H&R Block (HRB) 10-Q 4 Sep 09 2010 Q1 Quarterly report Financial data

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	Jul. 31, 2009	Apr. 30, 2009
Assets
Cash and cash equivalents	$1,006,303	$1,654,663
Cash and cash equivalents - restricted	46,639	51,656
Receivables, less allowance for doubtful accounts of $129,433 and $128,541	379,177	512,814
Prepaid expenses and other current assets	396,027	351,947
Total current assets	1,828,146	2,571,080
Mortgage loans held for investment, less allowance for loan losses of $91,691 and $84,073	707,712	744,899
Property and equipment, at cost, less accumulated depreciation and amortization of $643,978 and $625,075	359,408	368,289
Intangible assets, net	379,622	385,998
Goodwill	852,018	850,230
Other assets	418,856	439,226
Total assets	4,545,762	5,359,722
Liabilities
Customer banking deposits	712,008	854,888
Accounts payable, accrued expenses and other current liabilities	648,470	705,945
Accrued salaries, wages and payroll taxes	101,410	259,698
Accrued income taxes	330,145	543,967
Current portion of long-term debt	6,093	8,782
Federal Home Loan Bank borrowings	25,000	25,000
Total current liabilities	1,823,126	2,398,280
Long-term debt	1,032,395	1,032,122
Federal Home Loan Bank borrowings	75,000	75,000
Other noncurrent liabilities	424,527	448,461
Total liabilities	3,355,048	3,953,863
Stockholders' equity
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 444,176,510	4,442	4,442
Additional paid in capital	824,212	836,477
Accumulated other comprehensive income (loss)	(2,849)	(11,639)
Retained earnings	2,437,017	2,671,437
Less treasury shares, at cost	(2,072,108)	(2,094,858)
Total stockholders' equity	1,190,714	1,405,859
Total liabilities and stockholders' equity	$4,545,762	$5,359,722

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified	Jul. 31, 2009	Apr. 30, 2009
Condensed Consolidated Balance Sheets (Parenthetical)
Allowance for doubtful accounts	$129,433	$128,541
Allowance for loan losses	91,691	84,073
Accumulated depreciation and amortization	$643,978	$625,075
Common stock, par value per share	0.01	0.01
Common stock, shares authorized	800,000,000	800,000,000
Common stock, shares issued	444,176,510	444,176,510

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (USD $)
In Thousands	3 Months Ended Jul. 31, 2009	3 Months Ended Jul. 31, 2008
Revenues:
Service revenues	$247,985	$240,720
Interest income	12,287	17,847
Product and other revenues	15,233	13,342
Total revenue	275,505	271,909
Operating expenses:
Cost of revenues	386,450	360,138
Selling, general and administrative expenses	103,217	123,386
Total operating expenses	489,667	483,524
Operating loss	(214,162)	(211,615)
Other income (expense), net	3,289	(1,355)
Loss from continuing operations before tax benefit	(210,873)	(212,970)
Income tax benefit	(80,256)	(84,547)
Net loss from continuing operations	(130,617)	(128,423)
Net loss from discontinued operations	(3,017)	(4,296)
Net loss	(133,634)	(132,719)
Basic and diluted loss per share:
Net loss from continuing operations	-0.39	-0.39
Net loss from discontinued operations	-0.01	-0.02
Net loss	-0.4	-0.41
Basic and diluted shares	334,533	327,141
Dividends paid per share	0.15	0.14
Comprehensive income (loss):
Net loss	(133,634)	(132,719)
Change in unrealized gain on available-for-sale securities, net	(747)	(1,967)
Change in foreign currency translation adjustments	9,537	314
Comprehensive loss	($124,844)	($134,372)

2_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	3 Months Ended Jul. 31, 2009	3 Months Ended Jul. 31, 2008
Net cash used in operating activities	($454,577)	($364,923)
Cash flows from investing activities:
Principal repayments on mortgage loans held for investment, net	19,264	31,619
Purchases of property and equipment, net	(8,760)	(14,648)
Other, net	4,856	(901)
Net cash provided by investing activities	15,360	16,070
Cash flows from financing activities:
Repayments of Federal Home Loan Bank borrowings	0	(40,000)
Proceeds from Federal Home Loan Bank borrowings	0	15,000
Customer banking deposits, net	(143,199)	(8,795)
Dividends paid	(50,287)	(46,790)
Acquisition of treasury shares	(3,483)	(4,116)
Proceeds from issuance of common stock, net	6,651	28,507
Other, net	(25,888)	(14,387)
Net cash used in financing activities	(216,206)	(70,581)
Effects of exchange rates on cash	7,063	0
Net decrease in cash and cash equivalents	(648,360)	(419,434)
Cash and cash equivalents at beginning of the period	1,654,663	664,897
Cash and cash equivalents at the end of the period	1,006,303	245,463
Supplementary cash flow data:
Income taxes paid	155,804	83,111
Interest paid on borrowings	26,168	27,258
Interest paid on deposits	1,318	4,048
Transfers of loans to foreclosed assets	$3,797	$53,469

Summary of Significant Accounti

Summary of Significant Accounting Policies
	3 Months Ended Jul. 31, 2009 USD / shares
Summary of Significant Accounting Policies (Abstract)
Significant Accounting Policies [Text Block]	1. Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated balance sheet as of July 31, 2009, the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended July 31, 2009 and 2008, and the condensed consolidated statements of cash flows for the three months ended July 31, 2009 and 2008 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 at July 31, 2009 and for all periods presented have been made. HR Block, the Company, we, our and us are used interchangeably to refer to HR Block, Inc. or to HR Block, Inc. and its subsidiaries, as appropriate to the context. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. In addition, we realigned our segments as discussed in note 12, and accordingly restated segment disclosures in prior periods. These changes had no effect on our results of operations or stockholders equity as previously reported. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our April 30, 2009 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2009 or for the year then ended, are derived from our April 30, 2009 Annual Report to Shareholders on Form 10-K. We have evaluated subsequent events through September4, 2009, the date of issuance of our condensed consolidated financial statements. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 determination of our allowance for loan losses, potential losses from loan repurchase and indemnity obligations associated with our discontinued mortgage business, contingent losses associated with pending litigation, fair value of reporting units, reserves for uncertain tax positions and related matters. We revise our estimates when facts and circumstances dictate. However, future events and their effects cannot be determined with absolute certainty. As such, actual results could differ materially from those estimates. Seasonality of Business Our operating revenues are seasonal in nature with peak revenues 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. Concentrations of Risk Our mortg

Recent Events

Recent Events
	3 Months Ended Jul. 31, 2009 USD / shares
Recent Events [Abstract]
Recent Events [Text Block]	1. Recent Events RSM McGladrey, Inc. (RSM) and McGladrey Pullen LLP (MP), an independent registered public accounting firm, collaborate to provide accounting, tax and consulting services to clients under an alternative practice structure. RSM and MP also share in certain common overhead costs through an administrative services agreement. These services are provided by, and coordinated through, RSM, for which RSM receives a management fee. On July 21, 2009, MP provided 210 days notice of its intent to terminate the administrative services agreement. The effect of the notice will be to terminate the alternative practice structure on February 16, 2010, unless revoked or modified prior to that time. RSM and MP are engaged in arbitration to determine several of their rights and responsibilities under their contractual obligations to each other. An arbitration hearing is scheduled for November 2009. RSM and MP are also engaged in negotiations to determine if there are mutually agreeable changes to the current arrangements that would allow our collaboration to continue. There are no assurances as to the outcome.

Earnings

Earnings (Loss) Per Share and Stockholders' Equity
	5/1/2009 - 7/31/2009 USD / shares
Earnings (Loss) Per Share and Stockholders' Equity [Abstract]
Earnings (Loss) Per Share and Stockholders' Equity	1. Earnings (Loss) Per Share and Stockholders Equity Basic and diluted loss per share is computed using the two-class method per FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities (FSP 03-6-1). See note 13 for additional information. 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 19.4 million shares and 25.7 million shares for the three months ended July 31, 2009 and 2008, respectively, as the effect would be antidilutive due to the net loss from continuing operations during each period. The computations of basic and diluted loss per share from continuing operations are as follows: (in 000s, except per share amounts) Three months ended July 31, 2009 2008 Net loss from continuing operations attributable to shareholders $ (130,617) $ (128,423) Income allocated to participating securities (nonvested shares) (367) (199) Net loss from continuing operations attributable to common shareholders $ (130,984) $ (128,622) Basic weighted average common shares 334,533 327,141 Potential dilutive shares from stock options and nonvested shares - - Convertible preferred stock - - Dilutive weighted average common shares 334,533 327,141 Earnings (loss) per share from continuing operations: Basic $ (0.39) $ (0.39) Diluted (0.39) (0.39) The weighted average shares outstanding for the three months ended July 31, 2009 increased to 334.5 million from 327.1 million for the three months ended July 31, 2008, primarily due to the issuance of shares of our common stock in October 2008. During the three months ended July 31, 2009 and 2008, we issued 1.4 million and 2.3 million shares of common stock, respectively, due to the exercise of stock options, employee stock purchases and vesting of nonvested shares. During the three months ended July 31, 2009, we acquired 0.2 million shares of our common stock at an aggregate cost of $3.5 million, and during the three months ended July 31, 2008, we acquired 0.2 million shares at an aggregate cost of $4.1 million. Shares acquired during these periods represented shares swapped or surrendered to us in connection with the vesting of nonvested shares and the exercise of stock options. At July 31, 2009, we had accrued but unpaid dividends totaling $50.5 million. This amount is included in accounts payable, accrued expenses and other current liabilities on t

Mortgage Loans Held for Investm

Mortgage Loans Held for Investment and Related Assets
	3 Months Ended Jul. 31, 2009 USD / shares
Mortgage Loans Held for Investment and Related Assets [Abstract]
Mortgage Loans Held for Investment and Related Assets [Text Block]	1. Mortgage Loans Held for Investment and Related Assets The composition of our mortgage loan portfolio as of July 31, 2009 and April 30, 2009 is as follows: (dollars in 000s) July 31, 2009 April 30, 2009 Amount % of Total Amount % of Total Adjustable-rate loans $ 501,112 63% $ 534,943 65% Fixed-rate loans 292,014 37% 286,894 35% 793,126 100% 821,837 100% Unamortized deferred fees and costs 6,277 7,135 Less: Allowance for loan losses (91,691) (84,073) $ 707,712 $ 744,899 Activity in the allowance for loan losses for the three months ended July 31, 2009 and 2008 is as follows: (in 000s) Three months ended July 31, 2009 2008 Balance, beginning of the period $ 84,073 $ 45,401 Provision 13,600 14,991 Recoveries 28 - Charge-offs (6,010) (13,539) Balance, end of the period $ 91,691 $ 46,853 Our loan loss reserve as a percent of mortgage loans was 11.56% at July 31, 2009, compared to 10.23% at April 30, 2009. In cases where we modify a loan and in so doing grant a concession to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring (TDR). TDR loans totaled $161.6 million and $160.7 million at July 31, 2009 and April 30, 2009, respectively. The principal balance of impaired loans as of July 31, 2009 and April 30, 2009 is as follows: (in 000s) July 31, 2009 April 30, 2009 60 - 89 days $ 14,519 $ 21,415 90+ days, non-accrual 148,603 121,685 TDR loans, accrual 90,275 60,044 TDR loans, non-accrual 71,295 100,697 $ 324,692 $ 303,841 Activity related to our real estate owned is as follows: (in 000s) Three months ended July 31, 2009 2008 Balance, beginning of the period $ 44,533 $ 350 Additions 3,797 53,469 Sales (4,348) - Writedowns (1,241) (5,409) Balance, end of the period $ 42,741 $ 48,410

Goodwill and Intangible Assets

Goodwill and Intangible Assets
	3 Months Ended Jul. 31, 2009 USD / shares
Goodwill and Intangible Assets [Abstract]
Goodwill and Intangible Assets [Text Block]	5. Goodwill and Intangible Assets Changes in the carrying amount of goodwill for the three months ended July 31, 2009 consist of the following: (in 000s) April 30, 2009 Additions Impairment Other July 31, 2009 Tax Services $ 447,591 $ 1,004 $ - $ 1,483 $ 450,078 Business Services 402,639 - - (699) 401,940 Total $ 850,230 $ 1,004 $ - $ 784 $ 852,018 We test goodwill for impairment annually at the beginning of our fourth quarter, or more frequently if events occur which could, more likely than not, reduce the fair value of a reporting units net assets below its carrying value. We considered the July 21, 2009 notice by MP of its intent to terminate the administrative services agreementwith RSM to represent a significant change in circumstances requiring an interim evaluation of the fair value of our RSM reporting unit. Goodwill of this reporting unit totaled $372.7 million at July 31, 2009. The net carrying value of other intangible assets of RSM totaled $96.0 million at July 31, 2009, including $50.8 million for an indefinite-lived trade name asset. We have concluded that, as of July 31, 2009, the fair value of this reporting unit exceeds its carrying value and also that the net carrying value of other intangible assets is recoverable. Our conclusion is based on our current assumptions, including, but not limited to, those listed below. We have assumed that our noncompete rights are enforceable. We have assumed that, more likely than not, RSM and MP will continue to collaborate; or, in the event of a separation, RSM will successfully establish an alliance with other attest firms. We have assumed that ongoing negotiations between RSM and MP will not result in modifications of their relationship that would be materially adverse to the financial interests of RSM. In the event of a separation, we have made various assumptions concerning client retention and post-separation operating margins. In the event of a separation, we have assumed MP would be able to repay its indebtedness to RSM. It is difficult to predict the outcome of the above matters, including the outcome of mitigating factors that we are currently pursuing. However, it is possible that changes in our assumptions, based on future events or circumstances, could result in changes in our fair value estimates and corresponding impairment charges. Intangible assets consist of the following: (in 000s) July 31, 2009 April 30, 2009 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net Tax Services: Customer relationships $ 54,907 $ (26,938) $ 27,969 $ 54,655 $ (25,267) $ 29,388 Noncompete agreements 23,271 (21,272) 1,999 23,263 (20,941) 2,322 Reacquired franchise rights229,438 (2,942) 226,496 229,438 (1,838) 227,600 Franchise agreements 19,201 (853) 18,348 19,201 (533) 18,668 Purchased technology 12,500 (4,730) 7,770 12,500 (4,240) 8,260 Trade name 1,325 (250) 1,075 1,025 (217) 808 Business Services: Customer relationships146,011 (113,408) 32,603

Income Taxes

Income Taxes
	3 Months Ended Jul. 31, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes [Text Block]	1. Income Taxes We file a consolidated federal income tax return in the United States and file tax returns in various state and foreign jurisdictions. Consolidated tax returns for the years 1999 through 2007 are currently under examination by the Internal Revenue Service (IRS). Tax years prior to 1999 are closed by statute. Historically, tax returns in various foreign and state jurisdictions are examined and settled upon completion of the exam. During the three months ended July 31, 2009, we accrued an additional $1.2 million of interest and penalties related to our uncertain tax positions. We had unrecognized tax benefits of $126.0 million and $124.6 million at July 31, 2009 and April 30, 2009, respectively. The unrecognized tax benefits increased $1.4 million in the current year, due primarily to positions related to prior years. We have classified the liability for unrecognized tax benefits, including corresponding accrued interest, as long-term at July 31, 2009, which is included in other noncurrent liabilities on the condensed consolidated balance sheet. Amounts that we expect to pay, or for which statutes expire, within the next twelve months have been included in accounts payable, accrued expenses and other current liabilities on the condensed consolidated balance sheet. Based upon the expiration of statutes of limitations, payments of tax and other factors in several jurisdictions, we believe it is reasonably possible that the total amount of previously unrecognized tax benefits may decrease by approximately $18 million within twelve months of July 31, 2009.

Interest Income and Expense

Interest Income and Expense
	3 Months Ended Jul. 31, 2009 USD / shares
Interest Income and Expense [Abstract]
Interest Income and Expense [Text Block]	1. Interest Income and Expense The following table shows the components of interest income and expense of our continuing operations: (in 000s) Three months ended July 31, 2009 2008 Interest income: Mortgage loans, net $ 7,896 $ 13,265 Other 4,391 4,582 $ 12,287 $ 17,847 Interest expense: Borrowings $ 18,957 $ 18,172 Deposits 2,049 4,043 FHLB advances 509 1,328 $ 21,515 $ 23,543

Fair Value

Fair Value
	3 Months Ended Jul. 31, 2009 USD / shares
Fair Value [Abstract]
Fair Value [Text Block]	1. Fair Value The following table presents for each hierarchy level the financial assets that are measured at fair value on both a recurring and non-recurring basis at July 31, 2009: (dollars in 000s) Total Level 1 Level 2 Level 3 Recurring: Available-for-sale securities $ 42,430 $ - $ 42,430 $ - Non-recurring: Impaired mortgage loans held for investment 248,529 - -248,529 $ 290,959 $ - $ 42,430 $ 248,529 As a percentage of total assets 6.4% - % 0.9% 5.5% There were no significant changes to the unobservable inputs used in determining the fair values of our level 2 and level 3 financial assets. The carrying amounts and estimated fair values of our financial instruments at July 31, 2009 are as follows: (in 000s) Carrying Estimated Amount Fair Value Mortgage loans held for investment $ 707,712 $ 549,497 IRAs and other time deposits479,758 479,375 Long-term debt 1,038,488 1,064,855

Regulatory Requirements

Regulatory Requirements
	3 Months Ended Jul. 31, 2009 USD / shares
Regulatory Requirements [Abstract]
Regulatory Requirements [Text Block]	1. Regulatory Requirements HR Block Bank (HRB Bank) files its regulatory Thrift Financial Report (TFR) on a calendar quarter basis with the Office of Thrift Supervision (OTS). The following table sets forth HRB Banks regulatory capital requirements at June 30, 2009, as calculated in the most recently filed TFR: (dollars in 000s) To Be Well Capitalized For Capital Adequacy Under Prompt Corrective Actual Purposes Action Provisions Amount Ratio Amount Ratio Amount Ratio Total risk-based capital ratio (1) $142,490 21.9% $ 52,020 8.0% $ 65,025 10.0% Tier 1 risk-based capital ratio (2) $ 133,811 20.6% N/A N/A $ 39,015 6.0% Tier 1 capital ratio (leverage) (3) $ 133,811 13.6% $ 118,381 12.0% $ 49,325 5.0% Tangible equity ratio (4) $ 133,811 13.6% $ 14,798 1.5% n/a n/a (1) Total risk-based capital divided by risk-weighted assets. (2) Tier 1 (core) capital less deduction for low-level recourse and residual interest divided by risk-weighted assets. (3) Tier 1 (core) capital divided by adjusted total assets. (4) Tangible capital divided by tangible assets. As of July 31, 2009, HRB Banks leverage ratio was 13.8%.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Jul. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies [Text Block]	1. Commitments and Contingencies Changes in deferred revenue balances related to our Peace of Mind (POM) program, the current portion of which is included in accounts payable, accrued expenses and other current liabilities and the long-term portion of which is included in other noncurrent liabilities in the condensed consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2009 2008 Balance, beginning of period $ 146,807 $ 140,583 Amounts deferred for new guarantees issued 583 513 Revenue recognized on previous deferrals (27,913) (27,241) Balance, end of period $ 119,477 $ 113,855 The following table summarizes certain of our other contractual obligations and commitments: (in 000s) As of July 31, 2009 April 30, 2009 Franchise Equity Lines of Credit undrawn commitment $ 35,976 $ 38,055 Contingent business acquisition obligations24,504 24,165 Media advertising purchase obligation 45,768 45,768 We routinely enter into contracts that include embedded indemnifications that have characteristics similar to guarantees. Guarantees and indemnifications of the Company and its subsidiaries include obligations to protect counterparties from losses arising from the following: (1) tax, legal and other risks related to the purchase or disposition of businesses; (2) penalties and interest assessed by federal and state taxing authorities in connection with tax returns prepared for clients; (3) indemnification of our directors and officers; and (4) third-party claims relating to various arrangements in the normal course of business. Typically, there is no stated maximum payment related to these indemnifications, and the terms of the indemnities may vary and in many cases are limited only by the applicable statute of limitations. The likelihood of any claims being asserted against us and the ultimate liability related to any such claims, if any, is difficult to predict. While we cannot provide assurance we will ultimately prevail in the event any such claims are asserted, we believe the fair value of guarantees and indemnifications relating to our continuing operations is not material as of July 31, 2009. Discontinued Operations Sand Canyon Corporation (SCC), formerly Option One Mortgage Corporation, maintains recourse with respect to loans previously sold or securitized under indemnification of loss provisions relating to breach of representations and warranties made to purchasers or insurers. At July 31, 2009 and April 30, 2009, our loan repurchase liability totaled $202.4 million and $206.6 million, respectively. This liability is included in accounts payable, accrued expenses and other current liabilities on our consolidated balance sheets.

Litigation and Related Continge

Litigation and Related Contingencies
	3 Months Ended Jul. 31, 2009 USD / shares
Litigation and Related Contingencies [Abstract]
Litigation and Related Contingencies [Text Block]	11. Litigation and Related Contingencies We are party to investigations, legal claims and lawsuits arising out of our business operations. We accrue our best estimate of the probable loss upon resolution of such matters. Amounts accrued, including obligations under indemnifications, totaled $25.3 million and $27.9 million at July 31, 2009 and April 30, 2009, respectively. RAL Litigation We have been named as a defendant in numerous lawsuits throughout the country regarding our refund anticipation loan programs (collectively, RAL Cases). The RAL Cases have involved a variety of legal theories asserted by plaintiffs. These theories include allegations that, among other things: disclosures in the RAL applications were inadequate, misleading and untimely; the RAL interest rates were usurious and unconscionable; we did not disclose that we would receive part of the finance charges paid by the customer for such loans; untrue, misleading or deceptive statements in marketing RALs; breach of state laws on credit service organizations; breach of contract, unjust enrichment, unfair and deceptive acts or practices; violations of the federal Racketeer Influenced and Corrupt Organizations Act; violations of the federal Fair Debt Collection Practices Act and unfair competition regarding debt collection activities; and that we owe, and breached, a fiduciary duty to our customers in connection with the RAL program. The amounts claimed in the RAL Cases have been very substantial in some instances, with one settlement resulting in a pretax expense of $43.5 million in fiscal year 2003 (the Texas RAL Settlement) and other settlements resulting in a combined pretax expense in fiscal year 2006 of $70.2 million. We have settled all but one of the RAL Cases. The sole remaining RAL Case is a putative class action entitled Sandra J. Basile, et al. v. HR Block, Inc., et al., April Term 1992 Civil Action No. 3246 in the Court of Common Pleas, First Judicial District Court of Pennsylvania, Philadelphia County, instituted on April 23, 1993. In Basile, the court decertified the class in December 2003, and the Pennsylvania appellate court subsequently reversed the trial courts decertification decision. In September 2006, the Pennsylvania Supreme Court reversed the appellate courts reversal of the trial courts decertification decision. In June 2007, the appellate court affirmed its earlier decision to reverse the trial courts decertification decision. In June 2009, the Pennsylvania Supreme Court again reversed the appellate courts reversal of the trial courts decertification decision and remanded the case to the appellate court for additional review. We believe we have meritorious defenses to this case and we intend to defend it vigorously. There can be no assurances, however, as to the outcome of this case or its impact on our financial statements. Peace of Mind Litigation We are defendants in lawsuits regarding our Peace of Mind program (collectively, the POM Cases), under which our applicable tax return preparation subsidiary assumes liability for additional tax assessments attributable to tax return preparation error. The POM Cases

Segment Information

Segment Information
	3 Months Ended Jul. 31, 2009 USD / shares
Segment Information [Abstract]
Segment Information [Text Block]	1. Segment Information Results of our continuing operations by reportable operating segment are as follows: (in 000s) Three months ended July 31, 2009 2008 Revenues: Tax Services $ 87,963 $ 81,700 Business Services 177,618 174,651 Corporate 9,924 15,558 $ 275,505 $ 271,909 Pretax income (loss): Tax Services $ (171,974) $ (163,657) Business Services 1,321 (295) Corporate (40,220) (49,018) Loss from continuing operations before tax benefit $ (210,873) $ (212,970) Effective May 1, 2009, we realigned certain segments of our business to reflect a new management reporting structure. The operations of HRB Bank, which was previously reported as the Consumer Financial Services segment, have now been reclassified, with activities that support our retail tax network included in the Tax Services segment, and the net interest margin and gains and losses relating to our portfolio of mortgage loans held for investment and related assets included in corporate. Presentation of prior period results reflects the new segment reporting structure. These segment changes also resulted in the shifting of assets between segments. Identifiable assets by reportable segment at July 31, 2009 were as follows: (in 000s) Tax Services $ 1,794,754 Business Services 829,772 Corporate 1,921,236 $ 4,545,762

Accounting Pronouncements

Accounting Pronouncements
	3 Months Ended Jul. 31, 2009 USD / shares
Accounting Pronouncements [Abstract]
Accounting Pronouncements [Text Block]	1. Accounting Pronouncements In June 2009, Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167) was issued. SFAS 167 changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting, or similar rights, should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entitys purpose and design and the reporting entitys ability to direct the activities of the other entity that most significantly impact the other entitys economic performance. SFAS 167 will require a reporting entity to provide additional disclosures about its involvement with variable interest entities and any significant changes in risk exposure due to that involvement. SFAS 167 will be effective for our fiscal year 2011. We are currently evaluating the effect of this statement on our consolidated financial statements. In June 2009, Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets (SFAS 166), was issued. SFAS 166 is a revision to FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and will require more disclosure about transfers of financial assets, including securitization transactions, and where entities have continuing exposure to the risks related to transferred financial assets. It eliminates the concept of a qualifying special purpose entity, changes the requirements for derecognizing financial assets. SFAS 166 will be effective at the start of our fiscal year 2011. We are currently evaluating the effect of this statement on its consolidated financial statements. In May 2009, Statement of Financial Accounting Standards No. 165, Subsequent Events (SFAS 165) was issued. SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for fiscal years and interim periods ending after June15, 2009 and is applied prospectively. We adopted the new disclosure requirements in the condensed consolidated financial statements effective July31, 2009. See note 1 for the related disclosure. In December 2007, Statement of Financial Accounting Standards No. 141(R), Business Combinations, (SFAS 141R), and Statement of Financial Accounting Standards No. 160, Non-Controlling Interests in Consolidated Financial Statements An Amendment of ARB No. 51 (SFAS 160) were issued. These standards require an acquiring entity to recognize all the assets acquired and liabilities assumed in a transaction, including non-controlling interests, at the acquisition-date fair value with limited exceptions. SFAS 141R will require acquisition-related expenses to be expensed and will generally require contingent consideration to be recorded as a liability at the time of acquisition. Under SFAS 141R, subsequent changes to deferred tax valuation allowances relating to acquired businesses and acquired liabilities for unc

Condensed Consolidating Financi

Condensed Consolidating Financial Statements
	3 Months Ended Jul. 31, 2009 USD / shares
Condensed Consolidating Financial Statements [Abstract]
Condensed Consolidating Financial Statements [Text Block]	1. Condensed Consolidating Financial Statements Block Financial LLC (BFC) is an indirect, wholly-owned consolidated subsidiary of the Company. BFC is the Issuer and the Company is the Guarantor of the Senior Notes issued on January 11, 2008 and October 26, 2004, our unsecured committed lines of credit (CLOCs) 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 Companys 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) Three months ended HR Block, Inc. BFC Other Consolidated July 31, 2009 (Guarantor) (Issuer) Subsidiaries Elims HR Block Total revenues $ - $ 23,196 $ 252,365 $ (56) $ 275,505 Cost of revenues - 45,560 340,890 - 386,450 Selling, general and administrative - 2,498 100,775 (56) 103,217 Total expenses - 48,058 441,665 (56) 489,667 Operating income (loss) - (24,862) (189,300) - (214,162) Other income (expense), net (210,873) (1,233) 4,522 210,873 3,289 Income (loss) from continuing operations before taxes (benefit) (210,873) (26,095) (184,778) 210,873 (210,873) Income taxes (benefit) (80,256) (10,692) (69,564) 80,256 (80,256) Net income (loss) from continuing operations (130,617) (15,403) (115,214) 130,617 (130,617) Net loss from discontinued operations (3,017) (3,017) - 3,017 (3,017) Net income (loss) $ (133,634) $ (18,420) $ (115,214) $ 133,634 $ (133,634) Three months ended HR Block, Inc. BFC Other Consolidated July 31, 2008 (Guarantor) (Issuer) Subsidiaries Elims HR Block Total revenues $ - $ 20,775 $ 252,572 $ (1,438) $ 271,909 Cost of revenues - 39,362 320,772 4 360,138 Selling, general and administrative - 19,396 104,083 (93) 123,386 Total expenses - 58,758 424,855 (89) 483,524 Operating loss - (37,983) (172,283) (1,349) (211,615) Other income, net (212,970) (4,350) 2,995 212,970 (1,355) Loss from continuing operations before tax benefit (212,970) (42,333) (169,288) 211,621 (212,970) Income tax benefit (84,547) (16,438) (67,535) 83,973 (84,547) Net loss from continuing operations (128,423) (25,895) (101,753) 127,648 (128,423) Net loss from discontinued operations (4,296) (5,071) - 5,071 (4,296) Net loss $ (132,719) $ (30,966) $ (101,753) $ 132,719 $ (132,719) Condensed Consolidating Balance Sheets (in 000s) HR Block, Inc. BFC Other Consolidated July 31, 2009 (Guarantor) (Issuer) Subsidiaries Elims HR Block Cash cash equivalents $ - $ 122,895 $ 883,968 $ (560) $ 1,006,303 Cash cash equivalents restricted - 355 46,284 - 46,639 Receivables, net 1,110 109,803 268,264 - 379,177 Mortgage loans held for investment - 707,712 - - 707,712 Intangible assets and goodwill, net - -1,231,640 - 1,231,6

Document Information

Document Information
	3 Months Ended Jul. 31, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-07-31

Entity Information

Entity Information (USD $)
	3 Months Ended Jul. 31, 2009	Aug. 31, 2009	Apr. 30, 2009
Entity Information [Line Items]
Entity Registrant Name	H&R Block, Inc.
Entity Central Index Key	0000012659
Current Fiscal Year End Date	--04-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$6,539,980,861
Entity Common Stock, Shares Outstanding		335,306,120