Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jul. 31, 2016 | Aug. 31, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2016 | |
Document Fiscal Year Focus | 2,017 | |
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 | 219,093,448 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
REVENUES: | ||
Service revenues | $ 112,384 | $ 118,434 |
Royalty, product and other revenues | 12,801 | 19,284 |
Total revenues | 125,185 | 137,718 |
Cost of revenues: | ||
Compensation and benefits | 52,355 | 55,789 |
Occupancy and equipment | 94,425 | 89,855 |
Provision for bad debt and loan losses | 1,417 | 2,005 |
Depreciation and amortization | 27,467 | 27,084 |
Other | 35,422 | 38,775 |
Cost of revenues | 211,086 | 213,508 |
Selling, general and administrative: | ||
Marketing and advertising | 7,561 | 8,531 |
Compensation and benefits | 57,522 | 54,669 |
Depreciation and amortization | 13,815 | 13,010 |
Other selling, general and administrative | 19,925 | 21,982 |
Selling, general and administrative | 98,823 | 98,192 |
Total operating expenses | 309,909 | 311,700 |
Other income, net | (327) | (4,985) |
Other Nonoperating Income | 2,968 | 433 |
Interest expense on borrowings | (21,466) | (8,575) |
Loss from continuing operations before income tax benefit | (203,549) | (187,109) |
Income tax benefit | (82,523) | (90,604) |
Net loss from continuing operations | (121,026) | (96,505) |
Net loss from discontinued operations, net of tax benefits of $1,557 and $1,889 | (2,647) | (3,154) |
NET LOSS | $ (123,673) | $ (99,659) |
BASIC AND DILUTED LOSS PER SHARE: | ||
Continuing operations (in usd per share) | $ (0.55) | $ (0.35) |
Discontinued operations (in usd per share) | (0.01) | (0.01) |
Consolidated (in usd per share) | (0.56) | (0.36) |
DIVIDENDS PAID PER SHARE (in usd per share) | $ 0.22 | $ 0.20 |
COMPREHENSIVE LOSS: | ||
NET LOSS | $ (123,673) | $ (99,659) |
Unrealized gains (losses) on securities, net of taxes: | ||
Unrealized holding losses arising during the period, net of tax benefits of $5 and $875 | (11) | (1,360) |
Reclassification adjustment for gains included in income, net of taxes of $ - and $89 | 0 | 141 |
Change in foreign currency translation adjustments | (3,560) | (8,755) |
Other comprehensive loss | (3,571) | (9,974) |
Comprehensive loss | $ (127,244) | $ (109,633) |
Consolidated Statements Of Ope3
Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Income Statement [Abstract] | ||
Tax benefit on discontinued operations | $ (5) | $ 875 |
Discontinued Operation, Tax Effect of Discontinued Operation | 1,557 | 1,889 |
Marketable Securities, Realized Gain (Loss) | $ 0 | $ 89 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 |
ASSETS | |||
Cash and cash equivalents | $ 306,871 | $ 896,801 | $ 1,299,382 |
Cash and cash equivalents - restricted | 122,025 | 104,110 | 61,040 |
Receivables, less allowance for doubtful accounts of $56,381, $53,771 and $57,011 | 103,425 | 153,116 | 103,194 |
Deferred tax assets and income taxes receivable | 160,390 | ||
Prepaid expenses and other current assets | 74,929 | 65,441 | 80,550 |
Investments in available-for-sale securities | 1,123 | 1,133 | 406,360 |
Total current assets | 608,373 | 1,220,601 | 2,110,916 |
Mortgage loans held for investment, less allowance for loan losses of $5,310, $7,659 and $5,518 | 192,375 | 202,385 | 230,130 |
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120 | 284,114 | 293,565 | 297,321 |
Intangible assets, net | 419,909 | 433,885 | 417,009 |
Goodwill | 470,942 | 470,757 | 454,394 |
Deferred tax assets and income taxes receivable | 90,498 | 120,123 | 11,377 |
Other noncurrent assets | 97,331 | 105,909 | 108,307 |
Total assets | 2,163,542 | 2,847,225 | 3,629,454 |
LIABILITIES: | |||
Customer banking deposits | 476,732 | ||
Accounts payable and accrued expenses | 157,085 | 259,586 | 116,855 |
Accounts payable and accrued expenses | 191,304 | 243,653 | 316,880 |
Accrued salaries, wages and payroll taxes | 43,516 | 161,786 | 33,447 |
Accrued income taxes and reserves for uncertain tax positions | 216,390 | 373,754 | 245,541 |
Current portion of long-term debt | 864 | 826 | 799 |
Total current liabilities | 609,159 | 1,039,605 | 1,190,254 |
Long-term debt | 1,491,790 | 1,491,375 | 501,960 |
Deferred tax liabilities and reserves for uncertain tax positions | 116,709 | 132,960 | 137,603 |
Deferred revenue and other noncurrent liabilities | 145,691 | 160,182 | 130,210 |
Total liabilities | 2,363,349 | 2,824,122 | 1,960,027 |
COMMITMENTS AND CONTINGENCIES | |||
STOCKHOLDERS' EQUITY: | |||
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized, shares issued of 258,179,891, 316,628,110 and 260,218,666 | 2,582 | 2,602 | 3,166 |
Additional paid-in capital | 748,924 | 758,230 | 773,783 |
Accumulated other comprehensive loss | (14,804) | (11,233) | (8,234) |
Retained earnings (deficit) | (180,631) | 40,347 | 1,679,234 |
Less treasury shares, at cost, of 39,087,239, 40,312,382 and 39,701,409 | (755,878) | (766,843) | (778,522) |
Total stockholders' equity (deficiency) | (199,807) | 23,103 | 1,669,427 |
Total liabilities and stockholders' equity | $ 2,163,542 | $ 2,847,225 | $ 3,629,454 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 |
Statement of Financial Position [Abstract] | |||
Treasury Stock, Shares | 39,087,239 | 39,701,409 | 40,312,382 |
Allowance for doubtful accounts | $ 56,381 | $ 57,011 | $ 53,771 |
Allowance for loan losses | 5,310 | 5,518 | 7,659 |
Accumulated depreciation and amortization | $ 622,937 | $ 601,120 | $ 538,823 |
Common stock, no par value | $ 0 | $ 0 | $ 0 |
Common stock, stated value per share | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 |
Common stock, shares issued | 258,179,891 | 260,218,666 | 316,628,110 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Statement of Cash Flows [Abstract] | ||
NET CASH USED IN OPERATING ACTIVITIES | $ (475,675) | $ (378,246) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Maturities of and payments received on available-for-sale securities | 58 | 32,103 |
Principal payments on mortgage loans held for investment, net | 8,427 | 8,537 |
Purchases of property and equipment | (6,246) | (8,689) |
Payments made for business acquisitions, net of cash acquired | (1,635) | (12,271) |
Franchise loans: | ||
Loans funded | (2,219) | (2,582) |
Payments received | 6,473 | 11,434 |
Other, net | 220 | 3,562 |
Net cash provided by (used in) investing activities | 5,078 | 32,094 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Customer banking deposits, net | 0 | (268,532) |
Dividends paid | (48,514) | (55,063) |
Repurchase of common stock, including shares surrendered | (45,312) | (17,756) |
Proceeds from exercise of stock options | 1,639 | 13,015 |
Other, net | (24,779) | (22,413) |
Net cash used in financing activities | (116,966) | (350,749) |
Effects of exchange rates on cash | (2,367) | (10,907) |
Net decrease in cash and cash equivalents | (589,930) | (707,808) |
Cash and cash equivalents at beginning of the period | 896,801 | 2,007,190 |
Cash and cash equivalents at end of the period | 306,871 | 1,299,382 |
SUPPLEMENTARY CASH FLOW DATA: | ||
Income taxes paid, net of refunds received | 61,289 | 75,358 |
Interest paid on borrowings | 15,519 | 15,381 |
Accrued additions to property and equipment | 10,147 | 5,977 |
Accrued Purchase Of Common Stock | $ 8,895 | $ 0 |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION – The consolidated balance sheets as of July 31, 2016 and 2015 , the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2016 and 2015 , and the condensed consolidated statements of cash flows for the three months ended July 31, 2016 and 2015 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows as of July 31, 2016 and 2015 and for all periods presented have been made. "H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and its subsidiaries, as appropriate to the context. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U. S. (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our April 30, 2016 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2016 or for the year then ended are derived from our April 30, 2016 Annual Report to Shareholders on Form 10-K. MANAGEMENT ESTIMATES – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, valuation allowances on deferred tax assets, reserves for uncertain tax positions and related matters. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates. SEASONALITY OF BUSINESS – Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of January through April. Therefore, results for interim periods are not indicative of results to be expected for the full year. DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See notes 11 and 12 for additional information on litigation, claims and other loss contingencies related to our discontinued operations. NEW ACCOUNTING PRONOUNCEMENTS – In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance must be applied retrospectively to all periods presented. We adopted this guidance effective May 1, 2016. Prior periods have been retrospectively adjusted to conform to the current period presentation. Debt issuance costs previously reported as other current assets and other noncurrent assets have been reclassified to long-term debt. This guidance did not have a material effect on our consolidated financial statements. |
Loss Per Share and Stockholders
Loss Per Share and Stockholders' Equity | 3 Months Ended |
Jul. 31, 2016 | |
Earnings Per Share [Abstract] | |
Loss Per Share and Stockholders' Equity | NOTE 2: LOSS PER SHARE AND STOCKHOLDERS' EQUITY LOSS PER SHARE – Basic and diluted loss per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. The dilutive effect of potential common shares is included in diluted earnings per share except in those periods with a loss from continuing operations. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 4.7 million shares for the three months ended July 31, 2016 , and 5.0 million shares for the three months ended July 31, 2015 , as the effect would be antidilutive due to the net loss from continuing operations during those periods. The computations of basic and diluted earnings per share from continuing operations are as follows: (in 000s, except per share amounts) Three months ended July 31, 2016 2015 Net loss from continuing operations attributable to shareholders $ (121,026 ) $ (96,505 ) Amounts allocated to participating securities (124 ) (102 ) Net loss from continuing operations attributable to common shareholders $ (121,150 ) $ (96,607 ) Basic weighted average common shares 220,484 275,765 Potential dilutive shares — — Dilutive weighted average common shares 220,484 275,765 Loss per share from continuing operations attributable to common shareholders: Basic $ (0.55 ) $ (0.35 ) Diluted (0.55 ) (0.35 ) The weighted average shares outstanding for the three months ended July 31, 2016 decreased to 220.5 million from 275.8 million for the three months ended July 31, 2015 , primarily due to share repurchases completed in the prior and current year. During the three months ended July 31, 2016 , we purchased and immediately retired 2.0 million shares at an aggregate cost of $48.6 million (average price of $23.84 per share). The cost of shares retired during the current period was allocated to the components of stockholders’ equity as follows: (in 000s) Common stock $ 20 Additional paid-in-capital 1,223 Retained earnings 47,351 Total $ 48,594 STOCK-BASED COMPENSATION – In addition to the shares repurchased as discussed above, during the three months ended July 31, 2016 , we acquired 0.2 million shares of our common stock at an aggregate cost of $5.6 million . These shares represent shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards. During the three months ended July 31, 2015 , we acquired 0.6 million shares at an aggregate cost of $17.8 million for similar purposes. During the three months ended July 31, 2016 and 2015 , we issued 0.9 million and 1.6 million shares of common stock, respectively, due to the vesting or exercise of stock-based awards. During the three months ended July 31, 2016 , we granted equity awards equivalent to 1.1 million shares under our stock-based compensation plans, consisting primarily of nonvested units. Nonvested units generally either vest over a three-year period with one-third vesting each year or cliff vest at the end of a three-year period, although the Compensation Committee may in limited circumstances approve grants with a modified vesting schedule. Stock-based compensation expense of our continuing operations totaled $5.5 million and $6.0 million for the three months ended July 31, 2016 and 2015 , respectively. As of July 31, 2016 , unrecognized compensation cost for stock options totaled $0.5 million , and for nonvested shares and units totaled $48.7 million . |
Receivables
Receivables | 3 Months Ended |
Jul. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract] | |
Receivables | NOTE 3: RECEIVABLES Receivables consist of the following: (in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Short-term Long-term Short-term Long-term Short-term Long-term Loans to franchisees $ 47,905 $ 46,461 $ 56,277 $ 57,792 $ 50,000 $ 46,284 Receivables for tax preparation and related fees 39,115 5,528 39,927 6,103 52,327 5,528 Cash Back® receivables 4,515 — 2,777 — 37,663 — Emerald Advance lines of credit 24,857 111 20,321 598 25,092 869 Royalties from franchisees 6,885 — 4,509 — 9,997 — Other 36,529 4,414 33,154 7,934 35,048 7,726 159,806 56,514 156,965 72,427 210,127 60,407 Allowance for doubtful accounts (56,381 ) — (53,771 ) — (57,011 ) — $ 103,425 $ 56,514 $ 103,194 $ 72,427 $ 153,116 $ 60,407 Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets. LOANS TO FRANCHISEES – Franchisee loan balances as of July 31, 2016 and 2015 and April 30, 2016 , consisted of $31.5 million , $38.4 million and $35.1 million , respectively, in revolving lines of credit primarily for the purpose of funding off-season working capital needs and $62.8 million , $75.7 million and $61.2 million , respectively, in term loans made primarily to finance the purchase of franchises. As of July 31, 2016 and 2015 and April 30, 2016 , loans with a principal balance of $2.6 million , $1.5 million and $0.3 million , respectively, were more than 30 days past due. We had no loans to franchisees on non-accrual status. CANADIAN CASH BACK® PROGRAM – Refunds advanced under the Cash Back program are not subject to credit approval, therefore the primary indicator of credit quality is the age of the receivable amount. Cash Back amounts are generally received within 60 days of filing the client's return. As of July 31, 2016 and 2015 and April 30, 2016 , $0.6 million , $0.6 million and $1.5 million of Cash Back balances were more than 60 days old, respectively. H&R BLOCK EMERALD ADVANCE® LINES OF CREDIT – Beginning in fiscal year 2016, we no longer originate H&R Block Emerald Advance® lines of credit (EAs). These lines of credit are originated by BofI Federal Bank, a federal savings bank (BofI), and we purchase a participation interest in them. We review the credit quality of our EA receivables based on pools, which are segregated by the year of origination, with older years being deemed more unlikely to be repaid. These amounts as of July 31, 2016 , by year of origination, are as follows: (in 000s) Credit Quality Indicator – Year of origination: 2016 $ 9,224 2015 and prior 182 Revolving loans 15,562 $ 24,968 As of July 31, 2016 and 2015 and April 30, 2016 , $21.4 million , $17.4 million and $21.1 million of EAs were on non-accrual status and classified as impaired, or more than 60 days past due, respectively. ALLOWANCE FOR DOUBTFUL ACCOUNTS – Activity in the allowance for doubtful accounts for our receivables for the three months ended July 31, 2016 and 2015 is as follows: (in 000s) EAs All Other Total Balances as of May 1, 2016 $ 9,007 $ 48,004 $ 57,011 Provision 451 966 1,417 Charge-offs — (2,047 ) (2,047 ) Balances as of July 31, 2016 $ 9,458 $ 46,923 $ 56,381 Balances as of May 1, 2015 $ 7,353 $ 47,174 $ 54,527 Provision — 713 713 Charge-offs — (1,469 ) (1,469 ) Balances as of July 31, 2015 $ 7,353 $ 46,418 $ 53,771 |
Mortgage Loans Held For Investm
Mortgage Loans Held For Investment And Related Assets | 3 Months Ended |
Jul. 31, 2016 | |
Mortgage Loans Held For Investment And Related Assets [Abstract] | |
Mortgage Loans Held For Investment And Related Assets | NOTE 4: MORTGAGE LOANS HELD FOR INVESTMENT The composition of our mortgage loan portfolio is as follows: (dollars in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Amount % of Total Amount % of Total Amount % of Total Adjustable-rate loans $ 102,535 52 % $ 124,752 53 % $ 108,251 52 % Fixed-rate loans 93,539 48 % 111,096 47 % 97,957 48 % 196,074 100 % 235,848 100 % 206,208 100 % Unamortized deferred fees and costs 1,611 1,941 1,695 Less: Allowance for loan losses (5,310 ) (7,659 ) (5,518 ) $ 192,375 $ 230,130 $ 202,385 Our loan loss allowance as a percent of mortgage loans was 2.7% as of July 31, 2016 , compared to 3.2% as of July 31, 2015 and 2.7% as of April 30, 2016 . Activity in the allowance for loan losses for the three months ended July 31, 2016 and 2015 is as follows: (in 000s) Three months ended July 31, 2016 2015 Balance at beginning of the period $ 5,518 $ 7,886 Provision — (28 ) Recoveries 370 365 Charge-offs (578 ) (564 ) Balance at end of the period $ 5,310 $ 7,659 Detail of the aging of the mortgage loans in our portfolio as of July 31, 2016 is as follows: (in 000s) Less than 60 Days Past Due 60 – 89 Days Past Due 90+ Days Past Due (1) Total Past Due Current Total Purchased from SCC $ 8,849 $ 745 $ 38,503 $ 48,097 $ 68,392 $ 116,489 All other 1,457 349 5,236 7,042 72,543 79,585 $ 10,306 $ 1,094 $ 43,739 $ 55,139 $ 140,935 $ 196,074 (1) We do not accrue interest on loans past due 90 days or more. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets | 3 Months Ended |
Jul. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Intangible Assets | NOTE 5: GOODWILL AND INTANGIBLE ASSETS Changes in the carrying amount of goodwill for the three months ended July 31, 2016 and 2015 are as follows: (in 000s) Goodwill Accumulated Impairment Losses Net Balances as of April 30, 2016 $ 503,054 $ (32,297 ) $ 470,757 Acquisitions 23 — 23 Disposals and foreign currency changes, net 162 — 162 Impairments — — — Balances as of July 31, 2016 $ 503,239 $ (32,297 ) $ 470,942 Balances as of April 30, 2015 $ 474,128 $ (32,297 ) $ 441,831 Acquisitions 14,030 — 14,030 Disposals and foreign currency changes, net (1,467 ) — (1,467 ) Impairments — — — Balances as of July 31, 2015 $ 486,691 $ (32,297 ) $ 454,394 The increase in goodwill during the period ended July 31, 2015, resulted from acquired franchisee and competitor businesses where the purchase price allocation had not been finalized. These allocations were finalized by the end of fiscal year 2016. We test goodwill for impairment annually or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value. Components of the intangible assets are as follows: (in 000s) Gross Carrying Amount Accumulated Amortization Net As of July 31, 2016: Reacquired franchise rights $ 319,545 $ (72,977 ) $ 246,568 Customer relationships 206,606 (110,696 ) 95,910 Internally-developed software 132,897 (99,873 ) 33,024 Noncompete agreements 31,492 (26,045 ) 5,447 Franchise agreements 19,201 (9,814 ) 9,387 Purchased technology 54,700 (27,425 ) 27,275 Acquired assets pending final allocation (1) 2,298 — 2,298 $ 766,739 $ (346,830 ) $ 419,909 As of July 31, 2015: Reacquired franchise rights $ 294,918 $ (51,233 ) $ 243,685 Customer relationships 169,998 (83,471 ) 86,527 Internally-developed software 120,522 (84,215 ) 36,307 Noncompete agreements 30,576 (24,091 ) 6,485 Franchise agreements 19,201 (8,534 ) 10,667 Purchased technology 54,700 (21,362 ) 33,338 $ 689,915 $ (272,906 ) $ 417,009 As of April 30, 2016: Reacquired franchise rights $ 319,354 $ (68,284 ) $ 251,070 Customer relationships 206,607 (104,072 ) 102,535 Internally-developed software 131,161 (95,768 ) 35,393 Noncompete agreements 31,499 (25,572 ) 5,927 Franchise agreements 19,201 (9,494 ) 9,707 Purchased technology 54,700 (25,909 ) 28,791 Acquired assets pending final allocation (1) 462 — 462 $ 762,984 $ (329,099 ) $ 433,885 (1) Represents recent business acquisitions, for which final purchase price allocations have not yet been determined. Amortization of intangible assets for the three months ended July 31, 2016 and 2015 was $18.0 million and $16.6 million , respectively. Estimated amortization of intangible assets for fiscal years 2017 , 2018 , 2019 , 2020 and 2021 is $76.7 million , $66.1 million , $51.7 million , $37.3 million and $26.1 million , respectively. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Jul. 31, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term Debt | NOTE 6: LONG-TERM DEBT The components of long-term debt are as follows: (in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Senior Notes, 4.125%, due October 2020 $ 650,000 $ — $ 650,000 Senior Notes, 5.500%, due November 2022 500,000 500,000 500,000 Senior Notes, 5.250%, due October 2025 350,000 — 350,000 Capital lease obligation 7,229 8,031 7,435 Debt issuance costs and discounts (14,575 ) (5,272 ) (15,234 ) 1,492,654 502,759 1,492,201 Less: Current portion (864 ) (799 ) (826 ) $ 1,491,790 $ 501,960 $ 1,491,375 Effective May 1, 2016, we adopted the provisions of ASU 2015-3 on a retrospective basis. Accordingly, debt issuance costs related to our Senior Notes are included in long-term debt in the consolidated balance sheets. Amounts for prior periods have been retrospectively adjusted to conform to the current period presentation. See note 1 for additional information. In September 2015, we entered into a Credit and Guarantee Agreement (2015 CLOC). The 2015 CLOC provides for an unsecured senior revolving credit facility in the aggregate principal amount of $2.0 billion , which includes a $200.0 million sublimit for swingline loans and a $100.0 million sublimit for standby letters of credit. We may request increases in the aggregate principal amount of the revolving credit facility of up to $500.0 million , subject to obtaining commitments from lenders therefor and meeting certain other conditions. The 2015 CLOC will mature on September 21, 2020, unless extended pursuant to the terms of the 2015 CLOC, at which time all outstanding amounts thereunder will be due and payable. The 2015 CLOC includes an annual facility fee, which will vary depending our then current credit ratings. The 2015 CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier termination and contains customary representations, warranties, covenants and events of default, including, without limitation: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio calculated on a consolidated basis of no greater than (a) 3.50 to 1.00 as of the last day of each fiscal quarter ending on April 30, July 31, and October 31 of each year and (b) 4.50 to 1.00 as of the last day of each fiscal quarter ending on January 31 of each year; (2) a covenant requiring us to maintain an interest coverage (EBITDA-to-interest expense) ratio calculated on a consolidated basis of not less than 2.50 to 1.00 as of the last date of any fiscal quarter; and (3) covenants restricting our ability to incur certain additional debt, incur liens, merge or consolidate with other companies, sell or dispose of assets (including equity interests), liquidate or dissolve, engage in certain transactions with affiliates or enter into certain restrictive agreements. The 2015 CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the 2015 CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with these requirements as of July 31, 2016 . As of July 31, 2016 , amounts available to borrow under the 2015 CLOC were limited by the debt-to-EBITDA covenant in the 2015 CLOC Agreement to approximately $1.3 billion , however our cash needs at July 31 generally do not require us to borrow on our CLOC at that time. We had no balance outstanding under the 2015 CLOC as of July 31, 2016 . We subsequently borrowed $50 million under the 2015 CLOC on August 31, 2016 for seasonal working capital needs. |
Fair Value
Fair Value | 3 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value | NOTE 7: FAIR VALUE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS – The carrying amounts and estimated fair values of our financial instruments are as follows: (in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Carrying Estimated Carrying Estimated Carrying Estimated Assets: Cash and cash equivalents $ 306,871 $ 306,871 $ 1,299,382 $ 1,299,382 $ 896,801 $ 896,801 Cash and cash equivalents - restricted 122,025 122,025 61,040 61,040 104,110 104,110 Receivables, net - short-term 103,425 103,425 103,194 103,194 153,116 153,116 Mortgage loans held for investment, net 192,375 185,057 230,130 184,277 202,385 190,503 Investments in AFS securities 1,123 1,123 407,426 407,426 1,133 1,133 Receivables, net - long-term 56,514 56,514 72,427 72,427 60,407 60,407 Liabilities: Customer banking deposits — — 477,145 473,720 — — Long-term debt 1,492,654 1,606,364 502,759 552,431 1,492,201 1,566,098 Contingent consideration 8,347 8,347 10,650 10,650 8,657 8,657 Fair value estimates, methods and assumptions are set forth below. Fair value was not estimated for assets and liabilities that are not considered financial instruments. ▪ Cash and cash equivalents, including restricted - Fair value approximates the carrying amount (Level 1). ▪ Receivables, net - short-term - For short-term balances the carrying values reported in the balance sheet approximate fair market value due to the relative short-term nature of the respective instruments (Level 1). ▪ Mortgage loans held for investment, net - The fair value of mortgage loans held for investment is estimated using a third-party pricing service. The fair value is determined using the present value of expected future cash flows at the asset level, assuming future prepayments and using discount factors determined by prices obtained for residential loans with similar characteristics in the secondary market, as discounted for illiquid assets. Quarterly, we perform analytics to assess the reasonableness of the fair value received from the third-party pricing service based on changes in the portfolio and changes in market conditions. We evaluate whether adjustments to third-party pricing is necessary and historically, we have not made adjustments to prices obtained from our third-party pricing service (Level 3). ▪ Investments in available-for-sale (AFS) securities - For mortgage-backed securities, we historically used a third-party pricing service to determine fair value. The service's pricing model was based on market data and utilized available trade, bid and other market information for similar securities (Level 2). The fair value of our investment in common stock was determined based on quoted market prices (Level 1). ▪ Receivables, net - long-term - The carrying values for the long-term portion of loans to franchisees approximate fair market value due to variable interest rates, low historical delinquency rates and franchise territories serving as collateral (Level 1). Long-term EA receivables are carried at net realizable value which approximates fair value (Level 3). Net realizable value is determined based on historical collection rates. ▪ Customer banking deposits - The fair value of deposits with no stated maturity, such as non-interest-bearing demand deposits, checking, money market and savings accounts, was equal to the amount payable on demand (Level 1). The fair value of IRAs and other time deposits was estimated by discounting the future cash flows using the rates offered by HRB Bank for products with similar remaining maturities (Level 3). ▪ Long-term debt - The fair value of our Senior Notes is based on quotes from multiple banks (Level 2). ▪ Contingent consideration - Fair value approximates the carrying amount (Level 3). |
Income Taxes
Income Taxes | 3 Months Ended |
Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8: INCOME TAXES We file a consolidated federal income tax return in the United States (U.S.) with the Internal Revenue Service (IRS) and file tax returns in various state and foreign jurisdictions. Tax returns are typically examined and settled upon completion of the examination, with tax controversies settled either at the exam level or through the appeals process. The Company currently does not have a U.S. federal income tax return under examination. Our U.S. federal returns for 2011 and all prior periods have been audited by the IRS and are closed. Our return for 2012 has been audited by the IRS but remains open until the expiration of the three year statute of limitations in the fall of 2016. Our U.S. federal returns for 2013 and after have not been audited and remain open to examination. With respect to state and local jurisdictions and countries outside the United States, we and our subsidiaries are typically subject to examination for three to six years after the income tax returns have been filed. Although the outcome of the audits is always uncertain, we believe that adequate amounts of tax, interest and penalties have been provided for in the consolidated financial statements for any adjustments that might be incurred due to state, local or foreign audits. We had gross unrecognized tax benefits of $106.0 million , $76.5 million and $111.5 million as of July 31, 2016 and 2015 and April 30, 2016 , respectively. The gross unrecognized tax benefits decreased $5.5 million and $9.8 million during the three months ended July 31, 2016 and 2015 , respectively. The decrease in unrecognized tax benefits during the three months ending July 31, 2016 is primarily related to favorable audit settlements in various states. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $13.9 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations and anticipated closure of various state matters currently under exam. The portion of unrecognized benefits expected to be cash settled within the next twelve months amounts to $7.5 million and is included in accrued income taxes on our consolidated balance sheet. The remaining liability for uncertain tax positions is classified as long-term and is included in other noncurrent liabilities in the consolidated balance sheet. Consistent with prior years, our pretax loss for the three months ended July 31, 2016 is expected to be offset by income in the fourth quarter due to the established pattern of seasonality in our primary business operations. As such, management has determined that it is at least more-likely-than-not that realization of tax benefits recorded in our financial statements will occur within our fiscal year. The amount of tax benefit recorded reflects management’s estimate of the annual effective tax rate applied to the year-to-date loss from continuing operations. Certain discrete tax adjustments are also reflected in income tax expense for the periods presented. A discrete income tax benefit of $6.8 million was recorded in the three months ended July 31, 2016 , compared to a discrete tax benefit of $20.6 million in the same period of the prior year. The discrete tax benefit recorded in the current period resulted primarily from favorable settlements of state audits. The discrete tax benefit recorded in the prior year resulted primarily from a law change enacted in the state of Missouri. Our effective tax rate for continuing operations, including the effects of discrete income tax items was 40.5% and 48.4% for the three months ended July 31, 2016 and 2015 , respectively. Discrete items increased management's estimate of the annualized effective tax rate for the three months ended July 31, 2016 and 2015 by 3.3% and 11.0% , respectively. Due to the loss in both periods, a discrete tax benefit in either period increases the tax rate while an item of discrete tax expense decreases the tax rate. The impact of discrete tax items combined with the seasonal nature of our business can cause the effective tax rate through our first quarter to be significantly different than the rate for our full fiscal year. |
Interest Income And Interest Ex
Interest Income And Interest Expense | 3 Months Ended |
Jul. 31, 2016 | |
Interest Income And Interest Expense [Abstract] | |
Other Income And Other Expenses | NOTE 9: OTHER INCOME AND OTHER EXPENSES The following table shows the components of other income and other expenses: (in 000s) Three months ended July 31, 2016 2015 Other income, net: Mortgage loans and real estate owned, net $ 1,537 $ — Interest and gains on AFS securities 31 — Other 1,400 433 $ 2,968 $ 433 Other expenses, net: Foreign currency losses $ (21 ) $ (4,599 ) Other (306 ) (386 ) $ (327 ) $ (4,985 ) In connection with our deregistration as a savings and loan holding company (SLHC), we no longer present interest income on mortgage loans held for investment and various other investments as revenues. Effective September 1, 2015, these amounts are prospectively reported in other income on the consolidated statements of operations and comprehensive loss. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | NOTE 10: COMMITMENTS AND CONTINGENCIES Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 204,342 $ 189,779 Amounts deferred for new extended service plans issued 978 983 Revenue recognized on previous deferrals (31,650 ) (31,069 ) Balance, end of the period $ 173,670 $ 159,693 We accrued $5.8 million , $7.6 million and $7.0 million as of July 31, 2016 and 2015 and April 30, 2016 , respectively, related to estimated losses under the standard guarantee, which is included with assisted tax preparation services. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets. We have accrued estimated contingent consideration totaling $8.3 million , $10.7 million and $8.7 million as of July 31, 2016 and 2015 and April 30, 2016 , respectively, related to acquisitions, with amounts recorded in deferred revenue and other liabilities. Estimates of contingent payments are typically based on expected financial performance of the acquired business and economic conditions at the time of acquisition. Should actual results differ from our assumptions, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations. We have contractual commitments to fund certain franchises with approved revolving lines of credit. Our total obligation under these lines of credit was $59.4 million at July 31, 2016 , and net of amounts drawn and outstanding, our remaining commitment to fund totaled $28.1 million . NOTE 12: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations. Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of residential mortgage-backed securities (RMBSs). In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. Claims under these representations and warranties together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims." These representations and warranties varied based on the nature of the transaction and the buyer's or insurer's requirements, but generally pertained to the ownership of the loan, the validity of the lien securing the loan, borrower fraud, the loan's compliance with the criteria for inclusion in the transaction, including compliance with SCC's underwriting standards or loan criteria established by the buyer, ability to deliver required documentation, and compliance with applicable laws. Representations and warranties related to borrower fraud in whole loan sale transactions to institutional investors, which were generally securitized by such investors and represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan. Representation and warranty claims received by SCC have primarily related to alleged breaches of representations and warranties related to a loan's compliance with the underwriting standards established by SCC at origination and borrower fraud for loans originated in calendar years 2006 and 2007. SCC has received claims representing an original principal amount of $2.6 billion since May 1, 2008, of which $1.9 billion were received prior to fiscal year 2013. SETTLEMENT ACTIONS – SCC has entered into tolling agreements with counterparties that have made a significant portion of previously denied representation and warranty claims. While tolling agreements remain in effect, they toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC. SCC has engaged in discussions with counterparties since fiscal year 2013 regarding the bulk settlement of previously denied and potential future representation and warranty and other claims against SCC. Based on settlement discussions with counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the claims that are the subject of these discussions, and SCC has utilized that approach in prior fiscal years to resolve certain of these claims. On December 18, 2015, SCC entered into settlement agreements with two additional counterparties to resolve certain additional claims, subject to the terms and conditions set forth in these settlement agreements. On July 13, 2016, SCC entered into a settlement agreement with an additional counterparty to resolve certain additional claims. The amounts paid under these settlement agreements were fully covered by prior accruals. In the event that the ongoing efforts to settle are not successful, SCC believes claim volumes may increase or litigation may result. SCC will continue to vigorously contest any request for repurchase when it has concluded that a valid basis for repurchase does not exist. SCC's decision whether to engage in bulk settlement discussions is based on factors that vary by counterparty or type of counterparty and include the considerations used by SCC in determining its loss estimate, described below under "Liability for Estimated Contingent Losses." LIABILITY FOR ESTIMATED CONTINGENT LOSSES – SCC accrues a liability for losses related to representation and warranty claims when those losses are believed to be both probable and reasonably estimable. Development of loss estimates is subject to a high degree of management judgment and estimates may vary significantly period to period. SCC's loss estimate as of July 31, 2016 , is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and the factors mentioned below. These factors include the terms of prior bulk settlements, the terms expected to result from ongoing bulk settlement discussions, and an assessment of, among other things, historical claim results, threatened claims, terms and provisions of related agreements, counterparty willingness to pursue a settlement, legal standing of counterparties to provide a comprehensive settlement, bulk settlement methodologies used and publicly disclosed by other market participants, the potential pro-rata realization of the claims as compared to all claims and other relevant facts and circumstances when developing its estimate of probable loss. SCC believes that the most significant of these factors are the terms expected to result from ongoing bulk settlement discussions, which have been primarily influenced by the bulk settlement methodologies used and publicly disclosed by other market participants and the anticipated pro-rata realization of the claims of particular counterparties as compared to the anticipated realization if all claims and litigation were resolved together with payment of SCC's related administration and legal expense. Changes in any one of the factors mentioned above could significantly impact the estimate. The liability is included in deferred revenue and other current liabilities on the consolidated balance sheets. A rollforward of SCC's accrued liability for these loss contingencies is as follows: (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 65,265 $ 149,765 Provisions 235 — Payments (40,000 ) — Balance, end of the period $ 25,500 $ 149,765 On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the RMBS transactions into which SCC entered. However this decision would not affect representation and warranty claims and lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement or a suit was timely filed. It is possible that in response to the statute of limitations rulings in the ACE case and similar rulings in other state and federal courts, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may seek to distinguish certain aspects of the ACE decision, pursue alternate legal theories of recovery, or assert claims against other contractual parties such as securitization trustees. For example, a recent ruling by a New York intermediate appellate court allowed a counterparty to pursue litigation on additional loans in the same trust even though only some of the loans complied with the condition precedent of timely pre-suit notice and opportunity to cure or repurchase. The impact on SCC, if any, from alternative legal theories seeking to avoid or distinguish the ACE decision, or judicial limitations on the ACE decision, is unclear. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations. SCC believes it is reasonably possible that future losses related to representation and warranty claims may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably estimable possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses. As described more fully in note 11 , losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters, depositors, and securitization trustees in securitization transactions in which SCC participated. These indemnification claims or reserved contribution rights are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, have not accrued a liability for these claims or rights, and are not able to estimate a reasonably possible loss or range of loss for these claims or rights. Accordingly, neither the accrued liability described above totaling $25.5 million , nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims or reserved contribution rights. There can be no assurances as to the outcome or impact of these indemnification claims or reserved contribution rights. In the event of unfavorable outcomes on these claims or rights, the amount required to discharge or settle them could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations and cash flows. If the amount that SCC is ultimately required to pay with respect to claims and litigation related to its past sales and securitizations of mortgage loans, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants may also attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities . SCC's principal assets, as of July 31, 2016 , total approximately $347 million and consist primarily of an intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows. |
Litigation And Related Continge
Litigation And Related Contingencies | 3 Months Ended |
Jul. 31, 2016 | |
Litigation And Related Contingencies [Abstract] | |
Litigation And Related Contingencies | NOTE 11: LITIGATION AND RELATED CONTINGENCIES We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise, including as described below. The matters described below are not all of the lawsuits to which we are subject. In some of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims over an extended period of time. The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business activities, including as described below. We accrue liabilities for litigation, claims and other loss contingencies and any related settlements (each referred to, individually, as a "matter" and, collectively, as "matters") when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been accrued for a number of the matters noted below. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range. For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of July 31, 2016 . While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our consolidated financial position, results of operations and cash flows. As of July 31, 2016 and 2015 and April 30, 2016 , we accrued liabilities of $2.3 million , $9.3 million and $2.3 million , respectively, for matters addressed in this note. For some matters where a liability has not been accrued, we are able to estimate a reasonably possible loss or range of loss. This estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Those matters for which an estimate is not reasonably possible are not included within this estimated range. Therefore, this estimated range of reasonably possible loss represents what we believe to be an estimate of reasonably possible loss only for certain matters meeting these criteria. It does not represent our maximum loss exposure. For those matters, and for matters where a liability has been accrued, as of July 31, 2016 , we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material. For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations. On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable. We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows. LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been, remains, and may in the future be subject to litigation, claims, including indemnification and contribution claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims, and lawsuits include actions by regulators, third parties seeking indemnification, including depositors, underwriters, and securitization trustees, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims, and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure, and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws, and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters. On May 31, 2012, a lawsuit was filed by Homeward Residential, Inc. (Homeward) in the Supreme Court of the State of New York, County of New York, against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Index No. 651885/2012). SCC removed the case to the United States District Court for the Southern District of New York on June 28, 2012 (Case No. 12-cv-5067). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-2 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract, anticipatory breach, indemnity and declaratory judgment in connection with alleged losses incurred as a result of the breach of representations and warranties relating to SCC and to loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses, as well as a repurchase of all loans due to alleged misrepresentations by SCC as to itself and as to the loans' compliance with its underwriting standards and the value of underlying real estate. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase, anticipatory breach, indemnity, and declaratory judgment. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter. On September 28, 2012, a second lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 12-cv-7319). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-3 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 96 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12 , is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit. On April 5, 2013, a third lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC. The suit, styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 13-cv-2107), was filed as a related matter to the September 2012 Homeward suit mentioned above. In this April 2013 lawsuit, the plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2007-4 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 159 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12 , is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit. Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. SCC has received notices of claims for indemnification relating to lawsuits to which underwriters or depositors are party. Based on information currently available to SCC, it believes that the 22 lawsuits in which notice of a claim has been made involve 39 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion ). Because SCC has not been a party to these lawsuits (with the exception of Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. , filed in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) and settled as to SCC in August 2015), and has not had control of this litigation or any settlements thereof, SCC does not have precise information about the amount of damages or other remedies being asserted, the defenses to the claims in such lawsuits or the terms of any settlements of such lawsuits. SCC therefore cannot reasonably estimate the amount of potential losses or associated fees and expenses that may be incurred in connection with such lawsuits, which may be material. Additional lawsuits against the underwriters or depositors may be filed in the future, and SCC may receive additional notices of claims for indemnification from underwriters or depositors with respect to existing or new lawsuits or settlements of such lawsuits. Certain of the notices received included, and future notices may include, a reservation of rights, which are referred to as "reserved contribution rights," that encompasses a right of contribution which may become operative if indemnification is unavailable or insufficient to cover all of the losses and expenses involved. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, nor have we accrued a liability related to any of these claims or rights. Securitization trustees also are, or have been, involved in lawsuits related to securitization transactions in which SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers or other parties breached their representations and warranties or otherwise failed to fulfill their obligations, including that securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory requirements by failing to properly protect the certificate holders’ interests. SCC may receive notices for indemnification with respect to existing or new lawsuits or settlements of such lawsuits in its capacity as originator, depositor, or servicer. We have not concluded that a loss related to any indemnification claims by securitization trustees is probable, nor have we accrued a liability for such claims. LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS – Compliance Fee Litigation. On April 16, 2012, a putative class action lawsuit was filed against us in the Circuit Court of Jackson County, Missouri styled Manuel H. Lopez III v. H&R Block, Inc., et al. (Case # 1216CV12290) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all Missouri citizens who were charged the compliance fee, and asserts claims of violation of the Missouri Merchandising Practices Act, money had and received, and unjust enrichment. We filed a motion to compel arbitration of the 2011 claims. The court denied the motion. We filed an appeal. On May 6, 2014, the Missouri Court of Appeals, Western District, reversed the ruling of the trial court and remanded the case for further consideration of the motion. On March 12, 2015, the trial court denied the motion on remand. We filed an additional appeal. On March 8, 2016, the appellate court affirmed the decision of the trial court. We filed an application for transfer of the appeal in the Supreme Court of Missouri, which was denied. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff originally sought to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserted claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. In June 2014, the court denied class certification of the remaining 2012 claims. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. In January 2016, the plaintiff filed an amended complaint asserting claims of violation of Missouri and California state consumer laws, money had and received, and unjust enrichment, along with a motion to certify a class of all persons (excluding citizens of Missouri) who were charged the compliance fee in the state of California. We subsequently filed a motion for summary judgment on all claims. On April 29, 2016, the court granted our motion for summary judgment on all claims and denied the plaintiff's motion for class certification as moot. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. LITIGATION, CLAIMS AND OTHER LOSS CONTINGENCIES PERTAINING TO OTHER DISCONTINUED OPERATIONS – Express IRA Litigation. On January 2, 2008, the Mississippi Attorney General in the Chancery Court of Hinds County, Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express IRA product that is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial Advisors, Inc ., et al. The complaint alleges fraudulent business practices, deceptive acts and practices, common law fraud and breach of fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief, disgorgement of profits, damages and restitution, civil penalties and punitive damages. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation through an indemnification agreement. OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated. While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows. We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows. (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 65,265 $ 149,765 Provisions 235 — Payments (40,000 ) — Balance, end of the period $ 25,500 $ 149,765 |
Loss Contingencies Arising From
Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations | 3 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations | NOTE 10: COMMITMENTS AND CONTINGENCIES Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 204,342 $ 189,779 Amounts deferred for new extended service plans issued 978 983 Revenue recognized on previous deferrals (31,650 ) (31,069 ) Balance, end of the period $ 173,670 $ 159,693 We accrued $5.8 million , $7.6 million and $7.0 million as of July 31, 2016 and 2015 and April 30, 2016 , respectively, related to estimated losses under the standard guarantee, which is included with assisted tax preparation services. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets. We have accrued estimated contingent consideration totaling $8.3 million , $10.7 million and $8.7 million as of July 31, 2016 and 2015 and April 30, 2016 , respectively, related to acquisitions, with amounts recorded in deferred revenue and other liabilities. Estimates of contingent payments are typically based on expected financial performance of the acquired business and economic conditions at the time of acquisition. Should actual results differ from our assumptions, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations. We have contractual commitments to fund certain franchises with approved revolving lines of credit. Our total obligation under these lines of credit was $59.4 million at July 31, 2016 , and net of amounts drawn and outstanding, our remaining commitment to fund totaled $28.1 million . NOTE 12: LOSS CONTINGENCIES ARISING FROM REPRESENTATIONS AND WARRANTIES OF OUR DISCONTINUED MORTGAGE OPERATIONS SCC ceased originating mortgage loans in December 2007 and, in April 2008, sold its servicing assets and discontinued its remaining operations. Mortgage loans originated by SCC were sold either as whole loans to single third-party buyers, who generally securitized such loans, or in the form of residential mortgage-backed securities (RMBSs). In connection with the sale of loans and/or RMBSs, SCC made certain representations and warranties. Claims under these representations and warranties together with any settlement arrangements related to these losses are collectively referred to as "representation and warranty claims." These representations and warranties varied based on the nature of the transaction and the buyer's or insurer's requirements, but generally pertained to the ownership of the loan, the validity of the lien securing the loan, borrower fraud, the loan's compliance with the criteria for inclusion in the transaction, including compliance with SCC's underwriting standards or loan criteria established by the buyer, ability to deliver required documentation, and compliance with applicable laws. Representations and warranties related to borrower fraud in whole loan sale transactions to institutional investors, which were generally securitized by such investors and represented approximately 68% of the disposal of loans originated in calendar years 2005, 2006 and 2007, included a "knowledge qualifier" limiting SCC's liability to those instances where SCC had knowledge of the fraud at the time the loans were sold. Representations and warranties made in other sale transactions effectively did not include a knowledge qualifier as to borrower fraud. SCC believes it would have an obligation to repurchase a loan only if it breached a representation and warranty and such breach materially and adversely affects the value of the mortgage loan or certificate holder's interest in the mortgage loan. Representation and warranty claims received by SCC have primarily related to alleged breaches of representations and warranties related to a loan's compliance with the underwriting standards established by SCC at origination and borrower fraud for loans originated in calendar years 2006 and 2007. SCC has received claims representing an original principal amount of $2.6 billion since May 1, 2008, of which $1.9 billion were received prior to fiscal year 2013. SETTLEMENT ACTIONS – SCC has entered into tolling agreements with counterparties that have made a significant portion of previously denied representation and warranty claims. While tolling agreements remain in effect, they toll the running of any applicable statute of limitations related to potential lawsuits regarding representation and warranty claims and other claims against SCC. SCC has engaged in discussions with counterparties since fiscal year 2013 regarding the bulk settlement of previously denied and potential future representation and warranty and other claims against SCC. Based on settlement discussions with counterparties, SCC believes a bulk settlement approach, rather than the loan-by-loan resolution process, will be needed to resolve all of the claims that are the subject of these discussions, and SCC has utilized that approach in prior fiscal years to resolve certain of these claims. On December 18, 2015, SCC entered into settlement agreements with two additional counterparties to resolve certain additional claims, subject to the terms and conditions set forth in these settlement agreements. On July 13, 2016, SCC entered into a settlement agreement with an additional counterparty to resolve certain additional claims. The amounts paid under these settlement agreements were fully covered by prior accruals. In the event that the ongoing efforts to settle are not successful, SCC believes claim volumes may increase or litigation may result. SCC will continue to vigorously contest any request for repurchase when it has concluded that a valid basis for repurchase does not exist. SCC's decision whether to engage in bulk settlement discussions is based on factors that vary by counterparty or type of counterparty and include the considerations used by SCC in determining its loss estimate, described below under "Liability for Estimated Contingent Losses." LIABILITY FOR ESTIMATED CONTINGENT LOSSES – SCC accrues a liability for losses related to representation and warranty claims when those losses are believed to be both probable and reasonably estimable. Development of loss estimates is subject to a high degree of management judgment and estimates may vary significantly period to period. SCC's loss estimate as of July 31, 2016 , is based on the best information currently available, significant management judgment, and a number of factors that are subject to change, including developments in case law and the factors mentioned below. These factors include the terms of prior bulk settlements, the terms expected to result from ongoing bulk settlement discussions, and an assessment of, among other things, historical claim results, threatened claims, terms and provisions of related agreements, counterparty willingness to pursue a settlement, legal standing of counterparties to provide a comprehensive settlement, bulk settlement methodologies used and publicly disclosed by other market participants, the potential pro-rata realization of the claims as compared to all claims and other relevant facts and circumstances when developing its estimate of probable loss. SCC believes that the most significant of these factors are the terms expected to result from ongoing bulk settlement discussions, which have been primarily influenced by the bulk settlement methodologies used and publicly disclosed by other market participants and the anticipated pro-rata realization of the claims of particular counterparties as compared to the anticipated realization if all claims and litigation were resolved together with payment of SCC's related administration and legal expense. Changes in any one of the factors mentioned above could significantly impact the estimate. The liability is included in deferred revenue and other current liabilities on the consolidated balance sheets. A rollforward of SCC's accrued liability for these loss contingencies is as follows: (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 65,265 $ 149,765 Provisions 235 — Payments (40,000 ) — Balance, end of the period $ 25,500 $ 149,765 On June 11, 2015, the New York Court of Appeals, New York's highest court, held in ACE Securities Corp. v. DB Structured Products, Inc., that the six-year statute of limitations under New York law starts to run at the time the representations and warranties are made, not the date when the repurchase demand was denied. This decision applies to claims and lawsuits brought against SCC where New York law governs. New York law governs many, though not all, of the RMBS transactions into which SCC entered. However this decision would not affect representation and warranty claims and lawsuits SCC has received or may receive, for example, where the statute of limitations has been tolled by agreement or a suit was timely filed. It is possible that in response to the statute of limitations rulings in the ACE case and similar rulings in other state and federal courts, parties seeking to pursue representation and warranty claims or lawsuits with respect to trusts where the statute of limitations for representation and warranty claims against the originator has run, may seek to distinguish certain aspects of the ACE decision, pursue alternate legal theories of recovery, or assert claims against other contractual parties such as securitization trustees. For example, a recent ruling by a New York intermediate appellate court allowed a counterparty to pursue litigation on additional loans in the same trust even though only some of the loans complied with the condition precedent of timely pre-suit notice and opportunity to cure or repurchase. The impact on SCC, if any, from alternative legal theories seeking to avoid or distinguish the ACE decision, or judicial limitations on the ACE decision, is unclear. SCC has not accrued liabilities for claims not subject to a tolling arrangement or not asserted prior to the expiration of the applicable statute of limitations. SCC believes it is reasonably possible that future losses related to representation and warranty claims may vary from amounts accrued for these exposures. SCC currently believes the aggregate range of reasonably estimable possible losses in excess of amounts accrued is not material. This estimated range is based on the best information currently available, significant management judgment and a number of factors that are subject to change, including developments in case law and the factors mentioned above. The actual loss that may be incurred could differ materially from our accrual or the estimate of reasonably possible losses. As described more fully in note 11 , losses may also be incurred with respect to various indemnification claims or reserved contribution rights by underwriters, depositors, and securitization trustees in securitization transactions in which SCC participated. These indemnification claims or reserved contribution rights are frequently not subject to a stated term or limit. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, have not accrued a liability for these claims or rights, and are not able to estimate a reasonably possible loss or range of loss for these claims or rights. Accordingly, neither the accrued liability described above totaling $25.5 million , nor the estimated range of reasonably possible losses in excess of the amount accrued described above, includes any possible losses which may arise from these indemnification claims or reserved contribution rights. There can be no assurances as to the outcome or impact of these indemnification claims or reserved contribution rights. In the event of unfavorable outcomes on these claims or rights, the amount required to discharge or settle them could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations and cash flows. If the amount that SCC is ultimately required to pay with respect to claims and litigation related to its past sales and securitizations of mortgage loans, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants may also attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities . SCC's principal assets, as of July 31, 2016 , total approximately $347 million and consist primarily of an intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations and cash flows. |
Condensed Consolidating Financi
Condensed Consolidating Financial Statements | 3 Months Ended |
Jul. 31, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Financial Statements | NOTE 13: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS Block Financial is a 100% owned subsidiary of the Company. Block Financial is the Issuer and the Company is the full and unconditional Guarantor of the Senior Notes, our 2015 CLOC and other indebtedness issued from time to time. These condensed consolidating financial statements have been prepared using the equity method of accounting. Earnings of subsidiaries are, therefore, reflected in the Company's investment in subsidiaries account. The elimination entries eliminate investments in subsidiaries, related stockholders' equity and other intercompany balances and transactions. CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of July 31, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 286,165 $ 1,013,707 $ (490 ) $ 1,299,382 Cash & cash equivalents - restricted — 11,806 49,234 — 61,040 Receivables, net 1 77,539 25,654 — 103,194 Deferred tax assets and income taxes receivable — 78,184 82,206 — 160,390 Prepaid expenses and other current assets — 6,374 74,176 — 80,550 Investments in AFS securities — 404,221 2,139 — 406,360 Total current assets 1 864,289 1,247,116 (490 ) 2,110,916 Mortgage loans held for investment, net — 230,130 — — 230,130 Property and equipment, net — 210 297,111 — 297,321 Intangible assets, net — — 417,009 — 417,009 Goodwill — — 454,394 — 454,394 Deferred tax assets and income taxes receivable — 41,328 — (29,951 ) 11,377 Investments in subsidiaries 1,259,110 — 108,582 (1,367,692 ) — Amounts due from affiliates 412,924 131,889 1,423 (546,236 ) — Other noncurrent assets — 69,215 39,092 — 108,307 Total assets $ 1,672,035 $ 1,337,061 $ 2,564,727 $ (1,944,369 ) $ 3,629,454 Customer banking deposits $ — $ 477,222 $ — $ (490 ) $ 476,732 Accounts payable and accrued expenses 1,206 6,679 108,970 — 116,855 Accrued salaries, wages and payroll taxes — 2,293 31,154 — 33,447 Accrued income taxes and reserves for uncertain tax positions — 49,240 196,301 — 245,541 Current portion of long-term debt — — 799 — 799 Deferred revenue and other current liabilities — 169,900 146,980 — 316,880 Total current liabilities 1,206 705,334 484,204 (490 ) 1,190,254 Long-term debt — 494,727 7,233 — 501,960 Deferred tax liabilities and reserves for uncertain tax positions — 26,737 140,817 (29,951 ) 137,603 Deferred revenue and other noncurrent liabilities — 1,660 128,550 — 130,210 Amounts due to affiliates 1,402 21 544,813 (546,236 ) — Total liabilities 2,608 1,228,479 1,305,617 (576,677 ) 1,960,027 Stockholders' equity 1,669,427 108,582 1,259,110 (1,367,692 ) 1,669,427 Total liabilities and stockholders' equity $ 1,672,035 $ 1,337,061 $ 2,564,727 $ (1,944,369 ) $ 3,629,454 CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of April 30, 2016 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 9,025 $ 887,776 $ — $ 896,801 Cash & cash equivalents - restricted — 29,004 75,106 — 104,110 Receivables, net — 71,882 81,234 — 153,116 Prepaid expenses and other current assets — 6,925 58,516 — 65,441 Investments in AFS securities — — 1,133 — 1,133 Total current assets — 116,836 1,103,765 — 1,220,601 Mortgage loans held for investment, net — 202,385 — — 202,385 Property and equipment, net — 136 293,429 — 293,565 Intangible assets, net — — 433,885 — 433,885 Goodwill — — 470,757 — 470,757 Deferred tax assets and income taxes receivable 5,917 77,270 36,936 — 120,123 Investments in subsidiaries 1,738,643 — 108,995 (1,847,638 ) — Amounts due from affiliates — 1,307,612 1,714,009 (3,021,621 ) — Other noncurrent assets — 62,806 43,103 — 105,909 Total assets $ 1,744,560 $ 1,767,045 $ 4,204,879 $ (4,869,259 ) $ 2,847,225 Accounts payable and accrued expenses $ 1,531 $ 18,596 $ 239,459 $ — $ 259,586 Accrued salaries, wages and payroll taxes — 1,766 160,020 — 161,786 Accrued income taxes and reserves for uncertain tax positions — 52,976 320,778 — 373,754 Current portion of long-term debt — — 826 — 826 Deferred revenue and other current liabilities — 87,982 155,671 — 243,653 Total current liabilities 1,531 161,320 876,754 — 1,039,605 Long-term debt — 1,484,766 6,609 — 1,491,375 Deferred tax liabilities and reserves for uncertain tax positions 5,917 10,786 116,257 — 132,960 Deferred revenue and other noncurrent liabilities — 1,178 159,004 — 160,182 Amounts due to affiliates 1,714,009 — 1,307,612 (3,021,621 ) — Total liabilities 1,721,457 1,658,050 2,466,236 (3,021,621 ) 2,824,122 Stockholders' equity 23,103 108,995 1,738,643 (1,847,638 ) 23,103 Total liabilities and stockholders' equity $ 1,744,560 $ 1,767,045 $ 4,204,879 $ (4,869,259 ) $ 2,847,225 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in 000s) Three months ended July 31, 2016 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Net cash used in operating activities: $ — $ (57,939 ) $ (417,736 ) $ — $ (475,675 ) Cash flows from investing: Sales, maturities of and payments received on AFS securities — 58 — — 58 Principal payments on mortgage loans held for investment, net — 8,427 — — 8,427 Capital expenditures — (5 ) (6,241 ) — (6,246 ) Payments made for business acquisitions, net of cash acquired — — (1,635 ) — (1,635 ) Loans made to franchisees — (2,202 ) (17 ) — (2,219 ) Repayments from franchisees — 6,305 168 — 6,473 Intercompany borrowings (payments) — 40,217 (92,187 ) 51,970 — Other, net — 16 204 — 220 Net cash provided by (used in) investing activities — 52,816 (99,708 ) 51,970 5,078 Cash flows from financing: Dividends paid (48,514 ) — — — (48,514 ) Repurchase of common stock, including shares surrendered (45,312 ) — — — (45,312 ) Proceeds from exercise of stock options 1,639 — — — 1,639 Intercompany borrowings (payments) 92,187 — (40,217 ) (51,970 ) — Other, net — — (24,779 ) — (24,779 ) Net cash provided by (used in) financing activities — — (64,996 ) (51,970 ) (116,966 ) Effects of exchange rates on cash — — (2,367 ) — (2,367 ) Net decrease in cash and cash equivalents — (5,123 ) (584,807 ) — (589,930 ) Cash and cash equivalents at beginning of the period — 9,025 887,776 — 896,801 Cash and cash equivalents at end of the period $ — $ 3,902 $ 302,969 $ — $ 306,871 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in 000s) Three months ended July 31, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Net cash provided by (used in) operating activities: $ — $ 27,342 $ (405,588 ) $ — $ (378,246 ) Cash flows from investing: Sales, maturities of and payments received on AFS securities — 28,339 3,764 — 32,103 Principal payments on mortgage loans held for investment, net — 8,537 — — 8,537 Capital expenditures — (19 ) (8,670 ) — (8,689 ) Payments made for business acquisitions, net of cash acquired — — (12,271 ) — (12,271 ) Loans made to franchisees — (2,582 ) — — (2,582 ) Repayments from franchisees — 11,288 146 — 11,434 Intercompany borrowings (payments) — 2,226 (59,804 ) 57,578 — Other, net — 1,439 2,123 — 3,562 Net cash provided by (used in) investing activities — 49,228 (74,712 ) 57,578 32,094 Cash flows from financing: Customer banking deposits, net — (268,482 ) — (50 ) (268,532 ) Dividends paid (55,063 ) — — — (55,063 ) Repurchase of common stock, including shares surrendered (17,756 ) — — — (17,756 ) Proceeds from exercise of stock options 13,015 — — — 13,015 Intercompany borrowings (payments) 59,804 — (2,226 ) (57,578 ) — Other, net — — (22,413 ) — (22,413 ) Net cash used in financing activities — (268,482 ) (24,639 ) (57,628 ) (350,749 ) Effects of exchange rates on cash — — (10,907 ) — (10,907 ) Net decrease in cash and cash equivalents — (191,912 ) (515,846 ) (50 ) (707,808 ) Cash and cash equivalents at beginning of the period — 478,077 1,529,553 (440 ) 2,007,190 Cash and cash equivalents at end of the period $ — $ 286,165 $ 1,013,707 $ (490 ) $ 1,299,382 |
Summary Of Significant Accoun20
Summary Of Significant Accounting Policies (Policy) | 3 Months Ended |
Jul. 31, 2016 | |
Summary Of Significant Accounting Policies [Abstract] | |
Basis of Presentation | – The consolidated balance sheets as of July 31, 2016 and 2015 , the consolidated statements of operations and comprehensive loss for the three months ended July 31, 2016 and 2015 , and the condensed consolidated statements of cash flows for the three months ended July 31, 2016 and 2015 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows as of July 31, 2016 and 2015 and for all periods presented have been made. "H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc. or to H&R Block, Inc. and its subsidiaries, as appropriate to the context. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U. S. (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our April 30, 2016 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2016 or for the year then ended are derived from our April 30, 2016 Annual Report to Shareholders on Form 10-K. |
Management Estimates | MANAGEMENT ESTIMATES – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, valuation allowances on deferred tax assets, reserves for uncertain tax positions and related matters. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates. |
Nature of Operations [Text Block] | SEASONALITY OF BUSINESS – Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of January through April. Therefore, results for interim periods are not indicative of results to be expected for the full year. |
Interest Expense Allocated to Discontinued Operations, Policy [Policy Text Block] | DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See notes 11 and 12 for additional information on litigation, claims and other loss contingencies related to our discontinued operations. |
New Accounting Pronouncements, Policy [Policy Text Block] | NEW ACCOUNTING PRONOUNCEMENTS – In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-3, "Interest - Imputation of Interest," (ASU 2015-3) which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This guidance must be applied retrospectively to all periods presented. We adopted this guidance effective May 1, 2016. Prior periods have been retrospectively adjusted to conform to the current period presentation. Debt issuance costs previously reported as other current assets and other noncurrent assets have been reclassified to long-term debt. This guidance did not have a material effect on our consolidated financial statements. |
Loss Per Share and Stockholde21
Loss Per Share and Stockholders' Equity (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule Of Share Repurchase And Retirements [Table Text Block] | The cost of shares retired during the current period was allocated to the components of stockholders’ equity as follows: (in 000s) Common stock $ 20 Additional paid-in-capital 1,223 Retained earnings 47,351 Total $ 48,594 |
Computations Of Basic And Diluted Earnings Per Share | The computations of basic and diluted earnings per share from continuing operations are as follows: (in 000s, except per share amounts) Three months ended July 31, 2016 2015 Net loss from continuing operations attributable to shareholders $ (121,026 ) $ (96,505 ) Amounts allocated to participating securities (124 ) (102 ) Net loss from continuing operations attributable to common shareholders $ (121,150 ) $ (96,607 ) Basic weighted average common shares 220,484 275,765 Potential dilutive shares — — Dilutive weighted average common shares 220,484 275,765 Loss per share from continuing operations attributable to common shareholders: Basic $ (0.55 ) $ (0.35 ) Diluted (0.55 ) (0.35 ) |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable, Unclassified [Abstract] | |
Schedule Of Short-Term Receivables | Receivables consist of the following: (in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Short-term Long-term Short-term Long-term Short-term Long-term Loans to franchisees $ 47,905 $ 46,461 $ 56,277 $ 57,792 $ 50,000 $ 46,284 Receivables for tax preparation and related fees 39,115 5,528 39,927 6,103 52,327 5,528 Cash Back® receivables 4,515 — 2,777 — 37,663 — Emerald Advance lines of credit 24,857 111 20,321 598 25,092 869 Royalties from franchisees 6,885 — 4,509 — 9,997 — Other 36,529 4,414 33,154 7,934 35,048 7,726 159,806 56,514 156,965 72,427 210,127 60,407 Allowance for doubtful accounts (56,381 ) — (53,771 ) — (57,011 ) — $ 103,425 $ 56,514 $ 103,194 $ 72,427 $ 153,116 $ 60,407 |
Schedule Of Receivables Based On Year Of Origination | These amounts as of July 31, 2016 , by year of origination, are as follows: (in 000s) Credit Quality Indicator – Year of origination: 2016 $ 9,224 2015 and prior 182 Revolving loans 15,562 $ 24,968 |
Schedule Of Activity In The Allowance For Doubtful Accounts | Activity in the allowance for doubtful accounts for our receivables for the three months ended July 31, 2016 and 2015 is as follows: (in 000s) EAs All Other Total Balances as of May 1, 2016 $ 9,007 $ 48,004 $ 57,011 Provision 451 966 1,417 Charge-offs — (2,047 ) (2,047 ) Balances as of July 31, 2016 $ 9,458 $ 46,923 $ 56,381 Balances as of May 1, 2015 $ 7,353 $ 47,174 $ 54,527 Provision — 713 713 Charge-offs — (1,469 ) (1,469 ) Balances as of July 31, 2015 $ 7,353 $ 46,418 $ 53,771 |
Mortgage Loans Held For Inves23
Mortgage Loans Held For Investment And Related Assets (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Mortgage Loans Held For Investment And Related Assets [Abstract] | |
Schedule Of Mortgage Loan Portfolio | The composition of our mortgage loan portfolio is as follows: (dollars in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Amount % of Total Amount % of Total Amount % of Total Adjustable-rate loans $ 102,535 52 % $ 124,752 53 % $ 108,251 52 % Fixed-rate loans 93,539 48 % 111,096 47 % 97,957 48 % 196,074 100 % 235,848 100 % 206,208 100 % Unamortized deferred fees and costs 1,611 1,941 1,695 Less: Allowance for loan losses (5,310 ) (7,659 ) (5,518 ) $ 192,375 $ 230,130 $ 202,385 |
Schedule Of Allowance For Loan Losses | Activity in the allowance for loan losses for the three months ended July 31, 2016 and 2015 is as follows: (in 000s) Three months ended July 31, 2016 2015 Balance at beginning of the period $ 5,518 $ 7,886 Provision — (28 ) Recoveries 370 365 Charge-offs (578 ) (564 ) Balance at end of the period $ 5,310 $ 7,659 |
Schedule Of Past Due Mortgage Loans | Detail of the aging of the mortgage loans in our portfolio as of July 31, 2016 is as follows: (in 000s) Less than 60 Days Past Due 60 – 89 Days Past Due 90+ Days Past Due (1) Total Past Due Current Total Purchased from SCC $ 8,849 $ 745 $ 38,503 $ 48,097 $ 68,392 $ 116,489 All other 1,457 349 5,236 7,042 72,543 79,585 $ 10,306 $ 1,094 $ 43,739 $ 55,139 $ 140,935 $ 196,074 (1) We do not accrue interest on loans past due 90 days or more. |
Goodwill And Intangible Assets
Goodwill And Intangible Assets (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Goodwill | Changes in the carrying amount of goodwill for the three months ended July 31, 2016 and 2015 are as follows: (in 000s) Goodwill Accumulated Impairment Losses Net Balances as of April 30, 2016 $ 503,054 $ (32,297 ) $ 470,757 Acquisitions 23 — 23 Disposals and foreign currency changes, net 162 — 162 Impairments — — — Balances as of July 31, 2016 $ 503,239 $ (32,297 ) $ 470,942 Balances as of April 30, 2015 $ 474,128 $ (32,297 ) $ 441,831 Acquisitions 14,030 — 14,030 Disposals and foreign currency changes, net (1,467 ) — (1,467 ) Impairments — — — Balances as of July 31, 2015 $ 486,691 $ (32,297 ) $ 454,394 |
Schedule Of Intangible Assets | Components of the intangible assets are as follows: (in 000s) Gross Carrying Amount Accumulated Amortization Net As of July 31, 2016: Reacquired franchise rights $ 319,545 $ (72,977 ) $ 246,568 Customer relationships 206,606 (110,696 ) 95,910 Internally-developed software 132,897 (99,873 ) 33,024 Noncompete agreements 31,492 (26,045 ) 5,447 Franchise agreements 19,201 (9,814 ) 9,387 Purchased technology 54,700 (27,425 ) 27,275 Acquired assets pending final allocation (1) 2,298 — 2,298 $ 766,739 $ (346,830 ) $ 419,909 As of July 31, 2015: Reacquired franchise rights $ 294,918 $ (51,233 ) $ 243,685 Customer relationships 169,998 (83,471 ) 86,527 Internally-developed software 120,522 (84,215 ) 36,307 Noncompete agreements 30,576 (24,091 ) 6,485 Franchise agreements 19,201 (8,534 ) 10,667 Purchased technology 54,700 (21,362 ) 33,338 $ 689,915 $ (272,906 ) $ 417,009 As of April 30, 2016: Reacquired franchise rights $ 319,354 $ (68,284 ) $ 251,070 Customer relationships 206,607 (104,072 ) 102,535 Internally-developed software 131,161 (95,768 ) 35,393 Noncompete agreements 31,499 (25,572 ) 5,927 Franchise agreements 19,201 (9,494 ) 9,707 Purchased technology 54,700 (25,909 ) 28,791 Acquired assets pending final allocation (1) 462 — 462 $ 762,984 $ (329,099 ) $ 433,885 (1) Represents recent business acquisitions, for which final purchase price allocations have not yet been determined. |
Long-Term Debt Long-Term Debt (
Long-Term Debt Long-Term Debt (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Components of Long-Term Debt | The components of long-term debt are as follows: (in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Senior Notes, 4.125%, due October 2020 $ 650,000 $ — $ 650,000 Senior Notes, 5.500%, due November 2022 500,000 500,000 500,000 Senior Notes, 5.250%, due October 2025 350,000 — 350,000 Capital lease obligation 7,229 8,031 7,435 Debt issuance costs and discounts (14,575 ) (5,272 ) (15,234 ) 1,492,654 502,759 1,492,201 Less: Current portion (864 ) (799 ) (826 ) $ 1,491,790 $ 501,960 $ 1,491,375 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring | The carrying amounts and estimated fair values of our financial instruments are as follows: (in 000s) As of July 31, 2016 July 31, 2015 April 30, 2016 Carrying Estimated Carrying Estimated Carrying Estimated Assets: Cash and cash equivalents $ 306,871 $ 306,871 $ 1,299,382 $ 1,299,382 $ 896,801 $ 896,801 Cash and cash equivalents - restricted 122,025 122,025 61,040 61,040 104,110 104,110 Receivables, net - short-term 103,425 103,425 103,194 103,194 153,116 153,116 Mortgage loans held for investment, net 192,375 185,057 230,130 184,277 202,385 190,503 Investments in AFS securities 1,123 1,123 407,426 407,426 1,133 1,133 Receivables, net - long-term 56,514 56,514 72,427 72,427 60,407 60,407 Liabilities: Customer banking deposits — — 477,145 473,720 — — Long-term debt 1,492,654 1,606,364 502,759 552,431 1,492,201 1,566,098 Contingent consideration 8,347 8,347 10,650 10,650 8,657 8,657 |
Interest Income And Interest 27
Interest Income And Interest Expense (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Interest Income And Interest Expense [Abstract] | |
Schedule Of Other Income And Other Expenses | The following table shows the components of other income and other expenses: (in 000s) Three months ended July 31, 2016 2015 Other income, net: Mortgage loans and real estate owned, net $ 1,537 $ — Interest and gains on AFS securities 31 — Other 1,400 433 $ 2,968 $ 433 Other expenses, net: Foreign currency losses $ (21 ) $ (4,599 ) Other (306 ) (386 ) $ (327 ) $ (4,985 ) |
Commitments And Contingencies (
Commitments And Contingencies (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Deferred Revenue Related To The Peace Of Mind Program | Changes in deferred revenue balances related to our Peace of Mind® Extended Service Plan (POM) for both company-owned and franchise offices, which is included in deferred revenue and other liabilities in the consolidated balance sheets, are as follows: (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 204,342 $ 189,779 Amounts deferred for new extended service plans issued 978 983 Revenue recognized on previous deferrals (31,650 ) (31,069 ) Balance, end of the period $ 173,670 $ 159,693 |
Loss Contingencies Arising Fr29
Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Tables) | 3 Months Ended |
Jul. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation And Related Contingencies | NOTE 11: LITIGATION AND RELATED CONTINGENCIES We are a defendant in numerous litigation matters, arising both in the ordinary course of business and otherwise, including as described below. The matters described below are not all of the lawsuits to which we are subject. In some of the matters, very large or indeterminate amounts, including punitive damages, are sought. U.S. jurisdictions permit considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a lawsuit or a claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in litigating or resolving through settlement of numerous claims over an extended period of time. The outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. In addition to litigation matters, we are also subject to claims and other loss contingencies arising out of our business activities, including as described below. We accrue liabilities for litigation, claims and other loss contingencies and any related settlements (each referred to, individually, as a "matter" and, collectively, as "matters") when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been accrued for a number of the matters noted below. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range. For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of July 31, 2016 . While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our consolidated financial position, results of operations and cash flows. As of July 31, 2016 and 2015 and April 30, 2016 , we accrued liabilities of $2.3 million , $9.3 million and $2.3 million , respectively, for matters addressed in this note. For some matters where a liability has not been accrued, we are able to estimate a reasonably possible loss or range of loss. This estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. Those matters for which an estimate is not reasonably possible are not included within this estimated range. Therefore, this estimated range of reasonably possible loss represents what we believe to be an estimate of reasonably possible loss only for certain matters meeting these criteria. It does not represent our maximum loss exposure. For those matters, and for matters where a liability has been accrued, as of July 31, 2016 , we believe the aggregate range of reasonably possible losses in excess of amounts accrued is not material. For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by courts on motions or appeals, analysis by experts, or the status of any settlement negotiations. On a quarterly and annual basis, we review relevant information with respect to litigation and other loss contingencies and update our accruals, disclosures and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable. We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously, but there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and consolidated financial position, results of operations and cash flows. LITIGATION, CLAIMS, INCLUDING INDEMNIFICATION CLAIMS, OR OTHER LOSS CONTINGENCIES PERTAINING TO DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been, remains, and may in the future be subject to litigation, claims, including indemnification and contribution claims, and other loss contingencies pertaining to SCC's mortgage business activities that occurred prior to such termination and sale. These contingencies, claims, and lawsuits include actions by regulators, third parties seeking indemnification, including depositors, underwriters, and securitization trustees, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others alleged to be similarly situated. Among other things, these contingencies, claims, and lawsuits allege or may allege discriminatory or unfair and deceptive loan origination and servicing (including debt collection, foreclosure, and eviction) practices, other common law torts, rights to indemnification and contribution, breach of contract, violations of securities laws, and a variety of federal statutes, including the Truth in Lending Act (TILA), Equal Credit Opportunity Act, Fair Housing Act, Real Estate Settlement Procedures Act (RESPA), Home Ownership & Equity Protection Act (HOEPA), as well as similar state statutes. Given the impact of the financial crisis on the non-prime mortgage environment, the aggregate volume of these matters is substantial although it is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters, including certain of the lawsuits and claims described below, it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters, some of which are beyond the Company's control, and the indeterminate damages sought in some of these matters. On May 31, 2012, a lawsuit was filed by Homeward Residential, Inc. (Homeward) in the Supreme Court of the State of New York, County of New York, against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Index No. 651885/2012). SCC removed the case to the United States District Court for the Southern District of New York on June 28, 2012 (Case No. 12-cv-5067). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-2 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract, anticipatory breach, indemnity and declaratory judgment in connection with alleged losses incurred as a result of the breach of representations and warranties relating to SCC and to loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses, as well as a repurchase of all loans due to alleged misrepresentations by SCC as to itself and as to the loans' compliance with its underwriting standards and the value of underlying real estate. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase, anticipatory breach, indemnity, and declaratory judgment. The case is proceeding on the remaining claims. We have not concluded that a loss related to this matter is probable, nor have we accrued a liability related to this matter. On September 28, 2012, a second lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 12-cv-7319). The plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2006-3 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 96 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12 , is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit. On April 5, 2013, a third lawsuit was filed by Homeward in the United States District Court for the Southern District of New York against SCC. The suit, styled Homeward Residential, Inc. v. Sand Canyon Corporation (Case No. 13-cv-2107), was filed as a related matter to the September 2012 Homeward suit mentioned above. In this April 2013 lawsuit, the plaintiff, in its capacity as the master servicer for Option One Mortgage Loan Trust 2007-4 and for the benefit of the trustee and the certificate holders of such trust, asserts claims for breach of contract and indemnity in connection with losses allegedly incurred as a result of the breach of representations and warranties relating to 159 loans sold to the trust. The plaintiff seeks specific performance of alleged repurchase obligations or damages to compensate the trust and its certificate holders for alleged actual and anticipated losses. In response to a motion filed by SCC, the court dismissed the plaintiff's claims for breach of the duty to cure or repurchase and for indemnification of its costs associated with the litigation. The case is proceeding on the remaining claims. A portion of the accrual for representation and warranty claims, as discussed in note 12 , is related to loans in this case. We have not concluded that a loss related to this lawsuit is probable, nor have we accrued a liability related to this lawsuit. Underwriters and depositors are, or have been, involved in multiple lawsuits related to securitization transactions in which SCC participated. These lawsuits allege or alleged a variety of claims, including violations of federal and state securities laws and common law fraud, based on alleged materially inaccurate or misleading disclosures. SCC has received notices of claims for indemnification relating to lawsuits to which underwriters or depositors are party. Based on information currently available to SCC, it believes that the 22 lawsuits in which notice of a claim has been made involve 39 securitization transactions with original investments of approximately $14 billion (of which the outstanding principal amount is approximately $4 billion ). Because SCC has not been a party to these lawsuits (with the exception of Federal Home Loan Bank of Chicago v. Bank of America Funding Corporation, et al. , filed in the Circuit Court of Cook County, Illinois (Case No. 10CH45033) and settled as to SCC in August 2015), and has not had control of this litigation or any settlements thereof, SCC does not have precise information about the amount of damages or other remedies being asserted, the defenses to the claims in such lawsuits or the terms of any settlements of such lawsuits. SCC therefore cannot reasonably estimate the amount of potential losses or associated fees and expenses that may be incurred in connection with such lawsuits, which may be material. Additional lawsuits against the underwriters or depositors may be filed in the future, and SCC may receive additional notices of claims for indemnification from underwriters or depositors with respect to existing or new lawsuits or settlements of such lawsuits. Certain of the notices received included, and future notices may include, a reservation of rights, which are referred to as "reserved contribution rights," that encompasses a right of contribution which may become operative if indemnification is unavailable or insufficient to cover all of the losses and expenses involved. We have not concluded that a loss related to any of these indemnification claims or reserved contribution rights is probable, nor have we accrued a liability related to any of these claims or rights. Securitization trustees also are, or have been, involved in lawsuits related to securitization transactions in which SCC participated. Plaintiffs in these lawsuits allege, among other things, that originators, depositors, servicers or other parties breached their representations and warranties or otherwise failed to fulfill their obligations, including that securitization trustees breached their contractual obligations, breached their fiduciary duties, or violated statutory requirements by failing to properly protect the certificate holders’ interests. SCC may receive notices for indemnification with respect to existing or new lawsuits or settlements of such lawsuits in its capacity as originator, depositor, or servicer. We have not concluded that a loss related to any indemnification claims by securitization trustees is probable, nor have we accrued a liability for such claims. LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS – Compliance Fee Litigation. On April 16, 2012, a putative class action lawsuit was filed against us in the Circuit Court of Jackson County, Missouri styled Manuel H. Lopez III v. H&R Block, Inc., et al. (Case # 1216CV12290) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff seeks to represent all Missouri citizens who were charged the compliance fee, and asserts claims of violation of the Missouri Merchandising Practices Act, money had and received, and unjust enrichment. We filed a motion to compel arbitration of the 2011 claims. The court denied the motion. We filed an appeal. On May 6, 2014, the Missouri Court of Appeals, Western District, reversed the ruling of the trial court and remanded the case for further consideration of the motion. On March 12, 2015, the trial court denied the motion on remand. We filed an additional appeal. On March 8, 2016, the appellate court affirmed the decision of the trial court. We filed an application for transfer of the appeal in the Supreme Court of Missouri, which was denied. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. On April 19, 2012, a putative class action lawsuit was filed against us in the United States District Court for the Western District of Missouri styled Ronald Perras v. H&R Block, Inc., et al. (Case No. 4:12-cv-00450-DGK) concerning a compliance fee charged to retail tax clients in the 2011 and 2012 tax seasons. The plaintiff originally sought to represent all persons nationwide (excluding citizens of Missouri) who were charged the compliance fee, and asserted claims of violation of various state consumer laws, money had and received, and unjust enrichment. In November 2013, the court compelled arbitration of the 2011 claims and stayed all proceedings with respect to those claims. In June 2014, the court denied class certification of the remaining 2012 claims. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which was denied on June 18, 2015. In January 2016, the plaintiff filed an amended complaint asserting claims of violation of Missouri and California state consumer laws, money had and received, and unjust enrichment, along with a motion to certify a class of all persons (excluding citizens of Missouri) who were charged the compliance fee in the state of California. We subsequently filed a motion for summary judgment on all claims. On April 29, 2016, the court granted our motion for summary judgment on all claims and denied the plaintiff's motion for class certification as moot. The plaintiff filed an appeal with the Eighth Circuit Court of Appeals, which remains pending. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. LITIGATION, CLAIMS AND OTHER LOSS CONTINGENCIES PERTAINING TO OTHER DISCONTINUED OPERATIONS – Express IRA Litigation. On January 2, 2008, the Mississippi Attorney General in the Chancery Court of Hinds County, Mississippi First Judicial District (Case No. G 2008 6 S 2) filed a lawsuit regarding our former Express IRA product that is styled Jim Hood, Attorney for the State of Mississippi v. H&R Block, Inc., H&R Block Financial Advisors, Inc ., et al. The complaint alleges fraudulent business practices, deceptive acts and practices, common law fraud and breach of fiduciary duty with respect to the sale of the product in Mississippi and seeks equitable relief, disgorgement of profits, damages and restitution, civil penalties and punitive damages. We have not concluded that a loss related to this matter is probable, nor have we accrued a loss contingency related to this matter. Although we sold H&R Block Financial Advisors, Inc. (HRBFA) effective November 1, 2008, we remain responsible for any liabilities relating to the Express IRA litigation through an indemnification agreement. OTHER – We are from time to time a party to litigation, claims and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent a class of others similarly situated. While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business or our consolidated financial position, results of operations and cash flows. We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our consolidated financial position, results of operations and cash flows. (in 000s) Three months ended July 31, 2016 2015 Balance, beginning of the period $ 65,265 $ 149,765 Provisions 235 — Payments (40,000 ) — Balance, end of the period $ 25,500 $ 149,765 |
Condensed Consolidating Finan30
Condensed Consolidating Financial Statements (Tables) | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||
Schedule Of Condensed Consolidating Statement Of Operations [Table Text Block] | CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in 000s) Three months ended July 31, 2016 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Total revenues $ — $ 15,504 $ 109,800 $ (119 ) $ 125,185 Cost of revenues — 8,606 202,599 (119 ) 211,086 Selling, general and administrative — 2,480 96,343 — 98,823 Total operating expenses — 11,086 298,942 (119 ) 309,909 Other income, net — 3,679 4,684 (5,395 ) 2,968 Interest expense on external borrowings — (21,314 ) (152 ) — (21,466 ) Other expenses, net (124,662 ) (2,853 ) (14,314 ) 141,502 (327 ) Loss from continuing operations before tax benefit (124,662 ) (16,070 ) (198,924 ) 136,107 (203,549 ) Income tax benefit (989 ) (5,794 ) (75,740 ) — (82,523 ) Net loss from continuing operations (123,673 ) (10,276 ) (123,184 ) 136,107 (121,026 ) Net loss from discontinued operations — (2,646 ) (1 ) — (2,647 ) Net loss (123,673 ) (12,922 ) (123,185 ) 136,107 (123,673 ) Other comprehensive loss (3,571 ) — (3,571 ) 3,571 (3,571 ) Comprehensive loss $ (127,244 ) $ (12,922 ) $ (126,756 ) $ 139,678 $ (127,244 ) | CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (in 000s) Three months ended July 31, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Total revenues $ — $ 24,767 $ 113,044 $ (93 ) $ 137,718 Cost of revenues — 11,755 201,846 (93 ) 213,508 Selling, general and administrative — 4,376 93,816 — 98,192 Total operating expenses — 16,131 295,662 (93 ) 311,700 Other income, net 909 495 554 (1,525 ) 433 Interest expense on external borrowings — (8,436 ) (139 ) — (8,575 ) Other expenses, net (102,593 ) (468 ) (12,255 ) 110,331 (4,985 ) Income (loss) from continuing operations before taxes (benefit) (101,684 ) 227 (194,458 ) 108,806 (187,109 ) Income taxes (benefit) (2,025 ) 3,286 (91,865 ) — (90,604 ) Net loss from continuing operations (99,659 ) (3,059 ) (102,593 ) 108,806 (96,505 ) Net loss from discontinued operations — (3,154 ) — — (3,154 ) Net loss (99,659 ) (6,213 ) (102,593 ) 108,806 (99,659 ) Other comprehensive loss (9,974 ) (1,187 ) (9,974 ) 11,161 (9,974 ) Comprehensive loss $ (109,633 ) $ (7,400 ) $ (112,567 ) $ 119,967 $ (109,633 ) |
Schedule Of Condensed Consolidating Balance Sheet [Table Text Block] | CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of July 31, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 286,165 $ 1,013,707 $ (490 ) $ 1,299,382 Cash & cash equivalents - restricted — 11,806 49,234 — 61,040 Receivables, net 1 77,539 25,654 — 103,194 Deferred tax assets and income taxes receivable — 78,184 82,206 — 160,390 Prepaid expenses and other current assets — 6,374 74,176 — 80,550 Investments in AFS securities — 404,221 2,139 — 406,360 Total current assets 1 864,289 1,247,116 (490 ) 2,110,916 Mortgage loans held for investment, net — 230,130 — — 230,130 Property and equipment, net — 210 297,111 — 297,321 Intangible assets, net — — 417,009 — 417,009 Goodwill — — 454,394 — 454,394 Deferred tax assets and income taxes receivable — 41,328 — (29,951 ) 11,377 Investments in subsidiaries 1,259,110 — 108,582 (1,367,692 ) — Amounts due from affiliates 412,924 131,889 1,423 (546,236 ) — Other noncurrent assets — 69,215 39,092 — 108,307 Total assets $ 1,672,035 $ 1,337,061 $ 2,564,727 $ (1,944,369 ) $ 3,629,454 Customer banking deposits $ — $ 477,222 $ — $ (490 ) $ 476,732 Accounts payable and accrued expenses 1,206 6,679 108,970 — 116,855 Accrued salaries, wages and payroll taxes — 2,293 31,154 — 33,447 Accrued income taxes and reserves for uncertain tax positions — 49,240 196,301 — 245,541 Current portion of long-term debt — — 799 — 799 Deferred revenue and other current liabilities — 169,900 146,980 — 316,880 Total current liabilities 1,206 705,334 484,204 (490 ) 1,190,254 Long-term debt — 494,727 7,233 — 501,960 Deferred tax liabilities and reserves for uncertain tax positions — 26,737 140,817 (29,951 ) 137,603 Deferred revenue and other noncurrent liabilities — 1,660 128,550 — 130,210 Amounts due to affiliates 1,402 21 544,813 (546,236 ) — Total liabilities 2,608 1,228,479 1,305,617 (576,677 ) 1,960,027 Stockholders' equity 1,669,427 108,582 1,259,110 (1,367,692 ) 1,669,427 Total liabilities and stockholders' equity $ 1,672,035 $ 1,337,061 $ 2,564,727 $ (1,944,369 ) $ 3,629,454 CONDENSED CONSOLIDATING BALANCE SHEETS (in 000s) As of April 30, 2016 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Cash & cash equivalents $ — $ 9,025 $ 887,776 $ — $ 896,801 Cash & cash equivalents - restricted — 29,004 75,106 — 104,110 Receivables, net — 71,882 81,234 — 153,116 Prepaid expenses and other current assets — 6,925 58,516 — 65,441 Investments in AFS securities — — 1,133 — 1,133 Total current assets — 116,836 1,103,765 — 1,220,601 Mortgage loans held for investment, net — 202,385 — — 202,385 Property and equipment, net — 136 293,429 — 293,565 Intangible assets, net — — 433,885 — 433,885 Goodwill — — 470,757 — 470,757 Deferred tax assets and income taxes receivable 5,917 77,270 36,936 — 120,123 Investments in subsidiaries 1,738,643 — 108,995 (1,847,638 ) — Amounts due from affiliates — 1,307,612 1,714,009 (3,021,621 ) — Other noncurrent assets — 62,806 43,103 — 105,909 Total assets $ 1,744,560 $ 1,767,045 $ 4,204,879 $ (4,869,259 ) $ 2,847,225 Accounts payable and accrued expenses $ 1,531 $ 18,596 $ 239,459 $ — $ 259,586 Accrued salaries, wages and payroll taxes — 1,766 160,020 — 161,786 Accrued income taxes and reserves for uncertain tax positions — 52,976 320,778 — 373,754 Current portion of long-term debt — — 826 — 826 Deferred revenue and other current liabilities — 87,982 155,671 — 243,653 Total current liabilities 1,531 161,320 876,754 — 1,039,605 Long-term debt — 1,484,766 6,609 — 1,491,375 Deferred tax liabilities and reserves for uncertain tax positions 5,917 10,786 116,257 — 132,960 Deferred revenue and other noncurrent liabilities — 1,178 159,004 — 160,182 Amounts due to affiliates 1,714,009 — 1,307,612 (3,021,621 ) — Total liabilities 1,721,457 1,658,050 2,466,236 (3,021,621 ) 2,824,122 Stockholders' equity 23,103 108,995 1,738,643 (1,847,638 ) 23,103 Total liabilities and stockholders' equity $ 1,744,560 $ 1,767,045 $ 4,204,879 $ (4,869,259 ) $ 2,847,225 | |
Schedule of Condensed Consolidating Statement of Cash Flows [Text Block] | CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in 000s) Three months ended July 31, 2016 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Net cash used in operating activities: $ — $ (57,939 ) $ (417,736 ) $ — $ (475,675 ) Cash flows from investing: Sales, maturities of and payments received on AFS securities — 58 — — 58 Principal payments on mortgage loans held for investment, net — 8,427 — — 8,427 Capital expenditures — (5 ) (6,241 ) — (6,246 ) Payments made for business acquisitions, net of cash acquired — — (1,635 ) — (1,635 ) Loans made to franchisees — (2,202 ) (17 ) — (2,219 ) Repayments from franchisees — 6,305 168 — 6,473 Intercompany borrowings (payments) — 40,217 (92,187 ) 51,970 — Other, net — 16 204 — 220 Net cash provided by (used in) investing activities — 52,816 (99,708 ) 51,970 5,078 Cash flows from financing: Dividends paid (48,514 ) — — — (48,514 ) Repurchase of common stock, including shares surrendered (45,312 ) — — — (45,312 ) Proceeds from exercise of stock options 1,639 — — — 1,639 Intercompany borrowings (payments) 92,187 — (40,217 ) (51,970 ) — Other, net — — (24,779 ) — (24,779 ) Net cash provided by (used in) financing activities — — (64,996 ) (51,970 ) (116,966 ) Effects of exchange rates on cash — — (2,367 ) — (2,367 ) Net decrease in cash and cash equivalents — (5,123 ) (584,807 ) — (589,930 ) Cash and cash equivalents at beginning of the period — 9,025 887,776 — 896,801 Cash and cash equivalents at end of the period $ — $ 3,902 $ 302,969 $ — $ 306,871 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in 000s) Three months ended July 31, 2015 H&R Block, Inc. (Guarantor) Block Financial (Issuer) Other Subsidiaries Eliminations Consolidated H&R Block Net cash provided by (used in) operating activities: $ — $ 27,342 $ (405,588 ) $ — $ (378,246 ) Cash flows from investing: Sales, maturities of and payments received on AFS securities — 28,339 3,764 — 32,103 Principal payments on mortgage loans held for investment, net — 8,537 — — 8,537 Capital expenditures — (19 ) (8,670 ) — (8,689 ) Payments made for business acquisitions, net of cash acquired — — (12,271 ) — (12,271 ) Loans made to franchisees — (2,582 ) — — (2,582 ) Repayments from franchisees — 11,288 146 — 11,434 Intercompany borrowings (payments) — 2,226 (59,804 ) 57,578 — Other, net — 1,439 2,123 — 3,562 Net cash provided by (used in) investing activities — 49,228 (74,712 ) 57,578 32,094 Cash flows from financing: Customer banking deposits, net — (268,482 ) — (50 ) (268,532 ) Dividends paid (55,063 ) — — — (55,063 ) Repurchase of common stock, including shares surrendered (17,756 ) — — — (17,756 ) Proceeds from exercise of stock options 13,015 — — — 13,015 Intercompany borrowings (payments) 59,804 — (2,226 ) (57,578 ) — Other, net — — (22,413 ) — (22,413 ) Net cash used in financing activities — (268,482 ) (24,639 ) (57,628 ) (350,749 ) Effects of exchange rates on cash — — (10,907 ) — (10,907 ) Net decrease in cash and cash equivalents — (191,912 ) (515,846 ) (50 ) (707,808 ) Cash and cash equivalents at beginning of the period — 478,077 1,529,553 (440 ) 2,007,190 Cash and cash equivalents at end of the period $ — $ 286,165 $ 1,013,707 $ (490 ) $ 1,299,382 |
Loss Per Share and Stockholde31
Loss Per Share and Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 4,700 | 5,000 |
Net loss from continuing operations attributable to shareholders | $ (121,026) | $ (96,505) |
Amounts allocated to participating securities | (124) | (102) |
Net loss from continuing operations attributable to common shareholders | $ (121,150) | $ (96,607) |
Basic weighted average common shares (in shares) | 220,484 | 275,765 |
Potential dilutive shares (in shares) | 0 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 220,484 | 275,765 |
Basic (in usd per share) | $ (0.55) | $ (0.35) |
Narrative Details [Abstract] | ||
Stock Repurchased and Retired During Period, Shares | 2,000 | |
Stock Repurchased and Retired During Period, Value | $ 48,594 | |
Accelerated Share Repurchases, Final Price Paid Per Share | $ 23.84 | |
Shares repurchased during the period, (in shares) | 200 | 600 |
Shares repurchased during the period, Value | $ 5,600 | $ 17,800 |
Shares issued during period (in shares) | 900 | 1,600 |
Nonvested units granted | 1,100 | |
Stock-based compensation | $ 5,500 | $ 6,000 |
Unrecognized compensation costs, options | 500 | |
Unrecognized compensation costs, nonvested shares and units | 48,700 | |
Common Stock [Member] | ||
Narrative Details [Abstract] | ||
Stock Repurchased and Retired During Period, Value | 20 | |
Additional Paid-in Capital [Member] | ||
Narrative Details [Abstract] | ||
Stock Repurchased and Retired During Period, Value | 1,223 | |
Retained Earnings [Member] | ||
Narrative Details [Abstract] | ||
Stock Repurchased and Retired During Period, Value | $ 47,351 |
Receivables (Narrative) (Detail
Receivables (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Document Fiscal Year Focus | 2,017 | ||
Impaired non-accrual status term, days | 60 days | ||
Total Portfolio | $ 196,074 | $ 206,208 | $ 235,848 |
Loans to franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing Receivable, Recorded Investment, Past Due | 2,600 | 300 | 1,500 |
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Non-accrual status loans | 21,400 | 21,100 | 17,400 |
Term Loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, net | 31,500 | 35,100 | 38,400 |
Revolving Lines Of Credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Receivables, net | 62,800 | 61,200 | 75,700 |
Cash Back® receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Short-term | $ 600 | $ 1,500 | $ 600 |
Receivables (Schedule Of Short-
Receivables (Schedule Of Short-Term Receivables) (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | $ 159,806 | $ 210,127 | $ 156,965 |
Accounts Receivable, Gross, Noncurrent | 56,514 | 60,407 | 72,427 |
Allowance for doubtful accounts | (56,381) | (57,011) | (53,771) |
Allowance for Doubtful Accounts Receivable, Noncurrent | 0 | 0 | 0 |
Receivables, net | 103,425 | 153,116 | 103,194 |
Accounts Receivable, Net, Noncurrent | 56,514 | 60,407 | 72,427 |
Loans to franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 47,905 | 50,000 | 56,277 |
Accounts Receivable, Gross, Noncurrent | 46,461 | 46,284 | 57,792 |
Receivables for tax preparation and related fees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 39,115 | 52,327 | 39,927 |
Accounts Receivable, Gross, Noncurrent | 5,528 | 5,528 | 6,103 |
Cash Back® receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 4,515 | 37,663 | 2,777 |
Accounts Receivable, Gross, Noncurrent | 0 | 0 | 0 |
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 24,857 | 25,092 | 20,321 |
Accounts Receivable, Gross, Noncurrent | 111 | 869 | 598 |
Allowance for doubtful accounts | (9,458) | (9,007) | |
Royalties from franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 6,885 | 9,997 | 4,509 |
Accounts Receivable, Gross, Noncurrent | 0 | 0 | 0 |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 36,529 | 35,048 | 33,154 |
Accounts Receivable, Gross, Noncurrent | $ 4,414 | $ 7,726 | $ 7,934 |
Receivables (Schedule Of Loans
Receivables (Schedule Of Loans Receivable) (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | $ 159,806 | $ 210,127 | $ 156,965 |
Accounts Receivable, Gross, Noncurrent | 56,514 | 60,407 | 72,427 |
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 24,857 | 25,092 | 20,321 |
Accounts Receivable, Gross, Noncurrent | 111 | 869 | 598 |
Financing Receivable, Gross | 24,968 | ||
Loans to franchisees | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 47,905 | 50,000 | 56,277 |
Accounts Receivable, Gross, Noncurrent | 46,461 | 46,284 | 57,792 |
Cash Back® receivables | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross, Current | 4,515 | 37,663 | 2,777 |
Accounts Receivable, Gross, Noncurrent | $ 0 | $ 0 | $ 0 |
Receivables (Schedule Of Receiv
Receivables (Schedule Of Receivables Based On Year Of Origination) (Details) - Emerald Advance lines of credit $ in Thousands | Jul. 31, 2016USD ($) |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | $ 24,968 |
Year Of Origination2015 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | 9,224 |
Year Of Origination2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | 182 |
Revolving Loans | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Financing Receivable, Gross | $ 15,562 |
Receivables (Schedule Of Activi
Receivables (Schedule Of Activity In The Allowance For Doubtful Accounts) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | $ 56,381 | $ 53,771 | $ 57,011 |
Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | 54,527 | ||
Provision | 1,417 | 713 | |
Charge-offs | (2,047) | (1,469) | |
Ending balance | 53,771 | ||
Emerald Advance lines of credit | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | 9,458 | 9,007 | |
Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | 7,353 | ||
Provision | 451 | 0 | |
Charge-offs | 0 | 0 | |
Ending balance | 7,353 | ||
All Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | 46,923 | $ 48,004 | |
Allowance for Doubtful Accounts [Roll Forward] | |||
Beginning balance | 47,174 | ||
Provision | 966 | 713 | |
Charge-offs | $ (2,047) | (1,469) | |
Ending balance | $ 46,418 |
Mortgage Loans Held For Inves37
Mortgage Loans Held For Investment And Related Assets (Narrative) (Details) | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 |
Mortgage Loans Held For Investment And Related Assets [Abstract] | |||
Allowance as Percent of Principal | 2.70% | 2.70% | 3.20% |
Mortgage Loans Held For Inves38
Mortgage Loans Held For Investment And Related Assets (Schedule Of Mortgage Loan Portfolio) (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | Apr. 30, 2015 |
Mortgage Loans Held For Investment And Related Assets [Abstract] | ||||
Adjustable-rate loans | $ 102,535 | $ 108,251 | $ 124,752 | |
Adjustable-rate loans, percent of total loans | 52.00% | 52.00% | 53.00% | |
Fixed-rate loans | $ 93,539 | $ 97,957 | $ 111,096 | |
Fixed-rate loans, percent of Total loans | 48.00% | 48.00% | 47.00% | |
Total loans | $ 196,074 | $ 206,208 | $ 235,848 | |
Total loans, percent of Total loans | 100.00% | 100.00% | 100.00% | |
Unamortized deferred fees and costs | $ 1,611 | $ 1,695 | $ 1,941 | |
Less: Allowance for loan losses | (5,310) | (5,518) | (7,659) | $ (7,886) |
Total | $ 192,375 | $ 202,385 | $ 230,130 |
Mortgage Loans Held For Inves39
Mortgage Loans Held For Investment And Related Assets (Schedule Of Allowance For Loan Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Loans and Leases Rollforward [Roll Forward] | ||
Balance at beginning of the period | $ 5,518 | $ 7,886 |
Provision | 0 | (28) |
Recoveries | 370 | 365 |
Charge-offs | (578) | (564) |
Balance at end of the period | $ 5,310 | $ 7,659 |
Mortgage Loans Held For Inves40
Mortgage Loans Held For Investment And Related Assets (Schedule Of Past Due Mortgage Loans) (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | |
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | $ 196,074 | $ 206,208 | $ 235,848 | |
Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 116,489 | |||
All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 79,585 | |||
Less than 60 Days Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 10,306 | |||
Less than 60 Days Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 8,849 | |||
Less than 60 Days Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 1,457 | |||
60 – 89 Days Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 1,094 | |||
60 – 89 Days Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 745 | |||
60 – 89 Days Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 349 | |||
90 Days Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | [1] | 43,739 | ||
90 Days Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | [1] | 38,503 | ||
90 Days Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | [1] | 5,236 | ||
Total Past Due | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 55,139 | |||
Total Past Due | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 48,097 | |||
Total Past Due | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 7,042 | |||
Current | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 140,935 | |||
Current | Purchased From SCC | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | 68,392 | |||
Current | All Other | ||||
Mortgage Loans Held For Investment And Related Assets [Line Items] | ||||
Total Portfolio | $ 72,543 | |||
[1] | We do not accrue interest on loans past due 90 days or more. |
Goodwill And Intangible Asset41
Goodwill And Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 18 | $ 16.6 |
Estimated amortization, 2015 | 26.1 | |
Estimated amortization, 2016 | 76.7 | |
Estimated amortization, 2017 | 66.1 | |
Estimated amortization, 2018 | 51.7 | |
Estimated amortization, 2019 | $ 37.3 |
Goodwill And Intangible Asset42
Goodwill And Intangible Assets (Schedule Of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill before impairment losses, beginning balance | $ 503,054 | $ 474,128 |
Accumulated impairment losses, beginning balance | (32,297) | (32,297) |
Goodwill, beginning balance | 470,757 | 441,831 |
Acquisitions | 23 | 14,030 |
Disposals and foreign currency changes, net | (162) | 1,467 |
Impairments | 0 | 0 |
Goodwill before impairment losses, ending balance | 503,239 | 486,691 |
Accumulated impairment losses, ending balance | (32,297) | (32,297) |
Goodwill, ending balance | $ 470,942 | $ 454,394 |
Goodwill And Intangible Asset43
Goodwill And Intangible Assets (Schedule Of Intangible Assets) (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 |
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 766,739 | $ 762,984 | $ 689,915 |
Accumulated Amortization | (346,830) | (329,099) | (272,906) |
Net | 419,909 | 433,885 | 417,009 |
Reacquired Franchise Rights [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 319,545 | 319,354 | 294,918 |
Accumulated Amortization | (72,977) | (68,284) | (51,233) |
Net | 246,568 | 251,070 | 243,685 |
Customer Relationships [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 206,606 | 206,607 | 169,998 |
Accumulated Amortization | (110,696) | (104,072) | (83,471) |
Net | 95,910 | 102,535 | 86,527 |
Software and Software Development Costs [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 132,897 | 131,161 | 120,522 |
Accumulated Amortization | (99,873) | (95,768) | (84,215) |
Net | 33,024 | 35,393 | 36,307 |
Noncompete Agreements [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 31,492 | 31,499 | 30,576 |
Accumulated Amortization | (26,045) | (25,572) | (24,091) |
Net | 5,447 | 5,927 | 6,485 |
Franchise Rights [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 19,201 | 19,201 | 19,201 |
Accumulated Amortization | (9,814) | (9,494) | (8,534) |
Net | 9,387 | 9,707 | 10,667 |
Purchased Technology | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 54,700 | 54,700 | 54,700 |
Accumulated Amortization | (27,425) | (25,909) | (21,362) |
Net | 27,275 | 28,791 | $ 33,338 |
Other Intangible Assets [Member] | |||
Goodwill and Intangible Assets [Line Items] | |||
Gross Carrying Amount | 2,298 | 462 | |
Accumulated Amortization | 0 | 0 | |
Net | $ 2,298 | $ 462 |
Long-Term Debt (Details)
Long-Term Debt (Details) | Aug. 31, 2016USD ($) | Jul. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Jul. 31, 2015USD ($) |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 1,492,654,000 | $ 1,492,201,000 | $ 502,759,000 | |
Less: Current portion | (864,000) | (826,000) | (799,000) | |
Long-term debt excluding current portion | 1,491,790,000 | 1,491,375,000 | 501,960,000 | |
Maximum borrowing capacity | 1,300,000,000 | |||
Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Line of Credit, Noncurrent | $ 50,000,000 | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,000,000,000 | |||
Available increase in borrowing capacity | $ 500,000,000 | |||
Maximum quarterly debt-to-EBITDA ratio | 3.50 | |||
Maximum annual debt-to-EBITDA ratio | 4.50 | |||
Minimum interest coverage ratio | 2.50 | |||
Swingline Loans [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 200,000,000 | |||
Standby Letters of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 100,000,000 | |||
Capital Lease Obligations [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 7,229,000 | 7,435,000 | 8,031,000 | |
Unamortized Debt Issuance Expense | (14,575,000) | (15,234,000) | (5,272,000) | |
Senior Notes due 2020 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 650,000,000 | 650,000,000 | ||
Senior Notes due 2022 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 500,000,000 | 500,000,000 | $ 500,000,000 | |
Senior Notes due 2025 [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 350,000,000 | $ 350,000,000 |
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, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | Apr. 30, 2015 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Cash & cash equivalents | $ 306,871 | $ 896,801 | $ 1,299,382 | $ 2,007,190 |
Cash and cash equivalents, Estimated Fair Value | 306,871 | 896,801 | ||
Cash and cash equivalents - restricted, Carrying Amount | 122,025 | 104,110 | 61,040 | |
Cash and cash equivalents - restricted, Estimated Fair Value | 122,025 | 104,110 | ||
Receivables, net | 103,425 | 153,116 | 103,194 | |
Receivables, net - short-term, Estimated Fair Value | 103,425 | 153,116 | ||
Mortgage loans held for investment, less allowance for loan losses of $5,310, $7,659 and $5,518 | 192,375 | 202,385 | 230,130 | |
Loans Receivable, Fair Value Disclosure | 185,057 | 190,503 | ||
Investments in available-for-sale securities, Estimated Fair Value | 1,123 | 1,133 | ||
Accounts Receivable, Net, Noncurrent | 56,514 | 60,407 | 72,427 | |
Receivables, net - long-term, Estimated Fair Value | 56,514 | 60,407 | 72,427 | |
Total Portfolio | 196,074 | 206,208 | 235,848 | |
Deposits, Estimated Fair Value | 0 | 0 | 473,720 | |
Long-term Debt | 1,492,654 | 1,492,201 | ||
Long-term borrowings, Estimated Fair Value | 1,606,364 | 1,566,098 | ||
Contingent consideration payments, carrying amount | 8,347 | 8,657 | ||
Contingent consideration payments, estimated fair value | 8,347 | 8,657 | ||
Level 1 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Cash and cash equivalents, Estimated Fair Value | 1,299,382 | |||
Cash and cash equivalents - restricted, Estimated Fair Value | 61,040 | |||
Receivables, net - short-term, Estimated Fair Value | 103,194 | |||
Level 3 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Loans Receivable, Fair Value Disclosure | 184,277 | |||
Long-term Debt | 502,759 | |||
Long-term borrowings, Estimated Fair Value | 552,431 | |||
Contingent consideration payments, carrying amount | 10,650 | |||
Contingent consideration payments, estimated fair value | 10,650 | |||
Level 2 | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Investments in available-for-sale securities, Estimated Fair Value | 407,426 | |||
HRB Bank [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Deposits, Carrying Amount | $ 0 | $ 0 | $ 477,145 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized Tax Benefits | $ 106,000 | $ 76,500 | $ 111,500 |
Unrecognized Tax Benefits, Period Increase (Decrease) | (5,500) | (9,800) | |
Effect of anticipated settlements of audit issues and expiring statutes of limitations | 7,500 | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 13,900 | ||
Accrued income taxes and reserves for uncertain tax positions | $ 216,390 | $ 245,541 | $ 373,754 |
Effective Income Tax Rate Reconciliation, Percent | 40.50% | 48.40% | |
Net Discreet Tax Expense (Benefit) | $ 6,800 | $ (20,600) | |
Effective tax rate, impact of discrete tax items | 3.30% | 11.00% |
Interest Income And Interest 47
Interest Income And Interest Expense (Schedule Of Interest Income And Expense Of Continuing Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Schedule Of Interest Income And Expense [Line Items] | ||
Other Nonoperating Income | $ 2,968 | $ 433 |
Interest expense on borrowings | (21,466) | (8,575) |
Other income, net | (327) | (4,985) |
Mortgage Loans, Net | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Other Nonoperating Income | 1,537 | 0 |
AFS Securities | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Other Nonoperating Income | 31 | 0 |
Other | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Other Nonoperating Income | 1,400 | 433 |
Borrowings | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest expense on borrowings | (21) | (4,599) |
Deposits | ||
Schedule Of Interest Income And Expense [Line Items] | ||
Interest Expense, Deposits | $ (306) | $ (386) |
Commitments And Contingencies48
Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Commitments And Contingencies [Line Items] | ||||
Standard guarantee accrual amount | $ 5,800 | $ 7,600 | $ 7,000 | |
Contingent business acquisition obligations | 8,347 | 8,657 | ||
Lines of credit, total obligation | 59,400 | |||
Remaining franchise equity lines of credit-undrawn commitment | 28,100 | |||
Amounts deferred for new extended service plans issued | 978 | 983 | ||
Deferred Revenue, Revenue Recognized | (31,650) | (31,069) | ||
Deferred Revenue | $ 173,670 | 159,693 | $ 204,342 | $ 189,779 |
Level 3 | ||||
Commitments And Contingencies [Line Items] | ||||
Contingent business acquisition obligations | $ 10,650 |
Commitments And Contingencies49
Commitments And Contingencies (Schedule Of Deferred Revenue Related To The Peace Of Mind Program) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Movement in Deferred Revenue [Roll Forward] | ||
Balance, beginning of the period | $ 204,342 | $ 189,779 |
Amounts deferred for new extended service plans issued | 978 | 983 |
Revenue recognized on previous deferrals | (31,650) | (31,069) |
Balance, end of the period | $ 173,670 | $ 159,693 |
Litigation And Related Contin50
Litigation And Related Contingencies (Details) $ in Millions | 35 Months Ended | |||
Nov. 30, 2007securities | Jul. 31, 2016USD ($) | Apr. 30, 2016USD ($)loanlawsuit | Jul. 31, 2015USD ($) | |
Loss Contingencies [Line Items] | ||||
Loss Contingency Accrual | $ 2.3 | $ 2.3 | $ 9.3 | |
Securitization Transactions | securities | 39 | |||
SCC [Member] | ||||
Loss Contingencies [Line Items] | ||||
Original Principal Amount of Loans Securitized | $ 14,000 | |||
SCC [Member] | Claims with Knowledge of Outstanding Principal Amount [Member] | ||||
Loss Contingencies [Line Items] | ||||
Initial principal on loans securitized | $ 4,000 | |||
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number Of Lawsuits | lawsuit | 22 | |||
MGRID LLC v. Merrill Lynch Mortgage Lending Inc [Member] | SCC [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loans Sold To Trust, With Claims of Breach of Contract and Indemnity | loan | 159 |
Loss Contingencies Arising Fr51
Loss Contingencies Arising From Representations and Warranties of Our Discontinued Mortgage Operations (Narrative) (Details) - USD ($) $ in Thousands | 36 Months Ended | 60 Months Ended | 99 Months Ended | |||
Apr. 30, 2007 | Apr. 30, 2013 | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | Apr. 30, 2015 | |
Loss Contingencies [Line Items] | ||||||
Percentage of fraud on originated loans | 68.00% | |||||
Claims received for loans | $ 1,900,000 | $ 2,600,000 | ||||
Loss Contingency Accrual | 2,300 | $ 2,300 | $ 9,300 | |||
Principal Assets of SCC | 347,000 | |||||
SCC [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual, Product Liability, Gross | $ 25,500 | $ 65,265 | $ 149,765 | $ 149,765 |
Loss Contingencies Arising Fr52
Loss Contingencies Arising From Representations And Warranties of Our Discontinued Mortgage Operations (Details) - SCC [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Loss Contingency Accrual [Roll Forward] | ||
Balance, beginning of the period | $ 65,265 | $ 149,765 |
Provisions | 235 | 0 |
Payments | (40,000) | 0 |
Balance, end of the period | $ 25,500 | $ 149,765 |
Condensed Consolidating Finan53
Condensed Consolidating Financial Statements (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | $ 2,968 | $ 433 |
Total revenues | 125,185 | 137,718 |
Cost of revenues | 211,086 | 213,508 |
Selling, general and administrative | 98,823 | 98,192 |
Total operating expenses | 309,909 | 311,700 |
Interest expense on borrowings | (21,466) | (8,575) |
Other income, net | (327) | (4,985) |
Loss from continuing operations before income tax benefit | (203,549) | (187,109) |
Income tax benefit | (82,523) | (90,604) |
Net loss from continuing operations | (121,026) | (96,505) |
Net income (loss) from discontinued operations | (2,647) | (3,154) |
Net loss | (123,673) | (99,659) |
Other comprehensive income (loss) | (3,571) | (9,974) |
Comprehensive loss | (127,244) | (109,633) |
Block Financial Issuer [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | 3,679 | 495 |
Total revenues | 15,504 | 24,767 |
Cost of revenues | 8,606 | 11,755 |
Selling, general and administrative | 2,480 | 4,376 |
Total operating expenses | 11,086 | 16,131 |
Interest expense on borrowings | (21,314) | (8,436) |
Other income, net | (2,853) | (468) |
Loss from continuing operations before income tax benefit | (16,070) | 227 |
Income tax benefit | (5,794) | 3,286 |
Net loss from continuing operations | (10,276) | (3,059) |
Net income (loss) from discontinued operations | (2,646) | (3,154) |
Net loss | (12,922) | (6,213) |
Other comprehensive income (loss) | (1,187) | |
Comprehensive loss | (12,922) | (7,400) |
Subsidiaries [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | 4,684 | 554 |
Total revenues | 109,800 | 113,044 |
Cost of revenues | 202,599 | 201,846 |
Selling, general and administrative | 96,343 | 93,816 |
Total operating expenses | 298,942 | 295,662 |
Interest expense on borrowings | (152) | (139) |
Other income, net | (14,314) | (12,255) |
Loss from continuing operations before income tax benefit | (198,924) | (194,458) |
Income tax benefit | (75,740) | (91,865) |
Net loss from continuing operations | (123,184) | (102,593) |
Net income (loss) from discontinued operations | (1) | |
Net loss | (123,185) | (102,593) |
Other comprehensive income (loss) | (3,571) | (9,974) |
Comprehensive loss | (126,756) | (112,567) |
Parent Company [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | 909 | |
Interest expense on borrowings | 0 | 0 |
Other income, net | (124,662) | (102,593) |
Loss from continuing operations before income tax benefit | (124,662) | (101,684) |
Income tax benefit | (989) | (2,025) |
Net loss from continuing operations | (123,673) | (99,659) |
Net income (loss) from discontinued operations | 0 | 0 |
Net loss | (123,673) | (99,659) |
Other comprehensive income (loss) | (3,571) | (9,974) |
Comprehensive loss | (127,244) | (109,633) |
Intersegment Eliminations [Member] | ||
Condensed Financial Statements, Captions [Line Items] | ||
Other Nonoperating Income | (5,395) | (1,525) |
Total revenues | (119) | (93) |
Cost of revenues | (119) | (93) |
Total operating expenses | (119) | (93) |
Interest expense on borrowings | 0 | 0 |
Other income, net | 141,502 | 110,331 |
Loss from continuing operations before income tax benefit | 136,107 | 108,806 |
Net loss from continuing operations | 136,107 | 108,806 |
Net loss | 136,107 | 108,806 |
Other comprehensive income (loss) | 3,571 | 11,161 |
Comprehensive loss | $ 139,678 | $ 119,967 |
Condensed Consolidating Finan54
Condensed Consolidating Financial Statements (Balance Sheets) (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | Apr. 30, 2015 |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | $ 306,871 | $ 896,801 | $ 1,299,382 | $ 2,007,190 |
Cash and cash equivalents - restricted | 122,025 | 104,110 | 61,040 | |
Receivables, net | 103,425 | 153,116 | 103,194 | |
Deferred Tax Assets, Net, Current | 160,390 | |||
Prepaid expenses and other current assets | 74,929 | 65,441 | 80,550 | |
Investments in available-for-sale securities | 1,123 | 1,133 | 406,360 | |
Total current assets | 608,373 | 1,220,601 | 2,110,916 | |
Mortgage loans held for investment, net | 192,375 | 202,385 | 230,130 | |
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120 | 284,114 | 293,565 | 297,321 | |
Intangible assets, net | 419,909 | 433,885 | 417,009 | |
Goodwill | 470,942 | 470,757 | 454,394 | 441,831 |
Deferred tax assets and income taxes receivable | 90,498 | 120,123 | 11,377 | |
Amounts due from affiliates | 0 | 0 | 0 | |
Other assets | 97,331 | 105,909 | 108,307 | |
Total assets | 2,163,542 | 2,847,225 | 3,629,454 | |
Customer banking deposits | 476,732 | |||
Accounts payable and accrued expenses | 157,085 | 259,586 | 116,855 | |
Accrued salaries, wages and payroll taxes | 43,516 | 161,786 | 33,447 | |
Accrued income taxes and reserves for uncertain tax positions | 216,390 | 373,754 | 245,541 | |
Current portion of long-term debt | 864 | 826 | 799 | |
Accounts payable and accrued expenses | 191,304 | 243,653 | 316,880 | |
Total current liabilities | 609,159 | 1,039,605 | 1,190,254 | |
Long-term debt | 1,491,790 | 1,491,375 | 501,960 | |
Deferred tax liabilities and reserves for uncertain tax positions | 116,709 | 132,960 | 137,603 | |
Deferred revenue and other noncurrent liabilities | 145,691 | 160,182 | 130,210 | |
Total liabilities | 2,363,349 | 2,824,122 | 1,960,027 | |
Stockholders’ equity | (199,807) | 23,103 | 1,669,427 | |
Total liabilities and stockholders' equity | 2,163,542 | 2,847,225 | 3,629,454 | |
Block Financial Issuer [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | 3,902 | 9,025 | 286,165 | 478,077 |
Cash and cash equivalents - restricted | 29,000 | 29,004 | 11,806 | |
Receivables, net | 72,865 | 71,882 | 77,539 | |
Deferred Tax Assets, Net, Current | 78,184 | |||
Prepaid expenses and other current assets | 7,114 | 6,925 | 6,374 | |
Investments in available-for-sale securities | 404,221 | |||
Total current assets | 112,881 | 116,836 | 864,289 | |
Mortgage loans held for investment, net | 192,375 | 202,385 | 230,130 | |
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120 | 116 | 136 | 210 | |
Deferred tax assets and income taxes receivable | 60,312 | 77,270 | 41,328 | |
Amounts due from affiliates | 1,282,286 | 1,307,612 | 131,889 | |
Other assets | 58,311 | 62,806 | 69,215 | |
Total assets | 1,706,281 | 1,767,045 | 1,337,061 | |
Customer banking deposits | 477,222 | |||
Accounts payable and accrued expenses | 7,671 | 18,596 | 6,679 | |
Accrued salaries, wages and payroll taxes | 1,889 | 1,766 | 2,293 | |
Accrued income taxes and reserves for uncertain tax positions | 52,976 | 52,976 | 49,240 | |
Accounts payable and accrued expenses | 52,420 | 87,982 | 169,900 | |
Total current liabilities | 114,956 | 161,320 | 705,334 | |
Long-term debt | 1,485,426 | 1,484,766 | 494,727 | |
Deferred tax liabilities and reserves for uncertain tax positions | 8,577 | 10,786 | 26,737 | |
Deferred revenue and other noncurrent liabilities | 1,106 | 1,178 | 1,660 | |
Amounts due to affiliates | 21 | |||
Total liabilities | 1,610,065 | 1,658,050 | 1,228,479 | |
Stockholders’ equity | 96,216 | 108,995 | 108,582 | |
Total liabilities and stockholders' equity | 1,706,281 | 1,767,045 | 1,337,061 | |
Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | 302,969 | 887,776 | 1,013,707 | 1,529,553 |
Cash and cash equivalents - restricted | 93,025 | 75,106 | 49,234 | |
Receivables, net | 30,560 | 81,234 | 25,654 | |
Deferred Tax Assets, Net, Current | 82,206 | |||
Prepaid expenses and other current assets | 67,815 | 58,516 | 74,176 | |
Investments in available-for-sale securities | 1,123 | 1,133 | 2,139 | |
Total current assets | 495,492 | 1,103,765 | 1,247,116 | |
Property and equipment, at cost, less accumulated depreciation and amortization of $622,937, $538,823 and $601,120 | 283,998 | 293,429 | 297,111 | |
Intangible assets, net | 419,909 | 433,885 | 417,009 | |
Goodwill | 470,942 | 470,757 | 454,394 | |
Deferred tax assets and income taxes receivable | 30,186 | 36,936 | ||
Investments in subsidiaries | 96,216 | 108,995 | 108,582 | |
Amounts due from affiliates | 1,794,655 | 1,714,009 | 1,423 | |
Other assets | 39,020 | 43,103 | 39,092 | |
Total assets | 3,630,418 | 4,204,879 | 2,564,727 | |
Accounts payable and accrued expenses | 138,863 | 239,459 | 108,970 | |
Accrued salaries, wages and payroll taxes | 41,627 | 160,020 | 31,154 | |
Accrued income taxes and reserves for uncertain tax positions | 163,414 | 320,778 | 196,301 | |
Current portion of long-term debt | 864 | 826 | 799 | |
Accounts payable and accrued expenses | 138,884 | 155,671 | 146,980 | |
Total current liabilities | 483,652 | 876,754 | 484,204 | |
Long-term debt | 6,364 | 6,609 | 7,233 | |
Deferred tax liabilities and reserves for uncertain tax positions | 101,644 | 116,257 | 140,817 | |
Deferred revenue and other noncurrent liabilities | 144,585 | 159,004 | 128,550 | |
Amounts due to affiliates | 1,282,286 | 1,307,612 | 544,813 | |
Total liabilities | 2,018,531 | 2,466,236 | 1,305,617 | |
Stockholders’ equity | 1,611,887 | 1,738,643 | 1,259,110 | |
Total liabilities and stockholders' equity | 3,630,418 | 4,204,879 | 2,564,727 | |
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Receivables, net | 1 | |||
Total current assets | 1 | |||
Deferred tax assets and income taxes receivable | 5,917 | |||
Investments in subsidiaries | 1,611,887 | 1,738,643 | 1,259,110 | |
Amounts due from affiliates | 0 | 412,924 | ||
Total assets | 1,611,887 | 1,744,560 | 1,672,035 | |
Accounts payable and accrued expenses | 10,551 | 1,531 | 1,206 | |
Total current liabilities | 10,551 | 1,531 | 1,206 | |
Deferred tax liabilities and reserves for uncertain tax positions | 6,488 | 5,917 | ||
Amounts due to affiliates | 1,794,655 | 1,714,009 | 1,402 | |
Total liabilities | 1,811,694 | 1,721,457 | 2,608 | |
Stockholders’ equity | (199,807) | 23,103 | 1,669,427 | |
Total liabilities and stockholders' equity | 1,611,887 | 1,744,560 | 1,672,035 | |
Intersegment Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash & cash equivalents | (490) | $ (440) | ||
Total current assets | (490) | |||
Deferred tax assets and income taxes receivable | (29,951) | |||
Investments in subsidiaries | (1,708,103) | (1,847,638) | (1,367,692) | |
Amounts due from affiliates | (3,076,941) | (3,021,621) | (546,236) | |
Other assets | 0 | |||
Total assets | (4,785,044) | (4,869,259) | (1,944,369) | |
Customer banking deposits | (490) | |||
Total current liabilities | (490) | |||
Deferred tax liabilities and reserves for uncertain tax positions | (29,951) | |||
Amounts due to affiliates | (3,076,941) | (3,021,621) | (546,236) | |
Total liabilities | (3,076,941) | (3,021,621) | (576,677) | |
Stockholders’ equity | (1,708,103) | (1,847,638) | (1,367,692) | |
Total liabilities and stockholders' equity | $ (4,785,044) | $ (4,869,259) | $ (1,944,369) |
Condensed Consolidating Finan55
Condensed Consolidating Financial Statements (Cash Flows) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Apr. 30, 2016 | Apr. 30, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash used in operating activities: | $ (475,675) | $ (378,246) | ||
Sales, maturities of and payments received on AFS securities | 58 | 32,103 | ||
Principal payments on mortgage loans held for investment, net | 8,427 | 8,537 | ||
Capital expenditures | (6,246) | (8,689) | ||
Payments made for business acquisitions, net of cash acquired | (1,635) | (12,271) | ||
Loans made to franchisees | (2,219) | (2,582) | ||
Repayments from franchisees | 6,473 | 11,434 | ||
Other, net | 220 | 3,562 | ||
Net cash provided by (used in) investing activities | 5,078 | 32,094 | ||
Customer banking deposits, net | 0 | (268,532) | ||
Dividends paid | (48,514) | (55,063) | ||
Repurchase of common stock, including shares surrendered | (45,312) | (17,756) | ||
Proceeds from exercise of stock options | 1,639 | 13,015 | ||
Other, net | (24,779) | (22,413) | ||
Net cash used in financing activities | (116,966) | (350,749) | ||
Effects of exchange rates on cash | (2,367) | (10,907) | ||
Net decrease in cash and cash equivalents | (589,930) | (707,808) | ||
Cash & cash equivalents | 306,871 | 1,299,382 | $ 896,801 | $ 2,007,190 |
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Dividends paid | (48,514) | (55,063) | ||
Repurchase of common stock, including shares surrendered | (45,312) | (17,756) | ||
Proceeds from exercise of stock options | 1,639 | 13,015 | ||
Intercompany borrowings | 92,187 | 59,804 | ||
Block Financial Issuer [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash used in operating activities: | (57,939) | 27,342 | ||
Sales, maturities of and payments received on AFS securities | 58 | 28,339 | ||
Principal payments on mortgage loans held for investment, net | 8,427 | 8,537 | ||
Capital expenditures | (5) | (19) | ||
Loans made to franchisees | (2,202) | (2,582) | ||
Repayments from franchisees | 6,305 | 11,288 | ||
Intercompany payments/investments in subsidiaries | 40,217 | 2,226 | ||
Other, net | 16 | 1,439 | ||
Net cash provided by (used in) investing activities | 52,816 | 49,228 | ||
Customer banking deposits, net | (268,482) | |||
Net cash used in financing activities | (268,482) | |||
Net decrease in cash and cash equivalents | (5,123) | (191,912) | ||
Cash & cash equivalents | 3,902 | 286,165 | 9,025 | 478,077 |
Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net cash used in operating activities: | (417,736) | (405,588) | ||
Sales, maturities of and payments received on AFS securities | 3,764 | |||
Capital expenditures | (6,241) | (8,670) | ||
Payments made for business acquisitions, net of cash acquired | (1,635) | (12,271) | ||
Loans made to franchisees | (17) | |||
Repayments from franchisees | 168 | 146 | ||
Intercompany payments/investments in subsidiaries | (92,187) | (59,804) | ||
Other, net | 204 | 2,123 | ||
Net cash provided by (used in) investing activities | (99,708) | (74,712) | ||
Intercompany borrowings | (40,217) | (2,226) | ||
Other, net | (24,779) | (22,413) | ||
Net cash used in financing activities | (64,996) | (24,639) | ||
Effects of exchange rates on cash | (2,367) | (10,907) | ||
Net decrease in cash and cash equivalents | (584,807) | (515,846) | ||
Cash & cash equivalents | 302,969 | 1,013,707 | $ 887,776 | 1,529,553 |
Intersegment Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Intercompany payments/investments in subsidiaries | 51,970 | 57,578 | ||
Net cash provided by (used in) investing activities | 51,970 | 57,578 | ||
Customer banking deposits, net | (50) | |||
Intercompany borrowings | (51,970) | (57,578) | ||
Net cash used in financing activities | $ (51,970) | (57,628) | ||
Net decrease in cash and cash equivalents | (50) | |||
Cash & cash equivalents | $ (490) | $ (440) |