Company Quick10K Filing
H&R Block
Price23.64 EPS2
Shares200 P/E11
MCap4,729 P/FCF4
Net Debt1,278 EBIT362
TEV6,008 TEV/EBIT17
TTM 2019-10-31, in MM, except price, ratios
10-Q 2020-10-31 Filed 2020-12-08
10-Q 2020-07-31 Filed 2020-09-03
10-K 2020-04-30 Filed 2020-06-17
10-Q 2020-01-31 Filed 2020-03-09
10-Q 2019-10-31 Filed 2019-12-06
10-Q 2019-07-31 Filed 2019-09-06
10-K 2019-04-30 Filed 2019-06-14
10-Q 2019-01-31 Filed 2019-03-08
10-Q 2018-10-31 Filed 2018-12-07
10-Q 2018-07-31 Filed 2018-09-07
10-K 2018-04-30 Filed 2018-06-15
10-Q 2018-01-31 Filed 2018-03-08
10-Q 2017-10-31 Filed 2017-12-07
10-Q 2017-07-31 Filed 2017-09-01
10-K 2017-04-30 Filed 2017-06-16
10-Q 2017-01-31 Filed 2017-03-08
10-Q 2016-10-31 Filed 2016-12-08
10-Q 2016-07-31 Filed 2016-09-01
10-K 2016-04-30 Filed 2016-06-17
10-Q 2016-01-31 Filed 2016-03-11
10-Q 2015-10-31 Filed 2015-12-09
10-Q 2015-07-31 Filed 2015-09-04
10-K 2015-04-30 Filed 2015-06-17
10-Q 2015-01-31 Filed 2015-03-05
10-Q 2014-10-31 Filed 2014-12-09
10-Q 2014-07-31 Filed 2014-09-04
10-K 2014-04-30 Filed 2014-06-19
10-Q 2014-01-31 Filed 2014-03-06
10-Q 2013-10-31 Filed 2013-12-10
10-Q 2013-07-31 Filed 2013-09-05
10-K 2013-04-30 Filed 2013-06-26
10-Q 2013-01-31 Filed 2013-03-07
10-Q 2012-10-31 Filed 2012-12-06
10-Q 2012-07-31 Filed 2012-09-05
10-K 2012-04-30 Filed 2012-06-26
10-Q 2012-01-31 Filed 2012-03-07
10-Q 2011-10-31 Filed 2011-12-05
10-Q 2011-07-31 Filed 2011-09-01
10-K 2011-04-30 Filed 2011-06-23
10-Q 2011-01-31 Filed 2011-03-09
10-Q 2010-10-31 Filed 2010-12-08
10-Q 2010-07-31 Filed 2010-09-03
10-K 2010-04-30 Filed 2010-06-29
10-Q 2010-01-31 Filed 2010-03-08
8-K 2020-09-10
8-K 2020-09-01
8-K 2020-08-05
8-K 2020-08-04
8-K 2020-07-28
8-K 2020-07-15
8-K 2020-07-01
8-K 2020-06-16
8-K 2020-05-15
8-K 2020-03-26
8-K 2020-03-17
8-K 2020-03-05
8-K 2019-12-04
8-K 2019-11-07
8-K 2019-09-12
8-K 2019-08-28
8-K 2019-06-28
8-K 2019-06-20
8-K 2019-06-11
8-K 2019-06-10
8-K 2019-04-24
8-K 2019-03-07
8-K 2018-12-06
8-K 2018-11-15
8-K 2018-09-21
8-K 2018-09-13
8-K 2018-08-28
8-K 2018-08-20
8-K 2018-07-09
8-K 2018-06-25
8-K 2018-06-12
8-K 2018-04-24
8-K 2018-03-06
8-K 2018-01-22
8-K 2018-01-03

HRB 10Q Quarterly Report

Part I Financial Information
Item 1. Financial Statements
Note 1: Summary of Significant Accounting Policies
Note 2: Revenue Recognition
Note 3: Earnings (Loss) per Share and Stockholders' Equity
Note 4: Receivables
Note 5: Goodwill and Intangible Assets
Note 6: Long - Term Debt
Note 7: Income Taxes
Note 8: Other Income and Other Expenses
Note 9: Commitments and Contingencies
Note 10: Litigation and Other Related Contingencies
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 hrb20201031exhibit311.htm
EX-31.2 hrb20201031exhibit312.htm
EX-32.1 hrb20201031exhibit321.htm
EX-32.2 hrb20201031exhibit322.htm

H&R Block Earnings 2020-10-31

Balance SheetIncome StatementCash Flow
10.07.95.93.81.8-0.32012201420172020
Assets, Equity
2.62.01.50.90.4-0.22012201420172020
Rev, G Profit, Net Income
2.31.60.90.1-0.6-1.32012201420172020
Ops, Inv, Fin

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedOctober 31, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 1-06089

H&R Block, Inc.
(Exact name of registrant as specified in its charter)
Missouri44-0607856
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
One H&R Block Way, Kansas City, Missouri 64105
(Address of principal executive offices, including zip code)
(816) 854-3000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueHRBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes     No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes     No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer            Accelerated filer         Non-accelerated filer           Smaller reporting company      Emerging growth company
    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No  
The number of shares outstanding of the registrant's Common Stock, without par value, at the close of business on November 30, 2020: 183,418,345 shares.



Table of Contents

Form 10-Q for the Period Ended October 31, 2020
Table of Contents
Item 1.
Consolidated Statements of Operations and Comprehensive Loss
Three and six months ended October 31, 2020 and 2019
Consolidated Balance Sheets
As of October 31, 2020, October 31, 2019 and April 30, 2020
Consolidated Statements of Cash Flows
Six months ended October 31, 2020 and 2019
Consolidated Statements of Stockholders' Equity
Three and six months ended October 31, 2020 and 2019
Notes to Consolidated Financial Statements
Item 4.
Item 1.
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.Defaults Upon Senior Securities
Item 4.Mine Safety Disclosures
Exhibits



Table of Contents
PART I    FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(unaudited, in 000s, except 
per share amounts)
Three months ended October 31,Six months ended October 31,
2020201920202019
REVENUES:
Service revenues$160,962 $139,648 $711,913 $271,807 
Royalty, product and other revenues15,588 21,153 65,667 39,356 
176,550 160,801 777,580 311,163 
OPERATING EXPENSES:
Costs of revenues245,055 253,206 560,091 482,598 
Selling, general and administrative136,842 150,334 269,880 266,470 
Total operating expenses381,897 403,540 829,971 749,068 
Other income (expense), net(819)2,739 2,392 11,862 
Interest expense on borrowings(30,861)(21,306)(62,986)(42,377)
Loss from continuing operations before income taxes (benefit)(237,027)(261,306)(112,985)(468,420)
Income taxes (benefit)(14,547)(77,752)15,939 (139,142)
Net loss from continuing operations(222,480)(183,554)(128,924)(329,278)
Net loss from discontinued operations, net of tax benefits of $1,363, $1,327, $2,048 and $2,685
(1,246)(4,445)(3,543)(8,968)
NET LOSS$(223,726)$(187,999)$(132,467)$(338,246)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations$(1.17)$(0.93)$(0.68)$(1.65)
Discontinued operations(0.01)(0.02)(0.02)(0.04)
Consolidated$(1.18)$(0.95)$(0.70)$(1.69)
DIVIDENDS DECLARED PER SHARE$0.26 $0.26 $0.52 $0.52 
COMPREHENSIVE LOSS:
Net loss$(223,726)$(187,999)$(132,467)$(338,246)
Change in foreign currency translation adjustments2,330 919 19,869 (1,401)
Other comprehensive income (loss)2,330 919 19,869 (1,401)
Comprehensive loss$(221,396)$(187,080)$(112,598)$(339,647)
See accompanying notes to consolidated financial statements.
H&R Block, Inc. | Q2 FY2021 Form 10-Q
1

Table of Contents
CONSOLIDATED BALANCE SHEETS(unaudited, in 000s, except 
share and per share amounts)
As ofOctober 31, 2020October 31, 2019April 30, 2020
ASSETS
Cash and cash equivalents$208,956 $245,312 $2,661,914 
Cash and cash equivalents - restricted178,368 176,332 211,106 
Receivables, less allowance for credit losses of $66,808, $65,815 and $64,648
71,253 74,710 133,197 
Prepaid expenses and other current assets134,336 105,058 80,519 
Total current assets592,913 601,412 3,086,736 
Property and equipment, at cost, less accumulated depreciation and amortization of $832,080, $784,535 and $796,192
164,742 206,216 184,367 
Operating lease right of use asset445,727 475,969 494,788 
Intangible assets, net390,371 425,377 414,976 
Goodwill727,483 815,331 712,138 
Deferred tax assets and income taxes receivable172,842 145,807 151,195 
Other noncurrent assets62,351 86,629 67,847 
Total assets$2,556,429 $2,756,741 $5,112,047 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses$108,805 $111,439 $203,103 
Accrued salaries, wages and payroll taxes62,122 57,602 116,375 
Accrued income taxes and reserves for uncertain tax positions8,662 106,125 209,816 
Current portion of long-term debt 648,651 649,384 
Operating lease liabilities191,114 162,897 195,537 
Deferred revenue and other current liabilities181,900 177,243 201,401 
Total current liabilities552,603 1,263,957 1,575,616 
Long-term debt and line of credit borrowings1,559,093 980,299 2,845,873 
Deferred tax liabilities and reserves for uncertain tax positions353,751 180,362 182,441 
Operating lease liabilities268,312 326,691 312,566 
Deferred revenue and other noncurrent liabilities102,636 81,179 124,510 
Total liabilities2,836,395 2,832,488 5,041,006 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $0.01 per share, 800,000,000 shares authorized, shares issued of 218,719,439, 231,024,069 and 228,206,684
2,187 2,310 2,282 
Additional paid-in capital773,691 765,220 775,387 
Accumulated other comprehensive loss(31,707)(21,817)(51,576)
Retained earnings (deficit)(335,617)(122,535)42,965 
Less treasury shares, at cost, of 35,301,097, 35,778,404 and 35,731,376
(688,520)(698,925)(698,017)
Total stockholders' equity (deficiency)(279,966)(75,747)71,041 
Total liabilities and stockholders' equity$2,556,429 $2,756,741 $5,112,047 
See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in 000s)
Six months ended October 31,20202019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(132,467)$(338,246)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization77,307 81,262 
Provision4,578 1,890 
Deferred taxes7,855 12,595 
Stock-based compensation14,935 16,094 
Changes in assets and liabilities, net of acquisitions:
Receivables51,584 71,859 
Prepaid expenses, other current and noncurrent assets(16,271)13,889 
Accounts payable, accrued expenses, salaries, wages and payroll taxes(141,905)(267,257)
Deferred revenue, other current and noncurrent liabilities(41,855)(74,996)
Income tax receivables, accrued income taxes and income tax reserves(87,333)(206,278)
Other, net833 (4,128)
Net cash used in operating activities(262,739)(693,316)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(26,584)(42,854)
Payments made for business acquisitions, net of cash acquired(3,674)(416,925)
Franchise loans funded(11,922)(16,021)
Payments from franchisees18,321 7,902 
Other, net427 50,839 
Net cash used in investing activities(23,432)(417,059)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings(2,000,000) 
Proceeds from line of credit borrowings70,000 135,000 
Repayments of long-term debt(650,000) 
Proceeds from issuance of long-term debt647,965  
Dividends paid(100,198)(104,063)
Repurchase of common stock, including shares surrendered(153,154)(190,369)
Proceeds from exercise of stock options1,133 1,215 
Other, net(21,691)(18,544)
Net cash used in financing activities(2,205,945)(176,761)
Effects of exchange rate changes on cash6,420 1,053 
Net decrease in cash and cash equivalents, including restricted balances(2,485,696)(1,286,083)
Cash, cash equivalents and restricted cash, beginning of period2,873,020 1,707,727 
Cash, cash equivalents and restricted cash, end of period$387,324 $421,644 
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received$94,066 $54,109 
Interest paid on borrowings61,183 39,952 
Accrued additions to property and equipment3,092 3,409 
New operating right of use assets and related lease liabilities71,537 204,962 
See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(amounts in 000s, except per share amounts)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Income (Loss)
Retained
Earnings
(Deficit)
Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances as of May 1, 2020228,207 $2,282 $775,387 $(51,576)$42,965 (35,731)$(698,017)$71,041 
Net income    91,259   91,259 
Other comprehensive income   17,539    17,539 
Stock-based compensation  7,422     7,422 
Stock-based awards exercised or vested  (10,027) (1,247)627 12,247 973 
Acquisition of treasury shares(1)
     (204)(2,913)(2,913)
Cash dividends declared - $0.26 per share
    (50,044)  (50,044)
Balances as of July 31, 2020228,207 $2,282 $772,782 $(34,037)$82,933 (35,308)$(688,683)$135,277 
Net loss    (223,726)  (223,726)
Other comprehensive income   2,330    2,330 
Stock-based compensation  6,768     6,768 
Stock-based awards exercised or vested  (262) (220)13 262 (220)
Acquisition of treasury shares(1)
     (6)(99)(99)
Repurchase and retirement of common shares(9,488)(95)(5,597) (144,450)  (150,142)
Cash dividends declared - $0.26 per share
    (50,154)  (50,154)
Balances as of October 31, 2020218,719 $2,187 $773,691 $(31,707)$(335,617)(35,301)$(688,520)$(279,966)
(1)    Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(amounts in 000s, except per share amounts)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Income (Loss)
Retained
Earnings
(Deficit)
Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances as of May 1, 2019238,337 $2,383 $767,636 $(20,416)$499,386 (36,377)$(707,462)$541,527 
Net loss— — — — (150,247)— — (150,247)
Other comprehensive loss— — — (2,320)— — — (2,320)
Stock-based compensation— — 6,557 — — — — 6,557 
Stock-based awards exercised or vested— — (13,789)— (2,786)906 17,631 1,056 
Acquisition of treasury shares(1)
— — — — — (314)(9,185)(9,185)
Repurchase and retirement of common shares(1,593)(16)(955)— (43,101)— — (44,072)
Cash dividends declared - $0.26 per share
— — — — (52,512)— — (52,512)
Balances as of July 31, 2019236,744 $2,367 $759,449 $(22,736)$250,740 (35,785)$(699,016)$290,804 
Net loss— — — — (187,999)— — (187,999)
Other comprehensive income— — — 919 — — — 919 
Stock-based compensation— — 9,331 — — — — 9,331 
Stock-based awards exercised or vested— — (127)— (276)13 264 (139)
Acquisition of treasury shares(1)
— — — — — (6)(173)(173)
Repurchase and retirement of common shares(5,720)(57)(3,433)— (133,449)— — (136,939)
Cash dividends declared - $0.26 per share
— — — — (51,551)— — (51,551)
Balances as of October 31, 2019231,024 $2,310 $765,220 $(21,817)$(122,535)(35,778)$(698,925)$(75,747)
(1)    Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 (unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATIONThe consolidated balance sheets as of October 31, 2020 and 2019, the consolidated statements of operations and comprehensive loss for the three and six months ended October 31, 2020 and 2019, the consolidated statements of cash flows for the six months ended October 31, 2020 and 2019, and the consolidated statements of stockholders' equity for the three and six months ended October 31, 2020 and 2019 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 October 31, 2020 and 2019 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 United States (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, 2020 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of April 30, 2020 or for the year then ended are derived from our Annual Report on Form 10-K.
MANAGEMENT ESTIMATESThe 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, reserves for uncertain tax positions, fair value of reporting units, 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 – Because the majority of our clients file their tax returns during the period from February through April in a typical year, a substantial majority of our revenues from income tax return preparation and related services and products are earned during this period. As a result, we generally operate at a loss through the first three quarters of our fiscal year. As a result of the COVID-19 pandemic, on March 21, 2020, the federal tax filing deadline in the United States (U.S.) for individual 2019 tax returns was extended from April 15, 2020 to July 15, 2020. Substantially all U.S. states with an April 15 individual state income tax filing requirement extended their respective deadlines. In Canada, the deadline for individuals to file was extended to June 1, 2020. These extensions impacted the typical seasonality of our business and the comparability of our financial results. Consequently, a portion of revenues and expenses that would have normally been recognized in our fourth quarter of fiscal year 2020 shifted to the first two quarters of fiscal year 2021. Results for interim periods are not indicative of results to be expected for the full fiscal 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 note 10 for additional information on litigation, claims, and other loss contingencies related to our discontinued operations.
NEW ACCOUNTING PRONOUNCEMENTS – 
Current Expected Credit Losses. In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-13 (ASU 2016-13), "Measurement of Credit Losses on Financial Instruments," which replaces the existing incurred credit loss model for an expected credit loss model. We adopted ASU 2016-13 as of May 1, 2020, which did not have a material impact on our consolidated financial statements.
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NOTE 2: REVENUE RECOGNITION
The majority of our revenues are from our U.S. Tax Services business. The following table disaggregates our U.S. Tax Services revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:
(in 000s)
Three months ended October 31,Six months ended October 31,
2020201920202019
Revenues:
U.S. assisted tax preparation$48,922 $41,226 $386,650 $74,218