Condensed Consolidating Financial Statements

12 Months Ended

Apr. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Statements

Block Financial is a 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full and unconditional Guarantor of the Senior Notes, our 2018 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 INCOME STATEMENTS													(in 000s)
Year ended April 30, 2019	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	188,488		$	2,966,969		$	(60,576	)	$	3,094,881
Cost of revenues	—			78,230			1,718,014			(39,322		)	1,756,922
Selling, general and administrative	1,476			25,031			716,914			(21,254		)	722,167
Total operating expenses	1,476			103,261			2,434,928			(60,576		)	2,479,089
Other income (expense), net	408,496			38,689			57,018			(487,784		)	16,419
Interest expense on external borrowings	—			(86,904		)	(147		)	—			(87,051		)
Income from continuing operations before income taxes (benefit)	407,020			37,012			588,912			(487,784		)	545,160
Income taxes (benefit)	(15,489		)	7,847			107,546			—			99,904
Net income from continuing operations	422,509			29,165			481,366			(487,784		)	445,256
Net loss from discontinued operations	—			(22,747		)	—			—			(22,747		)
Net income	422,509			6,418			481,366			(487,784		)	422,509
Other comprehensive loss	(6,113		)	—			(6,113		)	6,113			(6,113		)
Comprehensive income	$	416,396		$	6,418		$	475,253		$	(481,671	)	$	416,396

Year ended April 30, 2018	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	192,353		$	3,028,576		$	(60,998	)	$	3,159,931
Cost of revenues	—			81,746			1,696,719			(38,736		)	1,739,729
Selling, general and administrative	—			25,691			664,723			(22,262		)	668,152
Total operating expenses	—			107,437			2,361,442			(60,998		)	2,407,881
Other income (expense), net	599,202			30,305			36,667			(660,120		)	6,054
Interest expense on external borrowings	—			(89,068		)	(304		)	—			(89,372		)
Income from continuing operations before income taxes (benefit)	599,202			26,153			703,497			(660,120		)	668,732
Income taxes (benefit)	(13,947		)	(5,203		)	60,973			—			41,823
Net income from continuing operations	613,149			31,356			642,524			(660,120		)	626,909
Net loss from discontinued operations	—			(13,755		)	(5		)	—			(13,760		)
Net income	613,149			17,601			642,519			(660,120		)	613,149
Other comprehensive income	996			—			996			(996		)	996
Comprehensive income	$	614,145		$	17,601		$	643,515		$	(661,116	)	$	614,145

Year ended April 30, 2017	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Total revenues	$	—		$	186,659		$	2,877,265		$	(27,610	)	$	3,036,314
Cost of revenues	—			71,661			1,580,425			(7,709		)	1,644,377
Selling, general and administrative	—			24,201			671,653			(19,901		)	675,953
Total operating expenses	—			95,862			2,252,078			(27,610		)	2,320,330
Other income (expense), net	399,996			25,361			9,330			(428,433		)	6,254
Interest expense on external borrowings	—			(92,263		)	(688		)	—			(92,951		)
Income from continuing operations before income taxes (benefit)	399,996			23,895			633,829			(428,433		)	629,287
Income taxes (benefit)	(8,949		)	6,472			210,847			—			208,370
Net income from continuing operations	408,945			17,423			422,982			(428,433		)	420,917
Net income(loss) from discontinued operations	—			(12,705		)	733			—			(11,972		)
Net income	408,945			4,718			423,715			(428,433		)	408,945
Other comprehensive loss	(4,066		)	—			(4,066		)	4,066			(4,066		)
Comprehensive income	$	404,879		$	4,718		$	419,649		$	(424,367	)	$	404,879

CONDENSED CONSOLIDATING BALANCE SHEETS										(in 000s)
As of April 30, 2019	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	4,109	$	1,568,041	$	—		$	1,572,150
Cash & cash equivalents - restricted	—		—		135,577		—			135,577
Receivables, net	—		35,901		103,064		—			138,965
Prepaid expenses and other current assets	2,812		1,695		142,160		—			146,667
Total current assets	2,812		41,705		1,948,842		—			1,993,359
Property and equipment, net	—		552		211,540		—			212,092
Intangible assets, net	—		—		342,493		—			342,493
Goodwill	—		—		519,937		—			519,937
Deferred tax assets and income taxes receivable	3,218		15,953		122,808		—			141,979
Investments in subsidiaries	3,378,009		—		137,733		(3,515,742		)	—
Amounts due from affiliates	—		1,562,958		2,815,617		(4,378,575		)	—
Other noncurrent assets	—		54,976		35,109		—			90,085
Total assets	$	3,384,039	$	1,676,144	$	6,134,079	$	(7,894,317	)	$	3,299,945
Accounts payable and accrued expenses	$	2,272	$	19,735	$	227,518	$	—		$	249,525
Accrued salaries, wages and payroll taxes	—		1,564		194,963		—			196,527
Accrued income taxes and reserves for uncertain tax positions	—		1,060		270,913		—			271,973
Deferred revenue and other current liabilities	—		21,144		183,832		—			204,976
Total current liabilities	2,272		43,503		877,226		—			923,001
Long-term debt	—		1,492,629		—		—			1,492,629
Deferred tax liabilities and reserves for uncertain tax positions	24,623		1,486		171,797		—			197,906
Deferred revenue and other noncurrent liabilities	—		793		144,089		—			144,882
Amounts due to affiliates	2,815,617		—		1,562,958		(4,378,575		)	—
Total liabilities	2,842,512		1,538,411		2,756,070		(4,378,575		)	2,758,418
Stockholders' equity	541,527		137,733		3,378,009		(3,515,742		)	541,527
Total liabilities and stockholders' equity	$	3,384,039	$	1,676,144	$	6,134,079	$	(7,894,317	)	$	3,299,945

As of April 30, 2018	H&R Block, Inc. (Guarantor)		Block Financial (Issuer)		Other Subsidiaries		Eliminations			Consolidated H&R Block
Cash & cash equivalents	$	—	$	4,346	$	1,540,598	$	—		$	1,544,944
Cash & cash equivalents - restricted	—		—		118,734		—			118,734
Receivables, net	—		51,562		95,212		—			146,774
Prepaid expenses and other current assets	2,801		1,954		79,307		(2,801		)	81,261
Total current assets	2,801		57,862		1,833,851		(2,801		)	1,891,713
Property and equipment, net	—		467		231,421		—			231,888
Intangible assets, net	—		—		373,981		—			373,981
Goodwill	—		—		507,871		—			507,871
Deferred tax assets and income taxes receivable	1,400		17,798		14,897		—			34,095
Investments in subsidiaries	2,801,808		—		131,315		(2,933,123		)	—
Amounts due from affiliates	—		1,541,954		2,400,938		(3,942,892		)	—
Other noncurrent assets	—		50,073		51,328		—			101,401
Total assets	$	2,806,009	$	1,668,154	$	5,545,602	$	(6,878,816	)	$	3,140,949
Accounts payable and accrued expenses	$	2,074	$	16,628	$	233,273	$	—		$	251,975
Accrued salaries, wages and payroll taxes	—		1,161		140,338		—			141,499
Accrued income taxes and reserves for uncertain tax positions	—		1,060		264,791		(2,801		)	263,050
Current portion of long-term debt	—		—		1,026		—			1,026
Deferred revenue and other current liabilities	—		22,172		163,929		—			186,101
Total current liabilities	2,074		41,021		803,357		(2,801		)	843,651
Long-term debt	—		1,490,007		4,602		—			1,494,609
Deferred tax liabilities and reserves for uncertain tax positions	9,286		4,963		215,181		—			229,430
Deferred revenue and other noncurrent liabilities	—		848		178,700		—			179,548
Amounts due to affiliates	2,400,938		—		1,541,954		(3,942,892		)	—
Total liabilities	2,412,298		1,536,839		2,743,794		(3,945,693		)	2,747,238
Stockholders' equity	393,711		131,315		2,801,808		(2,933,123		)	393,711
Total liabilities and stockholders' equity	$	2,806,009	$	1,668,154	$	5,545,602	$	(6,878,816	)	$	3,140,949

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS													(in 000s)
Year ended April 30, 2019	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by operating activities:	$	—		$	9,515		$	597,023		$	—		$	606,538
Cash flows from investing:
Capital expenditures	—			(334		)	(95,156		)	—			(95,490		)
Payments for business acquisitions, net of cash acquired	—			—			(43,637		)	—			(43,637		)
Franchise loans funded	—			(19,128		)	(794		)	—			(19,922		)
Payments received on franchise loans	—			32,213			458			—			32,671
Intercompany borrowings (payments)	—			(23,197		)	(392,841		)	416,038			—
Other, net	—			1,362			(30,115		)	—			(28,753		)
Net cash used in investing activities	—			(9,084		)	(562,085		)	416,038			(155,131		)
Cash flows from financing:
Repayments of line of credit borrowings	—			(720,000		)	—			—			(720,000		)
Proceeds from line of credit borrowings	—			720,000			—			—			720,000
Dividends paid	(205,461		)	—			—			—			(205,461		)
Repurchase of common stock, including shares surrendered	(189,912		)	—			—			—			(189,912		)
Proceeds from exercise of stock options	2,532			—			—			—			2,532
Intercompany borrowings (payments)	392,841			—			23,197			(416,038		)	—
Other, net	—			(668		)	(10,186		)	—			(10,854		)
Net cash provided by (used in) financing activities	—			(668		)	13,011			(416,038		)	(403,695		)
Effects of exchange rate changes on cash	—			—			(3,663		)	—			(3,663		)
Net increase (decrease) in cash, cash equivalents and restricted cash	—			(237		)	44,286			—			44,049
Cash, cash equivalents and restricted cash, beginning of the year	—			4,346			1,659,332			—			1,663,678
Cash, cash equivalents and restricted cash, end of the year	$	—		$	4,109		$	1,703,618		$	—		$	1,707,727

Year ended April 30, 2018	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by operating activities:	$	—		$	13,333		$	836,670		$	—		$	850,003
Cash flows from investing:
Capital expenditures	—			(506		)	(98,077		)	—			(98,583		)
Payments for business acquisitions, net of cash acquired	—			—			(42,539		)	—			(42,539		)
Franchise loans funded	—			(21,890		)	(430		)	—			(22,320		)
Payments received on franchise loans	—			39,263			705			—			39,968
Intercompany borrowings (payments)	—			(38,899		)	(181,276		)	220,175			—
Other, net	—			1,161			10,256			—			11,417
Net cash used in investing activities	—			(20,871		)	(311,361		)	220,175			(112,057		)
Cash flows from financing:
Repayments of line of credit borrowings	—			(830,000		)	—			—			(830,000		)
Proceeds from line of credit borrowings	—			830,000			—			—			830,000
Dividends paid	(200,469		)	—			—			—			(200,469		)
Repurchase of common stock, including shares surrendered	(9,147		)	—			—			—			(9,147		)
Proceeds from exercise of stock options	28,340			—			—			—			28,340
Intercompany borrowings (payments)	181,276			—			38,899			(220,175		)	—
Other, net	—			(662		)	(8,726		)	—			(9,388		)
Net cash provided by (used in) financing activities	—			(662		)	30,173			(220,175		)	(190,664		)
Effects of exchange rate changes on cash	—			—			(1,143		)	—			(1,143		)
Net increase (decrease) in cash, cash equivalents and restricted cash	—			(8,200		)	554,339			—			546,139
Cash, cash equivalents and restricted cash - beginning of the year	—			12,546			1,104,993			—			1,117,539
Cash, cash equivalents and restricted cash - end of the year	$	—		$	4,346		$	1,659,332		$	—		$	1,663,678

Year ended April 30, 2017	H&R Block, Inc. (Guarantor)			Block Financial (Issuer)			Other Subsidiaries			Eliminations			Consolidated H&R Block
Net cash provided by (used in) operating activities:	$	—		$	(66,499	)	$	618,696		$	—		$	552,197
Cash flows from investing:
Principal payments and sales of mortgage loans and real estate owned, net	—			207,174			—			—			207,174
Capital expenditures	—			(32		)	(89,223		)	—			(89,255		)
Payments for business acquisitions, net of cash acquired	—			—			(54,816		)	—			(54,816		)
Franchise loans funded	—			(34,136		)	(337		)	—			(34,473		)
Payments received on franchise loans	—			61,102			335			—			61,437
Intercompany borrowings (payments)	—			(194,782		)	(507,594		)	702,376			—
Other, net	—			1,690			7,562			—			9,252
Net cash provided by (used in) investing activities	—			41,016			(644,073		)	702,376			99,319
Cash flows from financing:
Repayments of line of credit borrowings	—			(1,700,000		)	—			—			(1,700,000		)
Proceeds from line of credit borrowings	—			1,700,000			—			—			1,700,000
Dividends paid	(187,115		)	—			—			—			(187,115		)
Repurchase of common stock, including shares surrendered	(322,850		)	—			—			—			(322,850		)
Proceeds from exercise of stock options	2,371			—			—			—			2,371
Intercompany borrowings (payments)	507,594			—			194,782			(702,376		)	—
Other, net	—			—			(22,830		)	—			(22,830		)
Net cash provided by (used in) financing activities	—			—			171,952			(702,376		)	(530,424		)
Effects of exchange rate changes on cash	—			—			(4,464		)	—			(4,464		)
Net increase (decrease) in cash, cash equivalents and restricted cash	—			(25,483		)	142,111			—			116,628
Cash, cash equivalents and restricted cash - beginning of the year	—			38,029			962,882			—			1,000,911
Cash, cash equivalents and restricted cash - end of the year	$	—		$	12,546		$	1,104,993		$	—		$	1,117,539