435		)	(33,575		)	(424,048		)	299,040			(432,018		)
Income tax benefit	(3,542		)	(11,756		)	(152,279		)	—			(167,577		)
Net loss from continuing operations	(269,893		)	(21,819		)	(271,769		)	299,040			(264,441		)
Net loss from discontinued operations	—			(5,451		)	(1		)	—			(5,452		)
Net loss	(269,893		)	(27,270		)	(271,770		)	299,040			(269,893		)
Other comprehensive loss	(5,889		)	—			(5,889		)	5,889			(5,889		)
Comprehensive loss	$	(275,782	)	$	(27,270	)	$	(277,659	)	$	304,929		$	(275,782	)

CONDENSED CONSOLIDATING BALANCE SHEETS											(in 000s)
As of October 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—		$	1,965	$	230,545	$	—		$	232,510
Cash & cash equivalents - restricted	—			29,014		80,524		—			109,538
Receivables, net	—			73,675		31,089		—			104,764
Prepaid expenses and other current assets	—			8,237		65,318		—			73,555
Mortgage loans held for sale	—			183,107		—		—			183,107
Total current assets	—			295,998		407,476		—			703,474
Property and equipment, net	—			92		292,968		—			293,060
Intangible assets, net	—			—		433,135		—			433,135
Goodwill	—			—		477,360		—			477,360
Deferred tax assets and income taxes receivable	1,947			62,722		17,086		—			81,755
Investments in subsidiaries	1,460,925			—		81,868		(1,542,793		)	—
Amounts due from affiliates	—			1,696,151		2,005,485		(3,701,636		)	—
Other noncurrent assets	—			58,636		34,758		—			93,394
Total assets	$	1,462,872		$	2,113,599	$	3,750,136	$	(5,244,429	)	$	2,082,178
Accounts payable and accrued expenses	$	8,941		$	8,434	$	122,433	$	—		$	139,808
Accrued salaries, wages and payroll taxes	—			2,143		38,611		—			40,754
Accrued income taxes and reserves for uncertain tax positions	—			—		68,832		—			68,832
Current portion of long-term debt	—			—		903		—			903
Deferred revenue and other current liabilities	—			48,176		136,384		—			184,560
Total current liabilities	8,941			58,753		367,163		—			434,857
Long-term debt and line of credit borrowings	—			1,961,085		6,121		—			1,967,206
Reserves for uncertain tax positions	5,917			10,786		100,850		—			117,553
Deferred revenue and other noncurrent liabilities	—			1,107		118,926		—			120,033
Amounts due to affiliates	2,005,485			—		1,696,151		(3,701,636		)	—
Total liabilities	2,020,343			2,031,731		2,289,211		(3,701,636		)	2,639,649
Stockholders' equity (deficiency)	(557,471		)	81,868		1,460,925		(1,542,793		)	(557,471		)
Total liabilities and stockholders' equity	$	1,462,872		$	2,113,599	$	3,750,136	$	(5,244,429	)	$	2,082,178

CONDENSED CONSOLIDATING BALANCE SHEETS											(in 000s)
As of April 30, 2017	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—		$	4,486	$	1,006,845	$	—		$	1,011,331
Cash & cash equivalents - restricted	—			8,060		98,148		—			106,208
Receivables, net	—			61,250		101,525		—			162,775
Prepaid expenses and other current assets	—			2,280		63,445		—			65,725
Total current assets	—			76,076		1,269,963		—			1,346,039
Property and equipment, net	—			78		263,749		—			263,827
Intangible assets, net	—			—		409,364		—			409,364
Goodwill	—			—		491,207		—			491,207
Deferred tax assets and income taxes receivable	5,587			30,743		47,398		—			83,728
Investments in subsidiaries	2,158,234			—		113,714		(2,271,948		)	—
Amounts due from affiliates	—			1,493,195		2,194,294		(3,687,489		)	—
Other noncurrent assets	—			51,829		48,114		—			99,943
Total assets	$	2,163,821		$	1,651,921	$	4,837,803	$	(5,959,437	)	$	2,694,108
Accounts payable and accrued expenses	$	2,086		$	14,218	$	200,724	$	—		$	217,028
Accrued salaries, wages and payroll taxes	—			851		183,005		—			183,856
Accrued income taxes and reserves for uncertain tax positions	—			—		348,199		—			348,199
Current portion of long-term debt	—			—		981		—			981
Deferred revenue and other current liabilities	—			26,759		162,457		—			189,216
Total current liabilities	2,086			41,828		895,366		—			939,280
Long-term debt	—			1,487,389		5,628		—			1,493,017
Reserves for uncertain tax positions	28,324			8,037		122,724		—			159,085
Deferred revenue and other noncurrent liabilities	—			953		162,656		—			163,609
Amounts due to affiliates	2,194,294			—		1,493,195		(3,687,489		)	—
Total liabilities	2,224,704			1,538,207		2,679,569		(3,687,489		)	2,754,991
Stockholders' equity (deficiency)	(60,883		)	113,714		2,158,234		(2,271,948		)	(60,883		)
Total liabilities and stockholders' equity	$	2,163,821		$	1,651,921	$	4,837,803	$	(5,959,437	)	$	2,694,108

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2017	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities	$	—		$	(17,827	)	$	(630,630	)	$	—		$	(648,457	)
Cash flows from investing:
Capital expenditures	—			(10		)	(56,740		)	—			(56,750		)
Payments made for business acquisitions, net of cash acquired	—			—			(27,522		)	—			(27,522		)
Franchise loans funded	—			(10,885		)	(54		)	—			(10,939		)
Payments received on franchise loans	—			10,077			245			—			10,322
Intercompany borrowings (payments)	—			20,163			(80,141		)	59,978			—
Other, net	—			(998		)	6,472			—			5,474
Net cash provided by (used in) investing activities	—			18,347			(157,740		)	59,978			(79,415		)
Cash flows from financing:
Dividends paid	(100,082		)	—			—			—			(100,082		)
Repurchase of common stock, including shares surrendered	(7,581		)	—			—			—			(7,581		)
Proceeds from exercise of stock options	27,522			—			—			—			27,522
Intercompany borrowings (payments)	80,141			—			(20,163		)	(59,978		)	—
Other, net	—			(662		)	(26,055		)	—			(26,717		)
Net cash used in financing activities	—			(662		)	(46,218		)	(59,978		)	(106,858		)
Effects of exchange rates on cash	—			—			(1,147		)	—			(1,147		)
Net decrease in cash, cash equivalents and restricted cash	—			(142		)	(835,735		)	—			(835,877		)
Cash, cash equivalents and restricted cash, beginning of period	—			12,546			1,104,993			—			1,117,539
Cash, cash equivalents and restricted cash, end of period	$	—		$	12,404		$	269,258		$	—		$	281,662

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Six months ended October 31, 2016	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash used in operating activities	$	—		$	(77,906	)	$	(642,470	)	$	—		$	(720,376	)
Cash flows from investing:
Principal payments on mortgage loans and sale of real estate owned, net	—			19,009			—			—			19,009
Capital expenditures	—			(5		)	(44,913		)	—			(44,918		)
Payments made for business acquisitions, net of cash acquired	—			—			(36,151		)	—			(36,151		)
Franchise loans funded	—			(10,064		)	(107		)	—			(10,171		)
Payments received on franchise loans	—			14,052			211			—			14,263
Intercompany borrowings (payments)	—			(426,824		)	(309,852		)	736,676			—
Other, net	—			(312		)	2,489			—			2,177
Net cash used in investing activities	—			(404,144		)	(388,323		)	736,676			(55,791		)
Cash flows from financing:
Repayments of line of credit borrowings	—			(50,000		)	—			—			(50,000		)
Proceeds from line of credit borrowings	—			525,000			—			—			525,000
Dividends paid	(95,971		)	—			—			—			(95,971		)
Repurchase of common stock, including shares surrendered	(215,511		)	—			—			—			(215,511		)
Proceeds from exercise of stock options	1,630			—			—			—			1,630
Intercompany borrowings (payments)	309,852			—			426,824			(736,676		)	—
Other, net	—			—			(43,734		)	—			(43,734		)
Net cash provided by financing activities	—			475,000			383,090			(736,676		)	121,414
Effects of exchange rates on cash	—			—			(4,110		)	—			(4,110		)
Net decrease in cash, cash equivalents and restricted cash	—			(7,050		)	(651,813		)	—			(658,863		)
Cash, cash equivalents and restricted cash, beginning of period	—			38,029			962,882			—			1,000,911
Cash, cash equivalents and restricted cash, end of period	$	—		$	30,979		$	311,069		$	—		$	342,048