Attached files
| file | filename |
|---|---|
| 8-K - RSM MCGLADREY CLOSING - H&R BLOCK INC | form8k-113011.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated income statements are derived from the historical consolidated financial statements of H&R Block, Inc. (HRB) and give effect to the transfer of the results of operations of RSM McGladrey, Inc. (RSM) and RSM EquiCo, Inc. (EquiCo) to discontinued operations on the condensed consolidated income statements. EquiCo was not part of the merger agreement noted in Item 2.01 above, however, concurrent with the announced sale of RSM, HRB’s Board of Directors announced it was evaluating strategic alternatives for EquiCo. Therefore, EquiCo’s results of operations are included in discontinued operations in the pro forma financial statements below. The
ultimate disposition of EquiCo will not have a material impact on HRB’s financial statements.
The unaudited pro forma condensed consolidated income statements for the years ended April 30, 2011, 2010 and 2009 are included below. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical audited consolidated financial statements and notes thereto included in HRB’s Form 10-K for the year ended April 30, 2011 and Form 10-Q for the six months ended October 31, 2011, as filed with the Securities and Exchange Commission.
The condensed consolidated balance sheets as of October 31, 2011 and April 30, 2011 included in the Form 10-Q for the period ending October 31, 2011, include all entries necessary to present the assets and liabilities of RSM and EquiCo as held-for-sale, but do not include cash proceeds and the note receivable resulting from the sale of RSM discussed in Item 2.01 above.
The pro forma adjustments are based upon information and assumptions available at the time of the filing of this Current Report on Form 8-K. HRB will continue to provide certain support services to RSM after the date of sale under a transition services agreement. The impact of this agreement is not estimable at this time and is not reflected in these unaudited pro forma financial statements.
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENTS
Unaudited, amounts in thousands, except per share amounts
|
Year ended April 30,
|
2011
|
2010
|
2009
|
||||||||||||||||
|
As reported
|
Amounts Transferred to Discontinued Operations
|
As Adjusted
|
As reported
|
Amounts Transferred to Discontinued Operations
|
As Adjusted
|
As reported
|
Amounts Transferred to Discontinued Operations
|
As Adjusted
|
|||||||||||
|
Revenues:
|
|||||||||||||||||||
|
Service revenues
|
$ 3,225,861
|
$ (797,757)
|
$ 2,428,104
|
$ 3,231,487
|
$ (823,939)
|
$ 2,407,548
|
$ 3,437,906
|
$ (859,639)
|
$ 2,578,267
|
||||||||||
|
Product and other revenues
|
414,282
|
(31,066)
|
383,216
|
520,440
|
(31,513)
|
488,927
|
491,155
|
(30,807)
|
460,348
|
||||||||||
|
Interest income
|
134,153
|
(493)
|
133,660
|
122,405
|
(4,045)
|
118,360
|
154,516
|
(6,002)
|
148,514
|
||||||||||
|
3,774,296
|
(829,316)
|
2,944,980
|
3,874,332
|
(859,497)
|
3,014,835
|
4,083,577
|
(896,448)
|
3,187,129
|
|||||||||||
|
Operating expenses:
|
|||||||||||||||||||
|
Cost of revenues
|
2,414,590
|
(637,808)
|
1,776,782
|
2,467,996
|
(647,579)
|
1,820,417
|
2,596,218
|
(663,062)
|
1,933,156
|
||||||||||
|
Selling, general and administrative
|
694,136
|
(142,277)
|
551,859
|
631,499
|
(150,895)
|
480,604
|
648,490
|
(130,391)
|
518,099
|
||||||||||
|
3,108,726
|
(780,085)
|
2,328,641
|
3,099,495
|
(798,474)
|
2,301,021
|
3,244,708
|
(793,453)
|
2,451,255
|
|||||||||||
|
Operating income
|
665,570
|
(49,231)
|
616,339
|
774,837
|
(61,023)
|
713,814
|
838,869
|
(102,995)
|
735,874
|
||||||||||
|
Other income, net
|
11,455
|
(91)
|
11,364
|
9,298
|
302
|
9,600
|
501
|
(243)
|
258
|
||||||||||
|
Income from continuing operations before taxes
|
677,025
|
(49,322)
|
627,703
|
784,135
|
(60,721)
|
723,414
|
839,370
|
(103,238)
|
736,132
|
||||||||||
|
Income taxes
|
257,620
|
(22,464)
|
235,156
|
295,189
|
(26,898)
|
268,291
|
326,315
|
(43,222)
|
283,093
|
||||||||||
|
Net income from continuing operations
|
419,405
|
(26,858)
|
392,547
|
488,946
|
(33,823)
|
455,123
|
513,055
|
(60,016)
|
453,039
|
||||||||||
|
Net income (loss) from discontinued operations
|
(13,295)
|
26,858
|
13,563
|
(9,704)
|
33,823
|
24,119
|
(27,382)
|
60,016
|
32,634
|
||||||||||
|
Net income
|
$ 406,110
|
$ -
|
$ 406,110
|
$ 479,242
|
$ -
|
$ 479,242
|
$ 485,673
|
$ -
|
$ 485,673
|
||||||||||
|
Basic earnings (loss) per share:
|
|||||||||||||||||||
|
Net income from continuing operations
|
$ 1.35
|
$ (0.08)
|
$ 1.27
|
$ 1.47
|
$ (0.10)
|
$ 1.37
|
$ 1.53
|
$ (0.18)
|
$ 1.35
|
||||||||||
|
Net income (loss) from discontinued operations
|
(0.04)
|
0.08
|
0.04
|
(0.03)
|
0.10
|
0.07
|
(0.08)
|
0.18
|
0.10
|
||||||||||
|
Net income
|
$ 1.31
|
$ -
|
$ 1.31
|
$ 1.44
|
$ -
|
$ 1.44
|
$ 1.45
|
$ -
|
$ 1.45
|
||||||||||
|
Basic shares outstanding
|
309,230
|
309,230
|
332,283
|
332,283
|
332,787
|
332,787
|
|||||||||||||
|
Diluted earnings (loss) per share:
|
|||||||||||||||||||
|
Net income from continuing operations
|
$ 1.35
|
$ (0.08)
|
$ 1.27
|
$ 1.46
|
$ (0.10)
|
$ 1.36
|
$ 1.53
|
$ (0.18)
|
$ 1.35
|
||||||||||
|
Net income (loss) from discontinued operations
|
(0.04)
|
0.08
|
0.04
|
(0.03)
|
0.10
|
0.07
|
(0.08)
|
0.18
|
0.10
|
||||||||||
|
Net income
|
$ 1.31
|
$ -
|
$ 1.31
|
$ 1.43
|
$ -
|
$ 1.43
|
$ 1.45
|
$ -
|
$ 1.45
|
||||||||||
|
Diluted shares outstanding
|
309,777
|
309,777
|
333,236
|
333,236
|
334,539
|
334,539
|
|||||||||||||
Note: The unaudited condensed consolidated income statements present the results of operations of our RSM-related businesses as discontinued operations.