Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jul. 31, 2015 | Aug. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | H&R BLOCK INC | |
Entity Central Index Key | 12,659 | |
Current Fiscal Year End Date | --04-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 276,359,906 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
REVENUES: | ||
Service revenues | $ 118,434 | $ 115,473 |
Royalty, product and other revenues | 10,906 | 8,814 |
Interest income | 8,378 | 9,299 |
Total revenues | 137,718 | 133,586 |
Cost of revenues: | ||
Compensation and benefits | 55,789 | 51,855 |
Occupancy and equipment | 89,855 | 83,306 |
Provision for bad debt and loan losses | 2,005 | 4,364 |
Depreciation and amortization | 27,084 | 25,085 |
Other | 38,775 | 33,116 |
Cost of revenues | 213,508 | 197,726 |
Selling, general and administrative: | ||
Marketing and advertising | 8,531 | 8,145 |
Compensation and benefits | 54,669 | 60,964 |
Depreciation and amortization | 13,010 | 8,601 |
Other selling, general and administrative | 21,982 | 19,490 |
Selling, general and administrative | 98,192 | 97,200 |
Total operating expenses | 311,700 | 294,926 |
Other income | (4,985) | (1,204) |
Other Nonoperating Income | 433 | 523 |
Interest expense on borrowings | (8,575) | (13,795) |
Loss from continuing operations before income tax benefit | (187,109) | (175,816) |
Income tax benefit | (90,604) | (66,965) |
Net loss from continuing operations | (96,505) | (108,851) |
Net loss from discontinued operations, net of tax benefits of $1,889 and $4,564 | (3,154) | (7,381) |
NET LOSS | $ (99,659) | $ (116,232) |
BASIC AND DILUTED LOSS PER SHARE: | ||
Continuing operations (in usd per share) | $ (0.35) | $ (0.40) |
Discontinued operations (in usd per share) | (0.01) | (0.02) |
Consolidated (in usd per share) | (0.36) | (0.42) |
DIVIDENDS PAID PER SHARE (in usd per share) | $ 0.20 | $ 0.20 |
COMPREHENSIVE LOSS: | ||
NET LOSS | $ (99,659) | $ (116,232) |
Unrealized gains (losses) on securities, net of taxes: | ||
Unrealized holding losses arising during the period | (1,360) | (723) |
Reclassification adjustment for gains included in income | 141 | 574 |
Change in foreign currency translation adjustments | (8,755) | 455 |
Other comprehensive income (loss) | (9,974) | 306 |
Comprehensive loss | $ (109,633) | $ (115,926) |
Consolidated Statements Of Ope3
Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Income Statement [Abstract] | ||
Tax benefit on discontinued operations | $ (1,889) | $ (4,564) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
ASSETS | |||
Cash and cash equivalents | $ 1,299,382 | $ 2,007,190 | $ 1,429,489 |
Cash and cash equivalents - restricted | 61,040 | 91,972 | 71,917 |
Receivables, less allowance for doubtful accounts of $53,771, $51,400 and $54,527 | 103,194 | 167,964 | 122,315 |
Deferred tax assets and income taxes receivable | 160,390 | 174,267 | 190,323 |
Prepaid expenses and other current assets | 80,993 | 70,283 | 74,343 |
Investments in available-for-sale securities | 406,360 | 439,625 | 403,774 |
Total current assets | 2,111,359 | 2,951,301 | 2,292,161 |
Mortgage loans held for investment, less allowance for loan losses of $7,659, $10,561 and $7,886 | 230,130 | 239,338 | 259,732 |
Property and equipment, at cost less accumulated depreciation and amortization of $538,823, $468,372 and $518,797 | 297,321 | 311,387 | 314,531 |
Intangible assets, net | 417,009 | 432,142 | 347,890 |
Goodwill | 454,394 | 441,831 | 478,845 |
Deferred tax assets and income taxes receivable | 11,377 | 13,461 | 46,953 |
Other noncurrent assets | 111,101 | 125,960 | 150,707 |
Total assets | 3,632,691 | 4,515,420 | 3,890,819 |
LIABILITIES: | |||
Customer banking deposits | 476,732 | 744,241 | 482,975 |
Accounts payable and accrued expenses | 116,855 | 231,322 | 127,912 |
Accounts payable and accrued expenses | 316,880 | 322,508 | 357,293 |
Accrued salaries, wages and payroll taxes | 33,447 | 144,744 | 30,996 |
Accrued income taxes | 245,541 | 434,684 | 284,038 |
Current portion of long-term debt | 799 | 790 | 400,705 |
Total current liabilities | 1,190,254 | 1,878,289 | 1,683,919 |
Long-term debt | 505,197 | 505,298 | 505,714 |
Deferred tax liabilities and reserves for uncertain tax positions | 137,603 | 142,586 | 167,914 |
Deferred revenue and other noncurrent liabilities | 130,210 | 156,298 | 136,072 |
Total liabilities | $ 1,963,264 | $ 2,682,471 | $ 2,493,619 |
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' EQUITY: | |||
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 316,628,110 | $ 3,166 | $ 3,166 | $ 3,166 |
Additional paid-in capital | 773,783 | 783,793 | 766,014 |
Accumulated other comprehensive income (loss) | (8,234) | 1,740 | 5,483 |
Retained earnings | 1,679,234 | 1,836,442 | 1,418,124 |
Less treasury shares, at cost | (778,522) | (792,192) | (795,587) |
Total stockholders' equity | 1,669,427 | 1,832,949 | 1,397,200 |
Total liabilities and stockholders' equity | $ 3,632,691 | $ 4,515,420 | $ 3,890,819 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 53,771 | $ 54,527 | $ 51,400 |
Allowance for loan losses | 7,659 | 7,886 | 10,561 |
Accumulated depreciation and amortization | $ 538,823 | $ 518,797 | $ 468,372 |
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 | 316,628,110 | 316,628,110 | 316,628,110 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Statement of Cash Flows [Abstract] | ||
NET CASH USED IN OPERATING ACTIVITIES | $ (378,246) | $ (381,585) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Maturities of and payments received on available-for-sale securities | 32,103 | 18,484 |
Principal payments on mortgage loans held for investment, net | 8,537 | 6,250 |
Purchases of property and equipment | (8,689) | (25,841) |
Payments made for business acquisitions, net of cash acquired | (12,271) | (40,533) |
Franchise loans: | ||
Loans funded | (2,582) | (7,398) |
Payments received | 11,434 | 18,674 |
Other, net | 3,562 | 4,030 |
Net cash provided by (used in) investing activities | 32,094 | (26,334) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Customer banking deposits, net | (268,532) | (287,609) |
Dividends paid | (55,063) | (54,852) |
Payments for repurchase of common stock, including shares surrendered | 17,756 | 9,397 |
Proceeds from exercise of stock options | 13,015 | 13,368 |
Other, net | (22,413) | (9,919) |
Net cash used in financing activities | (350,749) | (348,409) |
Effects of exchange rates on cash | (10,907) | 510 |
Net decrease in cash and cash equivalents | (707,808) | (755,818) |
Cash and cash equivalents at beginning of the period | 2,007,190 | 2,185,307 |
Cash and cash equivalents at end of the period | 1,299,382 | 1,429,489 |
SUPPLEMENTARY CASH FLOW DATA: | ||
Income taxes paid, net of refunds received | 75,358 | 88,924 |
Interest paid on borrowings | 15,381 | 15,415 |
Interest paid on deposits | 136 | 201 |
Transfers of foreclosed loans to other assets | 624 | 1,818 |
Accrued additions to property and equipment | $ 5,977 | $ 11,988 |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2015 | |
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, 2015 and 2014 , the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2015 and 2014 , and the condensed consolidated statements of cash flows for the three months ended July 31, 2015 and 2014 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, 2015 and 2014 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, 2015 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2015 or for the year then ended are derived from our April 30, 2015 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 12 and 13 for additional information on litigation, claims and other loss contingencies related to our discontinued operations. |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events | 3 Months Ended |
Jul. 31, 2015 | |
H&R Block Bank [Abstract] | |
Subsequent Events | NOTE 2: SUBSEQUENT EVENTS DIVESTITURE OF H&R BLOCK BANK – In April 2014, our subsidiaries, H&R Block Bank (HRB Bank) and Block Financial LLC, the sole shareholder of HRB Bank (Block Financial), entered into a definitive Purchase and Assumption Agreement with BofI Federal Bank, a federal savings bank (BofI), pursuant to which we agreed to sell certain assets and liabilities, including all of the deposit liabilities of HRB Bank, to BofI (P&A Transaction). On August 4, 2015, HRB Bank, Block Financial and BofI received regulatory approvals for the P&A Transaction. On August 5, 2015, HRB Bank, Block Financial and BofI entered into an Amended and Restated Purchase and Assumption Agreement. On August 31, 2015, we completed the P&A Transaction and made a one-time cash payment to BofI of approximately $419 million , which is approximately equal to the carrying value of the liabilities (including all deposit liabilities) assumed by BofI. In connection with the closing, we intend to liquidate the available-for-sale (AFS) securities previously held by HRB Bank, which totaled $404 million at July 31, 2015 . On the closing date of the P&A Transaction, HRB Bank converted from a federal savings bank to a national banking association, merged with and into its parent company, Block Financial, surrendered its bank charter and ceased to exist as a bank. As a result, as of August 31, 2015, neither we nor any of our subsidiaries is subject to minimum regulatory capital requirements or to regulation by the Office of the Comptroller of the Currency (OCC). In addition, H&R Block, Inc., H&R Block Group, Inc. and Block Financial (collectively, our Holding Companies) were Savings and Loan Holding Companies (SLHCs) because they controlled HRB Bank. As a result of the P&A Transaction and related actions, our Holding Companies have ceased to be SLHCs and have deregistered as SLHCs under Section 10(b) of the Home Owner's Loan Act. As of August 31, 2015, our Holding Companies are no longer subject to regulatory capital requirements applicable to SLHCs or regulation by the Board of Governors of the Federal Reserve System (Federal Reserve). Additional information about the closing of the P&A Transaction and the agreements executed at the closing are set forth in Part 1, Item 2 under "Recent Developments." CAPITAL STRUCTURE – On September 1, 2015, we announced our intent to establish a new capital structure, which includes a new $3.5 billion share repurchase program approved by our Board of Directors, a new unsecured committed line of credit (CLOC) and incremental debt. As a part of this new capital structure, we also announced our intent to take near-term action on the planned capital structure changes, including: ▪ Our plans to launch a "modified Dutch auction" tender offer to purchase up to $1.5 billion of our common stock under our new share repurchase program, at a price per share of not less than $32.25 and not greater than $37.00 , which will be contingent upon, among other customary items, the successful closing of a new CLOC, and satisfaction of other customary conditions; ▪ Our intent to replace our existing five-year $1.5 billion CLOC (2012 CLOC) with the new CLOC; and ▪ Our intent to incur additional incremental debt through other debt issuances as a part of the capital structure changes, which will fund stock repurchases under our new share repurchase program, together with available cash, borrowings under the new CLOC and funds from ongoing business operations. On September 2, 2015, we commenced the tender offer described above to purchase up to $1.5 billion of our common stock, at a price per share of not less than $32.25 and not greater than $37.00 . Additional information about our new capital structure, including our new share repurchase program and related tender offer, is set forth in Part 1, Item 2 under "Recent Developments." |
Loss Per Share and Stockholders
Loss Per Share and Stockholders' Equity | 3 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Loss Per Share and Stockholders' Equity | NOTE 3: 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 5.0 million shares for the three months ended July 31, 2015 , and 5.5 million shares for the three months ended July 31, 2014 , 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, 2015 2014 Net loss from continuing operations attributable to shareholders $ (96,505 ) $ (108,851 ) Amounts allocated to participating securities (102 ) (89 ) Net loss from continuing operations attributable to common shareholders $ (96,607 ) $ (108,940 ) Basic weighted average common shares 275,765 274,575 Potential dilutive shares — — Dilutive weighted average common shares 275,765 274,575 Loss per share from continuing operations attributable to common shareholders: Basic $ (0.35 ) $ (0.40 ) Diluted (0.35 ) (0.40 ) STOCK-BASED COMPENSATION – During the three months ended July 31, 2015 , we acquired 0.6 million shares of our common stock at an aggregate cost of $17.8 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, 2014 , we acquired 0.3 million shares at an aggregate cost of $9.4 million for similar purposes. During the three months ended July 31, 2015 and 2014 , we issued 1.6 million and 1.1 million shares of common stock, respectively, due to the vesting or exercise of stock-based awards. During the three months ended July 31, 2015 , we granted equity awards equivalent to 0.9 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. Stock-based compensation expense of our continuing operations totaled $6.0 million for the three months ended July 31, 2015 , and $7.5 million for the three months ended July 31, 2014 . As of July 31, 2015 , unrecognized compensation cost for stock options totaled $0.1 million , and for nonvested shares and units totaled $50.2 million . OTHER COMPREHENSIVE INCOME – Components of other comprehensive income include foreign currency translation adjustments and the change in net unrealized gains or losses on AFS marketable securities, and are as follows: (in 000s) Foreign Currency Translation Adjustments Unrealized Gain (Loss) on AFS Securities Total Balances as of May 1, 2015 $ (6,789 ) $ 8,529 $ 1,740 Other comprehensive income (loss) before reclassifications: Gross losses arising during the period (8,755 ) (2,235 ) (10,990 ) Income taxes — (875 ) (875 ) (8,755 ) (1,360 ) (10,115 ) Amounts reclassified to net income: Gross amount reclassified — 230 230 Income taxes — 89 89 — 141 141 Net other comprehensive loss (8,755 ) (1,219 ) (9,974 ) Balances as of July 31, 2015 $ (15,544 ) $ 7,310 $ (8,234 ) Balances as of May 1, 2014 $ 3,334 $ 1,843 $ 5,177 Other comprehensive income (loss) before reclassifications: Gross gains (losses) arising during the period 455 (1,183 ) (728 ) Income taxes — (460 ) (460 ) 455 (723 ) (268 ) Amounts reclassified to net income: Gross amount reclassified — 941 941 Income taxes — 367 367 — 574 574 Net other comprehensive income (loss) 455 (149 ) 306 Balances as of July 31, 2014 $ 3,789 $ 1,694 $ 5,483 Gross gains and losses reclassified out of accumulated other comprehensive income are included in other income and other expense, respectively, in the consolidated statements of operations and comprehensive loss. |
Receivables
Receivables | 3 Months Ended |
Jul. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract] | |
Receivables | NOTE 4: RECEIVABLES Receivables consist of the following: (in 000s) As of July 31, 2015 July 31, 2014 April 30, 2015 Short-term Long-term Short-term Long-term Short-term Long-term Loans to franchisees $ 56,277 $ 57,792 $ 62,195 $ 83,013 $ 56,603 $ 64,472 Receivables for tax preparation and related fees 39,927 6,103 38,204 — 48,864 6,103 Cash Back® receivables 2,777 — 4,170 — 42,680 — Emerald Advance lines of credit 20,321 598 20,239 2,839 21,908 1,913 Royalties from franchisees 4,509 — 4,278 — 8,206 — Other 33,154 7,934 44,629 15,294 44,230 8,379 156,965 72,427 173,715 101,146 222,491 80,867 Allowance for doubtful accounts (53,771 ) — (51,400 ) — (54,527 ) — $ 103,194 $ 72,427 $ 122,315 $ 101,146 $ 167,964 $ 80,867 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, 2015 and 2014 and April 30, 2015 , consisted of $75.7 million , $99.7 million and $80.8 million , respectively, in term loans made primarily to finance the purchase of franchises and $38.4 million , $45.5 million and $40.3 million , respectively, in revolving lines of credit primarily for the purpose of funding off-season working capital needs. As of July 31, 2015 and 2014 and April 30, 2015 , loans with a principal balance of $1.5 million , $0.8 million and $0.1 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, 2015 and 2014 and April 30, 2015 , $0.6 million , $1.1 million and $1.3 million of Cash Back balances were more than 60 days old, respectively. H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT – We review the credit quality of our H&R Block Emerald Advance® lines of credit (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, 2015 , by year of origination, are as follows: (in 000s) Credit Quality Indicator – Year of origination: 2015 $ 5,348 2014 92 2013 1,699 Revolving loans 13,780 $ 20,919 As of July 31, 2015 and 2014 and April 30, 2015 , $17.4 million , $20.0 million and $18.7 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 short-term receivables for the three months ended July 31, 2015 and 2014 is as follows: (in 000s) EAs All Other Total 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 Balances as of May 1, 2014 $ 7,530 $ 45,048 $ 52,578 Provision — 2,842 2,842 Charge-offs — (4,020 ) (4,020 ) Balances as of July 31, 2014 $ 7,530 $ 43,870 $ 51,400 |
Mortgage Loans Held For Investm
Mortgage Loans Held For Investment And Related Assets | 3 Months Ended |
Jul. 31, 2015 | |
Mortgage Loans Held For Investment And Related Assets [Abstract] | |
Mortgage Loans Held For Investment And Related Assets | NOTE 5: MORTGAGE LOANS HELD FOR INVESTMENT The composition of our mortgage loan portfolio is as follows: (dollars in 000s) As of July 31, 2015 July 31, 2014 April 30, 2015 Amount % of Total Amount % of Total Amount % of Total Adjustable-rate loans $ 124,752 53 % $ 144,096 54 % $ 130,182 53 % Fixed-rate loans 111,096 47 % 123,991 46 % 115,034 47 % 235,848 100 % 268,087 100 % 245,216 100 % Unamortized deferred fees and costs 1,941 2,206 2,008 Less: Allowance for loan losses (7,659 ) (10,561 ) (7,886 ) $ 230,130 $ 259,732 $ 239,338 Our loan loss allowance as a percent of mortgage loans was 3.2% as of July 31, 2015 , compared to 3.9% as of July 31, 2014 and 3.2% as of April 30, 2015 . Activity in the allowance for loan losses for the three months ended July 31, 2015 and 2014 is as follows: (in 000s) Three months ended July 31, 2015 2014 Balance at beginning of the period $ 7,886 $ 11,272 Provision (28 ) 725 Recoveries 365 679 Charge-offs (564 ) (2,115 ) Balance at end of the period $ 7,659 $ 10,561 Detail of the aging of the mortgage loans in our portfolio as of July 31, 2015 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 $ 8,525 $ 985 $ 45,957 $ 55,467 $ 83,894 $ 139,361 All other 2,790 488 6,346 9,624 86,863 96,487 $ 11,315 $ 1,473 $ 52,303 $ 65,091 $ 170,757 $ 235,848 (1) We do not accrue interest on loans past due 90 days or more. |
Investments
Investments | 3 Months Ended |
Jul. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | NOTE 6: INVESTMENTS The amortized cost and fair value of securities classified as AFS are summarized below: (in 000s) Amortized Gross Gross Fair Value As of July 31, 2015: Mortgage-backed securities $ 392,285 $ 11,936 $ — $ 404,221 Municipal bonds 3,025 80 — 3,105 U.S. treasury bills 100 — — 100 $ 395,410 $ 12,016 $ — $ 407,426 As of July 31, 2014: Mortgage-backed securities $ 401,092 $ 2,582 $ — $ 403,674 Municipal bonds 4,106 183 — 4,289 U.S. treasury bills 100 — — 100 $ 405,298 $ 2,765 $ — $ 408,063 As of April 30, 2015: Mortgage-backed securities $ 421,035 $ 13,889 $ — $ 434,924 Municipal bonds 4,062 109 (24 ) 4,147 Common stock 2,491 47 — 2,538 U.S. treasury bills 100 — — 100 $ 427,688 $ 14,045 $ (24 ) $ 441,709 Substantially all AFS debt securities held as of July 31, 2015 mature after five years. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 3 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Intangible Assets | NOTE 7: GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill of our Tax Services segment for the three months ended July 31, 2015 and 2014 are as follows: (in 000s) Goodwill Accumulated Impairment Losses Net 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 Balances as of April 30, 2014 $ 468,414 $ (32,297 ) $ 436,117 Acquisitions 42,274 — 42,274 Disposals and foreign currency changes, net 454 — 454 Impairments — — — Balances as of July 31, 2014 $ 511,142 $ (32,297 ) $ 478,845 The increase in goodwill resulted from acquired franchisee and competitor businesses during the period. We expect the purchase price allocation to be finalized during 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 of our Tax Services segment are as follows: (in 000s) Gross Carrying Amount Accumulated Amortization Net 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 July 31, 2014: Reacquired franchise rights $ 233,749 $ (29,152 ) $ 204,597 Customer relationships 123,130 (62,514 ) 60,616 Internally-developed software 104,580 (75,243 ) 29,337 Noncompete agreements 24,697 (22,408 ) 2,289 Franchise agreements 19,201 (7,254 ) 11,947 Purchased technology 54,974 (15,870 ) 39,104 $ 560,331 $ (212,441 ) $ 347,890 As of April 30, 2015: Reacquired franchise rights $ 294,647 $ (46,180 ) $ 248,467 Customer relationships 170,851 (78,157 ) 92,694 Internally-developed software 118,865 (80,689 ) 38,176 Noncompete agreements 30,630 (23,666 ) 6,964 Franchise agreements 19,201 (8,214 ) 10,987 Purchased technology 54,700 (19,846 ) 34,854 $ 688,894 $ (256,752 ) $ 432,142 Amortization of intangible assets for the three months ended July 31, 2015 was $16.6 million . Amortization of intangible assets for the three months ended July 31, 2014 was $11.2 million . Estimated amortization of intangible assets for fiscal years 2016 , 2017 , 2018 , 2019 and 2020 is $64.1 million , $55.7 million , $48.6 million , $36.9 million and $26.2 million , respectively. |
Fair Value
Fair Value | 3 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value | NOTE 8: FAIR VALUE FAIR VALUE MEASUREMENT – Assets measured on a recurring basis are initially measured at fair value and are required to be remeasured at fair value in the financial statements at each reporting date. Our investments in AFS securities are carried at fair value on a recurring basis with gains and losses reported as a component of other comprehensive income, except for losses assessed to be other than temporary. Our AFS securities include certain agency and agency-sponsored mortgage-backed securities and municipal bonds. Quoted market prices are not available for these securities, as they are not actively traded and have fewer observable transactions. As a result, we use third-party pricing services to determine fair value and classify the securities as Level 2. The third-party pricing services' models are based on market data and utilize available trade, bid and other market information for similar securities. Quarterly, we compare the prices obtained from our third-party pricing services to other available independent pricing information to validate the reasonableness of the valuations provided. In addition, we also 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 services. There were no transfers of AFS securities between hierarchy levels during the three months ended July 31, 2015 and 2014 . See note 6 for details of our AFS securities that were remeasured at fair value on a recurring basis during the three months ended July 31, 2015 and 2014 and the unrealized gains or losses on those remeasurements. The following table presents the assets that were remeasured at fair value on a non-recurring basis during the three months ended July 31, 2015 and 2014 and the losses on those remeasurements: (dollars in 000s) Total Level 1 Level 2 Level 3 Losses As of July 31, 2015: Impaired mortgage loans held for investment $ 57,951 $ — $ — $ 57,951 $ (88 ) As a percentage of total assets 1.6 % — % — % 1.6 % As of July 31, 2014: Impaired mortgage loans held for investment $ 59,635 $ — $ — $ 59,635 $ (842 ) As a percentage of total assets 1.5 % — % — % 1.5 % The fair value of impaired mortgage loans held for investment is generally based on the net present value of discounted cash flows for TDR loans or the appraised value of the underlying collateral for all other loans. Impaired and TDR loans are required to be remeasured at least annually, based on HRB Bank's loan policy. These loans are classified as Level 3. We have established various controls and procedures to ensure that the unobservable inputs used in the fair value measurement of these instruments are appropriate. Appraisals are obtained from certified appraisers and reviewed internally by HRB Bank's asset management group. The inputs and assumptions used in our discounted cash flow model for TDRs are reviewed and approved by HRB Bank management each time the balances are remeasured. Significant changes in fair value from the previous measurement are presented to HRB Bank management for approval. There were no changes to the unobservable inputs used in determining the fair values of our Level 3 financial assets. The following table presents the quantitative information about our Level 3 fair value measurements, which utilize significant unobservable internally-developed inputs: (in 000s) Fair Value as of July 31, 2015 Valuation Technique Unobservable Input Range (Weighted Average) Impaired mortgage loans held for investment – non TDRs $ 68,368 Collateral- based Cost to list/sell Time to sell (months) Collateral depreciation Loss severity 0% – 171%(10%) 12 (12) (128%) – 100%(32%) 0% – 100%(61%) Impaired mortgage loans held for investment – TDRs $ 29,925 Discounted cash flow Aged default performance Loss severity 23% – 36%(29%) 0% – 23%(7%) 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, 2015 July 31, 2014 April 30, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Cash and cash equivalents $ 1,299,382 $ 1,299,382 $ 1,429,489 $ 1,429,489 $ 2,007,190 $ 2,007,190 Cash and cash equivalents - restricted 61,040 61,040 71,917 71,917 91,972 91,972 Receivables, net - short-term 103,194 103,194 122,315 122,315 167,964 167,964 Mortgage loans held for investment, net 230,130 184,277 259,732 193,920 239,338 190,196 Investments in AFS securities 407,426 407,426 408,063 408,063 441,709 441,709 Receivables, net - long-term 72,427 72,427 101,146 101,146 80,867 80,867 Liabilities: Customer banking deposits 477,145 473,720 483,477 480,729 744,699 737,261 Long-term debt 505,996 552,431 906,419 965,650 506,088 556,769 Contingent consideration payments 10,650 10,650 9,168 9,168 10,667 10,667 Fair value estimates, methods and assumptions are set forth below. The 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 AFS securities - For mortgage-backed securities, we use a third-party pricing service to determine fair value. The service's pricing model is based on market data and utilizes available trade, bid and other market information for similar securities (Level 2). The fair value of our investment in common stock is 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, is equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits is estimated by discounting the future cash flows using the rates currently 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 payments - Fair value approximates the carrying amount (Level 3). |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 9: 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 return under examination; however, our calendar 2013 federal return and federal returns for all periods after this date remain open to examination. Additionally, the Company is either currently under examination or open to examination in all U.S. states that impose a corporate income tax. We had gross unrecognized tax benefits of $76.5 million , $128.1 million and $86.3 million as of July 31, 2015 and 2014 and April 30, 2015 , respectively. The gross unrecognized tax benefits decreased $9.8 million and increased $16.6 million during the three months ended July 31, 2015 and 2014 , respectively. The decrease in unrecognized tax benefits during the three months ending July 31, 2015 is primarily related to a law change enacted in the state of Missouri which allowed the Company to release prior year income tax reserves. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $15 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 $8.7 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 deferred tax liabilities and reserves for uncertain tax positions on the consolidated balance sheet. Consistent with prior years, our pretax loss for the three months ended July 31, 2015 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 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 $20.6 million was recorded in the three months ended July 31, 2015 , compared to a discrete tax benefit of less than $100 thousand in the same period of the prior year. The discrete tax benefit recorded in the current period resulted primarily from a law change enacted in the state of Missouri which provides us the ability to reduce tax expense related to income from our two prior fiscal years that will be included on timely filed state tax returns for calendar years 2014 and 2015. Excluding discrete items, management's estimate of the annualized effective tax rate for the three months ended July 31, 2015 and 2014 was 37.4% and 38.1% , respectively. Our effective tax rate for continuing operations, including the effects of discrete income tax items was 48.4% and 38.1% for the three months ended July 31, 2015 and 2014 , 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 the 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. |
Interest Income And Interest Ex
Interest Income And Interest Expense | 3 Months Ended |
Jul. 31, 2015 | |
Interest Income And Interest Expense [Abstract] | |
Interest Income And Interest Expense | NOTE 10: INTEREST INCOME AND INTEREST EXPENSE The following table shows the components of interest income and expense: (in 000s) Three months ended July 31, 2015 2014 Interest income: Mortgage loans, net $ 2,812 $ 2,978 Loans to franchisees 1,654 2,071 AFS securities 2,058 2,270 Other 1,854 1,980 $ 8,378 $ 9,299 Interest expense: Borrowings $ 8,575 $ 13,795 Deposits 136 145 $ 8,711 $ 13,940 The presentation of interest expense from borrowings in the amount of $13.8 million for the three months ended July 31, 2014 , has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption in the consolidated statements of operations and comprehensive loss. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | NOTE 11: COMMITMENTS AND CONTINGENCIES Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM), which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2015 2014 Balance, beginning of the period $ 158,169 $ 145,237 Amounts deferred for new extended service plans issued 920 873 Revenue recognized on previous deferrals (27,703 ) (24,253 ) Balance, end of the period $ 131,386 $ 121,857 We accrued $7.6 million , $10.6 million and $8.4 million as of July 31, 2015 and 2014 and April 30, 2015 , respectively, related to estimated losses under our standard guarantee, which is included with our standard in-office 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. For POM in franchise offices, we deferred revenue of $0.1 million , and recognized revenue of $3.4 million during the three months ended July 31, 2015 . At July 31, 2015 , our deferred revenue related to POM in franchise offices totaled $28.3 million . We have accrued estimated contingent consideration payments totaling $10.7 million , $9.2 million and $10.7 million as of July 31, 2015 and 2014 and April 30, 2015 , respectively, related to acquisitions, with the short-term amount 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 $77.4 million at July 31, 2015 , and net of amounts drawn and outstanding, our remaining commitment to fund totaled $38.8 million . We maintain compensating balances with certain financial institutions that are creditors in our 2012 CLOC, which are not legally restricted as to withdrawal. We had compensating balances totaling $225.0 million as of July 31, 2015 . These balances may fluctuate significantly over the course of any fiscal year. NOTE 13: 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 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. SCC also would assert that it has no liability for the failure to repurchase any mortgage loan that has been liquidated prior to a repurchase demand, although there is conflicting case law on the liquidated loan defense issue as described below. 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. These tolling agreements toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC. Beginning in the fourth quarter of fiscal year 2013 and continuing through the first quarter of fiscal year 2016, SCC has been engaged in discussions with these counterparties regarding the bulk settlement of previously denied and potential future claims. Based on settlement discussions with these counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the representation and warranty and other claims that are the subject of these discussions. On December 5, 2014, SCC entered into a settlement agreement to resolve certain of these claims. The amount paid under the settlement agreement was 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, 2015 , 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, 2015 2014 Balance, beginning of the period $ 149,765 $ 183,765 Provisions — 10,000 Payments — — Balance, end of the period $ 149,765 $ 193,765 On June 11, 2015, the New York Court of Appeals, New York's highest appellate court, upheld the New York intermediate appellate court 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 pursue alternate legal theories of recovery or assert claims against other contractual parties. 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. The impact on SCC, if any, from alternative legal theories or assertions is unclear. SCC is taking the legal position, where appropriate, for both contractual representation and warranty claims and similar claims in litigation, that a valid representation and warranty claim cannot be made with respect to a mortgage loan that has been liquidated. There is conflicting case law on this issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and may be subject to appeal. It is anticipated that the liquidated mortgage loan defense will be the subject of future judicial decisions. In the event the liquidated loan defense is further clarified by the courts or other developments occur, the liquidated loan defense may be a factor in the future in SCC's estimated accrual for representation and warranty claims where such defense may be applicable . 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 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 12 , losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters and depositors in securitization transactions in which SCC participated. Losses from 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 $149.8 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 or seek payment directly from the Company even if SCC's assets exceed its liabilities . SCC's principal assets, as of July 31, 2015 , total approximately $480 million and consist primarily of an intercompany note receivable and a deferred tax asset. 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. |
Litigation And Related Continge
Litigation And Related Contingencies | 3 Months Ended |
Jul. 31, 2015 | |
Litigation And Related Contingencies [Abstract] | |
Litigation And Related Contingencies | NOTE 12: 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, 2015 . 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, 2015 and 2014 and April 30, 2015 , we accrued liabilities of $9.3 million , $23.7 million and $8.9 million , respectively, for such litigation 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, 2015 , 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 have been, remain, or may in the future be subject to litigation, claims, including indemnification 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 and underwriters, 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 October 15, 2010, the Federal Home Loan Bank of Chicago (FHLB-Chicago) filed a lawsuit in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. against multiple defendants, including various SCC-related entities, H&R Block, Inc. and other entities, arising out of FHLB-Chicago's purchase of residential mortgage-backed securities (RMBSs). The plaintiff seeks rescission and damages under state securities law and for common law negligent misrepresentation in connection with its purchase of two securities collateralized by loans originated and securitized by SCC. These two securities had a total initial principal amount of approximately $50 million , of which approximately $32 million remains outstanding. The plaintiff agreed to voluntarily dismiss H&R Block, Inc. from the suit. The remaining defendants, including SCC, filed motions to dismiss, which the court denied. The defendants moved for leave to appeal and the circuit court denied the motion. On August 31, 2015, the parties reached an agreement to settle the claims for an amount fully covered by prior accruals. 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. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter. 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. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter. 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. Based on information currently available to SCC, it believes that the 20 lawsuits in which notice of a claim has been made involve 38 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 the Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation case discussed in this note) 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. 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 appeal, 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. 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 seeks to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserts 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. Plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. The Eighth Circuit denied plaintiff's subsequent petition for rehearing on August 7, 2015. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. Form 8863 Litigation. A series of putative class action lawsuits were filed against us in various federal courts and one state court beginning on March 13, 2013. Taken together, the plaintiffs in these lawsuits purport to represent certain clients nationwide who filed Form 8863 during tax season 2013 through an H&R Block office or using H&R Block At Home ® online tax services or desktop tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection with transmission of the form. The plaintiffs seek damages, pre-judgment interest, attorneys' fees and costs. In August 2013, the plaintiff in the state court action voluntarily dismissed her case without prejudice. The Judicial Panel on Multidistrict Litigation subsequently granted our petition to consolidate the remaining federal lawsuits for coordinated pretrial proceedings in the United States District Court for the Western District of Missouri in a proceeding styled IN RE: H&R BLOCK IRS FORM 8863 LITIGATION (MDL No. 2474/Case No. 4:13-MD-02474-FJG). On July 11, 2014, the MDL court granted our motion to compel arbitration for those named plaintiffs who agreed to arbitrate their claims. Plaintiffs filed a consolidated class action complaint in October 2014. We filed a motion to strike the class allegations relating to those clients who agreed to arbitration, which the court granted on January 7, 2015. The cases remain stayed with respect to the individual plaintiffs who agreed to arbitration. A portion of our loss contingency accrual is related to this matter for the amount of loss that we consider probable and reasonably estimable . 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. 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, among other things, through an indemnification agreement. A portion of our accrual is related to these indemnity obligations. 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, 2015 2014 Balance, beginning of the period $ 149,765 $ 183,765 Provisions — 10,000 Payments — — Balance, end of the period $ 149,765 $ 193,765 |
Loss Contingencies Arising From
Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations | 3 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations | NOTE 11: COMMITMENTS AND CONTINGENCIES Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM), which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2015 2014 Balance, beginning of the period $ 158,169 $ 145,237 Amounts deferred for new extended service plans issued 920 873 Revenue recognized on previous deferrals (27,703 ) (24,253 ) Balance, end of the period $ 131,386 $ 121,857 We accrued $7.6 million , $10.6 million and $8.4 million as of July 31, 2015 and 2014 and April 30, 2015 , respectively, related to estimated losses under our standard guarantee, which is included with our standard in-office 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. For POM in franchise offices, we deferred revenue of $0.1 million , and recognized revenue of $3.4 million during the three months ended July 31, 2015 . At July 31, 2015 , our deferred revenue related to POM in franchise offices totaled $28.3 million . We have accrued estimated contingent consideration payments totaling $10.7 million , $9.2 million and $10.7 million as of July 31, 2015 and 2014 and April 30, 2015 , respectively, related to acquisitions, with the short-term amount 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 $77.4 million at July 31, 2015 , and net of amounts drawn and outstanding, our remaining commitment to fund totaled $38.8 million . We maintain compensating balances with certain financial institutions that are creditors in our 2012 CLOC, which are not legally restricted as to withdrawal. We had compensating balances totaling $225.0 million as of July 31, 2015 . These balances may fluctuate significantly over the course of any fiscal year. NOTE 13: 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 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. SCC also would assert that it has no liability for the failure to repurchase any mortgage loan that has been liquidated prior to a repurchase demand, although there is conflicting case law on the liquidated loan defense issue as described below. 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. These tolling agreements toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC. Beginning in the fourth quarter of fiscal year 2013 and continuing through the first quarter of fiscal year 2016, SCC has been engaged in discussions with these counterparties regarding the bulk settlement of previously denied and potential future claims. Based on settlement discussions with these counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the representation and warranty and other claims that are the subject of these discussions. On December 5, 2014, SCC entered into a settlement agreement to resolve certain of these claims. The amount paid under the settlement agreement was 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, 2015 , 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, 2015 2014 Balance, beginning of the period $ 149,765 $ 183,765 Provisions — 10,000 Payments — — Balance, end of the period $ 149,765 $ 193,765 On June 11, 2015, the New York Court of Appeals, New York's highest appellate court, upheld the New York intermediate appellate court 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 pursue alternate legal theories of recovery or assert claims against other contractual parties. 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. The impact on SCC, if any, from alternative legal theories or assertions is unclear. SCC is taking the legal position, where appropriate, for both contractual representation and warranty claims and similar claims in litigation, that a valid representation and warranty claim cannot be made with respect to a mortgage loan that has been liquidated. There is conflicting case law on this issue. These decisions are from lower courts, are inconsistent in their analysis and receptivity to this defense, and may be subject to appeal. It is anticipated that the liquidated mortgage loan defense will be the subject of future judicial decisions. In the event the liquidated loan defense is further clarified by the courts or other developments occur, the liquidated loan defense may be a factor in the future in SCC's estimated accrual for representation and warranty claims where such defense may be applicable . 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 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 12 , losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters and depositors in securitization transactions in which SCC participated. Losses from 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 $149.8 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 or seek payment directly from the Company even if SCC's assets exceed its liabilities . SCC's principal assets, as of July 31, 2015 , total approximately $480 million and consist primarily of an intercompany note receivable and a deferred tax asset. 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. |
Segment Information
Segment Information | 3 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 14: SEGMENT INFORMATION Results of our continuing operations by reportable segment are as follows: (in 000s) Three months ended July 31, 2015 2014 REVENUES : Tax preparation fees: U.S. assisted $ 27,285 $ 25,489 International 35,718 41,456 U.S. digital 3,179 2,932 66,182 69,877 Royalties 9,695 7,642 Revenues from Refund Transfers 3,415 3,419 Revenues from Emerald Card® 15,689 14,045 Revenues from Peace of Mind® Extended Service Plan 27,703 24,253 Interest and fee income on Emerald Advance 314 607 Other 9,576 9,237 Total Tax Services 132,574 129,080 Corporate and eliminations 5,144 4,506 $ 137,718 $ 133,586 LOSS FROM CONTINUING OPERATIONS BEFORE TAXES : Tax Services $ (169,438 ) $ (150,560 ) Corporate and eliminations (17,671 ) (25,256 ) $ (187,109 ) $ (175,816 ) |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | 3 Months Ended |
Jul. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Statements | NOTE 15: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Block Financial is a 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full and unconditional Guarantor of the Senior Notes issued on October 25, 2012, our 2012 CLOC, and other indebtedness issued from time to time. These condensed consolidating financial statements have been prepared using the equity method of accounting. Earnings of subsidiaries are, therefore, reflected in the Company's investment in subsidiaries account. The elimination entries eliminate investments in subsidiaries, related stockholders' equity and other intercompany balances and transactions. As discussed in note 10 , the presentation of interest expense on borrowings for the three months ended July 31, 2014 has been restated to correct errors in presentation. We reclassified such interest expense from cost of revenues to a separate caption. 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 909 495 554 (1,525 ) 433 Interest expense on external borrowings — (8,436 ) (139 ) — (8,575 ) Other expenses (102,593 ) (468 ) (12,255 ) 110,331 (4,985 ) Income (loss) from continuing operations before tax (benefit) (101,684 ) 227 (194,458 ) 108,806 (187,109 ) Income tax expense (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 ) Three months ended July 31, 2014 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Total revenues $ — $ 23,860 $ 109,809 $ (83 ) $ 133,586 Cost of revenues — 11,808 185,998 (80 ) 197,726 Selling, general and administrative — 3,343 93,860 (3 ) 97,200 Total operating expenses — 15,151 279,858 (83 ) 294,926 Other income 1,226 1,006 659 (2,368 ) 523 Interest expense on external borrowings (1) — (13,693 ) (102 ) — (13,795 ) Other expenses (120,219 ) (1,842 ) (1,730 ) 122,587 (1,204 ) Loss from continuing operations before tax benefit (118,993 ) (5,820 ) (171,222 ) 120,219 (175,816 ) Income tax benefit (2,761 ) (2,643 ) (61,561 ) — (66,965 ) Net loss from continuing operations (116,232 ) (3,177 ) (109,661 ) 120,219 (108,851 ) Net loss from discontinued operations — (7,209 ) (172 ) — (7,381 ) Net loss (116,232 ) (10,386 ) (109,833 ) 120,219 (116,232 ) Other comprehensive income (loss) 306 (121 ) 306 (185 ) 306 Comprehensive loss $ (115,926 ) $ (10,507 ) $ (109,527 ) $ 120,034 $ (115,926 ) (1) Amounts have been restated, including the presentation of interest expense on borrowings as discussed in note 10 . CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of July 31, 2014 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 405,512 $ 1,024,407 $ (430 ) $ 1,429,489 Cash & cash equivalents - restricted — 12,817 59,100 — 71,917 Receivables, net 15 86,968 35,332 — 122,315 Deferred tax assets and income taxes receivable 17 98,041 92,265 — 190,323 Prepaid expenses and other current assets — 9,684 64,659 — 74,343 Investments in AFS securities — 403,674 100 — 403,774 Total current assets 32 1,016,696 1,275,863 (430 ) 2,292,161 Mortgage loans held for investment, net — 259,732 — — 259,732 Property and equipment, net — 209 314,322 — 314,531 Intangible assets, net — — 347,890 — 347,890 Goodwill — — 478,845 — 478,845 Deferred tax assets and income taxes receivable 3,395 46,752 (3,194 ) — 46,953 Investments in subsidiaries 784,419 — 50,384 (834,803 ) — Amounts due from affiliates 616,578 322,339 983 (939,900 ) — Other noncurrent assets — 103,178 47,529 — 150,707 Total assets $ 1,404,424 $ 1,748,906 $ 2,512,622 $ (1,775,133 ) $ 3,890,819 Customer banking deposits $ — $ 483,405 $ — $ (430 ) $ 482,975 Accounts payable and accrued expenses 846 4,639 122,427 — 127,912 Accrued salaries, wages and payroll taxes — 2,129 28,867 — 30,996 Accrued income taxes — 30,944 253,094 — 284,038 Current portion of long-term debt — 399,941 764 — 400,705 Deferred revenue and other current liabilities — 220,324 136,969 — 357,293 Total current liabilities 846 1,141,382 542,121 (430 ) 1,683,919 Long-term debt — 497,682 8,032 — 505,714 Deferred tax liabilities and reserves for uncertain tax positions 5,395 57,242 105,277 — 167,914 Deferred revenue and other noncurrent liabilities — 2,216 133,856 — 136,072 Amounts due to affiliates 983 — 938,917 (939,900 ) — Total liabilities 7,224 1,698,522 1,728,203 (940,330 ) 2,493,619 Stockholders' equity 1,397,200 50,384 784,419 (834,803 ) 1,397,200 Total liabilities and stockholders' equity $ 1,404,424 $ 1,748,906 $ 2,512,622 $ (1,775,133 ) $ 3,890,819 CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of April 30, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 478,077 $ 1,529,553 $ (440 ) $ 2,007,190 Cash & cash equivalents - restricted — 45,098 46,874 — 91,972 Receivables, net — 80,332 87,632 — 167,964 Deferred tax assets and income taxes receivable — 77,418 96,849 — 174,267 Prepaid expenses and other current assets — 7,771 62,512 — 70,283 Investments in AFS securities — 434,924 4,701 — 439,625 Total current assets — 1,123,620 1,828,121 (440 ) 2,951,301 Mortgage loans held for investment, net — 239,338 — — 239,338 Property and equipment, net — 218 311,169 — 311,387 Intangible assets, net — — 432,142 — 432,142 Goodwill — — 441,831 — 441,831 Deferred tax assets and income taxes receivable — 44,788 — (31,327 ) 13,461 Investments in subsidiaries 1,371,677 — 116,870 (1,488,547 ) — Amounts due from affiliates 463,434 134,094 1,058 (598,586 ) — Other noncurrent assets — 81,075 44,885 — 125,960 Total assets $ 1,835,111 $ 1,623,133 $ 3,176,076 $ (2,118,900 ) $ 4,515,420 Customer banking deposits $ — $ 744,681 $ — $ (440 ) $ 744,241 Accounts payable and accrued expenses 1,104 7,672 222,546 — 231,322 Accrued salaries, wages and payroll taxes — 1,946 142,798 — 144,744 Accrued income taxes — 49,529 385,155 — 434,684 Current portion of long-term debt — — 790 — 790 Deferred revenue and other current liabilities — 177,063 145,445 — 322,508 Total current liabilities 1,104 980,891 896,734 (440 ) 1,878,289 Long-term debt — 497,893 7,405 — 505,298 Deferred tax liabilities and reserves for uncertain tax positions — 25,696 148,217 (31,327 ) 142,586 Deferred revenue and other noncurrent liabilities — 1,783 154,515 — 156,298 Amounts due to affiliates 1,058 — 597,528 (598,586 ) — Total liabilities 2,162 1,506,263 1,804,399 (630,353 ) 2,682,471 Stockholders' equity 1,832,949 116,870 1,371,677 (1,488,547 ) 1,832,949 Total liabilities and stockholders' equity $ 1,835,111 $ 1,623,133 $ 3,176,076 $ (2,118,900 ) $ 4,515,420 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: 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 payments/investments in subsidiaries — 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 (17,756 ) — — — (17,756 ) Proceeds from exercise of stock options 13,015 — — — 13,015 Intercompany borrowings 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 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in 000s) Three months ended July 31, 2014 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Net cash used in operating activities: $ — $ (20,669 ) $ (360,916 ) $ — $ (381,585 ) Cash flows from investing: Maturities of and payments received on AFS securities — 18,484 — — 18,484 Principal payments on mortgage loans held for investment, net — 6,250 — — 6,250 Capital expenditures — (116 ) (25,725 ) — (25,841 ) Payments made for business acquisitions, net of cash acquired — — (40,533 ) — (40,533 ) Loans made to franchisees — (7,398 ) — — (7,398 ) Repayments from franchisees — 18,674 — — 18,674 Intercompany payments/investments in subsidiaries — 64,322 (50,881 ) (13,441 ) — Other, net — 1,868 2,162 — 4,030 Net cash provided by (used in) investing activities — 102,084 (114,977 ) (13,441 ) (26,334 ) Cash flows from financing: Customer banking deposits, net — (288,279 ) — 670 (287,609 ) Dividends paid (54,852 ) — — — (54,852 ) Repurchase of common stock (9,397 ) — — — (9,397 ) Proceeds from exercise of stock options 13,368 — — — 13,368 Intercompany borrowings 50,881 — (64,322 ) 13,441 — Other, net — — (9,919 ) — (9,919 ) Net cash used in financing activities — (288,279 ) (74,241 ) 14,111 (348,409 ) Effects of exchange rates on cash — — 510 — 510 Net decrease in cash and cash equivalents — (206,864 ) (549,624 ) 670 (755,818 ) Cash and cash equivalents at beginning of the period — 612,376 1,574,031 (1,100 ) 2,185,307 Cash and cash equivalents at end of the period $ — $ 405,512 $ 1,024,407 $ (430 ) $ 1,429,489 |
Summary Of Significant Accoun22
Summary Of Significant Accounting Policies (Policy) | 3 Months Ended |
Jul. 31, 2015 | |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation | – The consolidated balance sheets as of July 31, 2015 and 2014 , the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2015 and 2014 , and the condensed consolidated statements of cash flows for the three months ended July 31, 2015 and 2014 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, 2015 and 2014 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, 2015 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2015 or for the year then ended are derived from our April 30, 2015 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. |
Loss Per Share and Stockholde23
Loss Per Share and Stockholders' Equity (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
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, 2015 2014 Net loss from continuing operations attributable to shareholders $ (96,505 ) $ (108,851 ) Amounts allocated to participating securities (102 ) (89 ) Net loss from continuing operations attributable to common shareholders $ (96,607 ) $ (108,940 ) Basic weighted average common shares 275,765 274,575 Potential dilutive shares — — Dilutive weighted average common shares 275,765 274,575 Loss per share from continuing operations attributable to common shareholders: Basic $ (0.35 ) $ (0.40 ) Diluted (0.35 ) (0.40 ) |
Schedule of Comprehensive Income (Loss) | OTHER COMPREHENSIVE INCOME – Components of other comprehensive income include foreign currency translation adjustments and the change in net unrealized gains or losses on AFS marketable securities, and are as follows: (in 000s) Foreign Currency Translation Adjustments Unrealized Gain (Loss) on AFS Securities Total Balances as of May 1, 2015 $ (6,789 ) $ 8,529 $ 1,740 Other comprehensive income (loss) before reclassifications: Gross losses arising during the period (8,755 ) (2,235 ) (10,990 ) Income taxes — (875 ) (875 ) (8,755 ) (1,360 ) (10,115 ) Amounts reclassified to net income: Gross amount reclassified — 230 230 Income taxes — 89 89 — 141 141 Net other comprehensive loss (8,755 ) (1,219 ) (9,974 ) Balances as of July 31, 2015 $ (15,544 ) $ 7,310 $ (8,234 ) Balances as of May 1, 2014 $ 3,334 $ 1,843 $ 5,177 Other comprehensive income (loss) before reclassifications: Gross gains (losses) arising during the period 455 (1,183 ) (728 ) Income taxes — (460 ) (460 ) 455 (723 ) (268 ) Amounts reclassified to net income: Gross amount reclassified — 941 941 Income taxes — 367 367 — 574 574 Net other comprehensive income (loss) 455 (149 ) 306 Balances as of July 31, 2014 $ 3,789 $ 1,694 $ 5,483 |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract] | |
Schedule Of Short-Term Receivables | Receivables consist of the following: (in 000s) As of July 31, 2015 July 31, 2014 April 30, 2015 Short-term Long-term Short-term Long-term Short-term Long-term Loans to franchisees $ 56,277 $ 57,792 $ 62,195 $ 83,013 $ 56,603 $ 64,472 Receivables for tax preparation and related fees 39,927 6,103 38,204 — 48,864 6,103 Cash Back® receivables 2,777 — 4,170 — 42,680 — Emerald Advance lines of credit 20,321 598 20,239 2,839 21,908 1,913 Royalties from franchisees 4,509 — 4,278 — 8,206 — Other 33,154 7,934 44,629 15,294 44,230 8,379 156,965 72,427 173,715 101,146 222,491 80,867 Allowance for doubtful accounts (53,771 ) — (51,400 ) — (54,527 ) — $ 103,194 $ 72,427 $ 122,315 $ 101,146 $ 167,964 $ 80,867 |
Schedule Of Receivables Based On Year Of Origination | These amounts as of July 31, 2015 , by year of origination, are as follows: (in 000s) Credit Quality Indicator – Year of origination: 2015 $ 5,348 2014 92 2013 1,699 Revolving loans 13,780 $ 20,919 |
Schedule Of Activity In The Allowance For Doubtful Accounts | Activity in the allowance for doubtful accounts for our short-term receivables for the three months ended July 31, 2015 and 2014 is as follows: (in 000s) EAs All Other Total 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 Balances as of May 1, 2014 $ 7,530 $ 45,048 $ 52,578 Provision — 2,842 2,842 Charge-offs — (4,020 ) (4,020 ) Balances as of July 31, 2014 $ 7,530 $ 43,870 $ 51,400 |
Mortgage Loans Held For Inves25
Mortgage Loans Held For Investment And Related Assets (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
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, 2015 July 31, 2014 April 30, 2015 Amount % of Total Amount % of Total Amount % of Total Adjustable-rate loans $ 124,752 53 % $ 144,096 54 % $ 130,182 53 % Fixed-rate loans 111,096 47 % 123,991 46 % 115,034 47 % 235,848 100 % 268,087 100 % 245,216 100 % Unamortized deferred fees and costs 1,941 2,206 2,008 Less: Allowance for loan losses (7,659 ) (10,561 ) (7,886 ) $ 230,130 $ 259,732 $ 239,338 |
Schedule Of Allowance For Loan Losses | Activity in the allowance for loan losses for the three months ended July 31, 2015 and 2014 is as follows: (in 000s) Three months ended July 31, 2015 2014 Balance at beginning of the period $ 7,886 $ 11,272 Provision (28 ) 725 Recoveries 365 679 Charge-offs (564 ) (2,115 ) Balance at end of the period $ 7,659 $ 10,561 |
Schedule Of Past Due Mortgage Loans | Detail of the aging of the mortgage loans in our portfolio as of July 31, 2015 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 $ 8,525 $ 985 $ 45,957 $ 55,467 $ 83,894 $ 139,361 All other 2,790 488 6,346 9,624 86,863 96,487 $ 11,315 $ 1,473 $ 52,303 $ 65,091 $ 170,757 $ 235,848 (1) We do not accrue interest on loans past due 90 days or more. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Amortized Cost And Fair Value Of Securities Available-For-Sale | The amortized cost and fair value of securities classified as AFS are summarized below: (in 000s) Amortized Gross Gross Fair Value As of July 31, 2015: Mortgage-backed securities $ 392,285 $ 11,936 $ — $ 404,221 Municipal bonds 3,025 80 — 3,105 U.S. treasury bills 100 — — 100 $ 395,410 $ 12,016 $ — $ 407,426 As of July 31, 2014: Mortgage-backed securities $ 401,092 $ 2,582 $ — $ 403,674 Municipal bonds 4,106 183 — 4,289 U.S. treasury bills 100 — — 100 $ 405,298 $ 2,765 $ — $ 408,063 As of April 30, 2015: Mortgage-backed securities $ 421,035 $ 13,889 $ — $ 434,924 Municipal bonds 4,062 109 (24 ) 4,147 Common stock 2,491 47 — 2,538 U.S. treasury bills 100 — — 100 $ 427,688 $ 14,045 $ (24 ) $ 441,709 |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Goodwill | Changes in the carrying amount of goodwill of our Tax Services segment for the three months ended July 31, 2015 and 2014 are as follows: (in 000s) Goodwill Accumulated Impairment Losses Net 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 Balances as of April 30, 2014 $ 468,414 $ (32,297 ) $ 436,117 Acquisitions 42,274 — 42,274 Disposals and foreign currency changes, net 454 — 454 Impairments — — — Balances as of July 31, 2014 $ 511,142 $ (32,297 ) $ 478,845 |
Schedule Of Intangible Assets | Components of the intangible assets of our Tax Services segment are as follows: (in 000s) Gross Carrying Amount Accumulated Amortization Net 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 July 31, 2014: Reacquired franchise rights $ 233,749 $ (29,152 ) $ 204,597 Customer relationships 123,130 (62,514 ) 60,616 Internally-developed software 104,580 (75,243 ) 29,337 Noncompete agreements 24,697 (22,408 ) 2,289 Franchise agreements 19,201 (7,254 ) 11,947 Purchased technology 54,974 (15,870 ) 39,104 $ 560,331 $ (212,441 ) $ 347,890 As of April 30, 2015: Reacquired franchise rights $ 294,647 $ (46,180 ) $ 248,467 Customer relationships 170,851 (78,157 ) 92,694 Internally-developed software 118,865 (80,689 ) 38,176 Noncompete agreements 30,630 (23,666 ) 6,964 Franchise agreements 19,201 (8,214 ) 10,987 Purchased technology 54,700 (19,846 ) 34,854 $ 688,894 $ (256,752 ) $ 432,142 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Assets Remeasured At Fair Value On Non-Recurring Basis | the three months ended July 31, 2015 and 2014 and the losses on those remeasurements: (dollars in 000s) Total Level 1 Level 2 Level 3 Losses As of July 31, 2015: Impaired mortgage loans held for investment $ 57,951 $ — $ — $ 57,951 $ (88 ) As a percentage of total assets 1.6 % — % — % 1.6 % As of July 31, 2014: Impaired mortgage loans held for investment $ 59,635 $ — $ — $ 59,635 $ (842 ) As a percentage of total assets 1.5 % — % — % 1.5 % |
Quantitative Information About Level 3 Fair Value Measurements | (in 000s) Fair Value as of July 31, 2015 Valuation Technique Unobservable Input Range (Weighted Average) Impaired mortgage loans held for investment – non TDRs $ 68,368 Collateral- based Cost to list/sell Time to sell (months) Collateral depreciation Loss severity 0% – 171%(10%) 12 (12) (128%) – 100%(32%) 0% – 100%(61%) Impaired mortgage loans held for investment – TDRs $ 29,925 Discounted cash flow Aged default performance Loss severity 23% – 36%(29%) 0% – 23%(7%) |
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, 2015 July 31, 2014 April 30, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Cash and cash equivalents $ 1,299,382 $ 1,299,382 $ 1,429,489 $ 1,429,489 $ 2,007,190 $ 2,007,190 Cash and cash equivalents - restricted 61,040 61,040 71,917 71,917 91,972 91,972 Receivables, net - short-term 103,194 103,194 122,315 122,315 167,964 167,964 Mortgage loans held for investment, net 230,130 184,277 259,732 193,920 239,338 190,196 Investments in AFS securities 407,426 407,426 408,063 408,063 441,709 441,709 Receivables, net - long-term 72,427 72,427 101,146 101,146 80,867 80,867 Liabilities: Customer banking deposits 477,145 473,720 483,477 480,729 744,699 737,261 Long-term debt 505,996 552,431 906,419 965,650 506,088 556,769 Contingent consideration payments 10,650 10,650 9,168 9,168 10,667 10,667 |
Interest Income And Interest 29
Interest Income And Interest Expense (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Interest Income And Interest Expense [Abstract] | |
Schedule Of Interest Income And Expense Of Continuing Operations | The following table shows the components of interest income and expense: (in 000s) Three months ended July 31, 2015 2014 Interest income: Mortgage loans, net $ 2,812 $ 2,978 Loans to franchisees 1,654 2,071 AFS securities 2,058 2,270 Other 1,854 1,980 $ 8,378 $ 9,299 Interest expense: Borrowings $ 8,575 $ 13,795 Deposits 136 145 $ 8,711 $ 13,940 |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
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), which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2015 2014 Balance, beginning of the period $ 158,169 $ 145,237 Amounts deferred for new extended service plans issued 920 873 Revenue recognized on previous deferrals (27,703 ) (24,253 ) Balance, end of the period $ 131,386 $ 121,857 |
Loss Contingencies Arising Fr31
Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation And Related Contingencies | NOTE 12: 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, 2015 . 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, 2015 and 2014 and April 30, 2015 , we accrued liabilities of $9.3 million , $23.7 million and $8.9 million , respectively, for such litigation 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, 2015 , 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 have been, remain, or may in the future be subject to litigation, claims, including indemnification 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 and underwriters, 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 October 15, 2010, the Federal Home Loan Bank of Chicago (FHLB-Chicago) filed a lawsuit in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) styled Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. against multiple defendants, including various SCC-related entities, H&R Block, Inc. and other entities, arising out of FHLB-Chicago's purchase of residential mortgage-backed securities (RMBSs). The plaintiff seeks rescission and damages under state securities law and for common law negligent misrepresentation in connection with its purchase of two securities collateralized by loans originated and securitized by SCC. These two securities had a total initial principal amount of approximately $50 million , of which approximately $32 million remains outstanding. The plaintiff agreed to voluntarily dismiss H&R Block, Inc. from the suit. The remaining defendants, including SCC, filed motions to dismiss, which the court denied. The defendants moved for leave to appeal and the circuit court denied the motion. On August 31, 2015, the parties reached an agreement to settle the claims for an amount fully covered by prior accruals. 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. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter. 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. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter. 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. Based on information currently available to SCC, it believes that the 20 lawsuits in which notice of a claim has been made involve 38 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 the Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation case discussed in this note) 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. 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 appeal, 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. 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 seeks to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserts 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. Plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. The Eighth Circuit denied plaintiff's subsequent petition for rehearing on August 7, 2015. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. Form 8863 Litigation. A series of putative class action lawsuits were filed against us in various federal courts and one state court beginning on March 13, 2013. Taken together, the plaintiffs in these lawsuits purport to represent certain clients nationwide who filed Form 8863 during tax season 2013 through an H&R Block office or using H&R Block At Home ® online tax services or desktop tax preparation software, and allege breach of contract, negligence and violation of state consumer laws in connection with transmission of the form. The plaintiffs seek damages, pre-judgment interest, attorneys' fees and costs. In August 2013, the plaintiff in the state court action voluntarily dismissed her case without prejudice. The Judicial Panel on Multidistrict Litigation subsequently granted our petition to consolidate the remaining federal lawsuits for coordinated pretrial proceedings in the United States District Court for the Western District of Missouri in a proceeding styled IN RE: H&R BLOCK IRS FORM 8863 LITIGATION (MDL No. 2474/Case No. 4:13-MD-02474-FJG). On July 11, 2014, the MDL court granted our motion to compel arbitration for those named plaintiffs who agreed to arbitrate their claims. Plaintiffs filed a consolidated class action complaint in October 2014. We filed a motion to strike the class allegations relating to those clients who agreed to arbitration, which the court granted on January 7, 2015. The cases remain stayed with respect to the individual plaintiffs who agreed to arbitration. A portion of our loss contingency accrual is related to this matter for the amount of loss that we consider probable and reasonably estimable . 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. 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, among other things, through an indemnification agreement. A portion of our accrual is related to these indemnity obligations. 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, 2015 2014 Balance, beginning of the period $ 149,765 $ 183,765 Provisions — 10,000 Payments — — Balance, end of the period $ 149,765 $ 193,765 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Operations By Reportable Operating Segment | Results of our continuing operations by reportable segment are as follows: (in 000s) Three months ended July 31, 2015 2014 REVENUES : Tax preparation fees: U.S. assisted $ 27,285 $ 25,489 International 35,718 41,456 U.S. digital 3,179 2,932 66,182 69,877 Royalties 9,695 7,642 Revenues from Refund Transfers 3,415 3,419 Revenues from Emerald Card® 15,689 14,045 Revenues from Peace of Mind® Extended Service Plan 27,703 24,253 Interest and fee income on Emerald Advance 314 607 Other 9,576 9,237 Total Tax Services 132,574 129,080 Corporate and eliminations 5,144 4,506 $ 137,718 $ 133,586 LOSS FROM CONTINUING OPERATIONS BEFORE TAXES : Tax Services $ (169,438 ) $ (150,560 ) Corporate and eliminations (17,671 ) (25,256 ) $ (187,109 ) $ (175,816 ) |
Condensed Consolidating Finan33
Condensed Consolidating Financial Statements (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Schedule of Condensed Consolidating Statement of Cash Flows [Text Block] | 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: 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 payments/investments in subsidiaries — 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 (17,756 ) — — — (17,756 ) Proceeds from exercise of stock options 13,015 — — — 13,015 Intercompany borrowings 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 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in 000s) Three months ended July 31, 2014 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Net cash used in operating activities: $ — $ (20,669 ) $ (360,916 ) $ — $ (381,585 ) Cash flows from investing: Maturities of and payments received on AFS securities — 18,484 — — 18,484 Principal payments on mortgage loans held for investment, net — 6,250 — — 6,250 Capital expenditures — (116 ) (25,725 ) — (25,841 ) Payments made for business acquisitions, net of cash acquired — — (40,533 ) — (40,533 ) Loans made to franchisees — (7,398 ) — — (7,398 ) Repayments from franchisees — 18,674 — — 18,674 Intercompany payments/investments in subsidiaries — 64,322 (50,881 ) (13,441 ) — Other, net — 1,868 2,162 — 4,030 Net cash provided by (used in) investing activities — 102,084 (114,977 ) (13,441 ) (26,334 ) Cash flows from financing: Customer banking deposits, net — (288,279 ) — 670 (287,609 ) Dividends paid (54,852 ) — — — (54,852 ) Repurchase of common stock (9,397 ) — — — (9,397 ) Proceeds from exercise of stock options 13,368 — — — 13,368 Intercompany borrowings 50,881 — (64,322 ) 13,441 — Other, net — — (9,919 ) — (9,919 ) Net cash used in financing activities — (288,279 ) (74,241 ) 14,111 (348,409 ) Effects of exchange rates on cash — — 510 — 510 Net decrease in cash and cash equivalents — (206,864 ) (549,624 ) 670 (755,818 ) Cash and cash equivalents at beginning of the period — 612,376 1,574,031 (1,100 ) 2,185,307 Cash and cash equivalents at end of the period $ — $ 405,512 $ 1,024,407 $ (430 ) $ 1,429,489 |
Schedule Of Condensed Consolidating Statement Of Operations [Table Text Block] | 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 909 495 554 (1,525 ) 433 Interest expense on external borrowings — (8,436 ) (139 ) — (8,575 ) Other expenses (102,593 ) (468 ) (12,255 ) 110,331 (4,985 ) Income (loss) from continuing operations before tax (benefit) (101,684 ) 227 (194,458 ) 108,806 (187,109 ) Income tax expense (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 ) Three months ended July 31, 2014 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Total revenues $ — $ 23,860 $ 109,809 $ (83 ) $ 133,586 Cost of revenues — 11,808 185,998 (80 ) 197,726 Selling, general and administrative — 3,343 93,860 (3 ) 97,200 Total operating expenses — 15,151 279,858 (83 ) 294,926 Other income 1,226 1,006 659 (2,368 ) 523 Interest expense on external borrowings (1) — (13,693 ) (102 ) — (13,795 ) Other expenses (120,219 ) (1,842 ) (1,730 ) 122,587 (1,204 ) Loss from continuing operations before tax benefit (118,993 ) (5,820 ) (171,222 ) 120,219 (175,816 ) Income tax benefit (2,761 ) (2,643 ) (61,561 ) — (66,965 ) Net loss from continuing operations (116,232 ) (3,177 ) (109,661 ) 120,219 (108,851 ) Net loss from discontinued operations — (7,209 ) (172 ) — (7,381 ) Net loss (116,232 ) (10,386 ) (109,833 ) 120,219 (116,232 ) Other comprehensive income (loss) 306 (121 ) 306 (185 ) 306 Comprehensive loss $ (115,926 ) $ (10,507 ) $ (109,527 ) $ 120,034 $ (115,926 ) (1) Amounts have been restated, including the presentation of interest expense on borrowings as discussed in note 10 . |
Schedule Of Condensed Consolidating Balance Sheet [Table Text Block] | CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of July 31, 2014 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 405,512 $ 1,024,407 $ (430 ) $ 1,429,489 Cash & cash equivalents - restricted — 12,817 59,100 — 71,917 Receivables, net 15 86,968 35,332 — 122,315 Deferred tax assets and income taxes receivable 17 98,041 92,265 — 190,323 Prepaid expenses and other current assets — 9,684 64,659 — 74,343 Investments in AFS securities — 403,674 100 — 403,774 Total current assets 32 1,016,696 1,275,863 (430 ) 2,292,161 Mortgage loans held for investment, net — 259,732 — — 259,732 Property and equipment, net — 209 314,322 — 314,531 Intangible assets, net — — 347,890 — 347,890 Goodwill — — 478,845 — 478,845 Deferred tax assets and income taxes receivable 3,395 46,752 (3,194 ) — 46,953 Investments in subsidiaries 784,419 — 50,384 (834,803 ) — Amounts due from affiliates 616,578 322,339 983 (939,900 ) — Other noncurrent assets — 103,178 47,529 — 150,707 Total assets $ 1,404,424 $ 1,748,906 $ 2,512,622 $ (1,775,133 ) $ 3,890,819 Customer banking deposits $ — $ 483,405 $ — $ (430 ) $ 482,975 Accounts payable and accrued expenses 846 4,639 122,427 — 127,912 Accrued salaries, wages and payroll taxes — 2,129 28,867 — 30,996 Accrued income taxes — 30,944 253,094 — 284,038 Current portion of long-term debt — 399,941 764 — 400,705 Deferred revenue and other current liabilities — 220,324 136,969 — 357,293 Total current liabilities 846 1,141,382 542,121 (430 ) 1,683,919 Long-term debt — 497,682 8,032 — 505,714 Deferred tax liabilities and reserves for uncertain tax positions 5,395 57,242 105,277 — 167,914 Deferred revenue and other noncurrent liabilities — 2,216 133,856 — 136,072 Amounts due to affiliates 983 — 938,917 (939,900 ) — Total liabilities 7,224 1,698,522 1,728,203 (940,330 ) 2,493,619 Stockholders' equity 1,397,200 50,384 784,419 (834,803 ) 1,397,200 Total liabilities and stockholders' equity $ 1,404,424 $ 1,748,906 $ 2,512,622 $ (1,775,133 ) $ 3,890,819 CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of April 30, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 478,077 $ 1,529,553 $ (440 ) $ 2,007,190 Cash & cash equivalents - restricted — 45,098 46,874 — 91,972 Receivables, net — 80,332 87,632 — 167,964 Deferred tax assets and income taxes receivable — 77,418 96,849 — 174,267 Prepaid expenses and other current assets — 7,771 62,512 — 70,283 Investments in AFS securities — 434,924 4,701 — 439,625 Total current assets — 1,123,620 1,828,121 (440 ) 2,951,301 Mortgage loans held for investment, net — 239,338 — — 239,338 Property and equipment, net — 218 311,169 — 311,387 Intangible assets, net — — 432,142 — 432,142 Goodwill — — 441,831 — 441,831 Deferred tax assets and income taxes receivable — 44,788 — (31,327 ) 13,461 Investments in subsidiaries 1,371,677 — 116,870 (1,488,547 ) — Amounts due from affiliates 463,434 134,094 1,058 (598,586 ) — Other noncurrent assets — 81,075 44,885 — 125,960 Total assets $ 1,835,111 $ 1,623,133 $ 3,176,076 $ (2,118,900 ) $ 4,515,420 Customer banking deposits $ — $ 744,681 $ — $ (440 ) $ 744,241 Accounts payable and accrued expenses 1,104 7,672 222,546 — 231,322 Accrued salaries, wages and payroll taxes — 1,946 142,798 — 144,744 Accrued income taxes — 49,529 385,155 — 434,684 Current portion of long-term debt — — 790 — 790 Deferred revenue and other current liabilities — 177,063 145,445 — 322,508 Total current liabilities 1,104 980,891 896,734 (440 ) 1,878,289 Long-term debt — 497,893 7,405 — 505,298 Deferred tax liabilities and reserves for uncertain tax positions — 25,696 148,217 (31,327 ) 142,586 Deferred revenue and other noncurrent liabilities — 1,783 154,515 — 156,298 Amounts due to affiliates 1,058 — 597,528 (598,586 ) — Total liabilities 2,162 1,506,263 1,804,399 (630,353 ) 2,682,471 Stockholders' equity 1,832,949 116,870 1,371,677 (1,488,547 ) 1,832,949 Total liabilities and stockholders' equity $ 1,835,111 $ 1,623,133 $ 3,176,076 $ (2,118,900 ) $ 4,515,420 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Jul. 31, 2015 | Sep. 01, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Investments in available-for-sale securities | $ 406,360 | $ 439,625 | $ 403,774 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | |||
Minimum [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 32.25 | |||
Maximum [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Customer Deposits | $ 419,000 | |||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 37 | |||
HRB Bank [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Customer Deposits | $ 477,145 | $ 744,699 | $ 483,477 | |
Collateralized Mortgage Backed Securities [Member] | Other Long-term Investments [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Investments in available-for-sale securities | $ 404,221 | |||
Subsequent Event [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 3,500,000 | |||
Subsequent Event [Member] | Tender Offer [Member] | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | $ 1,500,000 |
Loss Per Share and Stockholde35
Loss Per Share and Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | Apr. 30, 2014 | |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss) | $ (6,789) | $ 3,334 | ||
Gross losses arising during the period | (10,990) | (728) | ||
Income taxes | (875) | (460) | ||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (10,115) | (268) | ||
Gross amount reclassified | 0 | 0 | ||
Income taxes | 0 | 0 | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax | 0 | 0 | ||
Change in foreign currency translation adjustments | (8,755) | 455 | ||
Accumulated Other Comprehensive Income (Loss) | (15,544) | 3,789 | ||
Unrealized Gain (Loss) on AFS Securities | ||||
Accumulated Other Comprehensive Income (Loss) | 8,529 | 1,843 | ||
Gross amount reclassified | 230 | 941 | ||
Tax effect of reclassification adjustment for gains included in income | 89 | 367 | ||
Reclassification adjustment for gains included in income | 141 | 574 | ||
Net other comprehensive loss | (1,219) | (149) | ||
Accumulated Other Comprehensive Income (Loss) | 7,310 | 1,694 | ||
Accumulated other comprehensive income (loss) | (8,234) | 5,483 | $ 1,740 | $ 5,177 |
Other Comprehensive Income (Loss), Net of Tax | (9,974) | 306 | ||
Net loss from continuing operations attributable to shareholders | (96,505) | (108,851) | ||
Amounts allocated to participating securities | (102) | (89) | ||
Net loss from continuing operations attributable to common shareholders | $ (96,607) | $ (108,940) | ||
Basic weighted average common shares (in shares) | 275,765 | 274,575 | ||
Potential dilutive shares (in shares) | 0 | 0 | ||
Weighted Average Number of Shares Outstanding, Diluted | 275,765 | 274,575 | ||
Basic (in usd per share) | $ (0.35) | $ (0.40) | ||
Narrative Details [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 5,000 | 5,500 | ||
Shares repurchased during the period, (in shares) | 600 | 300 | ||
Shares repurchased during the period, Value | $ 17,800 | $ 9,400 | ||
Shares issued during period (in shares) | 1,600 | 1,100 | ||
Nonvested units granted | 900 | |||
Stock-based compensation | $ 6,000 | $ 7,500 | ||
Unrecognized compensation costs, options | 100 | |||
Unrecognized compensation costs, nonvested shares and units | 50,200 | |||
Accumulated Translation Adjustment [Member] | ||||
Foreign Currency Translation Adjustments | ||||
Gross losses arising during the period | (8,755) | 455 | ||
Income taxes | 0 | 0 | ||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | (8,755) | 455 | ||
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||||
Foreign Currency Translation Adjustments | ||||
Gross losses arising during the period | (2,235) | (1,183) | ||
Income taxes | (875) | (460) | ||
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax | $ (1,360) | $ (723) |
Receivables (Narrative) (Detail
Receivables (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Document Fiscal Year Focus | 2,016 | ||
Impaired non-accrual status term, days | 60 days | ||
Total Portfolio | $ 235,848 | $ 245,216 | $ 268,087 |
Loans to franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing Receivable, Recorded Investment, Past Due | 1,500 | 800 | 100 |
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Non-accrual status loans | 17,400 | 18,700 | 20,000 |
Term Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, net | 75,700 | 80,800 | 99,700 |
Revolving Lines Of Credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, net | 38,400 | 40,300 | 45,500 |
Cash Back® receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Short-term | $ 600 | $ 1,300 | $ 1,100 |
Receivables (Schedule Of Short-
Receivables (Schedule Of Short-Term Receivables) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | $ 156,965 | $ 222,491 | $ 173,715 |
Accounts Receivable, Gross, Noncurrent | 72,427 | 80,867 | 101,146 |
Allowance for doubtful accounts | (53,771) | (54,527) | (51,400) |
Allowance for Doubtful Accounts Receivable, Noncurrent | 0 | 0 | 0 |
Receivables, net | 103,194 | 167,964 | 122,315 |
Accounts Receivable, Net, Noncurrent | 72,427 | 80,867 | 101,146 |
Loans to franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, gross | 56,603 | 62,195 | |
Accounts Receivable, Gross, Current | 56,277 | ||
Accounts Receivable, Gross, Noncurrent | 57,792 | 64,472 | 83,013 |
Receivables for tax preparation and related fees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, gross | 48,864 | 38,204 | |
Accounts Receivable, Gross, Current | 39,927 | ||
Accounts Receivable, Gross, Noncurrent | 6,103 | 6,103 | 0 |
Cash Back® receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, gross | 42,680 | 4,170 | |
Accounts Receivable, Gross, Current | 2,777 | ||
Accounts Receivable, Gross, Noncurrent | 0 | 0 | 0 |
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, gross | 21,908 | 20,239 | |
Accounts Receivable, Gross, Current | 20,321 | ||
Accounts Receivable, Gross, Noncurrent | 598 | 1,913 | 2,839 |
Allowance for doubtful accounts | (7,353) | (7,353) | |
Royalties from franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, gross | 8,206 | 4,278 | |
Accounts Receivable, Gross, Current | 4,509 | ||
Accounts Receivable, Gross, Noncurrent | 0 | 0 | |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, gross | 44,230 | 44,629 | |
Accounts Receivable, Gross, Current | 33,154 | ||
Accounts Receivable, Gross, Noncurrent | $ 7,934 | $ 8,379 | $ 15,294 |
Receivables (Schedule Of Loans
Receivables (Schedule Of Loans Receivable) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | $ 156,965 | $ 222,491 | $ 173,715 |
Accounts Receivable, Gross, Noncurrent | 72,427 | 80,867 | 101,146 |
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 20,321 | ||
Short-term | 21,908 | 20,239 | |
Accounts Receivable, Gross, Noncurrent | 598 | 1,913 | 2,839 |
Financing Receivable, Gross | 20,919 | ||
Loans to franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 56,277 | ||
Short-term | 56,603 | 62,195 | |
Accounts Receivable, Gross, Noncurrent | 57,792 | 64,472 | 83,013 |
Cash Back® receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 2,777 | ||
Short-term | 42,680 | 4,170 | |
Accounts Receivable, Gross, Noncurrent | $ 0 | $ 0 | $ 0 |
Receivables (Schedule Of Receiv
Receivables (Schedule Of Receivables Based On Year Of Origination) (Details) - Emerald Advance lines of credit $ in Thousands | Jul. 31, 2015USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | $ 20,919 |
Year Of Origination2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | 5,348 |
Year Of Origination2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | 92 |
Year Of Origination2013 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | 1,699 |
Revolving Loans | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | $ 13,780 |
Receivables (Schedule Of Activi
Receivables (Schedule Of Activity In The Allowance For Doubtful Accounts) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | $ 53,771 | $ 51,400 | $ 54,527 |
Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | 52,578 | ||
Provision | 713 | 2,842 | |
Charge-offs | (1,469) | (4,020) | |
Ending balance | 51,400 | ||
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | 7,353 | 7,353 | |
Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | 7,530 | ||
Provision | 0 | 0 | |
Charge-offs | 0 | 0 | |
Ending balance | 7,530 | ||
All Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | 46,418 | $ 47,174 | |
Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | 45,048 | ||
Provision | 713 | 2,842 | |
Charge-offs | $ (1,469) | (4,020) | |
Ending balance | $ 43,870 |
Mortgage Loans Held For Inves41
Mortgage Loans Held For Investment And Related Assets (Narrative) (Details) | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Mortgage Loans Held For Investment And Related Assets [Line Items] | |||
Allowance as Percent of Principal | 3.20% | 3.20% | 3.90% |
Mortgage Loans Held For Inves42
Mortgage Loans Held For Investment And Related Assets (Schedule Of Mortgage Loan Portfolio) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | Apr. 30, 2014 |
Mortgage Loans Held For Investment And Related Assets [Abstract] | ||||
Adjustable-rate loans | $ 124,752 | $ 130,182 | $ 144,096 | |
Adjustable-rate loans, percent of total loans | 53.00% | 53.00% | 54.00% | |
Fixed-rate loans | $ 111,096 | $ 115,034 | $ 123,991 | |
Fixed-rate loans, percent of Total loans | 47.00% | 47.00% | 46.00% | |
Total loans | $ 235,848 | $ 245,216 | $ 268,087 | |
Total loans, percent of Total loans | 100.00% | 100.00% | 100.00% | |
Unamortized deferred fees and costs | $ 1,941 | $ 2,008 | $ 2,206 | |
Less: Allowance for loan losses | (7,659) | (7,886) | (10,561) | $ (11,272) |
Total | $ 230,130 | $ 239,338 | $ 259,732 |
Mortgage Loans Held For Inves43
Mortgage Loans Held For Investment And Related Assets (Schedule Of Allowance For Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Loans and Leases Rollforward [Roll Forward] | ||
Balance at beginning of the period | $ 7,886 | $ 11,272 |
Provision | (28) | 725 |
Recoveries | 365 | 679 |
Charge-offs | (564) | (2,115) |
Balance at end of the period | $ 7,659 | $ 10,561 |
Mortgage Loans Held For Inves44
Mortgage Loans Held For Investment And Related Assets (Schedule Of Past Due Mortgage Loans) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | |
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | $ 235,848 | $ 245,216 | $ 268,087 | |
Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 139,361 | |||
All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 96,487 | |||
Less than 60 Days Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 11,315 | |||
Less than 60 Days Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 8,525 | |||
Less than 60 Days Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 2,790 | |||
60 – 89 Days Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 1,473 | |||
60 – 89 Days Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 985 | |||
60 – 89 Days Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 488 | |||
90 Days Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | [1] | 52,303 | ||
90 Days Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | [1] | 45,957 | ||
90 Days Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | [1] | 6,346 | ||
Total Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 65,091 | |||
Total Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 55,467 | |||
Total Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 9,624 | |||
Current | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 170,757 | |||
Current | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 83,894 | |||
Current | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | $ 86,863 | |||
[1] | We do not accrue interest on loans past due 90 days or more. |
Investments (Amortized Cost And
Investments (Amortized Cost And Fair Value Of Securities Available-For-Sale) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | $ 395,410 | $ 427,688 | $ 405,298 |
Gross Unrealized Gains | 12,016 | 14,045 | 2,765 |
Gross Unrealized Losses | 0 | (24) | 0 |
Available-for-sale Securities, Current | 406,360 | 439,625 | 403,774 |
Fair Value | 407,426 | 441,709 | 408,063 |
Long-Term | Mortgage-Backed Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 392,285 | 421,035 | 401,092 |
Gross Unrealized Gains | 11,936 | 13,889 | 2,582 |
Gross Unrealized Losses | 0 | 0 | 0 |
Available-for-sale Securities, Current | 404,221 | ||
Fair Value | 434,924 | 403,674 | |
Long-Term | Municipal Bonds | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 3,025 | 4,062 | 4,106 |
Gross Unrealized Gains | 80 | 109 | 183 |
Gross Unrealized Losses | 0 | (24) | 0 |
Fair Value | 3,105 | 4,147 | 4,289 |
Long-Term | Common Stock [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 2,491 | ||
Gross Unrealized Gains | 47 | ||
Gross Unrealized Losses | 0 | ||
Fair Value | 2,538 | ||
Long-Term | US Treasury Bill Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Amortized Cost | 100 | 100 | 100 |
Gross Unrealized Gains | 0 | 0 | 0 |
Gross Unrealized Losses | 0 | 0 | 0 |
Fair Value | $ 100 | $ 100 | $ 100 |
Goodwill And Intangible Asset46
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 16.6 | $ 11.2 |
Estimated amortization, 2015 | 64.1 | |
Estimated amortization, 2016 | 55.7 | |
Estimated amortization, 2017 | 48.6 | |
Estimated amortization, 2018 | 36.9 | |
Estimated amortization, 2019 | $ 26.2 |
Goodwill And Intangible Asset47
Goodwill And Intangible Assets (Schedule Of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Goodwill [Roll Forward] | ||
Goodwill before impairment losses, beginning balance | $ 474,128 | $ 468,414 |
Accumulated impairment losses, beginning balance | (32,297) | (32,297) |
Goodwill, beginning balance | 441,831 | 436,117 |
Acquisitions | 14,030 | 42,274 |
Disposals and foreign currency changes, net | 1,467 | (454) |
Impairments | 0 | 0 |
Goodwill before impairment losses, ending balance | 486,691 | 511,142 |
Accumulated impairment losses, ending balance | (32,297) | (32,297) |
Goodwill, ending balance | $ 454,394 | $ 478,845 |
Goodwill And Intangible Asset48
Goodwill And Intangible Assets (Schedule Of Intangible Assets) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 |
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 689,915 | $ 688,894 | $ 560,331 |
Accumulated Amortization | (272,906) | (256,752) | (212,441) |
Net | 417,009 | 432,142 | 347,890 |
Tax Services [Member] | Reacquired Franchise Rights [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 294,918 | 294,647 | 233,749 |
Accumulated Amortization | (51,233) | (46,180) | (29,152) |
Net | 243,685 | 248,467 | 204,597 |
Tax Services [Member] | Customer Relationships [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 169,998 | 170,851 | 123,130 |
Accumulated Amortization | (83,471) | (78,157) | (62,514) |
Net | 86,527 | 92,694 | 60,616 |
Tax Services [Member] | Software and Software Development Costs [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 120,522 | 118,865 | 104,580 |
Accumulated Amortization | (84,215) | (80,689) | (75,243) |
Net | 36,307 | 38,176 | 29,337 |
Tax Services [Member] | Noncompete Agreements [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 30,576 | 30,630 | 24,697 |
Accumulated Amortization | (24,091) | (23,666) | (22,408) |
Net | 6,485 | 6,964 | 2,289 |
Tax Services [Member] | Franchise Agreements | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 19,201 | 19,201 | 19,201 |
Accumulated Amortization | (8,534) | (8,214) | (7,254) |
Net | 10,667 | 10,987 | 11,947 |
Tax Services [Member] | Purchased Technology | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 54,700 | 54,700 | 54,974 |
Accumulated Amortization | (21,362) | (19,846) | (15,870) |
Net | $ 33,338 | $ 34,854 | $ 39,104 |
Fair Value (Assets Remeasured A
Fair Value (Assets Remeasured At Fair Value On Non-Recurring Basis) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Non-Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loss, Impaired mortgage loans held for investment | $ (88) | $ (842) |
Non-Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired mortgage loans held for investment | $ 0 | $ 0 |
As a percentage of total assets | 0.00% | 0.00% |
Non-Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired mortgage loans held for investment | $ 0 | $ 0 |
As a percentage of total assets | 0.00% | 0.00% |
Non-Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired mortgage loans held for investment | $ 57,951 | $ 59,635 |
As a percentage of total assets | 1.60% | 1.50% |
Total | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired mortgage loans held for investment | $ 57,951 | $ 59,635 |
As a percentage of total assets | 1.60% | 1.50% |
Fair Value (Quantitative Inform
Fair Value (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Jul. 31, 2015 - USD ($) $ in Thousands | Total |
Collateral-Based | Impaired Mortgage Loans Held For Investment - Non TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Time to sell (in months) | 12 months |
Collateral-Based | Impaired Mortgage Loans Held For Investment - TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Fair value | $ 29,925 |
Collateral-Based | Minimum | Impaired Mortgage Loans Held For Investment - Non TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Cost to list/sell | 0.00% |
Loss severity | 0.00% |
Collateral depreciation | (128.00%) |
Collateral-Based | Maximum | Impaired Mortgage Loans Held For Investment - Non TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Cost to list/sell | 171.00% |
Loss severity | 100.00% |
Collateral depreciation | 100.00% |
Collateral-Based | Weighted Average | Impaired Mortgage Loans Held For Investment - Non TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Cost to list/sell | 10.00% |
Loss severity | 61.00% |
Time to sell (in months) | 12 months |
Collateral depreciation | 32.00% |
Discounted Cash Flow | Impaired Mortgage Loans Held For Investment - Non TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Fair value | $ 68,368 |
Discounted Cash Flow | Minimum | Impaired Mortgage Loans Held For Investment - TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Loss severity | 0.00% |
Aged default performance | 23.00% |
Discounted Cash Flow | Maximum | Impaired Mortgage Loans Held For Investment - TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Loss severity | 23.00% |
Aged default performance | 36.00% |
Discounted Cash Flow | Weighted Average | Impaired Mortgage Loans Held For Investment - TDRs | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Loss severity | 7.00% |
Aged default performance | 29.00% |
Fair Value Fair Value (Summary
Fair Value Fair Value (Summary Of Carrying Amounts And Estimated Fair Values Of Company's Financial Instruments) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | Apr. 30, 2014 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Cash & cash equivalents | $ 1,299,382 | $ 2,007,190 | $ 1,429,489 | $ 2,185,307 |
Cash and cash equivalents, Estimated Fair Value | 1,299,382 | 2,007,190 | ||
Cash and cash equivalents - restricted, Carrying Amount | 61,040 | 91,972 | 71,917 | |
Cash and cash equivalents - restricted, Estimated Fair Value | 61,040 | 91,972 | ||
Receivables, net | 103,194 | 167,964 | 122,315 | |
Receivables, net - short-term, Estimated Fair Value | 103,194 | 167,964 | ||
Mortgage loans held for investment, less allowance for loan losses of $7,659, $10,561 and $7,886 | 230,130 | 239,338 | 259,732 | |
Loans Receivable, Fair Value Disclosure | 184,277 | 190,196 | ||
Investments in available-for-sale securities, Estimated Fair Value | 407,426 | 441,709 | 408,063 | |
Accounts Receivable, Net, Noncurrent | 72,427 | 80,867 | 101,146 | |
Receivables, net - long-term, Estimated Fair Value | 72,427 | 80,867 | 101,146 | |
Total Portfolio | 235,848 | 245,216 | 268,087 | |
Deposits, Estimated Fair Value | 473,720 | 737,261 | 480,729 | |
Long-term Debt | 505,996 | 506,088 | ||
Long-term borrowings, Estimated Fair Value | 552,431 | 556,769 | ||
Contingent consideration payments, carrying amount | 10,650 | 10,667 | ||
Contingent consideration payments, estimated fair value | 10,650 | 10,667 | ||
Level 1 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Cash and cash equivalents, Estimated Fair Value | 1,429,489 | |||
Cash and cash equivalents - restricted, Estimated Fair Value | 71,917 | |||
Receivables, net - short-term, Estimated Fair Value | 122,315 | |||
Level 3 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Loans Receivable, Fair Value Disclosure | 193,920 | |||
Long-term Debt | 906,419 | |||
Long-term borrowings, Estimated Fair Value | 965,650 | |||
Contingent consideration payments, carrying amount | 9,168 | |||
Contingent consideration payments, estimated fair value | 9,168 | |||
Level 2 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Investments in available-for-sale securities, Estimated Fair Value | 408,063 | |||
HRB Bank [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Deposits, Carrying Amount | $ 477,145 | $ 744,699 | $ 483,477 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits | $ 76,500 | $ 128,100 | $ 86,300 |
Unrecognized Tax Benefits, Period Increase (Decrease) | 9,800 | 16,600 | |
Effect of anticipated settlements of audit issues and expiring statutes of limitations | 15,000 | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 8,700 | ||
Accrued income taxes | $ 245,541 | $ 284,038 | $ 434,684 |
Effective tax rate, excluding discrete tax items | 37.40% | 38.10% | |
Effective Income Tax Rate Reconciliation, Percent | 48.40% | 38.10% | |
Net Discreet Tax Expense (Benefit) | $ 20,600 | $ 100 |
Interest Income And Interest 53
Interest Income And Interest Expense (Schedule Of Interest Income And Expense Of Continuing Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Income | $ 8,378 | $ 9,299 |
Interest expense on borrowings | 8,575 | 13,795 |
Interest expense | 8,711 | 13,940 |
Mortgage Loans, Net | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Income | 2,812 | 2,978 |
Loans to franchisees | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Income | 1,654 | 2,071 |
AFS Securities | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Income | 2,058 | 2,270 |
Other | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Income | 1,854 | 1,980 |
Borrowings | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest expense on borrowings | 8,575 | 13,795 |
Deposits | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Expense, Deposits | $ 136 | $ 145 |
Commitments And Contingencies54
Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | Apr. 30, 2014 | |
Commitments And Contingencies [Line Items] | ||||
Standard guarantee accrual amount | $ 7,600 | $ 10,600 | $ 8,400 | |
Contingent business acquisition obligations | 10,650 | 10,667 | ||
Lines of credit, total obligation | 77,400 | |||
Remaining franchise equity lines of credit-undrawn commitment | 38,800 | |||
Financing Receivables, Line of Credit Facility, Compensating Balances | 225,000 | |||
Amounts deferred for new extended service plans issued | 920 | 873 | ||
Deferred Revenue, Revenue Recognized | 27,703 | 24,253 | ||
Deferred Revenue | 131,386 | 121,857 | $ 158,169 | $ 145,237 |
Level 3 | ||||
Commitments And Contingencies [Line Items] | ||||
Contingent business acquisition obligations | $ 9,168 | |||
Peace of Mind Franchise [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Amounts deferred for new extended service plans issued | 100 | |||
Deferred Revenue, Revenue Recognized | 3,400 | |||
Deferred Revenue | $ 28,300 |
Commitments And Contingencies55
Commitments And Contingencies (Schedule Of Deferred Revenue Related To The Peace Of Mind Program) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Movement in Deferred Revenue [Roll Forward] | ||
Balance, beginning of the period | $ 158,169 | $ 145,237 |
Amounts deferred for new extended service plans issued | 920 | 873 |
Revenue recognized on previous deferrals | (27,703) | (24,253) |
Balance, end of the period | $ 131,386 | $ 121,857 |
Litigation And Related Contin56
Litigation And Related Contingencies (Details) $ in Millions | 35 Months Ended | |||||
Nov. 30, 2007transaction | Jul. 31, 2015USD ($) | Apr. 30, 2015USD ($)lawsuit | Jul. 31, 2014USD ($) | Apr. 05, 2013loan | Oct. 15, 2010USD ($) | |
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual | $ 9.3 | $ 8.9 | $ 23.7 | |||
Number of loans sold to trust | loan | 159 | |||||
Securitization Transactions | transaction | 38 | |||||
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Number Of Lawsuits | lawsuit | 20 | |||||
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] | SCC [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Estimated Litigation Liability | $ 14,000 | |||||
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] | SCC [Member] | Claims with Knowledge of Outstanding Principal Amount [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Estimated Litigation Liability | $ 4,000 | |||||
Pending Litigation [Member] | ederal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Initial principal on loans securitized | $ 50 | |||||
Principal outstanding on loans securitized | $ 32 |
Loss Contingencies Arising Fr57
Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations (Narrative) (Details) - USD ($) $ in Thousands | 36 Months Ended | 48 Months Ended | 60 Months Ended | ||||
Apr. 30, 2007 | Apr. 30, 2012 | Apr. 30, 2013 | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | Apr. 30, 2014 | |
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 | $ 9,300 | $ 8,900 | $ 23,700 | ||||
Principal Assets of SCC | 480,000 | ||||||
SCC [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency Accrual, Product Liability, Gross | $ 149,765 | $ 149,765 | $ 193,765 | $ 183,765 |
Loss Contingencies Arising Fr58
Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | Apr. 30, 2014 | |
Loss Contingency Accrual [Roll Forward] | ||||
Provisions | $ 9,300 | $ 23,700 | ||
SCC [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency Accrual, Product Liability, Gross | 149,765 | 193,765 | $ 149,765 | $ 183,765 |
Loss Contingency Accrual [Roll Forward] | ||||
Payments | 0 | 0 | ||
Balance, end of the period | $ 0 | $ 10,000 |
Segment Information (Continuing
Segment Information (Continuing Operations By Reportable Operating Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Segment Reporting Information [Line Items] | ||
Total revenues | $ 137,718 | $ 133,586 |
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES : | (187,109) | (175,816) |
Corporate And Eliminations [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 5,144 | 4,506 |
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES : | (17,671) | (25,256) |
Tax Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 132,574 | 129,080 |
LOSS FROM CONTINUING OPERATIONS BEFORE TAXES : | (169,438) | (150,560) |
Tax Services [Member] | U.S. Assisted [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 27,285 | 25,489 |
Tax Services [Member] | International [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 35,718 | 41,456 |
Tax Services [Member] | U.S. Digital [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 3,179 | 2,932 |
Tax Services [Member] | Tax preparation fees [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 66,182 | 69,877 |
Tax Services [Member] | Note receivable | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 9,695 | 7,642 |
Tax Services [Member] | Refund Transfer fees [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 3,415 | 3,419 |
Tax Services [Member] | Emerald Card fees [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 15,689 | 14,045 |
Tax Services [Member] | Peace of Mind fees [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 27,703 | 24,253 |
Tax Services [Member] | Emerald Advance lines of credit | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 314 | 607 |
Tax Services [Member] | Other revenue [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenues | $ 9,576 | $ 9,237 |
Condensed Consolidating Finan60
Condensed Consolidating Financial Statements (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | $ 433 | $ 523 |
Total revenues | 137,718 | 133,586 |
Cost of revenues | 213,508 | 197,726 |
Selling, general and administrative | 98,192 | 97,200 |
Total operating expenses | 311,700 | 294,926 |
Interest expense on borrowings | (8,575) | (13,795) |
Other income | (4,985) | (1,204) |
Loss from continuing operations before income tax benefit | (187,109) | (175,816) |
Income tax benefit | (90,604) | (66,965) |
Net loss from continuing operations | (96,505) | (108,851) |
Net loss from discontinued operations | (3,154) | (7,381) |
Net loss | (99,659) | (116,232) |
Other comprehensive income (loss) | (9,974) | 306 |
Comprehensive loss | (109,633) | (115,926) |
Block Financial Issuer [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | 495 | 1,006 |
Total revenues | 24,767 | 23,860 |
Cost of revenues | 11,755 | 11,808 |
Selling, general and administrative | 4,376 | 3,343 |
Total operating expenses | 16,131 | 15,151 |
Interest expense on borrowings | (8,436) | (13,693) |
Other income | (468) | (1,842) |
Loss from continuing operations before income tax benefit | 227 | (5,820) |
Income tax benefit | 3,286 | (2,643) |
Net loss from continuing operations | (3,059) | (3,177) |
Net loss from discontinued operations | (3,154) | (7,209) |
Net loss | (6,213) | (10,386) |
Other comprehensive income (loss) | (1,187) | (121) |
Comprehensive loss | (7,400) | (10,507) |
Subsidiaries [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | 554 | 659 |
Total revenues | 113,044 | 109,809 |
Cost of revenues | 201,846 | 185,998 |
Selling, general and administrative | 93,816 | 93,860 |
Total operating expenses | 295,662 | 279,858 |
Interest expense on borrowings | (139) | (102) |
Other income | (12,255) | (1,730) |
Loss from continuing operations before income tax benefit | (194,458) | (171,222) |
Income tax benefit | (91,865) | (61,561) |
Net loss from continuing operations | (102,593) | (109,661) |
Net loss from discontinued operations | (172) | |
Net loss | (102,593) | (109,833) |
Other comprehensive income (loss) | (9,974) | 306 |
Comprehensive loss | (112,567) | (109,527) |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | 909 | 1,226 |
Interest expense on borrowings | 0 | 0 |
Other income | (102,593) | (120,219) |
Loss from continuing operations before income tax benefit | (101,684) | (118,993) |
Income tax benefit | (2,025) | (2,761) |
Net loss from continuing operations | (99,659) | (116,232) |
Net loss from discontinued operations | 0 | |
Net loss | (99,659) | (116,232) |
Other comprehensive income (loss) | (9,974) | 306 |
Comprehensive loss | (109,633) | (115,926) |
Intersegment Eliminations [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | (1,525) | (2,368) |
Total revenues | (93) | (83) |
Cost of revenues | (93) | (80) |
Selling, general and administrative | (3) | |
Total operating expenses | (93) | (83) |
Interest expense on borrowings | 0 | 0 |
Other income | 110,331 | 122,587 |
Loss from continuing operations before income tax benefit | 108,806 | 120,219 |
Net loss from continuing operations | 108,806 | 120,219 |
Net loss | 108,806 | 120,219 |
Other comprehensive income (loss) | 11,161 | (185) |
Comprehensive loss | $ 119,967 | $ 120,034 |
Condensed Consolidating Finan61
Condensed Consolidating Financial Statements (Balance Sheets) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Apr. 30, 2015 | Jul. 31, 2014 | Apr. 30, 2014 |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | $ 1,299,382 | $ 2,007,190 | $ 1,429,489 | $ 2,185,307 |
Cash and cash equivalents - restricted | 61,040 | 91,972 | 71,917 | |
Receivables, net | 103,194 | 167,964 | 122,315 | |
Deferred Tax Assets, Net, Current | 160,390 | 174,267 | 190,323 | |
Prepaid expenses and other current assets | 80,993 | 70,283 | 74,343 | |
Investments in available-for-sale securities | 406,360 | 439,625 | 403,774 | |
Total current assets | 2,111,359 | 2,951,301 | 2,292,161 | |
Mortgage loans held for investment, net | 230,130 | 239,338 | 259,732 | |
Property and equipment, at cost less accumulated depreciation and amortization of $538,823, $468,372 and $518,797 | 297,321 | 311,387 | 314,531 | |
Intangible assets, net | 417,009 | 432,142 | 347,890 | |
Goodwill | 454,394 | 441,831 | 478,845 | 436,117 |
Deferred tax assets and income taxes receivable | 11,377 | 13,461 | 46,953 | |
Amounts due from affiliates | 0 | 0 | 0 | |
Other assets | 111,101 | 125,960 | 150,707 | |
Total assets | 3,632,691 | 4,515,420 | 3,890,819 | |
Customer deposits | 476,732 | 744,241 | 482,975 | |
Accounts payable and accrued expenses | 116,855 | 231,322 | 127,912 | |
Accrued salaries, wages and payroll taxes | 33,447 | 144,744 | 30,996 | |
Accrued income taxes | 245,541 | 434,684 | 284,038 | |
Current portion of long-term debt | 799 | 790 | 400,705 | |
Accounts payable and accrued expenses | 316,880 | 322,508 | 357,293 | |
Total current liabilities | 1,190,254 | 1,878,289 | 1,683,919 | |
Long-term debt | 505,197 | 505,298 | 505,714 | |
Deferred tax liabilities and reserves for uncertain tax positions | 137,603 | 142,586 | 167,914 | |
Deferred revenue and other noncurrent liabilities | 130,210 | 156,298 | 136,072 | |
Total liabilities | 1,963,264 | 2,682,471 | 2,493,619 | |
Stockholders’ equity | 1,669,427 | 1,832,949 | 1,397,200 | |
Total liabilities and stockholders' equity | 3,632,691 | 4,515,420 | 3,890,819 | |
Block Financial Issuer [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | 286,165 | 478,077 | 405,512 | 612,376 |
Cash and cash equivalents - restricted | 11,806 | 45,098 | 12,817 | |
Receivables, net | 77,539 | 80,332 | 86,968 | |
Deferred Tax Assets, Net, Current | 78,184 | 77,418 | 98,041 | |
Prepaid expenses and other current assets | 6,817 | 7,771 | 9,684 | |
Investments in available-for-sale securities | 404,221 | 434,924 | 403,674 | |
Total current assets | 864,732 | 1,123,620 | 1,016,696 | |
Mortgage loans held for investment, net | 230,130 | 239,338 | 259,732 | |
Property and equipment, at cost less accumulated depreciation and amortization of $538,823, $468,372 and $518,797 | 210 | 218 | 209 | |
Deferred tax assets and income taxes receivable | 41,328 | 44,788 | 46,752 | |
Amounts due from affiliates | 131,889 | 134,094 | 322,339 | |
Other assets | 72,009 | 81,075 | 103,178 | |
Total assets | 1,340,298 | 1,623,133 | 1,748,906 | |
Customer deposits | 477,222 | 744,681 | 483,405 | |
Accounts payable and accrued expenses | 6,679 | 7,672 | 4,639 | |
Accrued salaries, wages and payroll taxes | 2,293 | 1,946 | 2,129 | |
Accrued income taxes | 49,240 | 49,529 | 30,944 | |
Current portion of long-term debt | 399,941 | |||
Accounts payable and accrued expenses | 169,900 | 177,063 | 220,324 | |
Total current liabilities | 705,334 | 980,891 | 1,141,382 | |
Long-term debt | 497,964 | 497,893 | 497,682 | |
Deferred tax liabilities and reserves for uncertain tax positions | 26,737 | 25,696 | 57,242 | |
Deferred revenue and other noncurrent liabilities | 1,660 | 1,783 | 2,216 | |
Amounts due to affiliates | 21 | |||
Total liabilities | 1,231,716 | 1,506,263 | 1,698,522 | |
Stockholders’ equity | 108,582 | 116,870 | 50,384 | |
Total liabilities and stockholders' equity | 1,340,298 | 1,623,133 | 1,748,906 | |
Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | 1,013,707 | 1,529,553 | 1,024,407 | 1,574,031 |
Cash and cash equivalents - restricted | 49,234 | 46,874 | 59,100 | |
Receivables, net | 25,654 | 87,632 | 35,332 | |
Deferred Tax Assets, Net, Current | 82,206 | 96,849 | 92,265 | |
Prepaid expenses and other current assets | 74,176 | 62,512 | 64,659 | |
Investments in available-for-sale securities | 2,139 | 4,701 | 100 | |
Total current assets | 1,247,116 | 1,828,121 | 1,275,863 | |
Property and equipment, at cost less accumulated depreciation and amortization of $538,823, $468,372 and $518,797 | 297,111 | 311,169 | 314,322 | |
Intangible assets, net | 417,009 | 432,142 | 347,890 | |
Goodwill | 454,394 | 441,831 | 478,845 | |
Deferred tax assets and income taxes receivable | (3,194) | |||
Investments in subsidiaries | 108,582 | 116,870 | 50,384 | |
Amounts due from affiliates | 1,423 | 1,058 | 983 | |
Other assets | 39,092 | 44,885 | 47,529 | |
Total assets | 2,564,727 | 3,176,076 | 2,512,622 | |
Accounts payable and accrued expenses | 108,970 | 222,546 | 122,427 | |
Accrued salaries, wages and payroll taxes | 31,154 | 142,798 | 28,867 | |
Accrued income taxes | 196,301 | 385,155 | 253,094 | |
Current portion of long-term debt | 799 | 790 | 764 | |
Accounts payable and accrued expenses | 146,980 | 145,445 | 136,969 | |
Total current liabilities | 484,204 | 896,734 | 542,121 | |
Long-term debt | 7,233 | 7,405 | 8,032 | |
Deferred tax liabilities and reserves for uncertain tax positions | 140,817 | 148,217 | 105,277 | |
Deferred revenue and other noncurrent liabilities | 128,550 | 154,515 | 133,856 | |
Amounts due to affiliates | 544,813 | 597,528 | 938,917 | |
Total liabilities | 1,305,617 | 1,804,399 | 1,728,203 | |
Stockholders’ equity | 1,259,110 | 1,371,677 | 784,419 | |
Total liabilities and stockholders' equity | 2,564,727 | 3,176,076 | 2,512,622 | |
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Receivables, net | 1 | 15 | ||
Deferred Tax Assets, Net, Current | 17 | |||
Total current assets | 1 | 32 | ||
Deferred tax assets and income taxes receivable | 3,395 | |||
Investments in subsidiaries | 1,259,110 | 1,371,677 | 784,419 | |
Amounts due from affiliates | 412,924 | 463,434 | 616,578 | |
Total assets | 1,672,035 | 1,835,111 | 1,404,424 | |
Accounts payable and accrued expenses | 1,206 | 1,104 | 846 | |
Total current liabilities | 1,206 | 1,104 | 846 | |
Deferred tax liabilities and reserves for uncertain tax positions | 5,395 | |||
Amounts due to affiliates | 1,402 | 1,058 | 983 | |
Total liabilities | 2,608 | 2,162 | 7,224 | |
Stockholders’ equity | 1,669,427 | 1,832,949 | 1,397,200 | |
Total liabilities and stockholders' equity | 1,672,035 | 1,835,111 | 1,404,424 | |
Intersegment Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | (490) | (440) | (430) | $ (1,100) |
Total current assets | (490) | (440) | (430) | |
Deferred tax assets and income taxes receivable | (29,951) | (31,327) | ||
Investments in subsidiaries | (1,367,692) | (1,488,547) | (834,803) | |
Amounts due from affiliates | (546,236) | (598,586) | (939,900) | |
Total assets | (1,944,369) | (2,118,900) | (1,775,133) | |
Customer deposits | (490) | (440) | (430) | |
Total current liabilities | (490) | (440) | (430) | |
Deferred tax liabilities and reserves for uncertain tax positions | (29,951) | (31,327) | ||
Amounts due to affiliates | (546,236) | (598,586) | (939,900) | |
Total liabilities | (576,677) | (630,353) | (940,330) | |
Stockholders’ equity | (1,367,692) | (1,488,547) | (834,803) | |
Total liabilities and stockholders' equity | $ (1,944,369) | $ (2,118,900) | $ (1,775,133) |
Condensed Consolidating Finan62
Condensed Consolidating Financial Statements (Cash Flows) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | Apr. 30, 2014 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by (used in) operating activities: | $ (378,246) | $ (381,585) | ||
Maturities of and payments received on AFS securities | 32,103 | 18,484 | ||
Principal payments on mortgage loans held for investment, net | 8,537 | 6,250 | ||
Capital expenditures | (8,689) | (25,841) | ||
Payments made for business acquisitions, net of cash acquired | (12,271) | (40,533) | ||
Loans made to franchisees | (2,582) | (7,398) | ||
Repayments from franchisees | 11,434 | 18,674 | ||
Other, net | 3,562 | 4,030 | ||
Net cash provided by (used in) investing activities | 32,094 | (26,334) | ||
Customer banking deposits, net | (268,532) | (287,609) | ||
Dividends paid | (55,063) | (54,852) | ||
Payments for repurchase of common stock, including shares surrendered | 17,756 | 9,397 | ||
Proceeds from exercise of stock options | 13,015 | 13,368 | ||
Other, net | (22,413) | (9,919) | ||
Net cash used in financing activities | (350,749) | (348,409) | ||
Effects of exchange rates on cash | (10,907) | 510 | ||
Net decrease in cash and cash equivalents | (707,808) | (755,818) | ||
Cash & cash equivalents | 1,299,382 | 1,429,489 | $ 2,007,190 | $ 2,185,307 |
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Dividends paid | (55,063) | (54,852) | ||
Payments for repurchase of common stock, including shares surrendered | 17,756 | 9,397 | ||
Proceeds from exercise of stock options | 13,015 | 13,368 | ||
Intercompany borrowings | 59,804 | 50,881 | ||
Block Financial Issuer [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by (used in) operating activities: | 27,342 | (20,669) | ||
Maturities of and payments received on AFS securities | 28,339 | 18,484 | ||
Principal payments on mortgage loans held for investment, net | 8,537 | 6,250 | ||
Capital expenditures | (19) | (116) | ||
Loans made to franchisees | (2,582) | (7,398) | ||
Repayments from franchisees | 11,288 | 18,674 | ||
Intercompany payments/investments in subsidiaries | 2,226 | 64,322 | ||
Other, net | 1,439 | 1,868 | ||
Net cash provided by (used in) investing activities | 49,228 | 102,084 | ||
Customer banking deposits, net | (268,482) | (288,279) | ||
Net cash used in financing activities | (268,482) | (288,279) | ||
Net decrease in cash and cash equivalents | (191,912) | (206,864) | ||
Cash & cash equivalents | 286,165 | 405,512 | 478,077 | 612,376 |
Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash provided by (used in) operating activities: | (405,588) | (360,916) | ||
Maturities of and payments received on AFS securities | 3,764 | |||
Capital expenditures | (8,670) | (25,725) | ||
Payments made for business acquisitions, net of cash acquired | (12,271) | (40,533) | ||
Repayments from franchisees | 146 | |||
Intercompany payments/investments in subsidiaries | (59,804) | (50,881) | ||
Other, net | 2,123 | 2,162 | ||
Net cash provided by (used in) investing activities | (74,712) | (114,977) | ||
Intercompany borrowings | (2,226) | (64,322) | ||
Other, net | (22,413) | (9,919) | ||
Net cash used in financing activities | (24,639) | (74,241) | ||
Effects of exchange rates on cash | (10,907) | 510 | ||
Net decrease in cash and cash equivalents | (515,846) | (549,624) | ||
Cash & cash equivalents | 1,013,707 | 1,024,407 | 1,529,553 | 1,574,031 |
Intersegment Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Intercompany payments/investments in subsidiaries | 57,578 | (13,441) | ||
Net cash provided by (used in) investing activities | 57,578 | (13,441) | ||
Customer banking deposits, net | (50) | 670 | ||
Intercompany borrowings | (57,578) | 13,441 | ||
Net cash used in financing activities | (57,628) | 14,111 | ||
Net decrease in cash and cash equivalents | (50) | 670 | ||
Cash & cash equivalents | $ (490) | $ (430) | $ (440) | $ (1,100) |